<PAGE>
As filed with the Securities and Exchange Commission on February 16, 1999
1933 Act File No. 2-27962
1940 Act File No. 811-1545
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 x
POST-EFFECTIVE AMENDMENT NO. 53 x
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 x
AMENDMENT NO. 40 x
EATON VANCE SPECIAL INVESTMENT TRUST
------------------------------------
(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
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(REGISTRANT'S TELEPHONE NUMBER)
ALAN R. DYNNER, 24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
--------------------------------------------------------------
(NAME AND ADDRESS OF AGENT FOR SERVICE)
It is proposed that this filing will become effective pursuant to Rule 485
(check appropriate box):
[ ] 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)
[x] on May 1, 1999 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.
Emerging Markets Portfolio has also executed this Registration Statement.
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<PAGE>
{LOGO} Investing
EATON VANCE for the
Mutual Funds 21st
Century
Eaton Vance Institutional
Emerging Markets Fund
A mutual fund investing in companies in emerging markets countries
Prospectus Dated
May 1, 1999
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED WHETHER THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Information in this prospectus
Page Page
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Fund Summary 2 Purchasing Shares 5
Investment Objective, Policies Redeeming Shares 6
and Risks 4 Shareholder Account
Management and Organization 4 Features 6
Valuing Shares 5 Tax Information 7
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This prospectus contains important information about the Fund and the services
available to shareholders. Please save it for reference.
<PAGE>
FUND SUMMARY
Investment Objective and Principal Strategy. The Fund's investment objective is
to seek long-term capital appreciation. The Fund invests in equity securities of
companies located in emerging market countries, which includes countries in
Asia, Latin America, the Middle East, Southern Europe, Eastern Europe, Africa
and the region comprising the former Soviet Union. In managing the portfolio,
the portfolio manager looks for stocks that will grow in value over time,
regardless of short-term market fluctuations.
The Fund currently invests its assets in a separate registered investment
company with the same objective and policies.
Principal Risk Factors. The value of Fund shares is sensitive to stock market
volatilityin emerging market countries. If there is a decline in the value of
exchange-listed stocks, the value of Fund shares will also likely decline.
Changes in stock market values can be sudden and unpredictable. Also, although
stock values can rebound, there is no assurance that values will return to
previous levels. Because the Fund invests predominantly in foreign securities,
the value of Fund shares can also be adversely affected by changes in currency
exchange rates and political and economic developments abroad. In emerging
market or less-developed countries, these risks can be significant. The Fund
invests in companies with a broad range of market capitalizations, including
smaller companies. The securities of smaller companies are generally subject to
greater price fluctuation and investment risk than securities of more
established companies.
Because securities markets in emerging market countries are substantially
smaller, less liquid and more volatile than the major securities markets in the
United States, Fund share values will be more volatile. Emerging market
countries are either comparatively underdeveloped or in the process of becoming
developed. Investment in emerging market countries typically involves greater
potential for gain or loss than investments in securities of issuers in
developed countries. Emerging market countries may have relatively unstable
governments and economies based on only a few industries. The value of Fund
shares will likely be particularly sensitive to changes in the economies of such
countries (such as reversals of economic liberalization, political unrest or
changes in trading status).
The Fund is not a complete investment program and you may lose money by
investing in the Fund. An investment in the Fund is not a deposit in a bank and
is not insured or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. Shareholders may realize substantial losses and should
invest for the long-term.
2
<PAGE>
Performance Information. The following bar chart provides information about the
investment performance of another investment company that invests in the
Portfolio (which has higher expenses than the Fund). Although past performance
is no guarantee of future results, this information demonstrates the risk that
the value of your investment will change. The following returns are for each
calendar year through December 31, 1998.
09% 28.4% -3.4% 0.0%
1995 1996 1997 1998
The highest quarterly total return was ______% for the quarter ended
_______________, and the lowest quarterly return was ______% for the quarter
ended ______________. The year-to-date total return through the end of the most
recent calendar quarter (December 31, 1998 to March 31, 1999) was _____%.
Fund Fees and Expenses. These tables describe the fees and expenses that you may
pay if you buy and hold shares.
Shareholder Fees
(fees paid directly from your investment)
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Maximum Sales Charge
(as a percentage of offering price None
Maximum Deferred Sales Charge None
Sales Charge Imposed on Reinvested Distributions None
Exchange Fee None
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
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Management Fees 1.00%
Other Expenses 0.50*%
---------
Total Annual Fund Operating Expenses 1.50*%
*Other expenses is estimated. Eaton Vance will reimburse the Fund to the extent
Other Expenses exceeds 0.50% of average daily net assets.
Example. This Example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The Example assumes
that you invest $10,000 in the Fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The Example also assumes
that your investment has a 5% return each year and that the operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
1 Year 3 Years
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$153 $474
3
<PAGE>
INVESTMENT OBJECTIVE, POLICIES AND RISKS
The Fund's investment objective is to seek long-term capital appreciation. The
Fund currently seeks to meet its investment objective by investing in Emerging
Markets Portfolio (the "Portfolio"), a separate registered investment company
which has the same objective and policies as the Fund. The Fund's investment
objective and policies may be changed without shareholder approval. The Trustees
of the Trust have no present intention to make such change and intend to submit
any proposed material change in investment objective to shareholders in advance
for their approval.
Under normal market conditions, the Portfolio will invest at least 65% of its
total assets in equity securities of companies in emerging market countries.
Emerging market countries are countries that are generally considered to be
developing or emerging countries by the International Bank for Reconstruction
and Development (more commonly referred to as the "World Bank") or the
International Finance Corporation, as well as countries that are classified by
the United Nations or otherwise regarded by their own authorities as developing.
The Fund ordinarily invests in at least three emerging market countries at all
times. More than 25% of the Portfolio's total assets may be denominated in any
single currency. Although not a common practice, the portfolio manager may use
hedging techniques (such as forward contracts and options) to attempt to
mitigate adverse effects of foreign currency fluctuations.
The Portfolio's investment in foreign securities involves considerations and
possible risks not typically associated with investing in securities issued by
the U.S. Government and domestic corporations. The values 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. Currency exchange
rates may fluctuate significantly over short periods of time causing the
Portfolio'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 governmental supervision than in the
United States. Investments in foreign issuers could be affected by other factors
not present in the United States, including expropriation, armed conflict,
confiscatory taxation, lack of uniform accounting and auditing standards, less
publicly available financial and other information and potential difficulties in
enforcing contractual obligations. Transactions in the securities of foreign
issuers could be subject to settlement delays and risk of loss.
The Portfolio may invest in securities of smaller, less seasoned companies. Such
securities are generally subject to greater price fluctuations, limited
liquidity, higher transaction costs and higher investment risk. Smaller
companies may have limited product lines, markets or financial resources, and
they may be dependent on a limited management group. There is generally less
publicly available information about such companies than larger, more
established companies. The Portfolio may make direct investments in companies in
private placement transactions. Because of the absence of any public trading
market for some of these investments (such as those that are legally restricted)
it may take longer to liquidate these positions at fair value than would be the
case for publicly traded securities.
During unusual market conditions, the Portfolio may temporarily invest up to
100% of its assets in cash or cash equivalents. While temporarily invested, the
Portfolio may not achieve its investment objective. The Portfolio may also
temporarily borrow at any time up to 10% of the value of its total assets to
satisfy redemption requests or settle securities transactions.
Like most mutual funds, the Fund and Portfolio rely on computers in conducting
daily business and processing information. There is a concern that on January 1,
2000 some computer programs will be unable to recognize the new year and as a
consequence computer malfunctions will occur. Eaton Vance is taking steps that
it believes are reasonably designed to address this potential problem and to
obtain satisfactory assurance from other service providers to the Fund and the
Portfolio that they are also taking steps to address the issue. There can,
however, be no assurance that these steps will be sufficient to avoid any
adverse impact on the Fund and the Portfolio or shareholders. The Year 2000
concern may also adversely impact issuers of securities held by the Portfolio.
MANAGEMENT AND ORGANIZATION
Management. The Portfolio's investment adviser is Lloyd George Investment
Management (Bermuda) Limited ("Lloyd George"), 3808 One Exchange Square,
Central, Hong Kong. The investment adviser manages Portfolio investments and
provides related office facilities and personnel. Lloyd George receives a
monthly advisory fee of .0625% (equivalent to 0.75% annually) of the Portfolio's
average daily net assets up to $500 million. This fee declines at intervals
above $500 million.
Kiersten Christensen is the portfolio manager of the Portfolio (since May,
1996). She has been an employee of Lloyd George for at least five years.
4
<PAGE>
Lloyd George and its affiliates act as investment adviser to various individual
and institutional clients and manage $1.3 billion in assets. A team of Lloyd
George analysts currently monitor over 400 emerging markets stocks. These stocks
are screened from a 2000 stock universe based on a variety of criteria. The
Lloyd George global emerging markets team communicates weekly on stock specific
and macroeconomic issues. Eaton Vance's corporate parent owns 21% of Lloyd
George's corporate parent. Lloyd George, its affiliates and two of the
Portfolio's Trustees are domiciled outside of the United States. Because of
this, it would be difficult for the Portfolio to bring a claim or enforce a
judgment against them.
Eaton Vance administers the business affairs of the Portfolio. For these
services, Eaton Vance receives a monthly fee from the Portfolio of 1/48 of 1%
(equal to 0.25% annually) of average daily net assets up to $500 million. This
fee declines at intervals above $500 million. Eaton Vance has been managing
assets since 1924 and managing mutual funds since 1931. Eaton Vance and its
subsidiaries currently manage over $32 billion on behalf of mutual funds,
institutional clients and individuals.
The investment adviser, Eaton Vance and the Fund and Portfolio have adopted
Codes of Ethics governing personal securities transactions. Under the Codes,
employees of the investment adviser and Eaton Vance may purchase and sell
securities (including securities held by the Portfolio) subject to cerain
reporting requirements and other procedures.
Organization. The Fund is a series of Eaton Vance Special Investment Trust, a
Massachusetts business trust. The Fund does not hold annual shareholder
meetings, but may hold special meetings for matters that require shareholder
approval (like electing or removing trustees, approving management contracts or
changing investment policies that may only be changed with shareholder
approval). Because the Fund invests in the Portfolio, it may be asked to vote on
certain Portfolio matters (like changes in certain Portfolio investment
restrictions). When necessary, the Fund will hold a meeting of its shareholders
to consider the Portfolio matter and then vote its interest in the Portfolio in
proportion to the votes cast by its shareholders. The Fund can withdraw from the
Portfolio at any time.
VALUING SHARES
The Fund values its shares once each day only when the New York Stock Exchange
is open for trading (typically Monday through Friday), as of the close of
regular trading on the Exchange (normally 4:00 p.m. eastern time). The price of
Fund shares is their net asset value, which is derived from Portfolio holdings.
Exchange-listed securities are valued at closing sale prices; however, the
investment adviser may use the fair value of a security if events occurring
after the close of an exchange would materially affect net asset value. Because
foreign securities trade on days when Fund shares are not priced, net asset
value can change at times when Fund shares cannot be redeemed.
When purchasing or redeeming Fund shares, your investment dealer must
communicate your order to the principal underwriter by a specific time each day
in order for the purchase price or the redemption price to be based on that
day's net asset value per share. It is the investment dealer's responsibility to
transmit orders promptly. The Fund may accept purchase and redemption orders as
of the time of their receipt by certain investment dealers (or their designated
intermediaries).
PURCHASING SHARES
No commissions or redemption fees are charged on Fund purchases or redemptions.
The Fund provides shareholders ease of investment by allowing same day wire
purchases.
You may purchase Fund shares through your investment dealer or by requesting
your bank to transmit immediately available funds (Federal Funds) by wire to the
address set forth below. Your initial investment must be at least $500,000. To
make an initial investment by wire, you must first telephone the Fund Order
Department at 800-225-6265 (extension 7805) to advise of your action and to be
assigned an account number. Failure to call will delay the order. The Account
Application form which accompanies this prospectus must be promptly forwarded to
the transfer agent. Additional investments may be made at any time through the
same wire procedure. The Fund Order Department must be advised by telephone of
each transmission. Wire funds to:
Boston Safe Deposit & Trust Co.
ABA #811001234
Account #
Further Credit Eaton Vance Institutional Emerging Markets Fund - Fund #
A/C # [Insert your account number - see below]
5
<PAGE>
The Fund intends at all times to be as fully invested as is feasible in order to
maximize its earnings. Accordingly, purchase orders will be executed at the net
asset value next determined after their receipt by the Fund only if the Fund has
received payment in cash or in Federal Funds. If you purchase shares through an
investment dealer, that dealer may charge you a fee for executing the purchase
for you.
From time to time the Fund may suspend the continuous offering of its shares.
During any such suspension, shareholders who reinvest their distributions in
additional shares will be permitted to continue such reinvestments, and the Fund
may permit tax sheltered retirement plans which own shares to purchase
additional shares of the Fund. The Fund may also refuse any order for the
purchase of shares.
REDEEMING SHARES
You can redeem shares in one of two ways:
By Wire If you have given complete written authorization in advance
you may request that redemption proceeds be wired directly
to your bank account. The bank designated may be any bank in
the United States. The request may be made by letter or
telephone to the Fund Order Department at 800-225-6265
(extension 3). You may be required to pay costs of such
transaction; however, no costs are currently charged. The
Fund may suspend or terminate the expedited payment
procedure upon at least 30 days notice.
Through an
Investment
Dealer Your investment dealer is responsible for transmitting the
order promptly. A dealer may charge a fee for this service.
If you redeem shares, your redemption price will be based on the net asset value
per share next computed after the redemption request is received. Your
redemption proceeds will be paid in cash within seven days, reduced by the
amount of any federal income tax required to be withheld. Payments will be sent
by mail unless you complete the Bank Wire Redemptions section of the account
application.
If the Fund determines that it may be treated as a personal holding company for
federal income tax purposes at any time, it may involuntarily redeem all
accounts it determines is necessary as soon as practicable
SHAREHOLDER ACCOUNT FEATURES
Distributions. You may have your Fund distributions paid in one of the following
ways:
* Full
Reinvest
Option Dividends and capital gains are reinvested in additional
shares. This option will be assigned if you do not specify
an option.
* Partial
Reinvest
Option Dividends are paid in cash and capital gains are reinvested
in additional shares.
* Cash
Option Dividends and capital gains are paid in cash.
Information from the Fund. From time to time, you may be mailed the following:
* Annual and Semi-Annual Reports, containing performance information and
financial statements.
* Periodic account statements, showing recent activity and total share
balance.
* Form 1099 and tax information needed to prepare your income tax returns.
* Proxy materials, in the event a shareholder vote is required.
* Special notices about significant events affecting your Fund.
Telephone Transactions. The transfer agent and the principal underwriter have
procedures in place to authenticate telephone instructions (such as verifying
personal account information). As long as the transfer agent and principal
underwriter follow these procedures, they will not be responsible for
unauthorized telephone transactions and you bear the risk of possible loss
resulting from telephone transactions. Telephone instructions are tape recorded.
Account Questions. If you have any questions about your account or the services
available, please call Eaton Vance Shareholder Services at 1-800-225-6265, or
write to the transfer agent (see back cover for address).
6
<PAGE>
Tax-Sheltered Retirement Plans. Fund shares are available for purchase in
connection with certain tax-sheltered retirement plans. Call 1-800-225-6265 for
information. Distributions will be invested in additional shares for all
tax-sheltered retirement plans.
TAX INFORMATION
The Fund pays dividends at least once annually and intends to pay capital gains
annually. Distributions of income and net short-term capital gains will be
taxable as ordinary income. Distributions of any long-term capital gains are
taxable as long-term gains. The Fund's distributions will generally not qualify
for the dividends-received deduction for corporations.
Investors who purchase shares shortly before the record date of a distribution
will pay the full price for the shares and then receive some portion of the
price back as a taxable distribution. Certain distributions paid in January will
be taxable to shareholders as if received on December 31 of the prior year.
Shareholders should consult with their tax advisers concerning special tax
rules, such as Section 1258 of the Internal Revenue Code of 1986, as amended,
that may apply to their transactions in Fund shares.
Shareholders should consult with their advisers concerning the applicability of
state, local and other taxes to an investment.
7
<PAGE>
{LOGO} Investing
EATON VANCE for the
Mutual Funds 21st
Century
MORE INFORMATION
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About the Fund: More information is available in the statement of
additional information. The statement of additional information is
incorporated by reference into this prospectus. Additional information
about the Portfolio's investments is available in the annual and
semi-annual reports to shareholders. In the annual report, you will find a
discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during the past year. You may
obtain free copies of the statement of additional information and the
shareholder reports by contacting:
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
1-800-225-6265
website: www.eatonvance.com
You will find and may copy information about the Fund at the Securities and
Exchange Commission's public reference room in Washington, DC (call
1-800-SEC-0330 for information); on the SEC's Internet site
(http://www.sec.gov); or upon payment of copying fees by writing to the
SEC's public reference room in Washington, DC 20549-6009.
About Shareholder Accounts: You can obtain more information from Eaton
Vance Share- holder Services (1-800-225-6265). If you own shares and would
like to add to, redeem or change your account, please write or call the
transfer agent:
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First Data Investor Services Group
P.O. Box 5123
Westborough, MA 01581-5123
1-800-262-1122
SEC File No. 811-1545 IEMP
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
STATEMENT OF
ADDITIONAL INFORMATION
May 1, 1999
EATON VANCE
INSTITUTIONAL EMERGING MARKETS FUND
24 Federal Street
Boston, Massachusetts 02110
(800) 225-6265
This Statement of Additional Information ("SAI") provides general
information about the Fund and the Portfolio. The Fund is a series of Eaton
Vance Special Investment Trust. Capitalized terms used in this SAI and not
otherwise defined have the meanings given to them in the prospectus. This SAI
contains additional information about:
Page
Strategies and Risks .............................................. 2
Investment Restrictions ........................................... 6
Management and Organization ....................................... 7
Other Information ................................................. 10
Investment Advisory and Administrative Services ................... 11
Other Service Providers ........................................... 13
Purchasing and Redeeming Shares ................................... 14
Performance ....................................................... 16
Taxes ............................................................. 17
Portfolio Security Transactions ................................... 18
Financial Statements .............................................. 20
THIS IS NOT A PROSPECTUS AND IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE
INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY THE FUND'S PROSPECTUS DATED MAY
1, 1999, AS SUPPLEMENTED FROM TIME TO TIME, WHICH IS INCORPORATED HEREIN BY
REFERENCE. THIS SAI SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS, WHICH
MAY BE OBTAINED BY CALLING 1-800-225-6265.
<PAGE>
STRATEGIES AND RISKS
EMERGING MARKETS PORTFOLIO. Under normal market conditions, the Portfolio will
invest at least 65% of its total assets in equity securities of companies in
emerging market countries. Equity securities, for purposes of the 65% policy,
will be limited to common and preferred stocks; equity interests in trusts,
partnerships, joint ventures and other unincorporated entities or enterprises;
special classes of shares available only to foreign investors in markets that
restrict ownership by foreign investors to certain classes of equity
securities; convertible preferred stocks; and other convertible instruments.
The convertible instruments in which the Portfolio will invest will generally
not be rated, but will typically be equivalent in credit quality to securities
rated below investment grade (i.e., credit quality equivalent to lower than
Baa by Moody's Investors Service, Inc. and lower than BBB by Standard & Poor's
Ratings Group). Convertible debt securities that are not investment grade are
commonly called "junk bonds" and have risks similar to equity securities; they
have speculative characteristics and changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity to make principal
and interest payments than is the case with higher grade debt securities. Such
debt securities will not exceed 20% of total assets.
When consistent with its investment objective, the Portfolio may also
invest in equity securities of companies not in emerging market countries, as
well as warrants, options on equity securities and indices, options on
currency, futures contracts, options on futures contracts, forward foreign
currency exchange contracts, currency swaps and other non-equity investments.
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. 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.
SECURITIES TRADING MARKETS. The securities markets in Emerging Market
Countries are substantially smaller, less liquid and more volatile than the
major securities markets in the United States. A high proportion of the
shares of many issuers may be held by a limited number of persons and
financial institutions, which may limit the number of shares available for
investment by the Portfolio. The prices at which the Portfolio may acquire
investments may be affected by trading by persons with material non-public
information and by securities transactions by brokers in anticipation of
transactions by the Portfolio in particular securities. Emerging Market
Country securities markets are susceptible to being influenced by large
investors trading significant blocks of securities. Similarly, volume and
liquidity in the bond markets in Emerging Market Countries are less than in
the United States and, at times, price volatility can be greater than in the
United States. The limited liquidity of securities markets in Emerging Market
Countries may also affect the Portfolio's ability to acquire or dispose of
securities at the price and time it wishes to do so.
The stock markets in many Emerging Market Countries are undergoing a
period of growth and change, which may result in trading or price volatility
and difficulties in the settlement and recording of transactions, and in
interpreting and applying the relevant laws and regulations. The securities
industries in these countries are comparatively underdeveloped, and
stockbrokers and other intermediaries may not perform as well as their
counterparts in the United States and other more developed securities
markets.
Settlement of securities transactions may be delayed and is generally
less frequent than in the United States, which could affect the liquidity of
the Portfolio's assets. In addition, disruptions due to work stoppages and
trading improprieties in these securities markets have caused such markets to
close. If extended closings were to occur in stock markets where the
Portfolio was heavily invested, the Fund's ability to redeem Fund shares
could become correspondingly impaired. To mitigate these risks, the Portfolio
may maintain a higher cash position than it otherwise would, thereby possibly
diluting its return, or the Portfolio may have to sell liquid securities that
it would not otherwise choose to sell. In some cases, the Portfolio may find
it necessary or desirable to borrow funds on a short-term basis, within the
limits of the Investment Company Act of 1940 (the "1940 Act"), to help meet
redemption requests or settle securities transactions. Such borrowings would
result in increased expense to the Fund.
The Portfolio will invest in Emerging Market Countries, in which
political and economic structures may be undergoing significant evolution and
rapid development. Such countries may lack the social, political and economic
stability characteristics of the United States. Certain of such countries may
have in the past failed to recognize private property rights and have at
times nationalized or expropriated the assets of private companies. The laws
of Emerging Market Countries relating to limited liability of corporate
shareholders, fiduciary duties of officers and directors, and the bankruptcy
of state enterprises may be less well developed than or different from such
laws in the United States. It may be more difficult to obtain a judgment in a
court of an Emerging Market Country than it is in the United States. In
addition, unanticipated political or social developments may affect the
values of the Portfolio's investments in those countries and the availability
to the Portfolio of additional investments in those countries.
Governmental actions can have a significant effect on the economic
conditions in Emerging Market Countries, which could adversely affect the
value and liquidity of the Portfolio's investments. Although some governments
in Emerging Market Countries have recently begun to institute economic reform
policies, there can be no assurances that they will continue to pursue such
policies or, if they do, that such policies will succeed.
FOREIGN CURRENCY TRANSACTIONS. The value of the assets of the Portfolio 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
Portfolio 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.
When the Portfolio enters into a contract for the purchase or sale of a
security denominated in a foreign currency, or when the Portfolio anticipates
the receipt in a foreign currency of dividend or interest payments on such a
security which it holds, the Portfolio may desire to "lock in" the U.S. dollar
price of the security or the U.S. dollar equivalent of such dividend or
interest payment, as the case may be. Additionally, when the Adviser believes
that the currency of a particular foreign country may suffer a substantial
decline against the U.S. dollar, it may enter into a forward contract to sell,
for a fixed amount of dollars, the amount of foreign currency approximating
the value of some or all of the securities held by the Portfolio denominated
in such foreign currency. The Portfolio may engage in cross-hedging by using
forward contracts in one currency (or basket of currencies) to hedge against
fluctuations in the value of securities denominated in a different currency if
the Adviser determines that there is an established historical pattern or
correlation between the two currencies (or the basket of currencies and the
underlying currency).
OTHER INVESTMENT COMPANIES. The Portfolio reserves the right to invest up to
10% of its total assets, calculated at the time of purchase, in the securities
of other investment companies unaffiliated with the Adviser or the Manager
that have the characteristics of closed-end investment companies. The
Portfolio will indirectly bear its proportionate share of any management fees
paid by investment companies in which it invests in addition to the advisory
fee paid by the Portfolio. The value of closed-end investment company
securities, which are usually traded on an exchange, is affected by demand for
the securities themselves, independent of the demand for the underlying
portfolio assets, and, accordingly, such securities can trade at a discount
from their net asset values.
DERIVATIVE INSTRUMENTS. The Portfolio may purchase or sell derivative
instruments (which are instruments that derive their value from another
instrument, security, index or currency) to enhance return, to hedge against
fluctuations in securities prices, interest rates or currency exchange rates,
or as a substitute for the purchase or sale of securities or currencies. The
Portfolio's transactions in derivative instruments may be in the U.S. or
abroad and may include the purchase or sale of futures contracts on
securities, securities indices, other indices, other financial instruments or
currencies; options on futures contracts; exchange-traded and over-the-counter
options on securities, indices or currencies; currency swaps; and forward
foreign currency exchange contracts. The Portfolio'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; or 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 loss on derivative instruments (other than purchased
options) may substantially exceed the Portfolio's initial investment in these
instruments. In addition, the Portfolio may lose the entire premium paid for
purchased options that expire before they can be profitably exercised by the
Portfolio. The Portfolio incurs transaction costs in opening and closing
positions in derivative instruments. Under regulations of the Commodity
Futures Trading Commission ("CFTC"), the use of futures transactions for
nonhedging purposes is limited. There can be no assurance that the Adviser's
use of derivative instruments will be advantageous to the Portfolio.
RISKS ASSOCIATED WITH DERIVATIVE INSTRUMENTS. Entering into a derivative
instrument involves a risk that the applicable market will move against the
Portfolio's position and that the Portfolio 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 Portfolio.
Derivative instruments may sometimes increase or leverage the Portfolio's
exposure to a particular market risk. Leverage enhances the Portfolio's
exposure to the price volatility of derivative instruments it holds. The
Portfolio'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
Portfolio assets. Over-the-counter ("OTC") derivative instruments involve an
enhanced risk that the issuer or counterparty will fail to perform 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 Portfolio from closing out
positions and limiting its losses. The staff of the Commission takes the
position that certain OTC options, and assets used as cover for written OTC
options, are subject to the Portfolio's 15% limit on illiquid investments. The
Portfolio's ability to terminate OTC derivative instruments may depend on the
cooperation of the counterparties to such contracts. 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 Portfolio may purchase and sell derivative instruments.
The Portfolio 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."
LIMITATIONS ON FUTURES CONTRACTS AND OPTIONS. The Portfolio does not intend to
write a covered option on any security if after such transaction more than 15%
of its net assets, as measured by the aggregate value of the securities
underlying all covered calls and puts written by the Portfolio, would be
subject to such options. The Portfolio will only write a put option on a
security which it intends to ultimately acquire for its portfolio. The
Portfolio does not intend to purchase any options if after such transaction
more than 5% of its net assets, as measured by the aggregate of all premiums
paid for all such options held by the Portfolio, would be so invested. The
Portfolio may enter into futures contracts, and options on futures contracts,
traded on a foreign exchange only if the Adviser determines that trading on
each such foreign exchange does not subject the Portfolio to risks, including
credit and liquidity risks, that are materially greater than the risks
associated with trading on United States CFTC-regulated exchanges.
To the extent that the Portfolio enters into futures contracts, options on
futures contracts and options on foreign currencies traded on an exchange
regulated by the CFTC, in each case that are not for bona fide hedging
purposes (as defined by the CFTC), the aggregate initial margin and premiums
required to establish these positions (excluding the amount by which options
are "in-the-money") may not exceed 5% of the liquidation value of the
Portfolio's investments, after taking into account unrealized profits and
unrealized losses on any contracts the Portfolio has entered into.
REPURCHASE AGREEMENTS. Under a repurchase agreement the Portfolio buys a
security at one price and simultaneously promises to sell that same security
back to the seller at a higher price. At no time will the Portfolio commit
more than 15% of its net assets to repurchase agreements which mature in more
than seven days and other illiquid securities. The Portfolio's repurchase
agreements will provide that the value of the collateral underlying the
repurchase agreement will always be at least equal to the repurchase price,
including any accrued interest earned on the repurchase agreement, and will be
marked to market daily. In the event of the bankruptcy of the other party to a
repurchase agreement, the Portfolio might experience delays in recovering its
cash. To the extent that, in the meantime, the value of the securities the
Portfolio purchased may have decreased, the Portfolio could experience a loss.
REVERSE REPURCHASE AGREEMENTS. The Portfolio may enter into reverse
repurchase agreements. Under a reverse repurchase agreement, the Portfolio
temporarily transfers possession of a portfolio instrument to another party,
such as a bank or broker-dealer, in return for cash. At the same time, the
Portfolio agrees to repurchase the instrument at an agreed upon time (normally
within seven days) and price, which reflects an interest payment. The
Portfolio expects that it will enter into reverse repurchase agreements when
it is able to invest the cash so acquired at a rate higher than the cost of
the agreement, which would increase the income earned by the Portfolio. The
Portfolio could also enter into reverse repurchase agreements as a means of
raising cash to satisfy redemption requests without the necessity of selling
portfolio assets.
When the Portfolio enters into a reverse repurchase agreement, any
fluctuations in the market value of either the securities transferred to
another party or the securities in which the proceeds may be invested would
affect the market value of the Portfolio's assets. As a result, such
transactions may increase fluctuations in the market value of the Portfolio's
assets. While there is a risk that large fluctuations in the market value of
the Portfolio's assets could affect the Portfolio's net asset value, this risk
is not significantly increased by entering into reverse repurchase agreements,
in the opinion of the Adviser. Because reverse repurchase agreements may be
considered to be the practical equivalent of borrowing funds, they constitute
a form of leverage. If the Portfolio reinvests the proceeds of a reverse
repurchase agreement at a rate lower than the cost of the agreement, entering
into the agreement will lower the Portfolio's yield.
UNLISTED SECURITIES. The Portfolio may invest in securities of companies that
are neither listed on a stock exchange nor traded over the counter. Unlisted
securities may include investments in new and early stage companies, which may
involve a high degree of business and financial risk that can result in
substantial losses and may be considered speculative. Such securities will
generally be deemed to be illiquid. Because of the absence of any public
trading market for these investments, the Portfolio may take longer to
liquidate these positions than would be the case for publicly traded
securities. Although these securities may be resold in privately negotiated
transactions, the prices realized from these sales could be less than those
originally paid by the Portfolio or less than what may be considered the fair
value of such securities. Furthermore, issuers whose securities are not
publicly traded may not be subject to public disclosure and other investor
protection requirements applicable to publicly traded securities. If such
securities are required to be registered under the securities laws of one or
more jurisdictions before being resold, the Portfolio may be required to bear
the expenses of registration. In addition, any capital gains realized on the
sale of such securities may be subject to higher rates of taxation than taxes
payable on the sale of listed securities.
ASSET COVERAGE REQUIREMENTS. Transactions involving reverse repurchase
agreements, currency swaps, forward contracts or futures contracts and options
(other than options that the Portfolio has purchased) expose the Portfolio to
an obligation to another party. The Portfolio will not enter into any such
transactions unless it owns either (1) an offsetting ("covered") position in
securities, currencies, swaps, or other options, futures contracts or forward
contracts, or (2) cash or 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.) The Portfolio will comply with
Commission guidelines regarding cover for these instruments and, if the
guidelines so require, set aside cash or liquid securities in a segregated
account with its custodian in the prescribed amount. The securities in the
segregated account will be marked to market daily.
Assets used as cover or held in a segregated account maintained by the
Portfolio's custodian cannot be sold while the position requiring coverage or
segregation is outstanding unless they are replaced with other appropriate
assets. As a result, the commitment of a large portion of the Portfolio's
assets to segregated accounts or to cover could impede portfolio management or
the Portfolio's ability to meet redemption requests or other current
obligations.
PORTFOLIO TURNOVER. The Portfolio cannot accurately predict its portfolio
turnover rate, but it is anticipated that the annual turnover rate will
generally not exceed 100% (excluding turnover of securities having a maturity
of one year or less). A 100% annual turnover rate could occur, for example, if
all the securities in the portfolio were replaced once in a period of one
year. A high turnover rate (100% or more) necessarily involves greater
expenses to the Portfolio. Short-term trading may be advisable in light of a
change in circumstances of a particular company or within a particular
industry, or in light of general market, economic or political conditions.
High portfolio turnover may also result in the realization of substantial net
short-term capital gains.
LENDING PORTFOLIO SECURITIES. The Portfolio may seek to increase its income by
lending portfolio securities to broker-dealers or other institutional
borrowers. Under present regulatory policies of the Commission, such loans are
required to be secured continuously by collateral in cash, cash equivalents or
U.S. Government securities held by the Portfolio's custodian and maintained on
a current basis at an amount at least equal to market value of the securities
loaned, which will be marked to market daily. Cash equivalents include
certificates of deposit, commercial paper and other short-term money market
instruments. The financial condition of the borrower will be monitored by the
Adviser on an ongoing basis. The Portfolio would continue to receive the
equivalent of the interest or dividends paid by the issuer on the securities
loaned and would also receive a fee, or all or a portion of the interest on
investment of the collateral. The Portfolio would have the right to call a
loan and obtain the securities loaned at any time on up to five business days'
notice. The Portfolio would not have the right to vote any securities having
voting rights during the existence of a loan, but could call the loan in
anticipation of an important vote to be taken among holders of the securities
or the giving or holding of their consent on a material matter affecting the
investment. If the Adviser decides to make securities loans, it is intended
that the value of the securities loaned would not exceed one-third of the
Portfolio's total assets. 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 Adviser to be sufficiently creditworthy
and when, in the judgment of the 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.
TEMPORARY INVESTMENTS. Under unusual market conditions, the Portfolio may
invest temporarily in cash or cash equivalents. Cash equivalents are highly
liquid, short-term securities such as commercial paper, certificates of
deposit, short-term notes and short-term U.S. Government obligations.
INVESTMENT RESTRICTIONS
The following investment restrictions of the Fund are designated as
fundamental and as such cannot be changed without the approval by 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
outstanding shares are present or represented at the meeting or (b) more than
50% of the outstanding shares of the Fund. Accordingly the Fund may not:
(1) Borrow money or issue senior securities except as permitted by the
Investment Company Act of 1940;
(2) Purchase any securities on margin (but the Fund and the Portfolio may
obtain such short-term credits as may be necessary for the clearance of
purchases and sales of securities);
(3) Underwrite securities of other issuers;
(4) Invest in real estate including interests in real estate limited
partnerships (although it may purchase and sell securities which are secured
by real estate and securities of companies which invest or deal in real
estate) or in commodities or commodity contracts for the purchase or sale of
physical commodities;
(5) 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;
(6) 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
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; or
(7) Concentrate its investments 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).
Notwithstanding the investment policies and restrictions of the Fund, the
Fund may invest its assets in an open-end management investment company with
substantially the same investment objective, policies and restrictions as the
Fund. Notwithstanding the investment policies and restrictions of the
Portfolio, the Portfolio may invest part of its assets in another investment
company consistent with the 1940 Act.
The Portfolio has adopted substantially the same fundamental investment
restrictions as the foregoing investment restrictions adopted by the Fund;
such restrictions cannot be changed without the approval of a "majority of the
outstanding voting securities" of the Portfolio.
For as long as a feeder fund of the Portfolio has registered shares in
Hong Kong, the Portfolio may not (i) invest more than 10% of its net assets in
the securities of any one issuer or, purchase more than 10% of any class of
security of any one issuer, provided, however, up to 30% of the Portfolio's
net asset value may be invested in Government and public securities of the
same issue; and the Portfolio may invest all of its assets in Government and
other public securities in at least six different issues, (ii) invest more
than 15% of net assets in securities which are not listed or quoted on any
stock exchange, over-the-counter market or other organized securities market
that is open to the international public and on which such securities are
regularly traded (a "Market"), (iii) invest more than 15% of net assets in
warrants and options for non-hedging purposes, (iv) write call options on
Portfolio investments exceeding 25% of its total net asset value in terms of
exercise price, (v) enter into futures contracts on an unhedged basis where
the net total aggregate value of contract prices, whether payable by or to the
Portfolio under all outstanding futures contracts, together with the aggregate
value of holdings under (vi) below exceeds 20% of the net asset value of the
Portfolio, (vi) invest in physical commodities (including gold, silver,
platinum or other bullion) and commodity based investments (other than shares
in companies engaged in producing, processing or trading in commodities) which
value together with the net aggregate value of the holdings described in (v)
above, exceeds 20% of the Portfolio's net asset value, (vii) purchase shares
of other investment companies exceeding 10% of net assets. In addition, the
investment objective of any scheme in which the Portfolio invests must not be
to invest in investments prohibited by this undertaking and where the scheme's
investment objective is to invest primarily in investments which are
restricted by this undertaking, such holdings must not be in contravention of
the relevant limitation, (viii) borrow more than 25% of its net assets
(provided that for the purposes of this paragraph, back to back loans are not
to be categorized as borrowings), (ix) write uncovered options, (x) invest in
real estate (including options, rights or interests therein but excluding
shares in real estate companies), (xi) assume, guarantee, endorse or otherwise
become directly or contingently liable for, or in connection with, any
obligation or indebtedness of any person in respect of borrowed money without
the prior written consent of the custodian of the Portfolio, (xii) engage in
short sales involving a liability to deliver securities exceeding 10% of its
net assets provided that any security which the Portfolio does sell short must
be actively traded on a market, (xiii) subject to paragraph (v) above,
purchase an investment with unlimited liability or (xiv) purchase any nil or
partly-paid securities unless any call thereon could be met in full out of
cash or near cash held by it in the amount of which has not already been taken
into account for the purposes of (ix) above.
The Fund and the Portfolio have adopted the following investment policies
which may be changed without shareholder or investor approval. The Fund and
the Portfolio will not:
(a) invest more than 15% of its 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 the Portfolio, or its delegate, determines to be liquid. If the Fund or
Portfolio invests in Rule 144A securities, the level of portfolio illiquidity
may be increased to the extent that eligible buyers become uninterested in
purchasing such securities; or
(b) purchase any securities if at the time of such purchase, permitted
borrowings under investment restriction. (1) above exceed 5% of the value of
the Portfolio's or the Fund's total assets, as the case may be.
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, or describes a policy regarding
quality standards, such percentage limitation or standard shall be determined
immediately after and as a result of the Fund's or the Portfolio's acquisition
of such security or asset. Accordingly, any later increase or decrease
resulting from a change in values, assets or other circumstances, or any
subsequent rating change below investment grade made by a rating service, will
not compel the Fund or the Portfolio, as the case may be, to dispose of such
security or other asset. Notwithstanding the foregoing, under normal market
conditions the Fund and the Portfolio must take actions necessary to comply
with the policy of investing at least 65% of total assets in Emerging Market
investments. Moreover, the Fund and Portfolio must always be in compliance
with the borrowing policies set forth above and may not hold more than 15% of
net assets in illiquid securities.
MANAGEMENT AND ORGANIZATION
FUND MANAGEMENT. The Trustees of the Trust are responsible for the overall
management and supervision of the Trust's affairs. The Trustees and officers
of the Trust and the Portfolio 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. The
business address of Lloyd George is 3808 One Exchange Square, Central, Hong
Kong. Those Trustees who are "interested persons" of the Trust or the
Portfolio, as defined in the 1940 Act, are indicated by an asterisk(*).
JAMES B. HAWKES (57), President of the Trust, Vice President of the Portfolio
and Trustee*
Chairman, President and Chief Executive Officer of Eaton Vance, BMR and their
corporate parent and trustee (EVC and EV); Director of EVC and EV. Trustee
and officer of various investment companies managed by Eaton Vance or BMR.
Director of LGM.
HON. ROBERT LLOYD GEORGE (46), President and Trustee of the Portfolio*
Chairman and Chief Executive Officer of LGM. Chairman and Chief Executive
Officer of the Adviser
Address: 3808 One Exchange Square, Central, Hong Kong
JESSICA M. BIBLIOWICZ (39), Trustee of the Trust
President and Chief Operating Officer of John A. Levin & Co. (a registered
investment advisor) (since July, 1997) and a Director of Baker, Fentress &
Company which owns John A. Levin & Co. (since July, 1997). Formerly
Executive Vice President of Smith Barney Mutual Funds (from July, 1994 to
June, 1997). Elected Trustee October 30, 1998. Trustee of various investment
companies managed by Eaton Vance or BMR since October 30, 1998.
Address: One Rockefeller Plaza, New York, NY 10020
EDWARD K.Y. CHEN (53), Trustee of the Portfolio
President of Lingnan College in Hong Kong. Professor and Director of Centre of
Asian Studies at the University of Hong Kong from 1979-1995. Director of
First Pacific Company, Asia Satellite Telecommunications Holdings Ltd. and a
Board Member of the Mass Transit Railway Corporation. Member of the
Executive Council of the Hong Kong Government from 1992-1997 and Chairman of
the Consumer Council from 1991-1997.
Address: President's Office, Lingnan College, Tuen Mun, Hong Kong
DONALD R. DWIGHT (67), Trustee
President of Dwight Partners, Inc. (a corporate relations and communications
company). Trustee of various investment companies managed by Eaton Vance or
BMR.
Address: Clover Mill Lane, Lyme, New Hampshire 03768
SAMUEL L. HAYES, III (63), Trustee
Jacob H. Schiff Professor of Investment Banking Emeritus, Harvard University
Graduate School of Business Administration. Trustee of the Kobrick-Cendant
Investment Trust (mutual funds). Trustee of various investment companies
managed by Eaton Vance or BMR.
Address: 345 Nahatan Road, Westwood, Massachusetts 02190
NORTON H. REAMER (63), Trustee
Chairman of the Board and Chief Executive Officer -- United Asset Management
Corporation (a holding company owning institutional investment management
firms); Chairman, President and Director, UAM Funds (mutual funds). Trustee
of various investment companies managed by Eaton Vance or BMR.
Address: One International Place, Boston, Massachusetts 02110
LYNN A. STOUT (41), Trustee of the Trust
Professor of Law, Georgetown University Law Center, Elected Trustee October
30, 1998. Trustee of various investment companies managed by Eaton Vance or
BMR since October 30, 1998.
Address: 600 New Jersey Avenue, NW, Washington, DC 20001
JOHN L. THORNDIKE (72), Trustee of the Trust
Formerly Director of Fiduciary Company Incorporated. Trustee of various
investment companies managed by Eaton Vance or BMR.
Address: 175 Federal Street, Boston, Massachusetts 02110
JACK L. TREYNOR (68), Trustee of the Trust
Investment Adviser and Consultant. Trustee of various investment companies
managed by Eaton Vance or BMR.
Address: 504 Via Almar, Palos Verdes Estates, California 90274
SCOBIE DICKINSON WARD (32), Vice President, Assistant Secretary and Assistant
Treasurer of the Portfolio
Director of LGM and Chief Investment Officer of the Adviser.
Address: 3808 One Exchange Square, Central, Hong Kong
WILLIAM WALTER RALEIGH KERR (48), Vice President and Assistant Treasurer of
the Portfolio
Director, Finance Director and Chief Operating Officer of the Adviser.
Director of LGM.
Address: 3808 One Exchange Square, Central, Hong Kong
EDWARD E. SMILEY, JR. (53), Vice President of the Trust
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).
JAMES L. O'CONNOR (53), Vice President of the Portfolio and Treasurer
Vice President of Eaton Vance and BMR. Officer of various investment companies
managed by Eaton Vance or BMR.
ALAN R. DYNNER (58), Secretary
Vice President and Chief Legal Officer of BMR, Eaton Vance and EVC since
November 1, 1996. Previously, Mr. Dynner 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.
JANET E. SANDERS (63), Assistant Treasurer of the Trust and Assistant
Secretary
Vice President of Eaton Vance and BMR. Officer of various investment companies
managed by Eaton Vance or BMR.
A. JOHN MURPHY (36), Assistant Secretary
Vice President of BMR and Eaton Vance. Officer of various investment companies
managed by Eaton Vance or BMR.
ERIC G. WOODBURY (41), Assistant Secretary
Vice President of BMR and Eaton Vance. Officer of various investment companies
managed by Eaton Vance or BMR.
Messrs. Hayes (Chairman), Reamer and Thorndike are members of the Special
Committee of the Board of Trustees of the Trust and Messrs. Hayes, Dwight and
Reamer, are members of the Special Committee of the Board of Trustees of the
Portfolio. 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 and the Portfolio,
including investment advisory (Portfolio only), administrative, transfer
agency, custodial and fund accounting and distribution services, and (ii) all
other matters in which Eaton Vance, the Adviser or its affiliates has any
actual or potential conflict of interest with the Fund, the Portfolio or
investors therein.
The Nominating Committee of the Board of Trustees of the Trust and the
Portfolio 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, the Adviser or its affiliates.
Messrs. Treynor and Dwight are members of the Audit Committee of the Board
of Trustees of the Trust and Messrs. Hayes, Chen and Dwight are members of the
Audit Committee of the Board of Trustees of the Portfolio. The Audit
Committee's functions include making recommendations to the Trustees regarding
the selection of the independent certified public 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 and of the Portfolio.
Trustees of the Portfolio (except Mr. Chen) who are not affiliated with
Eaton Vance 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 Portfolio 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 Portfolio's assets,
liabilities, and net income per share, and will not obligate the Portfolio to
retain the services of any Trustee or obligate the Portfolio to pay any
particular level of compensation to the Trustees. Neither the Portfolio nor
the Trust has a retirement plan for its Trustees.
The fees and expenses of the noninterested Trustees of the Trust and the
Portfolio are paid by the Fund (and the other series of the Trust) and the
Portfolio, respectively. (The Trustees of the Trust and the Portfolio who are
members of the Eaton Vance organization receive no compensation from the Trust
or the Portfolio.) During the fiscal year ended December 31, 1998, the
noninterested Trustees of the Trust and the Portfolio earned the following
compensation in their capacities as Trustees from the Trust, the Portfolio and
the funds in the Eaton Vance fund complex(1):
<TABLE>
<CAPTION>
JESSICA M. EDWARD DONALD R. SAMUEL L. NORTON H. LYNN A. JOHN L. JACK L.
SOURCE OF COMPENSATION BIBLIOWICZ(6) K.Y. CHEN DWIGHT HAYES, III REAMER STOUT(6) THORNDIKE TREYNOR
- ---------------------- ------------- --------- ------ ---------- ------ -------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Trust(2) .................. $ $ $ $ $ $ $ $
Portfolio .................
Trust and Fund
Complex ................. (3) (4) (5)
- ------------
(1) As of May 1, 1999, the Eaton Vance fund complex consists of 153 registered investment companies or series thereof.
(2) The Trust consisted of 7 Funds as of December 31, 1998.
(3) Includes $ deferred compensation.
(4) Includes $ deferred compensation.
(5) Includes $ deferred compensation.
(6) Ms. Bibliowicz and Ms. Stout were elected Trustees on October 30, 1998 and will receive compensation approximating the other
Trustees after November 1, 1998.
</TABLE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES. As of May 1, 1999, Eaton
Vance owned one share of the Fund, being the only shares of the Fund
outstanding on such date. Eaton Vance is a Massachusetts business trust and a
wholly-owned subsidiary of EVC.
OTHER INFORMATION
The Fund is a series of the Trust, which is organized under Massachusetts
law and is operated as an open-end management investment company.
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). The
Trustees have the authority under the Declaration of Trust to create
additional classes of shares with differing rights and privileges. When issued
and outstanding, shares are fully paid and nonassessable by the Trust.
Shareholders are entitled to one vote for each full share held. Fractional
shares may be voted proportionately. Shares of the Fund will be voted
together except that only shareholders of a particular class may vote on
matters affecting only that class. Shares have no preemptive or conversion
rights and are freely transferable. In the event of the liquidation of the
Fund, shareholders of each class are entitled to share pro rata in the net
assets attributable to that class available for distribution to shareholders.
The Trustees of the Trust have considered the advantages and disadvantages
of investing the assets of the Fund in the Portfolio, as well as the
advantages and disadvantages of the two-tier format. The Trustees believe that
the structure offers opportunities for growth in the assets of the Portfolio,
may afford the potential for economies of scale for the Fund and may over time
result in lower expenses for the Fund.
The Declaration of Trust may be amended by the Trustees when authorized by
a majority of the outstanding voting securities of the Trust, the financial
interests of which are 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 of 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 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 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 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.
The Portfolio is organized as a trust under the laws of the state of New
York and intends to be treated as a partnership for federal tax purposes. In
accordance with the Declaration of Trust of the Portfolio, there will normally
be no meetings of the investors for the purpose of electing Trustees unless
and until such time as less than a majority of the Trustees holding office
have been elected by investors. In such an event the Trustees of the Portfolio
then in office will call an investors' meeting for the election of Trustees.
Except for the foregoing circumstances and unless removed by action of the
investors in accordance with the Portfolio's Declaration of Trust, the
Trustees shall continue to hold office and may appoint successor Trustees.
The Declaration of Trust of the Portfolio provides that no person shall
serve as a Trustee if investors holding two-thirds of the outstanding
interests have removed him from that office either by a written declaration
filed with the Portfolio's custodian or by votes cast at a meeting called for
that purpose. The Declaration of Trust further provides that under certain
circumstances the investors may call a meeting to remove a Trustee and that
the Portfolio is required to provide assistance in communicating with
investors about such a meeting.
The Portfolio's Declaration of Trust provides that the Fund and other
entities permitted to invest in the Portfolio (e.g., other U.S. and foreign
investment companies and common and commingled trust funds) will each be
liable for all obligations of the Portfolio. However, the risk of the Fund
incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance exists and the Portfolio
itself is unable to meet its obligations. Accordingly, the Trustees of the
Trust believe that neither the Fund nor its shareholders will be adversely
affected by reason of the Fund investing in the Portfolio.
Whenever the Fund as an investor in a Portfolio is requested to vote on
matters pertaining to the Portfolio (other than the termination of the
Portfolio's business, which may be determined by the Trustees of the Portfolio
without investor approval), the Fund will hold a meeting of Fund shareholders
and will vote its interest in the Portfolio for or against such matters
proportionately to the instructions to vote for or against such matters
received from Fund shareholders. The Fund shall vote shares for which it
receives no voting instructions in the same proportion as the shares for which
it receives voting instructions. Other investors in the Portfolio may alone or
collectively acquire sufficient voting interests in the Portfolio to control
matters relating to the operation of the Portfolio, which may require the Fund
to withdraw its investment in the Portfolio or take other appropriate action.
Any such withdrawal could result in a distribution "in kind" of portfolio
securities (as opposed to a cash distribution from the Portfolio). If
securities are distributed, the Fund could incur brokerage, tax or other
charges in converting the securities to cash. In addition, the distribution in
kind may result in a less diversified portfolio of investments or adversely
affect the liquidity of the Fund. Notwithstanding the above, there are other
means for meeting shareholder redemption requests, such as borrowing.
The Fund may withdraw (completely redeem) all its assets from the
Portfolio at any time if the Board of Trustees of the Trust determines that it
is in the best interest of the Fund to do so. In the event the Fund withdraws
all of its assets from the Portfolio, or the Board of Trustees of the Trust
determines that the investment objective of the Portfolio is no longer
consistent with the investment objective of the Fund, the Trustees would
consider what action might be taken, including investing the assets of the
Fund in another pooled investment entity or retaining an investment adviser to
manage the Fund's assets in accordance with its investment objective. The
Fund's investment performance may be affected by a withdrawal of all its
assets (or the assets of another investor in the Portfolio) from the
Portfolio.
INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES
INVESTMENT ADVISORY SERVICES. The Portfolio has engaged Lloyd George
Investment Management (Bermuda) Limited as its investment adviser. The Adviser
acting under the general supervision of the Portfolio's Board of Trustees, is
responsible for managing the Portfolio's investments. The Adviser is also
responsible for effecting all security transactions on behalf of the
Portfolio, including the allocation of principal transactions and portfolio
brokerage and the negotiation of commissions. Under the investment advisory
agreement, the Adviser is entitled to receive a monthly advisory fee computed
by applying the annual asset rate applicable to that portion of the average
daily net assets of the Portfolio throughout the month in each Category as
indicated below:
ANNUAL
CATEGORY AVERAGE DAIL NET ASSETS ASSET RATE
-------- ----------------------- ----------
1 less than $500 million ........................ 0.75%
2 $500 million but less than $1 billion ......... 0.70
3 $1 billion but less than $1.5 billion ......... 0.65
4 $1.5 billion but less than $2 billion ......... 0.60
5 $2 billion but less than $3 billion ........... 0.55
6 $3 billion and over ........................... 0.50
As of December 31, 1998, the Portfolio had net assets of $ . For
the fiscal year ended December 31, 1998, the Adviser earned advisory fees of
$ (equivalent to 0.75% of the Portfolio's average daily net assets for
such year). For the fiscal years ended December 31, 1997 and 1996, absent a
fee reduction, the Adviser would have earned advisory fees of $143,776 and
$62,401, respectively (equivalent to 0.75% of the Portfolio's average daily
net assets for each such year). To enhance the net income of the Portfolio,
the Adviser made a reduction of its asvisory fee in the amount of $36,117 and
$44,320, respectively.
The Portfolio's investment advisory agreement with the Adviser remains 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
Portfolio 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 Portfolio or
by vote of a majority of the outstanding voting securities of the Portfolio.
The Agreement may be terminated at any time without penalty on sixty days'
written notice by the Board of Trustees of either party or by vote of the
majority of the outstanding voting securities of the Portfolio, and the
Agreement will terminate automatically in the event of its assignment. The
Agreement provides that the Adviser may render services to others. The
Agreement also provides that, in the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties under
the Agreement on the part of the Adviser, the Adviser shall not be liable to
the Portfolio or to any shareholder for any act or omission in the course of
or connected with rendering services or for any losses sustained in the
purchase, holding or sale of any security.
While the Portfolio is a New York trust, the Adviser, together with
certain Trustees and officers of the Portfolio, are not residents of the
United States, and substantially all of their respective assets may be located
outside of the United States. It may be difficult for investors to effect
service of process within the United States upon the individuals identified
above, or to realize judgments of courts of the United States predicated upon
civil liabilities of the Adviser and such individuals under the federal
securities laws of the United States. The Portfolio has been advised that
there is substantial doubt as to the enforceability in the countries in which
the Adviser and such individuals reside of such civil remedies and criminal
penalties as are afforded by the federal securities laws of the United States.
INFORMATION ABOUT LLOYD GEORGE. LGM specializes in providing investment
management services with respect to equity securities of companies trading in
Asian securities markets, and also those of emerging markets. LGM currently
manages portfolios for both private clients and institutional investors
seeking long-term capital growth and has advised Eaton Vance's international
equity funds since 1992. LGM's core investment team consists of fourteen
experienced investment professionals who have worked together over a number of
years successfully managing client portfolios in non-U.S. stock markets. The
team has a unique knowledge of, and experience with, Asian and emerging
markets. LGM analysts cover Asia, the India subcontinent, Russia and Eastern
Europe, Latin America, Australia and New Zealand from offices in Hong Kong,
London and Mumbai. LGM is ultimately controlled by the Hon. Robert Lloyd
George, President of the Portfolio and Chairman and Chief Executive Officer of
the Adviser. LGM's only business is portfolio management. Eaton Vance's parent
is a shareholder of LGM.
The Adviser and LGM have adopted a conservative management style,
providing a blend of Asian and multinational expertise with the most rigorous
international standards of fundamental security analysis. Although focused
primarily in Asia, the Adviser and LGM maintain a network of international
contacts in order to monitor international economic and stock market trends
and offer clients a global management service.
The directors of the Adviser are the Honorable Robert Lloyd George,
William Walter Raleigh Kerr, Scobie Dickinson Ward, M.F. Tang, Pamela Chan,
Adaline Mang-Yee Ko, Peter Bubenzer and Judith Collis. The Hon. Robert Lloyd
George is Chairman and Chief Executive Officer of the Adviser and Mr. Kerr is
Chief Operating Officer of the Adviser. The business address of the first six
individuals is 3808 One Exchange Square, Central, Hong Kong and of the last
two is Cedar House, 41 Cedar Avenue, Hamilton HM 12, Bermuda.
Mr. Lloyd George was born in London in 1952 and educated at Eton College,
where he was a King's Scholar, and at Oxford University. Prior to founding
LGM, Mr. Lloyd George was Managing Director of Indosuez Asia Investment
Services Ltd. In 1983 Mr. Lloyd George launched and managed the Henderson
Japan Special Situations Trust. Prior to that he spent four years with the
Fiduciary Trust Company of New York researching international securities, in
the United States and Europe, for the United Nations Pension Fund.
Eaton Vance and the Adviser follow a common investment philosophy,
striving to identify companies with outstanding management and earnings growth
potential by following a disciplined management style, adhering to the most
rigorous international standards of fundamental security analysis, placing
heavy emphasis on research, visiting every company owned, and closely
monitoring political and economic developments.
ADMINISTRATIVE SERVICES. Under Eaton Vance's administration agreement with the
Portfolio, Eaton Vance receives a monthly management fee from the Portfolio.
The fee is computed by applying the annual asset rate applicable to that
portion of the average daily net assets of the Portfolio throughout the month
in each Category as indicated below:
ANNUAL
CATEGORY AVERAGE DAILY NET ASSETS ASSET RATE
-------- ------------------------ ----------
1 less than $500 million ......................... 0.25%
2 $500 million but less than $1 billion .......... 0.23333
3 $1 billion but less than $1.5 billion .......... 0.21667
4 $1.5 billion but less than $2 billion .......... 0.20
5 $2 billion but less than $3 billion ............ 0.18333
6 $3 billion and over ............................ 0.16667
As of December 31, 1998, the Portfolio had net assets of $ . For
the fiscal year ended December 31, 1998, Eaton Vance earned administration
fees of $ , (equivalent to 0.25% of the Portfolio's average daily net
assets for such year). For the fiscal years ended December 31, 1997 and 1996,
Eaton Vance earned administration fees of $47,925 and $20,096, respectively
(equivalent to 0.25% of the Portfolio's average daily net assets for each such
year). To enhance the net income of the Portfolio, Eaton Vance was allocated
expenses related to the operation of the Portfolio in the amount of $17,039
and $14,221, respectively.
Eaton Vance's administration agreement with the Portfolio remains in
effect from year to year for so long as such continuance is approved annually
by the vote of a majority of the Trustees of the Portfolio. The agreement may
be terminated at any time without penalty on sixty days' written notice by the
Board of Trustees of either party thereto, or by a vote of a majority of the
outstanding voting securities of the Portfolio. The agreement will terminate
automatically in the event of its assignment. Each agreement provides that, in
the absence of Eaton Vance's willful misfeasance, bad faith, gross negligence
or reckless disregard of its obligations or duties to the Portfolio under such
agreement, Eaton Vance will not be liable to the Portfolio for any loss
incurred. The agreement was initially approved by the Trustees, including the
noninterested Trustees, of the Portfolio which is a party thereto at a meeting
held on October 8, 1992, respectively, of the Portfolio.
INFORMATION ABOUT EATON VANCE. Eaton Vance is a business trust organized under
Massachusetts law. Eaton Vance, Inc. ("EV") serves as trustee of Eaton Vance.
Eaton Vance and EV are wholly-owned subsidiaries of Eaton Vance Corporation
("EVC"), a Maryland corporation and publicly-held holding company. EVC through
its subsidiaries and affiliates engages primarily in investment management,
administration and marketing activities. The Directors of EVC are James B.
Hawkes, Benjamin A. Rowland, Jr., John G.L. Cabot, John M. Nelson, Vincent M.
O'Reilly and Ralph Z. Sorenson. All of the issued and outstanding shares of
Eaton Vance 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, the Voting Trustees of which are Messrs.
Hawkes, and Rowland, Alan R. Dynner, Thomas E. Faust, Jr., Thomas J. Fetter,
Duncan W. Richardson, William M. Steul, and Wharton P. Whitaker. 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 BMR and Eaton Vance who are also
officers, or officers and Directors of EVC and EV. As indicated under
"Management and Organization", all of the officers of the Trust (as well as
Mr. Hawkes who is also a Trustee) hold positions in the Eaton Vance
organization.
EXPENSES. The Fund and Portfolio are responsible for all expenses not
expressly stated to be payable by another party (such as the investment
adviser under the Investment Advisory Agreement, Eaton Vance under the
administration agreement or the principal underwriter under the Distribution
Agreement). In the case of expenses incurred by the Trust, the Fund is
responsible for its pro rata share of those expenses.
OTHER SERVICE PROVIDERS
PRINCIPAL UNDERWRITER. Eaton Vance Distributors, Inc. ("EVD"), 24 Federal
Street, Boston, MA 02110, is the Fund's principal underwriter. The principal
underwriter acts as principal in selling shares under a Distribution Agreement
with the Trust. The expenses of printing copies of prospectuses used to offer
shares 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 Board of Trustees of the Trust
(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 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 investment dealers discounts from
the applicable public offering price which are alike for all investment
dealers. EVD is a wholly-owned subsidiary of EVC. M. Hawkes is a Vice
President and Director and Messrs. Dynner and O'Connor are Vice Presidents of
EVD.
CUSTODIAN. Investors Bank & Trust Company ("IBT"), 200 Clarendon Street,
Boston, MA 02116, serves as custodian to the Fund and Portfolio. IBT has the
custody of all cash and securities representing the Fund's interest in the
Portfolio, has custody of the Portfolio's assets, maintains the general ledger
of the Portfolio and the Fund and computes the daily net asset value of
interests in the Portfolio and the 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 Portfolio's investments,
receives and disburses all funds and performs various other ministerial duties
upon receipt of proper instructions from the Trust and the Portfolio. IBT also
provides services in connection with the preparation of shareholder reports
and the electronic filing of such reports with the SEC. EVC and its affiliates
and their officers and employees from time to time have transactions with
various banks, including IBT. It is Eaton Vance's opinion that the terms and
conditions of such transactions were not and will not be influenced by
existing or potential custodial or other relationships between the Fund or the
Portfolio and such banks.
INDEPENDENT ACCOUNTANTS. Deloitte & Touche LLP, 125 Summer Street, Boston,
Massachusetts, are the independent accountants of the Fund and the Portfolio,
providing audit services, tax return preparation, and assistance and
consultation with respect to the preparation of filings with the SEC.
TRANSFER AGENT. First Data Investor Services Group, P.O. Box 5123,
Westborough, MA 01581-5123, serves as transfer and dividend disbursing agent
for the Fund.
PURCHASING AND REDEEMING SHARES
CALCULATION OF NET ASSET VALUE. The net asset value of the Portfolio is
computed by IBT (as agent and custodian for the Portfolio) by subtracting the
liabilities of the Portfolio from the value of its total assets. The Fund and
the Portfolio will be closed for business and will not price their respective
shares or interests on the following business holidays: New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day.
Each investor in the Portfolio, including the Fund, may add to or reduce
its investment in the Portfolio on each day the Exchange is open for trading
("Portfolio Business Day") as of the close of regular trading on the Exchange
(the "Portfolio Valuation Time"). The value of each investor's interest in the
Portfolio will be determined by multiplying the net asset value of the
Portfolio by the percentage, determined on the prior Portfolio Business Day,
which represented that investor's share of the aggregate interests in the
Portfolio on such prior day. Any additions or withdrawals for the current
Portfolio Business Day will then be recorded. Each investor's percentage of
the aggregate interest in the Portfolio will then be recomputed as the
percentage equal to a fraction (i) the numerator of which is the value of such
investor's investment in the Portfolio as of the close of Portfolio Valuation
Time on the prior Portfolio Business Day plus or minus, as the case may be,
that amount of any additions to or withdrawals from the investor's investment
in the Portfolio on the current Portfolio Business Day, and (ii) the
denominator of which is the aggregate net asset value of the Portfolio as of
the Portfolio Valuation Time on the prior Portfolio Business Day plus or
minus, as the case may be, the amount of the net additions to or withdrawals
from the aggregate investment in the Portfolio on the current Portfolio
Business Day by all investors in the Portfolio. The percentage so determined
will then be applied to determine the value of the investor's interest in the
Portfolio for the current Portfolio Business Day.
The Trustees of the Portfolio have established the following procedures
for the fair valuation of the Portfolio'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. 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, the mean between the last bid
and asked price. 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.
Generally, trading in the foreign securities owned by the Portfolio 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 Portfolio's shares generally 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 Portfolio's net asset value (unless the Portfolio
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 Portfolio will be valued in U.S. dollars;
such values will be computed by the custodian based on foreign currency
exchange rate quotations supplied by Reuters Information Service.
ADDITIONAL INFORMATION ABOUT PURCHASES. Fund shares are continuously offered
through investment dealers which have entered agreements with the principal
underwriter. The public offering price is the net asset value next computed
after receipt of the order.
SUSPENSION OF SALES. The Trust may, in its absolute discretion, suspend,
discontinue or limit the offering of one or more of its classes of shares at
any time. In determining whether any such action should be taken, the Trust's
management intends to consider all relevant factors, including (without
limitation) the size of the Fund or class, the investment climate and market
conditions, the volume of sales and redemptions of shares.
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. 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 net asset value per 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 securities. Securities determined to be acceptable
should be transferred via book entry or physically delivered, in proper form
for transfer, through an investment dealer, together with a completed and
signed Letter of Transmittal in approved form (available from investment
dealers). Investors who are contemplating an exchange of securities for
shares, 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
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.
TAX-SHELTERED RETIREMENT PLANS. Fund shares 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 recordkeepers and not by the principal underwriter. Under all
plans, dividends and distributions will be automatically reinvested in
additional shares.
ADDITIONAL INFORMATION ABOUT REDEMPTIONS. The right to redeem shares of the
Fund 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 SEC, or during any emergency as determined by the SEC which
makes it impracticable for the Portfolio to dispose of its securities or value
its assets, or during any other period permitted by order of the SEC for the
protection of investors.
While normally payments will be made in cash for redeemed shares, the
Trust, subject to compliance with applicable regulations, has reserved the
right to pay the redemption price of shares of the Fund, either totally or
partially, by a distribution in kind of readily marketable securities
withdrawn from the Portfolio. The securities so distributed would be valued
pursuant to the Portfolio's valuation procedures. If a shareholder received a
distribution in kind, the shareholder could incur brokerage or other charges
in converting the securities to cash.
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 that all distributions are reinvested at net asset value on the
reinvestment dates during the period and a complete redemption of the
investment at the end of the period.
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 investors in the Portfolio
including the 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 material 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 portfolio allocation, portfolio turnover
and holdings of the Portfolio may be included in advertisements and other
material furnished to present and prospective shareholders.
Information used in advertisements and in materials provided to present
and prospective shareholders may include descriptions of Eaton Vance and other
Fund and Portfolio service providers, their investment styles, other
investment products, personnel and Fund distribution channels.
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).
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).
Information in advertisements and material furnished to present and
prospective investors may include profiles of different types of investors
(i.e., investors with different goals and assets) and different investment
strategies for meeting specific financial goals. Such information may provide
hypothetical illustrations which include: results of various investment
strategies; performance of an investment in the Fund over various time
periods; and results of diversifying assets among several investments with
varying performance. Information in advertisements and material furnished to
present and prospective investors may also include quotations (including
editorial comments) and statistics concerning investing in securities, as well
as investing in particular types of securities and the performance of such
securities.
The Trust (or Principal Underwriter) may provide investors with
information on global investing, which may include descriptions, comparisons,
charts and/or illustrations of foreign and domestic equity market
capitalizations; returns obtained by foreign and domestic securities; and the
effects of globally diversifying an investment portfolio (including volatility
analysis and performance information). Such information may be provided for a
variety of countries over varying time periods.
The Trust (or Principal Underwriter) 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 intends to elect to be treated, and 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 any federal income or excise tax. Because the Fund invests its assets in
the Portfolio, the Portfolio normally must satisfy the applicable source of
income and diversification requirements in order for the Fund to also satisfy
these requirements.
Under current law, provided that the Fund qualifies as a RIC and the
Portfolio is treated as a partnership for Massachusetts and federal tax
purposes, neither the Fund nor the Portfolio should be liable for any income,
corporate excise or franchise tax in the Commonwealth of Massachusetts.
Certain foreign exchange gains and losses realized by the Portfolio and
allocated to the Fund in connection with the Portfolio's investments in
foreign securities and foreign currency related 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
Portfolio 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 or, in the case of certain contracts relating to
foreign currency, as ordinary income or loss. Positions of the Portfolio in
securities and offsetting options, futures or forward contracts may be treated
as "straddles" which are subject to tax rules that may cause deferral of
Portfolio losses, adjustments on the holding periods of Portfolio securities,
and other changes in the short-term or long-term characterization of capital
gains or losses, the effect of which may be to change 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 Portfolio 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.
The Portfolio anticipates that it will be subject to foreign taxes on its
income (including, in some cases, capital gains) from foreign securities. Tax
conventions between certain countries and the U.S. may reduce or eliminate
such taxes. If more than 50% of the Fund's total assets, taking into account
its allocable share of the Portfolio's total assets, at the close of any
taxable year of the Fund consists of stock or securities of foreign
corporations, the Fund may file an election with the Internal Revenue Service
(the "IRS") pursuant to which shareholders of the Fund will be required to (i)
include in ordinary gross income (in addition to taxable dividends actually
received) their pro rata shares of foreign income taxes paid by the Portfolio
and allocated to the Fund even though not actually received, and (ii) treat
such respective pro rata portions as foreign income taxes paid by them.
Shareholders may then deduct such pro rata portions of foreign income taxes in
computing their taxable incomes, or, alternatively, use them as foreign tax
credits, subject to applicable limitations, against their U.S. income taxes.
Shareholders who do not itemize deductions for federal income tax purposes
will not, however, be able to deduct their pro rata portion of foreign taxes
deemed paid by the Fund, although such shareholders will be required to
include their shares of such taxes in gross income. Shareholders who claim a
foreign tax credit for such foreign taxes may be required to treat a portion
of dividends received from the Fund as separate category income for purposes
of computing the limitations on the foreign tax credit. Tax-exempt
shareholders will ordinarily not benefit from this election. Each year that
the Fund files the election described above, its shareholders will be notified
of the amount of (i) each shareholder's pro rata share of foreign income taxes
paid by the Portfolio and allocated to the Fund and (ii) the portion of Fund
dividends which represents income from each foreign country. If the Fund does
not make this election, it may deduct its allocated share of such taxes in
computing its investment company taxable income.
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. All or a portion of a loss realized upon a
taxable disposition of Fund shares may be disallowed under "wash sale" rules
if other Fund shares are purchased (whether through reinvestment of dividends
or otherwise) within 30 days before or after the disposition. 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 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 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.
PORTFOLIO SECURITY TRANSACTIONS
Decisions concerning the execution of portfolio security transactions by
the Portfolio, including the selection of the market and the broker-dealer
firm, are made by the Adviser.
The Adviser places the portfolio security transactions of the Portfolio
and of certain other accounts managed by the Adviser for execution with many
broker-dealer firms. The Adviser uses its best efforts to obtain execution of
portfolio security transactions at prices which are advantageous to the
Portfolio and (when a disclosed commission is being charged) at reasonably
competitive commission rates. In seeking such execution, the Adviser will use
its best judgment in evaluating the terms of a transaction, and will give
consideration to various relevant factors, including without limitation the
full range and quality of the broker-dealer's services, the value of the
brokerage and research services provided, the responsiveness of the broker-
dealer to the Adviser, 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 this and 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 Portfolio 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 after involve the payment of
brokerage commissions, which may be 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 Portfolio
usually includes an undisclosed dealer markup or markdown. In an underwritten
offering the price paid by the Portfolio includes a disclosed fixed commission
or discount retained by the underwriter or dealer. Although commissions paid
on portfolio transactions will, in the judgment of the Adviser, 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 Portfolio and the Adviser's
other clients in part for providing brokerage and research services to the
Adviser.
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
Portfolio 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 the Adviser 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 the overall responsibilities which
the Adviser and its affiliates have for accounts over which they exercise
investment discretion. In making any such determination, the Adviser 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 in the investment advisory industry for the
advisers of investment companies, institutions and other investors to receive
research, analytical, 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, the Adviser may receive Research
Services from broker-dealer firms with which the Adviser places the portfolio
transactions of the Portfolio and from third parties with which these broker-
dealers have arrangements. These Research Services include such matters as
general economic, political, business and market information, and market
reviews, industry and company reviews, evaluations of securities and portfolio
strategies and transactions, proxy voting data and analysis services,
technical analysis of various aspects of the securities markets,
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 the Adviser 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 the Adviser 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 Portfolio is not reduced because the Adviser receives
such Research Services. The Adviser evaluates the nature and quality of the
various Research Services obtained through broker-dealer firms and attempts to
allocate sufficient portfolio security transactions to such firms to ensure
the continued receipt of Research Services which the Adviser believes are
useful or of value to it in rendering investment advisory services to its
clients.
The Portfolio and the Adviser may also receive Research Services from
underwriters and dealers in fixed price offerings, which Research Services are
reviewed and evaluated by the Adviser in connection with its investment
responsibilities. The investment companies sponsored by the Adviser or Eaton
Vance may allocate brokerage commissions to acquire information relating to
the performance, fees and expenses of such companies and other mutual funds,
which information is used by the Trustees of such companies to fulfill their
responsibility to oversee the quality of the services provided by various
entities, including the Adviser, to such companies. Such companies may also
pay cash for such information.
Subject to the requirement that the Adviser shall use its best efforts to
seek to execute portfolio security transactions of the Portfolio at
advantageous prices and at reasonably competitive commission rates or spreads,
the Adviser is authorized to consider as a factor in the selection of any
broker-dealer firm with whom 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 Portfolio may also be
appropriate for other investment accounts managed by the Adviser or its
affiliates. Whenever decisions are made to buy or sell securities by the
Portfolio and one or more of such other accounts simultaneously, the Adviser
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 Portfolio 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 the Adviser 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 Portfolio from time to
time, it is the opinion of the Trustees of the Trust and the Portfolio that
the benefits from the Adviser's organization outweigh any disadvantage that
may arise from exposure to simultaneous transactions.
For the fiscal years ended December 31, 1998, 1997 and 1996, the Portfolio
paid brokerage commissions of $ , $248,818 and $129,070, respectively,
with respect to portfolio security transactions. Of this amount, approximately
$ , $145,648 and $116,154, respectively, was paid in respect of
portfolio security transactions aggregating approximately $ ,
$25,034,388 and $16,622,828, respectively, to firms which provided some
Research Services to the Adviser's organization (although many of such firms
may have been selected in any particular transaction primarily because of
their execution capabilities).
FINANCIAL STATEMENTS
The audited financial statements of, and the independent auditors' reports
for the Portfolio, appear in the Fund's most recent annual report to
shareholders which is incorporated by reference into this SAI. A copy of the
Fund's annual report accompanies this SAI. Consistent with applicable law,
duplicate mailings of shareholder reports and of certain Fund information to
shareholders residing at the same address may be eliminated.
<PAGE>
PART C - OTHER INFORMATION
ITEM 23. EXHIBITS
(a)(1) Amended and Restated Declaration of Trust dated September 27,
1993, filed as Exhibit (1)(a) to Post-Effective Amendment No. 42
and incorporated herein by reference.
(2) Amendment to the Declaration of Trust dated June 23, 1997 filed
as Exhibit (1)(b) to Post-Effective Amendment No. 48 and
incorporated herein by reference.
(3) Amendment and Restatement of Establishment and Designation of
Series of Shares dated October 19, 1998 filed as Exhibit (a)(3)
to Post-Effective Amendment No. 52 and incorporated herein by
reference.
(4) Form of Amendment and Restatement of Establishment and
Designation of Series of Shares dated February 22, 1999 filed
herewith.
(b)(1) By-Laws filed as Exhibit (2)(a) to Post-Effective Amendment No.
42 and incorporated herein by reference.
(2) Amendment to By-Laws dated December 13, 1993 filed as Exhibit
(2)(b) to Post-Effective Amendment No. 42 and incorporated herein
by reference.
(c) Reference is made to Item 23(a) and 23(b) above.
(d) 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.
(e)(1)(a) Distribution Agreement between Eaton Vance Special Investment
Trust and Eaton Vance Distributors, Inc. effective June 23, 1997
with attached Schedule A filed as Exhibit (6)(a)(4) to
Post-Effective Amendment No. 48 and incorporated herein by
reference.
(b) Schedule A-1 dated November 17, 1997 filed as Exhibit
(6)(a)(4)(a) to Post-Effective Amendment No. 49 and incorporated
herein by reference.
(c) Schedule A-2 dated December 31, 1998 filed herewith.
(d) Form of Schedule A-3 dated February 22, 1999 filed herewith.
(2) Selling Group Agreement between Eaton Vance Distributors, Inc.
and Authorized Dealers filed as Exhibit (6)(b) to the
Post-Effective Amendment No. 61 and incorporated herein by
reference.
(f) 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).
(g)(1) Custodian Agreement with Investors Bank & Trust Company dated
March 24, 1994 filed as Exhibit (8) to Post-Effective Amendment
No. 42 and incorporated herein by reference.
C-1
<PAGE>
(2) Amendment to Custodian Agreement with Investors Bank & Trust
Company dated October 23, 1995 filed as Exhibit (8)(b) to
Post-Effective Amendment No. 43 and incorporated herein by
reference.
(3) Amendment to Master Custodian Agreement with Investors Bank &
Trust Company dated December 21, 1998 filed as Exhibit (g)(3) to
the Registration Statement of Eaton Vance Municipals Trust (File
Nos. 33-572, 811-4409) (Accession No. 0000950156-99-000050) and
incorporated herein by reference.
(h)(1)(a) Management Contract between Eaton Vance Special Investment Trust
(on behalf of certain of its series) and Eaton Vance Management
filed as Exhibit (5)(a)(1) to Post-Effective Amendment No. 48 and
incorporated herein by reference.
(b) Amended Schedule A-1 dated November 17, 1997 filed as Exhibit No.
(5)(a)(2) to Post-Effective Amendment No. 49 and incorporated
herein by reference.
(h)(2) Management Agreement between Eaton Vance Special Investment Trust
on behalf of Eaton Vance Institutional Short Term Treasury Fund
and Eaton Vance Management filed as Exhibit (h)(2) to
Post-Effective Amendment No. 52 and incorporated herein by
reference.
(h)(3)(a) Amended Administrative Services Agreement between Eaton Vance
Special Investment Trust (on behalf of each of its series listed
on Schedule A) and Eaton Vance Management dated June 19, 1995
filed as Exhibit (9) to Post-Effective Amendment No. 42 and
incorporated herein by reference.
(b) Amendment to Schedule A dated June 23, 1997 to the Amended
Administrative Services Agreement filed as Exhibit (9)(a)(2) to
Post-Effective Amendment No. 48 and incorporated herein by
reference.
(4) Transfer Agency Agreement dated January 1, 1998 filed as Exhibit
(k)(b) to the Registration Statement on Form N-2 of Eaton Vance
Advisers Senior Floating-Rate Fund (File Nos. 333-46853,
811-08671) (Accession No. 0000950156-98-000172) and incorporated
herein by reference.
(i) Opinion of Internal Counsel filed herewith.
(j) Not applicable
(k) Not applicable
(l) Not applicable
(m)(1) Eaton Vance Special Investment Trust Class A Service Plan adopted
June 23, 1997 with attached Schedule A effective June 23, 1997
filed as Exhibit (15)(a) to Post-Effective Amendment No. 48 and
incorporated herein by reference.
(a) Amended Schedule A effective December 31, 1998 filed as Exhibit
(m)(1)(a) to Post-Effective Amendment No. 52 and incorporated
herein by reference.
(2)(a) Eaton Vance Special Investment Trust Class A Distribution Plan
adopted June 23, 1997 with attached Schedule A effective June 23,
1997 filed as Exhibit (15)(b) to Post-Effective Amendment No. 48
and incorporated herein by reference.
C-2
<PAGE>
(b) Amended Schedule A-1 dated November 17, 1997 filed as Exhibit
(15)(b)(1) to Post-Effective Amendment No. 49 and incorporated
herein by reference.
(3)(a) Eaton Vance Special Investment Trust Class B Distribution Plan
adopted June 23, 1997 with attached Schedule A effective June 23,
1997 filed as Exhibit (15)(c) to Post-Effective Amendment No. 48
and incorporated herein by reference.
(b) Amended Schedule A-1 dated November 17, 1997 filed as Exhibit
(15)(c)(1) to Post-Effective Amendment No. 49 and incorporated
herein by reference.
(4) Eaton Vance Special Investment Trust Class C Distribution Plan
adopted June 23, 1997 with attached Schedule A effective June 23,
1997 filed as Exhibit (15)(d) to Post-Effective Amendment No. 48
and incorporated herein by reference.
(n) Not applicable
(o) Multiple Class Plan for Eaton Vance Funds dated June 23, 1997
filed as Exhibit (18) to Post-Effective Amendment No. 49 and
incorporated herein by reference.
(p)(1) Power of Attorney for Eaton Vance Special Investment Trust dated
June 23, 1997 filed as Exhibit (17)(a) to Post-Effective
Amendment No. 47 and incorporated herein by reference.
(2) Power of Attorney for Emerging Markets Portfolio dated February
14, 1997 filed as Exhibit (17)(b) to Post-Effective Amendment No.
46 and incorporated herein by reference.
(3) Power of Attorney for South Asia Portfolio dated February 14,
1997 filed as Exhibit (17)(c) to Post-Effective Amendment No. 46
and incorporated herein by reference.
(4) Power of Attorney for Special Investment Portfolio dated August
11, 1997 filed as Exhibit (17)(d) to Post-Effective Amendment No.
48 and incorporated herein by reference.
(5) Power of Attorney for Investors Portfolio dated August 11, 1997
filed as Exhibit (17)(e) to Post-Effective Amendment No. 48 and
incorporated herein by reference.
(6) Power of Attorney for Stock Portfolio dated August 11, 1997 filed
as Exhibit (17)(f) to Post-Effective Amendment No. 48 and
incorporated herein by reference.
(7) Power of Attorney for Total Return Portfolio dated August 11,
1997 filed as Exhibit (17)(g) to Post-Effective Amendment No. 48
and incorporated herein by reference.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL
Not applicable
ITEM 25. INDEMNIFICATION
Article IV of the Registrant's Amended and Restated Declaration of Trust
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.
C-3
<PAGE>
The distribution agreements of the Registrant also provide for reciprocal
indemnity of the principal underwriter, on the one hand, and the Trustees and
officers, on the other.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISERS
Reference is made to: (i) the information set forth under the caption
"Management and Organization" in the Statement of Additional Information; (ii)
the Eaton Vance Corp. 10-K filed under the Securities Exchange Act of 1934 (File
No. 1-8100); and (iii) the Form ADV of Eaton Vance (File No. 801-15930), BMR
(File No. 43127) and Lloyd George (File No. 801-40889) filed with the
Commission, all of which are incorporated herein by reference.
ITEM 27. PRINCIPAL UNDERWRITERS
(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 Advisers Senior Eaton Vance Municipals Trust II
Floating-Rate Fund Eaton Vance Mutual Funds Trust
Eaton Vance Growth Trust Eaton Vance Prime Rate Reserves
Eaton Vance Income Fund Eaton Vance Special Investment Trust
of Boston EV Classic Senior Floating-Rate Fund
Eaton Vance Investment Trust
Eaton Vance Municipals Trust
(b)
<TABLE>
<CAPTION>
<S> <C> <C>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address* with Principal Underwiter with Registrant
-----------------
Albert F. Barbaro Vice President None
Chris Berg Vice President None
Kate B. Bradshaw Vice President None
Mark Carlson Vice President None
Daniel C. Cataldo Vice President None
Raymond Cox Vice President None
Peter Crowley Vice President None
Mark P. Doman Vice President None
Alan R. Dynner Vice President Secretary
Richard A. Finelli Vice President None
Kelly Flynn Vice President None
James Foley Vice President None
Michael A. Foster Vice President None
William M. Gillen Senior Vice President None
Hugh S. Gilmartin Vice President None
James B. Hawkes Vice President and Director President and Trustee
Perry D. Hooker Vice President None
Brian Jacobs Senior Vice President None
Thomas P. Luka Vice President None
John Macejka Vice President None
Stephen Marks Vice President None
Joseph T. McMenamin Vice President None
Morgan C. Mohrman Senior Vice President None
James A. Naughton Vice President None
Joseph Nelson Vice President None
Mark D. Nelson Vice President None
Linda D. Newkirk Vice President None
James L. O'Connor Vice President Treasurer
Andrew Ogren Vice President None
Thomas Otis Secretary and Clerk None
George D. Owen, II Vice President None
Enrique M. Pineda Vice President None
F. Anthony Robinson Vice President None
Frances Rogell Vice President None
Jay S. Rosoff Vice President None
Benjamin A. Rowland, Vice President, Treasurer and Director None
Jr.
Stephen M. Rudman Vice President None
Kevin Schrader Vice President None
George V.F. Schwab, Vice President None
Jr.
Teresa A. Sheehan Vice President None
William M. Steul Vice President and Director None
Cornelius J. Sullivan Senior Vice President None
Peter Sykes Vice President None
David M. Thill Vice President None
John M. Trotsky Vice President None
Jerry Vainisi Vice President None
Chris Volf Vice President None
Wharton P. Whitaker President and Director None
Sue Wilder Vice President None
</TABLE>
C-4
<PAGE>
- ------------------------------------------
* Address is 24 Federal Street, Boston, MA 02110
(c) Not applicable
ITEM 28. 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, Eaton Vance Management, 24
Federal Street, Boston, MA 02110. 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 and Boston
Management and Research.
ITEM 29. MANAGEMENT SERVICES
Not applicable
ITEM 30. UNDERTAKINGS
Not applicable
C-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant 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 February 12, 1999.
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 on February 12, 1999.
Signature Title
- --------- -----
/s/ James B. Hawkes President (Chief Executive Officer) and
- ---------------------------- Trustee
James B. Hawkes
/s/ James L. O'Connor Treasurer (Principal Financial and
- ---------------------------- Accounting Officer)
James L. O'Connor
Jessica M. Bibliowicz* Trustee
- ----------------------------
Jessica M. Bibliowicz
Donald R. Dwight* Trustee
- ----------------------------
Donald R. Dwight
Samuel L. Hayes, III* Trustee
- ----------------------------
Samuel L. Hayes, III
Norton H. Reamer* Trustee
- ----------------------------
Norton H. Reamer
Lynn A. Stout* Trustee
- ----------------------------
Lynn A. Stout
John L. Thorndike* Trustee
- ----------------------------
John L. Thorndike
Jack L. Treynor* Trustee
- ----------------------------
Jack L. Treynor
*By: /s/ Alan R. Dynner
-----------------------
Alan R. Dynner (As attorney-in-fact)
C-6
<PAGE>
SIGNATURES
Emerging Markets Portfolio has duly caused this Amendment to the
Registration Statement on Form N-1A of Eaton Vance Special Investment Trust
(File No. 2-27962) to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Boston and the Commonwealth of Massachusetts on
February 12, 1999.
EMERGING MARKETS PORTFOLIO
By: HON. ROBERT LLOYD GEORGE*
-------------------------------------------
Hon. Robert Lloyd George, President
This Amendment to the Registration Statement on Form N-1A of Eaton Vance
Special Investment Trust (File No. 2-27962) has been signed below by the
following persons in the capacities on February 12, 1999.
Signature Title
- --------- -----
Hon. Robert Lloyd George* President (Chief Executive Officer)
- ------------------------------ and Trustee
Hon. Robert Lloyd George
/s/ James L. O'Connor Treasurer (Principal Financial and
- ------------------------------ Accounting Officer)
James L. O'Connor
Hon. Edward K.Y. Chen* Trustee
- ------------------------------
Hon. Edward K.Y. Chen
Donald R. Dwight* Trustee
- ------------------------------
Donald R. Dwight
/s/ James B. Hawkes Trustee
- ------------------------------
James B. Hawkes
Samuel L. Hayes, III* Trustee
- ------------------------------
Samuel L. Hayes, III
Norton H. Reamer* Trustee
- ------------------------------
Norton H. Reamer
*By: /s/ Alan R. Dynner
-------------------------
Alan R. Dynner (As attorney-in-fact)
C-7
<PAGE>
EXHIBIT INDEX
The following exhibits are filed as part of this amendment to the
Registration Statement pursuant to Rule 483 of Regulation C.
Exhibit No. Description
- ----------- -----------
(a)(4) Form of Amendment and Restatement of Establishment and
Designation of Series of Shares dated February 22, 1999.
(e)(1)(c) Schedule A-2 dated December 31, 1998.
(d) Form of Schedule A-3 dated February 22, 1999.
(i) Opinion of Internal Counsel.
C-8
<PAGE>
Exhibit 99.(a)(4)
FORM OF
EATON VANCE SPECIAL INVESTMENT TRUST
Amendment and Restatement
of
Establishment and Designation of Series of Shares
of Beneficial Interest, Without Par Value
(as amended and restated February 22, 1999)
WHEREAS, the Trustees of Eaton Vance Special Investment Trust, a
Massachusetts business trust (the "Trust"), have previously designated separate
series (or "Funds"); and
WHEREAS, the Trustees now desire to add one additional series, i.e., Eaton
Vance Institutional Emerging Markets Fund effective this date and to change the
name of one existing series (i.e., EV Traditional Emerging Growth Fund to Eaton
Vance Emerging Growth Fund) effective May 1, 1999, and to redesignate the series
or Funds pursuant to Section 5.1 of Article V of the Trust's Amended and
Restated Declaration of Trust dated September 27, 1993 (as further Amended) (the
"Declaration of Trust");
NOW, THEREFORE, the undersigned, being at least a majority of the duly
elected and qualified Trustees presently in office of the Trust, hereby divide
the shares of beneficial interest of the Trust into the following separate
series ("Funds"), each Fund to have the following special and relative rights:
1. The Funds shall be designated as follows:
Eaton Vance Balanced Fund
Eaton Vance Emerging Markets Fund
Eaton Vance Greater India Fund
Eaton Vance Growth & Income Fund
Eaton Vance Institutional Emerging Markets Fund
Eaton Vance Institutional Short Term Treasury Fund
Eaton Vance Special Equities Fund
Eaton Vance Utilities Fund
Eaton Vance Emerging Growth Fund (effective May 1, 1999)
2. Each Fund shall be authorized to invest in cash, securities, instruments
and other property as from time to time described in the Trust's then currently
effective registration statements under the Securities Act of 1933 and the
Investment Company Act of 1940. Each share of beneficial interest of each Fund
("share") shall be redeemable, shall be entitled to one vote (or fraction
thereof in respect of a fractional share) on matters on which shares of that
Fund shall be entitled to vote and shall represent a pro rata beneficial
interest in the assets allocated to that Fund, all as provided in the
Declaration of Trust. The proceeds of sales of shares of each Fund, together
with any income and gain thereon, less any diminution or expenses thereof, shall
irrevocably belong to such Fund, unless otherwise required by law. Each share of
a Fund shall be entitled to receive its pro rata share of net assets of that
Fund upon liquidation of that Fund.
3. Shareholders of each Fund shall vote separately as a class to the extent
provided in Rule 18f-2, as from time to time in effect, under the Investment
Company Act of 1940.
4. The assets and liabilities of the Trust shall be allocated among the
above-referenced Funds as set forth in Section 5.5 of Article V of the
Declaration of Trust, except as provided below:
(a) Costs incurred by each Fund in connection with its organization and
start-up, including Federal and state registration and qualification fees and
expenses of the initial public offering of such Fund's shares, shall (if
applicable) be borne by such Fund and deferred and amortized over the five year
period beginning on the date that such Fund commences operations.
<PAGE>
(b) Reimbursement required under any expense limitation applicable to the
Trust shall be allocated among those Funds whose expense ratios exceed such
limitation on the basis of the relative expense ratios of such Funds.
(c) The liabilities, expenses, costs, charges and reserves of the Trust
(other than the management and investment advisory fees or the organizational
expenses paid by the Trust) which are not readily identifiable as belonging to
any particular Fund shall be allocated among the Funds on an equitable basis as
determined by the Trustees.
5. The Trustees (including any successor Trustees) shall have the right at
any time and from time to time to reallocate assets and expenses or to change
the designation of any Fund now or hereafter created, or to otherwise change the
special and relative rights of any such Fund, and to terminate any Fund or add
additional Funds as provided in the Declaration of Trust.
6. Any Fund may merge or consolidate with any other corporation,
association, trust or other organization or may sell, lease or exchange all or
substantially all of its property, including its good will, upon such terms and
conditions and for such consideration when and as authorized by the Trustees;
and any such merger, consolidation, sale, lease or exchange shall be deemed for
all purposes to have been accomplished under and pursuant to the statutes of the
Commonwealth of Massachusetts. The Trustees may also at any time sell and
convert into money all the assets of any Fund. Upon making provision for the
payment of all outstanding obligations, taxes and other liabilities, accrued or
contingent, of such Fund, the Trustees shall distribute the remaining assets of
such Fund ratably among the holders of the outstanding shares. Upon completion
of the distribution of the remaining proceeds or the remaining assets as
provided in this paragraph 6, the Fund shall terminate and the Trustees shall be
discharged of any and all further liabilities and duties hereunder with respect
to such Fund and the right, title and interest of all parties with respect to
such Fund shall be canceled and discharged.
7. The Declaration of Trust authorizes the Trustees to divide each Fund and
any other series of shares into two or more classes and to fix and determine the
relative rights and preferences as between, and all provisions applicable to,
each of the different classes so established and designated by the Trustees.
Each Fund (except Eaton Vance Emerging Growth Fund, Eaton Vance Institutional
Emerging Markets Fund and Eaton Vance Institutional Short Term Treasury Fund)
shall have classes of shares established and designated as Class A, Class B,
Class C and Class I shares, and the Trustees may designate additional classes in
the future. For purposes of allocating liabilities among classes, each class of
that Fund shall be treated in the same manner as a separate series.
Dated: February 22, 1999
- ---------------------------- ---------------------------
Jessica M. Bibliowicz Norton H. Reamer
- ---------------------------- ---------------------------
Donald R. Dwight Lynn A. Stout
- ---------------------------- ---------------------------
James B. Hawkes Jack L. Treynor
- ----------------------------
Samuel L. Hayes, III
2
<PAGE>
Exhibit 99.(e)(1)(d)
FORM OF
SCHEDULE A-3
EATON VANCE SPECIAL INVESTMENT TRUST
DISTRIBUTION AGREEMENT
EFFECTIVE: FEBRUARY 22, 1999
Name of Fund Prior Agreements Relating to Class B and/or
Adopting this Agreement Class C Assets
- ----------------------- -------------------------------------------
Eaton Vance Institutional
Emerging Markets Fund N/A
<PAGE>
Exhibit 99.(e)(1)(c)
SCHEDULE A-2
EATON VANCE SPECIAL INVESTMENT TRUST
DISTRIBUTION AGREEMENT
EFFECTIVE: DECEMBER 31, 1998
Name of Fund Prior Agreements Relating to Class B and/or
Adopting this Agreement Class C Assets
- ----------------------- -------------------------------------------
Eaton Vance Institutional
Short Term Treasury Fund N/A
<PAGE>
Exhibit 99.(i)
Exhibit (i)
Eaton Vance Management
24 Federal Street
Boston, MA 02110
Telephone: (617) 482-8260
Telecopy: (617) 338-8054
February 12, 1999
Eaton Vance Special Investment Trust
24 Federal Street
Boston, MA 02110
Ladies and Gentlemen:
Eaton Vance Special Investment Trust (the "Trust") is a voluntary
association (commonly referred to as a "business trust") established under
Massachusetts law with the powers and authority set forth under its Declaration
of Trust dated March 27, 1989, as amended (the "Declaration of Trust").
I am of the opinion that all legal requirements have been complied with in
the creation of the Trust, and that said Declaration of Trust is legal and
valid.
The Trustees of the Trust have the powers set forth in the Declaration of
Trust, subject to the terms, provisions and conditions therein provided. As
provided in the Declaration of Trust, the Trustees may authorize one or more
series or classes of shares, without par value, and the number of shares of each
series or class authorized is unlimited. The series and classes of shares
established and designated as of the date hereof are identified on Appendix A
hereto.
Under the Declaration of Trust, the Trustees may from time to time issue
and sell or cause to be issued and sold shares of the Trust for cash or for
property. All such shares, when so issued, shall be fully paid and nonassessable
by the Trust.
I have examined originals, or copies, certified or otherwise identified to
my satisfaction, of such certificates, records and other documents as we have
deemed necessary or appropriate for the purpose of this opinion.
Based upon the foregoing, and with respect to Massachusetts law (other than
the Massachusetts Uniform Securities Act), only to the extent that Massachusetts
law may be applicable and without reference to the laws of the other several
states or of the United States of America, I am of the opinion that under
existing law:
1. The Trust is a trust with transferable shares of beneficial interest
organized in compliance with the laws of the Commonwealth of Massachusetts, and
the Declaration of Trust is legal and valid under the laws of the Commonwealth
of Massachusetts.
<PAGE>
Eaton Vance Special Investment Trust
February 12, 1999
Page 2
2. Shares of beneficial interest of the Trust registered by Form N-1A may
be legally and validly issued in accordance with the Declaration of Trust upon
receipt of payment in compliance with the Declaration of Trust and, when so
issued and sold, will be fully paid and nonassessable by the Trust.
I am a member of the Massachusetts bar and have acted as internal legal
counsel to the Trust in connection with the registration of shares.
I hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to Post-Effective Amendment No. 52 to the
Trust's Registration Statement on Form N-1A pursuant to the Securities Act of
1933, as amended.
Very truly yours,
/s/ Maureen A. Gemma
--------------------------------
Maureen A. Gemma, Esq.
Vice President
<PAGE>
Appendix A
Established and Designated Series* of the Trust
Eaton Vance Balanced Fund
(formerly Eaton Vance Investors Fund)
Eaton Vance Emerging Markets Fund
Eaton Vance Greater India Fund
Eaton Vance Growth & Income Fund
(formerly Eaton Vance Stock Fund)
Eaton Vance Institutional Emerging Markets Fund
Eaton Vance Institutional Short Term Treasury Fund
Eaton Vance Russia and Eastern Europe Fund
Eaton Vance Special Equities Fund
Eaton Vance Utilities Fund
(formerly Eaton Vance Total Return Fund)
EV Traditional Emerging Growth Fund
- ----------------------------
* Each Series is authorized to issue Class A, Class B, Class C and Class I
shares.
