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Annual Report August 31, 2000
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EATON VANCE
INFORMATION
AGE
FUND
[LOGO]
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Eaton Vance Information Age Fund as of August 31, 2000
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LETTER TO SHAREHOLDERS
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[PHOTO OF JAMES B. HAWKES]
James B. Hawkes
President
Eaton Vance Information Age Fund, Class A shares, had a total return of 43.12%
during the year ended August 31, 2000. That return was the result of an increase
in net asset value per share (NAV) from $17.34 on August 31, 1999 to $21.84 on
August 31, 2000, and the reinvestment of $2.226 per share in capital gains
distributions.(1)
Class B shares had a total return of 42.58% for the same period, the result of
an increase in NAV from $17.77 to $22.38, and the reinvestment of $2.226 per
share in capital gains distributions.(1)
Class C shares had a total return of 42.42% for the same period, the result of
an increase in NAV from $17.28 to $21.61, and the reinvestment of $2.226 per
share in capital gains distributions.(1)
By comparison, the Morgan Stanley Capital International World Index - a
broad-based index composed of global common stocks - had a return of 13.12%
during the same period. The average return of funds in the Global Equity
Classification was 24.41%, according to Lipper Inc., a nationally recognized
monitor of U.S. mutual fund performance.(2)
Eaton Vance Information Age Fund performed extremely well against a backdrop of
turbulent market conditions worldwide. In fact, Standard &Poor's recently
honored Eaton Vance Information Age Fund with its Select Fund designation in the
Global Fund category, making it the fifth Eaton Vance fund within four separate
categories to receive such an honor.* Congratulations to all the investment
professionals who made this award possible.
A key part of the Fund's success to date has been its multifaceted
diversification. The Portfolio is not over-invested in any one stock, industry,
geographic region, or market capitalization. We would urge investors, especially
as market gains and declines become ever more precipitous, to diversify their
own portfolios as well. A long-term investment horizon and a well-balanced asset
allocation can be investors' best weapons against market volatility.
On the pages that follow, Co-Portfolio Managers Duncan Richardson and Jacob
Rees-Mogg discuss the Portfolio's unique approach and its performance over the
past 12 months.
Sincerely,
/s/ James B. Hawkes
James B. Hawkes
President
October 16, 2000
*Eaton Vance Information Age Fund was chosen by Standard & Poor's as one of
its Select Funds in a report dated 9/21/00. To be an S&P Select Fund, a fund
must not only have superior performance, it must have superior management as
well. Designation is based on the six-month moving average of three years of
absolute and volatility-adjusted performance data, relative to 240 Global
Equity Funds as of 7/31/00. Select Funds must also demonstrate an appropriate
level of management skill and experience, consistency of investment process,
and depth of organization. Select Fund evaluations are not a recommendation
to buy, sell, or hold and are based on information available to Standard &
Poor's and may change at any time. Standard & Poor's does not guarantee the
accuracy, adequacy, or completeness of this information and is not
responsible for any error or omission in, or for results obtained from, the
use of such information.
--------------------------------------------------------------------------------
Fund Information
as of August 31, 2000
<TABLE>
<CAPTION>
Performance(3) Class A Class B Class C
------------------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
------------------------------------------------------------------------------------------
<S> <C> <C> <C>
One Year 43.12% 42.58% 42.42%
Life of Fund+ 25.10 24.76 24.65
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
------------------------------------------------------------------------------------------
One Year 34.87% 37.58% 41.42%
Life of Fund+ 23.62 24.60 24.65
</TABLE>
+Inception Dates - Class A: 9/18/95; Class B: 9/18/95; Class C: 11/22/95
<TABLE>
<CAPTION>
Ten Largest Holdings(4)
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<S> <C>
TV Francaise 1.9%
Pearson PLC 1.9
McGraw-Hill Cos., Inc. (The) 1.9
Endemol Entertainment 1.8
Lexmark International Group, Inc. 1.8
Nippon Telegraph and Telephone Corp. 1.8
International Business Machines Corp. 1.8
British Telecommunications PLC 1.8
Nippon Broadcasting System 1.7
United Technologies Corp. 1.7
</TABLE>
(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 Class B and Class C shares.(2) It is not possible to invest directly in
an Index or Lipper average.(3) Returns are historical and are calculated by
determining the percentage change in net asset value with all distributions
reinvested. SEC returns for Class A reflect the maximum 5.75% sales charge.
SEC returns for Class B 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. SEC 1-Year return for Class C reflects 1% CDSC.(4) Ten
largest holdings accounted for 18.1% of the Portfolio's net assets.
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.
--------------------------------------------------------------------------------
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.
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2
<PAGE>
Eaton Vance Information Age Fund as of August 31, 2000
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MANAGEMENT DISCUSSION
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AN INTERVIEW WITH
DUNCAN RICHARDSON AND
HON. JACOB REES-MOGG,
CO-PORTFOLIO MANAGERS OF
INFORMATION AGE PORTFOLIO
[PHOTO OF DUNCAN RICHARDSON]
Duncan Richardson
Co-Portfolio Manager
[PHOTO OF HON. JACOB REES-MOGG]
Hon. Jacob Rees-Mogg
Co-Portfolio Manager
Q: The Fund has had another year of excellent returns. As co-managers of the
Fund, how would you summarize its success to date?
A: MR. RICHARDSON: This year marks the fifth anniversary of the Fund. What
made us successful this year is no different from what has marked the
Portfolio's returns since inception: that is, the structure of the
Portfolio and our investment discipline. Five years ago, we set up a Fund
that could capture two "mega-trends" that we thought would persist for
several decades. We believed the tremendous advances in technology and
worldwide deregulation would all result in increased demand for
technological products and information services. We wanted it to be a
broad-based, diversified product, a long-term growth vehicle for investors
to take advantage of these global opportunities. We structured the
Portfolio so that it is diversified along geographic, industry, and
market-capitalization lines. The Fund's unique structure has helped provide
a buffer against much of the volatility we've seen in technology and other
sectors.
MR. REES-MOGG: The second element, as Duncan mentioned, is the investment
discipline used in selecting stocks for the Portfolio. We both believe in
the guiding principle of "no unnecessary risk," and we both have a
fundamentals-driven approach to stock picking. That is to say, our teams of
investment professionals, based both in Boston and in London, travel around
the world seeking what we believe are the best growth companies of the
Information Age. By "best" we mean best-quality business plan, management,
fundamentals and, not to be forgotten, price. It appears as though the
markets were beginning to pay more attention to price and valuations in the
past few months, unlike the last quarter of 1999, which saw a lot of
frenzied buying of low-quality, high-priced stocks.
Q: How did the Fund fare during the market fluctuations of the past year?
A: MR. RICHARDSON: We had a great calendar year 1999 and early 2000, as both
the technology and telecom sectors soared. Then, despite having trimmed our
exposure to many technology and telecom firms, our fortunes reversed
somewhat as these sectors corrected dramatically. However, I would say that
our reversal was rather mild, compared to the reversals suffered by more
narrowly focused sector funds, because of our broadly diversified
structure. Certainly, we did see some pull-back in performance during this
period. Our valuation discipline tended to smooth out some of the
volatility of the market, but due to our investments in higher-growth
stocks, some volatility is unavoidable.
MR. REES-MOGG: The international half of the Portfolio had a rough go of
it-in fact, most international funds were down for the year, particularly
in Europe and Japan. We have, over the course of the past year, pulled
back from some of our telecommunications holdings, but to the extent that
you had any telecom exposure worldwide this year, that hurt performance.
On the whole, however, because markets tend to move in cycles, investors
generally can benefit from international diversification. This was
Geographic Distribution+
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As a percentage of total investments
[CHART]
Other 2.5%
Japan 14.6%
United Kingdom 8.5%
United States 61.3%
Other Asia 5.3%
Other Europe 7.8%
+Portfolio distribution subject to change due to active management.
3
<PAGE>
Eaton Vance Information Age Fund as of August 31, 2000
--------------------------------------------------------------------------------
MANAGEMENT DISCUSSION
--------------------------------------------------------------------------------
certainly the case in the prior fiscal year, and we expect continued
benefits from international diversification going forward.
Q: What more can you tell us about the telecom holdings of the Portfolio?
A: MR. RICHARDSON: We've been adding to telecom names very selectively. The
current weighting is roughly 10% of the Portfolio, down from a high of over
30%. We don't think the shake-out is over in that area. In the past five
years, there has been a tremendous funding by the capital markets of
telecom companies worldwide, resulting in increased competition. We believe
there will be ongoing consolidation in this industry, but as the recent
resistance to the Sprint and Worldcom merger shows, the trend towards
deregulation has been put on hold.
MR. REES-MOGG: We have seen literally scores of interest rate increases
around the world, and a lot of evidence of economic slowing. This is a
desirable economic scenario, so that inflation does not get out of hand.
However, because a big part of economic growth has been tech and telecom
spending, we're concerned about the actual company fundamentals meeting the
high expectations of investors as growth slows. It could be a very
tumultuous time, one in which investors would want to stay in a flexible
investment vehicle that has both the structure and the discipline to
navigate changes in the global markets. Overall, we're expecting that we
can use the opportunities in this challenging area to selectively increase
our weighting in telecom.
Q: Jacob, in which industries is the Portfolio more confident?
A: MR. REES-MOGG: The media sector has always been a big area for us, one
which is perhaps being emphasized more now because of our caution in tech
and telecom. We leaned towards the broadcasting and cable industry, which
was a big driver of the Portfolio for years. Although we had sold some
holdings in that area, the stocks have since corrected quite
substantially, so we've been able to reinitiate some positions, both in
the U.S. and internationally. Duncan and I both have found compelling
companies that we think can exploit some of the new media opportunities
while continuing to maintain their old-line media businesses. We've also
had a pretty good weighting in publishing (about 10% of the Portfolio),
another area that benefits from the Information Age - an older,
established area that's not terribly exciting in terms of growth, but that
has opportunity to accelerate growth and improve profitability by using
the new media.
Q: We've talked about how the Portfolio has been structured to reduce the
impact of market volatility. How successful has this strategy been?
A: MR. RICHARDSON: It's very easy to measure the absolute or relative returns
of a fund; it's harder to measure the risk taken to get those returns. One
way to do that is to use the Sharpe ratio, a measure of historical
risk-adjusted return developed by Nobel Laureate William Sharpe. It
calculates the excess rate of return above a 90-day T-bill, which is a safe
alternative, then measures the volatility of the excess versus the
volatility of the T-bill return.
Jacob and I both believe that an important part of our job is to manage the
risk of investing in higher-growth industries and companies. We were
pleased that the Portfolio
Five Largest Industry Positions+
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As a percentage of total net assets
[GRAPH]
Broadcasting and Cable 11.1%
Publishing 10.0%
Communications Services 9.7%
Electrical and Electronics 7.9%
Computers and Business Equipment 6.4%
+Portfolio positions subject to change due to active management.
4
<PAGE>
Eaton Vance Information Age Fund as of August 31, 2000
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MANAGEMENT DISCUSSION
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maintains one of the highest Sharpe ratios in our peer group.
Q: Any final words for the Fund's shareholders?
A: MR. RICHARDSON: We are quite proud of the Fund's performance record. Last
year, Class A shares returned almost 55% and this year 43% -- those are
great fiscal year reports, and returns of that magnitude are not expected
going forward. This Portfolio should be viewed as a longer-term investment
vehicle that can capture the longer-term trends, not as a trading vehicle.
We believe that the trends we've seen in Information Age technologies are
going to be in place for a while, and we are committed to providing the
level of research necessary to stay on top of these trends. We believe that
research will be even more important to investors going forward.
As we've said in past reports, we can expect continued market volatility in
the future, since valuations in some sectors remain a concern and
aggressive, "momentum-style" trading still dominates high-growth investing.
In the past five years, we were generally able to navigate periods of
stress in the markets (such as the Asian crisis in 1997, the Long Term
Capital debacle in 1998, and Y2K jitters in 1999) without giving investors
too volatile a ride. I attribute our high absolute and risk-adjusted
returns in large part to our research teams, but also to the flexible
structure of the Portfolio.
We both thank our fellow shareholders who have entrusted us with their
funds over the past five years, and we look forward to productively
investing in global growth opportunities together into the next millennium.
<TABLE>
<CAPTION>
Comparison of Change in Value of a $10,000 Investment in Eaton Vance Information
Age Fund, Class A vs. the Morgan Stanley Capital International World Index*
September 30, 1995 - August 31, 2000
Date MSCI Index EATON VANCE INFORMATION FUND, INCLUDING
AGE FUND, CLASS A MAXIMUM SALES CHARGE
<S> <C> <C> <C>
9/30/95 $10,000 $10,000 $10,000
10/31/95 $9,840 $10,138 $9,554
11/30/95 $10,180 $10,236 $9,647
12/31/95 $10,475 $10,296 $9,703
1/31/96 $10,663 $10,335 $9,740
2/29/96 $10,725 $10,562 $9,954
3/31/96 $10,902 $10,581 $9,972
4/30/96 $11,156 $11,143 $10,501
5/31/96 $11,163 $11,360 $10,706
6/30/96 $11,217 $11,192 $10,548
7/31/96 $10,819 $10,502 $9,898
8/31/96 $10,941 $10,897 $10,269
9/30/96 $11,367 $11,547 $10,882
10/31/96 $11,444 $11,320 $10,669
11/30/96 $12,083 $11,842 $11,161
12/31/96 $11,887 $11,715 $11,041
1/31/97 $12,028 $11,923 $11,236
2/28/97 $12,165 $11,932 $11,246
3/31/97 $11,922 $11,518 $10,855
4/30/97 $12,309 $11,617 $10,948
5/31/97 $13,067 $12,564 $11,840
6/30/97 $13,716 $13,027 $12,277
7/31/97 $14,345 $13,648 $12,863
8/31/97 $13,384 $13,186 $12,427
9/30/97 $14,108 $13,869 $13,071
10/31/97 $13,364 $13,142 $12,386
11/30/97 $13,598 $13,484 $12,708
12/31/97 $13,761 $13,734 $12,943
1/31/98 $14,142 $13,895 $13,095
2/28/98 $15,097 $15,070 $14,203
3/31/98 $15,732 $15,923 $15,006
4/30/98 $15,883 $15,969 $15,050
5/31/98 $15,682 $15,716 $14,811
6/30/98 $16,052 $16,015 $15,093
7/31/98 $16,024 $15,865 $14,952
8/31/98 $13,884 $13,492 $12,715
9/30/98 $14,128 $14,091 $13,280
10/31/98 $15,402 $14,437 $13,606
11/30/98 $16,316 $15,324 $14,442
12/31/98 $17,110 $16,782 $15,816
1/31/99 $17,483 $17,831 $16,804
2/28/99 $17,015 $17,156 $16,168
3/31/99 $17,721 $17,976 $16,941
4/30/99 $18,417 $19,085 $17,986
5/31/99 $17,742 $18,795 $17,713
6/30/99 $18,567 $20,736 $19,543
7/31/99 $18,508 $21,375 $20,145
8/31/99 $18,473 $20,893 $19,690
9/30/99 $18,291 $21,496 $20,259
10/31/99 $19,240 $22,936 $21,616
11/30/99 $19,778 $26,209 $24,700
12/31/99 $21,377 $30,700 $28,932
1/31/00 $20,150 $30,330 $28,584
2/29/00 $20,202 $33,453 $31,527
3/31/00 $21,596 $33,700 $31,760
4/30/00 $20,680 $30,796 $29,023
5/31/00 $20,154 $29,371 $27,680
6/30/00 $20,831 $30,549 $28,790
7/31/00 $20,242 $28,494 $26,854
8/31/00 $20,898 $29,919 $28,197
</TABLE>
<TABLE>
<CAPTION>
Comparison of Change in Value of a $10,000 Investment in Eaton Vance Information
Age Fund, Class B vs. the Morgan Stanley Capital International World Index*
September 30, 1995 - August 31, 2000
Date MSCI Index EATON VANCE INFORMATION
AGE FUND, CLASS B
<S> <C> <C>
9/30/95 $10,000 $10,000
10/31/95 $9,840 $10,128
11/30/95 $10,180 $10,226
12/31/95 $10,475 $10,285
1/31/96 $10,663 $10,315
2/29/96 $10,725 $10,541
3/31/96 $10,902 $10,571
4/30/96 $11,156 $11,112
5/31/96 $11,163 $11,329
6/30/96 $11,217 $11,161
7/31/96 $10,819 $10,482
8/31/96 $10,941 $10,866
9/30/96 $11,367 $11,516
10/31/96 $11,444 $11,289
11/30/96 $12,083 $11,811
12/31/96 $11,887 $11,685
1/31/97 $12,028 $11,892
2/28/97 $12,165 $11,902
3/31/97 $11,922 $11,478
4/30/97 $12,309 $11,567
5/31/97 $13,067 $12,513
6/30/97 $13,716 $12,966
7/31/97 $14,345 $13,587
8/31/97 $13,384 $13,126
9/30/97 $14,108 $13,808
10/31/97 $13,364 $13,083
11/30/97 $13,598 $13,414
12/31/97 $13,761 $13,655
1/31/98 $14,142 $13,811
2/28/98 $15,097 $14,992
3/31/98 $15,732 $15,827
4/30/98 $15,883 $15,872
5/31/98 $15,682 $15,627
6/30/98 $16,052 $15,916
7/31/98 $16,024 $15,760
8/31/98 $13,884 $13,399
9/30/98 $14,128 $13,989
10/31/98 $15,402 $14,323
11/30/98 $16,316 $15,203
12/31/98 $17,110 $16,647
1/31/99 $17,483 $17,683
2/28/99 $17,015 $17,008
3/31/99 $17,721 $17,822
4/30/99 $18,417 $18,905
5/31/99 $17,742 $18,614
6/30/99 $18,567 $20,535
7/31/99 $18,508 $21,152
8/31/99 $18,473 $20,675
9/30/99 $18,291 $21,257
10/31/99 $19,240 $22,671
11/30/99 $19,778 $25,963
12/31/99 $21,377 $30,389
1/31/00 $20,150 $30,007
2/29/00 $20,202 $33,104
3/31/00 $21,596 $33,315
4/30/00 $20,680 $30,429
5/31/00 $20,154 $29,005
6/30/00 $20,831 $30,165
7/31/00 $20,242 $28,122
8/31/00 $20,898 $29,493
$29,293**
</TABLE>
** This figure represents the performance of the Fund's Class B shares,
including the applicable CDSC.
<TABLE>
<CAPTION>
Performance+ Class A Class B Class C
Average Annual Total Returns (at net asset value)
------------------------------------------------------------------------------------------
<S> <C> <C> <C>
One Year 43.12% 42.58% 42.42%
Life of Fund++ 25.10 24.76 24.65
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
------------------------------------------------------------------------------------------
One Year 34.87% 37.58% 41.42%
Life of Fund++ 23.62 24.60 24.65
</TABLE>
++Inception Dates - Class A: 9/18/95; Class B: 9/18/95; Class C: 11/22/95
* Source: TowersData Systems, Bethesda, MD. Investment operations commenced
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.
The chart compares the total return of the Fund's Class A and B shares with
that of a broad-based securities market index. Returns are calculated by
determining the percentage change in net asset value with all distributions
reinvested. The lines on the chart represent the total returns of $10,000
hypothetical investments in the Fund and the Morgan Stanley Capital
International (MSCI) World Index - a broad-based index of global common
stocks. An investment in the Fund's Class C shares on 11/30/95 at net asset
value would have grown to $28,672 on August 31, 2000. The Index's total
returns do not reflect any commissions or expenses that would have been
incurred if an investor individually purchased or sold the securities
represented in them. It is not possible to invest directly in an Index.
+ Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. SEC returns
for Class A reflect the maximum 5.75% sales charge. SEC returns for Class B
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. SEC
1-Year return for Class C reflects 1% CDSC.
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.
5
<PAGE>
EATON VANCE INFORMATION AGE FUND AS OF AUGUST 31, 2000
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF AUGUST 31, 2000
<S> <C>
Assets
------------------------------------------------------
Investment in Information Age Portfolio,
at value
(identified cost, $221,305,221) $256,275,812
Receivable for Fund shares sold 2,183,079
Receivable from affiliate for
reimbursement of expenses 61,194
Tax reclaim receivable 1,511
Deferred organization expenses 2,889
------------------------------------------------------
TOTAL ASSETS $258,524,485
------------------------------------------------------
Liabilities
------------------------------------------------------
Payable for Fund shares redeemed $ 467,731
Payable to affiliate for service fees 35,129
Payable to affiliate for Trustees' fees 607
Accrued expenses 96,896
------------------------------------------------------
TOTAL LIABILITIES $ 600,363
------------------------------------------------------
NET ASSETS $257,924,122
------------------------------------------------------
Sources of Net Assets
------------------------------------------------------
Paid-in capital $209,331,980
Accumulated undistributed net realized
gain from Portfolio (computed on the
basis of identified cost) 13,621,551
Net unrealized appreciation from
Portfolio (computed on the basis of
identified cost) 34,970,591
------------------------------------------------------
TOTAL $257,924,122
------------------------------------------------------
Class A Shares
------------------------------------------------------
NET ASSETS $ 68,207,680
SHARES OUTSTANDING 3,122,998
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 21.84
MAXIMUM OFFERING PRICE PER SHARE
(100 DIVIDED BY 94.25 of $21.84) $ 23.17
------------------------------------------------------
Class B Shares
------------------------------------------------------
NET ASSETS $148,603,468
SHARES OUTSTANDING 6,640,078
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE
PER SHARE (NOTE 6)
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 22.38
------------------------------------------------------
Class C Shares
------------------------------------------------------
NET ASSETS $ 41,112,974
SHARES OUTSTANDING 1,902,799
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE
PER SHARE (NOTE 6)
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 21.61
------------------------------------------------------
</TABLE>
On sales of $50,000 or more, the offering price of Class A shares is reduced.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
AUGUST 31, 2000
<S> <C>
Investment Income
-----------------------------------------------------
Interest allocated from Portfolio $ 998,860
Dividends allocated from Portfolio (net
of foreign taxes, $58,032) 882,828
Expenses allocated from Portfolio (2,111,936)
-----------------------------------------------------
NET INVESTMENT LOSS FROM PORTFOLIO $ (230,248)
-----------------------------------------------------
Expenses
-----------------------------------------------------
Management fee $ 467,877
Trustees fees and expenses 3,059
Distribution and service fees
Class A 239,232
Class B 1,106,271
Class C 256,775
Transfer and dividend disbursing agent
fees 256,912
Registration fees 53,184
Custodian fee 28,641
Printing and postage 27,750
Amortization of organization expenses 25,747
Legal and accounting services 24,816
Miscellaneous 27,923
-----------------------------------------------------
TOTAL EXPENSES $ 2,518,187
-----------------------------------------------------
Deduct --
Reimbursement of Class A distribution
and service fees $ (61,194)
-----------------------------------------------------
TOTAL EXPENSE REDUCTIONS $ (61,194)
-----------------------------------------------------
NET EXPENSES $ 2,456,993
-----------------------------------------------------
NET INVESTMENT LOSS $(2,687,241)
-----------------------------------------------------
Realized and Unrealized Gain (Loss) from Portfolio
-----------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $18,878,683
Foreign currency and forward foreign
currency exchange
contract transactions (277,962)
-----------------------------------------------------
NET REALIZED GAIN $18,600,721
-----------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $17,503,031
Foreign currency and forward foreign
currency exchange contracts 7,797
-----------------------------------------------------
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) $17,510,828
-----------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $36,111,549
-----------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $33,424,308
-----------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
EATON VANCE INFORMATION AGE FUND AS OF AUGUST 31, 2000
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INCREASE (DECREASE) YEAR ENDED YEAR ENDED
IN NET ASSETS AUGUST 31, 2000 AUGUST 31, 1999
<S> <C> <C>
--------------------------------------------------------------------------
From operations --
Net investment loss $ (2,687,241) $ (1,036,898)
Net realized gain 18,600,721 9,797,399
Net change in unrealized
appreciation (depreciation) 17,510,828 15,401,374
--------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 33,424,308 $ 24,161,875
--------------------------------------------------------------------------
Distributions to shareholders --
From net realized gain
Class A $ (2,967,886) $ (623,957)
Class B (6,969,402) (1,503,429)
Class C (1,014,923) (131,635)
--------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (10,952,211) $ (2,259,021)
--------------------------------------------------------------------------
Transactions in shares of beneficial interest --
Proceeds from sale of shares
Class A $ 53,665,996 $ 8,076,961
Class B 93,465,887 10,983,681
Class C 36,255,216 3,329,088
Net asset value of shares issued to
shareholders in payment of
distributions declared
Class A 2,796,340 585,157
Class B 6,441,534 1,385,737
Class C 979,827 126,075
Cost of shares redeemed
Class A (15,495,226) (5,987,469)
Class B (15,844,810) (7,349,983)
Class C (3,801,210) (1,187,646)
--------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM FUND
SHARE TRANSACTIONS $ 158,463,554 $ 9,961,601
--------------------------------------------------------------------------
NET INCREASE IN NET ASSETS $ 180,935,651 $ 31,864,455
--------------------------------------------------------------------------
Net Assets
--------------------------------------------------------------------------
At beginning of year $ 76,988,471 $ 45,124,016
--------------------------------------------------------------------------
AT END OF YEAR $ 257,924,122 $ 76,988,471
--------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
EATON VANCE INFORMATION AGE FUND AS OF AUGUST 31, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
--------------------------------------
YEAR ENDED AUGUST 31,
--------------------------------------
2000(1) 1999(1) 1998
<S> <C> <C> <C>
------------------------------------------------------------------------
Net asset value -- Beginning
of year $17.340 $11.710 $11.970
------------------------------------------------------------------------
Income (loss) from operations
------------------------------------------------------------------------
Net investment loss $(0.213) $(0.217) $(0.156)
Net realized and unrealized
gain 6.939 6.469 0.431
------------------------------------------------------------------------
TOTAL INCOME FROM OPERATIONS $ 6.726 $ 6.252 $ 0.275
------------------------------------------------------------------------
Less distributions
------------------------------------------------------------------------
From net realized gain $(2.226) $(0.622) $(0.535)
------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(2.226) $(0.622) $(0.535)
------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $21.840 $17.340 $11.710
------------------------------------------------------------------------
TOTAL RETURN(2) 43.12% 54.95% 2.32%
------------------------------------------------------------------------
Ratios/Supplemental Data+
------------------------------------------------------------------------
Net assets, end of year (000's
omitted) $68,208 $20,908 $12,263
Ratios (As a percentage of
average daily net assets):
Net expenses(3) 1.99% 2.46% 2.68%
Net investment loss (0.98)% (1.47)% (1.20)%
Portfolio Turnover of the
Portfolio 173% 131% 157%
------------------------------------------------------------------------
+ The expenses of the fund reflect a reimbursement of Class A
distribution and service fees. Had such action not been taken, the
ratios and net investment loss per share would have been
as follows:
Ratios (As a percentage of
average daily net assets):
Expenses(3) 2.12%
Net investment loss (1.11)%
Net investment loss per share $(0.241)
------------------------------------------------------------------------
</TABLE>
(1) Net investment loss per share was computed using average shares
outstanding.
(2) 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
reinvested at the net asset value on the reinvestment date. Total return
is not computed on an annualized basis.
(3) Includes the Fund's share of the Portfolio's allocated expenses.
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
EATON VANCE INFORMATION AGE FUND AS OF AUGUST 31, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
------------------------------------------------------------------------
2000(1) 1999(1) 1998 1997 1996(1)(2)
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of year $ 17.770 $12.030 $12.310 $11.040 $10.000
----------------------------------------------------------------------------------------------------------
Income (loss) from operations
----------------------------------------------------------------------------------------------------------
Net investment loss $ (0.353) $(0.284) $(0.210) $(0.178) $(0.134)
Net realized and unrealized
gain 7.189 6.646 0.465 2.490 1.174
----------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM OPERATIONS $ 6.836 $ 6.362 $ 0.255 $ 2.312 $ 1.040
----------------------------------------------------------------------------------------------------------
Less distributions
----------------------------------------------------------------------------------------------------------
From net realized gain $ (2.226) $(0.622) $(0.535) $(1.042) $ --
----------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (2.226) $(0.622) $(0.535) $(1.042) $ --
----------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $ 22.380 $17.770 $12.030 $12.310 $11.040
----------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 42.58% 54.39% 2.08% 20.79% 10.40%
----------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
----------------------------------------------------------------------------------------------------------
Net assets, end of year (000's
omitted) $148,603 $49,963 $30,331 $29,037 $21,800
Ratios (As a percentage of
average daily net assets):
Net expenses(4) 2.59% 2.87% 3.12% 3.19% 2.96%(5)
Net investment loss (1.59)% (1.88)% (1.64)% (1.67)% (1.34)%(5)
Portfolio Turnover of the
Portfolio 173% 131% 157% 160% 115%
----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment loss per share was computed using average shares
outstanding.
(2) For the period from the start of business, September 18, 1995, to August
31, 1996.
(3) 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
reinvested at the net asset value on the reinvestment date. Total return
is not computed on an annualized basis.
(4) Includes the Fund's share of the Portfolio's allocated expenses.
(5) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
EATON VANCE INFORMATION AGE FUND AS OF AUGUST 31, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS C
--------------------------------------
YEAR ENDED AUGUST 31,
--------------------------------------
2000(1) 1999(1) 1998
<S> <C> <C> <C>
------------------------------------------------------------------------
Net asset value -- Beginning
of year $17.280 $11.720 $12.020
------------------------------------------------------------------------
Income (loss) from operations
------------------------------------------------------------------------
Net investment loss $(0.342) $(0.290) $(0.205)
Net realized and unrealized
gain 6.898 6.472 0.440
------------------------------------------------------------------------
TOTAL INCOME FROM OPERATIONS $ 6.556 $ 6.182 $ 0.235
------------------------------------------------------------------------
Less distributions
------------------------------------------------------------------------
From net realized gain $(2.226) $(0.622) $(0.535)
------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(2.226) $(0.622) $(0.535)
------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $21.610 $17.280 $11.720
------------------------------------------------------------------------
TOTAL RETURN(2) 42.42% 54.29% 1.96%
------------------------------------------------------------------------
Ratios/Supplemental Data
------------------------------------------------------------------------
Net assets, end of year (000's
omitted) $41,113 $ 6,118 $ 2,531
Ratios (As a percentage of
average daily net assets):
Net expenses(3) 2.60% 2.93% 3.20%
Net investment loss (1.57)% (1.94)% (1.72)%
Portfolio Turnover of the
Portfolio 173% 131% 157%
------------------------------------------------------------------------
</TABLE>
(1) Net investment loss per share was computed using average shares
outstanding.
(2) 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
reinvested at the net asset value on the reinvestment date. Total return
is not computed on an annualized basis.
(3) Includes the Fund's share of the Portfolio's allocated expenses.
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
EATON VANCE INFORMATION AGE FUND AS OF AUGUST 31, 2000
NOTES TO FINANCIAL STATEMENTS
1 Significant Accounting Policies
-------------------------------------------
Eaton Vance 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 offers three classes of shares. Class A shares
are generally sold subject to a sales charge imposed at time of purchase.
Class B and Class C shares are sold at the net asset value and are subject to
a contingent deferred sales charge (see Note 6). Each class represents a pro
rata interest in the Fund, but votes separately on class-specific matters and
(as noted below) is subject to different expenses. 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
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 (76.6% at August 31, 2000). 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 1A 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, if
any, and any net realized capital gains. Accordingly, no provision for
federal income or excise tax is necessary.
D Deferred Organization Expenses -- Costs incurred by the Fund in connection
with its organization, including registration costs, are being amortized on
the straight-line basis over five years.
E Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
to the Fund and the Portfolio. Pursuant to the respective custodian
agreements, IBT receives a fee reduced by credits which are determined based
on the average daily cash balances the Fund or the Portfolio maintains with
IBT. All significant credit balances used to reduce the Fund's custodian fees
are reported as a reduction of total expenses in the Statement of Operations.
F Use of Estimates -- The preparation of the 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 income and expense during the reporting period. Actual results could
differ from those estimates.
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 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 temporary over distributions for financial
statement purposes are classified as distributions in excess of net
investment income or accumulated net realized
11
<PAGE>
EATON VANCE INFORMATION AGE FUND AS OF AUGUST 31, 2000
NOTES TO FINANCIAL STATEMENTS CONT'D
gains. Permanent differences between book and tax accounting relating to
distributions are reclassified to paid-in capital.
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 year ended
August 31, 2000, the fee was equivalent to 0.25% of the Fund's average net
assets for such period and amounted to $467,877. 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.
Certain officers and Trustees of the Fund and of the Portfolio are officers
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.
The Fund was informed that Eaton Vance Distributors, Inc. (EVD), a subsidiary
of EVM and the Fund's principal underwriter, received $127,418 from the Fund
as its portion of the sales charge on sales of Class A shares for the year
ended August 31, 2000.
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). Such
shares may be issued in a number of different series (such as the Fund) and
classes. Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
---------------------
CLASS A 2000 1999
<S> <C> <C>
---------------------------------------------------------------
Sales 2,442,532 517,627
Issued to shareholders electing to
receive payments of distributions in
Fund shares 166,850 43,636
Redemptions (692,287) (402,383)
---------------------------------------------------------------
NET INCREASE 1,917,095 158,880
---------------------------------------------------------------
<CAPTION>
YEAR ENDED AUGUST 31,
---------------------
CLASS B 2000 1999
<S> <C> <C>
---------------------------------------------------------------
Sales 4,162,205 687,038
Issued to shareholders electing to
receive payments of distributions in
Fund shares 372,835 100,635
Redemptions (707,108) (496,264)
---------------------------------------------------------------
NET INCREASE 3,827,932 291,409
---------------------------------------------------------------
<CAPTION>
YEAR ENDED AUGUST 31,
---------------------
CLASS C 2000 1999
<S> <C> <C>
---------------------------------------------------------------
Sales 1,665,715 210,580
Issued to shareholders electing to
receive payments of distributions in
Fund shares 58,963 9,416
Redemptions (175,972) (81,774)
---------------------------------------------------------------
NET INCREASE 1,548,706 138,222
---------------------------------------------------------------
</TABLE>
5 Distribution and Service Plans
-------------------------------------------
The Fund has in effect distribution plans for Class A shares (Class A Plan),
Class B shares (Class B Plan), and Class C shares (Class C Plan) pursuant to
Rule 12b-1 under the Investment Company Act of 1940. The Class A Plan
provides for the payment of a monthly distribution fee to the Principal
Underwriter, EVD, in an amount equal to the aggregate of (a) 0.50% of that
portion of the Fund's average daily net assets attributable to Class A shares
which have remained outstanding for less than one year and (b) 0.25% of that
portion of the Fund's average daily net assets attributable to Class A shares
which have remained outstanding for more than one year. The Class B and Class
C Plans provide for the payment of a monthly distribution fee to EVD at an
annual rate not to exceed 0.75% of the Fund's average daily net assets
attributable to Class B and Class C shares 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) interest 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 $181,944, $851,989, and $192,472 for Class A, Class
B, and Class C shares,
12
<PAGE>
EATON VANCE INFORMATION AGE FUND AS OF AUGUST 31, 2000
NOTES TO FINANCIAL STATEMENTS CONT'D
respectively, to or payable to EVD for the year ended August 31, 2000,
representing 0.38%, 0.75%, and 0.75% of the average daily net assets for
Class A, Class B, and Class C shares, respectively. At August 31, 2000, the
amount of Uncovered Distribution Charges EVD calculated under the Plans was
approximately $3,941,000 and $1,716,000 for Class B and Class C shares,
respectively.
The Plans authorize the Fund to make payments of service fees to EVD,
investment dealers 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 initially implemented the Plans by
authorizing the Fund to make quarterly payments of service fees to the
Principal Underwriter and investment dealers in amounts equal to 0.25% per
annum of the Fund's average daily net assets attributable to Class A and
Class B shares based on the value of Fund shares sold by such persons and
remaining outstanding for at least one year. On October 4, 1999, the Trustees
approved service fee payments equal to 0.25% per annum of the Fund's average
daily net assets attributable to Class B shares for any fiscal year on shares
of the Fund sold on or after October 12, 1999. The Class C Plan permits the
Fund to make monthly payments of service fees in amounts not expected to
exceed 0.25% of the Fund's average daily net assets attributable to Class C
shares for any fiscal year. Service fee payments are 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 year ended August 31, 2000 amounted to
$57,288, $254,282, and $64,303 for Class A, Class B, and Class C shares,
respectively.
For the year ended August 31, 2000, EVM reimbursed Class A distribution and
service fees to the extent that annual operating expenses for Class A
exceeded 1.99%. Such reimbursement for the year ended August 31, 2000 totaled
$61,194.
Certain officers and Trustees of the Fund are officers or directors of EVD.
6 Contingent Deferred Sales Charge
-------------------------------------------
A contingent deferred sales charge (CDSC) generally is imposed on redemptions
of Class B shares made within six years of purchase and on redemptions of
Class C shares made within one year of purchase. Class A shares purchased at
net asset value in amounts of $1 million or more are subject to a 1.00% CDSC
if 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 and may be waived under certain other limited
conditions. CDSC charges are paid to EVD to reduce the amount of Uncovered
Distribution Charges calculated under each Class' Distribution Plan (see Note
5). CDSC charges received when no Uncovered Distribution Charges exist will
be credited to the Fund. The Fund was informed that EVD received
approximately $172,000 and $4,000 of CDSC paid by shareholders for Class B
shares and Class C shares, respectively, for the year ended August 31, 2000.
7 Investment Transactions
-------------------------------------------
Increases and decreases in the Fund's investment in the Portfolio aggregated
$181,564,431 and $37,887,803, respectively, for the year ended August 31,
2000.
8 Tax Information (unaudited)
-------------------------------------------
Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$6,382,519 as long-term capital gain dividends for the fiscal year ended
August 31, 2000.
13
<PAGE>
EATON VANCE INFORMATION AGE FUND AS OF AUGUST 31, 2000
INDEPENDENT ACCOUNTANTS' REPORT
TO THE TRUSTEES AND SHAREHOLDERS
OF EATON VANCE INFORMATION AGE FUND:
---------------------------------------------
In our opinion, the accompanying statement of assets and liabilities, and the
related statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the Eaton Vance Information Age Fund (the "Fund") at August 31, 2000, and the
results of its operations, the changes in its net assets and the financial
highlights for the periods indicated, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 31, 2000
14
<PAGE>
INFORMATION AGE PORTFOLIO AS OF AUGUST 31, 2000
PORTFOLIO OF INVESTMENTS
(EXPRESSED IN UNITED STATES DOLLARS)
COMMON STOCKS -- 92.7%
<TABLE>
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
-----------------------------------------------------------------------
Advertising -- 2.4%
-----------------------------------------------------------------------
Harte-Hanks, Inc. 105,000 $ 2,638,125
Interpublic Group of Companies, Inc. 110,000 4,207,500
Omnicom Group, Inc. 15,000 1,251,562
-----------------------------------------------------------------------
$ 8,097,187
-----------------------------------------------------------------------
Aerospace and Defense -- 3.1%
-----------------------------------------------------------------------
Lockheed Martin Corp. 170,000 $ 4,823,750
United Technologies Corp. 90,000 5,619,375
-----------------------------------------------------------------------
$ 10,443,125
-----------------------------------------------------------------------
Auto and Parts -- 1.2%
-----------------------------------------------------------------------
Toyoda Gosei Co. Ltd.(1) 70,000 $ 4,069,577
-----------------------------------------------------------------------
$ 4,069,577
-----------------------------------------------------------------------
Banks and Money Services -- 2.1%
-----------------------------------------------------------------------
Morgan (J.P.) & Co., Inc. 30,000 $ 5,015,625
Sadot Research/Development Fund
Ltd.(1)(2)(3)(4) 1,013,500 2,069,859
-----------------------------------------------------------------------
$ 7,085,484
-----------------------------------------------------------------------
Biotechnology -- 1.6%
-----------------------------------------------------------------------
Transkaryotic Therapies, Inc.(2) 120,000 $ 5,205,000
-----------------------------------------------------------------------
$ 5,205,000
-----------------------------------------------------------------------
Broadcasting and Cable -- 11.1%
-----------------------------------------------------------------------
Comcast Corp., Class A(2) 120,000 $ 4,470,000
Cox Communications, Inc., Class A(2) 90,000 3,200,625
Entravision Communications(2) 50,000 990,625
Infinity Broadcasting Corp.(2) 80,000 3,030,000
Infomedia Ltd.(1) 500,000 636,867
Mediaset Spa(1)(2) 140,000 2,493,157
Nippon Broadcasting System(1) 100,000 5,851,189
Sinclair Broadcast Group, Inc., Class
A(2) 90,000 1,085,625
Sirius Satellite Radio, Inc.(2) 100,000 5,150,000
Television Broadcasts, Ltd.(1) 440,000 2,487,947
TV Francaise(1) 86,000 6,268,048
USA Networks, Inc.(2) 60,000 1,443,750
-----------------------------------------------------------------------
$ 37,107,833
-----------------------------------------------------------------------
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
-----------------------------------------------------------------------
Business Services - Miscellaneous -- 2.2%
-----------------------------------------------------------------------
Ceridian Corp.(2) 40,000 $ 967,500
Rhapsody Ltd. - Musiclegal.Com(3) 750 750,000
Secom Co. Ltd.(1) 55,000 4,007,220
Thermo Cardiosystems, Inc.(2) 175,000 1,629,687
-----------------------------------------------------------------------
$ 7,354,407
-----------------------------------------------------------------------
Communications Equipment -- 0.7%
-----------------------------------------------------------------------
Cable Design Technologies Corp.(2) 90,000 $ 2,430,000
-----------------------------------------------------------------------
$ 2,430,000
-----------------------------------------------------------------------
Communications Services -- 9.4%
-----------------------------------------------------------------------
BellSouth Corp. 60,000 $ 2,238,750
British Telecommunications PLC(1) 467,668 5,933,947
Cable and Wireless PLC(1) 281,250 5,191,811
China Mobile (Hong Kong)(1)(2) 400,000 3,077,239
China Unicom, Ltd.(1)(2) 748,000 1,735,922
Cybertron Telekom AG(1) 65,000 1,154,075
DDI Corp.(1) 600 4,725,960
ECtel, Ltd.(1)(2) 109,200 2,497,950
Korea Telecom Corp. ADR(2) 54,427 2,061,423
SBC Communications, Inc. 70,000 2,922,500
-----------------------------------------------------------------------
$ 31,539,577
-----------------------------------------------------------------------
Computer Services -- 0.6%
-----------------------------------------------------------------------
SunGard Data Systems, Inc.(2) 55,000 $ 1,980,000
-----------------------------------------------------------------------
$ 1,980,000
-----------------------------------------------------------------------
Computer Software - Services -- 2.5%
-----------------------------------------------------------------------
Meta4 NV(1)(2) 120,000 $ 633,853
Microsoft Corp.(2) 75,000 5,235,937
SilverStream Software, Inc.(2) 20,000 695,000
Tecnomatix Technologies Ltd.(1)(2) 114,724 1,720,860
-----------------------------------------------------------------------
$ 8,285,650
-----------------------------------------------------------------------
Computers and Business Equipment -- 6.1%
-----------------------------------------------------------------------
ASM Lithography Holding NV(1) 108,000 $ 4,077,649
BTC Korea Co., Ltd.(1) 201,658 503,804
International Business Machines Corp. 45,000 5,940,000
Lexmark International Group, Inc.(2) 90,000 6,103,125
National Instruments Corp.(2) 90,000 3,886,875
-----------------------------------------------------------------------
$ 20,511,453
-----------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
15
<PAGE>
INFORMATION AGE PORTFOLIO AS OF AUGUST 31, 2000
PORTFOLIO OF INVESTMENTS CONT'D
(EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
-----------------------------------------------------------------------
Electric Utilities -- 0.1%
-----------------------------------------------------------------------
NRG Energy, Inc.(2) 16,000 $ 420,000
-----------------------------------------------------------------------
$ 420,000
-----------------------------------------------------------------------
Electrical and Electronics -- 7.7%
-----------------------------------------------------------------------
Avimo Group Ltd.(1)(2) 400,000 $ 771,600
Hirose Electronics Co. Ltd.(1) 30,000 4,349,008
Infineon Technologies AG(1) 18,000 1,194,468
Litton Industries, Inc.(2) 50,000 2,765,625
Mosel Vitelic, Inc.(1) 1,285,760 2,216,113
Murata Mfg Co. Ltd.(1) 10,000 1,531,249
Sato Corp.(1) 110,000 2,764,311
TDK Corporation(1) 21,000 3,103,380
Thermo Electron Corp.(2) 160,000 3,720,000
Toshiba Corp.(1) 320,000 3,147,639
-----------------------------------------------------------------------
$ 25,563,393
-----------------------------------------------------------------------
Electronics - Semiconductors -- 2.3%
-----------------------------------------------------------------------
Motorola, Inc. 100,000 $ 3,606,250
Samsung Electronics(1)(2) 1,577 389,005
Via Technologies, Inc.(1)(2) 283,500 3,781,218
-----------------------------------------------------------------------
$ 7,776,473
-----------------------------------------------------------------------
Entertainment -- 4.9%
-----------------------------------------------------------------------
Disney (Walt) Co. 130,000 $ 5,061,875
Endemol Entertainment(1)(3)(4) 50,000 6,125,475
Shochiku(1) 215,000 1,058,418
Viacom, Inc., Class B(2) 61,700 4,153,181
-----------------------------------------------------------------------
$ 16,398,949
-----------------------------------------------------------------------
Financial Services -- 6.0%
-----------------------------------------------------------------------
Franklin Resources, Inc. 130,000 $ 4,940,000
Knight Trading Group, Inc.(2) 80,000 2,510,000
MGIC Investment Corp. 40,000 2,352,500
Reuters Group PLC(1)(2) 100,000 2,001,138
Schwab (Charles) Corp. 135,000 5,155,313
Sun Life Financial Services of Canada
ADR(2) 150,000 3,159,375
-----------------------------------------------------------------------
$ 20,118,326
-----------------------------------------------------------------------
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
-----------------------------------------------------------------------
Information Services -- 2.8%
-----------------------------------------------------------------------
Acxiom Corp.(2) 80,000 $ 2,040,000
Automatic Data Processing, Inc. 85,000 5,068,125
Azlan Group PLC(1)(2) 800,000 2,285,358
-----------------------------------------------------------------------
$ 9,393,483
-----------------------------------------------------------------------
Media -- 1.3%
-----------------------------------------------------------------------
Granada Compass PLC(1) 339,615 $ 4,178,656
-----------------------------------------------------------------------
$ 4,178,656
-----------------------------------------------------------------------
Oil and Gas - Equipment and Services -- 4.0%
-----------------------------------------------------------------------
Core Laboratories NV(1)(2) 110,000 $ 2,117,500
Dynegy, Inc., Class A 80,000 3,600,000
Schlumberger Ltd. 35,000 2,985,938
Williams Cos., Inc. (The) 100,000 4,606,250
-----------------------------------------------------------------------
$ 13,309,688
-----------------------------------------------------------------------
Oil and Gas - Exploration and Production -- 1.5%
-----------------------------------------------------------------------
Enron Corp. 60,000 $ 5,092,500
-----------------------------------------------------------------------
$ 5,092,500
-----------------------------------------------------------------------
Pharmaceutical -- 1.2%
-----------------------------------------------------------------------
Alza Corp.(2) 15,000 $ 1,134,375
Millennium Pharmaceuticals(2) 20,000 2,862,500
-----------------------------------------------------------------------
$ 3,996,875
-----------------------------------------------------------------------
Photo Equipment and Supplies -- 1.2%
-----------------------------------------------------------------------
Fuji Photo Film(1) 108,000 $ 3,868,536
-----------------------------------------------------------------------
$ 3,868,536
-----------------------------------------------------------------------
Publishing -- 10.0%
-----------------------------------------------------------------------
Dow Jones & Co., Inc. 45,000 $ 2,815,313
Houghton Mifflin Co. 40,000 1,967,500
McGraw-Hill Cos., Inc. (The) 100,000 6,193,750
New York Times Co. (The), Class A 100,000 3,918,750
News Corp. Ltd.(1) 150,636 1,964,281
Pearson PLC(1) 216,364 6,243,603
Springer Axel Verlag AG(1) 3,256 3,165,113
Tribune Co. 90,000 3,211,875
Trinity Mirror PLC(1) 500,000 3,781,136
-----------------------------------------------------------------------
$ 33,261,321
-----------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
16
<PAGE>
INFORMATION AGE PORTFOLIO AS OF AUGUST 31, 2000
PORTFOLIO OF INVESTMENTS CONT'D
(EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
-----------------------------------------------------------------------
Semiconductor Equipment -- 1.0%
-----------------------------------------------------------------------
Toshiba Tungaloy Co., Ltd.(1) 500,000 $ 3,385,063
-----------------------------------------------------------------------
$ 3,385,063
-----------------------------------------------------------------------
Specialty Chemicals and Materials -- 1.0%
-----------------------------------------------------------------------
Shin-Etsu Chemical Co.(1) 70,000 $ 3,439,449
-----------------------------------------------------------------------
$ 3,439,449
-----------------------------------------------------------------------
Telecommunications -- 1.8%
-----------------------------------------------------------------------
Nippon Telegraph and Telephone Corp.(1) 500 $ 5,954,334
-----------------------------------------------------------------------
$ 5,954,334
-----------------------------------------------------------------------
Transportation -- 2.9%
-----------------------------------------------------------------------
Expeditors International Wash Inc. 110,000 $ 5,390,000
Fedex Corp.(2) 110,000 4,438,500
-----------------------------------------------------------------------
$ 9,828,500
-----------------------------------------------------------------------
Total Common Stocks
(identified cost $264,322,214) $310,094,839
-----------------------------------------------------------------------
</TABLE>
CONVERTIBLE BONDS & NOTES -- 1.0%
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
<S> <C> <C>
-----------------------------------------------------------------------
Communications Services -- 0.3%
-----------------------------------------------------------------------
Deltacom Ltd., 0.00%, 12/21/02(1) $ 1,000 $ 1,000,000
-----------------------------------------------------------------------
$ 1,000,000
-----------------------------------------------------------------------
Computers and Business Equipment -- 0.3%
-----------------------------------------------------------------------
JC Hyun System, 0.00%, 11/25/02(1) $ 1,000 $ 1,000,000
-----------------------------------------------------------------------
$ 1,000,000
-----------------------------------------------------------------------
Electrical and Electronics -- 0.3%
-----------------------------------------------------------------------
TBK Electronics, 0.00%, 4/4/05(1) $ 1,000 $ 1,000,000
-----------------------------------------------------------------------
$ 1,000,000
-----------------------------------------------------------------------
Pharmaceutical -- 0.1%
-----------------------------------------------------------------------
Dong Sung Corp., 0.00%, 2/21/05(1) $ 500 $ 500,000
-----------------------------------------------------------------------
$ 500,000
-----------------------------------------------------------------------
Total Convertible Bonds & Notes
(identified cost $3,500,000) $ 3,500,000
-----------------------------------------------------------------------
</TABLE>
COMMERCIAL PAPER -- 11.0%
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
<S> <C> <C>
-----------------------------------------------------------------------
Corp. Asset Funding, 6.50%, 10/2/00 $ 10,792 $ 10,731,595
GE Capital Corp., 6.67%, 9/1/00 10,562 10,562,000
Teco Finance, 6.51%, 9/19/00 15,388 15,337,912
-----------------------------------------------------------------------
Total Commercial Paper
(at amortized cost, $36,631,507) $ 36,631,507
-----------------------------------------------------------------------
Total Investments -- 104.7%
(identified cost $304,453,721) $350,226,346
-----------------------------------------------------------------------
Other Assets, Less Liabilities -- (4.7)% $(15,614,964)
-----------------------------------------------------------------------
Net Assets -- 100.0% $334,611,382
-----------------------------------------------------------------------
</TABLE>
ADR - American Depositary Receipt
(1) Foreign security.
(2) Non-income producing security.
(3) Security valued at fair value using methods determined in good faith by
or at the direction of the Trustees.
(4) Restricted security.
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
INFORMATION AGE PORTFOLIO AS OF AUGUST 31, 2000
PORTFOLIO OF INVESTMENTS CONT'D
(EXPRESSED IN UNITED STATES DOLLARS)
COUNTRY CONCENTRATION OF PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
COUNTRY OF NET ASSETS VALUE
<S> <C> <C>
---------------------------------------------------------------------
United States 64.2% $214,773,361
Japan 15.3% 51,255,333
United Kingdom 8.9% 29,615,649
Netherlands 3.9% 12,954,477
Hong Kong 2.2% 7,301,108
Israel 1.9% 6,288,669
France 1.9% 6,268,048
Taiwan 1.8% 5,997,331
Republic of Korea 1.3% 4,392,809
Germany 1.3% 4,359,581
Australia 0.8% 2,601,148
Italy 0.7% 2,493,157
Austria 0.3% 1,154,075
Singapore 0.2% 771,600
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
INFORMATION AGE PORTFOLIO AS OF AUGUST 31, 2000
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF AUGUST 31, 2000
(EXPRESSED IN UNITED STATES DOLLARS)
<S> <C>
Assets
------------------------------------------------------
Investments, at value
(identified cost, $304,453,721) $350,226,346
Cash 2,811
Foreign currency, at value
(identified cost, $7,602) 7,332
Receivable for investments sold 3,054,690
Dividends receivable 265,706
Tax reclaim receivable 29,397
Deferred organization expenses 239
------------------------------------------------------
TOTAL ASSETS $353,586,521
------------------------------------------------------
Liabilities
------------------------------------------------------
Payable for investments purchased $ 18,898,225
Payable to affiliate for Trustees' fees 3,993
Accrued expenses 72,921
------------------------------------------------------
TOTAL LIABILITIES $ 18,975,139
------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS'
INTEREST IN PORTFOLIO $334,611,382
------------------------------------------------------
Sources of Net Assets
------------------------------------------------------
Net proceeds from capital contributions
and withdrawals $288,827,761
Net unrealized appreciation (computed on
the basis of identified cost) 45,783,621
------------------------------------------------------
TOTAL $334,611,382
------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
AUGUST 31, 2000
(EXPRESSED IN UNITED STATES DOLLARS)
<S> <C>
Investment Income
-----------------------------------------------------
Interest $ 1,310,711
Dividends (net of foreign
taxes, $75,532) 1,155,117
-----------------------------------------------------
TOTAL INVESTMENT INCOME $ 2,465,828
-----------------------------------------------------
Expenses
-----------------------------------------------------
Investment adviser fee $ 1,836,584
Administration fee 614,327
Trustees fees and expenses 21,615
Custodian fee 267,525
Legal and accounting services 31,148
Amortization of organization expenses 1,244
Miscellaneous 965
-----------------------------------------------------
TOTAL EXPENSES $ 2,773,408
-----------------------------------------------------
NET INVESTMENT LOSS $ (307,580)
-----------------------------------------------------
Realized and Unrealized Gain (Loss)
-----------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $24,631,644
Foreign currency and forward foreign
currency exchange
contract transactions (362,115)
-----------------------------------------------------
NET REALIZED GAIN $24,269,529
-----------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $24,642,580
Foreign currency and forward foreign
currency exchange contracts 10,637
-----------------------------------------------------
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) $24,653,217
-----------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $48,922,746
-----------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $48,615,166
-----------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE>
INFORMATION AGE PORTFOLIO AS OF AUGUST 31, 2000
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
(EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
INCREASE (DECREASE) YEAR ENDED YEAR ENDED
IN NET ASSETS AUGUST 31, 2000 AUGUST 31, 1999
<S> <C> <C>
--------------------------------------------------------------------------
From operations --
Net investment loss $ (307,580) $ (269,466)
Net realized gain 24,269,529 11,701,774
Net change in unrealized
appreciation (depreciation) 24,653,217 18,617,351
--------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 48,615,166 $ 30,049,659
--------------------------------------------------------------------------
Capital transactions --
Contributions $ 251,844,764 $ 32,069,062
Withdrawals (63,110,419) (18,413,197)
--------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
CAPITAL TRANSACTIONS $ 188,734,345 $ 13,655,865
--------------------------------------------------------------------------
NET INCREASE IN NET ASSETS $ 237,349,511 $ 43,705,524
--------------------------------------------------------------------------
Net Assets
--------------------------------------------------------------------------
At beginning of year $ 97,261,871 $ 53,556,347
--------------------------------------------------------------------------
AT END OF YEAR $ 334,611,382 $ 97,261,871
--------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
INFORMATION AGE PORTFOLIO AS OF AUGUST 31, 2000
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
------------------------------------------------------------
2000 1999 1998 1997 1996(1)
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------
Ratios/Supplemental Data
----------------------------------------------------------------------------------------------
Ratios (As a percentage of
average daily net assets):
Expenses 1.13% 1.36% 1.44% 1.48% 1.52%(2)
Net investment income
(loss) (0.13)% (0.38)% 0.01% (0.04)% 0.07%(2)
Portfolio Turnover 173% 131% 157% 160% 115%
----------------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S
OMITTED) $334,611 $97,262 $53,556 $51,374 $42,703
----------------------------------------------------------------------------------------------
</TABLE>
(1) For the period from the start of business, September 18, 1995, to
August 31, 1996.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
21
<PAGE>
INFORMATION AGE PORTFOLIO AS OF AUGUST 31, 2000
NOTES TO FINANCIAL STATEMENTS
(EXPRESSED IN UNITED STATES DOLLARS)
1 Significant Accounting Policies
-------------------------------------------
Information Age Portfolio (the Portfolio) is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end management
investment company. The Portfolio, which was organized as a trust under the
laws of the State of New York on June 1, 1995, 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 Income Taxes -- The Portfolio has elected to be treated as a partnership for
United States Federal tax purposes. No provision is made by the Portfolio for
Federal or state taxes on any taxable income of the Portfolio because each
investor in the Portfolio is ultimately responsible for the payment of any
taxes. Since one of the Portfolio's investors is a regulated investment
company that invests all or substantially all of its 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 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.
E Options on Financial Futures -- 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 upon 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 changes in foreign currency exchange
rates are recorded for financial statement purposes as net realized gains and
losses on
22
<PAGE>
INFORMATION AGE PORTFOLIO AS OF AUGUST 31, 2000
NOTES TO FINANCIAL STATEMENTS CONT'D
(EXPRESSED IN UNITED STATES DOLLARS)
investments. That portion of unrealized gains and losses on investments that
results from fluctuations in foreign currency exchange rates is 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 Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
of the Portfolio. Pursuant to the custodian agreement, IBT receives a fee
reduced by credits which are determined based on the average daily cash
balance the Portfolio maintains with IBT. All significant credit balances
used to reduce the Portfolio's custodian fees are reported as a reduction of
total expenses in the Statement of Operations. For the year ended August 31,
2000, $2,252 credit balances were used to reduce the Portfolio's custodian
fee.
I Use of Estimates -- The preparation of the 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 income and expense during the reporting period. Actual results could
differ from those estimates.
J 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.
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 year ended August 31, 2000, the
adviser fee was 0.75% of average net assets for such period and amounted to
$1,836,584. 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 year ended August 31, 2000, the administration fee was 0.25%
of average net assets for such period and amounted to $614,327. Except as to
the 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 year ended
August 31, 2000, no significant amounts have been deferred.
Certain officers and Trustees of the Portfolio are officers of the above
organizations.
3 Investment Transactions
-------------------------------------------
Purchases and sales of investments, other than short-term obligations,
aggregated $564,097,530 and $391,663,867, respectively, for the year ended
August 31, 2000.
23
<PAGE>
INFORMATION AGE PORTFOLIO AS OF AUGUST 31, 2000
NOTES TO FINANCIAL STATEMENTS CONT'D
(EXPRESSED IN UNITED STATES DOLLARS)
4 Federal Income Tax Basis of Investments
-------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned at August 31, 2000, as computed on a federal income tax
basis are as follows:
<TABLE>
<S> <C>
AGGREGATE COST $304,462,007
------------------------------------------------------
Gross unrealized appreciation $ 57,720,717
Gross unrealized depreciation (11,956,378)
------------------------------------------------------
NET UNREALIZED APPRECIATION $ 45,764,339
------------------------------------------------------
</TABLE>
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 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 may
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, 2000.
7 Line of Credit
-------------------------------------------
The Portfolio participates with other portfolios and funds managed by BMR and
EVM and its affiliates in a $150 million unsecured line of credit agreement
with a group of banks. Borrowings will be made by the Portfolio solely to
facilitate the handling of unusual and/or unanticipated short-term cash
requirements. Interest is charged to each portfolio or fund based on its
borrowings at an amount above either 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 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 year
ended August 31, 2000.
24
<PAGE>
INFORMATION AGE PORTFOLIO AS OF AUGUST 31, 2000
INDEPENDENT ACCOUNTANTS' REPORT
TO THE TRUSTEES AND INVESTORS
OF INFORMATION AGE PORTFOLIO:
---------------------------------------------
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the supplementary data present fairly, in all material
respects, the financial position of the Information Age Portfolio (the
"Portfolio") at August 31, 2000, and the results of its operations, the changes
in net assets and the supplementary data for the periods indicated, in
conformity with accounting principles generally accepted in the United States of
America. These financial statements and supplementary data (hereafter referred
to as "financial statements") are the responsibility of the Portfolio's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at August 31, 2000 by
correspondence with the custodian, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 31, 2000
25
<PAGE>
EATON VANCE INFORMATION AGE FUND AS OF AUGUST 31, 2000
INVESTMENT MANAGEMENT
EATON VANCE INFORMATION AGE FUND
Officers
James B. Hawkes
President and Trustee
Thomas E. Faust, Jr.
Vice President
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Trustees
Jessica M. Bibliowicz
President and Chief Executive Officer,
National Financial Partners
Donald R. Dwight
President, Dwight Partners, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment
Banking Emeritus, Harvard University
Graduate School of Business Administration
Norton H. Reamer
President, Unicorn
Lynn A. Stout
Professor of Law,
Georgetown University Law Center
Jack L. Treynor
Investment Adviser and Consultant
INFORMATION AGE PORTFOLIO
Officers
James B. Hawkes
President and Trustee
Duncan W. Richardson
Vice President and
Co-Portfolio Manager
Hon. Robert Lloyd George
Vice President and Trustee
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Trustees
Hon. Edward K.Y. Chen
President of Lingnan College,
University of Hong Kong
Donald R. Dwight
President, Dwight Partners, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment
Banking Emeritus, Harvard University
Graduate School of Business Administration
Norton H. Reamer
President, Unicorn
Lynn A. Stout
Professor of Law,
Georgetown University Law Center
Jack L. Treynor
Investment Adviser and Consultant
26
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
SPONSOR AND MANAGER OF EATON VANCE
INFORMATION AGE FUND AND ADMINISTRATOR OF
INFORMATION AGE PORTFOLIO
EATON VANCE MANAGEMENT
The Eaton Vance Building
255 State Street
Boston, MA 02109
CO-ADVISERS OF INFORMATION AGE PORTFOLIO
BOSTON MANAGEMENT AND RESEARCH
The Eaton Vance Building
255 State Street
Boston, MA 02109
LLOYD GEORGE INVESTMENT MANAGEMENT (BERMUDA) LIMITED
3808 One Exchange Square
Central, Hong Kong
PRINCIPAL UNDERWRITER
EATON VANCE DISTRIBUTORS, INC.
The Eaton Vance Building
255 State Street
Boston, MA 02109
(617) 482-8260
CUSTODIAN
INVESTORS BANK & TRUST COMPANY
200 Clarendon Street
Boston, MA 02116
TRANSFER AGENT
PFPC, INC.
Attn: Eaton Vance Funds
P.O. Box 9653
Providence, RI 02904-9653
(800) 262-1122
INDEPENDENT ACCOUNTANTS
PRICEWATERHOUSECOOPERS LLP
160 Federal Street
Boston, MA 02110
EATON VANCE INFORMATION AGE FUND
THE EATON VANCE BUILDING
255 STATE STREET
BOSTON, MA 02109
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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.
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424-10/00 IASRC
