<PAGE>
[LOGO]
Annual Report December 31, 1999 [PHOTO]
EATON VANCE
INSTITUTIONAL
SHORT TERM
TREASURY
FUND
[PHOTO] Global Management-Global Distribution
[PHOTO]
<PAGE>
EATON VANCE INSTITUTIONAL SHORT TERM TREASURY FUND AS OF DECEMBER 31, 1999
INVESTMENT UPDATE
[PHOTO] INVESTMENT ENVIRONMENT
MICHAEL B. TERRY ----------------------------------------------------
PORTFOLIO MANAGER
The Economy
- - The U.S. economy continued to expand strongly in the past year, with gross
domestic product rising at a 5.8% pace in the fourth quarter. With
unemployment at a 30-year low, consumer confidence remained high, providing
a boost to retail activity.
- - Despite a robust economy and ebullient consumer attitudes, inflation
increased in 1999 from only 1.6% to 2.7%, still a low rate. Continuing
global competition, increased productivity and the enhanced use of
technology have generally helped keep inflation pressures in check.
The Market
- - In an effort to prevent a recurrence of inflation, the Federal Reserve
Board raised the Federal Funds interest rate three times in 1999, ending
the year at 5.50%. The Federal Funds rate is the rate for interbank
overnight loans and serves as a key interest rate barometer.
- - With Treasury yields rising throughout 1999, shorter-duration Treasury
portfolios generally outperformed longer ones. This meant that money market
funds generally outperformed bond funds. At the long end, for example, the
benchmark 30-year Treasury bond's total return was down 14.4%, one of its
worst years ever.
- - Despite a likelihood of further tightening by the Federal Reserve, the
outlook for bonds in the year ahead is more optimistic. There are few real
signs of inflation on the horizon, and the Treasury's intention to use
budget surpluses to reduce debt is very positive.
THE FUND
- -------------------------------------------------------------------------------
The Past Year
- - Since its inception date of January 4, 1999, Eaton Vance Institutional
Short Term Treasury Fund had a total return of 4.32%.(1)
- - This return resulted from an increase in the Fund's net asset value to
$70.60 per share on December 31, 1999, from $70.00 per share on January 4,
1999, and the reinvestment of $2.42 per share in income dividends.
About the Fund
- - Eaton Vance Institutional Short Term Treasury Fund began operations on
January 4, 1999, with a minimum investment of $1 million.
- - The Fund invests only in U.S. Treasury obligations with maturities of up
to five years and Treasury-collateralized repurchase agreements,
providing a combination of very low credit risk and slight interest rate
sensitivity, compared to most taxable fixed-income mutual funds.
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Mutual fund shares are not insured by the FDIC and are not deposits or
other obligations of, or guaranteed by, any depository institution. Shares
are subject to investment risks, including possible loss of principal
invested.
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Fund Information
AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
Performance(1)
<S> <C>
- -------------------------------------------------------------------------------
SEC AVERAGE ANNUAL TOTAL RETURNS
- -------------------------------------------------------------------------------
Life of Fund+ 4.32%
</TABLE>
+Inception Date - 1/4/99
(1) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. There is no
sales charge.
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 INSTITUTIONAL SHORT TERM TREASURY FUND AS OF DECEMBER 31, 1999
INVESTMENT UPDATE
EDGAR REPRESENTATION OF PLOT POINTS FROM PRINTED GRAPHIC
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
EATON VANCE INSTITUTIONAL SHORT-TERM TREASURY FUND VS
THE MERRILL LYNCH U.S. TREASURY BILL INDEX*
<TABLE>
<CAPTION>
<S> <C> <C>
1/31/99 $10,000 $10,000
2/28/99 $10,027 $10,029
3/31/99 $10,067 $10,075
4/30/99 $10,100 $10,110
5/31/99 $10,130 $10,147
6/30/99 $10,168 $10,186
7/31/99 $10,208 $10,225
8/31/99 $10,245 $10,263
9/30/99 $10,286 $10,309
10/31/99 $10,319 $10,345
11/30/99 $10,359 $10,385
12/31/99 $10,406 $10,428
</TABLE>
<TABLE>
<CAPTION>
Performance
<S> <C>
- -------------------------------------------------------------------------------
Cumulative Total Return
- -------------------------------------------------------------------------------
Life of Fund+ 4.32%
</TABLE>
+Inception Date - 1/4/99
*Sources:TowersData, Bethesda, MD.; Bloomberg. Investment operations
commenced 1/4/99. Index information is available only at month-end;
therefore, the line comparison begins at the next month-end following the
commencement of the Fund's investment operations.
The chart compares the Fund's total return with that of the Merrill Lynch
U.S. Treasury Bill Index, a representative, unmanaged index of U.S. Treasury
bills with various maturities. Returns are calculated by determining the
percentage change in net asset value (NAV) with all distributions reinvested.
The lines on the chart represent the total returns of $10,000 hypothetical
investments in the Fund and the Index. The Index's total return does not
reflect commissions or expenses that would have been incurred if an investor
individually purchased or sold the securities represented in the Index. It is
not possible to invest directly in an Index.
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.
3
<PAGE>
EATON VANCE INSTITUTIONAL SHORT TERM TREASURY FUND AS OF DECEMBER 31, 1999
PORTFOLIO OF INVESTMENTS
U.S. TREASURY OBLIGATIONS -- 99.0%
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
<S> <C> <C>
- ----------------------------------------------------------------------
U.S. Treasury Bill, 0.00%, 3/2/00 1,000 $ 991,330
- ----------------------------------------------------------------------
Total U.S. Treasury Obligations
(identified cost, $991,257) $ 991,330
- ----------------------------------------------------------------------
Total Investments -- 99.0%
(identified cost $991,257) $ 991,330
- ----------------------------------------------------------------------
Other Assets, Less Liabilities -- 1.0% $ 10,455
- ----------------------------------------------------------------------
Net Assets -- 100.0% $1,001,785
- ----------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
EATON VANCE INSTITUTIONAL SHORT TERM TREASURY FUND AS OF DECEMBER 31, 1999
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1999
<S> <C>
Assets
- ----------------------------------------------------
Investments, at value
(identified cost, $991,257) $ 991,330
Cash 10,486
- ----------------------------------------------------
TOTAL ASSETS $1,001,816
- ----------------------------------------------------
Liabilities
- ----------------------------------------------------
Accrued expenses $ 31
- ----------------------------------------------------
TOTAL LIABILITIES $ 31
- ----------------------------------------------------
NET ASSETS FOR 14,189 SHARES OF
BENEFICIAL INTEREST OUTSTANDING $1,001,785
- ----------------------------------------------------
Sources of Net Assets
- ----------------------------------------------------
Paid-in capital $1,001,712
Net unrealized appreciation (computed on
the basis of identified cost) 73
- ----------------------------------------------------
TOTAL $1,001,785
- ----------------------------------------------------
Net Asset Value, Offering Price and
Redemption Price Per Share
- ----------------------------------------------------
($1,001,785 DIVIDED BY 14,189 SHARES OF
BENEFICIAL INTEREST OUTSTANDING) $ 70.60
- ----------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE PERIOD ENDED
DECEMBER 31, 1999(1)
<S> <C>
Investment Income
- -----------------------------------------------------
Interest $24,478,523
- -----------------------------------------------------
TOTAL INVESTMENT INCOME $24,478,523
- -----------------------------------------------------
Expenses
- -----------------------------------------------------
Management fees $ 1,772,097
Service fees 1,266,007
- -----------------------------------------------------
TOTAL EXPENSES $ 3,038,104
- -----------------------------------------------------
NET INVESTMENT INCOME $21,440,419
- -----------------------------------------------------
Realized and Unrealized
Gain (Loss)
- -----------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $ 13,346
- -----------------------------------------------------
NET REALIZED GAIN $ 13,346
- -----------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost
basis) $ 73
- -----------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $ 73
- -----------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $ 13,419
- -----------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $21,453,838
- -----------------------------------------------------
</TABLE>
(1) For the period from the start of business, January 4, 1999, to
December 31, 1999.
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
EATON VANCE INSTITUTIONAL SHORT TERM TREASURY FUND AS OF DECEMBER 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Increase (Decrease) PERIOD ENDED
in Net Assets DECEMBER 31, 1999(1)
<S> <C>
- ---------------------------------------------------------------
From operations --
Net investment income $ 21,440,419
Net realized gain 13,346
Net change in unrealized appreciation
(depreciation) 73
- ---------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 21,453,838
- ---------------------------------------------------------------
Distributions to shareholders --
From net investment income $ (33,199)
- ---------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (33,199)
- ---------------------------------------------------------------
Transactions in shares of beneficial
interest --
Proceeds from sale of shares $ 720,116,543
Net asset value of shares issued to
shareholders in payment of
distributions declared 33,199
Cost of shares redeemed (740,568,666)
- ---------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM FUND
SHARE TRANSACTIONS $ (20,418,924)
- ---------------------------------------------------------------
NET INCREASE IN NET ASSETS $ 1,001,715
- ---------------------------------------------------------------
Net Assets
- ---------------------------------------------------------------
At beginning of period $ 70
- ---------------------------------------------------------------
AT END OF PERIOD $ 1,001,785
- ---------------------------------------------------------------
</TABLE>
(1) For the period from the start of business, January 4, 1999, to
December 31, 1999.
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
EATON VANCE INSTITUTIONAL SHORT TERM TREASURY FUND AS OF DECEMBER 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PERIOD ENDED
DECEMBER 31, 1999(1)(2)
<S> <C>
- -------------------------------------------------------
Net asset value -- Beginning
of period $70.000
- -------------------------------------------------------
Income (loss) from operations
- -------------------------------------------------------
Net investment income $ 3.015
Net realized and unrealized
gain 0.005
- -------------------------------------------------------
TOTAL INCOME FROM OPERATIONS $ 3.020
- -------------------------------------------------------
Less distributions
- -------------------------------------------------------
From net investment income $(2.420)
- -------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $70.600
- -------------------------------------------------------
TOTAL RETURN(3) 4.32%
- -------------------------------------------------------
Ratios/Supplemental Data
- -------------------------------------------------------
Net assets, end of period
(000's omitted) $ 1,002
Ratios (As a percentage of
average daily net assets):
Expenses 0.60%(4)
Net investment income 4.23%(4)
Portfolio Turnover 11%
- -------------------------------------------------------
</TABLE>
(1) For the period from the start of business, January 4, 1999, to
December 31, 1999.
(2) Net investment income per share was computed using average shares
outstanding.
(3) 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.
(4) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
EATON VANCE INSTITUTIONAL SHORT TERM TREASURY FUND AS OF DECEMBER 31, 1999
NOTES TO FINANCIAL STATEMENTS
1 Significant Accounting Policies
- -------------------------------------------
Eaton Vance Institutional Short Term Treasury Fund (the Fund) is a
non-diversified series of Eaton Vance Special Investment Trust (the Trust).
The Trust is an entity of the type commonly known as a Massachusetts business
trust and is registered under the Investment Company Act of 1940, as amended,
as an open-end management investment company. The following is a summary of
significant accounting policies consistently followed by the Fund in the
preparation of its financial statements. The policies are in conformity with
generally accepted accounting principles.
A Investment Valuations -- Debt securities, including listed securities and
securities for which price quotations are available, will normally be valued
on the basis of market valuations furnished by a pricing service. Short-term
obligations and money market securities maturing in 60 days or less are
valued at amortized cost, which approximates value. Investments for which
valuations or market quotations are unavailable are valued at fair value
using methods determined in good faith by or at the direction of the
Trustees.
B Income -- Interest income is determined on the basis of interest accrued,
adjusted for amortization of discount when required for federal income tax
purposes.
C Federal Taxes -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders all of its taxable income, including any net
realized gain on investments. Accordingly, no provision for federal income or
excise tax is necessary.
D Distributions to Shareholders -- It is the present policy of the Fund to pay
dividends and capital gains annually, normally in December. The Fund intends
on its tax return to treat as a distribution of investment company taxable
income and net capital gain the portion of redemption proceeds paid to
redeeming shareholders that represents the redeeming shareholders' portion of
the Fund's undistributed investment company taxable income and net capital
gain. This practice, which involves the use of equalization accounting, will
have the effect of reducing the amount of income and gains that the Fund is
required to distribute as dividends to shareholders in order for the Fund to
avoid federal income tax and excise tax. This practice may also reduce the
amount of distributions required to be made to nonredeeming shareholders and
defer the recognition of taxable income by shareholders. However, since the
amount of any undistributed income will be reflected in the value of the
Fund's shares, the total return on a shareholder's investment will not be
reduced as a result of the Fund's distribution policy.
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 relating to distributions are reclassified to
paid-in capital. During the year ended December 31, 1999, $21,420,566 was
reclassified from undistributed net investment income to paid in capital due
to differences arising from the use of equalization accounting for
tax purposes.
E Repurchase Agreements -- The Fund may enter into repurchase agreements
collateralized exclusively by US Treasury obligations with banks and
broker-dealers determined to be creditworthy by the Investment Adviser. Under
a repurchase agreement, the Fund buys a security at one price and
simultaneously promises to sell that same security back to the seller at a
higher price for settlement at a later date. The Fund'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 interest earned on the repurchase agreement, and will be marked to market
daily. The repurchase date is usually overnight, but may be within seven days
of the original purchase date. In the event of bankruptcy of the counterparty
or a third party custodian, the Fund might experience delays in recovering
its cash or experience a loss.
F Other -- Investment transactions are accounted for on a trade date basis.
Dividends to shareholders are recorded on the ex-dividend date.
G Use of Estimates -- The preparation of 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.
8
<PAGE>
EATON VANCE INSTITUTIONAL SHORT TERM TREASURY FUND AS OF DECEMBER 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
2 Shares of Beneficial Interest
- -------------------------------------------
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
PERIOD ENDED
DECEMBER 31, 1999(1)
<S> <C>
--------------------------------------------------------------
Sales 10,231,236
Issued to shareholders electing to
receive payments of distributions in
Fund shares 470
Redemptions (10,217,518)
--------------------------------------------------------------
NET INCREASE 14,188
--------------------------------------------------------------
</TABLE>
(1) For the period from the start of business, January 4, 1999, to
December 31, 1999.
3 Purchases and Sales of Investments
- -------------------------------------------
Purchases and sales (including maturities) of U.S. Government Securities
aggregated $3,132,601,588 and $3,144,190,872, respectively.
4 Management Fee and Other Transactions with Affiliates
- -------------------------------------------
The management fee is earned by Eaton Vance Management (EVM) as compensation
for management services rendered to the Fund. The fee is at an annual rate of
0.35% of the average daily net assets of the Fund. Eaton Vance also provides
administrative services and pays all ordinary operating expenses of the Fund
(except service and management fees). For the period ended December 31, 1999,
the fee was equivalent to 0.35% of the Fund's average net assets and amounted
to $1,772,097. Except as to Trustees of the Fund who are not members of EVM's
organization, officers and Trustees receive remuneration for their services
to the Fund out of such investment adviser fee. Certain officers and Trustees
of the Fund are officers of the above organizations. Trustees of the Fund
that are not affiliated with the Investment Adviser may elect to defer
receipt of all or a percentage of their annual fees in accordance with the
terms of the Trustees Deferred Compensation Plan. For the period ended
December 31, 1999, no significant amounts have been deferred.
5 Service Plan
- -------------------------------------------
The Fund has adopted a service plan. Fund assets bear a service fee for
personal and/or account services paid to the Principal Underwriter, Eaton
Vance Distributors, Inc. (EVD), a subsidiary of EVM, in an amount not
exceeding 0.25% of average daily net assets. EVD may pay up to the entire
amount of the service fee to investment dealers and their employees, or to
EVD employees for providing services to the Fund or its shareholders. Service
fee payments from EVD to investment dealers and others will be made on new
accounts only if EVD has previously authorized in writing such payments for
identified accounts. For the period ended December 31, 1999, the Fund paid
$1,266,007 in service fees to EVD, and EVD in turn paid a substantial portion
of this amount to investment dealers.
6 Line of Credit
- -------------------------------------------
The Fund 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 Fund solely to facilitate the
handling of unusual and/or unanticipated short-term cash requirements.
Interest is charged to each portfolio or fund based on its borrowing at an
amount above the Eurodollar rate or federal funds rate. In addition, a fee
computed at an annual rate of 0.10% on the daily unused portion of the
facility is allocated among the participating portfolios and funds at the end
of each quarter. The Fund did not have any significant borrowings or
allocated fees during the period ended December 31, 1999.
7 Federal Income Tax Basis of Investments
- -------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investment securities at December 31, 1999, as computed on a federal income
tax basis, were as follows:
<TABLE>
<S> <C>
AGGREGATE COST $991,257
--------------------------------------------------
Gross unrealized appreciation $ 73
Gross unrealized depreciation --
--------------------------------------------------
NET UNREALIZED APPRECIATION $ 73
--------------------------------------------------
</TABLE>
9
<PAGE>
EATON VANCE INSTITUTIONAL SHORT TERM TREASURY FUND AS OF DECEMBER 31, 1999
INDEPENDENT AUDITORS' REPORT
TO THE TRUSTEES AND SHAREHOLDERS
OF EATON VANCE INSTITUTIONAL SHORT TERM TREASURY FUND:
- ---------------------------------------------
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Eaton Vance Institutional Short Term Treasury
Fund (the Fund) as of December 31, 1999, the related statement of operations,
the statement of changes in net assets and the financial highlights for the
period from the start of business, January 4, 1999 to December 31, 1999. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of December 31, 1999 by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Eaton Vance
Institutional Short Term Treasury Fund at December 31, 1999, and the results of
its operations, the changes in its net assets and its financial highlights for
the period from the start of business, January 4, 1999 to December 31, 1999 in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 11, 2000
10
<PAGE>
EATON VANCE INSTITUTIONAL SHORT TERM TREASURY FUND AS OF DECEMBER 31, 1999
INVESTMENT MANAGEMENT
Officers
James B. Hawkes
President and Trustee
Edward E. Smiley, Jr.
Vice President
Michael B. Terry
Vice President and
Portfolio Manager
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 and Chief Executive Officer,
United Asset Management Corporation
Lynn A. Stout
Professor of Law
Georgetown University Law Center
Jack L. Treynor
Investment Adviser and Consultant
11
<PAGE>
INVESTMENT ADVISER
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 GLOBAL FUND SERVICES
Attention: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
INDEPENDENT AUDITORS
DELOITTE & TOUCHE LLP
200 Berkeley Street
Boston, MA 02116-5022
EATON VANCE INSTITUTIONAL SHORT TERM TREASURY 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 distribution
plan, sales charges and expenses. Please read the prospectus carefully before
you invest or send money.
- ------------------------------------------------------------------------------
163-12/99 TYSRC-12/99
