Prospectus Supplement
Calvert New Africa Fund
Supplement to April 12, 1995 Prospectus
Date of Supplement: September 30, 1995
Replace the last sentence of the third paragraph on page 22 of the Prospectus
will the following:
The Public School Retirement System of the City of St. Louis, located at #1
Mercantile Center, St. Louis, Missouri 63101, currently controls 71% of the
Fund.
PROSPECTUS
April 12, 1995
CALVERT NEW WORLD FUND, INC.
CALVERT NEW AFRICA FUND
4550 Montgomery Avenue, Bethesda, Maryland 20814
INVESTMENT OBJECTIVE
The investment objective of Calvert New World Fund, Inc., Calvert New Africa
Fund (the "Fund") is to achieve capital appreciation over time. The Fund seeks
capital appreciation aggressively by focusing the Fund's investments mostly in
the emerging market of equity and equity-linked securities and fixed-income
securities of African and African-related companies.
WHETHER THIS FUND IS FOR YOU
The Fund is designed for aggressive investors who are willing to accept
above-average risk in order to seek a higher rate of return on investment over
time. Investments in African and African-related issuers involve risk factors
and special considerations not normally associated with investments in United
States ("U.S.") issuers. These include risks associated with the political and
economic uncertainty caused by political transitions, the comparatively small
and potentially illiquid nature of the African securities markets and
corresponding price volatility, as well as interest rate movements, exchange
controls, the dual currency system in South Africa, and the possibility of
significant currency fluctuation. In addition, the identification of and
realization of attractive investment opportunities involves a high degree of
uncertainty. Thus, share prices may experience substantial fluctuations so that
your shares may be worth less than when you originally purchased them. There can
be no assurance that the objectives of the Fund will be achieved. See
"Investment Objective and Policies" and "Risk Factors." The Fund is designed for
long-term investors and does not attempt to maintain a balanced portfolio.
Accordingly, the Fund should not be used to meet short-term financial needs.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
SHARES OF THE 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 THE FUND, THE VALUE
MAY BE HIGHER OR LOWER THAN THE AMOUNT ORIGINALLY PAID.
PURCHASE INFORMATION
The Fund offers one class of shares, Class A shares, with a sales charge imposed
at the time you purchase the shares ("front-end sales charge"). See "Alternative
Sales Options" for further details.
ADVISORS
Calvert-Sloan Advisers, L.L.C. is the Fund's Advisor, responsible for overall
management and supervision of the Fund's investment and day-to-day management.
New Africa Advisers, Inc. ("NAA") and Calvert Asset Management Company, Inc.
("CAMCO") are the Fund's Sub-Advisors, responsible for asset allocation and
selection of the specific investments for the Fund. See "Management of the
Fund."
TO OPEN AN ACCOUNT
Call your broker, 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 before investing. It is designed to provide you with
information you ought to know before investing and to help you decide if the
Fund's goals match your own. Keep this document for future reference.
A Statement of Additional Information (dated April 12, 1995) for the Fund
has been filed with the Securities and Exchange Commission and is
incorporated by reference. This free Statement is available upon request
from the Fund: 800-368-2748.
<TABLE>
<CAPTION>
FUND EXPENSES
Class A
<S> <C>
A. Shareholder Transaction Costs
Maximum Front-End Sales Charge on 2.50%
Purchases (as a percentage of offering
price)
Maximum Front-End Sales Charge on None
Reinvested Dividends (as a percentage
of offering price)
Contingent Deferred Sales Charge None
Redemption Fees (as a percentage of 2.00%
amount redeemed)<F1>
Exchange Fees<F2> None
B. Annual Fund Operating Expenses
(As a percentage of net assets)
Management Fees 1.75%
Rule 12b-1 Service and Distribution Fees
0.75%
Other Expenses (Estimated) 0.45%
Total Fund Operating Expenses 2.95%
<FN>
<F1>The redemption fee will be charged only for redemptions (including
exchanges) of assets held in the Fund for 2 years or less. See "How to Sell
Your Shares." If you request a wire redemption of less than $1,000, you
will be charged a $5 wire fee.
<F2>See footnote 2.
</FN>
</TABLE>
C. Example of Expenses. 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.
Example: You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
1 Year 3 Years
<S> <C> <C>
Class A<F3> $74 $114
You would pay the following expenses on the same investment, assuming no
redemption:
1 Year 3 Years
<S> <C> <C>
Class A<F4> $54 $114
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).
<FN>
<F3>Assumes payment of maximum initial sales charge at time of purchase.
<F4>Assumes payment of maximum initial sales charge at time of purchase.
</FN>
</TABLE>
A. Shareholder Transaction Costs are charges you pay when you buy or sell shares
of the Fund. See "Reduced Sales Charges" at Exhibit A and "Calculation of
Contingent Deferred Sales Charges" to see if you qualify for possible reductions
in the sales charge. A redemption fee of 2.00% will be charged on any
redemptions (including exchanges) made with assets that have been held in the
Fund for less than two (2) years. See "How to Sell Your Shares."
B. Annual Fund Operating Expenses. Management Fees are paid by the Fund to
Calvert-Sloan Advisers, L.L.C. ("Investment Advisor") for managing the Funds'
investments and business affairs. Management fees include the Sub-Advisory fees
paid by the Investment Advisor to New Africa Advisers, Inc. and Calvert Asset
Management Company, Inc. ("Sub-Advisors") and the Administrative Service fee
paid by the Fund to Calvert Administrative Services Company. The Fund incurs
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 Fund's 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 Fund.
The Fund's Rule 12b-1 fees include an asset-based sales charge. Thus, it is
possible that long-term shareholders in the 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.
INVESTMENT OBJECTIVE AND POLICIES
Investment Objective
The investment objective of the Fund is to achieve capital appreciation over
time. The Fund seeks capital appreciation aggressively by focusing its
investments mostly in the emerging market of equity and equity-linked securities
and fixed-income securities of African and African-related companies. The Fund
is nondiversified, which means that the percentage of its assets that may be
invested in a single issuer is not limited. See "Investment Restrictions" and
"Nondiversified Status" in the Statement of Additional Information. The Fund's
investment objective is not fundamental and may be changed without shareholder
approval. The Fund will give written notice to shareholders 30 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.
Under normal circumstances, the Fund will invest at least 65% of its assets in
equity securities of African and African-related companies.
The Fund will invest primarily in equity and equity-linked securities of African
and African-related companies, defined as entities that are organized under the
laws of an African country; companies which derive at least 50% of their
revenues from goods produced or sold, investments made, or services performed in
Africa or which have at least 50% of their assets situated in Africa; or
entities which issue equity or debt securities which are traded principally on a
stock exchange in Africa. The Fund may also invest directly in African and
African-related companies, as described in "Direct Investment Philosophy,"
below. Exclusive of the 65%, the Fund may invest in the equities of
multinational companies which do business in African countries.
The term "equity and equity-linked securities" includes common stock, preferred
stock, rights or warrants to purchase common or preferred stock, debt securities
convertible into common or preferred stock and structured debt obligations (debt
issued by issuers in connection with identified projects which pay interest
under what the Fund considers to be an equity participation formula structured
to reflect the status of the project). Generally, the Fund will not trade in
securities for short-term profits, but, when circumstances warrant, securities
may be sold without regard to the length of time held.
The Fund may invest up to 20% of its assets in fixed-income securities,
including junk bonds.
Fixed income securities include non-convertible debt obligations excluding such
structured debt obligations as noted above. The Fund may invest in African
sovereign debt and debt of African countries when such investments offer
opportunities for long-term capital appreciation. The Fund focuses on its
analysis of political, economic, exchange control and other macro-economic
factors, such as interest rates and inflation in the Fund's fixed-income
security selection process. See "Risk Factors" on page __.
The Fund may use various investment techniques, including financial futures
contracts and related options. See "Investment Techniques and Related Risks" on
page ___.
Direct Investment Philosophy
Initially, the primary focus of the Direct Investments will be in South Africa,
and on six industries: consumer products, telecommunications, health care, light
manufacturing, services, and tourism. Direct Investments may take the form of
(1) management buyouts of established businesses, (2) investments in
closely-held listed companies that are undervalued relative to their market
value, (3) investments in certain advanced-stage venture capital situations that
are poised for sustained growth, and (4) certain special investment situations,
such as investing in privatizations (a government-owned or state-controlled
entity that is sold to the private sector; e.g., in 1994, the Government of
Ghana sold 25% of Ashanti Goldfields, one of the world's largest and richest
gold mines, to the private sector). Direct Investment acquisitions made by the
Fund are expected to result in a moderate degree of leverage to the acquired
company, given that the Fund wants to control risk and generate equity gains
through growth and operational improvements rather than through restructured
financial statements. In each investment, the Fund will seek to ally itself with
strong management (as determined by New Africa Advisers ("NAA") either already
in place or recruited for that particular situation. In order to assure an
identity of interest with the Fund, the management of each portfolio company
will be expected to make a meaningful investment in its respective portfolio
company, to the extent possible. By sitting on the board of directors of each
portfolio company, under the supervision of the Board of Directors and to the
extent allowed by law, and by offering general business and management advice to
the management of the portfolio company, the Fund will aim to enhance the
financial performance and value of portfolio companies over a five to seven year
holding period. NAA expects to use a number of strategies to obtain liquidity
and potentially realize capital gains for the Fund. These include: 1) the
complete or partial sale of the business to an outside third party or joint
venture partners, 2) the complete or partial sale of the business to the public
securities market, either in the form of an initial public offering or the sale
of debt, 3) the complete or partial sale of the business to management, and 4)
the refinancing of the investment's capital structure, using the proceeds to pay
a dividend to all investors. In all cases, NAA will work with the appropriate
financial advisors, underwriters, or merchant bankers in the respective local
markets to determine the most effective way to realize capital gains. The Fund
may invest up to 15% of its net assets in Direct Investments, which are
considered illiquid securities. See also "Risk Factors, Marketability of Fund
Investments," on page ___ and "Risk Diversification and Controls for the Fund's
Direct Investments" on page ___.
Sourcing Direct Investment Opportunities
NAA and its affiliates have an extensive network of contacts in the U.S.,
Europe, and Africa. The portfolio of Direct Investments will be constructed by
tapping into three areas: (1) companies entering or re-entering the African
market in need of equity partners with capital and local business experience,
(2) South African conglomerates desiring to divest, or "unbundle," specific
operations or assets in response to the changes in the political environment in
South Africa and the economic impact of greater worldwide competition South
Africa; and (3) currently successful or emerging private African companies
needing growth capital.
The actual universe of potential Direct Investments is quite large, including
established companies, established entrepreneurs, emerging entrepreneurs, new
ventures, and companies in need of capital to make a business turnaround. NAA
anticipates the majority of the Direct Investments will be invested with
established companies, established entrepreneurs, and new ventures.
Some of the characteristics of the Direct Investment opportunity universe, using
South Africa as an example, are: (1) no source of private equity capital, which
has caused a tremendous pent-up demand for capital; (2) solid company
performance with the potential for significant growth; (3) with the lifting of
sanctions, many small and medium sized companies are poised for international
growth; and (4) rising black living standards due to job creation programs, home
building and electrification projects, and free education and medical care.
RISK FACTORS
An investment in the Fund is subject to various risks. The net asset value will
fluctuate in response to changes in market conditions and the value of the
Fund's portfolio investments. The Fund's use of certain investment techniques,
such as foreign currency options, involve special risks. See "Investment
Techniques and Related Risks" on page ___.
African economies
See page __ for more economic information about specific African countries.
The economies of individual African countries may differ favorably or
unfavorably from the U.S. economy in such respects as growth of gross domestic
product or gross national product, rate of inflation, capital reinvestment,
resource self-sufficiency, structural unemployment, and balance of payments
position. The economies of African countries may also be affected to a greater
extent than in other countries by price fluctuations of a single commodity or by
one type of commodity, such as gold or other minerals. Severe cyclical climatic
conditions, particularly drought, may also affect the economies of African
countries. Business entities in some African countries do not have a significant
history of operating in market-oriented economies, and the ultimate impact of
some African countries' attempts to move toward more market-oriented economies
is currently unclear. Botswana, Egypt, Ghana, Ivory Coast, Kenya, Mauritius,
Morocco, Nigeria, Namibia, South Africa, Swaziland, Tunisia, Zambia and Zimbabwe
have market-oriented economies in various stages of development, with the South
African economy being substantially more developed than the others. Therefore,
the Fund may have more than 25% of its assets invested in any one country in
Africa, and initially anticipates that approximately 85% of Fund assets will be
invested in South Africa. Thus, the Fund's performance may be significantly
affected by the economic, social, and political developments in South Africa.
As with investment in countries outside the U.S. generally, nationalization,
expropriation or confiscatory taxation, currency blockage, political changes,
government regulation, political or social instability and diplomatic
developments could adversely affect the economy of any African country or the
Fund's investments in that country. In the event of expropriation,
nationalization, or other confiscation, the Fund could lose its entire
investment in the country involved.
African securities markets
The securities markets of African countries are comparatively small, with the
majority of market capitalization and trading volume concentrated in a small
number of companies. In many African countries, including South Africa and
Zimbabwe, a small number of institutional investors, directly or through related
companies, hold positions in publicly-held companies in that particular country
representing a substantial portion of the total market capitalization of listed
securities. This factor, together with significant exchange control limitations
on the ability of such investors to invest outside their home countries and the
increased investment in certain African issuers by foreign investors, will limit
the securities available for purchase by the Fund. The foregoing factors and
changes therein may cause the Fund's investment portfolio to experience greater
price volatility and lower liquidity than a portfolio invested only in
securities of a U.S. company.
Trading volume in African securities is substantially less than that in the
United States. However, during periods of price volatility and lower liquidity
in the markets, securities settlements and clearance may be subject to delays
and related administrative uncertainties, such as share registration and
delivery delays. This could result in temporary periods when Fund assets are not
invested and no return is earned. Commissions for trading on African stock
exchanges are often higher than commissions on U.S. exchanges, although the Fund
will endeavor to achieve the most favorable net results on its portfolio
transactions. Most of the African stock exchanges have fixed commissions, scaled
according to volume, ranging from 0.2% to 3% or more, depending on taxes or
additional exchange fees. The higher the purchase, the lower the percentage of
the commission, generally. The commission scale in South Africa ranges from 1.2%
for a purchase of up to 5,000 Rand to 7,127.50 Rand plus 0.20% on the excess
over 1,500,000 Rand for a purchase of over 1,500,000 Rand.
African Sovereign Debt
The types of foreign government obligations in which the Fund will primarily
invest will be debt securities issued and backed by the respective government
bodies. In terms of their government backing, these securities will structurally
resemble U.S. Government and U.S. Government agency issues. In many instances
the debt issues of African sovereignties represent low quality securities and
may be comparable to securities rated below investment grade by Standard & Poor
("S&P") or Moody's (i.e., rated C and D by S&P and Moody's, respectively.
Because of their speculative characteristics, they trade at substantial
discounts from face value, but offer substantial long-term capital appreciation.
Noninvestment-grade (High Yield/High Risk - or Junk Bond) Debt Securities
The Fund may invest up to 20% of its assets in lower quality debt securities
(generally those rated BB or lower by S&P or Ba or lower by Moody's, including
those rated C and D). These securities have moderate to poor protection of
principal and interest payments and have speculative characteristics. Securities
rated D are in default of payment of interest and/or principal. 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 is determined immediately after the Fund's acquisition of
a security. 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, NAA 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.
Likewise, when purchasing convertible debt securities and structured debt
obligations, NAA will prepare a quality and credit analysis, including a study
of any existing debt, capital structure and current financial condition, ability
to service debts and to pay dividends, sensitivity to changes in economic
conditions, and the current trend of earnings, revenues, expenses, cash flow,
and other factors, under the supervision of the Advisor and the Board of
Directors.
Currency Risks
Foreign securities involve currency risks. The U.S. 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 connections with purchases
and sales of foreign securities.
General Foreign Security 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 U.S. Foreign companies are not subject to
uniform audit and financial reporting standards, practices and requirements
comparable to those in the U.S.
Foreign stock markets are generally not as developed or efficient as those in
the U.S. In most foreign markets volume and liquidity are less than in the U.S.
and, at times, volatility of price can be greater than that in the U.S. Fixed
commissions on foreign stock exchanges are generally higher than the negotiated
commissions on U.S. exchanges. There is generally less government supervision
and regulation of foreign stock exchanges, brokers and companies than in the
U.S.
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 the Fund in some foreign countries. The Fund is not aware of any
investment or exchange control regulations which might substantially impair the
operations of the Fund as described, although this could change at any time.
For many foreign securities, there are U.S. dollar-denominated American
Depository Receipts ("ADRs"), which are traded in the U.S. on exchanges or over
the counter. ADRs are receipts typically issued by a U.S. bank or trust company
which evidence ownership of underlying securities of a foreign corporation.
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. By investing in ADRs
rather than directly in foreign issuers' stock, the Fund may avoid currency and
some liquidity risks, since 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 Depository 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.
The dividends and interest payable on certain of the Fund's foreign securities
may be subject to foreign withholding taxes, thus reducing the net amount
available for distribution to the Fund's shareholders. You should understand
that the expense ratio of the Fund can be expected to be higher than those of
investment companies investing only in domestic securities since the costs of
operations are higher.
Risks of Nondiversification
There may be risks associated with the Fund being nondiversified. Specifically,
since a relatively high percentage of the assets of the Fund may be invested in
the obligations of a limited number of issuers, the value of the shares of the
Fund may be more susceptible to any single economic, political or regulatory
event than the shares of a diversified Fund would be.
Marketability of Fund Investments
The marketability and liquidity of the Fund's investments cannot be assured. The
Fund's ability to acquire and dispose of investments in private debt and equity
securities will be dependent on factors outside its control, including the
health of the market for private debt and equity securities and the financial
condition of a security's issuer, as well as general economic conditions. The
Fund may invest up to 15% of its net assets in illiquid securities, which may
include up to 5% in unlisted securities. Generally, the Fund will need to obtain
permission from regulatory authorities in South Africa and other African
countries to invest in unlisted securities.
Temporary defensive positions
For temporary defensive purposes -- which may include a lack of adequate
purchase candidates or an unfavorable market environment -- the Fund may invest
up to 100% of its 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.
BACKGROUND AND ECONOMIC INFORMATION
The background and economic information in this section is a partial listing of
some of the African countries in which the Fund is considering investment
opportunities. The following sections are not intended to be a complete
description of the countries involved, their respective economies, or securities
markets.
South Africa
After almost ten years of sanctions, South Africa is truly an emerging society.
The first fully democratic election in South Africa's history took place in
April, 1994, and resulted in a Government of National Unity led by the African
National Congress, which inherited both the country's economic problems and its
inherent strength. With emergence of the country from a lengthy period of
international isolation, the economy began to grow again as it did during the
1960s and 12970s. The turnaround stated in 1993, when the Gross Domestic Product
("GDP") increased by 1.2%, the first increase in four years. Growth continued in
1994 at the rate of 2.5%, and, during 1995, the GDP is projected to rise by
4.0%, according to U.S. Department of Commerce estimates. Gross Domestic
Expenditure rose last year by 5% and gross domestic fixed investment by 7%,
while inflation has dropped to levels not experienced in South Africa since the
late 1970s.
The growth in the economy has allowed the government to make a start on its
Reconstruction and Development Program ("RDP"). The RDP is a blueprint for
economic change. Its major thrust is to provide the basic amenities of housing,
water, electricity and sewerage for the disadvantaged population. The RDP
envisages the construction of 1 million houses, each with water and sanitation
reticulation, and the electrification of 2.5 million houses before the year
2000. This splurge of house building will require schools, clinics, hospitals,
libraries, and civic and shopping centers, which will cause the demand for
building materials and furnishings of all kinds to increase significantly. Thus,
the opportunities for investment in consumer products will be limitless as well.
The RDP is also advocating more investment in health care.
South Africa has significant investment opportunities available in the
telecommunications and tourism industries, and considerable expertise and
comparative advantages in several other areas as well, such as the production of
stainless steel and aluminum. In addition, the financial sector is
well-developed and efficient, with the Johannesburg Stock Exchange providing
easy access to most of the major companies in the country. Prior to mid-March,
1995, South Africa had a two-tier currency structure utilizing the financial
rand and the commercial rand. The purpose of the dual currency system is to
prevent capital outflow while enticing foreign investment. The commercial rand
was the official rate of exchange, while the financial rand was the currency for
non-resident investment or disinvestment. Effective March 13, 1995, the South
African Government began the phaseout of the financial rand. For foreign
investors, this represents a step in the present government's attempts to create
a desirable investment climate, another step away from an underdeveloped economy
towards a recognized developing economy, and a sign of growing maturity on the
part of the Government of National Unity, according to NAA. In 1994, South
Africa's population was 42.5 million, with a projected annual growth rate of
2.2%, and an adult literacy rate of approximately 50%. The Gross National
Product ("GNP") was $118 billion.
Morocco
Morocco has adopted a structural adjustment program suggested by the
International Monetary Fund ("IMF"), and is now one of the most prosperous of
the francophone African countries. Morocco enjoys a reputation for political
stability and sound economic policies, which, along with geographic proximity to
Europe and considerable natural resources, have served as major attractions for
investors. Morocco's chief export is phosphates, although it has diversified
into light industry and food processing.
After more than a decade of growth, 1993 was a "watershed" for the country,
according to the IMF. The government's reform effort restored financial
stability and reduced structural weaknesses which had led to a serious crisis of
confidence in 1983. Per capita income has been rising as well, while
unemployment has declined. Out of a population of 26 million, with a moderate
growth rate of 2.6%, about 4.3 million are employed. In 1994, GDP increased by
about 8.0%, according to preliminary data, a rate which is expected to decline
in 1995, due to the impact of a drought on the country's agricultural output. In
coordination with the IMF, the reform program has reduced trade restrictions and
tariffs, liberalized foreign exchange controls, privatized state companies, and
improved the climate for foreign investors.
The Moroccan stock exchange is one of Africa's largest, second only in size to
the Johannesburg Stock Exchange. The market capitalization of the companies is
approximately $3.5 billion. There is no limitation on foreign investment. In
1993, Morocco's population was 27.6 million, and its GNP was $27,645 million.
Kenya
Kenya is the leading economy in East Africa. It was badly affected by the oil
price increases of the 1970s and has struggled with an almost continual balance
of payments crisis since then. There were several attempts by the IMF and the
World Bank to impose structural adjustment programs, adopted in late 1992.
Since the mid-1993 reform package agreement between the Kenyan Government and
the World Bank, the economy has been on an upward track. In 1993, the Kenyan
government instituted some economic reform, taking specific measures, such as
the removal of price controls; the liberalization of agricultural marketing;
control of credit and money supplies; a gradual reduction of government
expenditures; a gradual dismantling of exchange controls; and fiscal and
monetary incentives aimed at the promotion of exports. Attempts at privatization
are also being made, with 150 companies privatized in 1994.
Agricultural products account for almost 90% of Kenyan exports, as the majority
of the population is engaged in agriculture. As the hub of East Africa, Kenya is
well placed to provide manufactured goods to the whole area. In order to achieve
a growth in manufacturing of 6% per annum, three export processing zones have
been created and let to emerging manufacturers. Tourism is also a major
industry, although fighting in nearby Rwanda has affected the industry a certain
amount.
The Kenyan stock exchange is located in Nairobi, with 56 listed companies and 23
member brokers. The market capitalization of the companies is approximately $3.3
billion, the third largest in Africa. Foreign investors were not allowed to
invest in the Stock Exchange, although this restriction was partially lifted as
of January, 1995. The remaining restrictions barring outside investors are
scheduled to be removed by the end of 1995. There is no restriction on foreign
direct investment in unlisted companies. The 1994 GDP growth rate was an
estimated 3%, and the currency has stabilized after a long period of
depreciation. Inflation dropped dramatically to about one-third of the 46% level
in 1993, and is now under 4%. Kenya, which has a population of nearly 26 million
people, has also experienced an important breakthrough in controlling population
growth, reducing the total fertility rate 20% between 1989 and 1993, the most
precipitous drop in birth rate ever recorded anywhere in the world. Population
growth has declined from 4.1% in 1984 to 2.7% in 1994.
Zimbabwe
Zimbabwe achieved independence in 1980 and now represents a model of political
and economic stability. After independence, the government focused on providing
education and health care for the majority black population, although this
required an increase in government spending, resulting in a budget deficit of
approximately 10%. The government turned to IMF in the late 1980s, and put in
place a structural adjustment program to bring growth to the private productive
sector and to reduce the resources used by the public sector. The size of the
public sector is very large but may be reduced, pending elections in early 1995.
Interest rates are currently high and monetary policy is tight, due to the IMF,
but this is helping to create a more viable economy and provide a suitable
climate for attracting foreign investment. Exports include textiles, tobacco,
and products from the mining and energy complex. Zimbabwe is in the process of
upgrading its telecommunication systems, using fiber optics and digitalization.
The stock exchange is in Harare, with a market capitalization of approximately
$2 billion and 62 listed companies. There are limitations on foreign investment,
in that only 5% of the shares of any company may be held by a single foreign
investor, and no more than a total of 25% of a company may be held by foreign
investors. The opening of the stock exchange to foreign investors in June 1993
was followed by a high surge in trading. In 1993, Zimbabwe's population was 10.6
million, and the GNP was $5,756 million.
Tunisia
Tunisia is a growing African economy, due to the diligence with which its
structural adjustment program was implemented. With a mixed economy based on
agriculture, tourism, manufacturing, and petroleum, Tunisia has established a
track record for steady growth. The country's structural adjustment program,
launched in 1987, prioritizes export-led growth, as well as price and import
liberalization, financial sector reform, and privatization. Some 50 firms owned
by the government have been sold, and the government has promised to speed up
the process. Leather and phosphates exports coupled with growth in the textile
and electrical goods sectors of manufacturing for export and an increase in oil
production were all expected to add to export earnings in 1994 and 1995.
Part of the structural adjustment program has been directed towards attracting
foreign investment. A unified investment code has been adopted, which offers tax
advantages to investors in export-oriented projects, regional development
projects, or in projects which promote young entrepreneurs and small and
medium-sized businesses.
The Tunisian Stock Exchange is small, with a market capitalization of
approximately $1.2 billion and 21 listed companies. Turnover on the Exchange
rose to $531 million in 1994 from $162 million in 1993. In 1993, Tunisia's
population was 8.2 million, with a labor force of 2.56 million. Its GNP was
$15.3 million, according to the World Bank 1995 annual Atlas.
Egypt
Egypt has a large population, a cosmopolitan outlook, and a strategic position
between the East and West. Its major export is oil, although it also exports
cotton and earns large amounts of foreign exchange through its ownership of the
Suez canal, and from tourism.
In 1994, Egypt experienced a 2.0% increase in the GDP (up from 1.3% in 1993 and
0.4% in 1992) and a decline in the rate of inflation to about 6.0% from nearly
16.0% in 1992. The economy was boosted from a $550 million IMF standby credit
which runs to mid-1996 and a $300 million World Bank loan, as well as an annual
U.S. aid package that totals about $800 million. But per capita income for the
country's large population of about 57 million has remained fairly steady at
$630, with unemployment at about 10%. The government's economic reforms include
reductions in subsidies and import controls and the elimination of most foreign
exchange controls, budget deficit cuts, new banking laws, the introduction of a
sales tax, and an extensive privatization program.
The stock exchange was founded in 1910, and has a market capitalization of
approximately $1.5 billion, with nearly 700 listed companies. During 1994,
trading volume rose dramatically and two state companies were oversubscribed
when their stock was offered to investors.
Ghana
Ghana began an ambitious structural and economic reform program in the early
1980s. The political situation is stable, and the economy is being revitalized.
In the last ten years, inflation and the public sector budget deficit have been
significantly reduced. Exports continue to grow at an average annual pace of
about 10%, due in part to increases in the export crop production.
Cocoa is the main cash crop of Ghana's agricultural economy. Other crops include
copra, peanuts, pineapple, kolanuts, coffee, cotton, and shea nuts. As with any
agricultural economy, Ghana is vulnerable to the weather, particularly drought.
Even with production and marketing inefficiencies, the agricultural sectors of
cocoa production, forestry, and fishing account for 45% of the country's GDP and
about 60% of employment. Other contributors to GDP include tourism and
manufacturing.
Ghana ranks among the world's top gold producers and exporters and also exports
diamonds, bauxite, and manganese. In 1994, the Ghanaian government completed its
sale of about 25% of the Ashanti Goldfields company, listed on the Ghana Stock
Exchange and the London International Stock Exchange. Because of this dominant
listing, the Ghanaian stock Exchange is ranked sixth largest in Africa.
The stock exchange is in Accra, with a market capitalization of approximately
$2.1 billion and 20 listed companies. Nonresidents of Ghana may participate in
the market, although aggregate holdings of all nonresident investors cannot
exceed 74% of the total outstanding shares of a security, or 10% on an
individual level. In 1993, Ghana's population was 16.8 million, with an annual
growth rate of 3.4%. Its GDP was $3.948 billion, growing at 5.00% per annum. The
rate of inflation was 27.4%.
RISK DIVERSIFICATION AND CONTROLS FOR THE FUND'S DIRECT INVESTMENTS
The Fund can invest up to 15% of its net assets in Direct Investments, which
will consist primarily of investments in companies that by U.S. standards are
small to medium sized. While Direct Investments in such companies offer the
opportunity for significant capital gains, such investments involve a degree of
business and financial risks that can result in losses, and the liquidity cannot
be assured. Among these are the risks associated with investing in companies
with new management, companies operating with substantial variations in
operating results from period to period, and companies with the need for
substantial additional capital to support expansion or to achieve or maintain a
competitive position. Such businesses may face intense competition from rivals
with greater financial resources, more extensive research and development,
manufacturing, marketing, and services capabilities, and a larger number of
qualified managerial and technical personnel.
The Fund's Direct Investment philosophy is to help ensure that you have a
reasonable level of risk related to your Fund investment. The risks involved in
investment in private debt and equity situations are managed in several ways.
For example, the Sub-Advisor consistently receives up-to-date information about
the South African market and economy; evaluates potential opportunities using a
multi-step procedure which includes a tour of facilities and discussions with
management; explores innovative financing techniques; capitalizes portfolio
companies with 30%-50% equity to mitigate financial risk; and may directly
monitor a company by sitting on its board of directors.
The Fund will not invest in a situation which does not present reasonable exit
opportunities. A number of exit strategies to obtain liquidity and realize
capital gains will be used, including: (1) the complete or partial sale of the
business to an outside third party or joint venture partners, (2) the complete
or partial sale of the business to the public securities market, either in the
form of an initial public offering or the sale of debt, (3) the complete or
partial sale of the business to management, and (4) the refinancing of the
investment's capital structure and using the proceeds to pay a dividend to
investors. The holding period for a Direct Investment is anticipated to range
from five to seven years.
INVESTMENT TECHNIQUES and RELATED RISKS
Financial Futures, Options, and Other Investment Techniques.
The Fund 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 Fund can use these practices
either as substitution or as protection against an adverse move in the Fund's
portfolio to adjust the risk and return characteristics of the Fund's portfolio.
The Fund may engage in transactions in financial futures contracts and related
options as explained below. It may also write covered call options and secured
put options, purchase call and put options on securities and security indices,
and may enter into option transactions on foreign currency. The Fund may also
invest in repurchase agreements. If the Advisor judges market conditions
incorrectly or employs a strategy that 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 a fund and may involve a small investment of cash relative to
the magnitude of the risk assumed.
The Fund reserves the right to invest in the above investment techniques, but,
with the exception of financial futures contracts and related options, currently
anticipates such investment in each technique to be less than 5% of the Fund's
net assets in the coming year. Therefore, those investment techniques and the
related risks are described in detail in the Statement of Additional
Information.
Financial Futures and Related Options
The Fund may enter into financial futures contracts and related options as a
hedge against anticipated changes in the market value of their portfolio
securities or securities which they intend 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 and are described
more fully in the Statement of Additional Information.
Financial futures contracts consist of 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" in the Statement of Additional Information.) 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.
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.
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 NAA 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.
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. Any such 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 Sub-Advisor deems creditworthy and only on
such terms the Advisor or Sub-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.
The Fund's policies set forth as fundamental investment restrictions may not be
changed without shareholder approval. The Fund's Statement of Additional
Information describes these and additional policies and restrictions concerning
the portfolio investments of the Fund.
TOTAL RETURN
The Fund may advertise total return. Total return is based on historical results
and is not intended to indicate future performance.
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 shows overall change in value, including changes in share price and
assuming all of the dividends and capital gain distributions are reinvested. A
cumulative total return reflects the performance 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 front-end sales charge. Of course,
total returns will be higher if sales charges are not taken into account.
Quotations of "overall return" do not reflect deduction of the sales charge. You
should consider overall return figures only if you qualify for a reduced sales
charge, or for purposes of comparison with comparable figures which also do not
reflect sales charge, such as mutual fund averages compiled by Lipper Analytical
Services, Inc. ("Lipper"). Further information about the Fund's performance is
contained in its Annual Report to Shareholders, which may be obtained without
charge.
MANAGEMENT OF THE FUND
The Fund's Board of Directors supervises the Fund's activities and reviews its
contracts with companies that provide it with services.
The Fund is a series of Calvert New World Fund, Inc., an open-end management
investment company organized as a Maryland corporation on December 22, 1994.
The Fund is neither required nor intends to hold annual shareholder meetings,
but special meetings may be called for purposes such as electing or removing
Directors, changing fundamental policies, or approving a management contract. As
a shareholder, you receive one vote for each share of the Fund you own.
Calvert-Sloan Advisers, L.L.C. serves as Advisor to the Fund.
Calvert-Sloan Advisers, L.L.C. (the "Advisor") is the Fund's investment advisor.
It is located at 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814.
It is jointly owned by Calvert Group, Ltd., and Sloan Holdings, Inc., and was
organized in the State of Maryland on March 3, 1995. Although the Advisor is a
new venture, the individuals involved in its management are experienced
employees of Calvert Group, Ltd. and its subsidiary, Calvert Asset Management
Company, Inc. (a Sub-Advisor to the Fund), and New Africa Advisers, Inc. (also a
Sub-Advisor to the Fund), a subsidiary of Sloan Financial Group (see below). The
Advisor provides the Fund with investment supervision and management,
administrative services and office space; furnishes executive and other
personnel to the Fund; and pays the salaries and fees of all Directors who are
affiliated persons of the Advisor. The Advisor may also assume and pay certain
advertising and promotional expenses of the Fund and reserves the right to
compensate broker-dealers in return for their promotional or administrative
services. The Fund pays all other operating expenses as noted in the Statement
of Additional Information.
The Fund's organizational expenses were advanced to the Fund by Calvert-Sloan
Advisers, L.L.C. These expenses will be amortized over a sixty-month period
which will commence with the inception of the Fund. In the event that the Fund
liquidates before the deferred organization expenses are fully amortized,
Calvert-Sloan Advisers, L.L.C. shall bear such unamortized deferred organization
expenses.
The Fund will be capitalized with $100,000 initial seed money from Calvert
Group, Ltd., and Sloan Financial Group. Therefore, they will control the Fund
until shareholders have purchased $100,000 in shares.
New Africa Advisers, Inc., is one of the Fund's Sub-Advisors.
New Africa Advisers, Inc., is one of the Sub-Advisors to the Fund. NAA's
principal business office in the U.S. is 103 West Main Street, Fourth Floor,
Durham, North Carolina 27701. It also has offices in New York City and
Johannesburg, South Africa. NAA is a registered investment advisor and is wholly
owned by Sloan Financial Group, Inc. ("SFG"). NAA was founded in 1992 to provide
investors with access to African-related investment opportunities. Combining
African emerging markets and global portfolio management expertise, New Africa
Advisers is uniquely qualified in this era of post-apartheid African
investments. Along with investment research and statistical information, NAA
provides investment advisory assistance and the day-to-day management of the
Fund's investments and re-investments.
The Sloan Financial Group, NAA's parent company, headquartered in Durham, North
Carolina, is the nation's largest minority-owned financial services firm.
Founded in 1986 by Maceo K. Sloan, (Chairman, President, and Chief Executive
Officer), the company's roots date back to 1898 when Sloan's ancestors founded
North Carolina Mutual Life Insurance Company, the nation's largest
minority-owned insurance firm. Presently, Sloan Financial Group contains two
investment management subsidiaries, NCM Capital Management Group, Inc., and New
Africa Advisers. Within its family of companies, SFG currently manages assets of
approximately $3 billion, and the firm's client base includes many of the
nation's largest employee benefit, foundation, and endowment plans.
CAMCO is one of the Fund's Sub-Advisors.
CAMCO is one of the Sub-Advisors to the Fund. CAMCO's principal business office
is 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814. CAMCO manages
the U.S. dollar portion of the Fund's cash reserves. CAMCO is a subsidiary of
Calvert Group, Ltd., and currently serves as investment advisor to First
Variable Rate Fund for Government Income, Calvert Tax-Free Reserves, Calvert
Social Investment Fund, Calvert Cash Reserves (d/b/a Money Management Plus), The
Calvert Fund, Calvert Municipal Fund, Inc., Calvert World Values Fund, Inc., and
Acacia Capital Corporation.
Portfolio Managers - Investment selections for the Fund are made by a team.
Investment selections for the Fund are made by a team, led by Maceo K. Sloan,
Chairman of New Africa Advisers, Inc. Mr. Sloan's 25-year career in the
investment management industry began at North Carolina Mutual Life Insurance
Company where he held positions including Investment Analyst, Treasurer, Vice
President, and Chief Investment Officer. Presently, he serves as Chairman,
President, and Chief Executive Officer of Sloan Financial Group and NCM Capital
Management Group, Inc. Mr. Sloan is a Director of the National Association of
Securities Professionals, a Chartered Financial Analyst and a Fellow of the Life
Management Institute. He 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.
Justin F. Beckett is President and CEO of New Africa Advisers, Inc. He has ten
years' experience in the investment field. Mr. Beckett began researching
Africa's capital markets in 1990 and the experiences and information that Mr.
Beckett has amassed since then represent the foundation of NAA's investment
philosophy. Mr. Beckett was one of the first U.S. professionals to establish a
dialogue with South Africa's post-apartheid investment community, and now
resides in Johannesburg. As a recognized expert on investments in South Africa,
Mr. Beckett has been quoted in numerous periodicals (Pensions & Investments, The
Wall Street Journal, The New York Times, The Washington Post), and has chaired
and spoken on several conference panels relative to investments in South Africa.
Mr. Beckett has also appeared on The Color of Money, Reflections, PBS Morning
News, and Prime Time Sunday.
Clifford D. Mpare, Chief Investment Officer of NAA, is a native of Ghana, in
West Africa. He has over ten years of investment experience, hands-on knowledge
of African capital markets, and experience in the U.S. and Canadian markets.
Prior to joining NAA's parent company, SFG, Mr. Mpare, who is a Chartered
Financial Analyst and a Certified Management Accountant, was a Senior Analyst
with First Union Corp's private equity department, where he specialized in the
valuation of unlisted securities. He serves on the review board of the
Association of Investment Management and Research, and is a member of the North
Carolina Society of Financial Analysts, the Institute of Chartered Financial
Analysts, the Institute of Management Accountants, and the Society of Management
Accountants of Canada.
CAMCO manages the U.S. dollar portion of the Fund's cash reserves.
The U.S. dollar portion of the Fund's cash reserves is invested by Calvert Asset
Management Company, Inc., headed by Reno Martini, Senior Vice President and
Chief Investment Officer. Mr. Martini oversees the management of all Calvert
Group portfolios. He has extensive experience in evaluating and purchasing
municipal securities.
Calvert Group is one of the largest investment management firms in the
Washington, D.C. area.
Calvert Group, Ltd., parent of the Fund's transfer agent, distributor, and
CAMCO, 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, 1994, Calvert Group managed and administered assets in excess of $4.2
billion and more than 200,000 shareholder and depositor accounts.
The Advisor receives a fee based on a percentage of the Fund's assets and the
performance of the Fund. From this, it pays the Sub-Advisors a fee.
The Investment Advisory Agreement between the Fund and the Advisor provides that
the Advisor is entitled to a base annual fee, payable monthly, of 1.50% of the
Portfolio's average daily net assets. From this, the Advisor pays a base annual
fee of 0.755% to NAA, 0.495% to CAMCO, and a fee of 0.10% to Sloan Holdings,
Inc., for consulting services. Commencing on July 1, 1988, the Adviser will
receive a "Performance Fee," applied prospectively, based on the investment
performance of the Fund over a "Performance Period" in relation to the
investment record of the Morgan Stanley South Africa Index. The Performance Fee
will be adjusted up or downward to the extent to which performance of the Fund
exceeds or trails the Morgan Stanley South Africa Index:
Performance versus the Performance Fee
Morgan Stanley Adjustment
South Africa Index
30% to less than 60% 0.05%
60% to less than 90% 0.07%
90% or more 0.10%
The Advisor will pay NAA a performance fee equal to the Performance Fee the
Advisor receives from the Fund.
The Advisor may in its discretion defer its fees or assume the Fund's operating
expenses. The Investment Advisory Agreement provides that the Advisor may later,
to the extent permitted by law, recapture any fees it deferred, or expenses it
assumed during the two prior years
Calvert Administrative Services Company provides administrative services for the
Fund.
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,
payable monthly, from the Fund of 0.25% of the Fund's average daily net assets.
Calvert Distributors, Inc. serves as underwriter to market the Fund's shares.
Calvert Distributors, Inc. ("CDI") is the Fund's principal underwriter and
distributor. Under the terms of its underwriting agreement with the Fund, CDI
markets and distributes the Fund's 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 Fund's transfer, dividend disbursing
and shareholder servicing agent.
SHAREHOLDER GUIDE
Opening An Account
You can buy shares of the Fund in several ways.
An account application should accompany 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.
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
The Fund offers one class 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.
The Fund bears some of the costs of selling its shares under Distribution Plans
adopted with respect to its shares pursuant to Rule 12b-1 under the 1940 Act.
Payments under the Class A Distribution Plan are limited to 0.75% annually of
the average daily net asset value of Class A shares.
Class A Shares
Class A shares are offered at net asset value plus a front-end sales charge as
follows:
Concession to
Dealers as a %
As a % of As a % of Net of Amount
Offering Price Amount Invested Invested
Amount of Investment
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Less than $50,000 2.50% 2.56% 2.00%
$50,000 but less than $100,000 2.00% 2.04% 1.50%
$100,000 but less than $250,000 1.50% 1.52% 1.10%
$250,000 but less than $500,000 1.25% 1.27% 0.95%
$500,000 but less than $1,000,000 1.00% 1.01% 0.85%
$1,000,000 and over 0.00% 0.00% 0.75%*
*For new investments (new purchases but not exchanges) of $1 million or more,
CDI may pay broker-dealer, on a monthly basis for 12 months, an annual rate of
0.75%. Payments will be made monthly at the rate of 0.0625% of the amount of the
investment, less redemptions.
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
The 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 annual
rate of 0.75% of the average daily net asset value of Class A shares, to pay
expenses associated with the distribution and servicing of Class A shares. Fees
paid by the Fund to CDI under the Class A Distribution Plan are used to pay to
dealers and others, including CDI salespersons who service accounts, quarterly
compensation at an annual rate of up to 0.50%, plus service fees at an annual
rate of up to 0.25% of the average daily net asset value of Class A shares,
beginning the thirteenth month after the shares are purchased. The distribution
fees also are used 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.
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. Eligible marketing and distribution expenses may be paid pursuant to
the Fund's Rule 12b-1 Distribution Plan.
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.
HOW TO BUY SHARES
Method Initial investment Additional Investments
By Mail $2,000 minimum $250 minimum
Please make your check Please make your check
payable to the Fund and payable to the Fund and
mail it with your mail it with your
application to: 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, Certified, or Overnight Mail: Calvert Group
c/o NFDS, 6th Floor
1004 Baltimore
Kansas City, MO 64105-1807
Through Your Broker $2,000 minimum $250 minimum
At the Calvert Visit the Calvert Branch Office to make investments by check.
Branch Office See the back cover page for the address.
FOR ALL OPTIONS BELOW, PLEASE CALL YOUR BROKER OR CALVERT GROUP AT 800-368-2745
By Exchange $2,000 minimum $250 minimum
(From your account in another Calvert Group fund)
When opening an account by exchange, your new account must be established with
the same name(s), address and taxpayer identification number as your existing
Calvert account.
By Bank Wire $2,000 minimum $250 minimum
By Calvert Money Not Available $50 minimum
Controller* for Initial Investment
*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.
NET ASSET VALUE
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.
This value is calculated at the close of the Fund's business day, which
coincides with the closing of the regular session of the New York Stock Exchange
(normally 4:00 p.m. Eastern time). The Fund is open for business each day the
New York Stock Exchange is open. All purchases of Fund shares will be confirmed
and credited to your account in full and fractional shares (rounded to the
nearest 1/1000th of a share).
Fund 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 Board
of Directors believes accurately reflects fair value. Securities which are
primarily traded on foreign securities exchanges are generally valued at the
preceding closing values of such securities on their respective exchanges (See
the Statement of Additional Information -- "Determination of Net Asset Value")
relating to the valuation of foreign securities. Financial futures are valued at
the settlement price established each day by the board of trade or exchange on
which they are traded. All assets and liabilities initially expressed in foreign
currency values will be converted into United States dollars as last quoted by
any recognized dealer.
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.
Your purchase will be processed at the next offering price based on the next net
asset value calculated after your order is received and accepted. If your
purchase is made by federal funds wire, check, or exchange, and is received by
4:00 p.m. (Eastern time), your account will be credited on the day of receipt.
If your purchase is received after 4:00 p.m. Eastern time, it will be credited
the next business day. All your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks. No cash will be accepted. The Fund reserves
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 purchase will be
canceled and you will be charged a $10 fee plus costs incurred by the Fund. When
you purchase by check or with Calvert Money Controller, the Fund can hold
payment on redemptions until it is reasonably satisfied that the investment is
collected (normally 10 business days from purchase date). To avoid this
collection period, you can wire federal funds from your bank, which may charge
you a fee
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 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
You may exchange shares of the Fund for shares of the same class of other
Calvert Group Funds.
If your investment goals change, the Calvert Group Family of Funds has a variety
of investment objectives 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. However, the Fund is intended as
a long-term investment and not for frequent short-term trades. Before you make
an exchange from a Fund, 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 into which you want to exchange for relevant information, including
class offerings. The exchange privilege is only available in States where shares
of the Fund into which you want to exchange are registered for sale.
Each exchange represents the sale of shares of one Fund and the purchase of
shares of another. Therefore, you could realize a taxable gain or loss on the
transaction.
Shares of a particular class of the Fund may be exchanged only for shares of the
same class of another Calvert Fund, except that any class may be exchanged for
shares of any money market fund.
Complete and sign an application for an account in that Fund, 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 you have not declined telephone transaction privileges and the
shares are not in certificate form. The exchange will be made on the fifth
business day following the receipt of the request. See "Selling Your Shares" and
"How to Sell Your Shares-- By Telephone, and--By Exchange to Another Calvert
Group Fund."
You may incur a redemption fee.
Shares on which you have already paid a sales charge at Calvert Group and shares
acquired by reinvestment of dividends or distributions may be exchanged into
another Fund at no additional charge, provided the shares have been held in the
Fund for two (2) full years. Redemption of shares that have been held in the
Fund for less than two years are subject to a 2.00% redemption fee. See "How to
Sell Your Shares."
The Fund reserves 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 Group has a round-the-clock telephone service that lets existing
customers use a push button phone with tone capabilities to obtain prices,
performance information, account balances, and authorize certain transactions.
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 account in the
Fund with one phone call. Allow one or two business days after the call for the
transfer to take place from your bank to Calvert; for redemptions, allow five to
seven days after the call for the redemption proceeds to be sent to your bank.
All Calvert Money Controller transaction requests must be received by 4:00 p.m.
Eastern time.
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 Fund shares. You will receive a
confirmation from us for these transactions, and a debit entry will appear on
your bank statement. Share purchases made through Calvert Money Controller will
be subject to the applicable sales charge. If you would like to make
arrangements for systematic monthly or quarterly redemptions from your Calvert
account, call us for a Money Controller Application.
Telephone Transactions
Calvert may record all telephone calls.
You may purchase, redeem, or exchange shares, wire funds and use Calvert Money
Controller by telephone if you have pre-authorized service instructions. You
automatically have telephone privileges unless you elect otherwise. The Fund,
the transfer 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 "Option" sections of the 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
An effort to reduce Fund expenses and save paper and trees for the environment.
If you have multiple accounts with Calvert, you may receive combined mailings of
some shareholder information, such as 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 Fund pays 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 the 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 of the Fund may
be modified in these programs, and administrative charges may be imposed 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 in the Fund 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 chart on page __. Also, reduced sales charges may apply. See "Exhibit A -
Reduced Sales Charges."
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, or to corporations and
their employees.
Simplified Employee Pension Plan (SEP-IRA): available to self-employed people
and their partners, or to corporations. Salary reduction pension plans (SAR-SEP
IRAs) are also available to employers with 25 or fewer employees.
403(b)(7) Custodial Accounts: available to employees of most non-profit
organizations and public schools and universities.
HOW TO SELL YOUR SHARES
You may redeem all or a portion of your shares on any business day. Because the
securities held by the Fund may be far less liquid than securities that are
issued in mature markets, and to allow for the orderly redemption of shares,
your shares will be redeemed at the net asset value next calculated after your
redemption request is received and accepted, but the redemption proceeds may be
mailed, wired, or sent by electronic transfer up to five business days later. At
the Fund's sole discretion, you may receive securities in lieu of cash. See
"Purchase and Redemption of Shares" in the Statement of Additional Information.
If you redeem shares of the Fund (including exchanges) after holding them less
than two years, the Fund will deduct a redemption fee equal to 2.0% of the net
asset value of the shares redeemed. The fee will be retained by the Fund and
used to offset transaction costs that short-term trading imposes on the Fund and
its shareholders. If shares you are redeeming were not all held for the same
length of time, those shares you held longest will be redeemed first for
purposes of determining whether this fee applies. Below are specific
requirements necessary to make sure your redemption request is accepted.
Remember that the Fund may hold payment on the redemption of your shares until
it is 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 by
mail, electronic transfer, or wire between the fifth and seventh day. Calvert
Money Controller redemptions generally will be credited to your bank account
between the fifth and seventh 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.
Minimum account balance is $1,000 per Fund.
Please maintain a balance in your account of at least $1,000 per Fund. If, due
to redemptions, it falls below $1,000, your account may be closed and the
proceeds mailed to you at the address of record. You will be given notice that
your account will be closed after 30 days unless you make an additional
investment to increase your account balance to the $1,000 minimum.
By Mail To:
Calvert Group
P.O. Box 419544
Kansas City, MO
64141-6544
You may redeem available funds from your account at any time by sending a letter
of instruction, including your name, account and Fund 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, then a voided bank check must be enclosed
with your letter. If you do not have a voided check or if you would like funds
sent to a different address or another person, your letter must be signature
guaranteed.
Type of Registration Requirements
Corporations,
Associations Letter of instruction and corporate
resolution, signed 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 an address or
bank you have previously authorized. A charge of $5 is imposed on wire transfers
of less than $1,000. See "Telephone Transactions." If for any reason you are
unable to reach the Fund by telephone, whether due to mechanical difficulties,
heavy market volume, or otherwise, you may send a written redemption request to
the Fund by overnight mail, or, if your account is held through a broker, see
"Through Your Broker" below.
Calvert Money Controller
Please allow sufficient time for Calvert Group to process your initial request
for this service (normally 10 business days). Your request for a redemption by
this service must be received by 4:00 p.m. Eastern time. Accounts cannot be
closed by this service.
Exchange to Another Calvert Group Fund
You must meet the minimum investment requirement of the other Calvert Group
Fund. You can only exchange between accounts with identical names, addresses and
taxpayer identification number, unless previously authorized with a
signature-guaranteed letter. See "Exchanges."
Systematic Check Redemptions
If you maintain an account with a balance of $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 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.
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 Fund distributes substantially all of its net investment income
and capital gains to shareholders.
Dividends from the Fund's net investment income are declared and paid annually.
Net investment income consists of the interest income, net short-term capital
gains, if any, and dividends declared and paid on investments, less expenses.
Distributions of net long-term capital gains, if any, are normally declared and
paid by the Fund once a year; however, the Fund does not anticipate making any
such distributions unless available capital loss carryovers have been used or
have expired.
Dividend Payment Options
Dividends and distributions are automatically reinvested in additional shares,
unless on the account application you request to have them paid to you in cash
(by check or by Calvert Money Controller). You may also request to have your
dividends and distributions from the Fund invested at net asset value ("NAV") in
shares of any other Calvert Group Fund. If you choose to have them reinvested in
the same Fund, the new shares will be purchased at the NAV (no sales charge) on
the reinvest date, which is generally 1 to 3 days prior to the payment date. You
must notify the Fund in writing prior to the record date if you want to change
your payment options. If you elect to have dividends and/or distributions paid
in cash, and the U.S. 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.
"Buying a Dividend"
At the time of purchase, the share price of the 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 as dividends or capital gains distributions. On the record date for a
distribution, the Fund's per 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
The Fund normally distributes all net income and capital gain to shareholders.
These distributions are taxable to you regardless of whether they are taken in
cash or reinvested. Distributions of dividends and net realized short-term
capital gains are taxable as ordinary income; capital gains distributions are
taxable as long-term capital gains regardless of how long you have held the
shares. Dividends and distributions declared in December and paid in January are
taxable in the year they are declared. The Fund will mail you Form 1099-DIV in
January indicating the federal tax status of your dividends.
Distributions resulting from the sale of certain foreign currencies and debt
securities are taxed as ordinary income gain or loss. If these transactions
result in reducing the Fund's net income, a portion of the dividends may be
classified as a return of capital (which lowers your tax base). If the Fund pays
taxes to foreign governments during the year, the taxes will reduce the Fund's
dividends but will still be included in your taxable income. However, you may be
able to claim an offsetting credit or deduction on your tax return for your
portion of foreign taxes paid by the Fund.
You may realize a capital gain or loss when you sell or exchange shares.
If you sell or exchange your Fund shares you will have a short or long-term
capital gain or loss, depending on how long you owned the shares which were
sold. In January, the Fund will mail you Form 1099-B indicating the proceeds
from 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.
Taxpayer Identification Number, Back-up Withholding
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 the
Fund to withhold 31% of your dividends, capital gain distributions, and
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 at the current NAV on the date of redemption. The Fund 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 Fund at the time of purchase to take advantage of
the reduced sales charge.
Right of Accumulation. The sales charge is 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 Statement of
Additional Information.
Group Purchases. If you are a member of a qualified group, you may purchase
shares of the Fund 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 (i) has been in existence for more than six
months, (ii) has a purpose other than acquiring Fund shares at a discount, and
(iii) satisfies uniform criteria which enable CDI and dealers offering Fund
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 dealers distributing the Fund's
shares, must agree to include sales and other materials related to the Fund in
its publications and mailings to members at reduced or no cost to CDI or
dealers, and must seek to arrange for payroll deduction or other bulk
transmission of investments to the Fund.
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)(7) of the Code if, at the time of
purchase, Calvert Group has been notified in writing that the 403(b)(7) plan has
at least 200 eligible employees. Furthermore, there is no sales charge on shares
purchased for the benefit of a retirement plan qualifying under Section 401(k)
of the Code if, at the time of such purchase, the 401(k) plan administrator has
notified Calvert Group in writing that a) its 401(k) plan has at least 200
eligible employees; or b) the cost or current value of shares the plan has in
Calvert Group of Funds (except money market funds) is at least $1 million.
Neither the Fund, 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 (portfolio
or series) of the Calvert Group of Funds sold to:
(1) current and retired members of the Board of Trustees/Directors of the
Calvert Group of Funds, (and the Advisory Council of the Calvert Social
Investment Fund);
(2) directors, officers and employees of the Advisor, Distributor, and their
affiliated companies;
(3) directors, officers and registered representatives of brokers distributing
the Fund's shares; and immediate family members of persons listed in (1), (2),
or (3) above;
(4) dealers, brokers, or registered investment advisors that have entered into
an agreement with CDI providing specifically for the use of shares of the Fund
(Portfolio or Series) in particular investment programs or products (where such
program or product already has a fee charged therein) made available to the
clients of such dealer, broker, or registered investment advisor;
(5) trust departments of banks or savings institutions for trust clients of such
bank or savings institution; and
(6) purchases placed through a broker maintaining an omnibus account with the
Fund (Portfolio or Series) and 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 with a sales charge automatically invested in another account
with no additional sales charge. Dividends and distributions from Calvert Group
money market funds used to purchase shares of the Fund will be subject to the
applicable sales charge.
Reinstatement Privilege. If you redeem Fund 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 Fund reserves the right to
modify or eliminate this privilege.
Redemptions From Other Mutual Funds. You may purchase shares of the Fund at net
asset value, without sales charge, to the extent that the purchase represents
proceeds from a redemption (within the previous 60 days) of shares of another
mutual fund. When making a purchase at net asset value under this provision, the
Fund must receive one of the following with your direct purchase order: (i) the
redemption check representing the proceeds of the shares redeemed, endorsed to
the order of the Fund, or (ii) a copy of the confirmation from the other fund,
showing the redemption transaction. Standard back office procedures should be
followed for wire order purchases. Purchases with redemptions from money market
funds are not eligible for this privilege. This provision is effective through
December 31, 1995 only, but may be extended at the discretion of the
Distributor.
================================================================================
To Open an Account:
800-368-2748 Prospectus
April 12, 1995
CALVERT NEW WORLD FUND, INC.
Calvert New Africa Fund
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
PRINCIPAL UNDERWRITER
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
Table of Contents
Fund Expenses
Investment Objective and Policies
Risk Factors
Risk Diversification and Controls
Economic Information
Investment Techniques and Related Risks
Total Return
Management of the Fund
SHAREHOLDER GUIDE:
Alternative Sales Options
How to Buy Shares
Net Asset Value
When Your Account Will Be Credited
Exchanges
Other Calvert Group Services
How to Sell Your Shares
Dividends and Taxes
Exhibit A - Reduced Sales Charges
