<PAGE>
To Shareholders
This six-month period ending July 31, 1995 was one of exceptional strength
for the stock market and a good period for the bond market as well. We are
pleased to report that during these six months, EV Traditional Investors Fund
had a total return of 17.5 percent. That return includes an increase in net
asset value to $7.89 per share from $6.84 per share at the beginning of the
year and assumes the reinvestment of income dividends of $0.135 per share
during the year.
By comparison, the S&P 500 and the Lehman Brothers Government/Corporate Bond
Index, unmanaged indices of common stocks and bonds, respectively, had total
returns of 21.0 percent and 9.3 percent for the same period. If held to
maturity, government and corporate bonds both offer a fixed rate of return
and principal value, whereas the principal value and return of an investment
in the Fund, like an investment in common stocks, will fluctuate with changes
in market conditions.
The strength of the stock market over the past six months reflects a number of
fundamentally positive developments. Prominent among these are strong corporate
earnings, declining interest rates and demand for shares from corporations
through mergers and acquisitions and share repurchase programs.
Corporations across a wide range of industries have reported excellent
earnings progress, even in a period of relatively weak economic growth and
limited pricing power. In many cases, this is a result of the investments in
productivity and cost reduction that have been made over the past several
years. U.S. companies that compete internationally also have benefited from a
weakening of the U.S. dollar.
EV TRADITIONAL INVESTORS FUND
The Portfolio's 10 largest stock holdings*
Astra AB...................................Drugs and medical
Chase Manhattan............................Banking
Reuters Holdings PLC.......................Business products
and services
Rayonier...................................Paper, forest products
Exxon Corp.................................Oil & oil services
Frontier Corp. ............................Telephone utilities
Triton Energy Corp. .......................Oil & oil services
General Re Corp. ..........................Insurance
Intel Corp.................................Semiconductors
Ameritech Corp.............................Telephone utilities
* Holdings by market value as of 7/31/95
Looking forward, the outlook for both stocks and bonds is fundamentally
attractive, supported by low inflation, moderate economic growth and strong
corporate profits. The stock market is perhaps more vulnerable than normal to a
correction following the strong recent performance that has taken valuations on
a dividend basis to high levels.
We believe the Fund's risk-averse style and diversification between stocks
and bonds may produce desirable long-term results with less variation in
year-to-year performance than experienced by most equity-only investments.
Sincerely,
/S/ M.Dozier Gardner
[PHOTO OF M.Dozier Gardner
M. DOZIER GARDNER] President
September 4, 1995
<PAGE>
Management Report
An interview with Thomas E. Faust Jr., Vice President and Manager of
Investors Portfolio.
Q. TOM, AS AN INVESTMENT MANAGER, HOW WOULD YOU CHARACTERIZE THIS STRONG STOCK
MARKET?
A. It's been a period of strong performance for a wide range of stocks. Large
capitalization stocks have led the market surge, but participation in the
rally has been widespread.
Q. WHAT FACTORS ARE RESPONSIBLE FOR THE STRENGTH OF THE MARKET?
A. There are many. Certainly the market's behavior was a positive response to
the improving interest rate environment and the prospects for continuing
economic growth with limited inflation. In addition, many major corporations
have seen sharply escalating profits, reflecting not only a favorable economy
but also the substantial cost reduction and productivity initiatives they
have undertaken in recent years.
Q. WHAT HAVE BEEN THE STRONGEST SECTORS OF THE MARKET?
A. Those that have been particularly strong over the past several months include
technology, financial services and basic industries.
Q. WHAT'S THE PORTFOLIO'S TOP HOLDING IN THE TECHNOLOGY SECTOR?
A. The largest holding is Intel, the dominant producer of [PHOTO OF
microprocessors for use in personal computers. With robust THOMAS E.
demand for personal computers and excellent acceptance of the FAUST, JR.]
new Pentium microprocessor, Intel has been a standout
performer both as a company and as a stock. Over the six-month period, Intel
stock increased in price by 87 percent, making it one of the best performing
large capitalization stocks in the U.S. market.
Q. HOW ABOUT THE PORTFOLIO'S FINANCIAL SERVICES HOLDINGS?
A. In this sector, the Portfolio has been well represented by its holdings of
two New York money center banks, Chase Manhattan and Chemical Bank, which
increased in price by 62 and 33 percent, respectively. Both of these
companies are benefiting from an improved banking environment and internal
cost reduction programs. MGIC Investment, a mortgage insurer, was another
strong performer for the Portfolio in the area of financial services. Its
stock was up 40 percent for the period.
Q. WHAT ARE THE PORTFOLIO'S LARGEST HOLDINGS IN THE BASIC INDUSTRIES SECTOR?
A. Among basic industries stocks, the Portfolio's largest positions include
newly-acquired Rayonier. This is a forest products company whose stock has
increased in price 12 percent since the Portfolio acquired it in May. The
Portfolio's holdings in J&L Specialty Steel, a major producer of stainless
and specialty steels, had a stock price increase of 13 percent over the
period.
Q. HAVE ANY OF THE PORTFOLIO'S HOLDINGS BEEN INVOLVED IN THE MANY BIG MERGERS
THAT HAVE BEEN IN THE NEWS RECENTLY?
A. Yes. Three of the Portfolio's stock holdings, National Gypsum, Scott Paper
and Capital Cities/ABC, were the subject of acquisition offers during the
period. Other holdings of the Portfolio have also been the subject of
speculation about possible acquisitions.
Pie chart entitled: "Investors Portfolio" and subtitled "Investment Allocation*
as of 7/31/95."
This is a three-dimensional pie chart divided into seven pieces, representing
the investment allocation of the portfolio. The seven pieces are labeled along
with the percentage of the total Portfolio that each represents. The pieces are
as follows:
-- Common Stock 62.5%
-- Corporate Bonds 16.3%
-- Government, Agency 14.5%
-- Liquid Assets 3.8%
-- Preferred Stock 1.2%
-- Convertible Preferred Stock 1.3%
-- Convertible Bonds 0.4%
The chart contains a footnote relating to the asterisk in the subtitle after the
word "allocation." The footnote reads: "By market value."
Q. WHAT DO YOU SEE AS THE OUTLOOK FOR STOCKS AND BONDS?
A. Looking forward, the outlook for both stocks and bonds is fundamentally
attractive. This point of view is supported by low inflation, moderate
economic growth and strong corporate profits. But the stock market may be a
bit more vulnerable than usual to a correction after the recent runup.
Q. GIVEN CURRENT ECONOMIC AND MARKET CONDITIONS, HOW IS THE PORTFOLIO POSITIONED
IN ITS STOCK HOLDINGS?
A. Consistent with the conservative style of the Fund, the Portfolio currently
is underweighted, when compared with the S&P 500, in technology and other
sectors of the market that have been very strong performers and are most at
risk in a declining market.
While past trends cannot guarantee future performance, our balanced approach
to investing seeks to provide a way for the conservative investor to achieve
desirable long-term investment results with less year-to-year variation in
results than most equity-only investments.
<PAGE>
EV TRADITIONAL INVESTORS FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
------------------------------------------------------------------------------
July 31, 1995 (Unaudited)
------------------------------------------------------------------------------
ASSETS:
Investments in Investors Portfolio, (Portfolio) at
value (Note 1A) $222,616,276
Receivable for Fund shares sold 345,151
Deferred organization expenses (Note 1D) 14,551
------------
Total assets $222,975,978
LIABILITIES:
Payable for Fund shares redeemed $160,435
Payable to affiliates --
Trustee fees 1,250
Custodian fee 775
Accrued expenses and other liabilities 53,479
--------
Total liabilities 215,939
------------
NET ASSETS for 28,220,321 shares of beneficial
interest outstanding $222,760,039
============
SOURCES OF NET ASSETS:
Paid-in capital $166,790,515
Accumulated net realized gain on investment
transactions (computed on the basis of
identified cost) 7,370,112
Undistributed net investment income 193,998
Unrealized appreciation of investments (computed on
the basis of identified cost) 48,405,414
------------
Total net assets $222,760,039
============
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
($222,760,039 / 28,220,321 shares of beneficial
interest outstanding) $7.89
=====
COMPUTATION OF OFFERING PRICE:
Offering price per share (100/95.25 of $7.89) $8.28
=====
On sales of $100,000 or more, the offering price is reduced.
The accompanying notes are an integral part of the financial statements
<PAGE>
STATEMENT OF OPERATIONS
------------------------------------------------------------------------------
For the Six Months Ended July 31, 1995 (Unaudited)
------------------------------------------------------------------------------
INVESTMENT INCOME (NOTE 1B):
Interest income allocated from Portfolio $ 2,925,811
Dividend income allocated from Portfolio (net of
withholding tax expense of $40,847) 1,914,954
Expenses allocated from Portfolio (765,754)
-----------
Total investment income $ 4,075,011
Expenses --
Compensation of Trustees not members of the
Investment Adviser's organization $ 2,506
Custodian fees 9,641
Service fees (Note 4) 77,686
Transfer agent fees 65,917
Printing and postage 48,422
Registration fees 16,325
Legal and accounting services 10,011
Amortization of organization expenses (Note 1D) 1,538
Miscellaneous 19,181
-----------
Total expenses 251,227
-----------
Net investment income $ 3,823,784
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain from Portfolio on investment
transactions (identified cost basis) $ 5,878,561
Change in unrealized appreciation of investments 24,402,054
-----------
Net realized and unrealized gain on
investments 30,280,615
-----------
Net increase in net assets resulting
from operations $34,104,399
===========
The accompanying notes are an integral part of the financial statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
------------------------------------------------------------------------------
FOR THE SIX
MONTHS ENDED FOR THE YEAR
JULY 31, 1995 ENDED
(UNAUDITED) JANUARY 31, 1995
------------- ----------------
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 3,823,784 $ 8,470,498
Net realized gain on investments 5,878,561 1,556,290
Change in unrealized appreciation
(depreciation) on investments 24,402,054 (20,258,131)
------------ ------------
Net increase (decrease) in net assets
from operations $ 34,104,399 $(10,231,343)
------------ ------------
Distributions to shareholders --
From net investment income $ (3,823,784) $ (8,249,107)
In excess of net investment income (69,837) --
From net realized gain on investment
transactions -- (4,372,413)
------------ ------------
Total distributions to shareholders $ (3,893,621) $(12,621,520)
------------ ------------
Net decrease in net assets from Fund share
transactions (Note 2) $ (7,869,693) $ (4,130,436)
------------ ------------
Net increase (decrease) in net assets $ 22,341,085 $(26,983,299)
NET ASSETS:
At beginning of year 200,418,954 227,402,253
------------ ------------
At end of year $222,760,039 $200,418,954
============ ============
The accompanying notes are an integral part of the financial statements
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED JANUARY 31,
JULY 31, 1995 -----------------------------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991
------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE --
beginning of year $ 6.840 $ 7.600 $ 7.390 $ 7.500 $ 7.060 $ 7.180
------- ------- ------- ------- ------- -------
Income (loss) from
investment operations:
Net investment
income $ 0.133 $ 0.283 $ 0.217 $ 0.342 $ 0.364 $ 0.417
Net realized and
unrealized gain
(loss) on investments 1.052 (0.623) 0.833 0.318 0.736 0.103
------- ------- ------- ------- ------- -------
Total income (loss)
from investment
operations $ 1.185 $(0.340) $ 1.050 $ 0.660 $ 1.100 $ 0.520
------- ------- ------- ------- ------- -------
Less distributions:
From net investment
income $(0.133) $(0.275) $(0.307) $(0.360) $(0.360) $(0.430)
In excess of net
investment income (0.002) -- (0.008) -- -- --
From net realized
gain on investments -- (0.145) (0.525) (0.410) (0.300) (0.198)
From paid in capital -- -- -- -- -- (0.012)
------- ------- ------- ------- ------- -------
Total distributions $(0.135) $(0.420) $(0.840) $(0.770) $(0.660) $(0.640)
------- ------- ------- ------- ------- -------
NET ASSET VALUE --
end of year $ 7.890 $ 6.840 $ 7.600 $ 7.390 $ 7.500 $ 7.060
======= ======= ======= ======= ======= =======
TOTAL RETURN<F3> 17.51% (4.45%) 15.13% 9.30% 16.26% 7.78%
RATIOS/SUPPLEMENTAL DATA
(to average daily net
assets):
Expenses<F1> 0.96%<F4> 0.91% 0.90% 0.89% 0.86% 0.89%
Net investment income 3.63%<F4> 4.05% 4.07% 4.62% 4.96% 5.99%
PORTFOLIO TURNOVER<F2> 44% 32% 51% 66%
NET ASSETS AT END OF YEAR
(000'S OMITTED) $222,760 $200,419 $227,402 $212,545 $210,197 $198,066
<FN>
-------------
<F1> Includes the Fund's share of Investors Portfolio's allocated expenses for
the six months ended July 31, 1995, for the year ended January 31, 1995 and
for the period from October 28, 1993, to January 31, 1994.
<F2> 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.
<F3> Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the record date.
<F4> Computed on an annualized basis.
</TABLE>
The accompanying notes are an integral part of the financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(1) SIGNIFICANT ACCOUNTING POLICIES
EV Traditional Investors Fund (the Fund) is a diversified series of Eaton
Vance Special Investment Trust (the Trust). Prior to a reorganization of the
Fund effective July 31, 1995, the Fund was a series of Eaton Vance Investors
Trust. The Trust is an entity of the type commonly known as a Massachusetts
business trust and is registered under the Invesment Company Act of 1940, as
amended, as an open-end management investment company. On October 28, 1993,
the Fund transferred substantially all of its investable assets to the
Investors Portfolio (the Portfolio). The Fund invests all of its investable
assets in interests in 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 (88.8% at July 31, 1995). 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 VALUATIONS -- Valuations 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.
C. FEDERAL TAXES -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders each year all of its taxable income, including any
net realized gain on investments, options and financial futures transactions.
Accordingly, no provision for federal income or excise tax is necessary.
D. DEFERRED ORGANIZATION EXPENSES -- Costs incurred by the Fund in connection
with its organization are being amortized on the straight-line basis over five
years.
E. INTERIM FINANCIAL STATEMENTS -- The interim financial statements relating
to July 31, 1995 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) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
SIX MONTHS ENDED
JULY 31, 1995
(UNAUDITED) YEAR ENDED JANUARY 31, 1995
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
-------- ---------- -------- ----------
Sales 465,227 $ 3,482,906 1,384,961 $ 9,717,293
Issued to
shareholders
electing to
receive payment of
distributions in
Fund shares 270,980 1,962,165 1,050,557 7,289,379
Redemptions (1,807,236) (13,314,764) (3,061,441) (21,137,108)
---------- ------------ ---------- ------------
Net increase
(decrease) (1,071,029) $ (7,869,693) (625,923) $ (4,130,436)
========== ============ ========== ============
------------------------------------------------------------------------------
(3) INVESTMENT TRANSACTIONS
Increases and decreases in the Fund's investment in the Portfolio for the six
months ended July 31, 1995 aggregated $3,234,265 and $15,681,766, respectively.
------------------------------------------------------------------------------
(4) SERVICE PLAN
The Fund adopted a Service Plan on July 7, 1993 designed to meet the
requirements of Rule 12b-1 under the Investment Company Act of 1940 and the
service fee requirements of the revised sales charge rule of The National
Association of Securities Dealers Inc. The Service Plan replaced the Fund's
distribution plan which became effective on July 1, 1989. The Service Plan
provides that the Fund may make service fee payments to the Principal
Underwriter, Eaton Vance Distributors, Inc., a subsidiary of Eaton Vance
Management, Authorized Firms or other persons in amounts not exceeding 0.25% of
the Fund's average daily net assets for any fiscal year. The Trustees have
implemented the Service Plan by authorizing the Fund to make quarterly service
fee payments to the Principal Underwriter and Authorized Firms in amounts not
expected to exceed 0.25% of that portion of the Fund's average daily net assets
for any fiscal year which is attributable to shares of the Fund sold by such
persons and remaining outstanding for at least twelve months. Such payments are
made for personal services and/or maintenance of shareholder accounts. During
the six months ended July 31, 1995 the Fund paid or accrued $77,686 under the
Plan to the Principal Underwriter and Authorized Firms.
<PAGE>
INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS
JULY 31, 1995
(UNAUDITED)
--------------------------------------------------------------------------
COMMON STOCKS - 61.1%
--------------------------------------------------------------------------
NAME OF COMPANY SHARES VALUE
--------------------------------------------------------------------------
AUTOMOTIVE - 1.4%
Ford Motor Co. 120,000 $ 3,465,000
------------
BANKS - 3.4%
Chase Manhattan Corp. 100,000 $ 5,362,500
Chemical Banking Corp. 61,200 3,159,450
------------
$ 8,521,950
------------
BROADCASTING & CABLE - 1.2%
Capital Cities/ABC Inc. 25,000 $ 2,918,750
------------
BUILDING MATERIALS - 0.4%
National Gypsum Co.* 20,000 $ 1,066,250
------------
BUSINESS PRODUCTS & SERVICES - 2.0%
Reuters Holdings, PLC ADR 100,000 $ 5,037,500
------------
CAPITAL GOODS - 1.0%
LaFarge Corp. 120,500 $ 2,394,937
------------
CHEMICALS - 3.6%
Loctite Corp. 28,300 $ 1,333,638
Monsanto Corp. 40,000 3,725,000
Nalco Chemical Co. 30,000 1,068,750
Praxair Inc. 100,000 2,800,000
------------
$ 8,927,388
------------
COMPUTER SOFTWARE - 1.1%
Novell Inc.* 150,000 $ 2,718,750
------------
DRUGS & MEDICAL - 3.1%
Astra AB A Free Shares 230,000 $ 7,800,473
------------
ELECTRIC UTILITIES - 2.4%
New England Electric System 90,000 $ 3,026,250
The Southern Co. 140,000 3,080,000
------------
$ 6,106,250
------------
FINANCIAL - 4.1%
Federal National Mortgage Association 40,000 $ 3,745,000
MBNA Corp. 100,000 3,587,500
MGIC Investment Corp. 60,000 3,045,000
------------
$ 10,377,500
------------
The accompanying notes are an integral part
of the financial statements
<PAGE>
PORTFOLIO OF INVESTMENTS (Continued)
--------------------------------------------------------------------------
COMMON STOCKS (Continued)
--------------------------------------------------------------------------
NAME OF COMPANY SHARES VALUE
--------------------------------------------------------------------------
FOOD & BEVERAGES - 3.2%
Coca-Cola Co. 40,000 $ 2,635,000
Nestle SA* 1,620 1,652,946
PepsiCo Inc. 80,000 3,750,000
------------
$ 8,037,946
------------
HEALTH CARE - 1.3%
Sofamor Danek Group, Inc.* 160,000 $ 3,320,000
------------
INSURANCE - 1.6%
General Re Corp. 30,000 $ 3,978,750
------------
MACHINERY - 1.1%
Caterpillar Inc. 40,000 $ 2,815,000
------------
METALS & MINING - 1.5%
J & L Specialty Steel, Inc. 175,000 $ 3,871,875
------------
NATURAL GAS - 1.1%
National Fuel Gas Co. 100,000 $ 2,800,000
------------
OIL & OIL SERVICES - 6.9%
Anadarko Petroleum Corp. 90,000 $ 3,825,000
Exxon Corp. 58,640 4,251,400
Mobil Corp. 20,000 1,955,000
Phillips Petroleum Co. 90,000 3,183,750
Triton Energy Corp. 80,000 3,990,000
------------
$ 17,205,150
------------
PAPER & FOREST PRODUCTS - 4.0%
Plum Creek Timber Co., L.P. 90,000 $ 2,216,250
Rayonier Inc. 120,000 4,665,000
Scott Paper Co. 40,000 1,835,000
Williamette Industries, Inc. 20,700 1,265,288
------------
$ 9,981,538
------------
PRINTING & PUBLISHING - 2.2%
Harcourt General, Inc. 55,000 $ 2,475,000
McGraw-Hill, Inc. 40,000 3,075,000
------------
$ 5,550,000
------------
REAL ESTATE - 4.4%
Chateau Properties, Inc. 75,000 $ 1,603,125
Colonial Properties Trust 80,000 1,940,000
Equity Residential Properties Trust 101,400 2,991,300
The accompanying notes are an integral part
of the financial statements
<PAGE>
PORTFOLIO OF INVESTMENTS (Continued)
--------------------------------------------------------------------------
COMMON STOCKS (Continued)
--------------------------------------------------------------------------
NAME OF COMPANY SHARES VALUE
--------------------------------------------------------------------------
REAL ESTATE (Continued)
ROC Communities, Inc. 116,250 2,441,250
Security Capital Industrial Trust 37,000 592,000
Shurgard Storage Centers, Inc. 61,000 1,441,125
------------
$ 11,008,800
------------
RETAILING - 1.4%
Home Depot, Inc. 80,000 $ 3,510,000
------------
SAVINGS & LOAN - 1.2%
Great Western Financial Corp. 140,000 $ 2,992,500
------------
SEMICONDUCTORS - 3.5%
Advanced Micro Devices, Inc. 70,000 $ 2,283,750
MEMC Electronic Materials, Inc. 89,000 2,681,125
Intel Corp. 60,000 3,900,000
------------
$ 8,864,875
------------
TELEPHONE UTILITIES - 3.2%
Ameritech Corp. 80,448 $ 3,891,672
Frontier Corp. 150,000 4,031,250
------------
$ 7,922,922
------------
TRANSPORTATION - 0.5%
Ryder Systems, Inc. 51,500 $ 1,281,062
------------
MISCELLANEOUS - 0.3%
Corning Inc. 25,400 $ 812,800
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST, $106,322,670) $153,287,966
------------
--------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK - 1.3%
--------------------------------------------------------------------------
NAME OF COMPANY SHARES VALUE
--------------------------------------------------------------------------
Freeport McMoRan Copper & Gold, 5s 125,000 $ 3,203,125
------------
TOTAL CONVERTIBLE PREFERRED STOCK
(IDENTIFIED COST, $2,872,500) $ 3,203,125
------------
The accompanying notes are an integral part
of the financial statements
<PAGE>
PORTFOLIO OF INVESTMENTS (Continued)
--------------------------------------------------------------------------
PREFERRED STOCK - 1.2%
--------------------------------------------------------------------------
NAME OF COMPANY SHARES VALUE
--------------------------------------------------------------------------
Bank of Boston Ser. C Adj. Rt. 37,600 $ 2,970,400
------------
TOTAL PREFERRED STOCK
(IDENTIFIED COST, $1,815,525) $ 2,970,400
------------
--------------------------------------------------------------------------
CONVERTIBLE BOND - 0.4%
--------------------------------------------------------------------------
FACE AMOUNT
NAME OF COMPANY (000 OMITTED) VALUE
--------------------------------------------------------------------------
Browning Ferris Inds., cv., 6.25s, 8/15/12 $ 1,000 $ 1,020,000
------------
TOTAL CONVERTIBLE BOND
(IDENTIFIED COST, $897,000) $ 1,020,000
------------
--------------------------------------------------------------------------
U.S. TREASURY/AGENCY OBLIGATIONS - 14.2%
--------------------------------------------------------------------------
FACE AMOUNT
NAME OF COMPANY (000 OMITTED) VALUE
--------------------------------------------------------------------------
Federal Home Loan Morgage Corp.,
8.10s, 12/15/04 $ 963 $ 976,128
Federal Home Loan Morgage Corp.,
9s, 11/15/19 767 791,032
Federal Home Loan Mortgage Corp.,
7.95s, 5/15/20 3,817 3,878,744
Federal Home Loan Mortgage Corp.,
10s, 5/15/20 2,325 2,577,100
Federal National Mortgage Association,
7.50s, 5/25/19 3,376 3,402,044
Federal National Mortgage Association,
8.50s, 7/25/19 3,883 3,951,273
Federal National Mortgage Association,
9s, 3/25/20 2,000 2,131,860
Student Loan Marketing Association,
7.875s, 9/12/95 1,000 1,002,210
U.S. Treasury Notes, 7.875s, 2/15/96 10,500 10,624,688
U.S. Treasury Notes, 7.625s, 4/30/96 3,000 3,041,475
U.S. Treasury Notes, 8.125s, 2/15/98 3,000 3,148,110
------------
TOTAL U.S. TREASURY/AGENCY OBLIGATIONS
(IDENTIFIED COST, $34,510,177) $ 35,524,664
------------
The accompanying notes are an integral part
of the financial statements
<PAGE>
PORTFOLIO OF INVESTMENTS (Continued)
--------------------------------------------------------------------------
CORPORATE BONDS - 15.9%
--------------------------------------------------------------------------
FACE AMOUNT
NAME OF COMPANY (000 OMITTED) VALUE
--------------------------------------------------------------------------
American General Finance Corp.,
8.125s, 8/15/09 $ 2,460 $ 2,624,992
Bell Telephone Co. PA, 8.35s, 12/15/30 3,000 3,438,240
Chesapeake Potomac Telephone MD,
8s, 10/15/29 1,500 1,574,715
Chesapeake Potomac Telephone MD,
8.30s, 8/1/31 1,975 2,228,254
Chesapeake Potomac Telephone VA,
8.375s, 10/1/29 1,500 1,693,560
Dayton Hudson Medium Term Note,
9.50s, 6/10/15 650 761,046
Dayton Hudson Medium Term Note,
9.35s, 6/16/20 2,590 3,029,653
Eaton Corp., 8s, 8/15/06 1,000 1,080,260
General Electric Capital Corp.,
8.625s, 6/15/08 330 371,350
General Motors Corp. 8.80s, 3/1/21 2,000 2,209,940
General Motors Corp. Medium Term Notes,
9.45s, 11/1/11 3,000 3,499,260
Inter American Development Bank,
8.875s, 6/1/09 3,000 3,568,650
Inter American Development Bank,
8.40s, 9/1/09 500 572,010
New England Telephone & Telegraph Co.,
7.875s, 11/15/29 360 386,759
Pitney Bowes Credit Corp., 9.25s, 6/15/08 1,650 1,955,465
Pitney Bowes Credit Corp., 8.55s, 9/15/09 500 563,080
Procter & Gamble Co., 8s, 10/26/29 4,740 5,133,183
Seagram (Joseph) & Sons, 9.65s, 8/15/18 1,400 1,661,128
Torchmark Corp., 8.25s, 8/15/09 1,000 1,068,200
TRW Inc., Medium Term Notes,
9.35s, 6/4/20 2,100 2,450,868
------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST, $39,012,053) $ 39,870,613
------------
The accompanying notes are an integral part
of the financial statements
<PAGE>
PORTFOLIO OF INVESTMENTS (Continued)
--------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS - 3.7%
--------------------------------------------------------------------------
FACE AMOUNT
NAME OF COMPANY (000 OMITTED) VALUE
--------------------------------------------------------------------------
CXC Inc., 5.90s, 8/1/95 $ 2,512 $ 2,512,000
Ford Motor Credit Corp., 5.73s, 8/3/95 2,656 2,655,155
Prudential Funding Corp., 5.72s, 8/7/95 4,073 4,069,117
------------
TOTAL SHORT-TERM OBLIGATIONS, AT
AMORTIZED COST $ 9,236,272
------------
TOTAL INVESTMENTS - 97.8%
(IDENTIFIED COST, $194,666,197) $245,113,040
OTHER ASSETS, LESS LIABILITIES - 2.2% 5,504,593
------------
NET ASSETS - 100% $250,617,633
============
*Non-income producing security.
The accompanying notes are an integral part
of the financial statements
<PAGE>
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
------------------------------------------------------------------------------
July 31, 1995 (Unaudited)
------------------------------------------------------------------------------
ASSETS:
Investments, at value (Note 1A) (identified cost,
$194,666,197) $245,113,040
Cash 732
Receivable for investments sold 7,038,930
Dividends receivable 282,648
Interest receivable 1,590,724
Deferred organization expenses (Note 1D) 10,316
------------
Total assets $254,036,390
LIABILITIES:
Payable for investments purchased $ 3,399,943
Payable to affiliates --
Trustees' fees 5,000
Custodian fees 6,080
Accrued expenses 7,734
-----------
Total liabilities 3,418,757
------------
NET ASSETS applicable to investors' interest in Portfolio $250,617,633
============
SOURCES OF NET ASSETS:
Net proceeds from capital contributions and
withdrawals $200,170,790
Unrealized appreciation of investments (computed
on the basis of identified cost) 50,446,843
------------
Total net assets $250,617,633
============
The accompanying notes are an integral part of the financial statements
<PAGE>
FINANCIAL STATEMENTS (Continued)
STATEMENT OF OPERATIONS
------------------------------------------------------------------------------
For the Six Months Ended July 31, 1995 (Unaudited)
------------------------------------------------------------------------------
INVESTMENT INCOME (NOTE 1B):
Interest income $ 3,224,281
Dividend income (net of withholding tax expense
of $45,080) 2,110,095
-----------
Total income $ 5,334,376
Expenses --
Investment adviser fee (Note 3) $ 732,274
Compensation of Trustees not members of the
investment adviser's organization (Note 3) 8,222
Custodian fee (Note 3) 64,230
Legal and accounting fees 28,098
Amortization of organization expenses (Note 1D) 1,583
Printing and postage 195
Miscellaneous 9,635
-----------
Total expenses 844,237
-----------
Net investment income $ 4,490,139
REALIZED AND UNREALIZED GAIN:
Net realized gain on investment transactions
(identified cost basis) $ 6,529,900
Change in unrealized appreciation on investments 26,776,299
-----------
Net realized and unrealized gain on
investments 33,306,199
-----------
Net increase in net assets resulting from
operations $37,796,338
===========
The accompanying notes are an integral part of the financial statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
------------------------------------------------------------------------------
SIX MONTHS
ENDED
JULY 31, 1995 YEAR ENDED
(UNAUDITED) JANUARY 31, 1995
------------- ----------------
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 4,490,139 $ 9,351,946
Net realized gain on investments
transactions 6,529,900 1,467,119
Change in unrealized appreciation
(depreciation) of investments 26,776,299 (20,681,070)
------------ ------------
Net increase (decrease) in net assets
from operations $ 37,796,338 $ (9,862,005)
------------ ------------
Capital transactions --
Contributions $ 15,444,125 $ 29,380,822
Withdrawals (19,780,325) (32,695,351)
------------ ------------
Decrease in net assets resulting from
capital transactions $ (4,336,200) $ (3,314,529)
------------ ------------
Total increase (decrease) in net assets $ 33,460,138 $(13,176,534)
NET ASSETS:
At beginning of period 217,157,495 230,334,029
------------ ------------
At end of period $250,617,633 $217,157,495
============ ============
------------------------------------------------------------------------------
SUPPLEMENTARY DATA
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JANUARY 31,
JULY 31, 1995 ----------------------
(UNAUDITED) 1995 1994*
------------- -------- -------
RATIOS (As a percentage
of average net assets):
Expenses 0.73%+ 0.70% 0.69%+
Net investment income 3.86%+ 4.25% 3.69%+
PORTFOLIO TURNOVER 33% 28% 15%
+ Computed on an annualized basis.
* For the period from the start of business, October 28, 1993, to January 31,
1994.
The accompanying notes are an integral part of the financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1995
(UNAUDITED)
-------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
Investors 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 in 1992. The Declaration of Trust
permits the Trustees to issue interests in the Portfolio. Investment operations
began on October 28, 1993, with the acquisition of Securities and other assets
of $221,294,780 in exchange for an interest in the Portfolio by one of the
Portfolio's investors. 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 -- Securities listed on securities exchanges or in the
NASDAQ National Market are valued at closing sales prices. Listed or unlisted
investments for which closing sale prices are not available are valued at the
mean between latest bid and asked prices. Debt investments (other than
mortgage-backed "pass-through" securities) are valued at prices furnished by a
pricing service. Mortgage-backed "pass through" securities are valued using a
matrix pricing system which takes into account closing bond valuations, yield
differentials, anticipated prepayments and interest rates. Short-term
obligations maturing in 60 days or less, are valued at amortized cost, which
approximates value. All other investments 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 on debt investments when
required for federal income tax purposes. Dividend income is recorded on the
ex-dividend date. Dividend income may include dividends that represent returns
of capital for federal income tax purposes.
C. 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. 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 requirements (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 taxable income, net realized capital gains, and any other items
of income, gain, loss, deduction or credit.
D. DEFERRED ORGANIZATION EXPENSES -- Costs incurred by the Portfolio in
connection with its organization are being amortized on the straight-line
basis over five years.
E. SECURITY TRANSACTIONS -- Investment transactions are accounted for on the
date the investments are purchased or sold. Realized gains and losses on the
sale of investments are determined on the identified cost basis.
F. INTERIM FINANCIAL INFORMATION -- The interim financial statements relating to
July 31, 1995 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, necessary for the fair presentation of the financial
statements.
-------------------------------------------------------------------------------
(2) INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than U.S. Government securities and
short-term obligations, aggregated $52,026,619 and $56,437,373, respectively.
Purchases and sales of U.S. Government securities aggregated $23,027,692 and
$27,779,172, respectively.
<PAGE>
-------------------------------------------------------------------------------
(3) 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% annually) of the
Portfolio's average daily net assets up to $300 million and at reduced rates as
daily net assets exceed that level. For the six months ended July 31, 1995, the
fee was equivalent to 0.625% (annualized) of the Portfolio's average net assets
for such period and amounted to $732,274. 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. Investors Bank & Trust Company (IBT), an affiliate of EVM and BMR,
serves as custodian of the Portfolio. Pursuant to the custodian agreement, IBT
receives a fee reduced by credits which are determined based on the average
daily cash balances the Portfolio maintains with IBT. Certain of the officers
and Trustees of the Portfolio are officers and 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 percentage of their annual fees
in accordance with the terms of the Trustees Deferred Compensation Plan. For the
six months ended July 31, 1995, no significant amounts have been deferred.
-------------------------------------------------------------------------------
(4) 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 or fund 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.
-------------------------------------------------------------------------------
(5) FEDERAL INCOME TAX BASIS OF INVESTMENTS
The cost and unrealized appreciation/(depreciation) in the value of investments
owned at July 31, 1995, as computed on a federal income tax basis, are as
follows:
Aggregate cost $194,661,083
============
Gross unrealized appreciation $ 52,115,265
Gross unrealized depreciation 1,648,422
------------
Net unrealized appreciation $ 50,446,843
============
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT MANAGEMENT
<S> <C> <C>
EV TRADITIONAL OFFICERS TRUSTEES
INVESTORS FUND JAMES B. HAWKES LANDON T. CLAY
24 Federal Street President, Trustee Chairman, Eaton
Boston, MA 02110 CLIFFORD H. KRAUSS Vance Management
Vice President DONALD R. DWIGHT
JAMES L. O'CONNOR President, Dwight Partners, Inc.
Treasurer Chairman, Newspapers of
THOMAS OTIS New England, Inc.
Secretary SAMUEL L. HAYES, III
Jacob H. Schiff Professor of
Investment Banking, Harvard
University Graduate School of
Business Administration
NORTON H. REAMER
President and Director,
United Asset Management
Corporation
JOHN L. THORNDIKE
Director, Fiduciary Company
Incorporated
JACK L. TREYNOR
Investment Adviser and
Consultant
---------------------------------------------------------------------------
INVESTORS PORTFOLIO OFFICERS TRUSTEES
24 Federal Street M. DOZIER GARDNER DONALD R. DWIGHT
Boston, MA 02110 President, Trustee President, Dwight Partners, Inc.
THOMAS E. FAUST, JR. Chairman, Newspapers of
Vice President and New England, Inc.
Portfolio Manager SAMUEL L. HAYES, III
JAMES B. HAWKES Jacob H. Schiff Professor of
Vice President, Trustee Investment Banking, Harvard
MICHAEL B. TERRY University Graduate School of
Vice President Business Administration
JAMES L. O'CONNOR NORTON H. REAMER
Treasurer President United Asset
THOMAS OTIS Management Corporation
Secretary JOHN L. THORNDIKE
Director, Fiduciary Company
Incorporated
JACK L. TREYNOR
Investment Adviser and
Consultant
</TABLE>
<PAGE>
INVESTMENT ADVISER OF
INVESTORS PORTFOLIO
Eaton Vance Management
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV TRADITIONAL INVESTORS FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 482-8260
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AND DIVIDEND
DISBURSING AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its distribution plan,
sales charges and expenses. Please read the prospectus carefully before you
invest or send money.
EV TRADITIONAL INVESTORS FUND
24 FEDERAL STREET
BOSTON, MA 02110
T-IFSRC
[LOGO]
EV
TRADITIONAL
INVESTORS
FUND
SEMI-ANNUAL
SHAREHOLDER REPORT
JULY 31, 1995
