As filed with the Securities and Exchange Commission on July 25, 1997
1933 Act File No. 2-27962
1940 Act File No. 811-1545
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 [X]
POST-EFFECTIVE AMENDMENT NO. 47 [X]
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 34 [X]
EATON VANCE SPECIAL INVESTMENT TRUST
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(Exact Name of Registrant as Specified in Charter)
24 Federal Street, Boston, Massachusetts 02110
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(Address of Principal Executive Offices)
(617) 482-8260
(Registrant's Telephone Number)
ALAN R. DYNNER
24 Federal Street, Boston, Massachusetts 02110
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective pursuant to Rule 485
(check appropriate box):
[X] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2)
If appropriate, check the following box:
[ ] this post effective amendment designates a new effective date for a
previously filed post-effective amendment.
The Registrant has filed a Declaration pursuant to Rule 24f-2 and on
February 26, 1997 filed its "Notice" as required by that Rule for the fiscal
year ended December 31, 1996. Registrant continues its election to register an
indefinite number of shares of beneficial interest pursuant to Rule 24f-2.
<PAGE>
This Amendment to the registration statement on Form N-1A consists of the
following documents and papers:
CrossReference Sheets required by Rule 481(a) under the Securities Act
of 1933
Part A -- The Prospectus of:
EV Traditional Emerging Growth Fund
Part B -- The Statement of Additional Information of:
EV Traditional Emerging Growth Fund
Part C -- Other Information
Signatures
Exhibit Index Required by Rule 483(a) under the Securities Act of 1933
Exhibits
This Amendment is not intended to amend the Prospectus and Statement of
Additional Information of any series of the Registrant not identified above.
<PAGE>
EATON VANCE SPECIAL INVESTMENT TRUST
EV TRADITIONAL EMERGING GROWTH FUND
CROSS REFERENCE SHEET
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ITEMS REQUIRED BY FORM N-14
---------------------------
PART A.
ITEM NO. ITEM CAPTION PROSPECTUS CAPTION
- -------- ------------ ------------------
1..... Cover Page Cover Page
2..... Synopsis Shareholder and Fund Expenses
3..... Condensed Financial The Fund's Financial Highlights
Information
4..... General Description of The Fund's Investment Objective; Investment
Registrant Policies and Risks; Organization of the
Fund
5..... Management of the Fund Management of the Fund
5A.... Management's Discussion Not Applicable
of Fund Performance
6..... Capital Stock and Other Organization of the Fund; Reports to
Securities Shareholders; The Lifetime Investing
Account/ Distribution Options;
Distributions and Taxes
7..... Purchase of Securities Valuing Fund Shares; How to Buy Fund Shares
Being Offered Shares;Service Plan; The Lifetime Investing
Account/Distribution Options;
The Eaton Vance Exchange Privilege;
Eaton Vance Shareholder Services
8..... Redemption or Repurchase How to Redeem Fund Shares
9..... Pending Legal Proceedings Not Applicable
PART B
ITEM NO. ITEM CAPTION STATEMENT OF ADDITIONAL INFORMATION CAPTION
- -------- ------------ -------------------------------------------
10.... Cover Page Cover Page
11.... Table of Contents Table of Contents
12.... General Information and Other Information
History
13.... Investment Objectives and Additional Information about Investment
Policies Policies; Investment Restrictions
14.... Management of the Fund Trustees and Officers
15.... Control Persons and Control Persons and Principal Holders of
Principal Holders of Securities
Securities
16.... Investment Advisory and Investment Adviser and Administrator;
Other Services Service Plan; Custodian;
Independent Accountants
17.... Brokerage Allocation and Portfolio Security Transactions
Other Practices
18.... Capital Stock and Other Other Information
Securities
<PAGE>
ITEM NO. ITEM CAPTION STATEMENT OF ADDITIONAL INFORMATION CAPTION
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19.... Purchase, Redemption and Determination of Net Asset Value; Principal
Pricing of Securities Underwriter; Services for Accumulation;
Being Offered Service for Withdrawal; Service Plan
20.... Tax Status Taxes
21.... Underwriters Principal Underwriter
22.... Calculation of Performance Investment Performance
23.... Financial Statements Financial Statements
<PAGE>
PART A
INFORMATION REQUIRED IN A PROSPECTUS
EV TRADITIONAL EMERGING GROWTH FUND
EV TRADITIONAL EMERGING GROWTH FUND (THE "FUND") IS A MUTUAL FUND
SEEKING LONG-TERM CAPITAL APPRECIATION BY INVESTING IN A DIVERSIFIED PORTFOLIO
OF EMERGING GROWTH COMPANIES THAT ARE BELIEVED TO HAVE SUPERIOR LONG-TERM
EARNINGS GROWTH PROSPECTS. THE FUND IS A SEPARATE SERIES OF EATON VANCE SPECIAL
INVESTMENT TRUST (THE "TRUST").
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank or other insured depository institution, and are not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other government agency. Shares of the Fund involve
investment risks, including fluctuations in value and the possible loss of some
or all of the principal investment.
This Prospectus is designed to provide you with information you should
know before investing in the Fund. Please retain this document for future
reference. A Statement of Additional Information for the Fund dated August 1,
1997, as supplemented from time to time, has been filed with the Securities and
Exchange Commission (the "Commission") and is incorporated herein by reference.
The Statement of Additional Information is available without charge from the
Fund's principal underwriter, Eaton Vance Distributors, Inc. (the "Principal
Underwriter"), 24 Federal Street, Boston, MA 02110 (telephone (800) 225-6265).
The Fund's investment adviser is Eaton Vance Management (the "Investment
Adviser") which is located at the same address. Eaton Vance Management also acts
as the administrator to the Fund (the "Administrator").
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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Page Page
Shareholder and Fund Expenses.......2 How to Redeem Fund Shares..........14
The Fund's Financial Highlights.....3 Reports to Shareholders............15
The Fund's Investment Objective.....4 The Lifetime Investing Account/
Investment Policies and Risks.......4 Distribution Options.............15
Organization of the Fund ...........7 The Eaton Vance Exchange
Management of the Fund .............8 Privilege........................17
Service Plan........................9 Eaton Vance Shareholder Services...18
Valuing Fund Shares................10 Distributions and Taxes............19
How to Buy Fund Shares.............10 Performance Information............20
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PROSPECTUS DATED AUGUST 1, 1997
<PAGE>
SHAREHOLDER AND FUND EXPENSES
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SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charges Imposed on Purchases
(as a percentage of offering price) 5.75%
Sales Charges Imposed on Reinvested Distributions None
Fees to Exchange Shares None
ANNUAL FUND OPERATING EXPENSES (as a percentage of average daily net assets)
Investment Adviser Fee (after expense reduction) 0.00%
Other Expenses (after expense allocation) 0.00%
Total Operating Expenses (after reductions) 0.00%
EXAMPLE
An investor would pay the following maximum initial 1 year 3 years
sales charge and expenses on a $1,000 investment, ------ -------
assuming (a) 5% annual return and (b) redemption at
the end of each period: $58 $58
Notes:
The table and Example summarize the aggregate expenses of the Fund and
are designed to help investors understand the costs and expenses they
will bear directly or indirectly by investing in the Fund. Information
for the Fund is based on its expenses for the period from the start of
business, January 2, 1997, to June 30, 1997. After an expense reduction
and allocation, the Investment Adviser Fee, Other Expenses and Total
Operating Expenses would have been 0.75%, 2.61% and 3.36%,
respectively.
The Example should not be considered a representation of past or future
expenses and actual expenses may be greater or less than those shown.
Federal regulations require the Example to assume a 5% annual return,
but actual return will vary. For further information regarding the
expenses of the Fund see "The Fund's Financial Highlights", "Management
of the Fund" and "Service Plan."
No sales charge is payable at the time of purchase on investments of $1
million or more. However, a contingent deferred sales charge of 1% will
be imposed on such investments in the event of certain redemptions
within 12 months of purchase. See "How to Buy Fund Shares" and "How to
Redeem Fund Shares."
For shares sold by Authorized Firms and remaining outstanding for at
least one year, the Fund will pay service fees not exceeding .25% per
annum of its average daily net assets. The Fund expects to begin making
service fee payments during the quarter ending March 31, 1998. After
such date, Other Expenses will be higher. See "Service Plan."
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THE FUND'S FINANCIAL HIGHLIGHTS
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The following information should be read in conjunction with the unaudited
financial statements included in the Statement of Additional Information.
Further information regarding the performance of the Fund will be contained in
its semi-annual report to shareholders which may be obtained without charge by
contacting the Principal Underwriter.
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FOR THE PERIOD FROM THE START OF BUSINESS, JANUARY 2, 1997, TO
JUNE 30, 1997 (UNAUDITED):
NET ASSET VALUE, beginning of period $10.000
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INCOME FROM OPERATIONS:
Net investment income $ 0.006
Net realized and unrealized gain on investments 0.754
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Total income from operations $ 0.760
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NET ASSET VALUE, end of period $10.760
=========
TOTAL RETURN(1) 7.60%
RATIOS/SUPPLEMENTAL DATA:*
Net assets end of period (000's omitted) $257
Ratio of net expenses to average net assets 0.00%+
Ratio of net investment income to average net assets 0.14%+
PORTFOLIO TURNOVER 137%
AVERAGE COMMISSION RATE PAID** $0.0592
* For the six months ended June 30, 1997, the operating expenses of the
Fund reflect a preliminary waiver of the investment adviser fee and an
allocation of expenses to the Investment Adviser. Had such actions not
been taken, net investment income (loss) per share and the ratios
would have been as follows:
NET INVESTMENT LOSS PER SHARE $(0.141)
Ratios (as a percentage of average net assets):
Expenses 3.36%+
Net investment loss (3.22)%+
+ Computed on an annualized basis.
** 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.
(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. Distributions, if any, are
assumed to be reinvested at the net asset value on the payable
date. Total return is computed on a non-annualized basis.
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<PAGE>
THE FUND'S INVESTMENT OBJECTIVE
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EV TRADITIONAL EMERGING GROWTH FUND (THE "FUND") IS A DIVERSIFIED SERIES OF
EATON VANCE SPECIAL INVESTMENT TRUST (THE "TRUST"). THE FUND'S INVESTMENT
OBJECTIVE IS TO SEEK LONG-TERM CAPITAL APPRECIATION. THE FUND INTENDS TO ACHIEVE
ITS OBJECTIVE BY INVESTING IN A DIVERSIFIED PORTFOLIO OF EMERGING GROWTH
COMPANIES THAT ARE BELIEVED TO HAVE SUPERIOR LONG-TERM EARNINGS GROWTH
PROSPECTS.
The Fund is designed for long-term investors. The Fund is not intended
to be a complete investment program. Prospective investors should take into
account their objectives and other investments when considering the purchase of
Fund shares. The Fund cannot assure achievement of its investment objective. The
Fund's investment objective is fundamental and may not be changed without
obtaining the approval of the Fund's shareholders.
INVESTMENT POLICIES AND RISKS
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The Fund invests in a broadly diversified selection of publicly-traded equity
securities of emerging growth companies. In the view of the Adviser, "emerging
growth companies" are companies that are expected to demonstrate earnings growth
rates and profit margins that are substantially in excess of the average of all
publicly-traded companies in the U.S. It is expected that most emerging growth
companies invested in by the Fund will have annual revenues of between $50
million and $2 billion, but the Fund may also invest in larger and smaller
companies identified as having characteristics of emerging growth. The Adviser
believes that investing in emerging growth companies offers significant
opportunities for long-term capital appreciation, particularly if the Fund can
invest in such companies before their potential is broadly recognized by
investors.
UNDER NORMAL MARKET CONDITIONS, THE FUND WILL INVEST AT LEAST 65% OF
ITS TOTAL ASSETS IN EQUITY SECURITIES OF EMERGING GROWTH COMPANIES. For this
purpose, equity securities include common stocks and securities convertible into
common stocks. In selecting companies for investment, the Investment Adviser may
consider overall growth prospects, financial condition, competitive position,
technology, marketing expertise, profit margins, return on investment, capital
resources, management and other factors. The Fund may invest up to 35% of its
assets in preferred stocks, warrants, money market instruments (to meet
anticipated redemption requests or while investment of cash is pending) and
other securities and instruments described in this Prospectus.
For temporary defensive purposes, such as during abnormal market or
economic conditions, the Fund may also invest without limitation in various
money market instruments and high grade debt obligations. The Fund may also
temporarily borrow up to 5% of the value of its total assets to satisfy
redemption requests or settle securities transactions.
An investment in the Fund entails the risk that the principal value of
Fund shares may not increase or may decline. The Fund's investments will include
investments in smaller, less seasoned companies for which there is less publicly
available information than larger, more established companies. The securities of
these companies, which may include legally restricted securities, are
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<PAGE>
generally subject to greater price fluctuations, limited liquidity, higher
transaction costs and higher investment risk. These companies may have limited
product lines, markets or financial resources, or they may be dependent on a
limited management group. Investments in smaller companies may involve a higher
degree of business and financial risk that can result in substantial losses.
The Fund may invest up to 20% of its assets in securities issued by
foreign companies. Investing in such securities (including depository receipts)
involves considerations and possible risks not typically associated with
investing in securities issued by domestic corporations. The value of foreign
investments are affected by changes in currency rates or exchange control
regulations, application of foreign tax laws (including withholding tax),
changes in governmental administration or economic or monetary policy (in this
country or abroad), or changed circumstances in dealings between nations.
Foreign currency exchange rates may fluctuate significantly over short periods
of time causing the Fund's net asset value to fluctuate as well. Costs are
incurred in connection with conversions between various currencies. In addition,
foreign brokerage commissions, custody fees and other costs of investing are
generally higher than in the United States, and foreign securities markets may
be less liquid, more volatile and less subject to government supervision than in
the United States. Investments in foreign issuers could be adversely affected by
other factors not present in the United States, including expropriation,
confiscatory taxation, lack of uniform accounting and auditing standards, delays
in settlements of transactions, less publicly-available financial and other
information, armed conflict and potential difficulties in enforcing contractual
obligations.
RESTRICTED SECURITIES. Securities that are not freely tradable or which are
subject to restrictions on sale under the Securities Act of 1933 are considered
restricted. Such securities may be illiquid and may be difficult to value
properly. The Fund's holdings of illiquid securities may not exceed 15% of its
net assets. Illiquid securities include securities legally restricted as to
resale such as commercial paper issued pursuant to Section 4(2) of the
Securities Act of 1933 and securities eligible for resale pursuant to Rule 144A
thereunder. Section 4(2) and Rule 144A securities may, however, be treated as
liquid by the Investment Adviser pursuant to procedures adopted by the Trustees,
which require consideration of factors such as trading activity, availability of
market quotations and number of dealers willing to purchase the security. Such
securities may increase the level of fund illiquidity to the extent qualified
institutional buyers become uninterested in purchasing such securities.
DERIVATIVE INSTRUMENTS. The Fund may purchase or sell derivative instruments to
hedge against securities price declines and currency movements. The Fund may
engage in transactions in derivative instruments (which derive their value by
reference to other securities, indices, instruments, or currencies) in the U.S.
and abroad. Such transactions may include the purchase and sale of stock index
futures contracts and options on stock index futures; the purchase of put
options and the sale of call options on securities (including index options) and
options on foreign currency; equity and currency swaps; and the purchase and
sale of forward currency exchange contracts and currency futures. The Fund's
transactions in derivative instruments involve a risk of loss or depreciation
due to: unanticipated adverse changes in securities prices, interest rates, the
other financial instruments' prices or currency exchange rates; the inability to
close out a position; default by the counterparty; imperfect correlation between
a position and the desired hedge; tax constraints on closing out positions; and
portfolio management constraints on securities subject to such transactions. The
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<PAGE>
Fund may use transactions in derivative instruments as a substitute for the
purchase and sale of securities. Derivative transactions may be more
advantageous in a given circumstance than transactions involving securities due
to more favorable current tax treatment, lower transaction costs, or greater
liquidity. While many derivative instruments have built-in leveraging
characteristics, the Fund will not use them to leverage its net assets.
The purchase and sale of derivative instruments is a highly specialized
activity that can expose the Fund to a significant risk of loss. The built-in
leveraging inherent to many derivative instruments can result in losses that
substantially exceed the initial amount paid or received. Equity swaps and
over-the-counter options are private contracts in which there is a risk of loss
in the event of a default on an obligation to pay by a counterparty. Derivative
instruments may be difficult to value, may be illiquid, and may be subject to
wide swings in valuation caused by changes in the value of an underlying
security, index, instrument, or currency. There can be no assurance that the use
of derivative instruments will be advantageous to the Fund.
The Fund will only enter into equity swaps and over-the-counter options
contracts with counterparties whose credit quality or claims paying ability are
considered to be investment grade by the Investment Adviser. In addition, at the
time of entering into a transaction, the Fund's credit exposure to any one
counterparty will be limited to 5% or less of the net assets of the Fund. Some
of the Fund's investment in equity swaps and over-the-counter options may be
treated as illiquid assets. All futures contracts entered into by the Fund will
be traded on exchanges or boards of trade that are licensed and regulated by the
Commodities Futures Trading Commission and must be executed through a futures
commission merchant or brokerage firm that is a member of the relevant exchange.
Currency swaps involve the exchange of rights to make or receive
payments in specified currencies. Since currency swaps are individually
negotiated, the Fund expects to achieve an acceptable degree of correlation
between its portfolio investments and its currency swap positions. Currency
swaps usually involve the delivery of the entire principal value of one
designated currency in exchange for the other designated currency. Therefore,
the entire principal value of a currency swap is subject to the risk that the
other party to the swap will default on its contractual delivery obligations. If
the Investment Adviser is incorrect in its forecasts of market values and
currency exchange rates, the Fund's performance will be adversely affected.
SHORT SALES AGAINST-THE-BOX. The Fund may sell securities short if it owns at
least an equal amount of the security sold short or another security convertible
or exchangeable for an equal amount of the security sold short without payment
of further compensation (a short sale against-the-box). Under current tax law,
short sales against-the-box enable the Fund to hedge its exposure to securities
that it holds without selling the securities and recognizing gains. A short sale
against-the-box requires that the short seller absorb certain costs so long as
the position is open. In a short sale against-the-box, the short seller is
exposed to the risk of being forced to deliver appreciated stock to close the
position if the borrowed stock is called in, causing a taxable gain to be
recognized. The Fund expects normally to close its short sales against-the-box
by delivering newly-acquired stock. The Fund's ability to utilize short sales
may be limited if proposed tax legislation is enacted. No more than 20% of the
Fund's assets will be subject to short sales at any one time.
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<PAGE>
LENDING OF PORTFOLIO SECURITIES. The Fund may seek to earn income by lending
portfolio securities to broker-dealers or other institutional borrowers. As with
other extensions of credit there are risks of delay in recovery or even loss of
rights in the securities loaned if the borrower of the securities fails
financially. However, the loans will be made only to organizations deemed by the
Investment Adviser to be sufficiently creditworthy and when, in the judgment of
the Investment Adviser, the consideration which can be earned from securities
loans of this type, net of administrative expenses and any finders fees,
justifies the attendant risk.
CERTAIN INVESTMENT POLICIES. The Fund has adopted certain fundamental investment
restrictions and policies which are enumerated in detail in the Statement of
Additional Information and which may not be changed unless authorized by a
shareholder vote. Among the fundamental restrictions, the Fund may not (a)
borrow money, except as permitted by the Investment Company Act of 1940 (the
"1940 Act"), (b) invest 25% or more of its assets in securities of companies in
any one industry, or (c) with respect to 75% of its total assets, invest more
than 5% of total assets (taken at current value) in the securities of any one
issuer, or invest in more than 10% of the outstanding voting securities of any
one issuer, except obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities and except securities of other investment
companies. Except with respect to the borrowing restriction, investment
restrictions are considered at the time of acquisition of assets; the sale of
portfolio assets is not required in the event of a subsequent change in
circumstances.
Except for the investment objective and the fundamental investment
restrictions and policies specifically identified above and enumerated in the
Statement of Additional Information, the policies of the Fund are not
fundamental policies and accordingly may be changed by the Trustees of the Trust
without obtaining the approval of the shareholders of the Fund.
ORGANIZATION OF THE FUND
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THE FUND IS A DIVERSIFIED SERIES OF EATON VANCE SPECIAL INVESTMENT TRUST (THE
"TRUST"), A BUSINESS TRUST ESTABLISHED UNDER MASSACHUSETTS LAW PURSUANT TO A
DECLARATION OF TRUST DATED MARCH 27, 1989, AS AMENDED. The Trustees of the Trust
are responsible for the overall management and supervision of its affairs. The
Trust may issue an unlimited number of shares of beneficial interest (no par
value per share) in one or more series (such as the Fund). Each share represents
an equal proportionate beneficial interest in the Fund. When issued and
outstanding, the shares are fully paid and nonassessable by the Trust and
redeemable as described under "How to Redeem Fund Shares." There are no annual
meetings of shareholders, but special meetings may be held as required by law to
elect Trustees and consider certain other matters. Shareholders are entitled to
one vote for each full share held. Fractional shares may be voted
proportionately. Shares have no preemptive or conversion rights and are freely
transferable. In the event of the liquidation of the Fund, shareholders are
entitled to share pro rata in the net assets of the Fund available for
distribution to shareholders. Eaton Vance may be deemed a control person of the
Fund because as of June 30, 1997 it was the record owner of approximately 83.8%
of Fund shares.
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<PAGE>
The Fund's investment policies include a fundamental investment
provision allowing the Fund to invest its assets in an open-end management
investment company having substantially the same investment policies and
restrictions as the Fund. This investment company would be advised by the
Investment Adviser (or an affiliate) and pay an advisory fee no higher than the
advisory fee paid by the Fund. The Board of Trustees may implement the new
investment policy without shareholder approval at any time. This structure is
commonly referred to as "master-feeder."
MANAGEMENT OF THE FUND
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THE TRUST ENGAGES EATON VANCE MANAGEMENT ("EATON VANCE") AS THE FUND'S
INVESTMENT ADVISER. EATON VANCE, ITS AFFILIATES AND ITS PREDECESSOR COMPANIES
HAVE BEEN MANAGING ASSETS OF INDIVIDUALS AND INSTITUTIONS SINCE 1924 AND
MANAGING INVESTMENT COMPANIES SINCE 1931.
Acting under the general supervision of the Board of Trustees of the
Trust, Eaton Vance manages the Fund's investments and affairs. Eaton Vance also
furnishes for the use of the Fund office space and all necessary office
facilities, equipment and personnel for servicing the investments of the Fund.
Under the investment advisory agreement with the Trust on behalf of the Fund,
Eaton Vance receives a monthly advisory fee of .0625% (equivalent to .75%
annually) of the average daily net assets of the Fund up to $500 million; the
fee will be reduced at various asset levels over $500 million.
For the period from the start of business, January 2, 1997, to June 30,
1997, absent a fee reduction, the Fund would have paid Eaton Vance advisory fees
equivalent to 0.75% (annualized) of the Fund's average daily net assets for such
period.
EATON VANCE ACTS AS INVESTMENT ADVISER TO INVESTMENT COMPANIES AND
VARIOUS INDIVIDUAL AND INSTITUTIONAL CLIENTS WITH ASSETS UNDER MANAGEMENT OF
OVER $17 BILLION. Eaton Vance is a wholly-owned subsidiary of Eaton Vance Corp.,
a publicly-held holding company which through its subsidiaries and affiliates
engages primarily in investment management, administration and marketing
activities. The Principal Underwriter is a wholly-owned subsidiary of Eaton
Vance.
Edward E. Smiley, Jr. has acted as the portfolio manager of the Fund since
it commenced operations. He has been a Vice President of Eaton Vance and BMR
since 1996. Prior to joining Eaton Vance, he was a Senior Product Manager,
Equity Management for TradeStreet Investment Associates, Inc., a wholly-owned
subsidiary of Nations Bank.
Mr. Smiley was a portfolio manager of a mutual fund with his prior
employer. The total return of that fund for the one-year period ended September
19, 1996 and for the entire period during which Mr. Smiley managed the fund was
as follows:
One Year 18.60%
December 10, 1992 (inception of fund)
through September 19, 1996 15.31% (average annual)
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The foregoing information is provided to illustrate past performance of
Mr. Smiley in managing a portfolio similar to the Fund. The foregoing
information is considered relevant because the other mutual fund was managed by
Mr. Smiley using substantially the same investment objective, policies and
strategies as those of the Fund. Of course, past performance is not indicative
of future performance and investment returns will fluctuate reflecting market
conditions and changes in company-specific fundamentals of portfolio securities.
Eaton Vance places the portfolio securities transactions of the Fund
with many broker-dealer firms and uses its best efforts to obtain execution of
such transactions at prices which are advantageous to the Fund and at reasonably
competitive commission rates. Subject to the foregoing, Eaton Vance may consider
sales of shares of the Fund or of other investment companies sponsored by Eaton
Vance as a factor in the selection of broker-dealer firms to execute portfolio
transactions. The Fund and Eaton Vance have adopted Codes of Ethics relating to
personal securities transactions. The Codes permit Eaton Vance personnel to
invest in securities (including securities that may be purchased or held by the
Fund) for their own accounts, subject to certain pre-clearance, reporting and
other restrictions and procedures contained in such Codes.
The Trust has retained the services of Eaton Vance to act as
Administrator of the Fund. As Administrator, Eaton Vance supervises the overall
administration of the Fund. For these services Eaton Vance currently receives no
compensation. The Trustees of the Trust may determine, in the future, to
compensate Eaton Vance for such services.
The Fund will be responsible for all of its respective costs and
expenses not expressly stated to be payable by Eaton Vance under the investment
advisory agreement or the administration agreement, or by the Principal
Underwriter under the distribution agreement. Such costs and expenses to be
borne by the Fund include, without limitation: custody and transfer agency fees
and expenses, including those incurred for determining net asset value and
keeping accounting books and records; expenses of pricing and valuation
services; the cost of share certificates; membership dues in investment company
organizations; brokerage commissions and fees; fees and expenses of registering
under the securities laws; expenses of reports to shareholders and investors;
proxy statements, and other expenses of shareholders' or investors' meetings;
insurance premiums, printing and mailing expenses; interest, taxes and corporate
fees; legal and accounting expenses; compensation and expenses of Trustees not
affiliated with Eaton Vance; and investment advisory fees, and, if any,
administrative services fees. The Fund will also bear expenses incurred in
connection with any litigation in which the Fund is a party and any legal
obligation to indemnify its officers and Trustees with respect thereto, to the
extent not covered by insurance.
SERVICE PLAN
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In addition to advisory fees and other expenses, the Fund pays service fees
pursuant to a Service Plan (the "Plan") designed to meet the service fee
requirements of the sales charge rule of the National Association of Securities
Dealers, Inc. THE PLAN PROVIDES THAT THE FUND MAY MAKE SERVICE FEE PAYMENTS FOR
PERSONAL SERVICES AND/OR THE MAINTENANCE OF SHAREHOLDER ACCOUNTS TO THE
PRINCIPAL UNDERWRITER, FINANCIAL SERVICE FIRMS ("AUTHORIZED FIRMS") AND OTHER
PERSONS IN AMOUNTS NOT EXCEEDING .25% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR
ANY FISCAL YEAR. The Trustees of the Trust have initially implemented the Plan
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<PAGE>
by authorizing the Fund to make quarterly service fee payments to the
Principal Underwriter and Authorized Firms in amounts not expected to exceed
.25% of the Fund's average daily net assets for any fiscal year based on the
value of Fund shares sold by such persons and remaining outstanding for at least
twelve months. The Fund expects to begin making service fee payments during the
quarter ending March 31, 1998.
VALUING FUND SHARES
- --------------------------------------------------------------------------------
THE FUND VALUES ITS SHARES ONCE ON EACH DAY THE NEW YORK STOCK EXCHANGE (THE
"EXCHANGE") IS OPEN FOR TRADING, as of the close of regular trading on the
Exchange (normally 4:00 p.m. New York time). The Fund's net asset value per
share is determined by its custodian, Investors Bank & Trust Company ("IBT") (as
agent for the Fund), in the manner authorized by the Trustees of the Trust. Net
asset value is computed by dividing the value of the Fund's total assets, less
its liabilities, by the number of Fund shares outstanding. Securities listed on
securities exchanges or in the NASDAQ National Market are valued at closing sale
prices.
Authorized Firms must communicate an investor's order to the Principal
Underwriter prior to the close of the Principal Underwriter's business day to
receive that day's net asset value per Fund share and the public offering price
based thereon. It is the Authorized Firms' responsibility to transmit orders
promptly to the Principal Underwriter.
SHAREHOLDERS MAY DETERMINE THE VALUE OF THEIR INVESTMENT BY MULTIPLYING
THE NUMBER OF FUND SHARES OWNED BY THE CURRENT NET ASSET VALUE PER
SHARE.
HOW TO BUY FUND SHARES
- --------------------------------------------------------------------------------
SHARES OF THE FUND MAY BE PURCHASED FOR CASH OR MAY BE ACQUIRED IN EXCHANGE FOR
ACCEPTABLE SECURITIES. Investors may purchase shares of the Fund through
Authorized Firms at the effective public offering price, which price is based on
the effective net asset value per share plus the applicable sales charge. The
Fund receives the net asset value, while the sales charge is divided between the
Authorized Firm and the Principal Underwriter. An Authorized Firm may charge its
customers a fee in connection with transactions executed by that Firm. The Fund
may suspend the offering of shares at any time and may refuse an order for the
purchase of shares.
The sales charge may vary depending on the size of the purchase and the
number of shares of Eaton Vance funds the investor may already own, any
arrangement to purchase additional shares during a 13-month period or special
purchase programs. Complete details of how investors may purchase shares at
reduced sales charges under a Statement of Intention, Right of Accumulation, or
various employee benefit plans are available from Authorized Firms or the
Principal Underwriter.
-10-
<PAGE>
The current sales charges and dealer commissions for purchases made prior to
September 1, 1997 are:
<TABLE>
SALES CHARGE SALES CHARGE DEALER DISCOUNT
AS PERCENTAGE OF AS PERCENTAGE OF AS PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED OFFERING PRICE
- ------------------ -------------- --------------- --------------
<S> <C> <C> <C>
Less than $100,000.................. 4.75% 4.99% 4.00%
$100,000 but less than $250,000..... 3.75% 3.90% 3.15%
$250,000 but less than $500,000..... 2.75% 2.83% 2.30%
$500,000 but less than $1,000,000... 2.00% 2.04% 1.70%
$1,000,000 or more.................. 0%* 0%* See Below**
</TABLE>
The sales charges and dealer commissions for purchases made on and after
September 1, 1997 are:
<TABLE>
SALES CHARGE SALES CHARGE DEALER COMMISSION
AS PERCENTAGE OF AS PERCENTAGE OF AS PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED OFFERING PRICE
- ------------------ -------------- --------------- --------------
<S> <C> <C> <C>
Less than $50,000................... 5.75% 6.10% 5.00%
$50,000 but less than $100,000...... 4.75% 4.99% 4.00%
$100,000 but less than $250,000..... 3.75% 3.90% 3.00%
$250,000 but less than $500,000..... 3.00% 3.10% 2.50%
$500,000 but less than $1,000,000... 2.00% 2.04% 1.75%
$1,000,000 or more.................. 0.00%* 0.00%* See Below**
</TABLE>
* No sales charge is payable at the time of purchase on investments of $1
million or more. A contingent deferred sales charge ("CDSC") of 1% will
be imposed on such investments in the event of certain redemptions
within 12 months of purchase.
** A commission on sales of $1 million or more will be paid as follows:
1.00% on amounts of $1 million or more but less than $3 million; plus
0.50% on amounts from $3 million but less than $5 million; plus 0.25%
on amounts of $5 million or more. Purchases of $1 million or more will
be aggregated over a 12-month period for purposes of determining the
commission to be paid.
The Principal Underwriter may at times allow discounts up to the full
sales charge. During periods when the discount includes the full sales charge,
Authorized Firms may be deemed to be underwriters as that term is defined in the
Securities Act of 1933. The Principal Underwriter may, from time to time, at its
own expense, provide additional incentives to Authorized Firms which employ
registered representatives who sell Fund shares and/or shares of other funds
distributed by the Principal Underwriter. In some instances, such additional
incentives may be offered only to certain Authorized Firms whose representatives
sell or are expected to sell significant amounts of shares.
An initial investment in the Fund must be at least $1,000. Once an
account has been established the investor may send investments of $50 or more at
any time directly to the Fund's transfer agent (the "Transfer Agent") as
follows: First Data Investor Services Group, P.O. Box 5123 Westborough, MA
01581-5123. The $1,000 minimum initial investment is waived for Bank Automated
Investing accounts, which may be established with an investment of $50 or more.
See "Eaton Vance Shareholder Services."
Shares of the Fund may be sold at net asset value to current and
retired Directors and Trustees of Eaton Vance funds; to clients and current and
retired officers and employees of Eaton Vance, its affiliates and other
investment advisers of Eaton Vance sponsored funds; to registered
representatives, employees of Authorized Firms and to bank employees who refer
customers to registered representatives of Authorized Firms; to officers and
employees of IBT and the Transfer Agent; and to such persons' spouses and
children under the age of 21 and their beneficial accounts. Shares may also be
-11-
<PAGE>
issued at net asset value (1) in connection with the merger of an investment
company with the Fund, (2) to investors making an investment as part of a fixed
fee program whereby an entity unaffiliated with Eaton Vance provides multiple
investment services, such as management, brokerage and custody, and (3) to
investment advisors, financial planners or other intermediaries who place trades
for their own accounts or the accounts of their clients and who charge a
management, consulting or other fee for their services; clients of such
investment advisors, financial planners or other intermediaries who place trades
for their own accounts if the accounts are linked to the master account of such
investment advisor, financial planner or other intermediary on the books and
records of the broker or agent; and retirement and deferred compensation plans
and trusts used to fund those plans, including, but not limited to, those
defined in Section 401(a), 403(b) or 457 of the Internal Revenue Code of 1986,
as amended (the "Code") ("Eligible Plans") and "rabbi trusts." The Principal
Underwriter may pay commissions to Authorized Firms who initiate and are
responsible for purchases of shares of the Fund by Eligible Plans of up to 1.00%
of the amount invested in such shares.
No sales charge is payable at the time of purchase where the amount
invested represents redemption proceeds from a mutual fund unaffiliated with
Eaton Vance if the redemption occurred no more than 60 days prior to the
purchase of Fund shares and the redeemed shares were potentially subject to a
sales charge. A CDSC of 0.50% will be imposed on such investments in the event
of certain redemptions within 12 months of purchase and the Authorized Firm will
be paid a commission on such sales of 0.50% of the amount invested.
ACQUIRING FUND SHARES IN EXCHANGE FOR SECURITIES. IBT, as escrow agent, will
receive securities acceptable to Eaton Vance, as Administrator, in exchange for
Fund shares at the applicable public offering price as determined above. The
minimum value of securities (or securities and cash) accepted for deposit is
$5,000. Securities accepted will be sold on the day of their receipt or as soon
thereafter as possible. The number of Fund shares to be issued in exchange for
securities will be the aggregate proceeds from the sale of such securities,
divided by the applicable public offering price per Fund share on the day such
proceeds are received. Eaton Vance will use reasonable efforts to obtain the
then current market price for such securities, but does not guarantee the best
available price. Eaton Vance will absorb any transaction costs, such as
commissions, on the sale of the securities.
Securities determined to be acceptable should be transferred via book
entry or physically delivered, in proper form for transfer, through an
Authorized Firm, together with a completed and signed Letter of Transmittal in
approved form (available from Authorized Firms), as follows:
IN THE CASE OF BOOK ENTRY:
Deliver through Depository Trust Co.
Broker #2212
Investors Bank & Trust Company
For A/C EV Traditional Emerging Growth Fund
-12-
<PAGE>
IN THE CASE OF PHYSICAL DELIVERY:
Investors Bank & Trust Company
Attention: EV Traditional Emerging Growth Fund
Physical Securities Processing Settlement Area
200 Clarendon Street
Boston, MA 02116
Investors who are contemplating an exchange of securities for shares of
the Fund, or their representatives, must contact Eaton Vance to determine
whether the securities are acceptable before forwarding such securities. Eaton
Vance reserves the right to reject any securities. Exchanging securities for
Fund shares may create a taxable gain or loss. Each investor should consult his
or her tax adviser with respect to the particular federal, state and local tax
consequences of exchanging securities for Fund shares.
STATEMENT OF INTENTION AND ESCROW AGREEMENT. If the investor, on an application,
makes a Statement of Intention to invest a specified amount over a
thirteen-month period, then out of the initial purchase (or subsequent purchases
if necessary) 5% of the dollar amount specified on the application shall be held
in escrow by the escrow agent in the form of shares (computed to the nearest
full share at the public offering price applicable to the initial purchase
hereunder) registered in the investor's name. All income dividends and capital
gains distributions on escrowed shares will be paid to the investor or to the
investor's order. When the minimum investment so specified is completed, the
escrowed shares will be delivered to the investor. If the investor has an
accumulation account the shares will remain on deposit under the investor's
account.
If total purchases under this Statement of Intention are less than the
amount specified, the investor will promptly remit to the Principal Underwriter
any difference between the sales charge on the amount specified and on the
amount actually purchased. If the investor does not within 20 days after written
request by the Principal Underwriter or the Authorized Firm pay such difference
in sales charge, the escrow agent will redeem an appropriate number of the
escrowed shares in order to realize such difference. Full shares remaining after
any such redemption together with any excess cash proceeds of the shares so
redeemed will be delivered to the investor or to the investor's order by the
escrow agent.
If total purchases made under this Statement are large enough to
qualify for a lower sales charge than that applicable to the amount specified,
all transactions will be computed at the expiration date of the Statement to
give effect to the lower charge. Any difference in sales charge will be refunded
to the investor in cash, or applied to the purchase of additional shares at the
lower charge if specified by the investor. This refund will be made by the
Authorized Firm and by the Principal Underwriter. If at the time of the
recomputation an Authorized Firm other than the original Firm is placing the
orders, the adjustment will be made only on those shares purchased through the
Firm then handling the investor's account.
IF YOU DON'T HAVE AN AUTHORIZED FIRM, EATON VANCE CAN RECOMMEND ONE.
-13-
<PAGE>
HOW TO REDEEM FUND SHARES
- --------------------------------------------------------------------------------
A SHAREHOLDER MAY REDEEM FUND SHARES IN ONE OF THREE WAYS - BY MAIL, BY
TELEPHONE OR THROUGH AN AUTHORIZED FIRM. The redemption price will be based on
the net asset value per Fund share next computed after a redemption request is
received in the proper form as described below.
REDEMPTION BY MAIL: Shares may be redeemed by delivering to the Transfer Agent,
First Data Investor Services Group, P.O. Box 5123, Westborough, MA 01581-5123,
during its business hours a written request for redemption in good order, plus
any share certificates with executed stock powers. Good order means that all
relevant documents must be endorsed by the record owner(s) exactly as the shares
are registered and the signature(s) must be guaranteed by a member of either the
Securities Transfer Association's STAMP program or the New York Stock Exchange's
Medallion Signature Program, or certain banks, savings and loan institutions,
credit unions, securities dealers, securities exchanges, clearing agencies and
registered securities associations as required by a Commission regulation and
acceptable to the Transfer Agent. In addition, in some cases, good order may
require the furnishing of additional documents such as where shares are
registered in the name of a corporation, partnership or fiduciary.
REDEMPTION BY TELEPHONE: Shares may be redeemed by telephone provided the
investor has not disclaimed in writing the use of the privilege. Such
redemptions can be effected by calling the Transfer Agent at 800-262-1122,
Monday through Friday, 9:00 a.m. to 4:00 p.m. (Eastern Standard Time). The
proceeds of a telephone redemption may be no greater than the maximum amount
established by the Principal Underwriter (currently $50,000) and may be mailed
only to the account address of record. Shares held by corporations, trusts or
certain other entities, or subject to fiduciary arrangements, may not be
redeemed by telephone. Neither the Fund, the Principal Underwriter nor the
Transfer Agent will be responsible for the authenticity of redemption
instructions received by telephone, provided that reasonable procedures to
confirm that instructions communicated by telephone are genuine have been
followed. Telephone instructions will be tape recorded. In times of drastic
economic or market changes, a telephone redemption may be difficult to
implement.
REDEMPTION THROUGH AN AUTHORIZED FIRM: To sell shares at their net asset value
through an Authorized Firm (a repurchase), a shareholder can place a repurchase
order with the Authorized Firm, which may charge a fee. The value of such shares
is based upon the net asset value calculated after the Principal Underwriter, as
the Fund's agent, receives the order. It is the Authorized Firm's responsibility
to transmit promptly repurchase orders to Principal Underwriter. Throughout this
Prospectus, the word "redemption" is generally meant to include a repurchase.
Within seven days after receipt of a redemption request in good order
by the Transfer Agent, the Fund will make payment in cash for the net asset
value of the shares as of the date determined above, reduced by the amount of
any federal income tax required to be withheld.
If shares were recently purchased, the proceeds of a redemption will
not be sent until the check (including a certified or cashier's check) received
for the shares purchased has cleared. Payment for shares tendered for redemption
may be delayed up to 15 days from the purchase date when the purchase check has
not yet cleared. Redemptions may result in a taxable gain or loss.
-14-
<PAGE>
Due to the high cost of maintaining small accounts, the Fund reserves
the right to redeem accounts with balances of less than $750. Prior to such a
redemption, shareholders will be given 60 days' written notice to make an
additional purchase. However, no such redemption would be required by the Fund
if the cause of the low account balance was a reduction in the net asset value
of Fund shares.
If shares have been purchased at net asset value with no initial sale
charge by virtue of the purchase having been in the amount of $1 million or more
and are redeemed within 12 months of purchase, a CDSC of 1% will be imposed on
such redemption. If shares have been purchased at net asset value because the
amount invested represents redemption proceeds from a mutual fund unaffiliated
with Eaton Vance (as described under "How to Buy Fund Shares") and are redeemed
within 12 months of purchase, a CDSC of 0.50% will be imposed on such
redemption. The CDSC will be imposed on an amount equal to the lesser of the
current market value or the original purchase price of the shares redeemed.
Accordingly, no CDSC will be imposed on increases in account value above the
initial purchase price, including any distributions that have been reinvested in
additional shares. In determining whether a CDSC is applicable to a redemption,
it will be assumed that redemptions are made first from any shares in the
shareholder's account that are not subject to a CDSC. The CDSC will be retained
by the Principal Underwriter.
The CDSC is waived for redemptions involving certain liquidation,
merger or acquisition transactions involving other investment companies. If a
shareholder reinvests redemption proceeds in accordance with the conditions set
forth under "Eaton Vance Shareholder Services -- Reinvestment Privilege", the
shareholder's account will be credited with the amount of any CDSC paid on such
redeemed shares.
REPORTS TO SHAREHOLDERS
- --------------------------------------------------------------------------------
THE FUND WILL ISSUE TO ITS SHAREHOLDERS SEMI-ANNUAL AND ANNUAL REPORTS
CONTAINING FINANCIAL STATEMENTS. Financial statements included in annual reports
are audited by the Fund's independent accountants. Shortly after the end of each
calendar year, the Fund will furnish its shareholders with information necessary
for preparing federal and state income tax returns. Consistent with applicable
law, duplicate mailings of shareholder reports and certain other Fund
information to shareholders residing at the same address may be eliminated.
THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS
- --------------------------------------------------------------------------------
AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF FUND SHARES, THE TRANSFER AGENT
WILL SET UP A LIFETIME INVESTING ACCOUNT FOR THE INVESTOR ON THE FUND'S RECORDS.
This account is a complete record of all transactions between the investor and
the Fund, which at all times shows the balance of shares owned. The Fund will
not issue share certificates except upon request.
Each time a transaction takes place in a shareholder's account, the
shareholder will receive a statement showing complete details of the transaction
and the current balance in the account. (Under certain investment plans,
statements may be sent only quarterly.) THE LIFETIME INVESTING ACCOUNT PERMITS A
SHAREHOLDER TO MAKE ADDITIONAL INVESTMENTS IN SHARES BY SENDING A CHECK FOR $50
OR MORE to the Transfer Agent.
-15-
<PAGE>
Any questions concerning a shareholder's account or services available
may be directed by telephone to EATON VANCE SHAREHOLDER SERVICES at
800-225-6265, extension 2, or in writing to the Transfer Agent, First Data
Investor Services Group, P.O. Box 5123, Westborough, MA 01581-5123 (please
provide the name of the shareholder, the Fund and the account number).
THE FOLLOWING DISTRIBUTION OPTIONS WILL BE AVAILABLE TO ALL LIFETIME
INVESTING ACCOUNTS and may be changed as often as desired by written notice to
the Fund's dividend disbursing agent, First Data Investor Services Group, P.O.
Box 5123, Westborough, MA 01581-5123. The currently effective option will appear
on each account statement.
Share Option -- Dividends and capital gains will be reinvested in
additional shares.
Income Option -- Dividends will be paid in cash, and capital gains will be
reinvested in additional shares.
Cash Option -- Dividends and capital gains will be paid in cash.
The Share Option will be assigned if no other option is specified.
Distributions, including those reinvested, will be reduced by any withholding
required under the federal income tax laws.
If the Income Option or Cash Option has been selected, dividend and/or
capital gains distribution checks which are returned by the United States Postal
Service as not deliverable or which remain uncashed for six months or more will
be reinvested in the account in shares at the then current net asset value.
Furthermore, the distribution option on the account will be automatically
changed to the Share Option until such time as the shareholder selects a
different option.
DISTRIBUTION INVESTMENT OPTION. In addition to the distribution options
set forth above, dividends and/or capital gains may be invested in additional
shares of another Eaton Vance fund. Before selecting this option, a shareholder
should obtain a prospectus of the other Eaton Vance fund and consider its
objectives and policies carefully.
"STREET NAME" ACCOUNTS. If shares of the Fund are held in a "street
name" account with an Authorized Firm, all recordkeeping, transaction processing
and payments of distributions relating to the beneficial owner's account will be
performed by the Authorized Firm, and not by the Fund and its Transfer Agent.
Since the Fund will have no record of the beneficial owner's transactions, a
beneficial owner should contact the Authorized Firm to purchase, redeem or
exchange shares, to make changes in or give instructions concerning the account,
or to obtain information about the account. The transfer of shares in a "street
name" account to an account with another Authorized Firm or to an account
directly with the Fund involves special procedures and will require the
beneficial owner to obtain historical purchase information about the shares in
the account from the Authorized Firm. Before establishing a "street name"
account with an Authorized Firm, or transferring the account to another
Authorized Firm, an investor wishing to reinvest distributions should determine
whether the Authorized Firm which will hold the shares allows reinvestment of
distributions in "street name" accounts.
-16-
<PAGE>
THE EATON VANCE EXCHANGE PRIVILEGE
- --------------------------------------------------------------------------------
Shares of the Fund currently may be exchanged for shares of any of the following
funds: Eaton Vance Cash Management Fund, Eaton Vance Income Fund of Boston,
Eaton Vance Municipal Bond Fund L.P., Eaton Vance Tax Free Reserves and any fund
in the Eaton Vance Traditional Group of Funds on the basis of the net asset
value per share of each fund at the time of the exchange (plus, in the case of
an exchange made within six months of the date of purchase of shares subject to
an initial sales charge, an amount equal to the difference, if any, between the
sales charge previously paid on the shares being exchanged and the sales charge
payable on the shares being acquired). Exchange offers are available only in
states where shares of the fund being acquired may be legally sold.
Each exchange must involve shares which have a net asset value of at
least $1,000. The exchange privilege may be changed or discontinued without
penalty. Shareholders will be given sixty (60) days' notice prior to any
termination or material amendment of the exchange privilege. The Fund does not
permit the exchange privilege to be used for "Market Timing" and may terminate
the exchange privilege for any shareholder account engaged in Market Timing
activity. Any shareholder account for which more than two round-trip exchanges
are made within any twelve-month period will be deemed to be engaged in Market
Timing. Furthermore, a group of unrelated accounts for which exchanges are
entered contemporaneously by a financial intermediary will be considered to be
engaged in Market Timing.
Shares of the Fund which are subject to a CDSC may be exchanged into
any of the above funds without incurring the CDSC. The shares acquired in an
exchange may be subject to a CDSC upon redemption. For purposes of computing the
CDSC payable upon the redemption of shares acquired in an exchange, the holding
period of the original shares is added to the holding period of the shares
acquired in the exchange.
The Transfer Agent makes exchanges at the next determined net asset
value after receiving an exchange request in good order (see "How to Redeem Fund
Shares"). Consult the Transfer Agent for additional information concerning the
exchange privilege. Applications and prospectuses of other funds are available
from Authorized Firms or the Principal Underwriter. The prospectus for each fund
describes its investment objectives and policies, and shareholders should obtain
a prospectus and consider these objectives and policies carefully before
requesting an exchange.
Shares of certain other funds for which Eaton Vance acts as investment
adviser or administrator may be exchanged for Fund shares on the basis of the
net asset value per share of each fund at the time of the exchange (plus, in the
case of an exchange made within six months of the date of purchase of shares
subject to an initial sales charge, an amount equal to the difference, if any,
between the sales charge previously paid on the shares being exchanged and the
sales charge payable on the shares being acquired). Any such exchange is subject
to any restrictions or qualifications set forth in the current prospectus of any
such fund.
Telephone exchanges are accepted by the Transfer Agent provided that the
investor has not disclaimed in writing the use of the privilege. To effect such
exchanges, call the Transfer Agent at 800-262-1122, Monday through Friday, 9:00
a.m. to 4:00 p.m. (Eastern Standard Time). Shares acquired by telephone exchange
must be registered in the same name(s) and with the same address as the shares
being exchanged. Neither the Fund, the Principal Underwriter nor the Transfer
-17-
<PAGE>
Agent will be responsible for the authenticity of exchange instructions
received by telephone; provided that reasonable procedures to confirm that
instructions communicated are genuine have been followed. Telephone instructions
will be tape recorded. In times of drastic economic or market changes, a
telephone exchange may be difficult to implement. An exchange may result in a
taxable gain or loss.
EATON VANCE SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
THE FUND OFFERS THE FOLLOWING SERVICES, WHICH ARE VOLUNTARY, INVOLVE NO EXTRA
CHARGE, AND MAY BE CHANGED OR DISCONTINUED WITHOUT PENALTY AT ANY TIME. Full
information on each of the services described below and an application, where
required, are available from Authorized Firms or the Principal Underwriter. The
cost of administering such services for the benefit of shareholders who
participate in them is borne by the Fund as an expense to all shareholders.
INVEST-BY-MAIL -- FOR PERIODIC SHARE ACCUMULATION: Once the $1,000 minimum
investment has been made, checks of $50 or more payable to the order of EV
Traditional Emerging Growth Fund may be mailed directly to the Transfer Agent,
First Data Investor Services Group, P.O. Box 5123, Westborough, MA 01581-5123 at
any time -- whether or not distributions are reinvested. The name of the
shareholder, the Fund and the account number should accompany each investment.
BANK AUTOMATED INVESTING -- FOR REGULAR SHARE ACCUMULATION: Cash investments of
$50 or more may be made automatically each month or quarter from the
shareholder's bank account. The $1,000 minimum initial investment and small
account redemption policy are waived for these accounts.
STATEMENT OF INTENTION: Purchases of $100,000 or more made over a 13-month
period are eligible for reduced sales charges. See "How to Buy Fund Shares --
Statement of Intention and Escrow Agreement."
RIGHT OF ACCUMULATION: Purchases may qualify for reduced sales charges when the
current market value of holdings (shares at current offering price), plus new
purchases, reaches $100,000 or more. Shares of the Eaton Vance funds listed
under "The Eaton Vance Exchange Privilege" may be combined under the Statement
of Intention and Right of Accumulation.
WITHDRAWAL PLAN: A shareholder may draw on shareholdings systematically with
monthly or quarterly checks in an amount specified by the shareholder. A minimum
deposit of $5,000 in shares is required. The maintenance of a withdrawal plan
concurrently with purchases of additional shares would be disadvantageous
because of the sales charge included in such purchases.
REINVESTMENT PRIVILEGE: A shareholder who has redeemed shares may reinvest at
net asset value any portion or all of the redemption proceeds (plus that amount
necessary to acquire a fractional share to round off the purchase to the nearest
full share) in shares of the Fund, or, provided that the shares redeemed have
been held for at least 60 days, in shares of any of the other funds offered by
the Principal Underwriter subject to an initial sales charge, provided that the
reinvestment is effected within 60 days after such redemption, and the privilege
has not been used more than once in the prior 12 months. Shares are sold to a
reinvesting shareholder at the next determined net asset value following timely
receipt of a written purchase order by the Principal Underwriter or by the fund
the shares of which are being purchased (or by such fund's transfer agent). The
privilege is also available to shareholders of the funds listed under "The Eaton
-18-
<PAGE>
Vance Exchange Privilege" who wish to reinvest such redemption proceeds in
shares of the Fund. If a shareholder reinvests redemption proceeds within the
60-day period, the shareholder's account will be credited with the amount of any
CDSC paid on such redeemed shares. To the extent that any shares of the Fund are
sold at a loss and the proceeds are reinvested in shares of the Fund (or other
shares of the Fund are acquired) within the period beginning 30 days before and
ending 30 days after the date of the redemption, some or all of the loss
generally will not be allowed as a tax deduction. Shareholders should consult
their tax advisers concerning the tax consequences of reinvestments.
TAX-SHELTERED RETIREMENT PLANS: Shares of the Fund are available for purchase in
connection with certain tax-sheltered retirement plans. Detailed information
concerning these plans, including certain exceptions to minimum investment
requirements, and copies of the plans are available from the Principal
Underwriter. This information should be read carefully and consultation with an
attorney or tax adviser may be advisable. The information sets forth the service
fee charged for retirement plans and describes the federal income tax
consequences of establishing a plan. Participant accounting services (including
trust fund reconciliation services) will be offered only through third party
record-keepers and not by the Principal Underwriter. Under all plans,
distributions will be automatically reinvested in additional shares.
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
DISTRIBUTIONS. The Fund makes distributions of any net investment income at
least annually (usually in December) and any net realized capital gains
(including net short-term capital gains) at least annually. Distributions from
capital gains are made after applying any available capital loss carryovers.
Shareholders may reinvest all distributions in shares of the Fund without a
sales charge at the net asset value per share as of the close of business on the
record date for the distribution.
The Fund's net investment income consists of all income accrued on the
Fund's assets, less all actual and accrued expenses of the Fund determined in
accordance with generally accepted accounting principles. The Fund's net
realized capital gains, if any, consist of the net realized capital gains (if
any) allocated to the Fund for tax purposes, after taking into account any
available capital loss carryovers.
TAXES. Distributions by the Fund which are derived from net investment income,
net short-term capital gains and certain foreign exchange gains are taxable to
shareholders as ordinary income, whether received in cash or reinvested in
additional shares of the Fund. Distributions by the Fund of long-term capital
gains are taxable to shareholders as long-term capital gains, whether paid in
cash or reinvested in additional shares of the Fund and regardless of the length
of time Fund shares have been owned by the shareholder.
If shares are purchased shortly before the record date of a
distribution, the shareholder will pay the full price for the shares and then
receive some portion of the price back as a taxable distribution. The amount,
timing and character of the Fund's distributions to shareholders may be affected
by special tax rules governing its activities in options, futures and forward
foreign currency exchange transactions or certain other investments. Certain
distributions, if declared by the Fund in October, November or December and paid
the following January, will be taxable to shareholders as if received on
December 31 of the year in which they are declared.
-19-
<PAGE>
Sales charges paid upon a purchase of Fund shares cannot be taken into
account for purposes of determining gain or loss on a redemption or exchange of
the shares before the 91st day after their purchase to the extent a sales charge
is reduced or eliminated in a subsequent acquisition of shares of the Fund or of
another fund pursuant to the Fund's reinvestment or exchange privilege. Any
disregarded or disallowed amounts will result in an adjustment to the
shareholder's tax basis in some or all of any other shares acquired.
The Fund intends to qualify as a regulated investment company under the
Code and to satisfy all requirements necessary to avoid paying federal income
taxes on the part of its investment company taxable income (consisting generally
of taxable net investment income and net short-term capital gains) and net
capital gain it distributes to shareholders.
As a regulated investment company under the Code, the Fund does not pay
federal income or excise taxes to the extent that it distributes to shareholders
substantially all of its ordinary income and capital gain net income in
accordance with the timing requirements imposed by the Code.
The Fund will provide its shareholders annually with tax information
notices and Forms 1099 to assist in the preparation of their federal and state
tax returns for the prior calendar year's distributions, proceeds from the
redemption or exchange of Fund shares, and federal income tax (if any) withheld
by the Transfer Agent.
Shareholders should consult with their tax advisers concerning the
applicability of state, local or other taxes to an investment in the Fund.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
FROM TIME TO TIME, THE FUND'S AVERAGE ANNUAL TOTAL RETURN MAY BE ADVERTISED. The
Fund's average annual total return is determined by computing the average annual
percentage change in value of $1,000 invested at the maximum public offering
price (which includes the maximum sales charge) for specified periods, assuming
reinvestment of all distributions. The Fund may also publish annual and
cumulative total return figures from time to time. The Fund may use such total
return figures, together with comparisons with the Consumer Price Index, various
domestic and foreign securities indices and performance studies prepared by
independent organizations, in advertisements and in information furnished to
present or prospective shareholders.
The Fund may also furnish total return calculations based on
investments at various sales charge levels or at net asset value. Any
performance data which is based on the Fund's net asset value per share would be
lower if a sales charge were taken into account. The Fund's performance may be
compared in publications to the performance of various indices and investments
for which reliable data is available, and to averages, performance rankings, or
other information prepared by recognized mutual fund statistical services.
-20-
<PAGE>
Investors should note that the investment results of the Fund will
fluctuate over time, and any presentation of the Fund's total return for any
prior period should not be considered a representation of what an investment may
earn or what the Fund's total return may be in any future period. The Fund's
investment results are based on many factors, including market conditions, the
composition of the security holdings of the Fund and the operating expenses of
the Fund. Investment results also often reflect the risks associated with the
particular investment objective and policies of the Fund. Among others, these
factors should be considered when comparing the Fund's investment results to
those of other mutual funds and other investment vehicles. If the expenses
related to the operation of the Fund are allocated to Eaton Vance or Eaton Vance
waives its fees, the Fund's performance will be higher.
-21-
<PAGE>
INVESTMENT ADVISER AND
ADMINISTRATOR
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110 EV TRADITIONAL EMERGING
(800) 225-6265 GROWTH FUND
CUSTODIAN
Investors Bank & Trust Company
200 Clarendon Street
Boston, MA 02116
TRANSFER AGENT
First Data Investor Services Group
P.O. Box 5123
Westborough, MA 01581-5123
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
PROSPECTUS
AUGUST 1, 1997
EV TRADITIONAL EMERGING GROWTH FUND
24 FEDERAL STREET
BOSTON, MA 02110
T-EGP
<PAGE>
PART B
INFORMATION REQUIRED IN A
STATEMENT OF ADDITIONAL INFORMATION
STATEMENT OF
ADDITIONAL
INFORMATION
August 1, 1997
EV TRADITIONAL EMERGING GROWTH FUND
24 Federal Street
Boston, Massachusetts 02110
(800) 225-6265
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Additional Information about Investment Policies...............................2
Investment Restrictions........................................................4
Trustees and Officers..........................................................5
Control Persons and Principal Holders of Securities............................8
Investment Adviser and Administrator...........................................8
Custodian.....................................................................11
Services for Accumulation.....................................................11
Service for Withdrawal........................................................12
Determination of Net Asset Value..............................................12
Investment Performance........................................................13
Taxes.........................................................................15
Principal Underwriter.........................................................17
Service Plan..................................................................18
Portfolio Security Transactions...............................................18
Other Information.............................................................21
Independent Accountants.......................................................22
Financial Statements..........................................................23
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY THE FUND'S PROSPECTUS DATED AUGUST 1, 1997, AS SUPPLEMENTED FROM
TIME TO TIME, WHICH IS INCORPORATED HEREIN BY REFERENCE. THIS STATEMENT OF
ADDITIONAL INFORMATION SHOULD BE READ IN CONJUNCTION WITH SUCH PROSPECTUS, A
COPY OF WHICH MAY BE OBTAINED WITHOUT CHARGE BY CONTACTING EATON VANCE
DISTRIBUTORS, INC. (THE "PRINCIPAL UNDERWRITER") (SEE BACK COVER FOR ADDRESS AND
PHONE NUMBER).
<PAGE>
ADDITIONAL INFORMATION ABOUT INVESTMENT POLICIES
Capitalized terms used in this Statement of Additional Information ("SAI")
and not otherwise defined have the meanings given to them in the Fund's
Prospectus.
FOREIGN SECURITIES. Investing in securities issued by companies whose principal
business activities are outside the United States may involve significant risks
not present in domestic investments. For example, there is generally less
publicly available information about foreign companies, particularly those not
subject to the disclosure and reporting requirements of the U.S. securities
laws. Foreign issuers are generally not bound by uniform accounting, auditing,
and financial reporting requirements and standards of practice comparable to
those applicable to domestic issuers. Investments in foreign securities also
involve the risk of possible adverse changes in investment or exchange control
regulations, expropriation or confiscatory taxation, limitation on the removal
of funds or other assets of the Fund, political or financial instability or
diplomatic and other developments which could affect such investments. Further,
economies of particular countries or areas of the world may differ favorably or
unfavorably from the economy of the United States. It is anticipated that in
most cases the best available market for foreign securities will be on exchanges
or in over-the-counter markets located outside of the United States. Foreign
stock markets, while growing in volume and sophistication, are generally not as
developed as those in the United States, and securities of some foreign issuers
(particularly those located in developing countries) may be less liquid and more
volatile than securities of comparable U.S. companies. In addition, foreign
brokerage commissions are generally higher than commissions on securities traded
in the United States and may be non-negotiable. In general, there is less
overall governmental supervision and regulation of foreign securities markets,
broker-dealers, and issuers than in the United States. Settlement practices are
less developed and entail the risk of loss.
FOREIGN CURRENCY TRANSACTIONS. The value of foreign assets of the Fund as
measured in U.S. dollars may be affected favorably or unfavorably by changes in
foreign currency exchange rates and exchange control regulations. Currency
exchange rates can also be affected unpredictably by intervention by U.S. or
foreign governments or central banks, or the failure to intervene, or by
currency controls or political developments in the U.S. or abroad. The Fund may
conduct its foreign currency exchange transactions on a spot (i.e., cash) basis
at the spot rate prevailing in the foreign currency exchange market or through
entering into swaps, forward contracts, options or futures on currency. On spot
transactions, foreign exchange dealers do not charge a fee for conversion, but
they do realize a profit based on the difference (the "spread") between the
prices at which they are buying and selling various currencies. Thus, a dealer
may offer to sell a foreign currency to the Fund at one rate, while offering a
lesser rate of exchange should the Fund desire to resell that currency to the
dealer.
RISKS ASSOCIATED WITH DERIVATIVE INSTRUMENTS. Entering into a derivative
instrument involves a risk that the applicable market will move against the
Fund's position and that the Fund will incur a loss. For derivative instruments
other than purchased options, this loss may exceed the amount of the initial
investment made or the premium received by the Fund. Derivative instruments may
sometimes increase or leverage the Fund's exposure to a particular market risk.
Leverage enhances the Fund's exposure to the price volatility of derivative
instruments it holds. The Fund's success in using derivative instruments to
hedge portfolio assets depends on the degree of price correlation between the
derivative instruments and the hedged asset. Imperfect correlation may be caused
by several factors, including temporary price disparities among the trading
markets for the derivative instrument, the assets underlying the derivative
instrument and the Fund assets. Over-the-counter ("OTC") derivative instruments
involve an enhanced risk that the issuer or counterparty will fail to perform
-2-
<PAGE>
its contractual obligations. Some derivative instruments are not readily
marketable or may become illiquid under adverse market conditions. In addition,
during periods of market volatility, a commodity exchange may suspend or limit
trading in an exchange-traded derivative instrument, which may make the contract
temporarily illiquid and difficult to price. Commodity exchanges may also
establish daily limits on the amount that the price of a futures contract or
futures option can vary from the previous day's settlement price. Once the daily
limit is reached, no trades may be made that day at a price beyond the limit.
This may prevent the Fund from closing out positions and limiting its losses.
Certain OTC options, and assets used as cover for written OTC options, are
subject to the Fund's 15% limit on illiquid investments. The Fund's ability to
terminate OTC derivative instruments may depend on the cooperation of the
counterparties to such contracts. The Fund expects to purchase and write only
exchange-traded options until such time as the Fund's management determines that
the OTC options market is sufficiently developed and the Fund has amended its
prospectus so that appropriate disclosure is furnished to prospective and
existing shareholders. For thinly traded derivative instruments, the only source
of price quotations may be the selling dealer or counterparty. In addition,
certain provisions of the Code, limit the extent to which the Fund may purchase
and sell derivative instruments. The Fund will engage in transactions in futures
contracts and related options only to the extent such transactions are
consistent with the requirements of the Code for maintaining the qualification
of the Fund as a regulated investment company for federal income tax purposes.
See "Taxes".
ASSET COVERAGE FOR DERIVATIVE INSTRUMENTS. Transactions using forward contracts,
swaps, futures contracts and options (other than options that the Fund has
purchased) expose the Fund to an obligation to another party. The Fund will not
enter into any such transactions unless it owns either (1) an offsetting
("covered") position in securities, currencies, swaps or other options or
futures contracts or forward contracts, or (2) cash and liquid securities (such
as readily marketable common stock and money market instruments) with a value
sufficient at all times to cover its potential obligations not covered as
provided in (1) above. (Only the net obligation of a swap will be covered.)
Assets used as cover or held in a segregated account maintained by the Fund's
custodian cannot be sold while the position in the corresponding instrument is
open, unless they are replaced with other appropriate assets. As a result, the
commitment of a large portion of the Fund's assets to cover or segregated
accounts could impede portfolio management or the Fund's ability to meet
redemption requests or other current obligations.
LIMITATIONS ON FUTURES CONTRACTS AND OPTIONS. The Fund may enter into futures
contracts, and options on futures contracts, traded on an exchange regulated by
the CFTC and on foreign exchanges, but, with respect to foreign exchange-traded
futures contracts and options on such futures contracts, only if the Investment
Adviser determines that trading on each such foreign exchange does not subject
the Fund to risks, including credit and liquidity risks, that are materially
greater than the risks associated with trading on CFTC-regulated exchanges.
In order to hedge its current or anticipated portfolio positions, the Fund
may use futures contracts on securities held in its portfolio or on securities
with characteristics similar to those of the securities held by the Fund. If, in
the opinion of the Investment Adviser, there is a sufficient degree of
correlation between price trends for the securities held by the Fund and futures
contracts based on other financial instruments, securities indices or other
indices, the Fund may also enter into such futures contracts as part of its
hedging strategy.
-3-
<PAGE>
LENDING PORTFOLIO SECURITIES. The Fund may seek to increase its income by
lending portfolio securities. Under present regulatory policies, including those
of the Board of Governors of the Federal Reserve System and the Commission, such
loans may be made to member firms of the Exchange, and would be required to be
secured continuously by collateral in cash or cash equivalents maintained on a
current basis at an amount at least equal to the market value of the securities
loaned. The Fund would have the right to call a loan and obtain the securities
loaned at any time on five days' notice. During the existence of a loan, the
Fund would continue to receive the equivalent of the interest or dividends paid
by the issuer on the securities loaned and would also receive the interest on
investment of the collateral. The Fund would not, however, have the right to
vote any securities having voting rights during the existence of the loan, but
would call the loan in anticipation of an important vote to be taken among
holders of the securities or of the giving or withholding of their consent on a
material matter affecting the investment. As with other extensions of credit
there are risks of delay in recovery or even loss of rights in the collateral
should the borrower of the securities fail financially. However, the loans would
be made only to firms deemed by the Investment Adviser to be of good standing,
and when, in its judgment, the consideration which can be earned currently from
securities loans of this type justifies the attendant risk. Securities lending
involves administration expenses, including finders' fees. If the Investment
Adviser determines to make securities loans, it is not intended that the value
of the securities loaned would exceed 30% of the Fund's total assets.
INVESTMENT RESTRICTIONS
The following investment restrictions of the Fund are designated as
fundamental policies and as such cannot be changed without the approval of the
holders of a majority of the Fund's outstanding voting securities, which as used
in this SAI means the lesser of (a) 67% of the shares of the Fund, present or
represented by proxy at a meeting if the holders of more than 50% of the shares
are present or represented at the meeting or (b) more than 50% of the shares of
the Fund. Accordingly, the Fund may not:
(1) With respect to 75% of its total assets, invest more than 5% of its
total assets (taken at current value) in the securities of any one issuer, or in
more than 10% of the outstanding voting securities of any one issuer, except
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities and except securities of other investment companies;
(2) Borrow money or issue senior securities except as permitted by the
Investment Company Act of 1940;
(3) Purchase any securities on margin, (but the Fund may obtain such
short-term credits as may be necessary for the clearance of purchases and sales
of securities);
(4) Underwrite securities of other issuers;
(5) Invest more than 25% of its assets in any particular industry, but, if
deemed appropriate for the Fund's objective, up to 25% of the value of its
assets may be invested in securities of companies in any one industry (although
more than 25% may be invested in securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities);
(6) Invest in real estate (although it may purchase and sell securities
which are secured by real estate and securities of companies which invest or
deal in real estate);
-4-
<PAGE>
(7) Invest in commodities or commodity contracts for the purchase or sale
of physical commodities; or
(8) Make loans to any person except by (a) the acquisition of debt
securities and making portfolio investments, (b) entering into repurchase
agreements and (c) lending portfolio securities.
Notwithstanding the investment policies and restrictions of the Fund, the
Fund may invest its investable assets in an open-end management investment
company with substantially the same investment objective, policies and
restrictions as the Fund.
The Fund has adopted the following investment policies which may be changed
without shareholder approval. As a matter of nonfundamental policy, the Fund
will not: (a) invest more than 15% of net assets in investments which are not
readily marketable, including restricted securities and repurchase agreements
with a maturity longer than seven days. Restricted securities for the purposes
of this limitation do not include securities eligible for resale pursuant to
Rule 144A under the Securities Act of 1933 and commercial paper issued pursuant
to Section 4(2) of said Act that the Board of Trustees of the Trust, or its
delegate, determines to be liquid; or (b) sell or contract to sell a security
which it does not own unless by virtue of its ownership of other securities it
has at the time of sale a right to obtain securities equivalent in kind and
amount to the securities sold and provided that if such right is conditional the
sale is made upon the same conditions.
Whenever an investment policy or investment restriction set forth in the
Prospectus or this SAI states a maximum percentage of assets that may be
invested in any security or other asset, such percentage limitation shall be
determined immediately after and as a result of the Fund's acquisition of such
security or asset. Accordingly, any later increase or decrease resulting from a
change in values, assets or other circumstances, will not compel the Fund to
dispose of such security or other asset. Notwithstanding the foregoing, under
normal market conditions the Fund must take actions necessary to comply with the
policy of investing at least 65% of total assets in equity securities of
emerging growth companies. Moreover, the Fund must always be in compliance with
the borrowing policies set forth above.
TRUSTEES AND OFFICERS
The Trustees and officers of the Trust are listed below. Except as
indicated, each individual has held the office shown or other offices in the
same company for the last five years. Unless otherwise noted, the business
address of each Trustee and officer is 24 Federal Street, Boston, Massachusetts
02110, which is also the address of the Investment Adviser, Eaton Vance; Eaton
Vance's wholly-owned subsidiary, Boston Management and Research ("BMR"); Eaton
Vance's parent, Eaton Vance Corp. ("EVC"); and of Eaton Vance's and BMR's
trustee, Eaton Vance, Inc. ("EV"). Eaton Vance and EV are both wholly-owned
subsidiaries of EVC. Those Trustees who are "interested persons" of the Trust,
as defined in the 1940 Act by virtue of their affiliation with Eaton Vance, BMR,
EVC or EV, are indicated by an asterisk(*).
JAMES B. HAWKES (55), President and Trustee*
President and Chief Executive Officer of Eaton Vance, BMR, EVC and EV, and a
Director of EVC and EV. Director or Trustee and officer of various investment
companies managed by Eaton Vance or BMR.
-5-
<PAGE>
M. DOZIER GARDNER (64), Trustee*
Vice Chairman of BMR, Eaton Vance, EVC and EV, and a Director of EVC and EV.
Director or Trustee and officer of various investment companies managed by Eaton
Vance or BMR.
DONALD R. DWIGHT (66), Trustee
President of Dwight Partners, Inc. (a relations and communications
company); Chairman of the Board of Newspapers of New England, Inc. Director or
Trustee of various investment companies managed by Eaton Vance or BMR.
Address: Clover Mill Lane, Lyme, New Hampshire 03768
SAMUEL L. HAYES, III (62), Trustee
Jacob H. Schiff Professor of Investment Banking, Harvard University
Graduate School of Business Administration. Director or Trustee of various
investment companies managed by Eaton Vance or BMR.
Address: Harvard University Graduate School of Business Administration,
Soldiers Field Road, Boston, Massachusetts 02163
NORTON H. REAMER (61), Trustee
President and Director, United Asset Management Corporation (a holding
company owning institutional investment management firms); Chairman, President
and Director, UAM Funds (mutual funds). Director or Trustee of various
investment companies managed by Eaton Vance or BMR.
Address: One International Place, Boston, Massachusetts 02110
JOHN L. THORNDIKE (70), Trustee
Former Director of Fiduciary Company Incorporated. Director or Trustee of
various investment companies managed by Eaton Vance or BMR.
Address: 175 Federal Street, Boston, Massachusetts 02110
JACK L. TREYNOR (67), Trustee
Investment Adviser and Consultant. Director or Trustee of various
investment companies managed by Eaton Vance or BMR.
Address: 504 Via Almar, Palos Verdes Estates, California 90274
EDWARD E. SMILEY, JR. (52), Vice President
Vice President of Eaton Vance and BMR since November 1, 1996; Senior Product
Manager, Equity Management for TradeStreet Investment Associates, Inc., a
wholly-owned subsidiary of Nations Bank (1992-1996). Mr. Smiley was elected Vice
President of the Trust on October 18, 1996.
JAMES L. O'CONNOR (52), Treasurer
Vice President of Eaton Vance, BMR and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
ALAN R. DYNNER (56), Secretary
Vice President and Chief Legal Officer of Eaton Vance, BMR, EVC and EV since
November 1, 1996. Previously, he was a Partner of the law firm of Kirkpatrick &
Lockhart LLP, New York and Washington, D.C., and was Executive Vice President of
Neuberger & Berman Management, Inc., a mutual fund management company. Officer
of various investment companies managed by Eaton Vance or BMR. Mr. Dynner was
elected Secretary of the Trust on June 23, 1997.
JANET E. SANDERS (61), Assistant Treasurer and Assistant Secretary
Vice President of Eaton Vance, BMR and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
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<PAGE>
A. JOHN MURPHY (34), Assistant Secretary
Assistant Vice President of BMR, Eaton Vance and EV since March 1, 1994;
employee of Eaton Vance since March 1993. State Regulations Supervisor, The
Boston Company (1991-1993). Officer of various investment companies managed by
Eaton Vance or BMR. Mr. Murphy was elected Assistant Secretary of the Trust on
March 27, 1995.
ERIC G. WOODBURY (40), Assistant Secretary
Vice President of BMR, Eaton Vance and EV since February 1993; formerly,
associate attorney at Dechert, Price & Rhoads. Mr. Woodbury was elected
Assistant Secretary of the Trust on June 19, 1995.
Messrs. Hayes (Chairman), Reamer and Thorndike are members of the Special
Committee of the Board of Trustees of the Trust. The purpose of the Special
Committee is to consider, evaluate and make recommendations to the full Board of
Trustees concerning (i) all contractual arrangements with service providers to
the Fund, including administrative, transfer agency, custodial and fund
accounting and distribution services, and (ii) all other matters in which Eaton
Vance or its affiliates has any actual or potential conflict of interest with
the Fund or its shareholders.
The Nominating Committee of the Board of Trustees of the Trust is comprised
of four Trustees who are not "interested persons" as that term is defined under
the 1940 Act ("noninterested Trustees"). The Committee has four-year staggered
terms, with one member rotating off the Committee to be replaced by another
noninterested Trustee. The purpose of the Committee is to recommend to the Board
nominees for the position of noninterested Trustee and to assure that at least a
majority of the Board of Trustees is independent of Eaton Vance and its
affiliates.
Messrs. Treynor (Chairman) and Dwight are members of the Audit Committee of
the Board of Trustees of the Trust. The Audit Committee's functions include
making recommendations to the Board of Trustees regarding the selection of the
independent accountants, and reviewing matters relative to trading and brokerage
policies and practices, accounting and auditing practices and procedures,
accounting records, internal accounting controls, and the functions performed by
the custodian, transfer agent and dividend disbursing agent of the Trust.
The fees and expenses of the noninterested Trustees of the Trust are paid
by the Fund (and the other series of the Trust). (The Trustees of the Trust who
are members of the Eaton Vance organization receive no compensation from the
Fund.) For the fiscal year ending December 31, 1997, it is estimated that the
noninterested Trustees of the Trust will receive the following compensation in
their capacities as Trustees from the Fund and, for the year ended June 30,
1997, earned the following compensation in their capacities as Trustees of the
funds in the Eaton Vance fund complex(1):
-7-
<PAGE>
<TABLE>
ESTIMATED
AGGREGATE TOTAL COMPENSATION
COMPENSATION FROM TRUST AND
NAME FROM FUND FUND COMPLEX
- ---- --------- ------------
<S> <C> <C>
Donald R. Dwight....................................................... $35 $145,000(2)
Samuel L. Hayes, III................................................... 35 155,000(3)
Norton H. Reamer....................................................... 35 145,000
John L. Thorndike...................................................... 35 147,500(4)
Jack L. Treynor........................................................ 35 150,000
</TABLE>
- ----------------------------
(1) The Eaton Vance fund complex consists of 215 registered investment companies
or series thereof.
(2) Includes $45,000 of deferred compensation.
(3) Includes $28,750 of deferred compensation.
(4) Includes $82,384 of deferred compensation.
Trustees of the Trust who 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 a Trustees Deferred Compensation Plan (the "Trustees' Plan").
Under the Trustees' Plan, an eligible Trustee may elect to have his deferred
fees invested by the Fund in the shares of one or more funds in the Eaton Vance
Family of Funds, and the amount paid to the Trustees under the Trustees' Plan
will be determined based upon the performance of such investments. Deferral of
Trustees' fees in accordance with the Trustees' Plan will have a negligible
effect on the Fund's assets, liabilities, and net income per share, and will not
obligate the Fund to retain the services of any Trustee or obligate the Fund to
pay any particular level of compensation to the Trustee. The Trust does not have
retirement plan for its Trustees.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As at June 30, 1997, the Trustees and officers of the Trust, as a group,
owned in the aggregate less than 1% of the outstanding shares of the Fund. As of
June 30, 1997, Eaton Vance Management, Boston, MA was the record owner of
approximately 83.8% of the outstanding shares and Brian Jacobs, Cohasset, MA
held of record and beneficially owned 6.4% of the outstanding shares of the
Fund. To the knowledge of the Trust, no other person owned of record or
beneficially 5% or more of the Fund's outstanding shares as of such date.
INVESTMENT ADVISER AND ADMINISTRATOR
The Trust on behalf of the Fund engages Eaton Vance as investment adviser
pursuant to an Investment Advisory Agreement dated December 31, 1996. Eaton
Vance or its affiliates acts as investment adviser to investment companies and
various individual and institutional clients with combined assets under
management of over $17 billion.
Eaton Vance, its affiliates and its predecessor companies have been
managing assets of individuals and institutions since 1924 and managing
investment companies since 1931. They maintain a large staff of experienced
fixed-income and equity investment professionals to service the needs of their
clients. The fixed-income division focuses on all kinds of taxable
investment-grade and high-yield securities, tax-exempt investment-grade and
high-yield securities, and U.S. Government securities. The equity division cover
stocks ranging from blue chip to emerging growth companies.
-8-
<PAGE>
Eaton Vance and its affiliates act as adviser to over 150 mutual funds, and
individual and various institutional accounts, including corporations,
hospitals, retirement plans, universities, foundations and trusts. Eaton Vance
mutual funds feature international equities, domestic equities, tax-free
municipal bonds and U.S. government and corporate bonds. Lloyd George Management
has advised Eaton Vance's international equity funds since 1992. Founded in
1991, Lloyd George is headquartered in Hong Kong with offices in London and
Mumbai, India. It has established itself as a leader in investment management in
Asian equities and other global markets. Lloyd George features an experienced
team of investment professionals that began working together in the mid-1980s.
Lloyd George analysts cover East Asia, the India subcontinent, Russia and
Eastern Europe, Latin America, Australia and New Zealand from offices in Hong
Kong, London and Mumbai. Together Eaton Vance and Lloyd George manage over $18
billion in assets. Eaton Vance mutual funds are distributed by the Principal
Underwriter both within the United States and offshore.
The Principal Underwriter believes that an investment professional can
provide valuable services to you to help you reach your investment goals.
Meeting investment goals requires time, objectivity and investment savvy. Before
making an investment recommendation, a representative can help you carefully
consider your short- and long-term financial goals, your tolerance for
investment risk, your investment time frame, and other investments you may
already own. Your professional investment representatives are knowledgeable
about financial markets, as well as the wide range of investment opportunities
available. A representative can provide you with tailored financial advice and
help you decide when to buy, sell or persevere with your investments.
Eaton Vance manages the investments and affairs of the Fund subject to the
supervision of the Trust's Board of Trustees. Eaton Vance furnishes to the Fund
investment research, advice and assistance, administrative services, office
space, equipment and clerical personnel, and investment advisory, statistical
and research facilities, and has arranged for certain members of the Eaton Vance
organization to serve without salary as officers or Trustees of the Trust. The
Fund is responsible for all expenses not expressly stated to be payable by Eaton
Vance under the Investment Advisory Agreement, including, without limitation,
the fees and expenses of its custodian and transfer agent, including those
incurred for determining the Fund's net asset value and keeping its books; the
cost of share certificates; membership dues in investment company organizations;
brokerage commissions and fees; fees and expenses of registering its shares;
expenses of reports to shareholders, proxy statements, and other expenses of
shareholders' meetings; insurance premiums; printing and mailing expenses;
interest, taxes and corporate fees; legal and accounting expenses; and
compensation and expenses of Trustees not affiliated with Eaton Vance. The Fund
will also bear expenses incurred in connection with litigation, proceedings and
claims and any legal obligation of the Trust to indemnify its officers and
Trustees with respect thereto, to the extent not covered by insurance.
The Fund pays Eaton Vance as compensation under the Investment Advisory
Agreement a monthly fee based on average daily net assets as follows:
<TABLE>
AVERAGE DAILY NET ANNUALIZED FEE RATE MONTHLY FEE RATE
ASSETS FOR THE MONTH (FOR EACH LEVEL) (FOR EACH LEVEL)
<S> <C> <C> <C>
Up to $500 million..................................................... 0.7500% 1/16 of 1%
$500 million but less than $1 billion.................................. 0.6875% 11/192 of 1%
$1 billion but less than $1.5 billion.................................. 0.6250% 5/96 of 1%
$1.5 billion but less than $2 billion.................................. 0.5625% 3/64 of 1%
$2 billion but less than $3 billion.................................... 0.5000% 1/24 of 1%
$3 billion and over.................................................... 0.4375% 7/192 of 1%
</TABLE>
-9-
<PAGE>
As of June 30, 1997, the Fund had net assets of $256,665. For the period
from the start of business, January 2, 1997, to June 30, 1997, absent a fee
reduction, the Fund would have paid Eaton Vance advisory fees of $783
(equivalent to 0.75% (annualized) of the Fund's average daily net assets for
such period). To enhance the net income of the Fund, Eaton Vance made a
reduction of the full amount of its advisory fee and Eaton Vance was allocated a
portion of expenses related to the operation of the Fund in the amount of
$2,724.
The Investment Advisory Agreement with Eaton Vance continues in effect from
year to year for so long as such continuance is approved at least annually (i)
by the vote of a majority of the noninterested Trustees of the Trust cast in
person at a meeting specifically called for the purpose of voting on such
approval and (ii) by the Board of Trustees of the Trust or by vote of a majority
of the outstanding voting securities of the Fund. The Agreement may be
terminated at any time without penalty on sixty (60) days' written notice by the
Board of Trustees of either party, or by vote of the majority of the outstanding
voting securities of the Fund, and the Agreement will terminate automatically in
the event of its assignment. The Agreement provides that Eaton Vance may render
services to others. The Agreement also provides that Eaton Vance shall not be
liable for any loss incurred in connection with the performance of its duties,
or action taken or omitted under that Agreement, in the absence of willful
misfeasance, bad faith, gross negligence in the performance of its duties or by
reason of its reckless disregard of its obligations and duties thereunder, or
for any losses sustained in the acquisition, holding or disposition of any
security or other investment.
As indicated in the Prospectus, Eaton Vance serves as Administrator of the
Fund, but currently receives no compensation for providing administrative
services to the Fund. Under its agreement with the Fund, Eaton Vance has been
engaged to administer the Fund's affairs, subject to the supervision of the
Trustees of the Trust, and shall furnish for the use of the Fund office space
and all necessary office facilities, equipment and personnel for administering
the affairs of the Fund.
Eaton Vance and EV are both wholly-owned subsidiaries of EVC. BMR is a
wholly-owned subsidiary of Eaton Vance. Eaton Vance and BMR are both
Massachusetts business trusts, and EV is the trustee of Eaton Vance and BMR. The
Directors of EV are Landon T. Clay, M. Dozier Gardner, James B. Hawkes and
Benjamin A. Rowland, Jr. The Directors of EVC consist of the same persons and
John G.L. Cabot and Ralph Z. Sorenson. Mr. Clay is chairman, Mr. Gardner is vice
chairman and Mr. Hawkes is president and chief executive officer of EVC, Eaton
Vance, BMR and EV. All of the issued and outstanding shares of Eaton Vance and
of EV are owned by EVC. All of the issued and outstanding shares of BMR are
owned by Eaton Vance. All shares of the outstanding Voting Common Stock of EVC
are deposited in a Voting Trust which expires December 31, 1997, the Voting
Trustees of which are Messrs. Clay, Gardner, Hawkes and Rowland and Thomas E.
Faust, Jr. The Voting Trustees have unrestricted voting rights for the election
of Directors of EVC. All of the outstanding voting trust receipts issued under
said Voting Trust are owned by certain of the officers of Eaton Vance and BMR
who are also officers or officers and Directors of EVC and EV. As of July 31,
1997, Messrs. Clay, Gardner and Hawkes each owned 24% of such voting trust
receipts and Messrs. Rowland and Faust owned 15% and 13%, respectively, of such
voting trust receipts. Messrs. Dynner, Gardner and Hawkes, who are officers or
Trustees of the Trust, are members of the EVC, Eaton Vance, BMR and EV
organizations. Messrs. Murphy, O'Connor, Smiley and Woodbury, and Ms. Sanders
are officers of the Trust and are also members of the Eaton Vance, BMR and EV
organizations.
-10-
<PAGE>
Eaton Vance owns all the stock of Northeast Properties, Inc., which is
engaged in real estate investment. EVC also owns 22% of the Class A shares of
Lloyd George Management (B.V.I.) Limited, a registered investment adviser. EVC
owns all of the stock of Fulcrum Management, Inc. and MinVen, Inc., which are
engaged in precious metal mining venture investment and management. EVC, Eaton
Vance, BMR and EV may also enter into other businesses.
EVC and its affiliates and their officers and employees from time to time
have transactions with various banks, including the custodian of the Fund, IBT.
It is Eaton Vance's opinion that the terms and conditions of such transactions
will not be influenced by existing or potential custodial or other relationships
between the Trust and such banks.
CUSTODIAN
IBT acts as custodian for the Fund. IBT has the custody of all cash and
securities of the Fund, maintains the Fund's general ledger and computes the
daily net asset value of shares of the Fund. In such capacity it attends to
details in connection with the sale, exchange, substitution, transfer or other
dealings with the Fund's investments, receives and disburses all funds and
performs various other ministerial duties upon receipt of proper instruction
from the Fund. IBT charges fees which are competitive within the industry. A
portion of the fee relates to custody, bookkeeping and valuation services and is
based upon a percentage of Fund net assets and a portion of the fee relates to
activity charges, primarily the number of portfolio transactions. These fees are
then reduced by a credit for cash balances of the particular investment company
at the custodian equal to 75% of the 91-day, U.S. Treasury Bill auction rate
applied to the particular investment company's average daily collected balances
for the week. Landon T. Clay, a Director of EVC and an officer, Trustee or
Director of other entities in the Eaton Vance organization, owns approximately
13% of the voting stock of Investors Financial Services Corp., the holding
company parent of IBT. Management believes that such ownership does not create
an affiliated person relationship between the Fund and IBT. IBT also provides
services in connection with the preparation of shareholder reports and the
electronic filing of such reports with the Commission, for which it receives a
separate fee.
SERVICES FOR ACCUMULATION
The following services are voluntary, involve no extra charge, other than
the sales charge included in the offering price, and may be changed or
discontinued without penalty at any time.
Intended Quantity Investment - Statement of Intention. If it is anticipated
that $100,000 or more of Fund shares and shares of the other continuously
offered open-end funds listed under "The Eaton Vance Exchange Privilege" in the
Prospectus will be purchased within a 13-month period, a Statement of Intention
should be signed so that shares may be obtained at the same reduced sales charge
as though the total quantity were invested in one lump sum. Shares held under
the Right of Accumulation (see below) as of the date of the Statement will be
included toward the completion of the Statement. The Statement authorizes the
Transfer Agent to hold in escrow sufficient shares (5% of the dollar amount
specified in the Statement) which can be redeemed to make up any difference in
sales charge on the amount intended to be invested and the amount actually
invested. Execution of a Statement does not obligate the shareholder to
-11-
<PAGE>
purchase or the Fund to sell the full amount indicated in the Statement, and
should the amount actually purchased during the 13-month period be more or less
than that indicated on the Statement, price adjustments will be made. For sales
charges and other information on quantity purchases, see "How to Buy Fund
Shares" in the Prospectus. Any investor considering signing a Statement of
Intention should read it carefully.
Right of Accumulation - Cumulative Quantity Discount. The applicable sales
charge level for the purchase of Fund shares is calculated by taking the dollar
amount of the current purchase and adding it to the value (calculated at the
maximum current offering price) of the shares the shareholder owns in his or her
account(s) in the Fund and in the other continuously offered open-end funds
listed under "The Eaton Vance Exchange Privilege" in the Prospectus for which
Eaton Vance acts as adviser or administrator at the time of purchase. The sales
charge on the shares being purchase will then be at the rate applicable to the
aggregate. For sales charges on quantity purchases, see "How to Buy Fund Shares"
in the Prospectus. Shares purchased (i) by an individual, his or her spouse and
their children under the age of twenty-one and (ii) by a trustee, guardian or
other fiduciary of a single trust estate or a single fiduciary account, will be
combined for the purpose of determining whether a purchase will qualify for the
Right of Accumulation and if qualifying, the applicable sales charge level.
For any such discount to be made available, at the time of purchase a
purchaser or his or her Authorized Firm must provide the Principal Underwriter
(in the case of a purchase made through an Authorized Firm) or the Transfer
Agent (in the case of an investment made by mail) with sufficient information to
permit verification that the purchase order qualifies for the accumulation
privilege. Confirmation of the order is subject to such verification. The Right
of Accumulation privilege may be amended or terminated at any time as to
purchases occurring thereafter.
SERVICE FOR WITHDRAWAL
The Transfer Agent will send to the shareholder regular monthly or
quarterly payments of any permitted amount designated by the shareholder (see
"Eaton Vance Shareholder Services - Withdrawal Plan" in the Fund's current
Prospectus) based upon the value of the shares held. The checks will be drawn
from share redemptions and hence, although they are a return of principal, may
require the recognition of taxable gain or loss. Income dividends and capital
gain distributions in connection with withdrawal plan accounts will be credited
at net asset value as of the record date for each distribution. Continued
withdrawals in excess of current income will eventually use up principal,
particularly in a period of declining market prices. A shareholder may not have
a withdrawal plan in effect at the same time he or she has authorized Bank
Automated Investing or is otherwise making regular purchases of Fund shares. The
shareholder, Transfer Agent or the Principal Underwriter will be able to
terminate the withdrawal plan at any time without penalty.
DETERMINATION OF NET ASSET VALUE
The Trustees of the Trust have established the following procedures for the
fair valuation of the Fund's assets under normal market conditions. 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 therefor 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 bid and asked prices on the principal
-12-
<PAGE>
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. All other securities
are valued at fair value as determined in good faith by or at the direction of
the Trustees. The Fund will be closed for business and will not price its shares
on the following business holidays: New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day.
Short term debt securities are valued at amortized cost, which approximates
value. 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.
Generally, trading in the foreign securities owned by the Fund is
substantially completed each day at various times prior to the close of the
Exchange. The values of these securities used in determining the net asset value
of the Fund's shares are computed as of such times. Occasionally, events
affecting the value of foreign securities may occur between such times and the
close of the Exchange which will not be reflected in the computation of the
Fund's net asset value (unless the Fund deems that such events would materially
affect its net asset value, in which case an adjustment would be made and
reflected in such computation). Foreign securities and currency held by the Fund
will be valued in U.S. dollars; such values will be computed by the custodian
based on foreign currency exchange rate quotations.
INVESTMENT PERFORMANCE
Average annual total return is determined by multiplying a hypothetical
initial purchase order of $1,000 by the average annual compound rate of return
(including capital appreciation/depreciation, and distributions paid and
reinvested) for the stated period and annualizing the result. The calculation
assumes the maximum initial sales charge is deducted from the initial $1,000
purchase order and that all distributions are reinvested at net asset value on
the reinvestment dates during the period.
The table below indicates the total return (capital changes plus
reinvestment of all distributions) on a hypothetical investment of $1,000 in the
Fund covering the life of the Fund from January 2, 1997 through June 30, 1997.
-13-
<PAGE>
<TABLE>
VALUE OF A $1,000 INVESTMENT
VALUE OF VALUE OF TOTAL RETURN EXCLUDING TOTAL RETURN INCLUDING
INVESTMENT INVESTMENT INITIAL INVESTMENT MAXIMUM SALES CHARGE MAXIMUM SALES CHARGE
PERIOD DATE INVESTMENT* ON 6/30/97 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
- ---------------- ------------- -------------- ------------- ------------------------------ --------------------------
<S> <C> <C> <C> <C> <C>
Life of Fund** 1/2/97 $942.51 $1,014.14 7.60% ---- 1.41% ----
</TABLE>
Past performance is not indicative of future results. Investment return and
principal value will fluctuate; shares, when redeemed, may be worth more or less
than their original cost.
- ----------------
* Initial investment less current maximum sales charge of 5.75%
** If a portion of the Fund's expenses had not been subsidized, the Fund would
have had lower returns.
The Fund's total return may be compared to relevant indices, such as the
Consumer Price Index and various domestic and foreign securities indices. The
Fund's total return and comparisons with these indices may be used in
advertisements and in information furnished to present or prospective
shareholders. The Fund's performance may differ from that of other investment
companies. In addition, evaluations of the Fund's performance or rankings of
mutual funds (which include the Fund) made by independent sources may be used in
advertisements and in information furnished to present or prospective
shareholders. Information, charts and illustrations showing the effect of
compounding interest or relating to inflation and taxes (including their effects
on the dollar and the return on stocks and other investment vehicles) may also
be included in advertisements and materials furnished to present and prospective
investors.
Information used in advertisements and in materials furnished to present or
prospective shareholders may include statistics, data and performance studies
prepared by independent organizations or included in various publications
reflecting the investment performance or return achieved by various classes and
types of investments (e.g. common stocks, small company stocks, long-term
corporate bonds, long-term government bonds, intermediate-term government bonds,
U.S. Treasury bills) over various periods of time. This information may be used
to illustrate the benefits of long-term investments in common stocks.
Information about the allocation and holdings of investments in the Fund's
portfolio may be included in advertisements and other material furnished to
present and prospective shareholders.
Information used in advertisements and materials furnished to present and
prospective investors may include statements or illustrations relating to the
appropriateness of certain types of securities and/or mutual funds to meet
specific financial goals. Such information may address:
--- cost associated with aging parents;
--- funding a college education (including its actual and estimated cost);
--- health care expenses (including actual and projected expenses);
--- long-term disabilities (including the availability of, and coverage
provided by, disability insurance); and
--- retirement (including the availability of social security benefits,
the tax treatment of such benefits and statistics and other information
relating to maintaining a particular standard of living and outliving
existing assets).
-14-
<PAGE>
Such information may also address different methods for saving money and
the results of such methods, as well as the benefits of investing in equity
securities. Such information may describe: the potential for growth; the
performance of equities as compared to other investment vehicles; and the value
of investing as early as possible and regularly, as well as staying invested.
The benefits of investing in equity securities by means of a mutual fund may
also be included (such benefits may include diversification, professional
management and the variety of equity mutual fund products).
The Fund may provide information about Eaton Vance, its affiliates and
other investment advisers to the funds in the Eaton Vance Family of Funds in
sales material or advertisements provided to investors or prospective investors.
Such material or advertisements may also provide information on the use of
investment professionals by such investors.
TAXES
Each series of the Trust, is treated as a separate entity for accounting
and tax purposes. The Fund has elected to be treated, and intends to qualify
each year as a regulated investment company ("RIC") under the Code. Accordingly,
the Fund intends to satisfy certain requirements relating to sources of its
income and diversification of its assets and to distribute substantially all of
its ordinary income and net income in accordance with the timing requirements
imposed by the Code, so as to maintain its RIC status and to avoid paying any
federal income or excise tax.
In order to avoid incurring a federal excise tax obligation, the Code
requires that the Fund distribute (or be deemed to have distributed) by December
31 of each calendar year at least 98% of its ordinary income (not including
tax-exempt income) for such year, at least 98% of its capital gain net income
(which is the excess of its realized capital gains over its realized capital
losses), generally computed on the basis of the one-year period ending on
October 31 of such year, after reduction by (i) any available capital loss
carryforwards and (ii) 100% of any income and capital gains from the prior year
(as previously computed) that was not paid out during such year and on which the
Fund was not taxed. Under current law, provided that the Fund qualifies as a
RIC, the Fund should not be liable for any income, excise or franchise tax in
the Commonwealth of Massachusetts.
Foreign exchange gains and losses realized by the Fund in connection with
the its investments in foreign securities and certain options, futures or
forward contracts or foreign currency may be treated as ordinary income and
losses under special tax rules. Certain options, futures or forward contracts of
the Fund may be required to be marked to market (i.e., treated as if closed out)
on the last day of each taxable year, and any gain or loss realized with respect
to these contracts may be required to be treated as 60% long-term and 40%
short-term gain or loss. Positions of the Fund in securities and offsetting
options, swaps, futures or forward contracts may be treated as "straddles" and
be subject to other special rules that may affect the amount, timing and
character of the Fund's distributions to shareholders. Certain uses of foreign
currency and foreign currency derivatives such as options, futures, forward
contracts and swaps and investment by the Fund in certain "passive foreign
investment companies" may be limited or a tax election may be made, if
available, in order to preserve the Fund's qualification as a RIC or avoid
imposition of a tax on the Fund.
-15-
<PAGE>
Distributions of the excess of net long-term capital gains over short-term
capital losses earned by the Fund, taking into account any capital loss
carryforwards that may be available to the Fund in years after its first taxable
year, are taxable to shareholders of the Fund as long-term capital gains,
whether received in cash or in additional shares and regardless of the length of
time their shares have been held. Certain distributions, if declared in October,
November or December and paid the following January, will be taxed to
shareholders as if received on December 31 of the year in which they are
declared.
Any loss realized upon the redemption or exchange of shares of the Fund
with a tax holding period of 6 months or less will be treated as a long-term
capital loss to the extent of any distribution of net long-term capital gains
with respect to such shares. In addition, a loss realized on a redemption of
Fund shares may be disallowed under certain "wash sale" rules if other Fund
shares are acquired (whether through reinvestment of dividends or otherwise)
within a period beginning 30 days before and ending 30 days after the date of
such redemption. Any disallowed loss will result in an adjustment to the
shareholder's tax basis in some or all of the other shares acquired.
Amounts paid by the Fund to individuals and certain other shareholders who
have not provided the Fund with their correct taxpayer identification number
("TIN") and certain certifications required by the Internal Revenue Service (the
"IRS"), as well as shareholders with respect to whom the Fund has received
certain information from the IRS or a broker, may be subject to "backup"
withholding of federal income tax arising from the Fund's taxable dividends and
other distributions as well as the proceeds of redemption transactions
(including repurchases and exchanges) at a rate of 31%. An individual's TIN is
generally his or her social security number.
Non-resident alien individuals, foreign corporations and certain other
foreign entities generally will be subject to a U.S. withholding tax at a rate
of 30% on the Fund's distributions from its ordinary income and the excess of
its net short-term capital gain over its net long-term capital loss, unless the
tax is reduced or eliminated by an applicable tax convention. Distributions from
the excess of the Fund's net long-term capital gain over its net short-term
capital loss received by such shareholders and any gain from the sale or other
disposition of shares of the Fund generally will not be subject to U.S. federal
income taxation, provided that non-resident alien status has been certified by
the shareholder. Different U.S. tax consequences may arise if: (i) the
shareholder is engaged in a trade or business in the United States; (ii) the
shareholder is present in the United States for a sufficient period of time
during a taxable year to be treated as a U.S. resident (generally 180 days or
more); or (iii) the shareholder fails to provide any required certifications
regarding its status as a non-resident alien investor. Foreign shareholders
should consult their tax advisers regarding the U.S. and foreign tax
consequences of an investment in the Fund.
The foregoing discussion does not describe many of the tax rules applicable
to IRAs nor does it address the special tax rules applicable to certain other
classes of investors, such as other retirement plans, tax-exempt entities,
insurance companies and financial institutions. Shareholders should consult
their own tax advisers with respect to these or other special tax rules that may
apply in their particular situations, as well as the state, local, and, where
applicable, foreign tax consequences of investing in the Fund.
-16-
<PAGE>
PRINCIPAL UNDERWRITER
Shares of the Fund may be continuously purchased at the public offering
price through Authorized Firms which have agreements with the Principal
Underwriter. The public offering price is the net asset value next computed
after receipt of the order, plus, where applicable, a variable percentage (sales
charge) depending upon the amount of purchase as indicated by the sales charge
table set forth in the Fund's current Prospectus (see "How to Buy Fund Shares").
Such table is applicable to purchases of the Fund alone or in combination with
purchases of certain other funds offered by the Principal Underwriter, made at a
single time by (i) an individual, or an individual, his or her spouse and their
children under the age of twenty-one, purchasing shares for his or her or their
own account; and (ii) a trustee or other fiduciary purchasing shares for a
single trust estate or a single fiduciary account.
The table is also presently applicable to (1) purchases of Fund shares,
alone or in combination with purchases of any of the other funds offered by the
Principal Underwriter through one dealer aggregating $100,000 or more made by
any of the persons enumerated above within a thirteen-month period starting with
the first purchase pursuant to a written Statement of Intention, in the form
provided by the Principal Underwriter, which includes provisions for a price
adjustment depending upon the amount actually purchased within such period (a
purchase not made pursuant to such Statement may be included thereunder if the
Statement if filed within 90 days of such purchase); or (2) purchases of the
Fund pursuant to the Right of Accumulation and declared as such at the time of
purchase.
Subject to the applicable provisions of the 1940 Act, the Fund may issue
shares at net asset value in the event that an investment company (whether a
regulated or private investment company or a personal holding company) is merged
or consolidated with or acquired by the Fund. Normally no sales charges will be
paid in connection with an exchange of Fund shares for the assets of such
investment company. Shares may also be sold at net asset value to any officer,
director, trustee, general partner or employee of the Fund or any investment
company for which Eaton Vance or its affiliates acts as investment adviser, any
investment advisory, agency, custodial or trust account managed or administered
by Eaton Vance or by any parent, subsidiary or other affiliate of Eaton Vance,
or any officer, director, trustee or employee of any parent, subsidiary or other
affiliate of Eaton Vance. The terms "officer," "director," "trustee," "general
partner" or "employee" as used in this paragraph include any such person's
spouse and minor children, and also retired officers, directors, trustees,
general partners and employees and their spouses and minor children. Shares of
the Fund may also be sold at net asset value to registered representatives and
employees of certain Authorized Firms and to such persons' spouses and children
under the age of 21 and their beneficial accounts.
The Trust reserves the right to suspend or limit the offering of shares of
the Fund to the public at any time.
The Principal Underwriter acts as principal in selling shares of the Fund
under the Distribution Agreement with the Trust on behalf of the Fund. The
expenses of printing copies of prospectuses used to offer shares to Authorized
Firms or investors and other selling literature and of advertising are borne by
the Principal Underwriter. The fees and expenses of qualifying and registering
and maintaining qualifications and registrations of the Fund and its shares
under federal and state securities laws are borne by the Fund. The Distribution
Agreement is renewable annually by the Trust's Board of Trustees (including a
majority of the noninterested Trustees), may be terminated on six months' notice
by either party, and is automatically terminated upon assignment. The Principal
Underwriter distributes Fund shares on a "best efforts" basis under which it is
required to take and pay for only such shares as may be sold. The Principal
Underwriter allows Authorized Firms discounts from the applicable public
-17-
<PAGE>
offering price which are alike for all Authorized Firms. The Principal
Underwriter may allow, upon notice to all Authorized Firms with whom it has
agreements, discounts up to the full sales charge during the periods specified
in the notice. During periods when the discount includes the full sales charge,
such Authorized Firms may be deemed to be underwriters as that term is defined
in the Securities Act of 1933. The total sales charges paid in connection with
sales of shares of the Fund for the period from the start of business, January
2, 1997, to June 30, 1997, was $32, of which $5 was received by the Principal
Underwriter and $27 was received by Authorized Firms.
The Fund has authorized the Principal Underwriter to act as its agent in
repurchasing shares and will pay the Principal Underwriter $2.50 for each
repurchase transaction handled by the Principal Underwriter. The Principal
Underwriter estimates that the expenses incurred by it in acting as repurchase
agent for the Fund will exceed the amounts paid therefor by the Fund. For the
period from the start of business, January 2, 1997, to June 30, 1997, there were
no repurchase transactions of the Fund handled by the Principal Underwriter.
SERVICE PLAN
The Trust on behalf of the Fund has adopted a Service Plan (the "Plan")
designed to meet the service fee requirements of the sales charge rule of the
NASD (Management believes service fee payments are not distribution expenses
governed by Rule 12b-1 under the 1940 Act, but has chosen to have the Plan
approved as if that Rule were applicable.) The following supplements the
discussion of the Plan contained in the Fund's Prospectus.
The Plan continues in effect from year to year for so long as such
continuance is approved at least annually by the vote of both a majority of (i)
the noninterested Trustees who have no direct or indirect financial interest in
the operation of the Plan or any agreements related to it (the "Plan Trustees")
and (ii) all of the Trustees then in office, cast in person at a meeting (or
meetings) called for the purpose of voting on the Plan. The Plan may be
terminated any time by vote of the Plan Trustees or by vote of a majority of the
outstanding voting securities of the Fund.
The Plan requires quarterly Trustee review of a written report of the
amount expended under the Plan and the purposes for which such expenditures were
made. The Plan may not be amended to increase materially the payments described
herein without approval of the shareholders of the Fund, and the Trustees. So
long as the Plan is in effect, the selection and nomination of the noninterested
Trustees shall be committed to the discretion such Trustees. The Trustees have
determined that in their judgment there is a reasonable likelihood that the Plan
will benefit the Fund and its shareholders.
PORTFOLIO SECURITY TRANSACTIONS
Decisions concerning the execution of Fund portfolio security transactions,
including the selection of the market and the broker-dealer firm, are made by
Eaton Vance. Eaton Vance is also responsible for the execution of transactions
for all other accounts managed by it.
-18-
<PAGE>
Eaton Vance places the portfolio security transactions of the Fund and of
certain other accounts managed by it for execution with many broker-dealer
firms. Eaton Vance uses its best efforts to obtain execution of portfolio
transactions at prices which are advantageous to the Fund and (when a disclosed
commission is being charged) at reasonably competitive commission rates. In
seeking such execution, Eaton Vance will use its best judgment in evaluating the
terms of a transaction, and will give consideration to various relevant factors,
including without limitation the size and type of the transaction, the general
execution and operational capabilities of the broker-dealer, the nature and
character of the market for the security, the confidentiality, speed and
certainty of effective execution required for the transaction, the reputation,
reliability, experience and financial condition of the broker-dealer, the value
and quality of services rendered by the broker-dealer in other transactions, and
the reasonableness of the commission or spread, if any. Transactions on stock
exchanges and other agency transactions involve the payment by the Fund of
negotiated brokerage commissions. Such commissions vary among different
broker-dealer firms, and a particular broker-dealer may charge different
commissions according to such factors as the difficulty and size of the
transaction and the volume of business done with such broker-dealer.
Transactions in foreign securities usually involve the payment of fixed
brokerage commissions, which are generally higher than those in the United
States. There is generally no stated commission in the case of securities traded
in the over-the-counter markets, but the price paid or received by the Fund
usually includes an undisclosed dealer markup or markdown. In an underwritten
offering the price paid by the Fund includes a disclosed fixed commission or
discount retained by the underwriter or dealer. Although commissions paid on
portfolio transactions will, in the judgment of Eaton Vance, be reasonable in
relation to the value of the services provided, commissions exceeding those
which another firm might charge may be paid to broker-dealers who were selected
to execute transactions on behalf of the Fund and Eaton Vance's other clients in
part for providing brokerage and research services to Eaton Vance.
As authorized in Section 28(e) of the Securities Exchange Act of 1934, a
broker or dealer who executes a portfolio transaction on behalf of the Fund may
receive a commission which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if Eaton
Vance determines in good faith that such compensation was reasonable in relation
to the value of the brokerage and research services provided. This determination
may be made on the basis of either that particular transaction or on the basis
of overall responsibilities which Eaton Vance and its affiliates have for
accounts over which it exercises investment discretion. In making any such
determination, Eaton Vance will not attempt to place a specific dollar value on
the brokerage and research services provided or to determine what portion of the
commission should be related to such services. Brokerage and research services
may include advice as to the value of securities, the advisability of investing
in, purchasing or selling securities, and the availability of securities or
purchasers or sellers of securities; furnishing analyses and reports concerning
issuers, industries, securities, economic factors and trends, portfolio strategy
and the performance of accounts; and effecting securities transactions and
performing functions incidental thereto (such as clearance and settlement); and
the "Research Services" referred to in the next paragraph.
It is a common practice of the investment advisory industry for the
advisers of investment companies, institutions and other investors to receive
research, statistical and quotation services, data, information and other
services, products and materials which assist such advisers in the performance
of their investment responsibilities ("Research Services") from broker-dealers
which execute portfolio transactions for the clients of such advisers and from
third parties with which such broker-dealers have arrangements. Consistent with
this practice, Eaton Vance may receive Research Services from broker-dealer
firms with which Eaton Vance places the portfolio transactions of the Fund and
from third parties with which these broker-dealers have arrangements. These
Research Services may include such matters as general economic and market
-19-
<PAGE>
reviews, industry and company reviews, evaluations of securities and
portfolio strategies and transactions and recommendations as to the purchase and
sale of securities and other portfolio transactions, financial, industry and
trade publications, news and information services, pricing and quotation
equipment and services, and research oriented computer hardware, software, data
bases and services. Any particular Research Service obtained through a
broker-dealer may be used by Eaton Vance in connection with client accounts
other than those accounts which pay commissions to such broker-dealer. Any such
Research Service may be broadly useful and of value to Eaton Vance in rendering
investment advisory services to all or a significant portion of its clients, or
may be relevant and useful for the management of only one client's account or of
a few clients' accounts, or may be useful for the management of merely a segment
of certain clients' accounts, regardless of whether any such account or accounts
paid commissions to the broker-dealer through which such Research Service was
obtained. The advisory fee paid by the Fund is not reduced because Eaton Vance
receives such Research Services. Eaton Vance evaluates the nature and quality of
the various Research Services obtained through broker-dealer firms and attempts
to allocate sufficient commissions to such firms to ensure the continued receipt
of Research Services which Eaton Vance believes are useful or of value to it in
rendering investment advisory services to its clients.
Subject to the requirement that Eaton Vance shall use its best efforts to
seek to execute portfolio security transactions at advantageous prices and at
reasonably competitive commission rates or spreads, Eaton Vance is authorized to
consider as a factor in the selection of any broker-dealer firm with whom Fund
portfolio orders may be placed the fact that such firm has sold or is selling
shares of the Fund or of other investment companies sponsored by Eaton Vance.
This policy is not inconsistent with a rule of the NASD, which rule provides
that no firm which is a member of the NASD shall favor or disfavor the
distribution of shares of any particular investment company or group of
investment companies on the basis of brokerage commissions received or expected
by such firm from any source.
Securities considered as investments for the Fund may also be appropriate
for other investment accounts managed by Eaton Vance or its affiliates. Whenever
decisions are made to buy or sell securities by the Fund and one or more of such
other accounts simultaneously, Eaton Vance will allocate the security
transactions (including "hot" issues) in a manner which it believes to be
equitable under the circumstances. As a result of such allocations, there may be
instances where the Fund will not participate in a transaction that is allocated
among other accounts. If an aggregated order cannot be filled completely,
allocations will generally be made on a pro rata basis. An order may not be
allocated on a pro rata basis where, for example (i) consideration is given to
portfolio managers who have been instrumental in developing or negotiating a
particular investment; (ii) consideration is given to an account with
specialized investment policies that coincide with the particulars of a specific
investment; (iii) pro rata allocation would result in odd-lot or de minimis
amounts being allocated to a portfolio or other client; or (iv) where Eaton
Vance reasonably determines that departure from a pro rata allocation is
advisable. While these aggregation and allocation policies could have a
detrimental effect on the price or amount of the securities available to the
Fund from time to time, it is the opinion of the Trustees of the Trust that the
benefits available from the Eaton Vance organization outweigh any disadvantage
that may arise from exposure to simultaneous transactions.
For the period from the start of business, January 2, 1997, to June 30,
1997, Eaton Vance paid brokerage commissions of $634. Of this amount,
approximately $613 was paid in respect of portfolio security transactions
aggregating approximately $297,587, to firms which provided some research
services to Eaton Vance or its affiliates (although many of such firms may have
been selected in any particular transaction primarily because of their execution
capabilities).
-20-
<PAGE>
OTHER INFORMATION
The Trust is organized as a business trust under the laws of the
Commonwealth of Massachusetts under a Declaration of Trust dated March 27, 1989,
as amended. On July 21, 1992, the Trust changed its name from Eaton Vance
Special Equities Fund to Eaton Vance Special Investment Trust. Eaton Vance,
pursuant to its agreement with the Trust, controls the use of the words "Eaton
Vance" and "EV" in the Fund's name and may use the words "Eaton Vance" or "EV"
in other connections and for other purposes.
The Declaration of Trust may be amended by the Trustees when authorized by
a majority of the outstanding voting securities of the Trust affected by the
amendment. The Trustees may also amend the Declaration of Trust without the vote
or consent of shareholders to change the name of the Trust, or any series, or to
make such other changes (such as reclassifying series or classes of shares or
restructuring the Trust) as do not have a materially adverse effect on the
rights or interests of shareholders or if they deem it necessary to conform the
Declaration to the requirements of applicable federal laws or regulations. The
Trust's By-laws provide that the Trust will indemnify its Trustees and officers
against liabilities and expenses incurred in connection with any litigation or
proceeding in which they may be involved because of their offices with the
Trust. However, no indemnification will be provided to any Trustee or officer
for any liability to the Trust or its shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
Under Massachusetts law, if certain conditions prevail, shareholders of a
Massachusetts business trust (such as the Trust) could be deemed to have
personal liability for the obligations of the Trust. Numerous investment
companies registered under the 1940 Act have been formed as Massachusetts
business trusts, and management is not aware of an instance where such liability
has been imposed. The Trust's Declaration of Trust contains an express
disclaimer of liability on the part of the Fund shareholders and the Trust's
By-laws provide that the Trust shall assume the defense on behalf of any Fund
shareholders. (The Declaration of Trust also contains provisions limiting the
liability of a series or class to that series or class.) Moreover, the Trust's
By-laws also provide for indemnification out of the property of the Fund of any
shareholder held personally liable solely by reason of being or having been a
shareholder for all loss or expense arising from such liability. The assets of
the Fund are readily marketable and will ordinarily substantially exceed its
liabilities. In light of the nature of the Fund's business and the nature of its
assets, management believes that the possibility of the Fund's liability
exceeding its assets, and therefore the shareholder's risk of personal
liability, is extremely remote.
As permitted by Massachusetts law, there will normally be no meetings of
shareholders for the purpose of electing Trustees unless and until such time as
less than a majority of the Trustees of the Trust holding office have been
elected by shareholders. In such an event the Trustees then in office will call
a shareholder's meeting for the election of Trustees. Except for the foregoing
circumstances and unless removed by action of the shareholders in accordance
with the Trust's By-laws, the Trustees shall continue to hold office and may
appoint successor Trustees.
The Trust's By-Laws provide that no person shall serve as a Trustee if
shareholders holding two-thirds of the outstanding shares have removed him from
that office either by a written declaration filed with the Trust's custodian or
by votes cast at a meeting called for that purpose. The By-laws further provide
that under certain circumstances the shareholders may call a meeting to remove a
Trustee and that the Trust is required to provide assistance in communicating
with shareholders about such a meeting.
-21-
<PAGE>
The right to redeem can be suspended and the payment of the redemption
price deferred when the Exchange is closed (other than for customary weekend and
holiday closings), during periods when trading on the Exchange is restricted as
determined by the Commission, or during any emergency as determined by the
Commission which makes it impracticable for the Fund to dispose of its
securities or value its assets, or during any other period permitted by order of
the Commission for the protection of investors.
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L. P., One Post Office Square, Boston, Massachusetts,
are the independent accountants of the Fund, providing audit services, tax
return preparation, and assistance and consultation with respect to the
preparation of filings with the Commission.
-22-
<PAGE>
<TABLE>
<CAPTION>
EV Traditional Emerging Growth Fund as of June 30, 1997
PORTFOLIO OF INVESTMENTS (Unaudited)
<S> <C> <C>
Common Stocks -- 104.0%
Security Shares Value
Advertising -- 2.4%
Catalina Marketing Corp. 80 $ 3,850
Outdoor Systems, Inc. 60 2,295
$ 6,145
Banks - Regional -- 0.8%
Colonial Bancgroup, Inc. 80 $ 1,940
$ 1,940
Banks and Money Services -- 1.7%
Bank United Corp. Class A 50 $ 1,900
First USA Paymentech, Inc. 85 2,460
$ 4,360
Broadcasting and Cable -- 4.0%
Emmis Broadcasting Corp. Class A 95 $ 4,144
HBO & Co. 10 688
Jacor Communications, Inc. 50 1,912
Lin Television Corp. 80 3,530
$ 10,274
Building Materials -- 1.0%
Texas Industries, Inc. 100 $ 2,656
$ 2,656
Business Products and Services -- 4.5%
Ecolab Inc. 50 $ 2,387
CN Maximus, Inc. 50 893
Personal Group of America, Inc. 50 1,440
Precision Response Corp. 45 742
Teletech Holdings, Inc. 100 2,625
Vanstar Corp. 250 3,531
$ 11,618
Communications Services -- 0.8%
Transition Systems, Inc. 115 $ 2,091
$ 2,091
Communications Equipment -- 6.5%
Acend Communications, Inc. 50 $ 1,969
Brooktrout Technology, Inc. 50 593
Cascade Communications Corp. 25 690
Davox Corp. 50 1,787
ECI Telecommunications 60 1,785
Glenayre Technologies, Inc. 100 1,637
Mosaix Inc. 200 2,725
Natural Microsystems Corp. 50 1,800
Security Dynamics Technology, Inc. 20 738
SunGard Data Systems, Inc. 65 3,023
$ 16,747
Computer Software -- 5.1%
Cambridge Technologies, Inc. 110 $ 3,520
Cognos Inc. 70 2,179
Comverse Technology, Inc. 30 1,560
Peoplesoft, Inc. 30 1,583
Sterling Commerce Inc. 70 2,301
Veritas Software Corp. 40 2,010
$ 13,153
Consumer Services -- 2.4%
G and K Services, Inc. 70 $ 2,608
Strayer Education, Inc. 90 3,420
$ 6,028
Drugs -- 3.7%
Elan Corp. PLC ADR 50 $ 2,263
Genzyme Corp. - General Division 150 4,163
Genzyme Corp. - Tissue Repair 140 1,418
Roberts Pharmaceutical Corp. 150 1,678
$ 9,522
Electrical Equipment -- 0.3%
Chicago Minature Lamp, Inc. 25 $ 622
$ 622
Electronics - Semiconductors -- 5.4%
Cypress Semiconductor Corp. 150 $ 2,175
KLA Tencor Corp. 20 975
Level One Communications, Inc. 20 769
Linear Technology Corp. 40 2,070
PRI Automation, Inc. 40 1,518
Rambus Inc. 100 4,650
Teradyne, Inc. 40 1,570
$ 13,727
Entertainment -- 2.9%
MGM Grand, Inc. 70 $ 2,590
Mirage Resorts, Inc. 70 1,768
Regal Cinemas 50 1,650
Speedway Motorsports 60 1,305
$ 7,313
Finance - Miscellaneous -- 0.7%
Capital One Financial Corp. 50 $ 1,888
$ 1,888
Furniture and Appliances -- 1.5%
Bed Bath & Beyond, Inc. 130 $ 3,949
$ 3,949
Health Services -- 12.5%
American Retirement Corp. 150 $ 2,663
Arterial Vascular Engineering 60 1,931
Curative Health Services, Inc. 70 2,013
Express Scripts, Inc. Class A 75 3,131
Genesis Health Ventures, Inc. Class A 90 3,038
Medic Computer Systems, Inc. 75 1,669
MiniMed, Inc. 120 3,195
National Surgery Centers, Inc. 35 1,238
Omnicare Inc. 100 3,138
Parexel International Corp. 70 2,223
Pediatrix Medical Group, Inc. 75 3,436
PhyCor Inc. 80 2,755
Sola International 50 1,675
$ 32,105
Information Services -- 15.1%
Acxiom Corp. 100 $ 2,050
Affiliated Computer Services, Inc. 100 2,800
Aspect Development, Inc. 25 652
Aspen Technologies, Inc. 90 3,386
BISYS Group, Inc. 85 3,549
CCC Information Services Group 110 2,145
Claremont Technology Group, Inc. 50 1,188
FIserv Inc. 60 2,678
Gartner Group, Inc. Class A 40 1,437
Harbinger Corp. 110 3,080
IDX Systems Corp. 75 2,587
National Data Corp. 30 1,299
Nova Corp. Georgia 100 2,594
Paychex Inc. 82 3,116
Pegasystems Inc. 100 3,138
Scopus Technology, Inc. 136 3,043
$ 38,742
Insurance -- 3.0%
CRA Managed Care, Inc. 50 $ 2,609
HCC Insurance Holdings, Inc. 90 2,402
Mutual Risk Management Ltd. 60 2,753
$ 7,764
Investment Services -- 3.7%
Centura Banks, Inc. 60 $ 2,753
Sovereign Bancorp, Inc. 150 2,288
The Money Store, Inc. 60 1,721
The PMI Group, Inc. 45 2,807
$ 9,569
Leisure Equipment -- 0.4%
Cannondale Corp. 60 $ 1,065
$ 1,065
Lodging and Gaming -- 1.4%
Promus Hotel Corp. 70 $ 2,713
Station Casinos, Inc. 100 838
$ 3,551
Medical Products -- 2.9%
Acuson Corp. 70 $ 1,610
Heartstream, Inc. 150 1,313
Invacare Corp. 55 1,286
Physio-control International Corp. 60 900
Sofamor Danek Group, Inc. 50 2,287
$ 7,396
Oil and Gas - Equipment and Services -- 1.8%
Camco International, Inc. 50 $ 2,738
Ensco International, Inc. 35 1,846
$ 4,584
Oil and Gas - Exploration and Production -- 7.7%
Abacan Resource Corp. 250 $ 796
American Exploration Co. 105 1,535
Anadarko Petroleum Corp. 30 1,800
Cairn Energy USA, Inc. 240 3,150
Louisiana Land & Exploration Corp. 60 3,428
Noble Affiliates 50 1,934
Noble Drilling, Inc. 60 1,354
Nuevo Energy Co. 40 1,640
Swift Energy Co. 60 1,432
Triton Energy Ltd. 60 2,748
$ 19,817
Publishing -- 2.3%
A.H. Belo Corp. 90 $ 3,746
Franklin Covey Co. 80 2,025
$ 5,771
Retail - Food and Drug -- 2.2%
Papa John's International, Inc. 70 $ 2,572
Starbucks Corp. 80 3,115
$ 5,687
Retail - Specialty and Apparel -- 6.1%
Ann Taylor Stores 100 $ 1,950
Claire's Stores, Inc. 75 1,312
Gadzooks, Inc. 40 780
K & G Men's Center, Inc. 60 1,305
Pacific Sunwear of California 20 645
Polo Ralph Lauren Corp. 300 8,212
The Men's Wearhouse, Inc. 50 1,575
$ 15,779
Transportation -- 1.2%
Comair Holdings, Inc. 110 $ 3,045
$ 3,045
Total Common Stocks
(identified cost $236,930) $266,908
Other assets, less liabilities -- (4.0%) $(10,243)
Total Net Assets -- 100% $256,665
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
EV Traditional Emerging Growth Fund as of June 30, 1997
FINANCIAL STATEMENTS (Unaudited)
Statement of Assets and Liabilities
As of June 30, 1997
<S> <C>
Assets
Investments, at value (Note 1A)
(identified cost, $236,930) $266,908
Cash 663
Receivable for investments sold 790
Dividends receivable 14
Receivable from investment adviser (Note 4) 2,724
Deferred organization expense 4,502
Total assets $275,601
Liabilities
Due to bank $ 11,000
Payable for investments purchased 710
Accrued organization expense 5,000
Accrued expenses 2,226
Total liabilities $ 18,936
Net Assets for 23,857 shares of
beneficial interest outstanding $256,665
Sources of Net Assets
Paid-in capital $235,343
Unrealized appreciation of investments
(computed on the basis of identified cost) 29,978
Accumulated undistributed net realized gain (loss) on investments (8,806)
Undistributed net investment income 150
Total net assets $256,665
Net Asset Value and
Redemption Price Per Share
($256,665 (divided by) 23,857 shares of
beneficial interest outstanding) $ 10.76
Computation of Offering Price
Offering price per share (100 (divided by) 95.25 of $10.76) $ 11.30
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
For the Six Months Ended
June 30, 1997
<S> <C>
Investment Income
Income --
Dividends $ 150
Total income $ 150
Expenses --
Investment adviser fee (Note 4) $ 783
Custodian fees 2,130
Amortization of organization expense 498
Transfer and dividend disbursing agent fees 50
Miscellaneous 46
Total expenses $ 3,507
Deduct --
Preliminary reduction of investment adviser fee (Note 4) $ 783
Preliminary allocation of expenses to the investment adviser (Note 4) 2,724
Net expenses 0
Net investment income $ 150
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) on investments (identified cost basis) -- $(8,806)
Unrealized appreciation of investments $29,978
Net realized and unrealized gain on investments $21,172
Net increase in net assets resulting from operations $21,322
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
Six Months Ended
June 30,1997
(Unaudited)
<S> <C>
Increase (Decrease)
in Net Assets
From operations --
Net investment income $ 150
Net realized loss on investments (8,806)
Unrealized appreciation of investments 29,978
Net increase in net assets from operations $ 21,322
Transactions in shares of beneficial
interest (Note 3) --
Proceeds from sales of shares $152,343
Cost of shares redeemed (17,000)
Increase in net assets from
Fund share transactions $135,343
Net increase in net assets $156,665
Net Assets
At beginning of period $100,000
At end of period (including undistributed
net investment income of $150) $256,665
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights
Six Months Ended
June 30,1997
(Unaudited)
<S> <C>
Net asset value -- Beginning of period $10.000
Income from operations
Net investment income $ 0.006
Net realized and unrealized gain on investments 0.754
Total income from operations $ 0.760
Net asset value -- End of period $10.760
Total Return(1) 7.60%
Ratios/Supplemental Data *
Net assets, end of year (000's omitted) $ 257
Ratio of net expenses to average net assets 0.00%+
Ratio of net investment income to average net assets 0.14%+
Portfolio Turnover 137%
Average Commission Rate Paid** $0.0592
* For the six months ended June 30,1997, the operating expenses of the Fund reflect a preliminary
waiver of the investment adviser fee and an allocation of expenses to the Investment Adviser.
Had such actions not been taken, net investment income (loss) per share and the ratios would
have been as follows:
Net investment loss per share $(0.141)
Ratios (As a percentage of average net assets):
Expenses 3.36%+
Net investment loss (3.22)%+
+ Computed on an annualized basis.
** 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.
(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.
See notes to financial statements
</TABLE>
EV Traditional Emerging Growth Fund as of June 30, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1 Significant Accounting Policies
EV Traditional Emerging Growth Fund (the "Fund" ) is a diversified
series of Eaton Vance Special Investment Trust (the Trust). The Trust is
an entity of the type commonly known as a Massachusetts business trust
and is registered under the Investment Company Act of 1940, as amended,
as an open-end management investment company. The 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 Security 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 therefor 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 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. 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. All other securities
are valued at fair value as determined in good faith by or at the
direction of the Trustees.
B Federal Taxes -- The Fund's policy is to comply with the provisions of
the Internal Revenue Code available to regulated investment companies
and to distribute to shareholders each year all of its taxable income,
including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is necessary.
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 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 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.
F 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
It is the present policy of the Fund to make (A) at least one
distribution annually (normally in December) of substantially all of the
investment income earned by the Fund, less its expenses and (B) at least
one distribution annually of substantially all of the capital gains
realized by the Fund, if any. 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
overdistributions 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.
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 follows:
Six Months Ended
June 30, 1997
(Unaudited)
Sales 15,456
Redemptions (1,599)
Net increase 13,857
4 Investment Adviser Fee and
Other Transactions with Affiliates
Eaton Vance Management (EVM) earns an investment adviser fee as
compensation for management and investment advisory services rendered to
the Fund. The fee is computed at the monthly rate of 0.0625% (0.75% per
annum) of the Fund's average daily net assets up to $500 million and at
reduced rates as daily net assets exceed that level. For the six months
ended June 30, 1997, the effective annual rate, based on average daily
net assets, was 0.75%. EVM voluntarily waived the entire investment
adviser fee for the period and also assumed $2,724 of additional Fund
expenses.
Except as to Trustees of the Fund who are not members of EVM's
organization, officers and Trustees receive remuneration for their
services to the Fund out of such investment adviser fee. Certain of the
officers and Trustees of the Fund are officers and directors/trustees of
the above organization.
Trustees of the Fund that are not affiliated with the Investment Advisor
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 period ended June 30, 1997, no fees have been deferred.
5 Service Plan
The Trustees of the Fund adopted a Service Plan designed to meet the
service fee requirements of the sales charge rule of the National
Association of Securities Dealers Inc. The Plan provides that the Fund
may make service fee payments for personal services and/or the
maintenance of shareholder accounts to the Principal Underwriter,
financial service firms ("Authorized Firms") and other persons in
amounts not exceeding .25% of the Fund's average daily net assets for
any fiscal year. The Trustees of the Trust have initially implemented
the Plan by authorizing the Fund to make quarterly service fee payments
to the Principal Underwriter and Authorized Firms in amounts not
expected to exceed .25% of the Fund's average daily net assets for any
fiscal year based on the value of Fund shares sold by such persons and
remaining outstanding for at least twelve months. The Fund expects to
begin making service fee payments during the quarter ending March
31,1998.
6 Investment Transactions
Purchases and sales of investments, other than U.S. Government
Securities and short-term obligations, aggregated $54,245 and $34,830
respectively.
7 Federal Income Tax Basis of Investments
The cost and unrealized appreciation/depreciation in value of the
investment securities owned at June 30, 1997, as computed on a federal
income tax basis, are as follows:
Aggregate cost $ 236,930
Gross unrealized appreciation $ 35,210
Gross unrealized depreciation (5,232)
Net unrealized appreciation $ 29,978
<PAGE>
INVESTMENT ADVISER AND EV TRADITIONAL
ADMINISTRATOR
Eaton Vance Management EMERGING GROWTH FUND
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN STATEMENT OF ADDITIONAL
Investors Bank & Trust Company
200 Clarendon Street INFORMATION
Boston, MA 02116
TRANSFER AGENT
First Data Investor Services Group AUGUST 1, 1997
P.O. Box 5123
Westborough, MA 01581-5123
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EV TRADITIONAL EMERGING GROWTH FUND
24 FEDERAL STREET
BOSTON, MA 02110 T-EGSAI
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(A) FINANCIAL STATEMENTS
INCLUDED IN PART A:
Financial Highlights for the period from the start of business,
January 2, 1997, to June 30, 1997 (Unaudited)
INCLUDED IN PART B:
The following financial statements contained in the Fund's
semi-annual report:
Portfolio of Investments as of June 30, 1997 (Unaudited)
Statement of Assets and Liabilities as of June 30, 1997
(Unaudited)
Statement of Operations for the six months ended June 30,
1997 (Unaudited)
Statement of Changes in Net Assets for the six months ended
June 30, 1997 (Unaudited)
Financial Highlights for the six months ended June 30, 1997
(Unaudited)
Notes to Financial Statements (Unaudited)
(B) EXHIBITS
(1)(a) Amended and Restated Declaration of Trust dated September 27, 1993,
filed as Exhibit No. 1(a) to Post-Effective Amendment No. 42 and
incorporated herein by reference.
(b) Amendment and Restatement of Establishment and Designation of Series
of Shares dated October 18, 1996, filed as Exhibit No. (1)(b) to
Post-Effective Amendment No. 45 and incorporated herein by reference.
(2)(a) By-Laws, filed as No. Exhibit (2)(a) to Post-Effective Amendment No.
42 and incorporated herein by reference.
(b) Amendment to By-Laws of Eaton Vance Special Investment Trust dated
December 13, 1993, filed as Exhibit No. (2)(b) to Post-Effective
Amendment No. 42 and incorporated herein by reference.
(3) Not Applicable.
(4) Not Applicable.
(5)(a) Management Contract with Eaton Vance Management for EV
Traditional Emerging Markets Fund dated March 24, 1994, filed as
Exhibit No. (5)(a) to Post-Effective Amendment No. 42 and incorporated
herein by reference.
(b) Management Contract with Eaton Vance Management for EV Marathon
Emerging Markets Fund dated March 24, 1994, filed as Exhibit No.
(5)(b) to Post-Effective Amendment No. 42 and incorporated by
reference.
C-1
<PAGE>
(c) Management Contract with Eaton Vance Management for EV Traditional
Greater India Fund dated March 24, 1994, filed as Exhibit No. (5)(c)
to Post-Effective Amendment No. 42 and incorporated herein by
reference.
(d) Management Contract with Eaton Vance Management for EV Marathon
Greater India Fund dated March 24, 1994, filed as Exhibit No. (5)(d)
to Post-Effective Amendment No. 42 and incorporated herein by
reference.
(e) Investment Advisory Agreement with Eaton Vance Management for EV
Traditional Emerging Growth Fund dated December 31, 1996, filed as
Exhibit (5)(e) to Post-Effective Amendment No. 45 and incorporated
herein by reference.
(6)(a)(1) Distribution Agreement between Eaton Vance Special Investment
Trust (on behalf of its Classic Series) and Eaton Vance Distributors,
Inc. dated November 1, 1996 (with attached Schedule A effective
November 1, 1996), filed as Exhibit No. (6)(a)(1) to Post-Effective
Amendment No. 46 and incorporated herein by reference.
(2) Distribution Agreement between Eaton Vance Special Investment Trust
(on behalf of its Marathon Series) and Eaton Vance Distributors, Inc.
dated November 1, 1996 (with attached Schedule A effective November 1,
1996), filed as Exhibit No. (6)(a)(2) to Post-Effective Amendment No.
46 and incorporated herein by reference.
(3) Distribution Agreement between Eaton Vance Special Investment Trust
(on behalf of its Traditional Series) and Eaton Vance Distributors,
Inc. dated November 1, 1996 (with attached Schedule A effective
November 1, 1996), filed as Exhibit No. (6)(a)(3) to Post-Effective
Amendment No. 46 and incorporated herein by reference.
(b) Selling Group Agreement between Eaton Vance Distributors, Inc. and
Authorized Dealers, filed as Exhibit No. (6)(b) to the Registration
Statement of Eaton Vance Growth Trust Post-Effective Amendment No. 61
and incorporated herein by reference.
(7) The Securities and Exchange Commission has granted the
Registrant an exemptive order that permits the Registrant to enter
into deferred compensation arrangements with its Independent Trustees.
See in the Matter of Capital Exchange Fund, Inc., Release No. IC-20671
(November 1, 1994).
(8)(a) Custodian Agreement with Investors Bank & Trust Company dated March
24, 1994, filed as Exhibit No. (8) to Post-Effective Amendment No. 42
and incorporated herein by reference.
(b) Amendment to Custodian Agreement with Investors Bank & Trust Company
dated October 23, 1995, filed as Exhibit No. (8)(b) to Post-Effective
Amendment No. 43 and incorporated herein by reference.
(9) Amended Administrative Services Agreement between Eaton Vance Special
Investment Trust (on behalf of each of its series) and Eaton Vance
Management dated June 19, 1995, with attached schedule regarding each
series of the Registrant, filed as Exhibit No. (9) to Post-Effective
Amendment No. 42 and incorporated herein by reference.
(10) Not applicable.
C-2
<PAGE>
(11) Not applicable.
(12) Not applicable.
(13) Not applicable.
(14)(a) Vance, Sanders Profit Sharing Retirement Plan for Self-Employed
Persons with Adoption Agreement and instructions, filed as Exhibit No.
(14)(1) to Post-Effective Amendment No. 22 to the Registration
Statement under the Securities Act of 1933 (File No. 2-28471) and
incorporated herein by reference.
(b) Eaton & Howard, Vance Sanders Defined Contribution Prototype Plan and
Trust with Adoption Agreement: (1) Basic Profit-Sharing Retirement
Plan; (2) Basic Money Purchase Pension Plan; (3) Thrift Plan
Qualifying as Profit-Sharing Plan; (4) Thrift Plan Qualifying as Money
Purchase Plan; (5) Integrated Profit-Sharing Retirement Plan; and (6)
Integrated Money Purchase Pension Plan, filed as Exhibit No. (14)(2)
to Post-Effective Amendment No. 29 to the Registration Statement under
the Securities Act of 1933 (File No. 2-22019) and incorporated herein
by reference.
(c) Individual Retirement Custodian Account (Form 5305A) and Instructions,
filed as Exhibit No. (14)(3) to Post-Effective Amendment No. 21 and
incorporated herein by reference.
(d) Vance, Sanders Variable Pension Prototype Plan and Trust with Adoption
Agreement, filed as Exhibit No. (14)(4) to Post-Effective Amendment
No. 22 to the Registration Statement under the Securities Act of 1933
(File No. 2-28471) and incorporated herein by reference.
(15)(a) Amended Distribution Plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended, for Eaton Vance Special
Investment Trust (on behalf of its Classic Series that invest in
domestic Portfolios) dated June 19, 1995 (with attached Schedule A
regarding such Classic series of the Registrant), filed as Exhibit No.
(15)(a) to Post-Effective Amendment No. 42 and incorporated herein by
reference.
(1)Amendment to Amended Distribution Plan (on behalf of its Classic
Series that invest in domestic Portfolios) effective November 1, 1996,
filed as Exhibit No. (15)(a)(1) to Post-Effective Amendment No. 46 and
incorporated herein by reference.
(b) Amended Distribution Plan pursuant to Rule 12b-1 under the Investment
Company Act of 1940, as amended, for Eaton Vance Special Investment
Trust (on behalf of its Marathon Series that invest in domestic
Portfolios) dated June 19, 1995 (with attached Schedule A regarding
such Marathon series of the Registrant), filed as Exhibit No. (15)(b)
to Post-Effective Amendment No. 42 and incorporated herein by
reference.
(1)Amendment to Amended Distribution Plan (on behalf of its Marathon
Series that invest in domestic Portfolios) effective November 1, 1996,
filed as Exhibit No. (15)(b)(1) to Post-Effective Amendment No. 46 and
incorporated herein by reference.
C-3
<PAGE>
(c) Amended Service Plan for Eaton Vance Special Investment Trust (on
behalf of its Traditional Series that invest in domestic Portfolios)
dated June 19, 1995 (with attached Schedule A regarding such
Traditional series of the Registrant), filed as Exhibit No. (15)(c) to
Post-Effective Amendment No. 42 and incorporated herein by reference.
(1)Amendment to Amended Service Plan (on behalf of its Traditional Series
that invest in domestic Portfolios) effective November 1, 1996, filed
as Exhibit No. (15)(c)(1) to Post-Effective Amendment No. 46 and
incorporated herein by reference.
(d) Distribution Plan dated March 24, 1994 for EV Traditional Emerging
Markets Fund pursuant to Rule 12b-1 under the Investment Company Act
of 1940, filed as Exhibit No. (15)(d) to Post-Effective Amendment No.
42 and incorporated herein by reference.
(1)Amendment to Distribution Plan for EV Traditional Emerging Markets
Fund effective November 1, 1996, filed as Exhibit No. (15)(d)(1) to
Post-Effective Amendment No. 46 and incorporated herein by reference.
(e) Distribution Plan dated March 24, 1994 for EV Marathon Emerging
Markets Fund pursuant to Rule 12b-1 under the Investment Company Act
of 1940, filed as Exhibit No. 15(e) to Post-Effective Amendment No. 42
and incorporated herein by reference.
(1)Amendment to Distribution Plan for EV Marathon Emerging Markets Fund
effective November 1, 1996, filed as Exhibit No. (15)(e)(1) to
Post-Effective Amendment No. 46 and incorporated herein by reference.
(f) Distribution Plan dated March 24, 1994 for EV Traditional Greater
India Fund pursuant to Rule 12b-1 under the Investment Company Act of
1940, filed as Exhibit No. (15)(f) to Post-Effective Amendment No. 42
and incorporated herein by reference.
(1)Amendment to Distribution Plan for EV Marathon Greater India Fund
effective November 1, 1996, filed as Exhibit No. (15)(f)(1) to
Post-Effective Amendment No. 46 and incorporated herein by reference.
(g) Distribution Plan dated March 24, 1994 for EV Marathon Greater India
Fund pursuant to Rule 12b-1 under the Investment Company Act of 1940,
filed as Exhibit No. (15)(g) to Post-Effective Amendment No. 42 and
incorporated herein by reference.
(1)Amendment to Distribution Plan for EV Marathon Greater India Fund
effective November 1, 1996, filed as Exhibit No. (15)(g)(1) to
Post-Effective Amendment No. 46 and incorporated herein by reference.
(16) Schedule for Computation of Performance Quotations, filed herewith.
(17)(a) Power of Attorney dated June 23, 1997 for Eaton Vance
Special Investment Trust, filed herewith.
(b) Power of Attorney for Emerging Markets Portfolio dated February 14,
1997, filed as Exhibit No. (17)(b) to Post-Effective Amendment No. 46
and incorporated herein by reference.
C-4
<PAGE>
(c) Power of Attorney for South Asia Portfolio dated February 14, 1997,
filed as Exhibit No. (17)(c) to Post-Effective Amendment No. 46 and
incorporated herein by reference.
(d) Power of Attorney for Special Investment Portfolio, filed as Exhibit
No. (17)(d) to Post-Effective Amendment No. 42 and incorporated herein
by reference.
(e) Power of Attorney for Investors Portfolio, filed as Exhibit No.
(17)(e) to Post-Effective Amendment No. 42 and incorporated herein by
reference.
(f) Power of Attorney for Stock Portfolio, filed as Exhibit No. (17)(f) to
Post-Effective Amendment No. 42 and incorporated herein by reference.
(g) Power of Attorney for Total Return Portfolio, filed as Exhibit No.
(17)(g) to Post-Effective Amendment No. 42 and incorporated herein by
reference.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL
Not applicable.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
(2)
(1) Number of
Title of Class Record Holders
Shares of beneficial interest as of June 30, 1997
without par value
EV Traditional Emerging Growth Fund 19
EV Marathon Emerging Markets Fund 694
EV Traditional Emerging Markets Fund 378
EV Marathon Greater India Fund 185
EV Traditional Greater India Fund 1,922
EV Classic Special Equities Fund 41
EV Marathon Special Equities Fund 210
EV Traditional Special Equities Fund 6,180
EV Classic Investors Fund 303
EV Marathon Investors Fund 2,168
EV Traditional Investors Fund 12,799
EV Classic Stock Fund 63
EV Marathon Stock Fund 719
EV Traditional Stock Fund 5,290
EV Classic Total Return Fund 222
EV Marathon Total Return Fund 2,642
EV Traditional Total Return Fund 15,752
C-5
<PAGE>
ITEM 27. INDEMNIFICATION
Article IV of the Trust's Declaration of Trust dated September 27, 1993, as
amended, permits Trustee and officer indemnification by By-law, contract and
vote. Article XI of the By-Laws contains indemnification provisions.
Registrant's Trustees and officers are insured under a standard mutual fund
errors and omissions insurance policy covering loss incurred by reason of
negligent errors and omissions committed in their capacities as such.
The distribution agreements of the Trust also provide for reciprocal
indemnity of the principal underwriter on the one hand, and the Trustees and
officers, on the other.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Reference is made to the information set forth under the caption
"Investment Adviser and Administrator" in the Statement of Additional
Information, which information is incorporated herein by reference.
ITEM 29. PRINCIPAL UNDERWRITER
(a) Registrant's principal underwriter, Eaton Vance Distributors, Inc., a
wholly-owned subsidiary of Eaton Vance Management, is the principal
underwriter for each of the investment companies named below:
Eaton Vance Growth Trust Eaton Vance Municipal Bond Fund L.P.
Eaton Vance Income Fund of Boston Eaton Vance Mutual Funds Trust
Eaton Vance Investment Trust Eaton Vance Prime Rate Reserves
Eaton Vance Municipals Trust Eaton Vance Special Investment Trust
Eaton Vance Municipals Trust II EV Classic Senior Floating-Rate Fund
EV Traditional Worldwide Health
Sciences Fund, Inc.
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address* with Principal Underwriter with Registrant
- ------------------ -------------------------- ---------------------
James B. Hawkes Vice President and Director President, Principal
Executive Officer and
Trustee
William M. Steul Vice President and Director None
Wharton P. Whitaker President and Director None
Chris Berg Vice President None
Kate Bradshaw Vice President None
David B. Carle Vice President None
Daniel C. Cataldo Vice President None
Raymond Cox Vice President None
Mark P. Doman Vice President None
Alan R. Dynner Vice President Secretary
James Foley Vice President None
Michael A. Foster Vice President None
William M. Gillen Senior Vice President None
Hugh S. Gilmartin Vice President None
Perry D. Hooker Vice President None
C-6
<PAGE>
Brian Jacobs Senior Vice President None
Thomas P. Luka Vice President None
John Macejka Vice President None
Timothy D. McCarthy Vice President None
Joseph T. McMenamin Vice President None
Morgan C. Mohrman Senior Vice President None
James A. Naughton Vice President None
Mark D. Nelson Vice President None
Linda D. Newkirk Vice President None
James L. O'Connor Vice President Treasurer
Thomas Otis Secretary and Clerk None
George D. Owen, II Vice President None
F. Anthony Robinson Vice President None
Jay S. Rosoff Vice President None
Benjamin A. Rowland, Jr. Vice President, None
Treasurer and Director
Stephen M. Rudman Vice President None
John P. Rynne Vice President None
Kevin Schrader Vice President None
George V.F. Schwab, Jr. Vice President None
Cornelius J. Sullivan Vice President None
David M. Thill Vice President None
John M. Trotsky Vice President None
Chris Volf Vice President None
Sue Wilder Vice President None
- ---------------------------
* Address is 24 Federal Street, Boston, MA 02110
(c) Not Applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
All applicable accounts, books and documents required to be maintained by
the Registrant by Section 31(a) of the Investment Company Act of 1940 and the
Rules promulgated thereunder are in the possession and custody of the
Registrant's custodian, Investors Bank & Trust Company, 200 Clarendon Street,
16th Floor, Mail Code ADM27, Boston, MA 02116, and its transfer agent, First
Data Investor Services Group, 4400 Computer Drive, Westborough, MA 01581-5120,
with the exception of certain corporate documents and portfolio trading
documents which are in the possession and custody of Eaton Vance Management, 24
Federal Street, Boston, MA 02110. The Registrant is informed that all applicable
accounts, books and documents required to be maintained by registered investment
advisers are in the custody and possession of Eaton Vance Management.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
The Registrant undertakes to furnish to each person to whom a prospectus is
delivered, a copy of the latest annual report to shareholders, upon request and
without charge.
C-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of the Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Amendment to its Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized in the City of Boston, and the
Commonwealth of Massachusetts, on the 24th day of July, 1997.
EATON VANCE SPECIAL INVESTMENT TRUST
By: /s/ James B. Hawkes
------------------------------------
James B. Hawkes, President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below by
the following persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ James B. Hawkes President, Principal July 24, 1997
- -------------------------- Executive Officer and
James B. Hawkes Trustee
/s/ James L. O'Connor Treasurer and Principal July 24, 1997
- -------------------------- Financial and Accounting
James L. O'Connor Officer
/s/ M. Dozier Gardner Trustee July 24, 1997
- --------------------------
M. Dozier Gardner
Donald R. Dwight* Trustee July 24, 1997
- --------------------------
Donald R. Dwight
Samuel L. Hayes, III* Trustee July 24, 1997
- --------------------------
Samuel L. Hayes, III
Norton H. Reamer* Trustee July 24, 1997
- --------------------------
Norton H. Reamer
John L. Thorndike* Trustee July 24, 1997
- --------------------------
John L. Thorndike
Jack L. Treynor* Trustee July 24, 1997
- --------------------------
Jack L. Treynor
By: /s/ Alan R. Dynner
---------------------
Alan R. Dynner
As attorney-in-fact
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
(16) Schedule for Computation of Performance Quotations.
(17)(a) Power of Attorney dated June 23, 1997 for Eaton Vance Special
Investment Trust
<TABLE>
INVESTMENT PERFORMANCE -- EV TRADITIONAL EMERGING GROWTH FUND
The table below indicates the total return (capital changes plus reinvestment of all distributions) on a hypothetical investment of
$1,000 in the Fund covering the period from January 2, 1997 through June 30, 1997.
<CAPTION>
VALUE OF A $1,000 INVESTMENT
VALUE OF VALUE OF TOTAL RETURN TOTAL RETURN
INVESTMENT INVESTMENT INITIAL INVESTMENT EXCLUDING SALES CHARGE INCLUDING SALES CHARGE
PERIOD DATE INVESTMENT* ON 06/30/97 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
<S> <C> <C> <C> <C> <C> <C> <C>
LIFE OF
FUND 01/02/97 $942.51 $1,014.14 7.60% NA 1.41% NA
Average annual total return is calculated using the following formula:
n
P(1+T) = ERV
where P = an initial investment of $1,000 **
T = average annual total return
n = number of years
ERV = ending redeemable value of $1,000 initial investment at the end of the period
Cumulative total return is calculated using the following formula:
T = ( ERV / P ) - 1
where T = cumulative total return including the maximum sales charge
ERV = ending redeemable value of $1,000 initial investment at the end of the period
P = an initial investment of $1,000 ***
* Initial investment less the current maximum sales charge of 5.75%.
** The average annual total return including the sales charge is calculated based on an initial investment of $1,000 less the
maximum initial sales charge of 5.75%.
*** The cumulative total return including the sales charge is calculated based on an initial investment of $1,000 less
maximum initial sales charge of 5.75%.
</TABLE>
EXHIBIT (17)(a)
POWER OF ATTORNEY
We, the undersigned officers and Trustees of Eaton Vance Special Investment
Trust, a Massachusetts business trust, do hereby severally constitute and
appoint Alan R. Dynner, James B. Hawkes and Eric G. Woodbury, or any of them, to
be true, sufficient and lawful attorneys, or attorney for each of us, to sign
for each of us, in the name of each of us in the capacities indicated below, any
and all amendments (including post-effective amendments) to the Registration
Statement on Form N-1A filed by Eaton Vance Special Investment Trust with the
Securities and Exchange Commission in respect of shares of beneficial interest
and other documents and papers relating thereto.
IN WITNESS WHEREOF we have hereunto set our hands on the dates set opposite
our respective signatures.
Signature Title Date
President, Principal
/s/ James B. Hawkes Executive Officer and April 22, 1997
- --------------------------- Trustee
James B. Hawkes
Treasurer and Principal
/s/ James L. O'Connor Financial and Accounting April 22, 1997
- --------------------------- Officer
James L. O'Connor
/s/ Donald R. Dwight Trustee April 22, 1997
- ---------------------------
Donald R. Dwight
/s/ M. Dozier Gardner Trustee April 22, 1997
- ---------------------------
M. Dozier Gardner
/s/ Samuel L. Hayes, III Trustee April 22, 1997
- ------------------------------
Samuel L. Hayes, III
/s/ Norton H. Reamer Trustee April 22, 1997
- ---------------------------
Norton H. Reamer
/s/ John L. Thorndike Trustee April 22, 1997
- ---------------------------
John L. Thorndike
/s/ Jack L. Treynor Trustee April 22, 1997
- ---------------------------
Jack L. Treynor
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000031266
<NAME> EATON VANCE SPECIAL INVESTMENT TRUST
<SERIES>
<NUMBER> 17
<NAME> EV TRADITIONAL EMERGING GROWTH FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 236,930
<INVESTMENTS-AT-VALUE> 266,908
<RECEIVABLES> 3,528
<ASSETS-OTHER> 4,502
<OTHER-ITEMS-ASSETS> 663
<TOTAL-ASSETS> 275,601
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 18,936
<TOTAL-LIABILITIES> 18,936
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 235,343
<SHARES-COMMON-STOCK> 23,857
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 150
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (8,806)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 29,978
<NET-ASSETS> 256,665
<DIVIDEND-INCOME> 150
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 150
<REALIZED-GAINS-CURRENT> (8,806)
<APPREC-INCREASE-CURRENT> 29,978
<NET-CHANGE-FROM-OPS> 21,322
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 25,456
<NUMBER-OF-SHARES-REDEEMED> 1,599
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 256,665
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 783
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,507
<AVERAGE-NET-ASSETS> 216,763
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.006
<PER-SHARE-GAIN-APPREC> 0.754
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.76
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
