<PAGE>
[LOGO - EATON VANCE LOGO] MUTUAL FUNDS
EATON VANCE-REGISTERED TRADEMARK- FOR PEOPLE
================================== WHO PAY
MUTUAL FUNDS TAXES-REGISTERED TRADEMARK-
[PICTURE - 1040 FORM & CALCULATOR]
Annual Report October 31, 2000
[PICTURE - STOCK EXCHANGE]
EATON VANCE
TAX-MANAGED
VALUE
FUND
[PICTURE - PHOTO OF TAX FORM 1099 & CALCULATOR]
<PAGE>
EATON VANCE TAX-MANAGED VALUE FUND AS OF OCTOBER 31, 2000
--------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
--------------------------------------------------------------------------------
[PHOTO OF JAMES B. HAWKES)
James B. Hawkes
President
Eaton Vance Tax-Managed Value Fund, Class A shares, had a total return of 21.50%
during the period from inception through October 31, 2000. That return was the
result of an increase in net asset value per share (NAV) from $10.00 on December
27, 1999 to $12.15 on October 31, 2000.(1)
Class B shares had a total return of 17.10% for the period from inception on
January 14, 2000 through October 31, 2000, the result of an increase in NAV
from $10.00 to $11.71.(1) Class C shares had a total return of 20.20% for the
period from inception on January 21, 2000 to October 31, 2000, the result of
an increase in NAV from $10.00 to $12.02.(1)
By comparison, the Russell 1000 Value Index - an unmanaged market index of value
stocks - had a total return of 5.84% for the period from January 1, 2000 to
October 31, 2000.(2) The S&P 500 Index - a broad-based, unmanaged market index
commonly used to to measure overall stock market performance - returned -1.81%
for the same period.(2)
The year 2000 has been a volatile period in the U.S. equity markets. Although
the economy continued to exhibit signs of healthy - if more tempered -
growth, other factors have contributed to a wild ride for stocks. While there
is convincing evidence that the Federal Reserve Board has successfully
engineered a "soft landing" for the economy through incremental increases in
the Federal Funds rate, the downside is that slowed consumer spending can
have a negative impact on corporate profits, and therefore, stock prices.
More recently, renewed tensions in the Middle East and the uncertain outcome
of the U.S. presidential election kept the markets from regaining lost ground.
An economic slowdown, dramatic market swings in a compressed time frame, and
changes in investor sentiment all underscore the fact that the financial markets
are largely unpredictable. At Eaton Vance, we are confident that our years of
experience, our research capabilities, and our investment discipline give us the
tools we will need to navigate the dramatic turns that surely await us. As
always, we urge investors to diversify their portfolios and to take a long-term
investment view.
On the pages that follow, Portfolio Manager Michael R. Mach discusses the
market's movements, as well as the Fund's performance over the past year.
Sincerely,
/s/ James B. Hawkes
James B. Hawkes
President
December 12, 2000
--------------------------------------------------------------------------------
FUND INFORMATION
AS OF OCTOBER 31, 2000
<TABLE>
<CAPTION>
PERFORMANCE(3) CLASS A CLASS B CLASS C
---------------------------------------------------------------------------------------------------
Cumulative Total Returns (at net asset value)
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Life of Fund+ 21.50% 17.10% 20.20%
SEC Cumulative Total Returns (including sales charge or applicable CDSC)
---------------------------------------------------------------------------------------------------
Life of Fund+ 14.52% 12.10% 19.20%
</TABLE>
+Inception Dates - Class A: 12/27/99; Class B: 1/14/00; Class C:1/21/00
<TABLE>
TEN LARGEST HOLDINGS(4)
-----------------------------------------
<S> <C>
Willamette Industries, Inc. 2.6%
J.P. Morgan & Co. 2.4
Safeway, Inc. 2.4
SBC Communications, Inc. 2.3
Honeywell International, Inc. 2.3
International Business Machines Corp.2.3
Merrill Lynch & Co., Inc. 2.2
Kimberly-Clark Corp. 2.2
Freddie Mac 2.2
MetLife, Inc. 2.1
</TABLE>
(1) 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 Class B and Class C shares. (2) It is not possible to invest directly
in an Index. (3) Returns are historical and are calculated by determining
the percentage change in net asset value with all distributions reinvested.
SEC returns for Class A reflect the maximum 5.75% sales charge. SEC returns
for Class B 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. SEC return for Class C reflects a 1% CDSC imposed in the first year.
(4) Ten largest equity holdings accounted for 23.0% of the Fund's net
assets. 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.
--------------------------------------------------------------------------------
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.
--------------------------------------------------------------------------------
2
<PAGE>
EATON VANCE TAX-MANAGED VALUE FUND AS OF OCTOBER 31, 2000
--------------------------------------------------------------------------------
MANAGEMENT DISCUSSION
--------------------------------------------------------------------------------
AN INTERVIEW WITH MICHAEL R. MACH,
PORTFOLIO MANAGER OF EATON VANCE
TAX-MANAGED VALUE FUND
[PHOTO OF MICHAEL R. MACH]
Michael R. Mach, CFA
Portfolio Manager
Q: Michael, can you give us an overview of the stock markets over the last
twelve months?
A: The markets this past year were mixed. There were almost two markets: the
market for the "New Economy," aggressive growth stocks, and the market for
the rest of the stocks, the Old Economy stocks with lower P/E (price to
earnings) ratios. In the early months of 2000, market leadership was
clearly focused on the higher P/E, more aggressive, growth sectors of the
market. However, by the time we got to the end of October 2000, it was
pretty clear that market leadership was shifting to more traditional,
value-oriented segments of the market, such as electric utilities,
financial stocks, and energy stocks.
Within that type of market, our disciplined value style of investing, with a
large commitment of assets to traditional value areas, positioned us to
benefit from these market trends.
FIVE LARGEST SECTOR POSITIONS+
--------------------------------------------------------------------------------
BY TOTAL NET ASSETS
FINANCIAL SERVICES 11.5%
ELECTRIC UTILITIES 6.2%
BANKS - SUPER REGIONAL 4.9%
COMMUNICATIONS SERVICES 4.6%
DRUGS 4.3%
+ Sector holdings are subject to change due to active management. Five largest
sector holdings accounted for 31.5% of the Fund.
Our investment philosophy commits us to finding quality companies at
reasonable valuations, that have the potential to perform well over the
long-term on an after-tax basis. So, within that context, we were able to get
good performance from the Fund's portfolio.
Q: You stressed that the Fund's portfolio is invested in "traditional" value
areas. Would you elaborate on this?
A: We are only interested in stocks that are inexpensive relative to the overall
market; that is, we buy only stocks that trade at a discount valuation to the
S&P 500. Reflecting our commitment to value, the Fund's portfolio has favored
traditional value sectors, including utilities, financials, and energy. As
market leadership shifted towards value sectors, our investments in them
benefitted accordingly.
Q: The Fund's objective is to achieve long-term after-tax returns for its
shareholders. Can you tell us more about the process of selecting stocks to
accomplish this objective?
A: Certainly. Our primary strategy is to identify stocks with favorable
long-term prospects that are undervalued relative to the overall market. The
primary means of doing this is through fundamental analysis. We have an
experienced, in-house team of investment professionals who conduct thorough
research into the fundamentals of those companies in which we might invest.
Let me provide some examples of the types of characteristics we would find
attractive when researching stocks. First, we look for companies with a
strong franchise or brand, which can provide greater competitive stability
and a platform for future growth. Often, this can translate into the company
obtaining a better channel of distribution for its products, or purchasing
raw materials more cheaply. We want to buy market leaders because we believe
that this can help reduce the business risk associated with equity investing.
3
<PAGE>
EATON VANCE TAX-MANAGED VALUE FUND AS OF OCTOBER 31, 2000
--------------------------------------------------------------------------------
MANAGEMENT DISCUSSION
--------------------------------------------------------------------------------
Second, we also seek out companies we deem to have long-term earnings growth
potential. We believe a growing earnings stream is key to long-term stock
price appreciation. Third, we only buy shares of companies when their stock
is available at a discount valuation. Our belief is that buying stocks at
discount multiples can help lower the Fund's valuation risk. Finally, we
might also be looking for stocks for which we could identify some catalyst
that would drive the stock price higher in the future.
Q: Let's talk about the "after-tax" aspect of your investment goal. What steps
might you take to minimize the tax bite felt by investors?
A: There are a number of methods we use to increase our tax-efficiency. One key
thing we want to do is to generally avoid net realized short-term capital
gains. We do this through a strategy of "buy-and-hold." We are long-term
investors and do not trade for short-term profits.
As far as long-term capital gains are concerned, we try to maintain
relatively low turnover. Again, this is part of our "buy-and-hold" strategy.
When we do decide to sell a particular appreciated security, we select the
lots resulting in the most favorable tax treatment, generally those lots held
long enough to be treated as long-term capital gains that have the highest
cost basis.
We won't always be able to avoid a capital gain payout, but we're confident
these strategies can help the shareholder reduce the amount of their returns
they're giving back as taxes.
Q: What might we expect for the Fund in the future?
A: In addition to the traditional value areas of electric utilities, financials,
and energy, we believe that there are other areas of the market that could
rebound from the depressed price levels experienced in 2000. These areas
include basic industries, retailers, and automotive suppliers.
Going forward, we believe that the strong performance of value stocks can
continue, because many companies characterized by strong franchises and
double-digit growth potential are selling at very reasonable valuations, at a
significant discount to other S&P 500 companies. The ongoing valuation
disparities in the market should support the shift in market leadership from
growth stocks to value stocks, at least in the near-term. The biggest hurdle
value stocks face is a psychological one: investors' fear of a recession.
But, even if there were to be a recession, I'd rather own high-quality value
stocks than over-valued stocks in that environment.
4
<PAGE>
EATON VANCE TAX-MANAGED VALUE FUND AS OF OCTOBER 31, 2000
--------------------------------------------------------------------------------
PERFORMANCE
--------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EATON VANCE TAX-MANAGED
VALUE FUND, CLASS A vs. THE S&P 500 INDEX AND THE RUSSELL 1000 VALUE INDEX*
December 31,1999 -- October 31, 2000
[GRAPH - DESCRIPTION NEEDED]
<TABLE>
<CAPTION>
Russell 1000 S&P 500 FUND, INCL. MAXIMUM EATON VANCE TAX-MANAGED
Value Index Index SALES CHARGE VALUE FUND, CLASS A
-----------------------------------------------------------------------
<C> <C> <C> <C> <C>
12/31/1999 $10,000 $10,000 $10,000 $10,000
01/31/2000 $9,674 $9,498 $9,081 $9,635
02/29/2000 $8,955 $9,318 $8,728 $9,261
03/31/2000 $10,048 $10,229 $9,694 $10,286
04/30/2000 $9,931 $9,921 $9,898 $10,502
05/31/2000 $10,035 $9,718 $10,158 $10,778
06/30/2000 $9,577 $9,957 $9,703 $10,296
07/31/2000 $9,697 $9,802 $9,861 $10,463
08/31/2000 $10,236 $10,410 $10,566 $11,212
09/30/2000 $10,330 $9,861 $10,854 $11,517
10/31/2000 $10,584 $9,819 $11,281 $11,970
</TABLE>
<TABLE>
<CAPTION>
PERFORMANCE+ CLASS A CLASS B CLASS C
----------------------------------------------------------------------------------------------------
Cumulative Total Returns (at net asset value)
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Life of Fund+ 21.50% 17.10% 20.20%
SEC Cumulative Total Returns (including sales charge or applicable CDSC)
--------------------------------------------------------------------------------------------------
Life of Fund+ 14.52% 12.10% 19.20%
</TABLE>
+Inception Dates - Class A: 12/27/99; Class B: 1/14/00; Class C:1/21/00
* Source: TowersData, Bethesda, MD. Investment operations commenced 12/27/99.
Index information is available only at month-end; therefore, the line
comparison begins at the next month-end following the commencement of the
Fund's investment operations.
The chart compares the Fund's total return with that of the Russell 1000
Value Index, a broad-based, unmanaged market index of value stocks, and the
S&P 500 Composite Index, a broad-based, unmanaged market index of common
stocks commonly used as a measure of U.S. stock market performance. Returns
are calculated by determining the percentage change in net asset value (NAV)
with all distributions reinvested. The Indexes' returns use net dividends
which reflect the deduction of withholding taxes. The lines on the chart
represent the total returns of $10,000 hypothetical investments in the Fund
and the Indexes. An investment in the Fund's Class B shares on 1/18/00 at net
asset value would have grown to $11,710 on October 31, 2000; $11,210 less the
applicable 5% CDSC. An investment in the Fund's Class C shares on 1/24/00 at
net asset value would have grown to $12,020 on October 31, 2000; $11,920 less
the applicable 1% CDSC. The Indexes' total returns do not reflect any
commissions or expenses that would have been incurred if an investor
individually purchased or sold the securities represented in the Indexes. It
is not possible to invest directly in an Index.
+ Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. SEC returns for
Class A reflect the maximum 5.75% sales charge. SEC returns for Class B
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. SEC return
for Class C reflects a 1% CDSC imposed in the first year.
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.
5
<PAGE>
EATON VANCE TAX-MANAGED VALUE FUND AS OF OCTOBER 31, 2000
--------------------------------------------------------------------------------
PERFORMANCE
--------------------------------------------------------------------------------
AFTER-TAX PERFORMANCE
AS OF OCTOBER 31, 2000
The table below sets forth the Fund's pre-tax and after-tax performance.
After-tax performance reflects the impact of federal income taxes on Fund
distributions of dividends and capital gains, while pre-tax performance does
not. Because the objective of the Fund is to provide long-term, after-tax
returns to shareholders, it is important for investors to know the effect of
taxes on the Fund's return.
--------------------------------------------------------------------------------
PRE-TAX AND AFTER-TAX CUMULATIVE RETURNS
AT NET ASSET VALUE FOR THE PERIOD ENDED OCTOBER 31, 2000
<TABLE>
<CAPTION>
LIFE OF FUND* PRE-TAX AFTER-TAX TAX-EFFICIENCY
--------------------------------------------------------------------------------
Cumulative Total Returns (at net asset value)
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Class A 21.60% 21.60% 100%
Class B 17.10% 17.10% 100%
Class C 20.20% 20.20% 100%
</TABLE>
*Inception Dates - Class A: 12/27/99; Class B: 1/14/00; Class C:1/21/00
Source:TowersData, Bethesda, Md
--------------------------------------------------------------------------------
Pre-tax returns are calculated by determining the percentage change in net asset
value with all distributions reinvested in Fund shares. After-tax returns are
calculated similarly, except that distributions are reduced by federal income
taxes before reinvestment. Pre-tax and after-tax returns are identical because
the Fund did not make any dividend or capital gain distributions. There can be
no assurance that such distributions will not be made in the future.
The highest historical federal tax rates (currently 39.6% for dividends and 20%
for capital gains) are used. The after-tax calculations do not take into account
state or local taxes or the federal alternative minimum tax. If an investor
sells Fund shares, any realized gains will be subject to taxes not reflected in
the after-tax returns shown above.
The performance does not include the effects of the Class A shares initial sales
charge (5.75% maximum) or any applicable contingent deferred sales charge (5.00%
maximum for Class B shares and 1% for Class C shares redeemed in the first
year).
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.
The after-tax returns shown above are not applicable to shares held in
tax-deferred accounts (such as IRA or 401(k) accounts)and shares held by
non-taxable entities (such as qualified pension plans and charities).
6
<PAGE>
INVESTMENT ADVISER AND ADMINISTRATOR OF
EATON VANCE TAX-MANAGED VALUE FUND
Eaton Vance Management
The Eaton Vance Building
255 State Street
Boston, MA 02109
PRINCIPAL UNDERWRITER
EATON VANCE DISTRIBUTORS, INC.
The Eaton Vance Building
255 State Street
Boston, MA 02109
(617) 482-8260
CUSTODIAN
INVESTORS BANK & TRUST COMPANY
200 Clarendon Street
Boston, MA 02116
TRANSFER AGENT
PFPC, INC.
Attn: Eaton Vance Funds
P.O. Box 9653
Providence, RI 02904-9653
(800) 262-1122
INDEPENDENT AUDITORS
DELOITTE & TOUCHE LLP
200 Berkeley Street
Boston, MA 02116-5022
EATON VANCE TAX-MANAGED VALUE FUND
THE EATON VANCE BUILDING
255 STATE STREET
BOSTON, MA 02109
--------------------------------------------------------------------------------
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.
--------------------------------------------------------------------------------
501-12/00 TVSRC
<PAGE>
EATON VANCE TAX-MANAGED VALUE FUND AS OF OCTOBER 31, 2000
PORTFOLIO OF INVESTMENTS
COMMON STOCKS -- 94.7%
<TABLE>
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
----------------------------------------------------------------------
Advertising and Marketing Services -- 0.5%
----------------------------------------------------------------------
True North Communications, Inc. 10,000 $ 376,875
----------------------------------------------------------------------
$ 376,875
----------------------------------------------------------------------
Auto Parts and Equipment -- 2.1%
----------------------------------------------------------------------
Delphi Automotive Systems Corp. 51,000 $ 800,062
Tower Automotive, Inc.(1) 62,000 682,000
----------------------------------------------------------------------
$ 1,482,062
----------------------------------------------------------------------
Banks - Super Regional -- 4.9%
----------------------------------------------------------------------
Bank of America Corp. 15,000 $ 720,937
FleetBoston Financial Corp. 28,000 1,064,000
Mellon Financial Corp. 19,000 916,750
Wells Fargo & Co. 15,000 694,687
----------------------------------------------------------------------
$ 3,396,374
----------------------------------------------------------------------
Beverages -- 1.6%
----------------------------------------------------------------------
Anheuser-Busch Cos., Inc. 16,000 $ 732,000
Pepsi Bottling Group, Inc. 11,500 398,187
----------------------------------------------------------------------
$ 1,130,187
----------------------------------------------------------------------
Building Products -- 0.5%
----------------------------------------------------------------------
American Standard Companies, Inc.(1) 8,000 $ 367,000
----------------------------------------------------------------------
$ 367,000
----------------------------------------------------------------------
Chemicals -- 2.7%
----------------------------------------------------------------------
Air Products and Chemicals, Inc. 19,000 $ 708,937
Dow Chemical Co. (The) 38,000 1,163,750
----------------------------------------------------------------------
$ 1,872,687
----------------------------------------------------------------------
Communications Equipment -- 1.0%
----------------------------------------------------------------------
Cable Design Technologies Corp.(1) 30,000 $ 691,875
----------------------------------------------------------------------
$ 691,875
----------------------------------------------------------------------
Communications Services -- 4.6%
----------------------------------------------------------------------
BellSouth Corp. 25,000 $ 1,207,812
CenturyTel, Inc. 10,000 385,000
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
----------------------------------------------------------------------
Communications Services (continued)
----------------------------------------------------------------------
SBC Communications, Inc. 28,000 $ 1,615,250
----------------------------------------------------------------------
$ 3,208,062
----------------------------------------------------------------------
Computer Services -- 1.1%
----------------------------------------------------------------------
SunGard Data Systems, Inc.(1) 15,000 $ 766,875
----------------------------------------------------------------------
$ 766,875
----------------------------------------------------------------------
Computers and Business Equipment -- 2.3%
----------------------------------------------------------------------
International Business Machines Corp. 16,000 $ 1,576,000
----------------------------------------------------------------------
$ 1,576,000
----------------------------------------------------------------------
Diversified Energy Provider -- 2.1%
----------------------------------------------------------------------
El Paso Energy Corp. 23,000 $ 1,441,812
----------------------------------------------------------------------
$ 1,441,812
----------------------------------------------------------------------
Diversified Manufacturing and Services -- 2.7%
----------------------------------------------------------------------
Honeywell International, Inc. 30,000 $ 1,614,375
Regal-Beloit Corp. 17,000 284,750
----------------------------------------------------------------------
$ 1,899,125
----------------------------------------------------------------------
Drugs -- 4.3%
----------------------------------------------------------------------
Abbott Laboratories 24,000 $ 1,267,500
Mylan Laboratories 12,000 336,000
Schering-Plough Corp. 14,000 723,625
Watson Pharmaceuticals, Inc.(1) 10,000 625,625
----------------------------------------------------------------------
$ 2,952,750
----------------------------------------------------------------------
Electric Utilities -- 6.2%
----------------------------------------------------------------------
Duke Energy Corp. 15,000 $ 1,296,563
Exelon Corp. 23,000 1,382,875
NRG Energy, Inc.(1) 25,000 650,000
Southern Co. (The) 32,000 940,000
----------------------------------------------------------------------
$ 4,269,438
----------------------------------------------------------------------
Electronic Manufacturing Services -- 2.3%
----------------------------------------------------------------------
APW Ltd.(1) 8,000 $ 369,500
Pemstar Inc.(1) 25,000 365,625
Viasystems Group, Inc.(1) 60,000 851,250
----------------------------------------------------------------------
$ 1,586,375
----------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
EATON VANCE TAX-MANAGED VALUE FUND AS OF OCTOBER 31, 2000
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
----------------------------------------------------------------------
Financial Services -- 11.5%
----------------------------------------------------------------------
Associates First Capital Corp. 17,500 $ 649,688
Concord EFS, Inc.(1) 12,000 495,750
First Data Corp. 15,000 751,875
Franklin Resources, Inc. 32,000 1,370,880
Freddie Mac 25,000 1,500,000
J.P. Morgan & Co. 10,000 1,655,000
Merrill Lynch & Co., Inc. 22,000 1,540,000
----------------------------------------------------------------------
$ 7,963,193
----------------------------------------------------------------------
Foods -- 3.1%
----------------------------------------------------------------------
Dean Foods Co. 21,000 $ 672,000
Keebler Food Products Co. 17,000 688,500
Sara Lee Corp. 35,000 754,688
----------------------------------------------------------------------
$ 2,115,188
----------------------------------------------------------------------
Furniture Retailer -- 0.5%
----------------------------------------------------------------------
Haverty Furniture Co., Inc. 33,000 $ 371,250
----------------------------------------------------------------------
$ 371,250
----------------------------------------------------------------------
Household Products -- 2.2%
----------------------------------------------------------------------
Kimberly-Clark Corp. 23,000 $ 1,518,000
----------------------------------------------------------------------
$ 1,518,000
----------------------------------------------------------------------
Insurance -- 4.0%
----------------------------------------------------------------------
MetLife, Inc.(1) 53,000 $ 1,464,125
Xl Capital Ltd. 17,000 1,306,875
----------------------------------------------------------------------
$ 2,771,000
----------------------------------------------------------------------
Integrated Oil and Gas -- 3.0%
----------------------------------------------------------------------
Conoco Inc., Class A 40,000 $ 1,032,500
Exxon Mobil Corp. 12,000 1,070,250
----------------------------------------------------------------------
$ 2,102,750
----------------------------------------------------------------------
Lighting Systems -- 0.5%
----------------------------------------------------------------------
LSI Industries Inc. 20,000 $ 375,000
----------------------------------------------------------------------
$ 375,000
----------------------------------------------------------------------
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
----------------------------------------------------------------------
Lodging and Gaming -- 0.9%
----------------------------------------------------------------------
Park Place Entertainment Corp.(1) 51,000 $ 650,250
----------------------------------------------------------------------
$ 650,250
----------------------------------------------------------------------
Medical Products -- 1.9%
----------------------------------------------------------------------
Bard (C.R.), Inc. 32,000 $ 1,340,000
----------------------------------------------------------------------
$ 1,340,000
----------------------------------------------------------------------
Medical Services -- 1.7%
----------------------------------------------------------------------
Health Management Associates, Inc.,
Class A(1) 60,000 $ 1,188,750
----------------------------------------------------------------------
$ 1,188,750
----------------------------------------------------------------------
Metals - Industrial -- 1.7%
----------------------------------------------------------------------
Alcoa, Inc. 40,000 $ 1,147,500
----------------------------------------------------------------------
$ 1,147,500
----------------------------------------------------------------------
Oil and Gas - Equipment and Services -- 2.3%
----------------------------------------------------------------------
Core Laboratories N.V.(1) 25,000 $ 539,063
Noble Drilling Corp.(1) 25,000 1,039,063
----------------------------------------------------------------------
$ 1,578,126
----------------------------------------------------------------------
Oil and Gas - Exploration and Production -- 2.0%
----------------------------------------------------------------------
Devon Energy Corp. 27,000 $ 1,360,800
----------------------------------------------------------------------
$ 1,360,800
----------------------------------------------------------------------
Paper and Forest Products -- 4.2%
----------------------------------------------------------------------
Bowater, Inc. 20,000 $ 1,082,500
Willamette Industries, Inc. 50,000 1,815,625
----------------------------------------------------------------------
$ 2,898,125
----------------------------------------------------------------------
Printing and Business Products -- 1.0%
----------------------------------------------------------------------
Lexmark International, Inc.(1) 16,000 $ 656,000
----------------------------------------------------------------------
$ 656,000
----------------------------------------------------------------------
Publishing -- 3.5%
----------------------------------------------------------------------
Gannett Co., Inc. 25,000 $ 1,450,000
McGraw-Hill Cos., Inc. (The) 15,000 962,813
----------------------------------------------------------------------
$ 2,412,813
----------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
EATON VANCE TAX-MANAGED VALUE FUND AS OF OCTOBER 31, 2000
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
----------------------------------------------------------------------
Retail - Food and Drug -- 3.4%
----------------------------------------------------------------------
CVS Corp. 14,000 $ 741,125
Safeway, Inc.(1) 30,000 1,640,625
----------------------------------------------------------------------
$ 2,381,750
----------------------------------------------------------------------
Retail - Speciality -- 1.6%
----------------------------------------------------------------------
Lowe's Companies, Inc. 24,000 $ 1,096,500
----------------------------------------------------------------------
$ 1,096,500
----------------------------------------------------------------------
Retail - Specialty and Apparel -- 2.1%
----------------------------------------------------------------------
TJX Companies, Inc. 52,000 $ 1,417,000
----------------------------------------------------------------------
$ 1,417,000
----------------------------------------------------------------------
Specialty Chemicals -- 1.6%
----------------------------------------------------------------------
Monsanto Co.(1) 28,000 $ 714,000
Valspar Corp. 15,000 409,650
----------------------------------------------------------------------
$ 1,123,650
----------------------------------------------------------------------
Transport - Services -- 2.0%
----------------------------------------------------------------------
FedEx Corp.(1) 30,000 $ 1,405,800
----------------------------------------------------------------------
$ 1,405,800
----------------------------------------------------------------------
Transportation -- 0.5%
----------------------------------------------------------------------
Union Pacific Corp. 8,000 $ 375,000
----------------------------------------------------------------------
$ 375,000
----------------------------------------------------------------------
Trucks and Parts -- 0.6%
----------------------------------------------------------------------
Oshkosh Truck Corp. 9,500 $ 390,688
----------------------------------------------------------------------
$ 390,688
----------------------------------------------------------------------
Total Common Stocks
(identified cost $55,269,867) $65,656,630
----------------------------------------------------------------------
</TABLE>
SHORT-TERM INVESTMENTS -- 3.7%
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
<S> <C> <C>
----------------------------------------------------------------------
General Electric Capital Corp.,
6.65%, 11/1/00 $ 763 $ 763,000
Panasonic Finance America, 6.48%,
11/6/00 1,800 1,798,380
----------------------------------------------------------------------
Total Short-Term Investments
(at amortized cost, $2,561,380) $ 2,561,380
----------------------------------------------------------------------
Total Investments -- 98.4%
(identified cost $57,831,247) $68,218,010
----------------------------------------------------------------------
Other Assets, Less Liabilities -- 1.6% $ 1,105,881
----------------------------------------------------------------------
Net Assets -- 100.0% $69,323,891
----------------------------------------------------------------------
</TABLE>
(1) Non-income producing security.
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
EATON VANCE TAX-MANAGED VALUE FUND AS OF OCTOBER 31, 2000
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF OCTOBER 31, 2000
<S> <C>
Assets
-----------------------------------------------------
Investments, at value
(identified cost, $57,831,247) $68,218,010
Cash 793
Receivable for investments sold 2,310,173
Receivable for Fund shares sold 1,583,332
Dividends receivable 33,636
Prepaid expenses 286
-----------------------------------------------------
TOTAL ASSETS $72,146,230
-----------------------------------------------------
Liabilities
-----------------------------------------------------
Payable for investments purchased $ 2,660,654
Payable for Fund shares redeemed 90,064
Payable to affiliate for service fees 10,130
Accrued expenses 61,491
-----------------------------------------------------
TOTAL LIABILITIES $ 2,822,339
-----------------------------------------------------
NET ASSETS $69,323,891
-----------------------------------------------------
Sources of Net Assets
-----------------------------------------------------
Paid-in capital $62,001,122
Accumulated net realized loss (computed
on the basis of identified cost) (3,063,994)
Net unrealized appreciation (computed on
the basis of identified cost) 10,386,763
-----------------------------------------------------
TOTAL $69,323,891
-----------------------------------------------------
Class A Shares
-----------------------------------------------------
NET ASSETS $30,140,064
SHARES OUTSTANDING 2,480,578
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 12.15
MAXIMUM OFFERING PRICE PER SHARE
(100 DIVIDED BY 94.25 of $12.15) $ 12.89
-----------------------------------------------------
Class B Shares
-----------------------------------------------------
NET ASSETS $20,690,285
SHARES OUTSTANDING 1,767,250
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 11.71
-----------------------------------------------------
Class C Shares
-----------------------------------------------------
NET ASSETS $18,493,542
SHARES OUTSTANDING 1,538,747
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 12.02
-----------------------------------------------------
</TABLE>
On sales of $50,000 or more, the offering price of Class A shares is reduced.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE PERIOD ENDED
OCTOBER 31, 2000(1)
<S> <C>
Investment Income
-----------------------------------------------------
Dividends (net of foreign taxes, $2,582) $ 284,984
Interest 64,319
-----------------------------------------------------
TOTAL INVESTMENT INCOME $ 349,303
-----------------------------------------------------
Expenses
-----------------------------------------------------
Investment adviser fee $ 135,508
Administration fee 31,393
Trustees fees and expenses 264
Distribution and service fees
Class A 23,146
Class B 65,112
Class C 51,327
Custodian fee 54,517
Registration fees 44,533
Legal and accounting services 16,928
Printing and postage 14,890
Transfer and dividend disbursing agent
fees 5,237
Miscellaneous 5,207
-----------------------------------------------------
TOTAL EXPENSES $ 448,062
-----------------------------------------------------
NET INVESTMENT LOSS $ (98,759)
-----------------------------------------------------
Realized and Unrealized Gain (Loss)
-----------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $(3,063,994)
-----------------------------------------------------
NET REALIZED LOSS $(3,063,994)
-----------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $10,386,763
-----------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $10,386,763
-----------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $ 7,322,769
-----------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 7,224,010
-----------------------------------------------------
</TABLE>
(1) For the period from the start of business, December 27, 1999, to
October 31, 2000.
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
EATON VANCE TAX-MANAGED VALUE FUND AS OF OCTOBER 31, 2000
FINANCIAL STATEMENTS CONT'D
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PERIOD ENDED
INCREASE (DECREASE) IN NET ASSETS OCTOBER 31, 2000(1)
<S> <C>
-------------------------------------------------------------
From operations --
Net investment loss $ (98,759)
Net realized loss (3,063,994)
Net change in unrealized
appreciation (depreciation) 10,386,763
-------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 7,224,010
-------------------------------------------------------------
Transactions in shares of beneficial
interest --
Proceeds from sale of shares
Class A $ 27,785,278
Class B 18,807,191
Class C 17,051,811
Cost of shares redeemed
Class A (803,304)
Class B (340,532)
Class C (400,573)
-------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM FUND
SHARE TRANSACTIONS $ 62,099,871
-------------------------------------------------------------
NET INCREASE IN NET ASSETS $ 69,323,881
-------------------------------------------------------------
Net Assets
-------------------------------------------------------------
At beginning of period $ 10
-------------------------------------------------------------
AT END OF PERIOD $ 69,323,891
-------------------------------------------------------------
</TABLE>
(1) For the period from the start of business, December 27, 1999, to
October 31, 2000.
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
EATON VANCE TAX-MANAGED VALUE FUND AS OF OCTOBER 31, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
------------------------
PERIOD ENDED OCTOBER 31,
------------------------
2000(1)
<S> <C>
----------------------------------------------------------
Net asset value -- Beginning
of period $10.000
----------------------------------------------------------
Income (loss) from operations
----------------------------------------------------------
Net investment loss $(0.002)
Net realized and unrealized
gain 2.152
----------------------------------------------------------
TOTAL INCOME FROM OPERATIONS $ 2.150
----------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $12.150
----------------------------------------------------------
TOTAL RETURN(2) 21.50%
----------------------------------------------------------
Ratios/Supplemental Data
----------------------------------------------------------
Net assets, end of period
(000's omitted) $30,140
Ratios (As a percentage of
average daily net assets):
Expenses 1.71%(3)
Expenses after custodian
fee reduction 1.71%(3)
Net investment loss (0.06)%(3)
Portfolio Turnover 128%
----------------------------------------------------------
</TABLE>
(1) For the period from the start of business, December 27, 1999, to
October 31, 2000.
(2) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return
is not computed on an annualized basis.
(3) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
EATON VANCE TAX-MANAGED VALUE FUND AS OF OCTOBER 31, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS B
------------------------
PERIOD ENDED OCTOBER 31,
------------------------
2000(1)
<S> <C>
----------------------------------------------------------
Net asset value -- Beginning
of period $10.000
----------------------------------------------------------
Income (loss) from operations
----------------------------------------------------------
Net investment loss $(0.029)
Net realized and unrealized
gain 1.739
----------------------------------------------------------
TOTAL INCOME FROM OPERATIONS $ 1.710
----------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $11.710
----------------------------------------------------------
TOTAL RETURN(2) 17.10%
----------------------------------------------------------
Ratios/Supplemental Data
----------------------------------------------------------
Net assets, end of period
(000's omitted) $20,690
Ratios (As a percentage of
average daily net assets):
Expenses 2.45%(3)
Expenses after custodian
fee reduction 2.45%(3)
Net investment loss (0.78)%(3)
Portfolio Turnover 128%
----------------------------------------------------------
</TABLE>
(1) For the period from the start of business, January 14, 2000, to
October 31, 2000.
(2) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return
is not computed on an annualized basis.
(3) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
EATON VANCE TAX-MANAGED VALUE FUND AS OF OCTOBER 31, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS C
------------------------
PERIOD ENDED OCTOBER 31,
------------------------
2000(1)
<S> <C>
----------------------------------------------------------
Net asset value -- Beginning
of period $10.000
----------------------------------------------------------
Income (loss) from operations
----------------------------------------------------------
Net investment loss $(0.027)
Net realized and unrealized
gain 2.047
----------------------------------------------------------
TOTAL INCOME FROM OPERATIONS $ 2.020
----------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $12.020
----------------------------------------------------------
TOTAL RETURN(2) 20.20%
----------------------------------------------------------
Ratios/Supplemental Data
----------------------------------------------------------
Net assets, end of period
(000's omitted) $18,494
Ratios (As a percentage of
average daily net assets):
Expenses 2.46%(3)
Expenses after custodian
fee reduction 2.46%(3)
Net investment loss (0.81)%(3)
Portfolio Turnover 128%
----------------------------------------------------------
</TABLE>
(1) For the period from the start of business, January 21, 2000, to
October 31, 2000.
(2) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return
is not computed on an annualized basis.
(3) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
14
<PAGE>
EATON VANCE TAX-MANAGED VALUE FUND AS OF OCTOBER 31, 2000
NOTES TO FINANCIAL STATEMENTS
1 Significant Accounting Policies
-------------------------------------------
Eaton Vance Tax-Managed Value Fund (the Fund) is a diversified series of
Eaton Vance Mutual Funds Trust (the Trust). The Trust is an entity of the
type commonly known as a Massachusetts business trust and is registered under
the Investment Company Act of 1940, as amended, as an open-end management
investment company. The Fund seeks to achieve long-term after-tax returns by
investing in a diversified portfolio of value securities, primarily in well-
established U.S. companies. The Fund has three classes of shares. Class A
shares are generally sold subject to a sales charge imposed at time of
purchase. Class B and Class C shares are sold at net asset value and are
generally subject to a contingent deferred sales charge (see Note 6). Each
class represents a pro rata interest in the Fund, but votes separately on
class-specific matters and (as noted below) is subject to different expenses.
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 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 fair 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. Over-the-counter options are normally valued
at the mean between the latest bid and asked price. 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 Income -- Dividend income is recorded on the ex-dividend date for dividends
received in cash and/or securities. 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.
C 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, 2000, the Fund, for federal
income tax purposes, had a capital loss carryover of $3,032,527 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,
2008.
D Financial Futures Contracts -- Upon the entering of a financial futures
contract, the Fund is required to deposit (initial margin) either in cash or
securities an amount 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 the 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.
E Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
to the Fund. Pursuant to the custodian agreement, IBT receives a fee reduced
by credits which are determined based on the average daily cash balance the
Fund maintains with IBT. All significant credit balances used to reduce the
Fund's custodian fees are reported as a reduction of total expenses in the
Statement of Operations.
F Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of income and expense during the reporting period. Actual results could
differ from those estimates.
15
<PAGE>
EATON VANCE TAX-MANAGED VALUE FUND AS OF OCTOBER 31, 2000
NOTES TO FINANCIAL STATEMENTS CONT'D
G Other -- Investment transactions are accounted for on a trade date basis.
2 Distributions to Shareholders
-------------------------------------------
It is the present policy of the Fund to make at least one distribution
annually (normally in December) of all or substantially all of its net
investment income and at least one distribution annually of all or
substantially all of its net realized capital gains. Distributions are paid
in the form of additional shares of the Fund or, at the election of the
shareholder, in cash. Shareholders may reinvest distributions in shares of
the Fund at the net asset value as of the close of business on the
ex-dividend 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 Shares of Beneficial Interest
-------------------------------------------
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
PERIOD ENDED
CLASS A OCTOBER 31, 2000(1)
<S> <C>
-----------------------------------------------------------------
Sales 2,552,595
Redemptions (72,017)
-----------------------------------------------------------------
NET INCREASE 2,480,578
-----------------------------------------------------------------
<CAPTION>
PERIOD ENDED
CLASS B OCTOBER 31, 2000(2)
<S> <C>
-----------------------------------------------------------------
Sales 1,799,129
Redemptions (31,879)
-----------------------------------------------------------------
NET INCREASE 1,767,250
-----------------------------------------------------------------
<CAPTION>
PERIOD ENDED
CLASS C OCTOBER 31, 2000(3)
<S> <C>
-----------------------------------------------------------------
Sales 1,575,540
Redemptions (36,793)
-----------------------------------------------------------------
NET INCREASE 1,538,747
-----------------------------------------------------------------
</TABLE>
(1) For the period from the start of business, December 27, 1999, to
October 31, 2000.
(2) For the period from the start of business, January 18, 2000, to
October 31, 2000.
(3) For the period from the start of business, January 24, 2000, to
October 31, 2000.
4 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. Under the advisory agreement, EVM receives a monthly advisory fee in
the amount of 13/240 of 1% (equal to 0.650% 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 period from the start of business, December
27, 1999 to October 31, 2000, the advisory fee amounted to $135,508. In
addition, an administrative fee is earned by EVM for managing and
administering the business affairs of the Fund. Under the administration
agreement, EVM earns a fee in the amount of 0.15% per annum of the average
daily net assets of the Fund. For the period from the start of business,
December 27, 1999 to October 31, 2000, the administration fee amounted to
$31,393. The Fund was informed that Eaton Vance Distributors, Inc. (EVD), a
subsidiary of EVM and the Fund's principal underwriter, received $65,957 as
its portion of the sales charge on sales of Class A shares for the period
from the start of business, December 27, 1999 to October 31, 2000. Except for
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 the
investment adviser and administrative fees. Trustees of the Fund that 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 period from the start of business,
December 27, 1999 to October 31, 2000, no significant amounts have been
deferred. Certain officers and Trustees of the Fund are officers of the above
organizations.
16
<PAGE>
EATON VANCE TAX-MANAGED VALUE FUND AS OF OCTOBER 31, 2000
NOTES TO FINANCIAL STATEMENTS CONT'D
5 Distribution and Service Plans
-------------------------------------------
The Fund has in effect distribution plans for Class B shares (Class B Plan)
and Class C shares (Class C Plan) pursuant to Rule 12b-1 under the Investment
Company Act of 1940 and a service plan for Class A shares (Class A Plan)
(collectively, the Plans). The Class B and Class C Plans require the Fund to
pay EVD amounts equal to 1/365 of 0.75% of the Fund's average daily net
assets attributable to Class B and Class C shares, 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) interest calculated by
applying the rate of 1% over the prevailing prime rate to the outstanding
balance of Uncovered Distribution Charges of EVD, of each respective class,
reduced by the aggregate amount of contingent deferred sales charges (see
Note 6) and daily amounts theretofore paid to EVD by each respective class.
The Fund paid or accrued $48,950 and $38,495, for Class B and C shares,
respectively, to or payable to EVD for the period from the start of business,
December 27, 1999 to October 31, 2000, representing 0.75% (annualized) of the
average daily net assets for Class B and Class C shares. At October 31, 2000,
the amount of Uncovered Distribution Charges EVD calculated under the Plans
was approximately $862,000 and $936,000 for Class B and Class C shares,
respectively.
The Plans authorize the Fund to make payments of service fees to EVD,
investment dealers and other persons in amounts equal to 0.25% of the Fund's
average daily net assets attributable to Class A, Class B, and Class C shares
for each fiscal year. Service fee payments are made for personal services
and/or the maintenance of shareholder accounts. 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. Service fee
payments paid or accrued for the period from the start of business,
December 27, 1999 to October 31, 2000 amounted to $23,146, $16,162 and
$12,832 for Class A, Class B and Class C shares, respectively.
6 Contingent Deferred Sales Charge
-------------------------------------------
A contingent deferred sales charge (CDSC) generally is imposed on redemptions
of Class B shares made within six years of purchase and on redemptions 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
or capital gain distributions. Class A shares may be subject to a 1% CDSC if
redeemed within one year of purchase (depending on the circumstances of
purchase). Class B 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 one year of purchase.
No CDSC is levied on shares which have been sold to EVM or its affiliates or
to their respective employees or clients and may be waived under certain
other limited conditions. CDSCs received on Class B and Class C redemptions
are paid to EVD to reduce the amount of Uncovered Distribution Charges
calculated under the Class B and Class C Plans, respectively (see Note 5).
CDSCs received on Class B and Class C redemptions when no Uncovered
Distribution Charges exist for the respective classes will be credited to the
Fund. EVD received approximately $10,000 and $1,000 of CDSCs paid by
shareholders of Class B and Class C shares, respectively, during the period
from the start of business, December 27, 1999 to October 31, 2000.
7 Investment Transactions
-------------------------------------------
Purchases and sales of investments, other than short-term obligations,
aggregated $90,695,361 and $32,361,500, respectively, for the period from the
start of business, December 27, 1999 to October 31, 2000.
8 Federal Income Tax Basis of Investments
-------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned at October 31, 2000, as computed on a federal income tax
basis, were as follows:
<TABLE>
<S> <C>
AGGREGATE COST $57,862,714
-----------------------------------------------------
Gross unrealized appreciation $10,666,333
Gross unrealized depreciation (311,037)
-----------------------------------------------------
NET UNREALIZED APPRECIATION $10,355,296
-----------------------------------------------------
</TABLE>
9 Financial Instruments
-------------------------------------------
The Fund may trade in financial instruments with off-balance sheet risk in
the normal course of its investing activities to assist in managing exposure
to various market risks. These financial instruments include written options,
17
<PAGE>
EATON VANCE TAX-MANAGED VALUE FUND AS OF OCTOBER 31, 2000
NOTES TO FINANCIAL STATEMENTS CONT'D
forward foreign currency exchange contracts, and financial futures contracts
and may involve, to a varying degree, elements of risk in excess of the
amounts recognized for financial statement purposes.
The notional or contractual amounts of these instruments represent the
investment the Portfolio has in particular classes of financial instruments
and does not necessarily represent the amounts potentially subject to risk.
The measurement of the risks associated with these instruments is meaningful
only when all related and offsetting transactions are considered.
The Fund did not have any open obligations under these financial instruments
at October 31, 2000.
10 Line of Credit
-------------------------------------------
The Fund participates with other portfolios and funds managed by EVM and its
affiliates in a $150 million unsecured line of credit agreement with a group
of banks. Borrowings will be made by the Fund solely to facilitate the
handling of unusual and/or unanticipated short-term cash requirements.
Interest is charged to each participating portfolio or fund based on its
borrowings at an amount above either the Eurodollar rate or Federal Funds
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
portfolios and funds at the end of each quarter. The Fund did not have any
significant borrowings or allocated fees during the period from the start of
business, December 27, 1999 to October 31, 2000.
18
<PAGE>
EATON VANCE TAX-MANAGED VALUE FUND AS OF OCTOBER 31, 2000
INDEPENDENT AUDITORS' REPORT
TO THE TRUSTEES AND SHAREHOLDERS
OF EATON VANCE MUTUAL FUNDS TRUST:
---------------------------------------------
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Eaton Vance Tax-Managed Value Fund (one of the
series constituting Eaton Vance Mutual Funds Trust) as of October 31, 2000, and
the related statements of operations and changes in net assets and financial
highlights for the period from the start of business, December 27, 1999 to
October 31, 2000. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. Our
procedures included confirmation of securities owned as of October 31, 2000 by
correspondence with the custodian and brokers; where replies were not received
from brokers, we performed other auditing procedures. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of the Eaton Vance
Tax-Managed Value Fund at October 31, 2000, and the results of its operations,
the changes in its net assets, and its financial highlights for the stated
period, in conformity with accounting principles generally accepted in the
United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
December 8, 2000
19
<PAGE>
EATON VANCE TAX-MANAGED VALUE FUND AS OF OCTOBER 31, 2000
INVESTMENT MANAGEMENT
Officers
James B. Hawkes
President and Trustee
Willam H. Ahern, Jr.
Vice President
Thomas J. Fetter
Vice President
Armin J. Lang
Vice President
Michael R. Mach
Vice President
Robert B. MacIntosh
Vice President
Edward E. Smiley, Jr.
Vice President
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Trustees
Jessica M. Bibliowicz
President and Chief Executive Officer,
National Financial Partners
Donald R. Dwight
President, Dwight Partners, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment
Banking Emeritus, Harvard University
Graduate School of Business Administration
Norton H. Reamer
Chairman and Chief Operating Officer,
Hellman, Jordan Management Co.
President, Jordan Simmons Capital LLC and Unicorn
Lynn A. Stout
Professor of Law,
Georgetown University Law Center
Jack L. Treynor
Investment Adviser and Consultant
20
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