<PAGE>
To Shareholders
EV Classic Growth Fund had a total return of 16.8% during the period from the
start of business on November 7, 1994 through August 31, 1995. That return was
the result of a rise in net asset value per share to $11.68 from $10.00 on
November 7, 1994. It does not include the effect of the Fund's contingent
deferred sales charge on redeeming shareholders. For comparison, the S&P 500
Stock Index - an unmanaged index of common stocks - had a total return of 23.8%
for the same period.
IF CYCLICAL EARNINGS HAVE PEAKED, INVESTORS MAY TURN ONCE AGAIN TO TRADITIONAL
GROWTH STOCKS...
While posting strongly positive performance in 1995, growth stocks have
nonetheless continued to underperform cyclical stocks for the past several
years. Naturally, a strong economy has tended to favor cyclical issues. In
addition, the downsizing and restructuring of recent years has enabled large
industrial companies to markedly improve their profit picture. That has provided
a difficult competitive environment for investors in growth stocks. Recently,
however, there have been signs that the picture for growth stocks may brighten.
AFTER A YEAR OF RATE HIKES, THE FEDERAL RESERVE MAY BE POISED TO LOWER RATES...
Throughout the expansion, the Federal Reserve has continued to fight inflation,
and those efforts appear to have paid off handsomely. Higher rates, growing
global competition and ample labor supply have kept inflation in the 2% range.
With inflation posing no immediate threat to economic growth, the Fed started
lowering interest rates in early July and has since expressed a bias for still
lower rates in the future. A declining interest rate environment has
traditionally been beneficial for the growth stock sector, usually resulting in
a significant expansion of price earnings multiples.
AN AGING RECOVERY MAY MEAN WEAKER CORPORATE PROFITS, BUT OPPORTUNITIES IN GROWTH
STOCKS...
Since the end of World War II, economic expansions in the U.S. have averaged 49
months in duration. The current expansion, dating to March 1991, has now lasted
55 months. Amid concerns that the aging recovery may result in weaker profits
for large cap cyclical companies, the growth sector is drawing increasing
interest from investors for its consistent earnings growth with less reliance on
the economic cycle. Naturally, it is impossible to predict accurately the
direction of the economy, and historical performance is no guarantee of future
trends.
Still, a focus on high-quality growth stocks has served investors well in the
past. We believe EV Classic Growth Fund will remain well positioned to benefit
from a potential market focus on growth stocks and to produce continuing, sound
long-term performance.
Sincerely,
/s/ James B. Hawkes
- -------------------
James B. Hawkes
President
October 20, 1995
<PAGE>
Management Discussion
An interview with Peter F. Kiely, Vice President and Portfolio Manager of Growth
Portfolio.
Q. PETER, THE FUND HAS HAD STRONGLY POSITIVE RETURNS IN THIS FISCAL YEAR. HOW
HAVE YOU STRUCTURED THE PORTFOLIO?
A. As I've reminded shareholders in the past, I tend not to structure the
Portfolio around a given economic outlook, unless there is an especially
compelling reason to do so. The flavor of the Portfolio remains very
company-specific, and once again, the Portfolio's holdings therefore tend to
represent a wide range of industries. Financial stocks remain the largest
single sector weighting, and these stocks have fared well as interest rates
have leveled out. Business products and services constitute another large
component of the Portfolio. Innovations in technology are driving many of
the restructurings in business today, and many more innovative products
appear on the horizon. The Portfolio also owns a number of stocks in the
media and leisure segments. The consolidation of the industry suggests that
these companies are growing more integrated and will provide a wider array
of media and broadcast services.
Q. FINANCIAL STOCKS HAVE BEEN A LARGE PART OF THE PORTFOLIO. WHAT DID YOU FIND
ATTRACTIVE ABOUT THE SECTOR?
A. In my view, the financial sector offers significant value at a time when
there appears to be anecdotal signs of weakening in the economy. There are
suggestions the Fed may lower rates in the near future. While those factors
constitute a favorable climate for financial stocks, the primary reason we
have owned the financial companies is that they have good growth
characterisitcs and good profitability. The fundamentals of the insurance
industry, for example, have improved significantly. American International
Group and General RE are prominent Portfolio investments.
Q. WHERE WAS THE PORTFOLIO UNDERWEIGHTED?
A. The Portfolio was underweighted in capital goods and retail stocks. These
companies tend to be relatively sensitive to the vagaries of the economy,
and therefore tend not to have classic growth characteristics. There are
concerns that corporate earnings may be weakening, and. therefore, capital
goods providers may experience less demand over the next few quarters. In
the retail area, consumers have overextended their credit limits, leaving
little room for much more discretionary spending.
Q. WHAT WERE SOME OF THE FUND'S STRONGER PERFORMERS DURING THE YEAR?
A. Interestingly, the Fund's stronger performers represented a wide spectrum of
the economy. Intel, the leading semiconductor company that has thrived amid
the surge in personal computer sales, rose nearly 87%. Triton Energy rose
53% on the strength of their discovery of vast reserves of oil and natural
gas in Colombia and off the coast of Thailand. And Microsoft, the leading
manufacturer of operating system software, increased 49% as the company
introduced its Windows 95 product.
Q. FOREIGN COMPANIES CONSTITUTE ABOUT 10% OF THE PORTFOLIO. HAVE YOU MADE A
DELIBERATE EFFORT TO EXPAND ABROAD?
A. Actually, no. We've simply found that some of these foreign companies have
very strong earnings prospects and should benefit from the economic growth
in emerging markets. For example, in the telecom sector, Nokia, of Finland,
and L.M. Ericsson, of Sweden, are two major players in the emerging phone
markets. A very small percentage of people in the emerging markets have
access to phones and these companies are well-positioned to provide
equipment and services. Reuters, of the U.K., is a diversified information
services company with a promising range of new products in the financial
trading and news gathering areas. Astra AB is a Swedish drug company that
ranks among the fastest growing pharmaceutical companies in the world.
Q. IN YOUR VIEW, PETER, WHAT IS THE OUTLOOK FOR GROWTH STOCKS IN THE YEAR
AHEAD?
A. Following the strong summer rally, the market has turned increasingly choppy
in the past month or so. I think that's a function of a growing uncertainty
over the strength of the economy and the future trend in earnings. In my
view, that provides an ideal opportunity for growth stocks. Companies with
consistent earnings growth are likely to find favor with investors in
periods of uncertainty. While past trends don't guarantee future results,
companies with growing earnings have historically rewarded investors over
the long haul. I believe growth stocks should continue to provide good
opportunities for patient investors.
- ---------------------------------------------------------
A CONTINUING EMPHASIS ON ABOVE-AVERAGE EARNINGS GROWTH...
THE PORTFOLIO'S 10 LARGEST HOLDINGS*:
Company Business
Astra AB A .......................... Drugs
American International Group ........ Insurance
Anadarko Petroleum. ................. Oil services
Triton Energy ....................... Oil & natural gas
General RE Corp. .................... Reinsurance
Reuters Holding PLC ................. Business services
Omnicom Group ....................... Advertising
Intel Corp. ......................... Semiconductors
CBS, Inc. ........................... Broadcasting
Millipore Corp. ..................... Separation Tech.
*The holdings above reprented 32% of the Portfolio's
investments by market value as of 8/31/95.
- ---------------------------------------------------------
<PAGE>
[GRAPHIC OMITTED: line chart.]
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
EV CLASSIC GROWTH FUND AND THE S & P 500
From November 30, 1994 through August 31, 1995
CUMULATIVE Life of
TOTAL RETURN Fund*
- -----------------------------
With CDSC 15.8%
Without CDSC 16.8%
- -----------------------------
date c. growth S&P 500
- ------------------------------------------------------------
11/94+ 10,000 10,000
12/94 10,010 10,197
1/95 10,050 10,444
2/95 10,464 10,821
3/95 10,737 11,186
4/95 10,787 11,499
5/95 11,019 11,917
6/95 11,352 12,251
7/95 11,625 12,640
8/95 11,786 12,636
Past performance is not indicative of future results. Investment returns and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Source: Towers Data Systems,
Bethesda, MD.
*Investment operations commenced on 11/7/94.
+Index information is available only at month-end; therefore, the line
comparison begins at the next month-end following the commencement of the
Fund's investment operations.
EV CLASSIC GROWTH FUND
Assumes entire investment was redeemed on 8/31/95 and maximuim applicable
contingent deferred sales charge (CDSC) was deducted from redemption proceeds.
FUND PERFORMANCE
In accordance with guidelines issued by the Securities and Exchange Commission,
we are including a performance chart that compares your Fund's total return with
that of a broad-based investment index. The lines on the chart represent the
total returns of $10,000 hypothetical investments in EV Classic Growth Fund, and
the unmanaged S&P 500 Stock Index.
THE TOTAL RETURN FIGURES
The solid line on the chart represents the Fund's performance at net asset
value. The Fund's total return figure reflects Fund expenses and transaction
costs. The second dollar figure for the Fund reflects the Fund's 1% deferred
sales charge (CDSC), deducted at redemption.
The dotted line represents the performance of the S&P 500 Stock Index, a
broad-based, widely recognized unmanaged index of 500 common stocks. The Index's
total return does not reflect any commissions or expenses that would be incurred
if an investor individually purchased or sold the securities represented in the
Index.
<PAGE>
EV CLASSIC GROWTH FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
- ------------------------------------------------------------------------------
August 31, 1995
- ------------------------------------------------------------------------------
ASSETS:
Investment in Growth Portfolio (Portfolio), at value (Note 1A) $563,941
Receivable for Fund shares sold 1,052
Receivable from administrator (Note 6) 44,320
Deferred organization expenses (Note 1D) 31,758
--------
Total assets $641,071
LIABILITIES:
Payable to affiliates --
Trustees' fees $ 63
Custodian fee 333
Accrued expenses 39,976
-------
Total liabilities 40,372
--------
NET ASSETS for 51,440 shares of beneficial interest outstanding $600,699
========
SOURCES OF NET ASSETS:
Paid-in capital $459,390
Accumulated net realized gain on investments 15,576
Net unrealized appreciation of investments from
Portfolio 125,733
--------
Total net assets $600,699
========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
($600,699 / 51,440 shares of beneficial interest outstanding) $11.68
======
The accompanying notes are an integral part of the financial statements
<PAGE>
STATEMENT OF OPERATIONS
- -------------------------------------------------------------------------------
For the period from the start of business, November 7, 1994, to August 31, 1995
---------------------------------------------------------------------------
INVESTMENT INCOME (NOTE 1B):
Dividend income allocated from Portfolio (net of
withholding tax of $241) $ 5,571
Interest income allocated from Portfolio 1,027
Expenses allocated from Portfolio (3,569)
--------
Total investment income $ 3,029
Expenses --
Compensation of Trustees not members of the
Investment Adviser's organization (Note 6) $ 63
Custodian fees (Note 6) 2,833
Distribution and service fees (Note 4) 5,056
Printing and postage 16,863
Registration fees 15,527
Legal and accounting services 10,576
Amortization of organization expenses (Note 1D) 6,237
Transfer agent fees 316
Miscellaneous 872
--------
Total expenses 58,343
Deduct allocation of expenses by administrator (Note
6) 44,320
--------
Net expenses 14,023
--------
Net investment loss $(10,994)
REALIZED AND UNREALIZED GAIN FROM PORTFOLIO:
Net realized gain on investment transactions
(identified cost basis) $ 25,651
Change in unrealized appreciation of investments 125,733
--------
Net realized and unrealized gain on investments 151,384
--------
Net increase in net assets resulting from operations $140,390
========
- -------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
For the period from the start of business, November 7, 1994, to August 31, 1995
---------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment loss $(10,994)
Net realized gain from Portfolio 25,651
Unrealized appreciation from Portfolio 125,733
--------
Net increase in net assets from operations $140,390
Net increase in net assets from Fund share transactions (Note 2) $460,299
--------
Net increase in net assets $600,689
NET ASSETS:
At beginning of period 10
--------
At end of period $600,699
========
The accompanying notes are an integral part of the financial statements
<PAGE>
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
For the period from the start of business, November 7, 1994, to August 31, 1995
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (for a share outstanding throughout the period)
NET ASSET VALUE - Beginning of period $10.000
-------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss $(0.214)
Net realized and unrealized gain on investments 1.894
-------
Total income from investment operations 1.680
-------
NET ASSET VALUE -- End of Period $11.680
=======
TOTAL RETURN** 16.80%
RATIOS/SUPPLEMENTAL DATA (as a percentage of average net assets):*
Expenses(1) 3.47%(+)
Net investment income (2.17%)(+)
NET ASSETS AT END OF PERIOD (000'S OMITTED) $ 601
*The expenses related to the operation of the Fund reflect an allocation of
expenses to the administrator. Had such action not been taken, net investment
income per share and the ratios would have been as follows:
NET INVESTMENT INCOME PER SHARE $ 0.648
=======
RATIOS (as a percentage of average net assets):
Expenses(1) 12.21%(+)
Net investment income (10.90%)(+)
(1) Includes the Fund's share of Growth Portfolio's allocated expenses.
** Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the record date.
(+) Computed on an annualized basis.
The accompanying notes are an integral part of the financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(1) SIGNIFICANT ACCOUNTING POLICIES
EV Classic Growth Fund (the Fund) is a diversified series of Eaton Vance
Growth Trust (the Trust). The Trust is an entity of the type commonly known as
a Massachusetts business trust and is registered under the Investment Company
Act of 1940, as amended, as an open-end, management investment company. The
Fund invests all of its investable assets in interests in the Growth Portfolio
(the Portfolio), a New York Trust, having the same investment objective as the
Fund. The value of the Fund's investment in the Portfolio reflects the Fund's
proportionate interest in the net assets of the Portfolio (0.42% at August 31,
1995). The performance of the Fund is directly affected by the performance of
the Portfolio. The financial statements of the Portfolio, including the
portfolio of investments, are included elsewhere in this report and should be
read in conjunction with the Fund's financial statements. The following is a
summary of significant accounting policies consistently followed by the Fund
in the preparation of its financial statements. The policies are in conformity
with generally accepted accounting principles.
A. INVESTMENT VALUATIONS -- Valuations of securities by the Portfolio is
discussed in Note 1A of the Portfolio's Notes to Financial Statements which
are included elsewhere in this report.
B. INCOME -- The Fund's net investment income consists of the Fund's pro rata
share of the net investment income of the Portfolio, less all actual and
accrued expenses of the Fund determined in accordance with generally accepted
accounting principles.
C. FEDERAL TAXES -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders each year all of its taxable income, including any
net realized gain on investments, option and financial futures transactions.
Accordingly, no provision for federal income or excise tax is necessary.
D. DEFERRED ORGANIZATION EXPENSES -- Costs incurred by the Fund in connection
with its organization are being amortized on the straight-line basis over five
years beginning on the date the Fund commenced operations.
E. OTHER -- Investment transactions are accounted for on the date the
investments are purchased or sold. Distributions to shareholders are recorded
on the ex-dividend date. Dividend income may include dividends that represent
returns of capital for federal tax purposes.
F. DISTRIBUTION COSTS -- For book purposes, commissions paid on the sale of
Fund shares and other distribution costs are charged to operations. For tax
purposes, commissions paid were charged to paid-in capital prior to November
23, 1994 and subsequently charged to operations. The change in the tax
accounting practice was prompted by a recent Internal Revenue Service ruling
and has no effect on either the Fund's current yield or total return
(Note 5).
G. DISTRIBUTIONS -- Generally accepted accounting principles require that
differences in the recognition or classification of income between the
financial statements and tax earnings and profits which result in temporary
over-distributions for financial statement purposes, are classified as
distributions in excess of net investment income or in excess of accumulated
net realized gains.
- ------------------------------------------------------------------------------
(2) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares from the start of business, November 7, 1994, to
August 31, 1995 were as follows:
SHARES AMOUNT
-------- ----------
Sales 157,048 $1,627,182
Issued to shareholders electing to receive payment of
distribution in Fund shares -- --
Redemptions (105,609) (1,166,883)
-------- ----------
Net increase 51,439 $ 460,299
======== ==========
- --------------------------------------------------------------------------------
(3) INVESTMENT TRANSACTIONS
Increases and decreases in the Fund's investment in the Portfolio aggregated
$1,626,131 and $1,216,612 respectively.
- ------------------------------------------------------------------------------
(4) DISTRIBUTION PLAN
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Investment Company Act of 1940. The Plan requires the Fund to pay
the principal underwriter, Eaton Vance Distributors, Inc. (EVD), amounts equal
to 1/365th of 0.75% of the Fund's daily net assets, for providing ongoing
distribution services and facilities to the Fund. The Fund will automatically
discontinue payments to EVD during any period in which there are no
outstanding Uncovered Distribution Charges, which are equivalent to the sum of
(i) 6.25% of the aggregate amount received by the Fund for shares sold plus,
(ii) distribution fees calculated by applying the rate of 1% over the
prevailing prime rate to the outstanding balance of Uncovered Distribution
Charges of EVD, reduced by amounts theretofore paid to EVD. The amount payable
to EVD with respect to each day is accrued on such day as a liability of the
Fund and, accordingly, reduces the Fund's net assets. EVD earned $3,790 for
the period ended August 31, 1995, representing 0.75% (annualized) of daily
average net assets. At August 31, 1995, the amount of Uncovered Distribution
Charges of EVD calculated under the Plan was approximately $101,992.
In addition, the Plan provides that the Fund may make payments of service
fees to the Principal Underwriter, Authorized Firms and other persons in
amounts not exceeding 0.25% of the Fund's average daily net assets for each
fiscal year. The Trustees of the Fund have initially implemented this
provision of the Plan by authorizing the Fund to make payments of service fees
to the Principal Underwriter, Authorized Firms and other persons in each
fiscal year of the Fund in amounts not exceeding 0.25% (per annum) of the
Fund's average daily net assets. Provision for service fee payments for the
period ended August 31, 1995 amounted to $1,266. Such payments were made for
personal services and/or maintenance of shareholder accounts. Service fees are
separate and distinct from the sales commissions and distribution fees payable
by the Fund to EVD, and, as such, are not subject to automatic discontinuance
when there are no outstanding uncovered distribution charges of EVD.
Certain officers and Trustees of the Fund are officers or directors of EVD.
- ------------------------------------------------------------------------------
(5) CONTINGENT DEFERRED SALES CHARGE
Shares purchased on or after January 30, 1995 and redeemed during the first
year after purchase (except shares acquired through the reinvestment of
distributions) generally will be subject to a contingent deferred sales charge
at a rate of one percent of redemption proceeds, exclusive of all
reinvestments and capital appreciation in the account. No contingent deferred
sales charge is imposed on exchanges for shares of other funds in the Eaton
Vance Classic Group of Funds or Eaton Vance Money Market Fund which are
distributed with a contingent deferred sales charge. EVD received
approximately $167 of CDSC paid by shareholders for the period ended August
31, 1995.
- ------------------------------------------------------------------------------
(6) TRANSACTIONS WITH AFFILIATES
Eaton Vance Management (EVM) serves only as the administrator of the Fund, but
receives no compensation. The Portfolio has engaged Boston Management and
Research (BMR), a subsidiary of EVM, to render investment advisory services. See
Note 2 of the Portfolio's Notes to Financial Statements which are included
elsewhere in this report. To enhance the net income of the Fund, $44,320 of
expenses related to the operation of the Fund were allocated to EVM. Except as
to Trustees of the Fund and the Portfolio who are not members of EVM's or BMR's
organizations, officers and Trustees receive remuneration for their services to
the Fund out of such investment adviser fee. Investors Bank & Trust Company
(IBT), an affiliate of EVM, serves as custodian of the Fund and the Portfolio.
Pursuant to the respective custodian agreements, IBT receives a fee reduced by
credits which are determined based on the average cash balances the Fund or the
Portfolio maintains with IBT. Certain of the officers and Trustees of the Fund
and Portfolio are officers and directors/trustees of the above organizations.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- ------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND TRUSTEES OF
EV CLASSIC GROWTH FUND,
A SERIES OF EATON VANCE GROWTH TRUST:
We have audited the accompanying statement of assets and liabilities of EV
Classic Growth Fund, a series of Eaton Vance Growth Trust, as of August 31,
1995, and the related statement of operations, statement of changes in net
assets and the financial highlights for the period from the start of business,
November 7, 1994 to August 31, 1995. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial
highlights based on our audits.
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
financial highlights 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 securities
held as of August 31, 1995 by correspondence with the custodian. An audit
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, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Fund, a series of Eaton Vance Growth Trust, as of August 31, 1995, the results
of its operations, the changes in its net assets, and the financial highlights
for the period from the start of business, November 7, 1994 to August 31,
1995, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
SEPTEMBER 29, 1995
<PAGE>
GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
AUGUST 31, 1995
- --------------------------------------------------------------------------
COMMON STOCKS - 98.6%
- --------------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------------
ADVERTISING - 2.8%
Omnicom Group, Inc. 60,000 $ 3,765,000
The parent company of DDB Needham ------------
Worldwide and BBDO Worldwide, two full
service advertising agency networks.
BEVERAGES - 2.4%
PepsiCo, Inc. 70,000 $ 3,167,500
Global soft drink producer with ------------
businesses in snack foods and fast food
restaurants.
BROADCASTING & ENTERTAINMENT - 7.5%
CBS Inc. 45,000 $ 3,588,750
Operator of CBS television and radio
networks and owner of 5 TV and 21 radio
stations.
Liberty Media Group Class A* 43,750 1,162,109
Stock represents participation in
programming assets of
TeleCommunications, Inc., including
sports, general entertainment and
electronic retailing, as well as
investments in cable television systems.
Seagram Co. Ltd. 80,000 2,960,000
A leading global producer and marketer
of liquor which acquired 80% of MCA,
Inc., a major factor in the
entertainment industry.
Tele-Communications, Inc. Class A* 130,000 2,396,875
The largest operator of cable television
systems in the U.S.
------------
$ 10,107,734
------------
BUSINESS PRODUCTS AND SERVICES - 6.5%
Danka Business Systems PLC ADR 50,000 $ 1,512,500
Independent distributor of automated
equipment, principally photocopiers, and
related service contracts.
Reuters Holdings PLC 80,000 4,190,000
Worldwide provider of proprietary
financial data and information.
Xerox Corp. 25,000 3,018,750
The dominant producer of high end
document processing machines.
------------
$ 8,721,250
------------
CHEMICALS - 3.9%
Great Lakes Chemical Corp. 40,000 $ 2,645,000
Specialty chemical manufacturer of a
wide range of products including flame
retardants, water treatments and fuel
additives.
Loctite Corp. 55,000 2,640,000
Manufacturer of adhesives for consumer
and industrial markets.
------------
$ 5,285,000
------------
<PAGE>
COMPUTER EQUIPMENT AND SERVICES - 7.8%
Automatic Data Processing, Inc. 40,000 $ 2,600,000
The leading independent computing and
payroll processing services firm in the
U.S.
Block (H. & R.) Inc. 50,000 1,950,000
Provider of individual tax preparation
services and computer services, led by
CompuServe's consumer online services,
both in the US and abroad.
Compaq Computer Corp.* 60,000 2,865,000
The leading worldwide manufacturer of
desktop and portable computers and PC
servers.
General Motors Corp. Class E 65,000 3,030,625
Stock represents participation in the
Electronic Data Systems Division of
General Motors. EDS designs, installs
and operates data processing and
communications systems for GM and other
customers.
------------
$ 10,445,625
------------
DRUGS & HEALTH CARE SERVICES - 6.9%
Astra AB A Free Shares* 175,000 $ 5,801,793
Swedish based international
pharmaceutical firm with drugs for the
control of ulcers and asthma.
Sofamor Danek Group, Inc.* 140,000 3,465,000
The dominant supplier of spinal implant
devices used in surgical treatment of
spinal diseases and deformities.
------------
$ 9,266,793
------------
ELECTRONIC INSTRUMENTATION - 2.6%
Millipore Corp. 100,000 $ 3,487,500
Products use membrane separations ------------
technology to analyze and purify fluids
for a variety of high tech industries.
FINANCIAL SERVICES - 8.6%
Federal National Mortgage Association 30,000 $ 2,861,250
U.S. Government sponsored mortgage
lender and provider of secondary
mortgage market.
Franklin Resources Inc. 50,000 2,750,000
Provides investment management and
related services to a family of equity
and fixed income mutual funds.
MBNA Corp. 80,000 2,840,000
Dominant issuer of MasterCard/Visa
credit cards to affinity groups.
MGIC Investment Corp. Wisc. 55,000 3,080,000
The leading provider of private mortgage
insurance coverage to U.S. banks and
other mortgage suppliers.
------------
$ 11,531,250
------------
HOTELS AND RESTAURANTS - 2.0%
Circus Circus Enterprises, Inc.* 80,000 $ 2,620,000
Major operator of theme related gaming ------------
facilities including 10 casino-hotels in
Nevada.
HOUSEHOLD PRODUCTS - 2.2%
Gillette Co. 70,000 $ 2,922,500
A global company with internationally ------------
recognized brands in razors and blades,
small appliances, cosmetics, dental and
other consumer products.
INSURANCE - 10.3%
Allstate Corp. 60,000 $ 2,032,500
Leading underwriter of automotive and
homeowners insurance as well as a life
insurance carrier.
American International Group, Inc. 60,000 4,837,500
One of the world's leading insurance
companies, operating in 130 countries.
General Re Corp. 29,000 4,310,125
Dominant reinsurance company in the US
which has recently substantially
increased its business by acquiring a
European reinsurer.
Progressive Corp., Inc. 60,000 2,662,500
Underwriter of non-standard automobile
and other specialty personal lines of
insurance.
------------
$ 13,842,625
------------
MACHINERY - 2.1%
Illinois Tool Works Inc. 45,000 $ 2,756,250
Manufacturer of industrial components ------------
and other specialty products and
equipment.
METALS & MINING - 4.3%
Freeport McMoRan Copper & Gold, Inc. 100,000 $ 2,337,500
Operator of third largest copper mine in
the world with world's largest gold
reserves.
Nucor Corp. 70,000 3,430,000
Fourth largest US steel company and
largest US minimill.
------------
$ 5,767,500
------------
OIL - 7.1%
Anadarko Petroleum Corp. 100,000 $ 4,775,000
Leading independent natural gas and
crude oil production company.
Triton Energy Corp. 90,000 4,770,000
Independent oil and gas producer with
major developments in Columbia and
Thailand.
------------
$ 9,545,000
------------
PAPER & FOREST PRODUCTS - 2.0%
Rayonier Inc. 70,000 $ 2,686,250
Major producer of cellulose pulp, used ------------
to make textiles and plastic, logs and
wood products and owner of extensive
timberland acreage in the US and New
Zealand.
PHOTOGRAPHY - 1.7%
Eastman Kodak Co. 40,000 $ 2,305,000
Largest producer of photographic ------------
products in the world.
PUBLISHING - 2.1%
McGraw Hill Inc. 35,000 $ 2,756,250
Supplies informational products and ------------
services for businesses, education and
industry through a broad range of media.
RETAILING - 1.9%
Home Depot, Inc. 65,000 $ 2,591,875
A chain of do-it-yourself warehouse ------------
style stores.
SEMICONDUCTORS - 8.8%
Intel Corp. 60,000 $ 3,682,500
A manufacturer of semiconductors and
other microcomputer components and
systems which comprise the heart of the
personal computer.
MEMC Electronic Materials, Inc.* 70,000 2,152,500
Worldwide producer of silicon wafers
used in the production of
semiconductors.
Motorola Inc. 42,000 3,139,500
A leading supplier of semiconductors and
two-way radios, paging equipment, and
cellular mobile telephone systems.
National Semiconductor Corp.* 100,000 2,825,000
Leading manufacturer of a broad line of
semiconductors for applications in
communications, computer systems,
automotive and industrial products.
------------
$ 11,799,500
------------
TELECOMMUNICATIONS EQUIPMENT - 4.8%
Ericsson LM Telephone Co. Class B 100,000 $ 2,137,500
Dominant producer in the cellular
infrastructure market with a growing
share of the handset market, based in
Sweden.
General Instrument Corp.* 70,000 2,555,000
Major supplier of broadband (cable)
communications systems and equipment
including satellite TV equipment.
Nokia Corp. 25,000 1,734,375
Finland based telecommunications company
with global presence in cellular
infrastructure equipment and hand sets.
------------
$ 6,426,875
------------
MISCELLANEOUS - 0.3% $ 379,750
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST, $106,160,346) $132,177,027
------------
- --------------------------------------------------------------------------
SHORT-TERM OBLIGATION - 2.1%
- --------------------------------------------------------------------------
FACE AMOUNT
(000 OMITTED) VALUE
- --------------------------------------------------------------------------
Melville Corp., 5.84s, 9/1/95 2,772 $ 2,772,000
------------
TOTAL SHORT-TERM OBLIGATION, AT
AMORTIZED COST $ 2,772,000
------------
TOTAL INVESTMENTS
(IDENTIFIED COST, $108,932,346) $134,949,027
OTHER ASSETS, LESS LIABILITIES - (0.7%) $ (946,427)
------------
NET ASSETS - 100% $134,002,600
============
*Non-income producing security.
The accompanying notes are an integral part
of the financial statements
<PAGE>
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
- ------------------------------------------------------------------------------
August 31, 1995
- ------------------------------------------------------------------------------
ASSETS:
Investments, at value (Note 1A) (identified cost,
$108,932,346) $134,949,027
Cash 18,906
Receivable for investments sold 938,769
Dividends receivable 103,945
Deferred organization expenses (Note 1C) 12,834
------------
Total assets $136,023,481
LIABILITIES:
Payable for investments purchased $2,006,727
Payable to affiliates --
Trustees' fee 3,250
Custodian fee 4,088
Accrued expenses 6,816
----------
Total liabilities 2,020,881
------------
NET ASSETS applicable to investors' interest in Portfolio $134,002,600
============
SOURCES OF NET ASSETS:
Net proceeds from capital contributions and
withdrawals $107,985,919
Unrealized appreciation of investments (computed
on the basis of identified cost) 26,016,681
------------
Total $134,002,600
============
The accompanying notes are an integral part of the financial statements
<PAGE>
STATEMENT OF OPERATIONS
- ------------------------------------------------------------------------------
For the year ended August 31, 1995
- ------------------------------------------------------------------------------
INVESTMENT INCOME:
Income --
Dividends (net of withholding tax of $29,332) $ 1,451,591
Interest 312,131
-----------
Total income $ 1,763,722
Expenses --
Investment adviser fee (Note 2) $ 786,194
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 9,399
Custodian fee (Note 2) 80,036
Legal and accounting services 33,079
Amortization of organization expenses (Note 1C) 3,218
Miscellaneous 5,092
-----------
Total expenses 917,018
-----------
Net investment income $ 846,704
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investment transactions
(identified cost basis) $ 1,358,348
Change in unrealized appreciation of investments 16,976,967
-----------
Net realized and unrealized gain on
investments $18,335,315
-----------
Net increase in net assets from operations $19,182,019
===========
The accompanying notes are an integral part of the financial statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------
FOR THE YEAR ENDED AUGUST 31,
-----------------------------
1995 1994*
------------ ------------
INCREASE IN NET ASSETS:
From operations --
Net investment income $ 846,704 $ 69,589
Net realized gain on investment transactions 1,358,348 1,063,482
Change in unrealized appreciation
of investments 16,976,967 2,595,384
------------ ------------
Increase in net assets from operations $ 19,182,019 $ 3,728,455
------------ ------------
Capital transactions --
Contributions $ 48,765,499 $140,348,725
Withdrawals (65,480,787) (12,641,351)
------------ ------------
Increase (decrease) in net assets
resulting from capital transactions $(16,715,288) $127,707,374
------------ ------------
Total increase in net assets $ 2,466,731 $131,435,829
NET ASSETS:
At beginning of year 131,535,869 100,040
------------ ------------
At end of year $134,002,600 $131,535,869
============ ============
*For the period from the start of business, August 2, 1994, to August 31, 1994.
- ------------------------------------------------------------------------------
SUPPLEMENTARY DATA
- ------------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
---------------------
1995 1994*
-------- --------
RATIOS (As a percentage of average daily net assets):
Expenses 0.73% 0.73%+
Net investment income 0.67% 0.66%+
PORTFOLIO TURNOVER 84% 4%
+ Computed on an annualized basis.
* For the period from the start of business, August 2, 1994, to August 31, 1994.
The accompanying notes are an integral part of the financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1995
- --------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
Growth Portfolio (the Portfolio) is registered under the Investment Company Act
of 1940 as a diversified open-end investment company which was organized as a
trust under the laws of the State of New York on August 2, 1994. The Declaration
of Trust permits the Trustees to issue interests in the Portfolio. Investment
operations began on August 2, 1994, with the acquisition of investments with a
value of $127,122,709, including unrealized appreciation of $6,444,330 in
exchange for an interest in the Portfolio by one of the Portfolio's investors.
The following is a summary of significant accounting policies of the Portfolio.
The policies are in conformity with generally accepted accounting principles.
A. INVESTMENT VALUATIONS -- Investments listed on securities exchanges or in the
NASDAQ National Market are valued at closing sale prices. Listed or unlisted
investments for which closing sale prices are not available are valued at the
mean between the latest bid and asked prices. Short-term obligations are valued
at amortized cost, which approximates value. Foreign securities held by the Fund
are valued in U.S. dollars at the current exchange rate.
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. 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 investors'
distributive share of the Portfolio's net taxable (if any) and tax-exempt
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. LEGAL FEES -- Legal fees and other related expenses incurred as part of
negotiations of the terms and requirements of capital infusions, or that are
expected to result in the restructuring of or a plan of reorganization for an
investment are added to the cost of the investment.
E. OTHER -- Investment transactions are accounted for on the date the
investments are purchased or sold. Dividend income and distributions to
shareholders are recorded on the ex-dividend date and interest income is
recorded on the accrual basis.
- --------------------------------------------------------------------------------
(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. The fee
is based upon a percentage of average daily net assets. For the year ended
August 31, 1995, the fee was equivalent to 0.625% of the Portfolio's average net
assets for such period and amounted to $786,194. 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 Fund out of such
investment adviser fee. Investors Bank & Trust Company (IBT), an affiliate of
EVM and BMR, serves as custodian of the Fund. 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. Certain of the
officers and Trustees of the Portfolio are officers and directors/trustees of
the above organizations. Trustees of the Portfolio that are not affiliated with
the Investment Adviser may elect to defer receipt of all or a portion of their
annual fees in accordance with the terms of the Trustees Deferred Compensation
Plan. For the year ended August 31, 1995 no significant amounts have been
deferred.
- --------------------------------------------------------------------------------
(3) PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than short-term obligations,
aggregated $101,814,016 and $107,452,323, respectively.
- --------------------------------------------------------------------------------
(4) FEDERAL INCOME TAX BASIS OF INVESTMENTS
The cost and unrealized appreciation/depreciation in value of the investments
owned at August 31, 1995, as computed on a federal income tax basis, are as
follows:
Aggregate cost $108,932,346
============
Gross unrealized appreciation $ 26,902,721
Gross unrealized depreciation (886,040)
------------
Net unrealized appreciation $ 26,016,681
============
- --------------------------------------------------------------------------------
(5) 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. The line of credit consists of a $20 million committed facility and a
$100 million discretionary facility. 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 based on its borrowings
at an amount above either the bank's adjusted certificate of deposit rate, a
variable adjusted certificate of deposit rate, or a federal funds effective
rate. In addition, a fee computed at an annual rate of 1/4 of 1% on the $20
million committed facility and on the daily unused portion of the $100 million
discretionary 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. At August 31, 1995, the Fund did
not have an outstanding balance pursuant to the line of credit.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE TRUSTEES AND INVESTORS OF
GROWTH PORTFOLIO:
We have audited the accompanying statement of assets and liabilities of Growth
Portfolio, including the portfolio of investments, as of August 31, 1995, the
related statements of operations for the year then ended, and the changes in net
assets and supplementary data for the year then ended and for the period from
August 2, 1994 (start of business) to August 31, 1994. These financial
statements and supplementary data are the responsibility of the Portfolio'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 securities owned as of August 31, 1995 by
correspondence with the custodian and brokers. 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, the financial statements and supplementary data referred to
above present fairly, in all material respects, the financial position of Growth
Portfolio as of August 31, 1995, the results of its operations, for the year
then ended, and the changes in its net assets and supplementary data for the
year then ended and for the period from August 2, 1994 (start of business) to
August 31, 1994, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
SEPTEMBER 29, 1995
<PAGE>
INVESTMENT MANAGEMENT
EV CLASSIC OFFICERS INDEPENDENT TRUSTEES
GROWTH FUND JAMES B. HAWKES DONALD R. DWIGHT
24 Federal Street President, Trustee President, Dwight Partners,
Boston, MA 02110 LANDON T. CLAY Inc.
Vice President, Trustee Chairman, Newspapers of
M. DOZIER GARDNER New England, Inc.
Vice President SAMUEL L. HAYES, III
WILLIAM D. BURT Jacob H. Schiff Professor of
Vice President Investment Banking,
BARCLAY TITTMAN Harvard University Graduate
Vice President School of Business
JAMES L. O'CONNOR Administration
Treasurer NORTON H. REAMER
THOMAS OTIS President and Director, United
Secretary Asset Management
Corporation
JOHN L. THORNDIKE
Vice President and Director,
Fiduciary Company Incorporated
JACK L. TREYNOR
Investment Adviser and
Consultant
--------------------------------------------------------
GROWTH OFFICERS INDEPENDENT TRUSTEES
PORTFOLIO JAMES B. HAWKES DONALD R. DWIGHT
24 Federal Street President, Trustee President, Dwight Partners,
Boston, MA 02110 LANDON T. CLAY Inc.
Vice President, Trustee Chairman, Newspapers of
M. DOZIER GARDNER New England, Inc.
Vice President SAMUEL L. HAYES, III
PETER F. KIELY Jacob H. Schiff Professor of
Vice President and Investment Banking,
Portfolio Manager Harvard University Graduate
JAMES L. O'CONNOR School of Business
Treasurer Administration
THOMAS OTIS NORTON H. REAMER
Secretary President and Director, United
Asset Management
Corporation
JOHN L. THORNDIKE
Vice President and Director,
Fiduciary Company Incorporated
JACK L. TREYNOR
Investment Adviser and
Consultant
<PAGE>
INVESTMENT ADVISER OF
GROWTH PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV CLASSIC GROWTH FUND
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
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its distribution plan,
sales charges and expenses. Please read the prospectus carefully before you
invest or send money.
EV CLASSIC GROWTH FUND
24 FEDERAL STREET
BOSTON, MA 02110 C-GFSRC
[LOGO]
EV Classic
Growth
Fund
Annual Shareholder Report
August 31, 1995
