AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 30, 1995
1933 ACT FILE NO. 2-11391
1940 ACT FILE NO. 811-161
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 [X]
POST-EFFECTIVE AMENDMENT NO. 73 [X]
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 22 [X]
EATON VANCE SECURITIES TRUST
(FORMERLY EATON VANCE STOCK FUND)
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(617) 482-8260
--------------------------------
(REGISTRANT'S TELEPHONE NUMBER)
H. DAY BRIGHAM, JR.
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
---------------------------------
(NAME AND ADDRESS OF AGENT FOR SERVICE)
It is proposed that this filing will become effective on March 31, 1995
pursuant to paragraph (b) of Rule 485.
[X] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
The exhibit index required by Rule 483(a) under the Securities Act of 1933
is located on page -- in the sequential numbering system of the manually signed
copy of this Registration Statement.
The Registrant has filed a Declaration pursuant to Rule 24f-2 and on
February 22, 1995 filed its "Notice" as required by that Rule for the fiscal
year ended December 31, 1994.
Stock Portfolio has also executed this Registration Statement.
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<PAGE>
This Amendment to the registration statement on Form N-1A consists of the
following documents and papers:
Cross Reference Sheets required by Rule 481(a) under the Securities Act of
1933
Part A -- The Prospectuses of:
EV Classic Stock Fund
EV Marathon Stock Fund
EV Traditional Stock Fund
Part B -- The Statements of Additional Information of:
EV Classic Stock Fund
EV Marathon Stock Fund
EV Traditional Stock Fund
Part C -- Other Information
Signatures
Exhibit Index Required by Rule 483(a) under the Securities Act of 1933
Exhibits
<PAGE>
EATON VANCE SECURITIES TRUST
EV CLASSIC STOCK FUND
EV MARATHON STOCK FUND
CROSS REFERENCE SHEET
ITEMS REQUIRED BY FORM N-1A
---------------------------
PART A
ITEM NO. ITEM CAPTION PROSPECTUS CAPTION
--------------- ------- -------------------------------
1. .......... Cover Page Cover Page
2. .......... Synopsis Shareholder and Fund Expenses
3. .......... Condensed Financial The Fund's Financial
Information Highlights; Performance
Information
4. .......... General Description of The Fund's Investment
Registrant Objective; How the Fund and
the Portfolio Invest their
Assets; Risks; Organization
of the Fund and the Portfolio
5. .......... Management of the Fund Management of the Fund and the
Portfolio
5A. .......... Management's Discussion of Not Applicable
Fund Performance
6. .......... Capital Stock and Other Organization of the Fund and
Securities the Portfolio; Reports to
Shareholders; The Lifetime
Investing Account/
Distribution Options;
Distributions and Taxes
7. .......... Purchase of Securities Being Valuing Fund Shares; How to Buy
Offered Fund Shares; Distribution
Plan; The Lifetime Investing
Account/Distribution Options;
The Eaton Vance
Exchange Privilege;
Eaton Vance
Shareholder Services
8. .......... Redemption or Repurchase How to Redeem Fund Shares
9. .......... Pending Legal Proceedings Not Applicable
PART B
STATEMENT OF ADDITIONAL
ITEM NO. ITEM CAPTION INFORMATION CAPTION
--------------- ------------ -------------------------------
10. ........... Cover Page Cover Page
11. ........... Table of Contents Table of Contents
12. ........... General Information and Other Information
History
13. ........... Investment Objectives and Investment Objective, Policies
Policies and Restrictions; Other
Investment Features
14. ........... Management of the Fund Trustees and Officers; Fees and
Expenses
15. ........... Control Persons and Control Persons and Principal
Principal Holders of Holders of Securities
Securities
16. ........... Investment Advisory and Investment Adviser and
Other Services Administrator; Custodian;
Distribution Plan; Fees and
Expenses; Independent
Accountants
17. ........... Brokerage Allocation and Portfolio Security
Other Transactions; Fees and
Practices Expenses
18. ........... Capital Stock and Other Other Information
Securities
19. ........... Purchase, Redemption and Service For Withdrawal;
Pricing of Principal Underwriter;
Securities Being Offered Determination of Net Asset
Value; Distribution Plan;
Fees and Expenses
20. ........... Tax Status Taxes; Additional Tax Matters
21. ........... Underwriters Principal Underwriter; Fees and
Expenses
22. ........... Calculation of Performance Investment Performance;
Data Performance Information
23. ........... Financial Statements Financial Statements
<PAGE>
EATON VANCE SECURITIES TRUST
EV TRADITIONAL STOCK FUND
CROSS REFERENCE SHEET
ITEMS REQUIRED BY FORM N-1A
---------------------------
PART A
ITEM NO. ITEM CAPTION PROSPECTUS CAPTION
---------- ------- -------------------------------
1. .......... Cover Page Cover Page
2. .......... Synopsis Shareholder and Fund Expenses
3. .......... Condensed Financial The Fund's Financial
Information Highlights; Performance
Information
4. .......... General Description of The Fund's Investment
Registrant Objective; How the Fund and
the Portfolio Invest their
Assets; Risks; Organization
of the Fund and the Portfolio
5. .......... Management of the Fund Management of the Fund and the
Portfolio
5A. .......... Management's Discussion of Not Applicable
Fund Performance
6. .......... Capital Stock and Other Organization of the Fund and
Securities the Portfolio; Reports to
Shareholders; The Lifetime
Investing Account/
Distribution Options;
Distributions and Taxes
7. .......... Purchase of Securities Being Valuing Fund Shares; How to Buy
Offered Fund Shares; Service Plan;
The Lifetime Investing
Account/Distribution Options;
The Eaton
Vance Exchange Privilege;
Eaton Vance
Shareholder Services
8. .......... Redemption or Repurchase How to Redeem Fund Shares
9. .......... Pending Legal Proceedings Not Applicable
PART B
STATEMENT OF ADDITIONAL
ITEM NO. ITEM CAPTION INFORMATION CAPTION
--------------- ------- -------------------------------
10. ........... Cover Page Cover Page
11. ........... Table of Contents Table of Contents
12. ........... General Information and Other Information
History
13. ........... Investment Objectives and Investment Objective, Policies
Policies and Restrictions; Other
Investment Features
14. ........... Management of the Fund Trustees and Officers; Fees and
Expenses
15. ........... Control Persons and Control Persons and Principal
Principal Holders of Holders of Securities
Securities
16. ........... Investment Advisory and Investment Adviser and
Other Services Administrator; Custodian;
Service Plan; Fees and
Expenses; Independent
Accountants
17. ........... Brokerage Allocation and Portfolio Security
Other Practices Transactions; Fees and
Expenses
18. ........... Capital Stock and Other Other Information
Securities
19. ........... Purchase, Redemption and Services For Accumulation;
Pricing of Service For Withdrawal;
Securities Being Offered Principal Underwriter;
Determination of Net Asset
Value; Service Plan; Fees and
Expenses
20. ........... Tax Status Taxes; Additional Tax Matters
21. ........... Underwriters Principal Underwriter; Fees and
Expenses
22. ........... Calculation of Performance Investment Performance;
Data Performance Information
23. ........... Financial Statements Financial Statements
<PAGE>
PART A
INFORMATION REQUIRED IN A PROSPECTUS
EV CLASSIC STOCK FUND
EV CLASSIC STOCK FUND (THE "FUND") IS A MUTUAL FUND SEEKING GROWTH OF
PRINCIPAL AND INCOME. THE FUND INVESTS ITS ASSETS IN STOCK PORTFOLIO (THE
"PORTFOLIO"), A DIVERSIFIED OPEN-END INVESTMENT COMPANY HAVING THE SAME
INVESTMENT OBJECTIVE AS THE FUND, RATHER THAN BY DIRECTLY INVESTING IN AND
MANAGING ITS OWN PORTFOLIO OF SECURITIES AS WITH HISTORICALLY STRUCTURED MUTUAL
FUNDS. THE FUND IS A SERIES OF EATON VANCE SECURITIES TRUST (THE "TRUST").
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank or other insured depository institution, and are not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other government agency. Shares of the Fund involve
investment risks, including fluctuations in value and the possible loss of some
or all of the principal investment.
This Prospectus is designed to provide you with information you should know
before investing. Please retain this document for future reference. A Statement
of Additional Information dated April 1, 1995 for the Fund, as supplemented from
time to time, has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. This Statement of Additional Information is
available without charge from the Fund's principal underwriter, Eaton Vance
Distributors, Inc. (the "Principal Underwriter"), 24 Federal Street, Boston, MA
02110 (telephone (800) 225-6265). The Portfolio's investment adviser is Boston
Management and Research (the "Investment Adviser"), a wholly-owned subsidiary of
Eaton Vance Management, and Eaton Vance Management is the administrator (the
"Administrator") of the Fund. The offices of the Investment Adviser and the
Administrator are located at 24 Federal Street, Boston, MA 02110.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
PAGE PAGE
<S> <C> <S> <C>
Shareholder and Fund Expenses ..................... 2 How to Buy Fund Shares ........................ 12
The Fund's Financial Highlights ................... 3 How to Redeem Fund Shares ..................... 13
The Fund's Investment Objective ................... 4 Reports to Shareholders ....................... 15
How the Fund and the Portfolio Invest The Lifetime Investing Account/Distribution
their Assets; Risks ............................. 4 Options ..................................... 15
Organization of the Fund and the Portfolio ........ 5 The Eaton Vance Exchange Privilege ............ 16
Management of the Fund and the Portfolio .......... 7 Eaton Vance Shareholder Services .............. 17
Distribution Plan ................................. 8 Distributions and Taxes ....................... 18
Valuing Fund Shares ............................... 11 Performance Information ....................... 19
</TABLE>
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PROSPECTUS DATED APRIL 1, 1995
<PAGE>
SHAREHOLDER AND FUND EXPENSES \1/
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SHAREHOLDER TRANSACTION EXPENSES
Sales Charges Imposed on Purchases of Shares None
Sales Charges Imposed on Reinvested Distributions None
Redemption Fees None
Fees to Exchange Shares None
Contingent Deferred Sales Charge Imposed on Redemptions
During the First Year (as a percentage of redemption
proceeds exclusive of all reinvestments and
capital appreciation in the account)\2/ 1.00%
ANNUAL FUND AND ALLOCATED PORTFOLIO OPERATING EXPENSES
(as a percentage of average daily net assets)
Investment Adviser Fee 0.625%
Rule 12b-1 Distribution (and Service) Fees 1.000%
Other Expenses 0.355%
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Total Operating Expenses 1.980%
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EXAMPLE 1 YEAR 3 YEARS
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An investor would pay the following expenses (including a
contingent deferred sales charge in the case of
redemption during the first year after purchase) on a
$1,000 investment, assuming (a) 5% annual return and (b)
redemption at the end of each time period: $30 $62
An investor would pay the following expenses on the same
investment, assuming (a) 5% return and (b) no redemptions: $20 $62
Notes:
\1/ The purpose of the above table and Example is to summarize the aggregate
expenses of the Fund and the Portfolio and to assist investors in
understanding the various costs and expenses that investors in the Fund will
bear directly or indirectly. The Trustees of the Trust believe that over
time the aggregate per share expenses of the Fund and the Portfolio should
be approximately equal to the per share expenses which the Fund would incur
if the Trust retained the services of an investment adviser and the assets
of the Fund were invested directly in the type of securities being held by
the Portfolio. Because the Fund does not yet have a sufficient operating
history, the percentages indicated as Annual Fund and Allocated Portfolio
Operating Expenses in the table and the amounts included in the Example are
based on the Fund's and the Portfolio's projected fees and expenses for the
current fiscal year ending December 31, 1995. The table and Example should
not be considered a representation of past or future expenses and actual
expenses may be greater or less than those shown. Moreover, while the
Example assumes a 5% annual return, the Fund's actual performance will vary
and may result in an annual return greater or less than 5%. For further
information regarding the expenses of both the Fund and the Portfolio, see
"The Fund's Financial Highlights", "Organization of the Fund and the
Portfolio", "Management of the Fund and the Portfolio" and "How to Redeem
Fund Shares". Because the Fund makes payments under its Distribution Plan
adopted under Rule 12b-1, a long-term shareholder may pay more than the
economic equivalent of the maximum front-end sales charge permitted by a
rule of the National Association of Securities Dealers, Inc. See
"Distribution Plan".
\2/ The contingent deferred sales charge will be imposed on the redemption of
shares purchased on or after January 30, 1995. No contingent deferred sales
charge is imposed on (a) shares purchased more than one year prior to
redemption, (b) shares acquired through the reinvestment of distributions or
(c) any appreciation in value of other shares in the account (see "How to
Redeem Fund Shares"), and no such charge is imposed on exchanges of Fund
shares for shares of one or more other funds listed under "The Eaton Vance
Exchange Privilege."
\3/ Other investment companies with different distribution arrangements and fees
are investing in the Portfolio and additional such companies may do so in
the future. See "Organization of the Fund and the Portfolio".
<PAGE>
THE FUND'S FINANCIAL HIGHLIGHTS
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The following information should be read in conjunction with the audited
financial statements included in the Statement of Additional Information, all of
which has been so included in reliance upon the report of Coopers & Lybrand
L.L.P., independent accountants, as experts in accounting and auditing, which
report is contained in the Statement of Additional Information. Further
information regarding the performance of the Fund is contained in the Fund's
annual report to shareholders which may be obtained without charge by contacting
the Principal Underwriter.
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FOR THE PERIOD FROM THE START OF BUSINESS, NOVEMBER 4, 1994, TO
DECEMBER 31, 1994
NET ASSET VALUE -- Beginning of period ........................... $10.00
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Income from investment operations:
Net investment income (loss)................................. $ --
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Net realized and unrealized gain (loss) on investments ...... (0.13)
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Total income (loss) from investment operations ............ $(0.13)
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NET ASSET VALUE -- End of period ................................ $ 9.87
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TOTAL RETURN\1/ ................................................. (1.30)%
RATIOS/SUPPLEMENTAL DATA (to average daily net assets)**:
Expenses\2/ ................................................... 1.59%+
Net investment income (loss)................................... 1.01%+
NET ASSETS AT END OF PERIOD (000's omitted) ..................... $ 146
**The expenses related to the operation of the Fund reflect an allocation of
expenses to the Administrator. Had such action not been taken, the ratios
would have been as follows:
RATIOS (to average daily net assets)
Expenses\2/ ................................................... 39.84%+
Net investment income/(loss)................................... (37.23)%+
+ Computed on an annualized basis.
\1/ Total return is calculated assuming a purchase at the net asset value on the
first day and a sale at the net asset value on the last day of the period
reported. Dividends and distributions, if any, are assumed to be reinvested
at the net asset value on the record date.
\2/Includes the Fund's share of Stock Portfolio's allocated expenses for the
period from the Fund's start of business, November 4, 1994, to December 31,
1994.
<PAGE>
THE FUND'S INVESTMENT OBJECTIVE
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EV CLASSIC STOCK FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE GROWTH OF PRINCIPAL
AND INCOME FOR ITS SHAREHOLDERS. The Fund currently seeks to meet its investment
objective by investing its assets in the Stock Portfolio, a separate registered
investment company that invests in a number of carefully selected securities.
The emphasis is upon common stocks. The Fund's and the Portfolio's investment
objectives are nonfundamental and may be changed when authorized by a vote of
the Tustees of the Trust or the Portfolio, respectively, without obtaining the
approval of the Fund's shareholders or the investors in the Portfolio, as the
case may be. The Trustees of the Trust have no present intention to change the
Fund's objective and intend to submit any proposed material change in the
investment objective to shareholders in advance for their approval.
HOW THE FUND AND THE PORTFOLIO INVEST THEIR
ASSETS; RISKS
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THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING IN THE
PORTFOLIO. TO ACHIEVE THE PORTFOLIO'S OBJECTIVE, PRIMARY EMPHASIS WILL BE PLACED
ON COMMON STOCKS OF COMPANIES WHICH APPEAR TO OFFER GOOD PROSPECTS FOR INCREASES
IN BOTH EARNINGS AND DIVIDENDS. The Portfolio will invest primarily (i.e., at
least 65% of its total assets during normal investment conditions) in equity
securities (common and preferred stocks, and securities convertible into common
stocks). The Portfolio's investments in convertible debt securities will be
limited to 20% of net assets. The criteria for such investments are the same as
those used for the common stock of the issuer and accordingly, may be of any
credit quality (including below investment grade). The Portfolio purchases
securities primarily for investment, rather than with a view to realizing
trading profits. Nevertheless, portfolio changes are made whenever considered
advisable in the pursuit of the Portfolio's stated investment objective.
In seeking to achieve its investment objective, or to consolidate growth
previously attained, the Portfolio may from time to time purchase bonds,
preferred stocks, U.S. Government obligations and other securities. Bonds will
constitute 5% or less of net assets and be investment grade (rated Baa or higher
by Moody's Investors Service, Inc. or BBB or higher by Standard & Poor's Ratings
Group or, if unrated, determined to be of comparable quality by the Portfolio's
Investment Adviser). Convertible debt securities that are not investment grade
have speculative characteristics and changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity to make principal
and interest payments than is the case with higher grade debt securities.
The Portfolio may invest in securities issued by foreign companies
(including American Depository Receipts and Global Depository Receipts). Such
investments may be subject to various risks such as fluctuations in currency and
exchange rates, foreign taxes, social, political and economic conditions in the
countries in which such companies operate, and changes in governmental, economic
or monetary policies both here and abroad. There may be less publicly available
information about a foreign company than about a comparable domestic company.
Because the securities markets in many foreign countries are not as developed as
those in the United States, the securities of many foreign companies are less
liquid and their prices are more volatile than securities of comparable domestic
companies. In order to hedge against possible variations in foreign exchange
rates pending the settlement of foreign securities transactions, the Portfolio
may buy or sell foreign currencies.
An investment in the Fund entails the risk that the principal value of Fund
shares and the income earned thereon may not increase or may decline. The
Portfolio's investments in equity securities are subject to the risk of adverse
developments affecting particular companies or industries and the stock market
generally. Investments in bonds are subject to the risk that the issuer may
default on its obligations to pay principal and interest. The value of bonds
tends to increase during periods of falling interest rates and to decline during
periods of rising interest rates. By investing in a diversified portfolio of
securities, the Portfolio seeks both to reduce the risks ordinarily inherent in
holding one security or securities of a single issuer and to improve the
prospects for possible growth by investing in a substantial number of prudently
selected securities. Attainment of the Portfolio's objective cannot, of course,
be assured since its asset value fluctuates with changes in the market value of
its investments and dividends paid depend upon income received by the Portfolio.
The Fund and the Portfolio have adopted certain fundamental investment
restrictions which are enumerated in detail in the Statement of Additional
Information and which may not be changed unless authorized by a shareholder vote
or an investor vote, respectively. Except for such enumerated restrictions and
as otherwise indicated in this Prospectus, the investment objective and policies
of the Fund and the Portfolio are not fundamental policies and accordingly may
be changed by the Trustees of the Trust and the Portfolio without obtaining the
approval of the Fund's shareholders or the investors in the Portfolio, as the
case may be. If any changes were made in the Fund's investment objective, the
Fund might have an investment objective different from the objective which an
investor considered appropriate at the time the investor became a shareholder of
the Fund.
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THE FUND IS NOT INTENDED TO BE A COMPLETE INVESTMENT PROGRAM, AND
PROSPECTIVE INVESTORS SHOULD TAKE INTO ACCOUNT THEIR OBJECTIVES AND OTHER
INVESTMENTS WHEN CONSIDERING THE PURCHASE OF FUND SHARES. THE FUND CANNOT
ELIMINATE RISK OR ASSURE ACHIEVEMENT OF ITS OBJECTIVE.
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ORGANIZATION OF THE FUND AND THE PORTFOLIO
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THE FUND IS A DIVERSIFIED SERIES OF EATON VANCE SECURITIES TRUST, A BUSINESS
TRUST ESTABLISHED UNDER MASSACHUSETTS LAW PURSUANT TO A DECLARATION OF TRUST
DATED OCTOBER 19, 1990, AS AMENDED, AS THE SUCCESSOR TO A MASSACHUSETTS TRUST
WHICH COMMENCED ITS INVESTMENT COMPANY OPERATIONS IN 1931. THE TRUST IS A MUTUAL
FUND -- AN OPEN-END MANAGEMENT INVESTMENT COMPANY. The Trustees of the Trust are
responsible for the overall management and supervision of its affairs. The Trust
may issue an unlimited number of shares of beneficial interest (no par value per
share) in one or more series and because the Trust can offer separate series
(such as the Fund) it is known as a "series company". Each share represents an
equal proportionate beneficial interest in the Fund. When issued and
outstanding, the shares are fully paid and nonassessable by the Trust and
redeemable as described under "How to Redeem Fund Shares". Shareholders are
entitled to one vote for each full share held. Fractional shares may be voted
proportionately. Shares have no preemptive or conversion rights and are freely
transferable. In the event of the liquidation of the Fund, shareholders are
entitled to share pro rata in the net assets of the Fund available for
distribution to shareholders.
THE PORTFOLIO IS ORGANIZED AS A TRUST UNDER THE LAWS OF THE STATE OF NEW
YORK AND INTENDS TO BE TREATED AS A PARTNERSHIP FOR FEDERAL TAX PURPOSES. The
Portfolio, as well as the Trust, intends to comply with all applicable Federal
and state securities laws. The Portfolio's Declaration of Trust provides that
the Fund and other entities permitted to invest in the Portfolio (e.g., other
U.S. and foreign investment companies, and common and commingled trust funds)
will each be liable for all obligations of the Portfolio. However, the risk of
the Fund incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance exists and the Portfolio itself
is unable to meet its obligations. Accordingly, the Trustees of the Trust
believe that neither the Fund nor its shareholders will be adversely affected by
reason of the Fund investing in the Portfolio.
SPECIAL INFORMATION ON THE FUND/PORTFOLIO INVESTMENT STRUCTURE. An investor in
the Fund should be aware that the Fund, unlike mutual funds which directly
acquire and manage their own portfolios of securities, seeks to achieve its
investment objective by investing its assets in an interest in the Portfolio
(although the Fund may temporarily hold a de minimus amount of cash), which is a
separate investment company with an identical investment objective. Therefore,
the Fund's interest in the securities owned by the Portfolio is indirect. In
addition to selling an interest to the Fund, the Portfolio may sell interests to
other affiliated and non-affiliated mutual funds or institutional investors.
Such investors will invest in the Portfolio on the same terms and conditions and
will pay a proportionate share of the Portfolio's expenses. However, the other
investors investing in the Portfolio are not required to sell their shares at
the same public offering price as the Fund due to variations in sales
commissions and other operating expenses. Therefore, investors in the Fund
should be aware that these differences may result in differences in returns
experienced by investors in the various funds that invest in the Portfolio. Such
differences in returns are also present in other mutual fund structures,
including funds that have multiple classes of shares. For information regarding
the investment objective, policies and restrictions, see "The Fund's Investment
Objective" and "How the Fund and the Portfolio Invest their Assets; Risks".
Further information regarding investment practices may be found in the Statement
of Additional Information.
The Trustees of the Trust have considered the advantages and disadvantages
of investing the assets of the Fund in the Portfolio, as well as the advantages
and disadvantages of the two-tier format. The Trustees believe that the
structure offers opportunities for substantial growth in the assets of the
Portfolio, and affords the potential for economies of scale for the Fund.
The Fund may withdraw (completely redeem) all its assets from the Portfolio
at any time if the Board of Trustees of the Trust determines that it is in the
best interest of the Fund to do so. The investment objective and the
nonfundamental investment policies of the Fund and the Portfolio may be changed
by the Trustees of the Trust and the Portfolio without obtaining the approval of
the shareholders of the Fund or the investors in the Portfolio, as the case may
be. Any such change of the investment objective will be preceded by thirty days'
advance written notice to the shareholders of the Fund or the investors in the
Portfolio, as the case may be. If a shareholder redeems shares because of a
change in the nonfundamental objective or policies of the Fund, those shares may
be subject to a contingent deferred sales charge, as described in "How to Redeem
Fund Shares". In the event the Fund withdraws all of its assets from the
Portfolio, or the Board of Trustees of the Trust determines that the investment
objective of the Portfolio is no longer consistent with the investment objective
of the Fund, such Trustees would consider what action might be taken, including
investing the assets of the Fund in another pooled investment entity or
retaining an investment adviser to manage the Fund's assets in accordance with
its investment objective. The Fund's investment performance may be affected by a
withdrawal of all its assets from the Portfolio.
Information regarding other pooled investment entities or funds which invest
in the Portfolio may be obtained by contacting Eaton Vance Distributors, Inc.
(the "Principal Underwriter" or "EVD"), 24 Federal Street, Boston, MA 02110,
(617) 482-8260. Smaller investors in the Portfolio may be adversely affected by
the actions of larger investors in the Portfolio. For example, if a large
investor withdraws from the Portfolio, the remaining investors may experience
higher pro rata operating expenses, thereby producing lower returns.
Additionally, the Portfolio may become less diverse, resulting in increased
portfolio risk, and experience decreasing economies of scale. However, this
possibility exists as well for historically structured funds which have large or
institutional investors.
Until recently, the Administrator sponsored and advised historically
structured funds. Funds which invest all their assets in interests in a separate
investment company are a relatively new development in the mutual fund industry
and, therefore, the Fund may be subject to additional regulations than
historically structured funds.
The Declaration of Trust of the Portfolio provides that the Portfolio will
terminate 120 days after the complete withdrawal of the Fund or any other
investor in the Portfolio, unless either the remaining investors, by unanimous
vote at a meeting of such investors, or a majority of the Trustees of the
Portfolio, by written instrument consented to by all investors, agree to
continue the business of the Portfolio. This provision is consistent with
treatment of the Portfolio as a partnership for Federal income tax purposes. See
"Distributions and Taxes" for further information. Whenever the Fund as an
investor in the Portfolio is requested to vote on matters pertaining to the
Portfolio (other than the termination of the Portfolio's business, which may be
determined by the Trustees of the Portfolio without investor approval), the Fund
will hold a meeting of Fund shareholders and will vote its interest in the
Portfolio for or against such matters proportionately to the instructions to
vote for or against such matters received from Fund shareholders. The Fund shall
vote shares for which it receives no voting instructions in the same proportion
as the shares for which it receives voting instructions. Other investors in the
Portfolio may alone or collectively acquire sufficient voting interests in the
Portfolio to control matters relating to the operation of the Portfolio, which
may require the Fund to withdraw its investment in the Portfolio or take other
appropriate action. Any such withdrawal could result in a distribution "in kind"
of portfolio securities (as opposed to a cash distribution from the Portfolio).
If securities are distributed, the Fund could incur brokerage, tax or other
charges in converting the securities to cash. In addition, the distribution in
kind may result in a less diversified portfolio of investments or adversely
affect the liquidity of the Fund. Notwithstanding the above, there are other
means for meeting shareholder redemption requests, such as borrowing.
The Trustees of the Trust, including a majority of the noninterested
Trustees, have approved written procedures designed to identify and address any
potential conflicts of interest arising from the fact that the Trustees of the
Trust and the Trustees of the Portfolio are the same. Such procedures require
each Board to take action to resolve any conflict of interest between the Fund
and the Portfolio, and it is possible that the creation of separate Boards may
be considered. For further information concerning the Trustees and officers of
the Trust and the Portfolio, see the Statement of Additional Information.
MANAGEMENT OF THE FUND AND THE PORTFOLIO
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THE PORTFOLIO ENGAGES BOSTON MANAGEMENT AND RESEARCH ("BMR"), A WHOLLY-OWNED
SUBSIDIARY OF EATON VANCE MANAGEMENT ("EATON VANCE"), AS ITS INVESTMENT ADVISER.
EATON VANCE, ITS AFFILIATES AND ITS PREDECESSOR COMPANIES HAVE BEEN MANAGING
ASSETS OF INDIVIDUALS AND INSTITUTIONS SINCE 1924 AND MANAGING INVESTMENT
COMPANIES SINCE 1931.
Acting under the general supervision of the Board of Trustees of the
Portfolio, BMR manages the Portfolio's investments and affairs. Under its
investment advisory agreement with the Portfolio, BMR receives a monthly
advisory fee of 5/96 of 1% (equivalent to 0.625% annually) of the average daily
net assets of the Portfolio. For the period from the start of business, August
1, 1994, to December 31, 1994, the Portfolio paid BMR advisory fees equivalent
to 0.625% (annualized) of the Portfolio's average daily net assets for such
period.
BMR also furnishes for the use of the Portfolio office space and all
necessary office facilities, equipment and personnel for servicing the
investments of the Portfolio. The Portfolio is responsible for the payment of
all of its expenses other than those expressly stated to be payable by BMR under
the investment advisory agreement.
BMR places the portfolio transactions of the Portfolio for execution with
many broker-dealer firms and uses its best efforts to obtain execution of such
transactions at prices which are advantageous to the Portfolio and at reasonably
competitive commission rates. Subject to the foregoing, BMR may consider sales
of shares of the Fund or of other investment companies sponsored by BMR or Eaton
Vance as a factor in the selection of broker-dealer firms to execute portfolio
transactions.
Duncan W. Richardson has acted as the portfolio manager of the Portfolio
since it commenced operations. He has been a Vice President of Eaton Vance since
1987 and of BMR since 1992.
BMR OR EATON VANCE ACTS AS INVESTMENT ADVISER TO INVESTMENT COMPANIES AND
VARIOUS INDIVIDUAL AND INSTITUTIONAL CLIENTS WITH ASSETS UNDER MANAGEMENT OF
APPROXIMATELY $15 BILLION. Eaton Vance is a wholly-owned subsidiary of Eaton
Vance Corp., a publicly held holding company. Eaton Vance Corp., through its
subsidiaries and affiliates, engages in investment management and marketing
activities, fiduciary and banking services, oil and gas operations, real estate
investment, consulting and management, and development of precious metals
properties.
The Trust has retained the services of Eaton Vance to act as Administrator
of the Fund. The Trust has not retained the services of an investment adviser
since the Trust seeks to achieve the investment objective of the Fund by
investing the Fund's assets in the Portfolio. As Administrator, Eaton Vance
provides the Fund with general office facilities and supervises the overall
administration of the Fund. For these services Eaton Vance currently receives no
compensation. The Trustees of the Trust may determine, in the future, to
compensate Eaton Vance for such services.
The Portfolio and the Fund, as the case may be, will each be responsible for
all of its respective costs and expenses not expressly stated to be payable by
BMR under the investment advisory agreement, by Eaton Vance under the
administrative services agreement, or by EVD under the distribution agreement.
Such costs and expenses to be borne by the Portfolio and the Fund, as the case
may be, include, without limitation: custody and transfer agency fees and
expenses, including those incurred for determining net asset value and keeping
accounting books and records; expenses of pricing and valuation services; the
cost of share certficates; membership dues in investment company organizations;
expenses of acquiring, holding and disposing of securities and other
investments; fees and expenses of registering under the securities laws and the
governmental fees; expenses of reporting to shareholders and investors; proxy
statements and other expenses of shareholders' or investors' meetings; insurance
premiums; printing and mailing expenses; interest, taxes and corporate fees;
legal and accounting expenses; compensation and expenses of Trustees not
affiliated with BMR or Eaton Vance; and investment advisory fees, and, if any,
administrative services fees. The Portfolio and the Fund will also each bear
expenses incurred in connection with litigation in which the Portfolio or the
Fund, as the case may be, is a party and any legal obligation to indemnify its
respective officers and Trustees with respect thereto.
DISTRIBUTION PLAN
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THE FUND FINANCES DISTRIBUTION ACTIVITIES AND HAS ADOPTED A DISTRIBUTION PLAN
(THE "PLAN") PURSUANT TO RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940.
Rule 12b-1 permits a mutual fund, such as the Fund, to finance distribution
activities and bear expenses associated with the distribution of its shares
provided that any payments made by the Fund are made pursuant to a written plan
adopted in accordance with the Rule. The Plan is subject to, and complies with,
the sales charge rule of the National Association of Securities Dealers, Inc.
(the "NASD Rule"). The Plan is described further in the Statement of Additional
Information, and the following is a description of the salient features of the
Plan. The Plan provides that the Fund, subject to the NASD Rule, will pay sales
commissions and distribution fees to the Principal Underwriter only after and as
a result of the sale of shares of the Fund. On each sale of Fund shares
(excluding reinvestment of distributions) the Fund will pay the Principal
Underwriter amounts representing (i) sales commissions equal to 6.25% of the
amount received by the Fund for each share sold and (ii) distribution fees
calculated by applying the rate of 1% over the prime rate then reported in The
Wall Street Journal to the outstanding balance of Uncovered Distribution Charges
(as described below) of the Principal Underwriter. On sales of shares made prior
to January 30, 1995, the Principal Underwriter currently pays monthly sales
commissions to a financial service firm (an "Authorized Firm") in amounts
anticipated to be equivalent to .75%, annualized, of the assets maintained in
the Fund by the customers of such Firm. On sales of shares made on January 30,
1995 and thereafter, the Principal Underwriter currently expects to pay to an
Authorized Firm (a) sales commissions (except on exchange transactions and
reinvestments) at the time of sale equal to .75% of the purchase price of the
shares sold by such Firm, and (b) monthly sales commissions approximately
equivalent to 1/12 of .75% of the value of shares sold by such Firm and
remaining outstanding for at least one year. The Plan is designed to permit an
investor to purchase Fund shares through an Authorized Firm without incurring an
initial sales charge and at the same time permit the Principal Underwriter to
compensate Authorized Firms in connection with the sale of Fund shares.
THE NASD RULE REQUIRES THE FUND TO LIMIT ITS ANNUAL PAYMENTS OF SALES
COMMISSIONS AND DISTRIBUTION FEES TO THE PRINCIPAL UNDERWRITER TO AN AMOUNT NOT
EXCEEDING .75% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR EACH FISCAL YEAR.
Under its Plan the Fund accrues daily an amount at the rate of 1/365 of .75% of
the Fund's net assets, and pays such accrued amounts monthly to the Principal
Underwriter. The Plan requires such accruals to be automatically discontinued
during any period in which there are no outstanding Uncovered Distribution
Charges under the Plan. Uncovered Distribution Charges are calculated daily and,
briefly, are equivalent to all unpaid sales commissions and distribution fees to
which the Principal Underwriter is entitled under the Plan less all contingent
deferred sales charges theretofore paid to the Principal Underwriter. The Eaton
Vance organization may be considered to have realized a profit under the Plan if
at any point in time the aggregate amounts of all payments made to the Principal
Underwriter pursuant to the Plan, including any contingent deferred sales
charges, have exceeded the total expenses theretofore incurred by such
organization in distributing shares of the Fund. Total expenses for this purpose
will include an allocable portion of the overhead costs of such organization and
its branch offices.
The amount payable by the Fund to the Principal Underwriter pursuant to the
Plan with respect to each day will be accrued on such day as a liability of the
Fund and will accordingly reduce the Fund's net assets upon such accrual, all in
accordance with generally accepted accounting principles. The amount payable on
each day is limited to 1/365 of .75% of the Fund's net assets on such day. The
level of the Fund's net assets changes each day and depends upon the amount of
sales and redemptions of Fund shares, the changes in the value of the
investments held by the Portfolio, the expenses of the Fund and the Portfolio
accrued and allocated to the Fund on such day, income on portfolio investments
of the Portfolio accrued and allocated to the Fund on such day, and any
dividends and distributions declared on Fund shares. The Fund does not accrue
possible future payments as a liability of the Fund or reduce the Fund's current
net assets in respect of unknown amounts which may become payable under the Plan
in the future because the standards for accrual of a liability under such
accounting principles have not been satisfied.
The Plan provides that the Fund will receive all contingent deferred sales
charges and will make no payments to the Principal Underwriter in respect of any
day on which there are no outstanding Uncovered Distribution Charges of the
Principal Underwriter. Contingent deferred sales charges and accrued amounts
will be paid by the Fund to the Principal Underwriter whenever there exist
Uncovered Distribution Charges under the Plan.
The provisions of the Plan relating to payments of sales commissions and
distribution fees to the Principal Underwriter are also included in the
Distribution Agreement between the Trust on behalf of the Fund and the Principal
Underwriter. The Plan continues in effect through and including April 28, 1995,
and shall continue in effect indefinitely thereafter for so long as such
continuance is approved at least annually by the vote of both a majority of (i)
the Trustees of the Trust who are not interested persons of the Trust and who
have no direct or indirect financial interest in the operation of the Plan or
any agreements related to the Plan (the "Rule 12b-1 Trustees") and (ii) all of
the Trustees then in office, and the Distribution Agreement contains a similar
provision. The Plan and Distribution Agreement may be terminated at any time by
vote of a majority of the Rule 12b-1 Trustees or by a vote of a majority of the
outstanding voting securities of the Fund.
Periods with a high level of sales of Fund shares accompanied by a low level
of early redemptions of Fund shares resulting in the imposition of contingent
deferred sales charges will tend to increase the time during which there will
exist Uncovered Distribution Charges of the Principal Underwriter. Conversely,
periods with a low level of sales of Fund shares accompanied by a high level of
early redemptions of Fund shares resulting in the imposition of contingent
deferred sales charges will tend to reduce the time during which there will
exist Uncovered Distribution Charges of the Principal Underwriter.
Because of the NASD Rule limitation on the amount of sales commissions and
distribution fees paid to the Principal Underwriter during any fiscal year, a
high level of sales of Fund shares during the initial years of the Fund's
operations would cause a large portion of the sales commission attributable to a
sale of Fund shares to be accrued and paid by the Fund to the Principal
Underwriter in fiscal years subsequent to the year in which such shares were
sold. This spreading of sales commissions payments under the Plan over an
extended period would result in the incurrence and payment of increased
distribution fees under the Plan. For the period from the start of business,
November 4, 1994, to December 31, 1994, the Fund paid or accrued sales
commissions under the Plan equivalent to .75% (annualized) of the Fund's average
daily net assets for such period. As at December 31, 1994, the Uncovered
Distribution Charges of the Principal Underwriter calculated under the Plan
amounted to approximately $8,794 (equivalent to 6.04% of the Fund's net assets
on such day).
THE PLAN ALSO AUTHORIZES THE FUND TO MAKE PAYMENTS OF SERVICE FEES TO THE
PRINCIPAL UNDERWRITER, AUTHORIZED FIRMS AND OTHER PERSONS IN AMOUNTS NOT
EXCEEDING .25% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR EACH FISCAL YEAR. The
Trustees of the Trust have initially implemented the Plan by authorizing the
Fund to make monthly service fee payments to the Principal Underwriter in
amounts not expected to exceed .25% of the Fund's average daily net assets for
any fiscal year. The Fund accrues the service fee daily at the rate of 1/365 of
.25% of the Fund's net assets. On sales of shares made prior to January 30,
1995, the Principal Underwriter currently makes monthly service fee payments to
an Authorized Firm in amounts anticipated to be equivalent to .25%, annualized,
of the assets maintained in the Fund by the customers of such Firm. On sales of
shares made on January 30, 1995 and thereafter, the Principal Underwriter
currently expects to pay to an Authorized Firm (a) a service fee (except on
exchange transactions and reinvestments) at the time of sale equal to .25% of
the purchase price of the shares sold by such Firm, and (b) monthly service fees
approximately equivalent to 1/12 of .25% of the value of shares sold by such
Firm and remaining outstanding for at least one year. During the first year
after a purchase of Fund shares, the Principal Underwriter will retain the
service fee as reimbursement for the service fee payment made to the Authorized
Firm at the time of sale. As permitted by the NASD Rule, all service fee
payments are made for personal services and/or the maintenance of shareholder
accounts. Service fees are separate and distinct from the sales commissions and
distribution fees payable by the Fund to the Principal Underwriter, and as such
are not subject to automatic discontinuance when there are no outstanding
Uncovered Distribution Charges of the Principal Underwriter. For the period from
the start of business, November 4, 1994, to December 31, 1994, the Fund paid or
accrued service fees under the Plan equivalent to .25% (annualized) of the
Fund's average daily net assets for such period. On sales of shares made on
January 30, 1995 and thereafter, the Fund expects to begin accruing for its
service fee for the benefit of Authorized Firms during the thirteenth month
following a sale of Fund shares.
As currently implemented by the Trustees, the Plan authorizes payments of
sales commissions, distribution fees and service fees to the Principal
Underwriter which may be equivalent, on an aggregate basis during any fiscal
year of the Fund, to 1% of the Fund's average daily net assets for such year.
The Fund believes that the combined rate of all these payments may be higher
than the rate of payments made under distribution plans adopted by other
investment companies pursuant to Rule 12b-1. Although the Principal Underwriter
will use its own funds (which may be borrowed from banks) to pay sales
commissions and service fees at the time of sale, it is anticipated that the
Eaton Vance organization will profit by reason of the operation of the Plan
through increases in the Fund's assets (thereby increasing the advisory fees
payable to BMR by the Portfolio) resulting from sales of Fund shares and through
amounts paid under the Plan to the Principal Underwriter and contingent deferred
sales charges paid to the Principal Underwriter.
The Principal Underwriter may, from time to time, at its own expense,
provide additional incentives to Authorized Firms which employ registered
representatives who sell a minimum dollar amount of the Fund's shares and/or
shares of other funds distributed by the Principal Underwriter. In some
instances, such additional incentives may be offered only to certain Authorized
Firms whose representatives are expected to sell significant amounts of shares.
In addition, the Principal Underwriter may from time to time increase or
decrease the sales commissions payable to Authorized Firms.
The Fund may, in its absolute discretion, suspend, discontinue or limit the
offering of its shares at any time. In determining whether any such action
should be taken, the Fund's management intends to consider all relevant factors,
including without limitation the size of the Fund, the investment climate and
market conditions, the volume of sales and redemptions of Fund shares, and the
amount of Uncovered Distribution Charges of the Principal Underwriter. The Plan
may continue in effect and payments may be made under the Plan following any
such suspension, discontinuance or limitation of the offering of Fund shares;
however, the Fund is not contractually obligated to continue the Plan for any
particular period of time. Suspension of the offering of Fund shares would not,
of course, affect a shareholder's ability to redeem shares.
VALUING FUND SHARES
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THE FUND VALUES ITS SHARES ONCE ON EACH DAY THE NEW YORK STOCK EXCHANGE (THE
"EXCHANGE") IS OPEN FOR TRADING, as of the close of regular trading on the
Exchange (normally 4:00 p.m. New York time). The Fund's net asset value per
share is determined by its custodian, Investors Bank & Trust Company ("IBT"),
(as agent for the Fund) in the manner authorized by the Trustees of the Trust.
Net asset value is computed by dividing the value of the Fund's total assets,
less its liabilities, by the number of shares outstanding. Because the Fund
invests its assets in an interest in the Portfolio, the Fund's net asset value
will reflect the value of its interest in the Portfolio (which, in turn,
reflects the underlying value of the Portfolio's assets and liabilities).
Authorized Firms must communicate an investor's order to the Principal
Underwriter prior to the close of the Principal Underwriter's business day to
receive that day's net asset value per Fund share. It is the Authorized Firms'
responsibility to transmit orders promptly to the Principal Underwriter, which
is a wholly-owned subsidiary of Eaton Vance.
The Portfolio's net asset value is also determined as of the close of
regular trading on the Exchange by IBT (as custodian and agent for the
Portfolio) in the manner authorized by the Trustees of the Portfolio. Net asset
value is computed by subtracting the liabilities of the Portfolio from the value
of its total assets. Securities listed on securities exchanges or in the NASDAQ
National Market are valued at closing sale prices. Unlisted or listed securities
for which closing sale prices are not available are valued at the mean between
the latest bid and asked prices. Securities for which market quotations are
unavailable, including any security the disposition of which is restricted under
the Securities Act of 1933, and other assets will be appraised at their fair
value as determined in good faith by or at the direction of the Trustees of the
Portfolio. Short-term obligations maturing in sixty days or less are valued at
original cost which, when combined with amortized discount or accrued interest,
approximates market. For further information regarding the valuation of an
interest in the Portfolio, see "Determination of Net Asset Value" in the
Statement of Additional Information. Eaton Vance Corp. owns 77.3% of the
outstanding stock of IBT, the Fund's and the Portfolio's custodian.
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SHAREHOLDERS MAY DETERMINE THE VALUE OF THEIR INVESTMENT BY MULTIPLYING
THE NUMBER OF FUND SHARES OWNED BY THE CURRENT NET ASSET VALUE PER SHARE.
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HOW TO BUY FUND SHARES
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SHARES OF THE FUND MAY BE PURCHASED FOR CASH OR MAY BE ACQUIRED IN EXCHANGE FOR
SECURITIES. Investors may purchase shares of the Fund through Authorized Firms
at the net asset value per share of the Fund next determined after an order is
effective. The Fund may suspend the offering of shares at any time and may
refuse an order for the purchase of shares.
An initial investment in the Fund must be at least $1,000. Once an account
has been established the investor may send investments of $50 or more at any
time directly to the Fund's Transfer Agent (the "Transfer Agent") as follows:
The Shareholder Services Group, Inc., BOS725, P.O. Box 1559, Boston, MA 02104.
The $1,000 minimum initial investment is waived for Bank Automated Investing
accounts, which may be established with an investment of $50 or more. See "Eaton
Vance Shareholder Services".
In connection with employee benefit or other continuous group purchase plans
under which the average initial purchase by a participant of the plan is $1,000
or more, the Fund may accept initial investments of less than $1,000 on the part
of an individual participant. In the event a shareholder who is a participant of
such a plan terminates participation in the plan, his or her shares will be
transferred to a regular individual account. However, such account will be
subject to the right of redemption by the Fund as described under "How to Redeem
Fund Shares".
ACQUIRING FUND SHARES IN EXCHANGE FOR SECURITIES. IBT, as escrow agent, will
receive securities acceptable to Eaton Vance, as Administrator, in exchange for
Fund shares at their net asset value as determined above. The minimum value of
securities (or securities and cash) accepted for deposit is $5,000. Securities
accepted will be sold by IBT as agent for the account of their owner on the day
of their receipt by IBT or as soon thereafter as possible. The number of Fund
shares to be issued in exchange for securities will be the aggregate proceeds
from the sale of such securities, divided by the applicable net asset value per
Fund share on the day such proceeds are received. Eaton Vance will use
reasonable efforts to obtain the then current market price for such securities
but does not guarantee the best available price. Eaton Vance will absorb any
transaction costs, such as commissions, on the sale of the securities.
Securities determined to be acceptable should be transferred via book entry
or physically delivered, in proper form for transfer, through an Authorized
Firm, together with a completed and signed Letter of Transmittal in approved
form (available from Authorized Firms), as follows:
IN THE CASE OF BOOK ENTRY:
Deliver through Depository Trust Co.
Broker #2212
Investors Bank & Trust Company
For A/C EV Classic Stock Fund
IN THE CASE OF PHYSICAL DELIVERY:
Investors Bank & Trust Company
Attention: EV Classic Stock Fund
Physical Securities Processing Settlement Area
89 South Street
Boston, MA 02111
Investors who are contemplating an exchange of securities for shares of the
Fund, or their representatives, are advised to contact Eaton Vance to determine
whether the securities are acceptable before forwarding such securities to IBT.
Eaton Vance reserves the right to reject any securities. Exchanging securities
for Fund shares may create a taxable gain or loss. Each investor should consult
his or her tax adviser with respect to the particular Federal, state and local
tax consequences of exchanging securities for Fund shares.
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IF YOU DON'T HAVE AN AUTHORIZED FIRM, EATON VANCE CAN RECOMMEND ONE.
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HOW TO REDEEM FUND SHARES
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A SHAREHOLDER MAY REDEEM FUND SHARES BY DELIVERING TO THE SHAREHOLDER SERVICES
GROUP, INC., BOS725, P.O. BOX 1559, BOSTON, MASSACHUSETTS 02104, during its
business hours a written request for redemption in good order, plus any share
certificates with executed stock powers. The redemption price will be based on
the net asset value per Fund share next computed after such delivery. Good order
means that all relevant documents must be endorsed by the record owner (s)
exactly as the shares are registered and the signature(s) must be guaranteed by
a member of either the Securities Transfer Association's STAMP program or the
New York Stock Exchange's Medallion Signature Program, or certain banks, savings
and loan institutions, credit unions, securities dealers, securities exchanges,
clearing agencies and registered securities associations as required by a
regulation of the Securities and Exchange Commission (the "Commission") and
acceptable to The Shareholder Services Group, Inc. In addition, in some cases,
good order may require the furnishing of additional documents such as where
shares are registered in the name of a corporation, partnership or fiduciary.
Within seven days after receipt of a redemption request in good order by The
Shareholder Services Group, Inc., the Fund will make payment in cash for the net
asset value of the shares as of the date determined above, reduced by the amount
of any applicable contingent deferred sales charge (described below) and any
Federal income tax required to be withheld. Although the Fund normally expects
to make payment in cash for redeemed shares, the Trust, subject to compliance
with applicable regulations, has reserved the right to pay the redemption price
of shares of the Fund, either totally or partially, by a distribution in kind of
readily marketable securities withdrawn by the Fund from the Portfolio. The
securities so distributed would be valued pursuant to the Portfolio's valuation
procedures. If a shareholder received a distribution in kind, the shareholder
could incur brokerage or other charges in converting the securities to cash.
To sell shares at their net asset value through an Authorized Firm (a
repurchase), a shareholder can place a repurchase order with the Authorized
Firm, which may charge a fee. The value of such shares is based upon the net
asset value calculated after EVD, as the Fund's agent, receives the order. It is
the Authorized Firm's responsibility to transmit promptly repurchase orders to
EVD. Throughout this Prospectus, with word "redemption" is generally meant to
include a repurchase.
If shares were recently purchased, the proceeds of redemption (or
repurchase) will not be sent until the check (including a certified or cashier's
check) received for the shares purchased has cleared. Payment for shares
tendered for redemption may be delayed up to 15 days from the purchase date when
the purchase check has not yet cleared. Redemptions or repurchases may result in
a taxable gain or loss.
Due to the high cost of maintaining small accounts, the Fund reserves the
right to redeem accounts with balances of less than $1,000. Prior to such a
redemption, shareholders will be given 60 days' written notice to make an
additional purchase. Thus, an investor making an initial investment of $1,000
would not be able to redeem shares without being subject to this policy.
However, no such redemption would be required by the Fund if the cause of the
low account balance was a reduction in the net asset value of Fund shares. No
contingent deferred sales charge will be imposed with respect to such
involuntary redemptions.
CONTINGENT DEFERRED SALES CHARGE. Shares purchased on or after January 30, 1995
and redeemed within the first year of their purchase (except shares acquired
through the reinvestment of distributions) generally will be subject to a
contingent deferred sales charge. This contingent deferred sales charge is
imposed on any redemption the amount of which exceeds the aggregate value at the
time of redemption of (a) all shares in the account purchased more than one year
prior to the redemption, (b) all shares in the account acquired through
reinvestment of distributions, and (c) the increase, if any, of value of all
other shares in the account (namely those purchased within the year preceding
the redemption) over the purchase price of such shares. Redemptions are
processed in a manner to maximize the amount of redemption proceeds which will
not be subject to a contingent deferred sales charge. That is, each redemption
will be assumed to have been made first from the exempt amounts referred to in
clauses (a), (b) and (c) above, and second through liquidation of those shares
in the account referred to in clause (c) on a first-in-first- out basis. Any
contingent deferred sales charge which is required to be imposed on share
redemptions will be equal to 1% of the net asset value of redeemed shares.
In calculating the contingent deferred sales charge upon the redemption of
Fund shares acquired in an exchange for shares of a fund currently listed under
"The Eaton Vance Exchange Privilege," the purchase of Fund shares acquired in
the exchange is deemed to have occurred at the time of the original purchase of
the exchanged shares.
No contingent deferred sales charge will be imposed on Fund shares which
have been sold to Eaton Vance or its affiliates, or to their respective
employees or clients. The contingent deferred sales charge will also be waived
for shares redeemed (1) pursuant to a Withdrawal Plan (see "Eaton Vance
Shareholder Services"), (2) as part of a distribution from a retirement plan
qualified under Section 401, 403(b) or 457 of the Internal Revenue Code of 1986,
as amended (the "Code"), or (3) as part of a minimum required distribution from
other tax-sheltered retirement plans. The contingent deferred sales charge will
be paid to the Principal Underwriter or the Fund. When paid to the Principal
Underwriter it will reduce the amount of Uncovered Distribution Charges
calculated under the Fund's Distribution Plan. See "Distribution Plan."
REPORTS TO SHAREHOLDERS
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THE FUND WILL ISSUE TO ITS SHAREHOLDERS SEMI-ANNUAL AND ANNUAL REPORTS
CONTAINING FINANCIAL STATEMENTS. Financial statements included in annual reports
are audited by the Fund's independent accountants. Shortly after the end of each
calendar year, the Fund will furnish all shareholders with information necessary
for preparing Federal and state tax returns.
THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS
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AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF FUND SHARES, THE FUND'S TRANSFER
AGENT, THE SHAREHOLDER SERVICES GROUP, INC., WILL SET UP A LIFETIME INVESTING
ACCOUNT FOR THE INVESTOR ON THE FUND'S RECORDS. This account is a complete
record of all transactions between the investor and the Fund which at all times
shows the balance of shares owned. The Fund will not issue share certificates
except upon request.
Each time a transaction takes place in a shareholder's account, the
shareholder will receive a statement showing complete details of the transaction
and the current balance in the account. (Under certain investment plans,
statements may be sent only quarterly). THE LIFETIME INVESTING ACCOUNT ALSO
PERMITS A SHAREHOLDER TO MAKE ADDITIONAL INVESTMENTS IN SHARES BY SENDING A
CHECK FOR $50 OR MORE to The Shareholder Services Group, Inc.
Any questions concerning a shareholder's account or services available may
be directed by telephone to EATON VANCE SHAREHOLDER SERVICES at 800-225-6265,
extension 2 or in writing to The Shareholder Services Group, Inc., BOS725, P.O.
Box 1559, Boston, MA 02104 (please provide the name of the shareholder, the Fund
and the account number).
THE FOLLOWING DISTRIBUTION OPTIONS WILL BE AVAILABLE TO ALL LIFETIME
INVESTING ACCOUNTS and may be changed as often as desired by written notice to
the Fund's dividend disbursing agent, The Shareholder Services Group, Inc.,
BOS725, P.O. Box 1559, Boston, MA 02104. The currently effective option will
appear on each confirmation statement.
Share Option -- Dividends and capital gains will be reinvested in additional
shares.
Income Option -- Dividends will be paid in cash, and capital gains will be
reinvested in additional shares.
Cash Option -- Dividends and capital gains will be paid in cash.
The Share Option will be assigned if no other option is specified.
Distributions, including those reinvested, will be reduced by any withholding
required under Federal income tax laws.
If the Income Option or Cash Option has been selected, dividend and/or
capital gains distribution checks which are returned by the United States Postal
Service as not deliverable or which remain uncashed for six months or more will
be reinvested in the account in shares at the then current net asset value.
Furthermore, the distribution option on the account will be automatically
changed to the Share Option until such time as the shareholder selects a
different option.
DISTRIBUTION INVESTMENT OPTION. In addition to the distribution options set
forth above, dividends and/or capital gains may be invested in additional shares
of another Eaton Vance fund. Before selecting this option, a shareholder should
obtain a prospectus of the other Eaton Vance fund and consider its objectives
and policies carefully.
"STREET NAME" ACCOUNTS. If shares of the Fund are held in a "street name"
account with an Authorized Firm, all recordkeeping, transaction processing and
payments of distributions relating to the beneficial owner's account will be
performed by the Authorized Firm, and not by the Fund and its Transfer Agent.
Since the Fund will have no record of the beneficial owner's transactions, a
beneficial owner should contact the Authorized Firm to purchase, redeem or
exchange shares, to make changes in or give instructions concerning the account,
or to obtain information about the account. The transfer of shares in a "street
name" account to an account with another dealer or to an account directly with
the Fund involves special procedures and will require the beneficial owner to
obtain historical purchase information about the shares in the account from the
Authorized Firm. Before establishing a "street name" account with an investment
firm, or transferring the account to another investment firm, an investor
wishing to reinvest distributions should determine whether the firm which will
hold the shares allows reinvestment of distributions in "street name" accounts.
------------------------------------------------------------------------------
UNDER A LIFETIME INVESTING ACCOUNT A SHAREHOLDER CAN MAKE ADDITIONAL
INVESTMENTS IN SHARES BY SENDING A CHECK FOR $50 OR MORE.
------------------------------------------------------------------------------
THE EATON VANCE EXCHANGE PRIVILEGE
------------------------------------------------------------------------------
Shares of the Fund currently may be exchanged for shares of one or more other
funds in the Eaton Vance Classic Group of Funds or Eaton Vance Money Market Fund
(available on or about April 3, 1995), which are distributed subject to a
contingent deferred sales charge, on the basis of the net asset value per share
of each fund at the time of the exchange, provided that such exchange offers are
available only in states where shares of the fund being acquired may be legally
sold.
Each exchange must involve shares which have a net asset value of at least
$1,000. The exchange privilege may be changed or discontinued without penalty.
Shareholders will be given sixty (60) days' notice prior to any termination or
material amendment of the exchange privilege. The Fund does not permit the
exchange privilege to be used for "Market Timing" and may terminate the exchange
privilege for any shareholder account engaged in Market Timing activity. Any
shareholder account for which more than two round-trip exchanges are made within
any twelve month period will be deemed to be engaged in Market Timing.
Furthermore, a group of unrelated accounts for which exchanges are entered
contemporaneously by a financial intermediary will be considered to be engaged
in Market Timing.
The Shareholder Services Group, Inc. makes exchanges at the next determined
net asset value after receiving an exchange request in good order (see "How to
Redeem Fund Shares"). Consult The Shareholder Services Group, Inc. for
additional information concerning the exchange privilege. Applications and
prospectuses of other funds are available from Authorized Firms or the Principal
Underwriter. The prospectus for each fund describes its investment objectives
and policies, and shareholders should obtain a prospectus and consider these
objectives and policies carefully before requesting an exchange.
No contingent deferred sales charge is imposed on exchanges. For purposes of
calculating the contingent deferred sales charge upon the redemption of Fund
shares acquired in an exchange, the purchase of shares acquired in one or more
exchanges is deemed to have occurred at the time of the original purchase of the
exchanged shares.
Shares of the other funds in the Eaton Vance Classic Group of Funds (and
shares of Eaton Vance Money Market Fund (when available) acquired as the result
of an exchange from an EV Classic fund) may be exchanged for Fund shares on the
basis of the net asset value per share of each fund at the time of the exchange,
but subject to any restrictions or qualifications set forth in the current
prospectus of any such fund.
Telephone exchanges are accepted by The Shareholder Services Group, Inc.,
provided that the investor has not disclaimed in writing the use of the
privilege. To effect such exchanges, call The Shareholder Services Group, Inc.
at 800-262-1122 or, within Massachusetts, 617-573-9403, Monday through Friday,
9:00 a.m. to 4:00 p.m. (Eastern Standard Time). Shares acquired by telephone
exchange must be registered in the same name(s) and with the same address as the
shares being exchanged. Neither the Fund, the Principal Underwriter nor The
Shareholder Services Group, Inc. will be responsible for the authenticity of
exchange instructions received by telephone, provided that reasonable procedures
to confirm that instructions communicated are genuine have been followed.
Telephone instructions will be tape recorded. In times of drastic economic or
market changes, a telephone exchange may be difficult to implement. An exchange
may result in a taxable gain or loss.
EATON VANCE SHAREHOLDER SERVICES
------------------------------------------------------------------------------
THE FUND OFFERS THE FOLLOWING SERVICES, WHICH ARE VOLUNTARY, INVOLVE NO EXTRA
CHARGE, AND MAY BE CHANGED OR DISCONTINUED WITHOUT PENALTY AT ANY TIME. Full
information on each of the services described below and an application, where
required, are available from Authorized Firms or the Principal Underwriter. The
cost of administering such services for the benefit of shareholders who
participate in them is borne by the Fund as an expense to all shareholders.
INVEST-BY-MAIL -- FOR PERIODIC SHARE ACCUMULATION: Once the $1,000 minimum
investment has been made, checks of $50 or more payable to the order of the Fund
may be mailed directly to The Shareholder Services Group, Inc., BOS725, P.O. Box
1559, Boston, MA 02104 at any time -- whether or not distributions are
reinvested. The name of the shareholder, the Fund and the account number should
accompany each investment.
BANK AUTOMATED INVESTING -- FOR REGULAR SHARE ACCUMULATION: Cash investments of
$50 or more may be made automatically each month or quarter from a shareholder's
bank account. The $1,000 minimum initial investment and small account redemption
policy are waived for these accounts.
WITHDRAWAL PLAN: A shareholder may draw on shareholdings systematically with
monthly or quarterly checks in an aggregate amount that does not exceed annually
12% of the account balance at the time the plan is established. Such amount will
not be subject to a contingent deferred sales charge. See "How to Redeem Fund
Shares." A minimum deposit of $5,000 in shares is required.
REINVESTMENT PRIVILEGE: A SHAREHOLDER WHO HAS REPURCHASED OR REDEEMED SHARES MAY
REINVEST, WITH CREDIT FOR ANY CONTINGENT DEFERRED SALES CHARGES PAID ON THE
REPURCHASED OR REDEEMED SHARES, ANY PORTION OR ALL OF THE REPURCHASE OR
REDEMPTION PROCEEDS (PLUS THAT AMOUNT NECESSARY TO ACQUIRE A FRACTIONAL SHARE TO
ROUND OFF THE PURCHASE TO THE NEAREST FULL SHARE) IN SHARES OF THE FUND,
provided that the reinvestment is effected within 30 days after such repurchase
or redemption. Shares are sold to a reinvesting shareholder at the next
determined net asset value following timely receipt of a written purchase order
by the Principal Underwriter or by the Fund (or by the Fund's Transfer Agent).
To the extent that any shares of the Fund are sold at a loss and the proceeds
are reinvested in shares of the Fund (or other shares of the Fund are acquired
within the period beginning 30 days before and ending 30 days after the date of
the redemption) some or all of the loss generally will not be allowed as a tax
deduction. Shareholders should consult their tax advisers concerning the tax
consequences of reinvestments.
TAX-SHELTERED RETIREMENT PLANS: Shares of the Fund are available for purchase
in connection with the following tax-sheltered retirement plans:
--Pension and Profit Sharing Plans for self-employed individuals,
corporations and non-profit organizations;
--Individual Retirement Account Plans for individuals and their non-
employed spouses; and
--403(b) Retirement Plans for employees of public school systems, hospitals,
colleges and other non-profit organizations meeting certain requirements
of the Code.
Detailed information concerning these plans, including certain exceptions to
minimum investment requirements, and copies of the plans are available from the
Principal Underwriter. This information should be read carefully and
consultation with an attorney or tax adviser may be advisable. The information
sets forth the service fee charged for retirement plans and describes the
Federal income tax consequences of establishing a plan. Under all plans,
dividends and distributions will be automatically reinvested in additional
shares.
DISTRIBUTIONS AND TAXES
------------------------------------------------------------------------------
It is the present policy of the Fund to pay at least quarterly dividends from
net investment income (when available) allocated to the Fund by the Portfolio,
less the Fund's direct and allocated expenses, and to distribute at least
annually any net capital gains realized (the Fund's realized net capital gains
consist of the net realized capital gains from the sale of portfolio securities
allocated to the Fund by the Portfolio).
Shareholders may reinvest dividends, if any, in shares of the Fund at the
current net asset value per share as of the ex-dividend date and may accumulate
capital gains distributions, if any, in additional shares also at the current
net asset value per share as of the ex-dividend date.
Distributions by the Fund of ordinary income and net short-term capital
gains allocated to the Fund by the Portfolio will be taxable to the Fund's
shareholders as ordinary income, whether received in cash or reinvested in
additional shares of the Fund. Shareholders reinvesting such distributions
should treat the amount of the entire distribution as the tax cost basis of the
additional shares acquired by reason of such reinvestment. Distributions of net
long-term capital gains are taxable to shareholders as such, whether received in
cash or reinvested in additional shares of the Fund, and regardless of the
length of time shares have been owned by shareholders. If shares are purchased
shortly before the record date of a distribution, the shareholder will pay the
full price for the shares and then receive some portion of the price back as a
taxable distribution. Certain distributions which are declared in October,
November or December and paid the following January will be reportable by
shareholders as if received on December 31 of the year in which they are
declared.
Shareholders will receive annually tax information notices and Forms 1099 to
assist in the preparation of their Federal and state tax returns for the prior
calendar year's distributions, proceeds from the redemption or exchange of Fund
shares, and Federal income tax (if any) withheld by the Fund's Transfer Agent.
In order to qualify as a regulated investment company under the Code, the
Fund must satisfy certain requirements relating to the sources of its income,
the distribution of its income, and the diversification of its assets. In
satisfying these requirements, the Fund will treat itself as owning its
proportionate share of each of the Portfolio's assets and as entitled to the
income of the Portfolio properly attributable to such share.
------------------------------------------------------------------------------
AS A REGULATED INVESTMENT COMPANY UNDER THE CODE, THE FUND DOES NOT PAY
FEDERAL INCOME OR EXCISE TAXES TO THE EXTENT THAT IT DISTRIBUTES TO
SHAREHOLDERS ITS NET INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS IN
ACCORDANCE WITH THE TIMING REQUIREMENTS IMPOSED BY THE CODE. AS A
PARTNERSHIP UNDER THE CODE, THE PORTFOLIO DOES NOT PAY FEDERAL INCOME OR
EXCISE TAXES.
------------------------------------------------------------------------------
PERFORMANCE INFORMATION
------------------------------------------------------------------------------
FROM TIME TO TIME, THE FUND MAY ADVERTISE ITS AVERAGE ANNUAL TOTAL RETURN. The
Fund's average annual total return is determined by computing the average annual
percentage change in value of $1,000 invested at the maximum public offering
price (net asset value) for specified periods ending with the most recent
calendar quarter, assuming reinvestment of all distributions. The average annual
total return calculation assumes a complete redemption of the investment and the
deduction of any applicable contingent deferred sales charge at the end of the
period. The Fund may also publish annual and cumulative total return figures
from time to time.
Performance figures published by the Fund which do not include the effect of
any applicable contingent deferred sales charge would be reduced if it were
included.
Investors should note that the investment results of the Fund will fluctuate
over time, and any presentation of the Fund's total return for any prior period
should not be considered as a representation of what an investment may earn or
what an investor's total return may be in any future period. If the expenses of
the Fund or the Portfolio are paid by Eaton Vance, the Fund's performance will
be higher.
<PAGE>
INVESTMENT ADVISER OF
STOCK PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV CLASSIC
STOCK FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
AUDITORS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EV CLASSIC
STOCK FUND
24 FEDERAL STREET
BOSTON, MA 02110
C-STP
[LOGO]
EV Classic
Stock
Fund
Prospectus
April 1, 1995
<PAGE>
PART A
INFORMATION REQUIRED IN A PROSPECTUS
EV MARATHON STOCK FUND
EV MARATHON STOCK FUND (THE "FUND") IS A MUTUAL FUND SEEKING GROWTH OF
PRINCIPAL AND INCOME. THE FUND INVESTS ITS ASSETS IN STOCK PORTFOLIO (THE
"PORTFOLIO"), A DIVERSIFIED OPEN-END INVESTMENT COMPANY HAVING THE SAME
INVESTMENT OBJECTIVE AS THE FUND, RATHER THAN BY DIRECTLY INVESTING IN AND
MANAGING ITS OWN PORTFOLIO OF SECURITIES AS WITH HISTORICALLY STRUCTURED MUTUAL
FUNDS. THE FUND IS A SERIES OF EATON VANCE SECURITIES TRUST (THE "TRUST").
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank or other insured depository institution, and are not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other government agency. Shares of the Fund involve
investment risks, including fluctuations in value and the possible loss of some
or all of the principal investment.
This Prospectus is designed to provide you with information you should know
before investing. Please retain this document for future reference. A Statement
of Additional Information dated April 1, 1995 for the Fund, as supplemented from
time to time, has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. This Statement of Additional Information is
available without charge from the Fund's principal underwriter, Eaton Vance
Distributors, Inc. (the "Principal Underwriter"), 24 Federal Street, Boston, MA
02110 (telephone (800) 225-6265). The Portfolio's investment adviser is Boston
Management and Research (the "Investment Adviser"), a wholly-owned subsidiary of
Eaton Vance Management, and Eaton Vance Management is the administrator (the
"Administrator") of the Fund. The offices of the Investment Adviser and the
Administrator are located at 24 Federal Street, Boston, MA 02110.
------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE PAGE
<S> <C> <S> <C>
Shareholder and Fund Expenses ..................... 2 How to Buy Fund Shares ........................ 12
The Fund's Financial Highlights ................... 3 How to Redeem Fund Shares ..................... 13
The Fund's Investment Objective ................... 4 Reports to Shareholders ....................... 15
How the Fund and the Portfolio Invest The Lifetime Investing Account/Distribution
their Assets; Risks ............................. 4 Options ..................................... 15
Organization of the Fund and the Portfolio ........ 5 The Eaton Vance Exchange Privilege ............ 16
Management of the Fund and the Portfolio .......... 7 Eaton Vance Shareholder Services .............. 17
Distribution Plan ................................. 8 Distributions and Taxes ....................... 18
Valuing Fund Shares ............................... 11 Performance Information ....................... 19
------------------------------------------------------------------------------------------------------------
</TABLE>
PROSPECTUS DATED APRIL 1, 1995
<PAGE>
SHAREHOLDER AND FUND EXPENSES \1/
--------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
Sales Charges Imposed on Purchases of Shares None
Sales Charges Imposed on Reinvested Distributions None
Redemption Fees None
Fees to Exchange Shares None
Range of Declining Contingent Deferred Sales Charges Imposed
on Redemptions During the First Six Years (as a percentage
of redemption proceeds exclusive of all reinvestments
and capital appreciation in the account)\2/ 5.00% - 0%
ANNUAL FUND AND ALLOCATED PORTFOLIO OPERATING EXPENSES
(as a percentage of average daily net assets)
Investment Adviser Fee 0.625%
Rule 12b-1 Distribution (and Service) Fees\3/ 0.770%
Other Expenses 0.355%
------
Total Operating Expenses 1.75 %
======
EXAMPLE 1 YEAR 3 YEARS
------ -------
An investor would pay the following contingent deferred
sales charge and expenses on a $1,000 investment, assuming
(a) 5% annual return and (b) redemption at the end of each
time period: $68 $95
An investor would pay the following expenses on the same
investment, assuming (a) 5% annual return and (b)
no redemptions: $18 $55
Notes:
\1/ The purpose of the above table and Example is to summarize the aggregate
expenses of the Fund and the Portfolio and to assist investors in
understanding the various costs and expenses that investors in the Fund will
bear directly or indirectly. The Trustees of the Trust believe that over
time the aggregate per share expenses of the Fund and the Portfolio should
be approximately equal to the per share expenses which the Fund would incur
if the Trust retained the services of an investment adviser and the assets
of the Fund were invested directly in the type of securities being held by
the Portfolio. Because the Fund does not yet have a sufficient operating
history, the percentages indicated as Annual Fund and Allocated Portfolio
Operating Expenses in the table and the amounts included in the Example are
based on the Fund's and the Portfolio's projected fees and expenses for the
current fiscal year ending December 31, 1995. The table and Example should
not be considered a representation of past or future expenses and actual
expenses may be greater or less than those shown. Moreover, while the
Example assumes a 5% annual return, the Fund's actual performance will vary
and may result in an annual return greater or less than 5%. For further
information regarding the expenses of both the Fund and the Portfolio, see
"The Fund's Financial Highlights", "Organization of the Fund and the
Portfolio", "Management of the Fund and the Portfolio" and "How to Redeem
Fund Shares". Because the Fund makes payments under its Distribution Plan
adopted under Rule 12b-1, a long-term shareholder may pay more than the
economic equivalent of the maximum front-end sales charge permitted by a
rule of the National Association of Securities Dealers, Inc. See
"Distribution Plan".
\2/ No contingent deferred sales charge is imposed on (a) shares purchased more
than six years prior to the redemption, (b) shares acquired through the
reinvestment of distributions or (c) any appreciation in value of other
shares in the account (see "How to Redeem Fund Shares"), and no such charge
is imposed on exchanges of Fund shares for shares of one or more other funds
listed under "The Eaton Vance Exchange Privilege".
\3/ The Fund expects to begin accruing for its service fee payments during the
quarter ending September 30, 1995.
\4/ Other investment companies with different distribution arrangements and fees
are investing in the Portfolio and additional such companies may do so in
the future. See "Organization of the Fund and the Portfolio".
<PAGE>
THE FUND'S FINANCIAL HIGHLIGHTS
------------------------------------------------------------------------------
The following information should be read in conjunction with the audited
financial statements included in the Statement of Additional Information, all of
which has been so included in reliance upon the report of Coopers & Lybrand
L.L.P., independent accountants, as experts in accounting and auditing, which
report is contained in the Statement of Additional Information. Further
information regarding the performance of the Fund is contained in the Fund's
annual report to shareholders which may be obtained without charge by contacting
the Principal Underwriter.
------------------------------------------------------------------------------
FOR THE PERIOD FROM THE START OF BUSINESS, AUGUST 17, 1994, TO
DECEMBER 31, 1994
NET ASSET VALUE -- Beginning of period .......................... $10.00
------
Income from investment operations:
Net investment income (loss) ................................ $(0.01)
Net realized and unrealized gain (loss) on investments ...... (0.39)
------
Total income (loss) from investment operations ............ $(0.40)
------
NET ASSET VALUE, -- End of period ............................... $ 9.60
======
TOTAL RETURN\1/ ................................................. (3.9)%
RATIOS/SUPPLEMENTAL DATA (to average daily net assets):**
Expenses\2/ ................................................... 3.25%+
Net investment income (loss) .................................. (0.74)%+
NET ASSETS, END OF PERIOD (000's omitted) ....................... $1,604
** The expenses related to the operation of the Fund reflect an allocation of
expenses to the Administrator. Had such action not been taken, the ratios
would have been as follows:
RATIOS (to average daily net assets):
Expenses\2/ ................................................... 3.81 %+
Net investment income (loss) .................................. (0.18)%+
+ Computed on an annualized basis.
Note: Per share amounts have been computed using average shares outstanding
during the period. The per share amount is not in accord with the net
realized and unrealized gain for the period allocated to the Fund by the
Portfolio due to the timing of the sales of Fund shares and the amount of
per share realized and unrealized gains and losses at such time.
\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 the period
reported. Dividends and distributions, if any, are assumed to be reinvested
at the net asset value on the record date.
\2/ Includes the Fund's share of Stock Portfolio's allocated expenses for the
period from the Fund's start of business, August 17, 1994, to December 31,
1994.
<PAGE>
THE FUND'S INVESTMENT OBJECTIVE
------------------------------------------------------------------------------
EV MARATHON STOCK FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE GROWTH OF PRINCIPAL
AND INCOME FOR ITS SHAREHOLDERS. The Fund currently seeks to meet its investment
objective by investing its assets in the Stock Portfolio, a separate registered
investment company that invests in a number of carefully selected securities.
The emphasis is upon common stocks. The Fund's and the Portfolio's investment
objectives are nonfundamental and may be changed when authorized by a vote of
the Tustees of the Trust or the Portfolio, respectively, without obtaining the
approval of the Fund's shareholders or the investors in the Portfolio, as the
case may be. The Trustees of the Trust have no present intention to change the
Fund's objective and intend to submit any proposed material change in the
investment objective to shareholders in advance for their approval.
HOW THE FUND AND THE PORTFOLIO INVEST THEIR ASSETS; RISKS
------------------------------------------------------------------------------
THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING IN THE
PORTFOLIO. TO ACHIEVE THE PORTFOLIO'S OBJECTIVE, PRIMARY EMPHASIS WILL BE PLACED
ON COMMON STOCKS OF COMPANIES WHICH APPEAR TO OFFER GOOD PROSPECTS FOR INCREASES
IN BOTH EARNINGS AND DIVIDENDS. The Portfolio will invest primarily (i.e., at
least 65% of its total assets during normal investment conditions) in equity
securities (common and preferred stocks, and securities convertible into common
stocks). The Portfolio's investments in convertible debt securities will be
limited to 20% of net assets. The criteria for such investments are the same as
those used for the common stock of the issuer and accordingly, may be of any
credit quality (including below investment grade). The Portfolio purchases
securities primarily for investment, rather than with a view to realizing
trading profits. Nevertheless, portfolio changes are made whenever considered
advisable in the pursuit of the Portfolio's stated investment objective.
In seeking to achieve its investment objective, or to consolidate growth
previously attained, the Portfolio may from time to time purchase bonds,
preferred stocks, U.S. Government obligations and other securities. Bonds will
constitute 5% or less of net assets and be investment grade (rated Baa or higher
by Moody's Investors Service, Inc. or BBB or higher by Standard & Poor's Ratings
Group or, if unrated, determined to be of comparable quality by the Portfolio's
Investment Adviser). Convertible debt securities that are not investment grade
have speculative characteristics and changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity to make principal
and interest payments than is the case with higher grade debt securities.
The Portfolio may invest in securities issued by foreign companies
(including American Depository Receipts and Global Depository Receipts). Such
investments may be subject to various risks such as fluctuations in currency and
exchange rates, foreign taxes, social, political and economic conditions in the
countries in which such companies operate, and changes in governmental, economic
or monetary policies both here and abroad. There may be less publicly available
information about a foreign company than about a comparable domestic company.
Because the securities markets in many foreign countries are not as developed as
those in the United States, the securities of many foreign companies are less
liquid and their prices are more volatile than securities of comparable domestic
companies. In order to hedge against possible variations in foreign exchange
rates pending the settlement of foreign securities transactions, the Portfolio
may buy or sell foreign currencies.
An investment in the Fund entails the risk that the principal value of Fund
shares and the income earned thereon may not increase or may decline. The
Portfolio's investments in equity securities are subject to the risk of adverse
developments affecting particular companies or industries and the stock market
generally. Investments in bonds are subject to the risk that the issuer may
default on its obligations to pay principal and interest. The value of bonds
tends to increase during periods of falling interest rates and to decline during
periods of rising interest rates. By investing in a diversified portfolio of
securities, the Portfolio seeks both to reduce the risks ordinarily inherent in
holding one security or securities of a single issuer and to improve the
prospects for possible growth by investing in a substantial number of prudently
selected securities. Attainment of the Portfolio's objective cannot, of course,
be assured since its asset value fluctuates with changes in the market value of
its investments and dividends paid depend upon income received by the Portfolio.
The Fund and the Portfolio have adopted certain fundamental investment
restrictions which are enumerated in detail in the Statement of Additional
Information and which may not be changed unless authorized by a shareholder vote
or an investor vote, respectively. Except for such enumerated restrictions and
as otherwise indicated in this prospectus, the investment objective and policies
of the Fund and the Portfolio are not fundamental policies and accordingly may
be changed by the Trustees of the Trust and the Portfolio without obtaining the
approval of the Fund's shareholders or the investors in the Portfolio, as the
case may be. If any changes were made in the Fund's investment objective, the
Fund might have an investment objective different from the objective which an
investor considered appropriate at the time the investor became a shareholder of
the Fund.
------------------------------------------------------------------------------
THE FUND IS NOT INTENDED TO BE A COMPLETE INVESTMENT PROGRAM, AND
PROSPECTIVE INVESTORS SHOULD TAKE INTO ACCOUNT THEIR OBJECTIVES AND OTHER
INVESTMENTS WHEN CONSIDERING THE PURCHASE OF FUND SHARES. THE FUND CANNOT
ELIMINATE RISK OR ASSURE ACHIEVEMENT OF ITS OBJECTIVE.
------------------------------------------------------------------------------
ORGANIZATION OF THE FUND AND THE PORTFOLIO
------------------------------------------------------------------------------
THE FUND IS A DIVERSIFIED SERIES OF EATON VANCE SECURITIES TRUST, A BUSINESS
TRUST ESTABLISHED UNDER MASSACHUSETTS LAW PURSUANT TO A DECLARATION OF TRUST
DATED OCTOBER 19, 1990, AS AMENDED, AS THE SUCCESSOR TO A MASSACHUSETTS TRUST
WHICH COMMENCED ITS INVESTMENT COMPANY OPERATIONS IN 1931. THE TRUST IS A MUTUAL
FUND -- AN OPEN-END MANAGEMENT INVESTMENT COMPANY. The Trustees of the Trust are
responsible for the overall management and supervision of its affairs. The Trust
may issue an unlimited number of shares of beneficial interst (no par value per
share) in one or more series and because the Trust can offer separate series
(such as the Fund) it is known as a "series company." Each share represents an
equal proportionate beneficial interest in the Fund. When issued and
outstanding, the shares are fully paid and nonassessable by the Trust and
redeemable as described under "How to Redeem Fund Shares". Shareholders are
entitled to one vote for each full share held. Fractional shares may be voted
proportionately. Shares have no preemptive or conversion rights and are freely
transferable. In the event of the liquidation of the Fund, shareholders are
entitled to share pro rata in the net assets of the Fund available for
distribution to shareholders.
THE PORTFOLIO IS ORGANIZED AS A TRUST UNDER THE LAWS OF THE STATE OF NEW
YORK AND INTENDS TO BE TREATED AS A PARTNERSHIP FOR FEDERAL TAX PURPOSES. The
Portfolio, as well as the Trust, intends to comply with all applicable Federal
and state securities laws. The Portfolio's Declaration of Trust provides that
the Fund and other entities permitted to invest in the Portfolio (e.g., other
U.S. and foreign investment companies, and common and commingled trust funds)
will each be liable for all obligations of the Portfolio. However, the risk of
the Fund incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance exists and the Portfolio itself
is unable to meet its obligations. Accordingly, the Trustees of the Trust
believe that neither the Fund nor its shareholders will be adversely affected by
reason of the Fund investing in the Portfolio.
SPECIAL INFORMATION ON THE FUND/PORTFOLIO INVESTMENT STRUCTURE. An investor in
the Fund should be aware that the Fund, unlike mutual funds which directly
acquire and manage their own portfolios of securities, seeks to achieve its
investment objective by investing its assets in an interest in the Portfolio
(although the Fund may temporarily hold a de minimus amount of cash), which is a
separate investment company with an identical investment objective. Therefore,
the Fund's interest in the securities owned by the Portfolio is indirect. In
addition to selling an interest to the Fund, the Portfolio may sell interests to
other affiliated and non-affiliated mutual funds or institutional investors.
Such investors will invest in the Portfolio on the same terms and conditions and
will pay a proportionate share of the Portfolio's expenses. However, the other
investors investing in the Portfolio are not required to sell their shares at
the same public offering price as the Fund due to variations in sales
commissions and other operating expenses. Therefore, investors in the Fund
should be aware that these differences may result in differences in returns
experienced by investors in the various funds that invest in the Portfolio. Such
differences in returns are also present in other mutual fund structures,
including funds that have multiple classes of shares. For information regarding
the investment objective, policies and restrictions, see "The Fund's Investment
Objective" and "How the Fund and the Portfolio Invest their Assets; Risks".
Further information regarding investment practices may be found in the Statement
of Additional Information.
The Trustees of the Trust have considered the advantages and disadvantages
of investing the assets of the Fund in the Portfolio, as well as the advantages
and disadvantages of the two-tier format. The Trustees believe that the
structure offers opportunities for substantial growth in the assets of the
Portfolio, and affords the potential for economies of scale for the Fund.
The Fund may withdraw (completely redeem) all its assets from the Portfolio
at any time if the Board of Trustees of the Trust determines that it is in the
best interest of the Fund to do so. The investment objective and the
nonfundamental investment policies of the Fund and the Portfolio may be changed
by the Trustees of the Trust and the Portfolio without obtaining the approval of
the shareholders of the Fund or the investors in the Portfolio, as the case may
be. Any such change of the investment objective will be preceded by thirty days,
advance written notice to the shareholders of the Fund or the investors in the
Portfolio, as the case may be. If a shareholder redeems shares because of a
change in the nonfundamental objective or policies of the Fund, those shares may
be subject to a contingent deferred sales charge, as described in "How to Redeem
Fund Shares". In the event the Fund withdraws all of its assets from the
Portfolio, or the Board of Trustees of the Trust determines that the investment
objective of the Portfolio is no longer consistent with the investment objective
of the Fund, such Trustees would consider what action might be taken, including
investing the assets of the Fund in another pooled investment entity or
retaining an investment adviser to manage the Fund's assets in accordance with
its investment objective. The Fund's investment performance may be affected by a
withdrawal of all its assets from the Portfolio.
Information regarding other pooled investment entities or funds which invest
in the Portfolio may be obtained by contacting Eaton Vance Distributors, Inc.
(the "Principal Underwriter" or "EVD"), 24 Federal Street, Boston, MA 02110,
(617) 482-8260. Smaller investors in the Portfolio may be adversely affected by
the actions of larger investors in the Portfolio. For example, if a large
investor withdraws from the Portfolio, the remaining investors may experience
higher pro rata operating expenses, thereby producing lower returns.
Additionally, the Portfolio may become less diverse, resulting in increased
portfolio risk, and experience decreasing economies of scale. However, this
possibility exists as well for historically structured funds which have large or
institutional investors.
Until recently, the Administrator sponsored and advised historically
structured funds. Funds which invest all their assets in interests in a separate
investment company are a relatively new development in the mutual fund industry
and, therefore, the Fund may be subject to additional regulations than
historically structured funds.
The Declaration of Trust of the Portfolio provides that the Portfolio will
terminate 120 days after the complete withdrawal of the Fund or any other
investor in the Portfolio, unless either the remaining investors, by unanimous
vote at a meeting of such investors, or a majority of the Trustees of the
Portfolio, by written instrument consented to by all investors, agree to
continue the business of the Portfolio. This provision is consistent with
treatment of the Portfolio as a partnership for Federal income tax purposes. See
"Distributions and Taxes" for further information. Whenever the Fund as an
investor in the Portfolio is requested to vote on matters pertaining to the
Portfolio (other than the termination of the Portfolio's business, which may be
determined by the Trustees of the Portfolio without investor approval), the Fund
will hold a meeting of Fund shareholders and will vote its interest in the
Portfolio for or against such matters proportionately to the instructions to
vote for or against such matters received from Fund shareholders. The Fund shall
vote shares for which it receives no voting instructions in the same proportion
as the shares for which it receives voting instructions. Other investors in the
Portfolio may alone or collectively acquire sufficient voting interests in the
Portfolio to control matters relating to the operation of the Portfolio, which
may require the Fund to withdraw its investment in the Portfolio or take other
appropriate action. Any such withdrawal could result in a distribution "in kind"
of portfolio securities (as opposed to a cash distribution from the Portfolio).
If securities are distributed, the Fund could incur brokerage, tax or other
charges in converting the securities to cash. In addition, the distribution in
kind may result in a less diversified portfolio of investments or adversely
affect the liquidity of the Fund. Notwithstanding the above, there are other
means for meeting shareholder redemption requests, such as borrowing.
The Trustees of the Trust, including a majority of the noninterested
Trustees, have approved written procedures designed to identify and address any
potential conflicts of interest arising from the fact that the Trustees of the
Trust and the Trustees of the Portfolio are the same. Such procedures require
each Board to take action to resolve any conflict of interest between the Fund
and the Portfolio, and it is possible that the creation of separate Boards may
be considered. For further information concerning the Trustees and officers of
the Trust and the Portfolio, see the Statement of Additional Information.
MANAGEMENT OF THE FUND AND THE PORTFOLIO
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THE PORTFOLIO ENGAGES BOSTON MANAGEMENT AND RESEARCH ("BMR"), A WHOLLY-OWNED
SUBSIDIARY OF EATON VANCE MANAGEMENT ("EATON VANCE"), AS ITS INVESTMENT ADVISER.
EATON VANCE, ITS AFFILIATES AND ITS PREDECESSOR COMPANIES HAVE BEEN MANAGING
ASSETS OF INDIVIDUALS AND INSTITUTIONS SINCE 1924 AND MANAGING INVESTMENT
COMPANIES SINCE 1931.
Acting under the general supervision of the Board of Trustees of the
Portfolio, BMR manages the Portfolio's investments and affairs. Under its
investment advisory agreement with the Portfolio, BMR receives a monthly
advisory fee of 5/96 of 1% (equivalent to 0.625% annually) of the average daily
net assets of the Portfolio. For the period from the start of business, August
1, 1994, to December 31, 1994, the Portfolio paid BMR advisory fees equivalent
to 0.625% (annualized) of the Portfolio's average daily net assets for such
period.
BMR also furnishes for the use of the Portfolio office space and all
necessary office facilities, equipment and personnel for servicing the
investments of the Portfolio. The Portfolio is responsible for the payment of
all of its expenses other than those expressly stated to be payable by BMR under
the investment advisory agreement.
BMR places the portfolio transactions of the Portfolio for execution with
many broker-dealer firms and uses its best efforts to obtain execution of such
transactions at prices which are advantageous to the Portfolio and at reasonably
competitive commission rates. Subject to the foregoing, BMR may consider sales
of shares of the Fund or of other investment companies sponsored by BMR or Eaton
Vance as a factor in the selection of broker-dealer firms to execute portfolio
transactions.
Duncan W. Richardson has acted as the portfolio manager of the Portfolio
since it commenced operations. He has been a Vice President of Eaton Vance since
1987 and of BMR since 1992.
BMR OR EATON VANCE ACTS AS INVESTMENT ADVISER TO INVESTMENT COMPANIES AND
VARIOUS INDIVIDUAL AND INSTITUTIONAL CLIENTS WITH ASSETS UNDER MANAGEMENT OF
APPROXIMATELY $15 BILLION. Eaton Vance is a wholly-owned subsidiary of Eaton
Vance Corp., a publicly held holding company. Eaton Vance Corp., through its
subsidiaries and affiliates, engages in investment management and marketing
activities, fiduciary and banking services, oil and gas operations, real estate
investment, consulting and management, and development of precious metals
properties.
The Trust has retained the services of Eaton Vance to act as Administrator
of the Fund. The Trust has not retained the services of an investment adviser
since the Trust seeks to achieve the investment objective of the Fund by
investing the Fund's assets in the Portfolio. As Administrator, Eaton Vance
provides the Fund with general office facilities and supervises the overall
administration of the Fund. For these services Eaton Vance currently receives no
compensation. The Trustees of the Trust may determine, in the future, to
compensate Eaton Vance for such services.
The Portfolio and the Fund, as the case may be, will each be responsible for
all of its respective costs and expenses not expressly stated to be payable by
BMR under the investment advisory agreement, by Eaton Vance under the
administrative services agreement, or by EVD under the distribution agreement.
Such costs and expenses to be borne by the Portfolio and the Fund, as the case
may be, include, without limitation: custody and transfer agency fees and
expenses, including those incurred for determining net asset value and keeping
accounting books and records; expenses of pricing and valuation services; the
cost of share certficates; membership dues in investment company organizations;
expenses of acquiring, holding and disposing of securities and other
investments; fees and expenses of registering under the securities laws and the
governmental fees; expenses of reporting to shareholders and investors; proxy
statements and other expenses of shareholders' or investors' meetings; insurance
premiums; printing and mailing expenses; interest, taxes and corporate fees;
legal and accounting expenses; compensation and expenses of Trustees not
affiliated with BMR or Eaton Vance; and investment advisory fees, and, if any,
administrative services fees. The Portfolio and the Fund will also each bear
expenses incurred in connection with litigation in which the Portfolio or the
Fund, as the case may be, is a party and any legal obligation to indemnify its
respective officers and Trustees with respect thereto.
DISTRIBUTION PLAN
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THE FUND FINANCES DISTRIBUTION ACTIVITIES AND HAS ADOPTED A DISTRIBUTION PLAN
(THE "PLAN") PURSUANT TO RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940.
Rule 12b-1 permits a mutual fund, such as the Fund, to finance distribution
activities and bear expenses associated with the distribution of its shares
provided that any payments made by the Fund are made pursuant to a written plan
adopted in accordance with the Rule. The Plan is subject to, and complies with,
the sales charge rule of the National Association of Securities Dealers, Inc.
(the "NASD Rule"). The Plan is described further in the Statement of Additional
Information, and the following is a description of the salient features of the
Plan. The Plan provides that the Fund, subject to the NASD Rule, will pay sales
commissions and distribution fees to the Principal Underwriter only after and as
a result of the sale of shares of the Fund. On each sale of Fund shares
(excluding reinvestment of distributions) the Fund will pay the Principal
Underwriter amounts representing (i) sales commissions equal to 5% of the amount
received by the Fund for each share sold and (ii) distribution fees calculated
by applying the rate of 1% over the prime rate then reported in The Wall Street
Journal to the outstanding balance of Uncovered Distribution Charges (as
described below) of the Principal Underwriter. The Principal Underwriter
currently expects to pay sales commissions (except on exchange transactions and
reinvestments) to a financial services firm (an "Authorized Firm") at the time
of sale equal to 4% of the purchase price of the shares sold by such Firm. The
Principal Underwriter will use its own funds (which may be borrowed from banks)
to pay such commissions. Because the payment of the sales commissions and
distribution fees to the Principal Underwriter is subject to the NASD Rule
described below, it will take the Principal Underwriter a number of years to
recoup the sales commissions paid by it to Authorized Firms from the payments
received by it from the Fund pursuant to the Plan.
THE NASD RULE REQUIRES THE FUND TO LIMIT ITS ANNUAL PAYMENTS OF SALES
COMMISSIONS AND DISTRIBUTION FEES TO THE PRINCIPAL UNDERWRITER TO AN AMOUNT NOT
EXCEEDING .75% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR EACH FISCAL YEAR.
Under its Plan, the Fund accrues daily an amount at the rate of 1/365 of .75% of
the Fund's net assets, and pays such accrued amounts monthly to the Principal
Underwriter. The Plan requires such accruals to be automatically discontinued
during any period in which there are no outstanding Uncovered Distribution
Charges under the Plan.Uncovered Distribution Charges are calculated daily and,
briefly, are equivalent to all unpaid sales commissions and distribution fees to
which the Principal Underwriter is entitled under the Plan less all contingent
deferred sales charges theretofore paid to the Principal Underwriter. The Eaton
Vance organization may be considered to have realized a profit under the Plan if
at any point in time the aggregate amounts of all payments received by the
Principal Underwriter from the Fund pursuant to the Plan, including any
contingent deferred sales charges, have exceeded the total expenses theretofore
incurred by such organization in distributing shares of the Fund. Total expenses
for this purpose will include an allocable portion of the overhead costs of such
organization and its branch offices.
The amount payable by the Fund to the Principal Underwriter pursuant to the
Plan with respect to each day will be accrued on such day as a liability of the
Fund and will accordingly reduce the Fund's net assets upon such accrual, all in
accordance with generally accepted accounting principles. The amount payable on
each day is limited to 1/365 of .75% of the Fund's net assets on such day. The
level of the Fund's net assets changes each day and depends upon the amount of
sales and redemptions of Fund shares, the changes in the value of the
investments held by the Portfolio, the expenses of the Fund and the Portfolio
accrued and allocated to the Fund on such day, income on portfolio investments
of the Portfolio accrued and allocated to the Fund on such day, and any
dividends and distributions declared on Fund shares. The Fund does not accrue
possible future payments as a liability of the Fund or reduce the Fund's current
net assets in respect of unknown amounts which may become payable under the Plan
in the future because the standards for accrual of a liability under such
accounting principles have not been satisfied.
The Plan provides that the Fund will receive all contingent deferred sales
charges and will make no payments to the Principal Underwriter in respect of any
day on which there are no outstanding Uncovered Distribution Charges of the
Principal Underwriter. Contingent deferred sales charges and accrued amounts
will be paid by the Fund to the Principal Underwriter whenever there exist
Uncovered Distribution Charges under the Plan.
The provisions of the Plan relating to payments of sales commissions and
distribution fees to the Principal Underwriter are also included in the
Distribution Agreement between the Trust on behalf of the Fund and the Principal
Underwriter. The Plan continues in effect through and including April 28, 1995,
and shall continue in effect indefinitely thereafter for so long as such
continuance is approved at least annually by the vote of both a majority of (i)
the Trustees of the Trust who are not interested persons of the Trust and who
have no direct or indirect financial interest in the operation of the Plan or
any agreements related to the Plan (the "Rule 12b-1 Trustees") and (ii) all of
the Trustees then in office, and the Distribution Agreement contains a similar
provision. The Plan and Distribution Agreement may be terminated at any time by
vote of a majority of the Rule 12b-1 Trustees or by a vote of a majority of the
outstanding voting securities of the Fund.
Periods with a high level of sales of Fund shares accompanied by a low level
of early redemptions of Fund shares resulting in the imposition of contingent
deferred sales charges will tend to increase the time during which there will
exist Uncovered Distribution Charges of the Principal Underwriter. Conversely,
periods with a low level of sales of Fund shares accompanied by a high level of
early redemptions of Fund shares resulting in the imposition of contingent
deferred sales charges will tend to reduce the time during which there will
exist Uncovered Distribution Charges of the Principal Underwriter.
Because of the NASD Rule limitation on the amount of sales commissions and
distribution fees paid to the Principal Underwriter during any fiscal year, a
high level of sales of Fund shares during the initial years of the Fund's
operations would cause a large portion of the sales commission attributable to a
sale of Fund shares to be accrued and paid by the Fund to the Principal
Underwriter in fiscal years subsequent to the year in which such shares were
sold. This spreading of sales commissions payments under the Plan over an
extended period would result in the incurrence and payment of increased
distribution fees under the Plan. For the period from the start of business,
August 17, 1994, to December 31, 1994, the Fund paid sales commissions under the
Plan equivalent to .75% (annualized) of the Fund's average daily net assets for
such period. As at December 31, 1994, the Uncovered Distribution Charges of the
Principal Underwriter calculated under the Plan amounted to approximately
$39,703 (equivalent to 3.7% of the Fund's net assets on such day).
THE PLAN ALSO AUTHORIZES THE FUND TO MAKE PAYMENTS OF SERVICE FEES TO THE
PRINCIPAL UNDERWRITER, AUTHORIZED FIRMS AND OTHER PERSONS IN AMOUNTS NOT
EXCEEDING .25% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR EACH FISCAL YEAR. The
Trustees of the Trust have initially implemented the Plan by authorizing the
Fund to make quarterly service fee payments to the Principal Underwriter and
Authorized Firms in amounts not expected to exceed .25% of the Fund's average
daily net assets for any fiscal year based on the value of Fund shares sold by
such persons and remaining outstanding for at least twelve months. As permitted
by the NASD Rule, all such payments are made for personal services and/or the
maintenance of shareholder accounts. Service fees are separate and distinct from
the sales commissions and distribution fees payable by the Fund to the Principal
Underwriter, and as such are not subject to automatic discontinuance when there
are no outstanding Uncovered Distribution Charges of the Principal Underwriter.
The Fund expects to begin accruing for its service fee payments during the
quarter ending September 30, 1995.
As currently implemented by the Trustees, the Plan authorizes payments of
sales commissions and distribution fees to the Principal Underwriter and service
fees to the Principal Underwriter and Authorized Firms which may be equivalent,
on an aggregate basis during any fiscal year of the Fund, to 1% of the Fund's
average daily net assets for such year. The Fund believes that the combined rate
of all these payments may be higher than the rate of payments made under
distribution plans adopted by other investment companies pursuant to Rule 12b-1.
It is anticipated that the Eaton Vance organization will profit by reason of the
operation of the Plan through increases in the Fund's assets (thereby increasing
the advisory fees payable to BMR by the Portfolio) resulting from sales of Fund
shares and through amounts paid under the Plan to the Principal Underwriter and
contingent deferred sales charges paid to the Principal Underwriter.
The Principal Underwriter may, from time to time, at its own expense,
provide additional incentives to Authorized Firms which employ registered
representatives who sell a minimum dollar amount of the Fund's shares and/or
shares of other funds distributed by the Principal Underwriter. In some
instances, such additional incentives may be offered only to certain Authorized
Firms whose representatives are expected to sell significant amounts of shares.
In addition, the Principal Underwriter may from time to time increase or
decrease the sales commissions payable to Authorized Firms.
The Fund may, in its absolute discretion, suspend, discontinue or limit the
offering of its shares at any time. In determining whether any such action
should be taken, the Fund's management intends to consider all relevant factors,
including without limitation the size of the Fund, the investment climate and
market conditions, the volume of sales and redemptions of Fund shares, and the
amount of Uncovered Distribution Charges of the Principal Underwriter. The Plan
may continue in effect and payments may be made under the Plan following any
such suspension, discontinuance or limitation of the offering of Fund shares;
however, the Fund is not contractually obligated to continue the Plan for any
particular period of time. Suspension of the offering of Fund shares would not,
of course, affect a shareholder's ability to redeem shares.
VALUING FUND SHARES
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THE FUND VALUES ITS SHARES ONCE ON EACH DAY THE NEW YORK STOCK EXCHANGE (THE
"EXCHANGE") IS OPEN FOR TRADING, as of the close of regular trading on the
Exchange (normally 4:00 p.m. New York time). The Fund's net asset value per
share is determined by its custodian, Investors Bank & Trust Company ("IBT"),
(as agent for the Fund) in the manner authorized by the Trustees of the Trust.
Net asset value is computed by dividing the value of the Fund's total assets,
less its liabilities, by the number of shares outstanding. Because the Fund
invests its assets in an interest in the Portfolio, the Fund's net asset value
will reflect the value of its interest in the Portfolio (which, in turn,
reflects the underlying value of the Portfolio's assets and liabilities).
Authorized Firms must communicate an investor's order to the Principal
Underwriter prior to the close of the Principal Underwriter's business day to
receive that day's net asset value per Fund share. It is the Authorized Firms'
responsibility to transmit orders promptly to the Principal Underwriter, which
is a wholly-owned subsidiary of Eaton Vance.
The Portfolio's net asset value is also determined as of the close of
regular trading on the Exchange by IBT (as custodian and agent for the
Portfolio) in the manner authorized by the Trustees of the Portfolio. Net asset
value is computed by subtracting the liabilities of the Portfolio from the value
of its total assets. Securities listed on securities exchanges or in the NASDAQ
National Market are valued at closing sale prices. Unlisted or listed securities
for which closing sale prices are not available are valued at the mean between
the latest bid and asked prices. Securities for which market quotations are
unavailable, including any security the disposition of which is restricted under
the Securities Act of 1933, and other assets will be appraised at their fair
value as determined in good faith by or at the direction of the Trustees of the
Portfolio. Short-term obligations maturing in sixty days or less are valued at
original cost which, when combined with amortized discount or accrued interest,
approximates market. For further information regarding the valuation of an
interest in the Portfolio, see "Determination of Net Asset Value" in the
Statement of Additional Information. Eaton Vance Corp. owns 77.3% of the
outstanding stock of IBT, the Fund's and the Portfolio's custodian.
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SHAREHOLDERS MAY DETERMINE THE VALUE OF THEIR INVESTMENT BY MULTIPLYING THE
NUMBER OF FUND SHARES OWNED BY THE CURRENT NET ASSET VALUE PER SHARE.
------------------------------------------------------------------------------
HOW TO BUY FUND SHARES
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SHARES OF THE FUND MAY BE PURCHASED FOR CASH OR MAY BE ACQUIRED IN EXCHANGE FOR
SECURITIES. Investors may purchase shares of the Fund through Authorized Firms
at the net asset value per share of the Fund next determined after an order is
effective. The Fund may suspend the offering of shares at any time and may
refuse an order for the purchase of shares.
An initial investment in the Fund must be at least $1,000. Once an account
has been established the investor may send investments of $50 or more at any
time directly to the Fund's Transfer Agent (the "Transfer Agent") as follows:
The Shareholder Services Group, Inc., BOS725, P.O. Box 1559, Boston, MA 02104.
The $1,000 minimum initial investment is waived for Bank Automated Investing
accounts, which may be established with an investment of $50 or more. See "Eaton
Vance Shareholder Services".
In connection with employee benefit or other continuous group purchase plans
under which the average initial purchase by a participant of the plan is $1,000
or more, the Fund may accept initial investments of less than $1,000 on the part
of an individual participant. In the event a shareholder who is a participant of
such a plan terminates participation in the plan, his or her shares will be
transferred to a regular individual account. However, such account will be
subject to the right of redemption by the Fund as described under "How to Redeem
Fund Shares".
ACQUIRING FUND SHARES IN EXCHANGE FOR SECURITIES. IBT, as escrow agent, will
receive securities acceptable to Eaton Vance, as Administrator, in exchange for
Fund shares at their net asset value as determined above. The minimum value of
securities (or securities and cash) accepted for deposit is $5,000. Securities
accepted will be sold by IBT as agent for the account of their owner on the day
of their receipt by IBT or as soon thereafter as possible. The number of Fund
shares to be issued in exchange for securities will be the aggregate proceeds
from the sale of such securities, divided by the applicable net asset value per
Fund share on the day such proceeds are received. Eaton Vance will use
reasonable efforts to obtain the then current market price for such securities
but does not guarantee the best available price. Eaton Vance will absorb any
transaction costs, such as commissions, on the sale of the securities.
Securities determined to be acceptable should be transferred via book entry
or physically delivered, in proper form for transfer, through an Authorized
Firm, together with a completed and signed Letter of Transmittal in approved
form (available from Authorized Firms), as follows:
IN THE CASE OF BOOK ENTRY:
Deliver through Depository Trust Co.
Broker #2212
Investors Bank & Trust Company
For A/C EV Marathon Stock Fund
IN THE CASE OF PHYSICAL DELIVERY:
Investors Bank & Trust Company
Attention: EV Marathon Stock Fund
Physical Securities Processing Settlement Area
89 South Street
Boston, MA 02111
Investors who are contemplating an exchange of securities for shares of the
Fund, or their representatives, are advised to contact Eaton Vance to determine
whether the securities are acceptable before forwarding such securities to IBT.
Eaton Vance reserves the right to reject any securities. Exchanging securities
for Fund shares may create a taxable gain or loss. Each investor should consult
his or her tax adviser with respect to the particular Federal, state and local
tax consequences of exchanging securities for Fund shares.
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IF YOU DON'T HAVE AN AUTHORIZED FIRM, EATON VANCE CAN RECOMMEND ONE.
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HOW TO REDEEM FUND SHARES
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A SHAREHOLDER MAY REDEEM FUND SHARES BY DELIVERING TO THE SHAREHOLDER SERVICES
GROUP, INC., BOS725, P.O. BOX 1559, BOSTON, MASSACHUSETTS 02104, during its
business hours a written request for redemption in good order, plus any share
certificates with executed stock powers. The redemption price will be based on
the net asset value per Fund share next computed after such delivery. Good order
means that all relevant documents must be endorsed by the record owner (s)
exactly as the shares are registered and the signature(s) must be guaranteed by
a member of either the Securities Transfer Association's STAMP program or the
New York Stock Exchange's Medallion Signature Program, or certain banks, savings
and loan institutions, credit unions, securities dealers, securities exchanges,
clearing agencies and registered securities associations as required by a
regulation of the Securities and Exchange Commission (the "Commission") and
acceptable to The Shareholder Services Group, Inc. In addition, in some cases,
good order may require the furnishing of additional documents such as where
shares are registered in the name of a corporation, partnership or fiduciary.
Within seven days after receipt of a redemption request in good order by The
Shareholder Services Group, Inc., the Fund will make payment in cash for the net
asset value of the shares as of the date determined above, reduced by the amount
of any applicable contingent deferred sales charge (described below) and any
Federal income tax required to be withheld. Although the Fund normally expects
to make payment in cash for redeemed shares, the Trust, subject to compliance
with applicable regulations, has reserved the right to pay the redemption price
of shares of the Fund, either totally or partially, by a distribution in kind of
readily marketable securities withdrawn by the Fund from the Portfolio. The
securities so distributed would be valued pursuant to the Portfolio's valuation
procedures. If a shareholder received a distribution in kind, the shareholder
could incur brokerage or other charges in converting the securities to cash.
To sell shares at their net asset value through an Authorized Firm (a
repurchase), a shareholder can place a repurchase order with the Authorized
Firm, which may charge a fee. The value of such shares is based upon the net
asset value calculated after EVD, as the Fund's agent, receives the order. It is
the Authorized Firm's responsibility to transmit promptly repurchase orders to
EVD. Throughout this Prospectus, with word "redemption" is generally meant to
include a repurchase.
If shares were recently purchased, the proceeds of redemption (or
repurchase) will not be sent until the check (including a certified or cashier's
check) received for the shares purchased has cleared. Payment for shares
tendered for redemption may be delayed up to 15 days from the purchase date when
the purchase check has not yet cleared. Redemptions or repurchases may result in
a taxable gain or loss.
Due to the high cost of maintaining small accounts, the Fund reserves the
right to redeem accounts with balances of less than $1,000. Prior to such a
redemption, shareholders will be given 60 days' written notice to make an
additional purchase. Thus, an investor making an initial investment of $1,000
would not be able to redeem shares without being subject to this policy.
However, no such redemption would be required by the Fund if the cause of the
low account balance was a reduction in the net asset value of Fund shares. No
contingent deferred sales charge will be imposed with respect to such
involuntary redemptions.
CONTINGENT DEFERRED SALES CHARGE. Shares redeemed within the first six years
of their purchase (except shares acquired through the reinvestment of
distributions) generally will be subject to a contingent deferred sales charge.
This contingent deferred sales charge is imposed on any redemption the amount of
which exceeds the aggregate value at the time of redemption of (a) all shares in
the account purchased more than six years prior to the redemption, (b) all
shares in the account acquired through reinvestment of distributions, and (c)
the increase, if any, of value of all other shares in the account (namely those
purchased within the six years preceding the redemption) over the purchase price
of such shares. Redemptions are processed in a manner to maximize the amount of
redemption proceeds which will not be subject to a contingent deferred sales
charge. That is, each redemption will be assumed to have been made first from
the exempt amounts referred to in clauses (a), (b) and (c) above, and second
through liquidation of those shares in the account referred to in clause (c) on
a first-in-first-out basis. Any contingent deferred sales charge which is
required to be imposed on share redemptions will be made in accordance with the
following schedule:
YEAR OF CONTINGENT
REDEMPTION DEFERRED SALES
AFTER PURCHASE CHARGE
-------------- --------------
First ............................................ 5%
Second ........................................... 5%
Third ............................................ 4%
Fourth ........................................... 3%
Fifth ............................................ 2%
Sixth ............................................ 1%
Seventh and following ............................ 0%
In calculating the contingent deferred sales charge upon the redemption of
Fund shares acquired in an exchange for shares of a fund currently listed under
"The Eaton Vance Exchange Privilege," the contingent deferred sales charge
schedule applicable to the shares at the time of purchase will apply and the
purchase of Fund shares acquired in the exchange is deemed to have occurred at
the time of the original purchase of the exchanged shares. The contingent
deferred sales charge will be waived for shares redeemed (1) pursuant to a
Withdrawal Plan (see "Eaton Vance Shareholder Services"), (2) as part of a
required distribution from a tax-sheltered retirement plan or (3) following the
death of all beneficial owners of such shares, provided the redemption is
requested within one year of death (a death certificate and other applicable
documents may be required).
No contingent deferred sales charge will be imposed on Fund shares which
have been sold to Eaton Vance or its affiliates, or to their respective
employees or clients. The contingent deferred sales charge will be paid to the
Principal Underwriter or the Fund. When paid to the Principal Underwriter it
will reduce the amount of Uncovered Distribution Charges calculated under the
Fund's Distribution Plan. See "Distribution Plan".
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THE FOLLOWING EXAMPLE ILLUSTRATES THE OPERATION OF THE CONTINGENT DEFERRED
SALES CHARGE. ASSUME THAT AN INVESTOR PURCHASES $10,000 OF THE FUND'S SHARES
AND THAT 16 MONTHS LATER THE VALUE OF THE ACCOUNT HAS GROWN THROUGH
INVESTMENT PERFORMANCE AND REINVESTMENT OF DISTRIBUTIONS TO $12,000. THE
INVESTOR THEN MAY REDEEM UP TO $2,000 OF SHARES WITHOUT INCURRING A
CONTINGENT DEFERRED SALES CHARGE. IF THE INVESTOR SHOULD REDEEM $3,000 OF
SHARES, A CHARGE WOULD BE IMPOSED ON $1,000 OF THE REDEMPTION. THE RATE
WOULD BE 5% BECAUSE THE REDEMPTION WAS MADE IN THE SECOND YEAR AFTER THE
PURCHASE WAS MADE AND THE CHARGE WOULD BE $50.
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REPORTS TO SHAREHOLDERS
------------------------------------------------------------------------------
THE FUND WILL ISSUE TO ITS SHAREHOLDERS SEMI-ANNUAL AND ANNUAL REPORTS
CONTAINING FINANCIAL STATEMENTS. Financial statements included in annual reports
are audited by the Fund's independent accountants. Shortly after the end of each
calendar year, the Fund will furnish all shareholders with information necessary
for preparing Federal and state tax returns.
THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS
------------------------------------------------------------------------------
AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF FUND SHARES, THE FUND'S TRANSFER
AGENT, THE SHAREHOLDER SERVICES GROUP, INC., WILL SET UP A LIFETIME INVESTING
ACCOUNT FOR THE INVESTOR ON THE FUND'S RECORDS. This account is a complete
record of all transactions between the investor and the Fund which at all times
shows the balance of shares owned. The Fund will not issue share certificates
except upon request.
Each time a transaction takes place in a shareholder's account, the
shareholder will receive a statement showing complete details of the transaction
and the current balance in the account. (Under certain investment plans,
statements may be sent only quarterly). THE LIFETIME INVESTING ACCOUNT ALSO
PERMITS A SHAREHOLDER TO MAKE ADDITIONAL INVESTMENTS IN SHARES BY SENDING A
CHECK FOR $50 OR MORE to The Shareholder Services Group, Inc.
Any questions concerning a shareholder's account or services available may
be directed by telephone to EATON VANCE SHAREHOLDER SERVICES at 800-225-6265,
extension 2 or in writing to The Shareholder Services Group, Inc., BOS725, P.O.
Box 1559, Boston, MA 02104 (please provide the name of the shareholder, the Fund
and the account number).
THE FOLLOWING DISTRIBUTION OPTIONS WILL BE AVAILABLE TO ALL LIFETIME
INVESTING ACCOUNTS and may be changed as often as desired by written notice to
the Fund's dividend disbursing agent, The Shareholder Services Group, Inc.,
BOS725, P.O. Box 1559, Boston, MA 02104. The currently effective option will
appear on each confirmation statement.
Share Option -- Dividends and capital gains will be reinvested in additional
shares.
Income Option -- Dividends will be paid in cash, and capital gains will be
reinvested in additional shares.
Cash Option -- Dividends and capital gains will be paid in cash.
The Share Option will be assigned if no other option is specified.
Distributions, including those reinvested, will be reduced by any withholding
required under Federal income tax laws.
If the Income Option or Cash Option has been selected, dividend and/or
capital gains distribution checks which are returned by the United States Postal
Service as not deliverable or which remain uncashed for six months or more will
be reinvested in the account in shares at the then current net asset value.
Furthermore, the distribution option on the account will be automatically
changed to the Share Option until such time as the shareholder selects a
different option.
DISTRIBUTION INVESTMENT OPTION. In addition to the distribution options set
forth above, dividends and/or capital gains may be invested in additional shares
of another Eaton Vance fund. Before selecting this option, a shareholder should
obtain a prospectus of the other Eaton Vance fund and consider its objectives
and policies carefully.
"STREET NAME" ACCOUNTS. If shares of the Fund are held in a "street name"
account with an Authorized Firm, all recordkeeping, transaction processing and
payments of distributions relating to the beneficial owner's account will be
performed by the Authorized Firm, and not by the Fund and its Transfer Agent.
Since the Fund will have no record of the beneficial owner's transactions, a
beneficial owner should contact the Authorized Firm to purchase, redeem or
exchange shares, to make changes in or give instructions concerning the account,
or to obtain information about the account. The transfer of shares in a "street
name" account to an account with another dealer or to an account directly with
the Fund involves special procedures and will require the beneficial owner to
obtain historical purchase information about the shares in the account from the
Authorized Firm. Before establishing a "street name" account with an investment
firm, or transferring the account to another investment firm, an investor
wishing to reinvest distributions should determine whether the firm which will
hold the shares allows reinvestment of distributions in "street name" accounts.
------------------------------------------------------------------------------
UNDER A LIFETIME INVESTING ACCOUNT A SHAREHOLDER CAN MAKE ADDITIONAL
INVESTMENTS IN SHARES BY SENDING A CHECK FOR $50 OR MORE.
------------------------------------------------------------------------------
THE EATON VANCE EXCHANGE PRIVILEGE
------------------------------------------------------------------------------
Shares of the Fund may be exchanged for shares of one or more other funds in the
Eaton Vance Marathon Group of Funds (which includes Eaton Vance Equity- Income
Trust and any EV Marathon fund, except Eaton Vance Prime Rate Reserves) or Eaton
Vance Money Market Fund (available on or about April 3, 1995) which are
distributed subject to a contingent deferred sales charge, on the basis of the
net asset value per share of each fund at the time of the exchange, provided
that such exchange offers are available only in states where shares of the fund
being acquired may be legally sold.
Each exchange must involve shares which have a net asset value of at least
$1,000. The exchange privilege may be changed or discontinued without penalty.
Shareholders will be given sixty (60) days' notice prior to any termination or
material amendment of the exchange privilege. The Fund does not permit the
exchange privilege to be used for "Market Timing" and may terminate the exchange
privilege for any shareholder account engaged in Market Timing activity. Any
shareholder account for which more than two round-trip exchanges are made within
any twelve month period will be deemed to be engaged in Market Timing.
Furthermore, a group of unrelated accounts for which exchanges are entered
contemporaneously by a financial intermediary will be considered to be engaged
in Market Timing.
The Shareholder Services Group, Inc. makes exchanges at the next determined
net asset value after receiving an exchange request in good order (see "How to
Redeem Fund Shares"). Consult The Shareholder Services Group, Inc. for
additional information concerning the exchange privilege. Applications and
prospectuses of other funds are available from Authorized Firms or the Principal
Underwriter. The prospectus for each fund describes its investment objectives
and policies, and shareholders should obtain a prospectus and consider these
objectives and policies carefully before requesting an exchange.
No contingent deferred sales charge is imposed on exchanges. For purposes of
calculating the contingent deferred sales charge upon the redemption of shares
acquired in an exchange, the contingent deferred sales charge schedule
applicable to the shares at the time of purchase will apply and the purchase of
shares acquired in one or more exchanges is deemed to have occurred at the time
of the original purchase of the exchanged shares. For the contingent deferred
sales charge schedule applicable to the Eaton Vance Marathon Group of Funds
(except EV Marathon Strategic Income Fund and Class I shares of any EV Marathon
Limited Maturity Fund), see "How to Redeem Fund Shares". The contingent deferred
sales charge schedule applicable to EV Marathon Strategic Income Fund and Class
I shares of any EV Marathon Limited Maturity Fund is 3%, 2.5%, 2% or 1% in the
event of a redemption occurring in the first, second, third or fourth year,
respectively, after the original share purchase.
Shares of the other funds in the Eaton Vance Marathon Group of Funds and
shares of Eaton Vance Money Market Fund (when available) may be exchanged for
Fund shares on the basis of the net asset value per share of each fund at the
time of the exchange, but subject to any restrictions or qualifications set
forth in the current prospectus of any such fund.
Telephone exchanges are accepted by The Shareholder Services Group, Inc.,
provided that the investor has not disclaimed in writing the use of the
privilege. To effect such exchanges, call The Shareholder Services Group, Inc.
at 800-262-1122 or, within Massachusetts, 617-573-9403, Monday through Friday,
9:00 a.m. to 4:00 p.m. (Eastern Standard Time). Shares acquired by telephone
exchange must be registered in the same name(s) and with the same address as the
shares being exchanged. Neither the Fund, the Principal Underwriter nor The
Shareholder Services Group, Inc. will be responsible for the authenticity of
exchange instructions received by telephone, provided that reasonable procedures
to confirm that instructions communicated are genuine have been followed.
Telephone instructions will be tape recorded. In times of drastic economic or
market changes, a telephone exchange may be difficult to implement. An exchange
may result in a taxable gain or loss.
EATON VANCE SHAREHOLDER SERVICES
------------------------------------------------------------------------------
THE FUND OFFERS THE FOLLOWING SERVICES, WHICH ARE VOLUNTARY, INVOLVE NO EXTRA
CHARGE, AND MAY BE CHANGED OR DISCONTINUED WITHOUT PENALTY AT ANY TIME. Full
information on each of the services described below and an application, where
required, are available from Authorized Firms or the Principal Underwriter. The
cost of administering such services for the benefit of shareholders who
participate in them is borne by the Fund as an expense to all shareholders.
INVEST-BY-MAIL -- FOR PERIODIC SHARE ACCUMULATION: Once the $1,000 minimum
investment has been made, checks of $50 or more payable to the order of the Fund
may be mailed directly to The Shareholder Services Group, Inc., BOS725, P.O. Box
1559, Boston, MA 02104 at any time -- whether or not distributions are
reinvested. The name of the shareholder, the Fund and the account number should
accompany each investment.
BANK AUTOMATIC INVESTING -- FOR REGULAR SHARE ACCUMULATION: Cash investments of
$50 or more may be made automatically each month or quarter from a shareholder's
bank account. The $1,000 minimum initial investment and small account redemption
policy are waived for these accounts.
WITHDRAWAL PLAN: A shareholder may draw on shareholdings systematically with
monthly or quarterly checks in an aggregate amount that does not exceed annually
12% of the account balance at the time the plan is established. Such amount will
not be subject to a contingent deferred sales charge. See "How to Redeem Fund
Shares". A minimum deposit of $5,000 in shares is required.
REINVESTMENT PRIVILEGE: A SHAREHOLDER WHO HAS REPURCHASED OR REDEEMED SHARES MAY
REINVEST, WITH CREDIT FOR ANY CONTINGENT DEFERRED SALES CHARGES PAID ON THE
REPURCHASED OR REDEEMED SHARES, ANY PORTION OR ALL OF THE REPURCHASE OR
REDEMPTION PROCEEDS (PLUS THAT AMOUNT NECESSARY TO ACQUIRE A FRACTIONAL SHARE TO
ROUND OFF THE PURCHASE TO THE NEAREST FULL SHARE) IN SHARES OF THE FUND,
provided that the reinvestment is effected within 30 days after such repurchase
or redemption. Shares are sold to a reinvesting shareholder at the net asset
value next determined following timely receipt of a written purchase order by
the Principal Underwriter or by the Fund (or by the Fund's Transfer Agent). To
the extent that any shares of the Fund are sold at a loss and the proceeds are
reinvested in shares of the Fund (or other shares of the Fund are acquired
within the period beginning 30 days before and ending 30 days after the date of
the redemption) some or all of the loss generally will not be allowed as a tax
deduction. Shareholders should consult their tax advisers concerning the tax
consequences of reinvestments.
TAX-SHELTERED RETIREMENT PLANS: Shares of the Fund are available for purchase
in connection with the following tax-sheltered retirement plans:
-- Pension and Profit Sharing Plans for self-employed individuals,
corporations and non-profit organizations;
-- Individual Retirement Account Plans for individuals and their non-
employed spouses; and
-- 403(b) Retirement Plans for employees of public school systems,
hospitals, colleges and other non-profit organizations meeting certain
requirements of the Internal Revenue Code of 1986, as amended (the
"Code").
Detailed information concerning these plans, including certain exceptions to
minimum investment requirements, and copies of the plans are available from the
Principal Underwriter. This information should be read carefully and
consultation with an attorney or tax adviser may be advisable. The information
sets forth the service fee charged for retirement plans and describes the
Federal income tax consequences of establishing a plan. Under all plans,
dividends and distributions will be automatically reinvested in additional
shares.
DISTRIBUTIONS AND TAXES
------------------------------------------------------------------------------
It is the present policy of the Fund to pay at least quarterly dividends from
net investment income (when available) allocated to the Fund by the Portfolio,
less the Fund's direct and allocated expenses, and to distribute at least
annually any net capital gains realized (the Fund's realized net capital gains
consist of the net realized capital gains from the sale of portfolio securities
allocated to the Fund by the Portfolio).
Shareholders may reinvest dividends, if any, in shares of the Fund at the
current net asset value per share as of the ex-dividend date and may accumulate
capital gains distributions, if any, in additional shares also at the current
net asset value per share as of the ex-dividend date.
Distributions by the Fund of ordinary income and net short-term capital
gains allocated to the Fund by the Portfolio, will be taxable to the Fund's
shareholders as ordinary income, whether received in cash or reinvested in
additional shares of the Fund. Shareholders reinvesting such distributions
should treat the amount of the entire distribution as the tax cost basis of the
additional shares acquired by reason of such reinvestment. Distributions of net
long-term capital gains are taxable to shareholders as such, whether received in
cash or reinvested in additional shares of the Fund, and regardless of the
length of time shares have been owned by shareholders. If shares are purchased
shortly before the record date of a distribution, the shareholder will pay the
full price for the shares and then receive some portion of the price back as a
taxable distribution. Certain distributions which are declared in October,
November or December and paid the following January will be reportable by
shareholders as if received on December 31 of the year in which they are
declared.
Shareholders will receive annually tax information notices and Forms 1099 to
assist in the preparation of their Federal and state tax returns for the prior
calendar year's distributions, proceeds from the redemption or exchange of Fund
shares, and Federal income tax (if any) withheld by the Fund's Transfer Agent.
In order to qualify as a regulated investment company under the Code, the
Fund must satisfy certain requirements relating to the sources of its income,
the distribution of its income, and the diversification of its assets. In
satisfying these requirements, the Fund will treat itself as owning its
proportionate share of each of the Portfolio's assets and as entitled to the
income of the Portfolio properly attributable to such share.
------------------------------------------------------------------------------
AS A REGULATED INVESTMENT COMPANY UNDER THE CODE, THE FUND DOES NOT PAY
FEDERAL INCOME OR EXCISE TAXES TO THE EXTENT THAT IT DISTRIBUTES TO
SHAREHOLDERS ITS NET INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS IN
ACCORDANCE WITH THE TIMING REQUIREMENTS IMPOSED BY THE CODE. AS A
PARTNERSHIP UNDER THE CODE, THE PORTFOLIO DOES NOT PAY FEDERAL INCOME OR
EXCISE TAXES.
------------------------------------------------------------------------------
PERFORMANCE INFORMATION
------------------------------------------------------------------------------
FROM TIME TO TIME, THE FUND MAY ADVERTISE ITS AVERAGE ANNUAL TOTAL RETURN. The
Fund's average annual total return is determined by computing the average annual
percentage change in value of $1,000 invested at the maximum public offering
price (net asset value) for specified periods ending with the most recent
calendar quarter, assuming reinvestment of all distributions. The average annual
total return calculation assumes a complete redemption of the investment and the
deduction of any applicable contingent deferred sales charge at the end of the
period. The Fund may also publish annual and cumulative total return figures
from time to time.
The Fund may also publish total return figures which do not take into
account any contingent deferred sales charge which may be imposed upon
redemptions at the end of the specified period. Any performance figure which
does not take into account the contingent deferred sales charge would be reduced
to the extent such charge is imposed upon a redemption.
Investors should note that the investment results of the Fund will fluctuate
over time, and any presentation of the Fund's total return for any prior period
should not be considered as a representation of what an investment may earn or
what an investor's total return may be in any future period. If the expenses of
the Fund or the Portfolio are paid by Eaton Vance, the Fund's performance will
be higher.
<PAGE>
INVESTMENT ADVISER OF
STOCK PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV MARATHON STOCK FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EV MARATHON STOCK FUND
24 FEDERAL STREET
BOSTON, MA 02110
M-STP
[LOGO]
EV MARATHON
STOCK
FUND
PROSPECTUS
APRIL 1, 1995
<PAGE>
PART A
INFORMATION REQUIRED IN A PROSPECTUS
EV TRADITIONAL STOCK FUND
EV TRADITIONAL STOCK FUND (THE "FUND") IS A MUTUAL FUND SEEKING GROWTH OF
PRINCIPAL AND INCOME. THE FUND INVESTS ITS ASSETS IN STOCK PORTFOLIO (THE
"PORTFOLIO"), A DIVERSIFIED OPEN-END INVESTMENT COMPANY HAVING THE SAME
INVESTMENT OBJECTIVE AS THE FUND, RATHER THAN BY DIRECTLY INVESTING IN AND
MANAGING ITS OWN PORTFOLIO OF SECURITIES AS WITH HISTORICALLY STRUCTURED MUTUAL
FUNDS. THE FUND IS A SERIES OF EATON VANCE SECURITIES TRUST (THE "TRUST").
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank or other insured depository institution, and are not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other government agency. Shares of the Fund involve
investment risks, including fluctuations in value and the possible loss of some
or all of the principal investment.
This Prospectus is designed to provide you with information you should know
before investing. Please retain this document for future reference. A Statement
of Additional Information dated April 1, 1995 for the Fund, as supplemented from
time to time, has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. This Statement of Additional Information is
available without charge from the Fund's principal underwriter, Eaton Vance
Distributors, Inc. (the "Principal Underwriter"), 24 Federal Street, Boston, MA
02110 (telephone (800) 225-6265). The Portfolio's investment adviser is Boston
Management and Research (the "Investment Adviser"), a wholly-owned subsidiary of
Eaton Vance Management, and Eaton Vance Management is the administrator (the
"Administrator") of the Fund. The offices of the Investment Adviser and the
Administrator are located at 24 Federal Street, Boston, MA 02110.
------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE PAGE
<S> <C> <S> <C>
Shareholder and Fund Expenses ..................... 2 How to Redeem Fund Shares ..................... 12
The Fund's Financial Highlights ................... 3 Reports to Shareholders ....................... 13
The Fund's Investment Objective ................... 4 The Lifetime Investing Account/Distribution
How the Fund and the Portfolio Options ..................................... 13
Invest their Assets; Risks ...................... 4 The Eaton Vance Exchange Privilege ............ 14
Organization of the Fund and the Portfolio ........ 5 Eaton Vance Shareholder Services .............. 15
Management of the Fund and the Portfolio .......... 7 Distributions and Taxes ....................... 17
Service Plan ...................................... 8 Performance Information ....................... 18
Valuing Fund Shares ............................... 9 Statement of Intention and
How to Buy Fund Shares ........................... 10 Escrow Agreement ............................ 18
------------------------------------------------------------------------------------------------------------
</TABLE>
PROSPECTUS DATED APRIL 1, 1995
<PAGE>
SHAREHOLDER AND FUND EXPENSES\1/
------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as a percentage of offering
price) 4.75%
Sales Charges Imposed on Reinvested Distributions None
Redemption Fees None
Fees to Exchange Shares None
Contingent Deferred Sales Charges (on purchases of $1 million or more)
Imposed on Redemptions
During the First Eighteen Months (as a percentage of redemption
proceeds exclusive of all reinvestments and capital appreciation
in the account)\2/ 1.00%
ANNUAL FUND AND ALLOCATED PORTFOLIO OPERATING EXPENSES
(as a percentage of average daily net assets)
Investment Adviser Fee\3/ 0.625%
Rule 12b-1 Fees (Service Plan) 0.049%
Other Expenses 0.306%
----
Total Operating Expenses 0.980%
=====
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
An investor would pay the following
expenses (including maximum initial
sales charge) on a $1,000 investment,
assuming (a) 5% annual return and (b)
redemption at the end of each time period: $57 $77 $99 $162
Notes:
\1/ The purpose of the above table and Example is to summarize the aggregate
expenses of the Fund and the Portfolio and to assist investors in
understanding the various costs and expenses that investors in the Fund will
bear directly or indirectly. The Trustees of the Trust believe that over
time the aggregate per share expenses of the Fund and the Portfolio should
be approximately equal to the per share expenses which the Fund would incur
if the Trust retained the services of an investment adviser and the assets
of the Fund were invested directly in the type of securities being held by
the Portfolio. The costs and expenses included in the table and Example are
based on the Fund's fiscal year ended December 31, 1994, and reflect the
Fund's current policy of investing its assets in the Portfolio. The table
and Example should not be considered a representation of past or future
expenses, and actual expenses may be greater or less than those shown.
Moreover, while the Example assumes a 5% annual return, the Fund's actual
performance will vary and may result in an annual return greater or less
than 5%. For further information regarding the expenses of both the Fund and
the Portfolio see "The Fund's Financial Highlights", "Organization of the
Fund and the Portfolio", "Management of the Fund and the Portfolio" and "How
to Redeem Fund Shares".
\2/ If shares have been purchased at net asset value with no initial sales
charge by virtue of the purchase having been in the amount of $1 million or
more and are redeemed within 18 months after the end of the calendar month
in which the purchase was made, a contingent deferred sales charge of 1%
will be imposed on such redemption. See "How to Buy Fund Shares", "How to
Redeem Fund Shares" and "Eaton Vance Shareholder Services".
\3/ As of the close of business on August 1, 1994, the Fund transferred its
assets to the Portfolio in exchange for an interest in the Portfolio. Prior
to such date, the Fund retained Eaton Vance Management as its investment
adviser.
\4/ Other investment companies with different distribution arrangements and fees
are investing in the Portfolio and additional such companies may do so in
the future. See "Organization of the Fund and the Portfolio".
<PAGE>
THE FUND'S FINANCIAL HIGHLIGHTS
-------------------------------------------------------------------------------
The following information should be read in conjunction with the audited
financial statements included in the Statement of Additional Information, all
of which has been so included in reliance upon the report of Coopers & Lybrand
L.L.P., independent accountants, as experts in accounting and auditing, which
report is contained in the Statement of Additional Information. The financial
highlights for each of the seven years in the period ended December 31, 1991,
presented here, were audited by other auditors, whose report dated January 21,
1992, expressed an unqualified opinion on such financial highlights. Further
information regarding the performance of the Fund is contained in the Fund's
annual report to shareholders which may be obtained without charge by contacting
the Principal Underwriter.
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------------------
1994 1993 1992 1991<F1>1990<F1> 1989<F1>1988<F1> 1987<F1> 1986<F1> 1985<F1>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------
NET ASSET VALUE --
Beginning of year .................... $12.490 $13.480 $14.030 $13.070 $14.710 $12.690 $12.240 $13.490 $14.680 $12.140
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income ............... $ 0.250 $ 0.270<F2>$ 0.312 $ 0.449 $ 0.564 $ 0.525 $ 0.475 $ 0.456 $ 0.550 $ 0.550
Net realized and unrealized gain
(loss) on investments .............. (0.765) 0.270<F2> 0.658 2.191 (0.504) 3.035 1.325 (0.166) 1.480 3.080
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total income (loss) from
investment operations ............ $(0.515) $ 0.540 $ 0.970 $ 2.640 $ 0.060 $ 3.560 $ 1.800 $ 0.290 $ 2.030 $ 3.630
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
LESS DISTRIBUTIONS:
From net investment income .......... $(0.250) $(0.270) $(0.320) $(0.460) $(0.630) $(0.500)$(0.450) $(0.490) $(0.580) $(0.590)
From net realized gains on
investments......................... (0.765) (1.260) (1.200) (1.220) (1.070) (1.040) (0.900) (1.050) (2.640) (0.500)
In excess of net realized gains ..... (0.060) -- -- -- -- -- -- -- -- --
Total distributions ............... $(1.075) $(1.530) $(1.520) $(1.680) $(1.700) $(1.540) $(1.350) $(1.540 $(3.220) $(1.090)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
NET ASSET VALUE -- End of year ........ $10.900 $12.490 $13.480 $14.030 $13.070 $14.710 $12.690 $12.240 $13.490 $14.680
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
TOTAL RETURNZ<F3>...................... (4.12%) 4.19% 6.93% 21.45% 0.59% 28.92% 15.01% 1.99% 15.43% 32.26%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year
(000's omitted)..................... $84,299 $97,513 $91,299 $91,844 $80,642 $89,809 $76,761 $74,219 $79,564 $79,303
Ratio of expenses to average
daily net assets ................... 0.98%<F4>0.96% 0.92% 0.94% 0.99% 0.90% 0.96% 0.95% 0.86% 0.86%
Ratio of net investment income to
average daily net assets ........... 2.09% 2.01% 2.29% 3.23% 4.02% 3.66% 3.64% 3.17% 3.83% 4.18%
PORTFOLIO TURNOVER<F5>................. 66% 105% 59% 42% 42% 14% 29% 26% 42% 70%
<FN>
<F1>Audited by previous auditors.
<F2>Computed on an average share basis.
<F3>Total return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset value on
the last day of each period reported. Dividends and distributions, if any, are assumed to be reinvested at the net asset value
on the record date.
<F4>Includes the Fund's share of Stock Portfolio's allocated expenses for the period from August 1, 1994, to December 31, 1994.
<F5>Portfolio turnover represents the rate of portfolio activity for the period while the Fund was making investments directly in
securities. The portfolio turnover for the period since the Fund transferred its assets to the Portfolio is shown in the
Portfolio's financial statements which are included in the Fund's annual report.
</FN>
</TABLE>
THE FUND'S INVESTMENT OBJECTIVE
------------------------------------------------------------------------------
EV TRADITIONAL STOCK FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE GROWTH OF
PRINCIPAL AND INCOME FOR ITS SHAREHOLDERS. The Fund currently seeks to meet its
investment objective by investing its assets in the Stock Portfolio, a separate
registered investment company that invests in a number of carefully selected
securities. The emphasis is upon common stocks. The Fund's and the Portfolio's
investment objectives are nonfundamental and may be changed when authorized by a
vote of the Tustees of the Trust or the Portfolio, respectively, without
obtaining the approval of the Fund's shareholders or the investors in the
Portfolio, as the case may be. The Trustees of the Trust have no present
intention to change the Fund's objective and intend to submit any proposed
material change in the investment objective to shareholders in advance for their
approval.
HOW THE FUND AND THE PORTFOLIO INVEST THEIR ASSETS; RISKS
------------------------------------------------------------------------------
THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING IN THE
PORTFOLIO. TO ACHIEVE THE PORTFOLIO'S OBJECTIVE, PRIMARY EMPHASIS WILL BE PLACED
ON COMMON STOCKS OF COMPANIES WHICH APPEAR TO OFFER GOOD PROSPECTS FOR INCREASES
IN BOTH EARNINGS AND DIVIDENDS. The Portfolio will invest primarily (i.e., at
least 65% of its total assets during normal investment conditions) in equity
securities (common and preferred stocks, and securities convertible into common
stocks). The Portfolio's investments in convertible debt securities will be
limited to 20% of net assets. The criteria for such investments are the same as
those used for the common stock of the issuer and accordingly, may be of any
credit quality (including below investment grade). The Portfolio purchases
securities primarily for investment, rather than with a view to realizing
trading profits. Nevertheless, portfolio changes are made whenever considered
advisable in the pursuit of the Portfolio's stated investment objective.
In seeking to achieve its investment objective, or to consolidate growth
previously attained, the Portfolio may from time to time purchase bonds,
preferred stocks, U.S. Government obligations and other securities. Bonds will
constitute 5% or less of net assets and be investment grade (rated Baa or higher
by Moody's Investors Service, Inc. or BBB or higher by Standard & Poor's Ratings
Group or, if unrated, determined to be of comparable quality by the Portfolio's
Investment Adviser). Convertible debt securities that are not investment grade
have speculative characteristics and changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity to make principal
and interest payments than is the case with higher grade debt securities.
The Portfolio may invest in securities issued by foreign companies
(including American Depository Receipts and Global Depository Receipts). Such
investments may be subject to various risks such as fluctuations in currency and
exchange rates, foreign taxes, social, political and economic conditions in the
countries in which such companies operate, and changes in governmental, economic
or monetary policies both here and abroad. There may be less publicly available
information about a foreign company than about a comparable domestic company.
Because the securities markets in many foreign countries are not as developed as
those in the United States, the securities of many foreign companies are less
liquid and their prices are more volatile than securities of comparable domestic
companies. In order to hedge against possible variations in foreign exchange
rates pending the settlement of foreign securities transactions, the Portfolio
may buy or sell foreign currencies.
An investment in the Fund entails the risk that the principal value of Fund
shares and the income earned thereon may not increase or may decline. The
Portfolio's investments in equity securities are subject to the risk of adverse
developments affecting particular companies or industries and the stock market
generally. Investments in bonds are subject to the risk that the issuer may
default on its obligations to pay principal and interest. The value of bonds
tends to increase during periods of falling interest rates and to decline during
periods of rising interest rates. By investing in a diversified portfolio of
securities, the Portfolio seeks both to reduce the risks ordinarily inherent in
holding one security or securities of a single issuer and to improve the
prospects for possible growth by investing in a substantial number of prudently
selected securities. Attainment of the Portfolio's objective cannot, of course,
be assured since its asset value fluctuates with changes in the market value of
its investments and dividends paid depend upon income received by the Portfolio.
The Fund and the Portfolio have adopted certain fundamental investment
restrictions which are enumerated in detail in the Statement of Additional
Information and which may not be changed unless authorized by a shareholder vote
or an investor vote, respectively. Except for such enumerated restrictions and
as otherwise indicated in this prospectus, the investment objective and policies
of the Fund and the Portfolio are not fundamental policies and accordingly may
be changed by the Trustees of the Trust and the Portfolio without obtaining the
approval of the Fund's shareholders or the investors in the Portfolio, as the
case may be. If any changes were made in the Fund's investment objective, the
Fund might have an investment objective different from the objective which an
investor considered appropriate at the time the investor became a shareholder of
the Fund.
THE FUND IS NOT INTENDED TO BE A COMPLETE INVESTMENT PROGRAM, AND
PROSPECTIVE INVESTORS SHOULD TAKE INTO ACCOUNT THEIR OBJECTIVES AND OTHER
INVESTMENTS WHEN CONSIDERING THE PURCHASE OF FUND SHARES. THE FUND CANNOT
ELIMINATE RISK OR ASSURE ACHIEVEMENT OF ITS OBJECTIVE.
ORGANIZATION OF THE FUND AND THE PORTFOLIO
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THE FUND IS A DIVERSIFIED SERIES OF EATON VANCE SECURITIES TRUST, A BUSINESS
TRUST ESTABLISHED UNDER MASSACHUSETTS LAW PURSUANT TO A DECLARATION OF TRUST
DATED OCTOBER 19, 1990, AS AMENDED, AND IS THE SUCCESSOR TO A MASSACHUSETTS
TRUST WHICH COMMENCED ITS INVESTMENT COMPANY OPERATIONS IN 1931. THE TRUST IS A
MUTUAL FUND -- AN OPEN-END MANAGEMENT INVESTMENT COMPANY. The Trustees of the
Trust are responsible for the overall management and supervision of its affairs.
The Trust may issue an unlimited number of shares of beneficial interest (no par
value per share) in one or more series and because the Trust can offer separate
series (such as the Fund) it is known as a "series company." Each share
represents an equal proportionate beneficial interest in the Fund. When issued
and outstanding, the shares are fully paid and nonassessable by the Trust and
redeemable as described under "How to Redeem Fund Shares". Shareholders are
entitled to one vote for each full share held. Fractional shares may be voted
proportionately. Shares have no preemptive or conversion rights and are freely
transferable. In the event of the liquidation of the Fund, shareholders are
entitled to share pro rata in the net assets of the Fund available for
distribution to shareholders.
THE PORTFOLIO IS ORGANIZED AS A TRUST UNDER THE LAWS OF THE STATE OF NEW
YORK AND INTENDS TO BE TREATED AS A PARTNERSHIP FOR FEDERAL TAX PURPOSES. The
Portfolio, as well as the Trust, intends to comply with all applicable Federal
and state securities laws. The Portfolio's Declaration of Trust provides that
the Fund and other entities permitted to invest in the Portfolio (e.g., other
U.S. and foreign investment companies, and common and commingled trust funds)
will each be liable for all obligations of the Portfolio. However, the risk of
the Fund incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance exists and the Portfolio itself
is unable to meet its obligations. Accordingly, the Trustees of the Trust
believe that neither the Fund nor its shareholders will be adversely affected by
reason of the Fund investing in the Portfolio.
SPECIAL INFORMATION ON THE FUND/PORTFOLIO INVESTMENT STRUCTURE. An investor in
the Fund should be aware that the Fund, unlike mutual funds which directly
acquire and manage their own portfolios of securities, seeks to achieve its
investment objective by investing its assets in an interest in the Portfolio
(although the Fund may temporarily hold a de minimus amount of cash), which is a
separate investment company with an identical investment objective. Therefore,
the Fund's interest in the securities owned by the Portfolio is indirect. In
addition to selling an interest to the Fund, the Portfolio may sell interests to
other affiliated and non-affiliated mutual funds or institutional investors.
Such investors will invest in the Portfolio on the same terms and conditions and
will pay a proportionate share of the Portfolio's expenses. However, the other
investors investing in the Portfolio are not required to sell their shares at
the same public offering price as the Fund due to variations in sales
commissions and other operating expenses. Therefore, investors in the Fund
should be aware that these differences may result in differences in returns
experienced by investors in the various funds that invest in the Portfolio. Such
differences in returns are also present in other mutual fund structures,
including funds that have multiple classes of shares. For information regarding
the investment objective, policies and restrictions, see "The Fund's Investment
Objective" and "How the Fund and the Portfolio Invest their Assets; Risks".
Further information regarding investment practices may be found in the Statement
of Additional Information.
The Trustees of the Trust have considered the advantages and disadvantages
of investing the assets of the Fund in the Portfolio, as well as the advantages
and disadvantages of the two-tier format. The Trustees believe that the
structure offers opportunities for substantial growth in the assets of the
Portfolio, and affords the potential for economies of scale for the Fund. The
public shareholders of the Fund have previously approved the policy of investing
the Fund's assets in an interest in the Portfolio.
The Fund may withdraw (completely redeem) all its assets from the Portfolio
at any time if the Board of Trustees of the Trust determines that it is in the
best interest of the Fund to do so. The investment objective and the
nonfundamental investment policies of the Fund and the Portfolio may be changed
by the Trustees of the Trust and the Portfolio without obtaining the approval of
the shareholders of the Fund or the investors in the Portfolio, as the case may
be. Any such change of the investment objective will be preceded by thirty days'
advance written notice to the shareholders of the Fund or the investors in the
Portfolio, as the case may be. In the event the Fund withdraws all of its assets
from the Portfolio, or the Board of Trustees of the Trust determines that the
investment objective of the Portfolio is no longer consistent with the
investment objective of the Fund, such Trustees would consider what action might
be taken, including investing the assets of the Fund in another pooled
investment entity or retaining an investment adviser to manage the Fund's assets
in accordance with its investment objective. The Fund's investment performance
may be affected by a withdrawal of all its assets from the Portfolio.
Information regarding other pooled investment entities or funds which invest
in the Portfolio may be obtained by contacting Eaton Vance Distributors, Inc.
(the "Principal Underwriter" or "EVD"), 24 Federal Street, Boston, MA 02110,
(617) 482-8260. Smaller investors in the Portfolio may be adversely affected by
the actions of larger investors in the Portfolio. For example, if a large
investor withdraws from the Portfolio, the remaining investors may experience
higher pro rata operating expenses, thereby producing lower returns.
Additionally, the Portfolio may become less diverse, resulting in increased
portfolio risk, and experience decreasing economies of scale. However, this
possibility exists as well for historically structured funds which have large or
institutional investors.
Until recently, the Administrator sponsored and advised historically
structured funds. Funds which invest all their assets in interests in a separate
investment company are a relatively new development in the mutual fund industry
and, therefore, the Fund may be subject to additional regulations than
historically structured funds.
The Declaration of Trust of the Portfolio provides that the Portfolio will
terminate 120 days after the complete withdrawal of the Fund or any other
investor in the Portfolio, unless either the remaining investors, by unanimous
vote at a meeting of such investors, or a majority of the Trustees of the
Portfolio, by written instrument consented to by all investors, agree to
continue the business of the Portfolio. This provision is consistent with
treatment of the Portfolio as a partnership for Federal income tax purposes. See
"Distributions and Taxes" for further information. Whenever the Fund as an
investor in the Portfolio is requested to vote on matters pertaining to the
Portfolio (other than the termination of the Portfolio's business, which may be
determined by the Trustees of the Portfolio without investor approval), the Fund
will hold a meeting of Fund shareholders and will vote its interest in the
Portfolio for or against such matters proportionately to the instructions to
vote for or against such matters received from Fund shareholders. The Fund shall
vote shares for which it receives no voting instructions in the same proportion
as the shares for which it receives voting instructions. Other investors in the
Portfolio may alone or collectively acquire sufficient voting interests in the
Portfolio to control matters relating to the operation of the Portfolio, which
may require the Fund to withdraw its investment in the Portfolio or take other
appropriate action. Any such withdrawal could result in a distribution "in kind"
of portfolio securities (as opposed to a cash distribution from the Portfolio).
If securities are distributed, the Fund could incur brokerage, tax or other
charges in converting the securities to cash. In addition, the distribution in
kind may result in a less diversified portfolio of investments or adversely
affect the liquidity of the Fund. Notwithstanding the above, there are other
means for meeting shareholder redemption requests, such as borrowing.
The Trustees of the Trust, including a majority of the noninterested
Trustees, have approved written procedures designed to identify and address any
potential conflicts of interest arising from the fact that the Trustees of the
Trust and the Trustees of the Portfolio are the same. Such procedures require
each Board to take actions to resolve any conflict of interest between the Fund
and the Portfolio, and it is possible that the creation of separate Boards may
be considered. For further information concerning the Trustees and officers of
the Trust and the Portfolio, see the Statement of Additional Information.
MANAGEMENT OF THE FUND AND THE PORTFOLIO
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THE PORTFOLIO ENGAGES BOSTON MANAGEMENT AND RESEARCH ("BMR"), A WHOLLY-OWNED
SUBSIDIARY OF EATON VANCE MANAGEMENT ("EATON VANCE"), AS ITS INVESTMENT ADVISER.
EATON VANCE, ITS AFFILIATES AND ITS PREDECESSOR COMPANIES HAVE BEEN MANAGING
ASSETS OF INDIVIDUALS AND INSTITUTIONS SINCE 1924 AND MANAGING INVESTMENT
COMPANIES SINCE 1931.
Acting under the general supervision of the Board of Trustees of the
Portfolio, BMR manages the Portfolio's investments and affairs. Under its
investment advisory agreement with the Portfolio, BMR receives a monthly
advisory fee of 5/96 of 1% (equivalent to 0.625% annually) of the average daily
net assets of the Portfolio. For the period from the start of business, August
1, 1994, to December 31, 1994, the Portfolio paid BMR advisory fees equivalent
to 0.625% (annualized) of the Portfolio's average daily net assets for such
period. Prior to the close of business on August 1, 1994 (when the Fund
transferred its assets to the Portfolio in exchange for an interest in the
Portfolio), the Fund retained Eaton Vance as its investment adviser. For the
period from January 1, 1994, to August 1, 1994, the Fund paid Eaton Vance
advisory fees equivalent to 0.625% (annualized) of the Fund's average daily net
assets for such period.
BMR also furnishes for the use of the Portfolio office space and all
necessary office facilities, equipment and personnel for servicing the
investments of the Portfolio. The Portfolio is responsible for the payment of
all of its expenses other than those expressly stated to be payable by BMR under
the investment advisory agreement.
BMR places the portfolio transactions of the Portfolio for execution with
many broker-dealer firms and uses its best efforts to obtain execution of such
transactions at prices which are advantageous to the Portfolio and at reasonably
competitive commission rates. Subject to the foregoing, BMR may consider sales
of shares of the Fund or of other investment companies sponsored by BMR or Eaton
Vance as a factor in the selection of broker-dealer firms to execute portfolio
transactions.
Duncan W. Richardson has acted as the portfolio manager of the Portfolio
since it commenced operations. He has been a Vice President of Eaton Vance since
1987 and of BMR since 1992.
BMR OR EATON VANCE ACTS AS INVESTMENT ADVISER TO INVESTMENT COMPANIES AND
VARIOUS INDIVIDUAL AND INSTITUTIONAL CLIENTS WITH ASSETS UNDER MANAGEMENT OF
APPROXIMATELY $15 BILLION. Eaton Vance is a wholly-owned subsidiary of Eaton
Vance Corp., a publicly held holding company. Eaton Vance Corp., through its
subsidiaries and affiliates, engages in investment management and marketing
activities, fiduciary and banking services, oil and gas operations, real estate
investment, consulting and management, and development of precious metals
properties.
The Trust has retained the services of Eaton Vance to act as Administrator
of the Fund. The Trust has not retained the services of an investment adviser
since the Trust seeks to achieve the investment objective of the Fund by
investing the Fund's assets in the Portfolio. As Administrator, Eaton Vance
provides the Fund with general office facilities and supervises the overall
administration of the Fund. For these services Eaton Vance currently receives no
compensation. The Trustees of the Trust may determine, in the future, to
compensate Eaton Vance for such services.
The Portfolio and the Fund, as the case may be, will each be responsible for
all of its respective costs and expenses not expressly stated to be payable by
BMR under the investment advisory agreement, by Eaton Vance under the
administrative services agreement, or by EVD under the distribution agreement.
Such costs and expenses to be borne by the Portfolio and the Fund, as the case
may be, include, without limitation: custody and transfer agency fees and
expenses, including those incurred for determining net asset value and keeping
accounting books and records; expenses of pricing and valuation services; the
cost of share certficates; membership dues in investment company organizations;
expenses of acquiring, holding and disposing of securities and other
investments; fees and expenses of registering under the securities laws and the
governmental fees; expenses of reporting to shareholders and investors; proxy
statements and other expenses of shareholders' or investors' meetings; insurance
premiums; printing and mailing expenses; interest, taxes and corporate fees;
legal and accounting expenses; compensation and expenses of Trustees not
affiliated with BMR or Eaton Vance; and investment advisory fees, and, if any,
administrative services fees. The Portfolio and the Fund will also each bear
expenses incurred in connection with litigation in which the Portfolio or the
Fund, as the case may be, is a party and any legal obligation to indemnify its
respective officers and Trustees with respect thereto.
SERVICE PLAN
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In addition to advisory fees and other expenses, the Fund pays service fees
pursuant to a Service Plan (the "Plan") designed to meet the requirements of
Rule 12b-1 under the Investment Company Act of 1940 and the service fee
requirements of the revised sales charge rule of the National Association of
Securities Dealers, Inc. The Plan is described further in the Statement of
Additional Information, and the following is a brief description of the salient
features of the Plan.
THE PLAN PROVIDES THAT THE FUND MAY MAKE SERVICE FEE PAYMENTS FOR PERSONAL
SERVICES AND/OR THE MAINTENANCE OF SHAREHOLDER ACCOUNTS TO THE PRINCIPAL
UNDERWRITER, FINANCIAL SERVICE FIRMS ("AUTHORIZED FIRMS") AND OTHER PERSONS IN
AMOUNTS NOT EXCEEDING .25% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR ANY FISCAL
YEAR. The Trustees of the Trust have implemented the Plan by authorizing the
Fund to make quarterly service fee payments to the Principal Underwriter and
Authorized Firms in amounts not expected to exceed .25% of that portion of the
Fund's average daily net assets for any fiscal year which is attributable to
shares of the Fund sold on or after January 2, 1991 and remaining outstanding
for at least twelve months. During the fiscal year ended December 31, 1994, the
Fund made payments under the Plan equivalent to .049% of the Fund's average
daily net assets for such year.
VALUING FUND SHARES
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THE FUND VALUES ITS SHARES ONCE ON EACH DAY THE NEW YORK STOCK EXCHANGE (THE
"EXCHANGE") IS OPEN FOR TRADING, as of the close of regular trading on the
Exchange (normally 4:00 p.m. New York time). The Fund's net asset value per
share is determined by its custodian, Investors Bank & Trust Company ("IBT"),
(as agent for the Fund) in the manner authorized by the Trustees of the Trust.
Net asset value is computed by dividing the value of the Fund's total assets,
less its liabilities, by the number of shares outstanding. Because the Fund
invests its assets in an interest in the Portfolio, the Fund's net asset value
will reflect the value of its interest in the Portfolio (which, in turn,
reflects the underlying value of the Portfolio's assets and liabilities).
Authorized Firms must communicate an investor's order to the Principal
Underwriter prior to the close of the Principal Underwriter's business day to
receive that day's net asset value per Fund share and the public offering price
based thereon. It is the Authorized Firms' responsibility to transmit orders
promptly to the Principal Underwriter, which is a wholly-owned subsidiary of
Eaton Vance.
The Portfolio's net asset value is also determined as of the close of
regular trading on the Exchange. IBT (as custodian and agent for the Portfolio)
determines the Portfolio's net asset value in the manner authorized by the
Trustees of the Portfolio. Net asset value is computed by subtracting the
liabilities of the Portfolio from the value of its total assets. Securities
listed on securities exchanges or in the NASDAQ National Market are valued at
closing sale prices. Unlisted or listed securities for which closing sale prices
are not available are valued at the mean between the latest bid and asked
prices. Securities for which market quotations are unavailable, including any
security the disposition of which is restricted under the Securities Act of
1933, and other assets will be appraised at their fair value as determined in
good faith by or at the direction of the Trustees of the Portfolio. Short-term
obligations maturing in sixty days or less are valued at original cost which,
when combined with amortized discount or accrued interest, approximates market.
For further information regarding the valuation of an interest in the Portfolio,
see "Determination of Net Asset Value" in the Statement of Additional
Information. Eaton Vance Corp. owns 77.3% of the outstanding stock of IBT, the
Fund's and the Portfolio's custodian.
SHAREHOLDERS MAY DETERMINE THE VALUE OF THEIR INVESTMENT BY MULTIPLYING THE
NUMBER OF FUND SHARES OWNED BY THE CURRENT NET ASSET VALUE PER SHARE.
HOW TO BUY FUND SHARES
------------------------------------------------------------------------------
SHARES OF THE FUND MAY BE PURCHASED FOR CASH OR MAY BE ACQUIRED IN EXCHANGE FOR
SECURITIES. Investors may purchase shares of the Fund through Authorized Firms
at the effective public offering price, which price is based on the effective
net asset value per share plus the applicable sales charge. The Fund receives
the net asset value, while the sales charge is divided between the Authorized
Firms and the Principal Underwriter. The Principal Underwriter will furnish the
names of Authorized Firms to an investor upon request. The Fund may suspend the
offering of shares at any time and may refuse an order for the purchase of
shares.
The sales charge may vary depending on the size of the purchase and the
number of shares of Eaton Vance funds the investor may already own, any
arrangement to purchase additional shares during a 13-month period or special
purchase programs. Complete details of how investors may purchase shares at
reduced sales charges under a Statement of Intention, Right of Accumulation, or
various employee benefit plans are available from Authorized Firms or the
Principal Underwriter.
The current sales charges are:
SALES CHARGE SALES CHARGE DEALER DISCOUNT
AS PERCENTAGE OF AS PERCENTAGE OF AS PERCENTAGE OF
AMOUNT INVESTED OFFERING PRICE OFFERING PRICE
AMOUNT OF PURCHASE
Less than $100,000 ......... 3.90 3.75 3.15
$250,000 but less
than $500,000............. 2.83 2.75 2.30
$500,000 but less
than $1,000,000 .......... 2.04 2.00 1.70
$1,000,000 or more ......... 0* 0* 0**
* No sales charge is payable at the time of purchase on investments of $1
million or more. A contingent deferred sales charge ("CDSC") of 1% will be
imposed on such investments, as described below, in the event of certain
redemption transactions within 18 months of purchase.
** The Principal Underwriter may pay a commission to Authorized Firms who
initiate and are responsible for purchases of $1 million or more as follows:
1.00% on sales up to $2 million, plus 0.80% on the next $1 million, 0.20% on
the next $2 million, and 0.08% on the excess over $5 million.
The Principal Underwriter may at times allow discounts up to the full sales
charge. During periods when the discount includes the full sales charge, such
Firms may be deemed to be underwriters as that term is defined in the Securities
Act of 1933.
The Principal Underwriter may, from time to time, at its own expense,
provide additional incentives to Authorized Firms which employ registered
representatives who sell a minimum dollar amount of the Fund's shares and/or
shares of other funds distributed by the Principal Underwriter. In some
instances, such additional incentives may be offered only to certain Authorized
Firms whose representatives are expected to sell significant amounts of shares.
An initial investment in the Fund must be at least $1,000. Once an account
has been established the investor may send investments of $50 or more at any
time directly to the Fund's Transfer Agent (the "Transfer Agent") as follows:
The Shareholder Services Group, Inc., BOS725, P.O. Box 1559, Boston, MA 02104.
The $1,000 minimum initial investment is waived for Bank Automated Investing
accounts, which may be established with an investment of $50 or more. See "Eaton
Vance Shareholder Services".
Shares of the Fund may be sold at net asset value to current and retired
Directors and Trustees of Eaton Vance funds, including the Portfolio; to
officers and employees and clients of Eaton Vance and its affiliates; to
registered representatives and employees of Authorized Firms and bank employees
who refer customers to registered representatives of Authorized Firms; and to
such persons' spouses and children under the age of 21 and their beneficial
accounts. Shares may also be issued at net asset value (1) in connection with
the merger of an investment company with the Fund, (2) to investors making an
investment as part of a fixed fee program whereby an entity unaffiliated with
the Investment Adviser provides multiple investment services, such as
management, brokerage and custody and (3) where the amount invested represents
redemption proceeds from a mutual fund unaffiliated with Eaton Vance, if the
redemption occurred no more than 60 days' prior to the purchase of Fund shares
and the redeemed shares were subject to a sales charge.
No initial sales charge and no contingent deferred sales charge will be
payable or imposed with respect to shares of the Fund purchased by retirement
plans qualified under Section 401, 403(b) or 457 of the Internal Revenue Code of
1986, as amended (the "Code") ("Eligible Plans"). In order to purchase shares
without a sales charge, the plan sponsor of an Eligible Plan must notify the
Transfer Agent of the Fund of its status as an Eligible Plan. Participant
accounting services (including trust fund reconciliation services) will be
offered only through third party recordkeepers and not by EVD. The Fund's
Principal Underwriter may pay commissions to Authorized Firms who initiate and
are responsible for purchases of shares of the Fund by Eligible Plans of up to
1.00% of the amount invested in such shares.
ACQUIRING FUND SHARES IN EXCHANGE FOR SECURITIES. IBT, as escrow agent, will
receive securities acceptable to Eaton Vance, as Administrator, in exchange for
Fund shares at the applicable public offering price as shown above. The minimum
value of securities (or securities and cash) accepted for deposit is $5,000.
Securities accepted will be sold by IBT as agent for the account of their owner
on the day of their receipt by IBT or as soon thereafter as possible. The number
of Fund shares to be issued in exchange for securities will be the aggregate
proceeds from the sale of such securities, divided by the applicable public
offering price per Fund share on the day such proceeds are received. Eaton Vance
will use reasonable efforts to obtain the then current market price for such
securities but does not guarantee the best available price. Eaton Vance will
absorb any transaction costs, such as commissions, on the sale of the
securities.
Securities determined to be acceptable should be transferred via book entry
or physically delivered, in proper form for transfer, through an Authorized
Firm, together with a completed and signed Letter of Transmittal in approved
form (available from Authorized Firms), as follows:
IN THE CASE OF BOOK ENTRY:
Deliver through Depository Trust Co.
Broker #2212
Investors Bank & Trust Company
For A/C EV Traditional Stock Fund
IN THE CASE OF PHYSICAL DELIVERY:
Investors Bank & Trust Company
Attention: EV Traditional Stock Fund
Physical Securities Processing Settlement Area
89 South Street
Boston, MA 02111
Investors who are contemplating an exchange of securities for shares of the
Fund, or their representatives, are advised to contact Eaton Vance to determine
whether the securities are acceptable before forwarding such securities to IBT.
Eaton Vance reserves the right to reject any securities. Exchanging securities
for Fund shares may create a taxable gain or loss. Each investor should consult
his or her tax adviser with respect to the particular Federal, state and local
tax consequences of exchanging securities for Fund shares.
IF YOU DON'T HAVE AN AUTHORIZED FIRM, EATON VANCE CAN RECOMMEND ONE.
HOW TO REDEEM FUND SHARES
------------------------------------------------------------------------------
A SHAREHOLDER MAY REDEEM FUND SHARES BY DELIVERING TO THE SHAREHOLDER SERVICES
GROUP, INC., BOS725, P.O. BOX 1559, BOSTON, MASSACHUSETTS 02104, during its
business hours a written request for redemption in good order, plus any share
certificates with executed stock powers. The redemption price will be based on
the net asset value per Fund share next computed after such delivery. Good order
means that all relevant documents must be endorsed by the record owner (s)
exactly as the shares are registered and the signature(s) must be guaranteed by
a member of either the Securities Transfer Association's STAMP program or the
New York Stock Exchange's Medallion Signature Program, or certain banks, savings
and loan institutions, credit unions, securities dealers, securities exchanges,
clearing agencies and registered securities associations as required by a
regulation of the Securities and Exchange Commission (the "Commission") and
acceptable to The Shareholder Services Group, Inc. In addition, in some cases,
good order may require the furnishing of additional documents such as where
shares are registered in the name of a corporation, partnership or fiduciary.
Within seven days after receipt of a redemption request in good order by The
Shareholder Services Group, Inc., the Fund will make payment in cash for the net
asset value of the shares as of the date determined above, reduced by the amount
of any Federal income tax required to be withheld. Although the Fund normally
expects to make payment in cash for redeemed shares, the Trust, subject to
compliance with applicable regulations, has reserved the right to pay the
redemption price of shares of the Fund, either totally or partially, by a
distribution in kind of readily marketable securities withdrawn by the Fund from
the Portfolio. The securities so distributed would be valued pursuant to the
Portfolio's valuation procedures. If a shareholder received a distribution in
kind, the shareholder could incur brokerage or other charges in converting the
securities to cash.
To sell shares at their net asset value through an Authorized Firm (a
repurchase), a shareholder can place a repurchase order with the Authorized
Firm, which may charge a fee. The value of such shares is based upon the net
asset value calculated after EVD, as the Fund's agent, receives the order. It is
the Authorized Firm's responsibility to transmit promptly repurchase orders to
EVD. Throughout this Prospectus, the word "redemption" is generally meant to
include a repurchase.
If shares were recently purchased, the proceeds of a redemption (or
repurchase) will not be sent until the check (including a certified or cashier's
check) received for the shares purchased has cleared. Payment for shares
tendered for redemption may be delayed up to 15 days from the purchase date when
the purchase check has not yet cleared. Redemptions or repurchases may result in
a taxable gain or loss.
Due to the high cost of maintaining small accounts, the Fund reserves the
right to redeem accounts with balances of less than $1,000. Prior to such a
redemption, shareholders will be given 60 days' written notice to make an
additional purchase. Thus, an investor making an initial investment of $1,000
would not be able to redeem shares without being subject to this policy.
However, no such redemption would be required by the Fund if the cause of the
low account balance was a reduction in the net asset value of Fund shares.
If shares have been purchased at net asset value with no initial sales
charge by virtue of the purchase having been in the amount of $1 million or more
and are redeemed within 18 months after the end of the calendar month in which
the purchase was made, a CDSC of 1% will be imposed on such redemption. The CDSC
will be retained by the Principal Underwriter.
The CDSC will be imposed on an amount equal to the lesser of the current
market value or the original purchase price of the shares redeemed. Accordingly,
no CDSC will be imposed on increases in account value above the initial purchase
price, including any dividends or distributions that have been reinvested in
additional shares. In determining whether a CDSC is applicable to a redemption,
the calculation will be made in a manner that results in the lowest possible
rate being charged. Accordingly, it will be assumed that redemptions are made
first from any shares in the shareholder's account that are not subject to a
CDSC.
The CDSC is waived for redemptions involving certain liquidation, merger or
acquisition transactions involving other investment companies. If a shareholder
reinvests redemption proceeds within the 30-day period and in accordance with
the conditions set forth under "Eaton Vance Shareholder Services -- Reinvestment
Privilege," the shareholder's account will be credited with the amount of any
CDSC paid on such redeemed shares.
REPORTS TO SHAREHOLDERS
------------------------------------------------------------------------------
THE FUND WILL ISSUE TO ITS SHAREHOLDERS SEMI-ANNUAL AND ANNUAL REPORTS
CONTAINING FINANCIAL STATEMENTS. Financial statements included in annual reports
are audited by the Fund's independent accountants. Shortly after the end of each
calendar year, the Fund will furnish all shareholders with information necessary
for preparing Federal and state tax returns.
THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS
------------------------------------------------------------------------------
AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF FUND SHARES, THE FUND'S TRANSFER
AGENT, THE SHAREHOLDER SERVICES GROUP, INC., WILL SET UP A LIFETIME INVESTING
ACCOUNT FOR THE INVESTOR ON THE FUND'S RECORDS. This account is a complete
record of all transactions between the investor and the Fund which at all times
shows the balance of shares owned. The Fund will not issue share certificates
except upon request.
Each time a transaction takes place in a shareholder's account, the
shareholder will receive a statement showing complete details of the transaction
and the current balance in the account. (Under certain investment plans,
statements may be sent only quarterly). THE LIFETIME INVESTING ACCOUNT ALSO
PERMITS A SHAREHOLDER TO MAKE ADDITIONAL INVESTMENTS IN SHARES BY SENDING A
CHECK FOR $50 OR MORE to The Shareholder Services Group, Inc.
Any questions concerning a shareholder's account or services available may
be directed by telephone to EATON VANCE SHAREHOLDER SERVICES at 800-225-6265,
extension 2 or in writing to The Shareholder Services Group, Inc., BOS725, P.O.
Box 1559, Boston, Massachusetts 02104. (Please provide the name of the
shareholder, the Fund and the account number).
THE FOLLOWING DISTRIBUTION OPTIONS WILL BE AVAILABLE TO ALL LIFETIME
INVESTING ACCOUNTS and may be changed as often as desired by written notice to
the Fund's dividend-disbursing agent, The Shareholder Services Group, Inc.,
BOS725, P.O. Box 1559, Boston, MA 02104. The currently effective option will
appear on each confirmation statement.
Share Option -- Dividends and capital gains will be reinvested in additional
shares.
Income Option -- Dividends will be paid in cash; and capital gains will be
reinvested in additional shares.
Cash Option -- Dividends and capital gains will be paid in cash.
The Share Option, will be assigned if no other option is specified.
Distributions, including those reinvested, will be reduced by any withholding
required under Federal income tax laws.
If the Income Option or Cash Option has been selected, dividend and/or
capital gains distribution checks which are returned by the United States Postal
Service as not deliverable or which remain uncashed for six months or more will
be reinvested in the account in shares at the then current net asset value.
Furthermore, the distribution option on the account will be automatically
changed to the Share Option until such time as the shareholder selects a
different option.
DISTRIBUTION INVESTMENT OPTION. In addition to the distribution options set
forth above, dividends and/or capital gains may be invested in additional shares
of another Eaton Vance fund. Before selecting this option, a shareholder should
obtain a prospectus of the other Eaton Vance fund and consider its objectives
and policies carefully.
"STREET NAME" ACCOUNTS. If shares of the Fund are held in a "street name"
account with an Authorized Firm, all recordkeeping, transaction processing and
payments of distributions relating to the beneficial owner's account will be
performed by the Authorized Firm, and not by the Fund and its Transfer Agent.
Since the Fund will have no record of the beneficial owner's transactions, a
beneficial owner should contact the Authorized Firm to purchase, redeem or
exchange shares, to make changes in or give instructions concerning the account,
or to obtain information about the account. The transfer of shares in a "street
name" account to an account with another dealer or to an account directly with
the Fund involves special procedures and will require the beneficial owner to
obtain historical purchase information about the shares in the account from the
Authorized Firm. Before establishing a "street name" account with an investment
firm, or transferring the account to another investment firm, an investor
wishing to reinvest distributions should determine whether the firm which will
hold the shares allows reinvestment of distributions in "street name" accounts.
UNDER A LIFETIME INVESTING ACCOUNT A SHAREHOLDER CAN MAKE ADDITIONAL
INVESTMENTS IN SHARES BY SENDING A CHECK FOR $50 OR MORE.
THE EATON VANCE EXCHANGE PRIVILEGE
------------------------------------------------------------------------------
Shares of the Fund currently may be exchanged for shares of any of the following
funds: Eaton Vance Cash Management Fund, Eaton Vance Income Fund of Boston,
Eaton Vance Municipal Bond Fund L.P., Eaton Vance Tax Free Reserves and any fund
in the Eaton Vance Traditional Group of Funds on the basis of net asset value
per share of each fund at the time of the exchange, provided that such exchange
offers are available only in states where shares of the fund being acquired may
be legally sold.
Each exchange must involve shares which have a net asset value of $1,000.
The exchange privilege may be changed or discontinued without penalty.
Shareholders will be given sixty (60) days' notice prior to any termination or
material amendment of the exchange privilege. The Fund does not permit the
exchange privilege to be used for "Market Timing" and may terminate the exchange
privilege for any shareholder account engaged in Market Timing activity. Any
shareholder account for which more than two round-trip exchanges are made within
any twelve month period will be deemed to be engaged in Market Timing.
Furthermore, a group of unrelated accounts for which exchanges are entered
contemporaneously by a financial intermediary will be considered to be engaged
in Market Timing.
Shares of the Fund which are subject to a CDSC may be exchanged into any of
the above funds without incurring the CDSC. The shares acquired in an exchange
may be subject to a CDSC upon redemption. For purposes of computing the CDSC
payable upon the redemption of shares acquired in an exchange, the holding
period of the original shares is added to the holding period of the shares
acquired in the exchange.
The Shareholder Services Group, Inc. makes exchanges at the next determined
net asset value after receiving an exchange request in good order (see "How to
Redeem Fund Shares"). Consult The Shareholder Services Group, Inc. for
additional information concerning the exchange privilege. Applications and
prospectuses of the other funds are available from Authorized Firms or the
Principal Underwriter The prospectus for each fund describes its investment
objectives and policies, and shareholders should obtain a prospectus and
consider these objectives and policies carefully before requesting an exchange.
Shares of certain other funds for which Eaton Vance acts as investment
adviser or administrator may be exchanged for Fund shares on the basis of the
net asset value per share of each Fund at the time of the exchange (plus, in the
case of an exchange made within six months of the date of purchase, an amount
equal to the difference, if any, between the sales charge previously paid on the
shares being exchanged and the sales charge payable on the Fund shares being
acquired). Any such exchange is subject to any restrictions or qualifications
set forth in the current prospectus of any such fund.
Telephone exchanges are accepted by The Shareholder Services Group, Inc.,
provided that the investor has not disclaimed in writing the use of the
privilege. To effect such exchanges, call The Shareholder Services Group, Inc.
at 800-262-1122 or, within Massachusetts, 617-573-9403, Monday through Friday,
9:00 a.m. to 4:00 p.m. (Eastern Standard Time). Shares acquired by telephone
exchange must be registered in the same name(s) and with the same address as the
shares being exchanged. Neither the Fund, the Principal Underwriter nor The
Shareholder Services Group, Inc. will be responsible for the authenticity of
exchange instructions received by telephone; provided that reasonable procedures
to confirm that instructions communicated are genuine have been followed.
Telephone instructions will be tape recorded. In times of drastic economic or
market changes, a telephone exchange may be difficult to implement. An exchange
may result in a taxable gain or loss.
EATON VANCE SHAREHOLDER SERVICES
------------------------------------------------------------------------------
THE FUND OFFERS THE FOLLOWING SERVICES, WHICH ARE VOLUNTARY, INVOLVE NO EXTRA
CHARGE, AND MAY BE CHANGED OR DISCONTINUED WITHOUT PENALTY AT ANY TIME. Full
information on each of the services described below and an application, where
required, are available from Authorized Firms or the Principal Underwriter. The
cost of administering such services for the benefit of shareholders who
participate in them is borne by the Fund as an expense to all shareholders.
INVEST-BY-MAIL -- FOR PERIODIC SHARE ACCUMULATION: Once the $1,000 minimum
investment has been made, checks of $50 or more payable to the order of the Fund
may be mailed directly to The Shareholder Services Group, Inc., BOS725, P.O. Box
1559, Boston, MA 02104 at any time -- whether or not distributions are
reinvested. The name of the shareholder, the Fund and the account number should
accompany each investment.
BANK AUTOMATED INVESTING -- FOR REGULAR SHARE ACCUMULATION: Cash investments of
$50 or more may be made automatically each month or quarter from a shareholder's
bank account. The $1,000 minimum initial investment and small account redemption
policy are waived for these accounts.
STATEMENT OF INTENTION: Purchases of $100,000 or more made over a 13-month
period are eligible for reduced sales charges. See "Statement of Intention and
Escrow Agreement."
RIGHT OF ACCUMULATION: Purchases may qualify for reduced sales charges when the
current market value of holdings (shares at current offering price), plus new
purchases, reaches $100,000 or more. Shares of the Eaton Vance funds mentioned
below under "The Eaton Vance Exchange Privilege" may be combined under the
Statement of Intention and Right of Accumulation.
WITHDRAWAL PLAN: A shareholder may draw on shareholdings systematically with
monthly or quarterly checks in the amount specified by the shareholder. A
minimum deposit of $5,000 in shares is required.
REINVESTMENT PRIVILEGE: A SHAREHOLDER WHO HAS REPURCHASED OR REDEEMED SHARES MAY
REINVEST ANY PORTION OR ALL OF THE REPURCHASE OR REDEMPTION PROCEEDS (PLUS THAT
AMOUNT NECESSARY TO ACQUIRE A FRACTIONAL SHARE TO ROUND OFF THE PURCHASE TO THE
NEAREST FULL SHARE) IN SHARES OF THE FUND, or, provided that the shares
repurchased or redeemed have been held for at least 30 days, in shares of any of
the other funds offered by the Principal Underwriter subject to an initial sales
charge, at net asset value, provided that the reinvestment is effected within 30
days after such repurchase or redemption. Shares are sold to a reinvesting
shareholder at the next determined net asset value following timely receipt of a
written purchase order by the Principal Underwriter or by the fund whose shares
are to be purchased (or by such fund's transfer agent). The privilege is also
available to holders of shares of the other funds offered subject to an initial
sales charge by the Principal Underwriter who wish to reinvest such redemption
or repurchase proceeds in shares of the Fund. If a shareholder reinvests
redemption proceeds within the 30-day period the shareholder's account will be
credited with the amount of any CDSC paid on such redeemed shares. To the extent
that any shares of the Fund are sold at a loss and the proceeds are reinvested
in shares of the Fund (or other shares of the Fund are acquired within the
period beginning 30 days before and ending 30 days after the date of the
redemption) some or all of the loss generally will not be allowed as a tax
deduction. Special rules may apply to the computation of gain or loss and to the
deduction of loss on a repurchase or redemption followed by a reinvestment. See
"Distributions and Taxes". Shareholders should consult their tax advisers
concerning the tax consequences of reinvestments.
TAX-SHELTERED RETIREMENT PLANS: Shares of the Fund are available for purchase
in connection with the following tax-sheltered retirement plans:
--Pension and Profit Sharing Plans for self-employed individuals,
corporations and non-profit organizations;
--Individual Retirement Account Plans for individuals and their non-
employed spouses; and
--403(b) Retirement Plans for employees of public school systems, hospitals,
colleges and other non-profit organizations meeting certain requirements
of the Code.
Detailed information concerning these plans, including certain exceptions to
minimum investment requirements, and copies of the plans are available from the
Principal Underwriter. This information should be read carefully and
consultation with an attorney or tax adviser may be advisable. The information
sets forth the service fee charged for retirement plans and describes the
Federal income tax consequences of establishing a plan. Under all plans,
dividends and distributions will be automatically reinvested in additional
shares.
DISTRIBUTIONS AND TAXES
------------------------------------------------------------------------------
It is the present policy of the Fund to pay at least quarterly dividends
from net investment income (when available) allocated to the Fund by the
Portfolio, less the Fund's direct and allocated expenses, and to distribute at
least annually any realized net capital gains (the Fund's realized net capital
gains generally consist of the net realized capital gains from the sale of
portfolio securities allocated to the Fund by the Portfolio).
Shareholders may reinvest dividends, if any, in shares of the Fund at the
current net asset value per share as of the ex-dividend date and may accumulate
capital gains distributions, if any, in additional shares of the Fund also at
the current net asset value per share as of the ex-dividend date.
Distributions by the Fund of ordinary income and net short-term capital
gains allocated to the Fund by the Portfolio, will be taxable to the Fund's
shareholders as ordinary income, whether received in cash or reinvested in
additional shares of the Fund. Shareholders reinvesting such distributions
should treat the amount of the entire distribution as the tax cost basis of the
additional shares acquired by reason of such reinvestment. Distributions of net
long-term capital gains are taxable to shareholders as such, whether received in
cash or reinvested in additional shares of the Fund, and regardless of the
length of time shares have been owned by shareholders. If shares are purchased
shortly before the record date of a distribution, the shareholder will pay the
full price for the shares and then receive some portion of the price back as a
taxable distribution. Certain distributions which are declared in October,
November or December and paid the following January will be reportable by
shareholders as if received on December 31 of the year in which they are
declared.
Sales charges paid upon a purchase of shares of the Fund cannot be taken
into account for purposes of determining gain or loss on a redemption or
exchange of the shares before the 91st day after their purchase to the extent
shares of the Fund or of another fund are subsequently acquired pursuant to the
Fund's reinvestment or exchange privilege. In addition, losses realized on a
redemption of Fund shares may be disallowed under certain "wash sale" rules if
within a period beginning 30 days before and ending 30 days after the date of
redemption other shares of the Fund are acquired. Any disregarded or disallowed
amounts will result in an adjustment to the shareholder's tax basis in some or
all of any other shares acquired.
Shareholders will receive annually tax information notices and Forms 1099 to
assist in the preparation of their Federal and state tax returns for the prior
calendar year's distributions, proceeds from the redemption or exchange of Fund
shares, and Federal income tax (if any) withheld by the Fund's Transfer Agent.
In order to qualify as a regulated investment company under the Code, the
Fund must satisfy certain requirements relating to the sources of its income,
the distribution of its income, and the diversification of its assets. In
satisfying these requirements, the Fund will treat itself as owning its
proportionate share of each of the Portfolio's assets and as entitled to the
income of the Portfolio properly attributable to such share.
AS A REGULATED INVESTMENT COMPANY UNDER THE CODE, THE FUND DOES NOT PAY
FEDERAL INCOME OR EXCISE TAXES TO THE EXTENT THAT IT DISTRIBUTES TO
SHAREHOLDERS ITS NET INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS IN
ACCORDANCE WITH THE TIMING REQUIREMENTS IMPOSED BY THE CODE. AS A
PARTNERSHIP UNDER THE CODE, THE PORTFOLIO DOES NOT PAY FEDERAL INCOME OR
EXCISE TAXES.
PERFORMANCE INFORMATION
------------------------------------------------------------------------------
FROM TIME TO TIME, THE FUND MAY ADVERTISE ITS AVERAGE ANNUAL TOTAL RETURN. The
Fund's average annual total return is determined by multiplying a hypothetical
initial purchase order of $1,000 by the average annual compounded rate of return
(including capital appreciation/depreciation, and dividends and distributions
paid and reinvested) for the stated period and annualizing the result. The
calculation assumes the maximum sales charge is deducted from the initial $1,000
purchase order and that all dividends and distributions are reinvested at net
asset value on the reinvestment dates during the period. The Fund may also
publish annual and cumulative total return figures from time to time.
The Fund may also furnish total return calculations based on investments at
various sales charge levels or at net asset value. Any performance data which is
based on the Fund's net asset value per share would be reduced if a sales charge
were taken into account.
Investors should note that the investment results of the Fund will fluctuate
over time, and any presentation of the Fund's total return for any prior period
should not be considered as a representation of what an investment may earn or
what an investor's total return may be in any future period.
STATEMENT OF INTENTION AND ESCROW AGREEMENT
------------------------------------------------------------------------------
TERMS OF ESCROW. If the investor, on an application, makes a Statement of
Intention to invest a specified amount over a thirteen-month period, then out of
the initial purchase (or subsequent purchases if necessary) 5% of the dollar
amount specified on the application shall be held in escrow by the escrow agent
in the form of shares (computed to the nearest full share at the public offering
price applicable to the initial purchase hereunder) registered in the investor's
name. All income dividends and capital gains distributions on escrowed shares
will be paid to the investor or to the investor's order.
When the minimum investment so specified is completed, the escrowed shares
will be delivered to the investor. If the investor has an accumulation account
the shares will remain on deposit under the investor's account.
If total purchases under this Statement of Intention are less than the
amount specified, the investor will promptly remit to EVD any difference between
the sales charge on the amount specified and on the amount actually purchased.
If the investor does not within 20 days after written request by EVD or the
Authorized Firm pay such difference in sales charge, the escrow agent will
redeem an appropriate number of the escrowed shares in order to realize such
difference. Full shares remaining after any such redemption together with any
excess cash proceeds of the shares so redeemed will be delivered to the investor
or to the investor's order by the escrow agent.
In signing the application, the investor irrevocably constitutes and
appoints the escrow agent the investor's attorney to surrender for redemption
any or all escrowed shares with full power of substitution in the premises.
PROVISION FOR RETROACTIVE PRICE ADJUSTMENT. If total purchases made under this
Statement are large enough to qualify for a lower sales charge than that
applicable to the amount specified, all transactions will be computed at the
expiration date of this Statement to give effect to the lower charge. Any
difference in sales charge will be refunded to the investor in cash, or applied
to the purchase of additional shares at the lower charge if specified by the
investor. This refund will be made by the Authorized Firm and by EVD. If at the
time of the recomputation a firm other than the original firm is placing the
orders, the adjustment will be made only on those shares purchased through the
firm then handling the account.
<PAGE>
INVESTMENT ADVISER OF
STOCK PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV TRADITIONAL STOCK FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EV TRADITIONAL STOCK FUND
24 FEDERAL STREET
BOSTON, MA 02110
T-STP
[LOGO]
EV TRADITIONAL
STOCK FUND
PROSPECTUS
APRIL 1, 1995
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
STATEMENT OF
ADDITIONAL INFORMATION
April 1, 1995
EV CLASSIC STOCK FUND
24 Federal Street
Boston, Massachusetts 02110
(800) 225-6265
This Statement of Additional Information consists of two parts. Part I
provides information about EV Classic Stock Fund (the "Fund") and certain other
series of Eaton Vance Securities Trust (the "Trust"). Part II provides
information solely about the Fund. Where appropriate, Part I includes cross-
references to the relevant sections of Part II that provide additional, Fund-
specific information.
------------------------------------------------------------------------------
TABLE OF CONTENTS
PART I
Investment Objective, Policies and Restrictions ......................... 2
Other Investment Features ............................................... 3
Trustees and Officers ................................................... 5
Investment Adviser and Administrator .................................... 6
Custodian ............................................................... 8
Service for Withdrawal .................................................. 8
Determination of Net Asset Value ........................................ 9
Investment Performance .................................................. 9
Taxes ................................................................... 10
Portfolio Security Transactions ......................................... 12
Other Information ....................................................... 14
Independent Accountants ................................................. 15
PART II
Fees and Expenses ....................................................... a-1
Principal Underwriter ................................................... a-1
Distribution Plan ....................................................... a-2
Performance Information ................................................. a-3
Additional Tax Matters .................................................. a-3
Control Persons and Principal Holders of Securities ..................... a-4
Financial Statements .................................................... a-5
------------------------------------------------------------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY THE PROSPECTUS OF EV CLASSIC STOCK FUND DATED APRIL 1, 1995, AS
SUPPLEMENTED FROM TIME TO TIME. THIS STATEMENT OF ADDITIONAL INFORMATION
SHOULD BE READ IN CONJUNCTION WITH SUCH PROSPECTUS, A COPY OF WHICH MAY BE
OBTAINED WITHOUT CHARGE BY CONTACTING EATON VANCE DISTRIBUTORS, INC. (THE
"PRINCIPAL UNDERWRITER") (SEE BACK COVER FOR ADDRESS AND PHONE NUMBER).
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
STATEMENT OF
ADDITIONAL INFORMATION
APRIL 1, 1995
EV MARATHON STOCK FUND
24 Federal Street
Boston, Massachusetts 02110
(800) 225-6265
This Statement of Additional Information consists of two parts. Part I
provides information about EV Marathon Stock Fund (the "Fund") and certain other
series of Eaton Vance Securities Trust (the "Trust"). Part II provides
information solely about the Fund. Where appropriate, Part I includes cross-
references to the relevant sections of Part II that provide additional, Fund-
specific information
------------------------------------------------------------------------------
TABLE OF CONTENTS
PART I
Investment Objective, Policies and Restrictions ..................... 2
Other Investment Features ........................................... 3
Trustees and Officers ............................................... 5
Investment Adviser and Administrator ................................ 6
Custodian ........................................................... 8
Service for Withdrawal .............................................. 8
Determination of Net Asset Value .................................... 8
Investment Performance .............................................. 9
Taxes ............................................................... 10
Portfolio Security Transactions ..................................... 11
Other Information ................................................... 13
Independent Accountants ............................................. 14
PART II
Fees and Expenses ................................................... a-1
Principal Underwriter ............................................... a-1
Distribution Plan ................................................... a-2
Performance Information ............................................. a-3
Additional Tax Matters .............................................. a-3
Control Persons and Principal Holders of Securities .................. a-4
Financial Statements ................................................. a-5
------------------------------------------------------------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY THE PROSPECTUS OF EV MARATHON STOCK FUND DATED APRIL 1, 1995,
AS SUPPLEMENTED FROM TIME TO TIME. THIS STATEMENT OF ADDITIONAL INFORMATION
SHOULD BE READ IN CONJUNCTION WITH SUCH PROSPECTUS, A COPY OF WHICH MAY BE
OBTAINED WITHOUT CHARGE BY CONTACTING EATON VANCE DISTRIBUTORS, INC. (THE
"PRINCIPAL UNDERWRITER") (SEE BACK COVER FOR ADDRESS AND PHONE NUMBER).
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
STATEMENT OF
ADDITIONAL INFORMATION
APRIL 1, 1995
EV TRADITIONAL STOCK FUND
24 Federal Street
Boston, Massachusetts 02110
(800) 225-6265
This Statement of Additional Information consists of two parts. Part I
provides information about EV Traditional Stock Fund (the "Fund") and certain
other series of Eaton Vance Securities Trust (the "Trust"). Part II provides
information solely about the Fund. Where appropriate, Part I includes cross-
references to the relevant sections of Part II that provide additional, Fund-
specific information.
------------------------------------------------------------------------------
TABLE OF CONTENTS
PART I
Investment Objective, Policies and Restrictions .......................... 2
Other Investment Features ................................................ 3
Trustees and Officers .................................................... 5
Investment Adviser and Administrator ..................................... 6
Custodian ................................................................ 8
Service for Withdrawal ................................................... 8
Determination of Net Asset Value ......................................... 8
Investment Performance ................................................... 9
Taxes .................................................................... 9
Portfolio Security Transactions .......................................... 11
Other Information ........................................................ 12
Independent Accountants .................................................. 13
PART II
Fees and Expenses ....................................................... a-1
Services for Accumulation ............................................... a-1
Principal Underwriter ................................................... a-2
Service Plan ............................................................ a-3
Performance Information ................................................. a-4
Additional Tax Matters .................................................. a-4
Control Persons and Principal Holders of Securities ..................... a-5
Financial Statements .................................................... a-6
------------------------------------------------------------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY THE PROSPECTUS OF EV TRADITIONAL STOCK FUND DATED APRIL 1,
1995, AS SUPPLEMENTED FROM TIME TO TIME. THIS STATEMENT OF ADDITIONAL
INFORMATION SHOULD BE READ IN CONJUNCTION WITH SUCH PROSPECTUS, A COPY OF
WHICH MAY BE OBTAINED WITHOUT CHARGE BY CONTACTING EATON VANCE DISTRIBUTORS,
INC. (THE "PRINCIPAL UNDERWRITER") (SEE BACK COVER FOR ADDRESS AND PHONE
NUMBER).
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART I
The following provides information about the Fund and certain other series
of the Trust.
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS
The investment objective of the Fund, a diversified series of the Trust, is
to provide growth of principal and income for its shareholders. The Fund
currently seeks to achieve its investment objective by investing its assets in
the Stock Portfolio (the "Portfolio"), a separate registered investment company
with the same investment objective as the Fund and substantially the same
investment policies and restrictions as the Fund. The Portfolio seeks to achieve
its investment objective by investing in a number of carefully selected
securities.
The Trustees of the Trust may withdraw the Fund's investment from the
Portfolio at any time, if they determine that it is in the best interests of the
Fund to do so. Upon any such withdrawal, the Fund's assets would be invested in
another investment company with substantially the same investment objective,
policies and restrictions as those of the Fund or directly in investment
securities in accordance with the Portfolio's investment policies, as described
below. Except as indicated below, the approval of the Fund's shareholders would
not be required to change the Portfolio's investment policies discussed below,
including those concerning security transactions.
The Portfolio represents the best efforts of Boston Management and Research
("BMR" or the "Investment Adviser") to combine in a single investment package
those securities which it considers most appropriate.
Primary emphasis will be placed on common stocks of companies which appear
to offer good prospects for increases in both earnings and dividends. The
Portfolio's investments in convertible debt securities will be limited to 20% of
its net assets.
In seeking to achieve its investment objective, or to consolidate growth
previously attained, the Portfolio may from time to time purchase bonds,
preferred stocks, U.S. Government obligations and other securities. The
Portfolio purchases securities primarily for investment, rather than with a view
to realizing trading profits. Nevertheless, portfolio changes are made whenever
considered advisable in the pursuit of the Portfolio's stated investment
objective.
The Portfolio may also invest in lower quality, high risk, high yielding
convertible debt securities. Securities rated below investment grade may be
subject to greater credit risks, including the possibility of default or
bankruptcy of the issuer, and greater relative volatility than securities rated
above investment grade.
By investing in a diversified portfolio of securities, the Portfolio seeks
both to reduce the risks ordinarily inherent in holding one security or
securities of a single issuer and to improve the prospects for possible growth
by investing in a substantial number of prudently selected securities.
Attainment of the Portfolio's objective cannot, of course, be assured since its
net asset value fluctuates with changes in the market value of its investments
and dividends paid depend upon income received by the Portfolio.
The following investment restrictions have been adopted by the Fund and may
be changed only by the vote of a majority of the Fund's outstanding voting
securities as defined in the Investment Company Act of 1940 (the "1940 Act").
As a matter of fundamental investment policy, the Fund may not:
(1) With respect to 75% of its total assets, invest more than 5% of its
total assets taken at market value in the securities of any one issuer or in
more than 10% of the outstanding voting securities of any one issuer, except
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities and except securities of other investment companies.
(2) Borrow money or issue senior securities, except as permitted by the
Investment Company Act of 1940;
(3) Purchase securities on margin (but the Fund may obtain such short-term
credits as may be necessary for the clearance of purchases and sales of
securities);
(4) Engage in underwriting securities of other issuers;
(5) Invest in real estate (although it may purchase and sell securities
which are secured by real estate and securities of companies which invest or
deal in real estate);
(6) Invest in commodities or commodity contracts for the purchase and sale
of physical commodities; or
(7) Make loans to any person except by (a) the acquisition of debt
securities and making portfolio investments, (b) entering into repurchase
agreements or (c) lending portfolio securities.
In addition, the Fund does not intend to concentrate 25% or more of its
assets in any one industry (provided that there is no limitation with respect to
obligations issued or guaranteed by the U.S. Government or any of its agencies
or instrumentalities).
Notwithstanding the investment policies and restrictions of the Fund, the
Fund may invest its assets in an open-end management investment company with
substantially the same investment objective, policies and restrictions as the
Fund.
The Trustees of the Trust and the Portfolio do not intend that the Fund or
the Portfolio borrow money for leveraging or investment purposes.
The Portfolio has adopted substantially the same fundamental investment
restrictions as the foregoing numbered investment restrictions adopted by the
Fund; such restrictions cannot be changed without the approval of a "majority of
the outstanding voting securities" of the Portfolio, which as used in this
Statement of Additional Information means the lesser of (a) 67% of the
outstanding voting securities of the Portfolio present or represented by proxy
at a meeting if the holders of more than 50% of the outstanding voting
securities of the Portfolio are present or represented at the meeting or (b)
more than 50% of the outstanding voting securities of the Portfolio. The term
"voting securities" as used in this paragraph has the same meaning as in the
1940 Act. Whenever the Trust is requested to vote on a change in the investment
restrictions of the Portfolio, the Trust will hold a meeting of Fund
shareholders and will cast its vote as instructed by the shareholders.
The Fund and the Portfolio have each adopted the following nonfundamental
investment policies which may be changed with respect to the Fund by the
Trustees of the Trust without approval by the Fund's shareholders or may be
changed with respect to the Portfolio by the Trustees of the Portfolio with or
without the approval of the Fund or the Portfolio's other investors. As a matter
of nonfundamental policy, neither the Fund nor the Portfolio may: (a) invest
more than 15% of net assets in investments which are not readily marketable,
including restricted securities and repurchase agreements maturing in more than
seven days. Restricted securities for the purposes of this limitation do not
include securities eligible for resale pursuant to Rule 144A under the
Securities Act of 1933 that the Board of Trustees of the Trust or the Portfolio
or its delegate, determines to be liquid, based upon the trading markets for the
specific security; (b) make short sales of securities or maintain a short
position, unless at all times when a short position is open the Fund or the
Portfolio either owns an equal amount of such securities or owns securities
convertible into or exchangeable for securities of the same issue as, and equal
in amount to, the securities sold short; (c) invest in the securities of any
issuer when any Trustee of the Trust or the Portfolio, the Investment Adviser,
or any officer or trustee of the Investment Adviser owns in excess of 1/2 of 1%
of the issuer's securities if such owners together own more than 5% of such
securities; (d) invest more than 5% of its total assets (taken at current value)
in the securities of issuers which, including their predecessors, have been in
operation for less than three years (unless such security is rated at least B or
a comparable rating at the time of purchase by at least one nationally
recognized rating service), and except for obligations issued or guaranteed by
the U.S. Government or any of its agencies or instrumentalities; (e) deal with
the Trustees of the Trust or the Portfolio, the Investment Adviser or the
Principal Underwriter as principals in making security purchases or sales.
Neither the Trustees nor the Investment Adviser nor any officer or trustee of
the Investment Adviser may make any profit on any transactions for the Fund or
the Portfolio; or (f) invest in interests in oil, gas or other mineral
exploration or development programs (which shall not, however, prevent
investment in securities of companies engaged in such activities).
In order to permit the sale of shares of the Fund in certain states, the
Fund may make commitments more restrictive than the policies described above.
Should the Fund determine that any such commitment is no longer in the best
interests of the Fund and its shareholders, it will revoke the commitment by
terminating sales of its shares in the state(s) involved.
OTHER INVESTMENT FEATURES
LENDING OF PORTFOLIO SECURITIES
The Portfolio may seek to increase its income by lending portfolio
securities. Under present regulatory policies, including those of the Board of
Governors of the Federal Reserve System and the Securities and Exchange
Commission, such loans may be made to member firms of the New York Stock
Exchange, and would be required to be secured continuously by collateral in cash
or cash equivalents maintained on a current basis at an amount at least equal to
the market value of the securities loaned. The Portfolio would have the right to
call a loan and obtain the securities loaned at any time on five days' notice.
During the existence of a loan, the Portfolio would continue to receive the
equivalent of the interest or dividends paid by the issuer on the securities
loaned and would also receive the interest on investment of the collateral. The
Portfolio would not, however, have the right to vote any securities having
voting rights during the existence of the loan, but would call the loan in
anticipation of an important vote to be taken among holders of the securities or
of the giving or withholding of their consent on a material matter affecting the
investment. As with other extensions of credit there are risks of delay in
recovery or even loss of rights in the collateral should the borrower of the
securities fail financially. However, the loans would be made only to firms
deemed by the Investment Adviser to be of good standing, and when, in its
judgment, the consideration which can be earned currently from securities loans
of this type justifies the attendant risk.
If the Investment Adviser determines to make securities loans, it is not
intended that the value of the securities loaned would exceed 30% of the
Portfolio's total assets. As of the present time, the Trustees of the Portfolio
have not made a determination to engage in this activity, and have no present
intention of making such a determination during the current fiscal year.
WRITING OF COVERED CALL OPTIONS
The Portfolio may engage in the writing of call option contracts on
securities which are owned by the Portfolio ("covered call options") when, in
the opinion of the Trustees of the Portfolio, such activity is advisable and
appropriate.
A call option written by the Portfolio obligates the Portfolio to sell
specified securities to the holder of the option at a specified price at any
time before the expiration date. The Portfolio will write a covered call option
on a security for the purpose of increasing its return on such security and/or
to partially hedge against a decline in the value of the security. In
particular, when the Portfolio writes an option which expires unexercised or is
closed out by the Portfolio at a profit, it will retain the premium paid for the
option, which will increase its gross income and will offset in part the reduced
value of the portfolio security underlying the option, or the increased cost of
acquiring the security for its portfolio. However, if the price of the
underlying security moves adversely to the Portfolio's position, the option may
be exercised and the Portfolio will be required to sell the underlying security
at a disadvantageous price, which may only be partially offset by the amount of
the premium, if at all. The Portfolio does not intend to write a covered option
on any security if after such transaction more than 25% of its net assets, as
measured by the aggregate value of the securities underlying all covered calls
written by the Portfolio, would be subject to such options.
The Portfolio may terminate its obligations under a call option by
purchasing an option identical to the one it has written. Such purchases are
referred to as "closing purchase transactions."
An options position may be closed out only on an options exchange which
provides a secondary market for an option of the same series. Although the
Portfolio will generally purchase or write only those options for which there
appears to be an active secondary market, there is no assurance that a liquid
secondary market on an exchange will exist for any particular option, or at any
particular time. For some options no secondary market on an exchange may exist.
In such event, it might not be possible to effect closing transactions in
particular options, with the result that the Portfolio would have to exercise
its options in order to realize any profit and would incur transaction costs
upon the sale of underlying securities pursuant to the exercise of put options.
If the Portfolio as a covered call option writer is unable to effect a closing
purchase transaction in a secondary market, it will not be able to sell the
underlying security until the option expires or it delivers the underlying
security upon exercise.
Reasons for the absence of a liquid secondary market on an exchange include
the following: (i) there may be insufficient trading interest in certain
options; (ii) restrictions may be imposed by an exchange on opening transactions
or closing transactions or both; (iii) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or series of
options or underlying securities; (iv) unusual or unforeseen circumstances may
interrupt normal operations on an exchange; (v) the facilities of an exchange or
the Options Clearing Corporation may not at all times be adequate to handle
current trading volume; or (vi) one or more exchanges could, for economic or
other reasons, decide or be compelled at some future date to discontinue the
trading of options (or a particular class or series of options), in which event
the secondary market on that exchange (or in that class or series of options)
would cease to exist, although outstanding options on that exchange that had
been issued by the Options Clearing Corporation as a result of trades on that
exchange would continue to be exercisable in accordance with their terms.
The Portfolio will pay brokerage commissions in connection with writing
options and effecting closing purchase transactions, as well as for sales of
underlying securities. The writing of options could result in significant
increases in the Portfolio's portfolio turnover rate, especially during periods
when market prices of the underlying securities appreciate.
There is no assurance that higher than anticipated trading activity or other
unforeseen events might not, at times, render certain of the facilities of the
Options Clearing Corporation inadequate, and thereby result in the institution
by an exchange of special procedures which may interfere with the timely
execution of customers' orders.
The amount of the premiums which the Portfolio may pay or receive may be
adversely affected as new or existing institutions, including other investment
companies, engage in or increase their option purchasing and writing activities.
TRUSTEES AND OFFICERS
The Trustees and officers of the Trust and the Portfolio are listed below.
Except as indicated, each individual has held the office shown or other offices
in the same company for the last five years. Unless otherwise noted, the
business address of each Trustee and officer is 24 Federal Street, Boston,
Massachusetts 02110, which is also the address of the Portfolio's investment
adviser, Boston Management and Research ("BMR" or the "Investment Adviser"), a
wholly-owned subsidiary of Eaton Vance Management ("Eaton Vance"); of Eaton
Vance's parent, Eaton Vance Corp. ("EVC"); and of BMR's and Eaton Vance's
trustee, Eaton Vance, Inc. ("EV"). Eaton Vance and EV are both wholly-owned
subsidiaries of EVC. Those Trustees and officers who are "interested persons" of
the Trust, the Portfolio, BMR, Eaton Vance, EVC or EV as defined in the 1940 Act
by virtue of their affiliation with any one or more of the Trust, the Portfolio,
BMR, Eaton Vance, EVC or EV, are indicated by an asterisk (*).
TRUSTEES OF THE TRUST AND THE PORTFOLIO
JAMES B. HAWKES (53), President and Trustee*
Executive Vice President of BMR, Eaton Vance, EVC and EV, and a Director of EVC
and EV. Director or Trustee and officer of various investment companies
managed by Eaton Vance or BMR.
PETER F. KIELY (58), Vice President and Trustee*
Vice President of BMR, Eaton Vance and EV. Director or Trustee and officer of
various investment companies managed by Eaton Vance or BMR. Mr. Kiely was
elected Trustee of the Trust on December 16, 1991.
DONALD R. DWIGHT (64), Trustee
President of Dwight Partners, Inc. (a corporate relations and communications
company) founded in 1988; Chairman of the Board of Newspapers of New England,
Inc. since 1983. Director or Trustee of various investment companies managed
by Eaton Vance or BMR.
Address: Clover Mill Lane, Lyme, New Hampshire 03768
SAMUEL L. HAYES, III (60), Trustee
Jacob J. Schiff Professor of Investment Banking, Harvard University Graduate
School of Business Administration. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: Harvard University Graduate School of Business Administration,
Soldiers Field Road, Boston, Massachusetts 02134
NORTON H. REAMER (59), Trustee
President and Director, United Asset Management Corporation (a holding company
owning institutional investment management firms); Chairman, President and
Director, The Regis Fund, Inc. (mutual fund). Director or Trustee of various
investment companies managed by Eaton Vance or BMR.
Address: One International Place, Boston, Massachusetts 02110
JOHN L. THORNDIKE (68), Trustee Director of Fiduciary Company Incorporated.
Director or Trustee of various investment companies managed by Eaton Vance or
BMR.
Address: 175 Federal Street, Boston, Massachusetts 02110
JACK L. TREYNOR (65), Trustee
Investment Adviser and Consultant. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: 504 Via Almar, Palos Verdes Estates, California 90274
OFFICERS OF THE TRUST AND THE PORTFOLIO
A. WALKER MARTIN (49), Vice President*
Vice President of BMR, Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR. Mr. Martin was elected a Vice
President of the Trust on October 15, 1990.
JAMES L. O'CONNOR (49), Treasurer*
Vice President of BMR, Eaton Vance, and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
WILLIAM J. AUSTIN, JR. (43), Assistant Treasurer*
Assistant Vice President of BMR, Eaton Vance and EV. Officer of various
investment companies managed by Eaton Vance or BMR. Mr. Austin was elected
Assistant Treasurer of the Trust on December 16, 1991.
THOMAS OTIS (63), Secretary*
Vice President and Secretary of BMR, Eaton Vance, EVC and EV. Officer of various
investment companies managed by Eaton Vance or BMR.
JANET E. SANDERS (59), Assistant Treasurer and Assistant Secretary*
Vice President of BMR, Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
Messrs. Thorndike (Chairman), Hayes and Reamer are members of the Special
Committee of the Board of Trustees of the Trust and of the Portfolio. The
Special Committee's functions include a continuous review of the Trust's
contractual relationship with the Administrator, the Portfolio's contractual
relationship with the Investment Adviser, making recommendations to the Trustees
regarding the compensation of those Trustees who are not members of the Eaton
Vance organization, and making recommendations to the Trustees regarding
candidates to fill vacancies, as and when they occur, in the ranks of those
Trustees who are not "interested persons" of the Trust, the Portfolio, or the
Eaton Vance organization.
Messrs. Treynor (Chairman) and Dwight are members of the Audit Committee of
the Board of Trustees of the Trust and of the Portfolio. The Audit Committee's
functions include making recommendations to the Trustees regarding the selection
of the independent accountants, and reviewing with such accountants and the
Treasurer of the Trust and of the Portfolio matters relative to accounting and
auditing practices and procedures, accounting records, internal accounting
controls, and the functions performed by the custodian and transfer agent of the
Trust and of the Portfolio.
Trustees of the Portfolio who 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 a Trustees Deferred Compensation Plan (the "Plan").
Under the Plan, an eligible Trustee may elect to have his deferred fees invested
by the Portfolio in the shares of one or more funds in the Eaton Vance Family of
Funds, and the amount paid to the Trustees under the Plan will be determined
based upon the performance of such investments. Deferral of Trustees' fees in
accordance with the Plan will have a negligible effect on the Portfolio's
assets, liabilities, and net income per share, and will not obligate the
Portfolio to retain the services of any Trustee or obligate the Portfolio to pay
any particular level of compensation to the Trustee.
The fees and expenses of those Trustees of the Trust and the Portfolio who
are not members of the Eaton Vance organization are paid by the Fund (and the
other series of the Trust) and the Portfolio, respectively. For the compensation
earned by the Trustees of the Trust and the Portfolio, see "Fees and Expenses"
in Part II of this Statement of Additional Information.
INVESTMENT ADVISER AND ADMINISTRATOR
The Portfolio engages BMR as its investment adviser pursuant to an
Investment Advisory Agreement dated August 1, 1994. BMR or Eaton Vance acts as
investment adviser to investment companies and various individual and
institutional clients with combined assets under management of approximately $15
billion.
Eaton Vance, its affiliates and its predecessor companies have been managing
assets of individuals and institutions since 1924 and managing investment
companies since 1931. They maintain a large staff of experienced fixed-income
and equity investment professionals to service the needs of its clients. The
fixed-income division focuses on all kinds of taxable investment- grade and
high-yield securities, tax-exempt investment-grade and high-yield securities,
and U.S. Government securities. The equity division covers stocks ranging from
blue chip to emerging growth companies.
BMR manages the investments and affairs of the Portfolio subject to the
supervision of the Portfolio's Board of Trustees. BMR furnishes to the Portfolio
investment research, advice and supervision, furnishes an investment program and
determines what securities will be purchased, held or sold by the Portfolio and
what portion, if any, of the Portfolio's assets will be held uninvested. The
Investment Advisory Agreement requires BMR to pay the salaries and fees of all
officers and Trustees of the Portfolio who are members of the BMR organization
and all personnel of BMR performing services relating to research and investment
activities. The Portfolio is responsible for all expenses not expressly stated
to be payable by BMR under the Investment Advisory Agreement, including, without
implied limitation, (i) expenses of maintaining the Portfolio and continuing its
existence, (ii) registration of the Portfolio under the 1940 Act, (iii)
commissions, fees and other expenses connected with the acquisition, holding and
disposition of securities and other investments, (iv) auditing, accounting and
legal expenses, (v) taxes and interest, (vi) governmental fees, (vii) expenses
of issue, sale and redemption of interests in the Portfolio, (viii) expenses of
registering and qualifying the Portfolio and interests in the Portfolio under
Federal and state securities laws and of preparing and printing registration
statements or other offering statements or memoranda for such purposes and for
distributing the same to investors, and fees and expenses of registering and
maintaining registrations of the Portfolio and of the Portfolio's placement
agent as broker-dealer or agent under state securities laws, (ix) expenses of
reports and notices to investors and of meetings of investors and proxy
solicitations therefor, (x) expenses of reports to governmental officers and
commissions, (xi) insurance expenses, (xii) association membership dues, (xiii)
fees, expenses and disbursements of custodians and subcustodians for all
services to the Portfolio (including without limitation safekeeping of funds,
securities and other investments, keeping of books, accounts and records, and
determination of net asset values, book capital account balances and tax capital
account balances), (xiv) fees, expenses and disbursements of transfer agents,
dividend disbursing agents, investor servicing agents and registrars for all
services to the Portfolio, (xv) expenses for servicing the accounts of
investors, (xvi) any direct charges to investors approved by the Trustees of the
Portfolio, (xvii) compensation and expenses of Trustees of the Portfolio who are
not members of BMR's organization, and (xviii) such non-recurring items as may
arise, including expenses incurred in connection with litigation, proceedings
and claims and the obligation of the Portfolio to indemnify its Trustees,
officers and investors with respect thereto.
Under the Investment Advisory Agreement with the Portfolio, BMR receives a
monthly advisory fee of 5/96 of 1% (equivalent to 0.625% annually) of the
average daily net assets of the Portfolio. As at December 31, 1994, the
Portfolio had net assets of $85,519,035. For the period from the start of
business, August 1, 1994, to December 31, 1994, BMR received advisory fees of
$230,928 (equivalent to 0.625% (annualized) of the Portfolio's average daily net
assets for such period).
The Investment Advisory Agreement with BMR remains in effect until February
28, 1996. It may be continued indefinitely thereafter so long as such
continuance after February 28, 1996 is approved at least annually (i) by the
vote of a majority of the Trustees of the Portfolio who are not interested
persons of the Portfolio or of BMR cast in person at a meeting specifically
called for the purpose of voting on such approval and (ii) by the Board of
Trustees of the Portfolio or by vote of a majority of the outstanding voting
securities of the Portfolio. The Agreement may be terminated at any time without
penalty on sixty days' written notice by the Board of Trustees of either party
or by vote of the majority of the outstanding voting securities of the
Portfolio, and the Agreement will terminate automatically in the event of its
assignment. The Agreement provides that BMR may render services to others and
may permit other fund clients and other corporations and organizations to use
the words "Eaton Vance" or "Boston Management and Research" in their names. The
Agreement also provides that BMR shall not be liable for any loss incurred in
connection with the performance of its duties, or action taken or omitted under
that Agreement, in the absence of willful misfeasance, bad faith, gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties thereunder, or for any losses sustained
in the acquisition, holding or disposition of any security or other investment.
As indicated in the Prospectus, Eaton Vance serves as Administrator of the
Fund, but receives no compensation for providing administrative services to the
Fund. Under its agreement with the Fund, Eaton Vance has been engaged to
administer the Fund's affairs, subject to the supervision of the Trustees of the
Trust, and shall furnish for the use of the Fund office space and all necessary
office facilities, equipment and personnel for administering the affairs of the
Fund.
The Fund pays all of its own expenses including, without limitation, (i)
expenses of maintaining the Fund and continuing its existence, (ii) registration
of the Trust under the 1940 Act, (iii) commissions, fees and other expenses
connected with the purchase or sale of securities and other investments, (iv)
auditing, accounting and legal expenses, (v) taxes and interest, (vi)
governmental fees, (vii) expenses of issue, sale, repurchase and redemption of
shares, (viii) expenses of registering and qualifying the Fund and its shares
under federal and state securities laws and of preparing and printing
prospectuses for such purposes and for distributing the same to shareholders and
investors, and fees and expenses of registering and maintaining registrations of
the Fund and of the Fund's principal underwriter, if any, as broker-dealer or
agent under state securities laws, (ix) expenses of reports and notices to
shareholders and of meetings of shareholders and proxy solicitations therefor,
(x) expenses of reports to governmental officers and commissions, (xi) insurance
expenses, (xii) association membership dues, (xiii) fees, expenses and
disbursements of custodians and subcustodians for all services to the Fund
(including without limitation safekeeping of funds, securities and other
investments, keeping of books and accounts and determination of net asset
values), (xiv) fees, expenses and disbursements of transfer agents, dividend
disbursing agents, shareholder servicing agents and registrars for all services
to the Fund, (xv) expenses for servicing shareholder accounts, (xvi) any direct
charges to shareholders approved by the Trustees of the Trust, (xvii)
compensation and expenses of Trustees of the Trust who are not members of the
Eaton Vance organization, and (xviii) such non-recurring items as may arise,
including expenses incurred in connection with litigation, proceedings and
claims and the obligation of the Trust to indemnify its Trustees and officers
with respect thereto.
A commitment has been made to a state securities authority that Eaton Vance
will take certain actions, if necessary, so that the Fund's expenses will not
exceed expense limitation requirements of such state. The commitment may be
amended or rescinded by Eaton Vance in response to changes in the requirements
of the state or for other reasons.
BMR is a wholly-owned subsidiary of Eaton Vance. Eaton Vance and EV are both
wholly-owned subsidiaries of EVC. BMR and Eaton Vance are both Massachusetts
business trusts, and EV is the trustee of BMR and Eaton Vance. The Directors of
EV are Landon T. Clay, H. Day Brigham, Jr., M. Dozier Gardner, James B. Hawkes
and Benjamin A. Rowland, Jr. The Directors of EVC consist of the same persons
and John G. L. Cabot and Ralph Z. Sorenson. Mr. Clay is chairman, and Mr.
Gardner is president and chief executive officer, of EVC, BMR, Eaton Vance and
EV. All of the issued and outstanding shares of Eaton Vance and of EV are owned
by EVC. All of the issued and outstanding shares of BMR are owned by Eaton
Vance. All shares of the outstanding Voting Common Stock of EVC are deposited in
a Voting Trust, which expires December 31, 1996, the Voting Trustees of which
are Messrs. Brigham, Clay, Gardner, Hawkes and Rowland. The Voting Trustees have
unrestricted voting rights for the election of Directors of EVC. All of the
outstanding voting trust receipts issued under said Voting Trust are owned by
certain of the officers of BMR and Eaton Vance who are also officers or
Directors of EVC and EV. As of February 28, 1995, Messrs. Clay, Gardner and
Hawkes each owned 24% of such voting trust receipts, and Messrs. Rowland and
Brigham owned 15% and 13%, respectively, of such voting trust receipts. Messrs.
Hawkes and Otis, who are officers or Trustees of the Trust and the Portfolio,
are members of the EVC, Eaton Vance, BMR and EV organizations. Messrs. Austin,
Kiely, Martin and O'Connor and Ms. Sanders are officers or Trustees of the Trust
and the Portfolio and all are also members of the BMR, Eaton Vance and EV
organizations. BMR will receive the fees paid under the Investment Advisory
Agreement.
Eaton Vance owns all of the stock of Energex Corporation, which is engaged
in oil and gas operations. EVC owns all of the stock of Marblehead Energy
Corp. (which is engaged in oil and gas operations) and 77.3% of the stock of
Investors Bank & Trust Company, custodian of the Fund and the Portfolio, which
provides custodial, trustee and other fiduciary services to investors,
including individuals, employee benefit plans, corporations, investment
companies, savings banks and other institutions. In addition, Eaton Vance owns
all of the stock of Northeast Properties, Inc., which is engaged in real
estate investment, consulting and management. EVC owns all of the stock of
Fulcrum Management, Inc. and MinVen, Inc., which are engaged in the
development of precious metal properties. EVC, BMR, Eaton Vance and EV may
also enter into other businesses.
EVC and its affiliates and its officers and employees from time to time have
transactions with various banks, including the custodian of the Fund and the
Portfolio, Investors Bank & Trust Company. It is Eaton Vance's opinion that the
terms and conditions of such transactions were not and will not be influenced by
existing or potential custodial or other relationships between the Fund and the
Portfolio and such banks.
CUSTODIAN
Investors Bank & Trust Company ("IBT"), 24 Federal Street, Boston,
Massachusetts, (a 77.3% owned subsidiary of EVC) acts as custodian for the Fund
and the Portfolio. IBT has the custody of all cash and securities representing
the Fund's interest in the Portfolio, has custody of all the Portfolio's assets,
maintains the general ledger of the Portfolio and the Fund, and computes the
daily net asset value of interests in the Portfolio and the net asset value of
shares of the Fund. In such capacity it attends to details in connection with
the sale, exchange, substitution, transfer or other dealings with the
Portfolio's investments, receives and disburses all funds, and performs various
other ministerial duties upon receipt of proper instructions from the Fund and
the Portfolio. IBT charges fees which are competitive within the industry. A
portion of the fee relates to custody, bookkeeping and valuation services and is
based upon a percentage of Fund and Portfolio net assets and a portion of the
fee relates to activity charges, primarily the number of portfolio transactions.
These fees are then reduced by a credit for cash balances of the particular
investment company at the custodian equal to 75% of the 91-day, U.S. Treasury
Bill auction rate applied to the particular investment company's average daily
collected balances for the week. In view of the ownership of EVC in IBT, the
Portfolio is treated as a self-custodian pursuant to Rule 17f-2 under the 1940
Act, and the Portfolio's investments held by IBT as custodian are thus subject
to additional examinations by the Portfolio's independent auditors as called for
by such Rule. For the period from the start of business, August 1, 1994, to
December 31, 1994, the Portfolio paid IBT $28,656. For the custody fees that the
Fund paid to IBT, see "Fees and Expenses" in Part II of this Statement of
Additional Information.
SERVICE FOR WITHDRAWAL
By a standard agreement, the Trust's Transfer Agent will send to the
shareholder regular monthly or quarterly payments of any permitted amount
designated by the shareholder (see "Eaton Vance Shareholder Services --
Withdrawal Plan" in the Fund's prospectus) based upon the value of the shares
held. The checks will be drawn from share redemptions and hence are a return of
principal. Income dividends and capital gain distributions in connection with
withdrawal accounts will be credited at net asset value as of the date for each
distribution. Continued withdrawals in excess of current income will eventually
use up principal, particularly in a period of declining market prices.
To use this service, at least $5,000 in cash or shares at the public
offering price will have to be deposited with the Transfer Agent. The
maintenance of a withdrawal plan concurrently with purchases of additional Fund
shares would be disadvantageous if a sales charge is included in such purchases.
A shareholder may not have a withdrawal plan in effect at the same time he or
she has authorized Bank Automated Investing or is otherwise making regular
purchases of Fund shares. Either the shareholder, the Transfer Agent or the
Principal Underwriter will be able to terminate the withdrawal plan at any time
without penalty.
DETERMINATION OF NET ASSET VALUE
The net asset value of the Portfolio and of shares of the Fund is determined
by the custodian, IBT, (as agent for the Fund and the Portfolio) in the manner
described under "Valuing Fund Shares" in the Fund's current Prospectus. The Fund
and the Portfolio will be closed for business and will not price their
respective shares or interests on the following business holidays: New Year's
Day, Presidents' Day, Good Friday (a New York Stock Exchange holiday), Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
Each investor in the Portfolio, including the Fund, may add to or reduce its
investment in the Portfolio on each day the New York Stock Exchange (the
"Exchange") is open for trading ("Portfolio Business Day") as of the close of
regular trading on the Exchange (the "Portfolio Valuation Time"). The value of
each investor's interest in the Portfolio will be determined by multiplying the
net asset value of the Portfolio by the percentage, determined on the prior
Portfolio Business Day, which represented that investor's share of the aggregate
interests in the Portfolio on such prior day. Any additions or withdrawals for
the current Portfolio Business Day will then be recorded. Each investor's
percentage of the aggregate interest in the Portfolio will then be recomputed as
a percentage equal to a fraction (i) the numerator of which is the value of such
investor's investment in the Portfolio as of the Portfolio Valuation Time on the
prior Portfolio Business Day plus or minus, as the case may be, the amount of
any additions to or withdrawals from the investor's investment in the Portfolio
on the current Portfolio Business Day and (ii) the denominator of which is the
aggregate net asset value of the Portfolio as of the Portfolio Valuation Time on
the prior Portfolio Business Day plus or minus, as the case may be, the amount
of the net additions to or withdrawals from the aggregate investment in the
Portfolio on the current Portfolio Business Day by all investors in the
Portfolio. The percentage so determined will then be applied to determine the
value of the investor's interest in the Portfolio for the current Portfolio
Business Day.
INVESTMENT PERFORMANCE
The average annual total return is determined by multiplying a hypothetical
initial purchase order of $1,000 by the average annual compound rate of return
(including capital appreciation/depreciation, and dividends and distributions
paid and reinvested) for the stated period and annualizing the result. The
calculation assumes that all dividends from net investment income and capital
gain distributions are reinvested at net asset value on the reinvestment dates
during the period (and either (i) the deduction of the maximum sales charge from
the initial $1,000 purchase order, or (ii) a complete redemption of the
investment and, if applicable, the deduction of any contingent deferred sales
charge at the end of the period). For information concerning the total return of
the Fund, see "Performance Information" in Part II of this Statement of
Additional Information.
The Fund's total return may be compared to the Consumer Price Index and
various domestic securities indices, for example: Standard & Poor's 400 Stock
Index, Standard & Poor's 500 Stock Index, Merrill Lynch U.S. Treasury (15-year
plus) Index, Lehman Brothers Government/Corporate Bond Index, and the Dow Jones
Industrial Average. The Fund's total return and comparisons with these indices
may be used in advertisements and in information furnished to present or
prospective shareholders.
Information used in advertisements and in materials furnished to present or
prospective shareholders may include statistics, data and performance studies
prepared by independent organizations, (e.g., Ibbotson Associates, Standard &
Poor's Ratings Group, Merrill Lynch, Pierce, Fenner & Smith, Inc., Bloomberg,
L.P., Dow Jones & Company, Inc., and The Federal Reserve Board) or included in
various publications (e.g., The Wall Street Journal, Barron's and The Decade:
Wealth of Investments in U.S. Stocks, Bonds, Bills & Inflation) reflecting the
investment performance or returns achieved by various classes and types of
investments (e.g., common stocks, small company stocks, long-term corporate
bonds, long-term government bonds, intermediate-term government bonds, U.S.
Treasury bills) over various periods of time. This information may be used to
illustrate the benefits of long-term investments in common stocks.
From time to time, information about the portfolio allocation and holdings
of the Portfolio may be included in advertisements and other material furnished
to present and prospective shareholders.
The Portfolio's asset allocation on January 31, 1995 was as follows:
PERCENT OF NET ASSETS
---------------------
Equities 80.0%
Convertible preferred stocks 7.9%
Fixed income 7.5%
Cash equivalents 4.6%
------
Total 100.0%
The Portfolio's ten largest common stock holdings on January 31, 1995 were:
COMPANY PERCENT OF NET ASSETS
------- ---------------------
Exxon Corp. 3.0
Harcourt General, Inc. 2.8
Great Western Financial 2.5
Reuters Holdings, PLC 2.5
Penney (J.C.) Co. Inc. 2.5
Texas Instruments, Inc. 2.4
MGIC Investment Corp. Wisc. 2.3
Loctite Corp. 2.1
Intel Corp. 2.1
---
Total 25.7%
From time to time, evaluations of the Fund's performance made by independent
sources (e.g., Lipper Analytical Services, Inc., CDA/Wiesenberger and
Morningstar, Inc.) may be used in advertisements and in information furnished to
present or prospective shareholders. See "Performance Information" in Part II of
this Statement of Additional Information.
Information used in advertisements and in materials furnished to present and
prospective shareholders may include statements or illustrations relating to the
appropriateness of types of securities and/or mutual funds which may be employed
to meet specific financial goals, such as (1) funding retirement, (2) paying for
children's education, and (3) financially supporting aging parents. These three
financial goals may be referred to in such advertisements or materials as the
"Triple Squeeze."
TAXES
See "Distributions and Taxes" in the Fund's current Prospectus and
"Additional Tax Matters" in Part II of this Statement of Additional Information.
Each series of the Trust is treated as a separate entity for Federal income
tax purposes. The Fund will elect to be treated and intends to qualify each year
as a regulated investment company ("RIC") under the Internal Revenue Code (the
"Code"). Accordingly, the Fund intends to satisfy certain requirements relating
to sources of its income and diversification of its assets and to distribute its
net investment income and net realized capital gains in accordance with the
timing requirements imposed by the Code, so as to avoid any Federal income or
excise tax to the Fund. Because the Fund invests its assets in the Portfolio,
the Portfolio normally must satisfy the applicable source of income and
diversification requirements in order for the Fund to satisfy them. The
Portfolio will allocate at least annually among its investors, including the
Fund, the Portfolio's net investment income, net realized capital gains, and any
other items of income, gain, loss, deduction or credit. The Portfolio will make
allocations to the Fund in accordance with the Code and applicable regulations
and will make moneys available for withdrawal at appropriate times and in
sufficient amounts to enable the Fund to satisfy the tax distribution
requirements that apply to the Fund and that must be satisfied in order to avoid
Federal income and/or excise tax on the Fund. For purposes of applying the
requirements of the Code regarding qualification as a RIC, the Fund will be
deemed (i) to own its proportionate share of each of the assets of the Portfolio
and (ii) to be entitled to the gross income of the Portfolio attributable to
such share.
In order to avoid Federal excise tax, the Code requires that the Fund
distribute by December 31 of each calendar year at least 98% of its ordinary
income (not including tax-exempt income) for such year, and at least 98% of the
excess of its realized capital gains over its realized capital losses, after
reduction by any available capital loss carryforwards, and 100% of any income
from the prior year (as previously computed) that was not paid out during such
year and on which the Fund paid no Federal income tax. Further, under current
law, provided that the Fund qualifies as a RIC for Federal income tax purposes
and the Portfolio is treated as a partnership for Massachusetts and Federal tax
purposes, neither the Fund nor the Portfolio is liable for any income, corporate
excise or franchise tax in the Commonwealth of Massachusetts.
The Portfolio's transactions in options will be subject to special tax rules
that may affect the amount, timing and character of distributions. For example,
certain positions held by the Portfolio that substantially diminish the
Portfolio's risk of loss with respect to other positions in its portfolio may
constitute "straddles," which are subject to tax rules that may cause deferral
of Portfolio losses, adjustments in the holding period of portfolio securities
and conversion of short-term into long-term capital losses.
Income from transactions in options derived by the Portfolio with respect to
its business of investing in securities will qualify as permissible income for
its investors that are RICs under the requirement that at least 90% of a RIC's
gross income each taxable year consists of specified types of income. However,
income from the Portfolio's disposition of options held for less than three
months will be subject to the requirement applicable to those investors that
less than 30% of a RIC's gross income each taxable year consist of certain
short-term gains ("Short-Short Limitation").
If the Portfolio satisfies certain requirements, any increase in value of a
position that is part of a "designated hedge" will be offset by any decrease in
value (whether realized or not) of the offsetting hedging position during the
period of the hedge for purposes of determining whether the Portfolio's
investors that are RICs satisfy the Short-Short Limitation. Thus, only the net
gain (if any) from the designated hedge will be included in gross income for
purposes of that limitation. The Portfolio will consider whether it should seek
to qualify for this treatment for its hedging transactions. To the extent the
Portfolio does not so qualify, it may be forced to defer the closing out of
options beyond the time when it otherwise would be advantageous to do so, in
order for its investors that are RICs to continue to qualify as such.
Distributions of net investment income and the excess of net short-term
capital gains over net long-term capital losses earned by the Portfolio and
allocated to the Fund are taxable to shareholders of the Fund as ordinary income
whether received in cash or in additional shares. Distributions of the excess of
net long-term capital gains over net short-term capital losses (including any
capital losses carried forward from prior years) earned by the Portfolio and
allocated to the Fund by the Portfolio are taxable to shareholders of the Fund
as long-term capital gains, whether received in cash or in additional shares and
regardless of the length of time their shares of the Fund have been held.
Certain distributions declared in October, November or December and paid the
following January will be paid to shareholders as if received on December 31 in
the year in which they are declared.
A portion of distributions made by the Fund which are derived from dividends
received by the Portfolio from domestic corporations and allocated to the Fund
may qualify for the dividends-received deduction for corporations. The
dividends-received deduction for corporate shareholders is reduced to the extent
the shares of the Fund with respect to which the dividends are received are
treated as debt-financed under the Federal income tax law and is eliminated if
the shares are deemed to have been held for less than 46 days. Receipt of
certain distributions qualifying for the deduction may result in reduction of
tax basis of the corporate shareholder's shares. Distributions eligible for the
dividends-received deduction may give rise to or increase an alternative minimum
tax for corporations.
Any loss realized upon the redemption or exchange of shares of the Fund with
a tax holding period of 6 months or less will be treated as a long-term capital
loss to the extent of any distribution of net long-term capital gains with
respect to such shares. In addition, a loss realized on a redemption of Fund
shares may be disallowed under certain "wash sale" rules if other shares of the
Fund are acquired within a period beginning 30 days before and ending 30 days
after the date of such redemption. Any disallowed loss will result in an
adjustment to the shareholder's tax basis in some or all of the other shares
acquired.
The Portfolio may be subject to foreign withholding taxes with respect to
income on certain foreign securities. These taxes may be reduced or eliminated
under the terms of an applicable U.S. income tax treaty. As it is not expected
that more than 50% of the value of the total assets of the Fund, taking into
account its allocable share of the Portfolio's total assets, at the close of any
taxable year of the Fund will consist of securities issued by foreign
corporations, the Fund will not be eligible to pass through to shareholders
their proportionate share of any foreign taxes paid by the Portfolio and
allocated to the Fund, with the result that shareholders of the Fund will not be
entitled to foreign tax credits or deductions for foreign taxes paid by the
Portfolio and allocated to the Fund. Certain foreign exchange gains and lossed
realized by the Portfolio and allocated to the Fund will be treated as ordinary
income and losses. Certain uses of foreign currency and investments by the
Portfolio in certain "passive foreign investment companies" may be limited or a
tax election may be made, if available, in order to preserve the Fund's
qualification as a RIC and/or avoid imposition of a tax on the Fund.
Special tax rules apply to Individual Retirement Accounts ("IRAs") and other
retirement plans and persons investing through such plans should consult their
tax advisers for more information. The deductibility of such contributions may
be restricted or eliminated for particular shareholders.
Amounts paid by the Fund to individuals and certain other shareholders who
have not provided the Fund with their correct taxpayer identification number and
certain required certifications, as well as shareholders with respect to whom
the Fund has received notification from the Internal Revenue Service or a
broker, may be subject to "backup" withholding of Federal income tax from the
Fund's dividends and distributions and the proceeds of redemptions (including
repurchases and exchanges) at a rate of 31%. An individual's taxpayer
identification number is generally his or her social security number.
Non-resident alien individuals and certain foreign corporations and other
foreign entities generally will be subject to a U.S. withholding tax at a rate
of 30% on the Fund's distributions from its ordinary income and the excess of
its net short-term capital gain over its net long-term capital loss, unless the
tax is reduced or eliminated by an applicable tax treaty. Distributions from the
excess of the Fund's net long-term capital gain over its net short-term capital
loss received by such shareholders and any gain from the sale or other
disposition of shares of the Fund generally will not be subject to U.S. Federal
income taxation, provided that non-resident alien status has been certified by
the shareholder. Different U.S. tax consequences may result if the shareholder
is engaged in a trade or business in the United States, is present in the United
States for a sufficient period of time during a taxable year to be treated as a
U.S. resident, or fails to provide any required certifications regarding status
as a non-resident alien investor. Foreign shareholders should consult their tax
advisers regarding the U.S. and foreign tax consequences of an investment in the
Fund.
The foregoing discussion does not address the special tax rules applicable
to certain classes of investors, such as retirement plans, tax-exempt entities,
insurance companies and financial institutions. Shareholders should consult
their own tax advisers with respect to special tax rules that may apply in their
particular situations, as well as the state, local or foreign tax consequences
of investing in the Fund.
PORTFOLIO SECURITY TRANSACTIONS
Decisions concerning the execution of portfolio security transactions of the
Portfolio, including the selection of the market and the broker-dealer firm, are
made by BMR. BMR is also responsible for the execution of transactions for all
other accounts managed by it.
BMR places the security transactions of the Portfolio and of all other
accounts managed by it for execution with many broker-dealer firms. BMR uses its
best efforts to obtain execution of portfolio transactions at prices which are
advantageous to the Portfolio and (when a disclosed commission is being charged)
at reasonably competitive commission rates. In seeking such execution, BMR will
use its best judgment in evaluating the terms of a transaction, and will give
consideration to various relevant factors, including without limitation the size
and type of the transaction, the general execution and operational capabilities
of the broker-dealer, the nature and character of the market for the security,
the confidentiality, speed and certainty of effective execution required for the
transaction, the reputation, reliability, experience and financial condition of
the broker-dealer, the value and quality of services rendered by the
broker-dealer in other transactions, and the reasonableness of the commission,
if any. Transactions on United States stock exchanges and other agency
transactions involve the payment by the Portfolio of negotiated brokerage
commissions. Such commissions vary among different broker-dealer firms, and a
particular broker-dealer may charge different commissions according to such
factors as the difficulty and size of the transaction and the volume of business
done with such broker-dealer. Transactions in foreign securities usually involve
the payment of fixed brokerage commissions, which are generally higher than
those in the United States. There is generally no stated commission in the case
of securities traded in the over-the-counter markets, but the price paid or
received by the Portfolio usually includes an undisclosed dealer markup or
markdown. In an underwritten offering the price paid by the Portfolio often
includes a disclosed fixed commission or discount retained by the underwriter or
dealer. Although commissions paid on portfolio security transactions will, in
the judgment of BMR, be reasonable in relation to the value of the services
provided, commissions exceeding those which another firm might charge may be
paid to broker-dealers who were selected to execute transactions on behalf of
the Portfolio and BMR's other clients in part for providing brokerage and
research services to BMR.
As authorized in Section 28(e) of the Securities Exchange Act of 1934, a
broker or dealer who executes a portfolio transaction on behalf of the Portfolio
may receive a commission which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if BMR
determines in good faith that such commission was reasonable in relation to the
value of the brokerage and research services provided. This determination may be
made on the basis of either that particular transaction or on the basis of the
overall responsibilities which BMR and its affiliates have for accounts over
which they exercise investment discretion. In making any such determination, BMR
will not attempt to place a specific dollar value on the brokerage and research
services provided or to determine what portion of the commission should be
related to such services. Brokerage and research services may include advice as
to the value of securities, the advisability of investing in, purchasing, or
selling securities, and the availability of securities or purchasers or sellers
of securities; furnishing analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy and the performance
of accounts; and effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement); and the "Research
Services" referred to in the next paragraph.
It is a common practice in the investment advisory industry for the advisers
of investment companies, institutions and other investors to receive research,
statistical and quotation services, data, information and other services,
products and materials which assist such advisers in the performance of their
investment responsibilities ("Research Services") from broker-dealer firms which
execute portfolio transactions for the clients of such advisers and from third
parties with which these broker-dealers have arrangements. Consistent with this
practice, BMR receives Research Services from many broker-dealer firms with
which BMR places the Portfolio transactions and from third parties with which
these broker-dealers have arrangements. These Research Services include such
matters as general economic and market reviews, industry and company reviews,
evaluations of securities and portfolio strategies and transactions,
recommendations as to the purchase and sale of securities and other portfolio
transactions, financial, industry and trade publications, news and information
services, pricing and quotation equipment and services, and research oriented
computer hardware, software, data bases and services. Any particular Research
Service obtained through a broker-dealer may be used by BMR in connection with
client accounts other than those accounts which pay commissions to such
broker-dealer. Any such Research Service may be broadly useful and of value to
BMR in rendering investment advisory services to all or a significant portion of
its clients, or may be relevant and useful for the management of only one
client's account or of a few clients' accounts, or may be useful for the
management of merely a segment of certain clients' accounts, regardless of
whether any such account or accounts paid commissions to the broker-dealer
through which such Research Service was obtained. The advisory fee paid by the
Portfolio is not reduced because BMR receives such Research Services. BMR
evaluates the nature and quality of the various Research Services obtained
through broker-dealer firms and attempts to allocate sufficient commissions to
such firms to ensure the continued receipt of Research Services which BMR
believes are useful or of value to it in rendering investment advisory services
to its clients.
Subject to the requirement that BMR shall use its best efforts to seek to
execute Portfolio security transactions at advantageous prices and at reasonably
competitive commission rates or spreads, BMR is authorized to consider as a
factor in the selection of any broker-dealer firm with whom Portfolio orders may
be placed the fact that such firm has sold or is selling shares of the Fund or
of other investment companies sponsored by BMR or Eaton Vance. This policy is
not inconsistent with a rule of the National Association of Securities Dealers,
Inc., which rule provides that no firm which is a member of the Association
shall favor or disfavor the distribution of shares of any particular investment
company or group of investment companies on the basis of brokerage commissions
received or expected by such firm from any source.
Securities considered as investments for the Portfolio may also be
appropriate for other investment accounts managed by BMR or its affiliates. BMR
will attempt to allocate equitably portfolio security transactions among the
Portfolio and the portfolios of its other investment accounts whenever decisions
are made to purchase or sell securities by the Portfolio and one or more of such
other accounts simultaneously. In making such allocations, the main factors to
be considered are the respective investment objectives of the Portfolio and such
other accounts, the relative size of portfolio holdings of the same or
comparable securities, the availability of cash for investment by the Portfolio
and such accounts, the size of investment commitments generally held by the
Portfolio and such accounts and the opinions of the persons responsible for
recommending investments to the Portfolio and such accounts. While this
procedure could have a detrimental effect on the price or amount of the
securities available to the Portfolio from time to time, it is the opinion of
the Trustees of the Trust and the Portfolio that the benefits available from the
BMR organization outweigh any disadvantage that may arise from exposure to
simultaneous transactions. For the period from the start of business, August 1,
1994, to December 31, 1994, the Portfolio paid brokerage commissions of $83,750
on portfolio securities transactions. Of the total brokerage commissions paid,
approximately $68,432 was paid in respect of portfolio transactions aggregating
approximately $36,120,800 to firms which provided some research services to BMR
(although many of such firms may have been selected in any particular
transaction primarily because of their execution capabilities).
OTHER INFORMATION
On July 27, 1994, the Trust changed its name from Eaton Vance Stock Fund to
Eaton Vance Securities Trust. The Trust is a Massachusetts business trust
established in 1990 as the successor to Eaton Vance Stock Fund, a Massachusetts
business trust that was established under Massachusetts law by an Indenture of
Trust dated August 26, 1931. The Trust changed its name from Eaton & Howard
Stock Fund on April 18, 1989. Eaton Vance, pursuant to its agreement with the
Trust, controls the use of the words "Eaton Vance" in the Trust's name and may
use the words "Eaton Vance" in other connections and for other purposes.
The Trust's Declaration of Trust may be amended by the Trustees when
authorized by vote of a majority of the outstanding voting securities of the
Trust affected by the amendment. The Trustees may also amend the Declaration of
Trust without the vote or consent of shareholders to change the name of the
Trust or to make such other changes as do not have a materially adverse effect
on the rights or interests of shareholders or if they deem it necessary to
conform the Declaration to the requirements of applicable Federal laws or
regulations. The Trust's by-laws provide that the Fund will indemnify its
Trustees and officers against liabilities and expenses incurred in connection
with any litigation or proceeding in which they may be involved because of their
offices with the Trust. However, no indemnification will be provided to any
Trustee or officer for any liability to the Trust or its shareholders by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.
Under Massachusetts law, if certain conditions prevail, shareholders of a
Massachusetts business trust (such as the Trust) could be deemed to have
personal liability for the obligations of the Trust. Numerous investment
companies registered under the 1940 Act have been formed as Massachusetts
business trusts, and management is not aware of an instance where such liability
has been imposed. The Trust's Declaration of Trust contains an express
disclaimer of liability on the part of the Fund shareholders and the Trust's
By-laws provide that the Trust shall assume the defense on behalf of any Fund
shareholders. Moreover, the Trust's By-laws also provide for indemnification out
of the property of the Fund of any shareholder held personally liable solely by
reason of being or having been a shareholder for all loss or expense arising
from such liability. The assets of the Fund are readily marketable and will
ordinarily substantially exceed its liabilities. In light of the nature of the
Fund's business and the nature of its assets, management believes that the
possibility of the Fund's liability exceeding its assets, and therefore the
shareholder's risk of personal liability, is extremely remote.
As permitted by Massachusetts law, there will normally be no meetings of
shareholders for the purpose of electing Trustees unless and until such time as
less than a majority of the Trustees of the Trust holding office have been
elected by shareholders. In such an event the Trustees then in office will call
a shareholders' meeting for the election of Trustees. Except for the foregoing
circumstances and unless removed by action of the shareholders in accordance
with the Trust's By-laws, the Trustees shall continue to hold office and may
appoint successor Trustees.
The Trust's By-laws provide that no person shall serve as a Trustee if
shareholders holding two-thirds of the outstanding shares have removed him from
that office either by a written declaration filed with the Trust's custodian or
by votes cast at a meeting called for that purpose. The By-laws further provide
that under certain circumstances the shareholders may call a meeting to remove a
Trustee and that the Trust is required to provide assistance in communicating
with shareholders about such a meeting.
In accordance with the Declaration of Trust of the Portfolio, there will
normally be no meetings of the investors for the purpose of electing Trustees
unless and until such time as less than a majority of the Trustees of the
Portfolio holding office have been elected by investors. In such an event the
Trustees then in office will call an investors' meeting for the election of
Trustees. Except for the foregoing circumstances and unless removed by action of
the investors in accordance with the Portfolio's Declaration of Trust, the
Trustees shall continue to hold office and may appoint successor Trustees.
The Declaration of Trust of the Portfolio provides that no person shall
serve as a Trustee if investors holding two-thirds of the outstanding interests
have removed him from that office either by a written declaration filed with the
Portfolio's custodian or by votes cast at a meeting called for that purpose. The
Declaration of Trust further provides that under certain circumstances the
investors may call a meeting to remove a Trustee and that the Portfolio is
required to provide assistance in communicating with investors about such a
meeting.
The right to redeem can be suspended and the payment of the redemption price
deferred when the Exchange is closed (other than for customary weekend and
holiday closings), during periods when trading on the Exchange is restricted as
determined by the Securities and Exchange Commission, or during any emergency as
determined by the Commission which makes it impracticable for the Portfolio to
dispose of its securities or value its assets, or during any other period
permitted by order of the Commission for the protection of investors.
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P., One Post Office Square, Boston, Massachusetts, are
the independent accountants for the Fund and the Portfolio, providing audit
services, tax return preparation, and assistance and consultation with respect
to the preparation of filings with the Securities and Exchange Commission.
For the financial statements of the Fund and the Portfolio see "Financial
Statements" in Part II of this Statement of Additional Information.
STATEMENT OF ADDITIONAL INFORMATION
PART II
This Part II provides information about EV CLASSIC STOCK FUND. The Fund
became a series of the Trust on July 27, 1994.
FEES AND EXPENSES
ADMINISTRATOR
As stated under "Investment Adviser and Administrator" in Part I of this
Statement of Additional Information, the Administrator receives no compensation
for providing administrative services to the Fund. For the period from the start
of business, November 4, 1994, to December 31, 1994, $3,165 of the Fund's
operating expenses were allocated to the Administrator.
DISTRIBUTION PLAN
The Distribution Plan and Distribution Agreement remain in effect until
April 28, 1995 and may be continued as described under "Distribution Plan" in
the Prospectus. Pursuant to Rule 12b-1, the Plan has been approved by the Fund's
initial sole shareholder (Eaton Vance) and by the Board of Trustees of the Trust
as required by Rule 12b-1. For the period from the start of business, November
4, 1994, to December 31, 1994, the Fund accrued sales commission payments under
the Plan aggregating $59, of which $43 was paid to the Principal Underwriter.
The Principal Underwriter paid $9 as sales commissions to Authorized Firms and
the balance was retained by the Principal Underwriter. As at December 31, 1994,
the outstanding uncovered distribution charges of the Principal Underwriter
calculated under the Plan amounted to approximately $8,794 (which amount was
equivalent to 6.04% of the Fund's net assets on such day). For the period from
the start of business, November 4, 1994, to December 31, 1994, the Fund accrued
service fee payments under the Plan aggregating $20, of which $14 was paid to
the Principal Underwriter. The Principal Underwriter paid $3 as service fee
payments to Authorized Firms and the balance was retained by the Principal
Underwriter.
PRINCIPAL UNDERWRITER
For the period from the start of business, November 4, 1994, to December 31,
1994, the Fund paid no repurchase transaction fees to the Principal Underwriter.
CUSTODIAN
For the period from the start of business, November 4, 1994, to December 31,
1994, the Fund paid IBT $250.
<TABLE>
<CAPTION>
TRUSTEES
The fees and expenses of those Trustees of the Trust and of the Portfolio who are not members of the
Eaton Vance organization are paid by the Fund (and the other series of the Trust) and the Portfolio,
respectively. During the fiscal year ended December 31, 1994, the Trustees of the Trust and the Portfolio
earned the following compensation in their capacities as Trustees from the Fund, the Portfolio and the
other funds in the Eaton Vance fund complex<F1>:
AGGREGATE AGGREGATE RETIREMENT TOTAL COMPENSATION
COMPENSATION COMPENSATION BENEFIT ACCRUED FROM TRUST AND
NAME FROM FUND FROM PORTFOLIO FROM FUND COMPLEX FUND COMPLEX
---- ---------------- ---------------- --------------------- ----------------------
<S> <C> <C> <C> <C>
Donald R. Dwight .... $ -- 0 -- $297<F2> $8,750 $135,000
Samuel L. Hayes, III . -- 0 -- 302<F3> 8,864 142,500
Norton H. Reamer ..... -- 0 -- 318 -- 0 -- 135,000
John L. Thorndike .... -- 0 -- 338 -- 0 -- 140,000
Jack L. Treynor ...... -- 0 -- 301 -- 0 -- 140,000
---------
<FN>
<F1>The Eaton Vance fund complex consists of 201 registered investment companies or series thereof.
<F2>Includes $98 of deferred compensation.
<F3>Includes $101 of deferred compensation.
</TABLE>
PRINCIPAL UNDERWRITER
Under the Distribution Agreement the Principal Underwriter acts as principal
in selling shares of the Fund. The expenses of printing copies of prospectuses
used to offer shares to Authorized Firms or investors and other selling
literature and of advertising is borne by the Principal Underwriter. The fees
and expenses of qualifying and registering and maintaining qualifications and
registrations of the Fund and its shares under Federal and state securities laws
is borne by the Fund. In addition, the Fund makes payments to the Principal
Underwriter pursuant to its Distribution Plan as described in the Fund's current
Prospectus; the provisions of the plan relating to such payments are included in
the Distribution Agreement. The Distribution Agreement is renewable annually by
the Trust's Board of Trustees (including a majority of its Trustees who are not
interested persons of the Trust and who have no direct or indirect financial
interest in the operation of the Fund's Distribution Plan or the Distribution
Agreement), may be terminated on sixty days' notice either by such Trustees or
by vote of a majority of the outstanding voting securities of the Fund or on six
months' notice by the Principal Underwriter and is automatically terminated upon
assignment. The Principal Underwriter distributes Fund shares on a "best
efforts" basis under which it is required to take and pay for only such shares
as may be sold.
The Fund has authorized Eaton Vance Distributors, Inc. (the "Principal
Underwriter") to act as its agent in repurchasing shares at the rate of $2.50
for each repurchase transaction handled by the Principal Underwriter. The
Principal Underwriter estimates that the expenses incurred by it in acting as
repurchase agent for the Fund will exceed the amounts paid therefor by the Fund.
DISTRIBUTION PLAN
The Distribution Plan ("the Plan") is described in the Prospectus and is
designed to meet the requirements of Rule 12b-1 under the 1940 Act and the sales
charge rule of the National Association of Securities Dealers, Inc. (the "NASD
Rule"). The purpose of the Plan is to compensate the Principal Underwriter for
its distribution services and facilities provided to the Fund by paying the
Principal Underwriter sales commissions and a separate distribution fee in
connection with sales of Fund shares. The following supplements the discussion
of the Plan contained in the Fund's Prospectus.
In calculating daily the amount of uncovered distribution charges,
distribution charges will include the aggregate amount of sales commissions and
distribution fees theretofore paid plus the aggregate amount of sales
commissions and distribution fees which the Principal Underwriter is entitled to
be paid under the Plan since its inception. Payments theretofore paid or payable
under the Plan by the Fund to the Principal Underwriter and contingent deferred
sales charges theretofore paid or payable to the Principal Underwriter will be
subtracted from such distribution charges; if the result of such subtraction is
positive, a distribution fee (computed at 1% over the prime rate then reported
in The Wall Street Journal) will be computed on such amount and added thereto,
with the resulting sum constituting the amount of outstanding uncovered
distribution charges with respect to such day. The amount of outstanding
uncovered distribution charges of the Principal Underwriter calculated on any
day does not constitute a liability recorded on the financial statements of the
Fund.
It is anticipated that the Eaton Vance organization will profit by reason of
the operation of the Plan through an increase in the Fund's assets (thereby
increasing the advisory fee payable to BMR by the Portfolio) resulting from sale
of Fund shares and through the amounts paid to the Principal Underwriter,
including contingent deferred sales charges, pursuant to the Plan. The Eaton
Vance organization may be considered to have realized a profit under the Plan if
at any point in time the aggregate amounts theretofore received by the Principal
Underwriter under the Plan and from contingent deferred sales charges have
exceeded the total expenses theretofore incurred by such organization in
distributing shares of the Fund. Total expenses for this purpose will include an
allocable portion of the overhead costs of such organization and its branch
offices, which costs will include without limitation leasing expense,
depreciation of building and equipment, utilities, communication and postage
expense, compensation and benefits of personnel, travel and promotional expense,
stationery and supplies, literature and sales aids, interest expense, data
processing fees, consulting and temporary help costs, insurance, taxes other
than income taxes, legal and auditing expense and other miscellaneous overhead
items. Overhead is calculated and allocated for such purpose by the Eaton Vance
organization in a manner deemed equitable to the Fund.
The amount of uncovered distribution charges of the Principal Underwriter at
any particular time depends upon various changing factors, including the level
and timing of sales of Fund shares, the nature of such sales (i.e., whether they
result from exchange transactions, reinvestments or from cash sales through
Authorized Firms), the level and timing of redemptions of Fund shares upon which
a contingent deferred sales charge will be imposed, the level and timing of
redemptions of Fund shares upon which no contingent deferred sales charge will
be imposed (including redemptions involving exchanges of Fund shares for shares
of another fund in the Eaton Vance Classic Group of Funds which result in a
reduction of uncovered distribution charges), changes in the level of the net
assets of the Fund, and changes in the interest rate used in the calculation of
the distribution fee under the Plan. (For shares sold prior to January 30, 1995,
Plan payments are as follows: the Principal Underwriter pays monthly sales
commissions and service fee payments to Authorized Firms equivalent to
approximately .75% and .25%, respectively, annualized of the assets maintained
in the Fund by their customers beginning at the time of sale. No payments were
made at the time of sale and there is no contingent deferred sales charge.) For
the sales commission payments made by the Fund and the outstanding uncovered
distribution changes of the Principal Underwriter, see "Fees and Expenses --
Distribution Plan" in this Part II. The Plan also authorizes the Fund to make
payments of service fees. For additional information concerning the service fee,
see "Fees and Expenses -- Distribution Plan" in Part II.
Under the Plan the President or a Vice President of the Trust shall provide
to the Trustees for their review, and the Trustees shall review at least
quarterly, a written report of the amount expended under the Plan and the
purposes for which such expenditures were made. The Plan may not be amended to
increase materially the payments described therein without approval of the
shareholders of the Fund, and all material amendments of the Plan must also be
approved by the Trustees as required by Rule 12b-1. So long as the Plan is in
effect, the selection and nomination of Trustees who are not interested persons
of the Trust shall be committed to the discretion of the Trustees who are not
such interested persons.
The Trustees of the Trust believe that the Plan will be a significant factor
in the expected growth of the Fund's assets, and will result in increased
investment flexibility and advantages which will benefit the Fund and its
shareholders. Payments for sales commissions and distribution fees made to the
Principal Underwriter under the Plan will compensate the Principal Underwriter
for its services and expenses in distributing shares of the Fund. Service fee
payments made to the Principal Underwriter and Authorized Firms under the Plan
provide incentives to provide continuing personal services to investors and the
maintenance of shareholder accounts. By providing incentives to the Principal
Underwriter and Authorized Firms, the Plan is expected to result in the
maintenance of, and possible future growth in, the assets of the Fund. Based on
the foregoing and other relevant factors, the Trustees of the Trust have
determined that in their judgment there is a reasonable likelihood that the Plan
will benefit the Fund and its shareholders.
PERFORMANCE INFORMATION
The tables below indicate the total return (capital changes plus
reinvestment of all distributions) on a hypothetical investment of $1,000 in the
Fund covering the life of the Fund from November 4, 1994 to December 31, 1994.
VALUE OF A $1,000 INVESTMENT
------------------------------------------------------------------------------
VALUE OF
INVESTMENT AMOUNT OF INVESTMENT TOTAL RETURN
INVESTMENT PERIOD DATE INVESTMENT ON 12/31/94 CUMULATIVE ANNUALIZED
--------------------------------------------------------------------------------
Life of the Fund* 11/04/94 $1,000.00 $987.00** -1.30%** --
PERCENTAGE CHANGES
NOVEMBER 4, 1994 -- DECEMBER 31, 1994
NET ASSET VALUE TO NET ASSET VALUE
WITH ALL DISTRIBUTIONS REINVESTED
PERIOD -------------------------------------------------------------
ENDED ANNUAL CUMULATIVE AVERAGE ANNUAL
------------------------------------------------------------------------------
12/31/94* -- -1.30%** --
Past performance is not indicative of future results. Investment return and
principal value will fluctuate; shares, when redeemed, may be worth more or less
than their original cost.
---------
*Investment operations began on November 4, 1994.
**If a portion of the Fund's expenses had not been subsidized and the contingent
deferred sales charge applicable to shares purchased on or after January 30,
1995 had been imposed, the Fund would have had lower returns.
ADDITIONAL TAX MATTERS
The Fund qualified as a regulated investment company under the Code for its
fiscal year ended December 31, 1994 (see the Notes to Financial Statements).
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of February 28, 1995, the Trustees and officers of the Trust, as a group,
owned in the aggregate less than 1% of the outstanding shares of the Fund. As of
February 28, 1995, Eaton Vance owned 26.9% of the outstanding shares of the
Fund; Eaton Vance is a Massachusetts business trust and a wholly-owned
subsidiary of EVC. In addition, the following shareholders owned beneficially
and of record the percentages of outstanding shares of the Fund indicated after
their names: Frontier Trust Co., FBO West Florida Pharmacies Inc., 401(k)
Savings & Retirement Plan, c/o The Barclay Group, Ambler, PA (20.9%); Frontier
Trust Co., FBO City Bank & Trust Retirement Plan, c/o The Barclay Group, Ambler,
PA (16.6%); Frontier Trust Co., FBO Cotter Cotter & Sohon PC, 401(k) Savings &
Retirement Plan, c/o The Barclay Group, Ambler, PA (16.2%); Frontier Trust Co.,
FBO Panama Pharmacy Inc., 401(k) Savings and Retirement Plan, c/o The Barclay
Group, Ambler, PA (9.7%); and Cheryl Lynn Hawryrliak, Rochester, NY (5.8%). To
the Trust's knowledge, no other person owned of record or beneficially 5% or
more of the Fund's outstanding shares on such date.
FINANCIAL STATEMENTS
Registrant incorporates by reference the audited financial information for
the Fund and the Portfolio contained in the Fund's shareholder report for the
fiscal year ended December 31, 1994 as previously filed electronically with the
Securities and Exchange Commission (Accession Number 0000950156-95- 000115).
<PAGE>
INVESTMENT ADVISER OF
STOCK PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV CLASSIC
STOCK FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EV CLASSIC STOCK FUND
24 FEDERAL STREET
BOSTON, MA 02110
EV CLASSIC STOCK FUND
STATEMENT OF
ADDITIONAL
INFORMATION
APRIL 1, 1995
C-STSAI
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART II
This Part II provides information about EV MARATHON STOCK FUND. The Fund
became a series of the Trust on July 27, 1994.
FEES AND EXPENSES
ADMINISTRATOR
As stated under "Investment Adviser and Administrator" in Part I of this
Statement of Additional Information, the Administrator receives no
compensation for providing administrative services to the Fund. For the period
from the start of business, August 17, 1994, to December 31, 1994, $1,369 of
the Fund's operating expenses were allocated to the Administrator.
DISTRIBUTION PLAN
The Distribution Plan and Distribution Agreement remain in effect until
April 28, 1995 and may be continued as described under "Distribution Plan" in
the Prospectus. Pursuant to Rule 12b-1, the Plan has been approved by the Fund's
initial sole shareholder (Eaton Vance) and by the Board of Trustees of the Trust
as required by Rule 12b-1. For the period from the start of business, August 17,
1994, to December 31, 1994, the Fund made sales commission payments under the
Plan to the Principal Underwriter aggregating $1,818, which amount was used by
the Principal Underwriter to partially defray sales commissions aggregating
$4,435 paid during such period by the Principal Underwriter to Authorized Firms
on sales of Fund shares. During such period, contingent deferred sales charges
aggregating approximately $180 were imposed on early redeeming shareholders and
paid to the Principal Underwriter to partially defray such sales commissions. As
at December 31, 1994, the outstanding uncovered distribution charges of the
Principal Underwriter calculated under the Plan amounted to approximately
$39,703 (which amount was equivalent to 3.7% of the Fund's net assets on such
day). For the period ended December 31, 1994, the Fund made no service fee
payments under the Plan. The Fund expects to begin accruing for its service fee
payments during the quarter ending September 30, 1995.
PRINCIPAL UNDERWRITER
For the period from the start of business, August 17, 1994, to December 31,
1994, the Fund paid the Principal Underwriter $2.50 for repurchase transactions
handled (being $2.50 for each such transaction).
CUSTODIAN
For the period from the start of business, August 17, 1994, to December 31,
1994, the Fund paid IBT $250.
<TABLE>
TRUSTEES
The fees and expenses of those Trustees of the Trust and of the Portfolio who are not members of the
Eaton Vance organization are paid by the Fund (and the other series of the Trust) and the Portfolio,
respectively. During the fiscal year ended December 31, 1994, the Trustees of the Trust and the Portfolio
earned the following compensation in their capacities as Trustees from the Fund, the Portfolio and the
other funds in the Eaton Vance fund complex<F1>:
<CAPTION>
AGGREGATE AGGREGATE RETIREMENT TOTAL COMPENSATION
NAME COMPENSATION COMPENSATION BENEFIT ACCRUED FROM TRUST AND
---- FROM FUND FROM PORTFOLIO FROM FUND COMPLEX FUND COMPLEX
---------------- ---------------- --------------------- ----------------------
<S> <C> <C> <C> <C>
Donald R. Dwight ..... $--0-- $297<F2> $8,750 $135,000
Samuel L. Hayes, III . --0-- 302<F3> 8,864 142,500
Norton H. Reamer ..... --0-- 318 -- 0 -- 135,000
John L. Thorndike .... --0-- 338 -- 0 -- 140,000
Jack L. Treynor ...... --0-- 301 -- 0 -- 140,000
---------
<FN>
<F1>The Eaton Vance fund complex consists of 201 registered investment companies or series thereof.
<F2>Includes $98 of deferred compensation.
<F3>Includes $101 of deferred compensation.
</TABLE>
PRINCIPAL UNDERWRITER
Under the Distribution Agreement the Principal Underwriter acts as principal
in selling shares of the Fund. The expenses of printing copies of prospectuses
used to offer shares to Authorized Firms or investors and other selling
literature and of advertising is borne by the Principal Underwriter.
The fees and expenses of qualifying and registering and maintaining
qualifications and registrations of the Fund and its shares under Federal and
state securities laws is borne by the Fund. In addition, the Fund makes payments
to the Principal Underwriter pursuant to its Distribution Plan as described in
the Fund's current Prospectus; the provisions of the plan relating to such
payments are included in the Distribution Agreement. The Distribution Agreement
is renewable annually by the Trust's Board of Trustees (including a majority of
its Trustees who are not interested persons of the Trust and who have no direct
or indirect financial interest in the operation of the Fund's Distribution Plan
or the Distribution Agreement), may be terminated on sixty days" notice either
by such Trustees or by vote of a majority of the outstanding voting securities
of the Fund or on six months" notice by the Principal Underwriter and is
automatically terminated upon assignment. The Principal Underwriter distributes
Fund shares on a "best efforts" basis under which it is required to take and pay
for only such shares as may be sold.
The Fund has authorized Eaton Vance Distributors, Inc. (the "Principal
Underwriter") to act as its agent in repurchasing shares at the rate of $2.50
for each repurchase transaction handled by the Principal Underwriter. The
Principal Underwriter estimates that the expenses incurred by it in acting as
repurchase agent for the Fund will exceed the amounts paid therefor by the Fund.
DISTRIBUTION PLAN
The Distribution Plan (the "Plan") is described in the Prospectus and is
designed to meet the requirements of Rule 12b-1 under the 1940 Act and the sales
charge rule of the National Association of Securities Dealers, Inc. (the "NASD
Rule"). The purpose of the Plan is to compensate the Principal Underwriter for
its distribution services and facilities provided to the Fund by paying the
Principal Underwriter sales commissions and a separate distribution fee in
connection with sales of Fund shares. The following supplements the discussion
of the Plan contained in the Fund's Prospectus.
In calculating daily the amount of uncovered distribution charges,
distribution charges will include the aggregate amount of sales commissions and
distribution fees theretofore paid plus the aggregate amount of sales
commissions and distribution fees which the Principal Underwriter is entitled to
be paid under the Plan since its inception. Payments theretofore paid and
payable under the Plan by the Fund to the Principal Underwriter and contingent
deferred sales charges theretofore paid and payable to the Principal Underwriter
will be subtracted from such distribution charges; if the result of such
subtraction is positive, a distribution fee (computed at 1% over the prime rate
then reported in The Wall Street Journal) will be computed on such amount and
added thereto, with the resulting sum constituting the amount of outstanding
uncovered distribution charges with respect to such day. The amount of
outstanding uncovered distribution charges of the Principal Underwriter
calculated on any day does not constitute a liability recorded on the financial
statements of the Fund.
It is anticipated that the Eaton Vance organization will profit by reason of
the operation of the Plan through an increase in the Fund's assets (thereby
increasing the advisory fee payable to BMR by the Portfolio) resulting from sale
of Fund shares and through amounts paid to the Principal Underwriter, including
contingent deferred sales charges, pursuant to the Plan. The Eaton Vance
organization may be considered to have realized a profit under the Plan if at
any point in time the aggregate amounts theretofore received by the Principal
Underwriter pursuant to the Plan and from contingent deferred sales charges have
exceeded the total expenses theretofore incurred by such organization in
distributing shares of the Fund. Total expenses for this purpose will include an
allocable portion of the overhead costs of such organization and its branch
offices, which costs will include without limitation leasing expense,
depreciation of building and equipment, utilities, communication and postage
expense, compensation and benefits of personnel, travel and promotional expense,
stationery and supplies, literature and sales aids, interest expense, data
processing fees, consulting and temporary help costs, insurance, taxes other
than income taxes, legal and auditing expense and other miscellaneous overhead
items. Overhead is calculated and allocated for such purpose by the Eaton Vance
organization in a manner deemed equitable to the Fund.
The amount of uncovered distribution charges of the Principal Underwriter at
any particular time depends upon various changing factors, including the level
and timing of sales of Fund shares, the nature of such sales (i.e., whether they
result from exchange transactions, reinvestments or from cash sales through
Authorized Firms), the level and timing of redemptions of Fund shares upon which
a contingent deferred sales charge will be imposed, the level and timing of
redemptions of Fund shares upon which no contingent deferred sales charge will
be imposed (including redemptions involving exchanges of Fund shares for shares
of another fund in the Eaton Vance Marathon Group of Funds which result in a
reduction of uncovered distribution charges), changes in the level of the net
assets of the Fund, and changes in the interest rate used in the calculation of
the distribution fee under the Plan. For the sales commission payments made by
the Fund and the outstanding uncovered distribution charges of the Principal
Underwriter, see "Fees and Expenses -- Distribution Plan" in this Part II. The
Plan also authorizes the Fund to make payments of service fees. For additional
information concerning the service fees, see "Fees and Expenses -- Distribution
Plan" in this Part II.
Under the Plan the President or a Vice President of the Trust shall provide
to the Trustees for their review, and the Trustees shall review at least
quarterly, a written report of the amount expended under the Plan and the
purposes for which such expenditures were made. The Plan may not be amended to
increase materially the payments described therein without approval of the
shareholders of the Fund, and all material amendments of the Plan must also be
approved by the Trustees as required by Rule 12b-1. So long as the Plan is in
effect, the selection and nomination of Trustees who are not interested persons
of the Trust shall be committed to the discretion of the Trustees who are not
such interested persons.
The Trustees of the Trust believe that the Plan will be a significant factor
in the expected growth of the Fund's assets, and will result in increased
investment flexibility and advantages which will benefit the Fund and its
shareholders. Payments for sales commissions and distribution fees made to the
Principal Underwriter under the Plan will compensate the Principal Underwriter
for its services and expenses in distributing shares of the Fund. Service fee
payments made to the Principal Underwriter and Authorized Firms under the Plan
provide incentives to provide continuing personal services to investors and the
maintenance of shareholder accounts. By providing incentives to the Principal
Underwriter and Authorized Firms, the Plan is expected to result in the
maintenance of, and possible future growth in, the assets of the Fund. Based on
the foregoing and other relevant factors, the Trustees of the Trust have
determined that in their judgment there is a reasonable likelihood that the Plan
will benefit the Fund and its shareholders.
PERFORMANCE INFORMATION
The tables below indicate the total return (capital changes plus
reinvestment of all distributions) on a hypothetical investment of $1,000 in the
Fund covering the life of the Fund from August 17, 1994 to December 31, 1994.
<TABLE>
<CAPTION>
VALUE OF A $1,000 INVESTMENT
VALUE OF
INVESTMENT VALUE
BEFORE OF INVESTMENT
DEDUCTING THE AFTER DEDUCTING TOTAL RETURN TOTAL RETURN
CONTINGENT THE CONTINGENT BEFORE DEDUCTING AFTER DEDUCTING
DEFERRED DEFERRED SALES THE CONTINGENT DEFERRED THE CONTINGENT DEFERRED
INVESTMENT INVESTMENT AMOUNT OF SALES CHARGE CHARGE<F2> SALES CHARGE SALES CHARGE<F2>
PERIOD DATE INVESTMENT ON 12/31/94 ON 12/31/94 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
----------- ---------- ---------- ------------- -------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Life of the
Fund<F1> 8/17/94 $1,000 $960.00<F3> $912.00<F3> -4.00%<F3> -- -8.80%<F3> --
<PAGE>
<CAPTION>
PERCENTAGE CHANGES 8/17/94 -- 12/31/94
NET ASSET VALUE TO NET ASSET VALUE NET ASSET VALUE TO NET ASSET VALUE
BEFORE DEDUCTING THE CONTINGENT DEFERRED AFTER DEDUCTING THE CONTINGENT DEFERRED
SALES CHARGE WITH ALL DISTRIBUTIONS REINVESTED SALES CHARGE<F2> WITH ALL DISTRIBUTIONS REINVESTED
---------------------------------------------- -------------------------------------------------
FISCAL YEAR ANNUAL CUMULATIVE AVERAGE ANNUAL ANNUAL CUMULATIVE AVERAGE ANNUAL
----------- ------ ---------- -------------- ------ ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
12/31/94<F1> -- -4.00%<F3> -- -- -8.80%<F3> --
Past performance is not indicative of future results. Investment return and principal value will fluctuate;
shares, when redeemed, may be worth more or less than their original cost.
---------
<FN>
<F1>Investment operations began on August 17, 1994.
<F2>No contingent deferred sales charge is imposed on shares purchased more than six years prior to the
redemption, shares acquired through the reinvestment of distributions, or any appreciation in value of other
shares in the account, and no such charge is imposed on exchanges of Fund shares for shares of one or more
other funds listed under "The Eaton Vance Exchange Privilege" in the Prospectus.
<F3>If a portion of the Fund's expenses had not been subsidized, the Fund would have had lower returns.
</TABLE>
ADDITIONAL TAX MATTERS
The Fund qualified as a regulated investment company under the Code for its
fiscal year ended December 31, 1994 (see the Notes to Financial Statements).
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of February 28, 1995, the Trustees and officers of the Trust, as a group,
owned in the aggregate less than 1% of the outstanding shares of the Fund. As of
February 28, 1995, Merrill Lynch, Pierce, Fenner & Smith, Inc., New Brunswick,
NJ was the record owner of approximately 14.8% of the outstanding shares, which
were held on behalf of its customers who are the beneficial owners of such
shares, and as to which it had voting power under certain limited circumstances.
In addition, as of February 28, 1995, the following shareholders owned
beneficially and of record the percentages of outstanding shares of the Fund
indicated after their names: Allen K. Peckel, General Partner, Peckel Family
Limited Partnership, Croton On Hudson, NY (13.5%); William A. Myers, Jr., Cape
Mary Point, NJ (7.4%); and George Sertich and Elizabeth Jane Sertich, Trustees,
George Sertich Trust, U/A DTD 12/14/90, Rio Raveho, NM (5.4%). To the Trust's
knowledge, no other person owned of record or beneficially 5% or more of the
Fund's outstanding shares on such date.
FINANCIAL STATEMENTS
Registrant incorporates by reference the audited financial information for
the Fund and the Portfolio contained in the Fund's shareholder report for the
fiscal year ended December 31, 1994 as previously filed electronically with
the Securities and Exchange Commission (Accession Number 0000950156-95-
000116).
<PAGE>
INVESTMENT ADVISER OF
STOCK PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV MARATHON STOCK FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EV MARATHON
STOCK
FUND
STATEMENT OF ADDITIONAL INFORMATION
APRIL 1, 1995
EV MARATHON STOCK FUND
24 FEDERAL STREET
BOSTON, MA 02110
M-STSAI
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART II
This Part II provides information about EV TRADITIONAL STOCK FUND. On July
27, 1994, the Fund became a series of the Trust and redesignated its name from
Eaton Vance Stock Fund to EV Traditional Stock Fund.
FEES AND EXPENSES
INVESTMENT ADVISER
Prior to the close of business on August 1, 1994 (when the Fund transferred
its assets to the Portfolio in exchange for an interest in the Portfolio), the
Fund retained Eaton Vance as its investment adviser. For the period from January
1, 1994, to August 1, 1994, the Fund paid Eaton Vance advisory fees of $350,884
(equivalent to 0.625% (annualized) of the Fund's average daily net assets for
such period). For the fiscal years ended December 31, 1993 and 1992, the Fund
paid Eaton Vance advisory fees of $560,111 and $558,459, respectively.
SERVICE PLAN
During the fiscal year ended December 31, 1994, the Fund made payments under
the Plan aggregating $44,425, of which $31,213 was paid to Authorized Firms for
shareholder services and the balance was retained by the Principal Underwriter
for such services.
CUSTODIAN
During the fiscal year ended December 31, 1994, the Fund paid IBT $51,898.
BROKERAGE COMMISSIONS
During the period from January 1, 1994, to August 1, 1994, the Fund paid
brokerage commissions of $186,758 on portfolio security transactions, of which
$150,412 was paid in respect of portfolio security transactions aggregating
approximately $82,449,000. During the Fund's fiscal years ended December 31,
1993 and 1992, the Fund paid brokerage commissions of $255,462 and $135,274,
respectively, on portfolio security transactions. Of the total brokerage
commissions of $255,462 paid during the fiscal year ended December 31, 1993,
approximately $222,702 was paid in respect of portfolio security transactions
aggregating approximately $143,198,506 to firms which provided some research
services to Eaton Vance (although many of such firms may have been selected in
any particular transaction primarily because of their execution capabilities).
<TABLE>
TRUSTEES
The fees and expenses of those Trustees of the Trust and of the Portfolio who are not members of the Eaton Vance
organization are paid by the Fund (and the other series of the Trust) and the Portfolio, respectively. During the
fiscal year ended December 31, 1994, the Trustees of the Trust and the Portfolio earned the following compensation in
their capacities as Trustees from the Fund, the Portfolio and the other funds in the Eaton Vance fund complex<F1>:
<CAPTION>
AGGREGATE AGGREGATE RETIREMENT TOTAL COMPENSATION
COMPENSATION COMPENSATION BENEFIT ACCRUED FROM TRUST AND
NAME FROM FUND FROM PORTFOLIO FROM FUND COMPLEX FUND COMPLEX
---- ------------- -------------- ----------------- ------------------
<S> <C> <C> <C> <C>
Donald R. Dwight<F2>................... $ 930 $297<F2> $8,750 $135,000
Samuel L. Hayes, III<F3>............... 984 302<F3> 8,865 142,500
Norton H. Reamer ...................... 986 318 -- 0 -- 135,000
John L. Thorndike ..................... 1,030 338 -- 0 -- 140,000
Jack L. Treynor ....................... 994 301 -- 0 -- 140,000
---------
<F1>The Eaton Vance fund complex consists of 201 registered investment companies or series thereof.
<F2>Includes $98 of deferred compensation.
<F3>Includes $101 of deferred compensation.
</TABLE>
SERVICES FOR ACCUMULATION
The following services are voluntary, involve no extra charge other than the
sales charge included in the offering price, and may be changed or discontinued
without penalty at any time.
INTENDED QUANTITY INVESTMENT--STATEMENT OF INTENTION.If it is anticipated that
$100,000 or more of Fund shares and shares of the other continuously offered
open-end funds listed under "The Eaton Vance Exchange Privilege" in the current
Prospectus of the Fund will be purchased within a 13-month period, a Statement
of Intention should be signed so that shares may be obtained at the same reduced
sales charge as though the total quantity were invested in one lump sum. Shares
held under Right of Accumulation (see below) as of the date of the Statement
will be included toward the completion of the Statement. The Statement
authorizes the Transfer Agent to hold in escrow sufficient shares (5% of the
dollar amount specified in the Statement) which can be redeemed to make up any
difference in sales charge on the amount intended to be invested and the amount
actually invested. Execution of a Statement does not obligate the shareholder to
purchase or the Fund to sell the full amount indicated in the Statement, and
should the amount actually purchased during the 13-month period be more or less
than that indicated on the Statement, price adjustments will be made. For sales
charges and other information on quantity purchases, see "How to Buy Fund
Shares" in the Fund's current Prospectus. Any investor considering signing a
Statement of Intention should read it carefully.
RIGHT OF ACCUMULATION--CUMULATIVE QUANTITY DISCOUNT.The applicable sales charge
level for the purchase of Fund shares is calculated by taking the dollar amount
of the current purchase and adding it to the value (calculated at the maximum
current offering price) of the shares the shareholder owns in his account(s) in
the Fund and in the other continuously offered open-end funds listed under "The
Eaton Vance Exchange Privilege" in the current Prospectus of the Fund for which
Eaton Vance acts as adviser or administrator at the time of purchase. The sales
charge on the shares being purchased will then be at the rate applicable to the
aggregate. For example, if the shareholder owned shares valued at $80,000 in EV
Traditional Investors Fund, and purchased an additional $20,000 of Fund shares,
the sales charge for the $20,000 purchase would be at the rate of 3.75% of the
offering price (3.90% of the net amount invested) which is the rate applicable
to single transactions of $100,000. For sales charges on quantity purchases, see
"How to Buy Fund Shares" in the Fund's current Prospectus. Shares purchased (i)
by an individual, his spouse and their children under the age of twenty-one, and
(ii) by a trustee, guardian or other fiduciary of a single trust estate or a
single fiduciary account, will be combined for the purpose of determining
whether a purchase will qualify for the Right of Accumulation and if qualifying,
the applicable sales charge level.
For any such discount to be made available, at the time of purchase a
purchaser or his or her Authorized Firm must provide Eaton Vance Distributors,
Inc. (the "Principal Underwriter") (in the case of a purchase made through a
financial service firm (an "Authorized Firm") or the Transfer Agent (in the case
of an investment made by mail) with sufficient information to permit
verification that the purchase order qualifies for the accumulation privilege.
Corfirmation of the order is subject to such verification. The Right of
Accumulation privilege may be amended or terminated at any time as to purchases
occurring thereafter.
PRINCIPAL UNDERWRITER
Shares of the Fund may be continuously purchased at the public offering
price through certain Authorized Firms which have agreements with the Principal
Underwriter. The Principal Underwriter is a wholly-owned subsidiary of Eaton
Vance.
The public offering price is the net asset value next computed after receipt
of the order, plus, where applicable, a variable percentage (sales charge)
depending upon the amount of purchase as indicated by the sales charge table set
forth in the Prospectus.
Such table is applicable to purchases of the Fund alone or in combination
with purchases of the other funds offered by the Principal Underwriter, made at
a single time by (i) an individual, or an individual, his or her spouse and
their children under the age of twenty-one, purchasing shares for his or their
own account; and (ii) a trustee or other fiduciary purchasing shares for a
single trust estate or a single fiduciary account.
The table is also presently applicable to (1) purchases of Fund shares,
alone or in combination with purchases of any of the other funds offered by the
Principal Underwriter through one dealer aggregating $100,000 or more made by
any of the persons enumerated above within a thirteen-month period starting with
first purchase pursuant to a written Statement of Intention, in the form
provided by the Principal Underwriter, which includes provisions for a price
adjustment depending upon the amount actually purchased within such period (a
purchase not made pursuant to such Statement may be included thereunder if the
Statement is filed within 90 days of such purchase); or (2) purchases of the
Fund pursuant to the Right of Accumulation and declared as such at the time of
purchase.
Subject to the applicable provisions of the 1940 Act, the Fund may issue
shares at net asset value in the event that an investment company (whether a
regulated or private investment company or a personal holding company) is merged
or consolidated with or acquired by the Fund. Normally no sales charges will be
paid in connection with an exchange of Fund shares for the assets of such
investment company.
Shares may be sold at net asset value to any officer, director, trustee,
general partner or employee of the Fund, the Portfolio or any investment company
for which Eaton Vance or BMR acts as investment adviser, any investment
advisory, agency, custodial or trust account managed or administered by Eaton
Vance or by any parent, subsidiary or other affiliate of Eaton Vance, or any
officer, director or employee of any parent, subsidiary or other affiliate of
Eaton Vance. The terms "officer," "director," "trustee," "general partner" or
"employee" as used in this paragraph include any such person's spouse and minor
children, and also retired officers, directors, trustees, general partners and
employees and their spouses and minor children. Shares of the Fund may also be
sold at net asset value to registered representatives and employees of certain
Authorized Firms and to such persons' spouses and children under the age of 21
and their beneficial accounts.
The Trust reserves the right to suspend or limit the offering of shares of
the Fund to the public at any time.
The Principal Underwriter acts as principal in selling shares of the Fund
under the distribution agreement with the Trust on behalf of the Fund. The
expenses of printing copies of prospectuses used to offer shares to financial
service firms or investors and other selling literature and of advertising are
borne by the Principal Underwriter. The fees and expenses of qualifying and
registering and maintaining qualifications and registrations of the Fund and its
shares under Federal and state securities laws are borne by the Fund. The
distribution agreement is renewable annually by the Board of Trustees of the
Trust (including a majority of its Trustees who are not interested persons of
the Principal Underwriter or the Trust), may be terminated on six months' notice
by either party, and is automatically terminated upon assignment. The Principal
Underwriter distributes Fund shares on a "best efforts" basis under which it is
required to take and pay for only such shares as may be sold. The Principal
Underwriter allows Authorized Firms discounts from the applicable public
offering price which are alike for all Firms. In the case of the maximum sales
charge the Authorized Firm retains 4% of the public offering price (4.20% of the
net amount invested) and the Principal Underwriter retains 0.75% of the public
offering price (0.79% of the net amount invested).However, the Principal
Underwriter may allow, upon notice to all Authorized Firms with whom it has
agreements, discounts up to the full sales charge during the periods specified
in the notice. During periods when the discount includes the full sales charge,
such Firms may be deemed to be underwriters as that term is defined in the
Securities Act of 1933. The total sales charges for sales of shares of the Fund
during the fiscal years ended December 31, 1994, 1993 and 1992, were $42,731,
$99,605 and $58,813, respectively, of which $6,855, $15,660 and $9,377,
respectively, was received by the Principal Underwriter. For the fiscal years
ended December 31, 1994, 1993 and 1992, Authorized Firms received $35,876,
$83,945 and $49,436, respectively, from the total sales charges.
SERVICE PLAN
The Trust on behalf of the Fund has adopted a Service Plan (the "Plan")
designed to meet the requirements of Rule 12b-1 (the "Rule") under the
Investment Company Act of 1940 and the service fee requirements of the revised
sales charge rule of the National Association of Securities Dealers,
Inc.(Management believes service fee payments are not distribution expenses
governed by the Rule, but has chosen to have the Plan approved as if the Rule
were applicable.) The following supplements the discussion of the Plan contained
in the Fund's Prospectus.
Pursuant to such Rule, the Plan has been approved by the independent
Trustees of the Trust, who have no direct or indirect financial interest in the
Plan, and by all of the Trustees of the Trust on behalf of the Fund. The Plan
amends and replaces the Trust's original distribution plan (which originally
became effective on December 27, 1990 and which was approved by the Fund's
shareholders).
The Plan remains in effect through April 28, 1995, and from year to year
thereafter, provided such continuance is approved by a vote of both a majority
of (i) those Trustees who are not interested persons of the Trust and who have
no direct or indirect financial interest in the operation of the Plan or any
agreements related to it (the "Rule 12b-1 Trustees") and (ii) all of the
Trustees then in office, cast in person at a meeting (or meetings) called for
the purpose of voting on this Plan. The Plan may be terminated any time by vote
of the Rule 12b-1 Trustees or by a vote of a majority of the outstanding voting
securities of the Fund.
Under the Plan, the President or a Vice President of the Trust shall provide
to the Trustees for their review, and the Trustees shall review at least
quarterly, a written report of the amount expended under the Plan and the
purposes for which such expenditures were made. The Plan may not be amended to
increase materially the payments described herein without approval of the
shareholders of the Fund, and all material amendments of the Plan must also be
approved by the Trustees of the Trust in the manner described above. So long as
the Plan is in effect, the selection and nomination of Trustees who are not
interested persons of the Trust shall be committed to the discretion of the
Trustees who are not such interested persons. The Trustees have determined that
in their judgment there is a reasonable likelihood that the Plan will benefit
the Fund and its shareholders.
PERFORMANCE INFORMATION
The tables below indicate the total return (capital changes plus
reinvestment of all distributions) on a hypothetical investment of $1,000 in the
Fund covering the ten, five and one year periods ended December 31, 1994.
<TABLE>
<CAPTION>
VALUE OF A $1,000 INVESTMENT
TOTAL RETURN TOTAL RETURN
VALUE OF EXCLUDING SALES CHARGE INCLUDING SALES CHARGE
INVESTMENT AMOUNT OF INVESTMENT AVERAGE AVERAGE
INVESTMENT PERIOD DATE INVESTMENT* ON 12/31/94 CUMULATIVE ANNUAL CUMULATIVE ANNUAL
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
10 Years Ended 12/31/94 12/31/84 $952.15 $2,868.60 201.28% 11.66% 186.97% 11.12%
5 Years Ended 12/31/94 12/31/89 $952.72 $1,243.31 30.50% 5.47% 24.30% 4.45%
1 Year Ended 12/31/94 12/31/93 $952.71 $ 913.46 -4.12% -4.12% -8.67% -8.67%
---------
*Initial investment less the current maximum sales charge of 4.75%.
<CAPTION>
PERCENTAGE CHANGES
DECEMBER 31, 1985 -- DECEMBER 31, 1994
NET ASSET VALUE TO NET ASSET VALUE MAXIMUM OFFERING PRICE TO NET ASSET VALUE
FISCAL WITH ALL DISTRIBUTIONS REINVESTED WITH ALL DISTRIBUTIONS REINVESTED
YEAR --------------------------------- ---------------------------------
ENDED ANNUAL CUMULATIVE AVERAGE ANNUAL ANNUAL CUMULATIVE AVERAGE ANNUAL
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
12/31/85 32.26% 32.26% 32.26% 25.98% 25.98% 25.98%
12/31/86 15.43% 52.66% 23.56% 9.94% 45.41% 20.59%
12/31/87 1.99% 55.70% 15.90% -2.85% 48.31% 14.04%
12/31/88 15.01% 79.07% 15.68% 9.55% 70.57% 14.28%
12/31/89 29.92% 130.87% 18.21% 22.80% 119.90% 17.07%
12/31/90 0.59% 132.22% 15.08% -4.19% 121.19% 14.15%
12/31/91 21.45% 182.04% 15.97% 15.68% 168.64% 15.16%
12/31/92 6.93% 201.58% 14.80% 1.85% 187.26% 14.10%
12/31/93 4.19% 214.23% 13.57% -0.76% 199.30% 12.95%
12/31/94 -4.12% 201.28% 11.66% -8.67% 186.97% 11.12%
Past performance is not indicative of future results. Investment return and principal value will fluctuate and shares, when
redeemed, may be worth more or less than their original cost.
</TABLE>
ADDITIONAL TAX MATTERS
The Fund qualified as a regulated investment company under the Code for its
fiscal year ended December 31, 1994 (see the Notes to Financial Statements).
As of the close of business on August 1, 1994, the Fund contributed its
assets to the Portfolio in exchange for an interest in the Portfolio. The Trust
has obtained an opinion of tax counsel to the effect that, although there is no
judicial authority directly on point, this contribution will not result in the
recognition of gain or loss by the Fund for Federal income tax purposes. The
Trust intends to file the Fund's Federal income tax return for its taxable year
ending December 31, 1994 reporting such contribution of assets in a manner
consistent with such opinion. If it were determined that this contribution by
the Fund was a taxable transaction, the Fund could be required to recognize gain
on the transfer of its assets to the Portfolio and to make additional
distributions to its shareholders in order to avoid Fund- level Federal income
taxes, and any such distributions would be taxable to the shareholders who
receive them; and in such case, the Fund might also be required to pay penalties
and/or interest to the IRS.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of February 28, 1995, the Trustees and officers of the Trust, as a group,
owned in the aggregate less than 1% of the outstanding shares of the Fund. To
the Trust's knowledge, no person owned of record or beneficially 5% or more of
the Fund's outstanding shares on such date.
FINANCIAL STATEMENTS
Registrant incorporates by reference the audited financial information for
the Fund and the Portfolio contained in the Fund's shareholder report for the
fiscal year ended December 31, 1994 as previously filed electronically with the
Securities and Exchange Commission (Accession Number 0000950156-95-000074).
<PAGE>
INVESTMENT ADVISER OF
STOCK PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV TRADITIONAL STOCK FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EV TRADITIONAL
STOCK FUND
STATEMENT OF
ADDITIONAL
INFORMATION
APRIL 1, 1995
EV TRADITIONAL STOCK FUND
24 FEDERAL STREET
BOSTON, MA 02110
T-STSAI
110
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(A) FINANCIAL STATEMENTS
INCLUDED IN PART A:
Financial Highlights for EV Classic Stock Fund for the period from
the start of business, November 4, 1994, to December 31, 1994
Financial Highlights for EV Marathon Stock Fund for the period from
the start of business, August 17, 1994, to December 31, 1994
Financial Highlights for EV Traditional Stock Fund for the ten years
ended December 31, 1994
INCLUDED IN PART B:
INCORPORATED BY REFERENCE TO THE ANNUAL REPORTS FOR THE FUNDS, EACH
DATED DECEMBER 31, 1994, FILED ELECTRONICALLY PURSUANT TO SECTION
30(B)(2) OF THE INVESTMENT COMPANY ACT OF 1940
FOR EV CLASSIC STOCK FUND (ACCESSION NO. 0000950156-95-000115)
EV MARATHON STOCK FUND (ACCESSION NO. 0000950156-95-000116)
EV TRADITIONAL STOCK FUND (ACCESSION NO. 0000950156-95-000074)
Financial Statements for the above-referenced Funds for the time
periods set forth in each Fund's Report are as follows:
Statement of Assets and Liabilities as of December 31, 1994
Statement of Operations
Statement of Changes in Net Assets
Financial Highlights
Notes to Financial Statements
Report of Independent Accountants
Financial Statements for STOCK PORTFOLIO are as follows:
Portfolio of Investments as of December 31, 1994
Statement of Assets and Liabilities as of December 31, 1994
Statement of Operations for the period from the start of business,
August 1, 1994, to December 31, 1994
Statement of Changes in Net Assets for the period from the start
of business, August 1, 1994, to December 31, 1994
Supplementary Data for the period from the start of business,
August 1, 1994, to December 31, 1994
Notes to Financial Statements
Report of Independent Accountants
(B) EXHIBITS:
(1)(a) Amended and Restated Declaration Filed as Exhibit (1) to
of Trust dated September 27, Post-Effective Amendment No. 70
1993. and incorporated herein by
reference.
(b) Amendment to Declaration of Filed as Exhibit (1) (b) to
Trust dated July 27, 1994. Post-Effective Amendment No. 72
and incorporated herein by
reference.
(c) Establishment and Designation of Filed as Exhibit (1) (c) to
Series dated July 27, 1994. Post-Effective Amendment No. 72
and incorporated herein by
reference.
(2)(a) By-Laws. Filed as Exhibit (2) to
Post-Effective Amendment No. 64
and incorporated herein by
reference.
(b) Amendment to By-Laws dated Filed as Exhibit (2) (b) to
December 13, 1993. Post-Effective Amendment No. 70
and incorporated herein by
reference.
(3) Not applicable
(4) Not applicable
(5) Investment Advisory Agreement Filed as Exhibit (5) to
between the Registrant and Eaton Post-Effective Amendment No. 65
Vance Management dated December and incorporated herein by
27, 1990. reference.
(6)(a)(1) Distribution Agreement Filed as Exhibit (6) (a) to
between the Registrant and Post-Effective Amendment No. 65
Eaton Vance Distributors, and incorporated herein by
Inc. dated December 27, 1990. reference.
(a)(2) Distribution Agreement Filed as Exhibit (6) (a)(2) to
between Eaton Vance Post-Effective Amendment No. 72
Distributors, Inc. and EV and incorporated herein by
Classic Stock Fund, dated reference.
August 1, 1994.
(a)(3) Distribution Agreement Filed as Exhibit (6) (a)(3) to
between Eaton Vance Post-Effective Amendment No. 72
Distributors, Inc. and EV and incorporated herein by
Marathon Stock Fund, dated reference.
August 1, 1994.
(b) Selling Group Agreement Filed as Exhibit (6) (b) to
between Eaton Vance Post-Effective Amendment No. 72
Distributors, Inc. and and incorporated herein by
Authorized Firms. reference.
(c) Schedule of Dealer Discounts Filed as Exhibit (6) (c) to
and Sales Charges. Post-Effective Amendment No. 72
and incorporated herein by
reference.
(7) Not applicable
(8) Custodian Agreement between Filed as Exhibit (8) to
the Registrant and Investors Post-Effective Amendment No. 65
Bank & Trust Company dated and incorporated herein by
December 27, 1990. reference.
(9)(a) Administrative Services Filed as Exhibit (9) (a) to
Agreement between Eaton Vance Post-Effective Amendment No. 72
Management and EV Traditional and incorporated herein by
Stock Fund dated August 1, reference.
1994.
(b) Administrative Services Filed as Exhibit (9) (b) to
Agreement between Eaton Vance Post-Effective Amendment No. 72
Management and EV Classic and incorporated herein by
Stock Fund dated August 1, reference.
1994.
(c) Administrative Services Filed as Exhibit (9) (c) to
Agreement between Eaton Vance Post-Effective Amendment No. 72
Management and EV Marathon and incorporated herein by
Stock Fund dated August 1, reference.
1994.
(10) Not applicable
(11)(a) Consent of Independent Filed herewith.
Accountants for EV Classic
Stock Fund.
(b) Consent of Independent Filed herewith.
Accountants for EV Marathon
Stock Fund.
(c) Consent of Independent Filed herewith.
Accountants for EV
Traditional Stock Fund.
(12) Not applicable
(13) Not applicable
(14)(a) Vance, Sanders Profit Sharing Filed as Exhibit No. 14(1) to
Retirement Plan for Post-Effective Amendment No. 22
Self-Employed Persons with to the Registration Statement
Adoption Agreement and under the Securities Act of 1933
instructions. (File No. 2-28471) and
incorporated herewith by
reference.
(b) Eaton & Howard, Vance Sanders Filed with Form N-1 as Exhibit No.
Defined Contribution 14(2) to Post-Effective Amendment
Prototype Plan and Trust with No. 29 to the Registration
Adoption Agreements: Statement (File No. 2- 22019) and
incorporated herewith by
reference.
(1) Basic Profit-Sharing
Retirement Plan.
(2) Basic Money Purchase
Pension Plan.
(3) Thrift Plan Qualifying as
Profit-Sharing Plan.
(4) Thrift Plan Qualifying as
Money Purchase Plan.
(5) Integrated Profit-Sharing
Retirement Plan.
(6) Integrated Money Purchase
Pension Plan.
(c) Individual Retirement Filed as Exhibit No. 14(3) to
Custodian Account (Form Post-Effective Amendment No. 53
5305A) and Instructions. and incorporated herewith by
reference.
(d) Vance, Sanders Variable Filed as Exhibit No. 14(4) to
Pension Prototype Plan and Post-Effective Amendment No. 22
Trust with Adoption to the Registration Statement
Agreement. under the Securities Act of 1933
(File No. 2-28471) and
incorporated herewith by
reference.
(15)(a) Service Plan under Rule 12b-1 Filed as Exhibit (15) to
under the Investment Company Post-Effective Amendment No. 70
Act of 1940 dated July 7, and incorporated herein by
1993 for EV Traditional Stock reference.
Fund.
(b) Distribution Plan for EV Filed as Exhibit (15) (b) to
Classic Stock Fund dated Post-Effective Amendment No. 72
August 1, 1994 pursuant to and incorporated herein by
Rule 12b-1 under the reference.
Investment Company Act of
1940.
(c) Distribution Plan for EV Filed as Exhibit (15) (c) to
Marathon Stock Fund dated Post-Effective Amendment No. 72
August 1, 1994 pursuant to and incorporated herein by
Rule 12b-1 under the reference.
Investment Company Act of
1940.
(16) Schedules for Computation of Filed herewith.
Performance Quotations.
(17)(a) Power of Attorney for Eaton Filed as Exhibit (17) (a) to
Vance Securities Trust dated Post-Effective Amendment No. 72
July 27, 1994. and incorporated herein by
reference.
(b) Power of Attorney for Stock Filed as Exhibit (17) (b) to
Portfolio dated May 18, 1994. Post-Effective Amendment No. 71
and incorporated herein by
reference.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Not applicable
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
(2)
(1) NUMBER OF
TITLE OF CLASS RECORD HOLDERS
-------------- --------------
Shares of beneficial interest
without par value as of February 28, 1995
EV Classic Stock Fund 9
EV Marathon Stock Fund 89
EV Traditional Stock Fund 5,834
ITEM 27. INDEMNIFICATION
No change from the information set forth in Item 27 of Form N-1A filed as
Post-Effective Amendment No. 66 to the Registration Statement under the
Securities Act of 1933 and Amendment No. 16 under the Investment Company Act
of 1940, which is incorporated herein by reference.
Registrant's Trustees and officers are insured under a standard mutual
fund errors and omissions insurance policy covering loss incurred by reason of
negligent errors and omissions committed in their capacities as such.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER
Reference is made to the information set forth under the captions
"Investment Adviser and Administrator" in the Statement of Additional
Information, which information is incorporated herein by reference.
ITEM 29. PRINCIPAL UNDERWRITER
(A) Registrant's principal underwriter, Eaton Vance Distributors, Inc., a
wholly-owned subsidiary of Eaton Vance Management, is the principal
underwriter for each of the investment companies named below:
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
EV Classic Alabama Tax Free Fund EV Classic Special Equities Fund
EV Classic Arizona Tax Free Fund EV Classic Senior Floating-Rate Fund
EV Classic Arkansas Tax Free Fund EV Classic Stock Fund
EV Classic California Limited Maturity EV Classic Tennessee Tax Free Fund
Tax Free Fund EV Classic Texas Tax Free Fund
EV Classic California Municipals Fund EV Classic Total Return Fund
EV Classic Colorado Tax Free Fund EV Classic Virginia Tax Free Fund
EV Classic Connecticut Limited Maturity EV Classic West Virginia Tax Free Fund
Tax Free Fund EV Marathon Alabama Tax Free Fund
EV Classic Connecticut Tax Free Fund EV Marathon Arizona Limited Maturity
EV Classic Florida Insured Tax Free Fund Tax Free Fund
EV Classic Florida Limited Maturity EV Marathon Arizona Tax Free Fund
Tax Free Fund EV Marathon Arkansas Tax Free Fund
EV Classic Florida Tax Free Fund EV Marathon California Limited Maturity
EV Classic Georgia Tax Free Fund Tax Free Fund
EV Classic Government Obligations Fund EV Marathon California Municipals Fund
EV Classic Greater China Growth Fund EV Marathon Colorado Tax Free Fund
EV Classic Growth Fund EV Marathon Connecticut Limited Maturity
EV Classic Hawaii Tax Free Fund Tax Free Fund
EV Classic High Income Fund EV Marathon Connecticut Tax Free Fund
EV Classic Investors Fund EV Marathon Emerging Markets Fund
EV Classic Kansas Tax Free Fund Eaton Vance Equity - Income Trust
EV Classic Kentucky Tax Free Fund EV Marathon Florida Insured Tax Free Fund
EV Classic Louisiana Tax Free Fund EV Marathon Florida Limited Maturity
EV Classic Maryland Tax Free Fund Tax Free Fund
EV Classic Massachusetts Limited Maturity EV Marathon Florida Tax Free Fund
Tax Free Fund EV Marathon Georgia Tax Free Fund
EV Classic Massachusetts Tax Free Fund EV Marathon Gold & Natural Resources Fund
EV Classic Michigan Limited Maturity EV Marathon Government Obligations Fund
Tax Free Fund EV Marathon Greater China Growth Fund
EV Classic Michigan Tax Free Fund EV Marathon Greater India Fund
EV Classic Minnesota Tax Free Fund EV Marathon Growth Fund
EV Classic Mississippi Tax Free Fund EV Marathon Hawaii Tax Free Fund
EV Classic Missouri Tax Free Fund EV Marathon High Income Fund
EV Classic National Limited Maturity Tax Free Fund EV Marathon Investors Fund
EV Classic National Municipals Fund EV Marathon Kansas Tax Free Fund
EV Classic New Jersey Limited Maturity EV Marathon Kentucky Tax Free Fund
Tax Free Fund EV Marathon Louisiana Tax Free Fund
EV Classic New Jersey Tax Free Fund EV Marathon Maryland Tax Free Fund
EV Classic New York Limited Maturity EV Marathon Massachusetts Limited Maturity
Tax Free Fund Tax Free Fund
EV Classic New York Tax Free Fund EV Marathon Massachusetts Tax Free Fund
EV Classic North Carolina Tax Free Fund EV Marathon Michigan Limited Maturity Tax Free Fund
EV Classic Ohio Limited Maturity Tax Free Fund EV Marathon Michigan Tax Free Fund
EV Classic Ohio Tax Free Fund EV Marathon Minnesota Tax Free Fund
EV Classic Oregon Tax Free Fund EV Marathon Mississippi Tax Free Fund
EV Classic Pennsylvania Limited Maturity EV Marathon Missouri Tax Free Fund
Tax Free Fund EV Marathon National Limited Maturity
EV Classic Pennsylvania Tax Free Fund Tax Free Fund
EV Classic Rhode Island Tax Free Fund EV Marathon National Municipals Fund
EV Classic Strategic Income Fund EV Marathon New Jersey Limited Maturity
EV Classic South Carolina Tax Free Fund Tax Free Fund
<PAGE>
EV Marathon New Jersey Tax Free Fund EV Traditional Florida Insured Tax Free Fund
EV Marathon New York Limited Maturity EV Traditional Florida Limited Maturity
Tax Free Fund Tax Free Fund
EV Marathon New York Tax Free Fund EV Traditional Florida Tax Free Fund
EV Marathon North Carolina Limited Maturity EV Traditional Government Obligations Fund
Tax Free Fund EV Traditional Greater China Growth Fund
EV Marathon North Carolina Tax Free Fund EV Traditional Greater India Fund
EV Marathon Ohio Limited Maturity Tax Free Fund EV Traditional Growth Fund
EV Marathon Ohio Tax Free Fund Eaton Vance Income Fund of Boston
EV Marathon Oregon Tax Free Fund EV Traditional Investors Fund
EV Marathon Pennsylvania Limited Maturity Eaton Vance Municipal Bond Fund L.P.
Tax Free Fund EV Traditional National Limited Maturity
EV Marathon Pennsylvania Tax Free Fund Tax Free Fund
EV Marathon Rhode Island Tax Free Fund EV Traditional National Municipals Fund
EV Marathon Strategic Income Fund EV Traditional New Jersey Tax Free Fund
EV Marathon South Carolina Tax Free Fund EV Traditional New York Limited Maturity
EV Marathon Special Equities Fund Tax Free Fund
EV Marathon Stock Fund EV Traditional New York Tax Free Fund
EV Marathon Tennessee Tax Free Fund EV Traditional Pennsylvania Tax Free Fund
EV Marathon Texas Tax Free Fund EV Traditional Special Equities Fund
EV Marathon Total Return Fund EV Traditional Stock Fund
EV Marathon Virginia Limited Maturity EV Traditional Total Return Fund
Tax Free Fund Eaton Vance Cash Management Fund
EV Marathon Virginia Tax Free Fund Eaton Vance Liquid Assets Trust
EV Marathon West Virginia Tax Free Fund Eaton Vance Prime Rate Reserves
EV Traditional California Municipals Fund Eaton Vance Short-Term Treasury Fund
EV Traditional Connecticut Tax Free Fund Eaton Vance Tax Free Reserves
EV Traditional Emerging Markets Fund Massachusetts Municipal Bond Portfolio
</TABLE>
<PAGE>
(b)
<TABLE>
<CAPTION>
(1) (2) (3)
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICE
BUSINESS ADDRESS WITH PRINCIPAL UNDERWRITER WITH REGISTRANT
------------------ -------------------------- --------------------
<S> <C> <C>
James B. Hawkes<F1> Vice President and Director President, Principal
Executive Officer and
Trustee
William M. Steul<F1> Vice President and Director None
Wharton P. Whitaker<F1> President and Director None
Howard D. Barr Vice President None
2750 Royal View Court
Oakland, Michigan
Nancy E. Belza Vice President None
463-1 Buena Vista East
San Francisco, California
Chris Berg Vice President None
45 Windsor Lane
Palm Beach Gardens, Florida
H. Day Brigham, Jr.<F1> Vice President None
Susan W. Bukima Vice President None
106 Princess Street
Alexandria, Virginia
Jeffrey W. Butterfield Vice President None
9378 Mirror Road
Columbus, Indiana
Mark A. Carlson<F1> Vice President None
<PAGE>
(1) (2) (3)
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICE
BUSINESS ADDRESS WITH PRINCIPAL UNDERWRITER WITH REGISTRANT
------------------ -------------------------- --------------------
Jeffrey Chernoff Vice President None
115 Concourse West
Bright Waters, New York
William A. Clemmer<F1> Vice President None
James S. Comforti Vice President None
1859 Crest Drive
Encinitas, California
Mark P. Doman Vice President None
107 Pine Street
Philadelphia, Pennsylvania
Michael A. Foster Vice President None
850 Kelsey Court
Centerville, Ohio
William M. Gillen Vice President None
280 Rea Street
North Andover, Massachusetts
Hugh S. Gilmartin Vice President None
1531-184th Avenue, NE
Bellevue, Washington
Richard E. Houghton<F1> Vice President None
Brian Jacobs<F1> Senior Vice President None
Stephen D. Johnson Vice President None
13340 Providence Lake Drive
Alpharetta, Georgia
Thomas J. Marcello Vice President None
553 Belleville Avenue
Glen Ridge, New Jersey
Timothy D. McCarthy Vice President None
9801 Germantown Pike
Lincoln Woods Apt. 416
Lafayette Hill, Pennsylvania
Morgan C. Mohrman<F1> Senior Vice President None
Gregory B. Norris Vice President None
6 Halidon Court
Palm Beach Gardens, Florida
Thomas Otis<F1> Secretary and Clerk Secretary
George D. Owen Vice President None
1911 Wildwood Court
Blue Springs, Missouri
F. Anthony Robinson Vice President None
510 Gravely Hill Road
Wakefield, Rhode Island
Benjamin A. Rowland, Jr.<F1> Vice President, None
Treasurer and Director
John P. Rynne<F1> Vice President None
George V.F. Schwab, Jr. Vice President None
9501 Hampton Oaks Lane
Charlotte, North Carolina
Cornelius J. Sullivan<F1> Vice President None
Maureen C. Tallon Vice President None
518 Armistead Drive
Nashville, Tennessee
<PAGE>
(1) (2) (3)
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICE
BUSINESS ADDRESS WITH PRINCIPAL UNDERWRITER WITH REGISTRANT
------------------ -------------------------- --------------------
David M. Thill Vice President None
126 Albert Drive
Lancaster, New York
William T. Toner Vice President None
747 Lilac Drive
Santa Barbara, California
Chris Volf Vice President None
6517 Thoroughbred Loop
Odessa, Florida
Donald E. Webber<F1> Senior Vice President None
Sue Wilder Vice President None
141 East 89th Street
New York, New York
---------
<F1> Address is 24 Federal Street, Boston, MA 02110
</TABLE>
(c) Not applicable
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
All applicable accounts, books and documents required to be maintained by
the Registrant by Section 31(a) of the Investment Company Act of 1940 and the
Rules promulgated thereunder are in the possession and custody of the
Registrant's custodian, Investors Bank & Trust Company, 24 Federal Street,
Boston, MA 02110 and 89 South Street, Boston, MA 02111, and its transfer
agent, The Shareholder Services Group, Inc., 53 State Street, Boston, MA
02104, with the exception of certain corporate documents and portfolio trading
documents which are in the possession and custody of Eaton Vance Management,
24 Federal Street, Boston, MA 02110. Registrant is informed that all
applicable accounts, books and documents required to be maintained by
registered investment advisers are in the custody and possession of Eaton
Vance Management.
ITEM 31. MANAGEMENT SERVICES
Not applicable
ITEM 32. UNDERTAKINGS
The Registrant undertakes to furnish to each person to whom a prospectus
is delivered a copy of the latest annual report to shareholders, upon request
and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Post-Effective Amendment to the
Registration Statement pursuant to Rule 485(b) under the Securities Act of
1933 and has duly caused this Post-Effective Amendment to its Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boston and the Commonwealth of Massachusetts on the
27th day of March, 1995.
EATON VANCE SECURITIES TRUST
By: /s/ JAMES B. HAWKES
------------------------------------------
JAMES B. HAWKES, President
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
President, Principal Executive
/s/ JAMES B. HAWKES Officer and Trustee March 27, 1995
------------------------------
JAMES B. HAWKES
Treasurer and Principal
Financial and Accounting
/s/ JAMES L. O'CONNOR Officer March 27, 1995
------------------------------
JAMES L. O'CONNOR
DONALD R. DWIGHT<F1> Trustee March 27, 1995
------------------------------
DONALD R. DWIGHT
SAMUEL L. HAYES, III<F1> Trustee March 27, 1995
------------------------------
SAMUEL L. HAYES, III
PETER F. KIELY<F1> Trustee March 27, 1995
------------------------------
PETER F. KIELY
NORTON H. REAMER<F1> Trustee March 27, 1995
------------------------------
NORTON H. REAMER
JOHN L. THORNDIKE<F1> Trustee March 27, 1995
------------------------------
JOHN L. THORNDIKE
JACK L. TREYNOR<F1> Trustee March 27, 1995
------------------------------
JACK L. TREYNOR
<FN>
<F1>By: /s/ H. DAY BRIGHAM, JR.
--------------------------
H. DAY BRIGHAM, JR.
As Attorney-in-fact
</TABLE>
<PAGE>
SIGNATURES
Stock Portfolio has duly caused this Amendment to the Registration
Statement on Form N-1A of Eaton Vance Securities Trust to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Boston
and the Commonwealth of Massachusetts on the 27th day of March, 1995.
STOCK PORTFOLIO
By: /s/ JAMES B. HAWKES
------------------------------------------
JAMES B. HAWKES, President
This Amendment to the Registration Statement on Form N-1A of Eaton Vance
Securities Trust has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
President, Principal Executive
/s/ JAMES B. HAWKES Officer and Trustee March 27, 1995
------------------------------
JAMES B. HAWKES
Treasurer and Principal
Financial and Accounting
/s/ JAMES L. O'CONNOR Officer March 27, 1995
------------------------------
JAMES L. O'CONNOR
DONALD R. DWIGHT<F1> Trustee March 27, 1995
------------------------------
DONALD R. DWIGHT
SAMUEL L. HAYES, III<F1> Trustee March 27, 1995
------------------------------
SAMUEL L. HAYES, III
PETER F. KIELY<F1> Trustee March 27, 1995
------------------------------
PETER F. KIELY
NORTON H. REAMER<F1> Trustee March 27, 1995
------------------------------
NORTON H. REAMER
JOHN L. THORNDIKE<F1> Trustee March 27, 1995
------------------------------
JOHN L. THORNDIKE
JACK L. TREYNOR<F1> Trustee March 27, 1995
------------------------------
JACK L. TREYNOR
<FN>
<F1>By: /s/ H. DAY BRIGHAM, JR.
--------------------------
H. DAY BRIGHAM, JR.
As Attorney-in-fact
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE IN SEQUENTIAL
EXHIBIT NO. DESCRIPTION NUMBERING SYSTEM
----------- ----------- ----------------
<S> <C>
(11)(a) Consent of Independent Accountants for EV Classic Stock
Fund
(11)(b) Consent of Independent Accountants for EV Marathon Stock
Fund
(11)(c) Consent of Independent Accountants for EV Traditional
Stock Fund
(16) Schedules for Computation of Performance Quotations
</TABLE>
EXHIBIT 99.11(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in Post-Effective Amendment No. 73 to the
Registration Statement on Form N-1A (1933 Act File Number 2-11391) of Eaton
Vance Securities Trust: EV Classic Stock Fund (the "Fund") of our report dated
February 3, 1995 on our audit of the financial statements and financial
highlights of the Fund and of our report dated February 3, 1995 on our audit of
the financial statements and supplementary data of Stock Portfolio, which
reports are included in the Annual Report to Shareholders for the year ended
December 31, 1994, which is incorporated by reference in this Registration
Statement.
We consent to the reference to our Firm under the caption "The Fund's Financial
Highlights" in the Prospectus and under the caption "Independent Accountants" in
the Statement of Additional Information of the Registration Statement.
/s/ COOPERS & LYBRAND L.L.P.
------------------------------------------
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
March 27, 1995
EXHIBIT 99.11(b)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in Post-Effective Amendment No. 73 to the
Registration Statement on Form N-1A (1933 Act File Number 2-11391) of Eaton
Vance Securities Trust: EV Marathon Stock Fund (the "Fund") of our report dated
February 3, 1995 on our audit of the financial statements and financial
highlights of the Fund and of our report dated February 3, 1995 on our audit of
the financial statements and supplementary data of Stock Portfolio, which
reports are included in the Annual Report to Shareholders for the year ended
December 31, 1994, which is incorporated by reference in this Registration
Statement.
We consent to the reference to our Firm under the caption "The Fund's Financial
Highlights" in the Prospectus and under the caption "Independent Accountants" in
the Statement of Additional Information of the Registration Statement.
/s/ COOPERS & LYBRAND L.L.P.
------------------------------------------
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
March 27, 1995
EXHIBIT 99.11(c)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in Post-Effective Amendment No. 73 to the
Registration Statement on Form N-1A (1933 Act File Number 2-11391) of Eaton
Vance Securities Trust: EV Traditional Stock Fund (the "Fund") of our report
dated February 3, 1995 on our audit of the financial statements and financial
highlights of the Fund and of our report dated February 3, 1995 on our audit of
the financial statements and supplementary data of Stock Portfolio, which
reports are included in the Annual Report to Shareholders for the year ended
December 31, 1994, which is incorporated by reference in this Registration
Statement.
We consent to the reference to our Firm under the caption "The Fund's Financial
Highlights" in the Prospectus and under the caption "Independent Accountants" in
the Statement of Additional Information of the Registration Statement.
/s/ COOPERS & LYBRAND L.L.P.
------------------------------------------
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
March 27, 1995
Exhibit 99.16
<TABLE>
EV CLASSIC STOCK FUND
INVESTMENT PERFORMANCE
The table below indicates the total return (capital changes plus reinvestment of all distributions) on a hypothetical investment
of $1,000 in the Fund covering the life of the fund ending December 31, 1994. Past performance is not indicative of future
results. Investment return and principal value will fluctuate and shares, when redeemed, may be worth more or less than
their original cost.
<CAPTION>
NUMBER OF
SHARES GAINED
NAV THROUGH TOTAL
INVEST- INVEST- AMT OF NUMBER DATE OF REINVESTMENT OF NUMBER OF 12/31/94 12/31/94 TOTAL RETURN
MENT MENT INVEST- OF SHARES INVEST- ALL DISTRIBUTIONS SHARES AS NET ASSET VALUE OF THROUGH 12/31/94
PERIOD DATE MENT PURCHASED MENT THROUGH 12/31/94 OF 12/31/94 VALUE + INVESTMENT CUMULATIVE^ ANNUALIZED ++
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LIFE OF 11/04/94 $1,000 100.000 $10.00 0.000 100.000 $9.87 $987.00 -1.30% NA
THE FUND
(0.16 YRS)
^ Cumulative total return (net asset value to net asset value) is calculated by dividing the cumulative net asset value on
12/31/94 by the initial net asset value.
+ 12/31/94 Net Asset Value is an unaudited figure.
++ Average annual total return is the average annual compounded rate of return based on the cumulative value for each period.
It is calculated by taking the nth root of 1 + the cumulative total return, where n = the number of years invested.
</TABLE>
<PAGE>
<TABLE>
EV MARATHON STOCK FUND
INVESTMENT PERFORMANCE
The table below indicates the total return (capital changes plus reinvestment of all distributions) on a hypothetical investment of
$1,000 in the Fund covering the life of the Fund ending December 31, 1994. Past performance is not indicative of future results.
Investment return and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.
<CAPTION>
TOTAL TOTAL
RETURN RETURN
12/31/94 12/31/94 THROUGH THOUGH
VALUE OF VALUE OF 12/31/94 12/31/94
NO. OF SHARES TOTAL INVEST- INVEST- BEFORE AFTER
NO. OF NAV ON GAINED THROUGH NO. OF MENT MENT DEDUCTING DEDUCTING
INVEST- INVEST- AMT OF SHARES DATE OF REINVESTMENT OF SHARES BEFORE AFTER THE CDSC THE CDSC *
MENT MENT INVEST- PUR- INVEST- ALL DISTRIBUTIONS AS OF 12/31/94 DEDUCTING DEDUCTING
PERIOD DATE MENT CHASED MENT THROUGH 12/31/94 12/31/94 NAV+ THE CDSC THE CDSC* CUMUL^ ANN++ CUMUL^^ ANN++
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LIFE OF 08/17/94 $1,000 100.000 $10.00 0.000 100.000 $9.60 $960.00 $912.00 -4.00% NA -8.80% NA
THE FUND
(0.37 YEARS)
* No contingent deferred sales charge (CDSC) is imposed on shares purchased more than six years prior to the redemption,
shares acquired through the reinvestment of dividends and distributions and any appreciation in value of other shares in
the account, and no such charge is imposed on exchanges of fund shares for shares of one or more other funds in the Eaton
Vance Marathon Group of Funds.
^ Cumulative total return (net asset value to net asset value) is calculated by dividing the cumulative net asset value on
12/31/94 by the initial net asset value.
^^ Cumulative total return (net asset value to net asset value) is calculated by dividing the cumulative net asset value on
12/31/94 by the initial net asset value and subtracting the CDSC.
+ 12/31/94 Net Asset Value is an unaudited figure
++ Average annual total return is the average annual compounded rate of return based on the cumulative value for each period.
It is calculated by taking the nth root of 1 + the cumulative total return, where n = the number of years invested.
</TABLE>
<PAGE>
<TABLE>
EV TRADITIONAL STOCK FUND
INVESTMENT PERFORMANCE
The table below indicates the total return (capital changes plus reinvestment of all distributions) on a hypothetical investment of
$1,000 in the Fund covering the ten, five, and one year periods ending December 31, 1994. Past performance is not indicative of
future results. Investment return and principal value will fluctuate and shares, when redeemed, may be worth more or less than
their original cost.
<CAPTION>
DOLLAR
VALUE ON NUMBER
DATE OF OF SHARES TOTAL
INVEST- GAINED ENDING TOTAL RETURN
OFFER MENT THROUGH REDEEMABLE RETURN THROUGH
PRICE (INITIAL REINVESTMENT TOTAL DOLLAR THROUGH 12/31/94
ON NO. OF NAV ON INVEST- OF ALL DIS- NO. OF VALUE 12/31/94 (MAX OFFERING
INVEST- INVEST- AMT OF DAY OF SHARES DATE OF MENT LESS TRIBUTIONS SHARES OF INVEST- (NAV TO NAV) PRICE TO NAV)
MENT MENT INVEST- INVEST- PUR- INVEST- THE SALES THROUGH AS OF 12/31/94 MENT ON
PERIOD DATE MENT MENT CHASED MENT CHARGE*) 12/31/94 12/31/94 NAV+ 12/31/94 CUMUL^ ANN++ CUMUL^^ ANN++
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10 YRS
ENDING 12/31/84 $1,000 $12.75 78.431 $12.14 $952.15 184.743 263.174 $10.90 $2,868.60 201.28% 11.66% 186.97% 11.12%
12/31/94
5 YRS
ENDING 12/31/89 $1,000 $15.44 64.767 $14.71 $952.72 49.298 114.065 $10.90 $1,243.31 30.50% 5.47% 24.30% 4.45%
12/31/94
1 YR
ENDING 12/31/93 $1,000 $13.11 76.278 $12.49 $952.71 7.526 83.804 $10.90 $913.46 -4.12% -4.12% -8.67% -8.67%
12/31/94
* Reflects the current maximum sales charge of 4.75%.
^ Cumulative total return (offering price to net asset value) is calculated by dividing the ending dollar amount on
12/31/94 by the initial net asset value.
^^ Cumulative total return (net asset value to net asset value) is calculated by dividing the ending dollar amount on
12/31/94 by the initial investment less the sales charge.
+ 12/31/94 Net Asset Value is an unaudited figure
++ Average annual total return is the average annual compounded rate of return based on the cumulative value for each period.
It is calculated by taking the nth root of 1 + the cumulative total return, where n = the number of years invested.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000031273
<NAME> EATON VANCE SECURITIES TRUST
<SERIES>
<NUMBER> 2
<NAME> EV CLASSIC STOCK FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 144,544
<RECEIVABLES> 3,165
<ASSETS-OTHER> 36,777
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 184,486
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 38,849
<TOTAL-LIABILITIES> 38,849
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 140,845
<SHARES-COMMON-STOCK> 14,749
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 84
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,708
<NET-ASSETS> 145,637
<DIVIDEND-INCOME> 179
<INTEREST-INCOME> 37
<OTHER-INCOME> (53)
<EXPENSES-NET> 3,165
<NET-INVESTMENT-INCOME> 84
<REALIZED-GAINS-CURRENT> 15
<APPREC-INCREASE-CURRENT> 4,708
<NET-CHANGE-FROM-OPS> 140,820
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14,749
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 145,627
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,244
<AVERAGE-NET-ASSETS> 52,084
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> (0.13)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.87
<EXPENSE-RATIO> 1.59
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000031273
<NAME> EATON VANCE SECURITIES TRUST
<SERIES>
<NUMBER> 3
<NAME> EV MARATHON STOCK FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 1,050,359
<RECEIVABLES> 12,650
<ASSETS-OTHER> 35,118
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,098,127
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 32,317
<TOTAL-LIABILITIES> 32,317
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,092,804
<SHARES-COMMON-STOCK> 110,932
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 111
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (10,147)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (16,688)
<NET-ASSETS> 1,065,810
<DIVIDEND-INCOME> 6,605
<INTEREST-INCOME> 930
<OTHER-INCOME> (1,768)
<EXPENSES-NET> 6,211
<NET-INVESTMENT-INCOME> (444)
<REALIZED-GAINS-CURRENT> (12,295)
<APPREC-INCREASE-CURRENT> (16,688)
<NET-CHANGE-FROM-OPS> (29,427)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 111,812
<NUMBER-OF-SHARES-REDEEMED> 880
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,065,800
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 7,580
<AVERAGE-NET-ASSETS> 654,092
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (0.01)
<PER-SHARE-GAIN-APPREC> (0.39)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.60
<EXPENSE-RATIO> 3.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000031273
<NAME> EATON VANCE SECURITIES TRUST
<SERIES>
<NUMBER> 1
<NAME> EV TRADITIONAL STOCK FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 84,324,132
<RECEIVABLES> 148,569
<ASSETS-OTHER> 10,542
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 84,483,243
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 184,498
<TOTAL-LIABILITIES> 84,298,745
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 77,935,698
<SHARES-COMMON-STOCK> 7,731,141
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 27,508
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6,335,539
<NET-ASSETS> 84,298,745
<DIVIDEND-INCOME> 2,617,289
<INTEREST-INCOME> 230,158
<OTHER-INCOME> (267,477)
<EXPENSES-NET> 644,222
<NET-INVESTMENT-INCOME> 1,935,748
<REALIZED-GAINS-CURRENT> 6,033,580
<APPREC-INCREASE-CURRENT> (11,860,323)
<NET-CHANGE-FROM-OPS> (3,890,995)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,865,334
<DISTRIBUTIONS-OF-GAINS> 6,033,580
<DISTRIBUTIONS-OTHER> 68,585
<NUMBER-OF-SHARES-SOLD> 446,055
<NUMBER-OF-SHARES-REDEEMED> 1,045,062
<SHARES-REINVESTED> 521,171
<NET-CHANGE-IN-ASSETS> (13,213,859)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 350,884
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 644,222
<AVERAGE-NET-ASSETS> 92,646,742
<PER-SHARE-NAV-BEGIN> 12.49
<PER-SHARE-NII> 0.25
<PER-SHARE-GAIN-APPREC> (0.765)
<PER-SHARE-DIVIDEND> (0.250)
<PER-SHARE-DISTRIBUTIONS> (0.765)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.90
<EXPENSE-RATIO> 0.98
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000925460
<NAME> STOCK PORTFOLIO
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 78,979,782
<INVESTMENTS-AT-VALUE> 85,303,341
<RECEIVABLES> 247,205
<ASSETS-OTHER> 14,967
<OTHER-ITEMS-ASSETS> 285
<TOTAL-ASSETS> 85,565,798
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 46,763
<TOTAL-LIABILITIES> 46,763
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 79,195,476
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6,323,559
<NET-ASSETS> 85,519,035
<DIVIDEND-INCOME> 1,049,185
<INTEREST-INCOME> 128,279
<OTHER-INCOME> 0
<EXPENSES-NET> 269,298
<NET-INVESTMENT-INCOME> 908,166
<REALIZED-GAINS-CURRENT> (2,035,741)
<APPREC-INCREASE-CURRENT> (1,601,217)
<NET-CHANGE-FROM-OPS> (2,728,792)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
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<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0.73
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
