<PAGE>
The Eaton Vance Mutual Funds Trust
For the Tax-Managed Growth Portfolio
Annual Shareholder Report
October 31, 1996
Investment Adviser of Tax-Managed Growth Portfolio
Boston Management and Research
24 Federal Street
Boston, MA 02110
Fund Administrator
Eaton Vance Management
24 Federal Street
Boston, MA 02110
Principal Underwriter
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 482-8260
Custodian
Investors Bank & Trust Company
89 South Street
P.O. Box 1537
Boston, MA 02205-1537
Transfer Agent
First Data Investor Services Group, Inc.
Bos 725
P.O. Box 1559
Boston, MA 02104
<PAGE>
--------------------------------
TAX-MANAGED GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1996
- --------------------------------------------------------------------------
COMMON STOCKS - 97.9%
- --------------------------------------------------------------------------
NAME OF COMPANY SHARES VALUE
- --------------------------------------------------------------------------
ADVERTISING - 0.5%
Interpublic Group of Cos., Inc. 106,000 $ 5,141,000
------------
AEROSPACE & DEFENSE - 2.1%
Boeing Co. 90,370 $ 8,619,039
Raytheon Co. 226,544 11,157,292
------------
$ 19,776,331
------------
BANKS - 1.0%
BankAmerica Corp. 20,812 $ 1,904,298
Citicorp 40,000 3,960,000
First Chicago NBD Corp. 43,007 2,193,353
Wells Fargo & Co. 4,265 1,139,288
------------
$ 9,196,939
------------
BEVERAGES - 6.4%
Anheuser-Busch Cos., Inc. 210,260 $ 8,095,010
Coca-Cola Co. 478,208 24,149,504
PepsiCo, Inc. 900,682 26,682,704
------------
$ 58,927,218
------------
BROADCAST & CABLE - 0.1%
Cox Communications Inc., Class A* 93,319 $ 1,726,402
------------
BUILDING MATERIALS - 0.3%
Masco Corp. 55,540 $ 1,742,567
Stanley Works 40,490 1,143,843
------------
$ 2,886,410
------------
BUSINESS SERVICES - 2.3%
Automatic Data Processing Inc. 211,040 $ 8,784,540
Ecolab Inc. 132,620 4,840,630
Electronic Data Systems Corp. 110,000 4,950,000
Manpower Inc. 110,000 3,121,250
------------
$ 21,696,420
------------
CHEMICALS - 2.5%
Bayer AG Sponsored ADR 40,000 $ 1,512,548
Dow Chemical Co. 25,248 1,963,032
DuPont (E.I.) de Nemours & Co., Inc. 44,800 4,155,200
Monsanto Co. 396,680 15,718,445
------------
$ 23,349,225
------------
COMMUNICATIONS EQUIPMENT - 2.0%
Ericsson (L.M.) Telephone Co. 66,000 $ 1,823,250
Nokia Corp. 280,000 12,985,000
Northern Telecom Ltd. 55,870 3,638,534
------------
$ 18,446,784
------------
COMPUTER SOFTWARE - 1.1%
Microsoft Corp.* 20,000 $ 2,745,000
Oracle Systems Corp.* 180,000 7,616,250
------------
$ 10,361,250
------------
COMPUTER & BUSINESS EQUIPMENT - 5.1%
Bay Networks, Inc.* 200,000 $ 4,050,000
Cisco Systems, Inc.* 75,000 4,640,624
Digital Equipment Corp.* 41,620 1,227,790
Hewlett-Packard Co. 481,928 21,265,073
Imation Corp.* 2,628 71,942
International Business Machines Corp. 67,921 8,761,809
Xerox Corp. 160,000 7,420,000
------------
$ 47,437,238
------------
CONTAINERS & PACKAGING - 0.5%
Crown Cork & Seal Co., Inc. 100,000 $ 4,800,000
------------
DISTRIBUTION - 0.5%
Super Valu Stores Inc. 51,506 $ 1,532,304
Sysco Corp. 107,760 3,663,840
------------
$ 5,196,144
------------
DRUGS - 10.0%
Astra AB-Series A 420,000 $ 19,321,973
Astra AB-ADR Series B 60,000 2,741,994
Bristol-Myers Squibb Co. 56,860 6,012,945
Elan Corp., PLC (ADRs)* 300,000 8,325,000
Genentech, Inc.* 34,000 1,831,750
Merck & Co., Inc. 239,075 17,721,434
Pfizer Inc. 290,752 24,059,728
Schering-Plough Corp. 128,120 8,199,680
Smithkline Beecham PLC 37,520 2,349,690
Warner-Lambert Co. 51,644 3,285,850
------------
$ 93,850,044
------------
ELECTRIC UTILITIES - 0.1%
Citizen's Utilities Co., Class A* 55,411 $ 602,595
------------
ELECTRICAL EQUIPMENT - 2.0%
AMP Inc. 112,460 $ 3,809,582
Emerson Electric Co. 75,474 6,717,186
General Electric Co. 74,114 7,170,530
Lincoln Electric Co. 19,700 546,675
Lincoln Electric Co. Class A 19,700 541,750
------------
$ 18,785,723
------------
ELECTRICAL - SEMICONDUCTORS - 6.5%
Intel Corp. 505,796 $ 55,574,335
Texas Instruments Inc. 84,390 4,061,269
------------
$ 59,635,604
------------
ENGINEERING & CONSTRUCTION - 0.1%
Gilbert Associates Inc. Class A 78,125 $ 1,015,625
------------
ENTERTAINMENT - 0.2%
Disney (Walt) Co. 29,000 $ 1,910,375
------------
ENVIRONMENTAL SERVICES - 0.3%
WMX Technologies, Inc. 77,930 $ 2,678,844
------------
FINANCIAL - MISCELLANEOUS - 2.1%
American Express Co. 56,798 $ 2,669,506
Federal National Mortgage Association 303,820 11,886,958
MGIC Investment Corp. 75,000 5,146,875
------------
$ 19,703,339
------------
FOOD - 1.6%
Pioneer Hi-Bred International, Inc. 87,000 $ 5,839,875
Earthgrains Co. 4,204 222,812
McCormick & Co., Inc., Non-voting 375,208 9,051,893
------------
$ 15,114,580
------------
HEALTH SERVICES - 0.7%
Columbia/HCA Healthcare Corp. 180,000 $ 6,435,000
Medpartners, Inc.* 17,696 373,828
------------
$ 6,808,828
------------
HOUSEHOLD PRODUCTS - 3.5%
Colgate-Palmolive Co. 21,826 $ 2,007,991
Duracell International Inc. 100,000 6,675,000
Kimberly-Clark Corp. 57,310 5,344,158
Procter & Gamble Co. 170,800 16,909,200
Rubbermaid Inc. 78,920 1,834,890
------------
$ 32,771,239
------------
INDUSTRIAL EQUIPMENT - 3.0%
Dover Corp. 164,580 $ 8,455,297
General Signal Corp. 68,600 2,795,450
Goulds Pumps, Inc. 110,539 2,556,214
Illinois Tool Works Inc. 10,000 702,500
Parker-Hannifin Corp. 76,099 2,882,250
Tecumseh Products Co. Class A 167,090 9,398,813
Tecumseh Products Co. Class B 18,320 980,120
------------
$ 27,770,644
------------
INFORMATION SERVICES - 3.3%
Dun & Bradstreet Corp. 137,006 $ 7,929,222
Reuters Holdings PLC, ADR 310,090 23,062,944
------------
$ 30,992,166
------------
INSURANCE - 7.4%
American International Group, Inc. 206,633 $ 22,445,510
Chubb Corp. 101,050 5,052,500
General Re Corp. 112,446 16,557,671
Highlands Insurance Group* 5,070 100,133
Kansas City Life Insurance Co. 35,400 1,982,400
Marsh & McLennan Cos., Inc. 62,172 6,473,660
Progressive Corp. (The) 50,000 3,437,500
Providian Corp. 46,794 2,199,318
Provident Companies Inc. 18,789 697,542
Seafield Capital Corp. 35,960 1,269,838
St. Paul Cos., Inc. 130,280 7,083,975
Torchmark Corp. 31,425 1,520,184
------------
$ 68,820,231
------------
MEDICAL PRODUCTS - 6.6%
Abbott Laboratories 80,000 $ 4,050,000
Bausch & Lomb Inc. 145,574 4,913,121
Baxter International, Inc. 170,828 7,110,716
Boston Scientific Corp.* 255,000 13,865,625
Johnson & Johnson 449,040 22,115,220
Medtronic, Inc. 72,000 4,635,000
Sofamor Danek Group, Inc.* 173,000 4,757,500
------------
$ 61,447,182
------------
METALS - 0.6%
Inco Ltd. 124,000 $ 3,937,000
Nucor Corp. 40,000 1,895,000
------------
$ 5,832,000
------------
NATURAL GAS UTILITIES - 0.4%
Enron Oil & Gas Co. 100,000 $ 2,575,000
Sonat, Inc. 27,200 1,339,600
------------
$ 3,914,600
------------
OIL & GAS - EXPLORATION & PRODUCTION - 2.2%
Anadarko Petroleum Corp. 161,000 $ 10,243,625
Apache Corp. 66,440 2,358,626
Louisiana Land & Exploration Corp. 25,000 1,421,875
Triton Energy Ltd.* 100,000 4,462,500
Union Pacific Resources Group, Inc. 79,796 2,194,386
------------
$ 20,681,012
------------
OIL & GAS - EQUIPMENT & SERVICES - 2.5%
Baker Hughes, Inc. 39,234 $ 1,397,711
Dresser Industries, Inc. 79,800 2,623,425
Halliburton Co. 50,700 2,870,888
Schlumberger Ltd. 168,393 16,691,956
------------
$ 23,583,980
------------
OIL & GAS - INTEGRATED - 3.1%
Amoco Corp. 47,928 $ 3,630,546
Atlantic Richfield Co. 20,883 2,766,998
Chevron Corp. 55,600 3,655,700
Exxon Corp. 100,704 8,924,892
Mobil Corp. 74,333 8,678,378
Murphy Oil Corp. 29,700 1,466,437
------------
$ 29,122,951
------------
PAPER & FOREST PRODUCTS - 1.0%
Allegiance Corp.* 22,661 $ 424,894
Champion International Corp. 41,484 1,804,554
Union Camp Corp. 80,309 3,915,064
Weyerhaeuser Co. 61,630 2,827,276
------------
$ 8,971,788
------------
PHOTOGRAPHY - 1.0%
Eastman Kodak Co. 122,181 $ 9,743,935
------------
PRINTING & BUSINESS FORMS - 1.1%
American Business Products Inc. GA 146,497 $ 3,259,558
Bowne & Co. Inc. 91,770 2,145,124
Deluxe Corp. 57,150 1,864,519
Donnelley, (R.R.) & Sons Co. 47,896 1,454,841
Harland, (John H.) Co. 51,540 1,604,183
Moore Corp., Ltd. 19,075 386,268
------------
$ 10,714,493
------------
PUBLISHING - 2.7%
Gannett Co., Inc. 130,450 $ 9,897,894
Harcourt General, Inc. 90,000 4,477,500
Houghton Mifflin Co. 63,700 3,161,113
McGraw-Hill Inc. 25,608 1,200,375
Times Mirror Co. Class A 151,670 7,014,737
------------
$ 25,751,619
------------
RESTAURANTS - 0.7%
McDonald's Corp. 143,100 $ 6,350,063
------------
RETAIL - GENERAL - 0.8%
Wal-Mart Stores, Inc. 274,390 $ 7,305,634
------------
RETAIL - FOOD & DRUG - 0.6%
Albertson's, Inc. 156,048 $ 5,364,150
------------
RETAIL - SPECIALTY & APPAREL - 2.5%
Home Depot, Inc. (The) 255,000 $ 13,961,250
Toys 'R' Us, Inc.* 287,075 9,724,666
------------
$ 23,685,916
------------
SPECIALTY - CHEMICALS & MATERIALS - 6.1%
Corning Inc. 100,000 $ 3,875,000
Dexter Corp. 47,829 1,482,697
Dionex Corp.* 181,070 6,925,928
Great Lakes Chemical Corp. 68,720 3,582,030
International Flavors & Fragrances, Inc. 148,101 6,127,679
International Specialty Products Inc.* 59,000 641,625
Loctite Corp. 177,167 10,386,415
Memtec Ltd. Sponsored ADR 77,500 2,644,688
Millipore Corp. 151,440 5,300,400
Minnesota Mining & Manufacturing Co. 26,288 2,014,318
Nalco Chemical Co. 196,020 7,130,228
Sealed Air Corp.* 180,000 6,997,500
------------
$ 57,108,508
------------
TOBACCO - 0.0%
Schweitzer-Mauduit International Inc. 5,731 $ 176,228
------------
TRANSPORTATION - 0.8%
CSX Corp. 15,270 $ 658,519
Flightsafety International, Ltd. 35,000 1,728,125
Union Pacific Corp. 94,210 5,287,536
------------
$ 7,674,180
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST, $237,105,867) $916,829,437
------------
- --------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS - 2.1%
- --------------------------------------------------------------------------
NAME OF COMPANY FACE AMOUNT VALUE
- --------------------------------------------------------------------------
Ford Motor Credit Company,
5.35%, due 11/6/96 $10,000,000 $ 9,992,570
Prudential Funding Corporation,
5.60%, due 11/1/96 9,626,000 9,626,000
------------
TOTAL SHORT-TERM OBLIGATIONS,
AT AMORTIZED COST $ 19,618,570
------------
TOTAL INVESTMENTS (IDENTIFIED COST,
$256,724,437) - 100% $936,448,007
OTHER ASSETS, LESS LIABILITIES - 0.0% 351,563
------------
NET ASSETS - 100% $936,799,570
============
*Non-income producing security.
See notes to financial statements
<PAGE>
--------------------------------
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
- ----------------------------------------------------------------------------
October 31, 1996
- ----------------------------------------------------------------------------
ASSETS:
Investments, at value (Note 1A) (identified cost,
$256,724,437) $936,448,007
Cash 30,274
Receivable for investments sold 504,059
Dividends receivable 572,932
Deferred organization expenses (Note 1C) 8,879
Other assets 64,669
------------
Total assets $937,628,820
LIABILITIES:
Payable for investments purchased $798,425
Payable to affiliate --
Trustees' fees (Note 2) 1,406
Accrued expenses 29,419
--------
Total liabilities 829,250
------------
NET ASSETS APPLICABLE TO INVESTORS' INTEREST IN PORTFOLIO $936,799,570
============
SOURCES OF NET ASSETS:
Net proceeds from capital contributions and
withdrawals $257,075,830
Unrealized appreciation of investments (computed
on the basis of identified cost) 679,723,740
------------
Total $936,799,570
============
See notes to financial statements
<PAGE>
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the period from the start of business, December 1, 1995, to October 31, 1996
- --------------------------------------------------------------------------------
INVESTMENT INCOME (NOTE 1B):
Income --
Dividends (net of foreign withholding taxes of $25,573) $ 4,931,924
Interest 442,263
-----------
Total income $ 5,374,187
Expenses --
Investment adviser fee (Note 2) $ 2,116,576
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 9,500
Custodian fee 125,097
Legal and accounting services 1,200
Amortization of organization expenses (Note 1C) 2,007
Miscellaneous 15,099
-----------
Total expenses 2,269,479
-----------
Net investment income $ 3,104,708
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments, computed on
the basis of identified cost $ 9,582,500
Unrealized appreciation of investments 70,637,961
-----------
Net realized and unrealized gain on
investments 80,220,461
-----------
Net increase in net assets from operations $83,325,169
===========
See notes to financial statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the period from the start of business, December 1, 1995, to October 31, 1996
- --------------------------------------------------------------------------------
INCREASE IN NET ASSETS:
From operations --
Net investment income $ 3,104,708
Net realized gain on investments 9,582,500
Unrealized appreciation of investments 70,637,961
------------
Net increase in net assets from operations $ 83,325,169
------------
Capital transactions --
Contributions $871,076,582
Withdrawals (17,702,191)
------------
Increase in net assets from capital transactions $853,374,391
------------
Total increase in net assets $936,699,560
NET ASSETS:
At beginning of period 100,010
------------
At end of period $936,799,570
============
- --------------------------------------------------------------------------------
SUPPLEMENTARY DATA
- --------------------------------------------------------------------------------
For the period from the start of business, December 1, 1995, to October 31, 1996
- --------------------------------------------------------------------------------
RATIOS (AS A PERCENTAGE OF NET ASSETS):
Expenses 0.66%+
Net investment income 0.91%+
PORTFOLIO TURNOVER 6%
AVERAGE COMMISSION RATE PAID(1) $0.0585
+ Annualized.
(1) Average commission rate paid is computed by dividing the total dollar amount
of commissions paid during the fiscal year by the total number of shares
purchased and sold during the fiscal year for which commissions were
charged.
See notes to financial statements
<PAGE>
--------------------------------
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
Tax-Managed Growth Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The Portfolio, which was organized as a trust under the laws of the
State of New York on December 1, 1995, seeks to provide long-term after-tax
returns by investing in a diversified portfolio of equity securities. The
Declaration of Trust permits the Trustees to issue interests in the Portfolio.
Investment operations began on December 1, 1995, with the acquisition of
investments with a value of $115,586,248, including unrealized appreciation of
$96,618,064, in exchange for an interest in the Portfolio by one of the
Portfolio's investors. During the period, additional investors contributed
securities with a value of $639,241,121, including unrealized appreciation of
$512,467,715. The following is a summary of the significant accounting policies
followed by the Portfolio in preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
A. INVESTMENT VALUATIONS -- Marketable securities, including options, that are
listed on foreign or U.S. securities exchanges or in the NASDAQ National Market
System are valued at closing sale prices, on the exchange where such securities
are principally traded. Futures positions on securities or currencies are
generally valued at closing settlement prices. Unlisted or listed securities for
which closing sale prices are not available are valued at the mean between the
latest bid and asked prices. Short-term debt securities with a remaining
maturity of 60 days or less are valued at amortized cost, which approximates
value. Other fixed income and debt securities, including listed securities and
securities for which price quotations are available, will normally be valued on
the basis of valuations furnished by a pricing service. Investments for which
valuations or market quotations are unavailable are valued at fair value using
methods determined in good faith by or at the direction of the Trustees.
B. INCOME TAXES -- The Portfolio is treated as a partnership for Federal tax
purposes. No provision is made by the Portfolio for federal or state taxes on
any taxable income of the Portfolio because each investor in the Portfolio is
ultimately responsible for the payment of any taxes on its share of such income.
Since some of the Portfolio's investors are regulated investment companies that
invest all or substantially all of their assets in the Portfolio, the Portfolio
normally must satisfy the applicable source of income and diversification
requirements (under the Internal Revenue Code) in order for its investors to
satisfy them. The Portfolio will allocate, at least annually among its
investors, each investor's distributive share of the Portfolio's net investment
income, net realized capital gains, and any other items of income, gain, loss,
deduction or credit.
C. DEFERRED ORGANIZATION EXPENSES -- Costs incurred by the Portfolio in
connection with its organization, are being amortized on the straight-line
basis over five years.
D. FUTURES CONTRACTS -- Upon the entering of a financial futures contract, the
Portfolio is required to deposit either in cash or securities an amount
("initial margin") equal to a certain percentage of the purchase price indicated
in the financial futures contract. Subsequent payments are made or received by
the Portfolio ("margin maintenance") each day, dependent on daily fluctuations
in the value of the underlying security, and are recorded for book purposes as
unrealized gains or losses by the Portfolio. The Portfolio's investment in
financial futures contracts is designed to hedge against anticipated future
changes in price of current or anticipated portfolio positions. Should prices
move unexpectedly, the Portfolio may not achieve the anticipated benefits of the
financial futures contracts and may realize a loss.
E. OTHER -- Investment transactions are accounted for on the date the
investments are purchased or sold. Dividend income is recorded on the ex-
dividend date. However, if the ex-dividend date has passed, certain dividends
from foreign securities are recorded as the Portfolio is informed of the ex-
dividend date. Interest income is recorded on the accrual basis.
F. USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expense during the reporting period. Actual results could differ
from those estimates.
G. EXPENSE REDUCTION -- Investors Bank & Trust Company (IBT) serves as custodian
of the Portfolio. Pursuant to the custodian agreement, IBT receives a fee
reduced by credits which are determined based on the average daily cash balances
the Portfolio maintains with IBT. All significant credit balances used to reduce
the Portfolio's custodian fees are reported as a reduction of expenses on the
Statement of Operations.
- -------------------------------------------------------------------------------
(2) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The investment adviser fee is earned by Boston Management and Research (BMR), a
wholly-owned subsidiary of Eaton Vance Management (EVM), as compensation for
management and investment advisory services rendered to the Portfolio. Under the
advisory agreement, BMR receives a monthly advisory fee of 5/96 of 1% (0.625%
annually) of the average daily net assets of the Portfolio up to $500,000,000,
and at reduced rates as daily net assets exceed that level. For the period from
the start of business, December 1, 1995, to October 31, 1996 the adviser fee was
0.618% of the Portfolio's average net assets (annualized). Except as to Trustees
of the Portfolio who are not members of EVM's or BMR's organization, officers
and Trustees receive remuneration for their services to the Portfolio out of
such investment adviser fee. Trustees of the Portfolio that are not affiliated
with the Investment Adviser may elect to defer receipt of all or a percentage of
their annual fees in accordance with the terms of the Trustees Deferred
Compensation Plan. For the period ended October 31, 1996, no significant amounts
have been deferred. Certain of the officers and Trustees of the Portfolio are
officers or directors/trustees of the above organizations.
- -------------------------------------------------------------------------------
(3) INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than short-term obligations,
aggregated $119,106,410 and $20,535,675, respectively.
- -------------------------------------------------------------------------------
(4) FEDERAL INCOME TAX BASIS OF INVESTMENT
The cost and unrealized appreciation (depreciation) in value of the
investments owned at October 31, 1996, as computed on a federal income tax
basis, are as follows:
Aggregate cost $256,724,437
============
Gross unrealized appreciation $682,343,179
Gross unrealized depreciation 2,619,609
------------
Net unrealized appreciation $679,723,570
============
- -------------------------------------------------------------------------------
(5) FINANCIAL INSTRUMENTS
The Portfolio may trade in financial instruments with off-balance sheet risk in
the normal course of its investing activities to assist in managing exposure to
various market risks. These financial instruments include written options,
forward foreign currency exchange contracts and financial futures contracts and
may involve, to a varying degree, elements of risk in excess of the amounts
recognized for financial statement purposes.
The notional or contractual amounts of these instruments represent the
investment the Portfolio has in particular classes of financial instruments and
does not necessarily represent the amounts potentially subject to risk. The
measurement of the risks associated with these instruments is meaningful only
when all related and offsetting transactions are considered.
The Portfolio did not have any open obligations under these financial
instruments at October 31, 1996.
- -------------------------------------------------------------------------------
(6) LINE OF CREDIT
The Portfolio participates with other portfolios and funds managed by BMR and
EVM and its affiliates in a $120 million unsecured line of credit agreement with
a bank. Borrowings will be made by the Portfolio solely to facilitate the
handling of unusual and/or unanticipated short-term cash requirements. Interest
is charged to each portfolio or fund based on its borrowings at the bank's base
rate or an amount above either the bank's adjusted certificate of deposit rate,
a Eurodollar rate, or a federal funds effective rate. In addition, a fee
computed at an annual rate of 0.15% on the average daily amount of the unused
portion of the facility is allocated among the participating funds and
portfolios at the end of each quarter. The Portfolio did not have any
significant borrowings or allocated fees during the period.
<PAGE>
INDEPENDENT AUDITORS' REPORT
- -------------------------------------------------------------------------------
TO THE TRUSTEES AND INVESTORS OF
TAX-MANAGED GROWTH PORTFOLIO:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments of Tax-Managed Growth Portfolio as of
October 31, 1996, the related statements of operations, changes in net assets,
and the supplementary data for the period from the start of business, December
1, 1995, to October 31, 1996. These financial statements and supplementary data
are the responsibility of the Trust's management. Our responsibility is to
express an opinion on these financial statements and supplementary data based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and supplementary data 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 the securities owned at October 31, 1996, by
correspondence with the custodian and brokers; where replies were not received
from brokers, we performed other audit procedures. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such financial statements and supplementary data present fairly,
in all material respects, the financial position of Tax-Managed Growth Portfolio
as of October 31, 1996, the results of its operations, the changes in its net
assets and its supplementary data for the period from the start of business,
December 1, 1995, to October 31, 1996, in conformity with generally accepted
accounting principles.
DELOITTE & TOUCHE LLP
BOSTON, MASSACHUSETTS
NOVEMBER 29, 1996
<PAGE>
------------------------------
INVESTMENT MANAGEMENT FOR TAX-MANAGED GROWTH PORTFOLIO
OFFICERS INDEPENDENT TRUSTEES
LANDON T. CLAY DONALD R. DWIGHT
President, Trustee President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
JAMES B. HAWKES
Vice President SAMUEL L. HAYES, III
Jacob H. Schiff Professor of
DUNCAN W. RICHARDSON Investment Banking, Harvard University
Vice President and Graduate School of Business Administration
Portfolio Manager
NORTON H. REAMER
JAMES L. O'CONNOR President and Director, United Asset
Treasurer Management Corporation
THOMAS OTIS JOHN L. THORNDIKE
Secretary Director, Fiduciary Company Incorporated
JACK L. TREYNOR
Investment Adviser and Consultant
