<PAGE>
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. 9 XX
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Post-Effective Amendment No. 9 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
__ Immediately upon filing XX on March 31, 1998
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 JANUARY 31, 1998, REVISED AS OF MARCH 31, 1998
CALVERT SOCIAL INVESTMENT FUND
- MONEY MARKET PORTFOLIO - BOND PORTFOLIO
- MANAGED GROWTH PORTFOLIO - EQUITY PORTFOLIO
CALVERT WORLD VALUES FUND, INC.
- INTERNATIONAL EQUITY FUND
4550 MONTGOMERY AVENUE, BETHESDA, MARYLAND 20814
- --------------------------------------------------------------------------------
Introduction to the Funds
Calvert Social Investment Fund ("CSIF") and Calvert World Values Fund ("CWVF")
International Equity Fund (each a "Fund" and together, the "Funds") each seek to
provide growth of capital or current income through investment in enterprises
that make a significant contribution to society through their products and
services and through the way they do business. See "Investment Objectives and
Policies." Investments are selected on the basis of their ability to contribute
to the dual objectives of the Funds. Potential investments are first selected
for financial soundness and then evaluated according to a particular Fund's
social criteria.
Five different Portfolios are offered:
- - CSIF Managed Growth Portfolio (a balanced fund)
- - CSIF Bond Portfolio
- - CSIF Equity Portfolio
- - CSIF Money Market Portfolio
- - CWVF International Equity Fund
An investment in a Fund is neither insured nor guaranteed by the US Government.
There can be no assurance that the CSIF Money Market Portfolio will be
successful in maintaining a constant net asset value of $1.00 per share.
- --------------------------------------------------------------------------------
About This Prospectus
Please read this Prospectus before investing. It is designed to provide you with
information you ought to know before investing and to help you decide if the
Funds' goals match your own. Keep this document for future reference.
Statements of Additional Information for the Funds (dated March 31, 1998) have
been filed with the Securities and Exchange Commission and are incorporated by
reference. These free Statements are available upon request: 800-368-2748.
The SEC maintains a Web site at http://www.sec.gov that contains the Statements
of Additional Information, material incorporated by reference, and other
information regarding the Funds.
- --------------------------------------------------------------------------------
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 A FUND 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 A FUND, THE VALUE MAY
BE HIGHER OR LOWER THAN THE AMOUNT ORIGINALLY PAID.
<PAGE>
Purchase Information
CSIF Managed Growth, Bond and Equity Portfolios and CWVF International Equity
Fund 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 17, 1998 if sold within one year. Class C shares are not
available through all brokers. 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. Class C Shares of CSIFBond Portfolio will be
available May 18, 1998.
- --------------------------------------------------------------------------------
To Open An Account
Call your broker, or complete and return the enclosed Account Application.
Minimum investment is $1,000 for CSIF, and $2,000 for CWVF.
- --------------------------------------------------------------------------------
HIGHLIGHTS
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
The Funds are designed to provide opportunities for investors seeking growth of
capital or current income through investment in enterprises that make a
significant contribution to society through their products and services and
through the way they do business.
CSIF MONEY MARKET PORTFOLIO seeks to provide the highest level of current
income, consistent with liquidity, safety and stability, through investment in
money market instruments, including securities issued or guaranteed by agencies
of the US Government and repurchase agreements with banks and brokers secured by
such instruments, selected in accordance with the Fund's investment and social
criteria. The Money Market Portfolio is designed for short-term cash management
and for investors needing stability of principal. The Money Market Portfolio
seeks to maintain a constant net asset value of $1.00 per share.
CSIF MANAGED GROWTH PORTFOLIO is a balanced fund which seeks to achieve a total
return above the rate of inflation through an actively managed, diversified
portfolio of common and preferred stocks, bonds and money market instruments
which offer income and capital growth opportunity and which satisfy the
investment and social concern criteria.
CSIF BOND PORTFOLIO seeks to provide as high a level of current income as is
consistent with prudent investment risk and preservation of capital through
investment in bonds and other straight debt securities, selected pursuant to the
Fund's investment and social criteria.
CSIF EQUITY PORTFOLIO seeks growth of capital through investment in the equity
securities of issuers within industries perceived to offer opportunities for
potential capital appreciation and which satisfy the Fund's investment and
social criteria.
CWVF INTERNATIONAL EQUITY FUND seeks to achieve a high total return consistent
with reasonable risk, by investing primarily in a globally diversified portfolio
of equity securities.
There can be no assurance that the Funds will be successful in meeting their
investment objectives. For a further description of the Funds and discussion of
the Funds' investment techniques, see "Investment Objectives and Policies,"
"Investment Selection Process" and "Additional Investment Policies."
- --------------------------------------------------------------------------------
EXPERTISE IN THE MANAGEMENT OF THE FUNDS
The Funds' Investment Advisor is Calvert Asset Management Company, Inc.
("CAMCO"), a subsidiary of Acacia Mutual Life Insurance Company of Washington,
D.C. CAMCO manages the CSIF Money Market Portfolio, CSIFBond Portfolio, and the
fixed-income assets of the CSIF Managed Growth Portfolio. Investment Subadvisors
for the equity assets of the CSIF Managed Growth Portfolio are NCM Capital
Management Group, Inc. and Brown Capital Management, Inc. Loomis, Sayles &
Company, L.P. ("Loomis, Sayles") is the Subadvisor to the CSIF Equity Portfolio,
and Murray Johnstone International, Ltd., is the Subadvisor for the CWVF
International Equity Fund.
- --------------------------------------------------------------------------------
DIVERSIFICATION OF INVESTMENTS AND RISKS
<PAGE>
By pooling the investments of many investors with similar investment objectives,
investors have an opportunity to benefit from a broadly diversified portfolio.
For a discussion of the risks which may be associated with investments in
repurchase and reverse repurchase agreements, privately placed securities,
non-investment grade debt securities, the securities of foreign issuers, and
options and futures contracts, see "Additional Investment Policies" and the
Statements of Additional Information.
- --------------------------------------------------------------------------------
PURCHASE OF FUND SHARES
There is no sales charge on shares of the CSIF Money Market Portfolio. Class A
shares of the CSIF Managed Growth, Bond, and Equity Portfolios and the CWVF
International Equity Fund are sold subject to a front-end sales charge which
varies according to the dollar amount of shares purchased (see "How to Buy
Shares")
Purchases of shares of the Funds may be made by mail, bank wire, electronic
funds transfer, through the Funds' branch office or through brokers. (See "How
to Buy Shares.")
- --------------------------------------------------------------------------------
REDEMPTION OF FUND SHARES
Shares of each Portfolio may be redeemed at any time at the net asset value next
determined after a proper redemption request is received by the transfer agent
(subject to any applicable CDSC). Investors may redeem shares by mail or by
telephone, through brokers, or, for investors in the CSIF Money Market
Portfolio, by writing drafts in the amount of $250 or more against their account
balances. (See "How to Sell Your Shares")
- --------------------------------------------------------------------------------
GENERAL INFORMATION
CSIF is an open-end, diversified management investment company organized as a
Massachusetts business trust under a Declaration of Trust dated December 14,
1981, and is a series company. The Money Market and Managed Growth Portfolios
commenced operations in October 1982, and the Bond and Equity Portfolios
commenced operations in August 1987. CSIF's authorized capital and shares being
offered by this Prospectus consist of an unlimited number of shares of
beneficial interest of no par value which may be issued in series and classes.
Shares have equal rights with all other shares of the same class and series as
to voting, dividends and liquidation.
CWVF is an open-end diversified management investment company organized as a
Maryland corporation on February 14, 1992. Prior to June 1, 1996, the
International Equity Fund operated under the name of Calvert World Values Global
Equity Fund. The other series of Calvert World Values Fund, Inc. is Calvert
Capital Accumulation Fund.
- --------------------------------------------------------------------------------
FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CSIF Money CSIF Managed
A. Shareholder Market Portfolio Growth Portfolio
Transaction Costs Class A Class A Class B Class C
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Maximum Sales Charge on Purchases
(as a percentage of offering price) None 4.75% None None
Maximum Contingent Deferred Sales
Charge (as a percentage of purchase
price or redemption proceeds,
as applicable) None None 5.00(1) 1.00(3)
- --------------------------------------------------------------------------------------------------------------------
B. Annual Fund Operating Expenses - Fiscal Year 1997
(as a percentage of average net assets)
Management Fees 0.50% 0.60% 0.60% 0.60%
Rule 12b-1 Service and
Distribution Fees 0.00% 0.24% 1.00% 1.00%
Other Expenses
(after expense reimbursement) 0.39% 0.30% 0.94% 0.69%
- --------------------------------------------------------------------------------------------------------------------
Total Fund Operating Expenses* 0.89% 1.14% 2.54% 2.29%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CSIF Bond CSIF Equity
A. Shareholder Portfolio Portfolio
Transaction Costs Class A Class B Class C Class A Class B Class C
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Maximum Sales Charge on Purchases
(as a percentage of offering price) 3.75% None None 4.75% None None
Maximum Contingent Deferred Sales
Charge (as a percentage of purchase
price or redemption proceeds,
as applicable) None 4.00%(2) 1.00%(3) None 5.00(1) 1.00(3)
- ------------------------------------------------------------------------------------------------------------------------------
B. Annual Fund Operating Expenses - Fiscal Year 1997
(as a percentage of average net assets)
Management Fees 0.55% 0.55% 0.55% 0.55% 0.55% 0.55%
Rule 12b-1 Service and
Distribution Fees 0.20% 1.00% 1.00% 0.23% 1.00% 1.00%
Other Expenses 0.44% 1.23% 0.98% 0.43% 1.01% 0.76%
- ------------------------------------------------------------------------------------------------------------------------------
Total Fund Operating Expenses* 1.19% 2.78% 2.53% 1.21% 2.56% 2.31%
</TABLE>
<TABLE>
<CAPTION>
CWVF International
Equity Fund
A. Shareholder
Transaction Costs Class A Class B Class C
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Maximum Sales Charge on Purchases
(as a percentage of offering price) 4.75% None None
Maximum Contingent Deferred Sales
Charge (as a percentage of purchase
price or redemption proceeds,
as applicable) None 5.00(1) 1.00(3)
- --------------------------------------------------------------------------------------------------
B. Annual Fund Operating Expenses - Fiscal Year 1997
(as a percentage of average net assets)
Management Fees 1.10% 1.10% 1.10%
Rule 12b-1 Service and Distribution Fees 0.25% 1.00% 1.00%
Other Expenses 0.56% 1.06% 0.81%
- --------------------------------------------------------------------------------------------------
Total Fund Operating Expenses* 1.91% 3.16% 2.91%
- --------------------------------------------------------------------------------------------------
</TABLE>
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 and; for all
Portfolios except the CSIF Money Market Portfolio, (3) payment of maximum
initial sales charge for Class A shares at time of purchase, and (4) payment
of maximum applicable contingent deferred sales charge for Class B and Class
C.
* Net Operating Expenses after reduction for fees paid indirectly were:
CSIF MoneyMarket - 0.87% CSIF Equity, A - 1.20%
CSIF Managed Growth - A 1.12% CSIF Equity, C - 2.30%
CSIF Managed Growth - C 2.27% CWVF International Equity, A - 1.76%
CSIFBond - 1.15% CWVF International Equity, C - 2.76%
<PAGE>
(1). 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.
(2). A contingent deferred sales charge is imposed on the proceeds of Class B
shares redeemed within 4 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 4% in the first year that
shares are held, to 3% in the second, 2% in the third year, and 1% in the fourth
year. There is no charge on redemptions of Class B shares held for more than
four years. See "Calculation of Contingent Deferred Sales Charge" below.
(3). 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."
<PAGE>
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
CSIF Money Market Portfolio $9 $28 $49 $110
CSIF Managed Growth Portfolio
CLASS A $59 $82 $107 $180
CLASS B
Assuming a complete
redemption at end of period $77 $122 $158 $253
Assuming no redemption $26 $79 $135 $253
CLASS C
Assuming a complete
redemption at end of period $33 $72 $123 $263
Assuming no redemption $23 $72 $123 $263
CSIF Bond Portfolio
CLASS A $49 $74 $100 $176
CLASS B
Assuming a complete
redemption at end of period $69 $108 $147 $235
Assuming no redemption $28 $86 $147 $235
CLASS C
Assuming a complete
redemption at end of period $36 $79 $135 $287
Assuming no redemption $26 $79 $135 $287
CSIF Equity Portfolio
CLASS A $59 $84 $111 $187
CLASS B
Assuming a complete
redemption at end of period $77 $123 $159 $256
Assuming no redemption $26 $80 $136 $256
CLASS C
Assuming a complete
redemption at end of period $34 $72 $124 $265
Assuming no redemption $23 $72 $124 $265
CWVF International Equity Fund
CLASS A $66 $105 $146 $260
CLASS B
Assuming a complete
redemption at end of period $83 $140 $187 $317
Assuming no redemption $32 $97 $165 $317
CLASS C
Assuming a complete
redemption at end of period $40 $90 $153 $323
Assuming no redemption $29 $90 $153 $323
</TABLE>
THE EXAMPLE, WHICH IS HYPOTHETICAL, 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 may bear directly (shareholder
transaction costs) or indirectly (annual fund operating expenses)
Shareholder Transaction Costs are charges you pay when you buy or sell shares.
See "Reduced Sales Charges" at Exhibit A 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.
- --------------------------------------------------------------------------------
Annual Fund Operating Expenses
are based on historical expenses, except for Other Expenses for Class B (and
Class C for CSIF Bond Portfolio) which are estimates. Management fees for CSIF
Bond have been restated to reflect a partial waiver of the fees, in effect until
<PAGE>
2/29/2000. Management Fees are paid by each Fund to CAMCO for managing the
Funds' investments and business affairs. Management fees include the Subadvisory
fees paid by CAMCO to the Subadvisors, and, for CWVF International Equity Fund,
the administrative fee paid by the Fund to Calvert Administrative Services
Company, an affiliate of CAMCO. The Management Fees for the CSIF Equity
Portfolio include a performance adjustment, which could cause the fee to be as
high as 0.90% or as low as 0.50%, depending on the Equity Portfolio's
performance. The Management fees for the CSIF Managed Growth Portfolio include a
performance adjustment which could cause the fee to be as high as 0.85% or as
low as 0.55%, depending on its 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 each Fund's yield or share price and are not charged directly to
individual shareholder accounts.
If CAMCO had not reimbursed or waived fees, the current Other Expenses and Total
Fund Operating Expenses for the CSIF Money Market Portfolio would have been
0.50% and 1.00%, respectively.
The Funds' Rule 12b-1 fees include an asset-based sales charge. Thus, long-term
shareholders in a 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. (the "NASD"). 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
compensation for the sale and distribution of the securities or for services to
the Funds. See the Statements of Additional Information, "Method of
Distribution."
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following tables provide information about the financial history of each
Fund's shares. They express the information in terms of a single share
outstanding for the respective Portfolio throughout each period. Information for
Class C shares is presented only since their inception on March 1, 1994. No
Class B shares were outstanding during the periods presented. The tables have
been audited by the independent accountants, whose reports are included in the
Annual Reports to Shareholders of the Fund. The tables should be read in
conjunction with the financial statements and their related notes. The current
Annual Reports to Shareholders are incorporated by reference into the Statements
of Additional Information.
<TABLE>
<CAPTION>
Year Ended September 30,
CSIF Money Market Portfolio 1997 1996 1995
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Income from investment operations
Net investment income 0.48 .048 .050
Distributions from
Net investment income (0.48) (.048) (.050)
- -------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00
Total return* 4.89% 4.88% 5.13%
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Ratio to average net assets:
Net investment income 4.79% 4.77% 5.03%
Total expenses** .89% .89% .89%
Net expenses .87% .87% .87%
Expenses reimbursed and/or waived .11% .21% .18%
Net assets, end of year (in thousands) $166,111 $166,516 $153,996
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Number of shares outstanding
at end of year (in thousands) 166,163 166,569 154,044
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
<CAPTION>
Year Ended September 30,
CSIF Money Market Portfolio 1994 1993 1992
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Income from investment operations
Net investment income .031 .025 .037
Distributions from
Net investment income (.031) (.025) (.037)
- -------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00
Total return* 3.13% 2.56% 3.79%
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Ratio to average net assets:
Net investment income 3.07% 2.54% 3.74%
Total expenses** N/A N/A N/A
Net expenses .87% .87% .87%
Expenses reimbursed and/or waived .18% .20% .16%
Net assets, end of year (in thousands) $143,779 $144,985 $171,340
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Number of shares outstanding
at end of year (in thousands) 143,826 145,031 171,407
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
</TABLE>
*Total return prior to 1989 is not audited.
**Effective September 30, 1995, this ratio reflects total expenses before
reduction for fees paid indirectly; such
reductions are included in the ratio of net expenses.
N/A - Disclosure not applicable to prior periods.
<TABLE>
<CAPTION>
Year Ended September 30,
CSIF Money
Market Portfolio 1991 1990 1989 1988
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .061 .076 .084 .067
Distributions from
<PAGE>
Net investment income (.061) (.076) (.084) (.067)
- ----------------------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total return* 6.32% 7.85% 6.47% 5.31%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Ratio to average net assets:
Net investment income 6.12% 7.53% 8.40% 6.47%
Total expenses** N/A N/A N/A N/A
Net expenses .87% .85% .85% .84%
Expenses reimbursed and/or waived .13% .14% .17% .27%
Net assets, end of year (in thousands) $193,947 $182,148 $139,662 $81,253
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Number of shares outstanding
at end of year (in thousands) 194,015 182,193 139,707 81,278
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
<CAPTION>
Class A Shares
CSIFManaged Year Ended September 30,
Growth Portfolio 1997 1996 1995 1994
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $ 31.35 $ 32.81 $ 28.77 $ 30.84
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .83 .78 .87 .93
Net realized and unrealized
gain (loss) on investment 5.61 2.28 4.25 (1.83)
Total from investment operations 6.44 3.06 5.12 (.90)
- ----------------------------------------------------------------------------------------------------
Distributions from
Net investment income (.81) (.77) (.87) (.95)
Net realized gains (2.10) (3.75) (.21) (.23)
Total distributions (2.91) (4.52) (1.08) (1.18)
Total increase (decrease) in asset value 3.53 (1.46) 4.04 (20.8)
- ----------------------------------------------------------------------------------------------------
Net asset value, end of year $ 34.88 $ 31.35 $ 32.81 $ 28.77
Total return* 21.94% 10.27% 18.21% (2.95)%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Ratio to average net assets:
Net investment income 2.57% 2.58% 2.89% 3.14%
Total expenses** 1.14% 1.28% 1.28% N/A
Net expenses 1.12% 1.26% 1.26% 1.24%
Expenses reimbursed and/or waived -- .01% .02% --
Portfolio turnover 215% 111% 114% 34%
Average commission rate paid $ .0508 $ .0489 N/A N/A
Net assets, end of year (in thousands) $675,306 $594,482 $560,981 $512,027
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Number of shares outstanding
at end of year (in thousands) 19,362 18,964 17,099 17,800
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Class A Shares
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
CSIF Managed Year Ended September 30,
Growth Portfolio 1993 1992 1991 1990 1989 1988
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year $ 29.35 $ 28.42 $ 25.87 $ 27.72 $ 25.04 $ 27.44
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Income from investment
operations
Net investment income .95 1.07 1.20 1.09 1.15 1.09
Net realized and unrealized
gain (loss) on investment 1.91 1.82 3.10 (1.85) 2.97 (1.91)
Total from investment
operations 2.86 2.89 4.30 (.76) 4.12 (.82)
- ------------------------------------------------------------------------------------------------------------------------
Distributions from
Net investment income (.95) (1.95) (1.00) (.63) (.98) (1.08)
Net realized gains (.41) (.01) (.75) (.46) (.46) (.50)
Total distributions (1.36) (1.96) (1.75) (1.09) (1.44) (1.58)
Total increase (decrease) in
asset value 1.50 .93 2.55 (1.85) 2.68 (2.40)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 30.85 $ 29.35 $ 28.42 $ 25.87 $ 27.72 $ 25.04
Total return* 9.98% 10.71% 17.51% (2.87%) 17.31% (2.48%)
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
Net investment income 3.25% 3.90% 4.73% 4.85% 4.49% 4.30%
Total expenses** N/A N/A N/A N/A N/A N/A
Net expenses 1.25% 1.28% 1.31% 1.30% 1.29% 1.34%
Expenses reimbursed
and/or waived -- -- -- -- -- --
Portfolio turnover 33% 14% 25% 24% 34% 46%
Average commission rate paid N/A N/A N/A N/A N/A N/A
Net assets, end of year
(in thousands) $536,170 $419,514 $329,922 $242,617$ 212,178 $171,931
Number of shares outstanding
at end of year (in thousands) 17,378 14,292 11,609 9,377 7,654 6,866
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Total return prior to 1989 is not audited.
**Effective September 30, 1995, this ratio reflects total expenses before
reduction for fees paid indirectly; such reductions are included in the
ratio of net expenses.
N/A - Disclosure not applicable to prior periods.
<PAGE>
<TABLE>
<CAPTION>
Class C Shares
Year From Inception
Ended (March 1, 1994)
September 30, to September 30,
CSIF Managed Growth Portfolio 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $31.05 $32.60 $28.65 $30.43
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
Income from investment
operations
Net investment income .47 .46 .54 .51
Net realized and unrealized
gain(loss) on investment 5.54 2.17 4.20 (1.66)
Total from investment
operations 6.01 2.63 4.74 (1.15)
- ------------------------------------------------------------------------------------------
Distributions from
Net investment income (.44) (.43) (.58) (.63)
Net realized gains (2.10) (3.75) (.21) --
Total distributions (2.54) (4.18) (.79) (.63)
Total increase (decrease) in
asset value 3.47 1.55 3.95 (1.78)
- ------------------------------------------------------------------------------------------
Net asset value, end of period $34.52 $31.05 $32.60 $28.65
Total return* 20.56% 8.85% 16.85% (3.30%)
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
Ratio to average net assets:
Net investment income 1.42% 1.34% 1.61% 1.83%(a)
Total expenses** 2.29% 2.52% 2.51% N/A
Net expenses 2.27% 2.50% 2.50% 2.47%(a)
Expenses reimbursed
and/or waived -- .14% .42% 1.46%(a)
Portfolio turnover 215% 111% 114% 34%
Average commission rate paid $.0508 $.0489 N/A N/A
Net assets, end of period
(in thousands) $8,898 $6,715 $4,065 $1,893
Number of shares outstanding
at end of period (in thousands) 258 216 125 66
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Class A Shares
Year Ended September 30,
CSIF Bond Portfolio 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $ 16.06 $ 16.34 $ 15.49 $ 17.77
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
Income from investment
operations
Net investment income .96 .92 .96 .94
Net realized and unrealized gain
(loss) on investments .58 (.29) .91 (1.81)
Total from investment
operations 1.54 .63 1.87 (.87)
- ------------------------------------------------------------------------------------------
Distributions from
Net investment income (.96) (.91) (.93) (.94)
Net realized gains -- -- (.06) (.47)
Tax return of capital -- -- (.03) --
Total distributions (.96) (.91) (1.02) (1.41)
Total increase (decrease) in
asset value .58 (.28) .85 (2.28)
- ------------------------------------------------------------------------------------------
Net asset value, end of period $ 16.64 $ 16.06 $ 16.34 $ 15.49
Total return* 9.89% 3.96% 12.57% (5.18%)
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
Ratio to average net assets:
Net investment income 5.85% 5.60% 6.04% 5.64%
Total expenses** 1.23% 1.29% 1.24% N/A
Net expenses 1.19% 1.26% 1.22% 1.10%
Portfolio turnover 319% 22% 29% 19%
Net assets, end of period
(in thousands) $59,656 $62,259 $62,929 $61,573
Number of shares outstanding
at end of period (in thousands) 3,585 3,876 3,850 3,976
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
</TABLE>
*Total return is not annualized and does not reflect deduction of Class A
front-end sales charges. Total return prior to 1989 is not audited.
**Effective September 30, 1995, this ratio reflects total expenses before
reduction for fees paid indirectly; previously such reductions were
included in the ratio.
(a) Annualized
N/A - Disclosure not applicable to prior periods.
<PAGE>
<TABLE>
<CAPTION>
Class A Shares
Year Ended September 30,
CSIFBond Portfolio 1993 1992 1991
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 17.05 $ 16.48 $ 15.34
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
Income from investment operations
Net investment income 1.08 1.15 1.21
Net realized and unrealized gain
(loss) on investments .85 .78 1.15
Total from investment operations 1.93 1.93 2.36
- ------------------------------------------------------------------------------------------
Distributions from
Net investment income (1.08) (1.15) (1.21)
Net realized gains (.13) (.21) (.01)
Tax return of capital -- -- --
Total distributions (1.21) (1.36) (1.22)
Total increase (decrease) in
asset value .72 .57 1.14
- ------------------------------------------------------------------------------------------
Net asset value, end of period $ 17.77 $ 17.05 $ 16.48
Total return* 11.89% 12.29% 15.95%
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
Ratio to average net assets:
Net investment income 6.33% 6.90% 7.63%
Total expenses** N/A N/A N/A
Net expenses .79% .75% .77%
Expenses reimbursed and/or waived .20% .24% .27%
Portfolio turnover 28% 29% 24%
Net assets, end of period (in thousands) $67,134 $50,572 $33,259
Number of shares outstanding
at end of period (in thousands) 3,778 2,965 2,018
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Class A Shares
Year Ended September 30,
CSIFBond Portfolio 1990 1989 1988
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 15.71 $ 15.43 $ 14.81
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
Income from investment operations
Net investment income 1.24 1.31 1.16
Net realized and unrealized gain
(loss) on investments (.32) .30 .62
Total from investment operations .92 1.61 1.78
- ------------------------------------------------------------------------------------------
Distributions from
Net investment income (1.24) (1.29) (1.16)
Net realized gains (.05) (.04) --
Tax return of capital -- -- --
Total distributions (1.29) (1.33) (1.16)
Total increase (decrease) in
asset value (.37) .28 .62
- ------------------------------------------------------------------------------------------
Net asset value, end of period $ 15.34 $ 15.71 $ 15.43
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
Total return* 6.09% 10.93% 12.32%
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
Ratio to average net assets:
Net investment income 8.02% 8.53% 8.14%
Total expenses** N/A N/A N/A
Net expenses .65% .17% --
Expenses reimbursed and/or waived .45% .92% 1.56%
Portfolio turnover 22% 50% 27%
Net assets, end of period (in thousands) $23,298 $12,792 $5,235
Number of shares outstanding
at end of period (in thousands) 1,519 814 339
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
</TABLE>
* Total return is not annualized and does not reflect deduction of Class A
front-end sales charges. Total return prior to 1989 is not audited.
** Effective September 30, 1995, this ratio reflects total expenses before
reduction for fees paid indirectly; such reductions are included in the
ratio of net expenses.
N/A - Disclosure not applicable to prior periods.
<PAGE>
<TABLE>
<CAPTION>
Class A Shares
Year Ended September 30,
CSIF Equity Portfolio 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 22.54 $ 21.12 $ 20.13 $ 21.43
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income -- .03 .06 .13
Net realized and unrealized gain
(loss)on investments 6.73 3.26 2.22 (1.04)
Total from investment operations 6.73 3.29 2.28 (.91)
- ---------------------------------------------------------------------------------------------------------
Distributions from
Net investment income (.01) (.06) (.04) (.28)
Net realized gains (1.49) (1.81) (1.25) (.11)
Total distributions (1.50) (1.87) (1.29) (.39)
Total increase (decrease) in
net asset value 5.23 1.42 .99 (1.30)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 27.77 $ 22.54 $ 21.12 $ 20.13
Total return* 31.34% 16.62% 12.43% (4.33%)
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Ratio to average net assets:
Net investment income .03% .15% .32% .65%
Total expenses** 1.21% 1.29% 1.38% N/A
Net expenses 1.20% 1.27% 1.36% 1.27%
Expenses reimbursed and/or waived -- -- -- --
Portfolio turnover 93% 118% 35% 94%
Average commission rate paid $ .0574 $ .0556 N/A N/A
Net assets, end of period (in thousands) $147,002 $101,344 $90,951 $92,970
Number of shares outstanding
at end of period (in thousands) 5,294 4,496 4,307 4,620
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class A Shares
Year Ended September 30,
CSIF Equity Portfolio 1993 1992 1991 1990 1989 1988
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 20.03 $ 18.89 $ 15.86 $ 18.07 $ 14.58 $ 15.33
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .21 .17 .44 .32 .40 .87
Net realized and unrealized gain
(loss)on investments 1.36 1.20 2.96 (2.24) 3.40 (1.53)
Total from investment operations 1.57 1.37 3.40 (1.92) 3.80 (.66)
- ----------------------------------------------------------------------------------------------------------------------------
Distributions from
Net investment income (.17) (.23) (.37) (.24) (.31) (.08)
Net realized gains -- -- -- (.05) -- (.01)
Total distributions (.17) (.23) (.37) (.29) (.31) (.09)
Total increase (decrease) in 1.40 1.14 3.03 (2.21) 3.49 (.75)
net asset value $ 21.43 $ 20.03 $ 18.89 $ 15.86 $ 18.07 $ 14.58
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period
Total return* 7.82% 7.36% 21.88% (10.80%) 26.69% (4.26%)
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
Net investment income 1.06% 1.02% 1.94% 2.64% 2.48% 2.85%
Total expenses** N/A N/A N/A N/A N/A N/A
Net expenses 1.13% 1.17% 1.04% .78% .21% N/A
Expenses reimbursed and/or waived -- -- .18% .50% 1.17% 2.49%
Portfolio turnover 43% 24% 27% 31% 8% 23%
Average commission rate paid N/A N/A N/A N/A N/A N/A
Net assets, end of period (in thousands) $85,042 $64,629 $42,642 $22,212 $7,927 $1,711
Number of shares outstanding
at end of period (in thousands) 3,968 3,226 2,258 1,401 439 117
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Total return is not annualized and does not reflect deduction of Class A
front-end sales charges. Total return prior to 1989 is not audited.
**Effective September 30, 1995, this ratio reflects total expenses before
reduction for fees paid indirectly; such reductions are included in the
ratio of net expenses.
N/A - Disclosure not applicable to prior periods.
<PAGE>
<TABLE>
<CAPTION>
Class C Shares
From Inception
(March 1, 1994)
Year Ended September 30, to September 30,
CSIF Equity Portfolio 1997 1996 1995 1994
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $21.71 $20.66 $19.98 $22.12
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income (.05) (.16) (.03) (.06)
Net realized and unrealized gain
(loss)on investments 6.21 3.04 2.05 (2.08)
Total from investment operations 6.16 2.88 2.02 (2.14)
- --------------------------------------------------------------------------------------------------------------
Distributions from
Net investment income (.01) (.02) (.09) --
Net realized gains (1.49) (1.81) (1.25) --
Total distributions (1.50) (1.83) (1.34) --
Total increase (decrease) in
net asset value 4.66 1.05 .68 (2.14)
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $26.37 $21.71 $20.66 $19.98
Total return* 29.84% 14.85% 11.16% (9.14%)
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
Net investment income (1.08%) (1.42%) (.84%) (1.06%)(a)
Total expenses** 2.31% 2.86% 2.51% N/A
Net expenses 2.30% 2.85% 2.50% 2.75%(a)
Expenses reimbursed and/or waived -- -- 1.07% 4.60%(a)
Portfolio turnover 93% 118% 35% 94%
Average commission rate paid $.0574 $.0556 N/A N/A
Net assets, end of period (in thousands) $6,249 $2,996 $1,802 $ 670
Number of shares outstanding
at end of period (in thousands) 237 138 87 34
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Class A Shares
Year Ended September 30,
CWVF International Equity 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $ 18.62 $ 17.62 $ 17.99 $ 16.35
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .10 .04 .11 --
Net realized and unrealized
gain (loss) 3.81 1.53 .38 2.14
Total from investment operations 3.91 1.57 .49 2.14
- ---------------------------------------------------------------------------------------------------------
Distributions from:
Net investment income (.05) (.13) -- (.03)
Excess of net
investment income -- -- -- (.04)
Net realized gains (.42) (.44) (.86) (.43)
Total distributions (.47) (.57) (.86) (.50)
Total increase (decrease) in net asset value 3.44 1.00 (.37) 1.64
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 22.06 $ 18.62 $ 17.62 $ 17.99
Total return* 21.44% 9.22% 3.19% 13.44%
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Ratio to average net assets:
Net investment income (loss) .51% .23% .68% (.04%)
Total expenses** 1.91% 1.95% 1.93% N/A
Net expenses 1.76% 1.81% 1.79% 1.96%
Expenses reimbursed and/or waived -- -- -- .04%
Portfolio turnover 58% 96% 73% 78%
Average commission rate paid $ .0222 $ .0339 N/A N/A
Net assets, end of year (in thousands) $225,169 $194,032 $191,586 $175,543
Number of shares outstanding at
end of year (in thousands) 10,207 10,422 10,876 9,755
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
</TABLE>
*Total return is not annualized and does not reflect deduction of Class A
front-end sales charges. Total return prior to 1989 is not audited.
**Effective September 30, 1995, this ratio reflects total expenses before
reduction for fees paid indirectly; such reductions are included in the
ratio of net expenses.
(a) Annualized
N/A - Disclosure not applicable to prior periods.
<PAGE>
<TABLE>
<CAPTION>
Class C Shares
From Inception
(March 1, 1994)
Year Ended Sept. 30, through Sept. 30,
CWVF International Equity 1997 1996 1995 1994
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $18.20 $17.28 $17.86 $18.24
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income (.07) (.15) (.05) (.06)
Net realized and unrealized gain
(loss) on investments 3.68 1.51 .32 (.32)
Total from investment operations 3.61 1.36 .27 (.38)
- -------------------------------------------------------------------------------------------------------------
Distributions from:
Net realized gains (.42) (.44) (.85) --
Total distributions (.42) (.44) (.85) --
Total increase (decrease) in net asset value 3.19 .92 (.58) (.38)
- -------------------------------------------------------------------------------------------------------------
Net asset value, ending $21.39 $18.20 $17.28 $17.86
Total return* 20.22% 8.07% 1.95% (1.27%)
Ratio to average net assets:
Net investment income (loss) (.47%) (.88%) (.47%) (1.16%)(a)
Total expenses** 2.91% 3.08% 3.12% N/A
Net expenses 2.76% 2.93% 2.99% 3.32%(a)
Expenses reimbursed and/or waived -- -- .13% .50%(a)
Portfolio turnover 58% 96% 73% 78%
Average commission rate paid $.0222 $.0339 N/A N/A
Net assets, end of period (in thousands) $8,799 $6,779 $6,061 $3,620
Number of shares outstanding
at ending (in thousands) 411 373 351 203
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
</TABLE>
*Total return is not annualized and does not reflect deduction of Class A
front-end sales charges. Total return prior to 1989 is not audited.
**Effective September 30, 1995, this ratio reflects total expenses before
reduction for fees paid indirectly; such reductions are included in the
ratio of net expenses.
(a) Annualized
N/A - Disclosure not applicable to prior periods.
<PAGE>
<TABLE>
<CAPTION>
Class A Shares
From Inception
(July 2, 1992)
Year Ended Sept. 30, to September 30,
CWVF International Equity 1993 1992
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $14.31 $15.00
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
Income from investment operations
Net investment income .08 .02
Net realized and unrealized gain (loss) 2.04 (.71)
Total from investment operations 2.12 (.69)
- ---------------------------------------------------------------------------------------
DISTRIBUTIONS FROM:
Net investment income (.05) --
Excess of net
investment income -- --
Net realized gains (.03) --
Total distributions (.08) --
Total increase (decrease) in net asset value 2.04 (.69)
- ---------------------------------------------------------------------------------------
Net asset value, ending $16.35 $14.31
Total return* 14.95% (4.60%)
Ratio to average net assets:
Net investment income (loss) .80% 1.23%(a)
Total expenses** N/A N/A
Net expenses 1.50% 1.01%(a)
Expenses reimbursed and/or waived .20% .60%(a)
Portfolio turnover 35% --
Average commission rate paid N/A N/A
Net assets, end of period (in thousands) $54,280 $8,440
Number of shares outstanding
at ending (in thousands) 3,319 590
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
</TABLE>
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
- --------------------------------------------------------------------------------
The Funds are designed for individual and institutional investors, including
ERISA fiduciaries, seeking growth of capital or current income through
investment in enterprises that make a significant contribution to society
through their products and services and through the way they do business. The
CSIF Managed Growth Portfolio is designed for long-term investment through a
balanced portfolio. The CSIF Money Market Portfolio is designed for short-term
cash management and stability of principal. The CSIF Bond Portfolio is designed
for current income and preservation of capital. The CSIF Equity Portfolio and
CWVF International Equity Fund are designed for capital growth. The net asset
value of each Portfolio, except for CSIF Money MarketPortfolio, will fluctuate
in response to changes in market conditions and the value of portfolio
investments.
- --------------------------------------------------------------------------------
CSIFMoney Market Portfolio
The Money Market Portfolio seeks to provide the highest level of current income,
consistent with liquidity, safety and security of capital, through investment in
money market instruments, including repurchase agreements with recognized
securities brokers and banks secured by such instruments, and reverse repurchase
agreements, all selected in accordance with the Fund's investment and social
criteria. The Money Market Portfolio attempts to maintain a constant net asset
value of $1.00 per share.
The Money Market Portfolio invests only in high grade, short-term money market
instruments which may include: obligations issued or guaranteed as to principal
by the United States Government, its agencies and instrumentalities; US
dollar-denominated certificates of deposit, time deposits and bankers'
acceptances of US banks, generally banks with assets in excess of $1 billion;
taxable municipal securities, including variable rate demand notes; and
commercial paper (including participation interests in loans extended by banks
to issuers of commercial paper) that at the date of investment is rated A-1 by
Standard & Poor's Ratings Group ("S&P") or Prime-1 by Moody's Investors Service,
Inc. ("Moody's"), or, if not rated, is of comparable quality.
- --------------------------------------------------------------------------------
CSIF Managed Growth Portfolio
The Managed Growth Portfolio seeks to achieve a total return above the rate of
inflation through an actively managed portfolio of stocks, bonds and money
market instruments (including repurchase agreements secured by such instruments)
selected with a concern for the investment and social impact of each investment.
It is not the policy of the Managed Growth Portfolio to take risks to obtain
speculatively or aggressively high returns. The portfolio is a "balanced"
portfolio, and intends to invest approximately 55% to 60% of its assets in
equities and 40% to 45% in fixed income securities. See "Portfolio Managers" for
more information. Generally, equity investments are selected by the subadvisors,
subject to direction and control by CAMCO and the CSIF Board of Trustees. CAMCO
manages the Portfolio's fixed-income assets and determines the mix for the
Managed Growth Portfolio depending upon its view of market conditions and the
economic outlook.
CSIF Managed Growth Portfolio may purchase both common and preferred stock. The
Portfolio normally invests in bonds which are considered investment-grade,
including bonds which are direct or indirect obligations of the US Government,
or which at the date of investment are rated AAA, AA, A, or BBB by S&P or Aaa,
Aa, A, or Baa by Moody's. The Portfolio may purchase lower-rated obligations
(those rated below BBB, which are considered noninvestment-grade securities) but
no more than 20% of its assets may be invested in obligations rated lower than
B. The Portfolio may purchase, without limitation, bonds which are unrated but
of comparable quality to bonds rated B or better as determined by CAMCO under
the supervision of the CSIF Board of Trustees. The Managed Growth Portfolio does
not currently hold or intend to invest more than 5% of its net assets in
noninvestment-grade securities. See the Statement of Additional Information
("SAI") for additional information concerning bond ratings.
- --------------------------------------------------------------------------------
CSIFBond Portfolio
The Bond Portfolio seeks to provide as high a level of current income as is
consistent with prudent investment risk and preservation of capital through
investment in bonds and other straight debt securities, including taxable
municipal securities, selected pursuant to the Fund's investment and social
criteria. The Bond Portfolio is neither speculative nor conservative in its
investment policies and will take reasonable risks in seeking to achieve its
investment objective of current income and preservation of capital. Debt
securities may be long-term, intermediate-term, short-term, or any combination
thereof, depending on the Advisors' evaluation of current and anticipated market
patterns and trends; the Advisors expect that the Bond Portfolio's average
weighted maturity will range between 5 and 20 years. The value of the Portfolio
will vary inversely with changes in interest rates.
In seeking to achieve these objectives, it is anticipated that under normal
conditions the Bond Portfolio will invest at least 65% of the value of its net
assets in publicly-traded straight debt securities which have an investment
grade rating of A or
<PAGE>
above as determined by a nationally recognized rating service such as S&P or
Moody's, or if unrated, determined to be of comparable quality. The Portfolio
may also invest in obligations issued or guaranteed by the US Government or its
agencies or instrumentalities, or in cash and cash equivalents. Up to 20% of the
Bond Portfolio's total assets may be invested in straight debt securities which
are not rated within the four highest grades, in convertible debt securities,
convertible preferred and preferred stocks, or other securities. The Bond
Portfolio does not currently hold or intend to invest more than 5%
(approximately) of its net assets in noninvestment-grade securities. See the SAI
for additional information concerning bond ratings.
- --------------------------------------------------------------------------------
CSIF Equity Portfolio
The Equity Portfolio seeks growth of capital through investment in the equity
securities of issuers within industries perceived to offer opportunities for
potential capital appreciation and which satisfy the Fund's investment and
social criteria. The Equity Portfolio is neither speculative nor conservative in
its investment policies and will take reasonable risks in seeking to achieve its
investment objective of growth of capital.
CSIF Equity Portfolio normally invests at least 80% of the value of its net
assets in equity securities. Such securities include common stocks, convertible
securities and preferred stocks. For liquidity purposes or pending the
investment of the proceeds of the sale of its shares, this Portfolio may invest
up to 20% of the value of its assets in money market instruments, including:
obligations of the US Government, its agencies and instrumentalities;
certificates of deposit of banks, generally, those having total assets of at
least one billion dollars; and commercial paper or other corporate notes of
investment grade quality. Such securities may be purchases subject to repurchase
agreements with recognized securities brokers and banks. If the Equity Portfolio
has assumed a temporary defensive posture, there is no limitation on the
percentage of its assets which may be invested in money market instruments. The
Equity Portfolio does not currently hold or intend to invest more than 5% of its
net assets in noninvestment-grade debt securities.
<PAGE>
ADDITIONAL INVESTMENT POLICIES
- --------------------------------------------------------------------------------
Calvert Social Investment Fund
As a matter of fundamental investment policy which cannot be changed without
shareholder approval, no more than 25% of the value of a Portfolio's assets may
be invested in any one industry, no more than 5% of a Portfolio's assets may be
invested in any one company, nor may a Portfolio, or CSIF in the aggregate,
purchase more than 10% of the voting securities of any issuer.
CSIF Managed Growth, Bond and Equity Portfolios each can use various techniques
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 Portfolios can use these practices either as
substitution or as protection against an adverse move in the Portfolios to
adjust the risk and return characteristics of the Portfolios. If the Advisor
and/or Subadvisor judges market conditions incorrectly or employs a strategy
that does not correlate well with a Portfolio'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 a
Portfolio 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 Portfolios' 15% restriction on illiquid securities. See the CSIF SAI for
more detail about these strategies.
CSIF may engage in repurchase agreements and reverse repurchase agreements. In a
repurchase agreement, the Portfolio buys a security subject to the right and
obligation to sell it back at a higher price. In order to minimize any risk
involved, the Portfolio engages in such transactions only with recognized
securities brokers determined by the Advisor to present a minimal credit risk.
Repurchase agreements are fully collateralized and always have a maturity of
less than one year. In a reverse repurchase agreement, the Portfolio sells a
security subject to the right and obligation to buy it back at a higher price.
The Portfolio then invests the proceeds from the transaction in another
obligation in which it is authorized to invest. For reverse repurchase
agreements, the Portfolio maintains liquid assets equal in value to the
repurchase price in a segregated account.
Each CSIF Portfolio 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 10% of the value of that Portfolio's total assets.
The Managed Growth and Bond Portfolio's fixed-income investment strategies
caused them to have a relatively high portfolio turnover compared to other
portfolios. A portfolio with high turnover may incur higher transaction costs,
such as custodian and settlement fees. During fiscal 1997, brokerage commission
expenses remained relatively level even though turnover increased significantly,
since the fixed income investments are traded on a spread, rather than a
commission basis.
- --------------------------------------------------------------------------------
CSIF has adopted the following operating (i.e., non-fundamental) investment
policies which may be changed by the Board of Trustees without shareholder
approval:
CSIF Managed Growth, Bond, and Equity Portfolios may not purchase or hold
illiquid securities if more than 15% of the value of that Portfolio's net assets
would be invested in such securities. CSIFMoney Market illiquid securities
limitation is 10% of net assets.
Each CSIF Portfolio may invest up to 25% of its assets in the securities of
foreign issuers. The Portfolios may purchase foreign securities directly, on
foreign markets, or those represented by American Depositary Receipts ("ADRs"),
or other receipts evidencing ownership of foreign securities, such as
International Depository Receipts and Global Depositary Receipts. ADRs are US
dollar-denominated and traded in the US on exchanges or over the counter.
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 US investments. By investing in
ADRs rather than directly in foreign issuers' stock, the Portfolios 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.
The Money Market Portfolio may purchase only high quality US dollar-denominated
instruments.
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CWVF International Equity Fund
CWVF International Equity seeks to provide a high total return consistent with
reasonable risk by investing primarily in a globally diversified portfolio of
equity securities. All investments are screened for financial and social
criteria. There is, of course, no assurance that the Fund will be successful in
meeting its objective.
<PAGE>
Under normal circumstances, International Equity will invest at least 65% of its
assets in equity securities. International Equity will invest primarily in
common stocks of established foreign companies believed by the Subadvisor to
have potential for capital growth, income or both. Companies are considered
established if their securities are traded on a recognized stock exchange.
However, International Equity may invest in any other type of security
including, but not limited to, convertible securities, preferred stocks, bonds,
notes and other debt securities of companies, (including Euro-currency
instruments and securities) or of any international agency (such as the Asian
Development Bank or Inter-American Development Bank) or obligations of domestic
or foreign governments and their political subdivisions, and in foreign currency
transactions. International Equity may invest in American or European Depositary
Receipts ("ADRs" or "EDRs"). See the Statement of Additional Information.
International Equity may establish and maintain reserves for temporary defensive
purposes or to enable it to take advantage of buying opportunities. Its reserves
may be invested in domestic as well as foreign short-term money market
instruments including, but not limited to, US and foreign government and agency
obligations, and obligations of supranational entities, certificates of deposit,
bankers' acceptances, time deposits, commercial paper, short-term corporate debt
securities and repurchase agreements. Any money market instruments will be rated
at least A-2/P-2 or better by a nationally recognized statistical rating
organization such as Standard and Poor's or Moody's, or, if unrated, determined
by the Advisor or Subadvisor to be of equivalent credit quality. CWVF
International Equity may also engage in certain options transactions, and enter
into futures contracts and related options for hedging purposes.
Under normal circumstances, CWVF International Equity will invest at least 65%
of its assets in the securities of issuers in no less than three countries,
other than the USA. CWVF International Equity makes investments in various
countries. Under normal circumstances, International Equity may, from time to
time, have more than 25% of its assets invested in any major industrial or
developed country which in the view of the Subadvisor poses no unique investment
risk. The Subadvisor considers an investment in a given foreign country to have
"no unique investment risk" if International Equity's investment in that country
is not disproportionate to the relative size of the country's market versus the
Morgan Stanley Capital International Europe-Far East-Asia (EFEA) or World Index
or other comparable index, and if the capital markets in that country are
mature, and of sufficient liquidity and depth. Under exceptional economic or
market conditions, International Equity may invest substantially all of its
assets in only one or two countries, or in US government obligations. As an
operating policy, CWVF International Equity will limit its investment in
securities of US issuers, excluding Special Equities and High Social Impact
Investments, to 5% of its net assets.
In determining the appropriate distribution of investments among various
countries and geographic regions, the Subadvisor ordinarily will consider the
following factors: prospects for relative economic growth among foreign
countries; expected levels of inflation; relative price levels of the various
capital markets; government policies influencing business conditions; the
outlook for currency relationships and the range of individual investment
opportunities available to the global investor. International Equity may invest
up to 30% of its net assets in developing countries, which involve exposure to
economic structures that are generally less diverse and mature than in the
United States, and to political systems which may be less stable. A country is
considered to be a developing country if it is not included in the Morgan
Stanley Capital International World Index.
CWVF International Equity may may invest up to 35% of its net assets in debt
securities excluding money market instruments. Of this, at least 30% will be of
the highest credit quality available (rated AAA or Aaa by Standard & Poor's
("S&P") or Moody's, respectively, or if not rated by S&P or Moody's, then
determined by the Subadvisor to be of equivalent credit quality). The remaining
5% of Fund assets that may be invested in debt securities may be rated lower
than AAA, although the Subadvisor does not intended to purchase any bonds rated
lower than AAA unless the instrument provides an opportunity to invest in an
attractive company in which an equity investment is not currently available or
desirable. All fixed income instruments are subject to interest-rate risk; that
is, when market interest rates rise, the current principal value of a bond will
decline.
CWVF International Equity may write covered call options and purchase call and
put options on securities and security indices, and may write secured put
options and enter into option transactions on foreign currency. It may also
engage in transactions in financial futures contract and related options for
hedging purposes, and invest in warrants, stock rights and repurchase
agreements. These investment techniques and the related risks are described in
more detail in the Statement of Additional Information.
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. CWVF International Equity may
not write options on more than 50% of its total assets. Management presently
intends to cease writing options in and as long as 25% of such total assets are
subject to outstanding options contracts. CWVF International Equity may invest
up to an aggregate of 5% of its total assets in exchange-traded or
over-the-counter call and put options on securities and securities indices and
foreign currencies. Purchases of such options may be made for the purpose of
hedging against changes in the market value of the underlying securities or
foreign currencies.
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<PAGE>
Lending portfolio securities
CWVF International Equity 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 will not exceed 10%
of assets. Any such loans must be secured continuously in the form of cash or
cash equivalents such as US Treasury bills; the amount of the collateral must on
a current basis equal or exceed the market value of the loaned securities, and
CWVF International Equity must be able to terminate such loans upon notice at
any time. International Equity 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 CWVF International Equity 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.
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, International Equity will make loans of its portfolio
securities only to those firms the Advisor or Subadvisor deems creditworthy and
only on such terms the Advisor or Subadvisor believes should compensate for such
risk. On termination of the loan the borrower is obligated to return the
securities. International Equity will realize any gain or loss in the market
value of the securities during the loan period and may pay reasonable custodial
fees in connection with the loan.
International Equity Fund's investment objective and those policies set forth as
fundamental investment restrictions may not be changed without shareholder
approval.
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Risk Factors - CWVF International Equity
An investment in International Equity is subject to various risks. International
Equity's use of certain investment techniques, such as foreign currency options,
involves special risks. See "Investment Techniques and Related Risks."
There are substantial and different risks involved in investing in foreign
securities. You should consider these risks carefully. For example, there is
generally less publicly available information about foreign companies than is
available about companies in the US Foreign companies are not subject to uniform
audit and financial reporting standards, practices and requirements comparable
to those in the US.
Foreign securities involve currency risks. The US dollar value of a foreign
security tends to decrease when the value of the dollar rises against the
foreign currency in which the security is denominated and tends to increase when
the value of the dollar falls against such currency. Fluctuations in exchange
rates may also affect the earning power and asset value of the foreign entity
issuing the security. Dividend and interest payments may be returned to the
country of origin, based on the exchange rate at the time of disbursement, and
restrictions on capital flows may be imposed. Losses and other expenses may be
incurred in converting between various currencies in connection with purchases
and sales of foreign securities.
Foreign stock markets are generally not as developed or efficient as those in
the US. In most foreign markets volume and liquidity are less than in the US
and, at times, volatility of price can be greater than that in the US. Fixed
commissions on foreign stock exchanges are generally higher than the negotiated
commissions on US exchanges. There is generally less government supervision and
regulation of foreign stock exchanges, brokers and companies than in the US.
There is also the possibility of adverse changes in investment or exchange
control regulations, expropriation or confiscatory taxation, limitations on the
removal of funds or other assets, political or social instability, or diplomatic
developments which could adversely affect investments, assets or securities
transactions of International Equity in some foreign countries. CWVF
International Equity is not aware of any investment or exchange control
regulations which might substantially impair the operations of CWVF
International Equity as described, although this could change at any time.
The dividends and interest payable on certain of International Equity's foreign
securities may be subject to foreign withholding taxes, thus reducing the net
amount available for distribution to International Equity shareholders. The
expense ratio of CWVF International Equity can be expected to be higher than
those of investment companies investing only in domestic securities since the
costs of operations are higher.
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INVESTMENT SELECTION PROCESS
- --------------------------------------------------------------------------------
Investments are selected on the basis of their ability to contribute to the dual
objectives of financial soundness and social criteria.
<PAGE>
Potential investments for a Fund are first screened for financial soundness and
then evaluated according to that Fund's social criteria. To the greatest extent
possible, investments are made in companies exhibiting unusual, positive
accomplishments with respect to one or more of the criteria. Companies must meet
the Fund's minimum standards for all its criteria.
With respect to government securities, CSIF invests primarily in debt
obligations issued or guaranteed by agencies or instrumentalities of the US
Government whose purposes further or are compatible with CSIF's social criteria,
such as obligations of the Student Loan Marketing Association, rather than
general obligations of the US Government, such as Treasury securities.
Although each Fund's social criteria and consideration tend to limit the
availability of investment opportunities more than is customary with other
investment companies, CAMCO and the Subadvisors of the Funds believe there are
sufficient investment opportunities to permit full investment among issuers
which satisfy each Fund's investment and social objectives.
The selection of an organization for investment by a Portfolio does not
constitute endorsement or validation by each Fund, nor does the exclusion of an
organization necessarily reflect failure to satisfy each Fund's social criteria.
Investors in each Fund are invited to send a brief description of companies they
believe might be suitable for investment.
- --------------------------------------------------------------------------------
All Investments are selected with a concern for the social impact of each
investment
CALVERT SOCIAL INVESTMENT FUND
Calvert Social Investment Fund invests in accordance with its philosophy that
long-term rewards to investors will come from those organizations whose
products, services, and methods enhance the human condition and the traditional
American values of individual initiative, equality of opportunity and
cooperative effort.
CSIF has developed the following criteria for the selection of organizations in
which it invests. CSIF recognizes, however, that these criteria represent
standards of behavior which few, if any, organizations totally satisfy and that,
as a matter of practice, evaluation of a particular organization in the context
of these criteria will involve subjective judgment by CAMCO and CSIF's
Subadvisors.
Given these considerations, CSIF seeks to invest in a producer or service
provider which:
1. Delivers safe products and services in ways which sustain our natural
environment. For example, CSIF looks for companies that produce energy from
renewable resources, while avoiding consistent polluters.
2. Is managed with participation throughout the organization in defining and
achieving objectives. For example, CSIF looks for companies that offer
employee stock ownership or profit-sharing plans.
3. Negotiates fairly with its workers, provides an environment supportive of
their wellness, does not discriminate on the basis of race, gender,
religion, age, disability, ethnic origin, or sexual orientation,
does not consistently violate regulations of the Equal Employment Opportunity
Commission, and provides opportunities for women, disadvantaged
minorities, and others for whom equal opportunities have often been
denied. For example, CSIF considers both unionized and non-union firms
with good labor relations.
4. Fosters awareness of a commitment to human goals, such as creativity,
productivity, self-respect and responsibility, within the organization
and the world, and continually recreates a context within which these
goals can be realized. For example, CSIF looks for companies with an above
average commitment to community affairs and charitable giving.
CSIF will not invest in an issuer which the Advisors determine to be
significantly engaged in:
1. The production of nuclear energy or the manufacture of equipment to produce
nuclear energy.
2. Business activities in support of repressive regimes.
3. The manufacture of weapon systems.
CSIF will not, as a matter of operating policy which may be changed without the
approval of a majority of the outstanding shares, invest in an issuer primarily
engaged in the manufacture of alcoholic beverages or tobacco products, or the
operation of gambling casinos.
CSIF believes that social and technological change will continue to transform
America and the world into the next century. Those enterprises which exhibit a
social awareness measured in terms of the above attributes and considerations
should be better prepared to meet future societal needs for goods and services.
By responding to social concerns, these enterprises should maintain flexibility
and further social goals. In so doing they should not only avoid the liability
that may be incurred when a product or service is determined to have a negative
social impact or has outlived its usefulness, but also be better positioned to
develop opportunities to make a profitable contribution to society. These
enterprises should be ready to respond to external demands and ensure that over
the longer term they will be viable to provide a positive return to both
investors and society as a whole.
<PAGE>
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CALVERT WORLD VALUES INTERNATIONAL EQUITY FUND
CWVF International Equity carefully reviews company policies and behavior
regarding social issues important to global quality of life.
CWVF International Equity currently observes the following operating policies
which may be changed by its Board of Directors without shareholder approval:
1. It actively seeks to invest in companies that achieve excellence in both
financial return and environmental soundness, selecting issuers
that take positive steps toward preserving and enhancing our
natural environment through their operations and products, and avoiding
companies with poor environmental records;
2. CWVF International Equity seeks to invest in companies with positive labor
practices. We consider the International Labor Organization's basic
conventions on worker rights as a guideline for our labor criteria.
International Equity avoids investing in companies that
demonstrate a pattern of engaging in forced, compulsory, or child labor. In
addition, we seek to invest in companies that hire and promote women and
ethnic minorities; respect the right to form unions; comply, at a
minimum, with domestic hour and wage laws; and provide good health and
safety standards;
3. International Equity will not invest in issuers which the Advisor or
Subadvisor ascertains contribute to human rights abuses in other
countries;
4. It will not invest in producers of nuclear power or nuclear weapons, or
companies with more than 10% of revenues derived from the production
or sale of weapons systems; and
5. It will not invest in companies which derive more than 10% of revenues from
the production of alcohol or tobacco products, and actively seeks to
invest in companies whose products or services improve the quality of or
access to health care, including public health and preventative medicine.
CWVF International Equity believes that there are long-term benefits inherent in
an investment philosophy that demonstrates concern for the environment, human
rights, economic priorities, and international relations. Those enterprises
which exhibit a social awareness measured in terms of the above attributes and
considerations should be better prepared to meet future societal needs for goods
and services. By responding to social concerns, these enterprises should not
only avoid the liability that may be incurred when a product or service is
determined to have a negative social impact or has outlived its usefulness, but
also be better positioned to develop opportunities to make a profitable
contribution to society. CWVF International Equity believes these enterprises
should be ready to respond to external demands and ensure that over the longer
term they will be viable to provide a positive return to both investors and
society as a whole.
The spirit of Calvert World Values International Equity Fund's social vision is
similar to Calvert Social Investment Fund, but the application of the social
analysis is significantly different. International investing brings unique
challenges in terms of corporate disclosure, regulatory structures,
environmental standards, and differing national and cultural priorities. Due to
these factors, the CWVF social investment standards are less stringent than
those of CSIF. CWVF may invest in companies that operate in countries with poor
human rights records if we believe the companies are making a positive
contribution.
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Special Equities and Private Placements - CSIF and International Equity
Due to the particular social objective of the Funds, opportunities may exist to
promote especially
promising approaches to social goals through privately placed investments. The
Special Equities Committee of each Fund's Board identifies, evaluates, and
selects certain of these investments, subject to ratification by the Boards. The
private placement investments undertaken by the Funds, if any, may be subject to
a high degree of risk. Such investments may involve relatively small and untried
enterprises that have been selected in the first instance because of some
attractive social objectives or policies.
Many private placement investments have no readily available market and may
therefore be considered illiquid. Investments in private placements and other
securities for which market quotations are not readily available are valued
under the direction and control of the Boards.
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High Social Impact Investments - CSIF and International Equity
Each Portfolio may invest a small portion of its respective assets in
investments in securities that offer a rate of return below the then
prevailing market rate and that present attractive opportunities for furthering
the Fund's social criteria ("High Social Impact Investments"); such High Social
Impact investments must be less than 1% of the applicable CSIFPortfolio's
assets, and less than 3% of CWVF International Equity's assets. Such securities
are typically illiquid and unrated and 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
<PAGE>
risk can be reduced, although there can be no assurance that losses will not
occur. The High Social Impact Investments Committee of the Boards identifies,
evaluates, selects and values these investments, subject to ratification by the
Boards.
<PAGE>
YIELD AND TOTAL RETURN
- --------------------------------------------------------------------------------
The Portfolios may advertise different types of yield and total return
performance, which is calculated separately for each class. All performance
figures are based on historical earnings and are not intended to indicate future
performance. Further information about each Portfolio's performance is contained
in its Annual Report to Shareholders, which may be obtained without charge.
- --------------------------------------------------------------------------------
CSIF Money Market Portfolio
The Money Market Portfolio may advertise "yield" and "effective yield." The
"yield" refers to the actual income generated by an investment over a particular
base period, stated in the advertisement. If the base period is less than one
year, the yield will be "annualized." That is, the amount of income generated by
the investment during the base period is assumed to be generated over a one-year
period and is shown as a percentage of the investment. The "effective yield" is
calculated like yield, but assumes reinvestment of earned income. The effective
yield will be slightly higher than the yield because of the compounding effect
of this assumed reinvestment.
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CSIF Bond Portfolio
Yield measures the Bond Portfolio's current investment performance, that is, the
rate of income on its portfolio investments divided by the share price. Yield is
computed by annualizing the result of dividing the net investment income per
share over a 30-day period by the maximum offering price per share on the last
day of that period. Yields are calculated according to accounting methods that
are standardized for all stock and bond funds.
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CSIF Managed Growth, Bond, Equity and CWVF International Equity Portfolios
Total return differs from yield in that yield figures measure only the income
component of a Portfolio's investments, while total return 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 its
dividends and capital gain distributions are reinvested. A cumulative total
return reflects the performance of the class over a stated period of time. An
average annual total return 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 total return usually will
include the effect of paying the sales charge. Of course, total returns will be
higher if sales charges are not taken into account. Quotations of "return
without maximum sales charge" 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.
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FUND MANAGEMENT
- --------------------------------------------------------------------------------
Each Fund is not required to hold annual shareholder meetings, but special
meetings may be called for certain purposes such as electing Trustees or
Directors, changing fundamental policies, or approving a management contract. As
a shareholder, you receive one vote for each share you own. Matters affecting
classes differently, such as Distribution Plans, will be voted on separately by
the affected class(es).
Calvert Social Investment Fund
The Board of Trustees supervises CSIF's activities and reviews its contracts
with companies that provide it with services. CSIF is an open-end
diversified management investment company, organized as a Massachusetts business
trust on December 14, 1981.
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Board of Trustees - Calvert Social Investment Fund
REBECCA ADAMSON
President, First Nations Development Institute
RICHARD L. BAIRD, JR.
Executive Vice President, Family Health Council, Inc.
JOHN G. GUFFEY, JR.
Co-Chair, Calvert Social Investment Foundation
<PAGE>
Treasurer and Director, Silby, Guffey & Co., Inc.
JOY V. JONES, Esq.
Attorney and Entertainment Manager
BARBARA J. KRUMSIEK
President, Chief Executive Officer and Vice Chair, Calvert Group, Ltd. and
subsidiaries
TERRENCE J. MOLLNER, Ed.D.
Founder and Chair, Trusteeship Institute, Inc.
Co-Chair, Calvert Social Investment Foundation
(Ms.) SYDNEY AMARA MORRIS
Unitarian Church of Vancouver, Vancouver, British Columbia, Canada
CHARLES T. NASON
Chairman, President, and Chief Executive Officer, The Acacia Group
D. WAYNE SILBY
President, Secretary, and Director, Silby, Guffey & Co., Inc.
Chair, CSIF Board of Trustees
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Calvert Social Investment Fund Advisory Council
The Advisory Council is a resource to the CSIF Board of Trustees regarding
communication networks for the Fund and the application and refinement of the
Fund's social criteria.
TIMOTHY SMITH
(Chair) Executive Director, Interfaith Center on Corporate Responsibility
ROBERT BROWNE
President, Twenty-First Century Foundation
WILLIAM J. BYNUM
President and CEO, Enterprise Corporation for the Delta
JACK CHIN
Coordinator, Funder's Forum on Environmental Education
FRED DAVIE
Program Officer, Community and Resource Development, Ford Foundation
MARIAN WRIGHT EDELMAN
President & Founder, Children's Defense Fund
MICHAEL FISCHER
Program Officer, William and Flora Hewlett Foundation
ELIZABETH HARRIS
Vice President, UNC Partners, Inc.
SOPHIA BRACEY HARRIS
Founder and Executive Director, The Federation of Childcare Centers of Alabama,
Inc.
JAMES E. HEARD
President, Breakwater Holdings
HAZEL HENDERSON
Independent Futurist and Author
ERICA HUNT
Executive Director, Twenty-First Century Foundation
GRACE LECLAIR
Writer, Consultant and Theorist Concerning the Impacts of Economics on Family
and Community Life
KAI LEE
Professor of Environmental Studies and Director of the Center for Environmental
Studies,Williams College
JESSICA LIPNACK
President, The Networking Institute, Inc.
ROBERT CARTER RANDOLPH
Attorney and Mediator/Arbitrator
Washington Arbitration and Mediation Service
<PAGE>
RUSTUM ROY
Professor of Geochemistry, Pennsylvania State University
BYRON RUSHING
State Representative, Massachusetts
MARC DAVID SARKADY
Leadership Consultant and International Facilitator
GAIL SNOWDEN
Group Executive, Community Banking Group, Bank of Boston
JEFFREY STAMPS
Chairman, The Networking Institute, Inc.
THOMAS STONEBACK
Vice President and Chief Administrative Officer, Rodale Press, Inc.
DARRELD RAY TURNER, II
Policy Advisor, Cherokee Nation of Oklahoma
DIANE WHITE
Owner, Blackberry
D. Wayne Silby, Chair of CSIF's Board of Trustees, serves as an ex officio
member of the Advisory Council.
- --------------------------------------------------------------------------------
Calvert World Values International Equity Fund
The Board of Directors supervises CWVF's activities and reviews its contracts
with companies that provide CWVF with services.
CWVF is an open-end diversified management investment company organized as a
Maryland corporation on February 14, 1992. Prior to June 1, 1996,
International Equity operated under the name of Calvert World Values Global
Equity Fund. The other series of Calvert World Values Fund, Inc. is Calvert
Capital Accumulation Fund.
Board of Directors - Calvert World Values Fund, Inc.
JOHN G. GUFFEY, JR.
Vice Chair of the CWVF Board of Directors
Co-Chair, Calvert Social Investment Foundation
Treasurer and Director, Silby, Guffey & Co., Inc.
BARBARA J. KRUMSIEK
Co-Chair of the CWVF Board of Directors
President, Chief Executive Officer and Vice Chair, Calvert Group, Ltd. and
subsidiaries
TERRENCE J. MOLLNER, Ed.D.
Founder and Chair, Trusteeship Institute, Inc.
Co-Chair, Calvert Social Investment Foundation
RUSTUM ROY
Evan Pugh Professor of Solid State Geochemistry, Pennsylvania State University
D. WAYNE SILBY
President, Secretary, and Director, Silby, Guffey & Co., Inc.
Co-Chair of the CWVF Board of Directors
TESSA TENNANT
Green and ethical investing Manager, National Provident Investment Managers Ltd.
MUHAMMAD YUNUS
Managing Director, Grameen Bank, Bangladesh
- --------------------------------------------------------------------------------
Calvert Asset Management Company, Inc. serves as Advisor to the Funds.
Calvert Asset Management Company, Inc. ("CAMCO") is each Fund's investment
advisor. CAMCO 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 Trustees/Directors
who are employees of CAMCO or its affiliates. CAMCO 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.
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<PAGE>
Calvert Group is one of the largest investment management firms in the
Washington, D.C. area.
Calvert Group, Ltd., parent of CAMCO, each Fund's 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 of over $5
billion and more than 200,000 shareholder and depositor accounts.
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Portfolio Managers
CSIF Managed Growth Portfolio
The Managed Growth Portfolio is managed by multiple investment subadvisors. With
the multi-manager approach, there will be several investment strategies in place
at any given time in order to help the Portfolio pursue its investment
objectives. The Managed Growth Portfolio may employ "growth managers," who
generally concentrate on stocks that have demonstrated, or are expected to
produce, earnings growth rates significantly greater than the market as a whole,
as well as "value managers," who tend to make stock selections on the basis of
perceived relative value as determined by a defined model in a bottom-up
approach.
CAMCO manages the fixed-income portion of the Portfolio and has retained NCM
Capital Management Group, Inc. ("NCM") and Brown Capital Management, Inc.
("Brown") as subadvisors for the equity portion of the Portfolio.
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CAMCO
CAMCO utilizes a team approach to the management of the fixed-income assets of
the Managed Growth Portfolio. CAMCO has actively managed these assets since July
1995. Prior to this, the fixed-income assets were managed by US Trust as a
Subadvisor with CAMCO providing oversight. Reno J. Martini, Senior Vice
President and Chief Investment Officer, heads this team and oversees the
management of all Calvert portfolios for CAMCO. Mr. Martini has over 19 years of
experience in the securities industry and has been the head of the asset
management team since 1985.
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NCM Capital Management Group, Inc.
NCM Capital Management Group, Inc. has managed a part of the equity portion of
the Managed Growth Portfolio since July 1, 1995. NCM was founded by Maceo K.
Sloan in 1986 as a subsidiary of North Carolina Mutual Life Insurance Company,
which was established by Mr. Sloan's ancestors in 1898 and is one of the oldest
and largest minority-owned financial institutions in the country. NCM has been
an employee-owned subsidiary of Sloan Financial Group since 1991. Maceo K.
Sloan, CFA, FLMI, is the Chairman, President, Chief Executive Officer, and Chief
Investment Officer. Sixty percent of Sloan Financial Group is co-owned by Mr.
Sloan and Justin E. Beckett, who is Executive Vice President and a Director of
NCM. NCM is one of the largest minority-owned investment management firms in the
country, and provides products in equity, fixed income and balanced portfolio
management. It is also one of the industry leaders in the employment and
training of minority and women investment professionals.
NCM's portfolio management team consists of several members, headed by Maceo K.
Sloan and Clifford D. Mpare. Maceo K. Sloan, CFA, FLMI, is Chairman, President,
Chief Executive Officer, and Chief Investment Officer of the company. He
received a BA from Morehouse College, and MBA from Georgia State University, and
a JD from North Carolina Central University. He is a Chartered Financial Analyst
and Fellow of the Life Management Institute. Mr. Sloan is a regular panelist on
the PBS program Wall Street Week in Review and has been a panelist and chaired
several conferences concerning investment opportunities in South Africa, such as
the RCB International Seminar and the Pensions 2000 on South Africa.
Clifford D. Mpare, CFA, CMA, is Senior Vice President and Director of
Investments. He received his BComm from St. Mary's University and an MBA from
Dalhousie University. He is a Chartered Financial Analyst and a Certified
Management Accountant.
- --------------------------------------------------------------------------------
Brown Capital Management, Inc.
Brown Capital Management, Inc. of 809 Cathedral Street, Baltimore, Maryland, has
managed part of the equity portion of the Managed Growth Portfolio since
September 30, 1996. Brown Capital Management, Inc. 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.
The firm concentrates on mid-/large-cap growth stocks.
<PAGE>
Asset management by Brown Capital Management, Inc. is by a team headed by Eddie
C. Brown. Eddie C. Brown, Portfolio Manager, is founder and President of Brown
Capital Management. He has over 23 years of investment experience, having served
as Vice President and Portfolio Manager for 10 years at T. Rowe Price Associates
immediately prior to starting his own firm. Mr. Brown holds a BS in Electrical
Engineering from Howard University, an MS in Business Administration from the
Indiana University School of Business. He is a professionally-designated
Chartered Financial Analyst and Chartered Investment Counselor, and an inductee
into the "Wall Street Week Hall of Fame," and a member of The President's
Roundtable.
- --------------------------------------------------------------------------------
CSIF Bond Portfolio
CAMCO utilizes a team approach to the management of the fixed-income assets of
the Bond Portfolio. CAMCO has actively managed these assets since March 1997.
Prior to this, the fixed-income assets were managed by US Trust as a Subadvisor
with CAMCO providing oversight. Reno J. Martini, Senior Vice President and Chief
Investment Officer, heads this team and oversees the management of all Calvert
portfolios for CAMCO. Mr. Martini has over 19 years of experience in the
securities industry and has been the head of the asset management team since
1985.
- --------------------------------------------------------------------------------
CSIF Equity Portfolio
Loomis, Sayles & Company, L.P.
Loomis, Sayles & Company, L.P. is the Subadvisor to the Equity Portfolio. A
private investment counsel firm founded in 1926, Loomis, Sayles is organized as
a limited partnership, controlled by New England Mutual Life Insurance Company.
The principal business address of Loomis, Sayles is One Financial Center,
Boston, Massachusetts 02111.
Philip J. Schettewi, Managing Partner, Vice President, and Chief Portfolio
Strategist of Loomis, Sayles & Company, L.P., is the portfolio manager for the
Equity Portfolio. Mr. Schettewi is a Chartered Financial Analyst, and has 16
years experience in the investment business.
- --------------------------------------------------------------------------------
CWVF International Equity Fund
Murray Johnstone International, Ltd.
Murray Johnstone International, Ltd. ("Murray Johnstone") is the Subadvisor to
the CWVF International Equity Fund. Its principal business office in the US is
875 N. Michigan Avenue, Suite 3415, Chicago, Illinois 60611. CAMCO may manage
the US dollar portion of the Fund's cash reserves. CAMCO will continuously
monitor and evaluate the performance and investment style of the Subadvisor. The
Subadvisor is a wholly-owned subsidiary of United Asset Management Company.
Andrew Preston, International Equity's Portfolio Manager, studied at Melbourne
University in Australia and Ritsumeikan University in Japan prior to working for
the Australian Department of Foreign Affairs. He joined Murray Johnstone in
1985, as an analyst in the UK and US departments, became Fund Manager in the
Japanese Department, played a prominent role in the establishment and operation
of Yamaichi-Murray Johnstone, and then began to support Murray Johnstone's
growing US business.
- --------------------------------------------------------------------------------
Calvert Social Investment Fund Advisory Fees
CAMCO receives a fee based on a percentage of CSIF's assets, and for the Managed
Growth and Equity Portfolios only, a performance (+ or -) fee as well. From
this, CAMCO pays the Subadvisors where applicable.
For its services during fiscal year 1997, CAMCO was entitled to and did receive,
pursuant to the Investment Advisory Agreement, 0.50% of the Money Market
Portfolio's average daily net assets. It also received 0.59% of the Bond
Portfolio's, 0.55% of the Equity Portfolio's (after performance adjustment), and
0.60% of the Managed Growth Portfolio's (after performance adjustment) average
daily net assets as investment advisory fees. With respect to the Bond Portfolio
for the period March 1, 1997 to February 29, 2000, the Advisor has voluntarily
agreed to limit its investment advisory fee to 0.55% of the Bond Portfolio's
average daily net assets.
Investment selections for the fixed-income assets of the CSIFManaged Growth
Portfolio are made by CAMCO. The Subadvisors make the investment selections for
the remaining assets. Subadvisory fees are paid by CAMCO and are equal to a base
fee of 0.25% of the Managed Growth Portfolio's average daily net assets, plus or
minus a performance fee as set forth in the table above. Payment (or
subtraction) of a Performance Fee is conditioned on (1) the performance of the
Portfolio as a whole having exceeded (or trailed) The Lipper Balanced Fund Index
("Fund Index") during the Performance Period; and (2) payment of the Performance
Fee not causing the Portfolio's performance to fall below the Fund Index.
<PAGE>
The Investment Advisory Agreement between CSIF and CAMCO, with respect to the
Managed Growth Portfolio, provides that CAMCO is entitled to a base annual fee
("Base Fee"), payable monthly, of 0.70% of the Portfolio's average daily net
assets. CAMCO may earn (or have its base fee reduced by) a performance
adjustment ("Performance Fee") based on the extent to which performance of the
Managed Growth Portfolio exceeds or trails the Relevant Index. The Relevant
Indices are as follows:
CAMCO: Lehman Aggregate Bond Index
NCM: Russell 3000
Brown: Standard & Poors 500 Stock Index
Performance versus Performance
the Relevant Index Fee Adjustment
- --------------------------------------------------------------------------------
6% to < 12% 0.05%
12% to < 18% 0.10%
18% or more 0.15%
Loomis, Sayles makes investment selections for the Equity Portfolio. It receives
a subadvisory fee from CAMCO equal to a base fee of 0.25% of the Equity
Portfolio's average daily net assets, plus or minus a performance fee as set
forth in the table above. Loomis, Sayles also receives a 0.05% fee, paid by
CAMCO (not CSIF) for its assistance with the distribution of CSIF.
The Investment Advisory Agreement between CAMCO and CSIF, with respect to the
Equity Portfolio, provides that CAMCO is entitled to a base annual fee, payable
monthly, of 0.70% of the Portfolio's average daily net assets. CSIF pays a
monthly performance fee of plus or minus 0.20%, based on the extent to which
performance of the Equity Portfolio exceeds or trails the S&P's 500 Composite
Index:
Performance versus Performance
the S&P's 500 Composite Index Fee Adjustment
- --------------------------------------------------------------------------------
6% to < 12% 0.07%
12% to < 18% 0.14%
18% or more 0.20%
Prior to March 1, 1997, US Trust made investment selections for the CSIF Bond
Portfolio pursuant to an Investment Subadvisory Agreement with CAMCO. For fiscal
1997, CAMCO paid US Trust a fee of 0.20% of the assets of the Bond Portfolio.
CWVF International Equity Fund Advisory Fees
The Investment Advisory Agreement between CWVF International Equity Fund and
CAMCO provides that CAMCO is entitled to an annual fee, payable monthly, of
1.00% of International Equity's average daily net assets. For the year ended
September 30, 1997, CAMCO received fees of 1.00% of the average daily net
assets. CAMCO may, in its discretion, defer its fees or assume International
Equity's operating expenses. The Investment Advisory Agreement provides that
CAMCO may later, to the extent permitted by law, recapture any fees it deferred,
or expenses it assumed during the two prior years. During the 1997 fiscal year,
CAMCO did not recapture fees.
The Investment Subadvisory Agreement between CAMCO and Murray Johnstone provides
that Murray Johnstone is entitled to a subadvisory fee of 0.45% of CWVF
International Equity Fund's average daily net assets it manages. Murray
Johnstone's fee is paid by CAMCO, not CWVF. Murray Johnstone also receives a
0.05% fee, paid by CAMCO (not CWVF) for its assistance with the distribution of
CWVF International Equity Fund.
- --------------------------------------------------------------------------------
Calvert Distributors, Inc. serves as underwriter to market each Funds' shares.
Calvert Distributors, Inc. ("CDI") is the principal underwriter and distributor
for each Fund. Under the terms of its underwriting agreement with the Funds, CDI
markets and distributes the Funds' shares and is responsible for preparing
advertising and sales literature, and printing and mailing prospectuses to
prospective investors.
- --------------------------------------------------------------------------------
Calvert Administrative Services Company provides administrative services for
CWVF International Equity.
Calvert Administrative Services Company ("CASC"), an affiliate of CAMCO,
provides certain administrative services to International Equity, 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 CWVF International
Equity of 0.10% of its aggregate daily net assets, with a minimum fee of $40,000
per year.
- --------------------------------------------------------------------------------
The transfer agent keeps your account records.
<PAGE>
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
- --------------------------------------------------------------------------------
OPENING AN ACCOUNT
- --------------------------------------------------------------------------------
You can buy shares of CSIFor CWVF in several ways which are described here and
in the chart below.
An account application accompanies this prospectus. A completed and signed
application is required for each new account you open, regardless of the method
you choose for making your initial investment. Additional forms may be required
from corporations, associations, and certain fiduciaries. If you have any
questions or need extra applications, call your broker, or Calvert Group at
800-368-2748. Be sure to specify which Fund and class you wish to purchase.
To invest in any of Calvert's tax-deferred retirement plans, please call
Calvert Group at 800-368-2748 to receive information and the required
separate application.
Alternative Sales Options
CSIF Managed Growth, CSIF Bond, CSIF Equity, and CWVF International Equity each
offer 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 (four years for CSIF Bond). Class B shares will
automatically convert to Class A shares at the end of eight calendar years after
purchase (six calendar years for CSIF Bond).
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.
Each Portfolio bears some of the costs of selling its shares under Distribution
Plans adopted with respect to its Class A, B and Class C shares pursuant to Rule
12b-1 under the 1940 Act. Payments under the Class A Distribution Plan are
limited to 0.35% annually of the average daily net asset value of Class A
shares, while payments under the Class B and C Distribution Plan are 1.00% of
the average daily net asset value of Class B and C shares, respectively.
- --------------------------------------------------------------------------------
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 C shares, as a result of the distribution expenses described above.
(See also "Yield and Total Return.") You should consider Class A shares if you
qualify for a reduced sales charge under Class A or if you plan to hold the
shares for several years. The Portfolio will not normally accept any purchase of
Class B shares in the amount of $250,000 or more. Class C shares are not
available for investments of $1 million or more. Brokers or others may receive
different levels of compensation depending on which class of shares they sell.
- --------------------------------------------------------------------------------
Class A Shares - CSIF Managed Growth, CSIF Equity, and CWVF International Equity
Portfolios
Class A shares are offered at net asset value plus a front-end sales charge as
follows:
<TABLE>
<CAPTION>
As a % of Allowed to Amount of As a % of net
Amount of Brokers as a % of
Investment offering price invested offering price
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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%
<PAGE>
$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%*
CSIF Bond Portfolio
Class A shares are offered at net asset value plus a front-end sales charge as follows:
<CAPTION>
As a % of Allowed to Amount of As a % of net
Amount of Brokers as a % of
Investment offering price invested offering price
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment offering price invested offering price
Less than $50,000 3.75% 3.90% 3.00%
$50,000 but less than $100,000 3.00% 3.09% 2.25%
$100,000 but less than $250,000 2.25% 2.30% 1.75%
$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%*
</TABLE>
*CDI may pay the dealer a finder's fee of up to 0.50% (0.25% for CSIF Bond) of
the amount of purchase on purchases of over $1 million. If paid, CDI reserves
the right to recoup any portion of the amount paid to the dealer if the investor
redeems some or all shares within twelve months of the time of purchase.
- --------------------------------------------------------------------------------
CSIF Managed Growth, Bond and Equity Portfolios, and CWVF International Equity:
Front-end sales charges on 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 brokers with whom it has dealer
agreements, CDI may reallow up to the full applicable sales charge. Brokers 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, 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
CSIFand CWVF have adopted a Distribution Plan with respect to Class A shares
(the "Class A Distribution Plan"), which provides for payments at a maximum
annual rate of 0.35% (0.25% for the CSIF Money Market Portfolio) 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 Funds
to CDI under the Class A Distribution Plan are used to pay to brokers 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. For the fiscal
year ended September 30, 1997, the Managed Growth, Bond, and Equity Portfolios
of CSIF paid Class A Distribution Plan expenses of 0.24%, 0.20%, and 0.23% of
average net assets, respectively. CSIF Money Market Portfolio did not pay any
Distribution Plan expenses in fiscal 1997. For the same period, CWVF
International Equity paid Class A Distribution Plan expenses of 0.25% of average
net assets.
<PAGE>
Class B Shares
Class B shares are offered at net asset value, without a front-end sales charge.
With certain exceptions, the Portfolio will impose a deferred sales charge at
the time of redemption as follows:
<TABLE>
<CAPTION>
Contingent Deferred Sales
Charge As A Percentage of Redemption During Net Asset Value At
Redemption
- ------------------------------------------------------------------------------------------------------------------
CSIF Managed Growth,Equity
and CWVF International CSIFBond
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1st year since purchase 5% 4%
2nd year since purchase 4% 3%
3rd year since purchase 4% 2%
4th year since purchase 3% 1%
5th year since purchase 2% None
6th year since purchase 1% None
7th year since purchase and thereafter None None
</TABLE>
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 (six years
for CSIF Bond Portfolio) 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
CSIF and CWVF have adopted a Distribution Plan with respect to 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 Funds under
the Class B Distribution Plan are currently used by CDI to pay others (1) a
commission at the time of purchase of up to 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 brokers. Class C shares are offered
at net asset value, without a front-end sales charge. With certain exceptions,
CSIFand CWVF may 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
CSIF and CWVF have adopted a Distribution Plan with respect to 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
each Fund under the Class C Distribution Plan are currently used by CDI to pay
brokers 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 as described above under "Class A Distribution Plan," of up to
0.25%, of the average daily net asset value of each share sold by such others.
For the 1997 fiscal year, the Class C Distribution Plan expenses for CSIF
Managed Growth and Equity Portfolios and CWVF International Equity were 1.00% of
average net assets for each.
- --------------------------------------------------------------------------------
<PAGE>
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 four years for CSIF Bond Class B; more than one year
for Class C for all funds) 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 brokers employing registered
representatives who have sold or are expected to sell a minimum dollar amount of
shares of the Funds and/or shares of other Funds underwritten by CDI. CDI may
make expense reimbursements for special training of a broker's registered
representatives, advertising or equipment, or to defray the expenses of sales
contests. All such payments will be in compliance with NASD rules. CDI will
offer a full reallowance of the Class A sales charge on CWVF International
Equity to The Advisors Group, on sales from April 1 through August 31, 1998.
<TABLE>
<CAPTION>
HOW TO BUY SHARES
(BE SURE TO SPECIFY WHICH CLASS YOU ARE BUYING)
- ------------------------------------------------------------------------------------------
METHOD NEW ACCOUNTS ADDITIONAL INVESTMENTS
- ------------------------------------------------------------------------------------------
<S> <C> <C>
BY MAIL $2,000 minimum (CWVF) $250 minimum
$1,000 minimum (CSIF)
Please make your check payable Please make your check payable
to the Fund and mail it to the Fund and mail it
with your application to: with your investment slip to:
Calvert Group Calvert Group
P.O. Box 419544 P.O. Box 419739
Kansas City, MO 64141-6544 Kansas City, MO 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 64105-1807 Kansas City, MO 64105-1807
- ------------------------------------------------------------------------------------------
THROUGH YOUR $2,000 minimum (CWVF) $250 minimum
FINANCIAL PROFESSIONAL $1,000 minimum (CSIF)
- ------------------------------------------------------------------------------------------
AT THE CALVERT Visit the Calvert Branch Office to make investments by check.
OFFICE See the back cover page for the address.
- ------------------------------------------------------------------------------------------
FOR ALL OPTIONS BELOW, PLEASE CALL YOUR FINANCIAL PROFESSIONAL
OR CALVERT GROUP AT 800-368-2745
- ------------------------------------------------------------------------------------------
BY EXCHANGE $2,000 minimum (CWVF) $250 minimum
(FROM YOUR $1,000 minimum (CSIF)
ACCOUNT IN When opening an account by exchange, your new account must
ANOTHER CALVERT be established with the same name(s), address and taxpayer
GROUP FUND) identification number as your existing Calvert account.
<PAGE>
- --------------------------------------------------------------------------------
BY BANK WIRE $2,000 minimum (CWVF) $250 minimum
$1,000 minimum (CSIF)
- --------------------------------------------------------------------------------
BY CALVERT MONEY Not Available $50 minimum
CONTROLLER* for Initial Investment
</TABLE>
*Please allow sufficient time for Calvert Group to process your initial request
for this service, normally 10 business days. The maximum transaction amount is
$300,000, and your purchase request must be received by 4:00 p.m. Eastern time.
<PAGE>
NET ASSET VALUE
- --------------------------------------------------------------------------------
CSIF Money Market Portfolio shares are sold without a sales charge.
Money Market Portfolio: The price of one share is its "net asset value," or
"NAV." NAV is computed by adding the value of the Portfolio's investments plus
cash and other assets, deducting liabilities and then dividing the result by the
number of shares outstanding. The securities are valued according to the
"amortized cost" method, which is intended to stabilize the NAV at $1.00 per
share.
- --------------------------------------------------------------------------------
CSIF Managed Growth, Bond, and Equity Portfolios, and CWVF International Equity
Fund: Net asset value, or "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. 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 as of the close of each business day, which coincides with
the closing of the regular session of the New York Stock Exchange (normally 4:00
p.m. Eastern time). Each Fund is 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). The
CSIF Money Market Portfolio may send monthly statements in lieu of immediate
confirmations of purchases and redemptions.
- --------------------------------------------------------------------------------
WHEN YOUR ACCOUNT WILL BE CREDITED
- --------------------------------------------------------------------------------
Before you buy shares, please read the following information to make sure your
investment is accepted and credited properly.
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 is not paid, 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, those funds will be on hold for up to 10
business days from the date of receipt. During that period, the proceeds of
redemptions against those funds will be held until the transfer agent is
reasonably satisfied that the purchase payment has been collected. Drafts
written on the CSIF Money Market Portfolio against such funds will be returned
for uncollected funds. To avoid this collection 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.
- --------------------------------------------------------------------------------
CSIF Money Market Portfolio
Your purchase will be processed at the net asset value calculated after your
order is received and accepted. If your wire purchase is received by 5:00 p.m.
Eastern time, your account will begin earning dividends on the next business
day. Exchanges begin earning dividends the next business day after the exchange
request is received by mail or telephone. Purchases received by check will begin
earning dividends the next business day after they are processed to the account.
CSIF Managed Growth, Bond, and Equity Portfolios and CWVF International Equity
Your purchase will be processed at the next offering price based on the next net
asset value calculated for the applicable shares after your order is received
and accepted.
Certain financial institutions or broker/dealers which have entered into a sales
agreement with the Distributor 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 could be held liable for resulting fees or
losses.
- --------------------------------------------------------------------------------
EXCHANGES
- --------------------------------------------------------------------------------
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 on the
transaction.
<PAGE>
If your investment goals change, the Calvert Group of Funds has a variety of
investment alternatives that includes common stock funds, tax-exempt and
corporate bond funds, and money market funds. The exchange privilege is a
convenient way to buy shares in other Calvert Group Funds in order to respond to
changes in your goals or in market conditions. Before you make an exchange from
a Fund or Portfolio, please note the following:
- - Call your broker or a Calvert representative for information and a
prospectus for any of Calvert's other Funds registered in your state. Read
the prospectus of the Fund or Portfolio into which you want to exchange for
relevant information, including class offerings.
- - Complete and sign an application for an account in that Fund or Portfolio,
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.
- - You may exchange shares on which you have already paid a sales charge at
Calvert Group and shares acquired by reinvestment of dividends or
distributions into another fund at no additional charge. Shares may only
be exchanged for shares of the same class of another Calvert Group Fund.
- - 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 any
6-month period will be given written notice that they may be prohibited
from making additional investments. This policy does not prohibit a
shareholder from redeeming shares of any Fund, and does not apply to trades
solely among money market funds.
- - The Funds reserve the right to terminate or modify the exchange privilege
in the future upon 60 days' written notice.
- --------------------------------------------------------------------------------
OTHER CALVERT GROUP SERVICES
- --------------------------------------------------------------------------------
Calvert Information Network
24 hour yield and prices.
Calvert has round-the-clock telephone service and a website at
http://www.calvertgroup.com that lets existing customers obtain prices, yields,
account balances, and, by telephone only, authorize certain transactions.
<PAGE>
Calvert Money Controller
Calvert Money Controller eliminates the delay of mailing a check or the expense
of wiring funds. You can request this free service on your application.
This service allows you to authorize electronic transfers of money to purchase
or sell shares. You use Calvert Money Controller like an "electronic check" to
move money ($50 to $300,000) between your bank account and your Calvert Group
account with one phone call. Allow one or two business days after the call for
the transfer to take place; for money recently invested, allow normal check
clearing time (up to 10 business days) before redemption proceeds are sent to
your bank.
You may also arrange systematic monthly or quarterly investments (minimum $50)
into your Calvert Group account. After you give us proper authorization, your
bank account will be debited to purchase shares. A debit entry will appear on
your bank statement. If you would like to make arrangements for systematic
monthly or quarterly redemptions from your Calvert Group account, call your
broker or Calvert for more information.
- --------------------------------------------------------------------------------
Telephone Transactions
Calvert may record all telephone calls.
If you have telephone transaction privileges, you may purchase, redeem, or
exchange shares, wire funds and use Calvert Money Controller by telephone. You
automatically have telephone privileges unless you elect otherwise. The Funds,
the transfer agent, the shareholder servicing agent, and their affiliates are
not liable for acting in good faith on telephone instructions relating to your
account, so long as they follow reasonable procedures to determine that the
telephone instructions are genuine. Such procedures may include recording the
telephone calls and requiring some form of personal identification. You should
verify the accuracy of telephone transactions immediately upon receipt of your
confirmation statement.
- --------------------------------------------------------------------------------
Optional Services
Complete the account application for the easiest way to establish services.
The easiest way to establish optional services on your Calvert Group account is
to select the options you desire when you complete your account application. If
you wish to add other options later, you may have to provide us with additional
information and a signature guarantee. Please call your broker or Calvert
Investor Relations at 800-368-2745 for further assistance. For our mutual
protection, we may require a signature guarantee on certain written transaction
requests. A signature guarantee verifies the authenticity of your signature, and
may be obtained from any bank, savings and loan association, credit union, trust
company, broker/dealer firm or member of a domestic stock exchange. A signature
guarantee cannot be provided by a notary public.
- --------------------------------------------------------------------------------
Householding of General Mailings
Householding reduces expenses while saving paper and postage expense.
If you have multiple accounts with Calvert, you may receive combined mailings of
some shareholder information, such as statements, confirmations, prospectuses,
semi-annual and annual reports. Please contact Calvert Investor Relations at
800-368-2745 to receive additional copies of information.
- --------------------------------------------------------------------------------
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. You may be required to pay a research fee for these special
services. If you are purchasing shares of a Fund 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.
- --------------------------------------------------------------------------------
Tax-Saving Retirement Plans
Contact Calvert Group for complete information kits discussing the plans, and
their benefits, provisions and fees.
Calvert Group can set up your new account under one of several tax-deferred
plans. These plans let you invest for retirement and shelter your investment
income from current taxes. Minimums may differ from those listed in the "How to
Buy Shares" chart. Also, reduced sales charges may apply. See "Exhibit A -
Reduced Sales Charges."
- - 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.
<PAGE>
- - 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-IRA): 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.
- --------------------------------------------------------------------------------
SELLING YOUR SHARES
- --------------------------------------------------------------------------------
You may redeem all or a portion of your shares on any business day. Your shares
will be redeemed at the next net asset value calculated after your redemption
request is received (less any applicable CDSC). See below for specific
requirements necessary to make sure your redemption request is acceptable.
Remember that the Funds may hold payment on the redemption of your shares until
reasonably satisfied that investments made by check or by Calvert Money
Controller have been collected (normally up to 10 business days).
Redemption Requirements To Remember
To ensure acceptance of your redemption request, please follow the procedures
described here and below.
Once your shares are redeemed, 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. 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.
- --------------------------------------------------------------------------------
CSIF Money Market Portfolio
If you sell shares by telephone or written request, you will receive dividends
through the date the request is received and processed. If you write a draft to
sell shares, the shares will earn dividends until the draft is presented to the
Portfolio to be paid.
Minimum account balance is $1,000 per Portfolio.
Please maintain a balance in each of your accounts of at least $1,000. If the
balance in your CSIF Money Market account falls below the $1,000 minimum during
a month, a $3 fee will be charged to your account. This fee is paid to the
portfolio to offset the generally higher costs of small dollar accounts.
Accounts in other portfolios which have a balance of less than $1,000 may be
closed and the proceeds mailed to the address of record. You will be given a
notice that your account is below the minimum and closed after 30 days if the
balance is not brought up to the required minimum amount.
- --------------------------------------------------------------------------------
HOW TO SELL YOUR SHARES
- --------------------------------------------------------------------------------
Draftwriting (CSIF Money Market Portfolio only)
You may redeem shares in your CSIF Money Market Portfolio account by writing a
draft for at least $250. If you complete and return the signature card for
Draftwriting, the Portfolio will mail bank drafts to you, printed with your name
and address. Generally, there is no charge to you for the maintenance of this
service or the clearance of drafts, but CSIF Money Market will charge a service
fee for drafts returned for insufficient funds. CSIF Money Market will charge
$25 for any stop payment on drafts. As a service to shareholders, shares may be
automatically transferred between your Calvert accounts to cover drafts you have
written. The signature of only one authorized signer is required to honor a
draft.
- --------------------------------------------------------------------------------
By Mail To: Calvert Group P.O. Box 419544 Kansas City, MO 64141-6544.
You may redeem available shares from your account at any time by sending a
letter of instruction, including your name, account and Portfolio number, the
number of shares or dollar amount, and where you want the money to be sent.
Additional requirements, below, may apply to your account. The letter of
instruction must be signed by all required authorized signers. If you want the
money to be wired to a bank not previously authorized, a voided bank check must
be enclosed with your letter. To add instructions to wire to a destination not
previously established, or if you would like funds sent to a different address
or another person, your letter must be signature guaranteed.
- --------------------------------------------------------------------------------
<PAGE>
Type of Registration Requirements
- --------------------------------------------------------------------------------
Corporations, Letter of instruction and corporate resolution, signed
Associations by person(s)authorized to act on the account,
accompanied by signature guarantee(s).
Trusts Letter of instruction signed by the Trustee(s) (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.)
- --------------------------------------------------------------------------------
By Telephone
Please call 800-368-2745. You may redeem shares from your account by telephone
and have your money mailed to your address of record or wired to a bank you have
previously authorized. A charge of $5 is imposed on wire transfers of less than
$1,000. See "Telephone Transactions."
<PAGE>
Calvert Money Controller - Automatic Investment Plan
Please allow sufficient time for Calvert Group to process your initial request
for this service (normally 10 business days). You may also authorize automatic
fixed amount redemptions by Calvert Money Controller. All requests must be
received by 4:00 p.m. (Eastern time). Accounts cannot be closed by this service.
Unless they otherwise qualify for a waiver, Class B or Class C shares redeemed
by Calvert Money Controller will be subject to the Contingent Deferred Sales
Charge.
- --------------------------------------------------------------------------------
Exchange to Another Calvert Group Fund
You must meet the minimum investment requirement of the other Calvert Group Fund
or Portfolio. You can only exchange between accounts with identical names,
addresses and taxpayer identification number, unless previously authorized with
a signature-guaranteed letter.
- --------------------------------------------------------------------------------
Systematic Check Redemptions
If you maintain an account with $10,000 or more, you may have up to two (2)
redemption checks sent to you on the 15th of each month, simply by sending a
letter with all the information, including your account number, and the dollar
amount ($100 minimum). 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.
- --------------------------------------------------------------------------------
Through your Broker
If your account is held in your broker's name ("street name"), you should
contact your broker directly to transfer, exchange or redeem shares.
- --------------------------------------------------------------------------------
DIVIDENDS AND TAXES
- --------------------------------------------------------------------------------
Each year, the Funds distribute substantially all of the net investment income
to shareholders.
Dividends from CSIF Money Market Portfolio's net investment income are accrued
daily and paid monthly. The CSIF Managed Growth Portfolio pays dividends
quarterly, CSIF Bond Portfolio pays dividends monthly, and CSIF Equity Portfolio
andCWVF International Equity Fund pay dividends 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 net asset value (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 with the same
account number in any other Calvert Group Fund at net asset value. If reinvested
in the same Fund account, new shares will be purchased at net asset value 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 six months, 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 each class of CSIFManaged Growth,
Bond, and Equity Portfolios and CWVF International Equity 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
<PAGE>
In January, each Portfolio 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.
- --------------------------------------------------------------------------------
CSIF Managed Growth, Bond, and Equity Portfolios and CWVFInternational Equity
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.
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:
1. has been in existence for more than six months,
2. has a purpose other than acquiring shares at a discount, and
3. 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.
<PAGE>
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 I.R.C. of 1986, as amended, or for a plan
qualifying under section 403(b) or 401(k) of the Code if, at the time of
purchase a) 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 b) 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."
- --------------------------------------------------------------------------------
Established Accounts
Shares of the CSIF Managed Growth Portfolio may be sold at net asset value to
you if your account was established on or before July 17, 1986.
- --------------------------------------------------------------------------------
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 net asset value ("NAV")
Except for money market funds, if you make a purchase at NAV, you may exchange
that amount to another fund at no additional sales charge.
- --------------------------------------------------------------------------------
Reinstatement Privilege
If you redeem shares and then within 30 days decide to reinvest in the same Fund
or Portfolio, 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
January 31, 1998, Revised March 31, 1998
CALVERT SOCIAL INVESTMENT FUND
CALVERT INTERNATIONAL EQUITY 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 Website
http://www.calvertgroup.com
Principal Underwriter
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
<PAGE>
PROSPECTUS March 31, 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(1) 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.
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.
(1) Currently those with a total capitalization of less than $1 billion at the
time of the Fund's initial investment.
1
<PAGE>
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 March 31, 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.
<TABLE>
<CAPTION>
FUND EXPENSES
Capital Accumulation New Vision
Fund Small Cap Fund
<S> <C> <C> <C> <C> <C> <C>
A. Shareholder Transaction Costs Class A Class B Class C Class A Class B Class C
Maximum Front-End Sales Charge on
Purchases (as a percentage of offering price) 4.75% None None 4.75% None None
Maximum Contingent Deferred Sales Charge None 5.00%* 1.00%** None 5.00%* 1.00%*
(as percentage of original purchase price or
redemption proceeds, as applicable 1.00% 1.00%
B. Annual Fund Operating Expenses
(Fiscal Year 1997) (unaudited)
(as a percentage of average net assets)
Management Fees 0.89% 0.89% 0.89% 1.00% 1.00% 1.00%
Rule 12b-1 Service and Distribution Fees 0.35% 1.00% 1.00% 0.25% 1.00% 1.00%
Other Expenses 0.54% 1.27% 1.02% 0.62%(3) 0.99% 0.74%(3)
----- ----- ----- ----- ----- -----
Total Fund Operating Expenses(2) 1.78% 3.16% 2.91% 1.87% 2.99% 2.74%
</TABLE>
* 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 - 1.86%, Class C - 3.14%
(3) Estimated
2
<PAGE>
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.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
CAPITAL
ACCUMULATION
<S> <C> <C> <C> <C>
Class A $65 $101 $139 $247
Class B
Assuming a
complete
redemption at end
of period $84 $140 $187 $314
Assuming no
redemption $32 $97 $165 $314
Class C
Assuming a
complete
redemption at end
of period $40 $90 $153 $323
Assuming no
redemption $29 $90 $153 $323
NEW VISION SMALL
CAP
Class A $66 $103 $144 $256
Class B
Assuming a
complete
redemption at end
of period $81 $135 $179 $304
Assuming no
redemption $30 $92 $157 $304
Class C
Assuming a
complete
redemption at end
of period $38 $85 $145 $307
Assuming no
redemption $28 $85 $145 $307
</TABLE>
3
<PAGE>
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."
4
<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., whose reports are included in the Annual Reports to
Shareholders of the Fund. The table should be read in conjunction with the
financial statements and their related notes. The current Annual Report to
Shareholders is incorporated by reference into the SAI.
<TABLE>
<CAPTION>
CLASS A SHARES
From Oct. 31,
Period Ended Year Ended 1994 (Inception)
Sept. 30, 1997 Sept. 30, 1996 to Sept. 30, 1995
(Unaudited)
<S> <C> <C> <C>
Capital Accumulation Fund
Net asset value, beginning of period $22.55 $21.48 $15.00
Income from investment operations
Net investment income (loss) (.14) (.24) (.11)
Net realized and unrealized gain (loss) 4.80 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) (1.02%) (1.56%) (1.55%)(a)
Total expenses5 1.78% 2.16% 2.35%(a)
Net expenses 1.72% 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
</TABLE>
(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
5
<PAGE>
<TABLE>
<CAPTION>
CLASS C SHARES
From October 31,
Year Ended Year Ended 1994 (Inception)
Sept. 30, 1997 Sept. 30, 1996 to Sept. 30, 1995
(Unaudited)
<S> <C> <C> <C>
Capital Accumulation Fund
Net asset value, beginning of period $22.34 $21.55 $15.00
Income from investment operations
Net investment income (loss) .04 (.55) (.15)
Net realized and unrealized gain (loss) 4.26 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 $21.55
Total return(6) 19.25% 6.56%43.67%
Ratio to average net assets:
Net investment income (loss) (2.14%) (2.82%) (3.13%)(a)
Total expenses(7) 2.91% 3.42% 3.79%(a)
Net expenses 2.85% 3.24% 3.50%(a)
Expenses reimbursed -- -- 2.79%(a)
Portfolio turnover 126% 114% 95%
Average commission rate paid$ $.0530 $.0563 $--
Net assets, ending (in thousands) $4,184 $3,164 $1,992
Number of shares outstanding,
ending (in thousands) 157 142 92
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
CLASS A SHARES
Sept. 30, 1997 From January 31, to
(Unaudited) March 31, 1997
<S> <C> <C>
New Vision Small Cap Fund
Net asset value, beginning of period $15.00 $15.00
Income from investment operations
Net investment income (loss) (.05) __
Net realized and unrealized gain (loss) .70 (3.01)
Total from investment operations .65 (3.01)
Distributions from
Net investment income -- --
Net realized gains -- --
Total Distributions -- --
Total increase (decrease) in
net asset value .65 (3.01)
Net asset value, ending $15.65 $11.99
Total return(6) 4.33% (20.07%)
Ratio to average net assets:
Net investment income (loss) (.55%)(a) __
Total expenses(7) 1.05%(a) .82%(a)
Net expenses .69%(a) __
Expenses reimbursed 2.59%(a) 21.08%(a)
Portfolio turnover 196% 97%
Average commission rate paid $.0488 $.0500
Net assets, ending (in thousands) $3,260 $200
Number of shares outstanding, 208 17
ending (in thousands)
</TABLE>
(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
7
<PAGE>
<TABLE>
<CAPTION>
CLASS C SHARES
Sept. 30, 1997 From January 31,
(Unaudited) to March 31, 1997
<S> <C> <C>
New Vision Small Cap Fund
Net asset value, beginning of period $15.00 $15.00
Income from investment operations
Net investment income (loss) (.10) --
Net realized and unrealized gain (loss) .72 (3.01)
Total from investment operations .62 (3.01)
Distributions from
Net investment income -- --
Net realized gains -- --
Total Distributions -- --
Total increase (decrease) in
net asset value .62 (3.01)
Net asset value, ending $15.62 $11.99
Total return(6) 4.13% (20.07%)
Ratio to average net assets:
Net investment income (loss) (.72%)(a) --
Total expenses(7) 1.12%(a) .82%(a)
Net expenses .87%(a) --
Expenses reimbursed 7.14%(a) 21.08%(a)
Portfolio turnover 196% 97%
Average commission rate paid $.0488 $.0500
Net assets, ending (in thousands) $318 $200
Number of shares outstanding,
ending (in thousands) 20 17
</TABLE>
(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
8
<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").
9
<PAGE>
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
10
<PAGE>
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.
11
<PAGE>
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.
12
<PAGE>
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.
13
<PAGE>
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.
14
<PAGE>
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 < 25% 0.01%
25% to < 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 M.S. in Electrical Engineering from New York
University, and an M.S. in Business Administration from the Indiana University
School of Business. Additionally, he is a professionally-designated Chartered
Financial Analyst (CFA) and Chartered Investment Counselor.
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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 < 25% 0.02%
25% to < 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.
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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.
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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 payable Please make your check payable
to the Fund and mail it to the Fund and mail it
with your application to: with your investment slip to:
Calvert Group Calvert Group
PO Box 419544 PO Box 419739
Kansas City, MO 64141-6544 Kansas City, MO 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 64105-1807 Kansas City, MO 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%
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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:
<TABLE>
<CAPTION>
Allowed
As a % of As a % of to Brokers as a
Amount of Offering Net Amount % of Offering
Investment Price Invested Price
<S> <C> <C> <C>
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%*
</TABLE>
* 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
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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
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<PAGE>
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
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<PAGE>
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 up to the minute 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
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<PAGE>
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.
COMBINED GENERAL MAILINGS
JOIN IS IN OUT EFFORTS TO CONSERVE PAPER AND SAVE ON POSTAGE
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<PAGE>
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
24
<PAGE>
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
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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.
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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
Trusts Letter of instruction signed by the Trustee(s) (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.)
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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.
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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.
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Prospectus
March 31, 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
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<PAGE>
CALVERT WORLD VALUES FUND, INC.
INTERNATIONAL EQUITY FUND
STATEMENT OF ADDITIONAL INFORMATION
MARCH 31, 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>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
Investment Objective 1
Investment Restrictions 7
Investment Selection Process 8
Dividends, Distributions and Taxes 9
Net Asset Value 10
Calculation of Total Return 10
Purchase and Redemption of Shares 11
Reduced Sales Charges (Class A) 12
Advertising 12
Directors and Officers 13
Investment Advisor and Subadvisor 15
Method of Distribution 16
Transfer and Shareholder Servicing Agents 17
Portfolio Transactions 17
Independent Accountants and Custodians 17
General Information 17
Financial Statements 18
Appendix 18
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION--March 31, 1998
CALVERT WORLD VALUES FUND, INC.
INTERNATIONAL EQUITY FUND
4550 Montgomery Avenue, Bethesda, Maryland 20814
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
New Account (800) 368-2748 Shareholder
Information: (301) 951-4820 Services: (800) 368-2745
- --------------------------------------------------------------------------------
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 March 31, 1998, which may be obtained free of charge by
writing the Fund at the above address or calling the Fund.
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
Calvert World Values Fund, Inc., International Equity Fund (the "Fund")
seeks to achieve a high total return consistent with reasonable risk, by
investing primarily in a globally diversified portfolio of equity securities. To
the extent possible, investments are made in enterprises that make a significant
contribution to our global society through their products and services and
through the way they do business.
FOREIGN SECURITIES
Additional costs may be incurred which are related to any international
investment, since 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. They 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. See "Risk Factors" in the Prospectus.
AMERICAN AND EUROPEAN DEPOSITARY RECEIPTS
Many foreign securities are represented by American Depositary Receipts
("ADRs"), or other receipts evidencing ownership of foreign securities, such as
International Depositary Receipts and Global Depositary Receipts. ADRs are U.S.
dollar-denominated and are traded in the U.S. on exchanges or over the counter.
ADRs do not eliminate all the risk inherent in investing in the securities of
foreign issuers. However, by investing in ADRs rather than directly in foreign
issuers' stock, the Fund may avoid some currency risks and liquidity risks
during the settlement period for either purchases or sales. 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. In general, there is a large, liquid market in the U.S.
for many ADRs. The Fund may also invest in European Depositary Receipts
("EDRs"), which are receipts evidencing an arrangement with a European bank
similar to that for ADRs and are designed for use in the European securities
markets. EDRs are not necessarily denominated in the currency of the underlying
security.
CREDIT QUALITY
The Fund invests only in investment grade bonds. As has been the industry
practice, this determination of credit quality is made at the time the Fund
acquires the bond. However, because it is possible that subsequent downgrades
could occur, if a bond held by the Fund is later downgraded, the Fund's
Subadvisor, under the supervision of the Fund's Board of Directors, will
consider whether it is in the best interest of the Fund's
1
<PAGE>
shareholders to hold or to dispose of the bond. Among the criteria that may be
considered by the Subadvisor and the Board are the probability that the bonds
will be able to make scheduled interest and principal payments in the future,
the extent to which any devaluation of the bond has already been reflected in
the Fund net asset value, and the total percentage, if any, of bonds currently
rated below investment grade held by the Fund.
Non-investment grade securities have moderate to poor protection of
principal and interest payments and have speculative characteristics. They
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.
OPTIONS AND FUTURES CONTRACTS
The Fund may purchase put and call options and engage in the writing of
covered call options and secured put options on securities which meet the Fund's
social criteria, and employ a variety of other investment techniques.
Specifically, the Fund may engage in the purchase and sale of stock index future
contracts, foreign currency futures contracts, interest rate futures contracts,
and options on such futures, as described more fully below. Such investment
policies and techniques may involve a greater degree of risk than those inherent
in more conservative investment approaches.
The Fund will engage in such transactions only to hedge existing positions.
It will not engage in such transactions for the purposes of speculation or
leverage.
The Fund will not engage in such options or futures transactions unless it
receives any necessary regulatory approvals permitting it to engage in such
transactions. The Fund may write "covered options" on securities in standard
contracts traded on national or foreign securities exchanges, or in individually
negotiated contracts traded over-the-counter. It may write such options in order
to receive the premiums from options that expire and to seek net gains from
closing purchase transactions with respect to such options.
PURCHASING CALL AND PUT OPTIONS, WARRANTS AND STOCK RIGHTS
The Fund may purchase put options. By buying a put, the Fund has the right
to sell the security at the exercise price, thus limiting its risk of loss
through a decline in the market value of the security until the put expires. The
amount of any appreciation in the value of the underlying security will be
partially offset by the amount of the premium paid for the put option and any
related transaction costs. Prior to its expiration, a put option may be sold in
a closing sale transaction and any profit or loss from the sale will depend on
whether the amount received is more or less than the premium paid for the put
option plus the related transaction costs.
The Fund may purchase call options. Such transactions may be entered into
in order to limit the risk of a substantial increase in the market price of the
security which the Fund intends to purchase. Prior to its expiration, a call
option may be sold in a closing sale transaction. Any profit or loss from such a
sale will depend on whether the amount received is more or less than the premium
paid for the call option plus the related transaction costs.
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.
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.
2
<PAGE>
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.
COVERED OPTIONS. The Fund may write covered options on equity and debt
securities and indices. This means that, in the case of call options, so long as
the Fund is obligated as the writer of a call option, it will own the underlying
security subject to the option and, in the case of put options, it will, through
its custodian, deposit and maintain either cash or securities with a market
value equal to or greater than the exercise price of the option.
When the Fund writes a covered call option, it gives the purchaser the
right to purchase the security at the call option price at any time during the
life of the option. As the writer of the option, it receives a premium, less a
commission, and in exchange foregoes the opportunity to profit from any increase
in the market value of the security exceeding the call option price. The premium
serves to mitigate the effect of any depreciation in the market value of the
security. Writing covered call options can increase the income of the Fund and
thus reduce declines in the net asset value per share of the Fund if securities
covered by such options decline in value. Exercise of a call option by the
purchaser, however, will cause the Fund to forego future appreciation of the
securities covered by the option.
When the Fund writes a secured put option, it will gain a profit in the
amount of the premium, less a commission, so long as the price of the underlying
security remains above the exercise price. However, the Fund remains obligated
to purchase the underlying security from the buyer of the put option (usually in
the event the price of the security funds falls below the exercise price) at any
time during the option period. If the price of the underlying security falls
below the exercise price, the Fund may realize a loss in the amount of the
difference between the exercise price and the sale price of the security, less
the premium received.
The Fund may purchase securities which may be covered with call options
solely on the basis of considerations consistent with the investment objectives
and policies of the Fund. The Fund's turnover may increase through the exercise
of a call option; this will generally occur if the market value of a "covered"
security increases and the Fund has not entered into a closing purchase
transaction.
To preserve the Fund's status as a regulated investment company under
Subchapter M of the Internal Revenue Code, it is the Fund's policy to limit any
gains on put or call options and other securities held less than three months to
less than 30% of the Fund's annual gross income.
RISKS RELATED TO OPTIONS TRANSACTIONS. The Fund can close out its
respective positions in exchange-traded options only on an exchange which
provides a secondary market in such options. Although it intends to acquire and
write only such exchange-traded options for which an active secondary market
appears to exist, there can be no assurance that such a market will exist for
any particular option contract at any particular time. This might prevent the
Fund from closing an option position, which could impair its ability to hedge
effectively. The inability to close out a call position may have an adverse
effect on liquidity because the Fund may be required to hold the securities
underlying the option until the option expires or is exercised.
OVER-THE-COUNTER ("OTC") OPTIONS. OTC options differ from exchange-traded
options in several respects. They are transacted directly with dealers and not
with a clearing corporation, and there is a risk of non-performance by the
dealer. However, the premium is paid in advance by the dealer. OTC options are
available for a greater variety of securities and foreign currencies, and in a
wider range of expiration dates and exercise prices than exchange-traded
options. Since there is no exchange, pricing is normally done by reference to
information from a market maker, which information is carefully monitored or
caused to be monitored by the Subadvisor and verified in appropriate cases.
A writer or purchaser of a put or call option can terminate it voluntarily
only by entering into a closing transaction. In the case of OTC options, there
can be no assurance that a continuous liquid secondary market will exist for any
particular option at any specific time. Consequently, the Fund may be able to
realize the value of an OTC option it has purchased only by exercising it or
entering into a closing sale transaction with the dealer that issued it.
Similarly, when the Fund writes an OTC option, it generally can close out that
option prior to its expiration only by entering into a closing purchase
transaction with the dealer to which it originally wrote the option. If a
covered call option writer cannot effect a closing transaction, it cannot sell
the underlying security or foreign currency until the option expires or the
option is exercised. Therefore, the writer of a covered OTC call option may
3
<PAGE>
not be able to sell an underlying security even though it might otherwise be
advantageous to do so. Likewise, the writer of a secured OTC put option may be
unable to sell the securities pledged to secure the put for other investment
purposes while it is obligated as a put writer. Similarly, a purchaser of an OTC
put or call option might also find it difficult to terminate its position on a
timely basis in the absence of a secondary market.
The Fund understands the position of the staff of the Securities and
Exchange Commission (the "SEC") to be that purchased OTC options and the assets
used as "cover" for written OTC options are illiquid securities. The Fund has
adopted procedures for engaging in OTC options transactions for the purpose of
reducing any potential adverse effect of such transactions upon the liquidity of
the Fund.
FUTURES TRANSACTIONS. The Fund may purchase and sell futures contracts ("futures
contracts") but only when, in the judgment of the Subadvisor, such a position
acts as a hedge against market changes which would adversely affect the
securities held by the Fund. These futures contracts may include, but are not
limited to, market index futures contracts and futures contracts based on U.S.
Government obligations.
A futures contract is an agreement between two parties to buy and sell a
security on a future date which has the effect of establishing the current price
for the security. Although futures contracts by their terms require actual
delivery and acceptance of securities, in most cases the contracts are closed
out before the settlement date without the making or taking of delivery of
securities. Upon buying or selling a futures contract, the Fund deposits initial
margin with its custodian, and thereafter daily payments of maintenance margin
are made to and from the executing broker. Payments of maintenance margin
reflect changes in the value of the futures contract, with the Fund being
obligated to make such payments if its futures position becomes less valuable
and entitled to receive such payments if its positions become more valuable.
The Fund may only invest in futures contracts to hedge its existing
investment positions and not for income enhancement, speculation or leverage
purposes. Although some of the securities underlying the futures contract may
not necessarily meet the Fund's social criteria, any such hedge position taken
by the Fund will not constitute a direct ownership interest in the underlying
securities.
Futures contracts have been designed by boards of trade which have been
designated "contracts markets" by the Commodity Futures Trading Commission
("CFTC"). As a registered investment company, the Fund is eligible for exclusion
from the CFTC's definition of "commodity pool operator," meaning that it may
invest in futures contracts under specified conditions without registering with
the CFTC. Among these conditions are requirements that to the extent that the
Fund enters into future contracts and options on futures positions that are not
for bona fide hedging purposes (as defined by the CFTC), the aggregate initial
margin and premiums on these positions (excluding the amount by which options
are "in-the-money") may not exceed 5% of the Fund's net assets.
OPTIONS ON FUTURES CONTRACTS. The Fund may purchase and write put or call
options and sell call options on futures contracts in which it could otherwise
invest and which are traded on a U.S. exchange or board of trade. It may also
enter into closing transactions with respect to such options to terminate an
existing position; that is, to sell a put option already owned and to buy a call
option to close a position where the Fund has already sold a corresponding call
option.
The Fund may only invest in options on futures contracts to hedge its
existing investment positions and not for income enhancement, speculation or
leverage purposes. Although some of the securities underlying the futures
contract underlying the option may not necessarily meet the Fund's social
criteria, any such hedge position taken by the Fund will not constitute a direct
ownership interest in the underlying securities.
An option on a futures contract gives the purchaser the right, in return
for the premium paid, to assume a position in a futures 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. The
Fund will pay a premium for such options purchased or sold. In connection with
such options bought or sold, the Fund will make initial margin deposits and make
or receive maintenance margin payments which reflect changes in the market value
of such options. This arrangement is similar to the margin arrangements
applicable to futures contracts described above.
PUT OPTIONS ON FUTURES CONTRACTS. The purchase of put options on futures
contracts is analogous to the sale of futures contracts and is used to protect
the portfolio against the risk of declining prices. The Fund may purchase put
options and sell put options on futures contracts it already owns. The Fund will
only engage in the purchase of put options and the sale of covered put options
on market index futures for hedging purposes.
4
<PAGE>
CALL OPTIONS ON FUTURES CONTRACTS. The sale of call options on futures contracts
is analogous to the sale of futures contracts and is used to protect the
portfolio against the risk of declining prices. The purchase of call options on
futures contracts is analogous to the purchase of a futures contract. The Fund
may only buy call options to close an existing position where the Fund has
already sold a corresponding call option, or for a cash hedge. The Fund will
only engage in the sale of call options and the purchase of call options to
cover for hedging purposes.
WRITING CALL OPTIONS ON FUTURES CONTRACTS. The writing of call options on
futures contracts constitutes a partial hedge against declining prices of the
securities deliverable upon exercise of the futures contract. If the futures
contract price at expiration is below the exercise price, the Fund will retain
the full amount of the option premium which provides a partial hedge against any
decline that may have occurred in the Fund's securities holdings.
RISKS OF OPTIONS AND FUTURES CONTRACTS. If the Fund has sold futures or takes
options positions to hedge its portfolio against decline in the market and the
market later advances, it may suffer a loss on the futures contracts or options
which it would not have experienced if it had not hedged. Correlation is also
imperfect between movements in the prices of futures contracts and movements in
prices of the securities which are the subject of the hedge. Thus the price of
the futures contract or option may move more than or less than the price of the
securities being hedged. Where the Fund has sold futures or taken options
positions to hedge against decline in the market, the market may advance and the
value of the securities held in the Fund may decline. If this were to occur, the
Fund might lose money on the futures contracts or options and also experience a
decline in the value of its portfolio securities. However, although this might
occur for a brief period or to a slight degree, the value of a diversified
portfolio will tend to move in the direction of the market generally.
The Fund can close out futures positions only on an exchange or board of
trade which provides a secondary market in such futures. Although the Fund
intends to purchase or sell only such futures for which an active secondary
market appears to exist, there can be no assurance that such a market will exist
for any particular futures contract at any particular time. This might prevent
the Fund from closing a futures position, which could require the Fund to make
daily cash payments with respect to its position in the event of adverse price
movements.
Options on futures transactions bear several risks apart from those
inherent in options transactions generally. The Fund's ability to close out its
options positions in futures contracts will depend upon whether an active
secondary market for such options develops and is in existence at the time the
Fund seeks to close its positions. There can be no assurance that such a market
will develop or exist. Therefore, the Fund might be required to exercise the
options to realize any profit.
CLOSING OUT A FUTURES POSITION -- RISKS. The Fund may close out its position in
a futures contract or an option on a futures contract only by entering into an
offsetting transaction on the exchange on which the position was established and
only if there is a liquid secondary market for the futures contract. If it is
not possible to close a futures position entered into by the Fund, the Fund
could be required to make continuing daily cash payments of variation margin in
the event of adverse price movements. In such situations, if the Fund has
insufficient cash, it may have to sell portfolio securities to meet daily margin
requirements at a time when it would be disadvantageous to do so. The inability
to close futures or options positions could have an adverse effect on the Fund's
ability to hedge effectively. There is also risk of loss by the Fund of margin
deposits in the event of bankruptcy of a broker with whom the Fund has an open
position in a futures contract. The success of a hedging strategy depends on the
Subadvisor's ability to predict the direction of interest rates and other
economic factors. The correlation is imperfect between movements in the prices
of futures or options contracts, and the movements of prices of the securities
which are subject to the hedge. If the Fund used a futures or options contract
to hedge against a decline in the market, and the market later advances (or
vice-versa), the Fund may suffer a greater loss than if it had not hedged.
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
5
<PAGE>
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.
The value of the Fund's assets as measured in United States dollars may be
affected favorably or unfavorably by changes in foreign currency exchange rates
and exchange control regulations, and the Fund may incur costs in connection
with conversions between various currencies. The Fund will conduct its foreign
currency exchange transactions either on a spot (i.e., cash) basis at the spot
rate prevailing in the foreign currency exchange market, or through forward
contracts to purchase or sell foreign currencies. 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 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.
When the Fund enters into a contract for the purchase or sale of a security
denominated in a foreign currency, it may want to establish the United States
dollar cost or proceeds, as the case may be. By entering into a forward contract
in United States dollars for the purchase or sale of the amount of foreign
currency involved in the underlying security transaction, the Fund is able to
protect itself against a possible loss between trade and settlement dates
resulting from an adverse change in the relationship between the United States
dollar and such foreign currency. However, this tends to limit potential gains
which might result from a positive change in such currency relationships. The
Fund may also hedge its foreign currency exchange rate risk by engaging in
currency financial futures and options transactions.
When the Advisor or the Subadvisor believes that the currency of a
particular foreign country may suffer a substantial decline against the United
States dollar, it may enter into a forward contract to sell an amount of foreign
currency approximating the value of some or all of the Fund's portfolio
securities denominated in such foreign currency. The forecasting of short-term
currency market movement is extremely difficult and whether such a short-term
hedging strategy will be successful is highly uncertain.
It is impossible to forecast with precision the market values of portfolio
securities at the expiration of a contract. Accordingly, it may be necessary for
the Fund to purchase additional currency on the spot market (and bear the
expense of such purchase) if the market value of the security is less than the
amount of foreign currency the Fund is obligated to deliver when a decision is
made to sell the security and make delivery of the foreign currency in
settlement of a forward contract. Conversely, it may be necessary to sell on the
spot market some of the foreign currency received upon the sale of the portfolio
security if its market value exceeds the amount of foreign currency the Fund is
obligated to deliver.
6
<PAGE>
If the Fund retains the portfolio security and engages in an offsetting
transaction, it will incur a gain or a loss (as described below) to the extent
that there has been movement in forward contract prices. If the Fund engages in
an offsetting transaction, it may subsequently enter into a new forward contract
to sell the foreign currency. Should forward prices decline during the period
between the Fund entering into a forward contract for the sale of a foreign
currency and the date it enters into an offsetting contract for the purchase of
the foreign currency, it would realize gains to the extent the price of the
currency it has agreed to sell exceeds the price of the currency it has agreed
to purchase. Should forward prices increase, the Fund would suffer a loss to the
extent the price of the currency it has agreed to purchase exceeds the price of
the currency it has agreed to sell. Although such contracts tend to minimize the
risk of loss due to a decline in the value of the hedged currency, they also
tend to limit any potential gain which might result should the value of such
currency increase. The Fund may have to convert its holdings of foreign
currencies into United States dollars from time to time. Although foreign
exchange dealers do not charge a fee for conversion, they do realize a profit
based on the difference (the "spread") between the prices at which they are
buying and selling various currencies.
- --------------------------------------------------------------------------------
INVESTMENT RESTRICTIONS
- --------------------------------------------------------------------------------
FUNDAMENTAL INVESTMENT RESTRICTIONS
The Fund has adopted the following investment restrictions which, together
with the foregoing investment objectives and fundamental policies of the Fund,
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 75% 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.
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. Purchase more than 10% of the outstanding voting securities
of any issuer.
4. Make loans other than through the purchase of money market
instruments and repurchase agreements or by the purchase of bonds,
debentures or other debt securities. 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.
5. Underwrite the securities of other issuers, except to the
extent that in connection with the disposition of its portfolio
securities, the Fund may be deemed to be an underwriter.
6. Purchase from or sell to any of the Fund's officers or
Directors, or firms of which any of them are members, any securities
(other than capital stock of the Fund), but such persons or firms may
act as brokers for the Fund for customary commissions.
7. Borrow money, except from banks for temporary or emergency
purposes and then only in an amount up to 10% of the value of the
Fund's total assets; provided, however, that outstanding borrowings
permitted by this section do not exceed 33 1/3% of the Fund's total
assets. In order to secure any permitted borrowings under this
section, the Fund may pledge, mortgage or hypothecate its assets.
8. 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 deposit or 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.
9. Write, purchase or sell puts, calls or combinations thereof
except that the Fund may (a) write exchange-traded covered call
options on portfolio securities and enter into closing purchase
7
<PAGE>
transactions with respect to such options, and the Fund may write
exchange-traded covered call options on foreign currencies and secured put
options on securities and foreign currencies and write covered call and
secured put options on securities and foreign currencies traded over the
counter, and enter into closing purchase transactions with respect to such
options, (b) purchase exchange-traded call options and put options and
purchase call and put options traded over the counter, PROVIDED that the
premiums on all outstanding call and put options do not exceed 5% of its
total assets, and enter into closing sale transaction with respect to such
options, and (c) engage in financial futures contracts and related options
transactions, PROVIDED that the sum of the initial margin deposits on the
Fund's existing futures and related options positions and the premiums paid
for related options would not exceed 5% of its total assets.
10. Invest for the purpose of exercising control or management
of another issuer.
11. Invest in commodities, commodities 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.
12. The Fund may invest in the shares of other investment
companies as permitted by the 1940 Act or other applicable law; or in
connection with a nonqualified deferred compensation plan adopted by
the Board of Directors, as long as there is no duplication of advisory
fees.
NON-FUNDAMENTAL 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:
13. Purchase illiquid securities if more than 15% of the value
of that Fund's net assets would be invested in such securities. The
Fund may buy and sell securities outside the U.S. that are not
registered with the SEC or marketable in the U.S.
14. As an operating policy, excluding special equities and High
Social Impact Investments, the Fund will limit its investment in securities
of U.S. issuers to 5% of the Fund's net 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.
- --------------------------------------------------------------------------------
INVESTMENT SELECTION PROCESS
- --------------------------------------------------------------------------------
Investments in the Fund are selected on the basis of their ability to
contribute to the dual objective of the Fund. The Subadvisor uses its best
efforts to select investments for the Fund that satisfy the Fund's investment
and social criteria to the greatest practical extent. The Subadvisor has
developed a number of techniques for evaluating the performance of issuers in
each of these areas. The primary sources of information are reports published by
the issuers themselves, the reports of public agencies, and the reports of
groups which monitor performance in particular areas. These sources of
information are sometimes augmented with direct interviews or written
questionnaires addressed to the issuers. It should be recognized, however, that
there are few generally accepted measures by which achievement in these areas
can be readily distinguished; therefore, the development of suitable measurement
techniques is largely within the discretion and judgment of the Advisors of the
Fund.
In making investment selections, the Subadvisor determines and evaluates
the appropriate portfolio composition on the basis of asset prices and the
perceived consequences and probabilities of various economic outcomes that the
Subadvisor deems possible. The Subadvisor then evaluates numerous individual
securities as candidates to fulfill the Fund's investment objective and
policies. Securities remain candidates for inclusion in the Fund only if their
prices and other characteristics indicate that they have the potential to
perform in a way that is
8
<PAGE>
representative of their class of securities under the different economic
outcomes considered more probable by the Subadvisor.
Candidates for inclusion in any particular class of assets are then
examined according to the social criteria. The Subadvisor classifies the issuers
into three categories of suitability under the social criteria. In the first
category are those issuers which exhibit unusual positive accomplishment with
respect to some of the criteria and do not fail to meet minimum standards with
respect to the remaining criteria. To the greatest extent possible, investment
selections are made from this group. In the second category are those issuers
which meet minimum standards with respect to all the criteria but do not exhibit
outstanding accomplishment with respect to any criterion. This category includes
issuers which may lack an affirmative record of accomplishment in these areas
but which are not known by the Subadvisor to violate any of the social criteria.
The third category under the social criteria consists of issuers which
flagrantly violate, or have violated, one or more of those values, for example,
a company which repeatedly engages in unfair labor practices. The Fund will not
knowingly purchase the securities of issuers in this third category.
It should be noted that the Fund's social criteria tend to limit the
availability of investment opportunities more than is customary with other
investment companies. The Advisors of the Fund, however, believe that within the
first and second categories there are sufficient investment opportunities to
permit full investment among issuers which satisfy the Fund's social investment
objective.
- --------------------------------------------------------------------------------
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.
Generally, dividends (including short-term capital gains) and distributions
are taxable to the shareholder 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.
Investors should note that the Internal Revenue Code ("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 long-term capital gain
dividends and 31% of each redemption transaction 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 capital gain 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; 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
9
<PAGE>
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.
- --------------------------------------------------------------------------------
NET ASSET VALUE
- --------------------------------------------------------------------------------
The public offering price of the shares of the Fund is the respective net
asset value per share (plus, for Class A shares, the applicable sales charge).
The net asset values fluctuates based on the respective market value of the
Fund's investments. The net asset value per share for each class is determined
every business day at the close of the regular session of the New York Stock
Exchange (normally 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
Fund's net asset value per share is determined by dividing total net assets (the
value of its assets net of liabilities, including accrued expenses and fees) by
the number of shares outstanding for that class.
The assets of the Fund 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 may be 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 will be fairly valued by the Advisor in
good faith under the supervision of the Board of Directors. Securities primarily
traded on foreign securities exchanges are generally valued at the preceding
closing values on their respective exchanges where primarily traded. Equity
options are valued at the last sale price unless the bid price is higher or the
asked price is lower, in which event such bid or asked price is used. Exchange
traded fixed income options are valued at the last sale price unless there is no
sale price, in which event current prices provided by market makers are used.
Over-the-counter fixed income options are valued based upon current prices
provided by market makers. Financial futures are valued at the settlement price
established each day by the board of trade or exchange on which they are traded.
Because of the need to obtain prices as of the close of trading on various
exchanges throughout the world, the calculation of the Fund's net asset value
does not take place for contemporaneously with the determination of the prices
of U.S. portfolio securities. For purposes of determining the net asset value
all assets and liabilities initially expressed in foreign currency values will
be converted into United States dollar values at the mean between the bid and
offered quotations of such currencies against United States dollars at last
quoted by any recognized dealer. If an event were to occur after the value of an
investment was so established but before the net asset value per share was
determined which was likely to materially change the net asset value, then the
instrument would be valued using fair value consideration by the Directors or
their delegates.
<TABLE>
<CAPTION>
NET ASSET VALUE AND OFFERING PRICE PER SHARE
Net asset value per share
<S> <C>
($225,168,509/10,206,565 shares) $22.06
Maximum sales charge, Class A
(4.75% of offering price) 1.10
------
Offering price per share, Class A $23.16
------
------
Class C net asset value and offering price per share
($8,798,762/411,440 shares)
$21.39
------
------
</TABLE>
- --------------------------------------------------------------------------------
CALCULATION OF TOTAL RETURN
- --------------------------------------------------------------------------------
The Fund may 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 any
applicable sales charge, 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
10
<PAGE>
$1,000 investment. 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 $1,000; 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.
Total return is historical in nature and is not intended to indicate future
performance. All total return quotations reflect the deduction of the maximum
sales charge, except quotations of "return without maximum load," which do not
deduct sales charge. Total returns for the Fund's shares for the periods
indicated are as follows:
<TABLE>
<CAPTION>
Periods Ended CLASS A CLASS A CLASS C
September 30, 1997 Return without Maximum Average Annual Total Average Annual Total
Load Return with Maximum Return
Load
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
One year 21.44% 15.68% 20.22%
Five years 12.29% 11.20% N/A
From date of inception 10.68% 9.66% 7.50%
(June 29, 1992, for Class A and March 1, 1994, for Class C.)
</TABLE>
Total return, like net asset value per share, fluctuates in response to
changes in market conditions. It should not be considered an indication of
future return.
- --------------------------------------------------------------------------------
PURCHASE AND REDEMPTION OF SHARES
- --------------------------------------------------------------------------------
Investments in the Fund made by mail, bank wire or electronic funds
transfer, or through the Fund's branch offices, Calvert Distributors, Inc., or
other brokers participating in the distribution of Fund shares, are credited to
a shareholder's account at the public offering price which is the net asset
value next determined after receipt by the Fund, Calvert Distributors, Inc., or
the Fund's custodian bank or lockbox facility, plus the applicable sales charge
as set forth in the Fund's Prospectus.
All purchases of the Fund shares will be confirmed and credited to
shareholder accounts in full and fractional shares (rounded to the nearest
1/1000th of a share). 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. A service fee of $10.00,
plus any costs incurred by the Fund, will be charged investors whose purchase
checks are returned for insufficient funds. Certain Class B and Class C shares
may be subject to a contingent deferred sales charge which is substracted from
the redemption proceeds (see Prospectus, "Calculation of Contingent Deferred
Sales Charges and Waiver of Sales Charges").
Telephone redemption requests are processed upon the date of receipt, if
received prior to 4:00 p.m. Redemption proceeds are normally transmitted or
mailed the next business day, although payment by check of redemption proceeds
shares may take up to five business days; however, 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.
Amounts redeemed by telephone may be mailed by check to the investor to the
address of record. Amounts of more than $50 and less than $300,000 may be
transferred electronically at no charge to the investor. Amounts of $l,000 or
more will be transmitted by wire by the Fund to the investor's account at a
domestic bank or savings association 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 institution is not a Federal Reserve System member,
failure of immediate notification to that institution by the correspondent bank
could result in a delay in crediting the funds to the investor's account at the
institution.
To change redemption instructions already given, shareholders must send a
notice to the Fund, with a voided copy of a check for the bank wiring
instructions to be added. If a voided check does not accompany the
11
<PAGE>
request, then the request must be signature guaranteed by a commercial bank,
trust company, savings association or member firm of any national securities
exchange. Other documentation may be required from corporations, fiduciaries 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 a written
redemption request. If the investor so instructs in such written redemption
request, the check will be mailed or the redemption proceeds wired or
transferred electronically to a preauthorized account at the investor's bank or
savings association.
The right of redemption 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 Commission,
or if the Commission has ordered such a suspension for the protection of
shareholders. Redemption proceeds are normally mailed, wired or transferred
electronically the next business day but in no event later than seven days after
a proper redemption request has been received, unless redemptions have been
suspended or postponed as described above.
Redemption proceeds are normally paid in cash. However, 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.
- --------------------------------------------------------------------------------
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. For shareholders who intend to
invest at least $50,000, a Letter of Intent is included in the Appendix to this
Statement of Additional Information. See "Exhibit A - Reduced Sales Charges" in
the Prospectus.
- --------------------------------------------------------------------------------
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., including other socially responsible investment companies, and
unmanaged market indices such as Morgan Stanley Capital International World
Index or Europe-Far East-Asia Index. 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
12
<PAGE>
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 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, November 39, 1997). Calvert Group was also the first to offer
a family of socially responsible mutual fund portfolios.
- --------------------------------------------------------------------------------
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. DOB: 5/15/48. Address: 7205 Pomander
Lane, Chevy Chase, Maryland 20815.
*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 a
director of Calvert-Sloan Advisers, L.L.C., co-chair of the Board of Directors
of Calvert World Values Fund, Inc., 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. DOB:
12/13/44. Address: 15 Edwards Square, Northampton, Massachusetts 01060.
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. DOB: 7/3/24. Address: Material
Research Laboratory, Room 102A, Pennsylvania State University, University Park,
Pennsylvania, 16802.
*D. WAYNE SILBY, Esq., Director. Mr. Silby is a trustee/director of each of
the investment companies in the Calvert Group of Funds, except for Calvert New
World Fund, Inc., and Calvert Variable Series. Mr. Silby is Executive Chairman
of GroupServe, an internet company focused on community building collaborative
tools, and 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. DOB:
7/20/48. Address: 1715 18th Street, N.W., Washington, D.C. 20009.
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. DOB:
5/29/59. Address: 55 Calverley Road, Tunbridge Wells, Kent, TN1 2UE, United
Kingdom.
MUHAMMAD YUNUS, Director. Mr. Yunus is a Managing Director of Grameen Bank
in Bangladesh. DOB: 6/28/40. Address: Grameen Bank, Mirpur Two, Dhaka 1216,
Bangladesh.
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: 1/13/50.
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: 8/12/47.
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. Age: 45.
13
<PAGE>
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: 7/24/52.
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., Assistant 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 Group, 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 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. Directors
marked with a * above are "interested persons" of the Fund under the Investment
Company Act of 1940.
Messrs. Guffey and Silby serve on the Fund's High Social Impact Investments
Committee which assists the Fund in identifying, evaluating, and selecting
investments in securities that offer a rate of return below the then-prevailing
market rate and that present attractive opportunities for furthering the Fund's
social criteria. Messrs. Guffey, Silby, and Roy serve on the Fund's Special
Equities Committee which assists the Fund in identifying, evaluating, and
selecting appropriate private placement investment opportunities for the Fund
that are not high social impact investments.
During fiscal 1997, Directors of the Fund not affiliated with the Fund's
Advisor were paid aggregate fees and expenses of $81,321.
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
(shown as "Pension or Retirement Benefits Accrued as part of Fund Expenses,"
below). 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, and will ensure that there is no duplication of advisory
fees.
<TABLE>
<CAPTION>
Director Compensation Table
Fiscal Year 1997 Aggregate Compensation Pension or Retirement Total Compensation from
(unaudited numbers) from Registrant for Service Benefits Accrued as part Registrant and Fund
as Trustee of Registrant Expenses* Complex paid to
Name of Director Director**
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
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
</TABLE>
14
<PAGE>
* Ms. Tennant has chosen to defer her compensation. Her total deferred
compensation, including dividends and capital appreciation, was $19,988.85 as of
September 30, 1997. Mr. Yunus has also chosen to defer his compensation. His
total deferred compensation, including dividends and capital appreciation, was
$38,312.88 as of September 30, 1997.
**As of December 31, 1997. The Fund Complex consists of nine (9) registered
investment companies.
- --------------------------------------------------------------------------------
INVESTMENT ADVISOR AND SUBADVISOR
- --------------------------------------------------------------------------------
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 fee of 1.00% of the Fund's average daily net assets up to $250
million, 0.975% of the next $250 million, and 0.925% on assets in excess of $500
million. The Advisor may voluntarily defer its fees or assume expenses of the
Fund. During fiscal year 1995, no fees were waived and the Advisor received fees
of $1,871,430. During fiscal years 1996 and 1997, no fees were waived and the
Advisor received fees of $1,971,329 and $2,134,708, respectively. The Advisor
may recapture from (charge to) the Fund for such expenses incurred through
December 31, 1993, provided that such recapture would not cause the Fund's
aggregate expenses to exceed an annual expense limit of 2.00%, and that such
recapture shall be made to the Advisor only from the two-year period from
January 1, 1994, through December 31, 1995. The Advisor may voluntarily agree to
further defer its fees or assume Fund expenses from January 1, 1994, through
December 31, 1994, ("Additional Deferral/Assumption Period"). If so, the Advisor
may recapture from (charge to) the Fund for any such expenses incurred during
the Additional Deferral/Assumption Period, provided that such recapture would
not cause the Fund's aggregate expenses to exceed an annual expense limit of
2.00%, and that such recapture shall be made to the Advisor only from the
two-year period from January 1, 1995 through December 31, 1996. Each year's
current advisory fees (incurred in that year) will be paid in full before any
recapture for a prior year is applied. Recapture then will be applied beginning
with the most recent year first. For the 1994 fiscal period, the Advisor
recaptured $45,532 of fees it had deferred in 1992 from Class A Shares. No fees
were recaptured during 1995, 1996, or 1997.
The Fund's Subadvisor is Murray Johnstone International, Ltd. ("Subadvisor"
or "Murray Johnstone"). Pursuant to an Investment Subadvisory Agreement with the
Advisor, the Subadvisor determines investment selections for the Fund. For its
services, the Subadvisor receives an annual fee from the Advisor of 0.45% of the
Fund's average daily net assets under management by the Subadvisor up to $250
million, 0.425% on the next $250 million, and 0.40% on assets in excess of $500
million.
Through 85 years experience in investment management, Murray Johnstone has
developed a wealth of expertise in international markets and has grown into one
of the largest independent investment manager in Scotland. Founded in 1907 and
headquartered in Glasgow, Murray Johnstone has evolved into a diversified group
with offices on three continents and over $6 billion under management. In 1989,
responding to growing investment opportunities, Murray Johnstone International
Limited was registered as an investment advisor with the United States
Securities and Exchange Commission. They have U.S. offices in Chicago and
Minneapolis.
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, with a
minimum annual fee of $40,000.
15
<PAGE>
For fiscal years 1995, 1996, and 1997, CASC received $187,143, $197,133, and
$213,471, respectively, in administrative fees.
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 Subadvisor 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.
- --------------------------------------------------------------------------------
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. For fiscal years 1995, 1996, and 1997, CDI
received fees of $454,763, $476,884, and $514,711, respectively, under the Class
A Distribution Plan. Of the Class A distribution expenses paid in fiscal 1997,
$430,509 was used to compensate dealers for their share distribution promotional
services, and the remainder partially financed advertising. CDI also receives
the portion of the sales charge in excess of the dealer reallowance. For 1995,
1996, and 1997, CDI received net sales charges of $163,702, $157,897, and
$141,844, 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. In 1995, Class C Distribution expenses were $52,378. 1996,
Class C Distribution expenses were $63,792, and $75,866 in fiscal 1997. Fiscal
year 1997 Class C Distribution Plan expenses were used entirely to compensate
dealers distributing shares and to compensate the underwriter.
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.
16
<PAGE>
- --------------------------------------------------------------------------------
TRANSFER AND SHAREHOLDER SERVICING AGENTS
- --------------------------------------------------------------------------------
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 number of the shareholder accounts and transactions.
- --------------------------------------------------------------------------------
PORTFOLIO TRANSACTIONS
- --------------------------------------------------------------------------------
Fund transactions are undertaken on the basis of their desirability from an
investment standpoint. Investment decisions and the choice of brokers and
dealers are made by the Fund's Advisor and Subadvisor under the direction and
supervision of the Fund's Board of Directors.
Broker-dealers who execute portfolio transactions on behalf of the Fund are
selected on the basis of their professional capability and the value and quality
of their services. The Fund may pay brokerage commissions to broker-dealers who
provide the Fund with statistical, research, or other information and services.
Although any statistical research or other information and services provided by
such broker-dealers may be useful to the Advisor and the Subadvisor, the dollar
value of such information and services is generally indeterminable, and its
availability or receipt does not serve to materially reduce the Advisor's or
Subadvisor's normal research activities or expenses. During fiscal year 1995,
1996, and 1997, no commissions were paid to any officer or director of the Fund,
or to any of their affiliates. During fiscal years 1996 and 1997, aggregate
brokerage commissions paid to broker-dealers were $1,155,171 and $749,049,
respectively.
The Advisor and Subadvisor may also execute portfolio 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.
Depending upon market conditions, portfolio turnover, generally defined as
the lesser of annual sales or purchases of portfolio securities divided by the
average monthly value of the Fund's portfolio securities (excluding from both
the numerator and the denominator all securities whose maturities or expiration
dates as of the date of acquisition are one year or less), expressed as a
percentage, is under normal circumstances expected to be approximately 85%. For
the 1996 and 1997 fiscal years, the portfolio turnover rates of the Fund were
96% and 58%, respectively.
- --------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS AND CUSTODIANS
- --------------------------------------------------------------------------------
Coopers & Lybrand, L.L.P. has been selected by the Board of Directors to
serve as independent auditors for fiscal year 1998. State Street Bank & Trust
Company, N.A., 225 Franklin Street, Boston, MA 02110, serves 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. The custodians have no 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 Capital Accumulation Fund.
17
<PAGE>
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 audited financial statements in the Fund's 1997 Annual Report to
Shareholders, 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 Fund.
- --------------------------------------------------------------------------------
APPENDIX
- --------------------------------------------------------------------------------
CORPORATE BOND AND COMMERCIAL PAPER RATINGS
CORPORATE BONDS:
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 the A category.
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. There may be some large uncertainties and major risk exposure to
adverse conditions. The higher the degree of speculation, the lower the rating.
C/C: This rating is only for no-interest income bonds.
D: Debt in default; payment of interest and/or principal is in arrears.
COMMERCIAL PAPER:
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
18
<PAGE>
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.
19
<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.
20
<PAGE>
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 CDI 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 Name of Investor(s)
By
- ----------------------------------- -----------------------------------
Authorized Signer Address
- ----------------------------------- -----------------------------------
Date SIGNATURE OF INVESTOR(S)
- ----------------------------------- -----------------------------------
Date SIGNATURE OF INVESTOR(S)
21
<PAGE>
CALVERT WORLD VALUES FUND, INC.
CAPITAL ACCUMULATION FUND
Statement of Additional Information
March 31, 1998
INVESTMENT ADVISOR TRANSFER AGENT
Calvert Asset Management Company, Inc. Calvert Shareholder Services, Inc.
4550 Montgomery Avenue 4550 Montgomery Avenue
Suite 1000N Suite 1000N
Bethesda, Maryland 20814 Bethesda, Maryland 20814
INDEPENDENT ACCOUNTANTS PRINCIPAL UNDERWRITER
Coopers & Lybrand, L.L.P. Calvert Distributors, Inc.
250 W. Pratt Street 4550 Montgomery Avenue
Baltimore, Maryland 21201-2304 Suite 1000N
Bethesda, Maryland 20814
TRANSFER AGENT
National Financial Data Services, Inc.
1004 Baltimore 6th Floor
Kansas City, MO. 64105
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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
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<PAGE>
1
STATEMENT OF ADDITIONAL INFORMATION--March 31, 1998
CALVERT CAPITAL ACCUMULATION FUND
4550 Montgomery Avenue, Bethesda, Maryland 20814
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New Account (800) 368-2748 Shareholder
Information:(301) 951-4820 Services: (800) 368-2745
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Broker (800) 368-2746 TDD for the Hearing-
Services: (301) 951-4850 Impaired: (800) 541-1524
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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 March 31, 1998, which may be obtained free of charge by
writing the Fund at the above address or calling the Fund.
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INVESTMENT OBJECTIVE AND POLICIES
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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
<PAGE>
2
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
<PAGE>
3
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
<PAGE>
4
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.
<PAGE>
5
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.
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INVESTMENT RESTRICTIONS
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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:
<PAGE>
6
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.
<PAGE>
7
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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.
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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
<PAGE>
8
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
<TABLE>
<S> <C>
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
------
------
</TABLE>
- --------------------------------------------------------------------------------
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:
n
P(1 + T) = 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,
<PAGE>
9
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:
<TABLE>
<CAPTION>
Class A Shares Class A Shares Total Class C Shares
Without Maximum Return With Total Return
Sales Load Return Maximum Sales
Load
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
One Year 20.67% 14.93% 19.25%
Since Inception 23.84% 9.25% 22.87%
</TABLE>
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.
<PAGE>
10
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.
<PAGE>
11
- --------------------------------------------------------------------------------
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.
<PAGE>
12
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.
<TABLE>
<CAPTION>
Director Compensation Table
Fiscal Year 1997 Aggregate Compensation Pension or Retirement Total Compensation from
(unaudited numbers) from Registrant for Service Benefits Accrued as part Registrant and Fund
as Trustee of Registrant Expenses* Complex paid to
Name of Director Director**
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
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
</TABLE>
* 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").
<PAGE>
13
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
<PAGE>
14
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
<PAGE>
15
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 March 31, 1997, 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
<PAGE>
16
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>
17
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
<PAGE>
18
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 Name of Investor(s)
By
- ------------------------------------ -----------------------------------
Authorized Signer Address
- ------------------------------------ -----------------------------------
Date SIGNATURE OF INVESTOR(s)
- ------------------------------------ -----------------------------------
Date SIGNATURE OF INVESTOR(s)
<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, International
Equity Fund are incorporated by reference to Registrant's Annual
Report to Shareholders dated September 30, 1997, and filed December
15, 1997.
All financial statements for Calvert World Values Fund, Calvert
Capital Accumulation Fund are incorporated by reference to
Registrant's Semi-Annual Report to Shareholders dated September 30,
1997, and filed December 16, 1997. That report is being audited by
Coopers & Lybrand and will be filed as an Annual Report due to the
recent change of fiscal year-end from 3/31 to 9/30.
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, filed herewith.
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).
<PAGE>
9.A. Transfer Agency Contract, filed herewith.
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, filed herewith.
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, filed herewith.
Exhibits 3, 12, and 13 are omitted because they are inapplicable.
Item 25. Persons Controlled By or Under Common Control With Registrant
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
---------------
<PAGE>
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
<PAGE>
---------------
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
<PAGE>
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
---------------
<PAGE>
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
<PAGE>
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
<PAGE>
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.
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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 27th day of March, 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
<PAGE>
__________**____________ President and Director 3/27/98
Barbara J. Krumsiek (Principal Executive Officer)
__________**____________ Principal Accounting 3/27/98
Ronald M. Wolfsheimer Officer
__________**____________ Director 3/27/98
John G. Guffey, Jr.
__________**____________ Director 3/27/98
Terrence Mollner
__________**____________ Director 3/27/98
Rustum Roy
__________**____________ Director 3/27/98
D. Wayne Silby
__________**____________ Director 3/27/98
Tessa Tennant
__________**____________ Director 3/27/98
Mohammed Yunus
**By: Katherine Stoner as Attorney-in-fact
<PAGE>
DISTRIBUTION AGREEMENT
This DISTRIBUTION AGREEMENT, dated as of February 25, 1998 by and between
EACH CALVERT FUND LISTED IN THE SCHEDULE OF FUNDS ATTACHED HERETO AS SCHEDULE I
(each a "Fund" and together the "Funds"), as such schedule may, from time to
time be amended, and CALVERT DISTRIBUTORS, INC., a Delaware corporation (the
"Distributor").
WHEREAS, each Fund is registered as an open-end investment company under
the Investment Company Act of 1940 (the "1940 Act") and has registered its
shares, including shares of its series portfolios (the "Series"), for sale to
the public under the Securities Act of 1933 (the "1933 Act") and various state
securities laws;
WHEREAS, each Fund wishes to retain the Distributor as the principal
underwriter in connection with the offer and sale of shares of the Series (the
"Shares") and to furnish certain other services to the Series as specified in
this Agreement;
WHEREAS, this contract has been approved by the Trustees/Directors of each
Fund in anticipation of the Distributor's transfer of its rights to receive the
Class B Distribution Fees ( as defined in the Distribution Plan for Class B and
C Shares (the "Distribution Plan")) and/or Class B contingent deferred sales
charges to a financing party in order to raise funds to cover distribution
expenditures; and
WHEREAS, the Distributor is willing to act as principal underwriter and to
furnish such services on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1. Each Fund hereby appoints the Distributor as principal underwriter in
connection with the offer and sale of its Shares. The Distributor shall, as
agent for each Fund, subject to applicable federal and state law and the
Declaration of Trust or Articles of Incorporation, and By-laws of the applicable
Fund and in accordance with the representations in the applicable Fund's
Registration Statement and Prospectus, as such documents may be amended from
time to time: (a) promote the Series; (b) enter into appropriate dealer
agreements with other registered broker-dealers to further distribution of the
Shares; (c) solicit orders for the purchase of the Shares subject to such terms
and conditions as the applicable Fund may specify; (d) transmit promptly orders
and payments for the purchase of Shares and orders for redemption of Shares to
the applicable Fund's transfer agent; and (e) provide services agreed upon by
the applicable Fund to Series shareholders; provided, however, that the
Distributor may sell no Shares pursuant to this Agreement until the Distributor
is notified that a Fund's Registration Statement under the 1933 Act, authorizing
the sale of such Shares through the Distributor, has become effective. The
Distributor shall comply with all applicable federal and state laws and offer
the Shares on an agency or "best efforts" basis under which a Fund shall only
issue such Shares as are actually sold.
2. The public offering price of the Shares shall be the net asset value
("NAV") per share (as determined by the applicable Fund) of the outstanding
Shares of the Series, plus the applicable sales charge, if any, as set forth in
the Fund's then current Prospectus. Each Fund shall furnish the Distributor with
a statement of each computation of NAV and of the details entering into such
computation.
3. COMPENSATION.
a. DISTRIBUTION FEE.
i. CLASS A. In consideration of the Distributor's services as distributor
for the Class A Shares of a Fund, each Fund may pay to the Distributor the
Distribution Fee as set forth in Schedule II to this Agreement that is payable
pursuant to the Fund's Distribution Plan.
-1-
<PAGE>
ii. CLASS B. In consideration of the Distributor's services as distributor
for the Class B Shares of a Fund, each Fund shall pay to the Distributor (or its
designee or transferee) the Distributor's Allocable Portion of the Distribution
Fee; (as set forth in Schedule II to this Agreement) that is payable pursuant to
the Fund's Distribution Plan in respect of the Class B Shares of a Fund. For
purposes of this Agreement, the Distributor's "Allocable Portion" of the
Distribution Fee shall be 100% of such Distribution Fee unless or until the Fund
uses a principal underwriter other than the Distributor and thereafter the
Allocable Portion shall be the portion of the Distribution Fee attributable to
(i) Class B Shares of a Fund sold by the Distributor ("Commission Shares"), (ii)
Class B Shares of the Fund issued in connection with the exchange of Commission
Shares of another Fund, and (iii) Class B Shares of the Fund issued in
connection with the reinvestment of dividends and capital gains.
The Distributor's Allocable Portion of the Distribution Fee and the
contingent deferred sales charges arising in respect of Class B Shares taken
into account in computing the Distributor's Allocable Portion shall be limited
under Rule 2830 of the Conduct Rules or other applicable regulations of the NASD
as if the Class B Shares taken into account in computing the Distributor's
Allocable Portion themselves constituted a separate class of shares of a Fund.
The services rendered by the Distributor for which the Distributor is
entitled to receive the Distributor's Allocable Portion of the Distribution Fee
shall be deemed to have been completed at the time of the initial purchase of
the Commission Shares (whether of the Fund or another Fund in the Calvert Group
of Funds) taken into account in computing the Distributor's Allocable Portion.
Notwithstanding anything to the contrary in this Agreement, the Distributor
shall be paid its Allocable Portion of the Distribution Fee notwithstanding the
Distributor's termination as principal underwriter of the Class B Shares of a
Fund, or any termination of this Agreement other than in connection with a
Complete Termination (as defined in the Distribution Plan) of the Class B
Distribution Plan as in effect on the date of this Agreement. Except as provided
in the preceding sentence, a Fund's obligation to pay the Distribution Fee to
the Distributor shall be absolute and unconditional and shall not be subject to
any dispute, offset, counterclaim or defense whatsoever, (it being understood
that nothing in this sentence shall be deemed a waiver by a Fund of its right
separately to pursue any claims it may have against the Distributor and to
enforce such claims against any assets (other than its rights to be paid its
Allocable Portion of the Distribution Fee and to be paid the contingent deferred
sales charges) of the Distributor.
iii. CLASS C. In consideration of the Distributor's services as distributor
for the Class C Shares of a Fund, each Fund shall pay to the Distributor the
Distribution Fee as set forth in Schedule II to this Agreement that is payable
pursuant to the Fund's Distribution Plan.
b. SERVICE FEE. As additional compensation, for Class A, Class B and
Class C Shares of each Series, applicable Funds shall pay the Distributor a
service fee (as that term is defined by the National Association of Securities
Dealers, Inc. ("NASD")) as set forth in Schedule III to this Agreement that is
payable pursuant to the Fund's Distribution Plan.
c. FRONT-END SALES CHARGES. As additional compensation for the services
performed and the expenses assumed by the Distributor under this Agreement, the
Distributor may, in conformity with the terms and conditions set forth in the
then current Prospectus of each Fund, impose and retain for its own account the
amount of the front-end sales charge, if any, and may reallow a portion of any
front-end sales charge to other broker-dealers, all in accordance with NASD
rules.
d. CONTINGENT DEFERRED SALES CHARGE. Each Fund will pay to the
Distributor (or its designee or transferee) in addition to the fees set forth in
Section 3 hereof any contingent deferred sales charge imposed on redemptions of
that Fund's Class B and Class C Shares upon the terms and conditions set forth
in the then current Prospectus of that Fund. Notwithstanding anything to the
contrary in this Agreement, the Distributor shall be paid such contingent
deferred sales charges in respect of Class B Shares taken into account in
computing the Distributor's Allocable Portion of the Distribution Fee
notwithstanding the Distributor's termination as principal underwriter of the
Class B shares of a Fund or any termination of this Agreement other than in
connection with a Complete Termination of the Class B Distribution Plan as in
effect on the date of this Agreement. Except as provided in the preceding
sentence, a Fund's obligation to remit such contingent deferred sales charges to
the Distributor shall not
-2-
<PAGE>
be subject to any dispute, offset, counterclaim or defense whatsoever, it being
understood that nothing in this sentence shall be deemed a waiver by a Fund of
its right separately to pursue any claims it may have against the Distributor
and to enforce such claims against any assets (other than the Distributor's
right to be paid its Allocable Portion of the Distribution Fee and to be paid
the contingent deferred sales charges) of the Distributor. No Fund will waive
any contingent deferred sales charge except under the circumstances set forth in
the Fund's current Prospectus without the consent of the Distributor (or, if
rights to payment have been transferred, the transferee), which consent shall
not be unreasonably withheld.
4. PAYMENTS TO DISTRIBUTOR'S TRANSFEREES. The Distributor may transfer
the right to payments hereunder (but not its obligations hereunder) in order to
raise funds to cover distribution expenditures, and any such transfer shall be
effective upon written notice from the Distributor to the Fund. In connection
with the foregoing, the Fund is authorized to pay all or a part of the
Distribution Fee and/or contingent deferred sales charges in respect of Class B
Shares directly to such transferee as directed by the Distributor.
5. CHANGES IN COMPUTATION OF FEE, ETC. As long as the Class B
Distribution Plan is in effect, a Fund shall not change the manner in which the
Class B Distribution Fee is computed (except as may be required by a change in
applicable law or a change in accounting policy adopted by the Investment
Companies Committee of the AICPA and approved by FASB that results in a
determination by a Fund's independent accountants that any of the sales charges
in respect of such Fund, which are not contingent deferred sales charges and
which are not yet due and payable, must be accounted for by such Fund as a
liability in accordance with GAAP).
6. As used in this Agreement, the term "Registration Statement" shall
mean the registration statement most recently filed by a Fund with the
Securities and Exchange Commission and effective under the 1933 Act, as such
Registration Statement is amended by any amendments thereto at the time in
effect, and the term "Prospectus" shall mean the form of prospectus filed by a
Fund as part of the Registration Statement.
7. The Distributor shall print and distribute to prospective investors
Prospectuses, and may print and distribute such other sales literature, reports,
forms, and advertisements in connection with the sale of the Shares as comply
with the applicable provisions of federal and state law. In connection with such
sales and offers of sale, the Distributor shall give only such information and
make only such statements or representations, and require broker-dealers with
whom it enters into dealer agreements to give only such information and make
only such statements or representations, as are contained in the Prospectus or
in information furnished in writing to the Distributor by a Fund. The Funds
shall not be responsible in any way for any other information, statements or
representations given or made by the Distributor, other broker-dealers, or the
representatives or agents of the Distributor or such broker-dealers. Except as
specifically permitted under the Distribution Plan under Rule 12b-1 under the
1940 Act, as provided in paragraph 3 of this Agreement, the Funds shall bear
none of the expenses of the Distributor in connection with its offer and sale of
the Shares.
8. Each Fund agrees at its own expense to register the Shares with the
Securities and Exchange Commission, state and other regulatory bodies, and to
prepare and file from time to time such Prospectuses, amendments, reports and
other documents as may be necessary to maintain the Registration Statement. Each
Fund shall bear all expenses related to preparing and typesetting its
Prospectus(es) and other materials required by law and such other expenses,
including printing and mailing expenses related to the Fund's communications
with persons who are shareholders of such Fund.
9. Each Fund agrees to indemnify, defend and hold the Distributor, its
several officers and directors, and any person who controls the Distributor
within the meaning of Section 15 of the 1933 Act, free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Distributor, its
officers or directors, or any such controlling person may incur, under the 1933
Act or under common law or otherwise, arising out of or based upon any alleged
untrue statement of a material fact contained in its Registration Statement or
Prospectus or arising out of or based upon any alleged omission to state a
material fact required to be stated in either thereof or necessary to make the
statements in either thereof not misleading, provided that in no event shall
anything contained in this Agreement be construed so as to protect the
Distributor against any
-3-
<PAGE>
liability to a Fund or its shareholders to which the Distributor would
otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence, in the performance of its duties, or by reason of its reckless
disregard of its obligations and duties under this Agreement.
10. The Distributor agrees to indemnify, defend and hold each Fund, their
several officers and directors, and any person who controls a Fund within the
meaning of Section 15 of the 1933 Act, free and harmless from and against any
and all claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which a Fund, its officers or directors,
or any such controlling person may incur, under the 1933 Act or under common law
or otherwise, arising out of or based upon any alleged untrue statement or a
material fact contained in information furnished in writing by the Distributor
to the Funds for use in the Registration Statement or Prospectus(es) or arising
out of or based upon any alleged omission to state a material fact in connection
with such information required to be stated in the Registration Statement or
Prospectus(es) or necessary to make such information not misleading.
11. Each Fund reserves the right at any time to withdraw all offerings of
the Shares by written notice to the Distributor at its principal office.
12. The Distributor is an independent contractor and shall be agent for a
Fund only in respect to the offer, sale and redemption of that Fund's Shares.
13. The services of the Distributor to a Fund under this Agreement are not
to be deemed exclusive, and the Distributor shall be free to render similar
services or other services to others so long as its services hereunder are not
impaired thereby.
14. The Distributor acknowledges that it has received notice of and
accepts the limitations upon the liability of any Fund organized as a business
trust set forth in such Fund's Declaration of Trust. The Distributor agrees that
the obligations of such Funds hereunder in any case shall be limited to such
Funds and to their assets and that the Distributor shall not seek satisfaction
of any such obligation from the shareholders of such a Fund nor from any
Trustee, officer, employee or agent of such Fund.
15. The Funds shall not use the name of the Distributor in any Prospectus,
sales literature or other material relating to the Funds in any manner not
approved prior thereto by the Distributor; provided, however, that the
Distributor shall approve all uses of its name which merely refer in accurate
terms to its appointment hereunder or which are required by the Securities and
Exchange Commission or a State Securities Commission; and, provided further,
that in no event shall such approval be unreasonably withheld. The Distributor
shall not use the name of any Fund in any material relating to the Distributor
in any manner not approved prior thereto by the Fund; provided, however that the
Funds shall approve all uses of their names which merely refer in accurate terms
to the appointment of the Distributor hereunder or which are required by the
Securities and Exchange Commission or a State Securities Commission; and,
provided further, that in no event shall such approval be unreasonably withheld.
16. The Distributor shall prepare written reports for the Board of
Trustees/Directors of each Fund on a quarterly basis showing information
concerning services provided and expenses incurred which are related to this
Agreement and such other information as from time to time shall be reasonably
requested by a Fund's Board of Trustees/Directors.
17. As used in this Agreement, the terms "assignment," "interested
person," and "majority of the outstanding voting securities" shall have the
meaning given to them by Section 2(a) of the 1940 Act, subject to such
exemptions as may be granted by the Securities and Exchange Commission by any
rule, regulation or order; provided, however that, in order to obtain financing,
the Distributor may assign to a lending institution the payments due to the
Distributor under this Agreement without it constituting an assignment of the
Agreement.
18. Subject to the provisions of sections 19 and 20 below, this Agreement
will remain in effect for two years from the date of is execution and from year
to year thereafter, provided that the Distributor does not notify a Fund in
writing at least sixty (60) days prior to the expiration date in any year that
it does not wish
-4-
<PAGE>
continuance of the Agreement as to such Fund for an additional year.
19. TERMINATION. As to any particular Fund (or Series thereof), this
Agreement shall automatically terminate in the event of its assignment and may
be terminated at any time without the payment of any penalty by a Fund or by the
Distributor on sixty (60) days' written notice to the other party. A Fund may
effect such termination by a vote of (i) a majority of the Board of
Trustees/Directors of the Fund, (ii) a majority of the Trustees/Directors who
are not interested persons of the Fund, who are not parties to this Agreement or
interested persons of such parties, and who have no direct or indirect financial
interest in the operation of the Distribution Plan, in this Agreement or in any
agreement related to such Fund's Distribution Plan (the "Rule 12b-1
Trustees/Directors"), or (iii) a majority of the outstanding voting securities
of the relevant Series.
20. This Agreement shall be submitted for renewal to the Board of
Trustees/Directors of each Fund at least annually and shall continue in effect
only so long as specifically approved at least annually (i) by a majority vote
of the Fund's Board of Trustees/Directors, and (ii) by the vote of the majority
of the Rule 12b-1 Trustees/Directors of the Fund, cast in person at a meeting
called for the purpose of voting on such approval.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the date first above written by their officers thereunto duly
authorized.
Attest: EACH FUND LISTED IN THE
ATTACHED SCHEDULE I
By: /s/ Edwidge Saint-Felix By: /s/ William M. Tartikoff
Vice President
Attest: CALVERT DISTRIBUTORS, INC.
By: /s/ Edwidge Saint-Felix By: /s/ Ronald M. Wolfsheimer
Senior Vice President
-5-
<PAGE>
SCHEDULE I
The Calvert Fund
Calvert Tax-Free Reserves
Calvert Municipal Fund
Calvert Social Investment Fund
Calvert World Values Fund
Calvert New World Fund
First Variable Rate Fund
-6-
<PAGE>
SCHEDULE II
Fees are expressed as a percentage of average annual daily net assets, and are
payable monthly.
DISTRIBUTION FEE
<TABLE>
<CAPTION>
Class A* Class B Class C Class I
<S> <C> <C> <C> <C>
The Calvert Fund
New Vision Small Cap Fund N/A 0.75 0.75 N/A
Calvert Income Fund 0.25 0.75 0.75 N/A
Calvert Tax-Free Reserves
Money Market Portfolio N/A N/A N/A N/A
Limited-Term Portfolio N/A N/A N/A N/A
Long-Term Portfolio 0.10 0.75 0.75 N/A
California Money Market Port. N/A N/A N/A N/A
Vermont Municipal N/A 0.75 0.75 N/A
Calvert Municipal Fund
National Intermediate Fund N/A 0.75 N/A N/A
California Intermediate Fund N/A 0.75 N/A N/A
Maryland Intermediate Fund N/A 0.75 N/A N/A
Virginia Intermediate Fund N/A 0.75 N/A N/A
Calvert Social Investment Fund
Managed Growth Portfolio 0.10 0.75 0.75 N/A
Equity Portfolio 0.10 0.75 0.75 N/A
Bond Portfolio 0.10 0.75 0.75 N/A
Managed Index Portfolio N/A 0.75 0.75 N/A
Money Market Portfolio N/A N/A N/A N/A
Calvert World Values Fund
Capital Accumulation Fund 0.10 0.75 0.75 N/A
International Equity Fund 0.10 0.75 0.75 N/A
Calvert New World Fund
Calvert New Africa Fund N/A 0.75 0.75 N/A
First Variable Rate Fund
Calvert First Gov't Money Mkt N/A 0.75 N/A N/A
</TABLE>
*Distributor reserves the right to waive all or a portion of the distribution
fee from time to time.
DATED: February 1998
-7-
<PAGE>
SCHEDULE III
Fees are expressed as a percentage of average annual daily net assets and are
payable monthly.
SERVICE FEE
<TABLE>
<CAPTION>
Class A* Class B Class C Class I
<S> <C> <C> <C> <C>
The Calvert Fund
New Vision Small Cap Fund 0.25 0.25 0.25 N/A
Calvert Income Fund 0.25 0.25 0.25 N/A
Calvert Tax-Free Reserves
Money Market Portfolio N/A N/A N/A N/A
Limited-Term Portfolio N/A N/A N/A N/A
Long-Term Portfolio 0.25 0.25 0.25 N/A
California Money Market Port. N/A N/A N/A N/A
Vermont Municipal N/A 0.25 0.25 N/A
Calvert Municipal Fund
National Intermediate Fund 0.25 0.25 N/A N/A
California Intermediate Fund 0.25 0.25 N/A N/A
Maryland Intermediate Fund 0.25 0.25 N/A N/A
Virginia Intermediate Fund 0.25 0.25 N/A N/A
Calvert Social Investment Fund
Managed Growth Portfolio 0.25 (+) 0.25 0.25 N/A
Equity Portfolio 0.25 0.25 0.25 N/A
Bond Portfolio 0.25 0.25 0.25 N/A
Managed Index Portfolio 0.25 0.25 0.25 N/A
Money Market Portfolio 0.25 N/A N/A N/A
Calvert World Values Fund
Capital Accumulation Fund 0.25 0.25 0.25 N/A
International Equity Fund 0.25 0.25 0.25 N/A
Calvert New World Fund
Calvert New Africa Fund 0.25 0.25 0.25 N/A
First Variable Rate Fund
Calvert First Gov't Money Mkt N/A 0.25 N/A N/A
</TABLE>
DATED: February 1998
- ------------------------------
* Distributor reserves the right to waive all or a portion of the service fees
from time to time. For money market portfolios, Class A shall refer to Class O,
or if the portfolio does not have multiple classes, then to the portfolio
itself.
+ Distributor charges the service fee only on assets in excess of $30 million.
-8-
<PAGE>
Exhibit 10
March 27, 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. 9 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. 9 to its Registration Statement.
Sincerely,
/s/ Susan Walker Bender
Susan Walker Bender
Associate General Counsel
<PAGE>
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. 9 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 November 7,
1997 on our audit of the financial statements and financial highlights of
International Equity Fund, and of our reports dated May 9, 1997 on our audit
of the financial statements and financial highlights of Calvert Capital
Accumulation Fund, which reports are included in the Annual Report to
Shareholders for the year ended September 30, 1997 for International Equity
and March 31, 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
March 20, 1998
<PAGE>
Exhibit 24
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
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<PAGE>
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<NAME> CALVERT WORLD VALUES FUND, INC.
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<NAME> INTERNATIONAL EQUITY PORTFOLIO, CLASS A
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<SHARES-COMMON-PRIOR> 10422
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<EXPENSES-NET> 3629
<NET-INVESTMENT-INCOME> 1059
<REALIZED-GAINS-CURRENT> 7909
<APPREC-INCREASE-CURRENT> 31372
<NET-CHANGE-FROM-OPS> 40340
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (525)
<DISTRIBUTIONS-OF-GAINS> (4308)
<DISTRIBUTIONS-OTHER> 0
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<NUMBER-OF-SHARES-REDEEMED> (40829)
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<NET-CHANGE-IN-ASSETS> 31136
<ACCUMULATED-NII-PRIOR> 604
<ACCUMULATED-GAINS-PRIOR> 4412
<OVERDISTRIB-NII-PRIOR> 0
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3927
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<PER-SHARE-DIVIDEND> (0.05)
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</TABLE>
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<ARTICLE> 6
<CIK> 0000884110
<NAME> CALVERT WORLD VALUES FUND, INC.
<SERIES>
<NUMBER> 156
<NAME> INTERNATIONAL EQUITY PORTFOLIO, CLASS C
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
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<INVESTMENTS-AT-VALUE> 242801
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<NET-INVESTMENT-INCOME> (35)
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<APPREC-INCREASE-CURRENT> 1163
<NET-CHANGE-FROM-OPS> 1422
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (159)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1999
<NUMBER-OF-SHARES-REDEEMED> (1392)
<SHARES-REINVESTED> 151
<NET-CHANGE-IN-ASSETS> 2021
<ACCUMULATED-NII-PRIOR> (80)
<ACCUMULATED-GAINS-PRIOR> (12)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 221
<AVERAGE-NET-ASSETS> 7587
<PER-SHARE-NAV-BEGIN> 18.20
<PER-SHARE-NII> (0.07)
<PER-SHARE-GAIN-APPREC> 3.68
<PER-SHARE-DIVIDEND> 0.0
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<PER-SHARE-NAV-END> 21.39
<EXPENSE-RATIO> 2.76
<AVG-DEBT-OUTSTANDING> 0
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</TABLE>
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<CIK> 0000884110
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<SERIES>
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<SHARES-COMMON-PRIOR> 1929
<ACCUMULATED-NII-CURRENT> (228)
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<ACCUMULATED-NET-GAINS> 5011
<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 54751
<DIVIDEND-INCOME> 181
<INTEREST-INCOME> 35
<OTHER-INCOME> 0
<EXPENSES-NET> 443
<NET-INVESTMENT-INCOME> (227)
<REALIZED-GAINS-CURRENT> 2459
<APPREC-INCREASE-CURRENT> 9239
<NET-CHANGE-FROM-OPS> 11471
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 474
<NUMBER-OF-SHARES-REDEEMED> 391
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 83
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 450
<AVERAGE-NET-ASSETS> 53558
<PER-SHARE-NAV-BEGIN> 21.29
<PER-SHARE-NII> (.11)
<PER-SHARE-GAIN-APPREC> 6.03
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 27.21
<EXPENSE-RATIO> 1.84
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
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<ARTICLE> 6
<CIK> 0000884110
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<SERIES>
<NUMBER> 222
<NAME> CALVERT CAPITAL ACCUMULATION FUND, CLASS C
<MULTIPLIER> 1000
<S> <C>
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<SHARES-COMMON-PRIOR> 146
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<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 271
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<NET-INVESTMENT-INCOME> (38)
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<DISTRIBUTIONS-OF-INCOME> 0
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<ACCUMULATED-NII-PRIOR> 0
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<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
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<GROSS-EXPENSE> 54
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<PER-SHARE-NAV-BEGIN> 20.96
<PER-SHARE-NII> (.24)
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</TABLE>
<PAGE>
SUB-TRANSFER AGENCY AND SERVICE AGREEMENT
between
CALVERT SHAREHOLDER SERVICES, INC.
and
STATE STREET BANK AND TRUST COMPANY
-1-
<PAGE>
TABLE OF CONTENTS
1. Duties of the Bank. . . . . . . . . . . . . . . . . . . . . . . 1
2. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . 3
3 Wire Transfer Operating Guidelines. . . . . . . . . . . . . . . 4
4. Data Access and Proprietary Information . . . . . . . . . . . . 5
5. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 6
6. Standard of Care. . . . . . . . . . . . . . . . . . . . . . . . 8
7. Covenants of the Transfer Agent and the Bank. . . . . . . . . . 8
8. Representations and Warranties of the Bank. . . . . . . . . . . 9
9. Representations and Warranties of the Transfer Agent. . . . . . 9
10. Termination of Agreement. . . . . . . . . . . . . . . . . . . .10
11 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . .10
12. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . .10
13. Massachusetts Law to Apply. . . . . . . . . . . . . . . . . . .10
14. Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . .11
15. Consequential Damages . . . . . . . . . . . . . . . . . . . . .11
16. Limitation of Shareholder Liability . . . . . . . . . . . . . .11
17. Merger of Agreement . . . . . . . . . . . . . . . . . . . . . .11
18. Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . .11
19. Severability. . . . . . . . . . . . . . . . . . . . . . . . . .11
20. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . .12
-2-
<PAGE>
SUB-TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 15th day of August, 1996, by and between,
Calvert Shareholder Services, Inc. a corporation, having its principal office
and place of business at 4550 Montgomery Ave. Suite 1000N, Bethesda,
Maryland, 20814 (the "Transfer Agent"), and STATE STREET BANK AND TRUST
COMPANY, a Massachusetts trust company having its principal office and place
of business at 225 Franklin Street, Boston, Massachusetts 02110 (the "Bank");
WHEREAS, the Transfer Agent has been appointed by each of the investment
companies (including each series thereof) listed on Schedule A (the
"Fund(s)"), each an open-end management investment company registered under
the Investment Company Act of 1940, as amended, as transfer agent, dividend
disbursing agent and shareholder servicing agent in connection with certain
activities, and the Transfer Agent has accepted each such appointment;
WHEREAS, the Transfer Agent has entered into a Transfer Agency and
Service Agreement with each of the Funds (including each series thereof)
listed on Schedule A pursuant to which the Transfer Agent is responsible for
certain transfer agency and dividend disbursing functions for each Fund's
authorized and issued shares of common stock or shares of beneficial interest
as the case may be ("Shares") and each Fund's shareholders ("Shareholders")
and the Transfer Agent is authorized to subcontract for the performance of
its obligations and duties thereunder in whole or in part with the Bank;
WHEREAS, the Transfer Agent desires to appoint the Bank as its
sub-transfer agent, and the Bank desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenant herein
contained, the parties hereto agree as follows:
1. DUTIES OF THE BANK
1.1 Subject to the terms and conditions set forth in this Agreement, the
Bank shall act as the Transfer Agent's sub-transfer agent for Shares in
connection with any accumulation plan, open account, dividend reinvestment
plan, retirement plan or similar plan provided to Shareholders and set out in
each Fund's currently effective prospectus and statement of additional
information ("Prospectus"), including without limitation any periodic
investment plan or periodic withdrawal program. As used herein the term
'"Shares" means the authorized and issued shares of common stock, or shares
of beneficial interest, as the case may be, for each Fund listed in Schedule
A. In accordance with procedures established from time to time by agreement
between the Transfer Agent and the Bank, the Bank shall provide the services
listed in this Section 1.
(a) The Bank shall:
(i) receive for acceptance, orders for the purchase of Shares, and
promptly deliver payment and appropriate documentation thereof to the
Custodian of each
-3-
<PAGE>
Fund authorized pursuant to the Articles of Incorporation or
organization of each Fund (the "Custodian");
(ii) pursuant to purchase orders, issue the appropriate number of
Shares and hold such Shares in the appropriate Shareholder account;
(iii) receive for acceptance redemption requests and redemption
directions and deliver the appropriate documentation thereof to the
Custodian;
(iv) in respect to the transactions in items (i), (ii) and
(iii) above, the Bank shall execute transactions directly with
broker-dealers authorized by each Fund;
(v) at the appropriate time as and when it receives monies paid to
it by the Custodian with respect to any redemption, pay over or cause
to be paid over in the appropriate manner such monies as instructed
by the redeeming Shareholders;
(vi) effect transfers of Shares by the registered owners thereof
upon receipt of appropriate instructions;
(vii) prepare and transmit payments for dividends and distributions
declared by each Fund;
(viii) issue replacement certificates for those certificates alleged
to have been lost, stolen or destroyed upon receipt by the Bank of
indemnification satisfactory to the Bank and protecting the Bank and
each Fund, and the Bank at its option, may issue replacement
certificates in place of mutilated stock certificates upon
presentation thereof and without such indemnity;
(ix) maintain records of account for and advise the Transfer Agent
and its Shareholders as to the foregoing; and
(x) Record the issuance of Shares of each Fund and maintain
pursuant to Rule 17Ad-10(e) of the Securities Exchange Act of 1934 as
amended (the "Exchange Act of 1934") a record of the total number of
Shares of each Fund which are authorized, based upon data provided to
it by each Fund or the Transfer Agent, and issued and outstanding.
The Bank shall also provide each Fund on a regular basis with the
total number of Shares which are authorized and issued and outstanding
and shall have no obligation, when recording the issuance of Shares,
to monitor the issuance of such Shares or to take cognizance of any
laws relating to the issue or sale of such Shares, which functions
shall be the sole responsibility of each Fund or the Transfer Agent.
1.2 (a) For reports, the Bank shall:
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(i) maintain all Shareholder accounts, prepare meeting, proxy,
and mailing lists, withhold taxes on US resident and non-resident
alien accounts, prepare and file US Treasury Department reports
required with respect to interest, dividends and distributions by
federal authorities for all Shareholders, prepare confirmation forms
and statements of account to Shareholders for all purchases and
redemptions of Shares and other confirmable transactions in
Shareholder account information.
(b) For blue sky reporting the Bank shall provide a system that will
enable each Fund or the Transfer Agent to monitor the total number of
Shares sold in each State, and each Fund or the Transfer Agent shall:
(i) identify to the Bank in writing those transactions and assets
to be treated as exempt from blue sky reporting for each State; and
(ii) verify the establishment of transactions for each State on the
System prior to the activity for each State, the responsibility of
the Bank for each Fund's blue sky state registration status is solely
limited to the initial establishment of transactions subject to blue
sky compliance by the Fund or the Transfer Agent and the reporting of
such transactions to the Fund as provided above.
1.3 Per the attached service responsibility schedule procedures as to who
shall provide certain of these services in Section 1 may be established from
time to time by agreement between the Transfer Agent and the Bank. The Bank
may at times perform only a portion of these services and the Transfer Agent
may perform these services on each Fund's behalf.
1.4 The Bank shall provide additional services on behalf of the Transfer
Agent (i.e., escheat services) that may be agreed upon in writing between the
Bank and the Transfer Agent.
2. FEES AND EXPENSES
2.1 For the performance by the Bank pursuant to this Agreement, the Transfer
Agent agrees to pay the Bank an annual maintenance fee for each Shareholder
account as set out in the initial fee schedule attached hereto. Such fees and
out-of-pocket expenses and advances identified under Section 2.2 below may be
changed from time to time subject to mutual written agreement between the
Transfer Agent and the Bank.
2.2 In addition to the fee paid under Section 2.1 above, the Transfer Agent
agrees to reimburse the Bank for out-of-pocket expenses, including, but not
limited to confirmation production, postage, forms, telephone, microfilm,
microfiche, tabulating proxies, records storage, or advances incurred by the
Bank for the items set out in the fee schedule attached hereto. In addition,
any other expenses incurred by the Bank at the request or with the consent of
the Transfer Agent, will be reimbursed by the Transfer Agent.
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2.3 The Transfer Agent agrees to pay all fees and reimbursable expenses
within fifteen days following the receipt of the respective billing notice.
Postage for mailing of dividends, proxies, Fund reports and other mailings to
all shareholder accounts shall be advanced to the Bank by the Transfer Agent
at least seven (7) days prior to the mailing date of such materials.
3. WIRE TRANSFER OPERATING GUIDELINES/ARTICLES 4A OF THE UNIFORM COMMERCIAL
CODE
3.1 The Bank is authorized to promptly debit the appropriate Transfer Agent
account(s) upon the receipt of a payment order in compliance with the
selected security procedure (the "Security Procedure") chosen for funds
transfer and in the amount of money that the Bank has been instructed to
transfer. The Bank shall execute payment orders in compliance with the
Security Procedure and with the Transfer Agent's instructions on the
execution date provided that such payment order is received by the customary
deadline for processing such a request, unless the payment order specifies a
later time. All payment orders and communications received after this time
frame will be deemed to have been received the next business day.
3.2 The Transfer Agent acknowledges that the Security Procedure it has
designated on the Transfer Agent Selection Form was selected by the Transfer
Agent from security procedures offered by the Bank. The Transfer Agent shall
restrict access to confidential information relating to the Security
Procedure to authorized persons as communicated to the Bank in writing. The
Transfer Agent must notify the Bank immediately if it has reason to believe
unauthorized persons may have obtained access to such information or of any
change in the Transfer Agent's authorized personnel. The Bank shall verify
the authenticity of all such instructions according to the Security Procedure.
3.3 The Bank shall process all payment orders on the basis of the account
number contained in the payment order. In the event of a discrepancy between
any name indicated on the payment order and the account number, the account
number shall take precedence and govern.
3.4 When a Transfer Agent initiates or receives Automated Clearing House
("ACH") credit and debit entries pursuant to these guidelines and the rules
of the National Automated Clearing House Association and the New England
Clearing House Association, the Bank will act as an Originating Depository
Financial Institution and/or receiving Depository Financial Institution, as
the case may be, with respect to such entries. Credits given by the Bank with
respect to an ACH credit entry are provisional until the Bank receives final
settlement for such entry from the Federal Reserve Bank. If the Bank does not
receive such final settlement, the Transfer Agent agrees that the Bank shall
receive a refund of the amount credited to the Transfer Agent in connection
with such entry, and the party making payment to the Transfer Agent via such
entry shall not be deemed to have paid the amount of the entry.
3.5 The Bank reserves the right to decline to process or delay the
processing of a payment order which (a) is in excess of the collected balance
in the account to be charged at the time of the Bank's receipt of such
payment order, or (b) if the Bank, in good faith, is unable to satisfy itself
that the transaction has been properly authorized.
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3.6 The Bank shall use reasonable efforts to act on all authorized requests
to cancel or amend payment orders received if requests are received in a
timely manner affording the Bank reasonable opportunity to act. However, the
Bank assumes no liability if the request for amendment or cancellation cannot
be satisfied.
3.7 The Bank shall assume no responsibility for failure to detect any
erroneous payment order provided that the Bank complies with the payment
order instructions as received and the Bank complies with the Security
Procedure. The Security Procedure is established for the purpose of
authenticating payment orders only and not for the detection of errors in
payment orders.
3.8 The Bank shall assume no responsibility for lost interest with respect
to the retransfer Agentable amount of any unauthorized payment order unless
the Bank is notified of the unauthorized payment order within thirty (30)
days of notification by the Bank of the acceptance of such payment order. In
no event (including failure to execute a payment order) shall the Bank be
liable for special, indirect or consequential damages, even if advised of the
possibility of such damages.
3.9 Confirmation of Bank's execution of payment orders shall ordinarily be
provided within 24 hours notice of which may be delivered through the Bank's
proprietary information systems, or by facsimile or call-back. Client must
report any objections to the execution of an order within 30 days.
4. DATA ACCESS AND PROPRIETARY INFORMATION
The Transfer Agent acknowledges that the data bases, computer programs, screen
formats, report formats, interactive design techniques, and other information
furnished to the Transfer Agent by the Bank are provided solely in connection
with the services rendered under this Agreement and constitute copyrighted trade
secrets or proprietary information of substantial value to the Bank. Such
databases, programs, formats, designs, techniques and other information are
collectively referred to below as "Proprietary Information". The Transfer Agent
agrees that it shall treat all Proprietary Information as proprietary to the
Bank and further agrees that it shall not divulge any Proprietary Information to
any person or organization except as expressly permitted hereunder. The Transfer
Agent agrees for itself and its employees and Agents:
(a) to use such programs and databases (i) solely on the Transfer Agent's
computers, or (ii) solely from equipment at the locations agreed to between
the Transfer Agent and the Bank and (iii) in accordance with the Bank's
applicable user documentation;
(b) to refrain from copying or duplicating in any way (other than in the
normal course of performing processing on the Transfer Agent's computers)
any part of any Proprietary Information;
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(c) to refrain from obtaining unauthorized access to any programs, data or
other information not owned by the Transfer Agent, and if such access is
accidentally obtained, to respect and safeguard the same Proprietary
Information;
(d) to refrain from causing or allowing proprietary information
transmitted from the Bank's computer to the Transfer Agent's terminal to be
retransmitted to any other computer terminal or other device except as
expressly permitted by the Bank, such permission not to be unreasonably
withheld;
(e) that the Transfer Agent shall have access only to those authorized
transactions as agreed to between the Transfer Agent and the Bank; and
(f) to honor reasonable written requests made by the Bank to protect at
the Bank's expense the rights of the Bank in Proprietary Information at
common law and under applicable statutes.
Each party shall take reasonable efforts to advise its employees of their
obligations pursuant to this Section 4.
5. INDEMNIFICATION
5.1 Except as provided in Section 6, herein, the Bank shall not be
responsible for, and the Transfer Agent shall indemnify and hold the Bank
harmless from and against, any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liability arising out of or attributable
to:
(a) all actions of the Bank or its agent or subcontractors required to be
taken pursuant to this Agreement, provided that such actions are taken in
good faith and without negligence or willful misconduct;
(b) the Transfer Agent's lack of good faith, negligence or willful
misconduct;
(c) the reliance on or use by the Bank or its agents or subcontractors of
information, records, documents or services which (i) are given to the
Bank or its agents or subcontractors, and (ii) have been prepared,
maintained or performed by the Transfer Agent or any other person or firm
on behalf of the Transfer Agent including but not limited to any previous
transfer agent or registrar excluding the Bank;
(d) the reliance on, or the carrying out by the Bank or its agents or
subcontractors of any instructions or requests of the Transfer Agent; and
(e) the offer or sale of Shares in violation of any requirement under the
federal securities laws or regulations or the securities laws or
regulations of any state that such Shares be registered in such state or in
violation of any stop order or other determination
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or ruling by any federal agency or any state with respect to the offer or
sale of such Shares in such state.
5.2 At any time the Bank may apply to any officer of the Transfer Agent for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by the Bank under
this Agreement, and the Bank and its Agents or subcontractors shall not be
liable and shall be indemnified by the Transfer Agent for any action taken or
omitted by it in reliance upon such instructions or upon the opinion of such
counsel.
The Bank, its agents and subcontractors shall be protected and indemnified in
acting upon any paper or document furnished by or on behalf of the Transfer
Agent, reasonably believed by the Batik as being in good order and to have been
signed by the proper person or persons, or upon any instruction, information,
data, records or documents provided the Bank or its Agents or subcontractors by
machine readable input, telex, CRT data entry or other similar means authorized
by the Transfer Agent, and shall not be held to have notice of any change of
authority of any person, until receipt of written notice thereof from the
Transfer Agent. The Bank, its agents and subcontractors shall also be protected
and indemnified in recognizing stock certificates which are reasonably believed
to bear the proper manual or facsimile signatures of the officers of the
Transfer Agent, and the proper countersignature of the Transfer Agent or any
former transfer agent or former registrar, or of a co-transfer agent or
co-registrar.
5.3 In order that the indemnification provisions contained in this Section 5
shall apply, upon the assertion of a claim for which the Transfer Agent may
be required to indemnify the Bank, the Bank shall promptly notify the
Transfer Agent of such assertion, and shall keep the Transfer Agent advised
with respect to all developments concerning such claim. The Transfer Agent
shall have the option to participate with the Bank in the defense of such
claim or to defend against said claim in its own name or in the name of the
Bank. The Bank shall in no case confess any claim or make any compromise in
any case in which the Transfer Agent may be required to indemnify the Bank
except with the Transfer Agent's prior written consent.
6. STANDARD OF CARE
6.1 The Bank shall at all times act in good faith and agrees to use its best
efforts within reasonable limits to insure the accuracy of all services
performed under this Agreement, but assumes no responsibility and shall not
be liable for loss or damage due to errors unless said errors are caused by
its negligence, bad faith, or willful misconduct or that of its employees.
6.2 The Bank shall work with the Transfer Agent to ensure that a Fund is
made whole by the responsible party for any material losses or damages
resulting from errors, material unreconciled items, carelessness, negligence,
bad faith, or willful misconduct by the Bank or its agents or subcontractors,
or that of their employees. Neither the Bank, its agents or subcontractors,
nor the Transfer Agent may waive full liability for losses or damages based
on the above.
6.3 Errors identified as caused by the sub-transfer agent will not be
charged to the Funds in the monthly billing.
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7. COVENANTS OF THE TRANSFER AGENT AND THE BANK
7.1 The Bank hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Transfer Agent for safekeeping of
stock certificates, check forms and facsimile signature imprinting devices,
if any; and for the preparation or use, and for keeping account of, such
certificates, forms and devices.
7.2 The Bank shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the Investment Company Act of 1940, as amended, and
the Rules thereunder, the Bank agrees that all such records prepared or
maintained by the Bank relating to the services to be performed by the Bank
hereunder are the property of the Transfer Agent and will be preserved,
maintained and made available in accordance with such Section and Rules, and
will be surrendered promptly to the Transfer Agent on and in accordance with
its request.
7.3 The Bank and the Transfer Agent agree that all books, records,
information and data pertaining to the business of the other party which are
exchanged or received pursuant to the negotiation or the carrying out of this
Agreement shall remain confidential, and shall not be voluntarily disclosed
to any other person, except as may be required by law.
7.4 In case of any requests or demands for the inspection of the Shareholder
records of the Transfer Agent, the Bank will endeavor to notify the Transfer
Agent and to secure instructions from an authorized officer of the Transfer
Agent as to such inspection. The Bank reserves the right, however, to exhibit
the Shareholder records to any person whenever it is advised by its counsel
that it may be held liable for the failure to exhibit the Shareholder records
to such person.
8. REPRESENTATIONS AND WARRANTIES OF THE BANK
The Bank represents and warrants to the Transfer Agent that:
(a) it is a trust company duly organized and existing and in good standing
under the laws of The Commonwealth of Massachusetts;
(b) it is duly qualified to carry on its business in The Commonwealth of
Massachusetts;
(c) it is empowered under applicable laws and by its Charter and By-Laws
to enter into and perform this Agreement;
(d) all requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement;
(e) it has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement; and
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(f) it is registered as a transfer agent undo Section 17A(c)(2) of the
Exchange Act.
9. REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT
The Transfer Agent represents and warrants to the Bank that:
(a) it is a corporation duly organized and existing and in good standing
under the laws of the State of Delaware;
(b) it is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement;
(c) all corporate proceedings required by said Articles of Incorporation
and By-Laws have been taken to authorize it to enter into and perform
this Agreement.
(d) it is registered as a transfer agent under Section 17A(c)(2) of the
Exchange Act.
10. TERMINATION OF AGREEMENT
10.1 This Agreement shall continue for a period of five years (the "Initial
Term") and be renewed or terminated as stated below.
10.2 This Agreement shall terminate upon the termination of the Transfer
Agency Agreement between the Funds and the Transfer Agent.
10.3 This Agreement may be terminated or renewed after the Initial Term by
either party upon ninety (90) days written notice to the other.
10.4 Should the Transfer Agent exercise its right to terminate, all
reasonable out-of-pocket expenses associated with the movement of records and
material will be borne by the Transfer Agent. Additionally, the Bank reserves
the right to charge for any other reasonable expenses associated with such
termination and/or a charge equivalent to the average of three (3) months'
fees.
11. ASSIGNMENT
11.1 Except as provided in Section 11.3 below, neither this Agreement nor any
rights or obligations hereunder may be assigned by either party without the
written consent of the other party.
11.2 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
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11.3 The Bank will, without further consent on the part of the Transfer
Agent, subcontract for the performance hereof with National Financial Data
Services, Inc., a subsidiary of BFDS duly registered as a transfer agent
pursuant to Section 17A(c)(2) provided, however, that the Bank shall be as
fully responsible to the Transfer Agent for the acts and omissions of any
subcontractor as it is for its own acts and omissions.
12. AMENDMENT
This Agreement may be amended or modified by a written agreement executed by
both parties.
13. MASSACHUSETTS LAW TO APPLY
This Agreement shall be construed and the provisions thereof interpreted under
and in accordance with the laws of The Commonwealth of Massachusetts.
14. FORCE MAJEURE
In the event either party is unable to perform its obligations under the terms
of this Agreement because of acts of God, strikes, equipment or transmission
failure or damage reasonably beyond its control, or other causes reasonably
beyond its control, such party shall not be liable for damages to the other for
any damages resulting from such failure to perform or otherwise from such
causes.
15. CONSEQUENTIAL DAMAGES
Neither party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement or for any
consequential damages arising out of any act or failure to act hereunder.
16. LIMITATIONS OF SHAREHOLDER LIABILITY
Each party hereby expressly acknowledges that recourse against the Funds shall
be subject to those limitations provided by governing law and the Declaration of
Trust or Articles of Incorporation of the Funds, as applicable, and agrees that
obligations assumed by the Funds pursuant to the Transfer Agency Agreement shall
be limited in all cases to the Funds and their respective assets. Each party
shall not seek satisfaction from the Shareholders or any individual Shareholder
of the Funds, nor shall any party seek satisfaction of any obligations from the
Directors\Trustees or any individual Director\Trustee of the Funds.
17. MERGER OF AGREEMENT
This Agreement constitutes the entire agreement between the parties hereto and
supersedes any prior agreement with respect to the subject matter hereof whether
oral or written.
18. SURVIVAL
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All provisions regarding indemnification, warranty, liability, and limits
thereon, and confidentiality and/or protection of proprietary rights and trade
secrets shall survive the termination of this Agreement.
19. SEVERABILITY
If any provision or provisions of this Agreement shall be held invalid,
unlawful, or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired.
20. COUNTERPARTS
This Agreement may be executed by the parties hereto on any number of
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized
officers, as of the day first written above.
CALVERT SHAREHOLDER SERVICES, INC.
BY: /s/ Karen Becker
TITLE: Vice President
ATTEST: Katherine Stoner
STATE STREET BANK AND TRUST COMPANY
BY: /s/ Ronald E. Logue
TITLE: Executive Vice President
ATTEST: Francine Hayes
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AMENDMENT TO SUB-TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
CALVERT SHAREHOLDER SERVICES, INC.
AND
STATE STREET BANK AND TRUST COMPANY
GENERAL BACKGROUND:
Calvert Shareholder Services, Inc. ("CSSI"), and State Street Bank and Trust
Company ("State Street") entered into a sub-transfer agency and service
agreement ("Agreement") dated August 15, 1996.
For accounting reasons, CSSI desires to amend the Agreement by assigning the
contract for the transfer agent functions (except for shareholder servicing) to
each Calvert Group Fund. CSSI will continue to be responsible for the
shareholder servicing and for any responsibilities currently shown as Transfer
Agent responsibilities in Fund Service Responsibilities attachment to the
Agreement.
The Agreement must be assigned to the Calvert Group Funds for accounting
purposes.
CSSI and State Street must each consent to this assignment.
CHANGES CAUSED BY THIS ASSIGNMENT:
The current subtransfer agent, National Financial Data Services, Inc. ("NFDS"),
will bill each Calvert Group Fund, rather than CSSI, and each Calvert Group Fund
shall pay State Street or its billing agent, NFDS, all fees and expenses
incurred under the Agreement on behalf of each respective Calvert Group Fund.
NFDS will be shown in each Calvert Group Fund prospectus and statement of
additional information as the Transfer Agent, while CSSI will be shown as the
shareholder servicing agent.
State Street (NFDS) will continue to perform those functions shown in the
Agreement as Bank responsibilities.
CSSI will continue to perform the Transfer Agent responsibilities, as shown in
the Fund Service Responsibilities attachment to the Agreement.
THE ASSIGNMENT:
THIS AMENDMENT, dated as of the first day of January, 1998, by and among CSSI
and State Street:
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NOW, THEREFORE, CSSI and State Street each hereby agree that the Agreement will
be between each Calvert Group Fund and State Street, and each hereby agrees that
the Agreement is so assigned.
IN WITNESS WHEREOF, CSSI and State Street have caused this Amendment to be
executed by their duly authorized officers, effective as of January 1, 1998.
Calvert Shareholder Services, Inc. State Street Bank and Trust Company
By: /s/ By: /s/
Name: Karen Becker Name: Ronald E. Logue
Title: Vice President, Operations Title: Executive Vice President
Date: February 18, 1998 Date: February 20, 1998
Acacia Capital Corporation
First Variable Rate Fund
Calvert Tax-Free Reserves
Calvert Social Investment Fund
Calvert Cash Reserves
The Calvert Fund By: /s/
Calvert Municipal Fund, Inc. Name: William M. Tartikoff
Calvert World Values Fund, Inc. Title: Senior Vice President
Calvert New World Fund, Inc. and Secretary
Date: February 18, 1998
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SERVICING AGREEMENT
This Agency Agreement, effective January 1, 1998, by and between Calvert
Shareholder Services, Inc., a Delaware corporation having its principal place of
business in Bethesda, Maryland ("CSS"), and registered investment companies
sponsored by Calvert Group, Ltd. and its subsidiaries and set forth on Schedule
A ("Calvert Group Funds" or "Funds"). The Funds have entered into a transfer
agency and service agreement with the State Street Bank and Trust of Boston,
Massachusetts ("State Street") ("State Street Agreement").
1. APPOINTMENTS. The Funds hereby appoints CSS as servicing agent, agent
and shareholder servicing agent for the Funds, and CSS hereby accepts such
appointment and agrees to perform those duties in accordance with the terms and
conditions set forth in this Agreement.
2. DOCUMENTATION. The Funds will furnish CSS with all documents,
certificates, contracts, forms, and opinions which CSS, in its discretion, deems
necessary or appropriate in connection with the proper performance of its duties
under this Agreement.
3. SERVICES TO BE PERFORMED. CSS will be responsible for telephone
servicing functions, system interface with State Street and oversight of State
Street's administering and performing their duties pursuant to the State Street
Agreement. The details of the operating standards and procedures to be followed
will be determined from time to time by agreement between CSS and the Funds.
4. RECORDKEEPING AND OTHER INFORMATION. CSS will, commencing on the
effective date of this Agreement, to the extent necessary create and maintain
all necessary shareholder accounting records in accordance with all applicable
laws, rules and regulations, including but not limited to records required by
Section 31(a) of the Investment Company Act of 1940, as amended (the "1940
Act"), and the rules thereunder, as amended from time to time. All such records
will be the property of the Fund and will be available for inspection and use by
such Fund.
5. AUDIT, INSPECTION AND VISITATION. CSS will make available during
regular business hours all records and other data created and maintained
pursuant to this Agreement for reasonable audit and inspection by the SEC, a
Fund or any person retained by a Fund.
6. COMPENSATION. The Funds will compensate CSS on a monthly basis for the
services performed pursuant to this Agreement, at the rate of compensation set
forth in Schedule A. Out of pocket expenses incurred by CSS and not included in
Schedule A will be reimbursed to CSS by the Fund, as appropriate; such expenses
may include, but are not limited to, special forms and postage for mailing the
forms. These charges will be payable in full upon receipt of a billing invoice.
In lieu of reimbursing CSS for these expenses, any Fund may, in its discretion,
directly pay the expenses.
7. USE OF NAMES. No Fund will not use the name of CSS in any prospectus,
sales literature or other material relating to the Fund in any manner without
prior approval by CSS; provided, however, that CSS will approve all uses of its
name that merely refer in accurate terms to its appointment under this Agreement
or that are required by the SEC or a State Securities Commission; and, provided,
further, that in no event will approval be unreasonably withheld.
8. SECURITY. CSS represents and warrants that, to the best of its
knowledge, the various procedures and systems that CSS proposes to implement
with regard to safeguarding from loss or damage attributable to fire, theft or
any other cause (including provision for twenty-four hour a day restricted
access) the Fund's, records and other data and CSS's records, data, equipment,
facilities and other property used in the performance of its obligations under
this Agreement are adequate and that it will implement them in the manner
proposed and make such changes from time to time as in its judgment are required
for the secure performance of obligations under this Agreement.
9. LIMITATION OF LIABILITY. Each Fund will indemnify and hold CSS
harmless against any losses, claims, damages, liabilities or expenses (including
reasonable counsel fees and expenses) resulting from any claim, demand, action
or suit brought by any person (including a shareholder naming such Fund as a
party) other than such Fund not resulting from CSS's bad faith, willful
misfeasance, reckless disregard of its obligations and duties, or negligence
arising out of, or in connection with, CSS's performance of its obligations
under this Agreement.
To the extent CSS has not acted with bad faith, willful misfeasance,
reckless disregard of its obligations and duties, or gross negligence, each Fund
will also indemnify and hold CSS harmless against any losses, claims, damages,
liabilities or expenses (including reasonable counsel fees and expenses)
resulting from any claim, demand, action or suit resulting from the negligence
of such Fund, or CSS's acting upon any instructions reasonably believed by it to
have been executed or communicated by any person duly authorized by such Fund,
or
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as a result of CSS's acting in reliance upon advice reasonably believed by CSS
to have been given by counsel for the Fund, or as a result of CSS's acting in
reliance upon any instrument reasonably believed by it to have been genuine and
signed, countersigned or executed by the proper person.
CSS's liability for any and all claims of any kind, including negligence,
for any loss or damage arising out of, connected with, or resulting from this
Agreement, or from the performance or breach thereof, or from the design,
development, lease, repair, maintenance, operation or use of data processing
systems and the maintenance of a Funds' shareholder account records as provided
for by this Agreement will in the aggregate not exceed the total of CSS's
compensation hereunder for the six months immediately preceding the discovery of
the circumstances giving rise to such liability.
In no event will CSS be liable for indirect, special, or consequential
damages (even if CSS has been advised of the possibility of such damages)
arising from the obligations assumed hereunder and the services provided for by
this Agreement, including but not limited to lost profits, loss of use of the
shareholder accounting system, cost of capital, cost of substitute facilities,
programs or services, downtime costs, or claims of shareholders for such damage.
10. LIMITATION OF LIABILITY OF THE FUND. CSS acknowledges that it accepts
the limitations upon the liability of the Funds. CSS agrees that each Fund's
obligations under this Agreement in any case will be limited to such Fund and to
its assets and that CSS will not seek satisfaction of any obligation from the
shareholders of the Fund nor from any director, trustee, officer, employee or
agent of such Fund.
11. FORCE MAJEURE. CSS will not be liable for delays or errors occurring
by reason of circumstances beyond its control, including but not limited to acts
of civil or military authority, national emergencies, work stoppages, fire,
flood, catastrophe, acts of God, insurrection, war, riot, or failure of
communication or power supply. In the event of equipment breakdowns beyond its
control, CSS will take reasonable steps to minimize service interruptions but
will have no liability with respect thereto.
12. AMENDMENTS. CSS and each Fund will regularly consult with each other
regarding CSS's performance of its obligations under this Agreement. Any change
in a Fund's registration statements under the Securities Act of 1933, as
amended, or the 1940 Act or in the forms relating to any plan, program or
service offered by the current prospectus which would require a change in CSS's
obligations under this Agreement will be subject to CSS's approval, which will
not be unreasonably withheld. Neither this Agreement nor any of its provisions
may be changed, waived, discharged, or terminated orally, but only by written
instrument which will make specific reference to this Agreement and which will
be signed by the party against which enforcement of such change, waiver,
discharge or termination is sought.
13. TERMINATION. This Agreement will continue in effect until January 1,
1999, and thereafter as the parties may mutually agree; provided, however, that
this Agreement may be terminated at any time by either party upon at least sixty
days' prior written notice to the other party; and provided further that this
Agreement may be terminated immediately at any time for cause either by any Fund
or CSS in the event that such cause remains unremedied for no less than ninety
days after receipt of written specification of such cause. Any such termination
will not affect the rights and obligations of the parties under Paragraphs 9 and
10 hereof. In the event that a Fund designates a successor to any of CSS's
obligations hereunder, CSS will, at the expense and direction of such Fund,
transfer to such successor all relevant books, records and other data of such
Fund established or maintained by CSS under this Agreement.
15. MISCELLANEOUS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes of
this Agreement. This Agreement will be construed and enforced in accordance with
and governed by the laws of the State of Maryland. The captions in this
Agreement are included for convenience only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first above written.
CALVERT GROUP FUNDS
By:/s/ William M. Tartikoff
CALVERT SHAREHOLDER SERVICES, INC.
By:/s/ Ronald M. Wolfsheimer
-2-
<PAGE>
SERVICING AGREEMENT
SCHEDULE A
For its services under this Servicing Agreement, Calvert Shareholder
Services, Inc., is entitled to receive from the Calvert Funds (Except Acacia
Capital Corporation) fees as set forth below:
<TABLE>
<CAPTION>
Annual Transaction
Fund and Portfolio Account Fee * Fee
<S> <C> <C>
FIRST VARIABLE RATE FUND
First Variable Rate Fund (d/b/a Calvert First $11.59 $.84
Government Money Market)
Calvert Florida Municipal Intermediate Fund 2.23 .26
CALVERT TAX-FREE RESERVES
Money Market 13.35 .97
Limited-Term 3.37 .42
Long-Term 2.67 .31
California Money Market 12.74 .93
Vermont Municipal 3.40 .39
CALVERT MUNICIPAL FUND, INC
California Intermediate 3.48 .40
National Intermediate 3.31 .38
Maryland Intermediate 4.64 .53
Michigan Intermediate 3.88 .44
New York Intermediate 4.23 .48
Virginia Intermediate 3.35 .38
Arizona Intermediate 2.10 .24
Pennsylvania Intermediate 2.82 .32
THE CALVERT FUND
Income 4.22 .48
New Vision Small Cap 5.90 .67
CALVERT SOCIAL INVESTMENT FUND
Money Market 11.92 .87
Bond 4.85 .55
Managed Growth 4.63 .72
Equity 5.24 .60
CALVERT WORLD VALUES FUND, INC.
International Equity 5.36 .61
Capital Accumulation 6.26 .72
CALVERT NEW WORLD FUND
New Africa Fund 3.91 .45
</TABLE>
ACACIA CAPITAL CORPORATION FEE IS AS FOLLOWS:
.03% (three basis points) on the first $500 million of average net assets
and .02% (two basis points) over $500 million of average net assets, minus the
fees paid by Acacia Capital Corporation to State Street Bank and Trust pursuant
to the State Street Agreement (except for out of pocket expenses).
- ----------------
* Account fees are charged monthly based on the highest number of non-zero
balance accounts outstanding during the month.
-3-
<PAGE>
THE CALVERT GROUP OF FUNDS
CLASS B AND CLASS C DISTRIBUTION PLAN
As approved by the Boards in November 1993
Amended and restated February 1998 Pursuant to Rule 12b-1
Under the Investment Company Act of 1940
This Distribution Plan applies to Class B and Class C in each portfolio of
the Calvert Funds listed in Schedule A (each a "Fund" and together, the "Funds")
and to any future class for which this Distribution Plan has been approved in
accordance with paragraph 2(a) below. For purposes of this Distribution Plan
each series portfolio of a Fund is referred to herein as a "Series" and
together, as the "Series".
As permitted by Rule 12b-1 under the Investment Company Act of 1940 and in
accordance with the terms and conditions of this Plan, as hereinafter set forth,
a Fund may incur certain expenditures to promote itself and further the
distribution of its shares.
1. PAYMENT OF FEE
(a) As compensation for certain services performed and expenses assumed by
each Fund's distributor and principal underwriter ("Distributor") each Fund may
pay the Distributor a distribution fee (the "Distribution Fee"). The
Distribution Fee is intended to compensate the Distributor for its marketing
efforts, which include, but are not limited to the following costs: commissions
and other payments advanced to sales personnel and third parties and related
interest costs as permitted by the rules of the National Association of
Securities Dealers, Inc. ("NASD"), printing and mailing prospectuses, sales
literature and other relevant material to other than current shareholders,
advertising and public relations, telemarketing, marketing-related overhead
expenses and other distribution costs. Such Distribution Fee is in addition to
any NASD service fee that may be paid hereunder and as described at Section 3(b)
of the Distribution Agreement between the respective Funds and the Distributor,
or any front-end or deferred sales charges the Distributor receives from a Fund
with respect to sales or redemption of Fund shares. Total fees paid pursuant to
this Plan, including the Distribution Fee described above, and the NASD service
fee, shall not exceed the rate set forth in the attached Schedule B to this
Plan. All agreements with any person relating to the implementation of this
Plan shall be in writing, and such agreements shall be subject to termination,
without penalty, pursuant to the provisions of paragraph 2(c) of this Plan.
(b) A Fund will pay each person which has acted as principal underwriter
of its Class B shares its Allocable Portion (as such term is defined in the
Distribution Agreement pursuant to which such person acts or acted as principal
underwriter of the Class B Shares (the "Applicable Distribution Agreement")) of
the Distribution Fee in respect of Class B Shares of the Fund. Such person
shall be paid its Allocable Portion of such Distribution Fees notwithstanding
such person's termination as Distributor of the Class B Shares of the Fund, such
payments to be changed or terminated only: (i) as required by a change in
applicable law or a change in accounting policy adopted by the Investment
Companies Committee of the AICPA and approved by FASB that results in a
determination by the Fund's independent accountants that any asset based sales
charges (as that term is defined by the NASD) in respect of such Fund, and which
are not yet due and payable, must be accounted for by such Fund as a liability
in accordance with GAAP, each after the effective date of this restated
Distribution Plan; (ii) if in the sole discretion of the Board of
Trustees/Directors, after due consideration of the relevant factors considered
when adopting and/or amending this Distribution Plan including the transactions
contemplated in that certain Purchase and Sale Agreement entered into between a
Fund's Distributor and the commission financing entity, the Board of
Trustees/Directors determines, subject to its fiduciary duty, that this
Distribution Plan and the payments thereunder must be changed or terminated,
notwithstanding the effect this action might have on the Fund's ability to offer
and sell Class B shares; or (iii) in connection with a Complete Termination of
this Distribution Plan, it being understood that for this purpose a Complete
Termination of this Distribution Plan occurs only if, as to a Fund or Series,
this Distribution Plan is terminated and the Fund has not adopted any other
distribution plan with respect to its Class B or other substantially similar
class of shares. The services rendered by a Distributor for which that
Distributor is entitled to receive its Allocable Portion of the Distribution Fee
shall be deemed to have been completed at the time
-1-
<PAGE>
of the initial purchase of the Commission Shares (as defined in the Distribution
Agreement) taken into account in computing that Distributor's Allocable Portion
of the Distribution Fee.
The obligation of a Fund to pay the Distribution Fee shall terminate upon
the termination of this Distribution Plan as to such Fund in accordance with the
terms hereof. Except as provided in the preceding paragraph, a Fund's
obligation to pay the Distribution Fee to a Distributor of the Class B Shares of
the Fund shall be absolute and unconditional and shall not be subject to any
dispute, offset, counterclaim or defense whatsoever (it being understood that
nothing in this sentence shall be deemed a waiver by a Fund of its right
separately to pursue any claims it may have against such Distributor and enforce
such claims against any assets (other than its right to be paid its Allocable
Portion of the Distribution Fee and to be paid the contingent deferred sales
charges) of such Distributor).
The right of a Distributor to receive the Distribution Fee, but not the
relevant Distribution Agreement or that Distributor's obligations thereunder,
may be transferred by that Distributor in order to raise funds which may be
useful or necessary to perform its duties as principal underwriter, and any such
transfer shall be effective upon written notice from that Distributor to the
Fund. In connection with the foregoing, each Fund is authorized to pay all or
part of the Distribution Fee directly to such transferee as directed by that
Distributor.
(c) Nothing in this Distribution Plan shall operate or be construed to
limit the extent to which the Fund's Investment Advisor or any other person,
other than the Fund, at its expense apart from the Distribution Plan, may incur
costs and pay expenses associated with the distribution of Fund shares.
2. EFFECTIVE DATE AND TERM
(a) This Distribution Plan shall become effective as to any Class of any
Series upon approval by majority votes of (i) the Board of the Fund and the
members thereof who are not interested persons within the meaning of Section
2(a)(19) of the Investment Company Act of 1940 and have no direct or indirect
financial interest in the operation of the Distribution Plan or in any
agreements related to the Distribution Plan ("Qualified Trustees/Directors"),
cast in person at a meeting called for the purpose of voting on this
Distribution Plan, and (ii) the outstanding voting securities of the Fund.
(b) This Distribution Plan shall remain in effect for one year from its
adoption date and may continue in effect thereafter if this Distribution Plan is
approved at least annually by a majority vote of the Board of the Fund,
including a majority of the Qualified Trustees/Directors, cast in person at a
meeting called for the purpose of voting on the Distribution Plan.
(c) Subject to paragraph 1(b) above, this Distribution Plan may be
terminated at any time without payment of any penalty by a majority vote of the
Qualified Trustees/Directors or by vote of a majority of the outstanding voting
securities of the Fund, or, with respect to the termination of this Distribution
Plan as to a particular Class of a Portfolio, by a vote of a majority of the
outstanding voting securities of that Class.
(d) The provisions of this Distribution Plan are severable for each Series
or Class, and whenever action is to be taken with respect to this Distribution
Plan, that action must be taken separately for each Series or Class affected by
the matter.
3. REPORTS
The person authorized to direct the disposition of monies paid or
payable by the Fund pursuant to the Distribution Plan shall provide, on at least
a quarterly basis, a written report to each Fund's Board of the amounts expended
pursuant to this Distribution Plan or any related agreements and the purposes
for which such expenditures were made.
4. SELECTION OF DISINTERESTED TRUSTEES/DIRECTORS
-2-
<PAGE>
While this Distribution Plan is in effect, the selection and
nomination of those Trustees/Directors who are not interested persons of a Fund
within the meaning of Section 2(a)(19) of the Investment Company Act of 1940
shall be committed to the discretion of the Trustees/Directors then in office
who are not interested persons of the Fund.
5. EFFECT OF PLAN
This Distribution Plan shall not obligate the Fund or any other party
to enter into an agreement with any particular person.
6. AMENDMENT
This Distribution Plan may not be amended to increase materially the
amount authorized in paragraph 1 hereof to be spent by a Fund for distribution
without approval by a vote of the majority of the outstanding shares of such
Fund, except that if the amendment relates only to a particular Class of a Fund,
such approval need only be by a vote of the majority of the outstanding shares
of that Class. All material amendments to this Distribution Plan must be
approved by a majority vote of the Board of the Fund, and of the Qualified
Trustees/Directors, cast in person at a meeting called for the purpose of voting
thereon.
-3-
<PAGE>
SCHEDULE A
The Calvert Fund
Calvert Tax-Free Reserves
Calvert Municipal Fund
Calvert Social Investment Fund
Calvert World Values Fund
Calvert New World Fund
First Variable Rate Fund
-4-
<PAGE>
SCHEDULE B
The total fees paid by the respective Class of each Series of a Fund
pursuant to this Distribution Plan shall not exceed the rate, as a percentage of
that Class' average annual net assets, set forth below:
<TABLE>
<CAPTION>
FUND/SERIES CLASS B CLASS C
Distribution Service Distribution Service
Fee Fee Fee Fee
<S> <C> <C> <C> <C>
The Calvert Fund
Calvert New Vision
Small Cap Fund 0.75 0.25 0.75 0.25
Calvert Income Fund 0.75 0.25 0.75 0.25
Calvert Tax-Free Reserves
Long-Term 0.75 0.25 0.75 0.25
Vermont Municipal 0.75 0.25 0.75 0.25
Calvert Municipal Fund
National 0.75 0.25 N/A N/A
California 0.75 0.25 N/A N/A
Maryland 0.75 0.25 N/A N/A
Virginia 0.75 0.25 N/A N/A
Calvert Social Investment Fund
Managed Growth 0.75 0.25 0.75 0.25
Equity 0.75 0.25 0.75 0.25
Bond 0.75 0.25 0.75 0.25
Managed Index 0.75 0.25 0.75 0.25
Calvert World Values Fund
International Equity 0.75 0.25 0.75 0.25
Capital Accumulation 0.75 0.25 0.75 0.25
Calvert World Values Fund
Calvert New Africa 0.75 0.25 0.75 0.25
First Variable Rate Fund
Calvert First Gov.
Money Market 0.75 0.25 N/A N/A
</TABLE>
Restated Feb. 1998
-5-
<PAGE>
THE CALVERT GROUP OF FUNDS
RULE 18f-3 MULTIPLE CLASS PLAN
Approved by the Boards in January 1996
Amended and restated February 1998 Pursuant to Rule 18f-3
Under the Investment Company Act of 1940
Rule 18f-3 under the Investment Company Act of 1940, as amended (the "1940
Act"), requires that an investment company desiring to offer multiple classes of
shares pursuant to the Rule adopt a plan setting forth the differences among the
classes with respect to shareholder services, distribution arrangements, expense
allocations and any related conversion features or exchange privileges. Any
material amendment to the plan must be approved by the investment company's
Board of Trustees/Directors, including a majority of the disinterested Board
members, who must find that the plan is in the best interests of each class
individually and the investment company as a whole.
This Rule 18f-3 Multiple Class Plan ("Plan") shall apply to those funds in
the Calvert Group of Funds listed in Exhibit I (each a "Fund" and collectively,
"Funds") and to any future fund for which this Plan has been approved in
accordance with the above paragraph.
The provisions of this Plan are severable for each Fund or Series thereof
("Series") or Class, and whenever action is to be taken with respect to this
Plan, that action must be taken separately for each Fund, Series or Class
affected by the matter.
1. CLASS DESIGNATION. A Fund may offer shares designated Class A, Class
B, Class C , Class I, and for certain money market portfolios, Class O.
2. DIFFERENCES IN AVAILABILITY. Class A, Class B, Class C, and Class O
shares shall each be available through the same distribution channels, except
that (a) Class B shares may not be available through some dealers and are not
available for purchases of $500,000 or more, (b) Class B shares of Calvert First
Government Money Market Fund are available only through exchange from Class B or
Class C shares of another Calvert Fund, and (c) Class C shares may not be
available through some dealers and are not available for purchases of $1 million
or more. Class I shares are generally available only directly from Calvert Group
and not through dealers, and each Class I shareholder must maintain a $1 million
minimum account balance.
3. DIFFERENCES IN SERVICES. The services offered to shareholders of each
Class shall be substantially the same, except that the Rights of Accumulation,
Letters of Intent and Reinvestment Privileges shall be available only to holders
of Class A shares. Class I purchases and redemptions may only be made by bank
wire.
4. DIFFERENCES IN DISTRIBUTION ARRANGEMENTS. Class A shares shall be
offered with a front-end sales charge, as such term is defined in Rule 2830 of
the Conduct Rules of the National Association of Securities Dealers, Inc. The
amount of the sales charge on Class A shares is set forth at Exhibit II. Class
A shares shall be subject to a Distribution Plan adopted pursuant to Rule 12b-1
under the 1940 Act. The amount of the Distribution Plan expenses for Class A
shares, as set forth at Exhibit II, are used to pay the Fund's principal
underwriter for distributing and or providing services to the Fund's Class A
shares. This amount includes a service fee at the annual rate of .25 of 1% of
the value of the average daily net assets of Class A.
Class B shares shall be offered with a contingent deferred sales charge
("CDSC") and no front-end sales charge. The amount of the CDSC on Class B shares
is set forth at Exhibit II. Class B shares shall be subject to a Distribution
Plan adopted pursuant to Rule 12b-1 under the 1940 Act. The amount of the
Distribution Plan expenses for Class B shares, as set forth at Exhibit II, are
used to pay each Fund's principal underwriter for distributing and or providing
services to the Fund's Class B shares. This amount includes a service fee at the
annual rate of .25 of 1% of the value of the average daily net assets of Class
B.
Class C shares shall not be subject to a front-end sales charge, but shall
be subject to a 1.00% CDSC if the
-1-
<PAGE>
shares are redeemed within one year of purchase. Class C shares shall be subject
to a Distribution Plan adopted pursuant to Rule 12b-1 under the 1940 Act. The
amount of the Distribution Plan expenses for Class C shares are set forth at
Exhibit II. The Class C Distribution Plan pays each applicable Fund's principal
underwriter for distributing and or providing services to such Fund's Class C
shares. This amount includes a service fee at the annual rate of .25 of 1% of
the value of the average daily net assets of Class C.
Class I and Class O shares shall be subject to neither a front-end sales
charge, nor a CDSC, nor are they subject to a Distribution Plan adopted pursuant
to Rule 12b-1 under the 1940 Act.
5. EXPENSE ALLOCATION. The following expenses shall be allocated, to the
extent practicable, on a Class-by-Class basis: (a) Distribution Plan fees; (b)
transfer agent fees; (c) administrative service fees; (d) printing and postage
expenses payable by a Fund relating to preparing and distributing materials,
such as proxies, reports and prospectuses to current shareholders of a specific
class; (e) class specific state notification fees; (f) class specific litigation
or other legal expenses; (g) certain class specific reimbursement from the
Advisor; and (h) certain class specific contract services (e.g., proxy
solicitation).
6. CONVERSION FEATURES. Class B shares shall be subject to an automatic
conversion feature into Class A shares after they have been held for that number
of years set forth in Exhibit II. Class A, Class C ,Class I, and Class O are not
subject to automatic conversion.
7. EXCHANGE PRIVILEGES. Class A shares shall be exchangeable only for:
(a) Class A shares of other funds managed or administered by the Calvert Group;
(b) shares of funds managed or administered by the Calvert Group which do not
have separate share classes; and (c) shares of certain other funds specified
from time to time.
Class B shares shall be exchangeable only for: (a) Class B shares of other
funds managed or administered by the Calvert Group; (b) Class A shares of other
funds managed or administered by the Calvert Group, if the front-end load on the
Class A shares is paid at the time of the exchange; and (c) shares of certain
other funds specified from time to time.
Class C shares shall be exchangeable only for: (a) Class C shares of other
funds managed or administered by the Calvert Group and Class B shares of Calvert
First Government Money Market Fund; (b) Class A shares of other funds managed or
administered by the Calvert Group, if the front-end load on the Class A shares
is paid at the time of the exchange; and (c) shares of certain other funds
specified from time to time.
Class I shares shall be exchangeable only for: (a) Class I shares of other
funds managed or administered by the Calvert Group; (b) Class A shares of other
funds managed or administered by the Calvert Group, if the front-end load on the
Class A shares is paid at the time of the exchange; and (c) shares of certain
other funds specified from time to time.
-2-
<PAGE>
Exhibit I
The Calvert Fund
Calvert Tax-Free Reserves
Calvert Municipal Fund
Calvert Social Investment Fund
Calvert World Values Fund
Calvert New World Fund
First Variable Rate Fund
-3-
<PAGE>
Exhibit II
CALVERT SOCIAL INVESTMENT FUND (CSIF)
<TABLE>
<CAPTION>
Maximum Class A Maximum Maximum
Front-End Sales Class A Class C
Charge 12b-1 Fee 12b-1 Fee
<S> <C> <C> <C>
CSIF Managed Growth 4.75% 0.35% 1.00%
CSIF Equity 4.75% 0.35% 1.00%
CSIF Managed Index 4.75% 0.25% 1.00%
CSIF Bond 3.75% 0.35% 1.00%
</TABLE>
<TABLE>
<CAPTION>
Class B
Managed Growth,
Equity, and Maximum
Contingent Deferred Sales Charge Managed Index Bond 12b-1 Fee
<S> <C> <C> <C>
Shares held less than one year after purchase 5% 4% 1.00%
More than one year but less than two 4% 3%
More than two years but less than three 4% 2%
More than three years but less than four 3% 1%
More than four years but less than five 2%
More than five years but less than six 1%
Converts to Class A after 8 yrs. 6yrs.
</TABLE>
-4-
<PAGE>
Exhibit II
CALVERT TAX-FREE RESERVES (CTFR)
<TABLE>
<CAPTION>
Maximum Class A Maximum Maximum
Front-End Sales Class A Class C
Charge 12b-1 Fee 12b-1 Fee
<S> <C> <C> <C>
CTFR Long-Term 3.75% 0.35% 1.00%
CTFR Vermont 3.75% N/A 1.00%
<CAPTION>
Class B
Long-Term and Maximum
Contingent Deferred Sales Charge Vermont 12b-1 Fee
<S> <C> <C>
Shares held less than one year after purchase 4% 1.00%
More than one year but less than two 3%
More than two years but less than three 2%
More than three years but less than four 1%
Converts to Class A after 6yrs.
</TABLE>
-5-
<PAGE>
Exhibit II
CALVERT MUNICIPAL FUND
<TABLE>
<CAPTION>
Maximum Class A Maximum Maximum
Front-End Sales Class A Class C
Charge 12b-1 Fee 12b-1 Fee
<S> <C> <C> <C>
National Intermediate 2.75% 0.25% N/A
California Intermediate 2.75% 0.25% N/A
Maryland Intermediate 2.75% 0.25% N/A
Virginia Intermediate 2.75% 0.25% N/A
<CAPTION>
Class B
Maximum
Contingent Deferred Sales Charge CMF 12b-1 Fee
<S> <C> <C>
Shares held less than one year after purchase 3% 1.00%
More than one year but less than two 2%
More than two years but less than three 2%
More than three years but less than four 1%
Converts to Class A after 4 yrs.
</TABLE>
-6-
<PAGE>
Exhibit II
THE CALVERT FUND
<TABLE>
<CAPTION>
Maximum Class A Maximum Maximum
Front-End Sales Class A Class C
Charge 12b-1 Fee 12b-1 Fee
<S> <C> <C> <C>
New Vision Small Cap 4.75% 0.25% 1.00%
Calvert Income Fund 3.75% 0.50% 1.00%
<CAPTION>
Class B
Maximum
Contingent Deferred Sales Charge New Vision Income 12b-1 Fee
<S> <C> <C> <C>
Shares held less than one year 5% 4% 1.00%
More than one year but less than two 4% 3%
More than two years but less than three 4% 2%
More than three years but less than four 3% 1%
More than four years but less than five 2%
More than five years but less than six 1%
Converts to Class A after 8 yrs. 6 yrs.
</TABLE>
-7-
<PAGE>
Exhibit II
CALVERT WORLD VALUES FUND
<TABLE>
<CAPTION>
Maximum Class A Maximum Maximum
Front-End Sales Class A Class C
Charge 12b-1 Fee 12b-1 Fee
<S> <C> <C> <C>
International Equity 4.75% 0.35% 1.00%
Capital Accumulation 4.75% 0.35% 1.00%
<CAPTION>
Class B
Maximum
Contingent Deferred Sales Charge CWVF 12b-1 Fee
<S> <C> <C>
Shares held less than one year after purchase 5% 1.00%
More than one year but less than two 4%
More than two years but less than three 4%
More than three years but less than four 3%
More than four years but less than five 2%
More than five years but less than six 1%
Converts to Class A after 8 yrs.
</TABLE>
February 1998
Lgl Shr/Agreements/New UW/Rule 18f-3 Plan
-8-
<PAGE>
Exhibit II
CALVERT NEW WORLD FUND
<TABLE>
<CAPTION>
Maximum Class A Maximum Maximum
Front-End Sales Class A Class C
Charge 12b-1 Fee 12b-1 Fee
<S> <C> <C> <C>
Calvert New Africa 4.75% 0.25% 1.00%
<CAPTION>
Class B
Maximum
Contingent Deferred Sales Charge New Africa 12b-1 Fee
<S> <C> <C>
Shares held less than one year after purchase 5% 1.00%
More than one year but less than two 4%
More than two years but less than three 4%
More than three years but less than four 3%
More than four years but less than five 2%
More than five years but less than six 1%
Converts to Class A after 8 yrs.
</TABLE>
-9-
<PAGE>
Exhibit II
FIRST VARIABLE RATE FUND
<TABLE>
<CAPTION>
Maximum Class A Maximum Maximum
Front-End Sales Class A Class C
Charge 12b-1 Fee 12b-1 Fee
<S> <C> <C> <C>
First Gov. Money Market N/A N/A N/A
<CAPTION>
Class B
Maximum
Contingent Deferred Sales Charge 12b-1 Fee
<S> <C>
CDSC of original Class B Fund purchased is applied upon
redemption from Class B of First Government Money Market 1.00%
</TABLE>
Conversion period of original Class B Fund purchased is applied.
-10-
