EV Traditional
Information
Age Fund
[GRAPHIC OF BABY STARING AT COMPUTER MONITOR IN CIRCLE FLOATING
IN CENTER OF SPHERE-SHAPED LINEAR LINES]
Annual
Shareholder
Report
August 31, 1996
EV Traditional Information Age Fund
24 Federal Street
Boston, MA 02110
To Shareholders
EV Traditional Information Age Fund had a total return of 10.6% for the
period from inception on September 18, 1995 through August 31, 1996.
That performance was the result of an increase in net asset value per
share from $10.00 to $11.06 during that time period. It does not
include the Fund's 4.75% sales charge. By comparison, the S&P 500 - an
unmanaged index of U.S. common stocks - rose 13.4%, while the Morgan
Stanley Capital International Europe, Australasia, Far East Index (EAFE) -
an unmanaged index of global common stocks - rose 6.1%* during the same
period.
In a volatile investment period, Information Age companies continued to
make headlines...
While the stock markets remained volatile in 1996, information-based
companies continued to forge new alliances and transform the face of
information industries. For example, Intel, a large Portfolio holding,
teamed with software leader Microsoft to develop Internet telephony
standards. Another large Portfolio investment, Cisco Systems, Inc.,
agreed with long-distance carrier Sprint to standardize voice, video,
and data integration for the World Wide Web. Elsewhere, Portfolio
holding Providence Journal Co. agreed to a purchase by A.H. Belo,
creating a media powerhouse whose television station properties reach
across the nation.
*The total return figure for the MSCI EAFE Index is for the period
9/30/95-8/31/96. It is not possible to invest directly in the
Indices.
Companies spend fewer dollars on bricks and mortar... more on computers
and information technology...
A trend first noted early in the decade has gathered steam in 1996, as
companies are spending more on communications and multimedia equipment
than on construction, mining, farm and industrial equipment. That trend
is consistent with industry's efforts to purchase technology that will
give them an edge in the growing, competitive global marketplace.
Companies increasingly view information technology not merely as a
business expenditure, but as an investment they hope will pay future
dividends. Those dividends are measured in more productive employees and
better management of time and resources.
Businesses that supply these services, equipment, information, and media
resources are among the fastest-growing companies in the world. While
naturally, past trends cannot guarantee future results, the outlook for
information companies remains promising. We believe that shareholders
of EV Traditional Information Age Fund will continue to share in the
long-term growth of the information industries.
[PHOTO OF JAMES B. HAWKES OMITTED]
Sincerely,
/S/James B. Hawkes
James B. Hawkes
President
October 20, 1996
Management Discussion: Duncan W. Richardson and the Hon. Jacob Rees-Mogg
An interview with Duncan W. Richardson,
Vice President, Eaton Vance Management, and
the Hon. Jacob Rees-Mogg, of Lloyd George Management, Ltd., Investment
Advisers to the Information Age Portfolio.
Q: Duncan, the Fund has fared very well since its inception, despite a
difficult climate for some of its sectors. To what do you attribute
that?
Mr. Richardson: There were several reasons. First, in recent months, the
market has put a premium on stock picking. We are, above all, driven by
fundamentals, and tend to focus first and foremost on individual
companies with good growth prospects. We were able to do that
successfully during this period.
[PHOTO OF DUNCAN W. RICHARDSON OMITTED]
Caption reads:
Duncan W. Richardson
Second, the Fund is a global growth fund. While there are certainly
additional market, political and currency risks associated with global
investing, the Fund's global approach has offered broader
diversification and partially insulated it from some of the recent
volatility in the U.S. market. Finally, while the Fund has some exposure
to certain technology-based sectors of the market, the Fund is not
primarily a technology fund. That's a very important distinction. We
were able to invest in a wide range of industries that we believe have
the most promising growth prospects, and were thus able to sidestep many
of the problems encountered by the technology sector in the past year.
- -----------------------------------------------------------------------
Fund shares are not guaranteed by the FDIC and are not deposits or other
obligations of, or guaranteed by, any depository institution. Shares are
subject to investment risks, including possible loss of principal
invested.
- -----------------------------------------------------------------------
Q: Jacob, the benefits of global diversification were clearly evident
during this period. Where have you been focusing your investments?
Mr. Rees-Mogg: From a country standpoint, there was a modest shift from
Europe and the U.K. toward Asia and the Pacific. Asia has increasingly
presented us with some interesting opportunities in "content" companies.
The emphasis on stock-picking has been no less intense in the
international markets than in the U.S. market, as the performance of
different markets varied widely.
[PHOTO OF HON. JACOB REES-MOGG OMITTED]
Caption reads:
Hon. Jacob Rees-Mogg
From a sectoral standpoint, we have focused on content companies. A
growing number of entertainment distributors, combined with increasing
levels of wealth and leisure time, have created a massive and growing
demand for entertainment products. We have emphasized creative companies
that are producing quality products in their individual markets.
[GRAPICS OF COMPUTER PROCESSING CHIP, A PERSONAL COMPUTER AND FILM
PROJECTOR OMITTED]
CAPTION READS:
Information Age Portfolio*: Investing in the growth industries of the
world's information-driven economies...
Examples:
Intel Corp.
Cisco Systems
Oracle Corp.
Reuters
Dow Jones & Co.
McGraw-Hill Companies
New World Communications
Grammy Entertainment
Sony Corp.
Footnote reads:
* As of August 31, 1996
Q: Duncan, you indicated that the past year has featured a challenging
environment for some of the information-based sectors. Can you expand on
that theme?
Mr. Richardson: Yes. The period brought a fairly hostile climate for
some information sectors. Technology stocks badly underperformed as the
sector was hit by sporadic earnings disappointments. And, as is
sometimes the case in the technology group, much of the sector was
dragged lower by companies with earnings shortfalls. In the
entertainment sector, some companies faltered as investors questioned
the companies' high cost structures amid an increasingly competitive
entertainment market. Finally, in the telecommunications segment, long
distance providers and regional Bell operating company stocks lagged the
market as investors questioned the outlook following landmark
legislation. Thus, with difficulties in several large information
sectors, it was a most challenging period.
Q: Jacob, you also alluded to the importance of stock-picking in the
global markets. Can you give an example?
Mr. Rees-Mogg: Certainly. Thailand comes immediately to mind. The Thai
market has been under significant pressure in 1996 due to concerns over
high inflation, high interest rates, disappointing first quarter
earnings, and an on-going political squabble that appears to threaten
the stability of the present Thai government. However, despite the
overall market woes, several Thai companies, including Fund holding
Grammy Entertainment PLC, turned in a sterling performance.
While the overall Thai market declined 20% in the first half of the
year, Grammy rose more than 40%. Thai media companies such as Grammy
have benefited from first-rate management and from their ability to
produce entertainment products that are superior in their rapidly-
growing markets. That has generally been our approach in these different
foreign markets and it has paid off handsomely.
Q: Are there any specific areas in the international markets that you
presently find especially attractive?
Mr. Rees-Mogg: Yes. Telecommunication stocks are very interesting,
especially in Asia. The telecom group drew interest from investors
earlier in the year but has since retreated to more reasonable
valuations. At these levels, the stocks are very compelling, especially
given their continued, strong cash flow growth. Hong Kong Telecom and
Philippine Long Distance are among the Fund's Asia-based telecom
investments. Hong Kong Telecom is potentially well-positioned to take
advantage of its access to the Chinese market.
Philippines Long Distance is the dominant supplier of public phone
services in the Philippines. With a current penetration rate of only 2.1
telephones per 100 people in the country, the company has very
attractive growth prospects. Apart from Asia, we've also found some
attractive telecoms in Europe. For example, we have an investment in
STET, the Italian telecom company. Mobile phones have caught on
fabulously among Italian consumers. STET's 57%-owned Telecom Italia
Mobile enjoyed 72% subscriber growth in 1995 alone.
Q: Are there any areas in the international markets where you're
exercising caution at this point?
Mr. Rees-Mogg: Yes. Japan is a good example of an area where we have
become increasingly selective. Japan clearly remains a most important
segment of the world economy as well as an important player among the
information-based industries. However, the outlook is somewhat uncertain
with respect to the technology front. For example, orders for
semiconductor equipment in Japan fell sharply in mid-summer. As a
result, prices for memory chips have declined significantly. It's quite
uncertain when demand will pick up again and the timing is very
difficult to ascertain. That segment of technology tends to influence
the remainder of the Japanese technology stocks. So, for the time being,
I remain cautious with respect to Japan's technology issues.
[GRAPHIC PIE CHARTS OMITTED: Information Age Portfolio Asset Allocation*]
Caption reads: Based on market value as of August 31, 1996
By Region/Country...
Japan 6.2%
Europe 10.5%
U.K. 17.1%
Asia/Pacific 17.7%
U.S. 48.6%
By Industry (Common Stocks only)...
Telephone services 7.2%
Other 11.8%
Entertainment 12.1%
Broadcoasting 13.3%
Business services 15.0%
Publishing 16.3%
Hardware &
Software 16.4%
Semiconductors 2.3%
Electronics 5.5%
Footnote reads: *Since the Portfolio is actively managed,
country allocations and industry holdings are subject to change.
Q: What U.S.-based companies have been among the Fund's stronger
performers?
Mr. Richardson: The Fund's best-performing stocks have featured a mix of
large-cap companies that dominate their industries with strong earnings
growth together with smaller companies that have made a name for
themselves in small niche markets. For example, Intel Corp. is the Fund's
largest U.S. holding. The company remains the industry standard for
microprocessors and has been reporting much stronger than expected
earnings this year. Intel's earnings performance stands out in a difficult
climate for U.S. technology companies. The market has rewarded its superior
earnings prospects and the stock rose more than 50% in the period from
January through August.
Q: What other areas drove the U.S. portion of the Fund?
Mr. Richardson: Computer services companies and broadcasting were also
among the Fund's stronger sectors. Computer services companies have been
able to take advantage of the increasing trend within industry to
outsource some computer functions. Companies such as First Data Corp.
and Automatic Data Processing Corp. performed well for the Fund and
helped counter the downtrend in other segments of the technology sector.
Among broadcasting and media companies, New World Communications and
Providence Journal Co. each fared very well, up 31% and 25%,
respectively. New World Communications is a producer of television
programming and the owner of ten Fox-affiliated television stations,
while Providence Journal is the owner of some print media properties as
well as nine network-affiliated television stations around the country.
[GRAPHIC CHART WITH RADAR DISH OMITTED]
Caption reads: Even among the world's most advanced cellular markets,
there is ample room for growth.
Worlds's Top Ten Cellular phone markets by market penetration:
Subscribers per
1000 inhabitants
----------------
1.) Sweden 23
2.) Norway 22
3.) Finland 20
4.) Denmark 16
5.) Australia 14
6.) United States 13
7.) Brunei 12
8.) Hong Kong 12
9.) Iceland 11
10.)New Zealand 11
Footnote reads: Sources: Financial Times
International Telecommunication Union
Q: Many of the Fund's investments are mid-cap to large-cap issues. Did
any small-cap stocks contribute to the Fund's performance?
Mr. Richardson: Yes. At the smaller end of the market-cap spectrum, we
owned Galileo Electro-Optics Corp., which more than doubled during the
period. The company is a niche manufacturer that supplies fiber optic
materials for a wide range of applications, including night-scopes for
the military, arthroscopes for medical procedures, and glass-coated
instruments for Xerox copiers. The company has a dominant position
within its various business segments, enjoys some pricing flexibility,
and has a growth strategy that could result in a much larger company a
few years down the road.
Q: Jacob, in your view, what sets this Fund apart from other funds that
invest in these industries?
Mr. Rees-Mogg: In this Fund, we have a good deal of flexibility in our
approach to the information-based industries. The wide parameters of our
investment mandate enhance our ability to moderate risk. As we've
indicated earlier, that was especially important during this period.
Furthermore, as Duncan noted, we are not tied to technology as closely
as are some other funds, which helps us lessen the effect of the
occasional technology sell-off. Finally, we believe that one of our
major strengths is that we have research capabilities that span the
globe, enhancing our ability to monitor information companies on a
global basis. All of these aspects contribute to the Fund's flexibility
and give us a singular profile among information funds.
Some Recent Developments among Information Age companies:
(bullet) Oracle Corp. - one of the fastest-growing suppliers of business
applications software, Oracle is developing equipment to facilitate
global network access. The Redwood City, CA company has devised
a lean, inexpensive PC with Web-browsing software that will
enable viewers to access the Internet via phone lines and view
it on their televisions.
(bullet) Duracell International - the world's largest maker of alkaline
batteries agreed to be acquired by Gillette, a leading personal
care products company. The Duracell acquisition will boost
Gillette's size by 30%, while adding an important new product
line, especially for European and emerging markets.
(bullet) News Corp. - the global media giant has formed Internet
Ventures to create interactive games for the World Wide Web.
Among the company's first offerings is a game based on the "X-
Files," Fox Television's most popular prime-time show.
Q: Duncan, what is your outlook for the information-based stocks in the
year ahead?
Mr. Richardson: We see the demand for information equipment, services,
and products continuing to grow, both in industrialized nations and
developing nations. The rush to fill their communications needs
continues to create vast opportunities. Naturally, past trends do not
guarantee future performance and this investment is, of course, subject
to the risks of changing technologies, fluctuations in foreign markets,
and shifting political trends. But we believe that the information
industries present some of the most promising long-term opportunities
for growth today. And we expect that patient shareholders of EV
Traditional Information Age Fund will share in that growth.
[GRAPHIC WORM CHART OMITTED: Comparison of change in Value of a $10,000
Investment in EV Traditional Information Age Fund, the Standard & Poor's
500 Index (S&P 500 Index) and the Europe-Australasia-Far East Index (EAFE)]
Caption reads: From September 30, 1995, through through August 31, 1996
Inset box info reads:
- ---------------------------------------------------------
CUMULATIVE Value of
TOTAL Life Investment at
RETURNS of Fund* 8/31
- ---------------------------------------------------------
With max. sales charge 5.3% $10,375
- ---------------------------------------------------------
Without max. sales chg. 10.6% $10,897
- ---------------------------------------------------------
Data from worm chart reads:
Date Fund @ NAV Fund w/SC S&P Index EAFE Index
-------- ---------- --------- --------- ----------
9/30/95 $10,000 $9,522 $10,000 $10,000
10/31/95 $10,138 $9,653 $9,950 $9,734
11/30/95 $10,236 $9,747 $10,359 $10,007
12/31/95 $10,296 $9,803 $10,600 $10,413
1/31/96 $10,335 $9,841 $10,946 $10,458
2/28/96 $10,562 $10,056 $11,022 $10,496
3/31/96 $10,581 $10,075 $11,168 $10,722
4/30/96 $11,143 $10,610 $11,318 $11,036
5/31/96 $11,360 $10,816 $11,577 $10,836
6/30/96 $11,192 $10,657 $11,668 $10,899
7/31/96 $10,502 $10,000 $11,135 $10,583
8/31/96 $10,897 $10,375 $11,344 $10,609
Footnote reads:
Past performance is not indicative of future results. Investment
returns and principal value will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original
cost. Source: Towers Data Systems, Bethesda, MD.
* Investment operations commenced on 9/18/95
+ Index information is available only at month-end; therefore, the line
comparison begins at the next month-end following the commencement of the
Fund's investment operations.
Fund Performance
In accordance with guidelines issued by the Securities and Exchange
Commission, we are including a performance chart that compares your
Fund's total return with that of two broad-based investment
indices. The lines on the chart represent the total returns of $10,000
hypothetical investments in EV Traditional Information Age Fund, the
unmanaged S&P 500 Stock Index, and the Morgan Stanley Capital
International Europe, Australasia, and Far East Index (MSCI EAFE). Unlike
the Fund, the S&P 500 includes only U.S. common stocks, while the
EAFE is composed of foreign companies. Both indices are broad-based,
whereas the Fund concentrates investments in information-based
companies.
Total Return Figures
The solid red line on the chart represents the Fund's performance at net
asset value. The total return figure reflects Fund expenses, and
transaction costs, and reinvestment of dividend income and capital gain
distributions. The dotted red line represents the Fund's performance
including the Fund's 4.75% maximum current sales charge.
The solid black line represents the performance of the S&P 500 Stock Index.
The dotted black line represents the performance of the MSCI EAFE Index.
The Index's total return does not reflect any commissions or expenses
that would be incurred if an investor individually purchased or sold the
securities represented in the Index. It is not possible to invest
directly in the Indices.
<TABLE>
<CAPTION>
EV Traditional Information Age Fund
Financial Statements
Statement of Assets and Liabilities
August 31, 1996
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets:
Investment in Information Age Portfolio (Portfolio), at value (Note 1A)
(identified cost, $11,185,185) $11,952,994
Receivable for Fund shares sold 8,794
Deferred organization expenses (Note 1D) 42,469
Tax reclaim receivable 2,401
-----------
Total assets $12,006,658
Liabilities:
Payable to affiliate --
Trustees' fees $27
Accrued expenses 4,064
-----------
Total liabilities 4,091
-----------
Net Assets for 1,085,435 shares of beneficial interest outstanding $12,002,567
===========
Sources of Net Assets:
Paid-in capital $11,248,875
Accumulated net realized loss on investment and foreign currency
transactions from Portfolio (11,697)
Accumulated net investment loss (2,420)
Unrealized appreciation of investments and foreign currency from Portfolio
(computed on the basis of identified cost) 767,809
-----------
Total $12,002,567
===========
Net Asset Value and Redemption Price (Note 3) Per Share
($12,002,567 (divided by) 1,085,435 shares of beneficial interest) $11.06
======
Computation of Offering Price:
Offering price per share (100(divided by)95.25 of $11.06) $11.61
======
On sales of $100,000 or more the offering price is reduced.
See notes to financial statementsSee notes to financial statements
</TABLE>
<TABLE>
<CAPTION<
Statement of Operations
For the Period from the Start of Business, September 18, 1995, to August 31, 1996
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income (Note 1B):
Dividend income allocated from Portfolio (net of foreign taxes of $11,720) $87,762
Interest income allocated from Portfolio 49,961
Expenses allocated from Portfolio (124,952)
--------
Total investment income $12,771
Expenses --
Management fee (Note 3) $20,802
Compensation of Trustees not members of the
Administrator's organization (Note 3) 109
Custodian fees 2,220
Distribution fees (Note 5) 41,605
Printing and postage 17,020
Transfer agent fees 10,120
Amortization of organization expenses (Note 1D) 9,497
Registration fees 7,070
Legal and accounting services 6,478
--------
Total expenses 114,921
--------
Net investment loss $(102,150)
--------
Realized and Unrealized Gain (Loss) from Portfolio:
Net realized loss from Portfolio (identified cost basis) --
Investment transactions $6,657
Foreign currency and forward foreign currency contracts (16,373)
--------
Net realized loss $(9,716)
Unrealized appreciation of investments and foreign currency from Portfolio 767,809
--------
Net realized and unrealized gain $758,093
--------
Net increase in net assets from operations $655,943
========
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
For the Period from the Start of Business, September 18, 1995, to August 31, 1996
- -----------------------------------------------------------------------------------------------
<S> <C>
Increase (Decrease) in Net Assets:
From operations --
Net investment loss $(102,150)
Net realized loss from Portfolio (9,716)
Unrealized appreciation from Portfolio 767,809
-----------
Increase in net assets from operations $655,943
-----------
Transactions in shares of beneficial interest (Note 4) --
Proceeds from sale of shares $12,848,572
Cost of shares redeemed (1,501,948)
-----------
Increase in net assets from Fund share transactions $11,346,624
-----------
Net increase in net assets $12,002,567
Net Assets:
At beginning of period --
-----------
At end of period (including accumulated net
investment loss of $2,420) $12,002,567
===========
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights
For the Period from the Start of Business, September 18, 1995, to August 31, 1996
- -----------------------------------------------------------------------------------------------
<S> <C>
Net asset value -- beginning of period $10.000
-------
Income from operations:
Net investment loss $(0.127)
Net realized and unrealized gain
on investments 1.187
-------
Total income from operations $1.060
-------
Net asset value -- end of period $11.060
=======
Total Return (1) 10.60%
Ratios/Supplemental Data:
Net assets, end of period (000's omitted) 12,003
Ratio of net expenses to average daily net assets * 2.87%+
Ratio of net investment loss to average daily net assets (1.22%)+
* Includes the Fund's share of Information Age Portfolio's allocated expenses.
+ Computed on an annualized basis.
(1) Total investment 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 payable date.
Total return is computed on a non-annualized basis.
Note: The above per share information has been computed based on average shares outstanding.
See notes to financial statments
</TABLE>
Notes to Financial Statments
August 31, 1996
(1) Significant Accounting Policies
EV Traditional Information Age Fund (the "Fund") is a diversified series
of Eaton Vance Growth Trust (the "Trust"). The Trust is an entity of the
type commonly known as a Massachusetts business trust and is registered
under the Investment Company Act of 1940, as amended, as an open-end,
management investment company. The Fund invests all of its investable
assets in interests in Information Age 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 (28.0% at
August 31, 1996). 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 Valuation - 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. Income - The Fund's net investment income or loss consists of the
Fund's pro rata share of the net investment income of the Portfolio,
less all actual and accrued expenses of the Fund determined in
accordance with generally accepted accounting principles.
C. Federal Taxes - The Fund's policy is to comply with the provisions of
the Internal Revenue Code applicable to regulated investment companies
and to distribute to shareholders each year all of its net investment
income, and any net realized capital gains. Accordingly, no provision
for federal income or excise tax is necessary. At August 31, 1996, net
capital losses of $2,420 attributable to security transactions incurred
after October 31, 1995 are treated as arising on the first day of the
Fund's next taxable year.
D. Deferred Organization Expenses - Costs incurred by the Fund in
connection with its organization, including registration costs, are
amortized on the straight-line basis over five years.
E. Expense Reduction - Investors Bank & Trust Company (IBT), serves as
custodian of the Fund and the Portfolio. Prior to November 10, 1995, IBT
was an affiliate of EVM. Pursuant to the custodian agreement, IBT
receives a fee reduced by credits which are determined based on the
average cash balances the Fund or the Portfolio maintains with IBT. All
significant credit balances used to reduce the Fund's custodian fees are
reported as a reduction of expenses in the Statement of Operations.
F. Use of Estimates- The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that effect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the
reported period. Actual results could differ from those estimates.
G. Other - Investment transactions are accounted for on a trade date
basis.
(2) Distributions to Shareholders
It is the present policy of the Fund to make at least one distribution
annually (normally in December) of all or substantially all of the
investment income allocated to the Fund by the Portfolio, less the
Fund's direct and allocated expenses and at least one distribution
annually of all or substantially all of the net realized capital gains
(reduced by any available capital loss carryforwards from prior years)
allocated by the Portfolio to the Fund, if any.
Shareholders may reinvest all distributions in shares of the Fund
without a sales charge at the per share net asset value as of the close
of business on the record date.
The Fund distinguishes between distributions on a tax basis and a
financial reporting basis. Generally accepted accounting principles
require that only distributions in excess of tax basis earnings and
profits be reported in the financial statements as a return of capital.
Differences in the recognition or classification of income between the
financial statements and tax earnings and profits which result in over
distributions for financial statement purposes are classified as
distributions in excess of net investment income or accumulated net
realized gains. Permanent differences between book and tax accounting
relating to distributions are reclassified to paid-in capital. During
the period ended August 31, 1996, $99,730 was reclassified from
accumulated net investment loss to paid-in capital due to permanent
differences between book and tax accounting for operating losses.
Additionally, $1,981 was reclassified from accumulated net realized loss
on investments and foreign currency transactions to paid-in capital due
to permanent differences between book and tax accounting for capital
losses. Net investment loss, net realized capital losses and net assets
were not affected by these reclassifications.
(3) Management Fee and Other Transactions with Affiliates
The management fee is earned by Eaton Vance Management (EVM) as
compensation for management and administration of the business affairs
of the Fund. The fee is based on a percentage of average daily net
assets. For the period from the start of business, September 18, 1995,
to August 31, 1996 the fee was equivalent to 0.25% of the Fund's average
net assets for such period and amounted to $20,802. Except as to
Trustees of the Fund who are not members of EVM's organization, officers
and Trustees receive remuneration for their services to the Fund out of
such management fee. Eaton Vance Distributors, Inc., (EVD), a subsidiary
of EVM and the Fund's principal underwriter, received approximately
$40,000 as its portion of the sales charge on sales of Fund shares for
the period from the start of business, September 18, 1995, to August 31,
1996. Certain officers and Trustees of the Fund and the Portfolio are
directors/trustees of the above organizations. In addition, investment
adviser and administrative fees are paid by the Portfolio to EVM and its
affiliates. See Note 2 of the Portfolio's Notes to Financial Statements
which are included elsewhere in this report.
(4) 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 for the period from the start of
business, September 18, 1995 to August 31, 1996 were as follows:
Sales 1,224,615
Issued to shareholders electing to
receive payments of distributions
in Fund shares --
Redemptions (139,180)
----------
Net increase 1,085,435
==========
(5) Distribution Plan
The Fund has adopted a distribution plan (the Plan) pursuant to Rule
12b-1 under the Investment Company Act of 1940. The Plan requires the
Fund to pay the Principal Underwriter, Eaton Vance Distributors, Inc.
(EVD) a monthly distribution fee equal, on an annual basis, to the
aggregate of (a) 0.50% of that portion of the Fund's average daily net
assets for any fiscal year which is attributable to shares of the Fund
which have remained outstanding for less than one year and (b) 0.25% of
that portion of the Fund's average daily net assets for any fiscal year
which is attributable to shares of the Fund which have remained
outstanding for more than one year. During the period from the start of
business, September 18, 1995, to August 31, 1996 the Fund paid
distribution fees to EVD aggregating $41,605 representing 0.50% of
average daily net assets. The Plan also provides that the Fund will pay
a quarterly service fee to EVD in an amount equal, on an annual basis,
to 0.25% of that portion of the Fund's average daily net assets for any
fiscal year which is attributable to shares of the Fund which have
remained outstanding for more than one year. Such payments are made for
personal services and/or the maintenance of shareholder accounts. The
Fund expects to begin accruing service fee payments during the calendar
quarter ending September 30, 1996. EVD may pay up to the entire amount
of the service fee to Authorized Firms through which the Fund's shares
are distributed.
Certain officers and Trustees of the Fund are officers or directors of
EVD.
(6) Investment Transactions
Increases and decreases in the Fund's investment in the Portfolio
aggregated $12,845,080 and $1,660,551, respectively.
Independent Auditor's Report
To the Trustees and Shareholders of
EV Traditional Information Age Fund
(a series of Eaton Vance Growth Trust):
We have audited the accompanying statement of assets and liabilities of
EV Traditional Information Age Fund (one of the series constituting the
Eaton Vance Mutual Funds Trust) as of August 31, 1996, and the related
statement of operations, the statement of changes in net assets and the
financial highlights for the period from the start of business September
18, 1995, to August 31, 1996. These financial statements and financial
highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements
and financial highlights 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
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, 1996 by correspondence
with the cusdodian. 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 financial highlights
present fairly, in all material respects, the financial position of EV
Traditional Information Age Fund at August 31, 1996, and the results of
its operations, the changes in net assets and financial highlights for
the respective stated period, in conformity with generally accepted
accounting principles.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
October 4, 1996
<TABLE>
<CAPTION>
Information Age Portfolio
Portfolio of Investments
August 31, 1996
Common Stock - 99.0%
- --------------------------------------------------------------------------------------
Name of Company Shares Value
(Note 1)
- --------------------------------------------------------------------------------------
<S> <C> <C>
Broadcasting - 15.2%
BEC World Co. Ltd.+ (2) 82,700 $882,395
Benpress Holdings GDR+ (2) 32,000 236,160
Comcast Corp. 26,000 419,250
Financiere Richemont+ (2) 30,000 451,253
Jacor Communications, Inc. (2) 17,000 569,500
Lin Television Corp. (2) 15,000 536,250
Providence Journal Bulletin Class A (2) 35,000 678,125
PT Indonesia Satellite ADR+ 14,000 437,500
Renaissance Communications (2) 13,000 458,250
TCA Cable TV, Inc. (2) 5,000 130,000
Television Broadcasts Ltd.+ 230,000 818,029
Yorkshire-Tyne Tees TV Holdings+ 45,000 862,293
-----------
$6,479,005
-----------
Business, Computer, & Financial Services - 20.6%
ADT Ltd. (2) 25,000 $490,625
Automatic Data Processing, Inc. 16,000 666,000
CCC Information Services (2) 10,000 185,000
Ceridian Corp. (2) 10,500 447,563
Computer Sciences Corp. (2) 10,000 700,000
DST Systems, Inc. (2) 20,000 615,000
First Data Corp. 5,000 390,000
Fiserv, Inc. (2) 17,000 575,875
Metromail Corp. (2) 32,000 560,000
National Processing, Inc. (2) 10,000 171,250
NTT Data Comm Systems+ 270 827,443
Reuters Holding PLC+ 100,000 1,165,809
Sunguard Data Systems, Inc. (2) 14,000 598,500
True North Communications, Inc. (2) 30,000 577,500
Xerox Corp. 15,000 823,125
-----------
$8,793,690
-----------
Computer Hardware & Software - 11.3%
Adobe 20,000 $697,500
Bay Networks (2) 30,000 825,000
Broderbund Software, Inc. 5,000 150,625
Cisco Systems (2) 10,000 527,500
Information Resources (2) 5,000 68,750
Informix Corporation (2) 20,000 450,000
INTUIT Inc. (2) 10,000 365,000
Misys PLC+ 33,000 435,738
Oracle Corp. (2) 18,000 634,500
Scholastic Corp. (2) 10,000 677,500
-----------
$4,832,113
-----------
Electronics - 9.1%
Allen Group (2) 15,000 $234,375
Anritsu Corp.+ (2) 30,000 411,375
Galileo Electro Optics (2) 32,000 860,000
Intel Corp. (2) 12,000 957,750
Samsung Electronics GDR+ 3,300 256,991
Samsung Electronics GDR+ (1) 1,206 56,358
Sharp Corp.+ 37,000 585,680
VTECH Holdings Ltd.+ 275,000 506,822
-----------
$3,869,351
-----------
Entertainment - 11.9%
Gaylord Entertainment 20,000 $490,000
Grammy Entertainment PLC+ 43,000 564,157
Havas SA+ 10,000 671,505
Hoyts Cinemas+ 255,000 403,436
New World Communications Group (2) 10,000 230,625
News International PLC+ 150,000 878,456
Polygram+ 11,000 655,132
Sony Corp.+ 19,100 1,198,804
-----------
$5,092,115
-----------
Miscellaneous - 7.9%
Boston Scientific Corp. 15,000 $688,125
Duracell International, Inc. 15,000 676,875
Eastman Kodak Co. 12,000 870,000
Oxford Molecular Group PLC+ 50,000 267,051
Sofamer Inc. 10,000 287,500
Thermo Electron Corp. 15,000 594,375
-----------
$3,383,926
-----------
Publishing - 16.0%
Dorling Kindersley PLC+ 45,000 $367,546
Dow Jones & Co., Inc. 11,000 430,375
John Fairfax Holdings+ 250,000 526,048
Matichon Publishing Group+ 90,000 441,019
McGraw-Hill Companies, Inc. 10,000 410,000
Oriental Press Group Ltd+ 1,580,000 812,274
Pearson PLC+ 105,000 1,119,153
United News & Media PLC+ 50,000 559,479
Springer Axel Verlag AG+ 1,327 784,836
Star Publications (Malaysia)+ 185,000 634,477
Wolters Kluwer NV+ 6,000 754,114
-----------
$6,839,321
-----------
Telephone Services - 7.0%
British Telecommunications PLC+ 105,000 615,739
Hong Kong Telecom+ 300,000 502,457
Korea Mobile Telecom Corp.+ 290 322,455
Philippine Long Distance+ 8,300 496,963
STET+ 180,000 572,650
Telecom Italia Mobile SA+ 240,000 494,984
-----------
$3,005,248
-----------
Total Common Stocks (identified cost, $39,841,160) $42,294,769
-----------
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Short-Term Obligations - 1.5%
- ----------------------------------------------------------------------------------------------------------
Principal
Amount Value
(000 omitted) (Note 1)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Associates Corp. of North America, 5.30s, 9/03/96 $ 621 $ 620,817
(at amortized cost)
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Put Options Purchased - 0.2%
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Option to Deliver/Receive, Strike Price, Expiration Date:
JPY/USD, 101.85, December 1996 (premium paid, $58,443) 1,650 $ 78,210
-----------
Total Investments (identified cost, $40,520,420) - 100.7% $42,993,796
Other Assets, Less Liabilities - (0.7%) (290,411)
Net Assets - 100% $42,703,385
===========
+ Foreign Security
(1) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be
resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31,
1996, the value of these securities amounted to $56,358 or 0.1% of net assets.
(2) Non-income producing security.
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
JPY - Japanese Yen
USD - United States Dollars
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Financial Statements
Statement of Assets and Liabilities
August 31, 1996
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets:
Investments, at value (Note 1A) (identified cost, $40,520,420) $42,993,796
Cash 1,135
Foreign currencies, at value (identified cost, $963) 1,153
Receivable for investments sold 407,852
Dividends receivable 60,719
Deferred organization expenses (Note 1C) 5,211
-----------
Total assets $43,469,866
Liabilities:
Payable for investments purchased $ 738,113
Payable to affiliate --
Trustees' fees 273
Accrued expenses 28,095
----------
Total liabilities 766,481
-----------
Net Assets applicable to investors' interest in Portfolio $42,703,385
===========
Sources of Net Assets:
Net proceeds from capital contributions and withdrawals $40,229,819
Net unrealized appreciation of investments and foreign currency
(computed on the basis of identified cost) 2,473,566
-----------
Total $42,703,385
===========
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
For the Period from the Start of Business, September 18, 1995, to August 31, 1996
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income:
Income --
Dividends (net of foreign taxes of $38,742) $ 283,323
Interest 140,841
----------
Total income 424,164
Expenses --
Investment adviser fee (Note 2) $ 199,131
Administration fee (Note 2) 66,210
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 724
Custodian fees 115,885
Legal and accounting services 15,444
Printing and postage 4,361
Amortization of organization expenses (Note 1C) 1,187
Miscellaneous 2,091
----------
Total expenses 405,033
----------
Net investment income $ 19,131
----------
Realized and Unrealized Gain (Loss) on Investments:
Net realized loss (identified cost basis)--
Investment transactions $ (218,951)
Foreign currency and forward foreign currency contracts (50,123)
----------
Net realized loss $(269,074)
Unrealized appreciation --
Investments (identified cost basis) $2,473,376
Foreign currency 190
----------
Net unrealized appreciation 2,473,566
----------
Net realized and unrealized gain on investments $2,204,492
----------
Net increase in net assets from operations $2,223,623
==========
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
For the Period from the Start of Business, September 18, 1995, to August 31, 1996
- -----------------------------------------------------------------------------------------
<S> <C>
Increase (Decrease) in Net Assets:
From operations --
Net investment income $ 19,131
Net realized loss on investments and foreign currency transactions (269,074)
Net unrealized appreciation of investments and foreign currency 2,473,566
-----------
Increase in net assets from operations $ 2,223,623
-----------
Capital transactions --
Contributions $47,226,307
Withdrawals (6,846,545)
-----------
Increase in net assets resulting from capital transactions $40,379,762
-----------
Total increase in net assets $42,603,385
Net Assets:
At beginning of period 100,000
-----------
At end of period $42,703,385
===========
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Supplementary Data
For the Period from the Start of Business, September 18, 1995, to August 31, 1996
- ----------------------------------------------------------------------------------
<S> <C>
Ratios (to average daily net assets):
Expenses 1.52%+
Net investment income 0.07%+
Portfolio Turnover 115%
Average commission rate paid * $0.0303
Net Assets, end of period (000 omitted) $42,703
+ Computed on an annualized basis.
* Average commission rate paid is computed by dividing the total dollar amount of
commissions paid during the fiscal year by the total number of shares purchased and
sold during the fiscal year for which commissions were charged.
See notes to financial statements
</TABLE>
Notes to Financial Statements
(1) Significant Accounting Policies
Information Age Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940 as a diversified, open-end management
investment company. The Portfolio which was organized as a trust
under the laws of the State of New York on September 1, 1992 seeks
to provide long-term capital growth by investing in a global and
diversified portfolio of securities of information age companies.
The Declaration of Trust permits the Trustees to issue interests in
the Portfolio. The following is a summary of the significant
accounting policies of the Portfolio. The policies are in conformity
with generally accepted accounting principles.
A. Investment Valuations - Marketable securities, including options,
that are listed on foreign or U.S. securities exchanges or in the
NASDAQ National Market System are valued at closing sale prices, on
the exchange where such securities are principally traded. Futures
positions on securities or currencies are generally valued at
closing settlement prices. Unlisted or listed securities for which
closing sale prices are not available are valued at the mean between
the latest bid and asked prices. Short-term debt securities with a
remaining maturity of 60 days or less are valued at amortized cost.
Other fixed income and debt securities, including listed securities
and securities for which price quotations are available, will
normally be valued on the basis of valuations furnished by a pricing
service. Investments for which valuations or market quotations are
unavailable are valued at fair value using methods determined in
good faith by or at the direction of the Trustees.
B. Federal Taxes - The Portfolio is treated as a partnership for
Federal tax purposes. No provision is made by the Portfolio for
federal or state taxes on any taxable income of the Portfolio
because each investor in the Portfolio is ultimately responsible for
the payment of any taxes on its share of such income. Since some of
the Portfolio's investors are regulated investment companies that
invest all or substantially all of their assets in the Portfolio,
the Portfolio normally must satisfy the applicable source of income
and diversification requirements, (under the Internal Revenue Code),
in order for its investors to satisfy them. The Portfolio will
allocate, at least annually among its investors, each investor's
distributive share of the Portfolio's net investment income, net
realized capital gains, and any other items of income, gain, loss,
deduction or credit. Withholding taxes on foreign dividends and
capital gains have been provided for in accordance with the Trust's
understanding of the applicable countries' tax rules and rates.
C. Deferred Organization Expenses - Costs incurred by the Portfolio
in connection with its organization, including registration costs,
are being amortized on the straight-line basis over five years.
D. Futures Contracts - Upon the entering of a financial futures
contract, the Portfolio is required to deposit ("initial margin")
either in cash or securities an amount equal to a certain percentage
of the purchase price indicated in the financial futures contract.
Subsequent payments are made or received by the Portfolio ("margin
maintenance") each day, dependent on daily fluctuations in the value
of the underlying security, and are recorded for book purposes as
unrealized gains or losses by the Portfolio. The Portfolio's
investment in financial futures contracts is designed only to hedge
against anticipated future changes in interest or currency exchange
rates. Should interest or currency exchange rates move unexpectedly,
the Portfolio may not achieve the anticipated benefits of the
financial futures contracts and may realize a loss.
E. Options on Foreign Currency - Upon the purchase of a put option
on foreign currency by the Portfolio, the premium paid is recorded
as an investment, the value of which is marked-to-market daily. When
a purchased option expires, the Portfolio will realize a loss in the
amount of the cost of the option. When a Portfolio enters into a
closing sales transaction, the Portfolio will realize a gain or loss
depending on whether the sales proceeds from the closing sales
transaction are greater or less than the cost of the option. When a
Portfolio exercises a put option, settlement is made in cash. The
risk associated with purchasing options is limited to the premium
originally paid.
F. Foreign Currency Translation - Investment valuations, other
assets, and liabilities initially expressed in foreign currencies
are converted each business day into U.S. dollars based upon current
exchange rates. Purchases and sales of foreign investment securities
and income and expenses are converted into U.S. dollars based upon
currency exchange rates prevailing on the respective dates of such
transactions. Recognized gains or losses on investment transactions
attributable to foreign currency rates are recorded for financial
statement purposes as net realized gains and losses on investments.
That portion of unrealized gains and losses on investments that
result from fluctuations in foreign currency exchange rates are not
separately disclosed.
G. Forward Foreign Currency Exchange Contracts - The Portfolio may
enter into forward foreign currency exchange contracts for the
purchase or sale of a specific foreign currency at a fixed price
on a future date. Risks may arise upon entering these contracts
from the potential inability of counterparties to meet the terms
of their contracts and from movements in the value of a foreign
currency relative to the U.S. dollar. The Portfolio will enter into
forward contracts for hedging purposes as well as non-hedging purposes.
The forward foreign currency exchange contracts are adjusted by the
daily exchange rate of the underlying currency and any gains or
losses are recorded for financial statement purposes as unrealized
until such time as the contracts have been closed or offset.
H. Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expense
during the reported period. Actual results could differ from those
estimates.
I. Other - Investment transactions are accounted for on the date the
investments are purchased or sold. Dividend income is recorded on
the ex-dividend date. However, if the ex-dividend date has passed,
certain dividends from foreign securities are recorded as the
Portfolio is informed of the ex-dividend date. Interest income is
recorded on the accrual basis.
J. Expense Reduction - Investors Bank & Trust Company (IBT), serves
as custodian of the Portfolio. Prior to November 10, 1995, IBT was
an affiliate of EVM. Pursuant to the custodian agreement, IBT
receives a fee reduced by credits which are determined based on the
average cash balances the Portfolio maintains with IBT. All
significant credit balances used to reduce the Portfolio's custodian
fees are reflected as a reduction of operating expenses in the
Statement of Operations.
(2) Investment Adviser Fee and Other Transactions with Affiliates
The investment adviser fee is earned by Boston Management and
Research (BMR), a wholly-owned subsidiary of Eaton Vance Management
(EVM), and Lloyd George Investment Management (Bermuda) Limited, an
affiliate of EVM, (the Advisers) as compensation for management and
investment advisory services rendered to the Portfolio. Under the
advisory agreement, the Advisers receive a monthly fee, divided
equally between them, of 0.0625% (0.75% annually) of the average
daily net assets of the Portfolio up to $500,000,000, and at reduced
rates as daily net assets exceed that level. For the period from the
start of business, September 18, 1995 to August 31, 1996 the adviser
fee was 0.75% (annualized) of average net assets for such period and
amounted to $199,131. In addition, an administrative fee is earned
by EVM for managing and administering the business affairs of the
Portfolio. Under the administration agreement, EVM earns a monthly
fee in the amount of 1/48th of 1% (equal to 0.25% annually) of the
average daily net assets of the Portfolio up to $500,000,000, and at
reduced rates as daily net assets exceed that level. For the period
from the start of business, September 18, 1995 to August 31, 1996,
the administration fee was 0.25% (annualized) of average net assets
for such period and amounted to $66,210. Except as to Trustees of
the Portfolio who are not members of the Advisers or EVM's
organization, officers and Trustees receive remuneration for their
services to the Portfolio out of such investment adviser and
administrative fees.
Trustees of the Portfolio that are not affiliated with the Advisers
may elect to defer receipt of all or a percentage of their annual
fees in accordance with the terms of the Trustees Deferred
Compensation Plan. For the period ended August 31, 1996, no
significant amounts have been deferred.
Certain of the officers and Trustees of the Portfolio are officers
or directors/trustees of the above organizations.
(3) Investment Transactions
Purchases and sales of investments, other than short-term
obligations, aggregated $70,236,045 and $30,143,015, respectively.
(4) Federal Income Tax Basis of Investments
The cost and unrealized appreciation (depreciation) in value of the
investments owned at August 31, 1996, as computed on a federal
income tax basis, are as follows:
Aggregate cost $ 40,562,295
==========
Gross unrealized appreciation $3,447,113
Gross unrealized depreciation 1,015,612
----------
Net unrealized appreciation $2,431,501
==========
(5) Risks Associated with Foreign Investments
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 U.S. 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. 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 general,
there is less overall governmental supervision and regulation of
foreign securities markets, broker-dealers, and issuers than in the
United States.
(6) Financial Instruments
The Portfolio regularly trades in financial instruments with off-
balance sheet risk in the normal course of its investing activities
to assist in managing exposure to various market risks. These
financial instruments include written options, forward foreign
currency exchange contracts and financial futures contracts and may
involve, to a varying degree, elements of risk in excess of the
amounts recognized for financial statement purposes.
The notional or contractual amounts of these instruments represent
the investment the Portfolio has in particular classes of financial
instruments and does not necessarily represent the amounts
potentially subject to risk. The measurement of the risks associated
with these instruments is meaningful only when all related and
offsetting transactions are considered.
The Portfolio did not have any open obligations under these
financial instruments at August 31, 1996.
(7) Line of Credit
The Portfolio participates with other portfolios and funds managed
by BMR and EVM and its affiliates in a $120 million unsecured line
of credit agreement with a bank. The line of credit consists of a
$20 million committed facility and a $100 million discretionary
facility. Borrowings will be made by the Portfolio solely to
facilitate the handling of unusual and/or unanticipated short-term
cash requirements. Interest is charged to each portfolio based on
its borrowings at an amount above either the bank's adjusted
certificate of deposit rate, a variable adjusted certificate of
deposit rate, or a federal funds effective rate. In addition, a fee
computed at an annual rate of 1/4 of 1% on the $20 million committed
facility and on the daily unused portion of the $100 million
discretionary facility is allocated among the participating funds
and portfolios at the end of each quarter. The Portfolio did not
have any significant borrowings or allocated fees during the period.
Independent Auditors' Report
To the Trustees and Investors of
Information Age Portfolio:
We have audited the accompanying statement of assets and liabilities
of Information Age Portfolio, including the portfolio of
investments, as of August 31, 1996, and the related statement of
operations, the statement of changes in net assets and the
suplementary data for the period from the start of business,
September 18, 1995, to August 31, 1996. These financial statements
and supplementary data are the responsibility of the Portfolio's
management. Our responsibility is to express an opinion on these
financial statements and supplementary data based on our audit.
We conducted our audit in accordance with auditing standards
generally accepted in the United States of America. 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, 1996 by correspondence with the
custodian and brokers; where replies were not received from brokers
we performed other auditing procedures. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements and supplementary data
present fairly, in all material respects, the financial position of
Information Age Portfolio as of August 31, 1996, and the results of
its operations, changes in its net assets and supplementary data for
the respective stated period, in conformity with United States
generally accepted accounting principles.
Coopers & Lybrand
Chartered Accountants
Toronto, Canada
October 4, 1996
This page intentionally left blank.
EV Traditional
Information
Age Fund
Officers
- -----------------------
James B. Hawkes
President and Trustee
M. Dozier Gardner
Vice President
William D. Burt
Vice President
Barclay Tittmann
Vice President
James L. O'Connor
Treasurer
Thomas Otis
Secretary
Independent Trustees
Donald R. Dwight
President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment Banking,
Harvard University Graduate School of Business Administration
Norton H. Reamer
President and Director, United Asset
Management Corporation
John L. Thorndike
Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
Information
Age Portfolio
Officers
- --------------------------
James B. Hawkes
President and Trustee
William Chisholm
Vice President
Michel Normandeau
Vice President
Raymond O'Neill
Vice President
Duncan W. Richardson
Vice President and Co-Portfolio Manager
Hon. Robert Lloyd George
Vice President, Trustee and Co-Portfolio Manager
James L. O'Connor
Treasurer
Thomas Otis
Secretary
Independent Trustees
- ---------------------------
Hon. Edward K.Y. Chen
Professor and Director, Center for Asian Studies,
University of Hong Kong
Donald R. Dwight
President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment Banking,
Harvard University Graduate School of Business Administration
Norton H. Reamer
President and Director, United Asset
Management Corporation
John L. Thorndike
Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
[LOGO: ARCHED DOORWAY]
Caption reads: EATON VANCE MUTUAL FUNDS
Sponsor and Manager of
EV Traditional Information Age Fund
and Administrator of
Information Age Portfolio
Eaton Vance Management
24 Federal Street
Boston, MA 02110
Co-Advisers of Information Age Portfolio
Boston Management and Research
24 Federal Street
Boston, MA 02110
Lloyd George Investment Management
(Bermuda) Limited
3808 One Exchange Square
Central, Hong Kong
Principal Underwriter
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
Custodian
Investors Bank & Trust Company
89 South Street
Boston, MA 02205-1537
Transfer Agent
First Data Investor Services Group
Attn: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its distribution
plan, sales charges and expenses. Please read the prospectus carefully
before you invest or send money.
T-IASRC-10/96
