N-CSR/A 1 tcf032304.htm AMENDMENT TO THE CALVERT FUND N-CSR FROM 9/30/03 FORM N-CSR/A

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: 811-03416

THE CALVERT FUND

(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, 2003

     

<PAGE>


Item 1.  Report to Stockholders.

Calvert

Investments that make a difference(registered trademark)

E-Delivery Sign-up -- details inside

September 30, 2003

Annual Report

Calvert Income Fund


Table of Contents

President's Letter

1

Portfolio Management Discussion

3

Independent Auditors' Report

5

Schedule of Investments

6

Notes to Schedule of Investments

12

Statement of Assets and Liabilities

13

Statement of Operations

14

Statements of Changes in Net Assets

15

Notes to Financial Statements

17

Financial Highlights

22

Explanation of Financial Tables

26

Trustee and Officer Information Table

28

Dear Shareholders:

The markets have improved dramatically over the past year, with stocks showing substantial gains and bonds continuing to profit from an historically low interest-rate environment.  

We believe that this year's broad-based market turnaround illustrates once again the value of diversification, asset allocation and long-term investing.  Many investors who pursued an appropriate asset allocation, with investments in stocks, bonds and cash, were able to benefit from the rally in securities prices.  Those who paid too much attention to short-term past performance and substantially reduced their stock holdings early in the year may well have missed the sharp rallies in the second quarter.  At Calvert, we encourage all our shareholders to review their portfolios with their financial advisors to ensure that their investments remain in line with their specific risk tolerance, return expectations and financial goals. 

A cloud on the otherwise bright performance of the markets and economy was the distressing news concerning recent market timing and illegal after-hours trading on the part of certain mutual funds. We want to assure Calvert shareholders that we have a long-standing policy of not accepting trades from market timers, which is strictly enforced. And, of course, we do not accept or execute trades after the market closes, which would be in violation of securities industry regulations.  

Markets like the ones that we have seen over the past several years demonstrate that understanding risk -- at the security, fund, and asset-class level -- is an integral part of successful investing.  This year, we have taken a number of steps to improve our ability to monitor and manage risk, and to prepare for further growth in our investor base. We have reorganized Calvert's investment activities into two departments, Equities and Fixed Income, each headed by Chief Investment Officers. We believe that these changes will enhance our ability to deliver top-tier investment performance to our shareholders, while keeping investment risk at appropriate levels. 

Thank you for your continued business, and we look forward to serving you in the year ahead.

Sincerely,

/s/Barbara J. Krumsiek

President and CEO

Calvert Asset Management Company, Inc.

November 2003


Portfolio Management Discussion

Greg Habeeb

and Matt Nottingham

of Calvert Asset Management Company

Performance

For the 12 months ended September 30, 2003, the Fund's Class A shares returned 14.51%, outperforming the Lehman Aggregate Bond Index by 910 basis points and the Lipper Corporate Debt Funds BBB Rated Average by 460 basis points.  

Outperformance was primarily due to favorable credit selection, underweights to Treasury and mortgage-backed securities, opportune duration management, and relative-value trading.

Investment Climate

Overall, the investment climate for stocks and for bonds, particularly non-Treasuries, was very favorable for investors. Even though few would describe the current state of the economy as robust, it appears that many investors believe that the worst times are behind us. The corporate bond market has continued a rally that started about a year ago, with corporate bond yields relative to Treasuries narrowing to levels not seen since 1997. This can be seen in the Lehman U.S. Credit Index, comprising corporate issues, exceeding the Lehman Aggregate Index.

Portfolio Strategy

Our strategy has been to sell corporate bonds into this rally and replace them primarily with higher-rated securities such as insured taxable municipal bonds, which often trade more cheaply than corporates in spite of similar ratings. The result is that we have upgraded the credit quality of the Fund to the highest level since 1997. The average credit rating of the Calvert Income Fund is AA- (at September 30, 2003).

We have also sought to lower our risk exposure by liquidating larger high-yield positions and replacing them with a more diversified selection of high-yield names.

Outlook

It's our belief that the prices of many non-Treasury bonds are fair to rich. Mortgages don't seem to offer enough yield compensation for what has been a very volatile period for interest rates.  Corporate bond yields are too low relative to Treasuries to offer enough protection from the inherent credit risk of owning these securities. In both cases, we believe that lighter weightings in the categories are appropriate. Fortunately, we have found enough taxable municipals at cheaper prices than both corporates and mortgages that we believe should result in outperformance of both classes, especially if the investment climate turns unfavorable. In general, we will continue to maintain a defensive posture until we see signs of significant improvement and growth in our economy.

November 2003

Portfolio Statistics

September 30, 2003

Investment Performance

(total return at NAV)

6 Months

12 Months

ended

ended

9/30/03

9/30/03

Class A

8.78%

14.51%

Class B

8.38%

13.67%

Class C

8.35%

13.72%

Class I

9.13%

15.31%

Lehman Aggregate Bond Index TR*

2.35%

5.41%

Lehman U.S. Credit Index*

4.65%

10.47%

Lipper Corporate Debt Funds BBB-Rated Avg.*

4.49%

9.91%

 

Maturity Schedule

 

Weighted Average

9/30/03

9/30/02

14 years

13 years

SEC Yields

30 days ended

9/30/03

9/30/02

Class A

3.93%

6.48%

Class B

3.35%

5.96%

Class C

3.41%

5.90%

Class I

4.71%

7.30%

                 

                 

Investment performance does not reflect the deduction of any front-end or deferred sales charge.

TR represents total return.

* Source: Lipper Analytical Services, Inc.


Portfolio Statistics

September 30, 2003

Average Annual Total Returns

(with max. load)

Class A Shares

One year

10.21%

Five year

8.38%

Ten year

7.33%

Since inception

9.62%

(10/12/82)

Class B Shares

One year

9.67%

Since inception

7.84%

(8/1/99)

Class C Shares

One year

12.72%

Since inception

8.90%

(8/1/00)

Class I Shares

One year

15.31%

Since inception

9.46%

(3/1/99)

Performance Comparison

Comparison of change in value of $10,000 investment. (Source: Lipper Analytical Services, Inc.)

[INSERT LINE GRAPH HERE]

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 3.75%. No sales charge has been applied to the index used for comparison. The value of an investment in Class A shares is plotted in the line graph. The value of an investment in another Class of shares would be different. The graph and table do not reflect the deduction of taxes that a shareholder would pay on the Fund's distributions or the redemption of Fund shares. Past performance is no guarantee of future results.


Independent Auditors' Report

To the Board of Trustees of The Calvert Fund and

Shareholders of Calvert Income Fund:

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Calvert Income Fund (the "Fund"), a series of The Calvert Fund, as of September 30, 2003, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the 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.  The financial highlights for the years ended September 30, 2001 and 2000, were audited by other auditors who have ceased operations.  Those auditors expressed an unqualified opinion on those financial statements in their report dated November 16, 2001.  The financial highlights for the periods presented prior to September 30, 2000, were audited by other auditors, whose report dated November 10, 1999, expressed an unqualified opinion on those statements.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America.  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, 2003, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received.  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 Calvert Income Fund as of September 30, 2003, the results of its operations for the year then ended, the changes in its net assets and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/KPMG LLP

Philadelphia, Pennsylvania

November 18, 2003


Schedule of Investments

September 30, 2003

Principal

Debt Securities - 90.0%

Amount

Value

Corporate Bonds - 72.2%

ACC Escrow Corp., 10.00%, 8/1/11(e)

$7,400,000

$7,936,500

ACLC Business Loan Receivables Trust, 7.585%, 1/15/21 (e)

3,999,753

4,035,754

Agfirst Farm Credit Bank, 8.393%, 12/15/16

14,450,000

16,845,218

Airgas, Inc., 7.14%, 3/8/04

6,775,000

6,845,392

American Airlines, Inc.:

1.76%, 9/23/07 (r)

17,781,906

17,780,128

3.857%, 7/9/10

6,000,000

5,965,800

AMVESCAP plc Senior Note, 6.60%, 5/15/05

1,000,000

1,073,250

ASIF Global Financing :

1.39%, 3/14/06 (e) (r)

59,200,000

59,200,000

1.28%, 5/30/06 (e) (r)

2,500,000

2,499,875

Atherton Franchisee Loan Funding LLP, 6.72%, 8/15/10 (e)

3,503,697

3,502,948

Atlantic Mutual Insurance Co, 8.15%, 2/15/28 (e)

50,141,000

31,999,986

Autopista del Maipo Sociedad, 7.373%, 6/15/22 (e)

6,420,000

7,378,378

Camp Pendleton and Quantico Military Housing,

5.937%, 10/1/43 (e)

14,800,000

15,114,500

Capital One Financial Corp, 7.25%, 12/1/03

500,000

502,390

Captec Franchise Trust, 6.504%, 5/25/05 (e)

3,399,849

3,415,035

Chase Funding Mortgage Loan:

4.045%, 5/25/33

4,800,000

4,885,680

5.416%, 5/25/33

20,000,000

20,459,200

CIA Brasileira de Bebida, 8.75%, 9/15/13 (e)

2,000,000

2,020,000

Cinergy Global Resources, Inc., 6.20%, 11/3/08 (e)

3,500,000

3,932,600

CIT Group, Inc., 2.61%, 1/31/05 (r)

8,050,000

8,205,687

CNL Funding, 7.721%, 8/25/09 (e)

14,614,017

15,940,820

Continental Airlines, Inc., 2.046%, 12/6/07 (r)

10,350,000

10,349,069

Countrywide Home Loan, Inc., 1.62%, 6/2/06 (r)

23,500,000

23,704,685

CVS Corp, 6.204%, 10/10/25 (e)

2,900,000

3,066,353

Daimler-Chrysler Auto Trust:

2.20%, 4/6/05

21,906,342

21,953,440

2.93%, 6/6/06

15,000,000

15,171,900

Daimler-Chrysler North American Holding Corp.,

1.94%, 9/26/05 (r)

26,300,000

26,273,174

Delphi Corp., 6.125%, 5/1/04

1,000,000

1,020,700

Delta Air Lines, Inc., 1.86%, 1/25/08 (e) (r)

10,091,229

10,147,941

Dobie Center Properties Ltd, 6.75%, 5/1/28 (e)

7,510,000

7,712,920

Dunn Nursing Home, Inc., VRDN, 1.15%, 2/1/24

4,000,000

4,000,000

EchoStar DBS Corp.:

5.75%, 10/1/08 (e)

5,000,000

5,000,000

6.375%, 10/1/11 (e)

12,500,000

12,437,500

Enclave at Lynn Haven LLC, VRDN, 1.12%, 10/1/29

1,870,000

1,870,000

Evangelical Lutheran Good Samaritan Fund, 6.78%, 11/1/05

2,000,000

2,182,672

FFCA Secured Lending Corp., 6.37%, 9/18/25 (e)

7,579,680

7,736,573

Finova Group, Inc., 7.50%, 11/15/09

132,373,000

65,524,635

First Republic Bank, 7.75%, 9/15/12

32,066,000

33,898,572

Florida Windstorm Underwriting Association, 7.125%, 2/25/19 (e)

1,800,000

2,079,108

Ford Credit Auto Owner Trust, 2.70%, 6/15/07

12,852,000

13,003,011

Ford Motor Co.:

7.45%, 7/16/31

$13,700,000

$12,596,602

7.40%, 11/1/46

350,000

307,444

9.98%, 2/15/47

22,750,000

25,787,580

7.70%, 5/15/97

2,045,000

1,806,144

Ford Motor Credit Co.:

5.75%, 2/23/04

24,825,000

25,146,980

7.50%, 6/15/04

2,245,000

2,318,771

7.00%, 10/1/13

10,000,000

10,068,400

Gap, Inc., 9.90%, 12/15/05

9,300,000

10,416,000

General Electric Capital Corp., 3.50%, 8/15/07

12,600,000

12,868,758

General Motors Acceptance Corp.:

1.83%, 1/20/04 (r)

3,300,000

3,296,139

6.85%, 6/17/04

4,000,000

4,129,920

4.15%, 2/7/05

2,850,000

2,910,078

3.03%, 5/19/05

20,000,000

19,982,800

Zero Coupon debentures, 12/1/12

10,400,000

5,491,200

8.00%, 11/1/31

20,163,000

20,531,378

General Motors Corp., 8.25%, 7/15/23

15,000,000

15,831,750

Great Lakes Power, Inc., 8.30%, 3/1/05

32,250,000

34,399,785

Greater Bay Bancorp., 5.25%, 3/31/08

7,000,000

7,118,650

Grove City Church of Nazarene VRDN, 1.20%, 2/1/24

5,000,000

5,000,000

Highwoods Realty LP, 6.75%, 12/1/03

4,540,000

4,564,607

Household Finance Corp., 2.64%, 12/16/04 (r)

44,500,000

44,900,055

IKON Receivable LLC, 1.36%, 12/15/07 (r)

6,650,000

6,663,284

ImCera Group, Inc., 6.00%, 10/15/03

2,800,000

2,801,400

Impac CMB Trust:

1.55%, 8/25/32 (r)

32,223,450

32,399,712

1.58%, 3/25/33 (r)

2,647,932

2,653,598

1.47%, 10/25/33 (r)

18,900,000

18,900,000

Interpool Capital Trust, 9.875%, 2/15/27

44,283,000

35,426,400

Interpool, Inc.:

7.20%, 8/1/07

7,565,000

7,300,225

7.35%, 8/1/07

21,925,000

21,376,875

John Deere Capital Corp., 1.34%, 7/11/05 (r)

2,000,000

1,997,840

Kaneville Road Joint Venture, Inc., VRDN, 1.20%, 11/1/32

4,175,000

4,175,000

LCOR Alexandria LLC, 6.625%, 9/15/19 (e)

50,500,000

56,525,155

Leucadia National Corp., 7.00%, 8/15/13 (e)

9,750,000

9,628,125

LG&E Capital Corp., 6.205%, 5/1/04 (e)

250,000

255,442

Liberty Mutual Insurance Co., 7.697%, 10/15/97 (e)

58,065,000

43,693,913

Lumbermens Mutual Casualty Co.:

9.15%, 7/1/26 (e)(m)

52,255,000

4,180,400

8.30%, 12/1/37 (e)(n)

33,720,000

2,697,600

8.45%, 12/1/97 (e)(o)

9,500,000

760,000

Mangrove Bay Pass Through Trust, 6.102%, 7/15/33 (e)

14,900,000

14,862,750

Markel Corp., 7.25%, 11/1/03

785,000

788,101

Merrill Lynch & Co., Inc., 1.34%, 9/18/06 (r)

2,900,000

2,895,621

MGM Mirage, Inc., 6.00%, 10/1/09

5,000,000

5,018,750

Michigan Consolidated Gas Co., 7.21%, 5/1/07

500,000

572,875

Montpelier Reinsurance Holdings Ltd, 6.125%, 8/15/13

9,400,000

9,644,870

Nationwide Health Properties, Inc., 6.59%, 7/7/38

1,890,000

1,925,437

New Valley Generation I, 7.299%, 3/15/19

81,423

96,311

New Valley Generation IV, 4.687%, 1/15/22

$7,400,000

$7,279,898

New Valley Generation V, 4.929%, 1/15/21

5,000,000

5,010,000

Nextel Communications, Inc., 7.375%, 8/1/15

27,650,000

27,857,375

Nortel Networks Corp., 4.25%, 9/1/08

21,025,000

19,080,398

Pedernales Electric Coop, Inc., 5.952%, 11/15/22 (e)

25,000,000

25,852,250

PF Export Receivables Master Trust:

3.748%, 6/1/13 (e)

13,900,000

13,606,571

6.436%, 6/1/15 (e)

2,582,545

2,562,970

Post Apartment Homes LP, 7.25%, 10/1/03

2,400,000

2,400,288

PP&L Capital Funding, Inc., 6.23%, 10/14/03

9,000,000

9,003,150

Preferred Term Securities IX Ltd.:

1.759%, 4/3/33 (e) (r)

1,000,000

1,011,060

4.08%, 4/3/33 (e) (r)

4,500,000

4,553,505

Prudential Holdings, LLC, 7.245%, 12/18/23 (e)

5,680,000

6,447,595

QBE Insurance Group Ltd, 5.647%, 7/1/23 (e)

21,400,000

20,481,491

Rayovac Corp., 8.50%, 10/1/13 (e)

250,000

257,500

Raytheon Co, 5.70%, 11/1/03

17,000,000

17,052,530

Rent-A-Car, Inc., 7.50%, 5/1/10

1,250,000

1,309,375

Residential Asset Security Corp.:

7.59%, 12/25/28

1,813,339

1,867,728

5.09%, 2/25/31

5,900,000

6,071,100

Roslyn Bancorp, Inc., 5.75%, 11/15/07

3,000,000

3,083,460

Sears, Roebuck Acceptance Corp.:

3.03%, 2/20/04 (r)

2,000,000

2,010,740

3.03%, 2/25/04 (r)

25,400,000

25,400,000

Shopping Center Associates, 6.75%, 1/15/04 (e)

8,900,000

9,030,883

SLM Corp., 1.06%, 7/25/35 (e) (r)

33,250,000

32,457,652

SLM Student Loan Trust, 1.36%, 12/15/17 (r)

10,000,000

10,000,000

Southern Indiana Investments Co. Two LLC, VRDN,

1.15%, 10/15/26 (r)

390,000

390,000

Southern Orthopaedic Properties, LLC, VRDN, 1.15%, 10/1/21 (r)

1,720,000

1,720,000

Sovereign Bank:

4.375%, 8/1/13 (r)

17,500,000

17,906,875

12.18%, 6/30/20 (e)

38,683,032

56,221,531

Sprint Capital Corp., 8.75%, 3/15/32

12,500,000

14,852,500

Standard-Pacific Corp., 6.50%, 10/1/08

5,000,000

5,006,250

State Street Capital Trust II, 1.63%, 2/15/08 (r)

2,000,000

2,000,760

Swepco Capital Trust I, 5.25%, 10/1/43 (r)

13,900,000

13,936,140

TIERS Trust:

Discount Note, 10/1/97

15,000,000

440,612

7.697%, 10/15/97 (e)

13,500,000

1,360,903

TIERS Trust V, 8.45%, 12/1/17 (p)

8,559,893

641,992

Toll Road Investment Partnership II Zero Coupon Bonds:

2/15/10 (e)

22,100,000

16,585,321

2/15/11 (e)

7,600,000

5,374,165

2/15/13 (e)

17,000,000

10,616,568

2/15/14 (e)

21,900,000

13,006,191

2/15/19 (e)

5,000,000

1,969,115

2/15/26 (e)

19,975,000

4,800,672

2/15/28 (e)

34,128,000

7,306,088

2/15/29 (e)

26,940,000

5,440,425

2/15/30 (e)

21,000,000

3,991,869

2/15/32 (e)

$26,940,000

$4,823,122

2/15/33 (e)

23,520,000

3,963,073

Toys R Us, Inc., 7.375%, 10/15/18

5,000,000

5,128,300

Tyco International Group SA, 6.375%, 10/15/11

18,740,000

19,185,075

Unisys Corp., 6.875%, 3/15/10

4,325,000

4,465,562

United Energy Ltd, 6.00%, 11/1/05 (e)

3,800,000

4,129,954

USL Capital Corp., 5.95%, 10/15/03

8,000,000

8,010,160

Valassis Communications, Inc., Zero Coupon, 6/6/21

950,000

550,468

Wenatchee Valley Clinic, VRDN, 1.15%, 11/23/24

6,950,000

6,950,000

Westinghouse Air Brake Co. 6.875%, 7/31/13 (e)

2,000,000

2,025,000

William Street Funding Corp.:

1.41%, 4/23/06 (e) (r)

67,750,000

67,834,112

1.63%, 4/23/09 (e) (r)

19,000,000

19,154,569

WMX Technologies, Inc., 6.375%, 12/1/03

1,400,000

1,410,416

World Financial Network Credit Card Master Note Trust,

1.48%, 5/15/12 (r)

1,400,000

1,399,999

Xerox Corp.:

5.50%, 11/15/03

2,050,000

2,050,000

5.25%, 12/15/03

3,000,000

3,000,000

7.15%, 8/1/04

650,000

663,000

Total Corporate Bonds (Cost $1,664,431,354)

1,655,382,425

Taxable Municipal Obligations - 13.8%

Alameda California Corridor Transportation Authority Revenue

Bonds, 6.50%, 10/1/19

2,500,000

2,851,325

Alameda County IDA Revenue VRDN, 1.10%, 7/1/30

500,000

500,000

Baltimore, Maryland Parking Facilities Revenue VRDN,

1.10%, 7/1/32

10,000,000

10,000,000

Columbus, Georgia Development Authority Revenue VRDN.,

1.17%, 12/1/19

5,900,000

5,900,000

Connecticut State Housing Finance Authority Revenue VRDN,

1.07%, 11/15/16

9,650,000

9,650,000

Cook County Illinois School District GO Zero Coupon Bonds:

12/1/13

1,195,000

717,478

12/1/14

1,410,000

788,655

Coos County, Oregon GO Bonds, 4.33%, 6/1/17

2,550,000

2,430,915

Denver, Colorado City & County Discount Notes, 12/15/16

21,495,000

10,397,132

Greater Valley California Medical Building LP, 6.86%, 3/1/21

2,900,000

2,959,247

Harrisburg Authority Pennsylvania Facility

Subordinate Revenue and Refunding, 5.50%, 9/1/25

9,005,000

8,884,423

Hoboken New Jersey Pension Refunding Zero Coupon Bonds:

4/1/28

1,200,000

237,588

4/1/29

1,280,000

237,222

4/1/30

1,355,000

235,065

4/1/31

1,435,000

233,015

4/1/32

1,520,000

231,025

4/1/33

1,610,000

229,055

Illinois State Pension Funding GO Bonds, 5.10%, 6/1/33

18,510,000

17,207,451

Indiana State Development Finance Authority Revenue VRDN,

1.21%, 9/1/16

18,005,000

18,005,000

Jefferson County Kentucky Health Facilities Revenue VRDN,

1.32%, 12/1/25

$2,300,000

$2,300,000

Matagorda County Texas Pollution Control Revenue VRDN,

1.32%, 11/1/29

1,600,000

1,600,000

Metropolitan Washington DC Airport Authority System

Revenue Bonds, 5.39%, 10/1/15

1,365,000

1,413,021

Milpitas California MFH Revenue VRDN, 1.13%, 8/15/33

2,065,000

2,065,000

Milwaukee Wisconsin Redevelopment Authority Revenue VRDN,

1.25%, 8/1/20

1,905,000

1,905,000

New Jersey Economic Development Authority Revenue

Discount Notes:

2/15/17

16,500,000

7,901,025

2/15/19

138,000,000

57,063,000

2/15/24

26,291,000

7,696,690

New York City GO Revenue VRDN, 1.05%, 11/1/23

11,000,000

11,000,000

New York City Transitional Finance Authority Revenue VRDN,

1.07%, 5/1/30

10,000,000

10,000,000

Niagara Falls New York Water & Sewage System Revenue Bonds.:

5.03%, 7/15/13

565,000

581,159

5.15%, 7/15/14

655,000

670,635

Ohio State Taxable Development Assistance Bonds:

4.79%, 10/1/14

685,000

682,102

4.89%, 10/1/15

3,025,000

3,011,419

5.32%, 10/1/18

4,525,000

4,535,046

Orange New Jersey Turnpike GO Bonds, 4.55%, 6/1/18

3,325,000

3,184,253

Oregon School Boards Association Zero Coupon Bonds:

6/30/15

5,000,000

2,696,750

6/30/16

12,080,000

6,067,059

6/30/17

18,000,000

8,345,520

6/30/18

6,000,000

2,581,680

6/30/19

7,400,000

2,961,406

6/30/20

4,500,000

1,673,100

6/30/21

5,400,000

1,871,478

6/30/22

7,870,000

2,539,177

6/30/23

6,500,000

1,966,835

Philadelphia Pennsylvania IDA Zero Coupon Bonds:

4/15/19

3,145,000

1,276,461

4/15/21

51,100,000

17,958,584

4/15/22

12,750,000

4,170,270

Philadelphia Pennsylvania IDA Revenue Bond, 6.488%, 6/15/04

19,132,244

19,733,379

Phoenix Arizona IDA Revenue Bonds, 6.85%, 12/1/25

19,900,000

22,527,198

Port St Lucie Florida Special Assessment Revenue Bonds.:

4.75%, 1/1/11

1,710,000

1,769,252

5.05%, 1/1/13

805,000

827,105

Southeast Alabama Gas District Lateral Project Revenue VRDN,

1.15%, 6/1/25

5,895,000

5,895,000

Texas State GO Revenue VRDN, 1.07%, 12/1/09

3,600,000

3,600,000

Total Taxable Municipal Obligations (Cost $306,088,081)

315,763,200

U.S. Government Agencies

Principal

and Instrumentalities - 1.1%

Amount

Value

Central American Bank For Economic Integration AID Bonds,

6.79%, 10/1/10

$5,661,071

$6,435,676

Federal National Mortgage Association:

2.375%, 7/21/05

1,300,000

1,304,186

4.00%, 11/17/06

5,800,000

5,818,502

Freddie Mac, 2.16%, 12/30/05

3,200,000

3,218,112

Ginnie Mae, 11.00%, 10/15/15

703

792

Kingdom of Jordan, Guaranteed by the United States Agency of

International Development, 8.75%, 9/1/19

1,765,059

2,257,810

Kingdom of Morocco, Guaranteed by the United States Agency of

International Development, 7.55%, 7/15/26

4,750,000

5,432,670

Total U.S. Government Agencies

and Instrumentalities (Cost $23,938,761)

24,467,747

U.S. Treasury - 2.9%

U.S. Treasury Bonds, 5.375%, 2/15/31

25,460,000

27,321,890

U.S. Treasury Notes.:

3.25%, 8/15/08

150,000

153,141

3.125%, 9/15/08

700,000

709,737

3.625%, 5/15/13

23,590,000

23,155,000

4.25%, 8/15/13

16,040,000

16,438,434

Total U.S. Treasury (Cost $66,603,735)

67,778,202

Equity Securities - 5.8%

Shares

Allstream, Inc.:

Class A *

13,100

508,018

Class B *

704,720

27,519,316

Conseco, Inc.:

Common *

3,923,133

70,851,781

Warrants *

 

4,955

25,273

Covad Communications Group, Inc. *

94,233

521,108

First Republic Capital Corp., (Preferred) (e)

2,150

2,171,500

Ford Motor Co. Capital Trust II (Preferred)

205,200

8,887,212

General Motors, Inc. (Preferred)

798,000

21,506,100

Total Equity Securities (Cost $145,477,224)

131,990,308

TOTAL INVESTMENTS (Cost $2,206,539,155) - 95.8%

 

2,195,381,882

Other assets and liabilities, net - 4.2%

 

97,200,944

Net Assets - 100%

$2,292,582,826

Underlying

Unrealized

# of

Expiration

Face Amount

Appreciation

Futures

Contracts

  Date

at Value

(Depreciation)

Sold:

2 Year U.S. Treasury Notes

1,133

12/03

$128,560,094

($2,870,320)

5 Year U.S. Treasury Notes

2,174

12/03

468,700,812

(6,059,988)

10 Year U.S. Treasury Notes

63

12/03

7,221,375

(74,627)

See notes to schedule of investments and notes to financial statements.


Notes to Schedule of Investments

*        Non-income producing security.

(e)      Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

(m)      The Illinois Insurance Department has prohibited Lumbermens from making interest payments due in June and        July 2003. Subsequent to September 30, 2003, the Illinois Insurance Department has prohibited Lumbermens from making interest payments due in December 2003 and January 2004. This security is no longer accruing interest and the Fund has written off $1,108,084 in accrued interest, and increased the cost basis of the security by interest purchased in the amount of $20,842, as of September 30, 2003.

(n)      The Illinois Insurance Department has prohibited Lumbermens from making interest payments due in June and July 2003. Subsequent to September 30, 2003, the Illinois Insurance Department has prohibited Lumbermens from making interest payments due in December 2003 and January 2004. This security is no longer accruing interest and the Fund has written off $867,534 in accrued interest, as of September 30, 2003.

(o)      The Illinois Insurance Department has prohibited Lumbermens from making interest payments due in June and July 2003. Subsequent to September 30, 2003, the Illinois Insurance Department has prohibited Lumbermens from making interest payments due in December 2003 and January 2004. This security is no longer accruing interest and the Fund has written off $187,778 in accrued interest, and increased the cost basis of the security by interest purchased in the amount of $68,656, as of September 30, 2003.

(p)      The Illinois Insurance Department has prohibited Lumbermens from making interest payments due in June and July 2003. This TIERS security is based on interest payments from Lumbermens. Subsequent to September 30, 2003, the Illinois Insurance Department has prohibited Lumbermens from making interest payments due in December 2003 and January 2004. This security is no longer accruing interest and the Fund has written off $174,391 in accrued interest, and increased the cost basis of the security by interest purchased in the amount of $56,667, as of September 30, 2003.

(r)       Adjustable rate security.

Abbreviations:                  

GO: General Obligation                                           

IDA: Industrial Development Authority          

LLC: Limited Liability Corporation

LLP: Limited Liability Partnership

LP: Limited Partnership

MFH: Multi-Family Housing

VRDN: Variable Rate Demand Note

See notes to financial statements.


STATEMENT OF ASSETS AND LIABILITIES

September 30, 2003

Assets

Value

Investments in securities, at value (Cost $2,206,539,155) -

see accompanying schedule

$2,195,381,882

Cash

73,140,809

Receivable for securities sold

143,693,490

Receivable for shares sold

7,655,859

Interest and dividends receivable

20,677,408

Collateral at broker for futures (cash)

2,858,000

Other assets

34,092

Total assets

2,443,441,540

Liabilities

Payable for securities purchased

143,011,601

Payable for shares redeemed

2,971,578

Payable to Calvert Asset Management Co., Inc.

1,114,114

Payable to Calvert Administrative Services Company

547,857

Payable to Calvert Shareholder Services, Inc.

34,378

Payable to Calvert Distributors, Inc.

796,177

Payable for futures variation margin

2,076,997

Accrued expenses and other liabilities

306,012

Total liabilities

150,858,714

Net Assets

$2,292,582,826

Net Assets Consist of:

Paid in capital applicable to the following shares of beneficial interest,

unlimited number of no par shares authorized:

Class A: 95,463,998 shares outstanding

$1,617,120,156

Class B: 21,079,655 shares outstanding

356,208,812

Class C: 11,110,171 shares outstanding

186,440,471

Class I: 3,129,116 shares outstanding

52,008,011

Undistributed net investment income

2,405,253

Accumulated net realized gain (loss) on investments

98,562,331

Net unrealized appreciation (depreciation) on investments

(20,162,208)

Net Assets

$2,292,582,826

Net Asset Value Per Share

Class A (based on net assets of $1,673,698,789)

$17.53

Class B (based on net assets of $369,355,448)

$17.52

Class C (based on net assets of $194,686,428)

$17.52

Class I (based on net assets of $54,842,161)

$17.53

See notes to financial statements.


Statement of Operations

Year Ended September 30, 2003

Net Investment Income

Investment Income:

Interest income

$124,474,867

Dividend income

608,825

Total investment income

125,083,692

Expenses:

Investment advisory fee

8,464,759

Administrative fees

6,285,469

Transfer agency fees and expenses

4,287,329

Distribution plan expenses:

Class A

3,880,514

Class B

3,479,942

Class C

1,804,631

Trustees' fees and expenses

139,521

Custodian fees

240,132

Registration fees

11,878

Reports to shareholders

343,908

Professional fees

111,106

Accounting fees

118,000

Miscellaneous

68,526

Total expenses

29,235,715

Fees paid indirectly

(125,751)

Net expenses

29,109,964

Net Investment Income

95,973,728

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on:

Investments

105,495,812

Futures

9,504,149

114,999,961

Change in unrealized appreciation (depreciation) on:

Investments

82,887,069

Futures

(8,905,222)

73,981,847

Net Realized and Unrealized Gain

(Loss) on Investments

188,981,808

Increase (Decrease) in Net Assets

Resulting From Operations

$284,955,536

See notes to financial statements.


Statements of Changes in Net Assets

Year Ended

Year Ended

September 30,

September 30,

Increase (Decrease) in Net Assets

2003

2002

Operations:

Net investment income

$95,973,728

$98,140,738

Net realized gain (loss)

114,999,961

4,986,842

Change in unrealized appreciation (depreciation)

73,981,847

(79,935,328)

Increase (Decrease) in Net Assets

Resulting From Operations

284,955,536

23,192,252

Distributions to shareholders from

Net investment income:

Class A Shares

(72,061,182)

(78,881,048)

Class B Shares

(13,536,764)

(13,454,080)

Class C Shares

(7,064,046)

(5,490,559)

Class I Shares

(2,243,021)

(1,700,953)

Net realized gain:

Class A Shares

(9,114,370)

(38,035,227)

Class B Shares

(2,022,381)

(6,508,971)

Class C Shares

(1,020,676)

(1,956,572)

Class I Shares

(207,917)

(541,159)

Total distributions

(107,270,357)

(146,568,569)

Capital share transactions:

Shares sold:

Class A Shares

592,462,132

990,380,897

Class B Shares

59,959,752

208,286,191

Class C Shares

65,935,869

139,053,505

Class I Shares

21,546,923

21,495,670

Reinvestment of distributions:

Class A Shares

60,945,982

90,786,721

Class B Shares

9,788,794

12,452,518

Class C Shares

3,869,578

4,189,224

Class I Shares

2,410,438

2,152,021

Shares redeemed:

Class A Shares

(599,191,480)

(439,952,888)

Class B Shares

(51,278,897)

(25,579,141)

Class C Shares

(49,445,938)

(15,313,483)

Class I Shares

(6,970,948)

(2,457,258)

Total capital share transactions

110,032,205

985,493,977

Total Increase (Decrease) in Net Assets

287,717,384

862,117,660

Net Assets

Beginning of year

2,004,865,442

1,142,747,782

End of year (including undistributed (distributions in excess of)

net investment income of  $2,405,253 and ($1,318,971),

respectively.)

$2,292,582,826

$2,004,865,442

        

See notes to financial statements.


Statements of Changes in Net Assets

Year Ended

Year Ended

September 30,

September 30,

Capital Share Activity

2003

2002

Shares sold:

Class A Shares

35,494,432

59,207,489

Class B Shares

3,623,140

12,447,736

Class C Shares

3,968,741

8,345,285

Class I Shares

1,301,456

1,291,218

Reinvestment of distributions:

Class A Shares

3,684,142

5,478,186

Class B Shares

592,765

752,659

Class C Shares

234,181

253,624

Class I Shares

144,858

130,308

Shares redeemed:

Class A Shares

(36,057,896)

(26,447,041)

Class B Shares

(3,072,978)

(1,539,446)

Class C Shares

(2,952,002)

(925,981)

Class I Shares

(410,955)

(147,243)

Total capital share activity

6,549,884

58,846,794

See notes to financial statements.


Notes to Financial Statements

Note A ---- Significant Accounting Policies

General:The Calvert Income Fund (the "Fund"), a series of The Calvert Fund, is registered under the Investment Company Act of 1940 as a non-diversified, open-end management investment company. The operations of each series are accounted for separately. The Fund offers four classes of shares of beneficial interest. Class A shares are sold with a maximum front-end sales charge of 3.75%. 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 sales charge and have a lower expense ratio 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), and at such other times as may be necessary or appropriate. Securities for which market quotations are available are valued at last sale price or official closing price on the primary market or exchange in which they trade. Unlisted securities and listed securities for which a market quotation is not available are valued at the most recent bid price or based on a yield equivalent obtained from the securities' market maker. Municipal securities are valued utilizing the average of bid prices or at bid prices based on a matrix system (which considers such factors as security prices, yields, maturities and ratings) furnished by dealers through an independent pricing service. Short-term notes are stated at amortized cost, which approximates fair value. Other securities for which market quotations are not available or deemed inappropriate are valued in good faith under the direction of the Board of Trustees.

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.

Options:The Fund may write or purchase option securities. The option premium is the basis for recognition of unrealized or realized gain or loss on the option. The cost of securities acquired or the proceeds from securities sold through the exercise of the option is adjusted by the amount of the premium. Risks from writing or purchasing option securities arise from possible illiquidity of the options market and the movement in the value of the investment or in interest rates. The risk associated with purchasing options is limited to the premium originally paid.


Futures Contracts: The Fund may enter into futures contracts agreeing to buy or sell a financial instrument for a set price at a future date.  Initial margin deposits of either cash or securities as required by the broker are made upon entering into the contract.  While the contract is open, daily variation margin payments are made to or received from the broker reflecting the daily change in market value of the contract and are recorded for financial reporting purposes as unrealized gains or losses by the Fund.  When a futures contract is closed, a realized gain or loss is recorded equal to the difference between the opening and closing value of the contract.  The risks associated with entering into futures contracts may include the possible illiquidity of the secondary market which would limit the Fund's ability to close out a futures contract prior to the settlement date, an imperfect correlation between the value of the contracts and the underlying financial instruments, or that the counterparty will fail to perform its obligations under the contracts' terms.

Short Sales:The Fund may use short sales of U.S. Treasury securities for the limited purpose of hedging the Fund's duration. Any short sales will be covered with an equivalent amount of high quality, liquid securities in a segregated account at the Fund's custodian.

Security Transactions and Net Investment Income:Security transactions are accounted for on trade date. Realized gains and losses are recorded on an identified cost basis. Dividend income is recorded on the ex-dividend date. Interest income, which includes amortization of premium and accretion of discount on debt securities, is accrued as earned. Investment income and realized and unrealized gains and losses are allocated to separate classes of shares based upon the relative net assets of each class. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured. 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 are paid monthly. 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.

Expense Offset Arrangements:The Fund has an arrangement with its custodian bank whereby the custodian's and transfer agent's fees may be paid indirectly by credits earned on the Fund's cash on deposit with the bank. Such a deposit arrangement is an alternative to overnight investments.

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

Note B -- Related Party Transactions

Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by Calvert Group, Ltd. ("Calvert"), which is indirectly wholly-owned by Ameritas Acacia Mutual Holding Company. The Advisor provides investment advisory services and pays the salaries and fees of officers and affiliated Trustees of the Fund. For its services, the Advisor receives a monthly fee based on the following annual rates of average daily net assets: .40% on the first $2 billion, and .375% over $2 billion.

Calvert Administrative Services Company, an affiliate of the Advisor, provides administrative services to the Fund for an annual fee, payable monthly. Classes A, B, and C shares pay an annual rate of .30% and Class I shares pay an annual rate of .10%, based on their average daily net assets.

Calvert Distributors, Inc., an affiliate of the Advisor, is the distributor and principal underwriter for the Fund. Distribution Plans, adopted by Class A, B and 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%, 1.00% and 1.00% annually of the Fund's average daily net assets of Class A, B and C, respectively. Class I does not have Distribution plan expenses.

The Distributor received $423,368 as its portion of commissions charged on sales of the Fund's Class A shares for the year ended September 30, 2003.

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 $400,296 for the year ended September 30, 2003. Boston Financial Data Services, Inc. is the transfer and dividend disbursing agent.

Each Trustee of the Fund who is not an employee of the Advisor or its affiliates receives an annual retainer of $25,000 plus up to $1,500 for each Board and Committee meeting attended. Trustee'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 and U.S. government securities, were $7,188,183,575 and $6,915,274,699, respectively.

The cost of investments owned at September 30, 2003 for federal income tax purposes was $2,221,370,000. Net unrealized depreciation aggregated $25,988,118, of which $72,295,700 related to appreciated securities and $98,283,818 related to depreciated securities.

The tax character of dividends and distributions paid during the years ended September 30, 2003, and September 30, 2002 were as follows:       

Distributions paid from:

2003

2002

Ordinary income

$107,270,357

$146,568,568

Total

$107,270,357

$146,568,568

As of September 30, 2003, the components of distributable earnings/(accumulated losses) on a tax basis were as follows:                              

Undistributed income

$87,378,626

Undistributed long-term capital gain

19,414,869

Unrealized appreciation (depreciation)

(25,988,118)

$80,805,377

Reclassifications 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. The primary differences causing such reclassifications are due to the tax treatment of accrued interest and market discount on defaulted securities.

The differences between the components of distributable earnings on a tax basis and the amounts reflected in the statement of assets and liabilities are primarily due to wash sales.

The Fund may sell or purchase securities to and from other funds managed by the Advisor, typically short-term variable rate demand notes. Interportfolio transactions are primarily used for cash management purposes. Interportfolio transactions are made pursuant to Rule 17a-7 of the Investment Company Act of 1940. For the year ended September 30, 2003, such purchase and sales transactions were $603,064,169 and $536,145,140, respectively.

Note D -- Line of Credit

A financing agreement is in place with all Calvert Group Funds (except for the Calvert Social Investment Fund's Balanced and Enhanced Equity Portfolios, the CVS Calvert Social Balanced Portfolio and the CVS Ameritas Index 500 Portfolio) and State Street Bank and Trust Company ("the Bank"). Under the agreement, the Bank is providing an unsecured line of credit facility, in the aggregate amount of $50 million ($25 million committed and $25 million uncommitted), to be accessed by the Funds for temporary or emergency purposes only. Borrowings under this facility bear interest at the overnight Federal Funds Rate plus .50% per annum. A commitment fee of .10% per annum will be incurred on the unused portion of the committed facility which will be allocated to all participating funds. The Fund had no loans outstanding pursuant to this line of credit at September 30, 2003. For the year ended September 30, 2003, borrowings by the Fund under the Agreement were as follows:              

                 

Weighted

Month of

Average

Average

Maximum

Maximum

Daily

Interest

Amount

Amount

Balance

Rate

Borrowed

Borrowed

$772,522

1.80%

$22,180,473

June 2003

        


Financial Highlights

Years Ended

September 30,

September 30,

Class A Shares

2003

2002

Net asset value, beginning

$16.14

$17.48

Income from investment operations

Net investment income

.79

1.03

Net realized and unrealized gain (loss)

1.48

(.71)

Total from investment operations

2.27

.32

Distributions from

Net investment income

(.78)

(1.04)

Net realized gain

(.10)

(.62)

Total distributions

(.88)

(1.66)

Total increase (decrease) in net asset value

1.39

(1.34)

Net asset value, ending

$17.53

$16.14

Total return*

14.51%

1.93%

Ratios to average net assets:

Net investment income

4.69%

6.21%

Total expenses

1.21%

1.12%

Expenses before offsets

1.21%

1.12%

Net expenses

1.21%

1.11%

Portfolio turnover

1,046%

1,540%

Net assets, ending (in thousands)

$1,673,699

$1,490,514

Years Ended

September 30,

September 30,

September 30,

Class A Shares

2001

2000

1999

Net asset value, beginning

$16.66

$17.08

$17.17

Income from investment operations

Net investment income

1.14

1.15

.99

Net realized and unrealized gain (loss)

.98

(.16)

.74

Total from investment operations

2.12

.99

1.73

Distributions from

Net investment income

(1.14)

(.99)

In excess of net realized gain

--

(1.16)

--

Net realized gain

(.16)

(.25)

(.83)

Total distributions

(1.30)

(1.41)

(1.82)

Total increase (decrease) in net asset value

.82

(.42)

(.09)

Net asset value, ending

$17.48

$16.66

$17.08

Total return*

13.31%

6.11%

10.68%

Ratios to average net assets:

Net investment income

6.66%

7.47%

6.01%

Total expenses

1.10%

1.20%

1.32%

Expenses before offsets

1.10%

1.20%

1.32%

Net expenses

1.08%

1.17%

1.23%

Portfolio turnover

2,645%

3,264%

3,454%

Net assets, ending (in thousands)

$945,671

$442,709

$91,764

        

Years Ended

September 30,

September 30,

September 30,

Class B Shares

2003

2002

2001

Net asset value, beginning

$16.13

$17.47

$16.66

Income from investment operations

Net investment income

.66

.89

1.00

Net realized and unrealized gain (loss)

1.48

(.71)

.98

Total from investment operations

2.14

.18

1.98

Distributions from

Net investment income

(.65)

(.90)

(1.01)

Net realized gain

(.10)

(.62)

(.16)

Total distributions

(.75)

(1.52)

(1.17)

Total increase (decrease) in net asset value

1.39

(1.34)

.81

Net asset value, ending

$17.52

$16.13

$17.47

Total return*

13.67%

1.14%

12.38%

Ratios to average net assets:

Net investment income

3.94%

5.42%

5.74%

Total expenses

1.94%

1.94%

1.93%

Expenses before offsets

1.94%

1.94%

1.93%

Net expenses

1.94%

1.93%

1.91%

Portfolio turnover

1,046%

1,540%

2,645%

Net assets, ending (in thousands)

$369,355

$321,562

$144,580

Periods Ended

September 30,

September 30,

Class B Shares

2000

1999 #

Net asset value, beginning

$17.06

$17.02

Income from investment operations

Net investment income

.97

.13

Net realized and unrealized gain (loss)

(.17)

.05

Total from investment operations

.80

.18

Distributions from

Net investment income

(.95)

(.14)

Net realized gain

(.25)

--

Total distributions

(1.20)

(.14)

Total increase (decrease) in net asset value

(.40)

.04

Net asset value, ending

$16.66

$17.06

Total return*

4.95%

1.06%

Ratios to average net assets:

Net investment income

6.75%

5.00% (a)

Total expenses

2.15%

3.74% (a)

Expenses before offsets

2.15%

2.98% (a)

Net expenses

2.12%

2.91% (a)

Portfolio turnover

3,264%

3,454%

Net assets, ending (in thousands)

$31,646

$1,231

Years Ended

September 30,

September 30,

Class C Shares

2003

2002

Net asset value, beginning

$16.13

$17.47

Income from investment operations

Net investment income

.67

.89

Net realized and unrealized gain (loss)

1.48

(.71)

Total from investment operations

2.15

.18

Distributions from

Net investment income

(.66)

(.90)

Net realized gain

(.10)

(.62)

Total distributions

(.76)

(1.52)

Total increase (decrease) in net asset value

1.39

(1.34)

Net asset value, ending

$17.52

$16.13

Total return*

13.72%

1.09%

Ratios to average net assets:

Net investment income

3.98%

5.40%

Total expenses

1.89%

1.97%

Expenses before offsets

1.89%

1.97%

Net expenses

1.88%

1.96%

Portfolio turnover

1,046%

1,540%

Net assets, ending (in thousands)

$194,686

$159,007

Periods Ended

September 30,

September 30,

Class C Shares

2001

2000##

Net asset value, beginning

$16.67

$16.59

Income from investment operations

Net investment income

.98

.15

Net realized and unrealized gain (loss)

.95

.11

Total from investment operations

1.93

.26

Distributions from

Net investment income

(.97)

(.18)

Net realized gain

(.16)

--

Total distributions

(1.13)

(.18)

Total increase (decrease) in net asset value

.80

.08

Net asset value, ending

$17.47

$16.67

Total return*

12.09%

1.58%

Ratios to average net assets:

Net investment income

5.32%

7.42% (a)

Total expenses

2.09%

2.16% (a)

Expenses before offsets

2.09%

2.16% (a)

Net expenses

2.06%

2.13% (a)

Portfolio turnover

2,645%

3,264%

Net assets, ending (in thousands)

$38,185

$1,179


Years Ended

September 30,

September 30,

September 30,

Class I Shares

2003

2002

2001

Net asset value, beginning

$16.13

$17.46

$16.63

Income from investment operations

Net investment income

.89

1.06

1.22

Net realized and unrealized gain (loss)

1.49

(.66)

.97

Total from investment operations

2.38

.40

2.19

Distributions from

Net investment income

(.88)

(1.11)

(1.20)

Net realized gain

(.10)

(.62)

(.16)

Total distributions

(.98)

(1.73)

(1.36)

Total increase (decrease) in net asset value

1.40

(1.33)

.83

Net asset value, ending

$17.53

$16.13

$17.46

Total return*

15.31%

2.46%

13.81%

Ratios to average net assets:

Net investment income

5.22%

6.70%

7.40%

Total expenses

.57%

.61%

.68%

Expenses before offsets

.57%

.61%

.68%

Net expenses

.56%

.60%

.66%

Portfolio turnover

1,046%

1,540%

2,645%

Net assets, ending (in thousands)

$54,842

$33,782

$14,311

Periods Ended

September 30,

September 30,

Class I Shares

2000

1999 ###

Net asset value, beginning

$17.06

$16.73

Income from investment operations

Net investment income

1.26

.63

Net realized and unrealized gain (loss)

(.21)

.34

Total from investment operations

1.05

.97

Distributions from

Net investment income

(1.23)

(.64)

Net realized gain

(.25)

--

Total distributions

(1.48)

(.64)

Total increase (decrease) in net asset value

(.43)

.33

Net asset value, ending

$16.63

$17.06

Total return*

6.48%

5.83%

Ratios to average net assets:

Net investment income

7.78%

6.37% (a)

Total expenses

.82%

1.07% (a)

Expenses before offsets

.75%

.81% (a)

Net expenses

.72%

.72% (a)

Portfolio turnover

3,264%

3,454%

Net assets, ending (in thousands)

$13,954

$6,442

(a)      Annualized

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

#        From August 1, 1999, inception.

## From August 1, 2000, inception.

### From March 1, 1999 inception.

See notes to financial statements.

Explanation of Financial Tables

Schedule of Investments

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

Statement of Assets and Liabilities

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

Statement of Net Assets

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

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


Statement of Operations

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

Statement of Changes in Net Assets

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

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

Financial Highlights

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


Trustee and officer Information Table

# of Calvert

Position

Position

Portfolios

Other

Name &

with

Start

Principal Occupation

Overseen

Directorships

Date of Birth

Fund

Date

During Last 5 Years

(Not   Applicable   to  Officers)

RICHARD L. BAIRD, JR.

DOB: 05/09/48

Trustee

 

1976

President and CEO of the 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.

18

FRANK H. BLATZ, JR., Esq.

DOB: 10/29/35

Trustee 

1982

Attorney in private practice in Fanwood, NJ.  From 1996 to 1999 he was a partner in the law firm of Snevily, Ely, Williams, Gurrieri & Blatz and prior to that a partner with Abrams, Blatz, Gran, Hendricks & Reina, P.A.

28

DOUGLAS E. FELDMAN, M.D.

DOB: 05/23/48

Trustee 

1982

Managing partner of Feldman Otolaryngology, Head and Neck Surgery in Washington, D.C. A graduate of Harvard Medical School, he is Associate Professor of Otolaryngology, Head and Neck Surgery at Georgetown University and George Washington University Medical School, and past Chairman of the Department of Otolaryngology, Head and Neck Surgery at the Washington Hospital Center. He is included in The Best Doctors in America.

12

PETER W. GAVIAN, CFA, ASA

DOB: 12/08/32

Trustee

1980

Since 1976, President of Corporate Finance of Washington, Inc., a business appraisal firm. He is a Chartered Financial Analyst and an Accredited senior appraiser (business evaluation).

12

JOHN GUFFEY, JR.

DOB: 05/15/48

Trustee 

1976

Treasurer and Director of Silby, Guffey and Co., Inc. a venture capital firm.

20

Ariel Funds

Calvert Foundation

Calvert Ventures, LLC

M. CHARITO KRUVANT

DOB: 12/08/45

Trustee

1996

President and CEO of Creative Associates International, Inc., a firm that specializes in human resources development, information management, public affairs and private enterprise development.

28

Acacia Federal Savings Bank

ARTHUR J. PUGH

DOB: 09/24/37

Trustee 

1982

Retired executive.

28

Acacia Federal Savings Bank

BARBARA J. KRUMSIEK

DOB: 08/09/52

(interested Trustee)

Trustee & President 

 

1997

President, Chief Executive Officer and Vice Chairman of Calvert Group, Ltd.  Prior to joining Calvert in 1997, Ms. Krumsiek had served as a Managing Director of Alliance Fund Distributors, Inc.

37

Calvert Foundation

DAVID R. ROCHAT

DOB: 10/07/37

(interested Trustee)

Trustee & Senior Vice

President 

1980

Executive Vice President of Calvert Asset Management Company, Inc. and Director and President of Chelsea Securities, Inc.

12

Government Scientific Source, Inc.

Chelsea Securities, Inc.

D. Wayne Silby, Esq.

DOB: 07/20/48

(interested Trustee)

Trustee

 

1976

Mr. Silby is Chairman of GroupServe Foundation, a software company focused on collaborative tools for non-profit groups. He is an officer and director of Silby, Guffey and Co., Inc., a private investment company.

21

Ameritas Acacia Mutual Life Insurance Company

Calvert Foundation

Grameen Foundation USA

SUSAN walker Bender, Esq.

DOB: 01/29/59

Officer 

   

1988

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

IVY WAFFORD DUKE, Esq.

DOB: 09/07/68

Officer 

   

1996

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

Daniel K. Hayes

DOB: 09/09/50

Officer 

   

1996

Senior Vice President of Calvert Asset Management Company, Inc.

HUI PING HO, CPA

DOB: 01/06/65

Officer 

   

2000

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

Gregory J. Keifer

DOB: 08/22/64

Officer

2003

Compliance Officer and Assistant Secretary of the Funds. Prior to working at Calvert Group, Mr. Keifer was Assistant Director of Compliance with Legg Mason Wood Walker, Incorporated and a senior compliance analyst with BISYS Fund Services.

LANCELOT A. KING, Esq.

DOB: 07/19/70

Officer

2002

Assistant Secretary and Assistant General Counsel of Calvert Group, Ltd. Prior to working at Calvert Group, Mr. King was an associate with Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, and also with Kirkpatrick & Lockhart.

William M. Tartikoff, Esq.

DOB: 08/12/47

Officer 

   

1990

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

Ronald M. Wolfsheimer, CPA

DOB: 07/24/52

Officer 

   

1979

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

MICHAEL V. YUHAS JR., CPA

DOB: 08/04/61

Officer 

   

1999

Director of Fund Administration of Calvert Group, Ltd. and Fund Controller.

The address of 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.  Mr. Silby is an interested person of the Fund since he is a director of the parent company of the Fund's advisor.  Mr. Rochat is an interested person of the Fund since he is an officer and director of the Fund's advisor.

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

SUPPLEMENT TO

CLASS I (INSTITUTIONAL) SHARES PROSPECTUS

Calvert Social Investment Fund Portfolios

Calvert Social Index Fund

Calvert Large Cap Growth Fund

Calvert Capital Accumulation Fund

Calvert World Values International Equity Fund

Calvert New Vision Small Cap Fund

Calvert Income Fund

Calvert Short Duration Income Fund

Prospectus dated: January 31, 2003

Date of Supplement: June 9, 2003

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. 

Please note this change in the prospectus.

SUPPLEMENT TO

PROSPECTUS

Calvert Social Investment Fund (CSIF) Balanced Portfolio

CSIF Equity Portfolio

CSIF Enhanced Equity Portfolio

CSIF Bond Portfolio

CSIF Money Market Portfolio

Calvert Social Index Fund

Calvert Large Cap Growth Fund

Calvert Capital Accumulation Fund

Calvert World Values International Equity Fund

Calvert New Vision Small Cap Fund

Date of Prospectus: January 31, 2003 as revised June 30, 2003

Class I (Institutional) Shares

(All Portfolios)

Date of Prospectus: January 31, 2003

Calvert Income Fund

Calvert Short Duration Income Fund

Date of Prospectus: January 31, 2003 as revised September 15, 2003

CALVERT VARIABLE SERIES, INC.

PROSPECTUS

Calvert Social Balanced Portfolio

Calvert Income Portfolio

Date of Prospectus: April 30, 2003

Date of This Supplement: October 30, 2003

Please replace the second paragraph under "About Calvert" with the following: (for Calvert Variable Series Social Balanced and Income Portfolios replace the third paragraph under "The Fund and Its Management" with the following:)

Steven Falci serves as Calvert's Chief Investment Officer, Equities and oversees the investment strategy and management of all Calvert equity and balanced portfolios.  Calvert uses a team approach to its management of the fixed-income portfolios.  Gregory Habeeb heads this team for Calvert's taxable fixed-income portfolios. Mr. Habeeb has over 20 years of experience as an analyst, trader, and portfolio manager.  Matt Nottingham is also a member of the fixed-income management team. Mr. Nottingham has 7 1/2 years of experience as an analyst, trader, and portfolio manager.

Calvert Income Fund

To Open an Account

800-368-2748

Yields and Prices

Calvert Information Network

(24 hours, 7 days a week)

800-368-2745

Service for Existing Account

Shareholders: 800-368-2745

Brokers: 800-368-2746

TDD for Hearing Impaired

800-541-1524

Branch Office

4550 Montgomery Avenue

Suite 1000 North

Bethesda, Maryland 20814

Registered, Certified

or Overnight Mail

Calvert Group

c/o BFDS

330 West 9th Street

Kansas City, MO 64105

Web Site

http://www.calvert.com

Principal Underwriter

Calvert Distributors, Inc.

4550 Montgomery Avenue

Suite 1000 North

Bethesda, Maryland 20814

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

Calvert's Family of Funds

Tax-Exempt Money Market Funds

CTFR Money Market Portfolio

CTFR California Money Market Portfolio

Taxable Money Market Funds

First Government Money Market Fund

CSIF Money Market Portfolio

Balanced Fund

CSIF Balanced Portfolio

Municipal Funds

CTFR Limited-Term Portfolio

CTFR Long-Term Portfolio

CTFR Vermont Municipal Portfolio

National Muni. Intermediate Portfolio

California Muni. Intermediate Portfolio

Taxable Bond Funds

CSIF Bond Portfolio

Income Fund

Short Duration Income Fund

Equity Funds

CSIF Enhanced Equity Portfolio

CSIF Equity Portfolio

Calvert Large Cap Growth Fund

Capital Accumulation Fund

CWV International Equity Fund

New Vision Small Cap Fund

Calvert Social Index Fund

         printed on recycled paper

         using soy-based inks

<PAGE>

Calvert

Investments that make a difference(registered trademark)

E-Delivery Sign-up -- details inside

September 30, 2003

Annual Report

Calvert Short Duration

Income Fund


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Table of Contents

President's Letter

1

Portfolio Management Discussion

3

Independent Auditors' Report

5

Schedule of Investments

6

Statement of Assets and Liabilities

10

Statement of Operations

11

Statements of Changes in Net Assets

12

Notes to Financial Statements

14

Financial Highlights

19

Explanation of Financial Tables

21

Trustee and Officer Information Table

24

Dear Shareholders:

The markets have improved dramatically over the past year, with stocks showing substantial gains and bonds continuing to profit from an historically low interest-rate environment.  

We believe that this year's broad-based market turnaround illustrates once again the value of diversification, asset allocation and long-term investing.  Many investors who pursued an appropriate asset allocation, with investments in stocks, bonds and cash, were able to benefit from the rally in securities prices.  Those who paid too much attention to short-term past performance and substantially reduced their stock holdings early in the year may well have missed the sharp rallies in the second quarter.  At Calvert, we encourage all our shareholders to review their portfolios with their financial advisors to ensure that their investments remain in line with their specific risk tolerance, return expectations and financial goals. 

A cloud on the otherwise bright performance of the markets and economy was the distressing news concerning recent market timing and illegal after-hours trading on the part of certain mutual funds. We want to assure Calvert shareholders that we have a long-standing policy of not accepting trades from market timers, which is strictly enforced. And, of course, we do not accept or execute trades after the market closes, which would be in violation of securities industry regulations.  

Markets like the ones that we have seen over the past several years demonstrate that understanding risk -- at the security, fund, and asset-class level -- is an integral part of successful investing.  This year, we have taken a number of steps to improve our ability to monitor and manage risk, and to prepare for further growth in our investor base.  We have reorganized Calvert's investment activities into two departments, Equities and Fixed Income, each headed by Chief Investment Officers. We believe that these changes will enhance our ability to deliver top-tier investment performance to our shareholders, while keeping investment risk at appropriate levels. 

Thank you for your continued business, and we look forward to serving you in the year ahead.

Sincerely,

/s/Barbara J. Krumsiek

President and CEO

Calvert Asset Management Company, Inc.

November 2003


Portfolio Management Discussion

Greg Habeeb

and Matt Nottingham

of Calvert Asset Management Company

Performance

For the 12 months ended September 30, 2003, the Fund's Class A shares returned 9.04%, outperforming the Lehman 1-5 Year Credit Index by 159 basis points and the Lipper Short Investment Grade Debt Funds Average by 565 basis points.  

Outperformance was primarily due to favorable credit selection, underweights to Treasury and mortgage-backed securities, opportune duration management, and relative-value trading.

 

Investment Climate

Overall, the investment climate for stocks and for bonds, particularly non-Treasuries, was very favorable for investors. Even though few would describe the current state of the economy as robust, it appears that many investors believe that the worst times are behind us. The corporate bond market has continued a rally that started about a year ago, with corporate bond yields relative to Treasuries narrowing to levels not seen since 1997.

Portfolio Strategy

Our strategy has been to sell corporate bonds into this rally and replace them primarily with higher-rated securities such as insured taxable municipal bonds, which often trade more cheaply than corporates in spite of similar ratings. The result is that we have upgraded the credit quality of the Fund to the highest level since its inception.  The average credit rating of the Calvert Short Duration Income Fund is AA- (at September 30, 2003).

Outlook

It's our belief that the prices of many non-Treasury bonds are fair to rich. Mortgages don't seem to offer enough yield compensation for what has been a very volatile period for interest rates.  Corporate bond yields are too low relative to Treasuries to offer enough protection from the inherent credit risk of owning these securities. In both cases, we believe that lighter weightings in the categories are appropriate. Fortunately, we have found enough taxable municipals at cheaper prices than both corporates and mortgages that should result in outperformance of both classes, especially if the investment climate turns unfavorable. In general, we will continue to maintain a defensive posture until we see signs of significant improvement and growth in our economy.

November, 2003

Portfolio Statistics

September 30, 2003

Investment Performance

(total return at NAV)

6 Months

12 Months

ended

ended

9/30/03

9/30/03

Class A

4.62%

9.04%

Class C

4.03%

7.81%

Class I

4.82%

9.53%

Lehman 1-5 Year Credit Index*

3.21%

7.45%

Lipper Short Investment Grade Debt Funds Avg**

1.40%

3.39%

Maturity Schedule

Weighted Average

9/30/03

9/30/02

5 years

3 years

SEC Yields

30 days ended

9/30/03

9/30/02

Class A

2.53%

4.07%

Class C

1.53%

N/A

Class I

3.04%

4.40%

                 

Investment performance does not reflect the deduction of any front-end or deferred sales charge.

* Source: Lehman Brothers, Inc.

** Source: Lipper Analytical Services, Inc.


Portfolio Statistics

September 30, 2003

Average Annual Total Returns

(with max. load)

Class A Shares

One year

6.11%

Since inception

9.27%

(1/31/02)

Class C Shares

One year

6.81%

Since inception

7.81%

(10/1/02)

Class I Shares

One year

9.53%

Since inception

10.17%

(2/27/02)

Performance Comparison

Comparison of change in value of $10,000 investment. (Source: Lipper Analytical Services, Inc.)

[INSERT SHORT DURATION LINE GRAPH HERE]

Average annual total returns in the Portfolio Statistics above and the Performance Comparison line graph are with maximum load deducted -- assume reinvestment of dividends and reflect the deduction of the Fund's Class A maximum front-end sales charge of 2.75%. No sales charge has been applied to the index used for comparison. The value of an investment in Class A shares is plotted in the line graph. The value of an investment in another Class of shares would be different. The graph and table do not reflect the deduction of taxes that a shareholder would pay on the Fund's distributions or the redemption of Fund shares. Past performance is no guarantee of future results.


Independent Auditors' Report

To the Board of Trustees of The Calvert Fund and Shareholders of Calvert Short Duration Income Fund:

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Calvert Short Duration Income Fund (the "Fund"), a series  of The Calvert Fund, as of September 30, 2003, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for the year ended September 30, 2003 and the period from January 31, 2002 (inception) through September 30, 2002. 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 auditing standards generally accepted in the United States of America.  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, 2003, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received.  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 Calvert Short Duration Income Fund as of September 30, 2003, the results of its operations for the year then ended, the changes in its net assets and the financial highlights for the year ended September 30, 2003 and the period from January 31, 2002  (inception) through September 30, 2002, in conformity with accounting principles generally accepted in the United States of America.

KPMG LLP

Philadelphia, Pennsylvania

November 18, 2003


Schedule of Investments

September 30, 2003

Principal

Debt Securities - 100.8%

Amount

Value

Corporate Bonds - 87.2%

ACC Escrow Corp., 10.00%, 8/1/11 (e)

  $500,000

  $536,250

ACLC Business Loan Receivables Trust, 7.585%, 1/15/21 (e)

 

999,938

  1,008,938

Airgas, Inc., 7.14%, 3/8/04

  1,500,000

  1,515,585

American Airlines, Inc.:

1.76%, 9/23/07 (r)

  948,368

  948,274

3.857%, 7/9/10

  1,000,000

  994,300

American Express Credit Corp., 1.26%, 9/19/06 (r)

 

1,000,000

  1,000,000

ASIF Global Financing XXI, 1.39%, 3/14/08 (e)(r)

  2,000,000

  2,000,000

Atherton Franchisee Loan Funding LLP, 6.72%, 8/15/10 (e)

 

1,387,603

  1,387,306

Atlantic Mutual Insurance Co., 8.15%, 2/15/28 (e)

  350,000

  223,370

Autopista Del Maipo Sociedad, 7.373%, 6/15/22 (e)

  255,000

  293,066

Berkshire Hathaway, Inc., 3.375%, 10/15/08 (e)

  1,000,000

  1,005,750

Boeing Capital Corp., 6.68%, 12/1/03

  1,010,000

  1,017,727

Brascan Corp., 7.125%, 12/16/03

  1,190,000

  1,197,866

Camden Properties Trust, 7.00%, 4/15/04

  465,000

  476,964

Capital One Financial Corp., 7.25%, 12/1/03

  500,000

  502,390

Captec Franchise Trust, 6.504%, 5/25/05 (e)

  144,061

  144,705

Central Garden & Pet Co., 9.125%, 2/1/13

  250,000

  271,250

Chase Funding, Inc., 4.045%, 5/25/36

  2,500,000

  2,544,625

Cinergy Global Resources, Inc., 6.20%, 11/3/08 (e)

  1,500,000

  1,685,400

CIT Group, Inc.:

1.54%, 7/29/05 (r)

  1,500,000

  1,499,940

2.61%, 1/31/05 (r)

  1,250,000

  1,274,175

CNL Funding, 7.721%, 8/25/09 (e)

  527,310

  575,184

Continental Airlines, Inc.,  2.046%, 12/6/07 (r)

  1,000,000

  999,910

Countrywide Home Loan, Inc., 1.62%, 6/2/06 (r)

  1,500,000

  1,513,065

Credit Suisse First Boston USA, Inc., 1.42%, 6/19/06 (r)

  500,000

  499,710

Daimler-Benz North America Holding Corp., 1.94%, 9/26/05 (r)

 

3,500,000

  3,496,430

Delphi Corp., 6.125%, 5/1/04

  250,000

  255,175

Delta Air Lines, Inc., 1.86%, 1/25/08 (e)(r)

  1,462,497

  1,470,716

EchoStar DBS Corp., 5.75%, 10/1/08 (e)

  800,000

  800,000

EOP Operating LP:

6.50%, 1/15/04

  1,000,000

  1,011,740

6.50%, 6/15/04

  500,000

  513,945

FFCA Secured Lending Corp., 6.37%, 9/18/25 (e)

  799,814

  816,370

Finova Group, Inc., 7.50%, 11/15/09

  2,100,000

  1,039,500

First Republic Bank, 7.75%, 9/15/12

  1,528,000

  1,615,325

Florida Residential Property & Casualty, 7.45%, 7/1/04 (e)

 

100,000

  104,353

Florida Windstorm Underwriting Association, 6.70%, 8/25/04 (e)

 

135,000

  141,174

Ford Credit Auto Owner Trust, 2.70%, 6/15/07

  1,000,000

  1,011,750

Ford Motor Credit Co.:

6.00%, 10/27/03

  500,000

  501,320

5.75%, 2/23/04

  1,705,000

  1,727,114

6.125%, 3/20/04

  740,000

  752,003

7.50%, 6/15/04

  750,000

  774,645

Gap, Inc., 9.90%, 12/15/05

  600,000

  672,000

General Motors Acceptance Corp.:

6.75%, 10/6/03

  $500,000

  $500,205

1.83%, 1/20/04 (r)

  1,500,000

  1,498,245

6.38%, 1/30/04

  100,000

  101,438

6.85%, 6/17/04

  1,000,000

  1,032,480

4.15%, 2/7/05

  1,000,000

  1,021,080

Great Lakes Power, Inc.:

9.00%, 8/1/04

  1,000,000

  1,045,630

8.30%, 3/1/05

  3,000,000

  3,199,980

Greater Bay Bancorp., 5.25%, 3/31/08

  1,800,000

  1,830,510

Hertz Corp., 8.25%, 6/1/05

  1,000,000

  1,068,000

Highwoods Realty LP, 6.75%, 12/1/03

 

1,000,000

  1,005,420

Household Finance Corp.:

2.619%, 12/16/04 (r)

  500,000

  504,495

6.875%, 3/1/07

  1,000,000

  1,106,840

7.90%, 11/15/07

  1,500,000

  1,727,160

IKON Receivables LLC, 1.36%, 12/15/07 (r)

  500,000

  500,999

ImCera Group, Inc., 6.00%, 10/15/03

  1,000,000

  1,000,500

Impac CMB Trust:

1.55%, 8/25/32 (r)

  1,178,650

  1,185,097

VRDN, 1.47%, 12/25/33

  1,000,000

  1,000,000

Interpool, Inc.:

7.20%, 8/1/07

  170,000

  164,050

7.35%, 8/1/07

  320,000

  312,000

John Deere Capital Corp., 1.34%, 7/11/05 (r)

  1,000,000

  998,920

Kaneville Road Joint Venture, Inc. VRDN, 1.20%, 11/1/32

 

2,370,000

  2,370,000

Kimco Realty Corp., 6.50%, 10/1/03

  925,000

  925,130

Leucadia National Corp., 7.00%, 8/15/13 (e)

  200,000

  197,500

LG&E Capital Corp., 6.205%, 5/1/04 (e)

  250,000

  255,442

Lumbermens Mutual Casualty Co.:

9.15%, 7/1/26 (e)(m)

  250,000

  20,000

8.30%, 12/1/37 (e)(o)

  300,000

  24,000

Markel Corp., 7.25%, 11/1/03

  1,200,000

  1,204,740

MCN Investment Corp., 7.12%, 1/16/04

  1,250,000

  1,263,275

Merrill Lynch & Co., Inc., 1.34%, 9/18/06 (r)

  1,000,000

  998,490

Michigan Consolidated Gas Co., 7.21%, 5/1/07

  500,000

  572,875

Montpelier Reinsurance Holdings Ltd, 6.125%, 8/15/13

 

500,000

  513,025

Nationwide Health Properties, Inc., 6.59%, 7/7/38

  1,000,000

  1,018,750

New Valley Generation I, 7.299%, 3/15/19

  912,614

  1,079,476

New Valley Generation IV, 4.687%, 1/15/22

  1,000,000

  983,770

Nextel Communications, Inc., 7.375%, 8/1/15

  1,000,000

  1,007,500

Nextel Partners, Inc., 8.125%, 7/1/11 (e)

  100,000

  97,250

Nortel Networks Corp., 4.25%, 9/1/08

  400,000

  363,004

PF Export Receivables Master Trust:

3.748%, 6/1/13 (e)

  1,000,000

  978,890

6.436%, 6/1/15 (e)

  292,364

  290,148

Post Apartment Homes LP, 7.25%, 10/1/03

  500,000

  500,060

PP&L Capital Funding, Inc., 6.23%, 10/14/03

  1,000,000

  1,000,350

Preferred Term Securities IX Ltd:

1.759%, 4/3/33 (e)(r)

  1,000,000

  1,011,060

4.08%, 4/3/33 (e)(r)

  1,000,000

  1,011,890

ProLogis Trust, 7.00%, 10/1/03

  130,000

  130,017

QBE Insurance Group Ltd, 5.647%, 7/1/23 (e)

  $1,000,000

  $957,079

Rayovac Corp., 8.50%, 10/1/13 (e)

  250,000

  257,500

Raytheon Co., 5.70%, 11/1/03

  980,000

  983,028

Residental Asset Mortgage Products, Inc., 5.09%, 2/25/31

 

1,000,000

  1,029,000

Rex Lumber Co. LLC, VRDN, 1.15%, 2/1/22

  10,000,000

  10,000,000

Roslyn Bancorp, Inc., 5.75%, 11/15/07

  500,000

  513,910

Safeway, Inc., 6.05%, 11/15/03

  500,000

  502,340

Sears, Roebuck Acceptance Corp., 3.03%, 2/25/04 (r)

  1,000,000

  1,000,000

Shopping Center Associates, 6.75%, 1/15/04 (e)

  1,000,000

  1,014,706

Simon DeBartolo Group LP, 6.875%, 10/27/05

  100,000

  107,638

SLM Corp., 1.06%, 7/25/35 (e)(r)

  2,500,000

  2,440,425

Sovereign Bancorp., 4.375%, 8/1/13 (r)

  1,500,000

  1,534,875

Sprint Capital Corp.:

5.70%, 11/15/03

  300,000

  301,056

5.875%, 5/1/04

  1,000,000

  1,018,110

State Street Capital Trust II, 1.63%, 2/15/08 (r)

  1,000,000

  1,000,380

Swepco Capital Trust I, 5.25%, 10/1/43 (r)

  1,000,000

  1,002,600

Texas Municipal Gas Corp., 2.60%, 7/1/07 (e)

  3,000,000

  3,023,970

TIERS Trust, 8.45%, 12/1/17 (n)

  658,859

  49,414

Tyco International Group SA:

5.875%, 11/1/04

  450,000

  461,250

6.375%, 10/15/11

  1,100,000

  1,126,125

Unisys Corp., 6.875%, 3/15/10

  100,000

  103,250

United Energy Ltd, 6.00%, 11/1/05 (e)

  1,500,000

  1,630,245

USL Capital Corp.:

5.95%, 10/15/03

  1,500,000

  1,501,905

6.50%, 12/1/03

 

300,000

  301,974

Valassis Communications, Inc., Zero Coupon, 6/6/21

 

500,000

  289,720

William Street Funding Corp.:

1.41%, 4/23/06 (e)(r)

  1,000,000

  1,001,242

1.63%, 4/23/09 (e)(r)

  1,000,000

  1,008,135

WMX Technologies, Inc., 6.375%, 12/1/03

  1,000,000

  1,007,440

World Financial Network Credit Card Master Note Trust,

1.49%, 5/15/12 (r)

  1,000,000

  999,999

Xerox Corp., 7.15%, 8/1/04

 

300,000

  306,000

Total Corporate Bonds (Cost $116,302,505)

  116,912,317

                 

Taxable Municipal Obligations - 6.3%

Brooklyn Park Minnesota GO Revenue Bonds, 4.55%, 2/1/12

 

670,000

  677,846

Cook County Illinois School District GO Zero Coupon Bonds,

1/20/12

 

380,000

  243,610

Denver Colorado City & County Discount Notes, 12/15/16

 

1,250,000

  604,625

Greater Valley California Medical Building LP, 6.86%, 3/1/21

 

360,000

  367,355

Indiana State Development Finance Authority Revenue VRDN,

1.21%, 9/1/16

  200,000

  200,000

Los Angeles County California MFH Revenue VRDN,

1.07%, 4/15/33

  1,100,000

  1,100,000

New Jersey Economic Development Authority Revenue

Discount Notes, 2/15/17

  6,915,000

  3,311,248

Oregon School Boards Association GO COPs, 6/30/16

 

500,000

  251,120

Phoenix Arizona IDA Revenue Bonds, 6.85%, 12/1/25

 

100,000

  113,202

Port St. Lucie Florida Special Tax Assessment Revenue Bonds,

3.85%, 1/1/08

  $460,000

  $473,073

Southeast Alabama Gas District Lateral Project Revenue VRDN,

1.15%, 6/1/25

  125,000

  125,000

Westmoreland County Pennsylvania GO Revenue Bonds:

6.25%, 5/15/12

  575,000

  650,015

6.25%, 5/15/13

  300,000

  338,079

Total Taxable Municipal Bonds (Cost $8,236,328)

  8,455,173

U.S. Government Agency Obligations - 3.8%

Fannie Mae:

2.375%, 7/21/05

  2,000,000

  2,006,440

4.00%, 11/17/06

  2,000,000

  2,006,380

Freddie Mac, 2.16%, 12/30/05

  1,000,000

  1,005,660

Total U.S. Government Agency

Obligations (Cost $5,032,022)

  5,018,480

U.S. Treasury - 3.1%

U.S. Treasury Notes:

2.00%, 8/31/05

  1,000,000

  1,010,780

2.375%, 8/15/06

  1,100,000

  1,115,125

3.625%, 5/15/13

  500,000

  490,780

4.25%, 8/15/13

 

1,510,000

  1,547,509

Total U.S. Treasury (Cost $4,131,841)

  4,164,194

Equity Securities - 0.4%

  Shares

Allstream, Inc.:

Class A *

  124

  4,809

Class B *

  6,707

  261,908

Conseco, Inc. *

  13,962

  252,152

General Motors, Inc. (Preferred) *

  2,000

  53,900

Total Equity Securities (Cost $398,726)

  572,769

TOTAL INVESTMENTS (Cost $134,101,422) - 100.8%

  135,122,933

Other assets and liabilities, net - (0.8%)

  (1,051,980)

Net Assets - 100%

  $134,070,953

*        Non-income producing security.

(d)      Security is a defaulted security, and is not accruing income. 

                 

(e)      Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

(m)      The Illinois Insurance Department has prohibited Lumbermens from making interest payments due in June and July 2003. Subsequent to September 30, 2003, the Illinois Insurance Department has prohibited Lumbermens from making interest payments due in December 2003 and January 2004. This security is no longer accruing interest and $5,401 in accrued interest was written off, as of September 30, 2003.            

(n)      The Illinois Insurance Department has prohibited Lumbermens from making interest payments due in June and July 2003. This TIERS security is based on interest payments from Lumbermens. Subsequent to September 30, 2003, the Illinois Insurance Department has prohibited Lumbermens from making interest payments due in December 2003 and January 2004. This security is no longer accruing interest, and $13,248 in accrued interest was written off, and the cost basis of the security was increased by interest purchased in the amount of $4,536, as of September 30, 2003.

(o)      The Illinois Insurance Department has prohibited Lumbermens from making interest payments due in June and July 2003. Subsequent to September 30, 2003, the Illinois Insurance Department has prohibited Lumbermens from making interest payments due in December 2003 and January 2004. This is a non-income producing security.

(r)       Adjustable rate.

See notes to financial statements.


STATEMENT OF ASSETS AND LIABILITIES

September 30, 2003

Assets

Value

Investments in securities, at value (Cost $134,101,422) - see accompanying schedule

$135,122,933

Receivable for securities sold

13,793,345

Receivable for shares sold

927,346

Interest and dividends receivable

1,237,091

Other assets

7,357

Total assets

151,088,072

Liabilities

Payable to bank

1,180,877

Payable for securities purchased

15,555,968

Payable for shares redeemed

131,517

Payable to Calvert Asset Management Co., Inc.

49,797

Payable to Calvert Administrative Services Company

27,554

Payable to Calvert Shareholder Services, Inc.

1,861

Payable to Calvert Distributors, Inc.

29,545

Accrued expenses and other liabilities

40,000

Total liabilities

17,017,119

Net Assets

$134,070,953

Net Assets Consist of:

Paid in capital applicable to the following shares of beneficial interest,

unlimited number of no par shares authorized:

Class A: 5,583,406 shares outstanding

$88,906,783

Class C: 863,469 shares outstanding

13,893,249

Class I: 1,637,123 shares outstanding

25,627,123

Undistributed net investment income

91,786

Accumulated net realized gain (loss) on investments

4,530,501

Net unrealized appreciation (depreciation) on investments

1,021,511

Net Assets

$134,070,953

Net Asset Value Per Share

Class A (based on net assets of $92,600,017)

$16.58

Class C (based on net assets of $14,282,753)

$16.54

Class I (based on net assets of $27,188,183)

$16.61

See notes to financial statements.


Statement of Operations

Year Ended September 30, 2003

Net Investment Income

Investment Income:

Interest income

$3,161,367

Total investment income

3,161,367

Expenses:

Investment advisory fee

317,269

Administrative fees

226,502

Transfer agency fees and expenses

136,889

Distribution plan expenses:

Class A

153,642

Class C

64,703

Trustees' fees and expenses

6,586

Custodian fees

58,042

Registration fees

37,057

Reports to shareholders

11,351

Professional fees

15,228

Accounting fees

35,385

Miscellaneous

2,349

Total expenses

1,065,003

Reimbursements from Advisor:

Class A

(120,840)

Fees paid indirectly

(13,386)

Net expenses

930,777

Net Investment Income

2,230,590

Realized and Unrealized Gain (Loss) on Investments

Net realized gain

4,769,668

Change in unrealized appreciation (depreciation)

981,482

Net Realized and Unrealized Gain

(Loss) on Investments

5,751,150

Increase (Decrease) in Net Assets

Resulting From Operations

$7,981,740

See notes to financial statements.


Statement of Changes in Net Assets

From Inception,

January 31, 2002

Year Ended

Through

September 30,

September 30,

Increase (Decrease) in Net Assets

2003

2002

Operations:

Net investment income

$2,230,590

$702,883

Net realized gain (loss) on investments

4,769,668

1,329,539

Change in unrealized appreciation (depreciation)

981,482

40,029

Increase (Decrease) in Net Assets

Resulting From Operations

7,981,740

2,072,451

Distributions to shareholders from:

Net investment income:

Class A shares

(1,477,562)

(348,784)

Class C shares

(83,359)

--

Class I shares

(623,739)

(356,647)

Net realized gain:

Class A shares

(1,019,884)

--

Class C shares

(48,330)

--

Class I shares

(452,088)

--

Total distributions

(3,704,962)

(705,431)

Capital share transactions:

Shares sold:

Class A shares

75,752,325

40,885,643

Class C shares

15,289,333

--

Class I shares

6,998,829

18,160,924

Reinvestment of distributions:

Class A shares

2,186,022

289,019

Class C shares

102,040

--

Class I shares

431,488

39,259

Shares redeemed:

Class A shares

(21,092,681)

(9,113,545)

Class C shares

(1,498,124)

--

Class I shares

(3,377)

--

Total capital share transactions

78,165,855

50,261,300

Total Increase (Decrease) in Net Assets

82,442,633

51,628,320

Net Assets

Beginning of year

51,628,320

--

End of year (including undistributed (distributions in excess of)

net investment income of $91,786 and ($2,548), respectively)

$134,070,953

$51,628,320

See notes to financial statements.


From Inception,

January 31, 2002

Year Ended

Through

September 30,

September 30,

Capital Share Activity

2003

2002

Shares sold:

Class A shares

4,690,116

2,629,638

Class C shares

949,863

--

Class I shares

432,621

1,175,106

Reinvestment of distributions:

Class A shares

137,077

18,387

Class C shares

6,412

--

Class I shares

27,108

2,493

Shares redeemed:

Class A shares

(1,300,331)

(591,481)

Class C shares

(92,806)

--

Class I shares

(205)

--

Total capital share activity

4,849,855

3,234,143

See notes to financial statements.


Notes to Financial Statements

Note A ---- Significant Accounting Policies

General:The Calvert Short Duration Income Fund (the "Fund"), a series of The Calvert Fund, is registered under the Investment Company Act of 1940 as a non-diversified, open-end management investment company. The operations of each series are accounted for separately. The Fund, which commenced operations on January 31, 2002, currently offers three classes of shares of beneficial interest. Class A shares are sold with a maximum front-end sales charge of 2.75%. Effective October 1, 2002, the Fund began to offer Class C shares. Class C shares are sold without a front-end sales change and, with certain exceptions, will be charged a deferred sales charge on shares sold within one year of purchase. Class C shares have a higher expense ratio than Class A shares. Effective February 27, 2002, the Fund began to offer Class I 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 sales charge and have a lower expense ratio 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), and at such other times as may be necessary or appropriate. Securities for which market quotations are available are valued at last sale price or official closing price on the primary market or exchange in which they trade. Unlisted securities and listed securities for which a market quotation is not available are valued at the most recent bid price or based on a yield equivalent obtained from the securities' market maker. Municipal securities are valued utilizing the average of bid prices or at bid prices based on a matrix system (which considers such factors as security prices, yields, maturities and ratings) furnished by dealers through an independent pricing service. Short-term notes are stated at amortized cost, which approximates fair value. Other securities for which market quotations are not available or deemed inappropriate are valued in good faith under the direction of the Board of Trustees.

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.

Options:The Fund may write or purchase option securities. The option premium is the basis for recognition of unrealized or realized gain or loss on the option. The cost of securities acquired or the proceeds from securities sold through the exercise of the option is adjusted by the amount of the premium. Risks from writing or purchasing option securities arise from possible illiquidity of the options market and the movement in the value of the investment or in interest rates. The risk associated with purchasing options is limited to the premium originally paid.


Futures Contracts:The Fund may enter into futures contracts agreeing to buy or sell a financial instrument for a set price at a future date.  Initial margin deposits of either cash or securities as required by the broker are made upon entering into the contract.  While the contract is open, daily variation margin payments are made to or received from the broker reflecting the daily change in market value of the contract and are recorded for financial reporting purposes as unrealized gains or losses by the Fund.  When a futures contract is closed, a realized gain or loss is recorded equal to the difference between the opening and closing value of the contract.  The risks associated with entering into futures contracts may include the possible illiquidity of the secondary market which would limit the Fund's ability to close out a futures contract prior to the settlement date, an imperfect correlation between the value of the contracts and the underlying financial instruments, or that the counterparty will fail to perform its obligations under the contracts' terms.

Security Transactions and Net Investment Income:Security transactions are accounted for on trade date. Realized gains and losses are recorded on an identified cost basis. Dividend income is recorded on the ex-dividend date. Interest income, which includes amortization of premium and accretion of discount on debt securities, is accrued as earned. Investment income and realized and unrealized gains and losses are allocated to separate classes of shares based upon the relative net assets of each class. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured. 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 are paid monthly. 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.

Expense Offset Arrangements:The Fund has an arrangement with its custodian bank whereby the custodian's and transfer agent's fees may be paid indirectly by credits earned on the Fund's cash on deposit with the bank. Such a deposit arrangement is an alternative to overnight investments.

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

Note B -- Related Party Transactions

Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by Calvert Group, Ltd. ("Calvert"), which is indirectly wholly-owned by Ameritas Acacia Mutual Holding Company. The Advisor provides investment advisory services and pays the salaries and fees of officers and affiliated Trustees of the Fund. For its services, the Advisor receives a monthly fee based on an annual rate of .35% of the Fund's average daily net assets.

The Advisor has agreed to limit net annual fund operating expenses through January 31, 2004. The contractual expense cap is 1.08% for Class A (effective February 1, 2003), 2.25% for Class C and .75% for Class I. For the purposes of this expense limit, operating expenses do not include interest expense, brokerage commissions, taxes, extraordinary expenses and capital items.

Calvert Administrative Services Company, an affiliate of the Advisor, provides administrative services to the Fund for an annual fee, payable monthly. Class A and Class C shares pay an annual rate of .30% and Class I shares pay an annual rate of .10%, based on their average daily net assets.

Calvert Distributors, Inc., an affiliate of the Advisor, is the distributor and principal underwriter for the Fund. Distribution Plans, adopted by Class A shares, allow the Portfolios 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. Class I does not have Distribution plan expenses.

The Distributor received $67,797 as its portion of the commissions charged on sales of the Fund's Class A shares for the year ended September 30, 2003.

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 $17,247 for the year ended September 30, 2003. Boston Financial Data Services, Inc. is the transfer and dividend disbursing agent.

Each Trustee of the Fund who is not an employee of the Advisor or its affiliates receives an annual fee of $25,000 plus up to $1,500 for each Board and Committee meeting attended. Trustee'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 and U.S. government securities, were $605,115,560 and $524,305,222, respectively. U.S. government security purchases and sales were $601,422,139 and $605,872,318, respectively

The cost of investments owned at September 30, 2003 for federal income tax purposes was $134,121,145. Net unrealized appreciation aggregated $1,001,788, of which $1,577,807 related to appreciated securities and $576,019 related to depreciated securities.

The tax character of dividends and distributions paid during the years ended September 30, 2003, and September 30, 2002 were as follows:       

                                   

Distributions paid from:

2003

2002

Ordinary income

$3,704,962

$705,431

Total

$3,704,962

$705,431

As of September 30, 2003, the components of distributable earnings/(accumulated losses) on a tax basis were as follows:                                       

Undistributed income

$4,298,549

Undistributed long-term capital gain

343,461

Unrealized appreciation (depreciation)

1,001,788

$5,643,798

Reclassifications 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. The primary differences causing such reclassifications are due to the tax treatment of the Fund's transactions in defaulted securities.

The differences between the components of distributable earnings on a tax basis and the amounts reflected in the statement of assets and liabilities are primarily due to wash sales.

The Fund may sell or purchase securities to and from other funds managed by the Advisor, typically short-term variable rate demand notes. Interportfolio transactions are primarily used for cash management purposes. Interportfolio transactions are made pursuant to Rule 17a-7 of the Investment Company Act of 1940. For the year ended September 30, 2003, such purchase and sales transactions were $60,955,000 and $57,054,060, respectively.


Note D -- Line of Credit

A financing agreement is in place with all Calvert Group Funds (except for the Calvert Social Investment Fund's Balanced and Enhanced Equity Portfolios, the CVS Calvert Social Balanced Portfolio and the CVS Ameritas Index 500 Portfolio) and State Street Bank and Trust Company ("the Bank"). Under the agreement, the Bank is providing an unsecured line of credit facility, in the aggregate amount of $50 million ($25 million committed and $25 million uncommitted), to be accessed by the Funds for temporary or emergency purposes only. Borrowings under this facility bear interest at the overnight Federal Funds Rate plus .50% per annum. A commitment fee of .10% per annum will be incurred on the unused portion of the committed facility which will be allocated to all participating funds. The Fund had no loans outstanding pursuant to this line of credit at September 30, 2003. For the year ended September 30, 2003, borrowings by the Fund under the Agreement were as follows:     

                          

Weighted

Month of

Average

Average

Maximum

Maximum

Daily

Interest

Amount

Amount

Balance

Rate

Borrowed

Borrowed

$82,664

1.80%

$4,612,132

September 2003

Financial Highlights

Periods Ended

September 30,

September 30,

Class A Shares

2003

2002 #

Net asset value, beginning

$15.96

$15.00

Income from investment operations

Net investment income

.39

.39

Net realized and unrealized gain

1.00

.98

Total from investment operations

1.39

1.37

Distributions from:

From net investment income

(.39)

(.41)

Net realized gain

(.38)

--

Total distributions

(.77)

(.41)

Total increase (decrease) in net asset value

.62

.96

Net asset value, ending

$16.58

$15.96

Total return*

9.04%

9.21%

Ratios to average net assets:

Net investment income

2.43%

3.96% (a)

Total expenses

1.27%

1.64% (a)

Expenses before offsets

1.07%

.99% (a)

Net expenses

1.06%

.98% (a)

Portfolio turnover

2,078%

1,777%

Net assets, ending (in thousands)

$92,600

$32,821

Year Ended

September 30,

Class C Shares

2003###

Net asset value, beginning

$15.96

Income from investment operations

Net investment income

.25

Net realized and unrealized gain

.96

Total from investment operations

1.21

Distributions from:

From net investment income

(.25)

Net realized gain

(.38)

Total distributions

(.63)

Total increase (decrease) in net asset value

.58

Net asset value, ending

$16.54

Total return*

7.81%

Ratios to average net assets:

Net investment income

1.32%

Total expenses

2.14%

Expenses before offsets

2.14%

Net expenses

2.12%

Portfolio turnover

2,078%

Net assets, ending (in thousands)

$14,283

Periods Ended

September 30,

September 30,

Class I Shares

2003

2002 ##

Net asset value, beginning

$15.97

$15.40

Income from investment operations

Net investment income

.46

.41

Net realized and unrealized gain

1.01

.54

Total from investment operations

1.47

.95

Distributions from:

From net investment income

(.45)

(.38)

Net realized gain

(.38)

--

Total distributions

(.83)

(.38)

Total increase (decrease) in net asset value

.64

.57

Net asset value, ending

$16.61

$15.97

Total return*

9.53%

6.27%

Ratios to average net assets:

Net investment income

2.88%

4.22% (a)

Total expenses

.65%

.76% (a)

Expenses before offsets

.65%

.76% (a)

Net expenses

.63%

.75% (a)

Portfolio turnover

2,078%

1,777%

Net assets, ending (in thousands)

$27,188

$18,807

(a)      Annualized

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

#        From January 31, 2002, inception.

## From February 27, 2002, inception.

### From October 1, 2002, inception.

See notes to financial statements.


Explanation of Financial Tables

Schedule of Investments

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

Statement of Assets and Liabilities

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

Statement of Net Assets

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

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

Statement of Operations

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

Statement of Changes in Net Assets

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

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

Financial Highlights

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


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Trustee and Officer Information Table

# of Calvert

Position

Position

Portfolios

Other

Name &

with

Start

Principal Occupation

Overseen

Directorships

Date of Birth

Fund

Date

During Last 5 Years

(Not   Applicable   to  Officers)

RICHARD L. BAIRD, JR.

DOB: 05/09/48

Trustee

 

1976

President and CEO of the 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.

18

FRANK H. BLATZ, JR., Esq.

DOB: 10/29/35

Trustee 

1982

Attorney in private practice in Fanwood, NJ.  From 1996 to 1999 he was a partner in the law firm of Snevily, Ely, Williams, Gurrieri & Blatz and prior to that a partner with Abrams, Blatz, Gran, Hendricks & Reina, P.A.

28

DOUGLAS E. FELDMAN, M.D.

DOB: 05/23/48

Trustee 

1982

Managing partner of Feldman Otolaryngology, Head and Neck Surgery in Washington, D.C. A graduate of Harvard Medical School, he is Associate Professor of Otolaryngology, Head and Neck Surgery at Georgetown University and George Washington University Medical School, and past Chairman of the Department of Otolaryngology, Head and Neck Surgery at the Washington Hospital Center. He is included in The Best Doctors in America.

12

PETER W. GAVIAN, CFA, ASA

DOB: 12/08/32

Trustee

1980

Since 1976, President of Corporate Finance of Washington, Inc., a business appraisal firm. He is a Chartered Financial Analyst and an Accredited senior appraiser (business evaluation).

12

JOHN GUFFEY, JR.

DOB: 05/15/48

Trustee 

1976

Treasurer and Director of Silby, Guffey and Co., Inc. a venture capital firm.

20

Ariel Funds

Calvert Foundation

Calvert Ventures, LLC

M. CHARITO KRUVANT

DOB: 12/08/45

Trustee

1996

President and CEO of Creative Associates International, Inc., a firm that specializes in human resources development, information management, public affairs and private enterprise development.

28

Acacia Federal Savings Bank

ARTHUR J. PUGH

DOB: 09/24/37

Trustee 

1982

Retired executive.

28

Acacia Federal Savings Bank

BARBARA J. KRUMSIEK

DOB: 08/09/52

(interested Trustee)

Trustee & President 

 

1997

President, Chief Executive Officer and Vice Chairman of Calvert Group, Ltd.  Prior to joining Calvert in 1997, Ms. Krumsiek had served as a Managing Director of Alliance Fund Distributors, Inc.

37

Calvert Foundation

DAVID R. ROCHAT

DOB: 10/07/37

(interested Trustee)

Trustee & Senior Vice

President 

1980

Executive Vice President of Calvert Asset Management Company, Inc. and Director and President of Chelsea Securities, Inc.

12

Government Scientific Source, Inc.

Chelsea Securities, Inc.

D. Wayne Silby, Esq.

DOB: 07/20/48

(interested Trustee)

Trustee

 

1976

Mr. Silby is Chairman of GroupServe Foundation, a software company focused on collaborative tools for non-profit groups. He is an officer and director of Silby, Guffey and Co., Inc., a private investment company.

21

Ameritas Acacia Mutual Life Insurance Company

Calvert Foundation

Grameen Foundation USA

SUSAN walker Bender, Esq.

DOB: 01/29/59

Officer 

   

1988

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

IVY WAFFORD DUKE, Esq.

DOB: 09/07/68

Officer 

   

1996

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

Daniel K. Hayes

DOB: 09/09/50

Officer 

   

1996

Senior Vice President of Calvert Asset Management Company, Inc.

HUI PING HO, CPA

DOB: 01/06/65

Officer 

   

2000

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

Gregory J. Keifer

DOB: 08/22/64

Officer

2003

Compliance Officer and Assistant Secretary of the Funds. Prior to working at Calvert Group, Mr. Keifer was Assistant Director of Compliance with Legg Mason Wood Walker, Incorporated and a senior compliance analyst with BISYS Fund Services.

LANCELOT A. KING, Esq.

DOB: 07/19/70

Officer

2002

Assistant Secretary and Assistant General Counsel of Calvert Group, Ltd. Prior to working at Calvert Group, Mr. King was an associate with Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, and also with Kirkpatrick & Lockhart.

William M. Tartikoff, Esq.

DOB: 08/12/47

Officer 

   

1990

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

Ronald M. Wolfsheimer, CPA

DOB: 07/24/52

Officer 

   

1979

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

MICHAEL V. YUHAS JR., CPA

DOB: 08/04/61

Officer 

   

1999

Director of Fund Administration of Calvert Group, Ltd. and Fund Controller.

The address of 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.  Mr. Silby is an interested person of the Fund since he is a director of the parent company of the Fund's advisor.  Mr. Rochat is an interested person of the Fund since he is an officer and director of the Fund's advisor.

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


SUPPLEMENT TO

CLASS I (INSTITUTIONAL) SHARES PROSPECTUS

Calvert Social Investment Fund Portfolios

Calvert Social Index Fund

Calvert Large Cap Growth Fund

Calvert Capital Accumulation Fund

Calvert World Values International Equity Fund

Calvert New Vision Small Cap Fund

Calvert Income Fund

Calvert Short Duration Income Fund

Prospectus dated: January 31, 2003

Date of Supplement: June 9, 2003

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. 

Please note this change in the prospectus.

SUPPLEMENT TO

PROSPECTUS

Calvert Social Investment Fund (CSIF) Balanced Portfolio

CSIF Equity Portfolio

CSIF Enhanced Equity Portfolio

CSIF Bond Portfolio

CSIF Money Market Portfolio

Calvert Social Index Fund

Calvert Large Cap Growth Fund

Calvert Capital Accumulation Fund

Calvert World Values International Equity Fund

Calvert New Vision Small Cap Fund

Date of Prospectus: January 31, 2003 as revised June 30, 2003

Class I (Institutional) Shares

(All Portfolios)

Date of Prospectus: January 31, 2003

Calvert Income Fund

Calvert Short Duration Income Fund

Date of Prospectus: January 31, 2003 as revised September 15, 2003

CALVERT VARIABLE SERIES, INC.

PROSPECTUS

Calvert Social Balanced Portfolio

Calvert Income Portfolio

Date of Prospectus: April 30, 2003

Date of This Supplement: October 30, 2003

Please replace the second paragraph under "About Calvert" with the following: (for Calvert Variable Series Social Balanced and Income Portfolios replace the third paragraph under "The Fund and Its Management" with the following:)

Steven Falci serves as Calvert's Chief Investment Officer, Equities and oversees the investment strategy and management of all Calvert equity and balanced portfolios.  Calvert uses a team approach to its management of the fixed-income portfolios.  Gregory Habeeb heads this team for Calvert's taxable fixed-income portfolios. Mr. Habeeb has over 20 years of experience as an analyst, trader, and portfolio manager.  Matt Nottingham is also a member of the fixed-income management team. Mr. Nottingham has 7 1/2 years of experience as an analyst, trader, and portfolio manager.

Calvert Short Duration Income Fund

To Open an Account

800-368-2748

Yields and Prices

Calvert Information Network

(24 hours, 7 days a week)

800-368-2745

Service for Existing Account

Shareholders: 800-368-2745

Brokers: 800-368-2746

TDD for Hearing Impaired

800-541-1524

Branch Office

4550 Montgomery Avenue

Suite 1000 North

Bethesda, Maryland 20814

Registered, Certified

or Overnight Mail

Calvert Group

c/o BFDS

330 West 9th Street

Kansas City, MO 64105

Web Site

http://www.calvert.com

Principal Underwriter

Calvert Distributors, Inc.

4550 Montgomery Avenue

Suite 1000 North

Bethesda, Maryland 20814

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

Calvert's Family of Funds

Tax-Exempt Money Market Funds

CTFR Money Market Portfolio

CTFR California Money Market Portfolio

Taxable Money Market Funds

First Government Money Market Fund

CSIF Money Market Portfolio

Balanced Fund

CSIF Balanced Portfolio

Municipal Funds

CTFR Limited-Term Portfolio

CTFR Long-Term Portfolio

CTFR Vermont Municipal Portfolio

National Muni. Intermediate Portfolio

California Muni. Intermediate Portfolio

Taxable Bond Funds

CSIF Bond Portfolio

Income Fund

Short Duration Income Fund

Equity Funds

CSIF Enhanced Equity Portfolio

CSIF Equity Portfolio

Calvert Large Cap Growth Fund

Capital Accumulation Fund

CWV International Equity Fund

New Vision Small Cap Fund

Calvert Social Index Fund

printed on recycled paper using soy-based inks

<PAGE>

Calvert

Investments that make a difference(registered trademark)

E-Delivery Sign-up -- details inside

September 30, 2003

Annual Report

Calvert New Vision

Small Cap Fund


Table of Contents

President's Letter

2

Social Update

4

Portfolio Management Discussion

5

Independent Auditors' Report

8

Statement of Net Assets

9

Statement of Operations

12

Statements of Changes in Net Assets

13

Notes to Financial Statements

15

Financial Highlights

20

Explanation of Financial Tables

24

Trustee and Officer Information Table

26

Dear Shareholders:

The markets have improved dramatically over the past year, with stocks showing substantial gains and bonds continuing to profit from an historically low interest-rate environment.  

We believe that this year's broad-based market turnaround illustrates once again the value of diversification, asset allocation and long-term investing.  Many investors who pursued an appropriate asset allocation, with investments in stocks, bonds and cash, were able to benefit from the rally in securities prices.  Those who paid too much attention to short-term past performance and substantially reduced their stock holdings early in the year may well have missed the sharp rallies in the second quarter.  At Calvert, we encourage all our shareholders to review their portfolios with their financial advisors to ensure that their investments remain in line with their specific risk tolerance, return expectations and financial goals. 

A cloud on the otherwise bright performance of the markets and economy was the distressing news concerning recent market timing and illegal after-hours trading on the part of certain mutual funds. We want to assure Calvert shareholders that we have a long-standing policy of not accepting trades from market timers, which is strictly enforced. And, of course, we do not accept or execute trades after the market closes, which would be in violation of securities industry regulations.  

Markets like the ones that we have seen over the past several years demonstrate that understanding risk -- at the security, fund, and asset-class level -- is an integral part of successful investing.  This year, we have taken a number of steps to improve our ability to monitor and manage risk, and to prepare for further growth in our investor base.  We have reorganized Calvert's investment activities into two departments, Equities and Fixed Income, each headed by Chief Investment Officers who will work closely with our Social Research Department.  We believe that these changes will enhance our ability to deliver top-tier investment performance to our shareholders, while keeping investment risk at appropriate levels. 

Thank you for your continued business, and we look forward to serving you in the year ahead.

Sincerely,

/s/Barbara J. Krumsiek

President and CEO

Calvert Asset Management Company, Inc.

November 2003


Social Update

from the Calvert Social Research Department

Shareholder Activism

Calvert shareholder activism seeks to move companies already performing in a more socially responsible manner than their industry peers to a higher level of corporate responsibility. We've secured the agreement of two major pharmaceutical companies to amend and post their ethical policies for clinical research in developing countries, where people are often not provided adequate information about the risks of clinical research or are promised but not given health care in exchange for their participation in trials for new drugs.

In addition, our shareholder resolution effectiveness has increased as we've become more effective in positioning our point of view in the context of shareholders' financial interests. For example, we received 12% support on a resolution seeking inclusive diversity policies at Alltel Corporation and a remarkable 63% on a resolution for staggered board tenures at Gillette.

Corporate "dialogues" continue, including a current effort with Weyerhaeuser to establish a policy prohibiting the harvest of and trade in products from primary and old-growth forests.

Board Diversity Initiative Successes

Two companies held in Calvert Funds have agreed to adopt key language from Calvert's model board diversity charter, which reflects our belief that boards of directors should look like America, not just a small slice of it.

Social Policy Leadership Announced

Calvert has named Joe Keefe Senior Advisor for Strategic Social Policy. Mr. Keefe, who has worked for and consulted with several socially responsible mutual fund groups, will provide focused, proactive direction for our social vision.


Portfolio Statistics

September 30, 2003

Investment Performance

(total return at NAV)

6 Months

12 Months

ended

ended

9/30/03

9/30/03

Class A

28.86%

21.89%

Class B

28.28%

20.71%

Class C

28.36%

20.93%

Class I**

29.10%

22.32%

Russell 2000 Index TR*

34.63%

36.50%

Lipper Small-Cap Core Funds Avg.*

31.80%

32.01%

Ten Largest Stock Holdings

% of Net Assets

Viad Corp.

4.0%

Rayovac Corp.

3.9%

Brink's Co

3.8%

PMI Group, Inc.

3.6%

Ruby Tuesday, Inc.

3.5%

NCO Group, Inc.

3.5%

Corn Products Int'l, Inc.

3.5%

Barra, Inc.

3.5%

Axcelis Technologies, Inc.

3.5%

SOURCECORP, Inc.

3.4%

Total

36.2%

Asset Allocation

        

Stocks

94%

Notes

1%

Cash & Cash Equivalents

5%

100%

Investment performance does not reflect the deduction of any front-end or deferred sales charge.

TR represents total return.

*  Source: Lipper Analytical Services, Inc.

** Note Regarding Class I Shares Total Returns: There were times during the reporting period when there were no shareholders in Class I. For purposes of reporting Investment Performance, Class A performance at NAV (i.e. does not reflect deduction of the Class A front-end sales charge) is used during these periods in which there were no shareholders in Class I. For purposes of this Investment Performance, the Class A performance at NAV was used during the periods September 30, 2002 through January 30, 2003, and March 12, 2003 through July 31, 2003.

Portfolio Management Discussion

James Awad

Awad Asset Management Company

Performance

During the one-year period ended September 30, 2003, Calvert New Vision Small Cap Fund's Class A shares returned 21.89%, compared with 36.50% for the Russell 2000.

Investment Climate

The period was characterized by periodic frustration for us. Markets were unsettled, alternating between significant declines and volatile rallies, and during the declines selling appeared irrational, with stocks being sold regardless of their relative value. During the recoveries, gains were made primarily by lower-quality and/or high-valuation sectors and high-beta sectors.

Portfolio Strategy

Through the period

The growth-at-a-reasonable-price style we employ tends to outperform during periods characterized by investor preference for relative value investing  -- not during periods characterized by euphoria following on depression.

Two examples of what we believe are great long-term growing companies that we held in the Fund but underperformed during the past year are North Fork Bank and John Wiley & Sons. We believe both are compelling growth companies with good earnings, excellent balance sheets, and well-regarded managements. In addition, during the 12 months ended September 30, both companies met earnings expectations, yet John Wiley returned only 19.1% and North Fork went down 5.3%.

Another example is Rayovac, the third-largest battery company in the U.S. Even though in our opinion the company has an important strategic franchise and excellent management execution, the stock returned only 19.7% during this period.

Going forward

We are optimistic but attentive to risks, continuing to seek out companies with growing earnings, that have, in our opinion, sound business models, good balance sheets, and sensible valuations. We are confident in our process and application and feel that the Fund is excellently positioned. It is worthwhile remembering that the small- to mid-capitalization sector is generally a good arena in which to invest. It is the area in which diligent research can uncover undervalued securities. In addition, many companies in this universe are unit-growth companies which can grow earnings without a major acceleration in the economy.

Outlook

In March, we believe that the markets were hobbled by concerns about war and recession. Today, they appear buoyed by signs of economic recovery and the momentum of increasing equity prices. There are several reasons for optimism. First, we believe that US corporations are in excellent shape -- a little improvement in economic activity should lead to a nice increase in profits, and profits are what drive stock prices. Second, there appear to be increasing signs that the economy is in fact improving. And third, a serious investor can ferret out many stocks which are attractively valued.

However, we believe that several factors should prevent investors from having unbridled optimism. For example, it is unclear how strong and long the recovery will be; the soft job market may act as a restraint. In addition, the broad stock market averages, as measured by indices such as the S&P 500, are not compellingly cheap. Finally, the growing federal deficit and the geopolitical situation remain long-term question marks. Their effect on the economy and stock markets remains an uncertainty.

Overall, the prudent position seems to be guarded optimism -- remaining attentive to risk, yet seeking out opportunities for profit.

November 2003

Portfolio Statistics

September 30, 2003

Average Annual Total Returns

(with max. load)

Class A Shares

One year

16.09%

Five year

7.88%

Since inception

2.46%

(1/31/97)

Class B Shares

One year

15.71%

Five year

7.61%

Since inception

1.21%

(4/1/98)

Portfolio Statistics

September 30, 2003

Average Annual Total Returns

(with max. load)

Class C Shares

One year

19.93%

Five year

8.00%

Since inception

2.43%

(1/31/97)

Class I Shares*

One year

22.32%

Since inception

10.17%

(3/1/99)

New subadvisor assumed management of the Fund effective October 1997.

Performance Comparison

Comparison of change in value of $10,000 investment. (Source: Lipper Analytical Services, Inc.)


<img width=492 height=314

  src="./newvision93003_files/image002.jpg" v:shapes="_x0000_s1029"><![endif]>

*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 periods January 18, 2002 through January 30, 2003 and March 12, 2003 through July 31, 2003.

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 maximum front-end or deferred sales charge. No sales charge has been applied to the indices used for comparison. The value of an investment in Class A & C shares is plotted in the line graph. The value of an investment in another class of shares would be different. The graph and table do not reflect the deduction of taxes that a shareholder would pay on the Fund's distributions or the redemption of Fund shares. Past performance is no guarantee of future results.



Independent Auditors' Report

To the Board of Trustees of The Calvert Fund and Shareholders of

Calvert New Vision Small Cap Fund:

We have audited the accompanying statement of net assets of Calvert New Vision Small Cap Fund (the "Fund"), a series of The Calvert Fund, Inc., as of September 30, 2003, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the 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.  The financial highlights for the years ended September 30, 2001 and 2000, were audited by other auditors who have ceased operations.  Those auditors expressed an unqualified opinion on those financial statements in their report dated November 16, 2001.  The financial highlights for the periods presented prior to September 30, 2000, were audited by other auditors, whose report dated November 10, 1999, expressed an unqualified opinion on those statements.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America.  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, 2003, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received.  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 Calvert New Vision Small Cap Fund as of September 30, 2003, the results of its operations for the year then ended, the changes in its net assets and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/KPMG LLP

Philadelphia, Pennsylvania

November 18, 2003


Statement of Net Assets

September 30, 2003

Equity Securities - 94.4%

Shares

Value

Agricultural Products - 3.5%

Corn Products International, Inc.

  219,000

  $6,975,150

Banks - Regional - 4.7%

Capital Crossing Bank*

  112,700

  4,006,485

North Fork Bancorp., Inc.

  149,000

  5,177,750

  9,184,235

Communications Equipment - 6.4%

Commscope, Inc.*

  506,500

  6,108,390

Plantronics, Inc.*

  277,500

  6,623,925

 

12,732,315

Computers - Software & Services - 3.5%

Barra, Inc.*

 

184,000

  6,909,200

Consumer Finance - 6.7%

MCG Capital Corp.

  397,000

  6,197,170

PMI Group, Inc.

  210,000

  7,087,500

 

13,284,670

Electrical Equipment - 3.9%

Rayovac Corp.*

  530,100

  7,739,460

Equipment - Semiconductors - 3.5%

Axcelis Technologies, Inc.*

  831,000

  6,864,060

Healthcare - Drug - Major Pharmaceutical - 1.4%

KV Pharmaceutical Co.*

  119,250

  2,683,125

Healthcare - Medical Products & Supplies - 2.3%

Sola International, Inc.*

  285,600

  4,569,600

Healthcare - Special Services - 1.1%

Hooper Holmes, Inc.

  311,000

  2,068,150

Insurance - Multi-Line - 3.1%

Quanta Capital Holdings Ltd.*(e)(b)(i)

  600,000

  6,060,000

Investment Banking & Brokerage - 2.7%

Interactive Data Corp.*

  338,500

  5,348,300

Manufacturing - Diversified - 2.9%

Spartech Corp.

  270,700

  5,765,910

Photography & Imaging - 2.5%

Concord Camera Corp.*

  464,300

  4,944,795

Publishing - 3.0%

John Wiley & Sons, Inc.

  229,400

  $5,962,106

Restaurants - 3.5%

Ruby Tuesday, Inc.

  290,000

  6,991,900

Retail - Computers & Electronics - 2.7%

Tech Data Corp.*

  174,500

  5,383,325

Retail - Department Stores - 2.4%

Stage Stores, Inc.*

  187,200

  4,769,856

Retail - Specialty - 7.2%

Barnes & Noble, Inc.*

  215,000

  5,463,150

Group 1 Automotive, Inc.*

  53,700

  1,854,798

Sonic Automotive, Inc.

  135,000

  3,248,100

United Auto Group, Inc.*

  157,900

  3,631,700

 

14,197,748

Services - Advertising & Marketing - 1.5%

InfoUSA, Inc.*

  390,000

  2,928,900

Services - Commercial & Consumer - 17.7%

Brink's Co

 

430,800

  7,478,688

NCO Group, Inc*

  297,886

  6,991,384

SOURCECORP, Inc*

  292,500

  6,800,625

Startek, Inc.

  180,450

  5,774,400

Viad Corp.

 

328,400

  7,842,192

 

34,887,289

Services - Data Processing - 4.9%

Bisys Group, Inc.*

  240,000

  3,156,000

Ceridian Corp.*

  345,000

  6,423,900

 

9,579,900

Telecommuncations - 3.3%

Allstream, Inc. Class B*

  166,000

  6,482,300

Total Equity Securities (Cost $160,109,053)

  186,312,294

Principal

Taxable Variable Rate Demand Notes - 5.2%

Amount

Bloomington Minnesota MFH Revenue, 1.10%, 11/15/32

 

$3,900,000

  3,900,000

Indiana State Development Finance Authority Revenue,

1.21%, 9/01/16

 

1,300,000

  1,300,000

The Jobs Co., 1.33%, 5/01/22

 

3,000,000

  3,000,000

Winder-Barrow Industrial Building Authority Revenue,

1.15%, 12/01/14

  2,000,000

  2,000,000

Total Taxable Variable Rate Demand Notes (Cost $10,200,000)

  10,200,000

Principal

Certificates of Deposit - 0.0%

Amount

Value

ShoreBank & Trust Co., 1.31%, 2/09/04 (b)(k)

  $100,000

  $99,980

Total Certificates of Deposit (Cost $100,000)

  99,980

High Social Impact Investments - 0.5%

Calvert Social Investment Foundation Notes,

2.5%, 7/01/04 (b)(i)

  950,000

  927,143

Total High Social Impact Investments (Cost $950,000)

  927,143

Total Investments (Cost $171,359,053) - 100.1%

  197,539,417

Other assets and liabilities, net - (0.1%)

  (184,194)

Net Assets - 100%

  $197,355,223

Net Assets Consist of:

Paid-in capital applicable to the following shares of beneficial interest,

unlimited number of no par value authorized:

Class A: 9,590,071 shares outstanding

  $156,813,223

Class B: 1,261,551 shares outstanding

  19,167,739

Class C: 1,226,331 shares outstanding

  18,733,550

Class I: 68,663 shares outstanding

 

1,136,059

Accumulated net realized gain (loss) on investments

  (24,675,712)

Net unrealized appreciation (depreciation) on investments

  26,180,364

Net Assets

  $197,355,223

Net Asset Value Per Share

Class A (based on net assets of $157,611,008)

  $16.43

Class B (based on net assets of $19,521,757)

  $15.47

Class C (based on net assets of $19,092,457)

  $15.57

Class I (based on net assets of $1,130,001)

  $16.46

*   Non income producing security.

(b)      This security was valued by the Board of Trustees, see Note A.

(e)      Security is exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

(i)       Restricted securities represent 0.5% of net assets of the Fund.       

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

        

See notes to financial statements.             


Statement of Operations

Year ended September 30, 2003

Net Investment Income

Investment Income:

Dividend income

$953,563

Interest income

193,692

Total investment income

1,147,255

Expenses:

Investment advisory fee

1,198,706

Transfer agency fees and expenses

647,651

Distribution Plan expenses:

Class A

321,861

Class B

151,982

Class C

156,607

Trustees' fees and expenses

10,189

Administrative fees

399,236

Accounting fees

59,802

Custodian fees

27,417

Registration fees

31,609

Reports to shareholders

85,894

Professional fees

14,344

Miscellaneous

10,259

Total expenses

3,115,557

Reimbursement from Advisor:

Class I

(201)

Fees waived

(22,643)

Fees paid indirectly

(17,419)

Net expenses

3,075,294

Net Investment Income (Loss)

(1,928,039)

Realized and Unrealized Gain (Loss) on Investments

Net realized gain (loss)

(15,770,701)

Change in unrealized appreciation or (depreciation)

50,943,929

Net Realized and Unrealized Gain

(Loss) on Investments

35,173,228

Increase (Decrease) in Net Assets

Resulting From Operations

$33,245,189

See notes to financial statements.


Statements of Changes in Net Assets

        

Year Ended

Year Ended

September 30,

September 30,

Increase (Decrease) in Net Assets

2003

2002

Operations:

Net investment income (loss)

($1,928,039)

$1,339,792

Net realized gain (loss)

(15,770,701)

(4,206,845)

Change in unrealized appreciation or (depreciation)

50,943,929

(21,164,695)

Increase (Decrease) in Net Assets

Resulting From Operations

33,245,189

(24,031,748)

Distributions to shareholders from:

Net investment income:

Class A Shares

(1,084,619)

--

Class B Shares

(122,869)

--

Class C Shares

(132,328)

--

Net realized gain:

Class A Shares

(45,780)

(2,158,089)

Class B Shares

(5,438)

(175,100)

Class C Shares

(5,880)

(226,389)

Total distributions

(1,396,914)

(2,559,578)

Capital share transactions:

Shares sold:

Class A Shares

55,728,428

92,837,638

Class B Shares

6,156,676

8,998,794

Class C Shares

5,272,115

9,257,440

Class I Shares

1,217,130

--

Shares issued from merger:

Class A Shares

1,572,251

--

Class B Shares

351,028

--

Class C Shares

163,491

--

Class I Shares

370,734

--

Reinvestment of distributions:

Class A Shares

1,051,628

2,037,707

Class B Shares

110,915

152,389

Class C Shares

117,719

204,723

Class I Shares

--

20

Shares redeemed:

Class A Shares

(35,797,300)

(49,285,140)

Class B Shares

(1,971,328)

(1,216,685)

Class C Shares

(2,724,702)

(1,994,658)

Class I Shares

(456,534)

(969)

Total capital share transactions

31,162,251

60,991,259

Total Increase (Decrease) in Net Assets

63,010,526

34,399,933

Net Assets

Beginning of year

134,344,697

99,944,764

End of year (including undistributed net investment income

of $0 and $1,339,792, respectively)

$197,355,223

$134,344,697

See notes to financial statements.


Year Ended

Year Ended

September 30,

September 30,

Capital Share Activity

2003

2002

Shares sold:

Class A Shares

3,833,565

5,338,139

Class B Shares

452,368

547,108

Class C Shares

383,458

561,154

Class I Shares

76,066

--

Shares issued from merger:

Class A Shares

118,660

--

Class B Shares

27,948

--

Class C Shares

12,954

--

Class I Shares

27,975

--

Reinvestment of distributions:

Class A Shares

75,907

118,124

Class B Shares

8,442

9,213

Class C Shares

8,912

12,333

Class I Shares

--

1

Shares redeemed:

Class A Shares

(2,463,454)

(2,953,115)

Class B Shares

(145,060)

(75,949)

Class C Shares

(198,754)

(125,365)

Class I Shares

(35,378)

(55)

Total capital share activity

2,183,609

3,431,588

See notes to financial statements.


Notes to Financial Statements

Note A -- Significant Accounting Policies

General:The Calvert New Vision Small Cap Fund (the "Fund"), a series of The Calvert Fund, is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The operation of each series is accounted for separately. The Fund offers four classes of shares of beneficial interest. 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 investment may be waived for certain institutional accounts, where it is believed to be in the best interest of the Fund and its shareholders. 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.

On January 30, 2003, the net assets of the Calvert Social Investment Fund's Technology Portfolio merged into the Calvert New Vision Small Cap Fund.  The merger was accomplished by a tax-free exchange of 118,660 Class A, 27,948 Class B, 12,954 Class C, and 27,975 Class I shares of the New Vision Small Cap Fund (valued at $1,572,251, $351,028, $163,491, and $370,734 respectively) for 575,493 Class A, 131,436 Class B, 60,921 Class C, and 133,333 Class I shares of the Technology Fund outstanding at January 30, 2003.  The Technology Fund's net assets as of January 30, 2003, including $21,565 of unrealized appreciation and $36,057 of net realized gain, were combined with those of the New Vision Small Cap Fund.

Security Valuation:Net asset value per share is determined every business day as of the close of the regular session of the New York Stock Exchange (generally 4:00 p.m. Eastern time), and at such other times as may be necessary or appropriate. Securities for which market quotations are available are valued at last sale price or official closing price on the primary market or exchange in which they trade. Unlisted securities and listed securities for which a market quotation is unavailable are valued at the most recent bid price or based on a yield equivalent obtained from the securities' market maker. Short-term notes are stated at amortized cost, which approximates fair value. The Fund may invest in securities whose resale is subject to restrictions. Investments for which market quotations are not available or deemed inappropriate are valued in good faith under the direction of the Board of Trustees.

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, 2003, $7,087,123, or 3.6% of net assets, were valued in good faith by the Board of Trustees.

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.

Options: The Fund may write or purchase option securities. The option premium is the basis for recognition of unrealized or realized gain or loss on the option. The cost of securities acquired or the proceeds from securities sold through the exercise of the option is adjusted by the amount of the premium. Risks from writing or purchasing option securities arise from possible illiquidity of the options market and the movement in the value of the investment or in interest rates. The risk associated with purchasing options is limited to the premium originally paid.

Restricted Securities:  The Fund may invest in securities that are subject to legal or contractual restrictions on resale. Generally, these securities may only be sold publicly upon registration under the Securities Act of 1933 or in transactions exempt from such registration.

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

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

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

Expense Offset Arrangements:The Fund has an arrangement with its custodian bank whereby the custodian's and transfer agent's fees may be paid indirectly by credits earned on the Fund's cash on deposit with the bank. Such a deposit arrangement is an alternative to overnight investments.

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

Note B -- Related Party Transactions

Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by Calvert Group, Ltd. ("Calvert"), which is indirectly wholly-owned by Ameritas Acacia Mutual Holding Company. The Advisor provides investment advisory services and pays the salaries and fees of officers and affiliated Trustees of the Fund. For its services, the Advisor receives a monthly fee based on an annual rate of .75% based on the Fund's average daily net assets. Under the terms of the agreement, $187,349 was payable at year end.

The Advisor contractually reimbursed the Fund's Class I shares for expenses of $201 for the year ended September 30, 2003. Effective February 1, 2003, the contractual expense cap became .92% for Class I. For the purposes of this expense limit, operating expenses do not include interest expense, brokerage commissions, taxes, extraordinary expenses and capital items.

Calvert Administrative Services Company ("CASC"), 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 shares and .10% for Class I shares based on their average daily net assets. For the year ended September 30, 2003, CASC waived $22,643 of its fee. Under the terms of the agreement, $44,855 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 .25%, 1.00% and 1.00% annually of average daily net assets of each Class A, Class B and Class C, respectively. Class I does not have Distribution Plan expenses. Under the terms of the agreement, $66,933 was payable at year end.

The Distributor received $76,806 as its portion of the commissions charged on sales of the Fund's Class A shares for the year ended September 30, 2003.

Calvert Shareholder Services, Inc. ("CSSI"), an affiliate of the Advisor, is the shareholder servicing agent for the Fund. For its services, CSSI received fees of $129,628 for the year ended September 30, 2003. Under the terms of the agreement, $11,441 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 Trustee of the Fund who is not an employee of the Advisor or its affiliates receives an annual retainer of $25,000 plus $1,500 for each Board and Committee meeting attended. Trustees 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 $103,445,952 and $78,230,148, respectively.

The cost of investments owned at September 30, 2003 for federal income tax purposes was $172,350,829. Net unrealized appreciation aggregated $25,188,588, of which $31,565,413 related to appreciated securities and $6,376,825 related to depreciated securities.

Net realized capital loss carryforward for federal income tax purposes of $875,996 (from Calvert Social Investment Fund Technology Portfolio) and $7,037,677 at September 30, 2003 may be utilized to offset future capital gains until expiration in September 2010 and September 2011, respectively.

The Fund's use of net capital loss carryforwards from Calvert Social Investment Fund Technology Portfolio may be limited under certain tax provisions.

The Fund intends to elect to defer $15,770,263 of post-October losses to fiscal year ending September 30, 2004. Such losses will expire in 2012.

The tax character of dividends and distributions paid during the years ended September 30, 2003, and September 30, 2002 were as follows:       

                                   

Distributions paid from:

2003

2002

Ordinary income

$1,396,914

$1,346,747

Long-term capital gain

--

1,212,831

Total

$1,396,914

$2,559,578

                                   

As of September 30, 2003, the components of distributable earnings/(accumulated losses) on a tax basis were as follows:                                       

Capital loss carryforward

($7,913,673)

Unrealized appreciation (depreciation)

25,188,588

$17,274,915

Reclassifications 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. The primary permanent differences causing such reclassifications are due to the disallowance of net operating losses.

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 wash sales and post-October losses.

The Fund may sell or purchase securities to and from other funds managed by the Advisor, typically short-term variable rate demand notes. Interportfolio transactions are primarily used for cash management purposes. Interportfolio transactions are made pursuant to Rule 17a-7 of the Investment Securities Act of 1940. For the year ended September 30, 2003, such purchases and sales transactions were $22,860,000 and $16,015,000, respectively.


Note D -- Line of Credit

A financing agreement is in place with all Calvert Group Funds (except for the Calvert Social Investment Fund's Balanced and Enhanced Equity Portfolios, the CVS Calvert Social Balanced Portfolio and the CVS Ameritas Index 500 Portfolio) and State Street Bank and Trust Company ("the Bank"). Under the agreement, the Bank is providing an unsecured line of credit facility, in the aggregate amount of $50 million ($25 million committed and $25 million uncommitted), to be accessed by the Funds for temporary or emergency purposes only. Borrowings under this facility bear interest at the overnight Federal Funds Rate plus .50% per annum. A commitment fee of .10% per annum will be incurred on the unused portion of the committed facility which will be allocated to all participating funds. The Fund had no loans outstanding pursuant to this line of credit at September 30, 2003. For the year ended September 30, 2003, borrowings by the Fund under the Agreement were as follows:

Weighted

Month of

Average

Average

Maximum

Maximum

Daily

Interest

Amount

Amount

Balance

Rate

Borrowed

Borrowed

$49,838

1.76%

$2,210,445

January 2003

Financial Highlights

Years Ended

September 30,

September 30,

Class A Shares

2003

2002

Net asset value, beginning

$13.61

$15.39

Income from investment operations

Net investment income (loss)

(.15)

.19

Net realized and unrealized gain (loss)

3.11

(1.60)

Total from investment operations

2.96

(1.41)

Distributions from

Net investment income

(.13)

--

Net realized gain

(.01)

(.37)

Total distributions

(.14)

(.37)

Total increase (decrease) in net asset value

2.82

(1.78)

Net asset value, ending

$16.43

$13.61

Total return*

21.89%

(9.65%)

Ratios to average net assets:

Net investment income (loss)

(1.03%)

1.11%

Total expenses

1.77%

1.70%

Expenses before offsets

1.76%

1.70%

Net expenses

1.75%

1.70%

Portfolio turnover

54%

41%

Net assets, ending (in thousands)

$157,611

$109,207

        

Years Ended

September 30,

September 30,

September 30,

Class A Shares

2001

2000

1999

Net asset value, beginning

$18.43

$13.49

$12.04

Income from investment operations

Net investment income (loss)

(.11)

(.13)

(.05)

Net realized and unrealized gain (loss)

(1.51)

5.07

1.50

Total from investment operations

(1.62)

4.94

1.45

Distributions from

Net realized gain

(1.42)

--

--

Total distributions

(1.42)

--

--

Total increase (decrease) in net asset value

(3.04)

4.94

1.45

Net asset value, ending

$15.39

$18.43

$13.49

Total return*

(8.99%)

36.62%

12.04%

Ratios to average net assets:

Net investment income (loss)

(.66%)

(.82%)

(.39%)

Total expenses

1.76%

1.79%

1.96%

Expenses before offsets

1.72%

1.76%

1.93%

Net expenses

1.63%

1.50%

1.66%

Portfolio turnover

66%

113%

68%

Net assets, ending (in thousands)

$84,979

$79,641

$52,961

Years Ended

September 30,

September 30,

Class B Shares

2003

2002

Net asset value, beginning

$12.94

$14.80

Income from investment operations

Net investment income (loss)

(.22)

.03

Net realized and unrealized gain (loss)

2.88

(1.52)

Total from investment operations

2.66

(1.49)

Distributions from

Net investment income

(.12)

--

Net realized gain

(.01)

(.37)

Total distributions

(.13)

(.37)

Total increase (decrease) in net asset value

2.53

(1.86)

Net asset value, ending

$15.47

$12.94

Total return*

20.71%

(10.59%)

Ratios to average net assets:

Net investment income (loss)

(2.02%)

.18%

Total expenses

2.76%

2.76%

Expenses before offsets

2.75%

2.76%

Net expenses

2.74%

2.76%

Portfolio turnover

54%

41%

Net assets, ending (in thousands)

$19,522

$11,878

        

Years Ended

September 30,

September 30,

September 30,

Class B Shares

2001

2000

1999

Net asset value, beginning

$17.96

$13.29

$12.01

Income from investment operations

Net investment income (loss)

(.27)

(.30)

(.15)

Net realized and unrealized gain (loss)

(1.47)

4.97

1.43

Total from investment operations

(1.74)

4.67

1.28

Distributions from

Net realized gain

(1.42)

--

--

Total increase (decrease) in net asset value

(3.16)

4.67

1.28

Net asset value, ending

$14.80

$17.96

$13.29

Total return*

(9.96%)

35.14%

10.66%

Ratios to average net assets:

Net investment income (loss)

(1.74%)

(1.86%)

(1.68%)

Total expenses

2.87%

2.97%

3.87%

Expenses before offsets

2.82%

2.94%

3.33%

Net expenses

2.71%

2.52%

2.93%

Portfolio turnover

66%

113%

68%

Net assets, ending (in thousands)

$6,477

$4,484

$1,504

Years Ended

September 30,

September 30,

Class C Shares

2003

2002

Net asset value, beginning

$13.00

$14.85

Income from investment operations

Net investment income (loss)

(.23)

.04

Net realized and unrealized gain (loss)

2.93

(1.52)

Total from investment operations

2.70

(1.48)

Distributions from

Net investment income

(.12)

--

Net realized gain

(.01)

(.37)

Total distributions

(.13)

(.37)

Total increase (decrease) in net asset value

2.57

(1.85)

Net asset value, ending

$15.57

$13.00

Total return*

20.93%

(10.49%)

Ratios to average net assets:

Net investment income (loss)

(1.89%)

0.27%

Total expenses

2.64%

2.60%

Expenses before offsets

2.62%

2.60%

Net expenses

2.61%

2.59%

Portfolio turnover

54%

41%

Net assets, ending (in thousands)

$19,092

$13,260

Years Ended

September 30,

September 30,

September 30,

Class C Shares

2001

2000

1999

Net asset value, beginning

$17.99

$13.27

$11.95

Income from investment operations

Net investment income (loss)

(.24)

(.26)

(.22)

Net realized and unrealized gain (loss)

(1.48)

4.98

1.54

Total from investment operations

(1.72)

4.72

1.32

Distributions from

Net realized gain

(1.42)

--

--

Total distributions

(1.42)

--

--

Total increase (decrease) in net asset value

(3.14)

4.72

1.32

Net asset value, ending

$14.85

$17.99

$13.27

Total return*

(9.83%)

35.57%

11.05%

Ratios to average net assets:

Net investment income (loss)

(1.56%)

(1.66%)

(1.27%)

Total expenses

2.69%

2.68%

2.87%

Expenses before offsets

2.65%

2.65%

2.84%

Net expenses

2.54%

2.33%

2.53%

Portfolio turnover

66%

113%

68%

Net assets, ending (in thousands)

$8,489

$8,799

$6,215

Periods Ended

September 30,

March 12,

January 18,

Class I Shares

2003(z)

2003(y)

2002(x)

Net asset value, beginning

$16.20

$13.25

$15.76

Income from investment operations

Net investment income (loss)

--

--

(.02)

Net realized and unrealized gain (loss)

.26

(1.29)

2.16

Total from investment operations

.26

(1.29)

2.14

Distributions from

Net realized gain

--

--

(.37)

Total distributions

--

--

(.37)

Total increase (decrease) in net asset value

.26

(1.29)

1.77

Net asset value, ending

$16.46

$11.96

$17.53

Total return*

1.60%

(9.74%)

13.58%

Ratios to average net assets:

Net investment income (loss)

(0.11%) (a)

(.31%) (a)

(.35%) (a)

Total expenses

1.01% (a)

1.12% (a)

1,179.31% (a)

Expenses before offsets

.93% (a)

.93% (a)

.70% (a)

Net expenses

.92% (a)

.92% (a)

.70% (a)

Portfolio turnover

5%

9%

11%

Net assets, ending (in thousands)

$1,130

$0

$0

Periods Ended

September 30,

September 30,

September 30,

Class I Shares

2001

2000

1999#

Net asset value, beginning

$18.77

$13.57

$12.20

Income from investment operations

Net investment income (loss)

.04

(.03)

.03

Net realized and unrealized gain (loss)

(1.63)

5.23

1.34

Total from investment operations

(1.59)

5.20

1.37

Distributions from

Net realized gain

(1.42)

--

--

Total distributions

(1.42)

--

--

Total increase (decrease) in net asset value

(3.01)

5.20

1.37

Net asset value, ending

$15.76

$18.77

$13.57

Total return*

(8.65%)

38.32%

11.23%

Ratios to average net assets:

Net investment income (loss)

.25%

(.14%)

.36% (a)

Total expenses

64.09%

1.64%

1.87% (a)

Expenses before offsets

3.71%

.98%

.93% (a)

Net expenses

.82%

.82%

.82% (a)

Portfolio turnover

66%

113%

68%

Net assets, ending (in thousands)

$1

$46

$1,314

(a)      Annualized

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

#        From March 1, 1999 inception.

(x) The last remaining shareholder in Class I redeemed on January 18, 2002.

(y) Class I shares resumed on January 30, 2003 when the Calvert Social Investment Fund's Technology Portfolio merged into the Calvert New Vision Small Cap Fund. Subsequently, the last remaining shareholder redeemed on March 12, 2003.

(z) Class I shares resumed upon shareholder investment on July 31, 2003.

See notes to financial statements.


EXPLANATION OF FINANCIAL TABLES

Schedule of Investments

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

Statement of Assets and Liabilities

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

Statement of Net Assets

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

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

Statement of Operations

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

Statement of Changes in Net Assets

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

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

Financial Highlights

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


Trustee and Officer Information Table

# of Calvert

Position

Position

Portfolios

Other

Name &

with

Start

Principal Occupation

Overseen

Directorships

Date of Birth

Fund

Date

During Last 5 Years

(Not   Applicable   to  Officers)

RICHARD L. BAIRD, JR.

DOB: 05/09/48

Trustee

 

1976

President and CEO of the 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.

18

FRANK H. BLATZ, JR., Esq.

DOB: 10/29/35

Trustee 

1982

Attorney in private practice in Fanwood, NJ.  From 1996 to 1999 he was a partner in the law firm of Snevily, Ely, Williams, Gurrieri & Blatz and prior to that a partner with Abrams, Blatz, Gran, Hendricks & Reina, P.A.

28

DOUGLAS E. FELDMAN, M.D.

DOB: 05/23/48

Trustee 

1982

Managing partner of Feldman Otolaryngology, Head and Neck Surgery in Washington, D.C. A graduate of Harvard Medical School, he is Associate Professor of Otolaryngology, Head and Neck Surgery at Georgetown University and George Washington University Medical School, and past Chairman of the Department of Otolaryngology, Head and Neck Surgery at the Washington Hospital Center. He is included in The Best Doctors in America.

12

PETER W. GAVIAN, CFA, ASA

DOB: 12/08/32

Trustee

1980

Since 1976, President of Corporate Finance of Washington, Inc., a business appraisal firm. He is a Chartered Financial Analyst and an Accredited senior appraiser (business evaluation).

12

JOHN GUFFEY, JR.

DOB: 05/15/48

Trustee 

1976

Treasurer and Director of Silby, Guffey and Co., Inc. a venture capital firm.

20

Ariel Funds

Calvert Foundation

Calvert Ventures, LLC

M. CHARITO KRUVANT

DOB: 12/08/45

Trustee

1996

President and CEO of Creative Associates International, Inc., a firm that specializes in human resources development, information management, public affairs and private enterprise development.

28

Acacia Federal Savings Bank

ARTHUR J. PUGH

DOB: 09/24/37

Trustee 

1982

Retired executive.

28

Acacia Federal Savings Bank

BARBARA J. KRUMSIEK

DOB: 08/09/52

(interested Trustee)

Trustee & President 

 

1997

President, Chief Executive Officer and Vice Chairman of Calvert Group, Ltd.  Prior to joining Calvert in 1997, Ms. Krumsiek had served as a Managing Director of Alliance Fund Distributors, Inc.

37

Calvert Foundation

DAVID R. ROCHAT

DOB: 10/07/37

(interested Trustee)

Trustee & Senior Vice

President 

1980

Executive Vice President of Calvert Asset Management Company, Inc. and Director and President of Chelsea Securities, Inc.

12

Government Scientific Source, Inc.

Chelsea Securities, Inc.

D. Wayne Silby, Esq.

DOB: 07/20/48

(interested Trustee)

Trustee

 

1976

Mr. Silby is Chairman of GroupServe Foundation, a software company focused on collaborative tools for non-profit groups. He is an officer and director of Silby, Guffey and Co., Inc., a private investment company.

21

Ameritas Acacia Mutual Life Insurance Company

Calvert Foundation

Grameen Foundation USA

SUSAN walker Bender, Esq.

DOB: 01/29/59

Officer 

   

1988

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

IVY WAFFORD DUKE, Esq.

DOB: 09/07/68

Officer 

   

1996

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

Daniel K. Hayes

DOB: 09/09/50

Officer 

   

1996

Senior Vice President of Calvert Asset Management Company, Inc.

HUI PING HO, CPA

DOB: 01/06/65

Officer 

   

2000

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

Gregory J. Keifer

DOB: 08/22/64

Officer

2003

Compliance Officer and Assistant Secretary of the Funds. Prior to working at Calvert Group, Mr. Keifer was Assistant Director of Compliance with Legg Mason Wood Walker, Incorporated and a senior compliance analyst with BISYS Fund Services.

LANCELOT A. KING, Esq.

DOB: 07/19/70

Officer

2002

Assistant Secretary and Assistant General Counsel of Calvert Group, Ltd. Prior to working at Calvert Group, Mr. King was an associate with Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, and also with Kirkpatrick & Lockhart.

William M. Tartikoff, Esq.

DOB: 08/12/47

Officer 

   

1990

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

Ronald M. Wolfsheimer, CPA

DOB: 07/24/52

Officer 

   

1979

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

MICHAEL V. YUHAS JR., CPA

DOB: 08/04/61

Officer 

   

1999

Director of Fund Administration of Calvert Group, Ltd. and Fund Controller.

The address of 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.  Mr. Silby is an interested person of the Fund since he is a director of the parent company of the Fund's advisor.  Mr. Rochat is an interested person of the Fund since he is an officer and director of the Fund's advisor.

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


SUPPLEMENT TO

CLASS I (INSTITUTIONAL) SHARES PROSPECTUS

Calvert Social Investment Fund Portfolios

Calvert Social Index Fund

Calvert Large Cap Growth Fund

Calvert Capital Accumulation Fund

Calvert World Values International Equity Fund

Calvert New Vision Small Cap Fund

Calvert Income Fund

Calvert Short Duration Income Fund

Prospectus dated: January 31, 2003

Date of Supplement: June 9, 2003

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. 

Please note this change in the prospectus.

SUPPLEMENT TO

PROSPECTUS

Calvert Social Investment Fund (CSIF) Balanced Portfolio

CSIF Equity Portfolio

CSIF Enhanced Equity Portfolio

CSIF Bond Portfolio

CSIF Money Market Portfolio

Calvert Social Index Fund

Calvert Large Cap Growth Fund

Calvert Capital Accumulation Fund

Calvert World Values International Equity Fund

Calvert New Vision Small Cap Fund

Date of Prospectus: January 31, 2003 as revised June 30, 2003

Class I (Institutional) Shares

(All Portfolios)

Date of Prospectus: January 31, 2003

Calvert Income Fund

Calvert Short Duration Income Fund

Date of Prospectus: January 31, 2003 as revised September 15, 2003

CALVERT VARIABLE SERIES, INC.

PROSPECTUS

Calvert Social Balanced Portfolio

Calvert Income Portfolio

Date of Prospectus: April 30, 2003

Date of This Supplement: October 30, 2003

Please replace the second paragraph under "About Calvert" with the following: (for Calvert Variable Series Social Balanced and Income Portfolios replace the third paragraph under "The Fund and Its Management" with the following:)

Steven Falci serves as Calvert's Chief Investment Officer, Equities and oversees the investment strategy and management of all Calvert equity and balanced portfolios.  Calvert uses a team approach to its management of the fixed-income portfolios.  Gregory Habeeb heads this team for Calvert's taxable fixed-income portfolios. Mr. Habeeb has over 20 years of experience as an analyst, trader, and portfolio manager.  Matt Nottingham is also a member of the fixed-income management team. Mr. Nottingham has 7 1/2 years of experience as an analyst, trader, and portfolio manager.

Calvert New Vision Small Cap Fund

To Open an Account

800-368-2748

Yields and Prices

Calvert Information Network

(24 hours, 7 days a week)

800-368-2745

Service for Existing Account

Shareholders: 800-368-2745

Brokers: 800-368-2746

TDD for Hearing Impaired

800-541-1524

Branch Office

4550 Montgomery Avenue

Suite 1000 North

Bethesda, Maryland 20814

Registered, Certified

or Overnight Mail

Calvert Group

c/o BFDS

330 West 9th Street

Kansas City, MO 64105

Web Site

http://www.calvert.com

Principal Underwriter

Calvert Distributors, Inc.

4550 Montgomery Avenue

Suite 1000 North

Bethesda, Maryland 20814

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

Calvert's Family of Funds

Tax-Exempt Money Market Funds

CTFR Money Market Portfolio

CTFR California Money Market Portfolio

Taxable Money Market Funds

First Government Money Market Fund

CSIF Money Market Portfolio

Balanced Fund

CSIF Balanced Portfolio

Municipal Funds

CTFR Limited-Term Portfolio

CTFR Long-Term Portfolio

CTFR Vermont Municipal Portfolio

National Muni. Intermediate Portfolio

California Muni. Intermediate Portfolio

Taxable Bond Funds

CSIF Bond Portfolio

Income Fund

Short Duration Income Fund

Equity Funds

CSIF Enhanced Equity Portfolio

CSIF Equity Portfolio

Calvert Large Cap Growth Fund

Capital Accumulation Fund

CWV International Equity Fund

New Vision Small Cap Fund

Calvert Social Index Fund

printed on recycled paper using soy-based inks

<PAGE>

Item 2.  Code of Ethics.

(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 Trustees has determined that M. Charito Kruvant, an "independent" Trustee 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 Trustees in the absence of such designation or identification.







Item 4.  Principal Accountant Fees and Services.






            Applicable only for annual reports covering fiscal years ending on or after December 15, 2003.







Item 5.  Audit Committee of Listed Registrants.






            Not applicable.






Item 6.  [Reserved]









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






            Not applicable.






Item 8.  [Reserved]






Item 9.  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 most recent fiscal half-year that has materially
affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.






Item 10.  Exhibits.






(a)(1)   Code of Ethics.







(a)(2)   Certifications of principal executive officer and principal financial




            officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.







(b)      Certifications of principal executive officer and principal financial




         officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002.










SIGNATURES






            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.









THE CALVERT FUND






By:       /s/  Barbara Krumsiek



            Barbara Krumsiek



            President -- Principal Executive Officer






Date: November 25, 2003









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









            /s/  Barbara Krumsiek



            Barbara Krumsiek



            President -- Principal Executive Officer






Date: November 25, 2003









            /s/  Ronald
Wolfsheimer      



             Ronald Wolfsheimer



            Treasurer -- Principal Financial Officer






Date: November 30, 2003