N-CSR 1 cwvfncsrfiled120909.htm CALVERT WORLD VALUES FUND, INC. N-CSR Calvert World Values Fund, Inc.

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-6563

CALVERT WORLD VALUES FUND, INC.
(Exact name of registrant as specified in charter)

4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
(Address of Principal Executive Offices)

William M. Tartikoff, Esq.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
(Name and Address of Agent for Service)

 

Registrant's telephone number, including area code: (301) 951-4800

Date of fiscal year end: September 30

Date of reporting period: Twelve months ended September 30, 2009

 

 

Item 1. Report to Stockholders.

<PAGE>

 

Calvert World Values International Equity Fund

Annual Report

September 30, 2009

Calvert Investments

A UNIFI Company

 

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TABLE OF CONTENTS

 

 

 

4

 

President's Letter

7

 

SRI Update

10

 

Portfolio Management Discussion

15

 

Shareholder Expense Example

17

 

Report of Independent Registered Public Accounting Firm

18

 

Statement of Net Assets

27

 

Statement of Operations

28

 

Statements of Changes in Net Assets

30

 

Notes to Financial Statements

38

 

Financial Highlights

43

 

Explanation of Financial Tables

45

 

Proxy Voting and Availability of Quarterly Portfolio Holdings

46

 

Director and Officer Information Table

 

Dear Shareholder:

Market volatility and shifting investment cycles are nothing new to long-term investors. Through the course of numerous "bubbles," political disputes, wars, and economic crises, the financial markets have been repeatedly tested and proven resilient. However, the watershed financial and economic events of the past 12 months have tested the resilience of the global markets and investors in an unprecedented fashion, and we are likely to see changes in the structure and regulation of financial institutions and the markets for years to come.

This environment highlights how critical integrity of management, regulatory oversight, transparency, and corporate governance are to the health of the global financial system and our economy. Calvert has long believed that many of the criteria we review create signals about the strength and integrity of corporate management, and we have included corporate governance as an integral part of our sustainable and responsible investment (SRI) criteria and of our advocacy efforts with companies. Beyond the evaluations and influence with companies themselves, we are participating in a number of initiatives to urge financial regulatory reform and safeguard shareholder interests. Two of the most critical include our support of the Consumer Financial Protection Agency bill and our work with the United Nations Environment Programme Finance Initiative (UNEP FI) in promoting environmental, social, and governance (ESG) investment criteria as a fiduciary responsibility for plan sponsors and institutional investors.

A Time Period of Challenge and Contrast

As you know, this challenging time period opened with global economies and the financial markets in virtual free fall following the failure of Lehman Brothers in September 2008. Global market panic ensued and risk-averse investors sought the safety of Treasuries and money market funds, avoiding any asset class with perceived credit or liquidity risk.

As the reporting year progressed, we saw a somewhat surprising reversal in this sentiment. Investors gained confidence, encouraged by "green shoots" of recovery in newly released economic data and the perceived success of U.S. government stimulus and monetary policies. These factors, along with renewed confidence in the U.S. banking system following the government's "stress tests," helped fuel a rally in stocks, commodities, and many sectors of the bond market.

By September 30, 2009, stocks had rebounded sharply from their March 9 lows, with year-to-date gains of 19.26% for the broad-market Standard & Poor's 500 Index, 22.43% for the small-cap Russell 2000 Index, and 32.63% for the Russell Midcap Index. While outsize year-to-date gains for stocks helped soften their steep declines from October 2008 through March 2009, they did not offset them--and all areas of the U.S. equity market finished the 12-month reporting period far into negative territory. For example, the S&P 500 Index posted a loss of 6.91% for the reporting period despite its strong 2009 performance. U.S. stocks of every style, strategy, and capitalization range fell during this period, with large-cap stocks modestly outperforming small-cap stocks, and growth outpacing value. On the international front, the MSCI EAFE Investable Market Index, a benchmark for international stocks, returned 5.02% for the 12-month period.

The bond market posted overall gains for the reporting period, with the Barclays Capital Aggregate Bond Index up 10.56%, primarily as a result of its corporate bond holdings. Money-market returns remained low, reflecting the Federal Reserve's continued target rate of 0% to 0.25% for federal funds loans.

Sustainable and Responsible Investing

While huge challenges confront the global economy, we also believe that the opportunities facing the Obama administration--and sustainable investors--are greater than ever. In the last six months since we reported to you, Calvert has made progress on several sustainable and responsible investment initiatives.

As a key member of the Asset Management Working Group of UNEP FI, Calvert participated in the release of its new report, Fiduciary Responsibility--Legal and Practical Aspects of Integrating Environmental, Social and Governance Issues (ESG) into Institutional Investment. The report makes the case that integrating ESG considerations into investment decisions should be a legal fiduciary responsibility--and highlights the financial materiality of ESG issues and their systemic risks and costs. The report calls on the investment industry and policymakers to move toward creating sustainable capital markets to help avert a "Natural Resources Crisis."

Following our participation in the World Water Forum earlier in the year, in August Calvert urged the CEO Water Mandate, a private-public initiative of the U.N. Global Compact, to assign an "urgent priority" to developing a policy outlining the issues, risks, and broad responsibilities of companies and industries with regard to water and human rights. We also urged the group to develop an "implementation framework" that companies could use to assess and manage these issues in their business operations. At Calvert, we actively address water and human rights issues in Calvert Global Water Fund's investment criteria and advocacy objectives.

In 2009, many of the shareholder resolutions that we filed with companies we own were related to governance and finance, such as executive compensation, board diversity, and responsible lending policies. Clearly, these areas will remain among our top advocacy priorities throughout the year.

What Lies Ahead?

In the course of a year, the global financial markets have rallied from the brink of collapse and the U.S. economy is showing improved vital signs in the key housing, job, and credit markets. However, while we are optimistic about long-term economic and market recovery, we believe that the systemic imbalances revealed in the global credit crisis need to be addressed, and we are encouraged by progress toward that end.

Internationally, the nations at the September G-20 summit met to enact changes to international economic policies that will promote "sustainable and balanced growth" among developed and emerging countries. On the home front, the Obama administration and Congress are grappling with credit-rating agency reform, banking reform, and the role of the Federal Reserve and U.S. government in the oversight of financial institutions and the markets, among many critical issues. In our view, over time, these efforts may work to help repair our financial system, providing additional stability to the economy and markets. In the short term, we believe the worst of the recession is behind us, but economic recovery will be uneven and staggered, with ongoing market volatility.

Other challenges that government policymakers are addressing are, of course, climate change and environmental degradation. The Obama administration has already made significant progress toward enacting policies that will benefit the environment, and many of these policies--such as stimulus funding for development of alternative energy sources--will likely also benefit sustainable and responsible investors.

Check Your Portfolio Allocations

If you're concerned about the current market environment, talk with your financial advisor about whether your portfolio's allocations to stocks, bonds, and cash are appropriate and well-diversified, given your goals, time horizon, and risk attitudes. Consider that investors who continued to invest regularly during the market's steep declines generally benefited from the rebound that followed, while those who sold their assets may have a long wait to make up their losses. We encourage you to visit our newly enhanced web site, www.calvert.com, for frequent updates and commentary on economic and market developments from Calvert professionals.

As always, we appreciate your investing with Calvert.

Sincerely,

Barbara J. Krumsiek
President and CEO
Calvert Group, Ltd.
October 2009

For more complete information on any Calvert Fund, call your advisor or visit our website for a prospectus. An investor should consider the investment objectives, risks, charges and expenses of an investment carefully before investing. The prospectus contains this and other information. Read it carefully before you invest or send money.

 

SRI Update

from the Calvert Sustainability Research Department

Against the backdrop of the market turmoil over the past 12 months, Calvert has continued to advocate for responsible management of environmental, social, and governance (ESG) factors, which we believe create long-term shareholder value. We've also had unprecedented opportunities to be active participants in the creation of new policies in these arenas.

In the final months of 2008, we broadened our strategic engagement and shareholder advocacy efforts to include companies in virtually every industry, while offering shareholders more investment choices by launching our new line-up of sustainable and responsible investing (SRI) strategies. Now all of our SRI funds fall under one of three types:

Calvert SignatureTM Portfolios--Our original approach, comprising two distinct research frameworks: a rigorous review of financial performance and a thorough assessment of ESG performance.

Calvert SolutionTM Portfolios --Theme-oriented investments dedicated to solving some of today's most pressing environmental and sustainability challenges. This includes Calvert Global Alternative Energy Fund and Calvert Global Water Fund, which just celebrated its first anniversary.

Calvert SAGETM Portfolios -- Calvert Large Cap Value Fund, launched in December 2008, is the first to use this approach, which leverages strategic engagement to address SRI concerns in companies that have the potential to improve but may not yet meet certain standards. Many of these are companies we have not previously invested in.

 

Advancing National Change

As the Obama administration and Congress began to focus their attention on some of Calvert's core issues--such as corporate transparency and responsibility, energy and climate change, and financial market reform and governance--we have been making sure that our shareholders are represented in the process.

We've particularly been involved with the Securities and Exchange Commission (SEC) on the issue of shareholder rights and corporate governance, responding to several SEC proposals in that area and collaborating with the Social Investment Forum to develop a proposal for mandatory corporate disclosure of ESG policies, programs, and performance.

Shareholder Advocacy

Another successful proxy season has drawn to a close, with Calvert filing 26 shareholder proposals and co-filing another nine. Topics included climate change, board and employee diversity, executive compensation, product safety, sustainability reporting, and political contributions. We were able to successfully withdraw 21 of these resolutions before the end of the period after the relevant companies agreed to address our concerns.

It's particularly notable that we successfully withdrew the "say-on-pay" proposal we filed with Microsoft--which would give shareholders a voice on executive compensation--after the company announced plans in September to include a management-sponsored advisory vote on compensation in its next proxy statement. A similar resolution presented at General Mills earned an impressive 51% majority support that same month as well. Given that legislative efforts on this issue have stalled, these results should help spur renewed efforts for a legislative solution.

Climate Change

Calvert's comprehensive approach to tackling the issue of climate change spans our funds, our company, and the globe. On September 22, Calvert CEO Barbara Krumsiek participated in a roundtable on "Sustainable Business and Decent Work" at a gathering of more than 300 leaders from around the world for the United Nations Leadership Forum on Climate Change. That same week, Calvert Senior Vice President for Sustainability Research and Policy Bennett Freeman was a panelist at a session on corporate sustainability and responsibility at the New York Stock Exchange.

Calvert also signed the Copenhagen Communique, which is poised to become the definitive statement from the business community and calls on world leaders to reach a meaningful agreement at the upcoming U.N. Climate Change Conference.

Community Investments

Many of our Funds participate in Calvert's High Social Impact Investing program, which is administered through the Calvert Social Investment Foundation. This community investment program may allocate a small percentage of Fund assets at below-market interest rates to investments that provide economic opportunity for struggling populations.1 This year, the Foundation led efforts to create MFX Solutions, a project that enables microfinance institutions in developing countries to avoid the risk of currency value changes in their borrowings. This lowers costs for all parties and protects microloan recipients against the risks of currency fluctuations and highly variable interest rates.

Special Equities

A modest but important portion of certain funds is allocated to small private companies that are developing products or services that address important sustainability or environmental issues. One such investment is organic heirloom tomato producer New Day Farms in Virginia.2 The company shipped its first crop this past season. While it still faces some challenges, we are pleased with the reception its locally-grown produce has received from customers.

Another recent Special Equities investment is LeapFrog Financial Inclusion Fund, which is advancing the micro-insurance market in the developing world. Its mission is to extend insurance and related financial services to 25 million people in some of the poorest and most excluded communities across Africa and Asia. LeapFrog recently closed on an investment in an insurer in South Africa that provides policies to persons who are HIV positive or have diabetes. These people are either unable to obtain insurance or can do so only at extraordinarily high cost. As a result, they can't obtain a home loan or start a business that requires insurance coverage. The LeapFrog investment in this innovative insurer enables these vulnerable people to engage in productive activity and secure their families' futures.

1. As of September 30, 2009, Calvert Social Investment Foundation Community Investment Notes represented the following percentages of Fund net assets: Calvert Social Investment Fund Balanced Portfolio 1.08%, Calvert Social Investment Fund Bond Portfolio 0.35%, Calvert Social Investment Fund Equity Portfolio 0.56%, Calvert Capital Accumulation Fund 1.53%, Calvert World Values International Equity Fund 1.03%, Calvert New Vision Small Cap Fund 1.33%, and Calvert Large Cap Growth Fund 0.36%. The Calvert Social Investment Foundation is a 501(c)(3) nonprofit organization. The Foundation's Community Investment Note Program is not a mutual fund and should not be confused with any Calvert Group-sponsored investment product.

2. As of September 30, 2009, New Day Farms represented 0.0064% of CSIF Equity Portfolio; Leapfrog Financial Inclusion Fund represented 0.0025% of Calvert Large Cap Growth Fund.

All holdings are subject to change without notice.

For more complete information on any Calvert Fund, call your advisor or visit our website for a prospectus. An investor should consider the investment objectives, risks, charges and expenses of an investment carefully before investing. The prospectus contains this and other information. Read it carefully before you invest or send money.

 

 

Portfolio Management Discussion

Raymond Mui
of Acadian Asset Management, Inc.

 

Performance

For the 12-month period ended September 30, 2009, Calvert World Values International Equity Fund Class A shares (at NAV) returned -6.27% versus 5.02% for the Morgan Stanley Capital International Europe Australasia Far East Investable Markets Index (MSCI EAFE IMI or Index). Weak stock selection was the primary cause of the Fund's underperformance.

 

Investment Climate

Global equity markets have been extraordinarily volatile over the past year, from the full-blown crisis of the fall of 2008 to the mixed signals of the first quarter of 2009 to the rally that began in March and continued through September. Amid a severe recession and the complete restructuring of the global financial system, markets in late 2008 were roiled by high volatility and intense waves of negative investor sentiment. This period was also characterized by sweeping external trends such as deleveraging and forced

Portfolio Statistics
September 30, 2009
Investment Performance
(total return at NAV*)

 

6 Months
ended
9/30/09

12 Months
ended
9/30/09

Class A

45.93%

-6.27%

Class B

45.20%

-7.47%

Class C

45.42%

-7.16%

Class I

46.58%

-5.59%

Class Y**

46.33%

-5.95%

MSCI EAFE IMI

51.86%

5.02%

Lipper International Multi-Cap Value Funds Avg.

49.14%

3.45%

 

 

 

Ten Largest Stock Holdings

% of Net Assets

 

Sanofi-Aventis SA

3.4%

 

Sony Corp.

2.6%

 

Santos Ltd.

2.6%

 

KT Corp. (ADR)

2.5%

 

Nippon Telegraph & Telephone Corp.

2.3%

 

Astellas Pharma, Inc.

2.1%

 

STMicroelectronics NV

1.9%

 

Novartis AG

1.9%

 

Fujitsu Ltd.

1.9%

 

Delhaize Group

1.8%

 

Total

23.0%

 

 

*Investment performance/return at NAV does not reflect the deduction of the Fund's maximum 4.75% front-end sales charge or any deferred sales charges.

**Calvert World Values International Equity Fund first offered Class Y Shares on October 31, 2008. Performance prior to that date reflects the performance of Class A Shares at net asset value (NAV). Actual Class Y Share performance would have been different.

 

Portfolio Statistics
September 30, 2009
Average Annual Total Returns
(with max. load)

 

Class A Shares

One year

-10.77%

Five year

0.78%

Ten year

-1.10%

 

 

 

Class B Shares

One year

-12.10%

Five year

0.53%

Ten year

-1.76%

 

 

 

Class C Shares

One year

-8.09%

Five year

0.91%

Ten year

-1.52%

 

Portfolio Statistics
September 30, 2009
Average Annual Total Returns

 

Class I Shares

One year

-5.59%

Five year

2.50%

Ten year

0.18%

 

 

 

Class Y Shares**

One year

-5.95%

Five year

1.86%

Ten year

-0.58%

** See note on page 10.

The performance data shown represents past performance, does not guarantee future results, and does not reflect the deduction of taxes that a shareholder would pay on the Fund's/Portfolio's distributions or the redemption of Fund/Portfolio shares. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Visit www.calvert.com for current performance data. The gross expense ratio for Class A Shares is 1.68%. This number may vary from the expense ratio shown elsewhere in this report because it is based on a different time period and, if applicable, does not include fee or expense waivers. Performance data quoted already reflects deduction of fund operating expenses. New subadvisor assumed management of the Fund effective March 2006, and previously in March 2002.

 

outflows from hedge funds, mutual funds, and proprietary broker accounts. In addition, the decline of the global economy and the crash in oil prices led to extraordinarily rapid sector regime shifts--away from Materials and Energy stocks in particular. Financial stocks also saw unprecedented volatility in prices.

Difficult conditions for global equities continued in the first part of 2009. The first quarter saw a V-shaped pattern in which deeply negative returns in January and February were mitigated by more favorable results beginning in March. Then came a dramatic shift in market sentiment, with investors focusing strongly on lower-quality stocks and

 

Performance Comparison

Comparison of change in value of $10,000 investment.

 

 

Average annual total returns in the Portfolio Statistics above and the Performance Comparison line graph are with maximum load deducted -- they assume reinvestment of dividends and reflect the deduction of the Fund's Class A maximum front-end sales charge of 4.75%, or deferred sales charge, as applicable. No sales charge has been applied to the index used for comparison. However, the Lipper average does reflect the deduction of the category's average front-end sales charge. The value of an investment in Class A shares is plotted in the line graph. The value of an investment in another class of shares would be different.

 

seeking bargains among companies with depressed share prices. This "junk rally" led to sharp underperformance of many of the factors in our quantitative models, especially momentum. Meanwhile, value stocks faced two distinct environments. In the earlier, risk-averse part of the reporting period, value underperformed severely. In the subsequent junk rally, low-quality value stocks recovered but higher-quality value stocks remained depressed.

Equity markets rose powerfully in the third quarter of 2009 as signs of global economic recovery became more abundant and corporate profits exceeded investors' reduced expectations, which helped offset the steep losses realized earlier in the period. However, low-quality stocks continued to dominate.

Regionally, the Asia-Pacific area realized the strongest gains within the Index, advancing 8.45% in U.S.-dollar terms, while Europe gained 3.40%. In contrast, North America declined 5.47% over the period, as recent stronger performance was unable to offset the sharp declines in the second half of 2008. Emerging markets as a whole registered a robust 21.86% for the period amid a steady recovery in investor risk appetite.

Portfolio Strategy

As noted above, it was an extraordinarily difficult time for quantitative strategies. Although country allocations detracted moderately from returns, stock selection was largely responsible for the Fund's lower relative performance. More than half of the underperformance occurred in a single month--October 2008. Since then returns have been mixed, but generally improving, particularly in the last four months of the period.

Stock selection in Australia was the largest source of negative return, with the market underweight detracting further. Selections and positioning in the Australian Materials, Energy, and Financial sectors were particularly costly. Metals and mining holding Bluescope Steel was the worst performer, falling after the company announced plans to sell stock at a 23% discount to reduce debt. Oil and gas holdings Santos and Origin Energy were also among the most costly positions, tumbling in tandem with receding commodity prices, which ended 2008 down more than 50% from their July highs.

Stock selection in the U.K. also weighed heavily on returns. Telecom giant BT Group was a notable detractor after analysts downgraded the stock on concerns that its mounting pension deficit would require the company to cut its dividend. A combination of stock selection and market underweighting in Sweden also hindered performance. Selections in the Swedish Financial sector were most costly, including Nordea Bank, after loan losses in late 2008 led the lender to announce plans to cut its dividend and attempt to raise 3 billion euros.

 

Portfolio Statistics

Economic Sectors

% of Total Investments

Consumer Discretionary

14.6%

Consumer Staples

8.1%

Energy

3.6%

Financials

20.5%

Health Care

10.4%

Industrials

10.8%

Information Technology

17.1%

Limited Partnership Interest

0.7%

Materials

5.0%

Telecommunication Services

7.4%

Utilities

1.2%

Venture Capital

0.6%

Total

100%

 

On the other hand, the Fund achieved some positive return from its stock selection in Germany, where insurance company Muenchener Rueckversicherungs led gains.

In terms of country allocations, the portfolio lost notable value from its overweighting in Japan. The Japanese equity market was among the more tepid ones during the period, as record drops in exports coupled with subsequent yen strength darkened the corporate profit outlook. However, this was partially offset by an overweight to Canada and underweights to Italy and Germany.

Outlook

Recent improvements in housing-market and industrial-output data in key economies suggest the global recession is winding down. However, the employment picture remains muted in most major economies, and while the pace of export declines has slowed, a meaningful recovery in consumer spending has yet to take place. Meanwhile, tight credit conditions are likely to continue for some time, dampening the pace of recovery.

We had noted earlier in the year that equity markets were likely to recover in advance of the global economy, and this has certainly been in the case in 2009. The rally has been volatile and narrow, however, with a focus on speculative stocks of low quality and high risk. A more sustainable market recovery, driven by earnings and other tangible measures of shareholder value, has not yet occurred.

Uncertainty in equity markets will likely persist for the next few months. However, as market volatility continues to come down and the global economic recovery gains firmer footing, we would expect to see more broad-based stock gains. Valuations have edged up in recent months, but the differences between current low and high valuations of stocks are still wide due to the split nature of the market rally so far this year. We believe this indicates much untapped potential in many sectors of the global equity markets.

October 2009

 

Source for returns cited: MSCI. Copyright MSCI 2009. All Rights Reserved. Unpublished. PROPRIETARY TO MSCI.

As of September 30, 2009, the following companies represented the following percentages of Fund net assets: Bluescope Steel 0.54%, Santos 2.56%, Origin Energy 0.14%, BT Group 1.00%, Nordea Bank 0%, and Muenchener Rueckversicherungs. 0.58% All holdings are subject to change without notice.

 

Shareholder Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) and redemption fees; and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (April 1, 2009 to September 30, 2009).

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Beginning
Account Value
4/1/09

Ending Account
Value
9/30/09

Expenses Paid
During Period*
4/1/09 - 9/30/09

Class A

 

 

 

Actual

$1,000.00

$1,459.30

$11.14

Hypothetical

$1,000.00

$1,016.01

$9.13

(5% return per year before expenses)

 

 

 

Class B

 

 

 

Actual

$1,000.00

$1,452.00

$18.56

Hypothetical

$1,000.00

$1,009.93

$15.21

(5% return per year before expenses)

 

 

 

Class C

 

 

 

Actual

$1,000.00

$1,454.20

$16.73

Hypothetical

$1,000.00

$1,011.44

$13.71

(5% return per year before expenses)

 

 

 

Class I

 

 

 

Actual

$1,000.00

$1,465.80

$6.49

Hypothetical

$1,000.00

$1,019.80

$5.32

(5% return per year before expenses)

 

 

 

 

 

 

 

Class Y

 

 

 

Actual

$1,000.00

$1,463.30

$8.58

Hypothetical

$1,000.00

$1,018.10

$7.03

(5% return per year before expenses)

 

 

 

* Expenses are equal to the Fund's annualized expense ratio of 1.81%, 3.02%, 2.72%, 1.05% and 1.39% for Class A, Class B, Class C, Class I and Class Y, respectively, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).

 

Report of Independent Registered Public Accounting Firm

The Board of Directors of Calvert World Values Fund, Inc. and Shareholders of Calvert World Values International Equity Fund:

We have audited the accompanying statement of net assets of the Calvert World Values International Equity Fund (the Fund), a series of the Calvert World Values Fund, Inc., as of September 30, 2009, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of September 30, 2009, by correspondence with custodians and brokers. As to securities purchased or sold but not yet received or delivered, we performed other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Calvert World Values International Equity Fund as of September 30, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

KPMG LLP
Philadelphia, Pennsylvania
November 23, 2009

 

Statement of Net Assets
September 30, 2009

Equity Securities - 97.6%

Shares

Value

Australia - 4.0%

 

 

Amcor Ltd.

338,199

$1,634,915

BlueScope Steel Ltd.

858,808

2,219,761

Flight Centre Ltd.

83,966

1,107,356

OneSteel Ltd.

188,578

504,053

Origin Energy Ltd.

40,532

583,527

Santos Ltd.

788,948

10,578,752

 

 

16,628,364

 

 

 

Austria - 0.0%

 

 

Mayr Melnhof Karton AG

1,181

119,673

 

 

 

Belgium - 2.5%

 

 

AGFA-Gevaert NV*

99,816

549,020

Delhaize Group

107,157

7,436,440

D'ieteren SA

1,345

495,818

Fortis NV*

394,930

1,849,293

 

 

10,330,571

 

 

 

Canada - 4.5%

 

 

Alimentation Couche Tard, Inc., Class B

78,900

1,379,821

Bank of Nova Scotia

19,900

907,068

Bombardier, Inc., Class B

248,000

1,149,615

EnCana Corp.

2,716

157,060

Magna International, Inc.

49,600

2,110,943

Royal Bank of Canada

76,200

4,090,202

Sierra Wireless, Inc.*

51,000

508,980

Talisman Energy, Inc.

199,400

3,464,834

Toronto-Dominion Bank

70,707

4,566,954

 

 

18,335,477

 

 

 

Denmark - 0.5%

 

 

Danske Bank A/S*

53,500

1,400,785

H. Lundbeck A/S

30,431

630,840

 

 

2,031,625

 

 

 

Finland - 0.8%

 

 

Stora Enso Oyj*

444,219

3,093,171

Tieto Oyj

16,442

327,110

 

 

3,420,281

 

 

 

France - 10.8%

 

 

Atos Origin SA*

79,194

3,996,789

BNP Paribas:

 

 

     Common Stock

76,416

6,103,470

     Rights*

76,416

165,442

 

 

 

 

 

 

Equity Securities - Cont'd

Shares

Value

France - Cont'd

 

 

Cap Gemini SA

99,681

$5,219,569

CNP Assurances SA

16,870

1,718,349

France Telecom SA

26,001

692,437

Havas SA

116,987

496,119

Nexans SA

12,067

974,932

PPR SA

39,569

5,070,017

PSA Peugeot Citroen SA*

134,083

4,086,647

Sanofi-Aventis SA

192,501

14,122,246

Thomson SA*

437,429

891,371

Valeo SA*

44,707

1,176,213

 

 

44,713,601

 

 

 

Germany - 5.8%

 

 

Allianz SE

43,019

5,372,364

Celesio AG

95,334

2,627,414

Deutsche Bank AG

68,209

5,232,938

Deutsche Post AG

250,702

4,694,265

Muenchener Rueckversicherungs AG

15,048

2,400,074

Suedzucker AG

176,470

3,575,366

 

 

23,902,421

 

 

 

Greece - 0.3%

 

 

National Bank of Greece SA*

34,325

1,230,202

 

 

 

Hong Kong - 0.1%

 

 

Jardine Strategic Holdings Ltd.

33,000

559,680

 

 

 

Hungary - 0.7%

 

 

Egis Gyogyszergyar Nyrt

142

15,100

OTP Bank plc*

100,943

2,876,396

 

 

2,891,496

 

 

 

India - 0.4%

 

 

Patni Computer Systems Ltd. (ADR)

6,800

125,800

State Bank of India Ltd. (GDR)

14,355

1,304,869

 

 

1,430,669

 

 

 

Italy - 2.1%

 

 

Esprinet SpA

13,043

139,474

Indesit Co. SpA*

13,772

137,197

Italcementi SpA

148,919

2,291,742

Seat Pagine Gialle SpA*

2,426,808

816,513

UniCredit SpA*

1,375,179

5,371,188

 

 

8,756,114

 

 

 

 

 

 

Equity Securities - Cont'd

Shares

Value

Japan - 26.6%

 

 

77 Bank Ltd.

18,000

$102,966

Aisin Seiki Co. Ltd.

205,000

5,015,921

Alps Electric Co. Ltd.*

126,000

729,211

Astellas Pharma, Inc.

205,800

8,484,464

Brother Industries Ltd.

271,700

3,266,289

Central Glass Co. Ltd.

79,000

352,170

Central Japan Railway Co.

328

2,363,667

Chuo Denki Kogyo Co. Ltd.

19,000

151,991

CSK Holdings Corp.*

225,800

855,217

Dai Nippon Printing Co. Ltd.

68,000

939,031

Daiichikosho Co. Ltd.

19,100

246,472

Daito Trust Construction Co. Ltd.

82,700

3,621,965

Daiwa House Industry Co. Ltd.

290,000

3,045,640

DIC Corp.

408,000

583,476

DTS Corp.

8,000

73,381

East Japan Railway Co.

2,800

202,089

Fuji Media Holdings, Inc.

3,429

5,631,674

FUJIFILM Holdings Corp.

147,500

4,432,993

Fujikura Ltd.

402,000

1,976,202

Fujitsu Ltd.

1,212,000

7,948,651

Hino Motors Ltd.*

951,000

3,623,161

Hitachi Information Systems Ltd.

12,600

407,542

Ines Corp.

10,600

90,361

Kissei Pharmaceutical Co. Ltd.

10,000

256,969

Miraca Holdings, Inc.

27,400

896,955

Mitsubishi Steel Manufacturing Co. Ltd.*

107,000

218,770

NET One Systems Co. Ltd.

309

466,063

Nippo Corp.

10,000

81,895

Nippon Express Co. Ltd.

928,000

3,784,370

Nippon Sheet Glass Co. Ltd.

317,000

1,062,511

Nippon Telegraph & Telephone Corp.

206,000

9,574,437

Nippon Television Network Corp.

6,470

932,495

Nissan Motor Co. Ltd.*

981,700

6,657,638

Nisshin Seifun Group, Inc.

5,500

77,180

NSD Co. Ltd.

36,300

392,586

NTT Data Corp.

787

2,528,811

Ohsho Food Service Corp.

19,500

589,324

Sanwa Holdings Corp.

216,000

745,701

Seiko Epson Corp.

8,600

129,329

ShinMaywa Industries Ltd.

21,000

82,587

Sony Corp.

363,100

10,770,689

Sumitomo Bakelite Co. Ltd.

110,000

584,995

Suzuken Co. Ltd.

22,800

789,677

Takefuji Corp.

37,290

131,653

Toppan Printing Co. Ltd.

492,000

4,672,365

Toshiba TEC Corp.*

134,623

631,715

Toyo Engineering Corp.

51,000

174,359

Toyo Seikan Kaisha Ltd.

193,800

3,739,373

TS Tech Co. Ltd.

51,600

914,912

Uchida Yoko Co. Ltd.

18,923

62,791

Yamato Holdings Co. Ltd.

263,000

4,334,116

 

 

109,428,800

 

 

 

 

 

 

Equity Securities - Cont'd

Shares

Value

Mexico - 1.2%

 

 

America Movil SAB de CV

2,317,600

$5,079,930

 

 

 

Netherlands - 2.4%

 

 

Heijmans NV (CVA)*

53,732

121,676

ING Groep NV (CVA)*

236,642

4,223,296

Koninklijke Philips Electronics NV

107,415

2,614,678

Oce NV

7,149

46,266

Unilever NV (CVA)

87,479

2,520,343

USG People NV*

10,767

223,185

Wavin NV

140,857

305,988

 

 

10,055,432

 

 

 

New Zealand - 0.0%

 

 

Telecom Corp. of New Zealand Ltd.

70,053

134,734

 

 

 

Norway - 0.1%

 

 

Atea ASA

63,500

401,043

Norske Skogindustrier ASA*

49,000

96,570

 

 

497,613

 

 

 

Singapore - 0.6%

 

 

ComfortDelgro Corp. Ltd.

83,000

94,847

Oversea-Chinese Banking Corp. Ltd.

308,000

1,716,091

SembCorp Industries Ltd.

212,000

510,100

 

 

2,321,038

 

 

 

South Africa - 1.5%

 

 

Aveng Ltd.

485,516

2,783,663

BIDVest Group Ltd.

52,045

817,914

Investec Ltd.

190,167

1,440,212

Net 1 UEPS Technologies, Inc.*

27,000

565,920

Telkom SA Ltd.

38,383

219,913

VenFin Ltd.*

55,800

104,669

VenFin DD Holdings Ltd.*

55,800

76,264

 

 

6,008,555

 

 

 

South Korea - 3.3%

 

 

KT Corp. (ADR) (s)

598,200

10,396,716

LG Display Co. Ltd. (ADR)

220,900

3,165,497

 

 

13,562,213

 

 

 

Spain - 1.0%

 

 

Banco Bilbao Vizcaya Argentaria SA

223,602

3,967,677

 

 

 

 

 

 

Equity Securities - Cont'd

Shares

Value

Sweden - 0.3%

 

 

Holmen AB, Series B

6,297

$173,267

Svenska Cellulosa AB, Series B

69,378

939,583

Telefonaktiebolaget LM Ericsson, Series B

23,852

239,279

 

 

1,352,129

 

 

 

Switzerland - 4.6%

 

 

Credit Suisse Group AG

49,736

2,756,055

Novartis AG

160,000

7,994,989

STMicroelectronics NV

849,880

8,005,268

Valora Holding AG

1,508

358,961

 

 

19,115,273

 

 

 

Taiwan - 2.4%

 

 

AU Optronics Corp. (ADR)

544,312

5,268,940

United Microelectronics Corp. (ADR)*

1,234,663

4,691,720

 

 

9,960,660

 

 

 

Thailand - 0.3%

 

 

Thai Airways International PCL*

734,400

490,186

Thanachart Capital PCL

1,058,400

551,217

 

 

1,041,403

 

 

 

United Kingdom - 15.8%

 

 

Aegis Group plc

1,247,517

2,235,830

Aviva plc

237,836

1,705,402

Beazley plc

104,099

196,563

BT Group plc

2,002,498

4,165,716

Cadbury plc

303,010

3,893,558

Close Brothers Group plc

228,618

2,912,042

CSR plc*

114,205

857,284

De La Rue plc

68,348

982,147

Dimension Data Holdings plc:

 

 

     Johannesburg Exchange

129,651

130,794

     London Exchange

295,595

298,706

FirstGroup plc

106,835

707,251

GlaxoSmithKline plc

204,658

4,026,535

HMV Group plc

630,550

1,058,447

HSBC Holdings plc

286,807

3,286,071

International Power plc

936,650

4,331,610

J Sainsbury plc

752,745

3,914,762

Johnson Matthey plc

47,028

1,044,528

Kingfisher plc

1,081,702

3,685,170

Legal & General Group plc

2,498,210

3,509,924

Logica plc

2,645,263

5,507,067

Mondi plc

163,547

808,416

National Express Group plc

84,953

649,802

Northern Foods plc

88,687

99,981

Reckitt Benckiser Group plc

33,537

1,641,103

Schroders plc

60,395

1,056,320

Severn Trent plc

43,152

670,148

 

 

 

 

 

 

Equity Securities - Cont'd

Shares

Value

United Kingdom - Cont'd

 

 

Stagecoach Group plc

249,313

$649,492

Tate & Lyle plc

359,886

2,434,861

Trinity Mirror plc

209,695

576,482

William Morrison Supermarkets plc

1,441,565

6,396,734

Yell Group plc*

1,610,333

1,515,190

 

 

64,947,936

 

 

 

United States - 5.0%

 

 

Acxiom Corp.*

17,100

161,766

Allied Capital Corp.

25,200

77,364

APAC Customer Services, Inc.*

19,500

115,245

Apogee Enterprises, Inc.

10,000

150,200

Barnes & Noble, Inc.

17,500

388,850

Compuware Corp.*

76,655

561,881

Conexant Systems, Inc.*

42,400

116,176

Conseco, Inc.*

61,500

323,490

CTS Corp.

8,900

82,770

Deluxe Corp.

4,600

78,660

Distributed Energy Systems Corp.*

308,138

1,849

DST Systems, Inc.*

27,200

1,218,560

Earthlink, Inc.

23,800

200,158

EMCOR Group, Inc.*

24,700

625,404

Evergreen Solar, Inc.*

1,400

2,688

EW Scripps Co.*

22,300

167,250

Gannett Co., Inc.

219,600

2,747,196

H2Gen Innovations, Inc.:

 

 

     Common Stock (b)(i)*

2,077

-

     Common Warrants (strike price $1.00/share, expires

 

 

     10/31/13) (b)(i)*

27,025

-

     Series A, Preferred (b)(i)*

69,033

-

     Series A, Preferred Warrants (strike price $1.00/share, expires

 

 

     10/10/12) (b)(i)*

1,104

-

     Series B, Preferred (b)(i)*

161,759

-

     Series C, Preferred (b)(i)*

36,984

-

Hawaiian Holdings, Inc.*

51,100

422,086

International Business Machines Corp.

35,400

4,234,194

Invacare Corp.

3,600

80,208

MeadWestvaco Corp.

99,500

2,219,845

Molex, Inc.

5,400

112,752

Pfizer, Inc.

118,400

1,959,520

Photronics, Inc.*

33,700

159,738

Powerspan Corp.:

 

 

     Series A, Preferred (b)(i)*

45,455

385,655

     Series B, Preferred (b)(i)*

20,000

203,548

     Series C, Preferred (b)(i)*

239,764

824,788

     Series D, Preferred (b)(i)*

45,928

157,993

     Series D, Preferred Warrants (strike price $3.44/share,

 

 

     expires 12/31/12) (b)(i)*

2,347

-

RF Technology, Inc. (b)(i)*

365,374

192,004

 

 

 

 

 

 

Equity Securities - Cont'd

Shares

Value

United States - Cont'd

 

 

SMARTHINKING, Inc.:

 

 

     Series 1-A, Convertible Preferred (b)(i)*

104,297

$172,388

     Series 1-B, Convertible Preferred (b)(i)*

163,588

31,050

     Series 1-B, Preferred Warrants (strike price $0.01/share, expires

 

 

     5/26/15) (b)(i)*

11,920

2,143

     Series 1-B, Preferred Warrants (strike price $1.53/share, expires

 

 

     6/1/15) (b)(i)*

32,726

--

Steak N Shake Co.*

13,700

161,249

Steelcase, Inc.

28,300

175,743

Tech Data Corp.*

14,400

599,184

Transatlantic Holdings, Inc.

7,100

356,207

Unisys Corp.*

220,700

589,269

Wright Express Corp.*

13,800

407,238

 

 

20,466,309

 

 

 

     Total Equity Securities (Cost $386,631,073)

 

402,289,876

 

 

 

 

Adjusted

 

Limited Partnership Interest - 0.8%

Basis

 

Balkan Financial Sector Equity Fund CV (b)(i)*

$368,638

314,696

China Environment Fund 2004 (b)(i)*

-

224,594

Emerald Cleantech Fund I (b)(i)*

920,045

511,238

GNet Defta Development Holdings LLC (a)(b)(i)*

400,000

363,504

SEAF Central and Eastern European Growth Fund LLC (a)(b)(i)*

330,740

400,885

SEAF India International Growth Fund LLC (b)(i)*

473,932

455,433

ShoreCap International LLC (b)(i)*

446,827

790,463

Terra Capital (b)(i)*

469,590

1

 

 

 

     Total Limited Partnership Interest (Cost $3,409,772)

 

3,060,814

 

 

 

 

 

 

 

Principal

 

Certificates of Deposit - 0.0%

Amount

 

Self Help Credit Union, 2.75%, 2/22/10 (b)(k)

100,000

99,770

 

 

 

     Total Certificates of Deposit (Cost $100,000)

 

99,770

 

 

 

Venture Capital Debt Obligations - 0.1%

 

 

Access Bank plc, 8.477%, 8/29/12 (b)(i)

500,000

531,136

Mayer Laboratories, Inc., 6.00%, 12/31/01 (b)(i)(w)

58,060

14,515

 

 

 

     Total Venture Capital Debt Obligations (Cost $558,060)

 

545,651

 

 

 

 

 

 

 

Principal

 

High Social Impact Investments - 1.0%

Amount

Value

Calvert Social Investment Foundation Notes, 1.76%, 7/1/11 (b)(i)(r)

$4,431,583

$4,260,480

 

 

 

     Total High Social Impact Investments (Cost $4,431,583)

 

4,260,480

 

 

 

 

 

 

 

 

 

      TOTAL INVESTMENTS (Cost $395,130,488) - 99.5%

 

410,256,591

      Other assets and liabilities, net - 0.5%

 

1,901,797

      Net Assets - 100%

 

$412,158,388

 

 

 

Net Assets Consist of:

 

 

Paid-in capital applicable to the following shares of common stock with

 

 

     250,000,000 shares of $0.01 par value shares authorized:

 

 

          Class A: 19,594,688 shares outstanding

 

$390,982,070

          Class B: 725,240 shares outstanding

 

15,712,895

          Class C: 1,997,289 shares outstanding

 

41,175,821

          Class I: 7,266,157 shares outstanding

 

157,705,505

          Class Y: 48,913 shares outstanding

 

521,633

Undistributed net investment income

 

3,453,338

Accumulated net realized gain (loss) on investments and foreign

 

 

     currency transactions

 

(212,521,993)

Net unrealized appreciation (depreciation) on investments,

 

 

     foreign currencies, and assets and liabilities denominated

 

 

     in foreign currencies

 

15,129,119

          Net Assets

 

$412,158,388

 

 

 

Net Asset Value Per Share

 

 

Class A (based on net assets of $270,900,246)

 

$13.83

Class B (based on net assets of $8,993,317)

 

$12.40

Class C (based on net assets of $24,107,049)

 

$12.07

Class I (based on net assets of $107,456,171)

 

$14.79

Class Y (based on net assets of $701,605)

 

$14.34

Abbreviations:
ADR: American Depositary Receipt
CVA: Certificaten Van Aandelen
GDR: Global Depositary Receipt
LLC: Limited Liability Corporation
PCL: Public Company Limited

 

* Non-income producing security.

(a) Affiliated company.

(b) This security was valued by the Board of Directors. See Note A.

(i) Restricted securities represent 2.4% of net assets of the Fund.

(k) These certificates of deposit are fully insured by agencies of the federal government.

(r) The coupon rate shown on floating or adjustable rate securities represents the rate at period end.

(s) 165,000 shares of KT Corp. have been soft segregated in order to cover outstanding commitments to certain limited partnership investments within the Fund. There are no restrictions on the trading of this security.

(w) Mayer Laboratories, Inc. is in default for principal and interest. Past due accrued interest as of September 30, 2009 totaled $1,792. Subsequent to year end, the Fund received a $921 interest payment.

 

See notes to financial statements.

 

Restricted Securities

Acquisition Dates

Cost

Access Bank plc, 8.477%, 8/29/12

8/29/07

$500,000

Balkan Financial Sector Equity Fund CV, LP

1/12/06 - 7/2/09

368,638

Calvert Social Investment Foundation Notes, 1.76%, 7/1/11

7/1/08

4,431,583

China Environment Fund 2004 LP

9/15/05 - 4/1/09

-

Emerald Cleantech Fund I, LP

7/19/01 - 7/16/09

920,045

GNet Defta Development Holdings LLC, LP

8/30/05

400,000

H2Gen Innovations, Inc.:

 

 

     Common Stock

11/4/04

-

     Common Warrants (strike price $1.00/share, expires 10/31/13)

11/4/04

-

     Series A, Preferred

11/4/04

251,496

     Series A, Preferred Warrants (strike price $1.00/share,

 

 

     expires 10/10/12)

11/4/04

-

     Series B, Preferred

10/21/04 - 10/27/04

161,759

     Series C, Preferred

6/1/06

52,886

Mayer Laboratories, Inc., 6.00%, 12/31/01

12/31/96

58,060

Powerspan Corp.:

 

 

     Series A, Preferred

8/20/97

250,000

     Series B, Preferred

10/5/99

200,000

     Series C, Preferred

12/21/04 - 6/12/08

273,331

     Series D, Preferred

6/20/08

157,996

     Series D, Preferred Warrants (strike price $3.44/share,

 

 

     expires 12/31/12)

12/5/07 - 6/20/08

-

RF Technology, Inc.

7/17/06

299,990

SEAF Central and Eastern European Growth Fund

 

 

     LLC, LP

8/10/00 - 9/23/08

330,740

SEAF India International Growth Fund LLC, LP

3/22/05 - 5/8/09

473,932

ShoreCap International LLC, LP

8/12/04 - 12/15/08

446,827

SMARTHINKING, Inc.:

 

 

     Series 1-A, Convertible Preferred

4/22/03 - 5/27/05

159,398

     Series 1-B, Convertible Preferred

6/10/03

250,000

     Series 1-B, Preferred Warrants (strike price $0.01/share,

 

 

     expires 5/26/15)

5/27/05

-

     Series 1-B, Preferred Warrants (strike price $1.53/share,

 

 

     expires 6/1/15) (b)(i)*

9/19/00

-

Terra Capital, LP

11/23/98 - 3/14/06

469,590

 

 

See notes to financial statements.

 

 

Statement of Operations
Year Ended September 30, 2009

Net Investment Income

 

 

 

Investment Income:

 

 

 

     Dividend income (net of foreign taxes withheld of $744,157)

 

$9,747,858

 

     Interest income

 

236,176

 

          Total investment income

 

9,984,034

 

 

 

 

 

Expenses:

 

 

 

     Investment advisory fee

 

2,595,408

 

     Transfer agency fees and expenses

 

968,678

 

          Administrative fees

 

1,043,479

 

     Distribution Plan expenses:

 

 

 

          Class A

 

575,600

 

          Class B

 

81,845

 

          Class C

 

210,120

 

     Directors' fees and expenses

 

58,680

 

     Custodian fees

 

222,540

 

     Registration fees

 

67,175

 

     Reports to shareholders

 

164,195

 

     Professional fees

 

48,211

 

     Miscellaneous

 

92,151

 

          Total expenses

 

6,128,082

 

          Reimbursement from Advisor:

 

 

 

          Class Y

 

(12,557)

 

          Fees waived

 

(24,842)

 

          Fees paid indirectly

 

(2,801)

 

          Net expenses

 

6,087,882

 

 

 

 

 

Net Investment Income

 

3,896,152

 

 

 

 

 

Realized and Unrealized Gain (Loss)

 

 

 

Net realized gain (loss) on:

 

 

 

     Investments

 

(185,246,671)

 

     Foreign currency transactions

 

(8,959)

 

 

 

(185,255,630)

 

 

 

 

 

Change in unrealized appreciation or (depreciation) on:

 

 

 

     Investments and foreign currencies

 

141,780,300

 

     Assets and liabilities denominated in foreign currencies

 

48,517

 

 

 

141,828,817

 

 

 

 

 

          Net Realized and Unrealized Gain

 

 

 

           (Loss)

 

(43,426,813)

 

 

 

 

 

          Increase (Decrease) in Net Assets

 

 

 

          Resulting From Operations

 

($39,530,661)

 

See notes to financial statements.

 

Statements of Changes in Net Assets

 

 

Year Ended

Year Ended

 

 

September 30,

September 30,

Increase (Decrease) in Net Assets

 

2009

2008

Operations:

 

 

 

     Net investment income

 

$3,896,152

$12,648,789

     Net realized gain (loss)

 

(185,255,630)

(19,039,370)

     Change in unrealized appreciation or (depreciation)

 

141,828,817

(257,089,949)

 

 

 

 

          Increase (Decrease) in Net Assets

 

 

 

          Resulting From Operations

 

(39,530,661)

(263,480,530)

 

 

 

 

Distributions to shareholders from:

 

 

 

     Net investment income:

 

 

 

          Class A Shares

 

(7,682,721)

(5,440,293)

          Class B Shares

 

(148,212)

(49,983)

          Class C Shares

 

(420,523)

(155,979)

          Class I Shares

 

(3,518,021)

(2,781,430)

          Class Y Shares

 

(1)

--

     Net realized gain:

 

 

 

          Class A Shares

 

(634,873)

(41,696,598)

          Class B Shares

 

(25,817)

(1,960,365)

          Class C Shares

 

(67,464)

(4,444,988)

          Class I Shares

 

(222,338)

(13,436,422)

          Class Y Shares

 

(3)

--

     Total distributions

 

(12,719,973)

(69,966,058)

 

 

 

 

Capital share transactions:

 

 

 

     Shares sold:

 

 

 

          Class A Shares

 

46,807,216

77,407,586

          Class B Shares

 

518,403

1,731,864

          Class C Shares

 

2,179,011

8,250,661

          Class I Shares

 

22,384,629

42,720,844

          Class Y Shares

 

595,466

--

     Reinvestment of distributions:

 

 

 

          Class A Shares

 

7,616,106

43,518,865

          Class B Shares

 

153,830

1,776,645

          Class C Shares

 

380,058

3,463,645

          Class I Shares

 

3,486,897

14,989,462

          Class Y Shares

 

4

--

     Redemption fees:

 

 

 

          Class A Shares

 

7,071

2,660

          Class B Shares

 

47

83

          Class C Shares

 

134

845

          Class I Shares

 

59

307

          Class Y Shares

 

3

--

See notes to financial statements.

 

Statements of Changes in Net Assets

 

 

Year Ended

Year Ended

 

 

 

September 30,

September 30,

 

Increase (Decrease) in Net Assets (Cont'd)

 

2009

2008

 

Shares redeemed:

 

 

 

 

     Class A Shares

 

($71,757,677)

($117,796,536)

 

     Class B Shares

 

(2,569,260)

(5,302,843)

 

     Class C Shares

 

(6,216,320)

(8,911,475)

 

     Class I Shares

 

(25,214,435)

(45,125,307)

 

     Class Y Shares

 

(73,687)

--

 

          Total capital share transactions

 

(21,702,445)

16,727,306

 

 

 

 

 

 

Total Increase (Decrease) in Net Assets

 

(73,953,079)

(316,719,282)

 

 

 

 

 

 

 

 

 

 

 

Net Assets

 

 

 

 

Beginning of year

 

486,111,467

802,830,749

 

End of year (including undistributed net investment

 

 

 

 

     income of $3,453,338 and $11,347,922, respectively)

 

$412,158,388

$486,111,467

 

 

 

 

 

 

 

 

 

 

 

Capital Share Activity

 

 

 

 

Shares sold:

 

 

 

 

     Class A Shares

 

4,194,520

3,705,938

 

     Class B Shares

 

48,508

90,749

 

     Class C Shares

 

226,686

444,778

 

     Class I Shares

 

1,846,796

2,001,000

 

     Class Y Shares

 

54,292

--

 

Reinvestment of distributions:

 

 

 

 

     Class A Shares

 

715,552

1,928,690

 

     Class B Shares

 

16,008

87,624

 

     Class C Shares

 

40,709

175,843

 

     Class I Shares

 

307,732

624,191

 

Shares redeemed:

 

 

 

 

     Class A Shares

 

(6,481,230)

(5,844,907)

 

     Class B Shares

 

(253,088)

(294,793)

 

     Class C Shares

 

(634,154)

(513,302)

 

     Class I Shares

 

(2,100,701)

(2,103,913)

 

     Class Y Shares

 

(5,379)

--

 

Total capital share activity

 

(2,023,749)

301,898

 

 

See notes to financial statements.

 

Notes to Financial Statements

 

Note A -- Significant Accounting Policies

General: The Calvert World Values International Equity Fund (the "Fund"), a series of Calvert World Values Fund, Inc., is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The operation of each series is accounted for separately. The Fund offers five classes of shares of capital stock. Class A shares are sold with a maximum front-end sales charge of 4.75%. Class B shares are sold without a front-end sales charge. With certain exceptions, the Fund will impose a deferred sales charge at the time of redemption, depending on how long investors have owned the shares. Class C shares are sold without a front-end sales charge. With certain exceptions, the Fund will impose a deferred sales charge on shares sold within one year of purchase. Class B and Class C shares have higher levels of expenses than Class A shares. Class I shares require a minimum account balance of $1,000,000. The $1 million minimum initial investment may be waived for certain institutional accounts, where it is believed to be in the best interest of the Fund and its shareholders. Class I shares have no front-end or deferred sales charge and have lower levels of expenses than Class A shares. Effective October 31, 2008, the Fund began to offer Class Y shares. Class Y shares are generally only available to wrap or similar fee-based programs offered by financial intermediaries that have entered into an agreement with the Fund's Distributor to offer Class Y shares. Class Y shares have no front-end or deferred sales charge. Each class has different: (a) dividend rates, due to differences in Distribution Plan expenses and other class-specific expenses, (b) exchange privileges and (c) class-specific voting rights.

Security Valuation: Net asset value per share is determined every business day as of the close of the regular session of the New York Stock Exchange (generally 4:00 p.m. Eastern time). The Fund uses independent pricing services approved by the Board of Directors to value its investments wherever possible. Securities for which market quotations are available are valued at last sale price or official closing price on the primary market or exchange in which they trade. Foreign securities are valued based on quotations from the principal market in which such securities are normally traded. If events occur after the close of the principal market in which foreign securities are traded, and before the Fund's net asset value is determined, that are expected to materially affect the value of those securities, then they are valued at their fair value taking these events into account. Short-term notes are stated at amortized cost, which approximates fair value. The Fund may invest in securities whose resale is subject to restrictions. Investments for which market quotations are not available or deemed not reliable are fair valued in good faith under the direction of the Board of Directors.

The Fund has retained a third party fair value pricing service to quantitatively analyze the price movement of its holdings on foreign exchanges and to automatically fair value if the variation from the prior day's closing price exceeds specified parameters.

In determining fair value, the Board considers all relevant qualitative and quantitative information available. These factors are subject to change over time and are reviewed periodically. The values assigned to fair value investments are based on available information and do not necessarily represent amounts that might ultimately be realized. Further, because of the inherent uncertainty of valuation, those estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and the differences could be material.

At September 30, 2009, securities valued at $9,936,284 or 2.4% of net assets, were fair valued in good faith under the direction of the Board of Directors.

The Fund utilizes various methods to measure the fair value of its investments. Generally Accepted Accounting Principles (GAAP) establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used to value assets and liabilities at measurement date. These inputs are summarized in the three broad levels listed below:

Level 1 -- quoted prices in active markets for identical securities

Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy during the period. For additional information on the Fund's policy regarding valuation of investments, please refer to the Fund's most recent prospectus.

The following is a summary of the inputs used to value the Fund's net assets as of September 30, 2009:

 

Valuation Inputs

Investments in Securities

Level 1

Level 2

Level 3

Total

Equity securities*

$400,320,307

--

$1,969,569

$402,289,876

Limited partnership interest

--

--

3,060,814

3,060,814

Other debt obligations

--

--

4,905,901

4,905,901

TOTAL

$400,320,307

--

$9,936,284**

$410,256,591

* For further breakdown of equity securities by country, please refer to the Statement of Net Assets.

**Level 3 securities represent 2.4% of net assets.

Repurchase Agreements: The Fund may enter into repurchase agreements with recognized financial institutions or registered broker/dealers and, in all instances, holds underlying securities with a value exceeding the total repurchase price, including accrued interest. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its value and a possible loss of income or value if the counterparty fails to perform in accordance with the terms of the agreement.

Restricted Securities: The Fund may invest in securities that are subject to legal or contractual restrictions on resale. Generally, these securities may only be sold publicly upon registration under the Securities Act of 1933 or in transactions exempt from such -registration. Information regarding restricted securities is included at the end of the Fund's Statement of Net Assets.

Security Transactions and Net Investment Income: Security transactions are accounted for on trade date. Realized gains and losses are recorded on an identified cost basis and may include proceeds from litigation. Dividend income is recorded on the ex-dividend date or, in the case of dividends on -certain foreign securities, as soon as the Fund is informed of the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Interest income, which includes amortization of premium and accretion of discount on debt securities, is accrued as earned. Investment income and realized and unrealized gains and losses are allocated to separate classes of shares based upon the relative net assets of each class. Expenses arising in connection with a class are charged directly to that class. Expenses common to the classes are allocated to each class in proportion to their relative net assets. Withholding taxes on foreign dividends have been provided for in accordance with the Fund's understanding of the applicable country's tax rules and rates.

Foreign Currency Transactions: The Fund's accounting records are maintained in U. S. dollars. For valuation of assets and liabilities on each date of net asset value determination, foreign denominations are converted into U.S. dollars using the current exchange rate. Security transactions, income and expenses are translated at the prevailing rate of exchange on the date of the event. The effect of changes in foreign exchange rates on securities and foreign currencies is included in the net realized and unrealized gain or loss on securities and foreign currencies.

Distributions to Shareholders: Distributions to shareholders are recorded by the Fund on ex-dividend date. Dividends from net investment income and distributions from net realized capital gains, if any, are paid at least annually. Distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles; accordingly, periodic reclassifications are made within the Fund's capital accounts to reflect income and gains available for distribution under income tax regulations.

Estimates: The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reported period. Actual results could differ from those estimates.

Redemption Fees: The Fund charges a 2% redemption fee on redemptions, including exchanges, made within 30 days of purchase in the same Fund (within seven days for Class I shares). The redemption fee is paid to the Class of the Fund from which the redemption is made, and is accounted for as an addition to paid-in capital. The fee is intended to discourage market-timers by ensuring that short-term trading costs are borne by the investors making the transactions and not the shareholders already in the Fund.

Expense Offset Arrangement: The Fund has an arrangement with its custodian bank whereby the custodian's fees may be paid indirectly by credits earned on the Fund's cash on deposit with the bank. These credits are used to reduce the Fund's expenses. Such a deposit arrangement may be an alternative to overnight investments.

Federal Income Taxes: No provision for federal income or excise tax is required since the Fund intends to continue to qualify as a regulated investment company under the Internal Revenue Code and to distribute substantially all of its taxable earnings.

Management has analyzed the Fund's tax positions taken for all open federal income tax years and has concluded that no provision for federal income tax is required in the Fund's financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service for a period of three years.

New Accounting Pronouncements: In July 2009, the Financial Accounting Standards Board (FASB) launched the FASB Accounting Standards CodificationTM as the single source of authoritative nongovernmental U.S. generally accepted accounting principles (GAAP). The Codification is effective for interim and annual periods ending after September 15, 2009. All existing accounting standards documents are superseded as described in FASB Statement No. 168, The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principles. All other accounting literature not included in the Codification is nonauthoritative.

Note B -- Related Party Transactions

Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by Calvert Group, Ltd. ("Calvert"), which is indirectly wholly owned by UNIFI Mutual Holding Company. The Advisor provides investment advisory services and pays the salaries and fees of officers and Directors of the Fund who are employees of the Advisor or its affiliates. For its services, the Advisor receives a monthly fee based on the following annual rates of average daily net assets: .75% on the first $250 million, .725% on the next $250 million and .675% on the excess of $500 million. Under the terms of the agreement, $245,577 was payable at year end. In addition, $116,180 was payable at year end for operating expenses paid by the Advisor during September 2009. For the year ended September 30, 2009, the Advisor waived $24,842 of its fee.

The Advisor has contractually agreed to limit net annual fund operating expenses through January 31, 2010 for Class I. The contractual expense cap is 1.10%. For the purposes of this expense limit, operating expenses do not include interest expense, brokerage commissions, taxes, and extraordinary expenses. To the extent any expense offset credits are earned, the Advisor's obligation under the contractual limitation may be reduced and the Advisor may benefit from the expense offset arrangement. The Advisor voluntarily reimbursed Class Y shares for expenses of $12,557 for the year ended September 30, 2009.

Calvert Administrative Services Company, an affiliate of the Advisor, provides administrative services to the Fund for an annual fee, payable monthly, of .35% for Classes A, B, C and Y, and .15% for Class I, based on their average daily net assets. Under the terms of the agreement, $100,052 was payable at year end.

Calvert Distributors, Inc., an affiliate of the Advisor, is the distributor and principal underwriter for the Fund. Distribution Plans, adopted by Class A, Class B and Class C shares, allow the Fund to pay the Distributor for expenses and services associated with distribution of shares. The expenses paid may not exceed .35%, 1.00% and 1.00% annually of average daily net assets of each Class A, Class B and Class C, respectively. The amount actually paid by the Fund is an annualized fee, payable monthly of .25%, 1.00% and 1.00% of the Fund's average daily net assets of Class A, Class B and Class C, respectively. Class I and Class Y shares do not have Distribution Plan expenses. Under the terms of agreement, $82,207 was payable at year end.

The Distributor received $34,873 as its portion of commissions charged on sales of the Fund's Class A shares for the year ended September 30, 2009.

Calvert Shareholder Services, Inc. ("CSSI"), an affiliate of the Advisor, is the shareholder servicing agent for the Fund. For its services, CSSI received a fee of $216,419 for the year ended September 30, 2009. Under the terms of the agreement, $16,783 was payable at year end. Boston Financial Data Services, Inc. is the transfer and dividend disbursing agent.

The Fund invests in Community Investment Notes issued by the Calvert Social Investment Foundation (the "CSI Foundation"). The CSI Foundation is a 501(c)(3) non-profit organization that receives in-kind support from the Calvert Group, Ltd. and its subsidiaries. The Fund has received from the Securities and Exchange Commission an exemptive order permitting the Fund to make investments in these notes under certain conditions.

Each Director of the Funds who is not an employee of the Advisor or its affiliates receives an annual retainer of $44,000 plus a meeting fee of $2,000 for each Board meeting attended. Additional fees of up to $5,000 annually may be paid to the committee chairs and $2,500 annually may be paid to committee members, plus a committee meeting fee of $500 for each committee meeting attended. Directors fees are allocated to each of the Funds served.

Note C -- Investment Activity

During the year, cost of purchases and proceeds from sales of investments, other than short-term securities, were $478,707,028 and $508,040,634, respectively.

The cost of investments owned at September 30, 2009 for federal income tax purposes was $396,213,961. Net unrealized appreciation aggregated $14,042,630, of which $44,978,965 related to appreciated securities and $30,936,335 related to depreciated -securities.

Net realized capital loss carryforwards for federal income tax purposes of $90,728,857 at September 30, 2009 may be utilized to offset future capital gains until expiration in September 2017.

The Fund intends to elect to defer net capital losses of $120,790,409 incurred from November 1, 2008 through September 30, 2009 and treat them as arising in the fiscal year ending September 30, 2010.

The tax character of dividends and distributions paid during the years ended September 30, 2009 and September 30, 2008 were as follows:

Distributions paid from:

 

2009

2008

     Ordinary income

 

$12,719,973

$31,200,583

     Long-term capital gain

 

-

38,765,475

          Total

 

$12,719,973

$69,966,058

As of September 30, 2009, the components of distributable earnings/(accumulated -losses) on a tax basis were as follows:

Undistributed ordinary income

$3,534,084

Capital loss carryforward

(90,728,857)

Unrealized appreciation (depreciation)

14,042,630

      Total

($73,152,143)

The differences between the components of distributable earnings on a tax basis and the amounts reflected in the statement of net assets are primarily due to temporary book-tax differences that will reverse in a subsequent period. These book-tax differences are due to wash sales, the deferral of post October losses, passive foreign investment companies, and partnerships.

Reclassifications, as shown in the table below, have been made to the Fund's components of net assets to reflect income and gains available for distribution (or available capital loss carryovers, as applicable) under income tax law and regulations. These reclassifications are due to permanent book-tax differences and have no impact on net assets. The primary permanent differences causing such reclassification for the Fund are due to foreign currency transactions, expired capital losses, and investments in partnerships and passive foreign investment companies.

Undistributed net investment income

($21,258)

Accumulated net realized gain (loss)

111,129

Paid-in capital

(89,871)

Note D -- Line of Credit

A financing agreement is in place with all Calvert Group Funds and State Street Corporation ("SSC"). Under the agreement, SSC provides an unsecured line of credit facility, in the aggregate amount of $50 million ($25 million committed and $25 million uncommitted), accessible by the Funds for temporary or emergency purposes only. Borrowings under this committed facility bear interest at the higher of the London Interbank Offered Rate, (LIBOR) or the overnight Federal Funds Rate plus 1.25% per annum. A commitment fee of .15% per annum is incurred on the unused portion of the committed facility, which is allocated to all participating funds. The Fund had $101,707 of outstanding borrowings at an interest rate of 1.46% at September 30, 2009. For the year ended September 30, 2009 -borrowings by the Fund under the Agreement were as follows:

 

Average
Daily
Balance

Weighted
Average
Interest
Rate

Maximum
Amount
Borrowed

Month of
Maximum
Amount
Borrowed

 

$307,536

1.07%

$5,991,340

December 2008

 

Note E -- Affiliated Companies

An affiliated company is a company in which the Fund has a direct or indirect ownership of, control of, or voting power over 5 percent or more of the outstanding voting shares. Affiliated companies of the Fund are as follows:

Affiliates

Cost

 Value

GNet Defta Development Holdings LLC, LP

$400,000

$363,504

SEAF Central & Eastern European Growth Fund LLC, LP

330,740

400,885

TOTALS

$730,740

$764,389

 

Note F -- Subsequent Events

In preparing the financial statements as of September 30, 2009, no subsequent events or transactions occurred through November 23, 2009, the date the financial statements were issued, that would have materially impacted the financial statements as presented.

 

Note G -- Other

In connection with certain venture capital investments, the Fund is committed to future capital calls, which will increase the Fund's investment in these securities. The aggregate amount of the future capital commitments totals $654,837 at September 30, 2009.

 

Notice to Shareholders (Unaudited)

The Fund designates $.34 per share as income derived from foreign sources and $.03 per share as foreign taxes paid for fiscal year ended September 30, 2009.

The Fund designates 100% of its ordinary dividends paid during this fiscal year as qualified dividend income subject to the maximum rate under Internal Revenue Code Section 1(h)(11).

Additional information will be provided to shareholders in January 2010 for use in preparing 2009 income tax returns.

 

Financial Highlights

 

 

 

Years Ended

 

 

 

September 30,

September 30,

September 30,

Class A Shares

 

2009 (z)

2008

2007

Net asset value, beginning

 

$15.31

$25.57

$23.87

Income from investment operations

 

 

 

 

     Net investment income

 

.11

.37

.22

     Net realized and unrealized gain (loss)

 

(1.19)

(8.46)

4.61

          Total from investment operations

 

(1.08)

(8.09)

4.83

Distributions from

 

 

 

 

     Net investment income

 

(.37)

(.24)

(.20)

     Net realized gain

 

(.03)

(1.93)

(2.93)

     Total distributions

 

(.40)

(2.17)

(3.13)

     Total increase (decrease) in net asset value

 

(1.48)

(10.26)

1.70

Net asset value, ending

 

$13.83

$15.31

$25.57

 

 

 

 

 

Total return*

 

(6.27%)

(34.31%)

21.72%

Ratios to average net assets:A

 

 

 

 

     Net investment income (loss)

 

.99%

1.81%

1.08%

     Total expenses

 

1.87%

1.65%

1.62%

     Expenses before offsets

 

1.86%

1.63%

1.60%

     Net expenses

 

1.86%

1.63%

1.60%

Portfolio turnover

 

135%

100%

82%

Net assets, ending (in thousands)

 

$270,900

$324,091

$546,564

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended

 

 

 

September 30,

September 30,

 

Class A Shares

 

2006

2005

 

Net asset value, beginning

 

$20.29

$16.60

 

Income from investment operations

 

 

 

 

     Net investment income

 

.24

.21

 

     Net realized and unrealized gain (loss)

 

3.51

3.59

 

          Total from investment operations

.

3.75

3.80

 

Distributions from

 

 

 

 

     Net investment income

 

(.17)

(.11)

 

     Net realized gain

 

--

--

 

          Total distributions

 

(.17)

(.11)

 

Total increase (decrease) in net asset value

 

3.58

3.69

 

Net asset value, ending

 

$23.87

$20.29

 

 

 

 

 

 

Total return*

 

18.58%

22.95%

 

Ratios to average net assets:A

 

 

 

 

     Net investment income (loss)

 

1.19%

1.23%

 

     Total expenses

 

1.73%

1.86%

 

     Expenses before offsets

 

1.72%

1.86%

 

     Net expenses

 

1.71%

1.85%

 

Portfolio turnover

 

120%

49%

 

Net assets, ending (in thousands)

 

$401,195

$297,151

 

See notes to financial highlights.

 

Financial Highlights

 

 

 

Years Ended

 

 

 

 

September 30,

September 30,

September 30,

 

Class B Shares

 

2009 (z)

2008

2007

 

Net asset value, beginning

 

$13.69

$23.11

$21.85

 

Income from investment operations

 

 

 

 

 

     Net investment income (loss)

 

(.02)

.12

.09

 

     Net realized and unrealized gain (loss)

 

(1.06)

(7.56)

4.10

 

          Total from investment operations

 

(1.08)

(7.44)

4.19

 

Distributions from

 

 

 

 

 

     Net investment income

 

(.18)

(.05)

--

 

     Net realized gain

 

(.03)

(1.93)

(2.93)

 

          Total distributions

 

(.21)

(1.98)

(2.93)

 

Total increase (decrease) in net asset value

 

(1.29)

(9.42)

1.26

 

Net asset value, ending

 

$12.40

$13.69

$23.11

 

 

 

 

 

 

 

Total return*

 

(7.47%)

(34.97%)

20.60%

 

Ratios to average net assets:A

 

 

 

 

 

     Net investment income (loss)

 

(.26%)

.78%

.13%

 

     Total expenses

 

3.12%

2.63%

2.57%

 

     Expenses before offsets

 

3.10%

2.61%

2.54%

 

     Net expenses

 

3.10%

2.60%

2.54%

 

Portfolio turnover

 

135%

100%

82%

 

Net assets, ending (in thousands)

 

$8,993

$12,512

$23,805

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended

 

 

 

 

September 30,

September 30,

 

 

Class B Shares

 

2006

2005

 

 

Net asset value, beginning

 

$18.61

$15.30

 

 

Income from investment operations

 

 

 

 

 

     Net investment income

.

.06

.15

 

 

     Net realized and unrealized gain (loss)

 

3.18

3.16

 

 

          Total from investment operations

 

3.24

3.31

 

 

Distributions from

 

 

 

 

 

     Net investment income

 

**

--

 

 

     Net realized gain

 

--

--

 

 

          Total distributions

 

**

--

 

 

Total increase (decrease) in net asset value

 

3.24

3.31

 

 

Net asset value, ending

 

$21.85

$18.61

 

 

 

 

 

 

 

 

Total return*

 

17.43%

21.63%

 

 

Ratios to average net assets:A

 

 

 

 

 

     Net investment income (loss)

 

.18%

.20%

 

 

     Total expenses

 

2.73%

2.92%

 

 

     Expenses before offsets

 

2.72%

2.92%

 

 

     Net expenses

 

2.70%

2.91%

 

 

Portfolio turnover

 

120%

49%

 

 

Net assets, ending (in thousands)

 

$18,053

$14,232

 

 

See notes to financial highlights.

Financial Highlights

 

 

Years Ended

 

 

September 30,

September 30,

September 30,

Class C Shares

2009 (z)

2008

2007

Net asset value, beginning

$13.31

$22.51

$21.34

Income from investment operations

 

 

 

     Net investment income

.01

.19

.13

     Net realized and unrealized gain (loss)

(1.03)

(7.40)

3.99

          Total from investment operations

(1.02)

(7.21)

4.12

Distributions from

 

 

 

     Net investment income

(.19)

(.06)

(.02)

     Net realized gain

(.03)

(1.93)

(2.93)

          Total distributions

(.22)

(1.99)

(2.95)

     Total increase (decrease) in net asset value

(1.24)

(9.20)

1.17

Net asset value, ending

$12.07

$13.31

$22.51

 

 

 

 

Total return*

(7.16%)

(34.86%)

20.81%

Ratios to average net assets:A

 

 

 

     Net investment income (loss)

.07%

1.01%

.31%

     Total expenses

2.79%

2.47%

2.43%

     Expenses before offsets

2.79%

2.45%

2.41%

     Net expenses

2.79%

2.45%

2.40%

Portfolio turnover

135%

100%

82%

Net assets, ending (in thousands)

$24,107

$31,475

$50,790

 

 

 

 

 

 

 

 

 

Years Ended

 

 

September 30,

September 30,

 

Class C Shares

2006

2005

 

Net asset value, beginning

$18.18

$14.91

 

Income from investment operations

 

 

 

     Net investment income

.13

.15

 

     Net realized and unrealized gain (loss)

3.06

3.12

 

          Total from investment operations

3.19

3.27

 

Distributions from

 

 

 

     Net investment income

(.03)

--

 

     Net realized gain

--

--

 

          Total distributions

(.03)

--

 

Total increase (decrease) in net asset value

3.16

3.27

 

Net asset value, ending

$21.34

$18.18

 

 

 

 

 

Total return*

17.55%

21.93%

 

Ratios to average net assets:A

 

 

 

     Net investment income (loss)

.38%

.38%

 

     Total expenses

2.57%

2.75%

 

     Expenses before offsets

2.56%

2.75%

 

     Net expenses

2.55%

2.74%

 

Portfolio turnover

120%

49%

 

Net assets, ending (in thousands)

$32,723

$22,856

 

See notes to financial highlights.

 

Financial Highlights

 

 

 

Years Ended

 

 

 

 

September 30,

September 30,

September 30,

 

Class I Shares

 

2009 (z)

2008

2007

 

Net asset value, beginning

 

$16.37

$27.15

$25.16

 

Income from investment operations

 

 

 

 

 

     Net investment income

 

.22

.48

.34

 

     Net realized and unrealized gain (loss)

 

(1.29)

(8.96)

4.93

 

          Total from investment operations

 

(1.07)

(8.48)

5.27

 

Distributions from

 

 

 

 

 

     Net investment income

 

(.48)

(.37)

(.35)

 

     Net realized gain

 

(.03)

(1.93)

(2.93)

 

          Total distributions

 

(.51)

(2.30)

(3.28)

 

Total increase (decrease) in net asset value

 

(1.58)

(10.78)

1.99

 

Net asset value, ending

 

$14.79

$16.37

$27.15

 

 

 

 

 

 

 

Total return*

 

(5.59%)

(33.84%)

22.49%

 

Ratios to average net assets:A

 

 

 

 

 

     Net investment income (loss)

 

1.80%

2.47%

1.74%

 

     Total expenses

 

1.08%

1.00%

.98%

 

     Expenses before offsets

 

1.07%

.98%

.96%

 

     Net expenses

 

1.07%

.97%

.96%

 

Portfolio turnover

 

135%

100%

82%

 

Net assets, ending (in thousands)

 

$107,456

$118,033

$181,672

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended

 

 

 

 

September 30,

September 30,

 

 

Class I Shares

 

2006

2005

 

 

Net asset value, beginning

 

$21.32

$17.45

 

 

Income from investment operations

 

 

 

 

 

     Net investment income

 

.37

.27

 

 

     Net realized and unrealized gain (loss)

 

3.72

3.88

 

 

          Total from investment operations

 

4.09

4.15

 

 

Distributions from

 

 

 

 

 

     Net investment income

 

(.25)

(.28)

 

 

     Net realized gain

 

--

--

 

 

          Total distributions

 

(.25)

(.28)

 

 

Total increase (decrease) in net asset value

 

3.84

3.87

 

 

Net asset value, ending

 

$25.16

$21.32

 

 

 

 

 

 

 

 

Total return*

 

19.35%

23.92%

 

 

Ratios to average net assets:A

 

 

 

 

 

     Net investment income (loss)

 

1.84%

2.04%

 

 

     Total expenses

 

1.07%

1.17%

 

 

     Expenses before offsets

 

1.06%

1.11%

 

 

     Net expenses

 

1.05%

1.10%

 

 

Portfolio turnover

 

120%

49%

 

 

Net assets, ending (in thousands)

 

$124,197

$89,974

 

 

See notes to financial highlights

 

Financial Highlights

 

 

Period Ended

 

 

September 30,

Class Y Shares

 

2009# (z)

Net asset value, beginning

 

$11.45

Income from investment operations

 

 

     Net investment income

 

.17

     Net realized and unrealized gain (loss)

 

2.76

          Total from investment operations

 

2.93

Distributions from

 

 

     Net investment income

 

(.01)

     Net realized gain

 

(.03)

          Total distributions

 

(.04)

Total increase (decrease) in net asset value

 

2.89

Net asset value, ending

 

$14.34

 

 

 

Total return*

 

25.75%

Ratios to average net assets:A

 

 

     Net investment income (loss)

 

1.52% (a)

     Total expenses

 

5.91% (a)

     Expenses before offsets

 

1.39% (a)

     Net expenses

 

1.39% (a)

Portfolio turnover

 

100%

Net assets, ending (in thousands)

 

$702

 

A Total expenses do not reflect amounts reimbursed and/or waived by the Advisor or reductions from expense offset arrangements. Expenses before offsets reflect expenses after reimbursement and/or waiver by the Advisor but prior to reductions from expense offset arrangements. Net expenses are net of all reductions and represent the net expenses paid by the Fund.

(a) Annualized.

(z) Per share figures are calculated using the Average Share Method.

* Total return is not annualized for periods less than one year and does not reflect deduction of any front-end or deferred sales charge.

** Distribution is less than $0.01 per share.

# From October 31, 2008, inception.

See notes to financial statements.

 

Explanation of Financial Tables

 

Schedule of Investments

The Schedule of Investments is a snapshot of all securities held in the fund at their market value, on the last day of the reporting period. Securities are listed by asset type (e.g., common stock, corporate bonds, U.S. government obligations) or, for International Funds, by country, and may be further broken down into sub-groups and by industry classification.

 

Statement of Assets and Liabilities

The Statement of Assets and Liabilities is often referred to as the fund's balance sheet. It lists the value of what the fund owns, is due and owes on the last day of the reporting period. The fund's assets include the market value of securities owned, cash, receivables for securities sold and shareholder subscriptions, and receivables for dividends and interest payments that have been earned, but not yet received. The fund's liabilities include payables for securities purchased and shareholder redemptions, and expenses owed but not yet paid. The statement also reports the fund's net asset value (NAV) per share on the last day of the reporting period. The NAV is calculated by dividing the fund's net assets (assets minus liabilities) by the number of shares outstanding. This statement is accompanied by a Schedule of Investments. Alternatively, if certain conditions are met, a Statement of Net Assets may be presented in lieu of this statement and the Schedule of Investments.

 

Statement of Net Assets

The Statement of Net Assets provides a detailed list of the fund's holdings, including each security's market value on the last day of the reporting period. The Statement of Net Assets includes a Schedule of Investments. Other assets are added and other liabilities subtracted from the investments total to calculate the fund's net assets. Finally, net assets are divided by the outstanding shares of the fund to arrive at its share price, or Net Asset Value (NAV) per share.

At the end of the Statement of Net Assets is a table displaying the composition of the fund's net assets. Paid in Capital is the money invested by shareholders and represents the bulk of net assets. Undistributed Net Investment Income and Accumulated Net Realized Gains usually approximate the amounts the fund had available to distribute to shareholders as of the statement date. Accumulated Realized Losses will appear as negative balances. Unrealized Appreciation (Depreciation) is the difference between the market value of the fund's investments and their cost, and reflects the gains (losses) that would be realized if the fund were to sell all of its investments at their statement-date -values.

 

Statement of Operations

The Statement of Operations summarizes the fund's investment income earned and expenses incurred in operating the fund. Investment income includes dividends earned from stocks and interest earned from interest-bearing securities in the fund. Expenses incurred in operating the fund include the advisory fee paid to the investment advisor, administrative services fees, distribution plan expenses (if applicable), transfer agent fees, shareholder servicing expenses, custodial, legal, and audit fees, and the printing and postage expenses related to shareholder reports. Expense offsets (fees paid indirectly) are also shown. Credits earned from offset arrangements are used to reduce the fund's expenses. This statement also shows net gains (losses) realized on the sale of investments and the increase or decrease in the unrealized appreciation (depreciation) on investments held during the period.

 

Statement of Changes in Net Assets

The Statement of Changes in Net Assets shows how the fund's total net assets changed during the two most recent reporting periods. Changes in the fund's net assets are attributable to investment operations, distributions and capital share transactions.

The Operations section of the report summarizes information detailed in the Statement of Operations. The Distribution section shows the dividend and capital gain distributions made to shareholders. The amounts shown as distributions in this section may not match the net investment income and realized gains amounts shown in the Operations section because distributions are determined on a tax basis and certain investments or transactions may be treated differently for financial statement and tax purposes. The Capital Share Transactions section shows the amount shareholders invested in the fund, either by purchasing shares or by reinvesting distributions, and the amounts redeemed. The corresponding numbers of shares issued, reinvested and redeemed are shown at the end of the report.

 

Financial Highlights

The Financial Highlights table provides a per-share breakdown per class of the components that affect the fund's net asset value for current and past reporting periods. The table provides total return, total distributions, expense ratios, portfolio turnover and net assets for the applicable period. Total return is a measure of a fund's performance that encompasses all elements of return: dividends, capital gain distributions and changes in net asset value. Total return is the change in value of an investment over a given period, assuming reinvestment of any dividends and capital gain distributions, expressed as a percentage of the initial investment. Total distributions include distributions from net investment income and net realized gains. Long-term gains are earned on securities held in the fund more than one year. Short-term gains, on the sale of securities held less than one year, are treated as ordinary dividend income for tax purposes. The expense ratio is a fund's cost of doing business, expressed as a percentage of net assets. These expenses directly reduce returns to shareholders. Portfolio turnover measures the trading activity in a fund's investment portfolio -- how often securities are bought and sold by a fund. Portfolio turnover is affected by market conditions, changes in the size of the fund, the nature of the fund's investments and the investment style of the portfolio manager.

Proxy Voting

The Proxy Voting Guidelines of the Calvert Funds that the Fund uses to determine how to vote proxies relating to portfolio securities are provided as an Appendix to the Fund's Statement of Additional Information. The Statement of Additional Information can be obtained free of charge by calling the Fund at 1-800-368-2745, by visiting the Calvert website at www.calvert.com; or by visiting the SEC's website at www.sec.gov.

Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund's website at www.calvert.com and on the SEC's website at www.sec.gov.

Availability of Quarterly Portfolio Holdings

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund's Form N-Q is available on the SEC's website at www.sec.gov. The Fund's Form N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC;  information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Director and Officer Information Table

Name &
Age


Position
with
Fund


Position
Start
Date

Principal Occupation
During Last 5 Years

(Not Applicable to Officers)

# of Calvert
Portfolios
Overseen

Other
Directorships

INDEPENDENT TRUSTEES/DIRECTORS

REBECCA L. ADAMSON

AGE: 60

Trustee

 

Director

 

Director

 

Director

1989 CSIF

2000 IMPACT

2000 CSIS

2005 CWVF

President of the national non-profit, First People's Worldwide, formerly First Nations Financial Project. Founded by her in 1980, First People's Worldwide is the only American Indian alternative development institute in the country.

17
  • Mashantucket Pequot Endowment
  • Bay & Paul Foundation

RICHARD L. BAIRD, JR.

AGE: 61

Trustee & Chair

Director & Chair

Director & Chair

Director & Chair

1982

CSIF

2000

CSIS

2005

CWVF

2005

Impact

President and CEO of Adagio Health Inc. (formerly Family Health Council, Inc.) in Pittsburgh, PA, a non-profit corporation which provides family planning services, nutrition, maternal/child health care, and various health screening services and community preventive health programs.

29

 

JOHN G. GUFFEY, JR.

AGE: 61

Director

 

Trustee

 

Director

 

Director

 

 

1992

CWVF

1982

CSIF

2000

CSIS

2005

IMPACT

Treasurer and Director of Silby, Guffey and Co., Inc., a venture capital firm (inactive as of 2003) and President of Aurora Press Inc., a privately held publisher of trade paperbacks.

 

 

 

 

 

29
  • Ariel Funds (3)
  • Calvert Social Investment Foundation
  • Calvert Ventures, LLC

MILES DOUGLAS HARPER, III

AGE: 46

Director

 

Trustee

 

Director

 

Director

2000

Impact

2005

CSIF

2005

CSIS

2005

CWVF

Partner, Gainer Donnelly & Desroches (public accounting firm) since January 1999.

17
  • Bridgeway Funds (14)

JOY V. JONES

AGE: 59

Director

Trustee

 

Director

 

Director

2000

Impact

1990

CSIF

2000

CSIS

2005

CWVF

Attorney and entertainment manager in New York City.

 

 

 

17
  • Director, The Twenty-First Century Foundation

TERRENCE J. MOLLNER, Ed.D.

AGE: 64

Director

Trustee

 

Director

 

Director

1992

CWVF

1982

CSIF

2000

CSIS

2005

IMPACT

Founder, Chairperson, and President of Trusteeship Institute, Inc., a diverse foundation known principally for its consultation to corporations converting to cooperative employee-ownership and the development of socially and spiritually responsible investment vehicles. Chairperson, Stakeholders Capital, Inc., an asset management firm and financial services provider in Amherst, MA.

17
  • Calvert Social Investment Foundation
  • Ben & Jerry's Homemade, Inc.
  • ArtNOW, Inc.
  • Yourolivebranch.org

SYDNEY AMARA MORRIS

AGE: 60

Trustee

 

Director

 

Director

 

Director

1982

CSIF

2000

CSIS

2005

CWVF

2005

IMPACT

Rev. Morris currently serves as Parish Minister to the Keweenaw Unitarian Universalist Fellowship in Houghton, MI.

She previously served as Senior Minister of the Unitarian Church of Vancouver and as Minister of the Unitarian-Universalist Fellowship of Ames, IA. Rev. Morris is a graduate of Harvard Divinity School. She currently chairs the Umbrian Universalist Committee on Socially Responsible Investing.

17

 

INTERESTED TRUSTEES/DIRECTORS

BARBARA J. KRUMSIEK

AGE: 57

Director &

President

Trustee & Senior Vice

President

Director & Senior Vice

President

 

Director & President

1997

CWVF

 

1997

CSIF

 

2000

CSIS

 

2000

Impact

President, Chief Executive Officer and Chair of Calvert Group, Ltd.

 

 

 

 

 

 

54
  • Calvert Social Investment Foundation
  • Pepco Holdings, Inc.
  • Acacia Life Insurance Company (Chair)

D. WAYNE SILBY, Esq.

AGE: 61

Director

 

Trustee & President

 

Director

& President

Director

1992

CWVF

1982

CSIF

 

2000

CSIS

2000

Impact

Mr. Silby is the founding Chair of the Calvert Funds. He is the Chair-Elect and a principal of Syntao.com, a Beijing-based company promoting corporate social responsibility. He was an officer and director of Silby, Guffey and Co., Inc., a venture capital firm (inactive as of 2003).

29
  • UNIFI Mutual Holding Company
  • Calvert Social Investment Foundation
  • Grameen Foundation USA
  • Studio School Fund
  • Syntao.com China
  • The Ice Organization

OFFICERS

KAREN BECKER

Age: 56

Chief Compliance Officer

2005

Chief Compliance Officer for the Calvert Funds. In March 2009, Ms. Becker also became Head of the Securities Operations Department for Calvert Asset Management Company, Inc. Prior to 2005, Ms. Becker was Senior Vice President of Calvert Group, Ltd. and Head of Calvert Client Services.

SUSAN WALKER BENDER, Esq.

AGE: 50

Assistant Vice-President &

Assistant Secretary

1988

CSIF

2000

CSIS

1992

CWVF

2000

Impact

Assistant Vice President, Assistant Secretary and Associate General Counsel of Calvert Group, Ltd.

 

JENNIFER BERG

AGE: 36

Assistant Fund Controller

2009

Fund Administration Manager for Calvert Group Ltd.

THOMAS DAILEY

AGE: 45

Vice President

2004

CSIF

Vice President of Calvert Asset Management Company, Inc.

 

IVY WAFFORD DUKE, Esq.

AGE: 41

Assistant Vice-President &

Assistant Secretary

1996

CSIF

2000

CSIS

1996

CWVF

2000

Impact

Assistant Vice President, Assistant Secretary and Deputy General Counsel of Calvert Group, Ltd., and Chief Compliance Officer for Calvert Asset Management Company and Calvert Distributors, Inc.

TRACI L. GOLDT

AGE: 35

Assistant Secretary

2004

Executive Assistant to General Counsel, Calvert Group, Ltd.

GREGORY B. HABEEB

AGE: 59

Vice President

2004

CSIF

 

Senior Vice President of Calvert Asset Management Company, Inc.

 

HUI PING HO, CPA

AGE: 44

Assistant Treasurer

 

2000

Tax Compliance Manager of Calvert Group, Ltd. and Assistant Fund Treasurer.

LANCELOT A. KING, Esq.

AGE: 39

Assistant Vice President & Assistant Secretary

2002

Assistant Vice President, Assistant Secretary and Associate General Counsel of Calvert Group, Ltd.

EDITH LILLIE

AGE: 52

Assistant Secretary

 

2007

Assistant Secretary and Regulatory Matters Manager of Calvert Group, Ltd.

AUGUSTO DIVO MACEDO, Esq.

AGE: 46

Assistant Vice President & Assistant Secretary

2007

Assistant Vice President, Assistant Secretary, and Associate Counsel Compliance Calvert Group, Ltd. Prior to joining Calvert in 2005, Mr. Macedo served as 2nd Vice President at Acacia Life Insurance Company and The Advisors Group, Acacia's broker-dealer and federally registered investment adviser.

JANE B. MAXWELL Esq.

AGE: 57

Assistant Vice President & Assistant Secretary

 

2005

Assistant Vice President, Assistant Secretary & Assistant General Counsel of Calvert Group, Ltd. Prior to joining Calvert in 2004, Ms. Maxwell was an associate with Sullivan & Worcester LLP.

ANDREW K. NIEBLER, Esq.

AGE: 42

Assistant Vice President & Assistant Secretary

2006

Assistant Vice President, Assistant Secretary & Associate General Counsel of Calvert Group, Ltd.  Prior to joining Calvert in 2006, Mr. Niebler was an Associate with Cleary, Gottlieb, Steen & Hamilton LLP. 

CATHERINE P. ROY

AGE: 53

 

Vice President

2004

 

Senior Vice President of Calvert Asset Management Company, Inc. Prior to joining Calvert in 2004, Ms. Roy was Senior Vice President of US Fixed Income for Baring Asset Management, and SVP and Senior Portfolio Manager of Scudder Insurance Asset Management.

WILLIAM M. TARTIKOFF, Esq.

AGE: 62

Vice President and Secretary

1990

CSIF

2000

CSIS

1992

CWVF

2000

Impact

Senior Vice President, Secretary, and General Counsel of Calvert Group, Ltd.

 

NATALIE TRUNOW

AGE: 41

Vice President

2008

Senior Vice President of Calvert Asset Management Company, Inc., and Chief Investment Officer - Equities. Prior to joining Calvert in August 2008, Ms. Trunow was the Section Head (2005-2008) and Portfolio Manager (2001-2008) for the Global Public Markets Group of General Motors Asset Management.

RONALD M. WOLFSHEIMER, CPA

AGE: 57

Treasurer

1982

CSIF

2000

CSIS

1992

CWVF

2000

Impact

Senior Vice President and Chief Financial and Administrative Officer of Calvert Group, Ltd. and Fund Treasurer.

MICHAEL V. YUHAS JR., CPA

AGE: 48

Fund Controller

1999

CSIF

2000

CSIS

1999

CWVF

2000

Impact

Vice President of Fund Administration of Calvert Group, Ltd. and Fund Controller.

 

 

The address of Directors/Trustees and Officers is 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814, except Mr. Silby's address is 1715 18th Street, N.W., Washington, DC 20009. Ms. Krumsiek is an interested person of the Fund since she is an officer and director of the Fund's advisor and its affiliates and a director of its parent companies. Mr. Silby is an interested person of the Fund since he is a director of the parent company of the Fund's advisor.

Additional information about the Fund's Directors/Trustees can be found in the Statement of Additional Information (SAI). You can get a free copy of the SAI at www.calvert.com, or by contacting your broker, or the Fund at 1-800-368-2745.

 

To Open an Account
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Branch Office
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Registered, Certified
or Overnight Mail
Calvert Group
c/o BFDS,
330 West 9th Street
Kansas City, MO 64105

Web Site
www.calvert.com

Principal Underwriter
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814

 

Calvert World Values International Equity Fund

 

This report is intended to provide fund information to shareholders. It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.

 

Note: The information on our website is not incorporated by reference into this report; our website address is included as an inactive textual reference only.

 

Calvert's Family of Funds

Tax-Exempt Money Market Funds
CTFR Money Market Portfolio

Taxable Money Market Funds
First Government Money Market Fund
CSIF Money Market Portfolio

Municipal Funds
Calvert Tax-Free Bond Fund

Taxable Bond Funds
CSIF Bond Portfolio
Income Fund
Short Duration Income Fund
Long-Term Income Fund
Ultra-Short Income Fund
Government Fund
Short-Term Government Fund
High Yield Bond Fund

Equity Funds
CSIF Enhanced Equity Portfolio
CSIF Equity Portfolio
Calvert Large Cap Growth Fund
Calvert Large Cap Value Fund
Calvert Social Index Fund
Capital Accumulation Fund
CWV International Equity Fund
New Vision Small Cap Fund
Small Cap Value Fund
Mid Cap Value Fund
Global Alternative Energy Fund
Global Water Fund
International Opportunities Fund

Balanced and Asset Allocation Funds
CSIF Balanced Portfolio
Calvert Conservative Allocation Fund
Calvert Moderate Allocation Fund
Calvert Aggressive Allocation Fund

 

<PAGE>

 

Calvert Capital Accumulation Fund

Annual Report

September 30, 2009

Calvert Investments

A UNIFI Company

 

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TABLE OF CONTENTS

 

 

 

4

 

President's Letter

7

 

SRI Update

10

 

Portfolio Management Discussion

15

 

Shareholder Expense Example

17

 

Report of Independent Registered Public Accounting Firm

18

 

Statement of Net Assets

27

 

Statement of Operations

28

 

Statements of Changes in Net Assets

30

 

Notes to Financial Statements

38

 

Financial Highlights

43

 

Explanation of Financial Tables

45

 

Proxy Voting and Availability of Quarterly Portfolio Holdings

46

 

Director and Officer Information Table

 

Dear Shareholders:

Market volatility and shifting investment cycles are nothing new to long-term investors. Through the course of numerous "bubbles," political disputes, wars, and economic crises, the financial markets have been repeatedly tested and proven resilient. However, the watershed financial and economic events of the past 12 months have tested the resilience of the global markets and investors in an unprecedented fashion, and we are likely to see changes in the structure and regulation of financial institutions and the markets for years to come.

This environment highlights how critical integrity of management, regulatory oversight, transparency, and corporate governance are to the health of the global financial system and our economy. Calvert has long believed that many of the criteria we review create signals about the strength and integrity of corporate management, and we have included corporate governance as an integral part of our sustainable and responsible investment (SRI) criteria and of our advocacy efforts with companies. Beyond the evaluations and influence with companies themselves, we are participating in a number of initiatives to urge financial regulatory reform and safeguard shareholder interests. Two of the most critical include our support of the Consumer Financial Protection Agency bill and our work with the United Nations Environment Programme Finance Initiative (UNEP FI) in promoting environmental, social, and governance (ESG) investment criteria as a fiduciary responsibility for plan sponsors and institutional investors.

A Time Period of Challenge and Contrast

As you know, this challenging time period opened with global economies and the financial markets in virtual free fall following the failure of Lehman Brothers in September 2008. Global market panic ensued and risk-averse investors sought the safety of Treasuries and money market funds, avoiding any asset class with perceived credit or liquidity risk.

As the reporting year progressed, we saw a somewhat surprising reversal in this sentiment. Investors gained confidence, encouraged by "green shoots" of recovery in newly released economic data and the perceived success of U.S. government stimulus and monetary policies. These factors, along with renewed confidence in the U.S. banking system following the government's "stress tests," helped fuel a rally in stocks, commodities, and many sectors of the bond market.

By September 30, 2009, stocks had rebounded sharply from their March 9 lows, with year-to-date gains of 19.26% for the broad-market Standard & Poor's 500 Index, 22.43% for the small-cap Russell 2000 Index, and 32.63% for the Russell Midcap Index. While outsize year-to-date gains for stocks helped soften their steep declines from October 2008 through March 2009, they did not offset them--and all areas of the U.S. equity market finished the 12-month reporting period far into negative territory. For example, the S&P 500 Index posted a loss of 6.91% for the reporting period despite its strong 2009 performance. U.S. stocks of every style, strategy, and capitalization range fell during this period, with large-cap stocks modestly outperforming small-cap stocks, and growth outpacing value. On the international front, the MSCI EAFE Investable Market Index, a benchmark for international stocks, returned 5.02% for the 12-month period.

The bond market posted overall gains for the reporting period, with the Barclays Capital Aggregate Bond Index up 10.56%, primarily as a result of its corporate bond holdings. Money-market returns remained low, reflecting the Federal Reserve's continued target rate of 0% to 0.25% for federal funds loans.

Sustainable and Responsible Investing

While huge challenges confront the global economy, we also believe that the opportunities facing the Obama administration--and sustainable investors--are greater than ever. In the last six months since we reported to you, Calvert has made progress on several sustainable and responsible investment initiatives.

As a key member of the Asset Management Working Group of UNEP FI, Calvert participated in the release of its new report, Fiduciary Responsibility--Legal and Practical Aspects of Integrating Environmental, Social and Governance Issues into Institutional Investment. The report makes the case that integrating ESG considerations into investment decisions should be a legal fiduciary responsibility--and highlights the financial materiality of ESG issues and their systemic risks and costs. The report calls on the investment industry and policymakers to move toward creating sustainable capital markets to help avert a "Natural Resources Crisis."

Following our participation in the World Water Forum earlier in the year, in August Calvert urged the CEO Water Mandate, a private-public initiative of the U.N. Global Compact, to assign an "urgent priority" to developing a policy outlining the issues, risks, and broad responsibilities of companies and industries with regard to water and human rights. We also urged the group to develop an "implementation framework" that companies could use to assess and manage these issues in their business operations. At Calvert, we actively address water and human rights issues in Calvert Global Water Fund's investment criteria and advocacy objectives.

In 2009, many of the shareholder resolutions that we filed with companies we own were related to governance and finance, such as executive compensation, board diversity, and responsible lending policies. Clearly, these areas will remain among our top advocacy priorities throughout the year.

What Lies Ahead?

In the course of a year, the global financial markets have rallied from the brink of collapse and the U.S. economy is showing improved vital signs in the key housing, job, and credit markets. However, while we are optimistic about long-term economic and market recovery, we believe that the systemic imbalances revealed in the global credit crisis need to be addressed, and we are encouraged by progress toward that end.

Internationally, the nations at the September G-20 summit met to enact changes to international economic policies that will promote "sustainable and balanced growth" among developed and emerging countries. On the home front, the Obama administration and Congress are grappling with credit-rating agency reform, banking reform, and the role of the Federal Reserve and U.S. government in the oversight of financial institutions and the markets, among many critical issues. In our view, over time, these efforts may work to help repair our financial system, providing additional stability to the economy and markets. In the short term, we believe the worst of the recession is behind us, but economic recovery will be uneven and staggered, with ongoing market volatility.

Other challenges that government policymakers are addressing are, of course, climate change and environmental degradation. The Obama administration has already made significant progress toward enacting policies that will benefit the environment, and
many of these policies--such as stimulus funding for development of alternative energy sources--will likely also benefit sustainable and responsible investors.

Check Your Portfolio Allocations

If you're concerned about the current market environment, talk with your financial advisor about whether your portfolio's allocations to stocks, bonds, and cash are appropriate and well-diversified, given your goals, time horizon, and risk attitudes. Consider that investors who continued to invest regularly during the market's steep declines generally benefited from the rebound that followed, while those who sold their assets may have a long wait to make up their losses. We encourage you to visit our newly enhanced web site, www.calvert.com, for frequent updates and commentary on economic and market developments from Calvert professionals.

As always, we appreciate your investing with Calvert.

 

Sincerely,

Barbara J. Krumsiek
President and CEO
Calvert Group, Ltd.
October 2009

 

For more complete information on any Calvert Fund, call your advisor or visit our website for a prospectus. An investor should consider the investment objectives, risks, charges and expenses of an investment carefully before investing. The prospectus contains this and other information. Read it carefully before you invest or send money.

 

SRI Update

from the Calvert Sustainability Research Department

Against the backdrop of the market turmoil over the past 12 months, Calvert has continued to advocate for responsible management of environmental, social, and governance (ESG) factors, which we believe create long-term shareholder value. We've also had unprecedented opportunities to be active participants in the creation of new policies in these arenas.

In the final months of 2008, we broadened our strategic engagement and shareholder advocacy efforts to include companies in virtually every industry, while offering shareholders more investment choices by launching our new line-up of sustainable and responsible investing (SRI) strategies. Now all of our SRI funds fall under one of three types:

Calvert SignatureTM Portfolios--Our original approach, comprising two distinct research frameworks: a rigorous review of financial performance and a thorough assessment of ESG performance.

Calvert SolutionTM Portfolios --Theme-oriented investments dedicated to solving some of today's most pressing environmental and sustainability challenges. This includes Calvert Global Alternative Energy Fund and Calvert Global Water Fund, which just celebrated its first anniversary.

Calvert SAGETM Portfolios -- Calvert Large Cap Value Fund, launched in December 2008, is the first to use this approach, which leverages strategic engagement to address SRI concerns in companies that have the potential to improve but may not yet meet certain standards. Many of these are companies we have not previously invested in.

 

Advancing National Change

As the Obama administration and Congress began to focus their attention on some of Calvert's core issues--such as corporate transparency and responsibility, energy and climate change, and financial market reform and governance--we have been making sure that our shareholders are represented in the process.

We've particularly been involved with the Securities and Exchange Commission (SEC) on the issue of shareholder rights and corporate governance, responding to several SEC proposals in that area and collaborating with the Social Investment Forum to develop a proposal for mandatory corporate disclosure of ESG policies, programs, and performance.

Shareholder Advocacy

Another successful proxy season has drawn to a close, with Calvert filing 26 shareholder proposals and co-filing another nine. Topics included climate change, board and employee diversity, executive compensation, product safety, sustainability reporting, and political contributions. We were able to successfully withdraw 21 of these resolutions before the end of the period after the relevant companies agreed to address our concerns.

It's particularly notable that we successfully withdrew the "say-on-pay" proposal we filed with Microsoft--which would give shareholders a voice on executive compensation--after the company announced plans in September to include a management-sponsored advisory vote on compensation in its next proxy statement. A similar resolution presented at General Mills earned an impressive 51% majority support that same month as well. Given that legislative efforts on this issue have stalled, these results should help spur renewed efforts for a legislative solution.

Climate Change

Calvert's comprehensive approach to tackling the issue of climate change spans our funds, our company, and the globe. On September 22, Calvert CEO Barbara Krumsiek participated in a roundtable on "Sustainable Business and Decent Work" at a gathering of more than 300 leaders from around the world for the United Nations Leadership Forum on Climate Change. That same week, Calvert Senior Vice President for Sustainability Research and Policy Bennett Freeman was a panelist at a session on corporate sustainability and responsibility at the New York Stock Exchange.

Calvert also signed the Copenhagen Communique, which is poised to become the definitive statement from the business community and calls on world leaders to reach a meaningful agreement at the upcoming U.N. Climate Change Conference.

Community Investments

Many of our Funds participate in Calvert's High Social Impact Investing program, which is administered through the Calvert Social Investment Foundation. This community investment program may allocate a small percentage of Fund assets at below-market interest rates to investments that provide economic opportunity for struggling populations.1 This year, the Foundation led efforts to create MFX Solutions, a project that enables microfinance institutions in developing countries to avoid the risk of currency value changes in their borrowings. This lowers costs for all parties and protects microloan recipients against the risks of currency fluctuations and highly variable interest rates.

Special Equities

A modest but important portion of certain funds is allocated to small private companies that are developing products or services that address important sustainability or environmental issues. One such investment is organic heirloom tomato producer New Day Farms in Virginia.2 The company shipped its first crop this past season. While it still faces some challenges, we are pleased with the reception its locally-grown produce has received from customers.

Another recent Special Equities investment is LeapFrog Financial Inclusion Fund, which is advancing the micro-insurance market in the developing world. Its mission is to extend insurance and related financial services to 25 million people in some of the poorest and most excluded communities across Africa and Asia. LeapFrog recently closed on an investment in an insurer in South Africa that provides policies to persons who are HIV positive or have diabetes. These people are either unable to obtain insurance or can do so only at extraordinarily high cost. As a result, they can't obtain a home loan or start a business that requires insurance coverage. The LeapFrog investment in this innovative insurer enables them to engage in productive activity and secure their families' futures.

 

1. As of September 30, 2009, Calvert Social Investment Foundation Community Investment Notes represented the following percentages of Fund net assets: Calvert Social Investment Fund Balanced Portfolio 1.08%, Calvert Social Investment Fund Bond Portfolio 0.35%, Calvert Social Investment Fund Equity Portfolio 0.56%, Calvert Capital Accumulation Fund 1.53%, Calvert World Values International Equity Fund 1.03%, Calvert New Vision Small Cap Fund 1.33%, and Calvert Large Cap Growth Fund 0.36%. The Calvert Social Investment Foundation is a 501(c)(3) nonprofit organization. The Foundation's Community Investment Note Program is not a mutual fund and should not be confused with any Calvert Group-sponsored investment product.

2. As of September 30, 2009, New Day Farms represented 0.0064% of CSIF Equity Portfolio; Leapfrog Financial Inclusion Fund represented 0.0025% of Calvert Large Cap Growth Fund.

All holdings are subject to change without notice.

For more complete information on any Calvert Fund, call your advisor or visit our website for a prospectus. An investor should consider the investment objectives, risks, charges and expenses of an investment carefully before investing. The prospectus contains this and other information. Read it carefully before you invest or send money.

 

 

Portfolio Management Discussion

Michelle Clayman
Nathaniel Paull
of New Amsterdam Partners LLC

 

Performance

In the 12-month period ended September 30, 2009, Calvert Capital Accumulation Fund Class A shares (at NAV) returned -9.96%. This compares with -0.40% for the benchmark Russell Midcap Growth Index. The Fund's underperformance was largely due to a rally in the second and third quarters of 2009 in lower-quality stocks not held by the Fund.

Investment Climate

Mid-cap stocks fared better over the past 12 months than large-cap and small-cap stocks, as evidenced by returns of -3.55% for the Russell Midcap Index, -6.14% for the Russell 1000 Index of large-cap equities, and -9.55% for the Russell 2000 Index of small-caps. Growth came out on top for the reporting period with returns of -0.40% for the Russell Midcap Growth Index and -7.12% for the Russell Midcap Value Index.

A "relief" or "junk" rally started in the second quarter of 2009, which helped lift market returns. The rise was driven by the improving economic outlook, with economic growth forecast to be positive in the second half of 2009--a big swing from the -6.4% gross domestic product (GDP) growth in the first quarter of 2009 to a possible average of 2.5% in the second half of 2009.

 

Portfolio Strategy

Portfolio Transactions

We sold 20 holdings and purchased 26 new ones over the past 12 months. The result was a significant reduction in our Health Care allocation, a rebuilding of our underweight positions in Consumer Discretionary and Industrials back to a neutral weighting, and an underweighting of Information Technology.

In Health Care, we trimmed the allocation by selling DaVita, Idexx Labs, Laboratory Corporation of America, and Millipore and buying only wound-care specialist Kinetic Concepts. However, three stocks were purchased and sold during the period--AmerisourceBergen and Universal Health Services, both of which had reached their price targets, and Immucor, which was sold due to mounting regulatory concerns.

To bolster our Consumer Discretionary position, we added Brinker International, Gamestop, ITT Educational Services, Nordstrom, Polaris Industries, and Whirlpool. The only sells were Advance Auto Parts and Strayer Education. We increased our Industrials exposure by purchasing Brink's, Emcor, General Cable, Ryder, and Valmont Industries, while selling Donaldson and Watson Wyatt.

In Information Technology, we sold Flir Systems and purchased transaction processor Wright Express. We also added Salesforce.com and later sold it after it reached its price target. We sold Harris due to defense budget uncertainties, and Lexmark International, which had disappointing earnings. On the other hand, we sold Dolby Laboratories in the fourth quarter of 2008 and bought it again in September.

Key Performance Factors

Prior to the sharp market rally which began in early March--and has since propelled the broad market 60% higher--our performance had been relatively strong. However, the rally has primarily been fueled by lower-quality names--those with the lowest return on equity, lowest cash flow relative to net income, and highest debt levels. We avoid investing in these low-quality stocks.

Overall, our sector selection was positive but stock selection was weak. Our underweight positions in Industrials and Financials as well as our overweight to Materials helped performance. Only our overweight to Health Care detracted from performance.

Our stock picks in Industrials and Materials added value. General Cable advanced 73.0%1 on an improving outlook for infrastructure spending, while Reliance Steel rose 13.9% due to an expected recovery in steel demand. Other strong performers included Ross Stores (31.4%), Kinetic Concepts (36.3%), and Sybase (27.0%).

However, our stock picking was weak in Information Technology, Energy, and Health Care. Itron fell 27.6% as continued sluggishness in the housing market dampened earnings. St. Mary Land & Exploration (-49.1%) and Swift Energy (-84.0%) struggled with volatile energy commodity prices. Regulatory issues caused Immucor to sink 51.3% and uncertainty surrounding the national health-care debate led HealthSpring to lose 42.1%.

Outlook

Looking forward, we expect the economy to continue to bounce back for the remainder of 2009 and economic growth to track at a 2% to 3% pace in 2010--fueled by increasing global demand and low inventory levels going into the recovery. However, unemployment and the delayed "shadow housing market" effect of more real-estate foreclosures means that threats to economic growth remain. While we expect inflation and interest rates to stay low in the short term, inflation could raise its ugly head in the long term. Much will depend on whether the private economy can stand on its own once recovery is under way and whether the government has the political will to reduce stimulus spending and shrink government debt.

In the near term, we believe the outlook for corporate earnings and the stock market is good. Corporate earnings have improved over the past year and have been better than expected, mainly due to cost cutting. Low capacity utilization and inventory levels mean that any upturn in revenues will further boost margins and profits. Rising earnings will likely lift the market and attract the substantial amount of cash sitting on the sidelines as fears abate and retail investors regain their appetite for risk.

Although the recent rally has been fueled by lower-quality names, we think it is important to stay focused on companies with strong earnings, good ability to generate cash flow, and solid balance sheets. While the worst does seem to be behind us, many companies still face a lack of access to credit or further write-downs of losses. Although our strategy has lagged in the recent past, we believe our focus on quality and fundamentals will be rewarded going forward.

October 2009

 

1. All individual security returns shown reflect total returns for the period held in the portfolio.

As of September 30, 2009, the following companies represented the following percentages of Fund net assets: DaVita 0%, Idexx Labs 0%, Lab Corp 0%, Millipore 0%, Kinetic Concepts 2.96%, AmerisourceBergen 0%, Universal Health Services 0%, Immucor 0%, Brinker International 2.13%, Gamestop 2.22%, ITT Educational Services 2.50%, Nordstrom 1.36%, Polaris Industries 1.26%, Whirlpool 1.89%, Advance Auto Parts 0%, Strayer Education 0%, Brink's 0%, Emcor 1.92%,General Cable 1.18%, Ryder 1.17%, Valmont Industries 1.33%, Donaldson 0%, Watson Wyatt 0%, Flir Systems 0%,Wright Express 1.52%, Salesforce.com 0%, Harris Corp 0%, Lexmark 0%, Dolby Laboratories 0.80%, Reliance Steel 1.92%, Ross Stores 2.81%, Sybase 2.93%, Itron 3.14%, St. Mary Land & Exploration 0%, Swift Energy 0% and HealthSpring 1.66%. All holdings are subject to change without notice.

 

Portfolio Statistics
September 30, 2009
Investment Performance
(total return at NAV*)

 

6 Months
ended
9/30/09

12 Months
ended
9/30/09

Class A

30.68%

-9.96%

Class B

29.94%

-10.97%

Class C

30.16%

-10.64%

Class I

31.39%

-9.02%

Russell Midcap Growth Index**

41.89%

-0.40%

Lipper Mid-Cap Growth Funds Avg.

38.37%

-2.74%

 

 

 

Ten Largest Stock Holdings

 

 

 

% of Net Assets

 

Deckers Outdoor Corp.

3.2%

 

Itron, Inc.

3.1%

 

Global Payments, Inc.

3.0%

 

Amphenol Corp.

3.0%

 

Kinetic Concepts, Inc.

3.0%

 

Sybase, Inc.

2.9%

 

ANSYS, Inc.

2.9%

 

Praxair, Inc.

2.9%

 

Dionex Corp.

2.9%

 

Lincare Holdings, Inc.

2.9%

 

Total

29.8%

 

 

 

 

Economic Sectors

% of total investments

 

Consumer Discretionary

17.1%

 

Consumer Staples

4.7%

 

Energy

6.5%

 

Financials

8.3%

 

Health Care

14.7%

 

Industrials

14.1%

 

Information Technology

19.5%

 

Materials

4.8%

 

Telecommunication Services

3.8%

 

Time Deposit

2.2%

 

Utilities

4.3%

 

Total

100%

 

*Investment performance/return at NAV does not reflect the deduction of the Fund's maximum 4.75% front-end sales charge or any deferred sales charge.

** Source: Lipper Analytical Services, Inc.

 

Portfolio Statistics
September 30, 2009
Average Annual Total Returns
(with max. load)

 

Class A Shares

One year

-14.29%

Five year

-1.52%

Ten year

-0.64%

 

 

 

Class B Shares

One year

-15.47%

Five year

-1.67%

Ten year

-1.05%

 

 

 

 

 

Class C Shares

One year

-11.59%

Five year

-1.34%

Ten year

-0.95%

 

Portfolio Statistics
September 30, 2009
Average Annual Total Returns

 

Class I Shares*

One year

-9.02%

Five year

0.32%

Ten year

0.83%

 

* Note Regarding Class I Shares Total Returns: There were times during the reporting period when there were no shareholders in Class I. For purposes of reporting Average Annual Total Return, Class A performance at NAV (i.e. does not reflect deduction of the Class A front-end sales charge) is used during these periods in which there were no shareholders in Class I. For purposes of this Average Annual Total Return, the Class A performance at NAV was used during the period January 18, 2002 through June 3, 2003.

The performance data shown represents past performance, does not guarantee future results, and does not reflect the deduction of taxes that a shareholder would pay on the Fund's/Portfolio's distributions or the redemption of Fund/Portfolio shares. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Visit www.calvert.com for current performance data.  The gross expense ratio for Class A Shares is 1.66%. This number may vary from the expense ratio shown elsewhere in this report because it is based on a different time period and, if applicable, does not include fee or expense waivers. Performance data quoted already reflects deduction of fund operating expenses.

 

Performance Comparison

Comparison of change in value of $10,000 investment.

 

 

Average annual total returns in the Portfolio Statistics and the Performance Comparison line graph are with maximum load deducted -- they assume reinvestment of dividends and reflect the deduction of the Fund's Class A maximum front-end sales charge of 4.75%, or deferred sales charge, as applicable. No sales charge has been applied to the index used for comparison. However, the Lipper average does reflect the deduction of the category's average front-end sales charge. The value of an investment in Class A & C shares is plotted in the line graph. The value of an investment in another class of shares would be different.

 

Shareholder Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges and redemption fees; and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (April 1, 2009 to September 30, 2009).

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Beginning
Account Value
4/1/09

Ending Account
Value
9/30/09

Expenses Paid
During Period*
4/1/09 - 9/30/09

Class A

 

 

 

Actual

$1,000.00

$1,306.80

$10.58

Hypothetical

$1,000.00

$1,015.89

$9.25

(5% return per year before expenses)

 

 

 

Class B

 

 

 

Actual

$1,000.00

$1,299.40

$16.96

Hypothetical

$1,000.00

$1,010.32

$14.83

(5% return per year before expenses)

 

 

 

Class C

 

 

 

Actual

$1,000.00

$1,301.60

$15.30

Hypothetical

$1,000.00

$1,011.78

$13.37

(5% return per year before expenses)

 

 

 

Class I

 

 

 

Actual

$1,000.00

$1,313.90

$4.99

Hypothetical

$1,000.00

$1,020.76

$4.36

(5% return per year before expenses)

 

 

 

* Expenses are equal to the Fund's annualized expense ratio of 1.83%, 2.94%, 2.65% and 0.86% for Class A, Class B, Class C, and Class I respectively, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).

 

Report of Independent Registered Public Accounting Firm

The Board of Directors of Calvert World Values Fund, Inc. and Shareholders of Calvert Capital Accumulation Fund:

We have audited the accompanying statement of net assets of the Calvert Capital Accumulation Fund (the Fund), a series of the Calvert World Values Fund, Inc., as of September 30, 2009, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of September 30, 2009, by correspondence with custodians and brokers. As to securities purchased or sold but not yet received or delivered, we performed other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Calvert Capital Accumulation Fund as of September 30, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

KPMG LLP
Philadelphia, Pennsylvania
November 23, 2009

 

Statement of Net Assets
September 30, 2009

Equity Securities - 97.4%

Shares

Value

Capital Markets - 2.7%

 

 

Affiliated Managers Group, Inc.*

37,200

$2,418,372

 

 

 

Chemicals - 2.9%

 

 

Praxair, Inc.

31,900

2,605,911

 

 

 

Commercial Services & Supplies - 2.0%

 

 

Brink's Co.

65,000

1,749,150

 

 

 

Construction & Engineering - 1.9%

 

 

EMCOR Group, Inc.*

67,800

1,716,696

 

 

 

Diversified Consumer Services - 2.5%

 

 

ITT Educational Services, Inc.*

20,200

2,230,282

 

 

 

Diversified Financial Services - 2.1%

 

 

IntercontinentalExchange, Inc.*

19,200

1,866,048

 

 

 

Diversified Telecommunication Services - 2.0%

 

 

CenturyTel, Inc.

53,800

1,807,680

 

 

 

Electrical Equipment - 1.2%

 

 

General Cable Technologies Corp.*

26,900

1,053,135

 

 

 

Electronic Equipment & Instruments - 7.0%

 

 

Amphenol Corp.

71,800

2,705,424

Dolby Laboratories, Inc.*

18,800

717,972

Itron, Inc.*

43,700

2,802,918

 

 

6,226,314

 

 

 

Energy Equipment & Services - 4.6%

 

 

FMC Technologies, Inc.*

47,350

2,473,564

Superior Energy Services, Inc.*

73,500

1,655,220

 

 

4,128,784

 

 

 

Food Products - 2.4%

 

 

J.M. Smucker Co.

39,700

2,104,497

 

 

 

Gas Utilities - 4.3%

 

 

Energen Corp.

40,800

1,758,480

Questar Corp.

56,300

2,114,628

 

 

3,873,108

 

 

 

Health Care Equipment & Supplies - 5.5%

 

 

Hospira, Inc.*

50,100

2,234,460

Kinetic Concepts, Inc.*

71,500

2,644,070

 

 

4,878,530

 

 

 

 

 

 

Equity Securities - Cont'd

Shares

Value

Health Care Providers & Services - 4.5%

 

 

HealthSpring, Inc.*

121,000

$1,482,250

Lincare Holdings, Inc.*

81,400

2,543,750

 

 

4,026,000

Hotels, Restaurants & Leisure - 2.1%

 

 

Brinker International, Inc.

121,000

1,903,330

 

 

 

Household Durables - 1.9%

 

 

Whirlpool Corp.

24,100

1,686,036

 

 

 

Household Products - 2.4%

 

 

Church & Dwight Co., Inc.

37,350

2,119,239

 

 

 

IT Services - 4.6%

 

 

Global Payments, Inc.

58,100

2,713,270

Wright Express Corp.*

45,900

1,354,509

 

 

4,067,779

 

 

 

Leisure Equipment & Products - 1.3%

 

 

Polaris Industries, Inc.

27,500

1,121,450

 

 

 

Life Sciences - Tools & Services - 5.2%

 

 

Dionex Corp.*

39,600

2,572,812

Mettler-Toledo International, Inc.*

22,800

2,065,452

 

 

4,638,264

 

 

 

Machinery - 5.8%

 

 

Bucyrus International, Inc.

61,500

2,190,630

SPX Corp.

29,900

1,831,973

Valmont Industries, Inc.

13,900

1,184,002

 

 

5,206,605

 

 

 

Metals & Mining - 1.9%

 

 

Reliance Steel & Aluminum Co.

40,300

1,715,168

 

 

 

Multiline Retail - 1.4%

 

 

Nordstrom, Inc.

39,700

1,212,438

 

 

 

Oil, Gas & Consumable Fuels - 1.9%

 

 

Denbury Resources, Inc.*

115,300

1,744,489

 

 

 

Pharmaceuticals - 2.0%

 

 

Endo Pharmaceuticals Holdings, Inc.*

80,600

1,823,978

 

 

 

Road & Rail - 1.2%

 

 

Ryder System, Inc.

26,700

1,042,902

 

 

 

Software - 5.9%

 

 

ANSYS, Inc.*

69,600

2,607,912

Sybase, Inc.*

67,400

2,621,860

 

 

5,229,772

 

 

 

 

 

 

Equity Securities - Cont'd

Shares

Value

Specialty Retail - 5.0%

 

 

GameStop Corp.*

74,900

$1,982,603

Ross Stores, Inc.

52,700

2,517,479

 

 

4,500,082

 

 

 

Textiles, Apparel & Luxury Goods - 3.2%

 

 

Deckers Outdoor Corp.*

33,200

2,817,020

 

 

 

Thrifts & Mortgage Finance - 2.0%

 

 

Hudson City Bancorp, Inc.

137,200

1,804,180

 

 

 

Trading Companies & Distributors - 2.2%

 

 

WESCO International, Inc.*

67,200

1,935,360

 

 

 

Wireless Telecommunication Services - 1.8%

 

 

NII Holdings, Inc.*

55,000

1,648,900

 

 

 

 

 

 

      Total Equity Securities (Cost $79,132,661)

 

86,901,499

 

 

 

 

Principal

 

HIGH SOCIAL IMPACT INVESTMENTS - 1.5%

Amount

 

Calvert Social Investment Foundation Notes, 1.76%,

 

 

     7/1/11 (b)(i)(r)

$1,419,488

1,364,681

 

 

 

      Total High Social Impact Investments (Cost $1,419,488)

 

1,364,681

 

 

 

TIME DEPOSIT - 2.2%

 

 

State Street Corp. Time Deposit, 0.01%, 10/1/09

1,946,021

1,946,021

     

 

 

Total Time Deposit (Cost $1,946,021)

 

1,946,021

 

 

 

 

 

 

                TOTAL INVESTMENTS (Cost $82,498,170) - 101.1%

 

90,212,201

                Other assets and liabilities, net - (1.1%)

 

(1,006,123)

                Net Assets - 100%

 

$89,206,078

 

 

 

Net Assets Consist of:

 

 

Paid-in capital applicable to the following shares of common stock

 

 

     with 250,000,000 shares of $0.01 par value shares authorized:

 

 

          Class A: 3,491,356 shares outstanding

 

$79,868,212

          Class B: 259,144 shares outstanding

 

7,529,973

          Class C: 459,182 shares outstanding

 

9,652,334

          Class I: 175,325 shares outstanding

 

3,945,454

Accumulated net realized gain (loss) on investments

 

(19,503,926)

Net unrealized appreciation (depreciation) on investments

 

7,714,031

 

 

 

     Net Assets

 

$89,206,078

 

 

 

Net Asset Value Per Share:

 

 

Class A (based on net assets of $72,288,708)

 

$20.71

Class B (based on net assets of $4,793,350)

 

$18.50

Class C (based on net assets of $8,286,676)

 

$18.05

Class I (based on net assets of $3,837,344)

 

$21.89

Restricted Securities

Acquisition Dates

Cost

Calvert Social Investment Foundation Notes, 1.76%, 7/1/11

7/1/08

$1,419,488

 

* Non-income producing security.

(b) This security was valued by the Board of Directors. See note A.

(i) Restricted securities represent 1.5% of the net assets of the Fund.

(r) The coupon rate shown on floating or adjustable rate securities represents the rate at period end.

See notes to financial statements.

 

Statement of Operations
Year Ended September 30, 2009

Net Investment Income

 

 

Investment Income:

 

 

     Dividend income

 

$712,909

     Interest income

 

38,855

          Total investment income

 

751,764

 

 

 

Expenses:

 

 

     Investment advisory fee

 

511,528

     Transfer agency fees and expenses

 

350,992

     Administrative Services fees

 

192,007

     Distribution Plan expenses:

 

 

          Class A

 

221,124

          Class B

 

49,723

          Class C

 

73,900

     Directors' fees and expenses

 

13,610

     Custodian fees

 

27,667

     Registration fees

 

41,909

     Reports to shareholders

 

63,661

     Professional fees

 

24,307

     Miscellaneous

 

9,516

          Total expenses

 

1,579,944

          Reimbursement from Advisor:

 

 

               Class I

 

(13,255)

          Fees paid indirectly

 

(3,701)

               Net expenses

 

1,562,988

 

 

 

Net Investment Income (Loss)

 

(811,224)

 

 

 

Realized and Unrealized Gain (Loss) on Investments

 

 

Net realized gain (loss)

 

(13,562,431)

Change in unrealized appreciation or (depreciation)

 

2,549,748

 

 

 

Net Realized and Unrealized Gain

 

 

(Loss) on Investments

 

(11,012,683)

 

 

 

Increase (Decrease) in Net Assets

 

 

Resulting From Operations

 

($11,823,907)

 

See notes to financial statements.

 

Statements of Changes in Net Assets

 

 

Year Ended

Year Ended

 

 

 

September 30,

September 30,

 

Increase (Decrease) in Net Assets

 

2009

2008

 

Operations:

 

 

 

 

     Net investment income (loss)

 

($811,224)

($1,151,839)

 

     Net realized gain (loss)

 

(13,562,431)

(5,869,459)

 

     Change in unrealized appreciation

 

 

 

 

          or (depreciation)

 

2,549,748

(15,315,721)

 

 

 

 

 

 

          Increase (Decrease) in Net Assets

 

 

 

 

          Resulting From Operations

 

(11,823,907)

(22,337,019)

 

 

 

 

 

 

Distributions to shareholders from:

 

 

 

 

     Net realized gain:

 

 

 

 

          Class A Shares

 

--

(1,537,122)

 

          Class B Shares

 

--

(181,193)

 

          Class C Shares

 

--

(216,492)

 

          Class I Shares

 

--

(50,422)

 

     Total distributions

 

--

(1,985,229)

 

 

 

 

 

 

Capital share transactions:

 

 

 

 

     Shares sold:

 

 

 

 

          Class A Shares

 

10,271,700

16,454,254

 

          Class B Shares

 

340,561

680,800

 

          Class C Shares

 

582,113

1,135,109

 

          Class I Shares

 

861,998

1,302,429

 

     Reinvestment of distributions:

 

 

 

 

          Class A Shares

 

--

1,448,693

 

          Class B Shares

 

--

170,117

 

          Class C Shares

 

--

181,236

 

          Class I Shares

 

--

50,422

 

     Redemption fees:

 

 

 

 

          Class A Shares

 

11,208

1,244

 

          Class B Shares

 

89

186

 

          Class C Shares

 

82

17

 

     Shares redeemed:

 

 

 

 

          Class A Shares

 

(14,039,663)

(21,497,399)

 

          Class B Shares

 

(2,151,260)

(2,675,294)

 

          Class C Shares

 

(1,290,548)

(1,889,931)

 

          Class I Shares

 

(379,390)

(1,391,848)

 

     Total capital share transactions

 

(5,793,110)

(6,029,965)

 

 

 

 

 

 

Total Increase (Decrease) in Net Assets

 

(17,617,017)

(30,352,213)

 

 

 

 

 

 

Net Assets

 

 

 

 

Beginning of year

 

106,823,095

137,175,308

 

End of year

 

$89,206,078

$106,823,095

 

 

See notes to financial statements.

 

Statements of Changes in Net Assets

 

 

Year Ended

Year Ended

 

 

September 30,

September 30,

Capital Share Activity

 

2009

2008

Shares sold:

 

 

 

     Class A Shares

 

590,092

619,088

     Class B Shares

 

22,798

28,164

     Class C Shares

 

38,543

48,033

     Class I Shares

 

47,056

47,442

Reinvestment of distributions:

 

 

 

     Class A Shares

 

--

51,924

     Class B Shares

 

--

6,700

     Class C Shares

 

--

7,349

     Class I Shares

 

--

1,739

Shares redeemed:

 

 

 

     Class A Shares

 

(803,556)

(807,773)

     Class B Shares

 

(139,206)

(111,834)

     Class C Shares

 

(86,788)

(80,380)

     Class I Shares

 

(20,223)

(48,548)

Total capital share activity

 

(351,284)

(238,096)

 

See notes to financial statements.

 

Notes to Financial Statements

 

Note A -- Significant Accounting Policies

General: The Calvert Capital Accumulation Fund (the "Fund"), a series of Calvert World Values Fund, Inc., is registered under the Investment Company Act of 1940 as a non-diversified, open-end management investment company. The operation of each series is accounted for separately. The Fund offers four classes of shares of capital stock. Class A shares are sold with a maximum front-end sales charge of 4.75%. Class B shares are sold without a front-end sales charge. With certain exceptions, the Fund will impose a deferred sales charge at the time of redemption, depending on how long investors have owned the shares. Class C shares are sold without a front-end sales charge. With certain exceptions, the Fund will impose a deferred sales charge on shares sold within one year of purchase. Class B and Class C shares have higher levels of expenses than Class A shares. Class I shares require a minimum account balance of $1,000,000. The $1 million minimum initial investment may be waived for certain institutional accounts, where it is believed to be in the best interest of the Fund and its shareholders. Class I shares have no front-end or deferred sales charge and have lower levels of expenses than Class A Shares. Each class has different: (a) dividend rates, due to differences in Distribution Plan expenses and other class-specific expenses, (b) exchange privileges; and (c) class-specific voting rights.

Security Valuation: Net asset value per share is determined every business day as of the close of the regular session of the New York Stock Exchange (generally 4:00 p.m. Eastern time). The Fund uses independent pricing services approved by the Board of Directors to value its investments wherever possible. Securities for which market quotations are available are valued at last sale price or official closing price on the primary market or exchange in which they trade. Short-term notes are stated at amortized cost, which approximates fair value. The Fund may invest in securities whose resale is subject to restrictions. Investments for which market quotations are not available or deemed not reliable are fair valued in good faith under the direction of the Board of Directors.

In determining fair value, the Board considers all relevant qualitative and quantitative information available. These factors are subject to change over time and are reviewed periodically. The values assigned to fair value investments are based on available information and do not necessarily represent amounts that might ultimately be realized. Further, because of the inherent uncertainty of valuation, those estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and the differences could be material.

At September 30, 2009 securities valued at $1,364,681, or 1.5% of net assets, were fair valued in good faith under the direction of the Board of Directors.

The Fund utilizes various methods to measure the fair value of its investments. Generally Accepted Accounting Principles (GAAP) establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used to value assets and liabilities at measurement date. These inputs are summarized in the three broad levels listed below:

Level 1 -- quoted prices in active markets for identical securities

Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy during the period. For additional information on the Fund's policy regarding valuation of investments, please refer to the Fund's most recent prospectus.

The following is a summary of the inputs used to value the Fund's net assets as of September 30, 2009:

 

Valuation Inputs

Investments in Securities

Level 1

Level 2

Level 3

Total

Equity securities*

$86,901,499

-

--

$86,901,499

Other debt obligations

--

$1,946,021

$1,364,681

3,310,702

TOTAL

$86,901,499

$1,946,021

$1,364,681**

$90,212,201

* For further breakdown of equity securities by industry type, please refer to the Statement of Net Assets.

**Level 3 securities represent 1.5% of net assets.

Repurchase Agreements: The Fund may enter into repurchase agreements with recognized financial institutions or registered broker/dealers and, in all instances, holds underlying securities with a value exceeding the total repurchase price, including accrued interest. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its value and a possible loss of income or value if the counterparty fails to perform in accordance with the terms of the agreement.

Restricted Securities: The Fund may invest in securities that are subject to legal or contractual restrictions on resale. Generally, these securities may only be sold publicly upon registration under the Securities Act of 1933 or in transactions exempt from such -registration. Information regarding restricted securities is included at the end of the Fund's Statement of Net Assets.

Security Transactions and Net Investment Income: Security transactions are accounted for on trade date. Realized gains and losses are recorded on an identified cost basis and may include proceeds from litigation. Dividend income is recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost investments and/or as a realized gain. Interest income, which includes amortization of premium and accretion of discount on debt securities, is accrued as earned. Investment income and realized and unrealized gains and losses are allocated to separate classes of shares based upon the relative net assets of each class. Expenses arising in connection with a class are charged directly to that class. Expenses common to the classes are allocated to each class in proportion to their relative net assets.

Distributions to Shareholders: Distributions to shareholders are recorded by the Fund on ex-dividend date. Dividends from net investment income and distributions from net realized capital gains, if any, are paid at least annually. Distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles; accordingly, periodic reclassifications are made within the Fund's capital accounts to reflect income and gains available for distribution under income tax regulations.

Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

Redemption Fees: The Fund charges a 2% redemption fee on redemptions, including exchanges, made within 30 days of purchase in the same Fund (within seven days for Class I shares). The redemption fee is payable to the Class of the Fund from which the redemption is made, and is accounted for as an addition to paid-in capital. The fee is intended to discourage market-timers by ensuring that short-term trading costs are borne by the investors making the transactions and not the shareholders already in the Fund.

Expense Offset Arrangements: The Fund has an arrangement with its custodian
bank whereby the custodian's fees may be paid indirectly by credits earned on the Fund's cash on deposit with the bank. These credits are used to reduce the Fund's expenses. Such a deposit arrangement may be an alternative to overnight investments.

Federal Income Taxes: No provision for federal income or excise tax is required since the Fund intends to qualify as a regulated investment company under the Internal Revenue Code and to distribute substantially all of its taxable earnings.

Management has analyzed the Fund's tax positions taken for all open federal income tax years and has concluded that no provision for federal income tax is required in the Fund's financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service for a period of three years.

New Accounting Pronouncements: In July 2009, the Financial Accounting Standards Board (FASB) launched the FASB Accounting Standards CodificationTM as the single source of authoritative nongovernmental U.S. generally accepted accounting principles (GAAP). The Codification is effective for interim and annual periods ending after September 15, 2009. All existing accounting standards documents are superseded as described in FASB Statement No. 168, The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principles. All other accounting literature not included in the Codification is nonauthoritative.

 

Note B -- Related Party Transactions

Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by Calvert Group, Ltd. ("Calvert"), which is indirectly wholly owned by UNIFI Mutual Holding Company. The Advisor provides investment advisory services and pays the salaries and fees of officers and Directors of the Fund who are employees of the Advisor or its affiliates. For its services, the Advisor receives an annual fee, payable monthly, of .65% of the Fund's average daily net assets. Under the terms of the agreement, $46,553 was payable at year end. In addition, $40,542 was payable at year end for operating expenses paid by the Advisor during September 30, 2009.

The Advisor has contractually agreed to limit net annual fund operating expenses through January 31, 2010 for Class I. The contractual expense cap is 0.86%. For the purposes of this expense limit, operating expenses do not include interest expense, brokerage commissions, taxes, and extraordinary expenses. To the extent that any expense offset credits are earned, the Advisor's obligation under the contractual limitation may be reduced and the Advisor may benefit from the expense offset arrangement.

Calvert Administrative Services Company, an affiliate of the Advisor, provides administrative services to the Fund for an annual fee, payable monthly of .25% for Class A, Class B and Class C, and .10% for Class I shares based on their average daily net assets. Under the terms of the agreement, $17,439 was payable at year end.

Calvert Distributors, Inc., an affiliate of the Advisor, is the distributor and principal underwriter for the Fund. Distribution Plans, adopted by Class A, Class B, and Class C shares, allow the Fund to pay the Distributor for expenses and services associated with distribution of shares. The expenses paid may not exceed .35%, 1.00% and 1.00% -annually of average daily net assets of Class A, Class B, and Class C, respectively. The amount actually paid by the Fund is an annualized fee, payable monthly of .35%, 1.00% and 1.00% of the Fund's average daily net assets of Class A, Class B, and Class C, respectively. Class I shares do not have Distribution Plan expenses. Under the terms of the agreement, $30,850 was payable at year end.

The Distributor received $15,587 as its portion of the commissions charged on sales of the Fund's Class A shares for the year ended September 30, 2009.

Calvert Shareholder Services, Inc. ("CSSI"), an affiliate of the Advisor, acts as shareholder servicing agent for the Fund. For its services, CSSI received a fee of $91,373 for the year ended September 30, 2009. Under the terms of the agreement, $7,200 was payable at year- end. Boston Financial Data Services, Inc. is the transfer and dividend disbursing agent.

The Fund may invest in Community Investment Notes issued by the Calvert Social Investment Foundation (the "CSI Foundation"). The CSI Foundation is a 501(c)(3) non-profit organization that receives in-kind support from the Calvert Group, Ltd. and its subsidiaries. The Fund has received from the Securities and Exchange Commission an exemptive order permitting the Fund to make investments in these notes under certain conditions.

Each Director of the Fund who is not an employee of the Advisor or its affiliates receives an annual retainer of $44,000 plus a meeting fee of $2,000 for each Board meeting attended. Additional fees of up to $5,000 annually may be paid to the committee chairs and $2,500 annually may be paid to committee members, plus a committee meeting fee of $500 for each committee meeting attended. Director's fees are allocated to each of the funds served.

Note C -- Investment Activity

During the year purchases and sales of investments, other than short-term securities, were $56,856,398 and $61,112,273, respectively.

The cost of investments owned at September 30, 2009 for federal income tax purposes was $83,884,102. Net unrealized appreciation aggregated $6,328,099, of which $12,143,692 related to appreciated securities and $5,815,593 related to depreciated -securities.

Net realized capital loss carryforwards for federal income tax purposes of $372,018 and $6,150,178 at September 30, 2009 may be utilized to offset future capital gains until expiration in September 2016 and September 2017, respectively.

The Fund intends to elect to defer net capital losses of $11,595,798 incurred from November 1, 2008 through September 30, 2009 and treat them as arising in the fiscal year ending September 30, 2010.

The tax character of dividends and distributions paid during the years ended September 30, 2009 and September 30, 2008 are as follows:

Distributions paid from:

2009

2008

     Ordinary income

--

$420,152

     Long term capital gain

--

1,565,077

          Total

--

$1,985,229

As of September 30, 2009, the components of distributable earnings/(accumulated losses) on a tax basis were as follows:

Capital loss carryforward

($6,522,196)

Unrealized appreciation (depreciation)

6,328,099

     Total

($194,097)

The differences between the components of distributable earnings on a tax basis and the amounts reflected in the statement of net assets are primarily due to temporary book-tax differences that will reverse in a subsequent period. These book-tax differences are mainly due to wash sales and the deferral of post October losses.

Reclassifications, as shown in the table below, have been made to the Fund's components of net assets to reflect income and gains available for distribution (or available capital loss carryovers, as applicable) under income tax law and regulations. These reclassifications are due to permanent book-tax differences and have no impact on net assets. The primary permanent difference causing such reclassification for the Fund is the tax treatment of net operating losses.

Undistributed net investment income

$811,224

Paid-in capital

(811,224)

Note D -- Line of Credit

A financing agreement is in place with all Calvert Group Funds and State Street Corporation ("SSC"). Under the agreement, SSC provides an unsecured line of credit facility, in the aggregate amount of $50 million ($25 million committed and $25 million uncommitted), accessible by the Funds for temporary or emergency purposes only. Borrowings under the committed facility bear interest at the higher of the London Interbank Offered Rate, (LIBOR) or the overnight Federal Funds Rate plus 1.25% per annum. A commitment fee of .15% per annum is incurred on the unused portion of the committed facility, which is allocated to all participating funds. The Fund had no loans outstanding pursuant to this line of credit during the year ended September 30, 2009.

Note E - Subsequent Events

In preparing the financial statements as of September 30, 2009, no subsequent events or transactions occurred through November 23, 2009, the date the financial statements were issued, that would have materially impacted the financial statements as presented.

Financial Highlights

 

 

 

Years Ended

 

 

 

September 30,

September 30,

September 30,

Class A Shares

 

2009

2008

2007 (z)

Net asset value, beginning

 

$23.00

$28.11

$24.02

Income from investment operations

 

 

 

 

     Net investment income (loss)

 

(.17)

(.21)

(.26)

     Net realized and unrealized gain (loss)

 

(2.12)

(4.49)

4.35

          Total from investment operations

 

(2.29)

(4.70)

4.09

Distributions from

 

 

 

 

     Net realized gain

 

--

(.41)

--

          Total distributions

 

--

(.41)

--

Total increase (decrease) in net asset value

 

(2.29)

(5.11)

4.09

Net asset value, ending

 

$20.71

$23.00

$28.11

 

 

 

 

 

Total return*

 

(9.96%)

(16.97%)

17.03%

Ratios to average net assets:A

 

 

 

 

     Net investment income (loss)

 

(.92%)

(.79%)

(.98%)

     Total expenses

 

1.88%

1.66%

1.66%

     Expenses before offsets

 

1.88%

1.66%

1.66%

     Net expenses

 

1.88%

1.65%

1.64%

Portfolio turnover

 

72%

49%

47%

Net assets, ending (in thousands)

 

$72,289

$85,195

$107,976

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended

 

 

 

September 30,

September 30,

 

Class A Shares

 

2006

2005

 

Net asset value, beginning

 

$23.42

$21.60

 

Income from investment operations

 

 

 

 

     Net investment income (loss)

 

(.27)

(.31)

 

     Net realized and unrealized gain (loss)

 

.87

2.13

 

          Total from investment operations

 

.60

1.82

 

Total increase (decrease) in net asset value

 

.60

1.82

 

Net asset value, ending

 

$24.02

$23.42

 

 

 

 

 

 

Total return*

 

2.56%

8.43%

 

Ratios to average net assets:A

 

 

 

 

     Net investment income (loss)

 

(1.05%)

(1.26%)

 

     Total expenses

 

1.71%

1.68%

 

     Expenses before offsets

 

1.71%

1.68%

 

     Net expenses

 

1.69%

1.68%

 

Portfolio turnover

 

31%

157%

 

Net assets, ending (in thousands)

 

$103,499

$110,970

 

 

See notes to financial highlights.

 

Financial Highlights

 

 

 

Years Ended

 

 

 

September 30,

September 30,

September 30,

Class B Shares

 

2009

2008

2007 (z)

Net asset value, beginning

 

$20.78

$25.66

$22.13

Income from investment operations

 

 

 

 

     Net investment income (loss)

 

(.39)

(.47)

(.45)

     Net realized and unrealized gain (loss)

 

(1.89)

(4.00)

3.98

          Total from investment operations

 

(2.28)

(4.47)

3.53

Distributions from

 

 

 

 

     Net realized gain

 

--

(.41)

--

          Total distributions

 

--

(.41)

--

Total increase (decrease) in net asset value

 

(2.28)

(4.88)

3.53

Net asset value, ending

 

$18.50

$20.78

$25.66

 

 

 

 

 

Total return*

 

(10.97%)

(17.70%)

15.95%

Ratios to average net assets:A

 

 

 

 

     Net investment income (loss)

 

(2.04%)

(1.73%)

(1.86%)

     Total expenses

 

2.99%

2.57%

2.54%

     Expenses before offsets

 

2.99%

2.57%

2.54%

     Net expenses

 

2.99%

2.56%

2.52%

Portfolio turnover

 

72%

49%

47%

Net assets, ending (in thousands)

 

$4,793

$7,803

$11,613

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended

 

 

 

September 30,

September 30,

 

Class B Shares

 

2006

2005

 

Net asset value, beginning

 

$21.76

$20.24

 

Income from investment operations

 

 

 

 

     Net investment income (loss)

 

(.49)

(.49)

 

     Net realized and unrealized gain (loss)

 

.86

2.01

 

          Total from investment operations

 

.37

1.52

 

Total increase (decrease) in net asset value

 

.37

1.52

 

Net asset value, ending

 

$22.13

$21.76

 

 

 

 

 

 

Total return*

 

1.70%

7.51%

 

Ratios to average net assets:A

 

 

 

 

     Net investment income (loss)

 

(1.91%)

(2.12%)

 

     Total expenses

 

2.57%

2.54%

 

     Expenses before offsets

 

2.57%

2.54%

 

     Net expenses

 

2.55%

2.53%

 

Portfolio turnover

 

31%

157%

 

Net assets, ending (in thousands)

 

$13,752

$16,503

 

 

See notes to financial highlights.

 

Financial Highlights

 

 

Years Ended

 

 

September 30,

September 30,

September 30,

Class C Shares

2009

2008

2007 (z)

Net asset value, beginning

$20.20

$24.93

$21.47

Income from investment operations

 

 

 

     Net investment income (loss)

(.28)

(.38)

(.41)

     Net realized and unrealized gain (loss)

(1.87)

(3.94)

3.87

          Total from investment operations

(2.15)

(4.32)

3.46

Distributions from

 

 

 

     Net realized gain

--

(.41)

--

     Total distributions

--

(.41)

--

Total increase (decrease) in net asset value

(2.15)

(4.73)

3.46

Net asset value, ending

$18.05

$20.20

$24.93

 

 

 

 

Total return*

(10.64%)

(17.62%)

16.12%

Ratios to average net assets:A

 

 

 

     Net investment income (loss)

(1.75%)

(1.57%)

(1.74%)

     Total expenses

2.71%

2.42%

2.42%

     Expenses before offsets

2.71%

2.42%

2.42%

     Net expenses

2.70%

2.42%

2.41%

Portfolio turnover

72%

49%

47%

Net assets, ending (in thousands)

$8,287

$10,252

$13,275

 

 

 

 

 

 

 

 

 

Years Ended

 

 

September 30,

September 30,

 

Class C Shares

2006

2005

 

Net asset value, beginning

$21.10

$19.62

 

Income from investment operations

 

 

 

     Net investment income (loss)

(.42)

(.44)

 

     Net realized and unrealized gain (loss)

.79

1.92

 

          Total from investment operations

.37

1.48

 

Total increase (decrease) in net asset value

.37

1.48

 

Net asset value, ending

$21.47

$21.10

 

 

 

 

 

Total return*

1.75%

7.54%

 

Ratios to average net assets:A

 

 

 

     Net investment income (loss)

(1.84%)

(2.07%)

 

     Total expenses

2.49%

2.49%

 

     Expenses before offsets

2.49%

2.49%

 

     Net expenses

2.47%

2.49%

 

Portfolio turnover

31%

157%

 

Net assets, ending (in thousands)

$12,831

$14,038

 

See notes to financial highlights.

 

Financial Highlights

 

 

 

Years Ended

 

 

 

September 30,

September 30,

September 30,

Class I Shares

 

2009

2008

2007 (z)

 

 

 

 

 

Net asset value, beginning

 

$24.06

$29.16

$24.73

Income from investment operations

 

 

 

 

     Net investment income (loss)

 

.02

**

(.05)

     Net realized and unrealized gain (loss)

 

(2.19)

(4.69)

4.48

          Total from investment operations

 

(2.17)

(4.69)

4.43

Distributions from

 

 

 

 

     Net realized gain

 

--

(.41)

--

          Total distributions

 

--

(.41)

--

Total increase (decrease) in net asset value

 

(2.17)

(5.10)

4.43

Net asset value, ending

 

$21.89

$24.06

$29.16

 

 

 

 

 

Total return*

 

(9.02%)

(16.31%)

17.91%

Ratios to average net assets:A

 

 

 

 

     Net investment income (loss)

 

.10%

.01%

(0.19%)

     Total expenses

 

1.28%

1.18%

1.14%

     Expenses before offsets

 

.86%

.87%

.87%

     Net expenses

 

.86%

.86%

.86%

Portfolio turnover

 

72%

49%

47%

Net assets, ending (in thousands)

 

$3,837

$3,573

$4,311

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended

 

 

 

September 30,

September 30,

 

Class I Shares

 

2006

2005

 

Net asset value, beginning

 

$23.89

$21.85

 

Income from investment operations

 

 

 

 

     Net investment income (loss)

 

(.02)

(.06)

 

     Net realized and unrealized gain (loss)

 

.86

2.10

 

          Total from investment operations

 

.84

2.04

 

Total increase (decrease) in net asset value

 

.84

2.04

 

Net asset value, ending

 

$24.73

$23.89

 

 

 

 

 

 

Total return*

 

3.52%

9.34%

 

Ratios to average net assets:A

 

 

 

 

     Net investment income (loss)

 

(0.20%)

(0.43%)

 

     Total expenses

 

1.90%

1.28%

 

     Expenses before offsets

 

.88%

.87%

 

     Net expenses

 

.86%

.86%

 

Portfolio turnover

 

31%

157%

 

Net assets, ending (in thousands)

 

$3,273

$2,596

 

 

See notes to financial highlights.

A Total expenses do not reflect amounts reimbursed and/or waived by the Advisor or reductions from expense offset arrangements. Expenses before offsets reflect expenses after reimbursement and/or waiver by the Advisor but prior to reductions from expense offset arrangements. Net expenses are net of all reductions and represent the net expenses paid by the Fund.

(z) Per share figures are calculated using the Average Shares Method.

* Total return is not annualized for periods less than one year and does not reflect deduction of any front-end or deferred sales charge.

** Less than $0.01 per share.

See notes to financial statements.

 

Explanation of Financial Tables

 

Schedule of Investments

The Schedule of Investments is a snapshot of all securities held in the fund at their market value, on the last day of the reporting period. Securities are listed by asset type (e.g., common stock, corporate bonds, U.S. government obligations) and may be further broken down into sub-groups and by industry classification.

 

Statement of Assets and Liabilities

The Statement of Assets and Liabilities is often referred to as the fund's balance sheet. It lists the value of what the fund owns, is due and owes on the last day of the reporting period. The fund's assets include the market value of securities owned, cash, receivables for securities sold and shareholder subscriptions, and receivables for dividends and interest payments that have been earned, but not yet received. The fund's liabilities include payables for securities purchased and shareholder redemptions, and expenses owed but not yet paid. The statement also reports the fund's net asset value (NAV) per share on the last day of the reporting period. The NAV is calculated by dividing the fund's net assets (assets minus liabilities) by the number of shares outstanding. This statement is accompanied by a Schedule of Investments. Alternatively, if certain conditions are met, a Statement of Net Assets may be presented in lieu of this statement and the Schedule of Investments.

 

Statement of Net Assets

The Statement of Net Assets provides a detailed list of the fund's holdings, including each security's market value on the last day of the reporting period. The Statement of Net Assets includes a Schedule of Investments. Other assets are added and other liabilities subtracted from the investments total to calculate the fund's net assets. Finally, net assets are divided by the outstanding shares of the fund to arrive at its share price, or Net Asset Value (NAV) per share.

At the end of the Statement of Net Assets is a table displaying the composition of the fund's net assets. Paid in Capital is the money invested by shareholders and represents the bulk of net assets. Undistributed Net Investment Income and Accumulated Net Realized Gains usually approximate the amounts the fund had available to distribute to shareholders as of the statement date. Accumulated Realized Losses will appear as negative balances. Unrealized Appreciation (Depreciation) is the difference between the market value of the fund's investments and their cost, and reflects the gains (losses) that would be realized if the fund were to sell all of its investments at their statement-date -values.

 

Statement of Operations

The Statement of Operations summarizes the fund's investment income earned and expenses incurred in operating the fund. Investment income includes dividends earned from stocks and interest earned from interest-bearing securities in the fund. Expenses incurred in operating the fund include the advisory fee paid to the investment advisor, administrative services fee, distribution plan expenses (if applicable), transfer agent fees, shareholder servicing expenses, custodial, legal, and audit fees, and the printing and postage expenses related to shareholder reports. Expense offsets (fees paid indirectly) are also shown. Credits earned from offset arrangements are used to reduce the fund's expenses. This statement also shows net gains (losses) realized on the sale of investments and the increase or decrease in the unrealized appreciation (depreciation) on investments held during the period.

 

Statement of Changes in Net Assets

The Statement of Changes in Net Assets shows how the fund's total net assets changed during the two most recent reporting periods. Changes in the fund's net assets are attributable to investment operations, distributions and capital share transactions.

The Operations section of the report summarizes information detailed in the Statement of Operations. The Distribution section shows the dividend and capital gain distributions made to shareholders. The amounts shown as distributions in this section may not match the net investment income and realized gains amounts shown in the Operations section because distributions are determined on a tax basis and certain investments or transactions may be treated differently for financial statement and tax purposes. The Capital Share Transactions section shows the amount shareholders invested in the fund, either by purchasing shares or by reinvesting distributions, and the amounts redeemed. The corresponding numbers of shares issued, reinvested and redeemed are shown at the end of the report.

 

Financial Highlights

The Financial Highlights table provides a per-share breakdown per class of the components that affect the fund's net asset value for current and past reporting periods. The table provides total return, total distributions, expense ratios, portfolio turnover and net assets for the applicable period. Total return is a measure of a fund's performance that encompasses all elements of return: dividends, capital gain distributions and changes in net asset value. Total return is the change in value of an investment over a given period, assuming reinvestment of any dividends and capital gain distributions, expressed as a percentage of the initial investment. Total distributions include distributions from net investment income and net realized gains. Long-term gains are earned on securities held in the fund more than one year. Short-term gains, on the sale of securities held less than one year, are treated as ordinary dividend income for tax purposes. The expense ratio is a fund's cost of doing business, expressed as a percentage of net assets. These expenses directly reduce returns to shareholders. Portfolio turnover measures the trading activity in a fund's investment portfolio -- how often securities are bought and sold by a fund. Portfolio turnover is affected by market conditions, changes in the size of the fund, the nature of the fund's investments and the investment style of the portfolio.

Proxy Voting

The Proxy Voting Guidelines of the Calvert Funds that the Fund uses to determine how to vote proxies relating to portfolio securities are provided as an Appendix to the Fund's Statement of Additional Information. The Statement of Additional Information can be obtained free of charge by calling the Fund at 1-800-368-2745, by visiting the Calvert website at www.calvert.com; or by visiting the SEC's website at www.sec.gov.

Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund's website at www.calvert.com and on the SEC's website at www.sec.gov.

Availability of Quarterly Portfolio Holdings

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund's Form N-Q is available on the SEC's website at www.sec.gov. The Fund's Form N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC;  information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Director and Officer Information Table

Name &
Age


Position
with
Fund


Position
Start
Date

Principal Occupation
During Last 5 Years

(Not Applicable to Officers)

# of Calvert
Portfolios
Overseen

Other
Directorships

INDEPENDENT TRUSTEES/DIRECTORS

REBECCA L. ADAMSON

AGE: 60

Trustee

 

Director

 

Director

 

Director

1989 CSIF

2000 IMPACT

2000 CSIS

2005 CWVF

President of the national non-profit, First People's Worldwide, formerly First Nations Financial Project. Founded by her in 1980, First People's Worldwide is the only American Indian alternative development institute in the country.

17
  • Mashantucket Pequot Endowment
  • Bay & Paul Foundation

RICHARD L. BAIRD, JR.

AGE: 61

Trustee & Chair

Director & Chair

Director & Chair

Director & Chair

1982

CSIF

2000

CSIS

2005

CWVF

2005

Impact

President and CEO of Adagio Health Inc. (formerly Family Health Council, Inc.) in Pittsburgh, PA, a non-profit corporation which provides family planning services, nutrition, maternal/child health care, and various health screening services and community preventive health programs.

29

 

JOHN G. GUFFEY, JR.

AGE: 61

Director

 

Trustee

 

Director

 

Director

 

 

1992

CWVF

1982

CSIF

2000

CSIS

2005

IMPACT

Treasurer and Director of Silby, Guffey and Co., Inc., a venture capital firm (inactive as of 2003) and President of Aurora Press Inc., a privately held publisher of trade paperbacks.

 

 

 

 

 

29
  • Ariel Funds (3)
  • Calvert Social Investment Foundation
  • Calvert Ventures, LLC

MILES DOUGLAS HARPER, III

AGE: 46

Director

 

Trustee

 

Director

 

Director

2000

Impact

2005

CSIF

2005

CSIS

2005

CWVF

Partner, Gainer Donnelly & Desroches (public accounting firm) since January 1999.

17
  • Bridgeway Funds (14)

JOY V. JONES

AGE: 59

Director

Trustee

 

Director

 

Director

2000

Impact

1990

CSIF

2000

CSIS

2005

CWVF

Attorney and entertainment manager in New York City.

 

 

 

17
  • Director, The Twenty-First Century Foundation

TERRENCE J. MOLLNER, Ed.D.

AGE: 64

Director

Trustee

 

Director

 

Director

1992

CWVF

1982

CSIF

2000

CSIS

2005

IMPACT

Founder, Chairperson, and President of Trusteeship Institute, Inc., a diverse foundation known principally for its consultation to corporations converting to cooperative employee-ownership and the development of socially and spiritually responsible investment vehicles. Chairperson, Stakeholders Capital, Inc., an asset management firm and financial services provider in Amherst, MA.

17
  • Calvert Social Investment Foundation
  • Ben & Jerry's Homemade, Inc.
  • ArtNOW, Inc.
  • Yourolivebranch.org

SYDNEY AMARA MORRIS

AGE: 60

Trustee

 

Director

 

Director

 

Director

1982

CSIF

2000

CSIS

2005

CWVF

2005

IMPACT

Rev. Morris currently serves as Parish Minister to the Keweenaw Unitarian Universalist Fellowship in Houghton, MI.

She previously served as Senior Minister of the Unitarian Church of Vancouver and as Minister of the Unitarian-Universalist Fellowship of Ames, IA. Rev. Morris is a graduate of Harvard Divinity School. She currently chairs the Umbrian Universalist Committee on Socially Responsible Investing.

17

 

INTERESTED TRUSTEES/DIRECTORS

BARBARA J. KRUMSIEK

AGE: 57

Director &

President

Trustee & Senior Vice

President

Director & Senior Vice

President

 

Director & President

1997

CWVF

 

1997

CSIF

 

2000

CSIS

 

2000

Impact

President, Chief Executive Officer and Chair of Calvert Group, Ltd.

 

 

 

 

 

 

54
  • Calvert Social Investment Foundation
  • Pepco Holdings, Inc.
  • Acacia Life Insurance Company (Chair)

D. WAYNE SILBY, Esq.

AGE: 61

Director

 

Trustee & President

 

Director

& President

Director

1992

CWVF

1982

CSIF

 

2000

CSIS

2000

Impact

Mr. Silby is the founding Chair of the Calvert Funds. He is the Chair-Elect and a principal of Syntao.com, a Beijing-based company promoting corporate social responsibility. He was an officer and director of Silby, Guffey and Co., Inc., a venture capital firm (inactive as of 2003).

29
  • UNIFI Mutual Holding Company
  • Calvert Social Investment Foundation
  • Grameen Foundation USA
  • Studio School Fund
  • Syntao.com China
  • The Ice Organization

OFFICERS

KAREN BECKER

Age: 56

Chief Compliance Officer

2005

Chief Compliance Officer for the Calvert Funds. In March 2009, Ms. Becker also became Head of the Securities Operations Department for Calvert Asset Management Company, Inc. Prior to 2005, Ms. Becker was Senior Vice President of Calvert Group, Ltd. and Head of Calvert Client Services.

SUSAN WALKER BENDER, Esq.

AGE: 50

Assistant Vice-President &

Assistant Secretary

1988

CSIF

2000

CSIS

1992

CWVF

2000

Impact

Assistant Vice President, Assistant Secretary and Associate General Counsel of Calvert Group, Ltd.

 

JENNIFER BERG

AGE: 36

Assistant Fund Controller

2009

Fund Administration Manager for Calvert Group Ltd.

THOMAS DAILEY

AGE: 45

Vice President

2004

CSIF

Vice President of Calvert Asset Management Company, Inc.

 

IVY WAFFORD DUKE, Esq.

AGE: 41

Assistant Vice-President &

Assistant Secretary

1996

CSIF

2000

CSIS

1996

CWVF

2000

Impact

Assistant Vice President, Assistant Secretary and Deputy General Counsel of Calvert Group, Ltd., and Chief Compliance Officer for Calvert Asset Management Company and Calvert Distributors, Inc.

TRACI L. GOLDT

AGE: 35

Assistant Secretary

2004

Executive Assistant to General Counsel, Calvert Group, Ltd.

GREGORY B. HABEEB

AGE: 59

Vice President

2004

CSIF

 

Senior Vice President of Calvert Asset Management Company, Inc.

 

HUI PING HO, CPA

AGE: 44

Assistant Treasurer

 

2000

Tax Compliance Manager of Calvert Group, Ltd. and Assistant Fund Treasurer.

LANCELOT A. KING, Esq.

AGE: 39

Assistant Vice President & Assistant Secretary

2002

Assistant Vice President, Assistant Secretary and Associate General Counsel of Calvert Group, Ltd.

EDITH LILLIE

AGE: 52

Assistant Secretary

 

2007

Assistant Secretary and Regulatory Matters Manager of Calvert Group, Ltd.

AUGUSTO DIVO MACEDO, Esq.

AGE: 46

Assistant Vice President & Assistant Secretary

2007

Assistant Vice President, Assistant Secretary, and Associate Counsel Compliance Calvert Group, Ltd. Prior to joining Calvert in 2005, Mr. Macedo served as 2nd Vice President at Acacia Life Insurance Company and The Advisors Group, Acacia's broker-dealer and federally registered investment adviser.

JANE B. MAXWELL Esq.

AGE: 57

Assistant Vice President & Assistant Secretary

 

2005

Assistant Vice President, Assistant Secretary & Assistant General Counsel of Calvert Group, Ltd. Prior to joining Calvert in 2004, Ms. Maxwell was an associate with Sullivan & Worcester LLP.

ANDREW K. NIEBLER, Esq.

AGE: 42

Assistant Vice President & Assistant Secretary

2006

Assistant Vice President, Assistant Secretary & Associate General Counsel of Calvert Group, Ltd.  Prior to joining Calvert in 2006, Mr. Niebler was an Associate with Cleary, Gottlieb, Steen & Hamilton LLP. 

CATHERINE P. ROY

AGE: 53

 

Vice President

2004

 

Senior Vice President of Calvert Asset Management Company, Inc. Prior to joining Calvert in 2004, Ms. Roy was Senior Vice President of US Fixed Income for Baring Asset Management, and SVP and Senior Portfolio Manager of Scudder Insurance Asset Management.

WILLIAM M. TARTIKOFF, Esq.

AGE: 62

Vice President and Secretary

1990

CSIF

2000

CSIS

1992

CWVF

2000

Impact

Senior Vice President, Secretary, and General Counsel of Calvert Group, Ltd.

 

NATALIE TRUNOW

AGE: 41

Vice President

2008

Senior Vice President of Calvert Asset Management Company, Inc., and Chief Investment Officer - Equities. Prior to joining Calvert in August 2008, Ms. Trunow was the Section Head (2005-2008) and Portfolio Manager (2001-2008) for the Global Public Markets Group of General Motors Asset Management.

RONALD M. WOLFSHEIMER, CPA

AGE: 57

Treasurer

1982

CSIF

2000

CSIS

1992

CWVF

2000

Impact

Senior Vice President and Chief Financial and Administrative Officer of Calvert Group, Ltd. and Fund Treasurer.

MICHAEL V. YUHAS JR., CPA

AGE: 48

Fund Controller

1999

CSIF

2000

CSIS

1999

CWVF

2000

Impact

Vice President of Fund Administration of Calvert Group, Ltd. and Fund Controller.

 

 

The address of Directors/Trustees and Officers is 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814, except Mr. Silby's address is 1715 18th Street, N.W., Washington, DC 20009. Ms. Krumsiek is an interested person of the Fund since she is an officer and director of the Fund's advisor and its affiliates and a director of its parent companies. Mr. Silby is an interested person of the Fund since he is a director of the parent company of the Fund's advisor.

Additional information about the Fund's Directors/Trustees can be found in the Statement of Additional Information (SAI). You can get a free copy of the SAI at www.calvert.com, or by contacting your broker, or the Fund at 1-800-368-2745.

 

To Open an Account
800-368-2748

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Calvert Information Network
(24 hours, 7 days a week)
800-368-2745

Service for Existing Account
Shareholders: 800-368-2745
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800-541-1524

Branch Office
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814

Registered, Certified
or Overnight Mail
Calvert Group
c/o BFDS,
330 West 9th Street
Kansas City, MO 64105

Web Site
www.calvert.com

Principal Underwriter
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814

 

Calvert Capital Accumulation Fund

 

This report is intended to provide fund information to shareholders. It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.

 

 

Note: The information on our website is not incorporated by reference into this report; our website address is included as an inactive textual reference only.

 

Calvert's Family of Funds

Tax-Exempt Money Market Funds
CTFR Money Market Portfolio

Taxable Money Market Funds
First Government Money Market Fund
CSIF Money Market Portfolio

Municipal Funds
Calvert Tax-Free Bond Fund

Taxable Bond Funds
CSIF Bond Portfolio
Income Fund
Short Duration Income Fund
Long-Term Income Fund
Ultra-Short Income Fund
Government Fund
Short-Term Government Fund
High Yield Bond Fund

Equity Funds
CSIF Enhanced Equity Portfolio
CSIF Equity Portfolio
Calvert Large Cap Growth Fund
Calvert Large Cap Value Fund
Calvert Social Index Fund
Capital Accumulation Fund
CWV International Equity Fund
New Vision Small Cap Fund
Small Cap Value Fund
Mid Cap Value Fund
Global Alternative Energy Fund
Global Water Fund
International Opportunities Fund

Balanced and Asset Allocation Funds
CSIF Balanced Portfolio
Calvert Conservative Allocation Fund
Calvert Moderate Allocation Fund
Calvert Aggressive Allocation Fund

 

 

 

<PAGE>

Calvert International Opportunities Fund

Annual Report

September 30, 2009

Calvert Investments

A UNIFI Company

 

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TABLE OF CONTENTS

4

 

President's Letter

7

 

SRI Update

10

 

Portfolio Management Discussion

15

 

Shareholder Expense Example

17

 

Report of Independent Registered Public Accounting Firm

18

 

Statement of Net Assets

22

 

Statement of Operations

23

 

Statements of Changes in Net Assets

25

 

Notes to Financial Statements

31

 

Financial Highlights

34

 

Explanation of Financial Tables

36

 

Proxy Voting and Availability of Quarterly Portfolio Holdings

37

 

Director and Officer Information Table

48

 

Basis of Board's Approval for Investment Subadvisory Contract

 

Dear Shareholder:

Market volatility and shifting investment cycles are nothing new to long-term investors. Through the course of numerous "bubbles," political disputes, wars, and economic crises, the financial markets have been repeatedly tested and proven resilient. However, the watershed financial and economic events of the past 12 months have tested the resilience of the global markets and investors in an unprecedented fashion, and we are likely to see changes in the structure and regulation of financial institutions and the markets for years to come.

This environment highlights how critical integrity of management, regulatory oversight, transparency, and corporate governance are to the health of the global financial system and our economy. Calvert has long believed that many of the criteria we review create signals about the strength and integrity of corporate management, and we have included corporate governance as an integral part of our sustainable and responsible investment (SRI) criteria and of our advocacy efforts with companies. Beyond the evaluations and influence with companies themselves, we are participating in a number of initiatives to urge financial regulatory reform and safeguard shareholder interests. Two of the most critical include our support of the Consumer Financial Protection Agency bill and our work with the United Nations Environment Programme Finance Initiative (UNEP FI) in promoting environmental, social, and governance (ESG) investment criteria as a fiduciary responsibility for plan sponsors and institutional investors.

A Time Period of Challenge and Contrast

As you know, this challenging time period opened with global economies and the financial markets in virtual free fall following the failure of Lehman Brothers in September 2008. Global market panic ensued and risk-averse investors sought the safety of Treasuries and money market funds, avoiding any asset class with perceived credit or liquidity risk.

As the reporting year progressed, we saw a somewhat surprising reversal in this sentiment. Investors gained confidence, encouraged by "green shoots" of recovery in newly released economic data and the perceived success of U.S. government stimulus and monetary policies. These factors, along with renewed confidence in the U.S. banking system following the government's "stress tests," helped fuel a rally in stocks, commodities, and many sectors of the bond market.

By September 30, 2009, stocks had rebounded sharply from their March 9 lows, with year-to-date gains of 19.26% for the broad-market Standard & Poor's 500 Index, 22.43% for the small-cap Russell 2000 Index, and 32.63% for the Russell Midcap Index. While outsize year-to-date gains for stocks helped soften their steep declines from October 2008 through March 2009, they did not offset them--and all areas of the U.S. equity market finished the 12-month reporting period far into negative territory. For example, the S&P 500 Index posted a loss of 6.91% for the reporting period despite its strong 2009 performance. U.S. stocks of every style, strategy, and capitalization range fell during this period, with large-cap stocks modestly outperforming small-cap stocks, and growth outpacing value. On the international front, the MSCI EAFE Investable Market Index, a benchmark for international stocks, returned 5.02% for the 12-month period.

The bond market posted overall gains for the reporting period, with the Barclays Capital Aggregate Bond Index up 10.56%, primarily as a result of its corporate bond holdings. Money-market returns remained low, reflecting the Federal Reserve's continued target rate of 0% to 0.25% for federal funds loans.

Sustainable and Responsible Investing

While huge challenges confront the global economy, we also believe that the opportunities facing the Obama administration--and sustainable investors--are greater than ever. In the last six months since we reported to you, Calvert has made progress on several sustainable and responsible investment initiatives.

As a key member of the Asset Management Working Group of UNEP FI, Calvert participated in the release of its new report, Fiduciary Responsibility--Legal and Practical Aspects of Integrating Environmental, Social and Governance Issues into Institutional Investment. The report makes the case that integrating ESG considerations into investment decisions should be a legal fiduciary responsibility--and highlights the financial materiality of ESG issues and their systemic risks and costs. The report calls on the investment industry and policymakers to move toward creating sustainable capital markets to help avert a "Natural Resources Crisis."

Following our participation in the World Water Forum earlier in the year, in August Calvert urged the CEO Water Mandate, a private-public initiative of the U.N. Global Compact, to assign an "urgent priority" to developing a policy outlining the issues, risks, and broad responsibilities of companies and industries with regard to water and human rights. We also urged the group to develop an "implementation framework" that companies could use to assess and manage these issues in their business operations. At Calvert, we actively address water and human rights issues in Calvert Global Water Fund's investment criteria and advocacy objectives.

In 2009, many of the shareholder resolutions that we filed with companies we own were related to governance and finance, such as executive compensation, board diversity, and responsible lending policies. Clearly, these areas will remain among our top advocacy priorities throughout the year.

What Lies Ahead?

In the course of a year, the global financial markets have rallied from the brink of collapse and the U.S. economy is showing improved vital signs in the key housing, job, and credit markets. However, while we are optimistic about long-term economic and market recovery, we believe that the systemic imbalances revealed in the global credit crisis need to be addressed, and we are encouraged by progress toward that end.

Internationally, the nations at the September G-20 summit met to enact changes to international economic policies that will promote "sustainable and balanced growth" among developed and emerging countries. On the home front, the Obama administration and Congress are grappling with credit-rating agency reform, banking reform, and the role of the Federal Reserve and U.S. government in the oversight of financial institutions and the markets, among many critical issues. In our view, over time, these efforts may work to help repair our financial system, providing additional stability to the economy and markets. In the short term, we believe the worst of the recession is behind us, but economic recovery will be uneven and staggered, with ongoing market volatility.

Other challenges that government policymakers are addressing are, of course, climate change and environmental degradation. The Obama administration has already made significant progress toward enacting policies that will benefit the environment, and
many of these policies--such as stimulus funding for development of alternative energy
sources--will likely also benefit sustainable and responsible investors.

Check Your Portfolio Allocations

If you're concerned about the current market environment, talk with your financial advisor about whether your portfolio's allocations to stocks, bonds, and cash are appropriate and well-diversified, given your goals, time horizon, and risk attitudes. Consider that investors who continued to invest regularly during the market's steep declines generally benefited from the rebound that followed, while those who sold their assets may have a long wait to make up their losses. We encourage you to visit our newly enhanced web site, www.calvert.com, for frequent updates and commentary on economic and market developments from Calvert professionals.

As always, we appreciate your investing with Calvert.

Sincerely,

Barbara J. Krumsiek
President and CEO
Calvert Group, Ltd.
October 2009

For more complete information on any Calvert Fund, call your advisor or visit our website for a prospectus. An investor should consider the investment objectives, risks, charges and expenses of an investment carefully before investing. The prospectus contains this and other information. Read it carefully before you invest or send money.

 

SRI Update

from the Calvert Sustainability Research Department

Against the backdrop of the market turmoil over the past 12 months, Calvert has continued to advocate for responsible management of environmental, social, and governance (ESG) factors, which we believe create long-term shareholder value. We've also had unprecedented opportunities to be active participants in the creation of new policies in these arenas.

In the final months of 2008, we broadened our strategic engagement and shareholder advocacy efforts to include companies in virtually every industry, while offering shareholders more investment choices by launching our new line-up of sustainable and responsible investing (SRI) strategies. Now all of our SRI funds fall under one of three types:

Calvert SignatureTM Portfolios--Our original approach, comprising two distinct research frameworks: a rigorous review of financial performance and a thorough assessment of ESG performance.

Calvert SolutionTM Portfolios --Theme-oriented investments dedicated to solving some of today's most pressing environmental and sustainability challenges. This includes Calvert Global Alternative Energy Fund and Calvert Global Water Fund, which just celebrated its first anniversary.

Calvert SAGETM Portfolios -- Calvert Large Cap Value Fund, launched in December 2008, is the first to use this approach, which leverages strategic engagement to address SRI concerns in companies that have the potential to improve but may not yet meet certain standards. Many of these are companies we have not previously invested in.

 

Advancing National Change

As the Obama administration and Congress began to focus their attention on some of Calvert's core issues--such as corporate transparency and responsibility, energy and climate change, and financial market reform and governance--we have been making sure that our shareholders are represented in the process.

We've particularly been involved with the Securities and Exchange Commission (SEC) on the issue of shareholder rights and corporate governance, responding to several SEC proposals in that area and collaborating with the Social Investment Forum to develop a proposal for mandatory corporate disclosure of ESG policies, programs, and performance.

Shareholder Advocacy

Another successful proxy season has drawn to a close, with Calvert filing 26 shareholder proposals and co-filing another nine. Topics included climate change, board and employee diversity, executive compensation, product safety, sustainability reporting, and political contributions. We were able to successfully withdraw 21 of these resolutions before the end of the period after the relevant companies agreed to address our concerns.

It's particularly notable that we successfully withdrew the "say-on-pay" proposal we filed with Microsoft--which would give shareholders a voice on executive compensation--after the company announced plans in September to include a management-sponsored advisory vote on compensation in its next proxy statement. A similar resolution presented at General Mills earned an impressive 51% majority support that same month as well. Given that legislative efforts on this issue have stalled, these results should help spur renewed efforts for a legislative solution.

Climate Change

Calvert's comprehensive approach to tackling the issue of climate change spans our funds, our company, and the globe. On September 22, Calvert CEO Barbara Krumsiek participated in a roundtable on "Sustainable Business and Decent Work" at a gathering of more than 300 leaders from around the world for the United Nations Leadership Forum on Climate Change. That same week, Calvert Senior Vice President for Sustainability Research and Policy Bennett Freeman was a panelist at a session on corporate sustainability and responsibility at the New York Stock Exchange.

Calvert also signed the Copenhagen Communique, which is poised to become the definitive statement from the business community and calls on world leaders to reach a meaningful agreement at the upcoming U.N. Climate Change Conference.

Community Investments

Many of our Funds participate in Calvert's High Social Impact Investing program, which is administered through the Calvert Social Investment Foundation. This community investment program may allocate a small percentage of Fund assets at below-market interest rates to investments that provide economic opportunity for struggling populations.1 This year, the Foundation led efforts to create MFX Solutions, a project that enables microfinance institutions in developing countries to avoid the risk of currency value changes in their borrowings. This lowers costs for all parties and protects microloan recipients against the risks of currency fluctuations and highly variable interest rates.

Special Equities

A modest but important portion of certain funds is allocated to small private companies that are developing products or services that address important sustainability or environmental issues. One such investment is organic heirloom tomato producer New Day Farms in Virginia.2 The company shipped its first crop this past season. While it still faces some challenges, we are pleased with the reception its locally-grown produce has received from customers.

Another recent Special Equities investment is LeapFrog Financial Inclusion Fund, which is advancing the micro-insurance market in the developing world. Its mission is to extend insurance and related financial services to 25 million people in some of the poorest and most excluded communities across Africa and Asia. LeapFrog recently closed on an investment in an insurer in South Africa that provides policies to persons who are HIV positive or have diabetes. These people are either unable to obtain insurance or can do so only at extraordinarily high cost. As a result, they can't obtain a home loan or start a business that requires insurance coverage. The LeapFrog investment in this innovative insurer enables them to engage in productive activity and secure their families' futures.

1. As of September 30, 2009, Calvert Social Investment Foundation Community Investment Notes represented the following percentages of Fund net assets: Calvert Social Investment Fund Balanced Portfolio 1.08%, Calvert Social Investment Fund Bond Portfolio 0.35%, Calvert Social Investment Fund Equity Portfolio 0.56%, Calvert Capital Accumulation Fund 1.53%, Calvert World Values International Equity Fund 1.03%, Calvert New Vision Small Cap Fund 1.33%, and Calvert Large Cap Growth Fund 0.36%. The Calvert Social Investment Foundation is a 501(c)(3) nonprofit organization. The Foundation's Community Investment Note Program is not a mutual fund and should not be confused with any Calvert Group-sponsored investment product.

2. As of September 30, 2009, New Day Farms represented 0.0064% of CSIF Equity Portfolio; Leapfrog Financial Inclusion Fund represented 0.0025% of Calvert Large Cap Growth Fund.

All holdings are subject to change without notice.

For more complete information on any Calvert Fund, call your advisor or visit our website for a prospectus. An investor should consider the investment objectives, risks, charges and expenses of an investment carefully before investing. The prospectus contains this and other information. Read it carefully before you invest or send money.

 

Portfolio Management Discussion

Sophie Horsfall
of F&C Management Limited

 

Performance

Calvert International Opportunities Fund Class A shares (at NAV) returned -0.16% for the 12-month period ended September 30, 2009. The Morgan Stanley Capital International Europe, Australasia, and Far East Small/MidCap Core Index (MSCI EAFE SMID) returned 10.17% for the same period.1 Stock selection was the primary cause for the Fund's relative underperformance.

Investment Climate

The reporting period saw unprecedented turbulence across global investment markets. Sentiment was dominated by the unravelling of the financial crisis among leading financial institutions in the U.S., U.K., and across Europe as a result of their exposure to "toxic" mortgage debt. Equities were further undermined early in the period by the prospect of a serious global recession. These fears prompted aggressive interest-rate cuts and the adoption of stimulus packages by governments around the world.

Announcement of the U.S. Treasury's plan to buy $700 billion in "toxic" bank assets initially helped markets rebound, but delays in getting some of the economic stimulus legislation passed hurt investor confidence and equities plunged to new lows.

 

International
Opportunities Fund
Statistics
September 30, 2009
Investment Performance
(total return at NAV*)

 

6 Months
Ended
9/30/09

12 Months
Ended
9/30/09

Class A

49.02%

-0.16%

Class C

48.55%

-0.82%

Class I

49.34%

0.26%

Class Y**

49.35%

0.05%

MSCI EAFE SMID

58.04%

10.17%

S&P Developed BMI ex-U.S. SmallCap Index***

61.76%

10.09%

Lipper International Small/Mid Cap Core Funds Average

58.17%

8.57%

 

 

 

Economic Sectors

% of Total
Investments

 

Consumer Discretionary

22.2%

 

Consumer Staples

7.7%

 

Energy

1.4%

 

Financials

12.6%

 

Health Care

12.9%

 

Industrials

23.2%

 

Information Technology

4.4%

 

Materials

4.7%

 

Time Deposit

1.8%

 

Utilities

9.1%

 

Total

100%

 

* Investment performance/return at NAV does not reflect the deduction of the Fund's maximum 4.75% front-end sales charge or any deferred sales charge.

** See note regarding Y shares on next page.

*** Source: Lipper Analytical Services, Inc.

 

International
Opportunities Fund
Statistics
September 30, 2009
Average Annual Total Returns
(with max. load)

 

Class A Shares

One year

-4.87%

Since Inception

-12.65%

(5/31/07)

 

 

 

 

Class C Shares

One year

-1.82%

Since Inception

-11.54%

(7/31/07)

 

 

International
Opportunities Fund
Statistics
September 30, 2009
Average Annual Total Returns

 

Class I Shares

One Year

0.26%

Since Inception

-10.38%

(5/31/07)

 

 

Class Y Shares*

One Year

0.05%

Since Inception

-10.73%

(5/31/07)

 

 

* Calvert International Opportunities Fund first offered Class Y shares on October 31, 2008. Performance prior to that date reflects the performance of Class A shares at net asset value (NAV). Actual Class Y share performance would have been different.

The performance data shown represents past performance, does not guarantee future results, and does not reflect the deduction of taxes that a shareholder would pay on the Fund's/Portfolio's distributions or the redemption of Fund/Portfolio shares. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Visit www.calvert.com for current performance data.     The gross expense ratio for Class A shares is 2.81%. This number may vary from the expense ratio shown elsewhere in this report because it is based on a different time period and, if applicable, does not include fee or expense waivers. Performance data quoted already reflects deduction of fund operating expenses.

 

Systemic fears and the impact of the credit crunch drove the U.S., European, U.K., and Japanese economies into a deep recession. Central banks around the world cut interest rates to historic lows. In addition, the U.S. and U.K. introduced extensive stimulus packages to help kick-start their economies.

While our favored areas of Asia and the emerging markets also experienced a slowdown in economic activity, they still posted strong growth figures in absolute terms. This reinforces our long-term view that these markets will ultimately de-couple from the U.S. as their own domestic economies become increasingly important and begin to supplement the export sectors, which have historically driven growth. Already, China is the world's second-largest economy, while India is ranked fourth.

 

Performance Comparison
Comparison of change in value of $10,000 investment.

 

 

*Source: Lipper Analytical Services, Inc.

Average annual total returns in the Portfolio Statistics and the Performance Comparison line graph are with maximum load deducted -- they assume reinvestment of dividends and reflect the deduction of the Fund's Class A maximum front-end sales charge of 4.75%, or deferred sales charge, as applicable. No sales charge has been applied to the index used for comparison. However, the Lipper average does reflect the deduction of the category's average front-end sales charge. The value of an investment in Class A & I shares is plotted in the line graph. The value of an investment in another class of shares would be different.

 

More positive economic data and the decisive actions of government entities helped investor sentiment turn the corner in early March and, aside from a stutter toward the end of June and into early July, markets rallied strongly--regaining the lost ground to post a positive return over the 12-month period.

Portfolio Review

Weak stock selection primarily drove the Fund's underperformance relative to its benchmark--particularly in the Industrials, Consumer Staples, and Consumer Discretionary sectors. Sector allocation was also slightly negative. On the other hand, regional asset allocation and stock selection in the Health Care sector helped offset some of the negative impact.

Most notably, U.K. bus and rail operator First Group detracted from returns as high levels of debt on the company's balance sheet weighed on the stock. Gamestop, the video game and entertainment software retailer, hampered performance after the company missed its earnings target during the second quarter of 2009. Toward the end of the period, forensic and litigation services firm FTI Consulting performed poorly upon concerns that the company's corporate restructuring business could struggle in an improving economic environment, given there would be fewer companies in need of help.

On the positive side, Australian coal-seam gas producer Arrow Energy was a strong performer following a rebound in oil prices during the second quarter of 2009. Favorable government educational policies helped Consumer Discretionary stock Benesse perform well. Also, cable maker Nexans boosted the Fund in the final quarter with strong results and more new contracts amid an improving economic outlook.

With regard to allocations, there was a slight negative effect from our underweight to Information Technology while an underweight to Energy proved to be slightly positive for relative performance. Regionally, the Fund's overweight position in North America, underweight to Japan, and overweight to the Asia-Pacific region and emerging markets all added value.

Finally, our larger-than-normal cash position hindered performance as markets posted strong returns on the back of improved risk appetite and an improving economic outlook.

Outlook

We continue to maintain a barbell strategy of owning defensive growth stocks within Health Care Services as well as an overweight to cyclical companies within Capital Goods and Information Technology. Improvement in economic data--including

 

International
Opportunities Fund
Statistics
September 30, 2009

Ten Largest
Stock Holdings

% of Net
Assets

QBE Insurance Group Ltd.

2.9%

Adidas AG

2.9%

Hyflux Ltd.

2.8%

ASX Ltd.

2.7%

Benesse Corp.

2.7%

Lassila & Tikanoja Oyj

2.7%

Accor SA

2.7%

Vallourec SA

2.5%

FirstGroup plc

2.5%

Informa plc

2.5%

Total

26.9%

Institute for Supply Management new orders in the U.S. and Organisation for Economic Co-operation and Development (OECD) leading indicators--suggests that the worst of the recession is behind us. However, given this year's significant run-up in global equity markets, a continued improvement in leading economic indicators will be required for equity markets to continue their rise.

Last year's indiscriminate sell-off has presented us with the opportunity to invest in high-quality companies with attractive valuations for the Fund. Overall, we are targeting companies that we feel have strong fundamentals and solid long-term growth prospects that are well-positioned to benefit during an economic recovery.

October 2009

1. The fund's Board of Directors approved a change to the benchmark from the Standard & Poor's (S&P) Developed Broad Market Index (BMI) ex-U.S. Small Cap to the MSCI EAFE SMID during the period after S&P made changes in late 2008 that increased the small-cap orientation of the Index. Since the launch of the Fund, leading international benchmark provider MSCI had created the MSCI EAFE SMID Index, which more fully reflects the Fund's investment objective and incorporates both mid-cap and small-cap non-U.S. developed market stocks.

As of September 30, 2009, the following companies represented the following percentages of Fund net assets: First Group 2.53%, Gamestop 1.20%, FTI Consulting 1.51%, Arrow Energy 0.41%, Bennesse 2.69%, and Nexans 1.49%. All holdings are subject to change without notice.

 

Shareholder Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges and redemption fees; and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (April 1, 2009 to September 30, 2009).

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), or redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Beginning
Account Value
4/1/09

Ending Account
Value
9/30/09

Expenses Paid
During Period*
4/1/09 - 9/30/09

Class A

 

 

 

Actual

$1,000.00

$1,490.20

$10.37

Hypothetical

$1,000.00

$1,016.74

$8.40

(5% return per year before expenses)

 

 

 

 

 

 

 

Class C

 

 

 

Actual

$1,000.00

$1,485.50

$15.59

Hypothetical

$1,000.00

$1,012.53

$12.62

(5% return per year before expenses)

 

 

 

 

 

 

 

Class I

 

 

 

Actual

$1,000.00

$1,493.40

$7.51

Hypothetical

$1,000.00

$1,019.04

$6.08

(5% return per year before expenses)

 

 

 

 

 

 

 

Class Y

 

 

 

Actual

$1,000.00

$1,493.50

$8.82

Hypothetical

$1,000.00

$1,017.99

$7.14

(5% return per year before expenses)

 

 

 

*Expenses are equal to the Fund's annualized expense ratio of 1.66%, 2.50%, 1.20% and 1.41% for Class A, Class C , Class I and Class Y respectively, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).

 

Report of Independent Registered Public Accounting Firm

The Board of Directors of Calvert World Values Fund, Inc. and Shareholders of Calvert International Opportunities Fund:

We have audited the accompanying statement of net assets of Calvert International Opportunities Fund (the Fund), a series of the Calvert World Values Fund, Inc., as of September 30, 2009, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the two-year period then ended and for the period from May 31, 2007 (inception) through September 30, 2007. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of September 30, 2009, by correspondence with custodians and brokers. As to securities purchased or sold but not yet received or delivered, we performed other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Calvert International Opportunities Fund as of September 30, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the two-year period then ended and for the period from May 31, 2007 (inception) through September 30, 2007, in conformity with U.S. generally accepted accounting principles.

KPMG LLP
Philadelphia, Pennsylvania
November 23, 2009

 

Statement of Net Assets
September 30, 2009

Equity Securities - 97.7%

 

Shares

Value

Australia - 12.5%

 

 

 

Ansell Ltd.

 

51,538

$454,643

Arrow Energy NL*

 

28,146

106,268

ASX Ltd.

 

22,799

707,947

CSL Ltd.

 

15,408

454,794

QBE Insurance Group Ltd.

 

35,706

757,843

Ramsay Health Care Ltd.

 

28,638

277,135

Sonic Healthcare Ltd.

 

39,449

494,507

 

 

 

3,253,137

 

 

 

 

Brazil - 3.5%

 

 

 

Cia de Saneamento Basico do Estado de Sao Paulo (ADR)

 

5,900

223,787

Diagnosticos da America SA*

 

10,100

260,788

Itau Unibanco Banco Multiplo SA (ADR)

 

11,811

237,992

Tractebel Energia SA

 

16,200

190,615

 

 

 

913,182

 

 

 

 

Canada - 3.3%

 

 

 

Canadian Pacific Railway Ltd.

 

8,465

395,557

Shoppers Drug Mart Corp.

 

11,399

467,166

 

 

 

862,723

 

 

 

 

Finland - 2.7%

 

 

 

Lassila & Tikanoja Oyj

 

28,930

694,052

 

 

 

 

France - 12.2%

 

 

 

Accor SA

 

12,438

692,135

Cap Gemini SA

 

11,175

585,153

Cie Generale d'Optique Essilor International SA

 

5,335

303,939

Nexans SA

 

4,798

387,646

Publicis Groupe

 

13,674

548,283

Vallourec SA

 

3,904

661,330

 

 

 

3,178,486

 

 

 

 

Germany - 5.0%

 

 

 

Adidas AG

 

14,121

747,160

Rhoen Klinikum AG

 

10,689

271,917

SMA Solar Technology AG

 

2,788

285,735

 

 

 

1,304,812

 

 

 

 

Greece - 2.2%

 

 

 

Alpha Bank AE*

 

31,390

578,578

 

 

 

 

 

 

 

 

Equity Securities - Cont'd

 

Shares

Value

Japan - 14.2%

 

 

 

Benesse Corp.

 

14,200

$698,061

Daiwa House Industry Co. Ltd.

 

19,000

199,542

FamilyMart Co. Ltd.

 

15,400

497,246

Nikon Corp.

 

22,000

403,598

NTT Data Corp.

 

86

276,338

Shimano, Inc.

 

14,500

628,568

Shiseido Co. Ltd.

 

21,000

367,186

Sumitomo Chemical Co. Ltd.

 

84,000

350,997

USS Co. Ltd.

 

4,410

263,600

 

 

 

3,685,136

 

 

 

 

Mexico - 3.0%

 

 

 

Banco Compartamos SA de CV

 

119,788

438,048

Urbi Desarrollos Urbanos SA de CV*

 

165,211

335,287

 

 

 

773,335

 

 

 

 

Netherlands - 0.5%

 

 

 

QIAGEN NV*

 

5,646

119,759

 

 

 

 

New Zealand - 0.5%

 

 

 

Contact Energy Ltd.*

 

27,622

115,039

 

 

 

 

Norway - 4.1%

 

 

 

ProSafe SE

 

49,780

256,337

Tandberg ASA

 

12,000

287,163

Tomra Systems ASA

 

113,700

531,189

 

 

 

1,074,689

 

 

 

 

Philippines - 0.7%

 

 

 

Manila Water Co., Inc.

 

549,000

179,601

 

 

 

 

Singapore - 4.5%

 

 

 

ComfortDelgro Corp. Ltd.

 

389,000

444,524

Hyflux Ltd.

 

332,000

718,717

 

 

 

1,163,241

 

 

 

 

Spain - 4.8%

 

 

 

Acciona SA

 

2,840

386,368

Ebro Puleva SA

 

19,813

376,785

Gamesa Corp. Tecnologica SA

 

21,883

490,097

 

 

 

1,253,250

 

 

 

 

Sweden - 1.8%

 

 

 

Svenska Cellulosa AB, Series B

 

35,200

476,712

 

 

 

 

Switzerland - 0.5%

 

 

 

Adecco SA

 

2,520

133,814

 

 

 

 

 

 

 

 

Equity Securities - Cont'd

 

Shares

Value

United Kingdom - 12.2%

 

 

 

Associated British Foods plc

 

21,073

$285,617

eaga plc

 

191,021

442,613

FirstGroup plc

 

99,082

655,925

Informa plc

 

130,022

655,393

Legal & General Group plc

 

243,012

341,426

Severn Trent plc

 

25,707

399,228

SSL International plc

 

36,673

375,578

 

 

 

3,155,780

 

 

 

 

United States - 9.5%

 

 

 

Calgon Carbon Corp.*

 

26,097

387,019

DaVita, Inc.*

 

5,863

332,080

FTI Consulting, Inc.*

 

9,183

391,288

GameStop Corp.*

 

11,772

311,605

Ormat Technologies, Inc.

 

3,204

130,787

Quanta Services, Inc.*

 

13,600

300,968

SunPower Corp.*

 

5,925

177,098

Watson Wyatt Worldwide, Inc.

 

10,042

437,430

 

 

 

2,468,275

 

 

 

 

      Total Equity Securities (Cost $22,891,330)

 

 

25,383,601

 

 

 

 

 

 

Principal

 

Time Deposit - 1.9%

 

Amount

 

State Street Corp. Time Deposit, 0.01%, 10/1/09

 

$475,254

475,254

 

 

 

 

      Total Time Deposit (Cost $475,254)

 

 

475,254

 

 

 

 

 

 

 

 

                TOTAL INVESTMENTS (Cost $23,366,584) - 99.6%

 

 

25,858,855

                Other assets and liabilities, net - 0.4%

 

 

116,753

                Net Assets - 100%

 

 

$25,975,608

 

 

 

 

Net Assets Consist of:

 

 

 

Paid-in capital applicable to the following shares of common stock

 

 

 

     with 250,000,000 shares of $.01 par value shares authorized:

 

 

 

          Class A: 1,870,198 shares outstanding

 

 

$24,977,314

          Class C: 72,929 shares outstanding

 

 

946,471

          Class I: 327,951 shares outstanding

 

 

4,665,499

          Class Y: 9,749 shares outstanding

 

 

77,900

Undistributed net investment income

 

 

73,526

Accumulated net realized gain (loss) on investments and foreign

 

 

 

     currency transactions

 

 

(7,257,722)

Net unrealized appreciation (depreciation) on investments, foreign

 

 

 

     currencies and assets and liabilities denominated in foreign

 

 

 

     currencies

 

 

2,492,620

 

 

 

 

          Net Assets

 

 

$25,975,608

 

 

 

 

Net Asset Value Per Share

 

 

 

Class A (based on net assets of $21,327,825)

 

 

$11.40

Class C (based on net assets of $823,253)

 

 

$11.29

Class I (based on net assets of $3,712,438)

 

 

$11.32

Class Y (based on net assets of $112,092)

 

 

$11.50

 

*Non-income producing security.

Abbreviations:
ADR: American Depositary Receipt
GDR: Global Depositary Receipt

 

See notes to financial statements.

 

Statement of Operations
Year Ended September 30, 2009

Net Investment Income

 

 

Investment Income:

 

 

     Dividend income (net of foreign taxes withheld of $36,177)

 

$416,007

     Interest income

 

258

          Total investment income

 

416,265

 

 

 

Expenses:

 

 

     Investment advisory fee

 

145,706

     Transfer agency fees and expenses

 

65,793

     Distribution Plan expenses:

 

 

          Class A

 

36,016

          Class C

 

5,405

     Directors' fees and expenses

 

3,376

     Administrative fees

 

57,344

     Accounting fees

 

2,890

     Custodian fees

 

99,908

     Registration fees

 

41,513

     Reports to shareholders

 

13,526

     Professional fees

 

21,592

     Miscellaneous

 

6,383

          Total expenses

 

499,452

          Reimbursement from Advisor:

 

 

               Class A

 

(147,697)

               Class C

 

(15,505)

               Class I

 

(28,635)

               Class Y

 

(13,206)

          Fees paid indirectly

 

(1,492)

               Net expenses

 

292,917

 

 

 

               Net Investment Income

 

123,348

 

 

 

Realized and Unrealized Gain (Loss)

 

 

Net realized gain (loss) on:

 

 

     Investments

 

(7,025,870)

     Foreign currency transactions

 

(49,696)

 

 

(7,075,566)

 

 

 

Change in unrealized appreciation or (depreciation) on:

 

 

     Investments and foreign currencies

 

8,121,359

     Assets and liabilities denominated in foreign currencies

 

(217)

 

 

8,121,142

 

 

 

Net Realized and Unrealized Gain (Loss)

 

1,045,576

 

 

 

Increase (Decrease) in Net Assets

 

 

Resulting From Operations

 

$1,168,924

 

 

See notes to financial statements.

 

Statements of Changes in Net Assets

 

 

Year Ended

Year Ended

 

 

 

September 30,

September 30,

 

Increase (Decrease) in Net Assets

 

2009

2008

 

Operations:

 

 

 

 

     Net investment income

 

$123,348

$212,191

 

     Net realized gain (loss)

 

(7,075,566)

(275,488)

 

     Change in unrealized appreciation or (depreciation)

 

8,121,142

(5,883,885)

 

 

 

 

 

 

          Increase (Decrease) in Net Assets

 

 

 

 

          Resulting From Operations

 

1,168,924

(5,947,182)

 

 

 

 

 

 

Distributions to shareholders from:

 

 

 

 

     Net investment income:

 

 

 

 

          Class A Shares

 

(87,441)

--

 

          Class I Shares

 

(72,687)

--

 

     Net realized gain:

 

 

 

 

          Class A Shares

 

(6,794)

--

 

          Class C Shares

 

(227)

--

 

          Class I Shares

 

(1,532)

--

 

               Total distributions

 

(168,681)

--

 

 

 

 

 

 

Capital share transactions:

 

 

 

 

     Shares sold:

 

 

 

 

          Class A Shares

 

9,603,294

19,904,461

 

          Class C Shares

 

312,777

667,195

 

          Class I Shares

 

960,798

1,784,031

 

          Class Y Shares

 

107,900

--

 

     Reinvestment of distributions:

 

 

 

 

          Class A Shares

 

87,637

--

 

          Class C Shares

 

154

--

 

          Class I Shares

 

74,220

--

 

     Redemption Fees:

 

 

 

 

          Class A Shares

 

1,918

748

 

          Class C Shares

 

495

--

 

          Shares redeemed:

 

 

 

 

          Class A Shares

 

(5,951,385)

(4,194,219)

 

          Class C Shares

 

(143,120)

(27,121)

 

          Class I Shares

 

(912,018)

(217,494)

 

          Class Y Shares

 

(30,000)

--

 

               Total capital share transactions

 

4,112,670

17,917,601

 

 

 

 

 

 

Total Increase (Decrease) in Net Assets

 

5,112,913

11,970,419

 

 

 

 

 

 

Net Assets

 

 

 

 

Beginning of year

 

20,862,695

8,892,276

 

End of year (including undistributed net investment

 

 

 

 

     income of $73,526 and $159,996, respectively)

 

$25,975,608

$20,862,695

 

See notes to financial statements.

 

 

 

Year Ended

Year Ended

 

 

September 30,

September 30,

Capital Share Activity

 

2009

2008

Shares sold:

 

 

 

     Class A Shares

 

1,083,297

1,381,632

     Class C Shares

 

34,401

47,253

     Class I Shares

 

108,850

120,686

     Class Y Shares

 

12,347

--

Reinvestment of distributions:

 

 

 

     Class A Shares

 

10,732

--

     Class C Shares

 

20

--

     Class I Shares

 

9,167

--

Shares redeemed:

 

 

 

     Class A Shares

 

(676,505)

(299,560)

     Class C Shares

 

(15,911)

(1,975)

     Class I Shares

 

(95,222)

(15,856)

     Class Y Shares

 

(2,598)

--

          Total capital share activity

 

468,578

1,232,180

See notes to financial statements.

 

Notes to Financial Statements

 

Note A -- Significant Accounting Policies

General: The Calvert International Opportunities Fund (the "Fund"), a series of Calvert World Values Fund, Inc., is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The operation of each series is accounted for separately. Class A shares are sold with a maximum front-end sales charge of 4.75%. Class C shares are sold without a front-end sales charge. With certain exceptions, the Fund will impose a deferred sales charge on shares sold within one year of purchase. Class C shares have higher levels of expenses than Class A shares. Class I shares require a minimum account balance of $1,000,000. The $1 million minimum initial investment may be waived for certain institutional accounts, where it is believed to be in the best interest of the Fund and its shareholders. Class I shares have no front-end or deferred sales charge and have lower levels of expenses than Class A shares. Effective October 31, 2008, the Fund began to offer Class Y shares. Class Y shares are generally only available to wrap or similar fee-based programs offered by financial intermediaries that have entered into an agreement with the Fund's Distributor to offer Class Y shares. Class Y shares have no front-end or deferred sales charge and have lower levels of expenses than Class A shares. Each class has different: (a) dividend rates, due to differences in Distribution Plan expenses and other class-specific expenses, (b) exchange privileges, and (c) class-specific voting rights.

Security Valuation: Net asset value per share is determined every business day as of the close of the regular session of the New York Stock Exchange (generally 4:00 p.m. Eastern time). The Fund uses independent pricing services approved by the Board of Directors to value its investments wherever possible. Securities for which market quotations are available are valued at last sale price or official closing price on the primary market or exchange in which they trade. Foreign securities are valued based on quotations from the principal market in which such securities are normally traded. If events occur after the close of the principal market in which foreign securities are traded, and before the Fund's net asset value is determined, that are expected to materially affect the value of those securities, then they are valued at their fair value taking these events into account. Short-term notes are stated at amortized cost, which approximates fair value. Investments for which market quotations are not available or deemed not reliable are fair valued in good faith under the direction of the Board of Directors.

The Fund has retained a third party fair value pricing service to quantitatively analyze the price movement of its holdings on foreign exchanges and to automatically fair value if the variation from the prior day's closing price exceeds specified parameters.

In determining fair value, the Board considers all relevant qualitative and quantitative information available. These factors are subject to change over time and are reviewed periodically. The values assigned to fair value investments are based on available information and do not necessarily represent amounts that might ultimately be realized. Further, because of the inherent uncertainty of valuation, those estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and the differences could be material.

At September 30, 2009, no securities were fair valued in good faith under the direction of the Board of Directors.

The Fund utilizes various methods to measure the fair value of its investments. Generally Accepted Accounting Principles (GAAP) establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used to value assets and liabilities at measurement date. These inputs are summarized in the three broad levels listed below:

Level 1 -- quoted prices in active markets for identical securities

Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy during the period. For additional information on the Fund's policy regarding valuation of investments, please refer to the Fund's most recent prospectus.     

The following is a summary of the inputs used to value the Fund's net assets as of September 30, 2009:

 

Valuation Inputs

Investments in Securities

Level 1

Level 2

Level 3

Total

Equity securities*

$25,383,601

-

-

$25,383,601

Other debt obligations

-

$474,254

-

474,254

TOTAL

$25,383,601

$474,254

-

$25,857,855

* For further breakdown of equity securities by country, please refer to the Statement of Net Assets.

Repurchase Agreements: The Fund may enter into repurchase agreements with recognized financial institutions or registered broker/dealers and, in all instances, holds underlying securities with a value exceeding the total repurchase price, including accrued interest. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its value and a possible loss of income or value if the counterparty fails to perform in accordance with the terms of the agreement.

Security Transactions and Net Investment Income: Security transactions are accounted for on trade date. Realized gains and losses are recorded on an identified cost basis and may include proceeds from litigation. Dividend income is recorded on the ex-dividend date or, in the case of dividends on certain foreign securities, as soon as the Fund is informed of the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Interest income, which includes amortization of premium and accretion of discount on debt securities, is accrued as earned. Withholding taxes on foreign dividends have been provided for in accordance with the Fund's understanding of the applicable country's tax rules and rates. Investment income and realized and unrealized gains and losses are allocated to separate classes of shares based upon the relative net assets of each class. Expenses arising in connection with a class are charged directly to that class. Expenses common to the classes are allocated to each class in proportion to their relative net assets.

Foreign Currency Transactions: The Fund's accounting records are maintained in U. S. dollars. For valuation of assets and liabilities on each date of net asset value determination, foreign denominations are converted into U.S. dollars using the current exchange rate. Security transactions, income and expenses are translated at the prevailing rate of exchange on the date of the event. The effect of changes in foreign exchange rates on securities and foreign currencies is included in the net realized and unrealized gain or loss on securities and foreign currencies.

Distributions to Shareholders: Distributions to shareholders are recorded by the Fund on ex-dividend date. Dividends from net investment income and distributions from net realized capital gains, if any, are paid at least annually. Distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles; accordingly, periodic reclassifications are made within the Fund's capital accounts to reflect income and gains available for distribution under income tax regulations.

Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

Redemption Fees: The Fund charges a 2% redemption fee on redemptions, including exchanges, made within 30 days of purchase in the same Fund (within seven days for Class I shares). The redemption fee is paid to the Class of the Fund from which the redemption is made, and is accounted for as an addition to paid-in capital. The fee is intended to discourage market-timers by ensuring that short-term trading costs are borne by the investors making the transactions and not the shareholders already in the Fund.

Expense Offset Arrangements: The Fund has an arrangement with its custodian
bank whereby the custodian's fees may be paid indirectly by credits earned on the Fund's cash on deposit with the bank. These credits are used to reduce the Fund's expenses. Such a deposit arrangement may be an alternative to overnight investments.

Federal Income Taxes: No provision for federal income or excise tax is required since the Fund intends to qualify as a regulated investment company under the Internal Revenue Code and to distribute substantially all of its taxable earnings.

Management has analyzed the Fund's tax positions taken for all open federal income tax years and has concluded that no provision for federal income tax is required in the Fund's financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service for a period of three years.

New Accounting Pronouncements: In July 2009, the FASB launched the FASB Accounting Standards CodificationTM as the single source of authoritative nongovernmental U.S. generally accepted accounting principles (GAAP). The Codification is effective for interim and annual periods ending after September 15, 2009. All existing accounting standards documents are superseded as described in FASB Statement No. 168, The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principles. All other accounting literature not included in the Codification is nonauthoritative.

 

Note B -- Related Party Transactions

Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by Calvert Group, Ltd. ("Calvert"), which is indirectly wholly owned by UNIFI Mutual Holding Company. The Advisor provides investment advisory services and pays the salaries and fees of officers and Directors of the Fund who are employees of the Advisor or its affiliates. For its services, the Advisor receives an annual fee, payable monthly, of .80% of the average daily net assets. Under the terms of the agreement, $16,599 was payable at year end. In addition, $12,693 was payable at year end for operating expenses paid by the Advisor during September 2009.

The Advisor has contractually agreed to limit net annual fund operating expenses through January 31, 2010. The contractual expense cap is 1.66% for Class A, 2.50% for Class C, 1.20% for Class I, and 1.41% for Class Y. For the purposes of this expense limit, operating expenses do not include interest expense, brokerage commissions, taxes, and extraordinary expenses. The Fund incurred interest expense of $924 or 0.01% of average net assets, which was excluded from the expense cap. To the extent any expense offset credits are earned, the Advisor's obligation under the contractual limitation may be reduced and the Advisor may benefit from the expense offset arrangement.

Calvert Administrative Services Company, an affiliate of the Advisor, provides administrative services to the Fund for an annual fee, payable monthly, of .35% for Class A, Class C, and Class Y shares and .15% for Class I shares, based on their average daily net assets. Under the terms of the agreement, $6,640 was payable at year end.

Calvert Distributors, Inc., an affiliate of the Advisor, is the distributor and principal underwriter for the Fund. Distribution Plans, adopted by Class A and Class C shares, allow the Fund to pay the Distributor for expenses and services associated with the distribution of shares. The expenses paid may not exceed .50% and 1.00% annually of the Fund's average daily net assets of Class A and Class C, respectively. The amount actually paid by the Fund is an annualized fee, payable monthly of .25% and 1.00% of the Fund's average daily net assets of Class A and Class C, respectively. Class I and Y shares do not have Distribution Plan expenses. Under the terms of the agreement, $4,867 was payable at year end.

The Distributor received $8,720 as its portion of the commissions charged on sales of the Fund's Class A shares for the year ended September 30, 2009.

Calvert Shareholder Services, Inc. ("CSSI"), an affiliate of the Advisor, is the shareholder servicing agent for the Fund. For its services, CSSI received a fee of $10,129 for the year ended September 30, 2009. Under the terms of the agreement, $970 was payable at year end. Boston Financial Data Services, Inc. is the transfer and dividend disbursing agent.     

Each Director of the Fund who is not an employee of the Advisor or its affiliates receives an annual retainer of $44,000 plus a meeting fee of $2,000 for each Board meeting attended. Additional fees of up to $5,000 annually may be paid to the committee chairs and $2,500 annually may be paid to committee members, plus a committee meeting fee of $500 for each committee meeting attended. Directors fees are allocated to each of the Funds served.

 

Note C -- Investment Activity

During the year, the cost of purchases and proceeds from sales of investments, other than short-term securities, were $21,990,274 and $17,431,997, respectively.

The cost of investments owned at September 30, 2009 for federal income tax purposes was $23,826,263. Net unrealized appreciation aggregated $2,032,592, of which $3,008,141 related to appreciated securities and $975,549 related to depreciated securities.

Net realized capital loss carryforwards for federal income tax purposes of $1,330,630 at September 30, 2009 may be utilized to offset future capital gains until expiration in September 2017.

The Fund intends to elect to defer net capital losses of $5,467,413 incurred from November 1, 2008 though September 30, 2009 and treat them as arising in the fiscal year ending September 30, 2010.

The tax character of distributions paid during the years ended September 30, 2009 and September 30, 2008 were as follows:

Distributions paid from:

2009

2008

Ordinary income

$168,681

-

          Total

$168,681

$ -

As of September 30, 2009, the components of distributable earnings on a tax basis were
as follows:

Undistributed ordinary income

$73,526

Capital loss carryforward

(1,330,630)

Unrealized appreciation (depreciation)

2,032,592

          Total

$775,488

The differences between the components of distributable earnings on a tax basis and the amounts reflected in the statement of net assets are primarily due to temporary book-tax differences that will reverse in a subsequent period. These book-tax differences are mainly due to wash sales and the deferral of post October losses.

Reclassifications, as shown in the table below, have been made to the Fund's components of net assets to reflect income and gains available for distribution (or available capital loss carryovers, as applicable) under income tax law and regulations. These reclassifications are due to permanent book-tax differences and have no impact on net assets. The primary permanent differences causing such reclassification for the Fund are due to foreign currency transactions.

Undistributed Net Investment Income

($49,690)

Accumulated Net Realized Gain (Loss)

49,690

 

Note D -- Line of Credit

A financing agreement is in place with all Calvert Group Funds and State Street Corporation ("SSC"). Under the agreement, SSC provides an unsecured line of credit facility, in the aggregate amount of $50 million ($25 million committed and $25 million uncommitted), accessible by the Funds for temporary or emergency purposes only. Borrowings under the committed facility bear interest at the higher of the London Interbank Offered Rate, (LIBOR) or the overnight Federal Funds Rate plus 1.25% per annum. A commitment fee of .15% per annum is incurred on the unused portion of the committed facility, which is allocated to all participating funds. For the year ended September 30, 2009, borrowings by the Fund under the Agreement were as follows:

 

Average
Daily
Balance

Weighted
Average
Interest
Rate

Maximum
Amount
Borrowed

Month of
Maximum
Amount
Borrowed

 

$5,257

0.77%

$408,914

May 2009

 

Note E -- Subsequent Events

In preparing the financial statements as of September 30, 2009, no subsequent events or transactions occurred through November 23, 2009, the date the financial statements were issued, that would have materially impacted the financial statements as presented.

Notice to Shareholders (Unaudited)

The Fund designates $.20 per share as income derived from foreign sources and $.02 per share as foreign taxes paid for fiscal year ended September 30, 2009.

The Fund designates 100% of its ordinary dividends paid during this year as qualified dividend income subject to the maximum rate under Internal Revenue Code Section 1(h)(11).

Additional information will be provided to shareholders in January 2010 for use in preparing 2009 income tax returns.

 

Financial Highlights

 

 

 

Periods Ended

 

 

 

September 30,

September 30,

September 30,

Class A Shares

 

2009 (z)

2008 (z)

2007# (z)

Net asset value, beginning

 

$11.50

$15.32

$15.00

Income from investment operations

 

 

 

 

     Net investment income

 

.06

.17

.02

     Net realized and unrealized gain (loss)

 

(.10)

(3.99)

.30

          Total from investment operations

 

(.04)

(3.82)

.32

Distributions from

 

 

 

 

     Net investment income

 

(.06)

--

--

     Net realized gain

 

**

--

--

     Total from distributions

 

(.06)

--

--

Total increase (decrease) in net asset value

 

(.10)

(3.82)

.32

Net asset value, ending

 

$11.40

$11.50

$15.32

 

 

 

 

 

Total return*

 

(.16%)

(24.93%)

2.13%

Ratios to average net assets: A

 

 

 

 

     Net investment income

 

.63%

1.22%

.50% (a)

     Total expenses

 

2.70%

2.81%

7.82% (a)

     Expenses before offsets

 

1.67%

1.68%

1.74% (a)

     Net expenses

 

1.67%

1.66%

1.66% (a)

Portfolio turnover

 

98%

29%

2%

Net assets, ending (in thousands)

 

$21,328

$16,710

$5,678

 

 

 

 

 

 

 

 

 

 

 

 

 

Periods Ended

 

 

 

September 30,

September 30,

September 30,

Class C Shares

 

2009 (z)

2008 (z)

2007 ##(z)

Net asset value, beginning

 

$11.39

$15.30

$14.74

Income from investment operations

 

 

 

 

     Net investment income (loss)

 

(.02)

.09

.01

     Net realized and unrealized gain (loss)

 

(.08)

(4.00)

.55

          Total from investment operations

 

(.10)

(3.91)

.56

Distributions from

 

 

 

 

     Net realized gain

 

**

--

--

          Total from distributions

 

**

--

--

Total increase (decrease) in net asset value

 

(.10)

(3.91)

.56

Net asset value, ending

 

$11.29

$11.39

$15.30

 

 

 

 

 

Total return*

 

(0.82%)

(25.56%)

3.80%

Ratios to average net assets: A

 

 

 

 

     Net investment income (loss)

 

(.19%)

.67%

1.14% (a)

     Total expenses

 

5.38%

7.55%

66.65% (a)

     Expenses before offsets

 

2.51%

2.52%

2.58% (a)

     Net expenses

 

2.51%

2.50%

2.50% (a)

Portfolio turnover

 

98%

29%

1%

Net assets, ending (in thousands)

 

$823

$620

$140

See notes to financial highlights.

 

Financial Highlights

 

 

 

Periods Ended

 

 

 

September 30,

September 30,

September 30,

Class I Shares

 

2009 (z)

2008 (z)

2007 #(z)

Net asset value, beginning

 

$11.58

$15.35

$15.00

Income from investment operations

 

 

 

 

     Net investment income

 

.09

.25

.04

     Net realized and unrealized gain (loss)

 

(.14)

(4.02)

.31

          Total from investment operations

 

(.05)

(3.77)

.35

Distributions from

 

 

 

 

     Net investment income

 

(.21)

--

--

     Net realized gain

 

**

--

--

          Total from distributions

 

(.21)

--

--

Total increase (decrease) in net asset value

 

(.26)

(3.77)

.35

Net asset value, ending

 

$11.32

$11.58

$15.35

 

 

 

 

 

Total return*

 

.26%

(24.56%)

2.33%

Ratios to average net assets: A

 

 

 

 

     Net investment income

 

1.03%

1.72%

.78% (a)

     Total expenses

 

2.11%

2.26%

7.47% (a)

     Expenses before offsets

 

1.21%

1.22%

1.28% (a)

     Net expenses

 

1.21%

1.20%

1.20% (a)

Portfolio turnover

 

98%

29%

2%

Net assets, ending (in thousands)

 

$3,712

$3,533

$3,075

 

 

 

 

 

 

 

 

 

 

 

 

 

Period Ended

 

 

 

 

September 30,

 

Class Y Shares

 

 

2009###(z)

 

Net asset value, beginning

 

 

$8.67

 

Income from investment operations

 

 

 

 

     Net investment income

 

 

.13

 

     Net realized and unrealized gain (loss)

 

 

2.70

 

          Total from investment operations

 

 

2.83

 

Distributions from

 

 

 

 

     Net realized gain

 

 

**

 

          Total from distributions

 

 

**

 

Total increase (decrease) in net asset value

 

 

2.83

 

Net asset value, ending

 

 

$11.50

 

 

 

 

 

 

Total return*

 

 

32.71%

 

Ratios to average net assets: A

 

 

 

 

     Net investment income

 

 

1.56% (a)

 

     Total expenses

 

 

21.67% (a)

 

     Expenses before offsets

 

 

1.42% (a)

 

     Net expenses

 

 

1.41% (a)

 

Portfolio turnover

 

 

90%

 

Net assets, ending (in thousands)

 

 

$112

 

See notes to financial highlights.

 

A Total expenses do not reflect amounts reimbursed and/or waived by the Advisor or reductions from expense offset arrangements. Expenses before offsets reflect expenses after reimbursement and/or waiver by the Advisor but prior to reductions from expense offset arrangements. Net expenses are net of all reductions and represent the net expenses paid by the Fund.

# From May 31, 2007 inception.

## From July 31, 2007 inception.

### From October 31, 2008 inception.

* Total return is not annualized for periods less than one year and does not reflect deduction of any front-end or deferred sales charge.

** Less than $0.01 per share.

(a) Annualized.

(z) Per share figures are calculated using the Average Shares Method.

 

 

See notes to financial statements.

 

Explanation of Financial Tables

Schedule of Investments

The Schedule of Investments is a snapshot of all securities held in the fund at their market value, on the last day of the reporting period. Securities are listed by asset type (e.g., common stock, corporate bonds, U.S. government obligations) and may be further broken down into sub-groups and by industry classification.

Statement of Assets and Liabilities

The Statement of Assets and Liabilities is often referred to as the fund's balance sheet. It lists the value of what the fund owns, is due and owes on the last day of the reporting period. The fund's assets include the market value of securities owned, cash, receivables for securities sold and shareholder subscriptions, and receivables for dividends and interest payments that have been earned, but not yet received. The fund's liabilities include payables for securities purchased and shareholder redemptions, and expenses owed but not yet paid. The statement also reports the fund's net asset value (NAV) per share on the last day of the reporting period. The NAV is calculated by dividing the fund's net assets (assets minus liabilities) by the number of shares outstanding. This statement is accompanied by a Schedule of Investments. Alternatively, if certain conditions are met, a Statement of Net Assets may be presented in lieu of this statement and the Schedule of Investments.

Statement of Net Assets

The Statement of Net Assets provides a detailed list of the fund's holdings, including each security's market value on the last day of the reporting period. The Statement of Net Assets includes a Schedule of Investments. Other assets are added and other liabilities subtracted from the investments total to calculate the fund's net assets. Finally, net assets are divided by the outstanding shares of the fund to arrive at its share price, or Net Asset Value (NAV) per share.

At the end of the Statement of Net Assets is a table displaying the composition of the fund's net assets. Paid in Capital is the money invested by shareholders and represents the bulk of net assets. Undistributed Net Investment Income and Accumulated Net Realized Gains usually approximate the amounts the fund had available to distribute to shareholders as of the statement date. Accumulated Realized Losses will appear as negative balances. Unrealized Appreciation (Depreciation) is the difference between the market value of the fund's investments and their cost, and reflects the gains (losses) that would be realized if the fund were to sell all of its investments at their statement-date -values.

Statement of Operations

The Statement of Operations summarizes the fund's investment income earned and expenses incurred in operating the fund. Investment income includes dividends earned from stocks and interest earned from interest-bearing securities in the fund. Expenses incurred in operating the fund include the advisory fee paid to the investment advisor, administrative services fees, distribution plan expenses (if applicable), transfer agent fees, shareholder servicing expenses, custodial, legal, and audit fees, and the printing and postage expenses related to shareholder reports. Expense offsets (fees paid indirectly) are also shown. Credits earned from offset arrangements are used to reduce the fund's expenses. This statement also shows net gains (losses) realized on the sale of investments and the increase or decrease in the unrealized appreciation (depreciation) on investments held during the period.

Statement of Changes in Net Assets

The Statement of Changes in Net Assets shows how the fund's total net assets changed during the two most recent reporting periods. Changes in the fund's net assets are attributable to investment operations, distributions and capital share transactions.

The Operations section of the report summarizes information detailed in the Statement of Operations. The Distribution section shows the dividend and capital gain distributions made to shareholders. The amounts shown as distributions in this section may not match the net investment income and realized gains amounts shown in the Operations section because distributions are determined on a tax basis and certain investments or transactions may be treated differently for financial statement and tax purposes. The Capital Share Transactions section shows the amount shareholders invested in the fund, either by purchasing shares or by reinvesting distributions, and the amounts redeemed. The corresponding numbers of shares issued, reinvested and redeemed are shown at the end of the report.

Financial Highlights

The Financial Highlights table provides a per-share breakdown per class of the components that affect the fund's net asset value for current and past reporting periods. The table provides total return, total distributions, expense ratios, portfolio turnover and net assets for the applicable period. Total return is a measure of a fund's performance that encompasses all elements of return: dividends, capital gain distributions and changes in net asset value. Total return is the change in value of an investment over a given period, assuming reinvestment of any dividends and capital gain distributions, expressed as a percentage of the initial investment. Total distributions include distributions from net investment income and net realized gains. Long-term gains are earned on securities held in the fund more than one year. Short-term gains, on the sale of securities held less than one year, are treated as ordinary dividend income for tax purposes. The expense ratio is a fund's cost of doing business, expressed as a percentage of net assets. These expenses directly reduce returns to shareholders. Portfolio turnover measures the trading activity in a fund's investment portfolio -- how often securities are bought and sold by a fund. Portfolio turnover is affected by market conditions, changes in the size of the fund, the nature of the fund's investments and the investment style of the portfolio manager.

Proxy Voting

The Proxy Voting Guidelines of the Calvert Funds that the Fund uses to determine how to vote proxies relating to portfolio securities are provided as an Appendix to the Fund's Statement of Additional Information. The Statement of Additional Information can be obtained free of charge by calling the Fund at 1-800-368-2745, by visiting the Calvert website at www.calvert.com; or by visiting the SEC's website at www.sec.gov.

Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund's website at www.calvert.com and on the SEC's website at www.sec.gov.

Availability of Quarterly Portfolio Holdings

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund's Form N-Q is available on the SEC's website at www.sec.gov. The Fund's Form N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC;  information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Director and Officer Information Table

Name &
Age


Position
with
Fund


Position
Start
Date

Principal Occupation
During Last 5 Years

(Not Applicable to Officers)

# of Calvert
Portfolios
Overseen

Other
Directorships

INDEPENDENT TRUSTEES/DIRECTORS

REBECCA L. ADAMSON

AGE: 60

Trustee

 

Director

 

Director

 

Director

1989 CSIF

2000 IMPACT

2000 CSIS

2005 CWVF

President of the national non-profit, First People's Worldwide, formerly First Nations Financial Project. Founded by her in 1980, First People's Worldwide is the only American Indian alternative development institute in the country.

17
  • Mashantucket Pequot Endowment
  • Bay & Paul Foundation

RICHARD L. BAIRD, JR.

AGE: 61

Trustee & Chair

Director & Chair

Director & Chair

Director & Chair

1982

CSIF

2000

CSIS

2005

CWVF

2005

Impact

President and CEO of Adagio Health Inc. (formerly Family Health Council, Inc.) in Pittsburgh, PA, a non-profit corporation which provides family planning services, nutrition, maternal/child health care, and various health screening services and community preventive health programs.

29

 

JOHN G. GUFFEY, JR.

AGE: 61

Director

 

Trustee

 

Director

 

Director

 

 

1992

CWVF

1982

CSIF

2000

CSIS

2005

IMPACT

Treasurer and Director of Silby, Guffey and Co., Inc., a venture capital firm (inactive as of 2003) and President of Aurora Press Inc., a privately held publisher of trade paperbacks.

 

 

 

 

 

29
  • Ariel Funds (3)
  • Calvert Social Investment Foundation
  • Calvert Ventures, LLC

MILES DOUGLAS HARPER, III

AGE: 46

Director

 

Trustee

 

Director

 

Director

2000

Impact

2005

CSIF

2005

CSIS

2005

CWVF

Partner, Gainer Donnelly & Desroches (public accounting firm) since January 1999.

17
  • Bridgeway Funds (14)

JOY V. JONES

AGE: 59

Director

Trustee

 

Director

 

Director

2000

Impact

1990

CSIF

2000

CSIS

2005

CWVF

Attorney and entertainment manager in New York City.

 

 

 

17
  • Director, The Twenty-First Century Foundation

TERRENCE J. MOLLNER, Ed.D.

AGE: 64

Director

Trustee

 

Director

 

Director

1992

CWVF

1982

CSIF

2000

CSIS

2005

IMPACT

Founder, Chairperson, and President of Trusteeship Institute, Inc., a diverse foundation known principally for its consultation to corporations converting to cooperative employee-ownership and the development of socially and spiritually responsible investment vehicles. Chairperson, Stakeholders Capital, Inc., an asset management firm and financial services provider in Amherst, MA.

17
  • Calvert Social Investment Foundation
  • Ben & Jerry's Homemade, Inc.
  • ArtNOW, Inc.
  • Yourolivebranch.org

SYDNEY AMARA MORRIS

AGE: 60

Trustee

 

Director

 

Director

 

Director

1982

CSIF

2000

CSIS

2005

CWVF

2005

IMPACT

Rev. Morris currently serves as Parish Minister to the Keweenaw Unitarian Universalist Fellowship in Houghton, MI.

She previously served as Senior Minister of the Unitarian Church of Vancouver and as Minister of the Unitarian-Universalist Fellowship of Ames, IA. Rev. Morris is a graduate of Harvard Divinity School. She currently chairs the Umbrian Universalist Committee on Socially Responsible Investing.

17

 

INTERESTED TRUSTEES/DIRECTORS

BARBARA J. KRUMSIEK

AGE: 57

Director &

President

Trustee & Senior Vice

President

Director & Senior Vice

President

 

Director & President

1997

CWVF

 

1997

CSIF

 

2000

CSIS

 

2000

Impact

President, Chief Executive Officer and Chair of Calvert Group, Ltd.

 

 

 

 

 

 

54
  • Calvert Social Investment Foundation
  • Pepco Holdings, Inc.
  • Acacia Life Insurance Company (Chair)

D. WAYNE SILBY, Esq.

AGE: 61

Director

 

Trustee & President

 

Director

& President

Director

1992

CWVF

1982

CSIF

 

2000

CSIS

2000

Impact

Mr. Silby is the founding Chair of the Calvert Funds. He is the Chair-Elect and a principal of Syntao.com, a Beijing-based company promoting corporate social responsibility. He was an officer and director of Silby, Guffey and Co., Inc., a venture capital firm (inactive as of 2003).

29
  • UNIFI Mutual Holding Company
  • Calvert Social Investment Foundation
  • Grameen Foundation USA
  • Studio School Fund
  • Syntao.com China
  • The Ice Organization

OFFICERS

KAREN BECKER

Age: 56

Chief Compliance Officer

2005

Chief Compliance Officer for the Calvert Funds. In March 2009, Ms. Becker also became Head of the Securities Operations Department for Calvert Asset Management Company, Inc. Prior to 2005, Ms. Becker was Senior Vice President of Calvert Group, Ltd. and Head of Calvert Client Services.

SUSAN WALKER BENDER, Esq.

AGE: 50

Assistant Vice-President &

Assistant Secretary

1988

CSIF

2000

CSIS

1992

CWVF

2000

Impact

Assistant Vice President, Assistant Secretary and Associate General Counsel of Calvert Group, Ltd.

 

JENNIFER BERG

AGE: 36

Assistant Fund Controller

2009

Fund Administration Manager for Calvert Group Ltd.

THOMAS DAILEY

AGE: 45

Vice President

2004

CSIF

Vice President of Calvert Asset Management Company, Inc.

 

IVY WAFFORD DUKE, Esq.

AGE: 41

Assistant Vice-President &

Assistant Secretary

1996

CSIF

2000

CSIS

1996

CWVF

2000

Impact

Assistant Vice President, Assistant Secretary and Deputy General Counsel of Calvert Group, Ltd., and Chief Compliance Officer for Calvert Asset Management Company and Calvert Distributors, Inc.

TRACI L. GOLDT

AGE: 35

Assistant Secretary

2004

Executive Assistant to General Counsel, Calvert Group, Ltd.

GREGORY B. HABEEB

AGE: 59

Vice President

2004

CSIF

 

Senior Vice President of Calvert Asset Management Company, Inc.

 

HUI PING HO, CPA

AGE: 44

Assistant Treasurer

 

2000

Tax Compliance Manager of Calvert Group, Ltd. and Assistant Fund Treasurer.

LANCELOT A. KING, Esq.

AGE: 39

Assistant Vice President & Assistant Secretary

2002

Assistant Vice President, Assistant Secretary and Associate General Counsel of Calvert Group, Ltd.

EDITH LILLIE

AGE: 52

Assistant Secretary

 

2007

Assistant Secretary and Regulatory Matters Manager of Calvert Group, Ltd.

AUGUSTO DIVO MACEDO, Esq.

AGE: 46

Assistant Vice President & Assistant Secretary

2007

Assistant Vice President, Assistant Secretary, and Associate Counsel Compliance Calvert Group, Ltd. Prior to joining Calvert in 2005, Mr. Macedo served as 2nd Vice President at Acacia Life Insurance Company and The Advisors Group, Acacia's broker-dealer and federally registered investment adviser.

JANE B. MAXWELL Esq.

AGE: 57

Assistant Vice President & Assistant Secretary

 

2005

Assistant Vice President, Assistant Secretary & Assistant General Counsel of Calvert Group, Ltd. Prior to joining Calvert in 2004, Ms. Maxwell was an associate with Sullivan & Worcester LLP.

ANDREW K. NIEBLER, Esq.

AGE: 42

Assistant Vice President & Assistant Secretary

2006

Assistant Vice President, Assistant Secretary & Associate General Counsel of Calvert Group, Ltd.  Prior to joining Calvert in 2006, Mr. Niebler was an Associate with Cleary, Gottlieb, Steen & Hamilton LLP. 

CATHERINE P. ROY

AGE: 53

 

Vice President

2004

 

Senior Vice President of Calvert Asset Management Company, Inc. Prior to joining Calvert in 2004, Ms. Roy was Senior Vice President of US Fixed Income for Baring Asset Management, and SVP and Senior Portfolio Manager of Scudder Insurance Asset Management.

WILLIAM M. TARTIKOFF, Esq.

AGE: 62

Vice President and Secretary

1990

CSIF

2000

CSIS

1992

CWVF

2000

Impact

Senior Vice President, Secretary, and General Counsel of Calvert Group, Ltd.

 

NATALIE TRUNOW

AGE: 41

Vice President

2008

Senior Vice President of Calvert Asset Management Company, Inc., and Chief Investment Officer - Equities. Prior to joining Calvert in August 2008, Ms. Trunow was the Section Head (2005-2008) and Portfolio Manager (2001-2008) for the Global Public Markets Group of General Motors Asset Management.

RONALD M. WOLFSHEIMER, CPA

AGE: 57

Treasurer

1982

CSIF

2000

CSIS

1992

CWVF

2000

Impact

Senior Vice President and Chief Financial and Administrative Officer of Calvert Group, Ltd. and Fund Treasurer.

MICHAEL V. YUHAS JR., CPA

AGE: 48

Fund Controller

1999

CSIF

2000

CSIS

1999

CWVF

2000

Impact

Vice President of Fund Administration of Calvert Group, Ltd. and Fund Controller.

 

 

The address of Directors/Trustees and Officers is 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814, except Mr. Silby's address is 1715 18th Street, N.W., Washington, DC 20009. Ms. Krumsiek is an interested person of the Fund since she is an officer and director of the Fund's advisor and its affiliates and a director of its parent companies. Mr. Silby is an interested person of the Fund since he is a director of the parent company of the Fund's advisor.

Additional information about the Fund's Directors/Trustees can be found in the Statement of Additional Information (SAI). You can get a free copy of the SAI at www.calvert.com, or by contacting your broker, or the Fund at 1-800-368-2745.

Basis of Board's Approval for Investment Subadvisory Contract

At a meeting held on September 15, 2009, the Board of Directors, and by a separate vote, the disinterested Directors, voted to approve a new Investment Subadvisory Agreement (the "New Subadvisory Agreement") between the Advisor and the Subadvisor with respect to the Fund.

The Directors terminated the existing Investment Subadvisory Agreement (the "Prior Subadvisory Agreement") between the Advisor and the Subadvisor and approved the New Subadvisory Agreement in connection with the distribution of the shares of the Subadvisor's parent company held by a shareholder to the shareholders of that shareholder.

In evaluating the New Subadvisory Agreement, the Board reviewed information provided by the Advisor relating to the Subadvisor. The Board also considered information and materials that the Board had received and considered in connection with its approval of the renewal of the Prior Subadvisory Agreement in December 2008. That approval, on which the Board voted at its meeting held in person on December 2, 2008, followed a lengthy process during which the Board considered a variety of factors, including, for example, biographical information on the Subadvisor's portfolio management and other professional staff, performance information for the Subadvisor, and descriptions of the Subadvisor's investment philosophies, strategies and techniques, organizational and management structures and brokerage policies and practices. The Board also took into account similar information about the Subadvisor provided throughout the year by the Advisor.

The disinterested Directors were separately represented by independent legal counsel with respect to their consideration of the approval of the New Subadvisory Agreement. Prior to voting, the disinterested Directors reviewed the proposed approval of the New Subadvisory Agreement with management and also met in a private session with their counsel at which no representatives of management were present.

The Board approved the New Subadvisory Agreement between the Advisor and the Subadvisor based on a number of factors relating to the Subadvisor's ability to perform under the New Subadvisory Agreement. In particular, the Board took into account the Advisor's representation that the Subadvisor's portfolio management team, the investment strategies employed by that team in managing the Fund and the Subadvisor's day-to-day management of the Fund had not changed as a result of the transaction involving the Subadvisor's parent company. The Board also noted that the Subadvisor and its parent company would continue to benefit from revenues and cash flows from the management of certain assets. In addition, the Board took into account that the Subadvisor and its parent company expected to have access to certain new asset flows and new products. In the course of its deliberations, the Board also evaluated, among other factors: the nature, extent and the quality of the services to be provided by the Subadvisor; the Subadvisor's management style and long-term performance record; the Fund's performance record and the Subadvisor's performance in employing its investment strategies; the Subadvisor's current level of staffing and its overall resources; the qualifications and experience of the Subadvisor's personnel; the Subadvisor's financial condition with respect to its ability to perform the services required under the New Subadvisory Agreement; the Subadvisor's compliance systems, including those related to personal investing; and any disciplinary history. Based upon its review, the Board concluded that it was satisfied with the nature, extent and quality of services to be provided to the Fund by the Subadvisor under the New Subadvisory Agreement.

In considering the Fund's performance, the Board considered the Fund's outperformance since the Fund's inception on May 31, 2007 as compared to its active and passive benchmarks and noted that it reviewed on a quarterly basis detailed information about the Fund's performance results, portfolio composition and investment strategies. The Board noted the Advisor's expertise and resources in monitoring the performance, investment style and risk-adjusted performance of the Subadvisor. The Board also took into account the Advisor's observation that the period since the Fund's inception was a difficult one, characterized by turmoil in the financial market and extreme volatility in the equity markets. Based upon its review, the Board concluded that the Fund's performance was satisfactory.

In considering the cost of services to be provided by the Subadvisor and the profitability to the Subadvisor of its relationship with the Fund, the Board noted that the subadvisory fee under the New Subadvisory Agreement would be paid by the Advisor out of the advisory fee that the Advisor received under the Investment Advisory Agreement. The Board also noted that the subadvisory fee to be paid under the New Subadvisory Agreement was identical to the subadvisory fee currently paid under the Prior Subadvisory Agreement. The Board also relied on the ability of the Advisor to negotiate the New Subadvisory Agreement and the corresponding subadvisory fee at arm's length. Based upon its review, the Board determined that the subadvisory fee was reasonable. For each of the above reasons, the cost of services to be provided by the Subadvisor and the profitability to the Subadvisor of its relationship with the Fund were not material factors in the Board's deliberations. For similar reasons, the Board did not consider the potential economies of scale in the Subadvisor's management of the Fund to be a material factor in its consideration, although the Board noted that the subadvisory fee schedule for the Fund contained breakpoints that would reduce the subadvisory fee rate on assets above specified levels.

In approving the New Subadvisory Agreement, the Board, including the disinterested Directors, did not identify any single factor as controlling, and each Director attributed different weights to various factors.

Conclusions

The Board reached the following conclusions regarding the New Subadvisory Agreement, among others: (a) the Subadvisor is qualified to manage the Fund's assets in accordance with the Fund's investment objectives and policies; (b) the Subadvisor maintains an appropriate compliance program; (c) the Subadvisor is likely to execute its investment strategies consistently over time; (d) the performance of the Fund is satisfactory relative to the Fund's active and passive benchmarks; and (e) the Fund's subadvisory fee is reasonable relative to the services to be provided by the Subadvisor. Based on its conclusions, the Board determined that approval of the New Subadvisory Agreement would be in the best interests of the Fund and its shareholders.

 

To Open an Account
800-368-2748

Yields and Prices
Calvert Information Network
(24 hours, 7 days a week)
800-368-2745

Service for Existing Account
Shareholders: 800-368-2745
Brokers: 800-368-2746

TDD for Hearing Impaired
800-541-1524

Branch Office
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814

Registered, Certified
or Overnight Mail
Calvert Group
c/o BFDS,
330 West 9th Street
Kansas City, MO 64105

Web Site
www.calvert.com

Principal Underwriter
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814

 

Calvert International Opportunities Fund

 

This report is intended to provide fund information to shareholders. It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.

 

Note: The information on our website is not incorporated by reference into this report; our website address is included as an inactive textual reference only.

 

Calvert's Family of Funds

Tax-Exempt Money Market Funds
CTFR Money Market Portfolio

Taxable Money Market Funds
First Government Money Market Fund
CSIF Money Market Portfolio

Municipal Funds
Calvert Tax-Free Bond Fund

Taxable Bond Funds
CSIF Bond Portfolio
Income Fund
Short Duration Income Fund
Long-Term Income Fund
Ultra-Short Income Fund
Government Fund
Short-Term Government Fund
High Yield Bond Fund

Equity Funds
CSIF Enhanced Equity Portfolio
CSIF Equity Portfolio
Calvert Large Cap Growth Fund
Calvert Large Cap Value Fund
Calvert Social Index Fund
Capital Accumulation Fund
CWV International Equity Fund
New Vision Small Cap Fund
Small Cap Value Fund
Mid Cap Value Fund
Global Alternative Energy Fund
Global Water Fund
International Opportunities Fund

Balanced and Asset Allocation Funds
CSIF Balanced Portfolio
Calvert Conservative Allocation Fund
Calvert Moderate Allocation Fund
Calvert Aggressive Allocation Fund

 

<PAGE>

 

Item 2. Code of Ethics.

(a) The registrant has adopted a code of ethics (the "Code of Ethics") that applies to its principal executive officer and principal financial officer (also referred to as "principal accounting officer").

(b) No information need be disclosed under this paragraph.

(c) The registrant has not amended its Code of Ethics during the period covered by the shareholder report presented in Item 1 hereto.

(d) The registrant has not granted a waiver or implicit waiver from a provision of its Code of Ethics during the period covered by the shareholder report presented in Item 1 hereto.

(e) Not applicable.

(f) The registrant's Code of Ethics is attached as an Exhibit hereto.

 

Item 3. Audit Committee Financial Expert.

The registrant's Board of Directors has determined that Miles D. Harper, III., an "independent" Director serving on the registrant's audit committee, is an "audit committee financial expert," as defined in Item 3 of Form N-CSR. Under applicable securities laws, a person who is determined to be an audit committee financial expert will not be deemed an "expert" for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and Board of Directors in the absence of such designation or identification.

 

Item 4. Principal Accountant Fees and Services.

Services fees paid to auditing firm:

Fiscal Year ended 9/30/09

Fiscal Year ended 9/30/08

$

%*

$

% *

(a) Audit Fees

$50,600

$53,130

(b) Audit-Related     Fees

$0

0%

$0

0%

(c) Tax Fees (tax return preparation for the registrant)

$8,530

0%

$8,993

0%

(d) All Other Fees

$0

0%

$0

0%

Total

$59,130

0%

$62,123

0%

* Percentage of fees approved by the Audit Committee pursuant to (c)(7)(i)(C) of Rule 2-01 of Reg. S-X (statutory de minimis waiver of Committee's requirement to pre-approve)

(e) Audit Committee pre-approval policies and procedures:

The Audit Committee is required to pre-approve all audit and non-audit services provided to the registrant by the auditors, and to the registrant's investment advisor, and any entity controlling, controlled by, or under common control with the advisor that provides ongoing services to the registrant. In determining whether to pre-approve non-audit services, the Audit Committee considers whether the services are consistent with maintaining the independence of the auditors. The Committee may delegate its authority to pre-approve certain matters to one or more of its members. In this regard, the Committee has delegated authority to the Audit Committee Chair with respect to non-audit services not exceeding $25,000 in each instance. In addition, the Committee has pre-approved the retention of the auditors to provide tax-related services related to the tax treatment and tax accounting of newly acquired securities, upon request by the investment advisor in each instance.

(f) Not applicable.

(g) Aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment advisor, and any entity controlling, controlled by, or under common control with the advisor that provides ongoing services to the registrant for each of the last two fiscal years of the registrant:

Fiscal Year ended 9/30/09

Fiscal Year ended 9/30/08

$26,000

0%*

$3,500

0%*

* Percentage of fees approved by the Audit Committee pursuant to (c)(7)(i)(C) of Rule 2-01 of Reg. S-X (statutory de minimis waiver of Committee's requirement to pre-approve)

(h) The registrant's Audit Committee of the Board of Directors has considered whether the provision of non-audit services that were rendered to the registrant's investment advisor, and any entity controlling, controlled by, or under common control with the investment advisor that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c) (7)(ii) of Rule 2-01 of Reg. S-X is compatible with maintaining the principal accountant's independence and found that the provision of such services is compatible with maintaining the principal accountant's independence.

 

Item 5. Audit Committee of Listed Registrants.

Not applicable.

 

Item 6. Schedule of Investments.

  1. This Schedule is included as part of the report to shareholders filed under Item 1 of this Form.
  2. Not applicable.

 

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

 

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

 

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

 

Item 10. Submission of Matters to a Vote of Security Holders.

No material changes were made to the procedures by which shareholders may recommend nominees to the registrant's Board of Directors since registrant last provided disclosure in response to this Item.

Item 11. Controls and Procedures.

(a) The principal executive and financial officers concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the 1940 Act) are effective, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rules 13a-15(b) or 15d-15(b) under the Exchange Act, as of a date within 90 days of the filing date of this report.

(b) There was no change in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant's second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

 

Item 12. Exhibits.

(a)(1) A copy of the Registrant's Code of Ethics.

Attached hereto.

(a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2 under the Act (17 CFR 270.30a-2).

Attached hereto.

(a)(3) Not applicable.

(b) A certification for the registrant's Principal Executive Officer and Principal Financial Officer, as required by Rule 30a-2(b) under the Investment Company Act of 1940, is attached hereto. The certification furnished pursuant to this paragraph is not deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certification is not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the registrant specifically incorporates it by reference.

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

CALVERT WORLD VALUES FUND, INC.

By:

/s/ Barbara J. Krumsiek
Barbara J. Krumsiek
President -- Principal Executive Officer

Date:

November 30, 2009

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

/s/ Barbara J. Krumsiek
Barbara J. Krumsiek
President -- Principal Executive Officer
Date: November 30, 2009

 

/s/ Ronald M. Wolfsheimer
Ronald M. Wolfsheimer
Treasurer -- Principal Financial Officer
Date: November 30, 2009