<PAGE>
DEPOSITORS FUND
OF BOSTON, INC.
PERFORMANCE RESULTS+
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
(STANDARDIZED SEC PERFORMANCE DATA
FOR THE PERIODS ENDED APRIL 30, 1996)
- --------------------------------------------------------------------------------
One year 34.2%
- --------------------------------------------------------------------------------
Five years 13.9%
- --------------------------------------------------------------------------------
Ten years 12.5%
- --------------------------------------------------------------------------------
Life of Fund (4/26/65) 9.5%
- --------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN
LIFE OF FUND
(4/26/65 TO 4/30/96)
- --------------------------------------------------------------------------------
Depositors Fund 1,576.8%
- --------------------------------------------------------------------------------
Dow Jones Industrial Average 2,098.1%
- --------------------------------------------------------------------------------
Standard & Poor's 500 2,275.3%
- --------------------------------------------------------------------------------
+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 charges
and expenses. Please read the prospectus carefully before investing.
[LOGO]
EATON VANCE
The Boston Tradition
Funds offered through
Eaton Vance Distributors, Inc.
24 Federal Street, Boston, Massachusetts 02110
6/96
DEPOSITORS FUND
OF BOSTON
An Eaton Vance
Exchange Fund
Semi-Annual Report
April 30, 1996
<PAGE>
-------------------------
TO SHAREHOLDERS
BECAUSE DEPOSITORS FUND IS NOW A SPOKE OF TAX-MANAGED GROWTH PORTFOLIO, WITH A
NEW FISCAL YEAR-END OF OCTOBER 31 WE ARE REQUIRED BY SECURITY AND EXCHANGE
COMMISSION REGULATIONS TO SEND YOU THIS INTERIM REPORT REFLECTING THAT CHANGE.
Depositors Fund had a total return of 2.75% during the period from March 31,
1996 to April 30, 1996. That return represented a rise in net asset value per
share to $130.17 from $126.69. By comparison, the S&P 500 Index, an unmanaged
index of common stocks, had a total return of 1.48% during the same period.
- -------------------------------------------------------------------------------
THE FUND HAD A TOTAL RETURN OF
2.75% DURING THE MONTH THAT ENDED
APRIL 30, 1996.
BY THE SPRING OF 1996, THE FEDERAL RESERVE APPEARED TO HAVE REALIZED ITS GOAL OF
A "SOFT LANDING." Economic growth has advanced at a moderate pace and inflation
remains well in check. Employment has risen, with the service and trade areas
providing the bulk of new jobs growth, while the manufacturing sector continued
to suffer job losses.
STOCKS MOVED SHARPLY HIGHER THROUGH MUCH OF 1995 AND WELL INTO 1996. However,
more recently the market has encountered increased volatility. The failure of
budget deficit reduction talks and concerns over a possible reigniting of
inflation pushed interest rates higher. The market has been increasingly
characterized by sector rotation, with market leadership shifting among industry
groups. With momentum slowing somewhat, investors have worried over the strength
of corporate earnings. According to Standard & Poor's, corporate profits
registered an average gain of 7.3% in the first quarter of 1996 versus a 23%
gain in the same period a year earlier.
- -------------------------------------------------------------------------------
"BY INVESTING IN A PORTFOLIO OF
STOCKS OF COMPANIES THAT ARE
FINANCIALLY SOUND AND LEADERS IN
THEIR INDUSTRIES, DEPOSITORS FUND
IS WELL-POSITIONED TO CONTINUE
DELIVERING SOUND LONG-TERM
PERFORMANCE FOR ITS SHAREHOLDERS."
HEALTH CARE STOCKS HAVE BEEN AMONG THE MARKET LEADERS IN RECENT MONTHS, PACED BY
STRONG EARNINGS AND AN INCREASE IN MERGER ACTIVITY WITHIN THE DRUG INDUSTRY. The
Portfolio's largest holding in the health care sector at April 30, 1996 was
Pfizer, Inc., which has enjoyed robust sales of its cardiovascular drug Norvasc.
Another major drug company investment was Johnson & Johnson, the world's largest
health care company. In the beverage sector, the Portfolio had significant
investments in PepsiCo Inc., and in rival Coca-Cola Company. The two companies
continue to gain global beverage market share, especially in emerging Asian
nations.
[Photo of Landon T. Clay]
IN THE FINANCIAL SECTOR, THE PORTFOLIO MAINTAINED A COMMITMENT IN AMERICAN
EXPRESS CO. A diversified financial services provider, the company is active in
charge cards, travel-related services, insurance, mutual funds and financial
planning. Finally, the Portfolio has benefited from its oil investments, with
Exxon Corp. making a significant contribution. With oil prices firming in recent
months, investors have returned to the long-neglected energy sector.
UNEXPECTED STRENGTH IN THE EMPLOYMENT DATA SUGGESTS THAT THE ECONOMY MAY BE
GATHERING STEAM. The market could, therefore, undergo further short-term
volatility if interest rates move higher. It's important to remember, however,
that history has demonstrated time and again that a long-term approach to
investing provides the best results. By investing in a portfolio of stocks of
companies that are financially sound and leaders in their industries, Depositors
Fund is well-positioned to continue delivering sound long-term performance for
its shareholders.
Sincerely,
/s/ Landon T. Clay
LANDON T. CLAY
President
June 20, 1996
<PAGE>
------------------------------------
TAX-MANAGED GROWTH PORTFOLIO
APRIL 30, 1996
(UNAUDITED)
VALUE
TEN LARGEST HOLDINGS (IN MILLIONS)
- ------------------------------------------------------------------------------
Hewlett-Packard Co. $12.6
- ------------------------------------------------------------------------------
Pfizer Inc. 10.0
- ------------------------------------------------------------------------------
Intel Corp. 7.1
- ------------------------------------------------------------------------------
PepsiCo Inc. 6.8
- ------------------------------------------------------------------------------
Reuters Holdings PLC, ADR 6.8
- ------------------------------------------------------------------------------
Johnson & Johnson 6.4
- ------------------------------------------------------------------------------
Albertson's, Inc. 6.0
- ------------------------------------------------------------------------------
Coca-Cola Co. 5.5
- ------------------------------------------------------------------------------
Exxon Corp. 5.4
- ------------------------------------------------------------------------------
Dover Corp. 5.2
- ------------------------------------------------------------------------------
PERCENTAGE OF
FIVE LARGEST INDUSTRY HOLDINGS NET ASSETS
- ------------------------------------------------------------------------------
Health Care 14.1%
- ------------------------------------------------------------------------------
Beverages 7.0
- ------------------------------------------------------------------------------
Computer & Business Equipment 7.0
- ------------------------------------------------------------------------------
Electronics 6.0
- ------------------------------------------------------------------------------
Business Products and Services 5.2
- ------------------------------------------------------------------------------
<PAGE>
DEPOSITORS FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
- ------------------------------------------------------------------------------
April 30, 1996 (Unaudited)
- ------------------------------------------------------------------------------
ASSETS:
Investment in Tax-Managed Growth Portfolio
(Portfolio), at value (note 1A) $80,062,082
-----------
LIABILITIES:
Payable to affiliates --
Trustees' fees $ 136
Accrued expenses 8,544
-------
Total liabilities 8,680
-----------
NET ASSETS for 614,980 shares of capital stock outstanding $80,053,402
===========
SOURCES OF NET ASSETS:
Accumulated net realized gain on investment
transactions (computed on the basis of identified
cost), less the excess of cost of capital stock
redeemed over proceeds from sales of capital
stock (including shares issued to shareholders
electing to receive payment of distributions in
capital stock) $26,977,252
Accumulated distributions of net realized gain on
investments as computed for federal income tax
purposes (7,889,247)
Distributions in excess of net investment income (48,221)
Unrealized appreciation of investments from
Portfolio (computed on the basis of identified
cost) 66,727,708
Federal tax on undistributed net realized long-
term capital gain, paid on behalf of
shareholders (Note 1C) (5,714,090)
-----------
Total net assets $80,053,402
===========
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
($80,053,402 / 614,980 shares of capital stock outstanding) $130.17
=======
See notes to financial statements
<PAGE>
STATEMENT OF OPERATIONS
- ------------------------------------------------------------------------------
For the period Ended April 30, 1996 (Unaudited)*
- ------------------------------------------------------------------------------
INVESTMENT INCOME (NOTE 1B):
Dividend income allocated from Portfolio $ 54,061
Interest income allocated from Portfolio 8,643
Expenses allocated from Portfolio (40,911)
----------
Total investment income $ 21,793
Expenses --
Compensation of Directors not members of the
Investment Adviser's organization (Note 5) $ 136
Custodian fees (Note 4) 2,262
Transfer and dividend disbursing agent fees 620
----------
Total expenses 3,018
----------
Net investment income $ 18,775
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments, (identified
cost basis) $ 66,854
Change in unrealized appreciation of investments 2,056,063
----------
Net realized and unrealized gain on
investments 2,122,917
----------
Net increase in net assets from operations $2,141,692
==========
*For the period from April 1, 1996, to April 30, 1996 (Note 5).
See notes to financial statements
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------
PERIOD ENDED
APRIL 30, YEAR ENDED
1996 MARCH 31,
(UNAUDITED)* 1996
------------ ------------
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 18,775 $ 683,991
Net realized gain on investments 66,854 2,038,041
Increase in unrealized appreciation of
investments 2,056,063 17,574,443
----------- -----------
Increase in net assets from operations $ 2,141,692 $20,296,475
Distributions to shareholders --
From net investment income -- (680,309)
Provision for federal tax on undistributed net
realized long-term gain (Note 1C) -- (49,408)
Net decrease from capital stock transactions
(Note 2) (95,899) (1,809,982)
----------- -----------
Net increase in net assets $ 2,045,793 $17,756,776
NET ASSETS:
At beginning of period 78,007,609 60,250,833
----------- -----------
At end of period (including distributions in
excess of net investment income of $48,221
and $66,996, respectively) $80,053,402 $78,007,609
=========== ===========
*For the period from April 1, 1996, to April 30, 1996 (Note 5).
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
- ----------------------------------------------------------------------------------------------------------------------------
PERIOD ENDED YEAR ENDED MARCH 31,
APRIL 30, 1996 ----------------------------------------------------------------
(UNAUDITED)* 1996 1995 1994 1993 1992
-------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, beginning of period $126.690 $ 95.160 $82.660 $86.990 $82.070 $72.750
-------- -------- ------- ------- ------- -------
INCOME FROM OPERATIONS:
Net investment income $ 0.030 $ 1.103 $ 1.095 $ 0.920 $ 0.958 $ 1.061
Net realized and unrealized gain
(loss) on investments 3.450 31.607 12.495 (4.330) 4.962 9.399
-------- -------- ------- ------- ------- -------
Total income (loss) from
operations $ 3.480 $ 32.710 $13.590 $(3.410) $ 5.920 $10.460
-------- -------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From net investment income $ -- $ (1.100) $(1.090) $(0.920) $(0.958) $(1.064)
From paid-in capital -- -- -- -- (0.042) (0.076)
-------- -------- ------- ------- ------- -------
Total distributions $ -- $ (1.100) $(1.090) $(0.920) $(1.000) $(1.140)
-------- -------- ------- ------- ------- -------
PROVISION FOR FEDERAL TAX ON
UNDISTRIBUTED NET REALIZED LONG-
TERM GAIN (NOTE 1C) $ -- $ (0.080) $ -- $ -- $ -- $ --
-------- -------- ------- ------- ------- -------
NET ASSET VALUE, end of period $130.170 $126.690 $95.160 $82.660 $86.990 $82.070
======== ======== ======= ======= ======= =======
TOTAL RETURN(1) 2.75% 34.55% 16.56% (3.94)% 7.31% 14.47%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000 omitted) $ 80,053 $ 78,008 $60,251 $55,035 $62,127 $63,824
Ratio of expenses to average net
assets(2) 0.68%+ 0.79% 0.83% 0.81% 0.82% 0.83%
Ratio of net investment income to
average net assets 0.29%+ 0.99% 1.27% 1.09% 1.13% 1.38%
PORTFOLIO TURNOVER** -- 2% 0% 5% 2% 5%
<FN>
+ Computed on an annualized basis.
(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.
(2) Includes the Fund's share of Tax-Managed Growth Portfolio's allocated expenses for the period from April 1, 1996, to
April 30, 1996.
* For the period from April 1, 1996, to April 30, 1996 (Note 5).
** Portfolio Turnover represents the rate of portfolio activity for the period while the Fund was making investments directly
in securities.The portfolio turnover for the period since the Fund transferred substantially all of its investable assets
to the Portfolio is shown in the Portfolio's financial statements which are included elsewhere in this report.
</TABLE>
See notes to financial statements
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
- ------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940, as amended, as
a diversified, open-end, management investment company. The Fund invests all of
its investable assets in interests in the Tax-Managed Growth Portfolio (the
Portfolio), a New York Trust, having the same investment objective as the Fund.
The value of the Fund's investment in the Portfolio reflects the Fund's
proportionate interest in the net assets of the Portfolio (38.2% at April 30,
1996). 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 1 of the Portfolio's Notes to Financial Statements which are included
elsewhere in this report.
B. INCOME -- The Fund's net investment income consists of the Fund's pro rata
share of the net investment income of the Portfolio, less all actual and accrued
expenses of the Fund determined in accordance with generally accepted accounting
principles. Prior to the Fund's investment in the Portfolio, the Fund held its
investments directly. For investments held directly, dividend income was
recorded on the ex-dividend date.
C. FEDERAL TAXES -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code available to regulated investment companies and to
distribute to shareholders each year all of its taxable income from dividends,
interest and net realized short-term capital gain. Accordingly, no provision for
federal income or excise tax is necessary. The Fund generally designates as
undistributed any taxable net realized long-term gain (but reserves the right to
distribute such gain in any year) and pays the federal tax thereon on behalf of
shareholders. Provision for such tax is recorded on the Fund's records on the
last business day of the Fund's fiscal year because the Internal Revenue Code
provides that such tax is allocated among shareholders of record on that date.
D. OTHER -- Investment transactions are accounted for on a trade date basis.
Dividends to shareholders are recorded on the ex-dividend date.
E. DISTRIBUTIONS -- Generally accepted accounting principles require that
differences in the recognition or classification of income between the financial
statements and tax earnings and profits which result in temporary
over-distributions for financial statement purposes, are classified as
distributions in excess of net investment income or accumulated net realized
gains.
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. INTERIM FINANCIAL INFORMATION -- The interim financial statements relating to
April 30, 1996 and for the 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) CAPITAL STOCK
At April 30, 1996, there were 5,860,670 shares of $1.00 par value capital stock
authorized. Transactions in capital stock were as follows:
PERIOD ENDED YEAR ENDED
APRIL 30, 1996 MARCH 31, 1996
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
Redemptions (761) $(95,899) (18,265) $(1,908,220)
Issued to shareholders
electing to receive
payment of distributions
in capital stock -- -- 869 98,238
---- -------- ------- -----------
Net decrease (761) $(95,899) (17,396) $(1,809,982)
==== ======== ======= ===========
- ------------------------------------------------------------------------------
(3) INVESTMENT TRANSACTIONS
On April 1, 1996, the Fund transferred substantially all its assets to the
Portfolio in exchange for an interest in the Portfolio. Increases and decreases
in the Fund's investment in the Portfolio aggregated $13,399,109 and $153,022,
respectively for the period ended April 30, 1996.
- ------------------------------------------------------------------------------
(4) TRANSACTIONS WITH AFFILIATES
Prior to April 1, 1996 (when the Fund transferred substantially all of its
assets to the Portfolio in exchange for an interest in the Portfolio), the Fund
retained Eaton Vance Management (EVM) as its investment adviser. Since April 1,
1996, EVM has served only as the administrator of the Fund, but receives no
compensation. The Portfolio has engaged Boston Management and Research (BMR), a
subsidiary of EVM, to render investment advisory services. See Note 2 of the
Portfolio's Notes to Financial Statements which are included elsewhere in this
report. Except as to directors of the Fund who are not members of EVM's
organization, officers and directors receive remuneration for their services to
the Fund out of such investment adviser fee. The custodian fee was paid to
Investors Bank & Trust Company (IBT), 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.
- ------------------------------------------------------------------------------
(5) CHANGE IN FISCAL YEAR
The Fund changed its fiscal year end from March 31, to October 31, effective
April 1, 1996.
<PAGE>
--------------------------------
TAX-MANAGED GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996
(UNAUDITED)
- ------------------------------------------------------------------------------
COMMON STOCKS - 96.4%
- ------------------------------------------------------------------------------
NAME OF COMPANY SHARES VALUE
- ------------------------------------------------------------------------------
ADVERTISING 1.5%
Interpublic Group Cos. 66,000 $ 3,085,500
------------
AEROSPACE/DEFENSE - 4.3%
Boeing Co. 60,370 $ 4,957,886
Raytheon 80,000 4,050,000
------------
$ 9,007,886
------------
BEVERAGES - 7.0%
Anheuser-Busch Cos., Inc. 35,820 $ 2,404,418
Coca-Cola Co. 67,206 5,477,289
PepsiCo Inc. 106,985 6,793,547
------------
$ 14,675,254
------------
BUSINESS PRODUCTS AND SERVICES - 5.2%
Manpower Inc. 110,000 $ 4,070,000
Reuters Holdings PLC, ADR 100,420 6,790,903
------------
$ 10,860,903
------------
CHEMICALS - 1.4%
Monsanto Co. 19,336 $ 2,929,404
------------
COMPUTER & BUSINESS EQUIPMENT - 7.0%
Digital Equipment Corp.* 8,325 $ 497,419
International Business Machines 14,400 1,548,000
Hewlett-Packard Co. 118,570 12,553,599
------------
$ 14,599,018
------------
CONSTRUCTION AND REAL ESTATE - 2.5%
Dover Corp. 101,580 $ 5,231,370
------------
CONSUMER PRODUCTS - 1.9%
Procter & Gamble Co. 48,000 $ 4,056,000
------------
COSMETICS AND TOILETRIES - 2.0%
International Flavors & Fragrances, Inc. 88,101 $ 4,327,962
------------
HEALTH CARE - 14.1%
Astra AB - Series A 80,000 $ 3,548,576
Bristol-Myers Squibb Co. 29,000 2,385,250
Genentech Inc.* (Redeemable Common) 16,500 872,438
Johnson & Johnson 69,575 6,435,688
Merck & Co., Inc. 72,045 4,358,722
Pfizer Inc. 144,952 9,983,569
SmithKline Beecham PLC 37,520 2,026,080
------------
$ 29,610,323
------------
ELECTRONICS - 6.0%
AMP Inc. 61,530 $ 2,753,467
Intel Corp. 104,278 7,064,835
Texas Instruments Inc. 48,000 2,712,000
------------
$ 12,530,302
------------
FINANCIAL - MISC. - 0.9%
Federal National Mortgage Association 62,620 $ 1,917,738
------------
FINANCIAL SERVICES - 2.4%
American Express Co. 56,798 $ 2,754,703
Marsh & McLennan Cos., Inc. 24,000 2,256,000
------------
$ 5,010,703
------------
FOOD PROCESSING - 1.5%
Earthgrains Co. 1,433 $ 46,387
McCormick & Co., Inc., Non-voting 145,120 3,228,920
------------
$ 3,275,307
------------
FOREST PRODUCTS - 2.0%
Kimberly-Clark Corp. 57,310 $ 4,162,139
------------
INDUSTRIAL EQUIPMENT - 0.5%
Parker Hannifin Corp. 22,369 $ 945,090
------------
INSTRUMENTATION AND CONTROLS - 1.7%
Dionex Corp.* 100,000 $ 3,662,500
------------
INSURANCE - 5.1%
American International Group Inc. 50,625 $ 4,625,859
General Re Corp. 31,920 4,560,570
St. Paul Cos., Inc. 27,620 1,467,313
------------
$ 10,653,742
------------
MACHINERY AND EQUIPMENT - 2.9%
Dexter Corp. 47,829 $ 1,285,404
Gould Pumps, Inc. 78,830 1,832,797
Tecumseh Products Co. Class B 13,320 705,960
Tecumseh Products Co. Class A 39,960 2,257,740
------------
$ 6,081,901
------------
MEDICAL PRODUCTS - 1.3%
Baxter International Inc. 23,950 $ 1,059,787
Sofamor/Danek Group, Inc.* 50,000 1,637,500
------------
$ 2,697,287
------------
METALS & MINING - 0.7%
Nucor Corp. 25,000 $ 1,406,250
------------
MISCELLANEOUS - 0.0%
Schweitzer-Maudit International Inc. 5,731 $ 155,453
------------
OIL - 3.8%
Atlantic Richfield Co. 6,880 $ 810,120
Exxon Corp. 63,774 5,420,790
Andarko Petroleum Corp. 29,000 1,689,250
------------
$ 7,920,160
------------
OIL & GAS - EQUIPMENT & SERVICE - 3.6%
Baker Hughes Inc. 39,234 $ 1,245,679
Dresser Industries, Inc. 79,800 2,543,625
Schlumberger Ltd. 42,819 3,778,777
------------
$ 7,568,081
------------
PAPER & FOREST PRODUCTS - 0.5%
Champion International Corp. 1,438 $ 69,383
Weyerhaeuser Co. 19,380 959,310
------------
$ 1,028,693
------------
PHOTOGRAPHIC PRODUCTS - 1.4%
Eastman Kodak Co. 37,181 $ 2,844,347
------------
PRINTING & BUSINESS FORMS - 1.8%
Bowne & Co., Inc. 91,770 $ 1,651,860
Donnelley (R.R.) & Sons Co. 47,896 1,724,256
Moore Corp., Ltd. 19,075 348,119
------------
$ 3,724,235
------------
PUBLISHING AND PRINTING - 3.1%
Dun & Bradstreet Corp. 21,098 $ 1,284,341
Harcourt General, Inc. 50,000 2,200,000
Houghton Mifflin Co. 63,700 2,954,087
------------
$ 6,438,428
------------
RESTAURANTS - 1.6%
McDonald's Corp. 72,000 $ 3,447,000
------------
RETAIL - 4.6%
Albertson's, Inc. 156,048 $ 6,007,848
Wal-Mart Stores, Inc. 148,700 3,550,213
------------
$ 9,558,061
------------
RETAIL - SPECIALTY & APPAREL - 1.9%
Home Depot, Inc. (The) 40,000 $ 1,895,000
Toys "R" Us, Inc. 72,000 2,007,000
------------
$ 3,902,000
------------
TRANSPORTATION - 2.2%
CSX Corp. 15,270 $ 782,587
Flightsafety International Ltd. 15,000 830,625
Union Pacific Corp. 44,530 3,033,606
------------
$ 4,646,818
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST, $28,531,980) $201,959,855
----------- ------------
- --------------------------------------------------------------------------
SHORT-TERM OBLIGATION - 3.1%
- --------------------------------------------------------------------------
FACE AMOUNT
(000 OMITTED) VALUE
- --------------------------------------------------------------------------
Ford Motor Credit Corp., 5.27%
due 5/01/96, at amortized cost $ 6,400 $ 6,400,000
------------
TOTAL INVESTMENTS
(IDENTIFIED COST, $34,931,980) - 99.5% $208,359,855
OTHER ASSETS, LESS LIABILITIES - 0.5% 1,084,812
------------
NET ASSETS - 100% $209,444,667
============
*Non-income producing security.
See notes to financial statements
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
- ------------------------------------------------------------------------------
April 30, 1996 (Unaudited)
- ------------------------------------------------------------------------------
ASSETS:
Investments, at value (Note 1A) (identified cost,
$34,931,980) $208,359,855
Cash 908,206
Dividends and interest receivable 170,736
Deferred organization expenses (Note 1C) 6,280
Other assets 8,360
------------
Total assets $209,453,437
LIABILITIES:
Payable to affiliate --
Trustees' fees $1,104
Accrued expenses 7,666
------
Total liabilities 8,770
------------
NET ASSETS APPLICABLE TO INVESTORS' INTEREST IN PORTFOLIO $209,444,667
============
SOURCES OF NET ASSETS:
Net proceeds from capital contributions and
withdrawals $ 36,016,792
Unrealized appreciation of investments (computed on
the basis of identified cost) 173,427,875
------------
Total $209,444,667
============
See notes to financial statements
<PAGE>
STATEMENT OF OPERATIONS
- ------------------------------------------------------------------------------
For the period from the start of business, December 1, 1995, to April 30, 1996
(Unaudited)
- ------------------------------------------------------------------------------
INVESTMENT INCOME:
Income --
Dividends (net of foreign withholding tax of
$7,541) $ 864,332
Interest 47,216
-----------
Total income $ 911,548
Expenses --
Investment adviser fee (Note 2) $ 356,359
Compensation of Directors not members of the
Investment Adviser's organization (Note 2) 3,293
Custodian fees 24,502
Amortization of organization expenses (Note 1C) 570
Miscellaneous 712
-----------
Total expenses 385,436
-----------
Net investment income $ 526,112
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments, computed on
the basis of identified cost $ 1,907,186
Increase in unrealized appreciation of
investments 12,138,526
-----------
Net realized and unrealized gain on
investments 14,045,712
-----------
Net increase in net assets from
operations $14,571,824
===========
See notes to financial statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------
For the period from the start of business, December 1, 1995, to April 30, 1996
(Unaudited)
- ------------------------------------------------------------------------------
INCREASE IN NET ASSETS:
From operations --
Net investment income $ 526,112
Net realized gain on investments 1,907,186
Increase in unrealized appreciation of investments 12,138,526
-----------
Net increase in net assets from operations $ 14,571,824
-----------
Capital transactions --
Contributions $197,452,649
Withdrawals (2,679,816)
-----------
Increase in net assets from capital transactions $194,772,833
-----------
Total increase in net assets $209,344,657
NET ASSETS:
At beginning of period 100,010
-----------
At end of period $209,444,667
============
SUPPLEMENTARY DATA
- ------------------------------------------------------------------------------
For the period from the start of business, December 1, 1995, to April 30, 1996
(Unaudited)
- ------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Expenses 0.68%+
Net investment income 1.35%+
PORTFOLIO TURNOVER 0%
+Annualized.
See notes to financial statements
<PAGE>
--------------------------------
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
- ------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
Tax-Managed Growth Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940 as a diversified, open-end investment company.
The Portfolio, which was organized as a trust under the laws of the State of
New York on December 1, 1995, seeks to provide long-term after-tax returns by
investing in a diversified portfolio of equity securities. The Declaration of
Trust permits the Trustees to issue interests in the Portfolio. Investment
operations began on December 1, 1995, with the acquisition of investments with
a value of $115,586,248, including unrealized appreciation of $96,618,064, in
exchange for an interest in the Portfolio by one of the Portfolio's investors.
During the period, additional investors contributed securities with a value of
$77,830,309, including unrealized appreciation of $64,671,645. The following
is a summary of the significant accounting policies of the Portfolio. The
policies are in conformity with generally accepted accounting principles.
A. INVESTMENT VALUATIONS -- Marketable securities, including options, that are
listed on foreign or U.S. securities exchanges or in the NASDAQ National
Market System are valued at closing sale prices, on the exchange where such
securities are principally traded. Futures positions on securities or
currencies are generally valued at closing settlement prices. Unlisted or
listed securities for which closing sale prices are not available are valued
at the mean between the latest bid and asked prices. Short-term debt
securities with a remaining maturity of 60 days or less are valued at
amortized cost. Other fixed income and debt securities, including listed
securities and securities for which price quotations are available, will
normally be valued on the basis of valuations furnished by a pricing service.
Investments for which valuations or market quotations are unavailable are
valued at fair value using methods determined in good faith by or at the
direction of the Trustees.
B. FEDERAL TAXES -- The Portfolio is treated as a partnership for Federal tax
purposes. No provision is made by the Portfolio for federal or state taxes on
any taxable income of the Portfolio because each investor in the Portfolio is
ultimately responsible for the payment of any taxes on its share of such
income. Since some of the Portfolio's investors are regulated investment
companies that invest all or substantially all of their assets in the
Portfolio, the Portfolio normally must satisfy the applicable source of income
and diversification requirements, (under the Internal Revenue Code), in order
for its investors to satisfy them. The Portfolio will allocate, at least
annually among its investors, each investor's distributive share of the
Portfolio's net investment income, net realized capital gains, and any other
items of income, gain, loss, deduction or credit.
C. DEFERRED ORGANIZATION EXPENSES -- Costs incurred by the Portfolio in
connection with its organization, including registration costs, are being
amortized on the straight-line basis over five years.
D. FUTURES CONTRACTS -- Upon the entering of a financial futures contract, the
Portfolio is required to deposit either in cash or securities an amount
("initial margin") 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 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 to hedge against anticipated future
changes in price of current or anticipated portfolio positions. Should prices
move unexpectedly, the Portfolio may not achieve the anticipated benefits of the
financial futures contracts and may realize a loss.
E. OTHER -- Investment transactions are accounted for on the date the
investments are purchased or sold. 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.
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. INTERIM FINANCIAL INFORMATION -- The interim financial statements relating to
April 30, 1996 and for the period then ended have not been audited by
independent certified public accountants, but in the opinion of the Portfolio's
management, reflect all adjustments, consisting only of normal recurring
adjustments, necessary for the fair presentation of the financial statements.
- ------------------------------------------------------------------------------
(2) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The investment adviser fee is earned by 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. Under the
advisory agreement, BMR receives a monthly advisory fee of 5/96 of 1% (0.625%
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 period from
the start of business, December 1, 1995, to April 30, 1996 the adviser fee was
0.625% of average net assets. Except as to Trustees of the Portfolio who are not
members of EVM's organization, officers and Trustees receive remuneration for
their services to the Portfolio out of such investment adviser and
administrative fees. Certain of the officers and Trustees of the Portfolio are
officers or directors/trustees of the above organizations.
- ------------------------------------------------------------------------------
(3) INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than short-term obligations,
aggregated $54,486 and $96,714, respectively.
- ------------------------------------------------------------------------------
(4) FEDERAL INCOME TAX BASIS OF INVESTMENT
The cost and unrealized appreciation (depreciation) in value of the
investments owned at April 30, 1996, as computed on a federal income tax
basis, are as follows:
Aggregate cost $ 34,931,980
============
Gross unrealized appreciation $173,427,875
Gross unrealized depreciation --
-----------
Net unrealized appreciation $173,427,875
============
- ------------------------------------------------------------------------------
(5) FINANCIAL INSTRUMENTS
The Portfolio may trade in financial instruments with off-balance sheet risk
in the normal course of its investing activities to assist in managing
exposure to various market risks. These financial instruments include written
options, forward foreign currency exchange contracts and 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 April 30, 1996.
- ------------------------------------------------------------------------------
(6) LINE OF CREDIT
The Portfolio participates with other portfolios and funds managed by BMR and
EVM and its affiliates 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
Portfolio solely to facilitate the handling of unusual and/or unanticipated
short-term cash requirements. Interest is charged to each portfolio based on
its borrowings at an amount above either the bank's adjusted certificate of
deposit rate, a variable adjusted 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 on the daily unused portion of
the $100 million discretionary 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 period.
<PAGE>
<TABLE>
<CAPTION>
-----------------------------
INVESTMENT MANAGEMENT
<S> <C> <C>
DEPOSITORS FUND OFFICERS AND STAFF INDEPENDENT DIRECTORS
OF BOSTON, INC.
24 Federal Street LANDON T. CLAY DONALD R. DWIGHT
Boston, MA 02110 President, Director President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
JAMES B. HAWKES
Vice President SAMUEL L. HAYES, III
Jacob H. Schiff Professor of
THOMAS E. FAUST, JR. Investment Banking, Harvard University
Vice President Graduate School of Business Administration
JAMES L. O'CONNOR NORTON H. REAMER
Treasurer President and Director, United Asset
Management Corporation
THOMAS OTIS
Clerk JOHN L. THORNDIKE
Director, Fiduciary Company Incorporated
JACK L. TREYNOR
Investment Adviser and Consultant
-------------------------------------------------------------------
TAX-MANAGED OFFICERS INDEPENDENT TRUSTEES
GROWTH PORTFOLIO
24 Federal Street LANDON T. CLAY DONALD R. DWIGHT
Boston, MA 02110 President, Trustee President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
JAMES B. HAWKES
Vice President SAMUEL L. HAYES, III
Jacob H. Schiff Professor of
DUNCAN W. RICHARDSON Investment Banking, Harvard University
Vice President and Graduate School of Business Administration
Portfolio Manager
NORTON H. REAMER
JAMES L. O'CONNOR President and Director, United Asset
Treasurer Management Corporation
THOMAS OTIS JOHN L. THORNDIKE
Clerk Director, Fiduciary Company Incorporated
JACK L. TREYNOR
Investment Adviser and Consultant
</TABLE>
<PAGE>
DEPOSITORS FUND OF BOSTON, INC.
24 Federal Street
Boston, MA 02110
INVESTMENT ADVISER
Eaton Vance Management
24 Federal Street
Boston, MA 02110
CUSTODIAN
Investors Bank & Trust Company
89 South Street
P.O. Box 1537
Boston, MA 02205-1537
TRANSFER AND DIVIDEND DISBURSING AGENT
First Data Investor Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
800-262-1122