To Shareholders
I am pleased to report that during the 11 months ending December 31, 1995, EV
Classic Investors Fund had a total return of 24.9%. That return reflects an
increase in net asset value to $11.74 per share from $9.61 per share and the
reinvestment of distributions totaling $0.245 per share.
Because of a change to allow the Funds fiscal year to close at the end of
December rather than January, this Annual Report covers a period of 11 months.
During the last 11 months of 1995, strong returns were achieved for both stocks
and bonds. The S&P 500, an unmanaged index of large-capitalization common
stocks, had a total return of 33.9%. On the bond side, the Lehman Brothers
Government/Corporate Bond Index, an unmanaged bond market index, had a total
return of 17.0%. The average performance of the universe of balanced funds
tracked by Lipper Analytical Services, Inc. for the 11-month period was 23.6%.
The returns of the Fund exceeded this average by 1.3 percentage points.
Both stocks and bonds benefited from an environment of slow but positive
economic growth, low inflation and increased optimism about the U.S. governments
ability to address its chronic budgetary deficit. Stocks also benefited from
exceptionally strong earnings, driven in part by cost-cutting and restructuring
activities.
----------------------------------------------------
EV CLASSIC INVESTORS FUND
10 LARGEST STOCK HOLDINGS*
Astra AB .......................Drugs
Chase Manhattan Corp. ..........Banking
Reuters Holdings PLC ...........Information services
Fedl Natl Mortgage Assn. .......Housing finance
Monsanto Corp. .................Chemicals
Anadarko Petroleum Corp. .......Oil, gas exploration
Deere & Co. ....................Farm machinery
Ameritech Corp. ................Telecommunications
Exxon Corp. ....................Petroleum products
General Re Corp. ...............Reinsurance
* By market value as of 12/31/95
-----------------------------------------------------
While past performance cannot guarantee future returns, we believe
that a diversified portfolio of stocks and bonds will continue to produce
desirable long-term results. That remains our goal.
[Photo of M. Dozier Gardner]
Sincerely,
/s/ M. Dozier Gardner
M. Dozier Gardner
President
February 21, 1996
<PAGE>
MANAGEMENT REPORT
An interview with Thomas E. Faust, Jr. Vice President and Manager of
Investors Portfolio.
Q. TOM, HOW WOULD YOU DESCRIBE 1995 IN TERMS OF INVESTING?
A. It was a remarkable year in many ways. Stocks experienced the best year since
1958, as measured by the returns of the S&P 500, an unmanaged index of common
stocks. And bond investors, who found most of 1994 to be an awful time for
investing, saw the rally of late 1994 continue through 1995.
In short, the economic climate was particularly good for investing and was
helped along by the Federal Reserve, which lowered short-term interest rates
twice during the year.
Q. WHAT KINDS OF STOCK INVESTMENTS PERFORMED PARTICULARLY WELL?
A. During the first half of 1995, the market was driven by gains in technology
stocks. Later in the year, technology stocks fell out of favor, and market
leadership shifted to the healthcare, financial services, capital goods and
consumer non-durables sectors.
Q. WHAT WERE SOME OF THE LARGER STOCK POSITIONS?
A. Astra AB is our largest position. This Swedish pharmaceutical company entered
into a joint venture with Merck, the U.S. pharmaceutical giant, for the U.S.
market late in 1994. This should result in an increase in profits coming out
of the U.S. in the next several years. The holdings in Astra performed well
during the year, up nearly 58% for the last 11 months of 1995.
- ------------------------------
{Photo of Thomas E. Faust, Jr.}
- -------------------------------
THOMAS E. FAUST, JR.
The second-largest holding is Chase Manhattan Corp., a New York-based global
money center bank that has agreed to merge with Chemical Banking Corporation.
Reflecting in part the anticipated merger synergies and in part a strong
banking environment, Chase Manhattan was an excellent performer for the
Portfolio, increasing in price by 82.3% during the last 11 months of 1995.
The third-largest position is Reuters Holdings PLC, a United Kingdom-based
provider of global financial information and trading systems. The company is
a strong, steady grower and its stock posted a gain of 31.6% during the last
11 months of 1995.
Q. WHAT OTHER STRONG PERFORMERS WERE AMONG THE LARGEST HOLDINGS?
A. We were fortunate to have a number of other very strong performers among the
holdings, reflecting the widespread strength of the market and a particularly
good period for the Portfolio in its stock picking. Among the other strong
performers during the 11-month period were Federal National Mortgage
Association, up 73.2%, Monsanto Co., up 66.7%, and Sofamor Danek Group, Inc.,
up 75.8%.
<PAGE>
INVESTORS PORTFOLIO
INVESTMENT ALLOCATION
AS OF 12/31/95
- ------------------------------------------
COMMON STOCK 59.6%
U.S. TREASURIES/AGENCIES 18.5%
CORPORATE BONDS 14.2%
SHORT-TERM OBLIGATIONS 5.0%
CONVERTIBLE BONDS & PREFERRED STOCK 2.7%
- ------------------------------------------
Q. WHAT WERE THE LARGEST INDUSTRY SECTORS IN WHICH THE PORTFOLIO WAS INVESTED?
A. The largest sector at the end of the year was financial stocks, accounting
for nearly 16% of the common stock portfolio. Next were utilities, basic
materials and energy, each of which comprised between 11% and 12%.
Q. WHAT ARE THE LARGEST HOLDINGS IN THE ENERGY SECTOR?
A. The largest position is in Anadarko Petroleum Corp. Anadarko is an oil and
gas exploration and production company with major areas of activity in
Algeria and offshore in the Gulf of Mexico. During the last 11 months of
1995, its stock was up 41.5%.
The other energy stock among our largest holdings is Exxon Corp., a
diversified energy company that is among the world leaders in the production,
refining and sale of petroleum products. We expect that Exxon will benefit
from growing demand for energy products around the world, with particularly
strong growth coming from emerging markets. Its stock was up by 28.2% during
the last 11 months of 1995.
Q. DO YOU SEE ANY MAJOR ECONOMIC TRENDS THAT HAVE INFLUENCED YOUR CHOICE OF
INVESTMENTS?
A. Yes. A couple of our choices are tied to what we believe is a worldwide
trend, and that is greater demand for grains and other food products. If you
believe there will be increased demand for agricultural products, there
should be increased demand for the materials and equipment used by
agriculture.
Thats a major reason weve taken a position in Deere & Co., the leading
manufacturer of farm equipment. We believe that farmers in the U.S. are in
the middle of an equipment replacement cycle, which should help companies
like Deere. This stock increased 30% during the portion of the year that it
was one of the holdings.
Another company that should benefit from the increased demand for
agricultural products though for a different reason is Monsanto Co. It has a
large and exceptionally profitable franchise in agricultural chemicals, led
by the herbicide Roundup, which is experiencing rapid growth.
Q. AFTER A VERY STRONG PERFORMANCE IN 1995, WHAT SHOULD FUND INVESTORS EXPECT IN
1996?
A. Looking forward, it is highly unlikely that the Fund will be able to sustain
the level of investment returns achieved during 1995. Average returns in
future years are more likely to be similar to the 10% average annual returns
achieved by the Fund over its history.
As seen in 1995 (and in 1994, on the downside), results in any year can vary
significantly from that average. Naturally, the Funds past performance does
not guarantee future results.
Q. HAVING SAID THAT, WHAT DO YOU EXPECT THE INVESTMENT CLIMATE IN 1996 TO BE
LIKE?
A. The most likely scenario for the U.S. economy in 1996 seems to be continued
slow growth with low inflation. Coupled with continued progress from
Washington in tackling the budgetary deficits, I believe this should set the
stage for another good year in the bond markets.
Stocks should benefit from the decline in interest rates that this scenario
suggests, but seem unlikely to get widespread support from rising earnings
expectations and positive earnings surprises such as were experienced in
1995. With valuations for stocks already at high levels on most measures,
this suggests a somewhat more cautious outlook for the stock market for 1996.
Q. HAVE YOU CHANGED YOUR INVESTMENT GOALS IN ANY WAY?
A. No. The goal of Investors Fund is to provide growth of capital and current
income, both of which are achieved through conservative investment
strategies. As a balanced fund, the Fund remains a sensible way for the
conservative investor to participate in the stock and bond markets.
- --------------------------------------------------------------------------------
Comparison of Change in Value of a $10,000 Investment in EV Classic Investors
Fund (including sales charge), the Lehman Brothers Government/Corporate Bond
Index and the S&P 500 Stock Index
From November 30, 1993, through December 31, 1995
- ---------------------------------
AVG. ANNUAL 1 LIFE OF
RETURNS YEAR FUND*
- ---------------------------------
With CDSC 25.7% 10.2%
- ---------------------------------
Without CDSC 26.7% 10.2%
- ---------------------------------
date C. Investors S&P 11/93 Lehman govt. Co. 90 day treasury
11/93+ 10000 10000 10000 10000
12/93 10151 10168 10044 10077
1/94 10523 10498 10195 10077
2/94 10286 10183 9972 10077
3/94 9912 9785 9728 10165
4/94 9983 9898 9647 10165
5/94 9979 10021 9630 10165
6/94 9765 9827 9608 10271
7/94 10009 10137 9800 10271
8/94 10189 10518 9804 10271
9/94 9953 10308 9656 10394
10/94 10045 10523 9645 10394
11/94 9840 10107 9628 10394
12/94 9788 10306 9692 10539
1/95 9922 10556 9878 10539
2/95 10269 10937 10107 10539
3/95 10477 11306 10174 10688
4/95 10705 11622 10316 10688
5/95 11110 12044 10748 10688
6/95 11256 12382 10834 10830
7/95 11464 12775 10834 10830
8/95 11652 12771 10973 10830
9/95 11798 13363 11085 10970
10/95 11778 13296 11248 10970
11/95 12070 13842 11433 10970
12/95 12398 14165 11601 11104
Past performance is not indicative 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. Source: Towers Data Systems,
Bethesda, M.D.
*Investment operations commenced on 11/2/93.
+Index information is available only at month-end; therefore, the line
comparison begins at the next month-end following the commencement of the
Fund's investment operations.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
The chart above compares the Funds return with that of a broad-based market
index. The lines on the chart represent the total returns of $10,000
hypothetical investments in the Fund, the S&P 500 and the Lehman Brothers
Government/ Corporate Bond Index.
TOTAL RETURN FIGURES
The solid colored line represents the Funds performance. The Funds total return
figure reflects Fund expenses, fees and portfolio transaction costs, and assumes
the reinvestment of income dividends and capital gain distributions. The Fund
also has a 1% contingent deferred sales charge (CDSC), that is deducted for
redemptions made within the first 12 months of purchase.
The dotted line represents the performance of the S&P 500, a broad-based, widely
recognized unmanaged index of 500 common stocks.
The black solid line represents the performance of the Lehman Brothers
Government/Corporate Bond Index, a diversified, unmanaged index of corporate and
U.S. government bonds. The indices total return figures do not reflect any
commissions or expenses that would be incurred if an investor individually
purchased or sold the securities in the indices.
The dashed line represents the performance of 90-Day U.S. Treasury Bills. It is
included to indicate how the Fund has performed relative to a portfolio of cash
equivalents. Principal and interest payments of Treasury Bills are guaranteed by
the U.S. Government.
<PAGE>
-------------------------
EV CLASSIC INVESTORS FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
December 31, 1995
- --------------------------------------------------------------------------------
ASSETS:
Investment in Investors Portfolio, (Portfolio) at
value (Note 1A) $6,549,959
Receivable for Fund shares sold 10,063
Receivable from administrator (Note 5) 14,489
Deferred organization expenses (Note 1D) 24,513
----------
Total assets $6,599,024
LIABILITIES:
Payable for Fund shares redeemed $13,255
Payable to affiliate -
Trustees' fees 63
Accrued expenses 19,308
-------
Total liabilities 32,626
----------
NET ASSETS for 559,456 shares of beneficial interest
outstanding $6,566,398
==========
SOURCES OF NET ASSETS:
Paid-in capital $5,708,306
Undistributed net investment income 5,538
Accumulated net realized loss on investments (2,127)
Unrealized appreciation of investments 854,681
----------
Total net assets $6,566,398
==========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
($6,566,398 / 559,456 shares of beneficial interest
outstanding) $11.74
======
The accompanying notes are in integral part of the financial statements.
<PAGE>
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, JANUARY 31,
1995* 1995
----------- ----------
INVESTMENT INCOME (NOTE 1B):
Interest income allocated from Portfolio $ 124,664 $ 58,442
Dividend income allocated from Portfolio (net of
withholding tax of $854 and $212,
respectively) 81,000 38,033
Expenses allocated from Portfolio (32,131) (13,787)
----------- ----------
Total investment income $ 173,533 $ 82,688
----------- ----------
Expenses -
Compensation of Trustees not members of the
Investment Advisors Organization (Note 5) $ 77 $ 203
Custodian fee (Note 5) 3,085 10,731
Distribution and service fees (Note 4) 45,709 20,456
Transfer agent fees 3,909 1,724
Printing and postage 27,870 22,705
Legal and accounting services 18,093 16,723
Registration fees 19,714 18,987
Amortization of organization expenses (Note 1D) 7,348 8,033
Miscellaneous 6,532 --
----------- ----------
Total expenses before reductions $ 132,337 $ 99,562
Deduct - Allocation of expenses to
administrator (Note 5) 14,489 47,375
----------- ----------
Net expenses $ 117,848 $ 52,187
----------- ----------
Net investment income $ 55,685 $ 30,501
REALIZED AND UNREALIZED GAIN (LOSS) FROM PORTFOLIO:
Net realized gain (loss) on investment
transactions (identified cost basis) $ 70,324 $ (22,258)
Change in unrealized appreciation of investments 941,563 (110,008)
----------- ----------
Net realized and unrealized gain (loss) on
investments $ 1,011,887 $ (132,266)
----------- ----------
Net increase (decrease) in net assets
resulting from operations $ 1,067,572 $ (101,765)
=========== ==========
*For the eleven month period ended December 31, 1995 (Note 7).
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED JANUARY 31,
DECEMBER 31, ----------------------
1995* 1995 1994**
----------- ---------- --------
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income $ 55,685 $ 30,501 $ 1,577
Net realized gain (loss) from
Portfolio 70,324 (22,258) 420
Change in unrealized appreciation
from Portfolio 941,563 (110,008) 23,126
----------- ---------- --------
Net increase (decrease) in net
assets from operations $ 1,067,572 $ (101,765) $ 25,123
----------- ---------- --------
Distributions to shareholders -
From net investment income $ (51,704) $ (30,501) $ --
In excess of net investment income -- (13,660) --
From net realized gain on investment
transactions (64,717) (420) --
From tax return of capital -- (2,374) --
----------- ---------- --------
Total distributions to
shareholders $ (116,421) $ (46,955) $ --
----------- ---------- --------
Net increase in net assets from Fund
share transactions (Note 2) $ 3,542,031 $1,557,973 $638,830
----------- ---------- --------
Net increase in net assets $ 4,493,182 $1,409,253 $663,953
NET ASSETS:
At beginning of year 2,073,216 663,963 10
----------- ---------- --------
At end of year (including
undistributed net investment income
of $5,538, $34 and $1,577,
respectively) $ 6,566,398 $2,073,216 $663,963
=========== ========== ========
*For the eleven month period ended December 31, 1995 (Note 7).
**For the period from the start of business, November 2, 1993,
to January 31, 1994.
The accompanying notes are an integral part of the financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED JANUARY 31,
DECEMBER 31, ----------------------
1995** 1995 1994***
--------- --------- --------
NET ASSET VALUE - Beginning of
year $ 9.610 $ 10.460 $ 10.000
-------- -------- --------
Income (loss) from operations:
Net investment income $ 0.135 $ 0.215 $ 0.025
Net realized and unrealized
gain (loss) on investments 2.240 (0.810) 0.435
-------- -------- --------
Total income (loss) from
operations $ 2.375 $ (0.595) $ 0.460
-------- -------- --------
Less distributions:
From net investment income $ (0.128) $ (0.166) $ --
In excess of net investment
income -- (0.074) --
From net realized gain on
investment transactions (0.117) (0.002) --
From paid-in capital -- (0.013) --
-------- -------- --------
Total distributions $ (0.245) $ (0.255) $ --
-------- -------- --------
NET ASSET VALUE - End of year $ 11.740 $ 9.610 $ 10.460
======== ======== ========
TOTAL RETURN\2/ 24.94% (5.71%) 4.60%
RATIOS/SUPPLEMENTAL DATA
(to average daily net assets):*
Expenses\1/ 3.27%+ 3.23% 1.68%+
Net investment income 1.21%+ 1.49% 1.81%+
NET ASSETS, END OF YEAR (000'S OMITTED) $ 6,566 $ 2,073 $ 664
*The expenses related to the operation of the Fund reflect an allocation of
expenses to the administrator. Had such action not been taken, the ratios
would have been as follows:
Ratios (to average daily net assets):
Expenses\1/ 3.59%+ 5.55% 4.97%+
Net investment income (loss) 0.90%+ (0.83%) (1.46%)+
\1/Includes the Fund's share of Investors Portfolio's allocated expenses.
\2/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. Total return is not
computed on an annualized basis.
**For the eleven month period ended December 31, 1995 (Note 7).
***For the period from the start of business, November 2, 1993,
to January 31, 1994.
+Computed on an annualized basis.
The accompanying notes are an integral part of the financial statements.
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
(1) SIGNIFICANT ACCOUNTING POLICIES
EV Classic Investors Fund (the Fund) is a diversified series of Eaton Vance
Special Investment Trust (the Trust). The Trust is an entity of the type
commonly known as a Massachusetts business trust and is registered under the
Investment Company Act of 1940, as amended, as an open-end management
investment company. The Fund invests all of its investable assets in interests
in the Investors 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 (2.4% at December 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, option and financial futures transactions.
Accordingly, no provision for federal income or excise tax is necessary.
Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$64,717 as capital gain dividends for its taxable year ended December 31,
1995.
D. DEFERRED ORGANIZATION EXPENSES -- Costs incurred by the Fund in connection
with its organization are being amortized on a straight-line basis over five
years.
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.
- --------------------------------------------------------------------------------
(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:
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31,
YEAR ENDED ----------------------------------------------------------
DECEMBER 31,1995** 1995 1994*
----------------------------- ----------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------------ -------------- ------------ -------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Sales 538,857 $5,611,793 377,194 $3,749,789 69,019 $694,750
Issued to shareholders electing
to receive payment of
distributions in Fund shares 10,392 114,271 4,769 45,716 -- --
Redemptions (205,441) (2,184,033) (229,784) (2,237,532) (5,551) (55,920)
------- ---------- ------- ---------- ------ --------
Net increase 343,808 $3,542,031 152,179 $1,557,973 63,468 $638,830
======= ========== ======= ========== ====== ========
*From the start of business, November 2, 1993, to January 31, 1994.
**For the eleven month period ended December 31, 1995.
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
(3) INVESTMENT TRANSACTIONS
Increases and decreases in the Fund's investment in the Portfolio for the
eleven month period ended December 31, 1995 aggregated $5,668,522 and
$2,293,314, respectively.
- --------------------------------------------------------------------------------
(4) DISTRIBUTION PLAN
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Investment Company Act of 1940. The Plan requires the Fund to pay the
principal underwriter, Eaton Vance Distributors, Inc. (EVD), amounts equal to
1/365th of 0.75% of the Fund's daily net assets, for providing ongoing
distribution services and facilities to the Fund. The Fund will automatically
discontinue payments to EVD during any period in which there are no outstanding
Uncovered Distribution Charges, which are equivalent to the sum of (i) 6.25% of
the aggregate amount received by the Fund for shares sold plus, (ii)
distribution fees calculated by applying the rate of 1% over the prevailing
prime rate to the outstanding balance of Uncovered Distribution Charges of EVD,
reduced by amounts theretofore paid to EVD. The amount payable to EVD with
respect to each day is accrued on such day as a liability of the Fund and,
accordingly, reduces the Fund's net assets. EVD earned $34,282 for the eleven
month period ended December 31, 1995, representing 0.75% (annualized) of daily
average net assets. At December 31, 1995, the amount of Uncovered Distribution
Charges of EVD calculated under the Plan was approximately $675,295.
In addition, the Plan provides that the Fund may make payments of service fees
to the Principal Underwriter, Authorized Firms and other persons in amounts not
exceeding 0.25% of the Fund's average daily net assets for each fiscal year. The
Trustees of the Fund have initially implemented this provision of the Plan by
authorizing the Fund to make payments of service fees to the Principal
Underwriter, Authorized Firms and other persons in each fiscal year of the Fund
in amounts not exceeding 0.25% (per annum) of the Fund's average daily net
assets. Provision for service fee payments for the eleven months ended December
31, 1995 amounted to $11,427. Such payments were made for personal services
and/or maintenance of shareholder accounts. Service fees are separate and
distinct from the sales commissions and distribution fees payable by the Fund to
EVD, and, as such, are not subject to automatic discontinuance when there are no
outstanding uncovered distribution charges of EVD.
Certain officers and Trustees of the Fund are officers or directors of EVD.
- -------------------------------------------------------------------------------
(5) TRANSACTIONS WITH AFFILIATES
Eaton Vance Management (EVM) serves 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 3 of the Portfolio's Notes to Financial Statements which are included
elsewhere in this report. To enhance the net income of the Fund, $14,489 of
expenses related to the operations of the Fund were allocated to EVM as
Administrator. Except as to Trustees of the Fund and the Portfolio who are not
members of EVM's or BMR's organizations, officers and Trustees receive
remuneration for their services to the Fund out of such investment adviser
fee. Investors Bank & Trust Company (IBT) serves as custodian of the Fund and
the Portfolio. Prior to November 10, 1995, IBT was an affiliate of EVM.
Pursuant to their respective custodian agreeements, IBT receives a fee reduced
by credits which are determined based on the average cash balances the Fund or
the Portfolio maintains with IBT. All significant credit balances are reported
as a reduction of expenses in the statement of operations. Certain of the
officers and Trustees of the Fund and Portfolio are officers and directors/
trustees of the above organizations.
- --------------------------------------------------------------------------------
(6) CONTINGENT DEFERRED SALES CHARGES
Shares purchased on or after January 30, 1995 and redeemed during the first
year after purchase (except shares acquired through the reinvestment of
distributions) generally will be subject to a contingent deferred sales charge
at a rate of one percent of redemption proceeds, exclusive of all
reinvestments and capital appreciation in the account. No contingent deferred
sales charge is imposed on exchanges for shares of other funds in the Eaton
Vance Classic Group of Funds or Eaton Vance Money Market Fund which are
distributed with a contingent deferred sales charge. CDSC charges amounted to
$175 for the eleven months ended December 31, 1995.
- --------------------------------------------------------------------------------
(7) CHANGE IN YEAR END
The Fund changed its fiscal year end from January 31 to December 31, effective
December 31, 1995.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
EV CLASSIC INVESTORS FUND, A SERIES OF EATON VANCE SPECIAL INVESTMENT TRUST:
We have audited the accompanying statement of assets and liabilities of EV
Classic Investors Fund, a series of Eaton Vance Special Investment Trust, as of
December 31, 1995, and the related statement of operations for the eleven month
period then ended, the year ended January 31, 1995, the statement of changes in
net assets and the financial highlights for the eleven month period then ended,
for the year ended January 31, 1995, and for the period from November 2, 1993
(start of business) to January 31, 1994. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of EV
Classic Investors Fund, a series of Eaton Vance Special Investment Trust, as of
December 31, 1995, the results of its operations for the eleven month period
then ended, and for the year ended January 31, 1995, the changes in its net
assets and the financial highlights for the eleven month period then ended, for
the year ended January 31, 1995, and for the period from November 2, 1993 (start
of business) to January 31, 1994, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
FEBRUARY 2, 1996
<PAGE>
INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- -----------------------------------------------------------------------------
COMMON STOCKS - 59.2%
- -----------------------------------------------------------------------------
NAME OF COMPANY SHARES VALUE
- -----------------------------------------------------------------------------
AUTOMOTIVE - 1.3%
Ford Motor Co. 120,000 $ 3,480,000
------------
BANKS - 3.5%
Chase Manhattan Corp. 100,000 $ 6,062,500
Chemical Banking Corp. 61,200 3,595,500
------------
$ 9,658,000
------------
BEVERAGES - 2.7%
Coca-Cola Co. 40,000 $ 2,970,000
PepsiCo, Inc. 80,000 4,470,000
------------
$ 7,440,000
------------
BROADCASTING & CABLE - 1.1%
Capital Cities/ABC, Inc. 25,000 $ 3,084,375
------------
CHEMICALS - 3.0%
Monsanto Corp. 40,000 $ 4,900,000
Praxair, Inc. 100,000 3,362,500
------------
$ 8,262,500
------------
COMPUTER & BUSINESS EQUIPMENT - 1.3%
Xerox Corp. 27,000 $ 3,699,000
------------
COMPUTER SOFTWARE - 0.5%
Novell, Inc.* 98,500 $ 1,403,625
------------
DRUGS - 3.8%
Astra AB, A Free Shares 230,000 $ 9,196,919
Pfizer, Inc. 18,900 1,190,700
------------
$ 10,387,619
------------
ELECTRIC UTILITIES - 2.5%
New England Electric System 90,000 $ 3,566,250
The Southern Co. 140,000 3,447,500
------------
$ 7,013,750
------------
ELECTRICAL EQUIPMENT - 1.0%
AMP, Inc. 70,000 $ 2,686,250
------------
ELECTRONICS - SEMICONDUCTORS - 2.3%
MEMC Electronic Materials, Inc.* 89,000 $ 2,903,625
Intel Corp. 60,000 3,405,000
------------
$ 6,308,625
------------
FINANCIAL - MISCELLANEOUS - 4.3%
Federal National Mortgage Association 40,000 $ 4,965,000
MBNA Corp. 100,000 3,687,500
MGIC Investment Corp. 60,000 3,255,000
------------
$ 11,907,500
------------
FOOD - 0.7%
Nestle SA 1,620 $ 1,790,179
------------
HOUSEHOLD PRODUCTS - 0.9%
Kimberly Clark Corp. 31,200 $ 2,581,800
------------
INFORMATION SERVICES - 2.0%
Reuters Holdings, PLC, ADR 100,000 $ 5,512,500
------------
INSURANCE - 1.7%
General Re Corp. 30,000 $ 4,650,000
------------
MACHINERY - 1.7%
Deere & Co. 135,000 $ 4,758,750
------------
MEDICAL PRODUCTS - 1.6%
Sofamor Danek Group, Inc.* 160,000 $ 4,540,000
------------
METALS & MINING - 1.2%
J & L Specialty Steel, Inc. 175,000 $ 3,281,250
------------
NATURAL GAS UTILITIES - 1.2%
National Fuel Gas Co. 100,000 $ 3,362,500
------------
OIL & GAS - EXPLORATION & PRODUCTION - 3.4%
Anadarko Petroleum Corp. 90,000 $ 4,871,250
Triton Energy Corp. 80,000 4,590,000
------------
$ 9,461,250
------------
OIL & GAS - INTEGRATED - 3.6%
Exxon Corp. 58,640 $ 4,698,530
Mobil Corp. 20,000 2,240,000
Phillips Petroleum Co. 90,000 3,071,250
------------
$ 10,009,780
------------
PAPER & FOREST PRODUCTS - 1.5%
Plum Creek Timber Co. LP 90,000 $ 2,148,750
Rayonier, Inc. 60,000 2,002,500
------------
$ 4,151,250
------------
PHOTOGRAPHY - 1.6%
Eastman Kodak Co. 65,000 $ 4,355,000
------------
PUBLISHING - 1.3%
McGraw-Hill, Inc. 40,000 $ 3,485,000
------------
REITS - 4.3%
Chateau Properties, Inc. 75,000 $ 1,687,500
Colonial Properties Trust 80,000 2,040,000
Equity Residential Properties Trust 101,400 3,105,375
ROC Communities, Inc. 116,250 2,790,000
Security Capital Industrial Trust 37,000 647,500
Shurgard Storage Centers, Inc. 61,000 1,647,000
------------
$ 11,917,375
------------
RETAIL - SPECIALTY - 1.4%
The Home Depot, Inc. 80,000 $ 3,830,000
------------
SPECIALTY CHEMICALS & MATERIALS - 0.5%
Loctite Corp. 28,300 $ 1,344,250
------------
TELEPHONE UTILITIES - 3.3%
Ameritech Corp. 80,448 $ 4,746,433
Frontier Corp. 150,000 4,500,000
------------
$ 9,246,433
------------
TRANSPORTATION - 0.0%
Canadian National Railway* 1,200 $ 18,000
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST, $103,848,344) $163,626,561
------------
- -----------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK - 1.2%
- -----------------------------------------------------------------------------
NAME OF COMPANY
- -----------------------------------------------------------------------------
Freeport McMoRan Copper & Gold, 5% 125,000 $ 3,406,250
------------
TOTAL CONVERTIBLE PREFERRED STOCK
(IDENTIFIED COST, $2,872,500) $ 3,406,250
------------
- -----------------------------------------------------------------------------
PREFERRED STOCK - 1.1%
- -----------------------------------------------------------------------------
NAME OF COMPANY SHARES VALUE
- -----------------------------------------------------------------------------
Bank of Boston, Series C,
Adjustable Rate 37,600 $ 3,083,200
------------
TOTAL PREFERRED STOCK
(IDENTIFIED COST, $1,815,525) $ 3,083,200
------------
- ----------------------------------------------------------------------------
CONVERTIBLE BOND - 0.4%
- ----------------------------------------------------------------------------
FACE AMOUNT
NAME OF COMPANY (000'S OMITTED) VALUE
- ----------------------------------------------------------------------------
Browning Ferris Industries,
6.25s, 8/15/12 $ 1,000 $ 1,002,500
------------
TOTAL CONVERTIBLE BOND
(IDENTIFIED COST, $897,856) $ 1,002,500
------------
- ----------------------------------------------------------------------------
U.S. TREASURY/AGENCY OBLIGATIONS - 18.4%
- ----------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Series 1033-E, PAC, 8.10s, 12/15/04 $ 723 $ 732,340
Federal Home Loan Mortgage Corp.,
Series 59-D, PAC, 9.70%, 1/15/16 3,147 3,237,431
Federal Home Loan Mortgage Corp.,
Series 34-C, PAC, 9s, 11/15/19 681 706,649
Federal Home Loan Mortgage Corp.,
7.95%, 5/15/20 3,236 3,279,768
Federal Home Loan Mortgage Corp.,
Series 41-F, PAC, 10s, 5/15/20 2,325 2,587,283
Federal National Mortgage Association,
7.50s, 5/25/19 2,678 2,714,839
Federal National Mortgage Association,
Series 1990 82-K, PAC,
8.50s, 7/25/19 2,924 2,963,186
Federal National Mortgage Association,
Series 1990 24-E, PAC, 9s, 3/25/20 2,000 2,153,120
U.S. Treasury Notes, 4.625s, 2/15/96 2,750 2,748,268
U.S. Treasury Notes, 7.875s, 2/15/96 10,500 10,536,078
U.S. Treasury Notes, 7.625s, 4/30/96 3,000 3,022,500
U.S. Treasury Notes, 7.375s, 11/15/97 1,800 1,868,058
U.S. Treasury Notes, 8.125s, 2/15/98 3,000 3,172,500
U.S. Treasury Notes, 7.5s, 5/15/02 10,000 11,087,500
------------
TOTAL U.S. TREASURY/AGENCY OBLIGATIONS
(IDENTIFIED COST, $49,456,986) $ 50,809,520
------------
- ----------------------------------------------------------------------------
CORPORATE BONDS - 14.1%
- ----------------------------------------------------------------------------
FACE AMOUNT
NAME OF COMPANY (000'S OMITTED) VALUE
- ----------------------------------------------------------------------------
American General Finance Corp.,
8.125s, 8/15/09 $ 2,460 $ 2,823,440
Bell Telephone Co. PA, 8.35s, 12/15/30 3,000 3,768,420
Chesapeake Potomac Telephone MD,
8s, 10/15/29 1,500 1,794,690
Chesapeake Potomac Telephone MD, 8.30s,
8/1/31 1,975 2,420,935
Chesapeake Potomac Telephone VA,
8.38s, 10/1/29 1,500 1,878,570
Dayton Hudson, Medium Term Note, 9.50s,
6/10/15 650 828,035
Dayton Hudson, Medium Term Note, 9.35s,
6/16/20 2,590 3,191,890
Eaton Corp., 8s, 8/15/06 1,000 1,148,930
General Electric Capital Corp.,
8.625s, 6/15/08 330 400,947
General Motors Corp., 8.80s, 3/1/21 2,000 2,465,060
General Motors Corp., Medium Term Note,
9.45s, 11/1/11 3,000 3,774,540
Inter American Development Bank,
8.875s, 6/1/09 3,000 3,827,040
Inter American Development Bank,
8.40s, 9/1/09 500 614,740
New England Telephone & Telegraph Co.,
7.875s, 11/15/29 360 423,666
Pitney Bowes Credit Corp.,
9.25s, 6/15/08 1,650 2,069,711
Pitney Bowes Credit Corp.,
8.55%, 9/15/09 500 604,495
Procter & Gamble Co., 8s, 10/15/29 2,345 2,798,476
Seagram (Joseph) & Sons, 9.65s, 8/15/18 1,400 1,813,630
Torchmark Corp., 8.25s, 8/15/09 1,000 1,147,140
TRW Inc., Medium Term Note,
9.35%, 6/4/20 800 1,065,240
------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST, $34,731,739) $ 38,859,595
------------
- ----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS - 5.0%
- ----------------------------------------------------------------------------
FACE AMOUNT
NAME OF COMPANY (000'S OMITTED) VALUE
- ----------------------------------------------------------------------------
Ford Motor Credit Corp., 5.91s, 1/3/96 $4,600 $ 4,597,731
General Electric Capital Corp.,
5.8s, 1/3/96 5,780 5,777,206
Melville Corp., 5.9s, 1/2/96 3,420 3,418,879
------------
TOTAL SHORT-TERM OBLIGATIONS, AT
AMORTIZED COST $ 13,793,816
------------
TOTAL INVESTMENTS - 99.4%
(IDENTIFIED COST, $207,416,766) $274,581,442
OTHER ASSETS, LESS LIABILITIES - 0.6% 1,793,358
------------
NET ASSETS - 100% $276,374,800
============
*Non-income producing security.
ADR -- American Depository Receipt.
REIT -- Real Estate Investment Trust.
PAC -- Planned Amortization Class.
The accompanying notes are an integral part of the financial statements
<PAGE>
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
- ------------------------------------------------------------------------------
December 31, 1995
- ------------------------------------------------------------------------------
ASSETS:
Investments, at value (Note 1A) (identified cost,
$207,416,766) $274,581,442
Cash 3,199
Interest receivable 1,344,421
Dividends receivable 454,486
Tax reclaim receivable 5,786
Deferred organization expenses (Note 1D) 8,977
------------
Total assets $276,398,311
LIABILITIES:
Payable to affiliates --
Trustees' fees $ 5,000
Accrued expenses and other liabilities 18,511
-------
Total liabilities 23,511
------------
NET ASSETS applicable to investors' interest in Portfolio $276,374,800
============
SOURCES OF NET ASSETS:
Net proceeds from capital contributions and
withdrawals $209,210,124
Unrealized appreciation of investments (computed on
the basis of identified cost) 67,164,676
------------
Total net assets $276,374,800
============
The accompanying notes are an integral part of the financial statements
<PAGE>
STATEMENT OF OPERATIONS
- ------------------------------------------------------------------------------
YEAR ENDED
---------------------------
DECEMBER 31, JANUARY 31,
1995* 1995
------------ -------------
INVESTMENT INCOME (NOTE 1B):
Interest income $ 6,252,081 $ 6,511,359
Dividend income (net of withholding tax of
$45,080 and $23,221, respectively) 4,053,689 4,385,712
------------ ------------
Total income $ 10,305,770 $ 10,897,071
------------ ------------
Expenses --
Investment adviser fee (Note 3) $ 1,418,502 $ 1,375,751
Compensation of Trustees not members of the
Investment Adviser's
organization (Note 3) 11,324 15,858
Custodian fee (Note 3) 126,583 114,290
Printing 195 1,811
Legal and accounting services 40,902 31,953
Registration fees 635 273
Amortization of organization expenses
(Note 1D) 2,922 3,194
Miscellaneous 12,397 1,995
------------ ------------
Total expenses 1,613,460 1,545,125
------------ ------------
Net investment income $ 8,692,310 $ 9,351,946
------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on investment transactions
(identified cost basis) $ 9,116,976 $ 1,467,119
Change in unrealized appreciation on
investments 43,494,132 (20,681,070)
------------ ------------
Net realized and unrealized gain (loss) on
investments 52,611,108 (19,213,951)
------------ ------------
Net increase (decrease) in net assets
resulting from operations $ 61,303,418 $ (9,862,005)
============ ============
*For the eleven month period ended December 31, 1995 (Note 6).
The accompanying notes are an integral part of the financial statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------
YEAR ENDED JANUARY 31,
YEAR ENDED ------------------------------
DECEMBER 31, 1995** 1995 1994*
-------------------- -------------- --------------
INCREASE (DECREASE) IN
NET ASSETS:
From operations --
Net investment
income $ 8,692,310 $ 9,351,946 $ 2,135,513
Net realized gain on
investment transactions 9,116,976 1,467,119 3,127,776
Change in unrealized
appreciation of
investments 43,494,132 (20,681,070) 3,139,232
------------ ------------ ------------
Net increase
(decrease) in
net assets from
operations $ 61,303,418 $ (9,862,005) $ 8,402,521
------------ ------------ ------------
Capital transactions --
Contributions $ 32,319,917 $ 29,380,822 $230,439,927
Withdrawals (34,406,030) (32,695,351) (8,608,439)
------------ ------------ ------------
Increase
(decrease) in
net assets
resulting from
capital
transactions $ (2,086,113) $ (3,314,529) $221,831,488
------------ ------------ ------------
Total increase
(decrease) in
net assets $ 59,217,305 $(13,176,534) $230,234,009
NET ASSETS:
At beginning of year 217,157,495 230,334,029 100,020
------------ ------------ ------------
At end of year $276,374,800 $217,157,495 $230,334,029
============ ============ ============
- ------------------------------------------------------------------------------
SUPPLEMENTARY DATA
- ------------------------------------------------------------------------------
YEAR ENDED JANUARY 31,
YEAR ENDED ------------------------------
DECEMBER 31, 1995** 1995 1994*
-------------------- -------------- --------------
RATIOS (to average daily
net assets):
Expenses 0.71%+ 0.70% 0.69%+
Net investment income 3.83%+ 4.25% 3.69%+
PORTFOLIO TURNOVER 47% 28% 15%
+ Computed on an annualized basis.
* For the period from the start of business, October 28, 1993, to
January 31, 1994.
** For the eleven month period ended December 31, 1995 (Note 6).
The accompanying notes are an integral part of the financial statements
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
- ------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
Investors Portfolio (the "Portfolio") is registered under the Investment
Company Act of 1940, as a diversified, open-end, management investment
company, which was organized as a trust under the laws of the State of New
York 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 accretion or amortization of premium or discount on debt
investments. Dividend income is recorded on the ex-dividend date. Dividend
income may include distributions 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
Internal Revenue 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 a 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.
- -----------------------------------------------------------------------------
(2) INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than U.S. Government securities and
short-term obligations, aggregated $81,054,092 and $82,289,447, respectively.
Purchases and sales of U.S. Government securities aggregated $31,432,461 and
$31,781,676, respectively.
- ------------------------------------------------------------------------------
(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 eleven month period ended December
31, 1995, the fee was equivalent to 0.625% (annualized) of the Portfolio's
average daily net assets for such period and amounted to $1,418,502. 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), serves
as custodian of the Portfolio. Prior to November 10, 1995, IBT was an affiliate
of EVM. 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. All significant credit balances are reported as a
reduction of expenses in the Statement of Operations. Certain of the officers
and Trustees of the Portfolio are officers and directors/trustees of the above
organizations.
- ------------------------------------------------------------------------------
(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 December 31, 1995, as computed on a federal income tax basis, are as
follows:
Aggregate cost $206,943,275
============
Gross unrealized appreciation $ 68,284,609
Gross unrealized depreciation 646,442
------------
Net unrealized appreciation $ 67,638,167
============
- ------------------------------------------------------------------------------
(6) CHANGE IN FISCAL YEAR END
The Portfolio changed its fiscal year end from January 31, to December 31,
effective December 31, 1995.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- ------------------------------------------------------------------------------
TO THE BOARD OF TRUSTEES AND INVESTORS OF
INVESTORS PORTFOLIO:
We have audited the accompanying statement of assets and liabilities of
Investors Portfolio, including the portfolio of investments, as of December 31,
1995, the related statement of operations for the eleven month period then ended
and for the year ended January 31, 1995 and the statement of changes in net
assets and supplementary data for the eleven month period then ended, for the
year ended January 31, 1995, and for the period from October 28, 1993 (start of
business) to January 31, 1994. These financial statements and supplementary data
are the responsibility of the Portfolio's management. Our responsibility is to
express an opinion on these financial statements and supplementary data based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and supplementary
data are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and supplementary data referred to
above present fairly, in all material respects, the financial position of
Investors Portfolio as of December 31, 1995, the results of its operations for
the eleven months then ended and for the year ended January 31, 1995, and the
changes in its net assets and the supplementary data for the eleven month period
then ended, for the year ended January 31, 1995 and for the period from October
28, 1993 (start of business) to January 31, 1994, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
FEBRUARY 2, 1996
<PAGE>
---------------------
INVESTMENT MANAGEMENT
EV CLASSIC OFFICERS TRUSTEES
INVESTORS FUND JAMES B. HAWKES M. DOZIER GARDNER
24 Federal Street President, Trustee President, Eaton Vance
Boston, MA 02110 CLIFFORD H. KRAUSS Management
Vice President DONALD R. DWIGHT
JAMES L. O'CONNOR President, Dwight
Treasurer Partners, Inc.
THOMAS OTIS Chairman, Newspapers of
Secretary New England, Inc.
SAMUEL L. HAYES, III
Jacob H. Schiff
Professor of
Investment Banking,
Harvard
University Graduate
School of
Business Administration
NORTON H. REAMER
President, 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
Boston, MA 02110 M. DOZIER GARDNER DONALD R. DWIGHT
President, Trustee President, Dwight
JAMES B. HAWKES Partners, Inc.
Vice President, Trustee Chairman, Newspapers of
THOMAS E. FAUST, JR. New England, Inc.
Vice President and SAMUEL L. HAYES, III
Portfolio Manager Jacob H. Schiff
MICHAEL B. TERRY Professor of
Vice President Investment Banking,
JAMES L. O'CONNOR Harvard University
Treasurer Graduate School of
THOMAS OTIS Business Administration
Secretary NORTON H. REAMER
President, United Asset
Management Corporation
JOHN L. THORNDIKE
Director, Fiduciary
Company Incorporated
JACK L. TREYNOR
Investment Adviser and
Consultant
<PAGE>
INVESTMENT ADVISER OF
INVESTORS PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
Administrator of
EV CLASSIC 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
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
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 CLASSIC INVESTORS FUND
24 FEDERAL STREET
BOSTON, MA 02110
[logo]
[picture]
EV CLASSIC
INVESTORS
FUND
ANNUAL SHAREHOLDER REPORT
DECEMBER 31, 1995
C-IFSRC-2/96