<PAGE>
[LOGO OF EATON VANCE APPEARS HERE]
Investing for the 21st Century
[PHOTO OF OUTSIDE OF STOCK
EXCHANGE APPEARS HERE]
SEMIANNUAL REPORT JUNE 30, 1997
EV
[PHOTO OF NYSE TRADITIONAL
FLAG APPEARS HERE] STOCK FUND
Eaton Vance
Global Management-Global Distribution
[PHOTO OF STOCK EXCHANGE APPEARS HERE]
Traditional
<PAGE>
EV Traditional Stock Fund as of June 30, 1997
INVESTMENT UPDATE
[PHOTO OF DUNCAN W. RICHARDSON APPEARS HERE]
Duncan W. Richardson,
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, falling to 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, 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 in the
first half of 1997. Within a six-week period in March and April, the Dow
Jones Industrial Average declined almost 10%, and then fully recovered to
reach new record highs.*
. Despite ever-higher stock prices, the market forces propelling the surge
within the large-capitalization sector remain intact. Low worldwide
inflation, the spread of capitalism around the world, and increasing
productivity have benefited U.S. multinational companies, whose profits have
continued to rise.
- --------------------------------------------------------------------------------
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 Traditional Stock Fund had a
total return of 17.7%./1/
. This return resulted from an increase in net asset value to $15.39 per share
on June 30, 1997 from $13.56 per share on December 31, 1996, and the
reinvestment of $0.09 per share in income dividends and $0.41 per share in
capital gains distributions./2/
. By comparison, the average total return for mutual funds in the Lipper Growth
& Income Fund Category was 15.5% during this period.*
Management Discussion
. As the equity markets became more volatile during the past six months, we
found opportunities to add to holdings with strong growth characteristics.
Some examples during this period include Home Depot, Marsh & McLennan, and
Boeing.
. We are always on the lookout for ways to add yield to the Fund and found such
an opportunity in real estate investment trusts (REITs). After trimming back
in this sector early in the year, we increased our REIT holdings when prices
subsequently declined. We also found yield opportunities in a few of the
regional bell operating companies.
. The Fund's tremendous diversity across sectors and individual holdings served
to mitigate the impact of the April market downturn. Our goal is to continue
to maintain as diverse a portfolio as possible.
- --------------------------------------------------------------------------------
/1/ This return does not include the maximum 4.75% initial sales charge.
/2/ Returns are calculated by determining the percentage change in net asset
value with all distributions reinvested. SEC average annual returns reflect
the maximum 4.75% sales charge. 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/ Industry sectors 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 27.6% 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 30.8%
Five Years 15.3
Ten Years 12.4
</TABLE>
<TABLE>
<CAPTION>
SEC Average Annual Total Returns/2/
- --------------------------------------------------------------------------------
<S> <C>
One Year 24.6%
Five Years 14.2
Ten Years 11.8
</TABLE>
Five Largest Industry Sectors/3/
- --------------------------------------------------------------------------------
As a percentage of total net assets
[BAR CHART APPEARS HERE]
<TABLE>
<S> <C>
Financial 24.9%
Consumer Non-Durables 24.1%
Consumer Services 13.4%
Basic Industries 12.2%
Business Products and Services 8.0%
</TABLE>
<TABLE>
<CAPTION>
Ten Largest Equity Holdings/3/
- --------------------------------------------------------------------------------
As a percentage of total net assets
<S> <C>
Unilever N.V. 3.0%
Home Depot, Inc. 3.0
Freeport McMoran Corp. 3.0
CVS Corp. 3.0
Monsanto Company 2.8
Allstate Corp. 2.6
Marsh & McLennan Companies 2.6
McGraw-Hill Companies 2.6
Eli Lilly & Co. 2.5
Federal National Mortgage Association 2.5
</TABLE>
2
<PAGE>
EV Traditional Stock 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 Stock Portfolio, at value (Note 1A)
(identified cost, $92,720,062) $121,146,354
Receivable for Fund shares sold 99,249
- --------------------------------------------------------------------------------
Total assets $121,245,603
- --------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------
Payable for Fund shares redeemed $ 122,198
Payable to affiliate for Trustees' fees (Note 4) 420
Accrued expenses 77,943
- --------------------------------------------------------------------------------
Total liabilities $ 200,561
- --------------------------------------------------------------------------------
Net Assets for 7,862,926 shares of beneficial
interest outstanding $121,045,042
- --------------------------------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------------------------------
Paid-in capital $ 79,575,227
Accumulated net realized gain on investments (computed
on the basis of identified cost) 12,975,522
Accumulated undistributed net investment income 68,001
Net unrealized appreciation of investments (computed on
the basis of identified cost) 28,426,292
- --------------------------------------------------------------------------------
Total $121,045,042
- --------------------------------------------------------------------------------
Net Asset Value, Redemption Price Per Share
- --------------------------------------------------------------------------------
($121,045,042 / 7,862,926 shares of beneficial
interest outstanding) $ 15.39
- --------------------------------------------------------------------------------
Computation of Offering Price
- --------------------------------------------------------------------------------
Offering price per share (100 / 95.25 of $15.39) $ 16.16
- --------------------------------------------------------------------------------
On sales of $100,000 or more, the offering price is reduced.
</TABLE>
Statement of Operations
<TABLE>
<CAPTION>
For the Six Months Ended
June 30, 1997
Investment Income (Note 1B)
- --------------------------------------------------------------------------------
<S> <C>
Dividend income allocated from Portfolio (net of
withholding taxes, $1,198) $ 1,117,086
Interest income allocated from Portfolio 185,806
Expenses allocated from Portfolio (407,065)
- --------------------------------------------------------------------------------
Total investment income from Portfolio $ 895,827
- --------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------
Compensation of Trustees not members of the
Administrator's organization (Note 4) $ 795
Service fees (Note 5) 150,895
Transfer and dividend disbursing agent fees 54,822
Printing and postage 21,030
Registration fees 7,365
Legal and accounting services 6,221
Custodian fee 5,650
Miscellaneous 5,548
- --------------------------------------------------------------------------------
Total expenses $ 252,326
- --------------------------------------------------------------------------------
Net investment income $ 643,501
- --------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Portfolio
- --------------------------------------------------------------------------------
Net realized gain --
Investment transactions (identified cost basis) $ 12,958,109
Options 54,371
- --------------------------------------------------------------------------------
Net realized gain on investment transactions $ 13,012,480
- --------------------------------------------------------------------------------
Change in unrealized appreciation --
Investment transactions $ 4,722,092
Options 160,366
- --------------------------------------------------------------------------------
Net change in unrealized appreciation of investments $ 4,882,458
- --------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 17,894,938
- --------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 18,538,439
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
3
<PAGE>
EV Traditional Stock 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 $ 643,501 $ 1,723,350
Net realized gain on investments and
financial futures contracts 13,012,480 13,944,394
Net change in unrealized appreciation
of investments 4,882,458 3,178,793
- --------------------------------------------------------------------------------
Net increase in net assets from
operations $ 18,538,439 $ 18,846,537
- --------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income $ (702,126) $ (1,656,709)
From net realized gain on investments (3,181,995) (10,784,514)
- --------------------------------------------------------------------------------
Total distributions to shareholders $ (3,884,121) $ (12,441,223)
- --------------------------------------------------------------------------------
Transactions in shares of beneficial
interest (Note 3) --
Proceeds from sale of shares $ 1,474,462 $ 2,060,267
Net asset value of shares issued to
shareholders in payment of
distributions declared 3,217,658 9,184,094
Cost of shares redeemed (5,076,639) (10,249,142)
- --------------------------------------------------------------------------------
Net increase (decrease) in net assets from
Fund share transactions $ (384,519) $ 995,219
- --------------------------------------------------------------------------------
Net increase in net assets $ 14,269,799 $ 7,400,533
- --------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------
At beginning of period $ 106,775,243 $ 99,374,710
- --------------------------------------------------------------------------------
At end of period $ 121,045,042 $ 106,775,243
- --------------------------------------------------------------------------------
Accumulated undistributed net investment
income included in net assets
- --------------------------------------------------------------------------------
At end of period $ 68,001 $ 126,626
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
4
<PAGE>
EV Traditional Stock 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 1992
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of period $ 13.560 $ 12.760 $ 10.900 $ 12.490 $13.480 $ 14.030
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.083 $ 0.228 $ 0.250 $ 0.250 $ 0.270* $ 0.312
Net realized and unrealized gain (loss) on investments 2.247 2.272 3.255 (0.765) 0.270* 0.658
- ------------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 2.330 $ 2.500 $ 3.505 $ (0.515) $ 0.540 $ 0.970
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ------------------------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.090) $ (0.220) $ (0.251) $ (0.250) $(0.270) $ (0.320)
From net realized gain on investments (0.410) (1.480) (1.394) (0.765) (1.260) (1.200)
In excess of net realized gain on investments -- -- -- (0.060) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.500) $ (1.700) $ (1.645) $ (1.075) $(1.530) $ (1.520)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End of period $ 15.390 $ 13.560 $ 12.760 $ 10.900 $12.490 $ 13.480
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return /(1)/ 17.74% 20.20% 32.77% (4.12)% 4.19% 6.93%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $121,045 $106,775 $ 99,375 $ 84,299 $97,513 $ 91,299
Ratio of net expenses to average daily net assets /(2)/ 1.18%+ 1.00% 1.04% 0.98% 0.96% 0.92%
Ratio of net investment income to average daily net assets 1.15%+ 1.70% 2.02% 2.09% 2.01% 2.29%
Portfolio Turnover /(3)/ -- -- -- 66% 105% 59%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* Computed on average share basis
/(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.
/(3)/ Portfolio Turnover represents the rate of portfolio activity for the
period while the Fund was making investments directly in securities. The
portfolio turnover rate for the period since the Fund transferred
substantially all of its investable assets to the Portfolio is shown in
the Portfolio's financial statements which are included elsewhere in this
report.
See notes to financial statements
5
<PAGE>
EV Traditional Stock Fund as of June 30, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1 Significant Accounting Policies
------------------------------------------------------------------------------
EV Traditional Stock Fund (the Fund) a Massachusetts business trust, is
registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. The Fund is a series in
the Eaton Vance Special Investment Trust. On August 1, 1994, the Fund
transferred substantially all of its investable assets to the Stock Portfolio
(the Portfolio). Prior to this date the Fund's name was Eaton Vance Stock
Fund. The Fund invests all of its investable assets in interests in the
Portfolio, a New York Trust, having the same investment objective as the Fund.
The value of the Fund's investment in the Portfolio reflects the Fund's
proportionate interest in the net assets of the Portfolio (87.9% 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 -- Valuations 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. Prior to the Fund's investment in the Portfolio,
the Fund held its investments directly.
C Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian of the Fund. Pursuant to the custodian agreement, IBT receives a fee
reduced by credits which are determined based on the average daily cash
balances the Fund maintains with IBT. All significant credit balances used to
reduce the Fund's custodian fees are reported as a reduction of expenses on
the Statement of Operations.
D 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.
E Other -- Investment transactions are accounted for on a trade date basis.
F Use of Estimates -- The preparation of the financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements and the reported
amounts of income and expense during the reporting period. Actual results
could differ from those estimates.
G Interim Financial Information -- The interim financial statements relating
to June 30, 1997 and for 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 present policy is to pay quarterly dividends from net investment
income allocated to the Fund by the Portfolio (less the Fund's direct and
allocated expenses) and to distribute at least annually any net realized
capital gains so allocated. 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 requires 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 Traditional Stock Fund as of June 30, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
3 Shares of Beneficial Interest
------------------------------------------------------------------------------
The Fund under its indenture of trust is authorized to issue unlimited shares
of beneficial interest (with no par value). Transactions in Fund shares were
as follows:
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1997 Year Ended
(Unaudited) December 31, 1996
------------------------------------------------------------------------------
<S> <C> <C>
Sales 102,011 153,277
Issued to shareholders electing
to receive payments of
distributions in Fund shares 240,083 696,901
Redemptions (354,892) (764,183)
------------------------------------------------------------------------------
Net increase (decrease) (12,798) 85,995
------------------------------------------------------------------------------
</TABLE>
4 Investment Adviser Fee and Other Transactions with Affiliates
------------------------------------------------------------------------------
Eaton Vance serves only as the administrator of the Fund, but receives no
compensation. The Portfolio has engaged Boston Management and Research (BMR),
a subsidiary of Eaton Vance Management (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 or BMR's organization, officers and
Trustees receive remuneration for their services to the Fund out of the
investment adviser fee.
Certain of the officers and Trustees of the Fund and Portfolio are officers
and trustees of the above organizations.
5 Service Plan
------------------------------------------------------------------------------
The Trustees of the Fund adopted a Service Plan designed to meet the service
fee requirements of the revised sales charge rule of The National Association
of Securities Dealers, Inc. The Service Plan replaced the Fund's distribution
plan which became effective on December 27, 1990. The Service Plan provides
that the Fund may make service fee payments to the Principal Underwriter,
Eaton Vance Distributors, Inc., a subsidiary of Eaton Vance Management,
Authorized Firms or other persons in amounts not exceeding 0.25% of the Fund's
average daily net assets for any fiscal year. The Trustees have implemented
the Service Plan by authorizing the Fund to make quarterly service fee
payments to the Principal Underwriter and Authorized Firms in amounts not
expected to exceed 0.25% of that portion of the Fund's average daily net
assets for any fiscal year which is attributable to shares of the Fund sold on
or after June 12, 1991 by such persons and remaining outstanding for at least
twelve months. Such payments are made for personal service and/or the
maintenance of shareholder accounts. During the six months ended June 30,
1997, the Fund made payments of $150,895 under the Plan to the Principal
Underwriter and Authorized Firms.
6 Investment Transactions
------------------------------------------------------------------------------
Increases and decreases in the Fund's investment in the Portfolio aggregated
$1,726,714 and $8,863,093, respectively.
7
<PAGE>
Stock Portfolio as of June 30, 1997
PORTFOLIO OF INVESTMENTS (Unaudited)
Common Stocks -- 91.1%
<TABLE>
<CAPTION>
Security Shares Value
- ---------------------------------------------------------------------------
<S> <C> <C>
Advertising -- 0.5%
- ---------------------------------------------------------------------------
Omnicom Group, Inc. 10,000 $ 616,250
- ---------------------------------------------------------------------------
$ 616,250
- ---------------------------------------------------------------------------
Aerospace and Defense -- 2.4%
- ---------------------------------------------------------------------------
Boeing Co. 62,000 $ 3,289,875
- ---------------------------------------------------------------------------
$ 3,289,875
- ---------------------------------------------------------------------------
Auto and Parts -- 0.4%
- ---------------------------------------------------------------------------
Magna International Class A 10,000 $ 601,875
- ---------------------------------------------------------------------------
$ 601,875
- ---------------------------------------------------------------------------
Banks - Regional -- 1.6%
- ---------------------------------------------------------------------------
BankBoston Corp. 15,000 $ 1,080,938
Fleet Financial Group, Inc. 18,000 1,138,500
- ---------------------------------------------------------------------------
$ 2,219,438
- ---------------------------------------------------------------------------
Banks and Money Centers -- 2.2%
- ---------------------------------------------------------------------------
Bankers Trust New York Corp. 35,000 $ 3,045,000
- ---------------------------------------------------------------------------
$ 3,045,000
- ---------------------------------------------------------------------------
Banks and Money Services -- 2.5%
- ---------------------------------------------------------------------------
Citicorp 28,332 $ 3,415,777
- ---------------------------------------------------------------------------
$ 3,415,777
- ---------------------------------------------------------------------------
Beverages -- 0.7%
- ---------------------------------------------------------------------------
PepsiCo, Inc. 25,000 $ 939,063
- ---------------------------------------------------------------------------
$ 939,063
- ---------------------------------------------------------------------------
Broadcasting and Cable -- 0.4%
- ---------------------------------------------------------------------------
Comcast Corp. Class A 25,000 $ 534,375
- ---------------------------------------------------------------------------
$ 534,375
- ---------------------------------------------------------------------------
Chemicals -- 2.8%
- ---------------------------------------------------------------------------
Monsanto Corp. 90,000 $ 3,875,625
- ---------------------------------------------------------------------------
$ 3,875,625
- ---------------------------------------------------------------------------
Communications Equipment -- 1.6%
- ---------------------------------------------------------------------------
Nokia Corp., ADR 30,000 $ 2,212,500
- ---------------------------------------------------------------------------
$ 2,212,500
- ---------------------------------------------------------------------------
Containers and Packaging -- 2.3%
- ---------------------------------------------------------------------------
Crown Cork & Seal, Inc. 60,000 $ 3,206,250
- ---------------------------------------------------------------------------
$ 3,206,250
- ---------------------------------------------------------------------------
Drugs -- 8.0%
- ---------------------------------------------------------------------------
Elan Corp., PLC ADR 65,000 $ 2,941,250
Genzyme Corp. Class A 35,000 969,063
Lilly & Co. 32,000 3,498,000
Pfizer, Inc. 10,000 1,195,000
Warner-Lambert Co. 20,000 2,485,000
- ---------------------------------------------------------------------------
$ 11,088,313
- ---------------------------------------------------------------------------
Electric Utilities -- 0.0%
- ---------------------------------------------------------------------------
Electric De Portugal ADR 400 $ 14,400
- ---------------------------------------------------------------------------
$ 14,400
- ---------------------------------------------------------------------------
Electronics - Semiconductors -- 1.0%
- ---------------------------------------------------------------------------
Intel Corp. 10,000 $ 1,418,125
- ---------------------------------------------------------------------------
$ 1,418,125
- ---------------------------------------------------------------------------
Financial - Miscellaneous -- 3.2%
- ---------------------------------------------------------------------------
Federal National Mortgage
Association 80,000 $ 3,490,000
MGIC Investment Corp. 20,000 958,750
- ---------------------------------------------------------------------------
$ 4,448,750
- ---------------------------------------------------------------------------
Foods -- 7.0%
- ---------------------------------------------------------------------------
Conagra Inc. 27,000 $ 1,731,375
Dean Foods Co. 75,000 3,028,125
McCormick & Co., Inc. 30,000 759,375
Unilever ADR 19,000 4,141,999
- ---------------------------------------------------------------------------
$ 9,660,874
- ---------------------------------------------------------------------------
</TABLE>
See notes to financial statements
8
<PAGE>
Stock Portfolio as of June 30, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
<TABLE>
<CAPTION>
Security Shares Value
- ---------------------------------------------------------------------------
<S> <C> <C>
Household Products -- 2.5%
- ---------------------------------------------------------------------------
Gillette Co. 15,640 $ 1,481,890
Newell Co. 50,000 1,981,250
- ---------------------------------------------------------------------------
$ 3,463,140
- ---------------------------------------------------------------------------
Information Services -- 3.8%
- ---------------------------------------------------------------------------
Automatic Data Processing, Inc. 30,000 $ 1,410,000
Reuters Holdings PLC ADR 60,000 3,781,872
- ---------------------------------------------------------------------------
$ 5,191,872
- ---------------------------------------------------------------------------
Insurance -- 10.9%
- ---------------------------------------------------------------------------
Allstate Corp. 49,540 $ 3,616,420
American International Group, Inc. 18,000 2,688,750
Lincoln National Corp. 25,000 1,609,375
Marsh & McLennan Cos., Inc. 50,000 3,568,750
Nationwide Financial Service 17,000 451,563
Progressive Corp. 35,000 3,045,000
- ---------------------------------------------------------------------------
$ 14,979,858
- ---------------------------------------------------------------------------
Leisure Equipment -- 0.4%
- ---------------------------------------------------------------------------
Sturm, Ruger & Co., Inc. 30,000 $ 588,750
- ---------------------------------------------------------------------------
$ 588,750
- ---------------------------------------------------------------------------
Lodging and Gaming -- 2.7%
- ---------------------------------------------------------------------------
MGM Grand, Inc. 30,000 $ 1,110,000
Mirage Resorts, Inc. 35,000 883,750
Promus Hotel Corp. 45,000 1,743,750
- ---------------------------------------------------------------------------
$ 3,737,500
- ---------------------------------------------------------------------------
Manufacturing -- 1.6%
- ---------------------------------------------------------------------------
Corning, Inc. 40,000 $ 2,225,000
- ---------------------------------------------------------------------------
$ 2,225,000
- ---------------------------------------------------------------------------
Medical Products -- 3.6%
- ---------------------------------------------------------------------------
Baxter International, Inc. 65,000 $ 3,396,250
Johnson & Johnson Co. 25,000 1,609,375
- ---------------------------------------------------------------------------
$ 5,005,625
- ---------------------------------------------------------------------------
Metals and Minerals -- 1.1%
- ---------------------------------------------------------------------------
J & L Specialty Steel, Inc. 120,000 $ 1,440,000
- ---------------------------------------------------------------------------
$ 1,440,000
- ---------------------------------------------------------------------------
Oil and Gas - Exploration and Production -- 5.2%
- ---------------------------------------------------------------------------
Anadarko Petroleum Corp. 20,000 $ 1,200,000
British Petroleum, PLC ADR 30,000 2,246,250
Triton Energy Ltd. 60,000 2,748,750
USX-Marathon Group 35,000 1,010,625
- ---------------------------------------------------------------------------
$ 7,205,625
- ---------------------------------------------------------------------------
Paper and Forest Products -- 0.3%
- ---------------------------------------------------------------------------
Rayonier, Inc. 10,000 $ 420,625
- ---------------------------------------------------------------------------
$ 420,625
- ---------------------------------------------------------------------------
Photography -- 1.7%
- ---------------------------------------------------------------------------
Eastman Kodak Co. 30,000 $ 2,302,500
- ---------------------------------------------------------------------------
$ 2,302,500
- ---------------------------------------------------------------------------
Publishing -- 4.3%
- ---------------------------------------------------------------------------
Dow Jones & Co., Inc. 60,000 $ 2,411,250
McGraw-Hill, Inc. 60,000 3,528,750
- ---------------------------------------------------------------------------
$ 5,940,000
- ---------------------------------------------------------------------------
REITS -- 3.1%
- ---------------------------------------------------------------------------
Beacon Properties Corp. 20,000 $ 667,500
Chateau Communities, Inc. 10,000 286,250
Equity Residential Properties Trust 10,000 475,000
Highwood Properties, Inc. 20,000 640,000
Nationwide Health Properties, Inc. 2,000 44,000
Post Properties, Inc. 13,000 527,313
Storage USA, Inc. 15,000 573,750
Sun Communities, Inc. 20,000 671,250
Trinet Corporate Realty Trust, Inc. 10,000 330,625
- ---------------------------------------------------------------------------
$ 4,215,688
- ---------------------------------------------------------------------------
Retail - Food and Drug -- 3.0%
- ---------------------------------------------------------------------------
CVS Corp. 80,000 $ 4,100,000
- ---------------------------------------------------------------------------
$ 4,100,000
- ---------------------------------------------------------------------------
</TABLE>
See notes to financial statements
9
<PAGE>
Stock Portfolio as of June 30, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
<TABLE>
<CAPTION>
Security Shares Value
- ---------------------------------------------------------------------------
<S> <C> <C>
Retail - Specialty and Apparel -- 5.1%
- ---------------------------------------------------------------------------
Office Depot 150,000 $ 2,915,625
The Home Depot, Inc. 60,000 4,136,249
- ---------------------------------------------------------------------------
$ 7,051,874
- ---------------------------------------------------------------------------
Specialty Chemicals and Materials -- 3.5%
- ---------------------------------------------------------------------------
Ecolab, Inc. 50,000 $ 2,387,500
Potash Corp. of Saskatchewan 32,000 2,402,000
- ---------------------------------------------------------------------------
$ 4,789,500
- ---------------------------------------------------------------------------
Telephone Utilities -- 1.7%
- ---------------------------------------------------------------------------
GTE Corp. 25,000 $ 1,096,875
SBC Communications, Inc. 20,000 1,237,500
- ---------------------------------------------------------------------------
$ 2,334,375
- ---------------------------------------------------------------------------
Total Common Stocks
(identified cost, $95,655,812) $ 125,578,422
- ---------------------------------------------------------------------------
</TABLE>
Convertible Preferred Stocks -- 4.2%
<TABLE>
<CAPTION>
Security Shares Value
- ---------------------------------------------------------------------------
<S> <C> <C>
Insurance -- 0.8%
- ---------------------------------------------------------------------------
Sun America, Inc., 3.188% 25,000 $ 1,090,625
- ---------------------------------------------------------------------------
$ 1,090,625
- ---------------------------------------------------------------------------
Metals - Gold -- 3.0%
- ---------------------------------------------------------------------------
Freeport McMoRan Copper & Gold, 5% 150,000 $ 4,106,249
- ---------------------------------------------------------------------------
$ 4,106,249
- ---------------------------------------------------------------------------
Natural Gas Utilities -- 0.4%
- ---------------------------------------------------------------------------
Tejas Gas Corp., 5.25% 10,000 $ 530,000
- ---------------------------------------------------------------------------
$ 530,000
- ---------------------------------------------------------------------------
Total Convertible Preferred Stocks
(identified cost, $4,736,811) $ 5,726,874
- ---------------------------------------------------------------------------
</TABLE>
Convertible Bonds - 3.1%
<TABLE>
<CAPTION>
Principal
Amount
Security (000's Omitted) Value
- ---------------------------------------------------------------------------
<S> <C> <C>
INCO Ltd., 5.75%, 7/1/04 $ 2,920 $ 3,460,200
Scandinavian Broadcasting System,
7.25%, 8/1/05 840 843,150
- ---------------------------------------------------------------------------
Total Convertible Bonds
(identified cost, $4,054,999) $ 4,303,350
- ---------------------------------------------------------------------------
</TABLE>
Corporate Bonds -- 0.0%
<TABLE>
<CAPTION>
Principal
Amount
Security (000's Omitted) Value
- ---------------------------------------------------------------------------
<S> <C> <C>
H. P. Hood & Son, 7.50%, 2/1/01 $ 50 $ 39,400
- ---------------------------------------------------------------------------
Total Corporate Bonds
(identified cost, $50,000) $ 39,400
- ---------------------------------------------------------------------------
</TABLE>
Commercial Paper -- 2.7%
<TABLE>
<CAPTION>
Principal
Amount
Security (000's Omitted) Value
- ---------------------------------------------------------------------------
<S> <C> <C>
Cut Group, 6.25%, 7/1/97 $ 3,718 $ 3,718,000
- ---------------------------------------------------------------------------
Total Commercial Paper
(amortized cost, $3,718,000) $ 3,718,000
- ---------------------------------------------------------------------------
Total Investments -- 101.1%
(identified cost, $108,215,622) $ 139,366,046
- ---------------------------------------------------------------------------
Other Assets, Less Liabilities -- (1.1)% $ (1,523,404)
- ---------------------------------------------------------------------------
Net Assets -- 100% $ 137,842,642
- ---------------------------------------------------------------------------
</TABLE>
ADR -- American Depositary Receipt
REIT -- Real Estate Investment Trust
See notes to financial statements
10
<PAGE>
Stock 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, $108,215,622) $139,366,046
Cash 649
Receivable for investments sold 2,550,169
Dividends and interest receivable 282,555
Tax reclaim receivable 21,656
Deferred organization expenses (Note 1D) 6,832
- --------------------------------------------------------------------------------
Total assets $142,227,907
- --------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------
Payable for investments purchased $ 4,366,855
Payable to affiliate - Director's fees (Note 3) 2,200
Accrued expenses 16,210
- --------------------------------------------------------------------------------
Total liabilities $ 4,385,265
- --------------------------------------------------------------------------------
Net Assets applicable to investors' interest in Portfolio $137,842,642
- --------------------------------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------------------------------
Net proceeds from capital contributions and withdrawals $106,692,218
Net unrealized appreciation of investments (computed on the
basis of identified cost) 31,150,424
- --------------------------------------------------------------------------------
Total $137,842,642
- --------------------------------------------------------------------------------
</TABLE>
Statement of Operations
<TABLE>
<CAPTION>
For the Six Months Ended
June 30, 1997
Investment Income
- --------------------------------------------------------------------------------
<S> <C>
Dividends (net of withholding taxes, $1,354) $ 1,266,005
Interest income 210,500
- --------------------------------------------------------------------------------
Total income $ 1,476,505
- --------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------
Investment adviser fee (Note 3) $ 401,714
Compensation of Trustees not members of the
Investment Adviser's organization (Note 3) 4,585
Custodian fee 39,660
Legal and accounting services 11,901
Amortization of organization expenses (Note 1D) 1,629
Miscellaneous 1,930
- --------------------------------------------------------------------------------
Total expenses $ 461,419
- --------------------------------------------------------------------------------
Net investment income $ 1,015,086
- --------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) on Investments
- --------------------------------------------------------------------------------
Net realized gain --
Investment transactions (identified cost basis) $ 14,675,802
Options 61,335
- --------------------------------------------------------------------------------
Net realized gain on investments $ 14,737,137
- --------------------------------------------------------------------------------
Change in unrealized appreciation --
Investments (identified cost basis) $ 5,344,944
Options 181,789
- --------------------------------------------------------------------------------
Net change in unrealized appreciation $ 5,526,733
- --------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 20,263,870
- --------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 21,278,956
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
11
<PAGE>
Stock 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 $ 1,015,086 $ 2,212,222
Net realized gain on investments 14,737,137 14,716,162
Net change in unrealized appreciation 5,526,733 4,346,638
- --------------------------------------------------------------------------------
Net increase in net assets from operations $ 21,278,956 $ 21,275,022
- --------------------------------------------------------------------------------
Capital transactions --
Contributions $ 5,164,822 $ 9,663,514
Withdrawals (11,564,284) (15,692,663)
- --------------------------------------------------------------------------------
Net decrease in net assets from
capital transactions $ (6,399,462) $ (6,029,149)
- --------------------------------------------------------------------------------
Net increase in net assets $ 14,879,494 $ 15,245,873
- --------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------
At beginning of period $122,963,148 $107,717,275
- --------------------------------------------------------------------------------
At end of period $137,842,642 $122,963,148
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
12
<PAGE>
Stock 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*
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ratios to average daily net assets
- -----------------------------------------------------------------------------------------------------
Expenses 0.72%+ 0.73% 0.75% 0.73%+
Net investment income 1.59%+ 1.96% 2.30% 2.45%+
Portfolio Turnover 46% 114% 108% 28%
- -----------------------------------------------------------------------------------------------------
Average commission rate (per share)/(1)/ $0.0593 $0.0579 $ -- $ --
- -----------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, August 1, 1994, to December 31,
1994.
/(1)/ 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. For fiscal years beginning on or after September 1, 1995, a
Fund is required to disclose its average commission rate per share for
security trades on which commissions were charged.
See notes to financial statements
13
<PAGE>
Stock Portfolio as of June 30, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1 Significant Accounting Policies
------------------------------------------------------------------------------
Stock Portfolio (the Portfolio) is registered under the Investment Company
Act of 1940 as a diversified open-end 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 foreign or U.S. securities
exchanges or in the NASDAQ National Market System generally are valued at
closing sale prices or, if there were no sales, at the mean between the
closing bid and asked prices on the exchange where such securities are
principally traded or on such National Market System. Unlisted or listed
securities for which closing sale prices are not available are valued at the
mean between the latest available bid and asked prices on the principal market
where the security was traded. An option is valued at the last sale price as
quoted on the principal exchange or board of trade on which such option or
contract is traded or, in the absence of a sale, at the mean between the last
bid and asked prices. Futures positions on securities or currencies are
generally valued at closing settlement prices. Short-term debt securities with
a remaining maturity of 60 days or less are valued at amortized cost. If
securities were acquired with a remaining maturity of more than 60 days, their
amortized cost value will be based on their value on the sixty-first day prior
to maturity. Other fixed income and debt securities, including listed
securities and securities for which price quotations are available, will
normally be valued on the basis of valuations furnished by a pricing service.
Securities for which market quotations are unavailable, including any security
the disposition of which is restricted under the Securities Act of 1933, and
other assets will be appraised at their fair value as determined in good faith
by or at the direction of the Trustees of the Portfolio.
B Federal Taxes -- The Portfolio is treated as a partnership for federal tax
purposes. No provision is made by the Portfolio for federal or state taxes on
any taxable income of the Portfolio because each investor in the Portfolio is
ultimately responsible for the payment of any taxes. Since some of the
Portfolio's investors are regulated investment companies that invest all or
substantially all of their assets in the Portfolio, the Portfolio normally
must satisfy the applicable source of income and diversification requirements
(under the Internal Revenue Code) in order for its investors to satisfy them.
The Portfolio will allocate at least annually among its investors each
investors' 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 determined 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 in the Statement of Operations.
D Deferred Organization Expenses -- Costs incurred by the Portfolio in
connection with its organization are being amortized on the straight-line
basis over five years.
E Other -- Investment transactions are accounted for on a trade date basis.
F Written Options -- The Portfolio may write call or put options for which
premiums are received and are recorded as liabilities, and are subsequently
adjusted to the current value of the options written. Premiums received from
writing options which expire are treated as realized gains. Premiums received
from writing options which are exercised or are closed are offset against the
proceeds or amount paid on the transaction to determine the realized gain or
loss. If a put option is exercised, the premium reduces the cost basis of the
securities purchased by the Portfolio. The Portfolio as a writer of an option
may have no control over whether the underlying securities may be sold (call)
or purchased (put) and as a result bears the market risk of an unfavorable
change in the price of the securities underlying the written option.
G Use of Estimates -- The preparation of the financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements and the reported
amounts of income and expenses during the reporting period. Actual results
could differ from those estimates.
14
<PAGE>
Stock Portfolio as of June 30, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
H Interim Financial Information -- The interim financial statements relating
to June 30, 1997 and for 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 Investments Transactions
------------------------------------------------------------------------------
Purchases and sales of investments, other than short term obligations,
aggregated $57,181,765 and $56,907,937, 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 at the annual rate of 5/8 of 1% of average daily net assets. For
the six months ended June 30, 1997, the fee amounted to $401,714. 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 trustees of the above
organizations. Trustees of the Portfolio that are not affiliated with the
Investment Adviser may elect to defer receipt of all or a percentage of their
annual fees in accordance with the terms of the Trustees Deferred
Compensation Plan. For the six months ended 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.
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:
<TABLE>
<S> <C>
Aggregate cost $108,215,622
------------------------------------------------------------------------------
Gross unrealized appreciation $ 31,512,278
Gross unrealized depreciation (361,854)
------------------------------------------------------------------------------
Net unrealized appreciation $ 31,150,424
------------------------------------------------------------------------------
</TABLE>
6 Financial Instruments
------------------------------------------------------------------------------
The Portfolio regularly trades in financial instruments with off-balance-sheet
risk in the normal course of its investing activities and to assist in
managing exposure to market risks such as interest rates and foreign currency
exchange rates. These financial instruments include written options. The
notional or contractual amounts of these instruments represent the investment
the Portfolio has in particular classes of financial instruments and do 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. A summary of obligations
under these financial instruments at June 30, 1997 is as follows:
<TABLE>
<CAPTION>
Number of
Contracts
(000's omitted) Premiums
------------------------------------------------------------------------------
<S> <C> <C>
Outstanding, beginning of period 100 $ 61,335
Options expired (100) $(61,335)
------------------------------------------------------------------------------
Outstanding, end of period - $ -
------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
EV Traditional Stock Fund as of June 30, 1997
INVESTMENT MANAGEMENT
EV Traditional Stock 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 Incorported
Jack L. Treynor
Investment Adviser and Consultant
Stock Portfolio
Officers Independent Trustees
James B. Hawkes Donald R. Dwight
President and Trustee President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
Duncan W. Richardson
Vice President and Samuel L. Hayes, III
Portfolio Manager Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate School of
James L. O'Connor Business Administration
Treasurer
Norton H. Reamer
Alan R. Dynner President and Director, United Asset
Secretary Management Corporation
John L. Thorndike
Formerly Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
16
<PAGE>
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<PAGE>
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<PAGE>
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<PAGE>
Investment Adviser of Stock Portfolio
Boston Management and Research
24 Federal Street
Boston, MA 02110
Administrator of EV Traditional Stock 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 Traditional Stock 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.
- --------------------------------------------------------------------------------
T-STSRC-8/97
