<PAGE>
[LOGO OF EATON VANCE APPEARS HERE]
Investing
for the
EATON VANCE 21st
- ----------- Century(R)
Mutual Funds
Semiannual Report June 30, 1998
EATON VANCE
[PICTURE HERE] GROWTH &
INCOME
FUND
Eaton Vance
Global Management-Global Distribution
[PICTURE HERE]
<PAGE>
Eaton Vance Growth & Income Fund as of June 30, 1998
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INVESTMENT UPDATE
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[PHOTO OF DUNCAN W. RICHARDSON PORTFOLIO MANAGER APPEARS HERE]
Investment Environment
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The Economy
. In the first half of 1998, the U.S. economy continued to benefit from a
confluence of favorable trends, including good growth, historically low
unemployment, and tame inflation.
. Gross Domestic Product increased by a moderate 1.4% in the second quarter,
while the unemployment rate declined from 4.7% in December, 1997, to 4.5% in
June, 1998. On the inflation front, the Consumer Price Index rose just 1.6%
in the twelve months ended June, 1998.
. Investors continue to evaluate the potential effect of the Asian economic
crisis on the U.S. economy. Thus far in 1998, lower prices for Asian imports
have contributed to already-low inflation. As a result, long-term interest
rates have declined. The yield on the 30-year Treasury bond fell from 5.92%
at December 31, 1997, to 5.63% at June 30, 1998.
The Stock Market
. The U.S. stock market surged to record levels in the first six months of the
year, with the S&P500 Index registering a total return of 17.7%.1 The
market's strength reflected the favorable economic backdrop, a good earnings
outlook, and a continuing flight to quality among global investors.
. The market was characterized by increasing volatility during the period. In
the six weeks from early May through mid-June, the market underwent a 6%
correction as high valuations and fears of lackluster second-quarter
earnings sent the market lower. Investor confidence was restored by
month-end, however, with blue chips again providing market leadership.
. The market was buoyed, in part, by a series of mergers in key industries,
including telecommunications and financial services. Increasing
consolidation creates efficiencies of scale and makes the resulting
companies more competitive in an increasingly fierce global marketplace. As
of June 30, mergers were pending for 31 companies represented in the S&P 500
Stock Index, according to Standard & Poor's.
The Fund
The Past Six Months
. During the six months ended June 30, 1998, the Fund's Class A shares had a
total return of 13.9%. This return resulted from an increase in net asset
value (NAV) to $15.61 per share on June 30, 1998 from $13.76 on December 31,
1997 and the reinvestment of $0.06 in dividends.2
. The Fund's Class B shares had a total return of 13.5% during the period, the
result of an increase in NAV to $17.46 per share from $15.40 per share and
the reinvestment of $0.01 in dividends.2
. The Fund's Class C shares had a total return of 13.3% during the period, the
result of an increase in NAV to $14.75 per share from $13.02 per share and
the reinvestment of $0.005 in dividends.2
. By comparison, the average total return for funds in the Growth and Income
Funds Category was 12.1%1 during the six-month period, according to Lipper
Analytical Services, Inc., a nationally recognized monitor of mutual fund
performance.
Portfolio Strategy
. The Fund performed well during the market correction, reflecting its income
component as well as a reduced exposure to Asia. The Portfolio had increased
its investments among U.S. retailers. Home Depot, Inc., the nation's largest
do-it-yourself retailer, was up 41.1% on a surge in home remodelling. The
company plans 107 new stores in 1998.
. The Portfolio also increased its exposure to technology over the past six
months. This was a sector that provided some of the Portfolio's strongest
performers. For example, Lexmark International, a global supplier of
printers and print servers, was up 60.5%.
. Drug stocks were also among the Portfolio's top performers during the
period. Warner-Lambert, Inc. rose 67.8%. The company's blockbuster Lipitor
drug has recorded significantly higher efficacy rates than its competitors
in the cholesterol-lowering field.
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Mutual fund shares are not insured by the FDIC and are not deposits or other
obligations of, or guaranteed by, any depository institution. Shares are subject
to investment risks, including possible loss of principal invested.
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Fund Information
as of June 30, 1998
Performance/3/ Class A Class B Class C
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Average Annual Total Returns (at net asset value)
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One Year 26.7% 25.4% 25.1%
Five Years 19.1 N.A. N.A.
Ten Years 15.4 N.A. N.A.
Life of Fund+ 9.9 22.3 23.7
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
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One Year 19.4% 20.4% 24.1%
Five Years 17.7 N.A. N.A.
Ten Years 14.7 N.A. N.A.
Life of Fund+ 9.8 21.9 23.7
Ten Largest Holdings/4/
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By total net assets
CVSCorp. 3.1%
Marsh & McLennan Cos., Inc. 3.1
Johnson & Johnson Co. 3.0
Unilever ADR 2.9
SunGard Data Systems, Inc. 2.8
Progressive Corp. 2.8
Automatic Data Processing, Inc. 2.7
Allstate Corp. (The) 2.7
Lexmark International Group, Inc. 2.6
Xerox Corp. 2.6
/1/ It is not possible to invest directly in an Index or Lipper category. /2/
These returns do not include the 5.75% maximum sales charge for Class A shares
or the applicable contingent deferred sales charges (CDSC) for Class B and Class
C shares. /3/ Returns are historical and are calculated by determining the
percentage change in net asset value with all distributions reinvested. SEC
returns for Class A reflect the maximum 5.75% sales charge. SEC returns for
Class B reflect applicable CDSC based on the following schedule: 5% - 1st and
2nd years; 4% - 3rd year; 3% - 4th year; 2% - 5th year; 1% - 6th year. SEC 1-
Year return for Class C reflects 1% CDSC. /4/ As of 6/30/98. Ten largest
holdings accounted for 28.3% of the Portfolio's investments. Holdings are
subject to change.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
+ Inception Dates -- Class A: 9/23/31; Class B: 8/17/94; Class C:11/4/94
2
<PAGE>
Eaton Vance Growth & Income Fund as of June 30, 1998
FINANCIAL STATEMENTS (Unaudited)
Statement of Assets and Liabilities
As of June 30, 1998
Assets
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Investment in Growth & Income Portfolio, at value
(identified cost, $126,186,916) $ 162,014,538
Receivable for Fund shares sold 125,650
Deferred organization expenses 23,237
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Total assets $ 162,163,425
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Liabilities
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Payable for Fund shares redeemed $ 154,197
Payable to affiliate for Trustees' fees 1,900
Other accrued expenses 83,434
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Total liabilities $ 239,531
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Net Assets $ 161,923,894
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Sources of Net Assets
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Paid-in capital $ 109,535,562
Accumulated undistributed net realized gain
from Portfolio (computed on the basis of identified cost) 16,714,014
Accumulated distributions in excess of (153,304)
net investment income
Net unrealized appreciation from Portfolio
(computed on the basis of identified cost) 35,827,622
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Total $ 161,923,894
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Class A Shares
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Net Assets $ 136,670,786
Shares Outstanding 8,756,307
Net Asset Value and Redemption Price Per Share
(net assets / shares of beneficial interest outstanding) $ 15.61
Maximum Offering Price Per Share
(100 / 94.25 of $15.61) $ 16.56
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Class B Shares
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Net Assets $ 23,476,341
Shares Outstanding 1,344,704
Net Asset Value, Offering Price and Redemption Price Per Share
(net assets / shares of beneficial interest outstanding) $ 17.46
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Class C Shares
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Net Assets $ 1,776,767
Shares Outstanding 120,490
Net Asset Value, Offering Price and Redemption Price Per Share
(net assets / shares of beneficial interest outstanding) $ 14.75
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On sales of $25,000 or more, the offering price of Class A shares is reduced.
Statement of Operations
For the Six Months Ended
June 30, 1998
Investment Income
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Dividends allocated from
Portfolio (net of foreign taxes, $13,896) $ 1,076,310
Interest allocated from Portfolio 229,196
Expenses allocated from Portfolio (545,200)
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Net investment income from Portfolio $ 760,306
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Expenses
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Trustees fees and expenses $ 1,020
Distribution and service fees
Class A 80,543
Class B 98,740
Class C 8,495
Transfer and dividend disbursing agent fees 111,922
Registration fees 25,364
Printing and postage 17,598
Custodian fee 9,888
Legal and accounting services 9,345
Amortization of organization expenses 8,865
Miscellaneous 7,054
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Total expenses $ 378,834
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Net investment income $ 381,472
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Realized and Unrealized
Gain (Loss) from Portfolio
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Net realized gain (loss) --
Investment transactions (identified cost basis) $ 16,795,221
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Net realized gain $ 16,795,221
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Change in unrealized appreciation (depreciation) --
Investments $ 2,589,968
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Net change in unrealized appreciation (depreciation) $ 2,589,968
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Net realized and unrealized gain $ 19,385,189
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Net increase in net assets from operations $ 19,766,661
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See notes to financial statements
3
<PAGE>
Eaton Vance Growth & Income Fund as of June 30, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
Six Months
Ended
Increase (Decrease) June 30, 1998 Year Ended
in Net Assets (Unaudited) December 31, 1997
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From operations --
Net investment $ 381,472 $ 1,280,629
income
Net realized gain 16,795,221 24,451,482
Net change in unrealized
appreciation (depreciation) 2,589,968 6,072,917
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Net increase in net assets
from operations $ 19,766,661 $ 31,805,028
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Distributions to shareholders --
From net investment income
Class A $ (419,410) $ (1,325,315)
In excess of net investment income
Class A (118,237) --
Class B (11,971) --
Class C (540) --
From net realized gain
Class A -- (27,596,519)
In excess of net realized gain
Class A -- (142,028)
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Total distributions to shareholders $ (550,158) $ (29,063,862)
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Transactions in shares of
beneficial interest --
Proceeds from sale of shares
Class A $ 2,299,960 $ 3,463,272
Class B 4,738,553 --
Class C 1,785,623 --
Net asset value of shares issued to
shareholders in payment of
distributions declared
Class A 381,467 22,690,089
Class B 12,345 --
Class C 505 --
Cost of shares redeemed
Class A (7,104,245) (11,100,776)
Class B (2,083,393) --
Class C (1,599,910) --
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Net increase (decrease) in net assets
from Fund share transactions $ (1,569,095) $ 15,052,585
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Contribution from EV Classic and
Marathon Stock Funds $ 19,707,492 $ --
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Net increase in net assets $ 37,354,900 $ 17,793,751
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At beginning of period $ 124,568,994 $ 106,775,243
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At end of period $ 161,923,894 $ 124,568,994
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Accumulated undistributed
net (distributions in excess
of) investment income
included in net assets
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At end of period $ (153,304) $ 12,250
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See notes to financial statements
4
<PAGE>
Eaton Vance Growth & Income Fund as of June 30, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 1998 -------------------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993
--------------------------------- -------------------------------------------------------
Class A Class B Class C Class A Class A Class A Class A Class A
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of period $ 13.760 $ 15.400 $ 13.020 $ 13.560 $ 12.760 $ 10.900 $ 12.490 $ 13.480
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Income (loss) from operations
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Net investment income (loss) $ 0.045 $ (0.016) $ (0.144) $ 0.163 $ 0.228 $ 0.250 $ 0.250 $ 0.270*
Net realized and unrealized gain (loss) 1.865 2.086 1.879 3.827 2.272 3.255 (0.765) 0.270*
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Total income (loss) from operations $ 1.910 $ 2.070 $ 1.735 $ 3.990 $ 2.500 $ 3.505 $ (0.515) $ 0.540
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Less distributions
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From net investment income $ (0.047) $ -- $ -- $ (0.170) $ (0.220) $ (0.251) $ (0.250) $ (0.270)
In excess of net investment income (0.013) (0.010) (0.005) -- -- -- -- --
From net realized gain -- -- -- (3.602) (1.480) (1.394) (0.765) (1.260)
In excess of net realized gain -- -- -- (0.018) -- -- (0.060) --
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Total distributions $ (0.060) $ (0.010) $ (.005) $ (3.790) $ (1.700) $ (1.645) $ (1.075) $ (1.530)
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Net asset value -- End of period $ 15.610 $ 17.460 $ 14.750 $ 13.760 $ 13.560 $ 12.760 $ 10.900 $ 12.490
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Total Return (1) 13.92% 13.45% 13.33% 30.93% 20.20% 32.77% (4.12)% 4.19%
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Ratios/Supplemental Data
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Net assets, end of period
(000's omitted) $136,671 $ 23,476 $ 1,777 $124,569 $106,775 $ 99,375 $ 84,299 $ 97,513
Ratios (As a percentage of average
daily net assets):
Expenses (2) 1.08%+ 1.92%+ 1.95%+ 1.04% 1.00% 1.04% 0.98% 0.96%
Net investment income (loss) 0.61%+ (0.23)%+ (0.26)%+ 1.07% 1.70% 2.02% 2.09% 2.01
Portfolio turnover (3) -- -- -- -- -- -- 66% 105%
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</TABLE>
+ Annualized.
* Computed on average share basis
(1)Total return is calculated assuming a purchase at the net asset value on the
first day and a sale at the net asset value on the last day of each period
reported. Dividends and distributions, if any, are assumed reinvested at the
net asset value on the reinvestment date. Total return is not computed on an
annualized basis.
(2)Includes the Fund's share of the Portfolio's allocated expenses for the
period the Fund was investing in the Portfolio.
(3)Portfolio Turnover represents the rate of portfolio activity for the period
while the Fund was making investments directly in securities. The portfolio
turnover rate for the period since the Fund transferred all of its investable
assets to the Portfolio is shown in the Portfolio's financial statements
which are included elsewhere in this report.
See notes to financial statements
5
<PAGE>
Eaton Vance Growth & Income Fund as of June 30, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1 Significant Accounting Policies
-----------------------------------------------------------------------------
Eaton Vance Growth & Income Fund (the Fund), (formerly Eaton Vance Stock
Fund), a Massachusetts business trust, is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end management
investment company. The Fund is a series of the Eaton Vance Special
Investment Trust (the Trust). The Fund offers three classes of shares. Class
A shares are sold subject to a sales charge imposed at the time of the
purchase. Class B and Class C shares are sold at net asset value and are
subject to a contingent deferred sales charge (See Note 6). All classes of
shares have equal rights to assets and voting privileges. Realized and
unrealized gains and losses and net investment income, other than class
specific expenses, are allocated daily to each class of shares based on the
relative net assets of each class to the total net assets of the Fund. Each
class of shares differs in its distribution plan and certain other class
specific expenses. The Fund invests all of its investable assets in interests
in Growth & Income Portfolio (the Portfolio), a New York Trust, having the
same investment objective as the Fund. The value of the Fund's investment in
the Portfolio reflects the Fund's proportionate interest in the net assets of
the Portfolio (100.0% at June 30,1998). The performance of the Fund is
directly affected by the performance of the Portfolio. The financial
statements of the Portfolio, including the portfolio of investments, are
included elsewhere in this report and should be read in conjunction with the
Fund's financial statements.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
A Investment Valuations -- Valuation of securities by the Portfolio is
discussed in Note 1A of the Portfolio's Notes to Financial Statements which
are included elsewhere in this report.
B Income -- The Fund's net investment income consists of the Fund's pro rata
share of the net investment income of the Portfolio, less all actual and
accrued expenses of the Fund, determined in accordance with generally
accepted accounting principles. Prior to the Fund's investment in the
Portfolio, the Fund held its investments directly.
C Federal Taxes -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders each year all of its taxable income, including any
net realized gain on investments, option and financial futures transactions.
Accordingly, no provision for federal income or excise tax is necessary.
D Deferred Organization Expenses -- Costs incurred by the fund in connection
with its organization, including registration costs, are being amortized on
the straight-line basis over five years.
E Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian of the Fund and the Portfolio. Pursuant to the custodian
agreements, IBT receives a fee reduced by credits which are determined based
on the average daily cash balances the Fund or the Portfolio maintains with
IBT. All significant credit balances used to reduce the Fund's custodian fees
are reflected as a reduction of operating expenses on the Statement of
Operations.
F Other -- Investment transactions are accounted for on a trade date basis.
G Use of Estimates -- The preparation of the financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements and the reported
amounts of revenue and expense during the reporting period. Actual results
could differ from those estimates.
H Interim Financial Information -- The interim financial statements relating
to June 30, 1998 and the six month period then ended have not been audited by
independent certified public accountants, but in the opinion of the Fund's
management reflect all adjustments, consisting only of normal recurring
adjustments, necessary for the fair presentation of the financial statements.
2 Distributions to Shareholders
-----------------------------------------------------------------------------
The Fund's present policy is to pay quarterly dividends from net investment
income allocated to the Fund by the Portfolio (less the Fund's direct and
allocated expenses) and to distribute at least annually any net realized
capital gains so allocated. Distributions are paid in the form of additional
shares of the Fund or, at the election of the shareholder, in cash. The Fund
distinguishes between
6
<PAGE>
Eaton Vance Growth & Income Fund as of June 30, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
distributions on a tax basis and a financial reporting basis. Generally
accepted accounting principles require that only distributions in excess of
tax basis earnings and profits be reported in the financial statements as a
return of capital. Differences in the recognition or classification of income
between the financial statements and tax earnings and profits which result in
over distributions only for financial statement purposes are classified as
distributions in excess of net investment income or accumulated net realized
gains. Permanent differences between book and tax accounting relating to
distributions are reclassified to paid-in capital.
3 Shares of Beneficial Interest
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The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value). Such
shares may be issued in a number of different classes.
Transactions in Fund shares were as follows:
Six Months Ended
June 30, 1998 Year Ended
Class A (Unaudited) December 31, 1997
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Sales 154,718 222,388
Issued to shareholders electing to
receive payments of distributions in
Fund shares 26,921 1,677,473
Redemptions (477,171) (723,746)
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Net increase (decrease) (295,532) 1,176,115
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Six Months Ended
June 30, 1998
Class B (Unaudited)
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Sales 282,167
Issued to shareholders electing
to receive payments of
distributions in Fund shares 824
Redemptions (127,064)
Issued to EV Marathon Stock Fund
shareholders 1,188,777
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Net increase 1,344,704
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Six Months Ended
June 30, 1998
Class C (Unaudited)
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Sales 124,088
Issued to shareholders electing
to receive payments of
distributions in Fund shares 40
Redemptions (110,927)
Issued to EV Classic Stock Fund
shareholders 107,289
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Net increase 120,490
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4 Transactions with Affiliates
-----------------------------------------------------------------------------
Eaton Vance Management (EVM) serves as the administrator of the Fund, but
receives no compensation. The Portfolio has engaged Boston Management and
Research (BMR), a subsidiary of Eaton Vance Management (EVM), to render
investment advisory services. See Note 2 of the Portfolio's Notes to
Financial Statements which are included elsewhere in this report. Except as
to Trustees of the Fund and the Portfolio who are not members of EVM's or
BMR's organization, officers and Trustees receive remuneration for their
services to the Fund out of the investment adviser fee. Eaton Vance
Distributors, Inc. (EVD), a subsidiary of EVM and the Fund's principal
underwriter, received $5,055 from the Eaton Vance Growth & Income Fund as its
portion of the sales charge on sales of Class A shares for the six months
ended June 30, 1998.
Certain of the officers and Trustees of the Fund and Portfolio are officers
and trustees of the above organizations.
5 Distribution Plan
-----------------------------------------------------------------------------
The Fund has adopted distribution plans (Class B Plan and Class C Plan)
pursuant to Rule 12b-1 under the Investment Company Act of 1940 and a Service
Plan (Class A Plan, the Plans). The Plan requires the Fund to pay the
Principal Underwriter, Eaton Vance Distributors, Inc. (EVD) amounts equal to
1/365 of 0.75% of the Fund's average daily net assets attributable to both
Class B and Class C shares for providing ongoing distribution services and
facilities to the Fund. The Fund will automatically discontinue payments to
EVD during any period in which there are no outstanding Uncovered
Distribution Charges, which are equivalent to the sum of (i) 5.00% and 6.25%
of the aggregate amount received by the Fund for the Class B and Class C
shares sold, respectively plus, (ii) distribution fees calculated by applying
the rate of 1% over the prevailing
7
<PAGE>
Eaton Vance Growth & Income Fund as of June 30, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
prime rate to the outstanding balance of Uncovered Distribution Charges of
EVD of each respective class reduced by the aggregate amount of contingent
deferred sales charges (see Note 6) and daily amounts theretofore paid to EVD
by each respective class. The Fund paid or accrued distribution fees of
$76,507 and $6,371 for Class B and Class C shares, respectively, to EVD for
the six months ended June 30, 1998, representing 0.75% (annualized) of the
average daily net assets for Class B and Class C shares. At June 30, 1998,
the amount of Uncovered Distribution Charges EVD calculated under the Plan
was approximately $395,403 and $282,807 for Class B and Class C shares,
respectively.
In addition, the Plans also authorize each class to make service fee payments
to EVD, Authorized Firms or other persons in amounts not exceeding 0.25% of
the Fund's average daily net assets attributable to Class A, Class B and
Class C shares for any fiscal year. The Trustees have initially implemented
the Plans by authorizing each class to make quarterly service fee payments to
EVD and Authorized Firms in amounts not expected to exceed 0.25% of that
portion of the Fund's average daily net assets attributable to Class A and
Class B shares based on the value of Fund shares sold by such persons and
remaining outstanding for at least one year. The Class C Plan requires the
Fund to make monthly payments of service fees in amounts not expected to
exceed 0.25% of the Fund's average daily net assets attributable to Class C
shares for any fiscal year. Such payments are made for personal services
and/or the maintenance of shareholder accounts. Service fees are separate and
distinct from the sales commissions and distribution fees payable by the Fund
to EVD, and, as such are not subject to automatic discontinuance when there
are no outstanding Uncovered Distribution Charges of EVD. Service fee
payments for the six months ended June 30, 1998 amounted to $80,543, $22,233
and $2,124 for Class A, Class B and Class C shares, respectively.
6 Contingent Deferred Sales Charge
-----------------------------------------------------------------------------
A contingent deferred sales charge (CDSC) is imposed on any redemption of
Class B shares made within six years of purchase. A CDSC is imposed on
certain Class C shares redeemed within one year of purchase. Generally, the
CDSC is based upon the lower of the net asset value at date of redemption or
date of purchase. No charge is levied on shares acquired by reinvestment of
dividends or capital gains distributions. Class B CDSC is imposed at
declining rates that begin at 5% in the case of redemptions in the first and
second year after purchase, declining one percentage point each subsequent
year. Class C shares will be subject to a 1% CDSC if redeemed within one year
of purchase. No CDSC is levied on shares which have been sold to EVM or its
affiliates or to their respective employees or clients. CDSC charges are paid
to EVD to reduce the amount of Uncovered Distribution Charges calculated
under each Fund's Distribution Plan (See Note 5). CDSC charges received when
no Uncovered Distribution Charges exist will be credited to the Fund. EVD
received approximately $14,541 and $214 of CDSC paid by shareholders for
Class B shares and Class C shares, respectively, for the six months ended
June 30, 1998.
7 Investment Transactions
-----------------------------------------------------------------------------
Increases and decreases in the Fund's investment in the Portfolio aggregated
$10,164,715 and $11,643,486, respectively.
8 Transfer of Net Assets
-----------------------------------------------------------------------------
On January 1, 1998, EV Traditional Stock Fund acquired the net assets of the
EV Marathon Stock Fund and EV Classic Stock Fund pursuant to an Agreement and
Plan of Reorganization dated June 23, 1997. In accordance with the agreement,
EV Traditional Stock Fund, at the closing, issued 1,188,777 Class B shares
and 107,289 Class C shares of the Fund, having an aggregate value of
$18,311,097 and $1,396,395, respectively. As a result, the Fund issued one
Class B share and one Class C share for each share of EV Marathon Stock Fund
and EV Classic Stock Fund, respectively. The transaction was structured for
tax purposes to qualify as a tax free reorganization under the Internal
Revenue Code. The EV Marathon Stock Fund's and EV Classic Stock Fund's net
assets at the date of the transaction were $18,311,097 and $1,396,395,
respectively, including $3,300,253 and $320,650 of unrealized appreciation.
Directly after the merger, the combined net assets of the Eaton Vance Stock
Fund (formerly "EV Traditional Stock Fund") were $144,276,486 with a net
asset value of $13.76, $15.40 and $13.02 for Class A, Class B and Class C,
respectively.
9 Name Change
-----------------------------------------------------------------------------
Effective January 1, 1998, EV Traditional Stock Fund changed its name to
Eaton Vance Stock Fund. Effective May 1, 1998, Eaton Vance Stock Fund changed
its name to Eaton Vance Growth & Income Fund.
8
<PAGE>
Growth & Income Portfolio as of June 30, 1998
PORTFOLIO OF INVESTMENTS (Unaudited)
Common Stocks-- 93.5%
Security Shares Value
- --------------------------------------------------------------------------------
Advertising -- 2.1%
- --------------------------------------------------------------------------------
Omnicom Group, Inc. 20,000 $ 997,500
Young and Rubicam, Inc.* 75,000 2,400,000
- --------------------------------------------------------------------------------
$ 3,397,500
- --------------------------------------------------------------------------------
Aerospace and Defense -- 1.9%
- --------------------------------------------------------------------------------
General Motors Corp., Class H* 65,000 $ 3,063,125
- --------------------------------------------------------------------------------
$ 3,063,125
- --------------------------------------------------------------------------------
Auto and Parts -- 2.3%
- --------------------------------------------------------------------------------
Magna International, Inc., Class A 55,000 $ 3,774,375
- --------------------------------------------------------------------------------
$ 3,774,375
- --------------------------------------------------------------------------------
Banks - Regional -- 1.7%
- --------------------------------------------------------------------------------
SouthTrust Corp. 64,200 $ 2,792,700
- --------------------------------------------------------------------------------
$ 2,792,700
- --------------------------------------------------------------------------------
Banks and Money Services -- 1.8%
- --------------------------------------------------------------------------------
First Union Corp. 50,000 $ 2,912,500
- --------------------------------------------------------------------------------
$ 2,912,500
- --------------------------------------------------------------------------------
Building Materials -- 2.0%
- --------------------------------------------------------------------------------
Fastenal Co. 68,000 $ 3,157,750
- --------------------------------------------------------------------------------
$ 3,157,750
- --------------------------------------------------------------------------------
Computers and Business Equipment -- 5.3%
- --------------------------------------------------------------------------------
Lexmark International Group, Inc.* 70,000 $ 4,270,000
Xerox Corp. 42,000 4,268,250
- --------------------------------------------------------------------------------
$ 8,538,250
- --------------------------------------------------------------------------------
Drugs -- 9.0%
- --------------------------------------------------------------------------------
Elan Corp., PLC ADR* 45,000 $ 2,894,063
Genzyme Corp., Class A* 60,000 1,533,750
Lilly (Eli) & Co. 57,000 3,765,563
Pfizer, Inc. 20,000 2,173,750
Sepracor, Inc.* 60,000 2,490,000
Warner-Lambert Co. 24,000 1,665,000
- --------------------------------------------------------------------------------
$14,522,126
- --------------------------------------------------------------------------------
Environmental Services -- 0.9%
- --------------------------------------------------------------------------------
U.S.A. Waste Services, Inc.* 30,000 $ 1,481,250
- --------------------------------------------------------------------------------
$ 1,481,250
- --------------------------------------------------------------------------------
Financial - Miscellaneous -- 3.1%
- --------------------------------------------------------------------------------
Federal National Mortgage Association 45,000 $ 2,733,750
MGIC Investment Corp. 40,000 2,282,500
- --------------------------------------------------------------------------------
$ 5,016,250
- --------------------------------------------------------------------------------
Foods -- 8.9%
- --------------------------------------------------------------------------------
McCormick & Co., Inc. 110,000 $ 3,929,057
Nabisco Holdings Corp. Class A 40,000 1,442,500
Tyson Foods, Inc. 195,000 4,229,063
Unilever ADR 60,000 4,736,249
- --------------------------------------------------------------------------------
$14,336,869
- --------------------------------------------------------------------------------
Furniture and Appliances -- 1.5%
- --------------------------------------------------------------------------------
Ethan Allen Interiors Inc. 50,000 $ 2,496,875
- --------------------------------------------------------------------------------
$ 2,496,875
- --------------------------------------------------------------------------------
Health Services -- 0.5%
- --------------------------------------------------------------------------------
Trigon Healthcare, Inc.* 20,000 $ 723,750
- --------------------------------------------------------------------------------
$ 723,750
- --------------------------------------------------------------------------------
Household Products -- 1.8%
- --------------------------------------------------------------------------------
Newell Co. 30,000 $ 1,494,375
Rubbermaid, Inc. 45,000 1,493,438
- --------------------------------------------------------------------------------
$ 2,987,813
- --------------------------------------------------------------------------------
Information Services -- 5.5%
- --------------------------------------------------------------------------------
Automatic Data Processing, Inc. 60,000 $ 4,372,500
SunGard Data Systems, Inc.* 120,000 4,605,000
- --------------------------------------------------------------------------------
$ 8,977,500
- --------------------------------------------------------------------------------
Insurance -- 9.9%
- --------------------------------------------------------------------------------
Allstate Corp. (The) 47,540 $ 4,352,881
Marsh & McLennan Cos., Inc. 82,500 4,986,093
Progressive Corp. 32,000 4,512,000
UNUM Corp. 40,000 2,220,000
- --------------------------------------------------------------------------------
$16,070,974
- --------------------------------------------------------------------------------
See notes to financial statements
9
<PAGE>
Growth & Income Portfolio as of June 30, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Security Shares Value
- --------------------------------------------------------------------------------
Leisure Equipment -- 1.0%
- --------------------------------------------------------------------------------
Sturm, Ruger & Co., Inc. 100,000 $ 1,675,000
- --------------------------------------------------------------------------------
$ 1,675,000
- --------------------------------------------------------------------------------
Medical Products -- 5.1%
- --------------------------------------------------------------------------------
Baxter International, Inc. 65,000 $ 3,497,813
Johnson & Johnson Co. 65,000 4,793,749
- --------------------------------------------------------------------------------
$ 8,291,562
- --------------------------------------------------------------------------------
Natural Gas Utilities -- 1.0%
- --------------------------------------------------------------------------------
KN Energy, Inc. 30,000 $ 1,625,625
- --------------------------------------------------------------------------------
$ 1,625,625
- --------------------------------------------------------------------------------
Oil and Gas - Equipment and Services -- 3.1%
- --------------------------------------------------------------------------------
Baker Hughes, Inc. 60,000 $ 2,073,750
Rowan Companies, Inc.* 150,000 2,915,625
- --------------------------------------------------------------------------------
$ 4,989,375
- --------------------------------------------------------------------------------
Oil and Gas - Exploration
and Production -- 6.1%
- --------------------------------------------------------------------------------
Apache Corp. 50,000 $ 1,575,000
British Petroleum Co. PLC ADR 30,260 2,670,445
Meridian Resource Corp.* 300,000 2,118,750
Oryx Energy Co.* 35,000 774,375
Triton Energy Ltd.* 45,000 1,605,938
USX-Marathon Group 35,000 1,200,938
- --------------------------------------------------------------------------------
$ 9,945,446
- --------------------------------------------------------------------------------
Publishing -- 3.7%
- --------------------------------------------------------------------------------
Dow Jones & Co., Inc. 55,000 $ 3,066,250
McGraw-Hill Companies, Inc. (The) 35,000 2,854,688
- --------------------------------------------------------------------------------
$ 5,920,938
- --------------------------------------------------------------------------------
REITS -- 3.1%
- --------------------------------------------------------------------------------
Equity Office Properties Trust 50,000 $ 1,418,750
Highwood Properties, Inc. 20,000 646,250
Public Storage, Inc. 90,000 2,520,000
Spieker Properties, Inc. 10,000 387,500
- --------------------------------------------------------------------------------
$ 4,972,500
- --------------------------------------------------------------------------------
Retail - Food and Drug -- 5.6%
- --------------------------------------------------------------------------------
CVS Corp. 130,000 $ 5,061,874
Safeway, Inc.* 100,000 4,068,750
- --------------------------------------------------------------------------------
$ 9,130,624
- --------------------------------------------------------------------------------
Retail - Specialty and Apparel -- 2.1%
- --------------------------------------------------------------------------------
Home Depot, Inc. (The) 40,000 $ 3,322,500
- --------------------------------------------------------------------------------
$ 3,322,500
- --------------------------------------------------------------------------------
Specialty Chemicals and Materials -- 2.1%
- --------------------------------------------------------------------------------
Ecolab, Inc. 110,000 $ 3,410,000
- --------------------------------------------------------------------------------
$ 3,410,000
- --------------------------------------------------------------------------------
Telephone Utilities -- 0.5%
- --------------------------------------------------------------------------------
SBC Communications, Inc. 20,000 $ 800,000
- --------------------------------------------------------------------------------
$ 800,000
- --------------------------------------------------------------------------------
Transportation -- 1.9%
- --------------------------------------------------------------------------------
Canadian Pacific LTD 50,000 $ 1,418,750
CNF Transportation, Inc. 30,000 1,275,000
Coach USA, Inc.* 10,000 456,250
- --------------------------------------------------------------------------------
$ 3,150,000
- --------------------------------------------------------------------------------
Total Common Stocks
(identified cost, $115,451,107) $151,483,177
- --------------------------------------------------------------------------------
Convertible Preferred Stocks -- 2.9%
Security Shares Value
- --------------------------------------------------------------------------------
Insurance -- 0.7%
- --------------------------------------------------------------------------------
Sun America, Inc., 3.188% 25,000 $ 1,200,000
- --------------------------------------------------------------------------------
$ 1,200,000
- --------------------------------------------------------------------------------
Metals - Gold -- 2.2%
- --------------------------------------------------------------------------------
Freeport McMoRan Copper & Gold,
Series CV, 5% 180,000 $ 3,510,000
- --------------------------------------------------------------------------------
$ 3,510,000
- --------------------------------------------------------------------------------
Total Convertible Preferred Stocks
(identified cost, $4,977,348) $ 4,710,000
- --------------------------------------------------------------------------------
See notes to financial statements
10
<PAGE>
Growth & Income Portfolio as of June 30, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Convertible Bonds -- 0.6%
Principal
Amount
(000's
Security Omitted) Value
- --------------------------------------------------------------------------------
Scandinavian Broadcasting System,
7.25%, 8/1/05 $ 840 $ 913,500
- --------------------------------------------------------------------------------
Total Convertible Bonds
(identified cost, $840,000) $ 913,500
- --------------------------------------------------------------------------------
Corporate Bonds -- 0.0%
Principal
Amount
(000's
Security Omitted) Value
- --------------------------------------------------------------------------------
H. P. Hood & Son, 7.50%, 2/1/01 $ 50 $ 39,400
- --------------------------------------------------------------------------------
Total Corporate Bonds
(identified cost, $50,000) $ 39,400
- --------------------------------------------------------------------------------
Commercial Paper -- 3.0%
Principal
Amount
(000's
Security Omitted) Value
- --------------------------------------------------------------------------------
General Electric Capital
Corp., 6.10%, 7/1/98 $ 4,829 $ 4,829,000
- --------------------------------------------------------------------------------
Total Commercial Paper
(amortized cost, $4,829,000) $ 4,829,000
- --------------------------------------------------------------------------------
Total Investments -- 100.0%
(identified cost, $126,147,455) $161,975,077
- --------------------------------------------------------------------------------
Other Assets, Less Liabilities-- 0.0% $ 39,485
- --------------------------------------------------------------------------------
Net Assets -- 100% $162,014,562
- --------------------------------------------------------------------------------
ADR -- American Depositary Receipt
REIT -- Real Estate Investment Trust
* Non-income producing security.
See notes to financial statements
11
<PAGE>
Growth & Income Portfolio as of June 30, 1998
FINANCIAL STATEMENTS (Unaudited)
Statement of Assets and Liabilities
As of June 30, 1998
Assets
- --------------------------------------------------------------------------------
Investments, at value
(identified cost, $126,147,455) $161,975,077
Cash 1,711
Receivable for investments sold 1,186,662
Interest and dividends receivable 212,983
Tax reclaim receivable 24,463
Deferred organization expenses 3,584
- --------------------------------------------------------------------------------
Total assets $163,404,480
- --------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------
Payable for investments purchased $ 1,369,203
Payable to affiliate for Trustees' fees 5,025
Other accrued expenses 15,690
- --------------------------------------------------------------------------------
Total liabilities $ 1,389,918
- --------------------------------------------------------------------------------
Net Assets applicable to investors'
interest in Portfolio $162,014,562
- --------------------------------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------------------------------
Net proceeds from capital
contributions and withdrawals $126,186,940
Net unrealized appreciation (computed
on the basis of identified cost) 35,827,622
- --------------------------------------------------------------------------------
Total $162,014,562
- --------------------------------------------------------------------------------
Statement of Operations
For the Six Months
Ended June 30, 1998
Investment Income
- --------------------------------------------------------------------------------
Dividends (net of foreign taxes, $13,896) $ 1,076,310
Interest 229,196
- --------------------------------------------------------------------------------
Total investment income $ 1,305,506
- --------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------
Investment adviser fee $ 483,430
Trustees fees and expenses 10,872
Custodian fee 30,460
Legal and accounting services 13,093
Amortization of organization expenses 1,611
Miscellaneous 5,734
- --------------------------------------------------------------------------------
Total expenses $ 545,200
- --------------------------------------------------------------------------------
Net investment income $ 760,306
- --------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss)
- --------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $16,795,224
- --------------------------------------------------------------------------------
Net realized gain $16,795,224
- --------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ 2,589,968
- --------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) $ 2,589,968
- --------------------------------------------------------------------------------
Net realized and unrealized gain $19,385,192
- --------------------------------------------------------------------------------
Net increase in net assets from operations $20,145,498
- --------------------------------------------------------------------------------
See notes to financial statements
12
<PAGE>
Growth & Income Portfolio as of June 30, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
Six Months
Ended
Increase (Decrease) June 30, 1998 Year Ended
in Net Assets (Unaudited) December 31, 1997
- --------------------------------------------------------------------------------
From operations --
Net investment income $ 760,306 $ 1,882,967
Net realized gain 16,795,224 27,091,353
Net change in unrealized
appreciation (depreciation) 2,589,968 7,613,963
- --------------------------------------------------------------------------------
Net increase in net
assets from operations $ 20,145,498 $ 36,588,283
- --------------------------------------------------------------------------------
Capital transactions --
Contributions $ 10,164,715 $ 11,266,958
Withdrawals (11,643,486) (27,470,554)
- --------------------------------------------------------------------------------
Net decrease in net
assets from capital transactions $ (1,478,771) $ (16,203,596)
- --------------------------------------------------------------------------------
Net increase in net assets $ 18,666,727 $ 20,384,687
- --------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------
At beginning of period $ 143,347,835 $ 122,963,148
- --------------------------------------------------------------------------------
At end of period $ 162,014,562 $ 143,347,835
- --------------------------------------------------------------------------------
See notes to financial statements
13
<PAGE>
Growth & Income Portfolio as of June 30, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Six Months
Ended Year Ended December 31,
June 30, 1998 ------------------------------------------------
(Unaudited) 1997 1996 1995 1994*
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ratios to average daily net assets
- ----------------------------------------------------------------------------------------------------------------------
Expenses 0.71%+ 0.73% 0.73% 0.75% 0.73%+
Net investment income 0.99%+ 1.37% 1.96% 2.30% 2.45%+
Portfolio Turnover 43% 93% 114% 108% 28%
- ----------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $162,015 $143,348 $122,963 $107,717 $85,519
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, August 1, 1994, to
December 31, 1994.
See notes to financial statements
14
<PAGE>
Growth & Income Portfolio as of June 30, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1 Significant Accounting Policies
------------------------------------------------------------------------------
Growth & Income Portfolio (the "Portfolio") (formerly Stock Portfolio) is
registered under the Investment Company Act of 1940 as a diversified open-end
investment company which was organized as a trust under the laws of the State
of New York on May 1, 1992. The Declaration of Trust permits the Trustees to
issue beneficial interests in the Portfolio. The following is a summary of
significant accounting policies of the Portfolio. The policies are in
conformity with generally accepted accounting principles.
A Investment Valuations -- Securities listed on foreign or U.S. securities
exchanges or in the NASDAQ National Market System generally are valued at
closing sale prices or, if there were no sales, at the mean between the
closing bid and asked prices on the exchange where such securities are
principally traded or on such National Market System. Unlisted or listed
securities for which closing sale prices are not available are valued at the
mean between the latest available bid and asked prices on the principal market
where the security was traded. An option is valued at the last sale price as
quoted on the principal exchange or board of trade on which such option or
contract is traded or, in the absence of a sale, at the mean between the last
bid and asked prices. Futures positions on securities or currencies are
generally valued at closing settlement prices. Short-term debt securities with
a remaining maturity of 60 days or less are valued at amortized cost. If
securities were acquired with a remaining maturity of more than 60 days, their
amortized cost value will be based on their value on the sixty-first day prior
to maturity. Other fixed income and debt securities, including listed
securities and securities for which price quotations are available, will
normally be valued on the basis of valuations furnished by a pricing service.
Securities for which market quotations are unavailable, including any security
the disposition of which is restricted under the Securities Act of 1933, and
other assets will be appraised at their fair value as determined in good faith
by or at the direction of the Trustees.
B Income -- Interest income is determined on the basis of interest accrued,
adjusted for amortization of premium or discount when required for federal
income tax purposes. Dividend income is recorded on the ex-dividend date for
dividends received in cash and/or securities. However, if the ex-dividend date
has passed, certain dividends from foreign securities are recorded as the
Portfolio is informed of the ex-dividend date. Dividend income may include
dividends that represent returns of capital for federal income tax purposes.
C Income Taxes -- The Portfolio has elected to be treated as a partnership for
United States Federal tax purposes. No provision is made by the Portfolio for
federal or state taxes on any taxable income of the Portfolio because each
investor in the Portfolio is ultimately responsible for the payment of any
taxes. Since some of the Portfolio's investors are regulated investment
companies that invest all or substantially all of their assets in the
Portfolio, the Portfolio normally must satisfy the applicable source of income
and diversification requirements (under the Internal Revenue Code) in order
for its investors to satisfy them. The Portfolio will allocate at least
annually among its investors each investor's distributive share of the
Portfolio's net investment income, net realized capital gains, and any other
items of income, gain, loss, deduction or credit. Withholding taxes on foreign
dividends and capital gains have been provided for in accordance with the
Portfolio's understanding of the applicable countries' tax rules and rates.
D Foreign Currency Translation -- Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases
and sales of foreign investment securities and income and expenses are
converted into U.S. dollars based upon currency exchange rates prevailing on
the respective dates of such transactions. Recognized gains or losses on
investment transactions attributable to foreign currency rates are recorded
for financial statement purposes as net realized gains and losses on
investments. That portion of unrealized gains and losses on investments that
result from fluctuations in foreign currency exchange rates are not separately
disclosed.
E Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian of the Portfolio. Pursuant to the custodian agreement, IBT receives
a fee reduced by credits which are determined based on the average daily cash
balances the Portfolio maintains with IBT. All significant credit balances
used to reduce the Portfolio's custodian fees are reported as a reduction of
expenses on the Statement of Operations.
F Deferred Organization Expenses -- Costs incurred by the Portfolio in
connection with its organization are being amortized on a straight-line basis
over five years.
15
<PAGE>
Growth & Income Portfolio as of June 30, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
G Other -- Investment transactions are accounted for on a trade date basis.
H Use of Estimates -- The preparation of the financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements and the reported
amounts of income and expense during the reporting period. Actual results
could differ from those estimates.
I Interim Financial Statements -- The interim financial statements relating to
June 30, 1998 and for the six months 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 Investment Adviser Fee and Other Transactions with Affiliates
------------------------------------------------------------------------------
The investment adviser fee is earned by Boston Management and Research (BMR),
a wholly-owned subsidiary of Eaton Vance Management (EVM), as compensation for
management and investment advisory services rendered to the Portfolio. The fee
is at the annual rate of 5/8 of 1% of average daily net assets. For the six
months ended June 30, 1998, the fee amounted to $483,430. Except as to
Trustees of the Portfolio who are not members of EVM's or BMR's organization,
officers and Trustees receive remuneration for their services to the Portfolio
out of such investment adviser fee. Certain of the officers and Trustees of
the Portfolio are officers and trustees of the above organizations. Trustees
of the Portfolio that are not affiliated with the Investment Adviser may elect
to defer receipt of all or a portion of their annual fees in accordance with
the terms of the Trustees Deferred Compensation Plan. For the six months ended
June 30, 1998, no significant amounts have been deferred.
3 Investments Transactions
------------------------------------------------------------------------------
Purchases and sales of investments, other than short-term obligations,
aggregated $65,831,399 and $71,221,330, respectively.
4 Federal Income Tax Basis of Investments
------------------------------------------------------------------------------
The cost and unrealized appreciation/depreciation in value of the investments
owned at June 30, 1998, as computed on a federal income tax basis, were as
follows:
Aggregate cost $ 126,147,455
------------------------------------------------------------------------------
Gross unrealized appreciation $ 39,183,325
------------------------------------------------------------------------------
Gross unrealized depreciation (3,355,703)
------------------------------------------------------------------------------
Net unrealized appreciation $ 35,827,622
------------------------------------------------------------------------------
5 Line of Credit
------------------------------------------------------------------------------
The Portfolio participates with other portfolios and funds managed by BMR and
EVM and its affiliates in a $100 million unsecured line of credit agreement
with a group of banks. The Portfolio may temporarily borrow from the line of
credit to satisfy redemption requests or settle investment transactions.
Interest is charged to each portfolio or fund based on its borrowings at an
amount above the Eurodollar rate or federal funds rate. In addition, a fee
computed at an annual rate of 0.10% on the daily unused portion of the line of
credit is allocated among the participating portfolios and funds at the end of
each quarter. The Portfolio did not have any significant borrowings or
allocated fees during the period.
6 Risk Associated with Foreign Investments
------------------------------------------------------------------------------
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 Portfolio, political or financial instability
or diplomatic and other developments which could affect such investments.
Foreign stock markets, while growing in volume and sophistication, are
generally not as developed as those in
16
<PAGE>
Growth & Income Portfolio as of June 30, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
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 general, there is less overall
governmental supervision and regulation of foreign securities markets, broker-
dealers and issuers than in the United States.
7 Name Change
------------------------------------------------------------------------------
Effective May 1, 1998, the Stock Portfolio changed its name to the Growth &
Income Portfolio.
17
<PAGE>
Eaton Vance Growth & Income Fund as of June 30, 1998
INVESTMENT MANAGEMENT
Eaton Vance Growth & Income Fund
Officers Trustees
James B. Hawkes M. Dozier Gardner
President and Trustee Vice Chairman, Eaton Vance Management
Edward E. Smiley, Jr. Donald R. Dwight
Vice President President, Dwight Partners, Inc.
James L. O'Connor Samuel L. Hayes, III
Treasurer Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate
School of Business Administration
Alan R. Dynner
Secretary Norton H. Reamer
Chairman and Chief Executive Officer,
United Asset Management Corporation
John L. Thorndike
Formerly Director, Fiduciary
Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
Growth & Income Portfolio
Officers Independent Trustees
James B. Hawkes Donald R. Dwight
President and Trustee President, Dwight Partners, Inc.
Duncan W. Richardson Samuel L. Hayes, III
Vice President and Jacob H. Schiff Professor of Investment
Portfolio Manager Banking, Harvard University Graduate
School of Business Administration
James L. O'Connor
Treasurer Norton H. Reamer
Chairman and Chief Executive Officer,
Alan R. Dynner United Asset Management Corporation
Secretary
John L. Thorndike
Formerly Director, Fiduciary Company
Incorporated
Jack L. Treynor
Investment Adviser and Consultant
18
<PAGE>
This Page Intentionally Left Blank
<PAGE>
Investment Adviser of Growth & Income Portfolio
Boston Management and Research
24 Federal Street
Boston, MA 02110
Administrator of Eaton Vance Growth & Income Fund
Eaton Vance Management
24 Federal Street
Boston, MA 02110
Principal Underwriter
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 482-8260
Custodian
Investors Bank & Trust Company
200 Clarendon Street, 16th Floor
Boston, MA 02116
Transfer Agent
First Data Investor Services Group
Attention: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
Eaton Vance Growth & Income Fund
24 Federal Street
Boston, MA 02110
- --------------------------------------------------------------------------------
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its sales charges and
expenses. Please read the prospectus carefully before you invest or send money.
- --------------------------------------------------------------------------------
GNCSRC-8/98
