|
|
|
|
|
|
|
|
|
|
|
|
|
Eaton Vance Municipals Trust
For the Funds:
(bullet) EV Traditional Connecticut Municipals Fund
(bullet) EV Traditional New Jersey Municipals Fund
(bullet) EV Traditional Pennsylvania Municipals Fund Eaton Vance
[LOGO]
Semi-Annual Shareholder Report
January 31, 1996
Table of Contents
Item Page
One-year results 2
President's letter to shareholders 3
Management Reports:
EV Traditional Connecticut Municipals Fund 4
EV Traditional New Jersey Municipals Fund 5
EV Traditional Pennsylvania Municipals Fund 6
Financial Results 7
<TABLE>
Information about your mutual fund investment
Financial data Tax data
Results for the six months
ending January 31, 1996
The
<CAPTION>
Dividends If your after-tax
paid Fund's combined equivalent
Total return by Fund NAV distribution Federal & yield
(6 months (During per share rate state tax you would
ended 1/31/96) period) at 1/31/96 at 1/31/96 rate is ... need is ...
<S> <C> <C> <C> <C> <C> <C>
EV Traditional Connecticut
Municipals Fund 7.3% $0.290 $10.53 5.46% 38.88% 8.91%
Ev Traditional New Jersey
Municipals Fund 7.5% $0.297 $10.42 5.66% 40.21% 9.44%
EV Traditional Pennsylvania
Municipals Fund 7.7% $0.295 $10.44 5.60% 37.39% 9.00%
[GRAPHICS OMMITTED IN COL 5 OF CONN. NJ & PA.]
</TABLE>
To Shareholders
The municipal bond market rallied strongly throughout 1995, gaining
back most of the losses of the previous year. Twice during the year,
the Federal Reserve lowered short-term interest rates, further buoying
the market.
Realistically, it may be difficult for the market to match last year's
gains. Still, there are many reasons to be optimistic about the
municipal bond market in 1996 and to believe that an investment in
municipal bonds represents very good value and should be a part of a
wise investor's fixed-income portfolio.+
The U.S. economy continues in its favorable pattern of slow growth and
low inflation, which are especially good signs for the municipal bond
market. Another plus for the market is the fact that if the Fed decides
to make further moves during 1996, it is more likely to lower rates than
raise them.
During 1995 the municipal market underperformed the taxable market
because of concern about the possible passage of major tax reform
legislation. Such concerns are likely to persist this year, but we at
Eaton Vance continue to believe there is little chance that significant
tax reform legislation, in the form of a flat tax or value-added tax,
will be enacted during the year.
While flat tax and other reform proposals will be debated, especially
during the Presidential campaigns, they are so controversial and
sweeping that we believe the process needed to secure agreement and
subsequent passage of a plan is years away.
At the same time, the Presidential campaigns will provide significant
impetus to proposals that should prove favorable to the bond market.
There is no doubt that the campaigns will focus attention on proposals
to balance the budget and to reduce the nation's structural deficit by
cutting expenses. Any positive results in these areas are likely to
provide additional impetus to the bond market.
These factors have combined to produce a significant opportunity for
municipal bond investors. To the extent that fears about tax reform
depress prices, investors can enter the market at a discount. To the
extent that budget reform measures improve the economy, investors may be
expected to reap the rewards through a strengthening bond market.
As always, achieving investment rewards depends on an investor's
willingness to adopt a long-term investment horizon. That's why we at
Eaton Vance believe patience is a key to successful investing.
[PHOTO OF THOMAS J. FETTER OMMITTED]
Sincerely,
/S/ Thomas J. Fetter
Thomas J. Fetter
President
March 20, 1996
+ A portion of the Portfolios' income may be subject to Federal
alternative minimum tax.
EV Traditional Connecticut Municipals Fund
Connecticut has not yet fully recovered from the last recession and,
accordingly, continues to experience economic duress in several of its
key economic sectors. Employment growth remains moderate and is not
expected to reach pre-recession levels until the end of the decade,
according to Standard & Poor's. Construc-tion activity and the trade and
service sectors have generated some job growth, but the state's
manufactur-ing sector remains in decline. Connecticut's defense
industry, which ranked sixth in the nation in defense contracts in 1989,
fell to twelfth place in 1995. Finally, the insurance industry, long an
important segment of the state's financial sector, experienced further
downsizing. The industry restructured to meet the challenges of
increasing competition and the likely prospect of health care reforms in
coming years. Tourism remained an area of strong growth. Southeastern
Connecticut maintains good momentum due to increased tourism and a jump
in the number of visitors to Foxwoods Casino.
Despite its slow recovery, Connecticut enjoys very high wealth levels
and maintains generally satisfactory financial results. In the state's
1996-97 biennial budget, the administration and legislature are
attempting to control the costs of social services, which have risen
sharply in recent years. The budget provides structural changes that
should lead to long-term savings. Meanwhile, while ongoing budgetary
pressures remain, fiscal 1996 revenues should receive a boost from the
recent tax amnesty on income, sales, and corporate taxes.
Portfolio Overview
[GRAPHIC OF CONNECTICUT OMMITTED]
Based on market value as of January 31, 1996
Number of issues 98
Average quality AA-
Investment grade 99.5%
Effective maturity 21.4 yrs.
Largest sectors:
Healthcare (non hospital) 12.3%
Insured - hospitals 11.2*
Housing 10.5
Education 9.1
Solid waste 8.1
* Private insurance does not remove the market risk associated with
this investment.
[PHOTO OF NICOLE ANDERES OMMITTED]
"Recent trades in this Portfolio have focused on adding value by
capitalizing on our excellent, in-house research capabilities. Devoting
ourselves to in-depth credit reviews, we have been able to invest in
higher-yielding securities without compromising our strict credit
standards.
"Adding value through special situation offerings is time- intensive
and, upon close scrutiny, many situations fail to meet our criteria.
However, one of the hallmarks of professional management is providing
shareholders the benefit of more sophistocated opportunities than the
generic insured municipal market may offer. Such research-driven
investments have been a special focus of the our strategy in recent
months."
Nicole Anderes - Portfolio Manager
[GRAPHIC OF MEDICAL SYMBOL OMMITTED]
Your investment at work
Connecticut Higher
Education Facilities Authority
Bridgeport Hospital
The Connecticut Higher Education Facilities Authority issued these bonds
for Bridgeport Hospital. Despite the guarantee of a second tier insurer,
these bonds have modestly outperformed the market since their issuance
in early December, 1995. Initially priced at a 45 basis point premium to
the high-grade market, the bonds recently have commanded bids in the
secondary market at only a 35 basis point premium. When investing in
issues insured by second tier insurers, we typically review the
underlying credit as if the bonds were not insured. After a
comprehensive review, we felt comfortable with the Hospital's own
credit, given its dominant presence in the City, its pending affiliation
with Yale-New Haven Hospital, its recent profitability, and its strong
foundation-based financial support.
EV Traditional New Jersey Municipals Fund
New Jersey registered mediocre economic growth in 1995, especially when
compared to the robust gains of the previous year. Sluggish consumer
spending, a lackluster real estate market, and weak demand in the
manufacturing sector combined to dampen the economy. Despite a
significant decline in interest rates, home construction showed little
sign of rebounding, with only about 23,000 new housing units authorized
in 1995, the lowest number since 1992. Weakness was especially evident
in manufacturing, financial services, and utilities. Fortunately, job
losses in those sectors were offset by additions among retail trade,
business services, and healthcare providers. Overall employment gains
totalled over 40,000 in 1995, well short of the 71,000 increase in 1994,
but enough to push the state unemployment rate below 6% at year-end.
New Jersey has felt the impact of income tax cuts - 30% over two years -
that threatens revenues and pushes many expenditures to the local level.
While the state budgets have been generally successful, tighter budgets
have left little margin for error. Sales tax and operating revenues have
remained soft, while social expenditures such as welfare, health care
and public safety have continued to post increases. To ease these
budgetary pressures, the administration and legislature have targeted
certain areas for savings, including the possibility of outsourcing
selected human services.
[GRAPHIC OF NEW JERSEY OMITTED]
Portfolio Overview
Based on market value as of January 31, 1996
Number of issues 125
Average quality A
Investment grade 86.3%
Effective maturity 11.3 yrs.
Largest sectors:
General obligations 13.5%
Transportation 12.0
Industrial development
/pollution control 8.3
Hospitals 7.4
Solid waste 6.9
"The market for New Jersey municipal bonds continues to feature strong
demand, with little new issuance coming to market. I focused the
Portfolio's investments increasingly on utilities - electric, gas, water
and sewer. Another large weighting for the Portfolio was the Port
Authority of New York and New Jersey, a strong credit backed by user
fees from a diverse range of services.
"Because of the impact of income tax cuts on the state and localities, I
generally pared back general obligations and lease bonds. I also cut
back on selected solid waste bonds that may soon face a cash flow
crisis. The failure of the courts to uphold flow control provisions
could mean that some of these facilities may soon be hard-pressed to
meet interest payments. Finally, improving call protection continued to
be an important theme for the Portfolio. As bonds are called investors
typically must reinvest at less attractive yields. Maintaining a good
average call protection helps avoid an untimely interruption of income."
Robert B. MacIntosh - Portfolio Manager
[PICTURE OF ROBERT B. MACINTOSH OMMITTED]
Your investment at work
New Jersey Health Care Facilities Financing Authority
Deborah Heart & Lung Center
[GRAPHIC OF MEDICAL SYMBOL OMMITTED]
Deborah Heart and Lung Center owns and operates a 155-bed acute care
hospital in Browns Mills, New Jersey offering pulminary and cardiac
care. The facility has been a pioneer in performing outpatient
catheterizations within the state, and currently performs more open
heart procedures than any other New Jersey hospital. The Institute
maintains teaching affiliations with the University of Medicine and
Dentistry of New Jersey and is widely-known for its intensive research
efforts.
The proceeds of these revenue bonds were used to finance the
construction of additions to the Center's hospital facilities, to
purchase equipment related to the project, and to refund a previous
issue (1978) of the Institute. Carrying an attractive 6.3% coupon, the
bonds represent recent efforts of the Portfolio to seek opportunities in
smaller, lower investment-grade issues.
EV Traditional Pennsylvania Municipals Fund
Pennsylvania's economy advanced unevenly in 1995, with unemployment
hovering well above the national level. The commonwealth continued to
lose manufacturing jobs while gaining in the service sectors. According
to the Bureau of Labor and Industry, manufacturing shed 14,000 jobs
during the year while the various service sectors added 19,500.
Pennsylvania manufacturing continues to suffer from the common-wealth's
reputation as a high cost region. The area's defense industry was dealt
numerous setbacks, with the Pentagon's closure of the Philadelphia Naval
Shipyard as well as the job cuts resulting from the Lockheed-Martin
merger. On a more positive note, technology and services, led by health
care and finance, were responsible for creating the majority of new
jobs. Interestingly, while growth in the major metropolitian areas of
Pittsburgh and Philadelphia lagged the nation, lower-cost regions, such
as central Pennsylvania, matched the growth of the industrial states.
Despite being caught in a changing global economy and facing rising
costs attributed to health care and public safety, Pennsylvania has
maintained relatively stable finances. The commonwealth has benefited
from sound fiscal management and conservative financial practices.
Moreover, Pennsylvania maintains a moderate debt burden, which, together
with budgetary controls, will help weather challenges if the economy
weakens in the coming year.
Portfolio Overview
[GRAPHIC OF PENNSYLVANIA OMMITTED]
Based on market value as of January 31, 1996
Number of issues 129
Average quality Aa-
Investment grade 95.9%
Effective maturity 10.5 yrs.
Largest sectors:
Hospitals 18.8%
Industrial development
/pollution control 9.5
Insured hospitals 8.7*
Housing 7.2
Escrowed 6.3
* Private insurance does not remove the market risk associated with
this investment.
"Given the signs of a slowing economy and a generally positive interest
rate outlook, I've adopted a "barbell" approach within the Portfolio.
That has meant a dual focus: first, on high-coupon issues that will
provide the Portfolio a continuing source of relatively high income; and
second, on low-coupon bonds, which increase the Portfolio's potential
for capital appreciation in the event of a decline in interest rates.
"In addition, I've increased the Portfolio's diversification by reducing
our holdings in housing bonds in favor of hospital issues, which
represent one of our major research strengths at Eaton Vance. Finally,
I've redoubled our efforts to improve the Portfolio's call protection.
Because of a scarcity of bonds with attractive call provisions, the
market is increasingly rewarding bonds with good call protection, while
punishing those issues with less favorable call features. We have always
been very attentive to call protection and that has worked to our
advantage in recent months."
Timothy T. Browse - Portfolio Manager
[PICTURE OF TIMOTHY T. BROWSE OMITTED]
Your investment at work
Cumberland County, PA
Municipal Authority
Messiah College Project
[GRAPHIC OF GRADUATION CAP OMITTED]
These revenue bonds were issued in 1995 to finance the acquisition of
property and construction costs of renovations to several facilities of
Messiah College, a well-regarded institution founded in 1909 and located
in Grantham, PA. These projects include additions to the College's
Miller/Hess and Bittner/Sollenberger dormitories, as well as renovations
to the school's Kline Hall of Science building. Interest payments on the
bond are secured by a lien on college tuition payments. Payments of
principal and interest are guaranteed by insurance issued by AMBAC, one
of the nation's largest municipal bond insurance companies. The 5.125%
Messiah College issue is a good example of one end of the Portfolio's
recent "barbell" strategy: a high quality, low coupon issue that
provides the Portfolio with ample upside potential in the event of a
further rate decline.
<TABLE>
<CAPTION>
EV Traditional Municipals Funds
Financial Statements
Statement of Assets and Liabilities
January 31, 1996 (unaudited)
Traditional Traditional Traditional
Connecticut New Jersey Pennsylvania
Fund Fund Fund
---------------------------------------------
<S> <C> <C> <C>
Assets:
Investments -
Identified cost $1,418,854 $2,147,409 $1,670,439
Unrealized appreciation 108,207 108,812 103,294
---------------------------------------------
Total investments in Portfolio, at value (Note 1A) 1,527,061 2,256,221 1,773,733
Receivable for Fund shares sold 24,059 32,556 77,754
Receivable from the Administrator (Note 4) 13,234 15,772 18,642
Deferred organization expenses (Note 1D) 6,713 5,470 3,506
---------------------------------------------
Total assets $1,571,067 $2,310,019 $1,873,635
---------------------------------------------
Liabilities:
Dividends payable $4,746 $6,487 $4,340
Accrued expenses 1,045 1,085 4,129
---------------------------------------------
Total liabilities $5,791 $7,572 $8,469
---------------------------------------------
Net Assets $1,565,276 $2,302,447 $1,865,166
=============================================
Sources of Net Assets:
Paid-in capital $1,474,495 $2,211,036 $1,766,684
Accumulated net realized loss on
investment and financial futures transactions (computed
on the basis of identified cost) (13,731) (14,693) (4,099)
Accumulated distributions in excess of net investment income (3,695) (2,708) (713)
Unrealized appreciation of investments
and financial futures contracts from Portfolio
(computed on the basis of identified cost) 108,207 108,812 103,294
---------------------------------------------
Total $1,565,276 $2,302,447 $1,865,166
=============================================
Shares of Beneficial Interest Outstanding 148,616 221,061 178,575
=============================================
Net Asset Value and Redemption Price Per Share
(net assets (divided by) shares of beneficial interest outstanding) $10.53 $10.42 $10.44
=============================================
Computation of Offering Price Per Share
(100 (divided by) 96.25 of net asset value per share) $10.94 $10.83 $10.85
=============================================
On sales of $50,000 or more, the offering price is reduced.
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statements of Operations
Six Months Ended January 31, 1996 (unaudited)
Traditional Traditional Traditional
Connecticut New Jersey Pennsylvania
Fund Fund Fund
---------------------------------------------
<S> <C> <C> <C>
Investment Income (Note 1B):
Interest income allocated from Portfolio $37,043 $64,524 $57,011
Expenses allocated from Portfolio (3,251) (5,335) (4,493)
---------------------------------------------
Net investment income from Portfolio $33,792 $59,189 $52,518
Expenses -
Service fees (Note 6) $328 $305 $275
Custodian fee (Note 4) 2,002 1,967 1,500
Transfer and dividend disbursing agent fees 475 742 663
Printing and postage 4,740 7,052 10,010
Legal and accounting services 4,139 4,563 4,617
Registration costs 500 - -
Amortization of organization expenses (Note 1D) 1,063 862 2,489
Miscellaneous 492 586 363
---------------------------------------------
Total expenses $13,739 $16,077 $19,917
---------------------------------------------
Deduct -
Preliminary allocation of expenses
to the Administator (Note 4) $13,234 $15,772 $18,642
Reduction of custodian fee (Note 4) - - 1,000
---------------------------------------------
Total $13,234 $15,772 $19,642
---------------------------------------------
Net expenses $505 $305 $275
---------------------------------------------
Net investment income $33,287 $58,884 $52,243
---------------------------------------------
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain (loss) from Portfolio -
Investment transactions (identified cost basis) $3,398 $10,525 $8,207
Financial futures contracts (5,143) (4,182) 197
---------------------------------------------
Net realized gain (loss) on investments
and financial futures contracts (1,745) $6,343 $8,404
Change in unrealized appreciation of investments 59,830 84,671 75,858
---------------------------------------------
Net realized and unrealized gain $58,085 $91,014 $84,262
---------------------------------------------
Net increase in net assets from operations $91,372 $149,898 $136,505
=============================================
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
Six Months Ended January 31, 1996 (unaudited)
Traditional Traditional Traditional
Connecticut New Jersey Pennsylvania
Fund Fund Fund
-------------- -------------- --------------
<S> <C> <C> <C>
Increase (Decrease) in Net Assets:
From operations -
Net investment income $33,287 $58,884 $52,243
Net realized gain (loss) on investments (1,745) 6,343 8,404
Change in unrealized appreciation of investments 59,830 84,671 75,858
-------------- -------------- --------------
Net increase in net assets from operations $91,372 $149,898 $136,505
-------------- -------------- --------------
Distributions to shareholders (Note 2) -
From net investment income ($33,287) ($58,884) ($52,243)
In excess of net investment income (2,180) (1,292) -105
Total distributions to shareholders -------------- -------------- --------------
($35,467) ($60,176) ($52,348)
-------------- -------------- --------------
Transactions in shares of beneficial interest (Note 3) -
Proceeds from sales of shares $389,321 $643,301 $703,133
Net asset value of shares issued to shareholders in payment
of distributions declared 9,448 25,396 27,516
Cost of shares redeemed (4,281) (167,603) (436,320)
-------------- -------------- --------------
Increase in net assets from Fund share transactions $394,488 $501,094 $294,329
-------------- -------------- --------------
Net increase in net assets $450,393 $590,816 $378,486
Net Assets:
At beginning of period 1,114,883 1,711,631 1,486,680
-------------- -------------- --------------
At end of period 1,711,631 1,486,680 $1,865,166
=============================================
Accumulated distributions in excess of net investment
income included in net assets at end of year ($3,695) ($2,708) ($713)
See notes to financial statements
Statement of Changes in Net Assets
Year Ended July 31, 1995
Traditional Traditional Traditional
Connecticut New Jersey Pennsylvania
Fund Fund Fund
-------------- -------------- --------------
Increase (Decrease) in Net Assets:
From operations -
Net investment income $35,760 $56,056 $33,199
Net realized loss on investments (11,964) (21,024) (12,503)
Change in unrealized appreciation of investments 46,738 23,112 27,034
-------------- -------------- --------------
Net increase in net assets from operations $70,534 $58,144 $47,730
-------------- -------------- --------------
Distributions to shareholders (Note 2) -
From net investment income ($35,760) ($56,056) ($33,199)
In excess of net investment income (1,438) (1,355) (474)
-------------- -------------- --------------
Total distributions to shareholders ($38,198) ($57,411) ($33,673)
-------------- -------------- --------------
Transactions in shares of beneficial interest (Note 3) -
Proceeds from sales of shares $1,185,803 $1,752,811 $1,594,537
Net asset value of shares issued to shareholders in payment
of distributions declared 12,415 19,133 13,089
Cost of shares redeemed (279,831) (357,531) (229,836)
Increase in net assets from Fund share transactions -------------- -------------- --------------
$918,387 $1,414,413 $1,377,790
-------------- -------------- --------------
Net increase in net assets $951,723 $1,415,146 $1,391,847
Net assets:
At beginning of year 163,160 296,485 94,833
-------------- -------------- --------------
At end of year $1,114,883 $1,711,631 $1,486,680
=============================================
Accumulated distributions in excess of net investment
income included in net assets at end of year ($1,515) ($1,416) ($608)
=============================================
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights
Traditional Connecticut Traditional New Jersey Fund
------------------------------------- ---------------------------------------
Six months ended Year Ended Six months ended Year Ended
Jan. 31,1996 July 31, Jan. 31, 1996 July 31,
-------------- ----------------------- ---------------- ------------------------
(unaudited) 1995 1994** (unaudited) 1995 1994**
---------- ------- ------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.090 $10.100 $10.000 $9.980 $9.940 $10.000
------- ------- ------- ------- ------- -------
Income from operations:
Net investment income $0.272 $0.553 $0.153 $0.291 $0.576 $0.161
Net realized and unrealized gain (loss)
on investments 0.458 0.012 0.111 0.446 0.054 (0.044)++
------- ------- ------- ------- ------- -------
Total income from operations $0.730 $0.565 $0.264 $0.737 $0.630 $0.117
------- ------- ------- ------- ------- -------
Less distributions:
From net investment income $(0.272) $(0.553) $(0.153) $(0.291) $(0.576) $(0.161)
In excess of net investment income (0.018) (0.022) (0.011) (0.006) (0.014) (0.016)
------- ------- ------- ------- ------- -------
Total distributions $(0.290) $(0.575) $(0.164) $(0.297) $(0.590) $(0.177)
------- ------- ------- ------- ------- -------
Net asset value, end of period $10.530 $10.090 $10.100 $10.420 $9.980 $9.940
======= ======= ======= ======= ======= =======
Total Return (2) 7.31% 5.89% 2.66% 7.48% 6.62% 1.19%
Ratios/Supplemental Data*:
Net assets, end of period (000 omitted) $1,565 $1,115 $163 $2,302 $1,712 $296
Ratio of net expenses to average daily
net assets (1) (3) 0.61%+ 0.51% 0.48%+ 0.56%+ 0.50% 0.43%+
Ratio of net investment income to average
daily net assets 5.22%+ 5.46% 4.83%+ 5.63%+ 5.65% 4.11%+
*For the six months ended January 31, 1996 , for the year ended July 31, 1995 and for the period from the start of business,
April 19, 1994 (Traditional Connecticut Fund), and April 13, 1994 (Traditional New Jersey Fund) to July 31, 1994, respectively,
the operating expenses of the Funds reflect an allocation of expenses to the Administrator. Had such actions not been taken,
net investment income (loss) per share and the ratios would have been as follows:
Net investment income (loss) per share $0.164 $0.249 ($0.045) $0.213 $0.375 ($0.237)
====== ====== ====== ====== ====== ======
Ratios (As a percentage of average
daily net assets):
Expenses (1)(3) 2.67%+ 3.51% 6.73%+ 2.07%+ 2.47% 10.59%+
Net investment income (loss) 3.13%+ 2.46% (1.42%)+ 4.11%+ 3.68% (6.05%)+**
**For The Traditional Connecticut and Traditional New Jersey Funds, the Financial Highlights are for the period from the start
of business, April 19, 1994, and April 13, 1994, respectively, to July 31, 1994.
+ Annualized.
++The per share amount is not in accord with the net realized and unrealized gain for the period because of the timing of sales
of Fund shares and the amount of per share realized and unrealized gains and losses at such time.
(1) Includes the Fund's share of its corresponding Portfolio's allocated expenses.
(2) Total return is calculated assuming purchase at the net asset value on the first day and a sale at the net asset value on
the last day of each period reported. Dividends and distributions, if any, are assumed to be reinvested at the n
(3) The annualized expense ratios for the six month period ended January 31, 1996 have been adjusted to reflect a change in
reporting requirements. The new reporting guidelines require each Fund to increase their expense ratio by the effect of any
expense offset arrangement with their service providers. The expense ratios for each of the two years ended July 31, 1995 have
not been adjusted to reflect this change.
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights
Traditional Pennsylvania Fund
----------------------------------------------
Six months ended Year
31-Jan-96 Ended July 31,
-------------- ----------------------
(unaudited) 1995 1994**
--------- ------- -------
<S> <C> <C> <C>
Net asset value, beginning of period $9.980 $10.050 $10.000
------- ------- -------
Income from operations:
Net investment income $0.294 $0.577 $0.044
Net realized and unrealized gain (loss) on investments 0.461 (0.062)++ 0.104
------- ------- -------
Total income from operations $0.755 $0.515 $0.148
------- ------- -------
Less distributions:
From net investment income $(0.294) $(0.577) $(0.044)
In excess of net investment income (0.001) (0.008) (0.054)
------- ------- -------
Total distributions $(0.295) $(0.585) $(0.098)
------- ------- -------
Net asset value, end of period $10.440 $9.980 $10.050
======= ======= =======
Total Return (2) 7.65% 5.41% 1.49%
Ratios/Supplemental Data*:
Net assets, end of period (000 omitted) $1,865 $1,487 $95
Ratio of net expenses to average daily net assets (1) (3) 0.67%+ 0.46% 1.69%+
Ratio of net investment income to average daily net assets 5.69%+ 5.58% 2.76%+
*For the six months ended January 31, 1996 , for the year ended July 31, 1995 and for the
period from the start of business, June 1, 1994 to July 31, 1994, the operating expenses
of the Fund reflects an allocation of expenses to the Administrator. Had such actions not
been taken, net investment income (loss) per share and the ratios would have been as follows:
Net investment income (loss) per share $0.189 $0.307 $(0.258)
------- ------- -------
Ratios (As a percentage of average daily net assets):
Expenses (1) (3) 2.70%+ 3.07% 20.95%+
Net investment income (loss) 3.66%+ 2.97% (16.50%)+
** For The Traditional Pennsylvania Fund, the Financial Highlights are for the period from
the start of business, June 1, 1994 to July 31, 1994.
+ Annualized
++The per share amount is not in accord with the net realized and unrealized gain for the
period because of the timing of sales of Fund shares and the amount of per share realized
and unrealized gains and losses at such time.
(1) Includes the Fund's share of its corresponding Portfolio's allocated expenses.
(2) Total return is calculated assuming purchase at the net asset value on the first day
and a sale at the net asset value on the last day of each period reported. Dividends and
distributions, if any, are assumed to be reinvested at the net asset value on the payable
date. Total return is computed on a non-annualized basis.
(3) The annualized expense ratios for the six month period ended January 31, 1996 have been
adjusted to reflect a change in reporting requirements. The new reporting guidelines require
each Fund to increase their expense ratio by the effect of any expense offset arrangement with
their service providers. The expense ratios for each of the two years ended July 31, 1995 have
not been adjusted to reflect this change.
See notes to financial statements
</TABLE>
Notes to Financial Statements
(Unaudited)
(1) Significant Accounting Policies
Eaton Vance Municipals Trust (the Trust) is an entity of the type
commonly known as a Massachusetts business trust and is registered under
the Investment Company Act of 1940, as amended, as an open-end
management investment company. The Trust presently consists of sixty-
three Funds, of which three non-diversified Funds are included in these
financial statements. They include EV Traditional Connecticut Municipals
Fund, ("Traditional Connecticut Fund"), EV Traditional New Jersey
Municipals Fund ("Traditional New Jersey Fund") and EV Traditional
Pennsylvania Municipals Fund ("Traditional Pennsylvania Fund"). Each
Fund invests all of its investable assets in interests in a separate
corresponding open-end non-diversified management investment company (a
Portfolio), a New York Trust, having the same investment objective as
its corresponding Fund. The Traditional Connecticut Fund invests its
assets in the Connecticut Municipals Portfolio, the Traditional New
Jersey Fund invests its assets in the New Jersey Municipals Portfolio
and the Traditional Pennsylvania Fund invests its assets in the
Pennsylvania Municipals Portfolio. The value of each Fund's investment
in its corresponding Portfolio reflects the Funds' proportionate
interest in the net assets of that Portfolio (0.8%, 0.5%, and 0.4% at
January 31, 1996 for the Traditional Connecticut Fund, Traditional New
Jersey Fund and Traditional Pennsylvania Fund, respectively.) The
performance of each Fund is directly affected by the performance of its
corresponding Portfolio. The financial statements of each Portfolio,
including the portfolio of investments, are included elsewhere in this
report and should be read in conjunction with each Fund's financial
statements. The following is a summary of significant accounting
policies consistently followed by the Trust in the preparation of its
financial statements. The policies are in conformity with generally
accepted accounting principles.
A. Investment Valuations - Valuation of securities by the Portfolios is
discussed in Note 1 of the Portfolios' Notes to Financial Statements
which are included elsewhere in this report.
B. Income - Each Fund's net investment income consists of each Fund's
pro rata share of the net investment income of its corresponding
Portfolio, less all actual and accrued expenses of each Fund determined
in accordance with generally accepted accounting principles.
C. Federal Taxes - Each Fund's policy is to comply with
the provisions of the Internal Revenue Code applicable to regulated
investment companies and to distribute to shareholders each year all of
its taxable and tax-exempt income, including any net realized gain on
investments. Accordingly, no provision for federal income or excise tax
is necessary. At July 31, 1995, net capital losses of $12,141, $22,379 and
$15,147 for the Traditional Connecticut Fund, Traditional New Jersey Fund
and Traditional Pennsylvania Fund, respectively, attributable to security
transactions incurred after October 31, 1994 are treated as arising on
the first day of the Fund's current taxable year. Dividends paid by each
Fund from net interest on tax exempt municipal bonds allocated from its
corresponding Portfolio are not includable by shareholders as gross
income for federal income tax purposes because each Fund and Portfolio
intend to meet certain requirements of the Internal Revenue Code
applicable to regulated investment companies which will enable the Funds
to pay exempt-interest dividends. The portion of such interest, if any,
earned on private activity bonds issued after August 7, 1986, may be
considered a tax preference item to shareholders.
D. Deferred Organization Expenses - Costs incurred by a Fund in connection
with its organization, including registration costs, are being amortized
on the straight-line basis over five years.
E. Other - Investment transactions are accounted for on a trade date
basis.
F. Interim Financial Information - The interim financial statements
relating to January 31, 1996 and for the six month period then ended
have not been audited by independent certified public accountants, but
in the opinion of the Fund's management, reflect all adjustments
consisting only of normal recurring adjustments necessary for the fair
presentation of the financial statements.
(2) Distributions to Shareholders
The net income of each Fund is determined daily and substantially all of
the net income so determined is declared as a dividend to shareholders
of record at the time of declaration. Distributions are paid monthly.
Distributions of allocated realized capital gains, if any, are made at
least annually. Shareholders may reinvest capital gain distributions in
additional shares of the Fund at the net asset value as of the ex-
dividend date. Distributions are paid in the form of additional shares
or, at the election of the shareholder, in cash. The Funds distinguish
between distributions on a tax basis and a financial reporting basis.
Generally accepted accounting principles require that only distributions
in excess of tax basis earnings and profits be reported in the financial
statements as a return of capital. Differences in the recognition or
classification of income between the financial statements and tax
earnings and profits which result in temporary over distributions for
financial statements purposes are classified as distributions in excess
of net investment income or accumulated net realized gains. Permanent
differences between book and tax accounting relating to distributions
are reclassified to paid-in capital.
(3) Shares of Beneficial Interest
The Funds' Declaration of Trust permits the Trustees to issue an
unlimited number of full and fractional shares of beneficial interest
(without par value). Transactions in Fund shares for the were as
follows:
<TABLE>
<captioned>
Traditional Traditional Traditional
Connecticut Fund New Jersey Fund Pennsylvania Fund
------------------------ ------------------- --------------------
Six Months Year Ended Six Months Year Ended Six Months Year Ended
Ended Ended Ended
January 31, July 31, January 31, July 31, January 31, July 31,
1996 1995 1996 1995 1996 1995
(unaudited) (unaudited) (unaudited)
-------- ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Sales 37,418 120,607 63,331 176,303 69,104 161,529
Issued to shareholders electing to receive
payments of distributions in Fund Shares 898 1,266 2,479 1,938 2,684 1,318
Redemptions (221) (27,499) (16,279) (36,535) (42,145) (23,354)
-------- ------- ------- -------- -------- --------
Net Increase 38,095 94,374 49,531 141,706 29,643 39,493
======== ======= ======= ======= ======== ========
</TABLE>
(4) Transactions with Affiliates
Eaton Vance Management (EVM) serves as the administrator of each Fund,
but receives no compensation. The Portfolios have engaged Boston
Management and Research (BMR), a subsidiary of EVM, to render investment
advisory services. See Note 2 of the Portfolio's Notes to Financial
Statements which are included elsewhere in this report. To enhance the
net income of the Funds for the six months ended January 31, 1996,
$13,234, $15,772 and $18,642 of expenses related to the operation of the
Traditional Connecticut Fund, Traditional New Jersey Fund and
Traditional Pennsylvania Fund, respectively, were allocated on a
preliminary basis to EVM. Except as to Trustees of the Funds and the
Portfolios who are not members of EVM's or BMR's organization, officers
and Trustees receive remuneration for their services to each Fund out of
such investment adviser fee.
Investors Bank & Trust Company (IBT), serves as custodian to the Funds
and the Portfolios. Prior to November 10, 1995, IBT was an affiliate of
EVM. Pursuant to the respective custodian agreements, IBT receives a fee
reduced by credits which are determined based on the average cash
balances the Funds or the Portfolios maintains with IBT. All significant
credit balances used to reduce the Funds' custodian fees are reflected
as a reduction of operating expenses on the statement of
operations.Certain of the officers and Trustees of the Funds and
Portfolios are officers and directors/trustees of the
above organizations.
(5) Investment Transactions
Increases and decreases in each Fund's investment in its corresponding
Portfolio for the six months ended January 31, 1996 were
as follows:
Traditional Traditional Traditional
Connecticut Fund New Jersey Fund Pennsylvania Fund
---------------- --------------- -----------------
Increases $384,884 $640,380 $635,646
Decreases 41,873 215,865 474,500
(6) Service Plan
Each Fund has adopted a service plan designed to meet the requirements
of Rule 12b-1 under the Investment Company Act of 1940 and the service
fee requirements of the revised sales charge rule of The National
Association of Securities Dealers, Inc. The Service Plans provide that
each Fund may make service fee payments to the Principal Underwriter,
Eaton Vance Distributors, Inc., a subsidiary of Eaton Vance Management,
Authorized Firms or other persons in amounts not exceeding 0.25% of each
Fund's average daily net assets for any fiscal year. The Trustees have
initially implemented each Plan by authorizing the Fund to make
quarterly service fee payments to the Principal Underwriter and
Authorized Firms in amounts not exceeding 0.20% of each Fund's average
daily net assets for any fiscal year which is attributable to shares of
a Fund sold by such persons and remaining outstanding for at least one
year. Service fee payments are made for personal services and/or the
maintenance of shareholder accounts. For the six months ended
January 31, 1996, the Traditional Connecticut Fund, Traditional
New Jersey Fund and Traditional Pennsylvania Fund paid or accrued service
fees of $328, $305 and $275, respectively.
Certain of the officers and Trustees of the Funds are officers or
directors of EVD.
(7) Special Meetings of Shareholders
On December 8, 1995, special meetings of the shareholders of
Traditional Connecticut Fund, the Traditional New Jersey Fund and
Traditional Pennsylvania Fund were held for the purpose of voting on the
matters listed below. On October 23, 1995, the record date of the
meetings, Traditional Connecticut Fund, Traditional New Jersey Fund and
Traditional Pennsylvania Fund had 115,169, 202,739 and 188,568 shares,
respectively, outstanding, of which 86,052, 103,389 and 94,664 shares,
respectively, were represented at the meetings.
Item 1. To consider and act on a proposal to amend each Fund's
investment policy to provide that the Fund may invest without
limit in municipal obligations the interest on which is exempt from
regular federal income tax (but which may be a tax preference
item for purposes of alternative minimum tax) and from the State taxes
that, in accordance with each Fund's investment objective, the
Fund seeks to avoid.
Item 2. To approve the revision of certain of each Fund's fundamental
investment restrictions as follows:
2A. Eliminate the restriction concerning transactions with
affiliates.
2B. Eliminate the restriction concerning investing for control.
2C. Eliminate the restriction concerning joint transactions.
2D. Reclassify the restriction concerning short sales.
2E. Reclassify the restriction concerning investment in
affiliated issuers.
2F. Reclassify the restriction concerning investment in
exploration companies.
2G. Eliminate the restriction concerning diversification of
assets.
2H. Amend the restriction concerning underwriting.
2I. Amend the restriction concerning investing in futures
transactions.
2J. Amend the restriction concerning lending.
2K. Amend the restriction concerning borrowing, pledging and
senior securities.
2L. Clarify the restrictions concerning investing in another
investment company.
The following are the results of the voting on each proposal:
<TABLE>
For Traditional Connecticut Fund:
<CAPTION>
Proposal: 1 2A 2B 2C 2D 2E 2F 2G 2H 2I 2J 2K 2L
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
For 80,839 80,839 78,404 80,839 86,053 86,053 80,839 80,839 86,053 86,053 86,053 83,618 86,053
Against 0 5,213 7,648 5,213 0 0 5,213 5,213 0 0 0 2,435 0
Abstain 5,213 0 0 0 0 0 0 0 0 0 0 0 0
For Traditional New Jersey Fund:
<CAPTION>
Proposal: 1 2A 2B 2C 2D 2E 2F 2G 2H 2I 2J 2K 2L
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
For 102,430 95,639 87,938 93,527 93,777 95,639 94,887 96,428 92,738 92,738 92,738 93,527 101,498
Against 0 789 5,839 2,901 0 2,938 3,680 0 3,690 3,690 3,690 2,901 789
Abstain 959 6,961 9,612 6,961 9,612 4,812 4,812 6,961 6,961 6,961 6,961 6,961 1,102
For Traditional Pennsylvania Fund:
<CAPTION>
Proposal: 1 2A 2B 2C 2D 2E 2F 2G 2H 2I 2J 2K 2L
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
For 90,333 87,082 89,336 90,807 89,336 89,336 90,807 89,336 89,336 89,336 90,807 90,807 90,807
Against 0 3,251 997 997 2,468 997 997 997 997 997 997 997 997
Abstain 4,331 4,331 4,331 2,860 2,860 4,331 2,860 4,331 4,331 4,331 2,860 2,860 2,860
</TABLE>
<TABLE>
<CAPTION>
Connecticut Municipals Portfolio
Portfolio of Investments - January 31, 1996 (Unaudited)
Tax-Exempt Investments - 100%
Ratings (Unaudited) Principal
- --------------------- Amount
Standard (000
Moody's & Poor's Omitted) Security Value
- ----------------------------------------------------------------------------- ---------------
<S> <C> <C> <C> <C>
Education - 9.1%
Baa BBB $1,000 Connecticut HEFA, University
of Hartford, 6.75%, 7/1/12 $1,040,170
Baa BBB 5,500 Connecticut HEFA, University
of Hartford, 6.80%, 7/1/22 5,709,550
NR BBB- 4,775 Connecticut HEFA, Quinnipiac
College, 6.00%, 7/1/23 4,625,065
Baa A 1,000 Connecticut HEFA, Sacred
Heart University, 6.80%,
7/1/12 1,085,710
NR BBB- 1,000 Connecticut HEFA, Sacred
Heart University, 5.80%,
7/1/23 940,010
NR A 1,125 Connecticut HEFA, Taft
School, 5.40%, 7/1/20 1,120,399
Aaa AAA 3,400 Connecticut HEFA, Yale
University, 7.791%,
6/10/30 (1) 3,620,184
---------------
$18,141,088
---------------
Escrowed to Maturity - 2.9%
NR AA- $650 State of Connecticut
General Obligations Bonds,
6.875%, 7/15/10 $733,440
NR AAA 800 Connecticut Special Tax
Obligation Bonds (STO),
Transportation Infrastructure
Purposes, 6.75%, 6/1/11 919,232
Aaa AA- 645 Connecticut STO,
Transportation Infrastructure
Purposes, 6.50%, 7/1/09 708,191
A1 NR 300 Amity RSD No. 5 Bonds,
6.80%, 6/15/08 324,900
NR A- 1,630 City of Stratford, General
Obligations Bonds, 7.30%,
3/1/12 1,885,013
NR AAA 1,000 Puerto Rico Industrial Medical
& Environmental Pollution
Control Facilities, Dr.
Pila Hospital, 7.85%, 8/1/28 1,114,790
---------------
$5,685,566
---------------
General Obligations - 4.5%
A AA- $2,000 City of Bridgeport, 6.125%,
3/1/05 $2,176,900
Aa AA- 1,750 State of Connecticut, Capital
Appreciation Bonds, 0%,
11/1/09 869,068
Aa AA- 1,000 State of Connecticut, 5.50%,
3/15/10 $1,049,090
Aa AA- 500 State of Connecticut, 5.50%,
3/15/11 521,935
Aa AA 1,270 City of Danbury, 4.50%,
2/1/14 1,154,468
Aa1 NR 650 City of Farmington, 5.70%,
1/15/11 702,468
NR BBB 500 Government of Guam, 5.40%,
11/15/18 464,710
Aa1 AA+ 925 City of Norwalk Maritime
Center Project Bonds, 6.05%,
2/1/09 996,493
NR NR 1,000 Virgin Islands PFA Revenue
Bonds, 7.25%, 10/1/18 1,075,430
---------------
$9,010,562
---------------
Health Care (Non-
Hospital) - 12.3%
A1 AA- $600 Connecticut HEFA,
Nursing Home Program
(NHP) (Noble Horizons),
6.00%, 11/1/22 $618,216
A1 AA- 1,000 Connecticut HEFA, (NHP)
(Jewish Home-Fairfield),
6.25%, 11/1/20 1,059,270
A1 AA- 655 Connecticut HEFA, (NHP)
(St. Camillus), 6.25%, 11/1/18 693,822
A1 AA- 3,250 Connecticut HEFA, (NHP)
(St. Joseph's Manor) 6.25%,
11/1/16 3,434,535
A1 AA- 1,365 Connecticut HEFA, (NHP)
(Sharon Healthcare) 6.25%,
11/1/14 1,449,316
A2 NR 9,000 Connecticut Development
Authority Health Care Bonds
(Duncaster), 6.75%, 9/1/15 " 9,671,760
A1 AA- 720 Connecticut HEFA, (NHP)
(Highland View), 7.00%,
11/1/07 824,141
A1 AA- 335 Connecticut HEFA, (NHP)
(Wadsworth Glen), 7.00%,
11/1/07 383,454
A1 AA- 2,000 Connecticut HEFA, (NHP)
(Wadsworth Glen), 7.50%,
11/1/16 2,329,660
A1 AA- 500 Connecticut HEFA, (NHP)
Windsor Nursing Home,
7.125%, 11/1/24 566,425
A1 AA- 3,000 Connecticut HEFA, (NHP)
(Windsor), 7.125%, 11/1/14 3,409,830
---------------
$24,440,429
---------------
Hospitals - 7.2%
NR A- $3,770 Connecticut HEFA, William
W. Backus Hospital, 6.375%,
7/1/22 $3,902,214
Baa1 NR 9,150 Connecticut HEFA, Griffin
Hospital, 5.75%, 7/1/23 8,337,403
NR BBB- 2,000 Connecticut HEFA, New Britan
Memorial Hospital, 7.75%,
7/1/22 2,168,800
---------------
$14,408,417
---------------
Housing - 10.5%
Aa AA $100 Connecticut HFA Mortgage
Revenue Bonds (MRB),
7.40%, 11/15/99 $104,177
Aa AA 250 Connecticut HFA, (MRB),
7.10%, 11/15/00 263,120
Aa AA 200 Connecticut HFA, (MRB),
7.00%, 11/15/09 213,472
Aa AA 6,200 Connecticut HFA, (MRB),
6.70%, 11/15/12 6,640,510
Aa AA 210 Connecticut HFA, (MRB),
6.55%, 11/15/13 222,020
Aa AA 3,000 Connecticut HFA, (MRB),
6.20%, 5/15/14 3,102,210
Aa AA 1,700 Connecticut HFA, (MRB),
6.35%, 5/15/17 1,784,864
Aa AA+ 140 Connecticut HFA, (MRB),
7.625%, 11/15/17 145,254
Aa AA 1,340 Connecticut HFA, (MRB),
6.90%, 5/15/20 1,398,947
Aa AA 1,750 Connecticut HFA, (MRB),
6.20%, 5/12/21 1,783,180
Aa AA 100 Connecticut HFA, (MRB),
6.70%, 11/5/22 103,606
Aa AA 2,500 Connecticut HFA, (MRB),
6.60%, 11/15/23 2,632,250
Aa AA 2,000 Connecticut HFA, (MRB),
6.75%, 11/15/23 2,126,200
NR AA 305 Puerto Rico HFC, (MRB),
7.50%, 10/1/11 319,518
---------------
$20,839,328
---------------
Industrial Development/
Pollution Control
Revenues - 4.7%
Aaa AAA $1,000 Connecticut Development
Authority PCR (Pfizer Inc.),
6.55% 2/15/13 $1,104,280
Aa AA- 2,000 Connecticut Development
Authority (Economic Develop-
ment Projects), Revenue Bonds,
6.00%, 11/15/08 2,128,880
A1 A+ 2,000 Connecticut Development
Authority (New England Power
Company Project), 7.25%,
10/15/15 2,176,120
NR BBB+ 3,065 Connecticut Development
Authority Airport Facility
(Signature Flight) 6.625%,
12/1/14 3,146,805
Baa3 BB+ 700 Puerto Rico Port Authority
American Airlines, 6.30%,
6/1/23 716,758
---------------
$9,272,843
---------------
Insured Airports - 4.9%
Aaa AAA $8,200 State of Connecticut Airport
Revenue Bonds, Bradley
International Airport, (FGIC),
7.65%, 10/1/12 $9,787,192
---------------
Insured College and
University - 3.9%
Aaa AAA $725 Connecticut HEFA, Fairfield
University (MBIA), 5.00%,
7/1/18 $700,321
Aaa AAA 1,200 Connecticut HEFA, Connecticut
College (MBIA), 6.625%,
7/1/11 1,304,904
Aaa AAA 2,000 Connecticut HEFA, Trinity
College (MBIA), 6.00%,
7/1/22 2,095,220
Aaa AAA 1,555 Connecticut HEFA, Choate
Rosemary College (MBIA),
6.80%, 7/1/15 (2) 1,751,925
Aaa AAA 750 Connecticut HEFA, Loomis
Chafee (MBIA), 6.00%,
7/1/15 790,867
Aaa AAA 1,000 Connecticut HEFA, Loomis
Chafee (MBIA), 6.00%,
7/1/25 1,047,560
---------------
$7,690,797
---------------
Insured Miscellaneous - 1.6%
Aaa AAA $2,160 Connecticut Municipal
Electric Energy Cooperative
Bonds (MBIA), 5.00%,
1/1/18 $2,087,359
Aaa AAA 1,000 South Central Connecticut
Water Authority Revenue
Bonds 5.75%, 8/1/12 1,043,820
---------------
$3,131,179
---------------
Insured General
Obligations - 3.3%
Aaa AAA $1,220 Town of Bethel, (MBIA),
6.50%, 2/15/09 $1,412,711
Aaa AAA 740 Town of Stratford, (MBIA),
6.60%, 3/1/11 867,717
Aaa AAA 1,000 City of New Britain, (MBIA),
6.00%, 3/1/12 1,094,400
Aaa AAA 1,000 Town of Plainfield, (MBIA),
6.375%, 8/1/11 1,089,320
Aaa AAA 2,000 Puerto Rico Public Building
Authority Bonds (AMBAC),
5.50%, 7/1/25 2,013,360
---------------
$6,477,508
---------------
Insured Healthcare - 0.8%
Aaa AAA $1,735 Connecticut HEFA, (NHP)
(St. Joseph's Living Center),
(AMBAC) 5.10%, 11/1/19 $1,686,004
---------------
Insured Hospitals - 11.2%
Aaa AAA $1,000 Connecticut HEFA, Bridgeport
Hospital (MBIA), 6.625%,
7/1/18 $1,103,810
NR AAA 1,600 Connecticut HEFA, Bridgeport
Hospital (CLEE), 5.25%,
7/1/15 1,561,872
Aaa AAA 6,750 Connecticut HEFA, St. Francis
Hospital (FGIC), 5.00%,
7/1/23 6,384,150
Aaa AAA 1,500 Connecticut HEFA, Lawrence
and Memorial Hospital (MBIA),
5.00%, 7/1/13 1,464,165
Aaa AAA 5,750 Connecticut HEFA, Lawrence
and Memorial Hospital (MBIA),
5.00%, 7/1/22 5,498,150
Aaa AAA 1,000 Connecticut HEFA, Hospital of
St. Raphael (AMBAC), 6.50%,
7/1/11 1,160,920
Aaa AAA 1,500 Connecticut HEFA, Hospital of
St. Raphael (AMBAC), 6.625%,
7/1/14 1,627,410
Aaa AAA 2,000 Connecticut HEFA, Yale-New
Haven Hospital (MBIA), 6.50%,
7/1/12 2,191,740
Aaa AAA 1,200 Connecticut HEFA, Yale-New
Haven Hospital (MBIA), 7.10%,
7/1/25 1,340,016
---------------
$22,332,233
---------------
Insured Solid Waste - 1.0%
Aaa AAA $2,000 Connecticut Resources Recovery
Authority Mid-Connecticut
System Bonds (MBIA), 5.50%,
11/15/12 $1,997,640
---------------
Insured Water
and Sewer - 0.8%
Aaa AAA $1,750 Connecticut Development
Authority Water Facilities Bonds,
Connecticut Water Company (AMBAC),(AMT), 5.875%,
9/1/22 $1,786,855
---------------
Solid Waste - 8.1%
A NR $2,500 Bristol Resource Recovery
Facility Operating Committee,
(Ogden Martin Systems),
6.50%, 7/1/14 $2,672,350
Baa1 AA- 450 Connecticut Resources
Recovery Authority (American
REF-FUEL Company),
(AMT), 8.00%, 11/15/15 495,581
Baa1 A 1,000 Connecticut Resources
Recovery Authority (American
REF-FUEL Company),
(AMT), 8.10%, 11/15/15 1,103,850
A2 A 4,250 Connecticut Resources
Recovery Authority (American
REF-FUEL Company),
(AMT), 6.45%, 11/15/22 4,462,628
NR A- 7,970 Eastern Connecticut Resource
Recovery Authority, (Wheela-
brator Lisbon), 5.50%,
1/1/20 7,325,068
---------------
$16,059,477
---------------
Special Tax - 4.8%
A1 AA- $1,000 State of Connecticut STO,
5.40%, 9/1/10 $1,015,640
A1 AA- 3,180 State of Connecticut STO,
6.125%, 9/1/12 3,526,429
Baa1 A 4,465 Puerto Rico Highway &
Transpotation Authority, series x,
5.50%, 7/1/15 4,475,314
Baa1 A 500 Puerto Rico Highway &
Transportation Authority
5.50%, 7/1/15 505,335
---------------
$9,522,718
---------------
Student Loans - 2.4%
A1 NR $440 Connecticut Higher Education
Supplemental Loan Authority
Revenue Bonds (AMT),
7.375%, 11/15/05 $467,795
A1 NR 1,340 Connecticut Higher Education
Supplemental Loan Authority
Revenue Bonds (AMT),
6.20%, 11/15/09 1,397,647
A1 NR 2,760 Connecticut Higher Education
Supplemental Loan Authority
Revenue Bonds (AMT),
7.50%, 11/15/10 2,943,098
---------------
$4,808,540
---------------
Utilities - 4.3%
NR BBB $1,100 Guam Power Authority
Revenue Bonds, 6.625%,
10/1/14 $1,153,427
NR BBB 3,625 Guam Power Authority
Revenue Bonds, 6.30%,
10/1/22 3,697,210
NR NR 3,500 Virgin Islands Water and
Power Authority, Electric
Revenue System Bonds
7.40%. 7/1/11 3,758,825
---------------
$8,609,462
---------------
Water & Sewer
Revenue - 1.7%
Aa AA+ $1,250 State of Connecticut Clean
Water Fund Revenue Bonds,
6.00%, 10/1/12 $1,393,075
NR A+ 2,225 Connecticut Development
Authority Water Facilities,
Stamford Water Company,
5.30%, 9/1/28 2,151,263
---------------
3,544,338
---------------
Total tax-exempt investments
(identified cost $190,611,515) $199,232,176
===============
</TABLE>
(1) The above designated securities have been issued as inverse floater
bonds.
(2) Security has been segregated to cover margin requirements for open
financial futures contracts.
The Portfolio invests primarily in debt securities issued by Connecticut
municipalities. The ability of the issuers of the debt securities to meet
their obligations may be affected by economic developments in a specific
industry or municipality. In order to reduce the risk associated with such
economic developments, at January 31, 1996, 27.5% of the securities in the
portfolio of investments are backed by bond insurance of various financial
institutions and financial guaranty assurance agencies. The aggregate
percentage by financial institution ranged from 4.3% to 14.0% of total
investments.
See notes to financial statements
<TABLE>
<CAPTION>
New Jersey Municipals Portfolio
Portfolio of Investments - January 31, 1996 (Unaudited)
Tax-Exempt Investments - 100%
Ratings (Unaudited) Principal
- ---------------------- Amount
Standard (000
Moody's & Poor's Omitted) Security Value
- ----------------------------------------------------------------------------- ---------------
<S> <C> <C> <C> <C>
Cogeneration - 3.4%
NR BB+ $12,750 New Jersey Economic
Development Authority,
Vineland Cogeneration
Limited Partnership, (AMT),
7.875%, 6/1/19 $13,815,390
---------------
Education - 3.1%
Baa1 BBB $ 2,480 New Jersey Educational
Facilities Authority, Seton
Hall University, 7.00%,
7/1/21 $ 2,718,030
Aa1 AA+ 1,000 New Jersey Educational
Facilities Authority,
Princeton Theological
Seminary, 6.375%, 7/1/22 1,084,500
NR NR 8,800 New Jersey Higher
Educational Student Loan
Bonds, (AMT), 0%, 7/1/10 3,377,088
NR BBB- 750 Puerto Rico Industrial, Tourist,
Educational, Medical and
Environmental Authority,
Polytechnic University, 5.50%,
8/1/24 679,260
NR BBB- 1,000 Puerto Rico Industrial, Tourist,
Educational, Medical and
Environmental Authority,
Polytechnic University, 6.50%,
8/1/24 1,039,280
A1 AA 2,500 Rutgers, The State University
of New Jersey, 6.85%, 5/1/21 2,740,700
A AA 1,000 University of Medicine and
Dentistry of New Jersey,
7.20%, 12/1/19 1,112,870
---------------
$12,751,728
---------------
Escrowed/Prerefunded - 2.6%
Aaa AAA $ 870 The City of Newark, (AMBAC),
Prerefunded to 10/1/99,
7.375%, 10/1/07 $ 985,519
NR NR 2,000 County of Passaic, Prerefunded
to 9/1/99, 6.70%, 9/1/13 2,212,740
Baa1 AAA 5,645 Puerto Rico Aqueduct and
Sewer Authority, Prerefunded
to 7/1/98, 7.875%, 7/1/17 6,285,708
Aa AAA 1,205 New Jersey Health Care
Facilities Financing Authority,
Barnett Hospital, (FHA),
Prerefunded to 8/1/01, 6.80%,
8/1/19 1,367,192
---------------
$10,851,159
---------------
General Obligations - 13.5%
NR BBB $ 9,745 Government of Guam, 5.40%,
11/15/18 $ 9,057,198
NR A+ 5,000 The Hudson County
Improvement Authority,
6.625%, 8/1/25 5,349,400
Aa1 NR 3,000 Mercer County Improvement
Authority Solid Waste, 0%,
4/1/10 1,436,580
Baa1 A 2,000 Commonwealth of Puerto
Rico, 5.50%, 7/1/17 1,980,020
Baa1 A 1,990 Commonwealth of Puerto
Rico, 6.45%, 7/1/17 2,143,031
Baa1 A 5,000 Commonwealth of Puerto
Rico, 6.50%, 7/1/23 5,401,150
Baa1 A 4,925 Commonwealth of Puerto
Rico, 5.40%, 7/1/25 4,790,400
Baa1 A 4,000 Puerto Rico Public
Buildings Authority, Public
Education and Health
Facilities, 5.75%, 7/1/15 4,054,840
Baa1 A 2,075 Puerto Rico Public
Buildings Authority, Public
Education and Health
Facilities, 5.75%, 7/1/16 2,103,448
Baa1 A 5,125 Puerto Rico Public Buildings
Authority, Public Education
and Health Facilities, 5.50%,
7/1/21 5,048,843
NR NR 13,350 Virgin Islands Public Finance
Authority, 7.25%, 10/1/18 14,356,990
---------------
$55,721,900
---------------
Healthcare (Non-
Hospital) - 1.9%
NR NR $ 1,400 New Jersey Economic
Development Authority,
Claremont Health System,
8.75%, 9/1/22 $ 1,495,200
NR NR 2,500 New Jersey Economic
Development Authority,
Victoria Health , 7.65%,
1/1/14 2,452,300
NR NR 3,630 New Jersey Economic
Development Authority,
Forsgate, 8.625%, 6/1/25 3,733,310
---------------
$ 7,680,810
---------------
Hospitals - 7.4%
Aa AAA $ 9,585 New Jersey Health Care
Facilities Financing Authority,
Barnett Hospital, (FHA),
6.80%, 8/1/19 $10,360,043
A A- 2,300 New Jersey Health Care
Facilities Financing Authority,
Atlantic City Medical Center,
6.80%, 7/1/11 2,485,449
Baa1 NR 5,875 New Jersey Health Care
Facilities Financing Authority,
Deborah Heart and Lung
Center, 6.30%, 7/1/23 6,063,764
Baa NR 2,000 New Jersey Health Care
Facilities Financing Authority,
Southern Ocean County
Hospital, 6.25%, 7/1/23 1,984,280
A A- 10,425 New Jersey Health Care
Facilities Financing Authority,
Chilton Memorial Hospital,
5.00%, 7/1/13 9,734,552
---------------
$30,628,088
---------------
Housing - 3.8%
NR AAA $ 2,000 New Jersey Housing and
Mortgage Finance Agency,
Presidential Plaza, (FHA),
6.95%, 5/1/13 $ 2,138,460
NR AAA 3,700 New Jersey Housing and
Mortgage Finance Agency,
Presidential Plaza, (FHA),
7.00%, 5/1/30 3,935,320
NR AA+ 1,975 New Jersey Housing and
Mortgage Finance Agency,
Section 8, 7.10%, 11/1/11 2,114,001
NR AA+ 1,000 New Jersey Housing and
Mortgage Finance Agency,
Section 8, 7.10%, 11/1/12 1,070,380
NR A+ 3,715 New Jersey Housing and
Mortgage Finance Agency,
Section 8, 6.60%, 11/1/14 3,890,125
NR A+ 1,000 New Jersey Housing and
Mortgage Finance Agency,
Rental Housing, (AMT),
7.10%, 5/1/22 1,061,880
NR AA+ 1,250 New Jersey Housing and
Mortgage Finance Agency,
Rental Housing, (AMT),
7.25%, 11/1/22 1,323,213
Aaa AAA 300 Puerto Rico Housing
Finance Corporation
Mortgage Revenue (GNMA),
6.85%, 10/15/23 207,043
---------------
$15,740, 422
---------------
Industrial Development/
Pollution Control - 8.3%
NR NR $ 2,000 Middlesex County Pollution
Control Financing Authority,
Amerada Hess Corporation,
7.875%, 6/1/22 $ 2,278,380
NR NR 4,000 Middlesex County Pollution
Control Financing Authority,
Amerada Hess Corporation,
6.875%, 12/1/22 4,259,120
Aa1 NR 3,000 New Jersey Economic
Development Authority,
Garden State Paper Company,
(AMT), 7.125%, 4/1/22 3,134,610
NR NR 2,000 New Jersey Economic
Development Authority,
The Seeing Eye, Inc., 7.30%,
4/1/11 2,150,480
NR NR 5,640 New Jersey Economic
Development Authority,
Holt Hauling, (AMT), 8.95%,
12/15/19 5,982,968
NR NR 1,160 New Jersey Economic
Development Authority,
National Association of
Accountants, Inc. 7.65%,
7/1/09 1,256,732
NR AA- 3,300 New Jersey Economic
Development Authority,
Oak Grove Associates, 6.125%,
12/1/06 3,497,274
Baa1 A- 2,135 New Jersey Economic
Development Authority,
GATX Terminals Corporation,
7.30%, 9/1/19 2,437,316
Aa3 AA- 1,300 Puerto Rico Industrial,
Medical and Environmental
Pollution Control
Authority, Motorola, Inc.,
6.75%, 1/1/14 1,417,507
Baa3 BB+ 7,750 Puerto Rico Port Authority,
American Airlines, (AMT),
6.30%, 6/1/23 7,935,534
---------------
$34,349,923
---------------
Insured Education - 0.5%
Aaa AAA $ 2,000 New Jersey State Educational
Facilities Authority, Seton Hall
University, (BIGI), 6.85%,
7/1/19 $ 2,189,120
---------------
Insured Healthcare - 0.6%
Aaa AAA $ 2,500 New Jersey Economic
Development Authority, Clara
Maass Health System, (FSA),
5.00%, 7/1/25 $ 2,378,025
---------------
Insured Hospitals - 0.9%
Aaa AAA $ 2,000 New Jersey Health Care
Facilities Financing Authority,
Hackensack Medical Center,
(FGIC), 6.25%, 7/1/21 $ 2,086,260
Aaa AAA 1,570 New Jersey Health Care
Facilities Financing Authority,
Cathedral Health Services,
(MBIA), 7.25%, 2/15/21 1,777,538
---------------
$ 3,863,798
---------------
Insured Housing - 1.3%
Aaa AAA $ 1,410 New Jersey Housing and
Mortgage Finance Agency,
(MBIA), 7.375%, 10/1/17 $ 1,483,940
Aaa AAA 1,740 New Jersey Housing and
Mortgage Finance Agency,
(AMT), (MBIA), 7.70%,
10/1/29 1,840,694
Aaa AAA 1,745 Pennsauken Township Housing
Finance Corporation, (MBIA),
8.00%, 4/1/11 1,829,371
---------------
$ 5,154,005
---------------
Insured Lease Revenue - 4.9%
Aaa AAA $ 3,900 County of Atlantic, Public
Facilities Lease Agreement,
(FGIC), 6.00%, 3/1/13 $ 4,329,819
Aaa AAA 1,750 County of Hudson, New
Jersey Correctional Facility,
(MBIA), 6.50%, 12/1/11 1,925,840
Aaa AAA 6,240 County of Hudson, New
Jersey Correctional Facility,
(MBIA), 6.60%, 12/1/21 6,762,101
Aaa AAA 2,500 County of Hudson, New
Jersey Improvement Authority,
Secondary Yield Curve
Notes, (FGIC), Variable,
12/1/25 (1) 2,712,825
Aaa AAA 1,800 County of Middlesex, New
Jersey Certificates of
Participation, (MBIA),
6.125%, 2/15/19 1,922,454
Aaa AAA 2,225 University of Medicine and
Dentistry Certificates of
Participation, (MBIA), 6.75%,
12/1/09 2,445,431
---------------
$20,098,470
---------------
Insured Solid Waste - 0.4%
Aaa AAA $ 1,500 The Mercer County
Improvement Authority,
Solid Waste Revenue, (AMT),
(FGIC), 6.70%, 4/1/13 $ 1,570,710
---------------
Insured Special Tax - 0.6%
Aaa AAA $ 2,375 New Jersey Economic
Development Authority,
Market Transition Facility,
(MBIA), 5.875%, 7/1/11 $ 2,522,060
---------------
Insured Transporation - 5.5%
Aaa AAA $ 8,000 Delaware River Port
Authority, (FGIC), 5.50%,
1/1/26 $ 8,048,160
Aaa AAA 5,000 New Jersey Turnpike
Authority "RITES", (MBIA),
Variable, 1/1/16 (1) 6,593,200
Aaa AAA 6,950 New Jersey Turnpike
Authority, (MBIA), 6.50%,
1/1/16 8,109,260
---------------
$22,750,620
---------------
Insured Utilities - 3.5%
Aaa AAA $ 2,750 New Jersey Economic
Development Authority,
New Jersey American Water
Co., (AMT), (FGIC), 6.875%,
11/1/34 $ 3,072,025
Aaa AAA 11,500 Salem County, New Jersey,
Public Service Electric and Gas,
(MBIA), 5.55%, 11/1/33 11,507,475
---------------
$14,579,500
---------------
Insured Water & Sewer - 1.4%
Aaa AAA $ 2,500 Middlesex County Utilities
Authority, Sewer Revenue
(MBIA), Variable,
8/15/10 (1) $ 2,841,625
Aaa AAA 2,935 New Jersey Economic
Development Authority,
Middlesex Water, (MBIA),
5.25%, 2/1/29 2,836,824
---------------
$ 5,678,449
---------------
Lease/Certificate
of Participation - 3.1%
Baa1 A- $ 720 County of Atlantic, New
Jersey Public Facilities Lease
Agreement, 8.875%,
1/15/14 $ 995,918
Baa1 A- 785 County of Atlantic, New
Jersey Public Facilities Lease
Agreement, 8.875%,
1/15/15 1,089,682
A1 NR 1,000 Township of Bedminster,
New Jersey Board of
Education, 7.125%,
9/1/10 1,132,310
Aa AA- 1,000 Mercer County Improvement
Authority, Richard J. Hughes
Justice Complex, 6.05%,
1/1/14 1,003,250
Aa AA- 2,000 Mercer County Improvement
Authority, Richard J. Hughes
Justice Complex, 6.05%,
1/1/15 2,006,500
Aa AA- 1,500 Mercer County Improvement
Authority, Richard J. Hughes
Justice Complex, 6.05%,
1/1/16 1,504,575
Aa AA- 1,500 Mercer County Improvement
Authority, Richard J. Hughes
Justice Complex, 6.05%,
1/1/17 1,504,575
Aa AA- 1,250 New Jersey Building
Authority, 7.20%, 6/15/13 1,358,413
Aa AA- 2,590 New Jersey Building
Authority, Garden State
Savings Bonds, 0%, 6/15/10 1,236,140
NR A+ 1,000 New Jersey Economic
Development Authority,
Performing Arts Center
Site Acquisition, 6.75%,
6/15/12 1,083,870
---------------
$12,915,233
---------------
Life care - 1.3%
NR NR $ 300 New Jersey Economic
Development Authority,
Cadbury Corporation,
8.70%, 7/1/07 $ 329,001
NR NR 615 New Jersey Economic
Development Authority,
Cadbury Corporation,
7.50%, 7/1/21 628,751
NR NR 4,000 New Jersey Economic
Development Authority,
Keswick Pines, 8.75%,
1/1/24 4,235,960
---------------
$ 5,193,712
---------------
Miscellaneous - 3.0%
A1 A+ $ 1,650 New Jersey Economic
Development Authority,
Economic Recovery Fund,
0%, 9/15/09 $ 818,219
A1 A+ 5,500 New Jersey Economic
Development Authority,
Economic Recovery Fund,
0%, 3/15/13 2,232,175
NR NR 7,600 New Jersey Sports and
Exposition Authority,
Monmouth Park, 8.00%,
1/1/25 8,490,796
Aa A+ 1,000 New Jersey Sports and
Exposition Authority, 5.50%,
9/1/23 1,011,820
---------------
$12,553,010
---------------
Solid Waste - 6.9%
Ba NR $ 3,655 The Atlantic County Utilities
Authority, Solid Waste Revenue,
7.125%, 3/1/16 $ 3,754,928
Ba BBB+ 6,125 Pollution Control Financing
Authority of Camden
County, (AMT), 7.50%,
12/1/09 6,475,901
Ba NR 5,975 Mercer County Improvement
Authority, Solid Waste
System Revenue (AMT),
0%, 4/1/14 1,614,146
Ba NR 6,000 Mercer County Improvement
Authority, Solid Waste System
Revenue (AMT), 0%, 4/1/15 1,508,160
Ba NR 3,000 Mercer County Improvement
Authority, Solid Waste System
Revenue (AMT), 0%, 4/1/16 701,640
Ba NR 1,500 Passaic County Utilities
Authority Solid Waste System
Revenue, 7.00%, 11/15/07 1,523,565
Solid Waste - (continued)
NR A- 11,930 Union County, New Jersey
Utilities Authority, Solid Waste
Revenue, (AMT), 7.20%,
6/15/14 12,746,012
---------------
$ 28,324,352
---------------
Special Tax - 2.1%
Baa1 A $ 2,285 Puerto Rico Highway and
Transportation Authority,
6.625%, 7/1/12 $ 2,525,793
Baa1 A 1,000 Puerto Rico Highway and
Transportation Authority,
5.50%, 7/1/15 1,010,670
Baa1 A 4,100 Puerto Rico Highway and
Transportation Authority,
6.625%, 7/1/18 4,532,058
Baa1 BBB+ 550 Puerto Rico Infrastructure
Financing Authority , 7.90%,
7/1/07 602,426
---------------
$ 8,670,947
---------------
Transportation - 12.0%
NR BBB $ 1,250 Guam Airport Authority,
(AMT), 6.60%, 10/1/10 $ 1,293,125
NR BBB 2,000 Guam Airport Authority,
(AMT), 6.70%, 10/1/23 2,061,360
NR BBB 1,400 Guam Airport Authority,
6.50%, 10/1/23 1,433,082
A1 AA- 5,000 The Port Authority of New
York and New Jersey, (AMT),
6.25%, 1/15/27 5,203,350
A1 AA- 9,500 The Port Authority of New
York and New Jersey,
7.35%, 10/1/27 11,262,725
A1 AA- 2,645 The Port Authority of New
York and New Jersey,
6.75%, 8/1/26 2,870,380
A1 AA- 5,950 The Port Authority of New
York and New Jersey,
5.375%, 3/1/28 5,999,802
A1 AA- 9,000 The Port Authority of
New York and New Jersey,
Ba1 BB 5,100 The Port Authority of New
York and New Jersey,
Delta Air Lines Inc., 6.95%,
6/1/08 5,539,416
Baa2 BB+ 3,900 New Jersey Economic
Development Authority,
American Airlines, (AMT),
7.10%, 11/1/31 4,160,754
---------------
$ 49,625,804
---------------
Utilities - 5.8%
NR BBB $ 100 Guam Power Authority,
5.25%, 10/1/13 $ 92,405
NR BBB 750 Guam Power Authority,
5.25%, 10/1/23 674,460
NR BBB 5,000 Guam Power Authority,
6.75%, 10/1/24 5,291,550
Baa2 BBB 625 New Jersey Economic
Development Authority,
Elizabethtown Gas Co.,
(AMT), 6.75%, 10/1/21 641,050
A2 A 1,455 New Jersey Economic
Development Authority,
Natural Gas Facilities, 7.05%,
3/1/16 1,550,506
Baa1 A- 460 Puerto Rico Electric Power
Authority, 7.125%, 7/1/14 505,319
Baa1 A- 3,000 Puerto Rico Electric Power
Authority, 6.00%, 7/1/14 3,107,820
Baa1 A- 1,000 Puerto Rico Electric Power
Authority, 5.25%, 7/1/21 965,940
Baa1 A- 5,340 Puerto Rico Electric Power
Authority, 5.50%, 7/1/25 5,270,687
NR NR 5,105 Virgin Islands Water and
Power Authority, Electric
System Revenue, 7.40%,
7/1/11 5,482,515
---------------
$ 23,582,252
---------------
Water & Sewer - 2.2%
A1 AA- $ 2,000 Gloucester County Utilities
Authority, 6.50%, 1/1/21 $ 2,131,180
A3 A 3,250 New Jersey Economic
Development Authority,
Elizabethtown Water Revenue,
(AMT), 6.70%, 8/1/21 3,504,930
Aa AA 1,400 New Jersey Wastewater
Treatment Trust, 7.25%,
5/15/08 1,520,372
Aa AA 1,000 New Jersey Wastewater
Treatment Trust, 6.875%,
6/15/09 1,117,940
Aa AA 250 New Jersey Wastewater
Treatment Trust, 7.00%,
6/15/10 280,185
A1 AA 500 The Somerset Raritan
Valley Sewerage Authority
6.75%, 07/1/10 546,805
---------------
$ 9,101,412
---------------
Total tax-exempt investments
(identified cost $381,677,960) $412,290,899
===============
</TABLE>
(1) The above designated securities have been issued as inverse floater
bonds.
The Portfolio primarily invests in debt securities issued by New Jersey
municipalities. The ability of the issuers of the debt securities to meet
their obligations may be affected by economic developments in a specific
industry or municipality. In order to reduced the risk associated with
such economic developments, at January 31, 1996, 19.6% of the securities
in the portfolio of investments are backed by bond insurance of various
financial institutions and financial guaranty assurance agencies. The
aggregate percentage by financial institution ranged from 0.2% to 13.3%
of total investments.
See notes to financial statements
<TABLE>
<CAPTION>
Pennsylvania Municipals Portfolio
Portfolio of Investments - January 31, 1996 (Unaudited)
Tax-Exempt Investments - 100%
Ratings (Unaudited) Principal
- ---------------------- Amount
Standard (000
Moody's & Poor's Omitted) Security Value
- ----------------------------------------------------------------------------- ---------------
<S> <C> <C> <C> <C>
Assisted Living - 2.7%
NR NR $ 2,680 Chester County IDA Senior
Lifechoice of Paoli, 8.05%,
1/1/24 $ 2,715,992
NR NR 5,000 Chester County IDA Senior
Lifechoice of Kimberton,
8.50%, 9/1/25 5,096,100
NR NR 5,000 Delaware County IDA Senior
Quarters Project, 5.625%,
9/1/25 5,144,450
---------------
$12,956,542
---------------
Cogeneration - 5.6%
NR NR $12,000 PA EDA, Northampton
Generation Project (AMT),
6.50%, 1/1/13 $12,051,120
NR BBB- 9,000 PA EDA, Colver Project,
(AMT), 7.125%, 12/1/15 9,729,270
NR BBB- 5,000 PA EDA, Colver Project,
(AMT), 7.15%, 12/1/18 5,394,400
---------------
$27,174,790
---------------
Education - 4.8%
NR BBB $ 4,865 Erie Higher Education
Building Authority, Mercy-
hurst College, 5.75%,
3/15/20 $ 4,864,611
Baa1 NR 1,500 Latrobe, Saint Vincent
College, 6.75%, 5/1/24 1,631,460
NR AAA 2,000 Lehigh County, Allentown
College of St. Francis, 6.75%,
12/15/12 2,190,820
NR A- 4,225 Scranton-Lackawanna,
Pennsylvania University,
University of Scranton,
6.40%, 3/1/07 4,536,298
NR AA 9,700 Swarthmore Borough,
Swathmore College, 6.00%,
9/15/20 10,232,530
---------------
$23,455,719
---------------
Escrowed - 6.3%
Aaa AAA $ 5,600 Berks County, GO, (FGIC),
Variable, 11/15/20 (1) 6,667,192
Aaa A- 1,750 Chester County, HEFA,
Bryn Mar Hospitals, 6.75%,
7/1/14 2,014,390
Aaa AAA 2,000 Doylestown Hospital Authority,
(AMBAC), 6.90%, 7/1/19 2,217,800
Aaa AAA 1,405 Lycoming County, GO,
(FGIC), 6.40%, 8/15/11 1,556,038
Aaa AAA 945 Lycoming County, GO,
(FGIC), 6.40%, 8/15/11 1,046,588
NR A- 1,000 PA HEFA, Elizabeth College,
7.25%, 6/15/11 1,158,360
NR A- 6,900 PA IDA, Economic
Development, 7.00%, 1/1/11 7,917,405
NR A- 5,155 Philadelphia, Hospital and
Higher Education Facility
Authority, Presbyterian
Medical Center, 6.50%,
12/1/11 5,962,272
Baa1 A 1,000 Puerto Rico Aqueduct &
Sewer, 7.90%, 7/1/07 1,114,070
Aaa AAA 500 York County Hospital
Authority, (AMBAC), 7.00%,
7/1/21 569,610
---------------
$30,223,725
---------------
General Obligations - 6.2%
NR A $ 3,000 Chester Upland School
Distict, 6.375%, 9/1/21 3,170,040
NR A 3,000 Dauphin County, 6.90%,
6/2/26 3,307,260
A1 A+ 2,050 Lower Providence Township
Sewer Authority Guaranteed,
6.75%, 5/01/22 2,310,166
NR A 1,950 McKeesport Area School
District, 5.00%, 4/1/13 1,871,727
A1 AA- 465 Pennsylvania
6.75%, 1/1/07 509,073
A1 AA- 500 Pennsylvania
6.75%, 1/1/08 545,100
A1 AA- 5,435 Pennsylvania
6.50%, 11/1/09 5,872,789
A1 AA- 2,000 Pennsylvania
6.375%, 9/15/12 2,134,800
Baa1 A 5,100 Puerto Rico
5.40%, 7/1/25 4,960,617
Baa1 A 2,000 Puerto Rico Aqueduct &
Sewer, 6.25%, 7/1/12 2,208,700
Baa1 A 3,375 Puerto Rico Aqueduct &
Sewer, 5.00%, 7/1/19 3,196,631
---------------
$30,086,903
---------------
Hospitals - 18.8%
NR AAA $ 2,440 Allegheny County, IDA,
Presbyterian Medical Center,
6.75%, 2/1/26 $ 2,610,507
Baa BBB 2,000 Dauphin County, Community
General Osteopathic Hospital,
7.375%, 6/1/16 2,154,840
Hospitals - (continued)
NR A- 10,250 Delaware County, Riddle
Memorial Hospital, 6.50%,
1/1/22 10,394,320
NR NR 4,755 Hazelton Luzerne County,
Saint Joseph Medical Center,
8.375%, 7/1/12 4,992,890
Baa NR 2,670 Indiana County, Indiana
Hospital, 7.125%, 7/1/23 2,788,815
NR BBB+ 3,500 Lebanon County, Good
Samaritan Hospital, 6.00%,
11/15/18 3,377,570
A A 3,250 Lehigh County, Muhlenberg
Hospital, 6.60%, 7/15/22 3,364,498
NR BBB- 5,405 McKean County, Bradford
Hospital, 6.10%, 10/1/20 4,925,036
Baa1 BBB+ 2,550 Monroeville, Forbes Health
System, 6.25%, 10/1/15 2,589,806
NR BBB+ 2,615 Montgomery County,
Pottstown Medical Center,
6.875%, 11/15/20 2,697,896
A1 A+ 500 PA Hospital and Higher
Education, Allegheny General
Hospital, 7.25%, 9/1/17 549,120
A BBB+ 8,500 PA Hospital and Higher
Education, Albert Einstein
Medical Center, 7.625%,
4/1/11 9,179,575
Baa1 BBB+ 12,800 PA Hospital and Higher
Education. Graduate Health
System, 6.625%, 7/1/21 12,995,328
Baa1 A- 10,515 PA Hospital and Higher
Education, Temple University
Hospital, 6.625%, 11/15/23 11,034,231
Aa AA 1,000 PA Hospital and Higher
Education, Children's Hospital,
5.00%, 2/15/21 915,960
Aa NR 4,750 Pottsville, Hospital Authority,
Daughters of Charity, 5.00%,
8/15/12 4,523,948
Baa NR 4,115 Somerset County, Community
Hospital Project, 6.75%,
3/1/11 4,099,322
A NR 7,000 Washington County,
Monongahela Valley Hospital
6.75%, 12/1/08 7,554,820
---------------
$90,748,482
---------------
Housing - 7.2%
Aaa NR $ 2,175 Allegheny County SFMR,
(GNMA), 7.15%, 6/1/17 $ 2,231,876
NR AAA 2,900 Allegheny County SFMR,
Ladies Grand Army Project,
(FHA), 6.35%, 10/1/36 2,958,377
NR AAA 1,000 Bucks County, Mortgage
Revenue Bonds, Warminster
Heights Project, (FHA),
Section 8-A, 6.80%, 8/1/12 1,051,520
Aa AA 3,730 Pennsylvania HFA SFMR,
6.90%, 4/1/17 3,943,617
Aa AA 4,000 Pennsylvania HFA SFMR,
6.85%, 4/1/16 4,216,320
Aa AA 1,000 Pennsylvania HFA SFMR,
(AMT), Variable, 10/1/23 (1) 1,129,190
Aa AA 8,350 Pennsylvania HFA SFMR,
(AMT), 7.50%, 10/1/25 9,177,903
Aaa NR 3,000 Philadelphia Redevelopment
Authority, MF, 6.95%,
5/15/24 3,186,180
A1 A 4,235 Urban Redevelopment Authority
of Pittsburgh Mortgage, (AMT),
7.10%, 4/1/24 4,421,213
A1 A 265 Urban Redevelopment Authority
of Pittsburgh, 7.45%, 4/1/10 282,416
A1 A 1,000 Urban Redevelopment Authority
of Pittsburgh Mortgage, 7.125%,
4/1/15 1,067,560
A1 A 1,055 Urban Redevelopment Authority
of Pittsburgh Mortgage, (AMT),
7.40%, 4/1/24 1,113,447
---------------
$34,779,619
---------------
Industrial Development
Authority - 9.5%
A3 A $ 6,950 Butler County IDA, Witco
Corporation Project, 5.85%,
12/1/23 $ 7,058,212
NR BB 1,005 Clearfield County IDA,
KMart Corporation, 6.80%,
5/15/07 848,280
NR A+ 4,000 Franklin County IDA,
Corning Incorporated, 6.25%,
8/1/05 4,399,480
NR AAA 8,265 Mercer County IDA, Hillcrest
Nursing Center, 0%,
1/15/13 2,424,207
A2 A 12,000 New Morgan IDA, New
Morgan Landfill, (AMT),
6.50%, 4/1/19 12,750,240
Baa2 BBB- 5,000 Pennsylvania IDA, Macmilliam
Project, (AMT), 7.60%,
12/1/20 5,658,600
Baa1 BBB+ 4,450 Pennsylvania IDA, Sun
Company Project, (AMT),
7.60%, 12/1/24 5,004,114
Industrial Development
Authority - (continued)
NR NR 6,500 Philidelphia IDA Refrigerated
Enterprises Project, (AMT),
9.05%, 12/1/19 6,938,685
NR BB 1,105 Shamokin IDA, KMart
Corporation, 6.70%, 7/1/07 923,868
---------------
$46,005,686
---------------
Insured Education - 2.0%
Aaa AAA $ 5,000 Cumberland County Messiah
College Project, 5.125%,
10/1/15 $ 4,840,200
Aaa AAA 2,500 PA Higher Education Student
Loan, (AMBAC), (AMT),
7.15%, 9/1/21 2,698,675
Aaa AAA 1,500 PA Higher Education Student
Loan, (AMBAC), (AMT),
Variable, 3/1/22 (1) 1,541,235
Aaa AAA 700 PA Higher Education Student
Loan, (AMBAC), (AMT),
Variable, 9/1/26 (1) 773,283
---------------
$ 9,853,393
---------------
Insured General
Obligation - 4.4%
Aaa AAA $ 1,750 Deer Lakes School District,
(MBIA), 6.45%, 1/15/19 $ 1,854,615
Aaa AAA 2,170 Elizabeth Forward School
District, (MBIA), 0%, 9/1/20 572,055
Aaa AAA 2,170 Elizabeth Forward School
District, (MBIA), 0%, 9/1/21 541,849
Aaa AAA 2,170 Elizabeth Forward School
District, (MBIA), 0%, 9/1/22 513,227
Aaa AAA 2,170 Elizabeth Forward School
District, (MBIA), 0%, 9/1/23 486,123
Aaa AAA 4,345 Elizabeth Forward School
District, (MBIA), 0%, 9/1/24 921,966
Aaa AAA 1,460 Haverford School District,
(FGIC), 6.125%, 6/1/14 1,532,066
Aaa AAA 7,500 Keystone Oaks School
District, (AMBAC), Variable,
9/1/16 (1) 7,951,350
Aaa AAA 1,430 Mars Area School District,
(MBIA), 0%, 3/1/14 535,449
Aaa AAA 3,200 Philidelphia General
Obligation, (MBIA), 5.00%,
5/15/20 3,036,000
Aaa AAA 655 Rochester Area School District,
(AMBAC), 0%, 5/1/10 312,297
Aaa AAA 2,795 Venango County General
Obiligation, (AMBAC),
6.30%, 12/1/19 2,930,194
---------------
$21,187,191
---------------
Insured Hospitals - 8.7%
Aaa AAA $ 1,170 Allegheny County Children's
Hospital of Pittsburgh, (MBIA),
6.75%, 7/1/08 $ 1,252,848
Aaa AAA 3,750 Allegheny County Magee-
Womens Hospital, (FGIC), 0%,
10/1/15 1,285,912
Aaa AAA 5,000 Allegheny County University
of Pittsburgh Medical Center,
(MBIA), 5.375%, 12/1/25 4,930,100
Aaa AAA 1,400 Armstrong County Saint Francis
Health Care, (AMBAC), 6.25%,
6/1/13 1,487,472
Aaa AAA 2,500 Armstrong County Saint Francis
Health Care, (AMBAC), 6.00%,
8/15/08 2,645,550
Aaa AAA 4,400 Bucks County, IDA, Grand View
Hospital, (AMBAC), 5.25%,
7/1/21 4,244,284
Aaa AAA 775 Carbon County, Gnaden Memorial
Hospital, (AMBAC), 7.00%,
11/15/14 843,324
Aaa AAA 750 Erie County, Harlot Medical
Center, (AMBAC), 7.10%,
2/15/10 824,258
Aaa AAA 230 Lehigh County Health East,
Incorporated, (MBIA), 7.00%,
7/1/15 249,672
Aaa AAA 5,000 Lehigh County, St. Luke's
Hospital, (AMBAC), 6.25%,
7/1/22 5,294,200
Aaa AAA 1,000 Montgomery County, Abington
Memorial Hospital, (AMBAC),
Variable, 6/1/11 (1) 1,175,740
Aaa AAA 5,000 Philadelphia Hospital
& Higher Education, PA Hospital,
(FGIC), Variable, 2/15/12 (1) 5,011,450
Aaa AAA 3,500 Sayre Health Care Facilities
Authority, Guthrie Healthcare
System, (AMBAC), 6.00%,
3/1/21 3,591,910
Aaa AAA 1,500 Scranton-Lackawanna, Mercy
Health Systems, (MBIA),
6.90%, 1/1/23 1,608,015
Aaa AAA 7,500 Washington County, Shadyside
Hospital, (AMBAC), 5.75%,
12/15/14 7,687,650
---------------
$42,132,385
---------------
Insured Lease - 3.3%
Aaa AAA $ 4,595 Harrisburg Authority, Dauphin
County, Lease Revenue, (CGIC),
6.25%, 6/1/10 $ 5,007,723
Aaa AAA 3,000 Northumberland County,
Lease Revenue, (MBIA), 0%,
10/15/12 1,248,660
Aaa AAA 10,000 Commonwealth of Pennsylvania,
Lease Revenue, (AMBAC),
5.00%, 7/1/15 9,499,000
---------------
$15,755,383
---------------
Insured Special Tax - 0.9%
Aaa AAA $ 4,895 PA Intergovernmental Special
Tax, (MBIA), 5.00%,
6/15/22 $ 4,594,937
---------------
Insured Transportation - 0.5%
Aaa AAA $ 2,500 Delaware River Port Authority
(FGIC), 5.50%, 1/1/26 $ 2,515,050
---------------
Insured Utilities - 5.5%
Aaa AAA $ 4,000 Beaver County IDA, Ohio
Edison Company, (FGIC),
7.00%, 6/1/21 $ 4,375,800
Aaa AAA 10,000 Beaver County IDA, Ohio
Edison Company, (FGIC),
7.05%, 10/1/20 11,194,400
Aaa AAA 3,800 Puerto Rico Electric Power
Authority, (FSA), Variable,
7/1/02 (1) 4,377,258
Aaa AAA 6,050 Lehigh County IDA, PA
Power & Light Company,
(MBIA), 6.15%, 8/1/29 6,413,363
---------------
$26,360,821
---------------
Insured Water & Sewer - 3.5%
Aaa AAA $ 2,750 Allegheny County, Sewer
Revenue, (FGIC), 0%,
12/1/08 $ 1,420,292
Aaa AAA 2,500 Philadelphia Water and
Wastewater, (FGIC), Variable,
6/15/12 (1) 2,613,975
Aaa AAA 9,000 Philadelphia Water and
Wastewater, (CGIC), 5.50%,
6/15/15 9,025,380
Aaa AAA 3,960 Philadelphia Water and
Wastewater, (CGIC), 5.00%,
6/15/16 3,774,910
---------------
$16,834,557
---------------
Miscellaneous - 4.1%
NR AA $ 870 Pennsylvania Infrastructure
Investment Authority,
Pennvest, 6.80%, 9/1/10 $ 983,996
NR A 16,950 Pennsylvania Finance Authority,
Beaver County, 6.60%,
11/1/09 18,649,238
---------------
$19,633,234
---------------
Nursing Homes - 2.0%
NR NR $ 3,500 Montgomery County IDA,
Geriatric Health Care Institute,
8.375%, 7/1/23 $ 3,689,665
NR NR 1,460 Westmoreland County IDA,
Highland Health System,
9.25%, 6/1/22 1,552,389
NR NR 1,190 Philadelphia Hospital &
Higher Education Facilities,
Protestant Home, 8.625%,
7/1/21 1,224,795
NR NR 2,750 Wilkens Area IDA, Fairview
Extended Care, 10.25%,
1/1/21 3,158,980
---------------
$ 9,625,829
---------------
Special Tax Revenue - 0.4%
Baa1 A $ 1,500 Puerto Rico Highway and
Transportation Authority,
5.50%, 7/1/13 $ 1,537,185
Baa1 BBB+ 500 Puerto Rico Special Tax
Revenue, 7.50%, 7/1/09 543,150
---------------
$ 2,080,335
---------------
Utilities - 3.6%
Baa3 BB+ $ 500 Beaver County, IDA, Ohio
Edison Company, 7.75%,
9/1/24 $ 538,665
Baa1 BBB+ 3,250 Delaware County, IDA,
Philadelphia Electric Company,
7.375%, 4/1/21 3,547,668
Baa1 BBB+ 4,070 Montgomery County, IDA,
Philadelphia Electric Company,
(AMT), 7.60%, 4/1/21 4,443,055
Baa1 A- 3,370 Puerto Rico Electric Power
Authority Power Revenue,
0%, 7/1/17 1,003,519
NR NR 1,500 Virgin Islands Water and
Power Authority, 7.40%,
7/1/11 1,610,925
Utilities - (continued)
A2 A 6,025 Washington County IDA
West Penn Power Company,
6.05%, 4/1/14 6,297,993
---------------
$17,441,825
---------------
Total Tax-Exempt Investments
(identified cost, $449,367,988) $483,446,406
===============
</TABLE>
(1) The above designated securities have been issued as inverse floater
bonds.
The Portfolio primarily invests in debt securities issued by Pennsylvania
municipalities. The ability of the issuers of the debt securities to meet
their obligations may be affected by economic developments in a specific
industry or municipality. In order to reduce the risk associated with such
economic developments, at January 31, 1996, 28.8% of the securities in the
portfolio of investments are backed by bond insurance of various financial
institutions and financial guaranty assurance agencies. The aggregate
percentage by financial institution ranged from 0.9% to 15.0% of total
investments.
See notes to financial statements
<TABLE>
<CAPTION>
Municipals Portfolios
Financial Statements
Statements of Assets and Liabilities
January 31, 1996 (Unaudited)
Connecticut New Jersey Pennsylvania
Portfolio Portfolio Portfolio
-------------- -------------- --------------
<S> <C> <C> <C>
Assets:
Investments -
Identified cost $190,611,515 $381,677,960 $449,367,988
Unrealized appreciation 8,620,661 30,612,939 34,078,418
------------ ------------ ------------
Total investments, at value (Note 1A) $199,232,176 $412,290,899 $483,446,406
Cash 212,390 1,829,108 7,471,474
Receivable for investments sold 1,469,160 3,717,284 30,000
Interest receivable 2,443,198 5,272,325 6,525,251
Deferred organization expenses (Note 1D) 5,501 9,020 10,898
------------ ------------ ------------
Total assets $203,362,425 $423,118,636 $497,484,029
------------ ------------ ------------
Liabilities:
Payable for investments purchased $1,906,920 $8,708,966 $4,905,639
Payable for daily variation margin on open
financial futures contracts (Note 1E) 13,500 - -
Payable to affiliate -
Trustees' fees 876 1,488 1,488
Accrued expenses 7,556 13,914 3,607
------------ ------------ ------------
Total liabilities $1,928,852 $8,724,368 $4,910,734
------------ ------------ ------------
Net Assets applicable to investors' interest in Portfolio $201,433,573 $414,394,268 $492,573,295
============ ============ ============
Sources of Net Assets:
Net proceeds from capital contributions and withdrawals $192,906,345 $383,781,329 $458,494,877
Unrealized appreciation of investments and
financial futures contracts (computed
on the basis of identified cost) 8,527,228 30,612,939 34,078,418
------------ ------------ ------------
Total $201,433,573 $414,394,268 $492,573,295
------------ ------------ ------------
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
Six Months Ended January 31, 1996 (Unaudited)
Connecticut New Jersey Pennsylvania
Portfolio Portfolio Portfolio
----------- ----------- -----------
<S> <C> <C> <C>
Investment Income (Note 1B):
Interest income $5,910,733 $12,989,241 $15,739,768
----------- ----------- -----------
Expenses -
Investment adviser fee (Note 2) $427,474 $957,368 $1,168,263
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 5,176 9,183 9,388
Custodian fees (Note 2) 51,966 91,853 102,662
Legal and accounting services 30,242 38,571 40,671
Amortization of organization expenses (Note 1D) 1,322 2,250 2,660
Miscellaneous 14,534 27,309 18,833
----------- ----------- -----------
Total expenses $530,714 $1,126,534 $1,342,477
Deduct - Reduction of custodian fee (Note 2) 15,526 53,489 102,662
----------- ----------- -----------
Net expenses $515,188 $1,073,045 $1,239,815
----------- ----------- -----------
Net investment income $5,395,545 $11,916,196 $14,499,953
----------- ----------- -----------
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain (loss) -
Investment transactions (identified cost basis) $496,039 $1,942,528 $2,172,378
Financial futures contracts (851,688) (788,971) 612
----------- ----------- -----------
Net realized gain (loss) on investments $(355,649) $1,153,557 $2,172,990
----------- ----------- -----------
Change in unrealized appreciation (depreciation) -
Investments $10,174,997 $16,970,282 $20,097,215
Financial futures contracts (204,892) (45,304)-
----------- ----------- -----------
Net unrealized appreciation of investments $9,970,105 $16,924,978 $20,097,215
----------- ----------- -----------
Net realized and unrealized gain on investments $9,614,456 $18,078,535 $22,270,205
----------- ----------- -----------
Net increase in net assets from operations $15,010,001 $29,994,731 $36,770,158
=========== =========== ===========
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
Six months ended January 31, 1996 (Unaudited)
Connecticut New Jersey Pennsylvania
Portfolio Portfolio Portfolio
------------ ------------ ------------
<S> <C> <C> <C>
Increase (Decrease) in Net Assets:
Net investment income $5,395,545 $11,916,196 $14,499,953
Net realized gain (loss) on investment transactions (355,649) 1,153,557 2,172,990
Change in unrealized appreciation of investments 9,970,105 16,924,978 20,097,215
------------ ------------ ------------
Net increase in net assets from operations $15,010,001 $29,994,731 36,770,158
------------ ------------ ------------
Capital transactions -
Contributions $7,108,028 $13,522,474 $11,313,722
Withdrawals (15,960,245) (40,161,359) (57,760,889)
------------ ------------ ------------
Decrease in net assets resulting from capital transactions $(8,852,217) $(26,638,885) $(46,447,167)
------------ ------------ ------------
Total increase (decrease) in net assets $6,157,784 $3,355,846 $(9,677,009)
Net Assets:
At beginning of period 195,275,789 411,038,422 502,250,304
------------ ------------ ------------
At end of period $201,433,573 $414,394,268 $492,573,295
============ ============ ============
Year Ended July 31, 1995
Connecticut New Jersey Pennsylvania
Portfolio Portfolio Portfolio
------------ ------------ ------------
Increase (Decrease) in Net Assets:
From operations-
Net investment income $11,005,611 $24,622,808 $30,623,550
Net realized loss on investment transactions (5,335,034) (17,774,510) (20,294,984)
Change in unrealized appreciation of investments 4,533,624 16,631,954 19,002,225
------------ ------------ ------------
Net increase in net assets from operations $10,204,201 $23,480,252 $29,330,791
------------ ------------ ------------
Capital transactions -
Contributions $25,911,862 $43,487,001 $38,709,755
Withdrawals (32,878,239) (79,782,847) (102,576,381)
------------ ------------ ------------
Decrease in net assets resulting from capital transactions $(6,966,377) $(36,295,846) $(63,866,626)
------------ ------------ ------------
Total increase (decrease) in net assets $3,237,824 $(12,815,594) $(34,535,835)
Net Assets:
At beginning of year 192,037,965 423,854,016 536,786,139
------------ ------------ ------------
At end of year $195,275,789 $411,038,422 $502,250,304
============ ============ ============
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Supplementary Data
Connecticut Portfolio
---------------------------------------------------------------------------
Six months ended Year Ended
31-Jan-96 ------------------------------------------------------
(unaudited) July 31, 1995 July 31, 1994* Sept. 30, 1993**
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ratios (As a percentage of
average daily net assets):
Net expenses (1) 0.53%+ 0.53% 0.47%+ 0.46%+
Net investment income 5.39%+ 5.77% 5.40%+ 5.45%+
Portfolio Turnover 15% 29% 10% 10%
Net Assets end of period (000 omitted) $201,434 $195,276 $192,038 $159,848
New Jersey Portfolio
---------------------------------------------------------------------------
Six months ended Year Ended
31-Jan-96 ----------------------------------------------------
(unaudited) July 31, 1995 July 31, 1994* Sept. 30, 1993**
---------------------------------------------------------------------------
Ratios (As a percentage of
average daily net assets):
Net expenses (1) 0.54%+ 0.52% 0.50%+ 0.50%+
Net investment income 5.74%+ 5.96% 5.62%+ 5.67%+
Portfolio Turnover 21% 54% 25% 12%
Net Assets end of period (000 omitted) $414,394 $411,038 $423,854 $393,677
Pennsylvania Portfolio
---------------------------------------------------------------------------
Six months ended Year Ended
31-Jan-96 ----------------------------------------------------
(unaudited) July 31, 1995 July 31, 1994* Sept. 30, 1993**
---------------------------------------------------------------------------
Ratios (as a percentage of
average daily net assets):
Net expenses (1) 0.54%+ 0.49% 0.48%+ 0.50%+
Net investment income 5.82%+ 6.02% 5.66%+ 5.71%+
Portfolio Turnover 15% 44% 21% 17%
Net Assets end of period (000 omitted) $492,573 $502,250 $536,786 $497,001
+ Annualized.
*For the ten months ended July 31, 1994.
**For the period from the start of business, February 1, 1993, to September 30, 1993.
(1) The annualized expense ratios for this six month period ended January 31, 1996 have been adjusted to reflect a change
in reporting requirements. The new reporting guidelines require each Portfolio to increase their expense ratio by the
effect of any expense offset arrangements with their service providers. The expense ratios for each of the two years ended
July 31, 1995 and the period ended September 30, 1993 have not been adjusted to reflect this change.
See notes to financial statements
</TABLE>
Notes to Financial Statements
(Unaudited)
(1) Significant Accounting Policies
Connecticut Municipals Portfolio ("Connecticut Portfolio"), New Jersey
Municipals Portfolio ("New Jersey Portfolio") and Pennsylvania
Municipals Portfolio ("Pennsylvania Portfolio"), collectively the
Portfolios, are registered under the Investment Company Act of 1940 as
non-diversified, open-end management investment companies which were
organized as trusts under the laws of the State of New York on May 1,
1992. The Declarations of Trust permit the Trustees to issue interests
in the Portfolios. The following is a summary of significant accounting
policies of the Portfolios. The policies are in comformity with
generally accepted accounting principles.
A. Investment Valuations - Municipal bonds are normally valued on the
basis of valuations furnished by a pricing service. Taxable obligations,
if any, for which price quotations are readily available are normally
valued at the mean between the latest bid and asked prices. Futures
contracts listed on commodity exchanges are valued at closing settlement
prices. Short-term obligations, maturing in sixty days or less, are
valued at amortized cost, which approximates value. Investments for
which valuations or market quotations are unavailable are valued at fair
value using methods determined in good faith by or at the direction of
the Trustees.
B. Income - Interest income is determined on the basis of interest
accrued, adjusted for amortization of premium or discount when required
for federal income tax purposes.
C. Income Taxes - The Portfolios are treated as partnerships for Federal
tax purposes. No provision is made by the Portfolios for federal or
state taxes on any taxable income of the Portfolios because each
investor in the Portfolios is ultimately responsible for the payment of
any taxes. Since some of the Portfolios' investors are regulated
investment companies that invest all or substantially all of their
assets in the Portfolios, the Portfolios normally must satisfy the
applicable source of income and diversification requirements (under the
Internal Revenue Code) in order for their respective investors to
satisfy them. The Portfolios will allocate at least annually among their
respective investors each investor's distributive share of the
Portfolio's net taxable (if any) and tax-exempt investment income, net
realized capital gains, and any other items of income, gain, loss,
deductions or credit. Interest income received by the Portfolios on
investments in municipal bonds, which is excludable from gross income
under the Internal Revenue Code, will retain its status as income exempt
from federal income tax when allocated to each Portfolio's investors.
The portion of such interest, if any, earned on private activity bonds
issued after August 7, 1986, may be considered a tax preference item for
investors.
D. Deferred Organization Expenses - Costs incurred by a Portfolio in
connection with its organization are being amortized on the straight-
line basis over five years.
E. Financial Futures Contracts - Upon entering of a financial futures
contract, a Portfolio is required to deposit ("initial margin") either
in cash or securities an amount equal to a certain percentage of the
purchase price indicated in the financial futures contract. Subsequent
payments are made or received by a Portfolio ("margin maintenance") each
day, dependent on the daily fluctuations in the value of the underlying
security, and are recorded for book purposes as unrealized gains or
losses by a Portfolio. A Portfolio's investment in financial futures
contracts is designed only to hedge against anticipated future changes
in interest rates. Should interest rates move unexpectedly, a Portfolio
may not achieve the anticipated benefits of the financial futures
contracts and may realize a loss.
F. When-issued and Delayed Delivery Transactions - The Portfolios may
engage in when-issued and delayed delivery transactions. The Portfolios
record when-issued securities on trade date and maintain security
positions such that sufficient liquid assets will be available to make
payment for the securities purchased. Securities purchased on a when-
issued or delayed delivery basis are marked-to-market daily and begin
earning interest on settlement date.
G. Other - Investment transactions are accounted for on a trade date
basis.
H. Interim Financial Information - The interim financial statements
relating to January 31, 1996 and for the six month period then ended
have not been audited by independent certified public accountants, but
in the opinion of the Portfolio's management, reflect all adjustments,
consisting only of normal recurring adjustments, necessary for the fair
presentation of the financial statements.
(2) Investment Adviser Fee and Other Transactions with Affiliates
The investment adviser fee is earned by Boston Management and Research
(BMR), a wholly-owned subsidiary of Eaton Vance Management (EVM), as
compensation for management and investment advisory services rendered to
each Portfolio.
The fee is based upon a percentage of average daily net assets plus a
percentage of gross income (i.e., income other than gains from the sales
of securities).
For the six months ended January 31, 1996 each Portfolio paid advisory
fees as follows:
Portfolio Amount Effective Rate*
- ---------- ---------- ------------------
Connecticut $ 427,474 0.43%
New Jersey 957,368 0.47%
Pennsylvania 1,168,263 0.47%
* Advisory fees paid as a percentage of average daily net assets
(annualized).
Except as to Trustees of the Portfolios who are not members of EVM's or
BMR's organization, officers and Trustees receive remuneration for their
services to the Portfolios out of such investment adviser fee.
Investors Bank & Trust Company (IBT), serves as custodian of the
Portfolios. Prior to November 10, 1995, IBT was an affiliate of EVM and
BMR. Pursuant to the custodian agreements, IBT receives a fee reduced by
credits which are determined based on the average daily cash balances
each Portfolio maintains with IBT. All significant credit balances used
to reduce the Portfolios' custody fees are reflected as a reduction of
operating expense on the statements of operations. Certain of the
officers and Trustees of the Portfolios are officers and
directors/trustees of the above organizations.
Trustees of the Portfolio that are not affiliated with the Investment
Adviser may elect to defer receipt of all or a percentage of their
annual fees in accordance with the terms of the Trustees Deferred
Compensation Plan. For the six months ended January 31, 1996, no
significant amounts have been deferred.
(3) Investments
Purchases and sales of investments, other than U.S. Government
securities and short-term obligations, for the six-months ended January
31, 1996, were as follows:
<TABLE>
<CAPTION>
Connecticut Portfolio New Jersey Portfolio Pennsylvania Portfolio
-------------------------- -------------------------- --------------------------
<S> <C> <C> <C>
Purchases $29,516,260 $84,966,403 $ 72,937,855
Sales 32,117,333 96,415,333 103,247,490
</TABLE>
(4) Federal Income Tax Basis of Investments
The cost and unrealized appreciation (depreciation) in value of the
investments owned by each Portfolio at January 31, 1996, as computed on
a federal income tax basis, were as follows:
<TABLE>
<CAPTION>
Connecticut Portfolio New Jersey Portfolio Pennsylvania Portfolio
-------------------------- -------------------------- --------------------------
<S> <C> <C> <C>
Aggregate Cost $190,611,515 $381,677,960 $449,367,988
-------------- -------------- --------------
Gross unrealized appreciation $ 8,948,596 $ 30,730,423 $ 34,849,073
Gross unrealized depreciation 687,935 117,484 770,655
-------------- -------------- --------------
Net unrealized appreciation $ 8,260,661 $ 30,612,939 $ 34,078,418
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>
(5) Line of Credit
The Portfolios participate with other Portfolios and Funds managed by
BMR and EVM in a $120 million unsecured line of credit agreement with a
bank. The line of credit consists of a $20 million committed facility
and a $100 million discretionary facility. Each Portfolio may
temporarily borrow up to 5% of its total assets to satisfy redemption
requests or settle securities transactions. Interest is charged to each
Portfolio or Fund based on its borrowings at an amount above either the
bank's adjusted certificate of deposit rate, a variable adjusted
certificate of deposit rate, or a federal funds effective rate.
In addition, a fee computed at an annual rate of 1/4 of 1% on the $20
million committed facility and on the daily unused portion of the $100
million discretionary facility is allocated among the participating
funds and portfolios at the end of each quarter. The Connecticut
Portfolio, New Jersey Portfolio and Pennsylvania Portfolio did not have
any significant borrowings or allocated fees during the period.
(6) Financial Instruments
The Portfolios regularly trade in financial instruments with off-balance
sheet risk in the normal course of their investing activities to assist
in managing exposure to various market risks. These financial
instruments include written options and futures contracts and may
involve, to a varying degree, elements of risk in excess of the amounts
recognized for financial statement purposes.
The notional or contractual amounts of these instruments represent the
investment a Portfolio has in particular classes of financial
instruments and does not necessarily represent the amounts
potentially subject to risk. The measurement of the risks associated
with these instruments is meaningful only when all related and
offsetting transactions are considered.
A summary of obligations under these financial instruments at January
31, 1996 is as follows:
<TABLE>
<CAPTION>
Futures Contracts Net Unrealized
Portfolio Expiration Date Contracts Position Depreciation
- ---------- --------------- --------- -------- ------------
<S> <C> <C> <C> <C>
Connecticut 3/96 54 U.S. Treasury Bonds Short $93,433
-------
-------
</TABLE>
At January 31, 1996 the Connecticut Portfolio had sufficient cash and/or
securities to cover margin requirements on open financial futures
contracts. The New Jersey and Pennsylvania Portfolios did not have any
open obligations under these financial instruments at January 31, 1996.
Investment Management
Funds
Officers
Thomas J. Fetter
President
James B. Hawkes
Vice President, Trustee
Robert B. MacIntosh
Vice President
James L. O'Connor
Treasurer
Thomas Otis
Secretary
Independent Trustees
Donald R. Dwight
President, Dwight Partners, Inc.
Chairman, Newspaper of New England, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment Banking, Harvard University
Graduate School of Business Administration
Norton H. Reamer
President and Director, United Asset Management Corporation
John L. Thorndike
Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
Portfolios
Officers
Thomas J. Fetter
President
James B. Hawkes
Vice President, Trustee
Robert B. MacIntosh
Vice President and Portfolio Manager of
New Jersey Municipals Portfolio
Timothy T. Browse
Vice President and Portfolio Manager of
Pennsylvania Municipals Portfolio
Nicole Anderes
Vice President and Portfolio Manager of
Connecticut Municipals Portfolio
James L. O'Connor
Treasurer
Thomas Otis
Secretary
Independent Trustees
Donald R. Dwight
President, Dwight Partners, Inc.
Chairman, Newspaper of New England, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment Banking, Harvard University
Graduate School of Business Administration
Norton H. Reamer
President and Director, United Asset Management Corporation
John L. Thorndike
Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
Investment Adviser of State Municipal Portfolio
Boston Management and Research
24 Federal Street
Boston, MA 02110
Administrator of EV Traditional State Municipal Fund
Eaton Vance Management
24 Federal Street
Boston, MA 02110
Principal Underwriter
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 482-8260
Custodian
Investors Bank & Trust Company
89 South Street
P.O. Box 1537
Boston, MA 02205-1537
Transfer Agent
First Data Investors Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
This report must be preceded or accompanied by a current prospectus
which contains more complete information on the Funds, including
distribution plan, sales charges and expenses. Please read the
prospectus carefully before you invest or send money.
Eaton Vance Municipals Trust
24 Federal Street
Boston, MA 02110
T-3CSRC-3/96
|
|