<PAGE>
EV TRADITIONAL GROWTH FUND
Supplement to Prospectus dated January 1, 1995
1. THE FOLLOWING DISCLOSURE IS ADDED UNDER THE CAPTION "HOW THE FUND AND THE
PORTFOLIO INVEST THEIR ASSETS; RISKS" (see pages 4 and 5 of the Prospectus):
The Portfolio may invest in securities issued by foreign companies
(including American Depository Receipts and Global Depository Receipts).
The Portfolio may purchase and sell exchange-traded futures contracts
on stock indices and options thereon to hedge against fluctuations in securities
prices or as a substitute for the purchase or sale of securities. Such
transactions involve a risk of loss or depreciation due to unanticipated adverse
changes in securities prices, which may exceed the Portfolio's initial
investment in these contracts. Futures contracts involve transaction costs. To
the extent that the Portfolio enters into futures contracts and options thereon
traded on an exchange regulated by the Commodity Futures Trading Commission, in
each case that are not for bona fide hedging purposes (as defined by the CFTC),
the aggregate initial margin and premiums required to establish these positions
(excluding the amount by which options are "in-the-money") may not exceed 5% of
the liquidation value of the Portfolio's portfolio, after taking into account
unrealized profits and unrealized losses on any contracts the Portfolio has
entered into. There can be no assurance that the Investment Adviser's use of
stock index futures will be advantageous to the Portfolio.
An investment in the Fund entails the risk that the principal value of
Fund shares may not increase or may decline. The Portfolio's investments in
equity securities are subject to the risk of adverse developments affecting
particular companies or industries and the stock market generally.
2. THE FOLLOWING SENTENCE IS ADDED TO THE SIXTH PARAGRAPH UNDER THE CAPTION "HOW
TO BUY FUND SHARES" (see page 10 of the Prospectus):
Fund shares may be sold at net asset value where the amount invested
represents redemption proceeds from a mutual fund unaffiliated with Eaton Vance,
if the redemption occurred no more than 60 days prior to the purchase of Fund
shares and the redeemed shares were subject to a sales charge.
<PAGE>
3. THE FOLLOWING SENTENCE REPLACES THE LAST SENTENCE IN THE LAST PARAGRAPH UNDER
THE CAPTION "HOW TO REDEEM FUND SHARES" (see page 13 of the Prospectus):
If a shareholder reinvests redemption proceeds within the 60-day period
and in accordance with the conditions set forth under "Eaton Vance Shareholder
Services -- Reinvestment Privilege," the shareholder's account will be credited
with the amount of any CDSC paid on such redeemed shares.
4. THE FOLLOWING PARAGRAPH REPLACES THE PARAGRAPH UNDER THE CAPTION "EATON VANCE
SHAREHOLDER SERVICES -- REINVESTMENT PRIVILEGE" (see page 16 of the Prospectus):
REINVESTMENT PRIVILEGE: A SHAREHOLDER WHO HAS REPURCHASED OR REDEEMED SHARES MAY
REINVEST AT NET ASSET VALUE ANY PORTION OR ALL OF THE REPURCHASE OR REDEMPTION
PROCEEDS (PLUS THAT AMOUNT NECESSARY TO ACQUIRE A FRACTIONAL SHARE TO ROUND OFF
THE PURCHASE TO THE NEAREST FULL SHARE) IN SHARES OF THE FUND, or, provided that
the shares repurchased or redeemed have been held for at least 60 days, in
shares of any of the other funds offered by the Principal Underwriter with an
initial sales charge, provided that the reinvestment is effected within 60 days
after such repurchase or redemption, and the privilege has not been used more
than once in the prior 12 months. Shares are sold to a reinvesting shareholder
at the next determined net asset value following timely receipt of a written
purchase order by the Principal Underwriter or by the fund whose shares are to
be purchased (or by such fund's transfer agent). The privilege is also available
to holders of shares of the other funds offered with an initial sales charge by
the Principal Underwriter who wish to reinvest such redemption or repurchase
proceeds in shares of the Fund. If a shareholder reinvests redemption proceeds
within 60-day period the shareholder's account will be credited with the amount
of any CDSC paid on such redeemed shares. A reinvesting shareholder may realize
a gain or loss for Federal tax purposes as a result of such repurchase or
redemption. Special rules may apply to the computation of gain or loss and to
the deduction of loss on a repurchase or redemption followed by a reinvestment.
See "Distributions and Taxes". Shareholders should consult their tax advisers
concerning the tax consequences of reinvestments.
Date: June 5, 1995 T-GFPS
<PAGE>
EV TRADITIONAL GROWTH FUND
EV TRADITIONAL GROWTH FUND (THE "FUND") IS A MUTUAL FUND SEEKING CAPITAL
GROWTH. THE FUND INVESTS ITS ASSETS IN GROWTH PORTFOLIO (THE "PORTFOLIO"), A
DIVERSIFIED OPEN-END INVESTMENT COMPANY HAVING THE SAME INVESTMENT OBJECTIVE AS
THE FUND, RATHER THAN BY DIRECTLY INVESTING IN AND MANAGING ITS OWN PORTFOLIO OF
SECURITIES AS WITH HISTORICALLY STRUCTURED MUTUAL FUNDS. THE FUND IS A SERIES OF
EATON VANCE GROWTH TRUST (THE "TRUST").
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank or other insured depository institution, and are not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other government agency. Shares of the Fund involve
investment risks, including fluctuations in value and the possible loss of some
or all of the principal investment.
This Prospectus is designed to provide you with information you should know
before investing. Please retain this document for future reference. A Statement
of Additional Information dated January 1, 1995 for the Fund, as supplemented
from time to time, has been filed with the Securities and Exchange Commission
and is incorporated herein by reference. This Statement of Additional
Information is available without charge from the Fund's Principal Underwriter,
Eaton Vance Distributors, Inc., 24 Federal Street, Boston, MA 02110 (telephone
(800) 225-6265). The Portfolio's investment adviser is Boston Management and
Research (the "Investment Adviser"), a wholly-owned subsidiary of Eaton Vance
Management, and Eaton Vance Management is the administrator (the
"Administrator") of the Fund. The offices of the Investment Adviser and the
Administrator are also located at 24 Federal Street, Boston, MA 02110.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page Page
<S> <C> <S> <C>
Shareholder and Fund Expenses .................... 2 How to Redeem Fund Shares ..................... 12
The Fund's Financial Highlights .................. 3 Reports to Shareholders ...................... 13
The Fund's Investment Objective .................. 4 The Lifetime Investing Account/Distribution
How the Fund and the Portfolio Invest Options .................................... 13
their Assets; Risks ............................. 4 The Eaton Vance Exchange Privilege ........... 14
Organization of the Fund and the Portfolio ....... 5 Eaton Vance Shareholder Services ............. 15
Management of the Fund and the Portfolio ......... 7 Distributions and Taxes ...................... 17
Service Plan ..................................... 8 Performance Information ...................... 18
Valuing Fund Shares ............................... 9 Statement of Intention and Escrow Agreement ... 18
How to Buy Fund Shares ............................ 9
</TABLE>
- --------------------------------------------------------------------------------
PROSPECTUS DATED JANUARY 1, 1995
<PAGE>
SHAREHOLDER AND FUND EXPENSES (1)
- --------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as a
percentage of offering price) 4.75%
Sales Charges Imposed on Reinvested
Distributions None
Redemption Fees None
Fees to Exchange Shares None
Contingent Deferred Sales Charges (on purchases of $1 million
or more) Imposed on Redemptions During the First Eighteen Months
(as a percentage of redemption proceeds exclusive of all
reinvestments and capital appreciation in the account)(2) 1.00%
ANNUAL FUND AND ALLOCATED PORTFOLIO OPERATING EXPENSES
(as a percentage of average daily net assets)
Investment Adviser Fee(3) 0.625%
Rule 12b-1 Fees (Service Plan) 0.063%
Other Expenses 0.262%
-----
Total Operating Expenses 0.950%
=====
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following expenses (including initial maximum
sales charge) on a $1,000 investment, assuming (a) 5% annual return and
(b) redemption at the end of each time period: $57 $76 $98 $159
Notes:
(1) The purpose of the above table and Example is to summarize the aggregate
expenses of the Fund and the Portfolio and to assist investors in
understanding the various costs and expenses that investors in the Fund
will bear directly or indirectly. The Trustees of the Trust believe that
over time the aggregate per share expenses of the Fund and the Portfolio
should be approximately equal to the per share expenses which the Fund
would incur if the Trust retained the services of an investment adviser and
the assets of the Fund were invested directly in the type of securities
being held by the Portfolio. The costs and expenses included in the table
and Example are based on the Fund's fiscal year ended August 31, 1994, and
reflect the Fund's current policy of investing in the Portfolio. The table
and Example should not be considered a representation of past or future
expenses, and actual expenses may be greater or less than those shown. For
further information regarding the expenses of both the Fund and the
Portfolio see "The Fund's Financial Highlights", "Organization of the Fund
and the Portfolio", "Management of the Fund and the Portfolio" and "How to
Redeem Fund Shares". Other investment companies with different distribution
arrangements and fees are investing in the Portfolio and additional such
companies may do so in the future. See "Organization of the Fund and the
Portfolio".
(2) If shares have been purchased at net asset value with no initial sales
charge by virtue of the purchase having been in the amount of $1 million or
more and are redeemed within 18 months after the end of the calendar month
in which the purchase was made, a contingent deferred sales charge of 1%
will be imposed on such redemption. See "How to Buy Fund Shares", "How to
Redeem Fund Shares" and "Eaton Vance Shareholder Services".
(3) As of the close of business on August 1, 1994, the Fund transferred
substantially all of its assets to the Portfolio in exchange for an
interest in the Portfolio. Prior to such date, the Fund retained Eaton
Vance Management as its investment adviser.
</TABLE>
<PAGE>
THE FUND'S FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following information should be read in conjunction with the financial
statements included in the Statement of Additional Information, all of which has
been so included in reliance upon the report of Coopers & Lybrand LLP,
independent accountants, as experts in accounting and auditing. The financial
highlights for each of the eight years in the period ended August 31, 1992,
presented here, were audited by other auditors whose report dated September 30,
1992, expressed an unqualified opinion on such financial highlights. Further
information regarding the performance of the Fund is contained in the Fund's
annual report to shareholders which may be obtained without charge by contacting
the Fund's Principal Underwriter, Eaton Vance Distributors, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
-------------------------------------------------------------------------------------------------------
1994 1993<F2> 1992<F1> 1991<F1> 1990<F1> 1989<F1> 1988<F1> 1987<F1> 1986<F1> 1985<F1>
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, beginning
of year ................ $ 8.070 $ 8.520 $ 8.450 $ 7.750 $ 8.560 $ 6.730 $ 9.670 $ 8.130 $ 6.330 $ 6.110
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .. $ 0.052 $ 0.030 $ 0.046 $ 0.101 $ 0.109 $ 0.150 $ 0.114 $ 0.115 $ 0.128 $ 0.130
Net realized and
unrealized gain (loss)
on investments ........ (0.092) 0.660 0.544 1.499 (0.319) 1.980 (1.764) 2.335 1.742 0.860
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total income (loss) from
investment operations $(0.040) $ 0.690 $ 0.590 $ 1.600 $(0.210) $ 2.130 $(1.650) $ 2.450 $ 1.870 $ 0.990
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From net investment
income ................ $(0.060) $ -- $(0.040) $(0.080) $(0.110) $(0.080) $(0.060) $(0.110) $(0.070) $(0.140)
From net realized gain
on investments ........ (0.010) (1.140) (0.480) (0.820) (0.490) (0.220) (1.230) (0.800) -- (0.630)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total distributions ... $(0.070) $(1.140) $(0.520) $(0.900) $(0.600) $(0.300) $(1.290) $(0.910) $(0.070) $(0.770)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
NET ASSET VALUE, end of
year ................... $ 7.960 $ 8.070 $ 8.520 $ 8.450 $ 7.750 $ 8.560 $ 6.730 $ 9.670 $ 8.130 $ 6.330
======= ======= ======= ======= ======= ======= ======= ======= ======= ======-
TOTAL RETURN<F3> ........ (0.75)% 7.63% 7.22% 23.24% (2.65)% 32.90% (18.96)% 34.03% 29.63% 16.29%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of
year (000's omitted) .. $130,269 $143,264 $143,695 $143,090 $80,582 $92,448 $84,667 $112,843 $90,853 $66,060
Ratio of expenses to
average net assets .... 0.95%<F2> 0.89% 0.87% 0.92% 0.96% 0.98% 1.00% 0.92% 0.91% 0.93%
Ratio of net investment
income to average net
assets ................ 0.61% 0.56% 0.53% 1.35% 1.38% 2.04% 1.66% 1.42% 1.77% 2.04%
PORTFOLIO TURNOVER<F4> .. 89% 84% 68% 73% 66% 54% 55% 57% 68% 59%
<FN>
- ---------
<F1> Audited by previous auditors.
<F2> Includes the Fund's share of Growth Portfolio's allocated expenses for the
period from August 2, 1994 to August 31, 1994.
<F3> 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.
<F4> Portfolio Turnover represents the rate of portfolio activity for the period
while the Fund was making investments directly in securities. The portfolio
turnover for the period since the fund transferred substantially all of its
investable assets to the portfolio is shown in the Portfolio's financial
statements which are included elsewhere in this report.
</TABLE>
<PAGE>
THE FUND'S INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
THE FUND'S INVESTMENT OBJECTIVE IS TO ACHIEVE CAPITAL GROWTH. The Fund seeks to
meet its investment objective by investing its assets in the Growth Portfolio
(the "Portfolio"), a separate registered investment company that invests in a
carefully selected and continuously managed portfolio consisting primarily of
equity securities. The Fund's and the Portfolio's investment objective is
nonfundamental and may be changed when authorized by a vote of the Trustees of
the Trust or the Portfolio, respectively, without obtaining the approval of the
Fund's shareholders or the investors in the Portfolio, as the case may be. The
Trustees of the Trust have no present intention to change the Fund's objective
and intend to submit any proposed material change in the investment objective to
shareholders in advance for their approval.
HOW THE FUND AND THE PORTFOLIO INVEST THEIR
ASSETS; RISKS
- --------------------------------------------------------------------------------
THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING IN THE
PORTFOLIO. The policy of the Portfolio is to invest in a carefully selected and
continuously managed portfolio consisting primarily of domestic and foreign
securities. It may invest in all kinds of companies. The Portfolio will invest
primarily in common stocks or securities convertible into common stocks
(including convertible debt), which the Investment Adviser believe meet the
criteria for capital appreciation. The criteria for investments in convertible
debt are the same as those used for the common stock of the issuer. The
Portfolio does not currently intend to invest more than 5% of its net assets in
convertible debt. It may also invest in other securities and obligations of all
kinds. These include preferred stocks, rights, warrants, bonds, repurchase
agreements and other evidences of indebtedness, however the Portfolio does not
currently intend to invest more than 5% of its net assets in each of such
investments and currently intends to limit its investment in non-convertible
debt to investment grade non-convertible debt (rated Baa or higher by Moody's
Investors Service, Inc. or BBB or higher by Standard & Poor's Ratings Group) or,
if unrated, determined to be of comparable quality by the Portfolio's Investment
Adviser. The Portfolio may also invest in money market instruments.
While income is a subordinate consideration to capital growth, the Portfolio
will earn dividend or interest income to the extent that it receives dividends
or interest from its investments.
The Portfolio may invest in securities issued by foreign companies. Such
investments may be subject to various risks such as fluctuations in currency and
exchange rates, foreign taxes, social, political and economic conditions in the
countries in which such companies operate, and changes in governmental, economic
or monetary policies both here and abroad. There may be less publicly available
information about a foreign company than about a comparable domestic company.
Since the securities markets in many foreign countries are not as developed as
those in the United States, the securities of many foreign companies are less
liquid and their prices are more volatile than securities of comparable domestic
companies. In order to hedge against possible variations in foreign exchange
rates pending the settlement of foreign securities transactions, the Portfolio
may buy or sell foreign currencies or may enter into forward foreign currency
exchange contracts to purchase or sell a specified currency at a specified price
and future date. As of November 30, 1994, the Portfolio had invested 9.28% of
its total assets in securities issued by foreign companies.
The Fund and the Portfolio have adopted certain fundamental investment
restrictions which are enumerated in detail in the Statement of Additional
Information and which may not be changed unless authorized by a shareholder vote
and/or an investor vote, respectively. Except for such enumerated restrictions
and as otherwise indicated in this prospectus, the investment objective and
policies of the Fund and the Portfolio are not fundamental policies and
accordingly may be changed by the Trustees of the Trust and the Portfolio
without obtaining the approval of the Fund's shareholders or the investors in
the Portfolio, as the case may be. If any changes were made in the Fund's
investment objective, the Fund might have an investment objective different from
the objective which an investor considered appropriate at the time the investor
became a shareholder of the Fund.
- --------------------------------------------------------------------------------
THE FUND IS NOT INTENDED TO BE A COMPLETE INVESTMENT PROGRAM, AND A
PROSPECTIVE INVESTOR SHOULD TAKE INTO ACCOUNT HIS OR HER OBJECTIVES AND OTHER
INVESTMENTS WHEN CONSIDERING THE PURCHASE OF FUND SHARES. THE FUND CANNOT
ASSURE ACHIEVEMENT OF ITS CAPITAL GROWTH OBJECTIVE.
- --------------------------------------------------------------------------------
ORGANIZATION OF THE FUND AND THE PORTFOLIO
- --------------------------------------------------------------------------------
THE FUND IS A DIVERSIFIED SERIES OF EATON VANCE GROWTH TRUST (THE "TRUST"), A
BUSINESS TRUST ESTABLISHED UNDER MASSACHUSETTS LAW PURSUANT TO A DECLARATION OF
TRUST DATED MAY 25, 1989, AS AMENDED, AND ORGANIZED AS THE SUCCESSOR TO A
MASSACHUSETTS CORPORATION WHICH COMMENCED ITS INVESTMENT COMPANY OPERATIONS IN
1954. THE TRUST IS A MUTUAL FUND -- AN OPEN-END, MANAGEMENT INVESTMENT COMPANY.
The Trustees of the Trust are responsible for the overall management and
supervision of its affairs. The Trust may issue an unlimited number of shares of
beneficial interest (no par value per share) in one or more series and because
the Trust can offer separate series (such as the Fund) it is known as a "series
company." Each share represents an equal proportionate beneficial interest in
the Fund. When issued and outstanding, the shares are fully paid and
nonassessable by the Trust and redeemable as described under "How to Redeem Fund
Shares." Shareholders are entitled to one vote for each full share held.
Fractional shares may be voted proportionately. Shares have no preemptive or
conversion rights and are freely transferable. Upon liquidation of the Fund,
shareholders are entitled to share pro rata in the net assets of the Fund
available for distribution to shareholders.
THE PORTFOLIO IS ORGANIZED AS A TRUST UNDER THE LAWS OF THE STATE OF NEW
YORK AND IS TREATED AS A PARTNERSHIP FOR FEDERAL TAX PURPOSES. The Portfolio, as
well as the Trust, intends to comply with all applicable Federal and state
securities laws. The Portfolio's Declaration of Trust provides that the Fund and
other entities permitted to invest in the Portfolio (e.g., other U.S. and
foreign investment companies, and common and commingled trust funds) will each
be liable for all obligations of the Portfolio. However, the risk of the Fund
incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance exists and the Portfolio itself
is unable to meet its obligations. Accordingly, the Trustees of the Trust
believe that neither the Fund nor its shareholders will be adversely affected by
reason of the Fund investing in the Portfolio.
SPECIAL INFORMATION ON THE FUND/PORTFOLIO INVESTMENT STRUCTURE. An investor in
the Fund should be aware that the Fund, unlike mutual funds which directly
acquire and manage their own portfolios of securities, seeks to achieve its
investment objective by investing its assets in an interest in the Portfolio,
which is a separate investment company with an identical investment objective.
Therefore, the Fund's interest in the securities owned by the Portfolio is
indirect. In addition to selling an interest to the Fund, the Portfolio may sell
interests to other affiliated and non-affiliated mutual funds or institutional
investors. Such investors will invest in the Portfolio on the same terms and
conditions and will pay a proportionate share of the Portfolio's expenses.
However, the other investors investing in the Portfolio are not required to sell
their shares at the same public offering price as the Fund due to variations in
sales commissions and other operating expenses. Therefore, investors in the Fund
should be aware that these differences may result in differences in returns
experienced by investors in the different funds that invest in the Portfolio.
Such differences in returns are also present in other mutual fund structures,
including funds that have multiple classes of shares. For information regarding
the investment objective, policies and restrictions of the Portfolio, see "The
Fund's Investment Objective" and "How the Fund and the Portfolio Invest their
Assets; Risks". Further information regarding the investment practices of the
Portfolio may also be found in the Statement of Additional Information.
The Trustees of the Trust have considered the advantages and disadvantages
of investing the assets of the Fund in the Portfolio, as well as the advantages
and disadvantages of the two-tier format. The Trustees believe that the
structure offers opportunities for substantial growth in the assets of the
Portfolio, and affords the potential for economies of scale for the Fund, at
least when the assets of the Portfolio exceed $300 million. The public
shareholders of the Fund have previously approved the policy of investing the
Fund's assets in an interest in the Portfolio.
The Fund may withdraw (completely redeem) all its assets from the Portfolio
at any time if the Board of Trustees of the Trust determines that it is in the
best interest of the Fund to do so. The investment objective and the
nonfundamental investment policies of the Fund and the Portfolio may be changed
by the Trustees of the Trust and the Portfolio without obtaining the approval of
the shareholders of the Fund or the investors in the Portfolio. Any such change
of the investment objective of the Fund or the Portfolio will be preceded by
thirty days advance written notice to the shareholders of the Fund or the
investors in the Portfolio, as the case may be. In the event the Fund withdraws
all of its assets from the Portfolio, or the Board of Trustees of the Trust
determines that the investment objective of the Portfolio is no longer
consistent with the investment objective of the Fund, the Board of Trustees of
the Trust would consider what action might be taken, including investing all the
assets of the Fund in another pooled investment entity or retaining an
investment adviser to manage the Fund's assets in accordance with its investment
objective. The Fund's investment performance may be affected by a withdrawal of
all its assets from the Portfolio.
Information regarding other pooled investment entities or funds which invest
in the Portfolio may be obtained by contacting Eaton Vance Distributors, Inc.
(the "Principal Underwriter" or "EVD"), 24 Federal Street, Boston, MA 02110,
(617) 482-8260. Smaller funds investing in the Portfolio may be adversely
affected by the actions of larger funds investing in the Portfolio. For example,
if a large fund withdraws from the Portfolio, the remaining funds may experience
higher pro rata operating expenses, thereby producing lower returns.
Additionally, the Portfolio may become less diverse, resulting in increased
portfolio risk, and experience decreasing economies of scale. However, this
possibility exists as well for historically structured funds which have large or
institutional investors.
Until recently, the Administrator sponsored and advised historically
structured funds. Funds which invest all their assets in interests in a separate
investment company are a relatively new development in the mutual fund industry
and, therefore, the Fund may be subject to additional regulations than
historically structured funds.
The Declaration of Trust of the Portfolio provides that the Portfolio will
terminate 120 days after the complete withdrawal of the Fund or any other
investor in the Portfolio, unless either the remaining investors, by unanimous
vote at a meeting of such investors, or a majority of the Trustees of the
Portfolio, by written instrument consented to by all investors, agree to
continue the business of the Portfolio. This provision is consistent with
treatment of the Portfolio as a partnership for Federal income tax purposes. See
"Distributions and Taxes" for further information. Whenever the Fund as an
investor in the Portfolio is requested to vote on matters pertaining to the
Portfolio (other than the termination of the Portfolio's business, which may be
determined by the Trustees of the Portfolio without investor approval), the Fund
will hold a meeting of Fund shareholders and will vote its interest in the
Portfolio for or against such matters proportionately to the instructions to
vote for or against such matters received from Fund shareholders. The Fund shall
vote shares for which it receives no voting instructions in the same proportion
as the shares for which it receives voting instructions. Other investors in the
Portfolio may alone or collectively acquire sufficient voting interests in the
Portfolio to control matters relating to the operation of the Portfolio, which
may require the Fund to withdraw its investment in the Portfolio or take other
appropriate action. Any such withdrawal could result in a distribution "in kind"
of portfolio securities (as opposed to a cash distribution from the Portfolio).
If securities are distributed, the Fund could incur brokerage, tax or other
charges in converting the securities to cash. In addition, the distribution in
kind may result in a less diversified portfolio of investments or adversely
affect the liquidity of the Fund. Notwithstanding the above, there are other
means for meeting shareholder redemption requests, such as borrowing.
The Trustees of the Trust, including a majority of the disinterested
Trustees, have approved written procedures designed to identify and address any
potential conflicts of interest arising from the fact that the Trustees of the
Trust and the Trustees of the Portfolio are the same. Such procedures require
each Board to take actions to resolve any conflict of interest between the Fund
and the Portfolio, and it is possible that the creation of separate boards may
be considered. For further information concerning the Trustees and officers of
each of the Trust and the Portfolio, see the Statement of Additional
Information.
MANAGEMENT OF THE FUND AND THE PORTFOLIO
- --------------------------------------------------------------------------------
THE PORTFOLIO ENGAGES BOSTON MANAGEMENT AND RESEARCH ("BMR"), A WHOLLY-OWNED
SUBSIDIARY OF EATON VANCE MANAGEMENT ("EATON VANCE"), AS ITS INVESTMENT ADVISER.
EATON VANCE, ITS AFFILIATES AND ITS PREDECESSOR COMPANIES HAVE BEEN MANAGING
ASSETS OF INDIVIDUALS AND INSTITUTIONS SINCE 1924 AND MANAGING INVESTMENT
COMPANIES SINCE 1931.
Acting under the general supervision of the Board of Trustees of the
Portfolio, BMR manages the Portfolio's investments and affairs. Under its
investment advisory agreement with the Portfolio, BMR receives a monthly
advisory fee of 5/96 of 1% (equivalent to 5/8 of 1% annually) of average daily
net assets of the Portfolio up to and including $300 million and 1/24 of 1%
(equivalent to 1/2 of 1% annually) of average daily net assets over $300
million.
As at August 31, 1994, the Portfolio had net assets of $131,535,869. For the
period from the start of business, August 2, 1994 to August 31, 1994, the
Portfolio paid BMR advisory fees equivalent to 0.61% (annualized) of the
Portfolio's average daily net assets. Prior to the close of business on August
1, 1994 (when the Fund transferred all its assets to the Portfolio in exchange
for an interest in the Portfolio), the Fund retained Eaton Vance as its
investment adviser. For the period from September 1, 1993 to August 1, 1994, the
Fund paid Eaton Vance advisory fees equivalent to 0.63% (annualized) of the
Fund's average daily net assets for such period.
BMR also furnishes for the use of the Portfolio office space and all
necessary office facilities, equipment and personnel for servicing the
investments of the Portfolio. The Portfolio is responsible for the payment of
all expenses other than those expressly stated to be payable by BMR under the
investment advisory agreement.
BMR places the portfolio transactions of the Portfolio with many
broker-dealer firms and uses its best efforts to obtain execution of such
transactions at prices which are advantageous to the Portfolio and at reasonably
competitive commission rates. Subject to the foregoing, BMR may consider sales
of shares of the Fund or of other investment companies sponsored by BMR or Eaton
Vance as a factor in the selection of broker-dealer firms to execute portfolio
transactions.
Peter F. Kiely has acted as the portfolio manager since the Portfolio
commenced operations. Mr. Kiely has been a Vice President of Eaton Vance since
1980 and of BMR since inception.
BMR OR EATON VANCE ACTS AS INVESTMENT ADVISER TO INVESTMENT COMPANIES AND
VARIOUS INDIVIDUAL AND INSTITUTIONAL CLIENTS WITH ASSETS UNDER MANAGEMENT OF
APPROXIMATELY $15 BILLION. Eaton Vance is a wholly-owned subsidiary of Eaton
Vance Corp., a publicly held holding company. Eaton Vance Corp., through its
subsidiaries and affiliates, engages in investment management and marketing
activities, fiduciary and banking services, oil and gas operations, real estate
investment, consulting and management, and development of precious metals
properties.
The Trust has retained the services of Eaton Vance to act as Administrator
of the Fund. The Trust has not retained the services of an investment adviser
since the Trust seeks to achieve the investment objective of the Fund by
investing the Fund's assets in the Portfolio. As Administrator, Eaton Vance
provides the Fund with general office facilities and supervises the overall
administration of the Fund. For these services Eaton Vance currently receives no
compensation. The Trustees of the Trust may determine, in the future, to
compensate Eaton Vance for its services.
SERVICE PLAN
- --------------------------------------------------------------------------------
In addition to advisory fees and other expenses, the Fund pays service fees
pursuant to a Service Plan (the "Plan") designed to meet the requirements of
Rule 12b-1 under the Investment Company Act of 1940 and the service fee
requirements of the revised sales charge rule of the National Association of
Securities Dealers, Inc. The Plan is further described in the Statement of
Additional Information, and the following is a description of the salient
features of the Plan.
THE PLAN PROVIDES THAT THE FUND MAY MAKE SERVICE FEE PAYMENTS FOR PERSONAL
SERVICES AND/OR THE MAINTENANCE OF SHAREHOLDER ACCOUNTS TO THE PRINCIPAL
UNDERWRITER, FINANCIAL SERVICE FIRMS ("AUTHORIZED FIRMS") AND OTHER PERSONS IN
AMOUNTS NOT EXCEEDING .25% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR ANY FISCAL
YEAR. The Trustees of the Trust have implemented the Plan by authorizing the
Fund to make quarterly service fee payments to the Principal Underwriter and
Authorized Firms in amounts not expected to exceed .25% of that portion of the
Fund's average daily net assets for any fiscal year which is attributable to
shares of the Fund sold on or after July 1, 1989 and remaining outstanding for
at least twelve months. During the fiscal year ended August 31, 1994, the Fund
made payments under the Plan to the Principal Underwriter and Authorized Firms
equivalent to 0.06% of the Fund's average daily net assets for such year.
VALUING FUND SHARES
- --------------------------------------------------------------------------------
THE FUND VALUES ITS SHARES ONCE ON EACH DAY THE NEW YORK STOCK EXCHANGE (THE
"EXCHANGE") IS OPEN FOR TRADING, as of the close of regular trading on the
Exchange (normally 4:00 p.m. New York time). The Fund's net asset value per
share is determined by its custodian, Investors Bank & Trust Company ("IBT"),
(as agent for the Fund) in the manner authorized by the Trustees of the Trust.
Net asset value is computed by dividing the value of the Fund's total assets,
less its liabilities, by the number of shares outstanding. Because the Fund
invests substantially all of its assets in an interest in the Portfolio, the
Fund's net asset value will reflect the value of its interest in the Portfolio
(which, in turn, reflects an interest in the underlying value of the Portfolio's
assets and liabilities).
Authorized Firms must communicate an investor's order to the Principal
Underwriter prior to the close of the Principal Underwriter's business day to
receive that day's net asset value per Fund share and the public offering price
based thereon. It is the Authorized Firms' responsibility to transmit orders
promptly to the Principal Underwriter, which is a wholly-owned subsidiary of
Eaton Vance.
The Portfolio's net asset value is also determined as of the close of
regular trading on the Exchange by IBT (as custodian and agent for the
Portfolio) based on market or fair value in the manner authorized by the
Trustees of the Portfolio. 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
Portfolio are valued in U.S. dollars at the current exchange rate. For further
information regarding the valuation of the Portfolio's assets, see
"Determination of Net Asset Value" in the Statement of Additional Information.
Eaton Vance Corp. owns 77.3% of the outstanding stock of IBT, the Fund's and the
Portfolio's custodian.
- --------------------------------------------------------------------------------
SHAREHOLDERS MAY DETERMINE THE VALUE OF THEIR INVESTMENT BY MULTIPLYING THE
NUMBER OF FUND SHARES OWNED BY THE CURRENT NET ASSET VALUE.
- --------------------------------------------------------------------------------
HOW TO BUY FUND SHARES
- --------------------------------------------------------------------------------
SHARES OF THE FUND MAY BE PURCHASED FOR CASH OR MAY BE ACQUIRED IN EXCHANGE FOR
SECURITIES. Investors may purchase shares of the Fund through Authorized Firms
at the effective public offering price, which price is based on the effective
net asset value per share plus the applicable sales charge. The Fund receives
the net asset value, while the sales charge is divided between the Authorized
Firm and the Principal Underwriter. The Principal Underwriter will furnish the
names of Authorized Firms to an investor upon request. The Fund may suspend the
offering of shares at any time and may refuse an order for the purchase of
shares.
<PAGE>
The sales charge may vary depending on the size of the purchase and the
number of shares of Eaton Vance funds the investor may already own, any
arrangement to purchase additional shares during a 13-month period or special
purchase programs. Complete details of how investors may purchase shares at
reduced sales charges under a Statement of Intention, Right of Accumulation, or
various employee benefit plans are available from Authorized Firms or from the
Principal Underwriter.
<TABLE>
The current sales charges are:
<CAPTION>
SALES CHARGE SALES CHARGE DEALER COMMISSION
AS PERCENTAGE OF AS PERCENTAGE OF AS PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED OFFERING PRICE
<S> <C> <C> <C>
Under $100,000 ........................... 4.75% 4.99% 4.00%
$100,000 but less than $250,000 .......... 3.75 3.90 3.15
$250,000 but less than $500,000 .......... 2.75 2.83 2.30
$500,000 but less than $1,000,000 ........ 2.00 2.04 1.70
$1,000,000 or more ....................... 0<F1> 0<F1> 0<F2>
<FN>
<F1> No sales charge is payable at the time of purchase on investments of $1
million or more. A contingent deferred sales charge ("CDSC") of 1% will be
imposed on such investments, as described below, in the event of certain
redemption transactions within 18 months of purchase.
<F2> The Principal Underwriter may pay a commission to Authorized Firms who
initiate and are responsible for purchases of $1 million or more as
follows: 1.00% on sales up to $2 million, plus 0.80% on the next $1
million, 0.20% on the next $2 million and 0.08% on the excess over $5
million.
</TABLE>
The Principal Underwriter may at times allow discounts up to the full sales
charge. During periods when the discount includes the full sales charge, such
Firms may be deemed to be underwriters as that term is defined in the Securities
Act of 1933.
The Principal Underwriter may, from time to time, at its own expense,
provide additional incentives to Authorized Firms which employ registered
representatives who sell a minimum dollar amount of the Fund's shares and/or
shares of other funds distributed by the Principal Underwriter. In some
instances, such additional incentives may be offered only to certain Authorized
Firms whose representatives are expected to sell significant amounts of shares.
An initial investment in the Fund must be at least $1,000. Once an account
has been established the investor may send investments of $50 or more at any
time directly to the Fund's transfer agent as follows: The Shareholder Services
Group, Inc., BOS725, P.O. Box 1559, Boston, MA 02104. The $1,000 minimum initial
investment is waived for Bank Draft Investing accounts, which may be established
with an investment of $50 or more. See "Eaton Vance Shareholder Services".
Shares of the Fund may be sold at net asset value to current and retired
Directors and Trustees of Eaton Vance funds, including the Portfolio; to
officers and employees and clients of Eaton Vance and its affiliates; to
registered representatives and employees of Authorized Firms; and bank employees
who refer customers to registered representatives of Authorized Firms; and to
such persons' spouses and children under the age of 21 and their beneficial
accounts. Shares may also be issued at net asset value in connection with the
merger of an investment company with the Fund and to investors making an
investment as part of a fixed fee program whereby an entity unaffiliated with
the Investment Adviser provides multiple investment services, such as
management, brokerage and custody.
No initial sales charge and no contingent deferred sales charge will be
payable or imposed with respect to shares of the Fund purchased by retirement
plans qualifed under Section 401, 403(b) or 457 of the Internal Revenue Code
("Eligible Plans"). In order to purchase shares without a sales charge, the plan
sponsor of an Eligible Plan must notify the transfer agent of the Fund of its
status as an Eligible Plan. Participant accounting services (including trust
fund reconciliation services) will be offered only through third party
recordkeepers and not by EVD. The Fund's Principal Underwriter may pay
commissions to Authorized Firms who initiate and are responsible for purchases
of shares of the Fund by Eligible Plans of up to 1.00% of the amount invested in
such shares.
ACQUIRING FUND SHARES IN EXCHANGE FOR SECURITIES. IBT, as escrow agent, will
receive securities acceptable to Eaton Vance, as Administrator, in exchange for
Fund shares at the applicable public offering price as shown above. The minimum
value of securities or securities and cash accepted for deposit is $5,000.
Securities accepted will be sold by IBT as agent for the account of their owner
on the day of their receipt by IBT or as soon thereafter as possible. The number
of Fund shares to be issued in exchange for securities will be the aggregate
proceeds from the sale of such securities, divided by the applicable public
offering price per Fund share on the day such proceeds are received. Eaton Vance
will use reasonable efforts to obtain the current market price for such
securities but does not guarantee the best available price. Eaton Vance will
absorb any transaction costs, such as commissions, on the sale of the
securities.
Securities determined to be acceptable should be transferred via book entry
or physically delivered, in proper form for transfer, through an Authorized
Firm, together with a completed and signed Letter of Transmittal in approved
form (available from Authorized Firms), as follows:
IN THE CASE OF BOOK ENTRY:
Deliver through Depository Fund Co.
Broker #2212
Investors Bank & Trust Company
For A/C EV Traditional Growth Fund
IN THE CASE OF PHYSICAL DELIVERY:
Investors Bank & Trust Company
Attention: EV Traditional Growth Fund
Physical Securities Processing Settlement Area
89 South Street
Boston, MA 02111
Investors who are contemplating an exchange of securities for shares of the
Fund, or their representatives, must contact Eaton Vance to determine whether
the securities are acceptable before forwarding such securities to IBT. Eaton
Vance reserves the right to reject any securities. Exchanging securities for
Fund shares may create a taxable gain or loss. Each investor should consult his
or her tax adviser with respect to the particular Federal, state and local tax
consequences of exchanging securities for Fund shares.
- --------------------------------------------------------------------------------
IF YOU DON'T HAVE AN AUTHORIZED FIRM, EATON VANCE CAN RECOMMEND ONE.
- --------------------------------------------------------------------------------
HOW TO REDEEM FUND SHARES
- --------------------------------------------------------------------------------
A SHAREHOLDER MAY REDEEM FUND SHARES BY DELIVERING TO THE SHAREHOLDER SERVICES
GROUP, INC., BOS725, P.O. BOX 1559, BOSTON, MASSACHUSETTS 02104, during its
business hours a written request for redemption in good order, plus any share
certificates with executed stock powers. The redemption price will be based on
the net asset value per Fund share next computed after such delivery. Good order
means that all relevant documents must be endorsed by the record owner (s)
exactly as the shares are registered and the signature(s) must be guaranteed by
a member of either the Securities Transfer Association's STAMP program or the
New York Stock Exchange's Medallion Signature Program, or certain banks, savings
and loan institutions, credit unions, securities dealers, securities exchanges,
clearing agencies and registered securities associations as required by a
regulation of the Securities and Exchange Commission and acceptable to The
Shareholder Services Group, Inc. In addition, in some cases, good order may
require the furnishing of additional documents such as where shares are
registered in the name of a corporation, partnership or fiduciary.
Within seven days after receipt of a redemption request in good order by The
Shareholder Services Group, Inc., the Fund will make payment in cash for the net
asset value of the shares as of the date determined above, reduced by the amount
of any Federal income tax required to be withheld. Although the Fund normally
expects to make payment in cash for redeemed shares, the Trust, subject to
compliance with applicable regulations, has reserved the right to pay the
redemption price of shares of the Fund, either totally or partially, by a
distribution in kind of readily marketable securities withdrawn by the Fund from
the Portfolio. The securities so distributed would be valued pursuant to the
Portfolio's valuation procedures. If a shareholder received a distribution in
kind, the shareholder could incur brokerage or other charges in converting the
securities to cash.
To sell shares at their net asset value through an Authorized Firm (a
repurchase), a shareholder can place a repurchase order with the Authorized
Firm, which may charge a fee. The value of such shares is based upon the net
asset value calculated after EVD, as the Fund's agent, receives the order. It is
the Authorized Firm's responsibility to transmit promptly repurchase orders to
EVD. Throughout this Prospectus, the word "redemption" is generally meant to
include a repurchase.
If shares were recently purchased, the proceeds of redemption (or
repurchase) will not be sent until the check (including a certified or cashier's
check) received for the shares purchased has cleared. Payment for shares
tendered for redemption may be delayed up to 15 days from the purchase date when
the purchase check has not yet cleared. Redemptions or repurchases may result in
a taxable gain or loss.
Due to the high cost of maintaining small accounts, the Fund reserves the
right to redeem Fund accounts with balances of less than $1,000. Prior to such a
redemption, shareholders will be given 60 days written notice to make an
additional purchase. Thus, an investor making an initial investment of $1,000
would not be able to redeem shares without being subject to this policy.
However, no such redemption would be required by the Fund if the cause of the
low account balance was a reduction in the net asset value of Fund shares.
If shares have been purchased at net asset value with no initial sales
charge by virtue of the purchase having been in the amount of $1 million or more
and are redeemed within 18 months after the end of the calendar month in which
the purchase was made, a CDSC of 1% will be imposed on such redemption. The CDSC
will be retained by the Principal Underwriter.
The CDSC will be imposed on an amount equal to the lesser of the current
market value or the original purchase price of the shares redeemed. Accordingly,
no CDSC will be imposed on increases in account value above the initial purchase
price, including any dividends or distributions that have been reinvested in
additional shares. In determining whether a CDSC is applicable to a redemption,
the calculation will be made in a manner that results in the lowest possible
rate being charged. It will be assumed that redemptions are made first from any
shares in the shareholder's account that are not subject to a CDSC.
The CDSC is waived for redemptions involving certain liquidation, merger or
acquisition transactions involving other investment companies. If a shareholder
reinvests redemption proceeds within the 30-day period and in accordance with
the conditions set forth under "Eaton Vance Shareholder Services -- Reinvestment
Privilege," the shareholder's account will be credited with the amount of any
CDSC paid on such redeemed shares.
REPORTS TO SHAREHOLDERS
- --------------------------------------------------------------------------------
THE FUND WILL ISSUE TO ITS SHAREHOLDERS SEMI-ANNUAL AND ANNUAL REPORTS
CONTAINING FINANCIAL STATEMENTS. Financial statements included in annual reports
are audited by the Fund's independent certified public accountants. Shortly
after the end of each year, the Fund will furnish all shareholders with
information necessary for preparing Federal and state income tax returns.
THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS
- --------------------------------------------------------------------------------
AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF FUND SHARES, THE FUND'S TRANSFER
AGENT, THE SHAREHOLDER SERVICES GROUP, INC., WILL SET UP A LIFETIME INVESTING
ACCOUNT FOR THE INVESTOR ON THE FUND'S RECORDS. This account is a complete
record of all transactions between the investor and the Fund which at all times
shows the balance of shares owned. The Fund will not issue share certificates
except upon request.
Each time a transaction takes place in a shareholder's account, the
shareholder will receive a statement showing complete details of the transaction
and the current share balance in the account. (Under certain investment plans,
statements may be sent only quarterly.) THE LIFETIME INVESTING ACCOUNT ALSO
PERMITS A SHAREHOLDER TO MAKE ADDITIONAL INVESTMENTS BY SENDING A CHECK FOR $50
OR MORE to The Shareholder Services Group, Inc.
Any questions concerning a shareholder's account or services available may
be directed by telephone to EATON VANCE SHAREHOLDER SERVICES at 800-225-6265,
extension 2, or in writing to The Shareholder Services Group, Inc., BOS725, P.O.
Box 1559, Boston, MA 02104 (please provide the name of the shareholder, the Fund
and the account number).
THE FOLLOWING DISTRIBUTION OPTIONS WILL BE AVAILABLE TO ALL LIFETIME
INVESTING ACCOUNTS and may be changed as often as desired by written notice to
the Fund's dividend disbursing agent, The Shareholder Services Group, Inc.,
BOS725, P.O. Box 1559, Boston, MA 02104. The currently effective option will
appear on each confirmation statement.
Share Option -- Dividends and capital gains will be reinvested in additional
shares.
Income Option -- Dividends will be paid in cash, and capital gains will be
reinvested in additional shares.
Cash Option -- Dividends and capital gains will be paid in cash.
The Share Option will be assigned if no other option is specified.
Distributions, including those reinvested, will be reduced by any withholding
required under the Federal income tax laws.
If the Income Option or Cash Option has been selected, dividend and/or
capital gains distribution checks which are returned by the United States Postal
Service as not deliverable or which remain uncashed for six months or more will
be reinvested in the account at the then current net asset value. Furthermore,
the distribution option on the account will be automatically changed to the
Share Option until such time as the shareholder selects a different option.
DISTRIBUTION INVESTMENT OPTION. In addition to the distribution options set
forth above, dividends and/or capital gains may be invested in additional shares
of another Eaton Vance fund. Before selecting this option, a shareholder should
obtain a prospectus of the other Eaton Vance fund and consider its objectives
and policies carefully.
"STREET NAME" ACCOUNTS. If shares of the Fund are held in a "street name"
account with an Authorized Firm, all recordkeeping, transaction processing and
payments of distributions relating to the beneficial owner's account will be
performed by the Authorized Firm, and not by the Fund and its transfer agent.
Since the Fund will have no record of the beneficial owner's transactions, a
beneficial owner should contact the Authorized Firm to purchase, redeem or
exchange shares, to make changes in or give instructions concerning the account,
or to obtain information about the account. The transfer of shares in a "street
name" account to an account with another dealer or to an account directly with
the Fund involves special procedures and will require the beneficial owner to
obtain historical purchase information about the shares in the account from the
Authorized Firm. Before establishing a "street name" account with an investment
firm, or transferring the account to another investment firm, an investor
wishing to reinvest distributions should determine whether the firm which will
hold the shares allows reinvestment of distributions in "street name" accounts.
- --------------------------------------------------------------------------------
UNDER A LIFETIME INVESTING ACCOUNT A SHAREHOLDER CAN MAKE ADDITIONAL
INVESTMENTS BY SENDING A CHECK FOR $50 OR MORE.
- --------------------------------------------------------------------------------
THE EATON VANCE EXCHANGE PRIVILEGE
- --------------------------------------------------------------------------------
Shares of the Fund may be exchanged for shares of any of the following funds:
Eaton Vance Cash Management Fund, Eaton Vance Income Fund of Boston, Eaton Vance
Municipal Bond Fund L.P., Eaton Vance Tax Free Reserves and any fund in the
Eaton Vance Traditional Group of Funds on the basis of net asset value per share
of each fund at the time of the exchange, provided that such exchange offers are
available only in states where shares of the fund being acquired may be legally
sold.
Each exchange must involve shares which have a net asset value of $1,000.
The exchange privilege may be changed or discontinued without penalty.
Shareholders will be given sixty (60) days notice prior to any termination or
material amendment of the exchange privilege. The Fund does not permit the
exchange privilege to be used for "Market Timing" and may terminate the exchange
privilege for any shareholder account engaged in Market Timing activity. Any
shareholder account for which more than two round-trip exchanges are made within
any twelve month period will be deemed to be engaged in Market Timing.
Furthermore, a group of unrelated accounts for which exchanges are entered
contemporaneously by a financial intermediary will be considered to be engaged
in Market Timing.
Shares of the Fund which are subject to a CDSC may be exchanged into any of
the above funds without incurring the CDSC. The shares acquired in an exchange
may be subject to a CDSC upon redemption. For purposes of computing the CDSC
payable upon redemption of shares acquired in an exchange, the holding period of
the original shares is added to the holding period of the shares acquired in the
exchange.
The Shareholder Services Group, Inc. makes exchanges at the next determined
net asset value after receiving an exchange request in good order (see "How to
Redeem Fund Shares"). Consult The Shareholder Services Group, Inc. for
additional information concerning the exchange privilege. Applications and
prospectuses of the other funds are available from Authorized Firms or the
Principal Underwriter. The prospectus for each fund describes its investment
objectives and policies, and shareholders should obtain a prospectus and
consider these objectives and policies carefully before requesting an exchange.
Shares of certain other funds for which Eaton Vance acts as investment
adviser or administrator may be similarly exchanged for Fund shares at their
respective net asset values per share, but subject to any restrictions or
qualifications set forth in the current prospectus of any such fund.
Telephone exchanges are accepted by The Shareholder Services Group, Inc.
provided the investor has not disclaimed in writing the use of the privilege. To
effect such exchanges, call The Shareholder Services Group, Inc. at 800-
262-1122 or, within Massachusetts, 617-573-9403, Monday through Friday, 9:00
a.m. to 4:00 p.m. (Eastern Standard Time). Shares acquired by telephone exchange
must be registered in the same name(s) and with the same address as the shares
being exchanged. Neither the Fund, the Principal Underwriter nor The Shareholder
Services Group, Inc. will be responsible for the authenticity of exchange
instructions received by telephone; provided that reasonable procedures to
confirm that instructions communicated are genuine have been followed. Telephone
instructions will be tape recorded. In times of drastic economic or market
changes, a telephone exchange may be difficult to implement. An exchange may
result in a taxable gain or loss.
EATON VANCE SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
THE FUND OFFERS THE FOLLOWING SERVICES, WHICH ARE VOLUNTARY, INVOLVE NO EXTRA
CHARGE, AND MAY BE CHANGED OR DISCONTINUED WITHOUT PENALTY AT ANY TIME. Full
information on each of the services described below and an application, where
required, are available from Authorized Firms or the Principal Underwriter. The
cost of administering such services for the benefit of shareholders who
participate in them is borne by the Fund as an expense to all shareholders.
INVEST-BY-MAIL -- FOR PERIODIC SHARE ACCUMULATION: Once the $1,000 minimum
investment has been made, checks of $50 or more payable to the order of the Fund
may be mailed directly to The Shareholder Services Group, Inc., BOS725, P.O. Box
1559, Boston, MA 02104 at any time -- whether or not dividends are reinvested.
The name of the shareholder, the Fund and the account number should accompany
each investment.
BANK DRAFT INVESTING -- FOR REGULAR SHARE ACCUMULATION: Cash investments of $50
or more may be made through the shareholder's checking account via bank draft
each month or quarter. The $1,000 minimum initial investment and small account
redemption policy are waived for these accounts.
STATEMENT OF INTENTION: Purchases of $100,000 or more made over a 13-month
period are eligible for reduced sales charges. See "Statement of Intention and
Escrow Agreement".
RIGHT OF ACCUMULATION: Purchases may qualify for reduced sales charges when the
current market value of holdings (shares at current offering price), plus new
purchases, reaches $100,000 or more. Shares of the Eaton Vance funds mentioned
under "The Eaton Vance Exchange Privilege" may be combined under the Statement
of Intention and Right of Accumulation.
WITHDRAWAL PLAN: A shareholder may draw on shareholdings systematically with
monthly or quarterly checks in an amount specified by the shareholder. A
minimum deposit of $5,000 in shares is required.
REINVESTMENT PRIVILEGE: A SHAREHOLDER WHO HAS REPURCHASED OR REDEEMED SHARES MAY
REINVEST ANY PORTION OR ALL OF THE REPURCHASE OR REDEMPTION PROCEEDS (PLUS THAT
AMOUNT NECESSARY TO ACQUIRE A FRACTIONAL SHARE TO ROUND OFF THE PURCHASE TO THE
NEAREST FULL SHARE) IN SHARES OF THE FUND, or, provided that the shares
repurchased or redeemed have been held for at least 30 days, in shares of any of
the other funds offered by the Principal Underwriter with an initial sales
charge at net asset value, provided that the reinvestment is effected within 30
days after such repurchase or redemption. Shares are sold to a reinvesting
shareholder at the next determined net asset value following timely receipt of a
written purchase order by the Principal Underwriter or by the fund whose shares
are to be purchased (or by such fund's transfer agent). The privilege is also
available to holders of shares of the other funds offered with an initial sales
charge by the Principal Underwriter who wish to reinvest such redemption or
repurchase proceeds in shares of the Fund. If a shareholder reinvests redemption
proceeds within the 30 day period the shareholder's account will be credited
with the amount of any CDSC paid on such redeemed shares. A reinvesting
shareholder may realize a gain or loss for Federal tax purposes as a result of
such repurchase or redemption. Special rules may apply to the computation of
gain or loss and to the deduction of loss on a repurchase or redemption followed
by a reinvestment. See "Distributions and Taxes". Shareholders should consult
their tax advisers concerning the tax consequences of reinvestments.
TAX-SHELTERED RETIREMENT PLANS: Shares of the Fund are available for purchase in
connection with the following tax-sheltered retirement plans:
-- Pension and Profit Sharing Plans for self-employed individuals,
corporations and non-profit organizations
-- Individual Retirement Account Plans for individuals and their non-
employed spouses
-- 403(b) Retirement Plans for employees of public school systems,
hospitals, colleges and other non-profit organizations meeting certain
requirements of the Internal Revenue Code.
Detailed information concerning these plans, including certain exceptions to
minimum investment requirements, and copies of the plans are available from the
Principal Underwriter. This information should be read carefully and
consultation with an attorney or tax adviser may be advisable. The information
sets forth the service fee charged for retirement plans and describes the
Federal income tax consequences of establishing a plan. Under all plans,
dividends distributions will be automatically reinvested in additional shares.
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
It is the present policy of the Fund to make semi-annual distributions of
substantially all of the net investment income allocated to the Fund by the
Portfolio, less the Fund's direct and allocated expenses, as shown on the Fund's
books and to distribute at least annually any realized net capital gains (the
Fund's realized net capital gains generally consist of the net realized capital
gains from the sale of portfolio securities allocated to the Fund by the
Portfolio).
Shareholders may reinvest all distributions in shares of the Fund at net
asset value as of the close of business on the record date.
Distributions by the Fund of ordinary income and net short-term capital
gains and certain net foreign exchange gains allocated to the Fund by the
Portfolio will be taxable as ordinary income, whether received in cash or
reinvested in additional shares. A portion of distributions derived from net
investment income may be eligible for the dividends-received deduction for
corporations. Distributions of long-term capital gains are taxable to
shareholders as such, whether received in cash or reinvested in additional
shares of the Fund and regardless of the length of time shares have been owned
by shareholders. If you purchase shares shortly before the record date of a
distribution, you will pay the full price for the shares and then receive some
portion of the price back as a taxable distribution. Certain distributions
declared in October, November or December and paid the following January will be
taxed to shareholders as if received on December 31 of the year in which they
are declared.
Sales charges paid upon a purchase of shares of the Fund cannot be taken
into account for purposes of determining gain or loss on a redemption or
exchange of the shares before the 91st day after their purchase to the extent
shares of the Fund or of another fund are subsequently acquired pursuant to the
Fund's reinvestment or exchange privilege. In addition, losses realized on a
redemption of Fund shares may be disallowed under certain "wash sale" rules if
within a period beginning 30 days before and ending 30 days after the date of
redemption other shares of the Fund are acquired. Any disregarded or disallowed
amounts will result in an adjustment to the shareholder's tax basis in some or
all of any other shares acquired.
Shareholders will receive annually tax information notices and Forms 1099 to
assist in the preparation of reporting on their Federal and state income tax
returns for the prior calendar year's distributions, proceeds from the
redemption or exchange of Fund shares, and Federal income tax (if any) withheld
by the Fund's Transfer Agent.
In order to qualify as a regulated investment company under the Internal
Revenue Code (the "Code"), the Fund must satisfy certain requirements relating
to the sources of its income, the distribution of its income, and the
diversification of its assets. In satisfying these requirements, the Fund will
treat itself as owning its proportionate share of each of the Portfolio's assets
and as entitled to the income of the Portfolio properly attributable to such
share.
- --------------------------------------------------------------------------------
AS A REGULATED INVESTMENT COMPANY UNDER THE CODE, THE FUND DOES NOT PAY
FEDERAL INCOME OR EXCISE TAXES TO THE EXTENT THAT IT DISTRIBUTES TO
SHAREHOLDERS ITS NET INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS IN
ACCORDANCE WITH THE TIMING REQUIREMENTS IMPOSED BY THE CODE. AS A PARTNERSHIP
UNDER THE CODE, THE PORTFOLIO DOES NOT PAY FEDERAL INCOME OR EXCISE TAXES.
- --------------------------------------------------------------------------------
PERFORMANCE INFORMATION
- ------------------------------------------------------------------------------
FROM TIME TO TIME, THE FUND MAY ADVERTISE ITS YIELD AND/OR AVERAGE ANNUAL TOTAL
RETURN. The current yield for the Fund may advertise its yield, which will be
calculated by dividing the net investment income per share during a recent 30
day period by the maximum offering price per share of the Fund on the last day
of the period and annualizing the resulting figure. From time to time, the Fund
may advertise total return. Total return for 1, 5 and 10 year periods represents
the average annual compounded rate of return on an initial $1,000 investment.
The calculation assumes the maximum sales charge is deducted from the initial
$1,000 investment and all dividend and capital gain distributions are reinvested
at net asset value on the reinvestment dates during the period. Total return may
also be presented for the life of the Fund and/or other specified time periods.
The Fund may also furnish total return calculations based on investments at
various sales charge levels or at net asset value. Any performance data which is
based on the Fund's net asset value per share would be reduced if a sales charge
were taken into account.
Investors should note that the investment results of the Fund will fluctuate
over time, and any presentation of the Fund's current yield or total return for
any prior period should not be considered a representation of what an investment
may earn or what an investor's yield or total return may be in any future
period.
STATEMENT OF INTENTION AND ESCROW AGREEMENT
- --------------------------------------------------------------------------------
TERMS OF ESCROW. If the investor, on an application, makes a Statement of
Intention to invest a specified amount over a thirteen month period, then out of
the initial purchase (or subsequent purchases if necessary) 5% of the dollar
amount specified on the application shall be held in escrow by the escrow agent
in the form of shares (computed to the nearest full share at the public offering
price applicable to the initial purchase hereunder) registered in the investor's
name. All income dividends and capital gains distributions on escrowed shares
will be paid to the investor or to his order.
When the minimum investment so specified is completed, the escrowed shares
will be delivered to the investor. If the investor has an accumulation account
the shares will remain on deposit under his account.
If total purchases under this Statement of Intention are less than the
amount specified, the investor will promptly remit to EVD any difference between
the sales charge on the amount specified and on the amount actually purchased.
If the investor does not within 20 days after written request by EVD or the
financial service firm pay such difference in sales charge, the escrow agent
will redeem an appropriate number of the escrowed shares in order to realize
such difference. Full shares remaining after any such redemption together with
any excess cash proceeds of the shares so redeemed will be delivered to the
investor or to his order by the escrow agent.
In signing the application, the investor irrevocably constitutes and
appoints the escrow agent his attorney to surrender for redemption any or all
escrowed shares with full power of substitution in the premises.
PROVISION FOR RETROACTIVE PRICE ADJUSTMENT. If total purchases made under this
Statement are large enough to qualify for a lower sales charge than that
applicable to the amount specified, all transactions will be computed at the
expiration date of this Statement to give effect to the lower charge. Any
difference in sales charge will be refunded to the investor in cash, or applied
to the purchase of additional shares at the lower charge if specified by the
investor. This refund will be made by the financial service firm and by EVD. If
at the time of the recomputation a firm other than the original firm is placing
the orders, the adjustment will be made only on those shares purchased through
the firm then handling the account.
<PAGE>
INVESTMENT ADVISER OF
GROWTH PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV TRADITIONAL GROWTH FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
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
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EV TRADITIONAL GROWTH FUND
24 FEDERAL STREET
BOSTON, MA 02110
T-GFP
EV TRADITIONAL
GROWTH FUND
PROSPECTUS
MAY 1, 1995
<PAGE>
EV TRADITIONAL GROWTH FUND
Supplement to the Statement of Additional Information
dated January 1, 1995
THE FOLLOWING DISCLOSURE IS ADDED UNDER THE CAPTION "INVESTMENT
OBJECTIVE, POLICIES AND RESTRICTIONS" (see page 2 of the Statement of Additional
Information):
STOCK INDEX FUTURES. Entering into a derivative instrument involves a risk that
the applicable market will move against the Portfolio's position and that the
Portfolio will incur a loss. This loss may exceed the amount of the initial
investment made or the premium received by the Portfolio. Derivative instruments
may sometimes increase or leverage the Portfolio's exposure to a particular
market risk. Leverage enhances the Portfolio's exposure to the price volatility
of derivative instruments it holds. The Portfolio's success in using derivative
instruments to hedge portfolio assets depends on the degree of price correlation
between the derivative instruments and the hedged asset. Imperfect correlation
may be caused by several factors, including temporary price disparities among
the trading markets for the derivative instrument, the assets underlying the
derivative instrument and the Portfolio's assets. During periods of market
volatility, a commodity exchange may suspend or limit trading in an
exchange-traded derivative instrument, which may make the contract temporarily
illiquid and difficult to price. Commodity exchanges may also establish daily
limits on the amount that the price of a futures contract or futures can vary
from the previous day's settlement price. Once the daily limit is reached, no
trades may be made that day at a price beyond the limit. This may prevent the
Portfolio from closing out positions and limiting its losses. Certain provisions
of the Internal Revenue Code of 1986, as amended (the "Code"), limit the extent
to which the Portfolio may purchase and sell derivative instruments. The
Portfolio will engage in transactions in futures contracts and related options
only to the extent such transactions are consistent with the requirements of the
Code for maintaining the qualification of the Fund as a regulated investment
company ("RIC") for Federal income tax purposes.
Transactions using futures contracts and option thereon (other than
options that the Portfolio has purchased) expose the Portfolio to an obligation
to another party. The Portfolio will not enter into any such transactions unless
it owns either (1) an offsetting ("covered") position in securities or futures
contracts, or (2) cash, receivables and short-term debt securities with a value
sufficient at all times to cover its potential obligations not covered as
provided in (1) above. The Portfolio will comply with Securities and Exchange
Commission guidelines regarding cover for these instruments and, if the
guidelines so require, set aside cash, U.S. Government securities or other
liquid, high-grade debt securities in a segregated account with its custodian in
the prescribed amount.
<PAGE>
Assets used as cover or held in a segregated account cannot be sold
while the position in the corresponding futures contract or option is open,
unless they are replaced with other appropriate assets. As a result, the
commitment of a large portion of the Portfolio's assets to cover or segregated
accounts could impede portfolio management or the Portfolio's ability to meet
redemption requests or other current obligations.
The Portfolio may enter into futures contracts, and options on futures
contracts, traded on an exchange regulated by the Commodities Futures Trading
Commission ("CFTC") and on foreign exchanges, but, with respect to foreign
exchange-traded futures contracts and options on such futures contracts, only if
the Investment Adviser determined that trading on each such foreign exchange
does not subject the Portfolio to risks, including credit and liquidity risks,
that are materially greater then the risks associated with trading on
CFTC-regulated exchanges.
Date: June 5, 1995 T-GFSAIS
<PAGE>
STATEMENT OF
ADDITIONAL INFORMATION
January 1, 1995
EV TRADITIONAL GROWTH FUND
24 Federal Street
Boston, Massachusetts 02110
(800) 225-6265
This Statement of Additional Information consists of two parts. Part I
contains information that relates generally to EV Traditional Growth Fund (the
"Fund") and certain other series of Eaton Vance Growth Trust (the "Trust"). Part
II contains information that relates specifically to the Fund. Where
appropriate, Part I includes cross-references to the relevant sections of Part
II that provide additional, Fund-specific information.
TABLE OF CONTENTS
PART I
Investment Objective, Policies and Restrictions ........................... 2
Trustees and Officers ..................................................... 4
Investment Adviser and Administrator ...................................... 6
Custodian ................................................................. 8
Determination of Net Asset Value .......................................... 8
Investment Performance .................................................... 9
Taxes ..................................................................... 10
Portfolio Security Transactions ........................................... 12
Other Information ......................................................... 13
Independent Certified Public Accountants .................................. 14
PART II
Fees and Expenses ........................................................ a-1
Performance Information .................................................. a-2
Services for Accumulation ................................................ a-2
Service for Withdrawal ................................................... a-3
Principal Underwriter .................................................... a-3
Service Plan ............................................................. a-4
Additional Tax Matters ................................................... a-5
Control Persons and Principal Holders of Securities ...................... a-5
Financial Statements ..................................................... a-6
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY THE CURRENT PROSPECTUS OF EV TRADITIONAL GROWTH FUND DATED
JANUARY 1, 1995, AS SUPPLEMENTED FROM TIME TO TIME. THIS STATEMENT OF ADDITIONAL
INFORMATION SHOULD BE READ IN CONJUNCTION WITH SUCH PROSPECTUS, A COPY OF WHICH
MAY BE OBTAINED WITHOUT CHARGE BY CONTACTING EATON VANCE DISTRIBUTORS, INC. (THE
"PRINCIPAL UNDERWRITER") (SEE BACK COVER FOR ADDRESS AND PHONE NUMBER).
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART I
The following provides information about the Fund and certain other series
of the Trust.
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS
The investment objective of the Fund, a diversified series of the Trust, is
to achieve capital growth. The Fund currently seeks to achieve its investment
objective by investing its assets in the Growth Portfolio (the "Portfolio"), a
separate registered investment company with the same investment objective as the
Fund and substantially the same investment policies and restrictions as the
Fund. The Portfolio seeks to achieve its investment objective by investing in a
carefully selected and continuously managed portfolio consisting primarily of
equity securities.
The Trustees of the Trust may withdraw the Fund's investment from the
Portfolio at any time, if they determine that it is in the best interests of the
Fund to do so. Upon any such withdrawal, the Fund's assets would be invested in
another investment company with substantially the same investment objective,
policies and restrictions as those of the Fund or directly in investment
securities in accordance with the Portfolio's investment policies, as described
below. Except as indicated below, the approval of the Fund's shareholders would
not be required to change the Portfolio's investment policies discussed below,
including those concerning security transactions.
The Portfolio's investment policy is flexible, and the Portfolio may invest
in all kinds of domestic and foreign companies in seeking to achieve its
objective of capital growth. Income is subordinate to growth; however, the
Portfolio will earn dividend or interest income to the extent that it receives
dividends or interest from its investments. As in any investment which
fluctuates in value, the management of the Portfolio cannot, of course, assure
the achievement of this objective or eliminate risk. It is believed, however,
that through broad and selective diversification and through informed and
discriminating investment supervision, the risks of investing will be reduced
and the shareholder's opportunities for a rewarding participation in the capital
growth sought by the Portfolio will be enhanced.
It is the policy of the Portfolio to invest primarily in equity securities
(common stocks or securities convertible into common stocks). The Portfolio may
also invest in other securities and obligations of all kinds, including
preferred stocks, warrants, rights, bonds, repurchase agreements, money market
instruments and other evidences of indebtedness. The Portfolio's holdings of
debt securities, preferred stocks, short-term obligations or cash would normally
be employed to provide a reserve for future equity purchases or when the adviser
believes a more defensive investment posture is warranted.
It is the policy of the Portfolio to diversify its investments among
industries and accordingly no investment shall be made which will cause
investments in any one industry to exceed 25% of the Portfolio's assets (at
market).
While it is not the policy of the Portfolio to trade actively in securities
for quick profits, the management will dispose of securities without regard to
the time they have been held if such action seems advisable, subject to
satisfaction of certain tax requirements.
Investing in securities issued by companies whose principal business
activities are outside the United States may involve significant risks not
present in domestic investments. For example, there is generally less publicly
available information about foreign companies, particularly those not subject to
the disclosure and reporting requirements of the United States securities laws.
Foreign issuers are generally not bound by uniform accounting, auditing, and
financial reporting requirements and standards of practice comparable to those
applicable to domestic issuers. Investments in foreign securities also involve
the risk of possible adverse changes in investment or exchange control
regulations, expropriation or confiscatory taxation, limitation on the removal
of funds or other assets of the Portfolio, political or financial instability or
diplomatic and other developments which could affect such investments.
Furthermore, economies of particular countries or areas of the world may differ
favorably or unfavorably from the economy of the United States. It is
anticipated that in most cases the best available market for foreign securities
will be on exchanges or in over-the-counter markets located outside of the
United States. Foreign stock markets, while growing in volume and
sophistication, are generally not as developed as those in the United States,
and securities of some foreign issuers (particularly those located in developing
countries) may be less liquid and more volatile than securities of comparable
U.S. companies. In addition, foreign brokerage commissions are generally higher
than commissions on securities traded in the United States and may be
non-negotiable. In general, there is less overall governmental supervision and
regulation of foreign securities markets, broker-dealers, and issuers than in
the United States.
Since investments in companies whose principal business activities are
located outside of the United States will frequently involve currencies of
foreign countries, and since assets of the Portfolio may temporarily be held in
bank deposits in foreign currencies during the completion of investment
programs, the value of the assets of the Portfolio as measured in U.S. dollars
may be affected favorably or unfavorably by changes in foreign currency exchange
rates and exchange control regulations. The Portfolio may conduct its foreign
currency exchange transactions on a spot (i.e., cash) basis at the spot rate
prevailing in the foreign currency exchange market or through entering into
contracts to purchase or sell foreign currencies at a future date (i.e., a
"forward foreign currency exchange" contract or "forward" contract). It may
convert currency on a spot basis from time to time, and investors should be
aware of the costs of currency conversion. Although foreign exchange dealers do
not charge a fee for conversion, they do realize a profit based on the
difference (the "spread") between the prices at which they are buying and
selling various currencies. Thus, a dealer may offer to sell a foreign currency
to the Portfolio at one rate, while offering a lesser rate of exchange should
the Portfolio desire to resell that currency to the dealer. Forward contracts
are traded in the interbank market conducted directly between currency traders
(usually large commercial banks) and their customers. A forward contract
generally has no deposit requirement, and no commissions are charged at any
stage for trades. When the Portfolio enters into a contract for the purchase or
sale of a security denominated in a foreign currency, it may desire to "lock in"
the U.S. dollar price of the security. By entering into a forward contract for
the purchase or sale, for a fixed amount of U.S. dollars, of the amount of
foreign currency involved in the underlying security transaction, the Portfolio
will be able to protect itself against a possible loss resulting from an adverse
change in the relationship between the U.S. dollar and the subject foreign
currency during the period between the date the security is purchased or sold
and the date on which payment is made or received. Although a forward contract
will minimize the risk of loss due to a decline in the value of the hedged
currency, it also limits any potential gain which might result should the value
of such currency increase.
As a matter of fundamental investment policy, the Fund may not:
(1) With respect to 75% of the total assets of the Fund, purchase the securities
of any issuer if such purchase at the time thereof would cause more than 5% of
its total assets (taken at market value) to be invested in the securities of
such issuer, or purchase securities of any issuer if such purchase at the time
thereof would cause more than 10% of the total voting securities of such issuer
to be held by the Fund, except obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities and except securities of other
investment companies;
(2) Borrow money or issue senior securities except as permitted by the
Investment Company Act of 1940;
(3) Purchase securities on margin (but the Fund may obtain such short-term
credits as may be necessary for the clearance of purchase and sales of
securities);
(4) Underwrite or participate in the marketing of securities of others;
(5) Make an investment in any one industry if such investment would cause
investments in such industry to exceed 25% of the Fund's total assets, at market
value at the time of such investment (other than securities issued or guaranteed
by the U.S. Government or its agencies or instrumentalities);
(6) Purchase or sell real estate, although it may purchase and sell securities
which are secured by real estate and securities of companies which invest or
deal in real estate;
(7) Purchase or sell commodities or commodity contracts for the purchase or sale
of physical commodities; or
(8) Make loans to any person except by (a) the acquisition of debt securities
and making portfolio investments (b) entering into repurchase agreements or
(c) lending portfolio securities.
Notwithstanding the investment policies and restrictions of the Fund, the
Fund may invest all of its investable assets in an open-end management
investment company with substantially the same investment objective, policies
and restrictions as the Fund.
The Fund will not issue bonds, debentures or senior equity securities, and
this policy will not be changed unless authorized by a vote of the shareholders
of the Fund.
The Portfolio has adopted substantially the same fundamental investment
restrictions as the foregoing numbered investment restrictions adopted by the
Fund; such restrictions cannot be changed without the approval of a "majority of
the outstanding voting securities" of the Portfolio, which as used in this
Statement of Additional Information means the lesser of (a) 67% of the
outstanding voting securities of the Portfolio present or represented by proxy
at a meeting if the holders of more than 50% of the outstanding voting
securities of the Portfolio are present or represented at the meeting or (b)
more than 50% of the outstanding voting securities of the Portfolio. The term
"voting securities" as used in this paragraph has the same meaning as in the
Investment Company Act of 1940 (the "1940 Act"). Whenever the Trust is requested
to vote on a change in the investment restrictions of the Portfolio, the Trust
will hold a meeting of Fund shareholders and will cast its vote as instructed by
the shareholders.
The Fund and the Portfolio have each adopted the following nonfundamental
investment policies which may be changed with respect to the Fund by the
Trustees of the Trust without approval by the Fund's shareholders or may be
changed with respect to the Portfolio by the Trustees of the Portfolio with or
without the approval of the Fund or the Portfolio's other investors. As a matter
of nonfundamental policy, the Fund and the Portfolio may not: (a) purchase
securities of companies which, including predecessors, have not been in
continuous operation for at least three years, except that 5% of its total
assets (taken at market value) may be invested in such companies and exempted
from this restriction are U.S. Government securities, securities of issuers
which are rated by at least one nationally recognized rating organization,
municipal obligations and obligations issued or guaranteed by any foreign
government or its agencies or instrumentalities; (b) purchase or retain in its
portfolio any securities issued by an issuer any of whose officers, directors,
trustees or security holders is an officer or trustee of the Trust or the
Portfolio or is a member, officer, director or trustee of any investment adviser
of the Trust or the Portfolio, if after the purchase of the securities of such
issuer by the Fund or the Portfolio one or more of such persons owns
beneficially more than 1/2 of 1% of the shares or securities or both (all taken
at market value) of such issuer and such persons owning more than 1/2 of 1% of
such shares or securities together own beneficially more than 5% of such shares
or securities or both (all taken at market value); (c) sell or contract to sell
any security which it does not own unless by virtue of its ownership of other
securities it has at the time of sale a right to obtain securities equivalent in
kind and amount to the securities sold and provided that if such right is
conditional the sale is made upon the same conditions; or (d) invest more than
15% of net assets in investments which are not readily marketable, including
restricted securities and repurchase agreements maturing in more than seven
days. Restricted securities for the purposes of this limitation do not include
securities eligible for resale pursuant to Rule 144A of the Securities Act of
1933 that the Board of Trustees of the Trust or the Portfolio, or its delegate,
determine to be liquid, based upon the trading markets for the specific
security.
The Portfolio may purchase U.S. Government securities and concurrently enter
into repurchase agreements with the seller under which the seller agrees to
repurchase such securities at the Portfolio's cost plus interest within a
specified time (normally one day). While repurchase agreements involve certain
risks not associated with direct investments in U.S. Government securities, the
Portfolio follows procedures designed to minimize such risks. These procedures
include effecting repurchase transactions only with large, well- capitalized
banks. In addition, the Portfolio's repurchase agreements will provide that the
value of the collateral underlying the repurchase agreement will always be at
least equal to the repurchase price, including any accrued interest earned on
the repurchase agreement. In the event of a default or bankruptcy by a selling
bank, the Portfolio will seek to liquidate such collateral. However, the
exercise of the Portfolio's right to liquidate such collateral could involve
certain costs or delays and, to the extent that proceeds from any sale upon a
default of the obligation to repurchase are less than the repurchase price, the
Portfolio could suffer a loss.
In order to permit the sale of shares of the Fund in certain states, the
Fund may make commitments more restrictive than the fundamental policies
described above. Should the Fund determine that any such commitment is no longer
in the best interests of the Fund and its shareholders, it will revoke the
commitment by terminating sales of its shares in the state(s) involved.
TRUSTEES AND OFFICERS
The Trustees and officers of the Trust and the Portfolio are listed below.
Except as indicated, each individual has held the office shown or other offices
in the same company for the last five years. Unless otherwise noted, the
business address of each Trustee and officer is 24 Federal Street, Boston,
Massachusetts 02110, which is also the address of the Fund's investment adviser,
Boston Management and Research ("BMR"), which is a wholly-owned subsidiary of
Eaton Vance Management ("Eaton Vance"); Eaton Vance's parent, Eaton Vance Corp.
("EVC"); and of BMR's and Eaton Vance's trustee, Eaton Vance, Inc. ("EV"). Eaton
Vance and EV are both wholly-owned subsidiaries of EVC. Those Trustees and
officers who are "interested persons" of the Trust, the Portfolio, BMR, Eaton
Vance, EVC or EV as defined in the 1940 Act by virtue of their affiliation with
any one or more of the Trust, the Portfolio, BMR, Eaton Vance, EVC or EV, are
indicated by an asterisk (*).
TRUSTEES OF THE TRUST AND THE PORTFOLIO
JAMES B. HAWKES, PRESIDENT AND TRUSTEE*
Executive Vice President of BMR, Eaton Vance, EVC and EV, and a Director of EVC
and EV. Director or Trustee and officer of various investment companies
managed by Eaton Vance or BMR.
LANDON T. CLAY, VICE PRESIDENT AND TRUSTEE*
Chairman of BMR, Eaton Vance, EVC and EV and a Director of EVC and EV. Director
or Trustee and officer of various investment companies managed by Eaton Vance
or BMR.
PETER F. KIELY, VICE PRESIDENT AND TRUSTEE*
Vice President of BMR, Eaton Vance and EV. Director or Trustee and officer of
various investment companies managed by Eaton Vance or BMR. Mr. Kiely was
elected Trustee of the Trust on December 16, 1991.
DONALD R. DWIGHT, TRUSTEE
President of Dwight Partners, Inc. (a corporate relations and communications
company) founded in 1988; Chairman of the Board of Newspapers of New England,
Inc. since 1983. Director or Trustee of various investment companies managed
by Eaton Vance or BMR.
Address: Clover Mill Lane, Lyme, New Hampshire 03768
SAMUEL L. HAYES, III, TRUSTEE
Jacob J. Schiff Professor of Investment Banking, Harvard University Graduate
School of Business Administration. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: Harvard Business School, Soldiers Field Road, Boston, Massachusetts
02163
NORTON H. REAMER, TRUSTEE
President and Director, United Asset Management Corporation (a holding company
owning institutional investment management firms); Chairman, President and
Director, The Regis Fund, Inc. (mutual fund). Director or Trustee of various
investment companies managed by Eaton Vance or BMR.
Address: One International Place, Boston, Massachusetts 02110
JOHN L. THORNDIKE, TRUSTEE
Director of Fiduciary Trust Company. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: 175 Federal Street, Boston, Massachusetts 02110
JACK L. TREYNOR, TRUSTEE
Investment Adviser and Consultant. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: 504 Via Almar, Palos Verdes Estates, California 90274
OFFICERS OF THE TRUST AND THE PORTFOLIO
M. DOZIER GARDNER, VICE PRESIDENT*
President and Chief Executive Officer of BMR, Eaton Vance, EVC and EV, and
Director of EVC and EV. Director or Trustee and officer of various investment
companies managed by Eaton Vance or BMR.
JAMES L. O'CONNOR, TREASURER*
Vice President of BMR, Eaton Vance, and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
WILLIAM J. AUSTIN, JR., ASSISTANT TREASURER*
Assistant Vice President of BMR, Eaton Vance and EV. Officer of various
investment companies managed by Eaton Vance or BMR. Mr. Austin was elected
Assistant Treasurer of the Trust on December 16, 1991.
THOMAS OTIS, SECRETARY*
Vice President and Secretary of BMR, Eaton Vance, EVC and EV. Officer of various
investment companies managed by Eaton Vance or BMR.
JANET E. SANDERS, ASSISTANT TREASURER AND ASSISTANT SECRETARY*
Vice President of BMR, Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
Messrs. Thorndike (Chairman), Hayes and Reamer, are members of the Special
Committee of the Board of Trustees of the Trust and of the Portfolio. The
Special Committee's functions include a continuous review of the Trust's
contractual relationship with the administrator, the Portfolio's contractual
relationship with the investment adviser, making recommendations to the Trustees
regarding the compensation of those Trustees who are not members of the Eaton
Vance organization, and making recommendations to the Trustees regarding
candidates to fill vacancies, as and when they occur, in the ranks of those
Trustees who are not "interested persons" of the Trust, the Portfolio, or the
Eaton Vance organization.
Messrs. Treynor (Chairman) and Dwight are members of the Audit Committee of
the Board of Trustees of the Trust and of the Portfolio. The Audit Committee's
functions include making recommendations to the Trustees regarding the selection
of the independent accountants, and reviewing with such accountants and the
Treasurer of the Trust and of the Portfolio matters relative to accounting and
auditing practices and procedures, accounting records, internal accounting
controls, and the functions performed by the custodian and transfer agent of the
Trust and of the Portfolio.
The fees and expenses of those Trustees of the Trust who are not members of
the Eaton Vance or BMR organizations are paid by the Fund and other series of
the Trust. The Trustees of the Trust also receive additional payments from other
investment companies for which Eaton Vance provides investment advisory,
administrative or management services or BMR provides investment advisory
services for serving in similar capacities. For information concerning the
compensation received by the Trustees of the Trust, see "Fee and Expenses" in
Part II of this Statement of Additional Information.
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 a Trustees Deferred Compensation Plan (the
"Plan"). Under the Plan, an eligible Trustee may elect to have his deferred fees
invested by the Portfolio in the shares of one or more funds in the Eaton Vance
Family of Funds, and the amount paid to the Trustees under the Plan will be
determined based upon the performance of such investments. Deferral of Trustees'
fees in accordance with the Plan will have a negligible effect on the
Portfolio's assets, liabilities, and net income per share, and will not obligate
the Portfolio to retain the services of any Trustee or obligate the Portfolio to
pay any particular level of compensation to the Trustee.
INVESTMENT ADVISER AND ADMINISTRATOR
The Portfolio engages BMR as its investment adviser pursuant to an
Investment Advisory Agreement dated August 1, 1994. BMR or Eaton Vance acts as
investment adviser to investment companies and various individual and
institutional clients with combined assets under management of approximately $15
billion.
Eaton Vance, its affiliates and its predecessor companies have been managing
assets of individuals and institutions since 1924 and managing investment
companies since 1931. They maintain a large staff of experienced fixed-income
and equity investment professionals to service the needs of its clients. The
fixed-income division focuses on all kinds of taxable investment- grade and
high-yield securities, tax-exempt investment-grade and high-yield securities,
and U.S. Government securities. The equity division covers stocks ranging from
blue chip to emerging growth companies.
BMR manages the investments and affairs of the Portfolio subject to the
supervision of the Portfolio's Board of Trustees. BMR furnishes to the Portfolio
investment research, advice and supervision, furnishes an investment program and
determines what securities will be purchased, held or sold by the Portfolio and
what portion, if any, of the Portfolio's assets will be held uninvested. The
Investment Advisory Agreement requires BMR to pay the salaries and fees of all
officers and Trustees of the Portfolio who are members of the BMR organization
and all personnel of BMR performing services relating to research and investment
activities. The Portfolio is responsible for all expenses not expressly stated
to be payable by BMR under the Investment Advisory Agreement, including, without
implied limitation, (i) expenses of maintaining the Portfolio and continuing its
existence, (ii) registration of the Portfolio under the 1940 Act, (iii)
commissions, fees and other expenses connected with the acquisition, holding and
disposition of securities and other investments, (iv) auditing, accounting and
legal expenses, (v) taxes and interest, (vi) governmental fees, (vii) expenses
of issue, sale and redemption of interests in the Portfolio, (viii) expenses of
registering and qualifying the Portfolio and interests in the Portfolio under
Federal and state securities laws and of preparing and printing registration
statements or other offering statements or memoranda for such purposes and for
distributing the same to investors, and fees and expenses of registering and
maintaining registrations of the Portfolio and of the Portfolio's placement
agent as broker-dealer or agent under state securities laws, (ix) expenses of
reports and notices to investors and of meetings of investors and proxy
solicitations therefor, (x) expenses of reports to governmental officers and
commissions, (xi) insurance expenses, (xii) association membership dues, (xiii)
fees, expenses and disbursements of custodians and subcustodians for all
services to the Portfolio (including without limitation safekeeping of funds,
securities and other investments, keeping of books, accounts and records, and
determination of net asset values, book capital account balances and tax capital
account balances), (xiv) fees, expenses and disbursements of transfer agents,
dividend disbursing agents, investor servicing agents and registrars for all
services to the Portfolio, (xv) expenses for servicing the accounts of
investors, (xvi) any direct charges to investors approved by the Trustees of the
Portfolio, (xvii) compensation and expenses of Trustees of the Portfolio who are
not members of BMR's organization, and (xviii) such non-recurring items as may
arise, including expenses incurred in connection with litigation, proceedings
and claims and the obligation of the Portfolio to indemnify its Trustees,
officers and investors with respect thereto.
Under the Investment Advisory Agreement with the Portfolio, BMR receives a
monthly advisory fee of 5/96 of 1% (equivalent to 5/8 of 1% annually) of average
daily net assets of the Portfolio up to and including $300 million, and 1/24 of
1% (equivalent to 1/2 of 1% annually) of average monthly net assets over $300
million. For additional information about the fees paid to the Investment
Adviser, see "Fees and Expenses" in Part II of this Statement of Additional
Information.
The Investment Advisory Agreement with BMR remains in effect until February
28, 1995. It may be continued indefinitely thereafter so long as such
continuance after February 28, 1995 is approved at least annually (i) by the
vote of a majority of the Trustees of the Portfolio who are not interested
persons of the Portfolio or of BMR cast in person at a meeting specifically
called for the purpose of voting on such approval and (ii) by the Board of
Trustees of the Portfolio or by vote of a majority of the outstanding voting
securities of the Portfolio. The Agreement may be terminated at any time without
penalty on sixty days' written notice by the Board of Trustees of either party
or by vote of the majority of the outstanding voting securities of the
Portfolio, and the Agreement will terminate automatically in the event of its
assignment. The Agreement provides that BMR may render services to others and
may permit other fund clients and other corporations and organizations to use
the words "Eaton Vance" or "Boston Management and Research" in their names. The
Agreement also provides that BMR shall not be liable for any loss incurred in
connection with the performance of its duties, or action taken or omitted under
that Agreement, in the absence of willful misfeasance, bad faith, gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties thereunder, or for any losses sustained
in the acquisition, holding or disposition of any security or other investment.
As indicated in the Prospectus, Eaton Vance serves as Administrator of the
Fund, but receives no compensation for providing administrative services to the
Fund. Under its Administrative Services Agreement with the Fund, Eaton Vance has
been engaged to administer the Fund's affairs, subject to the supervision of the
Trustees of the Trust, and shall furnish for the use of the Fund office space
and all necessary office facilities, equipment and personnel for administering
the affairs of the Fund. The Fund pays all of its own expenses including,
without limitation, (i) expenses of maintaining the Fund and continuing its
existence, (ii) registration of the Trust under the 1940 Act, (iii) commissions,
fees and other expenses connected with the purchase or sale of securities and
other investments, (iv) auditing, accounting and legal expenses, (v) taxes and
interest, (vi) governmental fees, (vii) expenses of issue, sale, repurchase and
redemption of shares, (viii) expenses of registering and qualifying the Fund and
its shares under federal and state securities laws and of preparing and printing
prospectuses for such purposes and for distributing the same to shareholders and
investors, and fees and expenses of registering and maintaining registrations of
the Fund and of the Fund's principal underwriter, if any, as broker-dealer or
agent under state securities laws, (ix) expenses of reports and notices to
shareholders and of meetings of shareholders and proxy solicitations therefor,
(x) expenses of reports to governmental officers and commissions, (xi) insurance
expenses, (xii) association membership dues, (xiii) fees, expenses and
disbursements of custodians and subcustodians for all services to the Fund
(including without limitation safekeeping of funds, securities and other
investments, keeping of books and accounts and determination of net asset
values), (xiv) fees, expenses and disbursements of transfer agents, dividend
disbursing agents, shareholder servicing agents and registrars for all services
to the Fund, (xv) expenses for servicing shareholder accounts, (xvi) any direct
charges to shareholders approved by the Trustees of the Trust, (xvii)
compensation and expenses of Trustees of the Trust who are not members of the
Eaton Vance organization, and (xviii) such non-recurring items as may arise,
including expenses incurred in connection with litigation, proceedings and
claims and the obligation of the Trust to indemnify its Trustees and officers
with respect thereto.
A commitment has been made to a state securities authority that Eaton Vance
will take certain actions, if necessary, so that the Fund's expenses will not
exceed expense limitation requirements of such state. The commitment may be
amended or rescinded by Eaton Vance in response to changes in the requirements
of the state or for other reasons.
BMR is a wholly-owned subsidiary of Eaton Vance. Eaton Vance and EV are both
wholly-owned subsidiaries of EVC. BMR and Eaton Vance are both Massachusetts
business trusts, and EV is the trustee of BMR and Eaton Vance. The Directors of
EV are Landon T. Clay, H. Day Brigham, Jr., M. Dozier Gardner, James B. Hawkes
and Benjamin A. Rowland, Jr. The Directors of EVC consist of the same persons
and John G. L. Cabot and Ralph Z. Sorenson. Mr. Clay is chairman, and Mr.
Gardner is president and chief executive officer of EVC, BMR, Eaton Vance and
EV. All of the issued and outstanding shares of Eaton Vance and of EV are owned
by EVC. All of the issued and outstanding shares of BMR are owned by Eaton
Vance. All shares of the outstanding Voting Common Stock of EVC are deposited in
a Voting Trust which expires December 31, 1996, the Voting Trustees of which are
Messrs. Brigham, Clay, Gardner, Hawkes and Rowland. The Voting Trustees have
unrestricted voting rights for the election of Directors of EVC. All of the
outstanding voting trust receipts issued under said Voting Trust are owned by
certain of the officers of BMR and Eaton Vance who are also officers or
Directors of EVC and EV. As of December 31, 1994, Messrs. Clay, Gardner and
Hawkes each owned 24% of such voting trust receipts, and Messrs. Rowland and
Brigham owned 15% and 13%, respectively, of such voting trust receipts. Messrs.
Clay, Gardner, Hawkes and Otis, who are officers or Trustees of the Trust, are
members of the EVC, Eaton Vance, BMR and EV organizations. Messrs. Austin, Kiely
and O'Connor and Ms. Sanders, are officers or Trustees of the Trust and/or the
Portfolio and all are also members of the BMR, Eaton Vance and EV organizations.
BMR will receive the fees paid under the Investment Advisory Agreement.
Eaton Vance owns all of the stock of Energex Corporation, which is engaged
in oil and gas operations. EVC owns all of the stock of Marblehead Energy Corp.
(which engages in oil and gas operations) and 77.3% of the stock of Investors
Bank & Trust Company, which provides custodial, trustee and other fiduciary
services to investors, including individuals, employee benefit plans,
corporations, investment companies, savings banks and other institutions. In
addition, Eaton Vance owns all the stock of Northeast Properties, Inc., which is
engaged in real estate investment, consulting and management. EVC owns all the
stock of Fulcrum Management, Inc. and MinVen, Inc., which are engaged in the
development of precious metal properties. EVC, BMR, Eaton Vance and EV may also
enter into other businesses.
EVC and its affiliates and its officers and employees from time to time have
transactions with various banks, including the Fund's custodian, Investors Bank
& Trust Company. It is Eaton Vance's opinion that the terms and conditions of
such transactions were not and will not be influenced by existing or potential
custodial or other relationships between the Fund and such banks.
CUSTODIAN
Investors Bank & Trust Company ("IBT"), 24 Federal Street, Boston,
Massachusetts (a 77.3% owned subsidiary of EVC) acts as custodian for the Fund
and the Portfolio. IBT has the custody of all cash and securities representing
the Fund's interest in the Portfolio, has custody of all the Portfolio's assets,
maintains the general ledger of the Portfolio and the Fund and computes the
daily net asset value of interests in the Portfolio and the net asset value of
shares of the Fund. In such capacity it attends to details in connection with
the sale, exchange, substitution, transfer or other dealings with the
Portfolio's investments, receives and disburses all funds, and performs various
other ministerial duties upon receipt of proper instructions from the Fund and
the Portfolio. IBT charges fees which are believed to be competitive within the
industry. A portion of the fee relates to custody, bookeeping and valuation
services and is based upon a percentage of Fund and Portfolio net assets and a
portion of the fee relates to activity charges, primarily the number of
portfolio transactions. These fees are then reduced by a credit for cash
balances of the particular investment company at the custodian equal to 75% of
the 91-day, U.S. Treasury Bill auction rate applied to the particular investment
company's average daily collected balances for the week. In view of the
ownership of EVC in IBT, the Portfolio is treated as a self-custodian pursuant
to Rule 17f-2 under the 1940 Act, and the Portfolio's investments held by IBT as
custodian are thus subject to additional examinations by the Portfolio's
independent auditors as called for by such Rule. For additional information
about the fees paid to the Custodian, see "Fees and Expenses" in Part II of this
Statement of Additional Information.
DETERMINATION OF NET ASSET VALUE
The net asset value of the shares of the Fund is determined by IBT (as agent
and custodian for the Fund) in the manner described under "Valuing Fund Shares"
in the Fund's current Prospectus. The Portfolio's net asset value is also
computed by IBT (as agent and custodian for the Portfolio) by subtracting the
liabilities of the Portfolio from the value of its total assets. Securities
listed on securities exchanges or in the NASDAQ National Market are valued at
closing sale 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. Fixed-income securities (other than short-term obligations), including
listed securities and securities for which price quotations are available, will
normally be valued on the basis of market valuations furnished by a pricing
service. The pricing service uses information with respect to transactions in
bonds, quotations from bond dealers, market transactions in comparable
securities, various relationships between securities, and yield to maturity in
determining value. Short-term obligations maturing in sixty days or less are
valued at amortized cost, which approximates market. Other assets are valued at
fair value using methods determined in good faith by the Trustees. The Fund and
the Portfolio will be closed for business and will not price their respective
shares or interests on the following business holidays: New Year's Day,
Washington's Birthday, Good Friday (a New York Stock Exchange holiday), Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
Each investor in the Portfolio, including the Fund, may add to or reduce its
investment in the Portfolio on each day the New York Stock Exchange (the
"Exchange") is open for trading ("Portfolio Business Day") as of the close of
regular trading on the Exchange (the "Portfolio Valuation Time"). The value of
each investor's interest in the Portfolio will be determined by multiplying the
net asset value of the Portfolio by the percentage, determined on the prior
Portfolio Business Day, which represented that investor's share of the aggregate
interests in the Portfolio on such prior day. Any additions or withdrawals for
the current Portfolio Business Day will then be recorded. The investor's
percentage of the aggregate interest in the Portfolio will then be recomputed as
a percentage equal to the fraction (i) the numerator of which is the value of
such investor's investment in the Portfolio as of the Portfolio Valuation Time
on the prior Portfolio Business Day plus or minus, as the case may be, the
amount of any additions to or withdrawals from the investor's investment in the
Portfolio on the current Portfolio Business Day and (ii) the denominator of
which is the aggregate net asset value of the Portfolio as of the Portfolio
Valuation Time on the prior Portfolio Business Day plus or minus, as the case
may be, the amount of the net additions to or withdrawals from the aggregate
investment in the Portfolio on the current Portfolio Business Day by all
investors in the Portfolio. The percentage so determined will then be applied to
determine the value of the investor's interest in the Portfolio for the current
Portfolio Business Day.
INVESTMENT PERFORMANCE
Total return is computed by calculating the rates of return over 1, 5 and 10
year periods on a $1,000 investment and determining the average annual
compounded total return. The calculation assumes the maximum sales charge is
deducted from the initial $1,000 investment and all dividend and capital gain
distributions are reinvested at net asset value on the reinvestment dates during
the period. Total return may also be presented for the life of the Fund and/or
other specified time periods. For information concerning the total return of the
Fund, see "Performance Information" in Part II of this Statement of Additional
Information.
The Fund's yield is computed pursuant to a standardized formula by dividing
its net investment income per share earned during a recent thirty-day period by
the maximum offering price (including the maximum sales charge) per share on the
last day of the period and annualizing the resulting figure. Net investment
income per share is calculated from the yields to maturity of all debt
obligations held by the Portfolio based on the market value of such obligations
and from dividends from equity securities based on stated annual rates,
exclusive of special or extra distributions, reduced by accrued Fund expenses
for the period, with the resulting number being divided by the average daily
number of shares outstanding and entitled to receive distributions during the
period. Yield calculations assume a maximum sales charge equal to 4.75% of the
public offering price. Actual yield may be affected by variations in sales
charges on investments.
The Fund's total return may be compared to the Consumer Price Index and
various domestic securities indices, for example: Standard & Poor's 400 Stock
Index, Standard & Poor's 500 Stock Index, Merrill Lynch U.S. Treasury (15-year
plus) Index, Lehman Brothers Government/Corporate Bond Index, and the Dow Jones
Industrial Average. The Fund's total return and comparisons with these indices
may be used in advertisements and in information furnished to present or
prospective shareholders.
Information used in advertisements and in materials furnished to present or
prospective shareholders may include statistics, data and performance studies
prepared by independent organizations, (e.g. Ibbotson Associates, Standard &
Poor's Corporation, Merrill Lynch, Pierce, Fenner & Smith, Inc., Bloomberg,
L.P., Dow Jones & Company, Inc., and The Federal Reserve Board) or included in
various publications (e.g. The Wall Street Journal, Barron's and The Decade:
Wealth of Investments in U.S. Stocks, Bonds, Bills & Inflation) reflecting the
investment performance or return achieved by various classes and types of
investments (e.g. common stocks, small company stocks, long-term corporate
bonds, long-term government bonds, intermediate-term government bonds, U.S.
Treasury bills) over various periods of time. This information may be used to
illustrate the benefits of long-term investments in common stocks.
From time to time, information about the Fund's portfolio allocation and
holdings may be included in advertisements and other material furnished to
present and prospective shareholders.
The Portfolio's asset allocations on November 30, 1994, were as follows:
PERCENT OF NET ASSETS
---------------------
U.S. common stocks 84.1%
Foreign common stocks 9.3%
Cash & equivalents 6.6%
-----
Total 100%
The Portfolio's ten largest common stock holdings on November 30, 1994,
were:
COMPANY PERCENT OF NET ASSETS
------- ---------------------
Reuters Holding PLC 3.9%
Coca-Cola Co. 3.8%
Tele-Communications Class A 3.4%
American International Group 3.4%
Intel Corp. 3.3%
Astra AB A Free Shares 3.3%
Home Depot 3.2%
Phillips Petroleum Co. 3.0%
Loctite Corp. 2.9%
Lotus Development Corp. 2.9%
-----
Total 33.1%
From time to time, evaluations of the Fund's performance made by independent
sources; e.g. Lipper Analytical Services, Inc., CDA/Wiesenberger and
Morningstar, Inc., may be used in advertisements and in information furnished to
present or prospective shareholders.
Information used in advertisements and materials furnished to present or
prospective shareholders may include examples and performance illustrations of
the cumulative change in various levels of investments in the Fund for various
periods of time and at various prices per share. Such examples and illustrations
may assume that all dividends and capital gain distributions are reinvested in
additional shares and may also show separately the value of shares acquired from
such reinvestments as well as the total value of all shares acquired for such
investments and reinvestments.
Information used in advertisements and in materials furnished to present and
prospective shareholders may include statements or illustrations relating to the
appropriateness of types of securities and/or mutual funds which may be employed
to meet specific financial goals, such as (1) funding retirement, (2) paying for
children's education, and (3) financially supporting aging parents. These three
financial goals may be referred to in such advertisements or materials as the
"Triple Squeeze."
TAXES
See "Distributions and Taxes" in the Fund's current Prospectus.
Each series of the Trust is treated as a separate entity for Federal income
tax purposes. The Fund will elect to be treated and intends to qualify each year
as a regulated investment company under the Internal Revenue Code (the "Code").
Accordingly, the Fund intends to satisfy certain requirements relating to
sources of its income and diversification of its assets and to distribute its
net investment income and net realized capital gains in accordance with the
timing requirements imposed by the Code, so as to avoid any Federal income or
excise tax to the Fund. Because the Fund invests substantially all of its assets
in the Portfolio, the Portfolio normally must satisfy the applicable source of
income and diversification requirements in order for the Fund to satisfy them.
The Portfolio will allocate at least annually among its investors, including the
Fund, 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. The Portfolio will make allocations to the Fund in
accordance with the Code and applicable regulations and will make moneys
available for withdrawal at appropriate times and in sufficient amounts to
enable the Fund to satisfy the tax distribution requirements that apply to the
Fund and that must be satisfied in order to avoid Federal income and/or excise
tax on the Fund. For purposes of applying the requirements of the Code regarding
qualification as a regulated investment company, the Fund will be deemed (i) to
own its proportionate share of each of the assets of the Portfolio and (ii) to
be entitled to the gross income of the Portfolio attributable to such share.
In order to avoid Federal excise tax, the Code requires that the Fund
distribute by December 31 of each calendar year at least 98% of its ordinary
income (not including tax-exempt income) for such year, and at least 98% of the
excess of its realized capital gains over its realized capital losses, after
reduction by any available capital loss carryforwards, and 100% of any income
from the prior year (as previously computed) that was not paid out during such
year and on which the Fund was not taxed. Under current law, provided that the
Fund qualifies as a regulated investment company for Federal income tax purposes
and the Portfolio is treated as a partnership for Massachusetts and Federal tax
purposes, neither the Fund nor the Portfolio is liable for any income, excise or
franchise tax in the Commonwealth of Massachusetts.
Foreign exchange gains and losses realized by the Portfolio in connection
with investments in foreign securities and forward contracts may be treated as
ordinary income and losses under special tax rules. Certain forward contracts of
the Portfolio may be required to be marked to market (i.e., treated as if closed
out) on the last day of each taxable year, and any gain or loss realized with
respect to these contracts may be required to be treated as 60% long-term and
40% short-term gain or loss. Positions of the Portfolio in foreign securities
and offsetting forward contracts may be treated as "straddles" and be subject to
other special rules that may affect the amount, timing and character of
Portfolio distributions to shareholders. The Portfolio will limit its foreign
currency hedging activities to the extent necessary to preserve its
qualification as a regulated investment company.
The Portfolio may be subject to foreign withholding taxes with respect to
income on certain foreign securities. These taxes may be reduced or eliminated
under the terms of an applicable U.S. income tax treaty. As it is not expected
that more than 50% of the value of the total assets of the Fund, taking into
account its allocable share of the Portfolio's total assets, at the close of any
taxable year of the Fund will consist of securities issued by foreign
corporations, the Fund will not be eligible to pass through to shareholders
their proportionate share of any foreign taxes paid by the Portfolio and
allocated to the Fund, with the result that shareholders of the Fund will not be
entitled to take any foreign tax credits or deductions for foreign taxes paid by
the Portfolio and allocated to the Fund. Certain uses of foreign currency and
investment by the Portfolio in certain "passive foreign investment companies"
may be limited or a tax election may be made, if available, in order to avoid
imposition of a tax on the Fund.
A portion of distributions made by the Fund which are derived from dividends
received by the Portfolio from domestic corporations and allocated to the Fund
may qualify for the dividends-received deduction for corporations. The
dividends-received deduction for corporate shareholders is reduced to the extent
the shares of the Fund with respect to which the dividends are received are
treated as debt-financed under the Federal income tax law and is eliminated if
the shares are deemed to have been held for less than 46 days. Receipt of
certain distributions qualifying for the deduction may result in reduction of
the tax basis of the corporate shareholder's shares.
Distributions of the excess of net long-term capital gains over net
short-term capital losses (including any capital losses carried forward from
prior years) earned by the Portfolio and allocated to the Fund are taxable to
shareholders of the Fund as long-term capital gains, whether received in cash or
in additional shares and regardless of the length of time their shares have been
held. Certain distributions declared in October, November or December and paid
the following January will be taxed to shareholders as if received on December
31 of the year in which they are declared.
Distributions of the Fund (including a portion of any distributions eligible
for the dividends-received deduction) may give rise to or increase an
alternative minimum tax for individuals and corporations depending upon the
shareholder's particular tax situation.
Any loss realized upon the redemption or exchange of shares of the Fund with
a tax holding period of 6 months or less will be treated as a long-term capital
loss to the extent of any distribution of net long-term capital gains with
respect to such shares.
Special tax rules apply to Individual Retirement Accounts ("IRAs") and other
retirement plans and persons investing through such plans should consult their
tax advisers for more information. The deductibility of such contributions may
be restricted or eliminated for particular shareholders.
The foregoing discussion does not address the special tax rules applicable
to certain classes of investors, such as retirement plans, tax-exempt entities,
insurance companies and financial institutions. Shareholders should consult
their own tax advisers with respect to special tax rules that may apply in their
particular situations, as well as the state, local or foreign tax consequences
of investing in the Fund.
PORTFOLIO SECURITY TRANSACTIONS
Decisions concerning the execution of portfolio security transactions of the
Portfolio, including the selection of the market and the broker-dealer firm, are
made by BMR. BMR is also responsible for the execution of transactions for all
other accounts managed by it.
BMR places the security transactions of the Portfolio and of all other
accounts managed by it for execution with many broker-dealer firms. BMR uses its
best efforts to obtain execution of portfolio transactions at prices which are
advantageous to the Portfolio and (when a disclosed commission is being charged)
at reasonably competitive commission rates. In seeking such execution, BMR will
use its best judgment in evaluating the terms of a transaction, and will give
consideration to various relevant factors, including without limitation the size
and type of the transaction, the general execution and operational capabilities
of the broker-dealer, the nature and character of the market for the security,
the confidentiality, speed and certainty of effective execution required for the
transaction, the reputation, reliability, experience and financial condition of
the broker-dealer, the value and quality of services rendered by the
broker-dealer in other transactions, and the reasonableness of the commission,
if any. Transactions on United States stock exchanges and other agency
transactions involve the payment by the Portfolio of negotiated brokerage
commissions. Such commissions vary among different broker-dealer firms, and a
particular broker-dealer may charge different commissions according to such
factors as the difficulty and size of the transaction and the volume of business
done with such broker-dealer. Transactions in foreign securities usually involve
the payment of fixed brokerage commissions, which are generally higher than
those in the United States. There is generally no stated commission in the case
of securities traded in the over-the-counter markets, but the price paid or
received by the Portfolio usually includes an undisclosed dealer markup or
markdown. In an underwritten offering the price paid by the Portfolio often
includes a disclosed fixed commission or discount retained by the underwriter or
dealer. Although commissions paid on portfolio security transactions will, in
the judgment of BMR, be reasonable in relation to the value of the services
provided, commissions exceeding those which another firm might charge may be
paid to broker-dealers who were selected to execute transactions on behalf of
the Portfolio and BMR's other clients in part for providing brokerage and
research services to BMR.
As authorized in Section 28(e) of the Securities Exchange Act of 1934, a
broker or dealer who executes a portfolio transaction on behalf of the Portfolio
may receive a commission which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if BMR
determines in good faith that such commission was reasonable in relation to the
value of the brokerage and research services provided. This determination may be
made on the basis of either that particular transaction or on the basis of the
overall responsibilities which BMR and its affiliates have for accounts over
which they exercise investment discretion. In making any such determination, BMR
will not attempt to place a specific dollar value on the brokerage and research
services provided or to determine what portion of the commission should be
related to such services. Brokerage and research services may include advice as
to the value of securities, the advisability of investing in, purchasing, or
selling securities, and the availability of securities or purchasers or sellers
of securities; furnishing analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy and the performance
of accounts; and effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement); and the "Research
Services" referred to in the next paragraph.
It is a common practice in the investment advisory industry for the advisers
of investment companies, institutions and other investors to receive research,
statistical and quotation services, data, information and other services,
products and materials which assist such advisers in the performance of their
investment responsibilities ("Research Services") from broker-dealer firms which
execute portfolio transactions for the clients of such advisers and from third
parties with which these broker-dealers have arrangements. Consistent with this
practice, BMR receives Research Services from many broker-dealer firms with
which BMR places the Portfolio transactions and from third parties with which
these broker-dealers have arrangements. These Research Services include such
matters as general economic and market reviews, industry and company reviews,
evaluations of securities and portfolio strategies and transactions,
recommendations as to the purchase and sale of securities and other portfolio
transactions, financial, industry and trade publications, news and information
services, pricing and quotation equipment and services, and research oriented
computer hardware, software, data bases and services. Any particular Research
Service obtained through a broker-dealer may be used by BMR in connection with
client accounts other than those accounts which pay commissions to such
broker-dealer. Any such Research Service may be broadly useful and of value to
BMR in rendering investment advisory services to all or a significant portion of
its clients, or may be relevant and useful for the management of only one
client's account or of a few clients' accounts, or may be useful for the
management of merely a segment of certain clients' accounts, regardless of
whether any such account or accounts paid commissions to the broker-dealer
through which such Research Service was obtained. The advisory fee paid by the
Portfolio is not reduced because BMR receives such Research Services. BMR
evaluates the nature and quality of the various Research Services obtained
through broker-dealer firms and attempts to allocate sufficient commissions to
such firms to ensure the continued receipt of Research Services which BMR
believes are useful or of value to it in rendering investment advisory services
to its clients.
Subject to the requirement that BMR shall use its best efforts to seek to
execute Portfolio security transactions at advantageous prices and at reasonably
competitive commission rates or spreads, BMR is authorized to consider as a
factor in the selection of any broker-dealer firm with whom Portfolio orders may
be placed the fact that such firm has sold or is selling shares of the Fund or
of other investment companies sponsored by BMR or Eaton Vance. This policy is
not inconsistent with a rule of the National Association of Securities Dealers,
Inc., which rule provides that no firm which is a member of the Association
shall favor or disfavor the distribution of shares of any particular investment
company or group of investment companies on the basis of brokerage commissions
received or expected by such firm from any source.
Securities considered as investments for the Portfolio may also be
appropriate for other investment accounts managed by BMR or its affiliates. BMR
will attempt to allocate equitably portfolio security transactions among the
Portfolio and the portfolios of its other investment accounts whenever decisions
are made to purchase or sell securities by the Portfolio and one or more of such
other accounts simultaneously. In making such allocations, the main factors to
be considered are the respective investment objectives of the Portfolio and such
other accounts, the relative size of portfolio holdings of the same or
comparable securities, the availability of cash for investment by the Portfolio
and such accounts, the size of investment commitments generally held by the
Portfolio and such accounts and the opinions of the persons responsible for
recommending investments to the Portfolio and such accounts. While this
procedure could have a detrimental effect on the price or amount of the
securities available to the Portfolio from time to time, it is the opinion of
the Trustees of the Trust and the Portfolio that the benefits available from the
BMR organization outweigh any disadvantage that may arise from exposure to
simultaneous transactions. For the brokerage commissions paid by the Portfolio,
see "Fees and Expenses" in Part II of this Statement of Additional Information.
OTHER INFORMATION
On August 18, 1992 the Trust changed its name from Eaton Vance Growth Fund
to Eaton Vance Growth Trust. The Trust is a Massachusetts business trust
established in 1989 as the successor to Eaton Vance Growth Fund, Inc., a
Massachusetts corporation, which changed its name from Vance, Sanders Common
Stock Fund, Inc. on November 16, 1981. Such name was changed from Boston Common
Stock Fund, Inc. on December 29, 1972. It was originally organized as a Canadian
corporation in 1954, at which time it was known as Canada General Fund Limited.
Eaton Vance, pursuant to its agreement with the Trust, controls the use of the
words "Eaton Vance" in the Fund's name and may use the words "Eaton Vance" in
other connections and for other purposes.
As permitted by Massachusetts law, there will normally be no meetings of
shareholders for the purpose of electing Trustees unless and until such time as
less than a majority of the Trustees of the Trust holding office have been
elected by shareholders. In such an event the Trustees then in office will call
a shareholders' meeting for the election of Trustees. Except for the foregoing
circumstances and unless removed by action of the shareholders in accordance
with the Trust's by-laws, the Trustees shall continue to hold office and may
appoint successor Trustees.
The Trust's by-laws provide that no person shall serve as a Trustee if
shareholders holding two-thirds of the outstanding shares have removed him from
that office either by a written declaration filed with the Trust's custodian or
by votes cast at a meeting called for that purpose. The by-laws further provide
that under certain circumstances the shareholders may call a meeting to remove a
Trustee and that the Trust is required to provide assistance in communicating
with shareholders about such a meeting.
The Trust's Declaration of Trust may be amended by the Trustees when
authorized by vote of a majority of the outstanding voting securities of the
Trust affected by the amendment. The Trustees may also amend the Declaration of
Trust without the vote or consent of shareholders to change the name of the
Trust or to make such other changes as do not have a materially adverse effect
on the rights or interests of shareholders or if they deem it necessary to
conform the Declaration to the requirements of applicable Federal laws or
regulations. The Trust's by-laws provide that the Fund will indemnify its
Trustees and officers against liabilities and expenses incurred in connection
with any litigation or proceeding in which they may be involved because of their
offices with the Trust. However, no indemnification will be provided to any
Trustee or officer for any liability to the Trust or its shareholders by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.
Under Massachusetts law, if certain conditions prevail, shareholders of a
Massachusetts business trust (such as the Fund) could be deemed to have personal
liability for the obligations of the Trust. Numerous investment companies
registered under the 1940 Act have been formed as Massachusetts business trusts,
and management is not aware of an instance where such liability has been
imposed. The Trust's Declaration of Trust contains an express disclaimer of
liability on the part of the Fund shareholders and the Trust's By-laws provide
that the Trust shall assume the defense on behalf of any Fund shareholders.
Moreover, the Trust's By-laws also provide for indemnification out of the
property of the Fund of any shareholder held personally liable solely by reason
of being or having been a shareholder for all loss or expense arising from such
liability. The assets of the Fund are readily marketable and will ordinarily
substantially exceed its liabilities. In light of the nature of the Fund's
business and the nature of its assets, management believes that the possibility
of the Fund's liability exceeding its assets, and therefore the shareholder's
risk of personal liability, is extremely remote.
In accordance with the Declaration of Trust of the Portfolio, there will
normally be no meetings of the investors for the purpose of electing Trustees
unless and until such time as less than a majority of the Trustees holding
office have been elected by investors. In such an event the Trustees of the
Portfolio then in office will call an investors' meeting for the election of
Trustees. Except for the foregoing circumstances and unless removed by action of
the investors in accordance with the Portfolio's Declaration of Trust, the
Trustees shall continue to hold office and may appoint successor Trustees.
The Declaration of Trust of the Portfolio provides that no person shall
serve as a Trustee if investors holding two-thirds of the outstanding interest
have removed him from that office either by a written declaration filed with the
Portfolio's custodian or by votes cast at a meeting called for that purpose. The
Declaration of Trust further provides that under certain circumstances the
investors may call a meeting to remove a Trustee and that the Portfolio is
required to provide assistance in communicating with investors about such a
meeting.
The right to redeem shares of the Fund can be suspended and the payment of
the redemption price deferred when the Exchange is closed (other than for
customary weekend and holiday closings), during periods when trading on the
Exchange is restricted as determined by the Commission, or during any emergency
as determined by the Commission which makes it impracticable for the Portfolio
to dispose of its securities or value its assets, or during any other period
permitted by order of the Commission for the protection of investors.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Coopers & Lybrand LLP, One Post Office Square, Boston, Massachusetts are the
independent accountants for the Fund and the Portfolio, providing audit
services, tax return preparation, and assistance and consultation with respect
to the preparation of filings with the Securities and Exchange Commission.
For the financial statements of the Fund and the Portfolio see "Financial
Statements" in Part II of this Statement of Additional Information.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART II
The following information relates to EV Traditional Growth Fund. On July 27,
1994 the Fund became a series of the Trust and redesignated its name from Eaton
Vance Growth Fund to EV Traditional Growth Fund.
FEES AND EXPENSES
INVESTMENT ADVISER
As of August 31, 1994, the Portfolio has net assets of $131,535,869. For the
period from the Portfolio's start of business, August 2, 1994, to the fiscal
year ended August 31, 1994, the Portfolio paid BMR advisory fees of $64,233
(equivalent to 0.61% (annualized) of the Portfolio's average daily net assets
for such period). Prior to the close of business on August 1, 1994 (when the
Fund transferred substantially all of its assets to the Portfolio in exchange
for an interest in the Portfolio), the Fund retained Eaton Vance as its
investment adviser. For the period from September 1, 1993 to August 1, 1994, the
Fund paid Eaton Vance advisory fees of $777,308 (equivalent to 0.63%
(annualized) of the Fund's average daily net assets for such period). For the
fiscal years ended August 31, 1993 and 1992, the Fund paid Eaton Vance advisory
fees of $902,236 and $897,576 respectively.
ADMINISTRATOR
As stated under "Investment Adviser and Administrator" in Part I of this
Statement of Additional Information, the Administrator receives no compensation
for providing administrative services to the Fund.
CUSTODIAN
For the fiscal year ended August 31, 1994, the Fund paid IBT $72,776. For
the period from the start of business, August 2, 1994, to the fiscal year ended
August 31, 1994, the Portfolio paid IBT $3,948.
BROKERAGE COMMISSIONS
For the period from September 1, 1993 to August 1, 1994, the Fund paid
brokerage commissions of $275,173 on portfolio security transactions, of which
approximately $261,973 was paid in respect of portfolio security transactions
aggregating approximately $174,390,224 to firms which provided some Research
Services to Eaton Vance. For the period from Autust 2, 1994 to the fiscal year
ended August 31, 1994, the Portfolio paid borkerage commissions of $33,546 on
portfolio transactions, of which approximately $27,546 was paid in respect of
portfolio transactions aggregating approximately $13,421,460 to firms which
provide some Research Services to Eaton Vance.
During the fiscal years ended August 31, 1993, and 1992, the Fund paid
brokerage commissions of $279,600 and $288,661, respectively, on portfolio
security transactions. Of the total brokerage commission of $279,600 paid during
the fiscal year ended August 31, 1993, approximately $258,744 was paid in
respect of portfolio security transactions aggregating approximately
$172,838,057 to firms which provided some Research Services to Eaton Vance
(although many of such firms may have been selected in any particular
transaction primarily because of their execution capabilities).
PRINCIPAL UNDERWRITER
The total sales charges for sale of shares of the Fund during the fiscal
years ended August 31, 1994, 1993 and 1992, were $54,164, $68,513 and $91,692,
respectively, of which $7,156, $10,760 and $14,511, respectively, was received
by the Principal Underwriter. For the fiscal years ended August 31, 1994, 1993
and 1992, Authorized Firms received $47,007, $57,752 and $77,181, respectively,
from the total sales charges. For the fiscal year ended August 31, 1994, the
Fund paid the Principal Underwriter $817.50 for repurchase transactions handled
by the Principal Underwriter (being $2.50 for each repurchase transaction
handled by the Principal Underwriter).
TRUSTEES
The Trustees of the Trust, as a group, received aggregate fees of $8,947
from the Fund in their capacities as Trustees of the Trust for the fiscal year
ended August 31, 1994.
PERFORMANCE INFORMATION
The tables below indicate the total return (percent change in net asset
value with all distributions reinvested) on a hypothetical investment of $1,000
in the Fund covering the ten, five and one year periods ended August 31, 1994.
<TABLE>
<CAPTION>
VALUE OF A $1,000 INVESTMENT
TOTAL RETURN TOTAL RETURN
VALUE OF EXCLUDING SALES CHARGE INCLUDING SALES CHARGE
INVESTMENT INVESTMENT AMOUNT OF INVESTMENT ---------------------------- ----------------------------
PERIOD DATE INVESTMENT<F1> ON 8/31/94 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
10 Years Ended 8/31/94 8/31/84 $953.20 $2,857.59 199.79% 11.60% 185.55% 11.06%
5 Years Ended 8/31/94 8/31/89 $952.17 $1,311.71 37.76% 6.62% 31.22% 5.58%
1 Year Ended 8/31/94 8/31/93 $952.78 $ 947.98 -0.50% -0.50% -5.23% -5.23%
<FN>
<F1> Initial investment less current maximum sales charge of 4.75%
</FN>
<CAPTION>
PERCENTAGE CHANGES DURING THE TEN YEAR PERIOD ENDED 8/31/94
NET ASSET VALUE TO NET ASSET VALUE MAXIMUM OFFERING PRICE TO NET ASSET VALUE
WITH ALL DISTRIBUTIONS REINVESTED WITH ALL DISTRIBUTIONS REINVESTED
FISCAL -------------------------------------------------------- -----------------------------------------------------
YEAR AVERAGE AVERAGE
ENDED ANNUAL CUMULATIVE ANNUAL ANNUAL CUMULATIVE ANNUAL
----- ------ ---------- ------ ------ ---------- ------
<C> <C> <C> <C> <C> <C> <C>
8/31/85 16.29% 18.77% 8.98% 10.76% 13.13% 6.36%
8/31/86 29.63% 53.96% 15.47% 23.47% 46.65% 13.61%
8/31/87 34.03% 106.36% 19.85% 27.67% 96.56% 18.41%
8/31/88 -18.96% 67.24% 10.83% -22.81% 59.29% 9.76%
8/31/89 32.90% 122.26% 14.24% 26.59% 111.70% 13.31%
8/31/90 -2.65% 116.37% 11.66% -7.27% 106.10% 10.88%
8/31/91 23.24% 166.66% 13.04% 17.39% 154.00% 12.36%
8/31/92 7.23% 185.93% 12.38% 2.13% 172.35% 11.78%
8/31/93 7.63% 207.74% 11.90% 2.51% 193.12% 11.35%
8/31/94 -0.50% 199.79% 11.60% -5.23% 185.55% 11.06%
<FN>
<F2> Based on current maximum sales charge of 4.75%
</FN>
</TABLE>
Past performance is not indicative of future results. Investment return and
principal value will fluctuate; shares, when redeemed, may be worth more or less
than their original cost.
SERVICES FOR ACCUMULATION
The following services are voluntary, involve no extra charge other than the
sales charge included in the offering price, and may be changed or discontinued
without penalty at any time.
INVEST-BY-MAIL--FOR PERIODIC SHARE ACCUMULATION. Once the $1,000 minimum
investment has been made, checks of $50 or more payable to the order of the Fund
may be mailed directly to The Shareholder Services Group, Inc., BOS725, P.O. Box
1559, Boston, MA 02104 at any time. The name of the shareholder and his account
number should accompany each investment.
BANK DRAFT INVESTING--FOR REGULAR SHARE ACCUMULATION. Cash investments of $50 or
more made through the shareholder's checking account via bank draft each month
or quarter. The $1,000 minimum initial investment and small account redemption
policy are waived for Bank Draft Investing accounts.
INTENDED QUANTITY INVESTMENT--STATEMENT OF INTENTION. If it is anticipated that
$100,000 or more of Fund shares and shares of the other continuously offered
open-end funds listed under "The Eaton Vance Exchange Privilege" in the current
Prospectus of the Fund will be purchased within a 13-month period, a Statement
of Intention should be signed so that shares may be obtained at the same reduced
sales charge as though the total quantity were invested in one lump sum. Shares
held under Right of Accumulation (see below) as of the date of the Statement
will be included toward the completion of the Statement. The Statement
authorizes the Transfer Agent to hold in escrow sufficient shares (5% of the
dollar amount specified in the Statement) which can be redeemed to make up any
difference in sales charge on the amount intended to be invested and the amount
actually invested. Execution of a Statement does not obligate the shareholder to
purchase or the Fund to sell the full amount indicated in the Statement, and
should the amount actually purchased during the 13-month period be more or less
than that indicated on the Statement, price adjustments will be made. For sales
charges and other information on quantity purchases, see "How to Buy Fund
Shares" in the Fund's current Prospectus. Any investor considering signing a
Statement of Intention should read it carefully.
RIGHT OF ACCUMULATION--CUMULATIVE QUANTITY DISCOUNT. The applicable sales charge
level for the purchase of Fund shares is calculated by taking the dollar amount
of the current purchase and adding it to the value (calculated at the maximum
current offering price) of the shares the shareholder owns in his account(s) in
the Fund and in the other continuously offered open-end funds listed under "The
Eaton Vance Exchange Privilege" in the current Prospectus of the Fund for which
Eaton Vance acts as adviser or administrator at the time of purchase. The sales
charge on the shares being purchased will then be at the rate applicable to the
aggregate. For example, if the shareholder owned shares valued at $80,000 in EV
Traditional Investors Fund, and purchased an additional $20,000 of Fund shares,
the sales charge for the $20,000 purchase would be at the rate of 3.75% of the
offering price (3.90% of the net amount invested) which is the rate applicable
to single transactions of $100,000. For sales charges on quantity purchases, see
"How to Buy Fund Shares" in the Fund's current Prospectus. Shares purchased (i)
by an individual, his spouse and their children under the age of twenty-one, and
(ii) by a trustee, guardian or other fiduciary of a single trust estate or a
single fiduciary account, will be combined for the purpose of determining
whether a purchase will qualify for the Right of Accumulation and if qualifying,
the applicable sales charge level.
For any such discount to be made available, at the time of purchase a
purchaser or his Authorized Firm must provide Eaton Vance Distributors, Inc.
(the "Principal Underwriter") (in the case of a purchase made through an
Authorized Firm) or the Transfer Agent (in the case of an investment made by
mail) with sufficient information to permit verification that the purchase order
qualifies for the accumulation privilege. Corfirmation of the order is subject
to such verification. The Right of Accumulation privilege may be amended or
terminated at any time as to purchases occurring thereafter.
SERVICE FOR WITHDRAWAL
By a standard agreement, the Trust's Transfer Agent will send to the
shareholder regular monthly or quarterly payments of any designated amount based
upon the value of the shares held. The checks will be drawn from share
redemptions and hence are a return of principal. Income dividends and capital
gain distributions in connection with withdrawal accounts will be credited at
net asset value as of the record date for each distribution. Continued
withdrawals in excess of current income will eventually use up principal,
particularly in a period of declining market prices.
To use this service, at least $5,000 in cash or shares at the public
offering price, (i.e., net asset value plus the applicable sales charge) will
have to be deposited with the Transfer Agent. The maintenance of a withdrawal
plan concurrently with purchases of additional Fund shares would be
disadvantageous because of the sales charge included in such purchases. A
shareholder may not have a withdrawal plan in effect at the same time he has
authorized Bank Draft Investing or is otherwise making regular purchases of Fund
shares. Either the shareholder, the Transfer Agent or the Principal Underwriter
will be able to terminate the withdrawal plan at any time without penalty.
PRINCIPAL UNDERWRITER
Shares of the Fund may be continuously purchased at the public offering
price through certain financial service firms ("Authorized Firms") which have
agreements with Eaton Vance Distributors, Inc., the Principal Underwriter. The
Principal Underwriter is a wholly-owned subsidiary of Eaton Vance. The public
offering price is the net asset value next computed after receipt of the order,
plus, where applicable, a variable percentage (sales charge) depending upon the
amount of purchase as indicated by the sales charge table set forth in the
prospectus. Such table is applicable to purchases of the Fund alone or in
combination with purchases of the other funds offered by the Principal
Underwriter, made at a single time by (i) an individual, or an individual, his
spouse and their children under the age of twenty-one, purchasing shares for his
or their own account; and (ii) a trustee or other fiduciary purchasing shares
for a single trust estate or a single fiduciary account.
The table is also presently applicable to (1) purchases of Fund shares,
alone or in combination with purchases of any of the other funds offered by the
Principal Underwriter through one dealer aggregating $100,000 or more made by
any of the persons enumerated above within a thirteen-month period starting with
first purchase pursuant to a written Statement of Intention, in the form
provided by the Underwriter, which includes provisions for a price adjustment
depending upon the amount actually purchased within such period (a purchase not
made pursuant to such Statement may be included thereunder if the Statement is
filed within 90 days of such purchase); or (2) purchases of the Fund pursuant to
the Right of Accumulation and declared as such at the time of purchase.
Subject to the applicable provisions of the 1940 Act, the Fund may issue
shares at net asset value in the event that an investment company (whether a
regulated or private investment company or a personal holding company) is merged
or consolidated with or acquired by the Fund. Normally no sales charges will be
paid in connection with an exchange of Fund shares for the assets of such
investment company.
Shares may be sold at net asset value to any officer, director, trustee,
general partner or employee of the Fund, the Portfolio or any investment company
for which Eaton Vance or BMR acts as investment adviser, any investment
advisory, agency, custodial or trust account managed or administered by Eaton
Vance or by any parent, subsidiary or other affiliate of Eaton Vance, or any
officer, director or employee of any parent, subsidiary or other affiliate of
Eaton Vance. The terms "officer," "director," "trustee," "general partner" or
"employee" as used in this paragraph include any such person's spouse and minor
children, and also retired officers, directors, trustees, general partners and
employees and their spouses and minor children. Shares of the Fund may also be
sold at net asset value to registered representatives and employees of certain
Authorized Firms and to such persons' spouses and children under the age of 21
and their beneficial accounts.
The Trust reserves the right to suspend or limit the offering of shares of
the Fund to the public at any time.
The Principal Underwriter acts as principal in selling shares of the Fund
under the distribution agreement with the Trust on behalf of the Fund. The
expenses of printing copies of prospectuses used to offer shares to financial
service firms or investors and other selling literature and of advertising are
borne by the Principal Underwriter. The fees and expenses of qualifying and
registering and maintaining qualifications and registrations of the Fund and its
shares under Federal and state securities laws are borne by the Fund. The
distribution agreement is renewable annually by the Board of Trustees of the
Trust (including a majority of its Trustees who are not interested persons of
the Principal Underwriter or the Trust), may be terminated on six months' notice
by either party, and is automatically terminated upon assignment. The Principal
Underwriter distributes Fund shares on a "best efforts" basis under which it is
required to take and pay for only such shares as may be sold. The Principal
Underwriter allows Authorized Firms discounts from the applicable public
offering price which are alike for all Firms. In the case of the maximum sales
charge the Authorized Firm retains 4% of the public offering price (4.20% of the
net amount invested) and the Principal Underwriter retains 0.75% of the public
offering price (0.79% of the net amount invested). However, the Principal
Underwriter may allow, upon notice to all Authorized Firms with whom it has
agreements, discounts up to the full sales charge during the periods specified
in the notice. During periods when the discount includes the full sales charge,
such Firms may be deemed to be underwriters as that term is defined in the
Securities Act of 1933.
The Fund has authorized the Principal Underwriter to act as its agent in
repurchasing shares at the rate of $2.50 for each repurchase transaction handled
by the Principal Underwriter. The Principal Underwriter estimates that the
expenses incurred by it in acting as repurchase agent for the Fund will exceed
the amounts paid therefor by the Fund.
SERVICE PLAN
In addition to the fees and expenses described under "Investment Adviser and
Administrator" in Part I of this Statement of Additional Information, the Trust
on behalf of the Fund has adopted a Service Plan (the "Plan") designed to meet
the requirements of Rule 12b-1 (the "Rule") under the 1940 Act and the service
fee requirements of the revised sales charge rule of the National Association of
Securities Dealers, Inc. Pursuant to such Rule, the Plan has been approved by
the independent Trustees of the Trust, who have no direct or indirect financial
interest in the Plan and by all of the Trustees of the Trust on behalf of the
Fund. The Plan amends and replaces the Trust's original distribution plan which
was approved by the Fund's shareholders. (Management believes service fee
payments are not distribution expenses governed by the Rule, but has chosen to
have the Plan approved as if the Rule were applicable.)
The Plan provides that the Fund may make payments of service fees for
personal services and/or the maintenance of shareholder accounts to the
Principal Underwriter, Authorized Firms and other persons in amounts not
exceeding .25% of the Fund's average daily net assets for any fiscal year. The
Trustees have implemented the Plan by authorizing the Fund to make quarterly
service fee payments to the Principal Underwriter and Authorized Firms in
amounts not expected to exceed .25% of that portion of the Fund's average daily
net assets for any fiscal year which is attributable to shares of the Fund sold
on or after July 1, 1989 by such persons and remaining outstanding for at least
twelve months.
The Plan remains in effect through April 28, 1995 and from year to year
thereafter, provided such continuance is approved by a vote of the Board of
Trustees and by both a majority of (i) those Trustees who are not interested
persons of the Trust and who have no direct or indirect financial interest in
the operation of the Plan or any agreements related to it (the "Rule 12b-1
Trustees") and (ii) all of the Trustees then in office, cast in person at a
meeting (or meetings) called for the purpose of voting on this Plan. The Plan
may not be amended to increase materially the payments described herein without
approval of the shareholders of the Fund, and all material amendments of the
Plan must also be approved by the Trustees of the Trust in the manner described
above. The Plan may be terminated any time by vote of the Rule 12b- 1 Trustees
or by a vote of a majority of the outstanding voting securities of the Fund.
Under the Plan, the President or a Vice President of the Trust shall provide to
the Trustees for their review, and the Trustees shall review at least quarterly,
a written report of the amount expended under the Plan and the purposes for
which such expenditures were made.
So long as the Plan is in effect, the selection and nomination of Trustees
who are not interested persons of the Trust shall be committed to the discretion
of the Trustees who are not such interested persons. The Trustees have
determined that in their judgment there is a reasonable likelihood that the Plan
will benefit the Fund and its shareholders.
During the fiscal year ended August 31, 1994, the Fund made payments under
the original plan aggregating $79,104, of which $51,127 was paid to financial
service firms for distribution and shareholder services and the balance was
retained by the Principal Underwriter for such services. During the fiscal year
ended August 31, 1993, the Fund made provision for payment under the Plan
aggregating $54,901, of which $32,149 was paid to financial services firms for
distribution and shareholder services and the balance was retained by the
Principal Underwriter for such services.
ADDITIONAL TAX MATTERS
The Fund qualified as a regulated investment company under the Internal
Revenue Code for its fiscal year ended August 31, 1994 (see the Notes to
Financial Statements).
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As at November 30, 1994, the Trustees and officers of the Trust, as a group,
owned in the aggregate less than 1% of the outstanding shares of the Fund. To
the Trust's knowledge, no person owns of record or beneficially 5% or more of
the outstanding shares of the Fund.
<PAGE>
EV TRADITIONAL GROWTH FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
-------------------------------------------------------------------------------
August 31, 1994
-------------------------------------------------------------------------------
ASSETS:
Investments in Growth Portfolio, at value
(Note 1A, Note 1E) $131,535,848
Receivable for Fund shares sold 1,130
Deferred organization expenses (Note 1D) 11,311
------------
Total assets $131,548,289
LIABILITIES:
Payable for Fund shares redeemed $ 1,235,657
Payable to affiliates --
Trustees' fees 2,030
Custodian fee 1,885
Accrued service fees (Note 4) 16,568
Accrued expenses 22,792
------------
Total liabilities 1,278,932
------------
NET ASSETS for 16,363,841 shares of
beneficial interest outstanding $130,269,357
============
SOURCES OF NET ASSETS:
Proceeds from sales of shares (including
shares issued to shareholders electing to
receive payment of distributions in shares),
less cost of shares redeemed $109,947,463
Accumulated undistributed net realized
gain on investment transactions (computed
on the basis of identified cost) 10,705,212
Unrealized appreciation of investments
from Portfolio (computed on the basis
of identified cost) 9,039,714
Undistributed net investment income 576,968
------------
Total net assets $130,269,357
============
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE --
($130,269,357 / 16,363,841 shares) $7.96
=====
COMPUTATION OF OFFERING PRICE:
Offering price per share (100/95.25 of $7.96) $8.36
=====
On sales of $100,000 or more, the offering price is reduced.
The accompanying Notes are an integral part of the Financial Statements
<PAGE>
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Year Ended August 31, 1994
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 1,679,172
Interest 264,404
Dividends allocated from Portfolio 108,743
Interest allocated from Portfolio 37,818
Expenses allocated from Portfolio (76,972)
-----------
Total investment income $2,013,165
Expenses --
Investment adviser fee (Note 3) $ 777,308
Compensation of independent Trustees
(Note 3) 8,947
Custodian fee (Note 3) 72,776
Service fees (Note 4) 84,518
Transfer and dividend disbursing
agent fees 110,869
Printing and postage 64,877
Legal and accounting services 43,834
Registration fees 23,408
Amortization of organization expense
(Note 1D) 189
Miscellaneous 10,024
----------
Total expenses 1,196,750
-----------
Net investment income $ 816,415
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain on investment
transactions (identified cost basis) $9,728,622
Net realized gain on investment
transactions from portfolio (identified
cost basis) 1,063,482
----------
Net realized gain on investments 10,792,104
Change unrealized appreciation of
investments (12,299,922)
------------
Net realized and unrealized loss
on investments $ (1,507,818)
------------
Net decrease in net assets from operations $ (691,403)
============
The accompanying Notes are an integral part of the Financial Statements
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
-----------------------------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED AUGUST 31,
---------------------------------------
1994 1993
---------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From Operations:
Net investment income $ 816,415 $ 813,507
Net realized gain on investment transactions 10,792,104 4,068,641
Increase (decrease) in unrealized appreciation of
investments (12,299,922) 5,846,984
------------ ------------
Net increase (decrease) in net assets from operations $ (691,403) $ 10,729,132
Undistributed net investment income included in price of
shares sold and repurchased (Note 1C) -- 202,668
Distributions to shareholders --
From net investment income (1,048,189) --
From net realized gain on investments (170,972) (19,140,163)
Net increase (decrease) from Fund share transactions
(exclusive of amounts allocated to net investment
income) (Note 2) (11,084,451) 7,777,382
------------ ------------
Net decrease in net assets $(12,995,015) $ (430,981)
NET ASSETS:
At beginning of year 143,264,372 143,695,353
------------ ------------
At end of year (including undistributed net investment
income of $576,968 and 4,686,413, respectively) $130,269,357 $143,264,372
============ ============
The accompanying Notes are an integral part of the Financial Statements
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
------------------------------------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED AUGUST 31,
-----------------------------------------------------------
1994 1993 1992 1991 1990
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $ 8.070 $ 8.520 $ 8.450 $ 7.750 $ 8.560
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income $ 0.052 $ 0.030 $ 0.046 $ 0.101 $ 0.109
Net realized and unrealized gain
(loss) on investments (0.092) 0.660 0.544 1.499 (0.319)
------- ------- ------- ------- -------
Total income (loss) from investment
operations $(0.040) $ 0.690 $ 0.590 $ 1.600 $(0.210)
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From net investment income $(0.060) $ -- $(0.040) $(0.080) $(0.110)
From net realized gain on investments (0.010) (1.140) (0.480) (0.820) (0.490)
------- ------- ------- ------- -------
Total distributions $(0.070) $(1.140) $(0.520) $(0.900) $(0.600)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF YEAR $ 7.960 $ 8.070 $ 8.520 $ 8.450 $ 7.750
======= ======= ======= ======= =======
TOTAL RETURN (0.75)% 7.63% 7.22% 23.24% (2.65)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000's omitted) $130,269 $143,264 $143,695 $143,090 $80,582
Ratio of expenses to average
net assets(1) 0.95% 0.89% 0.87% 0.92% 0.96%
Ratio of net investment income
to average net assets 0.61% 0.56% 0.53% 1.35% 1.38%
PORTFOLIO TURNOVER(2) 89% 84% 68% 73% 66%
<FN>
<F1> Includes the Fund's share of Growth Portfolio's allocated expenses for the
period from August 2, 1994, to August 31, 1994.
<F2> Portfolio Turnover represents the rate of portfolio activity for the
period while the Fund was making investments directly in securities. The
portfolio turnover for the period since the fund transferred substantially
all of its investable assets to the portfolio is shown in the Portfolio's
financial statements which are included elsewhere in this report.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1994
- --------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
EV Traditional 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. On
August 2, 1994, the Fund transferred substantially all of its investable assets
in interests in 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 (99.9% at August 31, 1994). 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 - Valuation of securities by the Portfolio is discussed
in Note 1 of the Portfolio's Notes to Financial Statements which are included
elsewhere in this report.
B. 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. Accordingly, no provision for federal income
or excise tax is necessary.
C. EQUALIZATION - Prior to September 1, 1993, the Fund followed the accounting
practice known as equalization by which a portion of the proceeds from the sales
and costs of reacquisitions of Fund shares was allocated to undistributed net
investment income. As a result, undistributed net investment income per share
was unaffected by sales or reacquisitions of Fund shares. As of September 1,
1993, the Fund discontinued the use of equalization. This change had no effect
on the Fund's net assets, net asset value per share, or its net increase or
(decrease) in net assets from operations. Discontinuing the use of equalization
will result in a simpler and more meaningful financial statement presentation.
D. DEFERRED ORGANIZATION EXPENSES - Costs incurred by the Fund in connection
with its organization, including registration costs, are being amortized on the
straight-line basis over five years.
E. OTHER - Investment transactions are accounted for on the date the investments
are purchased or sold. Dividend income and dividends to shareholders are
recorded on the ex-dividend date and interest income is recorded on the accrual
basis.
F. ACCOUNTING CHANGE - During the year ended August 31, 1994, the Fund adopted
Statement of Position (SOP) 93-2: Determination, Disclosure and Financial
Statement Presentation of Income, Capital Gains and Return of Capital
Distributions by Investment Companies. The SOP requires 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 accumulated net realized gains. The SOP states that only those
distributions in excess of tax basis earning and profits be reported in the
financial statements as a return of capital. As a result of adopting this
statement, as of September 1, 1993 the Fund reclassified $3,877,671 and
$13,619,823 from undistributed net investment income and undistributed net
realized gains, respectively, to additional paid-in capital. Net investment
income, net realized gains and net assets were not affected by this change.
- --------------------------------------------------------------------------------
(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 were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
AUGUST 31, 1994 AUGUST 31, 1993
----------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
----------------------------------- ---------------------------------
<S> <C> <C> <C> <C>
Sales 16,016,377 $ 126,721,042 5,286,886 $ 41,367,150
Issued to shareholders electing
to receive payment of
distribution in Fund shares 110,217 872,830 1,951,212 16,003,154
Redemptions (17,522,433) (138,678,323) (6,339,408) (49,592,922)
----------- ------------- ---------- ------------
Net increase (decrease) (1,395,839) $ (11,084,451) 898,690 $ 7,777,382
=========== ============= ========== ============
</TABLE>
(3) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Prior to August 2, 1994 (when the Fund transferred substantially all of its
investable assets to the Growth Portfolio in exchange for an interest in the
Portfolio), the Fund retained Eaton Vance Management (EVM) as its investment
adviser. The investment adviser fee was earned by EVM as compensation for
management and investment advisory services rendered to the Fund. The fee was
based upon a percentage of average daily net assets plus a percentage of gross
income (i.e., income other than gains from the sale of securities). For the
period from September 1, 1993 to August 1, 1994, the fee was equivalent to 0.63%
(annualized) of the Fund's average net assets for such period and amounted to
$777,308. Since August 2, 1994, EVM has served 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. Except as to Trustees of the Fund and 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, 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 daily 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.
- --------------------------------------------------------------------------------
(4) SERVICE PLAN
The Trustees of the Trust on behalf of the Fund have adopted a Service Plan on
July 7, 1993 designed to meet the requirements of Rule 12b-1 under the
Investment Company Act of 1940 and the service fee requirements of the revised
sales charge rule of The National Association of Securities Dealers Inc. The
Service Plan replaced the Fund's distribution plan which became effective on
June 12, 1989. The Service Plan provides that the Fund may make service fee
payments to the Principal Underwriter, Eaton Vance Distributors, Inc., a
subsidiary of Eaton Vance Management, Authorized Firms or other persons in
amounts not exceeding .25% of the Fund's average pdaily net assets for any
fiscal year. The Trustees have implemented the Service Plan by authorizing the
Fund to make quarterly service fee payments to the Principal Underwriter and
Authorized Firms in amounts not expected to exceed .25% of that portion of the
Fund's average daily net assets for any fiscal year which is attributable to
shares of the Fund sold on or after June 12, 1989 by such persons and remaining
outstanding for at least twelve months. Such payments are made for personal
services and/or the maintenance of shareholder accounts. Provision for service
fee payments amounted to $84,518 for the year ended August 31, 1994.
- --------------------------------------------------------------------------------
(5) INVESTMENT TRANSACTIONS
On August 2, 1994 the Fund transferred substantially all of its assets to the
Portfolio in exchange for an interest in the Portfolio. Increases and decreases
in the Fund's invest ments in the Portfolio for the period from August 2, 1994to
August 31, 1994, aggregated $11,625,371 and $12,641,351, respectively. Purchases
and sales of investment securities, other than short-term obligations, during
the period from September 1, 1993 to August 1, 1994 aggregated $113,107,355 and
$119,009,605, respectively.
- --------------------------------------------------------------------------------
(6) DISTRIBUTION
On August 8, 1994, the Trustees declared a dividend from net investment income
of $0.03 per share payable on September 30, 1994, to shareholders of record at
the close of business on September 1, 1994.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Trustees of
EV Traditional Growth Fund,
a series of Eaton Vance Growth Trust:
We have audited the accompanying statement of assets and liabilities of EV
Traditional Growth Fund (formerly Eaton Vance Growth Fund), a series of Eaton
Vance Growth Trust, as of August 31, 1994, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended and the financial highlights for
each of the five years in the period ended August 31, 1994. 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 audits 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, 1994 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 audits provide 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 EV
Traditional Growth Fund, a series of Eaton Vance Growth Trust, as of August 31,
1994, the results of its operations for the year then ended, the changes in its
net assets for each of the two years in the period then ended, and the financial
highlights for each of the five years in the period ended August 31, 1994, in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
September 23, 1994
<PAGE>
GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
AUGUST 31, 1994
- --------------------------------------------------------------------------------
COMMON STOCKS - 90.8%
- --------------------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------------------
AUTOMOTIVE - 6.2
Bandag Inc. 50,000 $ 2,725,000
Dominates the domestic tire retread
market, selling through 600 franchised
dealers, and has a growing presence in
foreign markets.
Ford Motor Co. 100,000 2,925,000
The world's second largest producer of
automobiles and trucks.
General Motors Corp. 50,000 2,512,500
The world's largest auto and truck
producer.
------------
$ 8,162,500
------------
BEVERAGES - 4.9%
Coca-Cola Co. 90,000 $ 4,140,000
Manufactures soft drink concentrates and
syrups that make Coca-Cola and other
brands including Minute Maid orange
juice.
PepsiCo, Inc. 70,000 2,318,750
Global soft drink producer with
businesses in snack foods and fast food
restaurants.
------------
$ 6,458,750
------------
BROADCASTING - 3.0%
Tele-Communications, Inc. Class A* 175,000 $ 3,948,437
------------
The largest operator of cable television systems
in the U.S.
BUSINESS PRODUCTS AND
SERVICES - 8.3%
Danka Business Systems PLC ADR 120,000 $ 2,460,000
An independent provider of maintenance
and service for office copying machines.
Reuters Holdings PLC ADR 105,000 4,921,875
Worldwide provider of proprietary
financial data and information.
WMX Technologies, Inc. 120,000 3,600,000
World's largest provider of collection,
disposal and remediation services for
solid and hazardous waste.
------------
$ 10,981,875
------------
CHEMICALS - 4.6%
Great Lakes Chemical Corp. 40,000 $ 2,410,000
Specialty chemical manufacturer of a
wide range of products including flame
retardants, water treatments, fuel
additives.
Loctite Corp. 80,000 3,630,000
Manufacturer of adhesives for consumer
and industrial markets.
------------
$ 6,040,000
------------
COMPUTER EQUIPMENT AND
SERVICES - 4.0%
Automatic Data Processing, Inc. 60,000 $ 3,247,500
The leading independent computing and
payroll processing services firm in the
U.S.
Novell Inc.* 130,000 2,031,250
Vendor of local area network operating
systems that allow computers of any size
and make to work together.
------------
$ 5,278,750
------------
DRUGS & HEALTH CARE SERVICES - 4.6%
Astra AB A Free Shares 135,000 $ 3,075,017
Swedish based interntional phamaceutical
firm with drugs for the control of
ulcers and asthma.
Sofamor Danek Group, Inc.* 150,000 3,018,750
The dominant supplier of spinal implant
devices used in surgical treatment of
spinal diseases and deformities.
------------
$ 6,093,767
------------
ELECTRONIC INSTRUMENTATION - 1.7%
Millipore Corp. 40,000 $ 2,235,000
------------
Products use membrane separations
technology to analyze and purify fluids
for a variety of high tech industries.
FINANCIAL SERVICES - 7.0%
Federal National Mortgage Association 36,000 $ 3,199,500
U.S. Government sponsored mortgage
lender and provider of secondary
mortgage market.
Franklin Resources Inc. 70,000 2,756,250
Provides investment management and
related services to a family of equity
and fixed income mutual funds.
MGIC Investment Corp. Wisc. 105,000 3,228,750
The leading provider of private mortgage
insurance coverage to U.S. banks and
other mortgage suppliers.
------------
$ 9,184,500
------------
HOTELS AND RESTAURANTS - 4.0%
Carnival Corp. 60,000 $ 2,662,500
Operator of large cruise ships plying
the Caribbean, Mediterranean, South
Pacific and Alaska.
Promus Companies, Inc.* 70,000 2,572,500
Operates hotel casinos in Nevada and
Atlantic City and is the leading
developer of regional casinos in states
that have legalized gaming.
------------
$ 5,235,000
------------
HOUSEHOLD PRODUCTS - 2.5%
Gillette Co. 45,000 $ 3,256,875
------------
A global company with internationally
recognized brands in razors and blades,
small appliances, cosmetics, dental and
other consumer products.
INSURANCE - 6.9%
American International Group, Inc. 45,000 $ 4,230,000
One of the world's leading insurance
companies, operating in 130 countries.
UNUM Corp. 100,000 4,912,500
A writer of group long term disability
insurance.
------------
$ 9,142,500
------------
MACHINERY - 4.5%
Illinois Tool Works Inc. 80,000 $ 3,460,000
Manufacturer of industrial components
and other specialty products and
equipment.
Tenneco Inc. 50,000 2,462,500
Manufactures farm and construction
equipment, automotive, shipbuilding and
packaging machinery and operates a large
interstate natural gas pipeline system.
------------
$ 5,922,500
------------
METALS & MINING - 3.5%
Freeport McMoRan Copper &
Gold, Inc. 110,000 $ 2,543,750
Operates a copper mine with unusually
high concentrations of gold with
exceptional potential for adding to
reserves.
J & L Specialty Steel, Inc. 120,000 2,145,000
A low cost producer in the domestic
stainless steel industry.
------------
$ 4,688,750
------------
OIL - 2.8%
Phillips Petroleum Co. 110,000 $ 3,643,750
------------
Engaged in crude oil and natural gas
exploration and production worldwide and
petroleum refining and marketing
primarily in the U.S.
PAPER & FOREST PRODUCTS - 1.6%
Willamette Industries, Inc. 40,000 $ 2,060,000
------------
Integrated forest products company
selling solid wood products,
containerboard and corrugated boxes and
white business papers and computer
forms.
PUBLISHING - 4.6%
Harcourt General, Inc. 75,000 $ 2,531,250
Diversified company with major interests
in publishing and the Neiman Marcus
Group of retail companies.
McGraw Hill Inc. 50,000 3,481,250
Supplies informational products and
services for businesses, education and
industry through a broad range of
media.
------------
$ 6,012,500
------------
RETAILING - 4.5%
Ann Taylor Stores Corp.* 50,000 $ 2,068,750
Specialty retailer of better quality
women's apparel, operating 231 stores in
38 states.
Home Depot, Inc. 85,000 3,846,250
A chain of do-it-yourself warehouse
style stores.
------------
$ 5,915,000
------------
SEMICONDUCTORS - 3.2%
Intel Corp. 65,000 $ 4,273,750
------------
A manufacturer of semiconductors and
other microcomputer components and
systems which comprise the heart of the
personal computer.
TELEPHONE UTILITIES - 6.2%
MCI Communications Corp. 115,000 $ 2,795,937
A provider of long-distance telephone
services.
Telefonos de Mexico Sponsored ADR 50,000 3,137,500
Provides local and long distance
telephone service and cellular mobile
telephone services in Mexico.
Telephone & Data Systems, Inc. 50,000 2,175,000
A provider of local telephone service as
well as cellular and paging services.
------------
$ 8,108,437
------------
TRANSPORTATION - 2.2%
Federal Express Corp.* 40,000 $ 2,835,000
------------
Operates a global time sensitive package
delivery system.
MISCELLANEOUS SECURITIES - 0.0% $ 3,905
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST, $110,441,832) $119,481,546
------------
- --------------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS - 10.4%
- --------------------------------------------------------------------------------
FACE AMOUNT
(000 OMITTED) VALUE
- --------------------------------------------------------------------------------
Associates Corp. of North America,
4.6s, 9/2/94 4,111 $ 4,110,475
CXC Inc., 4.875s, 9/1/94 3,392 3,392,000
Ford Motor Credit Corp., 4.7s, 9/7/94 2,832 2,829,781
Heller Financial, Inc., 4.68s, 9/8/94 3,285 3,282,011
-------------
TOTAL SHORT-TERM OBLIGATIONS, AT
AMORTIZED COST $ 13,614,267
-------------
TOTAL INVESTMENTS (IDENTIFIED COST, $ 124,056,099) $133,095,813
OTHER ASSETS, LESS LIABILITIES - (1.2%) $ (1,559,944)
-------------
NET ASSETS - 100% $131,535,869
=============
*Non-income producing security.
The accompanying Notes are an integral part
of the Financial Statements
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
August 31, 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Investments, at value (Note 1A) (identified cost, $124,056,099) $133,095,813
Cash 560
Receivable for investments sold 812,572
Dividends receivable 187,557
Deferred organization expenses (Note 1C) 14,808
-------------
Total assets $ 134,111,310
LIABILITIES:
Payable for investments purchased $2,559,062
Custodian fee payable 1,324
Accrued expenses 15,055
----------
Total liabilities 2,575,441
------------
NET ASSETS applicable to investor's interest in Portfolio $131,535,869
============
SOURCES OF NET ASSETS:
Net proceeds capital contributions and withdrawals $122,496,155
Unrealized appreciation of investments (computed on the basis of identified cost) 9,039,714
------------
Total $131,535,869
============
The accompanying Notes are an integral part of the Financial Statements
</TABLE>
<PAGE>
FINANCIAL STATEMENTS (Continued)
<TABLE>
STATEMENT OF OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
For the period from the start of business, August 2, 1994, to August 31, 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME:
Income --
Dividends $ 108,743
Interest 37,818
----------
Total income $ 146,561
Expenses --
Investment adviser fee (Note 2) $ 64,233
Custodian fee (Note 2) 3,948
Accounting fees 8,543
Amortization of organization expense (Note 1C) 248
----------
Total expenses 76,972
----------
Net investment income $ 69,589
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investment transactions (identified cost basis) $1,063,482
Increase in unrealized appreciation of investments 2,595,384
----------
Net realized gain and unrealized gain on investments 3,658,866
----------
Net increase in net assets from operations $3,728,455
==========
The accompanying Notes are an integral part of the Financial Statements
</TABLE>
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
------------------------------------------------------------------------------
For the period from the start of business, August 2, 1994,
to August 31, 1994
------------------------------------------------------------------------------
INCREASE IN NET
ASSETS:
From Operations --
Net investment income $ 69,589
Net realized gain on investment transactions 1,063,482
Increase in unrealized appreciation of investments 2,595,384
------------
Increase in net assets from operations $ 3,728,455
Capital transactions --
Contributions 140,348,725
Withdrawals (12,641,351)
------------
Increase in net assets resulting from
capital transactions $127,707,374
------------
Total increase in net assets $131,435,829
------------
NET ASSETS:
At beginning of period 100,040
------------
At end of period $131,535,869
============
------------------------------------------------------------------------------
SUPPLEMENTARY DATA
------------------------------------------------------------------------------
RATIOS (AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS):
Expenses 0.73%+
Net investment income 0.66%+
PORTFOLIO TURNOVER 4%
+Annualized.
The accompanying Notes are an integral part of the Financial Statements
<PAGE>
------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1994
- --------------------------------------------------------------------------------
(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 investor's
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. Interest income received by the Portfolio on
investments in municipal bonds, which is excludable from gross income under the
Internal Revenue Code, will retain its status as income exempt from Federal
income tax when allocated to the Portfolio's investors. The portion of such
interest, if any, earned on private activity bonds issued after August 7, 1986
may be considered a tax preference item for investors.
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 reorganziation 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.
<PAGE>
- --------------------------------------------------------------------------------
(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 plus a percentage of
gross income, (i.e., income other than gains from the sale of securities). For
the period from the start of business, August 2, 1994 to August 31, 1994, the
fee was equivalent to 0.61% (annualized) of the Portfolio's average net assets
for such period and amounted to $64,233. 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.
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(3) PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than short-term obligations,
aggregated $5,541,237 and, $12,413,266, respectively.
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(4) FEDERAL INCOME TAX BASES OF INVESTMENTS
The cost and unrealized appreciation/depreciation in value of the investments
owned at August 31, 1994, as computed on a federal income tax basis, are as
follows:
Aggregate cost $124,056,099
============
Gross unrealized appreciaiton $ 15,699,173
Gross unrealized depreciation 6,659,459
------------
Net unrealized appreciation $ 9,039,714
============
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(5) LINE OF CREDIT
The Portfolio participates with other portfolios and funds managed by BMR and
EVM 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.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
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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, 1994, the
related statements of operations, changes in net assets and supplementary data
for the period from August 2, 1994 (start of operations) 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 the 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, 1994 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, 1994, the results of its operations, changes in its
net assets and supplementary data for the period from August 2, 1994 (start of
operations) to August 31, 1994, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
September 23, 1994
<PAGE>
INVESTMENT ADVISER OF EV TRADITIONAL
GROWTH PORTFOLIO
Boston Management and Research GROWTH FUND
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV TRADITIONAL GROWTH FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265 STATEMENT OF
ADDITIONAL
CUSTODIAN INFORMATION
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110 JANUARY 1, 1995
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand LLP
One Post Office Square
Boston, MA 02109
EV TRADITIONAL GROWTH FUND
24 FEDERAL STREET
BOSTON, MA 02110
T-GFSAI
