UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
(FOR REORGANIZATION OF THE CALVERT NEW AFRICA FUND INTO THE
CALVERT SOUTH AFRICA FUND)
[ X ] PRE-EFFECTIVE AMENDMENT NO. 5 [ ] POST-EFFECTIVE AMENDMENT NO.__
(CHECK APPROPRIATE BOX OR BOXES)
CALVERT IMPACT FUND, INC. REGISTRANT'S TELEPHONE NUMBER
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER) (301) 951-4800
ADDRESS OF PRINCIPAL EXECUTIVE OFFICES APPROX. DATE OF PROPOSED PUBLIC
4550 MONTGOMERY AVENUE OFFERING: March 29, 2001
SUITE 1000N Date of Reorganization
BETHESDA, MD 20814
NAME AND ADDRESS OF AGENT FOR SERVICE:
WILLIAM M. TARTIKOFF, ESQ.
4550 MONTGOMERY AVE. SUITE 1000N
BETHESDA, MD 20814
Per Rule 481(a) of the 1933 Securities Act, please note that the registration
statement for the Calvert South Africa Fund shall be offered to the public on
March 30, 2001.
The Registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with the Securities
Act of 1933 or until the registration statement shall become effective on such
date as the Commission may determine.
Important Information
Regarding Your Investment
In Calvert
February ___, 2001
Dear Shareholder,
I am writing to inform you of the upcoming special meeting of shareholders of
the Calvert New Africa Fund, and to request that you take a few minutes to read
the enclosed material and to mail back the proxy voting card.
You are being asked to vote on a proposal to exchange the assets of the Calvert
New Africa Fund for shares of equal value in the newly formed Calvert South
Africa Fund, a series of Calvert Impact Fund, Inc. The Board of Directors of
Calvert New World Fund, Inc., including myself, believe this change is in the
best interests of the Calvert New Africa Fund, and you, as its shareholders.
We believe that the merger is in everyone's best interests as Calvert has long
standing ties to South Africa and it is important to support the continuing
transformation of South Africa. Selecting RISA Investment Advisers, LLC as a
partner gives Calvert immediate access to a creative, socially-screened product
with one year of out-performance against its benchmark and a relationship with
African Harvest Asset Managers (Proprietary) Limited, the premiere multi-racial
investment firm in South Africa.
Regardless of the number of shares you own, it is important that you take the
time to read the enclosed proxy, and complete and mail your voting card as soon
as you can. A postage paid envelope is enclosed. If shareholders do not return
their proxies, the Fund may have to incur the expense of additional
solicitations. All shareholders benefit from the speedy return of proxies.
I appreciate the time you will take to review this important matter. The Q &
A that follows will assist you in understanding the proposal; however, if we may
be of any assistance, please call us at (800) 368-2750.
Sincerely,
Barbara J. Krumsiek
President
Calvert New World Fund, Inc.
Calvert New Africa Fund
4550 Montgomery Avenue, Suite 1000N
Bethesda, Maryland 20814
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on March 29, 2001
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of the Calvert New
Africa Fund will be held in the Tenth Floor Conference Room of Calvert Group,
Ltd., Air Rights North Tower, 4550 Montgomery Avenue, Suite 1000N, Bethesda,
Maryland at 9:00 a.m. on Thursday, March 29, 2001, for the following purposes:
I. To consider and act on an Agreement and Plan of Reorganization, dated
December 7, 2000, providing for the transfer of substantially all of the assets
of the Calvert New Africa Fund to and the assumption of certain identified
liabilities of the Calvert New Africa Fund by the Calvert South Africa Fund, a
series of Calvert Impact Fund, Inc., in exchange for shares of equal value of
the Calvert South Africa Fund.
II. To transact any other business that may properly come before the meeting
or any adjournment or adjournments thereof.
Shareholders of record at the close of business on February 7, 2001, are
entitled to notice of and to vote at this meeting or any adjournment thereof.
By Order of the Board of Directors,
William M. Tartikoff, Esq.
Secretary
February __, 2001
Please execute the enclosed proxy and return it promptly in the enclosed
envelope, thus enabling the Fund to avoid unnecessary expense and delay. Your
vote is extremely important, no matter how large or small your holdings may be.
No postage is required if mailed in the United States. The proxy is revocable
and will not affect your right to vote in person if you attend the Special
Meeting.
IMPORTANT NOTICE TO
Calvert New Africa Fund SHAREHOLDERS
QUESTIONS & ANSWERS
Please read the complete text of the enclosed Prospectus/Proxy Statement. For
your convenience, we have provided a brief overview of the matters to be voted
upon. Your vote is important. If you have any questions regarding the proposal,
please call us at (800) 368-2745. We appreciate you investing with Calvert, and
look forward to a continuing relationship.
Q. Why am I receiving a proxy statement?
A. Calvert New World Fund, Inc. is seeking your approval of a reorganization
of the shares of its series - Calvert New Africa Fund - into the Calvert South
Africa Fund, a series of Calvert Impact Fund, Inc.
Q. What are the effects of this reorganization?
A. The Reorganization will affect the Calvert New Africa Fund in that all of
its assets will be transferred to the Calvert South Africa Fund. In turn, you
will receive shares of the Calvert South Africa Fund.
Through the Reorganization, the surviving Calvert South Africa Fund is
expected to give Fund shareholders access to a South Africa concentrated,
socially screened investment product.
At the same time as this proposed transaction, the Board of Trustees of The
RISA Fund will be soliciting its shareholders to also merge into the Calvert
South Africa Fund.
Q. Is there a change in the management of the Fund?
A. Yes. The investment adviser of the Calvert South Africa Fund will be
Calvert Asset Management Company, Inc., and the investment sub-advisers jointly
will be RISA Investment Advisers, LLC and African Harvest Asset Managers
(Proprietary) Limited.
Q. Are there differences in the investment objective of the Calvert New
Africa Fund and the Calvert South Africa Fund?
A. The Calvert New Africa Fund's investment objective is "to seek to achieve
capital appreciation over time through investments primarily in the emerging
market of equity and equity-linked securities and fixed-income securities of
African and African-related companies," whereas the Calvert South Africa Fund's
investment objective is "to seek maximum total return by investing in securities
of South African issuers." Accordingly, the main difference between the
investment objectives of the Funds is that the Calvert South Africa Fund will
have a narrower investment scope, focusing mainly on South African companies, as
opposed to the Calvert New Africa Fund's pan-African focus.
Q. Will the Calvert South Africa Fund have social screens?
A. The Labor Research Service of South Africa will provide the social
screening for the Calvert South Africa Fund, the criterion are companies that:
- create jobs and train workers;
- encourage economic and social empowerment of the majority population;
- encourage employment equity;
- maintain quality workplace conditions;
- protect the environment;
- enforce high health and safety standards;
- demonstrate open and effective corporate governance; and
- respect the rights of indigenous peoples.
Q. How do the expense structures and fees of the Funds compare? Is there a
benefit to me?
A. It is anticipated that current shareholder expenses (before
reimbursements and fee waivers) will actually decrease. The following table
reflects the current expense structure for the Calvert New Africa Fund and the
Calvert South Africa Fund estimated expense structure expressed as a percentage
of average annual net assets:
Calvert Calvert
New Africa Fund South Africa Fund
Management fees 1.75% 1.25%
Advisor's fees 0.495% 0.25%
Subadvisors' fees 0.755% 0.80%
Administrative fees 0.25% 0.20%
12b-1/Distribution 0.25% 0.25%
Other Expenses 4.39% 2.21%
Gross Fees 6.39% 3.74%
Fee Reimbursement 3.11% 1.49%
Net Fees 3.28% 2.25%
The "Other Expenses" for the Calvert New Africa Fund are based on Fiscal
Year 2000 audited numbers. The advisory and administrative fees are based on the
respective management contracts.
Calvert, RISA Investment Advisers, and African Harvest have agreed to waive
fees and/or reimburse expenses to maintain a maximum 2.25% expense ratio for
Class A of the Calvert South Africa Fund in the first year after the date of the
Reorganization (net of any expense offset arrangements), if necessary.
Q. What will be the name of the surviving fund after the Reorganization is
complete?
A. The Calvert South Africa Fund will be the fund to survive the merger.
Q. What will be the size of the surviving fund after the Reorganization?
A. If the proposal presented in the proxy statement is approved, as well as
a similar proposal being presented to The RISA Fund's shareholders, the combined
Calvert South Africa Fund is expected to have approximately $5 million in
assets.
Q. What are the federal tax implications of the Reorganization?
A. The Reorganization will not be a taxable event (i.e., no gain or loss
will be recognized) to the Fund, the Calvert South Africa Fund, or to you as a
shareholder.
Q. What if there are not enough votes to reach a quorum by the scheduled
special shareholder meeting date?
A. If not enough shareholders vote, we will need to take further action. We
may contact you by mail, telephone, facsimile, or by personal interview.
Therefore, we encourage you to vote as soon as you review the enclosed proxy
materials in order to avoid an additional expense to the Fund of follow-up
mailings, telephone calls or other solicitations.
Q. If the proposal is not approved for the Calvert New Africa Fund, will
Calvert propose liquidating that Fund?
A. If the proposal to merge the Calvert New Africa Fund is not approved, the
Board will consider other options including a proposal to liquidate the Fund.
Q. How will you determine the number of shares of the Calvert South Africa
Fund that I will receive?
A. The Closing Date is March 29, 2001. As of 4:00 p.m. Eastern Time on the
Closing Date, you will receive that number of full and fractional Calvert South
Africa Fund shares equal in value to the shares you hold in the Calvert New
Africa Fund on that date.
Q. What impact will the Reorganization have on the share price of the
Calvert South Africa Fund?
A. The net asset value per share of the Calvert South Africa Fund will not
be changed by the Reorganization.
Q. Who is paying for expenses related to the shareholder meeting?
A. Calvert New Africa Fund will pay for the expenses related to the
shareholder meeting.
Q. How does the Board of Directors of the Calvert New Africa Fund suggest
that I vote?
A. After careful consideration, the Board of Directors of the Calvert New
Africa Fund unanimously recommends that you vote "FOR" the item proposed on the
enclosed proxy card.
Q. How do I vote my shares?
A. You can vote your shares by attending the Special Meeting of Shareholders
in person and submitting the enclosed proxy card at that time, or by completing
and signing the proxy card, and mailing it in the enclosed postage paid
envelope. If you need any assistance, or have any questions regarding the
proposal or how to vote your shares, please call us at (800) 368-2745.
Q. Will my vote make a difference?
A. Your vote is needed to ensure that the proposals can be acted upon. Your
immediate response on the enclosed proxy card will help save on the costs of any
further solicitations for a shareholder vote. We encourage all shareholders to
participate in the governance of the Calvert New Africa Fund.
Q. How will this affect my account?
A. You can expect the same level of management expertise and high-quality
shareholder service to which you've grown accustomed.
Q. How do I sign the proxy card?
A. Voting instruction forms must be executed properly. When forms are not
signed as required by law, you and the Fund must undertake the time and expense
to take steps to validate your vote. The following guide was prepared to help
you choose the proper format for signing your form:
1. Individual Accounts: Your name should be signed exactly as it appears
in the registration on the voting instruction form.
2. Joint Accounts: Either party may sign, but the name of the party signing
should conform exactly to a name shown in the registration.
3. All other accounts should show the capacity of the individual signing.
This can be shown either in the form of the account registration itself or
by the individual executing the voting instruction form.
For example:
REGISTRATION VALID SIGNATURE
A.
1) Save the Earth Corp. Jane Q. Nature, Treasurer
2) Save the Earth Corp. Jane Q. Nature, Treasurer
c/o Jane Q. Nature, Treasurer
B.
1) Save the Earth Corp. Jon B. Goodhealth, Trustee
Profit Sharing Plan
2) Save the Earth Trust Jon B. Goodhealth, Trustee
3) Jon B. Goodhealth, Trustee Jon B. Goodhealth, Trustee
u/t/d 5/1/78
C.
1) David Smith, Cust. David Smith
f/b/o Jason Smith UGMA
Voting by mail is quick and easy. Everything you need is enclosed.
PROSPECTUS AND PROXY STATEMENT
February __, 2001
Acquisition of the assets of the
Calvert New Africa Fund
By and in exchange for shares of Calvert South Africa Fund
4550 Montgomery Avenue, Bethesda, Maryland 20814, (800) 368-2745
This Prospectus and Proxy Statement relates to the proposed transfer of all of
the assets and the assumption of certain identified liabilities of the Calvert
New Africa Fund in exchange for shares of the Calvert South Africa Fund.
Following the transfer, Calvert South Africa Fund shares will be distributed to
shareholders of the Calvert New Africa Fund in liquidation of the Fund and the
Calvert New Africa Fund will be dissolved. As a result of the proposed
transaction, each shareholder of the Calvert New Africa Fund will receive that
number of Calvert South Africa Fund shares equal in value at the date of the
exchange to the value of such shareholder's respective shares of the Calvert New
Africa Fund. The transaction will only occur if shareholders vote in favor of
the proposed transfer.
The Calvert South Africa Fund is a series of Calvert Impact Fund, Inc., a newly
formed open-end diversified management investment company. Its investment
objective is to seek maximum total return by investing in securities of South
African issuers.
The Calvert New Africa Fund is a series of Calvert New World, Inc. As of
December 31, 2000, the net assets of the Fund were $4,021,843. Its investment
objective is to seek to achieve capital appreciation over time through
investments primarily in the emerging market of equity and equity-linked
securities and fixed-income securities of African and African-related companies.
The Calvert South Africa Fund and the Calvert New Africa Fund both have a 4.75%
maximum sales charge. The sales charge is added to the purchase price of shares,
but will not be applied to shares issued in the reorganization. See "Purchase
Procedures". Each of the Funds has a distribution plan that permits it to pay
certain expenses associated with the distribution of its shares. Calvert Asset
Management Company, Inc. ("Calvert") is the investment advisor for the Calvert
South Africa Fund, with RISA Investment Advisers, LLC and African Harvest Asset
Managers (Proprietary) Limited jointly serving as the subadvisors. Currently,
for the Calvert New Africa Fund, Calvert-Sloan Advisers, L.L.C. is the
investment advisor, while New Africa Advisers, Inc. and Calvert Asset Management
Company, Inc. jointly serve as the subadvisors.
This Prospectus and Proxy Statement is expected to be mailed to shareholders of
record on or about February ___, 2001.
This Prospectus and Proxy Statement, which should be retained for future
reference, sets forth concisely the information about the Calvert South Africa
Fund that a prospective investor should know before investing. This Prospectus
and Proxy Statement is accompanied by the Prospectus of the Calvert South Africa
Fund dated February ___, 2001 and is incorporated herein by reference. A
Statement of Additional Information dated February ___, 2001, containing
additional information about the proposed reorganization, has been filed with
the Securities and Exchange Commission and is incorporated by reference into
this Prospectus and Proxy Statement. The Prospectus and Statement of Additional
Information of the Calvert New Africa Fund, both dated July 31, 2000, the Annual
Report to Shareholders dated March 31, 2000, and the Semi-Annual Report to
Shareholders dated September 30, 2000, have been filed with the SEC and are
incorporated herein by reference. Copies of these documents may be obtained
without charge by writing the Fund at 4550 Montgomery Avenue, Suite 1000N,
Bethesda, Maryland 20814, or by calling (800) 368-2745.
These securities have not been approved or disapproved by the Securities and
Exchange Commission or any state securities commission, nor has the securities
and exchange commission or any state securities commission passed on the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
The shares offered by this prospectus and proxy statement are not deposits or
obligations of, or guaranteed or endorsed by, any bank, and are not federally
insured or otherwise protected by the FDIC, the federal reserve board, or any
other agency. When investors sell shares of the funds, the value may be higher
or lower than the amount originally paid.
TABLE OF CONTENTS
Synopsis 4
Risk Factors 7
Expense Comparisons 8
Reasons for the Reorganization 10
Information about the Reorganization 12
Information about the Calvert South Africa Fund 15
Shareholder Information 26
Comparison of Investment Policies 28
Comparative Information on Shareholder Rights 28
General Information about the Funds 30
Other Business 30
Voting Information 30
Adjournment 33
Exhibit A - Agreement and Plan of Reorganization 34
SYNOPSIS
Reasons for the Reorganization. The Board of Directors of Calvert New World
Fund, Inc. (the "Directors") believe that the proposed Reorganization would be
in the best interests of the shareholders of the Calvert New Africa Fund in
considering various issues connected with concerns over the Calvert New Africa
Fund's well being, and recognizing Calvert's continued goal to manifest visible
support for the continuing transformation of South Africa.
The Calvert New Africa Fund has suffered from, at times, poor performance and
lackluster sales and Management and the Directors have discussed various
alternatives from "staying the course" to closing the Fund. However, recognizing
Calvert New Africa's desire for a visible presence in Africa that would result
in basic economic development by investing in and assisting with the growth of
African companies, it was felt best to combine the Fund with another fund
concentrating in investments in South Africa, the Calvert South Africa Fund.
Proposed Transaction. The Directors have authorized the Fund to enter into an
Agreement and Plan of Reorganization (the "Agreement" or "Plan") providing for
the transfer of all the assets and the assumption of certain identified
liabilities of the Calvert New Africa Fund to the Calvert South Africa Fund in
exchange for like shares of the Calvert South Africa Fund. Following the
transfer, Calvert South Africa Fund shares will be distributed to the respective
shareholders of the Calvert New Africa Fund in liquidation of the Calvert New
Africa Fund, and the Calvert New Africa Fund will be dissolved. As a result of
the proposed transaction, each shareholder of the Calvert New Africa Fund will
receive that number of full and fractional Calvert South Africa Fund shares
equal in value at the date of the exchange to the value of such shareholder's
shares of the Calvert South Africa Fund. For the reasons stated above, the
Directors, including the independent Directors, have concluded that the
Reorganization would be in the best interests of the shareholders of the Calvert
New Africa Fund and recommend shareholder approval.
At the same time as this proposed transaction, the Board of Trustees of The RISA
Fund will be soliciting its shareholders to also merge into the Calvert South
Africa Fund.
Tax Consequences. The Plan is conditioned upon receipt by the Calvert New Africa
Fund of an opinion of counsel that no gain or loss will be recognized by it or
its shareholders as a result of the Reorganization. The tax basis of Calvert
South Africa Fund shares received by a shareholder will be the same as the tax
basis of the shareholder's Calvert New Africa Fund shares. In addition, the tax
basis of the Calvert New Africa Fund's assets in the hands of Calvert South
Africa Fund as a result of the Reorganization will be the same as the tax basis
of such assets in the hands of the Calvert New Africa Fund prior to the
Reorganization. See "Information about the Reorganization."
Investment Policies. Shareholders should consider the differences in investment
policies between the Calvert New Africa Fund and Calvert South Africa Fund.
While both of the Funds have the same focus of investing in Africa, the Calvert
South Africa Fund has a narrower investment scope, focusing mainly on South
African companies, as opposed to the Calvert New Africa Fund's pan-African
focus. Further, the Calvert South Africa Fund's objective is to seek "maximum
total return," whereas the Calvert New Africa Fund's investment objective is "to
achieve capital appreciation over time" through its investments. See "Comparison
of Investment Policies."
Purchases. Shares of the Calvert New Africa Fund and Calvert South Africa Fund
are sold on a continuous basis at net asset value plus the appropriate sales
charge, which is subject to reduction by right of accumulation, group purchase,
and letter of intent. Employee purchases and certain plans qualified under the
Internal Revenue Code of 1986, as amended (the "Code") may purchase shares with
no sales charge, and all Fund shareholders may reinvest dividends without paying
a sales charge. Shares issued in the Reorganization will not be assessed any
sales charge.
Sales Charges. The Funds' shares are offered at net asset value plus a front-end
sales charge as follows:
Your investment in Sales Charge % % of Amt.
Class A shares of offering price Invested
Less than $50,000 4.75% 4.99%
$50,000 but less than $100,000 3.75% 3.90%
$100,000 but less than $250,000 2.75% 2.83%
$250,000 but less than $500,000 1.75% 1.78%
$500,000 but less than $1,000,000 1.00% 1.01%
$1,000,000 and over None* None*
*Purchases of shares at net asset value for accounts with $1,000,000 or more are
subject to a one year contingent deferred sales charge of 1.00%.
The minimum initial investment in the Calvert New Africa Fund is $2,000 and
$5,000 for the Calvert South Africa Fund, and the minimum subsequent investment
is $250 for both Funds (except in the case of certain retirement plans).
Exchange Privileges. Shareholders of the Calvert New Africa Fund and the Calvert
South Africa Fund may exchange Fund shares for shares of a variety of other
Calvert Funds. Each such exchange represents a sale of Fund shares, which may
produce a gain or loss for tax purposes. There is no additional charge for
exchanges.
Exchange requests will not be accepted on any day when Calvert is open but the
Fund's custodian bank is closed (i.e., Columbus Day and Veteran's Day); these
exchange requests will be processed the next day the Fund's custodian bank is
open.
Both Funds and the distributor reserve the right at any time to reject or cancel
any part of any purchases (including exchange purchases); modify any terms or
conditions of purchase of shares of any Fund; or withdraw all or any part of the
offering made by the prospectus. To protect the interest of investors, both
Funds and the distributor may reject any order considered market-timing
activity.
The Calvert New Africa Fund and Calvert South Africa Fund reserve the right to
terminate or modify the exchange privilege with 60 days' written notice.
Distribution Procedures. The Calvert New Africa Fund and Calvert South Africa
Fund pay dividends from their respective net investment income annually.
Distributions of net short-term capital gains (treated as dividends for tax
purposes) and net long-term capital gains, if any, are normally paid once a
year; however, neither Fund anticipates making any such distributions unless
available capital loss carryovers have been used or have expired. Shareholders
of the Funds may reinvest distributions. Your existing election in the Calvert
New Africa Fund with respect to dividends and/or capital gains will be continued
with respect to the shares of Calvert South Africa Fund you acquire in
connection with the Reorganization unless you notify the Calvert South Africa
Fund of a new election.
Redemption Procedures. At any time and in any amount, shares of the Calvert New
Africa Fund and Calvert South Africa Fund may be redeemed by sending a letter of
instruction, including your name, account and Fund number, the number of shares
or dollar amount, and where you want the money to be sent. This letter of
instruction must be signed by all required authorized signers. Further
documentation may be required from corporations, fiduciaries, pension plans and
institutional investors.
Shares may also be redeemed by telephone or through brokers. Both Funds may
impose a charge of $5 for wire transfers of less than $1,000. Both Funds may,
after 30 days' notice, close your accounts if the account falls below $1,000 and
the balance is not brought up to the required minimum amount.
Valuation Practices. A Fund's assets are normally valued utilizing the average
bid dealer market quotation as furnished by an independent pricing service.
Securities and other assets for which market quotations are not readily
available are valued based on the current market for similar securities or
assets, as determined in good faith by the Fund's Advisor under the supervision
of the Board of Directors. The Fund determines the net asset value of its shares
every business day at the close of the regular session of the New York Stock
Exchange (generally, 4:00 p.m. Eastern time), and at such other times as may be
necessary or appropriate. The Fund does not determine net asset value on certain
national
holidays or other days on which the New York Stock Exchange is closed: New
Year's Day, Martin Luther King Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
RISK FACTORS
The risks attendant to investing in the Calvert South Africa Fund are the same
as those risks, shareholders have assumed by investing in the Calvert New Africa
Fund. General risks in investing in any fund would be that shareholders could
lose money on their investment in a Fund, or the Fund could underperform.
Additional risks due to the international nature of these Funds would be that
the stock markets in South Africa go down and that investment in foreign
securities involves additional risks relating to political, social and economic
developments abroad. Other risks from these investments result from the
differences between the regulations to which U.S. and foreign issuers and
markets are subject, the potential for foreign markets to be less liquid than
U.S. markets, and the currency risk associated with securities that trade in
currencies other than the U.S. dollar.
Certain of the current holdings of the Calvert New Africa Fund may be illiquid
and/or may not qualify as "New South Africa Companies" pursuant to the
investment policies of the Calvert South Africa Fund. In reconciling the
investment policies of both Funds, the Advisor and Subadvisors will begin to
transition the portfolio holdings from the Calvert New Africa Fund to the
Calvert South Africa Fund. To the extent that certain of these non-qualifying
New South Africa Companies transfer to the Calvert South Africa Fund following
the Reorganization, transaction costs could be incurred in transitioning these
holdings out of the Fund.
EXPENSE COMPARISONS
Calvert Pro New Africa Fund Forma (Surviving
Calvert South
Africa Fund)
Shareholder Fees
Maximum sales charge (load)
imposed on purchases 4.75% 4.75%
(as a percentage of
offering price)
Maximum deferred sales
charge (load)
(as a percentage of purchase None None
or redemption proceeds,
whichever is lower)
Annual fund operating
expenses1
Management fees 1.75% 1.25%
Distribution and service
(12b-1) fees 0.25% 0.25%
Other expenses 4.39% 2.24%
Total annual fund
operating expenses 6.39% 3.74%
Fee waiver and/or expense reimbursement (3.11%)2 (1.49%)3
Net expenses 3.28% 2.25%4
Notes to Fees and Expenses Table
1 Expenses are based on estimates to reflect expenses expected to be
incurred for the upcoming fiscal year for the Funds, unless otherwise
indicated. Management fees include a subadvisory fee, paid by the
Advisor to the Subadvisor. Management fees also include an
administrative fee paid by the Fund to Calvert Administrative Services
Company, an affiliate of the Advisor.
2 Calvert-Sloan has agreed to limit annual fund operating expenses (net of
any expense offset arrangements) through July 31, 2001. The contractual
expense cap is shown as "Net expenses," this is the maximum amount of
operating expenses that may be charged to the Calvert New Africa Fund
through
July 31, 2001. For the purposes of this expense limit, operating expenses
do not include interest expense, brokerage commissions, extraordinary
expenses, taxes and capital items. For the fiscal year ended March 31,
2000, interest expense was 1.67%. The Fund has an offset arrangement
with the custodian bank whereby the custodian and transfer agent fees
may be paid indirectly by credits on the Fund's uninvested cash
balances. These credits are used to reduce the Fund's expenses.
3 The Advisor and Subadvisors have agreed to limit annual fund operating
expenses (net of any expense offset arrangements, estimated to be approxi-
mately 0.20%) through March 29, 2002. For the purposes of this expense
limit, operating expenses do not include interest expense, brokerage commis-
sions, extraordinary expenses, taxes and capital items. the Fund has an offset
arrangement with its custodian bank whereby the custodian and transfer
agents fees may be paid indirectly by credits on the Fund's uninvested cash
balances. These credits are used to reduce the Fund's expenses.
4 The contractual expense cap is 2.25%. The contractual expense cap is shown
as "Net expenses," this is the maximum amount of operating expenses that
may be charged to the Fund through March 29, 2002.
Example. This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that:
- - You invest $10,000 in the Fund for the time periods indicated;
- - Your investment has a 5% return each year; and
- - The Fund's operating expenses remain the same.
Although your actual costs may be higher or lower, under these assumptions your
costs would be:
Fund (Unaudited) 1 Year 3 Years
Calvert New Africa Fund $790 $2,011
Pro Forma
(Surviving Calvert
South Africa Fund) $692 $1,434
Distribution and Service Fees. Both Funds have adopted a plan under Rule 12b-1
of the Investment Company Act of 1940 (the "1940 Act") that allows each Fund to
pay distribution fees for the sale and distribution of its shares. The
distribution plan also pays service fees to person (such as your financial
professional) for services provided to shareholders. Because these fees are paid
out of a Fund's assets on an ongoing basis, over time, these fees will increase
the costs of your investment and my cost you more than paying other types of
sales charges.
The maximum annual percentage payable under each Fund's distribution plan totals
0.25%, based on average daily net assets of each Fund. The maximum annual
percentage payable under the Calvert South Africa Fund's distribution plan
totals 0.35%, however, the Fund's Board of Directors has only approved charges
of 0.25%, based on average daily net assets of the Calvert South Africa Fund.
Reasons For the Reorganization
The Board of Directors of Calvert New World Fund, Inc. believe that the proposed
Reorganization would be in the best interests of the shareholders of the Calvert
New Africa Fund.
To this end, the Directors recommend that shareholders of the Calvert New Africa
Fund approve the exchange of its assets to the Calvert South Africa Fund for
shares of the Calvert South Africa Fund, which will be distributed to Calvert
New Africa Fund shareholders upon the liquidation and/or dissolution of the
Calvert New Africa Fund.
In determining whether to recommend approval of the Reorganization to
shareholders of the Calvert New Africa Fund, the Directors considered a number
of factors, including, but not limited to: (1) the capabilities and resources of
the Calvert South Africa Fund, its advisor and subadvisors and other service
providers in the areas of investment, marketing, and shareholder services; (2)
the expenses and advisory fees applicable to the Fund before the Reorganization
and the estimated expense ratios for shareholders in the Calvert South Africa
Fund after the Reorganization; (3) the comparative investment performance of
RISA Investment Advisers and African Harvest; (4) the comparative difference in
these subadvisors' investment styles and investment and social research
capabilities; (5) the terms and conditions of the Agreement and Plan of
Reorganization and whether the Reorganization would result in dilution of
current Fund shareholders' interests; (6) the potential economies of scale
realizable as a result of the Reorganization; (7) the service features available
to shareholders of both the Calvert New Africa Fund and the Calvert South Africa
Fund; (8) the costs estimated to be incurred to complete the Reorganization; (9)
the future growth prospects of the Calvert South Africa Fund after the
Reorganization; and (10) the non-taxable treatment of the Reorganization.
In this regard, the Directors reviewed information provided by RISA Investment
Advisers and African Harvest relating to the anticipated impact to the
shareholders of the Fund as a result of the Reorganization. The Directors
considered the probability that future increases in asset levels of the Calvert
South Africa Fund are expected to result in reduced per share expenses and
achievement of
economies of scale, although there can, of course, be no assurances in this
regard.
INFORMATION ABOUT THE REORGANIZATION
Plan of Reorganization. The proposed Agreement and Plan of Reorganization (the
"Agreement" or "Plan") provides that the Calvert South Africa Fund will acquire
all the assets and certain liabilities of the Calvert New Africa Fund in
exchange for shares of the Calvert South Africa Fund on March 29, 2001. A copy
of the Plan is attached as Exhibit A to this Proxy Statement. Discussion of the
Plan herein is qualified in its entirety by reference to the Plan in Exhibit A.
The number of full and fractional Calvert South Africa Fund shares to be issued
to shareholders of the Calvert New Africa Fund will equal the value of the
shares of the Calvert New Africa Fund outstanding immediately prior to the
Reorganization. Portfolio securities of the Calvert New Africa Fund will be
valued in accordance with the valuation practices of the Calvert South Africa
Fund (See, "About the Funds"). At the time of the Reorganization, the Calvert
New Africa Fund will pay all of its obligations and liabilities except those
specified in the Plan, which will be paid by the Calvert South Africa Fund. The
Reorganization will be accounted for by the method of accounting commonly used
by open end investment companies.
As soon as practicable after the Closing Date, the Calvert New Africa Fund will
liquidate and distribute pro rata to its shareholders of record as of the close
of business on March 29, 2001, the full and fractional shares of the Calvert
South Africa Fund at an aggregate net asset value equal to the value of the
shareholder's shares in the Calvert New Africa Fund next determined after the
effective time of the transaction. This method of valuation is also consistent
with interpretations of Rule 22c-1 under the 1940 Act by the Securities and
Exchange Commission's Division of Investment Management. Such liquidation and
distribution will be accomplished by the establishment of accounts on the share
records of the Calvert New Africa Fund, representing the respective pro rata
number of full and fractional shares of the Calvert South Africa Fund due
shareholders of the Calvert New Africa Fund.
The consummation of the Plan is subject to the conditions set forth therein:
Shareholder Approval. The Plan shall have been approved by the affirmative vote
of the holders of a majority (as defined in the 1940 Act) of the outstanding
shares of capital stock of the Calvert New Africa Fund.
Representations, Warranties and, Agreements. Both parties to the Reorganization
shall have complied with its respective responsibilities under the Plan, the
respective representations and warranties contained in this Plan shall be true
in all material respects, and there shall have been no material adverse change
in the financial condition, results of operations, business, properties, or
assets of either party since December 31, 2000. Both parties shall produce
certificates satisfactory in form and substance indicating that it has met the
terms of the Plan.
Regulatory Approval. The Registration Statement for the Calvert South Africa
Fund shall have been declared effective by the Securities and Exchange
Commission and all necessary orders with respect to the transactions
contemplated by the Plan shall have been granted by the Securities and Exchange
Commission; and all approvals, registrations, and exemptions under federal and
state laws considered to be necessary shall have been obtained.
Tax Opinion. Both parties to the Reorganization shall have received opinions of
counsel, addressed to and in form and substance satisfactory, as to certain of
the federal income tax consequences of the Reorganization under the Internal
Revenue Code to the Calvert New Africa Fund and its shareholders. For purposes
of rendering its opinion, counsel may rely exclusively and without independent
verification, as to factual matters, on the statements made in the Plan, this
proxy statement, and on such other written representations as the Calvert New
Africa Fund and the Calvert South Africa Fund, respectively, will have verified.
The opinion of counsel will be to the effect that, based on the facts and
assumptions stated therein, for federal income tax purposes:
(1) Neither the Calvert New Africa Fund nor Calvert South Africa Fund will
recognize any gain or loss upon the transfer of the assets of the Calvert New
Africa Fund to and the assumption of its liabilities by Calvert South Africa
Fund in exchange for Calvert South Africa Fund shares and upon the distribution
(whether actual or constructive) of Calvert South Africa Fund shares to its
shareholders in exchange for their shares of capital stock of the Calvert New
Africa Fund;
(2) The shareholders of the Calvert New Africa Fund who receive Calvert
South Africa Fund shares pursuant to the Reorganization will not recognize any
gain or loss upon the exchange (whether actual or constructive) of their shares
of the Calvert New Africa Fund for Calvert South Africa Fund shares (including
any fractional share interests they are deemed to have received) pursuant to the
Reorganization;
(3) The basis of Calvert South Africa Fund shares received by Calvert New
Africa Fund shareholders will be the same as the basis of the shares of capital
stock of the Calvert New Africa Fund surrendered in the exchange; and
(4) The basis of the Calvert New Africa Fund's assets acquired by the
Calvert South Africa Fund will be the same as the basis of such assets to the
Calvert New Africa Fund immediately prior to the Reorganization.
The Plan may be terminated and the Reorganization abandoned at any time before
or after approval by Calvert New Africa Fund shareholders, prior to the Closing
Date by mutual consent of the parties, or by either, if any condition set
forth in the Plan has not been fulfilled or has been waived by the party
entitled to its benefits. In accordance with the Plan, the Calvert New Africa
Fund and the Calvert South Africa Fund will be responsible for payment of their
pro rata expenses incurred in connection with the Reorganization.
Description of Calvert South Africa Fund Shares. Full and fractional shares of
Calvert South Africa Fund will be issued to each shareholder in accordance with
the procedures under the Plan as described above. Each share will be fully paid
and non assessable when issued and transferable without restrictions and will
have no preemptive or conversion rights.
Federal Income Tax Consequences. The Plan is a tax-free reorganization pursuant
to Section 368(a)(1)(C) of the Code. It is the opinion of outside counsel to
the Calvert New Africa Fund and the Calvert South Africa Fund that, on the basis
of the existing provisions of the Code, current administrative rules and court
decisions, for federal income tax purposes: (1) no gain or loss will be
recognized by the Calvert New Africa Fund upon the transfer of assets to and
assumption of certain of its liabilities in exchange for Calvert South Africa
Fund shares (Section 1032(a)); (2) the basis and holding period immediately
after the Reorganization for Calvert South Africa Fund shareholders will be same
as the basis and holding period of the Calvert New Africa Fund shares held
immediately prior to the exchange (Section 354, 356); and (3) the basis and
holding period of such Calvert New Africa Fund assets acquired by Calvert South
Africa Fund will be the same as the basis and holding period of such assets of
the Calvert New Africa Fund immediately prior to the Reorganization (Section 362
(b), 1223(2)).
Opinions of Counsel are not binding on the Internal Revenue Service or the
Courts. If the Reorganization is consummated but does not qualify as a tax-free
reorganization under the Code, the consequences described above would not be
applicable. Shareholders of the Calvert New Africa Fund should consult their
tax advisors regarding the effect, if any, of the proposed reorganization in
light of their individual circumstances. Since the foregoing discussion relates
only to the federal income tax consequences of the Reorganization, shareholders
of the Calvert New Africa Fund should also consult their tax advisors as to the
state and local tax consequences, if any, of the Reorganization.
Capitalization. The following table shows the capitalization of the Calvert New
Africa Fund as of December 31, 2000, and on a pro forma basis the
capitalization of the Calvert South Africa Fund as of the date of proposed
acquisition of assets at net asset value.
Pro Forma (Surviving Calvert New
Calvert South
Africa Fund Africa Fund)*
Net Asset Value Per Share $5.36 $15.00
Shares Outstanding 750,401 268,123
*The Pro Forma combined net assets do not reflect adjustments with respect to
distributions prior to the Reorganization. The actual exchange ratio will be
determined based on the relative net asset value per share on the acquisition
date.
INFORMATION ABOUT THE CALVERT SOUTH AFRICA FUND
Investment Objective. The Calvert South Africa Fund will seek maximum total
return by investing in securities of South African issuers. The Fund considers a
company to be a South African issuer if the company derives its revenues mainly
from business activities in South Africa or its stock is traded principally on a
South African exchange. This objective may be changed by the Fund's Board of
Directors without shareholder approval.
Principal Investment Strategies. The Calvert South Africa Fund typically invests
at least 75% of its assets in publicly traded stocks of South African companies
with above average growth aspects. Management describe companies that pass its
proactive screens as "New South Africa Companies." Management believes that New
South Africa Companies, as a group, will outperform the Johannesburg Stock
Exchange All Shares Index over time because they have embraced the social and
economic transformation sweeping South Africa.
These companies:
- - create jobs and train workers;
- - encourage economic and social empowerment of the majority population;
- - encourage employment equity;
- - maintain quality workplace conditions;
- - protect the environment;
- - enforce high health and safety standards;
- - demonstrate open and effective corporate governance; and
- - respect the rights of indigenous peoples.
The Calvert South Africa Fund will invest in companies that are expected to
achieve sustainable growth and profitability. The Fund will invest approximately
75% of its total assets in publicly traded stocks of South African companies.
The Fund may invest up to 25% of its assets in sovereign debt issued by the
government of South Africa. The Fund is also permitted to invest up to 20% of
its assets in high quality money market instruments of U.S. and South African
issuers. If adverse market or economic conditions occur, the Fund temporarily
may invest up to 100% of its assets in U.S. money market instruments.
The Calvert South Africa Fund's strategy for selecting growth stocks begins with
a company-by-company approach emphasizing fundamental stock analysis. This
encompasses industry and competitor analysis, regular management visits,
financial statement and ratio analysis and international comparative
evaluations. The Fund seeks to reduce portfolio risk by research rather than by
diversification.
For a discussion of how the Calvert South Africa Fund's investment objective and
principal investment strategies differ from those of the Calvert New Africa
Fund, see "Comparison of Investment Policies."
Socially Responsible Investment Criteria. Investments are selected on the basis
of their ability to contribute to the dual objectives of financial soundness and
social criteria. The Fund has developed social investment criteria, detailed
below. These criteria represent standards of behavior which few, if any,
organizations totally satisfy. As a matter of practice, evaluation of a
particular organization in the context of these criteria will involve subjective
judgment by the Advisor and Subadvisors. All social criteria may be changed by
the Board of Directors without shareholder approval.
The following criteria, created by the Labour Research Group in South Africa,
will be used to screen the Fund. All the criteria are equally weighted. Any
company that scores below 50% on the scorecard is rejected. Companies that earn
more than 60% are approved while those that earn above 70% will be highlighted
for special praise. Companies whose primary business is tobacco, gambling,
weapons or predatory lending will be excluded from the portfolio.
Create jobs through innovation and expansion plans. The Fund will ask senior
management probing questions about their plans and strategies and assess their
ability to innovate and invest for job creating.
Training of workers to enhance skills. All workers must be skilled and to
achieve this company training programs and grading systems must be transformed
to provide clear career paths for all employees.
Economic and social empowerment. The Fund will seek companies where there is
evidence of high levels of worker empowerment.
Equity through affirmative action. Programs within the company should focus on
the advancement of women, black employees and the disabled.
Good conditions of employment. Special focus will be given to the company's
minimum wage.
Sound environment practices must be promoted. The Fund will pay close attention
to companies to ensure they put in place practices which will protect the
environment.
High health and safety standards must be applied. The Fund will rely on the
reports of employees and want to see active involvement of trade unions.
Demonstrate open and effective corporate governance. The Fund wants full
disclosure of director's pay and more effective communication with all
stakeholders.
Respect indigenous peoples rights. The Fund will not invest in companies that
are significantly engaged in a pattern and practice of violating the rights of
indigenous people.
Principal Risks. The Calvert South Africa Fund is designed for aggressive,
long-term investors who are willing to accept above-average risk in order to
seek a higher rate of return over time. Investments in African and
African-related issuers involve risk factors and special considerations not
normally associated with investments in United States issuers.
You could lose money on your investment in the Fund, or the Fund could
underperform for any of the following reasons:
1. Stocks are subject to market, economic and business risks that cause their
prices to fluctuate.
2. Investing in South African securities involves additional risks not
associated with investments in U.S. securities.
- - The Fund is subject to foreign currency risk, which is the risk that the U.S.
dollar value of its investments may decline due to changes in foreign currency
exchange rates or the imposition of exchange control regulations
- - South Africa is a developing country and its economy is less diversified and
mature than the economies of developed countries. There is a risk of economic or
political instability in South Africa.
- - There is less liquidity and higher volatility in the South African securities
markets than in the U.S. and less government supervision and regulation of
exchanges, brokers and issuers in South Africa.
- - South African companies are not subject to the same accounting, auditing and
financial reporting standards as U.S. public companies, and there may be less
publicly available information about South African companies than comparable
U.S. companies.
- - Government actions may be taken which could negatively affect the Fund.
3. The Fund's investments in South African sovereign debt obligations are
subject to interest rate risk and credit risk. Interest rate risk is the risk of
market losses caused by changes in interest rates. Generally, when interest
rates rise, the market prices of debt obligations go down. Credit risk is the
risk that the borrower may default or otherwise become unable to honor its
financial obligations.
4. The Fund is non-diversified. Compared to other funds, the Fund may invest
more of its assets in a smaller number of companies. Gains or losses on a single
stock may have greater impact on the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency
For a discussion of the Calvert South Africa Fund's fees and expenses, see
"Expense Comparisons."
Distribution and Service Fees. The Calvert South Africa Fund has adopted a plan
under Rule 12b-1 of the 1940 Act that allows the Calvert South Africa Fund to
pay distribution fees for the sale and distribution of its shares. The
distribution plan also pays service fees to persons (such as your financial
professional) for services provided to shareholders. Because these fees are paid
out of a Fund's assets on an ongoing basis, over time, these fees will increase
the cost of your investment and may cost you more than paying other types of
sales charges.
Investment Practices and Risks
Equity Investments. The Fund normally invests at least 75% of its total assets
in growth stocks of New South Africa Companies. While the Fund invests mainly in
common stocks, the Fund also may invest in other types of equity securities such
as preferred stocks, debt securities which are convertible into or exchangeable
for common stock, and warrants or rights that are convertible into common stock.
The Fund's portfolio securities generally will be traded on the Johannesburg
Stock Exchange, but also may be listed in established over-the-counter markets
in South Africa. The Fund is permitted to invest up to 15% of its net assets in
illiquid securities, including restricted securities and publicly traded stocks
with limited marketability.
Fixed Income Investments. The Fund may invest up to 25% of its total assets,
from time to time, in sovereign debt obligations issued by the government of
South Africa. The sovereign debt obligations in which the Fund invests will be
investment grade.
Money Market Investments. The Fund is permitted to invest up to 20% of its total
assets as reserves to facilitate the Fund's cash flow needs (e.g., redemptions,
expenses, and purchases of portfolio securities). The Fund's reserves will be
invested in investment grade money market instruments of U.S. and South African
issuers.
Defensive Investments. Under adverse investment conditions, the Fund temporarily
may invest up to 100% of its total assets in high quality, short term U.S. money
market instruments. When following such a defensive strategy, the Fund will be
less likely to achieve its investment objective.
The Fund's benchmark is the Johannesburg Stock Exchange All Shares Index
("JSE"). The Fund will not own all, or even most, of the stocks included in the
JSE, and the Fund will invest in additional companies not included in the JSE.
Based upon a market capitalization weighting, the JSE represents more than 10%
of most emerging market equity indices.
Market Risk. The prices of the securities owned by the Fund will fluctuate in
value. These fluctuations can occur because of general market and economic
conditions, perceptions regarding the industry of the issuer company or the
issuer company's particular circumstances. Changes in the value of the Fund's
portfolio securities will result in changes in the Fund's share price.
Consequently, when you sell Fund shares, they may be worth less than what you
paid for them. The Fund will own stocks of small companies which are often
subject to wider and more abrupt fluctuations in market price than larger, more
established companies. The reason for this volatility is that these stocks
typically are traded in lower volume, and their issuers typically are more
sensitive to changing economic conditions and subject to greater changes in
earnings and business prospects.
Foreign Risk. Foreign securities markets generally are not as developed or
efficient as those in the United States. Securities of foreign issuers often are
less liquid and more volatile than securities of comparable U.S. issuers.
Because the Fund invests primarily in South Africa, it will be subject to
foreign investment risks which include possible political and economic
instability, seizure or nationalization of foreign holdings or the adoption of
governmental restrictions that adversely affect or restrict the payment of
principal and interest on securities to investors located outside of South
Africa. South Africa is a developing country, and its economy is less
diversified and mature, and its political system is less stable, than those of
developed countries. The markets of developing countries such as South Africa
generally will be more volatile than the markets of more mature economies;
however, such markets may provide higher rates of return to investors.
Furthermore, there may be less publicly available information about South
African companies than about U.S. companies, and South African compa
nies are not subject to accounting, auditing and financial reporting standards
and requirements comparable to those to which U.S. companies are subject.
Brokerage commissions and other transaction costs on South African securities
exchanges may be higher than in the U.S. Additionally, there is less government
supervision and regulation of exchanges, brokers and issuers in South Africa
than there is in the U.S.
Foreign Currency Risk. The value of the Fund's assets, as measured in U.S.
dollars, will fluctuate with changes in currency rates. Currency exchange rates
may fluctuate significantly over a short period of time.They generally are
determined by the forces of supply and demand in the foreign exchange markets
and the relative merits of investments in different countries, actual or
perceived changes in interest rates and other complex factors. Currency exchange
rates also can be affected by intervention by U.S. or foreign governments or
central banks, or the failure to intervene, or by currency controls or political
developments in the United States or abroad.
Fixed Income Security Risk. The market value of fixed income securities, such as
South African government debt obligations, will change in response to interest
rate changes and other factors. During periods of falling interest rates, the
value of outstanding fixed income securities generally rises. During periods of
rising interest rates, the value of such securities generally declines. While
securities with longer maturities tend to produce higher yields, the prices of
longer maturity securities are also subject to greater market fluctuations as a
result of changes in interest rates. Changes by recognized agencies in the
credit rating of any fixed income security and in the ability of an issuer to
make payments of interest and principal also affect the value of these
investments. Changes in the value of the Fund's debt securities will affect the
net asset value of the Fund's shares.
Hedging Risk. Although not a principal investment strategy, the Fund is
permitted to invest in derivatives which are financial instruments that derive
their performance, at least in part, from the performance of an underlying
asset, index, currency or interest rate. The derivatives the Fund may use
include options and futures. While derivatives can be used effectively to
further the Fund's investment objective, under certain market conditions, they
can increase the volatility of the Fund's net asset value, decrease the
liquidity of the Fund's portfolio or make the accurate pricing of the Fund's
portfolio more difficult. The primary risks associated with the Fund's use of
futures and options are (1) the failure to predict accurately the direction of
stock prices, interest rates, currency movements and other economic factors; (2)
the failure as hedging techniques in cases where the price movements of the
securities underlying the options and futures do not follow the price movements
of the portfolio securities subject to the hedge; (3) the potentially unlimited
loss from investing in futures contracts; and (4) the likelihood of the Fund
being unable to control losses by closing its
position where a liquid secondary market does not exist. The risk that the Fund
will be unable to close out a futures position or options contract will be
minimized by the Fund only entering into futures contracts or options
transactions on national exchanges and for which there appears to be a liquid
secondary market.
Investment Practices and Risks. The most concise description of the Fund's risk
profile is under the risk-return summary. The Fund is also permitted to invest
in certain other investments and to use certain investment techniques that have
higher risks associated with them. On the following pages are brief
descriptions of these other principal investments and techniques, along with
their risks.
Active Trading Strategy/Turnover involves selling a security soon after
purchase. An active trading strategy causes a fund to have higher portfolio
turnover compared to other funds and higher transaction costs, such as
commissions and custodian and settlement fees, and may increase your tax
liability. Risks: Opportunity, Market and Transaction.
Temporary Defensive Positions. During adverse market, economic or political
conditions, the Fund may depart from its principal investment strategies by
increasing its investment in short-term interest-bearing securities. During
times of any temporary defensive positions, the Fund may not be able to achieve
its investment objective. Risks: Opportunity.
Conventional Securities
Foreign Securities. Securities issued by companies located outside the U.S.
and/or traded primarily on a foreign exchange. Risks: Market, Currency,
Transaction, Liquidity, Information and Political.
Small Cap Stocks. Investing in small companies involves greater risk than with
more established companies. Small cap stock prices are more volatile and the
companies often have limited product lines, markets, financial resources, and
management experience. Risks: Market, Liquidity and Information.
Emerging Market. Securities issued by companies located in those countries
whose economics and capital markets are not as developed as those of more
industrialized nations. Risks: Market, Currency, Transaction, Liquidity,
Information, and Political.
Investment grade bonds. Bonds rated BBB/Baa or higher or comparable unrated
bonds. Risks: Interest Rate, Market and Credit.
Below-investment grade bonds. Bonds rated below BBB/Baa or comparable unrated
bonds are considered junk bonds. They are subject to greater credit risk than
investment grade bonds. The Fund does not expect to own more than 20% of such
securities. Risks: Credit, Market, Interest Rate, Liquidity and Information.
Unrated debt securities. Bonds that have not been rated by a recognized rating
agency; the Advisor has determined the credit quality based on its own research.
Risks: Credit, Market, Interest Rate, Liquidity and Information.
Illiquid securities. Securities which cannot be readily sold because there is
no active market. The Fund does not expect to own more than 15% of such
securities. Risks: Liquidity, Market and Transaction.
Leveraged Derivative Instruments
Currency contracts. Contracts involving the right or obligation to buy or sell
a given amount of foreign currency at a specified price and future date. Risks:
Currency, Leverage, Correlation, Liquidity and Opportunity.
Options on securities and indices. Contracts giving the holder the right but
not the obligation to purchase or sell a security (or the cash value, in the
case of an option on an index) at a specified price within a specified time. In
the case of selling (writing) options, the Fund will write call options only if
they already own the security (if it is "covered"). The Fund does not expect to
own more than 5% (based on net premium payments) of such securities. Risks:
Interest Rate, Currency, Market, Leverage, Correlation, Liquidity, Credit and
Opportunity.
Futures contract. Agreement to buy or sell a specific amount of a commodity or
financial instrument at a particular price on a specific future date. The Fund
does not expect to own more than 5% of such securities. Risks: Interest Rate,
Currency, Market, Leverage, Correlation, Liquidity and Opportunity.
Types of Investment Risk
Correlation risk. This occurs when a Fund "hedges" - uses one investment to
offset the Fund's position in another. If the two investments do not behave in
relation to one another the way Fund managers expect them to, then unexpected or
undesired results may occur. For example, a hedge may eliminate or reduce gains
as well as offset losses.
Credit risk. The risk that the issuer of a security or the counterparty to an
investment contract may default or become unable to pay its obligations when
due.
Currency risk. Currency risk occurs when a Fund buys, sells or holds a security
denominated in foreign currency. Foreign currencies "float" in value against
the U.S. dollar. Adverse changes in foreign currency values can cause
investment losses when a Fund's investments are converted to U.S. dollars.
Information risk. The risk that information about a security or issuer or the
market might not be available, complete, accurate or comparable.
Interest rate risk. The risk that changes in interest rates will adversely
affect the value of an investor's securities. When interest rates rise, the
value of fixed-income securities will generally fall. Conversely, a drop in
interest rates will generally cause an increase in the value of fixed-income
securities. Longer-term securities and zero coupon/"stripped" coupon securities
("strips") are subject to greater interest rate risk.
Leverage risk. The risk that occurs in some securities or techniques which tend
to magnify the effect of small changes in an index or a market. This can result
in a loss that exceeds the amount actually invested.
Liquidity risk. The risk that occurs when investments cannot be readily sold.
A Fund may have to accept a less-than-desirable price to complete the sale of an
illiquid security or may not be able to sell it at all.
Market risk. The risk securities prices in a market, a sector or an industry
will fluctuate, and that such movements might reduce an investment's value.
Opportunity risk. The risk of missing out on an investment opportunity because
the assets needed to take advantage of it are committed to less advantageous
investments or strategies.
Political risk. The risk that may occur with foreign investments, and means
that the value of an investment may be adversely affected by nationalization,
taxation, war, government instability or other economic or political actions or
factors.
Transaction risk. The risk that a Fund may be delayed or unable to settle a
transaction or that commissions and settlement expenses may be higher than
usual.
Management
Calvert Asset Management Company, Inc., 4550 Montgomery Avenue, Suite 1000N,
Bethesda, MD 20814, is the Fund's investment advisor. Calvert provides the Fund
with investment supervision and management and office space; furnishes executive
and other personnel to the Funs, and pays the salaries and fees of all Directors
who are affiliated persons of Calvert. It has been managing mutual funds since
1976. It is the investment advisor for over 25 mutual fund portfolios. As of
December 31, 2000, Calvert had over $6.5 billion in assets under management.
RISA Investment Advisers, LLC, 225 South 15th Street, Suite 930, Philadelphia,
Pennsylvania, was formed in 1997 by Sam Folin. Mr. Folin has twenty-three years
of experience in the investment industry and extensive experience advising
non-profit organizations on governance, fund raising, planning and financial
management.
African Harvest Asset Managers (Proprietary) Limited, African Harvest House,
Boundary Terraces, 1 Mariendahl Lane, Newlands, South Africa, was formed in 1997
and provides investment management services to South African clients including
union retirement funds. African Harvest Asset Managers (Proprietary) Limited
employs 21 investment professionals within various teams. The company has
multi-racial ownership, management and staff. The firm has $1 billion under
management and has established a record of investment excellence in South
African capital markets.
Denzil Newman, Chief Investment Officer, of African Harvest will lead a team
responsible for the day-to-day management of the Fund's investments. Mr. Newman
has been an analyst and fund manager for over twenty years and previously
managed the Community Growth Fund and other large unit trusts and pension funds
at Syfrets Managed Assets in Cape Town.
Advisory Fees. Calvert South Africa Fund's advisory agreement provides for the
Fund to pay the Advisor a fee of 1.05% of the Fund's average daily net assets.
In addition, the Fund's two subadvisory agreements provide for the Advisor to
pay the Subadvisors each a fee of 0.40% of the Fund's average daily net assets.
SHAREHOLDER INFORMATION
How Shares Are Priced. The price of shares is based on each Fund's net asset
value ("NAV"). NAV is computed by adding the value of each Fund's holdings plus
other assets, subtracting liabilities, and then dividing the result by the
number of shares outstanding. The NAV of each class will be different, depending
on the number of shares outstanding for each class.
Portfolio securities and other assets are valued based on market quotations,
except that securities maturing within 60 days are valued at amortized cost. If
market quotations are not readily available, securities are valued by a method
that a Fund's Board of Directors believes accurately reflects fair value.
The NAV is calculated as of the close of each business day, which coincides with
the closing of the regular session of the New York Stock Exchange ("NYSE")
(normally 4 p.m. ET). Each Fund is open for business each day the NYSE is open.
Please note that there are some federal holidays, however, such as Columbus Day
and Veterans' Day, when the NYSE is open and each Fund is open but purchases
cannot be received because the banks and post offices are closed.
Each Fund may hold securities that are primarily listed on foreign exchanges
that trade on days when the NYSE is closed. The Funds do not price shares on
days when the NYSE is closed, even if foreign markets may be open. As a result,
the value of the Funds' shares may change on days when you will not be able to
buy or sell your shares.
When Your Account Will Be Credited. A purchase will be processed at the NAV next
calculated after your order is received by the transfer agent in Kansas City,
Missouri. All purchases must be made in U.S. dollars and indicate the Fund and
Class. No cash or third party checks will be accepted. No credit card or credit
loan checks will be accepted. The Calvert South Africa Fund reserves the right
to suspend the offering of shares for a period of time or to reject any specific
purchase order. As a convenience, check purchases received at Calvert's office
in Bethesda, Maryland will be sent by overnight delivery to the Transfer Agent
and will be credited the next business day upon receipt by the Transfer Agent.
You should note that the share price may change during this period. Any check
purchase received without an investment slip may cause delayed crediting. Any
purchase less than the $250 minimum for subsequent investments will be charged a
fee of $5 payable to the Fund. If your check does not clear your bank, your
purchase will be canceled and you will be charged a $25 fee plus any costs
incurred. All purchases will be confirmed and credited to your account in full
and fractional shares (rounded to the nearest 1/1000th of a share).
Dividends, Capital Gains and Taxes. Each Fund pays dividends from its respective
net investment income annually. Net investment income consists of interest
income, net short-term capital gains, if any, and dividends declared and paid on
investments, less expenses. Distributions of net short-term capital gains
(treated as dividends for tax purposes) and net long-term capital gains, if any,
are normally paid once a year; however, neither Fund anticipates making any such
distributions unless available capital loss carryovers have been used or have
expired.
Federal Taxes. In January, each Fund will mail the Form 1099-DIV indicating the
federal tax status of dividends and any capital gain distributions paid during
the past year. Generally, dividends and distributions are taxable in the year
they are paid. However, any dividends and distributions paid in January but
declared during the prior three months are taxable in the year declared.
Dividends and distributions are taxable to shareholders regardless of whether
they are taken in cash or reinvested. Dividends, including short-term capital
gains, are taxable as ordinary income. Distributions from long-term capital
gains are taxable as long-term capital gains, regardless of how long you have
owned shares.
Shareholders may realize a capital gain or loss when they sell or exchange
shares. This capital gain or loss will be short- or long-term, depending on how
long the shareholder has owned the shares which were sold. In January, each Fund
will mail the Form 1099-B indicating the total amount of all sales, including
exchanges.
Other Tax Information. In addition to federal taxes, you may be subject to state
or local taxes on your investment, depending on the laws in your area. You will
be notified to the extent, if any, that dividends reflect interest received from
U.S. government securities. Such dividends may be exempt from certain state
income taxes.
How To Sell Shares. Shareholders may redeem all or a portion of their shares on
any day the Funds are open for business, provided the amount requested is not on
hold. When a purchase is made by check or with Calvert Money Controller
(electronic funds transfer), the purchase may be on hold for up to 10 business
days from the date of receipt. During the hold period, redemption proceeds will
not be sent until the Transfer Agent is reasonably satisfied that the purchase
payment has been collected. Shares will be redeemed at the NAV next calculated
(less any applicable CDSC) after the redemption request is received by the
transfer agent in good order. The proceeds will normally be sent to you on the
next business day, but if making immediate payment could adversely affect your
Fund, it may take up to seven (7) days to make payment. The Calvert South Africa
Fund has the right to redeem shares in assets other than cash for redemption
amounts exceeding, in any 90-day period, $250,000 or 1% of the net asset value
of the affected Fund, whichever is less. When the NYSE is closed (or when
trading is restricted) for any reason other than its customary weekend or
holiday
closings, or under any emergency circumstances as determined by the Securities
and Exchange Commission, redemptions may be suspended or payment dates
postponed. Please note that there are some federal holidays, however, such as
Columbus Day and Veterans' Day, when the NYSE is open and the Fund is open but
redemptions cannot be mailed or wired because the post offices and banks are
closed.
COMPARISON OF INVESTMENT POLICIES
As noted above, the investment objectives of both the Calvert New Africa Fund
and Calvert Social Africa Fund are similar in their focus on investing in
African securities. However, the Calvert South Africa Fund has a narrower scope
of investment, focusing mainly on investing in South African companies, whereas
the Calvert New Africa Fund invests in pan-African companies. Further, the
Calvert South Africa Fund's objective is to seek "maximum total return," whereas
the Calvert New Africa Fund's investment objective is "to achieve capital
appreciation over time" through its investments. However, even though capital
appreciation relates simply to the growth of an asset, whereas total return has
a component of income related to it, in the context of both funds, these terms
can be used interchangeably. The Calvert South Africa Fund will actively employ
social criteria in screening investments.
The investment restrictions of both the Calvert New Africa Fund and the Calvert
South Africa Fund are essentially identical.
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS
The Calvert New Africa Fund is a series of Calvert New World Fund, Inc., a
Maryland Corporation. The Calvert South Africa Fund is a series of Calvert
Impact Fund, Inc., also a Maryland Corporation.
The Calvert New Africa Fund currently offers three classes (Class A, B and C).
However, pursuant to the Reorganization, shareholders in all three classes of
the Calvert New Africa Fund will be converted into Class A Shares of the Calvert
South Africa Fund. The following chart shows the differences between the
classes:
Class A:
Front-End Sales
Charge
Sales charge on each purchase of 4.75% or less, depending on the amount
invested.
Class A shares have an annual 12b-1 fee of up to 0.35%.
Class A shares have lower annual expenses due to a lower 12b-1 fee.
Purchases of Class A shares at NAV for accounts with $1,000,000 or more will be
subject to a 1.0% deferred sales charge for 1 year.
Class B:
Deferred Sales
Charge for 6 years
No sales charge on each purchase, but if these shares are sold shares within 6
years, there will be a deferred sales charge of 5% or less on shares you sell.
Class B shares have an annual 12b-1 fee of 1%.
Class B shares will automatically convert to Class A shares after 8 years,
reducing future annual expenses.
Class C:
Deferred Sales
Charge for 1 year
No sales charge on each purchase, but if these shares are sold within 1 year,
there will be a deferred sales charge of 1% at that time.
Class C shares have an annual 12b-1 fee of 1.00%.
Class C shares have higher annual expenses than Class A and there is no
automatic conversion to Class A.
After a comparison of both Funds' organizational documents (i.e., the Articles
of Incorporation and By-laws), it is not anticipated that there are any
significant differences between the rights of shareholders of the Calvert New
Africa Fund and the Calvert South Africa Fund.
GENERAL INFORMATION ABOUT THE FUNDS
Information about the Calvert New Africa Fund is included in a prospectus, which
all shareholders have received. Further information is included in the Fund's
Statement of Additional Information. Both the Prospectus and Statement of
Additional Information are hereby incorporated by reference and are dated July
31, 2000. You may obtain additional copies by calling or writing the Fund at
the address and phone number appearing below. Quarterly, semi-annual and annual
reports of the Calvert New Africa Fund are also available by writing the Fund at
4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814, or by calling
(800) 368-2745. Both Funds are subject to the informational requirements of the
Securities Exchange Act of 1934, as amended, and the Investment Company Act of
1940, as amended, and in accordance therewith, file proxy material, reports and
other information with the Securities and Exchange Commission. These reports and
other information filed by both Funds can be inspected and copied at the public
reference facilities maintained by the Securities and Exchange Commission in
Washington, D.C. at 450 Fifth Street, N.W. Copies of such materials can be
obtained from the Public Reference Branch, Office of Consumer Affairs and
Information Services, Securities and Exchange Commission, Washington, D.C. 20549
at prescribed rates. In addition, the Securities and Exchange Commission
maintains a Web site (http://www.sec.gov) that contains reports, other
information and proxy statements filed by Calvert on behalf of both Funds.
OTHER BUSINESS
The Board of Directors of the Calvert New World Fund, Inc. does not intend to
present any other business at the meeting. If, however, any other matters are
properly brought before the meeting, the persons named in the accompanying form
of proxy will vote thereon in accordance with their judgment.
VOTING INFORMATION
Proxies from the shareholders of the Calvert New Africa Fund are being solicited
by the Board of Directors for the Special Meeting of Shareholders to be held in
the Tenth Floor Conference Room of Calvert Group Ltd., Air Rights North Tower,
4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland at 9:00 a.m. on
Thursday, March 29, 2001 or at such later time or date made necessary by
adjournment.
Proxies are solicited by mail. Additional solicitations may be made by
telephone, computer communications, facsimile or other such means, or by
personal contact by officers or employees of Calvert and its affiliates or by
proxy soliciting firms retained for this purpose. The Calvert New Africa Fund
will bear solicitation costs, which are expected to be approximately $4,000.
A proxy may be revoked at any time before the meeting or during the meeting by
oral or written notice to William M. Tartikoff, Esq., 4550 Montgomery Avenue,
Suite 1000N, Bethesda, Maryland 20814. Unless revoked, all valid proxies will be
voted in accordance with the specification thereon or, in the absence of
specification, for approval of the Plan.
The Plan must be approved by a majority of the outstanding shares, which is
defined as the lesser of: (1) the vote of 67% or more of the shares of the Fund
at the Special Meeting if the holders of more than 50% of the outstanding shares
of the Fund are present in person or by proxy, or (2) the vote of more than 50%
of the outstanding shares of the Fund.
Abstentions and broker non-votes will be counted as shares present for purposes
of determining whether a quorum is present but will not be voted for or against
any adjournment or proposal. A broker non-vote is when a broker holds the shares
and the actual owner does not vote and the broker holding the shares does not
have the authority to vote the shares. Accordingly, abstentions and broker
non-votes effectively will be a vote against adjournment or against any proposal
where the required vote is a percentage of the shares present.
Shareholders of the Calvert New Africa Fund of record at the close of business
on February 7, 2001 ("record date") are entitled to notice of and to vote at the
Special Meeting or any adjournment thereof. Shareholders are entitled to one
vote for each share held. As of February 7, 2001, as shown on the books of the
Calvert New Africa Fund, there were issued and outstanding 744,836.401 of Class
A Shares, 29,972,828 of Class B Shares and 4,893.522 of Class C Shares. The
votes of the shareholders of the Calvert South Africa Fund are not being
solicited since neither their approval nor their consent is necessary for this
transaction.
As of December 31, 2000, the officers and directors of the Calvert New Africa
Fund as a group beneficially owned less than 1% of the outstanding shares of the
Fund.
As of December 31, 2000, the following shareholders owned of record 5% or more
of the shares of the Calvert New Africa Fund:
Name and Address % of Ownership
The Public School Retirement System 56.67% of Class A
of the City of St. Louis
St. Louis, MO
Beverly J. Entwisle 19.98% of Class B
98 Baptist Rd.
Canterbury, NH 03224
Name and Address % of Ownership
Sylvis V. Obradovic 5.61% of Class B
PO Box 2500
Maryland Hts, MO 63043
David R. Klein 11.97% of Class B
1662 Taroka Dr.
Fairbanks, AK 99709
Virginia E. Touhey 11.82% of Class B
3 Azalea Ct.
Clifton Park, NY 12065
Robin Klay 11.11% of Class C
296 W. 18th Street
Holland, MI 49423
Richard B. Lindley 36.56% of Class C
303 Daisy Ln.
Dripping Spgs, TX 78620
Kimberly D. Lomis MD 6.26% of Class C
4230 Harding Rd Ste 302
Nashville, TN 37205
Beverly Cuddy 7.47% of Class C
1731 18th St.
Niceville, FL 32578
UNCG Wesley Foundation 18.06% of Class C
PO Box 26170
Greensboro, NC 27402
ADJOURNMENT
In the event that sufficient votes in favor of the proposals set forth in the
Notice of Meeting and Proxy Statement are not received by the time scheduled for
the meeting, the persons named as proxies may move one or more adjournments of
the meeting to permit further solicitation of proxies with respect to any such
proposals. Any such adjournment will require the affirmative vote of a majority
of the shares present at the meeting. The persons named as proxies will vote in
favor of such adjournment those shares that they are entitled to vote which have
voted in favor of such proposals. They will vote against any such adjournment
those proxies that have voted against any such proposals.
By Order of the Board of Directors
William M. Tartikoff, Esq.
Secretary
The Board of Directors of Calvert New World Fund, Inc., including the
Independent Directors, recommend a Vote FOR Approval of the Plan.
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION, dated as of December 7, 2000, is
between the Calvert New Africa Fund, a series of Calvert New World Fund, Inc.
and the Calvert South Africa Fund, a series of Calvert Impact Fund, Inc.
In consideration of the mutual promises contained in this Agreement, the parties
agree as follows:
1. SHAREHOLDER APPROVAL
Approval by Shareholders. A meeting of the shareholders of the Calvert New
Africa Fund shall be called and held for the purpose of acting on and
authorizing the transactions contemplated in this Agreement and Plan of
Reorganization (the "Agreement" or "Plan"). The Calvert South Africa Fund shall
furnish to the Calvert New Africa Fund such data and information as shall be
reasonably requested by the Calvert New Africa Fund for inclusion in the
information to be furnished to its shareholders in connection with the meeting.
2. REORGANIZATION
(a) Plan of Reorganization. The Calvert New Africa Fund will convey,
transfer, and deliver to the Calvert South Africa Fund all of the then-existing
assets of the Calvert New Africa Fund at the closing provided for in Section
2(b) of this Agreement (the "Closing"). In consideration thereof, the Calvert
South Africa Fund agrees at the Closing:
(i) to deliver to the Calvert New Africa Fund in exchange for the assets the
number of full and fractional shares of common stock of the Calvert South Africa
Fund ("Calvert South Africa Fund Shares") to be determined as follows:
In accordance with Section 3 of this Agreement, the number of shares
shall be determined by dividing the per share net asset value of the Calvert New
Africa Fund Shares (rounded to the nearest million) by the net asset value per
share of the Calvert South Africa Fund (rounded to the nearest million) and
multiplying the quotient by the number of outstanding shares of the Calvert New
Africa Fund as of the close of business on the closing date. It is expressly
agreed that there will be no sales charge to the Calvert New Africa Fund, or to
any of the shareholders of the Calvert New Africa Fund upon distribution of
Calvert South
Africa Fund Shares to them; and
(ii) not to assume any of the Calvert New Africa Fund's obligations and
liabilities, whether absolute, accrued, contingent, or otherwise.
(b) Closing and Effective Time of the Reorganization. The Closing shall
occur at the Effective Time of the Reorganization, which shall be either:
(i) the later of receipt of all necessary regulatory approvals and the
final adjournment of the meeting of shareholders of the Calvert New Africa Fund
at which the Plan will be considered, or
(ii) such later date as the parties may mutually agree.
3. VALUATION OF NET ASSETS
(a) The value of the Calvert New Africa Fund's net assets to be transferred
to the Calvert South Africa Fund under this Agreement shall be computed as of
the close of business on the business day immediately preceding the Closing Date
(hereinafter the "Valuation Date") using the valuation procedures as set forth
in the Calvert South Africa Fund's prospectus.
(b) The net asset value per share of Calvert South Africa Fund Shares for
purposes of Section 2 of this Agreement shall be determined as of the close of
business on the Valuation Date by the Calvert South Africa Fund's Controller
using the same valuation procedures as set forth in the Calvert South Africa
Fund's prospectus.
(c) A copy of the computation showing in reasonable detail the valuation of the
Calvert New Africa Fund's net assets to be transferred to the Calvert South
Africa Fund pursuant to Section 2 of this Agreement, certified by the Controller
of the Calvert New Africa Fund, shall be furnished by the Calvert New Africa
Fund to the Calvert South Africa Fund at the Closing. A copy of the computation
showing in reasonable detail the determination of the net asset value per share
of Calvert South Africa Fund Shares pursuant to Section 2 of this Agreement,
certified by the Controller of the Calvert South Africa Fund, shall be furnished
by the Calvert South Africa Fund to the Calvert New Africa Fund at the Closing.
4. LIQUIDATION AND DISSOLUTION
(a) As soon as practicable after the Closing Date, the Calvert New Africa
Fund will distribute pro rata to the Calvert New Africa Fund shareholders of
record as of the close of business on the Closing Date the shares of the Calvert
South Africa Fund received by the Calvert New Africa Fund pursuant to this
Section. Such liquidation and distribution will be accompanied by the
establishment of shareholder accounts on the share records of the Calvert South
Africa Fund in the names of each such shareholder of the Calvert New Africa
Fund, representing the respective pro rata number of full shares and fractional
interests in shares of the Calvert South Africa Fund due to each. No such
shareholder accounts shall be established by the Calvert South Africa Fund or
its transfer agent for the Calvert South Africa Fund except pursuant to written
instructions from the Calvert New Africa Fund, and the Calvert New Africa Fund
agrees to provide on the Closing Date instructions to transfer to a shareholder
account for each former Calvert New Africa Fund shareholder a pro rata share of
the number of shares of the Calvert South Africa Fund received pursuant to
Section 2(a) of this Agreement.
(b) Promptly after the distribution described in Section 4(a) above, appropriate
notification will be mailed by the Calvert South Africa Fund or its transfer
agent to each shareholder of the Calvert New Africa Fund receiving such
distribution of shares of the Calvert South Africa Fund informing such
shareholder of the number of such shares distributed to such shareholder and
confirming the registration thereof in such shareholder's name.
(c) Share certificates representing holdings of shares of the Calvert South
Africa Fund shall not be issued unless requested by the shareholder and, if such
a request is made, share certificates of the Calvert South Africa Fund will be
issued only for full shares of the Calvert South Africa Fund and any fractional
interests in shares shall be credited in the shareholder's account with the
Calvert South Africa Fund.
(d) As promptly as is practicable after the liquidation of the Calvert New
Africa Fund, and in no event later than 12 months from the date of this
Agreement, the Calvert New Africa Fund shall be terminated pursuant to the
provisions of the Plan and its By-laws and Articles of Incorporation.
(e) Immediately after the Closing Date, the share transfer books of the
Calvert New Africa Fund shall be closed and no transfer of shares shall
thereafter be made on those books.
5. ARTICLES AND BY-LAWS
(a) Articles of Incorporation. The Articles of Incorporation of Calvert Impact
Fund, Inc., which govern its series, Calvert South Africa Fund, as in effect
immediately prior to the Effective Time of the Reorganization shall continue to
be the Articles of Incorporation until amended as provided by law.
(b) By-laws. The By-laws of Calvert Impact Fund, Inc., which govern its
series, Calvert South Africa Fund, in effect at the Effective Time of the
Reorganization shall continue to be the By-laws until the same shall thereafter
be altered, amended, or repealed in accordance with said By-laws.
6. REPRESENTATIONS AND WARRANTIES OF CALVERT SOUTH AFRICA FUND
(a) Organization, Existence, Etc. Calvert South Africa Fund is a duly organized
series of Calvert Impact Fund, Inc., validly existing and in good standing under
the laws of the State of Maryland, and has the power to carry on its business as
it is now being conducted. Currently, the Calvert South Africa Fund is not
qualified to do business as a foreign corporation under the laws of any
jurisdiction. The Calvert South Africa Fund has all necessary federal, state and
local authorization to own all of its properties and assets and to carry on its
business as now being conducted.
(b) Registration as Investment Company. Calvert Impact Fund, Inc., of which the
Calvert South Africa Fund is a series, is registered under the Investment
Company Act of 1940 (the "Act") as an open-end diversified management investment
company. Its registration has not been revoked or rescinded and is in full force
and effect.
(c) Capitalization. The Calvert South Africa Fund has an unlimited number of
shares of beneficial interest, no par value, of which as of December 31, 2000,
250,000,000 shares were outstanding, and no shares were held in the treasury of
the Calvert South Africa Fund. All of the outstanding shares of the Calvert
South Africa Fund have been duly authorized and are validly issued, fully paid,
and non-assessable. Since the Calvert South Africa Fund is a series of an
open-end investment company engaged in the continuous offering and redemption of
its shares, the number of outstanding shares may change prior to the Effective
Time of the Reorganization.
(d) Shares to be Issued Upon Reorganization. Calvert South Africa Fund Shares to
be issued in connection with the Reorganization have been duly authorized and
upon consummation of the Reorganization will be validly issued, fully paid and
non-assessable.
(e) Authority Relative to this Agreement. Calvert Impact Fund, Inc. has the
power to enter into the Plan on behalf of its series, the Calvert South Africa
Fund, and to carry out its obligations under this Agreement. The execution and
delivery of the Plan and the consummation of the transactions contemplated have
been duly authorized by the Board of Directors of Calvert Impact Fund, Inc. and
no other proceedings by Calvert Impact Fund, Inc. are necessary to authorize its
officers to effectuate the Plan and the transactions contemplated. The Calvert
South Africa Fund is not a party to or obligated under any charter, by-law,
indenture, or contract provision or any other commitment or obligation, or
subject to any order or decree which would be violated by its executing and
carrying out the Plan.
(f) Liabilities. There are no liabilities of Calvert Impact Fund, Inc. on
behalf of its series, Calvert South Africa Fund, whether or not determined or
determinable, other than liabilities disclosed or provided for in the Calvert
South Africa Fund Financial Statements and liabilities incurred in the ordinary
course of business subsequent to December 31, 2000, or otherwise previously
disclosed to the Calvert New Africa Fund, none of which has been materially
adverse to the business, assets or results of operations of the Calvert South
Africa Fund.
(g) Litigation. To the knowledge of the Calvert South Africa Fund there are
no claims, actions, suits, or proceedings, pending or threatened, which would
adversely affect the Calvert South Africa Fund or its assets or business, or
which would prevent or hinder consummation of the transactions contemplated by
this Agreement.
(h) Contracts. Except for contracts and agreements previously disclosed to
the Calvert New Africa Fund under which no default exists, the Calvert South
Africa Fund is not a party to or subject to any material contract, debt
instrument, plan, lease, franchise, license, or permit of any kind or nature
whatsoever.
(i) Registration Statement. The Calvert South Africa Fund shall have filed
with the Securities and Exchange Commission (the "Commission") a Registration
Statement under the Securities Act of 1933 ("Securities Act") relating to the
shares of capital stock of the Calvert South Africa Fund issuable under this
Agreement. At the time the Registration Statement becomes effective, the
Registration Statement:
(i) will comply in all material respects with the provisions of the
Securities Act and the rules and regulations of the Commission thereunder (the
"Regulations"), and
(ii) will not contain an untrue statement of material fact or omit to state
a material act required to be stated therein or necessary to make the statements
therein not misleading.
Further, at the time the Registration Statement becomes effective, at
the time of the shareholders' meeting referred to in Section 1, and at the
Effective Time of the Reorganization, the Prospectus and Statement of Additional
Information included therein, as amended or supplemented by any amendments or
supplements filed by the Calvert South Africa Fund, will not contain an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that none of the representations and
warranties in this subsection shall apply to statements in or omissions from the
Registration Statement or Prospectus and Statement of Additional Information
made in reliance upon and in conformity with information furnished by the
Calvert New Africa Fund for use in the Registration Statement or Prospectus and
Statement of Additional Information as provided in Section 7(k).
7. REPRESENTATIONS AND WARRANTIES OF CALVERT NEW AFRICA FUND
(a) Organization, Existence, etc. The Calvert New Africa Fund is a duly
organized series of the Calvert New World Fund, Inc., validly existing and in
good standing under the laws of the State of Maryland, and has power to carry on
its business as it is now being conducted. Currently, the Calvert New Africa
Fund is not qualified to do business as a foreign corporation under the laws of
any jurisdiction. The Calvert New Africa Fund has all necessary federal, state
and local authorization to own all of its properties and assets and to carry on
its business as now being conducted.
(b) Registration as Investment Company. The Calvert New World Fund, Inc., of
which the Calvert New Africa Fund is a series, is registered under the Act as an
open-end diversified management investment company. Its registration has not
been revoked or rescinded and is in full force and effect.
(c) Capitalization. The Calvert New Africa Fund has an unlimited number of
shares of beneficial interest, no par value, of which as of March 31, 2000,
250,000,000 shares were outstanding, and no shares were held in the treasury of
the Calvert New Africa Fund. All of the outstanding shares of the Calvert New
Africa Fund have been duly authorized and are validly issued, fully paid, and
non-assessable. Since the Calvert New Africa Fund is a series of an open-end
investment company engaged in the continuous offering and redemption of its
shares, the number of outstanding shares of the
Calvert New Africa Fund may change prior to the Effective Date of the
Reorganization.
(d) Financial Statements. The financial statements of the Calvert New Africa
Fund for the year ended March 31, 2000, ("the Calvert New Africa Fund Financial
Statements"), previously delivered to the Calvert South Africa Fund, fairly
present the financial position of the Calvert New Africa Fund as of March 31,
2000, and the results of its operations and changes in its net assets for the
year then ended.
(e) Authority Relative to the Plan. Calvert New World Fund, Inc. has the
power to enter into the Plan on behalf of the Calvert New Africa Fund and to
carry out its obligations under this Agreement. The execution and delivery of
the Plan and the consummation of the transactions contemplated have been duly
authorized by the Directors of the Calvert New World Fund, Inc. and, except for
approval by the holders of its capital stock, no other proceedings by the
Calvert New World Fund, Inc. are necessary to authorize its officers to
effectuate the Plan and the transactions contemplated. The Calvert New Africa
Fund is not a party to or obligated under any charter, by-law, indenture, or
contract provision or any other commitment or obligation, or subject to any
order or decree, which would be violated by its executing and carrying out the
Plan.
(f) Liabilities. There are no liabilities of the Calvert New Africa Fund
whether or not determined or determinable, other than liabilities disclosed or
provided for in the Calvert New Africa Fund Financial Statements and liabilities
incurred in the ordinary course of business subsequent to March 31, 2000, or
otherwise previously disclosed to the Calvert South Africa Fund, none of which
has been materially adverse to the business, assets, or results of operations of
the Calvert New Africa Fund.
(g) Litigation. To the knowledge of the Calvert New Africa Fund there are no
claims, actions, suits, or proceedings, pending or threatened, which would
adversely affect the Calvert New Africa Fund or its assets or business, or which
would prevent or hinder consummation of the transactions contemplated by this
Agreement.
(h) Contracts. Except for contracts and agreements previously disclosed to
the Calvert South Africa Fund under which no default exists, the Calvert New
World Fund, Inc. on behalf of the Calvert New Africa Fund is not a party to or
subject to any material contract, debt instrument, plan, lease, franchise,
license, or permit of any kind or nature whatsoever.
(i) Taxes. The federal income tax returns of the Calvert New Africa Fund
have been filed for all taxable years up to and including the taxable year ended
March 31, 2000, and all taxes payable pursuant to such returns have been paid.
The Calvert New Africa Fund has qualified as a regulated investment company
under the Internal Revenue Code with respect to each past taxable year of the
Calvert New Africa Fund since commencement of its operations.
(j) Portfolio Securities. All securities to be listed in the schedule of
investments of the Calvert New Africa Fund as of the Effective Time of the
Reorganization will be owned by the Calvert New World Fund, Inc. on behalf of
the Calvert New Africa Fund free and clear of any liens, claims, charges,
options, and encumbrances, except as indicated in the schedule. Except as so
indicated, none of the securities is, or after the Reorganization as
contemplated by this Agreement will be, subject to any legal or contractual
restrictions on disposition (including restrictions as to the public offering or
sale of the securities under the Securities Act), and all the securities are or
will be readily marketable.
(k) Registration Statement. The Calvert New Africa Fund will cooperate with
the Calvert South Africa Fund in connection with the Registration Statement
referred to in Section 6(i) of this Agreement, and will furnish to the Calvert
South Africa Fund the information relating to the Calvert New Africa Fund
required by the Securities Act and its Regulations to be set forth in the
Registration Statement (including the Prospectus and Statement of Additional
Information). At the time the Registration Statement becomes effective, the
Registration Statement, insofar as it relates to the Calvert New Africa Fund:
(i) will comply in all material respects with the provisions of the
Securities Act and its regulations, and
(ii) will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
Further, at the time the Registration Statement becomes effective, at the
time of the shareholders' meeting referred to in Section 1 and at the Effective
Time of the Reorganization, the Prospectus and Statement of Additional
Information, as amended or supplemented by any amendments or supplements filed
by the Calvert South Africa Fund, insofar as it relates to the Calvert New
Africa Fund, will not contain an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however,
that the representations and
warranties in this subsection shall apply only to statements in or omissions
from the Registration Statement or Prospectus and Statement of Additional
Information made in reliance upon and in conformity with information furnished
by the Calvert New Africa Fund for use in the Registration Statement or
Prospectus and Statement of Additional Information as provided in this Section
7(k).
8. CONDITIONS TO OBLIGATIONS OF CALVERT SOUTH AFRICA FUND
The obligations of the Calvert South Africa Fund under this Agreement with
respect to the consummation of the Reorganization are subject to the
satisfaction of the following conditions:
(a) Representations, Warranties, and Agreements. As of the Effective Time of
the Reorganization, the Calvert New Africa Fund shall have complied with each of
its obligations under this Agreement, each of the representations and warranties
contained in this Agreement shall be true in all material respects, and there
shall have been no material adverse change in the financial condition, results
of operations, business, properties or assets of the Calvert New Africa Fund
since March 31, 2000. The Calvert South Africa Fund shall have received a
certificate from the Calvert New Africa Fund satisfactory in form and substance
to the Calvert South Africa Fund indicating that it has met the terms stated in
this Section.
(b) Regulatory Approval. All necessary orders of exemption under the Act
with respect to the transactions contemplated by this Agreement shall have been
granted by the Commission, and all approvals, registrations, and exemptions
under state securities laws considered to be necessary shall have been obtained.
(c) Tax Opinion. The Calvert South Africa Fund shall have received the
opinion of counsel, dated the Effective Time of the Reorganization, addressed to
and in form and substance satisfactory to the Calvert South Africa Fund, as to
certain of the federal income tax consequences of the Reorganization under the
Internal Revenue Code to the Calvert New Africa Fund and the shareholders of the
Calvert New Africa Fund. For purposes of rendering its opinion, counsel may rely
exclusively and without independent verification, as to factual matters, on the
statements made in the Plan, the proxy statement which will be distributed to
the shareholders of the Calvert New Africa Fund in connection with the
Reorganization, and on such other written representations as the Calvert New
Africa Fund and the Calvert South Africa Fund, respectively, will have verified
as of the Effective Time of the Reorganization. The opinion of counsel will be
to the effect that, based on
the facts and assumptions stated therein, for federal income tax purposes:
(i) neither the Calvert New Africa Fund nor the Calvert South Africa
Fund will recognize any gain or loss upon the transfer of the assets of the
Calvert New Africa Fund to, and the assumption of its liabilities by, the
Calvert South Africa Fund in exchange for Calvert South Africa Fund Shares and
upon the distribution (whether actual or constructive) of Calvert South Africa
Fund Shares to its shareholders in exchange for their shares of beneficial
interest of the Calvert New Africa Fund;
(ii) the shareholders of the Calvert New Africa Fund who receive Calvert
South Africa Fund Shares pursuant to the Reorganization will not recognize any
gain or loss upon the exchange (whether actual or constructive) of their shares
of capital stock of the Calvert New Africa Fund for Calvert South Africa Fund
Shares (including any fractional share interests they are deemed to have
received) pursuant to the Reorganization;
(iii) the basis of Calvert South Africa Fund Shares received by the Calvert
New Africa Fund's shareholders will be the same as the basis of the shares of
capital stock of the Calvert New Africa Fund surrendered in the exchange; and
(iv) the basis of the Calvert New Africa Fund's assets acquired by the
Calvert South Africa Fund will be the same as the basis of such assets to the
Calvert New Africa Fund immediately prior to the Reorganization.
(d) Opinion of Counsel. The Calvert South Africa Fund shall have received the
opinion of counsel for the Calvert New Africa Fund, dated the Effective Time of
the Reorganization, addressed to and in form and substance satisfactory to the
Calvert South Africa Fund, to the effect that:
(i) the Calvert New World Fund, Inc. is an open-end management company
registered under the Securities Act of 1933 and the Investment Company Act of
1940, and is duly organized and validly existing in good standing under the laws
of the State of Maryland;
(ii) the Calvert New Africa Fund is a series of the Calvert New World Fund,
Inc.; and
(iii) The Agreement and Plan of Reorganization and the execution and filing
of the Plan have been duly authorized and approved by all requisite action by
the Board of Directors of the Calvert New World Fund, Inc., and the Plan has
been duly executed and delivered by the Calvert New World Fund, Inc. and is a
valid and binding obligation of the Calvert New World Fund, Inc. and its series,
Calvert New Africa Fund.
9. CONDITIONS TO OBLIGATIONS OF CALVERT NEW AFRICA FUND
The obligations of the Calvert New Africa Fund under this Agreement with respect
to the consummation of the Reorganization are subject to the satisfaction of the
following conditions:
(a) Shareholder Approval. The Plan shall have been approved by the affirmative
vote of two thirds of all the votes entitled to be cast on the matter; and if
necessary, the requisite vote of the shareholders of the other portfolios of the
Calvert New World Fund, Inc.
(b) Representations, Warranties and, Agreements. As of the Effective Time of
the Reorganization, the Calvert South Africa Fund shall have complied with each
of its responsibilities under this Agreement, each of the representations and
warranties contained in this Agreement shall be true in all material respects,
and there shall have been no material adverse change in the financial condition,
results of operations, business, properties, or assets of the Calvert South
Africa Fund since December 31, 2000. As of the Effective Time of the
Reorganization, the Calvert New Africa Fund shall have received a certificate
from the Calvert South Africa Fund satisfactory in form and substance to the
Calvert New Africa Fund indicating that it has met the terms stated in this
Section.
(c) Regulatory Approval. The Registration Statement referred to in Section
6(i) shall have been declared effective by the Commission and no stop orders
under the Securities Act pertaining thereto shall have been issued; all
necessary orders of exemption under the Act with respect to the transactions
contemplated by this Agreement shall have been granted by the Commission; and
all approvals, registrations, and exemptions under federal and state laws
considered to be necessary shall have been obtained.
(d) Tax Opinion. The Calvert New Africa Fund shall have received the opinion
of counsel, dated the Effective Time of the Reorganization, addressed to and in
form and substance satisfactory to the Calvert New Africa Fund, as to certain of
the federal income tax consequences of the Reorganization under
the Internal Revenue Code to the Calvert South Africa Fund and its shareholders.
For purposes of rendering its opinion, counsel may rely exclusively and without
independent verification, as to factual matters, on the statements made in the
Plan, the proxy statement which will be distributed to the shareholders of the
Calvert New Africa Fund in connection with the Reorganization, and on such other
written representations as the Calvert New Africa Fund and the Calvert South
Africa Fund, respectively, will have verified as of the Effective Time of the
Reorganization. The opinion of counsel will be to the effect that, based on the
facts and assumptions stated therein, for federal income tax purposes:
(i) neither the Calvert New Africa Fund nor the Calvert South Africa Fund
will recognize any gain or loss upon the transfer of the assets of the Calvert
New Africa Fund to and the assumption of its liabilities by the Calvert South
Africa Fund in exchange for Calvert South Africa Fund Shares and upon the
distribution (whether actual or constructive) of Calvert South Africa Fund
Shares to its shareholders in exchange for their shares of capital stock of the
Calvert New Africa Fund;
(ii) the shareholders of the Calvert New Africa Fund who receive Calvert
South Africa Fund Shares pursuant to the Reorganization will not recognize any
gain or loss upon the exchange (whether actual or constructive) of their shares
of capital stock of the Calvert New Africa Fund for Calvert South Africa Fund
Shares (including any fractional share interests they are deemed to have
received) pursuant to the Reorganization;
(iii) the basis of Calvert South Africa Fund Shares received by the Calvert
New Africa Fund's shareholders will be the same as the basis of the shares of
capital stock of the Calvert New Africa Fund surrendered in the exchange; and
(iv) the basis of the Calvert New Africa Fund assets acquired by the Calvert
South Africa Fund will be the same as the basis of such assets to the Calvert
New Africa Fund immediately prior to the Reorganization.
(e) Opinion of Counsel. The Calvert New Africa Fund shall have received the
opinion of counsel for the Calvert South Africa Fund, dated the Effective Time
of the Reorganization, addressed to and in form and substance satisfactory to
the Calvert New Africa Fund, to the effect that:
(i) Calvert Impact Fund, Inc. is an open-end management company registered
under the Securities Act of 1933 and the Investment Company Act of 1940, and is
duly organized and validly existing in good standing under the laws of the State
of Maryland;
(ii) Calvert South Africa Fund is a series of Calvert Impact Fund, Inc.;
(iii) The Agreement and Plan of Reorganization and the execution and filing
of the Plan have been duly authorized and approved by all requisite action by
the Board of Directors of Calvert Impact Fund, Inc., and the Plan has been duly
executed and delivered by the Calvert South Africa Fund and is a valid and
binding obligation of Calvert Impact Fund, Inc. and its series, Calvert South
Africa Fund;
(iv) Calvert South Africa Fund shares to be issued pursuant to the
Reorganization have been duly authorized and upon issuance thereof in accordance
with the Plan will be validly issued, fully paid and non-assessable shares of
beneficial interest of the Calvert South Africa Fund.
10. AMENDMENTS, TERMINATIONS, NON-SURVIVAL OF COVENANTS,
WARRANTIES AND REPRESENTATIONS
(a) The parties hereto may, by agreement in writing authorized by the Board
of Directors of either party, amend the Plan at any time before or after
approval of the Plan by shareholders of the Calvert New Africa Fund, but after
such approval, no amendment shall be made that substantially changes the terms
of this Agreement.
(b) At any time prior to the Effective Time of the Reorganization, any of
the parties may by written instrument signed by it: (i) waive any inaccuracies
in the representations and warranties made pursuant to this Agreement, and (ii)
waive compliance with any of the covenants or conditions made for its benefit
pursuant to this Agreement.
(c) The Calvert New Africa Fund may terminate the Plan at any time prior to
the Effective Time of the Reorganization by notice to the Calvert South Africa
Fund if: (i) a material condition to its performance under this Agreement or a
material covenant of the Calvert South Africa Fund contained in this Agreement
is not fulfilled on or before the date specified for the fulfillment thereof, or
(ii) a material default or material breach of the Plan is made by the Calvert
South Africa Fund.
(d) The Calvert South Africa Fund may terminate the Plan at any time prior
to the Effective Time of the Reorganization by notice to the Calvert New Africa
Fund if: (i) a material condition to its performance under this Agreement or a
material covenant of the Calvert New Africa Fund contained in this Agreement is
not fulfilled on or before the date specified for the fulfillment thereof, or
(ii) a material default or material breach of the Plan is made by the Calvert
New Africa Fund.
(e) The Plan may be terminated by either party at any time prior to the
Effective Time of the Reorganization upon notice to the other party, whether
before or after approval by the shareholders of the Calvert New Africa Fund,
without liability on the part of either party hereto or its respective
directors, officers, or shareholders, and shall be terminated without liability
as of the close of business on March 31, 2001, if the Effective Time of the
Reorganization is not on or prior to such date.
(f) No representations, warranties, or covenants in or pursuant to the Plan
shall survive the Reorganization.
11. EXPENSES
Each Fund will bear its own expenses incurred in connection with this
Reorganization.
12. GENERAL
This Plan supersedes all prior agreements between the parties (written or oral),
is intended as a complete and exclusive statement of the terms of the Plan
between the parties and may not be changed or terminated orally. The Plan may be
executed in one or more counterparts, all of which shall be considered one and
the same agreement, and shall become effective when one or more counterparts
have been executed by each party and delivered to each of the parties hereto.
The headings contained in the Plan are for reference purposes only and shall not
affect in any way the meaning or interpretation of the Plan. Nothing in the
Plan, expressed or implied, is intended to confer upon any other person any
rights or remedies by reason of the Plan.
IN WITNESS WHEREOF, the Calvert New Africa Fund and the Calvert South Africa
Fund have caused the Plan to be executed on their behalf by their respective
Chairman, President, or a Vice President, and their seals to be affixed hereto
and attested by their respective Secretary or Assistant Secretary, all as of the
day and year first above written, and to be delivered as required.
(SEAL) CALVERT NEW AFRICA FUND
Attest:
By: /s/ Ivy Wafford Duke By: /s/ Barbara J. Krumsiek
Name: Barbara J. Krumsiek
Title: President
(SEAL) CALVERT SOUTH AFRICA FUND
By: /s/ Ivy Wafford Duke By: /s/ William M. Tartikoff
Name: William M. Tartikoff
Title: Vice President
Thank You For Voting Each of Your Accounts Promptly!
Calvert Impact Fund, Inc.
STATEMENT OF ADDITIONAL INFORMATION
February __, 2001
Acquisition of the Assets of the
Calvert New Africa Fund
(a series of the Calvert New World Fund, Inc.)
4550 Montgomery Avenue, Suite 1000N
Bethesda, Maryland 20814
By and In Exchange for Shares of
Calvert South Africa Fund
(a series of the Calvert Impact Fund, Inc.)
4550 Montgomery Avenue, Suite 1000N
Bethesda, Maryland 20814
This Statement of Additional Information, relating specifically to the
proposed transfer of all or substantially all of the assets of the Calvert New
Africa Fund in exchange for shares of the Calvert South Africa Fund, consists of
this cover page, the Pro Forma Financial Information, and the Statement of
Additional Information of the Calvert South Africa Fund, dated February __,
2001, attached hereto and incorporated by reference.
This Statement of Additional Information is not a prospectus. A
Prospectus/Proxy Statement dated February __, 2001, relating to the
above-referenced matter may be obtained from Calvert Group, 4550 Montgomery
Avenue, Suite 1000N, Bethesda, Maryland 20814. This Statement of Additional
Information relates to, and should be read in conjunction with, such
Prospectus/Proxy Statement.
The Prospectus and Statement of Additional Information of the Calvert New
Africa Fund are hereby incorporated by reference and are dated July 31, 2000.
You may obtain copies by calling or writing the Fund at 4550 Montgomery Avenue,
Suite 1000N, Bethesda, Maryland 20814 or by calling the Fund at (800) 661-3550.
The date of this Statement of Additional Information is February __,
2001.
Calvert Impact Fund, Inc.
Calvert South Africa Fund
4550 Montgomery Avenue, Bethesda, Maryland 20814
Statement of Additional Information
February __, 2001
New Account (800) 368-2748 Shareholder
Information: (301) 951-4820 Services: (800) 368-2745
Broker (800) 368-2746 TDD for the Hearing-
Services: (301) 951-4850 Impaired: (800) 541-1524
This Statement of Additional Information ("SAI") is not a prospectus.
Investors should read the SAI in conjunction with the Fund's Prospectus, dated
March 2001. The audited financial statements of the Calvert South Africa Fund's
predecessor fund, The RISA Fund, included in its most recent Report to
Shareholders, are expressly incorporated by reference, and made a part of this
SAI. The prospectus and The RISA Fund's shareholder report may be obtained free
of charge by writing the Fund at the above address, calling the Fund or by
visiting our website at www.calvert.com.
TABLE OF CONTENTS
Investment Policies and Risks 2
Investment Restrictions 8
Dividends, Distributions and Taxes 9
Net Asset Value 10
Calculation of Total Return 11
Advertising 11
Purchase and Redemption of Shares 12
Directors and Officers 12
Investment Advisor and Subadvisors 14
Administrative Services Agent 15
Transfer and Shareholder Servicing
Agents 15
Method of Distribution 15
Portfolio Transactions 16
Personal Securities Transactions 17
Independent Accountants and
Custodians 17
General Information 17
Appendix 18
INVESTMENT POLICIES AND RISKS
-----------------------------
Foreign Securities
Investments in foreign securities may present risks not typically involved
in domestic investments. The Fund may purchase foreign securities directly, on
foreign markets, or those represented by American Depositary Receipts ("ADRs"),
or other receipts evidencing ownership of foreign securities, such as
International Depositary Receipts and Global Depositary Receipts. ADRs are U.S.
dollar-denominated and traded in the U.S. on exchanges or over-the-counter. If
the Fund invests in an ADR rather than directly in a foreign issuer's stock, the
Fund may possibly avoid some currency and some liquidity risks. The information
available for ADRs is subject to the more uniform and more exacting accounting,
auditing and financial reporting standards of the domestic market or exchange on
which they are traded.
Additional costs may be incurred in connection with international
investment since foreign brokerage commissions and the custodial costs
associated with maintaining foreign portfolio securities are generally higher
than in the United States. Fee expense may also be incurred on currency
exchanges when the Fund changes investments from one country to another or
converts foreign securities holdings into U.S. dollars.
United States Government policies have at times, in the past, through
imposition of interest equalization taxes and other restrictions, discouraged
certain investments abroad by United States investors. In addition, foreign
countries may impose withholding and taxes on dividends and interest.
Since investments in securities of issuers domiciled in foreign countries
usually involve currencies of the foreign countries, and since the Fund may
temporarily hold funds in foreign currencies during the completion of investment
programs, the value of the assets of the Fund as measured in United States
dollars may be affected favorably or unfavorably by changes in foreign currency
exchange rates and exchange control regulations. For example, if the value of
the foreign currency in which a security is denominated increases or declines in
relation to the value of the U.S. dollar, the value of the security in U.S.
dollars will increase or decline correspondingly.
Emerging Markets Securities. Investing in emerging markets in particular, those
countries whose economies and capital markets are not as developed as those of
more industrialized nations, carries its own special risks. Investments in these
countries may be riskier, and will be subject to erratic and abrupt price
movements. Some economies are less well developed and less diverse, and more
vulnerable to the ebb and flow of international trade, trade barriers and other
protectionist or retaliatory measures. Many of these countries are grappling
with severe inflation or recession, high levels of national debt, and currency
exchange problems. Investments in countries that have recently begun moving away
from central planning and state-owned industries toward free markets should be
regarded as speculative. Among other risks, the economies of such countries may
be affected to a greater extent than in other countries by price fluctuations of
a single commodity, by severe cyclical climatic conditions, lack of significant
history in operating under a market-oriented economy, or by political
instability, including risk of expropriation.
Certain emerging market countries have historically experienced, and may
continue to experience, high rates of inflation, high interest rates, exchange
rate fluctuations, large amounts of external debt, balance of payments and trade
difficulties and extreme poverty and unemployment. The issuer or governmental
authority that controls the repayment of an emerging market country's debt may
not be able or willing to repay the principal and/or interest when due in
accordance with the terms of such debt. As a result of the foregoing, a
government obligor may default on its obligations. If such an event occurs, a
Fund may have limited legal recourse against the issuer and/or guarantor.
Remedies must, in some cases, be pursued in the courts of the defaulting party
itself, and the ability of the holder of foreign government fixed income
securities to obtain recourse may be subject to the political climate in the
relevant country.
Forward Currency Exchange Contracts. The Fund will conduct its foreign
currency exchange transactions either on a spot (i.e., cash) basis at the spot
rate prevailing in the foreign exchange market, or through entering into forward
contracts to purchase or sell foreign currencies. It may also use foreign
currency options and futures. See below. A forward foreign currency contract
involves an obligation to purchase or sell a specific currency at a future date
which may be any fixed number of days from the date of the contract agreed upon
by the parties, at a price set at the time of the contract. These contracts are
traded in the interbank market conducted directly between currency traders
(usually large, commercial banks) and their customers. A forward foreign
currency contract generally has no deposit requirement, and no commissions are
charged at any stage for trades, although they do realize a profit based on the
difference (the "spread") between the prices at which they are buying and
selling various currencies.
The Fund may enter into forward foreign currency contracts for two reasons.
First, the Fund may desire to preserve the United States dollar price of a
security when it enters into a contract for the purchase or sale of a security
denominated in a foreign currency. The Fund may be able to protect itself
against possible losses resulting from changes in the relationship between the
United States dollar and foreign currencies during the period between the date
the security is purchased or sold and the date on which payment is made or
received by entering into a forward contract for the purchase or sale, for a
fixed amount of dollars, of the amount of the foreign currency involved in the
underlying security transactions.
Second, when the Advisor or Subadvisors believes that the currency of a
particular foreign country may suffer a substantial decline against the United
States dollar, the Fund may enter into a forward foreign currency contract to
sell, for a fixed amount of dollars, the amount of foreign currency
approximating the value of some or all of the Fund's securities denominated in
such foreign currency. The precise matching of the forward foreign currency
contract amounts and the value of the Fund's securities involved will not
generally be possible since the future value of the securities will change as a
consequence of market movements between the date the forward contract is entered
into and the date it matures. The projection of short-term currency market
movement is difficult, and the successful execution of this short-term hedging
strategy is uncertain. Although forward foreign currency contracts tend to
minimize the risk of loss due to a decline in the value of the hedged currency,
at the same time they tend to limit any potential gain which might result should
the value of such currency increase.
Temporary defensive positions
For temporary defensive purposes the Fund may invest in cash or cash
equivalents. Cash equivalents include instruments such as, but not limited to,
U.S. government and agency obligations, certificates of deposit, banker's
acceptances, time deposits commercial paper, short-term corporate debt
securities, and repurchase agreements.
Repurchase Agreements
The Fund may purchase debt securities subject to repurchase agreements,
which are arrangements under which the Fund buys a security, and the seller
simultaneously agrees to repurchase the security at a specified time and price
reflecting a market rate of interest. The Fund engages in repurchase agreements
in order to earn a higher rate of return than it could earn simply by investing
in the obligation which is the subject of the repurchase agreement. Repurchase
agreements are not, however, without risk. In the event of the bankruptcy of a
seller during the term of a repurchase agreement, a legal question exists as to
whether the Fund would be deemed the owner of the underlying security or would
be deemed only to have a security interest in and lien upon such security. The
Fund will only engage in repurchase agreements with recognized securities
dealers and banks determined to present minimal credit risk by the Advisor. In
addition, the Fund will only engage in repurchase agreements reasonably designed
to secure fully during the term of the agreement the seller's obligation to
repurchase the underlying security and will monitor the market value of the
underlying security during the term of the agreement. If the value of the
underlying security declines and is not at least equal to the repurchase price
due the Fund pursuant to the agreement, the Fund will require the seller to
pledge additional securities or cash to secure the seller's obligations pursuant
to the agreement. If the seller defaults on its obligation to repurchase and the
value of the underlying security declines, the Fund may incur a loss and may
incur expenses in selling the underlying security. Repurchase agreements are
always for periods of less than one year. Repurchase agreements not terminable
within seven days are considered illiquid.
Reverse Repurchase Agreements
The Fund may also engage in reverse repurchase agreements. Under a reverse
repurchase agreement, the Fund sells securities to a bank or securities dealer
and agrees to repurchase those securities from such party at an agreed upon date
and price reflecting a market rate of interest. The Fund invests the proceeds
from each reverse repurchase agreement in obligations in which it is authorized
to invest. The Fund intends to enter into a reverse repurchase agreement only
when the interest income provided for in the obligation in which the Fund
invests the proceeds is expected to exceed the amount the Fund will pay in
interest to the other party to the agreement plus all costs associated with the
transactions. The Fund does not intend to borrow for leverage purposes. The Fund
will only be permitted to pledge assets to the extent necessary to secure
borrowings and reverse repurchase agreements.
During the time a reverse repurchase agreement is outstanding, the Fund
will maintain in a segregated custodial account an amount of cash, U.S.
Government securities or other liquid, high-quality debt securities equal in
value to the repurchase price. The Fund will mark-to-market the value of assets
held in the segregated account, and will place additional assets in the account
whenever the total value of the account falls below the amount required under
applicable regulations.
The Fund's use of reverse repurchase agreements involves the risk that the
other party to the agreements could become subject to bankruptcy or liquidation
proceedings during the period the agreements are outstanding. In such event, the
Fund may not be able to repurchase the securities it has sold to that other
party. Under those circumstances, if at the expiration of the agreement such
securities are of greater value than the proceeds obtained by the Fund under the
agreements, the Fund may have been better off had it not entered into the
agreement. However, the Fund will enter into reverse repurchase agreements only
with banks and dealers which the Advisor believes present minimal credit risks
under guidelines adopted by the Fund's Board of Directors. In addition, the Fund
bears the risk that the market value of the securities it sold may decline below
the agreed-upon repurchase price, in which case the dealer may request the Fund
to post additional collateral.
african sovereign debt
The Fund may invest up to 25% of its assets in fixed-income securities.
These include but are not limited to, foreign government obligations -- debt
securities issued and backed by the respective government bodies. In terms of
their government backing, these securities will structurally resemble U.S.
Government and U.S. Government agency issues. In many instances the debt issues
of African sovereignties represent low quality securities and may be comparable
to securities rated below investment-grade. Because of their speculative
characteristics, they trade at substantial discounts from face value, but may
offer substantial long-term capital appreciation.
Non-Investment Grade Debt Securities
Non-investment grade debt securities are lower quality debt securities
(generally those rated BB or lower by S&P or Ba or lower by Moody's, known as
"junk bonds"). These securities have moderate to poor protection of principal
and interest payments and have speculative characteristics. (See Appendix for a
description of the ratings. The Fund considers a security to be investment
grade if it has received an investment grade rating from at least one nationally
recognized statistical rating organization (NRSRO), or is an unrated security of
comparable quality. Currently, there are four NRSROs.) These securities involve
greater risk of default or price declines due to changes in the issuer's
creditworthiness than investment-grade debt securities. Because the market for
lower-rated securities may be thinner and less active than for higher-rated
securities, there may be market price volatility for these securities and
limited liquidity in the resale market. Market prices for these securities may
decline significantly in periods of general economic difficulty or rising
interest rates. Unrated debt securities may fall into the lower quality
category. Unrated securities usually are not attractive to as many buyers as
rated securities are, which may make them less marketable.
The quality limitation set forth in the Fund's investment policy is
determined immediately after the Fund's acquisition of a given security.
Accordingly, any later change in ratings will not be considered when determining
whether an investment complies with the Fund's investment policy.
When purchasing high-yielding securities rated or unrated, the Advisors
prepare their own careful credit analysis to attempt to identify those issuers
whose financial condition is adequate to meet future obligations or is expected
to be adequate in the future. Through Fund diversification and credit analysis,
investment risk can be reduced, although there can be no assurance that losses
will not occur.
derivatives
The Fund can use various techniques to increase or decrease its exposure to
changing security prices, interest rates, or other factors that affect security
values. These techniques may involve derivative transactions such as buying and
selling options and futures contracts and leveraged notes, entering into swap
agreements, and purchasing indexed securities. The Fund can use these practices
either as substitution or as protection against an adverse move in the Fund to
adjust the risk and return characteristics of the Fund. If the Advisor and/or
Subadvisors judges market conditions incorrectly or employs a strategy that does
not correlate well with a Fund's investments, or if the counterparty to the
transaction does not perform as promised, these techniques could result in a
loss. These techniques may increase the volatility of the Fund and may involve a
small investment of cash relative to the magnitude of the risk assumed.
Derivatives are often illiquid.
Options and Futures Contracts
The Fund may, in pursuit of its respective investment objectives, purchase
put and call options and engage in the writing of covered call options and
secured put options on securities, and employ a variety of other investment
techniques. Specifically, the Fund may also engage in the purchase and sale of
stock index future contracts, foreign currency futures contracts, interest rate
futures contracts, and options on such futures, as described more fully below.
The Fund may engage in such transactions only to hedge the existing
positions. It will not engage in such transactions for the purposes of
speculation or leverage. Such investment policies and techniques may involve a
greater degree of risk than those inherent in more conservative investment
approaches.
The Fund may write "covered options" on securities in standard contracts
traded on national securities exchanges. The Fund may write such options in
order to receive the premiums from options that expire and to seek net gains
from closing purchase transactions with respect to such options.
Put and Call Options. The Fund may purchase put and call options, in standard
contracts traded on national securities exchanges or over-the-counter. The Fund
will purchase such options only to hedge against changes in the value of
securities the Fund holds and not for the purposes of speculation or leverage.
By buying a put, the Fund has the right to sell the security at the exercise
price, thus limiting its risk of loss through a decline in the market value of
the security until the put expires. The amount of any appreciation in the value
of the underlying security will be partially offset by the amount of the premium
paid for the put option and any related transaction costs. Prior to its
expiration, a put option may be sold in a closing sale transaction and any
profit or loss from the sale will depend on whether the amount received is more
or less than the premium paid for the put option plus the related transaction
costs.
The Fund may purchase call options on securities. Such transactions may be
entered into in order to limit the risk of a substantial increase in the market
price of the security which the Fund intends to purchase. Prior to its
expiration, a call option may be sold in a closing sale transaction. Any profit
or loss from such a sale will depend on whether the amount received is more or
less than the premium paid for the call option plus the related transaction
costs.
Covered Options. The Fund may write only covered options on equity and debt
securities in standard contracts traded on national or foreign securities
exchanges. This means that, in the case of call options, so long as the Fund is
obligated as the writer of a call option, the Fund will own the underlying
security subject to the option and, in the case of put options, the Fund will,
through its custodian, deposit and maintain either cash or securities with a
market value equal to or greater than the exercise price of the option.
When the Fund writes a covered call option, the Fund gives the purchaser
the right to purchase the security at the call option price at any time during
the life of the option. As the writer of the option, the Fund receives a
premium, less a commission, and in exchange foregoes the opportunity to profit
from any increase in the market value of the security exceeding the call option
price. The premium serves to mitigate the effect of any depreciation in the
market value of the security. Writing covered call options can increase the
income of the Fund and thus reduce declines in the net asset value per share of
the Fund if securities covered by such options decline in value. Exercise of a
call option by the purchaser however will cause the Fund to forego future
appreciation of the securities covered by the option.
When the Fund writes a covered put option, it will gain a profit in the
amount of the premium, less a commission, so long as the price of the underlying
security remains above the exercise price. However, the Fund remains obligated
to purchase the underlying security from the buyer of the put option (usually in
the event the price of the security falls below the exercise price) at any time
during the option period. If the price of the underlying security falls below
the exercise price, the Fund may realize a loss in the amount of the difference
between the exercise price and the sale price of the security, less the premium
received.
The Fund may purchase securities which may be covered with call options
solely on the basis of considerations consistent with the investment objectives
and policies of the Fund. The Fund's turnover may increase through the exercise
of a call option; this will generally occur if the market value of a "covered"
security increases and the Fund has not entered into a closing purchase
transaction.
Risks Related to Options Transactions. The Fund can close out its
respective positions in exchange-traded options only on an exchange which
provides a secondary market in such options. Although the Fund intends to
acquire and write only such exchange-traded options for which an active
secondary market appears to exist, there can be no assurance that such a market
will exist for any particular option contract at any particular time. This might
prevent the Fund from closing an options position, which could impair the Fund's
ability to hedge effectively. The inability to close out a call position may
have an adverse effect on liquidity because the Fund may be required to hold the
securities underlying the option until the option expires or is exercised.
Over-the-Counter ("OTC") Options. OTC options differ from exchange-traded
options in several respects. They are transacted directly with dealers and not
with a clearing corporation, and there is a risk of non-performance by the
dealer. However, the premium is paid in advance by the dealer. OTC options are
available for a greater variety of securities and foreign currencies, and in a
wider range of expiration dates and exercise prices than exchange-traded
options. Since there is no exchange, pricing is normally done by reference to
information from a market maker, which information is carefully monitored or
caused to be monitored by the Subadvisors and verified in appropriate cases.
A writer or purchaser of a put or call option can terminate it voluntarily
only by entering into a closing transaction. In the case of OTC options, there
can be no assurance that a continuous liquid secondary market will exist for any
particular option at any specific time. Consequently, the Fund may be able to
realize the value of an OTC option it has purchased only by exercising it or
entering into a closing sale transaction with the dealer that issued it.
Similarly, when the Fund writes an OTC option, it generally can close out that
option prior to its expiration only by entering into a closing purchase
transaction with the dealer to which it originally wrote the option. If a
covered call option writer cannot effect a closing transaction, it cannot sell
the underlying security or foreign currency until the option expires or the
option is exercised. Therefore, the writer of a covered OTC call option may not
be able to sell an underlying security even though it might otherwise be
advantageous to do so. Likewise, the writer of a secured OTC put option may be
unable to sell the securities pledged to secure the put for other investment
purposes while it is obligated as a put writer. Similarly, a purchaser of an OTC
put or call option might also find it difficult to terminate its position on a
timely basis in the absence of a secondary market.
The Fund understands the position of the staff of the Securities and
Exchange Commission (the "SEC") to be that purchased OTC options and the assets
used as "cover" for written OTC options are illiquid securities. The Fund has
adopted procedures for engaging in OTC options transactions for the purpose of
reducing any potential adverse effect of such transactions upon the liquidity of
the Fund.
Futures Transactions. The Fund may purchase and sell futures contracts, but only
when, in the judgment of the Subadvisors, such a position acts as a hedge
against market changes which would adversely affect the securities held by the
Fund. These futures contracts may include, but are not limited to, market index
futures contracts and futures contracts based on U.S. Government obligations.
A futures contract is an agreement between two parties to buy and sell a
security on a future date which has the effect of establishing the current price
for the security. Although futures contracts by their terms require actual
delivery and acceptance of securities, in most cases the contracts are closed
out before the settlement date without the making or taking of delivery of
securities. Upon buying or selling a futures contract, the Fund deposits initial
margin with its custodian, and thereafter daily payments of maintenance margin
are made to and from the executing broker. Payments of maintenance margin
reflect changes in the value of the futures contract, with the Fund being
obligated to make such payments if its futures position becomes less valuable
and entitled to receive such payments if its positions become more valuable.
The Fund may only invest in futures contracts to hedge its respective
existing investment positions and not for income enhancement, speculation or
leverage purposes.
Futures contracts are designed by boards of trade which are designated
"contracts markets" by the Commodity Futures Trading Commission ("CFTC"). As
series of a registered investment company, the Fund is eligible for exclusion
from the CFTC's definition of "commodity pool operator," meaning that the Fund
may invest in futures contracts under specified conditions without registering
with the CFTC. Futures contracts trade on contracts markets in a manner that is
similar to the way a stock trades on a stock exchange and the boards of trade,
through their clearing corporations, guarantee performance of the contracts.
Options on Futures Contracts. The Fund may purchase and write put or call
options and sell call options on futures contracts. The Fund may also enter into
closing transactions with respect to such options to terminate an existing
position; that is, to sell a put option already owned and to buy a call option
to close a position where the Fund has already sold a corresponding call option.
The Fund may only invest in options on futures contracts to hedge their
respective existing investment positions and not for income enhancement,
speculation or leverage purposes.
An option on a futures contract gives the purchaser the right, in return
for the premium paid, to assume a position in a futures contract-a long position
if the option is a call and a short position if the option is a put-at a
specified exercise price at any time during the period of the option. The Fund
will pay a premium for such options purchased or sold. In connection with such
options bought or sold, the Fund will make initial margin deposits and make or
receive maintenance margin payments which reflect changes in the market value of
such options. This arrangement is similar to the margin arrangements applicable
to futures contracts described above.
Put Options on Futures Contracts. The purchase of put options on futures
contracts is analogous to the sale of futures contracts and is used to protect
the Fund against the risk of declining prices. The Fund may purchase put options
and sell put options on futures contracts that are already owned by the Fund.
The Fund will only engage in the purchase of put options and the sale of covered
put options on market index futures for hedging purposes.
Call Options on Futures Contracts. The sale of call options on futures contracts
is analogous to the sale of futures contracts and is used to protect the Fund
against the risk of declining prices. The purchase of call options on futures
contracts is analogous to the purchase of a futures contract. The Fund may only
buy call options to close an existing position where the Fund has already sold a
corresponding call option, or for a cash hedge. The Fund will only engage in the
sale of call options and the purchase of call options to cover for hedging
purposes.
Writing Call Options on Futures Contracts. The writing of call options on
futures contracts constitutes a partial hedge against declining prices of the
securities deliverable upon exercise of the futures contract. If the futures
contract price at expiration is below the exercise price, the Fund will retain
the full amount of the option premium which provides a partial hedge against any
decline that may have occurred in the Fund's securities holdings.
Risks of Options and Futures Contracts. If the Fund has sold futures or takes
options positions to hedge against a decline in the market and the market later
advances, the Fund may suffer a loss on the futures contracts or options which
it would not have experienced if it had not hedged. Correlation is also
imperfect between movements in the prices of futures contracts and movements in
prices of the securities which are the subject of the hedge. Thus, the price of
the futures contract or option may move more than or less than the price of the
securities being hedged. Where the Fund has sold futures or taken options
positions to hedge against decline in the market, the market may advance and the
value of the securities held in the Fund may decline. If this were to occur, the
Fund might lose money on the futures contracts or options and also experience a
decline in the value of its securities.
The Fund can close out futures positions only on an exchange or board of
trade which provides a secondary market in such futures. Although the Fund
intends to purchase or sell only such futures for which an active secondary
market appears to exist, there can be no assurance that such a market will exist
for any particular futures contract at any particular time. This might prevent
the Fund from closing a futures position, which could require the Fund to make
daily cash payments with respect to its position in the event of adverse price
movements.
Options on futures transactions bear several risks apart from those
inherent in options transactions generally. The Fund's ability to close out its
options positions in futures contracts will depend upon whether an active
secondary market for such options develops and is in existence at the time the
Fund seeks to close its positions. There can be no assurance that such a market
will develop or exist. Therefore, the Fund might be required to exercise the
options to realize any profit.
Foreign Currency Transactions. Forward Foreign Currency Exchange Contracts. A
forward foreign currency exchange contract involves an obligation to purchase or
sell a specific currency at a future date, which may be any fixed number of days
("Term") from the date of the contract agreed upon by the parties, at a price
set at the time of the contract. These contracts are traded directly between
currency traders (usually large commercial banks) and their customers.
The Fund will not enter into such forward contracts or maintain a net
exposure in such contracts where it would be obligated to deliver an amount of
foreign currency in excess of the value of its portfolio securities and other
assets denominated in that currency. The Subadvisors believes that it is
important to have the flexibility to enter into such forward contracts when it
determines that to do so is in the Fund's best interests. See above under
"Foreign Securities."
Foreign Currency Options. A foreign currency option provides the option
buyer with the right to buy or sell a stated amount of foreign currency at the
exercise price at a specified date or during the option period. A call option
gives its owner the right, but not the obligation, to buy the currency, while a
put option gives its owner the right, but not the obligation, to sell the
currency. The option seller (writer) is obligated to fulfill the terms of the
option sold if it is exercised. However, either seller or buyer may close its
position during the option period for such options any time prior to expiration.
A call rises in value if the underlying currency appreciates. Conversely, a
put rises in value if the underlying currency depreciates. While purchasing a
foreign currency option can protect the Fund against an adverse movement in the
value of a foreign currency, it does not limit the gain which might result from
a favorable movement in the value of such currency. For example, if the Fund was
holding securities denominated in an appreciating foreign currency and had
purchased a foreign currency put to hedge against a decline in the value of the
currency, it would not have to exercise its put. Similarly, if the Fund had
entered into a contract to purchase a security denominated in a foreign currency
and had purchased a foreign currency call to hedge against a rise in the value
of the currency but instead the currency had depreciated in value between the
date of purchase and the settlement date, it would not have to exercise its call
but could acquire in the spot market the amount of foreign currency needed for
settlement.
Foreign Currency Futures Transactions. The Fund may use foreign currency
futures contracts and options on such futures contracts. Through the purchase or
sale of such contracts, it may be able to achieve many of the same objectives
attainable through the use of foreign currency forward contracts, but more
effectively and possibly at a lower cost.
Unlike forward foreign currency exchange contracts, foreign currency
futures contracts and options on foreign currency futures contracts are
standardized as to amount and delivery period and are traded on boards of trade
and commodities exchanges. It is anticipated that such contracts may provide
greater liquidity and lower cost than forward foreign currency exchange
contracts.
lending portfolio securities
The Fund may lend its securities to member firms of the New York Stock
Exchange and commercial banks with assets of one billion dollars or more. Any
such loans must be secured continuously in the form of cash or cash equivalents
such as U.S. Treasury bills. The amount of the collateral must on a current
basis equal or exceed the market value of the loaned securities, and the Fund
must be able to terminate such loans upon notice at any time. The Fund will
exercise its right to terminate a securities loan in order to preserve their
right to vote upon matters of importance affecting holders of the securities.
The advantage of such loans is that the Fund continues to receive the equivalent
of the interest earned or dividends paid by the issuers on the loaned securities
while at the same time earning interest on the cash or equivalent collateral
which may be invested in accordance with the Fund's investment objective,
policies and restrictions.
Securities loans are usually made to broker-dealers and other financial
institutions to facilitate their delivery of such securities. As with any
extension of credit, there may be risks of delay in recovery and possibly loss
of rights in the loaned securities should the borrower of the loaned securities
fail financially. However, the Fund will make loans of its securities only to
those firms the Advisor or Subadvisors deems creditworthy and only on terms the
Advisor believes should compensate for such risk. On termination of the loan,
the borrower is obligated to return the securities to the Fund. The Fund will
recognize any gain or loss in the market value of the securities during the loan
period. The Fund may pay reasonable custodial fees in connection with the loan.
INVESTMENT restrictions
-----------------------
Fundamental Investment Restrictions
The Fund has adopted the following fundamental investment restrictions.
These restrictions cannot be changed without the approval of the holders of a
majority of the outstanding shares of the Fund.
(1) The Fund may not make any investment inconsistent with its classification as
a nondiversified investment company under the 1940 Act.
(2) The Fund may not concentrate its investments in the securities of issuers
primarily engaged in any particular industry (other than securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities and
repurchase agreements secured thereby).
(3) The Fund may not issue senior securities or borrow money, except from banks
for temporary or emergency purposes and then only in an amount up to 33 1/3% of
the value of its total assets or as permitted by law and except by engaging in
reverse repurchase agreements, where allowed. In order to secure any permitted
borrowings and reverse repurchase agreements under this section, the Fund may
pledge, mortgage or hypothecate its assets.
(4) The Fund may not underwrite the securities of other issuers, except as
allowed by law or to the extent that the purchase of obligations in accordance
with its investment objective and policies, either directly from the issuer, or
from an underwriter for an issuer, may be deemed an underwriting.
(5) The Fund may not invest directly in commodities or real estate, although it
may invest in securities which are secured by real estate or real estate
mortgages and securities of issuers which invest or deal in commodities,
commodity futures, real estate or real estate mortgages.
(6) The Fund may not make loans, other than through the purchase of money market
instruments and repurchase agreements or by the purchase of bonds, debentures or
other debt securities, or as permitted by law. The purchase of all or a portion
of an issue of publicly or privately distributed debt obligations in accordance
with the Fund's investment objective, policies and restrictions, shall not
constitute the making of a loan.
Nonfundamental Investment Restrictions
The Fund's Board of Directors has adopted the following nonfundamental
investment restrictions. A nonfundamental investment restriction can be changed
by the Board at any time without a shareholder vote.
(1) The Fund may not invest, in the aggregate, more than 15% of its net assets
in illiquid securities. Purchases of securities outside the U.S. that are not
registered with the SEC or marketable in the U.S. are not per se illiquid.
(2) The Fund may not write, purchase or sell puts, calls or combinations thereof
except that the Fund may (a) write exchange-traded covered call options on
portfolio securities and enter into closing purchase transactions with respect
to such options, and the Fund may write exchange-traded covered call options on
foreign currencies and secured put options on securities and foreign currencies
and write covered call and secured put options on securities and foreign
currencies traded over the counter, and enter into closing purchase transactions
with respect to such options, (b) purchase exchange-traded call options and put
options and purchase call and put options traded over the counter, provided that
the premiums on all outstanding call and put options do not exceed 5% of its
total assets, and enter into closing sale transactions with respect to such
options, and (c) engage in financial futures contracts and related options
transactions, provided that the sum of the initial margin deposits on the Fund's
existing futures and related options positions and premiums paid for related
options would not exceed 5% of its total assets, excluding any bona fide hedging
purposes.
(3)The Fund may not make short sales of securities or purchase any securities on
margin except that the Fund may obtain such short-term credits as may be
necessary for the clearance of purchases and sales of securities. The deposit or
payment by the Fund of initial or maintenance margin in connection with
financial futures contracts or related options transactions is not considered
the purchase of a security on margin.
Any investment restriction which involves a maximum percentage of
securities or assets (except for fundamental investment restriction three and
nonfundamental investment restriction one) shall not be considered to be
violated unless an excess over the applicable percentage occurs immediately
after an acquisition of securities or utilization of assets and results
therefrom.
`
dividends, distributions, and taxes
-----------------------------------
The Fund intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code. If for any reason the Fund should
fail to qualify, it would be taxed as a corporation at the Fund level, and pay
taxes on its income and gains rather than passing through its income and gains
to shareholders, so that shareholders also would pay taxes on these same income
and gains.
Distributions of realized net capital gains, if any, are normally paid once
a year; however, the Fund does not intend to make any such distributions unless
available capital loss carryovers, if any, have been used or have expired.
Generally, dividends (including short-term capital gains) and distributions
are taxable to the shareholder in the year they are paid. However, any dividends
and distributions paid in January but declared during the prior three months are
taxable in the year declared.
The Fund is required to withhold 31% of any reportable dividends and
long-term capital gain distributions paid and 31% of each reportable redemption
transaction occurring if: (a) the shareholder's social security number or other
taxpayer identification number ("TIN") is not provided or an obviously incorrect
TIN is provided; (b) the shareholder does not certify under penalties of perjury
that the TIN provided is the shareholder's correct TIN and that the shareholder
is not subject to backup withholding under section 3406(a)(1)(C) of the Internal
Revenue Code because of underreporting (however, failure to provide
certification as to the application of section 3406(a)(1)(C) will result only in
backup withholding on dividends, not on redemptions); or (c) the Fund is
notified by the Internal Revenue Service that the TIN provided by the
shareholder is incorrect or that there has been underreporting of interest or
dividends by the shareholder. Affected shareholders will receive statements at
least annually specifying the amount withheld.
In addition, the Fund is required to report to the Internal Revenue Service
the following information with respect to each redemption transaction occurring
in the Fund: (a) the shareholder's name, address, account number and taxpayer
identification number; (b) the total dollar value of the redemptions; and (c)
the Fund's identifying CUSIP number.
Certain shareholders are, however, exempt from the backup withholding and
broker reporting requirements. Exempt shareholders include: corporations;
financial institutions; tax-exempt organizations; individual retirement plans;
the U.S., a State, the District of Columbia, a U.S. possession, a foreign
government, an international organization, or any political subdivision, agency
or instrumentality of any of the foregoing; U.S. registered commodities or
securities dealers; real estate investment trusts; registered investment
companies; bank common trust funds; certain charitable trusts; foreign central
banks of issue. Non-resident aliens, certain foreign partnerships and foreign
corporations are generally not subject to either requirement but may instead be
subject to withholding under sections 1441 or 1442 of the Internal Revenue Code.
Shareholders claiming exemption from backup withholding and broker reporting
should call or write the Fund for further information.
Many states do not tax the portion of the Fund's dividends which is derived
from interest on U.S. Government obligations. State law varies considerably
concerning the tax status of dividends derived from U.S. Government obligations.
Accordingly, shareholders should consult their tax advisors about the tax status
of dividends and distributions from the Fund in their respective jurisdictions.
Dividends paid by the Fund may be eligible for the dividends received
deduction available to corporate taxpayers. Corporate taxpayers requesting this
information may contact Calvert.
net asset value
---------------
The public offering price of the shares of the Fund is the respective net
asset value per share (plus, for Class A shares, the applicable sales charge).
The net asset value fluctuates based on the market value of the Fund's
investments. The net asset value per share for each class is determined every
business day as of the close of the regular session of the New York Stock
Exchange (normally 4:00 p.m. Eastern time). The Fund does not determine net
asset value on certain national holidays or other days on which the New York
Stock Exchange is closed: New Year's Day, Martin Luther King Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day. The Fund's net asset value per share is determined by
dividing total net assets (the value of its assets net of liabilities, including
accrued expenses and fees) by the number of shares outstanding for that class.
The assets of the Fund are valued as follows: (a) securities for which
market quotations are readily available are valued at the most recent closing
price, mean between bid and asked price, or yield equivalent as obtained from
one or more market makers for such securities; and (b) all other securities and
assets for which market quotations are not readily available will be fairly
valued by the Advisor in good faith under the supervision of the Board of
Directors. Securities primarily traded on foreign securities exchanges are
generally valued at the preceding closing values on their respective exchanges
where primarily traded. Equity options are valued at the last sale price unless
the bid price is higher or the ask price is lower, in which event such bid or
ask price is used. Exchange traded fixed income options are valued at the last
sale price unless there is no sale price, in which event current prices provided
by market makers are used. Over-the-counter fixed income options are valued
based upon current prices provided by market makers. Financial futures are
valued at the settlement price established each day by the board of trade or
exchange on which they are traded. Because of the need to obtain prices as of
the close of trading on various exchanges throughout the world, the calculation
of the Fund's net asset value does not take place contemporaneously with the
determination of the prices of U.S. portfolio securities. For purposes of
determining the net asset value, all assets and liabilities initially expressed
in foreign currency values will be converted into United States dollar values at
the mean between the bid and offered quotations of such currencies against
United States dollars as last quoted by any recognized dealer. If an event were
to occur after the value of an investment was so established but before the net
asset value per share was determined which could materially change the net asset
value, then the instrument would be valued using fair value consideration by the
Directors or their delegates.
calculation of total return
---------------------------
The Fund may advertise "total return." Total return is calculated
separately for each class. Total return is computed by taking the total number
of shares purchased by a hypothetical $1,000 investment after deducting any
applicable sales charge, adding all additional shares purchased within the
period with reinvested dividends and distributions, calculating the value of
those shares at the end of the period, and dividing the result by the initial
$1,000 investment. For periods of more than one year, the cumulative total
return is then adjusted for the number of years, taking compounding into
account, to calculate average annual total return during that period.
Total return is computed according to the following formula:
P(1 + T)n = ERV
where P = a hypothetical initial payment of $1,000; T = total return; n = number
of years; and ERV = the ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the period.
Total return is historical in nature and is not intended to indicate future
performance. All total return quotations reflect the deduction of the maximum
sales charge, except quotations of "return without maximum load," (or "without
CDSC") which do not deduct sales charge. Return without maximum load, which will
be higher than total return, should be considered only by investors, such as
participants in certain pension plans, to whom the sales charge does not apply,
or for purposes of comparison only with comparable figures which also do not
reflect sales charges, such as Lipper averages.
The standardized total return for Class A shares is "linked" to the total
return of the Fund's predecessor, The RISA Fund. In the table below, performance
results for Class A are for the predecessor. Please note that current expenses
for the Class A Shares of the Fund are capped at 2.25%, the same as they were
for The RISA Fund. Annual total returns for The RISA did not include the
assessment of any sale loads, and therefore actual performance would have
differed.
Total returns for the Fund's shares for the periods indicated are as
follows:
Periods Ended Class A
September 30, 2000 Total Return
Calvert South Africa Fund
One year 4.19%
Five years N/A
From date of inception* 4.69%
*(October 1, 1999)
advertising
-----------
The Fund or its affiliates may provide information such as, but not limited
to, the economy, investment climate, investment principles and rationale,
sociological conditions and political ambiance. Discussion may include
hypothetical scenarios or lists of relevant factors designed to aid the investor
in determining whether the Fund is compatible with the investor's goals. The
Fund may list portfolio holdings or give examples or securities that may have
been considered for inclusion in the Portfolio, whether held or not.
The Fund or its affiliates may supply comparative performance data and
rankings from independent sources such as Donoghue's Money Fund Report, Bank
Rate Monitor, Money, Forbes, Lipper Analytical Services, Inc., CDA Investment
Technologies, Inc., Wiesenberger Investment Companies Service, Russell
2000/Small Stock Index, Mutual Fund Values Morningstar Ratings, Mutual Fund
Forecaster, Barron's, The Wall Street Journal, and Schabacker Investment
Management, Inc. Such averages generally do not reflect any front- or back-end
sales charges that may be charged by Funds in that grouping. The Fund may also
cite to any source, whether in print or on-line, such as Bloomberg, in order to
acknowledge origin of information. The Fund may compare itself or its portfolio
holdings to other investments, whether or not issued or regulated by the
securities industry, including, but not limited to, certificates of deposit and
Treasury notes. The Fund, its Advisor, and its affiliates reserve the right to
update performance rankings as new rankings become available.
Calvert Group is the nation's leading family of socially responsible mutual
funds, both in terms of socially responsible mutual fund assets under
management, and number of socially responsible mutual fund portfolios offered
(source: Social Investment Forum, December 31, 2000). Calvert Group was also the
first to offer a family of socially responsible mutual fund portfolios.
purchase and redemption of shares
---------------------------------
Share certificates will not be issued unless requested in writing by the
investor. If share certificates have been issued, then the certificate must be
delivered to the Fund's transfer agent with any redemption request. This could
result in delays. If the certificates have been lost, the shareholder will have
to pay to post an indemnity bond in case the original certificates are later
presented by another person. No certificates will be issued for fractional
shares.
The Fund has filed a notice of election under Rule 18f-1 with the
Commission. The notice states that the Fund may honor redemptions that, during
any 90-day period, exceed $250,000 or 1% of the nest assets value of the Fund,
whichever is less, by redemptions-in-kind (distributions of a pro rata share of
the portfolio securities, rather than cash.) See the prospectus for more
details on purchases and redemptions.
DIRECTORS AND OFFICERS
----------------------
The Fund's Board of Directors supervises the Fund's activities and reviews
its contracts with companies that provide it with services. Business information
is provided below about the Directors.
Principal
Occupation(s) During
Name, Address & Date of Birth Position with Fund Last 5 Years
Rebecca Adamson, Director President of the National
DOB: 09/10/47 non-profit, First Nations
Financial Project.
Miles Douglas Harper, III Director Partner
DOB: 10/16/62 Gainer Donnelly & Desroches
since January 1999. Prior
to that Mr. Harper was
Vice President, Wood,
Harper, PC.
Joy V. Jones, Esq., Director Attorney and entertainment
DOB: 07/02/50 manager in New York City.
*Barbara J. Krumsiek, Director President, Chief Executive
DOB: 08/09/52 Officer and Vice Chairman
of Calvert Group, Ltd. Prior
to joining Calvert Group, in
1997, Ms. Krumsiek served
as a Managing Director of
Alliance Fund Distributors,
Inc. since 1974.
*D. Wayne Silby, Director President of Calvert Social
DOB: 07/20/48 Investment Fund. Mr. Silby is
also Executive Chairman of
Group Serve, Inc., an internet
company focused on community
building collaborative tools.
Reno J. Martini, Director Senior Vice President of
DOB: 01/13/50 Calvert Group. Ltd., Senior
Vice President and Chief
Investment Officer of Calvert
Asset Management Company, Inc.,
and Director and President of
Calvert-Sloan Advisers, L.L.C.
Ronald M. Wolfsheimer, CPA, Officer Senior Vice President and
DOB: 07/24/52 Chief Financial Officer of
Calvert Group, Ltd.
- --------------------------------------------------------------------------------
*William M. Tartikoff, Esq. Director Senior Vice President,
DOB: 08/12/47 Secretary, and General Counsel
of Calvert Group, Ltd.
- --------------------------------------------------------------------------------
Susan Walker Bender, Esq. Officer Associate General Counsel
DOB: 01/29/59 of Calvert Group, Ltd.
- --------------------------------------------------------------------------------
Ivy Wafford Duke, Esq. Officer Associate General Counsel
DOB: 09/07/68 of Calvert Group, Ltd. Prior to
joining Calvert Group in 1996,
Ms. Duke had been an Associate
in the Investment Management
Group of the Business and
Finance Department at Drinker
Biddle & Reath since 1993.
- --------------------------------------------------------------------------------
Victor Frye, Esq. Officer Counsel and Compliance Officer
DOB: 10/15/58 of Calvert Group, Ltd. Prior to
joining Calvert Group in 1999,
Mr. Frye had been Counsel
and Manager of the Compliance
Department at The Advisors
Group since 1986.
- --------------------------------------------------------------------------------
Jennifer Streaks, Esq. Officer Assistant General Counsel of
DOB: 08/02/71 Calvert Group, Ltd. Prior to
joining Calvert Group in
1999, Ms. Streaks had been a
Regulatory Analyst in the
Market Regulation Department
of the National Association
of Securities Dealers since
1997. Prior to this,
Ms. Streaks had been a law
clerk to the Honorable
Maurice Foley at the U.S.
Tax Court for the year since
graduating from Howard
University School of Law,
where she was a student
1993-1996.
- --------------------------------------------------------------------------------
Michael V. Yuhas Jr., CPA Officer Director of Fund
DOB: 08/04/61 Administration of
Calvert Group, Ltd.
- --------------------------------------------------------------------------------
The address of Directors and Officers, unless otherwise noted, is 4550
Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814. Directors marked with
an *, above, are "interested persons" of the Fund, under the Investment Company
Act of 1940.
Each of the Officers is also an Officer of Calvert-Sloan Advisers, L.L.C.,
each of the subsidiaries of Calvert Group, Ltd., and each of the other
investment companies in the Calvert Group of Funds. Each of the above Directors
marked with a , is also a Director/Trustee of certain other investment
companies in the Calvert Group of Funds.
The Audit Committee of the Board is composed of those Directors who are not
interested persons.
Directors of the Fund not affiliated with the Funds may elect to defer
receipt of all or a percentage of their fees and invest them in any fund in the
Calvert Family of Funds through the Directors' Deferred Compensation Plan.
Deferral of the fees is designed to maintain the parties in the same position as
if the fees were paid on a current basis. Management believes this will have a
negligible effect on the Fund's assets, liabilities, net assets, and net income
per share.
Director Compensation Table
Fiscal Year 2000 Aggregate Pension or Retirement Total
(unaudited numbers) Compensation Benefits Accrued as part Compensation from
from Registrant for of Registrants Expenses* Registrant and
Service as Director Fund Complex paid to
Director**
Name of Director
Rebecca Adamson N/A N/A $34,932
Miles Douglas Harper III N/A N/A N/A
Joy V. Jones, Esq. N/A N/A $24,932
D. Wayne Silby N/A N/A $63,432
*Mesdames Adamson and Jones have chosen to defer a portion of their
compensation. As of September 30, 2000, total deferred compensation, including
dividends and capital appreciation, were $68,578.10 and $31,238.96 for each of
them, respectively.
** As of September 30, 2000, the Fund Complex consists of eleven (11)
registered investment companies.
investment advisor and Subadvisors
----------------------------------
The Fund's Investment Advisor is Calvert Asset Management Company, 4550
Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814, a subsidiary of
Calvert Group, Ltd., which is a subsidiary of Acacia Life Insurance Company of
Washington, D.C. ("Acacia"). On January 1, 1999, Acacia merged with and became a
subsidiary of Ameritas Acacia Mutual Holding Company. Under the Advisory
Contract, the Advisor provides investment advice to the Fund and oversees its
day-to-day operations, subject to direction and control by the Fund's Board of
Directors. The Advisor provides the Fund with investment supervision and
management, and office space; furnishes executive and other personnel to the
Fund; and pays the salaries and fees of all Directors who are employees of the
Advisor or its affiliates. The Fund pays all other administrative and operating
expenses, including: custodial, registrar, dividend disbursing and transfer
agency fees; administrative service fees; federal and state securities
registration fees; salaries, fees and expenses of Directors, executive officers
and employees of the Fund, who are not employees of the Advisor or of its
affiliates; insurance premiums; trade association dues; legal and audit fees;
interest, taxes and other business fees; expenses of printing and mailing
reports, notices, prospectuses, and proxy material to shareholders;
shareholders' meeting expenses; and brokerage commissions and other costs
associated with the purchase and sale of portfolio securities.
The Advisor and Subadvisors have agreed to limit annual fund operating
expenses (net of any expense offset arrangements and exclusive of any
performance fee adjustment, estimated to be approximately 0.20%) through March
29, 2002. The contractual expense cap is 2.25% for Class A. For the purposes of
this expense limit, operating expenses do not include interest expense,
brokerage commissions, extraordinary expenses, taxes and capital items. The Fund
has an offset arrangement with the custodian bank whereby the custodian and the
transfer agent fees may be paid indirectly by credits on the Fund's uninvested
cash balances. These credits are used to reduce the Fund's expenses.
Subadvisors
RISA Investment Advisers, LLC, located in Philadelphia, PA was formed in
1997 by Sam Folin. It receives a subadvisory fee, paid by the Advisor, of 0.40%
of the Fund's average daily net assets.
African Harvest Asset Managers Limited, located in Newlands, South Africa
was formed in 1997 and provides investment management services to South African
clients including union retirement funds. It receives a subadvisory fee, paid by
the Advisor, of 0.40% of the Fund's average daily net assets.
The Fund has received an exemptive order to permit the Fund and the Advisor
to enter into and materially amend the Investment Subadvisory Agreement without
shareholder approval. Within 90 days of the hiring of any Subadvisors or the
implementation of any proposed material change in the Investment Subadvisory
Agreement, the Fund will furnish its shareholders information about the new
Subadvisors or Investment Subadvisory Agreement that would be included in a
proxy statement. Such information will include any change in such disclosure
caused by the addition of a new Subadvisors or any proposed material change in
the Investment Subadvisory Agreement of the Fund. The Fund will meet this
condition by providing shareholders, within 90 days of the hiring of the
Subadvisors or implementation of any material change to the terms of an
Investment Subadvisory Agreement, with an information statement to this effect.
administrative services AGENT
-----------------------------
Calvert Administrative Services Company ("CASC"), an affiliate of the
Advisor, has been retained by the Fund to provide certain administrative
services necessary to the conduct of its affairs, including the preparation of
regulatory filings and shareholder reports. For providing such services, CASC
receives an annual administrative service fee payable monthly of 0.20% of the
Fund's average daily net asset.
Transfer and shareholder servicing agentS
-----------------------------------------
National Financial Data Services, Inc. ("NFDS"), a subsidiary of State
Street Bank & Trust, has been retained by the Fund to act as transfer agent and
dividend disbursing agent. These responsibilities include: responding to certain
shareholder inquiries and instructions, crediting and debiting shareholder
accounts for purchases and redemptions of Fund shares and confirming such
transactions, and daily updating of shareholder accounts to reflect declaration
and payment of dividends.
Calvert Shareholder Services, Inc., ("CSSI") a subsidiary of Calvert Group,
Ltd., and Acacia has been retained by the Fund to act as shareholder servicing
agent. Shareholder servicing responsibilities include responding to shareholder
inquiries and instructions concerning their accounts, entering any telephoned
purchases or redemptions into the NFDS system, maintenance of broker-dealer
data, and preparing and distributing statements to shareholders regarding their
accounts.
For these services, NFDS and CSSI receive a fee based on number of the
shareholder accounts and transactions.
method of distribution
----------------------
Calvert Distributors, Inc. ("CDI") and BOE Securities, Inc. are the
principal underwriters and distributors for the Fund. CDI is an affiliate of
CAMCO. BOE Securities is a registered broker-dealer firm located at 225 South
15th Street, Suite 928, Philadelphia, PA 19102. Under the terms of its
underwriting agreement with the Fund, the distributors market and distribute the
Fund's shares and are responsible for preparing advertising and sales
literature, and printing and mailing prospectuses to prospective investors.
Pursuant to Rule 12b-1 under the Investment Company Act of 1940, the Fund has
adopted a Distribution Plan (the "Plans") that permits the Fund to pay certain
expenses associated with the distribution and servicing of its shares. Such
expenses for Class A may not exceed, on an annual basis, 0.35% of the Fund's
average daily net assets.
The Fund's Distribution Plan was approved by the Board of Directors,
including the Directors who are not "interested persons" of the Fund (as that
term is defined in the Investment Company Act of 1940) and who have no direct or
indirect financial interest in the operation of the Plan or in any agreements
related to the Plan. The selection and nomination of the Directors who are not
interested persons of the Fund is committed to the discretion of such
disinterested Directors. In establishing the Plan, the Directors considered
various factors including the amount of the distribution expenses. The Directors
determined that there is a reasonable likelihood that the Plan will benefit the
Fund and its shareholders, including economies of scale at higher asset levels,
better investment opportunities and more flexibility in managing a growing
portfolio.
The Plan may be terminated by vote of a majority of the non-interested
Directors who have no direct or indirect financial interest in the Plan, or by
vote of a majority of the outstanding shares of the Fund. Any change in the Plan
that would materially increase the distribution cost to the Fund requires
approval of the shareholders of the Fund; otherwise, the Plan may be amended by
the Directors, including a majority of the non-interested Directors as described
above. The Plan will continue in effect for successive one-year terms provided
that such continuance is specifically approved by (i) the vote of a majority of
the Directors who are not parties to the Plan or interested persons of any such
party and who have no direct or indirect financial interest in the Plan, and
(ii) the vote of a majority of the entire Board of Directors.
Apart from the Plan, the Advisor and the distributors, at their own
expense, may incur costs and pay expenses associated with the distribution of
shares of the Fund. The Advisor and/or distributors have agreed to pay certain
firms compensation based on sales of Fund shares or on assets held in those
Firm's accounts for their marketing and distribution of the Fund shares, above
the usual sales charges and services fees. The distributors make a continuous
offering of the Fund's securities on a "best efforts" basis. Under the terms of
the agreement, the distributors are entitled to share, pursuant to the
Distribution Plan, a distribution fee and a service fee from the Fund based on
the average daily net assets. These fees are paid pursuant to the Fund's
Distribution Plan.
Class A shares are offered at net asset value plus a front-end sales charge as
follows:
As a % of As a % of Allowed to
Amount of offering net amount Brokers as a % of
Investment price invested offering price
Less than $50,000 4.75% 4.99% 4.00%
$50,000 but less than $100,000 3.75% 3.90% 3.00%
$100,000 but less than $250,000 2.75% 2.83% 2.25%
$250,000 but less than $500,000 1.75% 1.78% 1.25%
$500,000 but less than $1,000,000 1.00% 1.01% 0.80%
$1,000,000 and over 0.00% 0.00% 0.00%
The distributors receive any front-end sales charge paid. A portion of the
front-end sales charge may be reallowed to dealers.
Fund Directors and certain other affiliated persons of the Fund are
exempt from the sales charge since the distribution costs are minimal to persons
already familiar with the Fund. Other groups (e.g., group retirement plans) are
exempt due to economies of scale in distribution. See Exhibit A to the
Prospectus.
PORTFOLIO transactions
----------------------
Fund transactions are undertaken on the basis of their desirability from an
investment standpoint. The Fund's Advisor and Subadvisors make investment
decisions and the choice of brokers and dealers under the direction and
supervision of the Fund's Board of Directors.
Broker-dealers who execute portfolio transactions on behalf of the Fund are
selected on the basis of their execution capability and trading expertise
considering, among other factors, the overall reasonableness of the brokerage
commissions, current market conditions, size and timing of the order, difficulty
of execution, per share price, market familiarity, reliability, integrity, and
financial condition, subject to the Advisor/Subadvisors obligation to seek best
execution. The Advisor or Subadvisors may also consider sales of Fund shares as
a factor in the selection of brokers, again subject to best execution (i.e., the
fund will not "pay up" for such transactions).
While the Fund's Advisor and Subadvisors select brokers primarily on the
basis of best execution, in some cases they may direct transactions to brokers
based on the quality and amount of the research and research-related services
which the brokers provide to them. These research services include advice,
either directly or through publications or writings, as to the value of
securities, the advisability of investing in, purchasing or selling securities,
and the availability of securities or purchasers or sellers of securities;
furnishing of analyses and reports concerning issuers, securities or industries;
providing information on economic factors and trends; assisting in determining
portfolio strategy; providing computer software used in security analyses;
providing portfolio performance evaluation and technical market analyses; and
providing other services relevant to the investment decision making process.
Other such services are designed primarily to assist the Advisor in monitoring
the investment activities of the Subadvisors of the Fund. Such services include
portfolio attribution systems, return-based style analysis, and trade-execution
analysis. The Advisor or Subadvisors may also direct selling concessions and/or
discounts in fixed-price offerings for research services.
If, in the judgment of the Advisor or Subadvisors, the Fund or other
accounts managed by them will be benefited by supplemental research services,
they are authorized to pay brokerage commissions to a broker furnishing such
services which are in excess of commissions which another broker may have
charged for effecting the same transaction. It is the policy of the Advisor
that such research services will be used for the benefit of the Fund as well as
other Calvert Group funds and managed accounts.
PERSONAL SECURITIES TRANSACTIONS
--------------------------------
The Fund, its Advisor, and principal underwriters have adopted a Code of
Ethics pursuant to Rule 17j-1 of the Investment Company Act of 1940. The Code
of Ethics is deigned to protect the public from abusive trading practices and to
maintain ethical standards for access persons as defined in the rule when
dealing with the public. The Code of Ethics permits the Fund's investment
personnel to invest in securities that maybe purchased or held by the Fund. The
Code of Ethics contains certain conditions such as preclearance and restrictions
on use of material information.
independent accountants and custodians
--------------------------------------
Arthur Andersen LLP has been selected by the Board of Directors to serve as
independent accountants for fiscal year 2001. State Street Bank & Trust Company,
N.A., 225 Franklin Street, Boston, MA 02110, serves as custodian of the Fund's
investments. Allfirst Financial, Inc., 25 South Charles Street, Baltimore,
Maryland 21203 also serves as custodian of certain of the Fund's cash assets.
The custodians have no part in deciding the Fund's investment policies or the
choice of securities that are to be purchased or sold for the Fund.
general information
-------------------
The Fund is a series of Calvert Impact Fund, Inc., an open-end management
investment company organized as a Maryland Corporation on August 10, 2000. The
Fund is non-diversified. Each share represents an equal proportionate interest
with each other share and is entitled to such dividends and distributions out of
the income belonging to such class as declared by the Board. The Fund offers one
class of shares: Class A. Upon any liquidation of the Fund, shareholders are
entitled to share pro rata in the net assets available for distribution.
The Fund is not required to hold annual shareholder meetings, but special
meetings may be called for certain purposes such as electing Directors, changing
fundamental policies, or approving a management contract.
------
appendix
--------
CORPORATE BOND AND COMMERCIAL PAPER RATINGS
Corporate Bonds:
Description of Moody's Investors Service Inc.'s/Standard & Poor's bond ratings:
Aaa/AAA: Best quality. These bonds carry the smallest degree of investment
risk and are generally referred to as "gilt edge." Interest payments are
protected by a large or by an exceptionally stable margin and principal is
secure. This rating indicates an extremely strong capacity to pay principal and
interest.
Aa/AA: Bonds rated AA also qualify as high-quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority of
instances they differ from AAA issues only in small degree. They are rated lower
than the best bonds because margins of protection may not be as large as in Aaa
securities, fluctuation of protective elements may be of greater amplitude, or
there may be other elements present which make long-term risks appear somewhat
larger than in Aaa securities.
A/A: Upper-medium grade obligations. Factors giving security to principal
and interest are considered adequate, but elements may be present which make the
bond somewhat more susceptible to the adverse effects of circumstances and
economic conditions.
Baa/BBB: Medium grade obligations; adequate capacity to pay principal and
interest. Whereas they normally exhibit adequate protection parameters, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity to pay principal and interest for bonds in this category than
for bonds in higher rated categories.
Ba/BB, B/B, Caa/CCC, Ca/CC: Debt rated in these categories is regarded as
predominantly speculative with respect to capacity to pay interest and repay
principal. The higher the degree of speculation, the lower the rating. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposure to adverse
conditions.
C/C: This rating is only for income bonds on which no interest is being
paid.
D: Debt in default; payment of interest and/or principal is in arrears.
Commercial Paper:
MOODY'S INVESTORS SERVICE, INC.:
The Prime rating is the highest commercial paper rating assigned by
Moody's. Among the factors considered by Moody's in assigning ratings are the
following: (1) evaluation of the management of the issuer; (2) economic
evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks which may be inherent in certain areas; (3) evaluation of
the issuer's products in relation to competition and customer acceptance; (4)
liquidity; (5) amount and quality of long-term debt; (6) trend of earnings over
a period of ten years; (7) financial strength of a parent company and the
relationships which exist with the issuer; and (8) recognition by management of
obligations which may be present or may arise as a result of public interest
questions and preparations to meet such obligations. Issuers within this Prime
category may be given ratings 1, 2, or 3, depending on the relative strengths of
these factors.
STANDARD & POOR'S CORPORATION:
Commercial paper rated A by Standard & Poor's has the following
characteristics: (i) liquidity ratios are adequate to meet cash requirements;
(ii) long-term senior debt rating should be A or better, although in some cases
BBB credits may be allowed if other factors outweigh the BBB; (iii) the issuer
should have access to at least two additional channels of borrowing; (iv) basic
earnings and cash flow should have an upward trend with allowances made for
unusual circumstances; and (v) typically the issuer's industry should be well
established and the issuer should have a strong position within its industry and
the reliability and quality of management should be unquestioned. Issuers rated
A are further referred to by use of numbers 1, 2 and 3 to denote the relative
strength within this highest classification.
The Fund may also rely on ratings by any other NRSRO, such as Fitch
International Rating Agency or Thompson's Bankwatch.
LETTER OF INTENT
Date
Calvert Distributors, Inc.
4550 Montgomery Avenue
Bethesda, MD 20814
Ladies and Gentlemen:
By signing this Letter of Intent, or affirmatively marking the Letter of
Intent option on my Fund Account Application Form, I agree to be bound by the
terms and conditions applicable to Letters of Intent appearing in the Prospectus
and the Statement of Additional Information for the Fund and the provisions
described below as they may be amended from time to time by the Fund. Such
amendments will apply automatically to existing Letters of Intent.
I intend to invest in the shares of: (Fund or Portfolio name)
during the thirteen (13) month period from the date of my first purchase
pursuant to this Letter (which cannot be more than ninety (90) days prior to the
date of this Letter or my Fund Account Application Form, whichever is
applicable), an aggregate amount (excluding any reinvestments of distributions)
of at least fifty thousand dollars ($50,000) which, together with my current
holdings of the Fund (at public offering price on date of this Letter or my Fund
Account Application Form, whichever is applicable), will equal or exceed the
amount checked below:
__ $50,000 __ $100,000 __ $250,000 __ $500,000 __ $1,000,000
Subject to the conditions specified below, including the terms of escrow,
to which I hereby agree, each purchase occurring after the date of this Letter
will be made at the public offering price applicable to a single transaction of
the dollar amount specified above, as described in the Fund's prospectus. No
portion of the sales charge imposed on purchases made prior to the date of this
Letter will be refunded.
I am making no commitment to purchase shares, but if my purchases within
thirteen months from the date of my first purchase do not aggregate the minimum
amount specified above, I will pay the increased amount of sales charges
prescribed in the terms of escrow described below. I understand that 4.75% of
the minimum dollar amount specified above will be held in escrow in the form of
shares (computed to the nearest full share). These shares will be held subject
to the terms of escrow described below.
From the initial purchase (or subsequent purchases if necessary), 4.75% of
the dollar amount specified in this Letter shall be held in escrow in shares of
the Fund by the Fund's transfer agent. For example, if the minimum amount
specified under the Letter is $50,000, the escrow shall be shares valued in the
amount of $2,375 (computed at the public offering price adjusted for a $50,000
purchase). All dividends and any capital gains distribution on the escrowed
shares will be credited to my account.
If the total minimum investment specified under the Letter is completed
within a thirteen month period, escrowed shares will be promptly released to me.
However, shares disposed of prior to completion of the purchase requirement
under the Letter will be deducted from the amount required to complete the
investment commitment.
Upon expiration of this Letter, the total purchases pursuant to the Letter
are less than the amount specified in the Letter as the intended aggregate
purchases, Calvert Distributors, Inc. ("CDI") will bill me for an amount equal
to the difference between the lower load I paid and the dollar amount of sales
charges which I would have paid if the total amount purchased had been made at a
single time. If not paid by the investor within 20 days, CDI will debit the
difference from my account. Full shares, if any, remaining in escrow after the
aforementioned adjustment will be released and, upon request, remitted to me.
I irrevocably constitute and appoint CDI as my attorney-in-fact, with full
power of substitution, to surrender for redemption any or all escrowed shares on
the books of the Fund. This power of attorney is coupled with an interest.
The commission allowed by Calvert Distributors, Inc. to the broker-dealer
named herein shall be at the rate applicable to the minimum amount of my
specified intended purchases.
The Letter may be revised upward by me at any time during the
thirteen-month period, and such a revision will be treated as a new Letter,
except that the thirteen-month period during which the purchase must be made
will remain unchanged and there will be no retroactive reduction of the sales
charges paid on prior purchases.
In determining the total amount of purchases made hereunder, shares
disposed of prior to termination of this Letter will be deducted. My
broker-dealer shall refer to this Letter of Intent in placing any future
purchase orders for me while this Letter is in effect.
Dealer Name of Investor(s)
By
Authorized Signer Address
Date Signature of Investor(s)
Date Signature of Investor(s)
INVESTMENT ADVISOR
Calvert Asset Management Company, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
Shareholder ServiceS TRANSFER AGENT
Calvert Shareholder Services, Inc. National Financial Data Services, Inc.
4550 Montgomery Avenue 330 West 9th Street
Suite 1000N Kansas City, Missouri 64105
Bethesda, Maryland 20814
PRINCIPAL UNDERWRITERS INDEPENDENT accountants
Calvert Distributors, Inc. Arthur Andersen LLP
4550 Montgomery Avenue 1601 Market Street
Suite 1000N Philadelphia, PA 19103
Bethesda, Maryland 20814
BOE SECURITIES, INC.
225 South 15th Street
Suite 928
Philadelphia, PA 19102
CALVERT NEW AFRICA FUND
THE RISA FUND
CALVERT SOUTH AFRICA FUND
PROFORMA STATEMENTS OF ASSETS AND LIABILITIES Calvert
MARCH 31, 2000 (UNAUDITED) South Africa
Calvert The Calvert Fund
New Africa RISA South Africa Proforma Proforma
Fund Fund Fund Adjustments Combined
ASSETS
Investments in securities,
at value - $5,128,279 $1,091,757 $0 - $6,220,036
(Cost $5,781,152, $1,117,552, and $0 respectively.
Foreign Currency - 88,631 0 - 88,631
Cash 6,435 58,960 0 - 65,395
Receivable for securities sold
337,506 166,699 0 - 504,205
Interest and dividends receivable
13,247 3,107 0 - 16,354
Receivable for shares sold
139 - 0 - 139
Receivable from Advisor
- 53,132 0 - 53,132
Other assets 11,937 10,053 0 - 21,990
Deferred offering costs
- 20,467 0 - 20,467
Total assets 5,497,543 1,492,806 0 - 6,990,349
LIABILITIES
Payable for securities purchased
241,070 275,929 0 - 516,999
Payable to Bank
103,092 - 0 - 103,092
Payable for shares redeemed
1,163 - 0 - 1,163
Payable to Calvert-Sloan Advisors, LLC
22,046 - 0 - 22,046
Payable to Calvert Shareholder Services, Inc.
405 - 0 - 405
Payable to Calvert Distributors Inc.
1,195 - 0 - 1,195
Accrued expenses and other liabilities
34,512 63,951 0 - 98,463
Total liabilities
403,483 339,880 0 - 743,363
NET ASSETS $5,094,060 $1,152,926 $0 - $6,246,986
NET ASSETS
Paid-in capital applicable to the following shares of common
stock, $0.01 par value with 250,000,000 shares authorized
for Calvert New Africa Class A, B, and C combined:
Class A: 721,127 shares outstanding,
$8,599,543
Class B: 12,174 shares outstanding,
115,760
Class C: 4,330 shares outstanding,
36,430
Paid-in capital, The RISA Fund, 98,821 shares outstanding, $0.001 par value,
unlimited authorization $1,135,000
Paid-in capital, Calvert South Africa Fund, 0 shares outstanding
$0 - $9,886,733
Undistributed net investment income (loss)
(11,098) 5,735 0 - (5,363)
Accumulated net realized gain (loss) on investments and foreign currencies
(2,984,935) 39,567 0 - (2,945,368)
Net unrealized appreciation (depreciation) on investments and assets and
liabilities in foreign currencies
(661,640) (27,376) 0 - (689,016)
NET ASSETS $5,094,060 $1,152,926 $0 - $6,246,986
NET ASSETS - CLASS A
$4,980,860 $1,152,926 $0 $6,246,986
SHARES OUTSTANDING - CLASS A
721,127 (1) 98,821 (1) 0(1) (419,986) 416,466 (1)
NET ASSET VALUE - CLASS A
$6.91 $11.67 $15.00 $15.00 (4)
MAXIMUM SALES CHARGE - CLASS A
0.34 (3) N/A 0.75 (3) 0.75 (3)
OFFERING PRICE - CLASS A
$7.25 $11.67 $15.75 $15.75
NET ASSETS - CLASS B
$83,114 N/A N/A N/A
SHARES OUTSTANDING - CLASS B
12,174 (1,2) N/A N/A N/A
NET ASSET VALUE - CLASS B
$6.83 N/A N/A N/A
NET ASSETS - CLASS C
$30,086 N/A N/A N/A
SHARES OUTSTANDING - CLASS C
4,330 (1,2) N/A N/A N/A
NET ASSET VALUE - CLASS C
$6.95 N/A N/A N/A
(1) The proforma combined shares outstanding consists of 721,127 shares of the
Calvert New Africa Fund Class A, 12,174 shares of Calvert New Africa
Class B, 4,330 shares of Calvert New Africa Fund Class C, 98,821 shares of The
RISA Fund, and 416,466 shares issued to shareholders of the new
combined entity, the Calvert South Africa Fund.
(2) The Calvert New Africa Fund's Class B & C shareholders exchanged into Class
A of the Calvert South Africa Fund.
(3) The maximum sales charge for the Calvert New Africa Fund and the new
Calvert South Africa Fund is 4.75%.
(4) The Calvert South Africa Fund's net asset value has been established at
$15.00 per share.
N/A - Not Applicable
See Notes to Proforma Financial Statements.
CALVERT NEW AFRICA FUND
THE RISA FUND
CALVERT SOUTH AFRICA FUND
PROFORMA STATEMENTS OF ASSETS AND LIABILITIES Calvet
SEPTEMBER 30, 2000 (UNAUDITED) South Africa
Calvert The Calvert Fund
New Africa RISA South Africa Proforma Proforma
Fund Fund Fund Adjustments Combined
ASSETS
Investments in securities, at value -
$4,146,360 $882,018 $0 - $5,028,378
(Cost $5,186,009, $966,129, and $0 respectively.
Foreign Currency - - 0 - 0
Cash 0 - 0 - 0
Receivable for securities sold
90,139 - 0 - 90,139
Interest and dividends receivable
16,720 6,029 0 - 22,749
Receivable for shares sold
145 - 0 - 145
Receivable from Advisor
- 116,963 0 - 116,963
Other assets 14,024 13 0 - 14,037
Deferred offering costs
- - 0 - 0
Total assets 4,267,388 1,005,023 0 - 5,272,411
LIABILITIES
Payable for securities purchased
11,035 - 0 - 11,035
Payable to Bank 76,530 - 0 - 76,530
Payable for shares redeemed
2,293 - 0 - 2,293
Payable to Calvert-Sloan Advisors, LLC
13,915 - 0 - 13,915
Payable to Calvert Shareholder Services, Inc.
343 - 0 - 343
Payable to Calvert Distributors Inc.
960 - 0 - 960
Accrued expenses and other liabilities
19,086 54,000 0 - 73,086
Total liabilities
124,162 54,000 0 - 178,162
NET ASSETS $4,143,226 $951,023 $0 - $5,094,249
NET ASSETS
Paid-in capital applicable to the following shares of common
stock, $0.01 par value with 250,000,000 shares authorized
for Calvert New Africa Class A, B, and C combined:
Class A: 712,506 shares outstanding,
$8,543,951
Class B: 23,456 shares outstanding,
178,578
Class C: 3,713 shares outstanding,
31,558
Paid-in capital, The RISA Fund, 91,217 shares outstanding,
$0.001 par value, unlimited authorization
$1,015,882
Paid-in capital, Calvert South Africa Fund, 0 shares outstanding
$0 - $9,769,969
Undistributed net investment income (loss)
(5,354) 33,416 0 - 28,062
Accumulated net realized gain (loss) on investments and foreign currencies
(3,551,863) (14,032) 0 - (3,565,895)
Net unrealized appreciation (depreciation) on investments and assets and
liabilities in foreign currencies
(1,053,644) (84,243) 0 - (1,137,887)
NET ASSETS $4,143,226 $951,023 $0 - $5,094,249
NET ASSETS - CLASS A
$3,993,075 $951,023 $0 $5,094,249
SHARES OUTSTANDING - CLASS A
712,506 (1) 91,217 (1) 0(1) (491,275) 339,617 (1)
NET ASSET VALUE - CLASS A
$5.60 $10.43 $15.00 $15.00 (4)
MAXIMUM SALES CHARGE - CLASS A
0.28 (3) N/A 0.75(3) 0.75 (3)
OFFERING PRICE - CLASS A
$5.88 $10.43 $15.75 $15.75
NET ASSETS - CLASS B
$129,285 N/A N/A N/A
SHARES OUTSTANDING - CLASS B
23,456 (1,2) N/A N/A N/A
NET ASSET VALUE - CLASS B
$5.51 N/A N/A N/A
NET ASSETS - CLASS C
$20,866 N/A N/A N/A
SHARES OUTSTANDING - CLASS C
3,713 (1,2) N/A N/A N/A
NET ASSET VALUE - CLASS C
$5.62 N/A N/A N/A
(1) The proforma combined shares outstanding consists of 712,506 shares of the
Calvert New Africa Fund Class A, 23,456 shares of Calvert New Africa
Class B, 3,713 shares of Calvert New Africa Fund Class C, 91,217
shares of The RISA Fund, and 339,617 shares issued to shareholders
of the new combined entity, the Calvert South Africa Fund.
(2) The Calvert New Africa Fund's Class B & C shareholders exchanged into Class
A of the Calvert South Africa Fund.
(3) The maximum sales charge for the Calvert New Africa Fund and the new
Calvert South Africa Fund is 4.75%.
(4) The Calvert South Africa Fund's net asset value has been established at
$15.00 per share.
N/A - Not Applicable
See Notes to Proforma Financial Statements.
CALVERT NEW AFRICA FUND
THE RISA FUND
CALVERT SOUTH AFRICA FUND
PROFORMA STATEMENTS OF OPERATIONS
YEAR ENDED MARCH 31, 2000 (UNAUDITED) Calvert
South Africa
Calvert The Calvert Fund The
New Africa RISA South Africa Proforma Proforma RISA
Fund* Fund** Fund Adjustments Combined Fund
NET INVESTMENT INCOME
Investment Income:
Dividend income
$258,071 $7,668 $0 - $265,739 $3,834
Interest income
11,081 17,240 0 - 28,321 8,620
Total investment income
269,152 24,908 0 0 294,060 12,454
Expenses: Basis
Points Dollars
Investment advisory fee
96,961 8,398 0 (30,432)1 74,927 105 74,927 4,199
Interest
108,102 - 0 (108,102)2 0 0 0 -
Administrative Service Fee
0 0 0 14,272 3 14,272 20 14,272 0
Transfer agency fees and expenses
32,899 4,340 0 581 4 37,820 53 37,820 2,170
Distribution Plan expenses:
Class A
15,918 1,680 0 242 5 17,840 25 17,840 840
Class B
807 - - (807)5 0 0 0 -
Class C
161 - - (161)5 0 0 0 -
Insurance
- 18,544 0 (18,544)6 0 0 0 9,272
Directors' fees and expenses
27,692 11,522 0 (32,078)7 7,136 10 7,136 5,761
Accounting fees
18,100 23,322 0 (39,281)8 2,141 3 2,141 11,661
Custodian fees
34,681 27,158 0 (31,868)9 29,971 42 29,971 13,579
Registration fees
36,575 14,404 0 7,536 13 58,515 82 58,515 7,202
Reports to shareholders
11,988 7,682 0 (6,825)13 12,845 18 12,845 3,841
Professional fees
32,439 52,814 0 (74,549)10 10,704 15 10,704 26,407
Organizational expenses
14,068 39,006 0 (53,074)11 0 0 0 19,503
Miscellaneous
4,173 7,202 0 (10,661)13 714 1 714 3,601
Total expenses
434,564 216,072 0 (383,753) 266,883 374 266,883 108,036
266,883
Reimbursement from Advisor:
Class A
(79,017) (202,634) 0 188,210 12 (93,441) -131 (93,441)(101,317)
Class B
(11,173) - - 11,173 12 0 0 0 -
Class C
(10,639) - - 10,639 12 0 0 0 -
Fees paid indirectly
(12,885) - 0 0 (12,885) -18 (12,885) -
Net expenses
320,850 13,438 0 (173,730) 160,558 225 160,558 6,719
160,558
NET INVESTMENT INCOME (LOSS)
(51,698) 11,470 0 173,730 133,502 5,735
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments
(1,081,308) 48,953 0 - (1,032,355) 48,953
Foreign currency transactions
(50,849) (9,386) 0 - (60,235) (9,386)
(1,132,157) 39,567 0 0 (1,092,590) 39,567
Change in unrealized appreciation or (depreciation) on:
Investments and foreign currencies
(1,125,362) (25,795) 0 - (1,151,157) (25,795)
Assets and liabilities denominated in foreign currencies
(9,005) (1,581) 0 - (10,586) (1,581)
(1,134,367) (27,376) 0 0 (1,161,743) (27,376)
NET REALIZED AND UNREALIZED GAIN (LOSS)
(2,266,524) 12,191 0 - (2,254,333) 12,191
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS
($2,318,222) $23,661 $0 - ($2,294,561) $17,926
AVERAGE NET ASSETS - CLASS A
6,367,264 671,840 0 - 7,135,918 671,840
RATIO OF TOTAL EXP TO AVG N/A - CLASS A
6.39% 32.16% 0.00% - 3.74% 32.16%
RATIO OF NET EXP TO AVG N/A - CLASS A
4.95% 2.00% 0.00% - 2.25% 12 2.00%
AVERAGE NET ASSETS - CLASS B
80,729 N/A N/A - N/A
RATIO OF TOTAL EXP TO AVG N/A - CLASS B
19.74% N/A N/A - N/A
RATIO OF NET EXP TO AVG N/A - CLASS B
5.70% N/A N/A - N/A
AVERAGE NET ASSETS - CLASS C
16,086 N/A N/A - N/A
RATIO OF TOTAL EXP TO AVG N/A - CLASS C
72.04% N/A N/A - N/A
RATIO OF NET EXP TO AVG N/A - CLASS C
5.70% N/A N/A - N/A
* For the year ended March 31, 2000.
** For the period from the commencement of operations October 1, 1999 through
March 31, 2000. Since the Fund has only six months of operations, the
income and expense amounts have been restated to reflect the results that could
have been expected for one year.
1 To reflect the change in Investment Advisory Fees. The Fund's advisory
agreement provides for the Fund to pay the Advisor a fee of 1.05% of
the Fund's average daily net assets.
2 To reflect an administrative service fee of 0.20% of the Fund's average daily
net assets.
3 The Advisor has agreed to limit annual fund operating expenses (net of expense
offset arrangements) through September 30, 2002.
4 Proforma adjustments required to reflect the estimated expenses expected to
be incurred for the upcoming fiscal year.
The proforma combined statements of operations presented above does not
necessarily reflect what the results of operations would
have been if the entities had been merged on April 1, 1999. In addition, the
expenses do not include the cost of merging the two funds.
See Notes to Proforma Financial Statements.
CALVERT NEW AFRICA FUND
THE RISA FUND
CALVERT SOUTH AFRICA FUND
PROFORMA STATEMENTS OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 2000 (UNAUDITED)
Calvert
South Africa The
Calvert The Calvert Fund The The RISA
New RISA South Proforma Proforma RISA RISA Fund
Africa Fund **Africa Adjustments Combined Fund Fund Squeeze
Fund * Fund
NET INVESTMENT INCOME
Investment Income:
Dividend income
$77,189 $11,308 $0 - $88,497 $3,834 $15,142 $11,308
Interest income
617 4,557 0 - 5,174 8,620 13,177 4,557
Total investment income
77,806 15,865 0 0 93,671 12,454 28,319 15,865
Expenses: Basis
Points Dollars
Investment advisory fee
32,203 5,942 0 (10,550)1 27,595 4,199 10,141 5,942
105 27,595
Interest
1,264 - 0 (1,264)2 0 - - -
0 0
Administrative Service Fee
0 0 0 5,256 3 5,256 0 0 0
20 5,256
Transfer agency fees and expenses
14,438 29,021 0 (29,530)4 13,929 2,170 31,191 29,021
53 13,929
Distribution Plan expenses:
Class A
5,215 1,188 0 167 5 6,570 840 2,028 1,188
25 6,570
Class B
514 - - (514)5 0 - - -
0 0
Class C
94 - - (94)5 0 - - -
0 0
Insurance
0 19,312 0 (19,312)6 0 - 1,932 1,932
0 0
Directors' fees and expenses
10,859 4,239 0 (12,470)7 2,628 5,761 10,000 4,239
10 2,628
Accounting fees
5,981 102,339 0 (107,532)8 788 11,661 114,000 102,339
3 788
Custodian fees
26,088 (8,176) 0 (6,874)9 11,038 13,579 5,403 (8,176)
42 11,038
Registration fees
14,540 (1,184) 0 8,194 13 21,550 7,202 6,018 (1,184)
82 21,550
Reports to shareholders
4,450 1,186 0 (905)13 4,731 3,841 5,027 1,186
18 4,731
Professional fees
7,102 6,627 0 (9,787)10 3,942 26,407 33,034 6,627
15 3,942
Organizational expenses
- 20,467 0 (20,467)11 0 19,503 39,970 20,467
0 0
Miscellaneous
870 (3,560) 0 2,953 13 263 12,873 9,313 (3,560)
1 263
Total expenses
123,618 177,401 0 (202,728) 98,291 108,036 285,437 177,401
374 98,291
196,044
Reimbursement from Advisor:
Class A
(29,637)(60,653) 0 63,104 12 (27,186)(101,317)(161,970) (60,653)
131 (27,186)
Class B
(5,077) - - 5,077 12 0 - -
0 0
Class C
(4,869) - - 4,869 12 0 - -
0 0
Fee waivers
- (107,241) 0 107,241 12 0 (107,241) (107,241)
0 0
Fees paid indirectly
(11,973) - 0 0 4 (11,973) - - 0
-18 (11,973)
Net expenses
72,062 9,507 0 (22,437) 59,132 6,719 16,226 9,507
225 59,132
117,941
NET INVESTMENT INCOME (LOSS)
5,744 6,358 0 22,437 34,539 5,735 12,093 6,358
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments
(498,005)(62,985) 0 - (560,990) 48,953 (14,032) (62,985)
Foreign currency transactions
(68,923) (9,261) 0 - (78,184) (9,386) (18,647) (9,261)
(566,928)(72,246) 0 0 (639,174) 39,567 (32,679) (72,246)
Change in unrealized appreciation or (depreciation) on:
Investments and foreign currencies
(401,672)(58,316) 0 - (459,988) (25,795) (84,111) (58,316)
Assets and liabilities denominated in foreign currencies
9,668 1,449 0 - 11,117 (1,581) (132) 1,449
(392,004)(56,867) 0 0 (448,871) (27,376) (84,243) (56,867)
NET REALIZED AND UNREALIZED GAIN (LOSS)
(958,932)(129,113) 0 - (1,088,045) 12,191 (116,922) (129,113)
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS
($953,188)($122,755) $0 - ($1,075,943) $17,926 ($104,829) ($122,755)
AVERAGE NET ASSETS - CLASS A
4,172,091 948,122 0 - 5,241,823 671,840 811,280 948,122
RATIO OF TOTAL EXP TO AVG N/A - CLASS A
5.30%(a) 37.32%(a) 0.00%(a) - 3.74%(a) 32.16% 35.18% 37.32%
RATIO OF NET EXP TO AVG N/A - CLASS A
3.33%(a) 2.00%(a) 0.00%(a) - 2.25%(a)3 2.00% 2.00% 2.00%
AVERAGE NET ASSETS - CLASS B
102,746 N/A N/A - N/A
RATIO OF TOTAL EXP TO AVG N/A - CLASS B
14.49%(a) N/A N/A - N/A
RATIO OF NET EXP TO AVG N/A - CLASS B
4.08%(a) N/A N/A - N/A
AVERAGE NET ASSETS - CLASS C
18,864 N/A N/A - N/A
RATIO OF TOTAL EXP TO AVG N/A - CLASS C
56.13%(a) N/A N/A - N/A
RATIO OF NET EXP TO AVG N/A - CLASS C
4.08%(a) N/A N/A - N/A
(a) Annualized
* For the six months ended September 30, 2000.
** For the six months ended September 30, 2000. For comparative purposes, the
period used is the six month interim period from April 1, 2000
through September 30, 2000.
1 To reflect the change in Investment Advisory Fees. The Fund's advisory
agreement provides for the Fund to pay the Advisor a fee of
1.05% of the Fund's average daily net assets.
2 To reflect an administrative service fee of 0.20% of the Fund's average daily
net assets.
3 The Advisor has agreed to limit annual fund operating expenses (net of expense
offset arrangements) through September 30, 2002.
4 Proforma adjustments required to reflect the estimated expenses expected to
be incurred for the upcoming fiscal year.
The proforma combined statements of operations presented above does not
necessarily reflect what the results of operations would
have been if the entities had been merged on April 1, 1999. In addition, the
expenses do not include the cost of merging the two funds.
See Notes to Proforma Financial Statements.
CALVERT NEW AFRICA FUND
THE RISA FUND
CALVERT SOUTH AFRICA FUND
PROFORMA STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2000 (UNAUDITED)
Calvert The Calvert
New Africa RISA South Africa Proforma Proforma
Fund Fund Fund Adjustments Combined
ASSETS
Investments in securities, at value -
$5,128,279 $1,091,757 $0 - $6,220,036
(Cost $5,781,152, $1,117,552, and $0 respectively.
Foreign Currency
- 88,631 0 - 88,631
Cash
6,435 58,960 0 - 65,395
Receivable for securities sold
337,506 166,699 0 - 504,205
Interest and dividends receivable
13,247 3,107 0 - 16,354
Receivable for shares sold
139 - 0 - 139
Receivable from Advisor
- 53,132 0 - 53,132
Other assets
11,937 10,053 0 - 21,990
Deferred offering costs
- 20,467 0 - 20,467
Total assets
5,497,543 1,492,806 0 - 6,990,349
LIABILITIES
Payable for securities purchased
241,070 275,929 0 - 516,999
Payable to Bank
103,092 - 0 - 103,092
Payable for shares redeemed
1,163 - 0 - 1,163
Payable to Calvert-Sloan Advisors, LLC
22,046 - 0 - 22,046
Payable to Calvert Shareholder Services, Inc.
405 - 0 - 405
Payable to Calvert Distributors Inc.
1,195 - 0 - 1,195
Accrued expenses and other liabilities
34,512 63,951 0 - 98,463
Total liabilities
403,483 339,880 0 - 743,363
NET ASSETS
$5,094,060 $1,152,926 $0 - $6,246,986
NET ASSETS
Paid-in capital applicable to the following shares of common
stock, $0.01 par value with 250,000,000 shares authorized
for Calvert New Africa Class A, B, and C combined:
Class A: 721,127 shares outstanding,
$8,599,543
Class B: 12,174 shares outstanding,
115,760
Class C: 4,330 shares outstanding,
36,430
Paid-in capital, The RISA Fund, 98,821 shares outstanding,
$0.001 par value, unlimited authorization
$1,135,000
Paid-in capital, Calvert South Africa Fund, 0 shares outstanding
$0 - $9,886,733
Undistributed net investment income (loss)
(11,098) 5,735 0 - (5,363)
Accumulated net realized gain (loss) on investments
and foreign currencies
(2,984,935) 39,567 0 - (2,945,368)
Net unrealized appreciation (depreciation) on investments
and assets and liabilities in foreign currencies
(661,640) (27,376) 0 - (689,016)
NET ASSETS
$5,094,060 $1,152,926 $0 - $6,246,986
NET ASSETS - CLASS A
$4,980,860 $1,152,926 $0 $6,246,986
SHARES OUTSTANDING - CLASS A
721,127 (1) 98,821 (1) 0(1) (419,986) 416,466 (1)
NET ASSET VALUE - CLASS A
$6.91 $11.67 $15.00 $15.00 (4)
MAXIMUM SALES CHARGE - CLASS A
0.34 (3) N/A 0.75(3) 0.75 (3)
OFFERING PRICE - CLASS A
$7.25 $11.67 $15.75 $15.75
NET ASSETS - CLASS B
$83,114 N/A N/A N/A
SHARES OUTSTANDING - CLASS B
12,174 (1,2) N/A N/A N/A
NET ASSET VALUE - CLASS B
$6.83 N/A N/A N/A
NET ASSETS - CLASS C
$30,086 N/A N/A N/A
SHARES OUTSTANDING - CLASS C
4,330 (1,2) N/A N/A N/A
NET ASSET VALUE - CLASS C
$6.95 N/A N/A N/A
(1) The proforma combined shares outstanding consists of 721,127 shares of the
Calvert New Africa Fund Class A, 12,174 shares of Calvert New
Africa Class B, 4,330 shares of Calvert New Africa Fund Class C, 98,821
shares of The RISA Fund, and 416,466 shares issued to shareholders
of the new combined entity, the Calvert South Africa Fund.
(2) The Calvert New Africa Fund's Class B & C shareholders exchanged into Class
A of the Calvert South Africa Fund.
(3) The maximum sales charge for the Calvert New Africa Fund and the new
Calvert South Africa Fund is 4.75%.
(4) The Calvert South Africa Fund's net asset value has been established at
$15.00 per share.
N/A - Not Applicable
See Notes to Proforma Financial Statements.
CALVERT NEW AFRICA FUND
THE RISA FUND
CALVERT SOUTH AFRICA FUND
PROFORMA STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2000 (UNAUDITED)
Calvert The Calvert
New Africa RISA South Africa Proforma Proforma
Fund Fund Fund Adjustments Combined
ASSETS
Investments in securities, at value -
$4,146,360 $882,018 $0 - $5,028,378
(Cost $5,186,009, $966,129, and $0 respectively.
Foreign Currency
- - 0 - 0
Cash 0 - 0 - 0
Receivable for securities sold
90,139 - 0 - 90,139
Interest and dividends receivable
16,720 6,029 0 - 22,749
Receivable for shares sold
145 - 0 - 145
Receivable from Advisor
- 116,963 0 - 116,963
Other assets
14,024 13 0 - 14,037
Deferred offering costs
- - 0 - 0
Total assets
4,267,388 1,005,023 0 - 5,272,411
LIABILITIES
Payable for securities purchased
11,035 - 0 - 11,035
Payable to Bank
76,530 - 0 - 76,530
Payable for shares redeemed
2,293 - 0 - 2,293
Payable to Calvert-Sloan Advisors, LLC
13,915 - 0 - 13,915
Payable to Calvert Shareholder Services, Inc.
343 - 0 - 343
Payable to Calvert Distributors Inc.
960 - 0 - 960
Accrued expenses and other liabilities
19,086 54,000 0 - 73,086
Total liabilities
124,162 54,000 0 - 178,162
NET ASSETS
$4,143,226 $951,023 $0 - $5,094,249
NET ASSETS
Paid-in capital applicable to the following shares of common
stock, $0.01 par value with 250,000,000 shares authorized
for Calvert New Africa Class A, B, and C combined:
Class A: 712,506 shares outstanding,
$8,543,951
Class B: 23,456 shares outstanding,
178,578
Class C: 3,713 shares outstanding,
31,558
Paid-in capital, The RISA Fund, 91,217 shares outstanding,
$0.001 par value, unlimited authorization
$1,015,882
Paid-in capital, Calvert South Africa Fund, 0 shares outstanding
$0 - $9,769,969
Undistributed net investment income (loss)
(5,354) 33,416 0 - 28,062
Accumulated net realized gain (loss) on investments
and foreign currencies
(3,551,863) (14,032) 0 - (3,565,895)
Net unrealized appreciation (depreciation) on investments
and assets and liabilities in foreign currencies
(1,053,644) (84,243) 0 - (1,137,887)
NET ASSETS
$4,143,226 $951,023 $0 - $5,094,249
NET ASSETS - CLASS A
$3,993,075 $951,023 $0 $5,094,249
SHARES OUTSTANDING - CLASS A
712,506 (1) 91,217 (1) 0 (1) (491,275) 339,617 (1)
NET ASSET VALUE - CLASS A
$5.60 $10.43 $15.00 $15.00 (4)
MAXIMUM SALES CHARGE - CLASS A
0.28 (3) N/A 0.75 (3) 0.75 (3)
OFFERING PRICE - CLASS A
$5.88 $10.43 $15.75 $15.75
NET ASSETS - CLASS B
$129,285 N/A N/A N/A
SHARES OUTSTANDING - CLASS B
23,456 (1,2) N/A N/A N/A
NET ASSET VALUE - CLASS B
$5.51 N/A N/A N/A
NET ASSETS - CLASS C
$20,866 N/A N/A N/A
SHARES OUTSTANDING - CLASS C
3,713 (1,2) N/A N/A N/A
NET ASSET VALUE - CLASS C
$5.62 N/A N/A N/A
(1) The proforma combined shares outstanding consists of 712,506 shares of the
Calvert New Africa Fund Class A, 23,456 shares of Calvert New
Africa Class B, 3,713 shares of Calvert New Africa Fund Class C, 91,217
shares of The RISA Fund, and 339,617 shares issued to shareholders
of the new combined entity, the Calvert South Africa Fund.
(2) The Calvert New Africa Fund's Class B & C shareholders exchanged into Class
A of the Calvert South Africa Fund.
(3) The maximum sales charge for the Calvert New Africa Fund and the new
Calvert South Africa Fund is 4.75%.
(4) The Calvert South Africa Fund's net asset value has been established at
$15.00 per share.
N/A - Not Applicable
See Notes to Proforma Financial Statements.
CALVERT NEW AFRICA FUND
THE RISA FUND
CALVERT SOUTH AFRICA FUND
PROFORMA STATEMENTS OF OPERATIONS
YEAR ENDED MARCH 31, 2000 (UNAUDITED)
Calvert The Calvert The
New RISA South Proforma Proforma RISA
Africa Fund** Africa Adjustments Combined Fund
Fund* Fund
Investment Income:
Dividend income
$258,071 $7,668 $0 - $265,739 $3,834
Interest income
11,081 17,240 0 - 28,321 8,620
Total investment income
269,152 24,908 0 0 294,060 12,454
Expenses: Basis Dollars
Points
Investment advisory fee
96,961 8,398 0 (30,432)1 74,927 4,199
105 74,927
Interest
108,102 - 0 (108,102) 0 -
0 0
Administrative Service Fee
0 0 0 14,272 2 14,272 0
20 14,272
Transfer agency fees and expenses
32,899 4,340 0 581 37,820 2,170
53 37,820
Distribution Plan expenses:
Class A
15,918 1,680 0 242 17,840 840
25 17,840
Class B
807 - - (807) 0 -
0 0
Class C
161 - - (161) 0 -
0 0
Insurance
- 18,544 0 (18,544) 0 9,272
0 0
Directors' fees and expenses
27,692 11,522 0 (32,078) 7,136 5,761
10 7,136
Accounting fees
18,100 23,322 0 (39,281) 2,141 11,661
3 2,141
Custodian fees
34,681 27,158 0 (31,868) 29,971 13,579
42 29,971
Registration fees
36,575 14,404 0 7,536 58,515 7,202
82 58,515
Reports to shareholders
11,988 7,682 0 (6,825) 12,845 3,841
18 12,845
Professional fees
32,439 52,814 0 (74,549) 10,704 26,407
15 10,704
Organizational expenses
14,068 39,006 0 (53,074) 0 19,503
0 0
Miscellaneous
4,173 7,202 0 (10,661) 714 3,601
1 714
Total expenses
434,564 216,072 0 (383,753) 266,883 108,036
374 266,883
266,883
Reimbursement from Advisor:
Class A
(79,017) (202,634) 0 188,210 (93,441) (101,317)
-131 (93,441)
Class B
(11,173) - - 11,173 0 -
0 0
Class C
(10,639) - - 10,639 0 -
0 0
Fees paid indirectly
(12,885) - 0 0 (12,885) -
-18 (12,885)
Net expenses
320,850 13,438 0 (173,730) 160,558 6,719
225 160,558
160,558
NET INVESTMENT INCOME (LOSS)
(51,698) 11,470 0 173,730 133,502 5,735
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments
(1,081,308) 48,953 0 - (1,032,355) 48,953
Foreign currency transactions
(50,849) (9,386) 0 - (60,235) (9,386)
(1,132,157) 39,567 0 0 (1,092,590) 39,567
Change in unrealized appreciation or (depreciation) on:
Investments and foreign currencies
(1,125,362) (25,795) 0 - (1,151,157) (25,795)
Assets and liabilities denominated in foreign currencies
(9,005) (1,581) 0 - (10,586) (1,581)
(1,134,367) (27,376) 0 0 (1,161,743) (27,376)
NET REALIZED AND UNREALIZED GAIN (LOSS)
(2,266,524) 12,191 0 - (2,254,333) 12,191
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS
($2,318,222) $23,661 $0 - ($2,294,561) $17,926
AVERAGE NET ASSETS - CLASS A
6,367,264 671,840 0 - 7,135,918 671,840
RATIO OF TOTAL EXP TO AVG N/A - CLASS A
6.39% 32.16% 0.00% - 3.74% 32.16%
RATIO OF NET EXP TO AVG N/A - CLASS A
4.95% 2.00% 0.00% - 2.25% 3 2.00%
AVERAGE NET ASSETS - CLASS B
80,729 N/A N/A - N/A
RATIO OF TOTAL EXP TO AVG N/A - CLASS B
19.74% N/A N/A - N/A
RATIO OF NET EXP TO AVG N/A - CLASS B
5.70% N/A N/A - N/A
AVERAGE NET ASSETS - CLASS C
16,086 N/A N/A - N/A
RATIO OF TOTAL EXP TO AVG N/A - CLASS C
72.04% N/A N/A - N/A
RATIO OF NET EXP TO AVG N/A - CLASS C
5.70% N/A N/A - N/A
* For the year ended March 31, 2000.
** For the period from the commencement of operations October 1, 1999 through
March 31, 2000. Since the Fund has only six months of
operations, the income and expense amounts have been restated to reflect the
results that could have been expected for one year.
1 To reflect the change in Investment Advisory Fees. The Fund's advisory
agreement provides for the Fund to pay the Advisor a fee of
1.05% of the Fund's average daily net assets.
2 To reflect an administrative service fee of 0.20% of the Fund's average daily
net assets.
3 The Advisor has agreed to limit annual fund operating expenses (net of expense
offset arrangements) through September 30, 2002.
The proforma combined statements of operations presented above does not
necessarily reflect what the results of operations would
have been if the entities had been merged on April 1, 1999. In addition, the
expenses do not include the cost of merging the two funds.
See Notes to Proforma Financial Statements.
CALVERT NEW AFRICA FUND
THE RISA FUND
CALVERT SOUTH AFRICA FUND
PROFORMA STATEMENTS OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 2000 (UNAUDITED)
Calvert The Calvert The
New RISA South Proforma Proforma The The RISA
Africa Fund** Africa RISA RISA Fund
Fund* Fund Adjustments Combined Fund Fund Squeeze
NET INVESTMENT INCOME
Investment Income:
Dividend income
$77,189 $11,308 $0 - $88,497 $3,834 $15,142 $11,308
Interest income
617 4,557 0 - 5,174 8,620 13,177 4,557
Total investment income
77,806 15,865 0 0 93,671 12,454 28,319 15,865
Expenses: Basis
Points Dollars
Investment advisory fee
32,203 5,942 0 (10,550) 1 27,595 4,199 10,141 5,942
105 27,595
Interest
1,264 - 0 (1,264) 0 - - -
0 0
Administrative Service Fee
0 0 0 5,256 2 5,256 0 0 0
20 5,256
Transfer agency fees and expenses
14,438 29,021 0 (29,530) 13,929 2,170 31,191 29,021
53 13,929
Distribution Plan expenses:
Class A
5,215 1,188 0 167 6,570 840 2,028 1,188
25 6,570
Class B
514 - - (514) 0 - - -
0 0
Class C
94 - - (94) 0 - - -
0 0
Insurance
0 19,312 0 (19,312) 0 - 19,312 19,312
0 0
Directors' fees and expenses
10,859 4,239 0 (12,470) 2,628 5,761 10,000 4,239
10 2,628
Accounting fees
5,981 102,339 0 (107,532) 788 11,661 114,000 102,339
3 788
Custodian fees
26,088 (8,176) 0 (6,874) 11,038 13,579 5,403 (8,176)
42 11,038
Registration fees
14,540 (1,184) 0 8,194 21,550 7,202 6,018 (1,184)
82 21,550
Reports to shareholders
4,450 1,186 0 (905) 4,731 3,841 5,027 1,186
18 4,731
Professional fees
7,102 6,627 0 (9,787) 3,942 26,407 33,034 6,627
15 3,942
Organizational expenses
- 20,467 0 (20,467) 0 19,503 39,970 20,467
0 0
Miscellaneous
870 (3,560) 0 2,953 263 12,873 9,313 (3,560)
1 263
Total expenses
123,618 177,401 0 (202,728) 98,291 108,036 285,437 177,401
374 98,291
196,044
Reimbursement from Advisor:
Class A
(29,637) (60,653) 0 63,104 (27,186) (101,317)(161,970)(60,653)
-131 (27,186)
Class B
(5,077) - - 5,077 0 - - -
0 0
Class C
(4,869) - - 4,869 0 - - -
0 0
Fee waivers
- (107,241) 0 107,241 0 - (107,241)(107,241)
0 0
Fees paid indirectly
(11,973) - 0 0 (11,973) - - 0
-18 (11,973)
Net expenses
72,062 9,507 0 (22,437) 59,132 6,719 16,226 9,507
225 59,132
117,941
NET INVESTMENT INCOME (LOSS)
5,744 6,358 0 22,437 34,539 5,735 12,093 6,358
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments
(498,005) (62,985) 0 - (560,990) 48,953 (14,032) (62,985)
Foreign currency transactions
(68,923) (9,261) 0 - (78,184) (9,386)(18,647) (9,261)
(566,928) (72,246) 0 0 (639,174) 39,567 (32,679) (72,246)
Change in unrealized appreciation or (depreciation) on:
Investments and foreign currencies
(401,672) (58,316) 0 - (459,988) (25,795) (84,111)(58,316)
Assets and liabilities denominated in foreign currencies
9,668 1,449 0 - 11,117 (1,581) (132) 1,449
(392,004) (56,867) 0 0 (448,871) (27,376) (84,243)(56,867)
NET REALIZED AND UNREALIZED GAIN (LOSS)
(958,932) (129,113) 0 - (1,088,045) 12,191(116,922)(129,113)
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS
($953,188)($122,755) $0 - ($1,075,943) $17,926($104,829)
($122,755)
AVERAGE NET ASSETS - CLASS A
4,172,091 948,122 0 - 5,241,823 671,840 811,280 948,122
RATIO OF TOTAL EXP TO AVG N/A - CLASS A
5.30%(a) 37.32%(a) 0.00% (a) - 3.74% (a) 32.16% 35.18% 37.32%
RATIO OF NET EXP TO AVG N/A - CLASS A
3.33%(a) 2.00%(a) 0.00% (a) - 2.25% (a)12 2.00% 2.00% 2.00%
AVERAGE NET ASSETS - CLASS B
102,746 N/A N/A - N/A
RATIO OF TOTAL EXP TO AVG N/A - CLASS B
14.49%(a) N/A N/A - N/A
RATIO OF NET EXP TO AVG N/A - CLASS B
4.08%(a) N/A N/A - N/A
AVERAGE NET ASSETS - CLASS C
18,864 N/A N/A - N/A
RATIO OF TOTAL EXP TO AVG N/A - CLASS C
56.13%(a) N/A N/A - N/A
RATIO OF NET EXP TO AVG N/A - CLASS C
4.08%(a) N/A N/A - N/A
(a) Annualized
* For the six months ended September 30, 2000.
** For the six months ended September 30, 2000. For comparative purposes, the
period used is the six month interim period from April 1, 2000
through September 30, 2000.
1 To reflect the change in Investment Advisory Fees. The Fund's advisory
agreement provides for the Fund to pay the Advisor a fee of
1.05% of the Fund's average daily net assets.
2 To reflect an administrative service fee of 0.20% of the Fund's average daily
net assets.
3 The Advisor has agreed to limit annual fund operating expenses (net of expense
offset arrangements) through September 30, 2002.
The proforma combined statements of operations presented above does not
necessarily reflect what the results of operations would
have been if the entities had been merged on April 1, 1999. In addition, the
expenses do not include the cost of merging the two funds.
See Notes to Proforma Financial Statements.
CALVERT NEW AFRICA FUND
THE RISA FUND
CALVERT SOUTH AFRICA FUND
MARCH 31, 2000 (UNAUDITED)
CALVERT NEW
AFRICA FUND THE RISA
FUND CALVERT
SOUTH AFRICA
FUND PROFORMA
ADJUSTMENTS TOTAL TOTAL
SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE
EQUITY SECURITIES - 66.8%
Botswana - 0.0%
Sechaba Brewery
163,300 $161,863 - - (163,300) ($161,863)
Sefalana Holdings Co.
105,300 106,548 - - (105,300) (106,548)
268,411 - - (268,411)
Egypt - 0.0%
Al-Ahram Beverages Co.*
4,800 85,920 - - (4,800) (85,920)
Commercial International Co.
8,150 96,791 (8,150) (96,791)
Egyptian Company for Mobile Service (MobiNil)*
5,000 241,894 (5,000) (241,894)
Egyptian Starch & Glucose Manufacturing Co.
125 868 (125) (868)
Media Productions Co.*
1,700 35,177 - - (1,700) (35,177)
MISR Duty Free Shop Co.
13,675 39,974 (13,675) (39,974)
Orascom Construction*
3,650 51,603 (3,650) (51,603)
552,227 - - (552,227)
Ghana - 0.0%
Ashanti Goldfields Limited (GDR)*
10,201 21,677 (10,201) (21,677)
Guinness Ghana
339,900 81,002 (339,900) (81,002)
Social Security Bank
218,700 106,800 (218,700) (106,800)
209,479 - - (209,479)
Ivory Coast - 0.0%
Societe National des Telecommunication
3,100 119,720 (3,100) (119,720)
Kenya - 0.0%
Kenya Power & Lighting Co.
71,734 84,336 (71,734) (84,336)
Uchumi Supermarkets
114,192 65,983 (114,192) (65,983)
150,319 (150,319)
CALVERT NEW AFRICA FUND
THE RISA FUND
CALVERT SOUTH AFRICA FUND
MARCH 31, 2000 (UNAUDITED)
CALVERT NEW
AFRICA FUND THE RISA
FUND CALVERT
SOUTH AFRICA
FUND PROFORMA
ADJUSTMENTS TOTAL TOTAL
SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE
EQUITY SECURITIES (CONT'D)
South Africa - 66.8%
Adcorp Holdings, Ltd.
8000 30,680 8,000 30,680
African Bank Investments, Ltd.*
14000 29,625 14,000 29,625
African Life Assurance Co., Ltd.
6200 36,234 6,200 36,234
Alexander Forbes, Ltd.
38,000 89,121 38,000 89,121
Anglo American Platnum
3,900 103,833 3,900 103,833
AngloGold, Ltd.
900 43,103 900 43,103
Avis Southern Africa, Ltd.
17500 20,989 17,500 20,989
Billiton, Plc.
71,700 337,902 71,700 337,902
Capital Alliance Holdings, Ltd.
- 30,000 61,879 30,000 61,879
City Lodge Hotels
1 1 1 1
Comparex Holdings, Ltd.
25,000 44,499 25,000 44,499
DataTec, Ltd.*
10,600 188,142 2,500 44,308 13,100 232,450
De Beers Centenary
12,800 299,656 1,500 35,065 14,300 334,721
Dimension Data Holdings, Ltd.
34,779 310,246 6,000 53,262 40,779 363,508
FirstRand, Ltd.
205,300 248,163 205,300 248,163
Fusion Capital*
1,053,900 161,258 1,053,900 161,258
Gray Securities, Ltd.
95,000 27,578 95,000 27,578
Greenwich Group, Ltd.
31,400 8,396 31,400 8,396
Hosken Consolidated Investmens, Ltd.*
35,000 39,572 - - 35,000 39,572
Impala Platinum Holdings, Ltd.
1,500 52,024 1,500 52,024
Imperial Holdings, Ltd.
18,396 157,628 18,396 157,628
La Retail Stores, Ltd.
22,000 15,697 22,000 15,697
M Cell Warrants
43,200 237,962 43,200 237,962
Metro Cash and Carry, Ltd.
60,400 52,216 60,400 52,216
Metropolitan Life, Ltd.
70,000 88,769 70,000 88,769
Moneyweb Holdings, Ltd.
200,000 29,030 200,000 29,030
Mossie Holdings*
25 154,540 25 154,540
Naspers, Ltd. (N shares)
18,800 229,840 18,800 229,840
Old Mutual, Plc.
22,000 51,932 22,000 51,932
Prism Holdings, Ltd.*
17,900 22,459 17,900 22,459
Profurn, Ltd.
75,000 51,910 75,000 51,910
Rebhold, Ltd.
36,700 98,552 36,700 98,552
Rembrandt Group, Ltd.
11,900 105,608 11,900 105,608
Sanlam, Ltd.
80,500 102,357 80,500 102,357
Sappi, Ltd.
21,200 164,137 21,200 164,137
Standard Bank Investment
58,200 240,441 58,200 240,441
Tempora Investments, Ltd.
10,000 49,656 10,000 49,656
Woolworths Holdings, Ltd.
100,000 56,531 100,000 56,531
3,258,044 916,757 - 4,174,801
66.83% 66.8
CALVERT NEW AFRICA FUND
THE RISA FUND
CALVERT SOUTH AFRICA FUND
MARCH 31, 2000 (UNAUDITED)
CALVERT NEW
AFRICA FUND THE RISA
FUND CALVERT
SOUTH AFRICA
FUND PROFORMA
ADJUSTMENTS TOTAL TOTAL
SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE
EQUITY SECURITIES (CONT'D)
UNITED KINGDOM - 0.0%
African Lakes Corporation, Plc.*
127,141 228,736 (127,141) (228,736)
Old Mutual, Plc.*
121,100 286,282 (121,100) (286,282)
515,018 (515,018)
UNITED STATES - 0.0%
African Church*
250,000 0 (250,000) 0
ZIMBABWE - 0.0%
Econet Wireless Holdings, Ltd.
135,700 55,061 (135,700) (55,061)
Total Equity Investments (Identified Cost $4,370,098)
5,128,279 916,757 - (1,870,235)
CALVERT NEW AFRICA FUND
THE RISA FUND
CALVERT SOUTH AFRICA FUND
MARCH 31, 2000 (UNAUDITED)
CALVERT NEW
AFRICA FUND THE RISA
FUND CALVERT
SOUTH AFRICA
FUND PROFORMA
ADJUSTMENTS TOTAL TOTAL
SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE
REPURCHASE AGREEMENTS - 2.8%
PRINCIPAL PRINCIPAL PRINCIPAL PRINCIPAL PRINCIPAL
VALUE VALUE VALUE VALUE VALUE
PNC Bank
PNC Bank $175,000 at 4.85% (Agreement dated 3/28/00 to be
repurchased at $175,165.03 on 4/4/00, collateralized by $175,000
Treasury Note, 5.75% due 4/30/03)(Value $179,124)
$175,000 $175,000 $175,000 $175,000
2.80%
Total Repurchase Agreements (Identified Cost $175,000
175,000 175,000
2.80%
Total Investments 69.6% (Cost $4,545,098)
5,128,279 1,091,757 (1,870,235) 4,349,801
69.63%
Other assets and liabilities, net 30.4%
(34,219) 61,169 0 1,870,235 1,897,185
30.37%
Total Net Assets - 100.0%
$5,094,060 $1,152,926 $0 $0 # $6,246,986
100.00%
* Non-income producing security as no dividends were paid during the period from
April 1, 1999 to March 31, 2000.
# Current holdings of the Calvert New Africa Fund and RISA Fund may not
qualifyas "New South Africa Companies" pursuant to the investment policies of
the Calvert South Afica Fund.
See notes to Proforma Financial Statements.
CALVERT NEW AFRICA FUND
THE RISA FUND
CALVERT SOUTH AFRICA FUND
PROFORMA PORTFOLIO OF INVESTMENTS
MARCH 31, 2000 (UNAUDITED)
CALVERT CALVERT
NEW AFRICA THE RISA SOUTH AFRICA PROFORMA
FUND FUND FUND ADJUSTMENTS TOTAL TOTAL
SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE
EQUITY SECURITIES - 66.8%
Botswana - 0.0%
Sechaba Brewery
163,300 $161,863 (163,300) ($161,863)
Sefalana Holdings Co.
105,300 106,548 (105,300) (106,548)
268,411 - - (268,411)
Egypt - 0.0%
Al-Ahram Beverages Co.*
4,800 85,920 (4,800) (85,920)
Commercial International Co.
8,150 96,791 (8,150) (96,791)
Egyptian Company for Mobile Service (MobiNil)*
5,000 241,894 (5,000) (241,894)
Egyptian Starch & Glucose Manufacturing Co.
125 868 (125) (868)
Media Productions Co.*
1,700 35,177 (1,700) (35,177)
MISR Duty Free Shop Co.
13,675 39,974 (13,675) (39,974)
Orascom Construction*
3,650 51,603 (3,650) (51,603)
552,227 - - (552,227)
Ghana - 0.0%
Ashanti Goldfields Limited (GDR)*
10,201 21,677 (10,201) (21,677)
Guinness Ghana
339,900 81,002 (339,900) (81,002)
Social Security Bank
218,700 106,800 (218,700) (106,800)
209,479 - - (209,479)
Ivory Coast - 0.0%
Societe National des Telecommunication
3,100 119,720 (3,100) (119,720)
Kenya - 0.0%
Kenya Power & Lighting Co.
71,734 84,336 (71,734) (84,336)
Uchumi Supermarkets
114,192 65,983 (114,192) (65,983)
150,319 - - (150,319)
CALVERT CALVERT
NEW AFRICA THE RISA SOUTH AFRICA PROFORMA
FUND FUND FUND ADJUSTMENTS TOTAL TOTAL
SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE
EQUITY SECURITIES (CONT'D)
South Africa - 66.8%
Adcorp Holdings, Ltd.
8000 30,680 8,000 30,680
African Bank Investments, Ltd.*
14000 29,625 14,000 29,625
African Life Assurance Co., Ltd.
6200 36,234 6,200 36,234
Alexander Forbes, Ltd.
38,000 89,121 38,000 89,121
Anglo American Platnum
3,900 103,833 3,900 103,833
AngloGold, Ltd.
900 43,103 900 43,103
Avis Southern Africa, Ltd.
- 17500 20,989 17,500 20,989
Billiton, Plc.
71,700 337,902 71,700 337,902
Capital Alliance Holdings, Ltd.
30,000 61,879 30,000 61,879
City Lodge Hotels
1 1 1 1
Comparex Holdings, Ltd.
25,000 44,499 25,000 44,499
DataTec, Ltd.*
10,600 188,142 2,500 44,308 13,100 232,450
De Beers Centenary
12,800 299,656 1,500 35,065 14,300 334,721
Dimension Data Holdings, Ltd.
34,779 310,246 6,000 53,262 40,779 363,508
FirstRand, Ltd.
205,300 248,163 205,300 248,163
Fusion Capital*
1,053,900 161,258 1,053,900 161,258
Gray Securities, Ltd.
95,000 27,578 95,000 27,578
Greenwich Group, Ltd.
31,400 8,396 31,400 8,396
Hosken Consolidated Investmens, Ltd.*
35,000 39,572 35,000 39,572
Impala Platinum Holdings, Ltd.
1,500 52,024 1,500 52,024
Imperial Holdings, Ltd.
18,396 157,628 18,396 157,628
La Retail Stores, Ltd.
22,000 15,697 22,000 15,697
M Cell Warrants
43,200 237,962 43,200 237,962
Metro Cash and Carry, Ltd.
60,400 52,216 60,400 52,216
Metropolitan Life, Ltd.
70,000 88,769 70,000 88,769
Moneyweb Holdings, Ltd.
200,000 29,030 200,000 29,030
Mossie Holdings*
25 154,540 25 154,540
Naspers, Ltd. (N shares)
18,800 229,840 18,800 229,840
Old Mutual, Plc.
22,000 51,932 22,000 51,932
Prism Holdings, Ltd.*
17,900 22,459 17,900 22,459
Profurn, Ltd.
75,000 51,910 75,000 51,910
Rebhold, Ltd.
36,700 98,552 36,700 98,552
Rembrandt Group, Ltd.
11,900 105,608 11,900 105,608
Sanlam, Ltd.
80,500 102,357 80,500 102,357
Sappi, Ltd.
21,200 164,137 21,200 164,137
Standard Bank Investment
58,200 240,441 58,200 240,441
Tempora Investments, Ltd.
10,000 49,656 10,000 49,656
Woolworths Holdings, Ltd.
100,000 56,531 100,000 56,531
3,258,044 916,757 4,174,801
66.83%
CALVERT CALVERT
NEW AFRICA THE RISA SOUTH AFRICA PROFORMA
FUND FUND FUND ADJUSTMENTS TOTAL TOTAL
SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE
EQUITY SECURITIES (CONT'D)
UNITED KINGDOM - 0.0%
African Lakes Corporation, Plc.*
127,141 228,736 (127,141) (228,736)
Old Mutual, Plc.*
121,100 286,282 (121,100) (286,282)
515,018 - - (515,018)
UNITED STATES - 0.0%
African Church*
250,000 0 (250,000) 0
ZIMBABWE - 0.0%
Econet Wireless Holdings, Ltd.
135,700 55,061 (135,700) (55,061)
Total Equity Investments (Identified Cost $4,370,098)
5,128,279 916,757 - (1,870,235)
REPURCHASE AGREEMENTS - 2.8%
PRINCIPAL PRINCIPAL PRINCIPAL PRINCIPAL PRINCIPAL
VALUE VALUE VALUE VALUE VALUE
PNC Bank
PNC Bank $175,000 at 4.85% (Agreement dated 3/28/00 to be
repurchased at $175,165.03 on 4/4/00, collateralized by $175,000
Treasury Note, 5.75% due 4/30/03)(Value $179,124)
$175,000 $175,000 $175,000 $175,000
2.80%
Total Repurchase Agreements (Identified Cost $175,000)
175,000 175,000
2.80%
Total Investments - 69.6% (Cost $4,545,098)
5,128,279 1,091,757 (1,870,235) 4,349,801
69.63%
Other assets and liabilities, net - 30.4%
(34,219) 61,169 0 1,870,235 1,897,185
30.37%
Total Net Assets - 100.0%
$5,094,060 $1,152,926 $0 $0 # $6,246,986
100.00%
* Non-income producing security as no dividends were paid during the period from
April 1, 1999 to March 31, 2000.
# Current holdings of the Calvert New Africa Fund and RISA Fund may not
qualify as "New South Africa Companies" pursuant to the investment policies
of the Calvert South Africa Fund.
See notes to Proforma Financial Statements.
CALVERT NEW AFRICA FUND
THE RISA FUND
CALVERT SOUTH AFRICA FUND
NOTES TO PROFORMA FINANCIAL STATEMENTS
MARCH 31, 2000 (UNAUDITED)
NOTE A - SIGNIFICANT ACCOUNTING POLICIES
General: The proforma schedule of statements of assets and liabilities gives the
effect of the proposed combination of the Funds. The combination is accounted
for as a tax-free merger of investment companies. The proforma statement of
operations presents the operations of the Funds on a combined basis and is
presented for information purposes only: however it is not necessarily
representative of what the combined result of the Funds would have been had the
combination occurred at the beginning of the fiscal year. The transaction would
be accomplished
by a transfer of all of the assets and the assumption of certain identified
liabilities of the Calvert New Africa Fund and The RISA Fund in exchange for
like shares of the Calvert South Africa Fund. Following the transfer, Calvert
South Africa Fund shares will be distributed to the respective shareholders of
the Calvert New Africa Fund and The RISA Fund in liquidation of both Calvert New
Africa Fund and The RISA Fund and both of these Funds would then be dissolved.
As a result of the proposed transaction, each shareholder of the Calvert New
Africa Fund and The RISA Fund will receive that number of full and fractional
Calvert South Africa Fund shares equal in value at the date of the exchange to
the value of such shareholder's respective shares of the Calvert South Africa
Fund.
The RISA Fund constitutes the surviving entity for financial reporting purposes,
therefore it is deemed the "accounting survivor" for the merger.
Security Valuation: Securities listed or traded on a national securities
exchange are valued at the last reported sale price. Unlisted securities and
listed securities for which the last sale price is unavailable are valued at the
most recent bid price or based on a yield equivalent obtained from the
securities' market maker. Foreign security prices, furnished by quotation
services in the securities local currency, are translated using the current U.S.
dollar exchange rate. Other securities and assets for which market quotations
are not available or deemed inappropriate are valued in good faith under the
direction of the Board of Directors.
In determining fair value, the Board considers all relevant qualitative and
quantitative information available. These factors are subject to change over
time and are reviewed periodically. The values assigned to fair value
investments are based on available information and do not necessarily represent
amounts that might be ultimately be realized, since such amounts depend on
future developments inherent in long-term investments. Further, because of the
inherent uncertainty of valuation, those estimated values may differ
significantly from the values that would have been used had a ready market of
the investments existed, and the differences could be material.
Security Transactions and Investment Income: Security transactions are accounted
for on trade date. Realized gains and losses are recorded on an identified cost
basis. Dividend income is recorded on the ex-dividend date or in the case of
dividends on certain foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, accretion of discount and amortization of
premium on recorded on an accrual basis.
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 of the date of the event. The
effect of changes in foreign exchange rates on securities is included in the net
realized and unrealized gain or loss on securities.
Distributions to Shareholders: Distributions to shareholders are recorded by the
Fund on ex-dividend date. Dividends from net investment income and distributions
from net realized capital gains, if any, are paid at least annually.
Distributions are determined in accordance with income tax regulations which may
differ from generally accepted accounting principles; accordingly, periodic
reclassifications are made within the Fund's capital accounts to reflect income
and gains available for distribution under income tax regulations.
Estimates: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
Expense Offset Arrangements: The Fund has an agreement with its custodian bank
whereby the custodian's and transfer agent's fees may be paid indirectly by
credits earned on the Fund's cash on deposit with the bank. Such a deposit
arrangement is an alternative to overnight investments.
Federal Income Taxes: No provision for federal income tax is required since the
Fund intends to qualify as a regulated investment company under the Internal
Revenue Code and to distribute substantially all of its taxable earnings.
NOTE B - RELATED PARTY TRANSACTIONS
The Fund has entered into an Investment Advisory Agreement with Calvert Asset
Management Company, Inc. Calvert Asset Management Company, Inc. (the "Advisor")
is wholly-owned by Calvert Group, Ltd. ("Calvert"), which is indirectly
wholly-owned by Ameritas Acacia Mutual Holding Company. The Advisor provides
investment advisory services and pays the salaries and fees of officers and
affiliated Directors of the Fund. For its services, the Advisor is entitled to
receive an annual fee, payable monthly, of 1.05% of the Fund's average daily net
assets.
The Advisor will utilize the services of two Subadvisors, RISA Investment
Advisers, LLC and African Harvest Proprietary Asset Managers Limited. The
Advisor will pay each Subadvisor from its fee, 0.40% of the Fund's average daily
net assets.
The Advisor has agreed to limit annual fund operating expenses (net of expense
offset arrangements) through September 30, 2002. The contractual expense cap is
2.25%. For the purpose of this expense limit, operating expenses do not include
interest expense, brokerage, taxes, extraordinary expenses and capital items.
The Fund has entered into an Administrative Services Agreement with Calvert
Administrative Services Company. Calvert Administrative Services Company
("CASC"), an affiliate of the Advisor, provides administrative services to the
Fund. CASC is entitled to receive an annual fee, payable monthly, of 0.20% of
the Fund's average daily net assets.
The Fund has entered into a Distribution Agreement with Calvert Distributors
Inc. ("CDI"), an affiliate of the Advisor, and BOE Securities, Inc. ("BOE").
Pursuant to the Distribution Agreement, CDI and BOE are entitled to receive a
combined fee of 0.25% of the Fund's average daily net assets.
The Fund has entered into a Shareholder Servicing Agreement with Calvert
Shareholder Services, Inc. Calvert Shareholder Services, Inc. ("CSSI"), an
affiliate of the Advisor is the shareholder servicing agent of the Fund.
National Financial Data Services, Inc. ("NFDS") is the transfer and dividend
disbursing agent. For its services, CSSI is entitled to receive a fee of $3.91
per shareholder account and $0.45 per transaction.
1
CALVERT NEW AFRICA FUND
THE RISA FUND
CALVERT SOUTH AFRICA FUND
NOTES TO PROFORMA FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 (UNAUDITED)
NOTE A - SIGNIFICANT ACCOUNTING POLICIES
General: The proforma schedule of statements of assets and liabilities gives the
effect of the proposed combination of the Funds. The combination is accounted
for as a tax-free merger of investment companies. The proforma statement of
operations presents the operations of the Funds on a combined basis and is
presented for information purposes only: however it is not necessarily
representative of what the combined result of the Funds would have been had the
combination occurred at the beginning of the fiscal year. The transaction would
be accomplished
by a transfer of all of the assets and the assumption of certain identified
liabilities of the Calvert New Africa Fund and The RISA Fund in exchange for
like shares of the Calvert South Africa Fund. Following the transfer, Calvert
South Africa Fund shares will be distributed to the respective shareholders of
the Calvert New Africa Fund and The RISA Fund in liquidation of both Calvert New
Africa Fund and The RISA Fund and both of these Funds would then be dissolved.
As a result of the proposed transaction, each shareholder of the Calvert New
Africa Fund and The RISA Fund will receive that number of full and fractional
Calvert South Africa Fund shares equal in value at the date of the exchange to
the value of such shareholder's respective shares of the Calvert South Africa
Fund.
The RISA Fund constitutes the surviving entity for financial reporting purposes,
therefore it is deemed the "accounting survivor" for the merger.
Security Valuation: Securities listed or traded on a national securities
exchange are valued at the last reported sale price. Unlisted securities and
listed securities for which the last sale price is unavailable are valued at the
most recent bid price or based on a yield equivalent obtained from the
securities' market maker. Foreign security prices, furnished by quotation
services in the securities local currency, are translated using the current U.S.
dollar exchange rate. Other securities and assets for which market quotations
are not available or deemed inappropriate are valued in good faith under the
direction of the Board of Directors.
In determining fair value, the Board considers all relevant qualitative and
quantitative information available. These factors are subject to change over
time and are reviewed periodically. The values assigned to fair value
investments are based on available information and do not necessarily represent
amounts that might be ultimately be realized, since such amounts depend on
future developments inherent in long-term investments. Further, because of the
inherent uncertainty of valuation, those estimated values may differ
significantly from the values that would have been used had a ready market of
the investments existed, and the differences could be material.
Security Transactions and Investment Income: Security transactions are accounted
for on trade date. Realized gains and losses are recorded on an identified cost
basis. Dividend income is recorded on the ex-dividend date or in the case of
dividends on certain foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, accretion of discount and amortization of
premium on recorded on an accrual basis.
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 of the date of the event. The
effect of changes in foreign exchange rates on securities is included in the net
realized and unrealized gain or loss on securities.
Distributions to Shareholders: Distributions to shareholders are recorded by the
Fund on ex-dividend date. Dividends from net investment income and distributions
from net realized capital gains, if any, are paid at least annually.
Distributions are determined in accordance with income tax regulations which may
differ from generally accepted accounting principles; accordingly, periodic
reclassifications are made within the Fund's capital accounts to reflect income
and gains available for distribution under income tax regulations.
Estimates: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
Expense Offset Arrangements: The Fund has an agreement with its custodian bank
whereby the custodian's and transfer agent's fees may be paid indirectly by
credits earned on the Fund's cash on deposit with the bank. Such a deposit
arrangement is an alternative to overnight investments.
Federal Income Taxes: No provision for federal income tax is required since the
Fund intends to qualify as a regulated investment company under the Internal
Revenue Code and to distribute substantially all of its taxable earnings.
NOTE B - RELATED PARTY TRANSACTIONS
The Fund has entered into an Investment Advisory Agreement with Calvert Asset
Management Company, Inc. Calvert Asset Management Company, Inc. (the "Advisor")
is wholly-owned by Calvert Group, Ltd. ("Calvert"), which is indirectly
wholly-owned by Ameritas Acacia Mutual Holding Company. The Advisor provides
investment advisory services and pays the salaries and fees of officers and
affiliated Directors of the Fund. For its services, the Advisor is entitled to
receive an annual fee, payable monthly, of 1.05% of the Fund's average daily net
assets.
The Advisor will utilize the services of two Subadvisors, RISA Investment
Advisers, LLC and African Harvest Proprietary Asset Managers Limited. The
Advisor will pay each Subadvisor from its fee, 0.40% of the Fund's average daily
net assets.
The Advisor has agreed to limit annual fund operating expenses (net of expense
offset arrangements) through September 30, 2002. The contractual expense cap is
2.25%. For the purpose of this expense limit, operating expenses do not include
interest expense, brokerage, taxes, extraordinary expenses and capital items.
The Fund has entered into an Administrative Services Agreement with Calvert
Administrative Services Company. Calvert Administrative Services Company
("CASC"), an affiliate of the Advisor, provides administrative services to the
Fund. CASC is entitled to receive an annual fee, payable monthly, of 0.20% of
the Fund's average daily net assets.
The Fund has entered into a Distribution Agreement with Calvert Distributors
Inc. ("CDI"), an affiliate of the Advisor, and BOE Securities, Inc. ("BOE").
Pursuant to the Distribution Agreement, CDI and BOE are entitled to receive a
combined fee of 0.25% of the Fund's average daily net assets.
The Fund has entered into a Shareholder Servicing Agreement with Calvert
Shareholder Services, Inc. Calvert Shareholder Services, Inc. ("CSSI"), an
affiliate of the Advisor is the shareholder servicing agent of the Fund.
National Financial Data Services, Inc. ("NFDS") is the transfer and dividend
disbursing agent. For its services, CSSI is entitled to receive a fee of $3.91
per shareholder account and $0.45 per transaction.
1
NOTES TO PORTFOLIO ADJUSTMENTS
1 To reflect the change in Investment Advisory Fees. The Fund's advisory
agreement provides for the Fund to pay the Advisor a fee of 1.05% of the Fund's
average daily net assets.
2 To eliminate costs not expected to be incurred for the upcoming fiscal year.
3 To reflect an Administrative Service Fee of 0.20% of the Fund's average daily
net assets.
4 To reflect the expected Transfer Agency fees for the new Fund.
5 To reflect the Distribution Plan Expenses of 0.25% of the Fund's average
daily net assets and to eliminate Calvert New Africa Fund's Class B & C amounts.
6 To reflect Insurance Costs expected to be incurred for the new Fund.
Insurance Expenses for the new Fund are categorized in the miscellaneous expense
caption.
7 To reflect the expected Director's fees and expenses for the new Fund. The
fee is based upon four independent "disinterested" directors receiving a $5,000
annual retainer fee that is allocated to each of the funds in the series served.
8 To reflect the Accounting Fees expected to be incurred in the new Fund. The
RISA Fund had an arrangement with its service provider that charged an annual
rate of .135% of the Fund's average daily net assets, or a minimum fee of
$114,000, whichever was greater. For the period of October 1, 1999 (commencement
of operations) through March 31, 2000, the service provider's minimum fee was
$52,250, of which $40,589 was waived.
9 To reflect the expected custodian fees for the new Fund. The Fund has an
agreement with its custodian bank whereby the custodian's and transfer agent's
fees may be paid indirectly by credits earned on the Fund's cash on deposit with
the bank. Such a deposit arrangement is an alternative to overnight investments.
10 To reflect the expected Professional Fees for the new Fund. Audit fees for
new funds are limited to $6,000 for the first year.
11 To eliminate Organization and Offering Expenses not applicable to the new
Fund. These costs have been completely amortized.
12 The Advisor has agreed to limit annual fund operating expenses (net of
expense offset arrangements) through September 30, 2002. The contractual expense
cap is 2.25%. For the purpose of this expense limit, operating expenses do not
include interest expense, brokerage, taxes, extraordinary expenses and capital
items.
13 Proforma adjustments required to reflect the estimated expenses expected to
be incurred for the upcoming fiscal year.
1
NOTES TO PORTFOLIO ADJUSTMENTS
1 To reflect the change in Investment Advisory Fees. The Fund's advisory
agreement provides for the Fund to pay the Advisor a fee of 1.05% of the Fund's
average daily net assets.
2 To eliminate costs not expected to be incurred for the upcoming fiscal year.
3 To reflect an Administrative Service Fee of 0.20% of the Fund's average daily
net assets.
4 To reflect the expected Transfer Agency fees for the new Fund.
5 To reflect the Distribution Plan Expenses of 0.25% of the Fund's average
daily net assets and to eliminate Calvert New Africa Fund's Class B & C amounts.
6 To reflect Insurance Costs expected to be incurred for the new Fund.
Insurance Expenses for the new Fund are categorized in the miscellaneous expense
caption.
7 To reflect the expected Director's fees and expenses for the new Fund. The
fee is based upon four independent "disinterested" directors receiving a $5,000
annual retainer fee that is allocated to each of the funds in the series served.
8 To reflect the Accounting Fees expected to be incurred in the new Fund. The
RISA Fund had an arrangement with its service provider that charged an annual
rate of .135% of the Fund's average daily net assets, or a minimum fee of
$114,000, whichever was greater. For the period of October 1, 1999 (commencement
of operations) through September 30, 2000, $74,100 of these fees have been
waived.
9 To reflect the expected custodian fees for the new Fund. The Fund has an
agreement with its custodian bank whereby the custodian's and transfer agent's
fees may be paid indirectly by credits earned on the Fund's cash on deposit with
the bank. Such a deposit arrangement is an alternative to overnight investments.
10 To reflect the expected Professional Fees for the new Fund. Audit fees for
new funds are limited to $6,000 for the first year.
11 To eliminate Organization and Offering Expenses not applicable to the new
Fund. These costs have been completely amortized.
12 The Advisor has agreed to limit annual fund operating expenses (net of
expense offset arrangements) through September 30, 2002. The contractual expense
cap is 2.25%. For the purpose of this expense limit, operating expenses do not
include interest expense, brokerage, taxes, extraordinary expenses and capital
items.
13 Proforma adjustments required to reflect the estimated expenses expected to
be incurred for the upcoming fiscal year.
PART C. OTHER INFORMATION
Item 15. Indemnification
Registrant's By-Laws, Exhibit 2 of this Registration Statement, provides, in
summary, that officers and directors shall be indemnified by Registrant against
liabilities and expenses incurred by such persons in connection with actions,
suits, or proceedings arising out of their offices or duties of employment,
except that no indemnification can be made to such a person if he has been
adjudged liable of willful misfeasance, bad faith, gross negligence, or reckless
disregard of his duties. In the absence of such an adjudication, the
determination of eligibility for indemnification shall be made by independent
counsel in a written opinion or by the vote of a majority of a quorum of
directors who are neither "interested persons" of Registrant, as that term is
defined in Section 2(a)(19) of the Investment Company Act of 1940, nor parties
to the proceeding.
Registrant may purchase and maintain liability insurance on behalf of any
officer, trustee, employee or agent against any liabilities arising from such
status. In this regard, Registrant will maintain a Directors & Officers
(Partners) Liability Insurance Policy with Chubb Group of Insurance Companies,
15 Mountain View Road, Warren, New Jersey 07061, providing Registrant with $5
million in directors and officers liability coverage, plus $5 million in excess
directors and officers liability coverage for the independent trustees/directors
only. Registrant also maintains an $9 million Investment Company Blanket Bond
issued by ICI Mutual Insurance Company, P.O. Box 730, Burlington, Vermont,
05402.
Item 16. Exhibits
1. Articles of Incorporation filed herewith.
2. By-Laws filed herewith.
3. Inapplicable.
4. Agreement and Plan of Reorganization filed as Exhibit A to the Form
N-14 filed herewith.
5. Specimen Stock Certificate (inapplicable).
6. Investment Advisory Agreement filed herewith.
Draft Investment Sub-advisory Agreement filed herewith.
7. Underwriting Agreement filed herewith.
8. Directors' Deferred Compensation Agreement filed herewith.
9. Custodial Contract filed herewith.
10. Plan of Distribution filed herewith.
11. Draft Opinion of Counsel, filed herewith.
12. Draft Opinion and Consent of Counsel on Tax Matters, filed
herewith.
13. Transfer Agency Contract filed herewith.
14. Draft Consent of Independent Auditors, filed herewith
15. Inapplicable.
16. Copies of Power of Attorney Forms filed herewith.
17. (a) Code of Ethics filed herewith.
(b) 18F-3 Multiple Class Plan filed herewith.
Item 17. Undertakings:
The undersigned registrant agrees that prior to any public reoffering of the
securities registered through the use of a prospectus which is a part of this
registration statement by any person or party who is deemed to be an underwriter
within the meaning of Rule 145(c) of the Securities Act of 1933, the reoccurring
prospectus will contain the information called for by the applicable
registration form for re offerings by persons who may be deemed underwriters, in
addition to the information called for by the other items of the applicable
form.
The undersigned registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as a part of an amendment to the registration
statement and will not be used until the amendment is effective, and that, in
determining any liability under the 1933 Act, each post-effective amendment
shall be deemed to be a new registration statement for the securities offered
therein, and the offering of the securities at that time shall be deemed to be
the initial bona fide offering of them.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission acting pursuant to said section 8(a),
may determine.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed on behalf of the Registrant by the undersigned,
thereto duly authorized in the City of Bethesda, and the State of Maryland on
the @1st day of December, 2000.
CALVERT IMPACT FUND, INC.
by: /s/ Barbara J. Krumsiek
Barbara J. Krumsiek, President
SIGNATURES
Pursuant to the requirement of the Securities Act of 1933, this Registration
Statement for Calvert Impact Fund, Inc. has been signed below by the following
persons in the capacities indicated on December 19, 2000.
** Director 12/19/00
Rebecca L. Adamson
** Director 12/19/00
Miles Douglas Harper, III
** Director 12/19/00
Joy V. Jones
** Director 12/19/00
Barbara J. Krumsiek
** Director 12/19/00
D. Wayne Silby
** Signed by Ivy Wafford Duke pursuant to power of attorney.
/s/Ivy Wafford Duke