<PAGE>
[LOGO]
[GRAPHIC]
SEMIANNUAL REPORT JUNE 30, 2000
[GRAPHIC] EATON VANCE
EMERGING MARKETS
FUND
[GRAPHIC]
[GRAPHIC] [LOGO]
<PAGE>
EATON VANCE EMERGING MARKETS FUND AS OF JUNE 30, 2000
--------------------------------------------------------------------------------
INVESTMENT UPDATE
--------------------------------------------------------------------------------
Hon. Jacob Rees-Mogg
Co-Portfolio Manager
[PHOTO]
Investment Environment
--------------------------------------------------------------------------------
- Rising interest rates and a nine-year high in oil prices have resulted in
lower economic growth for emerging markets and weaker corporate profits. While
the spike in oil prices has benefited selected countries - including
Venezuela, Russia and Mexico - for most emerging nations, it has brought
expanding current account deficits.
- While some Asian economies suffered from slowing worldwide demand, China
celebrated gaining Permanent Normal Trade Status with the U.S. China has
enjoyed rising retail sales and industrial production, providing a boost to
its domestic economy.
- In Latin America, Mexico signed a free-trade pact with the European Union and
maintained strong GDP growth with lower inflation. Brazil has enacted further
economic reforms, lowered interest rates and brought inflation to its lowest
level in 40 years.
The Fund
--------------------------------------------------------------------------------
PERFORMANCE FOR THE PAST SIX MONTHS
- The Fund's Class A shares had a total return of -6.40% during the six
months ended June 30, 2000.(1) This return resulted from a decrease in net
asset value per share (NAV) to $13.74 on June 30, 2000 from $14.68 on
December 31, 1999.
- The Fund's Class B shares had a total return of -6.75% during the six months
ended June 30, 2000.(1) This return resulted from a decrease in net asset
value per share (NAV) to $13.53 on June 30, 2000 from $14.51 on
December 31, 1999.
- Jacob Rees-Mogg, of Lloyd George Management, will assume sole management
responsibilities for the Portfolio, effective August 21, 2000. Kiersten
Christensen, who has co-managed the Portfolio as a part of the Lloyd George
investment team, will join Eaton Vance Management as an analyst specializing
in Asia, southern Europe and the medical products and health care industries.
RECENT PORTFOLIO DEVELOPMENTS
- The Portfolio's largest industry weightings at June 30, 2000 were telephone
utilities, banks and money services, and investment services - industries that
have tended to be resilient in a slower economic environment. Latin America
remained the Portfolio's largest regional focus, while the Portfolio reduced
its exposure to export-dependent Asia.
- In Latin America, Compania Brasiliera de Distribuicao is one of Brazil's
largest grocery chains and has been a prime beneficiary of a stronger consumer
economy. In Mexico, Telefonos de Mexico (Telmex) is the leading provider of
fixed-line and cellular phone services. The company has enjoyed an additional
revenue surge from sales of Internet, paging and data transmission services.
- In East Asia, the Portfolio's largest investment was Li & Fung Ltd., a
manufacturing outsourcing firm. The company continued to widen its client base
and increase its share of the Asian market. Elsewhere in Asia, the Portfolio
reduced its investments in technology and Internet-related stocks. However,
management maintained positions in companies that are low-cost producers in
technology growth areas, including Sam-sung Electronics of Korea and Taiwan
Semiconductor.
- Telecommunications, which is among the fastest-growing emerging market
sectors, continued to play a prominent role in the Portfolio. In addition to
existing holdings in Mexico's Telmex and Korea's SK Telecom, the Portfolio
established investments in newly privatized areas, including Brazil's
Embratel, Hungary's Magyar Tavkozlesi (Matav) and China Unicom.
- In a slowing economy, the Portfolio increased its investments in what we view
as defensive stocks. Among these were Brahma, a Brazilian brewer that ranks
among the world's largest beverage companies. Another such holding, President
Chain Stores, operates 2,200 convenience stores in Taiwan and has recently
embarked on a joint venture with Starbucks.
--------------------------------------------------------------------------------
MUTUAL FUND SHARES ARE NOT INSURED BY THE FDIC AND ARE NOT DEPOSITS OR OTHER
OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE SUBJECT
TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL INVESTED.
--------------------------------------------------------------------------------
FUND INFORMATION
AS OF JUNE 30, 20001
<TABLE>
<CAPTION>
PERFORMANCE(2) Class A Class B
------------------------------------------------------------------------------
<S> <C> <C>
Average Annual Total Returns (at net asset value)
------------------------------------------------------------------------------
One Year 29.26% 28.37%
Five Years 6.85 6.25
Life of Fund+ 7.06 6.40
<CAPTION>
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
--------------------------------------------------------------------------------
<S> <C> <C>
One Year 21.81% 23.37%
Five Years 5.59 5.93
Life of Fund+ 5.93 6.27
</TABLE>
+ Inception dates: Class A: 12/8/94; Class B: 11/30/94.
<TABLE>
<CAPTION>
TEN LARGEST EQUITY HOLDINGS(3)
--------------------------------------------------------------------------------
<S> <C>
Li & Fung Ltd. 6.9%
SK Telecom 3.9
OTP Bank GDR 3.6
Taiwan Semiconductor 3.6
Compania Brasileira de Distribuicao 3.5
Brahma 3.4
Samsung Electronics 3.4
Hurriyet Gazeticlik 2.8
Telefonos de Mexico 2.7
Television Broadcasts 2.7
</TABLE>
(1) These returns do not include the 5.75% maximum sales charge for the Fund's
Class A shares or the applicable contingent deferred sales charges (CDSC)
for Class B shares. (2)Returns are historical and are calculated by
determining the percentage change in net asset value with all distributions
reinvested. SEC average annual returns for Class A reflect a 5.75% sales
charge; for Class B, returns reflect applicable CDSC based on the following
schedule: 5% - 1st and 2nd years; 4% - 3rd year; 3% - 4th year; 2% - 5th
year; 1% - 6th year. Class A shares redeemed within 3 months of purchase,
including exchanges, will be subject to a 1% early redemption fee. (3)Based
on market value. Ten largest holdings represent 36.5% of the Portfolio's net
assets. Holdings are subject to change.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
2
<PAGE>
EATON VANCE EMERGING MARKETS FUND AS OF JUNE 30, 2000
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF JUNE 30, 2000
<S> <C>
Assets
-----------------------------------------------------
Investment in Emerging Markets
Portfolio, at value
(identified cost, $8,071,338) $11,400,302
-----------------------------------------------------
TOTAL ASSETS $11,400,302
-----------------------------------------------------
Liabilities
-----------------------------------------------------
Payable for Fund shares redeemed $ 7,442
Payable to affiliate for Trustees' fees 27
Payable to the Investment Adviser 2,789
Payable to the Manager 1,860
Accrued expenses 22,094
-----------------------------------------------------
TOTAL LIABILITIES $ 34,212
-----------------------------------------------------
NET ASSETS $11,366,090
-----------------------------------------------------
Sources of Net Assets
-----------------------------------------------------
Paid-in capital $10,661,054
Accumulated net realized loss from
Portfolio (computed on the basis of
identified cost) (2,481,340)
Accumulated net investment loss (142,588)
Net unrealized appreciation from
Portfolio (computed on the basis of
identified cost) 3,328,964
-----------------------------------------------------
TOTAL $11,366,090
-----------------------------------------------------
Class A Shares
-----------------------------------------------------
NET ASSETS $ 3,909,692
SHARES OUTSTANDING 284,619
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 13.74
MAXIMUM OFFERING PRICE PER SHARE
(100 DIVIDED BY 94.25 of $13.74) $ 14.58
-----------------------------------------------------
Class B Shares
-----------------------------------------------------
NET ASSETS $ 7,456,398
SHARES OUTSTANDING 551,083
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 13.53
-----------------------------------------------------
</TABLE>
On sales of $50,000 or more, the offering price of Class A shares is reduced.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JUNE 30, 2000
<S> <C>
Investment Income
---------------------------------------------------
Dividends allocated from Portfolio
(net of foreign taxes, $2,684) $ 44,712
Expenses allocated from Portfolio (77,171)
---------------------------------------------------
NET INVESTMENT LOSS FROM PORTFOLIO $ (32,459)
---------------------------------------------------
Expenses
---------------------------------------------------
Management fee $ 14,552
Trustees fees and expenses 30
Distribution and service fees
Class A 10,676
Class B 35,740
Registration fees 13,832
Transfer and dividend disbursing
agent fees 11,261
Printing and postage 7,817
Legal and accounting services 6,768
Custodian fee 5,519
Miscellaneous 4,038
---------------------------------------------------
TOTAL EXPENSES $ 110,233
---------------------------------------------------
Deduct --
Reduction of custodian fee $ 1,333
Preliminary reduction of management
fee 1,526
---------------------------------------------------
TOTAL EXPENSE REDUCTIONS $ 2,859
---------------------------------------------------
NET EXPENSES $ 107,374
---------------------------------------------------
NET INVESTMENT LOSS $(139,833)
---------------------------------------------------
Realized and Unrealized
Gain (Loss) from Portfolio
---------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $ 124,662
Foreign currency and forward foreign
currency exchange
contract transactions (3,536)
---------------------------------------------------
NET REALIZED GAIN $ 121,126
---------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $(761,231)
Foreign currency and forward foreign
currency exchange contracts (390)
---------------------------------------------------
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) $(761,621)
---------------------------------------------------
NET REALIZED AND UNREALIZED LOSS $(640,495)
---------------------------------------------------
NET DECREASE IN NET ASSETS FROM
OPERATIONS $(780,328)
---------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
3
<PAGE>
EATON VANCE EMERGING MARKETS FUND AS OF JUNE 30, 2000
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INCREASE (DECREASE) JUNE 30, 2000 YEAR ENDED
IN NET ASSETS (UNAUDITED) DECEMBER 31, 1999
<S> <C> <C>
-----------------------------------------------------------------------------
From operations --
Net investment loss $ (139,833) $ (109,320)
Net realized gain 121,126 834,554
Net change in unrealized
appreciation (depreciation) (761,621) 4,456,341
-----------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS $ (780,328) $ 5,181,575
-----------------------------------------------------------------------------
Transactions in shares of beneficial interest --
Proceeds from sale of shares
Class A $ 1,053,331 $ 3,068,265
Class B 2,063,456 1,379,734
Cost of shares redeemed
Class A (1,406,904) (3,774,533)
Class B (910,825) (1,637,478)
-----------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM FUND SHARE TRANSACTIONS $ 799,058 $ (964,012)
-----------------------------------------------------------------------------
NET INCREASE IN NET ASSETS $ 18,730 $ 4,217,563
-----------------------------------------------------------------------------
Net Assets
-----------------------------------------------------------------------------
At beginning of period $ 11,347,360 $ 7,129,797
-----------------------------------------------------------------------------
AT END OF PERIOD $ 11,366,090 $ 11,347,360
-----------------------------------------------------------------------------
Accumulated net
investment loss included
in net assets
-----------------------------------------------------------------------------
AT END OF PERIOD $ (142,588) $ (2,755)
-----------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
EATON VANCE EMERGING MARKETS FUND AS OF JUNE 30, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2000 ------------------------
(UNAUDITED) 1999 1998
<S> <C> <C> <C>
------------------------------------------------------------------------------
Net asset value -- Beginning
of period $14.680 $ 8.060 $11.970
------------------------------------------------------------------------------
Income (loss) from operations
------------------------------------------------------------------------------
Net investment loss $(0.156) $(0.112) $(0.146)
Net realized and unrealized
gain (loss) (0.784) 6.732 (3.764)
------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $(0.940) $ 6.620 $(3.910)
------------------------------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $13.740 $14.680 $ 8.060
------------------------------------------------------------------------------
TOTAL RETURN(1) (6.40)% 82.13% (32.66)%
------------------------------------------------------------------------------
Ratios/Supplemental Data+
------------------------------------------------------------------------------
Net assets, end of period
(000's omitted) $ 3,910 $ 4,482 $ 3,066
Ratios (As a percentage of
average daily net assets):
Net expenses(2) 3.11%(3) 3.02% 3.25%
Net expenses after
custodian fee
reduction(2) 2.87%(3) 2.95% 2.95%
Net investment loss (2.11)%(3) (1.02)% (1.34)%
Portfolio Turnover of the
Portfolio 28% 95% 117%
------------------------------------------------------------------------------
+ The operating expenses of the Fund and the Portfolio may reflect a reduction
of the investment adviser fee and/or management fee, an allocation of
expenses to the Investment Adviser, and/or Manager, or both. Had such
actions not been taken, the ratios and net investment loss per share would
have been as follows:
Ratios (As a percentage of
average daily net assets):
Expenses(2) 3.27%(3) 4.70% 3.65%
Expenses after custodian
fee reduction(2) 3.03%(3) 4.63% 3.35%
Net investment loss (2.27)%(3) (2.70)% (1.74)%
Net investment loss per share $(0.168) $(0.296) $(0.188)
------------------------------------------------------------------------------
</TABLE>
(1) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return
is not computed on an annualized basis.
(2) Includes the Fund's share of the Portfolio's allocated expenses.
(3) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
EATON VANCE EMERGING MARKETS FUND AS OF JUNE 30, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2000 --------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of period $14.510 $ 7.990 $11.910 $12.720 $10.050 $ 9.960
--------------------------------------------------------------------------------------------------------------
Income (loss) from operations
--------------------------------------------------------------------------------------------------------------
Net investment loss $(0.168) $(0.159) $(0.236) $(0.012) $(0.143) $(0.268)
Net realized and unrealized
gain (loss) (0.812) 6.679 (3.684) (0.436) 2.988 0.358
--------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $(0.980) $ 6.520 $(3.920) $(0.448) $ 2.845 $ 0.090
--------------------------------------------------------------------------------------------------------------
Less distributions
--------------------------------------------------------------------------------------------------------------
From net realized gain $ -- $ -- $ -- $ -- $(0.175) $ --
In excess of net realized gain -- -- -- (0.362) -- --
--------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ -- $ -- $ -- $(0.362) $(0.175) $ --
--------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $13.530 $14.510 $ 7.990 $11.910 $12.720 $10.050
--------------------------------------------------------------------------------------------------------------
TOTAL RETURN(1) (6.75)% 81.60% (32.91)% (3.48)% 28.49% 0.90%
--------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
--------------------------------------------------------------------------------------------------------------
Net assets, end of period
(000's omitted) $ 7,456 $ 6,866 $ 4,064 $ 9,074 $ 6,725 $ 1,801
Ratios (As a percentage of
average daily net assets):
Net expenses(2) 3.59%(3) 3.47% 3.70% 3.50% 3.41% 6.19%
Net expenses after
custodian fee
reduction(2) 3.35%(3) 3.40% 3.40% 3.32% 3.19% 6.19%
Net investment loss (2.57)%(3) (1.59)% (1.79)% (1.92)% (1.76)% (4.64)%
Portfolio Turnover of the
Portfolio 28% 95% 117% 160% 125% 98%
--------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Fund and the Portfolio may reflect a reduction of the investment adviser fee
and/or management fee, an allocation of expenses to the Investment Adviser, and/or Manager, or both. Had
such actions not been taken, the ratios and net investment loss per share would have been as follows:
Ratios (As a percentage of
average daily net assets):
Expenses(2) 3.75%(3) 5.15% 4.10% 3.79% 4.52% 11.35%
Expenses after custodian
fee reduction(2) 3.51%(3) 5.08% 3.80% 3.61% 4.30% 11.35%
Net investment loss (2.73)%(3) (3.27)% (2.19)% (2.21)% (2.87)% (9.80)%
Net investment loss per share $(0.178) $(0.327) $(0.289) $(0.014) $(0.233) $(0.566)
--------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return
is not computed on an annualized basis.
(2) Includes the Fund's share of the Portfolio's allocated expenses.
(3) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
EATON VANCE EMERGING MARKETS FUND AS OF JUNE 30, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1 Significant Accounting Policies
-------------------------------------------
Eaton Vance Emerging Markets Fund (the Fund) is a mutual fund seeking
long-term capital appreciation through investment in a portfolio of equity
securities of companies in countries with emerging markets. The Fund is a
diversified series of Eaton Vance Special Investment Trust (the Trust). The
Trust is an entity of the type commonly known as a Massachusetts business
trust and is registered under the Investment Company Act of 1940, as amended,
as an open-end management investment company. The Fund offers two classes of
shares. Class A shares are generally sold subject to a sales charge imposed
at the time of purchase. Class B shares are sold at net asset value and are
subject to a contingent deferred sales charge (see Note 6). Each class
represents a pro rata interest in the Fund, but votes separately on
class-specific matters and (as noted below) is subject to different expenses.
Realized and unrealized gains and losses and net investment income, other
than class specific expenses, are allocated daily to each class of shares
based on the relative net assets of each class to the total net assets of the
Fund. Each class of shares differs in its distribution plan and certain other
class specific expenses. The Fund invests all of its investable assets in
interests in Emerging Markets Portfolio (the Portfolio), a New York Trust,
having the same investment objective as the Fund. The value of the Fund's
investment in the Portfolio reflects the Fund's proportionate interest in the
net assets of the Portfolio (67.7% at June 30, 2000). The performance of the
Fund is directly affected by the performance of the Portfolio. The financial
statements of the Portfolio, including the portfolio of investments, are
included elsewhere in this report and should be read in conjunction with the
Fund's financial statements.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
A Investment Valuation -- Valuation of securities by the Portfolio is discussed
in Note 1A of the Portfolio's Notes to Financial Statements which are
included elsewhere in this report.
B Income -- The Fund's net investment income consists of the Fund's pro-rata
share of the net investment income of the Portfolio, less all actual and
accrued expenses of the Fund determined in accordance with generally accepted
accounting principles.
C Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
to the Fund and the Portfolio. Pursuant to the respective custodian
agreements, IBT receives a fee reduced by credits which are determined based
on the average daily cash balances the Fund or the Portfolio maintains with
IBT. All significant credit balances used to reduce the Fund's custodian fees
are reported as a reduction of total expenses in the Statement of Operations.
D Federal Taxes -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders each year all of its net investment income, and
any net realized capital gains. Accordingly, no provision for federal income
or excise tax is necessary. At December 31, 1999, the Fund, for federal
income tax purposes had a capital loss carryover of $2,716,368 which will
reduce the taxable income arising from future net realized gains on
investments, if any, to the extent permitted by the Internal Revenue Code,
and thus will reduce the amount of the distributions to shareholders which
would otherwise be necessary to relieve the Fund of any liability for federal
income or excise tax. The capital loss carryover expires on December 31,
2006. Additionally, at December 31, 1999, net currency losses of $2,755
attributable to security transactions incurred after October 31, 1999, are
treated as arising on the first day of the Fund's next taxable year.
E Other -- Investment transactions are accounted for on a trade-date basis.
F Use of Estimates -- The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of income and expense during the reporting period. Actual results could
differ from those estimates.
G Interim Financial Statements -- The interim financial statements relating to
June 30, 2000 and for the six months then ended have not been audited by
independent certified public accountants, but in the opinion of the Fund's
management, reflect all adjustments, consisting only of normal recurring
adjustments, necessary for the fair presentation of the financial statements.
2 Distributions to Shareholders
-------------------------------------------
It is the present policy of the Fund to make at least one distribution
annually (normally in December) of all or substantially all of the net
investment income allocated to the Fund by the Portfolio, less the Fund's
direct and
7
<PAGE>
EATON VANCE EMERGING MARKETS FUND AS OF JUNE 30, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
allocated expenses and to distribute at least annually all or substantially
all of the net realized capital gains (reduced by any available capital loss
carryforwards from prior years) allocated by the Portfolio to the Fund, if
any. Shareholders may reinvest all distributions in shares of the Fund
without a sales charge at the per share net asset value as of the close of
business on the ex-dividend date. The Fund distinguishes between
distributions on a tax basis and a financial reporting basis. Generally
accepted accounting principles require that only distributions in excess of
tax basis earnings and profits be reported in the financial statements as a
return of capital. Differences in the recognition or classification of income
between the financial statements and tax earnings and profits which result in
temporary over distributions for financial statement purposes are classified
as distributions in excess of net investment income or accumulated net
realized gains. Permanent differences between book and tax accounting are
reclassified to paid-in capital.
3 Shares of Beneficial Interest
-------------------------------------------
The Fund's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par
value). Such shares may be issued in a number of different series (such as
the Fund) and classes. Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000 YEAR ENDED
CLASS A (UNAUDITED) DECEMBER 31, 1999
<S> <C> <C>
-----------------------------------------------------------------------------
Sales 72,533 304,930
Redemptions (93,273) (379,809)
-----------------------------------------------------------------------------
NET DECREASE (20,740) (74,879)
-----------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000 YEAR ENDED
CLASS B (UNAUDITED) DECEMBER 31, 1999
<S> <C> <C>
-----------------------------------------------------------------------------
Sales 141,639 139,418
Redemptions (63,771) (174,921)
-----------------------------------------------------------------------------
NET INCREASE (DECREASE) 77,868 (35,503)
-----------------------------------------------------------------------------
</TABLE>
4 Management Fee and Other Transactions with Affiliates
-------------------------------------------
The management fee is earned by Eaton Vance Management (EVM) (the Manager) as
compensation for management and administration of the business affairs of the
Fund. The fee is based on a percentage of average daily net assets. For the
six months ended June 30, 2000, the fee was equivalent to 0.25% (annualized)
of the Fund's average daily net assets for such period and amounted to
$14,552. To reduce the net operating loss of the Fund, the Manager reduced
the management fee by $1,526. Except as to Trustees of the Fund who are not
members of EVM's organization, officers and Trustees receive remuneration for
their services to the Fund out of such management fee. Certain officers and
Trustees of the Fund and the Portfolio are officers of the above
organization. In addition, investment adviser and administrative fees are
paid by the Portfolio to Lloyd George Management (Bermuda) (the Adviser), and
to EVM and its affiliates. See Note 2 of the Portfolio's Notes to Financial
Statements, which are included elsewhere in this report.
5 Distribution Plans
-------------------------------------------
The Fund has in effect distribution plans for Class A (Class A Plan) and for
Class B (Class B Plan), (collectively, the Plans) pursuant to Rule 12b-1
under the Investment Company Act of 1940. The Plans require the Fund to pay
the Principal Underwriter, Eaton Vance Distributors, Inc. (EVD) an amount
equal to (a) 0.50% of that portion of the Fund's Class A shares average daily
net assets attributable to Class A shares of the Fund which have remained
outstanding for less than one year and (b) 0.25% of that portion of the
Fund's Class A average daily net assets which is attributable to Class A
shares of the Fund which have remained outstanding for more than one year and
an amount equal to 1/365 of 0.75% of the Fund's average daily net assets
attributable to Class B shares for providing ongoing distribution services
and facilities to the Fund. The Fund will automatically discontinue payments
attributable to Class B shares during any period in which there are no
outstanding Uncovered Distribution Charges, which are equivalent to the sum
of (i) 5% of the aggregate amount received by the Fund for the Class B shares
sold plus, (ii) interest calculated by applying the rate of 1% over the
prevailing prime rate to the outstanding balance of Uncovered Distribution
Charges of EVD, reduced by the aggregate amount of the contingent deferred
sales charge (see Note 6) and daily amounts theretofore paid to EVD. The Fund
paid or accrued $7,339 and $27,642 for Class A and Class B shares,
respectively, to EVD for the six months ended June 30, 2000, representing
0.34% (annualized) and 0.75% (annualized) of average daily net assets for
Class A and Class B shares, respectively. At June 30, 2000, the amount of
Uncovered Distribution Charges of EVD calculated under the Plan was
approximately $280,000 for Class B shares.
The Plans authorize the Fund to make payments of service fees to EVD,
investment dealers and other persons in
8
<PAGE>
EATON VANCE EMERGING MARKETS FUND AS OF JUNE 30, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
amounts not exceeding 0.25% of the Fund's average daily net assets
attributable to Class A and Class B shares for each fiscal year. The Trustees
initially implemented the Plan by authorizing the Fund to make quarterly
service fee payments to EVD and investment dealers equal to 0.25% per annum
of the Fund's average daily net assets attributable to Class A and Class B
shares based on the value of Fund shares sold by such persons and remaining
outstanding for at least one year. On October 4, 1999, the Trustees approved
service fee payments equal to 0.25% per annum of the Fund's average net
assets attributed to Class B shares for any fiscal year on shares of the Fund
sold on or after October 12, 1999. Service fee payments will be made for
personal services and/or the maintenance of shareholder accounts. Service
fees are separate and distinct from the sales commissions and distribution
fees payable by the Fund to EVD, and as such, are not subject to automatic
discontinuance when there are no outstanding Uncovered Distribution Charges
to EVD. The Fund paid or accrued service fees to EVD for the six months ended
June 30, 2000 in the amounts $3,337 and $8,098 for Class A shares and
Class B shares, respectively.
Certain officers and Trustees of the Fund are officers of the above
organization.
6 Contingent Deferred Sales Charge
-------------------------------------------
A contingent deferred sales charge (CDSC) generally is imposed on any
redemption of Class B shares made within six years of purchase. Generally,
the CDSC is based upon the lower of the net asset value at date of redemption
or date of purchase. No charge is levied on shares acquired by reinvestment
of dividends or capital gain distributions. The CDSC for Class B shares is
imposed at declining rates that begin at 5% in the first and second year of
redemption after purchase, declining one percentage point each subsequent
year. No CDSC is levied on shares which have been sold to EVD or its
affiliates or to their respective employees or clients and may be waived
under other certain limited conditions. CDSC charges are paid to EVD to
reduce the amount of Uncovered Distribution Charges calculated under the
Fund's Class B Distribution Plan. CDSC charges received when no Uncovered
Distribution Charges exist will be retained by the Fund. EVD received
approximately $15,000 of CDSC paid by shareholders for Class B shares for the
six months ended June 30, 2000. A CDSC of 1% is imposed on any redemption of
Class A shares made within 12 months of purchase that were acquired at net
asset value because the purchase amount was $1 million or more.
7 Investment Transactions
-------------------------------------------
Increases and decreases in the Fund's investment in the Portfolio aggregated
$3,174,474 and $2,380,948, respectively, for the six months ended June 30,
2000.
9
<PAGE>
EMERGING MARKETS PORTFOLIO AS OF JUNE 30, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED)
COMMON STOCKS -- 88.9%
<TABLE>
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
----------------------------------------------------------------------
Aircraft Manufacture -- 2.4%
----------------------------------------------------------------------
Embraer - Empresa Brasileira de
Aeronautica SA 65,000 $ 396,201
Brazil's regional aircraft manufacturer
----------------------------------------------------------------------
$ 396,201
----------------------------------------------------------------------
Banks and Money Services -- 12.6%
----------------------------------------------------------------------
China Everbright Pacific, Ltd. 304,000 $ 237,878
One of China's fastest growing banks
Grupo Financiero Banamex(1) 100,000 420,625
Mexico's largest private bank
OTP Bank Rt. GDR 11,805 607,957
Hungary's biggest bank
Sanlam Ltd. 90,000 106,406
South Africa's second largest life
assurer
Turkiye Garanti Bankasi A.S.(1) 36,521,723 441,478
The largest private sector bank in
Turkey
Unibanco GDR 11,000 316,250
Brazil's third largest private bank
----------------------------------------------------------------------
$ 2,130,594
----------------------------------------------------------------------
Beverages -- 4.8%
----------------------------------------------------------------------
Cia Cervejaria Brahma-sp ADR 34,000 $ 578,000
Largest beer brewer in Brazil and Latin
America
Vina Concha y Toro ADR 6,500 236,844
Wine producer/exporter
----------------------------------------------------------------------
$ 814,844
----------------------------------------------------------------------
Broadcasting and Cable -- 5.0%
----------------------------------------------------------------------
Television Broadcasts Ltd. 67,000 $ 446,919
Hong Kong's dominant Chinese-language TV
program provider
TV Azteca SA 30,000 395,625
Mexico's second largest television
company
----------------------------------------------------------------------
$ 842,544
----------------------------------------------------------------------
Communications Equipment -- 2.1%
----------------------------------------------------------------------
Grupo Televisa GDR(1) 5,167 $ 356,200
Largest Spanish speaking media and
broadcast company in the world. Based in
Mexico
----------------------------------------------------------------------
$ 356,200
----------------------------------------------------------------------
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
----------------------------------------------------------------------
Computer Software -- 2.8%
----------------------------------------------------------------------
Softline Ltd.(1) 252,085 $ 241,109
South Africa's top maker of small
business accounting software
Tecnomatix Technologies Ltd.(1) 16,907 230,358
Israeli company concentrating in
computer aided production equipment
technology
----------------------------------------------------------------------
$ 471,467
----------------------------------------------------------------------
Conglomerates -- 1.1%
----------------------------------------------------------------------
John Keells Holdings 3,061 $ 7,652
Sri Lankan conglomerate involved in tea,
hotels, and beverages
John Keells Holdings GDR 101,250 179,658
Sri Lankan conglomerate involved in tea,
hotels, and beverages
----------------------------------------------------------------------
$ 187,310
----------------------------------------------------------------------
Electrical / Electronics -- 3.9%
----------------------------------------------------------------------
Hyundai Electronics Industries Co.,
Ltd.(1) 16,000 $ 315,688
The world's largest DRAM manufacturer.
Based in Korea
Orbotech, Ltd.(1) 3,650 338,994
World leader in the manufacture of
automated optical inspection systems for
the printed circuit board industry.
Based in Israel
----------------------------------------------------------------------
$ 654,682
----------------------------------------------------------------------
Electronics - Semiconductors -- 5.3%
----------------------------------------------------------------------
Taiwan Semiconductor Manufacturing,
Co.(1) 125,952 $ 598,502
One of the world's largest contract
manufacturers of integrated circuits
(foundry) for third parties
Via Technologies, Inc.(1) 19,000 293,735
One of Taiwan's leading chipset
manufacturers
----------------------------------------------------------------------
$ 892,237
----------------------------------------------------------------------
Foods -- 5.9%
----------------------------------------------------------------------
Compania Brasileira de Distribuicao
Grupo Pao de Acurcar 18,500 $ 594,312
Supermarket chain
President Chain Store Corp. 106,200 397,494
Taiwanese operator of 7-11 convenience
stores and other consumer businesses
----------------------------------------------------------------------
$ 991,806
----------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
EMERGING MARKETS PORTFOLIO AS OF JUNE 30, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
----------------------------------------------------------------------
Insurance -- 1.0%
----------------------------------------------------------------------
Samsung Fire & Marine Insurance 6,250 $ 173,763
Korea's largest non-life insurance
company established in 1952 and
belonging to the Samsung Group
----------------------------------------------------------------------
$ 173,763
----------------------------------------------------------------------
Investment Services -- 7.0%
----------------------------------------------------------------------
Li & Fung, Ltd. 234,000 $ 1,170,660
Largest global intermediator between
garment suppliers and retailers
----------------------------------------------------------------------
$ 1,170,660
----------------------------------------------------------------------
Machinery -- 1.0%
----------------------------------------------------------------------
Siam Cement Co. Ltd.(1) 8,500 $ 159,694
Largest industrial and building material
producer in Thailand
----------------------------------------------------------------------
$ 159,694
----------------------------------------------------------------------
Media & Leisure -- 1.7%
----------------------------------------------------------------------
Corporacion Interamericana de
Entretenimiento S.A.(1) 75,040 $ 293,527
Mexican fully integrated entertainment
company comprising 15 subsidiaries
operating in North America, South
America and Europe
----------------------------------------------------------------------
$ 293,527
----------------------------------------------------------------------
Metals - Industrial -- 1.6%
----------------------------------------------------------------------
Hindalco Industries Ltd. GDR 13,300 $ 262,675
India's second largest aluminum producer
and lowest cost producer in the world
----------------------------------------------------------------------
$ 262,675
----------------------------------------------------------------------
Oil and Gas - Equipment and Services -- 2.2%
----------------------------------------------------------------------
Lukoil Oil Co. ADR 7,400 $ 377,529
Russia's largest oil producer
----------------------------------------------------------------------
$ 377,529
----------------------------------------------------------------------
Oil and Gas - Integrated -- 2.4%
----------------------------------------------------------------------
Surgutneftegaz ADR 30,000 $ 399,750
Russia's second largest oil company
----------------------------------------------------------------------
$ 399,750
----------------------------------------------------------------------
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
----------------------------------------------------------------------
Publishing -- 2.8%
----------------------------------------------------------------------
Hurriyet Gazetecilik ve Matbaacilik
AS(1) 48,629,010 $ 470,266
Turkey's most widely read newspaper
----------------------------------------------------------------------
$ 470,266
----------------------------------------------------------------------
Semiconductors -- 3.4%
----------------------------------------------------------------------
Samsung Electronics 1,720 $ 569,207
World's biggest and most profitable
semiconductor company
----------------------------------------------------------------------
$ 569,207
----------------------------------------------------------------------
Telecommunications Services -- 5.9%
----------------------------------------------------------------------
China Unicom Limited(1) 160,000 $ 339,679
China's second largest
telecommunications provider
SK Telecom Co., Ltd. 2,000 654,694
South Korea's largest mobile telecom
firm
----------------------------------------------------------------------
$ 994,373
----------------------------------------------------------------------
Telephone Utilities -- 14.0%
----------------------------------------------------------------------
Embratel Partipacoes ADR 13,340 $ 315,157
Largest long distance and data telecom
company in Brazil
Korea Telecom Corp. ADR 9,070 438,761
Monopolistic telecom service provider
for South Korea
Magyar Tavkozlesi Rt 11,998 419,930
The leading Hungarian telecommunications
source provider
Tele Norte Leste Participacoes ADR 16,756 395,860
One of Brazil's three fixed line holding
companies, located in the northeast of
Brazil
Telefonos de Mexico ADR 8,000 457,000
Largest telecom operator with interests
in local and long distance
telecommunications
Videsh Sanchar Nigam Ltd., GDR 21,500 338,625
India's monopoly international telephone
service provider
----------------------------------------------------------------------
$ 2,365,333
----------------------------------------------------------------------
Total Common Stocks
(identified cost $11,110,113) $14,974,662
----------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
EMERGING MARKETS PORTFOLIO AS OF JUNE 30, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
CONVERTIBLE PREFERRED STOCKS -- 0.3%
<TABLE>
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
----------------------------------------------------------------------
Banks and Money Centers -- 0.3%
----------------------------------------------------------------------
Siam Commercial Bank(1) 90,000 $ 45,948
The fourth largest bank in Thailand
----------------------------------------------------------------------
$ 45,948
----------------------------------------------------------------------
Total Convertible Preferred Stocks
(identified cost $63,235) $ 45,948
----------------------------------------------------------------------
</TABLE>
PREFERRED STOCKS -- 0.0%
<TABLE>
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
----------------------------------------------------------------------
Electric Utilities -- 0.0%
----------------------------------------------------------------------
Centrais Geradoras do Sul do Brasil
S.A.(1) 7,000,000 $ 8,502
This company is an electricity
generator.
----------------------------------------------------------------------
$ 8,502
----------------------------------------------------------------------
Total Preferred Stocks
(identified cost $25,810) $ 8,502
----------------------------------------------------------------------
</TABLE>
WARRANTS -- 0.1%
<TABLE>
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
----------------------------------------------------------------------
Banks and Money Services -- 0.1%
----------------------------------------------------------------------
Siam Commercial Bank(1) 90,000 $ 10,568
The fourth largest bank in Thailand
----------------------------------------------------------------------
$ 10,568
----------------------------------------------------------------------
Total Warrants
(identified cost $0) $ 10,568
----------------------------------------------------------------------
Total Investments -- 89.3%
(identified cost $11,199,158) $15,039,680
----------------------------------------------------------------------
Other Assets, Less Liabilities -- 10.7% $ 1,807,600
----------------------------------------------------------------------
Net Assets -- 100.0% $16,847,280
----------------------------------------------------------------------
</TABLE>
ADR-American Depositary Receipt
GDR-Global Depository Receipt
(1) Non-income producing security.
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
EMERGING MARKETS PORTFOLIO AS OF JUNE 30, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED)
COUNTRY CONCENTRATION OF PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
COUNTRY OF NET ASSETS VALUE
<S> <C> <C>
-------------------------------------------------------------------
Brazil 15.5% $2,604,284
Chile 1.4 236,844
China 1.4 237,878
Hong Kong 11.6 1,957,258
Hungary 6.1 1,027,887
India 3.6 601,300
Israel 3.4 569,352
Mexico 11.4 1,922,977
Republic of Korea 12.8 2,152,113
Russia 4.6 777,279
South Africa 2.1 347,514
Sri Lanka 1.1 187,310
Taiwan 7.6 1,289,731
Thailand 1.3 216,209
Turkey 5.4 911,744
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
EMERGING MARKETS PORTFOLIO AS OF JUNE 30, 2000
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF JUNE 30, 2000
<S> <C>
Assets
-----------------------------------------------------
Investments, at value
(identified cost, $11,199,158) $15,039,680
Cash 1,810,766
Foreign currency, at value
(identified cost, $9,154) 9,162
Dividends receivable 10,723
-----------------------------------------------------
TOTAL ASSETS $16,870,331
-----------------------------------------------------
Liabilities
-----------------------------------------------------
Payable to affiliate for Trustees' fees $ 106
Accrued expenses 22,945
-----------------------------------------------------
TOTAL LIABILITIES $ 23,051
-----------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS'
INTEREST IN PORTFOLIO $16,847,280
-----------------------------------------------------
Sources of Net Assets
-----------------------------------------------------
Net proceeds from capital contributions
and withdrawals $13,006,864
Net unrealized appreciation (computed on
the basis of identified cost) 3,840,416
-----------------------------------------------------
TOTAL $16,847,280
-----------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JUNE 30, 2000
<S> <C>
Investment Income
-----------------------------------------------------
Dividends (net of foreign taxes, $3,854) $ 63,303
-----------------------------------------------------
TOTAL INVESTMENT INCOME $ 63,303
-----------------------------------------------------
Expenses
-----------------------------------------------------
Investment adviser fee $ 60,825
Administration fee 20,274
Trustees fees and expenses 2,818
Custodian fee 34,902
Legal and accounting services 16,900
Miscellaneous 334
-----------------------------------------------------
TOTAL EXPENSES $ 136,053
-----------------------------------------------------
Deduct --
Reduction of custodian fee $ 17,979
Preliminary reduction of investment
adviser fee 8,588
Preliminary reduction of
administration fee 1,976
-----------------------------------------------------
TOTAL EXPENSE REDUCTIONS $ 28,543
-----------------------------------------------------
NET EXPENSES $ 107,510
-----------------------------------------------------
NET INVESTMENT LOSS $ (44,207)
-----------------------------------------------------
Realized and Unrealized Gain (Loss)
-----------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $ 206,333
Foreign currency and forward foreign
currency exchange
contract transactions (5,102)
-----------------------------------------------------
NET REALIZED GAIN $ 201,231
-----------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $(1,288,170)
Foreign currency and forward foreign
currency exchange contracts (473)
-----------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $(1,288,643)
-----------------------------------------------------
NET REALIZED AND UNREALIZED LOSS $(1,087,412)
-----------------------------------------------------
NET DECREASE IN NET ASSETS FROM
OPERATIONS $(1,131,619)
-----------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
14
<PAGE>
EMERGING MARKETS PORTFOLIO AS OF JUNE 30, 2000
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
Increase (Decrease) JUNE 30, 2000 YEAR ENDED
IN NET ASSETS (UNAUDITED) DECEMBER 31, 1999
<S> <C> <C>
-----------------------------------------------------------------------------
From operations --
Net investment income (loss) $ (44,207) $ 42,713
Net realized gain 201,231 850,084
Net change in unrealized
appreciation (depreciation) (1,288,643) 5,616,042
-----------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS $ (1,131,619) $ 6,508,839
-----------------------------------------------------------------------------
Capital transactions --
Contributions $ 6,700,923 $ 6,286,238
Withdrawals (3,194,263) (6,199,686)
-----------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
CAPITAL TRANSACTIONS $ 3,506,660 $ 86,552
-----------------------------------------------------------------------------
NET INCREASE IN NET ASSETS $ 2,375,041 $ 6,595,391
-----------------------------------------------------------------------------
Net Assets
-----------------------------------------------------------------------------
At beginning of period $ 14,472,239 $ 7,876,848
-----------------------------------------------------------------------------
AT END OF PERIOD $ 16,847,280 $ 14,472,239
-----------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
15
<PAGE>
EMERGING MARKETS PORTFOLIO AS OF JUNE 30, 2000
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2000 --------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
--------------------------------------------------------------------------------------------------------------
Ratios (As a percentage of
average daily net assets):
Net expenses 1.54%(1) 1.42% 1.71% 1.53% 1.54% 2.58%
Net expenses after
custodian fee reduction 1.32%(1) 1.35% 1.41% 1.35% 1.32% 2.58%
Net investment income
(loss) (0.54)%(1) 0.45% 0.37% 0.08% 0.14% (1.00)%
Portfolio Turnover 28% 95% 117% 160% 125% 98%
--------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD
(000'S OMITTED) $16,847 $14,472 $ 7,877 $18,554 $10,659 $ 3,587
--------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Portfolio may reflect a reduction of the investment adviser fee and/or
administration fee, an allocation of expenses to the Investment Adviser and/or Administrator, or both. Had
such actions not been taken, the ratios would have been as follows:
Ratios (As a percentage of
average daily net assets):
Expenses 1.67%(1) 2.42% 1.87% 1.81% 2.24% 5.24%
Expenses after custodian
fee reduction 1.45%(1) 2.35% 1.57% 1.63% 2.02% 5.24%
Net investment income
(loss) (0.67)%(1) (0.55)% 0.21% (0.20)% (0.56)% (3.66)%
--------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
16
<PAGE>
EMERGING MARKETS PORTFOLIO AS OF JUNE 30, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1 Significant Accounting Policies
-------------------------------------------
Emerging Markets Portfolio (the Portfolio) is registered under the Investment
Company Act of 1940 as a diversified, open-end management investment company
which was organized as a trust under the laws of the State of New York on
January 18, 1994. The Portfolio's objective is to achieve long-term capital
appreciation. The Portfolio seeks to achieve its objective by investing in
equity securities (primarily common stocks) of companies located in emerging
market countries, which are those considered to be developing. The
Declaration of Trust permits the Trustees to issue interests in the
Portfolio. The following is a summary of significant accounting policies of
the Portfolio. The policies are in conformity with accounting principles
generally accepted in the United States of America.
A Investment Valuation -- Marketable securities, including options, that are
listed on foreign or U.S. securities exchanges or in the NASDAQ National
Market System are valued at closing sale prices, on the exchange where such
securities are principally traded. Futures positions on securities or
currencies are generally valued at closing settlement prices. Unlisted or
listed securities for which closing sales prices are not available are valued
at the mean between the latest bid and asked prices. Short term debt
securities with a remaining maturity of 60 days or less are valued at
amortized cost which approximates value. Other fixed income and debt
securities, including listed securities and securities for which price
quotations are available, will normally be valued on the basis of valuations
furnished by a pricing service. Investments for which valuations or market
quotations are unavailable or are considered unreliable are valued at fair
value using methods determined in good faith by or at the direction of the
Trustees.
B Income -- Dividend income is recorded on the ex-dividend date. However, if
the ex-dividend date has passed, certain dividends from securities are
recorded as the Portfolio is informed of the ex-dividend date.
C Federal Taxes -- The Portfolio has elected to be treated as a partnership for
United States Federal tax purposes. No provision is made by the Portfolio for
federal or state taxes on any taxable income of the Portfolio because each
investor in the Portfolio is individually responsible for the payment of any
taxes on its share of such income. Since some of the Portfolio's investors
are regulated investment companies that invest all or substantially all of
their assets in the Portfolio, the Portfolio normally must satisfy the
applicable source of income and diversification requirements (under the
Internal Revenue Code) in order for its investors to satisfy them. The
Portfolio will allocate, at least annually among its investors, each
investor's distributive share of the Portfolio's net investment income, net
realized capital gains, and any other items of income, gain, loss, deduction
or credit. Withholding taxes on foreign dividends and capital gains have been
provided for in accordance with the Portfolio's understanding of the
applicable countries' tax rules and rates.
D Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
of the Portfolio. Pursuant to the custodian agreement, IBT receives a fee
reduced by credits which are determined based on the average daily cash
balance the Portfolio maintains with IBT. All significant credit balances
used to reduce the Portfolio's custodian fees are reported as a reduction of
total expenses in the Statement of Operations.
E Futures Contracts -- Upon the entering of a financial futures contract, the
Portfolio is required to deposit (initial margin) either cash or securities
in an amount equal to a certain percentage of the purchase price indicated in
the financial futures contract. Subsequent payments are made or received by
the Portfolio (margin maintenance) each day, dependent on the daily
fluctuations in the value of the underlying security, and are recorded for
book purposes as unrealized gains or losses by the Portfolio. The Portfolio's
investment in financial futures contracts is designed only to hedge against
anticipated future changes in interest or currency exchange rates. Should
interest or currency exchange rates move unexpectedly, the Portfolio may not
achieve the anticipated benefits of the financial futures contracts and may
realize a loss. If the Portfolio enters into a closing transaction, the
Portfolio will realize, for book purposes, a gain or loss equal to the
difference between the value of the financial futures contract to sell and
financial futures contract to buy.
F Foreign Currency Translation -- Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases
and sales of foreign investment securities and income and expenses are
converted into U.S. dollars based upon currency exchange rates prevailing on
the respective dates of such transactions. Recognized gains or losses on
investment transactions attributable to foreign currency rates are recorded
for financial statement purposes as net realized gains and losses on
investments. That portion of
17
<PAGE>
EMERGING MARKETS PORTFOLIO AS OF JUNE 30, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
unrealized gains and losses on investments that result from fluctuations in
foreign currency exchange rates are not separately disclosed.
G Forward Foreign Currency Exchange Contracts -- The Portfolio may enter into
forward foreign currency exchange contracts for the purchase or sale of a
specific foreign currency at a fixed price on a future date. Risk may arise
upon entering these contracts from the potential inability of counterparties
to meet the terms of their contracts and from movements in the value of a
foreign currency relative to the U.S. dollar. The Portfolio will enter into
forward contracts for hedging purposes as well as non-hedging purposes. The
forward foreign currency exchange contracts are adjusted by the daily
exchange rate of the underlying currency and any gains or losses are recorded
for financial statement purposes as unrealized until such time as the
contracts have been closed or offset.
H Other -- Investment transactions are accounted for on a trade date basis.
Realized gains and losses are computed based on the specific identification
of the securities sold.
I Use of Estimates -- The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of income and expense during the reporting period. Actual results could
differ from those estimates.
J Interim Financial Statements -- The interim financial statements relating to
June 30, 2000 and for the six months then ended have not been audited by
independent certified public accountants, but in the opinion of the
Portfolio's management, reflect all adjustments, consisting only of normal
recurring adjustments, necessary for the fair presentation of the financial
statements.
2 Investment Adviser Fee and Other Transactions with Affiliates
-------------------------------------------
The investment adviser fee is earned by Lloyd George Investment Management
(Bermuda) Limited (the Adviser) as compensation for management and investment
advisory services rendered to the Portfolio. Under the advisory agreement,
the Adviser receives a monthly fee of 0.0625% (0.75% annually) of the average
daily net assets of the Portfolio up to $500,000,000, and at reduced rates as
daily net assets exceed that level. For the six months ended June 30, 2000,
the adviser fee was 0.75% (annualized) of average daily net assets and
amounted to $60,825. To reduce the net operating loss of the Portfolio, the
Adviser made a reduction of the investment adviser fee of $8,588. In
addition, an administrative fee is earned by Eaton Vance Management (EVM) for
managing and administrating the business affairs of the Portfolio. Under the
administration agreement, EVM earns a monthly fee in the amount of 1/48th of
1% (0.25% annually) of the average daily net assets of the Portfolio up to
$500,000,000, and at reduced rates as daily net assets exceed that level. For
the six months ended June 30, 2000, the administration fee was 0.25%
(annualized) of average daily net assets and amounted to $20,274. To reduce
the net operating loss of the Portfolio, EVM made a reduction of the
administrative fee of $1,976. Except as to Trustees of the Portfolio who are
not members of the Adviser or EVM's organization, officers and Trustees
receive remuneration for their services to the Portfolio out of such
investment adviser and administrative fees. Certain officers and Trustees of
the Portfolio are officers of the above organizations.
3 Investment Transactions
-------------------------------------------
Purchases and sales of investments, other than short-term obligations,
aggregated $5,919,555 and $4,033,440, respectively, for the six months ended
June 30, 2000.
4 Federal Income Tax Basis of Investments
-------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned at June 30, 2000, as computed on a federal income tax
basis, were as follows:
<TABLE>
<S> <C>
AGGREGATE COST $11,199,158
-----------------------------------------------------
Gross unrealized appreciation $ 4,374,741
Gross unrealized depreciation (534,219)
-----------------------------------------------------
NET UNREALIZED APPRECIATION $ 3,840,522
-----------------------------------------------------
</TABLE>
5 Line of Credit
-------------------------------------------
The Portfolio participates with other portfolios and funds managed by EVM and
its affiliates in a $150 million unsecured line of credit agreement with a
group of banks. Borrowings will be made by the Portfolio solely to facilitate
the handling of unusual and or unanticipated short-term cash requirements.
Interest is charged to each participating portfolio or fund based on its
borrowings at an amount above either the Eurodollar rate or federal funds
rate. In addition, a fee computed at an annual rate of 0.10% on
18
<PAGE>
EMERGING MARKETS PORTFOLIO AS OF JUNE 30, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
the daily unused portion of the line of credit is allocated among the
participating portfolios and funds at the end of each quarter. The Portfolio
did not have any significant borrowings or allocated fees during the six
months ended June 30, 2000.
6 Risks Associated with Foreign Investments
-------------------------------------------
Investing in securities issued by companies whose principal business
activities are outside the United States may involve significant risks not
present in domestic investments. For example, there is generally less
publicly available information about foreign companies, particularly those
not subject to the disclosure and reporting requirements of the U.S.
securities laws. Foreign issuers are generally not bound by uniform
accounting, auditing, and financial reporting requirements and standards of
practice comparable to those applicable to domestic issuers. Investments in
foreign securities also involve the risk of possible adverse changes in
investment or exchange control regulations, expropriation or confiscatory
taxation, limitation on the removal of funds or other assets of the
Portfolio, political or financial instability or diplomatic and other
developments which could affect such investments. Foreign stock markets,
while growing in volume and sophistication, are generally not as developed as
those in the United States, and securities of some foreign issuers
(particularly those in developing countries) may be less liquid and more
volatile than securities of comparable U.S. companies. In general, there is
less overall governmental supervision and regulation of foreign securities
markets, broker-dealers, and issuers than in the United States.
7 Financial Instruments
-------------------------------------------
The Portfolio may trade in financial instruments with off-balance sheet risk
in the normal course of its investing activities to assist in managing
exposure to various market risks. These financial instruments include forward
foreign currency exchange contracts and futures contracts and may involve, to
a varying degree, elements of risk in excess of the amounts recognized for
financial statement purposes. The notional or contractual amounts of these
instruments represent the investment the Portfolio has in particular classes
of financial instruments and does not necessarily represent the amounts
potentially subject to risk. The measurement of the risks associated with
these instruments is meaningful only when all related and offsetting
transactions are considered. At June 30, 2000, there were no obligations
under these financial instruments outstanding.
8 Subsequent Event
-------------------------------------------
Effective August 21, 2000, Jacob Rees-Mogg will assume sole responsibility
for managing the Emerging Markets Portfolio. Mr. Rees-Mogg is currently
co-portfolio manager of the Emerging Markets Portfolio.
19
<PAGE>
EATON VANCE EMERGING MARKETS FUND AS OF JUNE 30, 2000
INVESTMENT MANAGEMENT
EATON VANCE EMERGING MARKETS FUND
Officers
James B. Hawkes
President and Trustee
Edward E. Smiley, Jr.
Vice President
Michael B. Terry
Vice President
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Trustees
Jessica M. Bibliowicz
President and Chief Executive Officer,
National Financial Partners
Donald R. Dwight
President, Dwight Partners, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment
Banking Emeritus, Harvard University
Graduate School of Business Administration
Norton H. Reamer
Chairman of the Board,
United Asset Management Corporation
Lynn A. Stout
Professor of Law,
Georgetown University Law Center
Jack L. Treynor
Investment Adviser and Consultant
EMERGING MARKETS PORTFOLIO
Officers
Hon. Robert Lloyd George
President and Trustee
James B. Hawkes
Vice President and Trustee
Scobie Dickinson Ward
Vice President, Assistant
Secretary and Assistant Treasurer
William Walter Raleigh Kerr
Vice President and
Assistant Treasurer
James L. O'Connor
Vice President and Treasurer
Alan R. Dynner
Secretary
Trustees
Hon. Edward K. Y. Chen
President of Lingnan College,
University of Hong Kong
Donald R. Dwight
President, Dwight Partners, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment
Banking Emeritus, Harvard University
Graduate School of Business Administration
Norton H. Reamer
Chairman of the Board,
United Asset Management Corporation
20
<PAGE>
INVESTMENT ADVISER OF EMERGING MARKETS PORTFOLIO
LLOYD GEORGE MANAGEMENT
(BERMUDA) LIMITED
3808 One Exchange Square
Central, Hong Kong
SPONSOR AND MANAGER OF
EATON VANCE EMERGING MARKETS FUND
AND ADMINISTRATOR OF EMERGING MARKETS PORTFOLIO
Eaton Vance Management
The Eaton Vance Building
255 State Street
Boston, MA 02109
PRINCIPAL UNDERWRITER
EATON VANCE DISTRIBUTORS, INC.
The Eaton Vance Building
255 State Street
Boston, MA 02109
(617) 482-8260
CUSTODIAN
INVESTORS BANK & TRUST COMPANY
200 Clarendon Street
Boston, MA 02116
TRANSFER AGENT
PFPC, INC.
Attn: Eaton Vance Funds
P.O. Box 9653
Providence, RI 02904-9653
EATON VANCE EMERGING MARKETS FUND
THE EATON VANCE BUILDING
255 STATE STREET
BOSTON, MA 02109
--------------------------------------------------------------------------------
THIS REPORT MUST BE PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS
WHICH CONTAINS MORE COMPLETE INFORMATION ON THE FUND, INCLUDING ITS
SALES CHARGES AND EXPENSES. PLEASE READ THE PROSPECTUS CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
--------------------------------------------------------------------------------
132-8/00 EMSRC
