For more than 25 years, Calvert has been committed to corporate responsibility—both in the way we invest and in the way we conduct our own business. Our trading policies are designed to benefit and protect the interests of our shareholders and reflect our belief that market timing is not in the best interest of shareholders.
In general, Calvert’s funds are designed for long-term investment and not as short-term trading (“market timing”) vehicles. Market timing can be disruptive to the portfolio management process and can raise fund expenses through increased trading and transaction costs.
Each day we review the trading activity across all Calvert funds to ensure that all transactions are within Calvert's trading guidelines, including prohibitions against market timing. If we determine a trade is in violation of these guidelines, we may, at our discretion, refuse the trade (purchase or exchange request only). However, there is no guarantee that Calvert will detect or prevent market timing activity.
Redemption Fees and Policies
In an effort to prevent market timing, Calvert’s funds (except our money market funds and VP portfolios) charge a 2% redemption fee on fund redemptions or exchanges made within 30 calendar days (seven days for Calvert Management Series and Calvert Ultra-Short Income Fund). There is an exception to this policy if the fund shares are held through an intermediary that has been authorized by fund management to apply its own redemption fee policy.
About Institutional Accounts
With regard to plan sponsor and institutional accounts, Calvert does not directly impose the redemption fee on retirement platforms or omnibus accounts; however, these groups are not excluded from enforcing the redemption fee policy. We have worked with these various platforms to generally ensure a redemption fee is applied either directly on their system or, if that is not feasible, the fee is applied manually to the underlying account.
In all cases, the redemption fee that is charged on these trades is paid to the applicable fund.
Trading and Selective Arrangements
Calvert has no selective market timing or trading arrangements with clients and seeks to strictly enforce SEC rules that stipulate that fund share purchase or sell orders received prior to 4 p.m. ET are required to be executed at that day's closing price. Orders received after 4 p.m. ET must be executed at the following day's closing price. This rule also applies to shareholders who place orders through intermediaries such as brokers and retirement plan platforms. These intermediaries are authorized to transmit their customer orders for Calvert funds at that day's closing price after 4 p.m. ET only if the intermediary received the orders prior to that time. At Calvert, we expect these intermediaries to enforce these rules strictly.
Calvert has contacted the broker/dealers and 401(k) platforms with whom we do business seeking their assurance that they do not accept orders for Calvert Funds at that day's closing price after 4 p.m. ET and to request that they review Calvert's clear policies prohibiting market timing. We have also required each of our employees to sign a pledge stating that they will not engage in market timing of Calvert funds.
These policies reflect our ongoing commitment to transparency and accountability in our operations and to protecting shareholder value in our funds. We also continue to support good governance practices and regulatory reforms that promote corporate responsibility and integrity within our own industry.
If you have any questions about Calvert's trading policies and practices, please refer to a fund’s Prospectus or call us at 800.368.2746.