UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File number: 811-06563
CALVERT WORLD VALUES FUND, INC.
(Exact Name of Registrant as Specified in Charter)
1825 Connecticut Avenue NW, Suite 400, Washington, DC 20009
(Address of Principal Executive Offices)
Maureen A. Gemma
Two International Place, Boston, Massachusetts 02110
(Name and Address of Agent for Service)
(202) 238-2200
(Registrant's telephone number)
September 30
Date of Fiscal Year End
September 30, 2019
Date of Reporting Period
____________________________________________________________________________________
Item 1. Report to Stockholders.
Calvert International Equity Fund
Calvert Mid-Cap Fund
Calvert International Opportunities Fund
Calvert Emerging Markets Equity Fund
Calvert International Equity Fund |
Important Note. Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semi-annual shareholder reports will no longer be sent by mail unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (calvert.com/prospectus), and you will be notified by mail each time a report is posted and provided with a website address to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you are a direct investor, you may elect to receive shareholder reports and other communications from the Fund electronically by signing up for e-Delivery at calvert.com. If you own your shares through a financial intermediary (such as a broker-dealer or bank), you must contact your financial intermediary to sign up.
You may elect to receive all future Fund shareholder reports in paper free of charge. If you are a direct investor, you can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by calling 1-800-368-2745. If you own these shares through a financial intermediary, you must contact your financial intermediary or follow instructions included with this disclosure, if applicable, to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all Calvert funds held directly or to all funds held through your financial intermediary, as applicable.
Annual Report September 30, 2019 E-Delivery Sign-Up — Details Inside | ![]() |
Commodity Futures Trading Commission Registration. Effective December 31, 2012, the Commodity Futures Trading Commission (“CFTC”) adopted certain regulatory changes that subject registered investment companies and advisers to regulation by the CFTC if a fund invests more than a prescribed level of its assets in certain CFTC-regulated instruments (including futures, certain options and swap agreements) or markets itself as providing investment exposure to such instruments. The Fund and its adviser have claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act. Accordingly, neither the Fund nor the adviser is subject to CFTC regulation. Fund shares are not insured by the FDIC and are not deposits or other obligations of, or guaranteed by, any depository institution. Shares are subject to investment risks, including possible loss of principal invested. This report must be preceded or accompanied by a current summary prospectus or prospectus. Before investing, investors should consider carefully the investment objective, risks, and charges and expenses of a mutual fund. This and other important information is contained in the summary prospectus and prospectus, which can be obtained from a financial intermediary. Prospective investors should read the prospectus carefully before investing. For further information, please call 1-800-368-2745. |
Choose Planet-friendly E-delivery! Sign up now for on-line statements, prospectuses, and fund reports. In less than five minutes you can help reduce paper mail and lower fund costs. Just go to www.calvert.com. If you already have an online account with the Calvert funds, click on Login to access your Account and select the documents you would like to receive via e-mail. If you’re new to online account access, click on Login, then Register to create your user name and password. Once you’re in, click on the E-delivery sign-up on the Account Portfolio page and follow the quick, easy steps. Note: If your shares are not held directly with the Calvert funds but through a brokerage firm, you must contact your broker for electronic delivery options available through their firm. |
TABLE OF CONTENTS | ||||
Management’s Discussion of Fund Performance | ||||
Performance | ||||
Fund Profile | ||||
Endnotes and Additional Disclosures | ||||
Fund Expenses | ||||
Financial Statements | ||||
Report of Independent Registered Public Accounting Firm | ||||
Federal Tax Information | ||||
Management and Organization | ||||
Important Notices |
MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE1
Economic and Market Conditions
In the midst of a yearlong U.S.-China trade war and slowing economic growth worldwide, global stocks delivered mixed returns during the 12-month period ended September 30, 2019.
U.S. stocks opened the period on the downside as investors worried that President Trump’s imposition of broad import tariffs might provoke a wider trade dispute with China, the world’s second-largest economy behind the U.S.
With U.S. economic data largely positive in calendar year 2018, the U.S. Federal Reserve Board (the Fed) raised its benchmark federal funds rate four times ─ from a low range of 1.50%-1.75% to 2.25%-2.50% ─ with the last quarter-point increase on December 19, 2018.
U.S. stocks turned higher in early 2019 as trade fears eased and interest rates remained stable after the Fed signaled a slower pace for future rate hikes. However, around the same time, U.S. economic indicators began sending mixed signals. While the U.S. job market was robust during the period with the unemployment rate dipping below 4%, retail sales fell, raising concerns about consumer spending. Factory output also declined, dragged down by a large drop in auto production.
The U.S. equity market fluctuated through the spring of 2019. Heightened trade-conflict rhetoric drove stocks lower in May before easing tensions helped equities recover in June. Key economic indicators continued to be mixed, with job creation decelerating sharply in May.
After holding interest rates steady through the first half of 2019, the Fed cut its benchmark interest rate to 2.00%-2.25% on July 31 ─ its first reduction in over a decade ─ followed by a second interest-rate drop to 1.75%-2.00% on September 18. Lower rates are intended to help stimulate economic activity by making borrowing costs relatively more affordable.
After sliding in August, U.S. equities rebounded in early September before pulling back in the final weeks of the period. Like U.S. stocks, global equity markets were volatile during the period. In addition to concerns about U.S.-China trade tensions, investors confronted widespread evidence of a global economic slowdown from Germany to China to India. In Europe, markets faced the added uncertainties of Brexit. The United Kingdom is expected to exit the European Union this fall despite the political turmoil the pending move has already created inside and outside its borders.
During the 12-month period ended September 30, 2019, the MSCI World Index,2 a proxy for global equities, returned 1.83%. In the U.S., the blue-chip Dow Jones Industrial Average® gained 4.21%, while the broader U.S. equity market represented by the S&P 500® Index rose 4.25%. The MSCI EAFE Index of developed-market international equities fell -1.34%, and the MSCI Emerging Markets Index fell -2.02% during the period.
Fund Performance
For the 12-month period ended September 30, 2019, Calvert International Equity Fund (the Fund) returned 4.93% for Class A shares at net asset value (NAV), outperforming its benchmark, the MSCI EAFE Index (the Index), which returned -1.34%.
Stock selection was the major contributor to outperforming the Index during the period. Although the Fund uses a bottom-up stock selection strategy that focuses on the strengths of each prospective investment rather than making strategic sector allocations, the Fund’s sector positioning also contributed positively to performance relative to the Index. In this regard, the Fund’s underweight position in the energy sector ─ the worst-performing sector during the period because of low oil prices ─ was notably beneficial during the period.
Iberdrola SA, a Spanish utility, was among the largest individual contributors as the utility sector outperformed the Index against the economic backdrop of weakening global growth. The stock also benefited from the company’s emphasis on energy generation from renewable sources, which the market has increasingly embraced.
London Stock Exchange Group plc (the Exchange) was also a notable contributor. The Exchange’s acquisition of Refinitiv, an international data provider, was expected to strongly increase earnings. The Exchange’s stock price rose on the heels of a takeover bid from Hong Kong Exchanges and Clearing Ltd.
CAE, Inc. (CAE), the largest provider of training programs for commercial pilots, was also among the largest contributors during the period. The company’s strength stemmed from a global shortage of pilots, which has significantly increased the need for training services. Growing demand for air travel also supported stock returns during the period. In addition, CAE’s acquisition of Bombardier’s Business Aircraft Training unit raised earnings projections.
Several of the largest detractors were in the financials sector as declining interest rates during the period weakened the appeal of bank stocks and capital markets to investors.
Swedbank AB, which faced allegations of money laundering, was the largest individual detractor in the Fund. As a result of ongoing investigations, the bank’s senior management was replaced. The stock was sold during the period.
Oceaneering International, Inc., a provider of mini-submarines for the maintenance and repair of oil rigs, was the second-largest individual detractor during the period. Relatively low oil prices slowed capital expenditures throughout the energy sector during the period. The stock was sold during the period.
Prudential plc (Prudential), an insurance company based in the United Kingdom, was also a large detractor as uncertainties over Brexit weakened U.K. financial institutions during the period. Additional concerns over Prudential’s plans to split into two businesses ─ one focused on Europe and the other on the U.S. and Asian markets ─ further weighed on the company’s stock price during the period.
See Endnotes and Additional Disclosures in this report. Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or offering price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, the Fund’s current performance may be lower or higher than quoted. Returns are before taxes unless otherwise noted. For performance as of the most recent month-end, please refer to www.calvert.com. |
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PERFORMANCE
Performance2,3 | ||||||||||||||
Portfolio Managers Christopher M. Dyer, CFA and Ian Kirwan, each of Eaton Vance Advisers International Ltd. | ||||||||||||||
% Average Annual Total Returns | Class Inception Date | Performance Inception Date | One Year | Five Years | Ten Years | |||||||||
Class A at NAV | 07/02/1992 | 07/02/1992 | 4.93 | % | 3.35 | % | 3.85 | % | ||||||
Class A with 4.75% Maximum Sales Charge | — | — | -0.03 | 2.36 | 3.35 | |||||||||
Class C at NAV | 03/01/1994 | 07/02/1992 | 4.15 | 2.55 | 2.99 | |||||||||
Class C with 1% Maximum Sales Charge | — | — | 3.15 | 2.55 | 2.99 | |||||||||
Class I at NAV | 02/26/1999 | 07/02/1992 | 5.25 | 3.77 | 4.43 | |||||||||
Class R6 at NAV | 03/07/2019 | 07/02/1992 | 5.30 | 3.78 | 4.44 | |||||||||
MSCI EAFE Index | — | — | -1.34 | % | 3.27 | % | 4.90 | % | ||||||
% Total Annual Operating Expense Ratios4 | Class A | Class C | Class I | Class R6 | ||||||||||
Gross | 1.48 | % | 2.23 | % | 1.23 | % | 1.19 | % | ||||||
Net | 1.15 | 1.90 | 0.90 | 0.86 |
Growth of $10,000 |
This graph shows the change in value of a hypothetical investment of $10,000 in Class A of the Fund for the period indicated. For comparison, the same investment is shown in the indicated index. |
![chart-9f8223c279c050f5bab.jpg](https://capedge.com/proxy/N-CSR/0001628280-19-014532/chart-9f8223c279c050f5bab.jpg)
Growth of Investment3 | Amount Invested | Period Beginning | At NAV | With Maximum Sales Charge | ||||
Class C | $10,000 | 09/30/2009 | $13,341 | N.A. | ||||
Class I | $250,000 | 09/30/2009 | $385,885 | N.A. | ||||
Class R6 | $1,000,000 | 09/30/2009 | $1,544,333 | N.A. |
See Endnotes and Additional Disclosures in this report.
Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or offering price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, the Fund’s current performance may be lower or higher than quoted. Returns are before taxes unless otherwise noted. For performance as of the most recent month-end, please refer to www.calvert.com.
www.calvert.com CALVERT INTERNATIONAL EQUITY FUND ANNUAL REPORT (Unaudited) 3
FUND PROFILE
SECTOR ALLOCATION (% of total investments)5 | TEN LARGEST HOLDINGS (% of net assets)6 | ||||||
Industrials | 23.0 | % | Nestle SA | 4.0 | % | ||
Health Care | 15.8 | % | Kao Corp. | 3.0 | % | ||
Financials | 13.2 | % | Sanofi | 2.8 | % | ||
Consumer Staples | 13.0 | % | Novo Nordisk A/S, Class B | 2.7 | % | ||
Consumer Discretionary | 12.8 | % | Unilever plc | 2.7 | % | ||
Information Technology | 11.1 | % | Amadeus IT Group SA, Class A | 2.6 | % | ||
Materials | 4.3 | % | Melrose Industries plc | 2.6 | % | ||
Communication Services | 2.1 | % | Yamaha Corp. | 2.5 | % | ||
Utilities | 2.1 | % | Pan Pacific International Holdings Corp. | 2.5 | % | ||
High Social Impact Investments | 2.0 | % | DBS Group Holdings Ltd. | 2.5 | % | ||
Venture Capital Limited Partnership Interest | 0.5 | % | Total | 27.9 | % | ||
Venture Capital | 0.1 | % | |||||
Total | 100.0 | % |
See Endnotes and Additional Disclosures in this report.
4 www.calvert.com CALVERT INTERNATIONAL EQUITY FUND ANNUAL REPORT (Unaudited)
Endnotes and Additional Disclosures |
1 | The views expressed in this report are those of the portfolio manager(s) and are current only through the date stated on the cover. These views are subject to change at any time based upon market or other conditions, and Calvert and the Fund(s) disclaim any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions are based on many factors, may not be relied upon as an indication of trading intent on behalf of any Calvert fund. This commentary may contain statements that are not historical facts, referred to as “forward looking statements.” The Fund’s actual future results may differ significantly from those stated in any forward looking statement, depending on factors such as changes in securities or financial markets or general economic conditions, the volume of sales and purchases of Fund shares, the continuation of investment advisory, administrative and service contracts, and other risks discussed from time to time in the Fund’s filings with the Securities and Exchange Commission. |
2 | MSCI World Index is an unmanaged index of equity securities in the developed markets. MSCI EAFE Index is an unmanaged index of equities in the developed markets, excluding the U.S. and Canada. MSCI Emerging Markets Index is an unmanaged index of emerging markets common stocks. MSCI indexes are net of foreign withholding taxes. Source: MSCI. MSCI data may not be reproduced or used for any other purpose. MSCI provides no warranties, has not prepared or approved this report, and has no liability hereunder. Dow Jones Industrial Average® is a price-weighted average of 30 blue-chip stocks that are generally the leaders in their industry. S&P 500® Index is an unmanaged index of large-cap stocks commonly used as a measure of U.S. stock market performance. S&P Dow Jones Indices are a product of S&P Dow Jones Indices LLC (“S&P DJI”) and have been licensed for use. S&P® and S&P 500® are registered trademarks of S&P DJI; Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); S&P DJI, Dow Jones and their respective affiliates do not sponsor, endorse, sell or promote the Fund, will not have any liability with respect thereto and do not have any liability for any errors, omissions, or interruptions of the S&P Dow Jones Indices. Unless otherwise stated, index returns do not reflect the effect of any applicable sales charges, commissions, expenses, taxes or leverage, as applicable. It is not possible to invest directly in an index. |
3 | Total Returns at NAV do not include applicable sales charges. If sales charges were deducted, the returns would be lower. Total Returns shown with maximum sales charge reflect the stated maximum sales charge. Unless otherwise stated, performance does not reflect the deduction of taxes on Fund distributions or redemptions of Fund shares. |
Performance prior to the inception date of a class may be linked to the performance of an older class of the Fund. This linked performance is adjusted for any applicable sales charge, but is not adjusted for class expense differences. If adjusted for such differences, the performance would be different. The performance of Class R6 is linked to Class I. Performance since inception for an index, if presented, is the performance since the Fund’s or oldest share class’ inception, as applicable. Performance presented in the Financial Highlights included in the financial statements is not linked.
Calvert Research and Management became the investment adviser to the Fund on December 31, 2016. Performance reflected prior to such date is that of the Fund’s former investment adviser.
4 Source: Fund prospectus. Net expense ratios reflect a contractual expense reimbursement that continues through 1/31/21. Without the reimbursement, performance would have been lower. The expense ratios for the current reporting period can be found in the Financial Highlights section of this report.
5 Does not include Short Term Investment of Cash Collateral for Securities Loaned.
6 Excludes cash and cash equivalents.
Fund profile subject to change due to active management.
www.calvert.com CALVERT INTERNATIONAL EQUITY FUND ANNUAL REPORT (Unaudited) 5
FUND EXPENSES
Example
As a Fund shareholder, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases and redemption fees (if applicable); and (2) ongoing costs, including management fees; distribution and/or service fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of Fund investing and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (April 1, 2019 to September 30, 2019).
Actual Expenses
The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, 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 section 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 section of the table below provides information about hypothetical account values and hypothetical expenses based on the actual Fund expense ratio and an assumed rate of return of 5% per year (before expenses), which is not the actual Fund 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 this 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 (if applicable). Therefore, the second section 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 be higher.
BEGINNING ACCOUNT VALUE (4/1/19) | ENDING ACCOUNT VALUE (9/30/19) | EXPENSES PAID DURING PERIOD* (4/1/19 - 9/30/19) | ANNUALIZED EXPENSE RATIO | |
Actual | ||||
Class A | $1,000.00 | $1,057.00 | $6.45** | 1.25% |
Class C | $1,000.00 | $1,052.90 | $10.29** | 2.00% |
Class I | $1,000.00 | $1,058.30 | $5.16** | 1.00% |
Class R6 | $1,000.00 | $1,058.80 | $4.95** | 0.96% |
Hypothetical | ||||
(5% return per year before expenses) | ||||
Class A | $1,000.00 | $1,018.80 | $6.33** | 1.25% |
Class C | $1,000.00 | $1,015.04 | $10.10** | 2.00% |
Class I | $1,000.00 | $1,020.06 | $5.06** | 1.00% |
Class R6 | $1,000.00 | $1,020.25 | $4.86** | 0.96% |
* Expenses are equal to the Fund’s annualized expense ratio for the indicated Class, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period). The Example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on March 31, 2019. | ||||
** Absent a waiver and/or reimbursement of expenses by affiliates, expenses would be higher. |
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CALVERT INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2019
SHARES | VALUE ($) | |
COMMON STOCKS - 97.1% | ||
Australia - 2.2% | ||
CSL Ltd. | 34,090 | 5,390,035 |
Canada - 2.0% | ||
CAE, Inc. | 194,907 | 4,951,934 |
Denmark - 5.9% | ||
Chr Hansen Holding A/S | 53,761 | 4,554,296 |
Coloplast A/S, Class B | 28,458 | 3,423,949 |
Novo Nordisk A/S, Class B | 130,870 | 6,762,858 |
14,741,103 | ||
France - 5.1% | ||
Legrand SA | 79,930 | 5,701,959 |
Sanofi | 76,809 | 7,115,028 |
12,816,987 | ||
Germany - 2.1% | ||
adidas AG | 16,868 | 5,250,495 |
Hong Kong - 2.4% | ||
AIA Group Ltd. | 641,102 | 6,046,259 |
India - 1.9% | ||
HDFC Bank Ltd. | 280,046 | 4,853,257 |
Ireland - 3.8% | ||
DCC plc | 66,741 | 5,820,769 |
Kerry Group plc, Class A | 31,581 | 3,691,382 |
9,512,151 | ||
Japan - 20.4% | ||
Disco Corp. | 17,300 | 3,307,184 |
Japan Lifeline Co. Ltd. (1) | 77,500 | 1,250,755 |
Kao Corp. | 100,641 | 7,465,235 |
Makita Corp. (1) | 110,600 | 3,509,725 |
ORIX Corp. (1) | 395,200 | 5,911,793 |
Pan Pacific International Holdings Corp. | 374,000 | 6,261,653 |
Recruit Holdings Co. Ltd. | 183,100 | 5,594,345 |
Santen Pharmaceutical Co. Ltd. | 210,992 | 3,687,213 |
Seven & I Holdings Co. Ltd. | 115,617 | 4,431,054 |
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SHARES | VALUE ($) | ||
COMMON STOCKS - CONT’D | |||
SMC Corp. | 8,144 | 3,500,520 | |
Yamaha Corp. | 139,600 | 6,293,874 | |
51,213,351 | |||
Netherlands - 2.3% | |||
ASML Holding NV | 23,205 | 5,755,152 | |
New Zealand - 1.5% | |||
Fisher & Paykel Healthcare Corp. Ltd. | 342,715 | 3,718,483 | |
Singapore - 2.5% | |||
DBS Group Holdings Ltd. | 343,928 | 6,222,039 | |
South Africa - 1.7% | |||
Naspers Ltd., Class N | 28,112 | 4,256,415 | |
Spain - 6.8% | |||
Amadeus IT Group SA, Class A | 91,254 | 6,538,494 | |
Iberdrola SA | 506,293 | 5,262,291 | |
Industria de Diseno Textil SA | 172,685 | 5,344,180 | |
17,144,965 | |||
Sweden - 7.3% | |||
Assa Abloy AB, Class B | 216,450 | 4,811,932 | |
Atlas Copco AB, Class A | 116,800 | 3,596,637 | |
Indutrade AB | 163,178 | 4,572,764 | |
Tele2 AB, Class B (1) | 354,979 | 5,279,394 | |
18,260,727 | |||
Switzerland - 8.3% | |||
Lonza Group AG | 13,973 | 4,728,614 | |
Nestle SA | 92,893 | 10,074,660 | |
Sika AG | 41,683 | 6,098,712 | |
20,901,986 | |||
Taiwan - 2.5% | |||
Taiwan Semiconductor Manufacturing Co. Ltd. ADR | 133,040 | 6,183,699 | |
United Kingdom - 15.4% | |||
Abcam plc | 247,085 | 3,481,900 | |
Compass Group plc | 174,802 | 4,498,127 | |
Halma plc | 127,980 | 3,097,809 | |
London Stock Exchange Group plc | 47,208 | 4,239,263 | |
Melrose Industries plc | 2,624,604 | 6,502,409 | |
Prudential plc | 316,949 | 5,743,502 |
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SHARES | VALUE ($) | ||
COMMON STOCKS - CONT’D | |||
Unilever plc | 111,223 | 6,684,718 | |
Weir Group plc (The) | 250,652 | 4,390,845 | |
38,638,573 | |||
United States - 3.0% | |||
Visa, Inc., Class A | 16,896 | 2,906,281 | |
Xylem, Inc. | 57,512 | 4,579,105 | |
7,485,386 | |||
Total Common Stocks (Cost $215,239,719) | 243,342,997 | ||
PREFERRED STOCKS - 0.1% | |||
Venture Capital - 0.1% | |||
Bioceptive, Inc.: | |||
Series A (2)(3)(4) | 582,574 | — | |
Series B (2)(3)(4) | 40,523 | — | |
FINAE, Series D (2)(3)(4) | 2,597,442 | 151,366 | |
151,366 | |||
Total Preferred Stocks (Cost $491,304) | 151,366 | ||
VALUE ($) | |||
VENTURE CAPITAL LIMITED PARTNERSHIP INTERESTS - 0.5% | |||
Africa Renewable Energy Fund LP (2)(3)(4) | 1,045,776 | ||
Blackstone Clean Technology Partners LP (2)(3)(4) | 2,725 | ||
Emerald Sustainability Fund I LP (2)(3)(4) | 58,583 | ||
gNet Defta Development Holding LLC (2)(3)(4)(5) | 249,584 | ||
SEAF Central and Eastern European Growth Fund LLC (2)(3)(4)(5) | 3,570 | ||
SEAF India International Growth Fund LP (2)(3)(4) | 688 | ||
Total Venture Capital Limited Partnership Interests (Cost $2,220,816) | 1,360,926 | ||
PRINCIPAL AMOUNT ($) | VALUE ($) | ||
VENTURE CAPITAL DEBT OBLIGATIONS - 0.0% | |||
Windhorse International-Spring Health Water Ltd., 1.00%, 3/15/20 (2)(4)(6) | 70,000 | — | |
Total Venture Capital Debt Obligations (Cost $70,000) | — | ||
HIGH SOCIAL IMPACT INVESTMENTS - 2.0% | |||
Calvert Impact Capital, Inc., Community Investment Notes, 1.50%, 12/15/19 (2)(5) | 4,431,583 | 4,408,140 | |
ImpactAssets Inc., Global Sustainable Agriculture Notes, 3.39%, 11/3/20 (2)(7) | 220,000 | 218,429 | |
ImpactAssets Inc., Microfinance Plus Notes, 1.98%, 11/3/20 (2)(7) | 283,000 | 276,497 | |
Total High Social Impact Investments (Cost $4,934,583) | 4,903,066 | ||
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SHARES | VALUE ($) | |
SHORT TERM INVESTMENT OF CASH COLLATERAL FOR SECURITIES LOANED - 0.2% | ||
State Street Navigator Securities Lending Government Money Market Portfolio, 2.07% | 604,682 | 604,682 |
Total Short Term Investment of Cash Collateral for Securities Loaned (Cost $604,682) | 604,682 | |
TOTAL INVESTMENTS (Cost $223,561,104) - 99.9% | 250,363,037 | |
Other assets and liabilities, net - 0.1% | 275,622 | |
NET ASSETS - 100.0% | 250,638,659 |
NOTES TO SCHEDULE OF INVESTMENTS | |
(1) All or a portion of this security was on loan at September 30, 2019. The aggregate market value of securities on loan at September 30, 2019 was $7,102,142. | |
(2) Restricted security. Total market value of restricted securities amounts to $6,415,358, which represents 2.6% of the net assets of the Fund as of September 30, 2019. | |
(3) Non-income producing security. | |
(4) For fair value measurement disclosure purposes, security is categorized as Level 3 (see Note 1A). | |
(5) Affiliated company (see Note 7). | |
(6) Security defaulted as to principal and interest in March 2013. It has been restructured at a 9% rate maturing on March 15, 2020 with 1% to be paid annually and the remaining interest due at maturity. As of September 30, 2019, security is in default with respect to its annual 1% interest payment. | |
(7) Notes carry an interest rate that varies by period and is contingent on the performance of the underlying portfolio of loans to borrowers. The coupon rate shown represents the rate in effect at September 30, 2019. | |
Abbreviations: | |
ADR: | American Depositary Receipt |
10 www.calvert.com CALVERT INTERNATIONAL EQUITY FUND ANNUAL REPORT
At September 30, 2019, the concentration of the Fund’s investments in the various sectors, determined as a percentage of total investments, was as follows: |
ECONOMIC SECTORS | % of total investments* | |
Industrials | 23.0 | % |
Health Care | 15.8 | % |
Financials | 13.2 | % |
Consumer Staples | 13.0 | % |
Consumer Discretionary | 12.8 | % |
Information Technology | 11.1 | % |
Materials | 4.3 | % |
Communication Services | 2.1 | % |
Utilities | 2.1 | % |
High Social Impact Investments | 2.0 | % |
Venture Capital Limited Partnership Investments | 0.5 | % |
Venture Capital | 0.1 | % |
Total | 100.0 | % |
* Does not include Short Term Investment of Cash Collateral for Securities Loaned. |
RESTRICTED SECURITIES | ACQUISITION DATES | COST ($) | |
Africa Renewable Energy Fund LP | 4/17/14-5/13/19 | 991,538 | |
Bioceptive, Inc., Series A | 10/26/12-12/18/13 | 252,445 | |
Bioceptive, Inc., Series B | 1/7/16 | 16,250 | |
Blackstone Clean Technology Partners LP | 7/29/10-6/25/15 | 78,853 | |
Calvert Impact Capital, Inc., Community Investment Notes, 1.50%, 12/15/19 | 12/15/16 | 4,431,583 | |
Emerald Sustainability Fund I LP | 7/19/01-5/17/11 | 393,935 | |
FINAE, Series D | 2/28/11-11/16/15 | 222,609 | |
gNet Defta Development Holding LLC | 8/30/05 | 400,000 | |
ImpactAssets Inc., Global Sustainable Agriculture Notes, 3.39%, 11/3/20 | 11/13/15 | 220,000 | |
ImpactAssets Inc., Microfinance Plus Notes, 1.98%, 11/3/20 | 11/13/15 | 283,000 | |
SEAF Central and Eastern European Growth Fund LLC | 8/10/00-8/26/11 | 146,100 | |
SEAF India International Growth Fund LP | 3/22/05-5/24/10 | 210,391 | |
Windhorse International-Spring Health Water Ltd., 1.00%, 3/15/20 | 2/12/14 | 70,000 | |
See notes to financial statements. |
www.calvert.com CALVERT INTERNATIONAL EQUITY FUND ANNUAL REPORT 11
CALVERT INTERNATIONAL EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2019
ASSETS | |||
Investments in securities of unaffiliated issuers, at value (identified cost $218,583,421) - including $7,102,142 of securities on loan | $245,701,743 | ||
Investments in securities of affiliated issuers, at value (identified cost $4,977,683) | 4,661,294 | ||
Cash | 21,174,708 | ||
Cash denominated in foreign currency, at value (cost $843,061) | 843,057 | ||
Receivable for investments sold | 1,832,858 | ||
Receivable for capital shares sold | 1,005,630 | ||
Dividends and interest receivable | 409,401 | ||
Interest receivable - affiliated | 52,810 | ||
Securities lending income receivable | 8,166 | ||
Receivable from affiliates | 29,325 | ||
Tax reclaims receivable | 346,869 | ||
Directors’ deferred compensation plan | 101,863 | ||
Other assets | 9,214 | ||
Total assets | 276,176,938 | ||
LIABILITIES | |||
Payable for investments purchased | 22,322,595 | ||
Payable for capital shares redeemed | 2,152,191 | ||
Deposits for securities loaned | 604,682 | ||
Payable to affiliates: | |||
Investment advisory fee | 145,550 | ||
Administrative fee | 23,288 | ||
Distribution and service fees | 28,325 | ||
Sub-transfer agency fee | 19,575 | ||
Directors’ deferred compensation plan | 101,863 | ||
Accrued expenses | 140,210 | ||
Total liabilities | 25,538,279 | ||
Commitments and contingent liabilities (see Note 10) | |||
NET ASSETS | $250,638,659 | ||
NET ASSETS CONSIST OF: | |||
Paid-in capital applicable to common stock | |||
(75,000,000 shares per class of $0.01 par value authorized) | $239,892,373 | ||
Distributable earnings | 10,746,286 | ||
Total | $250,638,659 | ||
NET ASSET VALUE PER SHARE | |||
Class A (based on net assets of $112,922,809 and 6,210,929 shares outstanding) | $18.18 | ||
Class C (based on net assets of $6,122,250 and 393,972 shares outstanding) | $15.54 | ||
Class I (based on net assets of $82,261,307 and 4,232,884 shares outstanding) | $19.43 | ||
Class R6 (based on net assets of $49,332,293 and 2,537,831 shares outstanding) | $19.44 | ||
OFFERING PRICE PER SHARE* | |||
Class A (100/95.25 of net asset value per share) | $19.09 | ||
* On sales of $50,000 or more, the offering price of Class A shares is reduced. | |||
See notes to financial statements. |
12 www.calvert.com CALVERT INTERNATIONAL EQUITY FUND ANNUAL REPORT
CALVERT INTERNATIONAL EQUITY FUND
STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 2019
INVESTMENT INCOME | |||
Dividend income (net of foreign taxes withheld of $461,989) | $4,008,768 | ||
Non-cash dividend income | 1,174,616 | ||
Interest income | 52,079 | ||
Interest income - affiliated issuers | 66,474 | ||
Securities lending income, net | 40,281 | ||
Total investment income | 5,342,218 | ||
EXPENSES | |||
Investment advisory fee | 1,540,393 | ||
Administrative fee | 246,463 | ||
Distribution and service fees: | |||
Class A | 272,623 | ||
Class C | 79,185 | ||
Directors’ fees and expenses | 12,404 | ||
Custodian fees | 53,793 | ||
Transfer agency fees and expenses | 360,015 | ||
Accounting fees | 53,681 | ||
Professional fees | 50,848 | ||
Registration fees | 86,668 | ||
Reports to shareholders | 18,558 | ||
Miscellaneous | 47,191 | ||
Total expenses | 2,821,822 | ||
Waiver and/or reimbursement of expenses by affiliates | (400,965) | ||
Reimbursement of expenses-other | (4,977) | ||
Net expenses | 2,415,880 | ||
Net investment income | 2,926,338 | ||
REALIZED AND UNREALIZED GAIN (LOSS) | |||
Net realized gain (loss) on: | |||
Investment securities - unaffiliated issuers | 3,025,322 | ||
Foreign currency transactions | (55,864) | ||
2,969,458 | |||
Net change in unrealized appreciation (depreciation) on: | |||
Investment securities - unaffiliated issuers | 6,602,103 | ||
Investment securities - affiliated issuers | 109,161 | ||
Foreign currency | (14,121) | ||
6,697,143 | |||
Net realized and unrealized gain | 9,666,601 | ||
Net increase in net assets resulting from operations | $12,592,939 | ||
See notes to financial statements. |
www.calvert.com CALVERT INTERNATIONAL EQUITY FUND ANNUAL REPORT 13
CALVERT INTERNATIONAL EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS | Year Ended September 30, 2019 | Year Ended September 30, 2018 | |||||
Operations: | |||||||
Net investment income | $2,926,338 | $2,345,025 | |||||
Net realized gain | 2,969,458 | 7,761,999 | |||||
Net change in unrealized appreciation (depreciation) | 6,697,143 | (1,187,272) | |||||
Net increase in net assets resulting from operations | 12,592,939 | 8,919,752 | |||||
Distributions to shareholders: | |||||||
Class A shares | (1,141,071) | (1,876,125) | |||||
Class C shares | (50,893) | (125,794) | |||||
Class I shares | (912,793) | (1,292,207) | |||||
Total distributions to shareholders | (2,104,757) | (3,294,126) | |||||
Capital share transactions: | |||||||
Class A shares | (6,044,601) | (14,993,614) | |||||
Class C shares | (4,981,623) | (1,124,533) | |||||
Class I shares | 13,082,906 | (9,224,705) | |||||
Class R6 shares (1) | 47,291,005 | — | |||||
Class Y shares (2) | — | (25,569,482) | |||||
Net increase (decrease) in net assets from capital share transactions | 49,347,687 | (50,912,334) | |||||
TOTAL INCREASE (DECREASE) IN NET ASSETS | 59,835,869 | (45,286,708) | |||||
NET ASSETS | |||||||
Beginning of year | 190,802,790 | 236,089,498 | |||||
End of year | $250,638,659 | $190,802,790 | |||||
(1) For the period from the commencement of operations, March 7, 2019, to September 30, 2019. | |||||||
(2) Effective December 8, 2017, Class Y shares of the Fund converted to Class I shares at net asset value. Thereafter, Class Y shares were terminated. | |||||||
See notes to financial statements. |
14 www.calvert.com CALVERT INTERNATIONAL EQUITY FUND ANNUAL REPORT
CALVERT INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
Year Ended September 30, | |||||||||||||||
CLASS A SHARES | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||
Net asset value, beginning | $17.53 | $17.10 | $15.49 | $15.62 | $16.51 | ||||||||||
Income from investment operations: | |||||||||||||||
Net investment income (1) | 0.22 | 0.19 | 0.17 | 0.34 | (2) | 0.18 | |||||||||
Net realized and unrealized gain (loss) | 0.61 | 0.50 | 1.84 | (0.33) | (0.97) | ||||||||||
Total from investment operations | 0.83 | 0.69 | 2.01 | 0.01 | (0.79) | ||||||||||
Distributions from: | |||||||||||||||
Net investment income | (0.18) | (0.26) | (0.40) | (0.14) | (0.10) | ||||||||||
Total distributions | (0.18) | (0.26) | (0.40) | (0.14) | (0.10) | ||||||||||
Total increase (decrease) in net asset value | 0.65 | 0.43 | 1.61 | (0.13) | (0.89) | ||||||||||
Net asset value, ending | $18.18 | $17.53 | $17.10 | $15.49 | $15.62 | ||||||||||
Total return (3) | 4.93 | % | 4.02 | % | 13.43 | % | 0.04 | % | (4.78 | %) | |||||
Ratios to average net assets: (4) | |||||||||||||||
Total expenses | 1.46 | % | 1.47 | % | 1.58 | % | 1.62 | % | 1.67 | % | |||||
Net expenses | 1.27 | % | 1.32 | % | 1.35 | % | 1.38 | % | 1.54 | % | |||||
Net investment income | 1.26 | % | 1.09 | % | 1.08 | % | 2.20 | % | (2) | 1.08 | % | ||||
Portfolio turnover | 51 | % | 48 | % | 138 | % | 94 | % | 97 | % | |||||
Net assets, ending (in thousands) | $112,923 | $114,915 | $126,669 | $156,757 | $167,225 | ||||||||||
(1) Computed using average shares outstanding. | |||||||||||||||
(2) Amount includes a non-recurring refund for overbilling of prior years’ custody out-of-pocket fees. This amounted to $0.013 per share and 0.08% of average net assets. | |||||||||||||||
(3) Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges, if any. | |||||||||||||||
(4) Total expenses do not reflect amounts reimbursed and/or waived by the adviser and certain of its affiliates, if applicable. Net expenses are net of all reductions and represent the net expenses paid by the Fund. | |||||||||||||||
See notes to financial statements. |
www.calvert.com CALVERT INTERNATIONAL EQUITY FUND ANNUAL REPORT 15
CALVERT INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
Year Ended September 30, | |||||||||||||||
CLASS C SHARES | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||
Net asset value, beginning | $15.00 | $14.68 | $13.31 | $13.47 | $14.27 | ||||||||||
Income from investment operations: | |||||||||||||||
Net investment income (1) | 0.03 | 0.06 | 0.05 | 0.19 | (2) | 0.04 | |||||||||
Net realized and unrealized gain (loss) | 0.58 | 0.42 | 1.59 | (0.28) | (0.84) | ||||||||||
Total from investment operations | 0.61 | 0.48 | 1.64 | (0.09) | (0.80) | ||||||||||
Distributions from: | |||||||||||||||
Net investment income | (0.07) | (0.16) | (0.27) | (0.07) | — | ||||||||||
Total distributions | (0.07) | (0.16) | (0.27) | (0.07) | — | ||||||||||
Total increase (decrease) in net asset value | 0.54 | 0.32 | 1.37 | (0.16) | (0.80) | ||||||||||
Net asset value, ending | $15.54 | $15.00 | $14.68 | $13.31 | $13.47 | ||||||||||
Total return (3) | 4.15 | % | 3.23 | % | 12.60 | % | (0.68 | %) | (5.61 | %) | |||||
Ratios to average net assets: (4) | |||||||||||||||
Total expenses | 2.21 | % | 2.22 | % | 2.54 | % | 2.55 | % | 2.58 | % | |||||
Net expenses | 2.03 | % | 2.07 | % | 2.10 | % | 2.14 | % | 2.37 | % | |||||
Net investment income | 0.23 | % | 0.39 | % | 0.35 | % | 1.42 | % | (2) | 0.31 | % | ||||
Portfolio turnover | 51 | % | 48 | % | 138 | % | 94 | % | 97 | % | |||||
Net assets, ending (in thousands) | $6,122 | $11,149 | $12,013 | $13,613 | $15,997 | ||||||||||
(1) Computed using average shares outstanding. | |||||||||||||||
(2) Amount includes a non-recurring refund for overbilling of prior years’ custody out-of-pocket fees. This amounted to $0.011 per share and 0.08% of average net assets. | |||||||||||||||
(3) Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges, if any. | |||||||||||||||
(4) Total expenses do not reflect amounts reimbursed and/or waived by the adviser and certain of its affiliates, if applicable. Net expenses are net of all reductions and represent the net expenses paid by the Fund. | |||||||||||||||
See notes to financial statements. |
16 www.calvert.com CALVERT INTERNATIONAL EQUITY FUND ANNUAL REPORT
CALVERT INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
Year Ended September 30, | |||||||||||||||
CLASS I SHARES | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||
Net asset value, beginning | $18.72 | $18.24 | $16.53 | $16.73 | $17.68 | ||||||||||
Income from investment operations: | |||||||||||||||
Net investment income (1) | 0.28 | 0.27 | 0.21 | 0.44 | (2) | 0.30 | |||||||||
Net realized and unrealized gain (loss) | 0.66 | 0.53 | 2.01 | (0.36) | (1.05) | ||||||||||
Total from investment operations | 0.94 | 0.80 | 2.22 | 0.08 | (0.75) | ||||||||||
Distributions from: | |||||||||||||||
Net investment income | (0.23) | (0.32) | (0.51) | (0.28) | (0.20) | ||||||||||
Total distributions | (0.23) | (0.32) | (0.51) | (0.28) | (0.20) | ||||||||||
Total increase (decrease) in net asset value | 0.71 | 0.48 | 1.71 | (0.20) | (0.95) | ||||||||||
Net asset value, ending | $19.43 | $18.72 | $18.24 | $16.53 | $16.73 | ||||||||||
Total return (3) | 5.25 | % | 4.37 | % | 13.89 | % | 0.41 | % | (4.27 | %) | |||||
Ratios to average net assets: (4) | |||||||||||||||
Total expenses | 1.20 | % | 1.22 | % | 1.06 | % | 1.04 | % | 1.03 | % | |||||
Net expenses | 0.98 | % | 0.95 | % | 0.96 | % | 0.95 | % | 0.98 | % | |||||
Net investment income | 1.52 | % | 1.44 | % | 1.28 | % | 2.67 | % | (2) | 1.68 | % | ||||
Portfolio turnover | 51 | % | 48 | % | 138 | % | 94 | % | 97 | % | |||||
Net assets, ending (in thousands) | $82,261 | $64,739 | $72,503 | $140,129 | $147,614 | ||||||||||
(1) Computed using average shares outstanding. | |||||||||||||||
(2) Amount includes a non-recurring refund for overbilling of prior years’ custody out-of-pocket fees. This amounted to $0.014 per share and 0.09% of average net assets. | |||||||||||||||
(3) Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges, if any. | |||||||||||||||
(4) Total expenses do not reflect amounts reimbursed and/or waived by the adviser and certain of its affiliates, if applicable. Net expenses are net of all reductions and represent the net expenses paid by the Fund. | |||||||||||||||
See notes to financial statements. |
www.calvert.com CALVERT INTERNATIONAL EQUITY FUND ANNUAL REPORT 17
CALVERT INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
CLASS R6 SHARES | Period Ended September 30, 2019 (1) | |||
Net asset value, beginning | $17.79 | |||
Income from investment operations: | ||||
Net investment income (2) | 0.28 | |||
Net realized and unrealized gain | 1.37 | |||
Total from investment operations | 1.65 | |||
Total increase in net asset value | 1.65 | |||
Net asset value, ending | $19.44 | |||
Total return (3) | 9.27 | % | (4) | |
Ratios to average net assets: (5) | ||||
Total expenses | 1.14 | % | (6) | |
Net expenses | 0.96 | % | (6) | |
Net investment income | 2.62 | % | (6) | |
Portfolio turnover | 51 | % | (7) | |
Net assets, ending (in thousands) | $49,332 | |||
(1) For the period from the commencement of operations, March 7, 2019, to September 30, 2019. | ||||
(2) Computed using average shares outstanding. | ||||
(3) Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges, if any. | ||||
(4) Not annualized. | ||||
(5) Total expenses do not reflect amounts reimbursed and/or waived by the adviser and certain of its affiliates, if applicable. Net expenses are net of all reductions and represent the net expenses paid by the Fund. | ||||
(6) Annualized. | ||||
(7) For the year ended September 30, 2019. | ||||
See notes to financial statements. |
18 www.calvert.com CALVERT INTERNATIONAL EQUITY FUND ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS
NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES
Calvert International Equity Fund (the Fund) is a diversified series of Calvert World Values Fund, Inc. (the Corporation). The Corporation is a Maryland corporation registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company. The investment objective of the Fund is to seek to provide a high total return consistent with reasonable risk by investing primarily in a diversified portfolio of stocks. The Fund invests primarily in equity securities of foreign companies.
The Fund offers four classes of shares. Class A shares are generally sold subject to a sales charge imposed at time of purchase. A contingent deferred sales charge of 0.80% may apply to certain redemptions of Class A shares for accounts for which no sales charge was paid, if redeemed within 12 months of purchase. Class C shares are sold without a front-end sales charge, and with certain exceptions, are charged a contingent deferred sales charge of 1% on shares redeemed within 12 months of purchase. Class C shares are only available for purchase through a financial intermediary. Effective January 25, 2019, Class C shares generally automatically convert to Class A shares ten years after their purchase as described in the Fund’s prospectus. Class I and R6 shares are sold at net asset value, are not subject to a sales charge and are sold only to certain eligible investors. Each class represents a pro rata interest in the Fund, but votes separately on class-specific matters and is subject to different expenses.
The Fund applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services – Investment Companies (ASC 946). Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements.
A. Investment 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 (the Board) to value its investments wherever possible. Investments for which market quotations are not available or deemed not reliable are fair valued in good faith under the direction of the Board.
U.S. generally accepted accounting principles (U.S. 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 methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Valuation techniques used to value the Fund’s investments by major category are as follows:
Equity Securities. Equity securities (including warrants and rights) listed on a U.S. securities exchange generally are valued at the last sale or closing price as reported by an independent pricing service on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. Equity securities listed on the NASDAQ Global or Global Select Market are valued at the NASDAQ official closing price and are categorized as Level 1 in the hierarchy. Unlisted or listed securities for which closing sales prices or closing quotations are not available are valued at the mean between the latest available bid and ask prices and are categorized as Level 2 in the hierarchy. The daily valuation of exchange-traded foreign securities generally is determined as of the close of trading on the principal exchange on which such securities trade. Events occurring after the close of trading on foreign exchanges may result in adjustments to the valuation of foreign securities to more accurately reflect their fair value as of the close of regular trading on the New York Stock Exchange. When valuing foreign equity securities that meet certain criteria, the Fund’s Board has approved the use of a fair value service that values such securities to reflect market trading that occurs after the close of the applicable foreign markets of comparable securities or other instruments that have a strong correlation to the fair-valued securities. Such securities are categorized as Level 2 in the hierarchy.
Debt Securities. Debt securities are generally valued on the basis of valuations provided by third party pricing services, as derived from such services’ pricing models. Inputs to the models may include, but are not limited to, reported trades, executable bid and ask prices, broker/dealer quotations, prices or yields of securities with similar characteristics, interest rates, anticipated prepayments, benchmark curves or information pertaining to the issuer, as well as industry and economic events. Accordingly, debt securities are generally categorized as Level 2 in the hierarchy. Short-term debt securities of sufficient credit quality purchased with remaining maturities of sixty days or less for which a valuation from a third party pricing service is not readily available may be valued at amortized cost, which approximates fair value, and are categorized as Level 2 in the hierarchy.
www.calvert.com CALVERT INTERNATIONAL EQUITY FUND ANNUAL REPORT 19
Venture Capital Securities. Venture capital securities for which market quotations are not readily available are generally categorized as Level 3 in the hierarchy. Venture capital equity securities are generally valued using the most appropriate and applicable method to measure fair value in light of each company’s situation. Methods may include market, income, options-pricing or cost approaches with discounts as appropriate based on assumptions of liquidation or exit risk. Examples of the market approach are subsequent rounds of financing, comparable transactions, and revenue times an industry multiple. An example of the income approach is the discounted cash flow model. Examples of the cost approach are replacement cost, salvage value, or net asset value. The options-pricing method treats common stock and preferred stock as call options on the enterprise value with strike price based on the preferred stock liquidation preference. Venture capital limited partnership interests are valued at the fair value reported by the general partner of the partnership, adjusted as necessary to reflect subsequent capital calls and distributions and any other available information. In some cases, adjustments may be made to account for daily pricing of material public holdings within the partnership.
Other Securities. Investments in registered investment companies (including money market funds) that do not trade on an exchange are valued at the net asset value per share on the valuation day and are categorized as Level 1 in the hierarchy.
Fair Valuation. If a market value cannot be determined for a security using the methodologies described above, or if, in the good faith opinion of the Fund’s adviser, the market value does not constitute a readily available market quotation, or if a significant event has occurred that would materially affect the value of the security, the security will be fair valued as determined in good faith by or at the direction of the Board in a manner that most fairly reflects the security’s “fair value”, which is the amount that the Fund might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of relevant factors, which are likely to vary from one pricing context to another. These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issuer or of comparable companies or entities, quotations or relevant information obtained from broker/dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the company’s or entity’s financial statements, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.
The values assigned to fair value investments are based on available information and do not necessarily represent amounts that might ultimately be realized. Further, due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed, and the differences could be material.
The following table summarizes the market value of the Fund’s holdings as of September 30, 2019, based on the inputs used to value them:
Assets | Level 1 | Level 2 | Level 3(1) | Total | |||||||||
Common Stocks | |||||||||||||
Canada | $ | 4,951,934 | $ | — | $ | — | $ | 4,951,934 | |||||
Taiwan | 6,183,699 | — | — | 6,183,699 | |||||||||
United States | 7,485,386 | — | — | 7,485,386 | |||||||||
Other Countries(2) | — | 224,721,978 | — | 224,721,978 | |||||||||
Total Common Stocks | $ | 18,621,019 | $ | 224,721,978 | (3) | $ | — | $ | 243,342,997 | ||||
Preferred Stocks - Venture Capital | — | — | 151,366 | 151,366 | |||||||||
Venture Capital Limited Partnership Interests | — | — | 1,360,926 | 1,360,926 | |||||||||
Venture Capital Debt Obligations | — | — | — | — | |||||||||
High Social Impact Investments | — | 4,903,066 | — | 4,903,066 | |||||||||
Short Term Investment of Cash Collateral for Securities Loaned | 604,682 | — | — | 604,682 | |||||||||
Total Investments | $ | 19,225,701 | $ | 229,625,044 | $ | 1,512,292 | $ | 250,363,037 | |||||
(1) None of the unobservable inputs for Level 3 assets, individually or collectively, had a material impact on the Fund. | |||||||||||||
(2) For further breakdown of equity securities by country, please refer to the Schedule of Investments. | |||||||||||||
(3) Includes foreign equity securities whose values were adjusted to reflect market trading of comparable securities or other correlated instruments that occurred after the close of trading in their applicable foreign markets. |
Level 3 investments at the beginning and/or end of the period in relation to net assets were not significant and accordingly, a reconciliation of Level 3 assets for the year ended September 30, 2019 is not presented.
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B. Investment Transactions and Income: Investment transactions for financial statement purposes 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 for dividends received in cash and/or securities or, in the case of dividends on certain foreign securities, as soon as the Fund is informed of the ex-dividend date. Non-cash dividends are recorded at the fair value of the securities received. Withholding taxes on foreign dividends, if any, have been provided for in accordance with the Fund’s understanding of the applicable country’s tax rules and rates. In consideration of recent decisions rendered by European courts, the Fund has filed additional tax reclaims for previously withheld taxes on dividends earned in certain European Union countries. These filings are subject to various administrative and judicial proceedings within these countries. Due to the uncertainty as to the ultimate resolution of these proceedings, the likelihood of receipt of these reclaims, and the potential timing of payment, no amounts are reflected in the financial statements for such outstanding reclaims. Distributions received that represent a return of capital are recorded as a reduction of cost of investments. Distributions received that represent a capital gain are recorded as a realized gain. Interest income, which includes amortization of premium and accretion of discount on debt securities, is accrued as earned.
C. Share Class Accounting: Realized and unrealized gains and losses and net investment income and losses, other than class-specific expenses, are allocated daily to each class of shares based upon the relative net assets of each class to the total net assets of the Fund. Expenses arising in connection with a specific class are charged directly to that class. Sub-accounting, recordkeeping and similar administrative fees payable to financial intermediaries, which are a component of transfer agency fees and expenses on the Statement of Operations, are not allocated to Class R6 shares.
D. 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. Recognized gains or losses on investment transactions attributable to changes in foreign currency exchange rates are recorded for financial statement purposes as net realized gains and losses on investments. That portion of unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed.
E. 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 (excluding Rule 144A securities) is included at the end of the Schedule of Investments.
F. 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 U.S. GAAP; accordingly, periodic reclassifications are made within the Fund’s capital accounts to reflect income and gains available for distribution under income tax regulations.
G. Estimates: The preparation of financial statements in conformity with U.S. GAAP 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 increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
H. Indemnifications: The Corporation’s By-Laws provide for indemnification for Directors or officers of the Corporation and certain other parties, to the fullest extent permitted by Maryland law and the 1940 Act, provided certain conditions are met. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.
I. 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 from the date of filing.
NOTE 2 — RELATED PARTY TRANSACTIONS
The investment advisory fee is earned by Calvert Research and Management (CRM), a subsidiary of Eaton Vance Management (EVM), as compensation for investment advisory services rendered to the Fund. Pursuant to the investment advisory agreement, CRM receives a fee, payable monthly, at the following annual rates of the Fund’s average daily net assets: 0.75% on the first $250 million, 0.725% on the next $250 million and 0.675% on the excess of $500 million. For the year ended September 30, 2019, the investment advisory fee amounted to $1,540,393 or 0.75% of the Fund’s average daily net assets.
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Eaton Vance Advisers International Ltd. (EVAIL), an indirect, wholly-owned subsidiary of Eaton Vance Corp., provides sub-advisory services to the Fund pursuant to a sub-advisory agreement with CRM. Sub-advisory fees are paid by CRM from its investment advisory fee.
CRM and EVAIL have agreed to reimburse the Fund’s operating expenses to the extent that total annual operating expenses (relating to ordinary operating expenses only and excluding expenses such as brokerage commissions, acquired fund fees and expenses of unaffiliated funds, borrowing costs, taxes or litigation expenses) exceed 1.25%, 2.00% and 1.00% (1.32%, 2.07% and 0.95% prior to February 1, 2019) for Class A, Class C and Class I, respectively, and 0.96% for Class R6 of such class’ average daily net assets. Effective October 1, 2019, CRM and EVAIL have agreed to reimburse the Fund’s total annual operating expenses (as described above) to the extent that they exceed 1.14%, 1.89%, 0.89% and 0.85% for Class A, Class C, Class I and Class R6, respectively, of such class’s average daily net assets.The expense reimbursement agreement may be changed or terminated after January 31, 2021. For the year ended September 30, 2019, CRM and EVAIL waived or reimbursed expenses in total of $400,965.
The administrative fee is earned by CRM as compensation for administrative services rendered to the Fund. The fee is computed at an annual rate of 0.12% of the Fund’s average daily net assets attributable to Class A, Class C, Class I and Class R6 and is payable monthly. For the year ended September 30, 2019, CRM was paid administrative fees of $246,463.
The Fund has in effect a distribution plan for Class A shares (Class A Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class A Plan, the Fund pays Eaton Vance Distributors, Inc. (EVD), an affiliate of CRM and the Fund’s principal underwriter, a distribution and service fee of 0.25% per annum of its average daily net assets attributable to Class A shares for distribution services and facilities provided to the Fund by EVD, as well as for personal services and/or the maintenance of shareholder accounts. The Fund also has in effect a distribution plan for Class C shares (Class C Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class C Plan, the Fund pays EVD amounts equal to 0.75% per annum of its average daily net assets attributable to Class C shares for providing ongoing distribution services and facilities to the Fund. In addition, pursuant to the Class C Plan, the Fund also makes payments of service fees to EVD, financial intermediaries and other persons in amounts equal to 0.25% per annum of its average daily net assets attributable to that class. Service fees paid or accrued are for personal services and/or the maintenance of shareholder accounts. Distribution and service fees paid or accrued for the year ended September 30, 2019 amounted to $272,623 and $79,185 for Class A shares and Class C shares, respectively.
The Fund was informed that EVD received $9,797 as its portion of the sales charge on sales of Class A shares for the year ended September 30, 2019. The Fund was also informed that EVD received $128 of contingent deferred sales charges (CDSC) paid by Class A shareholders and no CDSC paid by Class C shareholders for the same period.
EVM provides sub-transfer agency and related services to the Fund pursuant to a Sub-Transfer Agency Support Services Agreement. For the year ended September 30, 2019, sub-transfer agency fees and expenses incurred to EVM amounted to $82,365 and are included in transfer agency fees and expenses on the Statement of Operations.
Each Director of the Fund who is not an employee of CRM or its affiliates receives a fee of $3,000 for each Board meeting attended in person and $2,000 for each Board meeting attended by phone plus an annual fee of $117,000, and $1,500 for each Committee meeting attended in person and $1,000 for each Committee meeting attended by phone plus an annual Committee fee of $2,500. The Board chair receives an additional $15,000 annual retainer and Committee chairs receive an additional $6,000 annual retainer. Eligible Directors may participate in a Deferred Compensation Plan (the Plan). Amounts deferred under the Plan are treated as though equal dollar amounts had been invested in shares of the Fund or other Calvert funds selected by the Directors. The Fund purchases shares of the funds selected equal to the dollar amounts deferred under the Plan, resulting in an asset equal to the deferred compensation liability. Obligations of the Plan are paid solely from the Fund’s assets. Directors’ fees are allocated to each of the Calvert funds served. Salaries and fees of officers and Directors of the Fund who are employees of CRM or its affiliates are paid by CRM. In addition, an advisory council was established to aid the Board and CRM in advancing the cause of responsible investing through original scholarship and thought leadership. The advisory council consists of CRM’s Chief Executive Officer and four additional members. Each member (other than CRM’s Chief Executive Officer) receives annual compensation of $75,000, which is being reimbursed by Calvert Investment Management, Inc. (CIM), the Calvert funds’ former investment adviser and Ameritas Holding Company, CIM’s parent company, through the end of 2019. For the year ended September 30, 2019, the Fund’s allocated portion of such expense and reimbursement was $4,977, which are included in miscellaneous expense and reimbursement of expenses-other, respectively, on the Statement of Operations.
NOTE 3 — INVESTMENT ACTIVITY
During the year ended September 30, 2019, the cost of purchases and proceeds from sales of investments, other than short-term securities, were $155,280,882 and $105,127,791, respectively.
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NOTE 4 — DISTRIBUTIONS TO SHAREHOLDERS AND INCOME TAX INFORMATION
The tax character of distributions declared for the years ended September 30, 2019 and September 30, 2018 was as follows:
Year Ended September 30, | ||||||
2019 | 2018 | |||||
Ordinary income | $2,104,757 | $3,294,126 |
During the year ended September 30, 2019, distributable earnings was increased by $10,386,632 and paid-in capital was decreased by $10,386,632 due to expired capital loss carryforwards. These reclassifications had no effect on the net assets or net asset value per share of the Fund.
As of September 30, 2019, the components of distributable earnings (accumulated loss) on a tax basis were as follows:
Undistributed ordinary income | $2,862,227 | ||
Deferred capital losses | ($18,694,281 | ) | |
Net unrealized appreciation (depreciation) | $26,578,340 |
At September 30, 2019, the Fund, for federal income tax purposes, had deferred capital losses of $18,694,281 which would reduce the Fund’s taxable income arising from future net realized gains on investment transactions, if any, to the extent permitted by the Internal Revenue Code, and thus would reduce the amount of distributions to shareholders, which would otherwise be necessary to relieve the Fund of any liability for federal income or excise tax. The deferred capital losses are treated as arising on the first day of the Fund’s next taxable year, can be carried forward for an unlimited period, and retain the same short-term or long-term character as when originally deferred. Of the deferred capital losses at September 30, 2019, $5,934,395 are short-term and $12,759,886 are long-term.
The cost and unrealized appreciation (depreciation) of investments of the Fund at September 30, 2019, as determined on a federal income tax basis, were as follows:
Aggregate cost | $223,767,831 | ||
Gross unrealized appreciation | $33,200,557 | ||
Gross unrealized depreciation | (6,605,351) | ||
Net unrealized appreciation (depreciation) | $26,595,206 |
NOTE 5 — SECURITIES LENDING
To generate additional income, the Fund may lend its securities pursuant to a securities lending agency agreement with State Street Bank and Trust Company (SSBT), the securities lending agent. Security loans are subject to termination by the Fund at any time and, therefore, are not considered illiquid investments. The Fund requires that the loan be continuously collateralized by either cash or securities as collateral equal at all times to at least 102% of the market value of the domestic securities loaned and 105% of the market value of the international securities loaned (if applicable). The market value of securities loaned is determined daily and any additional required collateral is delivered to the Fund on the next business day. Cash collateral is generally invested in a money market fund registered under the 1940 Act that is managed by an affiliate of SSBT. Any gain or loss in the market price of the loaned securities that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Fund. Income earned on the investment of collateral, net of broker rebates and other expenses incurred by the securities lending agent, is split between the Fund and the securities lending agent on the basis of agreed upon contractual terms. Non-cash collateral, if any, is held by the lending agent on behalf of the Fund and cannot be sold or re-pledged by the Fund; accordingly, such collateral is not reflected in the Statement of Assets and Liabilities.
The risks associated with lending portfolio securities include, but are not limited to, possible delays in receiving additional collateral or in the recovery of the loaned securities, possible loss of rights to the collateral should the borrower fail financially, as well as risk of loss in the value of the collateral or the value of the investments made with the collateral. The securities lending agent shall indemnify the Fund in the case of default of any securities borrower.
At September 30, 2019, the total value of securities on loan was $7,102,142 and the total value of collateral received was $7,567,257, comprised of cash of $604,682 and U.S. government and/or agencies securities of $6,962,575.
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The following table provides a breakdown of securities lending transactions accounted for as secured borrowings, the obligations by class of collateral pledged, and the remaining contractual maturity of those transactions as of September 30, 2019.
Remaining Contractual Maturity of the Transactions | |||||||||||||||
Overnight and Continuous | <30 days | 30 to 90 days | >90 days | Total | |||||||||||
Securities Lending Transactions | |||||||||||||||
Common Stocks | $7,567,257 | $— | $— | $— | $7,567,257 |
The carrying amount of the liability for deposits for securities loaned at September 30, 2019 approximated its fair value. If measured at fair value, such liability would have been considered as Level 2 in the fair value hierarchy (see Note 1A) at September 30, 2019.
NOTE 6 — LINE OF CREDIT
The Fund participates with other funds managed by CRM in a $100 million ($62.5 million prior to June 21, 2019) committed unsecured line of credit agreement with SSBT, which is in effect through June 19, 2020. Borrowings may be made for temporary or emergency purposes only. Borrowings bear interest at the higher of the One-Month London Interbank Offered Rate (LIBOR) in effect that day or the overnight Federal Funds Rate, plus 1.00% per annum. A commitment fee of 0.20% per annum is incurred on the unused portion of the committed facility. An administrative fee of $37,500 was incurred in connection with the increase of the facility in June 2019. These fees are allocated to all participating funds. Because the line of credit is not available exclusively to the Fund, it may be unable to borrow some or all of its requested amounts at any particular time. The Fund had no borrowings outstanding pursuant to this line of credit at September 30, 2019. The Fund did not have any significant borrowings or allocated fees during the year ended September 30, 2019.
Effective at the close of business on October 28, 2019, the Fund and other participating funds managed by CRM terminated the line of credit agreement. Effective October 29, 2019, the Fund participates with other funds managed by EVM and its affiliates, including CRM, in an $800 million unsecured line of credit agreement with a syndicate of banks, which is in effect through October 27, 2020, at terms that are more favorable than the terminated agreement.
NOTE 7 — AFFILIATED COMPANIES
The Fund has invested a portion of its assets designated for high social impact investments in notes (the Notes) issued by Calvert Impact Capital, Inc. (CIC), formerly the Calvert Social Investment Foundation, pursuant to exemptive relief granted by the U.S. Securities and Exchange Commission (the SEC). The Calvert Funds first obtained an exemptive order for these investments in 1998. At that time, there was a significant overlap between the Fund Board members and CIC Board members as well as certain other affiliations between CIC and affiliates of the Fund’s investment adviser. In connection with the appointment of Calvert Research and Management (CRM) as the Fund’s investment adviser, the Calvert funds filed a request for a new exemptive order from the SEC to permit additional investments in the Notes. On October 28, 2019, the SEC issued the requested new exemptive order, allowing the Fund to make additional investments in the Notes. While the overlap between the Fund Board members and CIC Board members generally has decreased since the original order was granted, certain potential points of affiliation between the Fund and CIC remain. CRM has licensed use of the Calvert name to CIC and provides other types of support. CRM’s President and Chief Executive Officer (and the only director/trustee on the Fund Board that is an “interested person” of the Funds) serves on the CIC Board, along with two members of the Advisory Council to the Fund Board and a second officer of CRM. In addition, another director/trustee on the Fund Board serves as a director emeritus on the CIC Board and a member of the Advisory Council to the Fund Board serves as a director emerita on the CIC Board.
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In addition to the Notes, the Fund may also invest in companies that are considered affiliated companies because the Fund has a direct or indirect ownership of, control of, or voting power of 5 percent or more of the outstanding voting shares of the company, or the company is under common ownership or control with the Fund. At September 30, 2019, the value of the Fund’s investment in the Notes and affiliated companies was $4,661,294, which represents 1.86% of the Fund’s net assets. Transactions in the Notes and affiliated companies by the Fund for the year ended September 30, 2019 were as follows:
Name of Issuer | Value, beginning of period | Purchases | Sales Proceeds | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Value, end of period | Interest Income | Principal Amount, end of period | ||||||||||||||||
High Social Impact Investments | ||||||||||||||||||||||||
Calvert Impact Capital, Inc., Community Investment Notes, 1.50%, 12/15/19 (1) | $4,264,734 | $— | $— | $— | $143,406 | $4,408,140 | $66,474 | $4,431,583 | ||||||||||||||||
Venture Capital Limited Partnership Interests | ||||||||||||||||||||||||
SEAF Central and Eastern European Growth Fund LLC (1)(2)(3) | 39,099 | — | (9,318 | ) | — | (26,211 | ) | 3,570 | — | — | ||||||||||||||
gNet Defta Development Holding LLC (1)(2)(3) | 257,618 | — | — | — | (8,034 | ) | 249,584 | — | — | |||||||||||||||
TOTALS | $— | $109,161 | $4,661,294 | $66,474 | ||||||||||||||||||||
(1) Restricted security. | ||||||||||||||||||||||||
(2) Non-income producing security. | ||||||||||||||||||||||||
(3) For fair value measurement disclosure purposes, security is categorized as Level 3 (see Note 1A). |
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NOTE 8 — CAPITAL SHARES
Transactions in capital shares for the years ended September 30, 2019 and September 30, 2018 were as follows:
Year Ended September 30, 2019 | Year Ended September 30, 2018 | ||||||||||
Shares | Amount | Shares | Amount | ||||||||
Class A | |||||||||||
Shares sold | 463,021 | $7,932,556 | 720,208 | $12,677,952 | |||||||
Reinvestment of distributions | 70,194 | 1,067,653 | 98,915 | 1,738,925 | |||||||
Shares redeemed | (1,095,095 | ) | (18,554,534 | ) | (1,670,878 | ) | (29,410,491 | ) | |||
Converted from Class C | 217,447 | 3,509,724 | — | — | |||||||
Net decrease | (344,433 | ) | ($6,044,601 | ) | (851,755 | ) | ($14,993,614 | ) | |||
Class C | |||||||||||
Shares sold | 45,413 | $643,966 | 87,750 | $1,330,294 | |||||||
Reinvestment of distributions | 3,763 | 49,178 | 7,788 | 117,825 | |||||||
Shares redeemed | (145,293 | ) | (2,165,043 | ) | (170,651 | ) | (2,572,652 | ) | |||
Converted to Class A | (253,136 | ) | (3,509,724 | ) | — | — | |||||
Net decrease | (349,253 | ) | ($4,981,623 | ) | (75,113 | ) | ($1,124,533 | ) | |||
Class I | |||||||||||
Shares sold | 3,206,610 | $57,269,370 | 1,107,355 | $20,830,133 | |||||||
Reinvestment of distributions | 52,583 | 852,895 | 66,383 | 1,242,701 | |||||||
Shares redeemed | (2,484,203 | ) | (45,039,359 | ) | (3,142,001 | ) | (58,433,954 | ) | |||
Converted from Class Y | — | — | 1,450,354 | 27,136,415 | |||||||
Net increase (decrease) | 774,990 | $13,082,906 | (517,909 | ) | ($9,224,705 | ) | |||||
Class R6 (1) | |||||||||||
Shares sold | 2,547,114 | $47,468,909 | — | $— | |||||||
Shares redeemed | (9,283 | ) | ($177,904 | ) | — | — | |||||
Net increase | 2,537,831 | $47,291,005 | — | $— | |||||||
Class Y (2) | |||||||||||
Shares sold | — | $— | 138,696 | $2,537,558 | |||||||
Reinvestment of distributions | — | — | — | — | |||||||
Shares redeemed | — | — | (52,997 | ) | (970,625 | ) | |||||
Converted to Class I | — | — | (1,464,783 | ) | (27,136,415 | ) | |||||
Net decrease | — | $— | (1,379,084 | ) | ($25,569,482 | ) | |||||
(1) For the period from the commencement of operations, March 7, 2019, to September 30, 2019. | |||||||||||
(2) Effective December 8, 2017, Class Y shares of the Fund converted to Class I shares at net asset value. Thereafter, Class Y shares were terminated. |
NOTE 9 — RISKS ASSOCIATED WITH FOREIGN INVESTMENTS
Investing in foreign securities involves additional risks relating to political, social, and economic developments abroad. Other risks result from differences between regulations that apply to U.S. and foreign issuers and markets, and the potential for foreign markets to be less liquid and more volatile than U.S. markets. Securities that trade or are denominated in currencies other than the U.S. dollar may be adversely affected by fluctuations in currency exchange rates.
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NOTE 10 — CAPITAL COMMITMENTS
In connection with certain venture capital and/or limited partnership 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 totaled $26,470 at September 30, 2019. The Fund had sufficient cash and/or securities to cover these commitments.
The Fund’s unfunded capital commitments by investment at September 30, 2019 were as follows:
Name of Investment | Unfunded Commitment at 9/30/19 | ||
Africa Renewable Energy Fund LP | $8,462 | ||
Blackstone Clean Technology Partners LP | 508 | ||
SEAF India International Growth Fund LP | 17,500 | ||
Total | $26,470 |
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors
Calvert World Values Fund, Inc.:
Calvert World Values Fund, Inc.:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Calvert International Equity Fund (the Fund), a series of Calvert World Values Fund, Inc., including the schedule of investments, as of September 30, 2019, the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two‑year period then ended, and the related notes (collectively, the financial statements) and the financial highlights for each of the years or periods in the five‑year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of September 30, 2019, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two‑year period then ended, and the financial highlights for each of the years or periods in the five‑year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of September 30, 2019, by correspondence with the custodian and brokers. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
![kpmglogoa10.jpg](https://capedge.com/proxy/N-CSR/0001628280-19-014532/kpmglogoa10.jpg)
We have served as the auditor of one or more of the Calvert Funds since 2002.
Philadelphia, Pennsylvania
November 20, 2019
28 www.calvert.com CALVERT INTERNATIONAL EQUITY FUND ANNUAL REPORT
FEDERAL TAX INFORMATION
The Form 1099-DIV you receive in February 2020 will show the tax status of all distributions paid to your account in calendar year 2019. Shareholders are advised to consult their own tax adviser with respect to the tax consequences of their investment in the Fund. As required by the Internal Revenue Code and/or regulations, shareholders must be notified regarding the status of qualified dividend income for individuals and the foreign tax credit.
Qualified Dividend Income. For the fiscal year ended September 30, 2019, the Fund designates approximately $4,198,881, or up to the maximum amount of such dividends allowable pursuant to the Internal Revenue Code, as qualified dividend income eligible for the reduced tax rate of 15%.
Foreign Tax Credit. For the fiscal year ended September 30, 2019, the Fund paid foreign taxes of $295,431 and recognized foreign source income of $4,424,883.
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MANAGEMENT AND ORGANIZATION
Fund Management. The Directors of Calvert World Values Fund, Inc. (the Corporation) are responsible for the overall management and supervision of the Corporation’s affairs. The Directors and officers of the Corporation are listed below. Except as indicated, each individual has held the office shown or other offices in the same company for the last five years. Directors and officers of the Corporation hold indefinite terms of office. The “Independent Directors” consist of those Directors who are not “interested persons” of the Corporation, as that term is defined under the 1940 Act. The business address of each Director and officer, with the exception of Ms. Gemma and Mr. Kirchner, is 1825 Connecticut Avenue NW, Suite 400, Washington, DC 20009. As used below, “CRM” refers to Calvert Research and Management. Each Director oversees 39 funds in the Calvert fund complex. Each officer serves as an officer of certain other Calvert funds.
Name and Year of Birth | Corporation Position(s) | Position Start Date | Principal Occupation(s) and Other Directorships During Past Five Years and Other Relevant Experience |
Interested Director | |||
John H. Streur(1) 1960 | Director & President | 2015 | President and Chief Executive Officer of Calvert Research and Management (since December 31, 2016). President and Chief Executive Officer of Calvert Investments, Inc. (January 2015 - December 2016); Chief Executive Officer of Calvert Investment Distributors, Inc. (August 2015 - December 2016); Chief Compliance Officer of Calvert Investment Management, Inc. (August 2015 - April 2016); President and Director, Portfolio 21 Investments, Inc. (through October 2014); President, Chief Executive Officer and Director, Managers Investment Group LLC (through January 2012); President and Director, The Managers Funds and Managers AMG Funds (through January 2012). Other Directorships in the Last Five Years. Portfolio 21 Investments, Inc. (asset management) (through October 2014); Managers Investment Group LLC (asset management) (through January 2012); The Managers Funds (asset management) (through January 2012); Managers AMG Funds (asset management) (through January 2012); Calvert Impact Capital, Inc. |
Independent Directors | |||
Richard L. Baird, Jr. 1948 | Director | 2005 | Regional Disaster Recovery Lead, American Red Cross of Greater Pennsylvania (since 2017). Volunteer, American Red Cross (since 2015). Former President and CEO of Adagio Health Inc. (retired in 2014) in Pittsburgh, PA. Other Directorships in the Last Five Years. None. |
Alice Gresham Bullock 1950 | Chair & Director | 2016 | Professor Emerita at Howard University School of Law. Dean Emerita of Howard University School of Law and Deputy Director of the Association of American Law Schools (1992-1994). Other Directorships in the Last Five Years. None. |
Cari M. Dominguez 1949 | Director | 2016 | Former Chair of the U.S. Equal Employment Opportunity Commission. Other Directorships in the Last Five Years. Manpower, Inc. (employment agency); Triple S Management Corporation (managed care); National Association of Corporate Directors. |
John G. Guffey, Jr.(2) 1948 | Director | 1992 | President of Aurora Press Inc., a privately held publisher of trade paperbacks (since January 1997). Other Directorships in the Last Five Years. Calvert Impact Capital, Inc. (through December 31, 2018); Calvert Ventures, LLC. |
Miles D. Harper, III 1962 | Director | 2005 | Partner, Carr Riggs & Ingram (public accounting firm) since October 2014. Partner, Gainer Donnelly & Desroches (public accounting firm) (now Carr Riggs & Ingram), November 1999 - September 2014). Other Directorships in the Last Five Years. Bridgeway Funds (9) (asset management). |
Joy V. Jones 1950 | Director | 2005 | Attorney. Other Directorships in the Last Five Years. Conduit Street Restaurants SUD 2 Limited; Palm Management Restaurant Corporation. |
Anthony A. Williams 1951 | Director | 2016 | CEO and Executive Director of the Federal City Council (July 2012 to present); Senior Adviser and Independent Consultant for McKenna Long & Aldridge LLP (September 2011 to present); Executive Director of Global Government Practice at the Corporate Executive Board (January 2010 to January 2012). Other Directorships in the Last Five Years. Freddie Mac; Evoq Properties/ Meruelo Maddux Properties, Inc. (real estate management); Weston Solutions, Inc. (environmental services); Bipartisan Policy Center’s Debt Reduction Task Force; Chesapeake Bay Foundation; Catholic University of America; Urban Institute (research organization). |
30 www.calvert.com CALVERT INTERNATIONAL EQUITY FUND ANNUAL REPORT (Unaudited)
Principal Officers who are not Directors | |||
Name and Year of Birth | Corporation Position(s) | Position Start Date | Principal Occupation(s) During Past Five Years |
Hope L. Brown 1973 | Chief Compliance Officer | 2014 | Chief Compliance Officer of 39 registered investment companies advised by CRM (since 2014). Vice President and Chief Compliance Officer, Wilmington Funds (2012-2014). |
Maureen A. Gemma(3) 1960 | Secretary, Vice President and Chief Legal Officer | 2016 | Vice President of CRM and officer of 39 registered investment companies advised by CRM (since 2016). Also Vice President of Eaton Vance and certain of its affiliates and officer of 162 registered investment companies advised or administered by Eaton Vance. |
James F. Kirchner(3) 1967 | Treasurer | 2016 | Vice President of CRM and officer of 39 registered investment companies advised by CRM (since 2016). Also Vice President of Eaton Vance and certain of its affiliates and officer of 162 registered investment companies advised or administered by Eaton Vance. |
(1) | Mr. Streur is an interested person of the Fund because of his positions with the Fund’s adviser and certain affiliates. |
(2) | Mr. Guffey is currently married to Rebecca L. Adamson, who serves as a member of the Advisory Council. |
(3) | The business address for Ms. Gemma and Mr. Kirchner is Two International Place, Boston, MA 02110. |
The SAI for the Fund includes additional information about the Directors and officers of the Fund and can be obtained without charge on Calvert’s website at www.calvert.com or by calling 1-800-368-2745.
www.calvert.com CALVERT INTERNATIONAL EQUITY FUND ANNUAL REPORT (Unaudited) 31
IMPORTANT NOTICES
Privacy. The Calvert Funds and Calvert Research and Management are committed to ensuring your financial privacy. Each of the financial institutions identified below has in effect the following policy (“Privacy Policy”) with respect to nonpublic personal information about its customers:
• | Only such information received from you, through application forms or otherwise, and information about your Calvert fund transactions will be collected. This may include information such as name, address, social security number, tax status, account balances and transactions. |
• | None of such information about you (or former customers) will be disclosed to anyone, except as permitted by law (which includes disclosure to employees necessary to service your account). In the normal course of servicing a customer’s account, Calvert Research and Management may share information with unaffiliated third parties that perform various required services such as transfer agents, custodians and broker-dealers. |
• | Policies and procedures (including physical, electronic and procedural safeguards) are in place that are designed to protect the confidentiality of such information. |
• | The Funds reserve the right to change this Privacy Policy at any time upon proper notification to you. Customers may want to review the Funds’ Privacy Policy periodically for changes by accessing the link on our homepage: www.calvert.com. |
Our pledge of privacy applies to the following entities: the Calvert Family of Funds, Calvert Research and Management and their affiliated service providers, Eaton Vance Management and Eaton Vance Distributors, Inc. In addition, our Privacy Policy applies only to those Calvert customers who are individuals and who have a direct relationship with us. If a customer’s account (i.e., fund shares) is held in the name of a third-party financial advisor/broker-dealer, it is likely that only such advisor’s privacy policies apply to the customer. This notice supersedes all previously issued privacy disclosures. For more information about Calvert’s Privacy Policy, please call 1-800-368-2745.
Delivery of Shareholder Documents. The Securities and Exchange Commission (SEC) permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called “householding” and it helps eliminate duplicate mailings to shareholders. Calvert funds, or your financial intermediary, may household the mailing of your documents indefinitely unless you instruct Calvert funds, or your financial intermediary, otherwise. If you would prefer that your Calvert fund documents not be householded, please contact Calvert funds at 1-800-368-2745, or contact your financial intermediary. Your instructions that householding not apply to delivery of your Calvert fund documents will typically be effective within 30 days of receipt by Calvert funds or your financial intermediary. Separate statements will be generated for each separate account and will be householded as described above.
Portfolio Holdings. Each Calvert fund files a schedule of portfolio holdings on Part F to Form N-PORT with the SEC for the first and third quarters of each fiscal year. The Form N-PORT will be available on the Calvert funds’ website at www.calvert.com, by calling Calvert funds at 1-800-368-2745 or in the EDGAR database on the SEC’s website at www.sec.gov.
Proxy Voting. The Proxy Voting Guidelines that each Calvert fund uses to determine how to vote proxies relating to portfolio securities is provided as an Appendix to the fund’s Statement of Additional Information. The Statement of Additional Information can be obtained free of charge by calling the Calvert funds at 1-800-368-2745, by visiting the Calvert funds’ website at www.calvert.com or visiting the SEC’s website at www.sec.gov. Information regarding how a Calvert fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available by calling Calvert funds, by visiting the Calvert funds’ website at www.calvert.com or by visiting the SEC’s website at www.sec.gov.
32 www.calvert.com CALVERT INTERNATIONAL EQUITY FUND ANNUAL REPORT
CALVERT INTERNATIONAL EQUITY FUND | |
Investment Adviser and Administrator Calvert Research and Management 1825 Connecticut Avenue NW, Suite 400 Washington, DC 20009 | Transfer Agent DST Asset Manager Solutions, Inc. 2000 Crown Colony Drive Quincy, MA 02169 |
Investment Sub-Adviser Eaton Vance Advisers International Ltd. 125 Old Broad Street London, EC2N 1AR | Independent Registered Public Accounting Firm KPMG LLP 1601 Market Street Philadelphia, PA 19103-2499 |
Principal Underwriter* Eaton Vance Distributors, Inc. Two International Place Boston, MA 02110 (617) 482-8260 | Fund Offices 1825 Connecticut Avenue NW, Suite 400 Washington, DC 20009 |
Custodian State Street Bank and Trust Company State Street Financial Center, One Lincoln Street Boston, MA 02111 |
* FINRA BrokerCheck. Investors may check the background of their Investment Professional by contacting the Financial Industry Regulatory Authority (FINRA). FINRA BrokerCheck is a free tool to help investors check the professional background of current and former FINRA-registered securities firms and brokers. FINRA BrokerCheck is available by calling 1-800-289-9999 and at www.FINRA.org. The FINRA BrokerCheck brochure describing this program is available to investors at www.FINRA.org.
Printed on recycled paper. | |
24207 9.30.19 | ![]() |
Calvert Mid-Cap Fund |
Important Note. Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semi-annual shareholder reports will no longer be sent by mail unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (calvert.com/prospectus), and you will be notified by mail each time a report is posted and provided with a website address to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you are a direct investor, you may elect to receive shareholder reports and other communications from the Fund electronically by signing up for e-Delivery at calvert.com. If you own your shares through a financial intermediary (such as a broker-dealer or bank), you must contact your financial intermediary to sign up.
You may elect to receive all future Fund shareholder reports in paper free of charge. If you are a direct investor, you can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by calling 1-800-368-2745. If you own these shares through a financial intermediary, you must contact your financial intermediary or follow instructions included with this disclosure, if applicable, to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all Calvert funds held directly or to all funds held through your financial intermediary, as applicable.
Annual Report September 30, 2019 E-Delivery Sign-Up — Details Inside | ![]() |
Commodity Futures Trading Commission Registration. Effective December 31, 2012, the Commodity Futures Trading Commission (“CFTC”) adopted certain regulatory changes that subject registered investment companies and advisers to regulation by the CFTC if a fund invests more than a prescribed level of its assets in certain CFTC-regulated instruments (including futures, certain options and swap agreements) or markets itself as providing investment exposure to such instruments. The Fund and its adviser have claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act. Accordingly, neither the Fund nor the adviser is subject to CFTC regulation. Fund shares are not insured by the FDIC and are not deposits or other obligations of, or guaranteed by, any depository institution. Shares are subject to investment risks, including possible loss of principal invested. This report must be preceded or accompanied by a current summary prospectus or prospectus. Before investing, investors should consider carefully the investment objective, risks, and charges and expenses of a mutual fund. This and other important information is contained in the summary prospectus and prospectus, which can be obtained from a financial intermediary. Prospective investors should read the prospectus carefully before investing. For further information, please call 1-800-368-2745. |
Choose Planet-friendly E-delivery! Sign up now for on-line statements, prospectuses, and fund reports. In less than five minutes you can help reduce paper mail and lower fund costs. Just go to www.calvert.com. If you already have an online account with the Calvert funds, click on Login to access your Account and select the documents you would like to receive via e-mail. If you’re new to online account access, click on Login, then Register to create your user name and password. Once you’re in, click on the E-delivery sign-up on the Account Portfolio page and follow the quick, easy steps. Note: If your shares are not held directly with the Calvert funds but through a brokerage firm, you must contact your broker for electronic delivery options available through their firm. |
TABLE OF CONTENTS | ||||
Management’s Discussion of Fund Performance | ||||
Performance | ||||
Fund Profile | ||||
Endnotes and Additional Disclosures | ||||
Fund Expenses | ||||
Financial Statements | ||||
Report of Independent Registered Public Accounting Firm | ||||
Federal Tax Information | ||||
Management and Organization | ||||
Important Notices |
MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE1
Economic and Market Conditions
In the midst of a yearlong trade war with China and slowing economic growth worldwide, U.S. stocks delivered mixed returns during the 12-month period ended September 30, 2019.
U.S. stocks opened the period on the downside as investors worried that President Trump’s imposition of broad import tariffs might provoke a wider trade dispute with China, the world’s second-largest economy behind the U.S.
With U.S. economic data largely positive throughout 2018, the U.S. Federal Reserve Board (the Fed) raised its benchmark federal funds rate four times ─ from a low range of 1.50%-1.75% to 2.25%-2.50% ─ with the last quarter-point increase on December 19, 2018.
U.S. stocks turned higher in early 2019 as trade fears eased and interest rates remained stable after the Fed signaled a slower pace for future rate hikes. However, around the same time, U.S. economic indicators began sending mixed signals. While the job market was robust during the period with the U.S. unemployment rate dipping below 4%, retail sales fell, raising concerns about consumer spending. Factory output also declined, dragged down by a large drop in auto production.
The U.S. equity market fluctuated through the spring of 2019. Heightened trade-conflict rhetoric drove stocks lower in May before easing tensions helped equities recover in June. Key economic indicators continued to be mixed, with job creation decelerating sharply in May.
After holding interest rates steady through the first half of 2019, the Fed cut its benchmark interest rate to 2.00%-2.25% on July 31 ─ its first reduction in over a decade ─ followed by a second interest-rate drop to 1.75%-2.00% on September 18. Lower rates are intended to help stimulate economic activity by making borrowing costs relatively more affordable.
After sliding in August, U.S. equities rebounded in early September before retreating in the final weeks of the period. During the 12-month period ended September 30, 2019, the blue-chip Dow Jones Industrial Average®2 gained 4.21%, while the broader U.S. equity market, as represented by the S&P 500® Index, rose 4.25%. The technology-laden Nasdaq Composite Index returned 0.52% during the period.
Large-cap U.S. stocks, as measured by the S&P 500® Index, generally outperformed their small-cap counterparts, as measured by the Russell 2000® Index, during the period. As a group, value stocks outpaced growth stocks in both large- and small-cap categories, as measured by the Russell growth and value indexes.
Fund Performance
For the 12-month period ended September 30, 2019, Calvert Mid-Cap Fund (the Fund) returned 6.56% for Class A shares at net asset value (NAV), outperforming its benchmark, the Russell Midcap® Index (the Index), which returned 3.19%.
Stock selection in the materials, industrials, and real estate sectors contributed to the Fund’s outperformance relative to the Index. Stock selection in the energy, information technology, and health care sectors detracted.
Ball Corp., an aluminum can manufacturer within the materials sector, was the largest individual contributor during the period. The stock benefited from strong growth in the company’s sales volume as demand for aluminum cans rose throughout the beverage industry. Investors also responded positively to the company’s announced plans to return capital to shareholders through share buybacks and dividends.
Xcel Energy, Inc., a regulated electric utility within the utilities sector, was also a top contributor. Its stock performed well as a result of the company’s well-executed renewable strategy and a supportive regulatory environment.
Extra Space Storage, Inc., the second-largest self-storage company in the U.S. within the real estate sector, was also a strong contributor during the period. The stock performed well throughout the year as the company expanded its business at existing properties and made some opportunistic capital acquisitions. The company also benefited from its large scale, which enabled it to provide data, analytics, and other value-added services across 38 states. The company owned or operated over 1,400 stores, 910,000 units, and 103 million square feet of rentable space during the period.
Core Laboratories NV, an oil field services and equipment provider within the energy sector, was the largest individual detractor during the period. Sustained reduced oil prices and capital expenditures across the energy sector weighed on the stock. By period-end, the stock was sold out of the Fund.
In the communication services sector, Eventbrite, Inc., a provider of event-management resources, was among the largest individual detractors. The company’s unsuccessful efforts to integrate Ticketfly ─ a ticket-distribution service ─ caused it to fall short of revenue forecasts. By period-end, the stock was sold out of the Fund.
Oceaneering International, Inc. (Oceaneering) was also a leading detractor. Within the energy sector, the company specializes in engineering services and products that support offshore drilling, including remotely operated vehicles and fully submergible products. Oceaneering was adversely affected by sustained reduced oil prices and capital expenditures across the energy sector during the period. By period-end, the stock was sold out of the Fund.
See Endnotes and Additional Disclosures in this report. Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or offering price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, the Fund’s current performance may be lower or higher than quoted. Returns are before taxes unless otherwise noted. For performance as of the most recent month-end, please refer to www.calvert.com. |
2 www.calvert.com CALVERT MID-CAP FUND ANNUAL REPORT (Unaudited)
PERFORMANCE
Performance2,3 | ||||||||||||||
Portfolio Manager Charles B. Gaffney of Calvert Research and Management | ||||||||||||||
% Average Annual Total Returns | Class Inception Date | Performance Inception Date | One Year | Five Years | Ten Years | |||||||||
Class A at NAV | 10/31/1994 | 10/31/1994 | 6.56 | % | 7.32 | % | 12.01 | % | ||||||
Class A with 4.75% Maximum Sales Charge | — | — | 1.49 | 6.29 | 11.46 | |||||||||
Class C at NAV | 10/31/1994 | 10/31/1994 | 5.77 | 6.52 | 11.14 | |||||||||
Class C with 1% Maximum Sales Charge | — | — | 4.81 | 6.52 | 11.14 | |||||||||
Class I at NAV | 06/03/2003 | 10/31/1994 | 6.85 | 7.77 | 12.63 | |||||||||
Russell Midcap® Index | — | — | 3.19 | % | 9.10 | % | 13.06 | % | ||||||
% Total Annual Operating Expense Ratios4 | Class A | Class C | Class I | |||||||||||
Gross | 1.28 | % | 2.03 | % | 1.03 | % | ||||||||
Net | 1.18 | 1.93 | 0.93 |
Growth of $10,000 |
This graph shows the change in value of a hypothetical investment of $10,000 in Class A of the Fund for the period indicated. For comparison, the same investment is shown in the indicated index. |
![chart-3c85fed37480567082d.jpg](https://capedge.com/proxy/N-CSR/0001628280-19-014532/chart-3c85fed37480567082d.jpg)
Growth of Investment | Amount Invested | Period Beginning | At NAV | With Maximum Sales Charge | ||||
Class C | $10,000 | 09/30/2009 | $28,772 | N.A. | ||||
Class I | $250,000 | 09/30/2009 | $821,813 | N.A. |
See Endnotes and Additional Disclosures in this report.
Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or offering price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, the Fund’s current performance may be lower or higher than quoted. Returns are before taxes unless otherwise noted. For performance as of the most recent month-end, please refer to www.calvert.com.
www.calvert.com CALVERT MID-CAP FUND ANNUAL REPORT (Unaudited) 3
FUND PROFILE
SECTOR ALLOCATION (% of total investments) | TEN LARGEST HOLDINGS (% of net assets)5 | ||||||
Information Technology | 18.8 | % | Sempra Energy | 2.4 | % | ||
Financials | 14.2 | % | CMS Energy Corp. | 2.3 | % | ||
Industrials | 13.3 | % | Cognizant Technology Solutions Corp., Class A | 2.2 | % | ||
Consumer Discretionary | 11.4 | % | Xcel Energy, Inc. | 2.2 | % | ||
Real Estate | 10.7 | % | AvalonBay Communities, Inc. | 2.2 | % | ||
Health Care | 9.9 | % | Black Knight, Inc. | 2.1 | % | ||
Utilities | 8.3 | % | Extra Space Storage, Inc. | 2.0 | % | ||
Consumer Staples | 5.1 | % | National Retail Properties, Inc. | 2.0 | % | ||
Materials | 4.8 | % | Steel Dynamics, Inc. | 1.9 | % | ||
High Social Impact Investments | 1.5 | % | Fidelity National Information Services, Inc. | 1.9 | % | ||
Communication Services | 1.1 | % | Total | 21.2 | % | ||
Energy | 0.9 | % | |||||
Total | 100.0 | % |
See Endnotes and Additional Disclosures in this report.
4 www.calvert.com CALVERT MID-CAP FUND ANNUAL REPORT (Unaudited)
Endnotes and Additional Disclosures |
1 | The views expressed in this report are those of the portfolio manager(s) and are current only through the date stated on the cover. These views are subject to change at any time based upon market or other conditions, and Calvert and the Fund(s) disclaim any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions are based on many factors, may not be relied upon as an indication of trading intent on behalf of any Calvert fund. This commentary may contain statements that are not historical facts, referred to as “forward looking statements.” The Fund’s actual future results may differ significantly from those stated in any forward looking statement, depending on factors such as changes in securities or financial markets or general economic conditions, the volume of sales and purchases of Fund shares, the continuation of investment advisory, administrative and service contracts, and other risks discussed from time to time in the Fund’s filings with the Securities and Exchange Commission. |
2 | Dow Jones Industrial Average® is a price-weighted average of 30 blue-chip stocks that are generally the leaders in their industry. S&P 500® Index is an unmanaged index of large-cap stocks commonly used as a measure of U.S. stock market performance. S&P Dow Jones Indices are a product of S&P Dow Jones Indices LLC (“S&P DJI”) and have been licensed for use. S&P® and S&P 500® are registered trademarks of S&P DJI; Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); S&P DJI, Dow Jones and their respective affiliates do not sponsor, endorse, sell or promote the Fund, will not have any liability with respect thereto and do not have any liability for any errors, omissions, or interruptions of the S&P Dow Jones Indices. Nasdaq Composite Index is a market capitalization-weighted index of all domestic and international securities listed on Nasdaq. Source: Nasdaq, Inc. The information is provided by Nasdaq (with its affiliates, are referred to as the “Corporations”) and Nasdaq’s third party licensors on an “as is” basis and the Corporations make no guarantees and bear no liability of any kind with respect to the information or the Fund. Russell 2000® Index is an unmanaged index of 2,000 U.S. small-cap stocks. Russell Midcap® Index is an unmanaged index of U.S. mid-cap stocks. Unless otherwise stated, index returns do not reflect the effect of any applicable sales charges, commissions, expenses, taxes or leverage, as applicable. It is not possible to invest directly in an index. |
3 | Total Returns at NAV do not include applicable sales charges. If sales charges were deducted, the returns would be lower. Total Returns shown with maximum sales charge reflect the stated maximum sales charge. Unless otherwise stated, performance does not reflect the deduction of taxes on Fund distributions or redemptions of Fund shares. Performance since inception for an index, if presented, is the performance since the Fund’s or oldest share class’ inception, as applicable. |
Calvert Research and Management became the investment adviser to the Fund on December 31, 2016. Performance reflected prior to such date is that of the Fund’s former investment adviser.
4 | Source: Fund prospectus. Net expense ratios reflect a contractual expense reimbursement that continues through 1/31/20. Without the reimbursement, performance would have been lower. The expense ratios for the current reporting period can be found in the Financial Highlights section of this report. |
5 | Excludes cash and cash equivalents. |
Fund profile subject to change due to active management.
www.calvert.com CALVERT MID-CAP FUND ANNUAL REPORT (Unaudited) 5
FUND EXPENSES
Example
As a Fund shareholder, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases and redemption fees (if applicable); and (2) ongoing costs, including management fees; distribution and/or service fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of Fund investing and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (April 1, 2019 to September 30, 2019).
Actual Expenses
The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, 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 section 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 section of the table below provides information about hypothetical account values and hypothetical expenses based on the actual Fund expense ratio and an assumed rate of return of 5% per year (before expenses), which is not the actual Fund 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 this 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 (if applicable). Therefore, the second section 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 be higher.
BEGINNING ACCOUNT VALUE (4/1/19) | ENDING ACCOUNT VALUE (9/30/19) | EXPENSES PAID DURING PERIOD* (4/1/19 - 9/30/19) | ANNUALIZED EXPENSE RATIO | |
Actual | ||||
Class A | $1,000.00 | $1,073.70 | $6.13** | 1.18% |
Class C | $1,000.00 | $1,070.00 | $10.02** | 1.93% |
Class I | $1,000.00 | $1,075.10 | $4.84** | 0.93% |
Hypothetical | ||||
(5% return per year before expenses) | ||||
Class A | $1,000.00 | $1,019.15 | $5.97** | 1.18% |
Class C | $1,000.00 | $1,015.39 | $9.75** | 1.93% |
Class I | $1,000.00 | $1,020.41 | $4.71** | 0.93% |
* Expenses are equal to the Fund’s annualized expense ratio for the indicated Class, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period). The Example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on March 31, 2019. | ||||
** Absent a waiver and/or reimbursement of expenses by affiliates, expenses would be higher. |
6 www.calvert.com CALVERT MID-CAP FUND ANNUAL REPORT (Unaudited)
CALVERT MID-CAP FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2019
SHARES | VALUE ($) | |
COMMON STOCKS - 98.0% | ||
Aerospace & Defense - 2.4% | ||
CAE, Inc. | 85,600 | 2,174,809 |
Hexcel Corp. | 36,253 | 2,977,459 |
5,152,268 | ||
Auto Components - 1.6% | ||
Aptiv plc | 40,300 | 3,523,026 |
Banks - 0.7% | ||
First Republic Bank | 14,725 | 1,423,908 |
Building Products - 2.2% | ||
Fortune Brands Home & Security, Inc. | 45,100 | 2,466,970 |
Trex Co., Inc. (1)(2) | 25,800 | 2,345,994 |
4,812,964 | ||
Capital Markets - 4.5% | ||
Cboe Global Markets, Inc. | 28,100 | 3,228,971 |
Northern Trust Corp. | 33,000 | 3,079,560 |
SEI Investments Co. | 41,000 | 2,429,455 |
Tradeweb Markets, Inc., Class A | 29,531 | 1,092,056 |
9,830,042 | ||
Chemicals - 1.7% | ||
Sherwin-Williams Co. (The) | 6,900 | 3,794,103 |
Commercial Services & Supplies - 2.1% | ||
Republic Services, Inc. | 31,600 | 2,734,980 |
Tetra Tech, Inc. | 21,100 | 1,830,636 |
4,565,616 | ||
Consumer Finance - 1.4% | ||
Discover Financial Services | 38,300 | 3,105,747 |
Containers & Packaging - 1.1% | ||
Ball Corp. | 31,922 | 2,324,241 |
Diversified Consumer Services - 3.9% | ||
Bright Horizons Family Solutions, Inc. (1) | 15,328 | 2,337,520 |
Grand Canyon Education, Inc. (1) | 30,700 | 3,014,740 |
ServiceMaster Global Holdings, Inc. (1) | 58,549 | 3,272,889 |
8,625,149 |
www.calvert.com CALVERT MID-CAP FUND ANNUAL REPORT 7
SHARES | VALUE ($) | |
COMMON STOCKS - CONT’D | ||
Electric Utilities - 2.2% | ||
Xcel Energy, Inc. | 75,200 | 4,879,728 |
Electrical Equipment - 1.5% | ||
AMETEK, Inc. | 34,632 | 3,179,910 |
Electronic Equipment, Instruments & Components - 1.4% | ||
CDW Corp. | 24,200 | 2,982,408 |
Energy Equipment & Services - 0.9% | ||
TechnipFMC plc | 85,402 | 2,061,604 |
Equity Real Estate Investment Trusts (REITs) - 10.6% | ||
AvalonBay Communities, Inc. | 22,032 | 4,744,151 |
Equity Residential | 27,800 | 2,398,028 |
Extra Space Storage, Inc. | 38,282 | 4,472,103 |
Lamar Advertising Co., Class A | 37,400 | 3,064,182 |
Mid-America Apartment Communities, Inc. | 32,300 | 4,199,323 |
National Retail Properties, Inc. | 78,792 | 4,443,869 |
23,321,656 | ||
Food & Staples Retailing - 1.3% | ||
BJ’s Wholesale Club Holdings, Inc. (1) | 70,000 | 1,810,900 |
Performance Food Group Co. (1) | 24,100 | 1,108,841 |
2,919,741 | ||
Food Products - 2.3% | ||
Conagra Brands, Inc. | 112,000 | 3,436,160 |
Nomad Foods Ltd. (1) | 78,200 | 1,603,100 |
5,039,260 | ||
Health Care Equipment & Supplies - 3.3% | ||
Cooper Cos., Inc. (The) | 8,700 | 2,583,900 |
Haemonetics Corp. (1) | 11,600 | 1,463,224 |
Teleflex, Inc. | 9,225 | 3,134,194 |
7,181,318 | ||
Health Care Providers & Services - 3.7% | ||
Amedisys, Inc. (1) | 16,800 | 2,200,968 |
Centene Corp. (1) | 80,900 | 3,499,734 |
Chemed Corp. | 5,500 | 2,296,635 |
7,997,337 | ||
8 www.calvert.com CALVERT MID-CAP FUND ANNUAL REPORT
SHARES | VALUE ($) | |
COMMON STOCKS - CONT’D | ||
Household Products - 1.5% | ||
Clorox Co. (The) | 20,950 | 3,181,676 |
Independent Power and Renewable Electricity Producers - 1.3% | ||
NextEra Energy Partners LP | 54,900 | 2,900,916 |
Insurance - 7.6% | ||
Alleghany Corp. (1) | 3,638 | 2,902,251 |
Allstate Corp. (The) | 23,800 | 2,586,584 |
American Financial Group, Inc. | 22,383 | 2,414,006 |
Assurant, Inc. | 27,700 | 3,485,214 |
First American Financial Corp. | 49,571 | 2,925,185 |
RLI Corp. | 24,400 | 2,267,004 |
16,580,244 | ||
Interactive Media & Services - 1.1% | ||
IAC/InterActiveCorp (1) | 10,800 | 2,354,076 |
IT Services - 9.0% | ||
Amdocs Ltd. | 21,289 | 1,407,416 |
Black Knight, Inc. (1) | 74,800 | 4,567,288 |
Cognizant Technology Solutions Corp., Class A | 81,000 | 4,881,465 |
CSG Systems International, Inc. | 55,000 | 2,842,400 |
Fidelity National Information Services, Inc. | 31,800 | 4,221,768 |
GoDaddy, Inc., Class A (1) | 26,500 | 1,748,470 |
19,668,807 | ||
Life Sciences Tools & Services - 1.8% | ||
Agilent Technologies, Inc. | 50,500 | 3,869,815 |
Machinery - 2.3% | ||
Fortive Corp. | 40,317 | 2,764,134 |
Xylem, Inc. | 27,800 | 2,213,436 |
4,977,570 | ||
Metals & Mining - 1.9% | ||
Steel Dynamics, Inc. | 143,000 | 4,261,400 |
Multi-Utilities - 4.7% | ||
CMS Energy Corp. | 79,971 | 5,114,145 |
Sempra Energy | 35,747 | 5,276,615 |
10,390,760 | ||
Pharmaceuticals - 1.1% | ||
Jazz Pharmaceuticals plc (1) | 19,600 | 2,511,544 |
www.calvert.com CALVERT MID-CAP FUND ANNUAL REPORT 9
SHARES | VALUE ($) | |
COMMON STOCKS - CONT’D | ||
Professional Services - 2.8% | ||
IHS Markit Ltd. (1) | 48,200 | 3,223,616 |
Verisk Analytics, Inc. | 19,000 | 3,004,660 |
6,228,276 | ||
Semiconductors & Semiconductor Equipment - 3.6% | ||
Analog Devices, Inc. | 19,200 | 2,145,216 |
NXP Semiconductors NV | 24,400 | 2,662,528 |
Skyworks Solutions, Inc. | 39,850 | 3,158,112 |
7,965,856 | ||
Software - 4.7% | ||
ACI Worldwide, Inc. (1) | 72,000 | 2,255,400 |
ANSYS, Inc. (1) | 15,600 | 3,453,216 |
CDK Global, Inc. | 61,800 | 2,971,962 |
RealPage, Inc. (1) | 25,300 | 1,590,358 |
10,270,936 | ||
Specialty Retail - 3.3% | ||
Best Buy Co., Inc. | 48,300 | 3,332,217 |
National Vision Holdings, Inc. (1) | 80,300 | 1,932,821 |
Tiffany & Co. (2) | 21,100 | 1,954,493 |
7,219,531 | ||
Textiles, Apparel & Luxury Goods - 2.5% | ||
Columbia Sportswear Co. | 24,300 | 2,354,427 |
Gildan Activewear, Inc. | 88,100 | 3,127,550 |
5,481,977 | ||
Total Common Stocks (Cost $182,357,666) | 214,583,410 | |
PRINCIPAL AMOUNT ($) | VALUE ($) | |
HIGH SOCIAL IMPACT INVESTMENTS - 1.5% | ||
Calvert Impact Capital, Inc., Community Investment Notes, 1.50%, 12/15/19 (3)(4) | 2,619,488 | 2,605,631 |
ImpactAssets Inc., Global Sustainable Agriculture Notes, 3.39%, 11/3/20 (4)(5) | 309,000 | 306,794 |
ImpactAssets Inc., Microfinance Plus Notes, 1.98%, 11/3/20 (4)(5) | 398,000 | 388,854 |
Total High Social Impact Investments (Cost $3,326,488) | 3,301,279 | |
TOTAL INVESTMENTS (Cost $185,684,154) - 99.5% | 217,884,689 | |
Other assets and liabilities, net - 0.5% | 1,188,722 | |
NET ASSETS - 100.0% | 219,073,411 | |
10 www.calvert.com CALVERT MID-CAP FUND ANNUAL REPORT
NOTES TO SCHEDULE OF INVESTMENTS |
(1) Non-income producing security. |
(2) All or a portion of this security was on loan at September 30, 2019. The aggregate market value of securities on loan at September 30, 2019 was $3,384,827. |
(3) Affiliated company (see Note 7). |
(4) Restricted security. Total market value of restricted securities amounts to $3,301,279, which represents 1.5% of the net assets of the Fund as of September 30, 2019. |
(5) Notes carry an interest rate that varies by period and is contingent on the performance of the underlying portfolio of loans to borrowers. The coupon rate shown represents the rate in effect at September 30, 2019. |
RESTRICTED SECURITIES | ACQUISITION DATES | COST ($) |
Calvert Impact Capital, Inc., Community Investment Notes, 1.50%, 12/15/19 | 12/15/16 | 2,619,488 |
ImpactAssets Inc., Global Sustainable Agriculture Notes, 3.39%, 11/3/20 | 11/13/15 | 309,000 |
ImpactAssets Inc., Microfinance Plus Notes, 1.98%, 11/3/20 | 11/13/15 | 398,000 |
See notes to financial statements. |
www.calvert.com CALVERT MID-CAP FUND ANNUAL REPORT 11
CALVERT MID-CAP FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2019
ASSETS | |||
Investments in securities of unaffiliated issuers, at value (identified cost $183,064,666) - including $3,384,827 of securities on loan | $215,279,058 | ||
Investments in securities of affiliated issuers, at value (identified cost $2,619,488) | 2,605,631 | ||
Cash | 1,099,842 | ||
Cash denominated in foreign currency, at value (cost $6,041) | 6,041 | ||
Receivable for capital shares sold | 308,173 | ||
Dividends and interest receivable | 256,087 | ||
Interest receivable - affiliated | 31,652 | ||
Securities lending income receivable | 474 | ||
Receivable from affiliates | 17,015 | ||
Directors’ deferred compensation plan | 140,364 | ||
Other assets | 10,998 | ||
Total assets | 219,755,335 | ||
LIABILITIES | |||
Payable for capital shares redeemed | 224,899 | ||
Payable to affiliates: | |||
Investment advisory fee | 117,717 | ||
Administrative fee | 21,732 | ||
Distribution and service fees | 44,539 | ||
Sub-transfer agency fee | 18,435 | ||
Directors’ deferred compensation plan | 140,364 | ||
Accrued expenses | 114,238 | ||
Total liabilities | 681,924 | ||
NET ASSETS | $219,073,411 | ||
NET ASSETS CONSIST OF: | |||
Paid-in capital applicable to common stock | |||
(75,000,000 shares per class of $0.01 par value authorized) | $177,263,572 | ||
Distributable earnings | 41,809,839 | ||
Total | $219,073,411 | ||
NET ASSET VALUE PER SHARE | |||
Class A (based on net assets of $158,005,336 and 4,554,214 shares outstanding) | $34.69 | ||
Class C (based on net assets of $14,534,646 and 610,035 shares outstanding) | $23.83 | ||
Class I (based on net assets of $46,533,429 and 1,128,029 shares outstanding) | $41.25 | ||
OFFERING PRICE PER SHARE* | |||
Class A (100/95.25 of net asset value per share) | $36.42 | ||
* On sales of $50,000 or more, the offering price of Class A shares is reduced. | |||
See notes to financial statements. |
12 www.calvert.com CALVERT MID-CAP FUND ANNUAL REPORT
CALVERT MID-CAP FUND
STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 2019
INVESTMENT INCOME | |||
Dividend income (net of foreign taxes withheld of $25,304) | $3,310,174 | ||
Interest income | 33,028 | ||
Interest income - affiliated issuers | 39,292 | ||
Securities lending income, net | 35,704 | ||
Total investment income | 3,418,198 | ||
EXPENSES | |||
Investment advisory fee | 1,522,663 | ||
Administrative fee | 281,107 | ||
Distribution and service fees: | |||
Class A | 375,311 | ||
Class C | 151,007 | ||
Directors’ fees and expenses | 13,140 | ||
Custodian fees | 28,108 | ||
Transfer agency fees and expenses | 366,151 | ||
Accounting fees | 57,836 | ||
Professional fees | 40,211 | ||
Registration fees | 81,551 | ||
Reports to shareholders | 24,878 | ||
Miscellaneous | 31,497 | ||
Total expenses | 2,973,460 | ||
Waiver and/or reimbursement of expenses by affiliates | (257,419) | ||
Reimbursement of expenses-other | (5,681) | ||
Net expenses | 2,710,360 | ||
Net investment income | 707,838 | ||
REALIZED AND UNREALIZED GAIN (LOSS) | |||
Net realized gain (loss) on: | |||
Investment securities - unaffiliated issuers | 12,079,052 | ||
Foreign currency transactions | 1,385 | ||
12,080,437 | |||
Net change in unrealized appreciation (depreciation) on: | |||
Investment securities - unaffiliated issuers | (1,588,937 | ) | |
Investment securities - affiliated issuers | 84,767 | ||
Foreign currency | (4) | ||
(1,504,174 | ) | ||
Net realized and unrealized gain | 10,576,263 | ||
Net increase in net assets resulting from operations | $11,284,101 | ||
See notes to financial statements. |
www.calvert.com CALVERT MID-CAP FUND ANNUAL REPORT 13
CALVERT MID-CAP FUND
STATEMENTS OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS | Year Ended September 30, 2019 | Year Ended September 30, 2018 | |||||
Operations: | |||||||
Net investment income | $707,838 | $731,120 | |||||
Net realized gain | 12,080,437 | 15,315,659 | |||||
Net change in unrealized appreciation (depreciation) | (1,504,174 | ) | 20,029,304 | ||||
Net increase in net assets resulting from operations | 11,284,101 | 36,076,083 | |||||
Distributions to shareholders: | |||||||
Class A shares | (9,307,133 | ) | (14,823,284 | ) | |||
Class C shares | (1,293,432 | ) | (2,174,802 | ) | |||
Class I shares | (4,175,285 | ) | (6,706,763 | ) | |||
Total distributions to shareholders | (14,775,850 | ) | (23,704,849 | ) | |||
Capital share transactions: | |||||||
Class A shares | 882,077 | (10,019,150 | ) | ||||
Class C shares | (2,030,602 | ) | (1,216,780 | ) | |||
Class I shares | (43,573,385 | ) | 19,681,532 | ||||
Class Y shares (1) | — | (12,283,707 | ) | ||||
Net decrease in net assets from capital share transactions | (44,721,910 | ) | (3,838,105 | ) | |||
TOTAL INCREASE (DECREASE) IN NET ASSETS | (48,213,659 | ) | 8,533,129 | ||||
NET ASSETS | |||||||
Beginning of year | 267,287,070 | 258,753,941 | |||||
End of year | $219,073,411 | $267,287,070 | |||||
(1) Effective December 8, 2017, Class Y shares of the Fund converted to Class I shares at net asset value. Thereafter, Class Y shares were terminated. | |||||||
See notes to financial statements. |
14 www.calvert.com CALVERT MID-CAP FUND ANNUAL REPORT
CALVERT MID-CAP FUND
FINANCIAL HIGHLIGHTS
Year Ended September 30, | |||||||||||||||
CLASS A SHARES | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||
Net asset value, beginning | $34.84 | $33.40 | $29.68 | $33.41 | $36.99 | ||||||||||
Income from investment operations: | |||||||||||||||
Net investment income (loss) (1) | 0.09 | 0.07 | 0.20 | 0.02 | (2) | (0.16) | |||||||||
Net realized and unrealized gain (loss) | 1.85 | 4.59 | 3.68 | (0.67) | 1.91 | ||||||||||
Total from investment operations | 1.94 | 4.66 | 3.88 | (0.65) | 1.75 | ||||||||||
Distributions from: | |||||||||||||||
Net investment income | (0.08) | (0.04) | (0.15) | — | — | ||||||||||
Net realized gain | (2.01) | (3.18) | (0.01) | (3.08) | (5.33) | ||||||||||
Total distributions | (2.09) | (3.22) | (0.16) | (3.08) | (5.33) | ||||||||||
Total increase (decrease) in net asset value | (0.15) | 1.44 | 3.72 | (3.73) | (3.58) | ||||||||||
Net asset value, ending | $34.69 | $34.84 | $33.40 | $29.68 | $33.41 | ||||||||||
Total return (3) | 6.56 | % | 15.04 | % | 13.11 | % | (2.08 | %) | 4.90 | % | |||||
Ratios to average net assets: (4) | |||||||||||||||
Total expenses | 1.30 | % | 1.28 | % | 1.34 | % | 1.37 | % | 1.41 | % | |||||
Net expenses | 1.19 | % | 1.21 | % | 1.21 | % | 1.31 | % | 1.41 | % | |||||
Net investment income (loss) | 0.27 | % | 0.22 | % | 0.64 | % | 0.07 | % | (2) | (0.43 | %) | ||||
Portfolio turnover | 83 | % | 62 | % | 162 | % | 199 | % | 74 | % | |||||
Net assets, ending (in thousands) | $158,005 | $157,046 | $159,951 | $192,402 | $223,328 | ||||||||||
(1) Computed using average shares outstanding. | |||||||||||||||
(2) Amount includes a non-recurring refund for overbilling of prior years’ custody out-of-pocket fees. This amounted to $0.001 per share and 0% of average net assets. | |||||||||||||||
(3) Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges, if any. | |||||||||||||||
(4) Total expenses do not reflect amounts reimbursed and/or waived by the adviser and certain of its affiliates, if applicable. Net expenses are net of all reductions and represent the net expenses paid by the Fund. | |||||||||||||||
See notes to financial statements. |
www.calvert.com CALVERT MID-CAP FUND ANNUAL REPORT 15
CALVERT MID-CAP FUND
FINANCIAL HIGHLIGHTS
Year Ended September 30, | |||||||||||||||
CLASS C SHARES | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||
Net asset value, beginning | $24.65 | $24.55 | $21.87 | $25.62 | $29.76 | ||||||||||
Income from investment operations: | |||||||||||||||
Net investment loss (1) | (0.11) | (0.12) | (0.03) | (0.16) | (2) | (0.34) | |||||||||
Net realized and unrealized gain (loss) | 1.23 | 3.27 | 2.72 | (0.51) | 1.53 | ||||||||||
Total from investment operations | 1.12 | 3.15 | 2.69 | (0.67) | 1.19 | ||||||||||
Distributions from: | |||||||||||||||
Net realized gain | (1.94) | (3.05) | (0.01) | (3.08) | (5.33) | ||||||||||
Total distributions | (1.94) | (3.05) | (0.01) | (3.08) | (5.33) | ||||||||||
Total increase (decrease) in net asset value | (0.82) | 0.10 | 2.68 | (3.75) | (4.14) | ||||||||||
Net asset value, ending | $23.83 | $24.65 | $24.55 | $21.87 | $25.62 | ||||||||||
Total return (3) | 5.77 | % | 14.20 | % | 12.29 | % | (2.87 | %) | 4.09 | % | |||||
Ratios to average net assets: (4) | |||||||||||||||
Total expenses | 2.05 | % | 2.03 | % | 2.18 | % | 2.16 | % | 2.21 | % | |||||
Net expenses | 1.94 | % | 1.96 | % | 1.96 | % | 2.09 | % | 2.21 | % | |||||
Net investment loss | (0.49 | %) | (0.53 | %) | (0.12 | %) | (0.72 | %) | (2) | (1.23 | %) | ||||
Portfolio turnover | 83 | % | 62 | % | 162 | % | 199 | % | 74 | % | |||||
Net assets, ending (in thousands) | $14,535 | $17,043 | $18,146 | $22,885 | $29,837 | ||||||||||
(1) Computed using average shares outstanding. | |||||||||||||||
(2) Amount includes a non-recurring refund for overbilling of prior years’ custody out-of-pocket fees. This amounted to $0.001 per share and 0% of average net assets. | |||||||||||||||
(3) Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges, if any. | |||||||||||||||
(4) Total expenses do not reflect amounts reimbursed and/or waived by the adviser and certain of its affiliates, if applicable. Net expenses are net of all reductions and represent the net expenses paid by the Fund. | |||||||||||||||
See notes to financial statements. |
16 www.calvert.com CALVERT MID-CAP FUND ANNUAL REPORT
CALVERT MID-CAP FUND
FINANCIAL HIGHLIGHTS
Year Ended September 30, | |||||||||||||||
CLASS I SHARES | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||
Net asset value, beginning | $40.97 | $38.70 | $34.38 | $38.05 | $41.19 | ||||||||||
Income from investment operations: | |||||||||||||||
Net investment income (1) | 0.21 | 0.23 | 0.41 | 0.19 | (2) | 0.06 | |||||||||
Net realized and unrealized gain (loss) | 2.24 | 5.37 | 4.22 | (0.78) | 2.13 | ||||||||||
Total from investment operations | 2.45 | 5.60 | 4.63 | (0.59) | 2.19 | ||||||||||
Distributions from: | |||||||||||||||
Net investment income | (0.16) | (0.15) | (0.30) | — | — | ||||||||||
Net realized gain | (2.01) | (3.18) | (0.01) | (3.08) | (5.33) | ||||||||||
Total distributions | (2.17) | (3.33) | (0.31) | (3.08) | (5.33) | ||||||||||
Total increase (decrease) in net asset value | 0.28 | 2.27 | 4.32 | (3.67) | (3.14) | ||||||||||
Net asset value, ending | $41.25 | $40.97 | $38.70 | $34.38 | $38.05 | ||||||||||
Total return (3) | 6.85 | % | 15.48 | % | 13.53 | % | (1.64 | %) | 5.53 | % | |||||
Ratios to average net assets: (4) | |||||||||||||||
Total expenses | 1.05 | % | 1.03 | % | 0.88 | % | 0.86 | % | 0.83 | % | |||||
Net expenses | 0.91 | % | 0.86 | % | 0.86 | % | 0.84 | % | 0.83 | % | |||||
Net investment income | 0.54 | % | 0.59 | % | 1.14 | % | 0.55 | % | (2) | 0.14 | % | ||||
Portfolio turnover | 83 | % | 62 | % | 162 | % | 199 | % | 74 | % | |||||
Net assets, ending (in thousands) | $46,533 | $93,198 | $68,748 | $166,759 | $236,228 | ||||||||||
(1) Computed using average shares outstanding. | |||||||||||||||
(2) Amount includes a non-recurring refund for overbilling of prior years’ custody out-of-pocket fees. This amounted to $0.001 per share and 0% of average net assets. | |||||||||||||||
(3) Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges, if any. | |||||||||||||||
(4) Total expenses do not reflect amounts reimbursed and/or waived by the adviser and certain of its affiliates, if applicable. Net expenses are net of all reductions and represent the net expenses paid by the Fund. | |||||||||||||||
See notes to financial statements. |
www.calvert.com CALVERT MID-CAP FUND ANNUAL REPORT 17
NOTES TO FINANCIAL STATEMENTS
NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES
Calvert Mid-Cap Fund (the Fund) is a diversified series of Calvert World Values Fund, Inc. (the Corporation). The Corporation is a Maryland corporation registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company. The investment objective of the Fund is to seek to provide long-term capital appreciation by investing primarily in mid-cap stocks.
The Fund offers three classes of shares. Class A shares are generally sold subject to a sales charge imposed at time of purchase. A contingent deferred sales charge of 0.80% may apply to certain redemptions of Class A shares for accounts for which no sales charge was paid, if redeemed within 12 months of purchase. Class C shares are sold without a front-end sales charge, and with certain exceptions, are charged a contingent deferred sales charge of 1% on shares redeemed within 12 months of purchase. Class C shares are only available for purchase through a financial intermediary. Effective January 25, 2019, Class C shares generally automatically convert to Class A shares ten years after their purchase as described in the Fund’s prospectus. Class I shares are sold at net asset value, are not subject to a sales charge and are sold only to certain eligible investors. Each class represents a pro rata interest in the Fund, but votes separately on class-specific matters and is subject to different expenses.
The Fund applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services – Investment Companies (ASC 946). Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements.
A. Investment 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 (the Board) to value its investments wherever possible. Investments for which market quotations are not available or deemed not reliable are fair valued in good faith under the direction of the Board.
U.S. generally accepted accounting principles (U.S. 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 methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Valuation techniques used to value the Fund’s investments by major category are as follows:
Equity Securities. Equity securities (including warrants and rights) listed on a U.S. securities exchange generally are valued at the last sale or closing price as reported by an independent pricing service on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. Equity securities listed on the NASDAQ Global or Global Select Market are valued at the NASDAQ official closing price and are categorized as Level 1 in the hierarchy. Unlisted or listed securities for which closing sales prices or closing quotations are not available are valued at the mean between the latest available bid and ask prices and are categorized as Level 2 in the hierarchy.
Debt Securities. Debt securities are generally valued on the basis of valuations provided by third party pricing services, as derived from such services’ pricing models. Inputs to the models may include, but are not limited to, reported trades, executable bid and ask prices, broker/dealer quotations, prices or yields of securities with similar characteristics, interest rates, anticipated prepayments, benchmark curves or information pertaining to the issuer, as well as industry and economic events. Accordingly, debt securities are generally categorized as Level 2 in the hierarchy. Short-term debt securities of sufficient credit quality purchased with remaining maturities of sixty days or less for which a valuation from a third party pricing service is not readily available may be valued at amortized cost, which approximates fair value, and are categorized as Level 2 in the hierarchy.
Fair Valuation. If a market value cannot be determined for a security using the methodologies described above, or if, in the good faith opinion of the Fund’s adviser, the market value does not constitute a readily available market quotation, or if a significant event has occurred that would materially affect the value of the security, the security will be fair valued as determined in good faith by or at the direction of the Board in a manner that most fairly reflects the security’s “fair value”, which is the amount that the Fund might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of relevant factors, which are likely to vary from one pricing context to another. These factors may
18 www.calvert.com CALVERT MID-CAP FUND ANNUAL REPORT
include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issuer or of comparable companies or entities, quotations or relevant information obtained from broker/dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the company’s or entity’s financial statements, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.
The values assigned to fair value investments are based on available information and do not necessarily represent amounts that might ultimately be realized. Further, due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed, and the differences could be material.
The following table summarizes the market value of the Fund’s holdings as of September 30, 2019, based on the inputs used to value them:
Assets | Level 1 | Level 2 | Level 3 | Total | |||||||||
Common Stocks | $ | 214,583,410 | (1) | $ | — | $ | — | $ | 214,583,410 | ||||
High Social Impact Investments | — | 3,301,279 | — | 3,301,279 | |||||||||
Total Investments | $ | 214,583,410 | $ | 3,301,279 | $ | — | $ | 217,884,689 | |||||
(1) The level classification by major category of investments is the same as the category presentation in the Schedule of Investments. |
Level 3 investments at the beginning and/or end of the period in relation to net assets were not significant and accordingly, a reconciliation of Level 3 assets for the year ended September 30, 2019 is not presented.
B. Investment Transactions and Income: Investment transactions for financial statement purposes 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 for dividends received in cash and/or securities or, in the case of dividends on certain foreign securities, as soon as the Fund is informed of the ex-dividend date. Non-cash dividends are recorded at the fair value of the securities received. Withholding taxes on foreign dividends, if any, have been provided for in accordance with the Fund’s understanding of the applicable country’s tax rules and rates. Distributions received that represent a return of capital are recorded as a reduction of cost of investments. Distributions received that represent a capital gain are recorded as a realized gain. Interest income, which includes amortization of premium and accretion of discount on debt securities, is accrued as earned.
C. Share Class Accounting: Realized and unrealized gains and losses and net investment income and losses, other than class-specific expenses, are allocated daily to each class of shares based upon the relative net assets of each class to the total net assets of the Fund. Expenses arising in connection with a specific class are charged directly to that class.
D. 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. Recognized gains or losses on investment transactions attributable to changes in foreign currency exchange rates are recorded for financial statement purposes as net realized gains and losses on investments. That portion of unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed.
E. 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 (excluding Rule 144A securities) is included at the end of the Schedule of Investments.
F. 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 U.S. GAAP; accordingly, periodic reclassifications are made within the Fund’s capital accounts to reflect income and gains available for distribution under income tax regulations.
G. Estimates: The preparation of financial statements in conformity with U.S. GAAP 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 increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
H. Indemnifications: The Corporation’s By-Laws provide for indemnification for Directors or officers of the Corporation and certain other parties, to the fullest extent permitted by Maryland law and the 1940 Act, provided certain conditions are met. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain
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indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.
I. 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 from the date of filing.
NOTE 2 — RELATED PARTY TRANSACTIONS
The investment advisory fee is earned by Calvert Research and Management (CRM), a subsidiary of Eaton Vance Management (EVM), as compensation for investment advisory services rendered to the Fund. Pursuant to the investment advisory agreement, CRM receives a fee, payable monthly, at the annual rate of 0.65% of the Fund’s average daily net assets. For the year ended September 30, 2019, the investment advisory fee amounted to $1,522,663.
CRM has agreed to reimburse the Fund’s operating expenses to the extent that total annual operating expenses (relating to ordinary operating expenses only and excluding expenses such as brokerage commissions, acquired fund fees and expenses of unaffiliated funds, interest expense, taxes or litigation expenses) exceed 1.18%, 1.93% and 0.93% (1.21%, 1.96% and 0.86% prior to February 1, 2019) for Class A, Class C and Class I, respectively, of such class’ average daily net assets. The expense reimbursement agreement with CRM may be changed or terminated after January 31, 2020. For the year ended September 30, 2019, CRM waived or reimbursed expenses of $257,419.
The administrative fee is earned by CRM as compensation for administrative services rendered to the Fund. The fee is computed at an annual rate of 0.12% of the Fund’s average daily net assets attributable to Class A, Class C and Class I, and is payable monthly. For the year ended September 30, 2019, CRM was paid administrative fees of $281,107.
The Fund has in effect a distribution plan for Class A shares (Class A Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class A Plan, the Fund pays Eaton Vance Distributors, Inc. (EVD), an affiliate of CRM and the Fund’s principal underwriter, a distribution and service fee of 0.25% per annum of its average daily net assets attributable to Class A shares for distribution services and facilities provided to the Fund by EVD, as well as for personal services and/or the maintenance of shareholder accounts. The Fund also has in effect a distribution plan for Class C shares (Class C Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class C Plan, the Fund pays EVD amounts equal to 0.75% per annum of its average daily net assets attributable to Class C shares for providing ongoing distribution services and facilities to the Fund. In addition, pursuant to the Class C Plan, the Fund also makes payments of service fees to EVD, financial intermediaries and other persons in amounts equal to 0.25% per annum of its average daily net assets attributable to that class. Service fees paid or accrued are for personal services and/or the maintenance of shareholder accounts. Distribution and service fees paid or accrued for the year ended September 30, 2019 amounted to $375,311 and $151,007 for Class A shares and Class C shares, respectively.
The Fund was informed that EVD received $19,883 as its portion of the sales charge on sales of Class A shares for the year ended September 30, 2019. The Fund was also informed that EVD received less than $100 and $2,146 of contingent deferred sales charges paid by Class A and Class C shareholders, respectively, for the same period.
EVM provides sub-transfer agency and related services to the Fund pursuant to a Sub-Transfer Agency Support Services Agreement. For the year ended September 30, 2019, sub-transfer agency fees and expenses incurred to EVM amounted to $77,531 and are included in transfer agency fees and expenses on the Statement of Operations.
Each Director of the Fund who is not an employee of CRM or its affiliates receives a fee of $3,000 for each Board meeting attended in person and $2,000 for each Board meeting attended by phone plus an annual fee of $117,000, and $1,500 for each Committee meeting attended in person and $1,000 for each Committee meeting attended by phone plus an annual Committee fee of $2,500. The Board chair receives an additional $15,000 annual retainer and Committee chairs receive an additional $6,000 annual retainer. Eligible Directors may participate in a Deferred Compensation Plan (the Plan). Amounts deferred under the Plan are treated as though equal dollar amounts had been invested in shares of the Fund or other Calvert funds selected by the Directors. The Fund purchases shares of the funds selected equal to the dollar amounts deferred under the Plan, resulting in an asset equal to the deferred compensation liability. Obligations of the Plan are paid solely from the Fund’s assets. Directors’ fees are allocated to each of the Calvert funds served. Salaries and fees of officers and Directors of the Fund who are employees of CRM or its affiliates are paid by CRM. In addition, an advisory council was established to aid the Board and CRM in advancing the cause of responsible investing through original scholarship and thought leadership. The advisory council consists of CRM’s Chief Executive Officer and four additional members. Each member (other than CRM’s Chief Executive Officer) receives annual compensation of $75,000, which is being reimbursed by Calvert Investment Management, Inc. (CIM), the Calvert funds’ former investment adviser and Ameritas Holding Company, CIM’s parent company, through the end of 2019. For the year ended
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September 30, 2019, the Fund’s allocated portion of such expense and reimbursement was $5,681, which are included in miscellaneous expense and reimbursement of expenses-other, respectively, on the Statement of Operations.
NOTE 3 — INVESTMENT ACTIVITY
During the year ended September 30, 2019, the cost of purchases and proceeds from sales of investments, other than short-term securities, were $195,739,299 and $253,883,942, respectively.
NOTE 4 — DISTRIBUTIONS TO SHAREHOLDERS AND INCOME TAX INFORMATION
The tax character of distributions declared for the years ended September 30, 2019 and September 30, 2018 was as follows:
Year Ended September 30, | |||||||
2019 | 2018 | ||||||
Ordinary income | $ | 7,811,582 | $ | 10,271,655 | |||
Long-term capital gains | $ | 6,964,268 | $ | 13,433,194 |
During the year ended September 30, 2019, distributable earnings was decreased by $2,537,728 and paid-in capital was increased by $2,537,728 due to the Fund’s use of equalization accounting. Tax equalization accounting allows the Fund to treat as a distribution that portion of redemption proceeds representing a redeeming shareholder’s portion of undistributed taxable income and net capital gains. These reclassifications had no effect on the net assets or net asset value per share of the Fund.
As of September 30, 2019, the components of distributable earnings (accumulated loss) on a tax basis were as follows:
Undistributed ordinary income | $ | 48,819 | |
Undistributed long-term capital gains | $ | 10,385,466 | |
Net unrealized appreciation (depreciation) | $ | 31,375,554 |
The cost and unrealized appreciation (depreciation) of investments of the Fund at September 30, 2019, as determined on a federal income tax basis, were as follows:
Aggregate cost | $186,509,134 | ||
Gross unrealized appreciation | $34,725,677 | ||
Gross unrealized depreciation | (3,350,122) | ||
Net unrealized appreciation (depreciation) | $31,375,555 |
NOTE 5 — SECURITIES LENDING
To generate additional income, the Fund may lend its securities pursuant to a securities lending agency agreement with State Street Bank and Trust Company (SSBT), the securities lending agent. Security loans are subject to termination by the Fund at any time and, therefore, are not considered illiquid investments. The Fund requires that the loan be continuously collateralized by either cash or securities as collateral equal at all times to at least 102% of the market value of the domestic securities loaned and 105% of the market value of the international securities loaned (if applicable). The market value of securities loaned is determined daily and any additional required collateral is delivered to the Fund on the next business day. Cash collateral is generally invested in a money market fund registered under the 1940 Act that is managed by an affiliate of SSBT. Any gain or loss in the market price of the loaned securities that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Fund. Income earned on the investment of collateral, net of broker rebates and other expenses incurred by the securities lending agent, is split between the Fund and the securities lending agent on the basis of agreed upon contractual terms. Non-cash collateral, if any, is held by the lending agent on behalf of the Fund and cannot be sold or re-pledged by the Fund; accordingly, such collateral is not reflected in the Statement of Assets and Liabilities.
The risks associated with lending portfolio securities include, but are not limited to, possible delays in receiving additional collateral or in the recovery of the loaned securities, possible loss of rights to the collateral should the borrower fail financially, as well as risk of loss in the value of the collateral or the value of the investments made with the collateral. The securities lending agent shall indemnify the Fund in the case of default of any securities borrower.
At September 30, 2019, the total value of securities on loan was $3,384,827 and the total value of collateral received was $3,421,298, comprised of U.S. government and/or agencies securities.
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The following table provides a breakdown of securities lending transactions accounted for as secured borrowings, the obligations by class of collateral pledged, and the remaining contractual maturity of those transactions as of September 30, 2019.
Remaining Contractual Maturity of the Transactions | |||||||||||||||
Overnight and Continuous | <30 days | 30 to 90 days | >90 days | Total | |||||||||||
Securities Lending Transactions | |||||||||||||||
Common Stocks | $3,421,298 | $— | $— | $— | $3,421,298 |
NOTE 6 — LINE OF CREDIT
The Fund participates with other funds managed by CRM in a $100 million ($62.5 million prior to June 21, 2019) committed unsecured line of credit agreement with SSBT, which is in effect through June 19, 2020. Borrowings may be made for temporary or emergency purposes only. Borrowings bear interest at the higher of the One-Month London Interbank Offered Rate (LIBOR) in effect that day or the overnight Federal Funds Rate, plus 1.00% per annum. A commitment fee of 0.20% per annum is incurred on the unused portion of the committed facility. An administrative fee of $37,500 was incurred in connection with the increase of the facility in June 2019. These fees are allocated to all participating funds. Because the line of credit is not available exclusively to the Fund, it may be unable to borrow some or all of its requested amounts at any particular time. The Fund had no borrowings outstanding pursuant to this line of credit at September 30, 2019. The Fund did not have any significant borrowings or allocated fees during the year ended September 30, 2019.
Effective at the close of business on October 28, 2019, the Fund and other participating funds managed by CRM terminated the line of credit agreement. Effective October 29, 2019, the Fund participates with other funds managed by EVM and its affiliates, including CRM, in an $800 million unsecured line of credit agreement with a syndicate of banks, which is in effect through October 27, 2020, at terms that are more favorable than the terminated agreement.
NOTE 7 — AFFILIATED COMPANIES
The Fund has invested a portion of its assets designated for high social impact investments in notes (the Notes) issued by Calvert Impact Capital, Inc. (CIC), formerly the Calvert Social Investment Foundation, pursuant to exemptive relief granted by the U.S. Securities and Exchange Commission (the SEC). The Calvert funds first obtained an exemptive order for these investments in 1998. At that time, there was a significant overlap between the Fund Board members and CIC Board members as well as certain other affiliations between CIC and affiliates of the Fund’s investment adviser. In connection with the appointment of CRM as the Fund’s investment adviser, the Calvert funds filed a request for a new exemptive order from the SEC to permit additional investments in the Notes. On October 28, 2019, the SEC issued the requested new exemptive order, allowing the Fund to make additional investments in the Notes. While the overlap between the Fund Board members and CIC Board members generally has decreased since the original order was granted, certain potential points of affiliation between the Fund and CIC remain. CRM has licensed use of the Calvert name to CIC and provides other types of support. CRM’s President and Chief Executive Officer (and the only director/trustee on the Fund Board that is an “interested person” of the Fund) serves on the CIC Board, along with two members of the Advisory Council to the Fund Board and a second officer of CRM. In addition, another director/trustee on the Fund Board serves as a director emeritus on the CIC Board and a member of the Advisory Council to the Fund Board serves as a director emerita on the CIC Board.
At September 30, 2019, the value of the Fund’s investment in the Notes was $2,605,631, which represents 1.2% of the Fund’s net assets. Transactions in the Notes by the Fund for the year ended September 30, 2019 were as follows:
Name of Issuer | Value, beginning of period | Purchases | Sales Proceeds | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Value, end of period | Interest Income | Capital Gain Distributions Received | Principal amount, end of period | ||||||||||||||||||
High Social Impact Investments Calvert Impact Capital, Inc., Community Investment Notes, 1.50%, 12/15/19(1) | $2,520,864 | $— | $— | $— | $84,767 | $2,605,631 | $39,292 | $— | $2,619,488 | ||||||||||||||||||
(1) Restricted security |
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NOTE 8 — CAPITAL SHARES
Transactions in capital shares for the years ended September 30, 2019 and September 30, 2018 were as follows:
Year Ended September 30, 2019 | Year Ended September 30, 2018 | ||||||||||
Shares | Amount | Shares | Amount | ||||||||
Class A | |||||||||||
Shares sold | 336,722 | $10,998,087 | 315,515 | $10,423,803 | |||||||
Reinvestment of distributions | 299,488 | 8,942,725 | 453,988 | 14,182,592 | |||||||
Shares redeemed | (742,143 | ) | (23,719,620 | ) | (1,050,776 | ) | (34,625,545 | ) | |||
Converted from Class C | 152,429 | 4,660,885 | — | — | |||||||
Net increase (decrease) | 46,496 | $882,077 | (281,273 | ) | ($10,019,150 | ) | |||||
Class C | |||||||||||
Shares sold | 220,887 | $4,577,767 | 40,672 | $962,636 | |||||||
Reinvestment of distributions | 59,723 | 1,232,088 | 91,560 | 2,035,380 | |||||||
Shares redeemed | (141,161 | ) | (3,179,572 | ) | (179,909 | ) | (4,214,796 | ) | |||
Converted to Class A | (220,894 | ) | (4,660,885 | ) | — | — | |||||
Net decrease | (81,445 | ) | ($2,030,602 | ) | (47,677 | ) | ($1,216,780 | ) | |||
Class I | |||||||||||
Shares sold | 1,227,687 | $47,437,976 | 659,284 | $25,567,736 | |||||||
Reinvestment of distributions | 96,198 | 3,408,286 | 178,045 | 6,520,017 | |||||||
Shares redeemed | (2,470,818 | ) | (94,419,647 | ) | (615,028 | ) | (23,450,985 | ) | |||
Converted from Class Y | — | — | 276,006 | 11,044,764 | |||||||
Net increase (decrease) | (1,146,933 | ) | ($43,573,385 | ) | 498,307 | $19,681,532 | |||||
Class Y (1) | |||||||||||
Shares sold | — | $— | 26,967 | $926,227 | |||||||
Shares redeemed | — | — | (63,076 | ) | (2,165,170 | ) | |||||
Converted to Class I | — | — | (314,651 | ) | (11,044,764 | ) | |||||
Net decrease | — | $— | (350,760 | ) | ($12,283,707 | ) | |||||
(1) Effective December 8, 2017, Class Y shares of the Fund converted to Class I shares at net asset value. Thereafter, Class Y shares were terminated. |
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors
Calvert World Values Fund, Inc.:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Calvert Mid-Cap Fund (the Fund), a series of Calvert World Values Fund, Inc., including the schedule of investments, as of September 30, 2019, the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two‑year period then ended, and the related notes (collectively, the financial statements) and the financial highlights for each of the years in the five‑year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of September 30, 2019, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two‑year period then ended, and the financial highlights for each of the years in the five‑year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of September 30, 2019, by correspondence with the custodian. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
![kpmglogoa10.jpg](https://capedge.com/proxy/N-CSR/0001628280-19-014532/kpmglogoa10.jpg)
We have served as the auditor of one or more of the Calvert Funds since 2002.
Philadelphia, Pennsylvania
November 20, 2019
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FEDERAL TAX INFORMATION
The Form 1099-DIV you receive in February 2020 will show the tax status of all distributions paid to your account in calendar year 2019. Shareholders are advised to consult their own tax adviser with respect to the tax consequences of their investment in the Fund. As required by the Internal Revenue Code and/or regulations, shareholders must be notified regarding the status of qualified business income, qualified dividend income for individuals, dividends received deduction for corporations and capital gains dividends.
Qualified Business Income. For the fiscal year ended September 30, 2019, the Fund designates $123,184, or up to the maximum amount of such dividends allowable pursuant to the Internal Revenue Code, as qualified business income.
Qualified Dividend Income. For the fiscal year ended September 30, 2019, the Fund designates approximately $2,363,292, or up to the maximum amount of such dividends allowable pursuant to the Internal Revenue Code, as qualified dividend income eligible for the reduced tax rate of 15%.
Dividends Received Deduction. Corporate shareholders are generally entitled to take the dividends received deduction on the portion of the Fund’s dividend distribution that qualifies under tax law. For the Fund’s fiscal 2019 ordinary income dividends, 33.94% qualifies for the corporate dividends received deduction.
Capital Gains Dividends. The Fund hereby designates as a capital gain dividend with respect to the taxable year ended September 30, 2019, $12,911,321, or, if subsequently determined to be different, the net capital gain of such year.
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MANAGEMENT AND ORGANIZATION
Fund Management. The Directors of Calvert World Values Fund, Inc. (the Corporation) are responsible for the overall management and supervision of the Corporation’s affairs. The Directors and officers of the Corporation are listed below. Except as indicated, each individual has held the office shown or other offices in the same company for the last five years. Directors and officers of the Corporation hold indefinite terms of office. The “Independent Directors” consist of those Directors who are not “interested persons” of the Corporation, as that term is defined under the 1940 Act. The business address of each Director and officer, with the exception of Ms. Gemma and Mr. Kirchner, is 1825 Connecticut Avenue NW, Suite 400, Washington, DC 20009. As used below, “CRM” refers to Calvert Research and Management. Each Director oversees 39 funds in the Calvert fund complex. Each officer serves as an officer of certain other Calvert funds.
Name and Year of Birth | Corporation Position(s) | Position Start Date | Principal Occupation(s) and Other Directorships During Past Five Years and Other Relevant Experience |
Interested Director | |||
John H. Streur(1) 1960 | Director & President | 2015 | President and Chief Executive Officer of Calvert Research and Management (since December 31, 2016). President and Chief Executive Officer of Calvert Investments, Inc. (January 2015 - December 2016); Chief Executive Officer of Calvert Investment Distributors, Inc. (August 2015 - December 2016); Chief Compliance Officer of Calvert Investment Management, Inc. (August 2015 - April 2016); President and Director, Portfolio 21 Investments, Inc. (through October 2014); President, Chief Executive Officer and Director, Managers Investment Group LLC (through January 2012); President and Director, The Managers Funds and Managers AMG Funds (through January 2012). Other Directorships in the Last Five Years. Portfolio 21 Investments, Inc. (asset management) (through October 2014); Managers Investment Group LLC (asset management) (through January 2012); The Managers Funds (asset management) (through January 2012); Managers AMG Funds (asset management) (through January 2012); Calvert Impact Capital, Inc. |
Independent Directors | |||
Richard L. Baird, Jr. 1948 | Director | 2005 | Regional Disaster Recovery Lead, American Red Cross of Greater Pennsylvania (since 2017). Volunteer, American Red Cross (since 2015). Former President and CEO of Adagio Health Inc. (retired in 2014) in Pittsburgh, PA. Other Directorships in the Last Five Years. None. |
Alice Gresham Bullock 1950 | Chair & Director | 2016 | Professor Emerita at Howard University School of Law. Dean Emerita of Howard University School of Law and Deputy Director of the Association of American Law Schools (1992-1994). Other Directorships in the Last Five Years. None. |
Cari M. Dominguez 1949 | Director | 2016 | Former Chair of the U.S. Equal Employment Opportunity Commission. Other Directorships in the Last Five Years. Manpower, Inc. (employment agency); Triple S Management Corporation (managed care); National Association of Corporate Directors. |
John G. Guffey, Jr.(2) 1948 | Director | 1992 | President of Aurora Press Inc., a privately held publisher of trade paperbacks (since January 1997). Other Directorships in the Last Five Years. Calvert Impact Capital, Inc. (through December 31, 2018); Calvert Ventures, LLC. |
Miles D. Harper, III 1962 | Director | 2005 | Partner, Carr Riggs & Ingram (public accounting firm) since October 2014. Partner, Gainer Donnelly & Desroches (public accounting firm) (now Carr Riggs & Ingram), November 1999 - September 2014). Other Directorships in the Last Five Years. Bridgeway Funds (9) (asset management). |
Joy V. Jones 1950 | Director | 2005 | Attorney. Other Directorships in the Last Five Years. Conduit Street Restaurants SUD 2 Limited; Palm Management Restaurant Corporation. |
Anthony A. Williams 1951 | Director | 2016 | CEO and Executive Director of the Federal City Council (July 2012 to present); Senior Adviser and Independent Consultant for McKenna Long & Aldridge LLP (September 2011 to present); Executive Director of Global Government Practice at the Corporate Executive Board (January 2010 to January 2012). Other Directorships in the Last Five Years. Freddie Mac; Evoq Properties/ Meruelo Maddux Properties, Inc. (real estate management); Weston Solutions, Inc. (environmental services); Bipartisan Policy Center’s Debt Reduction Task Force; Chesapeake Bay Foundation; Catholic University of America; Urban Institute (research organization). |
26 www.calvert.com CALVERT MID-CAP FUND ANNUAL REPORT (Unaudited)
Principal Officers who are not Directors | |||
Name and Year of Birth | Corporation Position(s) | Position Start Date | Principal Occupation(s) During Past Five Years |
Hope L. Brown 1973 | Chief Compliance Officer | 2014 | Chief Compliance Officer of 39 registered investment companies advised by CRM (since 2014). Vice President and Chief Compliance Officer, Wilmington Funds (2012-2014). |
Maureen A. Gemma(3) 1960 | Secretary, Vice President and Chief Legal Officer | 2016 | Vice President of CRM and officer of 39 registered investment companies advised by CRM (since 2016). Also Vice President of Eaton Vance and certain of its affiliates and officer of 162 registered investment companies advised or administered by Eaton Vance. |
James F. Kirchner(3) 1967 | Treasurer | 2016 | Vice President of CRM and officer of 39 registered investment companies advised by CRM (since 2016). Also Vice President of Eaton Vance and certain of its affiliates and officer of 162 registered investment companies advised or administered by Eaton Vance. |
(1) | Mr. Streur is an interested person of the Fund because of his positions with the Fund’s adviser and certain affiliates. |
(2) | Mr. Guffey is currently married to Rebecca L. Adamson, who serves as a member of the Advisory Council. |
(3) | The business address for Ms. Gemma and Mr. Kirchner is Two International Place, Boston, MA 02110. |
The SAI for the Fund includes additional information about the Directors and officers of the Fund and can be obtained without charge on Calvert’s website at www.calvert.com or by calling 1-800-368-2745.
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IMPORTANT NOTICES
Privacy. The Calvert Funds and Calvert Research and Management are committed to ensuring your financial privacy. Each of the financial institutions identified below has in effect the following policy (“Privacy Policy”) with respect to nonpublic personal information about its customers:
• | Only such information received from you, through application forms or otherwise, and information about your Calvert fund transactions will be collected. This may include information such as name, address, social security number, tax status, account balances and transactions. |
• | None of such information about you (or former customers) will be disclosed to anyone, except as permitted by law (which includes disclosure to employees necessary to service your account). In the normal course of servicing a customer’s account, Calvert Research and Management may share information with unaffiliated third parties that perform various required services such as transfer agents, custodians and broker-dealers. |
• | Policies and procedures (including physical, electronic and procedural safeguards) are in place that are designed to protect the confidentiality of such information. |
• | The Funds reserve the right to change this Privacy Policy at any time upon proper notification to you. Customers may want to review the Funds’ Privacy Policy periodically for changes by accessing the link on our homepage: www.calvert.com. |
Our pledge of privacy applies to the following entities: the Calvert Family of Funds, Calvert Research and Management and their affiliated service providers, Eaton Vance Management and Eaton Vance Distributors, Inc. In addition, our Privacy Policy applies only to those Calvert customers who are individuals and who have a direct relationship with us. If a customer’s account (i.e., fund shares) is held in the name of a third-party financial advisor/broker-dealer, it is likely that only such advisor’s privacy policies apply to the customer. This notice supersedes all previously issued privacy disclosures. For more information about Calvert’s Privacy Policy, please call 1-800-368-2745.
Delivery of Shareholder Documents. The Securities and Exchange Commission (SEC) permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called “householding” and it helps eliminate duplicate mailings to shareholders. Calvert funds, or your financial intermediary, may household the mailing of your documents indefinitely unless you instruct Calvert funds, or your financial intermediary, otherwise. If you would prefer that your Calvert fund documents not be householded, please contact Calvert funds at 1-800-368-2745, or contact your financial intermediary. Your instructions that householding not apply to delivery of your Calvert fund documents will typically be effective within 30 days of receipt by Calvert funds or your financial intermediary. Separate statements will be generated for each separate account and will be householded as described above.
Portfolio Holdings. Each Calvert fund files a schedule of portfolio holdings on Part F to Form N-PORT with the SEC for the first and third quarters of each fiscal year. The Form N-PORT will be available on the Calvert funds’ website at www.calvert.com, by calling Calvert funds at 1-800-368-2745 or in the EDGAR database on the SEC’s website at www.sec.gov.
Proxy Voting. The Proxy Voting Guidelines that each Calvert fund uses to determine how to vote proxies relating to portfolio securities is provided as an Appendix to the fund’s Statement of Additional Information. The Statement of Additional Information can be obtained free of charge by calling the Calvert funds at 1-800-368-2745, by visiting the Calvert funds’ website at www.calvert.com or visiting the SEC’s website at www.sec.gov. Information regarding how a Calvert fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available by calling Calvert funds, by visiting the Calvert funds’ website at www.calvert.com or by visiting the SEC’s website at www.sec.gov.
28 www.calvert.com CALVERT MID-CAP FUND ANNUAL REPORT (Unaudited)
CALVERT MID-CAP FUND | |
Investment Adviser and Administrator Calvert Research and Management 1825 Connecticut Avenue NW, Suite 400 Washington, DC 20009 | Transfer Agent DST Asset Manager Solutions, Inc. 2000 Crown Colony Drive Quincy, MA 02169 |
Principal Underwriter* Eaton Vance Distributors, Inc. Two International Place Boston, MA 02110 (617) 482-8260 | Independent Registered Public Accounting Firm KPMG LLP 1601 Market Street Philadelphia, PA 19103-2499 |
Custodian State Street Bank and Trust Company State Street Financial Center, One Lincoln Street Boston, MA 02111 | Fund Offices 1825 Connecticut Avenue NW, Suite 400 Washington, DC 20009 |
* FINRA BrokerCheck. Investors may check the background of their Investment Professional by contacting the Financial Industry Regulatory Authority (FINRA). FINRA BrokerCheck is a free tool to help investors check the professional background of current and former FINRA-registered securities firms and brokers. FINRA BrokerCheck is available by calling 1-800-289-9999 and at www.FINRA.org. The FINRA BrokerCheck brochure describing this program is available to investors at www.FINRA.org.
Printed on recycled paper. | |
24209 9.30.19 | ![]() |
Calvert International Opportunities Fund |
Important Note. Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semi-annual shareholder reports will no longer be sent by mail unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (calvert.com/prospectus), and you will be notified by mail each time a report is posted and provided with a website address to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you are a direct investor, you may elect to receive shareholder reports and other communications from the Fund electronically by signing up for e-Delivery at calvert.com. If you own your shares through a financial intermediary (such as a broker-dealer or bank), you must contact your financial intermediary to sign up.
You may elect to receive all future Fund shareholder reports in paper free of charge. If you are a direct investor, you can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by calling 1-800-368-2745. If you own these shares through a financial intermediary, you must contact your financial intermediary or follow instructions included with this disclosure, if applicable, to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all Calvert funds held directly or to all funds held through your financial intermediary, as applicable.
Annual Report September 30, 2019 E-Delivery Sign-Up — Details Inside | ![]() |
Commodity Futures Trading Commission Registration. Effective December 31, 2012, the Commodity Futures Trading Commission (“CFTC”) adopted certain regulatory changes that subject registered investment companies and advisers to regulation by the CFTC if a fund invests more than a prescribed level of its assets in certain CFTC-regulated instruments (including futures, certain options and swap agreements) or markets itself as providing investment exposure to such instruments. The Fund and its adviser have claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act. Accordingly, neither the Fund nor the adviser is subject to CFTC regulation. Fund shares are not insured by the FDIC and are not deposits or other obligations of, or guaranteed by, any depository institution. Shares are subject to investment risks, including possible loss of principal invested. This report must be preceded or accompanied by a current summary prospectus or prospectus. Before investing, investors should consider carefully the investment objective, risks, and charges and expenses of a mutual fund. This and other important information is contained in the summary prospectus and prospectus, which can be obtained from a financial intermediary. Prospective investors should read the prospectus carefully before investing. For further information, please call 1-800-368-2745. |
Choose Planet-friendly E-delivery! Sign up now for on-line statements, prospectuses, and fund reports. In less than five minutes you can help reduce paper mail and lower fund costs. Just go to www.calvert.com. If you already have an online account with the Calvert funds, click on Login to access your Account and select the documents you would like to receive via e-mail. If you’re new to online account access, click on Login, then Register to create your user name and password. Once you’re in, click on the E-delivery sign-up on the Account Portfolio page and follow the quick, easy steps. Note: If your shares are not held directly with the Calvert funds but through a brokerage firm, you must contact your broker for electronic delivery options available through their firm. |
TABLE OF CONTENTS | ||||
Management’s Discussion of Fund Performance | ||||
Performance | ||||
Fund Profile | ||||
Endnotes and Additional Disclosures | ||||
Fund Expenses | ||||
Financial Statements | ||||
Report of Independent Registered Public Accounting Firm | ||||
Federal Tax Information | ||||
Management and Organization | ||||
Important Notices |
MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE1
Economic and Market Conditions
In the midst of a yearlong U.S.-China trade war and slowing economic growth worldwide, global stocks delivered mixed returns during the 12-month period ended September 30, 2019.
U.S. stocks opened the period on the downside as investors worried that President Trump’s imposition of broad import tariffs might provoke a wider trade dispute with China, the world’s second-largest economy behind the U.S.
With U.S. economic data largely positive in calendar year 2018, the U.S. Federal Reserve Board (the Fed) raised its benchmark federal funds rate four times ─ from a low range of 1.50%-1.75% to 2.25%-2.50% ─ with the last quarter-point increase on December 19, 2018.
U.S. stocks turned higher in early 2019 as trade fears eased and interest rates remained stable after the Fed signaled a slower pace for future rate hikes. However, around the same time, U.S. economic indicators began sending mixed signals. While the U.S. job market was robust during the period with the unemployment rate dipping below 4%, retail sales fell, raising concerns about consumer spending. Factory output also declined, dragged down by a large drop in auto production.
The U.S. equity market fluctuated through the spring of 2019. Heightened trade-conflict rhetoric drove stocks lower in May before easing tensions helped equities recover in June. Key economic indicators continued to be mixed, with job creation decelerating sharply in May.
After holding interest rates steady through the first half of 2019, the Fed cut its benchmark interest rate to 2.00%-2.25% on July 31 ─ its first reduction in over a decade ─ followed by a second interest-rate drop to 1.75%-2.00% on September 18. Lower rates are intended to help stimulate economic activity by making borrowing costs relatively more affordable.
After sliding in August, U.S. equities rebounded in early September before pulling back in the final weeks of the period. Like U.S. stocks, global equity markets were volatile during the period. In addition to concerns about U.S.-China trade tensions, investors confronted widespread evidence of a global economic slowdown from Germany to China to India. In Europe, markets faced the added uncertainties of Brexit. The United Kingdom is expected to exit the European Union this fall despite the political turmoil the pending move has already created inside and outside its borders.
During the 12-month period ended September 30, 2019, the MSCI World Index,2 a proxy for global equities, returned 1.83%. In the U.S., the blue-chip Dow Jones Industrial Average® gained 4.21%, while the broader U.S. equity market represented by the S&P 500® Index rose 4.25%. The MSCI EAFE Index of developed-market international equities fell -1.34%, and the MSCI Emerging Markets Index fell -2.02% during the period.
Fund Performance
For the 12-month period ended September 30, 2019, Calvert International Opportunities Fund (the Fund) returned -6.77% for Class A shares at net asset value (NAV), underperforming its
benchmark, the MSCI EAFE SMID Cap Index (the Index), which returned -4.90%.
Stock selection was the largest detractor from performance relative to the Index during the period, as pockets of strength could not offset broader weaknesses. Stocks in several sectors ─ energy, information technology (IT), financials, real estate and consumer discretionary ─ weighed on performance. Although the Fund does not seek to outperform by favoring or avoiding specific regions or sectors, an overweight position in health care during the period, combined with strong stock selections within that sector, contributed significantly to relative performance. While an underweight position within the poorly performing energy sector enhanced performance relative to the Index, certain stock selections within that sector detracted from returns. Regionally, robust stock selections in Europe buoyed performance, however challenging market conditions in Japan and Australia detracted from performance.
At the stock level, Norma Group SE, a German manufacturer of machine joining components, was one of the largest detractors during the period. The company lowered its sales, earnings and net operating cash-flow projections largely due to a weaker-than-expected outlook for the global automotive business.
Oceaneering International, Inc., a provider of mini-submarines for the maintenance and repair of oil rigs, was also among the largest individual detractors during the period. Relatively low oil prices slowed capital expenditures throughout the energy sector during the period.
Sanden Holdings Corp. (Sanden) also detracted from relative performance. Sanden, an automotive and electrical equipment manufacturer based in Japan, fell during most of the period. Early in the period, operating profits declined meaningfully because of deteriorating sales in both of Sanden’s primary-end markets. The stock was sold during the period.
Halma plc (Halma), a holding company in the IT sector, was a notable contributor during the period. Halma companies operate in a wide range of businesses from the production of gas-leak detection devices to ophthalmological equipment to air-and-water quality monitoring equipment. The stock price rose on sustained revenue and earnings growth during the period.
CAE, Inc. (CAE), the largest provider of training programs for commercial pilots, was also among the largest contributors during the period. The company’s strength stemmed from a global shortage of pilots, which has significantly increased the need for training services. Growing demand for air travel also supported stock returns during the period. In addition, CAE’s acquisition of Bombardier’s Business Aircraft Training unit raised earnings projections during the period.
Invesco Office J-REIT, Inc., which invests primarily in commercial and office buildings in urban and metropolitan areas in Japan, also contributed to relative performance. Share prices moved higher during the period as select acquisitions, favorable office-leasing conditions and positive rent revisions at existing properties lifted the firm’s prospects.
See Endnotes and Additional Disclosures in this report. Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or offering price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, the Fund’s current performance may be lower or higher than quoted. Returns are before taxes unless otherwise noted. For performance as of the most recent month-end, please refer to www.calvert.com. |
2 www.calvert.com CALVERT INTERNATIONAL OPPORTUNITIES FUND ANNUAL REPORT (Unaudited)
PERFORMANCE
Performance2,3 | |||||||||||||||
Portfolio Manager Aidan M. Farrell of Eaton Vance Advisers International Ltd. | |||||||||||||||
% Average Annual Total Returns | Class Inception Date | Performance Inception Date | One Year | Five Years | Ten Years | ||||||||||
Class A at NAV | 05/31/2007 | 05/31/2007 | -6.77 | % | 5.31 | % | 6.80 | % | |||||||
Class A with 4.75% Maximum Sales Charge | — | — | -11.19 | 4.28 | 6.28 | ||||||||||
Class C at NAV | 07/31/2007 | 05/31/2007 | -7.49 | 4.46 | 5.91 | ||||||||||
Class C with 1% Maximum Sales Charge | — | — | -8.35 | 4.46 | 5.91 | ||||||||||
Class I at NAV | 05/31/2007 | 05/31/2007 | -6.50 | 5.69 | 7.23 | ||||||||||
Class R6 at NAV | 02/01/2019 | 05/31/2007 | -6.50 | 5.69 | 7.23 | ||||||||||
MSCI EAFE SMID Cap Index | — | — | -4.90 | % | 5.46 | % | 6.69 | % | |||||||
% Total Annual Operating Expense Ratios4 | Class A | Class C | Class I | Class R6 | |||||||||||
Gross | 1.39 | % | 2.14 | % | 1.14 | % | 1.10 | % | |||||||
Net | 1.35 | 2.10 | 1.10 | 1.06 |
Growth of $10,000 |
This graph shows the change in value of a hypothetical investment of $10,000 in Class A of the Fund for the period indicated. For comparison, the same investment is shown in the indicated index. |
![chart-4d7b5a467f705ad9915.jpg](https://capedge.com/proxy/N-CSR/0001628280-19-014532/chart-4d7b5a467f705ad9915.jpg)
Growth of Investment3 | Amount Invested | Period Beginning | At NAV | With Maximum Sales Charge | ||||
Class C | $10,000 | 09/30/2009 | $17,767 | N.A. | ||||
Class I | $250,000 | 09/30/2009 | $502,873 | N.A. | ||||
Class R6 | $1,000,000 | 09/30/2009 | $2,011,492 | N.A. |
See Endnotes and Additional Disclosures in this report.
Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or offering price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, the Fund’s current performance may be lower or higher than quoted. Returns are before taxes unless otherwise noted. For performance as of the most recent month-end, please refer to www.calvert.com.
www.calvert.com CALVERT INTERNATIONAL OPPORTUNITIES FUND ANNUAL REPORT (Unaudited) 3
FUND PROFILE
SECTOR ALLOCATION (% of total investments)5 | TEN LARGEST HOLDINGS (% of net assets)6 | ||||||
Industrials | 22.4 | % | Melrose Industries plc | 1.9 | % | ||
Consumer Discretionary | 13.0 | % | FP Corp. | 1.7 | % | ||
Financials | 12.0 | % | Sika AG | 1.7 | % | ||
Real Estate | 10.0 | % | IMCD Group NV | 1.6 | % | ||
Information Technology | 9.4 | % | Penta-Ocean Construction Co. Ltd. | 1.5 | % | ||
Health Care | 9.2 | % | CAE, Inc. | 1.5 | % | ||
Materials | 8.8 | % | SpareBank 1 SR-Bank ASA | 1.4 | % | ||
Consumer Staples | 7.4 | % | Bellway plc | 1.4 | % | ||
Communication Services | 3.9 | % | Morinaga & Co. Ltd. | 1.4 | % | ||
Utilities | 2.4 | % | Fisher & Paykel Healthcare Corp. Ltd. | 1.4 | % | ||
Energy | 1.1 | % | Total | 15.5 | % | ||
High Social Impact Investments | 0.4 | % | |||||
Total | 100.0 | % |
See Endnotes and Additional Disclosures in this report.
4 www.calvert.com CALVERT INTERNATIONAL OPPORTUNITIES FUND ANNUAL REPORT (Unaudited)
Endnotes and Additional Disclosures |
1 | The views expressed in this report are those of the portfolio manager(s) and are current only through the date stated on the cover. These views are subject to change at any time based upon market or other conditions, and Calvert and the Fund(s) disclaim any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions are based on many factors, may not be relied upon as an indication of trading intent on behalf of any Calvert fund. This commentary may contain statements that are not historical facts, referred to as “forward looking statements.” The Fund’s actual future results may differ significantly from those stated in any forward looking statement, depending on factors such as changes in securities or financial markets or general economic conditions, the volume of sales and purchases of Fund shares, the continuation of investment advisory, administrative and service contracts, and other risks discussed from time to time in the Fund’s filings with the Securities and Exchange Commission. |
2 | MSCI World Index is an unmanaged index of equity securities in the developed markets. MSCI EAFE Index is an unmanaged index of equities in the developed markets, excluding the U.S. and Canada. MSCI Emerging Markets Index is an unmanaged index of emerging markets common stocks. MSCI EAFE SMID Cap Index is an unmanaged index of small & mid-capitalization equities in the developed markets, excluding the U.S. and Canada. MSCI indexes are net of foreign withholding taxes. Source: MSCI. MSCI data may not be reproduced or used for any other purpose. MSCI provides no warranties, has not prepared or approved this report, and has no liability hereunder. Dow Jones Industrial Average® is a price-weighted average of 30 blue-chip stocks that are generally the leaders in their industry. S&P 500® Index is an unmanaged index of large-cap stocks commonly used as a measure of U.S. stock market performance. S&P Dow Jones Indices are a product of S&P Dow Jones Indices LLC (“S&P DJI”) and have been licensed for use. S&P® and S&P 500® are registered trademarks of S&P DJI; Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); S&P DJI, Dow Jones and their respective affiliates do not sponsor, endorse, sell or promote the Fund, will not have any liability with respect thereto and do not have any liability for any errors, omissions, or interruptions of the S&P Dow Jones Indices. Unless otherwise stated, index returns do not reflect the effect of any applicable sales charges, commissions, expenses, taxes or leverage, as applicable. It is not possible to invest directly in an index. |
3 | Total Returns at NAV do not include applicable sales charges. If sales charges were deducted, the returns would be lower. Total Returns shown with maximum sales charge reflect the stated maximum sales charge. Unless otherwise stated, performance does not reflect the deduction of taxes on Fund distributions or redemptions of Fund shares. |
Performance prior to the inception date of a class may be linked to the performance of an older class of the Fund. This linked performance is adjusted for any applicable sales charge, but is not adjusted for class expense differences. If adjusted for such differences, the performance would be different. The performance of Class R6 is linked to Class I. Performance since inception for an index, if presented, is the performance since the Fund’s or oldest share class’ inception, as applicable. Performance presented in the Financial Highlights included in the financial statements is not linked.
Calvert Research and Management became the investment adviser to the Fund on December 31, 2016. Performance reflected prior to such date is that of the Fund’s former investment adviser.
4 Source: Fund prospectus. Net expense ratios reflect a contractual expense reimbursement that continues through 1/31/20. Without the reimbursement, performance would have been lower. The expense ratios for the current reporting period can be found in the Financial Highlights section of this report.
5 Does not include Short Term Investment of Cash Collateral for Securities Loaned.
6 Excludes cash and cash equivalents.
Fund profile subject to change due to active management.
www.calvert.com CALVERT INTERNATIONAL OPPORTUNITIES FUND ANNUAL REPORT (Unaudited) 5
FUND EXPENSES
Example
As a Fund shareholder, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases and redemption fees (if applicable); and (2) ongoing costs, including management fees; distribution and/or service fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of Fund investing and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (April 1, 2019 to September 30, 2019).
Actual Expenses
The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, 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 section 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 section of the table below provides information about hypothetical account values and hypothetical expenses based on the actual Fund expense ratio and an assumed rate of return of 5% per year (before expenses), which is not the actual Fund 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 this 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 (if applicable). Therefore, the second section 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 be higher.
BEGINNING ACCOUNT VALUE (4/1/19) | ENDING ACCOUNT VALUE (9/30/19) | EXPENSES PAID DURING PERIOD* (4/1/19 - 9/30/19) | ANNUALIZED EXPENSE RATIO | |
Actual | ||||
Class A | $1,000.00 | $1,010.00 | $6.75** | 1.34% |
Class C | $1,000.00 | $1,006.40 | $10.51** | 2.09% |
Class I | $1,000.00 | $1,012.10 | $5.50** | 1.09% |
Class R6 | $1,000.00 | $1,012.10 | $5.30** | 1.05% |
Hypothetical | ||||
(5% return per year before expenses) | ||||
Class A | $1,000.00 | $1,018.35 | $6.78** | 1.34% |
Class C | $1,000.00 | $1,014.59 | $10.56** | 2.09% |
Class I | $1,000.00 | $1,019.60 | $5.52** | 1.09% |
Class R6 | $1,000.00 | $1,019.80 | $5.32** | 1.05% |
* Expenses are equal to the Fund’s annualized expense ratio for the indicated Class, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period). The Example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on March 31, 2019. | ||||
** Absent a waiver and/or reimbursement of expenses by affiliates, expenses would be higher. |
6 www.calvert.com CALVERT INTERNATIONAL OPPORTUNITIES FUND ANNUAL REPORT (Unaudited)
CALVERT INTERNATIONAL OPPORTUNITIES FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2019
SHARES | VALUE ($) | |
COMMON STOCKS - 98.8% | ||
Australia - 4.6% | ||
Bapcor Ltd. (1) | 695,816 | 3,460,986 |
BlueScope Steel Ltd. | 72,836 | 591,602 |
Bravura Solutions Ltd. | 1,088,028 | 3,048,754 |
Challenger Ltd. | 293,943 | 1,463,866 |
GDI Property Group | 2,279,362 | 2,338,997 |
Magellan Financial Group Ltd. | 33,596 | 1,170,156 |
Nine Entertainment Co. Holdings Ltd. (1) | 1,583,182 | 2,092,196 |
Steadfast Group Ltd. | 557,591 | 1,337,027 |
15,503,584 | ||
Austria - 1.2% | ||
BAWAG Group AG (2) | 53,239 | 2,095,000 |
CA Immobilien Anlagen AG | 59,599 | 2,114,123 |
4,209,123 | ||
Belgium - 1.1% | ||
Kinepolis Group NV | 57,835 | 3,554,499 |
Canada - 3.0% | ||
CAE, Inc. | 196,746 | 4,998,657 |
Kinaxis, Inc. (3) | 35,175 | 2,289,156 |
TMX Group Ltd. | 33,833 | 2,919,927 |
10,207,740 | ||
Denmark - 0.5% | ||
Topdanmark AS | 32,494 | 1,568,557 |
France - 2.6% | ||
Lagardere SCA | 93,918 | 2,077,166 |
Nexity S.A. | 39,422 | 1,876,580 |
Rubis SCA | 79,837 | 4,637,096 |
8,590,842 | ||
Germany - 4.2% | ||
Brenntag AG | 42,891 | 2,074,365 |
Carl Zeiss Meditec AG | 17,197 | 1,960,035 |
GRENKE AG | 20,099 | 1,655,758 |
New Work SE | 5,513 | 1,502,714 |
Norma Group SE | 108,226 | 3,753,158 |
Rational AG | 4,212 | 3,020,403 |
Salzgitter AG | 13,937 | 234,086 |
14,200,519 |
www.calvert.com CALVERT INTERNATIONAL OPPORTUNITIES FUND ANNUAL REPORT 7
SHARES | VALUE ($) | |
COMMON STOCKS - CONT’D | ||
Hong Kong - 1.6% | ||
CITIC Telecom International Holdings Ltd. | 5,470,398 | 1,988,126 |
Hysan Development Co. Ltd. | 834,837 | 3,366,582 |
5,354,708 | ||
Ireland - 1.6% | ||
Green REIT plc | 354,089 | 735,608 |
Kerry Group plc, Class A | 25,839 | 3,020,222 |
UDG Healthcare plc | 184,251 | 1,699,180 |
5,455,010 | ||
Italy - 5.1% | ||
Amplifon SpA | 119,795 | 2,939,014 |
DiaSorin SpA | 24,472 | 2,846,049 |
FinecoBank Banca Fineco SpA | 174,256 | 1,843,637 |
Interpump Group SpA | 87,297 | 2,759,001 |
MARR SpA | 180,821 | 3,959,664 |
Moncler SpA | 80,089 | 2,854,642 |
17,202,007 | ||
Japan - 28.1% | ||
77 Bank Ltd. (The) (1) | 95,186 | 1,418,910 |
Asahi Co. Ltd. | 292,112 | 3,219,080 |
Chiba Bank Ltd. (The) (1) | 265,183 | 1,371,554 |
Daiichikosho Co. Ltd. | 38,673 | 1,790,333 |
Dowa Holdings Co. Ltd. | 33,160 | 1,138,666 |
FP Corp. | 94,083 | 5,884,605 |
Fuji Seal International, Inc. | 112,170 | 2,844,048 |
Fukuoka Financial Group, Inc. | 73,463 | 1,394,204 |
Invesco Office J-REIT, Inc. | 19,617 | 3,902,954 |
Itochu Techno-Solutions Corp. | 155,549 | 4,131,681 |
Japan Lifeline Co. Ltd. (1) | 126,817 | 2,046,672 |
K’s Holdings Corp. | 417,776 | 4,550,005 |
Kenedix, Inc. | 527,157 | 2,665,485 |
Kewpie Corp. | 162,056 | 3,795,650 |
Kuraray Co. Ltd. | 289,329 | 3,574,596 |
Lion Corp. | 174,710 | 3,456,194 |
Mitsui Fudosan Logistics Park, Inc. | 632 | 2,633,248 |
Morinaga & Co. Ltd. | 96,117 | 4,678,606 |
Nabtesco Corp. (1) | 137,676 | 4,309,678 |
Nippon Light Metal Holdings Co. Ltd. | 998,581 | 1,802,728 |
Nohmi Bosai Ltd. | 175,166 | 3,358,761 |
Nomura Co. Ltd. | 281,532 | 3,561,332 |
Okamura Corp. | 395,173 | 3,869,522 |
Parco Co. Ltd. (1) | 169,301 | 1,996,202 |
Penta-Ocean Construction Co. Ltd. | 928,388 | 5,154,847 |
Press Kogyo Co., Ltd. | 399,916 | 1,675,299 |
8 www.calvert.com CALVERT INTERNATIONAL OPPORTUNITIES FUND ANNUAL REPORT
SHARES | VALUE ($) | |
COMMON STOCKS - CONT’D | ||
Sakata Seed Corp. | 59,183 | 2,025,408 |
Ship Healthcare Holdings, Inc. | 104,953 | 4,474,592 |
Sumco Corp. (1) | 149,752 | 2,040,027 |
Tokyo Century Corp. | 40,045 | 1,862,314 |
Yamaha Corp. | 84,810 | 3,823,664 |
94,450,865 | ||
Luxembourg - 0.2% | ||
APERAM S.A. | 23,000 | 559,024 |
Netherlands - 4.6% | ||
Aalberts NV | 111,267 | 4,406,279 |
Core Laboratories NV (1) | 16,055 | 748,484 |
GrandVision NV (2) | 60,429 | 1,809,617 |
IMCD Group NV | 71,298 | 5,268,951 |
NSI NV | 74,821 | 3,232,172 |
15,465,503 | ||
New Zealand - 1.4% | ||
Fisher & Paykel Healthcare Corp. Ltd. | 429,388 | 4,658,891 |
Norway - 2.6% | ||
Entra ASA (2) | 179,097 | 2,808,980 |
SpareBank 1 SR-Bank ASA | 446,945 | 4,866,415 |
TGS NOPEC Geophysical Co. ASA | 40,608 | 1,027,836 |
8,703,231 | ||
Singapore - 1.2% | ||
Frasers Logistics & Industrial Trust | 2,619,800 | 2,350,407 |
Yanlord Land Group Ltd. | 1,939,900 | 1,644,017 |
3,994,424 | ||
Spain - 1.0% | ||
Acciona SA (1) | 30,917 | 3,272,052 |
Arima Real Estate SOCIMI S.A. (3) | 22,758 | 248,071 |
3,520,123 | ||
Sweden - 6.8% | ||
AddTech AB, Class B | 94,046 | 2,444,486 |
Assa Abloy AB, Class B | 189,422 | 4,211,069 |
Autoliv, Inc. | 22,388 | 1,765,965 |
Boliden AB | 41,054 | 942,869 |
Bufab AB | 182,294 | 1,902,214 |
Hexagon AB, Class B | 51,847 | 2,497,473 |
Husqvarna AB, Class B | 506,470 | 3,851,638 |
www.calvert.com CALVERT INTERNATIONAL OPPORTUNITIES FUND ANNUAL REPORT 9
SHARES | VALUE ($) | |
COMMON STOCKS - CONT’D | ||
Indutrade AB | 125,707 | 3,522,708 |
Trelleborg AB, Class B | 128,065 | 1,795,537 |
22,933,959 | ||
Switzerland - 7.6% | ||
Belimo Holding AG | 374 | 2,057,469 |
Bossard Holding AG, Class A | 11,961 | 1,647,876 |
Cembra Money Bank AG | 22,533 | 2,348,262 |
Galenica AG (2) | 35,073 | 2,014,449 |
Logitech International SA | 79,905 | 3,247,132 |
Sika AG | 38,456 | 5,626,564 |
Straumann Holding AG | 2,871 | 2,348,331 |
Vontobel Holding AG | 57,829 | 3,131,636 |
VZ Holding AG | 11,081 | 3,313,738 |
25,735,457 | ||
United Kingdom - 19.3% | ||
Abcam plc | 213,199 | 3,004,382 |
Avast plc (2) | 831,792 | 3,973,539 |
Bellway plc | 114,492 | 4,706,780 |
Bodycote plc | 446,232 | 3,928,758 |
Cranswick plc | 105,914 | 3,839,922 |
Croda International plc | 35,461 | 2,118,293 |
Dechra Pharmaceuticals plc | 77,749 | 2,646,546 |
Diploma plc | 119,549 | 2,445,372 |
DS Smith plc | 955,664 | 4,231,679 |
First Derivatives plc | 104,100 | 2,863,327 |
Games Workshop Group plc | 63,518 | 3,679,272 |
Grainger plc | 1,141,251 | 3,452,436 |
Halma plc | 168,266 | 4,072,948 |
Hiscox Ltd. | 108,124 | 2,206,448 |
Inchcape plc | 371,971 | 2,887,549 |
Melrose Industries plc | 2,579,653 | 6,391,044 |
St James’s Place plc | 347,020 | 4,173,839 |
Weir Group plc (The) | 75,601 | 1,324,355 |
WH Smith plc | 129,617 | 3,167,205 |
65,113,694 | ||
United States - 0.5% | ||
Oceaneering International, Inc. (3) | 133,957 | 1,815,117 |
Total Common Stocks (Cost $320,530,303) | 332,796,877 |
10 www.calvert.com CALVERT INTERNATIONAL OPPORTUNITIES FUND ANNUAL REPORT
PRINCIPAL AMOUNT ($) | VALUE ($) | |
HIGH SOCIAL IMPACT INVESTMENTS - 0.4% | ||
Calvert Impact Capital, Inc., Community Investment Notes, 1.50%, 12/15/19 (4)(5) | 1,000,000 | 994,710 |
ImpactAssets Inc., Global Sustainable Agriculture Notes, 3.39%, 11/3/20 (4)(6) | 111,000 | 110,207 |
ImpactAssets Inc., Microfinance Plus Notes, 1.98%, 11/3/20 (4)(6) | 142,000 | 138,737 |
Total High Social Impact Investments (Cost $1,253,000) | 1,243,654 | |
SHARES | VALUE ($) | |
SHORT TERM INVESTMENT OF CASH COLLATERAL FOR SECURITIES LOANED - 0.9% | ||
State Street Navigator Securities Lending Government Money Market Portfolio, 2.07% | 3,037,308 | 3,037,308 |
Total Short Term Investment of Cash Collateral for Securities Loaned (Cost $3,037,308) | 3,037,308 | |
TOTAL INVESTMENTS (Cost $324,820,611) - 100.1% | 337,077,839 | |
Other assets and liabilities, net - (0.1%) | (440,887) | |
NET ASSETS - 100.0% | 336,636,952 |
NOTES TO SCHEDULE OF INVESTMENTS |
(1) All or a portion of this security was on loan at September 30, 2019. The aggregate market value of securities on loan at September 30, 2019 was $9,425,223. |
(2) Security is exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. Total market value of Rule 144A securities amounts to $12,701,585, which represents 3.8% of the net assets of the Fund as of September 30, 2019. |
(3) Non-income producing security. |
(4) Restricted security. Total market value of restricted securities amounts to $1,243,654, which represents 0.4% of the net assets of the Fund as of September 30, 2019. |
(5) Affiliated company (see Note 7). |
(6) Notes carry an interest rate that varies by period and is contingent on the performance of the underlying portfolio of loans to borrowers. The coupon rate shown represents the rate in effect at September 30, 2019. |
www.calvert.com CALVERT INTERNATIONAL OPPORTUNITIES FUND ANNUAL REPORT 11
At September 30, 2019, the concentration of the Fund’s investments in the various sectors, determined as a percentage of total investments, was as follows: |
ECONOMIC SECTORS | % OF TOTAL INVESTMENTS* | |
Industrials | 22.4 | % |
Consumer Discretionary | 13.0 | % |
Financials | 12.0 | % |
Real Estate | 10.0 | % |
Information Technology | 9.4 | % |
Health Care | 9.2 | % |
Materials | 8.8 | % |
Consumer Staples | 7.4 | % |
Communication Services | 3.9 | % |
Utilities | 2.4 | % |
Energy | 1.1 | % |
High Social Impact Investments | 0.4 | % |
Total | 100.0 | % |
* Does not include Short Term Investment of Cash Collateral for Securities Loaned. |
RESTRICTED SECURITIES | ACQUISITION DATES | COST ($) |
Calvert Impact Capital, Inc., Community Investment Notes, 1.50%, 12/15/19 | 12/15/16 | 1,000,000 |
ImpactAssets Inc., Global Sustainable Agriculture Notes, 3.39%, 11/3/20 | 11/13/15 | 111,000 |
ImpactAssets Inc., Microfinance Plus Notes, 1.98%, 11/3/20 | 11/13/15 | 142,000 |
See notes to financial statements. |
12 www.calvert.com CALVERT INTERNATIONAL OPPORTUNITIES FUND ANNUAL REPORT
CALVERT INTERNATIONAL OPPORTUNITIES FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2019
ASSETS | |||
Investments in securities of unaffiliated issuers, at value (identified cost $323,820,611) - including $9,425,223 of securities on loan | $336,083,129 | ||
Investments in securities of affiliated issuers, at value (identified cost $1,000,000) | 994,710 | ||
Cash | 4,625,549 | ||
Receivable for investments sold | 2,616,226 | ||
Receivable for capital shares sold | 821,389 | ||
Dividends and interest receivable | 633,025 | ||
Interest receivable - affiliated | 12,083 | ||
Securities lending income receivable | 6,096 | ||
Tax reclaims receivable | 298,951 | ||
Receivable from affiliates | 10,036 | ||
Directors’ deferred compensation plan | 153,179 | ||
Other assets | 12,940 | ||
Total assets | 346,267,313 | ||
LIABILITIES | |||
Due to custodian - foreign currency, at value (cost $92,959) | 91,961 | ||
Payable for investments purchased | 5,650,997 | ||
Payable for capital shares redeemed | 250,192 | ||
Deposits for securities loaned | 3,037,308 | ||
Payable to affiliates: | |||
Investment advisory fee | 206,377 | ||
Administrative fee | 33,020 | ||
Distribution and service fees | 18,600 | ||
Sub-transfer agency fee | 8,595 | ||
Directors’ deferred compensation plan | 153,179 | ||
Accrued expenses | 180,132 | ||
Total liabilities | 9,630,361 | ||
NET ASSETS | $336,636,952 | ||
NET ASSETS CONSIST OF: | |||
Paid-in capital applicable to common stock | |||
(75,000,000 shares per class of $0.01 par value authorized) | $336,471,847 | ||
Distributable earnings | 165,105 | ||
Total | $336,636,952 | ||
NET ASSET VALUE PER SHARE | |||
Class A (based on net assets of $64,069,595 and 3,958,837 shares outstanding) | $16.18 | ||
Class C (based on net assets of $6,532,282 and 414,965 shares outstanding) | $15.74 | ||
Class I (based on net assets of $222,545,758 and 14,035,269 shares outstanding) | $15.86 | ||
Class R6 (based on net assets of $43,489,317 and 2,742,623 shares outstanding) | $15.86 | ||
OFFERING PRICE PER SHARE* | |||
Class A (100/95.25 of net asset value per share) | $16.99 | ||
* On sales of $50,000 or more, the offering price of Class A shares is reduced. | |||
See notes to financial statements. |
www.calvert.com CALVERT INTERNATIONAL OPPORTUNITIES FUND ANNUAL REPORT 13
CALVERT INTERNATIONAL OPPORTUNITIES FUND
STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 2019
INVESTMENT INCOME | |||
Dividend income (net of foreign taxes withheld of $777,880) | $7,621,515 | ||
Interest income | 62,042 | ||
Interest income - affiliated issuers | 15,000 | ||
Securities lending income, net | 108,261 | ||
Total investment income | 7,806,818 | ||
EXPENSES | |||
Investment advisory fee | 2,329,418 | ||
Administrative fee | 372,707 | ||
Distribution and service fees: | |||
Class A | 153,541 | ||
Class C | 68,253 | ||
Directors’ fees and expenses | 18,401 | ||
Custodian fees | 122,650 | ||
Transfer agency fees and expenses | 291,191 | ||
Accounting fees | 90,033 | ||
Professional fees | 48,686 | ||
Registration fees | 104,946 | ||
Reports to shareholders | 33,646 | ||
Miscellaneous | 56,743 | ||
Total expenses | 3,690,215 | ||
Waiver and/or reimbursement of expenses by affiliates | (57,786) | ||
Reimbursement of expenses-other | (7,693) | ||
Net expenses | 3,624,736 | ||
Net investment income | 4,182,082 | ||
REALIZED AND UNREALIZED GAIN (LOSS) | |||
Net realized gain (loss) on: | |||
Investment securities - unaffiliated issuers | (11,735,537) | ||
Foreign currency transactions | 22,500 | ||
(11,713,037) | |||
Net change in unrealized appreciation (depreciation) on: | |||
Investment securities - unaffiliated issuers | (11,583,748) | ||
Investment securities - affiliated issuers | 32,360 | ||
Foreign currency | (2,120) | ||
(11,553,508) | |||
Net realized and unrealized loss | (23,266,545) | ||
Net decrease in net assets resulting from operations | ($19,084,463 | ) | |
See notes to financial statements. |
14 www.calvert.com CALVERT INTERNATIONAL OPPORTUNITIES FUND ANNUAL REPORT
CALVERT INTERNATIONAL OPPORTUNITIES FUND
STATEMENTS OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS | Year Ended September 30, 2019 | Year Ended September 30, 2018 | |||||
Operations: | |||||||
Net investment income | $4,182,082 | $2,750,820 | |||||
Net realized gain (loss) | (11,713,037) | 24,703,738 | |||||
Net change in unrealized appreciation (depreciation) | (11,553,508) | (10,583,188) | |||||
Net increase (decrease) in net assets resulting from operations | (19,084,463) | 16,871,370 | |||||
Distributions to shareholders: | |||||||
Class A shares | (4,792,065) | (3,319,247) | |||||
Class C shares | (508,198) | (372,738) | |||||
Class I shares | (18,400,110) | (7,972,756) | |||||
Class Y shares | — | (3,481,600) | |||||
Total distributions to shareholders | (23,700,373) | (15,146,341) | |||||
Capital share transactions: | |||||||
Class A shares | 7,425,573 | 14,972,854 | |||||
Class C shares | (31,653) | 1,724,332 | |||||
Class I shares | 23,484,318 | 111,958,167 | |||||
Class R6 shares (1) | 44,198,523 | — | |||||
Class Y shares (2) | — | (45,149,615) | |||||
Net increase in net assets from capital share transactions | 75,076,761 | 83,505,738 | |||||
TOTAL INCREASE IN NET ASSETS | 32,291,925 | 85,230,767 | |||||
NET ASSETS | |||||||
Beginning of year | 304,345,027 | 219,114,260 | |||||
End of year | $336,636,952 | $304,345,027 | |||||
(1) For the period from the commencement of operations, February 1, 2019, to September 30, 2019. | |||||||
(2) Effective December 8, 2017, Class Y shares of the Fund converted to Class I shares at net asset value. Thereafter, Class Y shares were terminated. | |||||||
See notes to financial statements. |
www.calvert.com CALVERT INTERNATIONAL OPPORTUNITIES FUND ANNUAL REPORT 15
CALVERT INTERNATIONAL OPPORTUNITIES FUND
FINANCIAL HIGHLIGHTS
Year Ended September 30, | |||||||||||||||
CLASS A SHARES | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||
Net asset value, beginning | $18.86 | $18.70 | $14.78 | $14.58 | $16.42 | ||||||||||
Income from investment operations: | |||||||||||||||
Net investment income (1) | 0.18 | 0.17 | 0.03 | 0.15 | (2) | 0.14 | |||||||||
Net realized and unrealized gain (loss) | (1.51) | 1.20 | 4.04 | 0.63 | (0.83) | ||||||||||
Total from investment operations | (1.33) | 1.37 | 4.07 | 0.78 | (0.69) | ||||||||||
Distributions from: | |||||||||||||||
Net investment income | (0.23) | (0.24) | (0.15) | (0.11) | (0.18) | ||||||||||
Net realized gain | (1.12) | (0.97) | — | (0.47) | (0.97) | ||||||||||
Total distributions | (1.35) | (1.21) | (0.15) | (0.58) | (1.15) | ||||||||||
Total increase (decrease) in net asset value | (2.68) | 0.16 | 3.92 | 0.20 | (1.84) | ||||||||||
Net asset value, ending | $16.18 | $18.86 | $18.70 | $14.78 | $14.58 | ||||||||||
Total return (3) | (6.77 | %) | 7.62 | % | 27.89 | % | 5.49 | % | (4.32 | %) | |||||
Ratios to average net assets: (4) | |||||||||||||||
Total expenses | 1.37 | % | 1.38 | % | 1.48 | % | 1.49 | % | 1.69 | % | |||||
Net expenses | 1.35 | % | 1.38 | % | 1.48 | % | 1.46 | % | 1.66 | % | |||||
Net investment income | 1.15 | % | 0.91 | % | 0.18 | % | 1.07 | % | (2) | 0.88 | % | ||||
Portfolio turnover | 60 | % | 60 | % | 158 | % | 52 | % | 51 | % | |||||
Net assets, ending (in thousands) | $64,070 | $65,994 | $50,552 | $107,429 | $99,908 | ||||||||||
(1) Computed using average shares outstanding. | |||||||||||||||
(2) Amount includes a non-recurring refund for overbilling of prior years’ custody out-of-pocket fees. This amounted to $0.006 per share and 0.04% of average net assets. | |||||||||||||||
(3) Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges, if any. | |||||||||||||||
(4) Total expenses do not reflect amounts reimbursed and/or waived by the adviser and certain of its affiliates, if applicable. Net expenses are net of all reductions and represent the net expenses paid by the Fund. | |||||||||||||||
See notes to financial statements. |
16 www.calvert.com CALVERT INTERNATIONAL OPPORTUNITIES FUND ANNUAL REPORT
CALVERT INTERNATIONAL OPPORTUNITIES FUND
FINANCIAL HIGHLIGHTS
Year Ended September 30, | |||||||||||||||
CLASS C SHARES | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||
Net asset value, beginning | $18.37 | $18.29 | $14.43 | $14.28 | $16.08 | ||||||||||
Income from investment operations: | |||||||||||||||
Net investment income (loss) (1) | 0.06 | 0.03 | (0.04) | 0.01 | (2) | (0.03) | |||||||||
Net realized and unrealized gain (loss) | (1.47) | 1.18 | 3.91 | 0.61 | (0.76) | ||||||||||
Total from investment operations | (1.41) | 1.21 | 3.87 | 0.62 | (0.79) | ||||||||||
Distributions from: | |||||||||||||||
Net investment income | (0.10) | (0.16) | (0.01) | — | (0.04) | ||||||||||
Net realized gain | (1.12) | (0.97) | — | (0.47) | (0.97) | ||||||||||
Total distributions | (1.22) | (1.13) | (0.01) | (0.47) | (1.01) | ||||||||||
Total increase (decrease) in net asset value | (2.63) | 0.08 | 3.86 | 0.15 | (1.80) | ||||||||||
Net asset value, ending | $15.74 | $18.37 | $18.29 | $14.43 | $14.28 | ||||||||||
Total return (3) | (7.49 | %) | 6.92 | % | 26.83 | % | 4.46 | % | (5.09 | %) | |||||
Ratios to average net assets: (4) | |||||||||||||||
Total expenses | 2.12 | % | 2.13 | % | 2.61 | % | 2.67 | % | 2.72 | % | |||||
Net expenses | 2.10 | % | 2.13 | % | 2.30 | % | 2.44 | % | 2.50 | % | |||||
Net investment income (loss) | 0.38 | % | 0.18 | % | (0.24 | %) | 0.04 | % | (2) | (0.18 | %) | ||||
Portfolio turnover | 60 | % | 60 | % | 158 | % | 52 | % | 51 | % | |||||
Net assets, ending (in thousands) | $6,532 | $7,603 | $5,850 | $5,037 | $5,030 | ||||||||||
(1) Computed using average shares outstanding. | |||||||||||||||
(2) Amount includes a non-recurring refund for overbilling of prior years’ custody out-of-pocket fees. This amounted to $0.006 per share and 0.04% of average net assets. | |||||||||||||||
(3) Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges, if any. | |||||||||||||||
(4) Total expenses do not reflect amounts reimbursed and/or waived by the adviser and certain of its affiliates, if applicable. Net expenses are net of all reductions and represent the net expenses paid by the Fund. | |||||||||||||||
See notes to financial statements. |
www.calvert.com CALVERT INTERNATIONAL OPPORTUNITIES FUND ANNUAL REPORT 17
CALVERT INTERNATIONAL OPPORTUNITIES FUND
FINANCIAL HIGHLIGHTS
Year Ended September 30, | |||||||||||||||
CLASS I SHARES | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||
Net asset value, beginning | $18.52 | $18.42 | $14.56 | $14.38 | $16.19 | ||||||||||
Income from investment operations: | |||||||||||||||
Net investment income (1) | 0.22 | 0.23 | 0.17 | 0.19 | (2) | 0.19 | |||||||||
Net realized and unrealized gain (loss) | (1.49) | 1.17 | 3.90 | 0.63 | (0.80) | ||||||||||
Total from investment operations | (1.27) | 1.40 | 4.07 | 0.82 | (0.61) | ||||||||||
Distributions from: | |||||||||||||||
Net investment income | (0.27) | (0.33) | (0.21) | (0.17) | (0.23) | ||||||||||
Net realized gain | (1.12) | (0.97) | — | (0.47) | (0.97) | ||||||||||
Total distributions | (1.39) | (1.30) | (0.21) | (0.64) | (1.20) | ||||||||||
Total increase (decrease) in net asset value | (2.66) | 0.10 | 3.86 | 0.18 | (1.81) | ||||||||||
Net asset value, ending | $15.86 | $18.52 | $18.42 | $14.56 | $14.38 | ||||||||||
Total return (3) | (6.50 | %) | 7.95 | % | 28.44 | % | 5.84 | % | (3.86 | %) | |||||
Ratios to average net assets: (4) | |||||||||||||||
Total expenses | 1.12 | % | 1.13 | % | 1.07 | % | 1.17 | % | 1.15 | % | |||||
Net expenses | 1.10 | % | 1.13 | % | 1.07 | % | 1.16 | % | 1.15 | % | |||||
Net investment income | 1.41 | % | 1.23 | % | 1.06 | % | 1.35 | % | (2) | 1.22 | % | ||||
Portfolio turnover | 60 | % | 60 | % | 158 | % | 52 | % | 51 | % | |||||
Net assets, ending (in thousands) | $222,546 | $230,748 | $115,698 | $69,319 | $40,833 | ||||||||||
(1) Computed using average shares outstanding. | |||||||||||||||
(2) Amount includes a non-recurring refund for overbilling of prior years’ custody out-of-pocket fees. This amounted to $0.008 per share and 0.06% of average net assets. | |||||||||||||||
(3) Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges, if any. | |||||||||||||||
(4) Total expenses do not reflect amounts reimbursed and/or waived by the adviser and certain of its affiliates, if applicable. Net expenses are net of all reductions and represent the net expenses paid by the Fund. | |||||||||||||||
See notes to financial statements. |
18 www.calvert.com CALVERT INTERNATIONAL OPPORTUNITIES FUND ANNUAL REPORT
CALVERT INTERNATIONAL OPPORTUNITIES FUND
FINANCIAL HIGHLIGHTS
CLASS R6 SHARES | Period Ended September 30, 2019(1) | |||
Net asset value, beginning | $15.14 | |||
Income from investment operations: | ||||
Net investment income (2) | 0.16 | |||
Net realized and unrealized gain | 0.56 | |||
Total from investment operations | 0.72 | |||
Total increase in net asset value | 0.72 | |||
Net asset value, ending | $15.86 | |||
Total return (3) | 4.76 | % | (4) | |
Ratios to average net assets: (5) | ||||
Total expenses | 1.08 | % | (6) | |
Net expenses | 1.05 | % | (6) | |
Net investment income | 1.53 | % | (6) | |
Portfolio turnover | 60 | % | (7) | |
Net assets, ending (in thousands) | $43,489 | |||
(1) For the period from the commencement of operations, February 1, 2019, to September 30, 2019. | ||||
(2) Computed using average shares outstanding. | ||||
(3) Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges, if any. | ||||
(4) Not annualized. | ||||
(5) Total expenses do not reflect amounts reimbursed and/or waived by the adviser and certain of its affiliates, if applicable. Net expenses are net of all reductions and represent the net expenses paid by the Fund. | ||||
(6) Annualized. | ||||
(7) For the year ended September 30, 2019. | ||||
See notes to financial statements. |
www.calvert.com CALVERT INTERNATIONAL OPPORTUNITIES FUND ANNUAL REPORT 19
NOTES TO FINANCIAL STATEMENTS
NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES
Calvert International Opportunities Fund (the Fund) is a diversified series of Calvert World Values Fund, Inc. (the Corporation). The Corporation is a Maryland corporation registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company. The investment objective of the Fund is to seek long-term capital appreciation. The Fund invests primarily in common and preferred stocks of non-U.S. small-cap to mid-cap companies.
The Fund offers four classes of shares. Class A shares are generally sold subject to a sales charge imposed at time of purchase. A contingent deferred sales charge of 0.80% may apply to certain redemptions of Class A shares for accounts for which no sales charge was paid, if redeemed within 12 months of purchase. Class C shares are sold without a front-end sales charge, and with certain exceptions, are charged a contingent deferred sales charge of 1% on shares redeemed within 12 months of purchase. Class C shares are only available for purchase through a financial intermediary. Effective January 25, 2019, Class C shares generally automatically convert to Class A shares ten years after their purchase as described in the Fund’s prospectus. Class I and Class R6 shares are sold at net asset value, are not subject to a sales charge and are sold only to certain eligible investors. Each class represents a pro rata interest in the Fund, but votes separately on class-specific matters and is subject to different expenses.
The Fund applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services – Investment Companies (ASC 946). Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements.
A. Investment 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 (the Board) to value its investments wherever possible. Investments for which market quotations are not available or deemed not reliable are fair valued in good faith under the direction of the Board.
U.S. generally accepted accounting principles (U.S. 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 methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Valuation techniques used to value the Fund’s investments by major category are as follows:
Equity Securities. Equity securities (including warrants and rights) listed on a U.S. securities exchange generally are valued at the last sale or closing price as reported by an independent pricing service on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. Equity securities listed on the NASDAQ Global or Global Select Market are valued at the NASDAQ official closing price and are categorized as Level 1 in the hierarchy. Unlisted or listed securities for which closing sales prices or closing quotations are not available are valued at the mean between the latest available bid and ask prices and are categorized as Level 2 in the hierarchy. The daily valuation of exchange-traded foreign securities generally is determined as of the close of trading on the principal exchange on which such securities trade. Events occurring after the close of trading on foreign exchanges may result in adjustments to the valuation of foreign securities to more accurately reflect their fair value as of the close of regular trading on the New York Stock Exchange. When valuing foreign equity securities that meet certain criteria, the Fund’s Board has approved the use of a fair value service that values such securities to reflect market trading that occurs after the close of the applicable foreign markets of comparable securities or other instruments that have a strong correlation to the fair-valued securities. Such securities are categorized as Level 2 in the hierarchy.
Debt Securities. Debt securities are generally valued on the basis of valuations provided by third party pricing services, as derived from such services’ pricing models. Inputs to the models may include, but are not limited to, reported trades, executable bid and ask prices, broker/dealer quotations, prices or yields of securities with similar characteristics, interest rates, anticipated prepayments, benchmark curves or information pertaining to the issuer, as well as industry and economic events. Accordingly, debt securities are generally categorized as Level 2 in the hierarchy. Short-term debt securities of sufficient credit quality purchased with remaining maturities of sixty days or less for which a valuation from a third party pricing service is not readily available may be valued at amortized cost, which approximates fair value, and are categorized as Level 2 in the hierarchy.
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Other Securities. Investments in registered investment companies (including money market funds) that do not trade on an exchange are valued at the net asset value per share on the valuation day and are categorized as Level 1 in the hierarchy.
Fair Valuation. If a market value cannot be determined for a security using the methodologies described above, or if, in the good faith opinion of the Fund’s adviser, the market value does not constitute a readily available market quotation, or if a significant event has occurred that would materially affect the value of the security, the security will be fair valued as determined in good faith by or at the direction of the Board in a manner that most fairly reflects the security’s “fair value”, which is the amount that the Fund might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of relevant factors, which are likely to vary from one pricing context to another. These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issuer or of comparable companies or entities, quotations or relevant information obtained from broker/dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the company’s or entity’s financial statements, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.
The values assigned to fair value investments are based on available information and do not necessarily represent amounts that might ultimately be realized. Further, due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed, and the differences could be material.
The following table summarizes the market value of the Fund’s holdings as of September 30, 2019, based on the inputs used to value them:
Assets | Level 1 | Level 2 | Level 3 | Total | |||||||||
Common Stocks | |||||||||||||
Canada | $ | 10,207,740 | $ | — | $ | — | $ | 10,207,740 | |||||
Netherlands | 748,484 | 14,717,019 | — | 15,465,503 | |||||||||
Sweden | 1,765,965 | 21,167,994 | — | 22,933,959 | |||||||||
United States | 1,815,117 | — | — | 1,815,117 | |||||||||
Other Countries(1) | — | 282,374,558 | — | 282,374,558 | |||||||||
Total Common Stocks | $ | 14,537,306 | $ | 318,259,571 | (2) | $ | — | $ | 332,796,877 | ||||
High Social Impact Investments | — | 1,243,654 | — | 1,243,654 | |||||||||
Short Term Investment of Cash Collateral for Securities Loaned | 3,037,308 | — | — | 3,037,308 | |||||||||
Total Investments | $ | 17,574,614 | $ | 319,503,225 | $ | — | $ | 337,077,839 | |||||
(1) For further breakdown of equity securities by country, please refer to the Schedule of Investments. | |||||||||||||
(2) Includes foreign equity securities whose values were adjusted to reflect market trading of comparable securities or other correlated instruments that occurred after the close of trading in their applicable foreign markets. |
Level 3 investments at the beginning and/or end of the period in relation to net assets were not significant and accordingly, a reconciliation of Level 3 assets for the year ended September 30, 2019 is not presented.
B. Investment Transactions and Income: Investment transactions for financial statement purposes 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 for dividends received in cash and/or securities or, in the case of dividends on certain foreign securities, as soon as the Fund is informed of the ex-dividend date. Non-cash dividends are recorded at the fair value of the securities received. Withholding taxes on foreign dividends, if any, have been provided for in accordance with the Fund’s understanding of the applicable country’s tax rules and rates. Distributions received that represent a return of capital are recorded as a reduction of cost of investments. Distributions received that represent a capital gain are recorded as a realized gain. Interest income, which includes amortization of premium and accretion of discount on debt securities, is accrued as earned.
C. Share Class Accounting: Realized and unrealized gains and losses and net investment income and losses, other than class-specific expenses, are allocated daily to each class of shares based upon the relative net assets of each class to the total net assets of the Fund. Expenses arising in connection with a specific class are charged directly to that class. Sub-accounting, recordkeeping and similar administrative fees payable to financial intermediaries, which are a component of transfer agency fees and expenses on the Statement of Operations, are not allocated to Class R6 shares.
D. 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
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exchange rate. Security transactions, income, and expenses are translated at the prevailing rate of exchange on the date of the event. Recognized gains or losses on investment transactions attributable to changes in foreign currency exchange rates are recorded for financial statement purposes as net realized gains and losses on investments. That portion of unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed.
E. 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 (excluding Rule 144A securities) is included at the end of the Schedule of Investments.
F. 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 U.S. GAAP; accordingly, periodic reclassifications are made within the Fund’s capital accounts to reflect income and gains available for distribution under income tax regulations.
G. Estimates: The preparation of financial statements in conformity with U.S. GAAP 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 increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
H. Indemnifications: The Corporation’s By-Laws provide for indemnification for Directors or officers of the Corporation and certain other parties, to the fullest extent permitted by Maryland law and the 1940 Act, provided certain conditions are met. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.
I. 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 from the date of filing.
NOTE 2 — RELATED PARTY TRANSACTIONS
The investment advisory fee is earned by Calvert Research and Management (CRM), a subsidiary of Eaton Vance Management (EVM), as compensation for investment advisory services rendered to the Fund. Pursuant to the investment advisory agreement, CRM receives a fee, payable monthly, at the annual rate of 0.75% of the Fund’s average daily net assets. For the year ended September 30, 2019, the investment advisory fee amounted to $2,329,418.
Eaton Vance Advisers International Ltd. (EVAIL), an indirect, wholly-owned subsidiary of Eaton Vance Corp., provides sub-advisory services to the Fund pursuant to a sub-advisory agreement with CRM. Sub-advisory fees are paid by CRM from its investment advisory fee.
CRM and EVAIL have agreed to reimburse the Fund’s operating expenses to the extent that total annual operating expenses (relating to ordinary operating expenses only and excluding expenses such as brokerage commissions, acquired fund fees and expenses of unaffiliated funds, interest expense, taxes or litigation expenses) exceed 1.34%, 2.09% and 1.09% (1.43%, 2.26% and 1.16% prior to February 1, 2019) of the Fund’s average daily net assets for Class A, Class C and Class I, respectively, and 1.05% of the Fund’s average daily net assets for Class R6. The expense reimbursement agreement may be changed or terminated after January 31, 2020. For the year ended September 30, 2019, CRM and EVAIL waived or reimbursed expenses in total of $57,786.
The administrative fee is earned by CRM as compensation for administrative services rendered to the Fund. The fee is computed at an annual rate of 0.12% of the Fund’s average daily net assets attributable to Class A, Class C, Class I and Class R6 and is payable monthly. For the year ended September 30, 2019, CRM was paid administrative fees of $372,707.
The Fund has in effect a distribution plan for Class A shares (Class A Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class A Plan, the Fund pays Eaton Vance Distributors, Inc. (EVD), an affiliate of CRM and the Fund’s principal underwriter, a distribution and service fee of 0.25% per annum of its average daily net assets attributable to Class A shares for distribution services and facilities provided to the Fund by EVD, as well as for personal services and/or the maintenance of shareholder accounts. The Fund also has in effect a distribution plan for Class C shares (Class C Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class C Plan, the Fund pays EVD amounts equal to 0.75% per annum of its average daily net assets attributable to Class C shares for providing ongoing distribution services and facilities to the Fund. In addition, pursuant to the Class C Plan, the Fund also makes payments of service fees to EVD, financial intermediaries and other persons in amounts
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equal to 0.25% per annum of its average daily net assets attributable to that class. Service fees paid or accrued are for personal services and/or the maintenance of shareholder accounts. Distribution and service fees paid or accrued for the year ended September 30, 2019 amounted to $153,541 and $68,253 for Class A shares and Class C shares, respectively.
The Fund was informed that EVD received $23,091 as its portion of the sales charge on sales of Class A shares for the year ended September 30, 2019. The Fund was also informed that EVD received $635 of contingent deferred sales charges (CDSC) paid by Class C shareholders and no CDSC paid by Class A shareholders for the same period.
EVM provides sub-transfer agency and related services to the Fund pursuant to a Sub-Transfer Agency Support Services Agreement. For the year ended September 30, 2019, sub-transfer agency fees and expenses incurred to EVM amounted to $35,743 and are included in transfer agency fees and expenses on the Statement of Operations.
Each Director of the Fund who is not an employee of CRM or its affiliates receives a fee of $3,000 for each Board meeting attended in person and $2,000 for each Board meeting attended by phone plus an annual fee of $117,000, and $1,500 for each Committee meeting attended in person and $1,000 for each Committee meeting attended by phone plus an annual Committee fee of $2,500. The Board chair receives an additional $15,000 annual retainer and Committee chairs receive an additional $6,000 annual retainer. Eligible Directors may participate in a Deferred Compensation Plan (the Plan). Amounts deferred under the Plan are treated as though equal dollar amounts had been invested in shares of the Fund or other Calvert funds selected by the Directors. The Fund purchases shares of the funds selected equal to the dollar amounts deferred under the Plan, resulting in an asset equal to the deferred compensation liability. Obligations of the Plan are paid solely from the Fund’s assets. Directors’ fees are allocated to each of the Calvert funds served. Salaries and fees of officers and Directors of the Fund who are employees of CRM or its affiliates are paid by CRM. In addition, an advisory council was established to aid the Board and CRM in advancing the cause of responsible investing through original scholarship and thought leadership. The advisory council consists of CRM’s Chief Executive Officer and four additional members. Each member (other than CRM’s Chief Executive Officer) receives annual compensation of $75,000, which is being reimbursed by Calvert Investment Management, Inc. (CIM), the Calvert funds’ former investment adviser and Ameritas Holding Company, CIM’s parent company, through the end of 2019. For the year ended September 30, 2019, the Fund’s allocated portion of such expense and reimbursement was $7,693, which are included in miscellaneous expense and reimbursement of expenses-other, respectively, on the Statement of Operations.
NOTE 3 — INVESTMENT ACTIVITY
During the year ended September 30, 2019, the cost of purchases and proceeds from sales of investments, other than short-term securities, were $244,107,562 and $182,301,244, respectively.
NOTE 4 — DISTRIBUTIONS TO SHAREHOLDERS AND INCOME TAX INFORMATION
The tax character of distributions declared for the years ended September 30, 2019 and September 30, 2018 was as follows:
Year Ended September 30, | |||||||
2019 | 2018 | ||||||
Ordinary income | $11,108,689 | $15,146,341 | |||||
Long-term capital gains | $12,591,684 | $— |
During the year ended September 30, 2019, distributable earnings was decreased by $1,194,830 and paid-in capital was increased by $1,194,830 due to the Fund’s use of equalization accounting. Tax equalization accounting allows the Fund to treat as a distribution that portion of redemption proceeds representing a redeeming shareholder’s portion of undistributed taxable income and net capital gains. These reclassifications had no effect on the net assets or net asset value per share of the Fund.
As of September 30, 2019, the components of distributable earnings (accumulated loss) on a tax basis were as follows:
Undistributed ordinary income | $4,713,185 | ||
Post October capital losses | ($8,941,738 | ) | |
Net unrealized appreciation (depreciation) | $4,393,658 |
At September 30, 2019, the Fund had a net capital loss of $8,941,738 attributable to security transactions incurred after October 31, 2018 that it has elected to defer. This net capital loss is treated as arising on the first day of the Fund’s taxable year ending September 30, 2020.
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The cost and unrealized appreciation (depreciation) of investments of the Fund at September 30, 2019, as determined on a federal income tax basis, were as follows:
Aggregate cost | $332,673,476 | ||
Gross unrealized appreciation | $22,418,152 | ||
Gross unrealized depreciation | (18,013,789) | ||
Net unrealized appreciation (depreciation) | $4,404,363 |
NOTE 5 — SECURITIES LENDING
To generate additional income, the Fund may lend its securities pursuant to a securities lending agency agreement with State Street Bank and Trust Company (SSBT), the securities lending agent. Security loans are subject to termination by the Fund at any time and, therefore, are not considered illiquid investments. The Fund requires that the loan be continuously collateralized by either cash or securities as collateral equal at all times to at least 102% of the market value of the domestic securities loaned and 105% of the market value of the international securities loaned (if applicable). The market value of securities loaned is determined daily and any additional required collateral is delivered to the Fund on the next business day. Cash collateral is generally invested in a money market fund registered under the 1940 Act that is managed by an affiliate of SSBT. Any gain or loss in the market price of the loaned securities that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Fund. Income earned on the investment of collateral, net of broker rebates and other expenses incurred by the securities lending agent, is split between the Fund and the securities lending agent on the basis of agreed upon contractual terms. Non-cash collateral, if any, is held by the lending agent on behalf of the Fund and cannot be sold or re-pledged by the Fund; accordingly, such collateral is not reflected in the Statement of Assets and Liabilities.
The risks associated with lending portfolio securities include, but are not limited to, possible delays in receiving additional collateral or in the recovery of the loaned securities, possible loss of rights to the collateral should the borrower fail financially, as well as risk of loss in the value of the collateral or the value of the investments made with the collateral. The securities lending agent shall indemnify the Fund in the case of default of any securities borrower.
At September 30, 2019, the total value of securities on loan was $9,425,223 and the total value of collateral received was $9,922,217, comprised of cash of $3,037,308 and U.S. government and/or agencies securities of $6,884,909.
The following table provides a breakdown of securities lending transactions accounted for as secured borrowings, the obligations by class of collateral pledged, and the remaining contractual maturity of those transactions as of September 30, 2019.
Remaining Contractual Maturity of the Transactions | |||||||||||||||
Overnight and Continuous | <30 days | 30 to 90 days | >90 days | Total | |||||||||||
Securities Lending Transactions | |||||||||||||||
Common Stocks | $9,922,217 | $— | $— | $— | $9,922,217 |
The carrying amount of the liability for deposits for securities loaned at September 30, 2019 approximated its fair value. If measured at fair value, such liability would have been considered as Level 2 in the fair value hierarchy (see Note 1A) at September 30, 2019.
NOTE 6 — LINE OF CREDIT
The Fund participates with other funds managed by CRM in a $100 million ($62.5 million prior to June 21, 2019) committed unsecured line of credit agreement with SSBT, which is in effect through June 19, 2020. Borrowings may be made for temporary or emergency purposes only. Borrowings bear interest at the higher of the One-Month London Interbank Offered Rate (LIBOR) in effect that day or the overnight Federal Funds Rate, plus 1.00% per annum. A commitment fee of 0.20% per annum is incurred on the unused portion of the committed facility. An administrative fee of $37,500 was incurred in connection with the increase of the facility in June 2019. These fees are allocated to all participating funds. Because the line of credit is not available exclusively to the Fund, it may be unable to borrow some or all of its requested amounts at any particular time. The Fund had no borrowings outstanding pursuant to this line of credit at September 30, 2019. The Fund did not have any significant borrowings or allocated fees during the year ended September 30, 2019.
Effective at the close of business on October 28, 2019, the Fund and other participating funds managed by CRM terminated the line of credit agreement. Effective October 29, 2019, the Fund participates with other funds managed by EVM and its affiliates, including CRM, in an $800 million unsecured line of credit agreement with a syndicate of banks, which is in effect through October 27, 2020, at terms that are more favorable than the terminated agreement.
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NOTE 7 — AFFILIATED COMPANIES
The Fund has invested a portion of its assets designated for high social impact investments in notes (the Notes) issued by Calvert Impact Capital, Inc. (CIC), formerly the Calvert Social Investment Foundation, pursuant to exemptive relief granted by the U.S. Securities and Exchange Commission (the SEC). The Calvert funds first obtained an exemptive order for these investments in 1998. At that time, there was a significant overlap between the Fund Board members and CIC Board members as well as certain other affiliations between CIC and affiliates of the Fund’s investment adviser. In connection with the appointment of CRM as the Fund’s investment adviser, the Calvert funds filed a request for a new exemptive order from the SEC to permit additional investments in the Notes. On October 28, 2019, the SEC issued the requested new exemptive order, allowing the Fund to make additional investments in the Notes. While the overlap between the Fund Board members and CIC Board members generally has decreased since the original order was granted, certain potential points of affiliation between the Fund and CIC remain. CRM has licensed use of the Calvert name to CIC and provides other types of support. CRM’s President and Chief Executive Officer (and the only director/trustee on the Fund Board that is an “interested person” of the Funds) serves on the CIC Board, along with two members of the Advisory Council to the Fund Board and a second officer of CRM. In addition, another director/trustee on the Fund Board serves as a director emeritus on the CIC Board and a member of the Advisory Council to the Fund Board serves as a director emerita on the CIC Board.
At September 30, 2019, the value of the Fund’s investment in the Notes was $994,710, which represents 0.3% of the Fund’s net assets. Transactions in the Notes by the Fund for the year ended September 30, 2019 were as follows:
Name of Issuer | Value, beginning of period | Purchases | Sales Proceeds | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Value, end of period | Interest Income | Capital Gain Distributions Received | Principal Amount, end of period | ||||||||||||||||||
High Social Impact Investments | |||||||||||||||||||||||||||
Calvert Impact Capital, Inc., Community Investment Notes, 1.50%, 12/15/19(1) | $962,350 | $— | $— | $— | $32,360 | $994,710 | $15,000 | $— | $1,000,000 | ||||||||||||||||||
(1) Restricted security. |
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NOTE 8 — CAPITAL SHARES
Transactions in capital shares for the years ended September 30, 2019 and September 30, 2018 were as follows:
Year Ended September 30, 2019 | Year Ended September 30, 2018 | ||||||||||
Shares | Amount | Shares | Amount | ||||||||
Class A | |||||||||||
Shares sold | 1,168,879 | $18,769,355 | 1,433,775 | $27,113,992 | |||||||
Reinvestment of distributions | 294,011 | 4,571,864 | 175,001 | 3,161,116 | |||||||
Shares redeemed | (1,049,073 | ) | (16,633,747 | ) | (813,792 | ) | (15,302,254 | ) | |||
Converted from Class C | 46,183 | 718,101 | — | — | |||||||
Net increase | 460,000 | $7,425,573 | 794,984 | $14,972,854 | |||||||
Class C | |||||||||||
Shares sold | 116,602 | $1,761,633 | 146,091 | $2,698,914 | |||||||
Reinvestment of distributions | 30,690 | 467,100 | 18,636 | 329,666 | |||||||
Shares redeemed | (98,857 | ) | (1,542,285 | ) | (70,780 | ) | (1,304,248 | ) | |||
Converted to Class A | (47,247 | ) | (718,101 | ) | — | — | |||||
Net increase (decrease) | 1,188 | ($31,653 | ) | 93,947 | $1,724,332 | ||||||
Class I | |||||||||||
Shares sold | 8,454,598 | $130,605,151 | 5,102,338 | $94,476,812 | |||||||
Reinvestment of distributions | 1,020,569 | 15,512,650 | 435,520 | 7,704,353 | |||||||
Shares redeemed | (7,900,717 | ) | (122,633,483 | ) | (2,182,140 | ) | (40,327,347 | ) | |||
Converted from Class Y | — | — | 2,825,040 | 50,104,349 | |||||||
Net increase | 1,574,450 | $23,484,318 | 6,180,758 | $111,958,167 | |||||||
Class R6 (1) | |||||||||||
Shares sold | 2,803,060 | $45,144,095 | — | $— | |||||||
Shares redeemed | (60,437 | ) | (945,572 | ) | — | — | |||||
Net increase | 2,742,623 | $44,198,523 | — | $— | |||||||
Class Y (2) | |||||||||||
Shares sold | — | $— | 268,609 | $4,778,865 | |||||||
Reinvestment of distributions | — | — | 176,372 | 3,028,308 | |||||||
Shares redeemed | — | — | (159,596 | ) | (2,852,439 | ) | |||||
Converted to Class I | — | — | (2,909,948 | ) | (50,104,349 | ) | |||||
Net decrease | — | $— | (2,624,563 | ) | ($45,149,615 | ) | |||||
(1) For the period from the commencement of operations, February 1, 2019, to September 30, 2019. | |||||||||||
(2) Effective December 8, 2017, Class Y shares of the Fund converted to Class I shares at net asset value. Thereafter, Class Y shares were terminated. | |||||||||||
At September 30, 2019, Calvert Growth Allocation Fund and Calvert Moderate Allocation Fund owned in the aggregate 10.5% of the value of the outstanding shares of the Fund. |
NOTE 9 — RISKS ASSOCIATED WITH FOREIGN INVESTMENTS
Investing in foreign securities involves additional risks relating to political, social, and economic developments abroad. Other risks result from differences between regulations that apply to U.S. and foreign issuers and markets, and the potential for foreign markets to be less liquid and more volatile than U.S. markets. Securities that trade or are denominated in currencies other than the U.S. dollar may be adversely affected by fluctuations in currency exchange rates.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors
Calvert World Values Fund, Inc.:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Calvert International Opportunities Fund (the Fund), a series of Calvert World Values Fund, Inc., including the schedule of investments, as of September 30, 2019, the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two‑year period then ended, and the related notes (collectively, the financial statements) and the financial highlights for each of the years or periods in the five‑year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of September 30, 2019, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two‑year period then ended, and the financial highlights for each of the years or periods in the five‑year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of September 30, 2019, by correspondence with the custodian and brokers. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
![kpmglogoa10.jpg](https://capedge.com/proxy/N-CSR/0001628280-19-014532/kpmglogoa10.jpg)
We have served as the auditor of one or more of the Calvert Funds since 2002.
Philadelphia, Pennsylvania
November 20, 2019
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FEDERAL TAX INFORMATION
The Form 1099-DIV you receive in February 2020 will show the tax status of all distributions paid to your account in calendar year 2019. Shareholders are advised to consult their own tax adviser with respect to the tax consequences of their investment in the Fund. As required by the Internal Revenue Code and/or regulations, shareholders must be notified regarding the status of qualified dividend income for individuals, the foreign tax credit and capital gains dividends.
Qualified Dividend Income. For the fiscal year ended September 30, 2019, the Fund designates approximately $6,018,253, or up to the maximum amount of such dividends allowable pursuant to the Internal Revenue Code, as qualified dividend income eligible for the reduced tax rate of 15%.
Foreign Tax Credit. For the fiscal year ended September 30, 2019, the Fund paid foreign taxes of $621,958 and recognized foreign source income of $7,237,440.
Capital Gains Dividends. The Fund hereby designates as a capital gain dividend with respect to the taxable year ended September 30, 2019, $532,454 or, if subsequently determined to be different, the net capital gain of such year.
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MANAGEMENT AND ORGANIZATION
Fund Management. The Directors of Calvert World Values Fund, Inc. (the Corporation) are responsible for the overall management and supervision of the Corporation’s affairs. The Directors and officers of the Corporation are listed below. Except as indicated, each individual has held the office shown or other offices in the same company for the last five years. Directors and officers of the Corporation hold indefinite terms of office. The “Independent Directors” consist of those Directors who are not “interested persons” of the Corporation, as that term is defined under the 1940 Act. The business address of each Director and officer, with the exception of Ms. Gemma and Mr. Kirchner, is 1825 Connecticut Avenue NW, Suite 400, Washington, DC 20009. As used below, “CRM” refers to Calvert Research and Management. Each Director oversees 39 funds in the Calvert fund complex. Each officer serves as an officer of certain other Calvert funds.
Name and Year of Birth | Corporation Position(s) | Position Start Date | Principal Occupation(s) and Other Directorships During Past Five Years and Other Relevant Experience |
Interested Director | |||
John H. Streur(1) 1960 | Director & President | 2015 | President and Chief Executive Officer of Calvert Research and Management (since December 31, 2016). President and Chief Executive Officer of Calvert Investments, Inc. (January 2015 - December 2016); Chief Executive Officer of Calvert Investment Distributors, Inc. (August 2015 - December 2016); Chief Compliance Officer of Calvert Investment Management, Inc. (August 2015 - April 2016); President and Director, Portfolio 21 Investments, Inc. (through October 2014); President, Chief Executive Officer and Director, Managers Investment Group LLC (through January 2012); President and Director, The Managers Funds and Managers AMG Funds (through January 2012). Other Directorships in the Last Five Years. Portfolio 21 Investments, Inc. (asset management) (through October 2014); Managers Investment Group LLC (asset management) (through January 2012); The Managers Funds (asset management) (through January 2012); Managers AMG Funds (asset management) (through January 2012); Calvert Impact Capital, Inc. |
Independent Directors | |||
Richard L. Baird, Jr. 1948 | Director | 2005 | Regional Disaster Recovery Lead, American Red Cross of Greater Pennsylvania (since 2017). Volunteer, American Red Cross (since 2015). Former President and CEO of Adagio Health Inc. (retired in 2014) in Pittsburgh, PA. Other Directorships in the Last Five Years. None. |
Alice Gresham Bullock 1950 | Chair & Director | 2016 | Professor Emerita at Howard University School of Law. Dean Emerita of Howard University School of Law and Deputy Director of the Association of American Law Schools (1992-1994). Other Directorships in the Last Five Years. None. |
Cari M. Dominguez 1949 | Director | 2016 | Former Chair of the U.S. Equal Employment Opportunity Commission. Other Directorships in the Last Five Years. Manpower, Inc. (employment agency); Triple S Management Corporation (managed care); National Association of Corporate Directors. |
John G. Guffey, Jr.(2) 1948 | Director | 1992 | President of Aurora Press Inc., a privately held publisher of trade paperbacks (since January 1997). Other Directorships in the Last Five Years. Calvert Impact Capital, Inc. (through December 31, 2018); Calvert Ventures, LLC. |
Miles D. Harper, III 1962 | Director | 2005 | Partner, Carr Riggs & Ingram (public accounting firm) since October 2014. Partner, Gainer Donnelly & Desroches (public accounting firm) (now Carr Riggs & Ingram), November 1999 - September 2014). Other Directorships in the Last Five Years. Bridgeway Funds (9) (asset management). |
Joy V. Jones 1950 | Director | 2005 | Attorney. Other Directorships in the Last Five Years. Conduit Street Restaurants SUD 2 Limited; Palm Management Restaurant Corporation. |
Anthony A. Williams 1951 | Director | 2016 | CEO and Executive Director of the Federal City Council (July 2012 to present); Senior Adviser and Independent Consultant for McKenna Long & Aldridge LLP (September 2011 to present); Executive Director of Global Government Practice at the Corporate Executive Board (January 2010 to January 2012). Other Directorships in the Last Five Years. Freddie Mac; Evoq Properties/ Meruelo Maddux Properties, Inc. (real estate management); Weston Solutions, Inc. (environmental services); Bipartisan Policy Center’s Debt Reduction Task Force; Chesapeake Bay Foundation; Catholic University of America; Urban Institute (research organization). |
www.calvert.com CALVERT INTERNATIONAL OPPORTUNITIES FUND ANNUAL REPORT (Unaudited) 29
Principal Officers who are not Directors | |||
Name and Year of Birth | Corporation Position(s) | Position Start Date | Principal Occupation(s) During Past Five Years |
Hope L. Brown 1973 | Chief Compliance Officer | 2014 | Chief Compliance Officer of 39 registered investment companies advised by CRM (since 2014). Vice President and Chief Compliance Officer, Wilmington Funds (2012-2014). |
Maureen A. Gemma(3) 1960 | Secretary, Vice President and Chief Legal Officer | 2016 | Vice President of CRM and officer of 39 registered investment companies advised by CRM (since 2016). Also Vice President of Eaton Vance and certain of its affiliates and officer of 162 registered investment companies advised or administered by Eaton Vance. |
James F. Kirchner(3) 1967 | Treasurer | 2016 | Vice President of CRM and officer of 39 registered investment companies advised by CRM (since 2016). Also Vice President of Eaton Vance and certain of its affiliates and officer of 162 registered investment companies advised or administered by Eaton Vance. |
(1) | Mr. Streur is an interested person of the Fund because of his positions with the Fund’s adviser and certain affiliates. |
(2) | Mr. Guffey is currently married to Rebecca L. Adamson, who serves as a member of the Advisory Council. |
(3) | The business address for Ms. Gemma and Mr. Kirchner is Two International Place, Boston, MA 02110. |
The SAI for the Fund includes additional information about the Directors and officers of the Fund and can be obtained without charge on Calvert’s website at www.calvert.com or by calling 1-800-368-2745.
30 www.calvert.com CALVERT INTERNATIONAL OPPORTUNITIES FUND ANNUAL REPORT (Unaudited)
IMPORTANT NOTICES
Privacy. The Calvert Funds and Calvert Research and Management are committed to ensuring your financial privacy. Each of the financial institutions identified below has in effect the following policy (“Privacy Policy”) with respect to nonpublic personal information about its customers:
• | Only such information received from you, through application forms or otherwise, and information about your Calvert fund transactions will be collected. This may include information such as name, address, social security number, tax status, account balances and transactions. |
• | None of such information about you (or former customers) will be disclosed to anyone, except as permitted by law (which includes disclosure to employees necessary to service your account). In the normal course of servicing a customer’s account, Calvert Research and Management may share information with unaffiliated third parties that perform various required services such as transfer agents, custodians and broker-dealers. |
• | Policies and procedures (including physical, electronic and procedural safeguards) are in place that are designed to protect the confidentiality of such information. |
• | The Funds reserve the right to change this Privacy Policy at any time upon proper notification to you. Customers may want to review the Funds’ Privacy Policy periodically for changes by accessing the link on our homepage: www.calvert.com. |
Our pledge of privacy applies to the following entities: the Calvert Family of Funds, Calvert Research and Management and their affiliated service providers, Eaton Vance Management and Eaton Vance Distributors, Inc. In addition, our Privacy Policy applies only to those Calvert customers who are individuals and who have a direct relationship with us. If a customer’s account (i.e., fund shares) is held in the name of a third-party financial advisor/broker-dealer, it is likely that only such advisor’s privacy policies apply to the customer. This notice supersedes all previously issued privacy disclosures. For more information about Calvert’s Privacy Policy, please call 1-800-368-2745.
Delivery of Shareholder Documents. The Securities and Exchange Commission (SEC) permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called “householding” and it helps eliminate duplicate mailings to shareholders. Calvert funds, or your financial intermediary, may household the mailing of your documents indefinitely unless you instruct Calvert funds, or your financial intermediary, otherwise. If you would prefer that your Calvert fund documents not be householded, please contact Calvert funds at 1-800-368-2745, or contact your financial intermediary. Your instructions that householding not apply to delivery of your Calvert fund documents will typically be effective within 30 days of receipt by Calvert funds or your financial intermediary. Separate statements will be generated for each separate account and will be householded as described above.
Portfolio Holdings. Each Calvert fund files a schedule of portfolio holdings on Part F to Form N-PORT with the SEC for the first and third quarters of each fiscal year. The Form N-PORT will be available on the Calvert funds’ website at www.calvert.com, by calling Calvert funds at 1-800-368-2745 or in the EDGAR database on the SEC’s website at www.sec.gov.
Proxy Voting. The Proxy Voting Guidelines that each Calvert fund uses to determine how to vote proxies relating to portfolio securities is provided as an Appendix to the fund’s Statement of Additional Information. The Statement of Additional Information can be obtained free of charge by calling the Calvert funds at 1-800-368-2745, by visiting the Calvert funds’ website at www.calvert.com or visiting the SEC’s website at www.sec.gov. Information regarding how a Calvert fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available by calling Calvert funds, by visiting the Calvert funds’ website at www.calvert.com or by visiting the SEC’s website at www.sec.gov.
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CALVERT INTERNATIONAL OPPORTUNITIES FUND | |
Investment Adviser and Administrator Calvert Research and Management 1825 Connecticut Avenue NW, Suite 400 Washington, DC 20009 | Transfer Agent DST Asset Manager Solutions, Inc. 2000 Crown Colony Drive Quincy, MA 02169 |
Investment Sub-Adviser Eaton Vance Advisers International Ltd. 125 Old Broad Street London, EC2N 1AR | Independent Registered Public Accounting Firm KPMG LLP 1601 Market Street Philadelphia, PA 19103-2499 |
Principal Underwriter* Eaton Vance Distributors, Inc. Two International Place Boston, MA 02110 (617) 482-8260 | Fund Offices 1825 Connecticut Avenue NW, Suite 400 Washington, DC 20009 |
Custodian State Street Bank and Trust Company State Street Financial Center, One Lincoln Street Boston, MA 02111 |
* FINRA BrokerCheck. Investors may check the background of their Investment Professional by contacting the Financial Industry Regulatory Authority (FINRA). FINRA BrokerCheck is a free tool to help investors check the professional background of current and former FINRA-registered securities firms and brokers. FINRA BrokerCheck is available by calling 1-800-289-9999 and at www.FINRA.org. The FINRA BrokerCheck brochure describing this program is available to investors at www.FINRA.org.
Printed on recycled paper. | |
24211 9.30.19 | ![]() |
Calvert Emerging Markets Equity Fund |
Important Note. Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semi-annual shareholder reports will no longer be sent by mail unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (calvert.com/prospectus), and you will be notified by mail each time a report is posted and provided with a website address to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you are a direct investor, you may elect to receive shareholder reports and other communications from the Fund electronically by signing up for e-Delivery at calvert.com. If you own your shares through a financial intermediary (such as a broker-dealer or bank), you must contact your financial intermediary to sign up.
You may elect to receive all future Fund shareholder reports in paper free of charge. If you are a direct investor, you can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by calling 1-800-368-2745. If you own these shares through a financial intermediary, you must contact your financial intermediary or follow instructions included with this disclosure, if applicable, to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all Calvert funds held directly or to all funds held through your financial intermediary, as applicable.
Annual Report September 30, 2019 E-Delivery Sign-Up — Details Inside | ![]() |
Commodity Futures Trading Commission Registration. Effective December 31, 2012, the Commodity Futures Trading Commission (“CFTC”) adopted certain regulatory changes that subject registered investment companies and advisers to regulation by the CFTC if a fund invests more than a prescribed level of its assets in certain CFTC-regulated instruments (including futures, certain options and swap agreements) or markets itself as providing investment exposure to such instruments. The Fund and its adviser have claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act. Accordingly, neither the Fund nor the adviser is subject to CFTC regulation. Fund shares are not insured by the FDIC and are not deposits or other obligations of, or guaranteed by, any depository institution. Shares are subject to investment risks, including possible loss of principal invested. This report must be preceded or accompanied by a current summary prospectus or prospectus. Before investing, investors should consider carefully the investment objective, risks, and charges and expenses of a mutual fund. This and other important information is contained in the summary prospectus and prospectus, which can be obtained from a financial intermediary. Prospective investors should read the prospectus carefully before investing. For further information, please call 1-800-368-2745. |
Choose Planet-friendly E-delivery! Sign up now for on-line statements, prospectuses, and fund reports. In less than five minutes you can help reduce paper mail and lower fund costs. Just go to www.calvert.com. If you already have an online account with the Calvert funds, click on Login to access your Account and select the documents you would like to receive via e-mail. If you’re new to online account access, click on Login, then Register to create your user name and password. Once you’re in, click on the E-delivery sign-up on the Account Portfolio page and follow the quick, easy steps. Note: If your shares are not held directly with the Calvert funds but through a brokerage firm, you must contact your broker for electronic delivery options available through their firm. |
TABLE OF CONTENTS | ||||
Management’s Discussion of Fund Performance | ||||
Performance | ||||
Fund Profile | ||||
Endnotes and Additional Disclosures | ||||
Fund Expenses | ||||
Financial Statements | ||||
Report of Independent Registered Public Accounting Firm | ||||
Federal Tax Information | ||||
Management and Organization | ||||
Important Notices |
MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE1
Economic and Market Conditions
Emerging market equities posted negative returns during the 12-month period ended September 30, 2019, returning -2.02% as measured by the MSCI Emerging Markets Index (the Index).2 Emerging markets underperformed developed markets during the volatile period.
In early 2019, stocks in both the U.S. and emerging markets rallied, buoyed by optimism over a pending U.S.-China trade agreement, a more dovish interest-rate stance by the U.S. Federal Reserve Board (the Fed), and the prospect of Chinese stimulus measures. However, in May the U.S.-China trade war escalated after the U.S. government raised tariffs on Chinese imports and blacklisted Huawei Technologies Co. Ltd. ─ a controversial Chinese telecommunications firm. In turn, China retaliated with tariffs on U.S. goods.
In anticipation of a pending interest-rate cut by the Fed and a truce in G20 trade conflicts, emerging markets moved higher in June. Since then, however, investor sentiment has been influenced by ongoing tensions in U.S.-China trade talks and global recession warnings triggered by inverted yield curves7 in the U.S. and U.K.
During the period, China’s economy slowed and its central bank lowered financing costs, letting its currency ─ the renminbi ─ fall against the U.S. dollar. Meanwhile, South Korean stocks underperformed, weighed down by trade uncertainties and corporate earnings weakness. In contrast, the Taiwan market outperformed, driven by technology stocks. The Brazilian market and its currency ─ the real ─ rallied on the election of President Jair Bolsonaro. Investments in Mexico underperformed over the uncertainties surrounding its newly elected government. Argentina, which was added to the Index in May, fell after its presiding government lost a primary election to the opposition party.
During the period, emerging markets were trading at discounts on price-to-earnings and price-to-book ratios relative to developed markets, despite enjoying comparable profitability. Global central banks, led by the Fed, eased their lending policies while bond yields remained relatively low during the period. Global Purchasing Managers’ Index (PMI) data pointed to the possibility of a recession in the manufacturing and services sectors with an anticipated decline in the U.S. employment market, which would have an impact on the global economy.
Fund Performance
For the 12-month period ended September 30, 2019, Calvert Emerging Markets Equity Fund (the Fund) returned 4.02% for Class A shares at net asset value (NAV), outperforming the Index, which returned -2.02%.
Outperformance was driven primarily by stock selection in China, eclipsing the negative impact from the Fund’s overweight allocation to the country, which underperformed on trade concerns and a weakening renminbi. Select names in Taiwan, India, and Brazil also contributed. The Fund’s overweight position in these markets, which outperformed the Index, aided returns. Stock selections in Russia and South Africa detracted during the period.
Accton Technology Corp., a Taiwanese manufacturer of computer network products, contributed most to returns relative to the Index. The company benefited from an increase in consumer demand for so-called “hyperscale data centers,” its introduction of advanced networking products, and the impending rollout of 5G networks.
ICICI Bank Ltd., one of India’s largest private banks, rose as the corporate non-performing loan cycle peaked. Management expressed confidence in a normal return on equity by the end of the bank’s 2020 fiscal year. Notre Dame Intermedica Participacoes SA, an integrated health care provider in Brazil, was buoyed by ongoing consolidation within the country’s health insurance industry. Management also effectively combined health insurance with hospital operations, enhancing its competitiveness during the period.
Samsonite International SA, a global luggage maker, was a notable detractor from performance during the period. Weak earnings resulted from challenging conditions in both U.S. and Chinese markets. The U.S. tariff increase in May was expected to further hinder earnings potential. KB Financial Group, Inc. (KB Financial), a South Korean bank, also detracted from relative performance. Share prices of KB Financial dropped on expectations of cuts in interest rates and a deteriorating domestic macroeconomic outlook.
Grupo Financiero Banorte SAB de CV (Banorte), the third-largest Mexican bank, also fell as members of the incoming government called for cancellation of annual credit card and banking fees. Banorte was sold during the period.
See Endnotes and Additional Disclosures in this report. Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or offering price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, the Fund’s current performance may be lower or higher than quoted. Returns are before taxes unless otherwise noted. For performance as of the most recent month-end, please refer to www.calvert.com. |
2 www.calvert.com CALVERT EMERGING MARKETS EQUITY FUND ANNUAL REPORT (Unaudited)
PERFORMANCE
Performance2,3 | ||||||||||||||
Portfolio Managers Gary Greenberg, CFA, Lead Portfolio Manager and Elena Tedesco, CFA, Co-Portfolio Manager, each of Hermes Investment Management Limited | ||||||||||||||
% Average Annual Total Returns | Class Inception Date | Performance Inception Date | One Year | Five Years | Since Inception | |||||||||
Class A at NAV | 10/29/2012 | 10/29/2012 | 4.02 | % | 5.29 | % | 6.17 | % | ||||||
Class A with 4.75% Maximum Sales Charge | — | — | -0.94 | 4.26 | 5.43 | |||||||||
Class C at NAV | 10/29/2012 | 10/29/2012 | 3.33 | 4.48 | 5.30 | |||||||||
Class C with 1% Maximum Sales Charge | — | — | 2.33 | 4.48 | 5.30 | |||||||||
Class I at NAV | 10/29/2012 | 10/29/2012 | 4.36 | 5.65 | 6.54 | |||||||||
Class R6 at NAV | 02/01/2018 | 10/29/2012 | 4.35 | 5.63 | 6.53 | |||||||||
MSCI Emerging Markets Index | — | — | -2.02 | % | 2.33 | % | 2.61 | % | ||||||
% Total Annual Operating Expense Ratios4 | Class A | Class C | Class I | Class R6 | ||||||||||
Gross | 1.43 | % | 2.18 | % | 1.18 | % | 1.11 | % | ||||||
Net | 1.24 | 1.99 | 0.99 | 0.92 |
Growth of $10,000 |
This graph shows the change in value of a hypothetical investment of $10,000 in Class A of the Fund for the period indicated. For comparison, the same investment is shown in the indicated index. |
![chart-c2da20ef9c565621a17.jpg](https://capedge.com/proxy/N-CSR/0001628280-19-014532/chart-c2da20ef9c565621a17.jpg)
Growth of Investment3 | Amount Invested | Period Beginning | At NAV | With Maximum Sales Charge | ||||
Class C | $10,000 | 10/29/2012 | $14,295 | N.A. | ||||
Class I | $250,000 | 10/29/2012 | $387,654 | N.A. | ||||
Class R6 | $1,000,000 | 10/29/2012 | $1,549,480 | N.A. |
See Endnotes and Additional Disclosures in this report.
Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or offering price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, the Fund’s current performance may be lower or higher than quoted. Returns are before taxes unless otherwise noted. For performance as of the most recent month-end, please refer to www.calvert.com.
www.calvert.com CALVERT EMERGING MARKETS EQUITY FUND ANNUAL REPORT (Unaudited) 3
FUND PROFILE
SECTOR ALLOCATION (% of total investments)5 | TEN LARGEST HOLDINGS (% of net assets)6 | ||||||
Information Technology | 22.6 | % | Tencent Holdings Ltd. | 7.7 | % | ||
Financials | 22.2 | % | Samsung Electronics Co. Ltd. | 6.2 | % | ||
Consumer Discretionary | 14.8 | % | Alibaba Group Holding Ltd. ADR | 5.0 | % | ||
Communication Services | 12.1 | % | Taiwan Semiconductor Manufacturing Co. Ltd. ADR | 5.0 | % | ||
Industrials | 10.9 | % | NMC Health plc | 3.5 | % | ||
Health Care | 8.2 | % | NARI Technology Co. Ltd., Class A | 3.1 | % | ||
Consumer Staples | 6.5 | % | Bank Rakyat Indonesia Persero Tbk PT | 3.0 | % | ||
Materials | 1.4 | % | Techtronic Industries Co. Ltd. | 2.9 | % | ||
Utilities | 1.2 | % | KB Financial Group, Inc. | 2.5 | % | ||
High Social Impact Investments | 0.1 | % | AIA Group Ltd. | 2.4 | % | ||
Total | 100.0 | % | Total | 41.3 | % | ||
See Endnotes and Additional Disclosures in this report.
4 www.calvert.com CALVERT EMERGING MARKETS EQUITY FUND ANNUAL REPORT (Unaudited)
Endnotes and Additional Disclosures |
1 | The views expressed in this report are those of the portfolio manager(s) and are current only through the date stated on the cover. These views are subject to change at any time based upon market or other conditions, and Calvert and the Fund(s) disclaim any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions are based on many factors, may not be relied upon as an indication of trading intent on behalf of any Calvert fund. This commentary may contain statements that are not historical facts, referred to as “forward looking statements.” The Fund’s actual future results may differ significantly from those stated in any forward looking statement, depending on factors such as changes in securities or financial markets or general economic conditions, the volume of sales and purchases of Fund shares, the continuation of investment advisory, administrative and service contracts, and other risks discussed from time to time in the Fund’s filings with the Securities and Exchange Commission. |
2 | MSCI Emerging Markets Index is an unmanaged index of emerging markets common stocks. MSCI indexes are net of foreign withholding taxes. Source: MSCI. MSCI data may not be reproduced or used for any other purpose. MSCI provides no warranties, has not prepared or approved this report, and has no liability hereunder. Purchasing Managers’ Index (PMI) is an index of the prevailing direction of economic trends in the manufacturing and service sectors. It consists of a diffusion index that summarizes whether market conditions, as viewed by purchasing managers, are expanding, staying the same, or contracting. Unless otherwise stated, index returns do not reflect the effect of any applicable sales charges, commissions, expenses, taxes or leverage, as applicable. It is not possible to invest directly in an index. |
3 | Total Returns at NAV do not include applicable sales charges. If sales charges were deducted, the returns would be lower. Total Returns shown with maximum sales charge reflect the stated maximum sales charge. Unless otherwise stated, performance does not reflect the deduction of taxes on Fund distributions or redemptions of Fund shares. |
Performance prior to the inception date of a class may be linked to the performance of an older class of the Fund. This linked performance is adjusted for any applicable sales charge, but is not adjusted for class expense differences. If adjusted for such differences, the performance would be different. The performance of Class R6 is linked to Class I. Performance since inception for an index, if presented, is the performance since the Fund’s or oldest share class’ inception, as applicable. Performance presented in the Financial Highlights included in the financial statements is not linked.
Calvert Research and Management became the investment adviser to the Fund on December 31, 2016. Performance reflected prior to such date is that of the Fund’s former investment adviser.
4 | Source: Fund prospectus. Net expense ratios reflect a contractual expense reimbursement that continues through 1/31/20. Without the reimbursement, performance would have been lower. The expense ratios for the current reporting period can be found in the Financial Highlights section of this report. |
5 | Does not include Short Term Investment of Cash Collateral for Securities Loaned. |
6 | Excludes cash and cash equivalents. |
7 | Yield curve is a graphical representation of the yields offered by bonds of various maturities. The yield curve flattens when long-term interest rates fall and/or short-term interest rates increase, and the yield curve steepens when long-term interest rates increase and/or short-term interest rates fall. |
Fund profile subject to change due to active management.
Important Notice to Shareholders
Effective November 4, 2019, Kunjal Gala joined Lead Portfolio Manager Gary Greenberg and Co-Portfolio Manager Elena Tedesco as Co-Portfolio Manager of the Fund. Effective January 1, 2020, Mr. Greenberg will be a Co-Portfolio Manager of the Fund.
www.calvert.com CALVERT EMERGING MARKETS EQUITY FUND ANNUAL REPORT (Unaudited) 5
FUND EXPENSES
Example
As a Fund shareholder, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases and redemption fees (if applicable); and (2) ongoing costs, including management fees; distribution and/or service fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of Fund investing and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (April 1, 2019 to September 30, 2019).
Actual Expenses
The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, 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 section 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 section of the table below provides information about hypothetical account values and hypothetical expenses based on the actual Fund expense ratio and an assumed rate of return of 5% per year (before expenses), which is not the actual Fund 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 this 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 (if applicable). Therefore, the second section 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 be higher.
BEGINNING ACCOUNT VALUE (4/1/19) | ENDING ACCOUNT VALUE (9/30/19) | EXPENSES PAID DURING PERIOD* (4/1/19 - 9/30/19) | ANNUALIZED EXPENSE RATIO | |
Actual | ||||
Class A | $1,000.00 | $990.70 | $6.19** | 1.24% |
Class C | $1,000.00 | $988.00 | $9.92** | 1.99% |
Class I | $1,000.00 | $992.70 | $4.95** | 0.99% |
Class R6 | $1,000.00 | $992.60 | $4.60** | 0.92% |
Hypothetical | ||||
(5% return per year before expenses) | ||||
Class A | $1,000.00 | $1,018.85 | $6.28** | 1.24% |
Class C | $1,000.00 | $1,015.09 | $10.05** | 1.99% |
Class I | $1,000.00 | $1,020.11 | $5.01** | 0.99% |
Class R6 | $1,000.00 | $1,020.46 | $4.66** | 0.92% |
* Expenses are equal to the Fund’s annualized expense ratio for the indicated Class, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period). The Example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on March 31, 2019. | ||||
** Absent a waiver and/or reimbursement of expenses by affiliates, expenses would be higher. |
6 www.calvert.com CALVERT EMERGING MARKETS EQUITY FUND ANNUAL REPORT (Unaudited)
CALVERT EMERGING MARKETS EQUITY FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2019
SHARES | VALUE ($) | |
COMMON STOCKS - 94.4% | ||
Brazil - 8.3% | ||
BB Seguridade Participacoes SA | 4,683,167 | 39,483,349 |
Duratex SA | 9,472,041 | 28,838,210 |
Hapvida Participacoes e Investimentos SA (1) | 546,500 | 7,082,883 |
IRB Brasil Resseguros SA | 3,842,400 | 34,827,082 |
Itau Unibanco Holding SA, PFC Shares | 5,231,214 | 44,103,882 |
Notre Dame Intermedica Participacoes SA | 2,146,308 | 28,023,733 |
182,359,139 | ||
China - 26.2% | ||
Aier Eye Hospital Group Co., Ltd., Class A | 4,264,442 | 21,208,256 |
Alibaba Group Holding Ltd. ADR (2) | 662,001 | 110,706,427 |
Autohome, Inc. ADR (2)(3) | 358,766 | 29,824,218 |
Baozun, Inc. ADR (2)(3) | 1,045,229 | 44,631,278 |
China Communications Services Corp. Ltd., Class H | 52,174,000 | 29,578,738 |
China Mengniu Dairy Co. Ltd. | 11,622,310 | 43,505,465 |
Gree Electric Appliances, Inc. of Zhuhai, Class A | 3,056,536 | 24,558,223 |
NARI Technology Co. Ltd., Class A | 23,845,154 | 68,404,887 |
Shenzhen International Holdings Ltd. | 18,273,873 | 35,085,319 |
Tencent Holdings Ltd. | 4,019,396 | 168,122,850 |
575,625,661 | ||
Egypt - 1.5% | ||
Commercial International Bank Egypt SAE | 6,796,354 | 32,567,594 |
Hong Kong - 6.5% | ||
AIA Group Ltd. | 5,621,277 | 53,014,495 |
Samsonite International SA (1) | 11,865,707 | 25,137,725 |
Techtronic Industries Co. Ltd. | 9,131,790 | 63,558,962 |
141,711,182 | ||
Hungary - 1.7% | ||
Richter Gedeon Nyrt | 2,341,257 | 37,882,146 |
India - 12.3% | ||
Bharat Forge Ltd. | 3,288,672 | 20,741,477 |
Container Corp. of India Ltd. | 3,427,656 | 29,287,606 |
HCL Technologies Ltd. | 1,666,160 | 25,364,278 |
HDFC Bank Ltd. ADR | 749,921 | 42,782,993 |
Hero MotoCorp Ltd. | 694,941 | 26,403,496 |
ICICI Bank Ltd. | 4,889,398 | 29,802,718 |
Motherson Sumi Systems Ltd. | 15,006,342 | 22,287,118 |
www.calvert.com CALVERT EMERGING MARKETS EQUITY FUND ANNUAL REPORT 7
SHARES | VALUE ($) | |
COMMON STOCKS - CONT’D | ||
Power Grid Corp. of India Ltd. | 8,898,114 | 25,056,024 |
SBI Life Insurance Co., Ltd. (1) | 2,101,380 | 25,017,643 |
Tech Mahindra Ltd. | 2,354,406 | 23,802,298 |
270,545,651 | ||
Indonesia - 3.0% | ||
Bank Rakyat Indonesia Persero Tbk PT | 227,273,862 | 65,992,296 |
Mexico - 1.5% | ||
Wal-Mart de Mexico SAB de CV | 10,784,211 | 31,963,540 |
Peru - 1.2% | ||
Credicorp Ltd. | 125,486 | 26,156,302 |
Russia - 1.2% | ||
Mail.Ru Group Ltd. GDR (2) | 1,238,363 | 25,889,095 |
South Africa - 2.5% | ||
Foschini Group Ltd. (The) | 2,986,552 | 32,262,095 |
Shoprite Holdings Ltd. | 2,919,291 | 23,640,127 |
55,902,222 | ||
South Korea - 10.5% | ||
KB Financial Group, Inc. | 1,546,060 | 55,181,160 |
NCSoft Corp. | 64,200 | 27,956,113 |
Samsung Electronics Co. Ltd. | 3,352,924 | 137,282,213 |
Samsung Fire & Marine Insurance Co. Ltd. | 60,909 | 11,348,780 |
231,768,266 | ||
Taiwan - 12.9% | ||
Accton Technology Corp. | 7,858,000 | 41,391,592 |
Advantech Co. Ltd. | 3,714,983 | 32,677,593 |
Chipbond Technology Corp. | 15,909,000 | 29,443,516 |
Delta Electronics, Inc. | 11,705,000 | 50,008,524 |
LandMark Optoelectronics Corp. | 2,568,900 | 21,188,476 |
Taiwan Semiconductor Manufacturing Co. Ltd. ADR | 2,348,061 | 109,137,875 |
283,847,576 | ||
Turkey - 1.6% | ||
BIM Birlesik Magazalar AS | 4,091,040 | 35,595,102 |
United Kingdom - 3.5% | ||
NMC Health plc (3) | 2,279,527 | 75,974,634 |
Total Common Stocks (Cost $2,042,540,149) | 2,073,780,406 |
8 www.calvert.com CALVERT EMERGING MARKETS EQUITY FUND ANNUAL REPORT
PRINCIPAL AMOUNT ($) | VALUE ($) | |
HIGH SOCIAL IMPACT INVESTMENTS - 0.1% | ||
Calvert Impact Capital, Inc., Community Investment Notes, 1.50%, 12/15/19 (4)(5) | 2,000,000 | 1,989,420 |
ImpactAssets Inc., Global Sustainable Agriculture Notes, 3.39%, 11/3/20 (5)(6) | 43,000 | 42,693 |
ImpactAssets Inc., Microfinance Plus Notes, 1.98%, 11/3/20 (5)(6) | 56,000 | 54,713 |
Total High Social Impact Investments (Cost $2,099,000) | 2,086,826 | |
SHARES | VALUE ($) | |
SHORT TERM INVESTMENT OF CASH COLLATERAL FOR SECURITIES LOANED - 2.4% | ||
State Street Navigator Securities Lending Government Money Market Portfolio, 2.07% | 53,169,831 | 53,169,831 |
Total Short Term Investment of Cash Collateral for Securities Loaned (Cost $53,169,831) | 53,169,831 | |
TOTAL INVESTMENTS (Cost $2,097,808,980) - 96.9% | 2,129,037,063 | |
Other assets and liabilities, net - 3.1% | 67,902,135 | |
NET ASSETS - 100.0% | 2,196,939,198 |
NOTES TO SCHEDULE OF INVESTMENTS | |
(1) Security is exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. Total market value of Rule 144A securities amounts to $57,238,251, which represents 2.6% of the net assets of the Fund as of September 30, 2019. | |
(2) Non-income producing security. | |
(3) All or a portion of this security was on loan at September 30, 2019. The aggregate market value of securities on loan at September 30, 2019 was $76,821,391. | |
(4) Affiliated company (see Note 7). | |
(5) Restricted security. Total market value of restricted securities amounts to $2,086,826, which represents 0.1% of the net assets of the Fund as of September 30, 2019. | |
(6) Notes carry an interest rate that varies by period and is contingent on the performance of the underlying portfolio of loans to borrowers. The coupon rate shown represents the rate in effect at September 30, 2019. | |
Abbreviations: | |
ADR: | American Depositary Receipt |
GDR: | Global Depositary Receipt |
PFC Shares: | Preference Shares |
www.calvert.com CALVERT EMERGING MARKETS EQUITY FUND ANNUAL REPORT 9
At September 30, 2019, the concentration of the Fund’s investments in the various sectors, determined as a percentage of total investments, was as follows: | ||
ECONOMIC SECTORS | (% OF TOTAL INVESTMENTS)* | |
Information Technology | 22.6 | % |
Financials | 22.2 | % |
Consumer Discretionary | 14.8 | % |
Communication Services | 12.1 | % |
Industrials | 10.9 | % |
Health Care | 8.2 | % |
Consumer Staples | 6.5 | % |
Materials | 1.4 | % |
Utilities | 1.2 | % |
High Social Impact Investments | 0.1 | % |
Total | 100.0 | % |
* Does not include Short Term Investment of Cash Collateral for Securities Loaned. |
RESTRICTED SECURITIES | ACQUISITION DATES | COST ($) |
Calvert Impact Capital, Inc., Community Investment Notes, 1.50%, 12/15/19 | 12/15/16 | 2,000,000 |
ImpactAssets Inc., Global Sustainable Agriculture Notes, 3.39%, 11/3/20 | 11/13/15 | 43,000 |
ImpactAssets Inc., Microfinance Plus Notes, 1.98%, 11/3/20 | 11/13/15 | 56,000 |
See notes to financial statements. |
10 www.calvert.com CALVERT EMERGING MARKETS EQUITY FUND ANNUAL REPORT
CALVERT EMERGING MARKETS EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2019
ASSETS | |||
Investments in securities of unaffiliated issuers, at value (identified cost $2,095,808,980) - including $76,821,391 of securities on loan | $2,127,047,643 | ||
Investments in securities of affiliated issuers, at value (identified cost $2,000,000) | 1,989,420 | ||
Cash | 64,517,320 | ||
Cash denominated in foreign currency, at value (cost $6,945,907) | 7,004,549 | ||
Receivable for investments sold | 11,200,310 | ||
Receivable for capital shares sold | 61,869,137 | ||
Dividends and interest receivable | 1,227,006 | ||
Interest receivable - affiliated | 24,167 | ||
Securities lending income receivable | 254,535 | ||
Receivable from affiliates | 179,418 | ||
Directors’ deferred compensation plan | 610,462 | ||
Other assets | 55,421 | ||
Total assets | 2,275,979,388 | ||
LIABILITIES | |||
Payable for investments purchased | 18,837,348 | ||
Payable for capital shares redeemed | 2,603,983 | ||
Payable for foreign capital gains taxes | 996,922 | ||
Deposits for securities loaned | 53,169,831 | ||
Payable to affiliates: | |||
Investment advisory fee | 1,317,066 | ||
Administrative fee | 210,731 | ||
Distribution and service fees | 51,555 | ||
Sub-transfer agency fee | 5,589 | ||
Directors’ deferred compensation plan | 610,462 | ||
Accrued expenses | 1,236,703 | ||
Total liabilities | 79,040,190 | ||
NET ASSETS | $2,196,939,198 | ||
NET ASSETS CONSIST OF: | |||
Paid-in capital applicable to common stock | |||
(75,000,000 shares per class of $0.01 par value authorized) | $2,190,719,711 | ||
Distributable earnings | 6,219,487 | ||
Total | $2,196,939,198 | ||
NET ASSET VALUE PER SHARE | |||
Class A (based on net assets of $132,065,716 and 8,226,003 shares outstanding) | $16.05 | ||
Class C (based on net assets of $28,793,979 and 1,843,896 shares outstanding) | $15.62 | ||
Class I (based on net assets of $1,817,478,639 and 112,051,622 shares outstanding) | $16.22 | ||
Class R6 (based on net assets of $218,600,864 and 13,501,039 shares outstanding) | $16.19 | ||
OFFERING PRICE PER SHARE* | |||
Class A (100/95.25 of net asset value per share) | $16.85 | ||
* On sales of $50,000 or more, the offering price of Class A shares is reduced. | |||
See notes to financial statements. |
www.calvert.com CALVERT EMERGING MARKETS EQUITY FUND ANNUAL REPORT 11
CALVERT EMERGING MARKETS EQUITY FUND
STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 2019
INVESTMENT INCOME | |||
Dividend income (net of foreign taxes withheld of $4,339,865) | $38,128,995 | ||
Interest income | 4,771 | ||
Interest income - affiliated issuers | 30,000 | ||
Securities lending income, net | 1,132,390 | ||
Total investment income | 39,296,156 | ||
EXPENSES | |||
Investment advisory fee | 12,886,301 | ||
Administrative fee | 1,973,855 | ||
Distribution and service fees: | |||
Class A | 313,637 | ||
Class C | 269,221 | ||
Directors’ fees and expenses | 101,447 | ||
Custodian fees | 1,563,072 | ||
Transfer agency fees and expenses | 1,349,530 | ||
Accounting fees | 345,095 | ||
Professional fees | 142,694 | ||
Registration fees | 291,620 | ||
Reports to shareholders | 134,808 | ||
Miscellaneous | 113,533 | ||
Total expenses | 19,484,813 | ||
Waiver and/or reimbursement of expenses by affiliates | (2,865,690) | ||
Reimbursement of expenses-other | (39,514) | ||
Net expenses | 16,579,609 | ||
Net investment income | 22,716,547 | ||
REALIZED AND UNREALIZED GAIN (LOSS) | |||
Net realized gain (loss) on: | |||
Investment securities - unaffiliated issuers (net of foreign capital gains taxes of $75,174) | (22,662,867) | ||
Foreign currency transactions | (1,658,778) | ||
(24,321,645) | |||
Net change in unrealized appreciation (depreciation) on: | |||
Investment securities - unaffiliated issuers (including net increase in payable for foreign capital gains taxes of $792,603) | 83,963,273 | ||
Investment securities - affiliated issuers | 64,720 | ||
Foreign currency | 33,846 | ||
84,061,839 | |||
Net realized and unrealized gain | 59,740,194 | ||
Net increase in net assets resulting from operations | $82,456,741 | ||
See notes to financial statements. |
12 www.calvert.com CALVERT EMERGING MARKETS EQUITY FUND ANNUAL REPORT
CALVERT EMERGING MARKETS EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS | Year Ended September 30, 2019 | Year Ended September 30, 2018 | |||||
Operations: | |||||||
Net investment income | $22,716,547 | $12,816,397 | |||||
Net realized loss | (24,321,645 | ) | (14,900,127 | ) | |||
Net change in unrealized appreciation (depreciation) | 84,061,839 | (106,917,786 | ) | ||||
Net increase (decrease) in net assets resulting from operations | 82,456,741 | (109,001,516 | ) | ||||
Distributions to shareholders: | |||||||
Class A shares | (830,950 | ) | (169,566 | ) | |||
Class C shares | (100,965 | ) | — | ||||
Class I shares | (12,937,246 | ) | (1,069,639 | ) | |||
Class R6 shares | (549,482 | ) | — | ||||
Total distributions to shareholders | (14,418,643 | ) | (1,239,205 | ) | |||
Capital share transactions: | |||||||
Class A shares | (24,807,970 | ) | 109,663,028 | ||||
Class C shares | 3,743,762 | 22,425,876 | |||||
Class I shares | 742,127,821 | 978,379,270 | |||||
Class R6 shares (1) | 205,025,396 | 10,515,540 | |||||
Class Y shares (2) | — | (110,789,228 | ) | ||||
Net increase in net assets from capital share transactions | 926,089,009 | 1,010,194,486 | |||||
TOTAL INCREASE IN NET ASSETS | 994,127,107 | 899,953,765 | |||||
NET ASSETS | |||||||
Beginning of year | 1,202,812,091 | 302,858,326 | |||||
End of year | $2,196,939,198 | $1,202,812,091 | |||||
(1) From February 1, 2018 inception. | |||||||
(2) Effective December 8, 2017, Class Y shares of the Fund converted to Class I shares at net asset value. Thereafter, Class Y shares were terminated. | |||||||
See notes to financial statements. |
www.calvert.com CALVERT EMERGING MARKETS EQUITY FUND ANNUAL REPORT 13
CALVERT EMERGING MARKETS EQUITY FUND
FINANCIAL HIGHLIGHTS
Year Ended September 30, | |||||||||||||||
CLASS A SHARES | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||
Net asset value, beginning | $15.55 | $16.33 | $12.94 | $10.90 | $13.15 | ||||||||||
Income from investment operations: | |||||||||||||||
Net investment income (1) | 0.17 | 0.19 | 0.10 | 0.08 | (2) | 0.11 | |||||||||
Net realized and unrealized gain (loss) | 0.45 | (0.94) | 3.36 | 2.06 | (1.92) | ||||||||||
Total from investment operations | 0.62 | (0.75) | 3.46 | 2.14 | (1.81) | ||||||||||
Distributions from: | |||||||||||||||
Net investment income | (0.12) | (0.03) | (0.07) | (0.10) | (0.03) | ||||||||||
Net realized gain | — | — | — | — | (0.41) | ||||||||||
Total distributions | (0.12) | (0.03) | (0.07) | (0.10) | (0.44) | ||||||||||
Total increase (decrease) in net asset value | 0.50 | (0.78) | 3.39 | 2.04 | (2.25) | ||||||||||
Net asset value, ending | $16.05 | $15.55 | $16.33 | $12.94 | $10.90 | ||||||||||
Total return (3) | 4.02 | % | (4.62 | %) | 26.89 | % | 19.75 | % | (14.18 | %) | |||||
Ratios to average net assets: (4) | |||||||||||||||
Total expenses | 1.41 | % | 1.56 | % | 1.80 | % | 1.95 | % | 2.18 | % | |||||
Net expenses | 1.25 | % | 1.27 | % | 1.27 | % | 1.47 | % | 1.75 | % | |||||
Net investment income | 1.06 | % | 1.15 | % | 0.73 | % | 0.66 | % | (2) | 0.84 | % | ||||
Portfolio turnover | 32 | % | 27 | % | 36 | % | 32 | % | 66 | % | |||||
Net assets, ending (in thousands) | $132,066 | $155,735 | $62,432 | $39,343 | $23,569 | ||||||||||
(1) Computed using average shares outstanding. | |||||||||||||||
(2) Amount includes a non-recurring refund for overbilling of prior years’ custody out-of-pocket fees. This amounted to $0.003 per share and 0.003% of average net assets. | |||||||||||||||
(3) Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges, if any. Total return is not annualized for periods of less than one year. | |||||||||||||||
(4) Total expenses do not reflect amounts reimbursed and/or waived by the adviser and certain of its affiliates, if applicable. Net expenses are net of all reductions and represent the net expenses paid by the Fund. | |||||||||||||||
See notes to financial statements. |
14 www.calvert.com CALVERT EMERGING MARKETS EQUITY FUND ANNUAL REPORT
CALVERT EMERGING MARKETS EQUITY FUND
FINANCIAL HIGHLIGHTS
Year Ended September 30, | |||||||||||||||
CLASS C SHARES | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||
Net asset value, beginning | $15.18 | $16.04 | $12.76 | $10.74 | $13.05 | ||||||||||
Income from investment operations: | |||||||||||||||
Net investment income (loss) (1) | 0.05 | 0.10 | 0.01 | — | (2) | (0.03) | |||||||||
Net realized and unrealized gain (loss) | 0.45 | (0.96) | 3.29 | 2.03 | (1.87) | ||||||||||
Total from investment operations | 0.50 | (0.86) | 3.30 | 2.03 | (1.90) | ||||||||||
Distributions from: | |||||||||||||||
Net investment income | (0.06) | — | (0.02) | (0.01) | — | ||||||||||
Net realized gain | — | — | — | — | (0.41) | ||||||||||
Total distributions | (0.06) | — | (0.02) | (0.01) | (0.41) | ||||||||||
Total increase (decrease) in net asset value | 0.44 | (0.86) | 3.28 | 2.02 | (2.31) | ||||||||||
Net asset value, ending | $15.62 | $15.18 | $16.04 | $12.76 | $10.74 | ||||||||||
Total return (3) | 3.33 | % | (5.36 | %) | 25.88 | % | 18.94 | % | (14.98 | %) | |||||
Ratios to average net assets: (4) | |||||||||||||||
Total expenses | 2.16 | % | 2.31 | % | 3.69 | % | 4.44 | % | 5.00 | % | |||||
Net expenses | 2.00 | % | 2.02 | % | 2.02 | % | 2.21 | % | 2.70 | % | |||||
Net investment income (loss) | 0.35 | % | 0.60 | % | 0.08 | % | 0.02 | % | (2) | (0.23 | %) | ||||
Portfolio turnover | 32 | % | 27 | % | 36 | % | 32 | % | 66 | % | |||||
Net assets, ending (in thousands) | $28,794 | $24,286 | $4,627 | $994 | $566 | ||||||||||
(1) Computed using average shares outstanding. | |||||||||||||||
(2) Amount includes a non-recurring refund for overbilling of prior years’ custody out-of-pocket fees. This amounted to $0.003 per share and 0.003% of average net assets. | |||||||||||||||
(3) Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges, if any. Total return is not annualized for periods of less than one year. | |||||||||||||||
(4) Total expenses do not reflect amounts reimbursed and/or waived by the adviser and certain of its affiliates, if applicable. Net expenses are net of all reductions and represent the net expenses paid by the Fund. | |||||||||||||||
See notes to financial statements. |
www.calvert.com CALVERT EMERGING MARKETS EQUITY FUND ANNUAL REPORT 15
CALVERT EMERGING MARKETS EQUITY FUND
FINANCIAL HIGHLIGHTS
Year Ended September 30, | |||||||||||||||
CLASS I SHARES | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||
Net asset value, beginning | $15.73 | $16.48 | $13.06 | $10.99 | $13.26 | ||||||||||
Income from investment operations: | |||||||||||||||
Net investment income (1) | 0.22 | 0.29 | 0.17 | 0.12 | (2) | 0.14 | |||||||||
Net realized and unrealized gain (loss) | 0.45 | (0.99) | 3.35 | 2.09 | (1.93) | ||||||||||
Total from investment operations | 0.67 | (0.70) | 3.52 | 2.21 | (1.79) | ||||||||||
Distributions from: | |||||||||||||||
Net investment income | (0.18) | (0.05) | (0.10) | (0.14) | (0.07) | ||||||||||
Net realized gain | — | — | — | — | (0.41) | ||||||||||
Total distributions | (0.18) | (0.05) | (0.10) | (0.14) | (0.48) | ||||||||||
Total increase (decrease) in net asset value | 0.49 | (0.75) | 3.42 | 2.07 | (2.27) | ||||||||||
Net asset value, ending | $16.22 | $15.73 | $16.48 | $13.06 | $10.99 | ||||||||||
Total return (3) | 4.36 | % | (4.30 | %) | 27.27 | % | 20.31 | % | (13.92 | %) | |||||
Ratios to average net assets: (4) | |||||||||||||||
Total expenses | 1.15 | % | 1.32 | % | 1.32 | % | 1.41 | % | 1.48 | % | |||||
Net expenses | 0.97 | % | 0.92 | % | 0.92 | % | 1.12 | % | 1.40 | % | |||||
Net investment income | 1.41 | % | 1.71 | % | 1.20 | % | 1.06 | % | (2) | 1.12 | % | ||||
Portfolio turnover | 32 | % | 27 | % | 36 | % | 32 | % | 66 | % | |||||
Net assets, ending (in thousands) | $1,817,479 | $1,012,574 | $126,398 | $58,259 | $39,101 | ||||||||||
(1) Computed using average shares outstanding. | |||||||||||||||
(2) Amount includes a non-recurring refund for overbilling of prior years’ custody out-of-pocket fees. This amounted to $0.003 per share and 0.003% of average net assets. | |||||||||||||||
(3) Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges, if any. Total return is not annualized for periods of less than one year. | |||||||||||||||
(4) Total expenses do not reflect amounts reimbursed and/or waived by the adviser and certain of its affiliates, if applicable. Net expenses are net of all reductions and represent the net expenses paid by the Fund. | |||||||||||||||
See notes to financial statements. |
16 www.calvert.com CALVERT EMERGING MARKETS EQUITY FUND ANNUAL REPORT
CALVERT EMERGING MARKETS EQUITY FUND
FINANCIAL HIGHLIGHTS
Year Ended September 30, 2019 | Period Ended September 30, 2018(1) | ||||||
CLASS R6 SHARES | |||||||
Net asset value, beginning | $15.72 | $18.65 | |||||
Income from investment operations: | |||||||
Net investment income (2) | 0.27 | 0.26 | |||||
Net realized and unrealized gain (loss) | 0.40 | (3.19) | |||||
Total from investment operations | 0.67 | (2.93) | |||||
Distributions from: | |||||||
Net investment income | (0.20) | — | |||||
Total distributions | (0.20) | — | |||||
Total increase (decrease) in net asset value | 0.47 | (2.93) | |||||
Net asset value, ending | $16.19 | $15.72 | |||||
Total return (4) | 4.35 | % | (15.71 | %) | (3) | ||
Ratios to average net assets: (5) | |||||||
Total expenses | 1.06 | % | 1.24 | % | (6) | ||
Net expenses | 0.92 | % | 0.92 | % | (6) | ||
Net investment income | 1.67 | % | 2.48 | % | (6) | ||
Portfolio turnover | 32 | % | 27 | % | (7) | ||
Net assets, ending (in thousands) | $218,601 | $10,217 | |||||
(1) From February 1, 2018 inception. | |||||||
(2) Computed using average shares outstanding. | |||||||
(3) Not annualized. | |||||||
(4) Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges, if any. | |||||||
(5) Total expenses do not reflect amounts reimbursed and/or waived by the adviser and certain of its affiliates, if applicable. Net expenses are net of all reductions and represent the net expenses paid by the Fund. | |||||||
(6) Annualized. | |||||||
(7) For the Fund’s year ended September 30, 2018. | |||||||
See notes to financial statements. |
www.calvert.com CALVERT EMERGING MARKETS EQUITY FUND ANNUAL REPORT 17
NOTES TO FINANCIAL STATEMENTS
NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES
Calvert Emerging Markets Equity Fund (the Fund) is a diversified series of Calvert World Values Fund, Inc. (the Corporation). The Corporation is a Maryland corporation registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company. The investment objective of the Fund is to seek long-term capital appreciation by investing primarily in equity securities of companies located in emerging market countries.
The Fund offers four classes of shares. Class A shares are generally sold subject to a sales charge imposed at time of purchase. A contingent deferred sales charge of 0.80% may apply to certain redemptions of Class A shares for accounts for which no sales charge was paid, if redeemed within 12 months of purchase. Class C shares are sold without a front-end sales charge, and with certain exceptions, are charged a contingent deferred sales charge of 1% on shares redeemed within 12 months of purchase. Class C shares are only available for purchase through a financial intermediary. Effective January 25, 2019, Class C shares generally automatically convert to Class A shares ten years after their purchase as described in the Fund’s prospectus. Class I and Class R6 shares are sold at net asset value, are not subject to a sales charge and are sold only to certain eligible investors. Each class represents a pro rata interest in the Fund, but votes separately on class-specific matters and is subject to different expenses.
The Fund applies the accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services – Investment Companies (ASC 946). Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements.
A. Investment 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 (the Board) to value its investments wherever possible. Investments for which market quotations are not available or deemed not reliable are fair valued in good faith under the direction of the Board.
U.S. generally accepted accounting principles (U.S. 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 methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Valuation techniques used to value the Fund’s investments by major category are as follows:
Equity Securities. Equity securities (including warrants and rights) listed on a U.S. securities exchange generally are valued at the last sale or closing price as reported by an independent pricing service on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. Equity securities listed on the NASDAQ Global or Global Select Market are valued at the NASDAQ official closing price and are categorized as Level 1 in the hierarchy. Unlisted or listed securities for which closing sales prices or closing quotations are not available are valued at the mean between the latest available bid and ask prices and are categorized as Level 2 in the hierarchy. The daily valuation of exchange-traded foreign securities generally is determined as of the close of trading on the principal exchange on which such securities trade. Events occurring after the close of trading on foreign exchanges may result in adjustments to the valuation of foreign securities to more accurately reflect their fair value as of the close of regular trading on the New York Stock Exchange. When valuing foreign equity securities that meet certain criteria, the Fund’s Board has approved the use of a fair value service that values such securities to reflect market trading that occurs after the close of the applicable foreign markets of comparable securities or other instruments that have a strong correlation to the fair-valued securities. Such securities are categorized as Level 2 in the hierarchy.
Debt Securities. Debt securities are generally valued on the basis of valuations provided by third party pricing services, as derived from such services’ pricing models. Inputs to the models may include, but are not limited to, reported trades, executable bid and ask prices, broker/dealer quotations, prices or yields of securities with similar characteristics, interest rates, anticipated prepayments, benchmark curves or information pertaining to the issuer, as well as industry and economic events. Accordingly, debt securities are generally categorized as Level 2 in the hierarchy. Short-term debt securities of sufficient credit quality purchased with remaining maturities of sixty days or less for which a valuation from a third party pricing service is not readily available may be valued at amortized cost, which approximates fair value, and are categorized as Level 2 in the hierarchy.
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Other Securities. Investments in registered investment companies (including money market funds) that do not trade on an exchange are valued at the net asset value per share on the valuation day and are categorized as Level 1 in the hierarchy.
Fair Valuation. If a market value cannot be determined for a security using the methodologies described above, or if, in the good faith opinion of the Fund’s adviser, the market value does not constitute a readily available market quotation, or if a significant event has occurred that would materially affect the value of the security, the security will be fair valued as determined in good faith by or at the direction of the Board in a manner that most fairly reflects the security’s “fair value”, which is the amount that the Fund might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of relevant factors, which are likely to vary from one pricing context to another. These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issuer or of comparable companies or entities, quotations or relevant information obtained from broker/dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the company’s or entity’s financial statements, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.
The values assigned to fair value investments are based on available information and do not necessarily represent amounts that might ultimately be realized. Further, due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed, and the differences could be material.
The following table summarizes the market value of the Fund’s holdings as of September 30, 2019, based on the inputs used to value them:
Assets | Level 1 | Level 2 | Level 3 | Total | |||||||||
Common Stocks | |||||||||||||
Brazil | $ | 182,359,139 | $ | — | $ | — | $ | 182,359,139 | |||||
China | 185,161,923 | 390,463,738 | — | 575,625,661 | |||||||||
India | 42,782,993 | 227,762,658 | — | 270,545,651 | |||||||||
Mexico | 31,963,540 | — | — | 31,963,540 | |||||||||
Peru | 26,156,302 | — | — | 26,156,302 | |||||||||
Taiwan | 109,137,875 | 174,709,701 | — | 283,847,576 | |||||||||
Other Countries (1) | — | 703,282,537 | — | 703,282,537 | |||||||||
Total Common Stocks | $ | 577,561,772 | $ | 1,496,218,634 | (2) | $ | — | $ | 2,073,780,406 | ||||
High Social Impact Investments | — | 2,086,826 | — | 2,086,826 | |||||||||
Short Term Investment of Cash Collateral for Securities Loaned | 53,169,831 | — | — | 53,169,831 | |||||||||
Total Investments | $ | 630,731,603 | $ | 1,498,305,460 | $ | — | $ | 2,129,037,063 | |||||
(1) For further breakdown of equity securities by country, please refer to the Schedule of Investments. | |||||||||||||
(2) Includes foreign equity securities whose values were adjusted to reflect market trading of comparable securities or other correlated instruments that occurred after the close of trading in their applicable foreign markets. |
Level 3 investments at the beginning and/or end of the period in relation to net assets were not significant and accordingly, a reconciliation of Level 3 assets for the year ended September 30, 2019 is not presented.
B. Investment Transactions and Income: Investment transactions for financial statement purposes 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 for dividends received in cash and/or securities or, in the case of dividends on certain foreign securities, as soon as the Fund is informed of the ex-dividend date. Non-cash dividends are recorded at the fair value of the securities received. Withholding taxes on foreign dividends and capital gains, if any, have been provided for in accordance with the Fund’s understanding of the applicable country’s tax rules and rates. Distributions received that represent a return of capital are recorded as a reduction of cost of investments. Distributions received that represent a capital gain are recorded as a realized gain. Interest income, which includes amortization of premium and accretion of discount on debt securities, is accrued as earned.
C. Share Class Accounting: Realized and unrealized gains and losses and net investment income and losses, other than class-specific expenses, are allocated daily to each class of shares based upon the relative net assets of each class to the total net assets of the Fund. Expenses arising in connection with a specific class are charged directly to that class. Sub-accounting, recordkeeping and similar administrative fees payable to financial intermediaries, which are a component of transfer agency fees and expenses on the Statement of Operations, are not allocated to Class R6 shares.
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D. 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. Recognized gains or losses on investment transactions attributable to changes in foreign currency exchange rates are recorded for financial statement purposes as net realized gains and losses on investments. That portion of unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed.
E. 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 (excluding Rule 144A securities) is included at the end of the Schedule of Investments.
F. 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 U.S. GAAP; accordingly, periodic reclassifications are made within the Fund’s capital accounts to reflect income and gains available for distribution under income tax regulations.
G. Estimates: The preparation of financial statements in conformity with U.S. GAAP 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 increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
H. Indemnifications: The Corporation’s By-Laws provide for indemnification for Directors or officers of the Corporation and certain other parties, to the fullest extent permitted by Maryland law and the 1940 Act, provided certain conditions are met. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.
I. 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.
In addition to the requirements of the Internal Revenue Code, the Fund may also be subject to local taxes on the recognition of capital gains in certain countries. In determining the daily net asset value, the Fund estimates the accrual for such taxes, if any, based on the unrealized appreciation on certain portfolio securities and the related tax rates. Taxes attributable to unrealized appreciation are included in the change in unrealized appreciation (depreciation) on investments. Capital gains taxes on securities sold are included in net realized gain (loss) on investments.
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 from the date of filing.
NOTE 2 — RELATED PARTY TRANSACTIONS
The investment advisory fee is earned by Calvert Research and Management (CRM), a subsidiary of Eaton Vance Management (EVM), as compensation for investment advisory services rendered to the Fund. Pursuant to the investment advisory agreement, CRM receives a fee, payable monthly, at the annual rate of 0.75% (0.88% prior to February 1, 2019) of the Fund’s average daily net assets. For the year ended September 30, 2019, the investment advisory fee amounted to $12,886,301.
Hermes Investment Management Limited (Hermes) provides sub-advisory services to the Fund pursuant to a sub-advisory agreement with CRM. Sub-advisory fees are paid by CRM from its investment advisory fee.
CRM has agreed to reimburse the Fund’s operating expenses to the extent that total annual operating expenses (relating to ordinary operating expenses only and excluding expenses such as brokerage commissions, acquired fund fees and expenses of unaffiliated funds, interest expense, taxes or litigation expenses) exceed 1.24%, 1.99% and 0.99% (1.27%, 2.02% and 0.92% prior to February 1, 2019) for Class A, Class C and Class I, respectively, and 0.92% for Class R6 of such class’ average daily net assets. The expense reimbursement agreement may be changed or terminated after January 31, 2020. For the year ended September 30, 2019, CRM waived or reimbursed expenses of $2,865,690. A portion of the expenses waived or reimbursed was borne by Hermes.
The administrative fee is earned by CRM as compensation for administrative services rendered to the Fund. The fee is computed at an annual rate of 0.12% of the Fund’s average daily net assets attributable to Class A, Class C, Class I and Class R6 and is payable monthly. For the year ended September 30, 2019, CRM was paid administrative fees of $1,973,855.
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The Fund has in effect a distribution plan for Class A shares (Class A Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class A Plan, the Fund pays Eaton Vance Distributors, Inc. (EVD), an affiliate of CRM and the Fund’s principal underwriter, a distribution and service fee of 0.25% per annum of its average daily net assets attributable to Class A shares for distribution services and facilities provided to the Fund by EVD, as well as for personal services and/or the maintenance of shareholder accounts. The Fund also has in effect a distribution plan for Class C shares (Class C Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class C Plan, the Fund pays EVD amounts equal to 0.75% per annum of its average daily net assets attributable to Class C shares for providing ongoing distribution services and facilities to the Fund. In addition, pursuant to the Class C Plan, the Fund also makes payments of service fees to EVD, financial intermediaries and other persons in amounts equal to 0.25% per annum of its average daily net assets attributable to that class. Service fees paid or accrued are for personal services and/or the maintenance of shareholder accounts. Distribution and service fees paid or accrued for the year ended September 30, 2019 amounted to $313,637 and $269,221 for Class A shares and Class C shares, respectively.
The Fund was informed that EVD received $45,667 as its portion of the sales charge on sales of Class A shares. The Fund was also informed that EVD received $1,448 and $12,045 of contingent deferred sales charges paid by Class A and Class C shareholders, respectively, for the same period.
EVM provides sub-transfer agency and related services to the Fund pursuant to a Sub-Transfer Agency Support Services Agreement. For the year ended September 30, 2019, sub-transfer agency fees and expenses incurred to EVM amounted to $54,665 and are included in transfer agency fees and expenses on the Statement of Operations.
Each Director of the Fund who is not an employee of CRM or its affiliates receives a fee of $3,000 for each Board meeting attended in person and $2,000 for each Board meeting attended by phone plus an annual fee of $117,000, and $1,500 for each Committee meeting attended in person and $1,000 for each Committee meeting attended by phone plus an annual Committee fee of $2,500. The Board chair receives an additional $15,000 annual retainer and Committee chairs receive an additional $6,000 annual retainer. Eligible Directors may participate in a Deferred Compensation Plan (the Plan). Amounts deferred under the Plan are treated as though equal dollar amounts had been invested in shares of the Fund or other Calvert funds selected by the Directors. The Fund purchases shares of the funds selected equal to the dollar amounts deferred under the Plan, resulting in an asset equal to the deferred compensation liability. Obligations of the Plan are paid solely from the Fund’s assets. Directors’ fees are allocated to each of the Calvert funds served. Salaries and fees of officers and Directors of the Fund who are employees of CRM or its affiliates are paid by CRM. In addition, an advisory council was established to aid the Board and CRM in advancing the cause of responsible investing through original scholarship and thought leadership. The advisory council consists of CRM’s Chief Executive Officer and four additional members. Each member (other than CRM’s Chief Executive Officer) receives annual compensation of $75,000, which is being reimbursed by Calvert Investment Management, Inc. (CIM), the Calvert funds’ former investment adviser and Ameritas Holding Company, CIM’s parent company, through the end of 2019. For the year ended September 30, 2019, the Fund’s allocated portion of such expense and reimbursement was $39,514, which are included in miscellaneous expense and reimbursement of expenses-other, respectively, on the Statement of Operations.
NOTE 3 — INVESTMENT ACTIVITY
During the year ended September 30, 2019, the cost of purchases and proceeds from sales of investments, other than short-term securities, were $1,341,125,143 and $510,349,630, respectively.
NOTE 4 — DISTRIBUTIONS TO SHAREHOLDERS AND INCOME TAX INFORMATION
The tax character of distributions declared for the years ended September 30, 2019 and September 30, 2018 was as follows:
Year Ended September 30, | ||||||
2019 | 2018 | |||||
Ordinary income | $14,418,643 | $1,239,205 |
During the year ended September 30, 2019, distributable earnings was decreased by $2,453,256 and paid-in capital was increased by $2,453,256 due to the Fund’s use of equalization accounting. Tax equalization accounting allows the Fund to treat as a distribution that portion of redemption proceeds representing a redeeming shareholder’s portion of undistributed taxable income and net capital gains. These reclassifications had no effect on the net assets or net asset value per share of the Fund.
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As of September 30, 2019, the components of distributable earnings (accumulated loss) on a tax basis were as follows:
Undistributed ordinary income | $15,771,736 | ||
Deferred capital losses | ($21,828,022 | ) | |
Net unrealized appreciation (depreciation) | $12,275,773 |
At September 30, 2019, the Fund, for federal income tax purposes, had deferred capital losses of $21,828,022 which would reduce the Fund’s taxable income arising from future net realized gains on investment transactions, if any, to the extent permitted by the Internal Revenue Code, and thus would reduce the amount of distributions to shareholders, which would otherwise be necessary to relieve the Fund of any liability for federal income or excise tax. The deferred capital losses are treated as arising on the first day of the Fund’s next taxable year and retain the same short-term or long-term character as when originally deferred. Of the deferred capital losses at September 30, 2019, $21,828,022 are short-term.
The cost and unrealized appreciation (depreciation) of investments of the Fund at September 30, 2019, as determined on a federal income tax basis, were as follows:
Aggregate cost | $2,115,777,943 | ||
Gross unrealized appreciation | $139,334,428 | ||
Gross unrealized depreciation | (126,075,308) | ||
Net unrealized appreciation (depreciation) | $13,259,120 |
NOTE 5 — SECURITIES LENDING
To generate additional income, the Fund may lend its securities pursuant to a securities lending agency agreement with State Street Bank and Trust Company (SSBT), the securities lending agent. Security loans are subject to termination by the Fund at any time and, therefore, are not considered illiquid investments. The Fund requires that the loan be continuously collateralized by either cash or securities as collateral equal at all times to at least 102% of the market value of the domestic securities loaned and 105% of the market value of the international securities loaned (if applicable). The market value of securities loaned is determined daily and any additional required collateral is delivered to the Fund on the next business day. Cash collateral is generally invested in a money market fund registered under the 1940 Act that is managed by an affiliate of SSBT. Any gain or loss in the market price of the loaned securities that might occur and any interest earned or dividends declared during the term of the loan would accrue to the account of the Fund. Income earned on the investment of collateral, net of broker rebates and other expenses incurred by the securities lending agent, is split between the Fund and the securities lending agent on the basis of agreed upon contractual terms. Non-cash collateral, if any, is held by the lending agent on behalf of the Fund and cannot be sold or re-pledged by the Fund; accordingly, such collateral is not reflected in the Statement of Assets and Liabilities.
The risks associated with lending portfolio securities include, but are not limited to, possible delays in receiving additional collateral or in the recovery of the loaned securities, possible loss of rights to the collateral should the borrower fail financially, as well as risk of loss in the value of the collateral or the value of the investments made with the collateral. The securities lending agent shall indemnify the Fund in the case of default of any securities borrower.
At September 30, 2019, the total value of securities on loan was $76,821,391 and the total value of collateral received was $79,888,034, comprised of cash of $53,169,831 and U.S. government and/or agencies securities of $26,718,203.
The following table provides a breakdown of securities lending transactions accounted for as secured borrowings, the obligations by class of collateral pledged, and the remaining contractual maturity of those transactions as of September 30, 2019.
Remaining Contractual Maturity of the Transactions | |||||||||||||||
Overnight and Continuous | <30 days | 30 to 90 days | >90 days | Total | |||||||||||
Securities Lending Transactions | |||||||||||||||
Common Stocks | $79,888,034 | $— | $— | $— | $79,888,034 |
The carrying amount of the liability for deposits for securities loaned at September 30, 2019 approximated its fair value. If measured at fair value, such liability would have been considered as Level 2 in the fair value hierarchy (see Note 1A) at September 30, 2019.
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NOTE 6 — LINE OF CREDIT
The Fund participates with other funds managed by CRM in a $100 million ($62.5 million prior to June 21, 2019) committed unsecured line of credit agreement with SSBT, which is in effect through June 19, 2020. Borrowings may be made for temporary or emergency purposes only. Borrowings bear interest at the higher of the One-Month London Interbank Offered Rate (LIBOR) in effect that day or the overnight Federal Funds Rate, plus 1.00% per annum. A commitment fee of 0.20% per annum is incurred on the unused portion of the committed facility. An administrative fee of $37,500 was incurred in connection with the increase of the facility in June 2019. These fees are allocated to all participating funds. Because the line of credit is not available exclusively to the Fund, it may be unable to borrow some or all of its requested amounts at any particular time. The Fund had no borrowings outstanding pursuant to this line of credit at September 30, 2019. The Fund did not have any significant borrowings or allocated fees during the year ended September 30, 2019.
Effective at the close of business on October 28, 2019, the Fund and other participating funds managed by CRM terminated the line of credit agreement. Effective October 29, 2019, the Fund participates with other funds managed by EVM and its affiliates, including CRM, in an $800 million unsecured line of credit agreement with a syndicate of banks, which is in effect through October 27, 2020, at terms that are more favorable than the terminated agreement.
NOTE 7 — AFFILIATED COMPANIES
The Fund has invested a portion of its assets designated for high social impact investments in notes (the Notes) issued by Calvert Impact Capital, Inc. (CIC), formerly the Calvert Social Investment Foundation, pursuant to exemptive relief granted by the U.S. Securities and Exchange Commission (the SEC). The Calvert funds first obtained an exemptive order for these investments in 1998. At that time, there was a significant overlap between the Fund Board members and CIC Board members as well as certain other affiliations between CIC and affiliates of the Fund’s investment adviser. In connection with the appointment of CRM as the Fund’s investment adviser, the Calvert funds filed a request for a new exemptive order from the SEC to permit additional investments in the Notes. On October 28, 2019, the SEC issued the requested new exemptive order, allowing the Fund to make additional investments in the Notes. While the overlap between the Fund Board members and CIC Board members generally has decreased since the original order was granted, certain potential points of affiliation between the Fund and CIC remain. CRM has licensed use of the Calvert name to CIC and provides other types of support. CRM’s President and Chief Executive Officer (and the only director/trustee on the Fund Board that is an “interested person” of the Fund) serves on the CIC Board, along with two members of the Advisory Council to the Fund Board and a second officer of CRM. In addition, another director/trustee on the Fund Board serves as a director emeritus on the CIC Board and a member of the Advisory Council to the Fund Board serves as a director emerita on the CIC Board.
At September 30, 2019, the value of the Fund’s investment in the Notes was $1,989,420, which represents 0.1% of the Fund’s net assets. Transactions in the Notes by the Fund for the year ended September 30, 2019 were as follows:
Name of Issuer | Value, beginning of period | Purchases | Sales Proceeds | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Value, end of period | Interest Income | Capital Gain Distributions Received | Principal Amount, end of period | ||||||||||||||||||
High Social Impact Investments Calvert Impact Capital Inc., Community Investment Notes, 1.50%, 12/15/19(1) | $1,924,700 | $— | $— | $— | $64,720 | $1,989,420 | $30,000 | $— | $2,000,000 | ||||||||||||||||||
(1) Restricted security. |
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NOTE 8 — CAPITAL SHARES
Transactions in capital shares for the years ended September 30, 2019 and September 30, 2018 were as follows:
Year Ended September 30, 2019 | Year Ended September 30, 2018 | ||||||||||
Shares | Amount | Shares | Amount | ||||||||
Class A | |||||||||||
Shares sold | 5,131,302 | $80,055,643 | 11,263,459 | $194,432,874 | |||||||
Reinvestment of distributions | 49,242 | 739,118 | 9,049 | 156,375 | |||||||
Shares redeemed | (6,985,125 | ) | (105,845,381 | ) | (5,081,081 | ) | (84,926,221 | ) | |||
Converted from Class C | 15,904 | 242,650 | — | — | |||||||
Net increase (decrease) | (1,788,677 | ) | ($24,807,970 | ) | 6,191,427 | $109,663,028 | |||||
Class C | |||||||||||
Shares sold | 684,007 | $10,374,888 | 1,473,664 | $24,993,031 | |||||||
Reinvestment of distributions | 6,731 | 98,943 | — | — | |||||||
Shares redeemed | (429,880 | ) | (6,487,419 | ) | (162,815 | ) | (2,567,155 | ) | |||
Converted to Class A | (16,277 | ) | (242,650 | ) | — | — | |||||
Net increase | 244,581 | $3,743,762 | 1,310,849 | $22,425,876 | |||||||
Class I | |||||||||||
Shares sold | 91,075,131 | $1,420,261,887 | 63,885,698 | $1,094,110,020 | |||||||
Reinvestment of distributions | 817,003 | 12,369,427 | 58,557 | 1,021,237 | |||||||
Shares redeemed | (44,204,094 | ) | (690,503,493 | ) | (18,240,642 | ) | (301,542,471 | ) | |||
Converted from Class Y | — | — | 10,991,452 | 184,790,484 | |||||||
Net increase | 47,688,040 | $742,127,821 | 56,695,065 | $978,379,270 | |||||||
Class R6 (1) | |||||||||||
Shares sold | 16,658,520 | $266,753,381 | 745,765 | $12,022,644 | |||||||
Reinvestment of distributions | 36,389 | 549,482 | — | — | |||||||
Shares redeemed | (3,843,934 | ) | (62,277,467 | ) | (95,701 | ) | (1,507,104 | ) | |||
Net increase | 12,850,975 | $205,025,396 | 650,064 | $10,515,540 | |||||||
Class Y (2) | |||||||||||
Shares sold | — | $— | 4,489,874 | $76,898,417 | |||||||
Shares redeemed | — | — | (169,118 | ) | (2,897,161 | ) | |||||
Converted to Class I | — | — | (10,904,152 | ) | (184,790,484 | ) | |||||
Net decrease | — | $— | (6,583,396 | ) | ($110,789,228 | ) | |||||
(1) From February 1, 2018 inception. | |||||||||||
(2) Effective December 8, 2017, Class Y shares of the Fund converted to Class I shares at net asset value. Thereafter, Class Y shares were terminated. |
NOTE 9 — RISKS ASSOCIATED WITH FOREIGN INVESTMENTS
Investing in foreign securities involves additional risks relating to political, social, and economic developments abroad. Other risks result from differences between regulations that apply to U.S. and foreign issuers and markets, and the potential for foreign markets to be less liquid and more volatile than U.S. markets. Securities that trade or are denominated in currencies other than the U.S. dollar may be adversely affected by fluctuations in currency exchange rates.
The risks of investing in emerging market securities are greater than those of investing in securities of developed foreign countries. These risks include volatile currency exchange rates, periods of high inflation, increased risk of default, greater social, economic and political uncertainty and instability, less governmental supervision and regulation of securities markets, weaker auditing and financial reporting standards, lack of liquidity in the markets, and the significantly smaller market capitalization of emerging market issuers.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors
Calvert World Values Fund, Inc:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Calvert Emerging Markets Equity Fund (the Fund), a series of Calvert World Values Fund, Inc., including the schedule of investments, as of September 30, 2019, the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two‑year period then ended, and the related notes (collectively, the financial statements) and the financial highlights for each of the years or periods in the five‑year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of September 30, 2019, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two‑year period then ended, and the financial highlights for each of the years or periods in the five‑year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of September 30, 2019, by correspondence with the custodian and brokers. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
![kpmglogoa10.jpg](https://capedge.com/proxy/N-CSR/0001628280-19-014532/kpmglogoa10.jpg)
We have served as the auditor of one or more of the Calvert Funds since 2002.
Philadelphia, Pennsylvania
November 20, 2019
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FEDERAL TAX INFORMATION
The Form 1099-DIV you receive in February 2020 will show the tax status of all distributions paid to your account in calendar year 2019. Shareholders are advised to consult their own tax adviser with respect to the tax consequences of their investment in the Fund. As required by the Internal Revenue Code and/or regulations, shareholders must be notified regarding the status of qualified dividend income for individuals and the foreign tax credit.
Qualified Dividend Income. For the fiscal year ended September 30, 2019, the Fund designates approximately $21,447,081, or up to the maximum amount of such dividends allowable pursuant to the Internal Revenue Code, as qualified dividend income eligible for the reduced tax rate of 15%.
Foreign Tax Credit. For the fiscal year ended September 30, 2019, the Fund paid foreign taxes of $4,339,136 and recognized foreign source income of $42,152,826.
26 www.calvert.com CALVERT EMERGING MARKETS EQUITY FUND ANNUAL REPORT (Unaudited)
MANAGEMENT AND ORGANIZATION
Fund Management. The Directors of Calvert World Values Fund, Inc. (the Corporation) are responsible for the overall management and supervision of the Corporation’s affairs. The Directors and officers of the Corporation are listed below. Except as indicated, each individual has held the office shown or other offices in the same company for the last five years. Directors and officers of the Corporation hold indefinite terms of office. The “Independent Directors” consist of those Directors who are not “interested persons” of the Corporation, as that term is defined under the 1940 Act. The business address of each Director and officer, with the exception of Ms. Gemma and Mr. Kirchner, is 1825 Connecticut Avenue NW, Suite 400, Washington, DC 20009. As used below, “CRM” refers to Calvert Research and Management. Each Director oversees 39 funds in the Calvert fund complex. Each officer serves as an officer of certain other Calvert funds.
Name and Year of Birth | Corporation Position(s) | Position Start Date | Principal Occupation(s) and Other Directorships During Past Five Years and Other Relevant Experience |
Interested Director | |||
John H. Streur(1) 1960 | Director & President | 2015 | President and Chief Executive Officer of Calvert Research and Management (since December 31, 2016). President and Chief Executive Officer of Calvert Investments, Inc. (January 2015 - December 2016); Chief Executive Officer of Calvert Investment Distributors, Inc. (August 2015 - December 2016); Chief Compliance Officer of Calvert Investment Management, Inc. (August 2015 - April 2016); President and Director, Portfolio 21 Investments, Inc. (through October 2014); President, Chief Executive Officer and Director, Managers Investment Group LLC (through January 2012); President and Director, The Managers Funds and Managers AMG Funds (through January 2012). Other Directorships in the Last Five Years. Portfolio 21 Investments, Inc. (asset management) (through October 2014); Managers Investment Group LLC (asset management) (through January 2012); The Managers Funds (asset management) (through January 2012); Managers AMG Funds (asset management) (through January 2012); Calvert Impact Capital, Inc. |
Independent Directors | |||
Richard L. Baird, Jr. 1948 | Director | 2005 | Regional Disaster Recovery Lead, American Red Cross of Greater Pennsylvania (since 2017). Volunteer, American Red Cross (since 2015). Former President and CEO of Adagio Health Inc. (retired in 2014) in Pittsburgh, PA. Other Directorships in the Last Five Years. None. |
Alice Gresham Bullock 1950 | Chair & Director | 2016 | Professor Emerita at Howard University School of Law. Dean Emerita of Howard University School of Law and Deputy Director of the Association of American Law Schools (1992-1994). Other Directorships in the Last Five Years. None. |
Cari M. Dominguez 1949 | Director | 2016 | Former Chair of the U.S. Equal Employment Opportunity Commission. Other Directorships in the Last Five Years. Manpower, Inc. (employment agency); Triple S Management Corporation (managed care); National Association of Corporate Directors. |
John G. Guffey, Jr.(2) 1948 | Director | 1992 | President of Aurora Press Inc., a privately held publisher of trade paperbacks (since January 1997). Other Directorships in the Last Five Years. Calvert Impact Capital, Inc. (through December 31, 2018); Calvert Ventures, LLC. |
Miles D. Harper, III 1962 | Director | 2005 | Partner, Carr Riggs & Ingram (public accounting firm) since October 2014. Partner, Gainer Donnelly & Desroches (public accounting firm) (now Carr Riggs & Ingram), November 1999 - September 2014). Other Directorships in the Last Five Years. Bridgeway Funds (9) (asset management). |
Joy V. Jones 1950 | Director | 2005 | Attorney. Other Directorships in the Last Five Years. Conduit Street Restaurants SUD 2 Limited; Palm Management Restaurant Corporation. |
Anthony A. Williams 1951 | Director | 2016 | CEO and Executive Director of the Federal City Council (July 2012 to present); Senior Adviser and Independent Consultant for McKenna Long & Aldridge LLP (September 2011 to present); Executive Director of Global Government Practice at the Corporate Executive Board (January 2010 to January 2012). Other Directorships in the Last Five Years. Freddie Mac; Evoq Properties/ Meruelo Maddux Properties, Inc. (real estate management); Weston Solutions, Inc. (environmental services); Bipartisan Policy Center’s Debt Reduction Task Force; Chesapeake Bay Foundation; Catholic University of America; Urban Institute (research organization). |
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Principal Officers who are not Directors | |||
Name and Year of Birth | Corporation Position(s) | Position Start Date | Principal Occupation(s) During Past Five Years |
Hope L. Brown 1973 | Chief Compliance Officer | 2014 | Chief Compliance Officer of 39 registered investment companies advised by CRM (since 2014). Vice President and Chief Compliance Officer, Wilmington Funds (2012-2014). |
Maureen A. Gemma(3) 1960 | Secretary, Vice President and Chief Legal Officer | 2016 | Vice President of CRM and officer of 39 registered investment companies advised by CRM (since 2016). Also Vice President of Eaton Vance and certain of its affiliates and officer of 162 registered investment companies advised or administered by Eaton Vance. |
James F. Kirchner(3) 1967 | Treasurer | 2016 | Vice President of CRM and officer of 39 registered investment companies advised by CRM (since 2016). Also Vice President of Eaton Vance and certain of its affiliates and officer of 162 registered investment companies advised or administered by Eaton Vance. |
(1) | Mr. Streur is an interested person of the Fund because of his positions with the Fund’s adviser and certain affiliates. |
(2) | Mr. Guffey is currently married to Rebecca L. Adamson, who serves as a member of the Advisory Council. |
(3) | The business address for Ms. Gemma and Mr. Kirchner is Two International Place, Boston, MA 02110. |
The SAI for the Fund includes additional information about the Directors and officers of the Fund and can be obtained without charge on Calvert’s website at www.calvert.com or by calling 1-800-368-2745.
28 www.calvert.com CALVERT EMERGING MARKETS EQUITY FUND ANNUAL REPORT (Unaudited)
IMPORTANT NOTICES
Privacy. The Calvert Funds and Calvert Research and Management are committed to ensuring your financial privacy. Each of the financial institutions identified below has in effect the following policy (“Privacy Policy”) with respect to nonpublic personal information about its customers:
• | Only such information received from you, through application forms or otherwise, and information about your Calvert fund transactions will be collected. This may include information such as name, address, social security number, tax status, account balances and transactions. |
• | None of such information about you (or former customers) will be disclosed to anyone, except as permitted by law (which includes disclosure to employees necessary to service your account). In the normal course of servicing a customer’s account, Calvert Research and Management may share information with unaffiliated third parties that perform various required services such as transfer agents, custodians and broker-dealers. |
• | Policies and procedures (including physical, electronic and procedural safeguards) are in place that are designed to protect the confidentiality of such information. |
• | The Funds reserve the right to change this Privacy Policy at any time upon proper notification to you. Customers may want to review the Funds’ Privacy Policy periodically for changes by accessing the link on our homepage: www.calvert.com. |
Our pledge of privacy applies to the following entities: the Calvert Family of Funds, Calvert Research and Management and their affiliated service providers, Eaton Vance Management and Eaton Vance Distributors, Inc. In addition, our Privacy Policy applies only to those Calvert customers who are individuals and who have a direct relationship with us. If a customer’s account (i.e., fund shares) is held in the name of a third-party financial advisor/broker-dealer, it is likely that only such advisor’s privacy policies apply to the customer. This notice supersedes all previously issued privacy disclosures. For more information about Calvert’s Privacy Policy, please call 1-800-368-2745.
Delivery of Shareholder Documents. The Securities and Exchange Commission (SEC) permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called “householding” and it helps eliminate duplicate mailings to shareholders. Calvert funds, or your financial intermediary, may household the mailing of your documents indefinitely unless you instruct Calvert funds, or your financial intermediary, otherwise. If you would prefer that your Calvert fund documents not be householded, please contact Calvert funds at 1-800-368-2745, or contact your financial intermediary. Your instructions that householding not apply to delivery of your Calvert fund documents will typically be effective within 30 days of receipt by Calvert funds or your financial intermediary. Separate statements will be generated for each separate account and will be householded as described above.
Portfolio Holdings. Each Calvert fund files a schedule of portfolio holdings on Part F to Form N-PORT with the SEC for the first and third quarters of each fiscal year. The Form N-PORT will be available on the Calvert funds’ website at www.calvert.com, by calling Calvert funds at 1-800-368-2745 or in the EDGAR database on the SEC’s website at www.sec.gov.
Proxy Voting. The Proxy Voting Guidelines that each Calvert fund uses to determine how to vote proxies relating to portfolio securities is provided as an Appendix to the fund’s Statement of Additional Information. The Statement of Additional Information can be obtained free of charge by calling the Calvert funds at 1-800-368-2745, by visiting the Calvert funds’ website at www.calvert.com or visiting the SEC’s website at www.sec.gov. Information regarding how a Calvert fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available by calling Calvert funds, by visiting the Calvert funds’ website at www.calvert.com or by visiting the SEC’s website at www.sec.gov.
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CALVERT EMERGING MARKETS EQUITY FUND | |
Investment Adviser and Administrator Calvert Research and Management 1825 Connecticut Avenue NW, Suite 400 Washington, DC 20009 | Transfer Agent DST Asset Manager Solutions, Inc. 2000 Crown Colony Drive Quincy, MA 02169 |
Investment Sub-Adviser Hermes Investment Management Limited 150 Cheapside London EC2V 6ET | Independent Registered Public Accounting Firm KPMG LLP 1601 Market Street Philadelphia, PA 19103-2499 |
Principal Underwriter* Eaton Vance Distributors, Inc. Two International Place Boston, MA 02110 (617) 482-8260 | Fund Offices 1825 Connecticut Avenue NW, Suite 400 Washington, DC 20009 |
Custodian State Street Bank and Trust Company State Street Financial Center, One Lincoln Street Boston, MA 02111 |
* FINRA BrokerCheck. Investors may check the background of their Investment Professional by contacting the Financial Industry Regulatory Authority (FINRA). FINRA BrokerCheck is a free tool to help investors check the professional background of current and former FINRA-registered securities firms and brokers. FINRA BrokerCheck is available by calling 1-800-289-9999 and at www.FINRA.org. The FINRA BrokerCheck brochure describing this program is available to investors at www.FINRA.org.
Printed on recycled paper. | |
24213 9.30.19 | ![]() |
Item 2. Code of Ethics.
The registrant has adopted a code of ethics applicable to its Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer. The registrant undertakes to provide a copy of such code of ethics to any person upon request, without charge, by calling 1-800-368-2745. The registrant has not amended the code of ethics as described in Form N-CSR during the period covered by this report. The registrant has not granted any waiver, including an implicit waiver, from a provision of the code of ethics as described in Form N-CSR during the period covered by this report.
Item 3. Audit Committee Financial Expert.
The registrant's Board of Directors has determined that Miles D. Harper III, an “independent” Director serving on the registrant’s audit committee, is an “audit committee financial expert,” as defined in Item 3 of Form N-CSR. Under applicable securities laws, a person who is determined to be an audit committee financial expert will not be deemed an "expert" for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and Board of Directors in the absence of such designation or identification.
Item 4. Principal Accountant Fees and Services.
(a) - (d)
The following table presents the aggregate fees billed to the registrant for the registrant’s fiscal years ended September 30, 2018 and September 30, 2019 by KPMG for professional services rendered for the audit of the registrant’s annual financial statements and fees billed for other services rendered by KPMG during such periods.
Fiscal Years Ended | 9/30/18 | %* | 9/30/19 | %* |
Audit Fees | $102,641 | 0% | $109,691 | 0% |
Audit-Related Fees(1) | $0 | 0% | $0 | 0% |
Tax Fees(2) | $20,150 | 0% | $22,000 | 0% |
All Other Fees(3) | $0 | 0% | $0 | 0% |
Total | $122,791 | 0% | $131,691 | 0% |
*Percentage of fees approved by the Audit Committee pursuant to (c)(7)(i)(C) of Rule 2-01 of Reg. S-X (statutory de minimis waiver of Committee’s requirement to pre-approve).
(1) | Audit-related fees consist of the aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under the category of audit fees. |
(2) | Tax fees consist of the aggregate fees billed for professional services rendered by the principal accountant relating to tax compliance, tax advice, and tax planning and specifically include fees for tax return preparation and other related tax compliance/planning matters. |
(3) | All other fees consist of the aggregate fees billed for products and services provided by the principal accountant other than audit, audit-related, and tax services. |
(e) | The Audit Committee is required to pre-approve all audit and non-audit services provided to the registrant by the auditors, and to the registrant’s investment adviser, and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. In determining whether to pre-approve non-audit services, the Audit Committee considers whether the services are consistent with maintaining the independence of the auditors. The Committee may delegate its authority to pre-approve certain matters to one or more of its members. In this regard, the Committee has delegated authority jointly to the Audit Committee Chair together with another Committee member with respect to non-audit services not exceeding $25,000 in each instance. In addition, the Committee has pre-approved the retention of the auditors to provide tax-related services related to the tax treatment and tax accounting of newly acquired securities, upon request by the investment adviser in each instance. |
(f) | Not applicable. |
(g) | Aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser, and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant: |
Fiscal Year ended 9/30/18 | Fiscal Year ended 9/30/19 | ||
$ | %* | $ | %* |
$20,150 | 0% | $22,000 | 0% |
*Percentage of fees approved by the Audit Committee pursuant to (c)(7)(i)(C) of Rule 2-01 of Reg. S-X (statutory de minimis waiver of Committee’s requirement to pre-approve).
(h) | The registrant’s audit committee has considered whether the provision by the registrant’s principal accountant of non-audit services to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant that were not pre-approved pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X is compatible with maintaining the principal accountant’s independence. |
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
Please see schedule of investments contained in the Report to Shareholders included under Item 1 of this Form N-CSR.
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.
Item 11. Controls and Procedures.
(a) The registrant’s principal executive and principal financial officers have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 Act, as amended (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 Securities Exchange Act of 1934 (“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 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. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not applicable.
Item 13. Exhibits.
(a)(1) Registrant’s Code of Ethics- Not applicable (please see Item 2)
(a)(2)(i) President’s Section 302 certification.
(a)(2)(ii) Treasurer’s Section 302 certification.
(b) Combined Section 906 certification.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company 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/ John H. Streur
John H. Streur
President
Date: November 21, 2019
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company 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.
By: /s/ James F. Kirchner
James F. Kirchner
Treasurer
Date: November 21, 2019
By: /s/ John H. Streur
John H. Streur
President
Date: November 21, 2019