<PAGE>
CAPITAL GROWTH PORTFOLIO AS OF JUNE 30, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED)
COMMON STOCKS -- 92.8%
<TABLE>
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
-----------------------------------------------------------------------
Advertising and Marketing Services -- 1.1%
-----------------------------------------------------------------------
Interact Commerce Corp.(1) 175,500 $ 2,073,094
-----------------------------------------------------------------------
$ 2,073,094
-----------------------------------------------------------------------
Aerospace and Defense -- 1.8%
-----------------------------------------------------------------------
BE Aerospace, Inc.(1) 40,000 $ 275,000
Boeing Company (The) 66,000 2,759,625
Hexcel Corp.(1) 20,000 190,000
-----------------------------------------------------------------------
$ 3,224,625
-----------------------------------------------------------------------
Apparel -- 1.0%
-----------------------------------------------------------------------
Reebok International Ltd.(1) 117,000 $ 1,864,687
-----------------------------------------------------------------------
$ 1,864,687
-----------------------------------------------------------------------
Banks and Money Services -- 3.6%
-----------------------------------------------------------------------
Citigroup 40,000 $ 2,410,000
Metris Companies, Inc. 167,501 4,208,450
-----------------------------------------------------------------------
$ 6,618,450
-----------------------------------------------------------------------
Batteries -- 1.0%
-----------------------------------------------------------------------
Energizer Holdings, Inc.(1) 100,000 $ 1,825,000
-----------------------------------------------------------------------
$ 1,825,000
-----------------------------------------------------------------------
Beverages -- 0.6%
-----------------------------------------------------------------------
Seagrams Co. Ltd. 17,500 $ 1,015,000
-----------------------------------------------------------------------
$ 1,015,000
-----------------------------------------------------------------------
Broadcasting and Cable -- 0.6%
-----------------------------------------------------------------------
Radio One, Inc.(1) 15,000 $ 443,437
Radio One, Inc., Class D(1) 30,000 661,875
-----------------------------------------------------------------------
$ 1,105,312
-----------------------------------------------------------------------
Business Products and Services -- 0.3%
-----------------------------------------------------------------------
Ceridian Corp.(1) 25,000 $ 601,562
-----------------------------------------------------------------------
$ 601,562
-----------------------------------------------------------------------
Business Services - Miscellaneous -- 3.9%
-----------------------------------------------------------------------
Complete Business Solutions, Inc.(1) 132,000 $ 2,318,250
Critical Path, Inc.(1) 15,000 874,687
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
-----------------------------------------------------------------------
Business Services - Miscellaneous (continued)
-----------------------------------------------------------------------
Forrester Research, Inc.(1) 2,200 $ 160,187
Heidrick and Struggles International,
Inc.(1) 27,500 1,735,937
Manpower, Inc. 1,000 32,000
Thermo Cardiosystems, Inc.(1) 200,000 2,000,000
-----------------------------------------------------------------------
$ 7,121,061
-----------------------------------------------------------------------
Communications Equipment -- 0.3%
-----------------------------------------------------------------------
ECI Telecom, Ltd. 14,800 $ 529,100
-----------------------------------------------------------------------
$ 529,100
-----------------------------------------------------------------------
Communications Services -- 1.5%
-----------------------------------------------------------------------
ALLTEL Corp. 15,000 $ 929,062
BellSouth Corp. 30,000 1,278,750
Winstar Communications, Inc.(1) 15,000 508,125
-----------------------------------------------------------------------
$ 2,715,937
-----------------------------------------------------------------------
Computer Equipment -- 3.5%
-----------------------------------------------------------------------
Brocade Communications Systems, Inc.(1) 20,000 $ 3,669,688
Clarent Corp.(1) 10,000 715,000
Emulex Corp.(1) 30,000 1,970,625
-----------------------------------------------------------------------
$ 6,355,313
-----------------------------------------------------------------------
Computer Services -- 5.3%
-----------------------------------------------------------------------
Concord EFS, Inc.(1) 212,500 $ 5,525,000
ePresence, Inc.(1) 5,000 36,250
iGATE Capital Corp.(1) 20,000 275,000
Profit Recovery Group International,
Inc.(1) 121,500 2,019,938
SunGard Data Systems, Inc.(1) 60,000 1,860,000
-----------------------------------------------------------------------
$ 9,716,188
-----------------------------------------------------------------------
Computer Software -- 2.3%
-----------------------------------------------------------------------
BindView Development Corp.(1) 50,000 $ 600,000
Intuit, Inc.(1) 1,000 41,375
Mercury Interactive Corp.(1) 10,000 967,500
Microsoft Corp.(1) 10,000 800,000
Pinnacle Systems, Inc.(1) 25,000 562,110
Project Software and Development,
Inc.(1) 60,000 1,080,000
Software.com, Inc.(1) 500 64,938
-----------------------------------------------------------------------
$ 4,115,923
-----------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
CAPITAL GROWTH PORTFOLIO AS OF JUNE 30, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
-----------------------------------------------------------------------
Computers and Business Equipment -- 1.2%
-----------------------------------------------------------------------
Dell Computer Corp.(1) 8,000 $ 394,500
Insight Enterprises, Inc.(1) 30,000 1,779,375
-----------------------------------------------------------------------
$ 2,173,875
-----------------------------------------------------------------------
Distribution -- 8.5%
-----------------------------------------------------------------------
AmeriSource Health Corp., Class A(1) 48,049 $ 1,489,519
Cardinal Health, Inc. 78,426 5,803,524
Tech Data Corp.(1) 190,000 8,276,875
-----------------------------------------------------------------------
$ 15,569,918
-----------------------------------------------------------------------
Drugs -- 5.4%
-----------------------------------------------------------------------
Alpharma, Inc. 59,556 $ 3,707,361
Elan Corp., PLC ADR(1) 32,000 1,550,000
Lilly (Eli) & Co. 15,000 1,498,125
Teva Pharmaceutical Industries Ltd. 55,834 3,095,297
-----------------------------------------------------------------------
$ 9,850,783
-----------------------------------------------------------------------
Electrical Equipment -- 1.2%
-----------------------------------------------------------------------
C&D Technology, Inc. 40,000 $ 2,260,000
-----------------------------------------------------------------------
$ 2,260,000
-----------------------------------------------------------------------
Electronic Components - Instruments -- 1.0%
-----------------------------------------------------------------------
C-MAC Industries, Inc. 20,000 $ 944,880
Keithley Instruments, Inc. 10,000 871,250
-----------------------------------------------------------------------
$ 1,816,130
-----------------------------------------------------------------------
Electronics - Instruments -- 1.1%
-----------------------------------------------------------------------
Credence Systems Corp.(1) 30,000 $ 1,655,625
Mechanical Technology, Inc.(1) 21,000 315,000
-----------------------------------------------------------------------
$ 1,970,625
-----------------------------------------------------------------------
Electronics - Semiconductors -- 7.1%
-----------------------------------------------------------------------
Advanced Micro Devices, Inc.(1) 40,000 $ 3,090,000
Analog Devices, Inc.(1) 20,000 1,520,000
Cirrus Logic, Inc.(1) 50,000 800,000
Conexant Systems(1) 40,000 1,945,000
Micron Technology, Inc.(1) 37,000 3,258,313
National Semiconductor Corp.(1) 10,000 567,500
SanDisk Corp.(1) 30,000 1,835,625
-----------------------------------------------------------------------
$ 13,016,438
-----------------------------------------------------------------------
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
-----------------------------------------------------------------------
Financial - Miscellaneous -- 0.6%
-----------------------------------------------------------------------
MGIC Investment Corp. 25,000 $ 1,137,500
-----------------------------------------------------------------------
$ 1,137,500
-----------------------------------------------------------------------
Financial Services - Miscellaneous -- 2.2%
-----------------------------------------------------------------------
Finova Group, Inc. 100,000 $ 1,300,000
Providian Financial Corp. 30,000 2,700,000
-----------------------------------------------------------------------
$ 4,000,000
-----------------------------------------------------------------------
Foods -- 4.1%
-----------------------------------------------------------------------
Nabisco Holdings Corp. 286,000 $ 7,418,125
-----------------------------------------------------------------------
$ 7,418,125
-----------------------------------------------------------------------
Gaming -- 0.2%
-----------------------------------------------------------------------
Penn National Gaming Inc.(1) 22,700 $ 309,288
-----------------------------------------------------------------------
$ 309,288
-----------------------------------------------------------------------
Health Services -- 2.3%
-----------------------------------------------------------------------
Caremark Rx, Inc.(1) 150,000 $ 1,021,875
Express Scripts, Inc.(1) 22,000 1,366,750
MedQuist, Inc.(1) 55,000 1,870,000
-----------------------------------------------------------------------
$ 4,258,625
-----------------------------------------------------------------------
Information Services -- 0.5%
-----------------------------------------------------------------------
Cambridge Technology Partners, Inc.(1) 101,250 $ 882,779
Lante Corp.(1) 50 1,022
-----------------------------------------------------------------------
$ 883,801
-----------------------------------------------------------------------
Insurance -- 0.8%
-----------------------------------------------------------------------
Aetna, Inc. 5,000 $ 320,938
Oxford Health Plans, Inc.(1) 20,000 476,250
Progressive Corp. 10,000 740,000
-----------------------------------------------------------------------
$ 1,537,188
-----------------------------------------------------------------------
Investment Services -- 0.0%
-----------------------------------------------------------------------
Savvis Communications Corp.(1) 50 $ 653
-----------------------------------------------------------------------
$ 653
-----------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
CAPITAL GROWTH PORTFOLIO AS OF JUNE 30, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
-----------------------------------------------------------------------
Medical Products -- 0.7%
-----------------------------------------------------------------------
Novoste Corp.(1) 20,000 $ 1,220,000
-----------------------------------------------------------------------
$ 1,220,000
-----------------------------------------------------------------------
Metals - Industrial -- 3.5%
-----------------------------------------------------------------------
Precision Castparts Corp. 132,000 $ 5,973,000
RTI International Metals, Inc.(1) 40,000 455,000
-----------------------------------------------------------------------
$ 6,428,000
-----------------------------------------------------------------------
Oil and Gas - Equipment and Services -- 7.0%
-----------------------------------------------------------------------
Baker Hughes, Inc. 85,000 $ 2,720,000
Halliburton Co. 48,000 2,265,000
Precision Drilling Corp. 200,000 7,725,000
-----------------------------------------------------------------------
$ 12,710,000
-----------------------------------------------------------------------
Oil and Gas - Exploration and Production -- 1.1%
-----------------------------------------------------------------------
Enron Corp. 30,000 $ 1,935,000
-----------------------------------------------------------------------
$ 1,935,000
-----------------------------------------------------------------------
Optical Components -- 0.6%
-----------------------------------------------------------------------
Avanex Corp.(1) 100 $ 9,550
Corning, Inc. 3,000 809,625
MRV Communications, Inc.(1) 5,000 336,250
-----------------------------------------------------------------------
$ 1,155,425
-----------------------------------------------------------------------
Pharmaceuticals - Generic -- 1.8%
-----------------------------------------------------------------------
Alza Corp.(1) 54,324 $ 3,211,907
-----------------------------------------------------------------------
$ 3,211,907
-----------------------------------------------------------------------
Printing and Business Products -- 0.5%
-----------------------------------------------------------------------
Electronics for Imaging(1) 34,000 $ 860,625
-----------------------------------------------------------------------
$ 860,625
-----------------------------------------------------------------------
Publishing -- 1.0%
-----------------------------------------------------------------------
McGraw-Hill Cos., Inc. (The) 10,000 $ 540,000
Playboy Enterprises, Inc.(1) 100,000 1,287,500
-----------------------------------------------------------------------
$ 1,827,500
-----------------------------------------------------------------------
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
-----------------------------------------------------------------------
Retail -- 2.2%
-----------------------------------------------------------------------
Hollywood Entertainment Corp.(1) 520,000 $ 4,095,000
-----------------------------------------------------------------------
$ 4,095,000
-----------------------------------------------------------------------
Semiconductor Equipment -- 1.4%
-----------------------------------------------------------------------
Electro Scientific Industries, Inc.(1) 2,500 $ 110,078
Varian Semiconductor Equipment
Associates, Inc.(1) 38,500 2,418,281
-----------------------------------------------------------------------
$ 2,528,359
-----------------------------------------------------------------------
Semiconductors -- 3.5%
-----------------------------------------------------------------------
Actel Corp.(1) 57,500 $ 2,623,438
AudioCodes Ltd.(1) 20,500 2,460,000
Galileo Technology Ltd.(1) 60,000 1,290,000
-----------------------------------------------------------------------
$ 6,373,438
-----------------------------------------------------------------------
Telecommunication Equipment -- 0.8%
-----------------------------------------------------------------------
Accelerated Networks, Inc.(1) 3,350 $ 141,328
Alcatel ADR 7,000 465,500
Paradyne Networks, Inc.(1) 25,000 814,063
-----------------------------------------------------------------------
$ 1,420,891
-----------------------------------------------------------------------
Telecommunications Services -- 1.3%
-----------------------------------------------------------------------
Nextel Communications, Inc., Class A(1) 40,000 $ 2,447,500
-----------------------------------------------------------------------
$ 2,447,500
-----------------------------------------------------------------------
Tobacco -- 2.2%
-----------------------------------------------------------------------
Philip Morris Co., Inc. 154,500 $ 4,103,906
-----------------------------------------------------------------------
$ 4,103,906
-----------------------------------------------------------------------
Transportation -- 0.7%
-----------------------------------------------------------------------
Kansas City Southern Industries, Inc. 15,000 $ 1,330,313
-----------------------------------------------------------------------
$ 1,330,313
-----------------------------------------------------------------------
Wireless Communication Services -- 1.5%
-----------------------------------------------------------------------
VoiceStream Wireless Corp.(1) 23,500 $ 2,732,977
-----------------------------------------------------------------------
$ 2,732,977
-----------------------------------------------------------------------
Total Common Stocks
(identified cost $149,692,619) $169,465,042
-----------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
CAPITAL GROWTH PORTFOLIO AS OF JUNE 30, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
CONVERTIBLE PREFERRED STOCKS -- 0.9%
<TABLE>
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
-----------------------------------------------------------------------
Metals - Gold -- 0.9%
-----------------------------------------------------------------------
Freeport McMoRan Copper & Gold, 5%
Series CV 125,000 $ 1,664,062
-----------------------------------------------------------------------
$ 1,664,062
-----------------------------------------------------------------------
Total Convertible Preferred Stocks
(identified cost $2,872,500) $ 1,664,062
-----------------------------------------------------------------------
</TABLE>
COMMERCIAL PAPER -- 3.4%
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
<S> <C> <C>
-----------------------------------------------------------------------
Associates Corp. of North America,
6.89%, 7/3/00 $ 6,142 $ 6,139,649
-----------------------------------------------------------------------
Total Commercial Paper
(at amortized cost $6,139,649) $ 6,139,649
-----------------------------------------------------------------------
Total Investments -- 97.1%
(identified cost $158,704,768) $177,268,753
-----------------------------------------------------------------------
Other Assets, Less Liabilities -- 2.9% $ 5,378,076
-----------------------------------------------------------------------
Net Assets -- 100.0% $182,646,829
-----------------------------------------------------------------------
</TABLE>
ADR - American Depositary Receipt
(1) Non-income producing security.
SEE NOTES TO FINANCIAL STATEMENTS
14
<PAGE>
CAPITAL GROWTH PORTFOLIO AS OF JUNE 30, 2000
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF JUNE 30, 2000
<S> <C>
Assets
------------------------------------------------------
Investments, at value
(identified cost, $158,704,768) $177,268,753
Cash 3,557
Receivable for investments sold 7,921,482
Dividends receivable 247,165
------------------------------------------------------
TOTAL ASSETS $185,440,957
------------------------------------------------------
Liabilities
------------------------------------------------------
Payable for investments purchased $ 2,766,456
Payable to affiliate for Trustees' fees 3,796
Accrued expenses 23,876
------------------------------------------------------
TOTAL LIABILITIES $ 2,794,128
------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS'
INTEREST IN PORTFOLIO $182,646,829
------------------------------------------------------
Sources of Net Assets
------------------------------------------------------
Net proceeds from capital contributions
and withdrawals $164,082,844
Net unrealized appreciation (computed on
the basis of identified cost) 18,563,985
------------------------------------------------------
TOTAL $182,646,829
------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE PERIOD ENDED
JUNE 30, 2000
<S> <C>
Investment Income
------------------------------------------------------
Interest $ 152,496
Dividends (net of foreign taxes, $1,640) 551,315
------------------------------------------------------
TOTAL INVESTMENT INCOME $ 703,811
------------------------------------------------------
Expenses
------------------------------------------------------
Investment adviser fee $ 362,971
Trustees fees and expenses 4,878
Custodian fee 30,732
Legal and accounting services 13,695
Miscellaneous 3,982
------------------------------------------------------
TOTAL EXPENSES $ 416,258
------------------------------------------------------
NET INVESTMENT INCOME $ 287,553
------------------------------------------------------
Realized and Unrealized Gain (Loss)
------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $ 4,116,731
------------------------------------------------------
NET REALIZED GAIN $ 4,116,731
------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $(11,266,026)
------------------------------------------------------
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) $(11,266,026)
------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS $ (7,149,295)
------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
OPERATIONS $ (6,861,742)
------------------------------------------------------
</TABLE>
(1) For the period from the start of business, March 7, 2000, to June 30,
2000.
SEE NOTES TO FINANCIAL STATEMENTS
15
<PAGE>
CAPITAL GROWTH PORTFOLIO AS OF JUNE 30, 2000
FINANCIAL STATEMENTS CONT'D
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PERIOD ENDED
INCREASE (DECREASE) JUNE 30, 2000
IN NET ASSETS (UNAUDITED)(1)
<S> <C>
--------------------------------------------------------
From operations --
Net investment income $ 287,553
Net realized gain 4,116,731
Net change in unrealized
appreciation (depreciation) (11,266,026)
--------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
OPERATIONS $ (6,861,742)
--------------------------------------------------------
Capital transactions --
Net assets contributed by Eaton Vance
Balanced Fund $ 196,706,145
Contributions 6,143,054
Withdrawals (13,440,638)
--------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
CAPITAL TRANSACTIONS $ 189,408,561
--------------------------------------------------------
NET INCREASE IN NET ASSETS $ 182,546,819
--------------------------------------------------------
Net Assets
--------------------------------------------------------
At beginning of period $ 100,010
--------------------------------------------------------
AT END OF PERIOD $ 182,646,829
--------------------------------------------------------
</TABLE>
(1) For the period from the start of business, March 7, 2000, to June 30,
2000.
SEE NOTES TO FINANCIAL STATEMENTS
16
<PAGE>
CAPITAL GROWTH PORTFOLIO AS OF JUNE 30, 2000
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
PERIOD ENDED
JUNE 30, 2000
(UNAUDITED)(1)
<S> <C>
------------------------------------------------
Ratios/Supplemental Data
------------------------------------------------
Ratios (As a percentage of
average daily net assets):
Expenses 0.71%(2)
Net investment income 0.49%(2)
Portfolio Turnover 122%
------------------------------------------------
NET ASSETS, END OF PERIOD
(000'S OMITTED) $182,647
------------------------------------------------
</TABLE>
(1) For the period from the start of business, March 7, 2000, to June 30,
2000.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
CAPITAL GROWTH PORTFOLIO AS OF JUNE 30, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1 Significant Accounting Policies
-------------------------------------------
Capital Growth 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 February 28, 2000, seeks to achieve
long-term growth of capital by investing in a portfolio consisting of common
stocks. The Declaration of Trust permits the Trustees to issue interests in
the Portfolio. The following is a summary of 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. Listed or unlisted securities for which
closing sale prices are not available are valued at the mean between latest
bid and asked prices. Short-term obligations and money market securities
maturing in 60 days or less are valued at amortized cost which approximates
value. Non-U.S. dollar denominated short-term obligations are valued at
amortized cost as calculated in the base currency and translated to U.S.
dollars at the current exchange rate. 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 -- Interest income is determined on the basis of interest accrued,
adjusted for amortization of premium or discount when required for federal
income tax purposes. Dividend income is recorded on the ex-dividend date for
dividends received in cash and/or securities. 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. Dividend income may
include dividends that represent returns of capital for federal income tax
purposes.
C 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.
D 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 investments. That portion of unrealized gains and losses on
investments that results from fluctuations in foreign currency exchange rates
is not separately disclosed.
E 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.
F Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
to 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 Portfolio maintains with IBT. All significant credit
balances used to reduce the Portfolios custodian fees are reported as a
reduction of expenses on the Statement of Operations.
G Other -- Investment transactions are accounted for on a trade date basis.
Realized gains and losses are computed based on the specific identification
of the security sold.
H Interim Financial Statements -- The interim financial statements relating to
June 30, 2000 and for the period then ended have not been audited by
independent certified public accountants, but in the opinion of the
18
<PAGE>
CAPITAL GROWTH PORTFOLIO AS OF JUNE 30, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
Portfolio's management reflect all adjustments, consisting only of normal
recurring adjustments, necessary for the fair presentation of the financial
statements.
2 Investment Adviser Fee and Other Transactions with Affiliates
-------------------------------------------
The investment adviser fee is earned by Boston Management and Research (BMR),
a wholly-owned subsidiary of Eaton Vance Management (EVM), as compensation
for management and investment advisory services rendered to the Portfolio.
The fee is computed at the monthly rate of 5/96 of 1% (0.625% annualized) of
the Portfolio's average daily net assets up to $300 million and 1/24 of 1%
(0.50% annualized) of average daily net assets of $300 million and more. For
the period ended June 30, 2000 the fee was equivalent to 0.63% (annualized)
of the Portfolio's average net assets for such period and amounted to
$362,971. Except as to Trustees of the Portfolio who are not members of EVM's
or BMR's organization, officers and Trustees receive remuneration for their
service to the Portfolio out of such investment adviser fee. Certain officers
and Trustees of the Portfolio are officers 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 Trustees Deferred Compensation Plan. For the
period ended June 30, 2000, no significant amounts have been deferred.
3 Investment Transactions
-------------------------------------------
Purchases and sales of investments, other than short-term obligations,
aggregated $332,106,690 and $209,498,528, respectively.
4 Federal Income Tax Basis of Investments
-------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned at June 30, 2000, as computed on a federal income tax
basis, were as follows:
<TABLE>
<S> <C>
AGGREGATE COST $158,704,768
------------------------------------------------------
Gross unrealized appreciation $ 28,463,927
Gross unrealized depreciation (9,899,942)
------------------------------------------------------
NET UNREALIZED APPRECIATION $ 18,563,985
------------------------------------------------------
</TABLE>
5 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. The Portfolio may temporarily borrow from the line of
credit to satisfy redemption requests or settle investment transactions.
Interest is charged to each portfolio or fund based on its borrowings at an
amount above the Eurodollar rate or federal funds rate. In addition, a fee
computed at an annual rate of 0.10% on the daily unused portion of the line
of credit is allocated among the participating portfolios and funds at the
end of each quarter. The Portfolio did not have any significant borrowings or
allocated fees during the period ended June 30, 2000.
6 Transfer of Net Assets
-------------------------------------------
Prior to the opening of business on March, 7, 2000, Eaton Vance Balanced
Fund, pursuant to an Agreement and Plan of Reorganization dated February 29,
2000, contributed net assets to the Portfolio of $196,706,145, in exchange
for an interest therein, including $29,830,011 of net unrealized
appreciation. The transaction was structured for tax purposes to qualify as a
tax free exchange under the Internal Revenue Code.
19
<PAGE>
EATON VANCE BALANCED FUND AS OF JUNE 30, 2000
INVESTMENT MANAGEMENT
CAPITAL GROWTH PORTFOLIO
Officers
James B. Hawkes
President and Trustee
Arieh Coll
Vice President and
Portfolio Manager
Michael B. Terry
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
Chairman of the Board,
United Asset Management Corporation
Lynn A. Stout
Professor of Law,
Georgetown University Law Center
Jack L. Treynor
Investment Adviser and Consultant
26
