<PAGE>
EV TRADITIONAL CALIFORNIA MUNICIPALS FUND
EV TRADITIONAL FLORIDA MUNICIPALS FUND
EV TRADITIONAL MASSACHUSETTS MUNICIPALS FUND
EV TRADITIONAL MISSISSIPPI MUNICIPALS FUND
EV TRADITIONAL NEW YORK MUNICIPALS FUND
EV TRADITIONAL OHIO MUNICIPALS FUND
EV TRADITIONAL WEST VIRGINIA MUNICIPALS FUND
SUPPLEMENT TO PROSPECTUS DATED FEBRUARY 1, 1996
1. EFFECTIVE NOVEMBER 29, 1996, EV TRADITIONAL RHODE ISLAND MUNICIPALS FUND
(THE "RHODE ISLAND FUND") IS OFFERED PURSUANT TO THE ATTACHED PROSPECTUS.
The Fund was formerly known as "EV Classic Rhode Island Municipals Fund".
A. THE FOLLOWING IS ADDED TO "SHAREHOLDER AND FUND EXPENSES":
<TABLE>
<CAPTION>
RHODE ISLAND
FUND
------------
<S> <C>
ANNUAL FUND AND ALLOCATED PORTFOLIO OPERATING EXPENSES
(as a percentage of average daily net assets)
Investment Adviser Fee (after fee reduction) .......................................... 0.12%
Other Expenses (including Service Plan Fees and after expense
reduction) .......................................................................... 0.42%
---
Total Operating Expenses (after expense reductions) ............................... 0.54%
</TABLE>
EXAMPLE
An investor would pay the following maximum initial sales charge and
expenses on a $1,000 investment, assuming (a) 5% annual return and (b)
redemption at the end of each period:
<TABLE>
<CAPTION>
RHODE ISLAND
FUND
------------
<S> <C>
1 Year ............................................................................... $ 43
3 Years .............................................................................. 54
5 Years .............................................................................. 67
10 Years .............................................................................. 103
</TABLE>
NOTES:
The table and Example summarize the aggregate expenses of the Rhode Island
Fund and Rhode Island Municipals Portfolio (the "Rhode Island Portfolio") and
are designed to help investors understand the costs and expenses they will bear,
directly or indirectly, by investing in the Rhode Island Fund. Information for
the Rhode Island Fund is based on its expenses for the most recent fiscal year,
except that Service Plan Fees are estimated for the fiscal year ending September
30, 1997 (assuming the Service Plan in effect on November 29, 1996). Absent a
fee reduction and an expense allocation, the Investment Adviser Fee, Other
Expenses and Total Operating Expenses would have been: 0.25%, 1.03% and 1.28%,
respectively.
B. THE FOLLOWING IS ADDED TO "THE FUNDS" FINANCIAL HIGHLIGHTS":
--------------------------------------------------------------------------
RHODE ISLAND FUND
------------------------
YEAR ENDED SEPTEMBER 30,
------------------------
1995 1994*
---- -----
NET ASSET VALUE, beginning of year ................... $ 8.890 $10.000
------- -------
INCOME (LOSS) FROM OPERATIONS:
Net investment income ............................ $ 0.442 $ 0.347
Net realized and unrealized gain (loss) on
investments .................................... 0.331 (1.046)
------- -------
Total income (loss) from operations .......... $ 0.773 $(0.699)
------- -------
LESS DISTRIBUTIONS:
From net investment income ....................... $(0.442) $(0.347)
In excess of net investment income(3) ............ (0.011) (0.064)
Total distributions .......................... $(0.453) $(0.411)
------- -------
NET ASSET VALUE, end of year ......................... $ 9.210 $ 8.890
======= =======
TOTAL RETURN(1) ...................................... 9.00% (7.29%)
RATIOS/SUPPLEMENTAL DATA**:
Net assets, end of year (000 omitted) ............ $ 3,034 $ 3,919
Ratio of net expenses to average daily net
assets(2) ...................................... 1.29% 1.23%+
Ratio of net investment income to averagedaily net
assets ......................................... 5.00% 4.50%+
**For the periods indicated, the operating expenses of the Fund and the
Portfolio reflect an allocation of expenses to the Administrator and/or the
Investment Adviser. Had such actions not been taken, net investment income
per share and the ratios would have been:
NET INVESTMENT INCOME PER SHARE ...................... $ 0.377 $ 0.299
======= =======
RATIOS (As a percentage of average daily net assets):
Expenses(2) ...................................... 2.03% 1.85%+
Net investment income ............................ 4.26% 3.88%+
+ Annualized.
* For the period from the start of business, December 7, 1993, to September
30, 1994 for the Rhode Island Fund. (1)Total investment return is
calculated assuming a purchase at the net asset value on the first day and
a sale at the net asset value on the last day of each period reported.
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.
(2)Includes the Fund's share of the Portfolio's allocated expenses.
(3)The Fund has adopted Statement of Position (SOP) 93-2: Determination,
Disclosure and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies. The SOP
requires that differences in the recognition or classification of income
between the financial statements and tax earnings and profits that result
in temporary over-distributions for financial statement purposes, are
classified as distributions in excess of net investment income or
accumulated net realized gains.
(4)Prior to November 29, 1996, the Fund made distribution fee payments
pursuant to a Distribution Plan. See "Service Plans."
C. THE FOLLOWING IS ADDED TO "THE FUNDS" INVESTMENT OBJECTIVES":
EV TRADITIONAL RHODE ISLAND MUNICIPALS FUND (the "Rhode Island Fund") seeks
to provide current income exempt from regular federal income tax and Rhode
Island State personal income taxes. The Rhode Island Fund seeks to meet its
objective by investing its assets in the Rhode Island Municipals Portfolio (the
"Rhode Island Portfolio").
D. THE FOLLOWING IS ADDED TO "HOW THE FUNDS AND THE PORTFOLIOS INVEST
THEIR ASSETS":
At least 80% of the net assets of the Rhode Island Portfolio will normally
be invested in obligations rated at least investment grade at the time of
investment. The balance of the Rhode Island Portfolio's net assets may be
invested in municipal obligations rated below investment grade.
As of September 30, 1995, the Rhode Island Portfolio had invested 19.1% of
its net assets in obligations subject to the AMT.
E. THE FOLLOWING IS ADDED TO "MANAGEMENT OF THE FUNDS AND THE PORTFOLIOS"
AND REFLECTS (I) THE ADVISORY FEE PAID BY THE RHODE ISLAND PORTFOLIO FOR THE
FISCAL YEAR ENDED SEPTEMBER 30, 1995 AS AN ANNUALIZED PERCENTAGE OF AVERAGE
DAILY NET ASSETS AND (II) THE PORTFOLIO MANAGER OF SUCH PORTFOLIO:
NET ASSETS
AS OF ADVISORY
PORTFOLIO SEPTEMBER 30, 1995 FEE
--------- ------------------ --------
Rhode Island ......................... $42,905,967 0.25%(1)
(1)To enhance the net income of the Rhode Island Portfolio, BMR made a
reduction of its advisory fee in the amount of $50,721.
Nicole Anderes has acted as portfolio manager of the Rhode Island Portfolio
since it commenced operations. She joined Eaton Vance and BMR as a Vice
President in January 1994. Prior to joining Eaton Vance, she was a Vice
President and portfolio manger at Lazard Freres Asset Management (1992-1994) and
a Vice President and Manager -- Municipal Research at Roosevelt & Cross
(1987-1992).
F. THE FOLLOWING IS ADDED TO "SERVICE PLANS":
During the fiscal year ended September 30, 1995, the Rhode Island Fund made
service fee payments equivalent to 0.20% (annualized) of the Fund's average
daily net assets for such period. These payments were made under a prior version
of the Plan.
2. THE FOLLOWING IS ADDED TO "HOW TO BUY FUND SHARES":
a. Shares of the Fund may be sold at net asset value to investment advisors,
financial planners or other intermediaries who place trades for their own
accounts or the accounts of their clients and who charge a management,
consulting or other fee for their services; clients of such investment
advisors, financial planners or other intermediaries who place trades for
their own accounts if the accounts are linked to the master account of
such investment advisor, financial planner or other intermediary on the
books and records of the broker or agent; and retirement and deferred
compensation plans and trusts used to fund those plans, including, but
not limited to, those defined in Section 401(a), 403(b) or 457 of the
Internal Revenue Code and "rabbi trusts."
b. Certain shares of the Rhode Island Fund purchased prior to November 29,
1996 and redeemed within the first year of their purchase (except shares
acquired through the reinvestment of distributions) generally will be
subject to a CDSC equal to 1% of the net asset value of redeemed shares.
The CDSC applicable to shares of the Rhode Island Fund purchased prior to
November 29, 1996 will be waived for shares redeemed (1) pursuant to a
Withdrawal Plan (see "Eaton Vance Shareholder Services"), (2) as part of
a distribution from a retirement plan qualified under Section 401, 403(b)
or 457 of the Internal Revenue Code of 1986, as amended, or (3) as part
of a minimum required distribution from other tax-sheltered retirement
plans.
3. THE FOLLOWING IS ADDED TO THE APPENDIX:
RHODE ISLAND. In 1994, the State recorded a $5.2 million operating
deficit, drawing down the undesignated general fund balance to $3.5
million. The fiscal year 1994 budget excluded nearly all gasoline tax
revenues and transportation expenditures, which will now be recorded in a
new dedicated surface transportation fund. The 1995 budget includes
budgeted reserves of $46.5 million (equal to 3% of fiscal 1995
expenditures).
In January, 1991, the collapse of the Rhode Island Share and Deposit
Indemnity Corporation precipitated the closure of 45 financial
institutions with a total deposit liability of approximately $1.7
billion. In response, the State created the Rhode Island Depositors
Economic Protection Corporation, a public corporation ("DEPCO"), to
assist in the resolution of the resulting banking crisis. By the end of
1992, substantially all of the frozen deposits had been repaid or
otherwise made available to depositors through the reopening, sale or
liquidation of the closed institutions. As of June, 1994, DEPCO had
outstanding debt totaling approximately $494.2 million, the proceeds of
which were used to facilitate the sale of certain institutions and the
payout of frozen deposits. Receipts from 0.6% of the State's sales and
use tax rate are dedicated to a special revenue fund to be used for
repayment of the special obligation bonds. Over the next 20 years, DEPCO
is also obligated to pay former depositors approximately $54 million.
The State's budget difficulties, together with the banking crisis and the
issuance of the DEPCO debt, contributed to a lowering of the State's
credit rating in 1992 to A-1 by Moody's and AA- with a stable outlook
from S&P. General obligations of Rhode Island are rated AA-, A-1 and AA-,
by S&P, Moody's and Fitch, respectively.
RHODE ISLAND TAXES. The Rhode Island Fund obtained an opinion from
Hinckley, Allen & Snyder, special tax counsel to the Rhode Island Fund,
that under Rhode Island law, dividends paid by the Rhode Island Fund are
exempt from Rhode Island state income tax for individuals who reside in
Rhode Island to the extent such dividends are excluded from gross income
for federal income tax purposes and are derived from interest payments on
obligations of Rhode Island, its political subdivisions, the Territories
or the United States ("Rhode Island obligations"). Other distributions
from the Rhode Island Fund, including distributions from capital gains,
are generally not exempt from Rhode Island state personal income tax.
November 1, 1996
T-7TFC2/1P
<PAGE>
EV TRADITIONAL CALIFORNIA MUNICIPALS FUND
EV TRADITIONAL FLORIDA MUNICIPALS FUND
EV TRADITIONAL MASSACHUSETTS MUNICIPALS FUND
EV TRADITIONAL MISSISSIPPI MUNICIPALS FUND
EV TRADITIONAL NEW YORK MUNICIPALS FUND
EV TRADITIONAL OHIO MUNICIPALS FUND
EV TRADITIONAL WEST VIRGINIA MUNICIPALS FUND
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION DATED FEBRUARY 1, 1996
EFFECTIVE NOVEMBER 29, 1996, THE EV TRADITIONAL RHODE ISLAND FUND (THE
"RHODE ISLAND FUND") IS OFFERED PURSUANT TO THE ATTACHED STATEMENT OF
ADDITIONAL INFORMATION.
The attached Part II for the Rhode Island Fund is added to this Statement of
Additional Information. The financial statements for the Rhode Island Fund
(formerly "EV Classic Rhode Island Municipals Fund") are contained in the
attached annual report to shareholders.
November 1, 1996
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART II
This Part II provides information about EV TRADITIONAL RHODE ISLAND
MUNICIPALS FUND. The investment objective of the Fund is to provide current
income exempt from regular federal income tax and Rhode Island State personal
income taxes. The Fund currently seeks to achieve its investment objective by
investing its assets in the Rhode Island Municipals Portfolio (the "Portfolio").
RISKS OF CONCENTRATION
The following information as to certain Rhode Island considerations is given
to investors in view of the Portfolio's policy of concentrating its investments
in Rhode Island issuers. Such information supplements the information in the
Prospectus. It is derived from sources that are generally available to investors
and is believed to be accurate. Such information constitutes only a brief
summary, does not purport to be a complete description and is based on
information from official statements relating to securities offerings of Rhode
Island issuers. Neither the Trust nor the Portfolio has independently verified
this information.
The economic slowdown beginning in 1989 resulted in significant State budget
constraints. Declining State revenues, combined with increased demand for
certain governmental services, such as public assistance, have occurred as a
result of the difficult general economic conditions. State law requires that the
State end each year with a balanced budget and does not permit a deficit to
continue into the next fiscal year. In response to this legal mandate and
overall budgetary pressures, the State has undertaken a variety of strong
financial management controls and initiatives, including reducing expenditures,
improving revenue estimating procedures and increasing taxes.
The 1993 fiscal year budget contained a number of revenue raising
components, including a temporary 32% "piggyback" personal income tax rate for
federal liability greater than $15,000, initiating video lottery games at two
existing gambling sites, levying new health care provider assessments on nursing
homes and certain outpatient care facilities (but not hospitals), and increasing
estimated "disproportionate share" reimbursements, a substantial portion of
which is expected to be one-time. In 1993, the State recorded an $8.4 million
operating surplus, boosting the undesignated general fund balance to $8.7
million. Audited expenditures in excess of revenues were $5.2 million drawing
down the General Fund balance to $3.5 million. The 1995 budget includes budgeted
reserves of $46.5 million (equal to 3% of fiscal 1995 expenditures).
The collapse of Rhode Island Share and Indemnity Corporation, a private
insurer ("RISDIC"), at the end of December 1990 precipitated the closure on
January 1, 1991 of financial institutions with total deposit liabilities of
approximately $1.7 billion. The resulting banking crisis presented risks of
short-term dislocation in many parts of the State which the State sought to
address through the creation of the Rhode Island Depositors Economic Protection
Corporation ("DEPCO"). Through DEPCO, the State's efforts to address the crisis
were directed at minimizing the larger economic risks as well as alleviating the
social costs from the potential loss of personal savings for many individual
depositors. By the end of 1992, substantially all of the frozen deposits had
been repaid or otherwise made available to the affected depositors through the
reopening, sale or liquidation of the closed institutions. Over the next 20
years, DEPCO is also obligated to pay former depositors approximately $54
million. The necessary steps to resolve the crisis, including the property
management and disposition programs to be conducted by DEPCO in its efforts to
meet the cash requirements for depositor repayments, are under way. DEPCO has
incurred approximately $494.2 million in outstanding debt. Receipts from .6% of
the State's sales and use tax rate are dedicated to a special revenue fund to be
used for repayment of the special obligation bonds.
The State's budget difficulties, together with the banking crisis and the
issuance of the DEPCO debt, contributed to a lowering of the State's credit
rating in 1992 to A1 by Moody's Investors Services, Inc. and AA- "with a stable
outlook" from Standard & Poor's Ratings Group.
Below the level of State government, Rhode Island is divided into 39 cities
and towns which exercise the functions of local general government. As provided
in the State Constitution, municipalities have the right of self government in
all local matters by adopting a "home rule" charter. Every city or town,
however, has the power to levy, assess and collect taxes, or borrow money, only
as specifically authorized by the General Assembly. Legislation enacted in 1985
limits tax levy or rate increases by municipalities to an increase no greater
than 5 1/2% over the previous year. However tax levy or rate increases of
greater than 5 1/2% are permitted in the event that debt service costs on
present and future general obligation debt increase at a rate greater than
5 1/2%. This limitation may also be exceeded in the event of loss of
non-property tax revenue, or when an emergency situation arises and is certified
by the State Auditor General. In addition, State statutes require every city and
town to adopt a balanced budget for each fiscal year. Local governments rely
principally upon general real and tangible personal property taxes and
automobile excise taxes for provision of revenue.
In recent years, Rhode Island has relieved its cities and towns from a
portion of the costs of major public expenditures through the assumption of
costs and services by the State. However, the economic downturn affecting the
State's revenue base necessitated a reduction in aid by the State in fiscal year
1991. Under the fiscal year 1995 budget, State aid to municipalities is slated
to be $469.6 million.
The largest category of State aid to cities and towns involves assistance
programs for school operations and school buildings. The general school aid
program, which amounted to $268.7 million in 1990 and $295.2 million in 1991,
reimburses communities on the basis of the relationship between the number of
students and the property wealth of the community and its personal income.
Communities are guaranteed a minimum reimbursement of 15 percent of eligible
expenditures of the second prior year for fiscal year 1993 and 9 percent
thereafter. The fiscal 1993 budget modified formulas related to the disbursement
of funds under the major education aid programs. Under the modifications,
greater aid would be distributed to those communities with less property wealth.
The Governor's fiscal year 1994 budget proposal would further modify the
allocation formula with the result that 21 communities would receive less State
assistance in fiscal year 1994 than they were allocated in fiscal year 1993. In
addition to school aid, the State provides a general revenue sharing program for
local governments which is intended for direct property tax relief and
incorporates a distribution formula based upon relative population, tax effort
and personal income of each municipality. In addition, the State provides
municipal aid programs which include reimbursement to local governments for
their cost of carrying out certain State mandates. For fiscal year 1992, $6.0
million was appropriated. No funds were appropriated for fiscal year 1993.
However, the 1991 General Assembly passed legislation that provides that
commencing in the fiscal year 1994, municipalities will receive 1% of total
State tax revenues. The formula for the 1995 education aid budget established a
Poverty Weight Fund (PWF). Of the $414.7 million budgeted for educational aid,
$46.1 million was distributed through the PWF. The Governor's recommended budget
for fiscal year 1996 increases school aid by $22.9 million (5.3%), including
$20.7 million in operations aid, which will be distributed through the PWF.
FEES AND EXPENSES
INVESTMENT ADVISER
As of September 30, 1995, the Portfolio had net assets of $42,905,967. For
the fiscal year ended September 30, 1995, absent a fee reduction, the Portfolio
would have paid BMR advisory fees of $100,476 (equivalent to 0.25% of the
Portfolio's average daily net assets for such year). To enhance the net income
of the Portfolio, BMR made a reduction of its advisory fee in the amount of
$50,721. For the fiscal year ended September 30, 1994, absent a fee reduction,
the Portfolio would have paid BMR advisory fees of $63,773 (equivalent to 0.21%
of the Portfolio's average daily net assets for such year). To enhance the net
income of the Portfolio, BMR made a reduction of the full amount of its advisory
fee. For the period from the Portfolio's start of business June 11, 1993, to the
fiscal year ended September 30, 1993, absent a fee reduction, the Portfolio
would have paid BMR advisory fees of $4,206 (equivalent to 0.15% (annualized) of
the Portfolio's average net assets for such period). To enhance the net income
of the Portfolio, BMR made a reduction of the full amount of its advisory fee,
and BMR was allocated expenses related to the operation of the Portfolio in the
amount of $3,373. The Portfolio's Investment Advisory Agreement with BMR is
dated June 7, 1993 and remains in effect until February 28, 1996. The Agreement
may be continued as described under "Investment Adviser and Administrator" in
Part I of this SAI.
ADMINISTRATOR
As stated under "Investment Adviser and Administrator" in Part I of this
SAI, the Administrator receives no compensation for providing administrative
services to the Fund. For fiscal year ended September 30, 1995 and for the
period from the start of business, December 7, 1993, to the fiscal year ended
September 30, 1994, $20,429 and $18,025, respectively, of the Fund's operating
expenses were allocated to the Administrator.
SERVICE PLAN
Prior to November 29, 1996, the Fund made sales commission, distribution fee
and service fee payments pursuant to a Distribution Plan. During the fiscal year
ended September 30, 1995, the Principal Underwriter paid to Authorized Firms
sales commissions of $24,223 on sales of Fund shares. During the same period,
the Fund paid sales commission payments under the Plan to the Principal
Underwriter aggregating $25,614. Such payments reduced Uncovered Distribution
Charges. During such period, contingent deferred sales charges aggregating
approximately $186 were imposed on early redeeming shareholders and paid to the
Principal Underwriter to reduce Uncovered Distribution Charges. As at September
30, 1995, the outstanding Uncovered Distribution Charges of the Principal
Underwriter calculated under the Plan amounted to approximately $340,000 (which
amount was equivalent to 11.2% of the Fund's net assets on such date). During
the fiscal year ended September 30, 1995, the Fund paid service fee payments
under the Plan aggregating $6,823, of which $6,465 was paid to Authorized Firms
and the balance of which was retained by the Principal Underwriter.
PRINCIPAL UNDERWRITER
For the fiscal year ended September 30, 1995, the Fund paid the Principal
Underwriter $115.00 for repurchase transactions handled by the Principal
Underwriter (being $2.50 for each such transaction).
CUSTODIAN
For the fiscal year ended September 30, 1995, the Fund incurred custody fees
of $3,503 which were reduced by fee credits of $561 and the Portfolio incurred
custody fees of $25,652 which were reduced by fee credits of $16,510.
BROKERAGE
For the fiscal year ended September 30, 1995, the fiscal year ended
September 30, 1994 and for the period from the start of business, June 11, 1993,
to the fiscal year ended September 30, 1993, the Portfolio paid no brokerage
commissions on portfolio transactions.
TRUSTEES
The fees and expenses of those Trustees of the Trust and of the Portfolio
who are not members of the Eaton Vance organization (the noninterested Trustees)
are paid by the Fund (and the other series of the Trust) and the Portfolio,
respectively. (The Trustees of the Trust and of the Portfolio who are members of
the Eaton Vance organization receive no compensation from the Fund or the
Portfolio.) During the fiscal year ended September 30, 1995, the noninterested
Trustees of the Trust and the Portfolio earned the following compensation in
their capacities as Trustees from the Fund, the Portfolio and the funds in the
Eaton Vance fund complex(1):
<TABLE>
<CAPTION>
AGGREGATE AGGREGATE TOTAL COMPENSATION
COMPENSATION COMPENSATION FROM TRUST AND
NAME FROM FUND FROM PORTFOLIO FUND COMPLEX
---- ------------ -------------- --------------
<S> <C> <C> <C>
Donald R. Dwight .............................. $0 $336(2) $135,000(4)
Samuel L. Hayes, III .......................... 0 324(3) 150,000(5)
Norton H. Reamer .............................. 0 316 135,000
John L. Thorndike ............................. 0 321 140,000
Jack L. Treynor 0 346 140,000
<FN>
- ----------
(1) The Eaton Vance fund complex consists of 211 registered investment companies or series thereof.
(2) Includes $113 of deferred compensation.
(3) Includes $103 of deferred compensation.
(4) Includes $35,000 of deferred compensation.
(5) Includes $33,750 of deferred compensation.
</TABLE>
ADDITIONAL OFFICER INFORMATION
In addition to the officers of the Portfolio listed under "Officers of the
Trust and the Portfolio" in Part I of this SAI, Nicole Anderes (34) has served
as a Vice President of the Portfolio since June 19, 1995. Ms. Anderes has been a
Vice President of BMR and Eaton Vance since 1994, and is an officer of various
investment companies managed by Eaton Vance or BMR. Prior to joining Eaton
Vance, Ms. Anderes was Vice President and portfolio manager, Lazard Freres Asset
Management (1992-1994) and Vice President and Manager -- Municipal Research,
Roosevelt & Cross (1978-1992).
PERFORMANCE INFORMATION
The table below indicates the cumulative and average annual total return on
a hypothetical investment of $1,000 in the Fund from June 11, 1993 through
September 30, 1995 and for the one-year period ended September 30, 1995. The
total return for the period prior to the Fund's commencement of operations on
December 7, 1993 reflects the Portfolio's total return (or that of its
predecessor) adjusted to reflect any applicable Fund sales charge. The total
return for such prior period has not been adjusted to reflect the Fund's service
fees and certain other expenses. The performance reflects the Fund's sales
charge effective November 29, 1996.
<TABLE>
VALUE OF A $1,000 INVESTMENT
<CAPTION>
TOTAL RETURN EXCLUDING TOTAL RETURN INCLUDING
VALUE OF SALES CHARGE SALES CHARGE
INVESTMENT INVESTMENT AMOUNT OF INVESTMENT ------------------------------ ------------------------------
PERIOD DATE INVESTMENT* ON 9/30/95 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
- ------------------ -------------- ------------ ----------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Life of
the Fund** 6/11/93 $962.52 $1,017.71 5.73% 2.44% 1.77% 0.76%
1 Year
Ended
9/30/95** 9/30/94 $962.12 $1,048.75 9.00% 9.00% 4.92% 4.92%
Past performance is not indicative of future results. Investment return and principal value will fluctuate; shares, when
redeemed, may be worth more or less than their original cost.
<FN>
- ----------
* Initial investment less the maximum sales charge of 3.75%. This sales charge is effective November 29, 1996. Fund shares
purchased prior thereto and redeemed within one year of purchase are subject to a CDSC of 1%.
**If a portion of the Fund's expenses had not been subsidized, the Fund would have had lower returns.
</TABLE>
For the thirty-day period ended September 30, 1995, the yield of the Fund
was 4.43%. The yield required of a taxable security that would produce an
after-tax yield equivalent to that earned by the Fund of 4.43% would be 7.02%,
assuming a combined federal and State tax rate of 36.88%. If a portion of the
Portfolio's and the Fund's expenses had not been allocated to the Investment
Adviser and the Administrator, respectively, the Fund would have had a lower
yield. The yield reflects the Fund's sales charge effective November 29, 1996.
See the Tax Equivalent Yield Table in this Part II for information
concerning applicable tax rates and income brackets.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As at October 31, 1995, the Trustees and officers of the Trust, as a group,
owned in the aggregate less than 1% of the outstanding shares of the Fund. As of
October 31, 1995, Merrill Lynch, Pierce, Fenner & Smith, Inc., Jacksonville, FL
was the record owner of approximately 72.1% of the outstanding shares, which
were held on behalf of its customers who are the beneficial owners of such
shares, and as to which it had voting power under certain limited circumstances.
To the knowledge of the Trust, no other person owned of record or beneficially
5% or more of the Fund's outstanding shares as of such date.
OTHER INFORMATION
The Trust, which is a Massachusetts business trust established in 1985, was
originally called Eaton Vance High Yield Municipals Trust. The Trust changed its
name to Eaton Vance Municipals Trust on January 7, 1991. The Fund changed its
name from EV Classic Rhode Island Tax Free Fund to EV Classic Rhode Island
Municipals Fund on December 8, 1995 and to EV Traditional Rhode Island
Municipals Fund on November 29, 1996.
<PAGE>
TAX EQUIVALENT YIELD TABLE
The table below gives the approximate yield a taxable security must earn at
various income brackets to produce after-tax yields equivalent to those of tax
exempt bonds yielding from 4% to 7% under the regular federal income tax and
Rhode Island State income tax laws and tax rates applicable for 1996.
<TABLE>
<CAPTION>
A FEDERAL AND RHODE ISLAND STATE
COMBINED TAX EXEMPT YIELD OF:
SINGLE RETURN JOINT RETURN FEDERAL AND 4% 4.5% 5% 5.5% 6% 6.5% 7%
- ------------------- ---------------------- RI STATE -----------------------------------------------------------------
(TAXABLE INCOME*) TAX BRACKET+ IS EQUIVALENT TO A FULLY TAXABLE YIELD OF:
- ------------------------------------------- ------------- -----------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Up to $ 24,000 Up to $ 40,100 18.51% 4.91% 5.52% 6.14% 6.75% 7.36% 7.98% 8.59%
$ 24,001 - $ 58,150 $ 40,101 - $ 96,900 33.54 6.02 6.77 7.52 8.28 9.03 9.78 10.53
$ 58,151 - $121,300 $ 96,901 - $147,700 36.88 6.34 7.13 7.92 8.71 9.51 10.30 11.09
$121,301 - $263,750 $147,701 - $263,750 42.34 6.94 7.80 8.67 9.54 10.41 11.27 12.14
Over $263,750 Over $263,750 46.18 7.43 8.36 9.29 10.22 11.15 12.08 13.01
<FN>
*Net amount subject to federal and Rhode Island personal income tax after deductions and exemptions.
+The combined tax rates assume a Rhode Island rate of 27.5% of federal income tax liability and that Rhode Island taxes
are itemized deductions for federal income tax purposes. Investors who do not itemize deductions on their federal
income tax return will have a higher combined bracket and higher taxable equivalent yield than those indicated above.
The applicable federal tax rates within the brackets are 15%, 28%, 31%, 36% and 39.6%, over the same ranges of income.
</TABLE>
Note: The federal income tax portion of above-indicated combined income tax
brackets does not take into account the effect of a reduction in the
deductibility of itemized deductions (including Rhode Island State income taxes)
for taxpayers with adjusted gross income in excess of $117,950. The tax brackets
also do not show the effects of phaseout of personal exemptions for single
filers with adjusted gross income in excess of $117,950 and joint filers with
adjusted gross income in excess of $176,950. The effective tax brackets and
equivalent taxable yields of such taxpayers will be higher than those indicated
above.
Yields shown are for illustration purposes only and are not meant to represent
the Fund's actual yield. No assurance can be given that the Fund will achieve
any specific tax exempt yield. While it is expected that the Portfolio will
invest principally in obligations, the interest from which is exempt from the
regular federal income tax and Rhode Island personal income taxes, other income
received by the Portfolio and allocated to the Fund may be taxable. The table
does not take into account state or local taxes, if any, payable on Fund
distributions except for Rhode Island personal income taxes. It should also be
noted that the interest earned on certain "private activity bonds" issued after
August 7, 1986, while exempt from the regular federal income tax, is treated as
a tax preference item which could subject the recipient to the federal
alternative minimum tax. The illustrations assume that the federal alternative
minimum tax is not applicable and do not take into account any tax credit that
may be available.
The information set forth above is as of the date of this SAI. Subsequent tax
law changes could result in prospective or retroactive changes in the tax
brackets, tax rates, and tax equivalent yields set forth above. Investors should
consult with their tax adviser for additional information.
