[LOGO: DOOR]
Eaton Vance
Cash Management Fund
Eaton Vance
Liquid Assets Fund
Eaton Vance
Money Market Fund
Annual
Shareholder Report
December 31, 1996
To Shareholders
The U.S. economy in 1996 experienced a year of growth, low inflation,
and rising employment. The annualized rate of economic growth, as
measured by the U.S. Commerce Department's quarterly report of Gross
Domestic Product (GDP), was 2.0%, 4.7%, 2.1% and 4.7% for the four
quarters of the year, respectively. Inflation, as measured by the
Consumer Price Index (CPI), was 3.3% for the year as a whole (not
seasonally adjusted). Unemployment remained at a low level of 5.3%
in December.
The perennial issue for investors in money market securities is the
movement of short-term interest rates, which is, to a large extent,
influenced by the Federal Reserve Board's Fed Funds Rate. After
lowering the Fed Funds Rate twice in 1995 and a third time in
January, 1996, the Federal Reserve left it untouched for the
remainder of the year, unconvinced that the rate of inflation was
sufficient to warrant an increase.
With each meeting of the Federal Reserve Board during the year, bond
traders attempted to gauge whether the Fed Funds Rate would be raised
or lowered. As a result, short-term interest rates increased with
rumors of a tightening and decreased with talk of ease. Commercial
paper rates (60-day), shown in the graph following, averaged 5.31%
during 1996, and for most of the year ranged less than 0.25% on
either side of that mean level.
Fund shares are not guaranteed by the FDIC and are not deposits or
other obligations of, or guaranteed by, any depository institution.
Shares are subject to investment risks, including possible loss of
principal invested.
Commercial paper rates fluctuated
within a narrow range during 1996
[GRAPHIC OMITTED: WORM CHART]
1996 Sixty-Day Commercial Paper Rates
1/5/96 0.0543
1/12/96 0.0545
1/19/96 0.0539
1/26/96 0.0536
2/2/96 0.0518
2/9/96 0.0512
2/16/96 0.0518
2/23/96 0.0515
3/1/96 0.0517
3/8/96 0.0522
3/15/96 0.0523
3/22/96 0.0526
3/29/96 0.0525
4/5/96 0.0528
4/12/96 0.053
4/19/96 0.0527
4/26/96 0.0525
5/3/96 0.0527
5/10/96 0.0527
5/17/96 0.0528
5/24/96 0.0527
5/31/96 0.0528
6/7/96 0.0533
6/14/96 0.0536
6/21/96 0.0536
6/28/96 0.0538
7/5/96 0.0538
7/12/96 0.0538
7/19/96 0.0534
7/26/96 0.0536
8/2/96 0.0534
8/9/96 0.0528
8/16/96 0.0529
8/23/96 0.0526
8/30/96 0.0531
9/6/96 0.054
9/13/96 0.0537
9/20/96 0.0538
9/27/96 0.0532
10/4/96 0.0528
10/11/96 0.0527
10/18/96 0.0528
10/25/96 0.053
11/1/96 0.053
11/8/96 0.053
11/15/96 0.0532
11/22/96 0.053
11/29/96 0.0534
12/6/96 0.0535
12/13/96 0.0535
12/20/96 0.0542
12/27/96 0.0542
Source: Bloomberg, L.P.
An investment in one of the Portfolio's money market funds is neither
insured nor guaranteed by the U.S. Government, and there can be no
assurance that the Funds will be able to maintain a stable net asset
value of $1.00 per share. However, investors should be aware that the
Portfolio continues to invest only in securities of the highest
quality. Its holdings of commercial paper have been given the top
rating by at least two nationally recognized statistical rating
organizations. The Portfolio also invests in U.S. Government agency
securities, which are not rated officially but are considered to be
of higher quality. The Portfolio continues to maintain an average
maturity of between 30 and 40 days.
Sincerely,
/S/ M. Dozier Gardner
M. Dozier Gardner
President
February 7, 1997
EV Money Market Funds
Financial Statements
<TABLE>
<CAPTION>
Statements of Assets and Liabilities
December 31, 1996
- ------------------------------------------------------------------------------------------
Cash Liquid Money
Management Assets Market
Fund Fund Fund
----------- ----------- -----------
<S> <C> <C> <C>
Assets:
Investment in Portfolio, at value (Note 1A) $150,455,574 $19,999,422 $21,205,074
Receivable for Fund shares sold 4,282,321 -- 10,279,302
Receivable from Fund Administrator (Note 4) -- -- 8,579
Prepaid expenses -- 6,680 --
Deferred organization expenses (Note 1D) -- -- 22,596
------------ ----------- -----------
Total assets $154,737,895 $20,006,102 $31,515,551
------------ ----------- -----------
Liabilities:
Dividends payable $ 154,907 $ 15,893 $ 6,875
Payable for Fund shares redeemed 2,878,584 77,342 254,012
Trustees' fees payable 834 42 42
Accrued expenses 12,660 2,489 4,428
------------ ----------- -----------
Total liabilities 3,046,985 95,766 265,357
------------ ----------- -----------
Net Assets (represented by paid-in capital) $151,690,910 $19,910,336 $31,250,194
============ =========== ===========
Shares of Beneficial Interest
Outstanding (Note 3) 151,690,910 19,910,336 31,250,194
============ =========== ===========
Net Asset Value, Offering and Redemption
Price Per Share (net assets (divided by)
shares of beneficial interest outstanding) $1.00 $1.00 $1.00
===== ===== =====
The accompanying notes are an integral part of the financial statements
</TABLE>
<TABLE>
<CAPTION>
Statements of Operations
- ------------------------------------------------------------------------------------------
For the Year Ended December 31, 1996
- ------------------------------------------------------------------------------------------
Cash Liquid Money
Management Assets Market
Fund Fund Fund
----------- ----------- -----------
<S> <C> <C> <C>
Investment Income (Note 1B):
Interest income allocated from Portfolio $7,484,627 $1,354,390 $1,347,280
Expenses allocated from Portfolio (814,137) (147,567) (146,556)
---------- ---------- ----------
Total investment income $6,670,490 $1,206,823 $1,200,724
---------- ---------- ----------
Expenses --
Compensation of Trustees not members of the
Administrator's organization (Note 4) $ 3,225 $ 162 $ 161
Distribution and service fees (Note 5) -- 62,420 201,341
Transfer and dividend disbursing agent fees 96,223 18,890 15,663
Custodian fee 23,678 4,825 5,147
Printing and postage 34,743 11,132 9,969
Registration costs 22,642 19,405 35,852
Legal and accounting services 13,054 12,808 13,170
Amortization of organization expenses (Note 1D) -- -- 5,932
Miscellaneous 11,871 4,847 3,859
---------- ---------- ----------
Total expenses $ 205,436 $ 134,489 $ 291,094
Deduct allocation of expenses
to the Administrator (Note 4) -- -- 8,579
---------- ---------- ----------
Net expenses $ 205,436 $ 134,489 $ 282,515
---------- ---------- ----------
Net investment income $6,465,054 $1,072,334 $ 918,209
========== ========== ==========
The accompanying notes are an integral part of the financial statements
</TABLE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
- ------------------------------------------------------------------------------------------
For the Year Ended December 31, 1996
- ------------------------------------------------------------------------------------------
Cash Liquid Money
Management Assets Market
Fund Fund Fund
----------- ----------- -----------
<S> <C> <C> <C>
Increase (Decrease) in Net Assets:
From operations --
Net investment income $ 6,465,054 $ 1,072,334 $ 918,209
Distributions to shareholders from
net investment income (Note 2) (6,465,054) (1,072,334) (918,209)
Net increase (decrease) in net assets
from Fund share transactions (Note 3) (3,560,208) (14,115,928) 18,298,953
------------ ------------ -----------
Net increase (decrease) in net assets $ (3,560,208) $(14,115,928) $18,298,953
Net Assets:
At beginning of year 155,251,118 34,026,264 12,951,241
------------ ------------ -----------
At end of year $151,690,910 $ 19,910,336 $31,250,194
============ ============ ===========
- ------------------------------------------------------------------------------------------
For the Year Ended December 31, 1995
- ------------------------------------------------------------------------------------------
Cash Liquid Money
Management Assets Market
Fund Fund Fund*
----------- ----------- -----------
Increase (Decrease) in Net Assets:
From operations --
Net investment income $ 6,681,642 $ 2,743,890 $ 444,014
Distributions to shareholders
from net investment income (Note 2) (6,681,642) (2,743,890) (444,014)
Net increase (decrease) in net
assets from Fund share
transactions (Note 3) 43,629,610 (84,572,328) 12,951,241
------------ ------------ -----------
Net increase (decrease) in net assets $ 43,629,610 $(84,572,328) $12,951,241
Net Assets:
At beginning of year 111,621,508 118,598,592 --
------------ ------------ -----------
At end of year $155,251,118 $ 34,026,264 $12,951,241
============ ============ ===========
* For the period from the start of business, April 5, 1995, to December 31, 1995.
The accompanying notes are an integral part of the financial statements
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights
- --------------------------------------------------------------------------------------------
Cash Management Fund
- --------------------------------------------------------------------------------------------
Year Ended December 31,
----------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value -- Beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from operations:
Net investment income $ 0.0470 $ 0.0522 $ 0.0345 $ 0.0251 $ 0.0306
Less distributions:
From net investment income $(0.0470) $(0.0522) $(0.0345) $(0.0251) $(0.0306)
-------- -------- -------- -------- --------
Net asset value -- End of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return (2) 4.82% 5.35% 3.49% 2.54% 3.14%
Ratios/Supplemental Data:
Net assets, end of year
(000's omitted) $151,691 $155,251 $111,622 $112,200 $161,986
Expenses as a percentage
of average daily net assets (1) 0.74% 0.74% 0.84% 0.67% 0.76%
Net investment income as a percentage of
average daily net assets (1) 4.70% 5.22% 3.40% 2.51% 3.09%
(1) Includes the Fund's share of Cash Management Portfolio's income
and expenses for the years ended December 31, 1996 and 1995 and for
the period from May 2, 1994 to December 31, 1994.
(2) 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.
The accompanying notes are an integral part of the financial statements
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights
- --------------------------------------------------------------------------------------------------------
Liquid Assets Fund
- --------------------------------------------------------------------------------------------------------
Year Ended December 31, Year Ended March 31,
---------------------------------------- --------------------
1996 1995 1994 1993* 1993+ 1992+
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- --------
Income from operations:
Net investment income $ 0.0432 $ 0.0505 $ 0.0328 $ 0.0113 $ 0.0217 $ 0.0415
Less distributions:
From net investment income $(0.0432) $(0.0505) $(0.0328) $(0.0113) $(0.0217) $(0.0415)
-------- -------- -------- -------- -------- --------
Net asset value -- End of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
Total Return (2) 4.41% 5.16% 3.29% 1.14%(3) 2.35% 4.38%
Ratios/Supplemental Data:
Net assets, end of year
(000's omitted) $ 19,910 $ 34,026 $118,599 $ 10,566 $ 18,553 $ 9,145
Expenses as a percentage
of average daily net assets (1) 1.13% 0.91% 0.94% 1.49%++ 0.92% 1.23%
Net investment income as a percentage
of average daily net assets (1) 4.31% 5.11% 3.55% 1.66%++ 2.33% 4.30%
For the periods presented below, the operating expenses of the Fund reflect an allocation of expenses to
the administrator. Had such actions not been taken, net investment income per share and the ratios would have been as
follows:
Period Ended Year Ended March 31,
December 31, --------------------
1993* 1993+ 1992+
------------ ------- -------
Net investment income per share $0.0092 $0.0171 $0.0372
------- ------- -------
Ratios: (As a percentage of average daily net assets)(1):
Expenses 1.80%++ 1.42% 1.73%
Net investment income 1.35%++ 1.85% 3.80%
+ Audited by the Fund's previous auditors.
++ Computed on an annualized basis.
* For the nine months ended December 31, 1993. The Liquid Assets Fund changed its fiscal year end from
March 31 to December 31, effective December 31, 1993.
(1) Includes the Fund's share of Cash Management Portfolio's income and expenses for the years ended
December 31, 1996 and 1995 and for the period from May 2, 1994 to December 31, 1994.
(2) Total return is calculated assuming a purchase at net asset value on the first day and sale at net
asset value on the last day of the period. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the record date.
(3) Total return is not computed on an annualized basis.
The accompanying notes are an integral part of the financial statements
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights
- -----------------------------------------------------------------------
Money Market Fund
- -----------------------------------------------------------------------
Year Ended December 31,
-----------------------
1996 1995*
-------- --------
<S> <C> <C>
Net asset value -- Beginning of period $ 1.00 $ 1.00
-------- --------
Income from operations:
Net investment income $ 0.0370 $ 0.0312
Less distributions:
From net investment income $(0.0370) $(0.0312)
-------- --------
Net asset value -- End of year $ 1.00 $ 1.00
======== ========
Total Return (2) 3.77% 3.17%(3)
Ratios/Supplemental Data:
Net assets, end of year (000's omitted) $ 31,250 $ 12,951
Expenses as a percentage of average
daily net assets (1) 1.73% 1.68%+
Net investment income as a percentage
of average daily net assets (1) 3.70% 4.19%+
For the year ended December 31, 1996 and for the period from April 5, 1995
(start of business), to December 31, 1995, the operating expenses of the
Fund reflect an allocation of expenses to the administrator. Had such
action not been taken, net investment income per share and the ratios
would have been as follows:
Net investment income per share $ 0.0367 $ 0.0300
-------- --------
Ratios: (As a percentage of average
daily net assets)(1):
Expenses 1.76% 1.85%+
Net investment income 3.66% 4.03%+
+ Computed on an annualized basis.
* For the period from the start of business, April 5, 1995, to December 31, 1995.
(1) Includes the Fund's share of Cash Management Portfolio's income and expenses.
(2) 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.
(3) Total return is not computed on an annualized basis.
The accompanying notes are an integral part of the financial statements
</TABLE>
Notes to Financial Statements
December 31, 1996
(1) Significant Accounting Policies
Eaton Vance Mutual Funds Trust (the Trust) is an entity of the type
commonly known as a Massachusetts business trust and is registered
under the Investment Company Act of 1940 as amended (1940 Act), as an
open-end management investment company. The Trust presently consists
of fifteen Funds, three of which are included in these financial
statements. They include Eaton Vance Cash Management Fund ("Cash
Management Fund"), Eaton Vance Liquid Assets Fund ("Liquid Assets
Fund") and Eaton Vance Money Market Fund ("Money Market Fund")
(individually, the "Fund", collectively the "Funds") each of which is
registered under the 1940 Act, as diversified, open-end management
investment companies seeking high income consistent with the
preservation of capital and maintenance of liquidty.
The Funds invest all of their investable assets in interests in the
Cash Management Portfolio (the Portfolio), a New York Trust, having
the same investment objective as the Funds. The value of each Fund's
investment in the Portfolio reflects the Fund's proportionate
interest in the net assets of the Portfolio (78.5% for Cash
Management Fund, 10.4% for Liquid Assets Fund and 11.1% for Money
Market Fund at December 31, 1996). The performance of each Fund is
directly affected by the performance of the Portfolio. The financial
statements of the Portfolio, including the portfolio of investments,
are included elsewhere in this report and should be read in
conjunction with the Fund's financial statements. The following is a
summary of significant accounting policies consistently followed by
the Funds in the preparation of their financial statements. The
policies are in conformity with generally accepted accounting
principles.
A. Investment Valuations -- Valuation of securities by the Portfolio
is discussed in Note 1A of the Portfolio's Notes to Financial
Statements which are included elsewhere in this report.
B. Income -- The Fund's net investment income consists of the Fund's
pro rata share of the net investment income of the Portfolio, less
all actual and accrued expenses of the Fund determined in accordance
with generally accepted accounting principles.
C. Federal Taxes -- The Funds' 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, including any net realized gain on investment
transactions. Accordingly, no provision for federal income or excise
tax is necessary. At December 31, 1996, Liquid Assets Fund, for
federal income tax purposes, had a capital loss carryover of $6,977,
which will reduce the Fund'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 distributions to shareholders which would otherwise be
necessary to relieve the Fund of any liability for federal income
tax. Such capital loss carryover will expire on December 31, 2001.
D. Deferred Organization Expenses -- Costs incurred by the Money
Market Fund in connection with its organization, including
registration costs, are being amortized on the straight-line basis
over five years.
E. Use of Estimates -- The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of income and expense during the
reporting period. Actual results could differ from those estimates.
F. Other -- Investment transactions are accounted for on a trade date
basis.
(2) Distribution to Shareholders
The net investment income of each Fund is determined daily and
substantially all of the net investment income so determined is
declared as a dividend to shareholders of record at the time of
declaration. Dividends are paid monthly. Dividends are paid in the
form of additional shares or, at the election of the shareholder, in
cash.
The Funds distinguish between distributions on a tax basis and a
financial basis. Generally accepted accounting principles require
that only distributions in excess of tax earnings and profits be
reported in the financial statements as a return of capital.
Differences in the recognition or classification of income between
the financial statements and tax earnings and profits which result in
temporary over distributions for financial statement purposes are
classified as distributions in excess of net investment income or
accumulated net realized gains. Permanent differences between book
and tax accounting relating to distributions are reclassified to
paid-in capital.
(3) Shares of Beneficial Interest
<TABLE>
<CAPTION>
The Funds' Declaration of Trust permits the Trustees to issue an unlimited number of full and
fractional shares of beneficial interest, with no par value. Transactions in Fund shares were
as follows:
Cash Management Fund
-------------------------------------------------------
Year Ended Year Ended
December 31, 1996 December 31, 1995
-------------------------- --------------------------
Shares Amount Shares Amount
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Sales 614,892,840 $ 614,892,840 554,615,530 $ 554,615,530
Issued to shareholders
electing to receive
payments of distributions
in Fund shares 4,425,531 4,425,531 4,331,670 4,331,670
Redemptions (622,878,579) (622,878,579) (515,317,590) (515,317,590)
------------ ------------ ------------ -------------
Net increase (decrease) (3,560,208) $ (3,560,208) 43,629,610 $ 43,629,610
============ ============ ============ =============
<CAPTION>
Liquid Assets Fund
-------------------------------------------------------
Year Ended Year Ended
December 31, 1996 December 31, 1995
-------------------------- --------------------------
Shares Amount Shares Amount
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Sales 49,292 $ 49,292 54,191,074 $ 54,191,074
Issued to shareholders
electing to receive
payments of distributions
in Fund shares 660,755 660,755 1,745,191 1,745,191
Redemptions (14,825,975) (14,825,975) (140,508,593) (140,508,593)
---------- ------------- ----------- -------------
Net decrease (14,115,928) $ (14,115,928) (84,572,328) $ (84,572,328)
========== ============= =========== =============
<CAPTION>
Money Market Fund
---------------------------------------------------------------
For the Period from the
Year Ended Start of Business, April 5, 1995,
December 31, 1996 to December 31, 1995
-------------------------- --------------------------
Shares Amount Shares Amount
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Sales 474,121,094 $ 474,121,094 197,167,299 $197,167,299
Issued to shareholders
electing to receive
payments of distributions
in Fund shares 490,977 490,977 180,366 180,366
Redemptions (456,313,118) (456,313,118) (184,396,424) (184,396,424)
------------ ------------- ----------- -------------
Net increase 18,298,953 $ 18,298,953 12,951,241 $ 12,951,241
============ ============= =========== =============
</TABLE>
(4) Transactions with Affiliates
Eaton Vance Management (EVM) serves as the administrator of the
Funds, but receives no compensation. The Portfolio has engaged Boston
Management and Research (BMR), a subsidiary of EVM, to render
investment advisory services. See Note 2 of the Portfolio's Notes to
Financial Statements which are included elsewhere in this report. To
enhance the net income of the Money Market Fund for the year ended
December 31, 1996, $8,579 of expenses related to the operation of the
Fund were allocated to EVM. Except as to Trustees of the Funds and
the Portfolio who are not members of EVM's or BMR's organization,
officers and Trustees receive remuneration for their services to
each Fund out of such investment adviser fee. Certain of the officers
and Trustees of the Funds and Portfolio are officers and
directors/trustees of the above organizations (Note 5).
(5) Distribution Plans
Money Market Fund and Liquid Assets Fund have adopted distribution
plans (individually the "Plan" and collectively the "Plans") pursuant
to Rule 12b-1 under the 1940 Act. The Plan for Money Market Fund
requires the Fund to pay the Principal Underwriter, Eaton Vance
Distributors, Inc. (EVD), amounts equal to 0.75% of the Fund's
average daily net assets, for providing ongoing distribution services
and facilities to the Fund. The Fund will automatically discontinue
payments to EVD during any period in which there are no outstanding
Uncovered Distribution Charges. The Plan for Liquid Assets Fund does
not provide for annual payments to EVD for providing such services
and facilities, however the Plan does require the Fund to calculate
outstanding Uncovered Distribution Charges. Each Fund's balance of
Uncovered Distribution Charges is equivalent to the sum of (i) 6.25%
(5% for Liquid Assets Fund) of the aggregate amount received by the
Fund for shares sold plus (ii) distribution fees calculated by
applying the rate of 1% over the prevailing prime rate to the
outstanding balance of Uncovered Distribution Charges of EVD reduced
by the aggregate amount of contingent deferred sales charges (Note 6)
and amounts theretofore paid to EVD. For the year ended December 31,
1996, Money Market Fund paid $186,355 to EVD, representing 0.75% of
the Fund's average daily net assets. At December 31, 1996, the amount
of Uncovered Distribution Charges of EVD calculated under the Plans
for Money Market Fund and Liquid Assets Fund were approximately
$2,714,000 and $2,080,000, respectively.
In addition, the Plans authorize the Funds to make payments of
service fees to the Principal Underwriter, Authorized Firms and
other persons in amounts not exceeding 0.25% of each Fund's average
daily net assets. The Trustees of the Funds have initially
implemented the Plans by authorizing the Funds to make quarterly
service fee payments to the Principal Underwriter and Authorized
Firms in amounts not expected to exceed 0.15% (0.25% for Liquid
Assets Fund) per annum of each Fund's average daily net assets based on
the value of the Fund shares sold by such persons and remaining
outstanding for at least one year. For the year ended December 31,
1996, Money Market Fund and Liquid Assets Fund paid service fees to EVD
and Authorized Firms in the amount of $14,986 and $62,420, respectively.
Service fee payments are made for personal services and/or maintenance
of shareholder accounts. Service fees paid to EVD and Authorized Firms
are separate and distinct from the sales commissions and distribution
fees payable by a Fund to EVD, and as such are not subject to automatic
discontinuance when there are no outstanding Uncovered Distribution
Charges of EVD.
Certain of the officers and Trustees of the Funds are officers or
directors of EVD.
(6) Contingent Deferred Sales Charges
A contingent deferred sales charge (CDSC) is imposed on any
redemption of shares from either Money Market Fund or Liquid Assets
Fund made within six years of purchase. Generally, the CDSC is based
upon the lower of the net asset value at date of redemption or date
of purchase. No charge is levied on shares acquired by reinvestment
of dividends or capital gain distributions. The CDSC is imposed at
rates that begin at 5% in the case of redemptions in the first and
second year after purchase, declining one percentage point each
subsequent year. No CDSC is levied on shares which have been sold to
EVM or its affiliates or to their respective employees or clients.
CDSC charges are paid to EVD to reduce the amount of Uncovered
Distribution Charges calculated under each Fund's Distribution Plan.
CDSC charges received when no Uncovered Distribution Charges exist
will be credited to the Fund. EVD received approximately $284,000 and
$169,000 of CDSC paid by shareholders for the year ended December 31,
1996 for the Money Market Fund and Liquid Assets Fund, respectively.
(7) Investment Transactions
Increases and decreases in the Funds' investment in the Portfolio for
the year ended December 31, 1996 are as follows:
Cash Management Liquid Assets Money Market
Fund Fund Fund
---------------- ------------ --------------
Increase $611,240,407 $ 175,556 $464,151,422
Decrease 624,510,638 15,715,418 457,659,011
Report of Independent Accountants
To the Board of Trustees and Shareholders of
Eaton Vance Mutual Funds Trust:
We have audited the accompanying statements of assets and liabilities
of Eaton Vance Cash Management Fund, Eaton Vance Liquid Assets Fund
and Eaton Vance Money Market Fund (certain of the Funds constituting
Eaton Vance Mutual Funds Trust), as of December 31, 1996, the related
statements of operations for the year then ended, the statements of
changes in net assets for each of the two periods then ended and the
financial highlights for each of the periods indicated on the
statements herein. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements
and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned as of
December 31, 1996 by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of each of the aforementioned funds of Eaton Vance
Mutual Funds Trust as of December 31, 1996, the results of their
operations for the year then ended, the changes in their net assets
for the two years then ended and their financial highlights for each
of the periods indicated on the statements herein, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 31, 1997
<TABLE>
<CAPTION>
Cash Management Portfolio
Portfolio of Investments
December 31, 1996
Commercial Paper - 57.3%
Ratings (unaudited)
- ---------------------
Principal
Standard Amount
& Poor's Moody's (000's Omitted) Value
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Agriculture -- 1.2%
A-1+ P-1 $ 750 Cargill Inc. 5.25%, 3/12/97 $ 742,344
A-1+ P-1 1,500 Cargill Financial Services Corp.
5.27%, 1/8/97 (2) 1,498,463
------------
$ 2,240,807
------------
Automotive -- 0.5%
A-1 P-1 $ 1,000 Ford Motor Credit Co. 5.45%, 1/22/97 $ 996,821
------------
Banking & Finance -- 17.2%
A-1 P-1 $2,625 American Express Credit Corp. 5.50%, 1/14/97 $2,619,786
A-1+ P-1 2,000 Asset Securitization Coop. Corp. 5.30%, 1/8/97 (2) 1,997,939
A-1+ P-1 1,500 Asset Securitization Coop. Corp. 5.31%, 1/9/97 (2) 1,498,230
A-1+ P-1 2,500 Associates Corp. of No. America 5.38%, 1/31/97 2,488,791
A-1+ P-1 1,000 Associates Corp. of No. America 5.33%, 3/11/97 989,784
A-1+ P-1 1,500 Associates Corp. of No. America 5.34%, 3/31/97 1,480,197
A-1 P-1 2,500 CIT Group Holdings Inc. 5.48%, 1/22/97 2,492,009
A-1+ P-1 2,500 CIESCO 5.375%, 1/3/97 2,499,253
A-1+ P-1 1,000 CIESCO 5.28%, 1/15/97 997,947
A-1+ P-1 1,000 CIESCO 5.27%, 1/27/97 996,194
A-1+ P-1 3,500 Corporate Asset Funding Co. 5.28%, 1/30/97 3,485,113
A-1 P-1 2,000 Corporate Receivables Corp. 5.43%, 2/3/97 (1) 1,990,045
A-1+ P-1 3,000 CXC Incorporated 5.30%, 1/13/97 (2) 2,994,700
A-1+ P-1 1,600 Delaware Funding Corp. 5.32%,1/14/97 (2) 1,596,926
A-1+ P-1 1,000 Norwest Financial Inc. 5.30%, 1/13/97 998,233
A-1+ P-1 800 Norwest Financial Inc. 5.28%, 3/14/97 791,552
A-1+ P-1 3,000 Norwest Financial Inc. 5.41%, 3/26/97 2,962,130
------------
$32,878,829
------------
Chemicals -- 2.1%
A-1+ P-1 $2,200 E.I. DuPont de Nemours & Co. 5.28%, 1/14/97 (2) 2,195,805
A-1+ P-1 1,920 E.I. DuPont de Nemours & Co. 5.25%, 2/12/97 (2) $1,908,240
------------
$4,104,045
------------
Credit Unions -- 4.2%
A-1+ P-1 $3,000 Central Corporate Credit Union 5.47%, 1/15/97 $2,993,618
A-1+ P-1 3,500 Mid-States Corp. Federal Credit Union 5.57%, 1/16/97 3,491,877
A-1+ P-1 760 US Central Credit Union 5.29%, 1/21/97 757,767
A-1+ P-1 750 US Central Credit Union 5.35%, 1/27/97 747,102
------------
$7,990,364
------------
Electrical Equipment & Electronics -- 5.5%
A-1+ P-1 $2,330 General Electric Capital Corp. 5.31%, 1/23/97 $2,322,439
A-1+ P-1 1,000 General Electric Capital Corp. 5.31%, 1/27/97 996,165
A-1+ P-1 345 General Electric Capital Corp. 5.30%, 1/27/97 343,679
A-1+ P-1 1,655 General Electric Capital Corp. 5.29%, 2/12/97 1,644,786
A-1+ P-1 1,500 General Electric Capital Corp. 5.41%, 3/26/97 1,481,065
A-1+ P-1 2,600 Motorola Credit Corp. 5.24%, 1/22/97 2,592,052
A-1+ P-1 1,200 Motorola Credit Corp. 5.25%, 2/14/97 1,192,300
------------
$10,572,486
------------
Food & Beverages -- 4.8%
A-1+ P-1 $3,000 Anheuser-Busch Co. 5.22%, 1/6/97 $2,997,825
A-1+ P-1 1,700 Coca-Cola Co. 5.23%, 1/21/97 1,695,061
A-1+ P-1 1,420 Coca-Cola Co. 5.32%, 3/7/97 1,406,360
A-1+ P-1 3,100 Nestle Capital Corp. 5.28%, 2/6/97 3,083,632
------------
$9,182,878
------------
Household Products -- 0.5%
A-1+ P-1 $1,000 Procter & Gamble Co. 5.28%, 2/19/97 $992,813
------------
Insurance -- 9.8%
A-1+ P-1 $2,600 AI Credit Corp. 5.24%, 1/10/97 $2,596,594
A-1+ P-1 795 AI Credit Corp. 5.29%,2/26/97 788,458
A-1+ P-1 1,500 APC Funding Corp. 5.37%, 2/4/97 1,492,393
A-1+ P-1 1,000 APC Funding Corp. 5.50%, 2/27/97 991,292
A-1+ P-1 2,600 MetLife Funding Inc. 5.30%, 3/5/97 2,575,885
A-1+ P-1 2,000 Prudential Funding Corp. 5.25%, 1/2/97 1,999,708
A-1+ P-1 2,000 SAFECO Credit Co. Inc. 5.28%, 1/17/97 1,995,306
A-1+ P-1 433 SAFECO Credit Co. Inc. 5.32%, 2/4/97 430,825
A-1+ P-1 1,300 SAFECO Credit Co. Inc. 5.30%, 3/13/97 1,286,411
A-1 P-1 1,500 Transamerica Finance Corp. 5.40%, 1/14/97 1,497,075
A-1+ P-1 1,598 USAA Capital Corp. 5.30%, 1/9/97 1,596,121
A-1+ P-1 1,500 USAA Capital Corp. 5.29%, 1/21/97 1,495,592
------------
$18,745,660
------------
Oil -- 1.4%
A-1+ P-1 $2,700 Chevron Oil Finance Co. 5.50%, 1/15/97 $2,694,225
------------
Publishing -- 1.3%
A-1+ P-1 $2,500 Knight Ridder, Inc. 5.32%,2/10/97 (2) $2,485,222
------------
Pharmaceuticals -- 3.8%
A-1+ P-1 $4,375 Eli Lilly & Co. 5.28%, 1/24/97 (2) 4,360,242
A-1+ P-1 2,925 Schering Corp. 5.35%, 3/4/97 2,898,049
------------
$7,258,291
------------
Telecommunications -- 3.8%
A-1+ P-1 $3,500 Ameritech Corp. 5.35%, 2/13/97 $3,477,634
A-1+ P-1 3,755 AT&T Corp. 5.20%, 3/6/97 3,720,287
------------
$7,197,921
------------
Utilities -- 1.2%
A-1+ P-1 $1,600 National Rural Utilities Coop. Co. 5.31%, 1/7/97 $1,598,584
A-1+ P-1 800 National Rural Utilities Coop. Co. 5.30%, 1/10/97 798,940
------------
$2,397,524
------------
Total Commercial Paper, at value $109,737,886
============
<CAPTION>
U.S. Government Agency Obligations - 42.7%
- --------------------------------------------------------------------------------------
Principal
Amount
(000's Omitted) Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
$60,000 FFCB Discount Notes 5.46%, 1/2/97 $59,990,900
1,770 FHLB Discount Notes 5.36%, 3/25/97 1,748,127
4,000 FHLMC Discount Notes 5.36%, 2/27/97 3,966,053
1,950 FNMA Discount Notes 5.22%, 1/16/97 1,945,759
1,985 FNMA Discount Notes 5.22%, 2/3/97 1,975,502
4,875 FNMA Discount Notes 5.37%, 2/24/97 4,835,732
1,545 FNMA Discount Notes 5.31%, 3/4/97 1,530,871
4,000 FNMA Discount Notes 5.24%, 3/13/97 3,958,662
2,000 FNMA Discount Notes 5.34%, 3/24/97 1,975,673
------------
Total U.S. Government Agency Obligations,
at value $ 81,927,279
------------
Total Investments -- 100.0% $191,665,165
Other Assets, less Liabilities -- 0.0% (5,095)
------------
Net Assets -- 100.0% $191,660,070
============
(1) Security exempt from registration under Rule 144A of the Securities Act of 1933.
These securities may be resold in transactions exempt from registration, normally to
qualified institutional buyers. It is the Portfolio's intention to hold the
security until maturity. At December 31, 1996, the value of these securities
amounted to $1,990,045 or 0.6% of the Portfolio's net assets.
(2) A security which has been issued under section 4(2) of the Securities Act of 1933
and is generally regarded as restricted and illiquid. This security may be resold in
transactions exempt from registration or to the public if the security is registered.
All such securities held have been deemed by the Portfolio's Trustees to be liquid
and were purchased with the expectation that resale would not be necessary. At
December 31, 1996, the value of these securities amounted to $20,535,767 or 10.71% of
the Portfolio's net assets.
FFCB -- Federal Farm Credit Bank
FHLB -- Federal Home Loan Bank
FHLMC -- Federal Home Loan Mortgage Corporation (Freddie Mac)
FNMA -- Federal National Mortgage Association (Fannie Mae)
The accompaning notes are an integral part of the financial statements
</TABLE>
<TABLE>
<CAPTION>
Cash Management Portfolio
Financial Statements
Statement of Assets and Liabilities
- -----------------------------------------------------------------------------------
December 31, 1996
- -----------------------------------------------------------------------------------
<S> <C> <C>
Assets:
Investments, at value (Note 1A) $191,665,165
Cash 4,839
Deferred organization expenses (Note 1D) 6,361
------------
Total assets $191,676,365
Liabilities:
Trustees' fees payable $ 2,711
Accrued expenses 13,584
-------
Total liabilities 16,295
------------
Net Assets $191,660,070
============
Sources of Net Assets:
Net proceeds from capital contributions
and withdrawals $191,660,070
============
<CAPTION>
- -----------------------------------------------------------------------------------
Statement of Operations
For the Year Ended December 31, 1996
- -----------------------------------------------------------------------------------
<S> <C> <C>
Investment Income:
Interest Income $10,186,297
Expenses:
Investment adviser fee (Note 2) $939,313
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 12,124
Custodian fee 116,445
Legal and accounting services 32,809
Amortization of organization expenses (Note 1D) 2,734
Miscellaneous 4,835
--------
Total expenses 1,108,260
-----------
Net investment income $ 9,078,037
===========
<CAPTION>
Statements of Changes in Net Assets
- ----------------------------------------------------------------------------------
Year Ended December 31,
----------------------------------
1996 1995
------------- --------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
From operations --
Net investment income $ 9,078,037 $ 10,343,333
Capital transactions --
Contributions 1,075,567,385 815,124,407
Withdrawals (1,097,885,067) (843,381,480)
-------------- -------------
Decrease in net assets resulting
from capital transactions $ (22,317,682) $ (28,257,073)
-------------- -------------
Total decrease in net assets $ (13,239,645) $ (17,913,740)
Net Assets:
At beginning of year 204,899,715 222,813,455
-------------- -------------
At end of year $ 191,660,070 $ 204,899,715
============== =============
<CAPTION>
- ----------------------------------------------------------------------------------
Supplementary Data
- ----------------------------------------------------------------------------------
Year Ended December 31,
------------------------------------------
1996 1995 1994*
------------ ---------- -----------
<S> <C> <C> <C>
Ratios (as a percentage of
average daily net assets):
Expenses 0.59% 0.60% 0.58%+
Net investment income 4.83% 5.36% 4.22%+
+ Computed on an annualized basis.
* For the period from the start of business, May 2, 1994, to December 31, 1994.
The accompaning notes are an integral part of the financial statements
</TABLE>
Notes to Financial Statements
December 31, 1996
(1) Significant Accounting Policies
Cash Management Portfolio (the Portfolio) is registered under the
Investment Company Act of 1940 as a diversified, open-end management
investment company which was organized as a trust under the laws of
the State of New York on May 1, 1992. The Declaration of Trust
permits the Trustees to issue interests in the Portfolio. The
following is a summary of significant accounting policies of the
Portfolio. The policies are in conformity with generally accepted
accounting principles.
A. Security Valuation -- The Portfolio values investment securities
utilizing the amortized cost valuation technique permitted by Rule
2a-7 of the Investment Company Act of 1940, pursuant to which the
Portfolio must comply with certain conditions. This technique
involves initially valuing a portfolio security at its cost and
thereafter assuming a constant amortization to maturity of any
discount or premium. It is the normal practice of the Portfolio to
hold portfolio securities to maturity and realize par value unless
such sale or other disposition is mandated by withdrawal requests or
other extraordinary circumstances.
B. Income -- Interest income is determined on the basis of interest
accrued, adjusted for amortization of premium or accretion of
discount when required for federal income tax purposes.
C. Income Taxes -- The Portfolio is treated as a partnership for
Federal tax purposes. No provision is made by the Portfolio for
federal or state taxes on any taxable income of the Portfolio because
each investor in the Portfolio is ultimately responsible for the
payment of any taxes. Since some of the Portfolio's investors are
regulated investment companies that invest all or substantially all
of their assets in the Portfolio, the Portfolio normally must satisfy
the applicable source of income and diversification requirements
(under the Internal Revenue Code), in order for its investors to
satisfy them. The Portfolio will allocate at least annually, among
its investors each investor's distributive share of the Portfolio's
net taxable investment income, net realized capital gains, and any
other items of income, gain, loss, deduction or credit.
D. Deferred Organization Expenses -- Costs incurred by the Portfolio
in connection with its organization are being amortized on the
straight-line basis over five years.
E. Use of Estimates -- The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of income and expense during the
reporting period. Actual results could differ from those estimates.
F. Other -- Investment transactions are accounted for on a trade date
basis.
(2) Investment Adviser Fee and Other Transactions with Affiliates
The investment adviser fee is earned by Boston Management and
Research (BMR), a wholly-owned subsidiary of Eaton Vance Management
(EVM), as compensation for management and investment advisory
services rendered to the Portfolio. The fee is computed at the rate
of 1/2 of 1% per annum of the Portfolio's average daily net assets
and amounted to $939,313 for the year ended December 31, 1996. Except
as to Trustees of the Portfolio who are not members of EVM's or BMR's
organization, officers and Trustees receive remuneration for their
services to the Portfolio out of such investment adviser fee.
Certain of the officers and Trustees of the Portfolio are officers
and directors/trustees of the above organizations.
(3) Line of Credit
The Portfolio participates with other portfolios and funds managed by
BMR or EVM and its affiliates in a committed $120 million unsecured
line of credit agreement with a group of banks. The Portfolio may
temporarily borrow from the line of credit to satisfy withdrawal
requests or settle investment transactions. Interest is charged to
each participating portfolio or fund based on its borrowings at an
amount above the bank's adjusted certificate of deposit rate,
eurodollar rate or federal funds rate. In addition, a fee computed at
an annual rate of 0.15% on the daily unused portion of the line of
credit is allocated among the participating portfolios and funds at
the end of each quarter. The Portfolio did not have any significant
borrowings or allocated fees during the year ended December 31, 1996.
(4) Investments
Purchases and sales (including maturities) of investments, during the
year ended December 31, 1996, exclusive of U.S. Government securities
aggregated $1,174,380,859 and $1,292,278,412, respectively. Purchases
and sales (including maturities) of U.S. Government Agency securities
aggregated $638,763,728 and $543,634,429, respectively.
Report of Independent Accountants
To the Trustees and Investors of
Cash Management Portfolio:
We have audited the accompanying statement of assets and liabilities
of Cash Management Portfolio (the "Portfolio"), including the
portfolio of investments, as of December 31, 1996, the related
statement of operations for the year then ended, the statement of
changes in net assets for the two years then ended and the
supplementary data for the two years then ended and for the period
from May 2, 1994 (start of business) to December 31, 1994. These
financial statements and supplementary data are the responsibility of
the Portfolio's management. Our responsibility is to express an
opinion on these financial statements and supplementary data based on
our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial
statements and supplementary data are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned at December 31, 1996 by
correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and supplementary data
referred to above present fairly, in all material respects, the
financial position of Cash Management Portfolio, as of December 31,
1996, the results of its operations for the year then ended, the
changes in net assets for the two years then ended and supplementary
data for the two years then ended and for the period from May 2, 1994
(start of business) to December 31, 1994, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 31, 1997
Investment Management
Eaton Vance
Mutual Funds
Trust
24 Federal Street
Boston, MA 02110
Officers
M. Dozier Gardner
President, Trustee
James B. Hawkes
Vice President, Trustee
William H. Ahern, Jr.
Vice President
Michael B. Terry
Vice President
James L. O'Connor
Treasurer
Thomas Otis
Secretary
Independent Trustees
Donald R. Dwight
President, Dwight Partners, Inc.
Chairman, Newspapers of
New England, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of
Investment Banking, 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
Cash Management
Portfolio
24 Federal Street
Boston, MA 02110
Officers
M. Dozier Gardner
President, Trustee
James B. Hawkes
Vice President, Trustee
Michael B. Terry
Vice President
and Portfolio Manager
James L. O'Connor
Treasurer
Thomas Otis
Secretary
Trustees
Donald R. Dwight
President, Dwight Partners, Inc.
Chairman, Newspapers of
New England, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of
Investment Banking, 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
Portfolio Investment Adviser
Boston Management and Research
24 Federal Street
Boston, MA 02110
Fund Administrator
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
89 South Street
P.O. Box 1537
Boston, MA 02205-1537
Transfer Agent
First Data Investors Services Group, Inc.
Attn: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
Independent Accountants
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02110
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
Mutual Funds Trust
24 Federal Street
Boston, MA 02110 MMSRC-2/97
