March 31, 1998
ANNUAL
REPORT
CALVERT NEW AFRICA FUND
<PAGE>
CALVERT NEW AFRICA FUND
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Calvert Group
c/o NFDS, 6th Floor
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Address: http://www.calvertgroup.com
Principal Underwriter
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814
This report is intended to provide fund information to shareholders. It is not
authorized for distribution to prospective shareholders unless preceded or
accompanied by a prospectus.
CALVERT GROUP'S FAMILY OF FUNDS
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New Africa Fund
<PAGE>
Table of Contents
President's Letter 1
Portfolio Manager Remarks 2
Report of Independent Accountants 4
Schedule of Investments 5
Statement of Assets and Liabilities 7
Statement of Operations 8
Statements of Changes in Net Assets 9
Notes to Financial Statements 10
Financial Highlights 13
Dear Shareholders:
At the end of 1997, a financial crisis in the developing nations of Southeast
Asia emerged as a threat to this historic bull market. Market pundits sounded
the warning bell, and fund managers cautioned investors to check their
expectations and confirm their objectives. However, as has been the case of
late, each new precipice turns out to be a launching pad for a new flight
upward.
Virtually every sector of the US equity market turned in double-digit returns
for the first quarter of 1998. Looking beyond the US, most international
markets also posted strong gains, notably the troubled Pacific Rim countries,
which snapped back sharply, and the Western European markets of Germany,
France and Great Britain. We're pleased to note that almost every Calvert
Group fund also reported strong absolute and relative returns.
The strength of the global stock market is due in large part to the
fundamental strength of major economies around the world. Favorable investment
conditions of low inflation and an expanding economy have so far helped the
market work through concerns for the consequences of Southeast Asia's
financial troubles and worries that companies' earnings growth may not be as
robust.
This protracted bull market has shown us time and again that its strength
should not be underestimated. For investors, its ability to defy prediction
reinforces the soundness of a long-term approach that focuses on investors'
goals rather than short-term market trends.
Thank you for choosing Calvert Group. We appreciate your business and your
confidence in our investment programs.
Sincerely,
/s/
Barbara J. Krumsiek
President and CEO
April 24, 1998
<PAGE>
Portfolio Statistics
March 31, 1998
Investment Performance
6 Months 12 Months
ended ended
3/31/98 3/31/98
New Africa Fund 7.40% 6.72%
MSCI South
Africa Index -4.29% -8.64%
Lipper Emerging
Markets Funds
Average -12.86% -6.27%
Ten Largest Stock Holdings
% of Net Assets
Arabian International Construction 6.5%
Social Security Bank 6.1%
Umbono Investment Corp. 6.0%
First National Bank 5.0%
Sechaba Brewery 4.9%
Dimension Data Holdings 4.3%
Nedcor 3.9%
Malope Foods 3.6%
Olympic Group Financial IV 3.5%
Board of Executors 3.4%
Total 47.2%
Investment performance does not reflect the deduction of any front-end sales
charge.
Sources: Lipper Analytical Services, Inc. and Bloomberg
CLIFFORD MPARE
of
New Africa Advisers
What were the reasons behind the Fund's strong relative performance?
The New Africa Fund appreciated 7.40% in the six months ending March 31, 1998
and 6.72% for the year. Its 12-month return outstripped the return on the
Morgan Stanley South Africa Index (-8.64%) and the return on the Lipper
Emerging Markets Funds Average (-6.27%).
We typically see a performance disparity, since these measures don't have
identical investment universes. In this case, our significantly better
performance was attributable to favorable asset allocation by country and
strong stock selection. Winning investments in South Africa and Egypt, our two
largest country allocations, helped to boost returns.
What changes did you make to the Fund's geographic diversification?
Given the improving economic fundamentals in Ghana, we decided early on to
increase our allocation to this market. Although we ran the risk of being
early, valuations were very enticing. Inflation, albeit high, was declining,
and real GDP was expanding nicely. We have been focusing on Kenya for
essentially the same reasons.
Our discipline and long-term approach allows us to seek relative value in
riskier countries (those with more volatile economies and markets) like Kenya
and Ghana, with a focus on the best-run and strategically best-placed
companies. Diligent focus on the macro-economic picture resulted in South
Africa, Ghana, Botswana and Kenya playing significant roles in our success
during the period. A reduction in our exposure to Zimbabwe was also positive
for performance.
On what basis did you select stocks, and which companies led the Fund's return?
We continue to focus on stocks that meet our value criteria and to employ
diligent fundamental analysis. The fact that we are domiciled in the African
region has a huge impact on our ability to evaluate potential investments and
monitor existing holdings.
Companies such as Arabian International Construction and EFIC in Egypt, the
banks in South Africa and Social Security Bank, in Ghana, have done extremely
well for us. In South Africa, the banks have non-performing loans as a
percentage of advances of around 3%, margins are high and a wave of
consolidation activity is in progress. We have avoided the Kenya banks because
disclosure is poor and, if banks were required to adequately provision against
bad debts, we believe many of the Kenya banks would be insolvent.
What effect did Asia's financial crisis have on the African markets?
Africa as a whole did reasonably well in response to events that occurred in
Asia. During the final quarter of 1997, the countries of Zimbabwe, Egypt and
South Africa were affected. With the exception of Zimbabwe, the local stock
market, and not the currency primarily felt the impact. Zimbabwe experienced a
self-inflicted currency crisis during the latter part of last year that was
magnified by the Asian crisis. Egypt experienced weakness during the second
quarter of last year followed by a V-shaped recovery, just prior to the Asian
crisis. The recovery was lost in addition to further declines in response to
the Asian crisis. In all three cases, the impact has been short term and local
fundamentals have dominated the markets during the first quarter of 1998.
Throughout the rest of Africa, the Asian crisis had virtually no effect.
April 22, 1998
PORTFOLIO STATISTICS
March 31, 1998
Average Annual Total Returns
As of 3/31/98
One year 4.16%
Since inception 3.18%
(4/12/95)
Performance Comparison
Comparison of change in value of $10,000 investment.
Bar chart here showing comparison from 5/1/95 to 3/31/98
Calvert New Africa Fund $10,975
MCSI South Africa Index $9,162
Lipper Emerging Markets Funds Index $10,720
Total returns assume reinvestment of dividends and, for Class A shares,
reflect the deduction of the Fund's maximum front-end sales charge of 2.50%.
No sales charge has been applied to the index used for comparison. Past
performance is no guarantee of future results.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of Calvert New World Fund, Inc. and Shareholders of
Calvert New Africa Fund:
We have audited the accompanying statement of assets and liabilities of
Calvert New Africa Fund (the "Fund"), including the schedule of investments,
as of March 31, 1998, and the related statement of operations for the year
then ended, the statements of changes in net assets for each of the two years
then ended and the financial highlights for each of the two years then ended
and for the period April 12, 1995 (commencement of operations) through March
31, 1996. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of investments
owned as of March 31, 1998, by correspondence with the custodian and brokers.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Calvert New Africa Fund as of March 31, 1998, and the results of its
operations, changes in its net assets and financial highlights for the
respective periods stated in the first paragraph, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
May 1, 1998
<PAGE>
SCHEDULE OF INVESTMENTS
March 31, 1998
Equity Securities - 90.7% Shares Value
Botswana - 6.4%
Sechaba Breweries * 422,200 $570,603
Sefalana Holding Co. * 105,300 177,220
747,823
Egypt - 18.9%
Arabian International Construction * 18,100 759,589
Commercial International * 9,885 185,516
Egyptian Finance & Industrial Co. 3,300 181,827
Egyptian Starch & Glucose Manufacturing Co. 4,550 44,732
Industrial and Engineering Enterprise 18,965 345,071
Middle West of Delta Grinding * 3,205 56,434
Olympic Group Financial Investments Co. * 87,000 403,404
Silos and Storage 10,235 222,271
2,198,844
Ghana - 7.9%
Aluworks * 188,940 204,039
Ashanti Goldfields LTD (GDR) 1 9
Social Security Bank * 450,000 712,419
916,467
Kenya - 1.7%
Kenya Power & Lighting Co., LTD * 21,450 64,511
Uchumi Supermarkets * 189,142 126,411
190,922
Mauritius - 1.6%
Air Mauritius * 33,200 37,903
Mauritius Commercial Bank * 12,000 52,000
New Mauritius Hotels * 2,700 5,906
State Bank of Mauritius * 88,750 53,620
Sun Resorts 17,700 37,612
187,041
Morocco - 7.5%
Banque Marocaine De Comm. 4,542 298,263
Financiere Diwan 4,400 141,140
ONA 3,100 297,068
Wafabank 1,300 135,723
872,194
South Africa - 43.3%
Adock Ingram (N Shares) 2 8
Anglo-American Platinum 14,805 227,860
Bidvest Group 24,351 265,973
Board of Executors, LTD 8,300 393,943
Chariot Holdings 1,420,900 208,811
City Lodge Hotels 1 3
De Beers Centenary 10,900 $237,677
Dimension Data Holdings, LTD 78,520 502,884
First National Bank, LTD 41,800 575,264
Gold Fields Ltd. * 462 2,523
Investec Bank (ADR) 6,361 323,418
Liberty Life Association of Africa 6,922 233,689
Mossie Holdings ^ 25 200,576
Malope Foods 456,850 412,803
Nedcor 15,374 451,862
New Africa Investments, LTD 177,694 282,306
Real Africa Investments * 3,900 14,328
Umbono Investment Corp. * 1,301,000 697,587
5,031,515
Zimbabwe - 3.4%
Delta Corp.* 36,500 33,901
Interfresh * 3,498,300 184,121
TA Holdings * 878,240 92,446
Wankie Colliery Co.* 341,070 84,476
394,944
Total Equity Securities (Cost $8,285,166) 10,539,750
Principal
Convertible Bonds - 1.3% Amount
South Africa
First South Africa Corp., LTD, 9.00%, 6/15/04 $141,000 151,575
Total Convertible Bonds (Cost $141,000) 151,575
TOTAL INVESTMENTS (Cost $8,426,166) - 92.0% 10,691,325
Other assets in excess of liabilities - 8.0% 922,065
Net Assets - 100% $11,613,390
* Non-income producing
^ This security was valued by the Board of Directors. See Note A.
See notes to financial statements.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1998
Assets
Investments in securities, at value $10,691,325
Cash 1,263,591
Receivable for securities sold 37,767
Interest and dividends receivable 20,270
Receivable for shares sold 16,271
Deferred organization expenses 27,720
Other assets 8,410
Total assets 12,065,354
Liabilities
Payable for securities purchased 354,503
Payable to Calvert - Sloan Advisors, L.L.C. 34,077
Payable to Calvert Administrative Service Corp., Inc. 2,321
Payable to Calvert Shareholder Services, Inc. 484
Payable to Calvert Distributors, Inc. 6,962
Accrued expenses and other liabilities 53,617
Total liabilities 451,964
Net Assets $11,613,390
Net Assets Consist of:
Paid-in capital applicable to 870,414 outstanding shares of common stock,
$.01 par value with 250,000,000 shares authorized $10,218,803
Undistributed net investment income (loss) (66,014)
Accumulated net realized gain (loss) on investments
and foreign currencies (790,673)
Net unrealized appreciation (depreciation) on investments
and assets and liabilities in foreign currencies 2,251,274
Net Assets $11,613,390
Net Asset Value per Share $13.34
See notes to financial statements.
<PAGE>
STATEMENT OF OPERATIONS
Year Ended March 31, 1998
Net Investment Income
Investment Income
Dividend income (net of foreign taxes of $10,452) $257,957
Interest income 11,308
Total investment income 269,265
Expenses
Investment advisory fee 152,500
Transfer agency fees and expenses 21,573
Distribution Plan expenses 76,250
Directors' fees and expenses 61,888
Administrative fees 25,417
Custodian fees 52,122
Registration fees 28,440
Reports to shareholders 14,006
Professional fees 22,970
Organizational expenses 13,651
Miscellaneous 4,486
Reimbursement from Advisor (90,766)
Total expenses 382,537
Fees paid indirectly (52,122)
Net expenses 330,415
Net Investment Income (Loss) (61,150)
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) on:
Investments (433,693)
Foreign currencies (100,905)
(534,598)
Change in unrealized appreciation or depreciation on:
Investments and foreign securities 1,313,670
Assets and liabilities in foreign currencies 319
1,313,989
Net Realized and Unrealized Gain
(Loss) on Investments 779,391
Increase (Decrease) in Net Assets
Resulting From Operations $718,241
See notes to financial statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended Year Ended
March 31, March 31,
Increase (Decrease) in Net Assets 1998 1997
Operations
Net investment income (loss) $(61,150) $(35,933)
Net realized gain (loss) (534,598) (267,132)
Change in unrealized appreciation
or depreciation 1,313,989 808,612
Increase (Decrease) in Net Assets
Resulting From Operations 718,241 505,547
Distributions to shareholders
In excess of net realized gain (114,461) -
Total distributions (114,461) -
Capital share transactions
Shares sold 2,510,992 1,231,992
Reinvestment of distributions 110,192 -
Redemption fees 8,250 9,225
Shares redeemed (825,900) (514,974)
Total capital share transactions 1,803,534 726,243
Total Increase (Decrease) in Net Assets 2,407,314 1,231,790
Net Assets
Beginning of year 9,206,076 7,974,286
End of year (including undistributed net
Investment income (loss) of $(66,014)
and $(6,912), respectively) 11,613,390 $9,206,076
Capital Share Activity
Shares sold 200,578 107,973
Reinvestment of distributions 9,874 -
Shares redeemed (67,667) (44,818)
Total capital share activity 142,785 63,155
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Note A - Significant Accounting Policies
General: The Calvert New Africa Fund (the "Fund"), the sole series of Calvert
New World Fund, Inc., is registered under the Investment Company Act of 1940
as a non-diversified, open-end management investment company. The Fund was
organized as a Maryland corporation on December 22, 1994 and began operations
on April 12, 1995. The Fund's shares of capital stock are sold with a maximum
front-end sales charge of 2.5%. Redemptions of shares held in the Fund for
less than two years are subject to a 2% fee paid to the Fund.
Security Valuation: Securities listed or traded on a national securities
exchange are valued at the last reported sale price. Unlisted securities and
listed securities for which the last sale price is not available are valued at
the most recent bid price or based on a yield equivalent obtained from the
securities' market maker. Foreign security prices, furnished by quotation
services in the security's local currency, are translated using the current U.
S. dollar exchange rate. Other securities and assets for which market
quotations are not available or deemed inappropriate are valued in good faith
under the direction of the Board of Directors.
In determining fair value, the Board considers all relevant qualitative and
quantitative information available. These factors are subject to change over
time and are reviewed periodically. The values assigned to fair value
investments are based on available information and do not necessarily
represent amounts that might ultimately be realized, since such amounts depend
on future developments inherent in long-term investments. However, because of
the inherent uncertainty of valuation, those estimated values may differ
significantly from the values that would have been used had a ready market of
the investments existed, and the differences could be material.
At March 31, 1998, $200,576 or 1.7% of net assets, were valued by the Board of
Directors.
Security Transactions and Investment Income: Security transactions are
accounted for on trade date. Realized gains and losses are recorded on an
identified cost basis. Dividend income is recorded on the ex-dividend date or,
in the case of dividends on certain foreign securities, as soon as the Fund is
informed of the ex-dividend date.
Foreign Currency Transactions: The Fund's accounting records are maintained in
U. S. dollars. For valuation of assets and liabilities on each date of net
asset value determination, foreign denominations are translated into U.S.
dollars using the current exchange rate. Security transactions, income and
expenses are converted at the prevailing rate of exchange on the date of the
event. The effect of changes in foreign exchange rates on securities is
included in the net realized and unrealized gain or loss on securities.
Distributions to Shareholders: Distributions to shareholders are recorded by
the Fund on ex-dividend date. Dividends from net investment income and
distributions from net realized capital gains, if any, are paid at least
annually. Distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles;
accordingly, periodic reclassifications are made within the Fund's capital
accounts to reflect income and gains available for distribution under income
tax regulations.
Estimates: The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reported
period. Actual results could differ from those estimates.
Redemption Fees: Charges to shareholders for redemption of shares held for
less than two years are used to defray the Fund's cost of shares redeemed.
Expense Offset Arrangements: The Fund has an arrangement with its custodian
bank whereby the custodian's fees are paid indirectly by credits earned on the
Fund's cash on deposit with the bank. Such a deposit arrangement is an
alternative to overnight investments.
Federal Income Taxes: No provision for federal income or excise tax is
required since the Fund intends to qualify as a regulated investment company
under the Internal Revenue Code and to distribute substantially all of its
earnings.
Organization Expenses: Expenses incurred in the organization of the Fund are
capitalized and amortized over a five year period.
Note B - Related Party Transactions
Calvert-Sloan Advisers, L.L.C. (the "Advisor") is jointly owned by Calvert
Group, Ltd. (which is indirectly wholly-owned by Acacia Mutual Life Insurance
Company) and Sloan Holdings, Inc. The Advisor provides investment advisory
services and pays the salaries and fees of officers and affiliated Directors
of the Fund. For its services, the Advisor receives a monthly fee based on an
annual rate of 1.50% of the Fund's average daily net assets.
The Advisor voluntarily reimbursed the Fund for advisory fees, administrative
fees and other operating expenses of $90,766.
Calvert Distributors, Inc., an affiliate of the Advisor, is the distributor
and principal underwriter for the Fund. A Distribution Plan, adopted by the
shareholders, allows the Fund to pay the distributor for expenses and services
associated with distribution of shares. The expenses paid may not exceed .75%
annually of average daily net assets of the Fund.
The Distributor paid $28,032 in addition to the commissions charged on sales
of Fund's shares.
Calvert Shareholder Services, Inc., an affiliate of the Advisor, acts as
transfer, dividend disbursing and shareholder servicing agent for the Fund.
Calvert Administrative Services Company, an affiliate of the Advisor, provides
administrative services to the Fund for an annual fee, payable monthly, of
.25% of the average daily net assets of the Fund.
Each Director who is not affiliated with the Advisor receives an annual fee of
$1,000 plus $1,000 for each Board and Committee meeting attended.
Note C - Investment Activity
During the year, purchases and sales of investments, other than short-term
securities, were $7,724,113 and $6,882,948, respectively.
The cost of investments owned at March 31, 1998 was substantially the same for
federal income tax and financial reporting purposes. Net unrealized
appreciation aggregated $2,265,159, of which $2,923,186 related to appreciated
securities and $658,027 related to depreciated securities.
Note D - Line of Credit
Effective July 1, 1997, a financing agreement is in place with all Calvert
Group Funds and State Street Bank and Trust Company ("the Bank"). Under the
agreement, the Bank is providing an unsecured line of credit facility, in the
aggregate amount of $50 million ($25 million committed and $25 million
uncommitted), to be accessed by the Funds for temporary or emergency purposes
only. Borrowings under this facility bear interest at the overnight Federal
Funds Rate plus .50% per annum. A commitment fee of .10% per annum will be
incurred on the unused portion of the committed facility which will be
allocated to all participating funds. This fee is paid quarterly in arrears.
The Fund had no loans outstanding pursuant to this line of credit as of March
31, 1998.
Note E - Subsequent Events
Effective June 1, 1998, the Fund will begin to offer three classes of shares,
each with different expense levels and sales charges. Class A shares of
capital stock will be sold with a maximum front-end sales charge of 4.75%.
This is a change from the current maximum front-end sales charge of 2.5%. In
addition, the redemption fee charge of 2% for shares held less than two years
will be eliminated. Class B shares of capital stock will be sold without a
front-end sales charge. With certain exceptions, the Fund will impose a
deferred sales charge on Class B shares at the time of redemption, depending
on how long you have owned the shares. Class C shares of capital stock will be
sold without a front-end sales charge. With certain exceptions, the Fund may
impose a deferred sales charge on Class C shares sold within one year. Class B
and C shares will have a higher level of expenses than Class A shares,
including higher Distribution Plan expenses.
Effective June 1, 1998, the Distribution Plan for Class A will be changed from
.75% to .25%, based on the classes average daily net assets. Class B and C
Distribution Plans will be 1.00%.
<PAGE>
FINANCIAL HIGHLIGHTS
Periods Ended
March 31, March 31, March 31,
1998 1997 1996***
Net asset value, beginning $12.65 $12.00 $12.00
Income from investment operations
Net investment income (.07) (.05) (.04)
Net realized and unrealized gain (loss) .89 .70 .04
Total from investment operations .82 .65 -
Distributions from
In excess of net realized gain (.13) - -
Total distributions (.13) - -
Total increase (decrease) in net asset value .69 .65 -
Net asset value, ending $13.34 $12.65 $12.00
Total return* 6.72% 5.42% 0.00%
Ratios to average net assets:
Net investment income (loss) (.60%) (.45%) (.54%)(a)
Total expenses** 3.76% 3.54% 3.75%(a)
Net expenses 3.25% 3.25% 3.24%(a)
Expenses reimbursed .89% 1.33% 1.24%(a)
Portfolio turnover 74% 23% 6%
Average commission rate paid $.0165 $.0263 N/A
Net assets, ending (in thousands) $11,613 $9,206 $7,974
Number of shares outstanding,
ending (in thousands) 870 728 664
(a) annualized
* Total return does not reflect deduction of Class A front-end sales charge.
** Ratio reflects total expenses before reduction for fee paid indirectly;
such reductions are included in the ratio of net expenses.
*** From April 12, 1995 inception.
N/A Disclosure not applicable to prior years.
