TO SHAREHOLDERS
VANCE, SANDERS EXCHANGE FUND HAD A TOTAL RETURN OF 19.6 PERCENT DURING THE SIX
MONTHS THAT ENDED JUNE 30, 1995. That return represented a rise in net asset
value per share to $308.44 from $259.49, and the reinvestment of $1.65 per share
in income dividends. By comparison, the S&P 500, an unmanaged index of common
stocks, had a return of 20.1 percent during the same period.
--------------------------------
VANCE, SANDERS EXCHANGE FUND
HAD A TOTAL RETURN OF
19.6 PERCENT DURING THE SIX
MONTHS THAT ENDED JUNE 30, 1995.
THE STOCK MARKET PERFORMED VERY WELL DURING THE FIRST HALF OF 1995. The market's
behavior was a positive response to the improving interest rate environment and
the prospects for continuing economic growth with limited inflation. Many major
corporations are seeing sharply escalating profits, reflecting not only the
generally favorable economy but also the substantial cost reduction and
productivity initiatives they have undertaken in recent years.
THE MARKET WAS LED IN THE FIRST SIX MONTHS OF 1995 BY STOCKS IN THE TECHNOLOGY
SECTOR. Intel Corp., which is the Fund's largest holding, was a standout
performer even among technology stocks, with a price gain of 98 percent.
Hewlett-Packard Co., the Fund's fourth-largest holding, was up 49 percent. These
stocks continue to benefit from the extremely strong global demand for
semiconductor and computer-based products for an ever-widening array of
applications.
OTHER SECTORS OF THE MARKET THAT WERE STRONG PERFORMERS IN THE FIRST HALF OF
1995 WERE FINANCIAL AND HEALTHCARE STOCKS. The Fund's second-largest holding,
the global insurer American International Group Inc., had a price gain of 16
percent. Among its major healthcare holdings, Astra ABSeries A, Pfizer Inc. and
Schering-Plough Corp. each increased in price by 19 percent, and Johnson &
Johnson had a price gain of 23 percent.
-------------------------
[Photo of Landon T. Clay]
-------------------------
OTHER NOTEWORTHY CONTRIBUTORS AMONG THE FUND'S TOP DOZEN HOLDINGS WERE THE
BEVERAGE COMPANIES, COCA-COLA COMPANY AND PEPSICO, INC., UP 24 PERCENT AND 26
PERCENT, RESPECTIVELY. Procter & Gamble Co. increased in price by 16 percent. As
evidenced by the Fund's total return of nearly 20 percent, this has been a
favorable environment for well-established international growth companies that
make up much of the Fund's portfolio. However, past performance is no guarantee
of future returns.
----------------------------------------
"NO MATTER HOW ECONOMIC CONDITIONS
MAY CHANGE... INVESTING IN A SELECTED
PORTFOLIO OF HIGH-QUALITY COMMON STOCKS
IS LIKELY TO DELIVER SOUND PERFORMANCE."
LOOKING FORWARD, THE KEY ISSUES FACING THE FUND ARE STOCK MARKET VALUATION
LEVELS AND THE SLOWING OF ECONOMIC GROWTH. The recent action by the Federal
Reserve to reduce short-term interest rates increases the likelihood of a "soft
landing" for the U.S. economy.
NO MATTER HOW ECONOMIC CONDITIONS MAY CHANGE, WE REMAIN CONVINCED THAT OVER THE
LONG TERM, INVESTING IN A SELECTED PORTFOLIO OF HIGH-QUALITY COMMON STOCKS IS
LIKELY TO DELIVER SOUND PERFORMANCE. That remains the strategy of Vance, Sanders
Exchange Fund, and we are confident the Fund will continue to participate in the
economy's ongoing growth.
Sincerely,
/s/ Landon T. Clay
LANDON T. CLAY
Managing General Partner
August 4, 1995
<PAGE>
VANCE, SANDERS
EXCHANGE FUND
JUNE 30, 1995
(UNAUDITED)
INVESTMENT CHANGES
SIX MONTHS ENDED JUNE 30, 1995
------------------------------------------------------------------------------
Shares Owned
INCREASES 12/31/94 6/30/95
------------------------------------------------------------------------------
Apache Corp.(1) -- 56,440
------------------------------------------------------------------------------
Intel Corp.(3) 156,665 256,270
------------------------------------------------------------------------------
Lincoln Electric Co. Class A(2) -- 19,700
------------------------------------------------------------------------------
DECREASES*
------------------------------------------------------------------------------
American International Group Inc. 107,062 90,672
------------------------------------------------------------------------------
Caremark, Inc. 21,112 --
------------------------------------------------------------------------------
DEKALB Genetics Corp. Class B 36,825 7,215
------------------------------------------------------------------------------
Dekalb Energy Co. Class Ba(1) 64,400 --
------------------------------------------------------------------------------
Gannett Co., Inc. 113,400 93,400
------------------------------------------------------------------------------
McCormick & Co. Inc., Nonvoting 241,198 214,448
------------------------------------------------------------------------------
Stratus Computer, Inc. 65,000 20,000
------------------------------------------------------------------------------
OTHER CHANGES
Shares
------------------------------------------------------------------------------
48,332 American Business Products, Inc. - GA
in a 1.5 for 1 stock split.
------------------------------------------------------------------------------
30,180 Amp, Inc. in a 2 for 1 stock split.
------------------------------------------------------------------------------
51,792 Hewlett-Packard Co. in a 2 for 1 stock split.
------------------------------------------------------------------------------
17,910 Parker-Hannifin, Corp. in a 1.5 for 1 stock split.
------------------------------------------------------------------------------
64,060 Schering-Plough Corp. in a 2 for 1 stock split.
------------------------------------------------------------------------------
*Includes investments paid in kind on redemptions.
(1) Acquired in a merger with Dekalb Energy Co. at a rate of 0.8764 Apache
shares for each Dekalb Class B share held.
(2) Distributed to holders of Lincoln Electric Co. common stock in a ratio
of 1:1.
(3) Intel Corp. had a 2:1 stock split, adding 156,665 shares to the Funds
holdings. Of the post split shares held, 57,060 shares were sold or
distributed.
<PAGE>
PORTFOLIO OF INVESTMENTS
JUNE 30, 1995
(UNAUDITED)
--------------------------------------------------------------------------------
COMMON STOCKS - 97.7%
--------------------------------------------------------------------------------
NAME OF COMPANY SHARES VALUE
--------------------------------------------------------------------------------
AEROSPACE AND DEFENSE - 1.5%
Raytheon Co. 42,372 $ 3,289,127
------------
AGRICULTURE - 1.9%
DEKALB Genetics Corp. Class B* 7,215 $ 317,460
Pioneer Hi-Bred International Inc. 87,000 3,654,000
------------
$ 3,971,460
------------
BEVERAGES - 7.1%
Coca-Cola Company 127,968 $ 8,157,960
PepsiCo, Inc. 150,000 6,843,750
------------
$ 15,001,710
------------
BUILDING MATERIALS - 0.7%
Masco Corp. 55,540 $ 1,499,580
------------
CHEMICALS - 3.3%
Dow Chemical Company 13,917 $ 1,000,284
Monsanto Co.* 60,000 5,407,500
CBI Industries, Inc.* 25,200 633,150
------------
$ 7,040,934
------------
COMPUTER SOFTWARE - 1.2%
Novell Inc.* 130,000 $ 2,591,875
------------
COMPUTERS & BUSINESS EQUIPMENT - 0.8%
International Business Machines Corp. 11,094 $ 1,065,024
Stratus Computer, Inc.* 20,000 620,000
------------
$ 1,685,024
------------
DISTRIBUTION - 1.5%
Sysco Corp. 107,760 $ 3,178,920
------------
DRUGS - 9.8%
ASTRA AB - Series A ADR 250,000 $ 7,707,775
Merck & Co., Inc. 33,746 1,653,554
Pfizer Inc. 63,592 5,874,311
Schering-Plough Corp. 128,120 5,653,295
------------
$ 20,888,935
------------
ELECTRICAL EQUIPMENT - 4.5%
AMP Inc. 60,360 $ 2,550,210
Emerson Electric Co. 22,398 1,601,457
General Electric Co. 24,864 1,401,708
Lincoln Electric Co. 19,700 615,625
Lincoln Electric Co. Class A 19,700 591,000
General Signal Corp. 68,600 2,726,850
------------
$ 9,486,850
------------
ELECTRONIC INSTRUMENTS - 3.6%
Hewlett-Packard Co. 103,584 $ 7,717,008
------------
ELECTRONICS - SEMICONDUCTORS - 7.6%
Intel Corp. 256,270 $ 16,225,094
------------
FINANCIAL SERVICES - MISCELLANEOUS - 2.1%
Federal National Mortgage Association 47,800 $ 4,511,125
------------
FOOD - 2.2%
McCormick & Co. Inc., Nonvoting 218,448 $ 4,696,632
------------
HOUSEHOLD PRODUCTS - 3.5%
Colgate-Palmolive Co. 21,826 $ 1,596,026
Procter & Gamble Co. 80,000 5,750,000
------------
$ 7,346,026
------------
INDUSTRIAL EQUIPMENT - 0.9%
Parker-Hannifin Corp. 53,730 $ 1,947,713
------------
INFORMATION SERVICES - 5.9%
Automatic Data Processing Inc. 25,520 $ 1,604,570
Dun & Bradstreet Corp. 83,300 4,373,250
Reuters Holdings PLC 132,000 6,616,500
------------
$ 12,594,320
------------
INSURANCE - 9.2%
American International Group Inc. 90,672 $ 10,336,608
Marsh & McLennan Companies, Inc. 28,172 2,285,454
Providian Corp. 54,724 1,983,745
General Re Corp. 26,816 3,589,992
Seafield Capital Corp. 35,960 1,312,540
------------
$ 19,508,339
------------
MEDICAL PRODUCTS - 6.3%
Abbott Laboratories 80,000 $ 3,240,000
Baxter International Inc. 49,728 1,808,856
Johnson & Johnson 82,836 5,601,784
Medtronic, Inc. 36,000 2,776,500
------------
$ 13,427,140
------------
METALS - INDUSTRIAL - 1.6%
Inco Ltd. 124,000 $ 3,503,000
------------
OIL AND GAS - EQUIPMENT & SERVICES - 2.3%
Halliburton Co. 50,700 $ 1,812,525
Schlumberger Ltd. 49,246 3,059,408
------------
$ 4,871,933
------------
OIL AND GAS - EXPLORATION & PRODUCTION - 1.2%
Apache Corp. 56,440 $ 1,545,049
Louisiana Land & Exploration Co. 25,000 996,875
------------
$ 2,541,924
------------
OIL AND GAS - INTEGRATED - 3.6%
Amoco Corp. 47,928 $ 3,193,203
Murphy Oil Corp. 29,700 1,217,700
Phillips Petroleum Co. 100,000 3,337,500
------------
$ 7,748,403
------------
PRINTING AND BUSINESS FORMS - 1.3%
American Business Products Inc. - GA 146,497 $ 2,783,443
------------
PUBLISHING - 2.4%
Gannett Co., Inc. 93,400 $ 5,066,950
------------
RETAIL - SPECIALTY AND APPAREL - 3.8%
Home Depot, Inc. (The) 80,000 $ 3,250,000
Toys "R" Us, Inc.* 161,775 4,731,919
------------
$ 7,981,919
------------
SPECIALTY CHEMICALS AND MATERIALS - 7.9%
International Flavors & Fragrances 60,000 $ 2,985,000
Loctite Corp. 141,392 6,433,336
Millipore Corp.* 15,720 1,061,100
Minnesota Mining & Manufacturing Co. 26,288 1,504,988
Nalco Chemical Co. 131,040 4,766,580
------------
$ 16,751,004
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST, $35,907,944) $207,856,388
------------
--------------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS - 2.2%
--------------------------------------------------------------------------------
FACE AMOUNT
NAME OF COMPANY (000 OMITTED) VALUE
--------------------------------------------------------------------------------
Melville Corp., 6.23%, 07/03/95 $ 1,282 $ 1,281,556
Prudential Funding, 6.05%, 07/05/95 3,300 3,297,782
------------
$ 4,579,338
------------
Total Short-Term Obligations, at amortized cost
TOTAL INVESTMENTS - 99.9%
(IDENTIFIED COST, $40,487,282) $212,435,726
OTHER ASSETS, LESS LIABILITIES - 0.1% 156,942
------------
NET ASSETS - 100% $212,592,668
============
*Non-income producing security.
ADR - American Depository Receipt
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
--------------------------------------------------------------------------------
June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------
ASSETS:
Investments, at value (Note 1A) (identified cost,
$40,487,282) $212,435,726
Cash 1,276
Dividends receivable 270,454
Miscellaneous receivable 11,587
------------
Total assets $212,719,043
LIABILITIES:
Payable for partnership shares redeemed $ 627
Payable to affiliates --
Investment advisory fee 105,629
Custodian fee 4,191
Managing General Partners 2,718
Accrued expenses and other liabilities 13,210
----------
Total liabilities 126,375
------------
NET ASSETS for 689,247 shares of partnership
interest outstanding $212,592,668
============
NET ASSETS APPLICABLE TO SHARES OF PARTNERSHIP
INTEREST OWNED BY:
Limited Partners (679,516 shares) $209,591,220
General Partners --
Managing Partners (547 shares) $ 168,717
Non-Managing Partner (9,184 shares) 2,832,731 3,001,448
---------- ------------
NET ASSETS (689,247 SHARES) $212,592,668
============
SOURCES OF NET ASSETS:
Accumulated net realized gain on investment transactions
(computed on the basis of identified cost), less the
excess of cost of partnership interest redeemed over
proceeds from sales of partnership interest (including
shares issued to partners electing to receive payment of
distributions in shares) $ 54,371,175
Accumulated distributions of net realized gain on
investments as computed for federal income tax purposes (16,700,504)
Unrealized appreciation of investments (computed on the
basis of identified cost) 171,948,444
Undistributed net investment income 2,973,553
------------
Total $212,592,668
============
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE OF
PARTNERSHIP INTEREST
($212,592,668 / 689,247 shares of partnership
interest outstanding) $308.44
=======
See notes to financial statements
<PAGE>
STATEMENT OF OPERATIONS
-------------------------------------------------------------------------------
For the Six Months Ended June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME:
Income --
Dividends $ 1,866,433
Interest 85,667
-----------
Total income $ 1,952,100
Expenses --
Investment adviser fee (Note 4) $ 593,095
Compensation of Managing General Partners
not members of the Non-Managing
General Partner's organization 5,467
Custodian fee (Note 4) 52,180
Legal and accounting services 27,651
Printing and postage 17,857
Transfer and dividend disbursing agent fees 13,414
Miscellaneous 1,843
-----------
Total expenses 711,507
-----------
Net investment income $ 1,240,593
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments, computed on
the basis of identified cost $ 6,903,527
Increase in unrealized appreciation of
investments 27,296,760
-----------
Net realized and unrealized gain on
investments 34,200,287
-----------
Net increase in net assets from
operations $35,440,880
===========
See notes to financial statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31,
(UNAUDITED) 1994
------------- -------------
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 1,240,593 $ 2,384,023
Net realized gain on investments 6,903,527 8,358,479
Increase (decrease) in unrealized
appreciation of investments 27,296,760 (2,991,174)
------------ ------------
Increase in net assets from operations $ 35,440,880 $ 7,751,328
------------ ------------
Distributions to partners --
From net investment income $ (1,163,284) $ (2,256,662)
------------ ------------
Net decrease from transactions in shares of
partnership interest (Note 2) $ (7,103,003) $ (8,614,936)
------------ ------------
Net increase (decrease) in net assets $ 27,174,593 $ (3,120,270)
NET ASSETS:
At beginning of period 185,418,075 188,538,345
------------ ------------
At end of period (including undistributed
net investment income of $2,973,553 and
$2,896,244, respectively) $212,592,668 $185,418,075
============ ============
See notes to financial statements
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1995 --------------------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, beginning
of period $259.490 $251.710 $246.130 $241.030 $181.960 184.730
-------- -------- -------- -------- -------- --------
INCOME FROM OPERATIONS:
Net investment income $ 1.911 $ 3.406 $ 3.141 $ 3.198 $ 3.743 $ 3.635
Net realized and unrealized gain
(loss) on investments 48.689 7.424 5.599 5.012 58.777 (2.115)
-------- -------- -------- -------- -------- --------
Total income from operations $ 50.600 $ 10.830 $ 8.740 $ 8.210 $ 62.520 $ 1.520
-------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
From net investment income $ (1.650) $ (3.050) $ (3.000) $ (3.050) $ (3.450) $ (3.850)
From net realized gain on investments -- -- (0.160) (0.060) -- (0.440)
-------- -------- -------- -------- -------- --------
Total distributions $ (1.650) $ (3.050) $ (3.160) $ (3.110) $ (3.450) $ (4.290)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, end of period $308.440 $259.490 $251.710 $246.130 $241.030 $181.960
======== ======== ======== ======== ======== ========
TOTAL RETURN (1) 19.59% 4.39% 3.63% 3.50% 34.76% 0.79%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period
(000's omitted) $212,593 $185,418 $188,538 $195,679 $201,607 $161,704
Ratio of expenses to
average net assets 0.73%+ 0.71% 0.71% 0.71% 0.71% 0.76%
Ratio of net investment
income to average net assets 1.26%+ 1.31% 1.22% 1.31% 1.70% 1.93%
PORTFOLIO TURNOVER 1% 3% 3% 5% 7% 7%
(1) Total investment return is calculated assuming a purchase at the net asset value on the first day and a sale at the net
asset value on the last day of each period reported. Dividends and distributions, if any, are assumed to be reinvested
at the net asset value on the payable date. Total return is not computed on an annualized basis.
+ Annualized.
</TABLE>
See notes to financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
--------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
The Fund is a limited partnership formed under The Uniform Limited Partnership
Act of California, and is registered under the Investment Company Act of 1940 as
amended, as a diversified, open-end management investment company. Under the
Partnership Agreement, all partnership interests, whether of a limited partner
or a general partner, are represented by shares of the same class. The following
is a summary of significant accounting policies consistently followed by the
Fund in the preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles.
A. INVESTMENT VALUATIONS -- Investments listed on security exchanges or in the
NASDAQ National Market are valued at closing sale prices. Listed or unlisted
investments for which closing sale prices are not available are valued at
closing bid prices. Short-term obligations, maturing in 60 days or less, are
valued at amortized cost, which approximates value.
B. INCOME TAXES AND DISTRIBUTIONS TO PARTNERS -- No provision is made by the
Fund for federal or state taxes on the taxable income of the partnership because
each partner is individually responsible for the payment of any taxes on his
share of such taxable income. The Managing General Partners will make quarterly
distributions to the partners from the Fund's net investment income and it is
their present intention to distribute each year approximately 30% of any taxable
net realized gain from investment transactions.
C. OTHER -- Investment transactions are accounted for on a trade date basis.
Dividend income and distributions to partners are recorded on the ex-dividend
date.
D. INTERIM FINANCIAL INFORMATION -- The interim financial statements relating to
June 30, 1995 and for the six-month period then ended have not been audited by
independent certified public accountants, but in the opinion of the Fund's
management, reflect all adjustments, consisting only of normal recurring
adjustments, necessary for the fair presentation of the financial statements.
--------------------------------------------------------------------------------
(2) SHARES OF PARTNERSHIP INTEREST
Transactions in shares of partnership interest were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1995
(UNAUDITED) YEAR ENDED DECEMBER 31, 1994
-------------------------------------- ----------------------------------------
SHARES SHARES
---------------------- ------------------------
GENERAL LIMITED GENERAL LIMITED
PARTNERS PARTNERS AMOUNT PARTNERS PARTNERS AMOUNT
---------- -------- ------------ ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Redemptions -- (25,776) $(7,230,462) -- (35,476) $(8,859,649)
Issued to partners electing
to receive payment of
distributions in shares 56 418 127,459 114 894 244,713
----- ------- ----------- ----- ------- -----------
Net increase (decrease) 56 (25,358) $(7,103,003) 114 (34,582) $(8,614,936)
===== ======= =========== ===== ======= ===========
</TABLE>
--------------------------------------------------------------------------------
(3) INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than short-term obligations,
aggregated $25,679 and $1,417,932, respectively. In addition, investments having
an aggregate market value of $7,705,041 at dates of redemption were distributed
in payment for shares of partnership interest redeemed.
--------------------------------------------------------------------------------
(4) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILITATES
The investment adviser fee, computed at the monthly rate of 0.05 of 1% (1/12 of
an annual rate of 0.6 of 1%) of average monthly net assets, was paid to Eaton
Vance Management (EVM) as compensation for management and investment adivsory
services rendered to the Fund. The Fund pays the compensation of its Managing
General Parners who are not members of EVM's organization. The custodian fee was
paid to Investors Bank & Trust Company (IBT), an affiliate of EVM, for its
services as custodian of the Fund. Pursuant to the custodian agreement, IBT
receives a fee reduced by credits which are determined based on the average
daily cash balances the Fund maintains with IBT. One of the Managing General
Partners of the Fund is an officer and trustee of EVM and that organization is
the Non-Managing General Partner of the Fund. Managing General Partners of the
Fund that are not affiliated with the investment advisor 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 six months ended June 30,
1995, no significant amounts have been deferred.
--------------------------------------------------------------------------------
(5) LINE OF CREDIT
The Fund participates with other funds managed by EVM in a $120 million
unsecured line of credit agreement with a bank. The line of credit consists of a
$20 million committed facility and a $100 million discretionary facility.
Borrowings will be made by the Fund solely to facilitate the handling of unusual
and/or unanticipated short-term cash requirements. Interest is charged to each
fund based on its borrowings at an amount above either the bank's adjusted
certificate of deposit rate, a variable certificate of deposit rate, or a
federal funds effective rate. In addition, a fee computed at an annual rate of
1/4 of 1% on the $20 million committed facility and the unused portion of the
$100 million discretionary facility is allocated among the participating funds
at the end of each quarter. The Fund did not have any significant borrowings or
allocated fees during the period.
-------------------------------------------------------------------------------
(6) FEDERAL INCOME TAX BASIS OF INVESTMENTS
The cost and unrealized appreciation/depreciation in value of the investments
owned at June 30, 1995, as computed on a federal income tax basis, are as
follows:
Aggregate cost $ 40,487,282
============
Gross unrealized appreciation $172,175,945
Gross unrealized depreciation 227,501
------------
Net unrealized appreciation $171,948,444
============
--------------------------------------------------------------------------------
(7) DISTRIBUTION
On June 19, 1995, the Managing General Partners of the Fund declared a
distribution from net investment income of $0.90 per share, payable on July 17,
1995, to holders of shares of record on July 3, 1995.
--------------------------------------------------------------------------------
(8) SHAREHOLDER MEETING
Vance, Sanders Exchange Fund (the Fund) held its annual meeting of Partners on
April 5, 1995. On February 23, 1995, the record date of the meeting, the Fund
had 708,033.027 shares outstanding, of which 501,846.875 shares were represented
at the meeting. The votes cast at the meeting were as follows:
Item 1: The election of Landon T. Clay, Donald R. Dwight, Samuel L. Hayes,
III, Norton H. Reamer, John L. Thorndike and Jack L. Treynor as
Managing General Partners of the Fund.
The election of Eaton Vance Management as Non-Managing General Partner of the
Fund.
NUMBER OF SHARES
NOMINEES FOR -------------------------------
MANAGING GENERAL PARTNER AFFIRMATIVE WITHHELD
------------------------ ----------- --------
Landon T. Clay 496,941.301 4,905.574
Donald R. Dwight 496,941.301 4,905.574
Samuel L. Hayes, III 496,941.301 4,905.574
Norton H. Reamer 496,941.301 4,905.574
John L. Thorndike 496,941.301 4,905.574
Jack L. Treynor 496,941.301 4,905.574
NOMINEE FOR
NON-MANAGING GENERAL PARTNER
----------------------------
Eaton Vance Management 496,941.301 4,905.574
Item 2: The ratification of the selection of Deloitte & Touche LLP as
independent certified public accountants to the Fund.
NUMBER OF SHARES
----------------
Affirmative 490,964.730
Against 10,168.664
Abstain 713.481
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT MANAGEMENT
<S> <C> <C>
VANCE, SANDERS OFFICERS MANAGING GENERAL PARTNERS
EXCHANGE FUND THOMAS E. FAUST, JR. LANDON T. CLAY
(A California Vice President and Chairman, Eaton Vance
Limited Partnership) Portfolio Manager Management
24 Federal Street JAMES L. O'CONNOR DONALD R. DWIGHT
Boston, MA 02110 Treasurer President, Dwight Partners, Inc.
THOMAS OTIS Chairman, Newspapers of
Secretary New England, Inc.
SAMUEL L. HAYES, III
Jacob H. Schiff Professor of
Investment Banking, Harvard
University Graduate School of
Business Administration
NORTON H. REAMER
President and Director, United
Asset Management Corporation
JOHN L. THORNDIKE
Director, Fiduciary Company
Incorporated
JACK L. TREYNOR
Investment Adviser and
Consultant
------------------------------------------------------------------------
VANCE, SANDERS TRANSFER AND DIVIDEND
EXCHANGE FUND DISBURSING AGENT
24 Federal Street The Shareholder
Boston, MA 02110 Services Group, Inc.
INVESTMENT ADVISER BOS725
Eaton Vance Management P.O. Box 1559
24 Federal Street Boston, MA 02104
Boston, MA 02110 800-262-1122
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
</TABLE>
<PAGE>
VANCE, SANDERS
EXCHANGE FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
PERFORMANCE RESULTS(+)
------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
(STANDARDIZED SEC PERFORMANCE DATA
FOR THE PERIODS ENDED JUNE 30, 1995)
------------------------------------------------------------------------------
One year 31.96%
------------------------------------------------------------------------------
Five years 10.98%
------------------------------------------------------------------------------
Ten years 13.39%
------------------------------------------------------------------------------
Life of Fund (6/1/76) 13.11%
------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN
LIFE OF FUND
(6/1/76 TO 6/30/95)
------------------------------------------------------------------------------
Vance, Sanders Exchange Fund 950.23%
------------------------------------------------------------------------------
Dow Jones Industrial Average 985.74%
------------------------------------------------------------------------------
Standard & Poor's 500 1082.71%
------------------------------------------------------------------------------
(+) Past performance is no guarantee of future results. Investment returns and
principal will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
The Dow Jones Industrial Average and the Standard & Poor's 500 are unmanaged
lists of common stocks.
This report must be preceded or accompanied by a prospectus which contains more
complete information on the Fund including its distribution plan, sales charge
and expenses. Please read the prospectus carefully before investing.
VANCE, SANDERS
EXCHANGE FUND
An Eaton Vance
Exchange Fund
Semi-Annual Report
June 30, 1995
EATON VANCE
The Boston Tradition
24 Federal Street, Boston, Massachusetts 02110
