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: 811-6563
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, 2010
Item 1. Report to Stockholders.
<PAGE>
Calvert World Values International Equity Fund
Semi-Annual Report
March 31, 2010
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TABLE OF CONTENTS
4 | President's Letter |
7 | SRI Update |
10 | Portfolio Management Discussion |
15 | Shareholder Expense Example |
17 | Statement of Net Assets |
28 | Statement of Operations |
29 | Statements of Changes in Net Assets |
31 | Notes to Financial Statements |
37 | Financial Highlights |
42 | Explanation of Financial Tables |
44 | Proxy Voting and Availability of Quarterly Portfolio Holdings |
44 | Basis for Board's Approval of Investment Advisory Contracts |
Dear Shareholders:
Over the six-month reporting period, the global financial markets climbed higher amidst periods of volatility, as global stimulus policies took hold and economies worked to emerge from the worst recession in 50 years. By the end of 2009, corporate bonds had staged a remarkable nine-month rally, and stocks moved to 18-month highs in March 2010.
Early in 2010, the equity and fixed-income markets were buffeted by an array of concerns, including proposed U.S. financial regulations, trouble in China's economy, high levels of unemployment globally, and worries about the sovereign credit quality of Greece and other European countries. By the end of the reporting period, however, the markets had steadied and resumed their climb, reassured by the release of more positive economic data--particularly relating to the consumer sector.
Looking ahead, we see encouraging signs of economic recovery. However, we also anticipate that there will be a period of transition. Both the equity and fixed-income markets are likely to be challenged by interest-rate uncertainty, increased market volatility, and concerns about mounting government debt. In this environment, we believe that investment strategies that include sustainability criteria may be better positioned to provide long-term value.
Markets Move Higher
In a welcome reversal from the much more difficult time periods of 2008 and early 2009, U.S. stock indexes reported solid six-month gains across all styles, strategies, and capitalization ranges. The large-cap Russell 1000 Index and the Standard & Poor's 500 Index returned 12.11% and 11.75%, respectively. Small- and mid-cap indexes, as well as value and growth indexes, all posted healthy returns. On the international front, the MSCI EAFE Investable Market Index (IMI), a benchmark for international stocks, edged up 3.25%, and the MSCI Emerging Markets IMI was up 12.02%.
Following their robust rally of 2009, corporate bonds recorded more modest gains for the six-month reporting period, with the Barclays Capital U.S. Credit Index up 3.33%. Money market returns remained low, reflecting the Federal Reserve's continued target of 0% to 0.25% for the federal funds rate.
Sustainable and Responsible Investing
As the global economy slowly recovers and the Obama administration and Congress negotiate financial reform and implement the new health care law, priorities for sustainability initiatives worldwide have clearly shifted and realigned. On the environmental front, for instance, while last December's Copenhagen Summit didn't result in legally binding emissions targets, the major world economies did agree to carbon emissions limits.
In this complex environment, we believe it's more important than ever for sustainable investors to retain their focus on and commitment to initiatives that advance environmental, social, and corporate governance responsibilities. In the last six months since we reported to you, Calvert has made progress on several sustainable and responsible investment initiatives.
In March 2010, the United Nations Global Compact and the United Nations Development Fund for Women (UNIFEM) launched the Women's Empowerment Principles, extending the goals underlying the Calvert Women's Principles® to an international audience. The Women's Empowerment Principles set out guidelines for international business practices that establish high-level corporate support for gender equality, promote professional development for women, and measure and publicly report on companies' progress to achieve gender equality.
Board Diversity Front and Center
Calvert has been a rigorous advocate for minority and female representation on corporate boards of directors since the passage of the Sarbanes-Oxley Act of 2002. Last December, we filed our 50th shareholder resolution on board diversity, marking years of engagement with hundreds of companies on this issue. In March, Ceres, an organization of investors focused on sustainability, released a report called The 21st Century Corporation: The Ceres Roadmap for Sustainability, which lays out 20 key expectations for companies related to disclosure, governance, stakeholder engagement, and performance on key environmental and sustainability issues. We are proud that Ceres highlighted Calvert's work on board diversity in the report.
Recently, the Securities and Exchange Commission (SEC) approved board diversity disclosure requirements in proxy statements. To bolster the impact of this SEC requirement, Calvert has provided a scorecard that outlines the approach taken by companies in the Russell 1000 Index that have filed proxies since March 1, 2010. The scorecard compares board diversity disclosures from 2009 and 2010 and analyzes any progress. We believe that companies with high standards of corporate governance, including diverse boards, are better positioned to compete in the global marketplace.
On the Road to Recovery
Looking ahead, we believe that the worst of the recession is behind us. However, the economic recovery will be uneven, with ongoing market volatility. On a positive note, the global financial markets have continued to rally and the U.S. economy is showing improved vital signs. Investors, while still cautious, have become less risk-averse, moving away from the lowest-yielding securities. Most recently, encouraging data has shown that U.S. manufacturing and production levels are up, along with consumer spending and retail sales.
Global fiscal concerns, however, may still prove to be a significant drag on the pace of recovery. At home and abroad, governments at all levels are facing major fiscal challenges. Concerns about Greece's sovereign debt have spread to other European countries, unsettling the euro and raising concerns about countries in other regions as well.
In the U.S., as the government removes fiscal and monetary stimulus from the system, the economy must find a self-sustaining balance to continue its forward momentum. Of course, the Obama administration and Congress are grappling with credit-rating agency reform, banking reform, and the role of the Federal Reserve and U.S. government in the oversight of financial institutions and the markets, among many critical issues. In our view, over time, these efforts may work to redress some of the systemic imbalances revealed in our global financial system, providing additional stability to the economy and markets.
We believe that the U.S. and global economic recovery will move ahead at a pace largely determined by businesses and the consumer. Corporate earnings reports have been strong and businesses appear to be positioned for growth, with larger inventories and increased spending on equipment. In terms of the consumer, however, as long as unemployment, foreclosures, and consumer debt remain relatively high, it will be difficult for the economic expansion to truly take hold.
Check Your Portfolio Allocations
In view of shifting market conditions, it may be wise to review your overall portfolio asset allocation and investment strategy with your financial advisor. Check to ensure that your target mix of U.S. and international stocks, bonds, and cash is well-diversified and appropriate given your investment goals, stage of life, and attitude toward risk.
We encourage you to visit our web site, www.calvert.com, for frequent updates and commentary on economic and market developments from Calvert professionals.
As always, we appreciate your investing with Calvert.
Sincerely,
Barbara J. Krumsiek
President and CEO
Calvert Group, Ltd.
April 2010
SRI Update
from the Calvert Sustainability Research Department
Calvert continues to advocate for responsible management of environmental, social, and governance (ESG) factors, which we believe create long-term value and are even more important during this period of recovery from the financial crisis of 2008 and 2009. We've also had unprecedented opportunities to help create new policies in these areas--and make sure the voices of our shareholders are heard loud and strong.
Financial Reform
The financial crisis of the past two years has revealed a number of critical issues and risks that need to be addressed if we are to prevent a repeat experience in the future. Calvert has been working to promote financial reform at the regulatory and legislative level--particularly to fortify the regulatory framework, strengthen consumer protections, and promote more responsible corporate governance.
One such area of financial reform relating to consumer protection is bank overdraft fee practices. We are leading an informal investor coalition that has engaged companies, supported legislation in Congress, and submitted comments to the Federal Reserve calling for changes in how banks provide short-term loans to consumers. We also filed shareholder resolutions calling on BB&T and Capital One to report to shareholders about their overdraft policies and practices, with an eye toward getting them to identify those that are abusive and predatory.
Other Shareholder Advocacy
For the 2010 proxy season, Calvert filed or co-filed 42 resolutions, focusing on climate change, board and employee diversity, executive compensation, sustainability reporting, and political contributions. To date, 26 resolutions have been withdrawn after companies agreed to address our concerns.
Say on Pay
It's particularly notable that we were able to successfully withdraw our "say on pay" resolutions at JPMorgan Chase, American Express, and Morgan Stanley after each agreed to hold a referendum on their compensation practices as part of the proxy statements for their 2010 annual meetings.
"Say on Pay" resolutions have become increasingly common since the financial crisis and bailout focused scrutiny on executive compensation and bonuses. Recipients of Troubled Asset Relief Program funding were required to implement advisory votes on executive pay, but those requirements end when companies repay their obligations. However, we are also working to persuade legislators to pass a bill that requires every publicly owned company to establish an annual advisory vote on pay.
Climate Change
Through participation in the Investor Network on Climate Risk and company dialogues, we have stepped up our support for incentives that will encourage companies to reduce carbon emissions. Calvert also met with several Securities and Exchange Commission (SEC) commissioners about providing interpretive guidance on how corporations should disclose greenhouse gas emissions data and present their analysis of climate risks and opportunities in filings. The SEC subsequently voted 3-2 to approve the measure, which is a major step toward increasing transparency on these issues.
Board Diversity
We were also pleased to see the SEC approve requirements for companies to disclose whether they consider diversity in identifying board director nominees. Public companies must also say if they have a stated policy to this effect and, if they do, they must also disclose how the policy is implemented and its effectiveness measured. Calvert helped lead efforts in favor of this requirement and, in fact, our comments are cited six times in the final SEC rule.
Calvert published a corporate board diversity disclosure scorecard that outlines how companies in the Russell 1000 Index have responded to the new disclosure requirements and analyzes any progress between disclosures made in 2009 and 2010. So far, we are pleased to see that a few companies provide previously unreleased information on the gender and racial make-up of their directors as well as statements about the value of diversity. However, we are disappointed that so few companies have a formal policy on director diversity.
The Women's Principles
Calvert continues to work with the United Nations Global Compact and the United Nations Development Fund for Women (UNIFEM) to create an international framework for the Calvert Women's Principles® (CWP). In March, this resulted in the launch of the Women's Empowerment Principles, which are based on the CWP. The launch event also honored International Women's Day by bringing together a variety of organizations to further explore how corporations in every industry and region around the world can apply these Principles.
We are also working with the Global Reporting Initiative Gender Working Group to update the G3 Guidelines to better address gender-related issues in sustainability reporting. Also the Gender Equality Principles Initiative--a partnership between the San Francisco Department on the Status of Women, Calvert, and Verité--launched a new website in March to provide companies with tools and resources to improve gender equality from the factory floor to the boardroom.
Other accomplishments include:
After three years of asking Allergan to provide annual updates on its efforts to eliminate the use of animals in Botox® safety testing, the company announced in January that it has cut animal use in its testing protocol by 78%. While we would prefer a 100% reduction, we believe this dramatic cut indicates a serious commitment to this goal.
Calvert has also been working on several fronts to help companies ensure that minerals in their electronics components are not fueling the war in the Democratic Republic of the Congo. More than five million lives have been lost and countless women and children victimized by brutal sexual violence in the Congo as armed groups fight for control of some of the richest deposits of tin, tantalum, tungsten, and gold in the world.
Community Investments
Many of our Funds participate in Calvert's High Social Impact Investing program, which is administered through the Calvert Social Investment Foundation. This community investment program may allocate a small percentage of Fund assets at below-market interest rates to investments that provide economic opportunity for struggling populations.1
One example of those supported by the Foundation's work is Alice, a 33-year old Kenyan woman with a large family who lost almost everything to political violence in 2008. However, a small loan from the Kenya Women's Finance Trust has enabled Alice to set up a small shop that provides for her family and sends her children to school.
Special Equities
A modest but important portion of certain funds is allocated to small private companies that are developing products or services that address important sustainability or environmental issues. One new addition was IGNIA Fund I, LP, a venture capital fund that invests in commercially promising businesses that improve the lives of those at the bottom of the socioeconomic pyramid. The Obama administration recently recognized IGNIA for its role in testing an innovative social impact star rating system that allows investors to better compare investment opportunities and helps channel more capital to higher-impact investments.
Also, a larger firm acquired Neodiagnostix--a special equities holding that provides innovative non-invasive tests for cervical cancer--during the reporting period, which provided a nice return for investors.2
1. As of March 31, 2010, Calvert Social Investment Foundation Community Investment Notes represented the following percentages of Fund net assets: Calvert Social Investment Fund (CSIF) Balanced Portfolio 1.07%, CSIF Bond Portfolio 0.35%, CSIF Equity Portfolio 0.50%, Calvert Capital Accumulation Fund 1.35%, Calvert World Values International Equity Fund 1.14%, Calvert New Vision Small Cap Fund 1.34%, and Calvert Large Cap Growth Fund 0.38%. The Calvert Social Investment Foundation is a 501(c)(3) nonprofit organization. The Foundation's Community Investment Note Program is not a mutual fund and should not be confused with any Calvert Group-sponsored investment product.
2. As of March 31, 2010, Ignia Fund I, LP represented 0.02% of Calvert Large Cap Growth Fund; Neodiagnostix represented 0.02% of CSIF Equity Portfolio. All holdings are subject to change without notice.
As of March 31, 2010, the following companies represented the following percentages of Fund net assets: BB&T represented 0.31% of Calvert Social Index Fund. Capital One represented 0.26% of Calvert Social Index Fund, 0.69% of CSIF Enhanced Equity Po rtfolio, 0.64% of CSIF Balanced Portfolio, and 1.38% of CSIF Bond Portfolio. JPMorgan Chase represented 0.69% of CSIF Balanced Portfolio, 2.69% of CSIF Bond Portfolio, 2.50% of Calvert Social Index Fund and 3.16% of CSIF Enhanced Equity Portfolio. American Express represented 0.14% of CSIF Balanced Portfolio, 1.72% of CSIF Enhanced Equity Portfolio and 0.61% of Calvert Social Index Fund. Morgan Stanley represented 0.91% of Calvert Large Cap Value Fund. Allergan represented 1.15% of CSIF Equity Portfolio, 1.76% of Calvert Large Cap Growth Fund and 0.28% of Calvert Social Index Fund.
All holdings are subject to change without notice.
Portfolio Management Discussion
Natalie A. Trunow
Senior Vice President, Chief Investment Officer - Equities
Calvert Asset Management Company
Performance
Calvert World Values International Equity Fund Class A shares (at NAV) returned -0.09% for the six-month period ended March 31, 2010, underperforming the 3.25% return of the MSCI Europe, Australasia, Far East Investable Market Index (MSCI EAFE IMI). The Fund's underperformance was primarily due to weak stock selection. Poor sector allocation also detracted from performance, but to a lesser extent.
At the end of the fourth quarter, Calvert made extensive changes to the management structure of Calvert World Values International Equity Fund. On December 8, 2009, the Fund's Board of Directors voted to approve a new multi-manager structure of Thornburg Investment Management, Martin Currie, and Calvert Asset Management Company (CAMCO). CAMCO managed the transition of the Fund's assets during December with all of the new holdings in place by December 31, 2009. Due to the management changes, the discussion of the Fund's performance below is divided
Portfolio Statistics
March 31, 2010
Investment Performance
(total return at NAV*)
| 6 Months | 12 Months |
| ended | ended |
| 3/31/10 | 3/31/10 |
Class A | -0.09% | 45.80% |
Class B | -0.65% | 44.26% |
Class C | -0.50% | 44.58% |
Class I | 0.33% | 46.96% |
Class Y | 0.12% | 46.51% |
MSCI EAFE IMI | 3.25% | 56.79% |
Lipper International Multi-Cap Value Funds Avg. | 3.41% | 56.41% |
| | |
Ten Largest Stock Holdings | % of Net Assets | |
Roche Holding AG | 2.2% | |
Canadian National Railway Co. | 2.0% | |
Pearson plc | 1.9% | |
Potash Corporation of | | |
Saskatchewan, Inc. | 1.4% | |
Novo Nordisk A/S, Series B | 1.4% | |
Hennes & Mauritz AB, B Shares | 1.3% | |
Standard Chartered plc | 1.3% | |
Novartis AG | 1.2% | |
Tesco plc | 1.2% | |
Reckitt Benckiser Group plc | 1.2% | |
Total | 15.1% | |
*Investment performance/return at NAV does not reflect the deduction of the Fund's maximum 4.75% front-end sales charge or any deferred sales charges.
into two parts: performance under the Fund's prior subadvisor, Acadian Asset Management, and the transition and performance under the current multi-manager structure.
Investment Climate
Over the last six months, stock markets around the globe have continued to rally. In the U.S., the Russell 1000 Index gained 12.11%, but was edged out by both the Russell Mid Cap Index's return of 15.01% and the 13.07% return for the Russell 2000 Index, a measure of small-cap stocks. Large-cap growth stocks outperformed large-cap value stocks for the period, while value held a slight advantage among small- and mid-cap stocks.
Results were more mixed with international stocks. A strong U.S. dollar relative to other developed-market currencies hurt Americans who invested in foreign equities, trimming 4.67% off of local market returns in non-U.S. developed markets. However, they fared better in emerging markets, with the MSCI Emerging Markets IMI up 12.02%, boosted by the weakness of the U.S. dollar relative to emerging market currencies.
Overall, equity markets have built on the rally that started in early March 2009 when investors began to perceive the "green shoots" of an economic recovery. Economic news throughout the period suggested that a slow--and at times uneven--recovery was under way. U.S. gross domestic product (GDP) has resumed its growth after bottoming out during the recession. However, persistently high unemployment, continued weakness in residential and commercial real estate markets, and somewhat wary consumers have limited the upside of this recovery.
Portfolio Commentary
The Fund underperformed the MSCI EAFE IMI Index by 3.34% for the entire reporting period largely as a result of weak stock selection, primarily in the fourth quarter of 2009. During that quarter, stock selection was weakest in the Materials, Energy, Telecommunications, and Industrials sectors. Nippon Telegraph and Telephone, Fuji Media Holdings, ING Groep, and Astellas Pharmaceuticals were the worst performers. Stock selection in the Consumer Discretionary sector, particularly Nissan Motor and Aisin Seiki, provided the largest positive contribution to return.
Sector selection also detracted from performance during the last quarter of 2009. Specifically, an underweight to Materials and an overweight to Information Technology detracted more than 0.80% from the Fund's return. However, the Fund received some benefit from being underweight Financials.
Portfolio Statistics
Economic Sectors | % of Total Investments |
Consumer Discretionary | 14.7% |
Consumer Staples | 6.3% |
Energy | 7.3% |
Financials | 26.0% |
Health Care | 11.4% |
Industrials | 10.1% |
Information Technology | 7.3% |
Limited Partnership Interest | 0.8% |
Materials | 5.5% |
Telecommunication Services | 5.9% |
Time Deposit | 1.2% |
Utilities | 2.8% |
Venture Capital | 0.7% |
Total | 100% |
Portfolio Statistics
March 31, 2010
Average Annual Total Returns
(with max. load)
| Class A Shares |
One year | 38.91% |
Five year | -1.82% |
Ten year | -2.77% |
| Class B Shares |
One year | 39.26% |
Five year | -2.08% |
Ten year | -3.43% |
| Class C Shares |
One year | 43.58% |
Five year | -1.70% |
Ten year | -3.20% |
Portfolio Statistics
March 31, 2010
Average Annual Total Returns
| Class I Shares |
One year | 46.96% |
Five year | -0.15% |
Ten year | -1.53% |
| Class Y Shares** |
One year | 46.51% |
Five year | -0.73% |
Ten year | -2.24% |
**Calvert World Values International Equity Fund first offered Class Y Shares on October 31, 2008. Performance prior to that date reflects the performance of Class A Shares at net asset value (NAV). Actual Class Y Share performance would have been different.
The performance data shown represents past performance, does not guarantee future results, and does not reflect the deduction of taxes that a shareholder would pay on the Fund's/Portfolio's distributions or the redemption of Fund/Portfolio shares. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Visit www.calvert.com for current performance data. The gross expense ratio for Class A Shares is 1.87%. This number may vary from the expense ratio shown elsewhere in this report because it is based on a different time period and, if applicable, does not include fee or expense waivers. Performance data quoted already reflects deduction of fund operating expenses. New subadvisor assumed management of the Fund effective December 2009, and previously in March 2006 and March 2002.
After the change to the multi-manager structure, performance improved, but the Fund ended the first quarter of 2010 slightly behind the Index. Stock selection was very strong in Financials, Consumer Discretionary, and Energy. Names like Nintendo, Novo Nordisk, Canadian National Railway, and Cinsure were the Fund's top contributors. Stock selection in Information Technology and Materials lagged, with Taiwan Semiconductor Manufacturing and Lafarge hampering performance. Sector allocation also detracted slightly, with the underweight to Industrials accounting for the lion's share of the negative impact.
Performance Comparison
Comparison of change in value of $10,000 investment.
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%, or deferred sales charge, as applicable. No sales charge has been applied to the index used for comparison. However, the Lipper average does reflect the deduction of the category's average front-end sales charge. 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.
Outlook
Although the economic recovery may seem slow and painful--especially when it comes to unemployment--it is on track. Industrial production posted a small 0.1% rise in February after a 0.9% jump in January and a 0.7% jump in December, confirming that the manufacturing sector is still leading the way. We continue to believe that the consumer will be the next major factor necessary for a robust and extended economic recovery and that any meaningful uptick in consumer sentiment and spending in combination with ongoing recovery in the manufacturing sector could significantly improve the robustness of the economic upturn and further energize the markets. We believe that the consumer will start to return to more normal spending levels this year (although not the levels seen during the height of the housing bubble) if the employment picture improves as businesses run out of room to cut costs and start to hire new workers. It appears that the market may be anticipating a similar trend, with the Consumer Dis cretionary sector returning over 10% for the quarter.
A short-term concern is that once the strong contribution to GDP from inventory rebuilding subsides and the effects of the stimulus wane, GDP growth may slow. We believe that, while an important concern, this is unlikely to result in negative GDP growth that would lead to a double-dip recession in 2010.
April 2010
As of March 31, 2010, the following companies represented the following percentages of Fund net assets: Nippon Telegraph and Telephone 0.64%, Fuji Media Holdings 0%, ING Groep 1.74%, Astellas Pharmaceuticals 0%, Nissan Motor 0.06%, Aisin Seiki 0%, Nintendo 0.70%, Novo Nordisk 1.56%, Canadian National Railway 2.04%, Cinsure 0.52%, Taiwan Semiconductor Manufacturing 0.99%, and Lafarge 0.82%. All holdings are subject to change without notice.
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) and redemption fees; and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
This Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (October 1, 2009 to March 31, 2010).
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning
Account Value
10/1/09 | Ending Account
Value
3/31/10 | Expenses Paid
During Period*
10/1/09 - 3/31/10 |
Class A | | | |
Actual | $1,000.00 | $999.10 | $8.97 |
Hypothetical | $1,000.00 | $1,015.96 | $9.05 |
(5% return per year before expenses) | | | |
Class B | | | |
Actual | $1,000.00 | $993.50 | $14.76 |
Hypothetical | $1,000.00 | $1,010.12 | $14.88 |
(5% return per year before expenses) | | | |
Class C | | | |
Actual | $1,000.00 | $994.20 | $13.37 |
Hypothetical | $1,000.00 | $1,011.52 | $13.49 |
(5% return per year before expenses) | | | |
Class I | | | |
Actual | $1,000.00 | $1,002.60 | $5.29 |
Hypothetical | $1,000.00 | $1,019.65 | $5.34 |
(5% return per year before expenses) | | | |
Class Y | | | |
Actual | $1,000.00 | $1,001.20 | $6.94 |
Hypothetical | $1,000.00 | $1,018.00 | $6.99 |
(5% return per year before expenses) | | | |
* Expenses are equal to the Fund's annualized expense ratio of 1.80%, 2.97%, 2.69%, 1.06% and 1.39% for Class A, Class B, C lass C, Class I and Class Y, respectively, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period).
STATEMENT OF NET ASSETS
March 31, 2010
Equity Securities - 96.4% | Shares | Value |
Australia - 2.1% | | |
Amcor Ltd. (ADR) | 7,383 | $172,762 |
Australia & New Zealand Banking Group Ltd. (ADR) | 11,331 | 262,199 |
BlueScope Steel Ltd.* | 867,141 | 2,313,184 |
Computershare Ltd. (ADR) | 928 | 10,672 |
CSL Ltd. (ADR) | 3,294 | 55,010 |
Lend Lease Group (ADR) | 1,117 | 8,713 |
National Australia Bank Ltd. (ADR) | 27,293 | 688,056 |
Santos Ltd. | 190,373 | 2,558,390 |
Sims Metal Management Ltd. (ADR) | 34,863 | 684,708 |
Telstra Corp Ltd. (ADR) | 40,754 | 560,368 |
Westpac Banking Corp. (ADR) | 4,713 | 598,928 |
Woodside Petroleum Ltd. (ADR) | 1,533 | 65,904 |
| | 7,978,894 |
Austria - 0.5% | | |
Verbund - Oesterreichische Elektrizitaetswirtschafts AG | 48,723 | 1,936,737 |
| | |
Belgium - 0.2% | | |
Delhaize Group SA (ADR) | 9,166 | 737,771 |
Fortis (ADR)* | 14,836 | 52,520 |
| | 790,291 |
Bermuda - 0.2% | | |
Signet Jewelers Ltd.* | 26,387 | 853,355 |
| | |
Brazil - 0.9% | | |
BM&FBOVESPA SA | 187,693 | 1,268,103 |
Natura Cosmeticos SA | 104,499 | 2,116,896 |
Tractebel Energia SA (ADR) | 787 | 8,775 |
| | 3,393,774 |
Canada - 5.9% | | |
Brookfield Properties Corp. | 49,183 | 755,451 |
Canadian National Railway Co. | 128,124 | 7,775,871 |
EnCana Corp. | 68,816 | 2,141,078 |
Loblaw Co.'s Ltd. | 74,000 | 2,732,969 |
Potash Corporation of Saskatchewan, Inc. | 44,538 | 5,315,610 |
Suncor Energy, Inc. | 68,000 | 2,211,431 |
Thomson Reuters Corp. | 38,100 | 1,386,478 |
| | 22,318,888 |
Chile - 0.3% | | |
Banco Santander Chile (ADR) | 19,041 | 1,298,977 |
| | |
Equity Securities - Cont'd | Shares | Value |
China - 1.9% | | |
Aluminum Corp. of China Ltd. (ADR)* | 53,490 | $1,376,833 |
China Merchants Bank Co. Ltd. | 446,915 | 1,208,679 |
China Merchants Holdings International Co. Ltd. | 298,000 | 1,089,937 |
China Southern Airlines Co. Ltd. (ADR)* | 7,297 | 163,088 |
CNinsure, Inc. (ADR) | 75,100 | 1,998,411 |
Mindray Medical International Ltd. (ADR) | 36,600 | 1,332,972 |
| | 7,169,920 |
Colombia - 0.6% | | |
BanColombia SA (ADR) | 46,141 | 2,106,798 |
| | |
Denmark - 2.6% | | |
Danske Bank A/S (ADR)* | 4,945 | 60,329 |
H Lundbeck A/S (ADR) | 1,545 | 29,046 |
Novo Nordisk A/S, Series B | 67,108 | 5,214,533 |
Novo Nordisk A/S (ADR) | 9,711 | 748,913 |
Novozymes A/S (ADR) | 351 | 39,224 |
Torm A/S (ADR) | 4,774 | 48,981 |
Vestas Wind Systems A/S* | 56,071 | 3,050,963 |
Vestas Wind Systems A/S (ADR)* | 37,853 | 683,625 |
| | 9,875,614 |
Finland - 0.0% | | |
Metso Oyj (ADR) | 820 | 27,388 |
Stora Enso Oyj (ADR)* | 18,785 | 143,142 |
| | 170,530 |
France - 9.9% | | |
Air France-KLM (ADR)* | 4,160 | 65,104 |
Air Liquide SA | 22,277 | 2,677,921 |
Air Liquide SA (ADR) | 6,983 | 168,081 |
AXA SA | 123,608 | 2,753,450 |
AXA SA (ADR) | 120,180 | 2,648,767 |
BNP Paribas | 45,580 | 3,505,243 |
BNP Paribas (ADR) | 13,995 | 535,309 |
Carrefour SA (ADR) | 42,503 | 406,754 |
Cie Generale d'Optique Essilor International SA (ADR) | 627 | 19,970 |
Compagnie Generale des Etablissements Michelin (ADR) | 605 | 8,809 |
Credit Agricole SA (ADR) | 6,507 | 56,155 |
Dassault Systemes SA | 38,521 | 2,281,703 |
France Telecom SA | 83,439 | 1,999,159 |
France Telecom SA (ADR) | 52,142 | 1,252,972 |
Gemalto NV* | 50,931 | 2,207,048 |
Groupe Danone | 47,866 | 2,887,347 |
Lafarge SA | 44,475 | 3,133,940 |
Lafarge SA (ADR) | 4,091 | 72,370 |
L'Oreal SA (ADR) | 15,673 | 330,700 |
Publicis Groupe SA (ADR) | 7,293 | 155,851 |
Sanofi-Aventis SA | 47,723 | 3,562,256 |
Sanofi-Aventis SA (ADR) | 72,675 | 2,715,138 |
Schneider Electric SA | 26,409 | 3,101,764 |
| | |
Equity Securities - Cont'd | Shares | Value |
France - Cont'd | | |
Schneider Electric SA (ADR) | 3,239 | $37,896 |
SCOR SE (ADR) | 3,770 | 9,387 |
Veolia Environnement (ADR) | 36,742 | 1,270,171 |
| | 37,863,265 |
Germany - 3.4% | | |
Adidas AG | 40,210 | 2,153,606 |
Adidas AG (ADR) | 2,352 | 62,798 |
Allianz SE (ADR) | 104,091 | 1,301,138 |
Deutsche Bank AG | 50,226 | 3,874,083 |
Deutsche Post AG (ADR)* | 1,438 | 24,878 |
Merck KGaA (ADR) | 2,110 | 56,759 |
SAP AG | 92,848 | 4,503,186 |
Volkswagen AG, Preferred* | 7,342 | 674,548 |
Volkswagen AG (ADR): | | |
Common | 5,580 | 109,368 |
Preferred | 993 | 17,973 |
| | 12,778,337 |
Greece - 0.3% | | |
Alpha Bank AE (ADR)* | 5,620 | 13,151 |
National Bank of Greece SA* | 52,027 | 1,048,460 |
National Bank of Greece SA (ADR)* | 23,134 | 93,924 |
| | 1,155,535 |
Guernsey - 0.8% | | |
Amdocs Ltd.* | 103,397 | 3,113,284 |
| | |
Hong Kong - 2.4% | | |
Bank of East Asia Ltd. (ADR) | 19,468 | 70,085 |
Hang Lung Properties Ltd. | 612,989 | 2,467,003 |
Hang Lung Properties Ltd. (ADR) | 124,871 | 2,536,130 |
Hang Seng Bank Ltd. (ADR) | 3,879 | 53,763 |
Hengdeli Holdings Ltd. | 3,472,000 | 1,475,573 |
Hong Kong Exchanges and Clearing Ltd. | 152,746 | 2,549,422 |
Hong Kong Exchanges and Clearing Ltd. (ADR) | 2,672 | 44,756 |
MTR Corp. (ADR) | 273 | 10,240 |
| | 9,206,972 |
India - 0.4% | | |
HDFC Bank Ltd. (ADR) | 1,026 | 143,014 |
Infosys Technologies Ltd. (ADR) | 25,035 | 1,473,310 |
Patni Computer Systems Ltd. (ADR) | 3,279 | 77,975 |
| | 1,694,299 |
Indonesia - 0.7% | | |
Bank Mandiri Tbk PT | 4,597,000 | 2,702,780 |
Indosat Tbk PT (ADR) | 3,053 | 92,995 |
| | 2,795,775 |
Ireland - 0.2% | | |
Allied Irish Banks plc (ADR)* | 242,571 | 781,079 |
| | |
Equity Securities - Cont'd | Shares | Value |
Israel - 0.6% | | |
Bezeq Israeli Telecommunication Corp Ltd. | 769,270 | $2,185,059 |
| | |
Italy - 0.9% | | |
Intesa Sanpaolo SpA* | 656,704 | 2,449,189 |
Luxottica Group SpA (ADR) | 26,917 | 720,837 |
Telecom Italia SpA (ADR) | 15,080 | 216,247 |
| | 3,386,273 |
Japan - 11.8% | | |
ACom Co. Ltd. (ADR) | 2,649 | 10,728 |
Aeon Co. Ltd. (ADR) | 5,913 | 66,344 |
Asahi Glass Co. Ltd. (ADR) | 985 | 10,943 |
Bank of Yokohama Ltd. | 486,741 | 2,386,803 |
Bank of Yokohama Ltd. (ADR) | 197 | 9,604 |
Brother Industries Ltd. (ADR) | 82 | 9,840 |
Central Japan Railway Co. (ADR) | 1,364 | 10,557 |
Dai Nippon Printing Co. Ltd. (ADR) | 48,558 | 659,418 |
Daiwa House Industry Co. Ltd. (ADR) | 704 | 79,552 |
Denso Corp. (ADR) | 468 | 55,463 |
East Japan Railway Co. (ADR) | 5,189 | 60,192 |
Eisai Co. Ltd. (ADR) | 247 | 8,793 |
Fanuc Ltd. | 23,595 | 2,506,021 |
Fujitsu Ltd. (ADR) | 870 | 28,388 |
Honda Motor Co. Ltd. (ADR) | 61,829 | 2,181,945 |
Kao Corp. (ADR) | 20,727 | 524,393 |
Kobe Steel Ltd. (ADR)* | 997 | 10,668 |
Konami Corp. (ADR) | 548 | 10,538 |
Kubota Corp. (ADR) | 8,435 | 384,552 |
Minebea Co. Ltd. (ADR) | 921 | 11,116 |
Mitsubishi Estate Co. Ltd. (ADR) | 864 | 142,888 |
Mitsui Fudosan Co. Ltd. | 140,256 | 2,383,151 |
Mizuho Financial Group, Inc. (ADR) | 168,354 | 663,315 |
MS&AD Insurance Group Holdings (ADR) | 17,317 | 238,455 |
Nikon Corp. | 113,226 | 2,474,243 |
Nikon Corp. (ADR) | 45 | 9,900 |
Nintendo Co. Ltd. (ADR) | 64,317 | 2,678,803 |
Nippon Telegraph & Telephone Corp. (ADR) | 115,547 | 2,428,798 |
Nippon Yusen Kabushiki Kaisha | 588,000 | 2,323,041 |
Nippon Yusen KK (ADR) | 42,343 | 328,582 |
Nissan Motor Co. Ltd. (ADR)* | 12,611 | 216,909 |
Nitto Denko Corp. (ADR) | 101 | 39,280 |
Nomura Holdings, Inc. | 383,485 | 2,828,920 |
NSK Ltd. (ADR) | 371 | 29,587 |
NTT DoCoMo, Inc. (ADR) | 58,275 | 885,780 |
ORIX Corp. (ADR)* | 6,323 | 278,908 |
Panasonic Corp. | 188,716 | 2,889,335 |
Panasonic Corp. (ADR) | 52,262 | 800,654 |
Ricoh Co. Ltd. | 141,000 | 2,204,069 |
Ricoh Co. Ltd. (ADR) | 1,188 | 93,496 |
Secom Co. Ltd. (ADR) | 575 | 50,140 |
Sega Sammy Holdings, Inc. (ADR) | 24,160 | 72,238 |
| | |
Equity Securities - Cont'd | Shares | Value |
Japan - Cont'd | | |
Sekisui House Ltd. (ADR) | 26,936 | $268,283 |
Sharp Corp. (ADR) | 4,450 | 55,180 |
Shiseido Co. Ltd. (ADR) | 7,312 | 158,670 |
Sony Corp. (ADR) | 54,109 | 2,073,457 |
Sumitomo Trust & Banking Co. Ltd. (ADR) | 68,084 | 398,291 |
Teijin Ltd. (ADR) | 274 | 9,152 |
Tokyo Gas Co. Ltd. | 698,118 | 3,079,493 |
Toray Industries, Inc. (ADR) | 501 | 29,359 |
TOTO Ltd. (ADR) | 290 | 19,793 |
Toyota Motor Corp. | 89,794 | 3,600,412 |
Toyota Motor Corp. (ADR) | 28,344 | 2,279,424 |
Trend Micro, Inc. (ADR) | 480 | 16,704 |
| | 45,074,568 |
Mexico - 0.8% | | |
America Movil SAB de CV (ADR), Series L | 36,843 | 1,854,677 |
Gruma SAB de CV (ADR)* | 6,256 | 56,116 |
Grupo Televisa SA (ADR) | 44,129 | 927,592 |
| | 2,838,385 |
Netherlands - 5.1% | | |
AEGON NV, NY Shares* | 71,658 | 487,991 |
ASML Holding NV | 81,071 | 2,901,298 |
ING Groep NV (ADR)* | 170,545 | 1,698,628 |
ING Groep NV (CVA)* | 392,472 | 3,923,807 |
Koninklijke KPN NV | 103,700 | 1,645,181 |
Koninklijke Philips Electronics NV: | | |
Common | 102,754 | 3,299,259 |
NY Shares | 96,797 | 3,099,440 |
Reed Elsevier NV (ADR) | 39,980 | 969,915 |
TNT NV (ADR) | 10,112 | 288,698 |
Unilever NV, NY Shares | 33,042 | 996,547 |
Wolters Kluwer NV (ADR) | 7,522 | 162,475 |
| | 19,473,239 |
Norway - 2.6% | | |
DnB NOR ASA* | 257,967 | 2,948,219 |
Petroleum Geo-Services ASA* | 192,737 | 2,525,513 |
Petroleum Geo-Services ASA (ADR)* | 7,385 | 96,448 |
Statoil ASA (ADR) | 114,118 | 2,662,373 |
Storebrand ASA* | 193,675 | 1,531,810 |
Tomra Systems ASA (ADR) | 2,025 | 9,922 |
Yara International ASA (ADR) | 4,579 | 199,186 |
| | 9,973,471 |
Portugal - 0.6% | | |
Galp Energia SGPS SA, B Shares | 129,153 | 2,246,376 |
| | |
Singapore - 0.7% | | |
City Developments Ltd. (ADR) | 2,281 | 16,993 |
Oversea-Chinese Banking Corp. Ltd. | 420,830 | 2,620,129 |
| | 2,637,122 |
| | |
Equity Securities - Cont'd | Shares | Value |
South Africa - 1.7% | | |
African Bank Investments Ltd. (ADR) | 488 | $11,966 |
Gold Fields Ltd. | 185,959 | 2,338,277 |
Gold Fields Ltd. (ADR) | 170,050 | 2,146,031 |
Nedbank Group Ltd. (ADR) | 1,155 | 43,890 |
Telkom SA Ltd. (ADR) | 523 | 9,702 |
Tiger Brands Ltd. (ADR) | 1,670 | 42,418 |
Truworths International Ltd. | 255,500 | 1,822,387 |
VenFin DD Holdings Ltd.* | 55,800 | 99,690 |
| | 6,514,361 |
South Korea - 0.6% | | |
KT Corp. (ADR) | 108,945 | 2,261,698 |
| | |
Spain - 3.0% | | |
Banco Santander SA | 215,123 | 2,862,984 |
Banco Santander SA (ADR) | 158,377 | 2,101,663 |
Inditex SA | 39,591 | 2,613,351 |
Telefonica SA | 155,046 | 3,678,131 |
| | 11,256,129 |
Sweden - 2.3% | | |
Atlas Copco AB, Series B | 208,936 | 2,934,979 |
Atlas Copco AB (ADR) | 6,415 | 99,753 |
Hennes & Mauritz AB, B Shares | 78,227 | 5,093,700 |
Hennes & Mauritz AB (ADR) | 9,246 | 120,290 |
Sandvik AB (ADR)* | 2,322 | 29,489 |
SKF AB (ADR) | 1,091 | 19,431 |
Telefonaktiebolaget LM Ericsson (ADR) | 31,276 | 326,209 |
| | 8,623,851 |
Switzerland - 8.8% | | |
Credit Suisse Group AG | 70,096 | 3,618,309 |
Credit Suisse Group AG (ADR) | 27,981 | 1,437,664 |
Julius Baer Group Ltd. | 42,873 | 1,557,500 |
Logitech International SA* | 119,234 | 1,964,773 |
Novartis AG | 85,212 | 4,609,007 |
Novartis AG (ADR) | 53,352 | 2,886,343 |
Roche Holding AG | 51,927 | 8,433,391 |
Roche Holding AG (ADR) | 67,094 | 2,718,649 |
Sonova Holding AG | 18,697 | 2,326,249 |
Swiss Reinsurance (ADR)* | 3,502 | 171,948 |
Zurich Financial Services AG | 11,038 | 2,833,670 |
Zurich Financial Services AG (ADR) | 33,596 | 856,698 |
| | 33,414,201 |
Taiwan - 1.2% | | |
Chunghwa TeleCom Co. Ltd. (ADR) | 49,170 | 955,373 |
Taiwan SemiConductor Manufacturing Co. Ltd. (ADR) | 358,621 | 3,761,934 |
| | 4,717,307 |
| | |
Equity Securities - Cont'd | Shares | Value |
Turkey - 0.4% | | |
Turkcell Iletisim Hizmet AS (ADR) | 95,249 | $1,434,450 |
| | |
United Kingdom - 20.1% | | |
Barclays plc | 684,016 | 3,741,742 |
Barclays plc (ADR) | 62,299 | 1,355,003 |
BG Group plc | 223,246 | 3,865,648 |
BG Group plc (ADR) | 31,732 | 2,752,751 |
British Airways plc (ADR)* | 609 | 22,320 |
British Land Co. plc (ADR) | 1,246 | 9,220 |
Bunzl plc (ADR) | 343 | 19,105 |
Cairn Energy plc* | 391,771 | 2,480,343 |
Capita Group plc | 216,239 | 2,483,626 |
Centrica plc | 665,581 | 2,969,914 |
Centrica plc (ADR)* | 48,010 | 855,058 |
Compass Group plc | 322,548 | 2,575,867 |
Compass Group plc (ADR) | 10,189 | 81,003 |
Cookson Group plc* | 283,593 | 2,353,038 |
Experian plc (ADR) | 8,550 | 84,047 |
GlaxoSmithKline plc | 202,324 | 3,887,343 |
GlaxoSmithKline plc (ADR) | 35,061 | 1,350,550 |
HSBC Holdings plc (s) | 331,441 | 3,361,445 |
HSBC Holdings plc (ADR) | 40,104 | 2,032,872 |
International Power plc (ADR) | 1,308 | 63,608 |
J Sainsbury plc (ADR)* | 4,941 | 97,634 |
Johnson Matthey plc (ADR) | 190 | 10,070 |
Kingfisher plc | 1,216,487 | 3,959,821 |
Kingfisher plc (ADR) | 21,012 | 136,578 |
Legal & General Group plc (ADR) | 1,506 | 9,909 |
Man Group plc (ADR) | 1,874 | 7,028 |
Marks & Spencer Group plc (ADR) | 44,664 | 500,237 |
Next plc | 64,839 | 2,130,281 |
Old Mutual plc (ADR)* | 689 | 10,128 |
Pearson plc | 455,949 | 7,171,654 |
Pearson plc (ADR) | 22,389 | 351,283 |
Persimmon plc* | 310,142 | 2,191,914 |
Prudential plc (ADR) | 42,143 | 698,731 |
Reckitt Benckiser Group plc | 82,117 | 4,509,464 |
Reckitt Benckiser Group plc (ADR) | 14,983 | 164,364 |
Reed Elsevier plc (ADR) | 9,224 | 295,998 |
Sage Group plc (ADR) | 9,135 | 131,818 |
Scottish & Southern Energy plc (ADR) | 2,521 | 42,050 |
Smith & Nephew plc | 285,157 | 2,842,249 |
Smith & Nephew plc (ADR) | 13,005 | 651,030 |
Standard Chartered plc | 175,435 | 4,787,717 |
Tate & Lyle plc (ADR) | 333 | 9,128 |
Tesco plc | 694,278 | 4,590,025 |
Tesco plc (ADR) | 27,472 | 545,319 |
Tomkins plc (ADR) | 67,633 | 963,094 |
Unilever plc (ADR) | 89,367 | 2,616,666 |
Vodafone Group plc (ADR) | 34,941 | 813,776 |
Wolseley plc (ADR)* | 37,272 | 88,335 |
| | 76,670,804 |
| | |
Equity Securities - Cont'd | Shares | Value |
United States - 1.9% | | |
Atmos Energy Corp. | 6,247 | $178,477 |
Cimarex Energy Co. | 9,582 | 568,979 |
Distributed Energy Systems Corp.* | 308,138 | 1,880 |
Evergreen Solar, Inc.* | 1,400 | 1,582 |
H2Gen Innovations, Inc.: | | |
Common Stock (b)(i)* | 2,077 | - |
Common Warrants (strike price $1.00/share, | | |
expires 10/31/13) (b)(i)* | 27,025 | - |
Series A, Preferred (b)(i)* | 69,033 | - |
Series A, Preferred Warrants | | |
(strike price $1.00/share, expires 10/10/12) (b)(i)* | 1,104 | - |
Series B, Preferred (b)(i)* | 161,759 | - |
Series C, Preferred (b)(i)* | 36,984 | - |
Kraft Foods, Inc. | 7,616 | 230,308 |
Portland General Electric Co. | 20,387 | 393,673 |
Powerspan Corp.: | | |
Series A, Preferred (b)(i)* | 45,455 | 385,655 |
Series B, Preferred (b)(i)* | 20,000 | 203,548 |
Series C, Preferred (b)(i)* | 239,764 | 824,788 |
Series D, Preferred (b)(i)* | 45,928 | 157,992 |
Series D, Preferred Warrants (strike price $3.44/share, | | |
expires 12/31/12) (b)(i)* | 2,347 | - |
RF Technology, Inc. contingent deferred distribution (b)(i)* | 365,374 | 3,654 |
SEACOR Holdings, Inc.* | 18,728 | 1,510,601 |
SMARTHINKING, Inc.: | | |
Series 1-A, Convertible Preferred (b)(i)* | 104,297 | 318,794 |
Series 1-B, Convertible Preferred (b)(i)* | 163,588 | 168,370 |
Series 1-B, Preferred Warrants (strike price $0.01/share, | | |
expires 5/26/15) (b)(i)* | 11,920 | 12,149 |
Series 1-B, Preferred Warrants (strike price $1.53/share, | | |
expires 6/1/15) (b)(i)* | 32,726 | - |
Tidewater, Inc. | 39,479 | 1,866,172 |
Tutor Perini Corp.* | 9,980 | 217,065 |
| | 7,043,687 |
| | |
Total Equity Securities (Cost $359,026,944) | | 367,033,305 |
| | |
| Adjusted | |
Limited Partnership Interest - 0.8% | Basis | |
Balkan Financial Sector Equity Fund CV (b)(i)* | $498,412 | 410,858 |
China Environment Fund 2004 (b)(i)* | - | 196,255 |
Emerald Cleantech Fund I (b)(i)* | 947,741 | 479,941 |
GNet Defta Development Holdings LLC (a)(b)(i)* | 400,000 | 359,223 |
SEAF Central and Eastern European Growth | | |
Fund LLC (a)(b)(i)* | 337,178 | 528,591 |
SEAF India International Growth Fund (b)(i)* | 473,932 | 380,637 |
ShoreCap International LLC (b)(i)* | 224,109 | 795,635 |
Terra Capital (b)(i)* | 469,590 | 1 |
| | |
Total Limited Partnership Interest (Cost $3,350,961) | | 3,151,141 |
| | |
| Principal | |
Certificates Of Deposit - 0.1% | Amount | Value |
Self Help Credit Union, 1.80%, 2/23/11 (b)(k) | $250,000 | $249,625 |
| | |
Total Certificates of Deposit (Cost $250,000) | | 249,625 |
| | |
Venture Capital Debt Obligations - 0.1% | | |
Access Bank plc, 8.477%, 8/29/12 (b)(i) | 500,000 | 524,786 |
Mayer Laboratories, Inc., 6.00%, 12/31/01 (b)(i)(w) | 54,730 | 13,683 |
| | |
Total Venture Capital Debt Obligations (Cost $554,730) | | 538,469 |
| | |
High Social Impact Investments - 1.1% | | |
Calvert Social Investment Foundation Notes, 1.76%, | | |
7/1/11 (b)(i)(r) | 4,431,583 | 4,359,658 |
| | |
Total High Social Impact Investments (Cost $4,431,583) | | 4,359,658 |
| | |
Time Deposit - 1.2% | | |
State Street Corp. Time Deposit, 0.01%, 4/1/10 | 4,486,019 | 4,486,019 |
| | |
Total Time Deposit (Cost $4,486,019) | | 4,486,019 |
| | |
TOTAL INVESTMENTS (Cost $372,100,237) - 99.7% | | 379,818,217 |
Other assets and liabilities, net - 0.3% | | 1,127,336 |
Net Assets - 100% | | $380,945,553 |
| | |
Net Assets Consist of: | | |
Paid-in capital applicable to the following shares of common stock with 250,000,000 shares of $0.01 par value shares authorized: | | |
Class A: 18,652,950 shares outstanding | | $378,487,434 |
Class B: 645,254 shares outstanding | | 14,742,864 |
Class C: 1,937,730 shares outstanding | | 40,480,068 |
Class I: 6,350,522 shares outstanding | | 144,356,673 |
Class Y: 82,051 shares outstanding | | 988,304 |
Undistributed net investment income (loss) | | (62,859) |
Accumulated net realized gain (loss) on investments and foreign | | |
currency transactions | | (205,744,029) |
Net unrealized appreciation (depreciation) on investments, | | |
foreign currencies, and assets and liabilities
denominated in foreign currencies | | 7,697,098 |
Net Assets | | $380,945,553 |
| | |
Net Asset Value Per Share | | |
Class A (based on net assets of $255,844,633) | | $13.72 |
Class B (based on net assets of $7,949,246) | | $12.32 |
Class C (based on net assets of $23,267,274) | | $12.01 |
Class I (based on net assets of $92,710,817) | | $14.60 |
Class Y (based on net assets of $1,173,583) | | $14.30 |
See notes to financial statements.
Restricted Securities | | Acquisition Dates | Cost |
Access Bank plc, 8.477%, 8/29/12 | | 8/29/07 | $500,000 |
Balkan Financial Sector Equity Fund CV LP | | 1/12/06 - 2/3/10 | 498,412 |
Calvert Social Investment Foundation Notes, | | | |
1.76%, 7/1/11 | | 7/1/08 | 4,431,583 |
China Environment Fund 2004 LP | | 9/15/05 - 4/1/09 | - |
Emerald Cleantech Fund I LP | | 7/19/01 - 7/16/09 | 947,741 |
GNet Defta Development Holdings LLC, LP | | 8/30/05 | 400,000 |
H2Gen Innovations, Inc.: | | | |
Common Stock | | 11/4/04 | - |
Common Warrants (strike price $1.00/share, | | | |
expires 10/31/13) | | 11/4/04 | - |
Series A, Preferred | | 11/4/04 | 251,496 |
Series A, Preferred Warrants (strike price $1.00/share, | | | |
expires 10/10/12) | | 11/4/04 | - |
Series B, Preferred | | 10/21/04 - 10/27/04 | 161,759 |
Series C, Preferred | | 6/1/06 | 52,886 |
Mayer Laboratories, Inc., 6.00%, 12/31/01 | | 12/31/96 | 54,730 |
Powerspan Corp.: | | | |
Series A, Preferred | | 8/20/97 | 250,000 |
Series B, Preferred | | 10/5/99 | 200,000 |
Series C, Preferred | | 12/21/04 - 6/12/08 | 273,331 |
Series D, Preferred | | 6/20/08 | 157,996 |
Series D, Preferred Warrants (strike price $3.44/share, | | | |
expires 12/31/12) | | 12/5/07 - 6/20/08 | - |
RF Technology, Inc. contingent deferred distribution | | 7/17/06 | 104,368 |
SEAF Central and Eastern European Growth Fund LLC, LP | | 8/10/00 - 9/23/08 | 337,178 |
SEAF India International Growth Fund LP | | 3/22/05 - 5/8/09 | 473,932 |
ShoreCap International LLC, LP | | 8/12/04 - 12/15/08 | 224,109 |
SMARTHINKING, Inc.: | | | |
Series 1-A, Convertible Preferred | | 4/22/03 - 5/27/05 | 159,398 |
Series 1-B, Convertible Preferred | | 6/10/03 | 250,000 |
Series 1-B, Preferred Warrants (strike price $0.01/share, | | | |
expires 5/26/15) | | 5/27/05 | - |
Series 1-B, Preferred Warrants (strike price $1.53/share, | | | |
expires 6/1/15) | | 9/19/00 | - |
Terra Capital LP | | 11/23/98 - 3/14/06 | 469,590 |
See notes to financial statements.
(a) Affiliated company.
(b) This security was valued by the Board of Directors. See note A.
(i) Restricted securities represent 2.7% of net assets of the Fund.
(k) These certificates of deposit are fully insured by agencies of the federal government
(r) The coupon rate shown on floating or adjustable rate securities represents the rate at period end.
(s) 240,000 shares of HSBC Holdings plc have been soft segregated in order to cover outstanding commitments to certain limited partnership investments with the Fund. There are no restrictions on the trading of this security.
(w) Mayer Laboratories, Inc. is in default for principal and interest. Past due accrued interest as of March 31, 2010 totaled $2,513.
* Non-income producing security.
Abbreviations:
ADR: American Depositary Receipt
CVA: Certificaten Van Aandelen
LLC: Limited Liability Corporation
See notes to financial statements.
Statement of Operations
Six Months Ended March 31, 2010
Net Investment Income | | | |
Investment Income: | | | |
Dividend income (net of foreign taxes withheld of $223,595) | | $2,715,620 | |
Interest income | | 631,394 | |
Total investment income | | 3,347,014 | |
| | | |
Expenses: | | | |
Investment advisory fee | | 1,460,985 | |
Transfer agency fees and expenses | | 470,609 | |
Administrative fees | | 589,879 | |
Distribution Plan expenses: | | | |
Class A | | 326,323 | |
Class B | | 42,049 | |
Class C | | 116,811 | |
Directors' fees and expenses | | 23,862 | |
Custodian fees | | 160,789 | |
Registration fees | | 33,193 | |
Reports to shareholders | | 114,587 | |
Professional fees | | 26,676 | |
Miscellaneous | | 37,786 | |
Total expenses | | 3,403,549 | |
Reimbursement from Advisor: | | | |
Class A | | (37,302) | |
Class B | | (1,989) | |
Class C | | (2,772) | |
Class I | | (12,477) | |
Class Y | | (5,916) | |
Fees waived | | (13,724) | |
Fees paid indirectly | | (219) | |
Net expenses | | 3,329,150 | |
| | | |
Net Investment Income | | 17,864 | |
| | | |
Realized and Unrealized Gain (Loss) | | | |
Net realized gain (loss) on: | | | |
Investments (net of foreign taxes of $99,594) | | 7,222,658 | |
Foreign currency transactions | | (444,694) | |
| | 6,777,964 | |
| | | |
Change in unrealized appreciation or (depreciation) on: | | | |
Investments and foreign currencies | | (7,413,962) | |
Assets and liabilities denominated in foreign currencies | | (18,059) | |
| | (7,432,021 | |
| | | |
Net Realized and Unrealized Gain | | | |
(Loss) | | (654,057) | |
| | | |
Increase (Decrease) in Net Assets | | | |
Resulting From Operations | | ($636,193) | |
See notes to financial statements.
Statements of Changes in Net Assets
Increase (Decrease) in Net Assets | | Six Months Ended
March 31,
2010 | Year Ended
September 30,
2009 |
Operations: | | | |
Net investment income | | $17,864 | $3,896,152 |
Net realized gain (loss) | | 6,777,964 | (185,255,630) |
Change in unrealized appreciation or (depreciation) | | (7,432,021) | 141,828,817) |
| | | |
Increase (Decrease) in Net Assets | | | |
Resulting From Operations | | (636,193) | (39,530,661) |
| | | |
Distributions to shareholders from: | | | |
Net investment income: | | | |
Class A Shares | | (1,877,571) | (7,682,721) |
Class B Shares | | -- | (148,212) |
Class C Shares | | -- | (420,523) |
Class I Shares | | (1,650,864) | (3,518,021) |
Class Y Shares | | (5,626) | (1) |
Net realized gain: | | | |
Class A Shares | | -- | (634,873) |
Class B Shares | | -- | (25,817) |
Class C Shares | | -- | (67,464) |
Class I Shares | | -- | (222,338) |
Class Y Shares | | -- | (3) |
Total distributions | | (3,534,061) | (12,719,973) |
| | | |
Capital share transactions: | | | |
Shares sold: | | | |
Class A Shares | | 21,837,251 | 46,807,216 |
Class B Shares | | 249,478 | 518,403 |
Class C Shares | | 1,645,681 | 2,179,011 |
Class I Shares | | 5,740,149 | 22,384,629 |
Class Y Shares | | 1,018,904 | 595,466 |
Reinvestment of distributions: | | | |
Class A Shares | | 1,712,833 | 7,616,106 |
Class B Shares | | -- | 153,830 |
Class C Shares | | -- | 380,058 |
Class I Shares | | 1,379,546 | 3,486,897 |
Class Y Shares | | 2,622 | 4 |
Redemption fees: | | | |
Class A Shares | | 409 | 7,071 |
Class B Shares | | 2 | 47 |
Class C Shares | | 9 | 134 |
Class I Shares | | -- | 59 |
Class Y Shares | | -- | 3 |
See notes to financial statements.
Statements of Changes in Net Assets
Increase (Decrease) in Net Assets - (Cont'd) | | Six Months Ended
March 31,
2010 | Year Ended
September 30,
2009 |
Shares redeemed: | | | |
Class A Shares | | ($36,045,129) | ($71,757,677) |
Class B Shares | | (1,219,511) | (2,569,260) |
Class C Shares | | (2,341,443) | (6,216,320) |
Class I Shares | | (20,468,527) | (25,214,435) |
Class Y Shares | | (554,855) | (73,687) |
Total capital share transactions | | (27,042,581) | (21,702,445) |
| | | |
Total Increase (Decrease) in Net Assets | | (31,212,835) | (73,953,079) |
| | | |
Net Assets | | | |
Beginning of period | | 412,158,388 | 486,111,467 |
End of period (including distributions in excess | | | |
of net investment income of $62,859 and undistributed | | | |
net investment income of $3,453,338, respectively) | | $380,945,553 | $412,158,388 |
| | | |
Capital Share Activity | | | |
Shares sold: | | | |
Class A Shares | | 1,607,201 | 4,194,520 |
Class B Shares | | 20,570 | 48,508 |
Class C Shares | | 138,307 | 226,686 |
Class I Shares | | 397,247 | 1,846,796 |
Class Y Shares | | 72,494 | 54,292 |
Reinvestment of distributions: | | | |
Class A Shares | | 125,851 | 715,552 |
Class B Shares | | -- | 16,008 |
Class C Shares | | -- | 40,709 |
Class I Shares | | 95,470 | 307,732 |
Class Y Shares | | 185 | -- |
Shares redeemed: | | | |
Class A Shares | | (2,674,790) | (6,481,230) |
Class B Shares | | (100,556) | (253,088) |
Class C Shares | | (197,866) | (634,154) |
Class I Shares | | (1,408,352) | (2,100,701) |
Class Y Shares | | (39,541) | (5,379) |
Total capital share activity | | (1,963,780) | (2,023,749) |
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 five 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. Effective March 1, 2010, Class B shares are no longer offered for purchase, except through reinvestment of dividends and/or distributions and through certain exchanges. 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 and have lower levels of expenses than Class A shares. Effective October 31, 2008, the Fund began to offer Class Y shares. Class Y shares are generally only available to wrap or similar fee-based programs offered by financial intermediaries that have entered into an agreement with the Fund's Distributor to offer Class Y shares. Class Y 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). The Fund uses independent pricing services approved by the Board of Directors to value its investments wherever possible. 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 Fund's net asset value is determined, that are expected to materially affect the value of those securities, then they are valued at their fair value taking these events into account. Short-term notes are stated at amortized cost, which approximates fair value. The Fund may invest in securities whose resale i s subject to restrictions. Investments for which market quotations are not available or deemed not reliable are fair valued in good faith under the direction of the Board of Directors.
The Fund has retained a third party fair value pricing service to quantitatively analyze the price movement of its holdings on foreign exchanges and to automatically fair value if the variation from the prior day's closing price exceeds specified parameters.
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, 2010, securities valued at $10,373,843 or 2.7% of net assets, were fair valued in good faith under the direction of the Board of Directors.
The Fund utilizes various methods to measure the fair value of its investments. Generally Accepted Accounting Principles (GAAP) establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used to value assets and liabilities at measurement date. These inputs are summarized in the three broad levels listed below:
Level 1 -- quoted prices in active markets for identical securities
Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy during the period. For additional information on the Fund's policy regarding valuation of investments, please refer to the Fund's most recent prospectus.
The following is a summary of the inputs used to value the Fund's net assets as of March 31, 2010:
| Valuation Inputs |
Investments in Securities | Level 1 | Level 2 | Level 3 | Total |
Equity securities* | $364,958,355 | -- | $2,074,950 | $367,033,305 |
Limited partnership interest | -- | -- | 3,151,141 | 3,151,141 |
Other debt obligations | 4,486,019 | -- | 5,147,752 | 9,633,771 |
TOTAL | $369,444,374 | -- | $10,373,843 ** | $379,818,217 |
* For further breakdown of equity securities by country, please refer to the Statement of Net Assets.
**Level 3 securities represent 2.7% of net assets.
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. Information regarding restricted securities is included at the end of the Fund's Statement of Net Assets.
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 and may include proceeds from litigation. 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. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. 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. Withholding taxes on foreign dividends have been provided for in accordance with the Fund's understanding of the applicable country's tax rules and rates.
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.
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 seven days for Class I shares). The redemption fee is paid to the Class of the Fund from which the redemption is made, and is accounted for as an addition to paid-in capital. The fee 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 fees may be paid indirectly by credits earned on the Fund's cash on deposit with the bank. These credits are used to reduce the Fund's expenses. Such a deposit arrangement may be 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.
Management has analyzed the Fund's tax positions taken for all open federal income tax years and has concluded that no provision for federal income tax is required in the Fund's financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service for a period of three years.
New Accounting Pronouncements: In January 2010, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2010-06 "Improving Disclosures about Fair Value Measurements". ASU 2010-06 will require reporting entities to make new disclosures about amount and reasons for significant transfers in and out of Level 1 and Level 2 fair value measurements and input and valuation techniques used to measure fair value for both recurring and nonrecurring fair value measurements that fall in either Level 2 or Level 3, and information on purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measures. The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2009 except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measures, which are effective for fiscal years beginning after December 15, 2010. At this time, management is evaluating the implications of ASU No. 2010-06 and its impact on the financial statements has not been determined.
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 UNIFI Mutual Holding Company. The Advisor provides investment advisory services and pays the salaries and fees of officers and Directors of the Fund who are employees of the Advisor or its affiliates. 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. Under the terms of the agreement, $242,209 was payable at period end. In addition, $121,042 was payable at year end for operating expenses paid by the Advisor during March 2010. For the six months ended March 31, 2010, the Advisor waived $13,724 of its fee.
The Advisor has contractually agreed to limit net annual fund operating expenses through January 31, 2011 for Class I and Class Y. The contractual expense cap is 1.10% and 1.39%, respectively. For the purposes of this expense limit, operating expenses do not include interest expense, brokerage commissions, taxes, and extraordinary expenses. This expense limitation does not limit any acquired fund fees and expenses. To the extent any expense offset credits are earned, the Advisor's obligation under the contractual limitation may be reduced and the Advisor may benefit from the expense offset arrangement. The Advisor voluntarily reimbursed Class Y shares for expenses of $5,916 for the six months ended March 31, 2010.
Calvert Administrative Services Company, an affiliate of the Advisor, provides administrative services to the Fund for an annual fee, payable monthly, of .35% for Classes A, B, C and Y, and .15% for Class I, based on their average daily net assets. Under the terms of the agreement, $98,170 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 each Class A, Class B and Class C, respectively. The amount actually paid by the Fund is an annualized fee, payable monthly of .25%, 1.00% and 1.00% of the Fund's average daily net assets of Class A, Class B and Class C, respectively. Class I and Class Y shares do not have Distribution Plan expenses. Under the terms of agreement, $81,203 was payable at period end.
The Distributor received $22,938 as its portion of commissions charged on sales of the Fund's Class A shares for the six months ended March 31, 2010.
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 $99,238 for the six months ended March 31, 2010. Under the terms of the agreement, $16,530 was payable at period end. Boston Financial Data Services, Inc. is the transfer and dividend disbursing agent.
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 Funds who is not an employee of the Advisor or its affiliates receives an annual retainer of $44,000 plus a meeting fee of $2,000 for each Board meeting attended. Additional fees of up to $5,000 annually may be paid to the Board chair and committee chairs and $2,500 annually may be paid to committee members, plus a committee meeting fee of $500 for each committee meeting attended. Directors fees are allocated to each of the Funds served.
Note C -- Investment Activity
During the period, cost of purchases and proceeds from sales of investments, other than short-term securities, were $432,951,108 and $467,144,096, respectively.
The cost of investments owned at March 31, 2010 for federal income tax purposes was $372,627,893. Net unrealized appreciation aggregated $7,190,323, of which $21,793,437 related to appreciated securities and $14,603,114 related to depreciated securities.
Net realized capital loss carryforwards for federal income tax purposes of $90,728,857 at September 30, 2009 may be utilized to offset future capital gains until expiration in September 2017.
The Fund intends to elect to defer net capital losses of $120,790,409 incurred from November 1, 2008 through September 30, 2009 and treat them as arising in the fiscal year ending September 30, 2010.
Note D -- Line of Credit
A financing agreement is in place with all Calvert Group Funds and State Street Corporation ("SSC"). Under the agreement, SSC provides an unsecured line of credit facility, in the aggregate amount of $50 million ($25 million committed and $25 million uncommitted), accessible by the Funds for temporary or emergency purposes only. Borrowings under this committed facility bear interest at the higher of the London Interbank Offered Rate, (LIBOR) or the overnight Federal Funds Rate plus 1.25% per annum. A commitment fee of .15% per annum is incurred on the unused portion of the committed facility, which is allocated to all participating funds. The Funds had no loans outstanding pursuant to this line of credit at March 31, 2010. For the six months ended March 31, 2010, borrowings by the Portfolios under the Agreement were as follows:
| Average
Daily
Balance | Weighted
Average
Interest
Rate | Maximum
Amount
Borrowed | Month of
Maximum
Amount
Borrowed |
| $816,488 | 1.43% | $33,213,524 | December 2009 |
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 |
GNet Defta Development Holdings LLC, LP | $400,000 | $359,223 |
SEAF Central & Eastern European Growth Fund LLC, LP | 337,178 | 528,591 |
TOTALS | $737,178 | $887,814 |
Note F -- Subsequent Events
In preparing the financial statements as of March 31, 2010, no subsequent events or transactions occurred that would have materially impacted the financial statements as presented.
Note G -- Other
In connection with certain venture capital investments, the Fund is committed to future capital calls, which will increase the Fund's investment in these securities. The aggregate amount of the future capital commitments totals $492,456 at March 31, 2010.
Financial Highlights
| | Periods Ended | |
| | March 31, | September 30, | September 30, | |
Class A Shares | | 2010 (z) | 2009 (z) | 2008 | |
Net asset value, beginning | | $13.83 | $15.31 | $25.57 | |
Income from investment operations | | | | | |
Net investment income (loss) | | (.01) | .11 | .37 | |
Net realized and unrealized gain (loss) | | -- | (1.19) | (8.46) | |
Total from investment operations | | (.01) | (1.08) | (8.09) | |
Distributions from | | | | | |
Net investment income | | (.10) | (.37) | (.24) | |
Net realized gain | | -- | (.03) | (1.93) | |
Total distributions | | (.10) | (.40) | (2.17) | |
Total increase (decrease) in net asset value | | (.11) | (1.48) | (10.26) | |
Net asset value, ending | | $13.72 | $13.83 | $15.31 | |
| | | | | |
Total return* | | (.09%) | (6.27%) | (34.31%) | |
Ratios to average net assets:A | | | | | |
Net investment income (loss) | | (.10%) (a) | .99% | 1.81% | |
Total expenses | | 1.84% (a) | 1.87% | 1.65% | |
Expenses before offsets | | 1.80% (a) | 1.86% | 1.63% | |
Net expenses | | 1.80% (a) | 1.86% | 1.63% | |
Portfolio turnover | | 113% | 135% | 100% | |
Net assets, ending (in thousands) | | $255,845 | $270,900 | $324,091 | |
| | | | | |
| | | | | |
| | | Years Ended | | |
| | September 30, | September 30, | September 30, | |
Class A Shares | | 2007 | 2006 | 2005 | |
Net asset value, beginning | | $23.87 | $20.29 | $16.60 | |
Income from investment operations | | | | | |
Net investment income | | .22 | .24 | .21 | |
Net realized and unrealized gain (loss) | | 4.61 | 3.51 | 3.59 | |
Total from investment operations | | 4.83 | 3.75 | 3.80 | |
Distributions from | | | | | |
Net investment income | | (.20) | (.17) | (.11) | |
Net realized gain | | (2.93) | -- | -- | |
Total distributions | | (3.13) | (.17) | (.11) | |
Total increase (decrease) in net asset value | | 1.70 | 3.58 | 3.69 | |
Net asset value, ending | | $25.57 | $23.87 | $20.29 | |
| | | | | |
Total return* | | 21.72% | 18.58% | 22.95% | |
Ratios to average net assets:A | | | | | |
Net investment income | | 1.08% | 1.19% | 1.23% | |
Total expenses | | 1.62% | 1.73% | 1.86% | |
Expenses before offsets | | 1.60% | 1.72% | 1.86% | |
Net expenses | | 1.60% | 1.71% | 1.85% | |
Portfolio turnover | | 82% | 120% | 49% | |
Net assets, ending (in thousands) | | $546,564 | $401,195 | $297,151 | |
See notes to financial highlights.
Financial Highlights
| | Periods Ended | |
| | March 31, | September 30, | September 30, | |
Class B Shares | | 2010 (z) | 2009 (z) | 2008 | |
Net asset value, beginning | | $12.40 | $13.69 | $23.11 | |
Income from investment operations | | | | | |
Net investment income (loss) | | (.08) | (.02) | .12 | |
Net realized and unrealized gain (loss) | | -- | (1.06) | (7.56) | |
Total from investment operations | | (.08) | (1.08) | (7.44) | |
Distributions from | | | | | |
Net investment income | | -- | (.18) | (.05) | |
Net realized gain | | -- | (.03) | (1.93) | |
Total distributions | | -- | (.21) | (1.98) | |
Total increase (decrease) in net asset value | | (.08) | (1.29) | (9.42) | |
Net asset value, ending | | $12.32 | $12.40 | $13.69 | |
| | | | | |
Total return* | | (.65%) | (7.47%) | (34.97%) | |
Ratios to average net assets:A | | | | | |
Net investment income (loss) | | (1.30%) (a) | (.26%) | .78% | |
Total expenses | | 3.02% (a) | 3.12% | 2.63% | |
Expenses before offsets | | 2.97% (a) | 3.10% | 2.61% | |
Net expenses | | 2.97% (a) | 3.10% | 2.60% | |
Portfolio turnover | | 113% | 135% | 100% | |
Net assets, ending (in thousands) | | $7,949 | $8,993 | $12,512 | |
| | | | | |
| | | | | |
| | | Years Ended | | |
| | September 30, | September 30, | September 30, | |
Class B Shares | | 2007 | 2006 | 2005 | |
Net asset value, beginning | | $21.85 | $18.61 | $15.30 | |
Income from investment operations | | | | | |
Net investment income | . | .09 | .06 | .15 | |
Net realized and unrealized gain (loss) | | 4.10 | 3.18 | 3.16 | |
Total from investment operations | | 4.19 | 3.24 | 3.31 | |
Distributions from | | | | | |
Net investment income | | -- | ** | -- | |
Net realized gain | | (2.93) | -- | -- | |
Total distributions | | (2.93) | ** | -- | |
Total increase (decrease) in net asset value | | 1.26 | 3.24 | 3.31 | |
Net asset value, ending | | $23.11 | $21.85 | $18.61 | |
| | | | | |
Total return* | | 20.60% | 17.43% | 21.63% | |
Ratios to average net assets:A | | | | | |
Net investment income | | .13% | .18% | .20% | |
Total expenses | | 2.57% | 2.73% | 2.92% | |
Expenses before offsets | | 2.54% | 2.72% | 2.92% | |
Net expenses | | 2.54% | 2.70% | 2.91% | |
Portfolio turnover | | 82% | 120% | 49% | |
Net assets, ending (in thousands) | | $23,805 | $18,053 | $14,232 | |
See notes to financial highlights.
Financial Highlights
| | | Periods Ended | |
| | March 31, | September 30, | September 30, |
Class C Shares | | 2010 (z) | 2009 (z) | 2008 |
Net asset value, beginning | | $12.07 | $13.31 | $22.51 |
Income from investment operations | | | | |
Net investment income (loss) | | (.06) | .01 | .19 |
Net realized and unrealized gain (loss) | | -- | (1.03) | (7.40) |
Total from investment operations | | (.06) | (1.02) | (7.21) |
Distributions from | | | | |
Net investment income | | -- | (.19) | (.06) |
Net realized gain | | -- | (.03) | (1.93) |
Total distributions | | -- | (.22) | (1.99) |
Total increase (decrease) in net asset value | | (0.06) | (1.24) | (9.20) |
Net asset value, ending | | $12.01 | $12.07 | $13.31 |
| | | | |
Total return* | | (.50%) | (7.16%) | (34.86%) |
Ratios to average net assets:A | | | | |
Net investment income (loss) | | (.98%) (a) | .07% | 1.01% |
Total expenses | | 2.72% (a) | 2.79% | 2.47% |
Expenses before offsets | | 2.69% (a) | 2.79% | 2.45% |
Net expenses | | 2.69% (a) | 2.79% | 2.45% |
Portfolio turnover | | 113% | 135% | 100% |
Net assets, ending (in thousands) | | $23,267 | $24,107 | $31,475 |
| | | | |
| | | | |
| | | Years Ended | |
| | September 30, | September 30, | September 30, |
Class C Shares | | 2007 | 2006 | 2005 |
Net asset value, beginning | | $21.34 | $18.18 | $14.91 |
Income from investment operations | | | | |
Net investment income | | .13 | .13 | .15 |
Net realized and unrealized gain (loss) | | 3.99 | 3.06 | 3.12 |
Total from investment operations | . | 4.12 | 3.19 | 3.27 |
Distributions from | | | | |
Net investment income | | (.02) | (.03) | -- |
Net realized gain | | (2.93) | -- | -- |
Total distributions | | (2.95) | (.03) | -- |
Total increase (decrease) in net asset value | | 1.17 | 3.16 | 3.27 |
Net asset value, ending | | $22.51 | $21.34 | $18.18 |
| | | | |
Total return* | | 20.81% | 17.55% | 21.93% |
Ratios to average net assets:A | | | | |
Net investment income | | .31% | .38% | .38% |
Total expenses | | 2.43% | 2.57% | 2.75% |
Expenses before offsets | | 2.41% | 2.56% | 2.75% |
Net expenses | | 2.40% | 2.55% | 2.74% |
Portfolio turnover | | 82% | 120% | 49% |
Net assets, ending (in thousands) | | $50,790 | $32,723 | $22,856 |
See notes to financial highlights.
Financial Highlights
| | | Periods Ended | |
| | March 31, | September 30, | September 30, |
Class I Shares | | 2010 (z) | 2009 (z) | 2008 |
Net asset value, beginning | | $14.79 | $16.37 | $27.15 |
Income from investment operations | | | | |
Net investment income | | .05 | .22 | .48 |
Net realized and unrealized gain (loss) | | -- | (1.29) | (8.96) |
Total from investment operations | | .05 | (1.07) | (8.48) |
Distributions from | | | | |
Net investment income | | (.24) | (.48) | (.37) |
Net realized gain | | -- | (.03) | (1.93) |
Total distributions | | (.24) | (.51) | (2.30) |
Total increase (decrease) in net asset value | | (0.19) | (1.58) | (10.78) |
Net asset value, ending | | $14.60 | $14.79 | $16.37 |
| | | | |
Total return* | | .33% | (5.59%) | (33.84%) |
Ratios to average net assets:A | | | | |
Net investment income | | .63% (a) | 1.80% | 2.47% |
Total expenses | | 1.09% (a) | 1.08% | 1.00% |
Expenses before offsets | | 1.06% (a) | 1.07% | .98% |
Net expenses | | 1.06% (a) | 1.07% | .97% |
Portfolio turnover | | 113% | 135% | 100% |
Net assets, ending (in thousands) | | $92,711 | $107,456 | $118,033 |
| | | | |
| | | | |
| | | Years Ended | |
| | September 30, | September 30, | September 30, |
Class I Shares | | 2007 | 2006 | 2005 |
Net asset value, beginning | | $25.16 | $21.32 | $17.45 |
Income from investment operations | | | | |
Net investment income | | .34 | .37 | .27 |
Net realized and unrealized gain (loss) | | 4.93 | 3.72 | 3.88 |
Total from investment operations | | 5.27 | 4.09 | 4.15 |
Distributions from | | | | |
Net investment income | | (.35) | (.25) | (.28) |
Net realized gain | | (2.93) | -- | -- |
Total distributions | | (3.28) | (.25) | (.28) |
Total increase (decrease) in net asset value | | 1.99 | 3.84 | 3.87 |
Net asset value, ending | | $27.15 | $25.16 | $21.32 |
| | | | |
Total return* | | 22.49% | 19.35% | 23.92% |
Ratios to average net assets:A | | | | |
Net investment income | | 1.74% | 1.84% | 2.04% |
Total expenses | | .98% | 1.07% | 1.17% |
Expenses before offsets | | .96% | 1.06% | 1.11% |
Net expenses | | .96% | 1.05% | 1.10% |
Portfolio turnover | | 82% | 120% | 49% |
Net assets, ending (in thousands) | | $181,672 | $124,197 | $89,974 |
See notes to financial highlights.
Financial Highlights
| | Periods Ended |
| | March 31, | September 30, |
Class Y Shares | | 2010 (z) | 2009# (z) |
Net asset value, beginning | | $14.34 | $11.45 |
Income from investment operations | | | |
Net investment income | | .03 | .17 |
Net realized and unrealized gain (loss) | | (.01) | 2.76 |
Total from investment operations | | .02 | 2.93 |
Distributions from | | | |
Net investment income | | (.06) | (.01) |
Net realized gain | | -- | (.03) |
Total distributions | | (.06) | (.04) |
Total increase (decrease) in net asset value | | (0.04) | 2.89 |
Net asset value, ending | | $14.30 | $14.34 |
| | | |
Total return* | | .12% | 25.75% |
Ratios to average net assets:A | | | |
Net investment income | | .38% (a) | 1.52% (a) |
Total expenses | | 2.36% (a) | 5.91% (a) |
Expenses before offsets | | 1.39% (a) | 1.39% (a) |
Net expenses | | 1.39% (a) | 1.39% (a) |
Portfolio turnover | | 113% | 100% |
Net assets, ending (in thousands) | | $1,174 | $702 |
A Total expenses do not reflect amounts reimbursed and/or waived by the Advisor or reductions from expense offset arrangements. Expenses before offsets reflect expenses after reimbursement and/or waiver by the Advisor but prior to reductions from expense offset arrangements. Net expenses are net of all reductions and represent the net expenses paid by the Fund.
(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.
** Distribution is less than $0.01 per share.
# From October 31, 2008, 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) or, for International Funds, by country, 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, expre ssed 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
The Proxy Voting Guidelines of the Calvert Funds that the Fund uses to determine how to vote proxies relating to portfolio securities are 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.
Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund's website at www.calvert.com and on the SEC's website at www.sec.gov.
Availability of Quarterly Portfolio Holdings
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund's Form N-Q is available on the SEC's website at www.sec.gov. The Fund's Form N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Basis for Board's Approval of Investment Advisory Contracts
At a meeting held on December 8, 2009, the Board of Directors, and by a separate vote, the disinterested Directors, approved the continuance of the Investment Advisory Agreement between Calvert World Values Fund, Inc. and the Advisor and the initial approval of the Investment Subadvisory Agreement between the Advisor and each of Thornburg Investment Management, Inc. and Martin Currie, Inc. (each a "Subadvisor") with respect to the Fund.
In evaluating the Investment Advisory Agreement, the Board considered a variety of information relating to the Fund and the Advisor. The disinterested Directors reviewed a report prepared by the Advisor regarding various services provided to the Fund by the Advisor and its affiliates. Such report included, among other data, information regarding the Advisor's personnel and the Advisor's revenue and cost of providing services to the Fund, and a separate report prepared by an independent third party, which provided a statistical analysis comparing the Fund's investment performance, expenses, and fees to comparable mutual funds.
The disinterested Directors were separately represented by independent legal counsel with respect to their consideration of the reapproval of the Investment Advisory Agreement and the initial approval of each Investment Subadvisory Agreement with the applicable Subadvisor. Prior to voting, the disinterested Directors reviewed the proposed continuance of the Investment Advisory Agreement and the initial approval of each Investment Subadvisory Agreement with management and also met in private sessions with their counsel at which no representatives of management were present.
In the course of its deliberations regarding the Investment Advisory Agreement, the Board considered the following factors, among others: the nature, extent and quality of the services provided by the Advisor, including the personnel providing such services; the Advisor's financial condition; the level and method of computing the Fund's advisory fee; comparative performance, fee and expense information for the Fund; the profitability of the Calvert Group of Funds to the Advisor and its affiliates; the allocation of the Fund's brokerage, including the Advisor's process for monitoring "best execution"; the direct and indirect benefits, if any, derived by the Advisor and its affiliates from their relationship with the Fund; the effect of the Fund's growth and size on the Fund's performance and expenses; the affiliated distributor's process for monitoring sales load breakpoints; the Advisor's compliance programs and policies; the Advisor's performance of substantially similar duties for other funds; and any p ossible conflicts of interest.
In considering the nature, extent and quality of the services provided by the Advisor under the Investment Advisory Agreement, the Board reviewed information provided by the Advisor relating to its operations and personnel, including, among other information, biographical information on the Advisor's investment, supervisory and professional staff and descriptions of its organizational and management structure. The Board also took into account similar information provided periodically throughout the previous year by the Advisor as well as the Board's familiarity with the Advisor's senior management through Board of Directors' meetings, discussions and other reports. The Board considered the Advisor's management style and its performance in employing its investment strategies, as well as its current level of staffing and overall resources. The Advisor's administrative capabilities, including its ability to supervise the other service providers for the Fund, were also considered. The Board also took into acc ount the environmental, social and governance research and analysis provided by the Advisor to the Fund. The Board discussed the Advisor's effectiveness in monitoring the performance of the Fund's former Subadvisor and its timeliness in responding to performance issues. The Board concluded that it was satisfied with the nature, extent and quality of services provided to the Fund by the Advisor under the Investment Advisory Agreement.
In considering the Fund's performance, the Board noted that it reviewed on a quarterly basis detailed information about the Fund's performance results, portfolio composition and investment strategies. In addition, the Board took into account overall financial market conditions. The Board also reviewed various comparative data provided to it in connection with its consideration of the renewal of the Investment Advisory Agreement, including, among other information, a comparison of the Fund's total return with its Lipper index and with that of other mutual funds deemed to be in its peer group by an independent third party in its report. This comparison indicates that the Fund's performance was below the median of its peer group for the one-, three- and five-year periods ended June 30, 2009. The data also indicated that the Fund underperformed its Lipper index for the same one-, three- and five-year periods. The Board took into account management's discussion of the Fund's performance, including the fact tha t the Advisor and two new subadvisors would be assuming day-to-day management of the Fund as of December 11, 2009. The Board noted the Advisor's continued monitoring of the Fund's performance. Based upon its review, the Board concluded that appropriate action is being taken with respect to the Fund's performance.
In considering the Fund's fees and expenses, the Board compared the Fund's fees and total expense ratio with various comparative data for the funds in its peer group. Among other findings, the data indicated that the Fund's advisory fee was below the median of its peer group and that total expenses were above the median of its peer group. The Board noted that the allocation of advisory and administrative fees may vary among the Fund's peer group. In addition, the Board took into account the fees the Advisor charged to its other clients and considered these fee comparisons in light of the differences in managing these other accounts. The Board also noted the Advisor's voluntary waiver of a portion of its advisory fee (for all classes). The Board noted the Advisor's discussion of the Fund's expenses and certain factors that affected the level of such expenses, including the cost of providing the environmental, social and governance research and analysis provided by the Advisor. Based upon its review, the Bo ard concluded that the advisory fee was reasonable in view of the quality of services provided by the Advisor and the other factors considered.
The Board reviewed the Advisor's profitability on a fund-by-fund basis. In reviewing the overall profitability of the advisory fee to the Fund's Advisor, the Board also considered the fact that affiliates of the Advisor provided shareholder servicing and administrative services to the Fund for which they received compensation. The information considered by the Board included Calvert's operating profit margin information both before and after tax expenses with respect to the services that the Advisor and its affiliates provided to the Calvert Group of Funds complex. The Board reviewed the profitability of the Advisor's relationship with the Fund in terms of the total amount of annual advisory fees it received with respect to the Fund and whether the Advisor had the financial wherewithal to continue to provide a high level of services to the Fund. The Board noted the Advisor's voluntary waiver of a portion of its advisory fee (for all classes). The Board also noted the Advisor's current undertaking to maint ain expense limitations for the Fund's Class I shares. The Board also considered that the Advisor derived benefits to its reputation and other indirect benefits from its relationship with the Fund. In addition, the Board considered comparative fee information. The Board also noted that the Advisor paid the subadvisory fees to the Subadvisors. Based upon its review, the Board concluded that the Advisor's and its affiliates' level of profitability from their relationship with the Fund was reasonable.
The Board considered the effect of the Fund's current size and potential growth on its performance and fees. The Board took into account that the Fund's advisory fee schedule contained breakpoints that would reduce the advisory fee rate on assets above specified levels as the Fund's assets increased. The Board noted that the Fund was currently realizing economies of scale in its advisory fee. The Board also noted that if the Fund's assets increased over time, the Fund might realize other economies of scale if assets increased proportionally more than certain other expenses.
In reapproving the Investment Advisory Agreement, the Board, including the disinterested Directors, did not identify any single factor as controlling, and each Director may have attributed different weight to various factors.
In evaluating each of the Investment Subadvisory Agreements, the disinterested Directors reviewed information provided by the Subadvisors relating to their respective operations, personnel, investment philosophy, strategies and techniques. Among other information, the Subadvisors provided biographical information on portfolio management and other professional staff, performance information for themselves, and descriptions of their respective investment philosophies, strategies and techniques, organizational and management structures and brokerage policies and practices.
The Board approved the Investment Subadvisory Agreement between the Advisor and each of the Subadvisors based on a number of factors relating to each Subadvisor's ability to perform under the respective Investment Subadvisory Agreement. In the course of its deliberations, the Board evaluated, among other factors: the nature, extent and the quality of the services to be provided by each Subadvisor; each Subadvisor's management style and long-term performance record; each Subadvisor's performance in employing its investment strategies; each Subadvisor's current level of staffing and its overall resources; the qualifications and experience of each Subadvisor's personnel; each Subadvisor's financial condition with respect to its ability to perform the services required under the respective Investment Subadvisory Agreement; each Subadvisor's compliance systems, including those related to personal investing; and any disciplinary history. Based upon its review, the Board concluded that it was satisfied with the nature, extent and quality of services to be provided to the Fund by each Subadvisor under the respective Investment Subadvisory Agreement.
As noted above, the Board considered, among other information, the Fund's performance during the one-, three- and five-year periods ended June 30, 2009 as compared to the Fund's peer group and noted that it reviewed on a quarterly basis detailed information about the Fund's performance results, portfolio composition and investment strategies. The Board noted the Advisor's expertise and resources in monitoring the performance, investment style and risk- adjusted performance of the Subadvisor. The Board took into account the performance of other funds managed by each of the Subadvisors.
In considering the estimated cost of services to be provided by each Subadvisor and the anticipated level of profitability to each Subadvisor of its relationship with the Fund, the Board noted that the subadvisory fees under each Investment Subadvisory Agreement would be paid by the Advisor out of the advisory fee that the Advisor received under the Investment Advisory Agreement. The Board also relied on the ability of the Advisor to negotiate each Investment Subadvisory Agreement and the corresponding subadvisory fee at arm's length. In addition, the Board considered comparative fee information. The Board took into account that both Subadvisors had agreed to waive their fees from December 11, 2009 through February 9, 2010. The Board noted that the advisory fee paid to the Advisor would not change as a result of the change in Subadvisors and that the Advisor had agreed to voluntarily limit the Fund's expenses to the level in effect at the time the Advisor assumed responsibility for managing a portion of t he Fund's assets. Based upon its review, the Board determined that the subadvisory fees were reasonable. Because the Advisor pays the Subadvisors' subadvisory fees and the subadvisory fees were negotiated at arm's length by the Advisor, the cost of services to be provided by the Subadvisors and the profitability to the Subadvisors of their relationships with the Fund were not material factors in the Board's deliberations. For similar reasons, the Board did not consider the potential economies of scale in each Subadvisor's management of the Fund to be a material factor in its consideration, although the Board noted that Martin Currie, Inc.'s subadvisory fee schedule for the Fund contained breakpoints that reduced the subadvisory fee rate on assets above specified levels.
In initially approving each Investment Subadvisory Agreement, the Board, including the disinterested Directors, did not identify any single factor as controlling, and each Director may have attributed different weights to various factors.
Conclusions
The Board reached the following conclusions regarding the Investment Advisory Agreement and each Investment Subadvisory Agreement, among others: (a) the Advisor has demonstrated that it possessed the capability and resources to perform the duties required of it under the Investment Advisory Agreement; (b) the Advisor and each Subadvisor is qualified to manage the Fund's assets in accordance with the Fund's investment objectives and policies; (c) the Advisor and each Subadvisor maintain appropriate compliance programs; (d) the Advisor and each Subadvisor is likely to execute its investment strategies consistently over time; (e) appropriate action is being taken with respect to the Fund's performance; and (f) the Fund's advisory and proposed subadvisory fees are reasonable relative to those of similar funds and to the services to be provided by the Advisor and each Subadvisor. Based on its conclusions, the Board determined that reapproval of the Investment Advisory Agreement and the initial approval of each Investment Subadvisory Agreement would be in the best interests of the Fund and its shareholders.
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Calvert Group
c/o BFDS,
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Principal Underwriter
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814
Calvert World Values International Equity fund
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.
Note: The information on our website is not incorporated by reference into this report; our website address is included as an inactive textual reference only.
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
Municipal Funds
Calvert Tax-Free Bond Fund
Taxable Bond Funds
CSIF Bond Portfolio
Income Fund
Short Duration Income Fund
Long-Term Income Fund
Ultra-Short Income Fund
Government Fund
Short-Term Government Fund
High Yield Bond Fund
Equity Funds
CSIF Enhanced Equity Portfolio
CSIF Equity Portfolio
Calvert Large Cap Growth Fund
Calvert Large Cap Value Fund
Calvert Social Index Fund
Capital Accumulation Fund
CWV International Equity Fund
New Vision Small Cap Fund
Small Cap Value Fund
Mid Cap Value Fund
Global Alternative Energy Fund
Global Water Fund
International Opportunities Fund
Balanced and Asset
Allocation Funds
CSIF Balanced Portfolio
Calvert Conservative Allocation Fund
Calvert Moderate Allocation Fund
Calvert Aggressive Allocation Fund
<PAGE>
Calvert Capital Accumulation Fund
Semi-Annual Report
March 31, 2010
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Table of Contents
4 | President's Letter |
7 | SRI Update |
10 | Portfolio Management Discussion |
15 | Shareholder Expense Example |
17 | Statement of Net Assets |
21 | Statement of Operations |
22 | Statements of Changes in Net Assets |
24 | Notes to Financial Statements |
29 | Financial Highlights |
34 | Explanation of Financial Tables |
36 | Proxy Voting and Availability of Quarterly Portfolio Holdings |
36 | Basis for Board's Approval of Investment Advisory Contracts |
Dear Shareholders:
Over the six-month reporting period, the global financial markets climbed higher amidst periods of volatility, as global stimulus policies took hold and economies worked to emerge from the worst recession in 50 years. By the end of 2009, corporate bonds had staged a remarkable nine-month rally, and stocks moved to 18-month highs in March 2010.
Early in 2010, the equity and fixed-income markets were buffeted by an array of concerns, including proposed U.S. financial regulations, trouble in China's economy, high levels of unemployment globally, and worries about the sovereign credit quality of Greece and other European countries. By the end of the reporting period, however, the markets had steadied and resumed their climb, reassured by the release of more positive economic data--particularly relating to the consumer sector.
Looking ahead, we see encouraging signs of economic recovery. However, we also anticipate that there will be a period of transition. Both the equity and fixed-income markets are likely to be challenged by interest-rate uncertainty, increased market volatility, and concerns about mounting government debt. In this environment, we believe that investment strategies that include sustainability criteria may be better positioned to provide long-term value.
Markets Move Higher
In a welcome reversal from the much more difficult time periods of 2008 and early 2009, U.S. stock indexes reported solid six-month gains across all styles, strategies, and capitalization ranges. The large-cap Russell 1000 Index and the Standard & Poor's 500 Index returned 12.11% and 11.75%, respectively. Small- and mid-cap indexes, as well as value and growth indexes, all posted healthy returns. On the international front, the MSCI EAFE Investable Market Index (IMI), a benchmark for international stocks, edged up 3.25%, and the MSCI Emerging Markets IMI was up 12.02%.
Following their robust rally of 2009, corporate bonds recorded more modest gains for the six-month reporting period, with the Barclays Capital U.S. Credit Index up 3.33%. Money market returns remained low, reflecting the Federal Reserve's continued target of 0% to 0.25% for the federal funds rate.
Sustainable and Responsible Investing
As the global economy slowly recovers and the Obama administration and Congress negotiate financial reform and implement the new health care law, priorities for sustainability initiatives worldwide have clearly shifted and realigned. On the environmental front, for instance, while last December's Copenhagen Summit didn't result in legally binding emissions targets, the major world economies did agree to carbon emissions limits.
In this complex environment, we believe it's more important than ever for sustainable investors to retain their focus on and commitment to initiatives that advance environmental, social, and corporate governance responsibilities. In the last six months since we reported to you, Calvert has made progress on several sustainable and responsible investment initiatives.
In March 2010, the United Nations Global Compact and the United Nations Development Fund for Women (UNIFEM) launched the Women's Empowerment Principles, extending the goals underlying the Calvert Women's Principles® to an international audience. The Women's Empowerment Principles set out guidelines for international business practices that establish high-level corporate support for gender equality, promote professional development for women, and measure and publicly report on companies' progress to achieve gender equality.
Board Diversity Front and Center
Calvert has been a rigorous advocate for minority and female representation on corporate boards of directors since the passage of the Sarbanes-Oxley Act of 2002. Last December, we filed our 50th shareholder resolution on board diversity, marking years of engagement with hundreds of companies on this issue. In March, Ceres, an organization of investors focused on sustainability, released a report called The 21st Century Corporation: The Ceres Roadmap for Sustainability, which lays out 20 key expectations for companies related to disclosure, governance, stakeholder engagement, and performance on key environmental and sustainability issues. We are proud that Ceres highlighted Calvert's work on board diversity in the report.
Recently, the Securities and Exchange Commission (SEC) approved board diversity disclosure requirements in proxy statements. To bolster the impact of this SEC requirement, Calvert has provided a scorecard that outlines the approach taken by companies in the Russell 1000 Index that have filed proxies since March 1, 2010. The scorecard compares board diversity disclosures from 2009 and 2010 and analyzes any progress. We believe that companies with high standards of corporate governance, including diverse boards, are better positioned to compete in the global marketplace.
On the Road to Recovery
Looking ahead, we believe that the worst of the recession is behind us. However, the economic recovery will be uneven, with ongoing market volatility. On a positive note, the global financial markets have continued to rally and the U.S. economy is showing improved vital signs. Investors, while still cautious, have become less risk-averse, moving away from the lowest-yielding securities. Most recently, encouraging data has shown that U.S. manufacturing and production levels are up, along with consumer spending and retail sales.
Global fiscal concerns, however, may still prove to be a significant drag on the pace of recovery. At home and abroad, governments at all levels are facing major fiscal challenges. Concerns about Greece's sovereign debt have spread to other European countries, unsettling the euro and raising concerns about countries in other regions as well.
In the U.S., as the government removes fiscal and monetary stimulus from the system, the economy must find a self-sustaining balance to continue its forward momentum. Of course, the Obama administration and Congress are grappling with credit-rating agency reform, banking reform, and the role of the Federal Reserve and U.S. government in the oversight of financial institutions and the markets, among many critical issues. In our view, over time, these efforts may work to redress some of the systemic imbalances revealed in our global financial system, providing additional stability to the economy and markets.
We believe that the U.S. and global economic recovery will move ahead at a pace largely determined by businesses and the consumer. Corporate earnings reports have been strong and businesses appear to be positioned for growth, with larger inventories and increased spending on equipment. In terms of the consumer, however, as long as unemployment, foreclosures, and consumer debt remain relatively high, it will be difficult for the economic expansion to truly take hold.
Check Your Portfolio Allocations
In view of shifting market conditions, it may be wise to review your overall portfolio asset allocation and investment strategy with your financial advisor. Check to ensure that your target mix of U.S. and international stocks, bonds, and cash is well-diversified and appropriate given your investment goals, stage of life, and attitude toward risk.
We encourage you to visit our web site, www.calvert.com, for frequent updates and commentary on economic and market developments from Calvert professionals.
As always, we appreciate your investing with Calvert.
Sincerely,
Barbara J. Krumsiek
President and CEO
Calvert Group, Ltd.
April 2010
SRI Update
from the Calvert Sustainability Research Department
Calvert continues to advocate for responsible management of environmental, social, and governance (ESG) factors, which we believe create long-term value and are even more important during this period of recovery from the financial crisis of 2008 and 2009. We've also had unprecedented opportunities to help create new policies in these areas--and make sure the voices of our shareholders are heard loud and strong.
Financial Reform
The financial crisis of the past two years has revealed a number of critical issues and risks that need to be addressed if we are to prevent a repeat experience in the future. Calvert has been working to promote financial reform at the regulatory and legislative level--particularly to fortify the regulatory framework, strengthen consumer protections, and promote more responsible corporate governance.
One such area of financial reform relating to consumer protection is bank overdraft fee practices. We are leading an informal investor coalition that has engaged companies, supported legislation in Congress, and submitted comments to the Federal Reserve calling for changes in how banks provide short-term loans to consumers. We also filed shareholder resolutions calling on BB&T and Capital One to report to shareholders about their overdraft policies and practices, with an eye toward getting them to identify those that are abusive and predatory.
Other Shareholder Advocacy
For the 2010 proxy season, Calvert filed or co-filed 42 resolutions, focusing on climate change, board and employee diversity, executive compensation, sustainability reporting, and political contributions. To date, 26 resolutions have been withdrawn after companies agreed to address our concerns.
Say on Pay
It's particularly notable that we were able to successfully withdraw our "say on pay" resolutions at JPMorgan Chase, American Express, and Morgan Stanley after each agreed to hold a referendum on their compensation practices as part of the proxy statements for their 2010 annual meetings.
"Say on Pay" resolutions have become increasingly common since the financial crisis and bailout focused scrutiny on executive compensation and bonuses. Recipients of Troubled Asset Relief Program funding were required to implement advisory votes on executive pay, but those requirements end when companies repay their obligations. However, we are also working to persuade legislators to pass a bill that requires every publicly owned company to establish an annual advisory vote on pay.
Climate Change
Through participation in the Investor Network on Climate Risk and company dialogues, we have stepped up our support for incentives that will encourage companies to reduce carbon emissions. Calvert also met with several Securities and Exchange Commission (SEC) commissioners about providing interpretive guidance on how corporations should disclose greenhouse gas emissions data and present their analysis of climate risks and opportunities in filings. The SEC subsequently voted 3-2 to approve the measure, which is a major step toward increasing transparency on these issues.
Board Diversity
We were also pleased to see the SEC approve requirements for companies to disclose whether they consider diversity in identifying board director nominees. Public companies must also say if they have a stated policy to this effect and, if they do, they must also disclose how the policy is implemented and its effectiveness measured. Calvert helped lead efforts in favor of this requirement and, in fact, our comments are cited six times in the final SEC rule.
Calvert published a corporate board diversity disclosure scorecard that outlines how companies in the Russell 1000 Index have responded to the new disclosure requirements and analyzes any progress between disclosures made in 2009 and 2010. So far, we are pleased to see that a few companies provide previously unreleased information on the gender and racial make-up of their directors as well as statements about the value of diversity. However, we are disappointed that so few companies have a formal policy on director diversity.
The Women's Principles
Calvert continues to work with the United Nations Global Compact and the United Nations Development Fund for Women (UNIFEM) to create an international framework for the Calvert Women's Principles® (CWP). In March, this resulted in the launch of the Women's Empowerment Principles, which are based on the CWP. The launch event also honored International Women's Day by bringing together a variety of organizations to further explore how corporations in every industry and region around the world can apply these Principles.
We are also working with the Global Reporting Initiative Gender Working Group to update the G3 Guidelines to better address gender-related issues in sustainability reporting. Also the Gender Equality Principles Initiative--a partnership between the San Francisco Department on the Status of Women, Calvert, and Verité--launched a new website in March to provide companies with tools and resources to improve gender equality from the factory floor to the boardroom.
Other accomplishments include:
After three years of asking Allergan to provide annual updates on its efforts to eliminate the use of animals in Botox® safety testing, the company announced in January that it has cut animal use in its testing protocol by 78%. While we would prefer a 100% reduction, we believe this dramatic cut indicates a serious commitment to this goal.
Calvert has also been working on several fronts to help companies ensure that minerals in their electronics components are not fueling the war in the Democratic Republic of the Congo. More than five million lives have been lost and countless women and children victimized by brutal sexual violence in the Congo as armed groups fight for control of some of the richest deposits of tin, tantalum, tungsten, and gold in the world.
Community Investments
Many of our Funds participate in Calvert's High Social Impact Investing program, which is administered through the Calvert Social Investment Foundation. This community investment program may allocate a small percentage of Fund assets at below-market interest rates to investments that provide economic opportunity for struggling populations.1
One example of those supported by the Foundation's work is Alice, a 33-year old Kenyan woman with a large family who lost almost everything to political violence in 2008. However, a small loan from the Kenya Women's Finance Trust has enabled Alice to set up a small shop that provides for her family and sends her children to school.
Special Equities
A modest but important portion of certain funds is allocated to small private companies that are developing products or services that address important sustainability or environmental issues. One new addition was IGNIA Fund I, LP, a venture capital fund that invests in commercially promising businesses that improve the lives of those at the bottom of the socioeconomic pyramid. The Obama administration recently recognized IGNIA for its role in testing an innovative social impact star rating system that allows investors to better compare investment opportunities and helps channel more capital to higher-impact investments.
Also, a larger firm acquired Neodiagnostix--a special equities holding that provides innovative non-invasive tests for cervical cancer--during the reporting period, which provided a nice return for investors.2
1. As of March 31, 2010, Calvert Social Investment Foundation Community Investment Notes represented the following percentages of Fund net assets: Calvert Social Investment Fund (CSIF) Balanced Portfolio 1.07%, CSIF Bond Portfolio 0.35%, CSIF Equity Portfolio 0.50%, Calvert Capital Accumulation Fund 1.35%, Calvert World Values International Equity Fund 1.14%, Calvert New Vision Small Cap Fund 1.34%, and Calvert Large Cap Growth Fund 0.38%. The Calvert Social Investment Foundation is a 501(c)(3) nonprofit organization. The Foundation's Community Investment Note Program is not a mutual fund and should not be confused with any Calvert Group-sponsored investment product.
2. As of March 31, 2010, Ignia Fund I, LP represented 0.02% of Calvert Large Cap Growth Fund; Neodiagnostix represented 0.02% of CSIF Equity Portfolio. All holdings are subject to change without notice.
As of March 31, 2010, the following companies represented the following percentages of Fund net assets: BB&T represented 0.31% of Calvert Social Index Fund. Capital One represented 0.26% of Calvert Social Index Fund, 0.69% of CSIF Enhanced Equity Po rtfolio, 0.64% of CSIF Balanced Portfolio, and 1.38% of CSIF Bond Portfolio. JPMorgan Chase represented 0.69% of CSIF Balanced Portfolio, 2.69% of CSIF Bond Portfolio, 2.50% of Calvert Social Index Fund and 3.16% of CSIF Enhanced Equity Portfolio. American Express represented 0.14% of CSIF Balanced Portfolio, 1.72% of CSIF Enhanced Equity Portfolio and 0.61% of Calvert Social Index Fund. Morgan Stanley represented 0.91% of Calvert Large Cap Value Fund. Allergan represented 1.15% of CSIF Equity Portfolio, 1.76% of Calvert Large Cap Growth Fund and 0.28% of Calvert Social Index Fund.
All holdings are subject to change without notice.
Portfolio Management Discussion
Michelle Clayman
Nathaniel Paull
of New Amsterdam Partners LLC
Performance
Calvert Capital Accumulation Fund Class A shares (at NAV) returned 17.96% for the six-month period ended March 31, 2010 compared with 14.88% for the benchmark Russell Mid Cap Growth Index. The Fund's relative outperformance was largely due to strong stock selection.
Investment Climate
The U.S. economy continued to expand in the fourth quarter of 2009 with economic output, as measured by gross domestic product (GDP), up 5.6%. Inventory destocking appears to have ended and the first signs of inventory rebuilding appeared in March, with new orders up and production increasing. U.S. productivity remained high, which has led corporations to post profit gains of more than 30% during the period.
Portfolio Statistics
March 31, 2010
Investment Performance
(total return at NAV*)
| 6 Months
ended
3/31/10 | 12 Months
ended
3/31/10 |
Class A | 17.96% | 54.23% |
Class B | 17.35% | 52.57% |
Class C | 17.51% | 53.03% |
Class I | 18.50% | 55.76% |
Russell Midcap Growth Index | 14.88% | 63.00% |
Lipper Mid-Cap Growth Funds Avg. | 13.35% | 56.57% |
| | |
Ten Largest Stock Holdings | | |
| % of Net Assets | |
Lincare Holdings, Inc. | 3.6% | |
Bucyrus International, Inc. | 3.2% | |
Deckers Outdoor Corp. | 3.2% | |
Itron, Inc. | 3.1% | |
Sybase, Inc. | 3.0% | |
FMC Technologies, Inc. | 3.0% | |
Dionex Corp. | 2.9% | |
Affiliated Managers Group, Inc. | 2.9% | |
Hospira, Inc. | 2.8% | |
Amphenol Corp. | 2.7% | |
Total | 30.4% | |
| | |
Economic Sectors | % of total investments | |
Consumer Discretionary | 20.5% | |
Consumer Staples | 4.6% | |
Energy | 6.5% | |
Financials | 8.3% | |
Health Care | 16.4% | |
Industrials | 9.2% | |
Information Technology | 21.0% | |
Materials | 4.3% | |
Telecommunication Services | 2.3% | |
Time Deposit | 2.6% | |
Utilities | 4.3% | |
Total | 100% | |
*Investment performance/return at NAV does not reflect the deduction of the Fund's maximum 4.75% front-end sales charge or any deferred sales charge.
However, the unemployment rate has stayed alarmingly high at 9.7% as of March, although the economy has started to post modest net job gains. While the employment situation and troubled housing market continue to pressure consumer incomes, personal consumption expenditures have risen 3.4% year-over-year1 (admittedly, from very depressed levels).
Good news on the economic front propelled the stock market higher, with returns for the period of 15.10% for the Russell Mid Cap Index and 12.11% for large-cap stocks as represented by the Russell 1000 Index. Among mid-caps, value topped growth, with returns of 15.32% for the Russell Mid Cap Value Index and 14.88% for the Russell Mid Cap Growth Index.
Portfolio Strategy
Over the past six months, we sold 10 stocks and purchased 10 new stocks. The net result trimmed our exposure to the Industrials sector and boosted our allocation to Consumer Discretionary. At the end of the period, the Fund was overweight Health Care and Consumer Discretionary and underweight Industrials and Information Technology.
Portfolio Transactions
We reduced our Industrials exposure with the sales of Brink's, Ryder System, General Cable, and Valmont Industries, while only purchasing global outsourcing company Towers Watson. We built up our allocation to the Consumer Discretionary sector with the additions of retailer Dollar Tree, apparel company Phillips-Van Heusen, and container manufacturer Tupperware, while selling Whirlpool.
In Health Care, we sold Endo Pharmaceuticals and bought diagnostics provider Lab Corp and drug wholesaler AmerisourceBergen. We sold Ansys, Dolby Laboratories, and Global Payments in Information Technology while buying Syntel, National Semiconductor, Hittite Microwave, and Fidelity National Information Services. Finally, we consolidated our telecommunications services holdings with the sale of CenturyTel.
Key Performance Factors
Our outperformance over the past six months was largely due to strong stock selection. Sector selection had a neutral effect on the Fund's relative performance as our overweights to Health Care and Consumer Discretionary added value, while our overweight to Utilities detracted from performance.
Stock picks in Health Care, Industrials, and Information Technology added the most value. HealthSpring and Lincare Holdings both rose more than 43.0%2 on strong earnings and impending health care reform legislation. Industrials holding Bucyrus International soared 85.4% on rising commodity costs and positive market reaction to an announced acquisition. Dolby Laboratories (up 37.3%), in Information Technology, rose thanks to strong earnings driven in part by the success of recent 3-D film releases.
Also, Consumer Discretionary stock Deckers Outdoor gained 62.6% on solid earnings and
Portfolio Statistics
March 31, 2010
Average Annual Total Returns
(with max. load)
| Class A Shares |
One year | 46.90% |
Five year | 0.27% |
Ten year | -1.03% |
| Class B Shares |
One year | 47.57% |
Five year | 0.10% |
Ten year | -1.45% |
| Class C Shares |
One year | 52.03% |
Five year | 0.46% |
Ten year | -1.34% |
Portfolio Statistics
March 31, 2010
Average Annual Total Returns
| Class I Shares* |
One year | 55.76% |
Five year | 2.14% |
Ten year | 0.44% |
* 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.
The performance data shown represents past performance, does not guarantee future results, and does not reflect the deduction of taxes that a shareholder would pay on the Fund's/Portfolio's distributions or the redemption of Fund/Portfolio shares. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Visit www.calvert.com for current performance data. The gross expense ratio for Class A Shares is 1.88%. This number may vary from the expense ratio shown elsewhere in this report because it is based on a different time period and, if applicable, does not include fee or expense waivers. Performance data quoted already reflects deduction of fund operating expenses.
a robust outlook for 2010. And in Telecommunications, NII Holdings climbed 39% as Latin American economies continued to experience robust growth.
However, our stock picking was weak in Materials. Praxair edged up 2.7% but underperformed its sector due to an earnings miss. Wright Express (up 2.1%) lagged its Information Technology peers because of weak transaction volumes. Industrials holding EMCOR Group lost 2.7% on disappointing revenues. In Consumer Discretionary, GameStop fell 17.2% amid an increasingly competitive video game market, and ITT Educational Services inched up 1.9% as concerns about regulatory reform and slowing enrollments took their toll.
Performance Comparison
Comparison of change in value of $10,000 investment.
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 Class A maximum front-end sales charge of 4.75%, or deferred sales charge, as applicable. No sales charge has been applied to the index used for comparison. However, the Lipper average does reflect the deduction of the category's average front-end sales charge. 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.
Market Outlook
We expect the economy to continue to expand in 2010, with further GDP growth of 2.5% to 3%. In the near term, the Industrials sector should drive growth as companies rebuild inventories. Inflation, in the near term, appears muted.
In the longer term, the economy faces challenges from constraining budget deficits at the state, local, and federal government levels. Hard choices need to be made between spending and deficit reduction, and if deficits aren't curtailed or are monetized, inflation is likely to raise its head down the road. Defaults at the state and local government level would severely impact confidence, and any rumors about downgrades of U.S. debt would unnerve the markets. However, job creation will remain a major concern and might prevent tightening of budgets.
We expect stock market gains to continue for the balance of 2010, with an increase of another 5% to 7% possible, primarily fueled by a continued upward trend in earnings. In fact, we believe corporate profits are likely to increase 30% to 35% for the full year. However, the market could be derailed by a number of things--such as a lack of political will to deal with budget deficits, a downturn in the Leading Economic Indicators (which have been in expansionary mode), continued turmoil in real estate markets, and geopolitical unrest.
After the dramatic events of the past two years, the stock market appears to have refocused on company fundamentals. In this environment, we expect companies with solid earnings and cash flow to be rewarded. The latter will allow companies to continue to shore up their balance sheets, reinvest in growth, and also return value to shareholders via increased dividends and share buybacks. We feel this environment is one in which our growth at a reasonable price strategy is likely to prosper.
April 2010
1. Source: Bureau of Economic Affairs (BEA) for the 12-month period ended February 28, 2010.
2. All returns shown for individual holdings reflect that part of the reporting period the holdings were held.
As of March 31, 2010, the following companies represented the following percentages of Fund net assets: Brink's 0%, Ryder System 0%, General Cable 0%, Valmont Industries 0%, Towers Watson 0.87%, Dollar Tree 2.23%, Phillips-Van Heusen 1.56%, Tupperware 1.74%,Whirlpool 0%, Endo Pharmaceuticals 0%, Lab Corp 1.34%, AmerisourceBergen 1.63%, Ansys 0%, Dolby Laboratories 0%, Global Payments 0%, Syntel 2.13%, National Semiconductor 2.45%, Hittite Microwave 0.65%, Fidelity National 2.23%, CenturyTel 0%, HealthSpring 2.10%, Lincare Holdings 3.60%, Bucyrus 3.22%, Deckers Outdoors 3.20%, NII Holdings 2.25%, Praxair 2.37%, Wright Express 2.26%, EMCOR Group 0.80%, GameStop 1.62%, and ITT Educational Services 2.24%. All holdings are subject to change without notice.
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges and redemption fees; and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
This Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (October 1, 2009 to March 31, 2010).
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning
Account Value
10/1/09 | Ending Account
Value
3/31/10 | Expenses Paid
During Period*
10/1/09 - 3/31/10 |
Class A | | | |
Actual | $1,000.00 | $1,180.20 | $9.71 |
Hypothetical | $1,000.00 | $1,016.02 | $8.98 |
(5% return per year before expenses) | | | |
Class B | | | |
Actual | $1,000.00 | $1,174.10 | $15.50 |
Hypothetical | $1,000.00 | $1,010.67 | $14.34 |
(5% return per year before expenses) | | | |
Class C | | | |
Actual | $1,000.00 | $1,175.70 | $14.01 |
Hypothetical | $1,000.00 | $1,012.06 | $12.95 |
(5% return per year before expenses) | | | |
Class I | | | |
Actual | $1,000.00 | $1,185.50 | $4.69 |
Hypothetical | $1,000.00 | $1,020.64 | $4.33 |
(5% return per year before expenses) | | | |
* Expenses are equal to the Fund's annualized expense ratio of 1.79%, 2.86%, 2.58% and 0.86% for Class A, Class B, Class C, and Class I respectively, multiplied by the
average account value over the period, multiplied by 182/365 (to reflect the one-half
year period).
STATEMENT OF NET ASSETS
March 31, 2010
Equity Securities - 95.8% | | Shares | Value |
Capital Markets - 2.9% | | | |
Affiliated Managers Group, Inc.* | | 37,900 | $2,994,100 |
| | | |
Chemicals - 2.4% | | | |
Praxair, Inc. | | 29,500 | 2,448,500 |
| | | |
Construction & Engineering - 0.8% | | | |
EMCOR Group, Inc.* | | 33,500 | 825,105 |
| | | |
Diversified Consumer Services - 2.2% | | | |
ITT Educational Services, Inc.* | | 20,600 | 2,317,088 |
| | | |
Diversified Financial Services - 2.1% | | | |
IntercontinentalExchange, Inc.* | | 19,600 | 2,198,728 |
| | | |
Electronic Equipment & Instruments - 5.8% | | | |
Amphenol Corp. | | 64,900 | 2,738,131 |
Itron, Inc.* | | 44,500 | 3,229,365 |
| | | 5,967,496 |
Energy Equipment & Services - 4.5% | | | |
FMC Technologies, Inc.* | | 48,200 | 3,115,166 |
Superior Energy Services, Inc.* | | 74,900 | 1,574,398 |
| | | 4,689,564 |
Food Products - 2.2% | | | |
J.M. Smucker Co. | | 37,400 | 2,253,724 |
| | | |
Gas Utilities - 4.3% | | | |
Energen Corp. | | 41,600 | 1,935,648 |
Questar Corp. | | 57,300 | 2,475,360 |
| | | 4,411,008 |
Health Care Equipment & Supplies - 4.8% | | | |
Hospira, Inc.* | | 51,000 | 2,889,150 |
Kinetic Concepts, Inc.* | | 44,500 | 2,127,545 |
| | | 5,016,695 |
Health Care Providers & Services - 8.7% | | | |
AmerisourceBergen Corp. | | 58,300 | 1,686,036 |
HealthSpring, Inc.* | | 123,200 | 2,168,320 |
Laboratory Corp. of America Holdings* | | 18,300 | 1,385,493 |
Lincare Holdings, Inc.* | | 82,900 | 3,720,552 |
| | | 8,960,401 |
| | | |
Equity Securities - Cont'd | | Shares | Value |
Hotels, Restaurants & Leisure - 2.3% | | | |
Brinker International, Inc. | | 123,200 | $2,375,296 |
| | | |
Household Durables - 1.7% | | | |
Tupperware Brands Corp. | | 37,400 | 1,803,428 |
| | | |
Household Products - 2.5% | | | |
Church & Dwight Co., Inc. | | 38,000 | 2,544,100 |
| | | |
IT Services - 6.6% | | | |
Fidelity National Information Services, Inc. | | 98,500 | 2,308,840 |
Syntel, Inc. | | 57,200 | 2,200,484 |
Wright Express Corp.* | | 77,600 | 2,337,312 |
| | | 6,846,636 |
Leisure Equipment & Products - 1.4% | | | |
Polaris Industries, Inc. | | 28,000 | 1,432,480 |
| | | |
Life Sciences - Tools & Services - 5.4% | | | |
Dionex Corp.* | | 40,300 | 3,013,634 |
Mettler-Toledo International, Inc.* | | 23,200 | 2,533,440 |
| | | 5,547,074 |
Machinery - 5.2% | | | |
Bucyrus International, Inc. | | 50,500 | 3,332,495 |
SPX Corp. | | 30,500 | 2,022,760 |
| | | 5,355,255 |
Metals & Mining - 1.9% | | | |
Reliance Steel & Aluminum Co. | | 41,000 | 2,018,430 |
| | | |
Multiline Retail - 3.8% | | | |
Dollar Tree, Inc.* | | 38,900 | 2,303,658 |
Nordstrom, Inc. | | 40,400 | 1,650,340 |
| | | 3,953,998 |
Oil, Gas & Consumable Fuels - 1.9% | | | |
Denbury Resources, Inc.* | | 117,400 | 1,980,538 |
| | | |
Professional Services - 0.9% | | | |
Towers Watson & Co. | | 18,900 | 897,750 |
| | | |
Semiconductors & Semiconductor Equipment - 3.1% | | | |
Hittite Microwave Corp.* | | 15,300 | 672,741 |
National Semiconductor Corp. | | 175,600 | 2,537,420 |
| | | 3,210,161 |
| | | |
Equity Securities - Cont'd | | Shares | Value |
Software - 3.0% | | | |
Sybase, Inc.* | | 67,600 | $3,151,512 |
| | | |
Specialty Retail - 4.2% | | | |
GameStop Corp.* | | 76,300 | 1,671,733 |
Ross Stores, Inc. | | 50,400 | 2,694,888 |
| | | 4,366,621 |
Textiles, Apparel & Luxury Goods - 4.8% | | | |
Deckers Outdoor Corp.* | | 24,000 | 3,312,000 |
Phillips-Van Heusen Corp. | | 28,100 | 1,611,816 |
| | | 4,923,816 |
Thrifts & Mortgage Finance - 1.9% | | | |
Hudson City Bancorp, Inc. | | 139,700 | 1,978,152 |
| | | |
Trading Companies & Distributors - 2.3% | | | |
WESCO International, Inc.* | | 68,400 | 2,374,164 |
| | | |
Wireless Telecommunication Services - 2.2% | | | |
NII Holdings, Inc.* | | 56,000 | 2,332,960 |
| | | |
| | | |
Total Equity Securities (Cost $78,859,852) | | | 99,174,780 |
| | | |
| | Principal | |
High Social Impact Investments - 1.4% | | Amount | |
Calvert Social Investment Foundation Notes, 1.76%, | | | |
7/1/11 (b)(i)(r) | | $1,419,488 | 1,396,450 |
| | | |
Total High Social Impact Investments (Cost $1,419,488) | | | 1,396,450 |
| | | |
Time Deposit - 2.6% | | | |
State Street Corp. Time Deposit, 0.01%, 4/1/10 | | 2,685,937 | 2,685,937 |
| | | |
Total Time Deposit (Cost $2,685,937) | | | 2,685,937 |
| | | |
| | | |
TOTAL INVESTMENTS (Cost $82,965,277) - 99.8% | | | 103,257,167 |
Other assets and liabilities, net - 0.2% | | | 228,422 |
Net Assets - 100% | | | $103,485,589 |
| | | |
Net Assets Consist of: | | | |
Paid-in capital applicable to the following shares of common stock, with 250,000,000 shares of $0.01 par value shares authorized: | | | |
Class A: 3,374,285 shares outstanding | | | $77,284,645 |
Class B: 224,595 shares outstanding | | | 6,834,191 |
Class C: 450,450 shares outstanding | | | 9,492,324 |
Class I: 255,449 shares outstanding | | | 5,879,504 |
Undistributed net investment income (loss) | | | (547,685) |
Accumulated net realized gain (loss) on investments | | | (15,749,280) |
Net unrealized appreciation (depreciation) on investments | | | 20,291,890 |
| | | |
Net Assets | | | $103,485,589 |
| | | |
Net Asset Value Per Share: | | | |
Class A (based on net assets of $82,430,320) | | | $24.43 |
Class B (based on net assets of $4,875,265) | | | $21.71 |
Class C (based on net assets of $9,552,546) | | | $21.21 |
Class I (based on net assets of $6,627,458) | | | $25.94 |
| | | |
| | | |
Restricted Securities | | Acquisition Dates | Cost |
Calvert Social Investment Foundation Notes, 1.76%, 7/1/11 | | 7/1/08 | $1,419,488 |
(b) This security was valued by the Board of Directors. See note A.
(i) Restricted securities represent 1.4% of the net assets of the Fund.
(r) The coupon rate shown on floating or adjustable rate securities represents the rate at period end.
* Non-income producing security.
See notes to financial statements.
Statement of Operations
Six Months Ended March 31, 2010
Net Investment Income | | |
Investment Income: | | |
Dividend income | | $321,198 |
Interest income | | 12,557 |
Total investment income | | 333,755 |
| | |
Expenses: | | |
Investment advisory fee | | 307,099 |
Transfer agency fees and expenses | | 164,990 |
Administrative fees | | 114,320 |
Distribution Plan expenses: | | |
Class A | | 132,792 |
Class B | | 24,124 |
Class C | | 43,629 |
Directors' fees and expenses | | 5,624 |
Custodian fees | | 12,793 |
Registration fees | | 22,055 |
Reports to shareholders | | 43,913 |
Professional fees | | 12,447 |
Miscellaneous | | 5,475 |
Total expenses | | 889,261 |
Reimbursement from Advisor: | | |
Class I | | (7,693) |
Fees paid indirectly | | (128) |
Net expenses | | 881,440 |
| | |
Net Investment Income (Loss) | | (547,685) |
| | |
Realized and Unrealized Gain (Loss) on Investments | | |
Net realized gain (loss) | | 3,754,646 |
Change in unrealized appreciation or (depreciation) | | 12,577,859 |
| | |
Net Realized and Unrealized Gain | | |
(Loss) on Investments | | 16,332,505 |
| | |
Increase (Decrease) in Net Assets | | |
Resulting From Operations | | $15,784,820 |
See notes to financial statements.
Statements of Changes in Net Assets
Increase (Decrease) in Net Assets | | Six Months Ended
March 31,
2010 | Year Ended
September 30,
2009 |
Operations: | | | |
Net investment income (loss) | | ($547,685) | ($811,224) |
Net realized gain (loss) | | 3,754,646 | (13,562,431) |
Change in unrealized appreciation | | | |
or (depreciation) | | 12,577,859 | 2,549,748 |
| | | |
| | | |
Increase (Decrease) in Net Assets | | | |
Resulting From Operations | | 15,784,820 | (11,823,907) |
| | | |
| | | |
Capital share transactions: | | | |
Shares sold: | | | |
Class A Shares | | 4,929,924 | 10,271,700 |
Class B Shares | | 190,101 | 340,561 |
Class C Shares | | 360,401 | 582,113 |
Class I Shares | | 2,293,065 | 861,998 |
Redemption fees: | | | |
Class A Shares | | 29 | 11,208 |
Class B Shares | | -- | 89 |
Class C Shares | | 5 | 82 |
Shares redeemed: | | | |
Class A Shares | | (7,513,520) | (14,039,663) |
Class B Shares | | (885,883) | (2,151,260) |
Class C Shares | | (520,416) | (1,290,548) |
Class I Shares | | (359,015) | (379,390) |
Total capital share transactions | | (1,505,309) | (5,793,110) |
| | | |
Total Increase (Decrease) in Net Assets | | 14,279,511 | (17,617,017) |
| | | |
Net Assets | | | |
Beginning of period | | 89,206,078 | 106,823,095 |
End of period (including net investment loss of | | | |
$547,685 and $0, respectively) | | $103,485,589 | $89,206,078 |
See notes to financial statements.
Statements of Changes in Net Assets
Capital Share Activity | | Six Months Ended
March 31,
2010 | Year Ended
September 30,
2009 |
Shares sold: | | | |
Class A Shares | | 222,080 | 590,092 |
Class B Shares | | 9,429 | 22,798 |
Class C Shares | | 18,396 | 38,543 |
Class I Shares | | 95,314 | 47,056 |
Shares redeemed: | | | |
Class A Shares | | (339,151) | (803,556) |
Class B Shares | | (43,978) | (139,206) |
Class C Shares | | (27,128) | (86,788) |
Class I Shares | | (15,190) | (20,223) |
Total capital share activity | | (80,228) | (351,284) |
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. Effective March 1, 2010, Class B shares are no longer offered for purchase, except through reinvestment of dividends and/or distributions and through certain exchanges. 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 expens es 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 and have lower levels of expenses than Class A Shares. 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). The Fund uses independent pricing services approved by the Board of Directors to value its investments wherever possible. 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. 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 not reliable are fair 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, 2010 securities valued at $1,396,450, or 1.4% of net assets, were fair valued in good faith under the direction of the Board of Directors.
The Fund utilizes various methods to measure the fair value of its investments. Generally Accepted Accounting Principles (GAAP) establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used to value assets and liabilities at measurement date. These inputs are summarized in the three broad levels listed below:
Level 1 -- quoted prices in active markets for identical securities
Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy during the period. For additional information on the Fund's policy regarding valuation of investments, please refer to the Fund's most recent prospectus.
The following is a summary of the inputs used to value the Fund's net assets as of March 31, 2010:
| Valuation Inputs |
Investments in Securities | Level 1 | Level 2 | Level 3 | Total |
Equity securities* | $99,174,780 | - | -- | $99,174,780 |
Other debt obligations | -- | $2,685,937 | $1,396,450 | 4,082,387 |
TOTAL | $99,174,780 | $2,685,937 | $1,396,450** | $103,257,167 |
* For further breakdown of equity securities by industry type, please refer to the Statement of Net Assets.
**Level 3 securities represent 1.4% of net assets.
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. Information regarding restricted securities is included at the end of the Fund's Statement of Net Assets.
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 and may include proceeds from litigation. Dividend income is recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost investments and/or as a realized gain. 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: The Fund charges a 2% redemption fee on redemptions, including exchanges, made within 30 days of purchase in the same Fund (within seven days for Class I shares). The redemption fee is payable to the Class of the Fund from which the redemption is made, and is accounted for as an addition to paid-in capital. The fee 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 fees may be paid indirectly by credits earned on the Fund's cash on deposit with the bank. These credits are used to reduce the Fund's expenses. Such a deposit arrangement may be 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.
Management has analyzed the Fund's tax positions taken for all open federal income tax years and has concluded that no provision for federal income tax is required in the Fund's financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service for a period of three years.
New Accounting Pronouncements: In January 2010, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2010-06 "Improving Disclosures about Fair Value Measurements". ASU 2010-06 will require reporting entities to make new disclosures about amount and reasons for significant transfers in and out of Level 1 and Level 2 fair value measurements and input and valuation techniques used to measure fair value for both recurring and nonrecurring fair value measurements that fall in either Level 2 or Level 3, and information on purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measures. The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2009 except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measures, which are effective for fiscal years beginning after December 15, 2010. At this time, management is evaluating the implications of ASU No. 2010-06 and its impact on the financial statements has not been determined.
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 UNIFI Mutual Holding Company. The Advisor provides investment advisory services and pays the salaries and fees of officers and Directors of the Fund who are employees of the Advisor or its affiliates. For its services, the Advisor receives an annual fee, payable monthly, of .65% of the Fund's average daily net assets. Under the terms of the agreement, $56,756 was payable at period end. In addition, $41,387 was payable at period end for operating expenses paid by the Advisor during March 31, 2010.
The Advisor has contractually agreed to limit net annual fund operating expenses through January 31, 2011 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, and extraordinary expenses. To the extent that any expense offset credits are earned, the Advisor's obligation under the contractual limitation may be reduced and the Advisor may benefit from the expense offset arrangement.
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, $21,011 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. The amount actually paid by the Fund is an annualized fee, payable monthly of .35%, 1.00% and 1.00% of the Fund's 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, $36,586 was payable at period end.
The Distributor received $12,957 as its portion of the commissions charged on sales of the Fund's Class A shares for the six months ended March 31, 2010.
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 $42,692 for the six months ended March 31, 2010. Under the terms of the agreement, $7,163 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 $44,000 plus a meeting fee of $2,000 for each Board meeting attended. Additional fees of up to $5,000 annually may be paid to the Board chairs and Committee chairs and $2,500 annually may be paid to Committee members, plus a Committee meeting fee of $500 for each Committee meeting attended. 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 $20,425,995 and $24,453,450, respectively.
The cost of investments owned at March 31, 2010 for federal income tax purposes was $84,340,264. Net unrealized appreciation aggregated $18,916,903, of which $21,017,665 related to appreciated securities and $2,100,762 related to depreciated securities.
Net realized capital loss carryforwards for federal income tax purposes of $372,018 and $6,150,178 at September 30, 2009 may be utilized to offset future capital gains until expiration in September 2016 and September 2017, respectively.
The Fund intends to elect to defer net capital losses of $11,595,798 incurred from November 1, 2008 through September 30, 2009 and treat them as arising in the fiscal year ending September 30, 2010.
Note D -- Line of Credit
A financing agreement is in place with all Calvert Group Funds and State Street Corporation ("SSC"). Under the agreement, SSC provides an unsecured line of credit facility, in the aggregate amount of $50 million ($25 million committed and $25 million uncommitted), accessible by the Funds for temporary or emergency purposes only. Borrowings under the committed facility bear interest at the higher of the London Interbank Offered Rate, (LIBOR) or the overnight Federal Funds Rate plus 1.25% per annum. A commitment fee of .15% per annum is incurred on the unused portion of the committed facility, which is allocated to all participating funds. The Fund had no loans outstanding pursuant to this line of credit during the six months ended March 31, 2010.
Note E - Subsequent Events
In preparing the financial statements as of March 31, 2010, no subsequent events or transactions occurred that would have materially impacted the financial statements as presented.
Financial Highlights
| | Periods Ended | |
| | March 31, | September 30, | September 30, | |
Class A Shares | | 2010 | 2009 | 2008 | |
Net asset value, beginning | | $20.71 | $23.00 | $28.11 | |
Income from investment operations | | | | | |
Net investment income (loss) | | (.12) | (.17) | (.21) | |
Net realized and unrealized gain (loss) | | 3.84 | (2.12) | (4.49) | |
Total from investment operations | | 3.72 | (2.29) | (4.70) | |
Distributions from | | | | | |
Net realized gain | | -- | -- | (.41) | |
Total distributions | | -- | -- | (.41) | |
Total increase (decrease) in net asset value | | 3.72 | (2.29) | (5.11) | |
Net asset value, ending | | $24.43 | $20.71 | $23.00 | |
| | | | | |
Total return* | | 17.96% | (9.96%) | (16.97%) | |
Ratios to average net assets:A | | | | | |
Net investment income (loss) | | (1.08%) (a) | (.92%) | (.79%) | |
Total expenses | | 1.79% (a) | 1.88% | 1.66% | |
Expenses before offsets | | 1.79% (a) | 1.88% | 1.66% | |
Net expenses | | 1.79% (a) | 1.88% | 1.65% | |
Portfolio turnover | | 22% | 72% | 49% | |
Net assets, ending (in thousands) | | $82,430 | $72,289 | $85,195 | |
| | | | | |
| | | | | |
| | | Years Ended | | |
| | September 30, | September 30, | September 30, | |
Class A Shares | | 2007(z) | 2006 | 2005 | |
Net asset value, beginning | | $24.02 | $23.42 | $21.60 | |
Income from investment operations | | | | | |
Net investment income (loss) | | (.26) | (.27) | (.31) | |
Net realized and unrealized gain (loss) | | 4.35 | .87 | 2.13 | |
Total from investment operations | | 4.09 | .60 | 1.82 | |
Total increase (decrease) in net asset value | | 4.09 | .60 | 1.82 | |
Net asset value, ending | | $28.11 | $24.02 | $23.42 | |
| | | | | |
Total return* | | 17.03% | 2.56% | 8.43% | |
Ratios to average net assets:A | | | | | |
Net investment income (loss) | | (.98%) | (1.05%) | (1.26%) | |
Total expenses | | 1.66% | 1.71% | 1.68% | |
Expenses before offsets | | 1.66% | 1.71% | 1.68% | |
Net expenses | | 1.64% | 1.69% | 1.68% | |
Portfolio turnover | | 47% | 31% | 157% | |
Net assets, ending (in thousands) | | $107,976 | $103,499 | $110,970 | |
See notes to financial highlights.
Financial Highlights
| | | Periods Ended | |
| | March 31, | September 30, | September 30, |
Class B Shares | | 2010 | 2009 | 2008 |
Net asset value, beginning | | $18.50 | $20.78 | $25.66 |
Income from investment operations | | | | |
Net investment income (loss) | | (.23) | (.39) | (.47) |
Net realized and unrealized gain (loss) | | 3.44 | (1.89) | (4.00) |
Total from investment operations | | 3.21 | (2.28) | (4.47) |
Distributions from | | | | |
Net realized gain | | -- | -- | (.41) |
Total distributions | | -- | -- | (.41) |
Total increase (decrease) in net asset value | | 3.21 | (2.28) | (4.88) |
Net asset value, ending | | $21.71 | $18.50 | $20.78 |
| | | | |
Total return* | | 17.35% | (10.97%) | (17.70%) |
Ratios to average net assets:A | | | | |
Net investment income (loss) | | (2.15%) (a) | (2.04%) | (1.73%) |
Total expenses | | 2.86% (a) | 2.99% | 2.57% |
Expenses before offsets | | 2.86% (a) | 2.99% | 2.57% |
Net expenses | | 2.86% (a) | 2.99% | 2.56% |
Portfolio turnover | | 22% | 72% | 49% |
Net assets, ending (in thousands) | | $4,875 | $4,793 | $7,803 |
| | | | |
| | | | |
| | | Years Ended | |
| | September 30, | September 30, | September 30, |
Class B Shares | | 2007 (z) | 2006 | 2005 |
Net asset value, beginning | | $22.13 | $21.76 | $20.24 |
Income from investment operations | | | | |
Net investment income (loss) | | (.45) | (.49) | (.49) |
Net realized and unrealized gain (loss) | | 3.98 | .86 | 2.01 |
Total from investment operations | | 3.53 | .37 | 1.52 |
Total increase (decrease) in net asset value | | 3.53 | .37 | 1.52 |
Net asset value, ending | | $25.66 | $22.13 | $21.76 |
| | | | |
Total return* | | 15.95% | 1.70% | 7.51% |
Ratios to average net assets:A | | | | |
Net investment income (loss) | | (1.86%) | (1.91%) | (2.12%) |
Total expenses | | 2.54% | 2.57% | 2.54% |
Expenses before offsets | | 2.54% | 2.57% | 2.54% |
Net expenses | | 2.52% | 2.55% | 2.53% |
Portfolio turnover | | 47% | 31% | 157% |
Net assets, ending (in thousands) | | $11,613 | $13,752 | $16,503 |
See notes to financial highlights.
Financial Highlights
| | | Periods Ended | |
| | March 31, | September 30, | September 30, |
Class C Shares | | 2010 | 2009 | 2008 |
Net asset value, beginning | | $18.05 | $20.20 | $24.93 |
Income from investment operations | | | | |
Net investment income (loss) | | (.18) | (.28) | (.38) |
Net realized and unrealized gain (loss) | | 3.34 | (1.87) | (3.94) |
Total from investment operations | | 3.16 | (2.15) | (4.32) |
Distributions from | | | | |
Net realized gain | | -- | -- | (.41) |
Total distributions | | -- | -- | (.41) |
Total increase (decrease) in net asset value | | 3.16 | (2.15) | (4.73) |
Net asset value, ending | | $21.21 | $18.05 | $20.20 |
| | | | |
Total return* | | 17.51% | (10.64%) | (17.62%) |
Ratios to average net assets:A | | | | |
Net investment income (loss) | | (1.87%) (a) | (1.75%) | (1.57%) |
Total expenses | | 2.58% (a) | 2.71% | 2.42% |
Expenses before offsets | | 2.58% (a) | 2.71% | 2.42% |
Net expenses | | 2.58% (a) | 2.70% | 2.42% |
Portfolio turnover | | 22% | 72% | 49% |
Net assets, ending (in thousands) | | $9,553 | $8,287 | $10,252 |
| | | | |
| | | | |
| | | Years Ended | |
| | September 30, | September 30, | September 30, |
Class C Shares | | 2007 (z) | 2006 | 2005 |
Net asset value, beginning | | $21.47 | $21.10 | $19.62 |
Income from investment operations | | | | |
Net investment income (loss) | | (.41) | (.42) | (.44) |
Net realized and unrealized gain (loss) | | 3.87 | .79 | 1.92 |
Total from investment operations | | 3.46 | .37 | 1.48 |
Total increase (decrease) in net asset value | | 3.46 | .37 | 1.48 |
Net asset value, ending | | $24.93 | $21.47 | $21.10 |
| | | | |
Total return* | | 16.12% | 1.75% | 7.54% |
Ratios to average net assets:A | | | | |
Net investment income (loss) | | (1.74%) | (1.84%) | (2.07%) |
Total expenses | | 2.42% | 2.49% | 2.49% |
Expenses before offsets | | 2.42% | 2.49% | 2.49% |
Net expenses | | 2.41% | 2.47% | 2.49% |
Portfolio turnover | | 47% | 31% | 157% |
Net assets, ending (in thousands) | | $13,275 | $12,831 | $14,038 |
See notes to financial highlights.
Financial Highlights
| | | Periods Ended | |
| | March 31, | September 30, | September 30, |
Class I Shares | | 2010 | 2009 | 2008 |
Net asset value, beginning | | $21.89 | $24.06 | $29.16 |
Income from investment operations | | | | |
Net investment income (loss) | | (.02) | .02 | ** |
Net realized and unrealized gain (loss) | | 4.07 | (2.19) | (4.69) |
Total from investment operations | | 4.05 | (2.17) | (4.69) |
Distributions from | | | | |
Net realized gain | | -- | -- | (.41) |
Total distributions | | -- | -- | (.41) |
Total increase (decrease) in net asset value | | 4.05 | (2.17) | (5.10) |
Net asset value, ending | | $25.94 | $21.89 | $24.06 |
| | | | |
Total return* | | 18.50% | (9.02%) | (16.31%) |
Ratios to average net assets:A | | | | |
Net investment income (loss) | | (.16%) (a) | .10% | .01% |
Total expenses | | 1.16% (a) | 1.28% | 1.18% |
Expenses before offsets | | .86% (a) | .86% | .87% |
Net expenses | | .86% (a) | .86% | .86% |
Portfolio turnover | | 22% | 72% | 49% |
Net assets, ending (in thousands) | | $6,627 | $3,837 | $3,573 |
| | | | |
| | | | |
| | | Years Ended | |
| | September 30, | September 30, | September 30, |
Class I Shares | | 2007 (z) | 2006 | 2005 |
Net asset value, beginning | | $24.73 | $23.89 | $21.85 |
Income from investment operations | | | | |
Net investment income (loss) | | (.05) | (.02) | (.06) |
Net realized and unrealized gain (loss) | | 4.48 | .86 | 2.10 |
Total from investment operations | | 4.43 | .84 | 2.04 |
Total increase (decrease) in net asset value | | 4.43 | .84 | 2.04 |
Net asset value, ending | | $29.16 | $24.73 | $23.89 |
| | | | |
Total return* | | 17.91% | 3.52% | 9.34% |
Ratios to average net assets:A | | | | |
Net investment income (loss) | | (0.19%) | (0.20%) | (0.43%) |
Total expenses | | 1.14% | 1.90% | 1.28% |
Expenses before offsets | | .87% | .88% | .87% |
Net expenses | | .86% | .86% | .86% |
Portfolio turnover | | 47% | 31% | 157% |
Net assets, ending (in thousands) | | $4,311 | $3,273 | $2,596 |
See notes to financial highlights.
A Total expenses do not reflect amounts reimbursed and/or waived by the Advisor or reductions from expense offset arrangements. Expenses before offsets reflect expenses after reimbursement and/or waiver by the Advisor but prior to reductions from expense offset arrangements. Net expenses are net of all reductions and represent the net expenses paid by the Fund.
(a) Annualized.
(z) Per share figures are calculated using the Average Shares 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.
** Less than $0.01 per share.
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, expre ssed 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
The Proxy Voting Guidelines of the Calvert Funds that the Fund uses to determine how to vote proxies relating to portfolio securities are 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.
Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund's website at www.calvert.com and on the SEC's website at www.sec.gov.
Availability of Quarterly Portfolio Holdings
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund's Form N-Q is available on the SEC's website at www.sec.gov. The Fund's Form N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Basis for Board's Approval of Investment Advisory Contracts
At a meeting held on December 8, 2009, the Board of Directors, and by a separate vote, the disinterested Directors, approved the continuance of the Investment Advisory Agreement between Calvert World Values Fund, Inc. and the Advisor and the Investment Subadvisory Agreement between the Advisor and the Subadvisor with respect to the Fund.
In evaluating the Investment Advisory Agreement, the Board considered a variety of information relating to the Fund and the Advisor. The disinterested Directors reviewed a report prepared by the Advisor regarding various services provided to the Fund by the Advisor and its affiliates. Such report included, among other data, information regarding the Advisor's personnel and the Advisor's revenue and cost of providing services to the Fund, and a separate report prepared by an independent third party, which provided a statistical analysis comparing the Fund's investment performance, expenses, and fees to comparable mutual funds.
The disinterested Directors were separately represented by independent legal counsel with respect to their consideration of the reapproval of the Investment Advisory Agreement and the Investment Subadvisory Agreement. Prior to voting, the disinterested Directors reviewed the proposed continuance of the Investment Advisory Agreement and Investment Subadvisory Agreement with management and also met in private sessions with their counsel at which no representatives of management were present.
In the course of its deliberations regarding the Investment Advisory Agreement, the Board considered the following factors, among others: the nature, extent and quality of the services provided by the Advisor, including the personnel providing such services; the Advisor's financial condition; the level and method of computing the Fund's advisory fee; comparative performance, fee and expense information for the Fund; the profitability of the Calvert Group of Funds to the Advisor and its affiliates; the allocation of the Fund's brokerage, including the Advisor's process for monitoring "best execution"; the direct and indirect benefits, if any, derived by the Advisor and its affiliates from their relationship with the Fund; the effect of the Fund's growth and size on the Fund's performance and expenses; the affiliated distributor's process for monitoring sales load breakpoints; the Advisor's compliance programs and policies; the Advisor's performance of substantially similar duties for other funds; and any p ossible conflicts of interest.
In considering the nature, extent and quality of the services provided by the Advisor under the Investment Advisory Agreement, the Board reviewed information provided by the Advisor relating to its operations and personnel, including, among other information, biographical information on the Advisor's supervisory and professional staff and descriptions of its organizational and management structure. The Board also took into account similar information provided periodically throughout the previous year by the Advisor as well as the Board's familiarity with the Advisor's senior management through Board of Directors' meetings, discussions and other reports. The Advisor's administrative capabilities, including its ability to supervise the other service providers for the Fund, were also considered. The Board also took into account the environmental, social and governance research and analysis provided by the Advisor to the Fund. The Board discussed the Advisor's effectiveness in monitoring the performance of th e Subadvisor and its timeliness in responding to performance issues. The Board concluded that it was satisfied with the nature, extent and quality of services provided to the Fund by the Advisor under the Investment Advisory Agreement.
In considering the Fund's performance, the Board noted that it reviewed on a quarterly basis detailed information about the Fund's performance results, portfolio composition and investment strategies. In addition, the Board took into account overall financial market conditions. The Board also reviewed various comparative data provided to it in connection with its consideration of the renewal of the Investment Advisory Agreement, including, among other information, a comparison of the Fund's total return with its Lipper index and with that of other mutual funds deemed to be in its peer group by an independent third party in its report. This comparison indicated that the Fund's performance was below the median of its peer group for the one, three- and five-year periods ended June 30, 2009. The data also indicated that the Fund underperformed its Lipper index for the same one-, three- and five-year periods. The Board took into account management's discussion of the Fund's performance and the factors that con tributed to such underperformance. The Board considered the Advisor's continued monitoring of the Fund's performance. The Board noted that the Fund's performance prior to September 2005 was attributable to the Fund's previous subadvisor. Based upon its review, the Board concluded that appropriate action was being taken with respect to the Fund's performance.
In considering the Fund's fees and expenses, the Board compared the Fund's fees and total expense ratio with various comparative data for the funds in its peer group. Among other findings, the data indicated that the Fund's advisory fee was below the median of its peer group and that total expenses were above the median of its peer group. The Board noted that the allocation of advisory and administrative fees may vary among the Fund's peer group. In addition, the Board took into account the fees the Advisor charged to its other clients and considered these fee comparisons in light of the differences in managing these other accounts. The Board noted the Advisor's discussion of the Fund's expenses and certain factors that affected the level of such expenses, including the cost of providing the environmental, social and governance research and analysis provided by the Advisor. Based upon its review, the Board determined that the advisory fee was reasonable in view of the quality of services provided by the A dvisor and the other factors considered.
The Board reviewed the Advisor's profitability on a fund-by-fund basis. In reviewing the overall profitability of the advisory fee to the Fund's Advisor, the Board also considered the fact that affiliates of the Advisor provided shareholder servicing and administrative services to the Fund for which they received compensation. The information considered by the Board included Calvert's operating profit margin information both before and after tax expenses with respect to the services that the Advisor and its affiliates provided to the Calvert Group of Funds complex. The Board reviewed the profitability of the Advisor's relationship with the Fund in terms of the total amount of annual advisory fees it received with respect to the Fund and whether the Advisor had the financial wherewithal to continue to provide a high level of services to the Fund. The Board noted that the Advisor had reimbursed expenses of the Fund. The Board also noted the Advisor's current undertaking to maintain expense limitations for t he Fund's Class I shares. The Board also considered that the Advisor derived benefits to its reputation and other indirect benefits from its relationship with the Fund. The Board also noted that the Advisor paid the subadvisory fee to the Subadvisor. Based upon its review, the Board concluded that the Advisor's and its affiliates' level of profitability from their relationship with the Fund was reasonable.
The Board considered the effect of the Fund's current size and potential growth on its performance and expenses. The Board concluded that adding breakpoints to the advisory fee at specified asset levels would not be appropriate at this time given the Fund's current size. The Board noted that if the Fund's assets increased over time, the Fund might realize other economies of scale if assets increased proportionally more than certain other expenses.
In reapproving the Investment Advisory Agreement, the Board, including the disinterested Directors, did not identify any single factor as controlling, and each Director may have attributed different weight to various factors.
In evaluating the Investment Subadvisory Agreement, the disinterested Directors reviewed information provided by the Subadvisor relating to its operations, personnel, investment philosophy, strategies and techniques. Among other information, the Subadvisor provided biographical information on portfolio management and other professional staff, performance information for itself, and descriptions of its investment philosophies, strategies and techniques, organizational and management structures and brokerage policies and practices.
The Board reapproved the Investment Subadvisory Agreement between the Subadvisor and the Advisor based on a number of factors relating to the Subadvisor's ability to perform under the Investment Subadvisory Agreement. In the course of its deliberations, the Board evaluated, among other factors: the nature, extent and the quality of the services to be provided by the Subadvisor; the Subadvisor's management style and long-term performance record; the Fund's performance record and the Subadvisor's performance in employing its investment strategies; the Subadvisor's current level of staffing and its overall resources; the qualifications and experience of the Subadvisor's personnel; the Subadvisor's financial condition with respect to its ability to perform the services required under the Investment Subadvisory Agreement; the Subadvisor's compliance systems, including those related to personal investing; and any disciplinary history. Based upon its review, the Board concluded that it was satisfied with the nat ure, extent and quality of services provided to the Fund by the Subadvisor under the Investment Subadvisory Agreement.
As noted above, the Board considered, among other information, the Fund's performance during the one-, three- and five-year periods ended June 30, 2009 as compared to the Fund's peer group and noted that it reviewed on a quarterly basis detailed information about the Fund's performance results, portfolio composition and investment strategies. The Board noted the Advisor's expertise and resources in monitoring the performance, investment style and risk-adjusted performance of the Subadvisor.
In considering the cost of services to be provided by the Subadvisor and the profitability to the Subadvisor of its relationship with the Fund, the Board noted that the subadvisory fee under the Investment Subadvisory Agreement was paid by the Advisor out of the advisory fee that the Advisor received under the Investment Advisory Agreement. The Board also relied on the ability of the Advisor to negotiate the Investment Subadvisory Agreement and the corresponding subadvisory fee at arm's length. In addition, the Board considered comparative fee information. Based upon its review, the Board determined that the subadvisory fee was reasonable. Because the Advisor pays the Subadvisor's subadvisory fee and the subadvisory fee was negotiated at arm's length by the Advisor, the cost of services to be provided by the Subadvisor and the profitability to the Subadvisor of its relationship with the Fund were not material factors in the Board's deliberations. For similar reasons, the Board did not consider the potenti al economies of scale in the Subadvisor's management of the Fund to be a material factor in its consideration.
In reapproving the Investment Subadvisory Agreement, the Board, including the disinterested Directors, did not identify any single factor as controlling, and each Director may have attributed different weight to various factors.
Conclusions
The Board reached the following conclusions regarding the Investment Advisory Agreement and the Investment Subadvisory Agreement, among others: (a) the Advisor has demonstrated that it possesses the capability and resources to perform the duties required of it under the Investment Advisory Agreement; (b) the Subadvisor is qualified to manage the Fund's assets in accordance with the Fund's investment objectives and policies; (c) the Advisor and Subadvisor maintain appropriate compliance programs; (d) the Subadvisor is likely to execute its investment strategies consistently over time; (e) appropriate action is being taken with respect to the Fund's performance; and (f) the Fund's advisory and subadvisory fees are reasonable relative to those of similar funds and to the services to be provided by the Advisor and the Subadvisor. Based on its conclusions, the Board determined that reapproval of the Investment Advisory Agreement and the Investment Subadvisory Agreement would be in the best interests of the Fund and its shareholders.
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Calvert Group
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Calvert Distributors, Inc.
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Calvert Capital Accumulation Fund
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<PAGE>
Calvert International Opportunities Fund
Semi-Annual Report
March 31, 2010
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TABLE OF CONTENTS
4 | President's Letter |
7 | SRI Update |
10 | Portfolio Management Discussion |
15 | Shareholder Expense Example |
17 | Statement of Net Assets |
21 | Statement of Operations |
22 | Statements of Changes in Net Assets |
24 | Notes to Financial Statements |
29 | Financial Highlights |
33 | Explanation of Financial Tables |
35 | Proxy Voting and Availability of Quarterly Portfolio Holdings |
35 | Basis of Board's Approval for Investment Advisory Contracts |
Dear Shareholders:
Over the six-month reporting period, the global financial markets climbed higher amidst periods of volatility, as global stimulus policies took hold and economies worked to emerge from the worst recession in 50 years. By the end of 2009, corporate bonds had staged a remarkable nine-month rally, and stocks moved to 18-month highs in March 2010.
Early in 2010, the equity and fixed-income markets were buffeted by an array of concerns, including proposed U.S. financial regulations, trouble in China's economy, high levels of unemployment globally, and worries about the sovereign credit quality of Greece and other European countries. By the end of the reporting period, however, the markets had steadied and resumed their climb, reassured by the release of more positive economic data--particularly relating to the consumer sector.
Looking ahead, we see encouraging signs of economic recovery. However, we also anticipate that there will be a period of transition. Both the equity and fixed-income markets are likely to be challenged by interest-rate uncertainty, increased market volatility, and concerns about mounting government debt. In this environment, we believe that investment strategies that include sustainability criteria may be better positioned to provide long-term value.
Markets Move Higher
In a welcome reversal from the much more difficult time periods of 2008 and early 2009, U.S. stock indexes reported solid six-month gains across all styles, strategies, and capitalization ranges. The large-cap Russell 1000 Index and the Standard & Poor's 500 Index returned 12.11% and 11.75%, respectively. Small- and mid-cap indexes, as well as value and growth indexes, all posted healthy returns. On the international front, the MSCI EAFE Investable Market Index (IMI), a benchmark for international stocks, edged up 3.25%, and the MSCI Emerging Markets IMI was up 12.02%.
Following their robust rally of 2009, corporate bonds recorded more modest gains for the six-month reporting period, with the Barclays Capital U.S. Credit Index up 3.33%. Money market returns remained low, reflecting the Federal Reserve's continued target of 0% to 0.25% for the federal funds rate.
Sustainable and Responsible Investing
As the global economy slowly recovers and the Obama administration and Congress negotiate financial reform and implement the new health care law, priorities for sustainability initiatives worldwide have clearly shifted and realigned. On the environmental front, for instance, while last December's Copenhagen Summit didn't result in legally binding emissions targets, the major world economies did agree to carbon emissions limits.
In this complex environment, we believe it's more important than ever for sustainable investors to retain their focus on and commitment to initiatives that advance environmental, social, and corporate governance responsibilities. In the last six months since we reported to you, Calvert has made progress on several sustainable and responsible investment initiatives.
In March 2010, the United Nations Global Compact and the United Nations Development Fund for Women (UNIFEM) launched the Women's Empowerment Principles, extending the goals underlying the Calvert Women's Principles® to an international audience. The Women's Empowerment Principles set out guidelines for international business practices that establish high-level corporate support for gender equality, promote professional development for women, and measure and publicly report on companies' progress to achieve gender equality.
Board Diversity Front and Center
Calvert has been a rigorous advocate for minority and female representation on corporate boards of directors since the passage of the Sarbanes-Oxley Act of 2002. Last December, we filed our 50th shareholder resolution on board diversity, marking years of engagement with hundreds of companies on this issue. In March, Ceres, an organization of investors focused on sustainability, released a report called The 21st Century Corporation: The Ceres Roadmap for Sustainability, which lays out 20 key expectations for companies related to disclosure, governance, stakeholder engagement, and performance on key environmental and sustainability issues. We are proud that Ceres highlighted Calvert's work on board diversity in the report.
Recently, the Securities and Exchange Commission (SEC) approved board diversity disclosure requirements in proxy statements. To bolster the impact of this SEC requirement, Calvert has provided a scorecard that outlines the approach taken by companies in the Russell 1000 Index that have filed proxies since March 1, 2010. The scorecard compares board diversity disclosures from 2009 and 2010 and analyzes any progress. We believe that companies with high standards of corporate governance, including diverse boards, are better positioned to compete in the global marketplace.
On the Road to Recovery
Looking ahead, we believe that the worst of the recession is behind us. However, the economic recovery will be uneven, with ongoing market volatility. On a positive note, the global financial markets have continued to rally and the U.S. economy is showing improved vital signs. Investors, while still cautious, have become less risk-averse, moving away from the lowest-yielding securities. Most recently, encouraging data has shown that U.S. manufacturing and production levels are up, along with consumer spending and retail sales.
Global fiscal concerns, however, may still prove to be a significant drag on the pace of recovery. At home and abroad, governments at all levels are facing major fiscal challenges. Concerns about Greece's sovereign debt have spread to other European countries, unsettling the euro and raising concerns about countries in other regions as well.
In the U.S., as the government removes fiscal and monetary stimulus from the system, the economy must find a self-sustaining balance to continue its forward momentum. Of course, the Obama administration and Congress are grappling with credit-rating agency reform, banking reform, and the role of the Federal Reserve and U.S. government in the oversight of financial institutions and the markets, among many critical issues. In our view, over time, these efforts may work to redress some of the systemic imbalances revealed in our global financial system, providing additional stability to the economy and markets.
We believe that the U.S. and global economic recovery will move ahead at a pace largely determined by businesses and the consumer. Corporate earnings reports have been strong and businesses appear to be positioned for growth, with larger inventories and increased spending on equipment. In terms of the consumer, however, as long as unemployment, foreclosures, and consumer debt remain relatively high, it will be difficult for the economic expansion to truly take hold.
Check Your Portfolio Allocations
In view of shifting market conditions, it may be wise to review your overall portfolio asset allocation and investment strategy with your financial advisor. Check to ensure that your target mix of U.S. and international stocks, bonds, and cash is well-diversified and appropriate given your investment goals, stage of life, and attitude toward risk.
We encourage you to visit our web site, www.calvert.com, for frequent updates and commentary on economic and market developments from Calvert professionals.
As always, we appreciate your investing with Calvert.
Sincerely,
Barbara J. Krumsiek
President and CEO
Calvert Group, Ltd.
April 2010
SRI Update
from the Calvert Sustainability Research Department
Calvert continues to advocate for responsible management of environmental, social, and governance (ESG) factors, which we believe create long-term value and are even more important during this period of recovery from the financial crisis of 2008 and 2009. We've also had unprecedented opportunities to help create new policies in these areas--and make sure the voices of our shareholders are heard loud and strong.
Financial Reform
The financial crisis of the past two years has revealed a number of critical issues and risks that need to be addressed if we are to prevent a repeat experience in the future. Calvert has been working to promote financial reform at the regulatory and legislative level--particularly to fortify the regulatory framework, strengthen consumer protections, and promote more responsible corporate governance.
One such area of financial reform relating to consumer protection is bank overdraft fee practices. We are leading an informal investor coalition that has engaged companies, supported legislation in Congress, and submitted comments to the Federal Reserve calling for changes in how banks provide short-term loans to consumers. We also filed shareholder resolutions calling on BB&T and Capital One to report to shareholders about their overdraft policies and practices, with an eye toward getting them to identify those that are abusive and predatory.
Other Shareholder Advocacy
For the 2010 proxy season, Calvert filed or co-filed 42 resolutions, focusing on climate change, board and employee diversity, executive compensation, sustainability reporting, and political contributions. To date, 26 resolutions have been withdrawn after companies agreed to address our concerns.
Say on Pay
It's particularly notable that we were able to successfully withdraw our "say on pay" resolutions at JPMorgan Chase, American Express, and Morgan Stanley after each agreed to hold a referendum on their compensation practices as part of the proxy statements for their 2010 annual meetings.
"Say on Pay" resolutions have become increasingly common since the financial crisis and bailout focused scrutiny on executive compensation and bonuses. Recipients of Troubled Asset Relief Program funding were required to implement advisory votes on executive pay, but those requirements end when companies repay their obligations. However, we are also working to persuade legislators to pass a bill that requires every publicly owned company to establish an annual advisory vote on pay.
Climate Change
Through participation in the Investor Network on Climate Risk and company dialogues, we have stepped up our support for incentives that will encourage companies to reduce carbon emissions. Calvert also met with several Securities and Exchange Commission (SEC) commissioners about providing interpretive guidance on how corporations should disclose greenhouse gas emissions data and present their analysis of climate risks and opportunities in filings. The SEC subsequently voted 3-2 to approve the measure, which is a major step toward increasing transparency on these issues.
Board Diversity
We were also pleased to see the SEC approve requirements for companies to disclose whether they consider diversity in identifying board director nominees. Public companies must also say if they have a stated policy to this effect and, if they do, they must also disclose how the policy is implemented and its effectiveness measured. Calvert helped lead efforts in favor of this requirement and, in fact, our comments are cited six times in the final SEC rule.
Calvert published a corporate board diversity disclosure scorecard that outlines how companies in the Russell 1000 Index have responded to the new disclosure requirements and analyzes any progress between disclosures made in 2009 and 2010. So far, we are pleased to see that a few companies provide previously unreleased information on the gender and racial make-up of their directors as well as statements about the value of diversity. However, we are disappointed that so few companies have a formal policy on director diversity.
The Women's Principles
Calvert continues to work with the United Nations Global Compact and the United Nations Development Fund for Women (UNIFEM) to create an international framework for the Calvert Women's Principles® (CWP). In March, this resulted in the launch of the Women's Empowerment Principles, which are based on the CWP. The launch event also honored International Women's Day by bringing together a variety of organizations to further explore how corporations in every industry and region around the world can apply these Principles.
We are also working with the Global Reporting Initiative Gender Working Group to update the G3 Guidelines to better address gender-related issues in sustainability reporting. Also the Gender Equality Principles Initiative--a partnership between the San Francisco Department on the Status of Women, Calvert, and Verité--launched a new website in March to provide companies with tools and resources to improve gender equality from the factory floor to the boardroom.
Other accomplishments include:
After three years of asking Allergan to provide annual updates on its efforts to eliminate the use of animals in Botox® safety testing, the company announced in January that it has cut animal use in its testing protocol by 78%. While we would prefer a 100% reduction, we believe this dramatic cut indicates a serious commitment to this goal.
Calvert has also been working on several fronts to help companies ensure that minerals in their electronics components are not fueling the war in the Democratic Republic of the Congo. More than five million lives have been lost and countless women and children victimized by brutal sexual violence in the Congo as armed groups fight for control of some of the richest deposits of tin, tantalum, tungsten, and gold in the world.
Community Investments
Many of our Funds participate in Calvert's High Social Impact Investing program, which is administered through the Calvert Social Investment Foundation. This community investment program may allocate a small percentage of Fund assets at below-market interest rates to investments that provide economic opportunity for struggling populations.1
One example of those supported by the Foundation's work is Alice, a 33-year old Kenyan woman with a large family who lost almost everything to political violence in 2008. However, a small loan from the Kenya Women's Finance Trust has enabled Alice to set up a small shop that provides for her family and sends her children to school.
Special Equities
A modest but important portion of certain funds is allocated to small private companies that are developing products or services that address important sustainability or environmental issues. One new addition was IGNIA Fund I, LP, a venture capital fund that invests in commercially promising businesses that improve the lives of those at the bottom of the socioeconomic pyramid. The Obama administration recently recognized IGNIA for its role in testing an innovative social impact star rating system that allows investors to better compare investment opportunities and helps channel more capital to higher-impact investments.
Also, a larger firm acquired Neodiagnostix--a special equities holding that provides innovative non-invasive tests for cervical cancer--during the reporting period, which provided a nice return for investors.2
1. As of March 31, 2010, Calvert Social Investment Foundation Community Investment Notes represented the following percentages of Fund net assets: Calvert Social Investment Fund (CSIF) Balanced Portfolio 1.07%, CSIF Bond Portfolio 0.35%, CSIF Equity Portfolio 0.50%, Calvert Capital Accumulation Fund 1.35%, Calvert World Values International Equity Fund 1.14%, Calvert New Vision Small Cap Fund 1.34%, and Calvert Large Cap Growth Fund 0.38%. The Calvert Social Investment Foundation is a 501(c)(3) nonprofit organization. The Foundation's Community Investment Note Program is not a mutual fund and should not be confused with any Calvert Group-sponsored investment product.
2. As of March 31, 2010, Ignia Fund I, LP represented 0.02% of Calvert Large Cap Growth Fund; Neodiagnostix represented 0.02% of CSIF Equity Portfolio. All holdings are subject to change without notice.
As of March 31, 2010, the following companies represented the following percentages of Fund net assets: BB&T represented 0.31% of Calvert Social Index Fund. Capital One represented 0.26% of Calvert Social Index Fund, 0.69% of CSIF Enhanced Equity Po rtfolio, 0.64% of CSIF Balanced Portfolio, and 1.38% of CSIF Bond Portfolio. JPMorgan Chase represented 0.69% of CSIF Balanced Portfolio, 2.69% of CSIF Bond Portfolio, 2.50% of Calvert Social Index Fund and 3.16% of CSIF Enhanced Equity Portfolio. American Express represented 0.14% of CSIF Balanced Portfolio, 1.72% of CSIF Enhanced Equity Portfolio and 0.61% of Calvert Social Index Fund. Morgan Stanley represented 0.91% of Calvert Large Cap Value Fund. Allergan represented 1.15% of CSIF Equity Portfolio, 1.76% of Calvert Large Cap Growth Fund and 0.28% of Calvert Social Index Fund.
All holdings are subject to change without notice.
Portfolio Management Discussion
Sophie Horsfall
of F&C Management Limited
Investment Performance
Calvert International Opportunities Fund Class A shares (at NAV) returned 5.35% for the six-month period ended March 31, 2010, outperforming the benchmark MSCI Europe, Australasia, Far East Small to MidCap Index (MSCI EAFE SMID), which returned 3.21% for the period. Stock selection made a positive contribution to the Fund's performance relative to the Index.
Investment Climate
Over the six-month period, global equity markets overcame a bout of heightened risk aversion to post healthy gains. Fears that Greece and other nations on the outskirts of the euro-zone would default on their debt pushed markets lower. But confidence recovered as fundamental data suggested that the economic recovery was gaining traction in the developed economies. Toward the end of the reporting period, the European Union and International Monetary Fund announced a 22 billion euro bailout for Greece--a deal which helped the euro strengthen against the U.S. dollar.
U.S. equities posted gains as a strong fourth-quarter earnings season--fueled by both cost-cutting and top-line growth--helped the recovery gain momentum. Markets faded in February before recovering again. On the
International Opportunities
Fund Statistics
March 31, 2010
Investment Performance
(total return at NAV*)
| 6 Months
Ended
3/31/10 | 12 Months
Ended
3/31/10 |
Class A | 5.35% | 56.99% |
Class C | 4.87% | 55.79% |
Class I | 5.56% | 57.64% |
Class Y | 5.45% | 57.50% |
MSCI EAFE SMID | 3.21% | 63.12% |
S&P Developed BMI ex-U.S. SmallCap Index | 4.80% | 69.53% |
Lipper International Small/Mid-Cap Core Funds Average | 6.07% | 68.76% |
| | |
| | |
Economic Sectors | % of Total
Investments | |
Consumer Discretionary | 24.5% | |
Consumer Staples | 10.6% | |
Energy | 1.8% | |
Financials | 11.2% | |
Health Care | 6.5% | |
Industrials | 21.4% | |
Information Technology | 7.3% | |
Materials | 6.7% | |
Time Deposit | 3.8% | |
Utilities | 6.2% | |
Total | 100% | |
* Investment performance/return at NAV does not reflect the deduction of the Fund's maximum 4.75% front-end sales charge or any deferred sales charge.
political front, President Obama's $3.8 trillion budget plan for 2011 would increase spending for job creation but also make cuts in other areas. The Obama Administration was also successful in finally enacting health care reform, which boosted many medical stocks.
Equity markets in the Asia-Pacific region also rallied as rising demand for commodities and infrastructure products drove gains for Australian mining companies. Emerging market equities lost a degree of momentum as possible sovereign debt defaults in Europe tempered investors' risk appetite. The prospect of the Chinese authorities tightening monetary policy, along with mounting fears that the pace of economic growth would slow and temper China's demand for imports, also dampened sentiment.
Portfolio Strategy
Stock selection drove the bulk of the Fund's outperformance, with its regional and sector allocation producing largely neutral effects on relative performance. Currency values also had a positive impact on performance--mainly due to our overweight position in the U.S.
Stock selection was particularly positive in Japan and the emerging markets--especially Mexico, Asia, and most notably, Australia. However, stock selection in the United Kingdom and Europe had a negative impact. On the sector level, the underweight position in Financials and overweight to Health Care were both positive. Overall, our stock picking was strong in defensive areas such as Utilities and Consumer Staples, and especially strong in Health Care.
At the stock level, Mexico-based sustainable microfinance stock Banco Compartamos continued to perform very well. In Japan, Shiseido posted strong results after announcing the acquisition of Bare Escentuals. Polycom benefited from speculation that the company was in talks with Apax over a possible $3 billion takeover deal. Arrow Energy, the largest owner of gas assets in Australia, also made a positive contribution to Fund performance after its decision to endorse a takeout bid.
On the negative side, Greece's Alpha Bank fell 43.5% over the period. Given the financial turmoil in Greece, we sold the position. Our position in Gamesa also hurt performance amid concerns about Spanish growth and a lackluster outlook for the wind sector.
International Opportunities
Fund Statistics
March 31, 2010
Ten Largest
Stock Holdings | % of Net
Assets |
Vallourec SA | 2.7% |
Informa plc | 2.7% |
FLSmidth & Co. A/S | 2.6% |
Ricoh Co. Ltd. | 2.5% |
Shiseido Co. Ltd. | 2.3% |
Adidas AG | 2.3% |
Hyflux Ltd. | 2.3% |
FirstGroup plc | 2.3% |
ASX Ltd. | 2.2% |
Accor SA | 2.1% |
Total | 24.0% |
International Opportunities
Fund Statistics
March 31, 2010
Average Annual Total Returns
(with max. load)
| Class A Shares |
One year | 49.56% |
Since inception | -8.89% |
(5/31/07) | |
| |
| Class C Shares |
One year | 54.79% |
Since inception | -7.86% |
(7/31/07) | |
International Opportunities
Fund Statistics
March 31, 2010
Average Annual Total Returns
| Class I Shares |
One year | 57.64% |
Since inception | -6.88% |
(5/31/07) | |
| Class Y Shares* |
One year | 57.50% |
Since inception | -7.21% |
(5/31/07) | |
* Calvert International Opportunities Fund first offered Class Y shares on October 31, 2008. Performance prior to that date reflects the performance of Class A shares at net asset value (NAV). Actual Class Y share performance would have been different.
The performance data shown represents past performance, does not guarantee future results, and does not reflect the deduction of taxes that a shareholder would pay on the Fund's/Portfolio's distributions or the redemption of Fund/Portfolio shares. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Visit www.calvert.com for current performance data. The gross expense ratio for Class A shares is 2.70%. This number may vary from the expense ratio shown elsewhere in this report because it is based on a different time period and, if applicable, does not include fee or expense waivers. Performance data quoted already reflects deduction of fund operating expenses.
Outlook
Going forward, we plan to continue our strategy of maintaining an overweight to cyclically exposed companies within Industrials while owning defensive growth stocks in areas such as healthcare services. The unprecedented amount of global fiscal and monetary stimulus triggered a meaningful improvement in the leading economic indicators throughout 2009, which in turn supports the argument for a synchronized global economic recovery in 2010.
Performance Comparison
Comparison of change in value of $10,000 investment.
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 Class A maximum front-end sales charge of 4.75%, or deferred sales charge, as applicable. No sales charge has been applied to the index used for comparison. However, the Lipper average does reflect the deduction of the category's average front-end sales charge. The value of an investment in Class A & I shares is plotted in the line graph. The value of an investment in another class of shares would be different.
However, global equity markets have also appreciated strongly in anticipation of the better times ahead, and, as such, many stocks are already discounting an improved outlook. Therefore, stock selection will be even more crucial throughout the next year. Overall, we are targeting companies with reasonable valuations, solid long-term growth prospects, and operating leverage that is not already being discounted by the market.
April 2010
As of March 31, 2010, the following companies represented the following percentages of Fund net assets: Banco Compartamos 2.09%, Shiseido 2.35%, Bare Escentuals 0%, Polycom 0%, Tandberg 0%,Cisco 0%, Arrow Energy 0.91%, Alpha Bank 0%, and Gamesa 0%. All holdings are subject to change without notice.
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges and redemption fees; and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
This Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (October 1, 2009 to March 31, 2010).
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), or redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning
Account Value
10/1/09 | Ending Account
Value
3/31/10 | Expenses Paid
During Period*
10/1/09 - 3/31/10 |
Class A | | | |
Actual | $1,000.00 | $1,053.50 | $8.50 |
Hypothetical | $1,000.00 | $1,016.65 | $8.35 |
(5% return per year before expenses) | | | |
Class C | | | |
Actual | $1,000.00 | $1,048.70 | $12.77 |
Hypothetical | $1,000.00 | $1,012.47 | $12.54 |
(5% return per year before expenses) | | | |
Class I | | | |
Actual | $1,000.00 | $1,055.60 | $6.15 |
Hypothetical | $1,000.00 | $1,018.95 | $6.04 |
(5% return per year before expenses) | | | |
Class Y | | | |
Actual | $1,000.00 | $1,054.50 | $7.22 |
Hypothetical | $1,000.00 | $1,017.90 | $7.09 |
(5% return per year before expenses) | | | |
*Expenses are equal to the Fund's annualized expense ratio of 1.66%, 2.50%, 1.20% and 1.41% for Class A, Class C , Class I and Class Y respectively, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period).
STATEMENT OF NET ASSETS
March 31, 2010
Equity Securities - 95.8% | Shares | Value |
Australia - 10.5% | | |
AMP Ltd. | 66,353 | $380,770 |
Arrow Energy NL* | 64,214 | 296,091 |
ASX Ltd. | 22,799 | 709,341 |
BlueScope Steel Ltd.* | 203,166 | 541,965 |
QBE Insurance Group Ltd. | 35,706 | 681,801 |
Ramsay Health Care Ltd. | 28,638 | 365,434 |
Sims Metal Management Ltd. | 21,658 | 430,036 |
| | 3,405,438 |
Brazil - 3.1% | | |
Cia de Saneamento Basico do Estado de Sao Paulo (ADR)* | 5,900 | 217,120 |
Diagnosticos da America SA | 40,400 | 353,660 |
Itau Unibanco Banco Multiplo SA (ADR) | 11,811 | 259,724 |
Tractebel Energia SA | 16,200 | 181,722 |
| | 1,012,226 |
Canada - 1.5% | | |
Shoppers Drug Mart Corp. | 11,399 | 489,787 |
Denmark - 2.6% | | |
FLSmidth & Co. A/S | 12,100 | 840,630 |
| | |
Finland - 0.9% | | |
Lassila & Tikanoja Oyj* | 14,030 | 293,362 |
| | |
France - 13.5% | | |
Accor SA | 12,438 | 689,045 |
Cap Gemini SA | 12,612 | 622,095 |
Cie Generale d'Optique Essilor International SA | 6,020 | 384,874 |
Nexans SA | 7,338 | 626,344 |
PPR SA | 3,840 | 511,933 |
Publicis Groupe | 15,432 | 661,218 |
Vallourec SA | 4,405 | 889,493 |
| | 4,385,002 |
Germany - 3.9% | | |
Adidas AG | 14,121 | 756,306 |
Rhoen Klinikum AG | 12,063 | 309,173 |
SMA Solar Technology AG | 1,602 | 196,629 |
| | 1,262,108 |
Japan - 21.2% | | |
Asahi Glass Co. Ltd. | 38,000 | 428,415 |
Benesse Corp. | 14,200 | 615,739 |
Daiwa House Industry Co. Ltd.* | 19,000 | 214,615 |
FamilyMart Co. Ltd. | 15,400 | 490,525 |
Kubota Corp. | 59,000 | 538,201 |
Nikon Corp. | 30,800 | 673,049 |
| | |
Equity Securities - Cont'd | Shares | Value |
Japan - Cont'd | | |
NTT Data Corp. | 86 | $286,820 |
Ricoh Co. Ltd. | 51,000 | 797,216 |
Sharp Corp. | 24,000 | 300,386 |
Shimano, Inc. | 14,500 | 641,943 |
Shiseido Co. Ltd. | 35,000 | 760,707 |
Sumitomo Chemical Co. Ltd.* | 84,000 | 411,006 |
USS Co. Ltd. | 4,410 | 299,823 |
Yamada Denki Co. Ltd.* | 5,600 | 413,705 |
| | 6,872,150 |
Luxembourg - 2.0% | | |
Oriflame Cosmetics SA | 10,300 | 643,370 |
| | |
Mexico - 3.3% | | |
Banco Compartamos SA de CV | 119,788 | 678,675 |
Urbi Desarrollos Urbanos SA de CV* | 165,211 | 383,353 |
| | 1,062,028 |
Netherlands - 2.5% | | |
QIAGEN NV* | 6,372 | 146,939 |
TNT NV | 22,904 | 657,655 |
| | 804,594 |
New Zealand - 0.4% | | |
Contact Energy Ltd.* | 27,622 | 125,453 |
| | |
Norway - 2.8% | | |
ProSafe SE | 56,080 | 294,408 |
Tomra Systems ASA | 128,200 | 627,923 |
| | 922,331 |
Philippines - 0.6% | | |
Manila Water Co., Inc. | 549,000 | 191,342 |
| | |
Singapore - 3.6% | | |
ComfortDelgro Corp. Ltd. | 389,000 | 433,783 |
Hyflux Ltd. | 305,000 | 741,270 |
| | 1,175,053 |
Spain - 1.3% | | |
Ebro Puleva SA | 22,362 | 412,385 |
| | |
Sweden - 1.7% | | |
Svenska Cellulosa AB, Series B | 39,728 | 561,378 |
| | |
Switzerland - 0.5% | | |
Adecco SA | 2,843 | 161,605 |
| | |
Equity Securities - Cont'd | Shares | Value |
United Kingdom - 12.8% | | |
Associated British Foods plc | 42,663 | $633,805 |
eaga plc | 215,596 | 470,044 |
FirstGroup plc | 134,640 | 733,858 |
Informa plc | 146,750 | 862,917 |
Legal & General Group plc | 274,276 | 366,657 |
Marks & Spencer Group plc | 109,659 | 616,179 |
Severn Trent plc | 25,707 | 466,404 |
| | 4,149,864 |
| | |
United States - 7.1% | | |
Calgon Carbon Corp.* | 12,491 | 213,846 |
DaVita, Inc.* | 8,400 | 532,560 |
FTI Consulting, Inc.* | 5,169 | 203,245 |
Informatica Corp.* | 23,754 | 638,032 |
Moody's Corp. | 11,204 | 333,319 |
Ormat Technologies, Inc. | 3,204 | 90,161 |
Towers Watson & Co. | 5,985 | 284,288 |
| | 2,295,451 |
| | |
Total Equity Securities (Cost $27,417,380) | | 31,065,557 |
| | |
| Principal | |
Time Deposit - 3.7% | Amount | |
State Street Corp. Time Deposit, 0.01%, 4/1/10 | $1,213,336 | 1,213,336 |
| | |
Total Time Deposit (Cost $1,213,336) | | 1,213,336 |
| | |
TOTAL INVESTMENTS (Cost $28,630,716) - 99.5% | | 32,278,893 |
Other assets and liabilities, net - 0.5% | | 154,151 |
Net Assets - 100% | | $32,433,044 |
| | |
| | |
Net Assets Consist of: | | |
Paid-in capital applicable to the following shares outstanding of common stock with 250,000,000 shares of $.01 par value shares authorized: | | |
Class A: 2,221,797 shares outstanding | | $29,052,620 |
Class C: 125,910 shares outstanding | | 1,551,669 |
Class I: 339,214 shares outstanding | | 4,794,748 |
Class Y: 23,643 shares outstanding | | 231,467 |
Undistributed net investment income (loss) | | (34,692) |
Accumulated net realized gain (loss) on investments and foreign currency transactions | | (6,810,382) |
Net unrealized appreciation (depreciation) on investments, foreign currencies and | | |
assets and liabilities denominated in foreign currencies | | 3,647,614 |
Net Assets | | $32,433,044 |
Net Asset Value Per Share | | |
Class A (based on net assets of $26,690,889) | | $12.01 |
Class C (based on net assets of $1,491,164) | | $11.84 |
Class I (based on net assets of $3,983,369) | | $11.74 |
Class Y (based on net assets of $267,622) | | $11.32 |
* Non-income producing security.
Abbreviations:
ADR: American Depositary Receipt
See notes to financial statements.
Statement of Operations
Six Months Ended March 31, 2010
Net Investment Income | | |
Investment Income: | | |
Dividend income (net of foreign taxes withheld of $9,640) | | $199,112 |
Interest income | | 78 |
Total investment income | | 199,190 |
| | |
Expenses: | | |
Investment advisory fee | | 114,707 |
Transfer agency fees and expenses | | 45,315 |
Distribution Plan expenses: | | |
Class A | | 29,609 |
Class C | | 5,502 |
Directors' fees and expenses | | 1,800 |
Administrative fees | | 46,475 |
Accounting fees | | 2,317 |
Custodian fees | | 38,790 |
Registration fees | | 22,275 |
Reports to shareholders | | 13,608 |
Professional fees | | 10,665 |
Miscellaneous | | 2,763 |
Total expenses | | 333,826 |
Reimbursement from Advisor: | | |
Class A | | (74,420) |
Class C | | (8,623) |
Class I | | (10,361) |
Class Y | | (6,431) |
Fees paid indirectly | | (109) |
Net expenses | | 233,882 |
| | |
Net Investment Income (loss) | | (34,692) |
| | |
Realized and Unrealized Gain (Loss) | | |
Net realized gain (loss) on: | | |
Investments | | 480,103 |
Foreign currency transactions | | (32,763) |
| | 447,340 |
| | |
Changes in unrealized appreciation or (depreciation) on: | | |
Investments and foreign currencies | | 1,154,897 |
Assets and liabilities denominated in foreign currencies | | 97 |
| | 1,154,994 |
| | |
Net Realized and Unrealized Gain (Loss) | | 1,602,334 |
| | |
Increase (Decrease) in Net Assets | | |
Resulting From Operations | | $1,567,642 |
See notes to financial statements.
Statements of Changes in Net Assets
Increase (Decrease) in Net Assets | | Six Months Ended
March 31,
2010 | Year Ended
September 30,
2009 |
Operations: | | | |
Net investment income (loss) | | ($34,692) | $123,348 |
Net realized gain (loss) | | 447,340 | (7,075,566) |
Change in unrealized appreciation or (depreciation) | | 1,154,994 | 8,121,142 |
| | | |
Increase (Decrease) in Net Assets | | | |
Resulting from Operations | | 1,567,642 | 1,168,924 |
| | | |
Distributions to shareholders from: | | | |
Net investment income: | | | |
Class A shares | | -- | (87,441) |
Class I shares | | (64,681) | (72,687) |
Class Y shares | | (8,845) | -- |
Net realized gain: | | | |
Class A shares | | -- | (6,794) |
Class C shares | | -- | (227) |
Class I shares | | -- | (1,532) |
Total distributions | | (73,526) | (168,681) |
| | | |
Capital share transactions: | | | |
Shares sold: | | | |
Class A shares | | 6,087,470 | 9,603,294 |
Class C shares | | 663,600 | 312,777 |
Class I shares | | 321,106 | 960,798 |
Class Y shares | | 151,578 | 107,900 |
Reinvestment of distributions: | | | |
Class A shares | | -- | 87,637 |
Class C shares | | -- | 154 |
Class I shares | | 64,681 | 74,220 |
Class Y shares | | 8,845 | -- |
Redemption fees: | | | |
Class A shares | | 32 | 1,918 |
Class C shares | | -- | 495 |
Shares redeemed: | | | |
Class A shares | | (2,012,196) | (5,951,385) |
Class C shares | | (58,402) | (143,120) |
Class I shares | | (256,538) | (912,018) |
Class Y shares | | (6,856) | (30,000) |
Total capital share transactions | | 4,963,320 | 4,112,670 |
| | | |
Total Increase (Decrease) in Net Assets | | 6,457,436 | 5,112,913 |
| | | |
Net Assets | | | |
Beginning of period | | 25,975,608 | 20,862,695 |
End of period (including distribution in excess of net | | | |
investment income of $34,692 and undistributed net | | | |
investment income of $73,526, respectively) | | $32,433,044 | $25,975,608 |
See notes to financial statements.
Capital Share Activity | Six Months Ended
March 31,
2010 | Year Ended
September 30,
2009 |
Shares sold: | | |
Class A shares | 525,546 | 1,083,297 |
Class C shares | 58,090 | 34,401 |
Class I shares | 28,266 | 108,850 |
Class Y shares | 13,711 | 12,347 |
Reinvestment of distributions: | | |
Class A shares | -- | 10,732 |
Class C shares | -- | 20 |
Class I shares | 5,709 | 9,167 |
Class Y shares | 810 | -- |
Shares redeemed: | | |
Class A shares | (173,947) | (676,505) |
Class C shares | (5,109) | (15,911) |
Class I shares | (22,712) | (95,222) |
Class Y shares | (627) | (2,598) |
Total capital share activity | 429,737 | 468,578 |
See notes to financial statements.
Notes to Financial Statements
Note A -- Significant Accounting Policies
General: The Calvert International Opportunities 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. Class A shares are sold with a maximum front-end sales charge of 4.75%. 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 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 and have lower levels of expenses than Class A shares. Effective October 31, 2008, the Fund began to offer Class Y shar es. Class Y shares are generally only available to wrap or similar fee-based programs offered by financial intermediaries that have entered into an agreement with the Fund's Distributor to offer Class Y shares. Class Y shares have no front-end or deferred sales charge and have lower levels of expenses than Class A shares. 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). The Fund uses independent pricing services approved by the Board of Directors to value its investments wherever possible. 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 Fund's net asset value is determined, that are expected to materially affect the value of those securities, then they are valued at their fair value taking these events into account. Short-term notes are stated at amortized cost, which approximates fair value. Investments for which market quotations are not available or deemed not reliable are fair valued in good faith under the direction of the Board of Directors.
The Fund has retained a third party fair value pricing service to quantitatively analyze the price movement of its holdings on foreign exchanges and to automatically fair value if the variation from the prior day's closing price exceeds specified parameters.
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, 2010, no securities were fair valued in good faith under the direction of the Board of Directors.
The Fund utilizes various methods to measure the fair value of its investments. Generally Accepted Accounting Principles (GAAP) establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used to value assets and liabilities at measurement date. These inputs are summarized in the three broad levels listed below:
Level 1 -- quoted prices in active markets for identical securities
Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy during the period. For additional information on the Fund's policy regarding valuation of investments, please refer to the Fund's most recent prospectus.
The following is a summary of the inputs used to value the Fund's net assets as of March 31, 2010:
| Valuation Inputs |
Investments in Securities | Level 1 | Level 2 | Level 3 | Total |
Equity securities* | $31,065,557 | - | - | $31,065,557 |
Other debt obligations | - | $1,213,336 | - | 1,213,336 |
TOTAL | $31,065,557 | $1,213,336 | - | $32,278,893 |
* For further breakdown of equity securities by country, please refer to the Statement of Net Assets.
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.
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 and may include proceeds from litigation. 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. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Interest income, which includes amortization of premium and accretion of discount on debt securities, is accrued as earned. Withholding taxes on foreign dividends have been provided for in accordance with the Fund's understanding of the applicable country's tax rules and rates. 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 connectio n 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.
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: The Fund charges a 2% redemption fee on redemptions, including exchanges, made within 30 days of purchase in the same Fund (within seven days for Class I shares). The redemption fee is paid to the Class of the Fund from which the redemption is made, and is accounted for as an addition to paid-in capital. The fee 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 fees may be paid indirectly by credits earned on the Fund's cash on deposit with the bank. These credits are used to reduce the Fund's expenses. Such a deposit arrangement may be 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.
Management has analyzed the Fund's tax positions taken for all open federal income tax years and has concluded that no provision for federal income tax is required in the Fund's financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service for a period of three years.
New Accounting Pronouncements: In January 2010, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2010-06 "Improving Disclosures about Fair Value Measurements". ASU 2010-06 will require reporting entities to make new disclosures about amount and reasons for significant transfers in and out of Level 1 and Level 2 fair value measurements and input and valuation techniques used to measure fair value for both recurring and nonrecurring fair value measurements that fall in either Level 2 or Level 3, and information on purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measures. The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2009 except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measures, which are effective for fiscal years beginning after December 15, 2010. At this time, management is evaluating the implications of ASU No. 2010-06 and its impact on the financial statements has not been determined.
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 UNIFI Mutual Holding Company. The Advisor provides investment advisory services and pays the salaries and fees of officers and Directors of the Fund who are employees of the Advisor or its affiliates. For its services, the Advisor receives an annual fee, payable monthly, of .80% of the average daily net assets. Under the terms of the agreement, $21,731 was payable at period end. In addition, $4,905 was payable at period end for operating expenses paid by the Advisor during March 2010.
The Advisor has contractually agreed to limit net annual fund operating expenses through January 31, 2011. The contractual expense cap is 1.66% for Class A, 2.50% for Class C, 1.20% for Class I, and 1.41% for Class Y. For the purposes of this expense limit, operating expenses do not include interest expense, brokerage commissions, taxes, and extraordinary expenses. To the extent any expense offset credits are earned, the Advisor's obligation under the contractual limitation may be reduced and the Advisor may benefit from the expense offset arrangement.
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 C, and Class Y shares and .15% for Class I shares, based on their average daily net assets. Under the terms of the agreement, $8,844 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 and Class C shares, allow the Fund to pay the Distributor for expenses and services associated with the distribution of shares. The expenses paid may not exceed .50% and 1.00% annually of the Fund's average daily net assets of Class A and Class C, respectively. The amount actually paid by the Fund is an annualized fee, payable monthly of .25% and 1.00% of the Fund's average daily net assets of Class A and Class C, respectively. Class I and Y shares do not have Distribution Plan expenses. Under the terms of the agreement, $6,803 was payable at period end.
The Distributor received $8,915 as its portion of the commissions charged on sales of the Fund's Class A shares for the six months ended March 31, 2010.
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 $6,836 for the six months ended March 31, 2010. Under the terms of the agreement, $1,292 was payable at period end. Boston Financial Data Services, Inc. is the transfer and dividend disbursing agent.
Each Director of the Fund who is not an employee of the Advisor or its affiliates receives an annual retainer of $44,000 plus a meeting fee of $2,000 for each Board meeting attended. Additional fees of up to $5,000 annually may be paid to the Board chair and committee chairs and $2,500 annually may be paid to committee members, plus a committee meeting fee of $500 for each committee meeting attended. Directors fees are allocated to each of the Funds served.
Note C -- Investment Activity
During the period, the cost of purchases and proceeds from sales of investments, other than short-term securities, were $10,626,845 and $6,580,898, respectively.
The cost of investments owned at March 31, 2010 for federal income tax purposes was $28,930,737. Net unrealized appreciation aggregated $3,348,156, of which $4,147,138 related to appreciated securities and $798,982 related to depreciated securities.
Net realized capital loss carryforwards for federal income tax purposes of $1,330,630 at September 30, 2009 may be utilized to offset future capital gains until expiration in September 2017.
The Fund intends to elect to defer net capital losses of $5,467,413 incurred from November 1, 2008 though September 30, 2009 and treat them as arising in the fiscal year ending September 30, 2010.
Note D -- Line of Credit
A financing agreement is in place with all Calvert Group Funds and State Street Corporation ("SSC"). Under the agreement, SSC provides an unsecured line of credit facility, in the aggregate amount of $50 million ($25 million committed and $25 million uncommitted), accessible by the Funds for temporary or emergency purposes only. Borrowings under the committed facility bear interest at the higher of the London Interbank Offered Rate, (LIBOR) or the overnight Federal Funds Rate plus 1.25% per annum. A commitment fee of .15% per annum is incurred on the unused portion of the committed facility, which is allocated to all participating funds. The Fund had no borrowings under the agreement during the six months ended March 31, 2010.
Note E -- Subsequent Events
In preparing the financial statements as of March 31, 2010, no subsequent events or transactions occurred that would have materially impacted the financial statements as presented.
Financial Highlights
| | Periods Ended |
| | March 31, | September 30, |
Class A Shares | | 2010 (z) | 2009 (z) |
Net asset value, beginning | | $11.40 | $11.50 |
Income from investment operations | | | |
Net investment income | | (.02) | .06 |
Net realized and unrealized gain (loss) | | .63 | (.10) |
Total from investment operations | | .61 | (.04) |
Distributions from | | | |
Net investment income | | -- | (.06) |
Net realized gain | | -- | ** |
Total from distributions | | -- | (.06) |
Total increase (decrease) in net asset value | | .61 | (.10) |
Net asset value, ending | | $12.01 | $11.40 |
| | | |
Total return* | | 5.35% | (.16%) |
Ratios to average net assets: A | | | |
Net investment income | | (.27%) (a) | .63% |
Total expenses | | 2.29% (a) | 2.70% |
Expenses before offsets | | 1.66% (a) | 1.67% |
Net expenses | | 1.66% (a) | 1.67% |
Portfolio turnover | | 24% | 98% |
Net assets, ending (in thousands) | | $26,691 | $21,328 |
| | | |
| | | |
| | Periods Ended |
| | September 30, | September 30, |
Class A Shares | | 2008 (z) | 2007# (z) |
Net asset value, beginning | | $15.32 | $15.00 |
Income from investment operations | | | |
Net investment income | | .17 | .02 |
Net realized and unrealized gain (loss) | | (3.99) | .30 |
Total from investment operations | | (3.82) | .32 |
Total increase (decrease) in net asset value | | (3.82) | .32 |
Net asset value, ending | | $11.50 | $15.32 |
| | | |
Total return* | | (24.93%) | 2.13% |
Ratios to average net assets: A | | | |
Net investment income | | 1.22% | .50% (a) |
Total expenses | | 2.81% | 7.82% (a) |
Expenses before offsets | | 1.68% | 1.74% (a) |
Net expenses | | 1.66% | 1.66% (a) |
Portfolio turnover | | 29% | 2% |
Net assets, ending (in thousands) | | $16,710 | $5,678 |
See notes to financial highlights.
Financial Highlights
| | Periods Ended |
| | March 31, | September 30, |
Class C Shares | | 2010 (z) | 2009 (z) |
Net asset value, beginning | | $11.29 | $11.39 |
Income from investment operations | | | |
Net investment income (loss) | | (.06) | (.02) |
Net realized and unrealized gain (loss) | | .61 | (.08) |
Total from investment operations | | .55 | (.10) |
Distributions from | | | |
Net realized gain | | -- | ** |
Total from distributions | | -- | ** |
Total increase (decrease) in net asset value | | .55 | (.10) |
Net asset value, ending | | $11.84 | $11.29 |
| | | |
Total return* | | 4.87% | (0.82%) |
Ratios to average net assets: A | | | |
Net investment income (loss) | | (1.03%) (a) | (.19%) |
Total expenses | | 4.07% (a) | 5.38% |
Expenses before offsets | | 2.50% (a) | 2.51% |
Net expenses | | 2.50% (a) | 2.51% |
Portfolio turnover | | 24% | 98% |
Net assets, ending (in thousands) | | $1,491 | $823 |
| | | |
| | | |
| | Periods Ended |
| | September 30, | September 30, |
Class C Shares | | 2008 (z) | 2007 ##(z) |
Net asset value, beginning | | $15.30 | $14.74 |
Income from investment operations | | | |
Net investment income (loss) | | .09 | .01 |
Net realized and unrealized gain (loss) | | (4.00) | .55 |
Total from investment operations | | (3.91) | .56 |
Total increase (decrease) in net asset value | | (3.91) | .56 |
Net asset value, ending | | $11.39 | $15.30 |
| | | |
Total return* | | (25.56%) | 3.80% |
Ratios to average net assets: A | | | |
Net investment income (loss) | | | .67% |
1.14% (a) | | | |
Total expenses | | 7.55% | 66.65% (a) |
Expenses before offsets | | 2.52% | 2.58% (a) |
Net expenses | | 2.50% | 2.50% (a) |
Portfolio turnover | | 29% | 1% |
Net assets, ending (in thousands) | | $620 | $140 |
See notes to financial highlights.
Financial Highlights
| | Periods Ended |
| | March 31, | September 30, |
Class I Shares | | 2010 (z) | 2009 (z) |
Net asset value, beginning | | $11.32 | $11.58 |
Income from investment operations | | | |
Net investment income | | .01 | .09 |
Net realized and unrealized gain (loss) | | .61 | (.14) |
Total from investment operations | | .62 | (.05) |
Distributions from | | | |
Net investment income | | (.20) | (.21) |
Net realized gain | | -- | ** |
Total from distributions | | (.20) | (.21) |
Total increase (decrease) in net asset value | | .42 | (.26) |
Net asset value, ending | | $11.74 | $11.32 |
| | | |
Total return* | | 5.56% | .26% |
Ratios to average net assets: A | | | |
Net investment income | | .16% (a) | 1.03% |
Total expenses | | 1.76% (a) | 2.11% |
Expenses before offsets | | 1.20% (a) | 1.21% |
Net expenses | | 1.20% (a) | 1.21% |
Portfolio turnover | | 24% | 98% |
Net assets, ending (in thousands) | | $3,983 | $3,712 |
| | | |
| | | |
| | Periods Ended |
| | September 30, | September 30, |
Class I Shares | | 2008 (z) | 2007 #(z) |
Net asset value, beginning | | $15.35 | $15.00 |
Income from investment operations | | | |
Net investment income | | .25 | .04 |
Net realized and unrealized gain (loss) | | (4.02) | .31 |
Total from investment operations | | (3.77) | .35 |
Total increase (decrease) in net asset value | | (3.77) | .35 |
Net asset value, ending | | $11.58 | $15.35 |
| | | |
Total return* | | (24.56%) | 2.33% |
Ratios to average net assets: A | | | |
Net investment income | | 1.72% | .78% (a) |
Total expenses | | 2.26% | 7.47% (a) |
Expenses before offsets | | 1.22% | 1.28% (a) |
Net expenses | | 1.20% | 1.20% (a) |
Portfolio turnover | | 29% | 2% |
Net assets, ending (in thousands) | | $3,533 | $3,075 |
See notes to financial highlights.
Financial Highlights
| | Periods Ended |
| | March 31, | September 30, |
Class Y Shares | | 2010 (z) | 2009###(z) |
Net asset value, beginning | | $11.50 | $8.67 |
Income from investment operations | | | |
Net investment income | | .01 | .13 |
Net realized and unrealized gain (loss) | | .59 | 2.70 |
Total from investment operations | | .60 | 2.83 |
Distributions from | | | |
Net investment income | | (.78) | -- |
Net realized gain | | -- | ** |
Total from distributions | | (.78) | ** |
Total increase (decrease) in net asset value | | (.18) | 2.83 |
Net asset value, ending | | $11.32 | $11.50 |
| | | |
Total return* | | 5.45% | 32.71% |
Ratios to average net assets: A | | | |
Net investment income | | .14% (a) | 1.56% (a) |
Total expenses | | 8.58% (a) | 21.67% (a) |
Expenses before offsets | | 1.41% (a) | 1.42% (a) |
Net expenses | | 1.41% (a) | 1.41% (a) |
Portfolio turnover | | 24% | 90% |
Net assets, ending (in thousands) | | $268 | $112 |
A Total expenses do not reflect amounts reimbursed and/or waived by the Advisor or reductions from expense offset arrangements. Expenses before offsets reflect expenses after reimbursement and/or waiver by the Advisor but prior to reductions from expense offset arrangements. Net expenses are net of all reductions and represent the net expenses paid by the Fund.
# From May 31, 2007 inception.
## From July 31, 2007 inception.
### From October 31, 2008 inception.
* Total return is not annualized for periods less than one year and does not reflect deduction of any front-end or deferred sales charge.
** Less than $0.01 per share.
(a) Annualized.
(z) Per share figures are calculated using the Average Shares Method.
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, expre ssed 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
The Proxy Voting Guidelines of the Calvert Funds that the Fund uses to determine how to vote proxies relating to portfolio securities are 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.
Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund's website at www.calvert.com and on the SEC's website at www.sec.gov.
Availability of Quarterly Portfolio Holdings
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund's Form N-Q is available on the SEC's website at www.sec.gov. The Fund's Form N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Basis for Board's Approval of Investment Advisory Contracts
At a meeting held on December 8, 2009, the Board of Directors, and by a separate vote, the disinterested Directors, approved the continuance of the Investment Advisory Agreement between Calvert World Values Fund, Inc. and the Advisor and the Investment Subadvisory Agreement between the Advisor and the Subadvisor with respect to the Fund.
In evaluating the Investment Advisory Agreement, the Board considered a variety of information relating to the Fund and the Advisor. The disinterested Directors reviewed a report prepared by the Advisor regarding various services provided to the Fund by the Advisor and its affiliates. Such report included, among other data, information regarding the Advisor's personnel and the Advisor's revenue and cost of providing services to the Fund, and a separate report prepared by an independent third party, which provided a statistical analysis comparing the Fund's investment performance, expenses, and fees to comparable mutual funds.
The disinterested Directors were separately represented by independent legal counsel with respect to their consideration of the reapproval of the Investment Advisory Agreement and Investment Subadvisory Agreement. Prior to voting, the disinterested Directors reviewed the proposed continuance of the Investment Advisory Agreement and Investment Subadvisory Agreement with management and also met in private sessions with their counsel at which no representatives of management were present.
In the course of its deliberations regarding the Investment Advisory Agreement, the Board considered the following factors, among others: the nature, extent and quality of the services provided by the Advisor, including the personnel providing such services; the Advisor's financial condition; the level and method of computing the Fund's advisory fee; comparative performance, fee and expense information for the Fund; the profitability of the Calvert Group of Funds to the Advisor and its affiliates; the allocation of the Fund's brokerage, including the Advisor's process for monitoring "best execution"; the direct and indirect benefits, if any, derived by the Advisor and its affiliates from their relationship with the Fund; the effect of the Fund's growth and size on the Fund's performance and expenses; the affiliated distributor's process for monitoring sales load breakpoints; the Advisor's compliance programs and policies; the Advisor's performance of substantially similar duties for other funds; and any p ossible conflicts of interest.
In considering the nature, extent and quality of the services provided by the Advisor under the Investment Advisory Agreement, the Board reviewed information provided by the Advisor relating to its operations and personnel, including, among other information, biographical information on the Advisor's supervisory and professional staff and descriptions of its organizational and management structure. The Board also took into account similar information provided periodically throughout the previous year by the Advisor as well as the Board's familiarity with the Advisor's senior management through Board of Directors' meetings, discussions and other reports. The Advisor's administrative capabilities, including its ability to supervise the other service providers for the Fund, were also considered. The Board also took into account the environmental, social and governance research and analysis provided by the Advisor to the Fund. The Board discussed the Advisor's effectiveness in monitoring the performance of th e Subadvisor and its timeliness in responding to performance issues. The Board concluded that it was satisfied with the nature, extent and quality of services provided to the Fund by the Advisor under the Investment Advisory Agreement.
In considering the Fund's performance, the Board noted that it reviewed on a quarterly basis detailed information about the Fund's performance results, portfolio composition and investment strategies. In addition, the Board took into account overall financial market conditions. The Board also reviewed various comparative data provided to it in connection with its consideration of the renewal of the Investment Advisory Agreement, including, among other information, a comparison of the Fund's total return with its Lipper index and with that of other mutual funds deemed to be in its peer group by an independent third party in its report. This comparison indicates that the Fund's performance was above the median of its peer group for the one-year period ended June 30, 2009. The data also indicated that the Fund underperformed its Lipper index for the same one-year period. Based upon its review, the Board concluded that the Fund's performance was satisfactory.
In considering the Fund's fees and expenses, the Board compared the Fund's fees and total expense ratio with various comparative data for the funds in its peer group. Among other findings, the data indicated that the Fund's advisory fee (after taking into account waivers and/or reimbursements) was below the median of its peer group and that total expenses (net of waivers and/or reimbursements) were below the median of its peer group. The Board noted that the allocation of advisory and administrative fees may vary among the Fund's peer group. In addition, the Board took into account the fees the Advisor charged to its other clients and considered these fee comparisons in light of the differences in managing these other accounts. The Board also took into account that the Advisor was currently reimbursing fund expenses. The Board also noted management's discussion of the Fund's expenses and certain factors that affected the level of such expenses, including the cost of providing the environmental, social and governance research and analysis provided by the Advisor. Based upon its review, the Board concluded that the advisory fee was reasonable in view of the quality of services provided by the Advisor and the other factors considered.
The Board reviewed the Advisor's profitability on a fund-by-fund basis. In reviewing the overall profitability of the advisory fee to the Fund's Advisor, the Board also considered the fact that affiliates of the Advisor provided shareholder servicing and administrative services to the Fund for which they received compensation. The information considered by the Board included Calvert's operating profit margin information both before and after tax expenses with respect to the services that the Advisor and its affiliates provided to the Calvert Group of Funds complex. The Board reviewed the profitability of the Advisor's relationship with the Fund in terms of the total amount of annual advisory fees it received with respect to the Fund and whether the Advisor had the financial wherewithal to continue to provide a high level of services to the Fund. The Board noted that the Advisor had reimbursed expenses of the Fund. The Board also noted the Advisor's current undertaking to maintain expense limitations for t he Fund. The Board also considered that the Advisor derived benefits to its reputation and other indirect benefits from its relationship with the Fund. The Board also noted that the Advisor paid the subadvisory fee to the Subadvisor. Based upon its review, the Board concluded that the Advisor's and its affiliates' level of profitability from their relationship with the Fund was reasonable.
The Board considered the effect of the Fund's current size and potential growth on its performance and fees. The Board concluded that adding breakpoints to the advisory fee at specified asset levels would not be appropriate at this time given the Fund's current size. The Board noted that if the Fund's assets increased over time, the Fund might realize other economies of scale if assets increased proportionally more than certain other expenses.
In reapproving the Investment Advisory Agreement, the Board, including the disinterested Directors, did not identify any single factor as controlling, and each Director may have attributed different weight to various factors.
In evaluating the Investment Subadvisory Agreement, the disinterested Directors reviewed information provided by the Subadvisor relating to its operations, personnel, investment philosophy, strategies and techniques. Among other information, the Subadvisor provided biographical information on portfolio management and other professional staff, performance information for itself, and descriptions of its investment philosophies, strategies and techniques, organizational and management structures and brokerage policies and practices.
The Board reapproved the Investment Subadvisory Agreement between the Advisor and the Subadvisor based on a number of factors relating to the Subadvisor's ability to perform under the Investment Subadvisory Agreement. In the course of its deliberations, the Board evaluated, among other factors: the nature, extent and the quality of the services to be provided by the Subadvisor; the Subadvisor's management style and long-term performance record; the Fund's performance record and the Subadvisor's performance in employing its investment strategies; the Subadvisor's current level of staffing and its overall resources; the qualifications and experience of the Subadvisor's personnel; the Subadvisor's financial condition with respect to its ability to perform the services required under the Investment Subadvisory Agreement; the Subadvisor's compliance systems, including those related to personal investing; and any disciplinary history. Based upon its review, the Board concluded that it was satisfied with the nat ure, extent and quality of services provided to the Fund by the Subadvisor under the Investment Subadvisory Agreement.
As noted above, the Board considered, among other information, the Fund's performance during the one-year period ended June 30, 2009 as compared to the Fund's peer group and noted that it reviewed on a quarterly basis detailed information about the Fund's performance results, portfolio composition and investment strategies. The Board noted the Advisor's expertise and resources in monitoring the performance, investment style and risk-adjusted performance of the Subadvisor.
In considering the cost of services to be provided by the Subadvisor and the profitability to the Subadvisor of its relationship with the Fund, the Board noted that the subadvisory fee under the Investment Subadvisory Agreement was paid by the Advisor out of the advisory fee that the Advisor received under the Investment Advisory Agreement. The Board also relied on the ability of the Advisor to negotiate the Investment Subadvisory Agreement and the corresponding subadvisory fee at arm's length. In addition, the Board considered comparative fee information. Based upon its review, the Board determined that the subadvisory fee was reasonable. Because the Advisor pays the Subadvisor's subadvisory fee and the subadvisory fee was negotiated at arm's length by the Advisor, the cost of services to be provided by the Subadvisor and the profitability to the Subadvisor of its relationship with the Fund were not material factors in the Board's deliberations. For similar reasons, the Board did not consider the potenti al economies of scale in the Subadvisor's management of the Fund to be a material factor in its consideration, although the Board noted that the subadvisory fee schedule for the Fund contained breakpoints that reduced the subadvisory fee rate on assets above specified levels.
In reapproving the Investment Subadvisory Agreement, the Board, including the disinterested Directors, did not identify any single factor as controlling, and each Director may have attributed different weights to various factors.
Conclusions
The Board reached the following conclusions regarding the Investment Advisory Agreement and the Investment Subadvisory Agreement, among others: (a) the Advisor has demonstrated that it possessed the capability and resources to perform the duties required of it under the Investment Advisory Agreement; (b) the Subadvisor is qualified to manage the Fund's assets in accordance with the Fund's investment objectives and policies; (c) the Advisor and Subadvisor maintain appropriate compliance programs; (d) the Subadvisor is likely to execute its investment strategies consistently over time; (e) the performance of the Fund is satisfactory relative to the performance of funds with similar investment objectives and to relevant indices; and (f) the Fund's advisory and subadvisory fees are reasonable relative to those of similar funds and to the services to be provided by the Advisor and the Subadvisor. Based on its conclusions, the Board determined that reapproval of the Investment Advisory Agreement and the Inv estment Subadvisory Agreement would be in the best interests of the Fund and its shareholders.
To Open an Account
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(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
www.calvert.com
Principal Underwriter
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814
Calvert International Opportunities Fund
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.
Note: The information on our website is not incorporated by reference into this report; our website address is included as an inactive textual reference only.
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
Municipal Funds
Calvert Tax-Free Bond Fund
Taxable Bond Funds
CSIF Bond Portfolio
Income Fund
Short Duration Income Fund
Long-Term Income Fund
Ultra-Short Income Fund
Government Fund
Short-Term Government Fund
High Yield Bond Fund
Equity Funds
CSIF Enhanced Equity Portfolio
CSIF Equity Portfolio
Calvert Large Cap Growth Fund
Calvert Large Cap Value Fund
Calvert Social Index Fund
Capital Accumulation Fund
CWV International Equity Fund
New Vision Small Cap Fund
Small Cap Value Fund
Mid Cap Value Fund
Global Alternative Energy Fund
Global Water Fund
International Opportunities Fund
Balanced and Asset
Allocation Funds
CSIF Balanced Portfolio
Calvert Conservative Allocation Fund
Calvert Moderate Allocation Fund
Calvert Aggressive Allocation Fund
<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.
(a) This Schedule is included as part of the report to shareholders filed under Item 1 of this Form.
(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
No material changes to the procedures by which shareholders may recommend nominees to the registrant's Board of Directors since registrant last provided disclosure in response to this Item.
Item 11. 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 second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
Item 12. Exhibits.
(a)(1) Not applicable.
(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 J. Krumsiek
Barbara J. Krumsiek
President -- Principal Executive Officer |
Date: | June 1, 2010 |
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 J. Krumsiek
Barbara J. Krumsiek
President -- Principal Executive Officer
Date: June 1, 2010
/s/ Ronald M. Wolfsheimer
Ronald M. Wolfsheimer
Treasurer -- Principal Financial Officer
Date: June 1, 2010
