CALVERT TAX-FREE RESPONSIBLE IMPACT BOND FUND A: CTTLX C: CTTCX I: CTTIX Y: CTTYX

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1 Q3 INVESTMENT COMMENTARY CALVERT TAX-FREE RESPONSIBLE IMPACT BOND FUND A: CTTLX C: CTTCX I: CTTIX Y: CTTYX KEY TAKEAWAYS The municipal bond market provided welcomed stability in the third quarter amidst heightened global market volatility. High quality Fund holdings in education and housing performed well during the quarter. The positive community impacts of healthcare related investments are substantial and far-reaching. The municipal bond market presents attractive high quality tax free investments for long term investors. MARKET OVERVIEW Despite steady improvement in the labor market and strong housing data throughout the first half of, a continuing deceleration in growth was evident in a manufacturing slowdown, a decline in business spending, and unimpressive retail sales. Rather than contributing to a surge in spending, the windfall from lower gas prices has led to an increase in personal savings, which rose to 5.4 percent from 4.7 percent in the first quarter. Economists cited severe weather, disruption at West Coast ports, and residual seasonality as factors in the weak manufacturing output and a strong dollar was the catalyst for softer exports and weaker earnings for U.S. multinationals. Oil prices recovered from their fourth-quarter slump and have stabilized around $45 per barrel. The year began with energy companies racing to reduce their capital expenditures to control costs in light of the price decline. Despite the positive impact of lower oil prices on consumers, spending remained sluggish. OUR APPROACH The Calvert fixed income investment team employs a relative value discipline across our investment portfolios. Broad macroeconomic analysis drives our longer-term economic outlook, which helps set our high-conviction asset allocation preferences, which include investments outside our benchmarks. Our bottom-up security selection and sector weight targets result from integrating financial and nonfinancial fundamental analysis into our evaluation process. PORTFOLIO MANAGEMENT Thomas A. Dailey Fund since 2004 Industry since 1989 Globally, the macroeconomic picture remains one of anemic growth and low inflation or deflation. Aggressive monetary easing outside the U.S. the European Central Bank (ECB) announced 60 billion euros per month of quantitative easing (QE) in January pushed both global interest rates and non-u.s. dollar currencies lower. (The euro ended down 11.3 percent for the first half of.) U.S. interest rates rose for all maturities in the first half of the year. More recently, China s slowing economy, Fed uncertainty and collapsing commodity prices weighed heavily on global markets. On August 11,, China expanded the trading range for the yuan to let the currency devalue. This move triggered doubt worldwide about the Chinese government s ability to manage its slowing economy. Along with wild swings in the Chinese stock market, the devaluation caused a global selloff in risk assets, particularly in emerging markets, currencies and commodities. Global equities recorded one of their worst quarters since Q3 CALVERT TAX-FREE RESPONSIBLE IMPACT BOND FUND Investment Commentary 1

2 Domestically, the U.S. unemployment rate remained at 5.1% in September, a seven year low. GDP increased in the second quarter to 3.7%, after an increase of only 0.6% in the first quarter. Inflation remains in check with the core personal consumption expenditure index up 1.8% in the second quarter, from 1.0% in the first quarter. Despite the improving U.S. economy, the Federal Reserve did not raise interest rates in September due to recent global economic and financial developments. The weaker than expected September jobs report puts a rate hike in doubt. We continue to expect U.S. interest rates to remain low for the foreseeable future. PERFORMANCE REVIEW During the third quarter, Calvert Tax Free Responsible Impact Bond Fund (Class A shares at NAV) returned 1.43% versus the Barclays Municipal Bond Index, which returned 1.65%. Relatively short duration positioning detracted from fund Q3 Q2 Q performance during the third quarter. However, this was closely offset by strong security selection. Pre-refunded bonds that are escrowed in US government securities also enhanced performance. Further, holdings in housing and education benefited performance during the period. Performance Attribution Total Active Return Duration Yield Curve Positive Community Impact of Healthcare Investments Asset Allocation Security Selection Healthcare-related investments make sound financial Source: Calvert Investment Management, Inc., Barcap Point sense and benefit society by contributing to organizations that provide important services to communities, including medical care and research, preventative care, transportation, education, and various charitable services. In June, the Supreme Court upheld nationwide healthcare subsidies for the Affordable Care Act, which should have positive implications for the industry. The Calvert Tax-Free Responsible Impact Bond Fund has held an overweight position in healthcare bonds and has focused on large higher-grade nonprofit hospital systems that have substantial resources to guide them through a complex legislative and regulatory environment. Two examples of the various healthcare related investments in the Fund are: New Mexico State - Presbyterian Healthcare Services Revenue Bonds (3.18% of the Fund s net assets as of 9/30/15) The hospital system fulfills critical healthcare needs in New Mexico. In addition to its eight hospitals and network of physicians, it serves over 450,000 members through its Presbyterian Health Plan. It provides primary care services, cancer education, as well as more highly specialized medical services such as neonatal intensive care. As the market leader, it is the only vertically aligned hospital in the region and holds a 43% market share in the Albuquerque metro area. The hospital, in furtherance of its mission, also commits significant time and resources to endeavors and critical services that meet unfilled community needs. These activities include, but are not limited to, free health screenings, hospice programs, transportation, lodging, and meals. North Carolina State, Duke University Health System Revenue Bonds (2.97% of the Fund s net assets as of 9/30/15) Duke University Health Systems (DUHS) provides patient care, education of healthcare leaders, biomedical research, cancer centers, and vast research projects across many medical specialties. Owned by Duke University, DUHS is a renowned and prominent academic medical center with a history of strong financial management. The Health System also provides Portfolio Positioning Q3 Q2 Q1 Q3 CALVERT TAX-FREE RESPONSIBLE IMPACT BOND FUND Investment Commentary Total PRE/ETM Airport Higher Education Educational Health/Hospital Multifamily Housing Single Family Housing IDR/PCR Lease/COP Power Resource Recovery Special Tax Transportation Water & Sewer Other Revenue Local GO State GO Cash

3 numerous community-based charitable functions, including emergency services, education services, transportation, and preventative care, just to name a few. Clearly, the long-term benefits that health care organizations provide are substantial and resonate throughout their local communities. These investments not only offer a long term attractive rate of return but also serve a vital need and provide an indispensable social impact on the long-term viability of their respective communities. MARKET OUTLOOK: CERTAIN ABOUT UNCERTAINTY We expect the uncertainty and volatility to persist through this transition in policy. How long it lasts will largely depend once again on incoming economic data and how Federal Open Market Committee (FOMC) participants react. The dovish statement from the FOMC s September meeting has investors currently questioning more about underlying global macro fundamentals. Greater transparency behind policy decision-making has proven a useful tool in implementing post-crisis unconventional policy. However, it can result in markets placing too much focus on short-term outcomes. The 2013 taper tantrum was a great example of how extra transparency can give way to significant market dislocations. The FOMC is in a difficult position. On the one hand, it risks tightening too early amid weak global growth and low inflation. On the other hand, if it waits too long, it may undermine its credibility and control over potential asset bubbles. More importantly, waiting too long would jeopardize the progress it has made in recent months orchestrating an overall orderly tightening and managing expectations for an eventual lift-off. Some measures[i] show that financial conditions are the tightest since 2010, driven by a strong dollar, wider credit spreads, and generally weak risk asset performance. The brisk level of municipal bond issuance in began to slow during the third quarter, and since the municipal market is somewhat insulated from global market events, munis as an asset class have provided a port in the storm from the global market turmoil. We expect municipalities to continue to take advantage of low rates in order to refinance higher cost debt. Fiscally conservative state and local governments have largely curtailed the issuance of new money debt, although they will eventually need to address their significant and aging infrastructure needs. Additionally, cities and states that address their long term pension obligations in a fiscally prudent fashion will continue to benefit from low cost financing courtesy of the municipal bond market. Tax Free Municipal Bonds are an Attractive Asset Class In this environment of increasing taxes, we believe tax-exempt municipal bonds are an important component of fixed income asset allocation and offer compelling relative value. The ratio of longer-term munis relative to Treasury rates remains over 100%, even before taking into consideration the taxable equivalent yield. In light of changing demographics and increasing life expectancies, we believe munis can be a great fit for the impending surge of retirees seeking stable and dependable sources of tax-free income, with the added benefit of long-term positive impact on their communities. Yield AAA Munis vs Treasuries YR 5YR 7YR 10YR 20YR 30YR Tenor AAA Tax Exempt Yield AAA Taxable Equivalent 39.6% Tax Bracket AAA Taxable Equivalent 28% Tax Bracket Treasury Q3 CALVERT TAX-FREE RESPONSIBLE IMPACT BOND FUND Investment Commentary 3

4 Calvert Tax-Free Responsible Impact Bond Fund Effective July 15,, the Fund changed its name from Calvert Tax-Free Bond Fund to Calvert Tax-Free Responsible Impact Bond Fund. We believe this better reflects its increased focus on securities that meet its fundamental investment criteria and contribute to the long-term viability of the communities in which the Fund invests. These community impact bonds include investments that support affordable housing, prioritize education resources and provide assistance to children, the elderly and veterans, among others. In evaluating municipal bonds for purchase, the Fund also considers the environmental impact, social impact, governance impact, and how essential the underlying project is to the community. The Fund also restructured its expenses to result in a reduction in net fund operating expenses contractually guaranteed through April Average Annual Returns (%) for period ending 9/30/ QTD YTD 1 YR 3 YRS 5 YRS 10 YRS Since Fund Inception A Shares (No Charge) A Shares (3.75% Sales Charge) C Shares I Shares Y Shares Barclays Municipal Bond Index Lipper General & Insured Muni Debt Funds Index Expense Ratios Gross Net A Shares C Shares I Shares Y Shares Fund Inception Date (Class A Shares): 8/23/1983; Class C: 7/15/; Class I: 7/15/; Class Y: 7/15/. Net expense ratio reflects a contractual fee and/or expense reimbursement through April 30, The performance data quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than the performance data quoted. Performance assumes the reinvestment of all distributions, and reflects the deduction of fund expenses and applicable fees. Indices reflect no deductions for fees or expenses. An investor cannot invest directly in an index. Visit to obtain performance data current to the most recent month-end. Returns for periods of less than one year are not annualized. In the table above, performance results labeled Since Fund Inception are calculated from the date of inception of the fund's earliest class of shares (the "Fund Inception Date"). For share classes launched subsequent to the Fund Inception Date, returns prior to the share class' inception date are linked to the performance of that fund's Class A shares at NAV (i.e., without deduction of any front-end sales charge). Actual share class performance would have been lower (Class C) or higher (Class Y and Class I shares) for any such period, depending on whether that share class has higher or lower expenses than Class A shares. Additional Performance-Related Disclosures: Effective 7/13/2009, the Fund adopted a flexible duration strategy. Prior to 7/13/2009, the Fund emphasized investments in long-term fixed income securities and the Fund s historical returns reflect that strategy. Effective 7/15/, Calvert Tax-Free Bond Fund was renamed Calvert Tax-Free Responsible Impact Bond Fund to reflect the Fund s increased focus on impact investing. All views and opinions expressed represent the views and opinions of the author(s) as of the date of the writing and are subject to change without notice. These views and opinions are not intended to forecast future events or guarantee future results and do not constitute a recommendation or a solicitation to buy or sell any security. This information does not take into account the specific investment objective, financial situation, or specific needs of any individual, does not provide information reasonably sufficient upon which to base an investment decision and should not be Q3 CALVERT TAX-FREE RESPONSIBLE IMPACT BOND FUND Investment Commentary 4

5 relied upon as investment advice. This information has been obtained from sources believed to be reliable, but Calvert makes no representation as to its accuracy or completeness. All investments carry risk and not all strategies described may be suitable for all investors. Past performance does not guarantee future results. Performance Attribution is used to help explain the impact of the portfolio manager s investment decisions with respect to overall investment policy, asset allocation, security selection and activity. All measures represent the active return (outperformance or underperformance) relative to the Fund s passive benchmark. Total effect measures aggregate or total active return relative to the benchmark. Duration effect measures active return attributable to overall duration (a measure of a portfolio s sensitivity to changes in interest rates; generally, the longer the duration, the greater the change in value in response to a given change in interest rates). This measures the effect of a parallel shift either up or down in the entire yield curve. Yield Curve effect measures the active return attributable to yield curve positioning. This measures the effects of a change in the shape of the yield curve (a non-parallel shift). Asset Allocation effect measures the active return attributable to sector selection. Security Selection effect measures the active return attributable to security selection (includes intra-day trading). All fixed-income attribution measures are presented in basis points (one basis point is 0.01 percentage points), do not reflect fees and expenses and will vary from the Fund s actual return. Credit Ratings. Credit ratings are an estimate of the likelihood a bond will be repaid. The letter ratings generally range from AAA (judged to be of the highest quality, with minimal credit risk) to D (the lowest rated class of bonds, typically in default with respect to timely payment of principal or interest). Securities discussed in this Commentary are intended to illustrate the adviser s investment style, do not represent all securities purchased or sold for the Fund during the period, are no indication that investment in these securities was or would be profitable in the future, and are not recommendations to buy or sell. Portfolio holdings are subject to change at any time. Current and future holdings are subject to risk. 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. The prices of long-term bonds are more sensitive to changes in interest rates than the prices of short-term bonds. Therefore, in general, long-term bonds have more interest rate risk than short-term bonds. The Fund is non-diversified and may be more volatile than a diversified fund. Some income may be subject to state and local taxes and to the federal alternative minimum tax. Class I shares are offered with no sales charge and require an initial investment minimum of $1,000,000, which can be waived under certain circumstances. See a fund s Institutional Class prospectus for additional information. Class Y shares are generally available only to (1) wrap or similar fee-based programs offered by financial intermediaries; and (2) retirement plans, foundations, endowments and other consultant-driven business. Calvert funds are available at NAV for RIAs and Wrap Programs. Not all funds available at all firms. For more information on any Calvert fund, please contact your financial advisor, call Calvert at , or visit for a free summary prospectus and/or prospectus. An institutional investor should call Calvert at 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 subsidiary of Calvert Investments, Inc. PC Q3 CALVERT TAX-FREE RESPONSIBLE IMPACT BOND FUND Investment Commentary 5