EATON VANCE SPECIAL INVESTMENT TRUST
N-30D, 1997-09-05
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<PAGE>
 
 
[LOGO OF EATON VANCE                         [PHOTO OF FINANCIAL NEWSPAPER
    APPEARS HERE]                             AND CALCULATOR APPEARS HERE]

Investing for the 21st Century


Semiannual Report June 30, 1997


[PHOTO OF NYSE FLAG APPEARS HERE]


                                      EV
                                   MARATHON
                                 TOTAL RETURN
                                     FUND


                                  Eaton Vance
                     Global Management-Global Distribution

[PHOTO OF FLOOR OF NYSE APPEARS HERE]
 
                                                                        Marathon







<PAGE>
 
EV Marathon Total Return Fund as of June 30, 1997
- --------------------------------------------------------------------------------
INVESTMENT UPDATE
- --------------------------------------------------------------------------------

[PHOTO OF TIMOTHY P. O'BRIEN
 PORTFOLIO MANAGER APPEARS HERE]

Timothy P. O'Brien
Portfolio Manager

Investment Environment
- ------------------------------------------
   The Economy

 .  Economic conditions in the U.S. were very favorable in the first half of
   1997. Gross Domestic Product (GDP) increased at an annualized rate of 4.9%
   during the first quarter. In the second quarter, the economy slowed
   somewhat, with advance estimates showing an annualized GDP increase of 2.2%.

 .  Unemployment remained low throughout the period, hitting a 24-year low of
   4.8% in May and rising slightly to 5.0% in June.

 .  Inflation was low throughout the first half of the year despite continued
   economic growth and a tight labor market. During the first half of 1997, the
   Consumer Price Index (CPI) rose at an annual rate of only 1.4%, the slowest
   rate of increase since 1986.

   The Markets

 .  The sustained growth of the U.S. economy and low inflation have helped propel
   prices of large capitalization stocks to record levels. In the six months
   ended June 30, 1997, the S&P 500 Index had a total return of 20.6%.*

 .  An increase in volatility has accompanied higher stock valuations. Within a
   six-week period in March and April, the S&P 500 Index declined almost 10% and
   then fully recovered to reach new record highs.*

 .  Electric utility and telephone company stocks have lagged the broader stock
   market. Both industries are experiencing significant change brought on by
   deregulation.

- --------------------------------------------------------------------------------
Mutual fund shares are not insured by the FDIC and are not deposits or other
obligations of, or guaranteed by, any depository institution. Shares are subject
to investment risks, including possible loss of principal invested.
- --------------------------------------------------------------------------------

The Fund
- --------------------------------------------------------------------------------
   The Past Six Months

 .  During the six months ended June 30, 1997, EV Marathon Total Return Fund had
   a total return of 5.2%./1/ This return resulted from a decrease in net asset
   value to $9.93 per share on June 30, 1997 from $10.10 per share on December
   31, 1996, and the reinvestment of $0.141 per share in income dividends and
   $0.515 per share in capital gains distributions./2/

 .  By comparison, the total return of the Standard & Poor's Utility Index, an
   unmanaged index of utility stocks, was 2.3% during this period.*

   Management Discussion

 .  In the first half of 1997, we have increased weightings in the better-
   performing financial and real estate investment trust (REIT) groups. This has
   added stability to the Fund and enhanced its performance. We have also added
   to the Fund's telecommunications holdings - in particular, GTE, which is now
   the Fund's top holding. GTE is a well-run, full-service telecommunications
   provider and has been mentioned as a prime acquisition candidate for one of
   the big long distance companies.

 .  The Fund's 2.4% yield compares favorably to that of the broader market S&P
   500 Index which, at 1.7%, is near an historical low./3/ With this yield
   advantage, utility stocks are a compelling vehicle for investors seeking both
   income and capital appreciation.

- --------------------------------------------------------------------------------
/1/  This return does not include the maximum 5% contingent deferred sales
     charge.

/2/  Returns are calculated by determining the percentage change in net asset
     value (NAV) with all distributions reinvested. SEC average annual returns
     reflect applicable CDSC on the following schedule: 5%-1st and 2nd years; 
     4%-3rd year; 3%-4th year; 2%-5th year; 1%-6th year. Past performance is no
     guarantee of future results. The value of an investment in the Fund will
     fluctuate so that shares, when redeemed, may be worth more or less than
     their original cost.

/3/  Yields are as of 6/30/97. The Fund's SEC yield is calculated, using an
     SEC standardized formula, by dividing the net investment income per share
     of the Fund during the 30-day period prior to 6/30/97 by the net asset
     value per share on 6/30/97 and annualizing the resulting figure. Yield
     calculations do not reflect the deduction of any contingent deferred sales
     charges.

/4/  Sector weighting and top 10 holdings are as of 6/30/97 only and may not be
     representative of the Portfolio's current or future investments. Top 10
     holdings account for 38.7% of the Portfolio's investments, determined by
     dividing the total market value of the holdings by the total net assets of
     the Portfolio.

 *   It is not possible to invest directly in an index or average.

- --------------------------------------------------------------------------------

Fund Information
as of June 30, 1997

<TABLE> 
<CAPTION> 
Average Annual Total Returns/2/      
- ---------------------------------------------
<S>                                     <C> 
One Year                                6.6%
Life of Fund (11/1/93)                  5.7
</TABLE> 

<TABLE> 
<CAPTION> 
SEC Average Annual Total Returns/2/
- ---------------------------------------------
<S>                                     <C> 
One Year                                1.8%
Life of Fund (11/1/93)                  5.0
</TABLE> 

[PIE CHART APPEARS HERE]

<TABLE> 
<CAPTION> 
Portfolio Sector Weighting/4/
- ---------------------------------------------
As a percentage of total net assets
<S>                                   <C> 
Electric Utilities                    36.2%
REITS                                 26.0%
Telephone Utilities                   19.2%
Natural Gas Utilities                 10.1%
Financial                              4.1%
Cash/Other                             4.4%
</TABLE> 

<TABLE>
<CAPTION>
Ten Largest Holdings/4/
- ---------------------------------------------
As a percentage of total net assets
<S>                                    <C>
GTE Corp.                              4.9%
Criimi Mae, Inc.                       4.9
Power Gen                              4.2
ENI ADR                                4.1
CINergy                                3.7
NIPSCO Industries                      3.7
Sonat, Inc.                            3.7
DPL Inc.                               3.5
Bellsouth Corp.                        3.3
Fidelity Federal Bank                  2.8
</TABLE>

                                       2
<PAGE>
 
EV Marathon Total Return Fund as of June 30, 1997

FINANCIAL STATEMENTS (Unaudited)

Statement of Assets and Liabilities                                         

<TABLE> 
<CAPTION> 

As of June 30, 1997

Assets
- --------------------------------------------------------------------------------
<S>                                                                 <C> 
Investment in Total Return Portfolio, at value (Note 1A)                       
    (identified cost, $38,057,946)                                  $44,256,237
Deferred organization expenses (Note 1D)                                 16,487
- --------------------------------------------------------------------------------
Total assets                                                        $44,272,724
- --------------------------------------------------------------------------------

Liabilities
- --------------------------------------------------------------------------------
Payable for Fund shares redeemed                                    $   188,266
Payable to affiliate for Trustees' fees (Note 4)                            420
Accrued expenses                                                         50,873
- --------------------------------------------------------------------------------
Total liabilities                                                   $   239,559
- --------------------------------------------------------------------------------
Net Assets for 4,434,929 shares of
    beneficial interest outstanding                                 $44,033,165
- --------------------------------------------------------------------------------

Sources of Net Assets
- --------------------------------------------------------------------------------
Paid-in capital                                                     $36,509,390
Accumulated undistributed net realized gain on
    investments (computed on the basis of                                
    identified cost)                                                  1,090,551 
Accumulated undistributed net investment income                         234,933
Net unrealized appreciation of investments (computed
    on the basis of identified cost)                                  6,198,291
- --------------------------------------------------------------------------------
Total                                                               $44,033,165
- --------------------------------------------------------------------------------

Net Asset Value, Offering and Redemption
Price Per Share (Note 6)
- --------------------------------------------------------------------------------
($44,033,165/4,434,929 shares of
     beneficial interest outstanding)                               $      9.93
- --------------------------------------------------------------------------------

<CAPTION> 

Statement of Operations

For the Six Months Ended
June 30, 1997

Investment Income (Note 1B)
- --------------------------------------------------------------------------------
<S>                                                                 <C> 
Dividend income allocated from Portfolio
    (net of foreign withholding taxes, $10,494)                     $ 1,093,291
Interest income allocated from Portfolio                                232,943
Expenses allocated from Portfolio                                      (172,159)
- --------------------------------------------------------------------------------
Total investment income from Portfolio                              $ 1,154,075
- --------------------------------------------------------------------------------

Expenses
- --------------------------------------------------------------------------------
Compensation of Trustees not members of the
    Administrator's organization (Note 4)                           $       818
Distribution and service fees (Note 5)                                  230,283
Transfer and dividend disbursing agent fees                              27,040
Printing and postage                                                     18,235
Legal and accounting services                                             9,181
Amortization of organization expenses (Note 1D)                           3,982
Registration fees                                                         3,894
Custodian fee (Note 1F)                                                   2,512
Miscellaneous                                                             5,573
- --------------------------------------------------------------------------------
Total expenses                                                      $   301,518
- --------------------------------------------------------------------------------

Net investment income                                               $   852,557
- --------------------------------------------------------------------------------


Realized and Unrealized
Gain (Loss) from Portfolio
- --------------------------------------------------------------------------------
Net realized gain --
    Investment transactions (identified cost basis)                 $ 1,077,078
    Foreign currency transactions                                         5,963
- --------------------------------------------------------------------------------
Net realized gain on investment transactions                        $ 1,083,041
- --------------------------------------------------------------------------------
 Change in unrealized appreciation --
    Investment transactions                                         $   335,480
    Foreign currency transactions                                          (399)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation                                    
    of investments                                                  $   335,081 
- --------------------------------------------------------------------------------

Net realized and unrealized gain on investments                     $ 1,418,122
- --------------------------------------------------------------------------------

Net increase in net assets resulting from operations                $ 2,270,679
- --------------------------------------------------------------------------------
</TABLE> 

                       See notes to financial statements

                                       3
<PAGE>
 
EV Marathon Total Return Fund as of June 30, 1997

FINANCIAL STATEMENTS CONT'D

Statements of Changes in Net Assets

<TABLE> 
<CAPTION> 

                                           Six Months Ended
Increase (Decrease)                        June 30, 1997      Year Ended
in Net Assets                              (Unaudited)        December 31, 1996
- --------------------------------------------------------------------------------
<S>                                        <C>                <C> 
From operations --
  Net investment income                        $    852,557        $  2,616,920
  Net realized gain on investments                1,083,041           4,659,323
  Net change in unrealized appreciation                            
    of investments                                  335,081          (4,070,053)
- --------------------------------------------------------------------------------
Net increase in net assets                                         
  from operations                              $  2,270,679        $  3,206,190
- --------------------------------------------------------------------------------
Distributions to shareholders (Note 2) --                          
  From net investment income                   $   (666,884)       $ (2,572,063)
  From net realized gain on investments          (2,366,912)           (353,305)
- --------------------------------------------------------------------------------
Total distributions to shareholders            $ (3,033,796)       $ (2,925,368)
- --------------------------------------------------------------------------------
Transactions in shares of beneficial                               
  interest (Note 3)--                                              
  Proceeds from sale of shares                 $  1,598,588        $  6,358,519
  Net asset value of shares issued to                              
    shareholders in payment of                                     
    distributions declared                        2,478,742           2,258,766 
  Cost of shares redeemed                        (9,931,158)        (16,488,942)
- --------------------------------------------------------------------------------
Net decrease in net assets from                                    
  Fund share transactions                      $ (5,853,828)       $ (7,871,657)
- --------------------------------------------------------------------------------
                                                                   
Net decrease in net assets                     $ (6,616,945)       $ (7,590,835)
- --------------------------------------------------------------------------------
                                                                   
Net Assets                                                         
- --------------------------------------------------------------------------------
At beginning of period                         $ 50,650,110        $ 58,240,945
- --------------------------------------------------------------------------------
At end of period                               $ 44,033,165        $ 50,650,110
- --------------------------------------------------------------------------------
                                                                   
Accumulated 
undistributed net                                               
investment income                                                  
included in net assets                                             
- --------------------------------------------------------------------------------
At end of period                               $    234,933        $     49,260
- --------------------------------------------------------------------------------
</TABLE> 

                       See notes to financial statements

                                       4
<PAGE>
 
EV Marathon Total Return Fund as of June 30, 1997

FINANCIAL STATEMENTS CONT'D

Financial Highlights
<TABLE> 
<CAPTION> 
                                                   Six Months Ended                      Year Ended December 31,
                                                   June 30, 1997         ------------------------------------------------------
                                                   (Unaudited)             1996           1995           1994          1993*
- -------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>                   <C>            <C>            <C>           <C> 
Net asset value -- Beginning of period                  $10.1000         $10.0700       $  8.3000      $ 9.9300      $ 10.0000
- -------------------------------------------------------------------------------------------------------------------------------

Income (loss) from operations
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income                                   $ 0.1841         $ 0.4980       $  0.3157      $ 0.3638      $  0.0409
Net realized and unrealized gain (loss) on 
  investments                                             0.3019           0.0910          1.8173       (1.5988)       (0.0559)++
- -------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations                     $ 0.4860         $ 0.5890       $  2.1330      $(1.2350)     $ (0.0150)
- -------------------------------------------------------------------------------------------------------------------------------

Less distributions
- -------------------------------------------------------------------------------------------------------------------------------
From net investment income                              $(0.1410)        $(0.4890)      $ (0.2834)     $(0.3535)     $ (0.0461)
In excess of net investment income                            --               --         (0.0796)           --             --
From net realized gain on investments                    (0.5150)         (0.0700)             --            --             --
From tax return of capital                                    --               --              --       (0.0415)       (0.0089)
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions                                     $(0.6560)        $(0.5590)      $ (0.3630)     $(0.3950)     $ (0.0550)
- -------------------------------------------------------------------------------------------------------------------------------

Net asset value -- End of period                        $ 9.9300         $10.1000       $ 10.0700      $ 8.3000      $  9.9300
- -------------------------------------------------------------------------------------------------------------------------------

Total Return/(1)/                                           5.23%            5.97%          26.31%       (12.70)%        (0.15)%
- -------------------------------------------------------------------------------------------------------------------------------

Ratios/Supplemental Data
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted)                 $ 44,033         $ 50,650       $  58,241      $ 26,210      $  11,519
Ratio of net expenses to average daily net                 
  assets/(2)/                                               2.04%+           2.05%           2.11%         2.07%          0.68%+
Ratio of net investment income to average daily           
  net assets                                                3.68%+           4.77%           3.37%         3.95%          3.38%+
</TABLE> 

*     For the period from the start of business, November 1, 1993, to December
      31, 1993.
+     Annualized.
++    The per share amount is not in accord with the net realized and unrealized
      gain (loss) for the period because of timing of the sales of Fund shares
      and the amount of per share realized and unrealized gains and losses at
      such time.
/(1)/ 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 payable date. Total return is not
      computed on an annualized basis.
/(2)/ Includes the Fund's share of the Portfolio's allocated expense.

                       See notes to financial statements

                                       5


<PAGE>
 
EV Marathon Total Return Fund as of June 30, 1997 

NOTES TO FINANCIAL STATEMENTS (Unaudited)


1 Significant Accounting Policies
  ------------------------------------------------------------------------------
  EV Marathon Total Return Fund (the Fund), is a non-diversified 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 is a series in the Eaton Vance Special Investment
  Trust. The Fund invests all of its investable assets in interests in the Total
  Return 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
  (10.5% at June 30, 1997). 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 -- Valuation of securities by the Portfolio is
  discussed in Note 1A 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.

  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. 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 Use of Estimates -- The preparation of financial statements in conformity
  with generally accepted accounting principles requires management to make
  estimates and assumptions that affect the reported amounts of assets and
  liabilities at the date of the financial statements and the reported amounts
  of income and expense during the reporting period. Actual results could differ
  from those estimates.

  F Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
  custodian to the Fund. Pursuant to the custodian agreement, IBT receives a fee
  reduced by credits which are determined based on the average daily cash
  balances the Fund maintains with IBT. All significant credit balances used to
  reduce the Fund's custodian fees are reported as a reduction of expenses on
  the Statement of Operations.

  G Other -- Investment transactions are accounted for on a trade date basis.

  H Interim Financial Information -- The interim financial statements relating
  to June 30, 1997 and the six month 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 Distributions to Shareholders
  ------------------------------------------------------------------------------
  The Fund's policy is to distribute monthly substantially all of the net
  investment income allocated to the Fund by the Portfolio (less the Fund's
  direct expenses) and to distribute at least annually substantially all of its
  net realized capital gains. Distributions are paid in the form of additional
  shares of the Fund or, at the election of the shareholder, in cash. The Fund
  distinguishes between distributions on a tax basis and a financial reporting
  basis. Generally accepted accounting principles require that only
  distributions in excess of tax basis earnings and profits be reported in the
  financial statements as a return of capital. Differences in the recognition or
  classification of income between the financial statements and tax earnings and
  profits which result in over distributions only for financial statement
  purposes are classified as distributions in excess of net investment income or
  accumulated net realized gains. Permanent differences between book and tax
  accounting relating to distributions are reclassified to paid-in capital.


                                       6
<PAGE>
 
EV Marathon Total Return Fund as of June 30, 1997 

NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D


3 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 follow:
<TABLE> 
<CAPTION> 
                                           Six Months Ended
                                           June 30, 1997      Year Ended
                                           (Unaudited)        December 31, 1996
  ------------------------------------------------------------------------------
  <S>                                      <C>                <C> 
  Sales                                             160,620             626,317
  
  Issued to shareholders electing to
    receive payments of distributions 
    in Fund shares                                  262,602             223,945

  Redemptions                                    (1,001,440)         (1,623,468)
  ------------------------------------------------------------------------------

  Net decrease                                     (578,218)           (773,206)
  ------------------------------------------------------------------------------
</TABLE> 

4 Transactions with Affiliates
  ------------------------------------------------------------------------------
  Eaton Vance Management (EVM) serves 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.

  Except as to Trustees of the Fund and the Portfolio who are not members of
  EVM's and BMR's organization, officers and Trustees receive remuneration for
  their services to the Fund out of the investment adviser fee earned by BMR.
  Certain of the officers and Trustees of the Fund and the Portfolio are
  officers and directors/trustees of the above organizations.


5 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 1/365 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 approximately equivalent
  to the sum of (i) 5% 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 the aggregate amount of contingent deferred sales
  charges (see Note 6) and 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. Such
  payments would cease upon termination of the distribution agreement (unless
  made in accordance with another distribution agreement). As a result, the Fund
  does not accrue amounts which may become payable to EVD in the future because
  the conditions for recording any contingent liability under generally accepted
  accounting principles have not been satisfied. EVD earned $173,928 for the six
  months ended June 30, 1997, representing 0.75% (annualized) of average daily
  net assets. At June 30, 1997, the amount of Uncovered Distribution Charges of
  EVD calculated under the Plan was approximately $849,000.

  In addition, the Plan authorizes the Fund to 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 have implemented the Plan by authorizing the Fund to make
  quarterly payments of service fees to the Principal Underwriter and Authorized
  Firms in amounts not expected to exceed 0.25% of the Fund's average daily net
  assets for each fiscal year based on the value of Fund shares sold by such
  persons and remaining outstanding for at least twelve months. During the six
  months ended June 30, 1997, the Fund provided $56,355 under the Plan to the
  Principal Underwriter and Authorized Firms. 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 of the officers of the Fund and Directors of the Corporation are
  officers or directors of EVD.

                                       7
<PAGE>
 
EV Marathon Total Return Fund as of June 30, 1997 

NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D


6 Contingent Deferred Sales Charge
  ------------------------------------------------------------------------------
  A contingent deferred sales charge (CDSC) is imposed on any redemption of Fund
  shares made within six years of purchase. Generally, the CDSC is based upon
  the lower of the net asset value at date of redemption or date of purchase. No
  charge is levied on shares acquired by reinvestment of dividends or capital
  gains distributions. For Fund shares purchased prior to August 1, 1994, the
  CDSC was imposed at declining rates that begin at 6% in the first year of
  redemption after purchase, declining one percentage point each year. For Fund
  shares purchased on or after August 1, 1994, the CDSC will be imposed at
  declining rates beginning at 5% in the first and second years of redemption
  after purchase, declining one percentage point in each subsequent year. No
  CDSC is levied on shares which have been sold to EVM or its affiliates or to
  their respective employees or clients. CDSC charges are paid to EVD to reduce
  the amount of Uncovered Distribution Charges calculated under the Fund's
  Distribution Plan. CDSC charges received when no Uncovered Distribution
  Charges exist will be credited to the Fund. EVD received approximately
  $112,000 of CDSC paid by shareholders for the six months ended June 30, 1997.


7 Investment Transactions
  ------------------------------------------------------------------------------
  Increases and decreases in the Fund's investment in the Portfolio for the six
  months ended June 30, 1997, aggregated $2,008,716 and $11,192,131,
  respectively.

                                       8
<PAGE>
 
Total Return Portfolio as of June 30, 1997

PORTFOLIO OF INVESTMENTS (Unaudited)

Common Stocks -- 89.4%        
<TABLE> 
<CAPTION> 
Security                               Shares               Value                      
- ---------------------------------------------------------------------------
<S>                                    <C>                  <C> 
Banks and Money Services -- 0.0%
- ---------------------------------------------------------------------------
Echelon International Corp.*                   1            $         20
- ---------------------------------------------------------------------------
                                                            $         20
- ---------------------------------------------------------------------------

Broadcasting and Cable -- 0.5%
- ---------------------------------------------------------------------------
Ovation, Inc.                            238,168            $  2,214,962
- ---------------------------------------------------------------------------
                                                            $  2,214,962
- ---------------------------------------------------------------------------

Electric Utilities -- 36.1%
- ---------------------------------------------------------------------------
Carolina Power & Light Co.               200,000            $  7,175,000
Central Louisiana Electric Co.           220,000               6,187,500
Cilcorp, Inc.                            230,000               9,473,125
CINergy Corp.                            450,000              15,665,625
DPL, Inc.                                600,000              14,775,000
DQE, Inc.                                400,000              11,300,000
Electric De Portugal ADR                   4,000                 144,000
Empresa Nacional Electric ADR             25,000               2,126,563
FPL Group, Inc.                          150,000               6,909,375
LG & E Energy Corp.                      198,000               4,368,375
Long Island Lighting Co.                 400,000               9,200,000
National Grid Holdings                   800,000               2,922,480
NIPSCO Industries, Inc.                  375,000              15,492,188
Pinnacle West Capital Corp.              350,000              10,521,875
PowerGen PLC                           1,500,000              17,849,550
Sierra Pacific Resources                 150,000               4,800,000
Southern Electric                        500,000               3,690,550
Teco Energy, Inc.                        300,000               7,668,750
United Utilities PLC                     200,000               2,198,540
- ---------------------------------------------------------------------------
                                                            $152,468,496
- ---------------------------------------------------------------------------

Financial - Miscellaneous -- 1.3%
- ---------------------------------------------------------------------------
Bank Plus Corp.                          345,000            $  3,751,875
Long Beach Financial Corp.               200,000               1,750,000
- ---------------------------------------------------------------------------
                                                            $  5,501,875
- ---------------------------------------------------------------------------

Health Services -- 0.1%
- ---------------------------------------------------------------------------
American Retirement Corp.*                16,200            $    287,550
- ---------------------------------------------------------------------------
                                                            $    287,550
- ---------------------------------------------------------------------------

Natural Gas Utilities -- 10.1%
- ---------------------------------------------------------------------------
ENI ADR                                  300,000            $ 17,062,500
Enserch Corp.                            240,500               5,351,125
K N Energy                               114,000               4,802,250
Sonat, Inc.                              300,000              15,375,000
- ---------------------------------------------------------------------------
                                                            $ 42,590,875
- ---------------------------------------------------------------------------

REITS -- 22.1%
- ---------------------------------------------------------------------------
Annaly Mortgage, Inc. 144A               350,000            $  3,500,000
Beacon Properties Corp.                   50,000               1,668,750
Cali Realty Corp.                        300,000              10,200,000
Criimi Mae, Inc.                       1,279,800              20,476,800
First Union Real Estate                  350,000               4,965,625
LTC Properties, Inc.                     200,000               3,625,000
Ocwen Asset Investment Corp.             575,000              11,643,750
Prime Retail, Inc.                       200,000               2,693,740
Reckson Associates Realty Corp.           66,900               1,538,700
Redwood Trust, Inc.                      175,000               8,181,250
Security Capital US Realty Trust*        600,000               8,970,000
Sunstone Hotel Investors, Inc.           525,000               7,612,500
Vornado Realty Trust                     110,000               7,933,750
- ---------------------------------------------------------------------------
                                                            $ 93,009,865
- ---------------------------------------------------------------------------

Telephone Utilities -- 19.2%
- ---------------------------------------------------------------------------
ACC Corp.                                240,000            $  7,410,000
Ameritech Corp.                           50,000               3,396,875
Bell Atlantic Corp.                       50,000               3,793,750
Bellsouth Corp.                          300,000              13,912,500
GTE Corp.                                475,000              20,840,624
NYNEX Corp.                               50,000               2,881,250
Qwest Communications International        45,000               1,226,250
SBC Communications, Inc.                 100,000               6,187,500
Smartalk Teleservices, Inc.*             245,000               3,828,125
Tele Save Holdings, Inc.                 190,000               2,897,500
Telecomunicacoes Brasileiras ADR          10,000               1,517,500
Trescom International, Inc.*             450,000               3,318,750
WorldCom, Inc.                           300,000               9,600,000
- ---------------------------------------------------------------------------
                                                            $ 80,810,624
- ---------------------------------------------------------------------------

Total Common Stocks
    (identified cost $317,506,079)                          $376,884,267
- ---------------------------------------------------------------------------
</TABLE> 

                       See notes to financial statements

                                       9
<PAGE>
 
Total Return Portfolio as of June 30, 1997

PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D


Convertible Preferred Stocks -- 4.0%

<TABLE> 
<CAPTION> 
Security                               Shares               Value 
- ---------------------------------------------------------------------------
<S>                                    <C>                  <C> 
REITS -- 4.0%
- ---------------------------------------------------------------------------
Excel Realty                             350,000            $  9,537,500
Vornado Realty Trust                      50,000               2,650,000
Walden Residential                       153,000               4,437,000
- ---------------------------------------------------------------------------
                                                            $ 16,624,500
- ---------------------------------------------------------------------------

Total Convertible Preferred Stocks
    (identified cost $15,075,000)                           $ 16,624,500
- ---------------------------------------------------------------------------
</TABLE> 

Preferred Stocks -- 2.8%

<TABLE> 
<CAPTION> 
Security                               Shares               Value
- ---------------------------------------------------------------------------
<S>                                    <C>                  <C> 
Banks and Money Services -- 2.8%
- ---------------------------------------------------------------------------
Fidelity Federal Bank                    425,000            $ 11,900,000
- ---------------------------------------------------------------------------
                                                            $ 11,900,000
- ---------------------------------------------------------------------------

Total Preferred Stocks
    (identified cost $11,018,750)                           $ 11,900,000
- ---------------------------------------------------------------------------
</TABLE> 

Warrants -- 0.1%

<TABLE> 
<CAPTION> 
Security                               Shares               Value
- ---------------------------------------------------------------------------
<S>                                    <C>                  <C> 
REITS -- 0.1%
- ---------------------------------------------------------------------------
Homestead Village, Inc. Warrants           5,504            $     46,784
Walden Residential Warrants              340,000                 467,500
- ---------------------------------------------------------------------------
                                                            $    514,284
- ---------------------------------------------------------------------------

Total Warrants
    (identified cost $3,956)                                $    514,284
- ---------------------------------------------------------------------------
</TABLE> 

Convertible Bonds -- 3.3%

<TABLE> 
<CAPTION> 
                                         Principal
                                         Amount
Security                                 (000's omitted)       Value
- ---------------------------------------------------------------------------
<S>                                      <C>                <C> 
Midcom Communications, 8.25%, 8/15/03    $11,000            $  7,370,000
Ovation, Inc., 9.75%, 2/23/01              2,000               2,000,000
Rent Way, Inc., 7.00%, 2/1/07              2,000               2,310,000
SA Telecommunications, 10.00%, 8/15/06     3,000               2,175,000
- ---------------------------------------------------------------------------

Total Convertible Bonds
    (identified cost $17,833,750)                           $ 13,855,000
- ---------------------------------------------------------------------------
</TABLE> 

Corporate Bonds -- 0.3%

<TABLE> 
<CAPTION> 
                                         Principal
                                         Amount
Security                                 (000's omitted)       Value
- ---------------------------------------------------------------------------
<S>                                      <C>                <C> 
Life Savings Bank, 13.50%, 3/15/04       $ 1,500            $  1,500,000
- ---------------------------------------------------------------------------

Total Corporate Bonds
    (identified cost $1,500,000)                            $  1,500,000
- ---------------------------------------------------------------------------
</TABLE> 

Commercial Paper -- 2.1%

<TABLE> 
<CAPTION> 
                                         Principal
                                         Amount
Security                                 (000's omitted)       Value
- ---------------------------------------------------------------------------
<S>                                      <C>                <C> 
Cut Group, 6.25%, 7/1/97                 $ 8,688            $  8,688,000
- ---------------------------------------------------------------------------

Total Commercial Paper
    (amortized cost $8,688,000)                             $  8,688,000
- ---------------------------------------------------------------------------

Total Investments -- 102.0%
    (identified cost $371,625,535)                          $429,966,051
- ---------------------------------------------------------------------------

Other Assets, Less Liabilities -- (2.0)%                    $ (8,248,005)
- ---------------------------------------------------------------------------


Net Assets -- 100%                                          $421,718,046
- ---------------------------------------------------------------------------
</TABLE> 
*   Non-income producing security.

                       See notes to financial statements

                                      10
<PAGE>
 
Total Return Portfolio  as of June 30, 1997

FINANCIAL STATEMENTS (Unaudited)

Statement of Assets and Liabilities

<TABLE> 
<CAPTION> 

As of June 30, 1997
Assets
- --------------------------------------------------------------------------
<S>                                                         <C> 
Investments, at value (Note 1A)
    (identified cost, $371,625,535)                         $429,966,051
Cash                                                               2,416
Receivable for investments sold                               10,829,601
Dividends and interest receivable                              2,766,697
Miscellaneous receivable                                          15,213
Tax reclaim receivable                                            36,159
Deferred organization expenses (Note 1H)                           5,539
- --------------------------------------------------------------------------
Total assets                                                $443,621,676
- --------------------------------------------------------------------------

Liabilities
- --------------------------------------------------------------------------
Payable for investments purchased                           $ 21,849,611
Accrued expenses                                                  54,019
- --------------------------------------------------------------------------
Total liabilities                                           $ 21,903,630
- --------------------------------------------------------------------------
Net Assets applicable to investors' interest in Portfolio   $421,718,046
- --------------------------------------------------------------------------

Sources of Net Assets
- --------------------------------------------------------------------------
Net proceeds from capital contributions and withdrawals     $363,365,887
Net unrealized appreciation of investments (computed
    on the basis of identified cost)                          58,352,159
- --------------------------------------------------------------------------
Total                                                       $421,718,046
- --------------------------------------------------------------------------
</TABLE> 


Statement of Operations
<TABLE> 
<CAPTION> 

For the Six Months Ended
June 30, 1997
Investment Income (Note 1B & 1I)
- --------------------------------------------------------------------------
<S>                                                          <C> 
Dividends (net of withholding taxes, $99,028)                $10,148,838
Interest income                                                2,156,260
- --------------------------------------------------------------------------
Total income                                                 $12,305,098
- --------------------------------------------------------------------------

Expenses
- --------------------------------------------------------------------------
Investment adviser fee (Note 3)                              $ 1,466,571
Compensation of Trustees not members of the
    Investment Adviser's organization (Note 3)                       600
Custodian fee                                                     94,772
Legal and accounting services                                     20,651
Amortization of organization expenses (Note 1H)                    2,082
Miscellaneous                                                      6,615
- --------------------------------------------------------------------------
Total expenses                                               $ 1,591,291
- --------------------------------------------------------------------------

Net investment income                                        $10,713,807
- --------------------------------------------------------------------------

Realized and Unrealized
Gain (Loss) on Investments
- --------------------------------------------------------------------------
Net realized gain --
    Investment transactions (identified cost basis)          $ 9,671,633
    Foreign currency transactions                                 56,106
- --------------------------------------------------------------------------
Net realized gain on investments                             $ 9,727,739
- --------------------------------------------------------------------------
Change in unrealized appreciation --
    Investments (identified cost basis)                      $ 3,463,218
    Foreign currency                                              (3,062)
- --------------------------------------------------------------------------
Net change in unrealized appreciation                        $ 3,460,156
- --------------------------------------------------------------------------

Net realized and unrealized gain on investments              $13,187,895
- --------------------------------------------------------------------------

Net increase in net assets resulting from operations         $23,901,702
- --------------------------------------------------------------------------
</TABLE> 

                       See notes to financial statements

                                      11
<PAGE>
 
Total Return Portfolio as of June 30, 1997

FINANCIAL STATEMENTS CONT'D

Statements of Changes in Net Assets

<TABLE> 
<CAPTION> 
                                           Six Months Ended
Increase (Decrease)                        June 30, 1997      Year Ended
in Net Assets                              (Unaudited)        December 31, 1996
- --------------------------------------------------------------------------------
<S>                                        <C>                <C> 
From operations --
    Net investment income                     $  10,713,807       $  29,247,918
    Net realized gain                             9,727,739          46,868,346
        on investments                                            
    Net change in                                                 
        unrealized appreciation                   3,460,156         (41,698,849)
- --------------------------------------------------------------------------------
Net increase in net assets                                        
    from operations                           $  23,901,702       $  34,417,415
- --------------------------------------------------------------------------------
Capital transactions --                                           
    Contributions                             $  22,591,605       $  18,255,080
    Withdrawals                                 (79,842,256)       (119,275,825)
- --------------------------------------------------------------------------------
Net decrease in net assets                                        
    from capital transactions                 $ (57,250,651)      $(101,020,745)
- --------------------------------------------------------------------------------
                                                                  
Net decrease in net assets                    $ (33,348,949)      $ (66,603,330)
- --------------------------------------------------------------------------------
                                                                  
Net Assets                                                        
- --------------------------------------------------------------------------------
At beginning of period                        $ 455,066,995       $ 521,670,325
- --------------------------------------------------------------------------------
At end of period                              $ 421,718,046       $ 455,066,995
- --------------------------------------------------------------------------------
</TABLE> 
                       See notes to financial statements

                                       12
<PAGE>
 
Total Return Portfolio as of June 30, 1997

FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE> 
<CAPTION> 

                                         Six Months Ended                                Year Ended December 31,
                                         June 30, 1997            ------------------------------------------------------------------
                                         (Unaudited)                  1996                 1995             1994           1993 *
- ------------------------------------------------------------------------------------------------------------------------------------

<S>                                      <C>                      <C>                 <C>              <C>             <C> 
Ratios to average daily net assets
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses                                     0.74%+                   0.85%               0.84%            0.85%           0.91%+
Net investment income                        4.97%+                   5.94%               4.83%            5.22%           4.57%+
Portfolio Turnover                             83%                     166%                103%             107%             16%
- ------------------------------------------------------------------------------------------------------------------------------------
Average commission rate (per share) /(1)/$ 0.0497                 $ 0.0374            $     --         $     --        $     --
- ------------------------------------------------------------------------------------------------------------------------------------

Leverage Analysis:
- ------------------------------------------------------------------------------------------------------------------------------------
Average daily balance of debt 
     outstanding during period 
     (000's omitted)                     $  2,160                 $    217            $    232         $  3,137        $ 15,452
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period 
     (000's omitted)                     $421,718                 $455,067            $521,670         $505,567        $636,567
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE> 
+      Annualized.
*      For the period from the start of business, October 28, 1993, to December
       31, 1993.
/(1)/  For fiscal years beginning on or after September 1, 1995, the Fund is
       required to disclose its average commission rate per share for security
       trades on which commissions are charged. Average commission rate paid is
       computed by dividing the total dollar amount of commissions paid during
       the fiscal year by the total number of shares purchased and sold during
       the fiscal year for which commissions were charged.



                       See notes to financial statements

                                       13

<PAGE>
 
Total Return Portfolio  as of June 30, 1997

NOTES TO FINANCIAL STATEMENTS (Unaudited) 



1 Significant Accounting Policies
 -------------------------------------------------------------------------------
  Total Return Portfolio (the Portfolio) is registered under the Investment
  Company Act of 1940 as a diversified open-end management investment company
  which was organized as a trust under the laws of the State of New York on May
  1, 1992. The Declaration of Trust permits the Trustees to issue beneficial
  interests in the Portfolio. The following is a summary of significant
  accounting policies of the Portfolio. The policies are in conformity with
  generally accepted accounting principles.

  A Investment Valuations -- Securities listed on securities exchanges or in
  the NASDAQ National Market are valued at closing sales prices or, if there has
  been no sale, at the mean between the closing bid and asked prices. Unlisted
  securities are valued at the mean between the latest available bid and asked
  prices. Options and financial futures contracts are valued at the last sale
  price, as quoted on the principal exchange or board of trade on which such
  options or contracts are traded or, in the absence of a sale, the mean between
  the last bid and asked prices. Short-term obligations, maturing in 60 days or
  less, are valued at amortized cost, which approximates value. Securities for
  which market quotations are unavailable are appraised at their fair value as
  determined in good faith by or at the direction of the Trustees.

  B Income 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 normally
  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 investor's
  distributive share of the Portfolio's net investment income, net realized
  capital gains, and any other items of income, gain, loss, deduction or credit.

  C Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
  custodian of the Portfolio. Pursuant to the custodian agreement, IBT receives
  a fee reduced by credits which are based on the average daily cash balances
  the Portfolio maintains with IBT. All significant credit balances used to
  reduce the Portfolio's custodian fees are reported as a reduction of expenses
  on the Statement of Operations.

  D Option Accounting Principles -- Upon the writing of a covered call option,
  an amount equal to the premium received by the Portfolio is included in the
  Statement of Assets and Liabilities as a liability. The amount of the
  liability is subsequently marked-to-market to reflect the current market value
  of the option written in accordance with the Portfolio's policies on
  investment valuations discussed above. Premiums received from writing call
  options which expire are treated as realized gains. Premiums received from
  writing call options which are exercised or are closed are added to or offset
  against the proceeds or amount paid on the transaction to determine the
  realized gain or loss. The Portfolio, as writer of a call option, may have no
  control over whether the underlying securities may be sold and, as a result,
  bears the market risk for an unfavorable change in the price of the securities
  underlying the written option.

  E Financial Futures Contracts -- Upon the entering of a financial futures
  contract, the Portfolio is required to deposit an amount ("initial margin")
  either in cash or securities equal to a certain percentage of the purchase
  price indicated in the financial futures contract. Subsequent payments are
  made or received by the Portfolio ("margin maintenance") each day, dependent
  on the daily fluctuations in the value of the underlying security, and are
  recorded for book purposes as unrealized gains or losses by the Portfolio.
  When the Portfolio enters into a closing transaction, the Portfolio will
  realize for book purposes a gain or loss equal to the difference between the
  value of the financial futures contract to sell and the financial futures
  contract to buy. The Portfolio's investment in financial futures contracts is
  designed only to hedge against anticipated future changes in interest rates,
  security prices, commodity prices or currency exchange rates. Should interest
  rates, security prices, commodity prices or currency exchange rates move
  unexpectedly, the Portfolio may not achieve the anticipated benefits of the
  financial futures contracts and may realize a loss.

                                      14
<PAGE>
 
Total Return Portfolio as of June 30, 1997

NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D


  F Foreign Currency Translation -- Investment valuations, other assets, and
  liabilities initially expressed in foreign currencies are converted each
  business day into U.S. dollars based upon current exchange rates. Purchases
  and sales of foreign investment securities and income and expenses are
  converted into U.S. dollars based upon currency exchange rates prevailing on
  the respective dates of such transactions. Recognized gains or losses on
  investment transactions attributable to foreign currency rates are recorded
  for financial statement purposes as net realized gains and losses on
  investments. That portion of unrealized gains and losses on investments that
  result from fluctuations in foreign currency exchange rates are not separately
  disclosed.

  G Delayed Delivery Transactions -- The Portfolio may purchase or sell
  securities on a when-issued or forward commitment basis. Payment and delivery
  may take place at a period in time after the date of the transaction. At the
  time the transaction is negotiated, the price of the security that will be
  delivered and paid for are fixed. Losses may arise due to changes in the
  market value of the underlying securities if the counterparty does not perform
  under the contract.

  H Deferred Organization Expenses -- Costs incurred by the Portfolio in
  connection with its organization are being amortized on the straight-line
  basis over five years.

  I Other -- Investment transactions are accounted for on the date the
  investments are purchased or sold. Dividend income is recorded on the ex-
  dividend date. Realized gains and losses on the sale of investments are
  determined on the identified cost basis.

  J Use of Estimates -- The preparation of the financial statements in
  conformity with generally accepted accounting principles requires management
  to make estimates and assumptions that affect the reported amounts of assets
  and liabilities at the date of the financial statements and the reported
  amounts of revenue and expense during the reporting period. Actual results
  could differ from those estimates.

  K Interim Financial Information -- The interim financial statements relating
  to June 30, 1997 and the six month period then ended have not been audited by
  independent certified public accountants, but in the opinion of the
  Portfolio's management reflect all adjustments, consisting only of normal
  recurring adjustments, necessary for the fair presentation of the financial
  statements.


2 Investment Transactions
  ------------------------------------------------------------------------------
  Purchases and sales of investments, other than short-term obligations,
  aggregated $342,325,929 and $383,977,316, 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 based upon a percentage of average daily net assets. For the six month
  period ended June 30, 1997, the fee was equivalent to 0.68% (annualized) of
  the Portfolio's average net assets for such period and amounted to $1,466,571.
  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 services to
  the Portfolio out of such investment adviser fee. 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 month period ended June 30, 1997, 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 group of banks. The Portfolio may temporarily borrow from the line of
  credit to satisfy redemption requests or settle investment transactions.
  Interest is charged to each portfolio or fund based on its borrowings at an
  amount above the banks' adjusted certificate of deposit rate, eurodollar rate
  or federal funds rate. In addition, a fee computed at an annual rate of 0.15%
  on the daily unused portion of the line of credit is allocated among the
  participating portfolios and funds at the end of each quarter. The Portfolio
  did not have any significant borrowings or allocated fees during the six
  months ended June 30, 1997.

                                      15
<PAGE>
 
Total Return Portfolio as of June 30, 1997

NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D


5 Federal Income Tax Basis of Investments
  ------------------------------------------------------------------------------
  The cost and unrealized appreciation/depreciation in value of the investments
  owned at June 30, 1997, as computed on a federal income tax basis, were as
  follows:


  Aggregate cost                                                $ 371,625,535
  ------------------------------------------------------------------------------
  Gross unrealized appreciation                                 $  64,936,435
  ------------------------------------------------------------------------------
  Gross unrealized depreciation                                    (6,595,919)
  ------------------------------------------------------------------------------
  Net unrealized appreciation                                   $  58,340,516
  ------------------------------------------------------------------------------


6 Financial Instruments
  ------------------------------------------------------------------------------
  The Portfolio may trade in financial instruments with off-balance sheet risk
  in the normal course of its investing activities to assist in managing
  exposure to various market risks. These financial instruments include written
  options, forward foreign currency exchange contracts, and financial futures
  contracts and may involve, to a varying degree, elements of risk in excess of
  the amounts recognized for financial statement purposes. The notional or
  contractual amounts of these instruments represent the investment the
  Portfolio has in particular classes of financial instruments and does not
  necessarily represent the amounts potentially subject to risk. The measurement
  of the risks associated with these instruments is meaningful only when all
  related and offsetting transactions are considered. At June 30, 1997 there
  were no outstanding obligations under these financial instruments.






                                      16
<PAGE>
 
EV Marathon Total Return Fund as of June 30, 1997
INVESTMENT MANAGEMENT

<TABLE> 
<S>                                    <C> 

EV Marathon Total Return Fund
Officers                               Trustees
James B. Hawkes                        M. Dozier Gardner
President and Trustee                  Vice Chairman, Eaton Vance
                                       Management
Edward E. Smiley, Jr                   
Vice President                         Donald R. Dwight
                                       President, Dwight Partners, Inc.
James L. O'Connor                      Chairman, Newspapers of New England, Inc.
Treasurer                              
                                       Samuel L. Hayes, III
Alan R. Dynner                         Jacob H. Schiff Professor of Investment
Secretary                              Banking, Harvard University Graduate School of 
                                       Business Administration
                                       
                                       Norton H. Reamer
                                       President and Director, United Asset
                                       Management Corporation
                                       
                                       John L. Thorndike
                                       Formerly Director, Fiduciary Company Incorporated
                                       
                                       Jack L. Treynor
                                       Investment Adviser and Consultant


Total Return Portfolio

Officers                               Independent Trustees
M. Dozier Gardner                      Donald R. Dwight
President, Trustee                     President, Dwight Partners, Inc.
                                       Chairman, Newspapers of New England, Inc.           
James B. Hawkes                                                                            
Vice President and Trustee             Samuel L. Hayes, III                                
                                       Jacob H. Schiff Professor of Investment             
Timothy O'Brien                        Banking, Harvard University Graduate School of      
Vice President and                     Business Administration                             
Portfolio Manager                                                                          
                                       Norton H. Reamer                                    
James L. O'Connor                      President and Director, United Asset                
Treasurer                              Management Corporation                              
                                                                                           
Alan R. Dynner                         John L. Thorndike                                   
Secretary                              Formerly Director, Fiduciary Company Incorporated   
                                                                                           
                                       Jack L. Treynor                                    
                                       Investment Adviser and Consultant                  
</TABLE> 

                                       17
<PAGE>
 
                       This Page Intentionally Left Blank
<PAGE>
 
                       This Page Intentionally Left Blank
<PAGE>
 
Investment Advisor of
Total Return Portfolio
Boston Management and Research
24 Federal Street
Boston, MA 02110


Administrator of
EV Marathon Total Return Fund
Eaton Vance Management
24 Federal Street
Boston, MA 02110


Principal Underwriter
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 482-8260


Custodian
Investors Bank & Trust Company
200 Clarendon Street, 16th Floor
Boston, MA 02116


Transfer Agent
First Data Investor Services Group
Attention:  Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123








EV Marathon Total Return Fund
24 Federal Street
Boston, MA 02110


- --------------------------------------------------------------------------------
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its sales charges and
expenses. Please read the prospectus carefully before you invest or send money.
- --------------------------------------------------------------------------------

                                                                    M-TMSRC-8/97


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