<PAGE>
Worldwide Health Sciences Portfolio as of August 31, 1997
PORTFOLIO OF INVESTMENTS
Common Stocks and Warrants -- 94.02%
<TABLE>
<CAPTION>
Percentage of
Security Shares Value Net Assets
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Major Capitalization - Europe -- 11.45%
- --------------------------------------------------------------------------------
Altana 55,000 $ 4,123,477 2.70%
Ares-Serono 4,000 6,233,417 4.08%
Novartis 5,000 7,122,586 4.67%
- --------------------------------------------------------------------------------
$ 17,479,480 11.45%
- --------------------------------------------------------------------------------
Major Capitalization - Far East -- 15.39%
- --------------------------------------------------------------------------------
Banyu Pharmaceutical Co. 300,000 $ 5,011,371 3.28%
Eisai Co., Ltd. 250,000 4,734,339 3.10%
Fujisawa Pharmaceutical 600,000 5,805,251 3.80%
Sankyo Co., Ltd. 140,000 4,237,337 2.78%
Takeda Chemical Industries 140,000 3,716,353 2.43%
- --------------------------------------------------------------------------------
$ 23,504,651 15.39%
- --------------------------------------------------------------------------------
Major Capitalization - North America -- 20.36%
- --------------------------------------------------------------------------------
Biogen, Inc./(a)/ 150,000 $ 5,906,250 3.87%
Centocor, Inc./(a)/ 200,000 8,975,000 5.88%
Genzyme Corp./(a)/ 250,000 7,031,250 4.60%
Pharmacia & Upjohn,
Inc./(a)/ 150,000 5,109,375 3.35%
Warner-Lambert Co. 32,000 4,066,000 2.66%
- --------------------------------------------------------------------------------
$ 31,087,875 20.36%
- --------------------------------------------------------------------------------
Specialty Capitalization - Europe -- 6.83%
- --------------------------------------------------------------------------------
Cambridge Antibody
Technology, Ltd. 307,040 $ 2,414,647 1.58%
Cambridge Antibody
Technology, Ltd. -
Warrants(a) 15,500 44,185 0.03%
Celltech Group, PLC/(a)/ 225,000 1,003,303 0.66%
Ethical Holdings ADR/(a)/ 150,000 712,500 0.46%
Swiss Serum Institute/(a)/ 420 6,262,972 4.10%
- --------------------------------------------------------------------------------
$ 10,437,607 6.83%
- --------------------------------------------------------------------------------
Specialty Capitalization - Far East -- 6.53%
- --------------------------------------------------------------------------------
Amrad Corp., Ltd./(a)/ 1,110,658 $ 2,081,792 1.36%
Biota Holdings, Ltd./(a)/ 644,640 2,037,523 1.33%
Biota Holdings, Ltd. -
Warrants/(a)/ 78,738 163,443 0.11%
Rohto Pharmaceutical 300,000 2,853,008 1.87%
Teikoku Hormone
Manufacturing 350,000 2,836,469 1.86%
- --------------------------------------------------------------------------------
$ 9,972,235 6.53%
- --------------------------------------------------------------------------------
Specialty Capitalization - North America-- 33.46%
- --------------------------------------------------------------------------------
Agouron Pharmaceuticals,
Inc./(a)/ 130,000 $ 5,720,000 3.75%
Alexion Pharmaceuticals,
Inc./(a)/ 270,000 2,970,000 1.94%
Arris Pharmaceutical
Corp./(a)/ 250,000 3,406,250 2.23%
Aviron 125,000 3,125,000 2.05%
CytoTherapeutics, Inc./(a)/ 120,000 645,000 0.42%
Gilead Sciences, Inc./(a)/ 80,000 2,590,000 1.70%
Immunex Corp./(a)/ 100,000 4,375,000 2.86%
Incyte Pharmaceuticals,
Inc./(a)/ 60,000 3,630,000 2.38%
Isis Pharmaceuticals,
Inc./(a)/ 150,000 2,259,375 1.48%
Leukosite, Inc./(a)/ 175,000 1,060,938 0.69%
Millennium
Pharmaceuticals/(a)/ 225,000 3,037,500 1.99%
Neurocrine BioScience, Inc. 130,000 1,056,250 0.69%
Ontogeny, Inc./(b)/ 600,000 1,500,000 0.98%
Pharmacopeia, Inc./(a)/ 215,000 3,386,250 2.22%
Premier Research Worldwide 235,000 1,953,438 1.28%
SangStat Medical Corp./(a)/ 125,000 2,875,000 1.88%
Sequana Therapeutics,
Inc./(a)/ 50,000 543,750 0.36%
Tularik, Inc./(b)(a)/ 80,000 800,000 0.52%
Vertex Pharmaceuticals,
Inc./(a)/ 180,000 6,165,000 4.04%
- --------------------------------------------------------------------------------
$ 51,098,751 33.46%
- --------------------------------------------------------------------------------
Total Common Stocks and Warrants
(identified cost $121,559,390) $143,580,599
- --------------------------------------------------------------------------------
Total Investments
(identified cost $121,559,390) $143,580,599 94.02%
- --------------------------------------------------------------------------------
Other Assets, Less Liabilities $ 9,136,389 5.98%
- --------------------------------------------------------------------------------
Net Assets $152,716,988 100.00%
- --------------------------------------------------------------------------------
</TABLE>
/(a)/ Non-income producing security.
/(b)/ Restricted Security (Note 7)
See notes to financial statements
13
<PAGE>
Worldwide Health Sciences Portfolio as of August 31, 1997
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
As of August 31, 1997
Assets
- --------------------------------------------------------------------------
<S> <C>
Investments, at value (Note 1A)
(identified cost basis $121,559,390) $143,580,599
Cash 9,142,727
Dividends receivable 12,160
Deferred organization expenses (Note 1E) 10,641
- --------------------------------------------------------------------------
Total assets $152,746,127
- --------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------
Payable to affiliate for Trustees' fees (Note 2) $ 2,842
Accrued expenses 26,297
- --------------------------------------------------------------------------
Total liabilities $ 29,139
- --------------------------------------------------------------------------
Net Assets applicable to investors' interest in Portfolio $152,716,988
- --------------------------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------------------------
Net proceeds from capital contributions and withdrawals $130,695,779
Net unrealized appreciation of investments (computed
on the basis of identified cost) 22,021,209
- --------------------------------------------------------------------------
Total $152,716,988
- --------------------------------------------------------------------------
Statement of Operations
For the Year Ended
August 31, 1997
Investment Income
- --------------------------------------------------------------------------
Dividends (net of foreign taxes, $77,443) $ 339,253
- --------------------------------------------------------------------------
Total income $ 339,253
- --------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------
Investment adviser fee (Note 2) $ 800,167
Administration fee (Note 2) 231,722
Compensation of Trustees not members of the
Administrator's organization (Note 2) 8,019
Custodian fee (Note 1D) 66,262
Legal and accounting services 39,057
Registration fees 10,465
Amortization of organization expenses (Note 1E) 2,590
Miscellaneous 2,553
- --------------------------------------------------------------------------
Total expenses $ 1,160,835
- --------------------------------------------------------------------------
Deduct --
Reduction of custodian fee (Note 1D) $ 64,632
- --------------------------------------------------------------------------
Total expense reductions $ 64,632
- --------------------------------------------------------------------------
Net expenses $ 1,096,203
- --------------------------------------------------------------------------
Net investment loss $ (756,950)
- --------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) on Investments
- --------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 1,764,064
Foreign currency transactions 42,629
- --------------------------------------------------------------------------
Net realized gain on investments $ 1,806,693
- --------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ 22,021,209
- --------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)
of investments $ 22,021,209
- --------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 23,827,902
- --------------------------------------------------------------------------
Net increase in net assets from operations $ 23,070,952
- --------------------------------------------------------------------------
</TABLE>
See notes to financial statements
14
<PAGE>
Worldwide Health Sciences Portfolio as of August 31, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Increase (Decrease) Year Ended
in Net Assets August 31, 1997
- --------------------------------------------------------------------------
<S> <C>
From operations --
Net investment loss $ (756,950)
Net realized gain on investments 1,806,693
Net change in unrealized appreciation (depreciation) 22,021,209
- --------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 23,070,952
- --------------------------------------------------------------------------
Capital transactions --
Contributions $160,659,674
Withdrawals (31,113,638)
- --------------------------------------------------------------------------
Net increase in net assets resulting from
capital transactions $129,546,036
- --------------------------------------------------------------------------
Net increase in net assets $152,616,988
- --------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------
At beginning of year $ 100,000
- --------------------------------------------------------------------------
At end of year $152,716,988
- --------------------------------------------------------------------------
</TABLE>
See notes to financial statements
15
<PAGE>
Worldwide Health Sciences Portfolio as of August 31, 1997
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Year Ended
August 31, 1997
- --------------------------------------------------------------------------------
<S> <C>
Ratios to average daily net assets
- --------------------------------------------------------------------------------
Expenses 1.25%
Net expenses, after custodian fee reduction 1.18%
Net investment loss (0.81)%
Portfolio Turnover 14%
- --------------------------------------------------------------------------------
Average commission rate (per share)/(1)/ $ 0.0438
- --------------------------------------------------------------------------------
Net assets, end of year (000s omitted) $152,717
- --------------------------------------------------------------------------------
</TABLE>
/(1)/Average commission rate paid is computed by dividing the total dollar
amount of commissions paid during the fiscal year by the total number of
shares purchased and sold during the fiscal year for which commissions were
charged.
See notes to financial statements
16
<PAGE>
Worldwide Health Sciences Portfolio as of August 31, 1997
NOTES TO FINANCIAL STATEMENTS
1 Significant Accounting Policies
----------------------------------------------------------------------------
Worldwide Health Sciences Portfolio (the Portfolio) is registered under the
Investment Company Act of 1940 as a diversified, open-end management
investment company which was organized as a trust under the laws of the
State of New York on March 26, 1996. The Declaration of the Trust permits
the Trustees to issue interests in the Portfolio. Investment operations
began on September 1, 1996, with the acquisition of securities with a value
of $51,528,696, including unrealized appreciation of $9,053,201, in exchange
for an interest in the Portfolio by one of the Portfolio's investors. 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 -- Securities listed on a recognized stock exchange,
whether U.S. or foreign, are valued at the last reported sale price on that
exchange prior to the time when assets are valued or prior to the close of
trading on the New York Stock exchange. In the event that there are no
sales, the last available sale price will be used. If a security is traded
on more than one exchange, the security is valued at the last sale price on
the exchange where the stock is primarily traded. Securities for which
market quotations are not readily available and other assets are valued on a
consistent basis at fair value as determined in good faith by or under the
supervision of the Portfolio's officers in a manner specifically authorized
by the Board of Trustees.
B Income -- Dividend income is recorded on the ex-dividend date, except that
certain dividends from foreign securities are recorded on the ex-dividend
date or as soon thereafter as the Portfolio is informed of the dividend.
C Federal Taxes -- The Portfolio has elected to be treated as a partnership
for Federal tax purposes. No provision is made by the Portfolio for federal
or state taxes on any taxable income of the Portfolio because each investor
in the Portfolio is ultimately responsible for the payment of any taxes.
Since some of the Portfolio's investors are regulated investment companies
that invest all or substantially all of their assets in the Portfolio, the
Portfolio must satisfy the applicable source of income and diversification
requirement, (under the Code) in order for its investors to satisfy them.
The Portfolio will allocate at least annually among its investors each
investors' distributive share of the Portfolio's net investment income, net
realized capital gains, and any other items of income, gain, loss, deduction
or credit.
D Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian of the Portfolio. Pursuant to the custodian agreement, IBT
receives a fee reduced by the credits which are determined based on the
average daily cash balances the Portfolio maintains with IBT. All
significant credit balances used to reduce the Portfolio's custodian fees
are reflected as a reduction of operating expense on the Statement of
Operations.
E Deferred Organization Expenses -- Costs incurred by the Portfolio in
connection with its organization are being amortized on the straight-line
basis over five years.
F Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expense during the reporting period. Actual results could
differ from those estimates.
G Foreign Currency Translation -- Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases
and sales of foreign investment securities and income and expenses are
converted into U.S. dollars based upon currency exchange rates prevailing on
the respective dates of such transactions. Recognized gains or losses on
investment transactions attributable to foreign currency rates are recorded
for financial statement purposes as net realized gains and losses on
investments. That portion of unrealized gains and losses on investments that
result from fluctuations in foreign currency exchange rates are not
separately disclosed.
H Forward Foreign Currency Exchange Contracts -- The Portfolio may enter
into forward foreign currency exchange contracts for the purchase or sale of
a specific foreign currency at a fixed price on a future date. Risks may
arise upon entering these contracts from the potential inability of
counterparties to meet the terms of their contracts and from movements in
the value of a foreign currency relative to the U.S. dollar. The Portfolio
will enter into forward contracts for hedging purposes as well as nonhedging
purposes. The forward foreign currency exchange contracts are adjusted by
the daily exchange rate of the underlying currency and any gains and losses
are recorded for financial statement purposes as unrealized until such time
as the contracts have been closed.
<PAGE>
Worldwide Health Sciences Portfolio as of August 31, 1997
NOTES TO FINANCIAL STATEMENTS CONT'D
I Other -- Investment transactions are accounted for on a trade date basis.
2 Investment Advisory Fees, Administrator's Fees and Other Transactions with
Affiliates
---------------------------------------------------------------------------
Pursuant to the Advisory Agreement, Mehta and Isaly Asset Management, Inc.
("M&I") serve as the Investment Adviser of the Portfolio. Under this
agreement M&I received a monthly fee at the annual rate of 1% of the
Portfolio's first $30 million in average net assets, 0.90% of the next $20
million in average net assets, and 0.75% of average net assets in excess of
$50 million. The fee rate declines for net assets of $500 million and
greater. Beginning September 1, 1997, M&I may receive a performance based
adjustment of up to 0.25% of the average daily net assets of the Portfolio
based upon the investment performance of the Portfolio compared to the
Standard & Poor's Index of 500 Common Stocks over specified periods. For the
year ended August 31, 1997, the fee was equivalent to 0.86% of the
Portfolio's average daily net assets and amounted to $800,167.
Under an Administration Agreement between the Portfolio and its
Administrator, Eaton Vance Management (EVM), EVM manages and administers
the affairs of the Portfolio. 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, 1997, the administration
fee was 0.25% of average net assets.
Except as to Trustees of the Portfolio who are not members of the Adviser or
EVM's organization, officers and Trustees receive remuneration for their
services to the Portfolio out of such investment adviser and administrative
fees. Certain officers and Trustees of the Portfolio are also officers or
directors/trustees of the above organizations. Trustees of the Portfolio
that are not affiliated with the Investment Adviser may elect to defer
receipt of all or a portion of their annual fees in accordance with the
terms of the Trustee Deferred Compensation Plan. For the year ended August
31, 1997, no significant amounts have been deferred.
3 Investments
----------------------------------------------------------------------------
Purchases and sales of investments other than U.S. Government securities and
short-term obligations aggregated $89,798,719 and $12,478,888, respectively.
4 Federal Income Tax Basis of Investments
----------------------------------------------------------------------------
The cost and unrealized appreciation/depreciation in value of the
investments owned at August 31, 1997, as computed on a federal income tax
basis, were as follows:
<TABLE>
<CAPTION>
<S> <C>
Aggregate cost $121,559,390
----------------------------------------------------------------------------
Gross unrealized appreciation $ 28,413,965
Gross unrealized depreciation (6,392,756)
----------------------------------------------------------------------------
Net unrealized appreciation $ 22,021,209
----------------------------------------------------------------------------
</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.
18
<PAGE>
Worldwide Health Sciences Portfolio as of August 31, 1997
NOTES TO FINANCIAL STATEMENTS CONT'D
6 Line of Credit
----------------------------------------------------------------------------
The Portfolio participates with other portfolios and funds managed by EVM
and its affiliates in a committed $120 million unsecured line of credit
agreement with a group of banks. Borrowings will be made by the Portfolios
and funds 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 the bank's base rate or at an amount above either
the bank's adjusted certificate of deposit rate, Eurodollar rate or federal
funds effective rate. In addition, a fee computed at an annual rate of 0.15%
on the daily unused portion of the facility is allocated among the
participating portfolios and funds at the end of each quarter. The Portfolio
did not have any significant borrowings or allocated fees during the year
ended August 31, 1997.
7 Restricted Securities
----------------------------------------------------------------------------
At August 31, 1997, the Portfolio owned the following securities
(representing 1.51% of net assets) which were restricted as to public resale
and not registered under the Securities Act of 1933. The Portfolio has
various registration rights (exercisable under a variety of circumstances)
with respect to these securities. The fair value of these securities is
determined based on valuations provided by brokers when available, or if not
available, they are valued at fair value using methods determined in good
faith by or at the direction of the Trustees.
<TABLE>
<CAPTION>
Date of
Description Acquisition Shares/Face Cost Fair Value
---------------------------------------------------------------------------
Common Stocks
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ontogeny, Inc. 3/13/97 600,000 $1,500,000 $1,500,000
Tularik, Inc. 10/14/96 80,000 800,000 800,000
---------------------------------------------------------------------------
$2,300,000 $2,300,000
---------------------------------------------------------------------------
</TABLE>
19
<PAGE>
Worldwide Health Sciences Portfolio as of August 31, 1997
INDEPENDENT ACCOUNTANTS' REPORT
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Worldwide Health Sciences Portfolio as of
August 31, 1997, and the related statement of operations, the statement of
changes in net assets and the supplementary data for the year ended August 31,
1997. These financial statements and supplementary data are the responsibility
of the Portfolio's management. Our responsibility is to express an opinion on
these financial statements and supplementary data based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and supplementary data are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of the securities owned at August 31, 1997 by
correspondence with the custodian and brokers. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and supplementary data present fairly,
in all material respects, the financial position of Worldwide Health Sciences
Portfolio at August 31, 1997, the results of its operations, the changes in its
net assets and supplementary data for the year then ended, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND
Chartered Accountants
Toronto, Ontario
October 3, 1997
20
<PAGE>
Worldwide Health Sciences Portfolio as of August 31, 1997
INVESTMENT MANAGEMENT
<TABLE>
<CAPTION>
Worldwide Health Sciences Portfolio
<S> <C>
Officers Independent Trustees
James B. Hawkes Donald R. Dwight
President and Trustee President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
Samuel D. Isaly
Vice President and Samuel L. Hayes, III
Portfolio Manager Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate School of
James L. O'Connor Business Administration
Treasurer
Norton H. Reamer
Alan R. Dynner President and Director, United Asset
Secretary Management Corporation
Viren Mehta John L. Thorndike
Vice President Former Director, Fiduciary Company Incorporated
William Chisholm Jack L. Treynor
Vice President Investment Adviser and Consultant
Raymond O'Neill
Vice President
Michael Normandeau
Vice President
</TABLE>
21
