<PAGE>
THE
EXCHANGE FUND
OF BOSTON
An Eaton Vance
Exchange Fund
Semi-Annual Report
December 31, 1995
<PAGE>
- -------------------------------------------------------------------------------
TO SHAREHOLDERS
EXCHANGE FUND OF BOSTON HAD A TOTAL RETURN OF 11.4% DURING THE SIX MONTHS ENDED
DECEMBER 31, 1995. That return represented a rise in net asset value per share
to $264.00 from $238.23, and the reinvestment of $1.35 per share in dividends
and $0.036 per share in capital gain distributions. By comparison, the S&P 500
Index, an unmanaged index of large capitalization common stocks, had a return of
14.5% during the same period.
SHAREHOLDERS RECEIVED DIVIDENDS TOTALING $1.35 PER SHARE AND CAPITAL GAIN
DISTRIBUTIONS OF $0.036 PER SHARE DURING THE SIX MONTHS ENDED DECEMBER 31, 1995.
IN DRAMATIC FASHION, THE MARKET CONTINUED TO BOUNCE BACK FROM THE WEAK
CONDITIONS OF 1994 TO POST EXCEPTIONALLY FAVORABLE RESULTS. The market's
behavior was a positive response to an economic environment of slow but positive
growth, low inflation, and increased optimism about the U.S. government's
ability to address its structural budgetary problems. Stocks also benefited from
exceptionally strong earnings momentum, driven in part by cost-cutting and
restructuring activities.
CONCERNED ABOUT A SLOWING ECONOMY, THE FEDERAL RESERVE IN JULY LOWERED ITS
TARGET RATE BY A QUARTER OF A PERCENTAGE POINT, THE FIRST DOWNWARD CHANGE SINCE
SEPTEMBER 1992. Another quarter-point decrease was announced in December. The
stock market reacted positively to both these changes, which should help the
economy continue to advance slowly but steadily.
THE SECOND HALF OF 1995 WAS A PERIOD OF STRONG PERFORMANCE FOR A WIDE RANGE OF
STOCKS. Although the performance of most technology stocks fell off after an
exceptionally strong first half, price performance continued in the second half
for a number of market sectors, including healthcare, financial services,
utilities, capital goods and consumer non-durables. Among the Fund's largest
holdings, the best performers in the second half of 1995 were Astra AB Series A,
up 29.7%, Johnson & Johnson, up 26.9%, Dun & Bradstreet Corp., up 23.3% and
PepsiCo, Inc. up 22.8%. Large capitalization stocks led the market surge.
[Photo of Landon T. Clay]
LOOKING FORWARD, IT IS HIGHLY UNLIKELY THAT THE STOCK MARKET WILL BE ABLE TO
SUSTAIN THE LEVEL OF INVESTMENT RETURNS ACHIEVED IN 1995. The most likely
scenario for the U.S. economy in 1996 seems to be continued slow growth with low
inflation. Coupled with continued progress from Washington in tackling
budgetary deficits, this should set the stage for continued steady or lower
interest rates. Stocks would benefit from this environment, but seem unlikely to
get widespread support from the rising earnings expectations and positive
earnings surprises such as were experienced in 1995.
"...OVER THE LONG-TERM, INVESTMENTS THAT FOCUS ON A REPRESENTATIVE PORTFOLIO OF
HIGH-QUALITY COMMON STOCKS ARE LIKELY TO DELIVER SUPERIOR PERFORMANCE."
WITH VALUATIONS FOR STOCKS ALREADY AT RELATIVELY HIGH LEVELS ON MOST MEASURES,
THIS SUGGESTS A SOMEWHAT MORE CAUTIOUS OUTLOOK FOR THE STOCK MARKET IN 1996.
However, over the long term, investments that focus on a representative
portfolio of high-quality common stocks are likely to deliver superior
performance. Because this remains the strategy of Exchange Fund of Boston, I
have confidence that the Fund will continue to participate in the growth of the
economy.
Sincerely,
/s/ Landon T. Clay
Landon T. Clay
President
February 21, 1996
<PAGE>
THE EXCHANGE FUND
OF BOSTON, INC.
DECEMBER 31, 1995
(UNAUDITED)
INVESTMENT CHANGES
SIX MONTHS ENDED DECEMBER 31, 1995
- --------------------------------------------------------------------------------
Shares Owned
INCREASES 6/30/95 12/31/95
- ------------------------------------------------------------------------------
First Chicago NBD Corp.*(1) -- 43,007
- ------------------------------------------------------------------------------
DECREASES*
- ------------------------------------------------------------------------------
Bausch & Lomb, Inc. 59,320 45,160
- ------------------------------------------------------------------------------
Dun & Bradstreet Corp. 36,158 32,478
- ------------------------------------------------------------------------------
Novell Inc. 80,000 71,000
- ------------------------------------------------------------------------------
Potlatch Corp. 10,830 7,960
- ------------------------------------------------------------------------------
* Includes investments paid in kind on redemptions.
(1) Received in exchange for 23,761 shares of First Chicago Corp. upon the
merger of First Chicago Corp. with NBD Bancorp Inc.
<PAGE>
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
(UNAUDITED)
NAME OF COMPANY SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS - 99.6%
- --------------------------------------------------------------------------------
BANKS - 4.0%
BankAmerica Corp. 20,812 $ 1,347,577
First Chicago NBD Corp. 43,007 1,698,773
-----------
$ 3,046,350
-----------
BEVERAGES - 5.7%
Anheuser-Busch Co., Inc. 26,310 $ 1,759,481
PepsiCo, Inc. 45,900 2,564,663
-----------
$ 4,324,144
-----------
BROADCAST & CABLE - .9%
Cox Communications Inc. Class A 34,388 $ 670,566
-----------
BUSINESS SERVICES - MISCELLANEOUS - 2.7%
Ecolab Inc. 69,800 $ 2,094,000
-----------
COMMUNICATIONS EQUIPMENT - 2.0%
Northern Telecom Ltd. 35,870 $ 1,542,410
-----------
COMPUTERS & BUSINESS EQUIPMENT - 2.6%
Digital Equipment Corp.* 10,195 $ 653,754
International Business Machines Corp. 14,267 1,308,997
-----------
$ 1,962,751
-----------
COMPUTER SOFTWARE - 1.3%
Novell Inc.* 71,000 $ 1,011,750
-----------
CHEMICALS - 1.9%
CBI Industries, Inc. 45,126 $ 1,483,517
-----------
DRUGS - 8.6%
ASTRA AB Series A 90,000 $ 3,598,794
Genentech Inc.* 17,500 927,500
Merck & Co., Inc. 30,390 1,998,142
-----------
$ 6,524,436
-----------
ELECTRONICS - INSTRUMENTS - 2.8%
Hewlett-Packard Co. 25,600 $ 2,144,000
-----------
ELECTRONICS - SEMICONDUCTORS - 5.4%
Intel Corp. 72,700 $ 4,125,725
-----------
PAPER & FOREST PRODUCTS - 3.1%
Potlatch Corp. 7,960 $ 318,400
Union Camp Corp. 43,059 2,050,685
-----------
$ 2,369,085
-----------
HOUSEHOLD PRODUCTS - 6.2%
Procter & Gamble 32,800 $ 2,722,400
Rubbermaid Inc. 78,920 2,012,460
-----------
$ 4,734,860
-----------
INFORMATION SERVICES - 6.2%
Dun & Bradstreet Corp. 32,478 $ 2,102,950
Reuters Holdings PLC 48,000 2,646,000
-----------
$ 4,748,950
-----------
INDUSTRIAL EQUIPMENT - 4.1%
Tecumseh Products Co. Class A 60,720 $ 3,142,260
-----------
INSURANCE - 11.4%
General Re Corp. 28,210 $ 4,372,550
St. Paul Companies, Inc. 52,820 2,938,113
Torchmark Corp. 31,425 1,421,981
-----------
$ 8,732,644
-----------
MEDICAL PRODUCTS - 9.1%
Bausch & Lomb, Inc. 45,160 $ 1,789,465
Johnson & Johnson 42,395 3,630,072
Sofamor Danek Group, Inc.* 55,000 1,560,625
-----------
$ 6,980,162
-----------
OIL & GAS - INTEGRATED - 5.9%
Chevron Corp. 15,600 $ 819,000
Mobil Corp. 17,750 1,988,000
Phillips Petroleum Co. 50,000 1,706,250
-----------
$ 4,513,250
-----------
OIL & GAS - SERVICES
AND EQUIPMENT - 1.9%
Schlumberger Ltd. 21,278 $ 1,473,502
-----------
PRINTING & BUSINESS FORMS - 1.4%
Harland (John H.) Co. 51,540 $ 1,075,897
-----------
PUBLISHING - 2.5%
Times-Mirror Co. Class A 55,890 $ 1,893,274
-----------
RESTAURANTS - 4.2%
McDonald's Corp. 71,100 $ 3,208,388
-----------
RETAIL - 4.6%
Home Depot, Inc. (The) 40,000 $ 1,915,000
Toys "R" Us, Inc.* 72,000 1,566,000
-----------
$ 3,481,000
-----------
TRANSPORTATION - 1.1%
Union Pacific Corp. 12,890 $ 850,740
-----------
TOTAL COMMON STOCKS
(Identified cost, $14,996,080) - 99.6% $76,133,661
OTHER ASSETS,
LESS LIABILITIES - 0.4% 281,337
-----------
NET ASSETS - 100% $76,414,998
===========
*Non-income producing security.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
- ------------------------------------------------------------------------------
December 31, 1995 (Unaudited)
- ------------------------------------------------------------------------------
ASSETS:
Investments, at value (Note 1A) (identified cost,
$14,996,080) $76,133,661
Cash 174,730
Dividends receivable 114,412
Other assets 4,579
-----------
Total assets $76,427,382
LIABILITIES:
Payable for capital stock redeemed $ 112
Payable to affiliates --
Directors' fees 1,396
Accrued expenses 10,876
-------
Total liabilities 12,384
-----------
NET ASSETS for 289,447 shares of capital stock
outstanding $76,414,998
===========
SOURCES OF NET ASSETS:
Accumulated net realized gain on investment
transactions (computed on the basis of
identified cost), less the excess of cost of
capital stock redeemed over proceeds from sales
of capital stock (including shares issued to
shareholders electing to receive payment of
distributions in capital stock) $25,423,222
Accumulated distributions of net realized gain on
investments as computed for federal income tax
purposes (2,207,653)
Unrealized appreciation of investments (computed
on the basis of identified cost) 61,138,023
Federal tax on undistributed net realized
long-term capital gain paid on behalf of
shareholders (8,108,363)
Undistributed net investment income 169,769
-----------
Total $76,414,998
===========
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
($76,414,998 / 289,447 shares of capital stock
outstanding) $264.00
=======
See notes to financial statements
<PAGE>
STATEMENT OF OPERATIONS
- ------------------------------------------------------------------------------
For the Six Months Ended December 31, 1995 (Unaudited)
- ------------------------------------------------------------------------------
INVESTMENT INCOME:
Income --
Dividends (net of foreign withholding tax of
$3,104) $ 681,710
Interest 3,133
-----------
Total income $ 684,843
Expenses --
Investment adviser fee (Note 4) $ 229,908
Compensation of Directors not members of the
Investment Adviser's organization 2,783
Custodian fee (Note 4) 24,758
Legal and accounting services 25,595
Printing and postage 9,388
Transfer and dividend disbursing agent fees 8,574
Miscellaneous 5,854
----------
Total expenses $ 306,860
Deduct --
Reduction of custodian fee (Note 4) 3,785
----------
Net expenses 303,075
-----------
Net investment income $ 381,768
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments, computed on the
basis of identified cost $ 786,485
Increase in unrealized appreciation of
investments 6,754,065
----------
Net realized and unrealized gain on
investments 7,540,550
-----------
Net increase in net assets from
operations $ 7,922,318
===========
See notes to financial statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1995 JUNE 30,
(UNAUDITED) 1995
----------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 381,768 $ 910,356
Net realized gain on investment
transactions 786,485 4,676,421
Increase in unrealized appreciation of
investments 6,754,065 9,359,550
----------- -----------
Increase in net assets from operations $ 7,922,318 $14,946,327
----------- -----------
Distributions to shareholders --
From net investment income $ (381,768) $ (937,712)
In excess of net investment income (10,950) --
From net realized gain on investments (10,439) --
----------- -----------
Total distributions to shareholders $ (403,157) $ (937,712)
----------- -----------
Net decrease from capital stock
transactions $ (943,273) $(4,879,463)
----------- -----------
Net increase in net assets $ 6,575,888 $ 9,129,152
NET ASSETS:
At beginning of year 69,839,110 60,709,958
----------- -----------
At end of year (including undistributed net
investment income of $169,769 and
$180,719, respectively) $76,414,998 $69,839,110
=========== ===========
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED JUNE 30,
DECEMBER 31, 1995 ------------------------------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, beginning of year $238.230 $191.790 $196.100 $187.690 $167.320 $164.980
-------- -------- -------- -------- -------- --------
INCOME FROM OPERATIONS:
Net investment income $ 1.320 $ 3.049 $ 2.805 $ 2.652 $ 2.666 $ 3.151
Net realized and unrealized
gain (loss) on investments 25.836 46.481 (4.365) 8.408 20.414 2.201
-------- -------- -------- -------- -------- --------
Total income (loss) from
operations $ 27.156 $ 49.530 $ (1.560) $ 11.060 $ 23.080 $ 5.341
-------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
From net investment income $ (1.320) $ (3.090) $ (2.750) $ (2.650) $ (2.710) $ (3.000)
In excess of net investment
income (0.030) -- -- -- -- --
From net realized gain on
investments (0.036) -- -- -- -- --
-------- -------- -------- -------- -------- --------
Total distributions $ (1.386) $ (3.090) $ (2.750) $ (2.650) $ (2.710) $ (3.000)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, end of year $264.000 $238.230 $191.790 $196.100 $187.690 $167.320
======== ======== ======== ======== ======== ========
TOTAL RETURN(1) 11.40% 26.01% (0.86%) 5.87% 13.85% 3.35%
RATIOS/SUPPLEMENTAL DATA: (to
average daily net assets):
Net assets at end of period
(000's omitted) $ 76,415 $ 69,839 $ 60,710 $ 64,996 $ 65,788 $ 62,422
Expenses 0.83%+ 0.80% 0.79% 0.80% 0.81% 0.87%
Net investment income 1.03%+ 1.41% 1.38% 1.34% 1.44% 2.00%
PORTFOLIO TURNOVER RATE 0% 2% 8% 3% 7% 4%
(1) Total investment 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 payable date. Total return is not computed on an annualized basis.
+ Computed on an annualized basis.
</TABLE>
See notes to financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
- --------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940, as amended,
as a diversified, open-end, management investment company. The following is a
summary of significant accounting policies consistently followed by the Fund
in the preparation of its financial statements. The policies are in conformity
with generally accepted accounting principles.
A. INVESTMENT VALUATIONS -- Investments listed on security exchanges or in the
NASDAQ National Market are valued at closing sale prices. Listed or unlisted
investments for which closing sale prices are not available are valued at
closing bid prices. Short-term obligations, maturing in 60 days or less, are
valued at amortized cost, which approximates value.
B. FEDERAL TAXES -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders each year all of its taxable income from dividends,
interest and net realized short-term capital gain. Accordingly, no provision
for federal income or excise tax is necessary. The Fund generally designates
as undistributed any taxable net realized long-term gain (but reserves the
right to distribute such gain in any year) and pays the federal tax thereon on
behalf of shareholders. Provision for such tax is recorded on the Fund's
records on the last business day of the Fund's fiscal year because the
Internal Revenue Code provides that such tax is allocated among shareholders
of record on that date.
C. EQUALIZATION -- Prior to July 1, 1994, the Fund followed the accounting
practice known as equalization by which a portion of the proceeds from the
sales and costs of reacquisitions of Fund shares was allocated to
undistributed net investment income. As of July 1, 1994, the Fund discontinued
the use of equalization. This change had no effect on the Fund's net assets,
net asset value per share, or its net increase in net assets from operations.
Discontinuing the use of equalization results in a simpler and more meaningful
financial statement presentation.
D. OTHER -- Investment transactions are accounted for on a trade date basis.
Dividend income and dividends to shareholders are recorded on the ex-
dividend date.
E. DISTRIBUTIONS -- Generally accepted accounting principles require that
differences in the recognition or classification of income between the
financial statements and tax earnings and profits which result in temporary
over-distributions for financial statement purposes, are classified as
distributions in excess of net investment income or accumulated net
realized gains.
F. INTERIM FINANCIAL INFORMATION -- The interim financial statements relating
to December 31, 1995 and for the period then ended have not been audited by
independent certified public accountants, but in the opinion of the Fund's
management, reflect all adjustments, consisting of normal recurring
adjustments, necessary for the fair presentation of the
financial statements.
- --------------------------------------------------------------------------------
(2) CAPITAL STOCK
At December 31, 1995, there were 3,297,273 shares of $1.00 par value capital
stock authorized. Transactions in capital stock were as follows:
SIX MONTHS ENDED
DECEMBER 31, 1995 YEAR ENDED
(UNAUDITED) JUNE 30, 1995
---------------------- ---------------------
SHARES AMOUNT SHARES AMOUNT
-------- ----------- -------- -----------
Redemptions (4,045) $(1,027,918) (24,267) $(5,068,363)
Issued to shareholders
electing to receive
payment of dividends
in capital stock 330 84,645 878 188,900
------ ----------- ------- -----------
Net decrease (3,715) $ (943,273) (23,389) $(4,879,463)
====== =========== ======= ===========
- --------------------------------------------------------------------------------
(3) INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than short-term obligations,
aggregated $5,346 and $189,531, respectively. In addition, investments having
an aggregate market value of $892,496 at dates of redemption were distributed
in payment for capital stock redeemed.
- --------------------------------------------------------------------------------
(4) INVESTMENT ADVISER FEE AND OTHER
TRANSACTIONS WITH AFFILIATES
The investment adviser fee, computed at the monthly rate of 5/96 of 1% (5/8
of 1% annually) of the Fund's average monthly net assets, was paid to Eaton
Vance Management (EVM) as compensation for management and investment advisory
services rendered to the Fund. Except as to directors of the Fund who are not
members of EVM's organization, officers and directors receive remuneration for
their services to the Fund out of such investment adviser fee. The custodian
fee was paid to Investors Bank & Trust Company (IBT), for its services as
custodian of the Fund. Prior to November 10, 1995, IBT was an affiliate of
EVM. Pursuant to the custodian agreement, IBT receives a fee reduced by
credits which are determined based on the average daily cash balances the Fund
maintains with IBT. All significant credit balances are reported as a
reduction of expenses in the Statement of Operations. Certain of the officers
and directors of the Fund are officers and directors/trustees of the above
organizations. Trustees of the Fund that are not affiliated with the
Investment Adviser may elect to defer receipt of all or a portion of their
annual fees in accordance with the terms of the Trustee Deferred Compensation
Plan. For the six months ended December 31, 1995, no significant amounts have
been deferred.
- --------------------------------------------------------------------------------
(5) LINE OF CREDIT
The Fund participates with other funds managed by EVM in a $120 million
unsecured line of credit agreement with a bank. The line of credit consists of
a $20 million committed facility and a $100 million discretionary facility.
Borrowings will be made by the Fund solely to facilitate the handling of
unusual and/or unanticipated short-term cash requirements. Interest is charged
to each fund based on its borrowings at an amount above either the bank's
adjusted daily certificate of deposit rate, a variable adjusted certificate of
deposit rate, or a federal funds effective rate. In addition, a fee computed
at an annual rate of 1/4 of 1% on the $20 million committed facility and on
the daily unused portion of $100 million discretionary facility is allocated
among the participating funds at the end of each quarter. The Fund did not
have any significant borrowings or allocated fees during the period.
- --------------------------------------------------------------------------------
(6) FEDERAL INCOME TAX BASIS OF INVESTMENTS
The cost and unrealized appreciation/depreciation in value of the investments
owned at December 31, 1995, as computed on a federal income tax basis, are as
follows:
Aggregate cost $14,996,080
===========
Gross unrealized appreciation $61,213,861
Gross unrealized depreciation 76,280
-----------
Net unrealized appreciation $61,137,581
===========
- --------------------------------------------------------------------------------
(7) SHAREHOLDER MEETING
Exchange Fund of Boston (the Fund) held a special meeting in lieu of the
annual shareholder meeting on September 21, 1995. On August 10, 1995, the
record date of the meeting, the Fund had 292,777.494 shares outstanding, of
which 186,040.165 shares were represented at the meeting. The votes cast at
the meeting were as follows:
Item 1: The election of Landon T. Clay, Donald R. Dwight, Samuel L. Hayes, III,
Norton H. Reamer, John L. Thorndike and Jack L. Treynor as Directors of
the Fund.
NUMBER OF SHARES
-----------------------------
NOMINEES FOR DIRECTOR AFFIRMATIVE WITHHELD
- --------------------- ----------- --------
Landon T. Clay 183,840.914 2,199.251
Donald R. Dwight 180,389,819 5,650.346
Samuel L. Hayes, III 180,389.819 5,650.346
Norton H. Reamer 180,389.819 5,650.346
John L. Thorndike 180,389.819 5,650.346
Jack L. Treynor 180,389.898 5,650.346
Item 2: The election of James L. O'Connor and Thomas Otis as Treasurer and
Clerk of the Fund, respectively.
NUMBER OF SHARES
-----------------------------
FOR TREASURER AFFIRMATIVE WITHHELD
- ------------- ----------- --------
James L. O'Connor 183,840,914 2,199.251
FOR CLERK
- ---------
Thomas Otis 183,840.914 2,199.251
Item 3: The ratification of the selection of Deloitte & Touche LLP as
independent certified public accountants to the Fund.
NUMBER OF SHARES
----------------
Affirmative 183,056.250
Against 55.018
Abstain 2,928.627
Item 4: The approval of an Amendment to the By-laws to change the Fund's
annual meeting date.
NUMBER OF SHARES
----------------
Affirmative 182,637.526
Against 0.000
Abstain 3,402.639
<PAGE>
- -----------------------------------------------------------------------------
INVESTMENT MANAGEMENT
THE EXCHANGE OFFICERS INDEPENDENT DIRECTORS
FUND OF LANDON T. CLAY DONALD R. DWIGHT
BOSTON, INC. President and Director President, Dwight
24 Federal Street JAMES B. HAWKES Partners, Inc.
Boston, MA 02110 Vice President Chairman, Newspapers of
THOMAS E. FAUST, JR. New England, Inc.
Vice President and SAMUEL L. HAYES, III
Portfolio Manager Jacob H. Schiff Professor
JAMES L. O'CONNOR of Investment Banking,
Treasurer Harvard University,
THOMAS OTIS Graduate School of
Clerk Business Administration
NORTON H. REAMER
President and Director,
United Asset Management
Corporation
JOHN L. THORNDIKE
Director, Fiduciary
Company Incorporated
JACK L. TREYNOR
Investment Adviser and
Consultant
- -----------------------------------------------------------------------------
THE EXCHANGE FUND TRANSFER AND DIVIDEND
OF BOSTON, INC. DISBURSING AGENT
24 Federal Street First Data Investor
Boston, MA 02110 Services Group, Inc.
INVESTMENT ADVISER BOS725
Eaton Vance Management P.O. Box 1559
24 Federal Street Boston, MA 02104
Boston, MA 02110 INDEPENDENT AUDITORS
CUSTODIAN Deloitte & Touche LLP
Investors Bank & Trust 125 Summer Street
Company Boston, MA 02110
89 South Street
P.O. Box 1537
Boston, MA 02205-1537
<PAGE>
THE EXCHANGE FUND
OF BOSTON, INC.
PERFORMANCE RESULTS+
- -------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
(STANDARDIZED SEC PERFORMANCE DATA
FOR THE PERIODS ENDED 12/31/95)
- -------------------------------------------------------------------------------
One year 32.5%
- -------------------------------------------------------------------------------
Five years 13.6%
- -------------------------------------------------------------------------------
Ten years 11.5%
- -------------------------------------------------------------------------------
Life of Fund (9/5/63) 9.8%
- -------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN
LIFE OF FUND
(9/5/63 TO 12/31/95)
- -------------------------------------------------------------------------------
Exchange Fund of Boston 1,932.0%
- -------------------------------------------------------------------------------
Dow Jones Industrial Average 2,552.7%
- -------------------------------------------------------------------------------
Standard & Poors 500 2,758.3%
- -------------------------------------------------------------------------------
+Past performance is no guarantee of future results. Investment returns and
principal will fluctuate so that an investors shares, when redeemed, may be
worth more or less than their original cost.
The Dow Jones Industrial Average and the Standard & Poors 500 are unmanaged
lists of common stocks.
This report must be preceded or accompanied by a prospectus which contains more
complete information on the Fund including its distribution plan, sales charges
and expenses. Please read the prospectus carefully before investing.
[LOGO]
EATON VANCE
The Boston Tradition
Funds offered through
Eaton Vance Distributors, Inc.
24 Federal Street, Boston, Massachusetts 02110
2/96
