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{LOGO} Investing
EATON VANCE for the
Mutual Funds 21st
Century(R)
Eaton Vance Cash Management Fund
Eaton Vance Liquid Assets Fund
Eaton Vance Money Market Fund
Diversified money market mutual funds
Eaton Vance Tax Free Reserves
A diversified tax-exempt money market mutual fund
Prospectus Dated
May 1, 1999
The Securities and Exchange Commission has not approved or disapproved these
securities or determined whether this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
Information in this prospectus
Page Page
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Fund Summaries 2 Sales Charges 8
Investment Objective & Principal Redeeming Shares 9
Policies and Risks 5 Shareholder Account
Management and Organization 6 Features 9
Valuing Shares 7 Tax Information 10
Purchasing Shares 7 Financial Highlights 11
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This prospectus contains important information about the Funds and the services
available to shareholders. Please save it for reference.
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FUND SUMMARIES
Eaton Vance Cash Management Fund . Eaton Vance Liquid Assets Fund
Eaton Vance Money Market Fund
Investment Objective and Principal Strategies. Each Fund's investment objective
is to provide as high a rate of income as may be consistent with preservation of
capital and maintenance of liquidity.
The Funds currently invest their assets in a separate diversified registered
investment company with the same objective and policies. Permissible investments
include various types of high quality, U.S. dollar denominated money market
instruments of domestic and foreign issuers, such as securities issued or
guaranteed by the U. S. government or its agencies and instrumentalities, and
high-quality, short-term obligations issued by banks and corporations.
Principal Risk Factors. Each Fund's yield will change as the short-term
securities in its portfolio mature and the proceeds are reinvested in securities
with different interest rates.
In addition, certain events could reduce a Fund's income level and/or share
price, such as: a sharp rise in prevailing short-term interest rates; adverse
developments in the banking industry, which issues or guarantees many money
market securities; economic, political or other developments affecting foreign
issuers of money market securities; changes in the credit quality of issuers;
and default by a counterparty in a portfolio transaction.
An investment in a Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although each Fund seeks
to preserve the value of an investment at $1.00 per share, it is possible to
lose money by investing in a Fund.
Performance Information. The following bar charts provide information about the
Funds' performance. Although past performance is no guarantee of future results,
this performance information demonstrates the risk that the value of your
investment will change. The following returns are for each calendar year through
December 31, 1998 and do not reflect sales charges. If the sales charge was
reflected, the returns would be lower. The total returns for the Money Market
Fund for the period prior to April 5, 1995 reflect the performance of Cash
Management Fund. These returns have not been adjusted for differences in
expenses between the two funds.
Cash Management Fund
8.9% 7.8% 5.5% 3.1% 2.5% 3.5% 5.4% 4.8% 4.9% 4.8%
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1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
The Fund's highest quarterly total return was 2.3% for the quarter ended June
30, 1989, and its lowest quarterly return was 0.5% for the quarter ended March
31, 1994. The Fund's annualized and current effective yields for the seven-day
period ended December 31, 1998 were 4.36% and 4.46%, respectively. For current
yield information call 1-800-225-6265.
Liquid Assets Fund
7.7% 6.7% 4.7% 3.0% 1.5% 3.3% 5.2% 4.4% 4.3% 4.2%
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1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
The Fund's highest quarterly total return was 2.1% for the quarter ended
December 31, 1989, and its lowest quarterly return was 0.2% for the quarter
ended March 31, 1993. The Fund's annualized and current effective yields for the
seven-day period ended December 31, 1998 were 3.77% and 3.84%, respectively. For
current yield information call 1-800-225-6265.
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Money Market Fund
8.9% 7.8% 5.5% 3.1% 2.5% 3.5% 4.5% 3.8% 3.9% 3.8%
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1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
The Fund's highest quarterly total return was 2.3%% for the quarter ended June
30, 1989, and its lowest quarterly return was 0.6% for the quarter ended March
31, 1994. The Fund's annualized and current effective yields for the seven-day
period ended December 31, 1998 were 3.41% and 3.47%, respectively. For current
yield information call 1-800-225-6265.
Fund Fees and Expenses. These tables describe the fees and expenses that you may
pay if you buy and hold shares.
Shareholder Fees
(fees paid directly from Cash Liquid Assets Money Market
your investment) Fund Fund Fund
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Maximum Sales Charge (Load)
(as a percentage of
offering price) None None None
Maximum Deferred Sales Charge
(as a percentage of the
lower of net asset value at
time of purchase or time of
redemption) None 5.00% 5.00%
Sales Charge Imposed on
Reinvested Distributions None None None
Exchange Fee None None None
Annual Fund Operating Expenses
(expenses that are deducted from Cash Liquid Assets Money Market
Fund assets) Fund Fund Fund
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Management Fees 0.50% 0.50% 0.50%
Distribution and Service
(12b-1) Fees* None 0.22% 0.85%
Other Expenses** 0.35% 0.71% 0.51%
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Total Annual Fund
Operating Expenses 0.85% 1.43% 1.86%
* Long-term shareholders of Money Market Fund shares may pay more than the
economic equivalent of the front-end sales charge permitted by the National
Association of Securities Dealers, Inc.
** Other Expenses for the Money Market Fund does not include an allocation of
expenses to Eaton Vance in the amount of 0.04%.
Example. This Example is intended to help you compare the cost of investing in a
Fund with the cost of investing in other mutual funds. The Example assumes that
you invest $10,000 in a Fund for the time periods indicated and then redeem all
of your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the operating expenses remain the
same. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
1 Year 3 Years 5 Years 10 Years
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Cash Fund $ 87 $ 271 $ 471 $ 1,049
Liquid Assets Fund $ 646 $ 852 $ 982 $ 1,713
Money Market Fund $ 689 $ 985 $ 1,206 $ 2,180
You would pay the following expenses if you did not redeem your shares:
1 Year 3 Years 5 Years 10 Years
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Cash Fund $ 87 $ 271 $ 471 $ 1,049
Liquid Assets Fund $ 146 $ 452 $ 782 $ 1,713
Money Market Fund $ 189 $ 585 $ 1,006 $ 2,180
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EATON VANCE TAX FREE RESERVES
Investment Objective and Principal Strategies. The Fund's investment objective
is to provide a means whereby investors may earn as high a rate of income exempt
from regular federal income tax as may be consisitent with the preservation of
capital and maintenance of liquidity.
The Fund seeks to acheive its objective by investing in a diversified portfolio
of high quality obligations, including bonds, notes and commercial paper, issued
by or on behalf of states, territories and possessions of the United States and
their political subdivisions, agencies and instrumentalities, and the District
of Columbia, the interest from which is exempt from regular federal income tax.
Principal Risk Factors. The Fund's yield will change as the short-term
securities it holds mature and the proceeds are reinvested in securities with
different interest rates.
In addition, certain events could reduce income or share price, such as: a sharp
rise in prevailing short-term interest rates; adverse developments affecting
municipal issuers, including tax, legislative or political initiatives; changes
in the credit quality of issuers or the providers of credit support; and default
by a counterparty to portfolio transactions.
An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Fund seeks to
preserve the value of an investment at $1.00 per share, it is possible to lose
money by investing in the Fund.
Performance Information. The following bar chart and table provide information
about the Fund's performance. Although past performance is no guarantee of
future results, this performance information demonstrates the risk that the
value of your investment will change. The following returns are for each
calendar year through December 31, 1998.
5.3% 3.9% 2.4% 1.9% 2.4% 3.5% 3.1% 3.2% 3.1%
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1990 1991 1992 1993 1994 1995 1996 1997 1998
The Fund's highest quarterly total return was 1.5% for the quarter ended June
30, 1989, and its lowest quarterly return was 0.5% for the quarter ended March
31, 1994. The Fund's annualized and current effective yields for the seven-day
period ended December 31, 1998 were 3.05% and 3.09%, respectively. The
taxable-equivalent current and effective yields for the seven-day period ended
December 31, 1998 were 4.42% and 4.73%, respectively (assuming a federal tax
rate of 31%). For current yield information call 1-800-225-6265.
Fund Fees and Expenses. These tables describe the fees and expenses that you may
pay if you buy and hold shares.
Shareholder Fees Tax Free
(fees paid directly from your investment) Reserves
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Maximum Sales Charge (Load)
(as a percentage
of offering price) None
Maximum Deferred Sales Charge
(as a percentage of the lower of
net asset value at time of purchase
or time of redemption) None
Sales Charge Imposed on
Reinvested Distributions None
Exchange Fee None
Annual Fund Operating Expenses Tax Free
(expenses that are deducted from Fund assets) Reserves
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Management Fees* 0.50%
Distribution and Service (12b-1) Fees None
Other Expenses 0.26%
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Total Annual Fund Operating Expenses 0.76%
* Management Fees do not include an expense reduction of 0.28% by the
investment adviser.
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Example. This Example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The Example assumes
that you invest $10,000 in the Fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The Example also assumes
that your investment has a 5% return each year and that the operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
1 Year 3 Years 5 Years 10 Years
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Tax Free Reserves $ 78 $ 243 $ 422 $ 942
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INVESTMENT OBJECTIVES & PRINCIPAL POLICIES AND RISKS
Cash Management Fund, Liquid Assets Fund and Money Market Fund. Each Fund's
investment objective is to provide as high a rate of income as may be consistent
with preservation of capital and maintenance of liquidity. Each Fund currently
seeks to meet its investment objective by investing in Cash Management
Portfolio, a separate open-end investment company that has the same objective
and policies. Each Fund's investment objective and policies may be changed by
the Trustees without shareholder approval; as a matter of policy, however, the
Trustees would not materially change the investment objective of a Fund without
shareholder approval. Each Fund seeks to maintain a constant net asset value of
$1 per share, although there can be no assurance it will be able to do so.
The Portfolio invests in high quality, U.S. dollar-denominated money market
instruments of domestic and foreign issuers, including U.S. Government
securities and prime commercial paper. When appropriate, the Portfolio may also
invest in high-grade short-term obligations other than prime commercial paper as
well as certificates of deposit, bankers' acceptances and other short-term
securities issued by domestic or foreign banks or their subsidiaries or
branches. The Portfolio may invest without limit in U.S. dollar-denominated
obligations of foreign issuers, including foreign banks. Such investments
involve special risks. These include unfavorable political and economic
developments, possible withholding taxes, seizure of foreign deposits, interest
limitations or other governmental restrictions which might affect payment of
principal and interest. Additionally, there may be less public information
available about foreign banks and their branches. Foreign branches of foreign
banks are not regulated by U.S. banking authorities, and generally are not bound
by accounting, auditing and financial reporting standards comparable to U.S.
banks. The Portfolio does not limit the amount of its assets which can be
invested in one type of instrument or in any foreign country.
Tax Free Reserves. The Fund's investment objective is provide a means whereby
investors may earn as high a rate of income exempt from regular federal income
tax as may be consistent with the preservation of capital and maintenance of
liquidity. The Fund's investment objective and policies may be changed by the
Trustees without shareholder approval; as a matter of policy, however, the
Trustees would not materially change the investment objective of the Fund
without shareholder approval. The Fund seeks to maintain a constant net asset
value of $1 per share, although there can be no assurance it will be able to do
so.
The Fund seeks to achieve its objective by investing at least 85% of its assets
in a diversified portfolio of high quality obligations, including bonds, notes
and commercial paper, issued on behalf of states, territories and possessions of
the United States and their political subdivisions, agencies and
instrumentalities, and the District of Columbia, the interest from which is
exempt from federal income tax. The Fund may acquire stand-by commitments with
respect to portfolio securities and, with respect to 10% of net assets, may
purchase shares of unaffiliated investment companies with the same objective.
A portion of the dividends paid by the Fund may be subject to federal income
tax, and dividends may be subject to state and local taxes. As a matter of
fundamental policy which may not be changed unless authorized by a shareholder
vote, the Fund may not purchase any securities which would cause more than 20%
of the value of its total assets to be invested in securities the interest on
which is not exempt from federal income tax. Interest income from certain types
of municipal obligations may be subject to the federal alternative minimum tax
(the "AMT"). On December 31, 1998, the Fund had 14.7% of its net assets invested
in such obligations. Distributions to corporate investors of certain interest
income may also be subject to the AMT.
Common Investment Practices. The Portfolio and Tax Free Reserves will invest
only in U.S. dollar-denominated money market instruments meeting credit criteria
which the Trustees believe present minimal credit risk, and that are (i)
short-term obligations rated in one of the two highest short-term ratings
categories by at least two nationally recognized rating services (or if only one
rating service has rated the security, by that service), or (ii) unrated
securities determined by the investment adviser to be of comparable quality.
Each of the Portfolio and Tax Free Reserves will maintain a dollar-weighted
average maturity of 90 days or less and will not invest in securities with
remaining maturities of more than 397 days. The Portfolio and Tax Free Reserves
may invest in variable or floating-rate securities some of which provide for
periodic recovery of principal on demand. Under certain conditions, these
securities may be deemed to have remaining maturities equal to the time
remaining until the next interest adjustment date or the date on which principal
can be recovered on demand. The Portfolio will not invest more than 5%
(determined at the time of investment) of its total assets in securities rated
in the second highest short-term rating category or comparable unrated
securities. Tax Free Reserves has a similar 5% limit on investments in certain
municipal obligations which rely on the credit of a corporate entity. Neither
the Portfolio nor Tax Free Reserves will purchase securities of any issuer if,
immediately thereafter, more than 5% of its total assets would be invested in
securities of that issuer.
Consistent with their investment objectives, the Portfolio and Tax Free Reserves
will attempt to maximize yields by portfolio trading and by buying and selling
portfolio investments in anticipation of or in response to changing economic and
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money market conditions and trends. The Portfolio and Tax Free Reserves may also
invest to take advantage of what their investment advisers believe to be
temporary disparities in yields of different segments of the money market or
among particular instruments within the same segment of the market.
The Portfolio and Tax Free Reserves may purchase securities on a when-issued
basis and for future delivery by means of "forward commitments". The Portfolio
may enter into repurchase agreements. These transactions must be fully
collateralized at all times, but involve some risk if the counterparty should
default on its obligations or if the Portfolio is delayed or prevented from
recovering the collateral.
Each of the Portfolio and Tax Free Reserves may borrow amounts up to one-third
of the value of its total assets (including borrowings), but it will not borrow
more than 5% of the value of its total assets except to satisfy redemption
requests or for other temporary purposes. Such borrowings would result in
increased expense and, while they are outstanding, would magnify the potential
for increases or decreases in the value of Fund shares. Neither the Portfolio
nor Tax Free Reserves will purchase additional investment securities while
outstanding borrowings exceed 5% of the value of total assets.
Like most mutual funds, the Funds and the Portfolio rely on computers in
conducting daily business and processing information. There is a concern that on
January 1, 2000 some computer programs will be unable to recognize the new year
and as a consequence computer malfunctions will occur. Eaton Vance is taking
steps that it believes are reasonably designed to address this potential problem
and to obtain satisfactory assurance from other service providers to the Funds
and the Portfolio that they are also taking steps to address the issue. There
can, however, be no assurance that these steps will be sufficient to avoid any
adverse impact on the Funds and the Portfolio or shareholders. The Year 2000
concern may also adversely impact issuers of securities held by a Fund or the
Portfolio and the markets on which these securities trade. The foregoing
statement is subject to the Year 2000 Information and Readiness Disclosure Act,
which may protect Eaton Vance and the Funds and the Portfolio from liability
arising from the statement.
MANAGEMENT AND ORGANIZATION
Management. Each Portfolio's investment adviser is Boston Management and
Research ("BMR"), a subsidiary of Eaton Vance Management, 255 State Street,
Boston, Massachusetts 02109. Eaton Vance has been managing assets since 1924 and
managing mutual funds since 1931. Eaton Vance and its subsidiaries currently
manage over $36 billion on behalf of mutual funds, institutional clients and
individuals.
BMR manages the investments of the Portfolio and provides related office
facilities and personnel. Under its investment advisory agreement with Cash
Management Portfolio, BMR receives a monthly advisory fee of 1/24 of 1%
(equivalent to 0.50% annually) of the average daily net assets of Cash
Management Portfolio. For the fiscal year ended December 31, 1998, the Cash
Management Portfolio paid BMR advisory fees equivalent to 0.50% of its average
daily net assets.
Eaton Vance manages the investments of Tax Free Reserves and provides related
office facilities and personnel. Under its investment advisory agreement with
the Trust on behalf of Tax Free Reserves, Eaton Vance receives a monthly
advisory fee of 1/24 of 1% (equivalent to 0.50% annually) of the average daily
net assets of Tax Free Reserves. For the fiscal year ended December 31, 1998,
absent a fee reduction in the amount of 0.28%, Tax Free Reserves would have paid
Eaton Vance advisory fees equivalent to .50% of its average daily net assets.
Michael B. Terry is the portfolio manager of the Cash Management Portfolio
(since it commenced operations). He also manages other Eaton Vance portfolios,
has been an Eaton Vance portfolio manager for more than 5 years and is a Vice
President of Eaton Vance and BMR.
William H. Ahern, Jr. is the portfolio manager of Tax Free Reserves (since
1993). He also manages other Eaton Vance portfolios, has been an Eaton Vance
portfolio manager for more than 5 years and is a Vice President of Eaton Vance
and BMR.
The investment advisers and Tax Free Reserves and the Portfolio have adopted
Codes of Ethics governing personal securities transactions. Under the Codes,
Eaton Vance employees may purchase and sell securities (including securities
held by Tax Free Reserves and the Portfolio) subject to certain pre-clearance
and reporting requirements and other procedures.
Eaton Vance serves as administrator of the Cash, Liquid Assets and Money Market
Funds, providing the Funds with administrative services and related office
facilities. Eaton Vance does not currently receive a fee for serving as
administrator.
Organization. Each Fund is a series of Eaton Vance Mutual Funds Trust, a
Massachusetts business trust. The Portfolio and Tax Free Reserves will not hold
annual shareholder meetings, but may hold special meetings for matters that
require shareholder approval (like electing or removing trustees, approving
management contracts or changing investment policies that may only be changed
with shareholder approval). Because the Cash, Liquid Assets and Money Market
Funds invest in the Portfolio, it may be asked to vote on certain Portfolio
matters (like changes in certain Portfolio investment restrictions). When
necessary, the Cash, Liquid Assets and Money Market Funds will hold a meeting of
shareholders to consider the Portfolio matter and then vote their interest in
the Portfolio in proportion to the votes cast by its shareholders. The Cash,
Liquid Assets and Money Market Funds can withdraw from the Portfolio at any
time.
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Because the Funds use this combined prospectus, a Fund could be held liable for
a misstatement or omission made about another Fund. The Trust's Trustees
considered this in approving the use of a combined prospectus.
VALUING SHARES
Each Fund values its shares once each day only when the New York Stock Exchange
is open for trading (typically Monday through Friday), as of the close of
regular trading on the Exchange (normally 4:00 p.m. eastern time). The price of
Fund shares is their net asset value, which for the Cash, Liquid Assets and
Money Market Funds is derived from Portfolio holdings. The investments of the
Portfolio and the Funds are valued at amortized cost according to a Commission
rule. The Portfolio and the Funds will not normally have unrealized gains or
losses so long as they value their investments by the amortized cost method.
When purchasing or redeeming Fund shares, your investment dealer must
communicate your order to the principal underwriter by a specific time each day
in order for the purchase price or the redemption price to be based on that
day's net asset value per share. It is the investment dealer's responsibility to
transmit orders promptly. Each Fund may accept purchase and redemption orders as
of the time of their receipt by certain investment dealers (or their designated
intermediaries).
PURCHASING SHARES
The Cash Fund and Tax Free Reserves are offered to shareholders in exchange for
their Class A shares of the Eaton Vance Group of Funds. The Money Market Fund is
offered to shareholders in exchange for their Class B and Class C shares of the
Eaton Vance Group of Funds. (The Money Market Fund may not be a suitable
investment for investors who do not intend to use it as an exchange vehicle.)
The Liquid Assets Fund is currently closed to new investments, whether by
exchange or initial subscription.
Your initial investment must be at least $1,000. After your initial investment,
additional investments of $50 or more may be made at any time.
You may purchase Fund shares through your investment dealer (which includes
brokers, dealers and other financial institutions) who may charge you a fee for
executing the purchase for you or by requesting your bank to transmit
immediately available funds (Federal Funds) by wire to the address set forth
below. The Fund may suspend the sale of its shares at any time and any purchase
order may be refused.
To make an initial investment by wire, you must first telephone the Fund Order
Department at 800-225-6265 (extension 3) to advise of your action and to be
assigned an account number. Failure to call will delay the order. The Account
Application form which accompanies this prospectus must be promptly forwarded to
the transfer agent. Additional investments may be made at any time through the
same wire procedure. The Fund Order Department must be advised by telephone of
each transmission. Wire funds to:
ABA #011001438
Federal Reserve Bank of Boston
A/C Investors Bank & Trust Company
Further Credit Eaton Vance [name of ] Fund
A/C # [Insert your account number - see below]
Transactions in money market instruments normally require immediate settlement
in federal funds. The Funds intend at all times to be as fully invested as is
feasible in order to maximize earnings. Accordingly, purchase orders will be
executed at the net asset value next determined after their receipt by a Fund
only if the Fund has received payment in cash or in federal funds. If remitted
in other than the foregoing manner, such as by money order or personal check,
purchase orders will be executed as of the close of business on the second
Boston business day after receipt. Information on how to procure a Federal
Reserve Draft or to transmit federal funds by wire is available at banks. A bank
may charge for these services.
You may also make automatic investments of $50 or more each month or each
quarter from your bank account. You can establish bank automated investing on
the account application or by calling 1-800-262-1122. The minimum initial
investment amount and Fund policy of redeeming accounts with low account
balances are waived for bank automated investing accounts and certain group
purchase plans.
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SALES CHARGES
Contingent Deferred Sales Charge. Each Fund is subject to a CDSC on certain
redemptions. Shares of the Cash Fund and Tax Free Reserves acquired in an
exchange for Class A shares of an Eaton Vance fund subject to a CDSC will be
subject to the CDSC applicable to the exchanged shares at the time of their
purchase, unless such redemption is in connection with another exchange for
shares subject to such a charge. Liquid Assets and Money Market Fund shares are
subject to the following CDSC schedule:
Year of Redemption After Purchase CDSC
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First or Second 5%
Third 4%
Fourth 3%
Fifth 2%
Sixth 1%
Seventh or following 0%
The CDSC is based on the lower of the net asset value at the time of purchase or
the time of redemption. Shares acquired through the reinvestment of
distributions are exempt from the CDSC. Redemptions are made first from shares
that are not subject to a CDSC.
The CDSC is waived for redemptions pursuant to a Withdrawal Plan (see
"Shareholder Account Features") and in connection with certain redemptions from
tax-sheltered retirement plans. Call 1-800-225-6265 for details. The CDSC is
also waived following the death of all beneficial owners of shares, but only if
the redemption is requested within one year after death (a death certificate and
other applicable documents may be required).
Distribution and Service Fees. Each of the Money Market and Liquid Assets Funds
have adopted a plan under Rule 12b-1 that allows the Fund to pay distribution
fees for the sale and distribution of shares (so-called "12b-1 fees"). Money
Market Fund shares pay distribution fees of .75% of average daily net assets
annually. Liquid Assets Fund shares pay a service fee of .25% of average daily
net assets annually. Because these fees are paid from Fund assets on an ongoing
basis, they will increase your cost over time and may cost you more than paying
other types of sales charges. The Money Market Fund pays service fees for
personal and/or account services not exceeding .15% of average daily net assets
annually. Both Funds only pay service fees on shares that have been outstanding
for 12 months.
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REDEEMING SHARES
You can redeem shares in any of the following ways:
By Mail Send your request to the transfer agent along with any
certificates and stock powers. The request must be
signed exactly as your account is registered and
signature guaranteed. You can obtain a signature
guarantee at certain banks, savings and loan
institutions, credit unions, securities dealers,
securities exchanges, clearing agencies and registered
securities associations. You may be asked to provide
additional documents if your shares are registered in
the name of a corporation, partnership or fiduciary.
By Wire If you have given complete written authorization in
advance you may request that redemption proceeds of
$1,000 or more be wired directly to your bank account.
The bank designated may be any bank in the United
States. The request may be made by letter or telephone
to the Fund Order Department at 800-225-6265 (extension
3). You may be required to pay the costs of such
transaction; however, no costs are currently charged.
The Fund may suspend or terminate the expedited payment
procedure upon at least 30 days notice.
By Telephone You can redeem up to $50,000 b y calling the transfer
agent at 1-800-262-1122 on Monday through Friday, 9:00
a.m. to 4:00 p.m. (eastern time). Proceeds of a
telephone redemption can be mailed only to the account
address. Shares held by corporations, trusts or certain
other entities, or subject to fiduciary arrangements,
cannot be redeemed by telephone.
By Check If you hold shares of the Cash Fund and Tax Free
Reserves, you may redeem shares by check. You may
obtain the proper forms from Boston Safe Deposit and
Trust Company. The checks may be made payable by you to
the order of any person in any amount of $500 or more.
Through an Investment
Dealer Your investment dealer is responsible for transmitting
your order promptly. A dealer may charge a fee for
this service.
If you redeem shares, your redemption price will be based on the net asset value
per share next computed after the redemption request is received. Your
redemption proceeds will be paid in cash within seven days, reduced by the
amount of any applicable CDSC and any federal income tax required to be
withheld. Payments will be sent by mail unless you complete the Bank Wire
Redemptions section of the account application.
If you recently purchased shares, the proceeds of a redemption will not be sent
until the purchase check (including a certified or cashier's check) has cleared.
If the purchase check has not cleared, redemption proceeds may be delayed up to
15 days from the purchase date. If your account value falls below $750 (other
than due to market decline), you may be asked to either add to your account or
redeem it within 60 days. If you take no action, your account will be redeemed
and the proceeds sent to you.
SHAREHOLDER ACCOUNT FEATURES
Distributions. You may have your Fund distributions paid in one of the following
ways:
* Full Reinvest
Option Dividends and capital gains are reinvested in additional
shares. This option will be assigned if you do not specify
an option.
* Cash Option Dividends and capital gains are paid in cash.
Information from the Funds. From time to time, you may be mailed the following:
* Annual and Semi-Annual Reports, containing performanceinformation and
financial statements.
* Periodic account statements, showing recent activity and total share
balance.
* Form 1099 and tax information needed to prepare your income tax returns.
* Proxy materials, in the event a shareholder vote is required.
* Special notices about significant events affecting your Fund.
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Tax-Sheltered Retirement Plans. Cash and Money Market Fund shares are available
for purchase in connection with certain tax-sheltered retirement plans. Call
1-800-225-6265 for information. Distributions will be invested in additional
shares for all tax-sheltered retirement plans.
Exchange Privilege. You may exchange your Cash Fund and Tax Free Reserves shares
for Class A shares of another Eaton Vance fund. You may exchange your Liquid
Assets and Money Market Fund shares for Class B shares of another Eaton Vance
fund. Exchanges are generally made at net asset value. If your Liquid Assets or
Money Market Fund shares were acquired in exchange for Class C shares of another
Eaton Vance Fund, such shares may be exchanged only for shares of one or more of
such funds. If your shares are subject to a CDSC, the CDSC will continue to
apply to your new shares at the same CDSC rate. For purposes of the CDSC, your
shares will continue to age from the date of your original purchase.
Before exchanging, you should read the prospectus of the new fund carefully. If
you wish to exchange shares, you may write to the transfer agent (address on
back cover) or call 1-800-262-1122. Periodic automatic exchanges are also
available. The exchange privilege may be changed or discontinued at any time.
You will receive 60 days' notice of any material change to the privilege. This
privilege may not be used for "market timing". If an account (or group of
accounts) makes more than two round-trip exchanges within 12 months, it will be
deemed to be market timing. The exchange privilege may be terminated for market
timing accounts.
Telephone Transactions. The transfer agent and the principal underwriter have
procedures in place to authenticate telephone instructions (such as verifying
personal account information). As long as the transfer agent and principal
underwriter follow these procedures, they will not be responsible for
unauthorized telephone transactions and you bear the risk of possible loss
resulting from telephone transactions. Telephone instructions are tape recorded.
As long as the net asset value of Fund shares is maintained at $1.00 per share,
an exchange will not result in a taxable gain or loss.
"Street Name" Accounts. If your shares are held in a "street name" account at an
investment dealer, that dealer (and not the Fund or its transfer agent) will
perform all recordkeeping, transaction processing and distribution payments.
Because the Fund will have no record of your transactions, you should contact
your investment dealer to purchase, redeem or exchange shares, to make changes
in your account, or to obtain account information. The transfer of shares in a
"street name" account to an account with another investment dealer or to an
account directly with the Fund involves special procedures and you will be
required to obtain historical information about your shares prior to the
transfer. Before establishing a "street name" account with an investment dealer,
you should determine whether that dealer allows reinvestment of distributions in
"street name" accounts.
Withdrawal Plan. You may redeem Cash Fund and Tax Free Reserves shares on a
regular quarterly basis by establishing a systematic withdrawal plan. Withdrawal
amounts for Liquid Assets and Money Market Fund shareholders may also be made on
a regular quarterly basis, provided the aggregate amount of the withdrawal does
not exceed 12% annually (such amount will not be subject to a CDSC). A minimum
account size of $5,000 is required to establish a systematic withdrawal plan.
Distribution Investment Option. In addition to the distribution options set
forth above, distributions may be invested in additional shares of another Eaton
Vance fund. Before selecting this option, you should obtain a prospectus of the
other Eaton Vance fund and consider its objectives and policies carefully.
Account Questions. If you have any questions about your account or the services
available, please call Eaton Vance Shareholder Services at 1-800-225-6265, or
write to the transfer agent (see back cover for address).
TAX INFORMATION
Each Fund declares dividends daily and pays distributions each month. Long-term
capital gains, if any, will be distributed at least annually. Distributions from
Cash, Liquid Assets and Money Market Fund (and taxable distributions from Tax
Free Reserves, if any) of any taxable income and net short-term capital gains
will be taxable as ordinary income. Distributions of any long-term capital gains
are taxable as such.
Distributions designated by Tax Free Reserves as "exempt-interest dividends",
whether paid in cash or reinvested in additional shares, ordinarily will
constitute tax-exempt income to you. Distributions of interest on certain
municipal obligations are a tax preference item under the AMT provisions
applicable to individuals and corporations.
Shareholders should consult with their advisers concerning the applicability of
state, local and other taxes to an investment.
10
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights are intended to help you understand the Fund's
financial performance for the past five years. Certain information in the tables
reflects the financial results for a single Fund share. The total returns in the
tables represent the rate an investor would have earned (or lost) on an
investment in the Fund (assuming reinvestment of all distributions and not
taking into account a sales charge). This information has been audited by
PricewaterhouseCoopers LLP, independent accountants. The report of
PricewaterhouseCoopers LLP and each Fund's financial statements are incorporated
herein by reference and included in the annual report, which is available on
request.
<TABLE>
<CAPTION>
CASH MANAGEMENT FUND
-------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------
1998 1997 1996 1995 1994
-------------------------------------------------------
<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 $ 0.0478 $ 0.0470 $ 0.0522 $ 0.0345
Less distributions
From net investment
income $(0.0470) $(0.0478) $(0.0470) $(0.0522) $(0.0345)
Net asset value -
End of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Total return(1) 4.78% 4.89% 4.82% 5.35% 3.49%
Ratios/Supplemental
Data
Net assets, end of
year (000's omitted) $ 96,244 $146,743 $151,691 $155,251 $111,622
Ratios (as a
percentage of
average daily net
assets):
Expenses(2) 0.85% 0.78% 0.74% 0.74% 0.84%
Net investment
income 4.69% 4.79% 4.70% 5.22% 3.40%
</TABLE>
<TABLE>
<CAPTION>
LIQUID ASSETS FUND
-------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------
1998 1997 1996 1995 1994
-------------------------------------------------------
<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 $ 0.0410 $ 0.0420 $ 0.0432 $ 0.0505 $ 0.0328
Less distributions
From net investment
income $(0.0410) $(0.0420) $(0.0432) $(0.0505) $(0.0328)
Net asset value -
End of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Total return(1) 4.20% 4.29% 4.41% 5.16% 3.29%
Ratios/Supplemental
Data
Net assets, end of
year (000's omitted) $ 7,974 $ 13,001 $ 19,910 $ 34,026 $118,599
Ratios (as a
percentage of
average daily net
assets):
Expenses(2) 1.43% 1.35% 1.13% 0.91% 0.94%
Net investment
income 4.14% 4.21% 4.31% 5.11% 3.55%
</TABLE>
(See footnotes on last page.)
11
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
MONEY MARKET FUND
---------------------------------------------
YEAR ENDED DECEMBER 31,
---------------------------------------------
1998 1997 1996 1995*
---------------------------------------------
<S> <C> <C> <C> <C>
Net asset value - Beginning of
year $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- --------
Income from operations
Net investment income $ 0.0369 $ 0.0381 $ 0.0370 $ 0.0312
Less distributions
From net investment income $(0.0369) $(0.0381) $(0.0370) $(0.0312)
Net asset value - End of year $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- --------
Total return(1) 3.75% 3.88% 3.77% 3.17%
Ratios/Supplemental Data+
Net assets, end of year (000's
omitted) $ 34,292 $ 23,809 $ 31,250 $ 12,951
Ratios (as a percentage of
average daily net assets):
Expenses(2) 1.82% 1.73% 1.73% 1.68%+
Net investment income 3.70% 3.83% 3.70% 4.19%+
</TABLE>
+ The operating expenses of the Fund may reflect an allocation of expenses to
the Administrator. Had such action not been taken, the ratios and net
investment income per share would have been as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Ratios (as a percentage of average daily net
assets):
Expenses(2) 1.86% 1.82% 1.76% 1.85%+
Net investment income 3.66% 3.74% 3.66% 4.03%+
Net investment income per share $0.0365 $0.0372 $0.0367 $0.0300
</TABLE>
(See footnotes on last page.)
12
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
TAX FREE RESERVES
-------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value -
Beginning of year $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- -------- -------- ---------
Income (loss) from
operations
Net investment
income $ 0.0305 $ 0.0312 $ 0.0303 $ 0.0347 $ 0.0235
Total Income from
operations $ 0.0305 $ 0.0312 $ 0.0303 $ 0.0347 $ 0.0235
Less distributions
From net investment
income $(0.0305) $(0.0312) $(0.0303) $(0.0347) $(0.0235)
$(0.0305) $(0.0312) $(0.0303) $(0.0347) $(0.0235)
Total distributions
Net asset value -
End of year $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- -------- -------- --------
Total return(1) 3.09% 3.16% 3.08% 3.53% 2.36%
Ratios/Supplemental
Data+
Net assets, end of
year (000's omitted) $ 47,272 $ 33,960 $ 23,355 $ 23,912 $ 29,021
Ratios (as a
percentage of
average daily net
assets):
Expenses(3) 0.48% 0.52% 0.33% 0.34% 0.47%
Expenses after
custodian fee
reduction(3) 0.40% 0.46% 0.27% -- --
Interest Expense 0.01% 0.01% 0.02% 0.05% 0.07%
Net investment
income 3.04% 3.12% 3.04% 3.47% 2.27%
</TABLE>
+ The operating expenses of the Fund may reflect a reduction of the
Investment Adviser fee, an allocation of expenses to the Investment
Adviser, or both. Had such actions not been taken, the ratios and net
investment income per share would have been as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Ratios (as a percentage of
average daily net assets):
Expenses(3) 0.76% 0.67% 0.69% 0.73% 0.87%
Expenses after custodian fee
reduction(3) 0.68% 0.61% 0.63% -- --
Net investment income 2.76% 2.96% 2.66% 3.02% 1.88%
Net investment income per
share $ 0.0277 $ 0.0296 $ 0.0266 $ 0.0303 $ 0.0189
Leverage Analysis
Amount of debt outstanding at
end of year $ -- $ -- $-- $ 1,266,000 $ 6,117,000
Average daily balance of debt
oustanding during year $ 109,382 134,611 116,757 279,586 440,145
Average weekly balance of
shares outstanding during
year 54,796,165 64,279,572 61,730,866 51,107,215 40,463,382
Average amount of debt per
share during year $ 0.002 $ 0.002 $ 0.002 $ 0.005 $ 0.011
</TABLE>
* For the period from the start of business, April 5, 1995 to December 31,
1995.
+ Annualized.
(1) Total return is calculated assuming a purchase of the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Distributions, if any, are assumed to be reinvested at the
net asset value on the reinvestment date. Total return is computed on a
non-annualized basis.
(2) Includes the Money Market Fund's, Cash Fund's and Liquid Assets Fund's
share of the Portfolio's allocated expenses.
(3) The expense ratios for the year ended December 31, 1996 and thereafter have
been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require Tax Free Reserves to increase its expense
ratio by the effect of any expense offset arrangements with its service
providers. The expense ratios for each of the prior years have not been
adjusted to reflect this change.
13
<PAGE>
{LOGO} Investing
EATON VANCE for the
Mutual Funds 21st
Century(R)
MORE INFORMATION
- --------------------------------------------------------------------------------
About the Funds: More information is available in the statement of
additional information. The statement of additional information is
incorporated by reference into this prospectus. Additional information
about each Fund's investments is available in the annual and semi-annual
reports to shareholders. In the annual report, you will find a discussion
of the market conditions and investment strategies that significantly
affected each Fund's performance during the past year. You may obtain free
copies of the statement of additional information and the shareholder
reports by contacting:
EATON VANCE DISTRIBUTORS, INC.
255 State Street
Boston, MA 02109
1-800-225-6265
website: www.eatonvance.com
You will find and may copy information about each Fund at the Securities
and Exchange Commission's public reference room in Washington, DC (call
1-800-SEC-0330 for information); on the SEC's Internet site
(http://www.sec.gov); or upon payment of copying fees by writing to the
SEC's public reference room in Washington, DC 20549-6009.
About Shareholder Accounts: You can obtain more information from Eaton
Vance Share- holder Services (1-800-225-6265). If you own shares and would
like to add to, redeem or change your account, please write or call the
transfer agent:
- --------------------------------------------------------------------------------
FIRST DATA INVESTOR SERVICES GROUP
P.O. BOX 5123
WESTBOROUGH, MA 01581-5123
1-800-262-1122
SEC File No. 811-4015 MMFP
