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: Six months ended March 31, 2004
<PAGE>
Item 1. Report to Stockholders.
Calvert
Investments that make a difference(R)
March 31, 2004
Semi-Annual Report
Calvert World Values
International Equity Fund
Table of Contents President's Letter 1 Social Update 3 Portfolio Management Discussion 4 Schedule of Investments 8 Statement of Assets and Liabilities 17 Statement of Operations 18 Statements of Changes in Net Assets 19 Notes to Financial Statements 21 Financial Highlights 26 Explanation of Financial Tables 30 Proxy Voting Disclosure 31 |
Dear Shareholders:
The past year has seen a resurgence of returns across nearly all categories of investment, with the S&P 500 showing a 14.07% gain for the six months ending March 31st and the Lehman U.S. Credit Index up a solid, though less dramatic, 3.78% over the same period.
While we at Calvert celebrate these very strong returns, we caution investors against becoming too caught up in short-term market movements. Now, as at any time, prudent investors should work with their financial advisors to develop a sound asset allocation and investment strategy and stick to it, rebalancing as necessary to reach their targets.
Calvert continued this year to strive toward its dual goals of superior investment results and positive social impact. On the investment side, we are very pleased that several Calvert funds recently have been recognized by the industry for their excellence. Daniel Boone III, the manager of our largest stock fund, the Calvert Social Investment Fund Equity Portfolio, won the "Excellence in Fund Management Award" from Standard & Poor's. As a result, BusinessWeek magazine included Boone among their "Best Fund Managers of 2004."1 In addition, CSIF Bond Portfolio managed by Calvert Asset Management Company's fixed-income team, led by Greg Habeeb, won the 2004 Lipper Fund Award in the Corporate Debt A Rated category.2 And we're proud that John Montgomery, manager of Calvert Large Cap Growth Fund, was named one of the best stock pickers of 2003 by Morningstar. 3 In addition, the Calvert Large Cap Growth Fund was named to the USA Today "All Star Mutual Fund Team." 4
We also maintain our commitment to an industry-leading standard for corporate responsibility. This year, for instance, Calvert commissioned an investor confidence survey to gauge investor confidence of corporate integrity and investor perceptions of the tie between corporate responsibility, risk reduction, and long-term returns. The survey found that investors are, indeed, concerned about the issues uncovered at Enron and WorldCom, as well as within the mutual fund industry, and believe that their investments should be directed toward companies with sound corporate governance and reporting procedures. In addition, we launched a company-wide initiative, Corporate Responsibility Matters, which outlines five pillars of corporate responsibility and includes action steps for companies, investors and financial professionals.
We believe that investors should enjoy positive investment returns as a result of responsible corporate management. Therefore, Calvert will continue to focus on both its objectives -- investment excellence and corporate responsibility with positive environmental and social impact -- as we go forward. 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 Group, Ltd.
April 2004
1 BusinessWeek magazine, March 22, 2004. BusinessWeek evaluated funds for the best risk-adjusted total returns over the past five years. BusinessWeek considered funds open to new investors that had at least $100 million in assets, a minimum investment of no more than $26,000, and a fund manager at the helm of the portfolio for at least five years. S&P evaluated each fund's one-, three-, and five-year performance against its peer group. S&P also evaluated expenses, turnover, portfolio composition, investment style, and consistency.
2 The Lipper award was for CSIF Bond Portfolio Class I shares and was based on the fund in each Lipper classification that achieved the highest Consistent Return scores. The Portfolio is in the Lipper A-Rated Corporate Debt Funds category. A fund's Consistent Return score evaluates its risk-adjusted returns, adjusted for volatility, relative to peers, for the overall period ended December 31, 2003. The fund was chosen from among 149 funds. Lipper Fund Awards are not intended to predict future results, and Lipper does not guarantee the accuracy of this information.
3 Nominees for Stock Fund Manager of the Year, December 11, 2003, Morningstar.
4 USA Today, "Fund Manager All Star Mutual Fund Team," February 26, 2004.
Past performance is no guarantee of future results. The investment return and principal value of an investor's shares, when redeemed, may be worth more or less than their original cost. For more information on any Calvert fund, please contact your financial advisor or call Calvert at 800.368.2748 for a free prospectus. An investor should consider the investment objectives, risks, charges, and expenses of an investment carefully before investing. The prospectus contains this and other information. Read it carefully before you invest or send money. Current performance may be higher or lower than the performance data quoted. Visit www.calvert.com for current month-end fund and performance information.
May lose value. Not FDIC Insured. No Bank Guarantee. Not NCUA/NCUSIF Insured. No Credit Union Guarantee.
Calvert mutual funds are underwritten and distributed by Calvert Distributors, Inc., member NASD, a subsidiary of Calvert Group, Ltd.
Social Update
from the Calvert Social Research Department
Shareholder Activism
Through shareholder activism, Calvert seeks to move companies already operating at higher levels of corporate, environmental, and social responsibility than their industry peers to even higher levels of corporate excellence. We continue our activism from last year's record-setting season, with corporate disclosure and board diversity our current focus.
Inroads on Corporate Disclosure
Negative environmental impact and product failure can cause a company to falter, collapse, or even declare bankruptcy. With information in advance of potential problems, investors can steer clear of companies in social/environmental peril, just as they can avoid investment in financially compromised firms. Fourteen of our 33 recent shareholder resolutions asked companies for sustainability reports based on Global Reporting Initiative guidelines, the standard for social and environmental reporting. We're delighted to report that we have been able to withdraw half of these resolutions because the companies agreed to report corporate, environmental, and social, in addition to financial, performance.
Board Diversity Successes
Currently, more than 88% of board members of the Russell 3000 companies come from a demographic group that accounts for just 25% of the U.S. population. With growing evidence that more diverse corporate boards are associated with better financial performance, we proudly continue into our second season of shareholder resolutions for board diversity. Of 10 resolutions filed, we have successfully withdrawn five because the companies agreed to adopt our model diversity charter, endorsed by the National Association of State Treasurers.
"Corporate Responsibility Matters"
You may be aware that in the last quarter of 2003, we launched the Corporate Responsibility Matters campaign with a special Web-based report to raise public awareness of how investors, financial advisors, and retirement plan sponsors can help work to promote healthy companies, strong markets, and sound investments. The campaign is just another example of Calvert's leadership in our industry -- and of how our company has always done business.
Portfolio Management Discussion
Thomas Hancock
of Grantham, Mayo, Van Otterloo
Performance
Calvert World Values International Equity Fund Class A shares returned 17.94% in the six-month period ended March 31, 2004. The Fund's benchmark, the MSCI EAFE Index, returned 22.27%.
Investment Climate
This was a strong period for global equities, particularly during the fourth quarter of 2003 and early January 2004. The market rally that started in March 2003 continued in full force, led by cyclicals, smaller-capitalization stocks, emerging markets, value stocks, and generally lower-quality companies. Toward the end of the period, momentum slowed with increasing concerns about valuations and, within Europe, relatively weak economies and the impact of the train bombing in Madrid.
The MSCI EAFE Index, which returned 22.27% in U.S. dollars, was well ahead of the U.S. market as measured by the S&P 500 Index, which returned 14.07%. The driving factor behind international equity outperformance was currency appreciation against the dollar. When stock prices are measured in their local currencies, the EAFE index gained only 13.7%. The appreciation of foreign currencies against the dollar made up the difference.
Portfolio Statistics
March 31, 2004
Investment Performance
(total return at NAV)
6 Months | 12 Months | |
ended | ended | |
3/31/04 | 3/31/04 | |
Class A | 17.94% | 46.67% |
Class B | 17.22% | 44.87% |
Class C | 17.47% | 45.38% |
Class I | 18.45% | 47.93% |
MSCI EAFE Index GD | 22.27% | 58.15% |
Lipper International Funds Avg | 20.77% | 53.63% |
Ten Largest Stock Holdings
% of Net Assets | |
ING Groep NV | 2.1% |
Barclays plc | 2.0% |
Next Group plc | 1.8% |
Aviva plc | 1.7% |
Telefonaktiebolaget LM Ericsson | 1.7% |
Acom Co. Ltd | 1.6% |
Kobe Steel Ltd | 1.5% |
Mizuho Financial Group, Inc. | 1.5% |
DaiiChi Pharmaceutical Co. Ltd | 1.5% |
Scottish & Southern Energy plc | 1.4% |
Total | 16.8% |
Asset Allocation
Stocks | 94% |
Bonds & Notes | 2% |
Cash & Cash Equivalents | 4% |
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
March 31, 2004
Average Annual Total Returns
(with max. load)
Class A Shares | |
One year | 39.74% |
Five year | (2.30%) |
Ten year | 3.00% |
Class B Shares | |
One year | 39.87% |
Five year | (2.81%) |
Since inception | (2.01%) |
(4/1/98) | |
Class C Shares | |
One year | 44.38% |
Five year | (2.32%) |
Ten year | 2.44% |
Class I Shares | |
One year | 47.93% |
Five year | (0.49%) |
Since inception | 0.23% |
(3/1/99) |
Within developed markets, Japanese equities were relatively strong, particularly toward the end of the period, as investors started to show some faith in the government's management of the economy. But emerging markets were the stars. The S&P/IFC Investable Index of emerging markets returned 29.7% over the period and 85.4% over the 12-month period ended March 31, 2004. The emergence of China, improved conditions in Latin America, and general political and economic stability have all helped raise these markets from the cheap valuation levels at which they had been trading.
Sector performance was relatively narrow over the period. Cyclicals generally did well, with Technology, Industrial, and Material stocks all outperforming, along with Financials. It was not, however, a clean sweep for cyclicals, as more defensive Utility stocks also did well. Energy stocks delivered a mixed performance and underperformed in aggregate. The traditionally high-quality defensive sectors of Pharmaceuticals and Consumer Staples lagged most dramatically.
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.
Portfolio Strategy
Country allocation was positive relative to the benchmark, due largely to the Fund's exposure to emerging markets. In particular, allocations to Korea, Indonesia, and Argentina helped boost returns. Developed markets were less successful, with an overweighting in the German market hurting returns. Two of the more attractive smaller markets, Austria and Norway, helped the portfolio.
Most of the underperformance against the benchmark came from individual security selection. The largest negative impact, costing the Fund -1.4%, was the holding in Italian dairy company, Parmalat. Parmalat surprised investors in November by suffering cash flow difficulties despite reportedly large amounts of cash on its balance sheet. The company then shocked investors and regulators in December with revelations of massive, long-standing fraud that led to the bankruptcy of the company and the arrest of several officers at both the firm and its former auditor, Grant Thornton. When the first wave of bad news hit in November, your portfolio management team evaluated the position and chose not to liquidate based on the view -- obviously incorrect in hindsight - -- that the markets had over-reacted to the liquidity concerns. While there appeared to be only a short-term liquidity crunch, our feeling was that the company would be able to get intermediate financing, that the long-term business was real and solid, and that because investors could be expected to over-react, trying to sell the position during a rush of selling would be unwise. When the scope of the fraud was revealed, the stock had ceased trading.
Other less successful picks included UK Industrial, Invensys, Volkswagen, and Singaporean tech stock ST Assembly. The Fund benefited from some of its positions in Japanese financials, most significantly Mizuho Financial, which nearly doubled in value over the period. Acom and UFJ also performed strongly, as did Nortel Networks and UK housing company Barratt Developments.
Currency allocation was also negative, partly due to residual holdings in the U.S. dollar through small cash positions. While the portfolio is generally fully invested in foreign currencies, the negative impact of these holdings was close to 0.25% over the period. The portfolio also suffered from a tilt away from the UK pound toward cheaper currencies and from exposure -- through equity holdings -- to emerging markets currencies that did not gain as strongly against the dollar as did major market currencies.
Portfolio Statistics
Country Allocation | |||
% of Equity Securities | |||
3/31/04 | 9/30/03 |
| |
Argentina | 0.3% | 0.5% |
|
Australia | 3.8% | 3.7% | |
Austria | 1.3% | 1.3% | |
Belgium | 4.2% | 1.7% | |
Brazil | 1.1% | 1.4% | |
Canada | 0.8% | 2.1% | |
Chile | 0.1% | 0.1% | |
Czech Republic | 0.1% | 0.2% | |
Finland | 0.5% | 1.4% | |
France | 3.1% | 7.0% | |
Germany | 8.8% | 5.0% | |
Greece | 1.4% | 0.9% | |
Hong Kong | 0.7% | 0.6% | |
Hungary | 0.2% | 0.3% | |
India | 0.7% | 1.1% | |
Indonesia | 0.6% | 0.6% | |
Ireland | -- | 2.0% | |
Israel | 0.3% | 0.5% | |
Italy | 1.4% | 3.8% | |
Japan | 23.7% | 21.8% | |
Mexico | 0.7% | 0.8% | |
Netherlands | 6.2% | 3.8% | |
Norway | 1.3% | 1.5% | |
Philippines | 0.2% | 0.2% | |
Poland | 0.3% | 0.2% | |
Russia | 0.2% | 0.3% | |
Singapore | 1.5% | 1.3% | |
South Africa | 1.4% | 1.3% | |
South Korea | 1.0% | 1.1% | |
Spain | 2.7% | 3.1% | |
Sweden | 1.9% | 0.9% | |
Switzerland | 3.6% | 2.9% | |
Taiwan | 0.7% | 0.9% | |
Thailand | 0.6% | 0.8% | |
Turkey | 0.3% | 0.2% | |
United Kingdom | 23.0% | 22.9% | |
United States | 1.3% | 1.8% | |
100% | 100% |
Outlook
As more cyclical stocks and those of lower quality continue upward to higher valuation levels, the risks associated with their sectors increase as well. Should Japan and Europe recover, those sectors will continue to do well, but if the economies lose momentum, the results could be painful. A year ago, when valuations for cyclicals were attractive, this was a risk that was worth taking. Today, however, a number of more defensive, higher-quality stocks with histories of strong growth are available at reasonable prices or even at a discount to the broad market. It is dangerous to fight the momentum in the market, but we expect a more defensive tilt to become appealing as the year progresses. Generally, international stocks enjoy the benefit of a valuation discount to the U.S. market, so we view diversification overseas as likely to both enhance return and reduce risk. Currency appreciation is not likely to be the benefit it was in 2003, but the size of the U.S. current-account deficit suggests that over the long term, foreign currencies are likely to gain against the dollar.
April 2004
Past performance is no guarantee of future results. The investment return and principal value of an investor's shares, when redeemed, may be worth more or less than their original cost. For more information on any Calvert fund, please contact your financial advisor or call Calvert at 800.368.2748 for a free prospectus. An investor should consider the investment objectives, risks, charges, and expenses of an investment carefully before investing. The prospectus contains this and other information. Read it carefully before you invest or send money. Current performance may be higher or lower than the performance data quoted. Visit www.calvert.com for current month-end fund and performance information.
May lose value. Not FDIC Insured. No Bank Guarantee. Not NCUA/NCUSIF Insured. No Credit Union Guarantee.
Calvert mutual funds are underwritten and distributed by Calvert Distributors, Inc., member NASD, a subsidiary of Calvert Group, Ltd.
Schedule of Investments
March 31, 2004
Equity Securities - 88.6% | Shares | Value | ||
Argentina - 0.3% | ||||
Grupo Financiero Galicia SA (ADR) (Class B)* | 60,000 | $510,000 | ||
Telecom Argentina SA (ADR) (Class B)* | 31,800 | 338,670 | ||
848,670 | ||||
Australia - 3.4% | ||||
Australia and New Zealand Banking Group Ltd | 136,705 | 1,977,251 | ||
Macquarie Bank Ltd | 54,108 | 1,477,690 | ||
National Australia Bank Ltd | 143,044 | 3,382,754 | ||
Telstra Corp. Ltd | 668,781 | 2,316,215 | ||
9,153,910 | ||||
Austria - 1.2% | ||||
Erste Bank der oesterreichischen Sparkassen AG | 8,284 | 1,240,303 | ||
Mayr-Melnhof Karton AG | 15,714 | 1,973,174 | ||
3,213,477 | ||||
Belgium - 3.7% | ||||
Dexia | 197,698 | 3,433,877 | ||
Fortis SA/NV |
| 151,684 | 3,225,717 | |
UCB SA | 87,960 | 3,381,064 | ||
10,040,658 | ||||
Brazil - 0.9% | ||||
Banco Itau Holding Financiera SA (ADR) | 11,300 | 528,501 | ||
Gerdau SA (ADR) | 30,020 | 699,466 | ||
Tele Centro Oeste Celular Participacoes SA (ADR) | 43,500 | 499,815 | ||
Tele Norte Leste Participacoes (ADR) | 27,900 | 362,142 | ||
Unibanco - Uniao de Bancos Brasileiros SA (GDR) | 18,800 | 460,036 | ||
2,549,960 | ||||
Canada - 0.8% | ||||
Nortel Networks Corp. | 349,700 | 2,057,922 | ||
Chile - 0.0% | ||||
Cia de Telecomunicaciones de Chile SA (ADR) | 11,700 | 143,910 | ||
Czech Republic - 0.1% | ||||
Ceske Radiokomunikace AS (GDR) | 16,800 | 308,502 | ||
Finland - 0.5% | ||||
TietoEnator Oyj | 42,880 | 1,306,687 | ||
France - 2.8% | ||||
BNP Paribas SA | 32,688 | 1,998,238 | ||
France Telecom SA* | 125,046 | 3,200,301 | ||
Havas SA | 289,183 | 1,546,330 | ||
Societe Generale Groupe | 8,588 | 733,698 | ||
7,478,567 | ||||
Equity Securities - Cont'd | Shares | Value | ||
Germany - 7.8% | ||||
Continental AG | 47,459 | $1,868,014 | ||
Deutsche Bank AG | 32,813 | 2,728,689 | ||
Deutsche Post AG | 97,749 | 2,186,875 | ||
Deutsche Telekom AG* | 158,076 | 2,840,885 | ||
METRO AG | 36,175 | 1,549,270 | ||
SAP AG | 20,784 | 3,286,845 | ||
Schering AG* | 33,752 | 1,597,767 | ||
Volkswagen AG: | ||||
Ordinary | 62,506 | 2,730,734 | ||
Non-Voting Preferred | 80,883 | 2,391,182 | ||
21,180,261 | ||||
Greece - 1.2% | ||||
National Bank of Greece SA | 124,096 | 3,294,973 | ||
Hong Kong - 0.6% | ||||
Bank of East Asia Ltd | 585,800 | 1,770,322 | ||
Hungary - 0.2% | ||||
OTP Bank Rt (GDR)* | 12,300 | 464,325 | ||
India - 0.7% | ||||
Bajaj Auto Ltd (GDR) | 13,575 | 319,013 | ||
GAIL India Ltd. (GDR) | 10,900 | 325,365 | ||
ICICI Bank Ltd (ADR) | 27,780 | 443,091 | ||
Ranbaxy Laboratories Ltd (GDR) | 9,600 | 218,880 | ||
Satyam Computer Services Ltd (ADR) | 13,500 | 277,020 | ||
State Bank of India Ltd (GDR) | 5,089 | 198,471 | ||
1,781,840 | ||||
Indonesia - 0.5% | ||||
PT Bank Mandiri Tbk | 1,860,000 | 304,081 | ||
PT Indonesian Satellite Corp. Tbk* | 1,390,000 | 624,920 | ||
PT Unilever Indonesia Tbk | 1,211,000 | 502,020 | ||
1,431,021 | ||||
Israel - 0.2% | ||||
Check Point Software Technologies Ltd* | 10,400 | 236,808 | ||
Teva Pharmaceutical Industries Ltd (ADR) | 6,200 | 393,142 | ||
629,950 | ||||
Italy - 1.2% | ||||
Enel SpA | 403,263 | 3,261,779 | ||
Parmalat Finanziaria SpA (b) | 883,096 | 10,856 | ||
3,272,635 | ||||
Japan - 21.0% | ||||
Acom Co. Ltd | 59,982 | 4,375,517 | ||
Canon, Inc. | 46,000 | 2,379,805 | ||
Daiichi Pharmaceutical Co. Ltd | 205,000 | 3,974,660 | ||
Eisai Co, Ltd. | 49,000 | 1,326,295 | ||
Furukawa Electric Co. Ltd | 868,000 | 3,374,190 | ||
Kao Corp. | 63,000 | 1,439,171 | ||
Equity Securities - Cont'd | Shares | Value | ||
Japan - Cont'd | ||||
Kawasaki Kisen Kaisha Ltd | 439,000 | $2,275,376 | ||
KDDI Corp. | 323 | 1,819,849 | ||
Kobe Steel Ltd | 2,616,000 | 3,992,360 | ||
Mazda Motor Corp. | 714,067 | 2,378,281 | ||
Mitsui OSK Lines Ltd | 357,000 | 1,836,656 | ||
Mizuho Finanical Group, Inc. | 927 | 3,986,140 | ||
Nippon Express Co. Ltd | 246,000 | 1,525,325 | ||
Nitto Denko Corp. | 42,500 | 2,333,349 | ||
Osaka Gas Co.,Ltd | 465,000 | 1,388,060 | ||
Sharp Corp. | 112,000 | 1,998,445 | ||
Sony Corp. | 47,900 | 2,004,550 | ||
Takefuji Corp. | 41,870 | 2,913,639 | ||
TDK Corp. | 27,500 | 2,098,431 | ||
Terumo Corp. | 110,300 | 2,392,648 | ||
Tokyo Electron Ltd | 26,600 | 1,774,440 | ||
Toyota Motor Corp. | 53,600 | 1,996,141 | ||
UFJ Holdings, Inc.* | 324 | 2,058,722 | ||
Yamanouchi Pharmaceutical Co. Ltd | 37,900 | 1,302,318 | ||
56,944,368 | ||||
Mexico - 0.7% | ||||
America Movil, SA de CV (ADR) | 17,100 | 660,915 | ||
Cemex, SA de CV (ADR) | 17,600 | 524,832 | ||
Empresas ESM, SA de CV (a)(b)(i)* | 2,989 | 50,000 | ||
Telefonos de Mexico, SA de CV (ADR) | 15,900 | 555,069 | ||
1,790,816 | ||||
Netherlands - 5.5% | ||||
Aegon NV | 161,624 | 2,066,234 | ||
ASML Holding NV* | 84,511 | 1,548,928 | ||
Buhrmann NV* | 248,280 | 2,243,207 | ||
ING Groep NV | 262,844 | 5,777,047 | ||
Philips Electronics NV | 113,491 | 3,282,643 | ||
14,918,059 | ||||
Norway - 1.2% | ||||
DNB NOR ASA | 487,430 | 3,197,800 | ||
Philippines - 0.1% | ||||
First Philippine Holding Corp.* | 203,000 | 73,178 | ||
Globe Telecom, Inc. | 23,001 | 335,751 | ||
408,929 | ||||
Poland - 0.2% | ||||
Bank Pekao SA (GDR) | 11,000 | 369,380 | ||
Telekomunikacja Polska SA (GDR) | 74,500 | 300,235 | ||
669,615 | ||||
Russia - 0.2% | ||||
VimpelCom (ADR)* | 4,200 | 436,758 | ||
Equity Securities - Cont'd | Shares | Value | ||
Singapore - 1.3% | ||||
Chartered Semiconductor Manufacturing Ltd* | 1,721,000 | $1,624,167 | ||
Haw Par Corp. Ltd | 49,006 | 143,429 | ||
Overseas-Chinese Banking Corp., Ltd | 259,000 | 1,902,819 | ||
3,670,415 | ||||
South Africa - 1.2% | ||||
Alexander Forbes Ltd | 154,800 | 250,291 | ||
Bidbee Ltd* | 7,614 | 46,527 | ||
BIDVest Group Ltd.: | ||||
Common | 46,085 | 379,872 | ||
Warrants* (strike price 6,000 ZAR/share, expires 12/8/06) | 3,045 | 3,041 | ||
Community Growth Fund | 894,098 | 437,021 | ||
Investec Ltd | 19,387 | 385,988 | ||
Nedcor Ltd | 37,323 | 378,052 | ||
Old Mutual plc. | 175,000 | 324,285 | ||
Pick 'n Pay Holdings Ltd | 61,200 | 81,005 | ||
Pick'n Pay Stores Ltd | 82,600 | 235,682 | ||
Tiger Brands Ltd | 21,000 | 286,280 | ||
VenFin Ltd | 149,600 | 497,758 | ||
3,305,802 | ||||
South Korea - 0.9% | ||||
Kookmin Bank (ADR)* | 21,100 | 853,706 | ||
KT Corp. (ADR) | 40,991 | 780,468 | ||
SK Telecom Co. Ltd (ADR) | 38,019 | 809,805 | ||
2,443,979 | ||||
Spain - 2.4% | ||||
Banco Santander Central Hispano, SA | 148,801 | 1,618,786 | ||
Gas Natural SDG, SA | 110,949 | 2,767,233 | ||
Telefonica SA* | 134,249 | 2,031,465 | ||
6,417,484 | ||||
Sweden - 1.7% | ||||
Telefonaktiebolaget LM Ericsson* | 1,626,000 | 4,502,305 | ||
Switzerland - 3.2% | ||||
Credit Suisse Group | 88,809 | 3,076,516 | ||
Swisscom AG | 10,542 | 3,460,621 | ||
Zurich Financial Services Group AG* | 13,696 | 2,158,829 | ||
8,695,966 | ||||
Taiwan - 0.6% | ||||
Taiwan Semiconductor Manufacturing Co. Ltd. (ADR)* | 85,284 | 890,365 | ||
United Microelectronics Corp. (ADR)* | 135,666 | 705,463 | ||
1,595,828 | ||||
Equity Securities - Cont'd | Shares | Value | ||
Thailand - 0.5% | ||||
Bangkok Bank PCL* | 103,300 | $240,845 | ||
Charoen Pokphand Foods PCL: | ||||
Common | 413,000 | 66,299 | ||
Non-Voting Depository Receipt | 1,529,000 | 245,450 | ||
Electricity Generating PCL: | ||||
Common | 161,700 | 284,299 | ||
Non-Voting Depository Receipt | 5,000 | 8,536 | ||
Kiatnakin Finance PCL | 97,000 | 101,338 | ||
Land and Houses PCL | 738,900 | 218,403 | ||
National Finance PCL | 636,500 | 248,145 | ||
1,413,315 | ||||
Turkey - 0.3% | ||||
Turkcell Iletisim Hizmet AS (ADR)* | 20,900 | 747,175 | ||
United Kingdom - 20.4% | ||||
Abbey National plc | 196,484 | 1,645,368 | ||
Aviva plc | 484,458 | 4,707,761 | ||
AWG plc* | 218,755 | 2,210,318 | ||
Barclays plc | 599,857 | 5,290,956 | ||
Barratt Developments plc | 294,193 | 3,367,806 | ||
Boots Group plc | 303,939 | 3,465,390 | ||
BT Group plc | 673,198 | 2,193,009 | ||
Dixons Group plc | 1,001,697 | 2,839,105 | ||
GlaxoSmithKline plc | 137,274 | 2,698,260 | ||
HSBC Holdings plc | 126,422 | 1,882,329 | ||
Invensys plc* | 9,849,051 | 3,534,706 | ||
ITV plc | 813,696 | 1,995,509 | ||
Next Group plc | 189,932 | 4,998,716 | ||
Northern Foods plc | 401,156 | 1,188,676 | ||
Royal & Sun Alliance Insurance Group plc | 1,057,667 | 1,596,199 | ||
Scottish & Southern Energy plc | 292,941 | 3,706,613 | ||
Scottish Power plc | 445,559 | 3,122,263 | ||
United Utilities plc | 251,469 | 2,402,017 | ||
Vodafone Group plc | 1,022,440 | 2,422,754 | ||
55,267,755 | ||||
United States - 1.1% | ||||
Distributed Energy Systems Corp.: | ||||
Common Stock* | 444,861 | 1,476,939 | ||
Warrants (strike price $2.80/share, expires 12/17/06)* | 23,587 | 12,265 | ||
Contingent Deferred Distribution: | ||||
Cash Tranche 1 (b)(i)* | 89,169 | 69,607 | ||
Cash Tranche 2 (b)(i)* | 44,584 | 33,259 | ||
Stock Tranche 1 (b)(i)* | 12,485 | 30,135 | ||
Stock Tranche 2 (b)(i)* | 6,242 | 13,029 | ||
Escrowed: | ||||
Stock Lockup (b)(i)* | 79,589 | 257,868 | ||
Warrant Lockup Tranche 2 | ||||
(strike price $2.80/share, expires 12/17/06) (b)(i)* | 70,759 | 31,134 | ||
Evergreen Solar Inc.* | 2,732 | 6,557 | ||
Equity Securities - Cont'd | Shares | Value | ||
United States - Cont'd | ||||
H2Gen Innovations, Inc.: | ||||
Series A, Preferred (b)(i)* | 251,496 | $251,496 | ||
Series A, Preferred Warrants | ||||
(strike price $1.00/share, expires 1/1/12) (b)(i)* | 20,833 | -- | ||
Series B, Preferred Warrants (expires 10/31/13) (b)(i)* | 19,656 | -- | ||
Mayer Laboratories, Inc. Warrants | ||||
(strike price $6.50/share, expires 12/31/07) (b)(i)* | 11,538 | -- | ||
Powerspan Corp.: | ||||
Series A (Preferred) (b)(i)* | 45,455 | 148,437 | ||
Series B (Preferred) (b)(i)* | 20,000 | 37,873 | ||
Pro Fund International SA: | ||||
(Common) (b)(i)* | 2,500 | -- | ||
(Preferred) (b)(i)* | 197,393 | 120,594 | ||
RF Technology, Inc.: | ||||
Series A (Preferred) (b)(i)* | 53,844 | 1 | ||
Preferred Warrants (strike price $0.01/share, expires 7/1/04) (b)(i)* | 15,384 | -- |
| |
SMARTHINKING, Inc.: | ||||
Series 1-A, Convertible Preferred (b)(i)* | 44,699 | 68,314 | ||
Series 1-B, Convertible Preferred (b)(i)* | 163,588 | 31,050 | ||
Warrants (strike price $1.53/share, expires 10/20/05) (b)(i)* |
| 32,726 | -- | |
Soluz Dominicana, Inc. (b)(i)* | 290,000 | 5,895 | ||
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 | ||
Series D (Preferred) (b)(i)* | 380,953 | 114,286 | ||
Common Warrants (strike price $0.01/share, expires 8/15/12) (b)(i)* | 23,148 | -- | ||
Preferred Warrants (strike price $0.01/share, expires 12/24/13) (b)(i)* | 190,477 | -- | ||
3,087,132 | ||||
Total Equity Securities (Cost $209,018,697) | 240,441,091 |
Adjusted | |||
Limited Partnership Interest - 0.4% | Basis | ||
SEAF Central & Eastern European Growth Fund LLC (a)(b)(i)* | $884,290 | 799,457 | |
SAM Sustainability Private Equity Fund, LP (b)(i)* | 587,836 | 312,024 | |
Terra Capital Investments, Inc. (b)(i)* | 322,050 | 1 | |
Total Limited Partnership Interest (Cost $1,760,504) | 1,111,482 | ||
Principal | |||
Corporate Notes - 0.1% | Amount |
| |
H2Gen Innovations, Inc.: | |||
Series B Bridge Note Tranche 1, 10.00%, 4/30/04 (b)(i) | 29,483 | 29,483 | |
Series B Bridge Note Tranche 2, 10.00%, 4/30/04 (b)(i) | 29,483 | 29,483 | |
Mayer Laboratories, Inc., 6.00%, 12/31/04 (b)(e)(i) | 119,000 | 29,750 | |
Powerspan Corp., 10.00%, 12/20/04 (b)(i) | 245,000 | 245,000 | |
Total Corporate Notes (Cost $422,967) | 333,716 | ||
Principal | |||
High Social Impact Investments - 1.4% | Amount | Value | |
Calvert Social Investment Foundation Notes, | |||
1.74%, 7/1/05 (b)(i) | $3,738,819 | $3,707,862 | |
Total High Social Impact Investments (Cost $3,738,819) | 3,707,862 | ||
Certificates of Deposit - 0.1% | |||
Self Help Credit Union, 1.44%, 2/23/05 (b)(k) | 100,000 | 99,880 | |
Shore Bank, 2.20%, 3/15/05 (b)(k) | 100,000 | 99,820 | |
Total Certificates of Deposit (Cost $200,000) | 199,700 | ||
U.S. Government Agencies | |||
and Instrumentalities - 3.8% | |||
Federal Home Loan Bank Discount Notes, 4/1/04 | 10,300,000 | 10,300,000 | |
Total U.S. Government Agencies | |||
and Instrumentalities (Cost $10,300,000) | 10,300,000 | ||
U.S. Treasury - 0.6% | |||
United States Treasury Bill, 0.99%, 9/23/04 (l) | 1,535,000 | 1,527,762 | |
Total U.S. Treasury (Cost $1,527,762) | 1,527,762 | ||
Total Investments (Cost $226,968,749) - 95.0% | 257,621,613 | ||
Other assets and liabilities, net - 5.0% | 13,648,303 | ||
Net Assets - 100% | $271,269,916 |
Abbreviations:
ADR: American Depository Receipt | LP: Limited Partnership | |
GDR: Global Depository Receipt | PCL: Public Company Limited | |
LLC: Limited Liability Corporation |
* Non-income producing security.
(a) Affiliated company.
(b) This security was valued by the Board of Directors. See Note A.
(e) Security is a defaulted security.
(i) Restricted securities represent 2.5% of net assets of the Fund.
(k) These certificates of deposit are fully insured by agencies of the federal government.
(l) Collateral for futures contracts.
See notes to financial statements.
Forward Foreign Currency Contracts, Open at March 31, 2004 | |||||
Contracts to Receive/ Deliver | In Exchange For | Settlement Date | Contract Value (US$) | Unrealized Appreciation/ Depreciation (US$) | |
Purchases | |||||
Australian Dollar | 533,689 US Dollars | $396,836 | 28-May-04 | 404,298 | $7,462 |
Swiss Franc | 3,087,051 US Dollars | 2,461,838 | 28-May-04 | 2,439,327 | (22,511) |
Swiss Franc | 3,087,051 US Dollars | 2,458,544 | 28-May-04 | 2,439,327 | (19,217) |
Swiss Franc | 3,087,051 US Dollars | 2,459,919 | 28-May-04 | 2,439,327 | (20,592) |
Swiss Franc | 3,087,051 US Dollars | 2,458,527 | 28-May-04 | 2,439,327 | (19,200) |
Swiss Franc | 3,087,051 US Dollars | 2,459,907 | 28-May-04 | 2,439,327 | (20,580) |
Euro | 1,211,436 US Dollars | 1,479,481 | 28-May-04 | 1,486,949 | 7,468 |
Euro | 2,726,783 US Dollars | 3,366,377 | 28-May-04 | 3,346,926 | (19,451) |
British Pound | 2,294,455 US Dollars | 4,160,783 | 28-May-04 | 4,201,649 | 40,866 |
British Pound | 440,845 US Dollars | 787,149 | 28-May-04 | 807,282 | 20,133 |
Total Purchases | ($45,622) | ||||
Sales | |||||
Australian Dollar | 590,640 US Dollars | $451,249 | 28-May-04 | 447,441 | $3,808 |
Swiss Franc | 1,599,780 US Dollars | 1,302,863 | 28-May-04 | 1,264,115 | 38,748 |
Swiss Franc | 5,427,240 US Dollars | 4,189,026 | 28-May-04 | 4,288,499 | (99,473) |
Euro | 2,735,016 US Dollars | 3,496,710 | 28-May-04 | 3,357,031 | 139,679 |
British Pound | 688,231 US Dollars | 1,290,076 | 28-May-04 | 1,260,302 | 29,774 |
British Pound | 826,766 US Dollars | 1,520,258 | 28-May-04 | 1,513,990 | 6,268 |
British Pound | 826,766 US Dollars | 1,518,222 | 28-May-04 | 1,513,990 | 4,232 |
Japanese Yen | 9,010,400 US Dollars | 83,335 | 28-May-04 | 86,638 | (3,303) |
Total Sales | ($119,733) | ||||
Total Net Unrealized Appreciation | $229,938 |
Underlying | Unrealized | |||
# of | Expiration | Face Amount | Appreciation | |
Futures* | Contracts | Date | at Value | (Depreciation) |
Purchased: | ||||
CAC 40 Index | 157 | 4/04 | $7,003,624 | $64,928 |
DAX Index | 48 | 6/04 | 5,718,072 | 22,504 |
FTSE 100 Index | 14 | 6/04 | 1,131,344 | (6,387) |
SGX MSCI Singapore | 8 | 4/04 | 215,242 | 3,270 |
Total Purchased |
| $84,315 | ||
Sold: | ||||
SFE SPI 200 Equity Index | 104 | 6/04 | $6,788,597 | ($8,316) |
Total Sold | ($8,316) |
* Futures collateralized by 1,535,000 units of U.S. Treasury Bills.
See notes to financial statements.
Restricted securities | Acquisition Dates | Cost |
Calvert Social Investment Foundation Notes, 1.74%, 7/1/05 | 07/01/02 - 01/21/03 | $3,738,819 |
Distributed Energy Systems Corp.: | ||
Contingent Deferred Distribution: | ||
Cash Tranche 1 | 01/06/04 | 89,169 |
Cash Tranche 2 | 01/06/04 | 44,584 |
Stock Tranche 1 | 01/06/04 | 34,833 |
Stock Tranche 2 | 01/06/04 | 17,415 |
Escrowed: | ||
Stock Lockup | 01/06/04 | 222,053 |
Warrant Lockup Tranche 2 | ||
(strike price $2.80/share, expires 12/17/06) | 01/06/04 | -- |
Empresas ESM, SA de CV | 10/25/01 - 10/29/02 | 350,000 |
H2Gen Innovations, Inc.: | ||
Series A, Preferred | 12/30/02 | 251,496 |
Series A, Preferred Warrants | ||
(strike price $1.00/share, expires 1/1/12) | 11/07/02 | -- |
Series B, Preferred Warrants (expires 10/31/13) | 11/06/03 - 02/02/04 | -- |
Series B Bridge Note Tranche 1, 10.00%, 4/30/04 | 11/06/03 | 29,483 |
Series B Bridge Note Tranche 2, 10.00%, 4/30/04 | 02/02/04 | 29,483 |
Mayer Laboratories, Inc.: | ||
Note, 6.00%, 12/31/04 | 12/31/96 | 119,000 |
Warrants (strike price $6.50/share, expires 12/31/07) | 01/21/03 | -- |
Powerspan Corp.: | ||
Note, 10.00%, 12/20/04 | 04/20/04 | 245,000 |
Series A (Preferred) | 08/20/97 | 250,000 |
Series B (Preferred) | 10/05/99 | 200,000 |
ProFund International SA: | ||
Common | 08/29/95 - 05/25/99 | 2,500 |
Preferred | 08/29/95 - 05/25/99 | 197,392 |
RF Technology, Inc.: | ||
Series A (Preferred) | 07/16/99 - 03/23/01 | 299,990 |
Preferred Warrants | ||
(strike price $0.01/share, expires 7/1/04) | 03/23/01 | 50,000 |
SAM Sustainability Private Equity Fund, LP | 07/19/01 - 03/26/04 | 559,072 |
SEAF Central & Eastern European Growth Fund LLC | 08/10/00 - 08/18/03 | 879,382 |
SMARTTHINKING, Inc.: | ||
Series 1-A, Convertible Preferred | 04/22/03 - 05/08/03 | 68,314 |
Series 1-B, Convertible Preferred | 06/10/03 | 250,000 |
Warrants (strike price $1.53/share, expires 10/20/05) | 06/10/03 | -- |
Soluz Dominicana, Inc. | 12/24/03 | 290,000 |
Terra Capital Investments, Inc. | 11/23/98 - 11/13/03 | 322,050 |
Wellspring International, Inc.: | ||
Series A (Preferred) | 03/23/00 | 200,000 |
Series B (Preferred) | 11/28/00 - 06/22/01 | 274,997 |
Series C (Preferred) | 10/30/02 - 11/22/02 | 150,000 |
Series D (Preferred) | 02/10/04 | 114,286 |
Common Warrants | ||
(strike price $0.01/share, expires 8/15/12) | 08/16/02 | 11,900 |
Preferred Warrants | ||
(strike price $0.01/share, expires 12/24/13) | 12/23/03 | -- |
See notes to financial statements.
Statement of Assets and Liabilities
March 31, 2004
Assets | Value | |
Investments in securities, at value (Cost $226,968,749) - | ||
see accompanying schedule | $257,621,613 | |
Cash | 495,984 | |
Unrealized appreciation on forward foreign currency contracts | 298,438 | |
Receivable for shares sold | 12,591,044 | |
Receivable for futures variation margin | 30,050 | |
Interest and dividends receivable | 1,043,195 | |
Other assets | 134,732 | |
Total assets | 272,215,056 | |
Liabilities | ||
Payable for shares redeemed | 147,050 | |
Payable to Calvert Asset Management Co., Inc. | 275,540 | |
Payable to Calvert Administrative Services Co. | 69,938 | |
Payable to Calvert Shareholder Services, Inc. | 14,155 | |
Payable to Calvert Distributors, Inc. | 61,100 | |
Unrealized depreciation on forward foreign currency contracts | 224,327 | |
Accrued expenses and other liabilities | 153,030 | |
Total liabilities | 945,140 | |
Net Assets | $271,269,916 | |
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: 11,948,637 shares outstanding | $198,342,185 | |
Class B: 549,134 shares outstanding | 10,154,094 | |
Class C: 944,458 shares outstanding | 15,983,158 | |
Class I: 2,547,960 shares outstanding | 51,980,930 | |
Undistributed net investment income (loss) | (242,383) | |
Accumulated net realized gain (loss) on investments | (35,815,881) | |
Net unrealized appreciation (depreciation) on investments | 30,867,813 | |
Net Assets | $271,269,916 | |
Net Asset Value Per Share | ||
Class A (based on net assets of $202,864,333) | $16.98 | |
Class B (based on net assets of $8,643,915) | $15.74 | |
Class C (based on net assets of $14,471,097) | $15.32 | |
Class I (based on net assets of $45,290,571) | $17.78 |
See notes to financial statements.
Statement of Operations
Six Months Ended March 31, 2004
Net Investment Income | ||
Investment Income: | ||
Dividend income (net of foreign taxes withheld of $242,426) | $2,218,303 | |
Interest income | 71,086 | |
Total investment income | 2,289,389 | |
Expenses: | ||
Investment advisory fee | 883,180 | |
Transfer agency fees and expenses | 343,514 | |
Distribution Plan expenses: | ||
Class A | 236,371 | |
Class B | 37,483 | |
Class C | 61,674 | |
Directors' fees and expenses | 26,050 | |
Administrative fees | 385,615 | |
Custodian fees | 211,259 | |
Registration fees | 26,048 | |
Reports to shareholders | 62,374 | |
Professional fees | 16,130 | |
Miscellaneous | 35,726 | |
Total expenses | 2,325,424 | |
Reimbursement from Advisor: | ||
Class I | (17,264) | |
Fees paid indirectly | (17,090) | |
Net expenses | 2,291,070 | |
Net Investment Income (Loss) | (1,681) | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investments | 16,673,339 | |
Foreign currency transactions | 436,649 | |
Futures | 270,319 | |
17,380,307 | ||
Change in unrealized appreciation or (depreciation) on: | ||
Investments and foreign currencies | 18,718,177 | |
Assets and liabilities denominated in foreign currencies | (139,768) | |
Futures | 814,832 | |
19,393,241 | ||
Net Realized and Unrealized Gain | ||
(Loss) | 36,773,548 | |
Increase (Decrease) in Net Assets | ||
Resulting From Operations | $36,771,867 |
See notes to financial statements.
Statements of Changes in Net Assets
Six Months Ended | Year Ended | |
March 31, | September 30, | |
Increase (Decrease) in Net Assets | 2004 | 2003 |
Operations: | ||
Net investment income (loss) | ($1,681) | $1,099,131 |
Net realized gain (loss) | 17,380,307 | (9,358,026) |
Change in unrealized appreciation or (depreciation) | 19,393,241 | 40,772,578 |
Increase (Decrease) in Net Assets | ||
Resulting From Operations | 36,771,867 | 32,513,683 |
Distributions to shareholders from | ||
Net investment income: | ||
Class A Shares | (1,991,042) | (648,785) |
Class B Shares | (78,031) | (22,167) |
Class C Shares | (127,694) | (36,190) |
Class I Shares | (240,952) | (30,094) |
Total distributions | (2,437,719) | (737,236) |
Capital share transactions: | ||
Shares sold: | ||
Class A Shares | 29,744,361 | 73,404,754 |
Class B Shares | 1,648,575 | 1,817,241 |
Class C Shares | 3,227,203 | 2,392,549 |
Class I Shares | 24,788,059 | 10,982,600 |
Reinvestment of distributions: | ||
Class A Shares | 1,822,458 | 594,397 |
Class B Shares | 67,921 | 19,341 |
Class C Shares | 115,327 | 33,081 |
Class I Shares | 240,952 | 29,276 |
Redemption fees: | ||
Class A Shares | 20,568 | 63,089 |
Shares redeemed: | ||
Class A Shares | (19,401,230) | (69,095,200) |
Class B Shares | (291,837) | (1,017,597) |
Class C Shares | (355,883) | (1,216,412) |
Class I Shares | (1,354,747) | (394,192) |
Total capital share transactions | 40,271,727 | 17,612,927 |
Total Increase (Decrease) in Net Assets | 74,605,875 | 49,389,374 |
Net Assets | ||
Beginning of period | 196,664,041 | 147,274,667 |
End of period (including undistributed net investment income | ||
(loss) of ($242,383) and $2,197,017, respectively.) | $271,269,916 | $196,664,041 |
See notes to financial statements.
Statements of Changes in Net Assets
Six Months Ended | Year Ended | |
March 31, | September 30, | |
Capital Share Activity | 2004 | 2003 |
Shares sold: | ||
Class A Shares | 1,829,160 | 5,754,470 |
Class B Shares | 108,715 | 146,384 |
Class C Shares | 219,938 | 202,140 |
Class I Shares | 1,426,120 | 735,993 |
Reinvestment of distributions: | ||
Class A Shares | 113,405 | 47,177 |
Class B Shares | 4,546 | 1,630 |
Class C Shares | 7,942 | 2,870 |
Class I Shares | 14,351 | 2,243 |
Shares redeemed: | ||
Class A Shares | (1,178,856) | (5,451,679) |
Class B Shares | (19,361) | (83,180) |
Class C Shares | (24,405) | (103,824) |
Class I Shares | (81,106) | (29,620) |
Total capital share activity | 2,420,449 | 1,224,604 |
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.
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 March 31, 2004, $7,004,987, or 2.6% 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. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
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 Assets and Liabilities 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: The Fund charges a 2% redemption fee on redemptions, including exchanges, made within 30 days of purchase in the same Fund (within five days for Class I shares). The redemption fee is paid to the Fund, and is intended to discourage market-timers by ensuring that short-term trading costs are borne by the investors making the transactions and not the shareholders already in the Fund.
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 has contractually agreed to limit net annual fund operating expenses through January 31, 2005 for Class I. The contractual expense cap is 1.10%. 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 $52,234 as its portion of commissions charged on sales of the Fund's Class A shares for the six months ended March 31, 2004.
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 $74,389 for the six months ended March 31, 2004. 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 period, purchases and sales of investments, other than short-term securities, were $117,374,702 and $87,386,420, respectively.
The cost of investments owned at March 31, 2004 for federal income tax purposes was $227,086,911. Net unrealized appreciation aggregated $30,534,823, of which $41,242,072 related to appreciated securities and $10,707,249 related to depreciated securities.
Net capital loss carryforwards of $633,283 (from Calvert South Africa Fund that merged into the Fund in September 2002), and $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 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 six months ended March 31, 2004, purchase and sales transactions were $10,205,000 and $12,880,000, 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 March 31, 2004.
For the six months ended March 31, 2004, 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 | |
$202,635 | 1.57% | $6,083,824 | February 2004 |
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 | $50,000 |
SEAF Central & Eastern European Growth Fund LLC | 879,382 | 799,457 |
TOTALS | $1,229,382 | $849,457 |
Financial Highlights
Periods Ended | ||||
March 31, | September 30, | September 30, | ||
Class A Shares | 2004(z) | 2003 | 2002 | |
Net asset value, beginning | $14.55 | $11.99 | $13.65 | |
Income from investment operations | ||||
Net investment income (loss) | ** | .09 | .01 | |
Net realized and unrealized gain (loss) | 2.60 | 2.53 | (1.59) | |
Total from investment operations | 2.60 | 2.62 | (1.58) | |
Distributions from | ||||
Net investment income | (.17) | (.06) | -- | |
Net realized gains | -- | -- | (.08) | |
Total distributions | (.17) | (.06) | (.08) | |
Total increase (decrease) in net asset value | 2.43 | 2.56 | (1.66) | |
Net asset value, ending | $16.98 | $14.55 | $11.99 | |
Total return* | 17.94% | 21.93% | (11.69%) | |
Ratios to average net assets: | ||||
Net investment income (loss) | (.02%) (a) | .72% | .06% | |
Total expenses | 1.97% (a) | 2.07% | 2.02% | |
Expenses before offsets | 1.97% (a) | 2.05% | 2.00% | |
Net expenses | 1.96% (a) | 2.05% | 1.99% | |
Portfolio turnover | 40% | 71% | 106% | |
Net assets, ending (in thousands) | $202,864 | $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 |
Financial Highlights
Periods Ended | ||||
March 31, | September 30, | September 30, | ||
Class B Shares | 2004(z) | 2003 | 2002 | |
Net asset value, beginning | $13.57 | $11.33 | $13.09 | |
Income from investment operations | ||||
Net investment income (loss) | (.09) | (.08) | (.16) | |
Net realized and unrealized gain (loss) | 2.42 | 2.38 | (1.52) | |
Total from investment operations | 2.33 | 2.30 | (1.68) | |
Distributions from: | ||||
Net investment income | (.16) | (.06) | -- | |
Net realized gains | -- | -- | (.08) | |
Total distributions | (.16) | (.06) | (.08) | |
Total increase (decrease) in net asset value | 2.17 | 2.24 | (1.76) | |
Net asset value, ending | $15.74 | $13.57 | $11.33 | |
Total return* | 17.22% | 20.34% | (12.96%) | |
Ratios to average net assets | ||||
Net investment income (loss) | (1.16%) (a) | (.64%) | (1.22%) | |
Total expenses | 3.13% (a) | 3.44% | 3.33% | |
Expenses before offsets | 3.13% (a) | 3.42% | 3.31% | |
Net expenses | 3.12% (a) | 3.41% | 3.31% | |
Portfolio turnover | 40% | 71% | 106% | |
Net assets, ending (in thousands) | $8,644 | $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 |
Financial Highlights
Periods Ended | |||
March 31, | September 30, | September 30, | |
Class C Shares | 2004(z) | 2003 | 2002 |
Net asset value, beginning | $13.18 | $10.97 | $12.64 |
Income from investment operations | |||
Net investment income (loss) | (.06) | (.03) | (.12) |
Net realized and unrealized gain (loss) | 2.35 | 2.30 | (1.47) |
Total from investment operations | 2.29 | 2.27 | (1.59) |
Distributions from: | |||
Net investment income | (.15) | (.06) | -- |
Net realized gains | -- | -- | (.08) |
Total distributions | (.15) | (.06) | (.08) |
Total increase (decrease) in net asset value | 2.14 | 2.21 | (1.67) |
Net asset value, ending | $15.32 | $13.18 | $10.97 |
Total return* | 17.47% | 20.72% | (12.71%) |
Ratios to average net assets: | |||
Net investment income (loss) | (.85%) (a) | (.27%) | (.95%) |
Total expenses | 2.84% (a) | 3.09% | 3.05% |
Expenses before offsets | 2.84% (a) | 3.07% | 3.04% |
Net expenses | 2.82% (a) | 3.07% | 3.03% |
Portfolio turnover | 40% | 71% | 106% |
Net assets, ending (in thousands) | $14,471 | $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 |
Financial Highlights
Periods Ended | ||||
March 31, | September 30, | September 30, | ||
Class I Shares | 2004(z) | 2003 | 2002 | |
Net asset value, beginning | $15.17 | $12.38 | $13.97 | |
Income from investment operations | ||||
Net investment income | .07 | .22 | .16 | |
Net realized and unrealized gain (loss) | 2.72 | 2.63 | (1.67) | |
Total from investment operations | 2.79 | 2.85 | (1.51) | |
Distributions from: | ||||
Net investment income | (.18) | (.06) | -- | |
Net realized gains | -- | -- | (.08) | |
Total distributions | (.18) | (.06) | (.08) | |
Total increase (decrease) in net asset value | 2.61 | 2.79 | (1.59) | |
Net asset value, ending | $17.78 | $15.17 | $12.38 | |
Total return* | 18.45% | 23.12% | (10.93%) | |
Ratios to average net assets: | ||||
Net investment income (loss) | .88% (a) | 1.65% | 1.05% | |
Total expenses | 1.24% (a) | 1.39% | 1.27% | |
Expenses before offsets | 1.11% (a) | 1.09% | 1.06% | |
Net expenses | 1.10% (a) | 1.09% | 1.05% | |
Portfolio turnover | 40% | 71% | 106% | |
Net assets, ending (in thousands) | $45,291 | $18,026 | $5,943 | |
Periods Ended | ||||
September 30, | September 30, | September 30, | ||
Class I Shares | 2001 | 2000 | 1999# | |
Net asset value, beginning | $22.03 | $21.99 | $19.91 | |
Income from investment operations | ||||
Net investment income | .18 | .16 | .15 | |
Net realized and unrealized gain (loss) | (6.86) | .84 | 1.93 | |
Total from investment operations | (6.68) | 1.00 | 2.08 | |
Distributions from: | ||||
Net realized gains | (1.38) | (.96) | -- | |
Total distributions | (1.38) | (.96) | -- | |
Total increase (decrease) in net asset value | (8.06) | .04 | 2.08 | |
Net asset value, ending | $13.97 | $22.03 | $21.99 | |
Total return* | (32.25%) | 4.10% | 10.45% | |
Ratios to average net assets: | ||||
Net investment income (loss) | 1.09% | .90% | 1.19% (a) | |
Total expenses | 1.19% | 1.28% | 1.53% (a) | |
Expenses before offsets | 1.07% | 1.12% | 1.09% (a) | |
Net expenses | 1.05% | 1.05% | 1.05% (a) | |
Portfolio turnover | 93% | 76% | 82% | |
Net assets, ending (in thousands) | $22,085 | $10,114 | $3,006 |
(a) Annualized
(z) Per share figures are calculated using the Average Share Method.
* Total return is not annualized for periods less than one year and does not reflect deduction of any front-end or deferred sales charge.
** Amount was less than .001 per share.
# 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.
Proxy Voting Disclosure
The Proxy Voting Guidelines of the Calvert Funds that the Fund uses to determine how to vote proxies relating to portfolio securities is provided as an Appendix to the Fund's Statement of Additional Information. The Statement of Additional Information can be obtained free of charge by calling the Fund at 1-800-368-2745, by visiting the Calvert website at www.calvert.com; or by visiting the SEC's website at www.sec.gov.
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<PAGE>
Calvert
Investments that make a difference(R)
March 31, 2004
Semi-Annual Report
Calvert Capital
Accumulation Fund
Table of Contents President's Letter 1 Social Update 3 Portfolio Management Discussion 4 Statement of Net Assets 8 Statement of Operations 13 Statements of Changes in Net Assets 14 Notes to Financial Statements 15 Financial Highlights 19 Explanation of Financial Tables 23 Proxy Voting Disclosure 25 |
Dear Shareholders:
The past year has seen a resurgence of returns across nearly all categories of investment, with the S&P 500 showing a 14.07% gain for the six months ending March 31st and the Lehman U.S. Credit Index up a solid, though less dramatic, 3.78% over the same period.
While we at Calvert celebrate these very strong returns, we caution investors against becoming too caught up in short-term market movements. Now, as at any time, prudent investors should work with their financial advisors to develop a sound asset allocation and investment strategy and stick to it, rebalancing as necessary to reach their targets.
Calvert continued this year to strive toward its dual goals of superior investment results and positive social impact. On the investment side, we are very pleased that several Calvert funds recently have been recognized by the industry for their excellence. Daniel Boone III, the manager of our largest stock fund, the Calvert Social Investment Fund Equity Portfolio, won the "Excellence in Fund Management Award" from Standard & Poor's. As a result, BusinessWeek magazine included Boone among their "Best Fund Managers of 2004."1 In addition, CSIF Bond Portfolio managed by Calvert Asset Management Company's fixed-income team, led by Greg Habeeb, won the 2004 Lipper Fund Award in the Corporate Debt A Rated category.2 And we're proud that John Montgomery, manager of Calvert Large Cap Growth Fund, was named one of the best stock pickers of 2003 by Morningstar.3 In addition, the Calvert Large Cap Growth Fund was named to the USA Today "All Star Mutual Fund Team."4
We also maintain our commitment to an industry-leading standard for corporate responsibility. This year, for instance, Calvert commissioned an investor confidence survey to gauge investor confidence of corporate integrity and investor perceptions of the tie between corporate responsibility, risk reduction, and long-term returns. The survey found that investors are, indeed, concerned about the issues uncovered at Enron and WorldCom, as well as within the mutual fund industry, and believe that their investments should be directed toward companies with sound corporate governance and reporting procedures. In addition, we launched a company-wide initiative, Corporate Responsibility Matters, which outlines five pillars of corporate responsibility and includes action steps for companies, investors and financial professionals.
We believe that investors should enjoy positive investment returns as a result of responsible corporate management. Therefore, Calvert will continue to focus on both its objectives -- investment excellence and corporate responsibility with positive environmental and social impact -- as we go forward. 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 Group, Ltd.
April 2004
1 BusinessWeek magazine, March 22, 2004. BusinessWeek evaluated funds for the best risk-adjusted total returns over the past five years. BusinessWeek considered funds open to new investors that had at least $100 million in assets, a minimum investment of no more than $26,000, and a fund manager at the helm of the portfolio for at least five years. S&P evaluated each fund's one-, three-, and five-year performance against its peer group. S&P also evaluated expenses, turnover, portfolio composition, investment style, and consistency.
2 The Lipper award was for CSIF Bond Portfolio Class I shares and was based on the fund in each Lipper classification that achieved the highest Consistent Return scores. The Portfolio is in the Lipper A-Rated Corporate Debt Funds category. A fund's Consistent Return score evaluates its risk-adjusted returns, adjusted for volatility, relative to peers, for the overall period ended December 31, 2003. The fund was chosen from among 149 funds. Lipper Fund Awards are not intended to predict future results, and Lipper does not guarantee the accuracy of this information.
3 Nominees for Stock Fund Manager of the Year, December 11, 2003, Morningstar.
4 USA Today, "Fund Manager All Star Mutual Fund Team," February 26, 2004.
Past performance is no guarantee of future results. The investment return and principal value of an investor's shares, when redeemed, may be worth more or less than their original cost. For more information on any Calvert fund, please contact your financial advisor or call Calvert at 800.368.2748 for a free prospectus. An investor should consider the investment objectives, risks, charges, and expenses of an investment carefully before investing. The prospectus contains this and other information. Read it carefully before you invest or send money. Current performance may be higher or lower than the performance data quoted. Visit www.calvert.com for current month-end fund and performance information.
May lose value. Not FDIC Insured. No Bank Guarantee. Not NCUA/NCUSIF Insured. No Credit Union Guarantee.
Calvert mutual funds are underwritten and distributed by Calvert Distributors, Inc., member NASD, a subsidiary of Calvert Group, Ltd.
Social Update
from the Calvert Social Research Department
Shareholder Activism
Through shareholder activism, Calvert seeks to move companies already operating at higher levels of corporate, environmental, and social responsibility than their industry peers to even higher levels of corporate excellence. We continue our activism from last year's record-setting season, with corporate disclosure and board diversity our current focus.
Inroads on Corporate Disclosure
Negative environmental impact and product failure can cause a company to falter, collapse, or even declare bankruptcy. With information in advance of potential problems, investors can steer clear of companies in social/environmental peril, just as they can avoid investment in financially compromised firms. Fourteen of our 33 recent shareholder resolutions asked companies for sustainability reports based on Global Reporting Initiative guidelines, the standard for social and environmental reporting. We're delighted to report that we have been able to withdraw half of these resolutions because the companies agreed to report corporate, environmental, and social, in addition to financial, performance.
Board Diversity Successes
Currently, more than 88% of board members of the Russell 3000 companies come from a demographic group that accounts for just 25% of the U.S. population. With growing evidence that more diverse corporate boards are associated with better financial performance, we proudly continue into our second season of shareholder resolutions for board diversity. Of 10 resolutions filed, we have successfully withdrawn five because the companies agreed to adopt our model diversity charter, endorsed by the National Association of State Treasurers.
"Corporate Responsibility Matters"
You may be aware that in the last quarter of 2003, we launched the Corporate Responsibility Matters campaign with a special Web-based report to raise public awareness of how investors, financial advisors, and retirement plan sponsors can help work to promote healthy companies, strong markets, and sound investments. The campaign is just another example of Calvert's leadership in our industry -- and of how our company has always done business.
Portfolio Management Discussion
Ed Brown
of Brown Capital Management, Inc.
Performance
For the six-month period ended March 31, 2004, the Calvert Capital Accumulation Fund Class A shares produced a total return of 13.87%. The Fund's benchmark, the Russell Midcap Growth Index, produced a total return of 17.58% over the same period.
Investment Climate
Across all capitalization ranges, value stocks outperformed growth stocks during the six-month period ended March 31, 2004. However, the performance gap was most pronounced in larger-cap stocks -- well over 6.0%. The value-vs-growth performance gap in mid-cap stocks was 3.8%, still meaningful but not so large as in the larger-cap stock universe.
While both the fourth quarter of 2003 and the first quarter of 2004 saw overall stock market appreciation, the lion's share of the return came in the earlier period. That quarter capped a year in which large caps returned almost 30% and mid-size and smaller stocks produced returns in excess of 40%. Calendar 2003 performance was the result of gradually improving economic growth over the course of the year, modest inflation, and a renewed interest in risk taking by investors. Real GDP grew 4.1% for the year and included a torrid 8.2% for the third quarter. While stock market performance for the first quarter of 2004 certainly cooled off relative to fourth quarter 2003, the lower return levels seen during this year's first quarter seem more realistic and sustainable.
Portfolio Statistics
March 31, 2004
Investment Performance
(total return at NAV)
6 Months | 12 Months | |
ended | ended | |
3/31/04 | 3/31/04 | |
Class A | 13.87% | 36.46% |
Class B | 13.40% | 35.20% |
Class C | 13.44% | 35.37% |
Class I** | 14.39% | 37.48% |
Russell Mid-Cap Growth Index* | 17.58% | 49.63% |
Lipper Mid-Cap Growth Funds Avg.* | 15.36% | 43.45% |
Ten Largest Stock Holdings
% of Net Assets | |
PETsMART, Inc. | 3.4% |
Advance Auto Parts, Inc. | 2.7% |
Legg Mason, Inc. | 2.7% |
Xilinx, Inc. | 2.4% |
Career Education Corp. | 2.2% |
Altera Corp. | 2.1% |
Health Management Associates, Inc. | 2.0% |
Coventry Health Care, Inc. | 2.0% |
Wright Medical Group, Inc. | 2.0% |
Staples, Inc. | 2.0% |
Total | 23.5% |
Asset Allocation
Stocks | 99% | |
Cash or Cash Equivalents | 1% | |
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
March 31, 2004
Average Annual Total Returns
(with max. load)
Class A Shares | |
One year | 30.01% |
Five year | (0.97%) |
Since inception | 8.90% |
(10/31/94) | |
Class B Shares | |
One year | 30.20% |
Five year | (1.06%) |
Since inception | 0.51% |
(4/1/98) |
Portfolio Statistics
March 31, 2004
Average Annual Total Returns
(with max. load)
Class C Shares | |
One year | 34.37% |
Five year | (0.80%) |
Since inception | 8.60% |
(10/31/94) | |
Class I Shares* | |
One year | 37.48% |
Five year | 1.09% |
Since inception | 1.97% |
(3/1/99) |
Performance Comparison
Comparison of change in value of $10,000 investment. (Source: Lipper Analytical Services, Inc.)
* 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
Both stock selection and sector allocation drove the 3.71% underperformance of the Fund relative to the Russell Midcap Growth Index for the reporting period. Attribution analysis revealed very good stock selection within the Utilities, Other Energy, and Technology sectors. However, this success was not enough to offset poor stock selection within the Consumer Discretionary, Health Care, and Autos & Transportation sectors.
Two stocks -- ITT Educational, a consumer discretionary stock, and Medimmune Inc., a healthcare stock -- were the two worst-contributing stocks through the period, representing a large portion of the Fund's underperformance. In late February 2004, ITT Educational came under federal investigation, causing the stock's price to fall more than 50% within one week. Medimmune, a global biotechnology company that specializes in treating and preventing infectious diseases, suffered as large retail pharmacies, including Wal-Mart, decided not to carry the company's nasal-spray flu vaccine Flumist during the current flu season.
Despite this setback, we continue to have a favorable long-term outlook on the stock.
Regarding the relative underperformance attributed to sector allocation, our research process is bottom-up driven. So while we are aware of our sector weightings from a risk-budgeting standpoint, they are more a byproduct of our investment process. Additionally, about one-fourth of the underperformance attributed to allocation was due to the modest 1.4% average weighting we held in cash. Such an impact is to be expected when markets perform as strongly as they did during the reporting period.
Going forward
From a tactical perspective, we continue to hold approximately 70-75 stocks in the portfolio, 15 higher than the high end of our normal range of 40-60 stocks. As attractive growth-at-a-reasonable-price opportunities present themselves, we will consider gradually reducing stock holdings to focus on opportunities with high return potential.
Strategically, we continue to spend the majority of our research effort looking for growth companies in the core growth sectors, i.e., Consumer Discretionary, Technology, Producer Durables, Health Care, and Financial Services.
Outlook
We are generally optimistic about the market's prospects and believe that in the long run, higher stock valuations will be fueled by a stronger global economy, a continued pick-up in employment, and a higher degree of investor confidence.
April 2004
Past performance is no guarantee of future results. The investment return and principal value of an investor's shares, when redeemed, may be worth more or less than their original cost. For more information on any Calvert fund, please contact your financial advisor or call Calvert at 800.368.2748 for a free prospectus. An investor should consider the investment objectives, risks, charges, and expenses of an investment carefully before investing. The prospectus contains this and other information. Read it carefully before you invest or send money. Current performance may be higher or lower than the performance data quoted. Visit www.calvert.com for current month-end fund and performance information.
May lose value. Not FDIC Insured. No Bank Guarantee. Not NCUA/NCUSIF Insured. No Credit Union Guarantee.
Calvert mutual funds are underwritten and distributed by Calvert Distributors, Inc., member NASD, a subsidiary of Calvert Group, Ltd.
Statement of Net Assets
March 31, 2004
Equity Securities - 98.7% | Shares | Value | ||
Auto Parts & Equipment - 1.1% | ||||
BorgWarner, Inc. | 14,400 | $1,221,552 | ||
Gentex Corp. | 11,600 | 503,208 | ||
1,724,760 | ||||
Biotechnology - 2.4% | ||||
Genzyme Corp. - General Division* | 45,500 | 2,140,320 | ||
Medimmune, Inc.* | 61,400 | 1,417,112 | ||
3,557,432 | ||||
Chemicals - 1.6% | ||||
Airgas, Inc. | 115,400 | 2,458,020 | ||
Chemicals - Specialty - 0.8% | ||||
Sigma-Aldrich Corp. | 20,900 | 1,156,606 | ||
Computers - Networking - 1.1% | ||||
Network Appliance, Inc.* | 78,400 | 1,681,680 | ||
Computers - Software & Services - 5.9% | ||||
Adobe Systems, Inc. | 52,200 | 2,058,246 | ||
Electronic Arts, Inc.* | 52,200 | 2,816,712 | ||
Fair Isaac Corp. | 13,100 | 472,648 | ||
SPSS, Inc.* | 74,000 | 1,354,200 | ||
Synopsys, Inc.* | 77,400 | 2,241,504 | ||
| 8,943,310 | |||
Consumer - Jewelry, Novelty, & Gifts - 1.0% | ||||
Fossil, Inc.* | 43,700 | 1,457,395 | ||
Electrical Equipment - 2.6% | ||||
Flextronics International Ltd.* | 84,300 | 1,451,646 | ||
Littelfuse, Inc.* | 46,000 | 1,711,200 | ||
Molex, Inc. | 24,600 | 747,594 | ||
3,910,440 | ||||
Electronics - Component Distribution - 1.0% | ||||
Avnet, Inc.* | 61,600 | 1,508,584 | ||
Electronics - Instrument - 3.1% | ||||
Coherent, Inc.* | 68,900 | 1,811,381 | ||
Trimble Navigation Ltd.* | 72,000 | 1,650,960 | ||
Waters Corp.* | 29,600 | 1,208,864 | ||
4,671,205 | ||||
Equity Securities - Cont'd | Shares | Value | ||
Electronics - Semiconductors - 6.7% | ||||
Altera Corp.* | 154,100 | $3,151,345 | ||
Analog Devices, Inc. | 51,400 | 2,467,714 | ||
MEMC Electronic Materials, Inc.* | 96,900 | 886,635 | ||
Xilinx, Inc.* | 96,300 | 3,659,400 | ||
10,165,094 | ||||
Equipment - Semiconductors - 2.9% | ||||
Lam Research Corp.* | 89,700 | 2,261,337 | ||
Novellus Systems, Inc.* | 68,300 | 2,171,257 | ||
4,432,594 | ||||
Financial - Diversified - 1.1% | ||||
Moody's Corp. | 23,200 | 1,642,560 | ||
Healthcare - Drug - Major Pharmaceutical - 0.9% | ||||
Kos Pharmaceuticals, Inc.* | 32,000 | 1,303,680 | ||
Healthcare - Hospital Management - 2.0% | ||||
Health Management Associates, Inc. | 133,100 | 3,089,251 | ||
Healthcare - Managed Care - 2.0% | ||||
Coventry Health Care, Inc.* | 71,550 | 3,028,711 | ||
Healthcare - Medical Products & Supplies - 8.7% | ||||
Affymetrix, Inc.* | 64,400 | 2,173,500 | ||
Henry Schein, Inc.* | 35,000 | 2,499,700 | ||
Patterson Dental Co. | 38,800 | 2,662,068 | ||
St. Jude Medical, Inc.* | 39,600 | 2,855,160 | ||
Wright Medical Group, Inc.* | 97,300 | 2,987,110 | ||
13,177,538 | ||||
Healthcare - Special Services - 1.9% | ||||
Omnicare, Inc. | 65,900 | 2,921,347 | ||
Household Furnishing & Appliances - 1.6% | ||||
La-Z-Boy, Inc. | 108,800 | 2,367,488 | ||
Household Products - Non-Durable - 1.0% | ||||
Church & Dwight, Inc. | 35,300 | 1,528,843 | ||
Insurance - Multi-Line - 1.5% | ||||
Willis Group Holdings, Ltd. | 61,700 | 2,295,240 | ||
Investment Banking / Brokerage - 2.7% | ||||
Legg Mason, Inc. | 43,500 | 4,035,930 | ||
Investment Management - 3.5% | ||||
Franklin Resources, Inc. | 37,500 | 2,088,000 | ||
Investors Financial Services Corp. | 51,800 | 2,140,376 | ||
T. Rowe Price Group, Inc. | 19,800 | 1,065,834 | ||
5,294,210 | ||||
Equity Securities - Cont'd | Shares | Value | ||
Leisure Time - Products - 1.0% | ||||
Harley-Davidson, Inc. | 28,000 | $1,493,520 | ||
Manufacturing - Diversified - 2.8% | ||||
Biogen Idec, Inc.* | 41,100 | 2,285,160 | ||
Danaher Corp. | 20,700 | 1,932,759 | ||
4,217,919 | ||||
Manufacturing - Specialized - 3.6% | ||||
Cognex Corp. | 45,300 | 1,506,225 | ||
Jabil Circuit, Inc.* | 52,400 | 1,542,132 | ||
York International Corp. | 59,800 | 2,350,738 | ||
5,399,095 | ||||
Office Equipment & Supplies - 0.1% | ||||
Herman Miller, Inc. | 7,700 | 205,051 | ||
Oil & Gas - Drilling & Equipment - 2.5% | ||||
Grant Prideco, Inc.* | 144,100 | 2,233,550 | ||
Grey Wolf, Inc.* | 364,200 | 1,507,788 | ||
3,741,338 | ||||
Personal Care - 0.7% | ||||
NBTY, Inc.* | 27,000 | 1,003,860 | ||
Restaurants - 3.9% | ||||
Cheesecake Factory, Inc.* | 45,100 | 2,080,463 | ||
Krispy Kreme Doughnuts, Inc.* | 47,200 | 1,620,848 | ||
Panera Bread Co.* | 19,200 | 747,264 | ||
Steak 'N Shake Co.* | 75,900 | 1,461,075 | ||
| 5,909,650 | |||
Retail - Building Supplies - 1.3% | ||||
Fastenal Co. | 35,400 | 1,900,626 | ||
Retail - Discounters - 2.4% | ||||
Dollar Tree Stores, Inc.* | 76,000 | 2,347,640 | ||
Ross Stores, Inc. | 42,700 | 1,307,047 | ||
3,654,687 | ||||
Retail - Drug Stores - 0.5% | ||||
CVS Corp. | 21,100 | 744,830 | ||
Retail - Specialty - 10.4% | ||||
Advance Auto Parts, Inc.* | 99,700 | 4,054,799 | ||
CSK Auto Corp.* | 130,900 | 2,370,599 | ||
PETsMART, Inc. | 187,200 | 5,103,072 | ||
Staples, Inc.* | 117,300 | 2,978,247 | ||
Williams-Sonoma, Inc.* | 34,600 | 1,183,320 | ||
15,690,037 | ||||
Services - Advertising / Marketing - 1.1% | ||||
Acxiom Corp. | 73,400 | 1,611,864 | ||
Equity Securities - Cont'd | Shares | Value | ||
Services - Commercial & Consumer - 5.8% | ||||
Career Education Corp.* | 59,300 | $3,358,752 | ||
D&B Corp.* | 35,000 | 1,872,500 | ||
H & R Block, Inc. | 33,900 | 1,729,917 | ||
ITT Educational Services, Inc.* | 56,200 | 1,753,440 | ||
8,714,609 | ||||
Services - Computer Systems - 1.6% | ||||
SunGard Data Systems, Inc.* | 89,700 | 2,457,780 | ||
Services - Data Processing - 2.2% | ||||
Checkfree Corp.* | 42,300 | 1,246,158 | ||
Fiserv, Inc.* | 59,600 | 2,131,892 | ||
3,378,050 | ||||
Telecommunications - Cell / Wireless - 1.7% | ||||
Nextel Partners, Inc.* | 202,400 | 2,562,384 | ||
Total Equity Securities (Cost $134,103,024) | 149,037,218 | |||
Principal | ||||
High Social Impact Investments - 0.5% | Amount | Value | ||
Calvert Social Investment Foundation Notes, 1.74%, 7/1/05 (b)(r) | $700,000 | 694,204 | ||
Total High Social Impact Investments (Cost $700,000) | 694,204 | |||
Total Investments (Cost $134,803,024) - 99.2% | 149,731,422 | |||
Other assets and liabilities, net - 0.8% | 1,281,616 | |||
Net Assets - 100% | $151,013,038 |
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: 5,272,281 shares outstanding | $127,343,192 | ||
Class B: 844,922 shares outstanding | 21,507,795 | ||
Class C: 648,224 shares outstanding | 14,751,767 | ||
Class I: 31,558 shares outstanding | 599,737 | ||
Undistributed net investment income (loss) | (1,168,879) | ||
Accumulated net realized gain (loss) on investments | (26,948,972) | ||
Net unrealized appreciation (depreciation) on investments | 14,928,398 | ||
Net Assets | $151,013,038 | ||
Net Asset Value Per Share | |||
Class A (based on net assets of $119,003,575) | $22.57 | ||
Class B (based on net assets of $17,947,093) | $21.24 | ||
Class C (based on net assets of $13,344,874) | $20.59 | ||
Class I (based on net assets of $717,496) | $22.74 |
* 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
Six Months Ended March 31, 2004
Net Investment Income | ||
Investment Income: | ||
Dividend income | $213,998 | |
Interest income | 14,143 | |
Total investment income | 228,141 | |
Expenses: | ||
Investment advisory fee | 478,301 | |
Transfer agency fees and expenses | 261,009 | |
Distribution Plan expenses: | ||
Class A | 203,928 | |
Class B | 86,606 | |
Class C | 63,093 | |
Directors' fees and expenses | 16,447 | |
Administrative fees | 183,437 | |
Custodian fees | 22,088 | |
Registration fees | 19,621 | |
Reports to shareholders | 47,116 | |
Professional fees | 12,852 | |
Miscellaneous | 7,616 | |
Total expenses | 1,402,114 | |
Reimbursement from Advisor: | ||
Class I | (1,125) | |
Fees paid indirectly | (3,969) | |
Net expenses | 1,397,020 | |
Net Investment Income (Loss) | (1,168,879) | |
Realized and Unrealized Gain (Loss) on Investments | ||
Net realized gain (loss) | 16,679,868 | |
Change in unrealized appreciation or (depreciation) | 2,600,023 | |
Net Realized and Unrealized Gain | ||
(Loss) on Investments | 19,279,891 | |
Increase (Decrease) in Net Assets | ||
Resulting From Operations | $18,111,012 |
See notes to financial statements.
Statements of Changes in Net Assets
Six Months Ended | Year Ended | ||
March 31, | September 30, | ||
Increase (Decrease) in Net Assets | 2004 | 2003 | |
Operations: | |||
Net investment income (loss) | ($1,168,879) | ($1,913,699) | |
Net realized gain (loss) | 16,679,868 | 4,241,397 | |
Change in unrealized appreciation | |||
or (depreciation) | 2,600,023 | 23,536,398 | |
Increase (Decrease) in Net Assets | |||
Resulting From Operations | 18,111,012 | 25,864,096 | |
Capital share transactions: | |||
Shares sold: | |||
Class A Shares | 10,904,036 | 17,429,331 | |
Class B Shares | 1,585,152 | 2,445,312 | |
Class C Shares | 1,884,448 | 2,114,311 | |
Class I Shares | 100,607 | 500,000 | |
Shares redeemed: | |||
Class A Shares | (11,279,209) | (17,171,529) | |
Class B Shares | (828,211) | (1,607,899) | |
Class C Shares | (921,052) | (1,659,390) | |
Total capital share transactions | 1,445,771 | 2,050,136 | |
Total Increase (Decrease) in Net Assets | 19,556,783 | 27,914,232 | |
Net Assets | |||
Beginning of period | 131,456,255 | 103,542,023 | |
End of period (including net investment loss | |||
of $1,168,879 and $0, respectively) | $151,013,038 | $131,456,255 | |
Capital Share Activity | |||
Shares sold: | |||
Class A Shares | 491,707 | 980,553 | |
Class B Shares | 75,999 | 140,348 | |
Class C Shares | 93,467 | 129,048 | |
Class I Shares | 4,948 | 26,610 | |
Shares redeemed: | |||
Class A Shares | (510,940) | (985,682) | |
Class B Shares | (39,877) | (96,889) | |
Class C Shares | (45,584) | (102,236) | |
Total capital share activity | 69,720 | 91,752 |
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 March 31, 2004, $694,204, 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.
Redemption Fees: Effective February 1, 2004, the Fund began to charge a 2% redemption fee on redemptions, including exchanges, made within 30 days of purchase in the same Fund (within five days for Class I shares). The redemption fee is paid to the Fund, and is intended to discourage market-timers by ensuring that short-term trading costs are borne by the investors making the transactions and not the shareholders already in the Fund.
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, $133,323 was payable at period end.
The Advisor has contractually agreed to limit net annual fund operating expenses through January 31, 2005 for Class I. The contractual expense cap is 0.86%. 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, $31,671 was payable at period 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, $61,329 was payable at period end.
The Distributor received $43,312 as its portion of the commissions charged on sales of the Fund's Class A shares for the six months ended March 31, 2004.
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 $76,052 for the six months ended March 31, 2004. Under the terms of the agreement, $13,788 was payable at period 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 period, purchases and sales of investments, other than short-term securities, were $120,891,705 and $119,744,168, respectively.
The cost of investments owned at March 31, 2004 for federal income tax purposes was $134,976,785. Net unrealized appreciation aggregated $14,754,637, of which $17,296,211 related to appreciated securities and $2,541,574 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 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.
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 March 31, 2004. For the six months ended March 31, 2004, 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 | |
$18,574 | 1.58% | $383,437 | January 2004 |
Financial Highlights
Periods Ended | ||||
March 31, | September 30, | September 30, | ||
Class A Shares | 2004 | 2003 | 2002 | |
Net asset value, beginning | $19.82 | $15.79 | $19.35 | |
Income from investment operations | ||||
Net investment income (loss) | (.16) | (.26) | (.29) | |
Net realized and unrealized gain (loss) | 2.91 | 4.29 | (3.26) | |
Total from investment operations | 2.75 | 4.03 | (3.55) | |
Distributions from | ||||
Net realized gain | -- | -- | (.01) | |
Total distributions | -- | -- | (.01) | |
Total increase (decrease) in net asset value | 2.75 | 4.03 | (3.56) | |
Net asset value, ending | $22.57 | $19.82 | $15.79 | |
Total return* | 13.87% | 25.52% | (18.36%) | |
Ratios to average net assets: | ||||
Net investment income (loss) | (1.42%) (a) | (1.48%) | (1.47%) | |
Total expenses | 1.74% (a) | 1.82% | 1.74% | |
Expenses before offsets | 1.74% (a) | 1.82% | 1.74% | |
Net expenses | 1.73% (a) | 1.81% | 1.73% | |
Portfolio turnover | 82% | 170% | 93% | |
Net assets, ending (in thousands) | $119,004 | $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 |
Financial Highlights
Periods Ended | ||||
March 31, | September 30, | September 30, | ||
Class B Shares | 2004 | 2003 | 2002 | |
Net asset value, beginning | $18.73 | $15.07 | $18.64 | |
Income from investment operations | ||||
Net investment income (loss) | (.23) | (.39) | (.44) | |
Net realized and unrealized gain (loss) | 2.74 | 4.05 | (3.12) | |
Total from investment operations | 2.51 | 3.66 | (3.56) | |
Distributions from | ||||
Net realized gain | -- | -- | (.01) | |
Total distributions | -- | -- | (.01) | |
Total increase (decrease) in net asset value | 2.51 | 3.66 | (3.57) | |
Net asset value, ending | $21.24 | $18.73 | $15.07 | |
Total return* | 13.40% | 24.29% | (19.11%) | |
Ratios to average net assets: | ||||
Net investment income (loss) | (2.28%) (a) | (2.45%) | (2.38%) | |
Total expenses | 2.60% (a) | 2.79% | 2.65% | |
Expenses before offsets | 2.60% (a) | 2.79% | 2.65% | |
Net expenses | 2.59% (a) | 2.78% | 2.64% | |
Portfolio turnover | 82% | 170% | 93% | |
Net assets, ending (in thousands) | $17,947 | $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 |
Financial Highlights
Periods Ended | ||||
March 31, | September 30 | September 30, | ||
Class C Shares | 2004 | 2003 | 2002 | |
Net asset value, beginning | $18.15 | $14.59 | $18.02 | |
Income from investment operations | ||||
Net investment income (loss) | (.22) | (.37) | (.42) | |
Net realized and unrealized gain (loss) | 2.66 | 3.93 | (3.00) | |
Total from investment operations | 2.44 | 3.56 | (3.42) | |
Distributions from | ||||
Net realized gain | -- | -- | (.01) | |
Total distributions | -- | -- | (.01) | |
Total increase (decrease) in net asset value | 2.44 | 3.56 | (3.43) | |
Net asset value, ending | $20.59 | $18.15 | $14.59 | |
Total return* | 13.44% | 24.40% | (18.99%) | |
Ratios to average net assets: | ||||
Net investment income (loss) | (2.23%) (a) | (2.35%) | (2.32%) | |
Total expenses | 2.54% (a) | 2.69% | 2.59% | |
Expenses before offsets | 2.54% (a) | 2.69% | 2.59% | |
Net expenses | 2.54% (a) | 2.68% | 2.58% | |
Portfolio turnover | 82% | 170% | 93% | |
Net assets, ending (in thousands) | $13,345 | $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 |
Financial Highlights
Periods Ended | ||||
March 31, | September 30, | January 18, | ||
Class I Shares | 2004 | 2003### | 2002## | |
Net asset value, beginning | $19.88 | $18.79 | $20.84 | |
Income from investment operations | ||||
Net investment income (loss) | (.06) | (.03) | (.05) | |
Net realized and unrealized gain (loss) | 2.92 | 1.12 | 4.20 | |
Total from investment operations | 2.86 | 1.09 | 4.15 | |
Distributions from | ||||
Net realized gain | -- | -- | (.01) | |
Total distributions | -- | -- | (.01) | |
Total increase (decrease) in net asset value | 2.86 | 1.09 | 4.14 | |
Net asset value, ending | $22.74 | $19.88 | $24.98 | |
Total return* | 14.39% | 5.80% | 19.92% | |
Ratios to average net assets: | ||||
Net investment income (loss) | (0.55%) (a) | (0.50%) (a) | (0.64%) (a) | |
Total expenses | 1.19% (a) | 1.23% (a) | 1,316.21%(a) | |
Expenses before offsets | .87% (a) | .87% (a) | .80% (a) | |
Net expenses | .86% (a) | .86% (a) | .80% (a) | |
Portfolio turnover | 82% | 66% | 9% | |
Net assets, ending (in thousands) | $717 | $529 | $0 | |
Periods Ended | ||||
September 30, | September 30, | September 30, | ||
Class I Shares | 2001 | 2000 | 1999# | |
Net asset value, beginning | $36.84 | $25.99 | $26.18 | |
Income from investment operations | ||||
Net investment income (loss) | (.23) | (.12) | (.08) | |
Net realized and unrealized gain (loss) | (10.53) | 11.48 | (.11) | |
Total from investment operations | (10.76) | 11.36 | (.19) | |
Distributions from | ||||
Net realized gain | (5.24) | (.51) | -- | |
Total distributions | (5.24) | (.51) | -- | |
Total increase (decrease) in net asset value | (16.00) | 10.85 | (.19) | |
Net asset value, ending | $20.84 | $36.84 | $25.99 | |
Total return* | (34.61%) | 44.25% | (.73%) | |
Ratios to average net assets: | ||||
Net investment income (loss) | (0.67%) | (0.39%) | (.50%) (a) | |
Total expenses | 33.47% | 1.20% | 1.24% (a) | |
Expenses before offsets | 2.19% | .86% | .85% (a) | |
Net expenses | .80% | .80% | .80% (a) | |
Portfolio turnover | 71% | 116% | 88% | |
Net assets, ending (in thousands) | $1 | $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.
Proxy Voting Disclosure
The Proxy Voting Guidelines of the Calvert Funds that the Fund uses to determine how to vote proxies relating to portfolio securities is provided as an Appendix to the Fund's Statement of Additional Information. The Statement of Additional Information can be obtained free of charge by calling the Fund at 1-800-368-2745, by visiting the Calvert website at www.calvert.com; or by visiting the SEC's website at www.sec.gov.
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
Tax-Exempt
Money Market Funds
CTFR 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 Fund
California Limited-Term Municipal Fund
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.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
This Schedule is included as part of the report to shareholders filed under Item 1 of this Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 9. Submission of Matters to a Vote of Security Holders.
On March 3, 2004, the Board of Directors adopted procedures by which shareholders may recommend nominees to the Board. Prior to this date, the Board did not have a formal policy for the consideration of shareholder nominees or a procedure by which shareholders may make recommendations. The procedures provide that, if the Board determines that a Director vacancy exists or is likely to exist on the Board, the independent Directors consider any candidates for vacancies on the Board from any shareholder of the Fund who has held his or her shares for at least five years. Shareholders of the Fund who wish to nominate a candidate to the Board of a Fund must submit the recommendation in writing to the Board to the attention of the Fund's Secretary at 4550 Montgomery Avenue, Bethesda MD 20814. The recommendation must include biographical information, including business experience for the past ten years and a description of the qualifications of the proposed nominee, along with a statement from the proposed nominee that he or she is willing to serve and meets the requirements to be a "Disinterested Director" -- i.e., not an "interested person" of a Fund as defined by Section 2(a)(19) of the Investment Company Act of 1940.
Item 10. 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 last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
Item 11. Exhibits.
(a)(1) Not applicable for semi-annual reports.
(a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2 under the Act (17 CFR 270.30a-2).
Attached hereto.
(a)(3) Not applicable.
(b) A certification for the registrant's Principal Executive Officer and Principal Financial Officer, as required by Rule 30a-2(b) under the Investment Company Act of 1940, is attached hereto. The certification furnished pursuant to this paragraph is not deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certification is not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the registrant specifically incorporates it by reference.
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: June 3, 2004
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: June 3, 2004
/s/ Ronald Wolfsheimer
Ronald Wolfsheimer
Treasurer -- Principal Financial Officer
Date: June 7, 2004