SEC Registration Nos.
33-45829 and 811-06563
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
Post-Effective Amendment No. 10 XX
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Post-Effective Amendment No. 10 XX
Calvert World Values Fund, Inc.
(Exact Name of Registrant as Specified in Charter)
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
(Address of Principal Executive Offices)
Registrant's Telephone Number: (301) 951-4800
William M. Tartikoff, Esq.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
XX Immediately upon filing __ on (date)
pursuant to paragraph (b) pursuant to paragraph (b)
__ 60 days after filing __ on (date)
pursuant to paragraph (a) pursuant to paragraph (a)
of Rule 485.
<PAGE>
Calvert World Values Fund, Inc.
Form N-1A Cross Reference Sheet
Item number Prospectus Caption
1. Cover Page
2. Fund Expenses
3. Financial Highlights
Yield or Total Return
4. Investment Objective and Policies
Management of the Fund
5. Management of the Fund
6. Alternative Sales Options
Management of the Fund
Dividends and Taxes
7. How to Buy Shares
Management of the Fund
Net Asset Value
Reduced Sales Charges
When Your Account Will Be Credited
Exchanges
8. Alternative Sales Options
How to Sell Your Shares
9. *
Statement of Additional Information Caption
10. Cover Page
11. Table of Contents
12. General Information
13. Investment Objective and Policies
Investment Restrictions
Portfolio Transactions
14. Directors and Officers
15. Directors and Officers
16. Investment Advisor
Administrative Services
Independent Accountants and Custodians
Method of Distribution
17. Portfolio Transactions
18. General Information
19. Purchase and Redemptions of Shares
Valuation of Shares
20. Tax Matters
21. Administrative Services
22. Calculation of Yield and Total Return
23. Financial Statements
* Inapplicable or negative answer
<PAGE>
PROSPECTUS May 1, 1998
CALVERT CAPITAL ACCUMULATION FUND
CALVERT NEW VISION SMALL CAP FUND
4550 Montgomery Avenue, Bethesda, Maryland 20814
Calvert Capital Accumulation Fund seeks long-term capital appreciation by
investing primarily in the stock of medium-sized companies using the talent of
one or more investment subadvisors. The market capitalization of companies
chosen for investment will generally be within the range of capitalization of
the S&P 400 Mid-Cap Index, but the Fund may also invest in larger and smaller
companies as deemed appropriate. It is the Advisor's intent that on average,
the market capitalization of the companies represented in the Fund's portfolio
will be mid-sized, with a slight bias toward the growth-style of investing.
Other investments may include foreign securities, convertible issues, and
certain options and futures transactions. The Fund will take reasonable risks
in seeking to achieve its investment objective.
Calvert New Vision Small Cap Fund seeks to achieve long-term capital
appreciation by investing primarily in the equity securities of small
companies (currently those with a total capitalization of less than $1 billion
at the time of the Fund's initial investment) publicly traded in the United
States. In seeking capital appreciation, the Fund invests primarily in the
equity securities of small capitalized growth companies (including American
Depositary Receipts ("ADRs")) that have historically exhibited exceptional
growth characteristics and that, in the Advisor's opinion, have strong
earnings potential relative to the U.S. market as a whole. The Fund employs
aggressive investment strategies that have the potential for yielding high
returns. The Fund will take reasonable risks in seeking to achieve its
investment objective.
Share prices of both Funds may experience substantial fluctuations so that
your shares may be worth less than when you originally purchased them. Income
is not an objective of either Fund; the Funds should not be used to meet
short-term financial needs. There can be no assurance that either Fund will be
successful in meeting its investment objective.
Responsible Investing
To the extent possible, investments are made in enterprises that make a
significant contribution to our society through their products and services
and through the way they do business.
Purchase Information
The Funds both offer three classes of shares, each with different expense
levels and sales charges. You may choose to purchase (i) Class A shares, with
a sales charge imposed at the time you purchase the shares ("front-end sales
charge"); (ii) Class B shares, which impose no front-end sales charge, but
will impose a deferred sales charge at the time of redemption, depending on
how long you have owned the shares )("contingent deferred sales charge," or
"CDSC"), or (iii) Class C shares which impose no front-end sales charge but
will impose a CDSC on shares purchased after May 31, 1998, if they are sold
within one year. Class C shares are not available through all dealers. Class B
and C shares have a higher level of expenses than Class A shares, including
higher Rule 12b-1 fees. These alternatives permit you to choose the method of
purchasing shares that is most beneficial to you, depending on the amount of
the purchase, the length of time you expect to hold the shares, and other
circumstances. See "Alternative Sales Options" for further details.
To Open An Account
Call your investment professional, or complete and return the enclosed Account
Application. Minimum initial investment is $2,000 (may be lower for certain
retirement plans).
About This Prospectus
Please read this Prospectus for information you should know before investing,
and keep it for future reference. A Statement of Additional Information
("SAI") (dated May 1, 1998) has been filed with the Securities and Exchange
Commission (the "Commission") and is incorporated by reference. This free
Statement is available upon request from the Fund: 800-368-2748. The
Commission maintains a website (http://www.sec.gov) that contains the SAI,
material incorporated by reference, and other information regarding
registrants that file electronically with the Commission.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE FEDERAL OR
ANY STATE SECURITIES COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FDIC, THE FEDERAL
RESERVE BOARD, OR ANY OTHER AGENCY. WHEN INVESTORS SELL SHARES OF THE FUND,
THE VALUE MAY BE HIGHER OR LOWER THAN THE AMOUNT ORIGINALLY PAID.
<PAGE>
FUND EXPENSES
Capital Accumulation Fund
A. Shareholder Transaction Costs Class A Class B Class C
Maximum Front-End Sales Charge
on Purchases (as a percentage of
offering price) 4.75% None None
Maximum Contingent Deferred Sales Charge
(as percentage of original purchase
price or redemption proceeds,
as applicable None 5.00%* 1.00%**
B. Annual Fund Operating Expenses (Fiscal Year 1997)
(as a percentage of average net assets)
Management Fees 0.89% 0.90% 0.90%
Rule 12b-1 Service and
Distribution Fees 0.35% 1.00% 1.00%
Other Expenses 0.66% 1.46% 1.21%
Total Fund Operating Expenses2 1.91% 3.36% 3.11%
New Vision Small Cap Fund
A. Shareholder Transaction Costs Class A Class B Class C
Maximum Front-End Sales Charge
on Purchases (as a percentage of
offering price) 4.75% None None
Maximum Contingent Deferred Sales Charge
(as percentage of original purchase
price or redemption proceeds,
as applicable None 5.00%* 1.00%**
B. Annual Fund Operating Expenses (Fiscal Year 1997)
(as a percentage of average net assets)
Management Fees 1.00% 1.00% 1.00%
Rule 12b-1 Service and
Distribution Fees 0.25% 1.00% 1.00%
Other Expenses 0.62% 0.99% 0.74%3
Total Fund Operating Expenses2 1.87% 2.99% 2.74%
* A contingent deferred sales charge is imposed on the proceeds of Class B
shares redeemed within 6 years, subject to certain exceptions. That charge is
imposed as a percentage of net asset value at the time of purchase or
redemption, whichever is less and declines from 5% in the first year that
shares are held, to 4% in the second and third years, 3% in the fourth year,
2% in the fifth year, and 1% in the sixth year. There is no charge on
redemptions of Class B shares held for more than six years. See "Calculation
of Contingent Deferred Sales charge" below.
** A contingent deferred sales charge is imposed on the proceeds of Class C
shares redeemed within one year. That charge is imposed as a percentage of net
asset value at the time of purchase or redemption, whichever is less. See
"Calculation of Contingent deferred Sales Charge."
2 Net Fund Operating Expenses after reduction for fees paid indirectly for the
Capital Accumulation fund were:
Class A - 1.85%, Class C - 3.05%
3 Estimated
C. Example:
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return; (2) redemption at the end of each period; (3) for Class A,
payment of maximum initial sales charge at time of purchase, and (4) for Class
B shares, payment of maximum applicable contingent deferred sales charge.
1 Year 3 Years 5 Years 10 Years
Capital Accumulation Fund
Class A $66 $105 $146 $260
Class B
Assuming a complete
redemption at end of period $84 $143 $195 $332
Assuming no redemption $34 $103 $175 $332
Class C
Assuming a complete
redemption at end of period $41 $96 $163 $342
Assuming no redemption $31 $96 $163 $342
New Vision Small Cap Fund
Class A $66 $103 $144 $256
Class B
Assuming a complete
redemption at end of period $80 $132 $177 $305
Assuming no redemption $30 $92 $157 $305
Class C
Assuming a complete
redemption at end of period $38 $85 $145 $307
Assuming no redemption $28 $85 $145 $307
The example should not be considered a representation of past or future
expenses. Actual expenses and return may be higher or lower than those shown.
Explanation of Table: The purpose of the table is to assist you in
understanding the various costs and expenses that an investor in the Fund
would bear directly (shareholder transaction costs) or indirectly (annual fund
operating expenses).
A. Shareholder Transaction Costs
are charges you pay when you buy or sell shares of the Fund. See "Reduced
Sales Charges" to see if you qualify for possible reductions in the sales
charge. If you request a wire redemption of less than $1,000, you will be
charged a $5 wire fee.
B. Annual Fund Operating Expenses
are based on fiscal 1997 historical expenses, except for Class B of the
Capital Accumulation Fund and the New Vision Small Cap Fund. Management fees
are paid by the Funds to the Advisor for managing the Fund's investments and
business affairs. Management fees include the subadvisory fees paid by Calvert
Asset Management Company, Inc. (the "Advisor") to the various subadvisors and
the administrative service fee paid to Calvert Administrative Services
Company. Management Fees have been restated to reflect expenses anticipated in
the current fiscal year. (See "Management of the Fund") The Management fees
for the Capital Accumulation Fund are subject to a performance adjustment
which could cause the fee to be as high as 0.95% or as low as 0.65%, depending
on performance. The Funds incur Other Expenses for maintaining shareholder
records, furnishing shareholder statements and reports, and other services.
Management Fees and Other Expenses have already been reflected in the Funds'
daily share price and are not charged directly to individual shareholder
accounts. Please refer to "Management of the Fund" for further information.
The Advisor may voluntarily defer fees or assume expenses of the Funds. The
respective Investment Advisory Agreements provide that the Advisor may, to the
extent permitted by law, later recapture any fees it deferred or expenses it
assumed during the two prior years.
The Funds' Rule 12b-1 fees include an asset-based sales charge. Thus,
long-term shareholders in each Fund may pay more in total sales charges than
the economic equivalent of the maximum front-end sales charge permitted by
rules of the National Association of Securities Dealers, Inc. In addition to
the compensation itemized above (sales charge and Rule 12b-1 service and
distribution fees), certain broker/dealers and/or their salespersons may
receive certain compensation for the sale and distribution of the securities
or for services to the Funds. See the SAI, "Method of Distribution."
<PAGE>
FINANCIAL HIGHLIGHTS
The following table provides information about the financial history of the
Funds' Class A and C shares. It expresses the information in terms of a single
share outstanding for the Fund throughout each period. No Class B Shares were
outstanding during the periods presented. The table has been audited by
Coopers & Lybrand, L.L.P., independent accountants, whose report on the period
from the Funds' commencement of operation through September 30, 1997 is
included in the Annual Reports to Shareholders for each of the respective
periods presented. The table should be read in conjunction with the financial
statements and their related notes. The Annual Report to Shareholders is
incorporated by reference into the Statement of Additional Information.
Class A Shares
From Oct. 31,
Year Ended September 30, 1994
(Inception)
1997 1996 to Sept. 30,
1995
Capital Accumulation Fund
Net asset value, beginning of period $22.55 $21.48 $15.00
Income from investment operations
Net investment income (loss) (.25) (.24) (.11)
Net realized and unrealized gain (loss) 4.91 1.88 6.61
Total from investment operations 4.66 1.64 6.50
Distributions from
Net investment income - - (.02)
Net realized gains - (.57) -
Total Distributions - (.57) (.02)
Total increase (decrease) in
net asset value 4.66 1.07 6.48
Net asset value, ending $27.21 $22.55 $21.48
Total return4 20.67% 7.92% 43.40%
Ratio to average net assets:
Net investment income (loss) (1.09%) (1.56%) (1.55%)(a)
Total expenses5 1.91% 2.16% 2.35%(a)
Net expenses 1.85% 1.98% 2.06%(a)
Expenses reimbursed - - .05%(a)
Portfolio turnover 126% 114% 95%
Average commission rate paid $.0530 $.0563 $-
Net assets, ending (in thousands) $54,751 $39,834 $16,111
Number of shares outstanding,
ending (in thousands) 2,012 1,767 750
4 Total return is not annualized and does not reflect deduction of Class A
front-end sales charges.
5 This ratio reflects total expenses before reduction for fees paid
indirectly; such reductions are included in the ratio of net expenses.
(a) Annualized
Class C Shares
From October
31,
Year Ended September 30, 1994
(Inception)
1997 1996 to Sept. 30,
1995
Capital Accumulation Fund
Net asset value, beginning of period $22.34 $21.55 $15.00
Income from investment operations
Net investment income (loss) (.47) (.55) (.15)
Net realized and unrealized gain (loss) 4.77 1.91 6.70
Total from investment operations 4.30 1.36 6.55
Distributions from
Net investment income - - -
Net realized gains - (.57) -
Total Distributions - (.57) -
Total increase (decrease) in
net asset value 4.30 .79 6.55
Net asset value, ending $26.64 $22.34 $21.55
Total return6 19.25% 6.56% 43.67%
Ratio to average net assets:
Net investment income (loss) (2.30%) (2.82%) (3.13%)(a)
Total expenses7 3.11% 3.42% 3.79%(a)
Net expenses 3.05% 3.24% 3.50%(a)
Expenses reimbursed - - 2.79%(a)
Portfolio turnover 126% 114% 95%
Average commission rate paid $.0530 $.0563 $-
Net assets, ending (in thousands) $4,184 $3,164 $1,992
Number of shares outstanding,
ending (in thousands) 157 142 92
Class A Shares
From January 31, 1997
(inception) to
Sept. 30, 1997
New Vision Small Cap Fund
Net asset value, beginning of period $15.00
Income from investment operations
Net investment income (loss) (.05)
Net realized and unrealized gain (loss) .70
Total from investment operations .65
Distributions from
Net investment income -
Net realized gains -
Total Distributions -
Total increase (decrease) in
net asset value .65
Net asset value, ending $15.65
Total return6 4.33%
Ratio to average net assets:
Net investment income (loss) (.71%)(a)
Total expenses7 1.36%(a)
Net expenses .90%(a)
Expenses reimbursed 3.36%(a)
Portfolio turnover 196%
Average commission rate paid $.0488
Net assets, ending (in thousands) $3,260
Number of shares outstanding, 208
ending (in thousands)
6 Total return is not annualized and does not reflect deduction of Class A
front-end sales charges.
7 This ratio reflects total expenses before reduction for fees paid
indirectly; such reductions are included in the ratio of net expenses.
(a) Annualized
<PAGE>
Class C Shares
From January 31
(inception) to
September
30, 1997
New Vision Small Cap Fund
Net asset value, beginning of period $15.00
Income from investment operations
Net investment income (loss) (.10)
Net realized and unrealized gain (loss) .72
Total from investment operations .62
Distributions from
Net investment income -
Net realized gains -
Total Distributions -
Total increase (decrease) in
net asset value .62
Net asset value, ending $15.62
Total return6 4.13%
Ratio to average net assets:
Net investment income (loss) (.95%)(a)
Total expenses7 1.47%(a)
Net expenses 1.15%(a)
Expenses reimbursed 9.44%(a)
Portfolio turnover 196%
Average commission rate paid $.0488
Net assets, ending (in thousands) $318
Number of shares outstanding,
ending (in thousands) 20
6 Total return is not annualized and does not reflect deduction of Class A
front-end sales charges.
7 This ratio reflects total expenses before reduction for fees paid
indirectly; such reductions are included in the ratio of net expenses.
(a) Annualized
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
Capital Accumulation Fund
The Capital Accumulation Fund seeks to provide long-term capital appreciation
by investing, under normal market conditions, at least 65% of its assets in
the equity securities of mid-sized companies. It invests primarily in a
nondiversified portfolio of the equity securities of mid-sized companies that
are undervalued but demonstrate a potential for growth. The Fund will rely on
its proprietary research to identify stocks that may have been overlooked by
analysts, investors, and the media, and which will generally be within the
range of capitalization of the S&P 400 Mid-Cap Index, but which may be larger
or smaller as deemed appropriate. Investments may also include, but are not
limited to, preferred stocks, foreign securities, convertible securities,
bonds, notes and other debt securities. The Fund may use certain futures and
options, invest in repurchase agreements, and lend its portfolio securities.
The Fund will take reasonable risks in seeking to achieve its investment
objective. There is, of course, no assurance that the Fund will be successful
in meeting its objective since there is risk involved in the ownership of all
equity securities. The Fund's investment objective is not fundamental and may
be changed without shareholder approval. The Fund will notify shareholders at
least thirty days in advance of a change in the investment objective of the
Fund so that shareholders may determine whether the Fund's goals continue to
meet their own.
New Vision Small Cap Fund
The Calvert New Vision Small Cap Fund seeks to provide long-term capital
appreciation by investing primarily in equity securities of companies that
have small market capitalizations. In seeking capital appreciation, the Fund
invests primarily in equity securities of small capitalized growth companies
that have historically exhibited exceptional growth characteristics and that,
in the Advisor's opinion, have strong earnings potential relative to the U.S.
market as a whole. The Fund's investment objective is not fundamental and may
be changed without shareholder approval.
The New Vision Small Cap Fund pursues the objective of capital appreciation by
investing primarily in equity securities of small companies with promising
growth potential. These companies typically are developing innovative products
or services to seize emerging opportunities.
Under normal circumstances, the New Vision Small Cap Fund will invest at least
65% of its total assets in equity securities of companies publicly traded in
the United States (currently those with a total market capitalization of under
$1 billion at the time of the Fund's initial investment).
The New Vision Small Cap Fund considers issuers of all industries with
operations in all geographic markets, and does not seek interest income or
dividends. Equity securities may include common stocks, preferred stocks,
convertible securities and warrants. The Fund may hold cash or cash
equivalents for temporary defensive purposes or to enable it to take advantage
of buying opportunities. There is, of course, no assurance that the Fund will
be successful in meeting its objective.
Companies whose capitalization increases or decreases after initial purchase
by the Fund continue to be considered small-capitalized for purposes of the
65% policy. Accordingly, less than 65% of the Fund's total assets may be
invested in securities of issuers of companies publicly traded in the United
States (currently those with a total market capitalization of less than $1
billion).
The New Vision Small Cap Fund will normally be as fully invested as
practicable in common stocks (including ADRs), but also may invest in warrants
and rights to purchase common stocks and in debt securities and preferred
stocks convertible into common stocks (collectively, "equity securities").
INVESTMENT TECHNIQUES AND RISKS
Risks
A company's market capitalization is the total market value of its outstanding
equity securities. The value of the Fund's investments will vary from day to
day, and generally reflect market conditions, interest rates and other
company, political, or economic news. In the short-term, stock prices can
fluctuate dramatically in response to these factors. Over time, however,
stocks have shown greater growth potential than other types of securities.
Nondiversified
There may be risks associated with the Capital Accumulation Fund being
nondiversified. Specifically, since a relatively high percentage of the assets
of the Capital Accumulation Fund may be invested in the obligations of a
limited number of issuers, the value of the shares of the Capital Accumulation
Fund may be more susceptible to any single economic, political or regulatory
event than the shares of a diversified fund would be.
Small Cap Issuers
While any investment in securities carries a certain degree of risk, the
approach of the Fund is designed to maximize growth in relation to the risks
assumed. The securities of small cap issuers may be less actively traded than
the securities of larger issuers, may trade in a more limited volume, and may
change in value more abruptly than securities of larger companies.
Information concerning these securities may not be readily available so that
the companies may be less actively followed by stock analysts. Small-cap
issuers do not usually participate in market rallies to the same extent as
more widely-known securities, and they tend to have a relatively higher
percentage of insider ownership.
Investing in smaller, new issuers generally involves greater risk than
investing in larger, established issuers. Companies in which the Fund is
likely to invest may have limited product lines, markets or financial
resources and may lack management depth. The securities in such companies may
also have limited marketability and may be subject to more abrupt or erratic
market movements than securities of larger, more established companies or the
market averages in general. Accordingly an investment in the Fund may not be
appropriate for all investors.
Temporary defensive positions
Under normal market conditions the Fund strives to be fully invested in
securities. However, for temporary defensive purposes - which may include a
lack of adequate purchase candidates or an unfavorable market environment -
the Capital Accumulation Fund may invest up to 100% of its total assets, and
the New Vision Small Cap Fund may invest up to 35% of its total assets, in
cash or cash equivalents. Cash equivalents include instruments such as, but
not limited to, U.S. government and agency obligations, certificates of
deposit, bankers' acceptances, time deposits, commercial paper, short-term
corporate debt securities and repurchase agreements.
The Fund currently intends to invest no more than 5% of its net assets in
noninvestment-grade debt obligations. Although the Capital Accumulation Fund
invests primarily in equity securities, it may invest in debt securities and,
although the New Vision Small Cap Fund also invests primarily in equity
securities, it may invest up to 35% of its total assets in debt securities,
excluding money market instruments. These debt securities may consist of
investment-grade and noninvestment-grade obligations. Investment-grade
obligations are those which, at the date of investment, are rated within the
four highest grades established by Moody's Investors Services, Inc. (Aaa, Aa,
A, or Baa) or by Standard and Poor's Corporation (AAA, AA, A, or BBB), or, if
unrated, are deemed to be of comparable quality by the Advisor.
Noninvestment-grade securities are those rated below Baa or BBB, or unrated
obligations that the investment subadvisor has determined are not
investment-grade; such securities are speculative in nature, the Funds
currently intend to limit such investments to 5% of their respective net
assets. The Funds will not buy debt securities rated lower than C.
Interest-rate risk
All fixed income instruments are subject to interest-rate risk: that is, if
market interest rates rise, the current principal value of a bond will
decline. In general, the longer the maturity of the bond, the greater the
decline in value will be.
The Fund may use options and futures as defensive strategies.
The Capital Accumulation Fund may attempt to reduce the overall risk of its
investments by using options and futures contracts. An option is a legal
contract that gives the holder the right to buy or sell a specified amount of
the underlying interest at a fixed or determinable price (called the exercise
or strike price) upon exercise of the option. A futures contract is an
agreement to take delivery or to make delivery of a standardized quantity and
quality of a certain commodity during a particular month in the future at a
specified price. The Subadvisor will make decisions whether to invest in these
instruments based on market conditions, regulatory limits and tax
considerations. If this strategy is used, the Fund may be required to cover
assets used for this purpose in a segregated account for the protection of
shareholders.
In extraordinary circumstances, the New Vision Small Cap Fund may use options
and futures contracts to increase or decrease its exposure to changing
security prices, interest rates, or other factors that affect security values.
These techniques may involve derivative transactions such as buying and
selling options and futures contracts and leveraged notes, entering into swap
agreements, and purchasing indexed securities. The Fund can use these
practices only as protection against an adverse move of the holdings in the
Fund to adjust the risk and return characteristics of the Fund. The decision
to invest in these instruments will be based on market conditions, regulatory
limits and tax considerations. If market conditions are judged incorrectly, a
strategy does not correlate well with the Fund's investments, or if the
counterparty to the transaction does not perform as promised, these techniques
could result in a loss. These techniques may increase the volatility of the
Fund and may involve a small investment of cash relative to the magnitude of
the risk assumed. Any instruments determined to be illiquid are subject to the
Fund's limitation on illiquid securities. See below and the Statement of
Additional Information for more details about these strategies.
Risks of using defensive strategies
There can be no assurance that engaging in options, futures, or any other
defensive strategy will be successful. While defensive strategies are designed
to protect the Funds from potential declines, if the Subadvisor misgauges
market values, interest rates, or other economic factors, the Funds may be
worse off than had they not employed the defensive strategy. While the
Subadvisors attempt to determine price movements and thereby prevent declines
in the value of portfolio holdings, there is a risk of imperfect or no
correlation between price movements of portfolio investments and instruments
used as part of a defensive strategy so that a loss is incurred. While
defensive strategies can reduce the risk of loss, they can also reduce the
opportunity for gain since they offset favorable price movements. The use of
defensive strategies may result in a disadvantage to the Funds if a Fund is
not able to purchase or sell a portfolio holding at an optimal time due to the
need to cover its transaction in its segregated account, or due to the
inability of a Fund to liquidate its position because of its relative
illiquidity.
Repurchase agreements
The Funds may engage in repurchase agreements to earn a higher rate of return
than it could earn simply by investing in the obligation which is the subject
of the repurchase agreement. The Funds will only engage in repurchase
agreements with recognized securities dealers and banks determined to present
minimal credit risk by the Advisor under the direction and supervision of the
Funds' respective Board of Directors/Trustees. In addition, the Funds will
only engage in repurchase agreements reasonably designed to fully secure
during the term of the agreement, the seller's obligation to repurchase the
underlying security. The Funds will monitor the market value of the underlying
security during the term of the agreement. If the seller defaults on its
obligation to repurchase and the value of the underlying security declines,
the Funds may incur a loss and may incur expenses in selling the underlying
security. Repurchase agreements are always for periods of less than one year,
and are considered illiquid if not terminable within seven days.
Foreign Securities and ADRs
The New Vision Small Cap Fund may invest up to 15% of its total assets in
ADRs. The Capital Accumulation Fund may also invest in ADRs, subject to the
restrictions applicable to investments in foreign securities discussed below.
By investing in ADRs rather than directly in foreign issuers' stock, the Funds
may avoid some currency and some liquidity risks. The information available
for ADRs is subject to the more uniform and more exacting accounting, auditing
and financial reporting standards of the domestic market or exchange on which
they are traded. U.S. dollar-denominated ADRs, which are traded in the U.S. on
exchanges or over the counter, are receipts typically issued by a U.S. bank or
trust company which evidence ownership of underlying securities of a foreign
corporation.
The Capital Accumulation Fund may invest up to 25% of its assets in the
securities of foreign issuers, although it currently holds or intends to hold
no more than 5% of its assets in such securities. The Capital Accumulation
Fund may purchase foreign securities directly, on foreign markets, or those
represented by ADRs, or other receipts evidencing ownership of foreign
securities, such as International Depositary Receipts and Global Depositary
Receipts. Foreign securities may involve additional risks, including currency
fluctuations, risks relating to political or economic conditions, and the
potentially less stringent investor protection and disclosure standards of
foreign markets. These factors could make foreign investments, especially
those in developing countries, less liquid and more volatile. In addition, the
costs of foreign investing, including withholding taxes, brokerage commissions
and custodial costs are generally higher than for U.S. investments. See the
SAI for more information on investing in foreign securities.
The Funds may lend their portfolio securities.
Both Funds may lend portfolio securities to member firms of the New York Stock
Exchange and commercial banks with assets of one billion dollars or more,
although the New Vision Small Cap Fund does not intend to do so and the
Capital Accumulation Fund does not currently intend to lend more than 5% of
its portfolio securities. The advantage of such loans is that the Funds
continue to receive the equivalent of the interest earned or dividends paid by
the issuers on the loaned securities while at the same time earning interest
on the cash or equivalent collateral which may be invested in accordance with
the Funds' investment objective, policies and restrictions. As with any
extension of credit, there may be risks of delay in recovery and possibly loss
of rights in the loaned securities should the borrower of the loaned
securities fail financially.
Borrowing
Both Funds may borrow money from banks (and pledge its assets to secure such
borrowing) for temporary or emergency purposes, but not for leverage. Such
borrowing may not exceed one third of the value of each Fund's total assets.
High Social Impact Investments
The Funds have both adopted nonfundamental policies that permit investments
which, with respect to the Capital Accumulation Fund, may be up to three
percent, and with respect to the New Vision Small Cap Fund, may be up to one
percent, of that Fund's assets in securities that offer a rate of return below
the then-prevailing market rate and that present attractive opportunities for
furthering each Fund's social criteria ("High Social Impact Investments").
These securities are typically illiquid and unrated and are generally
considered noninvestment-grade debt securities, which involve a greater risk
of default or price decline than investment-grade securities. Through
diversification and credit analysis and limited maturity, investment risk can
be reduced, although there can be no assurance that losses will not occur. The
High Social Impact Investments committee of the Board of Directors/Trustees
identifies, evaluates and selects these investments, subject to ratification
by the respective Board.
Socially Responsible Investment Criteria
The Funds carefully review company policies and behavior regarding social
issues important to quality of life:
environment
employee relations
product criteria
weapons systems
nuclear energy
human rights
Once securities are determined to fall within the investment objective of a
Fund and are deemed financially viable investments, they are analyzed
according to the social criteria described below. These social screens are
applied to potential investment candidates by the Advisor in consultation with
the Subadvisors.
The following criteria may be changed by the respective Fund's Board of
Directors/Trustees without shareholder approval:
(1) The Funds avoid investing in companies that, in the Advisor's
opinion, have significant or historical patterns of violating environmental
regulations, or otherwise have an egregious environmental record.
Additionally, the Funds will avoid investing in nuclear power plant operators
and owners, or manufacturers of key components in the nuclear power process.
(2) The Funds will not invest in companies that are significantly
engaged in weapons production. This includes weapons systems contractors and
major nuclear weapons systems contractors.
(3) The Funds will not invest in companies that, in the Advisor's
opinion, have significant or historical patterns of discrimination against
employees on the basis of race, gender, religion, age, disability or sexual
orientation, or that have major labor-management disputes.
(4) The Funds will not invest in companies that are significantly
involved in the manufacture of tobacco or alcohol products. The Funds will not
invest in companies that make products or offer services that, under proper
use, in the Advisor's opinion, are considered harmful.
The Advisor will seek to review companies' overseas operations consistent with
the social criteria stated above.
While the Funds may invest in companies that exhibit positive social
characteristics, it makes no explicit claims to seek out companies with such
practices.
TOTAL RETURN
The Funds may advertise total return for each class of shares. Total return is
based on historical results and is not intended to indicate future performance.
Total return is calculated separately for each class. It includes not only the
effect of income dividends but also any change in net asset value, or
principal amount, during the stated period. The total return of a class shows
its overall change in value, including changes in share price and assuming all
of the class' dividends and capital gain distributions are reinvested. A
cumulative total return reflects the class' performance over a stated period
of time. An average annual total return ("return with maximum load") reflects
the hypothetical annual compounded return that would have produced the same
cumulative total return if the performance had been constant over the entire
period. Because average annual returns tend to smooth out variations in the
returns, you should recognize that they are not the same as actual
year-by-year results. Both types of return usually will include the effect of
paying any sales charge. Of course, total returns will be higher if sales
charges are not taken into account. Quotations of "return without maximum
sales load" do not reflect deduction of the sales charge. You should consider
these figures only if you qualify for a reduced sales charge, or for purposes
of comparison with comparable figures which also do not reflect sales charges,
such as mutual fund averages compiled by Lipper Analytical Services, Inc.
("Lipper"). Further information about the Funds' performance is contained in
its Annual Report to Shareholders, which may be obtained without charge.
MANAGEMENT OF THE FUND
The Funds' Board of Directors/Trustees supervise the Funds' activities and
review their contracts with companies that provide them with services.
The Capital Accumulation Fund is a series of Calvert World Values Fund, Inc.
an open-end management investment company organized as a Maryland corporation
on February 14, 1992. The other series is the International Equity Fund, a
socially-screened portfolio of equity securities from around the world.
The New Vision Small Cap Fund is a series of The Calvert Fund (the "Trust"),
an open-end management investment company organized as a Massachusetts
business trust on March 15, 1982. The other series of the Trust is the Calvert
Income Fund.
Neither Fund is required to hold annual shareholder meetings, but special
meetings may be called for certain purposes such as electing
Directors/Trustees, changing fundamental policies, or approving a management
contract. As a shareholder, you receive one vote for each share of a Fund you
own. Matters affecting classes differently, such as Distribution Plans, will
be voted on separately by class.
Calvert Asset Management Company, Inc. serves as Advisor to the Funds.
Calvert Asset Management Company, Inc. (the "Advisor") is both Funds'
investment advisor. The Advisor provides the Funds with investment supervision
and management; administrative services and office space; furnishes executive
and other personnel to the Funds; and pays the salaries and fees of all
Directors/Trustees who are affiliated persons of the Advisor. The Advisor may
also assume and pay certain advertising and promotional expenses of the Funds
and reserves the right to compensate broker/dealers in return for their
promotional or administrative services. The Funds pay all other operating
expenses as noted in the SAI.
Calvert Group is one of the largest investment management firms in the
Washington, D.C. area.
Calvert Group, Ltd., parent of the Fund's Advisor, shareholder servicing agent
and distributor, is a subsidiary of Acacia Mutual Life Insurance Company of
Washington, D.C. Calvert Group is one of the largest investment management
firms in the Washington, D.C. area. Calvert Group, Ltd. and its subsidiaries
are located at 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814.
As of December 31, 1997, Calvert Group managed and administered assets in
excess of $5.0 billion and more than 200,000 shareholder and depositor
accounts.
The Advisor receives a fee based on a percentage of the Funds' assets.
The respective Investment Advisory Agreements between the Funds and the
Advisor both provide that the Advisor is entitled to a base annual fee,
payable monthly, of 0.80% of the Capital Accumulation Fund's, and 0.90% of the
New Vision Small Cap Fund's, average daily net assets. For its services during
the fiscal year ended September 30, 1997, pursuant to the Investment Advisory
Agreements, the Advisor received an investment advisory fee of 0.80% of the
Capital Accumulation Fund's average daily net assets, and 0.90% of New Vision
Small Cap Fund's average daily net assets.
With respect to the Capital Accumulation Fund, the Advisor may earn (or have
its fee reduced by) a performance adjustment based on the extent to which
performance of the Fund exceeds or trails the Standard & Poor's 400 Mid-Cap
Index:
Performance versus the Performance Fee
S&P 400 Mid-Cap Index Adjustment
10% to less than 25% 0.01%
25% to less than 40% 0.03%
40% or more 0.05%
For its services for fiscal year 1997, the Advisor received, pursuant to the
Investment Advisory Agreement, an advisory fee of 0.80% of the Fund's average
daily net assets, which included a performance adjustment of 0.0054%. The
Advisor may in its discretion defer its fees or assume the Fund's operating
expenses.
Brown Capital Management, Inc., ("Brown Capital") is the investment subadvisor
for the Capital Accumulation Fund.
Brown Capital of 809 Cathedral Street, Baltimore, Maryland has served as
subadvisor to the Fund since November 1, 1994. Brown Capital believes that
capital can be enhanced in times of opportunity and preserved in times of
adversity without timing the market. The firm uses a bottom-up approach that
incorporates growth-adjusted price earnings. Stocks purchased are generally
undervalued and have momentum, have earnings per share growth rates greater
than the market, are more profitable than the market, and have relatively low
price-earnings ratios. Its performance index is a blended 60% Russell 1000
Growth and 40% Russell 2000.
Eddie C. Brown is founder and President of Brown Capital. He has over 22 years
of investment experience, having served as a Vice President and Portfolio
Manager for 10 years at T. Rowe Price Associates immediately prior to starting
his own firm. Mr. Brown holds an MS in Electrical Engineering from New York
University, and an MS in Business Administration from the Indiana University
School of Business. Additionally, he is a professionally-designated Chartered
Financial Analyst (CFA) and Chartered Investment Counselor.
The Investment Subadvisory Agreement between the Advisor provides that Brown
Capital is entitled to a base subadvisory fee of 0.25% of the Fund's average
daily net assets, paid by the Advisor out of the fee the Advisor receives from
the Fund. Brown Capital may earn (or have its base fee reduced by) a
performance adjustment based on the extent to which performance of the Fund
exceeds or trails the index agreed on with the Advisor:
Performance versus Performance Fee
the Index Adjustment
10% to less than 25% 0.02%
25% to less than 40% 0.05%
40% or more 0.10%
Payment by the Fund of a performance adjustment will be conditioned on: (1)
the performance of the Fund as a whole having exceeded the S&P 400 Mid-Cap
Index; and (2) payment of the performance adjustment not causing the Fund's
performance to fall below the S&P 400 Mid-Cap Index. The performance
adjustment will be paid by the Fund to the Advisor, which will then pass it on
to the Subadvisor.
Awad & Associates ("AWAD") is the investment subadvisor to the New Vision
Small Cap Fund.
AWAD's principal business office is located at 477 Madison Avenue, New York,
New York 10022. As of June 30, 1997, AWAD had $724 million in assets under
management. AWAD adheres to a bottom-up, earnings-driven discipline with
emphasis on internal fundamental research, specializing in small
capitalization stocks, focusing on growth at a reasonable [value] price
approach to stock selection. AWAD's main objectives in asset management are to
protect the investor's capital, generate capital appreciation substantially in
excess of inflation and reduced-risk returns and provide returns in excess of
applicable stock and bond indices. All portfolio investments are regularly
scrutinized to provide a substantial risk/return benefit and to ensure that
portfolios are properly positioned relative to the Fund's investment
objectives.
Since October 1, 1997, the New Vision Small Cap Fund has been managed by a
team of investment professionals from AWAD. The senior investment officer is
James D. Awad. Mr. Awad has been in the investment business since 1965,
focusing on research and portfolio management. Prior to forming AWAD, he was
President of BMI Capital, a successful money management firm he founded. In
addition, he has managed assets at Neuberger & Berman, Channing Management and
First Investment Corp. Mr. Awad has earned an MBA from Harvard Business School
and a BS Cum Laude from Washington & Lee University.
Dennison T. Veru is President of AWAD. Mr. Veru joined AWAD in 1992 coming
from Smith Barney Harris Upham where he was Senior Vice President of the
firm's Whiffletree Capital Management division specializing in small and medium
capitalization stocks. From 1988 through 1990, he was a Vice President of
Broad Street Investment Management. Prior to that, he was an Assistant Vice
President at Drexel Burnham Lambert. Mr. Veru is a graduate of Franklin and
Marshall College.
The Investment Subadvisory Agreement between the Advisor and AWAD provides
that AWAD is entitled to a base subadvisory fee of 0.40% of the Fund's average
daily net assets managed by AWAD. AWAD's fee is paid by the Advisor out of the
fee the Advisor receives from the Fund.
The Funds have obtained an exemptive order from the Securities and Exchange
Commission to permit them, pursuant to approval by the Board of
Directors/Trustees, to enter into and materially amend contracts with a
Subadvisor without shareholder approval. See "Investment Advisor and
Subadvisor" in the SAI for further details.
Calvert Administrative Services Company provides administrative services for
the Fund.
Calvert Administrative Services Company ("CASC"), an affiliate of the Advisor,
provides certain administrative services to the Fund, including the
preparation of regulatory filings and shareholder reports, the daily
determination of its net asset value per share and dividends, and the
maintenance of its portfolio and general accounting records. For providing
such services, CASC receives an annual fee, payable monthly, from both Funds
of 0.10% of the respective Fund's average daily net assets.
Calvert Distributors, Inc. serves as underwriter to market the Funds' shares.
Calvert Distributors, Inc. ("CDI") is both Funds' principal underwriter and
distributor. Under the terms of its underwriting agreement with the Funds, CDI
markets and distributes the Funds' shares and is responsible for payment of
commissions and service fees to broker/dealers, banks, and financial services
firms, preparation of advertising and sales literature, and printing and
mailing of prospectuses to prospective investors.
The transfer agent keeps your account records.
Calvert Shareholder Services, Inc. is the shareholder servicing agent for each
Fund. National Financial Data Services, Inc. ("NFDS"), 1004 Baltimore, Kansas
City, Missouri, 64105, is the transfer and dividend disbursing agent for each
Fund.
SHAREHOLDER GUIDE
HOW TO OPEN AN ACCOUNT
Getting Started
Regardless of the investment option you choose (see below), the enclosed
application must be completed and signed for each new account. When multiple
classes of shares are offered, please specify which class you wish to
purchase. Additional documents may be required for corporations, associations
and certain fiduciaries, & for investments in Calvert's tax-deferred
retirement plans. For more information about account options mentioned below,
contact your broker or our shareholder services department at 800-368-2748.
HOW TO BUY SHARES
(BE SURE TO SPECIFY WHICH CLASS YOU ARE BUYING)
New Accounts Additional Investments
$2,000 MINIMUM ( ) $250 MINIMUM
Please make your check Please make your check
payable to the Fund payable to the Fund
and mail it with your and mail it with your
application to: investment slip to:
Calvert Group Calvert Group
PO Box 419544 PO Box 419739
Kansas City, MO Kansas City, MO
64141-6544 64141-6739
By Registered, CALVERT GROUP CALVERT GROUP
Certified, or C/O NFDS, 6TH FLOOR C/O NFDS, 6TH FLOOR
Overnight Mail 1004 BALTIMORE 1004 BALTIMORE
Kansas City, MO Kansas City, MO
64105-1807 64105-1807
At the Calvert Visit the Calvert Office to make investments by check.
Office See the back cover page for the address.
Each Fund offers its shareholders three classes of shares:
Class A Shares - Front End Load Option
Class A shares are sold with a front-end sales charge at the time of purchase.
Class A shares are not subject to a sales charge when they are redeemed.
Class B Shares - Back-End Load Option
Class B shares are sold without a sales charge at the time of purchase, but
are subject to a deferred sales charge if they are redeemed within six
calendar years after purchase. Class B shares will automatically convert to
Class A shares at the end of eight calendar years after purchase.
Class C shares - Level Load Option
Class C shares are sold without a front-end sales charge at the time of
purchase. They are subject to a deferred sales charge if they are redeemed
within one year after purchase.
Class B and C shares have higher expenses than Class A shares.
Each Fund bears some of the costs of selling its shares under Distribution
Plans adopted pursuant to Rule 12b-1 under the 1940 Act. Payments under the
Class A Distribution Plan are limited to up to 0.35% with respect to the
Capital Accumulation Fund, and up to 0.25% with respect to the New Vision
Small Cap Fund, annually of the average daily net asset value of Class A
shares, while payments under Class B and C Distribution Plan are 1.00% of the
average daily net assets attributable to their respective classes of each Fund.
Considerations for deciding which class of shares to buy.
Income distributions for Class A shares will probably be higher than those for
Class B and Class C shares, as a result of the distribution expenses described
above. (See also "Total Return") You should consider Class A shares if you
qualify for a reduced sales charge under Class A. Class A shares may also be
more appropriate for larger accounts or if you plan to hold the shares for
several years. Class C shares are not available for investments of $1 million
or more. The Funds will not normally accept any purchase of Class B shares in
the amount of $250,000 or more.
Class A Shares
Class A shares are offered at net asset value ("NAV") plus a front-end sales
charge calculated as follows:
Allowed
As a % of As a % of to Brokers as a
Amount of Offering Net Amt. % of Offering
Investment Price Invested Price
Less than $50,000 4.75% 4.99% 4.00%
$50,000 but less than $100,000 3.75% 3.90% 3.00%
$100,000 but less than $250,000 2.75% 2.83% 2.25%
$250,000 but less than $500,000 1.75% 1.78% 1.25%
$500,000 but less than $1,000,000 1.00% 1.01% 0.80%
$1,000,000 and over 0.00% 0.00% 0.00%*
* CDI may pay the dealer a finder's fee of up to 0.50% of the amount of
purchase on purchases of over $1 million. CDI reserves the right to recoup any
portion of the amount paid to the dealer if the investor redeems some or all
of the shares from the Fund within twelve months of the time of purchase.
Sales charges on Class A shares may be reduced or eliminated in certain cases.
See Exhibit A to this prospectus.
The sales charge is paid to CDI, which in turn normally reallows a portion to
your broker/dealer. Upon written notice to dealers with whom it has dealer
agreements, CDI may reallow up to the full applicable sales charge. Dealers to
whom 90% or more of the entire sales charge is reallowed may be deemed to be
underwriters under the Securities Act of 1933.
In addition to any sales charge reallowance or finder's fee, your
broker/dealer, or other financial service firm through which your account is
held, currently will be paid periodic service fees at an annual rate of up to
0.25% of the average daily net asset value of Class A shares held in accounts
maintained by that firm.
Class A Distribution Plan
Each Fund has adopted a Distribution Plan with respect to its Class A shares
(the "Class A Distribution Plan"), which provides for payments at a maximum
rate of 0.35% with respect to the Capital Accumulation Fund, and 0.25% with
respect to the New Vision Small Cap Fund, of the average daily net asset value
of Class A shares, to pay expenses associated with the distribution and
servicing of Class A shares. Amounts paid by the Fund to CDI under the Class A
Distribution Plan are used to pay to broker/dealers and others, including CDI
salespersons who service accounts, service fees at an annual rate of up to
0.25% of the average daily net asset value of Class A shares, and to pay CDI
for its marketing and distribution expenses, including, but not limited to,
preparation of advertising and sales literature and the printing and mailing
of prospectuses to prospective investors. During the fiscal year ended
September 30, 1997, Class A Distribution Plan expenses for the Capital
Accumulation Fund were 0.35% and for the New Vision Small Cap Fund were 0.25%.
Class B Shares
Class B shares are offered at net asset value, without a front-end sales
charge. With certain exceptions, the Portfolio may impose a deferred sales
charge at the time of redemption as follows:
Contingent Deferred Sales
Charge As A Percentage Of
Redemption During Net Asset Value At Redemption
1st Year Since Purchase 5%
2nd Year Since Purchase 4%
3rd Year Since Purchase 4%
4th Year Since Purchase 3%
5th Year Since Purchase 2%
6th Year Since Purchase 1%
7th Year Since Purchase and Thereafter None
No deferred sales charge is imposed on amounts redeemed after six years from
purchase. If imposed, the deferred sales charge is deducted from the
redemption proceeds otherwise payable to you. The deferred sales charge is
retained by CDI. See "Calculation of Contingent Deferred Sales Charges and
Waiver of Sales Charges" below.
Class B shares that have been outstanding for eight calendar years will
automatically convert to Class A shares, which are subject to a lower
Distribution Plan charge, without imposition of a front-end sales charge or
exchange fee. The Class B shares so converted will no longer be subject to the
higher expenses borne by Class B shares. Because the net asset value per share
of the Class A shares may be higher or lower than that of the Class B shares
at the time of conversion, although the dollar value will be the same, a
shareholder may receive more or less Class A shares than the number of Class B
shares converted. Under current law, it is the Advisor's opinion that such a
conversion will not constitute a taxable event under federal income tax law.
In the event that this ceases to be the case, the Board of Trustees will
consider what action, if any, is appropriate and in the best interests of the
Class B shareholders.
Class B Distribution Plan
The Portfolio has adopted a Distribution Plan with respect to its Class B
shares (the "Class B Distribution Plan"), which provides for payments at an
annual rate of up to 1.00% of the average daily net asset value of Class B
shares, to pay expenses of the distribution of Class B shares. Amounts paid by
the Portfolio under the Class B Distribution Plan are currently used by CDI to
pay others (1) a commission at the time of purchase of 4% of the value of each
share sold; and/or (2) service fees at an annual rate of 0.25% of the average
daily net asset value of shares sold by such others, beginning in the 13th
month after purchase.
Class C Shares
Class C shares are not available through all dealers. Class C shares are
offered at net asset value, without a front-end sales charge. With certain
exceptions, the Portfolio will impose a deferred sales charge of 1.00% on
shares redeemed during the first year after purchase. If imposed, the deferred
sales charge is deducted from the redemption proceeds otherwise payable to
you. The deferred sales charge is retained by CDI. See "Calculation of
Contingent Deferred Sales Charges and Waiver of Sales Charges" below
Class C Distribution Plan
Each Fund has adopted a Distribution Plan with respect to its Class C shares
(the "Class C Distribution Plan"), which provides for payments at an annual
rate of up to 1.00% of the average daily net asset value of Class C shares, to
pay expenses of the distribution and servicing of Class C shares. Amounts paid
by the Fund under the Class C Distribution Plan are currently used by CDI to
pay broker/dealers and other selling firms (1) a commission at the time of
purchase of 1.00% of the value of each share sold, and (2) beginning in the
13th month after purchase, quarterly compensation at an annual rate of up to
0.75%, plus a service fee of up to 0.25%, of the average daily net asset value
of each share sold by such others. During the fiscal year ended September 30,
1997, Class C Distribution Plan expenses for the Capital Accumulation Fund
were 1.00% of the average daily net assets. For the period ended September 30,
1997, distribution expenses for the New Vision Small Cap Fund were 1.00% of
the average daily net assets.
Calculation of Contingent Deferred Sales Charge and Waiver of Sales Charges
Class B and Class C shares that are redeemed will not be subject to a
contingent deferred charge to the extent that the value of such shares
represents (1) reinvestment of dividends or capital gains distributions, (2)
shares held more than six years (more than one year for Class C) or (3)
capital appreciation of shares redeemed. Any contingent deferred sales charge
is imposed on the net asset value of the shares at the time of redemption or
purchase, whichever is lower. Upon request for redemption, shares not subject
to the contingent deferred sales charge will be redeemed first. Thereafter,
shares held the longest will be the first to be redeemed.
The contingent deferred sales charge on Class B Shares will be waived in the
following circumstances: (1) redemption upon the death or disability of the
shareholder, plan participant, or beneficiary ("disability" shall mean a total
disability as evidenced by a determination by the federal Social Security
Administration); (2) minimum required distributions from retirement plan
accounts for shareholders 70 1/2 and older (with the maximum amount subject to
this waiver being based only upon the shareholder's Calvert retirement
accounts); (3) return of an excess contribution or deferral amounts, pursuant
to sections 408(d)(4) or (5), 401(k)(8), or 402)(g)(2), or 401(m)(6) of the
Internal Revenue Code; (4) involuntary redemptions of accounts under
procedures set forth by the Fund's Board of Trustees; (5) a single annual
withdrawal under a systematic withdrawal plan of up to 10% per year of the
shareholder's account balance (minimum account balance $50,000 to establish).
Arrangements with Broker/dealers and Others
CDI may also pay additional concessions, including non-cash promotional
incentives, such as merchandise or trips, to dealers employing registered
representatives who have sold or are expected to sell a minimum dollar amount
of shares of the Fund and/or shares of other Funds underwritten by CDI. CDI
may make expense reimbursements for special training of a dealer's registered
representatives, advertising or equipment, or to defray the expenses of sales
contests. CDI may receive reimbursement of eligible marketing and distribution
expenses from the Fund's Rule 12b-1 Distribution Plan and in compliance with
the rules of the NASD.
Broker/dealers or others may receive different levels of compensation
depending on which class of shares they sell. Payments pursuant to a
Distribution Plan are included in the operating expenses of the class.
WHEN YOUR ACCOUNT WILL BE CREDITED
Your purchase will be processed at the next NAV calculated after your order is
received and accepted. All of your purchases must be made in US dollars and
checks must be drawn on US banks. No cash will be accepted. The Funds reserve
the right to suspend the offering of shares for a period of time or to reject
any specific purchase order. If your check does not clear your bank, your
purchase will be canceled and you will be charged a $10 fee plus costs
incurred by the Funds.
When you purchase by check or with Calvert Money Controller, the purchase will
be on hold for up to 10 business days from the date of receipt. During the
hold period, any redemptions will be held until the transfer agent is
reasonably satisfied that the purchase payment has been collected. To avoid
this hold period, you can wire federal funds from your bank, which may charge
you a fee. As a convenience, check purchases can be received at Calvert's
offices for overnight mail delivery to the Transfer Agent and will be credited
the next business day, or upon receipt. Any check purchase received without an
investment slip may cause delayed crediting.
Certain financial institutions or broker/dealers which have entered into a
sales agreement with CDI may enter confirmed purchase orders on behalf of
customers by phone, with payment to follow within a certain number of days of
the order as specified by the program. If payment is not received in the time
specified, the financial institution or broker/dealer could be held liable for
resulting fees or losses.
TAX-SAVING RETIREMENT PLANS
Calvert Group also offers its shareholders several tax-deferred retirement
plans that allow you to invest for retirement and shelter your investment
income from current taxes. Please contact us if you wish to obtain more
information about the investment options listed below. Minimum deposits may
differ from those listed in the "How to Buy Shares" chart. Also, reduced sales
charges may apply (see Exhibit A to this prospectus).
Traditional and Roth individual retirement accounts (IRAs): available to
anyone who has earned income. You may also be able to make investments in the
name of your spouse, if your spouse has no earned income.
Qualified Profit-Sharing and Money Purchase Plans (including 401(k) Plans):
available to self-employed people and their partners, corporations and their
employees, and certain tax-exempt organizations.
Simple IRAs and Simplified Employee Pension Plan (SEP IRAs): available to
self-employed people and their partners, or to corporations.
403(b)(7) Custodial Accounts: available to employees of most non-profit
organizations and public schools and universities.
OTHER CALVERT GROUP FEATURES
CALVERT INFORMATION NETWORK
For 24 hour performance and account information call 800-368-2745 or visit
http://www.calvertgroup.com
You can obtain current performance and pricing information, verify account
balances, and authorize certain transactions with the convenience of one phone
call, 24 hours a day.
ACCOUNT SERVICES
By signing up for services when you open your account, you avoid having to
obtain a signature guarantee. If you wish to add services at a later date, a
signature guarantee to verify your signature may be obtained from any bank,
trust company and savings and loan association, credit union, broker/dealer
firm or member of a domestic stock exchange. A notary public cannot provide a
signature guarantee.
CALVERT MONEY CONTROLLER
Calvert Money Controller allows you to purchase or sell shares anytime from
anywhere with ease, without the time delay of mailing a check or the added
expense of wiring funds. Use this service to transfer up to $300,000
electronically. Allow one or two business days after you place your request
for the transfer to take place. Money transferred to purchase new shares will
be subject to a hold of up to 10 business days before redemption requests will
be honored. Transaction requests must be received by 4 p.m. ET. You may
request this service on your initial account application.
TELEPHONE TRANSACTIONS
You may purchase, redeem, or exchange shares, wire funds and use Calvert Money
Controller by telephone if you have pre-authorized service instructions. You
receive this service automatically when you open your account unless you elect
otherwise. For our mutual protection, the Fund, the shareholder servicing
agent and their affiliates use precautions such as verifying shareholder
identity and recording telephone calls to confirm instructions given by phone.
A confirmation statement is sent for most transactions; please review this
statement and verify the accuracy of your transaction immediately.
EXCHANGES
Calvert Group offers a wide variety of investment options that includes common
stock funds, tax-exempt and corporate bond funds, and money market funds (call
your broker or Calvert representative for more information). We make it easy
for you to purchase shares in other funds should your investment goals change.
The exchange privilege offers flexibility, by allowing you to exchange shares
on which you have already paid a sales charge from one mutual fund to another
at no additional charge.
Complete and sign an account application, taking care to register your new
account in the same name and taxpayer identification number as your existing
Calvert account(s). Exchange instructions may then be given by telephone if
telephone redemptions have been authorized and the shares are not in
certificate form.
Before you make an exchange, please note the following:
Each exchange represents the sale of shares of one portfolio and the
purchase of shares of another. Therefore, you could realize a taxable gain or
loss.
No CDSC is imposed on exchanges of shares subject to a CDSC at the
time of the exchange. The applicable CDSC is imposed at the time the shares
acquired by the exchange are redeemed.
Shareholders (and those managing multiple accounts) who make two
purchases and two exchange redemptions of shares of the same Portfolio during
a six months period will be given written notice and may be prohibited from
placing additional investments. This policy does not prohibit a shareholder
from redeeming shares of any Portfolio, and does not apply to trades solely
among money market funds.
The Fund reserves the right to terminate or modify the exchange
privilege with 60 days written notice. For purposes of the exchange privilege,
the Funds are related to Summit Cash Reserves Fund by investment and investor
services.
COMBINED GENERAL MAILINGS
Join is in our efforts to conserve paper and save on postage
If you have multiple accounts with Calvert, you may receive combined mailings
of shareholder information, such as account statements, confirmations of
transactions, prospectuses and semi-annual and annual reports.
SPECIAL SERVICES AND CHARGES
The Funds pay for shareholder services but not for special services that are
required by a few shareholders, such as a request for a historical transcript
of an account or a stop payment on a draft. You may be required to pay a fee
for these special services; for example, the fee for stop payments is $25.
If you are purchasing shares through a program of services offered by a
broker/dealer or financial institution, you should read the program materials
in conjunction with this Prospectus. Certain features may be modified in these
programs, and administrative charges may be imposed by the broker/dealer or
financial institution for the services rendered.
MINIMUM ACCOUNT BALANCE IS $1,000 per Fund, per Class
Please maintain a balance in each of your Fund accounts of at least $1,000. If
the balance in your account falls below the $1,000 minimum during a month, the
account may be closed and the proceeds mailed to the address of record. You
will receive a notice that your account is below the minimum, and will be
closed if the balance is not brought up to the required minimum amount within
30 days.
SYSTEMATIC CHECK REDEMPTIONS
If you maintain an account with $10,000 or more, you may have up to two (2)
redemption checks for $100 or more sent to you on the 15th of each month,
simply by sending a letter with all the information, including your account
numbers, and the dollar amount. If you would like a regular check mailed to
another person or place, your letter must be signature guaranteed. Unless they
otherwise qualify for a waiver, Class B or Class C shares redeemed by
Systematic Check Redemption will be subject to the Contingent Deferred Sales
Charge.
DIVIDENDS, CAPITAL GAINS AND TAXES
Each year, both Funds distribute substantially all of their respective net
investment income to their shareholders.
Dividends from a Fund's net investment income are declared and paid annually.
Net investment income consists of interest income, net short-term capital
gains, if any, and dividends declared and paid on investments, less expenses.
Distributions of net short-term capital gains (treated as dividends for tax
purposes) and net long-term capital gains, if any, are normally paid once a
year; however, the Funds do not anticipate making any such distributions
unless available capital loss carryovers have been used or have expired.
Dividend and distribution payments will vary between classes; dividend
payments are anticipated to be generally higher for Class A shares.
Dividend payment options (available monthly or quarterly)
Dividends and any distributions are automatically reinvested in the same
Portfolio at NAV (no sales charge), unless you elect to have the dividends of
$10 or more paid in cash (by check or by Calvert Money Controller). Dividends
and distributions from any Calvert Group Fund or Portfolio may be
automatically invested in an identically registered account in any other
Calvert Group Fund at NAV. If reinvested in the same Fund account, new shares
will be purchased at NAV on the reinvestment date, which is generally 1 to 3
days prior to the payment date. You must notify the Funds in writing to change
your payment options. If you elect to have dividends and/or distributions paid
in cash, and the US Postal Service cannot deliver the check, or if it remains
uncashed for an extended period, it, as well as future dividends and
distributions, will be reinvested in additional shares. No dividends will
accrue on amounts represented by uncashed distribution or redemption checks.
Buying a Dividend
At the time of purchase, the share price of your Fund may reflect
undistributed income, capital gains or unrealized appreciation of securities.
Any income or capital gains from these amounts which are later distributed to
you are fully taxable. On the record date for a distribution, share value is
reduced by the amount of the distribution. If you buy shares just before the
record date ("buying a dividend") you will pay the full price for the shares
and then receive a portion of the price back as a taxable distribution.
Federal Taxes
In January, your Fund will mail you Form 1099-DIV indicating the federal tax
status of dividends and any capital gain distributions paid to you during the
past year. Generally, dividends and distributions are taxable in the year they
are paid. However, any dividends and distributions paid in January but
declared during the prior three months are taxable in the year declared.
Dividends and distributions are taxable to you regardless of whether they are
taken in cash or reinvested. Dividends, including short-term capital gains,
are taxable as ordinary income. Distributions from long-term capital gains are
taxable as long-term capital gains, regardless of how long you have owned
shares.
You may realize a capital gain or loss when you sell or exchange shares. This
capital gain or loss will be short- or long-term, depending on how long you
have owned the shares which were sold. In January, the Portfolios will mail
you Form 1099-B indicating the total amount of all sales, including exchanges.
You should keep your annual year-end account statements to determine the cost
(basis) of the shares to report on your tax returns.
Other Tax Information
In addition to federal taxes, you may be subject to state or local taxes on
your investment, depending on the laws in your area. You will be notified to
the extent, if any, that dividends reflect interest received from US
government securities. Such dividends may be exempt from certain state income
taxes.
Taxpayer Identification Number
If we do not have your correct Social Security or Taxpayer Identification
Number ("TIN") and a signed certified application or Form W-9, Federal law
requires us to withhold 31% of your dividends, and possibly 31% of certain
redemptions. In addition, you may be subject to a fine. You will also be
prohibited from opening another account by exchange. If this TIN information
is not received within 60 days after your account is established, your account
may be redeemed (closed) at the current NAV on the date of redemption. Calvert
Group reserves the right to reject any new account or any purchase order for
failure to supply a certified TIN.
HOW TO SELL SHARES
You may redeem all or a portion of your shares on any business day. Your
shares will be redeemed at the next NAV calculated after your redemption
request is received (less any applicable CDSC). The proceeds will normally be
sent to you on the next business day, but if making immediate payment could
adversely affect the Funds, it may take up to seven (7) days. Calvert Money
Controller redemptions generally will be credited to your bank account on the
second business day after your phone call. Remember, investments made by check
or Calvert Money Controller may be subject to a hold before shares can be
redeemed. When the New York Stock Exchange is closed (or when trading is
restricted) for any reason other than its customary weekend or holiday
closings, or under any emergency circumstances as determined by the Securities
and Exchange Commission, redemptions may be suspended or payment dates
postponed.
Net Asset Value - "NAV"
NAV refers to the worth of one share. NAV is computed by adding the value of
all portfolio holdings, plus other assets, deducting liabilities and then
dividing the result by the number of shares outstanding. For Portfolios with
more than one class of shares, the NAVs of each class will vary daily
depending on the number of shares outstanding for each class.
Portfolio securities and other assets are valued based on market quotations,
except that securities maturing within 60 days are valued at amortized cost.
Money Market securities are valued according to the "amortized cost" method,
which is intended to stabilize the NAV at $1 per share. If quotations are not
available, securities are valued by a method that the particular Fund's Board
of Trustees/Directors believes accurately reflects fair value.
The NAV is calculated at the close of each business day, which coincides with
the closing of the regular session of the New York Stock Exchange (normally 4
p.m. ET). Both Funds are open for business each day the New York Stock
Exchange is open. All purchases will be confirmed and credited to your account
in full and fractional shares (rounded to the nearest 1/1000 of a share).
Follow these suggestions to ensure timely processing of your redemption request
BY TELEPHONE
You may redeem shares from your account by telephone and have your money
mailed to your address of record or electronically transferred or wired to a
bank you have previously authorized. A charge of $5 may be imposed on wire
transfers of less than $1,000.
WRITTEN REQUESTS
Calvert Group, P.O. Box 419544, Kansas City, MO 64141-6544
Your letter should include your account number and fund and the number of
shares or the dollar amount you are redeeming. Please provide a daytime
telephone number, if possible, for us to call if we have questions. If the
money is being sent to a new bank, person, or address other than the address
of record, your letter must be signature guaranteed.
The following requirements may also apply to your account:
Type of Registration Requirements
Corporations, Letter of instruction and corporate resolution,
signed
by person(s) authorized to act on the account,
accompanied by signature guarantee(s).
Associations Letter of instruction signed by the Trustee(s)
Trusts (as Trustees), with a signature guarantee.
If the Trustee's name is not registered on your
account, provide a copy of the trust document,
certified within the last 60 days.)
<PAGE>
Exhibit A
REDUCED SALES CHARGES (Class A Only)
You may qualify for a reduced sales charge through several purchase plans
available. You must notify the Funds at the time of purchase to take advantage
of the reduced sales charge.
Right of Accumulation
The sales charge breakpoints are calculated by taking into account not only
the dollar amount of a new purchase of shares, but also the higher of cost or
current value of shares previously purchased in Calvert Group Funds that
impose sales charges. This automatically applies to your account for each new
purchase.
Letter of Intent
If you plan to purchase $50,000 or more of Fund shares over the next 13
months, your sales charge may be reduced through a "Letter of Intent." You pay
the lower sales charge applicable to the total amount you plan to invest over
the 13-month period, excluding any money market fund purchases. Part of your
shares will be held in escrow, so that if you do not invest the amount
indicated, you will have to pay the sales charge applicable to the smaller
investment actually made. For more information, see the SAI.
Group Purchases
If you are a member of a qualified group, you may purchase shares at the
reduced sales charge applicable to the group taken as a whole. The sales
charge is calculated by taking into account not only the dollar amount of the
shares you purchase, but also the higher of cost or current value of shares
previously purchased and currently held by other members of your group.
A "qualified group" is one which: has been in existence for more than six
months, has a purpose other than acquiring shares at a discount, and satisfies
uniform criteria which enable CDI and brokers offering shares to realize
economies of scale in distributing such shares.
A qualified group must have more than 10 members, must be available to arrange
for group meetings between representatives of CDI or brokers distributing
shares, must agree to include sales and other materials related to the Funds
in its publications and mailings to members at reduced or no cost to CDI or
brokers.
Pension plans may not qualify participants for group purchases; however, such
plans may qualify for reduced sales charges under a separate provision (see
below). Members of a group are not eligible for a Letter of Intent.
Retirement Plans Under Section 457, Section 403(b)(7), or Section 401(k)
There is no sales charge on shares purchased for the benefit of a retirement
plan under section 457 of the Internal Revenue Code of 1986, as amended
("Code"), or for a plan qualifying under section 403(b) or 401(k) of the Code
if, at the time of purchase, (i) Calvert Group has been notified in writing
that the 403(b) or 401(k) plan has at least 200 eligible employees and is not
sponsored by a K-12 school district, or (ii) the cost or current value of
shares a 401(k) plan has in Calvert Group of Funds (except money market funds)
is at least $1 million.
Neither the Funds, nor CDI, nor any affiliate thereof will reimburse a plan or
participant for any sales charges paid prior to receipt of such written
communication and confirmation by Calvert Group. Plan administrators should
send requests for the waiver of sales charges based on the above conditions
to: Calvert Group Retirement Plans, 4550 Montgomery Avenue, Suite 1000N,
Bethesda, Maryland 20814.
Other Circumstances
There is no sales charge on shares of any fund or portfolio of the Calvert
Group of Funds sold to (i) current or retired Directors, Trustees, or Officers
of the Calvert Group of Funds, employees of Calvert Group, Ltd. and its
affiliates, or their family members; (ii) CSIF Advisory Council Members,
directors, officers, and employees of any subadvisor for the Calvert Group of
Funds, employees of broker/dealers distributing the Fund's shares and
immediate family members of the Council, subadvisor, or broker/dealer; (iii)
Purchases made through a Registered Investment Advisor, (iv) Trust departments
of banks or savings institutions for trust clients of such bank or
institution, (v) Purchases through a broker maintaining an omnibus account
with the fund or portfolio, provided the purchases are made by (a) investment
advisors or financial planners placing trades for their own accounts (or the
accounts of their clients) and who charge a management, consulting, or other
fee for their services; or (b) clients of such investment advisors or
financial planners who place trades for their own accounts if such accounts
are linked to the master account of such investment advisor or financial
planner on the books and records of the broker or agent; or (c) retirement and
deferred compensation plans and trusts, including, but not limited to, those
defined in section 401(a) or section 403(b) of the I.R.C., and "rabbi trusts."
Dividends and Capital Gain Distributions from other Calvert Group Funds
You may prearrange to have your dividends and capital gain distributions from
another Calvert Group Fund automatically invested in another account with no
additional sales charge.
Purchases made at NAV
Except for money market funds, if you make a purchase at NAV, you may exchange
that amount to another Calvert Group Fund at no additional sales charge.
Reinstatement Privilege
If you redeem shares and then within 30 days decide to reinvest in the same
Fund, you may do so at the net asset value next computed after the
reinvestment order is received, without a sales charge. You may use the
reinstatement privilege only once. The Funds reserve the right to modify or
eliminate this privilege.
<PAGE>
Prospectus
May 1, 1998
Calvert Capital Accumulation Fund
Calvert New Vision Small Cap Fund
To Open an Account:
800-368-2748
Performance 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
Calvert Group Web-Site
Address: http://www.calvertgroup.com
PRINCIPAL UNDERWRITER
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
<PAGE>
CALVERT WORLD VALUES FUND, INC.
CAPITAL ACCUMULATION FUND
Statement of Additional Information
May 1, 1998
INVESTMENT ADVISOR
Calvert Asset Management Company, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
SHAREHOLDER SERVICE TRANSFER AGENT
Calvert Shareholder Services, Inc. National Financial Data Services, Inc.
4550 Montgomery Avenue 1004 Baltimore
Suite 1000N 6th Floor
Bethesda, Maryland 20814 Kansas City, Missouri 64105
PRINCIPAL UNDERWRITER INDEPENDENT ACCOUNTANTS
Calvert Distributors, Inc. Coopers & Lybrand, L.L.P.
4550 Montgomery Avenue 250 West Pratt Street
Suite 1000N Baltimore, Maryland 21201
Bethesda, Maryland 20814
TABLE OF CONTENTS
Investment Objective and Policies 1
Investment Restrictions 7
Purchase and Redemption of Shares 9
Reduced Sales Charges (Class A) 10
Net Asset Value 11
Calculation of Total Return 11
Advertising 12
Dividends and Taxes 13
Directors and Officers 14
Investment Advisor and Subadvisors 17
Transfer and Shareholder Servicing Agent 18
Method of Distribution 18
Portfolio Transactions 20
Independent Accountants and Custodians 20
General Information 20
Financial Statements 21
Appendix 21
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION-May 1, 1998
CALVERT CAPITAL ACCUMULATION FUND
4550 Montgomery Avenue, Bethesda, Maryland 20814
New Account (800) 368-2748 Shareholder (800) 368-2745
Information: (301) 951-4820 Services: (301) 951-4810
Broker (800) 368-2746 TDD for the Hearing-
Services: (301) 951-4850 Impaired: (800) 541-1524
This Statement of Additional Information is not a prospectus.
Investors should read the Statement of Additional Information in conjunction
with the Fund's Prospectus, dated May 1, 1998, which may be obtained free of
charge by writing the Fund at the above address or calling the Fund.
INVESTMENT OBJECTIVE AND POLICIES
The Fund seeks to provide long-term capital appreciation by investing
primarily in the equity securities of mid-sized companies that are undervalued
but demonstrate a potential for growth. The Fund will rely on its proprietary
research to identify stocks that may have been overlooked by analysts,
investors, and the media, and which generally are within the range of
capitalization of the S&P 400 Mid-Cap Index, but which may be larger or
smaller as deemed appropriate.
Investments may also include, but are not limited to, preferred
stocks, foreign securities, convertible securities, certain options and
futures transactions, bonds, notes and other debt securities. The Fund will
take reasonable risks in seeking to achieve its investment objective. There
is, of course, no assurance that the Fund will be successful in meeting its
objective since there is risk involved in the ownership of all equity
securities. The Fund's investment objective is not fundamental and may be
changed without shareholder approval.
Defensive Strategies
The Fund may employ certain defensive strategies (generally options
and futures contracts) in an attempt to protect against the decline of its
investments. An option is a legal contract that gives the holder the right to
buy or sell a specified amount of the underlying interest at a fixed or
determinable price (called the exercise or strike price) upon exercise of the
option. A futures contract is an agreement to take delivery or to make
delivery of a standardized quantity and quality of a certain commodity during
particular months in the future at a specified price. Buying or selling
futures contracts -- contracts that establish a price level at a given time
for items to be delivered later -- amounts to insurance against adverse price
changes, or "hedging."
The Fund may purchase put and call options, and write (sell) covered
put and call options, on equity and debt securities, foreign currencies and
stock or debt indices. The Fund may purchase or write both exchange-traded and
OTC options. These strategies may also be used with respect to futures.
Special Risks of Defensive Strategies
Successful use of defensive strategies depends on the ability to
predict movements of the overall securities, currency and interest rate
markets, which is a different skill than that required to select equity and
debt investments. There can be no assurance that a chosen strategy will
succeed.
There may not be an expected correlation between price movements of a
hedging instrument and price movements of the investment being hedged, so that
the Fund may lose money notwithstanding employment of the hedging strategy.
While defensive strategies can reduce risk of loss by offsetting the
negative effect of unfavorable price movements, they can also reduce the
opportunity for gain by offsetting the positive effect of a favorable price
movement. If the variance is great enough, a decline in the price of an
instrument used for defensive purposes may result in a loss to the Fund.
The Fund may be required to cover its assets in a segregated account.
If an investment is not able to be liquidated at the time the Subadvisor
believes it is best for the Fund to do so, the Fund might be required to keep
assets on reserve that it otherwise would not have had to maintain. Similarly,
it might have to sell a security at an inopportune time in order to maintain
the reserves.
Instruments used as part of a Defensive Strategy
The Fund may write covered call options and purchase call and put
options on securities and securities indices, and may write secured put
options and enter into option transactions on foreign currency. It may also
engage in transactions in financial futures contracts and related options for
hedging purposes, and invest in repurchase agreements. A call option on a
security, security index or a foreign currency gives the purchaser of the
option, in return for the premium paid to the writer (seller), the right to
buy the underlying security, index or foreign currency at the exercise price
at any time during the option period. Upon exercise by the purchaser, the
writer of a call option on an individual security or foreign currency has the
obligation to sell the underlying security or currency at the exercise price.
A call option on a securities index is similar to a call option on an
individual security, except that the value of the option depends on the
weighted value of the group of securities comprising the index and all
settlements are to be made in cash. A call option may be terminated by the
writer (seller) by entering into a closing purchase transaction in which it
purchases an option of the same series as the option previously written.
A put option on a security, security index, or foreign currency gives
the purchaser of the option, in return for the premium paid to the writer
(seller), the right to sell the underlying security, index, or foreign
currency at the exercise price at any time during the option period. Upon
exercise by the purchaser, the writer of a put option has the obligation to
purchase the underlying security or foreign currency at the exercise price. A
put option on a securities index is similar to a put option on an individual
security, except that the value of the option depends on the weighted value of
the group of securities comprising the index and all settlements are made in
cash. The Fund may write exchange-traded call options on its securities.
Call options may be written on portfolio securities, securities
indices, or foreign currencies. With respect to securities and foreign
currencies, the Fund may write call and put options on an exchange or
over-the-counter. Call options on portfolio securities will be covered since
the Fund will own the underlying securities. Call options on securities
indices will be written only to hedge in an economically appropriate way
against anticipated changes in the market value of portfolio securities which
are not otherwise hedged with options or financial futures contracts and will
be "covered" by identifying the specific portfolio securities being hedged.
Options on foreign currencies will be covered by securities
denominated in that currency. Options on securities indices will be covered by
securities that substantially replicate the movement of the index.
The Fund may not write options on more than 50% of its total assets.
Management presently intends to cease writing options if and as long as 25% of
such total assets are subject to outstanding options contracts or if required
under regulations of state securities administrators. The fund may purchase a
put or call option on securities (including a straddle or spread) only if the
value of that option premium, when aggregated with the premiums on all other
options on securities held by the fund, does not exceed 5% of the Fund's total
assets.
The Fund may write call and put options in order to obtain a return
on its investments from the premiums received and will retain the premiums
whether or not the options are exercised. Any decline in the market value of
portfolio securities or foreign currencies will be offset to the extent of the
premiums received (net of transaction costs). If an option is exercised, the
premium received on the option will effectively increase the exercise price or
reduce the difference between the exercise price and market value. During the
option period, the writer of a call option gives up the opportunity for
appreciation in the market value of the underlying security or currency above
the exercise price. It retains the risk of loss should the price of the
underlying security or foreign currency decline. Writing call options also
involves risks relating to the Fund's ability to close out options it has
written. During the option period, the writer of a put option has assumed the
risk that the price of the underlying security or foreign currency will
decline below the exercise price. However, the writer of the put option has
retained the opportunity for an appreciation above the exercise price should
the market price of the underlying security or foreign currency increase.
Writing put options also involves risks relating to the Fund's ability to
close out options it has written.
The Fund may sell a call option or a put option which it has
previously purchased prior to the purchase (in the case of a call) or the sale
(in the case of a put) of the underlying security or foreign currency. Any
such sale would result in a net gain or loss depending on whether the amount
received on the sale is more or less than the premium and other transaction
costs paid on the call or put which is sold. Purchasing a call or put option
involves the risk that the Fund may lose the premium it paid plus transaction
costs.
Warrants and stock rights are almost identical to call options in
their nature, use and effect except that they are issued by the issuer of the
underlying security rather than an option writer, and they generally have
longer expiration dates than call options. The Fund may invest up to 5% of its
net assets in warrants and stock rights, but no more than 2% of its net assets
in warrants and stock rights not listed on the New York Stock Exchange or the
American Stock Exchange.
The Fund may enter into financial futures contracts and related
options as a hedge against anticipated changes in the market value of
portfolio securities or securities which it or the Fund intends to purchase or
in the exchange rate of foreign currencies. Hedging is the initiation of an
offsetting position in the futures market which is intended to minimize the
risk associated with a position's underlying securities in the cash market.
Investment techniques related to financial futures and options are summarized
below.
Financial futures contracts in which the Fund may invest include
interest rate futures contracts, foreign currency futures contracts and
securities index futures contracts. An interest rate futures contract
obligates the seller of the contract to deliver, and the purchaser to take
delivery of, the interest rate securities called for in the contract at a
specified future time and at a specified price. A foreign currency futures
contract obligates the seller of the contract to deliver, and the purchaser to
take delivery of, the foreign currency called for in the contract at a
specified future time and at a specified price. (See "Foreign Currency
Transactions.") A securities index assigns relative values to the securities
included in the index, and the index fluctuates with changes in the market
values of the securities so included. A securities index futures contract is a
bilateral agreement pursuant to which two parties agree to take or make
delivery of an amount of cash equal to a specified dollar amount times the
difference between the index value at the close of the last trading day of the
contract and the price at which the futures contract is originally struck. An
option on a financial futures contract gives the purchaser the right to assume
a position in the contract (a long position if the option is a call and a
short position if the option is a put) at a specified exercise price at any
time during the period of the option.
Engaging in transactions in financial futures contracts involves
certain risks, such as the possibility of an imperfect correlation between
futures market prices and cash market prices and the possibility that the
Advisor or Subadvisor could be incorrect in its expectations as to the
direction or extent of various interest rate movements or foreign currency
exchange rates, in which case the Fund's return might have been greater had
hedging not taken place. There is also the risk that a liquid secondary market
may not exist. The risk in purchasing an option on a financial futures
contract is that the Fund will lose the premium it paid. Also, there may be
circumstances when the purchase of an option on a financial futures contract
would result in a loss to the Fund while the purchase or sale of the contract
would not have resulted in a loss.
The Fund may purchase and sell financial futures contracts which are
traded on a recognized exchange or board of trade and may purchase exchange or
board-traded put and call options on financial futures contracts. It will
engage in transactions in financial futures contracts and related options only
for hedging purposes and not for speculation. In addition, the Fund will not
purchase or sell any financial futures contract or related option if,
immediately thereafter, the sum of the cash or U.S. Treasury bills committed
with respect to its existing futures and related options positions and the
premiums paid for related options would exceed 5% of the market value of its
total assets. At the time of purchase of a futures contract or a call option
on a futures contract, an amount of cash, U.S. Government securities or other
appropriate high-grade debt obligations equal to the market value of the
futures contract minus the Fund's initial margin deposit with respect thereto,
will be deposited in a segregated account with the Fund's custodian bank to
collateralize fully the position and thereby ensure that it is not leveraged.
The extent to which the Fund may enter into financial futures contracts and
related options may also be limited by requirements of the Internal Revenue
Code of 1986 for qualification as a regulated investment company.
Noninvestment-grade (High Yield/High Risk - or Junk Bond) Debt Securities
The Fund may invest in lower quality debt securities (generally those
rated BB or lower by S&P or Ba or lower by Moody's), which provides that no
more than 35% of its assets is in securities rated below BBB, or in unrated
securities determined by the Advisor to be comparable to securities rated
below BBB. These securities involve greater risk of default or price declines
due to changes in the issuer's creditworthiness than investment-grade debt
securities. Because the market for lower-rated securities may be thinner and
less active than for higher-rated securities, there may be market price
volatility for these securities and limited liquidity in the resale market.
Market prices for these securities may decline significantly in periods of
general economic difficulty or rising interest rates. Unrated debt securities
may fall into the lower quality category. Unrated securities usually are not
attractive to as many buyers as are rated securities, which may make them less
marketable.
The quality limitation set forth in the investment policy is
determined immediately after the Fund's acquisition of a security.
Accordingly, any later change in ratings will not be considered when
determining whether an investment complies with the Fund's investment policy.
If an obligation held by the Fund is later downgraded, the Fund's Advisor,
under the supervision of the Fund's Board of Directors, will consider whether
it is in the best interest of the Fund's shareholders to hold or to dispose of
the obligation. Among the criteria that may be considered by the Advisor and
the Board are the probability that the obligations will be able to make
scheduled interest and principal payments in the future, the extent to which
any devaluation of the obligation has already been reflected in the Fund's net
asset value, and the total percentage, if any, of obligations currently rated
below investment grade held by the Fund.
When purchasing high-yielding securities, rated or unrated, the
Subadvisor prepares its own careful credit analysis to attempt to identify
those issuers whose financial condition is adequate to meet future obligations
or is expected to be adequate in the future. Through portfolio diversification
and credit analysis, investment risk can be reduced, although there can be no
assurance that losses will not occur.
Foreign Securities
The Fund may purchase foreign securities. Foreign brokerage
commissions and the custodial costs associated with maintaining foreign
portfolio securities are generally higher than in the United States. Fee
expense may also be incurred on currency exchanges when the Fund changes
investments from one country to another or converts foreign securities
holdings into U.S. dollars. Foreign companies and foreign investment practices
are not subject to uniform accounting, auditing and financial reporting
standards and practices or regulatory requirements comparable to those
applicable to United States companies. There may be less public information
available about foreign companies.
United States Government policies have at times, in the past, through
imposition of interest equalization taxes and other restrictions, discouraged
United States investors from making certain investments abroad and may be
reinstituted from time to time as a means of fostering a favorable United
States balance of payments. In addition, foreign countries may impose
withholding and taxes on dividends and interest.
Foreign Currency Transactions
Forward Foreign Currency Exchange Contracts. A forward foreign
currency exchange contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any fixed number of days
("Term") from the date of the contract agreed upon by the parties, at a price
set at the time of the contract. These contracts are traded directly between
currency traders (usually large commercial banks) and their customers.
The Fund will not enter into such forward contracts or maintain a net
exposure in such contracts where it would be obligated to deliver an amount of
foreign currency in excess of the value of its portfolio securities and other
assets denominated in that currency. The Subadvisor believes that it is
important to have the flexibility to enter into such forward contracts when it
determines that to do so is in the Fund's best interests.
Foreign Currency Options. A foreign currency option provides the
option buyer with the right to buy or sell a stated amount of foreign currency
at the exercise price at a specified date or during the option period. A call
option gives its owner the right, but not the obligation, to buy the currency,
while a put option gives its owner the right, but not the obligation, to sell
the currency. The option seller (writer) is obligated to fulfill the terms of
the option sold if it is exercised. However, either seller or buyer may close
its position during the option period for such options any time prior to
expiration.
A call rises in value if the underlying currency appreciates.
Conversely, a put rises in value if the underlying currency depreciates. While
purchasing a foreign currency option can protect the Fund against an adverse
movement in the value of a foreign currency, it does not limit the gain which
might result from a favorable movement in the value of such currency. For
example, if the Fund was holding securities denominated in an appreciating
foreign currency and had purchased a foreign currency put to hedge against a
decline in the value of the currency, it would not have to exercise its put.
Similarly, if the Fund had entered into a contract to purchase a security
denominated in a foreign currency and had purchased a foreign currency call to
hedge against a rise in the value of the currency but instead the currency had
depreciated in value between the date of purchase and the settlement date, it
would not have to exercise its call but could acquire in the spot market the
amount of foreign currency needed for settlement.
Foreign Currency Futures Transactions. The Fund may use foreign
currency futures contracts and options on such futures contracts. Through the
purchase or sale of such contracts, it may be able to achieve many of the same
objectives attainable through the use of foreign currency forward contracts,
but more effectively and possibly at a lower cost.
Unlike forward foreign currency exchange contracts, foreign currency
futures contracts and options on foreign currency futures contracts are
standardized as to amount and delivery period and are traded on boards of
trade and commodities exchanges. It is anticipated that such contracts may
provide greater liquidity and lower cost than forward foreign currency
exchange contracts.
Lending Portfolio Securities
The Fund may lend its portfolio securities to member firms of the New
York Stock Exchange and commercial banks with assets of one billion dollars or
more, provided the value of the securities loaned from the Fund will not
exceed one-third of the Fund's assets. Loans must be secured continuously in
the form of cash or cash equivalents such as U.S. Treasury bills; the amount
of the collateral must on a current basis equal or exceed the market value of
the loaned securities, and the Fund must be able to terminate such loans upon
notice at any time. The Fund will exercise its right to terminate a securities
loan in order to preserve its right to vote upon matters of importance
affecting holders of the securities.
The advantage of such loans is that the Fund continues to receive the
equivalent of the interest earned or dividends paid by the issuers on the
loaned securities while at the same time earning interest on the cash or
equivalent collateral which may be invested in accordance with the Fund's
investment objective, policies and restrictions.
Securities loans are usually made to broker-dealers and other
financial institutions to facilitate their delivery of such securities. As
with any extension of credit, there may be risks of delay in recovery and
possibly loss of rights in the loaned securities should the borrower of the
loaned securities fail financially. However, the Fund will make loans of its
portfolio securities only to those firms the Advisor or Subadvisor deems
creditworthy and only on such terms the Advisor believes should compensate for
such risk. On termination of the loan the borrower is obligated to return the
securities to the Fund. The Fund will realize any gain or loss in the market
value of the securities during the loan period. The Fund may pay reasonable
custodial fees in connection with the loan.
Nondiversified Status
The Fund is a "nondiversified" investment company under the
Investment Act of 1940 (the "Act"), which means the Fund is not limited by the
Act in the proportion of its assets that may be invested in the securities of
a single issuer. A nondiversified fund may invest in a smaller number of
issuers than a diversified fund. Thus, an investment in the Fund may, under
certain circumstances, present greater risk of loss to an investor than an
investment in a diversified fund. However, the Fund intends to conduct its
operations so as to qualify to be taxed as a "regulated investment company"
for purposes of the Code, which will relieve the Fund of any liability for
federal income tax to the extent its earnings are distributed to shareholders.
To qualify for this Subchapter M tax treatment, the Fund will limit its
investments to satisfy the Code diversification requirements so that, at the
close of each quarter of the taxable year, (i) not more than 25% of the fund's
assets will be invested in the securities of a single issuer or of two or more
issuers which the Fund controls and which are determined to be engaged in the
same or similar trades or businesses or related trades or businesses, and (ii)
with respect to 50% of its assets, not more than 5% of its assets will be
invested in the securities of a single issuer and the Fund will not own more
than 10% of the outstanding voting securities of a single issuer. Investments
in United States Government securities are not subject to these limitations;
while securities issued or guaranteed by foreign governments are subject to
the above tests in the same manner as the securities of non-governmental
issuers. The Fund intends to comply with the SEC staff position that
securities issued or guaranteed as to principal and interest by any single
foreign government are considered to be securities of issuers in the same
industry.
INVESTMENT RESTRICTIONS
Fundamental Investment Restrictions
The Fund has adopted the following investment restrictions which
cannot be changed without the approval of the holders of a majority of the
outstanding shares of the Fund. As defined in the Investment Company Act of
1940, this means the lesser of the vote of (a) 67% of the shares of the Fund
at a meeting where more than 50% of the outstanding shares are present in
person or by proxy or (b) more than 50% of the outstanding shares of the Fund.
The Fund may not:
1. With respect to 50% of its assets, purchase
securities of any issuer (other than obligations of, or
guaranteed by, the United States Government, its agencies or
instrumentalities) if, as a result, more than 5% of the
value of its total assets would be invested in securities of
that issuer. (The remaining 50% of its total assets may be
invested without restriction except to the extent other
investment restrictions may be applicable).
2. Concentrate 25% or more of the value of its assets
in any one industry; provided, however, that there is no
limitation with respect to investments in obligations issued
or guaranteed by the United States Government or its
agencies and instrumentalities, and repurchase agreements
secured thereby.
3. Make loans of more than one-third of the assets of
the Fund, or as permitted by law. The purchase by the Fund
of all or a portion of an issue of publicly or privately
distributed debt obligations in accordance with its
investment objective, policies and restrictions, shall not
constitute the making of a loan.
4. Underwrite the securities of other issuers, except
as permitted by the Board of Directors within applicable
law, and except to the extent that in connection with the
disposition of its portfolio securities, the Fund may be
deemed to be an underwriter.
5. Purchase from or sell to any of the Fund's officers
or directors, or companies of which any of them are
directors, officers or employees, any securities (other than
shares of beneficial interest of the Fund), but such persons
or firms may act as brokers for the Fund for customary
commissions.
6. Except as required in connection with permissible
options, futures and commodity activities of the Fund,
invest in commodities, commodity futures contracts, or real
estate, although it may invest in securities which are
secured by real estate or real estate mortgages and
securities of issuers which invest or deal in commodities,
commodity futures, real estate or real estate mortgages and
provided that it may purchase or sell stock index futures,
foreign currency futures, interest rate futures and options
thereon.
7. Invest in the shares of other investment companies,
except as permitted by the 1940 Act or other applicable law,
or pursuant to Calvert's nonqualified deferred compensation
plan adopted by the Board of Directors in an amount not to
exceed 10% or as permitted by law.
8. Purchase more than 10% of the outstanding voting
securities of any issuer.
Nonfundamental Investment Restrictions
The Fund has adopted the following operating (i.e., non-fundamental)
investment policies and restrictions which may be changed by the Board of
Directors without shareholder approval. The Fund may not:
10. Invest, in the aggregate, more than 15% of its net
assets in illiquid securities. Purchases of securities
outside the U.S. that are not registered with the SEC or
marketable in the U.S. are not per se illiquid.
11. Make short sales of securities or purchase any
securities on margin except that the Fund may obtain such
short-term credits as may be necessary for the clearance of
purchases and sales of securities. The depositor payment by
the Fund of initial or maintenance margin in connection with
financial futures contracts or related options transactions
is not considered the purchase of a security on margin.
12. Borrow money, except from banks for temporary or
emergency purposes, and then only in an amount not to exceed
one-third of the Fund's total assets, or as permitted by
law. In order to secure any permitted borrowings under this
section, the Fund may pledge, mortgage or hypothecate its
assets.
For purposes of the Fund's concentration policy contained in
restriction (2), above, the Fund intends to comply with the SEC staff position
that securities issued or guaranteed as to principal and interest by any
single foreign government are considered to be securities of issuers in the
same industry.
Any investment restriction which involves a maximum percentage of
securities or assets shall not be considered to be violated unless an excess
over the applicable percentage occurs immediately after an acquisition of
securities or utilization of assets and results therefrom.
PURCHASE AND REDEMPTION OF SHARES
Share certificates will not be issued unless requested in writing by
the investor. No charge will be made for share certificate requests. No
certificates will be issued for fractional shares.
Amounts redeemed by check redemption may be mailed to the investor.
Certain Class B and Class C shares may be subject to a contingent deferred
sales charge which is subtracted from the redemption proceeds (see Prospectus,
"Calculation of Contingent Deferred Sales Charges and Waiver of Sales
Charges"). Amounts of more than $50 and less than $300,000 may be transferred
electronically at no charge to the investor. Amounts of $1,000 or more will be
transmitted by wire without charge by the Fund to the investor's account at a
domestic commercial bank that is a member of the Federal Reserve System or to
a correspondent bank. A charge of $5 is imposed on wire transfers of less than
$1,000. If the investor's bank is not a Federal Reserve System member, failure
of immediate notification to that bank by the correspondent bank could result
in a delay in crediting the funds to the investor's bank account.
Telephone redemption requests which would require the redemption of
shares purchased by check or electronic funds transfer within the previous 10
business days may not be honored. The Fund reserves the right to modify the
telephone redemption privilege.
New shareholders wishing to use the Fund's telephone redemption
procedure must so indicate on their Investment Applications and, if desired,
designate a commercial bank or securities broker and account to receive the
redemption proceeds. Existing shareholders who at any time desire to arrange
for the telephone redemption procedure, or to change instructions already
given, must send a written notice to the Fund, with a voided check for the
bank wiring instructions to be added. If a voided check does not accompany the
request, then the request must be signature guaranteed by a commercial bank,
savings and loan association, trust company, member firm of any national
securities exchange, or certain credit unions. Further documentation may be
required from corporations, fiduciaries, pension plans, and institutional
investors.
The Fund's redemption check normally will be mailed to the investor
on the next business day following the date of receipt by the Fund of the
written or telephone redemption request. If the investor so instructs in the
redemption request, the check will be mailed or the redemption proceeds wired
to a predesignated account at the investor's bank. Redemption proceeds are
normally paid in cash. However, at the sole discretion of the Fund, the Fund
has the right to redeem shares in assets other than cash for redemption
amounts exceeding, in any 90-day period, $250,000 or 1% of the net asset value
of the Fund, whichever is less, or as allowed by law.
The right of redemption of Fund shares may be suspended or the date
of payment postponed for any period during which the New York Stock Exchange
is closed (other than customary weekend and holiday closings), when trading on
the New York Stock Exchange is restricted, or an emergency exists, as
determined by the SEC, or if the Commission has ordered such a suspension for
the protection of shareholders. Redemption proceeds are normally mailed or
wired the next business day after a proper redemption request has been
received unless redemptions have been suspended or postponed as described
above.
REDUCED SALES CHARGES (CLASS A)
The Fund imposes reduced sales charges for Class A shares in certain
situations in which the Principal Underwriter and the dealers selling Fund
shares may expect to realize significant economies of scale with respect to
such sales. Generally, sales costs do not increase in proportion to the dollar
amount of the shares sold; the per-dollar transaction cost for a sale to an
investor of shares worth, say, $5,000 is generally much higher than the
per-dollar cost for a sale of shares worth $1,000,000. Thus, the applicable
sales charge declines as a percentage of the dollar amount of shares sold as
the dollar amount increases.
When a shareholder agrees to make purchases of shares over a period
of time totaling a certain dollar amount pursuant to a Letter of Intent, the
Underwriter and selling dealers can expect to realize the economies of scale
applicable to that stated goal amount. Thus the Fund imposes the sales charge
applicable to the goal amount. Similarly, the Underwriter and selling dealers
also experience cost savings when dealing with existing Fund shareholders,
enabling the Fund to afford existing shareholders the Right of Accumulation.
The Underwriter and selling dealers can also expect to realize economies of
scale when making sales to the members of certain qualified groups which agree
to facilitate distribution of Fund shares to their members. See "Exhibit A -
Reduced Sales Charges" in the Prospectus.
NET ASSET VALUE
The net asset value per share of the Fund is determined every
business day as of the close of the New York Stock Exchange (generally, 4:00
p.m., Eastern time), and at such other times as may be necessary or
appropriate. The Fund does not determine net asset value on certain national
holidays or other days on which the New York Stock Exchange is closed: New
Year's Day, Martin Luther King Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
The public offering price of the Fund's shares is the net asset value
per share (plus, for Class A shares, the applicable sales charge). The net
asset value per share is computed separately for each class by dividing the
value of the Fund's total assets, less its liabilities, by the total number of
shares outstanding for that class. The Fund's securities are valued as
follows: (a) securities for which market quotations are readily available are
valued at the most recent closing price, mean between bid and asked price, or
yield equivalent as obtained from one or more market makers for such
securities; (b) securities maturing within 60 days are valued at cost, plus or
minus any amortized discount or premium, unless the Board of Directors
determines such method not to be appropriate under the circumstances; and (c)
all other securities and assets for which market quotations are not readily
available are fairly valued by the Advisor in good faith under the supervision
of the Board of Directors.
Net Asset Value and Offering Price Per Share
Net asset value per share
($54,751,182/2,012,314 shares) $27.21
Maximum sales charge, Class A
(4.75% of offering price) 1.36
Offering price per share, Class A $28.57
Class C net asset value and offering price per share
($4,183,988/157,065 shares) $26.64
CALCULATION OF TOTAL RETURN
The Fund may, from time to time, advertise "total return." Total
return is calculated separately for each class. Total return is computed by
taking the total number of shares purchased by a hypothetical $1,000
investment, after deducting the applicable sales charge for Class A shares,
adding all additional shares purchased within the period with reinvested
dividends and distributions, calculating the value of those shares at the end
of the period, and dividing the result by the initial $1,000 investment. Note:
"Total Return" when quoted in the Financial Highlights section of the Fund's
Prospectus and the Annual Report to Shareholders, however, per SEC
instructions, does not reflect deduction of the sales charge, and corresponds
to "return without maximum sales load" return as referred to herein. For
periods of more than one year, the cumulative total return is then adjusted
for the number of years, taking compounding into account, to calculate average
annual total return during that period.
Total return is computed according to the following formula:
P(1 + T)n = ERV
where P = a hypothetical initial payment of $l,000 (less the maximum sales
charge imposed during the period calculated); T = total return; n = number of
years; and ERV = the ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the period.
Performance is historical in nature and is not intended to indicate
future performance. All total return quotations reflect the deduction of the
Fund's maximum sales charge, except quotations of "return without maximum
sales load" which do not reflect deduction of the sales charge. Return without
maximum sales load, which will be higher than total return, should be
considered only by investors, such as participants in certain pension plans,
to whom the sales charge does not apply, or for purposes of comparison only
with comparable figures which also do not reflect sales charges, such as
Lipper averages. Thus, in the above formula, for return without maximum sales
load, P = the entire $1,000 hypothetical initial investment and does not
reflect deduction of any sales charge. Return may be advertised for other
periods, such as by quarter, or cumulatively for more than one year.
Return for the Fund's shares are as follows, for the periods ended
September 30, 1997:
Class A Shares Class A Shares Class C Shares
Without Maximum Total Return With Total Return
Sales Load Return Maximum Sales Load
One Year 20.67% 14.93% 19.25%
Since Inception 23.84% 9.25% 22.87%
Total return, like net asset value per share, fluctuates in response
to changes in market conditions. Performance for any particular time period
should not be considered an indication of future return.
ADVERTISING
The Fund or its affiliates may provide information such as, but not
limited to, the economy, investment climate, investment principles,
sociological conditions and political ambiance. Discussion may include
hypothetical scenarios or lists of relevant factors designed to aid the
investor in determining whether the Fund is compatible with the investor's
goals. The Fund may list portfolio holdings or give examples or securities
that may have been considered for inclusion in the Portfolio, whether held or
not.
The Fund or its affiliates may supply comparative performance data
and rankings from independent sources such as Donoghue's Money Fund Report,
Bank Rate Monitor, Money, Forbes, Lipper Analytical Services, Inc., CDA
Investment Technologies, Inc., Wiesenberger Investment Companies Service,
Russell 2000/Small Stock Index, Mutual Fund Values Morningstar Ratings, Mutual
Fund Forecaster, Barron's, The Wall Street Journal, and Schabacker Investment
Management, Inc. Such averages generally do not reflect any front- or back-end
sales charges that may be charged by Funds in that grouping. The Fund may also
cite to any source, whether in print or on-line, such as Bloomberg, in order
to acknowledge origin of information. The Fund may compare itself or its
portfolio holdings to other investments, whether or not issued or regulated by
the securities industry, including, but not limited to, certificates of
deposit and Treasury notes. The Fund, its Advisor, and its affiliates reserve
the right to update performance rankings as new rankings become available.
Calvert Group is the nation's leading family of socially responsible
mutual funds, both in terms of socially responsible mutual fund assets under
management, and number of socially responsible mutual fund portfolios offered
(source: Social Investment Forum, December 31, 1997). Calvert Group was also
the first to offer a family of socially responsible mutual fund portfolios.
DIVIDENDS, DISTRIBUTIONS, AND TAXES
The Fund declares and pays dividends from net investment income on an
annual basis. Distributions of realized net capital gains, if any, are
normally paid once a year; however, the Fund does not intend to make any such
distributions unless available capital loss carryovers, if any, have been used
or have expired. Dividends and distributions paid may differ among the classes
because of different expenses.
Certain options, futures contracts, and options on futures contracts
are "section 1256 contracts." Any gains or losses on section 1256 contracts
are generally considered 60% long-term and 40% short-term capital gains or
losses ("60/40 gains or losses"). Also, section 1256 contracts held by the
Fund at the end of each taxable year are treated for federal income tax
purposes as being sold on such date for their fair market value. The resultant
gains or losses are treated as 60/40 gains or losses. When the section 1256
contract is subsequently disposed of, the actual gain or loss will be adjusted
by the amount of the year-end gain or loss. The use of section 1256 contracts
may increase the amount of short-term capital gain realized by the Fund and
taxed as ordinary income when distributed to shareholders.
Hedging transactions in options, futures contracts and straddles or
other similar transactions will subject the Fund to special tax rules
(including mark-to-market, straddle, wash sale and short sales rules). The
effect of these rules may be to accelerate income to the Fund, defer losses to
the Fund, cause adjustments in the holding periods of the Fund's securities or
convert short-term capital losses into long-term capital losses. Hedging
transactions may increase the amount of short-term capital gain realized by
the Fund which is taxed as ordinary income when distributed to shareholders.
The Fund may make one or more of the various selections available under the
Code with respect to hedging transactions. If the Fund makes any of the
elections, the amount, character and timing of the recognition of gains or
losses from the affected positions will be determined under rules that vary
according to the elections made. The Fund will use its best efforts to make
any available elections pertaining to the foregoing transactions in a manner
believed to be in the best interests of the Fund.
The Fund's transactions in foreign currency-denominated debt and
equity securities, certain foreign currency options, futures contracts, and
forward contracts may give rise to ordinary income or loss to the extent such
income or loss results from fluctuations in the value of the foreign currency
concerned.
If more than 50% of the Fund's assets at year end consist of the debt
and equity securities of foreign corporations, the Fund may elect to permit
shareholders to claim a credit or deduction on their income tax returns for
their pro rata portion of qualified taxes paid by the Fund to foreign
countries. In such a case, shareholders will include in gross income from
foreign sources their pro rata shares of such taxes. A shareholder's ability
to claim a foreign tax credit or deduction in respect of foreign taxes paid by
the Fund may be subject to certain limitations imposed by the Code, as a
result of which a shareholder may not get a full credit or deduction for the
amount of such taxes. Shareholders who do not itemize on their federal income
tax returns may claim a credit (but no deduction) for such foreign taxes.
Dividends and distributions may be subject to state and local taxes.
Dividends paid by the Fund from income attributable to interest on obligations
of the U.S. Government and certain of its agencies and instrumentalities may
be exempt from state and local taxes in certain states. The Fund will advise
shareholders of the proportion of its dividends consisting of such
governmental interest. Shareholders should consult their tax advisors
regarding the possible exclusion of this portion of their dividends for state
and local tax purposes.
Investors should note that the Internal Revenue Code may require
investors to exclude the initial sales charge, if any, paid on the purchase of
Fund shares from the tax basis of those shares if the shares are exchanged for
shares of another Calvert Group Fund within 90 days of purchase. This
requirement applies only to the extent that the payment of the original sales
charge on the shares of the Fund causes a reduction in the sales charge
otherwise payable on the shares of the Calvert Group Fund acquired in the
exchange, and investors may treat sales charges excluded from the basis of the
original shares as incurred to acquire the new shares.
The Fund is required to withhold 31% of any dividends or redemption
payments occurring in the Fund if: (a) the shareholder's social security
number or other taxpayer identification number ("TIN") is not provided, or an
obviously incorrect TIN is provided; (b) the shareholder does not certify
under penalties of perjury that the TIN provided is the shareholder's correct
TIN and that the shareholder is not subject to backup withholding under
section 3406(a)(1)(C) of the Code because of underreporting (however, failure
to provide certification as to the application of section 3406(a)(1)(C) will
result only in backup withholding on dividends, not on redemptions); or (c)
the Fund is notified by the Internal Revenue Service that the TIN provided by
the shareholder is incorrect or that there has been underreporting of interest
or dividends by the shareholder. Affected shareholders will receive statements
at least annually specifying the amount withheld.
The Fund is required to report to the Internal Revenue Service the
following information with respect to each redemption transaction: (a) the
shareholder's name, address, account number and taxpayer identification
number; (b) the total dollar value of the redemptions; and (c) the Fund's
identifying CUSIP number.
Certain shareholders are exempt from the backup withholding and
broker reporting requirements. Exempt shareholders include: corporations;
financial institutions; tax-exempt organizations; individual retirement plans;
the U.S., a State, the District of Columbia, a U.S. possession, a foreign
government, an international organization, or any political subdivision,
agency or instrumentality of any of the foregoing; U.S. registered commodities
or securities dealers; real estate investment trusts; registered investment
companies; bank common trust funds; certain charitable trusts; or foreign
central banks of issue. Non-resident aliens, certain foreign partnerships and
foreign corporations are generally not subject to either requirement but may
instead be subject to withholding under sections 1441 or 1442 of the Internal
Revenue Code. Shareholders claiming exemption from backup withholding and
broker reporting should call or write the Fund for further information.
DIRECTORS AND OFFICERS
JOHN G. GUFFEY, JR., Director. Mr. Guffey is chairman of the Calvert
Social Investment Foundation, organizing director of the Community Capital
Bank in Brooklyn, New York, and a financial consultant to various
organizations. In addition, he is a Director of the Community Bankers Mutual
Fund of Denver, Colorado, and the Treasurer and Director of Silby, Guffey, and
Co., Inc., a venture capital firm. Mr. Guffey is a trustee/director of each of
the other investment companies in the Calvert Group of Funds, except for
Calvert New World Fund, Inc., and Acacia Capital Corporation. Address: 7205
Pomander Lane, Chevy Chase, Maryland 20815. DOB: 05/15/48.
*BARBARA J. KRUMSIEK, President and Director. Ms. Krumsiek serves as
President, Chief Executive Officer and Vice Chairman of Calvert Group, Ltd.
and as an officer and director of each of its affiliated companies. She is
President and Director of Calvert-Sloan Advisers, L.L.C., and a
trustee/director of each of the investment companies in the Calvert Group of
Funds. Prior to joining Calvert Group, Ms. Krumsiek served as Senior Vice
President of Alliance Capital LP's Mutual Fund Division. DOB: 08/09/52.
TERRENCE J. MOLLNER, Ed.D, Director. Dr. Mollner is Founder and
Chairperson of Trusteeship Institute, Inc., a diverse foundation known
principally for its consultation to corporations converting to cooperative
employee-ownership. He served as a Trustee of the Cooperative Fund of New
England, Inc., and is now a member of its Board of Advisors. Mr. Mollner also
serves as Trustee for the Calvert Social Investment Fund. He is also a founder
and member of the Board of Trustees of the Foundation for Soviet-American
Economic Cooperation. Address: 15 Edwards Square, Northampton, Massachusetts
01060. DOB: 12/13/44.
RUSTUM ROY, Director. Mr. Roy is the Evan Pugh Professor of the Solid
State Geochemistry at Pennsylvania State University, and Corporation Chair,
National Association of Science, Technology, and Society. Address: Material
Research Laboratory, Room 102A, Pennsylvania State University, University
Park, Pennsylvania, 16802. DOB: 7/3/24.
*D. WAYNE SILBY, Esq. is a trustee/director of each of the investment
companies in the Calvert Group of Funds, except for Calvert Variable Series
and Calvert New World Fund, Inc. Mr. Silby is an officer, director and
shareholder of Silby, Guffey & Company, Inc., which serves as general partner
of Calvert Social Venture Partners ("CSVP"). CSVP is a venture capital firm
investing in socially responsible small companies. He is also a Director of
Acacia Mutual Life Insurance Company and Executive Chairman of GroupServe,
Inc., an Internet Company focused on community building collaborative tools.
Address: 7205 Pomander Lane, Chevy Chase, Maryland 20815. DOB: 5/15/48.
TESSA TENNANT, Director. Ms. Tennant is the head of green and ethical
investing for National Provident Investment Managers Ltd. Previously, she was
in charge of the Environmental Research Unit of Jupiter Tyndall Merlin Ltd.,
and was the Director of the Jupiter Tyndall Merlin investment managers.
Address: 55 Calverley Road, Tunbridge Wells, Kent, TN1 2UE, United Kingdom.
DOB: 5/29/59.
MOHAMMAD YUNUS, Director. Mr. Yunus is a Managing Director of Grameen
Bank in Bangladesh. Address: Grameen Bank, Mirpur Two, Dhaka 1216, Bangladesh.
DOB: 6/28/40.
RENO J. MARTINI, Senior Vice President. Mr. Martini is Senior Vice
President of Calvert Group, Ltd. and Senior Vice President and Chief
Investment Officer of Calvert Asset Management Company, Inc. DOB: 01/13/50.
WILLIAM M. TARTIKOFF, Esq., Vice President and Secretary. Mr.
Tartikoff is an officer of each of the investment companies in the Calvert
Group of Funds, and is Senior Vice President, Secretary, and General Counsel
of Calvert Group, Ltd., and each of its subsidiaries. Mr. Tartikoff is Vice
President and Secretary of Calvert-Sloan Advisers, L.L.C., and is an officer
of Acacia National Life Insurance Company. DOB: 08/12/47.
DANIEL K. HAYES, Vice President. Mr. Hayes is Vice President of
Calvert Asset Management Company, Inc. and is an officer of each of the other
investment companies in the Calvert Group of Funds. DOB: 09/09/50.
RONALD M. WOLFSHEIMER, CPA, Treasurer. Mr. Wolfsheimer is Senior Vice
President and Controller of Calvert Group, Ltd. and an officer of each of its
subsidiaries and Calvert-Sloan Advisers, L.L.C. He is also an officer of each
of the other investment companies in the Calvert Group of Funds. DOB: 07/24/52.
SUSAN WALKER BENDER, Esq., Assistant Secretary. Ms. Bender is
Associate General Counsel of Calvert Group and an officer of each of its
subsidiaries and Calvert-Sloan Advisers, L.L.C. She is also an officer of each
of the other investment companies in the Calvert Group of Funds. DOB: 01/29/59.
KATHERINE STONER, Esq., Assistant Secretary. Ms. Stoner is Associate
General Counsel of Calvert Group and an officer of each of its subsidiaries
and Calvert-Sloan Advisers, L.L.C. She is also an officer of each of the other
investment companies in the Calvert Group of Funds. DOB: 10/21/56.
LISA CROSSLEY NEWTON, Esq., Associate General Counsel Secretary and
Compliance Officer. Ms. Newton is Associate General Counsel of Calvert Group
and an officer of each of its subsidiaries and Calvert-Sloan Advisers, L.L.C.
She is also an officer of each of the other investment companies in the
Calvert Group of Funds. DOB: 12/31/61.
IVY WAFFORD DUKE, Esq., Assistant Secretary. Ms. Duke is Assistant
Counsel of Calvert Group and an officer of each of its subsidiaries and
Calvert-Sloan Advisers, L.L.C. She is also an officer of each of the other
investment companies in the Calvert Group of Funds. Prior to working at
Calvert, Ms. Duke was an Associate in the Investment Management Group of the
Business and Finance Department at Drinker Biddle & Reath. DOB: 09/07/68.
The address of Trustees and Officers, unless otherwise noted, is 4550
Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814. Trustees and
Officers as a group own less than 1% of the Portfolio's outstanding shares.
Trustees marked with an *, above, are :interested persons" of the Fund, under
the Investment Company Act of 1940.
The address of directors and officers, unless otherwise noted, is
4550 Montgomery Avenue, Bethesda, Maryland 20814. Directors and officers as a
group own less than one percent of the total outstanding shares of the Fund.
During fiscal 1997, Directors of the Fund not affiliated with the
Fund's Advisor were paid aggregate fees and expenses of $3,072.
Directors of the Fund not affiliated with the Fund's Advisor may
elect to defer receipt of all or a percentage of their fees and invest them in
any fund in the Calvert Family of Funds through the Trustees Deferred
Compensation Plan Deferral of the fees is designed to maintain the parties in
the same position as if the fees were paid on a current basis. Management
believes this will have a negligible effect on the Fund's assets, liabilities,
net assets, and net income per share.
Director Compensation Table
Fiscal Year 1997 Aggregate Pension or Total
Compensation Retirement Compensation
(unaudited numbers) from Registrant Benefits from Registrant
for Service Accrued as and Fund Complex
as Trustee part of paid to Director**
Registrant
Expenses*
Name of Director
John G. Guffey, Jr. $8,270 $0 $61,615
Terrence J. Mollner $10,565 $0 $44,131
Rustum Roy $9,500 $0 $10,300
D. Wayne Silby $7,213 $0 $62,830
Tessa Tennant $7,750 $7,750 $9,000
Muhammad Yunus $9,750 $9,750 $10,000
* Ms. Tennant has chosen to defer a portion of her compensation. Her total
deferred compensation, including dividends and capital appreciation, was
$6,173.48 as of September 30, 1997. Mr. Yunus has also chosen to defer a
portion of his compensation. His total deferred compensation, including
dividends and capital appreciation, was $21,004.63 as of September 30, 1997.
** As of December 31, 1997. The Fund Complex consists of nine (9) registered
investment companies.
INVESTMENT ADVISOR AND SUB-ADVISORS
The Fund's Investment Advisor is Calvert Asset Management Company,
Inc., 4550 Montgomery Avenue, 1000N, Bethesda, Maryland 20814, a subsidiary of
Calvert Group Ltd., which is a subsidiary of Acacia Mutual Life Insurance
Company of Washington, D.C. ("Acacia Mutual").
The Advisory Contract between the Fund and the Advisor was entered
into on May 21, 1992, and will remain in effect indefinitely, provided
continuance is approved at least annually by the vote of the holders of a
majority of the outstanding shares of the Fund or by the Board of Directors of
the Fund; and further provided that such continuance is also approved annually
by the vote of a majority of the trustees of the Fund who are not parties to
the Contract or interested persons of parties to the Contract or interested
persons of such parties, cast in person at a meeting called for the purpose of
voting on such approval. The Contract may be terminated without penalty by
either party upon 60 days' prior written notice; it automatically terminates
in the event of its assignment.
Under the Contract, the Advisor provides investment advice to the
Fund and oversees its day-to-day operations, subject to direction and control
by the Fund's Board of Directors. For its services, the Advisor receives an
annual base fee, payable monthly, of 0.80% of the Fund's average daily net
assets. For the 1995 fiscal period, the Advisor received a fee of $50,418,
reimbursed $12,183, and voluntarily waived or assumed $3,256 of expenses. For
the 1996 fiscal period, the Advisor received a fee of $243,241 and there were
no expenses reimbursed or fees voluntarily waived. For the 1997 fiscal period,
the Advisor received a fee of $383,438. There were no expenses reimbursed or
fees voluntarily waived.
The Advisor provides the Fund with investment supervision and
management, administrative services, office space, furnishes executive and
other personnel to the Fund, and may pay Fund advertising and promotional
expenses. The Advisor reserves the right to compensate broker-dealers in
consideration of their promotional or administrative services. The Fund pays
all other administrative and operating expenses, including: custodial,
registrar, dividend disbursing and transfer agency fees; federal and state
securities registration fees; salaries, fees and expenses of directors,
executive officers and employees of the Fund, who are not "affiliated persons"
of the Advisor or the Subadvisors within the meaning of the Investment Company
Act of 1940; insurance premiums; trade association dues; legal and audit fees;
interest, taxes and other business fees; expenses of printing and mailing
reports, notices, prospectuses, and proxy material to shareholders; annual
shareholders' meeting expenses; and brokerage commissions and other costs
associated with the purchase and sale of portfolio securities.
Administrative Services
Calvert Administrative Services Company ("CASC", an affiliate of the
Advisor, has been retained by the Fund to provide certain administrative
services necessary to the conduct of its affairs, including the preparation of
regulatory filings and shareholder reports, the daily determination of its net
asset value per share and dividends, and the maintenance of its portfolio and
general accounting records. For providing such services, CASC receives an
annual fee from the Fund of 0.10% of the Fund's average daily net assets. For
the 1995, 1996 and 1997 fiscal periods, CASC received $6,251, $30,405 and
$48,182 in administrative fees, respectively.
TRANSFER AND SHAREHOLDER SERVICING AGENT
National Financial Data Services, Inc. ("NFDS"), a subsidiary of
State Street Bank & Trust, has been retained by the Fund to act as transfer
agent and dividend disbursing agent. These responsibilities include:
responding to certain shareholder inquiries and instructions, crediting and
debiting shareholder accounts for purchases and redemptions of Fund shares and
confirming such transactions, and daily updating of shareholder accounts to
reflect declaration and payment of dividends.
Calvert Shareholder Services, Inc., a subsidiary of Calvert Group,
Ltd., and Acacia Mutual, has been retained by the Fund to act as shareholder
servicing agent. Shareholder servicing responsibilities include responding to
shareholder inquiries and instructions concerning their accounts, entering any
telephoned purchases or redemptions into the NFDS system, maintenance of
broker-dealer data, and preparing and distributing statements to shareholders
regarding their accounts. Calvert Shareholder Services, Inc. was the sole
transfer agent prior to January 1, 1998.
For these services, NFDS and Calvert Shareholder Services, Inc.
receive a fee based on the number of shareholder accounts and transactions.
METHOD OF DISTRIBUTION
The Fund has entered into an agreement with Calvert Distributors,
Inc. ("CDI") whereby CDI, acting as principal underwriter for the Fund, makes
a continuous offering of the Fund's securities on a "best efforts" basis.
Under the terms of the agreement, CDI is entitled to receive a distribution
fee pursuant to the Distribution Plan (see below). For fiscal period 1997, CDI
received distribution fees of $156,781 under the Class A Distribution Plan. Of
the Class A distribution expenses paid in fiscal 1997, almost entirely all of
the expenses were used to compensate dealers for their share distribution
promotional services. CDI also receives the portion of the sales charge in
excess of the dealer reallowance. CDI received net sales charges of $23,647,
$151,785, and $93,429 for fiscal periods ending 1995, 1996 and 1997,
respectively. For Class B and Class C Shares, CDI receives any CDSC paid.
Pursuant to Rule 12b-1 under the Investment Company Act of 1940, the
Fund has adopted Distribution Plans (the "Plans") which permits the Fund to
pay certain expenses associated with the distribution of its shares. Such
expenses may not exceed, on an annual basis, 0.35% of the Fund's Class A
average daily net assets. Expenses under the Fund's Class B and Class C Plan
may not exceed, on an annual basis, 1.00% of the average daily net assets of
Class B and Class C, respectively. For the period from inception (October 31,
1994) to September 30, 1995, Class C Distribution Plan expenses totaled
$4,448. That amount was used entirely to compensate dealers distributing
shares, and to compensate the underwriter. For the fiscal year 1996, Class C
Distribution Plan expenses totaled $27,695. That amount was used entirely to
compensate dealers distributing shares, and to compensate the underwriter. No
Class B Distribution Plan expenses were paid in fiscal year 1997, since there
were no Class B Shares outstanding. For the fiscal year 1997, Class C
Distribution Plan expenses totaled $33,870. Of the Class C distribution
expenses paid in fiscal 1997, almost entirely all of the expenses were used to
compensate dealers for their share distribution promotional services.
The Fund's Distribution Plans were approved by the Board of
Directors, including the Directors who are not "interested persons" of the
Fund (as that term is defined in the Investment Company Act of 1940) and who
have no direct or indirect financial interest in the operation of the Plans or
in any agreements related to the Plans. The selection and nomination of the
Directors who are not interested persons of the Fund is committed to the
discretion of such disinterested Directors. In establishing the Plans, the
Directors considered various factors including the amount of the distribution
expenses. The Directors determined that there is a reasonable likelihood that
the Plans will benefit the Fund and its shareholders.
The Plans may be terminated by vote of a majority of the
non-interested Directors who have no direct or indirect financial interest in
the Plans, or by vote of a majority of the outstanding shares of the Fund. Any
change in the Plans that would materially increase the distribution cost to
the Fund requires approval of the shareholders of the affected class;
otherwise, the Plans may be amended by the Directors, including a majority of
the non-interested Directors as described above. The Plans will continue in
effect for successive one-year terms provided that such continuance is
specifically approved by (i) the vote of a majority of the Directors who are
not parties to the Plans or interested persons of any such party and who have
no direct or indirect financial interest in the Plans, and (ii) the vote of a
majority of the entire Board of Directors.
Apart from the Plans, the Advisor and CDI, at their own expense, may
incur costs and pay expenses associated with the distribution of shares of the
Fund.
Certain broker-dealers, and/or other persons may receive compensation
from the investment advisor, underwriter, or their affiliates for the sale and
distribution of the securities or for services to the Fund. Such compensation
may include additional compensation based on assets held through that firm
beyond the regularly scheduled rates, and finder's fee payments to firms whose
representatives are responsible for soliciting a new account where the
accountholder does not choose to purchase through that firm.
PORTFOLIO TRANSACTIONS
Portfolio transactions are undertaken on the basis of their
desirability from an investment standpoint. Investment decisions and choice of
brokers and dealers are made by the Fund's Advisor under the direction and
supervision of the Fund's Board of Directors.
The Fund's policy is to limit portfolio turnover to transactions
necessary to carry out its investment policies and to obtain cash for
redemption of its shares. Depending upon market conditions, the Fund's
turnover expressed as a percentage may in some years exceed 100%, but is not
expected to exceed 200%. For the 1995, 1996 and 1997 fiscal periods, the
portfolio turnover rates of the Fund were 95%, 114% and 117%, respectively. In
all transactions, the Fund seeks to obtain the best price and most favorable
execution and selects broker-dealers on the basis of their professional
capability and the value and quality of their services. Broker-dealers may be
selected who provide the Fund with statistical, research, or other information
and services. Such broker-dealers may receive compensation for executing
portfolio transactions that is in excess of the compensation another
broker-dealer would have received for executing such transactions, if the
Advisor determines in good faith that such compensation is reasonable in
relation to the value of the information and services provided. Although any
statistical, research, or other information or services provided by
broker-dealers may be useful to the Advisor, its dollar value is generally
indeterminable and its availability or receipt does not materially reduce the
Advisor's normal research activities or expenses. During fiscal 1995, no
commissions were paid to any officer or director of the Fund, or to any of
their affiliates. During fiscal year 1996, $177,000 in aggregate brokerage
commissions were paid to broker-dealers. During fiscal year 1997, $69,826 in
aggregate brokerage commissions were paid to broker-dealers.
The Advisor may also execute Fund transactions with or through
broker-dealers who have sold shares of the Fund. However, such sales will not
be a qualifying or disqualifying factor in a broker-dealer's selection nor
will the selection of any broker-dealer be based on the volume of Fund shares
sold.
INDEPENDENT ACCOUNTANTS AND CUSTODIANS
Coopers and Lybrand, L.L.P., has been selected by the Board of
Directors to serve as independent accountants of the Fund for fiscal year
1998. State Street Bank & Trust Company, N.A., 225 Franklin Street, Boston, MA
02110 acts as custodian of the Fund's investments. First National Bank of
Maryland, 25 South Charles Street, Baltimore, Maryland 21203 also serves as
custodian of certain of the Fund's cash assets. Neither custodian has a part
in deciding the Fund's investment policies or the choice of securities that
are to be purchased or sold for the Fund.
GENERAL INFORMATION
The Fund was organized as a Maryland Corporation on February 14,
1992. The other series of the Fund is the Calvert International Equity Fund.
Each share represents an equal proportionate interest with each other
share and is entitled to such dividends and distributions out of the income
belonging to such class as declared by the Board. The Fund offers three
separate classes of shares: Class A, Class B and Class C. Each class
represents interests in the same portfolio of investments but, as further
described in the prospectus, each class is subject to differing sales charges
and expenses, which differences will result in differing net asset values and
distributions. Upon any liquidation of the Fund, shareholders of each class
are entitled to share pro rata in the net assets belonging to that series
available for distribution.
The Fund will send its shareholders confirmations of purchase and
redemption transactions, as well as periodic transaction statements and
unaudited semi-annual and audited annual financial statements of the Fund's
investment securities, assets and liabilities, income and expenses, and
changes in net assets.
The Prospectus and this Statement of Additional Information do not
contain all the information in the Fund's registration statement. The
registration statement is on file with the Securities and Exchange Commission
and is available to the public.
FINANCIAL STATEMENTS
The Fund's audited financial statements included in its Annual Report
to Shareholders dated September 30, 1998, are expressly incorporated by
reference and made a part of this Statement of Additional Information. A copy
of the Annual Report may be obtained free of charge by writing or calling The
Calvert Fund.
APPENDIX
Corporate Bond Ratings:
Description of Moody's Investors Service Inc.'s/Standard & Poor's bond ratings:
Aaa/AAA: Best quality. These bonds carry the smallest degree of
investment risk and are generally referred to as "gilt edge." Interest
payments are protected by a large or by an exceptionally stable margin and
principal is secure. This rating indicates an extremely strong capacity to pay
principal and interest.
Aa/AA: Bonds rated AA also qualify as high-quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority of
instances they differ from AAA issues only in small degree. They are rated
lower than the best bonds because margins of protection may not be as large as
in Aaa securities, fluctuation of protective elements may be of greater
amplitude, or there may be other elements present which make long-term risks
appear somewhat larger than in Aaa securities.
A/A: Upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which make the bond somewhat more susceptible to the adverse effects of
circumstances and economic conditions.
Baa/BBB: Medium grade obligations; adequate capacity to pay principal
and interest. Whereas they normally exhibit adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead
to a weakened capacity to pay principal and interest for bonds in this
category than for bonds in higher rated categories.
Ba/BB, B/B, Caa/CCC, Ca/CC: Debt rated in these categories is
regarded as predominantly speculative with respect to capacity to pay interest
and repay principal. The higher the degree of speculation, the lower the
rating. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposure to adverse conditions.
C/C: This rating is only for income bonds on which no interest is
being paid.
D: Debt in default; payment of interest and/or principal is in
arrears.
Commercial Paper Ratings:
MOODY'S INVESTORS SERVICE, INC.:
The Prime rating is the highest commercial paper rating assigned by
Moody's. Among the factors considered by Moody's in assigning ratings are the
following: (1) evaluation of the management of the issuer; (2) economic
evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks which may be inherent in certain areas; (3) evaluation
of the issuer's products in relation to competition and customer acceptance;
(4) liquidity; (5) amount and quality of long-term debt; (6) trend of earnings
over a period of ten years; (7) financial strength of a parent company and the
relationships which exist with the issuer; and (8) recognition by management
of obligations which may be present or may arise as a result of public
interest questions and preparations to meet such obligations. Issuers within
this Prime category may be given ratings 1, 2, or 3, depending on the relative
strengths of these factors.
STANDARD & POOR'S CORPORATION:
Commercial paper rated A by Standard & Poor's has the following
characteristics: (i) liquidity ratios are adequate to meet cash requirements;
(ii) long-term senior debt rating should be A or better, although in some
cases BBB credits may be allowed if other factors outweigh the BBB; (iii) the
issuer should have access to at least two additional channels of borrowing;
(iv) basic earnings and cash flow should have an upward trend with allowances
made for unusual circumstances; and (v) typically the issuer's industry should
be well established and the issuer should have a strong position within its
industry and the reliability and quality of management should be unquestioned.
Issuers rated A are further referred to by use of numbers 1, 2 and 3 to denote
the relative strength within this highest classification.
<PAGE>
LETTER OF INTENT
Date
Calvert Distributors, Inc.
4550 Montgomery Avenue
Bethesda, MD 20814
Ladies and Gentlemen:
By signing this Letter of Intent, or affirmatively marking the Letter
of Intent option on my Fund Account Application Form, I agree to be bound by
the terms and conditions applicable to Letters of Intent appearing in the
Prospectus and the Statement of Additional Information for the Fund and the
provisions described below as they may be amended from time to time by the
Fund. Such amendments will apply automatically to existing Letters of Intent.
I intend to invest in the shares of__________________(Fund or
Portfolio name) during the thirteen (13) month period from the date of my
first purchase pursuant to this Letter (which cannot be more than ninety (90)
days prior to the date of this Letter or my Fund Account Application Form,
whichever is applicable), an aggregate amount (excluding any reinvestments of
distributions) of at least fifty thousand dollars ($50,000) which, together
with my current holdings of the Fund (at public offering price on date of this
Letter or my Fund Account Application Form, whichever is applicable), will
equal or exceed the amount checked below:
__ $50,000 __ $100,000 __ $250,000 __ $500,000 __ $1,000,000
Subject to the conditions specified below, including the terms of
escrow, to which I hereby agree, each purchase occurring after the date of
this Letter will be made at the public offering price applicable to a single
transaction of the dollar amount specified above, as described in the Fund's
prospectus. "Fund" in this Letter of Intent shall refer to the Fund or
Portfolio, as the case may be. No portion of the sales charge imposed on
purchases made prior to the date of this Letter will be refunded.
I am making no commitment to purchase shares, but if my purchases
within thirteen months from the date of my first purchase do not aggregate the
minimum amount specified above, I will pay the increased amount of sales
charges prescribed in the terms of escrow described below. I understand that
4.75% of the minimum dollar amount specified above will be held in escrow in
the form of shares (computed to the nearest full share). These shares will be
held subject to the terms of escrow described below.
From the initial purchase (or subsequent purchases if necessary),
4.75% of the dollar amount specified in this Letter shall be held in escrow in
shares of the Fund by the Fund's transfer agent. For example, if the minimum
amount specified under the Letter is $50,000, the escrow shall be shares
valued in the amount of $2,375 (computed at the public offering price adjusted
for a $50,000 purchase). All dividends and any capital gains distribution on
the escrowed shares will be credited to my account.
If the total minimum investment specified under the Letter is
completed within a thirteen month period, escrowed shares will be promptly
released to me. However, shares disposed of prior to completion of the
purchase requirement under the Letter will be deducted from the amount
required to complete the investment commitment.
Upon expiration of this Letter, the total purchases pursuant to the
Letter are less than the amount specified in the Letter as the intended
aggregate purchases, Calvert Distributors, Inc. ("CDI") will bill me for an
amount equal to the difference between the lower load I paid and the dollar
amount of sales charges which I would have paid if the total amount purchased
had been made at a single time. If not paid by the investor within 20 days,
CDI will debit the difference from my account. Full shares, if any, remaining
in escrow after the aforementioned adjustment will be released and, upon
request, remitted to me.
I irrevocably constitute and appoint CDI as my attorney-in-fact, with
full power of substitution, to surrender for redemption any or all escrowed
shares on the books of the Fund. This power of attorney is coupled with an
interest.
The commission allowed by Calvert Distributors, Inc. to the
broker-dealer named herein shall be at the rate applicable to the minimum
amount of my specified intended purchases.
The Letter may be revised upward by me at any time during the
thirteen-month period, and such a revision will be treated as a new Letter,
except that the thirteen-month period during which the purchase must be made
will remain unchanged and there will be no retroactive reduction of the sales
charges paid on prior purchases.
In determining the total amount of purchases made hereunder, shares
disposed of prior to termination of this Letter will be deducted. My
broker-dealer shall refer to this Letter of Intent in placing any future
purchase orders for me while this Letter is in effect.
Dealer
By
Authorized Signer
Name of Investor(s)
Address
Signature of Investor(s)
Date
<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial statements
Financial statements incorporated by reference to:
All financial statements for Calvert World Values Fund, Capital
Accumulation Fund are incorporated by reference to Registrant's
Annual Report to Shareholders dated September 30, 1997, and filed
May 1, 1998.
Schedules II-VII, inclusive, for which provision is made in the
applicable accounting regulation of the Securities and Exchange
Commission, are omitted because they are not required under the
related instructions, or they are inapplicable, or the required
information is presented in the financial statements or notes
thereto.
(b) Exhibits:
1. Articles of Incorporation (incorporated by reference to
Registrant's Initial Registration Statement, February 18, 1992).
2. By-Laws, (incorporated by reference to Registrant's Pre-Effective
Amendment No. 1, May 21, 1992).
4. Specimen Stock Certificate, (Draft incorporated by reference to
Registrant's Pre-Effective Amendment No. 2, May 27, 1992).
5.a. Investment Advisory Contract, (incorporated by reference to
Registrant's Pre-Effective Amendment No. 1, May 21, 1992).
5.b. Sub-advisory Contract, (incorporated by reference to Registrant's
Pre-Effective Amendment No. 1, May 21, 1992).
6. Underwriting Agreement, (incorporated by reference to Registrant's
Post-Effective Amendment No. 9, March 31, 1998).
7. Directors' Deferred Compensation Agreement, (incorporated by
reference to Registrant's Post-Effective Amendment No. 4, January 31,
1995).
8. Custodial Contract, (incorporated by reference to Registrant's
Post-
Effective Amendment No. 8, January 28, 1998).
9.A. Transfer Agency Contract, (incorporated by reference to
Registrant's Post-Effective Amendment No. 9, March 31, 1998).
9.B. Administrative Services Agreement, (incorporated by reference to
Registrant's Pre-Effective Amendment No. 1, May 21, 1992).
10. Opinion and Consent of Counsel as to Legality of Shares Being
Registered.
11. Consent of Independent Accountants to Use of Report.
14. Model Retirement Plans, (incorporated by reference to Registrant's
Pre-Effective Amendment No. 2, May 27, 1992).
15. Plan of Distribution, (for Class A shares, incorporated by
reference
to Registrant's Pre-Effective Amendment No. 1, May 21, 1992).
For Class B and C shares, (incorporated by reference to Registrant's
Post-Effective Amendment No. 9, March 31, 1998).
16. Schedule for Computation of Performance Quotation, (incorporated
by reference to Registrant's Post-Effective Amendment No. 4, January
31, 1995).
17. Multiple-class Plan pursuant to Investment Company Act of 1940
Rule 18f-3, (incorporated by reference to Registrant's Post-Effective
Amendment No. 9, March 31, 1998).
Exhibits 3, 12, and 13 are omitted because they are inapplicable.
Item 25. Persons Controlled By or Under Common Control With Registrant
Not Applicable.
Item 26. Number of Holders of Securities
As of February 28, 1998, there were 19,478 holders of record of
Registrant's Class A shares of common stock for the Calvert World
Values International Equity Fund series.
As of February 28, 1998, there were 1,116 holders of record of
Registrant's Class C shares of common stock for the Calvert World
Values International Equity Fund series.
As of February 28, 1998, there were 7,076 holders of record of
Registrant's Class A shares of common stock for the Calvert World
Values Capital Accumulation Fund series.
As of February 28, 1998, there were 733 holders of record of
Registrant's Class C shares of common stock for the Calvert World
Values Capital Accumulation Fund series.
Item 27. Indemnification
Registrant's By-Laws provide, in summary, that officers, directors, employees,
and agents shall be indemnified by Registrant against liabilities and expenses
incurred by such persons in connection with actions, suits, or proceedings
arising out of their offices or duties of employment, except that no
indemnification can be made to such a person if he has been adjudged liable of
willful misfeasance, bad faith, gross negligence, or reckless disregard of his
duties. In the absence of such an adjudication, the determination of
eligibility for indemnification shall be made by independent counsel in a
written opinion or by the vote of a majority of a quorum of directors who are
neither "interested persons" of Registrant, as that term is defined in Section
2(a)(19) of the Investment Company Act of 1940, nor parties to the proceeding.
Registrant may purchase and maintain liability insurance on behalf of any
officer, director, employee or agent against any liabilities arising from such
status. In this regard, Registrant maintains a Directors & Officers (Partners)
Liability Insurance Policy with Chubb Group of Insurance Companies, 15
Mountain View Road, Warren, New Jersey 07061, providing Registrant with $5
million in directors and officers errors and omissions liability coverage,
plus $3 million in excess directors and officers liability coverage for the
independent directors only. Registrant also maintains an $8 million Investment
Company Blanket Bond (fidelity coverage) issued by ICI Mutual Insurance
Company, P.O. Box 730, Burlington, Vermont 05402.
Item 28. Business and Other Connections of Investment Adviser
Name of Company, Principal
Name Business and Address Capacity
Barbara J. Krumsiek Acacia Capital Corporation Officer
Calvert Municipal Fund, Inc. and
Calvert World Values Fund, Inc. Director
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
First Variable Rate Fund for Officer
Government Income and
Calvert Tax-Free Reserves Trustee
Calvert Social Investment Fund
Calvert Cash Reserves
The Calvert Fund
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
----------------
Calvert Group, Ltd. Officer
Holding Company and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
----------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Officer
Service Company and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Calvert Distributors, Inc. Officer
Broker-Dealer and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Calvert-Sloan Advisers, LLC Director
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert New World Fund, Inc. Director
Investment Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
--------------
Alliance Capital Mgmt. L.P. Sr. Vice President
Mutual Fund Division Director
1345 Avenue of the Americas
New York, NY 10105
--------------
Ronald M. Wolfsheimer First Variable Rate Fund Officer
for Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Acacia Capital Corporation
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
--------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Officer
Service Company and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Calvert Distributors, Inc. Director
Broker-Dealer and
4550 Montgomery Avenue Officer
Bethesda, Maryland 20814
---------------
Calvert-Sloan Advisers, LLC Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
David R. Rochat First Variable Rate Fund Officer
for Government Income and
Calvert Tax-Free Reserves Trustee
Calvert Cash Reserves
The Calvert Fund
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Municipal Fund, Inc. Officer
Investment Company and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Chelsea Securities, Inc. Officer
Securities Firm and
Post Office Box 93 Director
Chelsea, Vermont 05038
---------------
Grady, Berwald & Co. Officer
Holding Company and
43A South Finley Avenue Director
Basking Ridge, NJ 07920
---------------
Reno J. Martini Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
First Variable Rate Fund Officer
for Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Acacia Capital Corporation
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert New World Fund, Inc. Director
Investment Company and
4550 Montgomery Avenue Officer
Bethesda, Maryland 20814
---------------
Calvert-Sloan Advisers, LLC Director
Investment Advisor and
4550 Montgomery Avenue Officer
Bethesda, Maryland 20814
---------------
Charles T. Nason Acacia Mutual Life Insurance Officer
Acacia National Life Insurance and Director
Insurance Companies
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Acacia Financial Corporation Officer
Holding Company and
7315 Wisconsin Avenue Director
Bethesda, Maryland 20814
---------------
Gardner Montgomery Company Director
Tax Return Preparation Services
7315 Wisconsin Avenue
Bethesda, Maryland 20814
----------------
Acacia Federal Savings Bank Director
Savings Bank
7600-B Leesburg Pike
Falls Church, Virginia 22043
---------------
Enterprise Resources, Inc. Director
Business Support Services
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Acacia Insurance Management Officer
Services Corporation and
Service Corporation Director
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Calvert Group, Ltd. Director
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Director
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co., Inc. Director
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Shareholder Services, Inc. Director
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Social Investment Fund Trustee
Investment Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
-----------------
The Advisors Group, Inc. Director
Broker-Dealer and
Investment Advisor
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Robert-John H. Acacia National Life Insurance Officer
Sands Insurance Company and
7315 Wisconsin Avenue Director
Bethesda, Maryland 20814
----------------
Acacia Mutual Life Insurance Officer
Insurance Company
7315 Wisconsin Avenue
Bethesda, Maryland 20814
----------------
Acacia Financial Corporation Officer
Holding Company and
7315 Wisconsin Avenue Director
Bethesda, Maryland 20814
----------------
Acacia Federal Savings Bank Officer
Savings Bank
7600-B Leesburg Pike
Falls Church, Virginia 22043
---------------
Enterprise Resources, Inc. Director
Business Support Services
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Acacia Realty Corporation Officer
Real Estate Investments
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Acacia Insurance Management Officer
Services Corporation and
Service Corporation Director
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Gardner Montgomery Company Officer
Tax Return and
Preparation Services Director
7315 Wisconsin Avenue
Bethesda, Maryland 20814
----------------
The Advisors Group, Inc. Director
Broker-Dealer and
Investment Advisor
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Calvert Group, Ltd. Director
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Director
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management, Co., Inc. Director
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Shareholder Services, Inc. Director
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
William M. Tartikoff Acacia National Life Insurance Officer
Insurance Company
7315 Wisconsin Avenue
Bethesda, Maryland 20814
----------------
First Variable Rate Fund for Officer
Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Acacia Capital Corporation
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Officer
Services Company
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co. Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Distributors, Inc. Director
Broker-Dealer and
4550 Montgomery Avenue Officer
Bethesda, Maryland 20814
----------------
Calvert-Sloan Advisers, LLC Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Susan Walker Bender Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Officer
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Distributors, Inc. Officer
Broker-Dealer
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert-Sloan Advisers, LLC Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
First Variable Rate Fund for Officer
Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Acacia Capital Corporation
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Katherine Stoner Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Officer
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Distributors, Inc. Officer
Broker-Dealer
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert-Sloan Advisers, LLC Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
First Variable Rate Fund for Officer
Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Acacia Capital Corporation
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Lisa Crossley Newton Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Officer
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Distributors, Inc. Officer
Broker-Dealer
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert-Sloan Advisers, LLC Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
First Variable Rate Fund for Officer
Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Acacia Capital Corporation
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Ivy Wafford Duke Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Officer
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Distributors, Inc. Officer
Broker-Dealer
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert-Sloan Advisers, LLC Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
First Variable Rate Fund for Officer
Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Acacia Capital Corporation
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Daniel K. Hayes Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
First Variable Rate Fund for Officer
Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Acacia Capital Corporation
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
Steve Van Order Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
Annette Krakovitz Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
John Nichols Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
David Leach Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
Matthew D. Gelfand Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
Strategic Investment Management Officer
Investment Advisor
1001 19th Street North
Arlington, Virginia 20009
------------------
Item 29. Principal Underwriters
(a) Registrant's principal underwriter also underwrites
shares of First Variable Rate Fund for Government Income, Calvert
Tax-Free Reserves, Calvert Social Investment Fund, Calvert Cash Reserves,
The Calvert Fund, Calvert Municipal Fund, Inc., Calvert New World
Fund, Inc., and Acacia Capital Corporation.
(b) Positions of Underwriter's Officers and Directors
Name and Principal Position(s) with Position(s) with
Business Address Underwriter Registrant
Barbara J. Krumsiek Director and President President and
Director
Ronald M. Wolfsheimer Director, Senior Vice Treasurer
President and Chief Financial Officer
William M. Tartikoff Director, Senior Vice Vice President and
President and Secretary Secretary
Craig Cloyed Senior Vice President None
Karen Becker Vice President, Operations None
Steve Cohen Vice President None
Geoffrey Ashton Regional Vice President None
Martin Brown Regional Vice President None
Janet Haley Regional Vice President None
Ben Ogbogu Regional Vice President None
Susan Walker Bender Assistant Secretary Assistant Secretary
Katherine Stoner Assistant Secretary Assistant Secretary
Lisa Crossley Newton Assistant Secretary Assistant Secretary
and Compliance Officer
Ivy Wafford Duke Assistant Secretary Assistant Secretary
(c) Inapplicable.
Item 30. Location of Accounts and Records
Ronald M. Wolfsheimer, Treasurer
and
William M. Tartikoff, Assistant Secretary
4550 Montgomery Avenue, Suite 1000N
Bethesda, Maryland 20814
Item 31. Management Services
Not Applicable
Item 32. Undertakings
a) Not Applicable
b) Not Applicable
(c) The Registrant undertakes to furnish to each person to
whom a Prospectus is delivered, a copy of the
Registrant's latest Annual Report to Shareholders, upon
request and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant certifies that it
meets all of the requirements for effectiveness of this registration
statement pursuant to Rule 485(b) under the Securities Act of 1933 and
has duly caused this registration statement to be signed on its behalf
by the undersigned, thereto duly authorized in the City of Bethesda, and
State of Maryland, on the 1st day of May, 1998.
CALVERT WORLD VALUES FUND, INC.
By:
_______________**_________________
Barbara J. Krumsiek
President and Director
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following
persons in the capacities indicated.
Signature Title Date
__________**____________ President and Director 5/1/98
Barbara J. Krumsiek (Principal Executive Officer)
__________**____________ Principal Accounting 5/1/98
Ronald M. Wolfsheimer Officer
__________**____________ Director 5/1/98
John G. Guffey, Jr.
__________**____________ Director 5/1/98
Terrence Mollner
__________**____________ Director 5/1/98
Rustum Roy
__________**____________ Director 5/1/98
D. Wayne Silby
__________**____________ Director 5/1/98
Tessa Tennant
__________**____________ Director 5/1/98
Mohammed Yunus
**By: Katherine Stoner as Attorney-in-fact.
Exhibit 10
May 1, 1998
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Exhibit 10, Form N-1A
Calvert World Values Fund, Inc.
File numbers: 33-45829 and 811-06563
Ladies and Gentlemen:
As counsel to Calvert Group, Ltd., it is my opinion that the
securities being registered by this Post-Effective Amendment No. 10 will
be legally issued, fully paid and non-assessable when sold. My opinion
is based on an examination of documents related to Calvert World Values
Fund, Inc. (the "Fund"), including its Articles of Incorporation, other
original or photostatic copies of Fund records, certificates of public
officials, documents, papers, statutes, or authorities as I deemed
necessary to form the basis of this opinion.
I therefore consent to filing this opinion of counsel with the
Securities and Exchange Commission as an Exhibit to the Fund's
Post-Effective Amendment No. 10 to its Registration Statement.
Sincerely,
/s/ Katherine Stoner
Katherine Stoner
Associate General Counsel
POWER OF ATTORNEY
I, the undersigned Trustee/Director of Calvert World Values Fund (the
"Fund"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff, Susan
Walker Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford Duke my true
and lawful attorneys, with full power to each of them, to sign for me and in
my name in the appropriate capacities, all registration statements and
amendments filed by the Fund with any federal or state agency, and to do all
such things in my name and behalf necessary for registering and maintaining
registration or exemptions from registration of the Fund with any government
agency in any jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things in my
name and behalf to comply with the provisions of all federal, state and
foreign laws, regulations, and policy pronouncements affecting the Fund,
including, but not limited to, the Securities Act of 1933, the Securities
Exchange Act of 1934, the Investment Company Act of 1940, the Investment
Advisers Act of 1940, and all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Fund in connection
with any transaction approved by the Board of Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Fund, the
signing is automatically ratified and confirmed by me by virtue of this Power
of Attorney.
WITNESS my hand on the date set forth below.
May 5, 1997
Date /Signature/
Terrence Mollner Barbara Krumsiek
Witness Name of Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of Calvert World Values Fund (the
"Fund"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff, Susan
Walker Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford Duke my true
and lawful attorneys, with full power to each of them, to sign for me and in
my name in the appropriate capacities, all registration statements and
amendments filed by the Fund with any federal or state agency, and to do all
such things in my name and behalf necessary for registering and maintaining
registration or exemptions from registration of the Fund with any government
agency in any jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things in my
name and behalf to comply with the provisions of all federal, state and
foreign laws, regulations, and policy pronouncements affecting the Fund,
including, but not limited to, the Securities Act of 1933, the Securities
Exchange Act of 1934, the Investment Company Act of 1940, the Investment
Advisers Act of 1940, and all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Fund in connection
with any transaction approved by the Board of Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Fund, the
signing is automatically ratified and confirmed by me by virtue of this Power
of Attorney.
WITNESS my hand on the date set forth below.
May 5, 1997
Date /Signature/
Terrence Mollner John G. Guffey, Jr.
Witness Name of Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of Calvert World Values Fund (the
"Fund"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff, Susan
Walker Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford Duke my true
and lawful attorneys, with full power to each of them, to sign for me and in
my name in the appropriate capacities, all registration statements and
amendments filed by the Fund with any federal or state agency, and to do all
such things in my name and behalf necessary for registering and maintaining
registration or exemptions from registration of the Fund with any government
agency in any jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things in my
name and behalf to comply with the provisions of all federal, state and
foreign laws, regulations, and policy pronouncements affecting the Fund,
including, but not limited to, the Securities Act of 1933, the Securities
Exchange Act of 1934, the Investment Company Act of 1940, the Investment
Advisers Act of 1940, and all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Fund in connection
with any transaction approved by the Board of Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Fund, the
signing is automatically ratified and confirmed by me by virtue of this Power
of Attorney.
WITNESS my hand on the date set forth below.
May 5, 1997
Date /Signature/
John G. Guffey, Jr. Terrence Mollner
Witness Name of Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of Calvert World Values Fund (the
"Fund"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff, Susan
Walker Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford Duke my true
and lawful attorneys, with full power to each of them, to sign for me and in
my name in the appropriate capacities, all registration statements and
amendments filed by the Fund with any federal or state agency, and to do all
such things in my name and behalf necessary for registering and maintaining
registration or exemptions from registration of the Fund with any government
agency in any jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things in my
name and behalf to comply with the provisions of all federal, state and
foreign laws, regulations, and policy pronouncements affecting the Fund,
including, but not limited to, the Securities Act of 1933, the Securities
Exchange Act of 1934, the Investment Company Act of 1940, the Investment
Advisers Act of 1940, and all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Fund in connection
with any transaction approved by the Board of Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Fund, the
signing is automatically ratified and confirmed by me by virtue of this Power
of Attorney.
WITNESS my hand on the date set forth below.
May 5, 1997
Date /Signature/
Terrence Mollner Rustum Roy
Witness Name of Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of Calvert World Values Fund (the
"Fund"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff, Susan
Walker Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford Duke my true
and lawful attorneys, with full power to each of them, to sign for me and in
my name in the appropriate capacities, all registration statements and
amendments filed by the Fund with any federal or state agency, and to do all
such things in my name and behalf necessary for registering and maintaining
registration or exemptions from registration of the Fund with any government
agency in any jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things in my
name and behalf to comply with the provisions of all federal, state and
foreign laws, regulations, and policy pronouncements affecting the Fund,
including, but not limited to, the Securities Act of 1933, the Securities
Exchange Act of 1934, the Investment Company Act of 1940, the Investment
Advisers Act of 1940, and all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Fund in connection
with any transaction approved by the Board of Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Fund, the
signing is automatically ratified and confirmed by me by virtue of this Power
of Attorney.
WITNESS my hand on the date set forth below.
May 5, 1997
Date /Signature/
Terrence Mollner D. Wayne Silby
Witness Name of Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of Calvert World Values Fund (the
"Fund"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff, Susan
Walker Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford Duke my true
and lawful attorneys, with full power to each of them, to sign for me and in
my name in the appropriate capacities, all registration statements and
amendments filed by the Fund with any federal or state agency, and to do all
such things in my name and behalf necessary for registering and maintaining
registration or exemptions from registration of the Fund with any government
agency in any jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things in my
name and behalf to comply with the provisions of all federal, state and
foreign laws, regulations, and policy pronouncements affecting the Fund,
including, but not limited to, the Securities Act of 1933, the Securities
Exchange Act of 1934, the Investment Company Act of 1940, the Investment
Advisers Act of 1940, and all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Fund in connection
with any transaction approved by the Board of Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Fund, the
signing is automatically ratified and confirmed by me by virtue of this Power
of Attorney.
WITNESS my hand on the date set forth below.
May 5, 1997
Date /Signature/
Terrence Mollner Tessa Tennant
Witness Name of Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of Calvert World Values Fund (the
"Fund"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff, Susan
Walker Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford Duke my true
and lawful attorneys, with full power to each of them, to sign for me and in
my name in the appropriate capacities, all registration statements and
amendments filed by the Fund with any federal or state agency, and to do all
such things in my name and behalf necessary for registering and maintaining
registration or exemptions from registration of the Fund with any government
agency in any jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things in my
name and behalf to comply with the provisions of all federal, state and
foreign laws, regulations, and policy pronouncements affecting the Fund,
including, but not limited to, the Securities Act of 1933, the Securities
Exchange Act of 1934, the Investment Company Act of 1940, the Investment
Advisers Act of 1940, and all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Fund in connection
with any transaction approved by the Board of Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Fund, the
signing is automatically ratified and confirmed by me by virtue of this Power
of Attorney.
WITNESS my hand on the date set forth below.
December 9, 1997
Date /Signature/
Muhammad Yunus
Witness Name of Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Officer of Calvert World Values Fund (the "Fund"),
hereby constitute William M. Tartikoff, Susan Walker Bender, Katherine Stoner,
Lisa Crossley, and Ivy Wafford Duke my true and lawful attorneys, with full
power to each of them, to sign for me and in my name in the appropriate
capacities, all registration statements and amendments filed by the Fund with
any federal or state agency, and to do all such things in my name and behalf
necessary for registering and maintaining registration or exemptions from
registration of the Fund with any government agency in any jurisdiction,
domestic or foreign.
The same persons are authorized generally to do all such things in my
name and behalf to comply with the provisions of all federal, state and
foreign laws, regulations, and policy pronouncements affecting the Fund,
including, but not limited to, the Securities Act of 1933, the Securities
Exchange Act of 1934, the Investment Company Act of 1940, the Investment
Advisers Act of 1940, and all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Fund in connection
with any transaction approved by the Board of Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Fund, the
signing is automatically ratified and confirmed by me by virtue of this Power
of Attorney.
WITNESS my hand on the date set forth below.
May 5, 1997
Date /Signature/
Terrence Mollner Ronald M. Wolfsheimer
Witness Name of Officer
<TABLE> <S> <C>
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<NAME> CALVERT WORLD VALUES FUND, INC.
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<NAME> CALVERT CAPITAL ACCUMULATION FUND, CLASS A
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<ACCUM-APPREC-OR-DEPREC> 10230
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<DIVIDEND-INCOME> 181
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<EXPENSES-NET> 443
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<APPREC-INCREASE-CURRENT> 9239
<NET-CHANGE-FROM-OPS> 11471
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<DISTRIBUTIONS-OF-INCOME> 0
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<NUMBER-OF-SHARES-SOLD> 474
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<PER-SHARE-NAV-BEGIN> 21.29
<PER-SHARE-NII> (.11)
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<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
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<AVG-DEBT-PER-SHARE> 0
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<SERIES>
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<PERIOD-START> APR-01-1997
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<INVESTMENTS-AT-COST> 47503
<INVESTMENTS-AT-VALUE> 58501
<RECEIVABLES> 332
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<OTHER-ITEMS-ASSETS> 0
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<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 11
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 14
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<GROSS-EXPENSE> 54
<AVERAGE-NET-ASSETS> 4140
<PER-SHARE-NAV-BEGIN> 20.96
<PER-SHARE-NII> (.24)
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<PER-SHARE-DIVIDEND> 0
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</TABLE>
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of Calvert World Values Fund, Inc.
We consent to the incorporation by reference in Post-Effective
Amendment No. 10 to the Registration Statement of Calvert World Values Fund,
Inc. on Form N-1A (File Numbers 33-45829 and 811-06563) of our reports dated
April 10, 1998 on our audit of the financial statements and financial
highlights of Calvert Capital Accumulation Fund, which report is included in
the Annual Report to Shareholders for the year ended September 30, 1997 for
Calvert Capital Accumulation Fund, and which are incorporated by reference in
the Registration Statement. We also consent to the reference to our firm under
the caption "Independent Accountants and Custodians" in the Statements of
Additional Information.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
May 4, 1998
