<PAGE>
[PICTURE OF HONG KONG
SKYLINE APPEARS HERE]
[LOGO OF EATON VANCE
APPEARS HERE]
Semiannual Report February 28, 1998
EATON VANCE
[PICTURE OF DRAGON
APPEARS HERE] GREATER CHINA
GROWTH FUND
Global Management-Global Distribution
[PICTURE OF GREAT WALL OF CHINA APPEARS HERE]
<PAGE>
Eaton Vance Greater China Growth Fund as of February 28, 1998
INVESTMENT UPDATE
Investment Environment
- --------------------------------------------------------------------------------
The China Region Markets
. In the Fall of 1997, during the Asian currency crisis, China-region markets
were extremely weak, with most markets posting double-digit losses for the
year. So far in 1998, however, the markets have mounted a recovery. Hong Kong
has rallied in response to the government's new fiscal year budget, while
last year's most hard-hit markets-Thailand, Korea and Malaysia- have each
rebounded strongly.
. Hong Kong announced the biggest tax cut in its history in February-a $12.9
billion package to be spread over the next four years. In addition, the Hong
Kong government announced a planned 11.2% rise in public spending.
. Despite the currency woes of its China-region neighbors, Taiwan's economy
continued to soar, boasting a 7.1% growth rate in the fourth quarter.
Taiwan's resurgence was fueled primarily by an expanding manufacturing
sector.
The Fund
- --------------------------------------------------------------------------------
Performance for the Past Six Months
. The Fund's Class A shares had a total return of -32.6% during the six months
ended February 28, 1998./1/ This return resulted from a decline in net asset
value per share (NAV) to $11.93 on February 28, 1998 from $17.71 on August
31, 1997.
. The Fund's Class B shares had a total return of -33.0% during the six months
ended February 28, 1998./1/ This return resulted from a decline in NAV to
$10.81 on February 28, 1998 from $16.13 on August 31, 1997.
. The Fund's Class C shares had a total return of -32.9% during the six months
ended February 28, 1998./1/ This return resulted from a decline in NAV to
$7.36 on February 28, 1998 from $10.97 on August 31, 1997.
Recent Portfolio Shifts
. Last year's financial crisis generated some uncertainty about the region's
near-term economic growth. Accordingly, the Portfolio maintained a major
emphasis on Hong Kong, the region's strongest economy with a sound currency
and banking system. Hong Kong represented 72.8% of the Portfolio's
investments at February 28.
. Taiwan was the Portfolio's second largest weighting, at 9.2%. Because its
economy is more closely tied to the U.S. than to Southeast Asia, Taiwan was
somewhat insulated from the region's difficulties. Taiwan's GDP growth is
expected to be 6% in 1998, only slightly lower than last year.
Selected investments in the China region
. The Portfolio's largest investment was HSBC Holdings, the parent of Hong Kong
& Shanghai Bank. HSBC is the leading bank in Hong Kong and serves as a major
conduit for capital investment in mainland China. Hutchison Whampoa, a Hong
Kong-based conglomerate, increased its China property portfolio, enjoyed
higher container volumes at its port facilities, and sharply increased its
telecom subscriber base.
. In Taiwan, the Portfolio emphasized electronics manufacturers, like Taiwan
Semiconductor and Unitech Electronics. These companies produce high-quality
chips and circuit boards for an export market that has protected them from
Asia's economic vagaries.
. The Portfolio had selected investments in Thailand and Malaysia, where
investor sentiment is slowly improving following recent turmoil. Thailand's
Electricity Generating Company is privatizing the country's electric
utilities. Malayan Banking Berhad is Malaysia's largest banking group and
should be among the winners in an anticipated shakeout of the financial
sector.
- --------------------------------------------------------------------------------
Mutual fund shares are not insured 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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Fund Information
as of February 28, 1998
Performance/2/
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
Class A Class B Class C
------- ------- -------
One Year -24.0% -24.5% -24.6%
Five Years 4.8 n/a n/a
Life of Fund+ 5.5 1.9 -7.0
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- --------------------------------------------------------------------------------
Class A Class B Class C
------- ------- -------
One Year -28.3% -28.3% -25.3%
Five Years 3.5 n/a n/a
Life of Fund+ 4.4 1.5 -7.0
+Class A: (10/28/92); Class B: (6/7/93); Class C: (12/28/93)
Ten Largest Holdings/3/
- --------------------------------------------------------------------------------
By total net assets
HSBC Holdings PLC 10.3%
Hutchison Whampoa 6.9
Cheung Kong Holdings Ltd. 5.1
New World Development 4.9
Shanghai Industrial Holdings Ltd. 4.5
China Telecom 3.4
Hang Seng Bank 3.0
Electricity Generating 3.0
China Resources Enterprises 2.8
China Merchants Holdings 2.7
/1/ These returns do not include the 5.75% maximum sales charge for the Fund's
Class A shares or the applicable contingent deferred sales charges (CDSC)
for the Fund's Class B and Class C shares. /2/ Returns are calculated by
determining the percentage change in net asset value (NAV) with all
distributions reinvested. SEC average annual returns for Class A reflect a
sales charge as noted; for Class B, returns reflect applicable CDSC based on
the following schedule: 5%-1st and 2nd years; 4%-3rd year; 3%-4th year; 2%-
5th year; 1%-6th year; for Class C, returns reflect 1% CDSC. /3/ Based on
market value. Ten largest holdings represent 46.6% of the Portfolio's
investments. Holdings are subject to change.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
2
<PAGE>
Eaton Vance Greater China Growth Fund as of February 28, 1998
FINANCIAL STATEMENTS (Unaudited)
Statement of Assets and Liabilities
As of February 28, 1998
Assets
- --------------------------------------------------------------------------------
Investment in Greater China Growth Portfolio, at value (Note 1A)
(identified cost, $273,685,396) $ 296,860,706
Receivable for Fund shares sold 1,288,843
Deferred organization expenses (Note 1E) 178
- --------------------------------------------------------------------------------
Total assets $ 298,149,727
- --------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------
Payable for Fund shares redeemed $ 2,139,221
Payable to affiliate for Trustees' fees (Note 4) 2,098
Accrued expenses 195,605
- --------------------------------------------------------------------------------
Total liabilities $ 2,336,924
- --------------------------------------------------------------------------------
Net Assets $ 295,812,803
- --------------------------------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------------------------------
Paid-in capital $ 304,208,688
Accumulated net realized loss on investments from Portfolio
(computed on the basis of identified cost) (20,470,403)
Accumulated distributions in excess of net investment income (11,100,792)
Net unrealized appreciation of investments from Portfolio
(computed on the basis of identified cost) 23,175,310
- --------------------------------------------------------------------------------
Total $ 295,812,803
- --------------------------------------------------------------------------------
Class A Shares
- --------------------------------------------------------------------------------
Net Assets $ 119,864,802
Shares Outstanding 10,048,682
Net Asset Value and Redemption Price Per Share
(Net assets divided by shares of beneficial interest
outstanding) $ 11.93
Offering Price Per Share
(100 divided by 94.25 of net asset value per share) $ 12.66
- --------------------------------------------------------------------------------
Class B Shares
- --------------------------------------------------------------------------------
Net Assets $ 163,186,121
Shares Outstanding 15,095,694
Net Asset Value, Offering Price and Redemption Price Per
Share (Note 6)
(Net assets divdided by shares of beneficial interest
outstanding) $ 10.81
- --------------------------------------------------------------------------------
Class C Shares
- --------------------------------------------------------------------------------
Net Assets $ 12,761,880
Shares Outstanding 1,734,409
Net Asset Value, Offering Price and Redemption Price Per
Share (Note 6)
(Net assets divided by shares of beneficial interest
outstanding) $ 7.36
- --------------------------------------------------------------------------------
On sales of $50,000 or more, the offering price of Class A shares is reduced.
Statement of Operations
For the Six Months Ended
February 28, 1998
Investment Income (Note 1B)
- --------------------------------------------------------------------------------
Dividend income allocated from Portfolio
(net of foreign taxes, $38,064) $ 2,186,859
Interest income allocated from Portfolio 89,130
Expenses allocated from Portfolio (1,818,912)
- --------------------------------------------------------------------------------
Net investment income from Portfolio $ 457,077
- --------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------
Management fee (Note 4) $ 421,829
Compensation of Trustees not members of the
Administrator's organization (Note 4) 3,413
Distribution and service fees (Note 5)
Class A 335,842
Class B 933,767
Class C 61,631
Transfer and dividend disbursing agent fees 368,964
Printing and postage 50,324
Custodian fee 16,161
Legal and accounting services 6,415
Registration fees 22,782
Amortization of organization expenses (Note 1E) 25,902
Miscellaneous 56,013
- --------------------------------------------------------------------------------
Total expenses $ 2,303,043
- --------------------------------------------------------------------------------
Net investment loss $ (1,845,966)
- --------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Portfolio
- --------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ (4,642,124)
Foreign currency transactions (1,641,153)
- --------------------------------------------------------------------------------
Net realized loss on investment transactions $ (6,283,277)
- --------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments $(156,846,400)
Foreign currency 432,003
- --------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)
of investments $(156,414,397)
- --------------------------------------------------------------------------------
Net realized and unrealized loss on investments $(162,697,674)
- --------------------------------------------------------------------------------
Net decrease in net assets from operations $(164,543,640)
- --------------------------------------------------------------------------------
See notes to financial statements
3
<PAGE>
Eaton Vance Greater China Growth Fund as of February 28, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
Six Months Ended
Increase (Decrease) February 28, 1998 Year Ended
in Net Assets (Unaudited) August 31, 1997
- --------------------------------------------------------------------------------
From operations --
Net investment loss $ (1,845,966) $ (2,154,491)
Net realized gain (loss) on
investment transactions (6,283,277) 16,561,774
Net change in unrealized
appreciation (depreciation)
of investments (156,414,397) 62,007,114
- --------------------------------------------------------------------------------
Net increase (decrease) in net
assets from operations $(164,543,640) $ 76,414,397
- --------------------------------------------------------------------------------
Distributions to shareholders (Note 2) --
In excess of net investment income
Class B $ -- $ (1,268,020)
- --------------------------------------------------------------------------------
Total distributions to shareholders $ -- $ (1,268,020)
- --------------------------------------------------------------------------------
Transactions in shares of beneficial
interest (Note 3) --
Proceeds from sale of shares
Class A $ 39,277,364 $ --
Class B 34,488,530 103,762,855
Class C 8,580,960 --
Net asset value of shares
issued to shareholders in
payment of distributions
declared
Class B -- 1,092,347
Cost of shares redeemed
Class A (66,956,402) --
Class B (73,862,388) (167,989,794)
Class C (8,994,923) --
- --------------------------------------------------------------------------------
Net decrease in net assets from
Fund share transactions $ (67,466,859) $ (63,134,592)
- --------------------------------------------------------------------------------
Contribution from EV Traditional
and Classic Greater China
Growth Fund (Note 8) $ 231,236,821 $ --
- --------------------------------------------------------------------------------
Net increase (decrease) in net assets $ (773,678) $ 12,011,785
- --------------------------------------------------------------------------------
Six Months Ended
February 28, 1998 Year Ended
Net Assets (Unaudited) August 31, 1997
- --------------------------------------------------------------------------------
At beginning of period $ 296,586,481 $ 284,574,696
- --------------------------------------------------------------------------------
At end of period $ 295,812,803 $ 296,586,481
- --------------------------------------------------------------------------------
Accumulated
distributions in excess
of net investment income
included in net assets
- --------------------------------------------------------------------------------
At end of period $ (11,100,792) $ (4,981,943)
- --------------------------------------------------------------------------------
See notes to financial statements
4
<PAGE>
Eaton Vance Greater China Growth Fund as of February 28, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Six Months Ended Year Ended August 31,
February 28, 1998 ------------------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993*
--------------------------------------------------------------------------------------------
Class A Class B Class C Class B Class B Class B Class B Class B
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value--Beginning of period $ 17.710 $ 16.130 $ 10.970 $ 12.450 $ 11.890 $ 13.160 $ 10.540 $10.000
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment loss $ (0.051)++ $ (0.074)++ $ (0.053)++ $ (0.181) $ (0.087) $ (0.038) $ (0.039) $(0.015)
Net realized and unrealized gain
(loss) on investments (5.729) (5.246) (3.557) 3.921 0.647 (1.157) 2.684 0.555
- ------------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ (5.780) $ (5.320) $ (3.610) $ 3.740 $0.560 $ (1.195) $ 2.645 $ 0.540
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income $ -- $ -- $ -- $ (0.060) $ -- $ (0.065) $ -- $ --
In excess of net realized gain on
investments -- -- -- -- -- (0.010) (0.025) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions $ -- $ -- $ -- $ (0.060) $ -- $ (0.075) $ (0.025) $ --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End of period $ 11.930 $ 10.810 $ 7.360 $ 16.130 $ 12.450 $ 11.890 $ 13.160 $10.540
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return (1) (32.64)% (32.98)% (32.91)% 30.15% 4.71% (9.06)% 25.08% 5.40%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(000's omitted) $119,865 $163,186 $ 12,762 $296,586 $284,575 $324,258 $392,479 $63,672
Ratio of expenses to average daily net
assets (2)(3) 2.24%+ 2.74%+ 2.75%+ 2.66% 2.63% 2.47% 2.38% 2.21%+
Ratio of expenses to average daily net
assets after custodian fee
reduction (2) 2.15%+ 2.65%+ 2.66%+ 2.63% 2.57% -- -- --
Ratio of net investment loss to average
daily net assets (0.81)%+ (1.29)%+ (1.37)%+ (0.75)% (0.51)% (0.02)% (0.55)% (1.44)%+
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
++ Computed using average shares outstanding.
* For the period from the start of business, June 7, 1993, to August 31, 1993.
(1) 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 ex-dividend date. Total return is not computed
on an annualized basis.
(2) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(3) The expense ratios for the year ended August 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Fund, as well as its corresponding
Portfolio, to increase its expense ratio by the effect of any expense offset
arrangements with its service providers. The expense ratios for each of the
prior periods have not been adjusted to reflect this change.
See notes to financial statements
5
<PAGE>
Eaton Vance Greater China Growth Fund as of February 28, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1 Significant Accounting Policies
----------------------------------------------------------------------------
Eaton Vance Greater China Growth Fund (the Fund) is a diversified series of
Eaton Vance Growth Trust (the Trust). The Trust is an entity of the type
commonly known as a Massachusetts business trust and is registered under the
Investment Company Act of 1940, as amended, as an open-end management
investment company. The Fund offers three classes of shares. Class A shares
are sold subject to a sales charge imposed at the time of purchase. Class B
and Class C shares are sold at net asset value and are subject to a
contingent deferred sales charge (See Note 6). All classes of shares have
equal rights to assets and voting privileges. Realized and unrealized gains
and losses and net investment income, other than class specific expenses,
are allocated daily to each class of shares based on the relative net assets
of each class to the total net assets of the Fund. Each class of shares
differs in its distribution plan and certain other class specific expenses.
The Fund invests all of its investable assets in interests in Greater China
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 (99.2% at February 28, 1998). 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 1A of the Portfolio's Notes to Financial Statements which
are included elsewhere in this report.
B Income -- The Fund's net investment income consists of the Fund's pro rata
share of the net investment income of the Portfolio, less all actual and
accrued expenses of the Fund determined in accordance with generally
accepted accounting principles.
C Expense Reduction -- Investors Bank & Trust Company (IBT) 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 balance the Fund or the Portfolio
maintains with IBT. All significant credit balances used to reduce the
Fund's or Portfolio's custodian fees are reported as a reduction of
operating expenses in the Statement of Operations.
D 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, 1997, the Fund, for federal
income tax purposes, had capital loss carryovers which will reduce the
taxable income arising from future net realized gain on investments, if any,
to the extent permitted by the Internal Revenue Code and thus will reduce
the amount of distributions to shareholders which would otherwise be
necessary to relieve the Fund of any liability for federal income or excise
tax. Such capital loss carryovers will expire August 31, 2002 ($173,960),
August 31, 2003 ($337,254) and August 31, 2004 ($10,990,773).
E 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.
F Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expense during the reporting period. Actual results could
differ from those estimates.
G Other -- Investment transactions are accounted for on a trade date basis.
H Interim Financial Statements -- The interim financial statements relating
to February 28, 1998 and for the six-month period then ended have not been
audited by independent certified public accountants, but in the opinion of
the Fund's management, reflect all adjustments, consisting only of normal
recurring adjustments, necessary for the fair presentation of the financial
statements.
6
<PAGE>
Eaton Vance Greater China Growth Fund as of February 28, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
2 Distributions to Shareholders
----------------------------------------------------------------------------
It is present policy of the Fund to make at least one distribution annually
(normally in December) of all or substantially all of the net investment
income allocated to the Fund by the Portfolio, less the Fund's direct
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 to the Fund by the Portfolio, if
any. Shareholders may reinvest all distributions in shares of the Fund at
the per share net asset value as of the close of business on the ex-dividend
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 temporary 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.
3 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).
Such shares may be issued in a number of different classes. Transactions in
Fund shares were as follows:
Six Months Ended
February 28, 1998
Class A (Unaudited)
----------------------------------------------------------------------------
Sales 3,542,939
Redemptions (5,502,283)
Issued to EV Traditional Greater China Growth
Fund shareholders 12,008,026
----------------------------------------------------------------------------
Net increase 10,048,682
----------------------------------------------------------------------------
Six Months Ended
February 28, 1998 Year Ended
Class B (Unaudited) August 31, 1997
----------------------------------------------------------------------------
Sales 3,238,510 7,421,637
Issued to shareholders
electing to receive
payment of 82,879
distributions in Fund --
shares
Redemptions (6,532,461) (11,978,067)
----------------------------------------------------------------------------
Net decrease (3,293,951) (4,473,551)
----------------------------------------------------------------------------
Six Months Ended
February 28, 1998
Class C (Unaudited)
----------------------------------------------------------------------------
Sales 1,209,593
Redemptions (1,165,151)
Issued to EV Traditional Greater China Growth
Fund shareholders 1,689,967
----------------------------------------------------------------------------
Net increase 1,734,409
----------------------------------------------------------------------------
4 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 six months
ended February 28, 1998 the fee was equivalent to 0.25% of the Fund's
average net assets for such period and amounted to $421,829. 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 Funds' principal underwriter, received $33,752 from the Eaton Vance
Greater China Growth Fund as its portion of the sales charge on sales of
Class A shares for the six months ended February 28, 1998.
Certain officers and Trustees of the Fund and the Portfolio are
directors/trustees of the above organization. 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.
7
<PAGE>
Eaton Vance Greater China Growth Fund as of February 28, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
5 Distribution Plan
----------------------------------------------------------------------------
The Fund has adopted distribution plans (Class A Plan, Class B Plan, Class C
Plan, the Plans) pursuant to Rule 12b-1 under the Investment Company Act of
1940. The Plan requires the Fund to pay the Principal Underwriter, Eaton
Vance Distributors, Inc. (EVD) amounts equal to 1/365 of 0.75% of the Fund's
average daily net assets attributable to both Class B and Class C shares and
an amount equal to (a) 0.50% of that portion of the Fund's Class A shares
average daily net assets attributable to Class A shares of the Fund which
have remained outstanding for less than one year and (b) 0.25% of that
portion of the Fund's Class A average daily net assets which is attributable
to Class A shares of the Fund which have remained outstanding for more than
one year, for providing ongoing distribution services and facilities to the
Fund. The Fund will automatically discontinue payments to EVD during any
period in which there are no outstanding Uncovered Distribution Charges,
which are equivalent to the sum of (i) 5% and 6.25% of the aggregate amount
received by the Fund for the Class B and Class C shares sold, respectively
plus, (ii) distribution fees calculated by applying the rate of 1% over the
prevailing prime rate to the outstanding balance of Uncovered Distribution
Charges of EVD of each respective class reduced by the aggregate amount of
contingent deferred sales charges (see Note 6) and daily amounts theretofore
paid to EVD by each respective class. The Fund paid or accrued $184,947,
$709,317, and $46,223 for Class A, Class B, and Class C shares, respectively
to or payable to EVD for the six months ended February 28, 1998,
representing 0.28%, 0.75%, and 0.75% of the average daily net assets for
Class A, Class B, and Class C shares, respectively. At February 28, 1998,
the amount of Uncovered Distribution Charges EVD calculated under the Plan
was approximately $4,990,000 and $3,666,000 for Class B and Class C shares
respectively.
In addition, the Plans authorize the Fund to make payments of service fees
to the Principal Underwriter, Authorized Firms and other persons in amounts
not exceeding 0.25% of the Fund's average daily net assets attributable to
Class A, Class B, and Class C shares for each fiscal year. The Trustees have
initially implemented the Plans by authorizing the Fund to make quarterly
payments of service fees to the Principal Underwriter and Authorized Firms
in amounts not expected to exceed 0.25% per annum of the Fund's average
daily net assets attributable to Class A, Class B and Class C shares based
on the value of Fund shares sold by such persons and remaining outstanding
for at least one year. Service fee payments will be made for personal
services and/or the maintenance of shareholder accounts. Service fees are
separate and distinct from the sales commissions and distribution fees
payable by the Fund to EVD, and, as such are not subject to automatic
discontinuance when there are no outstanding Uncovered Distribution Charges
of EVD. Service fee payments for the six months ended February 28, 1998
amounted to $150,895, $224,450, and $15,408 for Class A, Class B, and Class
C shares, respectively.
Certain officers and Trustees of the Fund are officers or directors of EVD.
6 Contingent Deferred Sales Charge
----------------------------------------------------------------------------
A contingent deferred sales charge (CDSC) is imposed on any redemption of
Class B shares made within six years of purchase. A CDSC is imposed on
certain Class C shares redeemed within one year of purchase. Generally, the
CDSC is based upon the lower of the net asset value at date of redemption or
date of purchase. No charge is levied on shares acquired by reinvestment of
dividends or capital gains distributions. Class B CDSC is imposed at
declining rates that begin at 5% in the case of redemptions in the first and
second year after purchase, declining one percentage point each subsequent
year. Class C shares will be subject to a 1% CDSC if redeemed within one
year of purchase. No CDSC is levied on shares which have been sold to EVM or
its affiliates or to their respective employees or clients. CDSC charges are
paid to EVD to reduce the amount of Uncovered Distribution Charges
calculated under each Fund's Distribution Plan (See Note 5). CDSC charges
received when no Uncovered Distribution Charges exist will be credited to
the Fund. EVD received approximately $854,000 and $21,000 of CDSC paid by
shareholders for Class B shares and Class C shares, respectively, for the
six months ended February 28, 1998.
7 Investment Transactions
----------------------------------------------------------------------------
Increases and decreases in the Fund's investment in the Portfolio aggregated
$86,485,105 and $163,190,319 for the six months ended February 28 1998.
8 Transfer of Net Assets
On September 1, 1997, EV Marathon Greater China Growth Fund received the net
assets of the EV Traditional Greater China Growth Fund and EV Classic
Greater China
8
<PAGE>
Eaton Vance Greater China Growth Fund as of February 28, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
Growth Fund pursuant to an Agreement and Plan of Reorganization dated June
23, 1997. In accordance with the agreement, EV Marathon Greater China Growth
Fund, at the closing, issued 12,008,026 Class A shares and 1,689,967 Class C
shares of the Fund having an aggregate value of $212,699,579 and
$18,537,242, respectively. As a result the Fund issued one Class A share and
one Class C share for each share of EV Traditional Greater China Growth Fund
and EV Classic Greater China Growth Fund, respectively. The transaction was
structured for tax purposes to qualify as a tax free reorganization under
the Internal Revenue Code. The EV Traditional Greater China Growth Fund's
and EV Classic Greater China Growth Fund's net assets at the date of the
transaction were $212,699,579 and $18,537,242, respectively, including
$74,646,817 and $6,082,848 of unrealized appreciation. Directly after the
merger, the combined net assets of the Eaton Vance Greater China Growth Fund
(formerly "EV Marathon Greater China Growth Fund") were $527,823,302 with a
net asset value of $17.71, $16.13 and $10.97 for Class A, Class B and Class
C, respectively.
9 Name Change
----------------------------------------------------------------------------
Effective September 1, 1997, the EV Marathon Greater China Growth Fund
changed its name to Eaton Vance Greater China Growth Fund.
9
<PAGE>
Greater China Growth Portfolio as of February 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited)
Common Stocks -- 93.9%
Shares Value
- ---------------------------------------------------------------------------
China -- 0.2%
Electrical Equipment -- 0.1%
- ---------------------------------------------------------------------------
Beijing Orient Elect. 426,100 $ 126,562
The company is mainly engaged in
the manufacture of electronics and
lighting products.
- ---------------------------------------------------------------------------
$ 126,562
- ---------------------------------------------------------------------------
Industrial / Manufacturing -- 0.1%
- ---------------------------------------------------------------------------
Shanghai Yaohua Pilkington 2,091,113 $ 397,311
Glass manufacturer.
- ---------------------------------------------------------------------------
$ 397,311
- ---------------------------------------------------------------------------
Total China
(identified cost $2,102,517) $ 523,873
- ---------------------------------------------------------------------------
Hong Kong -- 72.8%
Chemicals -- 1.4%
- ---------------------------------------------------------------------------
Shanghai Petrochemical 25,580,000 $ 4,228,372
A highly integrated petrochemical
complex which processes crude oil
into a broad range of synthetic
fibers, resins and plastics,
intermediate petrochemicals and
petroleum products.
- ---------------------------------------------------------------------------
$ 4,228,372
- ---------------------------------------------------------------------------
Communications Services -- 3.4%
- ---------------------------------------------------------------------------
China Telecom* 5,590,000 $ 10,142,636
Consists of the two largest
provincial mobile telephone
operators under the control of
the Ministry of Post &
Telecommunications.
- ---------------------------------------------------------------------------
$ 10,142,636
- ---------------------------------------------------------------------------
Diversified Trading -- 19.3%
- ---------------------------------------------------------------------------
China Everbright Pacific Ltd. 2,500,000 $ 2,405,243
Diversified company with interests
in retailing, property, investment
and development, hotels and
restaurant operations.
China Resources Enterprises 3,838,000 8,376,341
Property investment and
development.
Cosco Pacific Ltd. 3,640,000 3,408,020
Transportation, container
manufacturer (through JV),
owning and leasing.
- ---------------------------------------------------------------------------
Diversified Trading (continued)
- ---------------------------------------------------------------------------
Guang Nan Holdings Ltd. 6,000,000 $ 4,261,639
Trader of foodstuffs and non-
foodstuffs, processing and
distribution of foodstuffs.
Hutchison Whampoa 2,900,000 20,504,294
Diversified company with
interests in property
development, ports, retailing,
manufacturing,
telecommunications, media,
energy, finance
and investment.
Li & Fung Ltd. 2,312,000 3,493,304
Export trading of consumer
products.
NG Fung Hong Ltd. 7,540,000 7,984,503
Trader of foodstuffs and
non-foodstuffs.
Wharf Holdings Ltd. 3,501,200 7,302,173
Diversified company with
interests in property
development and investments,
terminals and warehousing,
public transportation
and communications.
- ---------------------------------------------------------------------------
$ 57,735,517
- ---------------------------------------------------------------------------
Electric Utilities -- 3.4%
- ---------------------------------------------------------------------------
Beijing Datang Power* 5,212,000 $ 2,658,669
Engaged in the operation of coal
fired electric power plants in
Northern China.
CLP Holdings, Ltd. 1,430,000 7,423,775
Is the monopolist power
supplier to Kowloon, the New
Territories and Lantau Island
which together account for
nearly 75% of Hong Kong's
6 million population.
- ---------------------------------------------------------------------------
$ 10,082,444
- ---------------------------------------------------------------------------
Engineering and Construction -- 1.0%
- ---------------------------------------------------------------------------
Sichuan Expressway Co. 20,000,000 $ 2,996,061
Is a toll road operator in Sichuan
province, China.
- ---------------------------------------------------------------------------
$ 2,996,061
- ---------------------------------------------------------------------------
Financial -- 13.8%
- ---------------------------------------------------------------------------
Hang Seng Bank 940,000 $ 8,891,974
Provides a full range of banking and
related financial services and
compilation of Hang Seng Index of
33 selected stocks listed on the HK
Stock Exchange.
HSBC Holdings PLC 1,060,900 30,689,172
Provides a comprehensive range
of banking and related
financial services through an
international network of more
than 3,000 offices in 71
countries in Europe, the Asia
Pacific region, the Middle East
and the Americas.
See notes to financial statements
10
<PAGE>
Greater China Growth Portfolio as of February 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Shares Value
- --------------------------------------------------------------------------------
Financial (continued)
- --------------------------------------------------------------------------------
National Mutual Ltd. 2,018,000 $ 1,798,179
Banking, finance and insurance.
- --------------------------------------------------------------------------------
$ 41,379,325
- --------------------------------------------------------------------------------
Industrial/Manufacturing -- 7.4%
- --------------------------------------------------------------------------------
Chen Hsong Holdings 4,336,000 $ 1,595,865
Manufactures and sells plastic
injection moulding machines and
related products.
CIM Company Ltd.(1) 1,800,000 1,510,945
Diversified company with
interests in property and
investment, public
transportation, trading and
hotel operations.
Shanghai Industrial Holdings Ltd. 3,090,000 13,407,891
Manufacturer of cigarettes,
pharmaceuticals and carparts.
Siu Fung Ceramics Holdings Ltd.* 9,850,000 725,060
Manufacturer of a line of
ceramics, machinery and
equipment.
Varitronix International Ltd. 1,560,000 3,273,713
Designs, manufactures and sells
liquid crystal displays and
related products.
Zhenhai Refining & Chemical Co. 4,058,000 1,480,448
Producer of petroleum and
petrochemical products
- --------------------------------------------------------------------------------
$ 21,993,922
- --------------------------------------------------------------------------------
Metals - Industrial -- 0.5%
- --------------------------------------------------------------------------------
Angang New Steel Co., Ltd. 10,000,000 $ 1,640,085
Producer of steel products
comprising cold rolled sheets,
wire rods and thick plates, in
the PRC.
- --------------------------------------------------------------------------------
$ 1,640,085
- --------------------------------------------------------------------------------
Natural Gas Utilities -- 0.9%
Hong Kong and China Gas Company, 1,446,000 $ 2,595,648
Ltd.
Is the sole supplier of piped gas
in Hong Kong.
- --------------------------------------------------------------------------------
$ 2,595,648
- --------------------------------------------------------------------------------
Properties -- 15.2%
- --------------------------------------------------------------------------------
Cheung Kong Holdings, Ltd. 2,171,000 $ 15,209,757
Property development and
construction.
Cheung Kong Infrastructure 2,525,000 7,777,007
Property development and
construction.
China Resources Beijing Land 2,164,000 1,089,895
Property development.
Hong Kong Land Holdings Ltd. 3,095,000 5,540,050
Commercial property investment,
development, leasing and
management.
New World Development 3,980,000 14,674,114
Property investment and
development.
Sino Land Company 2,720,000 1,299,671
Property development.
- --------------------------------------------------------------------------------
$ 45,590,494
- --------------------------------------------------------------------------------
REITS -- 1.2%
- --------------------------------------------------------------------------------
Chinese Estates Holdings 2,000,000 $ 684,445
Property development and
investment company in Hong
Kong.
Hysan Development Company, Ltd. 1,600,000 3,047,717
Leading real estate investment
company in Hong Kong.
- --------------------------------------------------------------------------------
$ 3,732,162
- --------------------------------------------------------------------------------
Telecommunications -- 2.2%
- --------------------------------------------------------------------------------
Hong Kong Telecom 3,084,000 $ 6,491,793
Engaged in the provisional
telecommunication services,
the sale and rental of
telecommunications equipment.
- --------------------------------------------------------------------------------
$ 6,491,793
- --------------------------------------------------------------------------------
Transportation -- 2.7%
- --------------------------------------------------------------------------------
China Merchants Holdings 7,827,000 $ 8,136,805
Flagship of China Merchants
Group and engaged in the
Industrial and Infrastructure
business.
- --------------------------------------------------------------------------------
$ 8,136,805
- --------------------------------------------------------------------------------
Utilities -- 0.4%
- --------------------------------------------------------------------------------
Harbin Power Co. 6,900,000 $ 1,051,463
The largest manufacturer of power
equipment in China, which specializes
in major components for thermal power
generating stations such as boilers
and steam turbines.
- --------------------------------------------------------------------------------
$ 1,051,463
- --------------------------------------------------------------------------------
Total Hong Kong
(identified cost $192,285,136) $ 217,796,727
- --------------------------------------------------------------------------------
See notes to financial statements
11
<PAGE>
Greater China Growth Portfolio as of February 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Shares Value
- ---------------------------------------------------------------------------
Malaysia -- 1.8%
Conglomerates -- 0.8%
- ---------------------------------------------------------------------------
United Engineers, Ltd. 2,050,000 $ 2,487,891
Is the biggest integrated civil
engineering construction and design
company in Malaysia.
- ---------------------------------------------------------------------------
$ 2,487,891
- ---------------------------------------------------------------------------
Diversified Trading -- 0.3%
- ---------------------------------------------------------------------------
Sime Darby Bhd 700,000 $ 914,286
Diversified company with interests
in plantation operation, chemical
manufacturing, heavy equipment and
auto distribution.
- ---------------------------------------------------------------------------
$ 914,286
- ---------------------------------------------------------------------------
Investment Services -- 0.7%
- ---------------------------------------------------------------------------
Malayan Banking Bhd 517,000 $ 2,011,728
- ---------------------------------------------------------------------------
Is a leading banking group in Malaysia.
- ---------------------------------------------------------------------------
$ 2,011,728
- ---------------------------------------------------------------------------
Total Malaysia
(identified cost $5,125,125) $ 5,413,905
- ---------------------------------------------------------------------------
Republic of Korea -- 0.0%
Electronics - Instruments -- 0.0%
- ---------------------------------------------------------------------------
Samsung Electronics 2 $ 116
Manufacturer of home appliances,
telecommunications products,
computers and semiconductors.
- ---------------------------------------------------------------------------
$ 116
- ---------------------------------------------------------------------------
Total Republic of Korea
(identified cost $105) $ 116
- ---------------------------------------------------------------------------
Singapore -- 3.0%
Financial -- 0.9%
- ---------------------------------------------------------------------------
Overseas Union Bank (Foreign) 700,000 $ 2,638,245
Commercial banking.
- ---------------------------------------------------------------------------
$ 2,638,245
- ---------------------------------------------------------------------------
Industrial / Manufacturing -- 1.6%
- ---------------------------------------------------------------------------
Clipsal Industries Holdings Ltd. 2,324,000 $ 4,508,560
Develops, manufactures, and markets
electric installation products.
- ---------------------------------------------------------------------------
Industrial / Manufacturing (continued)
- ---------------------------------------------------------------------------
Clipsal Industries Holdings 234,000 $ 210,600
Ltd. Warrants*
Develops, manufactures, and markets
electric installation products.
- ---------------------------------------------------------------------------
$ 4,719,160
- ---------------------------------------------------------------------------
Transportation -- 0.5%
- ---------------------------------------------------------------------------
Keppel Land Limited 1,500,000 $ 1,594,069
Shipping company.
Keppel Land Limited Warrants* 508,000 120,840
Shipping company.
- ---------------------------------------------------------------------------
$ 1,714,909
- ---------------------------------------------------------------------------
Total Singapore
(identified cost $14,605,555) $ 9,072,314
- ---------------------------------------------------------------------------
Taiwan -- 9.2%
Banks and Money Services -- 1.0%
- ---------------------------------------------------------------------------
Bank Sinopac 4,032,268 $ 3,006,902
One of the best new banks in
Taiwan listed on the OTC market.
- ---------------------------------------------------------------------------
$ 3,006,902
- ---------------------------------------------------------------------------
Business Services - Miscellaneous -- 1.0%
- ---------------------------------------------------------------------------
Far Eastern Silo and Shipping Corp. 3,392,000 $ 2,878,702
Is engaged in the cable television
business as well as shipping and
warehousing.
- ---------------------------------------------------------------------------
$ 2,878,702
- ---------------------------------------------------------------------------
Computer Equipment -- 0.5%
- ---------------------------------------------------------------------------
Asustek Computer, Inc. 65,000 $ 1,521,061
Highly profitable motherboard
producer in Taiwan supplying to Intel.
- ---------------------------------------------------------------------------
$ 1,521,061
- ---------------------------------------------------------------------------
Computers and Business Equipment -- 3.3%
- ---------------------------------------------------------------------------
Chuntex Electronic Corp. 1,375,000 $ 2,617,005
Manufactures and sells
computer monitors.
Mitac International Corp. 1,072,000 2,441,685
Is a manufacturer and distributor
of mainly PCs and notebooks. It has
a world wide network of manufacturing
and logistics centers and is exposed
to the component distribution business.
See notes to financial statements
12
<PAGE>
Greater China Growth Portfolio as of February 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Shares Value
- --------------------------------------------------------------------------------
Computers and Business Equipment (continued)
- --------------------------------------------------------------------------------
Unitech Electronics Co., Ltd. 1,110,000 $ 4,831,357
Manufactures and markets double
sided and multi-layer printed
circuit boards.
- --------------------------------------------------------------------------------
$ 9,890,047
- --------------------------------------------------------------------------------
Construction -- 1.0%
- --------------------------------------------------------------------------------
Bes Engineering Corp. 2,843,000 $ 2,927,270
Second largest contractor in Taiwan
active in public works.
- --------------------------------------------------------------------------------
$ 2,927,270
- --------------------------------------------------------------------------------
Electronics - Semiconductors -- 1.4%
- --------------------------------------------------------------------------------
Taiwan Semiconductor 800,000 $ 4,168,487
Manufacturing, Co.
Is one of the world's largest IC
foundry with a 20% global market share.
- --------------------------------------------------------------------------------
$ 4,168,487
- --------------------------------------------------------------------------------
Insurance -- 1.0%
- --------------------------------------------------------------------------------
Cathay Life Insurance 707,442 $ 3,112,303
Underwrites endowment, life, accident
and medical policies through a service
network of 22 branches, 341 operating
units and over 29,000 agents.
- --------------------------------------------------------------------------------
$ 3,112,303
- --------------------------------------------------------------------------------
Total Taiwan
(identified cost $25,965,503) $ 27,504,772
- --------------------------------------------------------------------------------
Thailand -- 3.7%
Banks and Money Services -- 0.8%
- --------------------------------------------------------------------------------
Siam Commercial Bank Public Co., Ltd. 400,000 $ 645,905
Is a leading commercial bank in
Thailand.
Thai Farmers Bank Public Co., Ltd. 604,200 1,797,965
Is a leading commercial bank in
Thailand.
- --------------------------------------------------------------------------------
$ 2,443,870
- --------------------------------------------------------------------------------
Utilities -- 2.9%
- --------------------------------------------------------------------------------
Electricity Generating (Foreign) 3,352,770 $ 8,739,631
EGCOMP was set up in 1992 for
the purpose of partly
privatizing electricity in
Thailand.
- --------------------------------------------------------------------------------
$ 8,739,631
- --------------------------------------------------------------------------------
Total Thailand
(identified cost $9,140,867) $ 11,183,501
- --------------------------------------------------------------------------------
United States -- 3.2%
Conglomerates -- 1.4%
- --------------------------------------------------------------------------------
Citic Pacific Ltd. 1,100,000 $ 4,261,639
Diversified company engaged in
infrastructure, trading, and
distribution, property and industrial
manufacturing.
- --------------------------------------------------------------------------------
$ 4,261,639
- --------------------------------------------------------------------------------
Electric Utilities -- 1.8%
- --------------------------------------------------------------------------------
AES Corp. 121,800 $ 5,359,200
Electric generating facility.
- --------------------------------------------------------------------------------
$ 5,359,200
- --------------------------------------------------------------------------------
Total United States
(identified cost $9,563,022) $ 9,620,839
- --------------------------------------------------------------------------------
Total Common Stocks
(identified cost $258,787,830) $ 281,116,047
- --------------------------------------------------------------------------------
Total Investments -- 93.9%
(identified cost $258,787,830) $ 281,116,047
- --------------------------------------------------------------------------------
Other Assets, Less Liabilities -- 6.1% $ 18,146,491
- --------------------------------------------------------------------------------
Net Assets -- 100% $ 299,262,538
- --------------------------------------------------------------------------------
* Non-income producing security.
(1) Security valued at fair value using methods determined in good faith by or
at the direction of the Trustees.
See notes to financial statements.
13
<PAGE>
Greater China Growth Portfolio as of February 28, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Top Ten Holdings
<TABLE>
<CAPTION>
Percentage
Industry of Net
Company Sector Assets Value
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
HSBC Holdings PLC Financial 10.25% $30,689,172
Hutchison Whampoa Diversified Trading 6.85 20,504,294
Cheung Kong Holdings, Ltd. Properties 5.08 15,209,757
New World Development Properties 4.90 14,674,114
Shanghai Industrial Holdings Ltd. Industrial/Manufacturing 4.48 13,407,891
China Telecom* Communications Services 3.39 10,142,636
Hang Seng Bank Financial 2.97 8,891,974
Electricity Generating (Foreign) Utilities 2.92 8,739,631
China Resources Enterprises Diversified Trading 2.80 8,376,341
China Merchants Holdings Transportation 2.72 8,136,805
</TABLE>
Top Ten Industry Sectors
Percentage
of Net
Industry Sector Assets Value
- --------------------------------------------------------------------
Diversified Trading 19.60% $58,649,803
Properties 15.23 45,590,494
Financial 14.71 44,017,570
Industrial/Manufacturing 9.06 27,110,393
Electric Utilities 5.16 15,441,644
Communications Services 3.39 10,142,636
Computers and Business Equipment 3.30 9,890,047
Transportation 3.29 9,851,714
Utilities 3.27 9,791,094
Conglomerates 2.26 6,749,530
* Non-income producing security.
See notes to financial statements
14
<PAGE>
Greater China Growth Portfolio as of February 28, 1998
FINANCIAL STATEMENTS (Unaudited)
Statement of Assets and Liabilities
As of February 28, 1998
Assets
- --------------------------------------------------------------------------------
Investments, at value (Note 1A)
(identified cost, $258,787,830) $ 281,116,047
Cash 13,017,205
Foreign currency, at value
(identified cost, $8,114,006) 8,531,027
Receivable for investments sold 889,413
Interest and dividends receivable 123,201
- --------------------------------------------------------------------------------
Total assets $ 303,676,893
- --------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------
Payable for investments purchased $ 3,871,222
Foreign capital gains tax payable 520,365
Payable to affiliate for Trustees' fees (Note 2) 920
Accrued expenses 21,848
- --------------------------------------------------------------------------------
Total liabilities $ 4,414,355
- --------------------------------------------------------------------------------
Net Assets applicable to investors' interest in Portfolio $ 299,262,538
- --------------------------------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------------------------------
Net proceeds from capital contributions and withdrawals $ 276,517,305
Net unrealized appreciation of investments
(computed on the basis of identified cost) 22,745,233
- --------------------------------------------------------------------------------
Total $ 299,262,538
- --------------------------------------------------------------------------------
Statement of Operations
For the Six Months Ended
February 28, 1998
Investment Income (Note 11)
- --------------------------------------------------------------------------------
Dividends (net of foreign taxes, $38,246) $ 2,199,324
Interest income 89,794
- --------------------------------------------------------------------------------
Total income $ 2,289,118
- --------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------
Investment adviser fee (Note 2) $ 1,286,023
Administration fee (Note 2) 426,089
Compensation of Trustees not members of the
Administrator's organization (Note 2) 920
Custodian fee (Note 1D) 231,222
Legal and accounting services 22,885
Amortization of organization expenses (Note 1C) 5,877
Miscellaneous 20,893
- --------------------------------------------------------------------------------
Total expenses $ 1,993,909
- --------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee (Note 1D) $ 163,589
- --------------------------------------------------------------------------------
Total expense reductions $ 163,589
- --------------------------------------------------------------------------------
Net expenses $ 1,830,320
- --------------------------------------------------------------------------------
Net investment income $ 458,798
- --------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) on Investments
- --------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ (4,716,322)
Foreign currency transactions (1,653,226)
- --------------------------------------------------------------------------------
Net realized loss on investment transactions $ (6,369,548)
- --------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $(157,541,733)
Foreign currency 436,561
- --------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) of investments $(157,105,172)
- --------------------------------------------------------------------------------
Net realized and unrealized loss on investments $(163,474,720)
- --------------------------------------------------------------------------------
Net decrease in net assets from operations $(163,015,922)
- --------------------------------------------------------------------------------
See notes to financial statements
15
<PAGE>
Greater China Growth Portfolio as of February 28, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
Six Months Ended
Increase (Decrease) February 28, 1998 Year Ended
in Net Assets (Unaudited) August 31, 1997
- ---------------------------------------------------------------------------
From operations --
Net investment income $ 458,798 $ 3,730,525
Net realized gain (loss)
on investment transactions (6,369,548) 33,933,253
Net change in unrealized
appreciation (depreciation)
of investments (157,105,172) 106,260,389
- ---------------------------------------------------------------------------
Net increase (decrease) in
net assets from operations $(163,015,922) $ 143,924,167
- ---------------------------------------------------------------------------
Capital transactions --
Contributions $ 87,917,625 $ 259,385,555
Withdrawals (163,421,043) (375,825,403)
- ---------------------------------------------------------------------------
Net decrease in net assets
from capital transactions $ (75,503,418) $(116,439,848)
- ---------------------------------------------------------------------------
Net increase (decrease) in
net assets $(238,519,340) $ 27,484,319
- ---------------------------------------------------------------------------
Net Assets
- ---------------------------------------------------------------------------
At beginning of period $ 537,781,878 $ 510,297,559
- ---------------------------------------------------------------------------
At end of period $ 299,262,538 $ 537,781,878
- ---------------------------------------------------------------------------
See notes to financial statements
16
<PAGE>
Greater China Growth Portfolio as of February 28, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Six Months Ended
February 28, 1998 Year Ended August 31,
------------------------------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993*
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses (1) 1.17%+ 1.19% 1.19% 1.10% 1.15% 1.38%+
Expenses after custodian fee reduction 1.08%+ 1.16% 1.12% -- -- --
Net investment income 0.27%+ 0.72% 0.94% 1.35% 0.73% 0.38%+
Portfolio Turnover 26% 48% 42% 32% 36% 18%
- ------------------------------------------------------------------------------------------------------------------------------------
Average commission rate (per share) (2) $ 0.0024 $ 0.0412 $ 0.0070 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $299,263 $537,782 $510,298 $590,417 $732,613 $208,043
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, October 28, 1992, to August 31,
1993.
(1) The expense ratios for the year ended August 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Portfolio to increase its expense ratio by
the effect of any expense offset arrangements with its service providers.
The expense ratios for each of the prior periods have not been adjusted to
reflect this change.
(2) 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. For fiscal years beginning on or after September 1, 1995, a Fund is
required to disclose its average commission rate per share for security
trades on which commissions were charged.
See notes to financial statements
17
<PAGE>
Greater China Growth Portfolio as of February 28, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1 Significant Accounting Policies
----------------------------------------------------------------------------
Greater China 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
September 1, 1992. 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 individually 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 Portfolio's understanding of the applicable countries' tax rules
and rates.
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 Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian to the Portfolio. Pursuant to the custodian agreement, IBT
receives a fee reduced by credits which are determined based on the average
daily cash balance the Portfolio maintains with IBT. All significant credit
balances used to reduce the Portfolio's custodian fees are reflected as a
reduction of operating expense in the Statement of Operations.
E Financial 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 the 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. If the Portfolio enters into a closing
transaction, the Portfolio will realize, for book purposes, a gain or loss
equal to the difference between the value of the financial futures contract
to sell and financial futures contract to buy.
F Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expense during the reporting period. Actual results could
differ from those estimates.
See notes to financial statements
18
<PAGE>
Greater China Growth Portfolio as of February 28, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
G 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.
H 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.
I Other -- Investment transactions are accounted for on a trade date basis.
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 Interim Financial Information -- The interim financial statements relating
to February 28, 1998 and for the six-month period then ended have not been
audited by independent certified public accountants, but in the opinion of
the Portfolio's management, reflect all adjustments, consisting only of
normal recurring adjustments necessary for the fair presentation of the
financial statements.
2 Investment Adviser Fee and Other Transactions with Affiliates
----------------------------------------------------------------------------
The investment adviser fee is earned by Lloyd George Management (Bermuda)
Limited (the Adviser), an affiliate of Eaton Vance, as compensation for
management and investment advisory services rendered to the Portfolio. Under
the advisory agreement, the Adviser receives a monthly fee 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 six months ended February 28, 1998 the adviser fee was equivalent to
0.75% of average daily net assets. In addition, an administrative fee is
earned by Eaton Vance Management (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% (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 six months ended
February 28, 1998, the administrative fee was 0.25% of average daily net
assets. Except as to Trustees of the Portfolio who are not members of the
Adviser or EVM's organization, officers and Trustees receive remuneration
for their services to the Portfolio out of such investment adviser and
administrative fees. 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 $81,848,584 and $170,156,489, respectively.
4 Federal Income Tax Basis of Investments
----------------------------------------------------------------------------
The cost and unrealized appreciation/depreciation in value of the
investments owned at February 28, 1998, as computed on a federal income tax
basis, were as follows:
Aggregate cost $ 258,787,830
---------------------------------------------------------------------------
Gross unrealized appreciation $ 53,192,452
Gross unrealized depreciation (30,864,235)
---------------------------------------------------------------------------
Net unrealized appreciation $ 22,328,217
---------------------------------------------------------------------------
19
<PAGE>
Greater China Growth Portfolio as of February 28, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
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
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. There were
no obligations under these financial instruments at February 28, 1998.
7 Line of Credit
----------------------------------------------------------------------------
The Portfolio participates with other portfolios and funds managed by BMR
and EVM and its affiliates in a committed $100 million unsecured line of
credit agreement with a group of banks. The Portfolio may temporarily borrow
from the line of credit to satisfy redemption requests or settle investment
transactions. Interest is charged to each participating portfolio or fund
based on its borrowings at an amount above the Eurodollar rate or federal
funds rate. In addition, a fee computed at an annual rate of 0.10% on the
daily unused portion of the line of credit is allocated among the
participating portfolios and funds at the end of each quarter. The Portfolio
did not have any significant borrowings or allocated fees during the six
months ended February 28, 1998.
20
<PAGE>
Eaton Vance Greater China Growth Fund as of February 28, 1998
INVESTMENT MANAGEMENT
<TABLE>
<CAPTION>
Eaton Vance Greater China Growth Fund
Officers Independent Trustees
<S> <C>
James B. Hawkes Donald R. Dwight
President and Trustee President, Dwight Partners, Inc.
M. Dozier Gardner Samuel L. Hayes, III
Vice President Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate School of
William D. Burt Business Administration
Vice President
Norton H. Reamer
Barclay Tittmann President and Director, United Asset
Vice President Management Corporation
James L. O'Connor John L. Thorndike
Treasurer Formerly Director, Fiduciary Company Incorporated
Alan R. Dynner Jack L. Treynor
Secretary Investment Adviser and Consultant
<CAPTION>
Greater China Growth Portfolio
Officers Independent Trustees
<S> <C>
Hon. Robert Lloyd George Hon. Edward K.Y. Chen
President, Trustee and Professor and Director, Center for Asian Studies,
Co-Portfolio Manager University of Hong Kong
James B. Hawkes Donald R. Dwight
Vice President and Trustee President, Dwight Partners, Inc.
Scobie Dickinson Ward Samuel L. Hayes, III
Vice President, Assistant Jacob H. Schiff Professor of Investment Banking,
Secretary, Assistant Harvard University Graduate School of
Treasurer,and Co-Portfolio Business Administration
Manager
Norton H. Reamer
William Walter Raleigh Kerr President and Director, United Asset
Vice President and Management Corporation
Assistant Treasurer
James L. O'Connor
Vice President and Treasurer
Alan R. Dynner
Secretary
</TABLE>
21
<PAGE>
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<PAGE>
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<PAGE>
Sponsor and Manager of
Eaton Vance Greater China Growth Fund &
Administrator of Greater China Growth Portfolio
Eaton Vance Management
24 Federal Street
Boston, MA 02110
Adviser of Greater China Growth Portfolio
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
(617) 482-8260
Custodian
Investors Bank & Trust Company
200 Clarendon Street, 16th Floor
Boston, MA 02116
Transfer Agent
First Data Investor Services Group
Attn: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
(800) 262-1122
Eaton Vance Greater China Growth Fund
24 Federal Street
Boston, MA 02110
- --------------------------------------------------------------------------------
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its sales charges
and expenses. Please read the prospectus carefully before you invest or
send money.
- --------------------------------------------------------------------------------
GCSRC-4/98
