UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-06563
CALVERT WORLD VALUES FUND, INC.
(Exact name of registrant as specified in charter)
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
(Address of Principal Executive Offices)
William M. Tartikoff, Esq.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
(Name and Address of Agent for Service)
Registrant's telephone number, including area code: (301) 951-4800
Date of fiscal year end: September 30
Date of reporting period: Twelve months ended September 30, 2003
<PAGE>
Item 1. Report to Stockholders.
Calvert
Investments that make a difference (registered trademark)
E-Delivery Sign-up -- details inside
September 30, 2003
Annual Report
Calvert Capital
Accumulation Fund
Table of Contents
President's Letter
2
Social Update
4
Portfolio Management Discussion
5
Independent Auditors' Report
8
Statement of Net Assets
9
Statement of Operations
13
Statements of Changes in Net Assets
14
Notes to Financial Statements
16
Financial Highlights
20
Explanation of Financial Tables
24
Director & Officer Information Table
26
Dear Shareholders:
The markets have improved dramatically over the past year, with stocks showing substantial gains and bonds continuing to profit from an historically low interest-rate environment.
We believe that this year's broad-based market turnaround illustrates once again the value of diversification, asset allocation and long-term investing. Many investors who pursued an appropriate asset allocation, with investments in stocks, bonds and cash, were able to benefit from the rally in securities prices. Those who paid too much attention to short-term past performance and substantially reduced their stock holdings early in the year may well have missed the sharp rallies in the second quarter. At Calvert, we encourage all our shareholders to review their portfolios with their financial advisors to ensure that their investments remain in line with their specific risk tolerance, return expectations and financial goals.
A cloud on the otherwise bright performance of the markets and economy was the distressing news concerning recent market timing and illegal after-hours trading on the part of certain mutual funds. We want to assure Calvert shareholders that we have a long-standing policy of not accepting trades from market timers, which is strictly enforced. And, of course, we do not accept or execute trades after the market closes, which would be in violation of securities industry regulations.
Markets like the ones that we have seen over the past several years demonstrate that understanding risk -- at the security, fund, and asset-class level -- is an integral part of successful investing. This year, we have taken a number of steps to improve our ability to monitor and manage risk, and to prepare for further growth in our investor base. We have reorganized Calvert's investment activities into two departments, Equities and Fixed Income, each headed by Chief Investment Officers who will work closely with our Social Research Department. We believe that these changes will enhance our ability to deliver top-tier investment performance to our shareholders, while keeping investment risk at appropriate levels.
Thank you for your continued business, and we look forward to serving you in the year ahead.
Sincerely,
/s/Barbara J. Krumsiek
President and CEO
Calvert Asset Management Company, Inc.
November 2003
Social
Update
from the Calvert Social Research Department
Shareholder Activism
Calvert shareholder activism seeks to move companies already performing in a more socially responsible manner than their industry peers to a higher level of corporate responsibility. We've secured the agreement of two major pharmaceutical companies to amend and post their ethical policies for clinical research in developing countries, where people are often not provided adequate information about the risks of clinical research or are promised but not given health care in exchange for their participation in trials for new drugs.
In addition, our shareholder resolution effectiveness has increased as we've become more effective in positioning our point of view in the context of shareholders' financial interests. For example, we received 12% support on a resolution seeking inclusive diversity policies at Alltel Corporation and a remarkable 63% on a resolution for staggered board tenures at Gillette.
Corporate "dialogues" continue, including a current effort with Weyerhaeuser to establish a policy prohibiting the harvest of and trade in products from primary and old-growth forests.
Board Diversity Initiative Successes
Two companies held in Calvert Funds have agreed to adopt key language from Calvert's model board diversity charter, which reflects our belief that boards of directors should look like America, not just a small slice of it.
Social Policy Leadership Announced
Calvert has named Joe Keefe Senior Advisor for Strategic Social Policy. Mr. Keefe, who has worked for and consulted with several socially responsible mutual fund groups, will provide focused, proactive direction for our social vision.
Portfolio Management Discussion
Ed Brown
of Brown Capital Management, Inc.
Performance
Capital Accumulation Fund Class A shares returned 25.52% for the year ended September 30, 2003. The Russell Midcap Growth Index returned 38.89% for the same period. The portfolio underperformed its passive benchmark for the period by 13.37% as a mix of stock selection and sector allocation effects detracted from performance.
Investment Climate
The market has made significant progress over the past year. I believe the rally can be explained by the measure of good news. The domestic economy, which has struggled over the last three years, appears to be on the upswing. Interest rates remain at historically low levels, and the housing market continues to cook along at a very nice pace.
I believe the consumer, though stretched, remains the backbone of the economy, having prevented an even larger recession by continuing to spend in the face of a less than sanguine employment picture. Concerning employment, we think it is only a matter of time before the picture improves for jobs. I believe a 6.1% unemployment rate is relatively benign given the excesses that had to be worked through following the tech bubble and the three-year slowdown. Previous recessionary periods have seen unemployment go as high as 10%.
Portfolio Statistics
September 30, 2003
Investment Performance
(total return at NAV)
6 Months | 12 Months | |||||
ended | ended | |||||
9/30/03 | 9/30/03 | |||||
Class A | 19.83% | 25.52% | ||||
Class B | 19.22% | 24.29% | ||||
Class C | 19.33% | 24.40% | ||||
Class I** | 20.19% | 25.90% | ||||
Russell Mid-Cap Growth Index* | 27.26% | 38.89% | ||||
Lipper Mid-Cap Growth Funds Avg.* | 24.10% | 27.72% |
Ten Largest Stock Holdings
% of Net Assets | |
Staples, Inc. | 3.1% |
Network Appliance, Inc. | 2.6% |
Petsmart, Inc. | 2.5% |
Medimmune, Inc. | 2.5% |
Advance Auto Parts | 2.4% |
Health Management Associates, Inc. | 2.3% |
Adobe Systems, Inc. | 2.2% |
Altera Corp. | 2.2% |
Panera Bread Co. | 2.2% |
Analog Devices, Inc. | 2.2% |
Total | 24.2% |
Asset Allocation | |
Stocks | 98% |
Cash or Cash Equivalents | 2% |
Total | 100% |
** Note Regarding Class I Shares Total Returns: There were times during the reporting period when there were no shareholders in Class I. For purposes of reporting Investment Performance, Class A performance at NAV (i.e. does not reflect deduction of the Class A front-end sales charge) is used during these periods in which there were no shareholders in Class I. For purposes of this Investment Performance, the Class A performance at NAV was used during the period September 30, 2002 through June 3, 2003.
Investment performance does not reflect the deduction of any front-end or deferred sales charge. TR represents total return.
* Source: Lipper Analytical Services, Inc.
Portfolio Statistics
September 30, 2003
Average Annual Total Returns
(with max. load)
Class A Shares | ||||
One year | 19.54% | |||
Five year | 0.32% | |||
Since inception | 7.84% | |||
(10/31/94) | ||||
Class B Shares | ||||
One year | 19.29% | |||
Five year | 0.22% | |||
Since inception | (1.90%) | |||
(4/1/98) |
Portfolio Statistics
September 30, 2003
Average Annual Total Returns
(with max. load)
Class C Shares | ||||
One year | 23.40% | |||
Five year | 0.49% | |||
Since inception | 7.57% | |||
(10/31/94) | ||||
Class I Shares* | ||||
One year | 25.90% | |||
Since inception | (0.76%) | |||
(3/1/99) |
Performance Comparison
Comparison of change in value of $10,000 investment. (Source: Lipper Analytical Services, Inc.)
[See attached Line Graph]
* Note Regarding Class I Shares Total Returns: There were times during the reporting period when there were no shareholders in Class I. For purposes of reporting Average Annual Total Return, Class A performance at NAV (i.e. does not reflect deduction of the Class A front-end sales charge) is used during these periods in which there were no shareholders in Class I. For purposes of this Average Annual Total Return, the Class A performance at NAV was used during the period January 18, 2002 through June 3, 2003.
Average annual total returns in the Portfolio Statistics and the Performance Comparison line graph are with maximum load deducted -- they assume reinvestment of dividends and reflect the deduction of the Fund's maximum front-end or deferred sales charge. No sales charge has been applied to the index used for comparison. The value of an investment in Class A & C shares is plotted in the line graph. The value of an investment in another class of shares would be different. The graph and table do not reflect the deduction of taxes that a shareholder would pay on the Fund's distributions or the redemption of Fund shares. Past performance is no guarantee of future results.
Portfolio Strategy
Through the period
Our firm's Growth-at-a-Reasonable-Price investment strategy has remained stable throughout the period. The strategy is straightforward: develop a diverse portfolio of stocks of growing companies that are selling at reasonable valuations. Unfortunately, we have not been rewarded for this strategy due to stock selection and sector allocation effects. Stock selection was notable in the Producer Durables, Materials and Processing, and Consumer Staples sectors. However, performance attribution analysis reveals that our stock selection in two sectors -- Health Care and Technology -- was the principal detractor from performance. Poor performance was compounded by periodic cash balances over the course of the year, as even small cash balances hurt relative performance in the market's strong upward movement. Although the portfolio produced positive returns in Health Care and Technology, they were not robust enough to keep pace with the returns produced in the Index.
Going forward
Our strategy remains the same. We believe we can deliver superior performance over time by constructing a diversified portfolio of growth stocks selling at reasonable valuations. Our fundamental analysis points to a cyclical recovery in the earnings of growth companies, particularly in the Technology sector. In addition, we believe that the greatest opportunity for companies to exceed earnings expectations exists in Technology, and we have overweighted the portfolio to that sector to reflect this optimistic view. (Historically, our bottom up fundamental analysis has resulted in an overweight position to the sector.) We remain less than sanguine regarding spending related to telecom equipment, therefore our technology holdings continue to avoid the telecom equipment companies.
We have underweighted the Consumer Discretionary sector, believing it to have the greatest potential to disappoint investors relative to lofty expectations. We do not believe current valuations appropriately reflect this risk. As the market better aligns fundamentals and valuations in our view, we will look to rebalance the portfolio.
Outlook
We believe the market currently hesitates to go higher because of questions about the persistence and strength of corporate profit recovery. There appears to be some reason to support this view. Despite several market-leading stocks (particularly in Technology) pre-announcing very good earnings for third quarter, a few have indicated that they will fall short of expectations. We think this is due to some softness in the capital spending recovery -- some business executives, as is expected, hesitate to spend too aggressively after having worked through so much excess capacity over the last three years. At this point, demand for products sold to business will be driven by confidence that end demand will persist. We believe that low rates, a weak dollar, and a likely improvement in the jobs picture indicate this improvement in demand may well happen.
November 2003
Independent Auditors' Report
To the Board of Directors of Calvert World Values Fund, Inc. and
Shareholders of Calvert Capital Accumulation Fund:
We have audited the accompanying statement of net assets of Calvert Capital Accumulation Fund (the "Fund"), a series of Calvert World Values Fund, Inc., as of September 30, 2003, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. 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. The financial highlights for the years ended September 30, 2001 and 2000, were audited by other auditors who have ceased operations. Those auditors expressed an unqualified opinion on those financial statements in their report dated November 16, 2001. The financial highlights for the periods presented prior to September 30, 2000, were audited by other auditors, whose report dated November 10, 1999, expressed an unqualified opinion on those statements.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 securities owned as of September 30, 2003, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. 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 Capital Accumulation Fund as of September 30, 2003, the results of its operations for the year then ended, the changes in its net assets and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
KPMG LLP
Philadelphia, Pennsylvania
November 18, 2003
Statement of Net Assets
September 30, 2003
Equity Securities - 97.9% | Shares | Value | |||||
Air Freight - 1.3% | |||||||
EGL, Inc.* |
| 93,600 | $1,701,648 | ||||
Auto Parts & Equipment - 0.1% | |||||||
Gentex Corp.* | 5,100 | 177,684 | |||||
Banks - Regional - 2.0% | |||||||
Commerce Bancorp, Inc. | 17,800 | 852,798 | |||||
First Tennessee National Corp. | 40,600 | 1,723,876 | |||||
| 2,576,674 | ||||||
Biotechnology - 3.5% | |||||||
Cephalon, Inc.* | 27,900 | 1,281,168 | |||||
Medimmune, Inc.* | 101,000 | 3,334,010 | |||||
| 4,615,178 | ||||||
Chemicals - 0.9% | |||||||
Airgas, Inc. | 63,900 | 1,137,420 | |||||
Computers - Networking - 2.6% | |||||||
Network Appliance, Inc.* | 165,600 | 3,399,768 | |||||
Computers - Software & Services - 10.6% | |||||||
Adobe Systems, Inc. | 75,000 | 2,944,500 | |||||
Autodesk, Inc. | 37,900 | 645,058 | |||||
Documentum, Inc.* | 89,100 | 1,898,721 | |||||
Fair Isaac Corp. | 38,700 | 2,281,752 | |||||
Hyperion Solutions Corp.* | 74,600 | 2,153,702 | |||||
Macromedia, Inc.* | 88,300 | 2,184,542 | |||||
Progress Software Corp.* | 85,100 | 1,829,650 | |||||
| 13,937,925 | ||||||
Consumer Finance - 1.6% | |||||||
Providian Financial Corp.* | 178,900 | 2,109,231 | |||||
Electrical Equipment - 3.7% | |||||||
Celestica, Inc.* | 150,700 | 2,390,102 | |||||
Molex, Inc. |
| 37,500 | 1,072,125 | ||||
Symbol Technologies, Inc. | 122,300 | 1,461,485 | |||||
| 4,923,712 | ||||||
Electronics - Component Distribution - 0.5% | |||||||
W.W. Grainger, Inc. | 13,300 | 632,415 | |||||
Electronics - Instrument - 3.0% | |||||||
Tektronix, Inc.* | 64,100 | 1,586,475 | |||||
Trimble Navigation Ltd.* | 100,400 | 2,324,260 | |||||
3,910,735 | |||||||
Electronics - Semiconductors - 6.4% | |||||||
Altera Corp.* | 155,300 | $2,935,170 | |||||
Analog Devices, Inc.* | 75,900 | 2,885,718 | |||||
Xilinx, Inc.* | 93,100 | 2,654,281 | |||||
8,475,169 | |||||||
Equipment - Semiconductors - 2.8% | |||||||
Cymer, Inc.* |
| 48,000 | 1,977,600 | ||||
Lam Research Corp.* |
| 76,400 | 1,692,260 | ||||
3,669,860 | |||||||
Footwear - 1.5% | |||||||
Timberland Co.* | 45,400 | 1,936,764 | |||||
Healthcare - Drug - Major Pharmaceutical - 1.1% | |||||||
Allergan, Inc. | 17,800 | 1,401,394 | |||||
Healthcare - Hospital Management - 2.3% | |||||||
Health Management Associates, Inc. | 136,600 | 2,979,246 | |||||
Healthcare - Managed Care - 2.8% | |||||||
Coventry Health Care, Inc.* | 44,100 | 2,325,834 | |||||
Mid Atlantic Medical Services* | 25,900 | 1,332,037 | |||||
| 3,657,871 | ||||||
Healthcare - Medical Products & Supplies - 7.9% | |||||||
Affymetrix, Inc.* | 56,800 | 1,192,232 | |||||
Biomet, Inc. | 71,900 | 2,416,559 | |||||
Henry Schein, Inc.* | 32,000 | 1,814,400 | |||||
Resmed, Inc.* | 50,000 | 2,199,000 | |||||
St. Jude Medical, Inc.* | 51,300 | 2,758,401 | |||||
| 10,380,592 | ||||||
Healthcare - Special Services - 2.4% | |||||||
Pharmaceutical Product Development, Inc.* | 55,500 | 1,331,445 | |||||
Quest Diagnostics, Inc.* | 30,600 | 1,855,584 | |||||
| 3,187,029 | ||||||
Household Furnishing & Appliances - 1.5% | |||||||
La-Z-Boy, Inc. | 88,000 | 1,953,600 | |||||
Household Products - Non-Durable - 1.4% | |||||||
Church & Dwight, Inc. | 52,200 | 1,826,478 | |||||
Insurance - Multi-Line - 1.1% | |||||||
Willis Group Holdings Ltd. | 48,400 | 1,488,300 | |||||
Insurance Brokers - 0.6% | |||||||
Hilb Rogal & Hamilton Co. | 26,300 | 816,352 | |||||
Investment Banking / Brokerage - 1.8% | |||||||
Legg Mason, Inc. | 32,400 | 2,339,280 | |||||
Investment Management - 1.5% | |||||||
Franklin Resources, Inc. | 29,600 | $1,308,616 | |||||
T. Rowe Price Group, Inc. | 15,600 | 643,656 | |||||
1,952,272 | |||||||
Manufacturing - Diversified - 0.4% | |||||||
Clarcor, Inc. | 12,300 | 479,700 | |||||
Manufacturing - Specialized - 2.1% | |||||||
Cognex Corp. | 104,100 | 2,736,789 | |||||
Oil & Gas - Drilling & Equipment - 2.5% | |||||||
Cal Dive International, Inc.* | 55,800 | 1,084,752 | |||||
Grant Prideco, Inc.* | 106,200 | 1,082,178 | |||||
Key Energy Services, Inc.* | 115,500 | 1,114,575 | |||||
3,281,505 | |||||||
Oil & Gas - Exploration & Production - 1.2% | |||||||
Pioneer Natural Resources Co.* | 61,800 | 1,573,428 | |||||
Restaurants - 3.4% | |||||||
Krispy Kreme Doughnuts, Inc.* | 40,800 | 1,570,800 | |||||
Panera Bread Co.* | 70,500 | 2,887,680 | |||||
| 4,458,480 | ||||||
Retail - Computers & Electronics - 2.2% | |||||||
Best Buy Co., Inc.* | 60,625 | 2,880,900 | |||||
Retail - Discounters - 3.1% | |||||||
Family Dollar Stores, Inc. | 22,100 | 881,569 | |||||
Fred's Inc. |
| 19,650 | 647,664 | ||||
Ross Stores, Inc. | 55,800 | 2,586,888 | |||||
4,116,121 | |||||||
Retail - Drug Stores - 0.9% | |||||||
CVS Corp. |
| 36,900 | 1,146,114 | ||||
Retail - Specialty - 8.8% | |||||||
Advance Auto Parts* | 43,900 | 3,112,510 | |||||
Petsmart, Inc.* | 147,000 | 3,336,900 | |||||
Staples, Inc.* |
| 169,200 | 4,018,500 | ||||
Williams-Sonoma, Inc.* | 40,600 | 1,095,388 | |||||
11,563,298 | |||||||
Services - Commercial & Consumer - 4.2% | |||||||
Career Education Corp.* |
| 46,600 | 2,110,980 | ||||
D&B Corp.* | 20,300 | 843,262 | |||||
ITT Educational Services, Inc.* | 53,900 | 2,582,888 | |||||
5,537,130 | |||||||
Services - Computer Systems - 0.5% | |||||||
SunGard Data Systems, Inc.* | 27,700 | 728,787 | |||||
Services - Employment - 1.5% | |||||||
Manpower, Inc. | 55,400 | $2,055,340 | |||||
Telecommunications - Cell / Wireless - 1.6% | |||||||
Nextel Partners, Inc.* | 270,200 | 2,121,070 | |||||
Truckers - 0.6% | |||||||
Swift Transportation Co., Inc.* | 33,300 | 755,577 | |||||
Total Equity Securities (Cost $116,275,619) | 128,620,836 | ||||||
Principal | |||||||
Amount | |||||||
High Social Impact Investments - 0.5% |
| ||||||
Calvert Social Investment Foundation Notes, | |||||||
1.74%, 7/01/05(b)(r) | $700,000 | 683,158 | |||||
Total High Social Impact Investments (Cost $700,000) | 683,158 | ||||||
Total Investments (Cost $116,975,619) - 98.4% | 129,303,994 | ||||||
Other assets and liabilities, net - 1.6% | 2,152,261 | ||||||
Net Assets - 100% | $131,456,255 | ||||||
Net Assets Consist of: | |||||||
Paid-in capital applicable to the following shares of common stock, | |||||||
250,000,000 shares of $0.01 par value authorized for Class A, | |||||||
Class B, Class C and Class I combined: | |||||||
Class A: 5,291,514 shares outstanding | $127,718,365 | ||||||
Class B: 808,800 shares outstanding | 20,750,854 | ||||||
Class C: 600,341 shares outstanding | 13,788,371 | ||||||
Class I: 26,610 shares outstanding | 499,130 | ||||||
Accumulated net realized gain (loss) on investments | (43,628,840) | ||||||
Net unrealized appreciation (depreciation) on investments | 12,328,375 | ||||||
Net Assets | $131,456,255 | ||||||
Net Asset Value Per Share | |||||||
Class A (based on net assets of $104,878,431) | $19.82 | ||||||
Class B (based on net assets of $15,152,488) | $18.73 | ||||||
Class C (based on net assets of $10,896,398) | $18.15 | ||||||
Class I (based on net assets of $528,938) | $19.88 |
* Non income producing security.
(b) This security was valued by the Board of Directors, see Note A.
(r) Restricted securities represent 0.5% of net assets of the Fund.
See notes to financial statements.
Statement of Operations
Year Ended September 30, 2003
Net Investment Income | ||||
Investment Income: | ||||
Dividend income | $341,445 | |||
Interest income | 45,410 | |||
Total investment income | 386,855 | |||
Expenses: | ||||
Investment advisory fee | 751,198 | |||
Transfer agency fees and expenses | 493,057 | |||
Distribution Plan expenses: | ||||
Class A | 324,901 | |||
Class B | 130,108 | |||
Class C | 95,566 | |||
Directors' fees and expenses | 32,241 | |||
Administrative fees | 288,663 | |||
Custodian fees | 40,997 | |||
Registration fees | 37,083 | |||
Reports to shareholders | 83,538 | |||
Professional fees | 20,447 | |||
Miscellaneous | 12,715 | |||
Total expenses | 2,310,514 | |||
Reimbursement from Advisor: | ||||
Class I | (631) | |||
Fees paid indirectly | (9,329) | |||
Net expenses | 2,300,554 | |||
Net Investment Income (Loss) | (1,913,699) | |||
Realized and Unrealized Gain (Loss) on Investments | ||||
Net realized gain (loss) | 4,241,397 | |||
Change in unrealized appreciation or (depreciation) | 23,536,398 | |||
Net Realized and Unrealized Gain | ||||
(Loss) on Investments | 27,777,795 | |||
Increase (Decrease) in Net Assets | ||||
Resulting From Operations | $25,864,096 |
See notes to financial statements.
Statements of Changes in Net Assets
Year Ended | Year Ended | ||||||
September 30, | September 30, | ||||||
Increase (Decrease) in Net Assets | 2003 | 2002 | |||||
Operations: | |||||||
Net investment income (loss) | ($1,913,699) | ($2,271,256) | |||||
Net realized gain (loss) | 4,241,397 | (43,348,702) | |||||
Change in unrealized appreciation | |||||||
or (depreciation) | 23,536,398 | 21,294,849 | |||||
Increase (Decrease) in Net Assets | |||||||
Resulting From Operations | 25,864,096 | (24,325,109) | |||||
Distributions to shareholders from | |||||||
Net realized gain: | |||||||
Class A Shares | -- | (70,947) | |||||
Class B Shares | -- | (8,769) | |||||
Class C Shares | -- | (6,372) | |||||
Total distributions | -- | (86,088) | |||||
Capital share transactions: | |||||||
Shares sold: | |||||||
Class A Shares | 17,429,331 | 23,617,629 | |||||
Class B Shares | 2,445,312 | 3,095,842 | |||||
Class C Shares | 2,114,311 | 3,171,970 | |||||
Class I Shares | 500,000 | -- | |||||
Reinvestment of distributions: | |||||||
Class A Shares | -- | 65,396 | |||||
Class B Shares | -- | 8,769 | |||||
Class C Shares | -- | 6,372 | |||||
Class I Shares | -- | -- | |||||
Shares redeemed: | |||||||
Class A Shares | (17,171,529) | (25,862,010) | |||||
Class B Shares | (1,607,899) | (2,568,607) | |||||
Class C Shares | (1,659,390) | (2,403,991) | |||||
Class I Shares | -- | (847) | |||||
Total capital share transactions | 2,050,136 | (869,477) | |||||
Total Increase (Decrease) in Net Assets | 27,914,232 | (25,280,674) | |||||
Net Assets | |||||||
Beginning of year | 103,542,023 | 128,822,697 | |||||
End of year | $131,456,255 | $103,542,023 |
See notes to financial statements.
Statements of Changes in Net Assets
Year Ended | Year Ended | ||||||
September 30, | September 30, | ||||||
Capital Share Activity | 2003 | 2002 | |||||
Shares sold: | |||||||
Class A Shares | 980,553 | 1,106,797 | |||||
Class B Shares | 140,348 | 152,395 | |||||
Class C Shares | 129,048 | 158,163 | |||||
Class I Shares | 26,610 | -- | |||||
Reinvestment of distributions: | |||||||
Class A Shares | -- | 2,677 | |||||
Class B Shares | -- | 372 | |||||
Class C Shares | -- | 279 | |||||
Class I Shares | -- | -- | |||||
Shares redeemed: | |||||||
Class A Shares | (985,682) | (1,247,145) | |||||
Class B Shares | (96,889) | (133,957) | |||||
Class C Shares | (102,236) | (126,293) | |||||
Class I Shares | -- | (34) | |||||
Total capital share activity | 91,752 | (86,746) |
See notes to financial statements.
Notes to Financial Statements
Note A -- Significant Accounting Policies
General: The Calvert Capital Accumulation Fund (the "Fund"), a series of Calvert World Values Fund, Inc., is registered under the Investment Company Act of 1940 as a non-diversified, open-end management investment company. The operation of each series is accounted for separately. The Fund offers four classes of shares of capital stock. Class A shares are sold with a maximum front-end sales charge of 4.75%. Class B shares are sold without a front-end sales charge. With certain exceptions, the Fund will impose a deferred sales charge at the time of redemption, depending on how long investors have owned the shares. Class C shares are sold without a front-end sales charge. With certain exceptions, the Fund will impose a deferred sales charge on shares sold within one year of purchase. Class B and Class C shares have higher levels of expenses than Class A shares. Class I shares require a minimum account balance of $1,000,000. The $1 million minimum initial investment may be waived for certain institutional accounts, where it is believed to be in the best interest of the Fund and its shareholders. Class I shares have no front-end or deferred sales charge. Each class has different: (a) dividend rates, due to differences in Distribution Plan expenses and other class-specific expenses, (b) exchange privileges; and (c) class-specific voting rights.
Security Valuation: Net asset value per share is determined every business day as of the close of the regular session of the New York Stock Exchange (generally 4:00 p.m. Eastern time), and at such other times as may be necessary or appropriate. Securities for which market quotations are available are valued at last sale price or official closing price on the primary market or exchange in which they trade. Unlisted securities and listed securities for which the last sale price is unavailable are valued at the most recent bid price or based on a yield equivalent obtained from the securities' market maker. Short-term notes are stated at amortized cost, which approximates fair value. Other securities 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. Further, 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 for the investments existed, and the differences could be material.
At September 30, 2003, $683,158, or 0.5% of net assets, were valued in good faith by the Board of Directors.
Repurchase Agreements: The Fund may enter into repurchase agreements with recognized financial institutions or registered broker/dealers and, in all instances, holds underlying securities with a value exceeding the total repurchase price, including accrued interest. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its value and a possible loss of income or value if the counterparty fails to perform in accordance with the terms of the agreement.
Restricted Securities: The Fund may invest in securities that are subject to legal or contractual restrictions on resale. Generally, these securities may only be sold publicly upon registration under the Securities Act of 1933 or in transactions exempt from such registration.
Security Transactions and Net Investment Income: Security transactions are accounted for on trade date. Realized gains and losses are recorded on an identified cost basis. Dividend income is recorded on the ex-dividend date. Interest income, which includes amortization of premium and accretion of discount on debt securities, is accrued as earned. Investment income and realized and unrealized gains and losses are allocated to separate classes of shares based upon the relative net assets of each class. Expenses arising in connection with a class are charged directly to that class. Expenses common to the classes are allocated to each class in proportion to their relative net assets.
Distributions to Shareholders: Distributions to shareholders are recorded by the Fund on ex-dividend date. Dividends from net investment income and distributions from net realized capital gains, if any, are paid at least annually. Distributions are determined
in accordance with income tax regulations which may differ from generally accepted accounting principles; accordingly, periodic reclassifications are made within the Fund's capital accounts to reflect income and gains available for distribution under income
tax regulations.
Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Expense Offset Arrangements: The Fund has an arrangement with its custodian bank whereby the custodian's and transfer agent's fees may be 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 taxable earnings.
Note B -- Related Party Transactions
Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by Calvert Group, Ltd. ("Calvert"), which is indirectly wholly owned by Ameritas Acacia Mutual Holding Company. The Advisor provides investment advisory services and pays the salaries and fees of officers and affiliated Directors of the Fund. For its services, the Advisor receives a monthly fee based on an annual rate of .65% of the Fund's average daily net assets. Under the terms of the agreement, $131,661 was payable at year end.
The Advisor has agreed to limit net annual fund operating expenses through January 31, 2004 for Class I. The contractual expense cap is 0.86% for Class I (effective February 1, 2003). For the purposes of this expense limit, operating expenses do not include interest expense, brokerage commissions, taxes, extraordinary expenses and capital items.
Calvert Administrative Services Company, an affiliate of the Advisor, provides administrative services to the Fund for an annual fee, payable monthly of .25% for Class A, Class B and Class C, and .10% for Class I shares based on their average daily net assets. Under the terms of the agreement, $27,875 was payable at year end.
Calvert Distributors, Inc., an affiliate of the Advisor, is the distributor and principal underwriter for the Fund. Distribution Plans, adopted by Class A, Class B, and Class C shares, allow the Fund to pay the Distributor for expenses and services associated with distribution of shares. The expenses paid may not exceed .35%, 1.00% and 1.00% annually of average daily net assets of Class A, Class B, and Class C, respectively. Class I shares do not have Distribution Plan expenses. Under the terms of the agreement, $53,325 was payable at year end.
The Distributor received $51,432 as its portion of the commissions charged on sales of the Fund's Class A shares for the year ended September 30, 2003.
Calvert Shareholder Services, Inc. ("CSSI"), an affiliate of the Advisor, acts as shareholder servicing agent for the Fund. For its services, CSSI received a fee of $144,960 for the year ended September 30, 2003. Under the terms of the agreement, $12,492 was payable at year end. Boston Financial Data Services, Inc. is the transfer and dividend disbursing agent.
The Fund may invest in Community Investment Notes issued by the Calvert Social Investment Foundation (the "CSI Foundation"). The CSI Foundation is a 501(c)(3) non-profit organization that receives in-kind support from the Calvert Group, Ltd. and its subsidiaries. The Fund has received from the Securities and Exchange Commission an exemptive order permitting the Fund to make investments in these notes under certain conditions.
Each Director of the Fund who is not an employee of the Advisor or its affiliates receives an annual retainer of $9,500 plus $500 for each Board meeting attended. An additional retainer of $5,000 annually is paid to the Lead Independent Director. Directors' fees are allocated to each of the funds served.
Note C -- Investment Activity
During the year, purchases and sales of investments, other than short-term securities, were $198,392,818 and $193,415,433, respectively.
The cost of investments owned at September 30, 2003 for federal income tax purposes was $117,889,017. Net unrealized appreciation aggregated $11,414,977, of which $15,218,287 related to appreciated securities and $3,803,310 related to depreciated securities.
Net realized capital loss carryforwards for federal income tax purposes of $5,783,361 and $34,511,051 at September 30, 2003 may be utilized to offset future capital gains until expiration in September 2010 and September 2011, respectively.
The Fund intends to elect to defer $2,421,030 of post-October losses to fiscal year ending September 30, 2004. Such losses if unutilized will expire in 2012.
The tax character of dividends and distributions paid during the years ended September 30, 2003, and September 30, 2002 were as follows:
Distributions paid from: | 2003 | 2002 | |||||||
Long-term capital gain | -- | $86,088 | |||||||
Total | -- | $86,088 |
As of September 30, 2003, the components of distributable earnings/(accumulated losses) on a tax basis were as follows:
Capital loss carryforward | ($40,294,412) | |||
Unrealized appreciation (depreciation) | 11,414,977 | |||
($28,879,435) |
Reclassifications have been made to the Fund's components of net assets to reflect income and gains available for distribution (or available capital loss carryovers, as applicable) under income tax law and regulations. The primary permanent differences causing such reclassifications are due to the disallowance of net operating losses.
The differences between the components of distributable earnings on a tax basis and the amounts reflected in the statement of net assets are primarily due to wash sales and post-October losses.
The Fund may sell or purchase securities to and from other Funds managed by the Advisor, typically short-term variable rate demand notes. Interportfolio transactions are primarily used for cash management purposes. Interportfolio transactions are made pursuant to Rule 17a-7 of the Investment Company Act of 1940. For the year ended September 30, 2003, such purchase and sale transactions were $15,300,000 and $13,299,000, respectively.
Note D -- Line of Credit
A financing agreement is in place with all Calvert Group Funds (except for the Calvert Social Investment Fund's Balanced and Enhanced Equity Portfolios, the CVS Calvert Social Balanced Portfolio and the CVS Ameritas Index 500 Portfolio) 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. The Fund had no loans outstanding pursuant to this line of credit at September 30, 2003. For the year ended September 30, 2003, borrowings by the Fund under the Agreement were as follows:
Weighted | Month of | ||||||||||||
Average | Average | Maximum | Maximum | ||||||||||
Daily | Interest | Amount | Amount | ||||||||||
Balance | Rate | Borrowed | Borrowed | ||||||||||
$40,739 | 1.61% | $1,673,816 | July 2003 |
Financial Highlights
Years Ended | |||||||
September 30, | September 30, | ||||||
Class A Shares | 2003 | 2002 | |||||
Net asset value, beginning | $15.79 | $19.35 | |||||
Income from investment operations | |||||||
Net investment income (loss) | (.26) | (.29) | |||||
Net realized and unrealized gain (loss) | 4.29 | (3.26) | |||||
Total from investment operations | 4.03 | (3.55) | |||||
Distributions from | |||||||
Net realized gain | -- | (.01) | |||||
Total distributions | -- | (.01) | |||||
Total increase (decrease) in net asset value | 4.03 | (3.56) | |||||
Net asset value, ending | $19.82 | $15.79 | |||||
Total return* | 25.52% | (18.36%) | |||||
Ratios to average net assets: | |||||||
Net investment income (loss) | (1.48%) | (1.47%) | |||||
Total expenses | 1.82% | 1.74% | |||||
Expenses before offsets | 1.82% | 1.74% | |||||
Net expenses | 1.81% | 1.73% | |||||
Portfolio turnover | 170% | 93% | |||||
Net assets, ending (in thousands) | $104,878 | $83,643 |
Years Ended | ||||||||||
September 30, | September 30, | September 30, | ||||||||
Class A Shares | 2001 | 2000 | 1999 | |||||||
Net asset value, beginning | $36.34 | $25.88 | $25.43 | |||||||
Income from investment operations | ||||||||||
Net investment income (loss) | (.14) | (.32) | (.32) | |||||||
Net realized and unrealized gain | (11.61) | 11.29 | 4.25 | |||||||
Total from investment operations | (11.75) | 10.97 | 3.93 | |||||||
Distributions from | ||||||||||
Net realized gain | (5.24) | (0.51) | (3.48) | |||||||
Total distributions | (5.24) | (0.51) | (3.48) | |||||||
Total increase (decrease) in net asset value | (16.99) | 10.46 | .45 | |||||||
Net asset value, ending | $19.35 | $36.34 | $25.88 | |||||||
Total return* | (36.60%) | 42.91% | 14.91 | |||||||
Ratios to average net assets: | ||||||||||
Net investment income (loss) | (1.18%) | (1.12%) | (1.26%) | |||||||
Total expenses | 1.69% | 1.67% | 1.73% | |||||||
Expenses before offsets | 1.69% | 1.67% | 1.73% | |||||||
Net expenses | 1.64% | 1.54% | 1.58% | |||||||
Portfolio turnover | 71% | 116% | 88% | |||||||
Net assets, ending (in thousands) | $105,151 | $141,639 | $102,508 |
Years Ended | |||||||
September 30, | September 30, | ||||||
Class B Shares | 2003 | 2002 | |||||
Net asset value, beginning | $15.07 | $18.64 | |||||
Income from investment operations | |||||||
Net investment income (loss) | (.39) | (.44) | |||||
Net realized and unrealized gain (loss) | 4.05 | (3.12) | |||||
Total from investment operations | 3.66 | (3.56) | |||||
Distributions from | |||||||
Net realized gain | -- | (.01) | |||||
Total distributions | -- | (.01) | |||||
Total increase (decrease) in net asset value | 3.66 | (3.57) | |||||
Net asset value, ending | $18.73 | $15.07 | |||||
Total return* | 24.29% | (19.11%) | |||||
Ratios to average net assets: | |||||||
Net investment income (loss) | (2.45%) | (2.38%) | |||||
Total expenses | 2.79% | 2.65% | |||||
Expenses before offsets | 2.79% | 2.65% | |||||
Net expenses | 2.78% | 2.64% | |||||
Portfolio turnover | 170% | 93% | |||||
Net assets, ending (in thousands) | $15,152 | $11,534 |
Years Ended | ||||||||||
September 30, | September 30, | September 30, | ||||||||
Class B Shares | 2001 | 2000 | 1999 | |||||||
Net asset value, beginning | $35.47 | $25.46 | $25.28 | |||||||
Income from investment operations | ||||||||||
Net investment income (loss) | (.24) | (.52) | (.41) | |||||||
Net realized and unrealized gain (loss) | (11.35) | 11.04 | 4.07 | |||||||
Total from investment operations | (11.59) | 10.52 | 3.66 | |||||||
Distributions from | ||||||||||
Net realized gain | (5.24) | (.51) | (3.48) | |||||||
Total distributions | (5.24) | (.51) | (3.48) | |||||||
Total increase (decrease) in net asset value | (16.83) | 10.01 | .18 | |||||||
Net asset value, ending | $18.64 | $35.47 | $25.46 | |||||||
Total return* | (37.12%) | 41.84% | 13.85% | |||||||
Ratios to average net assets: | ||||||||||
Net investment income (loss) | (2.04%) | (1.88%) | (2.11%) | |||||||
Total expenses | 2.56% | 2.49% | 2.67% | |||||||
Expenses before offsets | 2.56% | 2.49% | 2.67% | |||||||
Net expenses | 2.50% | 2.30% | 2.42% | |||||||
Portfolio turnover | 71% | 116% | 88% | |||||||
Net assets, ending (in thousands) | $13,914 | $16,435 | $9,445 |
Years Ended | ||||||
September 30 | September 30, | |||||
Class C Shares | 2003 | 2002 | ||||
Net asset value, beginning | $14.59 | $18.02 | ||||
Income from investment operations | ||||||
Net investment income (loss) | (.37) | (.42) | ||||
Net realized and unrealized gain (loss) | 3.93 | (3.00) | ||||
Total from investment operations | 3.56 | (3.42) | ||||
Distributions from | ||||||
Net realized gain | -- | (.01) | ||||
Total distributions | -- | (.01) | ||||
Total increase (decrease) in net asset value | 3.56 | (3.43) | ||||
Net asset value, ending | $18.15 | $14.59 | ||||
Total return* | 24.40% | (18.99%) | ||||
Ratios to average net assets: | ||||||
Net investment income (loss) | (2.35%) | (2.32%) | ||||
Total expenses | 2.69% | 2.59% | ||||
Expenses before offsets | 2.69% | 2.59% | ||||
Net expenses | 2.68% | 2.58% | ||||
Portfolio turnover | 170% | 93% | ||||
Net assets, ending (in thousands) | $10,896 | $8,365 |
Years Ended | ||||||||||
September 30, | September 30, | September 30, | ||||||||
Class C Shares | 2001 | 2000 | 1999 | |||||||
Net asset value, beginning | $34.48 | $24.76 | $24.63 | |||||||
Income from investment operations | ||||||||||
Net investment income (loss) | (.22) | (.50) | (.51) | |||||||
Net realized and unrealized gain | (11.00) | 10.73 | 4.12 | |||||||
Total from investment operations | (11.22) | 10.23 | 3.61 | |||||||
Distributions from | ||||||||||
Net realized gain | (5.24) | (.51) | (3.48) | |||||||
Total distributions | (5.24) | (.51) | (3.48) | |||||||
Total increase (decrease) in net asset value | (16.46) | 9.72 | .13 | |||||||
Net asset value, ending | $18.02 | $34.48 | $24.76 | |||||||
Total return* | (37.11%) | 41.91% | 14.02% | |||||||
Ratios to average net assets: | ||||||||||
Net investment income (loss) | (1.98%) | (1.87%) | (2.04%) | |||||||
Total expenses | 2.49% | 2.47% | 2.56% | |||||||
Expenses before offsets | 2.49% | 2.47% | 2.56% | |||||||
Net expenses | 2.44% | 2.29% | 2.35% | |||||||
Portfolio turnover | 71% | 116% | 88% | |||||||
Net assets, ending (in thousands) | $9,757 | $13,769 | $9,021 |
Periods Ended | ||||||||||
September 30, | January 18, | September 30, | ||||||||
Class I Shares | 2003### | 2002## | 2001 | |||||||
Net asset value, beginning | $18.79 | $20.84 | $36.84 | |||||||
Income from investment operations | ||||||||||
Net investment income (loss) | (.03) | (.05) | (.23) | |||||||
Net realized and unrealized gain (loss) | 1.12 | 4.20 | (10.53) | |||||||
Total from investment operations | 1.09 | 4.15 | (10.76) | |||||||
Distributions from | ||||||||||
Net realized gain | -- | (.01) | (5.24) | |||||||
Total distributions | -- | (.01) | (5.24) | |||||||
Total increase (decrease) in net asset value | 1.09 | 4.14 | (16.00) | |||||||
Net asset value, ending | $19.88 | $24.98 | $20.84 | |||||||
Total return* | 5.80% | 19.92% | (34.61%) | |||||||
Ratios to average net assets: | ||||||||||
Net investment income (loss) | (0.50%) (a) | (0.64%) (a) | (0.67%) | |||||||
Total expenses | 1.23% (a) | 1,316.21%(a) | 33.47% | |||||||
Expenses before offsets | .87% (a) | .80% (a) | 2.19% | |||||||
Net expenses | .86% (a) | .80% (a) | .80% | |||||||
Portfolio turnover | 66% | 9% | 71% | |||||||
Net assets, ending (in thousands) | $529 | $0 | $1 |
Periods Ended | ||||||
September 30, | September 30, | |||||
Class I Shares | 2000 | 1999# | ||||
Net asset value, beginning | $25.99 | $26.18 | ||||
Income from investment operations | ||||||
Net investment income (loss) | (.12) | (.08) | ||||
Net realized and unrealized gain (loss) | 11.48 | (.11) | ||||
Total from investment operations | 11.36 | (.19) | ||||
Distributions from | ||||||
Net realized gain | (.51) | -- | ||||
Total distributions | (.51) | -- | ||||
Total increase (decrease) in net asset value | 10.85 | (.19) | ||||
Net asset value, ending | $36.84 | $25.99 | ||||
Total return* | 44.25% | (.73%) | ||||
Ratios to average net assets: | ||||||
Net investment income (loss) | (0.39%) | (.50%) (a) | ||||
Total expenses | 1.20% | 1.24% (a) | ||||
Expenses before offsets | .86% | .85% (a) | ||||
Net expenses | .80% | .80% (a) | ||||
Portfolio turnover | 116% | 88% | ||||
Net assets, ending (in thousands) | $108 | $2,547 |
(a) Annualized
* Total return is not annualized for periods less than one year and does not reflect deduction of any front-end or deferred sales charge.
# From March 1, 1999 inception.
## The last remaining shareholder in Class I redeemed on January 18, 2002.
### Class I shares resumed upon shareholder investment on June 3, 2003.
See notes to financial statements.
Explanation of Financial Tables
Schedule of Investments
The Schedule of Investments is a snapshot of all securities held in the fund at their market value, on the last day of the reporting period. Securities are listed by asset type (e.g., common stock, corporate bonds, U.S. government obligations) and may be further broken down into sub-groups and by industry classification.
Statement of Assets and Liabilities
The Statement of Assets and Liabilities is often referred to as the fund's balance sheet. It lists the value of what the fund owns, is due and owes on the last day of the reporting period. The fund's assets include the market value of securities owned, cash, receivables for securities sold and shareholder subscriptions, and receivables for dividends and interest payments that have been earned, but not yet received. The fund's liabilities include payables for securities purchased and shareholder redemptions, and expenses owed but not yet paid. The statement also reports the fund's net asset value (NAV) per share on the last day of the reporting period. The NAV is calculated by dividing the fund's net assets (assets minus liabilities) by the number of shares outstanding. This statement is accompanied by a Schedule of Investments. Alternatively, if certain conditions are met, a Statement of Net Assets may be presented in lieu of this statement and the Schedule of Investments.
Statement of Net Assets
The Statement of Net Assets provides a detailed list of the fund's holdings, including each security's market value on the last day of the reporting period. The Statement of Net Assets includes a Schedule of Investments. Other assets are added and other liabilities subtracted from the investments total to calculate the fund's net assets. Finally, net assets are divided by the outstanding shares of the fund to arrive at its share price, or Net Asset Value (NAV) per share.
At the end of the Statement of Net Assets is a table displaying the composition of the fund's net assets. Paid in Capital is the money invested by shareholders and represents the bulk of net assets. Undistributed Net Investment Income and Accumulated Net Realized Gains usually approximate the amounts the fund had available to distribute to shareholders as of the statement date. Accumulated Realized Losses will appear as negative balances. Unrealized Appreciation (Depreciation) is the difference between the market value of the fund's investments and their cost, and reflects the gains (losses) that would be realized if the fund were to sell all of its investments at their statement-date values.
Statement of Operations
The Statement of Operations summarizes the fund's investment income earned and expenses incurred in operating the fund. Investment income includes dividends earned from stocks and interest earned from interest-bearing securities in the fund. Expenses incurred in operating the fund include the advisory fee paid to the investment advisor, administrative services fee, distribution plan expenses (if applicable), transfer agent fees, shareholder servicing expenses, custodial, legal, and audit fees, and the printing and postage expenses related to shareholder reports. Expense offsets (fees paid indirectly) are also shown. Credits earned from offset arrangements are used to reduce the fund's expenses. This statement also shows net gains (losses) realized on the sale of investments and the increase or decrease in the unrealized appreciation (depreciation) on investments held during the period.
Statement of Changes in Net Assets
The Statement of Changes in Net Assets shows how the fund's total net assets changed during the two most recent reporting periods. Changes in the fund's net assets are attributable to investment operations, distributions and capital share transactions.
The Operations section of the report summarizes information detailed in the Statement of Operations. The Distribution section shows the dividend and capital gain distributions made to shareholders. The amounts shown as distributions in this section may not match the net investment income and realized gains amounts shown in the Operations section because distributions are determined on a tax basis and certain investments or transactions may be treated differently for financial statement and tax purposes. The Capital Share Transactions section shows the amount shareholders invested in the fund, either by purchasing shares or by reinvesting distributions, and the amounts redeemed. The corresponding numbers of shares issued, reinvested and redeemed are shown at the end of the report.
Financial Highlights
The Financial Highlights table provides a per-share breakdown per class of the components that affect the fund's net asset value for current and past reporting periods. The table provides total return, total distributions, expense ratios, portfolio turnover and net assets for the applicable period. Total return is a measure of a fund's performance that encompasses all elements of return: dividends, capital gain distributions and changes in net asset value. Total return is the change in value of an investment over a given period, assuming reinvestment of any dividends and capital gain distributions, expressed as a percentage of the initial investment. Total distributions include distributions from net investment income and net realized gains. Long-term gains are earned on securities held in the fund more than one year. Short-term gains, on the sale of securities held less than one year, are treated as ordinary dividend income for tax purposes. The expense ratio is a fund's cost of doing business, expressed as a percentage of net assets. These expenses directly reduce returns to shareholders. Portfolio turnover measures the trading activity in a fund's investment portfolio -- how often securities are bought and sold by a fund. Portfolio turnover is affected by market conditions, changes in the size of the fund, the nature of the fund's investments and the investment style of the portfolio manager.
Director and officer Information Table
# of Calvert | |||||||||
Position | Position | Portfolios | Other | ||||||
Name & | with | Start | Principal Occupation | Overseen | Directorships | ||||
Date of Birth | Fund | Date | During Last 5 Years | (Not Applicable to Officers) | |||||
JOHN GUFFEY, JR. DOB: 05/15/48 | Director | 1992 | Treasurer and Director of Silby, Guffey and Co., Inc. a venture capital firm. | 20 | Ariel Funds Calvert Foundation Calvert Ventures, LLC | ||||
TERRENCE J. MOLLNER, Ed.D. DOB: 12/13/44 | Director
| 1992 | Founder, Chairperson, and President of Trusteeship Institute, Inc., a diverse foundation known principally for its consultation to corporations converting to cooperative employee-ownership and the development of socially and spiritually responsible investment vehicles. | 8 | Hampshire County United Way Cyberlore Studies, Inc. Calvert Foundation Ben & Jerry's Homemade, Inc. | ||||
RUSTUM ROYDOB: 07/03/24 | Director | 1992 | Evan Pugh Professor of the Solid State and of Geo-chemistry Emeritus, at Pennsylvania State University, and Corporation Chair, National Association of Science, Technology, and Society. | 2 | Chairperson, Friends of Health | ||||
TESSA TENNANT DOB: 05/29/59 | Director | 1992 | Chair of AsriA Ltd., a not-for-profit membership organization for Socially Responsible Investing (SRI), serving the Asia Pacific region. Previously, Ms. Tennant served as Head of SRI Policy for Henderson Investors, U.K. and Head of green and ethical investing for National Provident Investment Managers Ltd. Initially, Ms. Tennant headed the Environmental Research Unit of Jupiter Tyndall Merlin Ltd., and served as Director of Jupiter Tyndall Merlin investment managers. | 2 | Solar Century Company, Ltd. | ||||
BARBARA J. KRUMSIEK DOB: 08/09/52 (interested Director) | Director & President | 1997 | President, Chief Executive Officer and Vice Chairman of Calvert Group, Ltd. Prior to joining Calvert in 1997, Ms. Krumsiek had served as a Managing Director of Alliance Fund Distributors, Inc. | 37 | Calvert Foundation | ||||
D. Wayne Silby, Esq. DOB: 07/20/48(interested Director) | Director | 1992 | Mr. Silby is Chairman of GroupServe Foundation, a software company focused on collaborative tools for non-profit groups. He is an officer and director of Silby, Guffey and Co., Inc., a private investment company. | 21 | Ameritas Acacia Mutual Life Insurance Company Calvert Foundation Grameen Foundation USA | ||||
SUSAN walker Bender, Esq. DOB: 01/29/59 | Officer
| 1992 | Assistant Vice President and Associate General Counsel of Calvert Group, Ltd. | ||||||
IVY WAFFORD DUKE, Esq. DOB: 09/07/68 | Officer
| 1996 | Assistant Vice President and Associate General Counsel of Calvert Group, Ltd. | ||||||
Daniel K. Hayes DOB: 09/09/50 | Officer
| 1996 | Senior Vice President of Calvert Asset Management Company, Inc. | ||||||
HUI PING HO, CPA DOB: 01/06/65 | Officer
| 2000 | Tax Compliance Manager of Calvert Group, Ltd. and Assistant Fund Treasurer. | ||||||
Gregory J. Keifer DOB: 08/22/64 | Officer | 2003 | Compliance Officer and Assistant Secretary of the Funds. Prior to working at Calvert Group, Mr. Keifer was Assistant Director of Compliance with Legg Mason Wood Walker, Incorporated and a senior compliance analyst with BISYS Fund Services. | ||||||
LANCELOT A. KING, Esq. DOB: 07/19/70 | Officer | 2002 | Assistant Secretary and Assistant General Counsel of Calvert Group, Ltd. Prior to working at Calvert Group, Mr. King was an associate with Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, and also with Kirkpatrick & Lockhart. | ||||||
William M. Tartikoff, Esq. DOB: 08/12/47 | Officer
| 1992 | Senior Vice President, Secretary, and General Counsel of Calvert Group, Ltd. | ||||||
Ronald M. Wolfsheimer, CPA DOB: 07/24/52 | Officer
| 1992 | Senior Vice President and Chief Financial Officer of Calvert Group, Ltd. and Fund Treasurer. | ||||||
MICHAEL V. YUHAS JR., CPA DOB: 08/04/61 | Officer
| 1999 | Director of Fund Administration of Calvert Group, Ltd. and Fund Controller. |
The address of Directors and Officers is 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814, except Mr. Silby's address is 1715 18th Street, N.W., Washington, DC 20009. Ms. Krumsiek is an interested person of the Fund since she is an officer and director of the Fund's advisor and its affiliates. Mr. Silby is an interested person of the Fund since he is a director of the parent company of the Fund's advisor.
Additional information about the Fund's Directors can be found in the Statement of Additional Information (SAI). You can get a free copy of the SAI by contacting your broker, or the Fund at 1-800-368-2745.
SUPPLEMENT TO
CLASS I (INSTITUTIONAL) SHARES PROSPECTUS
Calvert Social Investment Fund Portfolios
Calvert Social Index Fund
Calvert Large Cap Growth Fund
Calvert Capital Accumulation Fund
Calvert World Values International Equity Fund
Calvert New Vision Small Cap Fund
Calvert Income Fund
Calvert Short Duration Income Fund
Prospectus dated: January 31, 2003
Date of Supplement: June 9, 2003
The $1 million minimum initial investment may be waived for certain institutional accounts, where it is believed to be in the best interest of the Fund and its shareholders.
Please note this change in the prospectus.
SUPPLEMENT TO
PROSPECTUS
Calvert Social Investment Fund (CSIF) Balanced Portfolio
CSIF Equity Portfolio
CSIF Enhanced Equity Portfolio
CSIF Bond Portfolio
CSIF Money Market Portfolio
Calvert Social Index Fund
Calvert Large Cap Growth Fund
Calvert Capital Accumulation Fund
Calvert World Values International Equity Fund
Calvert New Vision Small Cap Fund
Date of Prospectus: January 31, 2003 as revised June 30, 2003
Class I (Institutional) Shares
(All Portfolios)
Date of Prospectus: January 31, 2003
Calvert Income Fund
Calvert Short Duration Income Fund
Date of Prospectus: January 31, 2003 as revised September 15, 2003
CALVERT VARIABLE SERIES, INC.
PROSPECTUS
Calvert Social Balanced Portfolio
Calvert Income Portfolio
Date of Prospectus: April 30, 2003
Date of This Supplement: October 30, 2003
Please replace the second paragraph under "About Calvert" with the following: (for Calvert Variable Series Social Balanced and Income Portfolios replace the third paragraph under "The Fund and Its Management" with the following:)
Steven Falci serves as Calvert's Chief Investment Officer, Equities and oversees the investment strategy and management of all Calvert equity and balanced portfolios. Calvert uses a team approach to its management of the fixed-income portfolios. Gregory Habeeb heads this team for Calvert's taxable fixed-income portfolios. Mr. Habeeb has over 20 years of experience as an analyst, trader, and portfolio manager. Matt Nottingham is also a member of the fixed-income management team. Mr. Nottingham has 7 1/2 years of experience as an analyst, trader, and portfolio manager.
Calvert Capital Accumulation Fund
To Open an Account
800-368-2748
Yields and Prices
Calvert Information Network
(24 hours, 7 days a week)
800-368-2745
Service for Existing Account
Shareholders: 800-368-2745
Brokers: 800-368-2746
TDD for Hearing Impaired
800-541-1524
Branch Office
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814
Registered, Certified
or Overnight Mail
Calvert Group
c/o BFDS
330 West 9th Street
Kansas City, MO 64105
Web Site
http://www.calvert.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 investors unless preceded or accompanied by a prospectus.
Calvert's Family of Funds
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printed on recycled paper using soy-based inks
<PAGE>
Calvert
Investments that make a difference (registered trademark)
E-Delivery Sign-up -- details inside
September 30, 2003
Annual Report
Calvert World Values
International Equity Fund
Table of Contents
President's Letter
1
Social Update
3
Portfolio Management Discussion
4
Independent Auditors' Report
8
Schedule of Investments
9
Statement of Assets and Liabilities
18
Statement of Operations
19
Statements of Changes in Net Assets
20
Notes to Financial Statements
22
Financial Highlights
28
Explanation of Financial Tables
32
Director and Officer Information Table
34
Dear Shareholders:
The markets have improved dramatically over the past year, with stocks showing substantial gains and bonds continuing to profit from an historically low interest-rate environment.
We believe that this year's broad-based market turnaround illustrates once again the value of diversification, asset allocation and long-term investing.�� Many investors who pursued an appropriate asset allocation, with investments in stocks, bonds and cash, were able to benefit from the rally in securities prices. Those who paid too much attention to short-term past performance and substantially reduced their stock holdings early in the year may well have missed the sharp rallies in the second quarter. At Calvert, we encourage all our shareholders to review their portfolios with their financial advisors to ensure that their investments remain in line with their specific risk tolerance, return expectations and financial goals.
A cloud on the otherwise bright performance of the markets and economy was the distressing news concerning recent market timing and illegal after-hours trading on the part of certain mutual funds. We want to assure Calvert shareholders that we have a long-standing policy of not accepting trades from market timers, which is strictly enforced. And, of course, we do not accept or execute trades after the market closes, which would be in violation of securities industry regulations.
Markets like the ones that we have seen over the past several years demonstrate that understanding risk -- at the security, fund, and asset-class level -- is an integral part of successful investing. This year, we have taken a number of steps to improve our ability to monitor and manage risk, and to prepare for further growth in our investor base. We have reorganized Calvert's investment activities into two departments, Equities and Fixed Income, each headed by Chief Investment Officers who will work closely with our Social Research Department. We believe that these changes will enhance our ability to deliver top-tier investment performance to our shareholders, while keeping investment risk at appropriate levels.
Thank you for your continued business, and we look forward to serving you in the year ahead.
Sincerely,
/s/Barbara J. Krumsiek
President and CEO
Calvert Asset Management Company, Inc.
November 2003
Social Update
from the Calvert Social Research Department
Shareholder Activism
Calvert shareholder activism seeks to move companies already performing in a more socially responsible manner than their industry peers to a higher level of corporate responsibility. We've secured the agreement of two major pharmaceutical companies to amend and post their ethical policies for clinical research in developing countries, where people are often not provided adequate information about the risks of clinical research or are promised but not given health care in exchange for their participation in trials for new drugs.
In addition, our shareholder resolution effectiveness for our various Calvert Funds has increased as we've become more effective in positioning our point of view in the context of shareholders' financial interests. For example, we received 12% support on a resolution seeking inclusive diversity policies at Alltel Corporation and a remarkable 63% on a resolution for staggered board tenures at Gillette.
Corporate "dialogues" continue, including a current effort with Weyerhaeuser to establish a policy prohibiting the harvest of and trade in products from primary and old-growth forests.
Board Diversity Initiative Successes
Two companies held in Calvert Funds have agreed to adopt key language from Calvert's model board diversity charter, which reflects our belief that boards of directors should look like America, not just a small slice of it.
Social Policy Leadership Announced
Calvert has named Joe Keefe Senior Advisor for Strategic Social Policy. Mr. Keefe, who has worked for and consulted with several socially responsible mutual fund groups, will provide focused, proactive direction for our social vision.
Portfolio Management Discussion
Thomas Hancock
of Grantham, Mayo, Van Otterloo
Performance
The Calvert World Values International Equity Fund's Class A Shares returned 21.93% over the 12-month period ended September 30, 2003. This performance was 4.61% behind the MSCI EAFE benchmark, which returned 26.54%.
Investment Climate
The last 12 months started out quite positively. After hitting a trough in early October 2002, equities enjoyed two strong months led by some of the most beaten-down stocks of the post-bubble period, notably in the Technology, Media, and Telecom (TMT) and Insurance sectors. This initial rally proved fleeting, however, as rising oil prices, the buildup to hostilities in Iraq, and the SARS outbreak combined to push stock prices back down over the next three months. But in mid-March, with signs of a successful outcome to the war, stocks picked up. And the second half of the period was an especially strong six months for global equities.
The rally was fueled by an apparent increased appetite for risk on the part of investors. And unlike the late 1990s, when large-cap growth stocks led the bull market, it was primarily smaller, more cyclical, lower-valuation and lower-quality stocks that led the upturn. While all sectors gained in value, Technology stocks led the way, while defensive sectors (Consumer Staples, Health Care, and Utilities) lagged. Telecommunications stocks showed an interesting switch, as they moved from being viewed as riskier growth stocks back toward their traditional role as more conservative defensive stocks. We believe that the switch was prompted by reduction in debt levels built up in the bubble period and by a fall in price to levels more commensurate with current cash flow.
Foreign stocks outperformed the U.S. market as measured by the S&P 500, which returned 24.4%. In terms of their native currencies, foreign markets performed poorly relative to U.S. stocks. The weakness of the U.S. dollar versus major foreign currencies accounted for almost half of the U.S. dollar return of EAFE. The euro, yen, and other foreign currencies strengthened significantly against the U.S. dollar. It appears that this strengthening was driven largely by foreign investors slowing down their purchases of U.S. financial assets. These purchases are necessary to support the large current-account deficit. The euro touched lifetime highs against the dollar earlier in the period, while the yen set three-year highs in September. In September, the G7 group of countries issued a call for "flexible exchange rates," interpreted to mean rising Asian currencies.
Portfolio Statistics
September 30, 2003
Investment Performance
(total return at NAV)
6 Months | 12 Months | ||||||
ended | ended | ||||||
9/30/03 | 9/30/03 | ||||||
Class A | 24.36% | 21.93% | |||||
Class B | 23.59% | 20.34% | |||||
Class C | 23.76% | 20.72% | |||||
Class I | 24.96% | 23.12% | |||||
MSCI EAFE Index GD | 29.35% | 26.54% | |||||
Lipper International Funds Avg | 26.92% | 22.94% |
Ten Largest Stock Holdings
% of Net Assets | |
Vodafone Airtouch plc | 4.1% |
Toyota Motor Corp. | 1.6% |
National Australia Bank Ltd | 1.5% |
Boots Group plc | 1.5% |
Volkswagen AG Ordinary | 1.4% |
DaiiChi Pharm Co. | 1.4% |
Canon, Inc. | 1.4% |
ING Groep NV | 1.4% |
Scottish Power plc | 1.4% |
Next Group plc | 1.4% |
Total | 17.1% |
Asset Allocation
Stocks | 90% | |
Bonds & Notes | 2% | |
Cash & Cash Equivalents | 8% | |
100% |
Investment performance does not reflect the deduction of any front-end or deferred sales charge.
GD represents gross dividends.
Source: Lipper Analytical Services, Inc.
Portfolio Statistics
September 30, 2003
Average Annual Total Returns
(with max. load)
Class A Shares | ||||
One year | 16.12% | |||
Five year | (1.94%) | |||
Ten year | 2.47% | |||
Class B Shares | ||||
One year | 15.34% | |||
Five year | (2.45%) | |||
Since inception | (5.14%) | |||
(4/1/98) | ||||
Class C Shares | ||||
One year | 19.72% | |||
Five year | (2.00%) | |||
Since inception | 0.54% | |||
(3/1/94) | ||||
Class I Shares | ||||
One year | 23.12% | |||
Since inception | (3.36%) | |||
(3/1/99) |
Performance Comparison
Comparison of change in value of $10,000 investment. (Source:Lipper Analytical Services, Inc.)
Average annual total returns in the Portfolio Statistics above and the Performance Comparison line graph are with maximum load deducted -- they assume reinvestment of dividends and reflect the deduction of the Fund's Class A maximum front-end sales charge of 4.75%. No sales charge has been applied to the index used for comparison. The value of an investment in Class A shares is plotted in the line graph. The value of an investment in another class of shares would be different. New subadvisor assumed management of the Fund effective March 2002. The graph and table do not reflect the deduction of taxes that a shareholder would pay on the Fund's distributions or the redemption of Fund shares. Past performance is no guarantee of future results.
Fund Strategy
The Fund has had a more defensive tilt than the Index throughout the period, helping returns through the March turning point, but holding back performance subsequently. The strongest contribution to performance came from country allocation, and in particular the allocation to emerging markets, which are not represented in the benchmark, but where the Fund has held close to 10% of its assets. Allocations to Indonesia, Thailand, and Taiwan boosted returns as Asian markets have heated up with increasingly strong economic performance after fears of SARS subsided. Positions in Brazilian stocks Tele Norte Leste and Unibanco also helped as that country recovered from its crisis the previous year.
Industry sector allocation was less successful, with overweight positions in Utilities and underweights in Technology and Industrial Cyclicals hurting relative returns. We place a heavy emphasis on valuation, but also on trying to identify more profitable, less debt-ridden value stocks. In the recovery period it was the lower-profitable, highly-leveraged value stocks that performed best.
The troubled Japanese banking sector showed signs of benefiting from renewed government vigor for reform, and the Fund's strongest single stock impact came from Mitsui Trust. Other holdings that helped returns were French bank Societe Generale, Italian toll road operator Autostrade, Taiwan Semiconductor, Austrian carton-board manufacturer Mayr-Melnhof Karton, and Japanese cable manufacturer Furukawa Electric. These were generally cyclical stocks that benefited from renewed optimism about the global economy.
Portfolio Statistics
Country Allocation | ||||||
% of Equity Securities | ||||||
9/30/03 | 9/30/02 | |||||
Argentina | 0.5% | -- |
| |||
Australia | 3.7% | 3.1% | ||||
Austria | 1.3% | 1.9% | ||||
Belgium | 1.7% | 0.6% | ||||
Brazil | 1.4% | 0.8% | ||||
Canada | 2.1% | 2.0% | ||||
Chile | 0.1% | -- | ||||
Czech Republic | 0.2% | 1.0 % | ||||
Denmark | -- | 0.6% | ||||
Finland | 1.4% | 2.4% | ||||
France | 7.0% | 7.2% | ||||
Germany | 5.0% | 4.3% | ||||
Greece | 0.9% | 0.3% | ||||
Hong Kong | 0.6% | 0.4% | ||||
Hungary | 0.3% | -- | ||||
India | 1.1% | -- | ||||
Indonesia | 0.6% | 1.3% | ||||
Ireland | 2.0% | 2.3% | ||||
Israel | 0.5% | -- | ||||
Italy | 3.8% | 2.1% | ||||
Japan | 21.8% | 18.6% | ||||
Korea | 1.1% | 2.2 % | ||||
Mexico | 0.8% | 0.3% | ||||
Netherlands | 3.8% | 5.4% | ||||
Norway | 1.5% | 0.7% | ||||
Philippines | 0.2% | -- | ||||
Poland | 0.2% | -- | ||||
Russia | 0.3% | -- | ||||
Singapore | 1.3% | 0.8% | ||||
South Africa | 1.3% | 1.1% | ||||
Spain | 3.1% | 3.2% | ||||
Sweden | 0.9% | 1.9% | ||||
Switzerland | 2.9% | 2.7% | ||||
Taiwan | 0.9% | 1.2% | ||||
Thailand | 0.8% | 2.0% | ||||
Turkey | 0.2% | -- | ||||
United Kingdom | 22.9% | 26.9% | ||||
United States | 1.8% | 2.7% | ||||
100% | 100% |
Less successful holdings included the current largest position, Vodafone, which did well earlier in the period, but has underperformed after we added to the position. Utility holdings Scottish and Southern Energy and United Utilities have lagged. Consumer Staples leader Unilever had disappointing results in the spring, showing that even "defensive" stocks can struggle in a tough market. Auto stock holdings like Mazda Motor have suffered primarily from rising exchange rates and low industry profitability.
Outlook
Our positive outlook is that international stocks trade at reasonable valuations, particularly compared with the U.S. market. So the long-term prognosis is at least average. The shorter-term picture is murkier, as the remainder of the year will be driven by whether there is a truly global economic recovery. Much of the recent strong performance has been driven by relatively flimsy news, particularly in Europe, and the bounce-back from earlier overselling. For Europe and Japan to continue their strong performance, investors will require stronger evidence that fundamentals are truly improving.
November 2003
Independent Auditors' Report
To the Board of Directors of Calvert World Values Fund, Inc.
and Shareholders of Calvert World Values International Equity Fund:
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Calvert World Values International Equity Fund (the "Fund"), a series of Calvert World Values Fund, Inc., as of September 30, 2003, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. 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. The financial highlights for the years ended September 30, 2001 and 2000, were audited by other auditors who have ceased operations. Those auditors expressed an unqualified opinion on those financial statements in their report dated November 16, 2001. The financial highlights for the periods presented prior to September 30, 2000, were audited by other auditors, whose report dated November 10, 1999, expressed an unqualified opinion on those statements.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 securities owned as of September 30, 2003, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. 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 World Values International Equity Fund as of September 30, 2003, the results of its operations for the year then ended, the changes in its net assets and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
/s/KPMG LLP
Philadelphia, Pennsylvania
November 18, 2003
Schedule of Investments
September 30, 2003
Equity Securities - 89.2% | Shares | Value | |||||
Argentina - 0.4% | |||||||
Grupo Financiero Galicia SA * (ADR) Class B | 102,700 | $505,284 | |||||
Telecom Argentina SA * (ADR) Class B | 52,300 | 336,289 | |||||
| 841,573 | ||||||
Australia - 3.3% | |||||||
Australia and New Zealand Banking Group Ltd |
| 139,582 | 1,704,364 | ||||
National Australia Bank Ltd | 143,044 | 2,997,014 | |||||
Qantas Airways Ltd | 285,192 | 636,326 | |||||
Westpac Banking Corp. | 107,477 | 1,184,402 | |||||
| 6,522,106 | ||||||
Austria - 1.2% | |||||||
Mayr-Melnhof Karton AG | 25,313 | 2,358,101 | |||||
Belgium - 1.5% | |||||||
Agfa-Gevaert NV | 40,526 | 977,472 | |||||
Fortis SA/NV | 120,016 | 2,043,101 | |||||
| 3,020,573 | ||||||
Brazil - 1.3% | |||||||
Banco Itau Holding Financiera SA (ADR) | 14,900 | 539,380 | |||||
Gerdau SA (ADR) | 41,020 | 591,098 | |||||
Tele Centro Oeste Celular Participacoes SA (ADR) | 59,500 | 433,160 | |||||
Tele Norte Leste Participacoes SA (ADR) | 32,900 | 458,626 | |||||
Unibanco Uniao de Bancos Brasileiros SA (GDR) | 22,800 | 451,440 | |||||
| 2,473,704 | ||||||
Canada - 1.8% | |||||||
Nortel Networks Corp. | 520,900 | 2,140,685 | |||||
Royal Bank of Canada | 33,300 | 1,465,890 | |||||
| 3,606,575 | ||||||
Chile - 0.1% | |||||||
Cia de Telecomunicaciones de Chile SA (ADR) | 17,200 | 219,300 | |||||
Czech Republic - 0.2% | |||||||
Ceske Radiokomunikace AS (GDR) | 24,700 | 253,016 | |||||
Cesky Telecom AS (GDR) | 10,200 | 100,470 | |||||
| 353,486 | ||||||
Finland - 1.2% | |||||||
Nokia Oyj |
| 76,900 | 1,184,563 | ||||
Sampo Oyj |
| 150,200 | 1,216,340 | ||||
| 2,400,903 | ||||||
France - 6.2% | |||||||
BNP Paribas | 48,924 | $2,399,962 | |||||
Carrefour SA | 15,016 | 755,855 | |||||
France Telecom SA | 59,112 | 1,360,326 | |||||
Groupe Danone SA | 12,013 | 1,833,678 | |||||
JC Decaux SA * | 53,016 | 745,615 | |||||
L'OREAL SA | 21,682 | 1,481,725 | |||||
Sanofi - Synthelabo Groupe | 22,632 | 1,376,556 | |||||
Societe Generale Routiere | 33,700 | 2,246,086 | |||||
| 12,199,803 | ||||||
Germany - 4.5% | |||||||
Altana AG |
| 18,397 | 1,174,488 | ||||
Deutsche Telekom AG | 161,461 | 2,340,391 | |||||
SAP AG |
| 15,715 | 1,920,470 | ||||
Volkswagen AG: | |||||||
Non Voting Preferred | 17,168 | 532,910 | |||||
Ordinary | 62,506 | 2,810,586 | |||||
8,778,845 | |||||||
Greece - 0.8% | |||||||
National Bank of Greece SA | 81,126 | 1,658,021 | |||||
Hong Kong - 0.6% | |||||||
Bank of East Asia Ltd | 441,600 | 1,134,735 | |||||
Hungary - 0.2% | |||||||
OTP Bank Ltd (GDR) | 19,500 | 464,100 | |||||
India - 1.0% | |||||||
Bajaj Auto Ltd (GDR) | 21,275 | 362,101 | |||||
ICICI Bank Ltd (ADR) | 40,000 | 422,400 | |||||
Ranbaxy Laboratories Ltd (GDR) | 19,200 | 415,680 | |||||
Satyam Computer Services Ltd (ADR) | 19,300 | 248,970 | |||||
State Bank of India Ltd (GDR) | 20,200 | 508,636 | |||||
1,957,787 | |||||||
Indonesia - 0.6% | |||||||
PT Indonesian Satellite Corp. Tbk | 326,000 | 365,027 | |||||
Unilever Indonesia | 1,869,000 | 745,819 | |||||
1,110,846 | |||||||
Ireland - 1.7% | |||||||
Allied Irish Banks plc | 130,759 | 1,927,358 | |||||
Bank of Ireland | 125,266 | 1,497,549 | |||||
3,424,907 | |||||||
Israel - 0.5% | |||||||
Check Point Software Technologies Ltd * |
| 21,700 | 364,560 | ||||
Taro Pharmaceutical Industries Ltd | 2,400 | 135,264 | |||||
Teva Pharmaceutical Industries Ltd (ADR) | 7,300 | 417,195 | |||||
| 917,019 | ||||||
Italy - 3.4% | |||||||
Enel SpA | 252,646 | $1,572,006 | |||||
Parmalat Finanziaria SpA | 661,855 | 2,078,366 | |||||
Seat Pagine Gialle SpA | 744,131 | 684,978 | |||||
Telecom Italia Mobile SpA | 293,504 | 1,364,543 | |||||
Telecom Italia SpA | 385,573 | 950,205 | |||||
6,650,098 | |||||||
Japan - 19.4% | |||||||
Acom Co. Ltd | 46,272 | 2,080,714 | |||||
Canon, Inc. | 57,000 | 2,793,340 | |||||
DaiiChi Pharm Co. | 172,000 | 2,794,238 | |||||
Daiwa House Industries Co. Ltd | 141,000 | 1,289,584 | |||||
Denso Corp. | 87,000 | 1,725,710 | |||||
Fuji Photo Film Co. Ltd | 54,000 | 1,589,732 | |||||
Furukawa Electric Co. Ltd * | 573,000 | 2,036,602 | |||||
Kawasaki Kisen Kaisha Ltd | 566,000 | 1,935,520 | |||||
Kobe Steel Ltd * | 1,057,000 | 1,204,856 | |||||
Mazda Motor Corp. | 629,067 | 1,592,217 | |||||
Mitsui Trust Holdings, Inc. | 314,000 | 1,727,613 | |||||
Mizuho Financial Group, Inc. | 703 | 1,577,436 | |||||
Nippon Express Co. Ltd | 328,000 | 1,374,824 | |||||
Nippon Sheet Glass Co. Ltd | 386,000 | 1,171,009 | |||||
NTT DoCoMo, Inc. | 348 | 852,704 | |||||
Olympus Optical Co. Ltd | 62,000 | 1,480,232 | |||||
Sumitomo Electric Industries Ltd | 129,000 | 1,076,785 | |||||
Takefuji Corp. | 32,610 | 2,092,730 | |||||
TDK Corp. | 16,600 | 987,820 | |||||
Terumo Corp. | 86,700 | 1,676,960 | |||||
Toyota Motor Corp. | 108,200 | 3,185,352 | |||||
Yamanouchi Pharmaceutical Co. Ltd | 72,000 | 1,990,396 | |||||
38,236,374 | |||||||
Korea - 1.0% | |||||||
Kookmin Bank (ADR) | 18,400 | 605,360 | |||||
KT Corp. (ADR) | 33,600 | 669,648 | |||||
SK Telecom Co. Ltd (ADR) | 36,600 | 652,944 | |||||
1,927,952 | |||||||
Mexico - 0.7% | |||||||
America Movil, SA de CV (ADR) | 21,100 | 487,621 | |||||
Empresas ESM, SA de CV (a)(b)(i) | 2,989 | 350,000 | |||||
Telefonos de Mexico, SA de CV (ADR) | 17,900 | 546,845 | |||||
1,384,466 | |||||||
Netherlands - 3.4% | |||||||
Aegon NV |
| 112,985 | 1,315,184 | ||||
Buhrmann NV | 134,934 | 1,001,524 | |||||
ING Groep NV | 151,073 | 2,768,955 | |||||
Koninklijke KPN NV * | 213,550 | 1,599,967 | |||||
6,685,630 | |||||||
Norway - 1.3% | |||||||
DNB Holding ASA * | 232,800 | $1,115,328 | |||||
Gjensidige NOR Sparebank ASA | 44,050 | 1,529,731 | |||||
2,645,059 | |||||||
Philippines - 0.1% | |||||||
Globe Telecom, Inc. | 21,001 | 265,981 | |||||
Poland - 0.2% | |||||||
Telekomunikacja Polska SA* (GDR) | 107,700 | 385,566 | |||||
Russia - 0.3% | |||||||
Vimpel-Communications * (ADR) | 8,000 | 486,880 | |||||
Singapore - 1.1% | |||||||
Haw Par Corp. Ltd | 96,006 | 237,621 | |||||
ST Assembly Test Services Ltd * | 563,000 | 807,425 | |||||
Venture Corp. Ltd | 102,000 | 1,179,702 | |||||
2,224,748 | |||||||
South Africa - 1.2% | |||||||
Alexander Forbes Ltd | 154,800 | 229,291 | |||||
BIDVest Group Ltd | 50,700 | 302,940 | |||||
Community Growth Fund | 894,098 | 344,059 | |||||
Investec Group Ltd | 17,387 | 245,035 | |||||
Nedcor Ltd |
| 23,323 | 232,096 | ||||
Old Mutual plc | 211,000 | 321,637 | |||||
Pick 'n Pay Holdings Ltd | 61,200 | 57,206 | |||||
Pick 'n Pay Stores Ltd | 69,600 | 146,130 | |||||
Venfin Ltd * | 167,600 | 410,938 | |||||
2,289,332 | |||||||
Spain - 2.8% | |||||||
Gas Natural SDG SA | 115,854 | 2,226,035 | |||||
Santander Central Hispano SA | 111,370 | 944,713 | |||||
Telefonica SA | 198,037 | 2,339,832 | |||||
5,510,580 | |||||||
Sweden - 0.8% | |||||||
Hennes & Mauritz AB * | 66,050 | 1,496,060 | |||||
Switzerland - 2.6% | |||||||
Givaudan AG | 2,230 | 944,515 | |||||
Swisscom AG | 6,688 | 1,950,962 | |||||
Zurich Financial Services Group AG | 17,802 | 2,225,587 | |||||
5,121,064 | |||||||
Taiwan - 0.8% | |||||||
Taiwan Semiconductor Manufacturing Co. Ltd (ADR)* | 82,284 | 891,136 | |||||
United Microelectronics Corp. (ADR)* | 159,666 | 720,093 | |||||
1,611,229 | |||||||
Thailand - 0.7% | |||||||
Bangkok Bank PCL | 157,900 | $299,785 | |||||
Charoen Pokphand Foods PCL | 1,672,000 | 205,502 | |||||
Electricity Generating PCL: | |||||||
Alien Market | 161,700 | 234,290 | |||||
Local Market | 22,000 | 31,876 | |||||
Land & Houses PCL | 1,146,900 | 346,677 | |||||
National Finance PCL | 665,500 | 290,938 | |||||
1,409,068 | |||||||
Turkey - 0.2% | |||||||
Turkcell Iletisim Hizmetleri AS (ADR) * |
| 17,100 | 295,830 | ||||
United Kingdom - 20.4% | |||||||
Abbey National Benefit Consultants Ltd | 225,028 | 1,847,821 | |||||
Aviva plc | 259,446 | 2,014,004 | |||||
AWG plc | 171,081 | 1,372,136 | |||||
Barclays plc |
| 300,543 | 2,306,800 | ||||
Barratt Developments plc | 150,604 | 1,271,735 | |||||
Boots Group plc | 266,305 | 2,857,407 | |||||
BT Group plc | 675,213 | 2,020,272 | |||||
GlaxoSmithKline plc | 113,092 | 2,347,961 | |||||
HSBC Holdings plc | 71,996 | 949,624 | |||||
InterContinental Hotels Group plc | 90,003 | 718,116 | |||||
Invensys plc | 2,911,973 | 1,379,522 | |||||
KESA Electricals plc * | 62,731 | 232,272 | |||||
Kingfisher plc | 274,448 | 1,190,686 | |||||
Land Securities Group plc | 1 | 12 | |||||
Next Group plc | 143,699 | 2,684,829 | |||||
Royal & Sun Alliance Insurance Group plc: | |||||||
Ordinary | 770,674 | 1,034,451 | |||||
Rights | 770,674 | 156,929 | |||||
Scottish & Southern Energy plc | 248,535 | 2,511,815 | |||||
Scottish Power plc | 473,038 | 2,761,906 | |||||
United Utilities plc | 251,469 | 1,918,641 | |||||
Vodafone Airtouch plc | 4,000,459 | 7,979,718 | |||||
Wolseley plc | 44,397 | 518,253 | |||||
| 40,074,910 | ||||||
United States - 1.7% | |||||||
Evergreen Solar, Inc. * | 2,732 | 5,655 | |||||
H2Gen Innovations, Inc.: | |||||||
Series A (Preferred) (b)(i)* | 251,496 | 251,496 | |||||
Warrants Exp. 1/1/12 (b)(i)* | 20,833 | -- | |||||
Mayer Laboratories, Inc., Warrants Exp. 12/31/07 (b)(i)* |
| 11,538 | -- | ||||
Northern Power Systems, Inc.: | |||||||
Series A (Preferred) (a)(b)(i)* | 1,747 | 8,735 | |||||
Series C (Preferred) (a)(b)(i)* | 182,178 | 910,890 | |||||
Series D (Preferred) (a)(b)(i)* | 35,000 | 175,000 | |||||
Powerspan Corp.: | |||||||
Series A (Preferred) (b)(i)* | 45,455 | 148,437 | |||||
Series B (Preferred) (b)(i)* | 20,000 | 37,873 | |||||
ProFund Internacional SA: | |||||||
(Common) (b)(i)* | 2,500 | -- | |||||
(Preferred) (b)(i) | 212,448 | $135,967 | |||||
Proton Energy Systems, Inc. * | 418,331 | 1,087,661 | |||||
RF Technology, Inc.: | |||||||
Series A (Preferred) (b)(i)* | 53,844 | 1 | |||||
Warrants Exp. 7/16/04 (b)(i)* | 15,384 | -- | |||||
SMARTTHINKING, Inc.: | |||||||
Series A (Preferred) (b)(i)* | 44,699 | 68,314 | |||||
Series B (Preferred) (b)(i)* | 163,588 | 31,050 | |||||
Warrants Exp. 10/20/05 (b)(i)* | 32,726 | -- | |||||
Soluz, Inc.: | |||||||
(Common) (b)(i)* |
| 10,250 | 1 | ||||
Warrants Exp. 6/1/04 (b)(i)* | 3,125 | -- | |||||
Wellspring International, Inc.: | |||||||
Series A (Preferred) (b)(i)* | 129,032 | 116,223 | |||||
Series B (Preferred) (b)(i)* | 108,267 | 112,170 | |||||
Series C (Preferred) (b)(i)* | 277,778 | 150,000 | |||||
Warrants Exp. 8/15/12 (b)(i)* | 23,148 | -- | |||||
3,239,473 | |||||||
Total Equity Securities (Cost $162,548,220) |
| 175,382,684 | |||||
| Adjusted | ||||||
Limited Partnership Interest - 0.5% | Basis | ||||||
SEAF Central & Eastern European Growth Fund LLC (a)(b)(i)* |
| $884,290 | 736,856 | ||||
Solar Development Capital LP (b)(i)* | 32,500 | -- | |||||
Sustainable Asset Management AG (b)(i)* | 526,659 | 320,767 | |||||
Terra Capital Investments, Inc. (b)(i)* |
| 280,800 | 1 | ||||
Total Limited Partnership Interest (Cost $1,676,973) | 1,057,624 | ||||||
Principal | |||||||
Taxable Variable Rate Demand Notes - 1.4% | Amount | ||||||
New York City Housing Development Corp. MFH Revenue, | |||||||
1.06%, 8/15/32 | 675,000 | 675,000 | |||||
New York State Housing Finance Agency Revenue, 1.11%, 11/1/33 | 2,000,000 | 2,000,000 | |||||
Total Taxable Variable Rate Demand Notes (Cost $2,675,000) | 2,675,000 | ||||||
Corporate Notes - 0.1% | |||||||
Mayer Laboratories, Inc., 6.00%, 12/31/03 (b)(e)(i) | 125,000 | 31,250 | |||||
Powerspan Corp., 10.00%, 12/20/04 (b)(i) | 179,322 | 179,322 | |||||
Soluz Dominicana, Inc., 9.00%, 12/31/03 (b)(d)(i) | 150,000 | 25,560 | |||||
Total Corporate Notes (Cost $454,322) | 236,132 | ||||||
Principal | |||||||
High Social Impact Investments - 1.8% | Amount | Value | |||||
Calvert Social Investment Foundation Notes, | |||||||
1.74%, 7/1/05(b)(i) | $3,738,819 | $3,648,863 | |||||
Total High Social Impact Investments (Cost $3,738,819) | 3,648,863 | ||||||
Certificates of Deposit - 0.1% | |||||||
Self Help Credit Union, 1.36%, 2/23/04 (b)(k) |
| 100,000 | 99,880 | ||||
Shore Bank, 2.20%, 3/15/04 (b)(k) | 100,000 | 99,820 | |||||
Total Certificates of Deposit (Cost $200,000) | 199,700 | ||||||
U.S. Government Agencies and Instrumentalities - 0.6% | |||||||
U.S. Treasury Bills: | |||||||
1.05%, 10/23/03 (l) | 200,000 | 199,871 | |||||
1.09%, 10/23/03 (l) | 50,000 | 49,967 | |||||
1.16%, 10/23/03 (l) | 700,000 | 699,504 | |||||
1.185%, 10/23/03 (l) | 200,000 | 199,867 | |||||
Total U.S. Government Agencies | |||||||
and Instrumentalities (Cost $1,149,209) | 1,149,209 | ||||||
TOTAL INVESTMENTS (Cost $172,442,543) - 93.7% | 184,349,212 | ||||||
Other assets and liabilities, net - 6.3% | 12,314,829 | ||||||
Net Assets - 100% | $196,664,041 |
Abbreviations:
ADR: American Depository Receipt | LP: Limited Partnership | |||
GDR: Global Depository Receipt | MFH: Multi-Family Housing | |||
LLC: Limited Liability Corporation | PCL: Public Company Limited |
* Non-income producing security.
(a) Affiliated company.
(b) This security was valued by the Board of Directors. See Note A.
(d) Security is a defaulted security and $28,989 in accrued interest has been written of as of September 30, 2003.
(e) Security is a defaulted security.
(i) Restricted securities represent 3.8% of net assets of the Fund.
(k) These certificates of deposit are fully insured by agencies of the federal government.
(l) Collateral for futures contracts.
See notes to financial statements.
Forward Foreign Currency Contracts, Open at September 30, 2003
Unrealized | |||||
Appreciation/ | |||||
Contracts to Receive/ Deliver | In Exchange For | Settlement | Contract Value | Depreciation | |
Date | (US$) | (US$) | |||
__________________________________________________________________________________ | |||||
Purchases_________________________________________________________________________ | |||||
Australian Dollar | 2,805,885 US Dollars | $1,717,202 | 31-Oct-03 | 1,902,441 | $185,239 |
Australian Dollar | 2,434,570 US Dollars | 1,592,085 | 31-Oct-03 | 1,650,682 | 58,597 |
Swiss Franc | 2,145,613 US Dollars | 1,589,579 | 26-Mar-04 | 1,632,702 | 43,123 |
Swiss Franc | 2,145,613 US Dollars | 1,591,925 | 26-Mar-04 | 1,632,702 | 40,777 |
Swiss Franc | 2,145,613 US Dollars | 1,591,937 | 26-Mar-04 | 1,632,702 | 40,765 |
Swiss Franc | 2,145,613 US Dollars | 1,593,278 | 26-Mar-04 | 1,632,702 | 39,424 |
Swiss Franc | 2,145,613 US Dollars | 1,592,292 | 26-Mar-04 | 1,632,702 | 40,410 |
Euro | 464,901 US Dollars | 531,172 | 26-Mar-04 | 539,198 | 8,026 |
Euro | 464,901 US Dollars | 531,521 | 26-Mar-04 | 539,198 | 7,677 |
Euro | 929,802 US Dollars | 1,061,092 | 26-Mar-04 | 1,078,396 | 17,304 |
Japanese Yen | 356,505,000 US Dollars | 2,995,840 | 31-Oct-03 | 3,203,093 | 207,253 |
__________________________________________________________________________________ | |||||
_________________________________________________________Total Purchases $688,595 | |||||
__________________________________________________________________________________ | |||||
Sales_____________________________________________________________________________ | |||||
Australian Dollar | 1,796,009 US Dollars | $1,097,793 | 31-Oct-03 | 1,217,727 | ($119,934) |
Australian Dollar | 1,198,015 US Dollars | 731,987 | 31-Oct-03 | 812,275 | (80,288) |
British Pound | 548,844 US Dollars | 895,692 | 26-Mar-04 | 900,922 | (5,230) |
British Pound | 548,844 US Dollars | 897,635 | 26-Mar-04 | 900,922 | (3,287) |
British Pound | 548,845 US Dollars | 897,635 | 26-Mar-04 | 900,922 | (3,287) |
Japanese Yen | 51,151,400 US Dollars | 431,221 | 31-Oct-03 | 459,580 | (28,359) |
Japanese Yen | 133,442,000 US Dollars | 1,123,277 | 31-Oct-03 | 1,198,937 | (75,660) |
Japanese Yen | 186,439,000 US Dollars | 1,569,352 | 31-Oct-03 | 1,675,100 | (105,748) |
Japanese Yen | 59,505,000 US Dollars | 500,000 | 31-Oct-03 | 534,635 | (34,635) |
Swedish Krona | 962,470 US Dollars | 121,719 | 26-Mar-04 | 123,220 | (1,501) |
Swedish Krona | 962,470 US Dollars | 122,492 | 26-Mar-04 | 123,220 | (728) |
__________________________________________________________________________________ | |||||
_____________________________________________________________Total Sales ($458,657) | |||||
__________________________________________________________________________________ | |||||
____________________________________________Total Net Unrealized Appreciation $229,938 |
See notes to financial statements.
Underlying | Unrealized | |||||||||||
# of | Expiration | Face Amount | Appreciation | |||||||||
Futures* | Contracts | Date | at Value | (Depreciation) | ||||||||
Purchased: | ||||||||||||
FTSE 100 Index | 47 | 12/03 | $3,106,203 | ($97,094) | ||||||||
CAC 40 Index | 28 | 10/03 | 1,023,220 | (32,395) | ||||||||
DAX Index | 63 | 12/03 | 5,994,972 | (559,766) | ||||||||
MIB 30 Index | 7 | 12/03 | 1,012,094 | (27,462) | ||||||||
TSE Topix Index | 19 | 12/03 | 1,727,116 | (48,471) | ||||||||
Total Purchased |
|
| ($765,188) | |||||||||
Sold: | ||||||||||||
S&P CAN 60 Index | 17 | 12/03 | $1,050,902 | $26,355 | ||||||||
Total Sold | $26,355 |
* Futures collateralized by 1,150,000 units of U.S. Treasury Bills.
See notes to financial statements.
Statement of Assets and Liabilities
September 30, 2003
Assets | Value | ||||
Investments in securities, at value (Cost $172,442,543) - | |||||
see accompanying schedule | $184,349,212 | ||||
Cash | 11,843,090 | ||||
Unrealized appreciation on forward foreign currency contracts | 688,595 | ||||
Receivable for securities sold | 8,166 | ||||
Receivable for shares sold | 389,980 | ||||
Interest and dividends receivable | 393,979 | ||||
Other assets | 117,165 | ||||
Total assets | 197,790,187 | ||||
Liabilities | |||||
Payable for shares redeemed | 38,456 | ||||
Payable for futures variation margin | 164,222 | ||||
Payable to Calvert Asset Management Co., Inc. | 226,966 | ||||
Payable to Calvert Administrative Services Co. | 53,416 | ||||
Payable to Calvert Shareholder Services, Inc. | 11,339 | ||||
Payable to Calvert Distributors, Inc. | 46,889 | ||||
Unrealized depreciation on forward foreign currency contracts | 458,657 | ||||
Accrued expenses and other liabilities | 126,201 | ||||
Total liabilities | 1,126,146 | ||||
Net Assets | $196,664,041 | ||||
Net Assets Consist of: | |||||
Paid-in capital applicable to the following shares of common stock, | |||||
250,000,000 shares of $0.01 par value authorized for Class A, | |||||
Class B, Class C and Class I combined: | |||||
Class A: 11,184,928 shares outstanding | $186,156,028 | ||||
Class B: 455,234 shares outstanding | 8,729,435 | ||||
Class C: 740,983 shares outstanding | 12,996,511 | ||||
Class I: 1,188,595 shares outstanding | 28,306,666 | ||||
Undistributed net investment income | 2,197,017 | ||||
Accumulated net realized gain (loss) on investments | (53,196,188) | ||||
Net unrealized appreciation (depreciation) on investments | 11,474,572 | ||||
Net Assets | $196,664,041 | ||||
Net Asset Value Per Share | |||||
Class A (based on net assets of $162,699,200) | $14.55 | ||||
Class B (based on net assets of $6,175,618) | $13.57 | ||||
Class C (based on net assets of $9,763,662) | $13.18 | ||||
Class I (based on net assets of $18,025,561) | $15.17 |
See notes to financial statements.
Statement of Operations
Year Ended September 30, 2003
Net Investment Income | ||||
Investment Income: | ||||
Dividend income (net of foreign taxes withheld of $490,426) | $4,427,759 | |||
Interest income | 92,365 | |||
Total investment income | 4,520,124 | |||
Expenses: | ||||
Investment advisory fee | 1,223,345 | |||
Transfer agency fees and expenses | 585,666 | |||
Distribution Plan expenses: | ||||
Class A | 355,723 | |||
Class B | 50,770 | |||
Class C | 82,102 | |||
Directors' fees and expenses | 48,409 | |||
Administrative fees | 555,822 | |||
Custodian fees | 306,460 | |||
Registration fees | 51,303 | |||
Reports to shareholders | 119,905 | |||
Professional fees | 31,960 | |||
Miscellaneous | 73,243 | |||
Total expenses | 3,484,708 | |||
Reimbursement from Advisor: | ||||
Class A | (27,462) | |||
Class B | (980) | |||
Class C | (1,584) | |||
Class I | (22,450) | |||
Fees paid indirectly | (11,239) | |||
Net expenses | 3,420,993 | |||
Net Investment Income | 1,099,131 | |||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investments | (10,655,118) | |||
Foreign currency transactions | 1,176,958 | |||
Futures | 120,134 | |||
(9,358,026) | ||||
Change in unrealized appreciation or (depreciation) on: | ||||
Investments and foreign currencies | 41,329,270 | |||
Assets and liabilities denominated in foreign currencies | 206,766 | |||
Futures | (763,458) | |||
40,772,578 | ||||
Net Realized and Unrealized Gain | ||||
(Loss) | 31,414,552 | |||
Increase (Decrease) in Net Assets | ||||
Resulting From Operations | $32,513,683 |
See notes to financial statements.
Statements of Changes in Net Assets
Year Ended | Year Ended | |||||
September 30, | September 30, | |||||
Increase (Decrease) in Net Assets | 2003 | 2002 | ||||
Operations: | ||||||
Net investment income | $1,099,131 | $187,631 | ||||
Net realized gain (loss) | (9,358,026) | (35,243,739) | ||||
Change in unrealized appreciation or (depreciation) | 40,772,578 | 14,771,208 | ||||
Increase (Decrease) in Net Assets | ||||||
Resulting From Operations | 32,513,683 | (20,284,900) | ||||
Distributions to shareholders from | ||||||
Net investment income: | ||||||
Class A Shares | (648,785) | -- | ||||
Class B Shares | (22,167) | -- | ||||
Class C Shares | (36,190) | -- | ||||
Class I Shares | (30,094) | -- | ||||
Net realized gain: | ||||||
Class A Shares | -- | (855,302) | ||||
Class B Shares | -- | (27,385) | ||||
Class C Shares | -- | (45,320) | ||||
Class I Shares | -- | (126,199) | ||||
Total distributions | (737,236) | (1,054,206) | ||||
Capital share transactions: | ||||||
Shares sold: | ||||||
Class A Shares | 73,404,754 | 77,599,181 | ||||
Class B Shares | 1,817,241 | 1,525,730 | ||||
Class C Shares | 2,392,549 | 3,655,045 | ||||
Class I Shares | 10,982,600 | 2,148,284 | ||||
Shares issued from merger (See Note A): | ||||||
Class A | -- | 1,830,011 | ||||
Reinvestment of distributions: | ||||||
Class A Shares | 594,397 | 792,023 | ||||
Class B Shares | 19,341 | 24,505 | ||||
Class C Shares | 33,081 | 41,796 | ||||
Class I Shares | 29,276 | 119,566 | ||||
Redemption fees: | ||||||
Class A Shares | 63,089 | 255,963 | ||||
Shares redeemed: | ||||||
Class A Shares | (69,095,200) | (85,362,691) | ||||
Class B Shares | (1,017,597) | (941,648) | ||||
Class C Shares | (1,216,412) | (2,994,487) | ||||
Class I Shares | (394,192) | (16,418,101) | ||||
Total capital share transactions | 17,612,927 | (17,724,823) | ||||
Total Increase (Decrease) in Net Assets | 49,389,374 | (39,063,929) | ||||
Net Assets | ||||||
Beginning of year | 147,274,667 | 186,338,596 | ||||
End of year (including undistributed net investment income | ||||||
of $2,197,017 and $694,436, respectively.) | $196,664,041 | $147,274,667 |
See notes to financial statements.
Statements of Changes in Net Assets
Year Ended | Year Ended | |||||
September 30, | September 30, | |||||
Capital Share Activity | 2003 | 2002 | ||||
Shares sold: | ||||||
Class A Shares | 5,754,470 | 5,481,345 | ||||
Class B Shares | 146,384 | 112,282 | ||||
Class C Shares | 202,140 | 280,228 | ||||
Class I Shares | 735,993 | 160,346 | ||||
Shares issued from merger (See Note A): | ||||||
Class A | -- | 144,323 | ||||
Reinvestment of distributions: | ||||||
Class A Shares | 47,177 | 52,912 | ||||
Class B Shares | 1,630 | 1,710 | ||||
Class C Shares | 2,870 | 3,022 | ||||
Class I Shares | 2,243 | 7,789 | ||||
Shares redeemed: | ||||||
Class A Shares | (5,451,679) | (6,002,043) | ||||
Class B Shares | (83,180) | (70,431) | ||||
Class C Shares | (103,824) | (231,619) | ||||
Class I Shares | (29,620) | (1,269,402) | ||||
Total capital share activity | 1,224,604 | (1,329,538) |
See notes to financial statements.
Notes to Financial Statements
Note A -- Significant Accounting Policies
General: The Calvert World Values International Equity Fund (the "Fund"), a series of Calvert World Values Fund, Inc., is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The operation of each series is accounted for separately. The Fund offers four classes of shares of capital stock. Class A shares are sold with a maximum front-end sales charge of 4.75%. Class B shares are sold without a front-end sales charge. With certain exceptions, the Fund will impose a deferred sales charge at the time of redemption, depending on how long investors have owned the shares. Class C shares are sold without a front-end sales charge. With certain exceptions, the Fund will impose a deferred sales charge on shares sold within one year of purchase. Class B and Class C shares have higher levels of expenses than Class A shares. Class I shares require a minimum account balance of $1,000,000. The $1 million minimum initial investment may be waived for certain institutional accounts, where it is believed to be in the best interest of the Fund and its shareholders. Class I shares have no front-end or deferred sales charge. Each class has different: (a) dividend rates, due to differences in Distribution Plan expenses and other class-specific expenses, (b) exchange privileges and (c) class-specific voting rights.
On September 13, 2002, the net assets of the Calvert South Africa Fund merged into the Calvert World Values International Equity Fund. The merger was accomplished by a tax-free exchange of 144,323 Class A shares of the International Equity Fund (valued at $1,830,011) for 168,200 Class A shares of the South Africa Fund outstanding at September 13, 2002. The South Africa Fund's net assets at that date, including $274,438 of unrealized depreciation and $5,638,571 of net realized loss were combined with those of the International Equity Fund.
Security Valuation: Net asset value per share is determined every business day as of the close of the regular session of the New York Stock Exchange (generally 4:00 p.m. Eastern time), and at such other times as may be necessary or appropriate. Securities for which market quotations are available are valued at last sale price or official closing price on the primary market or exchange in which they trade. Foreign securities are valued based on quotations from the principal market in which such securities are normally traded. If events occur after the close of the principal market in which foreign securities are traded, and before the close of business of the Fund, that are expected to materially affect the value of those securities, then they are valued at their fair value taking these events into account. 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. Short-term notes are stated at amortized cost, which approximates fair value. The Fund may invest in securities whose resale is subject to restrictions. Investments 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. Further, 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 for the investments existed, and the differences could be material.
At September 30, 2003, $7,638,476, or 3.9% of net assets, were valued by the Board of Directors.
Repurchase Agreements: The Fund may enter into repurchase agreements with recognized financial institutions or registered broker/dealers and, in all instances, holds underlying securities with a value exceeding the total repurchase price, including accrued interest. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its value and a possible loss of income or value if the counterparty fails to perform in accordance with the terms of the agreement.
Futures Contracts: The Fund may enter into futures contracts agreeing to buy or sell a financial instrument for a set price at a future date. Initial margin deposits of either cash or securities as required by the broker are made upon entering into the contract. While the contract is open, daily variation margin payments are made to or received from the broker reflecting the daily change in market value of the contract and are recorded for financial reporting purposes as unrealized gains or losses by the Fund. When a futures contract is closed, a realized gain or loss is recorded equal to the difference between the opening and closing value of the contract. The risks associated with entering into futures contracts may include the possible illiquidity of the secondary market which would limit the Fund's ability to close out a futures contract prior to the settlement date, an imperfect correlation between the value of the contracts and the underlying financial instruments, or that the counterparty will fail to perform its obligations under the contracts' terms.
Restricted Securities: The Fund may invest in securities that are subject to legal or contractual restrictions on resale. Generally, these securities may only be sold publicly upon registration under the Securities Act of 1933 or in transactions exempt from such registration.
Security Transactions and Net Investment Income: Security transactions are accounted for on trade date. Realized gains and losses are recorded on an identified cost basis. Dividend income is recorded on the ex-dividend date or, in the case of dividends on certain foreign securities, as soon as the Fund is informed of the ex-dividend date. Interest income, which includes amortization of premium and accretion of discount on debt securities, is accrued as earned. Investment income and realized and unrealized gains and losses are allocated to separate classes of shares based upon the relative net assets of each class. Expenses arising in connection with a class are charged directly to that class. Expenses common to the classes are allocated to each class in proportion to their relative net assets.
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 converted into U.S. dollars using the current exchange rate. Security transactions, income and expenses are translated at the prevailing rate of exchange on the date of the event. The effect of changes in foreign exchange rates on securities and foreign currencies is included in the net realized and unrealized gain or loss on securities and foreign currencies.
Forward Currency Contracts: The Fund enters into forward currency contracts to protect the value of securities and related receivables and payables against changes in future foreign exchange rates and to hedge against its currency exposure relative to that of the MSCI EAFE Index. The Fund's risks in using these contracts include movement in the values of the foreign currencies relative to the U.S. dollar, and the ability of the counterparties to fulfill their obligations under the contracts.
Forward currency contracts are valued at their quoted daily settlement prices. The aggregate principal amounts of the contracts are not recorded in the financial statements. Fluctuations in the value of the contracts are recorded in the Statement of Net Assets as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized forward currency contract gains (losses).
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 accounting principles generally accepted in the United States 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: In an effort to minimize the effect of any market timers, the Fund charges a redemption fee to shareholders upon the redemption of certain large-ticket purchases redeemed within 30 days of purchase. The fee, which is payable to the Fund, is equal to 2% of redemption proceeds, on purchases in excess of $100,000 that are redeemed or exchanged out of the Fund in less than 30 days.
Expense Offset Arrangement: The Fund has an arrangement with its custodian bank whereby the custodian's and transfer agent's fees may be 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 continue to qualify as a regulated investment company under the Internal Revenue Code and to distribute substantially all of its taxable earnings.
Note B -- Related Party Transactions
Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by Calvert Group, Ltd. ("Calvert"), which is indirectly wholly owned by Ameritas Acacia Mutual Holding Company. The Advisor provides investment advisory services and pays the salaries and fees of officers and affiliated Directors of the Fund. For its services, the Advisor receives a monthly fee based on the following annual rates of average daily net assets: .75% on the first $250 million, .725% on the next $250 million and .675% on the excess of $500 million.
The Advisor contractually reimbursed the Fund for expenses of $52,476 for the year ended September 30, 2003. Effective February 1, 2003, the contractual expense cap became 1.10% for Class I shares. For the purposes of this expense limit, operating expenses do not include interest expense, brokerage commissions, taxes, extraordinary expenses and capital items.
Calvert Distributors, Inc., an affiliate of the Advisor, is the distributor and principal underwriter for the Fund. Distribution Plans, adopted by Class A, Class B and Class C shares, allow the Fund to pay the Distributor for expenses and services associated with distribution of shares. The expenses paid may not exceed .35%, 1.00% and 1.00% annually of average daily net assets of each Class A, Class B and Class C shares, respectively. Class I shares do not have Distribution Plan expenses.
The Distributor received $62,362 as its portion of commissions charged on sales of the Fund's Class A shares for the year ended September 30, 2003.
Calvert Shareholder Services, Inc. ("CSSI"), an affiliate of the Advisor, is the shareholder servicing agent for the Fund. For its services, CSSI received a fee of $135,102 for the year ended September 30, 2003. Boston Financial Data Services, Inc. is the transfer and dividend disbursing agent.
Calvert Administrative Services Company, an affiliate of the Advisor, provides administrative services to the Fund for an annual fee, payable monthly, of .35% for Class A, Class B and Class C shares and .15% for Class I shares, based on their average daily net assets.
The Fund invests in Community Investment Notes issued by the Calvert Social Investment Foundation (the "CSI Foundation"). The CSI Foundation is a 501(c)(3) non-profit organization that receives in-kind support from the Calvert Group, Ltd. and its subsidiaries. The Fund has received from the Securities and Exchange Commission an exemptive order permitting the Fund to make investments in these notes under certain conditions.
Each Director of the Fund who is not an employee of the Advisor or its affiliates receives an annual retainer of $9,500 plus $500 for each Board and Committee meeting attended. An additional fee of $5,000 annually is paid to the Lead Independent Director. Director's fees are allocated to each of the funds served.
Note C -- Investment Activity
During the year, purchases and sales of investments, other than short-term securities, were $119,549,476 and $109,136,069, respectively.
The cost of investments owned at September 30, 2003 for federal income tax purposes was $172,558,866. Net unrealized appreciation aggregated $11,790,346, of which $21,154,953 related to appreciated securities and $9,364,607 related to depreciated securities.
Net capital loss carryforwards of $633,283 (from Calvert South Africa Fund), $8,132,920 and $35,108,441 expire on September 30, 2009, September 30, 2010 and September 30, 2011, respectively.
The Fund's use of net capital loss carryforwards from Calvert South Africa Fund may be limited under certain tax provisions.
The Fund intends to elect to defer approximately $9,217,061 of post-October losses to fiscal year ending September 30, 2004. Such losses if unutilized will expire in 2012.
The tax character of dividends and distributions paid during the years ended September 30, 2003, and September 30, 2002 were as follows:
Distributions paid from: | 2003 | 2002 | ||||||
Ordinary income | $737,236 | -- | ||||||
Long-term capital gain | -- | $1,504,206 | ||||||
Total | $737,236 | $1,504,206 |
As of September 30, 2003, the components of distributable earnings/(accumulated losses) on a tax basis were as follows:
Undistributed ordinary income | $2,438,794 | |||
Capital loss carryforward | (43,874,644) | |||
Unrealized appreciation (depreciation) | 11,790,346 | |||
($29,645,504) |
Reclassifications have been made to the funds components of net assets to reflect income and gains available for distribution (or available capital loss carryovers, as applicable) under income tax law and regulations. The primary permanent differences causing such reclassifications are due to currency gains and losses and treatment of partnerships for federal tax purposes.
The differences between the components of distributable earnings on a tax basis and the amounts reflected in the statement of net assets are primarily due to wash sales, post October losses, treatment of partnerships for federal tax purposes and currency contracts.
The Fund paid foreign taxes of $472,604 and recognized foreign source income of $4,483,716. Pursuant to IRC section 853, the Fund designates $.03 per share of foreign taxes and $.36 per share of foreign source income as having been paid for taxable year ended September 30, 2003.
The Fund may sell or purchase securities to and from other funds managed by the Advisor, typically short-term variable rate demand notes. Interportfolio transactions are primarily used for cash management purposes. Interportfolio transactions are made pursuant to Rule 17a-7 of the Investment Company Act of 1940. For the year ended September 30, 2003, purchase and sales transactions were $7,365,000 and $4,665,000, respectively.
Note D -- Line of Credit
A financing agreement is in place with all Calvert Group Funds (except for the Calvert Social Investment Fund's Balanced and Enhanced Equity Portfolios, the CVS Calvert Social Balanced Portfolio and the CVS Ameritas Index 500 Portfolio) 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. The Fund had no loans outstanding pursuant to this line of credit at September 30, 2003.
For the year ended September 30, 2003, borrowings by the Fund under the Agreement were as follows:
Weighted | Month of | |||||||||||||||
Average | Average | Maximum | Maximum | |||||||||||||
Daily | Interest | Amount | Amount | |||||||||||||
Balance | Rate | Borrowed | Borrowed | |||||||||||||
$92,068 | 1.84% | $3,394,823 | March 2003 |
Note E -- Affiliated Companies
An affiliated company is a company in which the Fund has a direct or indirect ownership of, control of, or voting power over 5 percent or more of the outstanding voting shares. Affiliated companies of the Fund are as follows:
Affiliates | Cost | Value | |||||
Empresas ESM, SA de CV | $350,000 | $350,000 | |||||
Northern Power Systems, Inc. | 434,812 | 1,094,625 | |||||
SEAF Central & Eastern European Growth Fund LLC | 879,382 | 736,856 | |||||
TOTALS | $1,664,194 | $2,181,481 |
Financial Highlights
Years Ended | ||||||||
September 30, | September 30, | |||||||
Class A Shares | 2003 | 2002 | ||||||
Net asset value, beginning | $11.99 | $13.65 | ||||||
Income from investment operations | ||||||||
Net investment income (loss) | .09 | .01 | ||||||
Net realized and unrealized gain (loss) | 2.53 | (1.59) | ||||||
Total from investment operations | 2.62 | (1.58) | ||||||
Distributions from | ||||||||
Net investment income | (.06) | -- | ||||||
Net realized gains | -- | (.08) | ||||||
Total distributions | (.06) | (.08) | ||||||
Total increase (decrease) in net asset value | 2.56 | (1.66) | ||||||
Net asset value, ending | $14.55 | $11.99 | ||||||
Total return* | 21.93% | (11.69%) | ||||||
Ratios to average net assets: | ||||||||
Net investment income (loss) | .72% | .06% | ||||||
Total expenses | 2.07% | 2.02% | ||||||
Expenses before offsets | 2.05% | 2.00% | ||||||
Net expenses | 2.05% | 1.99% | ||||||
Portfolio turnover | 71% | 106% | ||||||
Net assets, ending (in thousands) | $162,699 | $129,887 |
Years Ended | |||||||||||
September 30, | September 30, | September 30, | |||||||||
Class A Shares | 2001 | 2000 | 1999 | ||||||||
Net asset value, beginning | $21.77 | $21.89 | $18.57 | ||||||||
Income from investment operations | |||||||||||
Net investment income | .01 | (.03) | .01 | ||||||||
Net realized and unrealized gain (loss) | (6.75) | .87 | 4.94 | ||||||||
Total from investment operations | . | (6.74) | .84 | 4.95 | |||||||
Distributions from | |||||||||||
Net investment income | -- | -- | (.07) | ||||||||
Net realized gains | (1.38) | (.96) | (1.56) | ||||||||
Total distributions | (1.38) | (.96) | (1.63) | ||||||||
Total increase (decrease) in net asset value | (8.12) | (.12) | 3.32 | ||||||||
Net asset value, ending | $13.65 | $21.77 | $21.89 | ||||||||
Total return* | (32.93%) | 3.36% | 27.53% | ||||||||
Ratios to average net assets: | |||||||||||
Net investment income (loss) | .07% | (.15%) | .04% | ||||||||
Total expenses | 1.85% | 1.81% | 1.87% | ||||||||
Expenses before offsets | 1.85% | 1.81% | 1.87% | ||||||||
Net expenses | 1.83% | 1.73% | 1.83% | ||||||||
Portfolio turnover | 93% | 76% | 82% | ||||||||
Net assets, ending (in thousands) | $152,278 | $238,646 | $231,516 |
Years Ended | ||||||||
September 30, | September 30, | |||||||
Class B Shares | 2003 | 2002 | ||||||
Net asset value, beginning | $11.33 | $13.09 | ||||||
Income from investment operations | ||||||||
Net investment income (loss) | (.08) | (.16) | ||||||
Net realized and unrealized gain (loss) | 2.38 | (1.52) | ||||||
Total from investment operations | 2.30 | (1.68) | ||||||
Distributions from: | ||||||||
Net investment income | (.06) | -- | ||||||
Net realized gains | -- | (.08) | ||||||
Total distributions | (.06) | (.08) | ||||||
Total increase (decrease) in net asset value | 2.24 | (1.76) | ||||||
Net asset value, ending | $13.57 | $11.33 | ||||||
Total return* | 20.34% | (12.96%) | ||||||
Ratios to average net assets | ||||||||
Net investment income (loss) | (.64%) | (1.22%) | ||||||
Total expenses | 3.44% | 3.33% | ||||||
Expenses before offsets | 3.42% | 3.31% | ||||||
Net expenses | 3.41% | 3.31% | ||||||
Portfolio turnover | 71% | 106% | ||||||
Net assets, ending (in thousands) | $6,176 | $4,424 |
Years Ended | |||||||||||
September 30, | September 30, | September 30, | |||||||||
Class B Shares | 2001 | 2000 | 1999 | ||||||||
Net asset value, beginning | $21.20 | $21.56 | $18.48 | ||||||||
Income from investment operations | |||||||||||
Net investment income (loss) | (.18) | (.23) | (.15) | ||||||||
Net realized and unrealized gain (loss) | (6.55) | .83 | 4.79 | ||||||||
Total from investment operations | (6.73) | .60 | 4.64 | ||||||||
Distributions from: | |||||||||||
Net realized gains | (1.38) | (.96) | (1.56) | ||||||||
Total distributions | (1.38) | (.96) | (1.56) | ||||||||
Total increase (decrease) in net asset value | (8.11) | (.36) | 3.08 | ||||||||
Net asset value, ending | $13.09 | $21.20 | $21.56 | ||||||||
Total return* | (33.82%) | 2.28% | 25.84% | ||||||||
Ratios to average net assets: | |||||||||||
Net investment income (loss) | (1.13%) | (1.29%) | (1.20%) | ||||||||
Total expenses | 3.08% | 3.04% | 3.62% | ||||||||
Expenses before offsets | 3.08% | 3.04% | 3.20% | ||||||||
Net expenses | 3.06% | 2.96% | 3.16% | ||||||||
Portfolio turnover | 93% | 76% | 82% | ||||||||
Net assets, ending (in thousands) | $4,542 | $5,577 | $3,133 |
Years Ended | |||||||
September 30, | September 30, | ||||||
Class C Shares | 2003 | 2002 | |||||
Net asset value, beginning | $10.97 | $12.64 | |||||
Income from investment operations | |||||||
Net investment income (loss) | (.03) | (.12) | |||||
Net realized and unrealized gain (loss) | 2.30 | (1.47) | |||||
Total from investment operations | 2.27 | (1.59) | |||||
Distributions from: | |||||||
Net investment income | (.06) | -- | |||||
Net realized gains | -- | (.08) | |||||
Total distributions | (.06) | (.08) | |||||
Total increase (decrease) in net asset value | 2.21 | (1.67) | |||||
Net asset value, ending | $13.18 | $10.97 | |||||
Total return* | 20.72% | (12.71%) | |||||
Ratios to average net assets: | |||||||
Net investment income (loss) | (.27%) | (.95%) | |||||
Total expenses | 3.09% | 3.05% | |||||
Expenses before offsets | 3.07% | 3.04% | |||||
Net expenses | 3.07% | 3.03% | |||||
Portfolio turnover | 71% | 106% | |||||
Net assets, ending (in thousands) | $9,764 | $7,021 |
Years Ended | |||||
September 30, | September 30, | September 30, | |||
Class C Shares | 2001 | 2000 | 1999 | ||
Net asset value, beginning | $20.46 | $20.81 | $17.83 | ||
Income from investment operations | |||||
Net investment income (loss) | (.14) | (.22) | (.17) | ||
Net realized and unrealized gain (loss) | (6.30) | .83 | 4.71 | ||
Total from investment operations | . | (6.44) | .61 | 4.54 | |
Distributions from | |||||
Net realized gains | (1.38) | (.96) | (1.56) | ||
Total distributions | (1.38) | (.96) | (1.56) | ||
Total increase (decrease) in net asset value | (7.82) | (.35) | 2.98 | ||
Net asset value, ending | $12.64 | $20.46 | $20.81 | ||
Total return* | (33.62%) | 2.41% | 26.25% | ||
Ratios to average net assets: | |||||
Net investment income (loss) | (.89%) | (1.06%) | (.92%) | ||
Total expenses | 2.81% | 2.75% | 2.83% | ||
Expenses before offsets | 2.81% | 2.75% | 2.83% | ||
Net expenses | 2.79% | 2.67% | 2.80% | ||
Portfolio turnover | 93% | 76% | 82% | ||
Net assets, ending (in thousands) | $7,434 | $11,278 | $9,777 |
Years Ended | ||||
September 30, | September 30, | September 30, | ||
Class I Shares | 2003 | 2002 | 2001 | |
Net asset value, beginning | $12.38 | $13.97 | $22.03 | |
Income from investment operations | ||||
Net investment income | .22 | .16 | .18 | |
Net realized and unrealized gain (loss) | 2.63 | (1.67) | (6.86) | |
Total from investment operations | 2.85 | (1.51) | (6.68) | |
Distributions from: | ||||
Net investment income | (.06) | -- | -- | |
Net realized gains | -- | (.08) | (1.38) | |
Total distributions | (.06) | (.08) | (1.38) | |
Total increase (decrease) in net asset value | 2.79 | (1.59) | (8.06) | |
Net asset value, ending | $15.17 | $12.38 | $13.97 | |
Total return* | 23.12% | (10.93%) | (32.25%) | |
Ratios to average net assets: | ||||
Net investment income (loss) | 1.65% | 1.05% | 1.09% | |
Total expenses | 1.39% | 1.27% | 1.19% | |
Expenses before offsets | 1.09% | 1.06% | 1.07% | |
Net expenses | 1.09% | 1.05% | 1.05% | |
Portfolio turnover | 71% | 106% | 93% | |
Net assets, ending (in thousands) | $18,026 | $5,943 | $22,085 |
Periods Ended | |||||||
September 30, | September 30, | ||||||
Class I Shares | 2000 | 1999# | |||||
Net asset value, beginning | $21.99 | $19.91 | |||||
Income from investment operations | |||||||
Net investment income | .16 | .15 | |||||
Net realized and unrealized gain (loss) | .84 | 1.93 | |||||
Total from investment operations | 1.00 | 2.08 | |||||
Distributions from: | |||||||
Net realized gains | (.96) | -- | |||||
Total distributions | (.96) | -- | |||||
Total increase (decrease) in net asset value | .04 | 2.08 | |||||
Net asset value, ending | $22.03 | $21.99 | |||||
Total return* | 4.10% | 10.45% | |||||
Ratios to average net assets: | |||||||
Net investment income (loss) | .90% | 1.19% (a) | |||||
Total expenses | 1.28% | 1.53% (a) | |||||
Expenses before offsets | 1.12% | 1.09% (a) | |||||
Net expenses | 1.05% | 1.05% (a) | |||||
Portfolio turnover | 76% | 82% | |||||
Net assets, ending (in thousands) | $10,114 | $3,006 |
(a) Annualized
* Total return is not annualized for periods less than one year and does not reflect deduction of any front-end or deferred sales charge.
# From April 1, 1999 inception.
See notes to financial statements.
Explanation of Financial Tables
Schedule of Investments
The Schedule of Investments is a snapshot of all securities held in the fund at their market value, on the last day of the reporting period. Securities are listed by asset type (e.g., common stock, corporate bonds, U.S. government obligations) and may be further broken down into sub-groups and by industry classification.
Statement of Assets and Liabilities
The Statement of Assets and Liabilities is often referred to as the fund's balance sheet. It lists the value of what the fund owns, is due and owes on the last day of the reporting period. The fund's assets include the market value of securities owned, cash, receivables for securities sold and shareholder subscriptions, and receivables for dividends and interest payments that have been earned, but not yet received. The fund's liabilities include payables for securities purchased and shareholder redemptions, and expenses owed but not yet paid. The statement also reports the fund's net asset value (NAV) per share on the last day of the reporting period. The NAV is calculated by dividing the fund's net assets (assets minus liabilities) by the number of shares outstanding. This statement is accompanied by a Schedule of Investments. Alternatively, if certain conditions are met, a Statement of Net Assets may be presented in lieu of this statement and the Schedule of Investments.
Statement of Net Assets
The Statement of Net Assets provides a detailed list of the fund's holdings, including each security's market value on the last day of the reporting period. The Statement of Net Assets includes a Schedule of Investments. Other assets are added and other liabilities subtracted from the investments total to calculate the fund's net assets. Finally, net assets are divided by the outstanding shares of the fund to arrive at its share price, or Net Asset Value (NAV) per share.
At the end of the Statement of Net Assets is a table displaying the composition of the fund's net assets. Paid in Capital is the money invested by shareholders and represents the bulk of net assets. Undistributed Net Investment Income and Accumulated Net Realized Gains usually approximate the amounts the fund had available to distribute to shareholders as of the statement date. Accumulated Realized Losses will appear as negative balances. Unrealized Appreciation (Depreciation) is the difference between the market value of the fund's investments and their cost, and reflects the gains (losses) that would be realized if the fund were to sell all of its investments at their statement-date values.
Statement of Operations
The Statement of Operations summarizes the fund's investment income earned and expenses incurred in operating the fund. Investment income includes dividends earned from stocks and interest earned from interest-bearing securities in the fund. Expenses incurred in operating the fund include the advisory fee paid to the investment advisor, administrative services fees, distribution plan expenses (if applicable), transfer agent fees, shareholder servicing expenses, custodial, legal, and audit fees, and the printing and postage expenses related to shareholder reports. Expense offsets (fees paid indirectly) are also shown. Credits earned from offset arrangements are used to reduce the fund's expenses. This statement also shows net gains (losses) realized on the sale of investments and the increase or decrease in the unrealized appreciation (depreciation) on investments held during the period.
Statement of Changes in Net Assets
The Statement of Changes in Net Assets shows how the fund's total net assets changed during the two most recent reporting periods. Changes in the fund's net assets are attributable to investment operations, distributions and capital share transactions.
The Operations section of the report summarizes information detailed in the Statement of Operations. The Distribution section shows the dividend and capital gain distributions made to shareholders. The amounts shown as distributions in this section may not match the net investment income and realized gains amounts shown in the Operations section because distributions are determined on a tax basis and certain investments or transactions may be treated differently for financial statement and tax purposes. The Capital Share Transactions section shows the amount shareholders invested in the fund, either by purchasing shares or by reinvesting distributions, and the amounts redeemed. The corresponding numbers of shares issued, reinvested and redeemed are shown at the end of the report.
Financial Highlights
The Financial Highlights table provides a per-share breakdown per class of the components that affect the fund's net asset value for current and past reporting periods. The table provides total return, total distributions, expense ratios, portfolio turnover and net assets for the applicable period. Total return is a measure of a fund's performance that encompasses all elements of return: dividends, capital gain distributions and changes in net asset value. Total return is the change in value of an investment over a given period, assuming reinvestment of any dividends and capital gain distributions, expressed as a percentage of the initial investment. Total distributions include distributions from net investment income and net realized gains. Long-term gains are earned on securities held in the fund more than one year. Short-term gains, on the sale of securities held less than one year, are treated as ordinary dividend income for tax purposes. The expense ratio is a fund's cost of doing business, expressed as a percentage of net assets. These expenses directly reduce returns to shareholders. Portfolio turnover measures the trading activity in a fund's investment portfolio -- how often securities are bought and sold by a fund. Portfolio turnover is affected by market conditions, changes in the size of the fund, the nature of the fund's investments and the investment style of the portfolio manager.
Director and Officer Information Table
# of Calvert | |||||||||
Position | Position | Portfolios | Other | ||||||
Name & | with | Start | Principal Occupation | Overseen | Directorships | ||||
Date of Birth | Fund | Date | During Last 5 Years | (Not Applicable to Officers) | |||||
JOHN GUFFEY, JR. DOB: 05/15/48 | Director | 1992 | Treasurer and Director of Silby, Guffey and Co., Inc. a venture capital firm. | 20 | Ariel Funds Calvert Foundation Calvert Ventures, LLC | ||||
TERRENCE J. MOLLNER, Ed.D. DOB: 12/13/44 | Director
| 1992 | Founder, Chairperson, and President of Trusteeship Institute, Inc., a diverse foundation known principally for its consultation to corporations converting to cooperative employee-ownership and the development of socially and spiritually responsible investment vehicles. | 8 | Hampshire County United Way Cyberlore Studies, Inc. Calvert Foundation Ben & Jerry's Homemade, Inc. | ||||
RUSTUM ROYDOB: 07/03/24 | Director | 1992 | Evan Pugh Professor of the Solid State and of Geo-chemistry Emeritus, at Pennsylvania State University, and Corporation Chair, National Association of Science, Technology, and Society. | 2 | Chairperson, Friends of Health | ||||
TESSA TENNANT DOB: 05/29/59 | Director | 1992 | Chair of AsriA Ltd., a not-for-profit membership organization for Socially Responsible Investing (SRI), serving the Asia Pacific region. Previously, Ms. Tennant served as Head of SRI Policy for Henderson Investors, U.K. and Head of green and ethical investing for National Provident Investment Managers Ltd. Initially, Ms. Tennant headed the Environmental Research Unit of Jupiter Tyndall Merlin Ltd., and served as Director of Jupiter Tyndall Merlin investment managers. | 2 | Solar Century Company, Ltd. | ||||
BARBARA J. KRUMSIEK DOB: 08/09/52 (interested Director) | Director & President | 1997 | President, Chief Executive Officer and Vice Chairman of Calvert Group, Ltd. Prior to joining Calvert in 1997, Ms. Krumsiek had served as a Managing Director of Alliance Fund Distributors, Inc. | 37 | Calvert Foundation | ||||
D. Wayne Silby, Esq. DOB: 07/20/48(interested Director) | Director | 1992 | Mr. Silby is Chairman of GroupServe Foundation, a software company focused on collaborative tools for non-profit groups. He is an officer and director of Silby, Guffey and Co., Inc., a private investment company. | 21 | Ameritas Acacia Mutual Life Insurance Company Calvert Foundation Grameen Foundation USA | ||||
SUSAN walker Bender, Esq. DOB: 01/29/59 | Officer
| 1992 | Assistant Vice President and Associate General Counsel of Calvert Group, Ltd. | ||||||
IVY WAFFORD DUKE, Esq. DOB: 09/07/68 | Officer
| 1996 | Assistant Vice President and Associate General Counsel of Calvert Group, Ltd. | ||||||
Daniel K. Hayes DOB: 09/09/50 | Officer
| 1996 | Senior Vice President of Calvert Asset Management Company, Inc. | ||||||
HUI PING HO, CPA DOB: 01/06/65 | Officer
| 2000 | Tax Compliance Manager of Calvert Group, Ltd. and Assistant Fund Treasurer. | ||||||
Gregory J. Keifer DOB: 08/22/64 | Officer | 2003 | Compliance Officer and Assistant Secretary of the Funds. Prior to working at Calvert Group, Mr. Keifer was Assistant Director of Compliance with Legg Mason Wood Walker, Incorporated and a senior compliance analyst with BISYS Fund Services. | ||||||
LANCELOT A. KING, Esq. DOB: 07/19/70 | Officer | 2002 | Assistant Secretary and Assistant General Counsel of Calvert Group, Ltd. Prior to working at Calvert Group, Mr. King was an associate with Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, and also with Kirkpatrick & Lockhart. | ||||||
William M. Tartikoff, Esq. DOB: 08/12/47 | Officer
| 1992 | Senior Vice President, Secretary, and General Counsel of Calvert Group, Ltd. | ||||||
Ronald M. Wolfsheimer, CPA DOB: 07/24/52 | Officer
| 1992 | Senior Vice President and Chief Financial Officer of Calvert Group, Ltd. and Fund Treasurer. | ||||||
MICHAEL V. YUHAS JR., CPA DOB: 08/04/61 | Officer
| 1999 | Director of Fund Administration of Calvert Group, Ltd. and Fund Controller. |
The address of Directors and Officers is 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814, except Mr. Silby's address is 1715 18th Street, N.W., Washington, DC 20009. Ms. Krumsiek is an interested person of the Fund since she is an officer and director of the Fund's advisor and its affiliates. Mr. Silby is an interested person of the Fund since he is a director of the parent company of the Fund's advisor.
Additional information about the Fund's Directors can be found in the Statement of Additional Information (SAI). You can get a free copy of the SAI by contacting your broker, or the Fund at 1-800-368-2745.
SUPPLEMENT TO
CLASS I (INSTITUTIONAL) SHARES PROSPECTUS
Calvert Social Investment Fund Portfolios
Calvert Social Index Fund
Calvert Large Cap Growth Fund
Calvert Capital Accumulation Fund
Calvert World Values International Equity Fund
Calvert New Vision Small Cap Fund
Calvert Income Fund
Calvert Short Duration Income Fund
Prospectus dated: January 31, 2003
Date of Supplement: June 9, 2003
The $1 million minimum initial investment may be waived for certain institutional accounts, where it is believed to be in the best interest of the Fund and its shareholders.
Please note this change in the prospectus.
SUPPLEMENT TO
PROSPECTUS
Calvert Social Investment Fund (CSIF) Balanced Portfolio
CSIF Equity Portfolio
CSIF Enhanced Equity Portfolio
CSIF Bond Portfolio
CSIF Money Market Portfolio
Calvert Social Index Fund
Calvert Large Cap Growth Fund
Calvert Capital Accumulation Fund
Calvert World Values International Equity Fund
Calvert New Vision Small Cap Fund
Date of Prospectus: January 31, 2003 as revised June 30, 2003
Class I (Institutional) Shares
(All Portfolios)
Date of Prospectus: January 31, 2003
Calvert Income Fund
Calvert Short Duration Income Fund
Date of Prospectus: January 31, 2003 as revised September 15, 2003
CALVERT VARIABLE SERIES, INC.
PROSPECTUS
Calvert Social Balanced Portfolio
Calvert Income Portfolio
Date of Prospectus: April 30, 2003
Date of This Supplement: October 30, 2003
Please replace the second paragraph under "About Calvert" with the following: (for Calvert Variable Series Social Balanced and Income Portfolios replace the third paragraph under "The Fund and Its Management" with the following:)
Steven Falci serves as Calvert's Chief Investment Officer, Equities and oversees the investment strategy and management of all Calvert equity and balanced portfolios. Calvert uses a team approach to its management of the fixed-income portfolios. Gregory Habeeb heads this team for Calvert's taxable fixed-income portfolios. Mr. Habeeb has over 20 years of experience as an analyst, trader, and portfolio manager. Matt Nottingham is also a member of the fixed-income management team. Mr. Nottingham has 7 1/2 years of experience as an analyst, trader, and portfolio manager.
Calvert World Values International Equity Fund
To Open an Account
800-368-2748
Yields and Prices
Calvert Information Network
(24 hours, 7 days a week)
800-368-2745
Service for Existing Account
Shareholders: 800-368-2745
Brokers: 800-368-2746
TDD for Hearing Impaired
800-541-1524
Branch Office
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814
Registered, Certified
or Overnight Mail
Calvert Group
c/o BFDS
330 West 9th Street
Kansas City, MO 64105
Web Site
http://www.calvert.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 investors unless preceded or accompanied by a prospectus.
Calvert's Family of Funds
Tax-Exempt Money Market Funds
CTFR Money Market Portfolio
CTFR California Money Market Portfolio
Taxable Money Market Funds
First Government Money Market Fund
CSIF Money Market Portfolio
Balanced Fund
CSIF Balanced Portfolio
Municipal Funds
CTFR Limited-Term Portfolio
CTFR Long-Term Portfolio
CTFR Vermont Municipal Portfolio
National Muni. Intermediate Portfolio
California Muni. Intermediate Portfolio
Taxable Bond Funds
CSIF Bond Portfolio
Income Fund
Short Duration Income Fund
Equity Funds
CSIF Enhanced Equity Portfolio
CSIF Equity Portfolio
Calvert Large Cap Growth Fund
Capital Accumulation Fund
CWV International Equity Fund
New Vision Small Cap Fund
Calvert Social Index Fund
printed on recycled paper using soy-based inks
<PAGE>
Item 2. Code of Ethics.
(a) The registrant has adopted a code of ethics (the "Code of Ethics") that applies to its principal executive officer and principal financial officer (also referred to as "principal accounting officer").
(b) No information need be disclosed under this paragraph.
(c) The registrant has not amended its Code of Ethics during the period covered by the shareholder report presented in Item 1 hereto.
(d) The registrant has not granted a waiver or implicit waiver from a provision of its Code of Ethics during the period covered by the shareholder report presented in Item 1 hereto.
(e) Not applicable.
(f) The registrant's Code of Ethics is attached as an Exhibit hereto.
Item 3. Audit Committee Financial Expert.
The registrant's Board of Trustees has determined that John G. Guffey, Jr., an "independent" Trustee serving on the registrant's audit committee, is an "audit committee financial expert," as defined in Item 3 of Form N-CSR. Under applicable securities laws, a person who is determined to be an audit committee financial expert will not be deemed an "expert" for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and Board of Trustees in the absence of such designation or identification.
Item 4. Principal Accountant Fees and Services.
Applicable only for annual reports covering fiscal years ending on or after December 15, 2003.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. [Reserved]
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. [Reserved]
Item 9. Controls and Procedures.
(a) The principal executive and financial officers concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the 1940 Act) are effective, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rules 13a-15(b) or 15d-15(b) under the Exchange Act, as of a date within 90 days of the filing date of this report.
(b) There was no change in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant's most recent fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
Item 10. Exhibits.
(a)(1) Code of Ethics.
(a)(2) Certifications of principal executive officer and principal financial
officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(b) Certifications of principal executive officer and principal financial
officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CALVert WORLD VALUES fund, INC.
By: /s/ Barbara Krumsiek
Barbara Krumsiek
President -- Principal Executive Officer
Date: November 25, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
/s/ Barbara Krumsiek
Barbara Krumsiek
President -- Principal Executive Officer
Date: November 25, 2003
/s/ Ronald Wolfsheimer
Ronald Wolfsheimer
Treasurer -- Principal Financial Officer
Date: November 30, 2003