<PAGE>
1933 Act File No. 2-95103
1940 Act File No. 811-4196
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / x /
Pre-Effective Amendment No. ________ / /
Post-Effective Amendment No. 15 / x /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / x /
Amendment No. 16 / x /
Medical Research Investment Fund, Inc.
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(Exact Name of Registrant as Specified in Charter)
5847 San Felipe, Suite 4100, Houston, Texas 77057
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (713) 260-9000
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Allan S. Mostoff, Esq., Dechert Price & Rhoads
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500 K Street, N.W., Suite 500, Washington, DC 20005
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
/ / immediately upon filing pursuant to paragraph (b).
/ / on ________________ pursuant to paragraph (b).
/XX/ 60 days after filing pursuant to paragraph (a).
/ / on (date) pursuant to paragraph (a) of rule 485.
Registrant has filed with the Securities and Exchange Commission a declaration
pursuant to Rule 24f-2 under the Investment Company Act of 1940, and:
/XX/ filed the notice required by that Rule on October 27, 1995; or
/ / intends to file the notice required by that Rule on or
about ___________; or
/ / during the most recent fiscal year did not sell any securities
pursuant to Rule 24f-2 under the Investment Company Act of 1940,
and, pursuant to Rule 24f-2(b)(2), need not file the Notice.
Worldwide Health Sciences Portfolio has also executed this Registration
Statement.
<PAGE>
MEDICAL RESEARCH INVESTMENT FUND, INC.
CROSS REFERENCE SHEET
ITEMS REQUIRED BY FORM N-1A
<TABLE>
<CAPTION>
PART A
ITEM NO. FORM N-1A HEADING CAPTION IN PROSPECTUS
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<C> <C> <S>
1. Cover Page Cover Page
2. Synopsis Prospectus Summary; Shareholder and Fund Expenses; Example
3. Condensed Financial Information The Fund's Financial Highlights
4. General Description of Registrant Health Science Investments; The Fund's Investment Objective; Investment
Policies and Risks; Organization of the Fund and the Portfolio
5. Management of the Fund Management of the Fund and the Portfolio
5A. Management's Discussion of Fund Inapplicable
Performance
6. Capital Stock and Other Securities Organization of the Fund and the Portfolio; Reports to Shareholders; The
Lifetime Investing Account/Distribution Options; Distributions and Taxes
7. Purchase of Securities Being Offered Valuing Fund Shares; How to Buy Fund Shares;
Distribution Plan; The Lifetime Investing Account/Distribution Options; The
Eaton Vance Exchange Privilege; Eaton Vance Shareholder Services
8. Redemption or Repurchase How to Redeem Fund Shares
9. Pending Legal Proceedings Inapplicable
<CAPTION>
PART A
ITEM NO. FORM N-1A HEADING CAPTION IN STATEMENT OF ADDITIONAL INFORMATION
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<C> <C> <S>
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Other Information
13. Investment Objective and Policies Additional Information About Investment Policies; Investment Restrictions
14. Management of the Fund Board Members and Officers; Fees and Expenses
15. Control Persons and Principal Control Persons and Principal Holders of Securities
Holders of Securities
16. Investment Advisory and Other Services Management of the Fund and the Portfolio; Distribution Plan; Custodian;
Independent Accountants; Fees and Expenses
17. Brokerage Allocation and Other Practices Portfolio Security Transactions; Fees and Expenses
18. Capital Stock and Other Securities Other Information
19. Purchase, Redemption and Pricing of Determination of Net Asset Value; Service for
Securities Being Offered Withdrawal; Services for Accumulation; Principal Underwriter; Distribution
Plan; Fees and Expenses
20. Tax Status Taxes
21. Underwriters Principal Underwriter; Fees and Expenses
22. Calculation of Performance Data Investment Performance; Performance Information
23. Financial Statements Financial Statements
</TABLE>
<PAGE>
PART A
INFORMATION REQUIRED IN A PROSPECTUS
EV TRADITIONAL
WORLDWIDE HEALTH SCIENCES FUND, INC.
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EV TRADITIONAL WORLDWIDE HEALTH SCIENCES FUND, INC. (THE "FUND") IS A MUTUAL
FUND SEEKING LONG-TERM CAPITAL GROWTH BY INVESTING IN A GLOBAL AND DIVERSIFIED
PORTFOLIO OF SECURITIES OF HEALTH SCIENCE COMPANIES. THE FUND INVESTS ITS ASSETS
IN WORLDWIDE HEALTH SCIENCES PORTFOLIO (THE "PORTFOLIO"), A DIVERSIFIED OPEN-END
INVESTMENT COMPANY HAVING THE SAME INVESTMENT OBJECTIVE AS THE FUND, RATHER THAN
BY INVESTING DIRECTLY IN AND MANAGING ITS OWN PORTFOLIO OF SECURITIES AS WITH
HISTORICALLY STRUCTURED MUTUAL FUNDS.
Shares of the Fund are not deposits or obligations of, or guaranteed or endorsed
by, any bank or other insured depository institution, and are not federally
insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board
or any other government agency. Shares of the Fund involve investment risks,
including fluctuations in value and the possible loss of some or all of the
principal investment.
This Prospectus is designed to provide you with information you should know
before investing in the Fund. Please retain this document for future reference.
A Statement of Additional Information for the Fund dated September 3, 1996, as
supplemented from time to time, has been filed with the Securities and Exchange
Commission and is incorporated herein by reference. The Statement of Additional
Information is available without charge from the Fund's principal underwriter,
Eaton Vance Distributors, Inc. (the "Principal Underwriter"), 24 Federal Street,
Boston, MA 02110 (telephone (800) 225-6265). The sponsor and manager of the Fund
and the administrator of the Portfolio is Eaton Vance Management, 24 Federal
Street, Boston, MA 02110 ("Eaton Vance" or the "Manager"). The Portfolio's
investment adviser is G/A Capital Management, Inc. ("G/A" or the "Adviser"). The
principal business address of the Adviser is 41 Madison Avenue, 40th Floor, New
York, NY 10010-2202.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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<TABLE>
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PAGE PAGE
<S> <C> <C> <C>
Shareholder and Fund Expenses ..................... 2 How to Buy Fund Shares ............................ 11
The Fund's Financial Highlights .................... 3 How to Redeem Fund Shares ......................... 13
Health Science Investments ......................... 4 Reports to Shareholders ........................... 14
The Fund's Investment Objective ................... 4 The Lifetime Investing Account/Distribution
Investment Policies and Risks ...................... 5 Options ......................................... 15
Organization of the Fund and the Portfolio ......... 7 The Eaton Vance Exchange Privilege ................ 15
Management of the Fund and the Portfolio ........... 9 Eaton Vance Shareholder Services .................. 16
Distribution Plan .................................. 10 Distributions and Taxes ........................... 17
Valuing Fund Shares ................................ 10 Performance Information ........................... 19
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</TABLE>
PROSPECTUS DATED SEPTEMBER 3, 1996
<PAGE>
SHAREHOLDER AND FUND EXPENSES
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SHAREHOLDER TRANSACTION EXPENSES
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Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) 4.75%
Sales Charges Imposed on Reinvested Distributions None
Fees to Exchange Shares None
ANNUAL FUND AND ALLOCATED PORTFOLIO OPERATING EXPENSES (as a
percentage of average daily net assets)
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Management Fees (after fee reduction) 1.25%
Rule 12b-1 Distribution Fees 0.25
Other Expenses (after expense reduction) 0.50
----
Total Operating Expenses 2.00%
====
EXAMPLE 1 YEAR 3 YEARS
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An investor would pay the following maximum
initial sales charge and expenses
on a $1,000 investment, assuming (a) 5%
annual return and (b) redemption at the
end of each period: $67 $107
NOTES:
The table and Example summarize the aggregate expenses of the Fund and the
Portfolio and are designed to help investors understand the costs and expenses
they will bear, directly or indirectly, by investing in the Fund. Except for the
investment advisory fee, expenses are estimated for the fiscal year ending
August 31, 1997. Management Fees include management fees paid by the Fund,
administration fees paid by the Portfolio and investment advisory fees paid by
the Portfolio of 0.25%, 0.25% and 1.00%, respectively. The advisory fee is
assumed to be the same as the actual fee paid by the Fund for its last fiscal
year. The advisory fee is subject to a performance adjustment after one year.
See "Management of the Fund and the Portfolio." The management and
administration fee information contained in the table assumes reimbursement to
the Fund by the Manager and Administrator as a result of an expense limitation
agreement. Absent a fee reduction and expense allocation, Management Fees would
amount to 1.50%, Other Expenses would amount to 0.56% and total estimated
operating expenses for the fiscal year ending August 31, 1997 would be 2.31%.
The Manager of the Fund has agreed to waive their fee and/or reimburse the Fund
for operating expenses to maintain an expense ratio of 2.0% or less until August
31, 1999.
The Fund invests exclusively in the Portfolio. The Directors of the Fund believe
the aggregate per share expenses of the Fund and the Portfolio should
approximate, and over time be less than, the per share expenses the Fund would
incur if the Fund retained the services of an investment adviser for the Fund
and the Fund's assets were invested directly in the type of securities being
held by the Portfolio.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. Federal
regulations require the Example to assume a 5% annual return, but actual return
will vary. For further information regarding the expenses of the Fund and the
Portfolio see "Organization of the Fund and the Portfolio," "Management of the
Fund and the Portfolio" and "How to Redeem Fund Shares." A long-term shareholder
in the Fund may pay more than the economic equivalent of the maximum front-end
sales charge permitted by a rule of the National Association of Securities
Dealers, Inc. See "Distribution Plan."
No sales charge is payable at the time of purchase on investments of $1 million
or more. However, a contingent deferred sales charge of 0.50% will be imposed on
such investments in the event of certain redemptions within 12 months of
purchase. See "How to Buy Fund Shares," "How to Redeem Fund Shares" and "Eaton
Vance Shareholder Services."
Other investment companies and investors with different distribution
arrangements and fees are investing in the Portfolio and others may do so in the
future. See "Organization of the Fund and the Portfolio."
<PAGE>
THE FUND'S FINANCIAL HIGHLIGHTS
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The following table sets forth the per share operating performance data for a
share of capital stock outstanding, total return, ratios to average net assets
and other supplemental data for each year indicated. This information has been
derived from information provided in the Fund's financial statements which
have been examined by Tait, Weller & Baker, independent certified public
accountants. The Fund's annual report contains additional performance
information.
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<TABLE>
<CAPTION>
SIX MONTHS
ENDED
FEBRUARY 29, YEAR ENDED AUGUST 31,
1996 -----------------------------------------------------------------------------------------------
(UNAUDITED) 1995<F1> 1994<F1> 1993<F1> 1992<F1> 1991<F1> 1990<F1> 1989 1988 1987 1986
----------- ------- ------- ------- ------- ------- ------- ------- -------- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE, at
beginning of period $ 23.41 $ 18.30 $ 19.27 $ 17.94 $ 17.15 $ 14.70 $ 13.92 $ 10.60 $ 15.26 $ 13.65 $ 10.08
------ ------- ------- ------- ------- ------- ------- ------- -------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment
income (loss) $ (.20) $ (.34) $ (.31) $ (.27) $ (.26) $ (.23) $ (.33) $ (.86) $ (.45) $ (.20) $ (.45)
Net realized and
unrealized gain
(loss) on
investments 4.89 6.81 0.86 3.72 2.30 4.30 1.83 4.18 (3.17) 2.60 4.07
------- ------- ------- ------- ------- ------- ------- ------- -------- ------- -------
Total from
investment
operations $ 4.69 $ 6.47 $ 0.55 $ 3.45 $ 2.04 $ 4.07 $ 1.50 $ 3.32 $ (3.62) $ 2.40 $ 3.62
------- ------- ------- ------- ------- ------- ------- ------- -------- ------- -------
LESS DISTRIBUTIONS FROM:
Net investment income $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ .05
Net realized gain
on investments 2.80 1.36 1.52 2.12 1.25 1.62 .72 -- 1.04 .79 --
------- ------- ------- ------- ------- ------- ------- ------- -------- ------- -------
Total distributions $ 2.80 $ 1.36 $ 1.52 $ 2.12 $ 1.25 $ 1.62 $ .72 $ .00 $ 1.04 $ .79 $ .05
------- ------- ------- ------- ------- ------- ------- ------- -------- ------- -------
NET ASSET VALUE, at
end of period $ 25.30 $ 23.41 $ 18.30 $ 19.27 $ 17.94 $ 17.15 $ 14.70 $ 13.92 $ 10.60 $ 15.26 $ 13.65
======= ======= ======= ======= ======= ======= ======= ======= ======== ======= =======
TOTAL RETURN<F2> 22.43% 38.13% 2.69% 21.37% 12.04% 30.60% 11.13% 31.32% (25.30)% 19.81% 36.04%
RATIOS/SUPPLEMENTAL DATA
Net assets at end of
period (in thousands)$46,913 $17,690 $13,231 $10,223 $11,415 $ 6,955 $ 3,771 $ 2,754 $ 2,819 $ 4,015 $ 1,623
Ratio of operating
expenses to
average net
assets<F3>:
Before expense
reimbursement 2.01%<F4> 2.44% 2.67% 2.87% 2.59% 3.74% 4.77% 5.54% 5.71% 6.72% 9.90%
After expense
reimbursement N/A N/A 2.50% 2.50% 2.48% 2.50% 3.51% 5.27% 5.59% 6.08% 7.87%
Ratio of net
investment loss
to average net assets:
Before expense
reimbursement (1.72)%* (1.82)% (1.82)% (1.90)% (1.56)% (2.71)% (3.51)% (4.00)% (4.12)% (5.01)% (8.13)%
After expense
reimbursement N/A N/A (1.65)% (1.53)% (1.45)% (1.47)% (2.26)% (3.73)% (4.00)% (4.37)% (6.10)%
PORTFOLIO TURNOVER RATE 25% 45% 49% 77% 71% 81% 143% 75% 59% 95% 69%
<FN>
<F1> Based on average month end shares outstanding.
<F2> Calculated without a sales load.
<F3> Since September, 1989, the Adviser and Administrator have reimbursed a portion of their fees, when necessary, in order to
allow the Fund to operate within the expense limitation of any state having jurisdiction over the Fund.
<F4> Annualized
</TABLE>
<PAGE>
HEALTH SCIENCE INVESTMENTS
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Markets for health sciences products and services have undergone significant
growth over the last 25 years. In the U.S., the Department of Health and Human
Services estimates healthcare expenditures alone could increase to over 16% of
gross national product by the year 2000, compared to 7.6%, 10.3% and 14.0% in
1972, 1982 and 1992, respectively. Outside the U.S., most developed countries
are seeing similar growth in health care expenditures. In emerging markets,
health care spending is increasing as standards of living are improving and as
revenues become available to fund government and private programs to address
basic health needs. Factors contributing to this growth include demographic
shifts tending to a higher world population and a larger elderly populaton in
industrialized nations, technological advances, and popular acceptance of and
worldwide familiarity with healthcare products, resulting in high consumer
demand. In addition to increased demand for health science products and
services, substantial public and private expenditures on basic medical research
and advances in technology have accelerated the pace of medical discoveries. The
Adviser believes that the rate of change may accelerate in the future, causing
certain segments of the business to decline and others to experience growth.
Favorable investment opportunities may be found in companies that provide
products or services designed for the prevention, diagnosis and treatment of
physical and mental disorders.
In making portfolio selections, in addition to evaluating trends in corporate
revenues, earnings and dividends, the Adviser generally considers the amount of
capital currently being expended on research and development, and the nature
thereof. The Adviser believes that dollars invested in research and development
today frequently have significant bearing on future growth.
Portfolio securities generally will be selected from companies in the following
groups:
Biotechnology -- Companies which are producing or plan to produce as a result of
current research, diagnostic and therapeutic drugs and reagents based on genetic
engineering and the use of monoclonal antibodies or on recombinant DNA; also,
specialty companies catering to the unique requirements of biotechnology
companies such as those providing enzymes, media and purification equipment.
Diagnostics -- Private organizations that develop or maintain sophisticated
diagnostic equipment such as CAT scanners and Magnetic Resonance Imaging as well
as urological and serological assays.
Managed Healthcare -- Operators of investor-owned hospital chains (including
acute care psychiatric hospitals), nursing centers for the elderly, health
maintenance organizations, and rehabilitation clinics which seek to deliver
hospital care on an efficient cost basis.
Medical Equipment and Supplies -- Companies engaged in the manufacture of
inpatient and outpatient medical (and dental), surgical, laboratory and
diagnostic products (ranging from cotton swabs through kidney dialyses equipment
to CAT scanners).
Pharmaceuticals -- Companies involved with new types of drugs and their delivery
systems.
By focusing on companies such as the foregoing, the Adviser believes that the
opportunity for long-term capital growth exists. Of course, there can be no
assurance that the Portfolio will be able to take advantage of the foregoing
opportunities, or that such investment opportunities will be favorable.
THE FUND'S INVESTMENT OBJECTIVE
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THE FUND'S INVESTMENT OBJECTIVE IS TO SEEK LONG-TERM CAPITAL GROWTH BY INVESTING
IN A GLOBAL AND DIVERSIFIED PORTFOLIO OF HEALTH SCIENCE COMPANIES. IT CURRENTLY
SEEKS TO MEET ITS INVESTMENT OBJECTIVE BY INVESTING ITS ASSETS IN WORLDWIDE
HEALTH SCIENCES PORTFOLIO (THE "PORTFOLIO"), A SEPARATE REGISTERED INVESTMENT
COMPANY THAT INVESTS IN SECURITIES OF HEALTH SCIENCE COMPANIES. This investment
structure is commonly referred to as a "master/feeder" structure.
The Fund is intended for long-term investors who can accept international
investment risk and little or no current income. Because the Fund concentrates
its investments in medical research and the health care industry, the Fund is
not intended to be a complete investment program. Prospective investors should
take into account their objectives and other investments when considering the
purchase of Fund shares. The Fund cannot assure achievement of its investment
objective. See "Investment Policies and Risks" for further information. The
investment objective of the Fund and the Portfolio are nonfundamental. See
"Organization of the Fund and the Portfolio -- Special Information on the
Fund/Portfolio Investment Structure" for further information.
INVESTMENT POLICIES AND RISKS
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The Portfolio invests in a global and diversified portfolio of securities of
health science companies. These companies principally are engaged in the
development, production or distribution of products or services related to
scientific advances in healthcare, including biotechnology, diagnostics, managed
healthcare and medical equipment and supplies, and pharmaceuticals. At the time
the Fund makes an investment, 50% or more of such a company's sales, earnings or
assets will arise from or will be dedicated to the application of scientific
advances related to healthcare. The Portfolio may invest in securities of both
established and emerging companies, some of which may be denominated in foreign
currencies.
Under normal market conditions, the Portfolio will invest at least 65% of its
assets in securities of health science companies, including common and preferred
stocks; equity interests in partnerships; convertible preferred stocks; and
other convertible instruments. Convertible debt instruments generally will be
rated below investment grade (i.e., rated lower than Baa by Moody's Investors
Service, Inc. or lower than BBB by Standard & Poor's Ratings Group) or, if
unrated, determined by the Adviser to be of equivalent quality. Convertible debt
securities so rated are commonly called "junk bonds" and have risks similar to
equity securities; they are speculative and changes in economic conditions or
other circumstances are more likely to lead to a weakened capacity to make
principal and interest payments than is the case with higher grade debt
securities. Such below investment grade debt securities will not exceed 20% of
total assets. For temporary defensive purposes, the Portfolio may invest without
limit in high grade debt securities of foreign and United States companies,
foreign governments and the U.S. Government, and their respective agencies,
instrumentalities, political subdivisions and authorities, as well as in high
quality money market instruments.
An investment in the Fund entails the risk that the principal value of Fund
shares may not increase or may decline. The Portfolio's investments are subject
to the risk of adverse developments affecting particular companies, the health
science industries and securities markets generally. The value of Fund shares
may fluctuate more than shares invested in a broader range of industries. Many
health science companies are subject to substantial governmental regulations
that can affect their prospects. Changes in governmental policies, such as
reductions in the funding of third-party payment programs, may have a material
effect on the demand for particular health care products and services.
Regulatory approvals (often entailing lengthy application and testing
procedures) are also generally required before new drugs and certain medical
devices and procedures may be introduced. Many of the products and services of
companies engaged in medical research and health care are also subject to
relatively high risks of rapid obsolescence caused by progressive scientific and
technological advances. The enforcement of patent, trademark and other
intellectual property laws will affect the value of many such companies. The
Fund will invest in securities of emerging growth health science companies,
which may offer limited products or services or which are at the research and
developmental stage with no marketable or approved products or technologies. The
securities of smaller, less-seasoned companies, which may include legally
restricted securities, are generally subject to greater price fluctuations,
limited liquidity, higher transaction costs and higher investment risk. The
Portfolio may invest up to 15% of its net assets in illiquid securities, which
excludes securities eligible for resale under Rule 144A of the Securities Act of
1933 that the trustees and the Adviser determine are liquid. Holding Rule 144A
securities may increase illiquidity if qualified institutional buyers become
uninterested in buying them. In addition, the Portfolio may temporarily borrow
up to 5% of the value of its total assets to satisfy redemption requests or
settle securities transactions.
INVESTING IN FOREIGN SECURITIES. Investing in securities issued by foreign
companies and governments involves considerations and possible risks not
typically associated with investing in securities issued by the U.S. Government
and domestic corporations. The values of foreign investments are affected by
changes in currency rates or exchange control regulations, application of
foreign tax laws (including withholding tax), changes in governmental
administration or economic or monetary policy (in this country or abroad), or
changed circumstances in dealings between nations. Because investment in foreign
issuers will usually involve currencies of foreign countries, the value of the
assets of the Portfolio as measured in U.S. dollars may be adversely affected by
changes in foreign currency exchange rates. Such rates may fluctuate
significantly over short periods of time causing the Portfolio's net asset value
to fluctuate as well. Costs are incurred in connection with conversions between
various currencies. In addition, foreign brokerage commissions, custody fees and
other costs of investing are generally higher than in the United States, and
foreign securities markets may be less liquid, more volatile and less subject to
governmental supervision than in the United States. Investments in foreign
issuers could be adversely affected by other factors not present in the United
States, including expropriation, confiscatory taxation, lack of uniform
accounting and auditing standards and potential difficulties in enforcing
contractual obligations. In addition to investing in foreign companies of
countries which represent established and developed economies, the Portfolio may
also invest some of its assets in the emerging economies of lesser developed
countries such as China and India, and countries located in Latin America and
Eastern Europe. Consistent with its investment objective, the Portfolio is not
limited in the percentage of assets it may invest in such securities but the
number of health science issues in less developed countries is relatively small.
The relative risk and cost of investing in the securities of companies in such
emerging economies may be higher than an investment in securities of companies
in more developed countries. As of the date of this Prospectus, the Adviser
initially expects to invest 50% of the Portfolio's assets in foreign securities.
DERIVATIVE INSTRUMENTS. The Portfolio may purchase or sell derivative
instruments (which are instruments that derive their value from another
instrument, security, index or currency) to enhance return (which may be
speculative), to hedge against fluctuations in securities prices, interest rates
or currency exchange rates, or as a substitute for the purchase or sale of
securities or currencies. The Portfolio's transactions in derivative instruments
may be in the U.S. or abroad and may include the purchase or sale of futures
contracts on securities, securities indices, other indices, other financial
instruments or currencies; options on futures contracts; exchange-traded and
over-the-counter options on securities, indices or currencies; and forward
foreign currency exchange contracts. The Portfolio's transactions in derivative
instruments involve a risk of loss or depreciation due to: unanticipated adverse
changes in securities prices, interest rates, the other financial instruments'
prices or currency exchange rates; the inability to close out a position;
default by the counterparty; imperfect correlation between a position and the
desired hedge; tax constraints on closing out positions; and portfolio
management constraints on securities subject to such transactions. The loss on
derivative instruments (other than purchased options) may substantially exceed
the Portfolio's initial investment in these instruments. In addition, the
Portfolio may lose the entire premium paid for purchased options that expire
before they can be profitably exercised by the Portfolio. The Portfolio incurs
transaction costs in opening and closing positions in derivative instruments.
There can be no assurance that the Adviser's use of derivative instruments will
be advantageous to the Portfolio.
To the extent that the Portfolio enters into futures contracts, options on
futures contracts and options on foreign currencies traded on an exchange
regulated by the Commodity Futures Trading Commission ("CFTC"), in each case
that are not for bona fide hedging purposes (as defined by the CFTC), the
aggregate initial margin and premiums required to establish these positions
(excluding the amount by which options are "in-the-money") may not exceed 5% of
the liquidation value of the Portfolio's investments, after taking into account
unrealized profits and unrealized losses on any contracts the Portfolio has
entered into. There is no current intention to use derivative instruments for
non-hedging purposes.
Forward contracts are individually negotiated and privately traded by currency
traders and their customers. A forward contract involves an obligation to
purchase or sell a specific currency (or basket of currencies) for an agreed
price at a future date, which may be any fixed number of days from the date of
the contract. The Portfolio may engage in cross-hedging by using forward
contracts in one currency (or basket of currencies) to hedge against
fluctuations in the value of securities denominated in a different currency if
an Adviser determines that there is an established historical pattern or
correlation between the two currencies (or the basket of currencies and the
underlying currency). Use of a different foreign currency magnifies the
Portfolio's exposure to foreign currency exchange rate fluctuations. The
Portfolio may also use forward contracts to shift its exposure to foreign
currency exchange rate changes from one currency to another.
CURRENCY SWAPS. The Portfolio may enter into currency swaps for both hedging and
non-hedging purposes. Currency swaps involve the exchange of rights to make or
receive payments in specified currencies. Since currency swaps are individually
negotiated, the Portfolio expects to achieve an acceptable degree of correlation
between its portfolio investments and its currency swap positions. Currency
swaps usually involve the delivery of the entire principal value of one
designated currency in exchange for the other designated currency. Therefore,
the entire principal value of a currency swap is subject to the risk that the
other party to the swap will default on its contractual delivery obligations.
The use of currency swaps is a highly specialized activity which involves
special investment techniques and risks. If the Adviser is incorrect in its
forecasts of market values and currency exchange rates, the Portfolio's
performance will be adversely affected.
REPURCHASE AGREEMENTS. The Portfolio may enter into repurchase agreements (the
purchase of a security coupled with an agreement to resell) with respect to its
permitted investments, but currently intends to do so only with member banks of
the Federal Reserve System or with primary dealers in U.S. Government
securities. In the event of the bankruptcy of the other party to a repurchase
agreement, the Portfolio might experience delays in recovering its cash. To the
extent that, in the meantime, the value of the securities the Portfolio
purchased may have decreased, the Portfolio could experience a loss. The
Portfolio does not expect to invest more than 5% of its total assets in
repurchase agreements under normal circumstances.
OTHER INVESTMENT COMPANIES. The Portfolio reserves the right to invest up to 10%
of its total assets in the securities of other investment companies unaffiliated
with an Adviser that have the characteristics of closed-end investment
companies. The Portfolio will indirectly bear its proportionate share of any
management fees paid by investment companies in which it invests in addition to
the advisory fee paid by the Portfolio. The value of closed-end investment
company securities, which are usually traded on an exchange, is affected by
demand for the securities themselves, independent of the demand for the
underlying portfolio assets, and, accordingly, such securities can trade at a
discount from their net asset values.
CERTAIN INVESTMENT POLICIES. The Fund and the Portfolio have adopted certain
fundamental investment restrictions and policies which are enumerated in detail
in the Statement of Additional Information and which may not be changed unless
authorized by a shareholder vote and an investor vote. Investment restrictions
are considered at the time of acquisition of assets; the sale of portfolio
assets generally is not required in the event of a subsequent change in
circumstances. As a matter of fundamental policy the Portfolio will not invest
25% or more of its total assets in the securities of issuers in any one
industry, other than U.S. Government securities and securities of health science
companies. However, the Portfolio is permitted to invest 25% or more of its
total assets in (i) the securities of issuers located in any one country and
(ii) securities denominated in the currency of any one country. Under normal
market conditions, the Portfolio will hold securities of issuers in an least
three countries.
Except for the fundamental investment restrictions and policies specifically
identified above and enumerated in the Statement of Additional Information, the
investment objective and policies of the Fund and the Portfolio are not
fundamental policies and accordingly may be changed by the Directors of the Fund
and the Trustees of the Portfolio without obtaining the approval of the
shareholders of the Fund or the investors in the Portfolio, as the case may be.
If any changes were made, the Fund might have investment objectives different
from the objectives which an investor considered appropriate at the time the
investor became a shareholder in the Fund. Please refer to the Statement of
Additional Information for further information regarding the investment policies
and risks of the Fund and Portfolio.
ORGANIZATION OF THE FUND AND THE PORTFOLIO
- ------------------------------------------------------------------------------
The Fund is a Maryland corporation incorporated in November, 1984. The Directors
of the Fund are responsible for the overall management and supervision of its
affairs. The Fund's authorized capital consists of one billion full and
fractional shares of Common Stock, $.001 par value per share. The shares have
equal rights and privileges. When issued and outstanding, the shares are fully
paid and nonassessable by the Fund and redeemable as described under "How to
Redeem Fund Shares." Shareholders are entitled to one vote for each full share
held. Fractional shares may be voted proportionately. Shares have no preemptive
or conversion rights and are freely transferable. In the event of the
liquidation of the Fund, shareholders are entitled to share pro rata in the net
assets of the Fund available for distribution to shareholders. The Fund will
only hold shareholder meetings when required by law; no annual meeting is
required. The Fund formerly was named the Medical Research Investment Fund, Inc.
THE PORTFOLIO IS ORGANIZED AS A TRUST UNDER THE LAWS OF THE STATE OF NEW YORK
AND INTENDS TO BE TREATED AS A PARTNERSHIP FOR FEDERAL TAX PURPOSES. The
Portfolio, as well as the Fund, intends to comply with all applicable federal
and state securities laws. The Portfolio's Declaration of Trust provides that
the Fund and other entities permitted to invest in the Portfolio (e.g., other
U.S. and foreign investment companies, and common and commingled trust funds)
will each be liable for all obligations of the Portfolio. However, the risk of
the Fund incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance exists and the Portfolio itself
is unable to meet its obligations. Accordingly, the Directors of the Fund
believe that neither the Fund nor its shareholders will be adversely affected by
reason of the Fund investing in the Portfolio.
SPECIAL INFORMATION ON THE FUND/PORTFOLIO INVESTMENT STRUCTURE. An investor in
the Fund should be aware that the Fund, unlike mutual funds which directly
acquire and manage their own portfolios of securities, seeks to achieve its
investment objective by investing its assets in an interest in the Portfolio,
which is a separate investment company with an identical investment objective
(although the Fund may temporarily hold a de minimis amount of cash). Therefore,
the Fund's interest in securities owned by the Portfolio is indirect. In
addition to selling an interest to the Fund, the Portfolio may sell interests to
other affiliated and non-affiliated mutual funds or institutional investors.
Such investors will invest in the Portfolio on the same terms and conditions and
will pay a proportionate share of the Portfolio's expenses. However, the other
investors investing in the Portfolio are not required to sell their shares at
the same public offering price as the Fund due to variations in sales
commissions and other operating expenses. Therefore, investors in the Fund
should be aware that these differences may result in differences in returns
experienced by investors in the various funds that invest in the Portfolio. Such
differences in returns are also present in other mutual fund structures,
including funds that have multiple classes of shares. For information regarding
the investment objective, policies and restrictions of the Portfolio, see
"Investment Policies and Risks." Further information regarding the investment
practices of the Portfolio may be found in the Statement of Additional
Information.
The Directors of the Fund have considered the advantages and disadvantages of
investing the assets of the Fund in the Portfolio, as well as the advantages and
disadvantages of the two-tier format. The Directors believe that the structure
offers opportunities for substantial growth in the assets of the Portfolio, and
affords the potential for economies of scale for the Fund.
The Fund may withdraw (completely redeem) all its assets from the Portfolio at
any time if the Board of Directors of the Fund determines that it is in the best
interest of the Fund to do so. The investment objective and the nonfundamental
investment policies of the Fund and the Portfolio may be changed by the
Directors of the Fund and the Trustees of the Portfolio without obtaining the
approval of the shareholders of the Fund or the investors in the Portfolio, as
the case may be. Any such change of the investment objective will be preceded by
thirty days' advance written notice to the shareholders of the Fund or the
investors in the Portfolio, as the case may be. If a shareholder redeems shares
because of a change in the nonfundamental objective or policies of the Fund,
those shares may be subject to a contingent deferred sales charge, as described
in "How to Redeem Fund Shares." In the event the Fund withdraws all of its
assets from the Portfolio, or the Board of Directors of the Fund determines that
the investment objective of the Portfolio is no longer consistent with the
investment objective of the Fund, such Directors would consider what action
might be taken, including investing the assets of the Fund in another pooled
investment entity or retaining an investment adviser to manage the Fund's assets
in accordance with its investment objective. The Fund's investment performance
may be affected by a withdrawal of all its assets from the Portfolio.
Information regarding other pooled investment entities or funds which invest in
the Portfolio may be obtained by contacting Eaton Vance Distributors, Inc. (the
"Principal Underwriter"), 24 Federal Street, Boston, MA 02110 (617) 482-8260.
Smaller investors in the Portfolio may be adversely affected by the actions of
larger investors in the Portfolio. For example, if a large investor withdraws
from the Portfolio, the remaining investors may experience higher pro rata
operating expenses, thereby producing lower returns. Additionally, the Portfolio
may become less diverse, resulting in increased portfolio risk, and experience
decreasing economies of scale. However, this possibility exists as well for
historically structured funds which have large or institutional investors.
Until 1992, the Manager sponsored and advised historically structured funds.
Funds which invest all their assets in interests in a separate investment
company are a relatively new development in the mutual fund industry and,
therefore, the Fund may be subject to additional regulations than historically
structured funds.
The Declaration of Trust of the Portfolio provides that the Portfolio will
terminate 120 days after the complete withdrawal of the Fund or any other
investor in the Portfolio, unless either the remaining investors, by unanimous
vote at a meeting of such investors, or a majority of the Trustees of the
Portfolio, by written instrument consented to by all investors, agree to
continue the business of the Portfolio. This provision is consistent with
treatment of the Portfolio as a partnership for federal income tax purposes.
Whenever the Fund as an investor in the Portfolio is requested to vote on
matters pertaining to the Portfolio (other than the termination of the
Portfolio's business, which may be determined by the Trustees of the Portfolio
without investor approval), the Fund will hold a meeting of Fund shareholders
and will vote its interest in the Portfolio for or against such matters
proportionately to the instructions to vote for or against such matters received
from Fund shareholders. The Fund shall vote shares for which it receives no
voting instructions in the same proportion as the shares for which it receives
voting instructions. Other investors in the Portfolio may alone or collectively
acquire sufficient voting interests in the Portfolio to control matters relating
to the operation of the Portfolio, which may require the Fund to withdraw its
investment in the Portfolio or take other appropriate action. Any such
withdrawal could result in a distribution "in kind" of portfolio securities (as
opposed to a cash distribution from the Portfolio). If securities are
distributed, the Fund could incur brokerage, tax or other charges in converting
the securities to cash. In addition, the distribution in kind may result in a
less diversified portfolio of investments or adversely affect the liquidity of
the Fund. Notwithstanding the above, there are other means for meeting
shareholder redemption requests, such as borrowing.
The Directors of the Fund, including a majority of the noninterested Directors,
have approved written procedures designed to identify and address any potential
conflicts of interest arising from the fact that most of the Directors of the
Fund and the Trustees of the Portfolio are the same. Such procedures require
each Board to take action to resolve any conflict of interest between the Fund
and the Portfolio, and it is possible that the creation of separate Boards may
be considered. For further information concerning the Directors, Trustees and
officers of the Fund and the Portfolio, see "Directors and Officers" in the
Statement of Additional Information.
MANAGEMENT OF THE FUND AND THE PORTFOLIO
- ------------------------------------------------------------------------------
EATON VANCE MANAGEMENT ("EATON VANCE") ACTS AS THE SPONSOR AND MANAGER OF THE
FUND AND AS THE ADMINISTRATOR OF THE PORTFOLIO. THE PORTFOLIO HAS ENGAGED G/A
CAPITAL MANAGEMENT, INC. ("G/A"), LOCATED AT 41 MADISON AVENUE, 40TH FLOOR, NEW
YORK, NEW YORK 10010-2202 AS ITS INVESTMENT ADVISER (THE "ADVISER"). G/A was
incorporated in Delaware on February 24, 1989 and is principally owned by Samuel
D. Isaly, who serves as the President of G/A. The Portfolio is the only
investment company registered under the Investment Company Act of 1940 (the
"1940 Act") advised by G/A.
Investment decisions for the Portfolio are made by the portfolio manager, Samuel
D. Isaly. Mr. Isaly has been active in international and health care investing
throughout his career, beginning at Chase Manhattan Bank in New York in 1968. He
studied international economics, mathematics and econometrics at Princeton and
the London School of Economics. His company, Gramercy Associates, was the first
to develop an integrated worldwide system of analysis on the 100 leading
worldwide pharmaceutical companies, with investment recommendations conveyed to
50 leading financial institutions in the United States and Europe beginning in
1982. Gramercy Associates was absorbed into S.G. Warburg & Company Inc. in 1986,
where Mr. Isaly became a Senior Vice President. In July of 1989, Mr. Isaly
joined with Dr. Viren Mehta to found the partnership of Mehta and Isaly. The
operations of the combined effort are (1) to provide investment ideas to
institutional investors on the subject of worldwide health care, (2) to
undertake cross-border merger and acquisition projects in the industry and (3)
to provide investment management services to selected investors. The latter
activity is undertaken through the legal entity G/A Capital Management, Inc.
which is an investment advisory firm registered with the Securities and Exchange
Commission.
For its services, G/A receives a fee computed daily and payable monthly at an
annual rate of 1.00% of the Portfolio's average daily net assets up to $30
million of such assets, 0.90% of the next $20 million of such assets, and 0.75%
on such assets in excess of $50 million. The fee rate declines for net assets of
$500 million and greater. After September 1, 1997, G/A may receive a performance
based adjustment of up to .25% of the average daily net assets of the Portfolio.
For the year ended August 31, 1995, G/A received an advisory fee of 1.00% of
average daily net assets, during which time assets were managed at the Fund
level. G/A has agreed to pay EVD the equivalent of one-third of its advisory fee
receipts out of G/A's own resources for EVD's activities as placement agent of
the Portfolio.
The Adviser furnishes for the use of the Portfolio office space and all
necessary office facilities, equipment and personnel for servicing the
investments of the Portfolio. The Adviser places the portfolio securities
transactions of the Portfolio with many broker-dealer firms and use its best
efforts to obtain execution of such transactions at prices which are
advantageous to the Portfolio and at reasonably competitive commission rates.
Subject to the foregoing, the Adviser may consider sales of shares of the Fund
as a factor in the selection of firms to execute portfolio transactions.
Eaton Vance, its affiliates and its predecessor companies have been managing
assets of individuals and institutions since 1924 and managing investment
companies since 1931. Eaton Vance acts as investment adviser to investment
companies and various individual and institutional clients with assets under
management of over $16 billion. Eaton Vance is a wholly-owned subsidiary of
Eaton Vance Corp., a publicly-held holding company which through its
subsidiaries and affiliates engages primarily in investment management,
administration and marketing activities.
Eaton Vance, acting under the general supervision of the Boards of Directors of
the Fund and of Trustees of the Portfolio, manages and administers the business
affairs of the Fund and the Portfolio. Eaton Vance's services include monitoring
and providing reports to the Directors of the Fund and the Trustees of the
Portfolio concerning the investment performance achieved by the Adviser for the
Portfolio, recordkeeping, preparation and filing of documents required to comply
with federal and state securities laws, supervising the activities of the
transfer agent of the Fund and the custodian of the Portfolio, providing
assistance in connection with Board and shareholders' meetings and other
management and administrative services necessary to conduct the business of the
Fund and the Portfolio. Eaton Vance also furnishes for the use of the Fund and
the Portfolio office space and all necessary office facilities, equipment and
personnel for managing and administering the business affairs of the Fund and
the Portfolio. Eaton Vance does not provide any investment management or
advisory services to the Portfolio or the Fund.
The Fund, the Portfolio and G/A have adopted Codes of Ethics relating to
personal securities transactions. The Codes permit G/A personnel to invest in
securities (including securities that may be purchased or held by the Portfolio)
for their own accounts, subject to certain pre-clearance, reporting and other
restrictions and procedures contained in such Codes.
Under its management contract with the Fund, Eaton Vance receives a monthly
management fee in the amount of 1/48 of 1% (equal to 0.25% annually) of the
average daily net assets of the Fund up to $500 million, which fee declines at
intervals above $500 million. Under its administration agreement with the
Portfolio, Eaton Vance currently receives a monthly administration fee in the
amont of 1/48 of 1% (equal to .25% annually) of the average daily net assets of
the Portfolio up to $500 million, which fee declines at intervals above $500
million. The combined investment advisory, administration and management fees
payable by the Fund and the Portfolio are higher than similar fees charged by
many other investment companies.
The Fund and the Portfolio, as the case may be, will each be responsible for all
respective costs and expenses not expressly stated to be payable by the Adviser
under the investment advisory agreement, or Eaton Vance under the management
contract or the administration agreement, or by EVD under the distribution
agreement. Such costs and expenses to be borne by each of the Fund or the
Portfolio, as the case may be, include, without limitation: custody and transfer
agency fees and expenses, including those incurred for determining net asset
value and keeping accounting books and records; expenses of pricing and
valuation services; the cost of share certificates; membership dues in
investment company organizations; brokerage commissions and fees; fees and
expenses of registering under the securities laws; expenses of reports to
shareholders and investors; proxy statements, and other expenses of
shareholders' or investors' meetings; insurance premiums, printing and mailing
expenses; interest, taxes and corporate fees; legal and accounting expenses;
compensation and expenses of Directors or Trustees not affiliated with Eaton
Vance or the Adviser; and investment advisory, management and administration
fees. The Fund and the Portfolio, as the case may be, will also each bear
expenses incurred in connection with litigation in which the Fund or the
Portfolio, as the case may be, is a party and any legal obligation to indemnify
its respective officers and Board members with respect thereto. Eaton Vance has
agreed that through August 31, 1999, if the annual aggregate expenses of the
Fund (excluding extraordinary expenses) exceed 2.00% of average daily net
assets, then Eaton Vance will reduce its fees and take other actions to the
extent required to reduce Fund expenses.
DISTRIBUTION PLAN
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IN ADDITION TO MANAGEMENT FEES AND OTHER EXPENSES, THE FUND PAYS FOR CERTAIN
EXPENSES PURSUANT TO A DISTRIBUTION PLAN (THE "PLAN") DESIGNED TO MEET THE
REQUIREMENTS OF RULE 12B-1 UNDER THE 1940 ACT. The Plan provides that the Fund
will pay a monthly distribution fee to the Principal Underwriter in an amount
equal to 0.25% of the Fund's average daily net assets. Aggregate payments to the
Principal Underwriter under the Plan are limited to those permissible pursuant
to a rule of the National Association of Securities Dealers, Inc. (the "NASD
Rule"). The Principal Underwriter may realize a profit from these arrangements.
If the Plan is terminated or not continued in effect, the Fund has no obligation
to reimburse the Principal Underwriter for amounts expended by the Principal
Underwriter in distributing shares of the Fund.
VALUING FUND SHARES
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THE FUND VALUES ITS SHARES ONCE ON EACH DAY THE NEW YORK STOCK EXCHANGE (THE
"EXCHANGE") IS OPEN FOR TRADING, as of the close of regular trading on the
Exchange (normally 4:00 p.m. New York time). The Fund's net asset value per
share is determined by IBT Fund Services (Canada) Inc. (as agent for the Fund)
in the manner authorized by the Directors of the Fund. IBT Fund Services
(Canada), Inc. is a subsidiary of Investors Bank & Trust ("IBT"), the Fund's and
the Portfolio's custodian. Net asset value is computed by dividing the value of
the Fund's total assets, less its liabilities, by the number of Fund shares
outstanding. Because the Fund invests its assets in an interest in the
Portfolio, the Fund's net asset value will reflect the value of its interest in
the Portfolio (which, in turn, reflects the underlying value of the Portfolio's
assets and liabilities).
Authorized Firms must communicate an investor's order to the Principal
Underwriter prior to the close of the Principal Underwriter's business day to
receive that day's net asset value per share and the public offering price based
thereon. It is the Authorized Firms' responsibility to transmit orders promptly
to the Principal Underwriter, which is a wholly-owned subsidiary of Eaton Vance.
The Portfolio's net asset value is also determined as of the close of regular
trading on the Exchange by IBT Fund Services (Canada) Inc. (as agent for the
Portfolio) based on market or fair value in the manner authorized by the
Trustees of the Portfolio. Exchange traded equity securities generally are
valued at their last sale price. Net asset value is computed by subtracting the
liabilities of the Portfolio from the value of its total assets. For further
information regarding the valuation of the Portfolio's assets, see
"Determination of Net Asset Value" in the Statement of Additional Information.
SHAREHOLDERS MAY DETERMINE THE VALUE OF THEIR INVESTMENT BY MULTIPLYING THE
NUMBER OF FUND SHARES OWNED BY THE CURRENT NET ASSET VALUE PER SHARE.
HOW TO BUY FUND SHARES
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SHARES OF THE FUND MAY BE PURCHASED FOR CASH OR MAY BE ACQUIRED IN EXCHANGE FOR
SECURITIES. Investors may purchase shares of the Fund through Authorized Firms
at the effective public offering price, which price is based on the effective
net asset value per share plus the applicable sales charge. The Fund receives
the net asset value, while the sales charge is divided between the Authorized
Firm and the Principal Underwriter. The Principal Underwriter will furnish the
names of Authorized Firms to an investor upon request. An Authorized Firm may
charge its customers a fee in connection with transactions executed by that
Firm. The Fund may suspend the offering of shares at any time and may refuse an
order for the purchase of shares.
The sales charge may vary depending on the size of the purchase and the number
of shares of Eaton Vance funds the investor may already own, any arrangement to
purchase additional shares during a 13-month period or special purchase
programs. Complete details of how investors may purchase shares at reduced sales
charges under a Statement of Intention, Right of Accumulation, or various
employee benefit plans are available from Authorized Firms or the Principal
Underwriter.
The current sales charges and dealer commissions are:
SALES CHARGE SALES CHARGE DEALER COMMISSION
AS PERCENTAGE OF AS PERCENTAGE OF AS PERCENTAGE OF
AMOUNT OF PURCHASE AMOUNT INVESTED OFFERING PRICE OFFERING PRICE
- ------------------ ---------------- ---------------- ----------------
Less than $100,000 .. 4.99% 4.75% 4.00%
$100,000 but less
than $250,000 ..... 3.90 3.75 3.15
$250,000 but less
than $500,000 ..... 2.83 2.75 2.30
$500,000 but less
than $1,000,000 ... 2.04 2.00 1.70
$1,000,000 or more .. 0.00* 0.00* 0.50
*No sales charge is payable at the time of purchase on investments of $1
million or more. A contingent deferred sales charge ("CDSC") of 0.50% will be
imposed on such investments (as described below) in the event of certain
redemptions within 12 months of purchase.
The Principal Underwriter may at times allow discounts up to the full sales
charge. During periods when the discount includes the full sales charge,
Authorized Firms may be deemed to be underwriters as that term is defined in the
Securities Act of 1933. The Principal Underwriter may, from time to time, at its
own expense, provide additional incentives to Authorized Firms which employ
registered representatives who sell Fund shares and/or shares of other funds
distributed by the Principal Underwriter. In some instances, such additional
incentives may be offered only to certain Authorized Firms whose representatives
sell or are expected to sell significant amounts of shares. In addition, the
Principal Underwriter may from time to time increase or decrease the dealer
commissions paid to Authorized Firms.
An initial investment in the Fund must be at least $1,000. Once an account has
been established the investor may send investments of $50 or more at any time
directly to the Fund's transfer agent (the "Transfer Agent") as follows: First
Data Investor Services Group, P.O. Box 5123, Westborough, MA 01581-5123. The
$1,000 minimum initial investment is waived for Bank Automated Investing
accounts, which may be established with an investment of $50 or more. See
"Eaton Vance Shareholder Services."
Shares of the Fund may be sold at net asset value to shareholders of the Fund on
August 30, 1996 that have maintained their account until the subsequent
purchase, current and retired Directors and Trustees of Eaton Vance funds,
including the Portfolio; to officers and employees and clients of Eaton Vance
and its affiliates; to registered representatives and employees of Authorized
Firms; to bank employees who refer customers to registered representatives of
Authorized Firms; and to such persons' spouses and children under the age of 21
and their beneficial accounts. Shares may also be issued at net asset value (1)
in connection with the merger of an investment company with the Fund, (2) to
investors making an investment as part of a fixed fee program whereby an entity
unaffiliated with Eaton Vance provides multiple investment services, such as
management, brokerage and custody, (3) where the amount invested represents
redemption proceeds from a mutual fund unaffiliated with Eaton Vance, if the
redemption occurred no more than 60 days prior to the purchase of Fund shares
and the redeemed shares were subject to a sales charge, and (4) to investment
advisors, financial planners or other intermediaries who place trades for their
own accounts or the accounts of their clients and who charge a management,
consulting or other fee for their services; clients of such investment advisors,
financial planners or other intermediaries who place trades for their own
accounts if the accounts are linked to the master account of such investment
advisor, financial planner or other intermediary on the books and records of the
broker or agent; and retirement and deferred compensation plans and trusts used
to fund those plans, including, but not limited to, those defined in Section
401(a), 403(b) or 457 of the Internal Revenue Code of 1986, as amended (the
"Code") and "rabbi trusts."
No initial sales charge and no contingent deferred sales charge will be payable
or imposed with respect to shares of the Fund purchased by retirement plans
qualified under Section 401, 403(b) or 457 of the Code ("Eligible Plans"). In
order to purchase shares without a sales charge, the plan sponsor of an Eligible
Plan must notify the Transfer Agent of the Fund of its status as an Eligible
Plan. Participant accounting services (including trust fund reconciliation
services) will be offered only through third party recordkeepers and not by the
Principal Underwriter. The Principal Underwriter may pay commissions to
Authorized Firms who initiate and are responsible for purchases of shares of the
Fund by Eligible Plans of up to 1.00% of the amount invested in such shares.
ACQUIRING FUND SHARES IN EXCHANGE FOR SECURITIES. IBT, as escrow agent, will
receive securities acceptable to Eaton Vance, as Manager, in exchange for Fund
shares at the applicable public offering price as determined above. The minimum
value of securities (or securities and cash) accepted for deposit is $5,000.
Securities accepted will be sold on the day of their receipt or as soon
thereafter as possible. The number of Fund shares to be issued in exchange for
securities will be the aggregate proceeds from the sale of such securities,
divided by the applicable public offering price per Fund share on the day such
proceeds are received. Eaton Vance will use reasonable efforts to obtain the
then current market price for such securities, but does not guarantee the best
price available. Eaton Vance will absorb any transaction costs, such as
commissions, on the sale of the securities.
Securities determined to be acceptable should be transferred via book entry or
physically delivered, in proper form for transfer, through an Authorized Firm,
together with a completed and signed Letter of Transmittal in approved form
(available from Authorized Firms), as follows:
IN THE CASE OF BOOK ENTRY:
Deliver through Depository Trust Co.
Broker #2212
Investors Bank & Trust Company
For A/C EV Traditional Worldwide Health Sciences Fund, Inc.
IN THE CASE OF PHYSICAL DELIVERY:
Investors Bank & Trust Company
Attention: EV Traditional Worldwide Health Sciences Fund, Inc.
Physical Securities Processing Settlement Area
89 South Street
Boston, MA 02111
Investors who are contemplating an exchange of securities for shares of the
Fund, or their representatives, must contact Eaton Vance to determine whether
the securities are acceptable before forwarding such securities. Eaton Vance
reserves the right to reject any securities. Exchanging securities for Fund
shares may create a taxable gain or loss. Each investor should consult his or
her tax adviser with respect to the particular federal, state and local tax
consequences of exchanging securities for Fund shares.
STATEMENT OF INTENTION AND ESCROW AGREEMENT. If the investor, on an application,
makes a Statement of Intention to invest a specified amount over a
thirteen-month period, then out of the initial purchase (or subsequent purchases
if necessary) 5% of the dollar amount specified on the application shall be held
in escrow by the escrow agent in the form of shares (computed to the nearest
full share at the public offering price applicable to the initial purchase
hereunder) registered in the investor's name. All income dividends and capital
gains distributions on escrowed shares will be paid to the investor or to the
investor's order. When the minimum investment so specified is completed, the
escrowed shares will be delivered to the investor. If the investor has an
accumulation account the shares will remain on deposit under the investor's
account.
If total purchases under this Statement of Intention are less than the amount
specified, the investor will promptly remit to the Principal Underwriter any
difference between the sales charge on the amount specified and on the amount
actually purchased. If the investor does not within 20 days after written
request by the Principal Underwriter or the Authorized Firm pay such difference
in sales charge, the escrow agent will redeem an appropriate number of the
escrowed shares in order to realize such difference. Full shares remaining after
any such redemption together with any excess cash proceeds of the shares so
redeemed will be delivered to the investor or to the investor's order by the
escrow agent.
If total purchases made under this Statement are large enough to qualify for a
lower sales charge than that applicable to the amount specified, all
transactions will be computed at the expiration date of this Statement to give
effect to the lower charge. Any difference in sales charge will be refunded to
the investor in cash, or applied to the purchase of additional shares at the
lower charge if specified by the investor. This refund will be made by the
Authorized Firm and by the Principal Underwriter. If at the time of the
recomputation a firm other than the original firm is placing the orders, the
adjustment will be made only on those shares purchased through the firm then
handling the investor's account.
IF YOU DON'T HAVE AN AUTHORIZED FIRM, EATON VANCE CAN RECOMMEND ONE.
HOW TO REDEEM FUND SHARES
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A SHAREHOLDER MAY REDEEM FUND SHARES IN ONE OF THREE WAYS -- BY MAIL, BY
TELEPHONE OR THROUGH AN AUTHORIZED FIRM. The redemption price will be based on
the net asset value per Fund share next computed after a redemption request is
received in the proper form as described below.
REDEMPTION BY MAIL: Shares may be redeemed by delivering to First Data Investor
Services Group, P.O. Box 5123, Westborough, MA 01581-5123, during its business
hours a written request for redemption in good order, plus any share
certificates with executed stock powers. Good order means that all relevant
documents must be endorsed by the record owner(s) exactly as the shares are
registered and the signature(s) must be guaranteed by a member of either the
Securities Transfer Association's STAMP program or the New York Stock Exchange's
Medallion Signature Program, or certain banks, savings and loan institutions,
credit unions, securities dealers, securities exchanges, clearing agencies and
registered securities associations as required by a regulation of the Securities
and Exchange Commission and acceptable to First Data Investor Services Group. In
addition, in some cases, good order may require the furnishing of additional
documents such as where shares are registered in the name of a corporation,
partnership or fiduciary.
REDEMPTION BY TELEPHONE: Shares may be redeemed by telephone provided the
investor has not disclaimed in writing the use of the privilege. Such
redemptions can be effected by calling the Transfer Agent at 800-262-1122,
Monday through Friday, 9:00 a.m. to 4:00 p.m.(Eastern Standard Time). The
proceeds of a telephone redemption may be no greater than the maximum amount
established by the Principal Underwriter (currently $50,000) and may be mailed
only to the account address of record. Shares held by corporations, trusts or
certain other entities, or subject to fiduciary arrangements, may not be
redeemed by telephone. Neither the Fund, the Principal Underwriter nor the
Transfer Agent will be responsible for the authenticity of redemption
instructions received by telephone, provided that reasonable procedures to
confirm that instructions communicated by telephone are genuine have been
followed. If such procedures are not followed, the Fund, the Principal
Underwriter or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent telephone instructions. Telephone instructions will
be tape recorded. In times of drastic economic or market changes, a telephone
redemption may be difficult to implement.
REDEMPTION THROUGH AN AUTHORIZED FIRM: To sell shares at their net asset value
through an Authorized Firm (a repurchase), a shareholder can place a repurchase
order with the Authorized Firm, which may charge a fee. The value of such shares
is based upon the net asset value calculated after EVD, as the Fund's agent,
receives the order. It is the Authorized Firm's responsibility to transmit
promptly repurchase orders to EVD. Throughout this Prospectus, the word
"redemption" is generally meant to include a repurchase.
Within seven days after receipt of a redemption request in good order by First
Data Investor Services Group, the Fund will make payment in cash for the net
asset value of the shares as of the date determined above and reduced by the
amount of any federal income tax required to be withheld. Although the Fund
normally expects to make payment in cash for redeemed shares, the Fund, subject
to compliance with applicable regulations, has reserved the right to pay the
redemption price of shares of the Fund, either totally or partially, by a
distribution in kind of readily marketable securities withdrawn by the Fund from
the Portfolio. The securities so distributed would be valued pursuant to the
Portfolio's valuation procedures. If a shareholder received a distribution in
kind, the shareholder could incur brokerage or other charges in converting the
securities to cash.
If shares were recently purchased, the proceeds of a redemption (or repurchase)
will not be sent until the check (including a certified or cashier's check)
received for the shares purchased has cleared. Payment for shares tendered for
redemption may be delayed up to 15 days from the purchase date when the purchase
check has not yet cleared. Redemptions or repurchases may result in a taxable
gain or loss.
Due to the high cost of maintaining small accounts, the Fund reserves the right
to redeem accounts with balances of less than $750. Prior to such a redemption,
shareholders will be given 60 days' written notice to make an additional
purchase. However, no such redemption would be required by the Fund if the cause
of the low account balance was a reduction in the net asset value of Fund
shares. In addition, no account of less than $750 will be redeemed if the
account size was below such amount on August 30, 1996 and no partial redemption
since then has occurred.
If shares have been purchased at net asset value with no initial sale charge by
virtue of the purchase having been in the amount of $1 million or more and are
redeemed within 12 months of purchase, a CDSC of 0.50% will be imposed on such
redemption. The CDSC will be retained by the Principal Underwriter. The CDSC
will be imposed on an amount equal to the lesser of the current market value or
the original purchase price of the shares redeemed. Accordingly, no CDSC will be
imposed on increases in account value above the initial purchase price,
including any distributions that have been reinvested in additional shares. In
determining whether a CDSC is applicable to a redemption, the calculation will
be made in a manner that results in the lowest possible rate being charged. It
will be assumed that redemptions are made first from any shares in the
shareholder's account that are not subject to a CDSC.
The CDSC is waived for redemptions involving certain liquidation, merger or
acquisition transactions involving other investment companies. If a shareholder
reinvests redemption proceeds within a 60-day period and in accordance with the
conditions set forth under "Eaton Vance Shareholder Services -- Reinvestment
Privilege," the shareholder's account will be credited with the amount of any
CDSC paid on such redeemed shares.
REPORTS TO SHAREHOLDERS
- ------------------------------------------------------------------------------
THE FUND WILL ISSUE TO ITS SHAREHOLDERS SEMI-ANNUAL AND ANNUAL REPORTS
CONTAINING FINANCIAL STATEMENTS. Financial statements included in annual reports
are audited by the Fund's independent certified public accountants. Shortly
after the end of each calendar year, the Fund will furnish all shareholders with
information necessary for preparing federal and state tax returns. Consistent
with applicable law, duplicate mailings of shareholder reports and certain other
Fund information to shareholders residing at the same address may be eliminated.
THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS
- ------------------------------------------------------------------------------
AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF FUND SHARES, THE FUND'S TRANSFER
AGENT, FIRST DATA INVESTOR SERVICES GROUP, WILL SET UP A LIFETIME INVESTING
ACCOUNT FOR THE INVESTOR ON THE FUND'S RECORDS. This account is a complete
record of all transactions between the investor and the Fund which at all times
shows the balance of shares owned. The Fund will not issue share certificates
except upon request.
Each time a transaction takes place in a shareholder's account, the shareholder
will receive a statement showing complete details of the transaction and the
current balance in the account. (Under certain investment plans, statements may
be sent only quarterly.) THE LIFETIME INVESTING ACCOUNT PERMITS A SHAREHOLDER TO
MAKE ADDITIONAL INVESTMENTS IN SHARES BY SENDING A CHECK FOR $50 OR MORE to
First Data Investor Services Group.
Any questions concerning a shareholder's account or services available may be
directed by telephone to EATON VANCE SHAREHOLDER SERVICES at 800-225-6265,
extension 2, or in writing to First Data Investor Services Group, P.O. Box 5123,
Westborough, MA 01581-5123, (please provide the name of the shareholder, the
Fund and the account number).
THE FOLLOWING DISTRIBUTION OPTIONS WILL BE AVAILABLE TO ALL LIFETIME INVESTING
ACCOUNTS and may be changed as often as desired by written notice to the Fund's
dividend disbursing agent, First Data Investor Services Group, P.O. Box 5123,
Westborough, MA 01581-5123. The currently effective option will appear on each
account statement.
Share Option -- Dividends and capital gains will be reinvested in additional
shares.
Income Option -- Dividends will be paid in cash, and capital gains will be
reinvested in additional shares.
Cash Option -- Dividends and capital gains will be paid in cash.
The Share Option will be assigned if no other option is specified.
Distributions, including those reinvested, will be reduced by any withholding
required under federal income tax laws.
If the Income Option or Cash Option has been selected, dividend and/or capital
gains distribution checks which are returned by the United States Postal Service
as not deliverable or which remain uncashed for six months or more will be
reinvested in the account in shares at the then current net asset value.
Furthermore, the distribution option on the account will be automatically
changed to the Share Option until such time as the shareholder selects a
different option.
DISTRIBUTION INVESTMENT OPTION. In addition to the distribution options set
forth above, dividends and/or capital gains may be invested in additional shares
of another Eaton Vance fund. Before selecting this option, a shareholder should
obtain a prospectus of the other Eaton Vance fund and consider its objectives
and policies carefully.
"STREET NAME" ACCOUNTS. If shares of the Fund are held in a "street name"
account with an Authorized Firm, all recordkeeping, transaction processing and
payments of distributions relating to the beneficial owner's account will be
performed by the Authorized Firm, and not by the Fund and its Transfer Agent.
Since the Fund will have no record of the beneficial owner's transactions, a
beneficial owner should contact the Authorized Firm to purchase, redeem or
exchange shares, to make changes in or give instructions concerning the account,
or to obtain information about the account. The transfer of shares in a "street
name" account to an account with another dealer or to an account directly with
the Fund involves special procedures and will require the beneficial owner to
obtain historical purchase information about the shares in the account from the
Authorized Firm. Before establishing a "street name" account with an investment
firm, or transferring the account to another investment firm, an investor
wishing to reinvest distributions should determine whether the firm which will
hold the shares allows reinvestment of distributions in "street name" accounts.
THE EATON VANCE EXCHANGE PRIVILEGE
- ------------------------------------------------------------------------------
Shares of the Fund currently may be exchanged for shares of any of the following
funds: Eaton Vance Cash Management Fund, Eaton Vance Income Fund of Boston,
Eaton Vance Municipal Bond Fund L.P., Eaton Vance Tax Free Reserves and any fund
in the Eaton Vance Traditional Group of Funds, on the basis of the net asset
value per share of each fund at the time of the exchange (plus, in the case of
an exchange made within six months of the date of purchase of shares subject to
an initial sales charge, an amount equal to the difference, if any, between the
sales charge previously paid on the shares being exchanged and the sales charge
payable on the shares being acquired). Such exchange offers are available only
in states where shares of the fund being acquired may be legally sold.
Each exchange must involve shares which have a net asset value of at least
$1,000. The exchange privilege may be changed or discontinued without penalty.
Shareholders will be given sixty (60) days' notice prior to any termination or
material amendment of the exchange privilege. The Fund does not permit the
exchange privilege to be used for "Market Timing" and may terminate the exchange
privilege for any shareholder account engaged in Market Timing activity. Any
shareholder account for which more than two round-trip exchanges are made within
any twelve month period will be deemed to be engaged in Market Timing.
Furthermore, a group of unrelated accounts for which exchanges are entered
contemporaneously by a financial intermediary will be considered to be engaged
in Market Timing.
Shares of the Fund which are subject to a CDSC may be exchanged into any of the
above funds without incurring the CDSC. The shares acquired in an exchange may
be subject to a CDSC upon redemption. For purposes of computing the CDSC payable
upon the redemption of shares acquired in an exchange, the holding period of the
original shares is added to the holding period of the shares acquired in the
exchange.
First Data Investor Services Group makes exchanges at the next determined net
asset value after receiving an exchange request in good order (see "How to
Redeem Fund Shares"). Consult First Data Investor Services Group for additional
information concerning the exchange privilege. Applications and prospectuses of
other funds are available from Authorized Firms or the Principal Underwriter.
The prospectus for each fund describes its investment objectives and policies,
and shareholders should obtain a prospectus and consider these objectives and
policies carefully before requesting an exchange.
Shares of certain other funds for which Eaton Vance acts as investment adviser
or administrator may be exchanged for Fund shares on the basis of the net asset
value per share of each fund at the time of the exchange (plus, in the case of
an exchange made within six months of the date of purchase, an amount equal to
the difference, if any, between the sales charge previously paid on the shares
being exchanged and the sales charge payable on the Fund shares being acquired).
Any such exchange is subject to any restrictions or qualifications set forth in
the current prospectus of any such fund.
Telephone exchanges are accepted by First Data Investor Services Group provided
that the investor has not disclaimed in writing the use of the privilege. To
effect such exchanges, call First Data Investor Services Group at 800-262-1122,
Monday through Friday, 9:00 a.m. to 4:00 p.m. (Eastern Standard Time). Shares
acquired by telephone exchange must be registered in the same name(s) and with
the same address as the shares being exchanged. Neither the Fund, the Principal
Underwriter nor First Data Investor Services Group will be responsible for the
authenticity of exchange instructions received by telephone, provided that
reasonable procedures to confirm that instructions communicated are genuine have
been followed. If such procedures are not followed, the Fund, the Principal
Underwriter or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent telephone instructions. Telephone instructions will
be tape recorded. In times of drastic economic or market changes, a telephone
exchange may be difficult to implement. An exchange may result in a taxable gain
or loss.
EATON VANCE SHAREHOLDER SERVICES
- ------------------------------------------------------------------------------
THE FUND OFFERS THE FOLLOWING SERVICES, WHICH ARE VOLUNTARY, INVOLVE NO EXTRA
CHARGE, AND MAY BE CHANGED OR DISCONTINUED WITHOUT PENALTY AT ANY TIME. Full
information on each of the services described below and an application, where
required, are available from Authorized Firms or the Principal Underwriter. The
cost of administering such services for the benefit of shareholders who
participate in them is borne by the Fund as an expense to all shareholders.
INVEST-BY-MAIL -- FOR PERIODIC SHARE ACCUMULATION: Once the $1,000 minimum
investment has been made, checks of $50 or more payable to the order of EV
Traditional Worldwide Health Sciences Fund, Inc. may be mailed directly to First
Data Investor Services Group, P.O. Box 5123, Westborough, MA 01581-5123 at any
time -- whether or not distributions are reinvested. The name of the
shareholder, the Fund and the account number should accompany each investment.
BANK AUTOMATED INVESTING -- FOR REGULAR SHARE ACCUMULATION: Cash investments of
$50 or more may be made automatically each month or quarter from the
shareholder's bank account. The $1,000 minimum initial investment and small
account redemption policy are waived for these accounts.
STATEMENT OF INTENTION: Purchases of $100,000 or more made over a 13-month
period are eligible for reduced sales charges. See "How to Buy Fund Shares --
Statement of Intention and Escrow Agreement."
RIGHT OF ACCUMULATION: Purchases may qualify for reduced sales charges when the
current market value of holdings (shares at current offering price) plus new
purchases reaches $100,000 or more. Shares of the Eaton Vance funds listed under
"The Eaton Vance Exchange Privilege" may be combined under the Statement of
Intention and Right of Accumulation.
WITHDRAWAL PLAN: A shareholder may draw on shareholdings systematically with
monthly or quarterly checks in an amount specified by the shareholder. A minimum
deposit of $5,000 in shares is required. The maintenance of a withdrawal plan
concurrently with purchases of additional shares would be disadvantageous
because of the sales charge included in such purchases.
REINVESTMENT PRIVILEGE: A shareholder who has repurchased or redeemed shares may
reinvest any portion or all of the repurchase or redemption proceeds (plus that
amount necessary to acquire a fractional share to round off the purchase to the
nearest full share) in shares of the Fund, or, provided that the shares
repurchased or redeemed have been held for at least 60 days, in shares of any of
the other funds offered by the Principal Underwriter subject to an initial sales
charge, provided that the reinvestment is effected within 60 days after such
repurchase or redemption, and the privilege has not been used more than once in
the prior 12 months. Shares are sold to a reinvesting shareholder at the net
asset value next determined following timely receipt of a written purchase order
by the Principal Underwriter or by the fund the shares of which are to be
purchased (or by such fund's transfer agent). The privilege is also available to
shareholders of the Funds listed under "The Eaton Vance Exchange Privilege" who
wish to reinvest such redemption or repurchase proceeds in shares of the Fund.
If a shareholder reinvests redemption proceeds within the 60-day period, the
shareholder's account will be credited with the amount of any CDSC paid on such
redeemed shares. To the extent that any shares of the Fund are sold at a loss
and the proceeds are reinvested in shares of the Fund (or other shares of the
Fund are acquired within the period beginning 30 days before and ending 30 days
after the date of the redemption), some or all of the loss generally will not be
allowed as a tax deduction. Shareholders should consult their tax advisers
concerning the tax consequences of reinvestments.
TAX-SHELTERED RETIREMENT PLANS: Shares of the Fund are available for purchase
in connection with the following tax-sheltered retirement plans:
- --Pension and Profit Sharing Plans for self-employed individuals, corporations
and nonprofit organizations;
- --Individual Retirement Account Plans for individuals and their non-employed
spouses; and
- --403(b) Retirement Plans for employees of public school systems, hospitals,
colleges and other nonprofit organizations meeting certain requirements of the
Code.
Detailed information concerning these plans, including certain exceptions to
minimum investment requirements, and copies of the plans are available from the
Principal Underwriter. This information should be read carefully and
consultation with an attorney or tax adviser may be advisable. The information
sets forth the service fee charged for retirement plans and describes the
federal income tax consequences of establishing a plan. Under all plans,
dividends and distributions will be automatically reinvested in additional
shares.
DISTRIBUTIONS AND TAXES
- ------------------------------------------------------------------------------
DISTRIBUTIONS. The Fund's present policy is to make (A) at least one
distribution annually (normally in December) of all or substantially all of the
investment income allocated to the Fund by the Portfolio (less the Fund's direct
and allocated expenses), and (B) at least one distribution annually of all or
substantially all of the net realized capital gains (if any) allocated to the
Fund by the Portfolio (reduced by any available capital loss carryforwards from
prior years). Shareholders may reinvest all distributions in shares of the Fund
without a sales charge at the net asset value per share as of the close of
business on the record date.
The Fund's net investment income consists of the Fund's allocated share of the
net investment income of the Portfolio, less all actual and accrued expenses of
the Fund determined in accordance with generally accepted accounting principles.
The Portfolio's net investment income consists of all income accrued on the
Portfolio's assets, less all actual and accrued expenses of the Portfolio
determined in accordance with generally accepted accounting principles. The
Fund's net realized capital gains, if any, consist of the net realized capital
gains (if any) allocated to the Fund by the Portfolio for tax purposes, after
taking into account any available capital loss carryovers.
TAXES. Distributions by the Fund which are derived from the Fund's allocated
share of the Portfolio's net investment income, net short-term capital gains and
certain foreign exchange gains are taxable to shareholders as ordinary income,
whether received in cash or reinvested in additional shares of the Fund. The
Fund's distributions will generally not qualify for the dividends-received
deduction for corporate shareholders.
Capital gains referred to in clause (B) above, if any, realized by the Portfolio
and allocated to the Fund for the Fund's fiscal year, which ends on August 31,
will usually be distributed by the Fund prior to the end of December.
Distributions by the Fund of long-term capital gains allocated to the Fund by
the Portfolio are taxable to shareholders as long-term capital gains, whether
paid in cash or reinvested in additional shares of the Fund and regardless of
the length of time Fund shares have been owned by the shareholder.
If shares are purchased shortly before the record date of a distribution, the
shareholder will pay the full price for the shares and then receive some portion
of the price back as a taxable distribution. The amount, timing and character of
the Fund's distributions to shareholders may be affected by special tax rules
governing the Portfolio's activities in options, futures and forward foreign
currency exchange transactions or certain other investments.
Certain distributions, if declared by the Fund in October, November or December
and paid the following January, will be taxable to shareholders as if received
on December 31 of the year in which they are declared.
Sales charges paid upon a purchase of shares of the Fund cannot be taken into
account for purposes of determining gain or loss on a redemption or exchange of
the shares before the 91st day after their purchase to the extent shares of the
Fund or of another fund are subsequently acquired pursuant to the Fund's
reinvestment or exchange privilege. Any disregarded amounts will result in an
adjustment to the shareholder's tax basis in some or all of any other shares
acquired.
The Fund intends to qualify as a regulated investment company under the Code and
to satisfy all requirements necessary to be relieved of federal taxes on income
and gains it distributes to shareholders. In satisfying these requirements, the
Fund will treat itself as owning its proportionate share of each of the
Portfolio's assets and as entitled to the income of the Portfolio properly
attributable to such share.
Shareholders should consult with their tax adviser concerning the applicability
of state, local or other taxes to an investment in the Fund.
As a regulated investment company under the Code, the Fund does not pay federal
income or excise taxes to the extent that it distributes to shareholders its net
investment income and net realized capital gains in accordance with the timing
requirements imposed by the Code. As a partnership under the Code, the Portfolio
does not pay federal income or excise taxes.
Income realized by the Portfolio from certain investments and allocated to the
Fund may be subject to foreign income taxes, and the Fund may make an election
under Section 853 of the Code that would allow shareholders to claim a credit or
deduction on their federal income tax returns for (and treat as additional
amounts distributed to them) their pro rata portion of the Fund's allocated
share of qualified taxes paid by the Portfolio to foreign countries. This
election may be made only if more than 50% of the assets of the Fund, including
its allocable share of the Portfolio's assets, at the close of a taxable year
consists of securities in foreign corporations. The Fund will send a written
notice of any such election (not later than 60 days after the close of its
taxable year) to each shareholder indicating the amount to be treated as the
proportionate share of such taxes. The availability of foreign tax credits or
deductions for shareholders is subject to certain additional restrictions and
limitations.
The Fund will provide its shareholders annually with tax information notices and
Forms 1099 to assist in the preparation of their federal and state tax returns
for the prior calendar year's distributions, proceeds from the redemption or
exchange of Fund shares, and federal income tax (if any) withheld by the Fund's
Transfer Agent.
PERFORMANCE INFORMATION
- ------------------------------------------------------------------------------
FROM TIME TO TIME, THE FUND MAY ADVERTISE ITS AVERAGE ANNUAL TOTAL RETURN. The
Fund's average annual total return is determined by multiplying a hypothetical
initial purchase order of $1,000 by the average annual compounded rate of return
(including capital appreciation/depreciation, and distributions paid and
reinvested) for the stated period and annualizing the result. The average annual
total return calculation assumes the maximum sales charge is deducted from the
initial $1,000 purchase order and that all distributions are reinvested at net
asset value on the reinvestment dates during the period. The Fund may also
publish annual and cumulative total return figures from time to time. The Fund
may use total return figures, together with comparisons with the Consumer Price
Index, various domestic and foreign securities indices and performance studies
prepared by independent organizations, in advertisements and in information
furnished to present or prospective shareholders.
The Fund may also furnish total return calculations based on investments at
various sales charge levels or at net asset value. Any performance data which is
based on the Fund's net asset value per share would be lower if a sales charge
were taken into account. The Fund's performance may be compared in publications
to the performance of various indices and investments for which reliable data is
available, and to averages, performance rankings, or other information prepared
by recognized mutual fund statistical services.
Investors should note that the investment results of the Fund will fluctuate
over time, and any presentation of the Fund's total return for any prior period
should not be considered a representation of what an investment may earn or what
the Fund's total return may be in any future period. The Fund's investment
results are based on many factors, including market conditions, the composition
of the security holdings of the Portfolio and the operating expenses of the Fund
and the Portfolio. Investment results also often reflect the risks associated
with the particular investment objective and policies of the Fund and the
Portfolio. Among others, these factors should be considered when comparing the
Fund's investment results to those of other mutual funds and other investment
vehicles.
<PAGE>
EV TRADITIONAL [logo]
WORLDWIDE HEALTH
SCIENCES FUND, INC.
PROSPECTUS
SEPTEMBER 3, 1996
EV TRADITIONAL WORLDWIDE
HEALTH SCIENCES FUND, INC.
24 FEDERAL STREET
BOSTON, MA 02110
SPONSOR AND MANAGER OF EV TRADITIONAL WORLDWIDE HEALTH SCIENCES FUND, INC.
ADMINISTRATOR OF WORLDWIDE HEALTH SCIENCES PORTFOLIO
Eaton Vance Management, 24 Federal Street, Boston, MA 02110
ADVISER OF WORLDWIDE HEALTH SCIENCES PORTFOLIO
G/A Capital Management, Inc., 41 Madison Avenue, 40th Floor
New York, NY 10010-2202
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc., 24 Federal Street, Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company, 89 South Street, Boston, MA 02111
TRANSFER AGENT
First Data Investor Services Group, P.O. Box 5123, Westborough, MA 01581-5123
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand, L.L.P., One Post Office Square, Boston, MA 02109
T- P
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
STATEMENT OF
ADDITIONAL INFORMATION
September 3, 1996
EV TRADITIONAL
WORLDWIDE HEALTH SCIENCES FUND, INC.
24 Federal Street
Boston, Massachusetts 02110
(800) 225-6265
TABLE OF CONTENTS
Page
PART I
Additional Information About Investment Policies ................ 1
Investment Restrictions ......................................... 5
Management of the Fund and the Portfolio ........................ 7
Custodian ....................................................... 9
Service for Withdrawal .......................................... 9
Determination of Net Asset Value ................................ 10
Investment Performance .......................................... 10
Taxes ........................................................... 12
Portfolio Security Transactions ................................. 13
PART II
Fees and Expenses ............................................... a-1
Board Members and Officers ...................................... a-2
Services for Accumulation ....................................... a-3
Principal Underwriter ........................................... a-4
Distribution Plan ............................................... a-5
Performance Information ......................................... a-5
Control Persons and Principal Holders of Securities ............. a-5
Other Information ............................................... a-6
Independent Accountants ......................................... a-6
Financial Statements ............................................ a-6
Report of Independent Accountants ............................... a-8
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY THE FUND'S PROSPECTUS DATED SEPTEMBER 3, 1996, AS SUPPLEMENTED
FROM TIME TO TIME, WHICH IS INCORPORATED HEREIN BY REFERENCE. THIS STATEMENT OF
ADDITIONAL INFORMATION SHOULD BE READ IN CONJUNCTION WITH SUCH PROSPECTUS, A
COPY OF WHICH MAY BE OBTAINED WITHOUT CHARGE BY CONTACTING EATON VANCE
DISTRIBUTORS, INC. (THE "PRINCIPAL UNDERWRITER") (SEE BACK COVER FOR ADDRESS AND
PHONE NUMBER). THIS STATEMENT OF ADDITIONAL INFORMATION IS SOMETIMES REFERRED TO
HEREIN AS THE "SAI." CAPITALIZED TERMS USED IN THIS SAI AND NOT OTHERWISE
DEFINED HAVE THE MEANINGS GIVEN THEM IN THE FUND'S PROSPECTUS.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART I
ADDITIONAL INFORMATION ABOUT INVESTMENT POLICIES
The Fund is subject to the same investment policies as those of the
Portfolio. The Fund currently seeks to achieve its objective by investing in the
Portfolio.
Foreign Investments. Under normal market conditions, the Portfolio will invest
in securities of issuers located in at least three different countries.
Investing in securities issued by companies whose principal business activities
are outside the United States may involve significant risks not present in
domestic investments. For example, there is generally less publicly available
information about foreign companies, particularly those not subject to the
disclosure and reporting requirements of the U.S. securities laws. Foreign
issuers are generally not bound by uniform accounting, auditing, and financial
reporting requirements and standards of practice comparable to those applicable
to domestic issuers. Investments in foreign securities also involve the risk of
possible adverse changes in investment or exchange control regulations,
expropriation or confiscatory taxation, limitation on the removal of funds or
other assets of the Portfolio, political or financial instability or diplomatic
and other developments which could affect such investments. Further, economies
of particular countries or areas of the world may differ favorably or
unfavorably from the economy of the United States. It is anticipated that in
most cases the best available market for foreign securities will be on exchanges
or in over-the-counter markets located outside of the United States. Foreign
stock markets, while growing in volume and sophistication, are generally not as
developed as those in the United States, and securities of some foreign issuers
(particularly those located in developing countries) may be less liquid and more
volatile than securities of comparable U.S. companies. In addition, foreign
brokerage commissions are generally higher than commissions on securities traded
in the United States and may be non-negotiable. In general, there is less
overall governmental supervision and regulation of foreign securities markets,
broker-dealers, and issuers than in the United States.
Foreign Currency Transactions. Because investments in companies whose principal
business activities are located outside of the United States will frequently
involve currencies of foreign countries, and because assets of the Portfolio may
temporarily be held in bank deposits in foreign currencies during the completion
of investment programs, the value of the assets of the Portfolio as measured in
U.S. dollars may be affected favorably or unfavorably by changes in foreign
currency exchange rates and exchange control regulations. Currency exchange
rates can also be affected unpredictably by intervention by U.S. or foreign
governments or central banks, or the failure to intervene, or by currency
controls or political developments in the U.S. or abroad. The Portfolio may
conduct its foreign currency exchange transactions on a spot (i.e., cash) basis
at the spot rate prevailing in the foreign currency exchange market or through
entering into swaps, forward contracts, options or futures on currency. On spot
transactions, foreign exchange dealers do not charge a fee for conversion, but
they do realize a profit based on the difference (the "spread") between the
prices at which they are buying and selling various currencies. Thus, a dealer
may offer to sell a foreign currency to the Portfolio at one rate, while
offering a lesser rate of exchange should the Portfolio desire to resell that
currency to the dealer.
Emerging Companies. The investment risk associated with emerging companies is
higher than that normally associated with larger, older companies due to the
greater business risks associated with small size, the relative age of the
company, limited product lines, distribution channels and financial and
managerial resources. Further, there is typically less publicly available
information concerning smaller companies than for larger, more established ones.
The securities of small companies are often traded only over-the-counter and may
not be traded in the volumes typical of trading on a national securities
exchange. As a result, in order to sell this type of holding, the Portfolio may
need to discount the securities from recent prices or dispose of the securities
over a long period of time. The prices of this type of security may be more
volatile than those of larger companies which are often traded on a national
securities exchange.
Currency Swaps. Currency swaps require maintenance of a segregated account
described under "Asset Coverage for Derivative Investments" below. The Portfolio
will not enter into any currency swap unless the credit quality of the unsecured
senior debt or the claims-paying ability of the other party thereto is
considered to be investment grade by the Adviser. If there is a default by the
other party to such a transaction, the Portfolio will have contractual remedies
pursuant to the agreements related to the transaction. The swap market has grown
substantially in recent years with a large number of banks and investment
banking firms acting both as principals and as agents utilizing standardized
swap documentation. As a result, the swap market has become relatively liquid in
comparison with the markets for other similar instruments which are traded in
the interbank market.
Forward Foreign Currency Exchange Transactions. The Portfolio may enter into
forward foreign currency exchange contracts in several circumstances. First,
when the Portfolio enters into a contract for the purchase or sale of a security
denominated in a foreign currency, or when the Portfolio anticipates the receipt
in a foreign currency of dividend or interest payments on such a security which
it holds, the Portfolio may desire to "lock in" the U.S. dollar price of the
security or the U.S. dollar equivalent of such dividend or interest payment, as
the case may be. By entering into a forward contract for the purchase or sale,
for a fixed amount of dollars, of the amount of foreign currency involved in the
underlying transactions, the Portfolio will attempt to protect itself against an
adverse change in the relationship between the U.S. dollar and the subject
foreign currency during the period between the date on which the security is
purchased or sold, or on which the dividend or interest payment is declared, and
the date on which such payments are made or received.
Additionally, when management of the Portfolio believes that the currency of
a particular foreign country may suffer a substantial decline against the U.S.
dollar, it may enter into a forward contract to sell, for a fixed amount of
dollars, the amount of foreign currency approximating the value of some or all
of the securities held by the Portfolio denominated in such foreign currency.
The precise matching of the forward contract amounts and the value of the
securities involved will not generally be possible because the future value of
such securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date on which the
contract is entered into and the date it matures. The precise projection of
short-term currency market movements is not possible, and short-term hedging
provides a means of fixing the dollar value of only a portion of the Portfolio's
foreign assets.
Special Risks Associated With Currency Transactions. Transactions in forward
contracts, as well as futures and options on foreign currencies, are subject to
the risk of governmental actions affecting trading in or the prices of
currencies underlying such contracts, which could restrict or eliminate trading
and could have a substantial adverse effect on the value of positions held by
the Portfolio. In addition, the value of such positions could be adversely
affected by a number of other complex political and economic factors applicable
to the countries issuing the underlying currencies.
Furthermore, unlike trading in most other types of instruments, there is no
systematic reporting of last sale information with respect to the foreign
currencies underlying forward contracts, futures contracts and options. As a
result, the available information on which the Portfolio's trading systems will
be based may not be as complete as the comparable data on which the Portfolio
makes investment and trading decisions in connection with securities and other
transactions. Moreover, because the foreign currency market is a global,
twenty-four hour market, events could occur on that market which will not be
reflected in the forward, futures or options markets until the following day,
thereby preventing the Portfolio from responding to such events in a timely
manner.
Settlements of over-the-counter forward contracts or of the exercise of
foreign currency options generally must occur within the country issuing the
underlying currency, which in turn requires parties to such contracts to accept
or make delivery of such currencies in conformity with any United States or
foreign restrictions and regulations regarding the maintenance of foreign
banking relationships, fees, taxes or other charges.
Unlike currency futures contracts and exchange-traded options, options on
foreign currencies and forward contracts are not traded on contract markets
regulated by the CFTC or (with the exception of certain foreign currency
options) the Securities and Exchange Commission (the "Commission"). To the
contrary, such instruments are traded through financial institutions acting as
market-makers. (Foreign currency options are also traded on the Philadelphia
Stock Exchange subject to Commission regulation). In an over-the-counter trading
environment, many of the protections associated with transactions on exchanges
will not be available. For example, there are no daily price fluctuation limits,
and adverse market movements could therefore continue to an unlimited extent
over a period of time. Although the purchaser of an option cannot lose more than
the amount of the premium plus related transaction costs, this entire amount
could be lost. Moreover, an option writer could lose amounts substantially in
excess of its initial investment due to the margin and collateral requirements
associated with such option positions. Similarly, there is no limit on the
amount of potential losses on forward contracts to which the Portfolio is a
party.
In addition, over-the-counter transactions can only be entered into with a
financial institution willing to take the opposite side, as principal, of the
Portfolio's position unless the institution acts as broker and is able to find
another counterparty willing to enter into the transaction with the Portfolio.
Where no such counterparty is available, it will not be possible to enter into a
desired transaction. There also may be no liquid secondary market in the trading
of over-the-counter contacts, and the Portfolio may be unable to close out
options purchased or written, or forward contracts entered into, until their
exercise, expiration or maturity. This in turn could limit the Portfolio's
ability to realize profits or to reduce losses on open positions and could
result in greater losses.
Furthermore, over-the-counter transactions are not backed by the guarantee
of an exchange's clearing corporation. The Portfolio will therefore be subject
to the risk of default by, or the bankruptcy of, the financial institution
serving as its counterparty. One or more of such institutions also may decide to
discontinue its role as market-maker in a particular currency, thereby
restricting the Portfolio's ability to enter into desired hedging transactions.
The Portfolio will enter into over-the-counter transactions only with parties
whose creditworthiness has been reviewed and found satisfactory by the Adviser.
The purchase and sale of exchange-traded foreign currency options, however,
are subject to the risks of the availability of a liquid secondary market
described above, as well as the risks regarding adverse market movements,
margining of options written, the nature of the foreign currency market,
possible intervention by governmental authorities and the effect of other
political and economic events. In addition, exchange-traded options on foreign
currencies involve certain risks not presented by the over-the-counter market.
For example, exercise and settlement of such options must be made exclusively
through the Options Clearing Corporation ("OCC"), which has established banking
relationships in applicable foreign countries for this purpose. As a result, the
OCC may, if it determines that foreign governmental restrictions or taxes would
prevent the orderly settlement of foreign currency option exercises, or would
result in undue burdens on the OCC or its clearing member, impose special
procedures for exercise and settlement, such as technical changes in the
mechanics of delivery of currency, the fixing of dollar settlement prices or
prohibitions on exercise.
Risks Associated With Derivative Instruments. Entering into a derivative
instrument involves a risk that the applicable market will move against the
Portfolio's position and that the Portfolio will incur a loss. For derivative
instruments other than purchased options, this loss may exceed the amount of the
initial investment made or the premium received by the Portfolio. Derivative
instruments may sometimes increase or leverage the Portfolio's exposure to a
particular market risk. Leverage enhances the Portfolio's exposure to the price
volatility of derivative instruments it holds. The Portfolio's success in using
derivative instruments to hedge portfolio assets depends on the degree of price
correlation between the derivative instruments and the hedged asset. Imperfect
correlation may be caused by several factors, including temporary price
disparities among the trading markets for the derivative instrument, the assets
underlying the derivative instrument and the Portfolio assets. Over-the-counter
("OTC") derivative instruments involve an enhanced risk that the issuer or
counterparty will fail to perform its contractual obligations. Some derivative
instruments are not readily marketable or may become illiquid under adverse
market conditions. In addition, during periods of market volatility, a commodity
exchange may suspend or limit trading in an exchange-traded derivative
instrument, which may make the contract temporarily illiquid and difficult to
price. Commodity exchanges may also establish daily limits on the amount that
the price of a futures contract or futures option can vary from the previous
day's settlement price. Once the daily limit is reached, no trades may be made
that day at a price beyond the limit. This may prevent the Portfolio from
closing out positions and limiting its losses. The staff of the Commission takes
the position that purchased OTC options, and assets used as cover for written
OTC options, are subject to the Portfolio's 15% limit on illiquid investments.
However, with respect to options written with primary dealers in U.S. Government
securities pursuant to an agreement requiring a closing purchase transaction at
a formula price, the amount of illiquid securities may be calculated with
reference to the formula price. The Portfolio's ability to terminate OTC
derivative instruments may depend on the cooperation of the counterparties to
such contracts. For thinly traded derivative instruments, the only source of
price quotations may be the selling dealer or counterparty. In addition, certain
provisions of the Internal Revenue Code of 1986, as amended (the "Code"), limit
the extent to which the Portfolio may purchase and sell derivative instruments.
The Portfolio will engage in transactions in futures contracts and related
options only to the extent such transactions are consistent with the
requirements of the Code for maintaining the qualification of the Fund as a
regulated investment company for federal income tax purposes. See "Taxes."
Asset Coverage for Derivative Instruments. Transactions using forward contracts,
futures contracts and options (other than options that the Portfolio has
purchased) expose the Portfolio to an obligation to another party. The Portfolio
will not enter into any such transactions unless it owns either (1) an
offsetting ("covered") position in securities, currencies, or other options or
futures contracts or forward contracts, or (2) cash, receivables, and short-term
debt securities with a value sufficient at all times to cover its potential
obligations not covered as provided in (1) above. The Portfolio will comply with
Commission guidelines regarding cover for these instruments and, if the
guidelines so require, set aside cash, U.S. Government securities or other
liquid, high-grade debt securities in a segregated account with its custodian in
the prescribed amount.
Assets used as cover or held in a segregated account cannot be sold while
the position in the corresponding forward contract, futures contract or option
is open, unless they are replaced with other appropriate assets. As a result,
the commitment of a large portion of the Portfolio's assets to cover or
segregated accounts could impede portfolio management or the Portfolio's ability
to met redemption requests or other current obligations.
Limitations on Futures Contracts and Options. If the Portfolio has not complied
with the 5% CFTC test set forth in the Fund's prospectus, to evidence its
hedging intent, the Portfolio expects that, on 75% or more of the occasions on
which it takes a long futures or option on futures position, it will have
purchased or will be in the process of purchasing, equivalent amounts of related
securities at the time when the futures or options position is closed out.
However, in particular cases, when it is economically advantageous for the
Portfolio to do so, a long futures or options position may be terminated (or an
option may expire) without a corresponding purchase of securities.
The Portfolio may enter into futures contracts, and options on futures
contracts, traded on an exchange regulated by the CFTC and on foreign exchanges,
but, with respect to foreign exchange-traded futures contracts and options on
such futures contracts, only if the Adviser determines that trading on each such
foreign exchange does not subject the Portfolio to risks, including credit and
liquidity risks, that are materially greater than the risks associated with
trading on CFTC-regulated exchanges.
In order to hedge its current or anticipated portfolio positions, the
Portfolio may use futures contracts on securities held in its Portfolio or on
securities with characteristics similar to those of the securities held by the
Portfolio. If, in the opinion of the Adviser, there is a sufficient degree of
correlation between price trends for the securities held by the Portfolio and
futures contracts based on other financial instruments, securities indices or
other indices, the Portfolio may also enter into such futures contracts as part
of its hedging strategy.
All call and put options on securities written by the Portfolio will be
covered. This means that, in the case of call option, the Portfolio will own the
securities subject to the call option or an offsetting call option so long as
the call option is outstanding. In the case of a put option, the Portfolio will
own an offsetting put option or will have deposited with its custodian cash or
liquid, high-grade debt securities with a value at least equal to the exercise
price of the put option. The Portfolio may only write a put option on a security
that it intends to acquire for its investment portfolio.
Repurchase Agreements. Under a repurchase agreement the Portfolio buys a
security at one price and simultaneously promise to sell that same security back
to the seller at a higher price. At no time will the Portfolio commit more than
15% of its net assets to repurchase agreements which mature in more than seven
days and other illiquid securities. The Portfolio's repurchase agreements will
provide that the value of the collateral underlying the repurchase agreement
will always be at least equal to the repurchase price, including any accrued
interest earned on the repurchase agreement, and will be marked to market daily.
Reverse Repurchase Agreements. The Portfolio may enter into reverse repurchase
agreements. Under a reverse repurchase agreement, the Portfolio temporarily
transfers possession of a portfolio instrument to another party, such as a bank
or broker-dealer, in return for cash. At the same time, the Portfolio agrees to
repurchase the instrument at an agreed upon time (normally within seven days)
and price, which reflects an interest payment. The Portfolio expects that it
will enter into reverse repurchase agreements when it is able to invest the cash
so acquired at a rate higher than the cost of the agreement, which would
increase the income earned by the Portfolio. The Portfolio could also enter into
reverse repurchase agreements as a means of raising cash to satisfy redemption
requests without the necessity of selling portfolio assets.
When the Portfolio enters into a reverse repurchase agreement, any
fluctuations in the market value of either the securities transferred to another
party or the securities in which the proceeds may be invested would affect the
market value of the Portfolio's assets. As a result, such transactions may
increase fluctuations in the market value of the Portfolio's assets. While there
is a risk that large fluctuations in the market value of the Portfolio's assets
could affect the Portfolio's net asset value, this risk is not significantly
increased by entering into reverse repurchase agreements, in the opinion of the
Adviser. Because reverse repurchase agreements may be considered to be the
practical equivalent of borrowing funds, they constitute a form of leverage. If
the Portfolio reinvests the proceeds of a reverse repurchase agreement at a rate
lower than the cost of the agreement, entering into the agreement will lower the
Portfolio's yield.
At all times that a reverse repurchase agreement is outstanding, the
Portfolio will maintain cash or high grade liquid securities in a segregated
account at its custodian bank with a value at least equal to its obligation
under the agreement. Securities and other assets held in the segregated account
may not be sold while the reverse repurchase agreement is outstanding, unless
other suitable assets are substituted. While the Adviser does not consider
reverse repurchase agreements to involve a traditional borrowing of money,
reverse repurchase agreements will be included within the aggregate limitation
on "borrowings" contained in the Portfolio's investment restriction (1) set
forth below.
Portfolio Turnover. The Portfolio cannot accurately predict its portfolio
turnover rate, but it is anticipated that the annual turnover rate will
generally not exceed 100% (excluding turnover of securities having a maturity of
one year or less). A 100% annual turnover rate would occur, for example, if all
the securities in the portfolio were replaced once in a period of one year. A
high turnover rate (100% or more) necessarily involves greater expenses to the
Portfolio. The Portfolio engages in portfolio trading (including short-term
trading) if it believes that a transaction including all costs will help in
achieving its investment objective either by increasing income or by enhancing
the Portfolio's net asset value. High portfolio turnover may also result in the
realization of substantial net short-term capital gains. In order for the Fund
to continue to qualify as a regulated investment company for federal tax
purposes, less than 30% of the annual gross income of the Fund must be derived
from the sale of securities (including its share of gains from the sale of
securities held by the Portfolio) held for less than three months.
Lending Portfolio Securities. If the Adviser decides to make securities loans,
the Portfolio may seek to increase its income by lending portfolio securities to
broker-dealers or other institutional borrowers. Under present regulatory
policies of the Commission, such loans are required to be secured continuously
by collateral in cash, cash equivalents or U.S. Government securities held by
the Portfolio's custodian and maintained on a current basis at an amount at
least equal to market value of the securities loaned, which will be marked to
market daily. Cash equivalents include certificates of deposit, commercial paper
and other short-term money market instruments. The financial condition of the
borrower will be monitored by the Adviser on an ongoing basis. The Portfolio
would continue to receive the equivalent of the interest or dividends paid by
the issuer on the securities loaned and would also receive a fee, or all or a
portion of the interest on investment of the collateral. The Portfolio would
have the right to call a loan and obtain the securities loaned at any time on up
to five business days' notice. The Portfolio would not have the right to vote
any securities having voting rights during the existence of a loan, but could
call the loan in anticipation of an important vote to be taken among holder of
the securities or the giving or holding of their consent on a material matter
affecting the investment. Securities lending involves administration expenses,
including finders' fees. If the Adviser decides to make securities loans, it is
intended that the value of the securities loaned would not exceed 1/3 of the
Portfolio's total assets. Securities lending involves administrative expenses
including finders' fees. As of the present time, the Trustees of the Portfolio
have not made a determination to engage in this activity, and have no present
intention of making such a determination during the current fiscal year.
INVESTMENT RESTRICTIONS
The following investment restrictions of the Fund are designated as
fundamental policies and as such cannot be changed without the approval of the
holders of a majority of the Fund's outstanding voting securities, which as used
in this SAI means the lesser of (a) 67% of the shares of the Fund, present or
represented by proxy at a meeting if the holders of more than 50% of the shares
are present or represented at the meeting or (b) more than 50% of the shares of
the Fund. Accordingly the Fund may not:
(1) Borrow money or issue senior securities except as permitted by the
Investment Company Act of 1940;
(2) Purchase any securities on margin (but the Fund and the Portfolio may
obtain such short-term credits as may be necessary for the clearance of
purchases and sales of securities);
(3) Underwrite securities of other issuers;
(4) Invest in real estate including interests in real estate limited
partnerships (although it may purchase and sell securities which are secured by
real estate and securities of companies which invest or deal in real estate) or
purchase or sell commodities or commodity contacts with respect to physical
commodities;
(5) Make loans to any person except by (a) the acquisition of debt
securities and making portfolio investments, (b) entering into repurchase
agreements and (c) lending portfolio securities;
(6) With respect to 75% of its total assets, invest more than 5% of its
total assets (taken at current value) in the securities of any one issuer, or
invest in more than 10% of the outstanding voting securities of any one issuer,
except obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities and except securities of other investment companies; or
(7) Invest in the securities of any one industry, except the medical
research and health care industry (and except securities issued or guaranteed by
the U.S. Government, its agencies or instrumentalities) if as a result 25% or
more of the Fund's total assets would be invested in the securities of such
industry.
Notwithstanding the investment policies and restrictions of the Fund, the
Fund may invest its assets in an open-end management investment company with
substantially the same investment objective, policies and restrictions as the
Fund. Notwithstanding the investment policies and restrictions of the Portfolio,
the Portfolio may invest part of its assets in another investment company
consistent with the Investment Company Act of 1940 (the "1940 Act").
The Portfolio has adopted substantially the same fundamental investment
restrictions as the foregoing investment restrictions adopted by the Fund; such
restrictions cannot be changed without the approval of a "majority of the
outstanding voting securities" of the Portfolio.
The Fund and the Portfolio have each adopted the following investment
policies which may be changed without shareholder or investor approval. Neither
the Fund nor the Portfolio may invest more than 15% of its net assets in
investments which are not readily marketable, including restricted securities
and repurchase agreements with a maturity longer than seven days. Restricted
securities for the purposes of this limitation do not include securities
eligible for resale pursuant to Rule 144A under the Securities Act of 1933 and
commercial paper issued pursuant to Section 4(2) of said Act that the Board of
Directors of the Fund or Trustees of the Trust or Portfolio, or their delegate,
determines to be liquid. Except for obligations issued or guaranteed by the U.S.
Government or any of its agencies or instrumentalities, neither the Fund nor the
Portfolio will knowingly purchase a security issued by a company (including
predecessors) with less than three years operating history (unless such security
is rated at least B or a comparable rating at the time of purchase by a least
one nationally recognized rating service) if, as a result of such purchase, more
than 5% of the Portfolio's or the Fund's total assets, as the case may be (taken
at current value), would be invested in such securities. Neither the Fund nor
the Portfolio will purchase warrants if, as a result of such purchase, more than
5% of the Portfolio's or the Fund's net assets, as the case may be (taken at
current value), would be invested in warrants, and the value of such warrants
which are not listed on the New York or American Stock Exchange may not exceed
2% of the Portfolio's or the Fund's net assets; this policy does not apply to or
restrict warrants acquired by the Portfolio or the Fund in units or attached to
securities, inasmuch as such warrants are deemed to be without value. Neither
the Fund nor the Portfolio will purchase oil, gas or other mineral leases or
purchase partnership interests in oil, gas or other mineral exploration or
development programs. Neither the Fund nor the Portfolio will purchase or retain
in its portfolio any securities issued by an issuer any of whose officers,
directors, trustees or security holders is an officer or Director of the Fund or
is a member, officer, director or trustee of any investment adviser of the Fund
or the Portfolio if after the purchase of the securities of such issuer by the
Fund or the Portfolio one or more of such persons owns beneficially more than
1/2 of 1% of the shares or securities or both (all taken at market value) of
such issuer and such persons owning more than 1/2 of 1% of such shares or
securities together own beneficially more than 5% of such shares or securities
or both (all taken at market value). Neither the Fund nor the Portfolio will
purchase an option on a security if, after such transaction, more than 5% of its
net assets, measured by the aggregate of all premiums paid for all such options
held by the Portfolio, would be so invested.
Whenever an investment policy or investment restriction set forth in the
Prospectus or this SAI states a maximum percentage of assets that may be
invested in any security or other asset or describes a policy regarding quality
standards, such percentage limitation or standard shall be determined
immediately after and as a result of the Fund's or the Portfolio's acquisition
of such security or other asset. Accordingly, any later increase or decrease
resulting from a change in values, assets or other circumstances, other than a
subsequent rating change below investment grade made by a rating service, will
not compel the Fund or the Portfolio, as the case may be, to dispose of such
security or other asset. Nevertheless, under normal market conditions the Fund
and the Portfolio must take actions necessary to comply with its policy of
investing at least 65% of total assets in equity securities of health science
companies. Moreover, the Fund and the Portfolio must always be in compliance
with its borrowing policy set forth below.
In order to permit the sale of shares of the Fund in certain states, the
Fund and the Portfolio may make commitments more restrictive than the
fundamental policies described above. Should the Fund determine that any such
commitment is no longer in the best interests of the Fund and its shareholders,
it will revoke the commitment by terminating sales of its shares in the state(s)
involved.
Although permissible under the Fund's investment restrictions, the Fund has
no present intention during the coming fiscal year to: borrow money; pledge its
assets; or make loans to other persons.
MANAGEMENT OF THE FUND AND THE PORTFOLIO
Eaton Vance acts as the sponsor and manager of the Fund and the
administrator of the Portfolio. The Portfolio has engaged G/A as its investment
adviser.
THE ADVISER
As investment adviser to the Portfolio, the Adviser manages the Portfolio's
investments, subject to the supervision of the Board of Trustees of the
Portfolio. The Adviser is also responsible for effecting all security
transactions on behalf of the Portfolio, including the allocation of principal
transactions and portfolio brokerage and the negotiation of commissions. See
"Portfolio Security Transactions." The advisory fee rate on daily net assets is
reduced to .70% on assets of $500 million but less than $1 billion, to .65% on
assets of $1 billion but less than $1.5 billion, to .60% on assets of $1.5
billion but less than $2 billion, to .55% on assets of $2 billion but less than
$3 billion and .50% on assets of $3 billion and over.
The performance fee adjustment to the advisory fee is as follows: After 12
months, the basic advisory fee is subject to upward or downward adjustment
depending upon whether, and to what extent, the investment performance of the
Portfolio differs by at least one percentage point from the record of the
Standard & Poor's Index of 500 Common Stocks over the same period. Each
percentage point difference is multiplied by a performance adjustment rate of
0.025%. The maximum adjustment plus/minus is 0.25%. One twelfth (1/12) of this
adjustment is applied each month to the average daily net assets of the
Portfolio over the entire peformance period. This adjustment shall be based on a
rolling period of up to and incuding the most recent 36 months. Portfolio
performance shall be total return as computed under Rule 482 under the
Securities Act of 1933.
The Portfolio's investment advisory agreement with the Adviser remains in
effect until February 28, 1997; it may be continued indefinitely thereafter so
long as such continuance is approved at least annually (i) by the vote a
majority of the Trustees of the Portfolio who are not interested persons of the
Portfolio cast in person at a meeting specifically called for the purpose of
voting on such approval and (ii) by the Board of Trustees of the Portfolio or by
vote of a majority of the outstanding voting securities of the Portfolio. The
agreement may be terminated at any time without penalty on sixty days' written
notice by the Board of Trustees of either party or by vote of the majority of
the outstanding voting securities of the Portfolio, and the agreement will
terminate automatically in the event of its assignment. The agreement provides
that the Adviser may render services to others. The agreement also provides
that, in the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties under the agreement on the part of
the Adviser, the Adviser shall not be liable to the Portfolio or to any
shareholder for any act or omission in the course of or connected with rendering
services or for any losses sustained in the purchase, holding or sale of any
security.
MANAGER, SPONSOR AND ADMINISTRATOR
Eaton Vance, its affiliates and its predecessor companies have been managing
assets of individuals and institutions since 1924 and managing investment
companies since 1931. They maintain a large staff of experienced fixed-income
and equity investment professionals to service the needs of their clients. The
fixed-income division focuses on all kinds of taxable investment-grade and
high-yield securities, tax-exempt investment-grade and high-yield securities,
and U.S. Government securities. The equity division, with a staff of
approximately 30 professionals, covers stocks ranging from blue chip to emerging
growth companies. Eaton Vance manages more than 150 mutual funds, as well as
retirement plans, pension funds and endowments.
See "Management of the Fund and the Portfolio" in the Prospectus for a
description of the services Eaton Vance performs as the manager and sponsor of
the Fund and the administrator of the Portfolio. Under Eaton Vance's management
contract with the Fund and administration agreement with the Portfolio, Eaton
Vance receives a monthly management fee from the Fund and a monthly
administration fee from the Portfolio. Each fee is computed by applying the
annual asset rate applicable to that portion of the average daily net assets of
the Fund or the Portfolio throughout the month in each Category as indicated
below:
ANNUAL
CATEGORY AVERAGE DAILY NET ASSETS ASSET RATE
- ---------- ------------------------ ----------
1 less than $500 million ............................... 0.25%
2 $500 million but less than $1 billion ................ 0.23333
3 $1 billion but less than $1.5 billion ................ 0.21667
4 $1.5 billion but less than $2 billion ................ 0.20
5 $2 billion but less than $3 billion .................. 0.18333
6 $3 billion and over .................................. 0.1667
For the management fees that the Fund paid to Eaton Vance, see "Fees and
Expenses" in the Part II.
Eaton Vance's management contract with the Fund will remain in effect until
February 28, 1997, and its administration agreement with the Portfolio will
remain in effect until February 28, 1997. Each agreement may be continued from
year to year, so long as such continuance is approved annually by the vote of a
majority of the Directors of the Fund or the Trustees of the Portfolio, as the
case may be. Each agreement may be terminated at any time without penalty on
sixty days' written notice by the relevant Board of Trustees of either party
thereto, or by a vote of a majority of the outstanding voting securities of the
Fund or the Portfolio, as the case may be. Each agreement will terminate
automatically in the event of its assignment. Each agreement provides that, in
the absence of Eaton Vance's willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations or duties to the Fund or the Portfolio
under such contract or agreement, Eaton Vance will not be liable to the Fund or
the Portfolio for any loss incurred. Each agreement was initially approved by
the Directors and Trustees, including the non-interested Directors and Trustees,
of the Trust or the Portfolio.
To the extent necessary to comply with U.S. tax law, Eaton Vance has
employed IBT Trust Company (Cayman) Ltd. to serve as the sub-administrator of
the Portfolio. The sub-administrator maintains the Portfolio's principal office
and certain of its records and provides administrative assistance in connection
with meetings of the Portfolio's Trustees and interestholders.
The Fund and the Portfolio, as the case may be, will each be responsible for
all of its respective costs and expenses not expressly stated to be payable by
an Adviser under the investment advisory agreement, by Eaton Vance under the
management contract or the administration agreement, or by EVD under the
distribution agreement. Such costs and expenses to be borne by each of the Fund
or the Portfolio, as the case may be, include, without limitation: custody and
transfer agency fees and expenses, including those incurred for determining net
asset value and keeping accounting books and records; expenses of pricing and
valuation services; the cost of share certificates; membership dues in
investment company organizations; brokerage commissions and fees; fees and
expenses of registering under the securities laws; expenses of reports to
shareholders and investors; proxy statements, and other expenses of
shareholders' or investors' meetings; insurance premiums, printing and mailing
expenses; interest, taxes and corporate fees; legal and accounting expenses;
compensation and expenses of Directors or Trustees not affiliated with Eaton
Vance or an Adviser; distribution and service fees payable by the Fund under its
Rule 12b-1 distribution plan; and investment advisory, management and
administration fees. The Fund and the Portfolio, as the case may be, will also
each bear expenses incurred in connection with litigation in which the Fund or
the Portfolio, as the case may be, is a party and any legal obligation to
indemnify its respective officers and Directors or Trustees with respect
thereto.
Eaton Vance and EV are both wholly-owned subsidiaries of EVC. BMR is a
wholly-owned subsidiary of Eaton Vance. Eaton Vance and BMR are both
Massachusetts business trusts, and EV is the trustee of Eaton Vance and BMR. The
Directors of EV are Landon T. Clay, H. Day Brigham, Jr., M. Dozier Gardner,
James B. Hawkes and Benjamin A. Rowland, Jr. The Directors of EVC consist of the
same persons and John G.L. Cabot and Ralph Z. Sorenson. Mr. Clay is chairman and
Mr. Gardner is president and chief executive officer of EVC, Eaton Vance, BMR
and EV. All of the issued and outstanding shares of Eaton Vance and of EV are
owned by EVC. All of the issued and outstanding shares of BMR are owned by Eaton
Vance. All shares of the outstanding Voting Common Stock of EVC are deposited in
a Voting Trust which expires December 31, 1996, the Voting Trustees of which are
Messrs. Brigham, Clay, Gardner, Hawkes and Rowland. The Voting Trustees have
unrestricted voting rights for the election of Directors of EVC. All of the
outstanding voting trust receipts issued under said Voting Trust are owned by
certain of the officers of Eaton Vance and BMR who are also officers and
Directors of EVC and EV. As of September 3, 1996, Messrs. Clay, Gardner and
Hawkes each owned 24% of such voting trust receipts and Messrs. Rowland and
Brigham owned 15% and 13%, respectively, of such voting trust receipts. Messrs.
Clay, Gardner, Hawkes and Otis, who are officers, Directors or Trustees of the
Fund and/or the Portfolio, are members of the EVC, Eaton Vance, BMR and EV
organizations. Messrs. Murphy, O'Connor, Richardson and Woodbury and Ms. Sanders
are officers of the Fund and/or the Portfolio, and are also members of the Eaton
Vance, BMR and/or EV organizations. Eaton Vance will receive the fees paid under
the management agreement and its wholly-owned subsidiary, Eaton Vance
Distributors, Inc., as Principal Underwriter, will receive its portion of the
sales charge on shares of the Fund sold through investment dealers.
EVC owns all of the stock of Energex Energy Corporation, which engages in
oil and gas exploration and development. In addition, Eaton Vance owns all the
stock of Northeast Properties, Inc., which is engaged in real estate investment.
EVC also owns 24% of the Class A shares of Lloyd George Management (B.V.I.)
Limited, a registered investment adviser. EVC owns all the stock of Fulcrum
Management, Inc. and MinVen, Inc., which are engaged in precious metal mining
venture investment and management. EVC, BMR, Eaton Vance and EV may also enter
into other businesses.
Eaton Vance mutual funds are distributed by Eaton Vance Distributors both
within the United States and offshore. Eaton Vance Distributors believes that an
investment professional can provide valuable services to you to help you reach
your investment goals. Meeting investment goals requires time, objectivity and
investment savvy. Before making an investment recommendation, a representative
can help you carefully consider your short- and long-term financial goals, your
tolerance for investment risk, your investment time frame, and other investments
you may already own. Your professional investment representatives are
knowledgeable about financial markets, as well as the wide range of investment
opportunities available. A representative can provide you with tailored
financial advice and help you decide when to buy, sell or persevere with your
investments.
CUSTODIAN
Investors Bank & Trust Company ("IBT"), 89 South Street, Boston,
Massachusetts, acts as custodian for the Fund and the Portfolio. IBT has the
custody of all cash and securities of the Fund and all securities of the
Portfolio purchased in the United States, and its subsidiary, IBT Fund Services
(Canada) Inc., 1 First Canadian Place, King Street West, Toronto, Ontario,
Canada, maintains the Fund's and the Portfolio's general ledger and computes the
daily net asset value of interests in the Portfolio and the net asset value of
shares of the Fund. In such capacities, IBT attends to details in connection
with the sale, exchange, substitution, transfer or other dealings with the
Fund's and the Portfolio's respective investments, receives and disburses all
funds, and performs various other ministerial duties upon receipt of proper
instructions from the Fund and the Portfolio, respectively.
Portfolio securities, if any, purchased by the Portfolio in the U.S. are
maintained in the custody of IBT or of other domestic banks or depositories.
Portfolio securities purchased outside of the U.S. are maintained in the custody
of foreign banks and trust companies that are member of IBT's Global Custody
Network, or foreign depositories used by such foreign banks and trust companies.
Each of the domestic and foreign custodial institutions holding portfolio
securities has been approved by the Board of Trustees of the Portfolio in
accordance with regulations under the 1940 Act.
IBT charges fees which are competitive within the industry. These fees for
the Portfolio relate to (1) custody services based upon a percentage of the
market values of Portfolio securities; (2) bookkeeping and valuation services
provided at an annual rate; (3) activity charges, primarily the result of the
number of portfolio transactions; and (4) reimbursement of out-of-pocket
expenses. These fees are then reduced by a credit for cash balances of the
Portfolio at the custodian equal to 75% of the 91-day U.S. Treasury Bill auction
rate applied to the Portfolio's average daily collected balances. The portion of
the fee for the Fund related to bookkeeping and pricing services is based upon a
percentage of the Fund's net assets and the portion of the fee related to
financial statement preparation is a fixed amount. Landon T. Clay, a Director of
EVC and an officer, Trustee or Director of other entities in the Eaton Vance
organization, owns approximately 13% of the voting stock of Investors Financial
Services Corp., the holding company parent of IBT. Management believes that such
ownership does not create an affiliated person relationship between the Fund or
Portfolio and IBT under the 1940 Act.
SERVICE FOR WITHDRAWAL
By a standard agreement, the Fund's transfer agent will send to the
shareholder regular monthly or quarterly payments of any permitted amount
designated by the shareholder (see "Eaton Vance Shareholder Services Withdrawal
Plan" in the Fund's current Prospectus) based upon the value of the shares held.
The checks will be drawn from share redemptions and hence are a return of
principal. Income dividends and capital gain distributions in connection with
withdrawal accounts will be credited at net asset value as of the record date
for each distribution. Continued withdrawals in excess of current income will
eventually use up principal, particularly in a period of declining market
prices. A shareholder may not have a withdrawal plan in effect at the same time
he or she has authorized Bank Automated Investing or is otherwise making regular
purchases of Fund shares. Either the shareholder, the Fund's transfer agent or
the Principal Underwriter will be able to terminate the withdrawal plan at any
time without penalty.
DETERMINATION OF NET ASSET VALUE
The net asset value per share is computed daily, Monday through Friday, as
of the close of regular trading on the New York Stock Exchange (the "Exchange"),
which is currently 4:00 p.m., Eastern time, except that the net asset value will
not be computed on the following holidays: New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. The Portfolio's net asset value also will be determined on any
day in which there is sufficient trading in its portfolio securities that the
net asset value might be affected materially, but only if on any such day the
Portfolio is required to sell or redeem shares. The net asset value per share is
computed by dividing the value of the securities held by the Portfolio plus any
cash or other assets (including any accrued interest and dividends receivable
but not yet received) minus all liabilities (including accrued expenses) by the
total number of Portfolio shares outstanding at such time.
To the extent sales prices are available, securities that are traded on a
recognized stock exchange, whether U.S. or foreign, are valued at the last sale
price on that exchange prior to the time when assets are valued or prior to the
close of trading on the Exchange. In the event that there are no sales, the last
available sale price will be used. If a security is traded on more than one
exchange, the latest price on the exchange where the stock is primarily traded
will be used. If there is no sale that day or if the security is not listed, the
security is valued at its last sale quotation. The calculation of the
Portfolio's net asset value may not take place contemporaneously with the times
noted above for determining the prices of certain portfolio securities,
including foreign securities. If events materially effecting the value of such
securities occur between the time when their prices are determined and the time
the Portfolio's net asset value is calculated, such securities will be valued at
fair value as determined in good faith by the Trustees of the Portfolio. Also,
for any security for which application of the preceding methods of valuation
results in a price for a security that is deemed not to be representative of the
market value of such security, the security will be valued at fair value under
the supervision and responsibility of the Board of Trustees.
Futures contracts and call options written on portfolio securities will be
priced at the latest sales price on the principal exchange on which such options
are normally traded or, if there have been no sales on such exchange on that
day, at the closing asked price. Short-term investments having a maturity of 60
days or less are valued on the basis of amortized cost. All other assets and
securities held by the Portfolio (including restricted securities) are valued at
fair value as determined in good faith under the supervision and responsibility
of the Board of Trustees. Any assets that are denominated in a foreign currency
are translated in U.S. dollars of the last quoted spot rate of exchange
prevailing on each valuation date.
Each investor in the Portfolio, including the Fund, may add to or reduce its
investment in the Portfolio on each day the New York Stock Exchange (the
"Exchange") is open for trading ("Portfolio Business Day") as of the close of
regular trading on the Exchange. The value of each investor's interest in the
Portfolio will be determined by multiplying the net asset value of the Portfolio
by the percentage, determined on the prior Portfolio Business Day, which
represents that investor's share of the aggregate interests in the Portfolio on
such prior day. Any additions or withdrawals, which are to be effected on that
day, will then be effected. Each investor's percentage of the aggregate
interests in the Portfolio will then be recomputed as the percentage equal to a
fraction (i) the numerator of which is the value of such investor's investment
in the Portfolio as of the close of regular trading on the Exchange (normally
4:00 p.m., New York time), on such day plus or minus, as the case may be, that
amount of any additions to or withdrawals from the investor's investment in the
Portfolio effected on such day, and (ii) the denominator of which is the
aggregate net asset value of the Portfolio as of the close of such trading on
such day plus or minus, as the case may be, the amount of the net additions to
or withdrawals from the aggregate investment in the Portfolio by all investors
in the Portfolio. The percentage so determined will then be applied to determine
the value of the investor's interest in the Portfolio for the current Portfolio
Business Day.
INVESTMENT PERFORMANCE
Average annual total return is determined by multiplying a hypothetical
initial purchase order of $1,000 by the average annual compound rate of return
(including capital appreciation/depreciation, and dividends and distributions
paid and reinvested) for the stated period and annualizing the result. The
calculation assumes that all distributions are reinvested at net asset value on
the reinvestment dates during the period, and either (i) the deduction of the
maximum sales charge from the initial $1,000 purchase order or (ii) a complete
redemption of the investment and, if applicable, the deduction of the contingent
deferred sales charge at the end of the period.
Total return may be compared to relevant indices, such as the Consumer Price
Index and various domestic and foreign securities indices, such as the Standard
& Poor's Index 500 Stock Index. In addition, the Fund's total return may be
compared to indices available through Lipper Analytical Services, Inc. The
Fund's total return and comparisons with these indices may be used in
advertisements and in information furnished to present or prospective
shareholders. The Fund's performance may differ from that of other investors in
the Portfolio, including the other investment companies.
Average annual total return and total return figures represent the increase
(or decrease) in the value of an investment in the Fund over a specified period.
Both calculations assume that all income dividends and capital gain
distributions during the period are reinvested at net asset value in additional
Fund shares. Quotations of the average annual total return reflect the deduction
of the maximum sales charge and a proportional share of Fund expenses on an
annual basis. The results, which are annualized, represent an average annual
compounded rate of return on a hypothetical investment in the Fund over a period
of 1, 5 and 10 years ending on the most recent calendar quarter (but not for a
period greater than the life of the Fund), calculated pursuant to the following
formula:
P (1 + T) n = ERV
where P = a hypothetical initial payment of $1,000,
T = the average annual total return,
n = the number of years, and
ERV = the ending redeemable value of a hypothetical $1,000
payment made at the beginning of the period.
Information used in advertisements and in materials furnished to present or
prospective shareholders may include statistics, data and performance studies
prepared by independent organizations (e.g. Ibbotson Associates, Standard &
Poor's Ratings Group, Merrill Lynch Private Client Group, Bloomberg, L.P., Dow
Jones & Company, Inc., and the Federal Reserve Board) or included in various
publications (e.g. The Wall Street Journal, Barron's and The Decade: Wealth of
Investments in U.S. Stocks, Bonds, Bills & Inflation) reflecting the investment
performance or return achieved by various classes and types of investments (e.g.
common stocks, small company stocks, long-term corporate bonds, long-term
government bonds, intermediate-term government bonds, U.S. Treasury bills) over
various periods of time. This information may be used to illustrate the benefits
of long-term investments in common stocks.
Information about the Portfolio allocation and holdings of investments in
the Portfolio may be included in advertisements and other material furnished to
present and prospective shareholders. Also, evaluations of the Fund's
performance made by independent sources, such as Lipper Analytical Services,
Inc., CDA/Weisenberger and Morningstar, Inc. may be used in advertisements and
in information furnished to present or prospective shareholders.
Information used in advertisements and materials furnished to present or
prospective shareholders may include examples and performance illustrations of
the cumulative change in various levels of investments in the Fund for various
periods of time and at various prices per share. Such examples and illustrations
may assume that all dividends and capital gain distributions are reinvested in
additional shares and may also show separately the value of shares acquired form
such reinvestments as well as the total value of all shares acquired for such
investments and reinvestments. Such information may also include statements or
illustration relating to the appropriateness of types of securities and/or
mutual funds which may be employed to meet specific financial goals, such as (1)
funding retirement, (2) paying for children's education, and (3) financially
supporting aging parents. These three financial goals may be referred to in such
advertisements or materials as the "Triple Squeeze".
The Fund may provide investors with information on global investing, which
may include descriptions, comparisons, charts and/or illustrations of: foreign
and domestic equity market capitalizations; returns obtained by foreign and
domestic securities; and the effects of globally diversifying an investment
portfolio (including volatility analysis and performance information). Such
information may be provided for a variety of countries over varying time
periods.
The Fund may provide information about Eaton Vance, its affiliates and other
investment advisers to the funds in the Eaton Vance Family of Funds in sales
material or advertisements provided to investors or prospective investors. Such
material or advertisements may also provide information on the use of investment
professionals by such investors.
TAXES
See also "Distribution and Taxes" in the Fund's current Prospectus.
The Fund intends to elect to be treated, and to qualify each year as a
regulated investment company ("RIC") under the Code. Accordingly, the Fund
intends to satisfy certain requirements relating to sources of its income and
diversification of its assets and to distribute all of its net investment income
and net realized capital gains in accordance with the timing requirements
imposed by the Code, so as to avoid any federal income or excise tax on the
Fund. Because the Fund invests its assets in the Portfolio, the Portfolio
normally must satisfy the applicable source of income and diversification
requirements in order for the Fund to satisfy them. The Portfolio will allocate
at least annually among its investors, including the Fund, each investor's
distributive share of the Portfolio's net investment income, net realized
capital gains, and any other items of income, gain, loss, deduction or credit.
The Portfolio will make allocations to the Fund in accordance with the Code and
applicable regulations and will make moneys available for withdrawal at
appropriate times and in sufficient amounts to enable the Fund to satisfy the
tax distribution requirements that apply to the Fund and that must be satisfied
in order to avoid federal income and/or excise tax on the Fund. For purposes of
applying the requirements of the Code regarding qualification as a RIC, the Fund
will be deemed (i) to own its proportionate share of each of the assets of the
Portfolio and (ii) to be entitled to the gross income of the Portfolio
attributable to such share.
In order to avoid federal excise tax, the Code requires that the Fund
distribute (or be deemed to have distributed) by December 31 of each calendar
year at least 98% of its ordinary income (not including tax-exempt income) for
such year, at least 98% of the excess of its realized capital gains over its
realized capital losses, generally computed on the basis of the one-year period
ending on October 31 of such year, after reduction by any available capital loss
carryforwards, and 100% of any income and capital gains from the prior year (as
previously computed) that was not paid out during such year and on which the
Fund was not taxed. Further, under current law, provided that the Fund qualifies
as a RIC for federal income tax purposes and the Portfolio is treated as a
partnership for Massachusetts and federal tax purposes, neither the Fund nor the
Portfolio is liable for any income, corporate excise or franchise tax in the
Commonwealth of Massachusetts or State of Maryland.
Foreign exchange gains and losses realized by the Portfolio and allocated to
the Fund in connection with the Portfolio's investments in foreign securities
and certain options, futures or forward contracts or foreign currency may be
treated as ordinary income and losses under special tax rules. Certain options,
futures or forward contracts of the Portfolio may be required to be marked to
market (i.e., treated as if closed out) on the last day of each taxable year,
and any gain or loss realized with respect to these contracts may be required to
be treated as 60% long-term and 40% short-term gain or loss. Positions of the
Portfolio in securities and offsetting options, futures or forward contracts may
be treated as "straddles" and be subject to other special rules that may, upon
allocation of the Portfolio's income, gain or loss to the Fund, affect the
amount, timing and character of the Fund's distributions to shareholders.
Certain uses of foreign currency and foreign currency derivatives such as
options, futures, forward contracts and swaps and investment by the Portfolio in
certain "passive foreign investment companies" may be limited or a tax election
may be made, if available, in order to preserve the Fund's qualification as a
RIC or avoid imposition of a tax on the Fund.
The Portfolio anticipates that it will be subject to foreign taxes on its
income (including, in some cases, capital gains) from foreign securities. Tax
conventions between certain countries and the U.S. may reduce or eliminate such
taxes. If more than 50% of the Fund's total assets, taking into account its
allocable share of the Portfolio's total assets, at the close of any taxable
year of the Fund consists of stock or securities of foreign corporations, the
Fund may file an election with the Internal Revenue Service pursuant to which
shareholders of the Fund will be required to (i) include in ordinary gross
income (in addition to taxable dividends actually received) their pro rata
shares of foreign income taxes paid by the Portfolio and allocated to the Fund
even though not actually received, and (ii) treat such respective pro rata
portions as foreign income taxes paid by them. Shareholders may then deduct such
pro rata portions of foreign income taxes in computing their taxable incomes,
or, alternatively, use them as foreign tax credits, subject to applicable
limitations, against their U.S. income taxes. Shareholders who do not itemize
deductions for federal income tax purposes will not, however, be able to deduct
their pro rata portion of foreign taxes deemed paid by the Fund, although such
shareholders will be required to include their shares of such taxes in gross
income. Shareholders who claim a foreign tax credit for such foreign taxes may
be required to treat a portion of dividends received from the Fund as separate
category income for purposes of computing the limitations on the foreign tax
credit. Tax-exempt shareholders will ordinarily not benefit from this election.
Each year that the Fund files the election described above, its shareholders
will be notified of the amount of (i) each shareholder's pro rata share of
foreign income taxes paid by the Portfolio and allocated to the Fund and (ii)
the portion of Fund dividends which represents income from each foreign country.
If the Fund does not make this election, it may deduct its allocated share of
such taxes in computing its investment company taxable income.
The Portfolio will allocate at least annually to the Fund and its other
investors their respective distributive shares of any net investment income and
net capital gains which have been recognized for federal income tax purposes
(including unrealized gains at the end of the Portfolio's fiscal year on certain
options and futures transactions that are required to be marked-to-market). Such
amounts will be distributed by the Fund to its shareholders in cash or
additional shares, as they elect. Shareholders of the Fund will be advised of
the nature of the distributions.
Distributions by the Fund of the excess of net long-term capital gains over
short-term capital losses earned by the Portfolio and allocated to the Fund,
taking into account any capital loss carryforwards that may be available to the
Fund in years after its first taxable year, are taxable to shareholders of the
Fund as long-term capital gains, whether received in cash or in additional
shares and regardless of the length of time their shares have been held. Certain
distributions, if declared in October, November or December and paid the
following January, will be taxed to shareholders as if received on December 31
of the year in which they are declared.
Any loss realized upon the redemption or exchange of shares with a tax
holding period of 6 months or less will be treated as a long-term capital loss
to the extent of any distribution of net long-term capital gains with respect to
such shares. All or a portion of a loss realized upon a taxable disposition of
Fund shares may be disallowed under "wash sale" rules if other Fund shares are
purchased (whether through reinvestment of dividends or otherwise) within 30
days before or after the disposition. Any disallowed loss will result in an
adjustment to the shareholder's tax basis in some or all of the other shares
acquired.
The Fund will not be subject to Massachusetts or Maryland income, corporate
excise or franchise taxation as long as it qualifies as a RIC under the Code.
Special tax rules apply to Individual Retirement Accounts ("IRAs") and
shareholders investing through IRAs should consult their tax advisers for more
information. Amounts paid by the Fund to individuals and certain other
shareholders who have not provided the Fund with their correct taxpayer
identification number and certain certifications required by the Internal
Revenue Service (the "IRS"), as well as shareholders with respect to whom the
Fund has received notification from the IRS or a broker, may be subject to
"backup" withholding of federal income tax from the Fund's dividends and
distributions and the proceeds of redemptions (including repurchases and
exchanges) at a rate of 31%. An individual's taxpayer identification number is
generally his or her social security number.
Non-resident alien individuals, foreign corporations and certain other
foreign entities generally will be subject to a U.S. withholding tax at a rate
of 30% on the Fund's distributions from its ordinary income and the excess of
its net short-term capital gain over its net long-term capital loss, unless the
tax is reduced or eliminated by an applicable tax treaty. Distributions from the
excess of the Fund's net long-term capital gain over its net short-term capital
loss received by such shareholders and any gain from the sale or other
disposition of shares of the Fund generally will not be subject to U.S. federal
income taxation, provided that non-resident alien status has been certified by
the shareholder. Different U.S. tax consequences may result if the shareholder
is engaged in a trade or business in the United States, is present in the United
States for a sufficient period of time during a taxable year to be treated as a
U.S. resident, or fails to provide any required certifications regarding status
as a non-resident alien investor. Foreign shareholders should consult their tax
advisers regarding the U.S. and foreign tax consequences of an investment in the
Fund.
The foregoing discussion does not describe many of the tax rules applicable
to IRAs nor does it address the special tax rules applicable to certain other
classes of investors, such as other retirement plans, tax-exempt entities,
insurance companies and financial institutions. Shareholders should consult
their own tax advisers with respect to these or other special tax rules that may
apply in their particular situations, as well as the state, local or foreign tax
consequences of investing in the Fund.
PORTFOLIO SECURITY TRANSACTIONS
Decisions concerning the execution of portfolio security transactions by the
Portfolio, including the selection of the market and the broker-dealer firm, are
made by the Adviser.
The Adviser places the portfolio security transactions of the Portfolio and
of certain other accounts managed by the Adviser for execution with many
broker-dealer firms. The Adviser uses its best efforts to obtain execution of
portfolio transactions at prices which are advantageous to the Portfolio and
(when a disclosed commission is being charged) at reasonably competitive
commission rates. In seeking such execution, the Adviser will use its best
judgment in evaluating the terms of a transaction, and will give consideration
to various relevant factors, including without limitation the size and type of
the transaction, the general execution and operational capabilities of the
broker-dealer, the nature and character of the market for the security, the
confidentiality, speed and certainty of effective execution required for the
transaction, the reputation, reliability, experience and financial condition of
the broker-dealer, the value and quality of services rendered by the
broker-dealer in other transactions, and the reasonableness of the commission,
if any. Transactions on stock exchanges and other agency transactions involve
the payment by the Portfolio of negotiated brokerage commissions. Such
commissions vary among different broker-dealer firms, and a particular
broker-dealer may charge different commissions according to such factors as the
difficulty and size of the transaction and the volume of business done with such
broker-dealer. Transactions in foreign securities usually involve the payment of
fixed brokerage commissions, which are generally higher than those in the United
States. There is generally no stated commission in the case of securities traded
in the over-the-counter markets, but the price paid or received by the Portfolio
usually includes an undisclosed dealer markup or markdown. In an underwritten
offering the price paid by the Portfolio includes a disclosed fixed commission
or discount retained by the underwriter or dealer. Although commissions paid on
portfolio transactions will, in the judgment of the Adviser, be reasonable in
relation to the value of the services provided, commissions exceeding those
which another firm might charge may be paid to broker-dealers who were selected
to execute transactions on behalf of the Portfolio and the Adviser's other
clients in part for providing brokerage and research services to the Adviser.
As authorized in Section 28(e) of the Securities Exchange Act of 1934, a
broker or dealer who executes a portfolio transaction on behalf of the Portfolio
may receive a commission which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if the
Adviser determines in good faith that such commission was reasonable in relation
to the value of the brokerage and research services provided. This determination
may be made on the basis of either that particular transaction or on the basis
of overall responsibilities which the Adviser and its affiliates have for
accounts over which it exercises investment discretion. In making any such
determination, the Adviser will not attempt to place a specific dollar value on
the brokerage and research services provided or to determine what portion of the
commission should be related to such services. Brokerage and research services
may include advice as to the value of securities, the advisability of investing
in, purchasing or selling securities, and the availability of securities or
purchasers or sellers of securities; furnishing analyses and reports concerning
issuers, industries, securities, economic factors and trends, portfolio strategy
and the performance of accounts; and effecting securities transactions and
performing functions incidental thereto (such as clearance and settlement); and
the "Research Services" referred to in the next paragraph.
It is a common practice of the investment advisory industry for the advisers
of investment companies, institutions and other investors to receive research,
statistical and quotation services, data, information and other services,
products and materials which assist such advisers in the performance of their
investment responsibilities ("Research Services") from broker-dealers which
execute portfolio transactions for the clients of such advisers and from third
parties with which such broker-dealers have arrangements. Consistent with this
practice, the Adviser may receive Research Services from broker-dealer firms
with which the Adviser places the portfolio transactions of the Portfolio and
from third parties with which these broker-dealers have arrangements. These
Research Services may include such matters as general economic and market
reviews, industry and company reviews, evaluations of securities and portfolio
strategies and transactions and recommendations as to the purchase and sale of
securities and other portfolio transactions, financial, industry and trade
publications, news and information services, pricing and quotation equipment and
services, and research oriented computer hardware, software, data bases and
services. Any particular Research Service obtained through a broker-dealer may
be used by the Adviser in connection with client accounts other than those
accounts which pay commissions to such broker-dealer. Any such Research Service
may be broadly useful and of value to the Adviser in rendering investment
advisory services to all or a significant portion of its clients, or may be
relevant and useful for the management of only one client's account or of a few
clients' accounts, or may be useful for the management of merely a segment of
certain clients' accounts, regardless of whether any such account or accounts
paid commissions to the broker-dealer through which such Research Service was
obtained. The advisory fee paid by the Portfolio is not reduced because the
Adviser receives such Research Services. The Adviser evaluates the nature and
quality of the various Research Services obtained through broker-dealer firms
and attempts to allocate sufficient commissions to such firms to ensure the
continued receipt of Research Services which the Adviser believes are useful or
of value to it in rendering investment advisory services to its clients.
Subject to the requirement that the Adviser shall use its best efforts to
seek to execute portfolio security transactions of the Portfolio at advantageous
prices and at reasonably competitive commission rates or spreads, the Adviser is
authorized to consider as a factor in the selection of any broker-dealer firm
with whom Portfolio orders may be placed the fact that such firm has sold or is
selling shares of the Fund or of other investment companies sponsored by Eaton
Vance. This policy is not inconsistent with a rule of the National Association
of Securities Dealers, Inc., which rule provides that no firm which is a member
of the Association shall favor or disfavor the distribution of shares of any
particular investment company or group of investment companies on the basis of
brokerage commissions received or expected by such firm from any source.
Securities considered as investments for the Portfolio may also be
appropriate for other investment accounts managed by the Adviser or its
affiliates. The Adviser will attempt to allocate equitably portfolio
transactions among the Portfolio and the portfolios of its other investment
accounts whenever decisions are made to purchase or sell securities by the
Portfolio and one or more of such other accounts simultaneously. In making such
allocations, the main factors to be considered are the respective investment
objectives of the Portfolio and such other accounts, the relative size of
portfolio holdings of the same or comparable securities, the availability of
cash for investment by the Portfolio and such accounts, the size of investment
commitments generally held by the Portfolio and such accounts and the opinions
of the persons responsible for recommending investments to the Portfolio and
such accounts. While this procedure could have a detrimental effect on the price
or amount of the securities available to the Portfolio from time to time, it is
the opinion of the Trustees of the Portfolio that the benefits available from
the Adviser's organization outweigh any disadvantage that may arise from
exposure to simultaneous transactions.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART II
This Part II provides information about EV TRADITIONAL WORLDWIDE HEALTH
SCIENCES FUND, INC.
FEES AND EXPENSES
Through August 31, 1996, the Fund incurred expenses by investing directly in
securities rather than investing in the Portfolio. In addition, some service
providers and some fee rates differ.
ADVISER
For the period September 1, 1995 to February 29, 1996, the Fund paid the
Adviser $141,499 in advisory fees. During the fiscal year ended August 31, 1995,
the Fund paid the Adviser $138,826 in advisory fees. The Adviser received
advisory fees of $121,553 and $30,036 during the fiscal years ended August 31,
1994 and 1993, respectively. Pursuant to the expense limitation previously in
effect, the Adviser reimbursed $16,868 and $30,036, respectively, during those
periods.
MANAGER AND ADMINISTRATOR
The prior Administrator (manager) of the Fund was paid $34,707 for its
services during the fiscal year ended August 31, 1995 and $36,020 for the six
months ended February 29, 1996.
DISTRIBUTION PLAN
Pursuant to the Distribution Plan in effect during the fiscal years ended
August 31, 1995, 1994 and 1993, the Fund paid $34,688, $24,300 and $25,455,
respectively, in 12b-1 fees to the prior Distributor. For the six months ended
February 29, 1996, $36,126 was paid.
PRINCIPAL UNDERWRITER
The Fund has authorized EVD to act as its agent in repurchasing shares at
the rate of $2.50 for each repurchase transaction handled by EVD. EVD estimates
that the expenses incurred by it in acting as repurchase agent for the Fund will
exceed the amounts paid therefor by the Fund. No fees paid to date.
BROKERAGE
During the fiscal years ended August 31, 1995, 1994 and 1993, the Fund paid
$29,541, $40,651 and $43,706, respectively, in brokerage commissions.
DIRECTORS AND TRUSTEES
The fees and expenses of those Directors of the Fund and Trustees of the
Portfolio who are not members of the Eaton Vance organization (the noninterested
Directors and Trustees) are paid by the Fund and the Portfolio, respectively.
(Board members who are members of the Eaton Vance organization receive no
compensation from the Fund or the Portfolio.) For the fiscal year ending August
31, 1997, it is estimated that the noninterested Directors and Trustees of the
Fund and the Portfolio will receive the following compensation in such
capacities.
<TABLE>
<CAPTION>
ESTIMATED ESTIMATED
AGGREGATE AGGREGATE TOTAL COMPENSATION
COMPENSATION COMPENSATION FROM TRUST AND
NAME FROM FUND FROM PORTFOLIO FUND COMPLEX(1)
---- ------------ -------------- ------------------
<S> <C> <C> <C>
Donald R. Dwight .............................. $35 $90 $145,000(2)
Samuel L. Hayes, III .......................... 35 90 160,000(3)
Norton H. Reamer .............................. 35 90 145,000
John L. Thorndike ............................. 35 90 150,000
Jack L. Treynor ............................... 35 90 150,000
- ----------
<FN>
(1) The Eaton Vance fund complex consists of 217 registered investment companies or series thereof.
(2) Includes $35,312 of deferred compensation.
(3) Includes $37,500 of deferred compensation.
</TABLE>
Prior to August 31, 1996, the Directors of the Fund were Dr. John J.
Maggio, Philip C. Smith and Dr. Eugene E. Weise, and their combined
compensation for the calendar year 1995 was $2,750.
BOARD MEMBERS AND OFFICERS
Except as indicated, each individual has held the office shown or other
offices in the same company for the last five years. Unless otherwise noted, the
business address of each Board Member and officer is 24 Federal Street, Boston,
Massachusetts 02110, which is also the address of the Fund's sponsor and
manager, Eaton Vance Management ("Eaton Vance"); of Eaton Vance's wholly-owned
subsidiary, Boston Management and Research ("BMR"); of Eaton Vance's parent,
Eaton Vance Corp. ("EVC"); and of Eaton Vance's trustee, Eaton Vance, Inc.
("EV"). Eaton Vance and EV are both wholly-owned subsidiaries of EVC. Those
Board Members who are "interested persons" of the Trust, Eaton Vance, BMR, EVC
or EV as defined in the 1940 Act by virtue of their affiliation with any one or
more of the Trust, Eaton Vance, BMR, EVC or EV, are indicated by an asterisk(*).
OFFICERS AND DIRECTORS OF THE FUND
JAMES B. HAWKES (54), President and Director*
Executive Vice President of Eaton Vance, BMR, EVC and EV, and a Director of EVC
and EV. Director or Trustee and officer of various investment companies
managed by Eaton Vance or BMR.
DONALD R. DWIGHT (65), Director
President of Dwight Partners, Inc. (a corporate relations and communications
company) founded in 1988. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: Clover Mill Lane, Lyme, New Hampshire 03768
SAMUEL L. HAYES, III (61), Director
Jacob H. Schiff Professor of Investment Banking, Harvard University Graduate
School of Business Administration. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: Harvard University Graduate School of Business Administration,
Soldiers Field Road, Boston, Massachusetts 02163
NORTON H. REAMER (60), Director
President and Director, United Asset Management Corporation, (a holding company
owning institutional investment management firms); Chairman, President and
Director, UAM Funds (mutual funds). Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: One International Place, Boston, Massachusetts 02110
JOHN L. THORNDIKE (69), Director
Director, Fiduciary Company Incorporated. Director or Trustee of various
investment companies managed by Eaton Vance or BMR.
Address: 175 Federal Street, Boston, Massachusetts 02110
JACK L. TREYNOR (66), Director
Investment Adviser and Consultant. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: 504 Via Almar, Palos Verdes Estates, California 90274
OFFICERS
SAMUEL D. ISALY (51), Vice President
President of G/A Capital Management, Inc. since 1989; Senior Vice President of
S.G. Warburg & Co., Inc. from 1986 through 1989; and President of Gramercy
Associates, a health care industry consulting firm, from 1983 through 1986.
Address: G/A Capital Management, Inc., 41 Madison Avenue, 40th Floor, New
York, NY 10010-2202
JAMES L. O'CONNOR (51), Treasurer
Vice President of Eaton Vance, BMR and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
THOMAS OTIS (64), Secretary
Vice President and Secretary of Eaton Vance, BMR, EVC and EV. Officer of various
investment companies managed by Eaton Vance or BMR.
JANET E. SANDERS (60), Assistant Treasurer and Assistant Secretary
Vice President of Eaton Vance, BMR and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
A. JOHN MURPHY (33), Assistant Secretary
Assistant Vice President of BMR, Eaton Vance and EV since March 1, 1994;
employee of Eaton Vance since March 1993. State Regulations Supervisor, The
Boston Company (1991-1993) and Registration Specialist, Fidelity Management &
Research Co. (1986-1991). Officer of various investment companies managed by
Eaton Vance or BMR. Mr. Murphy was elected Assistant Secretary of the Trust on
March 27, 1995.
ERIC G. WOODBURY (39), Assistant Secretary
Vice President of Eaton Vance since February 1993; formerly, associate attorney
at Dechert, Price & Rhoads and Gaston & Snow. Officer of various investment
companies managed by Eaton Vance or BMR. Mr. Woodbury was elected Assistant
Secretary of the Trust on June 19, 1995.
OFFICERS AND TRUSTEES OF THE PORTFOLIO
The Trustees and officers of the Portfolio are identical to the Directors
and officers of the Fund.
Messrs. Thorndike (Chairman), Hayes and Reamer are members of the Special
Committee of the Board of the Fund and Portfolio. The purpose of the Special
Committee is to consider, evaluate and make recommendations to the full Board
concerning (i) all contractual arrangements with service providers to the Fund
or Portfolio, including administrative services, transfer agency, custodial and
fund accounting and distribution services, and (ii) all other matters in which
Eaton Vance or its affiliates has any actual or potential conflict of interest
with the Fund or Portfolio or its shareholders or interestholders.
The Nominating Committee is comprised of four Directors who are not
"interested persons" as that term is defined under the Investment Company Act of
1940 ("noninterested Directors"). The Committee has four-year staggered terms,
with one member rotating off the Committee to be replaced by another
noninterested Director of the Fund. Messrs. Hayes (Chairman), Reamer, Thorndike
and Treynor are currently serving on the Committee. The purpose of the Committee
is to recommend to the Board nominees for the position of noninterested Director
and to assure that at least a majority of the Board of Directors is independent
of Eaton Vance and its affiliates.
Messrs. Treynor (Chairman) and Dwight are members of the Audit Committee of
the Board of Directors. The Audit Committee's functions include making
recommendations to the Board of Directors regarding the selection of the
independent certified public accountants, and reviewing with such accountants
and the Treasurer of the Fund matters relative to trading and brokerage policies
and practices, accounting and auditing practices and procedures, accounting
records, internal accounting controls, and the functions performed by the
custodian, transfer agent and dividend disbursing agent of the Fund.
Directors of the Fund who are not affiliated with an Adviser may elect to
defer receipt of all or a percentage of their annual fees in accordance with the
terms of a Trustees Deferred Compensation Plan (the "Plan"). Under the Plan, an
eligible Director may elect to have his deferred fees invested by the Fund in
the shares of one or more funds in the Eaton Vance Family of Funds, and the
amount paid to the Directors under the Plan will be determined based upon the
performance of such investments. Deferral of Directors' fees in accordance with
the Plan will have a negligible effect on the Fund's assets, liabilities, and
net income per share, and will not obligate the Fund to retain the services of
any Director or obligate the Fund to pay any particular level of compensation to
the Director. Neither the Portfolio nor the Fund has a retirement plan for its
Trustees. For information concerning the compensation expected to be earned by
the Directors of the Fund and Trustees of the Portfolio, see "Fees and Expenses"
in the Part II.
SERVICES FOR ACCUMULATION
The following services are voluntary, involve no extra charge, other than
the sales charge included in the offering price, and may be changed or
discontinued without penalty at any time.
INTENDED QUANTITY INVESTMENT -- STATEMENT OF INTENTION. If it is anticipated
that $100,000 or more of Fund shares and shares of the other continuously
offered open-end funds listed under "The Eaton Vance Exchange Privilege" in the
Prospectus will be purchased within a 13-month period, a Statement of Intention
should be signed so that shares may be obtained at the same reduced sales charge
as though the total quantity were invested in one lump sum. Shares held under
the Right of Accumulation (see below) as of the date of the Statement will be
included toward the completion of the Statement. The Statement authorizes the
Transfer Agent to hold in escrow sufficient shares (5% of the dollar amount
specified in the Statement) which can be redeemed to make up any difference in
sales charge on the amount intended to be invested and the amount actually
invested. Execution of a Statement does not obligate the shareholder to purchase
or the Fund to sell the full amount indicated in the Statement, and should the
amount actually purchased during the 13-month period be more or less than that
indicated on the Statement, price adjustments will be made accordingly. For
sales charges and other information on quantity purchases, see "How to Buy Fund
Shares" in the Prospectus. Any investor considering signing a Statement of
Intention should read it carefully.
RIGHT OF ACCUMULATION -- CUMULATIVE QUANTITY DISCOUNT. The applicable sales
charge level for the purchase of Fund shares is calculated by taking the dollar
amount of the current purchase and adding it to the value (calculated at the
maximum current offering price) of the shares the shareholder owns in his or her
account(s) in the Fund and in the other continuously offered open-end funds
listed under "The Eaton Vance Exchange Privilege" in the Prospectus. The sales
charge on the shares being purchase will then be at the rate applicable to the
aggregate amount. For example, if the shareholder owned shares valued at $80,000
of the Fund and purchased an additional $20,000 of Fund shares, the sales charge
for the $20,000 purchase would be at the rate of 3.75% of the offering price
(3.90% of the net amount invested), which is the rate applicable to single
transactions of $100,000. For sales charges on quantity purchases, see "How to
Buy Fund Shares" in the Prospectus. Shares purchased (i) by an individual, his
or her spouse and their children under the age of twenty-one and (ii) by a
trustee, guardian or other fiduciary of a single trust estate or a single
fiduciary account, will be combined for the purpose of determining whether a
purchase will qualify for the Right of Accumulation and if qualifying, the
applicable sales charge level.
For any such discount to be made available, at the time of purchase a
purchaser or any Authorized Firm which has an agreement with EVD must provide
EVD (in the case of a purchase made through an Authorized Firm) or the Transfer
Agent (in the case of an investment made by mail) with sufficient information to
permit verification that the purchase order qualifies for the accumulation
privilege. Confirmation of the order is subject to such verification. The Right
of Accumulation privilege may be amended or terminated at any time as to
purchases occurring thereafter.
PRINCIPAL UNDERWRITER
Shares of the Fund may be continuously purchased at the public offering
price through Authorized Firms which have agreements with EVD. EVD is a
wholly-owned subsidiary of Eaton Vance. The public offering price is the net
asset value next computed after receipt of the order, plus, where applicable, a
variable percentage sales charge depending upon the amount of purchase as
indicated by the sales charge table set forth in the Prospectus. Such table is
applicable to purchases of the Fund alone or in combination with purchases of
certain other funds offered by the Principal Underwriter, made at a single time
by (i) an individual, or an individual, his or her spouse and their children
under the age of twenty-one, purchasing shares for his or her or their own
account; and (ii) a trustee or other fiduciary purchasing shares for a single
trust estate or a single fiduciary account. The table is also presently
applicable to (1) purchases of Fund shares, alone or in combination with
purchases of any of the other funds offered by the Principal Underwriter through
one dealer aggregating $100,000 or more made by any of the persons enumerated
above within a thirteen-month period starting with the first purchase pursuant
to a written Statement of Intention, in the form provided by the Principal
Underwriter, which includes provisions for a price adjustment depending upon the
amount actually purchased within such period (a purchase not made pursuant to
such Statement may be included thereunder if the Statement if filed within 90
days of such purchase); or (2) purchases of the Fund pursuant to the Right of
Accumulation and declared as such at the time of purchase.
Subject to the applicable provisions of the 1940 Act, the Fund may issue
shares at net asset value in the event that an investment company (whether a
regulated or private investment company or a personal holding company) is merged
or consolidated with or acquired by the Fund. Normally no sales charges will be
paid in connection with an exchange of Fund shares for the assets of such
investment company.
Shares may be sold at net asset value to any officer, director, trustee,
general partner or employee of the Fund, the Portfolio or any investment company
for which Eaton Vance or BMR acts as investment adviser, any investment
advisory, agency, custodial or trust account managed or administered by Eaton
Vance or by any parent, subsidiary or other affiliate of Eaton Vance, or any
officer, director, trustee or employee of any parent, subsidiary or other
affiliate of Eaton Vance. The terms "officer," "director," "trustee," "general
partner" or "employee" as used in this paragraph include any such person's
spouse and minor children, and also retired officers, directors, trustees,
general partners and employees and their spouses and minor children. Shares may
also be sold at net asset value to registered representatives and employees of
certain investment dealers and to such person's spouses and children under the
age of 21 and their beneficial accounts.
The Fund reserves the right to suspend or limit the offering of shares to
the public at any time.
EVD acts as principal in selling shares of the Fund under the distribution
agreement with the Fund. The distribution agreement is renewable annually by the
Fund's Board of Directors (including a majority of its Directors who are not
interested persons of EVD or the Fund), may be terminated on six months' notice
by either party, and is automatically terminated upon assignment. EVD
distributes Fund shares on a "best efforts" basis under which it is required to
take and pay for only such shares as may be sold. EVD allows Authorized Firms
discounts from the applicable public offering price which are alike for all
Authorized Firms. See "How to Buy Fund Shares" in the Prospectus for the
discounts allowed to Authorized Firms. EVD may allow, upon notice to all
Authorized Firms, discounts up to the full sales charge during the periods
specified in the notice. During periods when the discount includes the full
sales charge, such Authorized Firms may be deemed to be underwriters as that
term is defined in the Securities Act of 1933.
DISTRIBUTION PLAN
As described in the Prospectus, in addition to the fees and expenses
described herein, the Fund finances distribution activities and bears expenses
associated with the distribution of its shares pursuant to a distribution plan
(the "Plan") designed to meet the requirements of Rule 12b-1 under the 1940 Act.
Pursuant to such Rule, the Plan has been approved by the Board of Directors
of the Fund (including a majority of those Directors who are not interested
persons of the Fund and who have no direct or indirect financial interest in the
operation of the Plan). Under the Plan, the President or a Vice President of the
Fund shall provide to the Directors for their review, and the Directors shall
review at least quarterly, a written report of the amounts expended under the
Plan and the purposes for which such expenditures were made. The Plan remains in
effect from year to year provided such continuance is approved at least annually
by a vote of the Board of Directors and by a majority of those Directors who are
not interested persons of the Fund and who have no direct or indirect financial
interest in the operation of the Plan. The Plan may not be amended to increase
materially the payments described therein without approval of the shareholders
of the Fund, and all material amendments of the Plan must also be approved by
the Directors in the manner described above. The Plan may be terminated at any
time by vote of a majority of the Directors who are not interested persons of
the Fund and who have no direct or indirect financial interest in the operation
of the Plan or by a vote of a majority of the outstanding voting securities of
the Fund. If the Plan is terminated or not continued in effect, the Fund has no
obligation to reimburse the Principal Underwriter for amounts expended by the
Principal Underwriter in distributing shares of the Fund. So long as the Plan is
in effect, the selection and nomination of Directors who are not interested
persons of the Fund shall be committed to the discretion of the Directors who
are not such interested persons. The Directors have determined that in their
judgment there is a reasonable likelihood that the Plan will benefit the Fund
and its shareholders.
The Plan is intended to compensate the Principal Underwriter for its
distribution services to the Fund by paying the Principal Underwriter monthly
distribution fees in connection with the sale of shares of the Fund.
PERFORMANCE INFORMATION
The table below indicates the cumulative and average annual total return on
a hypothetical investment of $1,000 in the Fund covering the ten-, five- and
one-year periods ended August 31, 1995.
VALUE OF $1,000 INVESTMENT
<TABLE>
<CAPTION>
TOTAL RETURN TOTAL RETURN
VALUE OF EXCLUDING SALES CHARGE INCLUDING SALES CHARGE
INVESTMENT INVESTMENT AMOUNT OF INVESTMENT ------------------------ ------------------------
PERIOD DATE INVESTMENT* ON 8/31/95 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
10 Years Ended
8/31/95 8/31/85 $952.50 $4,263.29 347.59% 16.17% 326.33% 15.60%
5 Years Ended
8/31/95 8/31/90 $952.50 $2,399.44 151.91% 20.30% 139.94% 19.13%
1 Year Ended
8/31/95 8/31/94 $952.50 $1,315.69 38.13% 38.13% 31.57% 31.57%
</TABLE>
Past performance is not indicative of future results. Investment return and
principal value will fluctuate; shares, when redeemed, may be worth more or less
than their original cost.
*Initial investment less current maximum sales charge of 4.75%.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of July 18, 1996, the Directors and officers of the Fund, as a group,
owned in the aggregate less than 1% of the outstanding shares of the Fund. As of
July 18, 1996, Donaldson Lufkin & Jenrette Securities Corp., c/o Pershing
Div. - Transfer Dept., 5th Floor, Jersey City, NJ 07303-2052 and National
Financial Services Corp., New York, NY 10281 were the record owners of
approximately 7.92% and 6.22%, respectively, of the outstanding shares, which
they held on behalf of their customers who are the beneficial owners of such
shares, and as to which it has voting power under certain limited circumstances.
To the knowledge of the Fund, no person owns of record or beneficially 5% or
more of the Fund's outstanding shares as of such date.
OTHER INFORMATION
The Fund was incorporated in Maryland on November 7, 1984. On August 30,
1996, the Fund changed its name from Medical Research Investment Fund, Inc.
INDEPENDENT ACCOUNTANTS
For the fiscal year ending August 31, 1996 and the audit of the Fund for
such year, Tait, Weller & Baker, Two Penn Center, Suite 700, Philadelphia,
Pennsylvania, has served as the Fund's independent accountants. For future
fiscal periods, Coopers & Lybrand L.L.P., One Post Office Square, Boston,
Massachusetts, will be the independent accountants of the Fund, providing audit
services, tax return preparation, and assistance and consultation with respect
to the preparation of filings with the Commission. Coopers & Lybrand Chartered
Accountants, Toronto, Canada, are the independent accountants for the Portfolio.
FINANCIAL STATEMENTS
At the time of the audit of the Portfolio, its name was Global Health
Sciences Portfolio. The financial statements of the Fund, which are included in
the Fund's Unaudited Semi-Annual Report of February 28, 1996 and the Fund's
Annual Report to Shareholders dated August 31, 1995, are incorporated by
reference into this SAI and have been so incorporated in reliance on the report
of Tait, Weller & Baker, independent accountants, as experts in accounting and
auditing.
Registrant incorporates by reference the unaudited financial information
for the Fund for the six months ended February 28, 1996 filed with the
Commission on or about April 30, 1996, and the audited financial information for
the Fund for the fiscal year ended August 31, 1995 (included in PEA #14)
(Accession No. 0000760110-95-000008), as previously electronically filed with
the Commission.
<PAGE>
GLOBAL HEALTH SCIENCES PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 3, 1996
ASSETS:
Cash ..................................................... $100,010
Deferred organization expenses ........................... 12,000
--------
Total assets ......................................... $112,010
LIABILITIES:
Accrued organization expenses ............................ 12,000
--------
NET ASSETS ................................................... $100,010
========
NOTES:
(1) Global Health Sciences Portfolio (the "Portfolio") was organized as a New
York Trust on March 26, 1996 and has been inactive since that date, except
for matters relating to its organization and registration as an investment
company under the Investment Company Act of 1940 and the sale of interests
therein at the purchase price of $100,000 to Boston Management & Research
and the sale of interest therein at the purchase price of $10 to Eaton Vance
Management (the "Initial Interests").
(2) Organization expenses are being deferred and will be amortized on a
straight-line basis over a period not to exceed five years, commencing on
the effective date of the Portfolio's initial offering of its interests. The
amount paid by the Portfolio on any withdrawal by the holders of the Initial
Interests of any of the respective Initial Interests will be reduced by a
portion of any unamortized organization expenses, determined by the
proportion of the amount of the Initial Interests withdrawn to the Initial
Interests then outstanding.
(3) At 4:00 p.m., New York City time, on each business day of the Portfolio, the
value of an investor's interest in the Portfolio is equal to the product of
(i) the aggregate net asset value of the Portfolio multiplied by (ii) the
percentage representing tht investor's share of the aggregate interest in
the Portfolio effective for that day.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Investors of
Global Health Sciences Portfolio:
We have audited the accompanying statement of assets and liabilities of Global
Health Sciences Portfolio (a New York Trust) as of June 3, 1996. This financial
statement is the responsibility of the Portfolio's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. 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, the financial statement referred to above presents fairly, in
all material respects, the financial position of Global Health Sciences
Portfolio as of June 3, 1996, in conformity with generally accepted accounting
principles.
/s/ Coopers & Lybrand Chartered Accountants
--------------------------------------
Coopers & Lybrand Chartered Accountants
Toronto, Ontario
June 21, 1996
<PAGE>
EV TRADITIONAL
WORLDWIDE HEALTH
SCIENCES FUND, INC.
[LOGO]
STATEMENT OF
ADDITIONAL INFORMATION
SEPTEMBER 3, 1996
EV TRADITIONAL
WORLDWIDE HEALTH SCIENCES FUND, INC.
24 FEDERAL STREET
BOSTON, MA 02110
- ------------------------------------------------------------------------------
SPONSOR AND MANAGER OF EV TRADITIONAL WORLDWIDE HEALTH SCIENCES FUND, INC.
ADMINISTRATOR OF WORLDWIDE HEALTH SCIENCES PORTFOLIO
Eaton Vance Management, 24 Federal Street, Boston, MA 02110
ADVISER OF WORLDWIDE HEALTH SCIENCES PORTFOLIO
G/A Capital Management, Inc., 41 Madison Avenue, 40th Floor
New York, NY 10010-2202
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc., 24 Federal Street, Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company, 89 South Street, Boston, MA 02111
TRANSFER AGENT
First Data Investor Services Group, P.O. Box 5123, Westborough, MA 01581-5123
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P., One Post Office Square, Boston, MA 02109
T- SAI
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements (included in Parts A and B):
Per Share Data and Ratios (Part A)
Report of Independent Accountants (Part B)
Statement of Assets and Liabilities (Part B)
Portfolio of Investments in Securities (Part B)
Statement of Operations (Part B)
Statement of Changes in Net Assets (Part B)
Notes to Financial Statements (Part B)
(b) Exhibits:
1 Copy of Articles of Incorporation dated November
5, 1984; Exhibit 1 to Pre-Effective Amendment
No. 1 to Form N-1A Registration Statement No.
2-95103.
2 Copy of By-Laws; Exhibit 2 to Pre-Effective
Amendment No. 1 to Form N-1A Registration
Statement No. 2-95103.
3 None.
4 Copy of Specimen copy of Share Certificate;
Exhibit 4 to Pre-Effective Amendment No. 1 to
Form N-1A Registration Statement No. 2-95103.
5(a) Copy of Investment Advisory Agreement between
Registrant and Medical Research Management
Group, Inc., dated August 10, 1985; Exhibit 5 to
Post-Effective Amendment No. 1 to Form N-1A
Registration Statement No. 2-95103.
5(b) Copy of Investment Advisory Agreement between
Registrant and G/A Capital Management, Inc.
dated August 17, 1989; Exhibit 5(b) to
Post-Effective Amendment No. 9 to Form N-1A
Registration Statement No. 2-95103.
5(c) Management Contract between Registrant and Eaton
Vance Management dated July 17, 1996 filed
herewith.
6(a) Copy of Distribution Agreement between
Registrant and Medical Research Management
Group, Inc., dated August 10, 1985, as amended
on June 25, 1986; Exhibit 6 to Post-Effective
Amendment No. 3.
6(b) Copy of Distribution Agreement between
Registrant and Capstone Asset Planning Company
dated April 21, 1988; Exhibit 6(b) to
Post-Effective Amendment No. 5 to Form N-1A
Registration Statement No. 2-95103.
6(c) Distribution Agreement between Registrant and
Eaton Vance Distributors, Inc. dated July 17,
1996 filed herewith.
7 The Securities and Exchange Commission has
granted the Eaton Vance Group of Funds an
exemptive order that permits them to enter into
deferred compensation arrangements with its
independent Trustees. See in the Matter of
Capital Exchange Fund, Inc., Release No.
IC-20671 (November 1, 1994).
8(a)(1) Custodian Agreement between Registrant and
Provident National Bank, dated August 10, 1985,
is incorporated herein by reference to
Post-Effective Amendment No. 1 filed March 27,
1986.
8(a)(2) Copy of Custodian Agreement between Registrant
and The First Jersey National bank dated June 3,
1988; Exhibit 8(a)(2) to Post-Effective
Amendment No. 5 to Form N-1A Registration
Statement No. 2-95103.
8(b)(1) Sub-Custodian Agreement between Provident
National Bank and The Chase Manhattan Bank, N.A.
dated August 10, 1985 is incorporated herein by
reference to Post-Effective Amendment No. 2
filed October 28, 1986.
8(b)(2) Form of Sub-Custodian Agreement among the
Registrant, Chase Manhattan Bank, N.A. and The
First Jersey National Bank dated June, 1988;
Exhibit 8(b)(2) to Post-Effective Amendment No.
5 to Form N-1A Registration Statement No.
2-95103.
9(a)(1) Administration Agreement between Registrant and
Provident Institutional Management Corporation,
dated August 10, 1985, is incorporated herein by
reference to Post-Effective Amendment No. 1
filed March 27, 1986.
9(a)(2) Copy of Administration Agreement between the
Registrant and Capstone Asset Management Company
dated March 1, 1988; Exhibit 9(a)(2) to
Post-Effective Amendment No. 5 to Form N-1A
Registration Statement No. 2-95103.
9(b)(1) Transfer Agency Agreement between Registrant and
Provident Financial Processing Corporation,
dated August 10, 1985, is incorporated herein by
reference to Post-Effective Amendment No. 1
filed March 27, 1986.
9(b)(2) Copy of Agency Agreement between the Registrant
and Capstone Financial Services, Inc. dated
April 21, 1988; Exhibit 9(b)(2) to
Post-Effective Amendment No. 5 to Form N-1A
Registration Statement No. 2-95103.
10 Opinion and consent of counsel; Exhibit 10 to
Post-Effective Amendment No. 12 to Form N-1A
Registration Statement No. 2-95103.
11(a)(1) Consent of Coopers & Lybrand; Exhibit 11(a)(1)
to Post-Effective Amendment No. 5 to Form N-1A
Registration Statement No. 2-95103.
11(a)(2) Consent of Price Waterhouse; Exhibit 11(a)(2) to
Post-Effective Amendment No. 5 to Form N-1A
Registration Statement No. 2-95103.
11(a)(3) Consent of Tait, Weller & Baker on behalf of
Medical Research Investment Fund, Inc. filed
herewith.
11(a)(4) Consent of Coopers & Lybrand on behalf of
Worldwide Health Sciences Portfolio filed
herewith.
12 None.
13 Agreement made in consideration of providing
initial capital is incorporated herein by
reference to Post-Effective Amendment No. 2
filed October 28, 1986.
14 None.
15(a)(1) Rule 12b-1 Plan as amended on June 25, 1986 is
incorporated herein by reference to
Post-Effective Amendment No. 3 filed December
30, 1986.
15(a)(2) Copy of Service and Distribution Plan as amended
on April 21, 1988; Exhibit 15(a)(2) to
Post-Effective Amendment No. 5 to Form N-1A
Registration Statement No. 2-95103.
15(a)(3) Copy of Service and Distribution Plan as amended
on May 3, 1993; Exhibit 15(a)(3) to
Post-Effective Amendment No. 12 to Form N-1A
Registration Statement No. 2-95103.
15(a)(4) Distribution Plan dated July 17, 1996 filed
herewith.
15(b)(1) Form of Service Agreement is incorporated herein
by reference to Post-Effective Amendment No. 2
filed October 28, 1986.
15(b)(2) Form of Service Agreement, as amended; Exhibit
15(b)(2) to Post-Effective Amendment No. 5 to
Form N-1A Registration Statement No. 2-95103.
15(c)(1) Form of Selected Dealers Agreement is
incorporated herein by reference to
Post-Effective Amendment No. 2 filed October 28,
1986.
15(c)(2) Form of Selling Group Agreement; Exhibit
15(c)(2) to Post-Effective Amendment No. 5 to
Form N-1A Registration Statement No. 2-95103.
16 Schedule for Computation of Performance
Quotations filed herewith.
Item 25. Persons Controlled by or under Common Control with Registrant
None.
Item 26. Number of Holders of Securities
Number of Record Holders
Title of Class as of July 18, 1996
-------------- -------------------
Shares of common stock 5,661
par value $.001
Item 27. Indemnification
Article VII (3) of the Registrant's Articles of Incorporation,
incorporated by reference as Exhibit 1 hereto, and Article VI, Section II of the
Registrant's By-Laws incorporated by reference as Exhibit 2 hereto, provide for
the indemnification of the Registrant's principal underwriter, custodian, and
transfer agent. In no event will the Registrant indemnify any of its Directors,
officers, employees, or agents against any liability to which such person would
otherwise be subject by reason of his willful misfeasance, bad faith, or gross
negligence in the performance of his duties, or by reason of his reckless
disregard of the duties involved in the conduct of his office or under his
agreement with the Registrant. The Registrant will comply with Rule 484 under
the Securities Act of 1933 and the Release No. 11330 under the Investment
Company Act of 1940 in connection with any indemnification.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to Directors, officers, and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a Director, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such Director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issues.
Item 28. Business and Other Connections of Investment Adviser
Uniform Form ADV (File No. 801-34429) for G/A Capital Management, Inc. iS
hereby incorporated herein byreference.
Item 29. Principal Underwriters
(a) The principal underwriter of the Registrant, Capstone Asset Planning
Company, also acts as principal underwriter for Capstone Fixed Income Series,
Inc. - Capstone Government Income Fund and Capstone Intermediate Government Fund
- - Capstone Growth Fund, Inc.; and Capstone International Series Trust - Capstone
New Zealand Fund and Capstone Nikko Japan Fund.
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
- ----------------- ---------------------- ---------------------
Dan E. Watson ........... Chairman of the Board --
and Director
Edward L. Jaroski ....... President and Director Vice President
Leticia N. Jaroski....... Vice President --
Janet K. Roberts ....... Assistant Vice President --
Iris R. Clay ....... Assistant Vice President Secretary
Linda G. Giuffre ....... Treasurer Treasurer
- ----------------------
* 5847 San Felipe, Suite 4100, Houston, Texas 77057
Item 30. Location of Accounts and Records
G/A Capital Management, Inc., the Investment Adviser to the Registrant, 41
Madison Avenue, 40th floor, New York, New York 10010-2202; Capstone Asset
Management Company, the Administrator of the Registrant, 5847 San Felipe, Suite
4100, Houston, Texas 77057; Fifth Third Bank, the Custodian of the Registrant,
Fifth Third Center, Cincinnati, Ohio 45263; and Fund/Plan Services, Inc., the
transfer agent of the Registrant, 2 W. Elm Street, Conshohocken, Pennsylvania
19428, maintain physical possession of each account, book or other document
required to be maintained by Section 31(a) of Investment Company Act of 1940 and
the rules promulgated thereunder.
Item 31. Management Services
Not applicable
Item 32. Undertakings
Not applicable
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement or Amendment to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, and State of New York on the 17th day
of July, 1996.
MEDICAL RESEARCH INVESTMENT FUND, INC.
By: /s/ Samuel D. Isaly
------------------------------
Samuel D. Isaly, President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signatures Title Date
---------- ----- ----
President (Principal Executive
Officer) and Director July 17, 1996
/s/ Samuel D. Isaly
- -------------------
Samuel D. Isaly
Treasurer (Principal
Financial and
Accounting Officer) July 17, 1996
/s/ Linda G. Giuffre
- -------------------
Linda G. Giuffre
Director July 17, 1996
/s/ John J. Maggio
- -------------------
John J. Maggio
Director July 17, 1996
/s/ Philip C. Smith
- -------------------
Philip C. Smith
Director July 17, 1996
/s/ Eugene E. Weise
- -------------------
Eugene E. Weise
<PAGE>
SIGNATURES
Worldwide Health Sciences Portfolio has duly caused this Amendment to
the Registration Statement on Form N-1A of Medical Research Investment Fund,
Inc. to be signed on its behalf by the undersigned, thereunto duly authorized,
in Hamilton, Bermuda on the 24th day of June, 1996.
WORLDWIDE HEALTH SCIENCES PORTFOLIO
By: /s/ James B. Hawkes
------------------------------
James B. Hawkes, President
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signatures Title Date
---------- ----- ----
President, Principal Officer and
Trustee June 24, 1996
/s/ James B. Hawkes
- ------------------------
James B. Hawkes
Treasurer, Principal Financial
and Accounting Officer and
Trustee June 24, 1996
/s/ James L. O'Connor
- ------------------------
James L. O'Connor
Trustee June 24, 1996
/s/ Donald R. Dwight
- ------------------------
Donald R. Dwight
Trustee June 24, 1996
/s/ Samuel L. Hayes, III
- ------------------------
Samuel L. Hayes, III
Trustee June 24, 1996
/s/ Norton H. Reamer
- ------------------------
Norton H. Reamer
Trustee June 24, 1996
/s/ John L. Thorndike
- ------------------------
John L. Thorndike
Trustee June 24, 1996
/s/ Jack L. Treynor
- ------------------------
Jack L. Treynor
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description of Exhibits
- ------- ------------------------
5(c) Management Contract between Registrant and Eaton Vance
Management dated July 17, 1996.
6(c) Distribution Agreement between Registrant and Eaton Vance
Distributors, Inc. dated July 17, 1996.
11(a)(3) Consent of Tait, Weller & Baker on behalf of Medical Research
Investment Fund, Inc.
11(a)(4) Consent of Coopers & Lybrand on behalf of Worldwide Health
Sciences Portfolio.
15(a)(4) Distribution Plan between Registrant and Eaton Vance
Distributors, Inc. dated July 17, 1996.
16 Schedules for Computation of Performance Quotations
<PAGE>
EXHIBIT 5(c)
MANAGEMENT CONTRACT
EV TRADITIONAL WORLDWIDE HEALTH SCIENCES FUND, INC.
(currently Medical Research Investment Fund, Inc.)
AGREEMENT made this 17th day of July, 1996 between EV Traditional
Worldwide Health Sciences Fund, Inc. a Maryland corporation (the "Fund") and
Eaton Vance Management, a Massachusetts business trust (the "Manager"):
1. Duties of the Manager. The Fund hereby employs the Manager to act as
manager for and to manage and administer the affairs of the Fund, subject to the
supervision of the Directors of the Fund, for the period and on the terms set
forth in this Contract.
The Manager hereby accepts such employment, and agrees to manage and
administer the Fund's business affairs and, in connection therewith, to furnish
for the use of the Fund office space and all necessary office facilities,
equipment and personnel for administering the affairs of the Fund.
The Manager's services include monitoring and providing reports to the
Directors of the Fund concerning the investment performance achieved by the
investment adviser for Worldwide Health Sciences Portfolio, recordkeeping,
preparation and filing of documents required to comply with federal and state
securities laws, supervising the activities of the transfer agent of the Fund,
providing assistance in connection with Directors and shareholders' meetings and
other management and administrative services necessary to conduct the business
of the Fund. The Manager shall not provide any investment management or advisory
services to the Fund.
2. Compensation of the Manager. For the services, payments and
facilities to be furnished hereunder by the Manager, the Fund shall pay to the
Manager on the last day of such month a fee computed by applying the annual
asset rate applicable to that portion of the average daily net assets of the
Fund throughout the month in each Category as indicated below:
Annual
Category Average Daily Net Assets Asset Rate
- -------- ------------------------ ----------
1 less than $500 million 0.25000%
2 $500 million but less than $1 billion 0.23333%
3 $1 billion but less than $1.5 billion 0.21667%
4 $1.5 billion but less than $2 billion 0.20000%
5 $2 billion but less than $3 billion 0.18333%
6 $3 billion and over 0.16667%
The average daily net assets of the Fund will be computed in accordance with the
Articles of Organization, and any applicable votes of the Directors of the Fund.
In case of initiation or termination of this Contract during any month, the fee
for that month shall be reduced proportionately on the basis of the number of
calendar days during which it is in effect and the fee shall be computed upon
the average net assets for the business days it is so in effect for that month.
The Manager may, from time to time, waive all or a part of the above
compensation.
3. Allocation of Charges and Expenses. It is understood that the Fund
will pay all its expenses other than those expressly stated to be payable by the
Manager hereunder, which expenses payable by the Fund shall include, without
implied limitation, (i) expenses of maintaining the Fund and continuing its
existence, (ii) registration of the Fund under the Investment Company Act of
1940, (iii) commissions, fees and other expenses connected with the purchase or
sale of securities and other investments, (iv) auditing, accounting and legal
expenses, (v) taxes and interest, (vi) governmental fees, (vii) expenses of
issue, sale, repurchase and redemption of shares, (viii) expenses of registering
and qualifying the Fund and its shares under federal and state securities laws
and of preparing and printing prospectuses for such purposes and for
distributing the same to shareholders and investors, and fees and expenses of
registering and maintaining registrations of the Fund and of the Fund's
principal underwriter, if any, as broker-dealer or agent under state securities
laws, (ix) expenses of reports and notices to shareholders and of meetings of
shareholders and proxy solicitations therefor, (x) expenses of reports to
governmental officers and commissions, (xi) insurance expenses, (xii)
association membership dues, (xiii) fees, expenses and other disbursements, if
any, of custodians and sub-custodians for all services to the Fund (including
without limitation safekeeping of funds, securities and other investments,
keeping of books and accounts and determination of net asset value), (xiv) fees,
expenses and disbursements of transfer agents, dividend disbursing agents,
shareholder servicing agents and registrars for all services to the Fund, (xv)
expenses of servicing shareholder accounts, (xvi) any direct charges to
shareholders approved by the Directors of the Fund, (xvii) compensation and
expenses of Directors of the Fund who are not members of the Manager's
organization, (xviii) all payments to be made and expenses to be assumed by the
Fund pursuant to any one or more distribution plans adopted by the Fund pursuant
to Rule 12b-1 under the Investment Company Act of 1940 and (xix) such
non-recurring items as may arise, including expenses incurred in connection with
litigation, proceedings and claims and the obligation of the Fund to indemnify
its Directors and officers with respect thereto.
4. Other Interests. It is understood that Directors, officers and
shareholders of the Fund are or may be or become interested in the Manager as
Directors, officers, or employees, or otherwise and that Directors, officers and
employees of the Manager are or may be or become similarly interested in the
Fund, and that the Manager may be or become interested in the Fund as
shareholder or otherwise. It is also understood that Directors, officers and
employees of the Manager may be or become interested (as directors, trustees,
officers, employees, stockholders or otherwise) in other companies or entities
(including, without limitation, other investment companies) which the Manager
may organize, sponsor or acquire, or with which it may merge or consolidate, and
that the Manager or its subsidiaries or affiliates may enter into advisory or
management agreements or other contracts or relationships with such other
companies or entities.
5. Limitation of Liability of the Manager. The services of the Manager
of the Fund are not to be deemed to be exclusive, the Manager being free to
render services to others and engage in other business activities. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Manager, the
Manager shall not be subject to liability to the Fund or to any shareholder of
the Fund for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses which may be sustained in the purchase,
holding or sale of any security or other instrument, including options and
futures contracts.
6. Duration and Termination of the Contract. This Contract shall become
effective upon the date of its execution, and, unless terminated as herein
provided, shall remain in full force and effect to and including February 28,
1997 and shall continue in full force and effect indefinitely thereafter, but
only so long as such continuance after February 28, 1997 is specifically
approved at least annually by the Directors of the Fund.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Contract, without the payment of any
penalty, by action of its Directors, and the Fund may, at any time upon such
written notice to the Manager, terminate this Contract by vote of a majority of
the outstanding voting securities of the Fund. This Contract shall terminate
automatically in the event of its assignment.
7. Amendment of the Contract. This Contract may be amended by a writing
signed by both parties hereto, provided that no amendment to this Contract shall
be effective until approved by the vote of a majority of the Directors of the
Fund.
8. Use of the Name "Eaton Vance". The Manager hereby consents to the
use by the Fund of the name "Eaton Vance" or "EV" as part of the Fund's name;
provided, however, that such consent shall be conditioned upon the employment of
the Manager or one of its affiliates as the manager or investment adviser of the
Fund. The name "Eaton Vance" or any variation thereof may be used from time to
time in other connections and for other purposes by the Manager and its
affiliates and other investment companies that have obtained consent to the use
of the name "Eaton Vance." Eaton Vance shall have the right to require the Fund
to cease using the name "Eaton Vance" as part of the Fund's name if the Fund
ceases, for any reason, to employ the Manager or one if its affiliates as the
Fund's manager or investment adviser. Future names adopted by the Fund for
itself, insofar as such names include identifying words requiring the consent of
the Manager, shall be the property of the Manager and shall be subject to the
same terms and conditions.
9. Certain Definitions. The term "assignment" when used herein shall
have the meaning specified in the Investment Company Act of 1940 as now in
effect or as hereafter amended subject, however, to such exemptions as may be
granted by the Securities and Exchange Commission by any rule, regulation or
order. The term "vote of a majority of the outstanding voting securities of the
Fund" shall mean the vote of the lesser of (a) 67 per centum or more of the
shares of the Fund present or represented by proxy at the meeting if the holders
of more than 50 per centum of the outstanding shares of the Fund are present or
represented by proxy at the meeting, or (b) more than 50 per centum of the
outstanding shares of the Fund.
EV TRADITIONAL WORLDWIDE HEALTH EATON VANCE MANAGEMENT
SCIENCES FUND, INC.
By/s/ Samuel D. Isaly By/s/ James B. Hawkes
--------------- --------------------
President Vice President,
and not individually
<PAGE>
EXHIBIT 6(c)
DISTRIBUTION AGREEMENT
EV TRADITIONAL WORLDWIDE HEALTH SCIENCES FUND, INC.
(currently Medical Research Investment Fund, Inc.)
AGREEMENT effective as of July 17, 1996 between EV TRADITIONAL
WORLDWIDE HEALTH SCIENCES FUND, INC., hereinafter called the "Fund," a Maryland
corporation having its principal place of business in Boston in the Commonwealth
of Massachusetts and EATON VANCE DISTRIBUTORS, INC., a Massachusetts corporation
having its principal place of business in said Boston, hereinafter sometimes
called the "Principal Underwriter."
IN CONSIDERATION of the mutual promises and undertakings herein
contained, the parties hereto agree:
1. The Fund grants to the Principal Underwriter the right to purchase
shares of the Fund upon the terms hereinbelow set forth during the term of this
Agreement. While this Agreement is in force, the Principal Underwriter agrees to
use its best efforts to find purchasers for shares of the Fund.
The Principal Underwriter shall have the right to buy from the Fund the
shares needed, but not more than the shares needed (except for clerical errors
and errors of transmission) to fill unconditional orders for shares of the Fund
placed with the Principal Underwriter by financial service firms or investors as
set forth in the current Prospectus relating to shares of the Fund. The price
which the Principal Underwriter shall pay for the shares so purchased shall be
the net asset value used in determining the public offering price on which such
orders were based. The Principal Underwriter shall notify Investors Bank & Trust
Company, Custodian of the Fund ("IBT"), and The Shareholder Services Group,
Inc., Transfer Agent of the Fund ("TSSG"), or a successor transfer agent, at the
end of each business day, or as soon thereafter as the orders placed with it
have been compiled, of the number of shares and the prices thereof which the
Principal Underwriter is to purchase as principal for resale. The Principal
Underwriter shall take down and pay for shares ordered from the Fund on or
before the eleventh business day (excluding Saturdays) after the shares have
been so ordered.
The right granted to the Principal Underwriter to buy shares from the
Fund shall be exclusive, except that said exclusive right shall not apply to
shares issued in connection with the merger or consolidation of any other
investment company or personal holding company with the Fund or the acquisition
by purchase or otherwise of all (or substantially all) the assets or the
outstanding shares of any such company, by the Fund; nor shall it apply to
shares, if any, issued by the Fund in distribution of income or realized capital
gains of the Fund payable in shares or in cash at the option of the shareholder.
2. The shares may be resold by the Principal Underwriter to or through
financial service firms having agreements with the Principal Underwriter, and to
investors, upon the following terms and conditions.
The public offering price, i.e., the price per share at which the
Principal Underwriter or financial service firm purchasing shares from the
Principal Underwriter may sell shares to the public, shall be the public
offering price as set forth in the current Prospectus relating to said shares,
but not to exceed the net asset value at which the Principal Underwriter is to
purchase the shares, plus a sales charge not to exceed 7.25% of the public
offering price (the net asset value divided by .9275). If the resulting public
offering price does not come out to an even cent, the public offering price
shall be adjusted to the nearer cent.
The Principal Underwriter may also sell shares at the net asset value
at which the Principal Underwriter is to purchase such shares, provided such
sales are not inconsistent with the provisions of Section 22(d) of the
Investment Company Act of 1940, as amended from time to time (the "1940 Act"),
and the rules thereunder, including any applicable exemptive orders or
administrative interpretations or "no-action" positions with respect thereto.
The net asset value of shares of the Fund shall be determined by the
Fund or IBT, as the agent of the Fund, as of the close of regular trading on the
New York Stock Exchange on each business day on which said Exchange is open, or
as of such other time on each such business day as may be determined by the
Directors of the Fund, in accordance with the methodology and procedures for
calculating such net asset value authorized by the Directors. The Fund may also
cause the net asset value to be determined in substantially the same manner or
estimated in such manner and as of such other time or times as may from time to
time be agreed upon by the Fund and Principal Underwriter. The Fund will notify
the Principal Underwriter each time the net asset value of the Fund's shares is
determined and when such value is so determined it shall be applicable to
transactions as set forth in the current Prospectus and Statement of Additional
Information (hereafter the "Prospectus") relating to the Fund's shares.
No shares of the Fund shall be sold by the Fund during any period when
the determination of net asset value is suspended pursuant to the Articles of
Organization, except to the Principal Underwriter, in the manner and upon the
terms above set forth to cover contracts of sale made by the Principal
Underwriter with its customers prior to any such suspension, and except as
provided in the last paragraph of paragraph 1 hereof. The Fund shall also have
the right to suspend the sale of the Fund's shares if in the judgment of the
Fund conditions obtaining at any time render such action advisable. The
Principal Underwriter shall have the right to suspend sales at any time, to
refuse to accept or confirm any order from an investor or financial service
firm, or to accept or confirm any such order in part only, if in the judgment of
the Principal Underwriter such action is in the best interests of the Fund.
3. The Fund covenants and agrees that it will, from time to time, but
subject to the necessary approval of the Fund's shareholders, take such steps as
may be necessary to register the Fund's shares under the federal Securities Act
of 1933, as amended from time to time (the "1933 Act"), to the end that there
will be available for sale such number of shares as the Principal Underwriter
may reasonably be expected to sell. The Fund covenants and agrees to indemnify
and hold harmless the Principal Underwriter and each person, if any, who
controls the Principal Underwriter within the meaning of Section 15 of the 1933
Act against any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages or expense and reasonable counsel fees incurred in connection
therewith), arising by reason of any person acquiring any shares of the Fund,
which may be based upon the 1933 Act or on any other statute or at common law,
on the ground that the Registration Statement or Prospectus, as from time to
time amended and supplemented, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, unless such statement or
omission was made in reliance upon, and in conformity with, information
furnished in writing to the Fund in connection therewith by or on behalf of the
Principal Underwriter; provided, however, that in no case (i) is the indemnity
of the Fund in favor of the Principal Underwriter and any such controlling
person to be deemed to protect such Principal Underwriter or any such
controlling person against any liability to the Fund or its security holders to
which such Principal Underwriter or any such controlling person would otherwise
be subject by reason of willful misfeasance, bad faith, or gross negligence in
the performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement, or (ii) is the Fund to be liable
under its indemnity agreement contained in this paragraph with respect to any
claim made against the Principal Underwriter or any such controlling person
unless the Principal Underwriter or any such controlling person, as the case may
be, shall have notified the Fund in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon the Principal Underwriter or such controlling
person (or after such Principal Underwriter or such controlling person shall
have received notice of such service on any designated agent), but failure to
notify the Fund of any such claim shall not relieve it from any liability which
the Fund may have to the person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this paragraph. The Fund
shall be entitled to participate, at the expense of the Fund, in the defense,
or, if the Fund so elects, to assume the defense of any suit brought to enforce
any such liability, but if the Fund elects to assume the defense, such defense
shall be conducted by counsel chosen by it and satisfactory to the Principal
Underwriter or controlling person or persons, defendant or defendants in the
suit. In the event the Fund elects to assume the defense of any such suit and
retains such counsel, the Principal Underwriter or controlling person or
persons, defendant or defendants in the suit, shall bear the fees and expenses
of any additional counsel retained by them, but, in case the Fund does not elect
to assume the defense of any such suit, the Fund shall reimburse the Principal
Underwriter or controlling person or persons, defendant or defendants in the
suit, for the reasonable fees and expenses of any counsel retained by them. The
Fund agrees promptly to notify the Principal Underwriter of the commencement of
any litigation or proceedings against it or any of its officers or Directors in
connection with the issuance or sale of any of the Fund's shares.
4. The Principal Underwriter covenants and agrees that, in selling the
shares of the Fund, it will use its best efforts in all respects duly to conform
with the requirements of all state and federal laws relating to the sale of such
shares, and will indemnify and hold harmless the Fund and each of its Directors
and officers and each person, if any, who controls the Fund within the meaning
of Section 15 of the 1933 Act, against any loss, liability, damages, claim or
expense (including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees incurred
in connection therewith), arising by reason of any person acquiring any shares
of the Fund, which may be based upon the 1933 Act or any other statute or at
common law, on account of any wrongful act of the Principal Underwriter or any
of its employees (including any failure to conform with any requirement of any
state or federal law relating to the sale of such shares) or on the ground that
the registration statement or Prospectus, as from time to time amended and
supplemented, includes an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading, insofar as any such statement or omission was
made in reliance upon, and in conformity with information furnished in writing
to the Fund in connection therewith by or on behalf of the Principal
Underwriter, provided, however, that in no case (i) is the indemnity of the
Principal Underwriter in favor of any person indemnified to be deemed to protect
the Fund or any such person against any liability to which the Fund or any such
person would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the performance of its or his duties or by reason of its
or his reckless disregard of its obligations and duties under this Agreement, or
(ii) is the Principal Underwriter to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the Fund or
any person indemnified unless the Fund or such person, as the case may be, shall
have notified the Principal Underwriter in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon the Fund, the Fund or upon such person
(or after the Fund, the Fund or such person shall have received notice of such
service on any designated agent), but failure to notify the Principal
Underwriter of any such claim shall not relieve it from any liability which it
may have to the Fund or any person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this paragraph. The
Principal Underwriter shall be entitled to participate, at its own expense, in
the defense, or, if it so elects, to assume the defense of any suit brought to
enforce any such liability, but if the Principal Underwriter elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
satisfactory to the Fund, or to its officers or Directors, or to any controlling
person or persons, defendant or defendants in the suit. In the event that the
Principal Underwriter elects to assume the defense of any such suit and retains
such counsel, the Fund or such officers or Directors or controlling person or
persons, defendant or defendants in the suit, shall bear the fees and expenses
of any additional counsel retained by them or the Fund, but, in case the
Principal Underwriter does not elect to assume the defense of any such suit, it
shall reimburse the Fund, any such officers and Directors or controlling person
or persons, defendant or defendants in such suit, for the reasonable fees and
expenses of any counsel retained by them or the Fund. The Principal Underwriter
agrees promptly to notify the Fund of the commencement of any litigation or
proceedings against it in connection with the issue and sale of any of the
Fund's shares.
Neither the Principal Underwriter nor any financial service firm nor
any other person is authorized by the Fund to give any information or to make
any representations, other than those contained in the Registration Statement or
Prospectus filed with the Securities and Exchange Commission (the "Commission")
under the 1933 Act (as said Registration Statement and Prospectus may be amended
or supplemented from time to time), covering the shares of the Fund. Neither the
Principal Underwriter nor any financial service firm nor any other person is
authorized to act as agent for the Fund in connection with the offering or sale
of shares of the Fund to the public or otherwise. All such sales made by the
Principal Underwriter shall be made by it as principal, for its own account. The
Principal Underwriter may, however, act as agent in connection with the
repurchase of shares as provided in paragraph 6 below, or in connection with
"exchanges" between investment companies for which the Principal Underwriter (or
an affiliate thereof) acts as principal underwriter or investment adviser.
5(a). The Fund will pay, or cause to be paid -
(i) all the costs and expenses of the Fund, including fees and
disbursements of its counsel, in connection with the preparation and filing of
any required Registration Statement and/or Prospectus under the 1933 Act, or the
1940 Act, covering its shares and all amendments and supplements thereto, and
preparing and distributing periodic reports to shareholders (including the
expense of setting up in type any such Registration Statement, Prospectus or
periodic report);
(ii) the cost of preparing temporary and permanent share
certificates (if any) for shares of the Fund;
(iii) The cost and expenses of delivering to the Principal
Underwriter at its office in Boston, Massachusetts, all shares of the Fund
purchased by it as principal hereunder;
(iv) all the federal and state (if any) issue and/or transfer
taxes payable upon the issue by or (in the case of treasury shares) transfer
from the Fund to the Principal Underwriter of any and all shares of the Fund
purchased by the Principal Underwriter hereunder;
(v) the fees, costs and expenses of the registration or
qualification of shares of the Fund for sale in the various states, territories
or other jurisdictions (including without limitation the registering or
qualifying the Fund as a broker or dealer or any officer of the Fund as agent or
salesman in any state, territory or other jurisdiction); and
(vi) all payments to be made by the Fund pursuant to any
written plan approved in accordance with Rule 12b-1 under the 1940 Act.
(b) The Principal Underwriter agrees that, after the Prospectus (other
than to existing shareholders of the Fund) and periodic reports have been set up
in type, it will bear the expense of printing and distributing any copies
thereof which are to be used in connection with the offering of shares of the
Fund to financial service firms or investors. The Principal Underwriter further
agrees that it will bear the expenses of preparing, printing and distributing
any other literature used by the Principal Underwriter or furnished by it for
use by financial service firms in connection with the offering of the shares of
the Fund for sale to the public and any expenses of advertising in connection
with such offering.
(c) The Principal Underwriter shall be entitled to receive all
contingent deferred sales charges imposed in accordance with the Prospectus on
early redemptions of Fund shares.
6. The Fund hereby authorizes the Principal Underwriter to repurchase,
upon the terms and conditions set forth in written instructions given by the
Fund to the Principal Underwriter from time to time, as agent of the Fund and
for its account, such shares of the Fund as may be offered for sale to the Fund
from time to time.
(a) The Principal Underwriter shall notify in writing IBT and TSSG, at
the end of each business day, or as soon thereafter as the repurchases in each
pricing period have been compiled, of the number of shares repurchased for the
account of the Fund since the last previous report, together with the prices at
which such repurchases were made, and upon the request of any officer or
Directors of the Fund shall furnish similar information with respect to all
repurchases made up to the time of the request on any day.
(b) The Fund reserves the right to suspend or revoke the foregoing
authorization at any time; unless otherwise stated, any such suspension or
revocation shall be effective forthwith upon receipt of notice thereof by an
officer of the Principal Underwriter, by telegraph or by written instrument from
an officer of the Fund duly authorized by its Directors. In the event that the
authorization of the Principal Underwriter is, by the terms of such notice,
suspended for more than twenty-four hours or until further notice, the
authorization given by this paragraph 6 shall not be revived except by action of
a majority of the Directors of the Fund.
(c) The Principal Underwriter shall have the right to terminate the
operation of this paragraph 6 upon giving to the Fund thirty (30) days' written
notice thereof.
(d) The Fund agrees to authorize and direct TSSG, to pay, for the
account of the Fund, the purchase price of any shares so repurchased against
delivery of the certificates in proper form for transfer to the Fund or for
cancellation by the Fund.
(e) The Principal Underwriter shall receive no commission in respect
of any repurchase of shares under the foregoing authorization and appointment as
agent.
(f) The Fund agrees it will reimburse the Principal Underwriter, from
time to time on demand, for any reasonable expenses incurred in connection with
the repurchase of shares of the Fund pursuant to this paragraph 6.
7. If, at any time during the existence of this Agreement, the Fund
shall deem it necessary or advisable in the best interests of the Fund that any
amendment of this Agreement be made in order to comply with the recommendations
or requirements of the Commission or other governmental authority or to obtain
any advantage under Massachusetts or federal tax laws, and shall notify the
Principal Underwriter of the form of amendment which it deems necessary or
advisable and the reasons therefor, and, if the Principal Underwriter declines
to assent to such amendment, the Fund may terminate this Agreement forthwith by
written notice to the Principal Underwriter. If, at any time during the
existence of this Agreement upon request by the Principal Underwriter, the Fund
fails (after a reasonable time) to make any changes in its Articles of
Organization, or in its methods of doing business which are necessary in order
to comply with any requirement of federal law or regulations of the Commission
or of a national securities association of which the Principal Underwriter is or
may be a member, relating to the sale of the shares of the Fund, the Principal
Underwriter may terminate this Agreement forthwith by written notice to the
Fund.
8. (a) The Principal Underwriter is a corporation in the United States
organized under the laws of Massachusetts and holding membership in the National
Association of Securities Dealers, Inc., a securities association registered
under Section 15A of the Securities Exchange Act of 1934, as amended from time
to time, and during the life of this Agreement will continue to be so resident
in the United States, so organized and a member in good standing of said
Association. The Principal Underwriter covenants that it and its officers and
directors will comply with the Fund's Articles of Organization and By-Laws, and
the 1940 Act and the rules promulgated thereunder, insofar as they are
applicable to the Principal Underwriter.
(b) The Principal Underwriter shall maintain in the United States
and preserve therein for such period or periods as the Commission shall
prescribe by rules and regulations applicable to it as Principal Underwriter of
an open-end investment company registered under the 1940 Act such accounts,
books and other documents as are necessary or appropriate to record its
transactions with the Fund. Such accounts, books and other documents shall be
subject at any time and from time to time to such reasonable periodic, special
and other examinations by the Commission or any member or representative thereof
as the Commission may prescribe. The Principal Underwriter shall furnish to the
Commission within such reasonable time as the Commission may prescribe copies of
or extracts from such records which may be prepared without effort, expense or
delay as the Commission may by order require.
9. This Agreement shall continue in force indefinitely until terminated
as in this Agreement above provided, except that:
(a) this Agreement shall remain in effect for one year from the
date of its execution and shall continue in full force and effect indefinitely
thereafter, but only so long as such continuance is specifically approved at
least annually (i) by the vote of a majority of the Directors of the Fund who
are not interested persons of the Fund or of the Principal Underwriter cast in
person at a meeting called for the purpose of voting on such approval, and (ii)
by the Directors of the Fund or by vote of a majority of the outstanding voting
securities of the Fund; and
(b) that either party shall have the right to terminate this
Agreement on six (6) months' written notice thereof given in writing to the
other.
10. In the event of the assignment of this Agreement by the Principal
Underwriter, this Agreement shall automatically terminate.
11. Any notice under this Agreement shall be in writing, addressed and
delivered, or mailed postage paid, to the other party, at such address as such
other party may designate for the receipt of such notices. Until further notice
to the other party, it is agreed that the record address of the Fund and that of
the Principal Underwriter, shall be 24 Federal Street, Boston, Massachusetts
02110.
12. The services of the Principal Underwriter to the Fund hereunder are
not to be deemed to be exclusive, the Principal Underwriter being free to (a)
render similar services to, and to act as principal underwriter in connection
with the distribution of shares of, other investment companies, and (b) engage
in other business and activities from time to time.
13. The terms "vote of a majority of the outstanding voting
securities," "assignment" and "interested persons," when used herein, shall have
the respective meanings specified in the 1940 Act, subject, however, to such
exemptions as may be granted by the Commission by any rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement this
17th day of July, 1996.
EV TRADITIONAL WORLDWIDE HEALTH
SCIENCES FUND, INC.
By/s/ Samuel D. Isaly
-----------------------
President
EATON VANCE DISTRIBUTORS INC.
By/s/ James B. Hawkes
-----------------------
Vice President
<PAGE>
EXHIBIT 11(a)(3)
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the reference to our firm in the Post-Effective Amendment No.
15 to the Registration Statement, (Form N-1A) of Medical Research Investment
Fund, Inc. and to the incorporation by reference of our report dated September
25, 1995 to the Shareholders and Board of Directors of Medical Research
Investment Fund, Inc.
/s/ Tait, Weller & Baker
--------------------------
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
July 19, 1996
<PAGE>
Exhibit 11(a)(4)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in Post-Effective Amendment No. 15 to the
Registration Statement on Form N-1A (1933 Act File No. 2-95103) of Medical
Research Investment Fund, Inc. of our report dated June 21, 1996, relating to
Global Health Sciences Portfolio (now named Worldwide Health Sciences Portfolio)
appearing in the Statement of Additional Information which is part of such
Registration Statement.
/s/ Coopers & Lybrand L.L.P. Chartered Accountants
----------------------------------------------
COOPERS & LYBRAND L.L.P. Chartered Accountants
Toronto, Ontario
July 17, 1996
<PAGE>
EXHIBIT 15(A)(4)
DISTRIBUTION PLAN
OF
EV TRADTIONAL WORLDWIDE HEALTH SCIENCES FUND, INC.
(currently Medical Research Investment Fund, Inc.)
WHEREAS, EV Traditional Worldwide Health Sciences Fund, Inc. (the
"Fund") engages in business as an open-end management investment company and is
registered as such under the Investment Company Act of 1940, as amended (the
"Act");
WHEREAS, the Fund desires to adopt a new Distribution Plan pursuant to
Rule 12b-1 under the Act, pursuant to which the Fund intends to finance
activities which are primarily intended to result in the distribution and sale
of its shares and to make payments in connection with the distribution of its
shares;
WHEREAS, the Fund employs Eaton Vance Distributors, Inc., to act as
Principal Underwriter (as defined in the Act) of the shares of the Fund;
WHEREAS, the Directors of the Fund have determined that it is desirable
to amend and replace the Amended Service and Distribution Plan dated May 3, 1993
(the "Current Plan") with this Plan;
WHEREAS, the Fund intends to compensate the Principal Underwriter for
its distribution services to the Fund by paying the Principal Underwriter
monthly distribution fees in connection with the sale of shares of the Fund; and
WHEREAS, the Directors of the Fund have determined that there is a
reasonable likelihood that adoption of this Distribution Plan will benefit the
Fund and its shareholders.
NOW, THEREFORE, the Fund hereby adopts this Distribution Plan (the
"Plan") in accordance with Rule 12b-1 under the Act and containing the following
terms and conditions:
1. The Principal Underwriter will provide the Fund with such
distribution services and facilities as the Fund may from time to time consider
necessary to enhance the sale of shares of the Fund, and the Principal
Underwriter shall pay such compensation to Authorized Firms and other third
parties as it considers appropriate to encourage distribution of such shares.
2. The Fund shall pay a monthly distribution fee to the Principal
Underwriter on the last day of each month. Such distribution fee shall be in an
amount equal on an annual basis to .25% of the Fund's average daily net assets
for any fiscal year. For the purposes of this Plan, daily net assets of the Fund
shall be computed in accordance with the governing documents of the Fund and
applicable votes and determinations of the Directors of the Fund. All
distribution fees are being paid in consideration for the distribution services
and facilities to be furnished to the Fund hereunder by the Principal
Underwriter.
3. Appropriate adjustment of payments made pursuant to Section 2 of
this Plan shall be made whenever necessary to ensure that no such payment shall
cause the Fund to exceed the applicable maximum cap imposed on asset-based,
front-end and deferred sales charges by subsection (d) of Section 26 of Article
III of the Rules of Fair Practice of the National Association of Securities
Dealers, Inc. (the "NASD Rules").
4. This Plan shall not take effect until it has been approved by a
majority of (i) those Directors of the Fund who are not "interested persons" of
the Fund (as defined in the Act) and have no direct or indirect financial
interest in the operation of the Plan or any agreements related to it (the "Rule
12b-1 Directors") and (ii) all of the Directors then in office, cast in person
at a meeting (or meetings) called for the purpose of voting on this Plan.
5. Any agreements between the Fund and any person relating to this Plan
shall be in writing and shall not take effect until approved in the manner
provided for in Section 4.
6. This Plan shall continue in effect through and including April 28,
1997 and shall continue indefinitely thereafter, but only for so long as such
continuance after such date is specifically approved at least annually in the
manner provided for approval of this Plan in Section 4.
7. The persons authorized to direct the disposition of monies paid or
payable by the Fund pursuant to this Plan or any related agreement made on
behalf of the Fund shall be the President or any Vice President of the Fund.
Such persons shall provide to the Fund's Board of Directors and the Board of
Directors shall review, at least quarterly, a written report of the amounts so
expended and the purposes for which such expenditures were made.
8. This Plan may be terminated at any time by vote of a majority
of the Rule 12b-1 Directors, or by vote of a majority of the outstanding voting
securities of the Fund.
9. This Plan may not be amended to increase materially the payments to
be made by the Fund unless such amendment, if required by law, is approved by a
vote of at least a majority of the outstanding voting securities of the Fund. In
addition, all material amendments to this Plan shall be approved in the manner
provided for in Section 4.
10. While this Plan is in effect, the selection and nomination of
the Rule 12b-1 Directors shall be committed to the discretion of the Rule 12b-1
Directors.
11. The Trust shall preserve copies of this Plan and any related
agreements made by the Fund and all reports made pursuant to Section 7, for a
period of not less than six years from the date of this Plan, or of the
agreements or of such report, as the case may be, the first two years in an
easily accessible place.
12. When used in this Plan, the term "vote of a majority of the
outstanding voting securities of the Fund" shall mean the vote of the lesser of
(a) 67 per centum or more of the shares of the Fund present or represented by
proxy at the meeting if the holders of more than 50 per centum of the
outstanding shares of the Fund are present or represented by proxy at the
meeting, or (b) more than 50 per centum of the outstanding shares of the Fund.
13. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or regulation of the Securities and Exchange
Commission or otherwise, the remainder of this Plan shall not be affected
thereby.
14. This Plan shall amend, replace and be substituted for the
Current Plan as of the day Eaton Vance Distributors, Inc. begins serving as
principal underwriter of the Fund, and this Plan shall be effective as of such
time.
ADOPTED JULY 17, 1996
* * *
<PAGE>
EXHIBIT 16
<TABLE>
INVESTMENT PERFORMANCE -- EV TRADITIONAL WORLDWIDE HEALTH SCIENCES FUND, INC.
The table below indicates the total return (capital changes plus reinvestment of all distributions) on a hypothetical investment of
$1,000 in the Fund covering the 1, 5, and 10 year periods ended August 31, 1995.
<CAPTION>
VALUE OF A $1,000 INVESTMENT
VALUE OF VALUE OF TOTAL RETURN TOTAL RETURN
INVESTMENT INVESTMENT INITIAL INVESTMENT EXCLUDING SALES CHARGE INCLUDING SALES CHARGE
PERIOD DATE INVESTMENT* ON 08/31/95 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
<S> <C> <C> <C> <C> <C> <C> <C>
10 YEARS ENDED
08/31/95 08/31/85 $952.50 $4,263.29 347.59% 16.17% 326.33% 15.60%
5 YEARS ENDED
08/31/95 08/31/90 $952.50 $2,399.44 151.91% 20.30% 139.94% 19.13%
1 YEAR ENDED
08/31/95 08/31/94 $952.50 $1,315.69 38.13% 38.13% 31.57% 31.57%
Average annual total return is calculated using the following formula:
n
P(1+T) = ERV
where P = an initial investment of $1,000 **
T = average annual total return
n = number of years
ERV = ending redeemable value of $1,000 initial investment at the end of the period
Cumulative total return is calculated using the following formula:
T = ( ERV / P ) - 1
where T = cumulative total return including the maximum sales charge
ERV = ending redeemable value of $1,000 initial investment at the end of the period
P = an initial investment of $1,000 ***
* Initial investment less the current maximum sales charge of 4.75%.
** The average annual total return including the sales charge is calculated based on an initial investment of $1,000 less the
maximum initial sales charge of 4.75%.
*** The cumulative total return including the sales charge is calculated based on an initial investment of $1,000 less
maximum initial sales charge of 4.75%.
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-START> SEP-01-1994
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 13614
<INVESTMENTS-AT-VALUE> 17733
<RECEIVABLES> 33
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 17766
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 76
<TOTAL-LIABILITIES> 76
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11936
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (216)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1851
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4119
<NET-ASSETS> 17690
<DIVIDEND-INCOME> 86
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 337
<NET-INVESTMENT-INCOME> (251)
<REALIZED-GAINS-CURRENT> 1852
<APPREC-INCREASE-CURRENT> 3162
<NET-CHANGE-FROM-OPS> 4764
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 995
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 127
<NUMBER-OF-SHARES-REDEEMED> 150
<SHARES-REINVESTED> 56
<NET-CHANGE-IN-ASSETS> 4459
<ACCUMULATED-NII-PRIOR> (200)
<ACCUMULATED-GAINS-PRIOR> 996
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 139
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 339
<AVERAGE-NET-ASSETS> 13883
<PER-SHARE-NAV-BEGIN> 18.30
<PER-SHARE-NII> (0.34)
<PER-SHARE-GAIN-APPREC> 6.81
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 1.36
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 23.41
<EXPENSE-RATIO> 2.44
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-START> JUN-03-1996
<PERIOD-END> JUN-03-1996
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 100
<OTHER-ITEMS-ASSETS> 12
<TOTAL-ASSETS> 112
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 12
<TOTAL-LIABILITIES> 12
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 100
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 100
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 100
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 100
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
