<PAGE>
The Eaton Vance Mutual Funds Trust
For the Tax-Managed Growth Portfolio
Semi-Annual Shareholder Report
April 30, 1997
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.
Attn: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
<PAGE>
TAX-MANAGED GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997
(UNAUDITED)
- -------------------------------------------------------------------------------
COMMON STOCKS - 94.7%
- -------------------------------------------------------------------------------
NAME OF COMPANY SHARES VALUE
- -------------------------------------------------------------------------------
ADVERTISING 1.3%
Interpublic Group Companies., Inc. 131,000 $ 7,417,875
Omnicom Group, Inc. 170,000 9,010,000
----------------
$ 16,427,875
----------------
AEROSPACE AND DEFENSE - 2.0%
Boeing Company (The) 155,370 $ 15,323,366
Raytheon Co. 226,544 9,882,982
----------------
$ 25,206,348
----------------
BANKS - REGIONAL - 1.2%
BankAmerica Corporation 20,812 $ 2,432,403
First Chicago NBD Corporation 43,007 2,419,139
Norwest Corporation 210,000 10,473,750
----------------
$ 15,325,292
----------------
BANKS AND MONEY SERVICES - 1.1%
Citicorp 115,000 $ 12,951,875
Wells Fargo & Co. 4,265 1,137,689
----------------
$ 14,089,564
----------------
BEVERAGES - 5.4%
Anheuser-Busch Cos., Inc. 210,260 $ 9,014,898
Coca-Cola Co. 430,883 27,414,930
PepsiCo, Inc. 896,292 31,258,183
----------------
$ 67,688,011
----------------
BROADCASTING AND CABLE - 0.2%
Cox Communications Inc., Class A* 93,319 $ 1,819,721
----------------
BUILDING MATERIALS - 0.3%
Masco Corporation 55,540 $ 2,096,635
Stanley Works (The) 40,490 1,574,049
----------------
$ 3,670,684
----------------
BUSINESS SERVICES - MISCELLANEOUS - 0.8%
ACNielson Corp. 45,669 $ 685,030
Cognizant Corp. 137,006 4,469,821
Manpower, Inc. 110,000 4,413,750
----------------
$ 9,568,601
----------------
CHEMICALS - 2.5%
Bayer AG Sponsored American
Depositary Receipt ADR 40,000 $ 1,591,528
Dow Chemical Co. (The) 25,248 2,142,924
E.I. Du Pont de Nemours & Co., Inc. 44,800 4,754,400
Illinois Tool Works, Inc. 10,000 913,750
Monsanto Co. 506,680 21,660,569
----------------
$ 31,063,171
----------------
COMMUNICATIONS EQUIPMENT - 2.0%
L.M. Ericsson Telephone Co. ADR 66,000 $ 2,219,250
Nokia Corp. ADR Class A 280,000 18,094,999
Northern Telecom Ltd. 55,870 4,057,559
----------------
$ 24,371,808
----------------
COMPUTER SOFTWARE - 2.1%
Computer Associates International, Inc. 195,000 $ 10,140,000
Digital Equipment Corp.* 37,680 1,125,690
Microsoft Corp.* 40,000 4,860,000
Oracle Corp.* 250,000 9,937,500
----------------
$ 26,063,190
----------------
COMPUTERS AND BUSINESS EQUIPMENT - 3.5%
Hewlett-Packard Co. 479,528 $ 25,175,219
Imation Corporation* 2,628 62,087
International Business Machines Corp. 53,051 8,527,948
Xerox Corp. 160,000 9,840,000
----------------
$ 43,605,254
----------------
CONTAINERS AND PACKAGING - 0.9%
Crown Cork & Seal Co., Inc. 215,000 $ 11,771,250
----------------
DISTRIBUTION - 0.9%
Supervalu, Inc. 51,506 $ 1,577,371
Sysco Corp. 277,760 9,860,480
----------------
$ 11,437,851
----------------
DRUGS - 10.4%
Allegiance Corporation* 22,661 $ 501,375
Amgen, Inc. 80,000 4,710,000
Astra AB Class A 420,000 17,184,384
Astra AB Class B 60,000 2,382,252
Bristol-Myers Squibb Co. 113,720 7,448,660
Elan Corp., PLC ADR* 330,000 11,220,000
Genentech, Inc.* 80,000 4,690,000
Genzyme Corp. 380,000 8,787,500
Merck & Co., Inc. 239,075 21,636,287
Pfizer, Inc. 290,752 27,912,191
Schering-Plough Corp. 138,120 11,049,600
Smithkline Beecham PLC ADR 37,520 3,025,050
Warner-Lambert Co. 94,644 9,275,112
----------------
$ 129,822,411
----------------
ELECTRIC UTILITIES - 0.1%
Citizens Utilities Corp., Class A* 57,198 $ 664,931
----------------
ELECTRICAL EQUIPMENT - 1.4%
Emerson Electric Co. 150,948 $ 7,660,611
General Electric Co. 74,114 8,217,390
Lincoln Electric Co. 19,700 758,450
Lincoln Electric Co. Class A 19,700 630,400
----------------
$ 17,266,851
----------------
ELECTRONICS - INSTRUMENTS - 1 0%
AMP Inc. 112,340 $ 4,030,198
Thermo Electron Corp. 250,000 8,625,000
----------------
$ 12,655,198
----------------
ELECTRONICS - SEMICONDUCTORS - 4.8%
Intel Corp. 343,948 $ 52,667,037
Texas Instruments, Inc. 84,390 7,531,808
----------------
$ 60,198,845
----------------
ENTERTAINMENT - 0.2%
Walt Disney Company (The) 26,600 $ 2,181,200
----------------
ENVIRONMENTAL SERVICES - 0.3%
Gilbert Associates, Inc. Class A 78,125 $ 1,035,156
WMX Technologies, Inc. 77,930 2,289,194
----------------
$ 3,324,350
----------------
FINANCIAL - MISCELLANEOUS - 2 5%
American Express Co. 76,798 $ 5,059,068
Federal National Mortgage Association 428,820 17,635,223
MGIC Investment Corp. 105,000 8,531,250
----------------
$ 31,225,541
----------------
FOODS - 1.5%
Earthgrains Company (The) 4,204 $ 240,679
McCormick & Co., Inc., Non-voting 229,298 5,417,165
Pioneer Hi-Bred International, Inc. 107,000 7,556,875
Unilever ADR 25,000 4,906,250
----------------
$ 18,120,969
----------------
HEALTH SERVICES - 0.1%
Covance, Inc. 31,250 $ 460,938
Medpartners, Inc.* 17,696 322,952
Quest Diagnostics, Inc. 15,625 275,391
----------------
$ 1,059,281
----------------
HOUSEHOLD PRODUCTS - 1.4%
Colgate-Palmolive Co. 21,826 $ 2,422,686
Gillette Company 90,400 7,684,000
Kimberley-Clark Corp. 114,620 5,874,275
Rubbermaid, Inc. 78,920 1,894,080
----------------
$ 17,875,041
----------------
INDUSTRIAL EQUIPMENT - 2.2%
Dover Corp. 164,580 $ 8,722,740
General Signal Corp. 68,600 2,692,550
Goulds Pumps, Inc. 110,539 4,034,674
Parker-Hannifin Corp. 76,099 3,785,925
Tecumseh Products Co. Class A 135,290 7,305,660
Tecumseh Products Co. Class B 5,000 260,000
----------------
$ 26,801,549
----------------
INFORMATION SERVICES - 3.6%
Automatic Data Processing, Inc. 326,040 $ 14,753,310
Dun & Bradstreet Corp. (The) 132,196 3,255,327
Electronic Data Systems Corp. 180,000 6,007,500
Reuters Holdings PLC, ADR 355,090 21,882,420
----------------
$ 45,898,557
----------------
INSURANCE - 8.7%
American International Group, Inc. 226,633 $ 29,122,340
Berkshire Hathaway Inc. Class A 50 1,900,000
Berkshire Hathaway Inc. Class B 21 26,691
Chubb Corporation 101,050 5,835,638
General RE Corp. 112,446 18,806,593
Highlands Insurance Group, Inc.* 5,070 89,359
Kansas City Life Insurance Co. 35,400 2,389,500
Marsh & McLennan Cos., Inc. 137,172 16,529,226
Mutual Risk Management Ltd. 165,000 6,063,750
Progressive Corp. 170,000 12,941,250
Provident Companies, Inc. 9,599 536,344
Providian Corp. 46,794 2,702,354
Seafield Capital Corp. 35,960 1,141,730
St. Paul Companies, Inc. (The) 130,280 8,728,760
Torchmark Corp. 31,425 1,952,278
----------------
$ 108,765,813
----------------
MEDICAL PRODUCTS - 6.3%
Abbott Laboratories 80,000 $ 4,880,000
Bausch & Lomb Inc. 145,574 5,877,550
Baxter International, Inc. 265,828 12,726,516
Boston Scientific Corporation* 255,000 12,303,750
Johnson & Johnson 449,040 27,503,699
Medtronic, Inc. 122,000 8,448,500
Sofamor Danek Group, Inc.* 173,000 6,747,000
----------------
$ 78,487,015
----------------
METALS - INDUSTRIAL - 0.5%
Inco Ltd 124,000 $ 3,968,000
Nucor Corp. 40,000 1,990,000
----------------
$ 5,958,000
----------------
METALS AND MINERALS - 0.7%
Potash Corp. of Saskatchewan 120,000 $ 9,225,000
----------------
OIL AND GAS - EQUIPMENT AND SERVICES - 2.4%
Baker Hughes, Inc. 39,234 $ 1,353,573
Chevron Corporation 55,600 3,808,600
Dresser Industries, Inc. 79,800 2,384,025
Halliburton Company 50,700 3,580,688
Schlumberger Ltd. 168,203 18,628,481
----------------
$ 29,755,367
----------------
OIL AND GAS - EXPLORATION AND PRODUCTION - 2.3%
Anadarko Petroleum Corp. 211,000 $ 11,578,625
Apache Corporation 156,440 5,318,965
Louisiana Land & Exploration Corp. 25,000 1,250,000
Triton Energy Ltd.* 230,000 8,452,500
Union Pacific Resources Co. 79,795 2,164,439
----------------
$ 28,764,529
----------------
OIL AND GAS - INTEGRATED - 2.5%
Amoco Corporation 47,928 $ 4,007,979
Atlantic Richfield Company 20,883 2,842,698
Enron Oil & Gas 100,000 1,862,500
Exxon Corp. 164,318 9,304,507
Mobil Corp. 74,333 9,663,290
Murphy Oil Corporation 29,700 1,291,950
Sonat Inc. 27,200 1,553,800
----------------
$ 30,526,724
----------------
PAPER AND FOREST PRODUCTS - 0 9%
Champion International Corp. 41,484 $ 1,929,006
Deltic Timber Corp. 8,486 215,325
Minnesota Mining & Manufacturing Co. 26,288 2,287,056
Union Camp Corp. 80,309 3,905,025
Weyerhauser Co. 61,630 2,819,573
----------------
$ 11,155,985
----------------
PHOTOGRAPHY - 1.0%
Eastman Kodak Co. 152,181 $ 12,707,114
----------------
PRINTING AND BUSINESS PRODUCTS - 0.8%
American Business Products, Inc. 146,497 $ 3,515,928
Bowne & Company 91,770 2,431,905
Deluxe Corporation 51,750 1,584,844
Donnelley & Sons 47,896 1,640,438
John H. Harland Co. 51,540 1,063,013
----------------
$ 10,236,128
----------------
PUBLISHING - 3.0%
Dow Jones & Co. 180,000 $ 7,290,000
Gannett Co., Inc. 130,450 11,381,763
Harcourt General Inc. 90,000 4,162,500
Houghton Mifflin Co. 63,700 3,575,163
McGraw-Hill Companies, Inc. (The) 60,608 3,083,432
Times Mirror Co. Class A 151,670 8,379,768
----------------
$ 37,872,626
----------------
REAL ESTATE INVESTMENT TRUST - 0.0%
SLH Corp. 8,990 $ 395,560
----------------
RESTAURANTS - 0.7%
McDonald's Corp. 168,100 $ 9,014,363
----------------
RETAIL - FOOD AND DRUG - 0.9%
Albertson's, Inc. 341,048 $ 11,254,584
----------------
RETAIL - GENERAL - 2.3%
Procter & Gamble Co. 166,600 $ 20,949,949
Wal-Mart Stores, Inc. 294,390 8,316,518
----------------
$ 29,266,467
----------------
RETAIL - SPECIALTY AND APPAREL - 2.2%
Home Depot, Inc. (The) 370,000 $ 21,459,999
Toys "R" Us, Inc.* 201,605 5,745,743
----------------
$ 27,205,742
----------------
SPECIALTY CHEMICALS AND MATERIALS - 5.3%
Corning, Inc. 125,000 $ 6,031,250
Dexter Corp. 47,829 1,428,891
Dionex Corp.* 181,070 8,849,796
Ecolab Inc. 132,620 5,404,265
Great Lakes Chemical Corp. 62,780 2,660,303
International Flavors & Fragrances, Inc. 148,101 6,238,755
International Specialty Products Inc.* 59,000 767,000
Memtec Ltd. ADR 77,500 1,792,188
Millipore Corporation 256,440 9,680,610
Nalco Chemical Co. 196,020 7,056,720
Sealed Air Corp.* 325,000 15,031,250
----------------
$ 64,941,028
----------------
TOBACCO - 0.0%
Schweitzer-Mauduit International, Inc. 5,731 $ 186,974
----------------
TRANSPORTATION - 0.5%
CSX Corp. 15,270 $ 711,964
Union Pacific Corp. 94,210 6,005,888
----------------
$ 6,717,852
----------------
TOTAL COMMON STOCKS
(IDENTIFIED COST, $423,651,466) $ 1,181,640,215
----------------
<PAGE>
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 5.1%
- --------------------------------------------------------------------------------
FACE AMOUNT
NAME OF COMPANY (000 OMITTED) VALUE
- -------------------------------------------------------------------------------
American General Finance Commercial
Paper, 5.65%, $ 20,000 $ 20,000,000
Cit Group Holdings Commercial Paper,
5.62%, 5/1/97 11,369 11,369,000
Ford Motor Credit Company Commercial
Paper, 5.50%, 5/7/97 13,000 12,988,083
Prudential Funding Commercial Paper,
5.50%, 5/7/97 20,000 19,981,667
----------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $64,338,750) $ 64,338,750
----------------
TOTAL INVESTMENTS - 99.8%
(identified cost $487,990,216) $1,245,978,965
----------------
- -------------------------------------------------------------------------------
LESS SECURITIES SOLD SHORT - 1.6%
- --------------------------------------------------------------------------------
NAME OF COMPANY SHARES VALUE
- -------------------------------------------------------------------------------
Intel Corp. 100,000 $ (15,312,500)
Hewlett-Packard Co. 100,000 (5,250,000)
----------------
TOTAL SECURITIES RECEIVED SOLD SHORT
(proceeds $20,873,654) $ (20,562,500)
----------------
OTHER ASSETS, LESS LIABILITIES
EXCLUDING SECURITIES SOLD SHORT - 1.8% $ 22,661,229
----------------
NET ASSETS - 100% $ 1,248,077,694
================
*Non-income producing security.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
- -------------------------------------------------------------------------------
April 30, 1997 (Unaudited)
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value (Note 1A) (identified cost,
$487,990,216) $1,245,978,965
Cash 40,630
Deposits with brokers for securities sold
short (Note 1E) 20,873,654
Receivable for investments sold 13,500
Dividends and interest receivable 1,713,885
Tax reclaim receivable 68,444
Deferred organization expenses (Note 1C) 7,800
--------------
Total assets $1,268,696,878
LIABILITIES:
Payable to affiliate --
Trustees' fees $ 1,912
Securities sold short, at value (proceeds
received of $20,873,654) (Note 1E) 20,562,500
Accrued expenses 54,772
-----------
Total liabilities 20,619,184
--------------
NET ASSETS APPLICABLE TO INVESTORS' INTEREST IN PORTFOLIO $1,248,077,694
==============
SOURCES OF NET ASSETS:
Net proceeds from capital contributions and
withdrawals $ 489,773,690
Unrealized appreciation of investments
(computed on the basis of identified cost) 758,304,004
--------------
Total $1,248,077,694
==============
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS (Continued)
STATEMENT OF OPERATIONS
- -------------------------------------------------------------------------------
For the Six Months Ended April 30, 1997 (Unaudited)
- -------------------------------------------------------------------------------
INVESTMENT INCOME (NOTE 1B):
Income --
Dividends (net of foreign taxes withheld of,
$73,293) $ 7,748,085
Interest 1,233,595
------------
Total income $ 8,981,680
Expenses --
Investment adviser fee (Note 2) $ 3,154,717
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 12,632
Custodian fee 150,883
Legal and accounting services 41,163
Dividends on securities sold short 17,000
Amortization of organization expenses (Note 1C) 1,079
Miscellaneous 7,692
-----------
Total expenses 3,385,166
------------
Net investment income $ 5,596,514
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investment transactions
(identified cost basis) $ 41,834,150
Increase in unrealized appreciation --
Investments (identified cost basis) $78,269,110
Securities sold short 311,154
-----------
Net change in unrealized appreciation 78,580,264
------------
Net realized and unrealized gain $120,414,414
------------
Net increase in net assets from
operations $126,010,928
============
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
APRIL 30, 1997 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1996*
------------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 5,596,514 $ 3,104,708
Net realized gain 41,834,150 9,582,500
Increase in unrealized appreciation 78,580,264 70,637,961
-------------- ------------
Net increase in net assets from operations $ 126,010,928 $ 83,325,169
-------------- ------------
Capital transactions --
Contributions $ 244,553,683 $871,076,582
Withdrawals (59,286,487) (17,702,191)
-------------- ------------
Net increase in net assets from capital
transactions $ 185,267,196 $853,374,391
-------------- ------------
Total increase in net assets $ 311,278,124 $936,699,560
NET ASSETS:
At beginning of period 936,799,570 100,010
-------------- ------------
At end of period $1,248,077,694 $936,799,570
============== ============
* For the period from the start of business, December 1, 1995, to October 31, 1996.
</TABLE>
- -------------------------------------------------------------------------------
SUPPLEMENTARY DATA
- -------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1997 OCTOBER 31,
(UNAUDITED) 1996*
-------------- -----------
RATIOS (AS A PERCENTAGE OF NET ASSETS):
Expenses 0.62%+ 0.66%+
Net investment income gain 1.03%+ 0.91%+
PORTFOLIO TURNOVER 3% 6%
AVERAGE COMMISSION RATE (PER SHARE)(1) $0.0589 $0.0585
* For the period from the start of business, December 1, 1995, to October
31, 1996.
+ 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
(UNAUDITED)
- -------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
Tax-Managed Growth Portfolio (the Portfolio) is registered under the Investment
Company Act of 1940, as amended, 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. The following is a summary of significant accounting policies
consistently followed by the Portfolio in the preparation of its financial
statements. The polices 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. SECURITIES SOLD SHORT -- The Portfolio may sell securities short where it
owns an equal amount of the security sold short or another security convertible
or exchangeable for an equal amount of the security sold short (a short sale
against-the-box). The Portfolio may do this in anticipation of a decline in the
market price of the securities or in order to hedge portfolio positions. The
Portfolio will generally borrow the security sold in order to make delivery to
the buyer. Upon executing the transaction, the Portfolio records the proceeds as
deposits with brokers in the Statement of Assets and Liabilities and establishes
an offsetting payable for securities sold short for the securities due on
settlement. The security sold short is segregated as collateral for the short
position. The liability is marked to market and the Portfolio is required to pay
the lending broker any dividend or interest income earned while the short
position is open. A gain or loss is realized when the security is delivered to
the broker. The Portfolio may recognize a loss on the transaction if the market
value of the securities sold increases before the securities are delivered.
F. 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.
G. 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.
H. 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 reflected as a reduction of expenses on the
Statement of Operations.
I. INTERIM FINANCIAL INFORMATION -- The interim financial statements relating to
April 30, 1997 and for the six month period then ended have not been audited by
independent certified public accountants, but in the opinion of the Fund's
management, reflect all adjustments, consisting only of normal recurring
adjustments, necessary for the fair presentation of the financial statements.
- -------------------------------------------------------------------------------
(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 the level. For the six months
ended April 30, 1997 the adviser fee was 0.58% 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 six months ended April
30, 1997, 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 $225,853,920 and $36,084,420, respectively.
- -------------------------------------------------------------------------------
(4) FEDERAL INCOME TAX BASIS OF INVESTMENT
The cost and unrealized appreciation (depreciation) in value of the investments
owned at April 30, 1997, as computed on a federal income tax basis, are as
follows:
Aggregate cost $487,990,216
============
Gross unrealized appreciation $762,365,329
Gross unrealized depreciation (4,376,580)
------------
Net unrealized appreciation $757,988,749
============
- -------------------------------------------------------------------------------
(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 had no obligations under these financial instruments at April
30, 1997.
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(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 group of banks. 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 federal funds rate. In addition, a fee
computed at an annual rate of 0.15% on the daily unused portion of the line of
credit is allocated among the participating portfolios and funds at the end of
each quarter. The Portfolio did not have any significant borrowings or allocated
fees during the six months ended April 30, 1997.
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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 Formerly Director, Fiduciary Company Incorporated
JACK L. TREYNOR
Investment Adviser and Consultant
