<PAGE>
Mutual Funds [PHOTO OF 1040 TAX FORM ON DESK APPEARS HERE]
for People
Who Pay
EATON VANCE
================ Taxes
Mutual Funds
Semiannual Report April 30, 1998
[PHOTO OF NYSE FLAG
APPEARS HERE]
EATON VANCE
TAX-MANAGED
EMERGING
GROWTH
FUND
[PHOTO OF 1099 TAX FORM ON
DESK APPEARS HERE]
<PAGE>
Eaton Vance Tax-Managed Emerging Growth Fund as of April 30, 1998
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INVESTMENT UPDATE
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[PHOTO OF EDWARD E. SMILEY, PORTFOLIO MANAGER APPEARS HERE]
Investment Environment
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The Equity Markets
. The U.S. market maintained its momentum through the six months ended April
30, 1998 as low interest rates and a global flight to quality provided
continuing support for investors. The rally was increasingly dominated by
large-cap stocks, with the S&P 500 registering a gain of 22.5% during the
period./1/
. Smaller, emerging companies continued to lag the blue chip indices. The S&P
600 Index - an unmanaged index of small-cap companies - had a return of
13.2% during the six-month period./1/
. The economy remained fairly robust. First quarter gross domestic product
rose a stronger-than-expected 4.8%, while inflation remained well under
control. Corporate earnings trended generally higher, although some sectors
experienced shortfalls.
The Fund
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Performance for the Past Six Months
. The Fund's Class A shares had a total return of 14.8% during the six months
ended April 30, 1998./2/ This return resulted from an increase in net asset
value per share (NAV) to $11.18 on April 30, 1998 from $9.74 on October 31,
1997.
. The Fund's Class B shares had a total return of 14.5% during the six months
ended April 30, 1998./2/ This return resulted from an increase in NAV to
$11.15 from $9.74 on October 31, 1997.
. The Fund's Class C shares had a total return of 14.5% during the six months
ended April 30, 1998./2/ This return resulted from an increase in NAV to
$11.13 from $9.72 on October 31, 1997.
Recent Strong Performers
. Information services companies remained the Fund's largest sector weighting
and featured some of the Fund's strongest performers. Abacus Direct Corp.,
which provides database consumer information for direct marketing
companies, rose 53% during the period. Paychex, Inc., which provides
computerized payroll and internal accounting services to small and
medium-sized companies, rose 42%.
. Other strong performers included Documentum, Inc., which rose 79%. The
company develops Internet and server-based software that allows companies
to share information. In the financial sector, Capital One Financial Corp.
rose 105%. First quarter earnings rose 55% due to strong consumer loan
business and improved net interest margins.
. In keeping with the tax-managed aspect of the Fund, several holdings were
sold in cases where earnings failed to meet expectations. Those losses were
used to offset realized gains in other securities.
Some Major Portfolio Holdings
. IDX Systems Corp. was the Fund's largest holding at April 30, 1998. The
Vermont-based company's IDXtend and LastWord systems integrate services for
hospitals and medical practices, streamline patient processing, and help
reduce costs of health care providers.
. In the restaurant sector, Papa John's International, Inc. saw first quarter
earnings rise 47%. The 1600-store chain has followed a successful strategy
that includes high-quality pizza and rapid expansion. Papa John's plans to
open an additional 300 stores in 1998.
. J.D. Edwards, Inc. develops Enterprise Resource Planning software that
helps integrate functions as diverse as ordering, manufacturing,
transportation, and human resources. The company's SCOREx and One-World
products have been especially well received, contributing to 154% second
quarter earnings growth.
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Mutual fund shares are not insured by the FDIC and are not deposits or other
obligations of, or guaranteed by, any depository institution. Shares are subject
to investment risks, including possible loss of principal invested.
================================================================================
Fund Information
as of April 30, 1998
Performance/3/ Class A Class B Class C
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Cumulative Total Returns (at net asset value)
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Life of Fund+ 11.8% 11.5% 11.3%
SEC Cumulative Total Returns (including sales charge or applicable CDSC)
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Life of Fund+ 5.4% 6.5% 10.3%
+Inception Dates - Class A: 9/25/97; Classes B & C: 9/29/97
Ten Largest Holdings/4/
- -------------------------------------------------------------------------------
By total net assets
IDX Systems Corp. 1.4%
MiniMed, Inc. 1.3
Varco International, Inc. 1.3
Cambridge Technology Partners, Inc. 1.3
Papa John's International, Inc. 1.3
Louis Dreyfus Natural Gas 1.2
Central Newspapers, Inc., Class A 1.2
J.D. Edwards, Inc. 1.2
The Mens Wearhouse, Inc. 1.2
Harbinger, Corp. 1.2
/1/ It is not possible to invest directly in an Index./2/ These returns do not
include the 5.75% maximum sales charge for the Fund's Class A shares or the
applicable contingent deferred sales charges (CDSC) for the Fund's Class B
and Class C shares. /3/ Returns are calculated by determining the
percentage change in net asset value (NAV) with all distributions
reinvested. SEC cumulative total returns for Class A reflect a 5.75% sales
charge; for Class B, returns reflect applicable CDSC based on the following
schedule: 5%-1st and 2nd years; 4%-3rd year; 3%-4th year; 2%-5th year; 1%-
6th year; for Class C, return reflects one-year 1% CDSC. /4/ Based on
market value as of 4/30/98. Ten largest holdings represent 12.6% of the
Portfolio's investments. Holdings are subject to change.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
2
<PAGE>
Eaton Vance Tax-Managed Emerging Growth Fund as of April 30, 1998
PORTFOLIO OF INVESTMENTS (Unaudited)
Common Stocks -- 89.9%
Security Shares Value
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Advertising -- 1.6%
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Catalina Marketing Corp.* 13,400 $ 696,800
Outdoor Systems, Inc.* 14,500 460,375
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$ 1,157,175
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Banks - Regional -- 1.7%
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Colonial Bancgroup, Inc. (The) 13,900 $ 498,663
Sovereign Bancorp, Inc. 39,920 753,490
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$ 1,252,153
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Banks and Money Services -- 0.6%
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Bank United Corp. 7,950 $ 411,413
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$ 411,413
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Broadcasting and Cable -- 2.4%
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Emmis Broadcasting Corp., Class A* 16,000 $ 828,000
Jacor Communications, Inc.* 9,300 528,938
Sinclair Broadcast Group, Class A* 7,900 409,813
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$ 1,766,751
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Building Materials -- 0.9%
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Texas Industries, Inc. 10,000 $ 644,375
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$ 644,375
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Business Products and Services -- 3.7%
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CN Maximus, Inc.* 24,100 $ 759,150
Gartner Group, Inc., Class A* 25,000 828,125
Personnel Group of America, Inc.* 38,800 771,150
United Rentals, Inc.* 10,300 354,706
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$ 2,713,131
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Business Services - Miscellaneous -- 2.2%
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Human Genome Sciences, Inc.* 11,600 $ 421,950
On Assignment, Inc. 21,000 677,250
Sylvan Learning Systems, Inc.* 10,000 493,750
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$ 1,592,950
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Communications Equipment -- 3.3%
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Aspect Telecommunication Corp.* 20,000 $ 575,000
Comverse Technology, Inc.* 16,200 767,475
ECI Telecommunications 8,700 265,350
Glenayre Technologies, Inc.* 34,800 545,925
P-COM, Inc.* 14,600 287,438
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$ 2,441,188
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Communications Services -- 1.5%
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Smartalk Teleservices, Inc.* 20,000 $ 397,500
Transition Systems, Inc.* 30,400 684,000
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$ 1,081,500
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Computer Software -- 2.4%
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Brio Technology, Inc.* 900 $ 9,900
HNC Software, Inc.* 8,500 331,500
PeopleSoft, Inc.* 12,000 558,000
Saville Systems, PLC ADR* 11,100 553,613
Visio Corp.* 6,500 321,750
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$ 1,774,763
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Consumer Products -- 1.0%
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Sola International, Inc.* 9,600 $ 408,000
Twinlab Corp.* 8,600 337,550
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$ 745,550
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Consumer Services -- 0.9%
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Strayer Education, Inc. 18,400 $ 676,200
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$ 676,200
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Drugs -- 4.8%
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Elan Corp., PLC ADR* 11,000 $ 683,375
Genzyme Corp.* 45,100 343,888
Genzyme Corp., Class A* 18,100 559,969
Parexel International Corp.* 20,600 690,100
Quintiles Transnational Corp.* 7,500 371,250
Sepracor, Inc.* 12,500 578,125
Vertex Pharmaceuticals, Inc.* 10,200 317,475
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$ 3,544,182
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See notes to financial statements
3
<PAGE>
Eaton Vance Tax-Managed Emerging Growth Fund as of April 30, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Security Shares Value
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Electrical Equipment -- 1.4%
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Level One Communications, Inc.* 20,900 $ 650,513
Micrel, Inc.* 9,000 353,250
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$ 1,003,763
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Electronics - Instruments -- 1.3%
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Broadcom Corp., Class A* 100 $ 4,800
Qlogic Corp.* 8,400 373,800
Vitesse Semiconductor Corp.* 10,100 582,644
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$ 961,244
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Electronics - Semiconductors -- 2.0%
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Altera Corp.* 13,800 $ 558,900
Dallas Semiconductor Corp. 15,200 586,150
Linear Technologies Corp. 4,200 338,100
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$ 1,483,150
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Entertainment -- 0.5%
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MGM Grand, Inc.* 11,200 $ 378,000
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$ 378,000
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Financial - Miscellaneous -- 0.8%
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Capital One Financial Corp. 6,200 $ 595,588
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$ 595,588
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Health Care Services -- 0.7%
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NCS Healthcare, Inc., Class A* 17,000 $ 499,375
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$ 499,375
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Health Services -- 9.2%
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American Retirement Corp.* 32,100 $ 694,163
Compdent Corp.* 45,000 590,625
Concentra Managed Care, Inc.* 22,000 684,750
Express Scripts, Inc., Class A* 7,600 608,000
Health Management Associates, Inc., Class A* 27,450 864,674
MiniMed, Inc.* 19,100 954,999
National Surgery Centers, Inc.* 9,900 280,913
Omnicare, Inc. 12,700 434,975
Pediatrix Medical Group, Inc.* 7,200 303,750
Renal Care Group, Inc.* 19,000 726,750
Sunrise Assisted Living, Inc.* 14,500 649,781
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$ 6,793,380
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Information Services -- 22.7%
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Abacus Direct Corp.* 11,000 $ 625,625
Acxiom Corp.* 35,100 851,175
Affiliated Computer Services, Inc., Class A* 18,200 639,275
Aspect Development, Inc.* 9,800 620,463
Aspen Technologies, Inc.* 17,300 845,538
BISYS Group, Inc. (The)* 19,800 782,100
Cambridge Technology Partners, Inc.* 17,700 924,824
CBT Group, PLC ADR* 11,600 590,150
CCC Information Services Group* 22,700 544,800
Citrix Systems, Inc.* 6,250 388,281
Documentum, Inc.* 12,100 651,888
FIserv, Inc.* 8,500 555,688
Harbinger, Corp.* 23,800 865,724
IDX Systems Corp.* 23,000 1,001,937
Information Management Resources, Inc.* 6,850 185,806
J.D. Edwards, Inc.* 25,000 890,624
Legato Systems, Inc.* 15,800 499,675
Lycos, Inc.* 4,200 259,613
Manugistics Group, Inc. 8,800 528,000
Mobius Management Systems, Inc.* 21,900 405,150
National Data Corp. 5,000 204,063
Nova Corp.* 21,100 717,400
Paychex, Inc. 5,700 309,581
Pegasystems, Inc.* 12,300 230,625
SunGard Data Systems, Inc.* 21,500 765,938
Symantec* 19,000 551,000
Vantive Corp.* 15,300 489,600
Veritas Software Corp.* 13,000 711,750
Yahoo!, Inc.* 1,000 118,938
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$16,755,231
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Insurance -- 1.0%
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Mercury General Corp. 6,600 $ 427,350
Mutual Risk Management Ltd. 9,400 318,425
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$ 745,775
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Investment Services -- 2.9%
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Centura Banks, Inc. 12,000 $ 864,000
E*Trade Group, Inc.* 22,000 548,625
PIMCO Advisors Holdings L.P. 14,300 445,088
PMI Group, Inc. 3,600 292,500
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$ 2,150,213
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See notes to financial statements
4
<PAGE>
Eaton Vance Tax-Managed Emerging Growth Fund as of April 30, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Security Shares Value
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Machinery -- 2.4%
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Camco International, Inc. 12,000 $ 814,500
Varco International, Inc.* 30,900 950,174
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$ 1,764,674
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Medical Products -- 1.6%
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Ocular Sciences, Inc.* 15,100 $ 422,800
Sofamor Danek Group, Inc.* 9,100 798,525
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$ 1,221,325
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Oil and Gas - Exploration
and Production -- 7.3%
- --------------------------------------------------------------------------
Cross Timbers Oil Co. 43,300 $ 828,113
Devon Energy Corp. 18,800 749,650
Forcenergy, Inc.* 30,000 691,875
Louis Dreyfus Natural Gas* 45,790 918,661
Meridian Resource Corp.* 81,000 734,063
Newfield Exploration Co.* 26,900 652,325
Titan Exploration, Inc.* 50,000 415,625
Vintage Petroleum, Inc. 21,800 425,100
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$ 5,415,412
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Publishing -- 2.1%
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Belo (A.H.) Corp. 11,700 $ 619,369
Central Newspapers, Inc., Class A 12,400 908,299
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$ 1,527,668
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Retail - Food and Drug -- 2.0%
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Papa John's International, Inc.* 22,100 $ 922,674
Starbucks Corp.* 11,200 539,000
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$ 1,461,674
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Retail - Specialty and Apparel -- 1.9%
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Bed Bath and Beyond, Inc.* 10,000 $ 492,500
The Mens Wearhouse, Inc.* 20,800 876,199
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$ 1,368,699
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Semiconductor Equipment -- 1.0%
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Advanced Energy Industries, Inc.* 18,000 $ 267,750
PRI Automation, Inc.* 17,600 470,800
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$ 738,550
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Software Services -- 0.4%
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JDA Software Group, Inc.* 5,950 $ 300,847
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$ 300,847
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Telephone Utilities -- 0.7%
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Pacific Gateway Exchange, Inc.* 9,600 $ 547,200
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$ 547,200
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Transportation -- 1.0%
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Comair Holdings, Inc. 26,100 $ 712,856
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$ 712,856
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Total Common Stocks
(identified cost $58,914,598) $66,225,955
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Short-Term Investments -- 10.1%
Face Amount
Security (000's omitted) Value
- --------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
5.45%, 5/1/98 $ 7,398 $ 7,398,000
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Total Short-Term Investments
(identified cost $7,398,000) $ 7,398,000
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Total Investments -- 100.0%
(identified cost $66,312,598) $73,623,955
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Other Assets, Less Liabilities -- 0.0% $ 3,080
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Net Assets -- 100.0% $73,627,035
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* Non-income producing security.
See notes to financial statements
5
<PAGE>
Eaton Vance Tax-Managed Emerging Growth Fund as of April 30, 1998
FINANCIAL STATEMENTS (Unaudited)
Statement of Assets and Liabilities
As of April 30, 1998
Assets
- -------------------------------------------------------------------------------
Investments at value (Note 1A), (identified cost, $66,312,598) $73,623,955
Cash 1,641
Receivable for investments sold 1,281,746
Receivable for Fund shares sold 2,355,213
Dividends receivable 13,493
Deferred organization expense (Note 1D) 18,265
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Total assets $77,294,313
- -------------------------------------------------------------------------------
Liabilities
- -------------------------------------------------------------------------------
Payable for investments purchased $ 2,675,202
Payable for Fund shares redeemed 970,670
Payable to affiliate for shareholder services (Note 6) 523
Accrued expenses 20,883
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Total liabilities $ 3,667,278
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Net Assets $73,627,035
- -------------------------------------------------------------------------------
Sources of Net Assets
- -------------------------------------------------------------------------------
Paid-in capital $67,941,893
Accumulated net realized loss on investments
(computed on the basis of identified cost) (1,410,440)
Accumulated net investment loss (215,775)
Net unrealized appreciation of investments (computed
on the basis of identified cost) 7,311,357
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Total $73,627,035
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Class A Shares
- -------------------------------------------------------------------------------
Net Assets $20,900,977
Shares Outstanding 1,869,075
Net Asset Value and Redemption Price Per Share
(net assets / shares of beneficial interest outstanding) $ 11.18
Offering Price Per Share (100 / 94.25 of net asset $ 11.86
value per share)
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Class B Shares
- -------------------------------------------------------------------------------
Net Assets $40,501,151
Shares Outstanding 3,631,881
Net Asset Value, Offering Price and Redemption Price
Per Share (Note 7) (net assets / shares of $ 11.15
beneficial interest outstanding)
- -------------------------------------------------------------------------------
Class C Shares
- -------------------------------------------------------------------------------
Net Assets $12,224,907
Shares Outstanding 1,098,542
Net Asset Value, Offering Price and Redemption Price
Per Share (Note 7) (net assets / shares of $ 11.13
beneficial interest outstanding)
- -------------------------------------------------------------------------------
Statement of Operations
For the Six Months Ended
April 30, 1998
Investment Income (Note 1G)
- -------------------------------------------------------------------------------
Dividends $ 35,949
Interest 89,141
- -------------------------------------------------------------------------------
Total investment income $ 125,090
- -------------------------------------------------------------------------------
Expenses
- -------------------------------------------------------------------------------
Investment Adviser fee (Note 3) $ 118,479
Compensation of Trustees not members of the
Investment Adviser's organization (Note 3) 630
Distribution and service fees (Note 6)
Class B 80,228
Class C 29,712
Custodian fee 58,614
Transfer and dividend disbursing agent fees 24,815
Registration fees 17,043
Printing and postage 3,822
Amortization of organization expenses (Note 1D) 992
Legal and accounting services 335
Miscellaneous 14,344
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Total expenses $ 349,014
- -------------------------------------------------------------------------------
Net investment loss $ (223,924)
- -------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) on Investments
- -------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $(1,336,977)
- -------------------------------------------------------------------------------
Net realized loss on investment transactions $(1,336,977)
- -------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ 7,765,100
- -------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) $ 7,765,100
of investments
- -------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 6,428,123
- -------------------------------------------------------------------------------
Net increase in net assets from operations $ 6,204,199
- -------------------------------------------------------------------------------
On sales of $50,000 or more, the offering price of Class A shares is reduced.
See notes to financial statements
6
<PAGE>
Eaton Vance Tax-Managed Emerging Growth Fund as of April 30, 1998
FINANCIAL STATEMENTS CONT'D
Statement of Changes in Net Assets
Six Months Ended
Increase (Decrease) April 30, 1998 For the Period Ended
in Net Assets (Unaudited) October 31, 1997*
- --------------------------------------------------------------------------------
From operations --
Net investment income (loss) $ (223,924) $ 8,149
Net realized loss on
investment transactions (1,336,977) (73,463)
Net change in unrealized
appreciation (depreciation)
of investments 7,765,100 (453,743)
- --------------------------------------------------------------------------------
Net increase (decrease) in net
assets from operations $ 6,204,199 $ (519,057)
- --------------------------------------------------------------------------------
Transactions in shares of
beneficial interest (Note 5) --
Proceeds from sale of shares
Class A $ 17,062,040 $ 4,869,539
Class B 30,245,463 8,974,780
Class C 10,191,526 2,116,676
Cost of shares redeemed
Class A (1,820,351) (816,967)
Class B (1,844,635) (36,915)
Class C (999,263) --
- --------------------------------------------------------------------------------
Net increase in net assets from
Fund share transactions $ 52,834,780 $ 15,107,113
- --------------------------------------------------------------------------------
Net increase in net assets $ 59,038,979 $ 14,588,056
- --------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------
At beginning of period $ 14,588,056 $ --
- --------------------------------------------------------------------------------
At end of period $ 73,627,035 $ 14,588,056
- --------------------------------------------------------------------------------
Accumulated undistributed
net investment income
(loss) included in net assets
- --------------------------------------------------------------------------------
At end of period $ (215,775) $ 8,149
- --------------------------------------------------------------------------------
* For the period from the start of business, September 25, 1997, to October 31,
1997.
See notes to financial statements
7
<PAGE>
Eaton Vance Tax-Managed Emerging Growth Fund as of April 30, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Six Months Ended
April 30, 1998 Period Ended
(Unaudited) October 31, 1997
--------------------------------------------------------------------------
Class A Class B Class C Class A* Class B** Class C**
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of period $ 9.740 $ 9.740 $ 9.720 $10.000 $ 10.000 $ 10.000
- -----------------------------------------------------------------------------------------------------------------------------------
Income from operations
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) $ (0.024) $(0.043) $ (0.045) $ 0.008 $ 0.005 $ 0.003
Net realized and unrealized gain (loss) on investments 1.464 1.453 1.455 (0.268) (0.265) (0.283)
- -----------------------------------------------------------------------------------------------------------------------------------
Net income (loss) from operations $ 1.440 $ 1.410 $ 1.410 $(0.260) $ (0.260) $ (0.280)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End of period $ 11.180 $11.150 $ 11.130 $ 9.740 $ 9.740 $ 9.720
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return/(1)/ 14.78% 14.48% 14.51% (2.60)% (2.60)% (2.80)%
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $ 20,901 $40,501 $ 12,225 $ 3,925 $ 8,613 $ 2,051
Ratio of expenses to average daily net assets 1.26%+ 1.99%+ 2.23%+ 0.63%+ 1.37%+ 1.56%+
Ratio of net investment income (loss) to average
daily net assets (0.61)%+ (1.34)%+ (1.58)%+ 1.83%+ 1.13%+ 0.90%+
Portfolio Turnover 38.00% 38.00% 38.00% 7.00% 7.00% 7.00%
- -----------------------------------------------------------------------------------------------------------------------------------
Average commission rate (per share)/(2)/ $ 0.0586 $0.0586 $ 0.0586 $0.0600 $ 0.0600 $ 0.0600
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, September 25, 1997, to October
31, 1997.
** For the period from the commencement of offerings of Class B and Class C
shares, September 29, 1997, to October 31, 1997.
/(1)/Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the ex-date. Total return is not
computed on an annualized basis.
/(2)/Average commission rate paid is computed by dividing the total dollar
amount of commissions paid during the fiscal year by the total number of
shares purchased and sold during the fiscal year for which commissions were
charged.
See notes to financial statements
8
<PAGE>
Eaton Vance Tax-Managed Emerging Growth Fund as of April 30, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1 Significant Accounting Policies
------------------------------------------------------------------------------
Eaton Vance Tax-Managed Emerging Growth Fund (the Fund) is registered under
the Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund, which is a series of Eaton Vance
Mutual Funds Trust (the Trust), seeks to provide long-term after-tax returns
by investing in a diversified portfolio of equity securities of emerging
growth companies. The Declaration of Trust permits the Trustees to issue
interests in the Fund. The Fund has three classes of shares. Class A shares
are sold at the effective public offering price, which is based on the
effective net asset value per share plus the applicable sales charge. Class B
and Class C shares are sold at net asset value and are subject to a contingent
deferred sales charge (see Note 7). All classes of shares have equal rights to
assets and voting privileges. Realized and unrealized gains and losses and net
investment income, other than class specific expenses, are allocated daily to
each class of shares based on the relative net assets of each class to the
total net assets of the Fund. Each class of shares differs in its distribution
plan and certain other class specific expenses. 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 -- Marketable securities, including options, that are
listed on foreign or U.S. securities exchanges or in the NASDAQ National
Market System are valued at closing sale prices, on the exchange where such
securities are principally traded. Futures positions on securities or
currencies are generally valued at closing settlement prices. Unlisted or
listed securities for which closing sale prices are not available are valued
at the mean between the latest bid and asked prices. Short-term debt
securities with a remaining maturity of 60 days or less are valued at
amortized cost, which approximates value. Other fixed income and debt
securities, including listed securities and securities for which price
quotations are available, will normally be valued on the basis of valuations
furnished by a pricing service. Investments for which valuations or market
quotations are unavailable are valued at fair value using methods determined
in good faith by or at the direction of the Trustees.
B 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, including any
net realized gain on investments. Accordingly, no provision for federal income
or excise tax is necessary. At October 31, 1997, the Fund, for federal income
tax purposes, had a capital loss carryover of $56,332 which will reduce the
taxable income arising from future net realized gain on investments, 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 or excise tax. Such
capital loss carryover will expire on October 31, 2005.
C Futures Contracts -- Upon the entering of a financial futures contract, the
Fund is required to deposit either in cash or securities an amount ("initial
margin") equal to a certain percentage of the purchase price indicated in the
financial futures contract. Subsequent payments are made or received by the
Fund ("margin maintenance") each day, dependent on daily fluctuations in the
value of the underlying security, and are recorded for book purposes as
unrealized gains or losses by the Fund. The Fund's investment in financial
futures contracts is designed to hedge against anticipated future changes in
price of current or anticipated Fund positions. Should prices move
unexpectedly, the Fund may not achieve the anticipated benefits of the
financial futures contracts and may realize a loss.
D Deferred Organization Expenses -- Costs incurred by the Fund 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 revenue and expense during the reporting period. Actual results could
differ from those estimates.
F Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian to the Fund. Pursuant
9
<PAGE>
Eaton Vance Tax-Managed Emerging Growth Fund as of April 30, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
to the custodian agreement, IBT receives a fee reduced by credits which are
determined based on the average cash balances the Fund maintains with IBT. All
significant credit balances used to reduce the Fund's custodian fees are
reported as a reduction of operating expenses on the Statement of Operations.
G Other -- Investment transactions are accounted for on the date the
investments are purchased or sold. Dividend income is recorded on the
ex-dividend date. However, if the ex-dividend date has passed, certain
dividends from foreign securities are recorded as the Fund is informed of the
ex-dividend date. Interest income is recorded on the accrual basis.
H Interim Financial Statements -- The interim financial statements relating to
April 30, 1998 and for the six months then ended have not been audited by
independent certified public accountants, but in the opinion of the Fund's
management, reflect all adjustments, consisting only of normal recurring
adjustments, necessary for the fair presentation of the financial statements.
2 Distributions to Shareholders
------------------------------------------------------------------------------
It is the present policy of the Fund to make (a) at least one distribution
annually (normally in December) of all or substantially all of the net
investment income and (b) at least one distribution annually of all or
substantially all of the net realized capital gains (reduced by any available
capital loss carryforwards from prior years). Income dividends are declared
separately for each class of shares. Shareholders may reinvest all
distributions in shares of the Fund without a sales charge at the net asset
value per share as of the close of business on the ex-date.
The Fund distinguishes between distributions on a tax basis and a financial
reporting basis. Generally accepted accounting principles require that only
distributions in excess of tax basis earnings and profits be reported in the
financial statements as a return of capital. Differences in the recognition or
classification of income between the financial statements and tax earnings and
profits which result in temporary over distributions for financial statement
purposes only 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 Investment Adviser Fee and Other Transactions with Affiliates
------------------------------------------------------------------------------
The investment adviser fee is earned by Eaton Vance Management (EVM) as
compensation for management and investment advisory services rendered to the
Fund. EVM receives a monthly advisory fee in the amount of 5/96th of 1% (equal
to 0.625% annually) of the average daily net assets of the Fund up to $500
million, and at reduced rates as daily net assets exceed that level. For the
six months ended April 30, 1998, the fee amounted to $118,479.
Except as to Trustees of the Fund who are not members of EVM's organization,
officers and Trustees receive remuneration for their services to the Fund out
of such investment adviser fee. Trustees of the Fund who are not affiliated
with the Investment Adviser may elect to defer receipt of all or a percentage
of their annual fees in accordance with the terms of the Trustees Deferred
Compensation Plan. For the six months ended April 30, 1998, no significant
amounts have been deferred.
Certain officers and Trustees of the Fund are officers and directors/trustees
of EVM.
4 Federal Income Tax Basis of Investments
------------------------------------------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned at April 30, 1998, as computed on a federal income tax
basis, are as follows:
Aggregate cost $ 66,312,598
------------------------------------------------------------------------------
Gross unrealized appreciation $ 7,797,562
Gross unrealized depreciation (486,205)
------------------------------------------------------------------------------
Net unrealized appreciation $ 7,311,357
------------------------------------------------------------------------------
10
<PAGE>
Eaton Vance Tax-Managed Emerging Growth Fund as of April 30, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
5 Shares of Beneficial Interest
------------------------------------------------------------------------------
The Declaration of the Trust permits the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
Six Months Ended
April 30, 1998 Period Ended
Class A (Unaudited) October 31, 1997*
------------------------------------------------------------------------------
Sales 1,638,062 483,988
Redemptions (171,881) (81,094)
Net increase 1,466,181 402,894
------------------------------------------------------------------------------
* For the period from the start of business, September 25, 1997, to
October 31, 1997.
Six Months Ended
April 30, 1998 Period Ended
Class B (Unaudited) October 31, 1997**
------------------------------------------------------------------------------
Sales 2,921,757 887,994
Redemptions (174,165) (3,705)
------------------------------------------------------------------------------
Net increase 2,747,592 884,289
------------------------------------------------------------------------------
** For the period from the commencement of offering of Class B shares,
September 29, 1997, to October 31, 1997.
Six Months Ended
April 30, 1998 Period Ended
Class C (Unaudited) October 31, 1997***
------------------------------------------------------------------------------
Sales 985,097 210,914
Redemptions (97,469) -
------------------------------------------------------------------------------
Net increase 887,628 210,914
------------------------------------------------------------------------------
*** For the period from the commencement of offering of Class C shares,
September 29, 1997, to October 31, 1997.
6 Distribution and Service Fees
------------------------------------------------------------------------------
The Fund has adopted a Service Plan for the Fund's Class A shares (the
"Class A Plan") that is designed to meet the service fee requirements of the
sales charge rule of the National Association of Securities Dealers, Inc.
The Class A Plan provides that the Fund may make service fee payments for
personal services and/or the maintenance of shareholder accounts to the
Principal Underwriter, financial service firms ("Authorized Firms") and
other persons in amounts not exceeding 0.25% of average daily net assets for
Class A shares for any fiscal year. The Trustees have initially implemented
the Class A Plan by authorizing Class A to make quarterly service fee
payments to the Principal Underwriter and Authorized Firms in amounts not
expected to exceed 0.25% of the average daily net assets for any fiscal year
which is based on the value of Class A shares sold by such persons and
remaining outstanding for at least twelve months. The Fund expects to begin
accruing for Class A service fees during the quarter ending December 31,
1998.
The Fund has also adopted distribution plans (Class B and Class C Plan, the
Plans) pursuant to Rule 12b-1 under the Investment Company Act of 1940. The
Plans, which are approved annually, require the Fund to pay the Principal
Underwriter, Eaton Vance Distributors, Inc. (EVD), amounts equal to 1/365 of
0.75% of the Fund's Class B and Class C 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, which are equivalent to
the sum of (i) 5% and 6.25% of the aggregate amount received by the Fund for
Class B and Class C shares sold, respectively, plus (ii) distribution fees
calculated by applying the rate of 1% over the prevailing prime rate to the
outstanding balance of Uncovered Distribution Charges due EVD, of each
respective class reduced by the aggregate amount of contingent deferred
sales charges (see Note 7) and daily amounts theretofore paid to EVD by each
respective class. The amount payable to EVD with respect to each day is
accrued on such day as a liability of the Fund and, accordingly, reduces the
Fund's net assets. For the six months ended April 30, 1998, the Fund paid or
accrued $80,228 and $22,284, to or payable to EVD, representing 0.75%
(annualized) of average daily net assets of Class B and Class C shares,
respectively. At April 30, 1998, the amount of Uncovered Distribution
Charges of EVD calculated under the Plans was approximately $1,596,000 and
$633,000 for Class B and Class C shares, respectively.
11
<PAGE>
Eaton Vance Tax-Managed Emerging Growth Fund as of April 30, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
In addition, Class B and Class C Plans authorize the Fund to make payments of
service fees to the Principal Underwriter, Authorized Firms, and other persons
in amounts not exceeding 0.25% of their average daily net assets for each
fiscal year. Service fee payments are made for personal services and/or the
maintenance of shareholder accounts. Under the Class B Plan, this fee is paid
quarterly in arrears based on the value of Class B shares sold by such persons
and remaining outstanding for at least twelve months. Class B expects to begin
accruing for its service fees during the quarter ending December 31, 1998.
Under the Class C Plan, the Principal Underwriter currently expects to pay to
an Authorized Firm (a) a service fee (except on exchange transactions and
reinvestments) at the time of sale equal to 0.25% of the purchase price of the
Class C shares sold by such Firm and (b) monthly service fees approximately
equivalent to 1/12 of 0.25% of the value of Class C shares sold by such Firm
and remaining outstanding for at least one year. During the first year after a
purchase of Class C shares, the Principal Underwriter will retain the service
fee as reimbursement for the service fee payment made to Authorized Firms at
the time of sale. The Fund paid or accrued service fees to or payable to EVD
for the six months ended April 30, 1998 in the amount of $7,428 for Class C.
Service fees are separate and distinct from the sales commissions and
distribution fees payable by the Fund to EVD, and as such are not subject to
automatic discontinuance when there are no outstanding Uncovered Distribution
Charges of EVD.
7 Contingent Deferred Sales Charge
------------------------------------------------------------------------------
A contingent deferred sales charge (CDSC) may be imposed on certain Class A
shares redeemed within 12 months of purchase. A CDSC is imposed on any
redemption of Class B shares made within six years of purchase. A CDSC is
imposed on any redemption of Class C shares made within one year of purchase.
Generally, the CDSC is based on 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. Class A shares may be subject to a 1% CDSC if
redeemed within 12 months of purchase (depending on the circumstances of
purchase). For Class B shares the CDSC is imposed at declining 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. Class C shares
will be subject to a 1% CDSC if redeemed within 12 months of purchase.
No CDSC is levied on shares which have been sold to EVM or its affiliates or
to their respective employees. CDSC charges are paid to EVD to reduce the
amount of Uncovered Distribution Charges calculated under the Class B and
Class C Distribution Plans. CDSC received when no Uncovered Distribution
Charges exist will be retained by the Fund. EVD received approximately $14,000
and $5,000 of CDSC paid by shareholders of Class B and Class C shares,
respectively, during the six months ended April 30, 1998. There was no CDSC
paid by shareholders of Class A shares during the six months ended April 30,
1998.
8 Line of Credit
------------------------------------------------------------------------------
The Fund participates with other funds and portfolios managed by EVM and its
affiliates in a $100 million unsecured line of credit agreement with a group
of banks. The Fund may temporarily borrow from the line of credit to satisfy
redemption requests or settle investment transactions. Interest is charged to
each fund or portfolio based on its borrowings at an amount above the banks'
Eurodollar rate or federal funds advanced funding rate. In addition, a fee
computed at an annual rate of 0.10% on the daily unused portion of the line of
credit is allocated among the participating funds and portfolios at the end of
each quarter. The Fund did not have any significant borrowings or allocated
fees during the six months ended April 30, 1998.
9 Investment Transactions
------------------------------------------------------------------------------
Purchases and sales of investments, other than short-term obligations,
aggregated $60,169,564 and $13,983,241, respectively, for the six months ended
April 30, 1998.
12
<PAGE>
Eaton Vance Tax-Managed Emerging Growth Fund as of April 30, 1998
INVESTMENT MANAGEMENT
Eaton Vance Tax-Managed Emerging Growth Fund
Officers
M. Dozier Gardner
President and Trustee
James B. Hawkes
Vice President and Trustee
William H. Ahern, Jr.
Vice President
Thomas J. Fetter
Vice President
Robert B. MacIntosh
Vice President
Michael B. Terry
Vice President
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Independent Trustees
Donald R. Dwight
President, Dwight Partners, 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
Formerly Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
13
<PAGE>
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<PAGE>
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<PAGE>
Investment Adviser and Administrator of Eaton Vance
Tax-Managed Emerging Growth Fund
Eaton Vance Management
24 Federal Street
Boston, MA02110
Principal Underwriter
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617)482-8260
Custodian
Investors Bank & Trust Company
200 Clarendon Street,16th Floor
Boston, MA 02116
Transfer Agent
First Data Investor Services Group
Attention: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
Eaton Vance
Tax-Managed Emerging Growth Fund
24 Federal Street
Boston, MA 02110
- --------------------------------------------------------------------------------
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its sales charges and
expenses. Please read the prospectus carefully before you invest or send money.
- --------------------------------------------------------------------------------
