Update: Proposed Money Market Fund Mergers
IMPORTANT INFORMATION ABOUT
Calvert Tax-Free Reserves Money Market Portfolio
Calvert Money Market Portfolio
Calvert First Government Money Market Fund
Calvert Cash Reserves Institutional Prime Fund
Recently, the boards of directors of the Calvert Tax-Free Reserves Money Market Portfolio, the Calvert Money Market Portfolio, the Calvert First Government Money Market Fund, and the Calvert Cash Reserves Institutional Prime Fund voted to merge these portfolios into the Calvert Ultra-Short Income Fund (CULAX), a taxable bond fund with a variable NAV.
Pending shareholder approval, we expect these mergers to be finalized on or prior to December 31, 2013, with the completion of the mergers being staggered between late September 2013 and early December 2013. Shareholders will have their money market shares automatically replaced with Class A shares (at NAV) of the Calvert Ultra-Short Income Fund unless, prior to the completion of the applicable merger, they either liquidate their positions in the money market funds or transfer their assets in these funds to another Calvert fund.
Please note the following important information regarding the proposed mergers:
- As of June 6, 2013, the funds will no longer accept any new accounts.
- As of June 6, 2013, the funds will no longer accept orders for checks.
- On August 31, 2013, check writing or drafts against these funds will be terminated.
- Calvert will tentatively mail proxies to shareholders on or about August 9, 2013.
- A meeting for record-date shareholders to vote on the proposed mergers will be held on September 20, 2013.
Considerations for Shareholders
The proposed fund mergers present current Calvert money market fund shareholders with some important considerations as well as some potential benefits.
- The Calvert Ultra-Short Income Fund is not a money market fund and does not seek to maintain a per-share net asset value (NAV) of $1.00. The value of the Fund will fluctuate based on the Fund's investments. As a result, investment in the Fund entails risk including the possibility of loss of principal invested (see full risk disclosure below).
- The Calvert Ultra-Short Income Fund is not a tax-exempt fund. Shareholders of Calvert Tax-Free Reserves Money Market Portfolio should consult with their tax professionals when considering whether to have their shares transferred to the Calvert Ultra-Short Income Fund.
- Shareholders should fully evaluate the suitability of the Calvert Ultra-Short Income Fund as an allocation within their overall portfolio strategy.
- Calvert Ultra-Short Income Fund normally imposes a two-percent short-term trading fee on redemptions and exchanges made within seven days of purchase, however, the redemption fee will be waived for all initial transfers. After that, however, the Fund's short-term trading fee will apply to new purchases.
- No Calvert fund will offer check writing following the completion of the proposed mergers.
- In today's low-yield environment, very short-term fixed-income securities may provide the potential for higher-than-cash returns, albeit with some additional risk.
- All shares will transfer to the Calvert Ultra-Short Income Fund at NAV, and, all subsequent purchases of fund shares in the same account will also be exempt from sales charges.
- As part of Calvert's ongoing environmental, social, and governance (ESG) integration efforts, Calvert Ultra-Short Income Fund seeks to avoid investing in tobacco companies.
About the Calvert Ultra-Short Income Fund
The Calvert Ultra-Short Income Fund seeks to maximize income consistent with preservation of capital, through investment in short-term bonds and income-producing securities.
The Fund's management team seeks to add value by emphasizing the following:
- Principal preservation by limiting interest rate sensitivity and maintaining the portfolio's average duration in the ultra-short range (less than, or equal to, one year); typically it is maintained in the three- to four-month range.
- Current income by strategically allocating assets to variable-rate and investment-grade securities.
- Total return through an active portfolio management strategy, supported by rigorous credit analysis that seeks to invest in undervalued securities with capital appreciation potential.
- Avoiding investment in tobacco companies.
Investment in mutual funds involves risk, including possible loss of principal invested. You could lose money on your investment in the Fund or the Fund could underperform because of the following risks: the market prices of bonds held by the Fund may fall; individual investments of the Fund may not perform as expected; and/or the Fund's portfolio management practices may not achieve the desired result. Bond funds are subject to interest rate risk and credit risk. When interest rates rise, the value of fixed-income securities will generally fall. In addition, the credit quality of the securities may deteriorate, which could lead to default or bankruptcy of the issuer where the issuer becomes unable to pay its obligations when due. Because a significant portion of securities held by the Fund may have variable or floating interest rates, the amount of the Fund's monthly distributions to shareholders are expected to vary. Generally when market interest rates fall, the amount of the distributions will decrease. Investments in high-yield, high risk bonds can involve a substantial risk of loss. An active trading style can result in higher turnover (exceeding 100%), may translate to higher transaction costs, may increase your tax liability, and may affect Fund performance. The Fund is nondiversified and may be more volatile than a diversified fund.
For more information on any Calvert fund, please contact Calvert at 800.368.2748 for a free summary prospectus and/or prospectus. An investor should consider the investment objectives, risks, charges, and expenses of an investment carefully before investing. The summary prospectus and prospectus contain this and other information. Read them carefully before you invest or send money.
Calvert mutual funds are underwritten and distributed by Calvert Investment Distributors, Inc. , member, FINRA, and a subsidiary of Calvert Investments, Inc.
For more information on the proposed mergers, please contact Calvert Client Services at 1-800-368-2745.
Additional Information and Where to Find It
In connection with the proposed reorganizations, The Calvert Fund will file with the Securities and Exchange Commission ("SEC"), and will furnish to the shareholders of the applicable Merging Portfolio, a prospectus/proxy statement and other relevant documents. These materials do not constitute a solicitation of any vote or approval. Shareholders of each Merging Portfolio are urged to read the prospectus/proxy statement when it becomes available and any other documents to be filed with the SEC in connection with the proposed reorganizations, or incorporated by reference in the prospectus/proxy statement, because they will contain important information about the proposed reorganizations.
Investors will be able to obtain a free copy of documents filed with the SEC at the SEC's website at http://www.sec.gov. In addition, investors may obtain a free copy of the SEC filings made by The Calvert Fund and each registered investment company of which a Merging Portfolio is a series (each, a "Merging RIC") by directing a request to:
Calvert Investments, Inc., Attention: Client Services, 4550 Montgomery Avenue, Suite 1125N, Bethesda, Maryland 20814; (800) 368-2745.
With respect to each Reorganization, The Calvert Fund, each Merging RIC and their trustees and officers may be deemed to be "participants" in the solicitation of proxies from shareholders of the applicable Merging Portfolio in favor of that Reorganization. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of the shareholders of each Merging Portfolio is set forth in the Statement of Additional Information dated January 31, 2013 or April 30, 2013, as applicable, of each Merging Portfolio, and in the Statement of Additional Information of Calvert Ultra-Short Income Fund dated January 31, 2013. These documents have been filed with the SEC and are available at www.calvert.com.