<PAGE>
To Our Shareholders
During the six months that ended June 30, 1995, shareholders of Eaton Vance Tax
Free Reserves received $0.018 per share in income dividends, all of which was
free of Federal income tax. Based on the last monthly dividend paid and the
Funds $1.00 share price, its distribution rate was 3.39 percent on June 30,
1995. To equal that rate, a shareholder in the 36 percent Federal income tax
bracket would need a yield of 5.30 percent from a taxable investment.
Of course, an investment in the Fund is neither insured nor guaranteed by the
U.S. government and there can be no assurance that the Fund will be able to
maintain a stable net asset value of $1.00 per share.
The Federal Reserve, in an effort to offset inflationary pressures, raised the
federal funds rate seven times between February 1994 and February 1995. In
response, the nations rate of economic growth slowed considerably, with the
Gross Domestic Product growing at a moderate 2.7 percent during the first
quarter of 1995, compared with 4.1 and 5.0 percent in the third and fourth
quarters of 1994, respectively.
In early July the Fed, fearing that the economy had slowed too much, reversed
itself, lowering the target federal funds rate by a quarter of a percentage
point.
The key question is whether the economy will achieve a soft landing or will move
into recession. If the economy weakens more than the Fed anticipated, short-term
rates could be lowered further. However, if the economy starts to pick up once
again, further rate reductions may not be needed.
The Funds performance reflects these changes in Fed policy. Shareholders can be
assured that the Fund will invest, as it has in the past, only in liquid
short-term investments of high quality.
Over time, increasing taxes have caused many investors to gravitate to tax free
money market funds. Now, with Washington discussing a variety of ways to finance
the activities of government, taxpayers must not only focus on burdensome tax
levels but also on the uncertainty of future taxation practices. As they
contemplate the future, prudent investors may find that the Fund continues to
help them alleviate some of these burdens.
Sincerely,
[Photo of Thomas J. Fetter]
/s/ Thomas J. Fetter
Thomas J. Fetter
President
August 4, 1995
Text Box: "OVER TIME, INCREASING TAXES HAVE CAUSED MANY INVESTORS TO GRAVITATE
TO TAX FREE MONEY MARKET FUNDS."
<PAGE>
------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
JUNE 30, 1995
(UNAUDITED)
<TABLE>
-------------------------------------------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS - 98.3%
-------------------------------------------------------------------------------------------------------------------
RATINGS (UNAUDITED) PRINCIPAL
--------------------------------- AMOUNT
MOODY'S/S&P MOODY'S/S&P (000
SHORT-TERM LONG-TERM OMITTED) SECURITY VALUE
-------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <S> <C>
VARIABLE RATE DEMAND OBLIGATIONS - 76.3%
NR/A1+ NR/AA $1,000 Adams County, Colorado Floating Rate Weekly Demand
Industrial Development Revenue Bonds, (City View
Park Project), Letter of Credit: Barclays Bank $ 1,000,000
VMIG1/NR Aa3/NR 1,000 City of Biddeford, Maine Variable Rate Demand
Resource Recovery Revenue Bonds, (Maine Energy
Recovery Company Project Series 1985), Letter of
Credit: Bank of America 1,000,000
P1/A Aa2/NR 1,050 Billings Montana Series 1984 Adjustable Tender
Industrial Development Revenue Bonds, (CFS
Continental Project) Letter of Credit: Toronto
Dominion Bank 1,050,000
VMIG1/A1+ Aaa/AAA 1,700 Clark County, Nevada Airport System Refunding
Revenue Bonds, Series 1993A, Municipal Bond
Investors Assurance Corporation, Letter of Credit:
Industrial Bank of Japan, Limited 1,700,000
VMIG1/A1+ Aa2/AA+ 1,000 Clark County Nevada Airport Improvement Revenues
(Subordinated Lien) Letter of Credit: Toronto
Dominion Bank 1,000,000
VMIG1/A1+ Aaa/AAA 1,000 Clarksville Tennessee Public Building Authority
Pooled Financing Revenue Bonds MBIA Insured,
Standby Purchase Agreement: Credit Suisse 1,000,000
VMIG1/A1+ Aaa/AAA 1,345 Clayton County Georgia Housing Authority Multifamily
Housing Revenues (Ten Oaks Apartments Project) FSA
Insured, Sumitomo Trust & Bank Letter of Credit 1,345,000
VMIG1/A1+ Aaa/AAA 1,500 Colorado Student Obligation Bond Authority, Student
Loan Revenue Bonds, 1993 Series C-1, Letter of
Credit: Student Loan Marketing Association 1,500,000
VMIG1/A1+ Aa3/AA- 1,500 State of Connecticut Special Assessment Unemployment
Compensation Advance Fund Revenue Bonds 1993
Series B (Connecticut Unemployment Revenue Bonds
("CURB")) Letter of Credit: Mitsubishi Bank,
Limited 1,500,000
VMIG1/A1+ Aa3/AA- 750 Dade County, Florida Special Assessment Revenue
Bonds, (Various Purpose Improvement Projects),
Series 1990A, Financial Security Assurance Inc.,
Letter of Credit: Sanwa Bank, Limited 750,000
VMIG1/NR Aa3/NR 1,035 Dade County Industrial Development Authority,
FLorida Industrial Development Revenue Bonds,
(Stephen M. Greene Project), Series 1989A, Letter
of Credit: Sun Bank, Miami 1,035,000
NR/A1+ NR/AAA 2,000 Dakota County Minnesota Housing & Redevelopment
Authority Multifamily Mortgage Revenues (Southview
Project) Guaranty Agreement: Northwestern Mutual
Life 2,000,000
NR/A1+ NR/AA- 1,000 Housing Authority of the County of DeKalb, Georgia
Guaranteed Multifamily Housing Revenue Bonds,
(Wood Hills Apartment Project), Series 1985P,
Letter of Credit: Bank of Montreal 1,000,000
VMIG1/A1+ Aa1/AAA 1,300 DeSoto Parish Louisiana Pollution Control Revenue
Bonds (Central Louisiana Electric) Letter of
Credit: Swiss Bank 1,300,000
NR/A1+ NR/AA+ 1,100 Development Authority of Fulton County Georgia
Revenue Bonds, (American National Red Cross
Project), Series 1990, Letter of Credit: Wachovia
Bank 1,100,000
NR/A1+ NR/AA 500 Indiana Employment Development Commission Industrial
Development Revenue Bonds, (Miles Lab), Series
1984B, Letter of Credit: Barclays Bank PLC 500,000
VMIG1/NR Aa2/NR 1,150 Jefferson Parish Louisiana Industrial Development
Board Industrial Revenue Refunding Bonds (George
J. Ackel Sr. Project) Letter of Credit: Barclays
Bank 1,150,000
VMIG1/A1+ Aa/AA 1,600 State of Kansas Department of Transportation
Adjustable Tender Highway Revenue Bonds, Series
1994B 1,600,000
NR/A1+ NR/AA- 1,000 Village of Lisle, Illinois Multi-Family Housing
Revenue Bonds (Ashley of Lisle Project), Letter of
Credit: Algemene Bank Nederland 1,000,000
VMIG1/NR Aa3/NR 1,000 Marietta Georgia Housing Authority Multifamily
Housing Revenues (Franklin Walk Apartments
Project) Letter of Credit: Bankers Trust Company 1,000,000
VMIG1/NR Aaa/AAA 1,000 Metropolitan Atlanta Rapid Transit Authority Revenue
Bonds. Tender Option: Bankers Trust Company 1,000,000
P1/NR Aa3/NR 1,170 Metropolitan Government of Nashville & Davidson
Counties Tennessee Industrial Development Board
Refunding Revenue Bonds (Dixie Graphics
Inc.Project) Letter of Credit: Third National Bank 1,170,000
VMIG1/NR Aaa/NR 1,500 Minnesota Higher Education Coordination Board,
Supplemental Student Loan Program Variable Rate
Refunding Revenue Bonds, Series 1994A (Non-AMT),
Letter of Credit: Norwest Bank 1,500,000
VMIG1/A1+ Aaa/AAA 1,100 Montgomery County Higher Education and Health
Authority Variable Rate Demand Hospital Revenue
Bonds, Series 1988 AMBAC Insurance, Liquidity:
Swiss Bank 1,100,000
NR/NR NR/NR 1,000 Pell Alabama Industrial Development Board Industrial
Development Revenues (General Signal Corporation)
Letter of Credit: Wachovia Bank, Atlanta Georgia 1,000,000
VMIG1/NR Aa1/NR 1,000 Industrial Development Authority of the County of
Pima, Industrial Development Revenue Refunding
Bonds (Tuscon Retirement Center Project) Series
1988 Letter of Credit: Swiss Bank Corporation 1,000,000
VMIG1/A2 Aa2/A- 500 The Industrial Development Authority of The County
of Pima (Arizona), Floating Rate Monthly Demand
Industrial Revenue Bonds, 1982 Series A, (Tucson
Electric Power Company Projects), Letter of
Credit: Barclays Bank International, Limited 500,000
MIG1/A1+ NR/AA- 1,170 Putnam County Florida Development Authority
Pollution Control Revenue Bonds Series S (Seminole
Electric) Guaranty Agreement: Cooperative Finance
Corporation 1,170,000
MIG1/A1+ NR/AA- 1,100 Putnam County Florida Development Authority
Pollution Control Revenue Bonds Series S (Seminole
Electric) Guaranty Agreement: Cooperative Finance
Corporation 1,100,000
NR/A1+ NR/AA- 1,700 Regional Transportation District, (Colorado) Weekly
Adjustable/Fixed Rate Special Passenger Fare
Revenue Bonds, Series 1989A, Letter of Credit:
Banque Nationale de Paris 1,700,000
VMIG1/A1+ Aa2/AA 905 Washington State Public Power System Nuclear Project
Number 3 Adjustable Rate Revenue Bonds Series 3A-3
Letter of Credit: National Westminster Bank 905,000
----------
TOTAL VARIABLE DEMAND OBLIGATIONS $35,675,000
----------
GENERAL OBLIGATION NOTES/BONDS - 16.2%
MIG1/Sp1+ NR/NR $1,000 Indiana Bond Bank Advanced Funding Program Notes
Series 1995A-1 $ 1,000,160
NR/Sp1+ NR/NR 1,000 The Indianapolis Local Public Improvement Bond Bank
Notes, Series F, 5.25% 7/14/95 1,000,140
NR/NR Aaa/AAA 1,000 Iowa School Corporation Warrant Certificates Series
95-96A. 4.75% 6/28/96 Capital Guaranty Insurance
Corporation Insured 1,008,590
NR/NR Aaa/AAA 1,000 Iowa School Corporation Warrant Certificates Series
94-95B. 5.75% 2/01/96 Capital Guaranty Insurance
Corporation Insured 1,004,210
NR/NR Aaa/AA+ 1,500 State of Tennessee General Obligations Series A 1,524,855
NR/NR Aa/AA 2,000 Virginia State Public Schools Authority School
Financing Bonds Series 1992A 2,019,260
----------
TOTAL GENERAL OBLIGATION NOTES/BONDS $ 7,557,215
----------
PUT BONDS - 2.1%
NR/SP1+ NR/NR $1,000 Arapahoe County, Colorado Capital Improvement Trust
Fund Highway Revenue Bonds, (E-470 Project) Series D
4.45% 8/31/95 Letter of Credit: Union Bank of
Switzerland $ 1,000,000
----------
TOTAL PUT BONDS $ 1,000,000
----------
REVENUE NOTES/BONDS - 1.1%
NR/NR Aaa/AAA $ 500 Metropolitan Atlanta Rapid Transit Authority
(Georgia), Sales Tax Revenue Bonds, Refunding
Series 8.50% 7/01/95 $ 510,000
----------
TOTAL REVENUE NOTES/BONDS $ 510,000
----------
TAX-EXEMPT COMMERCIAL PAPER - 2.6%
P1/A1+ NR/NR $1,200 Jacksonville (Florida) Electric Authority Electric
System Tax-Exempt Commercial Paper Notes 3.85%
8/11/95 Series D-1. Standby Purchase Agreement:
Credit Suisse $ 1,200,000
----------
TOTAL TAX-EXEMPT COMMERCIAL PAPER $ 1,200,000
----------
TOTAL INVESTMENTS, AT AMORTIZED COST - 98.3% $45,942,215<F1>
OTHER ASSETS, LESS LIABILITIES - 1.7% 808,946
----------
TOTAL NET ASSETS - 100% $46,751,161
===========
<FN>
<F1> Federal tax cost basis. At June 30, 1995, the concentration of the Fund's investments in the various states, determined as
a percentage of total investments, is as follows:
Colorado 11%
Georgia 10%
Others representing less than 8% individually 79%
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
------------------------------------------------------------------------------
June 30, 1995 (Unaudited)
------------------------------------------------------------------------------
ASSETS:
Investments, at amortized cost and value (Note 1A) $45,942,215
Cash 1,055,464
Receivable for Trust shares sold 179,287
Interest receivable 378,953
Receivable from the Investment Adviser 6,012
-----------
Total assets $47,561,931
LIABILITIES:
Dividend payable $102,120
Payable for Trust shares redeemed 696,686
Accrued expenses 11,964
--------
Total liabilities 810,770
-----------
NET ASSETS for 46,771,469 shares outstanding (Note 4) $46,751,161
===========
SOURCES OF NET ASSETS:
Paid-in capital $46,771,469
Accumulated net realized loss on investments
(computed on the basis of identified cost) (20,308)
-----------
Total $46,751,161
===========
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE
PER SHARE
(net assets divided by shares outstanding) $1.00
=====
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENT OF OPERATIONS
------------------------------------------------------------------------------
For the Six Months Ended June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------
Investment Income $ 967,132
Expenses:
Investment adviser fee (Note 3) $125,402
Trustees' compensation (Note 3) 483
Interest expense 19,819
Printing and postage 13,635
Registration costs 12,062
Legal and accounting services 9,448
Transfer and dividend disbursing agent
fees 3,808
Miscellaneous 7,275
--------
Total expenses $191,932
Deduct --
Preliminary reduction of investment
adviser fee (Note 3) $125,402
Preliminary allocation of expenses to
investment advisor (Note 3) 6,012
--------
Total 131,414
--------
Net expenses 60,518
----------
Net income $ 906,614
==========
------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31,
(UNAUDITED) 1994
------------- -------------
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net income $ 906,614 $ 928,987
Net realized loss on investments -- (20,308)
Dividends paid to shareholders from net income
(Note 2) (906,614) (928,987)
------------ ------------
Increase (decrease) in net assets resulting
from operations $ -- $ (20,308)
------------ ------------
FROM TRUST SHARE (PRINCIPAL) TRANSACTIONS AT
NET ASSET VALUE OF $1.00 PER SHARE (Note 4):
Proceeds from sale of shares $ 93,325,739 $135,383,669
Net asset value of shares issued to
shareholders in payment of dividends 224,445 240,791
Cost of shares redeemed (75,819,568) (166,830,592)
------------ ------------
Increase (decrease) in net assets from Trust
share transactions $ 17,730,616 $(31,206,132)
------------ ------------
Net increase (decrease) in net assets $ 17,730,616 $(31,226,440)
NET ASSETS:
Beginning of period 29,020,545 60,246,985
------------ ------------
End of period $ 46,751,161 $ 29,020,545
============ ============
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
-----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1995 -----------------------------------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991<F1> 1990<F1>
--------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, beginning
of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
INCOME FROM OPERATIONS:
Net investment income $ 0.018187 $ 0.023548 $ 0.018399 $ 0.023468 $ 0.038797 $ 0.051929
---------- ---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS:
From net investment income $(0.018187) $(0.023548) $(0.018399) $(0.023468) $(0.038797) $(0.051929)
---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== =====
TOTAL RETURN<F4> 1.82% 2.36% 1.86% 2.36% 3.92% 5.30%
RATIOS/SUPPLEMENTAL DATA:*
Net assets, end of period
(000's omitted) $46,751 $29,021 $60,247 $44,337 $47,140 $53,753
Interest expense to average
net assets 0.08%<F2> 0.07% 0.03% 0.06% 0.09% 0.05%
Net other expenses to average
net assets 0.16%<F2> 0.47% 0.62% 0.53% 0.49% 0.70%
Net investment income to average
net assets 3.65% 2.27% 1.82% 2.34% 3.92% 5.19%
*During six months ended June 30, 1995 and each of the years in the five year
period ended December 31, 1994, the expenses related to the operations of the
Trust were reduced either by a reduction of the investment adviser fee, an
allocation of expenses to the Investment Adviser, or both. Had such actions not
been undertaken, net investment income per share and the ratios would have been
as follows:
<PAGE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1995 -----------------------------------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991<F1> 1990<F1>
--------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
PER SHARE $ 0.015551 $ 0.018948 $ 0.016668 $ 0.020133 $ 0.034647 $ 0.050052
========== ========== ========== ========== ========== ==========
RATIOS (as a percentage of
average net assets):
Other expenses 0.77%<F2> 0.87% 0.82% 0.92% 0.91% 0.85%
========== ========== ========== ========== ========== ==========
Net investment income 3.12%<F2> 1.88% 1.65% 2.01% 3.50% 5.04%
========== ========== ========== ========== ========== ==========
From time to time it has been necessary for the Trust to borrow from banks as a temporary measure to facilitate the orderly sale
of portfolio securities to accommodate redemption requests. The following table summarizes such temporary borrowings.
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED AMOUNT OF DEBT OUTSTANDING AVERAGE DAILY BALANCE OF AVERAGE WEEKLY BALANCE OF AVERAGE AMOUNT OF DEBT
DECEMBER 31, AT END OF YEAR DEBT OUTSTANDING DURING YEAR SHARES OUTSTANDING DURING YEAR PER SHARE DURING YEAR
-----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
1990<F1> $ -- $192,000 31,243,924 $0.006
1991<F1> -- 379,000 31,686,707 0.012
1992 -- 367,000 38,904,763 0.009
1993 2,428,000 285,000 48,697,998 0.006
1994 6,117,000 440,145 40,463,382 0.011
1995<F3> -- 469,850 50,392,498 0.009
<FN>
<F1> Audited by the Trust's previous auditors.
<F2> Annualized.
<F3> Six months ended June 30, 1995.
<F4> 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 record date.
</TABLE>
The accompanying notes are an integral part of the financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(1) SIGNIFICANT ACCOUNTING POLICIES
The Trust 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 Trust in
the preparation of its financial statements. The policies are in conformity with
generally accepted accounting principles.
A. INVESTMENT VALUATIONS -- The Trustees have determined that the best method
currently available for valuing portfolio investments is amortized cost. The
Trust's use of the amortized cost method to value its portfolio investments is
subject to the Trust's compliance with certain conditions as specified under
Rule 2a-7 of the Investment Company Act of 1940.
B. INTEREST INCOME -- Interest income consists of interest accrued, less the
amortization of any premium, on the investments of the Trust, accrued ratably to
the date of maturity.
C. FEDERAL TAXES -- The Trust's policy is to comply with the provisions of the
Internal Revenue Code available to regulated investment companies and to
distribute to shareholders each year all of its net income, including any net
realized gain on investments. Accordingly, no provision for federal income or
excise tax is necessary. At December 31, 1994, the Trust, for federal income tax
purposes, had a capital loss carryover of $20,308, which will reduce the Trust's
taxable income arising from future net realized gain on investment transactions,
if any, to the extent permitted by the Internal Revenue Code, and thus will
reduce the amount of the distributions to shareholders which would otherwise be
necessary to relieve the Trust of any liability for federal income or excise
tax. Such capital loss carryover will expire on December 31, 2002. Dividends
paid by the Trust from net interest earned on tax-exempt municipal bonds are not
includable by shareholders as gross income for federal income tax purposes
because the Trust intends to meet certain requirements of the Internal Revenue
Code applicable to regulated investment companies which will enable the Trust to
pay exempt-interest dividends. The portion of such interest, if any, earned on
private activity bonds issued after August 7, 1986, may be considered a tax
preference item for shareholders.
D. OTHER -- Investment transactions are accounted for on the date the
investments are purchased or sold, or the date that they mature.
E. INTERIM FINANCIAL INFORMATION -- The interim financial statements relating to
June 30, 1995 and for the period then ended have not been audited by independent
certified public accountants, but in the opinion of the Trust's management,
reflect all adjustments, consisting of normal recurring adjustments, necessary
for the fair presentation of the financial statements.
------------------------------------------------------------------------------
(2) DIVIDENDS
The net income of the Trust is determined daily, and all of the net income so
determined is declared as a dividend to shareholders of record at the time of
declaration. Such dividends are paid monthly. Dividends are distributed in the
form of additional shares of the Trust or, at the election of the shareholder,
in cash.
<PAGE>
------------------------------------------------------------------------------
(3) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The investment adviser fee was earned by Eaton Vance Management (EVM) as
compensation for management, investment advisory, and other services rendered to
the Trust and is computed at the monthly rate of 1/24 of 1% ( 1/2 of 1% per
annum) of the Trust's average monthly net assets. To enhance the net income of
the Trust, EVM made a preliminary reduction of its fee in the amount of $125,402
and $6,012 of the expenses related to the operation of the Fund were allocated,
on a preliminary basis, to EVM during the six months ended June 30, 1995. Except
as to Trustees of the Trust who are not members of EVM's organization, officers
and Trustees receive remuneration for their services to the Trust out of such
investment adviser fee. The custodian fee was paid to Investors Bank & Trust
Company (IBT), an affiliate of EVM, for its services as custodian to the Trust.
Pursuant to the custodian agreement, IBT receives a fee reduced by credits which
are determined based on the average daily cash balances the Trust maintains with
IBT. Certain of the officers and Trustees of the Trust are officers and
directors/trustees of the above organizations.
------------------------------------------------------------------------------
(4) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
------------------------------------------------------------------------------
(5) LINE OF CREDIT
The Trust 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 Trust 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 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 the $100 million discretionary facility is allocated among the
participating funds at the end of each quarter. The average daily loan balance
for the six months ended June 30, 1995 was $469,850, and the average interest
rate was 7.58%.
------------------------------------------------------------------------------
(6) PURCHASES AND SALES OF INVESTMENTS
The Trust invests primarily in debt securities. The ability of the issuers of
the debt securities held by the Trust to meet their obligations may be affected
by economic developments in a specific industry or municipality. Purchases and
sales (including maturities) of investments aggregated $50,508,285 and
$38,020,000, respectively.
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT MANAGEMENT
<S> <C> <C>
EATON VANCE OFFICERS TRUSTEES
TAX FREE RESERVES THOMAS J. FETTER DONALD R. DWIGHT
24 Federal Street President President, Dwight Partners, Inc.
Boston, MA 02110 WILLIAM H. AHERN, JR. Chairman, Newspapers of New
Vice President and England, Inc.
Portfolio Manager JAMES B. HAWKES
H. DAY BRIGHAM, JR. Executive Vice President,
Vice President, Trustee Eaton Vance Management
JAMES L. O'CONNOR SAMUEL L. HAYES, III
Treasurer Jacob H. Schiff Professor of
THOMAS OTIS Investment Banking,
Secretary Harvard University Graduate
School of 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
</TABLE>
<PAGE>
INVESTMENT ADVISER
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 482-8260
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
EATON VANCE
TAX FREE [LOGO]
RESERVES
SEMI-ANNUAL
SHAREHOLDER REPORT
JUNE 30, 1995
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its distribution plan,
sales charges and expenses. Please read the prospectus carefully before you
invest or send money.
EATON VANCE TAX FREE RESERVES
24 FEDERAL STREET
BOSTON, MA 02110
T-TRSRC
