<PAGE>
[LOGO OF EATON VANCE Investing
MUTUAL FUNDS for the
APPEARS HERE] 21st EDUCATION
Century [PHOTO OF BUILDING APPEARS HERE]
Annual Report September 30, 1997
[PHOTO OF HIGHWAY APPEARS HERE]
EATON VANCE
MUNICIPALS California
TRUST Florida
Massachusetts
TRADITIONAL Mississippi
Global Management - Global Distribution New York
Ohio
Rhode Island
[PHOTO OF BRIDGE APPEARS HERE] West Virginia
<PAGE>
EV Traditional Municipals Funds as of September 30, 1997
LETTER TO SHAREHOLDERS
[PHOTO OF THOMAS J. FETTER APPEARS HERE]
Thomas J. Fetter,
President
The municipal bond market continued to respond favorably in 1997 to an economic
climate of solid growth yet low inflation. Gross domestic product (GDP), a
widely-used measure of economic performance, grew 4.9% in the first quarter,
3.3% in the second, and 3.5% in the third. However, inflation remained in the 2-
to-3% range due to higher productivity brought on by technology and an increase
in global competition. While the Federal Reserve elected to raise the Fed Funds
Rate -- the primary short-term interest rate benchmark -- 0.25% to 5.5% in
March, it has since maintained a stable interest rate policy in response to a
benign inflation outlook. Not surprisingly, municipal bonds have turned in solid
returns, with the Lehman Brothers Municipal Bond Index* -- an unmanaged index of
municipal bonds -- rising 9.0% during the year ended September 30, 1997.
The municipal bond market has been characterized by heavy issuance and strong
investor demand
According to Standard & Poor's, nearly $227 billion in municipal securities were
brought to market in 1996, a 14% increase from the prior year. Thus far in 1997,
municipal issuance has kept up that pace. Issuers have redeemed older bonds with
relatively high coupons and replaced them with new bonds bearing lower coupons.
This municipal refunding activity has been sparked in part by the strong market
rally of recent months that has seen yields for 30-year AAA-rated general
obligations decline to the 5.25% level at September 30. At that level, municipal
yields represent 82% of 30-year Treasury yields, making them an attractive
option for investors.
*It is not possible to invest directly in an index.
- --------------------------------------------------------------------------------
Effective November 24, 1997, Thomas J. Fetter will be the Portfolio Manager for
the New York Municipals Portfolio, and Robert B. MacIntosh will be the Portfolio
Manager for the Rhode Island Municipals Portfolio. Mr. Fetter and Mr. MacIntosh
are both Vice Presidents of Eaton Vance Management and Boston Management and
Research, and both also manage other Eaton Vance municipal portfolios.
- --------------------------------------------------------------------------------
Municipal Bond yield 82% of Treasury yields
5.25% 8.20%
30-year AAA rated Taxable equivalent yield
General Obligation (GO) Bonds* in 36% tax bracket
6.40%
30 Year Treasury Bond
Principal and interest payments of treasury securities are guaranteed by the
U.S. government.
*GO yields are a compilation of a representative variety of general obligations
and are not necessarily representative of the Fund's yield. Statistics as of
September 30, 1997.
Past performance is no guarantee of future results.
Source: Bloomberg, LP
Amid Washington's newly found fiscal responsibility, the outlook for municipal
bonds appears bright
We believe the long-term outlook for municipal bonds has improved in the past
year for several reasons. First, Congress and the Clinton Administration agreed
to balance the budget by 2002. This would sharply reduce the government's
borrowing needs, leading to lower interest rates and channeling investments into
more productive areas of the economy. Second, the marginal tax rates of many
taxpayers remain high. For them, municipal bonds may still be the best vehicle
for tax relief. And finally, a balanced investment portfolio features equities,
bonds, and cash. The stock market has shown higher-than-normal volatility this
year, capped by steep price declines in late October. Following three years of
stock market outperformance, we believe investors should consider reallocating a
portion of their portfolios to bonds to maintain a prudent asset allocation. For
these reasons, we believe that the municipal market will continue to attract
tax-conscious investors. Eaton Vance will continue its leadership role in
seeking high, tax-free income.
Sincerely,
/s/ Thomas J. Fetter
Thomas J. Fetter,
President
November 10, 1997
- --------------------------------------------------------------------------------
Mutual fund shares are not insured by the FDIC and are not deposits or other
obligations of, or guaranteed by, any depository institution. Shares are subject
to investment risks, including possible loss of principal invested.
- --------------------------------------------------------------------------------
2
<PAGE>
EV Traditional California Municipals Fund as of September 30, 1997
INVESTMENT UPDATE
[PHOTO OF CYNTHIA J. CLEMSON APPEARS HERE]
Cynthia J. Clemson,
Portfolio Manager
The Economy
- --------------------------------------------------------------------------------
. 1997 has been another good year for California's economy. Strength continues
in the construction, services and manufacturing sectors, which had second
quarter growth of 7.8%, 4.7%, and 2.1%, respectively.
. The second quarter of 1997 brought improvements in the labor market. In June,
the state unemployment rate stood at 6.2%, the lowest since September, 1990.
Nonfarm employment in the second quarter increased 1.5% from the first
quarter and 3.2% from the second quarter of 1996.
. Computer software, a $120 billion global industry, has been a tremendous boon
to the California economy. California is the nation's leading employer in
this industry, commanding 20% of the estimated 600,000 jobs nationwide. The
motion picture industry has also showed tremendous growth, doubling in the
past ten years to 200,000 jobs.
Management Update
- --------------------------------------------------------------------------------
. In California, we have added yield with some lower rated and non-rated bonds,
which our analysts have scrutinized and found to be sound credits. On the
performance side, we have bought large, high-rated and very liquid bonds.
This "barbell" approach enhances the Fund's performance in varying market
conditions.
. California's economy has improved tremendously over the past several years,
with less exclusive reliance on the defense and high technology sectors, and
a much more diverse base, including services and banking. We traded out of
some GOs, which had appreciated due to the strengthening economy, and
acquired some insured issues, with very little sacrifice in yield.
The Fund
- --------------------------------------------------------------------------------
. During the year ended September 30, 1997, the Fund had a total return of
11.1%./1/This return resulted from an increase in net asset value per share
to $10.90 on September 30, 1997 from $10.38 on September 30, 1996, and the
reinvestment of $0.593 per share in tax-free dividend income./2/
. Based on the Fund's most recent dividend, and a net asset value of $10.90 per
share, the Fund's distribution rate on September 30, 1997 was 5.37%./3/ The
SEC 30-day yield on that date was 4.71%./4/
. To equal 5.37% in a taxable investment, a couple in the 41.95% combined
federal and state tax bracket would need a yield of 9.25%.
Your Investment at Work
- --------------------------------------------------------------------------------
City of Pasadena 1993 Refunding Certificates of Participation-Pasadena Civic
Improvement Corporation
[PICTURE OF FEDERAL BUILDING APPEARS HERE]
. The income from these certificates is derived from two separate parking
facilities in the City of Pasadena, California. One facility, located at 33
East Green Street, consists of a six-level parking structure with 930 spaces
and 9,000 square feet of restaurant and retail space. The other, located at
39 South Delacey Avenue, is also a six-level structure with 516 spaces and
6,000 square feet of restaurant space.
. The certificates represent a sound credit risk, backed by a predictable
source of income, and they help shore up the performance component of the
Fund.
- --------------------------------------------------------------------------------
/1/This return does not include the maximum 4.75% sales charge. /2/A portion of
the Fund's income may be subject to federal and state income taxes and/or
federal alternative minimum tax. /3/The Fund's distribution rate represents
actual distributions paid to shareholders and is calculated daily by dividing
the last distribution per share (annualized) by the net asset value. /4/The
Fund's SEC yield is calculated by dividing the net investment income per share
for the 30-day period by the offering price at the end of the period and
annualizing the result. /5/Returns are calculated by determining the percentage
change in net asset value with all distributions reinvested. SEC returns reflect
maximum sales charge as noted. *Source: Towers Data Systems, Bethesda, MD.
Investment operations commenced on 5/27/94. Index information is available only
at month-end; therefore, the line comparison begins at the next month-end
following the commencement of the Fund's investment operations. **This figure
represents the Fund's performance including the maximum 4.75% initial sales
charge.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
- --------------------------------------------------------------------------------
Fund Information
as of September 30, 1997
Performance/5/
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
<S> <C>
One Year 11.1%
Life of Fund (5/27/94) 8.8
<CAPTION>
SEC Average Annual Total Returns (including maximum 4.75% sales charge)
- --------------------------------------------------------------------------------
<S> <C>
One Year 5.8%
Life of Fund (5/27/94) 7.2
</TABLE>
Comparison of Change in Value of a $10,000 Investment in the Fund vs. the Lehman
Brothers Municipal Bond Index*.
From May 31, 1994 through September 30, 1997.
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
EV Traditional Lehman Brothers
California 7-year Municipals
Date Municipals Fund Fund/Off Pr Bond Index
---- --------------- ----------- ----------------
<S> <C> <C> <C>
5/31/94 $10,000 $9,522 $10,000
6/30/94 $10,008 $9,530 $9,942
7/31/94 $10,181 $9,695 $10,121
8/31/94 $10,223 $9,735 $10,156
9/30/94 $10,080 $9,599 $10,007
10/31/94 $9,907 $9,434 $9,830
11/30/94 $9,670 $9,208 $9,652
12/31/94 $9,847 $9,377 $9,864
1/31/95 $10,213 $9,726 $10,146
2/28/95 $10,544 $10,041 $10,441
3/31/95 $10,682 $10,172 $10,561
4/30/95 $10,672 $10,162 $10,574
5/31/95 $11,034 $10,507 $10,911
6/30/95 $10,820 $10,304 $10,816
7/31/95 $10,886 $10,366 $10,918
8/31/95 $10,985 $10,460 $11,057
9/30/95 $11,082 $10,553 $11,126
10/31/95 $11,334 $10,793 $11,288
11/30/95 $11,618 $11,063 $11,476
12/31/95 $11,795 $11,232 $11,586
1/31/96 $11,841 $11,275 $11,673
2/28/96 $11,761 $11,199 $11,595
3/31/96 $11,573 $11,020 $11,446
4/30/96 $11,528 $10,977 $11,414
5/31/96 $11,540 $10,989 $11,410
6/30/96 $11,641 $11,085 $11,534
7/31/96 $11,778 $11,216 $11,638
8/31/96 $11,791 $11,228 $11,636
9/30/96 $11,974 $11,402 $11,798
10/31/96 $12,078 $11,502 $11,932
11/30/96 $12,332 $11,743 $12,150
12/31/96 $12,263 $11,678 $12,099
1/31/97 $12,335 $11,746 $12,122
2/28/97 $12,471 $11,876 $12,233
3/31/97 $12,294 $11,707 $12,070
4/30/97 $12,423 $11,830 $12,171
5/31/97 $12,614 $12,011 $12,354
6/30/97 $12,792 $12,181 $12,486
7/31/97 $13,213 $12,582 $12,832
8/31/97 $13,056 $12,432 $12,711
9/30/97 $13,296 $12,661 $12,862
</TABLE>
The chart compares the Fund's total return with that of the Lehman Brothers
Municipal Bond Index, a broad-based, unmanaged market index. Returns are
calculated by determining the percentage change in net asset value (NAV) with
all distributions reinvested. The lines on the chart represent total returns of
$10,000 hypothetical investments in the Fund and the Index. The Index's total
return does not reflect commissions or expenses that would have been incurred if
an investor individually purchased or sold the securities represented in the
Index. It is not possible to invest directly in an Index.
- --------------------------------------------------------------------------------
Federal income tax information on distributions: For federal income tax
purposes, 99.21% of the total dividends paid by the Fund from net investment
income during the year ended September 30, 1997 is designated as an exempt-
interest dividend.
- --------------------------------------------------------------------------------
3
<PAGE>
EV Traditional Florida Municipals Fund as of September 30, 1997
INVESTMENT UPDATE
[PHOTO OF THOMAS J. FETTER APPEARS HERE]
Thomas J. Fetter,
Portfolio Manager
The Economy
- --------------------------------------------------------------------------------
. Florida remains one of the fastest growing states in the nation. Its economy
is buoyed by strong trade and services sectors, with tourism and business
services playing particularly vital roles.
. Job growth has slowed somewhat over the pace set in recent years, but it
remains steady. In the past 12 months, non-agricultural employment growth has
exceeded 2.5%.
. The business services sector has added 250,000 new jobs since 1991, the worst
year of the recession, representing 30% of non-farm growth in this period.
. State revenues in fiscal 1997 are expected to be $15.6 billion, representing
a 6.3% increase over FY1996. In FY1998, revenues are expected to grow
approximately 5.1%, for an increase of roughly $790 million over FY1997.
Management Update
- --------------------------------------------------------------------------------
. This has been a generally positive year for the bond market, with favorable
returns resulting from a general decline in interest rates. This decline has
occurred in response to a very favorable economic period in which growth has
been neither too fast nor too slow and inflation has remained low.
. During the period, we increased our holdings of high-quality, insured issues.
These tended to perform well in a declining interest rate environment.
. We continue to maintain diversification in the Portfolio across sectors and
credit quality. In addition, we have combined high-quality insured holdings,
which provide upside performance, with higher-yielding issues, which provide
income and stability in a down market. This "barbell" structure allows the
Fund to perform well in varying market conditions.
The Fund
- --------------------------------------------------------------------------------
. During the year ended September 30, 1997, the Fund had a total return of
6.8%./1/ This return resulted from an increase in net asset value per share
to $10.64 on September 30, 1997 from $10.53 on September 30, 1996, and the
reinvestment of $0.581 per share in tax-free dividend income./2/
. Based on the Fund's most recent dividend, and a net asset value of $10.64 per
share, the Fund's distribution rate on September 30, 1997 was 5.31%./3/ The
SEC 30-day yield on that date was 4.66%./4/
. To equal 5.31% in a taxable investment, a couple in the 38.41% combined
federal and state tax bracket would need a yield of 8.62%.
Your Investment at Work
- --------------------------------------------------------------------------------
Escambia County, Florida Housing Finance Authority - Single Family Mortgage
Revenue Bonds
[PICTURE OF HOUSE APPEARS HERE]
. This bond issue will help provide mortgage loans for home buyers in several
Florida counties, including Escambia, Indian River, and Sarasota. In certain
"targeted areas," borrowers need not be first-time buyers. To be eligible for
financing, all borrowers must be of low- or moderate-income status.
. The bonds, which are rated Aaa by Moody's and AAA by Standard & Poor's, are
backed, in part, by the Government National Mortgage Association ("Ginnie
Mae") and the Federal National Mortgage Association ("Fannie-Mae").
- --------------------------------------------------------------------------------
/1/This return does not include the maximum 4.75% sales charge. /2/A portion of
the Fund's income may be subject to federal and state income taxes and/or
federal alternative minimum tax. /3/The Fund's distribution rate represents
actual distributions paid to shareholders and is calculated daily by dividing
the last distribution per share (annualized) by the net asset value. /4/The
Fund's SEC yield is calculated by dividing the net investment income per share
for the 30-day period by the offering price at the end of the period and
annualizing the result. /5/Returns are calculated by determining the percentage
change in net asset value with all distributions reinvested. SEC returns reflect
maximum sales charge as noted. *Source: Towers Data Systems, Bethesda, MD.
Investment operations commenced on 4/5/94. Index information is available only
at month-end; therefore, the line comparison begins at the next month-end
following the commencement of the Fund's investment operations. **This figure
represents the Fund's performance including the maximum 4.75% initial sales
charge.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
- --------------------------------------------------------------------------------
Fund Information
as of September 30, 1997
Performance/5/
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
<S> <C>
One Year 6.8%
Life of Fund (4/5/94) 7.7
</TABLE>
<TABLE>
<CAPTION>
SEC Average Annual Total Returns (including maximum 4.75% sales charge)
- --------------------------------------------------------------------------------
<S> <C>
One Year 1.6%
Life of Fund (4/5/94) 6.2
</TABLE>
Comparison of Change in Value of a $10,000 Investment in the Fund vs. the Lehman
Brothers Municipal Bond Index*
From April 30, 1994 through September 30, 1997.
[LINE CHART APPEARS HERE]
Fund's
<TABLE> Performance
<CAPTION> (including
EV Traditional the maximum Lehman Brothers
Florida 4.75% initial Municipal
Date Municipal Fund sales charge)** Bond Index
---- --------------- ----------- ----------------
<S> <C> <C> <C>
4/30/94 $10,000 $9,528 $10,000
5/31/94 $10,061 $9,586 $10,087
6/30/94 $10,001 $9,529 $10,028
7/31/94 $10,179 $9,699 $10,209
8/31/94 $10,189 $9,709 $10,244
9/30/94 $10,009 $9,537 $10,094
10/31/94 $9,760 $9,300 $9,915
11/30/94 $9,518 $9,069 $9,735
12/31/94 $9,831 $9,368 $9,949
1/31/95 $10,177 $9,697 $10,234
2/28/95 $10,550 $10,052 $10,532
3/31/95 $10,632 $10,131 $10,653
4/30/95 $10,641 $10,139 $10,665
5/31/95 $10,942 $10,426 $11,005
6/30/95 $10,764 $10,256 $10,909
7/31/95 $10,827 $10,317 $11,012
8/31/95 $10,933 $10,417 $11,152
9/30/95 $11,069 $10,547 $11,223
10/31/95 $11,281 $10,749 $11,386
11/30/95 $11,557 $11,011 $11,575
12/31/95 $11,718 $11,165 $11,686
1/31/96 $11,782 $11,227 $11,774
2/28/96 $11,618 $11,069 $11,695
3/31/96 $11,445 $10,905 $11,545
4/30/96 $11,411 $10,872 $11,513
5/31/96 $11,389 $10,852 $11,508
6/30/96 $11,508 $10,965 $11,634
7/31/96 $11,651 $11,101 $11,739
8/31/96 $11,606 $11,058 $11,736
9/30/96 $11,793 $11,237 $11,900
10/31/96 $11,882 $11,322 $12,035
11/30/96 $12,071 $11,502 $12,255
12/31/96 $12,026 $11,458 $12,204
1/31/97 $12,025 $11,458 $12,227
2/28/97 $12,111 $11,539 $12,339
3/31/97 $11,950 $11,386 $12,174
4/30/97 $12,005 $11,439 $12,276
5/31/97 $12,144 $11,571 $12,461
6/30/97 $12,304 $11,724 $12,594
7/31/97 $12,666 $12,068 $12,943
8/31/97 $12,464 $11,876 $12,821
9/30/97 $12,589 $11,995 $12,973
</TABLE>
The chart compares the Fund's total return with that of the Lehman Brothers
Municipal Bond Index, a broad-based, unmanaged market index. Returns are
calculated by determining the percentage change in net asset value (NAV) with
all distributions reinvested. The lines on the chart represent total returns of
$10,000 hypothetical investments in the Fund and the Index. The Index's total
return does not reflect commissions or expenses that would have been incurred if
an investor individually purchased or sold the securities represented in the
Index. It is not possible to invest directly in an Index.
- --------------------------------------------------------------------------------
Federal income tax information on distributions: For federal income tax
purposes, 99.34% of the total dividends paid by the Fund from net investment
income during the year ended September 30, 1997 is designated as an exempt-
interest dividend.
- --------------------------------------------------------------------------------
4
<PAGE>
EV Traditional Massachusetts Municipals Fund as of September 30, 1997
INVESTMENT UPDATE
[PHOTO OF ROBERT B. MACINTOSH APPEARS HERE]
Robert B. MacIntosh,
Portfolio Manager
The Economy
- --------------------------------------------------------------------------------
. Massachusetts' economy benefits from diverse sources of strength -- most
notably the high-technology and financial services industries -- which have
produced solid growth, high personal incomes, and low unemployment. The
unemployment rate for September, 1997, was 4.0%, well below the 4.9% national
rate.
. Massachusetts is one of the nation's leaders in several high-technology
businesses, which include software, biotechnology, and the Internet. In the
mutual funds industry, Boston is second only to New York, employing 45,000,
while in biotechnology, Massachusetts is also one of the nation's leading
employers.
. Despite the booming economy, however, Massachusetts has one of the highest
per capita debt levels in the nation. Major projects, such as a new
convention center and the Central Artery/Third Harbor Tunnel Project, could
create financial pressures in the years to come.
Management Discussion
- --------------------------------------------------------------------------------
. The past 12 months has been a good period for the bond market, with a general
decline in yields giving way to price increases. During the period, we have
had the right blend of coupons and call protection to take advantage of this
environment.
. We added some zero coupon bonds to the Fund, which are typically hard to
find. We have also replaced several older bonds having shorter call features
with newer, longer-call bonds. Both of these measures improved the Fund's
structure and added performance upside.
. Our staff of research analysts continues to do an outstanding job for all of
our Funds. In the Massachusetts Portfolio, several credits had ratings
upgrades. This not only helped the Fund's performance, but also speaks well
of our analysts' ability to find value in the market.
The Fund
- --------------------------------------------------------------------------------
. During the year ended September 30, 1997, the Fund had a total return of
9.5%./1/ This return resulted from an increase in net asset value per share
to $9.62 on September 30, 1997 from $9.30 on September 30, 1996, and the
reinvestment of $0.533 per share in tax-free dividend income./2/
. Based on the Fund's most recent dividend, and a net asset value of $9.62 per
share, the Fund's distribution rate on September 30, 1997 was 5.52%./3/ The
SEC 30-day yield on that date was 4.73%./4/
. To equal 5.52% in a taxable investment, a couple in the 43.68% combined
federal and state tax bracket would need a yield of 9.80%.
Your Investment at Work
- --------------------------------------------------------------------------------
Massachusetts Health and Educational Facilities Authority Revenue Bonds --
North Adams Regional Hospital
[GRAPHIC OF MEDICAL SYMBOL APPEARS HERE]
. This bond issue refunded a previous issue, which had financed a major
renovation project at the North Adams Regional Hospital.
. The project included renovating 47,000 square feet in three floors of the
hospital's main building; converting the fourth floor from a medical/surgical
unit to an inpatient psychiatric unit; and constructing a two-story addition
to house outpatient facilities and office space.
. These high-yielding bonds not only give the Fund a solid income stream, but
are also backed by a sound medical institution fulfilling a vital community
need.
- --------------------------------------------------------------------------------
/1/This return does not include the maximum 4.75% sales charge. /2/A portion of
the Fund's income may be subject to federal and state income taxes and/or
federal alternative minimum tax. /3/The Fund's distribution rate represents
actual distributions paid to shareholders and is calculated daily by dividing
the last distribution per share (annualized) by the net asset value. /4/The
Fund's SEC yield is calculated by dividing the net investment income per share
for the 30-day period by the offering price at the end of the period and
annualizing the result. /5/Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. SEC returns
reflect maximum sales charge as noted. *Source: Towers Data Systems, Bethesda,
MD. Investment operations commenced on 12/7/93. Index information is available
only at month-end; therefore, the line comparison begins at the next month-end
following the commencement of the Fund's investment operations. **This figure
represents the Fund's performance including the maximum 4.75% initial sales
charge.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
- --------------------------------------------------------------------------------
Fund Information
as of September 30, 1997
Performance/5/
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
<S> <C>
One Year 9.5%
Life of Fund (12/7/93) 4.5
</TABLE>
<TABLE>
<CAPTION>
SEC Average Annual Total Returns (including maximum 4.75% sales charge)
- --------------------------------------------------------------------------------
<S> <C>
One Year 4.3%
Life of Fund (12/7/93) 3.2
</TABLE>
Comparison of Change in Value of a $10,000 Investment in the Fund vs. the Lehman
Brothers Municipal Bond Index*
From December 31, 1993 through September 30, 1997.
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Fund's Performance
EV Traditional Including Maximum Lehman Brothers
Massachusetts 4.75% Initial Municipal
Date Municipals Fund Sales Charge** Bond Index
---- --------------- ----------- ----------------
<S> <C> <C> <C>
12/31/93 $10,000 $9,526 $10,000
1/31/94 $10,000 $9,593 $10,114
2/28/94 $9,841 $9,374 $9,852
3/31/94 $9,357 $8,913 $9,451
4/30/94 $9,331 $8,889 $9,531
5/31/94 $9,418 $8,971 $9,614
6/30/94 $9,328 $8,886 $9,558
7/31/94 $9,496 $9,045 $9,730
8/31/94 $9,532 $9,080 $9,764
9/30/94 $9,360 $8,916 $9,621
10/31/94 $9,116 $8,684 $9,450
11/30/94 $8,837 $8,418 $9,279
12/31/94 $9,108 $8,676 $9,483
1/31/95 $9,447 $8,999 $9,754
2/28/95 $9,764 $9,300 $10,038
3/31/95 $9,844 $9,377 $10,153
4/30/95 $9,835 $9,368 $10,165
5/31/95 $10,077 $9,599 $10,490
6/30/95 $9,892 $9,423 $10,398
7/31/95 $9,947 $9,475 $10,496
8/31/95 $10,075 $9,597 $10,630
9/30/95 $10,151 $9,669 $10,697
10/31/95 $10,326 $9,836 $10,852
11/30/95 $10,522 $10,023 $11,032
12/31/95 $10,675 $10,169 $11,138
1/31/96 $10,697 $10,189 $11,223
2/28/96 $10,589 $10,087 $11,147
3/31/96 $10,450 $9,954 $11,004
4/30/96 $10,420 $9,926 $10,973
5/31/96 $10,460 $9,964 $10,969
6/30/96 $10,545 $10,044 $11,088
7/31/96 $10,642 $10,137 $11,189
8/31/96 $10,637 $10,132 $11,186
9/30/96 $10,780 $10,268 $11,343
10/31/96 $10,856 $10,341 $11,471
11/30/96 $11,047 $10,523 $11,681
12/31/96 $10,994 $10,473 $11,632
1/31/97 $11,036 $10,513 $11,654
2/28/97 $11,120 $10,593 $11,761
3/31/97 $10,996 $10,474 $11,604
4/30/97 $11,095 $10,569 $11,701
5/31/97 $11,269 $10,735 $11,877
6/30/97 $11,394 $10,854 $12,004
7/31/97 $11,751 $11,194 $12,336
8/31/97 $11,636 $11,084 $12,220
9/30/97 $11,799 $11,239 $12,365
</TABLE>
The chart compares the Fund's total return with that of the Lehman Brothers
Municipal Bond Index, a broad-based, unmanaged market index. Returns are
calculated by determining the percentage change in net asset value (NAV) with
all distributions reinvested. The lines on the chart represent total returns of
$10,000 hypothetical investments in the Fund and the Index. The Index's total
return does not reflect commissions or expenses that would have been incurred if
an investor individually purchased or sold the securities represented in the
Index. It is not possible to invest directly in an Index.
- --------------------------------------------------------------------------------
Federal income tax information on distributions: For federal income tax
purposes, 98.75% of the total dividends paid by the Fund from net investment
income during the year ended September 30, 1997 is designated as an exempt-
interest dividend.
- --------------------------------------------------------------------------------
5
<PAGE>
EV Traditional Mississippi Municipals Fund as of September 30, 1997
INVESTMENT UPDATE
[PHOTO OF CYNTHIA J. CLEMSON APPEARS HERE]
Cynthia J. Clemson,
Portfolio Manager
The Economy
- --------------------------------------------------------------------------------
. As Mississippi's economy has diversified from its traditional manufacturing
base, tourism has emerged as one of the fastest growing sectors. Tourism
revenues, which were $3.5 billion in 1994, grew to $4.4 billion in 1996, and
$4.6 billion so far in 1997. The state will spend $7.5 million in 1998 to
help continue the positive trend.
. The oil and gas sector continues to play an important role in Mississippi's
economy. Amoco and Shell have joined to construct a $100 million cryogenic
natural gas processing plant designed to deliver 1 billion cubic feet of gas
per day through five interstate pipelines.
. Employment in Mississippi grew to a record 1,286,400 in June of 1997,
according to the state's Employment Security Commission. The June
unemployment rate of 6.1% was up slightly from December's level of 5.4%, but
was still well below the 7.2% recorded in June, 1996.
Management Update
- --------------------------------------------------------------------------------
. Supply of Mississippi municipal bonds has been light this year, which can be
an opportunity for the Fund because it allows us to command a high price for
any issues we need to sell.
. When new issues do come to market, Eaton Vance is usually one of the first
institutions called. This gives us much greater selection than investors who
have to buy in the secondary market.
. Recently we bought some very good industrial development bonds (IDBs) and
hospital bonds, which were issued with attractive yields and long call
features. The companies, including International Paper and Rush Medical
Center, are very strong and should provide a reliable income stream.
The Fund
- --------------------------------------------------------------------------------
. During the year ended September 30, 1997, the Fund had a total return of
8.9%./1/ This return resulted from an increase in net asset value per share
to $9.74 on September 30, 1997 from $9.42 on September 30, 1996, and the
reinvestment of $0.496 per share in tax-free dividend income./2/
. Based on the Fund's most recent dividend, and a net asset value of $9.74 per
share, the Fund's distribution rate on September 30, 1997 was 4.98%./3/ The
SEC 30-day yield on that date was 3.60%./4/
. To equal 4.98% in a taxable investment, a couple in the 39.2% combined
federal and state tax bracket would need a yield of 8.19%.
Your Investment at Work
- --------------------------------------------------------------------------------
City of Natchez, Mississippi Combined Water and Sewer System Revenue Bonds
[PICTURE OF MAN AND SEWER PIPE APPEARS HERE]
. The proceeds from this bond issue were used to finance the improvement,
repair, and extension of the combined water and sewer system of Natchez,
Mississippi. The system, owned and operated by the city, consists of over 27
miles of sewerage lines and 27 miles of water lines.
. The bonds have good call protection and performance potential and carry
triple-A ratings from both Moody's and Standard & Poor's due to their insured
status through MBIA Insurance Corporation.
- --------------------------------------------------------------------------------
/1/This return does not include the maximum 4.75% sales charge. /2/A portion of
the Fund's income may be subject to federal and state income taxes and/or
federal alternative minimum tax. /3/The Fund's distribution rate represents
actual distributions paid to shareholders and is calculated daily by dividing
the last distribution per share (annualized) by the net asset value. /4/The
Fund's SEC yield is calculated by dividing the net investment income per share
for the 30-day period by the offering price at the end of the period and
annualizing the result. /5/Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. SEC returns
reflect maximum sales charge as noted. *Source: Towers Data Systems, Bethesda,
MD. Investment operations commenced on 12/7/93. Index information is available
only at month-end; therefore, the line comparison begins at the next month-end
following the commencement of the Fund's investment operations. **This figure
represents the Fund's performance including the maximum 4.75% initial sales
charge.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
- --------------------------------------------------------------------------------
Fund Information
as of September 30, 1997
Performance/5/
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
<S> <C>
One Year 8.9%
Life of Fund (12/7/93) 4.5
</TABLE>
<TABLE>
<CAPTION>
SEC Average Annual Total Returns (including maximum 4.75% sales charge)
- --------------------------------------------------------------------------------
<S> <C>
One Year 3.7%
Life of Fund (12/7/93) 3.1
</TABLE>
Comparison of Change in Value of a $10,000 Investment in the Fund vs. the Lehman
Brothers Municipal Bond Index.*
From December 31, 1993 through September 30, 1997
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION> Fund's Performance
EV Traditional Including maximum Lehman Brothers
Mississippi 4.75% Initial Municipal
Date Municipals Fund Sales Charge** Bond Index
---- --------------- ------------------ ----------------
<S> <C> <C> <C>
12/31/93 $10,000 $9,526 $10,000
1/31/94 $10,109 $9,629 $10,114
2/28/94 $9,798 $9,333 $9,852
3/31/94 $9,180 $8,745 $9,451
4/30/94 $9,253 $8,814 $9,531
5/31/94 $9,336 $8,893 $9,614
6/30/94 $9,254 $8,815 $9,558
7/31/94 $9,428 $8,981 $9,730
8/31/94 $9,430 $8,983 $9,764
9/30/94 $9,256 $8,817 $9,621
10/31/94 $9,030 $8,602 $9,450
11/30/94 $8,790 $8,373 $9,279
12/31/94 $9,016 $8,588 $9,483
1/31/95 $9,361 $8,917 $9,754
2/28/95 $9,716 $9,255 $10,038
3/31/95 $9,793 $9,328 $10,153
4/30/95 $9,770 $9,306 $10,165
5/31/95 $10,061 $9,584 $10,490
6/30/95 $9,907 $9,437 $10,398
7/31/95 $9,969 $9,496 $10,496
8/31/95 $10,071 $9,593 $10,630
9/30/95 $10,132 $9,652 $10,697
10/31/95 $10,314 $9,825 $10,852
11/30/95 $10,539 $10,039 $11,032
12/31/95 $10,665 $10,159 $11,138
1/31/96 $10,716 $10,208 $11,223
2/29/96 $10,606 $10,103 $11,147
3/31/96 $10,431 $9,936 $11,004
4/30/96 $10,409 $9,916 $10,973
5/31/96 $10,435 $9,940 $10,969
6/30/96 $10,548 $10,048 $11,088
7/31/96 $10,642 $10,137 $11,189
8/31/96 $10,644 $10,139 $11,186
9/30/96 $10,805 $10,293 $11,343
10/31/96 $10,900 $10,383 $11,471
11/30/96 $11,085 $10,559 $11,681
12/31/96 $11,042 $10,518 $11,632
1/31/97 $11,114 $10,587 $11,654
2/28/97 $11,229 $10,696 $11,761
3/31/97 $11,102 $10,576 $11,604
4/30/97 $11,186 $10,655 $11,701
5/31/97 $11,342 $10,804 $11,877
6/30/97 $11,461 $10,918 $12,004
7/31/97 $11,762 $11,204 $12,336
8/31/97 $11,656 $11,103 $12,220
9/30/97 $11,764 $11,206 $12,365
</TABLE>
The chart compares the Fund's total return with that of the Lehman Brothers
Municipal Bond Index, a broad-based, unmanaged market index. Returns are
calculated by determining the percentage change in net asset value (NAV) with
all distributions reinvested. The lines on the chart represent total returns of
$10,000 hypothetical investments in the Fund and the Index. The Index's total
return does not reflect commissions or expenses that would have been incurred if
an investor individually purchased or sold the securities represented in the
Index. It is not possible to invest directly in an Index.
- --------------------------------------------------------------------------------
Federal income tax information on distributions: For federal income tax
purposes, 97.62% of the total dividends paid by the Fund from net investment
income during the year ended September 30, 1997 is designated as an exempt-
interest dividend.
- --------------------------------------------------------------------------------
6
<PAGE>
EV Traditional New York Municipals Fund as of September 30, 1997
INVESTMENT UPDATE
[PHOTO OF NICOLE ANDERES APPEARS HERE]
Nicole Anderes,
Portfolio Manager
The Economy
- --------------------------------------------------------------------------------
. The tremendous bull market for equity securities has propelled New York's
economy in 1997. The tax revenues generated from capital gains and bonus
payments in the financial services industry contributed significantly to a
projected $1.3 billion cash surplus at the end of fiscal 1997.
. Despite the tax revenue windfall, New York has kept its spending under
control. Spending reductions, especially in the area of Medicaid, contributed
an estimated $290 million to FY 1997's cash surplus.
. Job growth for 1997 is expected to be modest. As the state's long-term
decline in manufacturing jobs continues, the services sector should continue
to make up the difference. Overall employment is expected to grow 0.8% in
1997. The services sector is forecast to grow 2.9% this year after a 2.9%
rise in 1996, while manufacturing is expected to see a 1.1% decline,
following a 2.9% drop in 1996.
Management Update
- --------------------------------------------------------------------------------
. The success of New York City's securities industry and the accompanying
increase in sales and income tax revenues has spilled over to the rest of the
state, giving the overall economy a boost and upgrading the state's GO
rating. As a result, state appropriation bonds have risen in value -- a very
positive development due to their significant weighting in the Fund.
. When rates were in the 7% range earlier this year, we took advantage of
opportunities to extend the maturities of the Fund's non-callable holdings,
picking up additional yield in the process. This improved the Fund's overall
call protection and its price appreciation in the subsequent rally.
. New York City water bonds have become very prevalent in the municipal market.
Varying coupon structures provided liquid trading vehicles for making
relative value trades during the second quarter of 1997.
The Fund
- --------------------------------------------------------------------------------
. During the year ended September 30, 1997, the Fund had a total return of
9.2%./1/ This return resulted from an increase in net asset value per share
to $10.51 on September 30, 1997 from $10.22 on September 30, 1996, and the
reinvestment of $0.578 per share in tax-free dividend income/2/and $0.0486
per share in capital gains distributions.
. Based on the Fund's most recent dividend, and a net asset value of $10.51 per
share, the Fund's distribution rate on September 30, 1997 was 5.47%./3/ The
SEC 30-day yield on that date was 5.09%./4/
. To equal 5.47% in a taxable investment, a couple in the 40.38% combined
federal and state tax bracket would need a yield of 9.18%.
Your Investment at Work
- --------------------------------------------------------------------------------
New York Municipal Water Finance Authority Revenue Bonds
[PICTURE OF MAN AND SEWER PIPE APPEARS HERE]
. This entity, which manages New York City's enormous water supply and sewage
treatment needs, has significant ongoing financial needs for its large
capital spending projects. As such, its numerous, frequently-traded bonds can
be used as a vehicle for short-term, relative value trading profits.
. Over the long term, management knows this credit well and is comfortable with
it, especially given the essential nature of water and sewer services to the
city's residents. This issue was also a good value compared to bonds having
similar credit ratings.
- --------------------------------------------------------------------------------
/1/This return does not include the maximum 4.75% sales charge. /2/A portion of
the Fund's income may be subject to federal and state income taxes and/or
federal alternative minimum tax. /3/The Fund's distribution rate represents
actual distributions paid to shareholders and is calculated daily by dividing
the last distribution per share (annualized) by the net asset value. /4/The
Fund's SEC yield is calculated by dividing the net investment income per share
for the 30-day period by the offering price at the end of the period and
annualizing the result. /5/Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. SEC returns
reflect maximum sales charge as noted. *Source: Towers Data Systems, Bethesda,
MD. Investment operations commenced on 4/15/94. Index information is available
only at month-end; therefore, the line comparison begins at the next month-end
following the commencement of the Fund's investment operations. **This figure
represents the Fund's performance including the maximum 4.75% initial sales
charge.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
- --------------------------------------------------------------------------------
Fund Information
as of September 30, 1997
Performance/5/
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
<S> <C>
One Year 9.2%
Life of Fund (4/15/94) 7.7
</TABLE>
<TABLE>
<CAPTION>
SEC Average Annual Total Returns (including maximum 4.75% sales charge)
- --------------------------------------------------------------------------------
<S> <C>
One Year 4.1%
Life of Fund (4/15/94) 6.2
</TABLE>
Comparison of Change in Value of a $10,000 Investment in the Fund vs. the Lehman
Brothers Municipal Bond Index*.
From April 30, 1994 through September 30, 1997
[LINE CHART APPEARS HERE]
<TABLE>
<CAPTION>
Fund's Performance
EV Traditional Including Maximum Lehman Brothers
New York 4.75% Initial 7-Year Municipal
Date Municipals Fund Sales Charge ** Bond Index
---- --------------- ------------------ ----------------
<S> <C> <C> <C>
4/30/94 $10,000 $9,522 $10,000
5/31/94 $10,148 $9,663 $10,087
6/30/94 $10,056 $9,576 $10,028
7/31/94 $10,240 $9,751 $10,209
8/31/94 $10,302 $9,810 $10,244
9/30/94 $10,086 $9,604 $10,094
10/31/94 $9,870 $9,399 $9,915
11/30/94 $9,527 $9,072 $9,735
12/31/94 $9,852 $9,381 $9,949
1/31/95 $10,198 $9,711 $10,234
2/28/95 $10,552 $10,049 $10,532
3/31/95 $10,670 $10,160 $10,653
4/30/95 $10,683 $10,173 $10,665
5/31/95 $10,994 $10,469 $11,005
6/30/95 $10,832 $10,315 $10,909
7/31/95 $10,909 $10,388 $11,012
8/31/95 $11,062 $11,534 $11,152
9/30/95 $11,127 $10,595 $11,223
10/31/95 $11,336 $10,795 $11,386
11/30/95 $11,578 $11,025 $11,575
12/31/95 $11,700 $11,142 $11,686
1/31/96 $11,757 $11,195 $11,774
2/28/96 $11,631 $11,076 $11,695
3/31/96 $11,475 $10,927 $11,545
4/30/96 $11,463 $10,915 $11,513
5/31/96 $11,475 $10,927 $11,508
6/30/96 $11,598 $11,044 $11,634
7/31/96 $11,701 $11,142 $11,739
8/31/96 $11,677 $11,119 $11,736
9/30/96 $11,871 $11,304 $11,900
10/31/96 $11,964 $11,392 $12,035
11/30/96 $12,171 $11,590 $12,255
12/31/96 $12,124 $11,545 $12,204
1/31/97 $12,124 $11,545 $12,227
2/28/97 $12,260 $11,674 $12,339
3/31/97 $12,127 $11,548 $12,174
4/30/97 $12,244 $11,659 $12,276
5/31/97 $12,446 $11,852 $12,461
6/30/97 $12,564 $11,964 $12,594
7/31/97 $12,974 $12,354 $12,943
8/31/97 $12,827 $12,214 $12,821
9/30/97 $12,969 $12,349 $12,973
</TABLE>
The chart compares the Fund's total return with that of the Lehman Brothers
Municipal Bond Index, a broad-based, unmanaged market index. Returns are
calculated by determining the percentage change in net asset value (NAV) with
all distributions reinvested. The lines on the chart represent total returns of
$10,000 hypothetical investments in the Fund and the Index. The Index's total
return does not reflect commissions or expenses that would have been incurred if
an investor individually purchased or sold the securities represented in the
Index. It is not possible to invest directly in an Index.
- --------------------------------------------------------------------------------
Federal income tax information on distributions: For federal income tax
purposes, 98.46% of the total dividends paid by the Fund from net investment
income during the year ended September 30, 1997 is designated as an exempt-
interest dividend.
- --------------------------------------------------------------------------------
7
<PAGE>
EV Traditional Ohio Municipals Fund as of September 30, 1997
INVESTMENT UPDATE
[PHOTO OF THOMAS J. FETTER APPEARS HERE]
Thomas J. Fetter,
Portfolio Manager
The Economy
- --------------------------------------------------------------------------------
. Ohio's economy remains dependent on the manufacturing sector, which accounts
for over 20% of total employment. This sector has experienced growth over the
past few years, aided by positive growth trends in the national economy.
Growth in the service sector continues to help balance the state's overall
economy.
. Total employment in Ohio has increased over the past year, reaching 5.49
million in July, 1997 -- an increase of 122,000 over July, 1996. Unemployment
remained steady at 4.2% in July, 1997 -- unchanged from June -- and was
below the 4.8% national rate reported for that month.
. The outlook for the state's economy is positive. According to a survey of
Ohio business executives conducted by Bank of America, nearly 70% were
optimistic about the economy for the next six months, with 62% expecting to
maintain their current work force through the end of the year. Many were
concerned about rising labor costs, however.
Management Update
- --------------------------------------------------------------------------------
. During the period, we increased the number of non-rated holdings. Our
research staff is particularly adept at finding high-yielding issues which
are backed by sound municipal issuers. This added tremendous value to the
Fund and helped boost its distribution rate.
. With a combination of yield, or high-coupon bonds on the one hand, and high-
quality, discounted "performance" bonds on the other, the Fund has a
"barbell" structure which provides both income and total return. This
portfolio mix performed well in a generally declining interest rate
environment. Duration was kept in a targeted range to help reduce volatility.
The Fund
- --------------------------------------------------------------------------------
. During the year ended September 30, 1997, the Fund had a total return of
8.9%./1/ This return resulted from an increase in net asset value per share
to $9.68 on September 30, 1997 from $9.38 on September 30, 1996, and the
reinvestment of $0.513 per share in tax-free dividend income./2/
. Based on the Fund's most recent dividend, and a net asset value of $9.68 per
share, the Fund's distribution rate on September 30, 1997 was 5.30%./3/ The
SEC 30-day yield on that date was 4.76%./4/
. To equal 5.30% in a taxable investment, a couple in the 40.8% combined
federal and state tax bracket would need a yield of 8.95%.
Your Investment at Work
- --------------------------------------------------------------------------------
City of Middleburg Heights Hospital Improvement Refunding Revenue Bonds --
Southwest General Health Center
[MEDICAL SYMBOL APPEARS HERE]
. The proceeds from this bond issue were used to refinance a previous issue,
which had funded a major project undertaken in 1995. That project included
expanding the Hospital's surgical facilities; acquiring new medical
equipment; and renovating several facilities, including the outpatient
center, labor/delivery rooms, and nursery.
. The bonds exemplify the Fund's high-quality holdings, with triple-A ratings
from both Moody's and Standard & Poor's and FSA insurance.
- --------------------------------------------------------------------------------
/1/This return does not include the maximum 4.75% sales charge. /2/A portion of
the Fund's income may be subject to federal and state income taxes and/or
federal alternative minimum tax. /3/The Fund's distribution rate represents
actual distributions paid to shareholders and is calculated daily by dividing
the last distribution per share (annualized) by the net asset value. /4/The
Fund's SEC yield is calculated by dividing the net investment income per share
for the 30-day period by the offering price at the end of the period and
annualizing the result. /5/Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. SEC returns
reflect maximum sales charge as noted. *Source: Towers Data Systems, Bethesda,
MD. Investment operations commenced on 12/7/93. Index information is available
only at month-end; therefore, the line comparison begins at the next month-end
following the commencement of the Fund's investment operations. **This figure
represents the Fund's performance including the maximum 4.75% initial sales
charge.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
- --------------------------------------------------------------------------------
Fund Information
as of September 30, 1997
Performance/5/
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
<S> <C>
One Year 8.9%
Life of Fund (12/7/93) 4.5
</TABLE>
<TABLE>
<CAPTION>
SEC Average Annual Total Returns (including maximum 4.75% sales charge)
- --------------------------------------------------------------------------------
<S> <C>
One Year 3.7%
Life of Fund (12/7/93) 3.1
</TABLE>
Comparison of Change in Value of a $10,000 Investment in the Fund vs. the Lehman
Brothers Municipal Bond Index*
From December 31, 1993 through September 30, 1997.
[LINE CHART APPEARS HERE]
<TABLE>
<CAPTION> Fund's Performance
EV Traditional Including Maximum Lehman Brothers
Ohio 4.75% Initial Municipal
Date Municipals Fund Sales Charge ** Bond Index
---- --------------- ------------------ ----------------
<S> <C> <C> <C>
12/31/93 $10,000 $9,525 $10,000
1/31/94 $10,080 $9,601 $10,114
2/28/94 $9,770 $9,306 $9,852
3/31/94 $9,223 $8,785 $9,451
4/30/94 $9,256 $8,817 $9,531
5/31/94 $9,361 $8,917 $9,614
6/30/94 $9,270 $8,830 $9,558
7/31/94 $9,467 $9,017 $9,730
8/31/94 $9,480 $9,030 $9,764
9/30/94 $9,297 $8,856 $9,621
10/31/94 $9,041 $8,612 $9,450
11/30/94 $8,791 $8,373 $9,279
12/31/94 $9,060 $8,630 $9,483
1/31/95 $9,408 $8,961 $9,754
2/28/95 $9,722 $9,260 $10,038
3/31/95 $9,780 $9,315 $10,153
4/30/95 $9,779 $9,315 $10,165
5/31/95 $10,073 $9,595 $10,490
6/30/95 $9,941 $9,469 $10,398
7/31/95 $10,004 $9,529 $10,496
8/31/95 $10,130 $9,649 $10,630
9/30/95 $10,193 $9,709 $10,697
10/31/95 $10,366 $9,873 $10,852
11/30/95 $10,560 $10,058 $11,032
12/31/95 $10,655 $10,149 $11,138
1/31/96 $10,697 $10,189 $11,223
2/28/96 $10,598 $10,095 $11,147
3/31/96 $10,479 $9,982 $11,004
4/30/96 $10,482 $9,984 $10,973
5/31/96 $10,486 $9,988 $10,969
6/30/96 $10,601 $10,098 $11,088
7/31/96 $10,719 $10,210 $11,189
8/31/96 $10,677 $10,170 $11,186
9/30/96 $10,817 $10,304 $11,343
10/31/96 $10,925 $10,406 $11,471
11/30/96 $11,101 $10,574 $11,681
12/31/96 $11,059 $10,533 $11,632
1/31/97 $11,074 $10,549 $11,654
2/28/97 $11,168 $10,637 $11,761
3/31/97 $11,066 $10,540 $11,604
4/30/97 $11,163 $10,633 $11,701
5/31/97 $11,322 $10,784 $11,877
6/30/97 $11,420 $10,878 $12,004
7/31/97 $11,725 $11,168 $12,336
8/31/97 $11,657 $11,103 $12,220
9/30/97 $11,781 $11,221 $12,365
</TABLE>
The chart compares the Fund's total return with that of the Lehman Brothers
Municipal Bond Index, a broad-based, unmanaged market index. Returns are
calculated by determining the percentage change in net asset value (NAV) with
all distributions reinvested. The lines on the chart represent total returns of
$10,000 hypothetical investments in the Fund and the Index. The Index's total
return does not reflect commissions or expenses that would have been incurred if
an investor individually purchased or sold the securities represented in the
Index. It is not possible to invest directly in an Index.
- --------------------------------------------------------------------------------
Federal income tax information on distributions: For federal income tax
purposes, 99.80% of the total dividends paid by the Fund from net investment
income during the year ended September 30, 1997 is designated as an exempt-
interest dividend.
- --------------------------------------------------------------------------------
8
<PAGE>
EV Traditional Rhode Island Municipals Fund as of September 30, 1997
INVESTMENT UPDATE
[PHOTO OF NICOLE ANDERES APPEARS HERE]
Nicole Anderes,
Portfolio Manager
The Economy
- --------------------------------------------------------------------------------
. Rhode Island's diversification away from the manufacturing sector began in
the mid-1980s and has continued to reshape its economy. Services, the
fastest-growing sector now accounting for over 30% of all jobs, added 2,800
jobs in the last 12 months, while the manufacturing sector lost 1,200.
. The August, 1997, unemployment rate of 4.9% was unchanged from a year
earlier. The U.S. rate was also 4.9% in August, 1997. Total state employment
increased to 481,700 by August -- the highest it has been since September,
1990.
. Financial services and health care have been major contributors to growth in
the service sector, accounting for half of all job growth in the 12 months
ending August 31, 1997.
. Despite its decline, manufacturing remains an important part of the state
economy, accounting for over 20% of all employment. The jewelry industry --
which employs over 35,000 -- is a key contributor.
Management Update
- --------------------------------------------------------------------------------
. We continued to maintain diversification across sectors and credit quality as
we sought to combine high-quality insured holdings, which provided upside
performance, with higher-yielding issues, which provided income and stability
in a down market. In addition, we have continued to maintain and improve the
Fund's call protection, which helped insulate it during periods of market
volatility.
. With the large number of insured holdings in the Rhode Island municipal
market, we continued to seek non-insured bonds to add yield. Our research
staff has been successful in locating sound opportunities -- primarily in the
health care sector -- in the past year.
. As the Fund's duration lengthened during the past year, we used modest
hedging techniques to bring it down to a more neutral level.
The Fund
- --------------------------------------------------------------------------------
. During the year ended September 30, 1997, the Fund had a total return of
8.6%./1/ This return resulted from an increase in net asset value per share
to $9.61 on September 30, 1997 from $9.31 on September 30, 1996, and the
reinvestment of $0.473 per share in tax-free dividend income./2/
. Based on the Fund's most recent dividend, and a net asset value of $9.61 per
share, the Fund's distribution rate on September 30, 1997 was 4.88%./3/ The
SEC 30-day yield on that date was 4.93%./4/
. To equal 4.88% in a taxable investment, a couple in the 42.34% combined
federal and state tax bracket would need a yield of 8.46%.
Your Investment at Work
- --------------------------------------------------------------------------------
Rhode Island Health and Educational Building Corp. -- Steere House
[GRAPHIC OF MEDICAL SYMBOL APPEARS HERE]
. The proceeds from this bond issue were used to refinance a previous issue and
to fund renovations to the Alzheimer's special care unit at The Steer House,
a 120-bed elderly care facility affiliated with Rhode Island Hospital.
. The previous issue, refunded by these proceeds, had been owned by Eaton Vance
for a few years, so management was familiar and comfortable with the credit.
Because most Rhode Island new issues are insured holdings offering low yield,
this issue represented a good opportunity to add yield to the Fund, thereby
helping the distribution rate for shareholders.
- --------------------------------------------------------------------------------
/1/ This return does not include the maximum 4.75% sales charge. /2/ A portion
of the Fund's income may be subject to federal and state income taxes and/or
federal alternative minimum tax. /3/ The Fund's distribution rate represents
actual distributions paid to shareholders and is calculated daily by dividing
the last distribution per share (annualized) by the net asset value. /4/ The
Fund's SEC yield is calculated by dividing the net investment income per share
for the 30-day period by the offering price at the end of the period and
annualizing the result. /5/ Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. SEC returns
reflect maximum sales charge as noted. *Source: Towers Data Systems, Bethesda,
MD. Investment operations commenced on 12/7/93. Index information is available
only at month-end; therefore, the line comparison begins at the next month-end
following the commencement of the Fund's investment operations. **This figure
represents the Fund's performance including the maximum 4.75% initial sales
charge.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
- --------------------------------------------------------------------------------
Fund Information
as of September 30, 1997
Performance/5/
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
<S> <C>
One Year 8.6%
Life of Fund (12/7/93) 4.0
<CAPTION>
SEC Average Annual Total Returns (including maximum 4.75% sales charge)
- --------------------------------------------------------------------------------
<S> <C>
One Year 3.5%
Life of Fund (12/7/93) 2.7
</TABLE>
Comparison of Change in Value of a $10,000 Investment in the Fund vs. the Lehman
Brothers Municipal Bond Index.*
From December 31, 1993 through September 30, 1997
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Fund's Performance
EV Traditional Including Maximum Lehman Brothers
Rhode Island 4.75% Initial Municipal
Date Municipals Fund Sales Charge** Bond Index
---- --------------- -------------- ----------
<S> <C> <C> <C>
12/31/93 $10,000 $9,525 $10,000
1/31/94 $10,138 $9,657 $10,114
2/28/94 $9,757 $9,293 $9,852
3/31/94 $9,140 $8,706 $9,451
4/30/94 $9,223 $8,785 $9,531
5/31/94 $9,338 $8,895 $9,614
6/30/94 $9,237 $8,798 $9,558
7/31/94 $9,444 $8,995 $9,730
8/31/94 $9,457 $9,008 $9,764
9/30/94 $9,243 $8,804 $9,621
10/31/94 $8,976 $8,550 $9,450
11/30/94 $8,737 $8,322 $9,279
12/31/94 $9,028 $8,599 $9,483
1/31/95 $9,386 $8,940 $9,754
2/28/95 $9,700 $9,239 $10,038
3/31/95 $9,790 $9,325 $10,153
4/30/95 $9,757 $9,294 $10,165
5/31/95 $9,997 $9,523 $10,490
6/30/95 $9,779 $9,315 $10,398
7/31/95 $9,865 $9,396 $10,496
8/31/95 $10,001 $9,526 $10,630
9/30/95 $10,075 $9,597 $10,697
10/31/95 $10,248 $9,761 $10,852
11/30/95 $10,431 $9,936 $11,032
12/31/95 $10,549 $10,048 $11,138
1/31/96 $10,613 $10,109 $11,223
2/29/96 $10,476 $9,979 $11,147
3/31/96 $10,326 $9,836 $11,004
4/30/96 $10,323 $9,833 $10,973
5/31/96 $10,341 $9,850 $10,969
6/30/96 $10,453 $9,956 $11,088
7/31/96 $10,535 $10,035 $11,189
8/31/96 $10,518 $10,019 $11,186
9/30/96 $10,675 $10,168 $11,343
10/31/96 $10,760 $10,249 $11,471
11/30/96 $10,951 $10,431 $11,681
12/31/96 $10,918 $10,399 $11,632
1/31/97 $10,897 $10,379 $11,654
2/28/97 $10,998 $10,476 $11,761
3/31/97 $10,871 $10,354 $11,604
4/30/97 $10,988 $10,466 $11,701
5/31/97 $11,155 $10,625 $11,877
6/30/97 $11,261 $10,727 $12,004
7/31/97 $11,596 $11,046 $12,336
8/31/97 $11,477 $10,932 $12,220
9/30/97 $11,596 $11,045 $12,365
</TABLE>
The chart compares the Fund's total return with that of the Lehman Brothers
Municipal Bond Index, a broad-based, unmanaged market index. Returns are
calculated by determining the percentage change in net asset value (NAV) with
all distributions reinvested. The lines on the chart represent total returns of
$10,000 hypothetical investments in the Fund and the Index. The Index's total
return does not reflect commissions or expenses that would have been incurred if
an investor individually purchased or sold the securities represented in the
Index. It is not possible to invest directly in an Index.
- --------------------------------------------------------------------------------
Federal income tax information on distributions: For federal income tax
purposes, 99.55% of the total dividends paid by the Fund from net investment
income during the year ended September 30, 1997 is designated as an exempt-
interest dividend.
- --------------------------------------------------------------------------------
9
<PAGE>
EV Traditional West Virginia Municipals Fund as of September 30, 1997
INVESTMENT UPDATE
[PHOTO OF TIMOTHY T. BROWSE APPEARS HERE]
Timothy T. Browse,
Portfolio Manager
The Economy
- --------------------------------------------------------------------------------
. Nearly all areas of West Virginia's economy showed growth during the past 12
months. Total employment increased by 9,100 jobs, with the largest gains in
services (up 5,600), trade (up 2,400), construction (up 1,600) and government
(up 1,300).
. The largest job decline was in mining, where employment dropped by 1,300
during the 12-month period. The unemployment rate dropped to 6.3% in August,
1997, from 6.9% a year earlier.
. A bright spot within the state's manufacturing sector was the wood products
industry, which had the fastest growth of any industry in this sector since
the 1980s. Wood products -- including furniture, cabinets, millwork, pallets,
containers, plywood, and prefabricated buildings -- provide over 16,500 jobs
in the state and generate almost $2 billion in annual revenue.
Management Update
- --------------------------------------------------------------------------------
. This has been a positive year for the bond market, with favorable returns
overall resulting from a general downward trend in interest rates. However,
the market has been increasingly volatile. Quarterly price swings often
resulted from whether or not economic data confirmed or negated the so-called
"new economy paradigm," which states, in part, that productivity gains allow
growth to continue with low inflation.
. We seek to maintain a balanced portfolio of high-coupon, defensive bonds and
low-coupon, performance bonds. With interest rates continually moving, we
make minor adjustments on an ongoing basis to maintain the right mix. The
goal of this strategy is to provide the optimum performance in any given
market condition. As interest rates have fallen in the last year, we have
added to our low-coupon, or discount, holdings to maintain the right balance
in the Fund.
The Fund
- --------------------------------------------------------------------------------
. During the year ended September 30, 1997, the Fund had a total return of
9.2%./1/ This return resulted from an increase in net asset value per share
to $9.79 on September 30, 1997 from $9.45 on September 30, 1996, and the
reinvestment of $0.504 per share in tax-free dividend income./2/
. Based on the Fund's most recent dividend, and a net asset value of $9.79 per
share, the Fund's distribution rate on September 30, 1997 was 5.11%./3/ The
SEC 30-day yield on that date was 4.62%./4/
. To equal 5.11% in a taxable investment, a couple in the 40.16% combined
federal and state tax bracket would need a yield of 8.54%.
Your Investment at Work
- --------------------------------------------------------------------------------
School Building Authority of West Virginia Capital Improvement Refunding
Revenue Bonds, Series 1997
[PICTURE OF GRADUATE CAP APPEARS HERE]
. This Authority was created in 1989 to provide funding for elementary and
secondary public schools and to help consolidate school systems to more
effectively utilize the state's educational resources. Through 1996, over
$490 million in grants had been made; this bond issue provided another $130
million.
. A good example of the use of bond proceeds is the Computer Plan. Through this
state program, West Virginia has spent $62.8 million to install computers in
all elementary schools statewide and has trained over 13,000 educators in
computer science.
- --------------------------------------------------------------------------------
/1/This return does not include the maximum 4.75% sales charge. /2/A portion of
the Fund's income may be subject to federal and state income taxes and/or
federal alternative minimum tax. /3/The Fund's distribution rate represents
actual distributions paid to shareholders and is calculated daily by dividing
the last distribution per share (annualized) by the net asset value. /4/The
Fund's SEC yield is calculated by dividing the net investment income per share
for the 30-day period by the offering price at the end of the period and
annualizing the result. /5/Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. SEC returns
reflect maximum sales charge as noted. *Source: Towers Data Systems, Bethesda,
MD. Investment operations commenced on 12/13/93. Index information is available
only at month-end; therefore, the line comparison begins at the next month-end
following the commencement of the Fund's investment operations. **This figure
represents the Fund's performance including the maximum 4.75% initial sales
charge.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
- --------------------------------------------------------------------------------
Fund Information
as of September 30, 1997
<TABLE>
<CAPTION>
Performance/5/
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
<S> <C>
One Year 9.2%
Life of Fund (12/13/93) 4.6
<CAPTION>
SEC Average Annual Total Returns (including maximum 4.75% sales charge)
- --------------------------------------------------------------------------------
<S> <C>
One Year 4.0%
Life of Fund (12/13/93) 3.3
</TABLE>
Comparison of Change in Value of a $10,000 Investment in the Fund vs. the Lehman
Brothers Municipal Bond Index*
From December 31, 1993 through September 30, 1997.
<TABLE>
<CAPTION>
Fund's Performance
EV Traditional Including Maximum Lehman Brothers
West Virginia 4.75% Initial Municipal
Date Municipals Fund Sales Charge** Bond Index
---- --------------- -------- ----------------
<S> <C> <C> <C>
12/31/93 $10,000 $9,526 $10,000
1/31/94 $10,139 $9,658 $10,114
2/28/94 $9,857 $9,390 $9,852
3/31/94 $9,291 $8,850 $9,451
4/30/94 $9,283 $8,843 $9,531
5/31/94 $9,387 $8,941 $9,614
6/30/94 $9,254 $8,815 $9,558
7/31/94 $9,470 $9,021 $9,730
8/31/94 $9,493 $9,043 $9,764
9/30/94 $9,309 $8,868 $9,621
10/31/94 $9,074 $8,643 $9,450
11/30/94 $8,803 $8,385 $9,279
12/31/94 $9,060 $8,630 $9,483
1/31/95 $9,384 $8,939 $9,754
2/28/95 $9,728 $9,267 $10,038
3/31/95 $9,827 $9,361 $10,153
4/30/95 $9,815 $9,350 $10,165
5/31/95 $10,118 $9,638 $10,490
6/30/95 $9,932 $9,460 $10,398
7/31/95 $9,994 $9,520 $10,496
8/31/95 $10,140 $9,659 $10,630
9/30/95 $10,180 $9,697 $10,697
10/31/95 $10,362 $9,870 $10,852
11/30/95 $10,565 $10,064 $11,032
12/31/95 $10,703 $10,195 $11,138
1/31/96 $10,755 $10,245 $11,223
2/28/96 $10,645 $10,140 $11,147
3/31/96 $10,481 $9,984 $11,004
4/30/96 $10,449 $9,954 $10,973
5/31/96 $10,464 $9,967 $10,969
6/30/96 $10,555 $10,055 $11,088
7/31/96 $10,672 $10,165 $11,189
8/31/96 $10,663 $10,158 $11,186
9/30/96 $10,836 $10,322 $11,343
10/31/96 $10,931 $10,413 $11,471
11/30/96 $11,129 $11,601 $11,681
12/31/96 $11,086 $10,560 $11,632
1/31/97 $11,089 $10,563 $11,654
2/28/97 $11,193 $10,662 $11,761
3/31/97 $11,067 $10,542 $11,604
4/30/97 $11,187 $10,656 $11,701
5/31/97 $11,355 $10,817 $11,877
6/30/97 $11,452 $10,909 $12,004
7/31/97 $11,790 $11,230 $12,336
8/31/97 $11,697 $11,142 $12,220
9/30/97 $11,831 $11,269 $12,365
</TABLE>
The chart compares the Fund's total return with that of the Lehman Brothers
Municipal Bond Index, a broad-based, unmanaged market index. Returns are
calculated by determining the percentage change in net asset value (NAV) with
all distributions reinvested. The lines on the chart represent total returns of
$10,000 hypothetical investments in the Fund and the Index. The Index's total
return does not reflect commissions or expenses that would have been incurred if
an investor individually purchased or sold the securities represented in the
Index. It is not possible to invest directly in an Index.
- --------------------------------------------------------------------------------
Federal income tax information on distributions: For federal income tax
purposes, 99.89% of the total dividends paid by the Fund from net investment
income during the year ended September 30, 1997 is designated as an exempt-
interest dividend.
- --------------------------------------------------------------------------------
10
<PAGE>
EV Traditional Municipals Funds as of September 30, 1997
FINANCIAL STATEMENTS
Statements of Assets and Liabilities
As of September 30, 1997
<TABLE>
<CAPTION>
Traditional Traditional Traditional Traditional
California Fund Florida Fund Massachusetts Fund Mississippi Fund
- ---------------------------------------------------------------------------------------------------------------------------
Assets
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment in Municipals Portfolio --
Identified cost $4,279,407 $7,952,043 $4,396,469 $ 889,025
Unrealized appreciation 411,207 186,534 320,814 121,850
- ---------------------------------------------------------------------------------------------------------------------------
Total investment, at value (Note 1A) $4,690,614 $8,138,577 $4,717,283 $1,010,875
- ---------------------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold $ 129,007 $ 36,012 $ -- $ --
Receivable from Administrator (Note 5) 26,136 23,398 21,238 17,849
Deferred organization expenses (Note 1D) 3,171 -- 2,335 2,677
- ---------------------------------------------------------------------------------------------------------------------------
Total assets $4,848,928 $8,197,987 $4,740,856 $1,031,401
- ---------------------------------------------------------------------------------------------------------------------------
Liabilities
- ---------------------------------------------------------------------------------------------------------------------------
Dividends payable $ 12,415 $ 21,592 $ 11,118 $ 3,388
Payable to affiliate for Trustees' fees (Note 5) 42 42 42 --
Accrued expenses 8,689 7,848 8,670 6,972
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 21,146 $ 29,482 $ 19,830 $ 10,360
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets $4,827,782 $8,168,505 $4,721,026 $1,021,041
- ---------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- ---------------------------------------------------------------------------------------------------------------------------
Paid-in capital $4,407,712 $7,979,213 $4,731,158 $1,142,508
Accumulated net realized gain (loss) on
investments from Portfolio (computed on the
basis of identified cost) 6,694 10,217 (322,214) (243,954)
Accumulated undistributed (distributions in
excess of) net investment income 2,169 (7,459) (8,732) 637
Net unrealized appreciation of investments from
Portfolio (computed on the basis of
identified cost) 411,207 186,534 320,814 121,850
- ---------------------------------------------------------------------------------------------------------------------------
Total $4,827,782 $8,168,505 $4,721,026 $1,021,041
- ---------------------------------------------------------------------------------------------------------------------------
Shares of Beneficial Interest Outstanding
- ---------------------------------------------------------------------------------------------------------------------------
442,862 767,645 490,828 104,840
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value and Redemption
Price Per Share
- ---------------------------------------------------------------------------------------------------------------------------
(Net assets/shares of beneficial interest
outstanding) $ 10.90 $ 10.64 $ 9.62 $ 9.74
- ---------------------------------------------------------------------------------------------------------------------------
Computation of Offering Price Per Share (Note 2)
- ---------------------------------------------------------------------------------------------------------------------------
Offering price per share (100/95.25) $ 11.44 $ 11.17 $ 10.10 $ 10.23
- ---------------------------------------------------------------------------------------------------------------------------
On sales of $25,000 or more, the offering price is reduced.
</TABLE>
See notes to financial statements
11
<PAGE>
EV Traditional Municipals Funds as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Assets and Liabilities
As of September 30, 1997
<TABLE>
<CAPTION>
Traditional Traditional Traditional Traditional
New York Fund Ohio Fund Rhode Island Fund West Virginia Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Investment in Municipals Portfolio --
Identified cost $8,291,121 $3,074,885 $1,653,436 $1,699,202
Unrealized appreciation 360,034 59,995 78,130 72,043
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment, at value (Note 1A) $8,651,155 $3,134,880 $1,731,566 $1,771,245
- ------------------------------------------------------------------------------------------------------------------------------------
Receivable from the Administrator (Note 5) $ 25,992 $ 22,939 $ 16,436 $ 20,344
Receivable for Fund shares sold -- 24,387 -- 478
Deferred organization expenses (Note 1D) 5,379 2,451 2,422 2,743
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $8,682,526 $3,184,657 $1,750,424 $1,794,810
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions payable $ 20,204 $ 8,051 $ 4,650 $ 2,322
Payable for Fund shares redeemed -- 4,544 -- 7,500
Payable to affiliate for Trustees' fees (Note 5) 42 -- -- --
Accrued expenses 11,104 8,654 7,459 7,924
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 31,350 $ 21,249 $ 12,109 $ 17,746
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets $8,651,176 $3,163,408 $1,738,315 $1,777,064
- ------------------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Paid-in capital $8,283,921 $3,197,799 $2,018,099 $1,800,185
Accumulated net realized gain (loss) from
Portfolio (computed on basis of identified
cost) 34,459 (96,491) (357,852) (93,531)
Accumulated undistributed (distributions in
excess of) net investment income (27,238) 2,105 (62) (1,633)
Net unrealized appreciation of investments and
financial futures transactions (computed on
basis of identified cost) 360,034 59,995 78,130 72,043
- ------------------------------------------------------------------------------------------------------------------------------------
Total $8,651,176 $3,163,408 $1,738,315 $1,777,064
- ------------------------------------------------------------------------------------------------------------------------------------
Shares of Beneficial Interest Outstanding
- ------------------------------------------------------------------------------------------------------------------------------------
823,415 326,756 180,806 181,603
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value and Redemption
Price Per Share
- ------------------------------------------------------------------------------------------------------------------------------------
(Net assets / shares of beneficial interest
outstanding) $ 10.51 $ 9.68 $ 9.61 $ 9.79
- ------------------------------------------------------------------------------------------------------------------------------------
Computation of Offering Price Per Share (Note 2)
- ------------------------------------------------------------------------------------------------------------------------------------
Offering price per share (100 / 95.25) $ 11.03 $ 10.16 $ 10.09 $ 10.28
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
On sales of $25,000 or more, the offering price is reduced.
See notes to financial statements
12
<PAGE>
EV Traditional Municipals Funds as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Operations
For the Year Ended September 30, 1997
<TABLE>
<CAPTION>
Traditional Traditional Traditional Traditional
California Fund Florida Fund Massachusetts Fund Mississippi Fund
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income (Note 1B)
- --------------------------------------------------------------------------------------------------------------------------------
Interest income allocated from Portfolio $327,478 $347,664 $394,922 $63,157
Expenses allocated from Portfolio (28,776) (27,462) (33,281) (3,942)
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income from Portfolio $298,702 $320,202 $361,641 $59,215
- --------------------------------------------------------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------------------------------------------------------
Compensation of Trustees not members of the
Administrator's organization (Note 5) $ 165 $ 257 $ -- $ 131
Service fees (Note 7) 6,045 5,663 1,355 1,730
Custodian fee (Note 1G) 3,626 3,325 3,626 3,626
Transfer and dividend disbursing agent fees 3,998 6,366 4,397 1,218
Printing and postage 5,300 6,034 5,705 4,849
Legal and accounting services 9,496 8,574 9,343 11,946
Registration fees -- -- 1,000 350
Amortization of organization expenses (Note 1D) 1,923 465 2,015 2,295
Miscellaneous 1,332 875 318 10
- --------------------------------------------------------------------------------------------------------------------------------
Total expenses $ 31,885 $ 31,559 $ 27,759 $26,155
- --------------------------------------------------------------------------------------------------------------------------------
Deduct --
Allocation of expenses to the Administrator (Note 5) $ 26,136 $ 23,398 $ 21,238 $17,849
Reduction of custodian fee (Note 1G) -- 1,397 -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total expense reductions $ 26,136 $ 24,795 $ 21,238 $17,849
- --------------------------------------------------------------------------------------------------------------------------------
Net expenses $ 5,749 $ 6,764 $ 6,521 $ 8,306
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income $292,953 $313,438 $355,120 $50,909
- --------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Portfolio
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 70,008 $102,700 $ 58,381 $27,219
Financial futures contracts (46,009) (85,190) (64,876) (8,859)
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments $ 23,999 $ 17,510 $ (6,495) $18,360
- --------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments $178,028 $ 57,226 $239,990 $20,373
Financial futures contracts 1,828 9,848 1,788 137
- --------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)
of investments $179,856 $ 67,074 $241,778 $20,510
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $203,855 $ 84,584 $235,283 $38,870
- --------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $496,808 $398,022 $590,403 $89,779
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
13
<PAGE>
EV Traditional Municipals Funds as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Operations
For the Year Ended September 30, 1997
<TABLE>
<CAPTION>
Traditional Traditional Traditional Traditional
New York Fund Ohio Fund Rhode Island Fund West Virginia Fund
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income (Note 1B)
- ---------------------------------------------------------------------------------------------------------------------------------
Interest income allocated from Portfolio $471,622 $140,986 $ 99,383 $ 96,549
Expenses allocated from Portfolio (43,585) (12,433) (3,836) (5,945)
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income from Portfolio $428,037 $128,553 $ 95,547 $ 90,604
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses
- ---------------------------------------------------------------------------------------------------------------------------------
Compensation of Trustees not members of the
Administrator's organization (Note 5) $ 165 $ -- $ -- $ --
Custodian fee (Note 1G) 3,480 3,625 3,418 3,592
Service fees (Note 7) 9,502 3,656 4,029 1,226
Distribution fees (Note 6) -- -- 2,607 --
Transfer and dividend disbursing agent fees 5,917 1,427 1,875 1,331
Printing and postage 7,120 4,954 4,930 4,858
Legal and accounting services 10,116 8,799 8,791 7,189
Registration fees 20 1,100 319 50
Amortization of organization expenses (Note 1D) 3,018 2,601 2,051 2,314
Miscellaneous 575 488 880 2,223
- ---------------------------------------------------------------------------------------------------------------------------------
Total expenses $ 39,913 $ 26,650 $ 28,900 $ 22,783
- ---------------------------------------------------------------------------------------------------------------------------------
Deduct --
Allocation of expenses to the Administrator (Note 5) $ 25,992 $ 22,939 $ 16,436 $ 20,344
Reduction of custodian fee (Note 1G) -- -- 740 --
- ---------------------------------------------------------------------------------------------------------------------------------
Total expense reductions $ 25,992 $ 22,939 $ 17,176 $ 20,344
- ---------------------------------------------------------------------------------------------------------------------------------
Net expenses $ 13,921 $ 3,711 $ 11,724 $ 2,439
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income $414,116 $124,842 $ 83,823 $ 88,165
- ---------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Portfolio
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $106,404 $ 20,530 $(41,474) $ 11,038
Financial futures contracts (37,237) (14,865) (13,637) (21,099)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments $ 69,167 $ 5,665 $(55,111) $(10,061)
- ---------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments $218,028 $ 64,226 $116,240 $ 67,947
Financial futures contracts (11,686) 3,383 (1,796) 1,219
- ---------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)
of investments $206,342 $ 67,609 $114,444 $ 69,166
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $275,509 $ 73,274 $ 59,333 $ 59,105
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $689,625 $198,116 $143,156 $147,270
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
14
<PAGE>
EV Traditional Municipals Funds as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended September 30, 1997
<TABLE>
<CAPTION>
Traditional Traditional Traditional Traditional
Increase (Decrease) in Net Assets California Fund Florida Fund Massachusetts Fund Mississippi Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 292,953 $ 313,438 $ 355,120 $ 50,909
Net realized gain (loss) on investments 23,999 17,510 (6,495) 18,360
Net change in unrealized appreciation
of investments 179,856 67,074 241,778 20,510
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 496,808 $ 398,022 $ 590,403 $ 89,779
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders (Note 3) --
From net investment income $ (291,998) $ (313,438) $ (355,120) $ (55,622)
In excess of net investment income -- (4,953) (1,911) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders $ (291,998) $ (318,391) $ (357,031) $ (55,622)
- ------------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial
interest (Note 4) -
Proceeds from sale of shares $ 2,102,680 $11,724,755 $ 2,339,169 $ 149,829
Net asset value of shares issued to
shareholders in payment of distributions
declared 182,729 103,388 255,561 36,834
Cost of shares redeemed (3,830,819) (8,127,62) (4,152,464) (407,956)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from
Fund share transactions $ (1,545,410) $ 3,700,518 $(1,557,734) $ (221,293)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets $ (1,340,600) $ 3,780,149 $(1,324,362) $ (187,136)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 6,168,382 $ 4,388,356 $ 6,045,388 $1,208,177
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $ 4,827,782 $ 8,168,505 $ 4,721,026 $1,021,041
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed (distributions in
excess of) net investment income included in
net assets
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $ 2,169 $ (7,459) $ (8,732) $ 637
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
15
<PAGE>
EV Traditional Municipals Funds as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended September 30, 1997
<TABLE>
<CAPTION>
Traditional Traditional Traditional Traditional
Increase (Decrease) in Net Assets New York Fund Ohio Fund Rhode Island Fund West Virginia Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 414,116 $ 124,842 $ 83,823 $ 88,165
Net realized gain (loss) on investments 69,167 5,665 (55,111) (10,061)
Net change in unrealized appreciation
(depreciation) of investments 206,342 67,609 114,444 69,166
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 689,625 $ 198,116 $ 143,156 $ 147,270
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders (Note 3) --
From net investment income $ (414,116) $ (121,754) $ (87,497) $ (88,165)
In excess of net investment income (13,185) -- (62) (19)
From net realized gain (39,813) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders $ (467,114) $ (121,754) $ (87,559) $ (88,184)
- ------------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest
(Note 4) --
Proceeds from sales of shares $3,884,035 $1,377,762 $ 186,756 $ 186,097
Net asset value of shares issued to
shareholders in payment of
distributions declared 219,589 83,320 46,290 62,532
Cost of shares redeemed (2,699,978) (333,280) (997,005) (115,512)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Fund
share transactions $1,403,646 $1,127,802 $ (763,959) $ 133,117
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets $1,626,157 $1,204,164 $ (708,362) $ 192,203
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of year $7,025,019 $1,959,244 $2,446,677 $1,584,861
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $8,651,176 $3,163,408 $1,738,315 $1,777,064
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed
(distributions in excess of) net
investment income included in net assets
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $ (27,238) $ 2,105 $ (62) $ (1,633)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
16
<PAGE>
EV Traditional Municipals Funds as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended September 30, 1996
<TABLE>
<CAPTION>
Traditional Traditional Traditional Traditional
Increase (Decrease) in Net Assets California Fund Florida Fund Massachusetts Fund Mississippi Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 207,729 $ 216,249 $ 183,774 $ 79,658
Net realized gain on investments 36,997 29,687 2,843 24,121
Net change in unrealized appreciation
(depreciation) of investments 68,798 3,027 31,359 27,050
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 313,524 $ 248,963 $ 217,976 $ 130,829
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders (Note 3) --
From net investment income $ (208,459) $ (216,249) $ (184,196) $ (80,687)
In excess of net investment income -- (830) (6,821) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders $ (208,459) $ (217,079) $ (191,017) $ (80,687)
- ------------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest
(Note 4) --
Proceeds from sales of shares $4,245,553 $1,826,853 $4,671,489 $ 71,284
Net asset value of shares issued to shareholders
in payment of distributions declared 102,478 69,823 131,950 59,858
Cost of shares redeemed (2,377,166) (1,087,885) (1,548,936) (1,302,869)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Fund
share transactions $1,970,865 $ 808,791 $3,254,503 $(1,171,727)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets $2,075,930 $ 840,675 $3,281,462 $(1,121,585)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of year $4,092,452 $3,547,681 $2,763,926 $ 2,329,762
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $6,168,382 $4,388,356 $6,045,388 $ 1,208,177
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed
(distributions in excess of) net
investment income included in net assets
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $ 1,214 $ (2,506) $ (6,821) $ 5,350
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
17
<PAGE>
EV Traditional Municipals Funds as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended September 30, 1996
<TABLE>
<CAPTION>
Traditional Traditional Traditional Traditional
Increase (Decrease) in Net Assets New York Fund Ohio Fund Rhode Island Fund West Virginia Fund
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 321,615 $ 107,402 $ 117,781 $ 53,128
Net realized gain (loss) on investments 29,553 4,843 (44,799) (15,566)
Net change in unrealized appreciation of
investments 8,414 12,947 93,931 39,368
- --------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 359,582 $ 125,192 $ 166,913 $ 76,930
- --------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders (Note 3) --
From net investment income $ (321,615) $ (107,402) $ (120,844) $ (56,133)
In excess of net investment income (13,657) (959) -- (2,011)
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders $ (335,272) $ (108,361) $ (120,844) $ (58,144)
- --------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest
(Note 4) --
Proceeds from sales of shares $ 3,396,331 $ 320,479 $ 256,808 $ 902,359
Net asset value of shares issued to shareholders
in payment of distributions declared 164,593 75,359 72,771 42,725
Cost of shares redeemed (987,352) (621,339) (963,255) (411,297)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Fund
share transactions $ 2,573,572 $ (225,501) $ (633,676) $ 533,787
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets $ 2,597,882 $ (208,670) $ (587,607) $ 552,573
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 4,427,137 $ 2,167,914 $ 3,034,284 $ 1,032,288
- --------------------------------------------------------------------------------------------------------------------------------
At end of year $ 7,025,019 $ 1,959,244 $ 2,446,677 $ 1,584,861
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed
(distributions in excess of) net
investment income included in net assets
- --------------------------------------------------------------------------------------------------------------------------------
At end of year $ (14,053) $ (983) $ 3,674 $ (1,614)
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
18
<PAGE>
EV Traditional Municipals Funds as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Traditional California Fund Traditional Florida Fund
------------------------------------- ----------------------------------
Year Ended September 30, Year Ended September 30,
------------------------------------- ----------------------------------
1997 1996 1995 1994* 1997 1996 1995 1994**
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of year $ 10.380 $10.180 $9.840 $10.000 $ 10.530 $10.450 $10.020 $10.000
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.596 $ 0.601 $0.610 $ 0.209 $ 0.575 $ 0.587 $ 0.587 $ 0.288
Net realized and unrealized gain (loss)
on investments 0.517 0.203 0.335 (0.158) 0.119 0.082 0.438 0.023
- ------------------------------------------------------------------------------------------------------------------------------------
Total income from operations $ 1.113 $ 0.804 $0.945 $ 0.051 $ 0.694 $ 0.669 $ 1.025 $ 0.311
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ------------------------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.593) $(0.604) $(0.605) $(0.209) $ (0.575) $(0.587) $(0.587) $(0.288)
In excess of net investment income -- -- -- (0.002) (0.009) (0.002) (0.008) (0.003)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.593) $(0.604) $(0.605) $(0.211) $ (0.584) $(0.589) $(0.595) $(0.291)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End of year $ 10.900 $10.380 $10.180 $ 9.840 $ 10.640 $10.530 $10.450 $10.020
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return/(1)/ 11.05% 8.05% 9.94% 0.50% 6.75% 6.55% 10.59% 3.10%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data++
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $ 4,828 $ 6,168 $ 4,093 $ 3,101 $ 8,169 $ 4,388 $ 3,548 $ 1,246
Ratio of net expenses to average daily
net assets /(2)(3)/ 0.68% 0.65% 0.63% 0.54%+ 0.65% 0.67% 0.66% 0.50%+
Ratio of net expenses to average daily net
assets, after custodian fee 0.67% 0.64% 0.62% -- 0.59% 0.59% 0.61% --
reduction /(2)/
Ratio of net investment income to average daily 5.65% 5.83% 6.08% 5.60%+ 5.38% 5.57% 5.68% 5.30%+
net assets
</TABLE>
++ The operating expenses of the Funds and the Portfolios may reflect a
reduction of the Investment Adviser fee, an allocation of expenses to the
Administrator, or both. Had such actions not been taken, the ratios and net
investment income per share would have been as follows:
<TABLE>
<S>
Ratios (As a percentage of average daily net <C> <C> <C> <C> <C> <C> <C> <C>
assets):
Expenses/(2)(3)/ 1.18% 1.37% 1.60% 1.92%+ 1.05% 1.19% 1.53% 2.48%+
Expenses after custodian fee reduction/(2)/ 1.17% 1.36% 1.59% -- 0.99% 1.11% 1.48% --
Net investment income 5.15% 5.11% 5.11% 4.22%+ 4.98% 5.05% 4.81% 3.32%+
Net investment income per share $ 0.543 $0.527 $0.513 $ 0.158 $ 0.532 $ 0.532 $0.497 $0.081
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, May 27, 1994, to September 30,
1994.
** For the period from the start of business, April 5, 1994, to September 30,
1994.
/(1)/ Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the payable date. Total return is not
computed on an annualized basis.
/(2)/ Includes each Fund's share of its corresponding Portfolio's allocated
expenses.
/(3)/ The expense ratios for the years ended September 30, 1995 and thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require each Fund, as well as its corresponding
Portfolio, to increase their expense ratios by the effect of any expense
offset arrangements with their service providers. The expense ratios for
the prior periods have not been adjusted to reflect this change.
See notes to financial statements
19
<PAGE>
EV Traditional Municipals Funds as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Traditional Massachusetts Fund
-------------------------------------------------------
Year Ended September 30,
-------------------------------------------------------
1997 1996 1995 1994*
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value -- Beginning of year $ 9.300 $ 9.260 $ 9.000 $10.000
- -------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -------------------------------------------------------------------------------------------------------------
Net investment income $ 0.530 $ 0.490++ $ 0.449 $ 0.350
Net realized and unrealized gain (loss)
on investments 0.323 0.062++ 0.283 (0.933)
- -------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.853 $ 0.552 $ 0.732 $(0.583)
- -------------------------------------------------------------------------------------------------------------
Less distributions
- -------------------------------------------------------------------------------------------------------------
From net investment income $(0.530) $(0.494) $(0.449) $(0.350)
In excess of net investment income (0.003) (0.018) (0.023) (0.067)
- -------------------------------------------------------------------------------------------------------------
Total distributions $(0.533) $(0.512) $(0.472) $(0.417)
- -------------------------------------------------------------------------------------------------------------
Net asset value -- End of year $ 9.620 $ 9.300 $ 9.260 $ 9.000
- -------------------------------------------------------------------------------------------------------------
Total Return /(1)/ 9.45% 6.19% 8.45% (6.02)%
- -------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+++
- -------------------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $ 4,721 $ 6,045 $ 2,764 $ 3,743
Ratio of net expenses to average daily net
assets /(2)/(3)/ 0.65% 0.98% 1.53% 1.61%+
Ratio of net expenses to average daily net
assets, after custodian fee reduction /(2)/ 0.63% 0.97% 1.51% --
Ratio of net investment income to average
daily net assets 5.64% 5.33% 5.05% 4.55%+
</TABLE>
+++ The operating expenses of the Funds and the Portfolios may reflect a
reduction of the Investment Adviser fee, an allocation of expenses to the
Investment Adviser or Administrator, or both. Had such actions not been
taken, the ratios and net investment income per share would have been as
follows:
<TABLE>
<CAPTION>
Ratios (As a percentage of average daily net assets):
<S> <C> <C> <C> <C>
Expenses /(2)/(3)/ 0.98% 1.63% 2.02% 2.78%+
Expenses after custodian fee reduction /(2)/ 0.96% 1.62% 2.00% --
Net investment income 5.31% 4.68% 4.56% 3.38%+
Net investment income per share $ 0.499 $ 0.430 $ 0.405 $ 0.260
- -------------------------------------------------------------------------------------------------------------
<CAPTION>
Traditional Mississippi Fund
-------------------------------------------------------
Year Ended September 30,
-------------------------------------------------------
1997 1996 1995 1994*
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value--Beginning of year $ 9.420 $ 9.300 $ 8.920 $10.000
- -------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -------------------------------------------------------------------------------------------------------------
Net investment income $ 0.460 $ 0.456++ $ 0.426 $ 0.338
Net realized and unrealized gain (loss)
on investments 0.356 0.140++ 0.391 (1.024)
- -------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.816 $ 0.596 $ 0.817 $(0.686)
- -------------------------------------------------------------------------------------------------------------
Less distributions
- -------------------------------------------------------------------------------------------------------------
From net investment income $(0.496) $(0.476) $(0.426) $(0.338)
In excess of net investment income -- -- (0.011) (0.056)
- -------------------------------------------------------------------------------------------------------------
Total distributions $(0.496) $(0.476) $(0.437) $(0.394)
- -------------------------------------------------------------------------------------------------------------
Net asset value -- End of year $ 9.740 $ 9.420 $ 9.300 $ 8.920
- -------------------------------------------------------------------------------------------------------------
Total Return /(1)/ 8.88% 6.64% 9.47% (6.96)%
- -------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+++
- -------------------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $ 1,021 $ 1,208 $ 2,330 $ 2,800
Ratio of net expenses to average daily net
assets /(2)/(3)/ 1.16% 1.13% 1.48% 1.24%+
Ratio of net expenses to average daily net
assets, after custodian fee reduction /(2)/ 1.14% 1.10% 1.44% --
Ratio of net investment income to average
daily net assets 4.76% 4.88% 4.79% 4.42%+
</TABLE>
+++ The operating expenses of the Funds and the Portfolios may reflect a
reduction of the Investment Adviser fee, an allocation of expenses to the
Investment Adviser or Administrator, or both. Had such actions not been
taken, the ratios and net investment income per share would have been as
follows:
<TABLE>
<CAPTION>
Ratios (As a percentage of average daily net assets):
<S> <C> <C> <C> <C>
Expenses /(2)/(3)/ 2.83% 2.18% 2.18% 2.45%+
Expenses after custodian fee reduction /(2)/ 2.81% 2.15% 2.14% --
Net investment income 3.09% 3.83% 4.09% 3.21%+
Net investment income per share $ 0.299 $ 0.358 $ 0.364 $ 0.246
- -------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
++ Per share data has been computed based on average shares outstanding.
* For the period from the start of business, December 7, 1993, to September
30, 1994.
/(1)/ Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the payable date. Total return is not
computed on an annualized basis.
/(2)/ Includes each Fund's share of its corresponding Portfolio's allocated
expenses.
/(3)/ The expense ratios for the years ended September 30, 1995 and thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Fund, as well as its corresponding
Portfolio, to increase its expense ratio by the effect of any expense
offset arrangements with its service providers. The expense ratios for the
prior periods have not been adjusted to reflect this change.
See notes to financial statements
20
<PAGE>
EV Traditional Municipals Funds as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Traditional New York Fund Traditional Ohio Fund
------------------------------------- ----------------------------------------
Year Ended September 30, Year Ended September 30,
------------------------------------- ----------------------------------------
1997 1996 1995 1994* 1997 1996 1995 1994**
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of year $10.220 $10.150 $ 9.780 $10.000 $ 9.380 $ 9.320 $ 8.940 $10.000
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.560 $ 0.570++ $ 0.583 $ 0.271 $ 0.524 $ 0.486 $ 0.428 $ 0.348
Net realized and unrealized gain (loss) on 0.357 0.095++ 0.390 (0.214) 0.289 0.064 0.404 (0.992)
investments
- ------------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.917 $ 0.665 $ 0.973 $ 0.057 $ 0.813 $ 0.550 $ 0.832 $(0.644)
- -------------------------------------------------------------------------------------------------------------------------- ---------
Less distributions
- ------------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.560) $(0.571) $(0.583) $(0.271) $ (0.513) $(0.486) $(0.428) $(0.348)
In excess of net investment income (0.018) (0.024) (0.017) (0.006) -- (0.004) (0.024) (0.068)
From net realized gain on investments (0.049) -- -- -- -- -- -- --
In excess of net realized gain on investments -- -- (0.003) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions $(0.627) $(0.595) $(0.603) $(0.277) $ (0.513) $(0.490) $(0.452) $(0.416)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End of year $10.510 $10.220 $10.150 $ 9.780 $ 9.680 $ 9.380 $ 9.320 $ 8.940
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return/(1)/ 9.24% 6.69% 10.32% 0.56% 8.91% 6.12% 9.64% (6.75)%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+++
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $ 8,651 $ 7,025 $ 4,427 $ 1,382 $ 3,163 $ 1,959 $ 2,168 $ 2,111
Ratio of net expenses to average daily net
assets/(2)(3)/ 0.75% 0.59% 0.59% 0.44%+ 0.72% 1.11% 1.56% 1.60%+
Ratio of net expenses to average daily net
assets, after custodian fee reduction/(2)/ 0.75% 0.56% 0.50% -- 0.71% 1.06% 1.54% --
Ratio of net investment income to average
daily net assets 5.41% 5.55% 5.77% 5.36%+ 5.50% 5.14% 4.76% 4.42%+
</TABLE>
+++ The operating expenses of the Funds reflect an allocation of expenses to the
Administrator. Had such actions not been taken, the ratios and net
investment income per share would have been as follows:
<TABLE>
<CAPTION>
Ratios (As a percentage of average daily net assets):
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Expenses/(2)(3)/ 1.09% 1.03% 1.29% 2.71%+ 1.73% 2.05% 2.58% 2.96%+
Expenses after custodian fee reduction/(2)/ 1.09% 1.00% 1.20% -- 1.72% 2.00% 2.56% --
Net investment income 5.07% 5.11% 5.07% 3.09%+ 4.49% 4.20% 3.74% 3.06%+
Net investment income per share $ 0.525 $ 0.525 $ 0.512 $ 0.156 $ 0.428 $ 0.397 $ 0.336 $ 0.241
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
++ Per share data has been computed based on average shares outstanding.
* For the period from the start of business, April 15, 1994, to September 30,
1994.
** For the period from the start of business, December 7, 1993, to September
30, 1994.
/(1)/Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the payable date. Total return is not
computed on an annualized basis.
/(2)/Includes each Fund's share of its corresponding Portfolio's allocated
expenses.
/(3)/The expense ratios for the years ended September 30, 1995 and thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Fund, as well as its corresponding
Portfolio, to increase its expense ratio by the effect of any expense
offset arrangements with its service providers. The expense ratios for the
prior periods have not been adjusted to reflect this change.
See notes to financial statements
21
<PAGE>
EV Traditional Municipals Funds as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Traditional Rhode Island Fund Traditional West Virginia Fund
-------------------------------------------------------------------------------------
Year Ended September 30, Year Ended September 30,
-------------------------------------------------------------------------------------
1997 1996 1995 1994* 1997 1996 1995 1994**
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of year $ 9.310 $ 9.210 $ 8.890 $10.000 $ 9.450 $ 9.350 $ 8.980 $10.000
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.459 $ 0.431 $ 0.442 $ 0.347 $ 0.504 $ 0.433 $ 0.427 $ 0.326
Net realized and unrealized gain (loss)
on investments 0.314 0.106 0.331 (1.046) 0.340 0.139 0.385 (0.959)
- --------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.773 $ 0.537 $ 0.773 $(0.699) $ 0.844 $ 0.572 $ 0.812 $(0.633)
- --------------------------------------------------------------------------------------------------------------------------------
Less distributions
- --------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.473) $(0.477) $(0.442) $(0.347) $(0.504) $(0.456) $(0.427) $(0.326)
In excess of net investment income -- # -- (0.011) (0.064) -- # (0.016) (0.015) (0.061)
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions $(0.473) $(0.437) $(0.453) $(0.411) $(0.504) $(0.472) $(0.442) $(0.387)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End of year $ 9.610 $ 9.310 $ 9.210 $ 8.890 $ 9.790 $ 9.450 $ 9.350 $ 8.980
- --------------------------------------------------------------------------------------------------------------------------------
Total Return/(1)/ 8.62% 5.95% 9.00% (7.29)% 9.18% 6.45% 9.35% (6.53)%
- --------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data++
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $ 1,738 $ 2,447 $ 3,034 $ 3,919 $ 1,777 $ 1,585 $ 1,032 $ 1,897
Ratio of net expenses to average daily net
assets/(2)(3)/ 0.99% 1.35% 1.29% 1.23%+ 0.52% 1.10% 1.35% 1.28%+
Ratio of net expenses to average daily net
assets, after custodian fee reduction/(2)/ 0.90% 1.32% 1.23% -- 0.50% 1.06% 1.33% --
Ratio of net investment income to average
daily net assets 4.86% 4.58% 5.00% 4.50%+ 5.26% 4.64% 4.81% 4.53%+
</TABLE>
++ The operating expenses of the Funds and the Portfolios may reflect a
reduction of the Investment Adviser fee, an allocation of expenses to the
Investment Adviser or Administrator, or both. Had such actions not been
taken, the ratios and net investment income per share would have been as
follows:
<TABLE>
<CAPTION>
Ratios (As a percentage of average daily net assets):
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Expenses/(2)(3)/ 2.06% 2.15% 2.03% 1.85%+ 1.73% 2.41% 2.58% 2.66%+
Expenses after custodian fee reduction/(2)/ 1.97% 2.12% 1.97% -- 1.71% 2.37% 2.56% --
Net investment income 3.79% 3.78% 4.26% 3.88%+ 4.05% 3.33% 3.58% 3.15%+
Net investment income per share $0.358 $ 0.356 $ 0.377 $ 0.299 $ 0.388 $ 0.310 $ 0.318 $ 0.204
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, December 7, 1993, to September
30, 1994.
** For the period from the start of business, December 13, 1993, to
September 30, 1994.
# Amount represents less than $0.001 per share.
/(1)/ Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the payable date. Total return is not
computed on an annualized basis.
/(2)/ Includes each Fund's share of its corresponding Portfolio's allocated
expenses.
/(3)/ The expense ratios for the years ended September 30, 1995 and thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Fund, as well as its corresponding
Portfolio, to increase its expense ratio by the effect of any expense
offset arrangements with its service providers. The expense ratios for the
prior periods have not been adjusted to reflect this change.
See notes to financial statements
22
<PAGE>
EV Traditional Municipals Funds as of September 30, 1997
NOTES TO FINANCIAL STATEMENTS
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 Funds, eight of
which are included in these financial statements. They include EV Traditional
California Municipals Fund ("Traditional California Fund"), EV Traditional
Florida Municipals Fund ("Traditional Florida Fund"), EV Traditional
Massachusetts Municipals Fund ("Traditional Massachusetts Fund"), EV
Traditional Mississippi Municipals Fund ("Traditional Mississippi Fund"), EV
Traditional New York Municipals Fund ("Traditional New York Fund"), EV
Traditional Ohio Municipals Fund ("Traditional Ohio Fund"), EV Traditional
Rhode Island Municipals Fund ("Traditional Rhode Island Fund"), and EV
Traditional West Virginia Municipals Fund ("Traditional West Virginia Fund"),
each of which is registered under the Investment Company Act of 1940 as a
non-diversified open-end management investment company. Each Fund invests all
of its investable assets in interests in a separate corresponding open-end
management investment company (a "Portfolio"), a New York Trust, having the
same investment objective as its corresponding Fund. The Traditional
California Fund invests its assets in the California Municipals Portfolio,
the Traditional Florida Fund invests its assets in the Florida Municipals
Portfolio, the Traditional Massachusetts Fund invests its assets in the
Massachusetts Municipals Portfolio, the Traditional Mississippi Fund invests
its assets in the Mississippi Municipals Portfolio, the Traditional New York
Fund invests its assets in the New York Municipals Portfolio, the Traditional
Ohio Fund invests its assets in the Ohio Municipals Portfolio, the
Traditional Rhode Island Fund invests its assets in the Rhode Island
Municipals Portfolio and the Traditional West Virginia Fund invests its
assets in the West Virginia Municipals Portfolio. The value of each Fund's
investment in its corresponding Portfolio reflects the Fund's proportionate
interest in the net assets of that Portfolio (1.4%, 1.6%, 1.9%, 4.6%, 1.6%,
1.2%, 4.3%, and 5.3% at September 30, 1997 for the Traditional California
Fund, Traditional Florida Fund, Traditional Massachusetts Fund, Traditional
Mississippi Fund, Traditional New York Fund, Traditional Ohio Fund,
Traditional Rhode Island Fund and Traditional West Virginia 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.
On June 23, 1997, the Board of Trustees approved a Plan of Reorganization
(the "Plan") for the Trust. Under the terms of the Plan, the EV Marathon
California Municipals Fund, EV Marathon Florida Municipals Fund, EV Marathon
Massachusetts Municipals Fund, EV Marathon Mississippi Municipals Fund, EV
Marathon New York Municipals Fund, EV Marathon Ohio Municipals Fund, EV
Marathon Rhode Island Municipals Fund and EV Marathon West Virginia
Municipals Fund (the Successor Funds), each a separate series of the Trust,
would acquire substantially all of the assets and liabilities of the
Traditional California Fund, Traditional Florida Fund, Traditional
Massachusetts Fund, Traditional Mississippi Fund, Traditional New York Fund,
Traditional Ohio Fund, Traditional Rhode Island Fund and Traditional West
Virginia Fund, respectively (the Acquired Funds). The transactions will be
structured for tax purposes to qualify as a tax-free reorganization under the
Internal Revenue Code. The Trust will issue and deliver to the Acquired Funds
a number of full and fractional shares of beneficial interest of a separate
class of the Successor Funds (Class A Shares), which will be equal in value
to the net asset values per share of the Acquired Funds multiplied by the
number of full and fractional shares of the Acquired Funds then outstanding.
Such transaction will occur after the close of business, September 30, 1997.
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 Valuation -- Valuation of securities by the Portfolios is
discussed in Note 1A of the Portfolios' Notes to Financial Statements which
are included elsewhere in this report.
B Income -- Each Fund's net investment income consists of the 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. Accordingly, no provision for
federal income or excise tax is necessary. At September 30, 1997, the Funds,
for federal income tax purposes, had capital loss carryovers which will
reduce taxable income arising from future net realized gain, if any, to the
extent permitted by the Internal Revenue Code, and thus will reduce the
amount of the distributions to shareholders which would otherwise be
necessary to
23
<PAGE>
EV Traditional Municipals Funds as of September 30, 1997
NOTES TO FINANCIAL STATEMENTS CONT'D
relieve the Funds of any liability for Federal income or excise tax. Such
capital loss carryovers will be transferred to the respective Successor Funds
subject to certain limitations.
The amounts and expiration dates of the capital loss carryovers are as
follows:
<TABLE>
<CAPTION>
Fund Amount Expires
-----------------------------------------------------------------------------
<S> <C> <C>
Traditional California Fund $ 10,860 September 30, 2003
Traditional Florida Fund 5,811 September 30, 2004
Traditional Massachusetts Fund 2,135 September 30, 2005
198,425 September 30, 2004
14,863 September 30, 2003
85,630 September 30, 2002
Traditional Mississippi Fund 178,545 September 30, 2004
20,891 September 30, 2003
47,035 September 30, 2002
Traditional Ohio Fund 68,805 September 30, 2004
4,540 September 30, 2003
1,296 September 30, 2002
Traditional Rhode Island Fund 34,703 September 30, 2005
176,324 September 30, 2004
85,223 September 30, 2002
Traditional West Virginia Fund 23,301 September 30, 2005
44,054 September 30, 2004
4,513 September 30, 2003
20,474 September 30, 2002
</TABLE>
Additionally, at September 30, 1997, net capital losses of $20,884 and $463
for the Traditional Rhode Island Fund and the Traditional West Virginia Fund,
respectively, attributable to security transactions incurred after October
31, 1996 are treated as arising on the first day of each Fund's next 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 Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expense during the reporting period. Actual results could
differ from those estimates.
F Other -- Investment transactions are accounted for on a trade-date basis.
G Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian to the Funds and the Portfolios. Pursuant to the respective
custodian agreements, IBT receives a fee reduced by credits which are
determined based on the average daily cash balances the Funds or the
Portfolios maintain with IBT. All significant credit balances used to reduce
each Fund's custodian fees are reflected as a reduction of operating expenses
on the statements of operations.
2 Fund Name Change
-----------------------------------------------------------------------------
Effective December 2, 1996, the EV Classic Rhode Island Municipals Fund
changed its name to the EV Traditional Rhode Island Municipals Fund. In
addition, the Fund discontinued the payment of sales commissions and
distribution fees to the Principal Underwriter pursuant to a Distribution
Plan (see Note 6). The Fund has adopted a new service plan (see Note 7) which
allows for the continued payment of service fees to the Principal Underwriter
and Authorized Firms. Purchases of Fund shares from December 2, 1996 to
August 31, 1997 were subject to a maximum initial sales charge of 3.75% on
amounts up to $50,000 and at declining rates on purchases in excess of such
amount. Effective September 1, 1997, purchases of Fund shares will be subject
to a maximum initial sales charge of 4.75% on amounts up to $25,000 and at
declining rates on purchases in excess of such amount.
3 Distributions to Shareholders
-----------------------------------------------------------------------------
The net investment income of the Funds is determined daily and substantially
all of the net investment 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,
24
<PAGE>
EV Traditional Municipals Funds as of September 30, 1997
NOTES TO FINANCIAL STATEMENTS CONT'D
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
of the Funds 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 over distributions only for financial statement
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.
4 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 were as follows:
<TABLE>
<CAPTION>
Traditional California Fund
------------------------------------
Year Ended September 30,
------------------------------------
1997 1996
-----------------------------------------------------------------------------
<S> <C> <C>
Sales 198,653 409,986
Issued to shareholders electing to
receive payments of
distributions in Fund shares 17,324 9,874
Redemptions (367,419) (227,619)
-----------------------------------------------------------------------------
Net Increase (Decrease) (151,442) 192,241
-----------------------------------------------------------------------------
<CAPTION>
Traditional Florida Fund
------------------------------------
Year Ended September 30,
------------------------------------
1997 1996
-----------------------------------------------------------------------------
<S> <C> <C>
Sales 1,112,740 172,837
Issued to shareholders electing to
receive payments of
distributions in Fund shares 9,793 6,600
Redemptions (771,824) (101,832)
-----------------------------------------------------------------------------
Net Increase 350,709 77,605
-----------------------------------------------------------------------------
<CAPTION>
Traditional Massachusetts Fund
------------------------------------
Year Ended September 30,
------------------------------------
1997 1996
-----------------------------------------------------------------------------
<S> <C> <C>
Sales 249,382 503,000
Issued to shareholders electing to
receive payments of
distributions in Fund shares 27,256 14,166
Redemptions (436,136) (165,434)
-----------------------------------------------------------------------------
Net Increase (Decrease) (159,498) 351,732
-----------------------------------------------------------------------------
<CAPTION>
Traditional Mississippi Fund
------------------------------------
Year Ended September 30,
------------------------------------
1997 1996
-----------------------------------------------------------------------------
<S> <C> <C>
Sales 15,595 7,403
Issued to shareholders electing to
receive payments of
distributions in Fund shares 3,856 6,342
Redemptions (42,850) (136,136)
-----------------------------------------------------------------------------
Net Decrease (23,399) (122,391)
-----------------------------------------------------------------------------
<CAPTION>
Traditional New York Fund
------------------------------------
Year Ended September 30,
------------------------------------
1997 1996
-----------------------------------------------------------------------------
<S> <C> <C>
Sales 376,473 330,962
Issued to shareholders electing to
receive payments of
distributions in Fund shares 21,180 16,071
Redemptions (261,338) (96,282)
-----------------------------------------------------------------------------
Net Increase 136,315 250,751
-----------------------------------------------------------------------------
<CAPTION>
Traditional Ohio Fund
------------------------------------
Year Ended September 30,
------------------------------------
1997 1996
-----------------------------------------------------------------------------
<S> <C> <C>
Sales 144,545 34,079
Issued to shareholders electing to
receive payments of
distributions in Fund shares 8,771 8,016
Redemptions (35,354) (66,023)
-----------------------------------------------------------------------------
Net Increase (Decrease) 117,962 (23,928)
-----------------------------------------------------------------------------
</TABLE>
25
<PAGE>
EV Traditional Municipals Funds as of September 30, 1997
NOTES TO FINANCIAL STATEMENTS CONT'D
<TABLE>
<CAPTION>
Traditional Rhode Island Fund
------------------------------------
Year Ended September 30,
------------------------------------
1997 1996
-----------------------------------------------------------------------------
<S> <C> <C>
Sales 19,569 27,790
Issued to shareholders electing to
receive payments of
distributions in Fund shares 4,916 7,816
Redemptions (106,365) (102,549)
-----------------------------------------------------------------------------
Net Decrease (81,880) (66,943)
-----------------------------------------------------------------------------
<CAPTION>
Traditional West Virginia Fund
------------------------------------
Year Ended September 30,
------------------------------------
1997 1996
-----------------------------------------------------------------------------
<S> <C> <C>
Sales 19,375 95,496
Issued to shareholders electing to
receive payments of
distributions in Fund shares 6,522 4,528
Redemptions (12,054) (42,695)
-----------------------------------------------------------------------------
Net Increase 13,843 57,329
-----------------------------------------------------------------------------
</TABLE>
5 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 Portfolios' Notes to Financial Statements which are
included elsewhere in this report. To enhance the net income of the Funds for
the year ended September 30, 1997, $26,136, $23,398, $21,238, $17,849,
$25,992, $22,939, $16,436 and $20,344 of expenses relating to the operation
of the Traditional California Fund, Traditional Florida Fund, Traditional
Massachusetts Fund, Traditional Mississippi Fund, Traditional New York Fund,
Traditional Ohio Fund, Traditional Rhode Island Fund and Traditional West
Virginia Fund, respectively, were allocated 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 earned by BMR. Eaton Vance
Distributors, Inc. (EVD), a subsidiary of EVM and the Funds' Principal
Underwriter, received approximately $8,060, as its portion of the sales
charge on sales of Fund shares for the year ended September 30, 1997. Certain
of the officers and Trustees of the Funds and Portfolios are officers and
directors/trustees of EVM and BMR.
6 Distribution Plan
-----------------------------------------------------------------------------
Prior to December 2, 1996, Traditional Rhode Island Fund had adopted a
distribution plan (the Plan) pursuant to Rule 12b-1 under the Investment
Company Act of 1940. The Plan required the Fund to pay EVD amounts equal to
1/365 of 0.75% of the Fund's daily net assets, for providing ongoing
distribution services and facilities to the Fund. The Fund would
automatically discontinue payments to EVD during any period in which there
were no outstanding Uncovered Distribution Charges, which are equivalent to
the sum of (i) 6.25% of the aggregate amount received by the Fund for shares
sold plus (ii) distribution fees calculated by applying the rate of 1% over
the prevailing rate to the outstanding balance of Uncovered Distribution
Charges of EVD, reduced by the aggregate amount of contingent deferred sales
charges and amounts theretofore paid to EVD. The amount payable to EVD with
respect to each day was accrued on such day as a liability of the Fund and,
accordingly, reduced the Fund's net assets. For the period from October 1,
1996 to December 1, 1996, the Fund paid $2,607 to EVD representing 0.75%
(annualized) of average daily net assets.
In addition, the Plan permitted the Fund to make monthly payments of service
fees to EVD, in amounts not exceeding 0.25% of the Fund's average daily net
assets for any fiscal year. The Trustees had initially implemented the Plan
by authorizing the Fund to make monthly service fee payments to the Principal
Underwriter in amounts not expensed to exceed 0.20% of the Fund's average
daily net assets for each fiscal year. For the period from October 1, 1996 to
December 1, 1996, the Fund paid service fees to EVD in the amount of $695.
During the first year after purchase of Fund shares, EVD retained the service
fee as reimbursement for the service fee payments made to the Authorized Firm
at the time of sale. Thereafter, EVD was expected to make monthly service fee
payments to Authorized Firms equal to 0.20% per annum of the Fund's average
daily net assets based on the value of the Fund's shares sold by such
authorizing firm and remaining outstanding for at least one year. Service fee
payments were made for personal services and/or maintenance of shareholder
accounts. Service fees paid to EVD and Authorized Firms were separate and
distinct from the sales
26
<PAGE>
EV Traditional Municipals Funds as of September 30, 1997
NOTES TO FINANCIAL STATEMENTS CONT'D
commissions and distribution fees payable by the Fund to EVD, and as such,
were not subject to automatic discontinuance when there are no outstanding
Uncovered Distribution Charges of EVD.
7 Service Plan
-----------------------------------------------------------------------------
Each Fund has adopted a Service Plan (the Plans) designed to meet the
requirements of the sales charge rule of The National Association of
Securities Dealers Inc. The Plans provide that each Fund may make service fee
payments to the Principal Underwriter, Eaton Vance Distributors, Inc. (EVD),
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
each Fund to make quarterly service fee payments to the Principal Underwriter
and Authorized Firms in amounts not exceeding 0.20% (0.25% for the
Traditional California Fund) 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 year ended September 30, 1997, the Traditional California Fund,
Traditional Florida Fund, Traditional Massachusetts Fund, Traditional
Mississippi Fund, Traditional New York Fund, Traditional Ohio Fund, and
Traditional West Virginia Fund, respectively, paid or accrued service fees of
$6,045, $5,663, $1,355, $1,730, $9,502, $3,656, and $1,226 respectively. For
the period from December 2, 1996 to September 30, 1997, the Traditional Rhode
Island Fund paid service fees of $3,334.
Certain of the officers and Trustees of the Funds are officers or directors
of EVD.
8 Contingent Deferred Sales Charge
-----------------------------------------------------------------------------
For shares of the Traditional Rhode Island Fund purchased between November
30, 1995 and December 1, 1996, a contingent deferred sales charge (CDSC) of
1% is imposed on any redemption of Fund shares made within one year of
purchase. Generally, the CDSC is based upon the lower of the net asset value
at date of redemption or date of purchase. No charge is levied on shares
acquired by reinvestment of dividends or capital gains distributions. No CDSC
is levied on shares which have been sold to EVD or its affiliates or to their
respective employees. CDSC charges are paid to EVD to reduce the amount of
Uncovered Distribution Charges calculated under the Fund's Distribution Plan.
CDSC charges received when no Uncovered Distribution Charges exist will be
credited to the Fund. For the period from October 1, 1996 to September 30,
1997, EVD did not receive any CDSC payments from shareholders of the EV
Traditional Rhode Island Fund.
9 Investment Transactions
-----------------------------------------------------------------------------
Increases and decreases in each Fund's investment in its corresponding
Portfolio for the year ended September 30, 1997 were as follows:
<TABLE>
<CAPTION>
Traditional California Fund
-----------------------------------------------------------------------------
<S> <C>
Increases $ 2,010,313
Decreases 3,970,182
Traditional Florida Fund
-----------------------------------------------------------------------------
Increases $11,716,869
Decreases 8,366,311
Traditional Massachusetts Fund
-----------------------------------------------------------------------------
Increases $ 2,374,966
Decreases 4,287,811
Traditional Mississippi Fund
-----------------------------------------------------------------------------
Increases $ 186,948
Decreases 467,414
Traditional New York Fund
-----------------------------------------------------------------------------
Increases $ 3,962,069
Decreases 2,980,468
Traditional Ohio Fund
-----------------------------------------------------------------------------
Increases $ 1,400,287
Decreases 404,640
Traditional Rhode Island Fund
-----------------------------------------------------------------------------
Increases $ 227,544
Decreases 1,080,010
Traditional West Virginia Fund
-----------------------------------------------------------------------------
Increases $ 203,369
Decreases 149,996
</TABLE>
27
<PAGE>
EV Traditional Municipals Funds as of September 30, 1997
INDEPENDENT AUDITORS' REPORT
To the Trustees and Shareholders
of Eaton Vance Municipals Trust:
We have audited the accompanying statements of assets and liabilities of 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 Rhode Island Municipals Fund and EV Traditional
West Virginia Municipals Fund (the Funds) (certain of the series constituting
Eaton Vance Municipals Trust) as of September 30, 1997, the related statements
of operations for the year then ended, the statements of changes in net assets
for the years ended September 30, 1997 and 1996 and the financial highlights for
each of the years in the four-year period ended September 30, 1997. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of the
aforementioned Funds of Eaton Vance Municipals Trust at September 30, 1997, and
the results of their operations, the changes in their net assets and their
financial highlights for the respective stated periods in conformity with
generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
November 7, 1997
28
<PAGE>
California Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS
Tax-Exempt Investments -- 100.0%
<TABLE>
<CAPTION>
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------------------
Cogeneration -- 7.1%
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NR BBB- $ 4,985 Central Valley Financing
Authority, (Carson Ice),
6.20%, 7/1/20 $ 5,211,917
NR BBB- 10,900 Sacramento Cogeneration
Authority, (Procter & Gamble),
6.50%, 7/1/21 11,747,257
NR BBB- 6,000 Sacramento Power Authority,
Cogeneration Project,
6.00%, 7/1/22 6,235,560
- ---------------------------------------------------------------------------------------
$ 23,194,734
- ---------------------------------------------------------------------------------------
Electric Utilities -- 1.4%
- ---------------------------------------------------------------------------------------
A2 A $ 4,100 California Pollution Control
Financing Authority, (San
Diego Gas & Electric), 5.90%,
6/1/14 $ 4,443,334
- ---------------------------------------------------------------------------------------
$ 4,443,334
- ---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 15.4%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 3,000 City and County of San
Francisco Sewer, (AMBAC)
Variable Rate, 10/1/21/(1)/ $ 3,408,750
Aaa AAA 8,000 County of Sacramento, Single
Family, (AMT) (GNMA),
8.125%, 7/1/16/(2)/ 10,655,040
Aaa AAA 6,000 County of Sacramento, Single
Family, (AMT) (GNMA),
8.25%, 1/1/21 8,238,540
Aaa NR 14,285 County of Sacramento, Single
Family, (AMT) (GNMA),
8.50%, 11/1/16 19,698,730
NR BBB 3,910 Fontana Public Financing
Authority, 7.00%, 9/1/21 4,213,142
Aaa AAA 6,400 Port Oakland, CA,
0.00%, 11/1/05 3,861,056
- ---------------------------------------------------------------------------------------
$ 50,075,258
- ---------------------------------------------------------------------------------------
General Obligations -- 1.8%
- ---------------------------------------------------------------------------------------
Aa3 AA $ 5,000 East Bay Municipal Utilities
District, 5.00%, 4/1/15 $ 4,819,200
NR NR 1,000 Eastern Plumas, CA, Health
Care, (District Hospital),
7.50%, 8/1/07 1,004,470
- ---------------------------------------------------------------------------------------
$ 5,823,670
- ---------------------------------------------------------------------------------------
Hospitals -- 2.6%
- ---------------------------------------------------------------------------------------
NR BBB+ $ 2,700 City of Stockton, Dameron
Hospital Association, 8.30%,
12/1/14 $ 2,773,899
NR BBB- 1,500 City of Woodland, (Woodland
Memorial Hospital),
8.20%, 8/1/15 1,567,785
Ba2 NR 1,000 San Bernadino, CA, San
Bernadino Community Hospital,
7.875%, 12/1/08 1,051,530
Ba2 NR 3,000 San Bernadino, CA, San
Bernadino Community Hospital,
7.875%, 12/1/19 3,154,590
- ---------------------------------------------------------------------------------------
$ 8,547,804
- ---------------------------------------------------------------------------------------
Housing -- 6.8%
- ---------------------------------------------------------------------------------------
Aa AA- $ 2,730 California Housing Finance
Agency, 7.375%, 8/1/11 $ 2,842,039
Aa AA- 3,665 California Housing Finance
Agency, 7.40%, 8/1/26 3,985,614
Aa AA- 3,610 California Housing Finance
Agency, 7.50%, 8/1/25 3,938,654
Aa AA- 5,630 California Housing Finance
Agency, 7.65%, 8/1/23 5,859,591
Aa AA- 1,220 California Housing Finance
Agency, 8.60%, 8/1/19 1,263,444
NR A+ 1,585 City of Oakland, Housing
Finance Agency, 7.10%, 1/1/10 1,671,208
NR NR 2,000 Los Angeles County Housing
Authority, CA, Multifamily
Housing, Corporate Fund for
Housing Projects, 10.50%,
12/1/29 1,810,640
A1 NR 770 Los Angeles County, Single
Family, 7.875%, 8/1/16 820,959
- ---------------------------------------------------------------------------------------
$ 22,192,149
- ---------------------------------------------------------------------------------------
Industrial Development Revenue / Pollution
Control Revenue -- 3.6%
- ---------------------------------------------------------------------------------------
A3 A $ 5,000 California Pollution Control
Financing Authority, (Browning
Ferris Industries, Inc.),
Series A, 5.80%, 12/1/16 $ 5,100,500
</TABLE>
See notes to financial statements
29
<PAGE>
California Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- -------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Industrial Development Revenue /
Pollution Control Revenue (continued)
- -------------------------------------------------------------------------------------------
NR NR $ 3,000 California Pollution Control,
(Laidlaw Environmental),
(AMT), 6.70%, 7/1/07 $ 3,077,940
Baa3 BB+ 3,600 California Statewide Community
Development Authority, (United
Airlines), (AMT),
5.70%, 10/1/33 3,573,828
- -------------------------------------------------------------------------------------------
$ 11,752,268
- -------------------------------------------------------------------------------------------
Insured-Education -- 0.9%
- -------------------------------------------------------------------------------------------
Aaa AAA $ 3,330 University of California,
Multiple Purpose Project,
(MBIA), 4.75%, 9/1/21 $ 3,020,343
- -------------------------------------------------------------------------------------------
$ 3,020,343
- -------------------------------------------------------------------------------------------
Insured-Electric Utilities -- 6.4%
- -------------------------------------------------------------------------------------------
Aaa AAA $ 8,000 Northern California Power
Agency (MBIA) Variable Rate,
8/1/25/(1)/ $ 9,520,000
Aaa AAA 2,000 Southern California Public
Power Authority, (FGIC)
Variable Rate, 7/1/12/(1)/ 2,072,500
Aaa AAA 7,070 Southern California Public
Power Authority, (MBIA),
0.00%, 7/1/15 2,769,248
Aaa AAA 6,915 Southern California Public
Power Authority, (MBIA),
5.00%, 1/1/20 6,584,463
- -------------------------------------------------------------------------------------------
$ 20,946,211
- -------------------------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of Participation -- 5.9%
- -------------------------------------------------------------------------------------------
Aaa AAA $ 3,300 California Statewide Community
Development Authority,
(AMBAC), 5.68%, 1/1/24 $ 3,213,507
Aaa AAA 4,350 City of Stockton, Wastewater
Treatment Plant, (FGIC),
6.80%, 9/1/24 4,908,540
Aaa AAA 7,700 Moulton Niguel Water District
(AMBAC), 4.80%, 9/1/17 7,117,110
Aaa AAA 13,985 Visalia Unified School
District, (MBIA), 0.00%,
12/1/17 3,869,090
- -------------------------------------------------------------------------------------------
$ 19,108,247
- -------------------------------------------------------------------------------------------
Insured-Solid Waste -- 0.5%
- -------------------------------------------------------------------------------------------
Aaa AAA $ 1,500 Inland Empire Solid Waste
Finance Authority, (FSA),
6.25%, 8/1/11 $ 1,673,565
- -------------------------------------------------------------------------------------------
$ 1,673,565
- -------------------------------------------------------------------------------------------
Insured-Special Tax Revenue -- 1.3%
- -------------------------------------------------------------------------------------------
Aaa AAA $ 4,850 City of San Jose Redevelopment
Agency, (MBIA), 4.75%, 8/1/24 $ 4,373,876
- -------------------------------------------------------------------------------------------
$ 4,373,876
- -------------------------------------------------------------------------------------------
Insured-Transportation -- 2.9%
- -------------------------------------------------------------------------------------------
Aaa AAA $ 4,000 City and County of San
Francisco Airport, (MBIA),
6.75%, 5/1/13 $ 4,483,360
Aaa AAA 3,125 Port Oakland, CA, (MBIA),
5.375%, 11/1/25 3,043,156
Aaa AAA 7,800 San Joaquin Hills, CA,
Transportation Corridor
Agency, (MBIA), 0.00%, 1/15/24 1,846,494
- -------------------------------------------------------------------------------------------
$ 9,373,010
- -------------------------------------------------------------------------------------------
Insured-Water and Sewer -- 4.7%
- -------------------------------------------------------------------------------------------
Aaa AAA $ 5,000 East Bay Municipal Utilities
District, (MBIA) Variable
Rate, 6/1/08/(1)/ $ 5,256,250
Aaa AAA 5,000 East Bay, CA, Municipal
Utility District, (FGIC),
5.00%, 6/1/26 4,751,550
Aaa AAA 2,000 Metropolitan Water District,
Southern California
Waterworks, (MBIA), 5.00%,
7/1/27 1,901,900
Aaa AAA 3,000 San Diego County Water
Authority, (FGIC) Variable
Rate, 4/22/09/(1)/ 3,461,250
- -------------------------------------------------------------------------------------------
$ 15,370,950
- -------------------------------------------------------------------------------------------
Lease Revenue /
Certificates of Participation -- 18.0%
- -------------------------------------------------------------------------------------------
A1 A $ 6,500 California Public Works,
(University of California),
5.00%, 6/1/23 $ 6,106,360
</TABLE>
See notes to financial statements
30
<PAGE>
California Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lease Revenue /
Certificates of Participation (continued)
- -------------------------------------------------------------------------------------------
A1 A $ 5,000 California Public Works,
(University of California),
5.25%, 6/1/20 $ 4,940,850
A1 A 8,000 California Public Works,
(University of California),
5.50%, 6/1/14 8,314,640
Aaa AAA 6,850 California Statewide Public
Works, (J. Paul Getty Trust),
5.00%, 10/1/23 6,524,625
A1 A+ 4,000 City of Sacramento Financing
Authority, 5.40%, 11/1/20 4,052,720
NR NR 7,000 County of Los Angeles, (Marina
Del Ray), 6.50%, 7/1/08 7,529,200
Baa1 BBB 5,115 County of Los Angeles, Disney
Parking Project, 0.00%, 3/1/16 1,743,294
Baa1 BBB 1,925 County of Los Angeles, Disney
Parking Project, 0.00%, 3/1/17 613,036
Baa1 BBB 5,000 County of Los Angeles, Disney
Parking Project, 0.00%, 9/1/17 1,546,050
Baa1 BBB 5,370 County of Los Angeles, Disney
Parking Project, 0.00%, 3/1/18 1,612,289
Baa1 BBB 3,100 County of Los Angeles, Disney
Parking Project, 0.00%, 3/1/20 818,307
Baa1 BBB 6,925 County of Los Angeles, Disney
Parking Project, 0.00%, 9/1/20 1,774,531
Baa1 BBB 1,000 County of Los Angeles, Disney
Parking Project, 6.50%, 3/1/23 1,043,500
Baa3 BBB- 2,750 Inglewood, CA, 7.00%, 8/1/19 2,962,053
A1 A+ 8,000 Pasadena Parking Facility
Project, 6.25%, 1/1/18 8,925,440
- -------------------------------------------------------------------------------------------
$ 58,506,895
- -------------------------------------------------------------------------------------------
Nursing Homes -- 1.0%
- -------------------------------------------------------------------------------------------
NR NR $ 3,105 Banning, CA, 9.50%, 12/1/11 $ 3,185,326
- -------------------------------------------------------------------------------------------
$ 3,185,326
- -------------------------------------------------------------------------------------------
Special Tax Revenue -- 9.8%
- -------------------------------------------------------------------------------------------
NR NR $ 2,880 City of Commerce, Joint Power
Financing Authority,
8.00%, 3/1/22 $ 3,109,968
NR NR 1,960 City of Fairfield, North
Cordelia District, 7.375%,
9/2/18 2,028,502
NR NR 830 City of Fairfield, North
Cordelia District, 8.00%,
9/2/11 861,424
NR BBB 600 City of Rancho Mirage, Joint
Power Financing Authority,
7.50%, 4/1/17 655,314
NR NR 1,400 City of Simi Valley Community
Development, Sycamore Plaza
II, 8.20%, 9/1/12 1,411,886
NR BBB 5,000 Contra Costa County, Public
Financing Authority,
7.10%, 8/1/22 5,461,150
NR BBB+ 8,220 Fontana Redevelopment Agency,
Jurupa Hills, 7.00%, 10/1/14 8,961,197
NR NR 3,000 Riverside County Community
Facilities District, 7.55%,
9/1/17 3,179,730
NR BBB 2,500 Riverside County Redevelopment
Agency, 7.50%, 10/1/26 2,859,850
Baa BBB+ 3,000 Westminster Redevelopment
Agency, Community
Redevelopment Project,
7.30%, 8/1/21 3,271,020
- -------------------------------------------------------------------------------------------
$ 31,800,041
- -------------------------------------------------------------------------------------------
Transportation -- 8.6%
- -------------------------------------------------------------------------------------------
NR BBB $ 3,050 Guam Airport Authority, (AMT),
6.70%, 10/1/23 $ 3,306,749
Aa3 AA- 2,000 Long Beach, CA (AMT),
7.25%, 5/15/19 2,078,880
Baa3 NR 35,975 San Joaquin Hills
Transportation Corridor
Agency, Toll Road Revenue
Bonds, 0.00%, 1/1/27 7,494,312
Baa3 NR 4,940 San Joaquin Hills
Transportation Corridor
Agency, Toll Road Revenue
Bonds, 7.00%, 1/1/30 5,531,516
Baa3 NR 12,000 San Joaquin Hills, CA,
Transportation Corridor
Agency, Toll Road Revenue
Bonds, 0.00%, 1/1/14 5,181,120
Baa3 NR 5,765 San Joaquin Hills, CA,
Transportation Corridor
Agency, Toll Road Revenue
Bonds, 0.00%, 1/1/26 1,267,147
Baa2 NR 1,500 Stockton Port District,
7.95%, 1/1/05 1,545,255
Baa2 NR 1,500 Stockton Port District,
8.10%, 1/1/14 1,545,810
- -------------------------------------------------------------------------------------------
$ 27,950,789
- -------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
31
<PAGE>
California Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- --------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Water and Sewer -- 1.3%
- ---------------------------------------------------------------------------------------
Aa AA $ 4,425 Orange County Water District,
5.00%, 8/15/18 $ 4,194,104
- ---------------------------------------------------------------------------------------
$ 4,194,104
- ---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $288,296,835) $ 325,532,574
- ---------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by California
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 September 30, 1997, 23.7% of 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 0.5% to 14.3% of total investments.
/(1)/ Security has been issued as an inverse floater bond.
/(2)/ Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
See notes to financial statements
32
<PAGE>
Florida Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS
Tax-Exempt Investments -- 100.0%
<TABLE>
<CAPTION>
Ratings (Unaudited)
- --------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cogeneration -- 1.4%
- ------------------------------------------------------------------------------------
NR NR $ 3,100 Palm Beach County, FL,
Okeelanta Power L.P. (AMT),
6.85%, 2/15/21 $ 1,550,000
NR NR 11,000 Palm Beach County, FL, Osceola
Power (AMT), 6.95%, 1/1/22 5,390,000
- ------------------------------------------------------------------------------------
$ 6,940,000
- ------------------------------------------------------------------------------------
Education -- 1.2%
- ------------------------------------------------------------------------------------
NR AAA $ 5,500 Volusia County Educational
Facilities, (Embry-Riddle
Aeronautical University)
(CLEE), 6.625%, 10/15/22 $ 6,047,855
- ------------------------------------------------------------------------------------
$ 6,047,855
- ------------------------------------------------------------------------------------
Electric Utilities -- 7.4%
- ------------------------------------------------------------------------------------
Aa1 AA $ 14,000 Jacksonville Electric
Authority, Bulk Power Supply
System Scherer 4, 5.25%,
10/1/21 $ 13,645,799
Aa1 AA 2,850 Orlando Utilities Commission
Water and Electric, 5.125%,
10/1/19 2,753,357
Aa AA- 10,000 Orlando Utilities Commission
Water and Electric, 5.60%,
10/6/17 10,064,000
Baa1 BBB+ 5,000 Puerto Rico Electric Power
Authority, 6.25%, 7/1/17 5,322,500
Baa1 BBB+ 185 Puerto Rico Electric Power
Authority, 7.125%, 7/1/14 197,560
Aa3 AA- 2,515 St. Lucie County Solid Waste
Disposal, (Florida Power &
Light Co.) (AMT), 6.70%, 5/1/27 2,716,955
NR NR 1,925 Virgin Islands Water and Sewer
Authority, 7.40%, 7/1/11 2,081,406
- ------------------------------------------------------------------------------------
$ 36,781,577
- ------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 8.7%
- ------------------------------------------------------------------------------------
Aaa AAA $ 9,225 Dade County, (Baptist Hospital
of Miami), 5.75%, 5/1/21 $ 9,595,661
NR NR 1,675 Florida Mid-Bay Bridge
Authority, 6.875%, 10/1/22 1,983,083
Aaa AAA 5,000 Florida Municipal Power Agency
Stanton II (AMBAC) Variable
Rate, 10/1/20/(1)/ 6,112,500
A3 A 7,255 Hillsborough Capital
Improvement - Museum of
Science, 6.45%, 1/1/22 7,754,217
NR AAA 15,135 Illinois Development Finance
Authority, (Regency Park at
Lincolnwood), 0.00%, 7/15/25 3,131,583
Aaa AAA 2,000 Orlando and Orange County,
Expressway Authority (FGIC),
8.25%, 7/1/14 2,726,360
Aaa NR 20,755 Savannah, GA, Economic
Development Authority,
0.00%, 12/1/21 5,411,244
Aaa AAA 5,600 St. Lucie Utility System,
6.00%, 10/1/20 6,027,224
- ------------------------------------------------------------------------------------
$ 42,741,872
- ------------------------------------------------------------------------------------
General Obligations -- 13.0%
- ------------------------------------------------------------------------------------
Aa2 AA+ $ 32,000 Florida Board of Education,
4.75%, 6/1/22 $ 29,180,479
Aa2 AA+ 15,235 Florida Board of Education,
5.00%, 6/1/20 14,519,106
Aa2 AA+ 8,000 Florida Board of General
Services, 6.60%, 7/1/17 8,868,000
NR BBB 5,700 Government of Guam,
5.40%, 11/15/18 5,594,037
Baa1 A 3,000 Puerto Rico Commonwealth,
6.50%, 7/1/23 3,312,600
Baa1 A 2,500 Puerto Rico Public Building
Authority, 6.00%, 7/1/12 2,538,300
- ------------------------------------------------------------------------------------
$ 64,012,522
- ------------------------------------------------------------------------------------
Hospitals -- 1.8%
- ------------------------------------------------------------------------------------
NR BBB+ $ 3,600 Escambia County, Health
Facilities Authority (Baptist
Hospital, Inc. and The Baptist
Manor, Inc.), 6.75%, 10/1/14 $ 3,870,036
NR AA+ 4,750 Jacksonville Health Facilities
Finance Authority, St. Luke's
Hospital Association,
6.75%, 11/15/13 5,189,375
- ------------------------------------------------------------------------------------
$ 9,059,411
- ------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
33
<PAGE>
Florida Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Housing -- 11.7%
- ------------------------------------------------------------------------------------
Aaa NR $ 2,000 Broward County, FL, Housing
Finance Authority, SFMR,
(AMT), (GNMA/FNMA),
6.10%, 10/1/19 $ 2,087,420
NR AAA 610 Broward County, Housing
Finance Authority, Single
Family, (GNMA) (AMT), 7.35%,
3/1/23 646,795
Aaa NR 2,005 Clay County, FL, Health
Facilities Authority, Single
Family (GNMA), (AMT), 6.55%,
3/1/28 2,118,804
NR AAA 1,300 Clay County, Health Facilities
Authority, Multifamily (GNMA),
7.40%, 12/1/25 1,374,776
Aaa NR 1,015 Dade County, Health Facilities
Authority, Single Family
(AMT), 7.75%, 9/1/22 1,071,942
Aaa NR 290 Dade County, Health Facilities
Authority, Single Family
(GNMA), 7.10%, 9/1/13 305,924
NR AAA 5,850 Dade County, Health Facilities
Authority, Single Family
(GNMA), (AMT), 6.70%, 10/1/28 6,204,218
Aaa NR 1,160 Dade County, Health Facilities
Authority, Single Family
(GNMA), (AMT), 7.25%, 9/1/19 1,224,948
Aaa NR 2,500 Escambia County, FL, Housing
Finance Authority, SF, (AMT),
5.80%, 10/1/19 2,524,300
Aaa AAA 4,535 Escambia County, Health
Facilities Authority, Single
Family (GNMA), (AMT), 6.85%,
10/1/17 4,801,023
Aaa AAA 1,640 Escambia County, Health
Facilities Authority, Single
Family (GNMA), (AMT), 6.90%,
10/1/21 1,755,538
Aaa AAA 1,920 Escambia County, Health
Facilities Authority, Single
Family (GNMA), (AMT), 6.95%,
10/1/27 2,056,397
Aaa NR 2,540 Escambia County, Health
Facilities Authority, Single
Family (GNMA), (AMT), 7.40%,
10/1/23 2,685,542
NR AAA 1,125 Florida Health Facilities
Authority, 6.35%, 6/1/14 1,180,485
Aa3 AA 2,500 Florida Health Facilities
Authority (AMT), 6.35%, 7/1/28 2,631,225
Aaa NR 800 Hillsborough County, Health
Facilities Authority, Single
Family (GNMA), (AMT),
7.875%, 5/1/23 849,224
NR NR 3,405 North Miami, FL, Health Care
Facilities (The Imperial
Club), 9.25%, 1/1/13 3,867,331
NR AAA 6,205 Orange County, Health
Facilities Authority, Single
Family (GNMA), (AMT), 6.60%,
4/1/28 6,559,119
NR AAA 7,295 Orange County, Health
Facilities Authority, Single
Family (GNMA), (AMT), 6.85%,
10/1/27 7,595,408
NR AAA 1,695 Orange County, Health
Facilities Authority, Single
Family (GNMA), (AMT), 7.375%,
9/1/24 1,801,005
Aaa NR 845 Palm Beach County, Health
Facilities Authority, Single
Family (GNMA), 7.60%, 3/1/23 898,700
Aaa NR 1,455 Polk County, Health Facilities
Authority, Single Family
(GNMA), 7.15%, 9/1/23 1,535,723
Baa BBB 1,400 Puerto Rico Commonwealth Urban
Renewal and Housing Corp.,
7.875%, 10/1/04 1,507,996
Aaa AAA 635 Puerto Rico Housing Financial
Corp. Single Family (GNMA),
7.65%, 10/15/22 672,509
- ------------------------------------------------------------------------------------
$ 57,956,352
- ------------------------------------------------------------------------------------
Industrial Development Revenue / Pollution
Control Revenue -- 2.1%
- ------------------------------------------------------------------------------------
NR NR $ 5,000 Osceola County, IDA, Community
Pooled Loan-93, 7.75%, 7/1/17 $ 5,289,800
Baa3 BBB- 4,500 Puerto Rico Port Authority
(American Airlines) (AMT),
6.25%, 6/1/26 4,816,170
- ------------------------------------------------------------------------------------
$ 10,105,970
- ------------------------------------------------------------------------------------
Insured-Electric Utilities -- 2.7%
- ------------------------------------------------------------------------------------
Aaa AAA $ 2,200 Commonwealth of Puerto Rico
Electric Power Authority
STRIPES (FSA), Variable Rate,
7/1/03/(1)/ $ 2,491,500
Aaa AAA 3,925 Commonwealth of Puerto Rico,
Electric Power Authority,
(MBIA), 0.00%, 7/1/17 1,441,496
Aaa AAA 1,540 Manatee County, Public Utility
(FGIC), 0.00%, 10/1/12 712,912
</TABLE>
See notes to financial statements
34
<PAGE>
Florida Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Electric Utilities (continued)
- ------------------------------------------------------------------------------------
Aaa AAA $ 6,500 Port Saint Lucie, FL, (MBIA),
5.00%, 9/1/17 $ 6,284,850
Aaa AAA 2,200 Puerto Rico Electric Power
Authority, (FSA) Variable
Rate, 7/1/02/(1)/ 2,436,500
- ------------------------------------------------------------------------------------
$ 13,367,258
- ------------------------------------------------------------------------------------
Insured-General Obligations -- 1.4%
- ------------------------------------------------------------------------------------
Aaa NR $ 7,000 Massachusetts State Turnpike
Authority, (FGIC),
5.125%, 1/1/23 $ 6,981,730
- ------------------------------------------------------------------------------------
$ 6,981,730
- ------------------------------------------------------------------------------------
Insured-Hospitals -- 7.6%
- ------------------------------------------------------------------------------------
Aaa AAA $ 8,000 Charlotte County, Health Care,
Bon-Secours Health System
(FSA) Variable Rate, 8/26/27/(1)/ $ 8,780,000
Aaa AAA 23,355 Jacksonville Health Authority,
Daughters of Charity (MBIA),
5.00%, 11/15/15 22,702,694
Aaa AAA 2,000 Lee County, (Memorial
Hospital) (MBIA) Variable
Rate, 4/1/20/(1)/ 2,387,500
Aaa AAA 3,000 Orange County, Health
Facilities Authority (MBIA)
Variable Rate, 10/29/21/(1)/ 3,607,500
- ------------------------------------------------------------------------------------
$ 37,477,694
- ------------------------------------------------------------------------------------
Insured-Housing -- 3.9%
- ------------------------------------------------------------------------------------
Aaa AAA $ 970 Brevard County, Housing
Finance Authority, Single
Family (FSA), 7.00%, 3/1/13 $ 1,029,587
Aaa AAA 1,720 Duval County, Health
Facilities Authority, Single
Family (FGIC), 7.35%, 7/1/24 1,836,908
Aaa AAA 6,530 Florida Health Facilities
Authority, (Maitland Club
Apartments), (AMBAC), (AMT),
6.875%, 8/1/26 7,054,228
Aaa AAA 3,000 Florida Health Facilities
Authority, Brittany of
Rosemont (AMBAC) (AMT),
6.875%, 8/1/26 3,240,840
Aaa AAA 3,000 Florida HFA, (MBIA), (AMT),
5.90%, 7/1/29 3,058,290
Aaa AAA $ 2,675 Lee County, SCA Multifamily
(FSA) (AMT), 7.05%, 1/1/30 $ 2,894,698
- ------------------------------------------------------------------------------------
$ 19,114,551
- ------------------------------------------------------------------------------------
Insured-Life Care -- 0.1%
- ------------------------------------------------------------------------------------
Aaa AAA $ 500 Alachua County Health
Facility, Mental Health
Services (CGIC), 7.75%, 7/1/10 $ 552,905
- ------------------------------------------------------------------------------------
$ 552,905
- ------------------------------------------------------------------------------------
Insured-Miscellaneous -- 0.6%
- ------------------------------------------------------------------------------------
Aaa AAA $ 2,000 Escambia County (MBIA),
7.20%, 1/1/15 $ 2,110,780
Aaa AAA 799 Osceola County, Industrial
Development Authority,
Community Provider Pooled Loan
Program (CGIC), 7.75%, 7/1/10 859,133
- ------------------------------------------------------------------------------------
$ 2,969,913
- ------------------------------------------------------------------------------------
Insured-Solid Waste -- 0.3%
- ------------------------------------------------------------------------------------
AAA AAA $ 1,500 St. John's County Solid Waste
Disposal (FGIC),
7.25%, 11/1/10 $ 1,645,650
- ------------------------------------------------------------------------------------
$ 1,645,650
- ------------------------------------------------------------------------------------
Insured-Special Tax Revenue -- 8.1%
- ------------------------------------------------------------------------------------
Aaa AAA $ 1,000 City of Jacksonville (FGIC)
(AMT), 0.00%, 10/1/10 $ 514,290
Aaa AAA 1,000 City of Jacksonville (FGIC)
(AMT), 0.00%, 10/1/11 484,000
Aaa AAA 2,000 City of Jacksonville (FGIC)
(AMT), 0.00%, 10/1/12 912,420
Aaa AAA 1,185 City of Opa-Locka (FGIC),
7.00%, 1/1/14 1,346,030
Aaa AAA 1,160 Dade County, FL, Professional
Sports Franchise, (MBIA),
0.00%, 10/1/19 356,097
Aaa AAA 3,835 Dade, Professional Sports
Franchise (MBIA), 0.00%,
10/1/23 937,888
Aaa AAA 4,250 Lakeland, FL, Capital
Improvement Revenue, (MBIA),
5.00%, 10/1/17 4,134,783
</TABLE>
See notes to financial statements
35
<PAGE>
Florida Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Special Tax Revenue (continued)
- ------------------------------------------------------------------------------------
Aaa AAA $ 1,840 St. Petersburg, FL, Excise Tax
Revenue, (FGIC),
5.00%, 10/1/16 $ 1,807,892
Aaa AAA 3,160 St. Petersburg, FL, Excise Tax
Revenue, (FGIC),
5.00%, 10/1/16 3,047,314
Aaa AAA 2,000 Sunrise Public Facilities
(MBIA), 0.00%, 10/1/10 1,041,700
Aaa AAA 1,760 Sunrise Public Facilities
(MBIA), 0.00%, 10/1/12 814,757
Aaa AAA 2,840 Sunrise Public Facilities
(MBIA), 0.00%, 10/1/14 1,166,956
Aaa AAA 4,140 Sunrise Public Facilities
(MBIA), 0.00%, 10/1/16 1,512,425
Aaa AAA 2,525 Sunrise Public Facilities
(MBIA), 0.00%, 10/1/17 874,812
Aaa AAA 4,000 Sunrise, FL, Public Facilities
Revenue, (MBIA),
0.00%, 10/1/15 1,554,360
Aaa AAA 2,770 Tampa, FL, Sports Authority
Revenue, (MBIA),
5.25%, 1/1/17 2,766,427
Aaa AAA 11,500 Tampa, FL, Sports Authority
Revenue, (MBIA),
5.25%, 1/1/17 11,485,164
Aaa AAA 2,000 Tampa, FL, Utility Tax
Revenue, (AMBAC), 0.00%,
10/1/18 650,480
Aaa AAA 6,800 Tampa, FL, Utility Tax
Revenue, (AMBAC), 0.00%, 4/1/19 2,144,244
Aaa AAA 5,000 Tampa, FL, Utility Tax
Revenue, (AMBAC), 0.00%,
10/1/19 1,534,900
Aaa AAA 4,000 Tampa, FL, Utility Tax
Revenue, (AMBAC), 0.00%,
10/1/20 1,155,960
- ------------------------------------------------------------------------------------
$ 40,242,899
- ------------------------------------------------------------------------------------
Insured-Transportation -- 9.0%
- ------------------------------------------------------------------------------------
Aaa AAA $ 3,475 Dade County Aviation
Facilities (MBIA) (AMT),
6.00%, 10/1/24 $ 3,607,293
Aaa AAA 4,000 Dade County Aviation
Facilities (MBIA) (AMT),
6.55%, 10/1/13 4,355,280
Aaa AAA 4,150 Dade County Aviation
Facilities (MBIA) (AMT),
6.60%, 10/1/22 4,518,064
Aaa AAA 1,710 Dade County Seaport, (MBIA),
5.125%, 10/1/26 1,658,529
Aaa AAA 8,455 Florida State Turnpike
Authority (FGIC), 6.35%, 7/1/22 9,110,093
Aaa AAA $ 8,650 Greater Orlando, FL, Aviation
Authority, (FGIC) (AMT),
6.375%, 10/1/21 $ 9,313,801
Aaa AAA 9,100 Massachusetts State Turnpike
Authority (MBIA),
5.00%, 1/1/20 8,907,899
Aaa AAA 2,910 State of Florida, Department
of Transportation, (Right of
Way), (FGIC), 5.00%, 7/1/21 2,792,582
- ------------------------------------------------------------------------------------
$ 44,263,541
- ------------------------------------------------------------------------------------
Insured-Water and Sewer -- 4.1%
- ------------------------------------------------------------------------------------
Aaa AAA $ 2,500 Broward County, (AMBAC),
5.125%, 10/1/15 $ 2,469,050
Aaa AAA 2,000 City of Fort Myers Utility
(FGIC), 5.00%, 10/1/16 1,928,680
Aaa AAA 12,005 Dade County, FL, Water and
Sewer System, (FGIC),
5.50%, 10/1/25 12,069,226
Aaa AAA 4,155 Sanford, FL, Water and Sewer
Revenue, (AMBAC),
4.50%, 10/1/21 3,635,002
- ------------------------------------------------------------------------------------
$ 20,101,958
- ------------------------------------------------------------------------------------
Life Care -- 1.5%
- ------------------------------------------------------------------------------------
NR NR $ 6,895 Atlantic Beach, Fixed Rate
Improvement, (Fleet Landing
Project), 8.00%, 10/1/24 $ 7,489,142
- ------------------------------------------------------------------------------------
$ 7,489,142
- ------------------------------------------------------------------------------------
Nursing Homes -- 5.3%
- ------------------------------------------------------------------------------------
NR NR $ 300 Broward County, Industrial
Development Authority (Beverly
Enterprises - Florida, Inc.),
9.80%, 11/1/10 $ 338,181
NR NR 430 Charlotte County, Industrial
Development Authority (Beverly
Enterprises), 10.00%, 6/1/11 491,499
NR NR 6,520 Citrus County, Industrial
Development Authority (Beverly
Enterprises), 7.25%, 4/1/03 6,662,723
</TABLE>
See notes to financial statements
36
<PAGE>
Florida Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- --------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Nursing Homes (continued)
- -------------------------------------------------------------------------------------
NR AAA $ 4,285 Dade County, Industrial
Development Authority - Club
Care Center (GNMA),
6.60%, 1/20/18 $ 4,591,206
NR AAA 5,075 Dade County, Industrial
Development Authority -
Gramercy Park Nursing Care
(FHA), 6.60%, 8/1/23 5,492,571
NR NR 1,955 Highlands County, Industrial
Development Authority,
(Beverly Enterprises -
Florida, Inc.), 9.25%, 7/1/07 2,194,233
Baa1 NR 3,750 Jacksonville Health - (Cypress
Village), 7.00%, 12/1/22 4,043,213
NR NR 360 Okaloosa County, FL, (Beverly
Enterprises), 10.75%, 10/1/03 371,974
NR NR 655 Orange County, Industrial
Development Authority,
(Beverly Enterprises), 9.25%,
8/1/10 736,364
NR NR 1,000 Winter Garden, (Beverly
Enterprises), 8.75%, 7/1/12 1,129,110
- -------------------------------------------------------------------------------------
$ 26,051,074
- -------------------------------------------------------------------------------------
Solid Waste -- 0.8%
- -------------------------------------------------------------------------------------
A A- $ 3,605 Broward County, (Waste Energy
Co., L.P. North),
7.95%, 12/1/08 $ 3,929,594
- -------------------------------------------------------------------------------------
$ 3,929,594
- -------------------------------------------------------------------------------------
Special Tax Revenue -- 2.5%
- -------------------------------------------------------------------------------------
A1 AA- $ 3,000 City of Orlando, 6.00%, 10/1/22 $ 3,111,450
Baa1 A 9,250 Commonwealth of Puerto Rico
Highway and Transportation
Authority, 5.00%, 7/1/36 8,636,818
Baa1 A 700 Commonwealth of Puerto Rico
Highway and Transportation
Authority, 5.50%, 7/1/36 704,011
- -------------------------------------------------------------------------------------
$ 12,452,279
- -------------------------------------------------------------------------------------
Transportation -- 4.3%
- -------------------------------------------------------------------------------------
NR NR $ 10,140 Mid-Bay Bridge Authority,
6.125%, 10/1/22 $ 10,426,962
Aa2 AA+ 10,800 State of Florida, Jacksonville
Transportation, 5.25%, 7/1/22 10,622,772
- -------------------------------------------------------------------------------------
$ 21,049,734
- -------------------------------------------------------------------------------------
Water and Sewer -- 0.5%
- -------------------------------------------------------------------------------------
Baa1 BBB+ $ 2,500 Hillsborough County Utility,
6.625%, 8/1/11 $ 2,687,725
- -------------------------------------------------------------------------------------
$ 2,687,725
- -------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $462,068,417) $ 494,023,206
- -------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The portfolio invests primarily in debt securities issued by Florida
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by the economic developments in a specific industry
or municipality. In order to reduce the risk associated with such economic
developments, at September 30, 1997, 37.4% 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 insured by
financial institutions ranged from 2.3% to 12.7% of total investments.
/(1)/ Security has been issued as an inverse floater bond.
See notes to financial statements
37
<PAGE>
Massachusetts Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS
Tax-Exempt Investments -- 100.0%
<TABLE>
<CAPTION>
Ratings (Unaudited)
- --------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assisted Living -- 0.7%
- ---------------------------------------------------------------------------------------
NR AAA $ 1,500 Massachusetts IFA (Briscoe
House) (FHA), 7.125%, 2/1/36 $ 1,709,655
- ---------------------------------------------------------------------------------------
$ 1,709,655
- ---------------------------------------------------------------------------------------
Education -- 3.6%
- ---------------------------------------------------------------------------------------
Aa1 AA+ $ 1,625 Massachusetts Health and
Educational Facilities
Authority (HEFA) (Amherst
College), 6.80%, 11/1/21 $ 1,770,974
NR AAA 3,400 Massachusetts HEFA (Merrimack
College), 7.125%, 7/1/12 3,853,934
A1 A+ 250 Massachusetts HEFA (Tufts
University), 7.75%, 8/1/13 262,558
Baa3 BBB- 1,250 Massachusetts IFA, (Dana
Hall), 5.90%, 7/1/27 1,274,513
A1 NR 2,000 New England Educational Loan
Marketing Corp., (AMT),
6.90%, 11/1/09 2,216,680
- ---------------------------------------------------------------------------------------
$ 9,378,659
- ---------------------------------------------------------------------------------------
Electric Utilities -- 6.2%
- ---------------------------------------------------------------------------------------
NR BBB $ 1,545 Guam Power Authority,
5.25%, 10/1/23 $ 1,475,475
Baa2 BBB+ 5,060 Massachusetts Municipal
Wholesale Electric Co., 5,412,429
6.625%, 7/1/18
Baa2 BBB+ 3,500 Massachusetts Municipal
Wholesale Electric Co., 6.75%, 3,769,570
7/1/11
Baa1 BBB+ 3,000 Puerto Rico Electric Power
Authority, 0.00%, 7/1/17 1,061,370
Baa1 BBB+ 13,055 Puerto Rico Electric Power
Authority, 0.00%, 7/1/17 4,618,728
- ---------------------------------------------------------------------------------------
$ 16,337,572
- ---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 2.0%
- ---------------------------------------------------------------------------------------
NR AAA $ 11,825 Massachusetts General
Obligations Federal Assisted
Housing, Section 8, 0.00%,
2/1/23 $ 2,432,284
NR NR 2,400 Massachusetts HEFA (Fairview
Care Facilities), 10.25%,
1/1/21 2,894,424
- ---------------------------------------------------------------------------------------
$ 5,326,708
- ---------------------------------------------------------------------------------------
General Obligations -- 4.5%
- ---------------------------------------------------------------------------------------
A1 A+ $ 3,400 Commonwealth of Massachusetts,
5.00%, 1/1/12 $ 3,352,060
NR BBB 200 Government of Guam,
5.375%, 11/15/13 197,126
NR BBB 2,145 Government of Guam,
5.40%, 11/15/18 2,105,124
A1 A+ 3,015 Massachusetts Bay Transit
Authority, (MBTA),
5.50%, 3/1/21 3,020,427
A1 A+ 1,000 Massachusetts Bay Transit
Authority, (MBTA),
5.90%, 3/1/12 1,052,060
Aaa NR 1,700 Town of Nantucket,
6.80%, 12/1/11 1,896,945
A1 A+ 250 University of Massachusetts
Building Authority,
7.20%, 5/1/04 285,083
- ---------------------------------------------------------------------------------------
$ 11,908,825
- ---------------------------------------------------------------------------------------
Hospitals -- 16.4%
- ---------------------------------------------------------------------------------------
A1 A $ 3,000 Massachusetts HEFA (Charlton
Memorial Hospital),
7.25%, 7/1/13 $ 3,285,480
Aa2 AA+ 2,000 Massachusetts HEFA (Daughters
of Charity Health System),
6.10%, 7/1/14 2,119,320
NR A- 1,020 Massachusetts HEFA (Jordan
Hospital), 6.875%, 10/1/15 1,107,842
NR A- 2,870 Massachusetts HEFA (Jordan
Hospital), 6.875%, 10/1/22 3,110,563
Baa3 BB+ 5,500 Massachusetts HEFA
(Milford-Whitinsville
Hospital), 7.75%, 7/15/17 6,014,635
Baa1 BBB+ 2,000 Massachusetts HEFA (New
England Baptist Hospital),
7.35%, 7/1/17 2,162,340
NR BBB- 2,600 Massachusetts HEFA
(North Adams Regional
Hospital), 6.625%, 7/1/18 2,733,406
Baa2 BBB 5,255 Massachusetts HEFA (Sisters of
Providence Health System),
6.50%, 11/15/08 5,538,770
Baa2 BBB 2,085 Massachusetts HEFA (Sisters of
Providence Health System),
6.625%, 11/15/22 2,203,470
A1 AA- 530 Massachusetts HEFA (Spaulding
Rehabilitation Hospital),
7.625%, 7/1/21 552,965
</TABLE>
See notes to financial statements
38
<PAGE>
Massachusetts Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- --------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hospitals (continued)
- ---------------------------------------------------------------------------------------
NR AA $ 1,475 Massachusetts HEFA, (FHA),
(Deutsches Altenheim),
7.70%, 11/1/31 $ 1,594,696
NR NR 8,000 Massachusetts IFA,
0.00%, 8/1/08 4,574,640
NR NR 9,000 Massachusetts IFA (Biomedical
Research Corp.), 0.00%, 8/1/09 4,831,650
NR NR 6,000 Massachusetts IFA (Biomedical
Research Corp.), 0.00%, 8/1/10 3,018,240
- ---------------------------------------------------------------------------------------
$ 42,848,017
- ---------------------------------------------------------------------------------------
Housing -- 10.4%
- ---------------------------------------------------------------------------------------
NR AAA $ 2,750 Framingham Housing Authority,
(GNMA), 6.65%, 2/20/32 $ 2,880,323
A1 A+ 5,000 Massachusetts HFA,
6.375%, 4/1/21 5,244,100
Aa A+ 7,160 Massachusetts HFA, (AMT),
6.60%, 12/1/26 7,562,177
Aa A+ 6,365 Massachusetts HFA, (AMT),
6.60%, 12/1/26 6,722,522
Aa A+ 2,195 Massachusetts HFA, (AMT),
8.10%, 6/1/20 2,258,304
Aa A+ 1,500 Massachusetts HFA, (AMT),
8.10%, 12/1/21 1,548,750
Aaa AAA 1,000 Massachusetts HFA, (FNMA),
6.875%, 11/15/11 1,084,630
- ---------------------------------------------------------------------------------------
$ 27,300,806
- ---------------------------------------------------------------------------------------
Industrial Development Revenue / Pollution
Control Revenue -- 3.6%
- ---------------------------------------------------------------------------------------
NR NR $ 2,075 Massachusetts IFA (Hingham
Water Co.), (AMT),
6.60%, 12/1/15 $ 2,227,865
NR NR 3,000 Massachusetts IFA (Hingham
Water Co.), (AMT),
6.90%, 12/1/29 3,261,060
Baa3 BBB- 3,750 Puerto Rico Port Authority
(American Airlines), (AMT),
6.25%, 6/1/26 4,013,475
- ---------------------------------------------------------------------------------------
$ 9,502,400
- ---------------------------------------------------------------------------------------
Insured-Colleges and Universities -- 0.4%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Massachusetts HEFA, (Berklee
College of Music), (MBIA),
5.10%, 10/1/27 $ 958,540
- ---------------------------------------------------------------------------------------
$ 958,540
- ---------------------------------------------------------------------------------------
Insured-Education -- 1.2%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 1,950 Massachusetts Educational
Finance Authority, (AMBAC),
(AMT), 7.30%, 1/1/12 $ 2,109,647
Aaa AAA 290 Massachusetts Educational
Finance Authority, (MBIA),
(AMT), 7.25%, 1/1/09 312,095
Aaa AAA 400 Massachusetts HEFA (Boston
University) "RIBS",
(MBIA),Variable
Rate, 10/1/31/(1)/ 468,500
Aaa AAA 250 Massachusetts HEFA
(Northeastern University),
(AMBAC), 7.50%, 10/1/08 263,398
- ---------------------------------------------------------------------------------------
$ 3,153,640
- ---------------------------------------------------------------------------------------
Insured-Electric Utilities -- 0.7%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 2,000 Massachusetts Municipal
Wholesale Electric Co.,
(MBIA), 4.75%, 7/1/10 $ 1,940,280
- ---------------------------------------------------------------------------------------
$ 1,940,280
- ---------------------------------------------------------------------------------------
Insured-General Obligations -- 1.4%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 1,795 City of Boston, (FSA),
4.875%, 9/1/09 $ 1,796,687
NR AAA 1,000 Commonwealth of Puerto Rico
"RIBS" (AMBAC), Variable
Rate, 7/1/15/(1)/ 1,090,000
Aaa AAA 600 Town of Tyngsborough, (AMBAC),
6.90%, 5/15/08 669,714
- ---------------------------------------------------------------------------------------
$ 3,556,401
- ---------------------------------------------------------------------------------------
Insured-Hospitals -- 8.5%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 300 Massachusetts HEFA (Berkshire
Health Systems), (MBIA),
7.60%, 10/1/14 $ 316,827
</TABLE>
See notes to financial statements
39
<PAGE>
Massachusetts Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- --------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Hospitals (continued)
- ---------------------------------------------------------------------------------------
Aaa AAA $ 3,750 Massachusetts HEFA (Beth
Israel Hospital), (AMBAC),
(AMT), Variable Rate, 7/1/25/(1)/ $ 4,082,813
Aaa AAA 1,040 Massachusetts HEFA (Beverly
Hospital), (MBIA),
7.30%, 7/1/13 1,111,708
Aaa AAA 1,500 Massachusetts HEFA (Capital
Assist Program), (MBIA),
7.20%, 7/1/09 1,602,240
Aaa AAA 1,885 Massachusetts HEFA (Fallon
Healthcare System), (FSA),
6.75%, 6/1/20/(2)/ 2,078,778
Aaa AAA 2,000 Massachusetts HEFA (St.
Elizabeth Hospital Issue)
"LEVRRS", (FSA), Variable 2,340,000
Rate, 8/12/21/(1)/
Aaa AAA 2,600 Massachusetts HEFA (St. Luke's
Hospital) "Yield Curve Notes",
(MBIA), Variable
Rate, 8/15/13/(1)/ 2,756,000
Aaa AAA 2,600 Massachusetts HEFA (St. Luke's
Hospital) "Yield Curve Notes",
(MBIA), Variable
Rate, 8/15/23/(1)/ 2,700,750
Aaa AAA 3,000 Massachusetts HEFA (The
Medical Center of Central
Massachusetts) (AMBAC),
"CARS", Variable 3,618,750
Rate, 6/23/22/(1)/
Aaa AAA 700 Massachusetts HEFA (University
Hospital), (MBIA),
7.25%, 7/1/19 763,546
Aaa AAA 1,000 Massachusetts HEFA, (Lowell
General Hospital), Series B,
(FSA), 5.25%, 6/1/16 983,570
- ---------------------------------------------------------------------------------------
$ 22,354,982
- ---------------------------------------------------------------------------------------
Insured-Housing -- 0.6%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 1,500 Massachusetts HFA, (AMBAC),
6.45%, 1/1/36 $ 1,586,565
- ---------------------------------------------------------------------------------------
$ 1,586,565
- ---------------------------------------------------------------------------------------
Insured-Life Care -- 0.9%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 2,465 Massachusetts HEFA, (Partners
Healthcare), (MBIA),
5.375%, 7/1/17 $ 2,448,485
- ---------------------------------------------------------------------------------------
$ 2,448,485
- ---------------------------------------------------------------------------------------
Insured-Transportation -- 5.5%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 5,860 Massachusetts Port Authority,
(AMT), (FGIC), 7.50%, 7/1/20 $ 6,397,538
Aaa NR 26,970 Massachusetts Turnpike
Authority, (MBIA), 0.00%, 5,162,867
1/1/28
Aaa NR 2,970 Massachusetts Turnpike
Authority, (MBIA), 5.00%,
1/1/37 2,749,775
- ---------------------------------------------------------------------------------------
$ 14,310,180
- ---------------------------------------------------------------------------------------
Insured-Water and Sewer -- 0.9%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 2,500 Massachusetts Water Resources
Authority, (MBIA),
4.75%, 12/1/21 $ 2,266,275
- ---------------------------------------------------------------------------------------
$ 2,266,275
- ---------------------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 3.8%
- ---------------------------------------------------------------------------------------
NR A- $ 7,800 Plymouth County, MA (Plymouth
County Correctional Facility),
7.00%, 4/1/22 $ 8,733,738
NR BBB 1,200 Puerto Rico Industrial,
Tourist, Educational, Medical
and Environmental Control
Authority (Guaynabo Municipal
Government Center Lease),
5.625%, 7/1/22 1,201,320
- ---------------------------------------------------------------------------------------
$ 9,935,058
- ---------------------------------------------------------------------------------------
Life Care -- 0.8%
- ---------------------------------------------------------------------------------------
NR AAA $ 2,000 Boston, MA, Industrial
Development Financing
Authority, 6.00%, 2/1/37 $ 2,056,140
- ---------------------------------------------------------------------------------------
$ 2,056,140
- ---------------------------------------------------------------------------------------
Nursing Homes -- 1.3%
- ---------------------------------------------------------------------------------------
NR NR $ 3,225 Massachusetts IFA (Age
Institute of Massachusetts),
8.05%, 11/1/25 $ 3,405,439
- ---------------------------------------------------------------------------------------
$ 3,405,439
- ---------------------------------------------------------------------------------------
Solid Waste -- 0.5%
- ---------------------------------------------------------------------------------------
NR NR $ 1,145 City of Pittsfield, Vicon
Recovery Associates, 7.95%, $ 1,193,285
11/1/04
- ---------------------------------------------------------------------------------------
$ 1,193,285
- ---------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
40
<PAGE>
Massachusetts Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- --------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Special Tax Revenue -- 3.5%
- ---------------------------------------------------------------------------------------
Baa1 A $ 3,300 Commonwealth of Puerto Rico
Highway and Transportation
Authority, 5.00%, 7/1/36 $ 3,081,243
Aa3 AA 3,500 State of Massachusetts,
5.00%, 6/1/17 3,372,425
NR NR 2,350 Virgin Islands Public Finance
Authority, 7.25%, 10/1/18 2,624,856
- ---------------------------------------------------------------------------------------
$ 9,078,524
- ---------------------------------------------------------------------------------------
Transportation -- 12.0%
- ---------------------------------------------------------------------------------------
NR BBB $ 5,950 Guam Airport Authority, (AMT),
6.70%, 10/1/23 $ 6,450,871
Aa3 AA- 3,000 Massachusetts Port Authority,
(AMT), 5.375%, 7/1/27 2,915,190
A1 NR 22,535 Massachusetts Turnpike
Authority, 5.00%, 1/1/20 22,059,285
- ---------------------------------------------------------------------------------------
$ 31,425,346
- ---------------------------------------------------------------------------------------
Water and Sewer -- 10.6%
- ---------------------------------------------------------------------------------------
Baa1 BBB $ 12,185 City of Boston (Harbor
Electric Energy Co.), (AMT),
7.375%, 5/15/15 $ 13,281,283
A2 A 7,175 Massachusetts Water Resources
Authority, 5.00%, 3/1/22 6,704,894
A2 A 1,500 Massachusetts Water Resources
Authority, 5.25%, 3/1/13 1,495,230
A2 A 4,165 Massachusetts Water Resources
Authority, 5.25%, 12/1/15 4,174,371
NR NR 2,000 Virgin Islands Water and Power
Authority, 7.60%, 1/1/12 2,238,140
- ---------------------------------------------------------------------------------------
$ 27,893,918
- ---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $238,584,146) $261,875,700
- ---------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The portfolio invests primarily in debt securities issued by Massachusetts
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by the economic developments in a specific industry
or municipality. In order to reduce the risk associated with such economic
developments, at September 30, 1997, 20.1% 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 insured by
financial institutions ranged from 2.4% to 9.8% of total investments.
/(1)/ Security has been issued as an inverse floater bond.
/(2)/ Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
See notes to financial statements
41
<PAGE>
Mississippi Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS
Tax-Exempt Investments -- 100.0%
<TABLE>
<CAPTION>
Ratings (Unaudited)
- --------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Education -- 2.3%
- ---------------------------------------------------------------------------------------
NR A $ 470 University of Mississippi
Educational Building Athletic
Facility, 6.20%, 6/1/16 $ 503,699
- ---------------------------------------------------------------------------------------
$ 503,699
- ---------------------------------------------------------------------------------------
Electric Utilities -- 9.1%
- ---------------------------------------------------------------------------------------
NR BBB $ 810 Guam Power Authority,
6.625%, 10/1/14 $ 878,874
Baa3 NR 1,000 Warren County (Mississippi Power
& Light Co.), 7.00%, 4/1/22 1,099,630
- ---------------------------------------------------------------------------------------
$ 1,978,504
- ---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 5.6%
- ---------------------------------------------------------------------------------------
A NR $ 600 Mississippi Hospital Equipment
and Facilities Authority, (Rankin
Medical Center), 5.60%, 3/1/19 $ 646,158
Aaa NR 1,500 Mississippi Housing Finance
Corp., Single Family, (AMT),
0.00%, 6/1/15 577,560
- ---------------------------------------------------------------------------------------
$ 1,223,718
- ---------------------------------------------------------------------------------------
General Obligations -- 3.6%
- ---------------------------------------------------------------------------------------
Aa3 AA $ 200 State of Mississippi,
5.10%, 11/15/12 $ 203,776
Aa3 NR 500 State of Mississippi,
6.75%, 12/1/14 570,450
- ---------------------------------------------------------------------------------------
$ 774,226
- ---------------------------------------------------------------------------------------
Hospitals -- 2.1%
- ---------------------------------------------------------------------------------------
Baa3 BBB $ 450 Mississippi Hospital Equipment
and Facilities Authority, (Rush
Medical Foundation Project),
6.00%, 1/1/22 $ 450,500
- ---------------------------------------------------------------------------------------
$ 450,500
- ---------------------------------------------------------------------------------------
Housing -- 14.0%
- ---------------------------------------------------------------------------------------
Aa NR $ 500 Hinds County, Woodridge
Apartments, (FHA), 6.25%, 11/1/27 $ 523,490
Aaa NR 500 Mississippi Home Corp., Single
Family, (AMT), (GNMA), 6.625%,
4/1/27 530,560
Aaa NR 415 Mississippi Home Corp., Single
Family, Access Program, (AMT),
(GNMA), 8.10%, 12/1/24 463,480
Aaa NR 870 Mississippi Home Corp., Single
Family, Access Program, (AMT),
(GNMA), 8.125%, 12/1/24 969,650
Aaa NR 500 Mississippi Home Corp., Single
Family, Access Program, (GNMA),
(AMT), 6.00%, 12/1/27 565,535
- ---------------------------------------------------------------------------------------
$ 3,052,715
- ---------------------------------------------------------------------------------------
Industrial Development Revenue / Pollution
Control Revenue -- 13.3%
- ---------------------------------------------------------------------------------------
A2 A $ 1,000 Lowndes County (Weyerhaeuser
Co.), 6.80%, 4/1/22 $ 1,180,610
NR AA- 500 Mississippi Business Finance
Corp., (AMT), 7.15%, 5/1/16/(1)/ 547,950
Baa3 BBB- 490 Puerto Rico Port Authority
(American Airlines), (AMT), 524,427
6.25%, 6/1/26
A3 A- 600 Warren County (International
Paper Co.), (AMT), 6.60%, 3/1/19 653,706
- ---------------------------------------------------------------------------------------
$ 2,906,693
- ---------------------------------------------------------------------------------------
Insured-Education -- 5.1%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Mississippi Educational
Facilities Authority, (Milsaps
College), (MBIA), 6.50%, 11/1/19 $ 1,119,190
- ---------------------------------------------------------------------------------------
$ 1,119,190
- ---------------------------------------------------------------------------------------
Insured-Electric Utilities -- 5.3%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 750 Jackson County, Gautier Utility
District, (MBIA), 6.375%, 3/1/12 $ 813,983
Aaa AAA 300 Puerto Rico, Electric Power
Authority (FSA) Variable Rate,
7/1/03/(2)/ 339,750
- ---------------------------------------------------------------------------------------
$ 1,153,733
- ---------------------------------------------------------------------------------------
Insured-General Obligations -- 7.0%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Desoto County School District,
(MBIA), 4.75%, 2/1/13 $ 953,790
Aaa AAA 500 Hinds County, (MBIA),
6.25%, 3/1/11 566,845
- ---------------------------------------------------------------------------------------
$ 1,520,635
- ---------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
42
<PAGE>
Mississippi Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- --------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Hospitals -- 14.6%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 City of Gulfport (Gulfport
Memorial Hospital), (MBIA), $ 1,066,610
6.20%, 7/1/18
Aaa AAA 1,275 Hinds County (Mississippi
Methodist Hospital), (AMBAC),
5.60%, 5/1/12 1,362,376
Aaa AAA 200 Mississippi Development Bank
(Adams County Hospital), 5.75%,
7/1/16 208,286
Aaa AAA 500 Mississippi Hospital Equipment
and Facilities Authority
(Mississippi Baptist Medical
Center), (MBIA),
6.00%, 5/1/13 533,370
- ---------------------------------------------------------------------------------------
$ 3,170,642
- ---------------------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of
Participation -- 3.6%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 750 Medical Center Building Corp.,
(University of Mississippi
Medical Center), (MBIA), 5.80%,
12/1/14 $ 786,105
- ---------------------------------------------------------------------------------------
$ 786,105
- ---------------------------------------------------------------------------------------
Insured-Water and Sewer -- 2.4%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 500 City of Natchez, Combined Water
and Sewer System, (MBIA),
5.70%, 8/1/17 $ 514,460
- ---------------------------------------------------------------------------------------
$ 514,460
- ---------------------------------------------------------------------------------------
Lease Revenue/Certificates of Participation -- 9.6%
- ---------------------------------------------------------------------------------------
NR A $ 1,000 Mississippi Development Bank,
Golden Triangle Solid Waste,
6.00%, 7/1/15 $ 1,037,500
A2 NR 1,000 Mississippi University
Educational Building Corp.,
Facilities Renovation, 6.15%,
6/15/15 1,058,960
- ---------------------------------------------------------------------------------------
$ 2,096,460
- ---------------------------------------------------------------------------------------
Life Care -- 1.0%
- ---------------------------------------------------------------------------------------
NR NR $ 200 Ridgeland, MS, Urban Renewal, The
Orchard Project Series 1993A,
7.75%, 12/1/15 $ 214,032
- ---------------------------------------------------------------------------------------
$ 214,032
- ---------------------------------------------------------------------------------------
Nursing Homes -- 1.4%
- ---------------------------------------------------------------------------------------
NR NR $ 300 Mississippi Business Finance
Corp. (Magnolia Healthcare),
7.99%, 7/1/25 $ 314,145
- ---------------------------------------------------------------------------------------
$ 314,145
- ---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $19,751,773) $ 21,779,457
- ---------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The portfolio invests primarily in debt securities issued by Mississippi
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by the economic developments in a specific industry
or municipality. In order to reduce the risk associated with such economic
developments, at September 30, 1997, 38.0% 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 insured by
financial institutions ranged from 2.5% to 25.4% of total investments.
/(1)/ Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
/(2)/ Security has been issued as an inverse floater bond.
See notes to financial statements
43
<PAGE>
New York Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS
Tax-Exempt Investments -- 100.0%
<TABLE>
<CAPTION>
Ratings (Unaudited)
- --------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Airlines -- 0.6%
- ---------------------------------------------------------------------------------------
Baa3 BBB- $ 2,800 Port Authority of New York and
New Jersey, (Delta Airlines),
6.95%, 6/1/08 $ 3,053,176
- ---------------------------------------------------------------------------------------
$ 3,053,176
- ---------------------------------------------------------------------------------------
Assisted Living -- 1.2%
- ---------------------------------------------------------------------------------------
NR NR $ 4,000 Glen Cove, IDA, 9.50%, 7/1/12 $ 4,000,000
NR NR 1,970 Village of North Syracuse, NY,
Housing Authority (AJM Senior
Housing, Inc., Janus Park),
8.00%, 6/1/24 2,096,474
- ---------------------------------------------------------------------------------------
$ 6,096,474
- ---------------------------------------------------------------------------------------
Education -- 15.8%
- ---------------------------------------------------------------------------------------
Baa2 NR $ 1,660 City of New Rochelle IDA Civic
Facilities, (College of New
Rochelle), 6.75%, 7/1/22 $ 1,779,155
Aaa AA+ 6,895 Dormitory Authority, (Columbia
University), 4.75%, 7/1/14 6,462,270
NR AA 1,300 Dormitory Authority, (New York
Medical College) (Asset
Guaranty), 6.875%, 7/1/21 1,426,464
A3 A- 9,850 Dormitory Authority, State
University Educational
Facilities, 5.25%, 5/15/15 9,737,809
A3 A- 28,675 Dormitory Authority, State
University Educational
Facilities, 5.25%, 5/15/19 28,056,766
A3 A- 14,680 Dormitory Authority, State
University Educational
Facilities, 5.25%, 5/15/21 14,348,818
A3 A- 9,125 Dormitory Authority, State
University Educational
Facilities, 5.50%, 5/15/13 9,365,535
A3 A- 2,000 Dormitory Authority, State
University Educational
Facilities, 5.50%, 5/15/19 2,025,200
A3 A- 415 Dormitory Authority, State
University Educational
Facilities, 7.375%, 5/15/14 452,342
A3 A- 1,300 Dormitory Authority, State
University Educational
Facilities, 7.50%, 5/15/11 1,573,507
A NR 1,000 Dutchess County IDA, (Bard
College), 7.00%, 11/1/17 1,109,560
A1 NR 6,035 Monroe County IDA, (Wilmur
Assc.), 7.25%, 12/1/16 6,444,897
- ---------------------------------------------------------------------------------------
$ 82,782,323
- ---------------------------------------------------------------------------------------
Electric Utilities -- 3.7%
- ---------------------------------------------------------------------------------------
A1 A+ $ 2,365 New York State Energy Research
and Development Authority,
(Consolidated Edison) (AMT),
7.50%, 7/1/25 $ 2,500,751
A1 A 2,500 New York State Energy Research
and Development Authority,
(Brooklyn Union Gas), (RIBS),
(AMT), Variable Rate, 7/1/26/(1)/ 3,178,125
A1 A+ 1,000 New York State Energy Research
and Development Authority,
(Consolidated Edison) (AMT),
7.50%, 1/1/26 1,069,050
NR NR 5,450 New York State Energy Research
and Development Authority,
(LILCO) "RITES" (AMT),
Variable Rate, 8/1/22/(1)/ 6,267,500
Ba3 BB+ 3,110 New York State Energy Research
and Development Authority,
(LILCO), (AMT), 6.90%, 8/1/22 3,355,130
NR NR 2,885 Virgin Islands Water and Sewer
Authority, 7.40%, 7/1/11 3,119,406
- ---------------------------------------------------------------------------------------
$ 19,489,962
- ---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 9.4%
- ---------------------------------------------------------------------------------------
Aaa BBB+ $ 1,000 Dormitory Authority, (City
University), 7.625%, 7/1/20 $ 1,110,200
Baa1 NR 2,250 Dormitory Authority, (Upstate
Community College),
7.20%, 7/1/21 2,517,480
Baa1 NR 2,000 Dormitory Authority, (Upstate
Community College),
7.30%, 7/1/21 2,244,640
Aaa AAA 500 Erie County Water Authority,
Water Works System, (AMBAC),
6.00%, 12/1/08 544,055
Aaa AAA 500 Metropolitan Transportation
Authority Commuter Facilities
Bonds, 7.50%, 7/1/19 551,250
</TABLE>
See notes to financial statements
44
<PAGE>
New York Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- --------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Escrowed / Prerefunded (continued)
- ---------------------------------------------------------------------------------------
Aaa NR $ 1,300 New York City IDA, (YMCA of
Greater New York),
8.00%, 8/1/16 $ 1,497,652
Aaa BBB+ 1,000 New York State (HFA), Service
Contracts, 7.80%, 9/15/01 1,132,920
Aaa AAA 110 New York State (MCFFA) Mental
Health Services Facilities,
7.75%, 8/15/10 121,186
Aaa AAA 4,090 New York State (MCFFA), Mental
Health Services Facilities,
7.50%, 2/15/21 4,589,962
Aa A 11,050 New York State Environmental
Facilities Corporation (EFC),
State Water Pollution Control,
6.875%, 6/15/10 12,187,487
Aaa AAA 1,775 New York State HFA, Service
Contracts, 7.375%, 9/15/21 2,026,340
Aaa AAA 345 New York State MCFFA, Mental
Health Services Facilities,
7.875%, 8/15/08 386,448
Baa1 A- 1,090 New York State Medical Care
Facilities, 7.625%, 8/15/17 1,239,232
Baa1 BBB+ 4,750 New York State Thruway
Authority, Local Highway and
Bridge Service Contract Bonds,
7.25%, 1/1/10/(2)/ 5,267,988
Baa1 BBB+ 500 New York State UDC, Alfred
Technology, 7.875%, 1/1/20 549,245
Baa1 BBB+ 750 New York State UDC, Clarkson
Center, 7.80%, 1/1/20 844,200
Baa1 BBB+ 750 New York State UDC, Clarkson
Center, 8.00%, 1/1/20 848,715
Aaa NR 5,100 New York State UDC, Correctional
Facilities, 6.50%, 1/1/21 5,467,965
Aaa BBB+ 3,685 New York, NY, 7.50%, 2/1/18 4,205,985
NR AAA 1,760 Puerto Rico Highway and
Transportation Authority - Highway
Revenue, 6.625%, 7/1/18 1,969,739
- ---------------------------------------------------------------------------------------
$ 49,302,689
- ---------------------------------------------------------------------------------------
General Obligations -- 0.8%
- ---------------------------------------------------------------------------------------
Baa1 BBB+ $ 315 New York, NY, 7.50%, 2/1/18 $ 352,806
Aa2 AA 1,700 Onondaga County, NY,
5.875%, 2/15/11 1,862,877
Aa2 AA 1,600 Onondaga County, NY,
5.875%, 2/15/12 1,751,696
- ---------------------------------------------------------------------------------------
$ 3,967,379
- ---------------------------------------------------------------------------------------
Healthcare -- 1.1%
- ---------------------------------------------------------------------------------------
NR NR $ 5,000 New York State Housing Finance
Agency, "RITES", Variable
Rate, 5/1/06/(1)/ $ 5,693,750
- ---------------------------------------------------------------------------------------
$ 5,693,750
- ---------------------------------------------------------------------------------------
Hospitals -- 13.9%
- ---------------------------------------------------------------------------------------
Aa2 AAA $ 1,500 Dormitory Authority, (Long Island
Jewish Medical Center) (FHA),
7.75%, 8/15/27 $ 1,546,140
NR AAA 1,000 Dormitory Authority, (St. Francis
Hospital) (FHA), 7.65%, 8/1/30 1,112,880
Baa1 A- 7,300 Dormitory Authority, Mental Health
Facilities, 5.375%, 2/15/26 7,057,348
NR AAA 6,705 Dormitory Authority, United Health
Services, (FHA), 7.35%, 8/1/29 7,318,977
Aa2 AAA 1,000 New York State MCFFA, Hospital
and Nursing Insured Mortgage
(FHA), 6.55%, 8/15/12 1,079,720
NR AA 9,000 New York State MCFFA, Hospital
and Nursing Insured Mortgage
(FHA), 6.70%, 8/15/23 9,726,390
Aa2 AA 1,050 New York State MCFFA, Hospital
and Nursing Insured Mortgage
(FHA), 6.75%, 2/15/12 1,135,229
Aa2 AA 1,500 New York State MCFFA, Hospital
and Nursing Insured Mortgage
(FHA), 6.95%, 2/15/32 1,636,485
Aa2 AA 2,190 New York State MCFFA, Hospital
and Nursing Insured Mortgage
(FHA), 7.00%, 8/15/32 2,405,693
Aa2 AA 6,600 New York State MCFFA, Hospital
and Nursing Insured Mortgage
(FHA), 7.25%, 2/15/31 7,271,946
Aa2 AA 740 New York State MCFFA, Hospital
and Nursing Insured Mortgage
(FHA), 7.35%, 2/15/29 784,548
Aa2 AA 950 New York State MCFFA, Insured
Mortgage (FHA),
7.45%, 8/15/31 1,044,563
Baa1 A- 460 New York State MCFFA, Mental
Health Services Facilities,
7.50%, 2/15/21 510,494
</TABLE>
See notes to financial statements
45
<PAGE>
New York Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- --------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hospitals (continued)
- ---------------------------------------------------------------------------------------
Baa1 A- $ 35 New York State MCFFA, Mental
Health Services Facilities,
7.75%, 8/15/10 $ 38,237
Baa1 A- 150 New York State MCFFA, Mental
Health Services Facilities,
7.875%, 8/15/08 166,785
Baa BBB+ 5,540 New York State MCFFA, Secured
Hospital, 7.35%, 8/15/11 6,083,529
Baa BBB+ 19,700 New York State MCFFA, Secured
Hospital (Brookdale),
6.80%, 8/15/12 21,548,253
Baa1 A- 490 New York State Medical Care
Facilities, 7.625%, 8/15/17 549,496
Baa1 BBB+ 1,800 Syracuse Industrial Development
Agency (IDA), St. Joseph's Hospital
Health Center, 7.50%, 6/1/18 2,028,510
- ---------------------------------------------------------------------------------------
$ 73,045,223
- ---------------------------------------------------------------------------------------
Housing -- 5.6%
- ---------------------------------------------------------------------------------------
NR NR $ 4,574 New York City HDC, Allerville,
6.50%, 11/15/18 $ 4,637,076
NR NR 2,006 New York City HDC, Dayton,
6.50%, 11/15/18 2,095,308
NR AAA 2,550 New York City HDC, Multi-Unit
Management, 7.35%, 6/1/19 2,720,009
Aa2 AAA 235 New York State Housing Finance
Agency, Baytown,
7.10%, 8/15/35 249,716
Aaa NR 31,145 New York State Mortgage
Agency, 0.00%, 10/1/14 6,300,634
Aa2 NR 500 New York State Mortgage
Agency, 6.65%, 4/1/22 528,565
Aa2 NR 8,750 New York State Mortgage
Agency, 6.90%, 4/1/15 9,453,588
Aa2 NR 1,000 New York State Mortgage
Agency, 7.50%, 4/1/15 1,077,150
Aa2 NR 1,600 New York State Mortgage Agency
(AMT), 7.95%, 10/1/21 1,705,792
Baa BBB 350 Puerto Rico Commonwealth Urban
Renewal and Housing Corp.,
7.875%, 10/1/04 376,999
Aaa AAA 300 Puerto Rico Housing Financial
Corp. Single Family (GNMA),
7.65%, 10/15/22 317,721
- ---------------------------------------------------------------------------------------
$ 29,462,558
- ---------------------------------------------------------------------------------------
Insured-Electric Utilities -- 1.0%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 5,000 Puerto Rico Telephone
Authority (MBIA) Variable
Rate, 1/25/07/(1)/ $ 5,393,750
- ---------------------------------------------------------------------------------------
$ 5,393,750
- ---------------------------------------------------------------------------------------
Insured-General Obligations -- 2.8%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 700 Bethlehem Central School
District (AMBAC), 7.10%, 11/1/08 $ 847,896
Aaa AAA 700 Bethlehem Central School
District (AMBAC), 7.10%, 11/1/09 852,082
Aaa AAA 770 Chautauqua County Unlimited
Tax (FGIC), 6.40%, 9/15/09 887,163
Aaa AAA 1,035 Erie County Water Authority
(AMBAC), 0.00%, 12/1/17 244,508
Aaa AAA 700 Jamestown, (Secondary AMBAC),
7.10%, 3/15/09 846,132
Aaa AAA 700 Jamestown, (Secondary AMBAC),
7.10%, 3/15/10 849,639
Aaa AAA 700 Jamestown, (Secondary AMBAC),
7.10%, 3/15/11 853,552
Aaa AAA 675 Jamestown, (Secondary AMBAC),
7.10%, 3/15/12 826,342
Aaa AAA 675 Jamestown, (Secondary AMBAC),
7.10%, 3/15/13 829,238
Aaa AAA 515 Jamestown, (Secondary AMBAC),
7.10%, 3/15/14 634,341
Aaa AAA 1,930 New York, NY (AMBAC),
7.00%, 8/1/17 2,161,697
Aaa AAA 4,500 Puerto Rico (FSA), Variable
Rate, 7/1/22/(1)/ 4,944,375
- ---------------------------------------------------------------------------------------
$ 14,776,965
- ---------------------------------------------------------------------------------------
Insured-Hospitals -- 1.4%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 1,300 New York State MCFFA, New York
Hospital (FHA) (AMBAC),
6.60%, 2/15/11 $ 1,454,375
Aaa AAA 5,400 New York State MCFFA, New York
Hospital (FHA) (AMBAC),
6.75%, 8/15/14 6,072,948
- ---------------------------------------------------------------------------------------
$ 7,527,323
- ---------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
46
<PAGE>
New York Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- --------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Housing -- 0.1%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 500 New York City HDC, Charter
Oaks (MBIA), 7.375%, 4/1/17 $ 512,585
- ---------------------------------------------------------------------------------------
$ 512,585
- ---------------------------------------------------------------------------------------
Insured-Life Care -- 0.3%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 1,500 New York State MCFFA, Long
Term Health Care (FSA),
6.80%, 11/1/14 $ 1,657,545
- ---------------------------------------------------------------------------------------
$ 1,657,545
- ---------------------------------------------------------------------------------------
Insured-Miscellaneous -- 0.4%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 500 New York City IDA, (USTA National
Tennis Center Inc.) (FSA),
6.375%, 11/15/14 $ 549,685
Aaa AAA 1,600 New York City Trust Cultural
Resources, (American Museum of
Natural History), (MBIA),
5.65%, 4/1/22 1,639,456
- ---------------------------------------------------------------------------------------
$ 2,189,141
- ---------------------------------------------------------------------------------------
Insured-Solid Waste -- 1.8%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 1,650 Dutchess County Resource
Recovery Solid Waste (FGIC),
7.50%, 1/1/09 $ 1,790,547
Aaa AAA 6,795 Islip Resource Recovery Agency
(MBIA), 6.50%, 7/1/09 7,657,286
- ---------------------------------------------------------------------------------------
$ 9,447,833
- ---------------------------------------------------------------------------------------
Insured-Transportation -- 3.8%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 6,000 Metropolitan Transportation
Authority, NY, (MBIA),
5.00%, 7/1/20 $ 5,740,260
Aaa AAA 3,000 Triborough Bridge and Tunnel
Authority of New York, "RITES"
(AMBAC), Variable
Rate, 1/1/12/(1)/ 3,420,000
NR AAA 3,000 Triborough Bridge and Tunnel
Authority, (MBIA), Variable
Rate, 1/1/19/(1)/ 3,180,000
NR NR 7,000 VRDC-IVRC Trust, (NY MTA),
(MBIA), Variable
Rate, 6/26/02/(1)/ 7,551,250
- ---------------------------------------------------------------------------------------
$ 19,891,510
- ---------------------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 13.6%
- ---------------------------------------------------------------------------------------
Baa1 BBB+ $ 8,000 Dormitory Authority, (City
University), 5.625%, 7/1/16 $ 8,267,280
Baa1 BBB+ 250 Dormitory Authority, (City
University), 6.375%, 7/1/08 267,105
Baa1 BBB+ 5,100 Dormitory Authority, (City
University), 7.00%, 7/1/09 5,894,325
Baa1 BBB+ 4,325 Dormitory Authority, (City
University), 7.50%, 7/1/10 5,234,418
Baa1 BBB+ 1,000 Dormitory Authority, City
University, (Cross-over
Refunded '98), 8.125%, 7/1/08 1,047,990
Baa1 BBB 8,500 New York State Dormitory
Authority, (City University),
6.00%, 7/1/20 9,162,660
Baa BBB+ 3,380 New York State HFA Health
Facilities, 6.00%, 5/1/06 3,613,457
NR BBB 5,865 New York State Thruway Authority,
0.00%, 1/1/01 5,053,695
NR BBB 2,350 New York State Thruway Authority,
0.00%, 1/1/03 1,833,611
Baa1 BBB+ 27,940 New York State UDC,
5.70%, 4/1/20 28,987,190
A A 1,825 Syracuse-Hancock International
Airport, 6.625%, 1/1/12 1,943,589
- ---------------------------------------------------------------------------------------
$ 71,305,320
- ---------------------------------------------------------------------------------------
Miscellaneous -- 0.5%
- ---------------------------------------------------------------------------------------
Aa2 AA $ 635 City of New York Municipal
Assistance Corp.,
7.625%, 7/1/08 $ 686,683
Aaa AAA 1,830 New York City, IDA
(Rockefeller Foundation),
5.375%, 7/1/23 1,808,461
- ---------------------------------------------------------------------------------------
$ 2,495,144
- ---------------------------------------------------------------------------------------
Solid Waste -- 1.9%
- ---------------------------------------------------------------------------------------
Baa1 NR $ 9,530 New York State EFC Resource
Recovery, Huntington,
7.50%, 10/1/12 $ 10,178,707
- ---------------------------------------------------------------------------------------
$ 10,178,707
- ---------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
47
<PAGE>
New York Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Special Tax Revenue -- 10.0%
- ---------------------------------------------------------------------------------------
A3 A+ $ 5,000 New York State LGAC,
5.00%, 4/1/21 $ 4,691,250
A3 A+ 14,000 New York State LGAC,
5.00%, 4/1/21 13,313,019
A3 A+ 11,170 New York State LGAC,
5.00%, 4/1/23 10,452,551
A3 A+ 12,300 New York State LGAC,
5.375%, 4/1/19 12,168,636
A3 A+ 5,225 New York State LGAC,
5.50%, 4/1/17 5,383,265
NR BBB+ 2,630 New York State Municipal Bond
Bank Agency, 6.875%, 3/15/06 2,850,263
Baa1 BBB+ 3,335 Triborough Bridge and Tunnel
Authority, Convention Center,
6.00%, 1/1/11 3,601,200
- ---------------------------------------------------------------------------------------
$ 52,460,184
- ---------------------------------------------------------------------------------------
Transportation -- 3.9%
- ---------------------------------------------------------------------------------------
A1 AA- $ 1,500 Port Authority of New York and
New Jersey (AMT), Variable
Rate, 1/15/27/(1)/ $ 1,644,375
Aa A+ 3,500 Triborough Bridge and Tunnel
Authority, 5.20%, 1/1/27 3,387,335
Aa A+ 11,580 Triborough Bridge and Tunnel
Authority, 5.50%, 1/1/17 12,034,283
Aa A+ 3,000 Triborough Bridge and Tunnel
Authority, 6.125%, 1/1/21 3,362,880
- ---------------------------------------------------------------------------------------
$ 20,428,873
- ---------------------------------------------------------------------------------------
Water and Sewer -- 6.4%
- ---------------------------------------------------------------------------------------
A2 A- $ 11,200 New York City, NY, Municipal
Water Finance Authority,
5.25%, 6/15/29 $ 10,781,008
A2 A- 14,500 New York City, NY, Municipal
Water Finance Authority,
5.75%, 6/15/26 14,765,494
Aa2 A+ 4,545 New York State EFC, State
Water Pollution Control,
7.20%, 3/15/11 4,918,917
Aa A 150 New York State EFC, State
Water Pollution Control,
7.50%, 6/15/12 165,786
Aa2 A 2,750 New York State EFC, State
Water Pollution Control,
(partially refunded), 7.00%, 3,058,798
6/15/12
- ---------------------------------------------------------------------------------------
$ 33,690,003
- ---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $481,258,800) $ 524,848,417
- ---------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by New York
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 September 30, 1997, 10.4% 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 insured by
financial institution ranged from 0.5% to 4.6% of total investments.
/(1)/ Security has been issued as an inverse floater bond.
/(2)/ Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
See notes to financial statements
48
<PAGE>
Ohio Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS
Tax-Exempt Investments -- 100.0%
<TABLE>
<CAPTION>
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Colleges and Universities -- 0.8%
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aa3 AA $ 1,500 Ohio State Higher Educational
Facilities, (Case Western
University), 5.125%, 10/1/17 $ 1,467,870
Aa AA 550 Ohio State Higher Educational
Facilities, (Case Western
University), 6.50%, 10/1/20 648,582
- --------------------------------------------------------------------------------
$ 2,116,452
- --------------------------------------------------------------------------------
Education -- 4.2%
- --------------------------------------------------------------------------------
A1 NR $ 6,000 Ohio State Student Loan
Funding Corp (AMT),
6.10%, 8/1/07 $ 6,168,060
A1 NR 5,000 Ohio State Student Loan
Funding Corp (AMT),
6.10%, 8/1/08 5,115,050
- --------------------------------------------------------------------------------
$ 11,283,110
- --------------------------------------------------------------------------------
Electric Utilities -- 3.6%
- --------------------------------------------------------------------------------
A1 A+ $ 1,185 Ohio State Air Quality
Development Authority,
6.10%, 9/1/30 $ 1,241,051
Ba1 BB+ 7,000 Ohio State Water Development
Authority, Pollution Control
Facilities, (Cleveland
Electric), (AMT), 6.10%, 8/1/20 7,117,390
Baa1 BBB+ 360 Puerto Rico Electric Power
Authority, 7.125%, 7/1/14 384,440
NR NR 960 Virgin Islands Water and Sewer
Authority, 7.40%, 7/1/11 1,038,000
- --------------------------------------------------------------------------------
$ 9,780,881
- --------------------------------------------------------------------------------
Escrowed / Prerefunded -- 0.4%
- --------------------------------------------------------------------------------
NR BBB+ $ 1,000 Lucas County (Flowers
Hospital), 6.125%, 12/1/13 $ 1,104,990
- --------------------------------------------------------------------------------
$ 1,104,990
- --------------------------------------------------------------------------------
General Obligations -- 6.6%
- --------------------------------------------------------------------------------
NR NR $ 3,035 Belmont County,
7.30%, 12/1/12 $ 3,273,278
A1 NR 725 City of Medina, OH Fire
Station Improvement,
3.00%, 12/1/10 567,153
NR NR 2,450 Cleveland City School
District, 7.25%, 6/15/98 2,477,318
NR NR 800 Mahoning Valley, OH,
Sanitation District,
7.80%, 12/15/08 872,056
NR NR 950 Mahoning Valley, OH,
Sanitation District,
7.80%, 12/15/09 1,035,567
Aa1 AA+ 1,500 Ohio State Infrastructure
Improvement, 0.00%, 8/1/11 737,760
NR NR 1,000 Tuscarawas Public Library
Improvement, 6.90%, 12/1/11 1,047,820
NR NR 6,855 Youngstown, OH,
7.35%, 7/1/05 7,845,958
- --------------------------------------------------------------------------------
$ 17,856,910
- --------------------------------------------------------------------------------
Hospitals -- 23.7%
- --------------------------------------------------------------------------------
NR AAA $ 1,000 Allen County OH LIMA
Convalescent Home Foundation
(GNMA), 6.40%, 1/1/21 $ 1,059,380
Baa3 BBB- 1,000 Butler County (Hamilton-Hughe
Hospital), 7.50%, 1/1/10 1,087,500
A A 1,015 City of Garfield Heights
(Marymount Hospital),
6.65%, 11/15/11 1,095,997
A A 1,000 City of Garfield Heights
(Marymount Hospital),
6.70%, 11/15/15 1,081,080
A1 A 2,100 Cuyahoga County, Fairview
General Hospital,
6.25%, 8/15/10 2,233,497
A1 A 2,000 Cuyahoga County, Meridia
Health System, 6.50%, 8/15/12 2,092,800
A1 A 2,370 Cuyahoga County, Meridia
Health System, 7.00%, 8/15/23 2,556,638
Aa AA 4,450 Cuyahoga County, University
Hospitals Health System,
6.00%, 1/15/22 4,636,144
Aa AA 750 Cuyahoga County, University
Hospitals Health System,
6.50%, 1/15/19 801,728
NR BBB+ 3,705 Defiance Hospital, Inc.,
7.625%, 11/1/03 3,787,770
Baa3 BBB- 765 East Liverpool City
Hospital-Series A,
8.00%, 10/1/21 840,444
Baa3 BBB- 1,000 East Liverpool City
Hospital-Series B,
8.00%, 10/1/21 1,098,620
A A 4,000 Erie County, (Fireland
Community Hospital Project),
6.75%, 1/1/08 4,347,320
Aa NR 2,000 Franklin County (Children's
Hospital), 5.75%, 11/1/20 2,049,100
</TABLE>
See notes to financial statements
49
<PAGE>
Ohio Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Hospitals (continued)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aa NR $ 3,000 Franklin County (Children's
Hospital), 6.60%, 5/1/13 $ 3,271,050
A1 A 5,115 Hamilton County (Bethesda
Hospital, Inc.), 6.25%, 1/1/12 5,432,386
Aa2 NR 1,000 Hamilton County, OH Wesley
Hall, 6.50%, 3/1/15 1,083,060
A1 NR 5,900 Lorain County (Humility of
Mary Health Care Corp.),
5.90%, 12/15/08 6,433,714
A1 NR 1,095 Lorain County (Humility of
Mary Health Care Corp.),
7.125%, 12/15/06 1,225,535
A1 NR 1,000 Lorain County (Humility of
Mary Health Care Corp.),
7.20%, 12/15/11 1,132,250
A1 NR 1,750 Lorain, OH, Hospital
Improvement, (Lakeland County
Hospital), 6.50%, 11/15/12 1,963,938
Baa2 BBB 3,800 Miami, Upper Valley Medical
Center, 6.375%, 5/15/26 3,962,602
NR NR 9,670 Mt. Vernon Ohio Hospital,
(Knox Community Hospital),
7.875%, 6/1/12 9,933,410
Aa2 NR 600 Warren County, OH, Hospital
Facilities, (Otterbein Homes
Project), 7.20%, 7/1/11 655,428
- --------------------------------------------------------------------------------
$ 63,861,391
- --------------------------------------------------------------------------------
Housing -- 14.2%
- --------------------------------------------------------------------------------
Aa NR $ 1,300 City of Clermont, Laurels
(FHA), 6.00%, 9/1/20 $ 1,334,463
NR NR 3,000 Cuyahoga County, OH, (Rolling
Hills Apts.), 8.00%, 1/1/28 2,972,400
Aa NR 2,500 Franklin County MFMR - Tuttle
Park (FHA), (AMT),
6.50%, 3/1/26 2,669,275
Aa NR 5,985 Franklin County MFMR - Tuttle
Park (FHA), (AMT),
6.60%, 3/1/36 6,411,790
Aa NR 3,645 Franklin County, (Hamilton
Creek Apartments) (FHA),
(AMT), 5.55%, 7/1/24 3,550,522
Aa NR 1,000 Franklin County, (Hamilton
Creek Apartments) (FHA),
(AMT), 5.80%, 7/1/14 1,012,230
Aaa NR 2,500 Kent, OH, (MFMR) (Silver
Meadows) (GNMA), (AMT),
7.30%, 12/20/36 2,785,225
NR NR 2,990 Lucas County, OH, (County
Creek Project), (AMT),
8.00%, 7/1/26 2,926,941
Aaa AAA 935 Ohio HFA SFMR, (GNMA) (AMT)
Variable Rate, 3/1/31/(1)/ 1,046,031
NR AAA 3,310 Ohio HFA, (GNMA), (AMT),
6.375%, 3/1/25 3,511,844
NR AAA 4,595 Ohio HFA, (GNMA), (AMT),
6.70%, 3/1/25 4,915,869
Aa A 1,000 Ohio HFA, Aristocrat South
Board & Care (FHA), (AMT),
7.30%, 8/1/31 1,057,000
NR AAA 1,250 Ohio HFA, MFMR-Asbury Woods
(FHA), 7.00%, 10/1/24 1,302,000
Baa BBB 2,925 Puerto Rico Commonwealth Urban
Renewal and Housing Corp.,
0.00%, 10/1/99 2,686,086
- --------------------------------------------------------------------------------
$ 38,181,676
- --------------------------------------------------------------------------------
Industrial Development Revenue / Pollution
Control Revenue -- 12.1%
- --------------------------------------------------------------------------------
Aa NR $ 2,000 Cuyahoga OH IDR - Chippewa
Place, 6.60%, 8/1/15 $ 2,102,380
Baa1 NR 3,750 Ohio Air Quality Development
Authority, (Ashland Oil Inc.),
6.85%, 4/1/10 3,964,913
NR A- 555 Ohio Economic Development
Commission, (Burrows Paper
Corp.) (AMT), 7.625%, 6/1/11 609,939
NR A- 255 Ohio Economic Development
Commission, (Cheryl & Co.)
(AMT), 5.50%, 12/1/04 269,423
NR A- 530 Ohio Economic Development
Commission, (Cheryl & Co.),
(AMT), 5.90%, 12/1/09 565,621
NR A- 1,655 Ohio Economic Development
Commission, (Consolidated
Biscuit), (AMT),
7.00%, 12/1/09 1,819,606
NR A- 3,255 Ohio Economic Development
Commission, (J J & W LP)
(AMT), 6.70%, 12/1/14 3,546,225
NR BB- 1,020 Ohio Economic Development
Commission, (Kmart Corp.),
6.75%, 5/15/07 1,076,243
NR A- 750 Ohio Economic Development
Commission, (Luigino's Inc.)
(AMT), 6.85%, 6/1/01 759,278
</TABLE>
See notes to financial statements
50
<PAGE>
Ohio Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Industrial Development Revenue /
Pollution Control Revenue (continued)
- --------------------------------------------------------------------------------
NR A- $ 720 Ohio Economic Development
Commission, (Ohio Enterprise
Bond Fund-Progress Plastics
Products), (AMT),
6.80%, 12/1/01 $ 767,333
NR A- 1,525 Ohio Economic Development
Commission, (Progress
Plastic Products) (AMT),
7.80%, 12/1/09 1,740,269
NR A- 1,000 Ohio Economic Development
Commission, (Royal Appliance
Manufacturing Co.) (AMT),
7.625%, 12/1/11 1,101,140
NR A- 680 Ohio Economic Development
Commission, (Royal Appliance
Manufacturing Co.) (AMT),
7.625%, 12/1/11 748,775
NR A- 880 Ohio Economic Development
Commission, (VSM Corp.)
(AMT), 7.375%, 12/1/11 960,881
Aa3 AA 1,000 Ohio Pollution Control,
(Standard Oil Co.),
6.75%, 12/1/15 1,184,360
Baa2 BBB 3,885 Ohio Water Development
Authority, (Union Carbide
Corp.), 5.50%, 1/15/07 3,886,865
Baa3 BBB- 4,000 Puerto Rico Port Authority
(American Airlines) (AMT),
6.25%, 6/1/26 4,281,040
NR NR 3,000 State of Ohio, Solid Waste,
(Republic Engineered Steels
Inc.), (AMT), 9.00%, 6/1/21 3,119,250
- --------------------------------------------------------------------------------
$ 32,503,541
- --------------------------------------------------------------------------------
Insured-Colleges and Universities -- 0.4%
- --------------------------------------------------------------------------------
Aaa AAA $ 1,000 Ohio Higher Education
Facilities (University of
Dayton) (FGIC), 5.80%, 12/1/14 $ 1,051,880
- --------------------------------------------------------------------------------
$ 1,051,880
- --------------------------------------------------------------------------------
Insured-Electric Utilities -- 8.4%
- --------------------------------------------------------------------------------
Aaa AAA $ 1,650 Cleveland Public Power System,
(MBIA), 7.00%, 11/15/17 $ 1,838,348
Aaa AAA 15,675 Cleveland, OH, Public
Power System (MBIA),
5.00%, 11/15/20 14,991,099
Aaa AAA 2,000 Cuyahoga County Medical Center
Utility System (MBIA) (AMT),
6.10%, 8/15/15 2,116,120
Aaa AAA 750 Guam Power Authority
Revenue, Series A (AMBAC),
5.25%, 10/1/13 761,745
Aaa AAA 2,300 Puerto Rico Electric Power
Authority, (FSA) Variable
Rate, 7/1/02/(1)/ 2,547,250
Aaa AAA 815 Puerto Rico, Electric Power
Authority, (MBIA),
0.00%, 7/1/17 299,317
- --------------------------------------------------------------------------------
$ 22,553,879
- --------------------------------------------------------------------------------
Insured-General Obligations -- 2.8%
- --------------------------------------------------------------------------------
NR AAA $ 1,700 Commonwealth of Puerto Rico
"RIBS" (AMBAC), Variable
Rate, 7/1/15/(1)/ $ 1,853,000
Aaa AAA 500 Hilliard Ohio School District
(FGIC), 5.00%, 12/1/20 480,730
Aaa AAA 2,000 North Olmsted, OH (AMBAC),
5.00%, 12/1/16 1,956,440
Aaa AAA 3,000 Puerto Rico (FSA), Variable
Rate, 7/1/22/(1)/ 3,296,250
- --------------------------------------------------------------------------------
$ 7,586,420
- --------------------------------------------------------------------------------
Insured-Hospitals -- 7.4%
- --------------------------------------------------------------------------------
Aaa AAA $ 2,500 Akron, Bath and Copley
Townships Children's Hospital
Medical Center of Akron,
(AMBAC), 5.25%, 11/15/20 $ 2,428,150
Aaa AAA 1,000 Clermont County, Mercy Health
System (AMBAC) Variable
Rate, 10/5/21/(1)/ 1,215,000
Aaa AAA 2,750 Mansfield General Hospital
(AMBAC), 6.70%, 12/1/09 3,021,040
Aaa AAA 5,000 Middleburg Heights
Hospital-Southwestern General
(FSA), 5.75%, 8/15/21 5,169,900
Aaa AAA 1,000 Montgomery County, (Miami
Valley Hospital) (AMBAC),
6.25%, 11/15/16 1,066,200
Aaa AAA 6,565 Portage County, (Robinson
Memorial Hospital), (MBIA),
5.80%, 11/15/15 6,890,558
- --------------------------------------------------------------------------------
$ 19,790,848
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
51
<PAGE>
Ohio Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Housing -- 1.1%
- --------------------------------------------------------------------------------
Aaa AAA $ 750 Ohio Capital Corp. FHA Insured
Mortgage Loans, (MBIA),
6.50%, 1/1/25 $ 772,575
Aaa AAA 970 Ohio Capital Corp. FHA Insured
Mortgage Loans, (MBIA),
7.25%, 7/1/24 1,008,431
Aaa AAA 1,100 Ohio Capital Corp. MFMR -
Horizon Apts. (MBIA),
6.50%, 1/1/23 1,147,377
- --------------------------------------------------------------------------------
$ 2,928,383
- --------------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of
Participation -- 1.1%
- --------------------------------------------------------------------------------
Aaa AAA $ 1,000 Ohio Higher Education
(University of Dayton),
(FGIC), 0.00%, 12/1/06 $ 654,890
Aaa AAA 2,500 University of Cincinnati-Ohio
(MBIA), 5.125%, 6/1/24 2,410,075
- --------------------------------------------------------------------------------
$ 3,064,965
- --------------------------------------------------------------------------------
Insured-Life Care -- 1.0%
- --------------------------------------------------------------------------------
Aaa AAA $ 1,000 Lorain County, OH, (Catholic
Healthcare Partners), (MBIA),
5.625%, 9/1/14 $ 1,037,360
Aaa AAA 1,500 Lorain County, OH, (Catholic
Healthcare Partners), (MBIA),
5.625%, 9/1/15 1,550,640
- --------------------------------------------------------------------------------
$ 2,588,000
- --------------------------------------------------------------------------------
Insured-Special Tax Revenue -- 0.4%
- --------------------------------------------------------------------------------
Aaa AAA $ 2,110 Hudson Local School District,
(FGIC), 0.00%, 12/15/09 $ 1,157,377
- --------------------------------------------------------------------------------
$ 1,157,377
- --------------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 0.4%
- --------------------------------------------------------------------------------
A2 A+ $ 1,000 University of Cincinnati,
6.50%, 12/1/11 $ 1,060,750
- --------------------------------------------------------------------------------
$ 1,060,750
- --------------------------------------------------------------------------------
Life Care -- 1.9%
- --------------------------------------------------------------------------------
Aa NR $ 1,995 Franklin County, Kensington
Place, 6.75%, 1/1/34 $ 2,094,850
Aa2 NR 1,000 Hamilton County, OH Hospital -
Episcopal Retirement Home,
6.80%, 1/1/08 1,077,390
NR BBB- 1,800 Marion OH Health Care - United
Church Home, 6.30%, 11/15/15 1,875,240
- --------------------------------------------------------------------------------
$ 5,047,480
- --------------------------------------------------------------------------------
Nursing Homes -- 5.6%
- --------------------------------------------------------------------------------
Aaa NR $ 1,305 Cuyahoga County, OH, (Maple
Care Center) (GNMA), (AMT),
8.00%, 8/20/16 $ 1,553,459
NR NR 3,020 Greene County, OH, IDA,
(Fairview Extended Care),
10.125%, 1/1/11 3,630,795
NR AAA 1,205 North Canton, OH, Health Care
Facilities, 6.10%, 9/20/16 1,278,601
NR AAA 6,455 North Canton, OH, Health Care
Facilities, 9.55%, 3/20/32 8,675,519
- --------------------------------------------------------------------------------
$ 15,138,374
- --------------------------------------------------------------------------------
Special Tax Revenue -- 1.2%
- --------------------------------------------------------------------------------
Baa1 A $ 3,000 Puerto Rico, Highway and
Transportation Authority,
6.625%, 7/1/12 $ 3,284,610
- --------------------------------------------------------------------------------
$ 3,284,610
- --------------------------------------------------------------------------------
Transportation -- 2.3%
- --------------------------------------------------------------------------------
NR BBB $ 5,630 Guam Airport Authority (AMT),
6.70%, 10/1/23 $ 6,103,933
- --------------------------------------------------------------------------------
$ 6,103,933
- --------------------------------------------------------------------------------
Water and Sewer -- 0.4%
- --------------------------------------------------------------------------------
NR NR $ 1,000 Vermilion, OH, 7.25%, 8/15/15 $ 1,061,670
- --------------------------------------------------------------------------------
$ 1,061,670
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
52
<PAGE>
Ohio Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Value
- --------------------------------------------------------------------------------
<S> <C>
Total Tax-Exempt Investments -- 100.0%
(identified cost $252,173,553) $269,107,520
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Ohio
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 the risk associated with such economic
developments, at September 30, 1997, 22.2% 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 insured by
financial institution ranged from 1% to 13% of total investments.
/(1)/ Security has been issued as an inverse floater bond.
See notes to financial statements
53
<PAGE>
Rhode Island Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS
Tax-Exempt Investments -- 100.0%
<TABLE>
<CAPTION>
Ratings (Unaudited)
- --------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Education -- 1.9%
- ---------------------------------------------------------------------------------------
A NR $ 750 Rhode Island Student Loan
Authority, (AMT), 5.60%, 12/1/12 $ 761,445
- ---------------------------------------------------------------------------------------
$ 761,445
- ---------------------------------------------------------------------------------------
General Obligations -- 5.0%
- ---------------------------------------------------------------------------------------
Baa1 A $ 1,250 Commonwealth of Puerto Rico
Aqueduct and Sewer Authority,
5.00%, 7/1/19 $ 1,181,775
NR BBB 750 Guam, 5.40%, 11/15/18 736,058
Baa NR 105 West Warwick, 6.80%, 7/15/98 106,799
- ---------------------------------------------------------------------------------------
$ 2,024,632
- ---------------------------------------------------------------------------------------
Hospitals -- 11.5%
- ---------------------------------------------------------------------------------------
A3 A- $ 1,250 Rhode Island Health and
Educational Building Corp. (South
County Hospital), 5.75%, 11/15/26 $ 1,272,863
NR A 1,015 Rhode Island Health and
Educational Building Corp.,
(Butler Hospital), 5.125%, 1/1/08 1,009,722
NR AA 1,500 Rhode Island Health and
Educational Building Corp.,
(Landmark Medical Center),
5.875%, 10/1/19 1,518,600
Baa3 BBB 830 Rhode Island Health and
Educational Building Corp.,
(Westerly Hospital), 6.00%, 7/1/14 840,159
- ---------------------------------------------------------------------------------------
$ 4,641,344
- ---------------------------------------------------------------------------------------
Housing -- 17.2%
- ---------------------------------------------------------------------------------------
Aa2 AA+ $ 220 Rhode Island Housing and Mortgage
Finance Corp., 6.50%, 4/1/27 $ 230,952
Aa2 AA+ 270 Rhode Island Housing and Mortgage
Finance Corp., 6.70%, 10/1/14 290,231
Aa2 AA+ 90 Rhode Island Housing and Mortgage
Finance Corp., 6.85%, 4/1/27 96,392
Aa AA+ 200 Rhode Island Housing and Mortgage
Finance Corp., 7.875%, 10/1/22 210,582
Aa2 AA+ 1,750 Rhode Island Housing and Mortgage
Finance Corp., (AMT),
6.60%, 10/1/25 1,847,248
Aa2 AA+ 100 Rhode Island Housing and Mortgage
Finance Corp., (AMT),
6.70%, 10/1/12 106,348
Aa2 AA+ 875 Rhode Island Housing and Mortgage
Finance Corp., (AMT),
6.80%, 10/1/25/(1)/ 924,989
Aa2 AA+ 1,000 Rhode Island Housing and Mortgage
Finance Corp., (AMT),
7.10%, 10/1/23 1,047,600
Aa2 AA+ 2,000 Rhode Island Housing and Mortgage
Finance Corp., (AMT),
7.55%, 10/1/22 2,129,420
Aa AA+ 35 Rhode Island Housing and Mortgage
Finance Corp., (AMT),
7.875%, 10/1/22 36,852
- ---------------------------------------------------------------------------------------
$ 6,920,614
- ---------------------------------------------------------------------------------------
Industrial Development Revenue / Pollution
Control Revenue -- 1.3%
- ---------------------------------------------------------------------------------------
Baa3 BBB- $ 500 Puerto Rico Port Authority
(American Airlines), (AMT),
6.30%, 6/1/23 $ 528,710
- ---------------------------------------------------------------------------------------
$ 528,710
- ---------------------------------------------------------------------------------------
Insured-General Obligations -- 12.9%
- ---------------------------------------------------------------------------------------
NR AAA $ 250 Commonwealth of Puerto Rico
"RIBS" (AMBAC), Variable Rate,
7/1/15/(2)/ $ 272,500
Aaa AAA 1,000 Cranston, (MBIA), 6.10%, 6/15/15 1,067,560
Aaa AAA 1,500 Kent County Water Authority,
(MBIA), 6.35%, 7/15/14 1,648,575
Aaa AAA 1,000 Rhode Island Depositors Economic
Protection Corp., (MBIA),
5.80%, 8/1/09 1,094,160
Aaa AAA 1,000 Rhode Island Depositors Economic
Protection Corp., (MBIA),
5.80%, 8/1/12 1,089,060
- ---------------------------------------------------------------------------------------
$ 5,171,855
- ---------------------------------------------------------------------------------------
Insured-Hospitals -- 14.9%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 2,700 Rhode Island Health and
Educational Building, Lifespan
Obligation Group, (MBIA), 5.25%,
5/15/26 $ 2,599,289
</TABLE>
See notes to financial statements
54
<PAGE>
Rhode Island Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- --------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Hospitals (continued)
- ---------------------------------------------------------------------------------------
Aaa AAA $ 3,350 Rhode Island State Health And
Educational Corp., (Lifespan)
(MBIA), 5.75%, 5/15/23 $ 3,415,224
- ---------------------------------------------------------------------------------------
$ 6,014,513
- ---------------------------------------------------------------------------------------
Insured-Housing -- 7.6%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 805 Providence Housing Development
Corp. Mortgage, (Barbara Jordan
Apartments), (MBIA),
6.50%, 7/1/09 $ 858,516
Aa2 AA+ 500 Rhode Island Housing and Mortgage
Finance Corp., (MBIA),
6.20%, 10/1/06 527,300
Aaa AAA 1,075 Villa Excelsior Housing
Development Corp. Mortgage,
(MBIA), 6.75%, 1/1/19 1,153,346
Aaa AAA 500 Villa Excelsior Housing
Development Corp. Mortgage,
(MBIA), 6.85%, 1/1/24 537,765
- ---------------------------------------------------------------------------------------
$ 3,076,927
- ---------------------------------------------------------------------------------------
Insured-Special Tax Revenue -- 12.8%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 3,000 Convention Center Authority of
Rhode Island, (MBIA), 5.00%,
5/15/20 $ 2,825,489
Aaa AAA 2,300 Convention Center Authority of
Rhode Island, (MBIA), 5.25%,
5/15/15 2,332,959
- ---------------------------------------------------------------------------------------
$ 5,158,448
- ---------------------------------------------------------------------------------------
Insured-Water and Sewer -- 4.3%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 750 Rhode Island Clean Water, Safe
Drinking Water, (AMBAC),
6.70%, 1/1/15 $ 847,470
Aaa AAA 350 Rhode Island Clean Water, Water
Pollution Control, (MBIA),
5.40%, 10/1/15 361,228
Aaa AAA 500 Rhode Island Clean Water, Water
Pollution Control, (MBIA),
5.85%, 10/1/09 535,900
- ---------------------------------------------------------------------------------------
$ 1,744,598
- ---------------------------------------------------------------------------------------
Life Care -- 2.6%
- ---------------------------------------------------------------------------------------
NR NR $ 1,000 Rhode Island Health and
Educational Building, (Tockwotton
Home), 6.25%, 8/15/22 $ 1,033,390
- ---------------------------------------------------------------------------------------
$ 1,033,390
- ---------------------------------------------------------------------------------------
Miscellaneous -- 0.6%
- ---------------------------------------------------------------------------------------
Baa1 A- $ 230 Rhode Island Depositors Economic
Protection Corp., 5.75%, 8/1/21 $ 243,285
- ---------------------------------------------------------------------------------------
$ 243,285
- ---------------------------------------------------------------------------------------
Nursing Homes -- 1.8%
- ---------------------------------------------------------------------------------------
NR NR $ 725 Rhode Island State Health And
Educational Building Corp.,
(Steere House), 5.80%, 7/1/20 $ 714,125
- ---------------------------------------------------------------------------------------
$ 714,125
- ---------------------------------------------------------------------------------------
Special Tax Revenue -- 4.2%
- ---------------------------------------------------------------------------------------
Baa3 BBB- $ 1,500 City of Providence Special
Obligation Tax Increment Bonds,
7.65%, 6/1/16 $ 1,673,175
- ---------------------------------------------------------------------------------------
$ 1,673,175
- ---------------------------------------------------------------------------------------
Transportation -- 1.4%
- ---------------------------------------------------------------------------------------
NR BBB $ 500 Guam Airport Authority, (AMT),
6.70%, 10/1/23 $ 542,090
- ---------------------------------------------------------------------------------------
$ 542,090
- ---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $38,164,900) $ 40,249,151
- ---------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
See notes to financial statements
55
<PAGE>
Rhode Island Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS CONT'D
The Portfolio invests primarily in debt securities issued by Rhode Island
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 September 30, 1997, 49.9% 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 insured by
financial institution ranged from 2.8% to 47.1% of total investments.
/(1)/ Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
/(2)/ Security has been issued as an inverse floater bond.
See notes to financial statements
56
<PAGE>
West Virginia Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS
Tax-Exempt Investments -- 100.0%
<TABLE>
<CAPTION>
Ratings (Unaudited)
- --------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Electric Utilities -- 14.5%
- ---------------------------------------------------------------------------------------
NR BBB $ 750 Guam Power Authority,
5.25%, 10/1/13 $ 731,775
NR BBB 500 Guam Power Authority,
5.25%, 10/1/23 477,500
A2 A 2,000 Harrison, WV PCR (Monongahela
Power Co. Harrison Station),
(AMT), 6.75%, 8/1/24 2,207,219
Baa1 BBB+ 1,000 Mason, WV PCR (Appalacian Power
Co.), 6.85%, 6/1/22 1,094,970
Baa1 BBB+ 855 Puerto Rico Electric Power
Authority, 0.00%, 7/1/17 302,490
- -------------------------------------------------------------------------------------------
$ 4,813,954
- -------------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 2.7%
- -------------------------------------------------------------------------------------------
Aaa AAA $ 2,500 Kanawha-Putnam, WV Single
Family Mortgage (AMBAC),
0.00%, 12/1/16 $ 896,025
- -------------------------------------------------------------------------------------------
$ 896,025
- -------------------------------------------------------------------------------------------
General Obligations -- 1.2%
- -------------------------------------------------------------------------------------------
NR BBB $ 400 Government of Guam,
5.375%, 11/15/13 $ 394,252
- -------------------------------------------------------------------------------------------
$ 394,252
- -------------------------------------------------------------------------------------------
Hospitals -- 9.5%
- -------------------------------------------------------------------------------------------
NR BBB+ $ 1,250 Berkeley, WV Building Commission
(City Hospital), 6.50%, 11/1/22 $ 1,306,075
Baa1 BBB+ 250 Princeton, WV (Community
Hospital), 6.00%, 5/1/18 253,478
A1 NR 500 West Virginia HFA (Charleston
Area Medical Center), 6.50%,
9/1/16 530,135
A1 NR 1,000 West Virginia HFA (Charleston
Area Medical Center), 6.50%,
9/1/23 1,055,980
- -------------------------------------------------------------------------------------------
$ 3,145,668
- -------------------------------------------------------------------------------------------
Housing -- 1.5%
- -------------------------------------------------------------------------------------------
Aaa AAA $ 500 West Virginia State Housing
Development Fund, (AMT),
5.70%, 11/1/17 $ 507,395
- -------------------------------------------------------------------------------------------
$ 507,395
- -------------------------------------------------------------------------------------------
Industrial Development Revenue / Pollution
Control Revenue -- 10.3%
- -------------------------------------------------------------------------------------------
NR A- $ 1,375 Jefferson, WV (Royal Venders,
Inc.) (AMT), 5.90%, 8/1/04 $ 1,457,885
Baa2 NR 300 Kanawha, WV (Union Carbide
Chemicals and Plastics Co.)
(AMT), 8.00%, 8/1/20 326,691
Baa3 BBB- 500 Puerto Rico Port Authority
(American Airlines) (AMT), 6.25%,
6/1/26 535,130
NR NR 1,000 Upshur, WV Solid Waste (TJI)
(AMT), 7.00%, 7/15/25 1,092,340
- -------------------------------------------------------------------------------------------
$ 3,412,046
- -------------------------------------------------------------------------------------------
Insured-Education -- 4.9%
- -------------------------------------------------------------------------------------------
Aaa AAA $ 1,000 West Virginia State University
(Marshall Library) (AMBAC),
5.75%, 4/1/16 $ 1,042,350
Aaa AAA 550 West Virginia State University
System (AMBAC), 6.00%, 4/1/12 587,851
- -------------------------------------------------------------------------------------------
$ 1,630,201
- -------------------------------------------------------------------------------------------
Insured-Electric Utilities -- 3.0%
- -------------------------------------------------------------------------------------------
Aaa AAA $ 250 Commonwealth of Puerto Rico
Electric Power Authority STRIPES
(FSA), Variable Rate,7/1/03/(1)/ $ 283,125
Aaa AAA 700 Marshall, WV PCR (Ohio Power
Kammer Plant) (MBIA),
5.45%, 7/1/14 712,222
- -------------------------------------------------------------------------------------------
$ 995,347
- -------------------------------------------------------------------------------------------
Insured-General Obligations -- 3.6%
- -------------------------------------------------------------------------------------------
Aaa AAA $ 150 West Virginia (FGIC),
5.25%, 11/1/26 $ 146,282
Aaa AAA 1,000 West Virginia (FGIC),
5.75%, 11/1/21 1,031,380
- -------------------------------------------------------------------------------------------
$ 1,177,662
- -------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
57
<PAGE>
West Virginia Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- -------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Hospitals -- 12.1%
- -------------------------------------------------------------------------------------------
Aaa AAA $ 1,300 West Virginia HFA (Cabell
Huntington Hospital) (AMBAC), $ 1,391,429
6.25%, 1/1/19
Aaa AAA 850 West Virginia HFA (Charleston
Area Medical Center) (MBIA),
5.75%, 9/1/13 893,903
Aaa AAA 1,200 West Virginia HFA (Linked Bulls &
Bears) (MBIA), 6.10%, 1/1/18 1,246,536
Aaa AAA 500 West Virginia HFA (University
Hospital) (MBIA), 5.00%, 6/1/16 478,320
- -------------------------------------------------------------------------------------------
$ 4,010,188
- -------------------------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of
Participation -- 1.6%
- -------------------------------------------------------------------------------------------
Aaa AAA $ 500 West Virginia School Building
Authority, (AMBAC), 5.60%, 7/1/17 $ 513,040
- -------------------------------------------------------------------------------------------
$ 513,040
- -------------------------------------------------------------------------------------------
Insured-Transportation -- 2.2%
- -------------------------------------------------------------------------------------------
Aaa AAA $ 1,000 West Virginia Parkways Economic
Development and Tourism Authority
(FGIC), 0.00%, 5/15/04 $ 737,470
- -------------------------------------------------------------------------------------------
$ 737,470
- -------------------------------------------------------------------------------------------
Insured-Water and Sewer -- 22.9%
- -------------------------------------------------------------------------------------------
Aaa AAA $ 250 Berkeley, WV Public Service
District Sewer (MBIA), 5.75%, $ 258,445
10/1/25
Aaa AAA 500 Crab Orchard, WV Public Service
District, (AMBAC), 5.50%, 10/1/25 502,045
Aaa AAA 750 Greenbrier, WV Public Service
District Sewer (MBIA), 5.625%, 764,483
10/1/19
Aaa AAA 1,500 Parkersburg, WV Waterworks and
Sewer (FSA), 5.80%, 9/1/19 1,557,720
Aaa AAA 2,000 West Virginia Water Development
(Loan Program II) (FSA),
5.25%, 11/1/35 1,920,500
Aaa AAA 750 West Virginia Water Development
(Loan Program II) (FSA),
6.00%, 11/1/14 806,460
Aaa AAA 500 West Virginia Water Development
Authority (FSA), 5.00%, 11/1/21 479,045
Aaa AAA 1,280 Williamson, WV Waterworks and
Sewage System (AMBAC),
5.50%, 10/1/25 1,285,235
- -------------------------------------------------------------------------------------------
$ 7,573,933
- -------------------------------------------------------------------------------------------
Nursing Homes -- 2.3%
- -------------------------------------------------------------------------------------------
NR NR $ 745 Kanawha, WV (Beverly
Enterprises), 7.25%, 11/1/04 $ 774,666
- -------------------------------------------------------------------------------------------
$ 774,666
- -------------------------------------------------------------------------------------------
Solid Waste -- 6.1%
- -------------------------------------------------------------------------------------------
A2 A $ 2,000 Braxton County, WV, (Weyerhaeuser
Co.), (AMT), 5.80%, 6/1/27/(2)/ $ 2,024,520
- -------------------------------------------------------------------------------------------
$ 2,024,520
- -------------------------------------------------------------------------------------------
Special Tax Revenue -- 1.6%
- -------------------------------------------------------------------------------------------
Baa1 A $ 500 Puerto Rico Highway and
Transportation Authority,
5.50%, 7/1/15 $ 514,570
- -------------------------------------------------------------------------------------------
$ 514,570
- -------------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $31,140,565) $ 33,120,937
- -------------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by West Virginia
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 September 30, 1997, 48.7% 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 insured by
financial institution ranged from 0.5% to 5.4% of total investments.
/(1)/ Security has been issued as an inverse floater bond.
/(2)/ Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
See notes to financial statements
58
<PAGE>
EV Municipals Portfolios as of September 30, 1997
FINANCIAL STATEMENTS
Statements of Assets and Liabilities
As of September 30, 1997
<TABLE>
<CAPTION>
California Florida Massachusetts Mississippi
Portfolio Portfolio Portfolio Portfolio
- -------------------------------------------------------------------------------------------------------------------------------
Assets
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investments --
Identified cost $288,296,835 $462,068,417 $238,584,146 $ 19,751,773
Unrealized appreciation 37,235,739 31,954,789 23,291,554 2,027,684
- -------------------------------------------------------------------------------------------------------------------------------
Investment at value (Note 1A) $325,532,574 $494,023,206 $261,875,700 $ 21,779,457
- -------------------------------------------------------------------------------------------------------------------------------
Cash $ 387 $ 10,123,387 $ 1,204,933 $ 236
Receivable for investments sold -- 95,053 -- 10,270
Interest receivable 4,798,482 9,964,572 4,168,799 398,914
Receivable for daily variation
margin on open financial futures
contracts (Notes 1E and 6) 43,656 -- 26,125 3,094
Deferred organization expenses (Note 1D) 3,299 3,413 2,001 456
- -------------------------------------------------------------------------------------------------------------------------------
Total assets $330,378,398 $514,209,631 $267,277,558 $ 22,192,427
- -------------------------------------------------------------------------------------------------------------------------------
Liabilities
- -------------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased $ 1,820,052 $ -- $ 13,594,370 $ --
Demand note payable (Note 5) 1,529,000 -- -- 64,000
Payable to affiliate for Trustees'
fees (Note 2) 4,365 5,363 3,867 42
Accrued expenses 20,966 2,853 4,560 1,638
- -------------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 3,374,383 $ 8,216 $ 13,602,797 $ 65,680
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets applicable to investors'
interest in Portfolio $327,004,015 $514,201,415 $253,674,761 $ 22,126,747
- -------------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- -------------------------------------------------------------------------------------------------------------------------------
Net proceeds from capital
contributions and withdrawals $290,157,928 $482,246,626 $230,616,384 $ 20,126,676
Net unrealized appreciation of
investments and financial futures
contracts (computed on the basis
of identified cost) 36,846,087 31,954,789 23,058,377 2,000,071
- -------------------------------------------------------------------------------------------------------------------------------
Total $327,004,015 $514,201,415 $253,674,761 $ 22,126,747
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
59
<PAGE>
EV Municipals Portfolios as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Assets and Liabilities
As of September 30, 1997
<TABLE>
<CAPTION>
New York Ohio Rhode Island West Virginia
Portfolio Portfolio Portfolio Portfolio
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Investments --
Identified cost $481,258,800 $252,173,553 $ 38,164,900 $ 31,140,565
Unrealized appreciation 43,589,617 16,933,967 2,084,251 1,980,372
- ----------------------------------------------------------------------------------------------------------------------------
Investments, at value (Note 1A) $524,848,417 $269,107,520 $ 40,249,151 $ 33,120,937
- ----------------------------------------------------------------------------------------------------------------------------
Cash $ 488 $ 1,062 $ 861 $ 618
Receivable for investments sold 95,000 -- 5,000 970,596
Interest receivable 8,528,279 4,355,826 808,142 537,171
Receivable for daily variation margin on
open financial futures contracts (Notes
1E and 6) 110,000 -- 9,969 5,156
Deferred organization expenses (Note 1D) 2,330 1,385 472 473
- ----------------------------------------------------------------------------------------------------------------------------
Total assets $533,584,514 $273,465,793 $ 41,073,595 $ 34,634,951
- ----------------------------------------------------------------------------------------------------------------------------
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased $ -- $ -- $ 106,000 $ --
Demand note payable (Note 5) 5,940,000 2,157,000 749,000 1,127,000
Payable to affiliate for Trustees' fees
(Note 2) 5,363 3,867 416 416
Accrued expenses 35,637 36,341 530 4,540
- ----------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 5,981,000 $ 2,197,208 $ 855,946 $ 1,131,956
- ----------------------------------------------------------------------------------------------------------------------------
Net Assets applicable to investors'
interest in Portfolio $527,603,514 $271,268,585 $ 40,217,649 $ 33,502,995
- ----------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- ----------------------------------------------------------------------------------------------------------------------------
Net proceeds from capital contributions and
withdrawals $484,995,697 $254,334,618 $ 38,222,373 $ 31,556,928
Net unrealized appreciation of investments
and financial futures contracts
(computed on the basis of identified
cost) 42,607,817 16,933,967 1,995,276 1,946,067
- ----------------------------------------------------------------------------------------------------------------------------
Total $527,603,514 $271,268,585 $ 40,217,649 $ 33,502,995
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
60
<PAGE>
EV Municipals Portfolios as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Operations
For the Year Ended September 30, 1997
<TABLE>
<CAPTION>
California Florida Massachusetts Mississippi
Portfolio Portfolio Portfolio Portfolio
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income (Note 1B)
- --------------------------------------------------------------------------------------------------------------------------------
Interest income $21,773,352 $34,018,008 $16,713,453 $1,424,256
- --------------------------------------------------------------------------------------------------------------------------------
Total investment income $21,773,352 $34,018,008 $16,713,453 $1,424,256
- --------------------------------------------------------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------------------------------------------------------
Investment adviser fee (Note 2) $ 1,687,887 $ 2,593,352 $ 1,203,548 $ 44,507
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 17,418 21,370 15,444 521
Custodian fee (Note 1J) 164,950 202,095 135,200 17,504
Legal and accounting services 34,723 35,555 30,911 18,903
Bond pricing -- -- -- 4,975
Amortization of organization expenses (Note 1D) 5,624 8,829 5,208 621
Miscellaneous 50,049 52,923 42,327 4,397
- --------------------------------------------------------------------------------------------------------------------------------
Total expenses $ 1,960,651 $ 2,914,124 $ 1,432,638 $ 91,428
- --------------------------------------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee (Note 1J) $ 47,105 $ 202,095 $ 38,619 $ 3,402
- --------------------------------------------------------------------------------------------------------------------------------
Total expense reductions $ 47,105 $ 202,095 $ 38,619 $ 3,402
- --------------------------------------------------------------------------------------------------------------------------------
Net expenses $ 1,913,546 $ 2,712,029 $ 1,394,019 $ 88,026
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income $19,859,806 $31,305,979 $15,319,434 $1,336,230
- --------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 8,284,752 $16,626,056 $ 5,018,545 $ 387,066
Financial futures contracts (2,978,632) (8,832,503) (2,898,402) (203,661)
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments $ 5,306,120 $ 7,793,553 $ 2,120,143 $ 183,405
- --------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $11,238,457 $(2,727,363) $ 6,730,261 $ 717,894
Financial futures contracts 21,385 1,417,470 75,551 1,160
- --------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) $11,259,842 $(1,309,893) $ 6,805,812 $ 719,054
of investments
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $16,565,962 $ 6,483,660 $ 8,925,955 $ 902,459
- --------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $36,425,768 $37,789,639 $24,245,389 $2,238,689
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
61
<PAGE>
EV Municipals Portfolios as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Operations
For the Year Ended September 30, 1997
<TABLE>
<CAPTION>
New York Ohio Rhode Island West Virginia
Portfolio Portfolio Portfolio Portfolio
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income (Note 1B)
- --------------------------------------------------------------------------------------------------------------------------------
Interest income $ 34,720,613 $ 17,570,035 $ 2,319,707 $ 2,157,462
- --------------------------------------------------------------------------------------------------------------------------------
Total investment income $ 34,720,613 $ 17,570,035 $ 2,319,707 $ 2,157,462
Expenses
- --------------------------------------------------------------------------------------------------------------------------------
Investment adviser fee (Note 2) $ 2,603,611 $ 1,272,425 $ 96,316 $ 86,026
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 21,370 15,442 1,647 1,647
Custodian fee (Note 1J) 194,391 126,756 17,375 22,696
Legal and accounting services 38,819 30,152 19,679 18,589
Amortization of organization expenses (Note 1D) 6,278 3,960 635 631
Registration fees -- -- 300 --
Interest expense (Note 5) 318,274 104,537 8,764 8,471
Miscellaneous 20,343 25,863 10,559 4,884
- --------------------------------------------------------------------------------------------------------------------------------
Total expenses $ 3,203,086 $ 1,579,135 $ 155,275 $ 142,944
- --------------------------------------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee (Note 1J) $ -- $ 21,642 $ 16,782 $ 9,225
Reduction of investment adviser fee(Note 2) -- -- 47,940 --
- --------------------------------------------------------------------------------------------------------------------------------
Total expense reductions $ -- $ 21,642 $ 64,722 $ 9,225
- --------------------------------------------------------------------------------------------------------------------------------
Net expenses $ 3,203,086 $ 1,557,493 $ 90,553 $ 133,719
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 31,517,527 $ 16,012,542 $ 2,229,154 $ 2,023,743
- --------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 12,743,465 $ 5,784,752 $ 329,660 $ 455,903
Financial futures contracts (2,876,191) (1,882,739) (245,373) (487,515)
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments $ 9,867,274 $ 3,902,013 $ 84,287 $ (31,612)
- --------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ 9,286,173 $ 4,176,029 $ 1,327,444 $ 1,270,693
Financial futures contracts (622,360) 484,361 (55,732) 51,559
- --------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) of investments $ 8,663,813 $ 4,660,390 $ 1,271,712 $ 1,322,252
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 18,531,087 $ 8,562,403 $ 1,355,999 $ 1,290,640
- --------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 50,048,614 $ 24,574,945 $ 3,585,153 $ 3,314,383
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
62
<PAGE>
EV Municipals Portfolios as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended September 30, 1997
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets California Florida Massachusetts Mississippi
Portfolio Portfolio Portfolio Portfolio
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 19,859,806 $ 31,305,979 $ 15,319,434 $ 1,336,230
Net realized gain on investments 5,306,120 7,793,553 2,120,143 183,405
Net change in unrealized appreciation
(depreciation) of investments 11,259,842 (1,309,893) 6,805,812 719,054
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 36,425,768 $ 37,789,639 $ 24,245,389 $ 2,238,689
- -----------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 16,666,266 $ 35,743,906 $ 12,526,247 $ 1,197,391
Withdrawals (96,678,214) (183,706,131) (64,226,111) (6,588,894)
- -----------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from capital
transactions $(80,011,948) $(147,962,225) $ (51,699,864) $ (5,391,503)
- -----------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $(43,586,180) $(110,172,586) $ (27,454,475) $ (3,152,814)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
At beginning of year $370,590,195 $ 624,374,001 $ 281,129,236 $ 25,279,561
- -----------------------------------------------------------------------------------------------------------------------------------
At end of year $327,004,015 $ 514,201,415 $ 253,674,761 $ 22,126,747
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
63
<PAGE>
EV Municipals Portfolios as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended September 30, 1997
<TABLE>
<CAPTION>
New York Ohio Rhode Island West Virginia
Increase (Decrease) in Net Assets Portfolio Portfolio Portfolio Portfolio
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 31,517,527 $ 16,012,542 $ 2,229,154 $ 2,023,743
Net realized gain (loss) on investments 9,867,274 3,902,013 84,287 (31,612)
Net change in unrealized appreciation of
investments 8,663,813 4,660,390 1,271,712 1,322,252
- -------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 50,048,614 $ 24,574,945 $ 3,585,153 $ 3,314,383
- -------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 25,819,897 $ 10,983,777 $ 4,387,108 $ 1,406,737
Withdrawals (152,794,517) (56,960,953) (9,921,791) (10,718,916)
- -------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from capital
transactions $(126,974,620) $(45,977,176) $(5,534,683) $ (9,312,179)
- -------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $ (76,926,006) $(21,402,231) $(1,949,530) $ (5,997,796)
- -------------------------------------------------------------------------------------------------------------------------
Net Assets
- -------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 604,529,520 $292,670,816 $42,167,179 $ 39,500,791
- -------------------------------------------------------------------------------------------------------------------------
At end of year $ 527,603,514 $271,268,585 $40,217,649 $ 33,502,995
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
64
<PAGE>
EV Municipals Portfolios as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended September 30, 1996
<TABLE>
<CAPTION>
California Florida Massachusetts Mississippi
Increase (Decrease) in Net Assets Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 23,204,844 $ 38,410,360 $ 16,966,016 $ 1,582,970
Net realized gain on investments 4,542,939 5,705,251 3,096,278 306,294
Change in unrealized appreciation
(depreciation) of investments 1,456,651 (543,323) (1,167,330) 146,094
- ------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 29,204,434 $ 43,572,288 $ 18,894,964 $ 2,035,358
- ------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 20,317,562 $ 35,149,563 $ 16,336,133 $ 1,623,996
Withdrawals (89,601,939) (166,550,986) (56,272,108) (7,372,753)
- ------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from capital
transactions $(69,284,377) $(131,401,423) $(39,935,975) $ (5,748,757)
- ------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $(40,079,943) $ (87,829,135) $(21,041,011) $ (3,713,399)
- ------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------
At beginning of year $410,670,138 $ 712,203,136 $302,170,247 $ 28,992,960
- ------------------------------------------------------------------------------------------------------------------------
At end of year $370,590,195 $ 624,374,001 $281,129,236 $ 25,279,561
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
65
<PAGE>
EV Municipals Portfolios as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended September 30, 1996
<TABLE>
<CAPTION>
New York Ohio Rhode Island West Virginia
Increase (Decrease) in Net Assets Portfolio Portfolio Portfolio Portfolio
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 35,862,171 $ 17,538,829 $ 2,430,974 $ 2,162,188
Net realized gain (loss) on investments 4,055,362 2,125,592 (126,962) (127,774)
Net change in unrealized appreciation of
investments 2,603,892 281,886 709,572 798,750
- --------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 42,521,425 $ 19,946,307 $ 3,013,584 $ 2,833,164
- --------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 36,583,799 $ 11,748,362 $ 5,557,065 $ 3,463,423
Withdrawals (127,312,013) (58,040,501) (9,309,437) (7,630,857)
- --------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from capital
transactions $(90,728,214) $ (46,292,139) $ (3,752,372) $ (4,167,434)
- --------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $(48,206,789) $ (26,345,832) $ (738,788) $ (1,334,270)
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 652,736,309 $ 319,016,648 $ 42,905,967 $ 40,835,061
- --------------------------------------------------------------------------------------------------------------------------------
At end of year $ 604,529,520 $ 292,670,816 $ 42,167,179 $ 39,500,791
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
66
<PAGE>
EV Municipals Portfolios as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
California Portfolio
------------------------------------------------------------
Year Ended
------------------------------------------------------------
September 30, March 31,
- ---------------------------------------------------------------------------------------------
1997 1996 1995 1994*** 1994**
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ratios to average
daily net assets
- ---------------------------------------------------------------------------------------------
Net expenses/(1)/ 0.57% 0.57% 0.59% 0.57%+ 0.55%+
Net expenses, after
custodian fee reduction 0.56% 0.56% 0.58% -- --
Net investment income 5.76% 5.93% 6.22% 6.09%+ 5.72%+
Portfolio Turnover 12% 14% 58% 40% 91%
- ---------------------------------------------------------------------------------------------
Net assets, end of period
(000s omitted) $327,004 $370,590 $410,763 $445,131 $467,259
- ---------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Florida Portfolio
------------------------------------------------------------
Year Ended
------------------------------------------------------------
September 30,
- ----------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993*
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ratios to average
daily net assets
- ---------------------------------------------------------------------------------------------
Net expenses/(1)/ 0.52% 0.52% 0.55% 0.48% 0.47%+
Net expenses, after
custodian fee reduction 0.48% 0.49% 0.52% -- --
Net investment income 5.53% 5.67% 5.94% 5.65% 5.53%+
Portfolio Turnover 54% 51% 61% 57% 55%
- ---------------------------------------------------------------------------------------------
Net assets, end of period
(000s omitted) $ 514,201 $624,374 $712,203 $772,123 $772,422
- ---------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, February 1, 1993, to September
30, 1993.
** For the period from the start of business, May 3, 1993, to March 31,
1994.
*** For the six months ended September 30, 1994. The Portfolio changed its
fiscal year from March 31 to September 30, effective September 30, 1994.
/(1)/ The expense ratios for the years ended September 30, 1995 and thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Portfolio to increase its expense ratio
by the effect of any expense offset arrangements with its service
providers. The expense ratios for the prior periods have not been
adjusted to reflect this change.
See notes to financial statements
67
<PAGE>
EV Municipals Portfolios as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Massachusetts Portfolio Mississippi Portfolio
---------------------------------------------- ------------------------------------------------
Year Ended September 30, Year Ended September 30,
---------------------------------------------- ------------------------------------------------
1997 1996 1995 1994 1993* 1997 1996 1995 1994 1993**
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ratios to average
daily net assets++
- ------------------------------------------------------------------------------------------------------------------------------------
Net expenses/(1)/ 0.53% 0.55% 0.56% 0.51% 0.49%+ 0.38% 0.29% 0.27% 0.05% 0.00%+
Net expenses, after
custodian fee reduction 0.52% 0.54% 0.53% -- -- 0.37% 0.26% 0.23% -- --
Net investment income 5.75% 5.77% 6.00% 5.74% 5.72%+ 5.59% 5.77% 5.97% 5.67% 4.49%+
Portfolio Turnover 35% 51% 87% 53% 38% 6% 12% 52% 38% 11%
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(000s omitted) $253,675 $281,129 $302,170 $308,540 $290,613 $22,127 $25,280 $28,993 $29,477 $11,233
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
++ The operating expenses of the Mississippi Portfolio reflect a reduction of
the Investment Adviser fee, and/or an allocation of expenses to the
Investment Adviser. Had such actions not been taken, the ratios would have
been as follows:
<TABLE>
<S> <C> <C> <C> <C>
Expenses/(1)/ 0.40% 0.39% 0.32% 0.25%+
Expenses, after custodian fee reduction 0.37% 0.35% -- --
Net investment income 5.66% 5.85% 5.40% 4.24%+
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, February 1, 1993, to September
30, 1993.
** For the period from the start of business, June 11, 1993, to September
30, 1993.
/(1)/ The expense ratios for the years ended September 30, 1995 and thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Portfolio to increase its expense ratio
by the effect of any expense offset arrangements with its service
providers. The expense ratios for the prior periods have not been adjusted
to reflect this change.
See notes to financial statements
68
<PAGE>
EV Municipals Portfolios as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
New York Portfolio
----------------------------------------------------------
Year Ended September 30,
----------------------------------------------------------
1997 1996 1995 1994 1993**
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ratios to average
daily net assets
- --------------------------------------------------------------------------------------------------
Net expenses/(1)/ 0.57% 0.52% 0.54% 0.48% 0.48%+
Net expenses, after
custodian fee reduction 0.57% 0.49% 0.51% -- --
Net investment income 5.60% 5.64% 5.97% 5.70% 5.64%+
Portfolio Turnover 44% 47% 55% 47% 37%
- --------------------------------------------------------------------------------------------------
Net assets, end of period (000s
omitted) $527,604 $604,530 $652,736 $655,647 $648,807
- --------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Ohio Portfolio
-----------------------------------------------------------
Year Ended September 30,
-----------------------------------------------------------
1997 1996 1995 1994 1993*
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ratios to average
daily net assets
- --------------------------------------------------------------------------------------------------
Net expenses/(1)/ 0.56% 0.57% 0.57% 0.51% 0.49%+
Net expenses, after
custodian fee reduction 0.55% 0.56% 0.55% -- --
Net investment income 5.70% 5.69% 5.80% 5.61% 5.61%+
Portfolio Turnover 30% 35% 51% 31% 24%
Net assets, end of period (000s
omitted) $271,269 $292,671 $319,017 $324,412 $298,092
- --------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, February 1, 1993, to September
30, 1993.
** For the period from the start of business, June 11, 1993, to September
30, 1993.
/(1)/ The expense ratios for the years ended September 30, 1995 and thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Portfolios to increase their expense
ratios by the effect of any expense offset arrangements with their
service providers. The expense ratios for the prior periods have not been
adjusted to reflect this change.
See notes to financial statements
69
<PAGE>
EV Municipals Portfolios as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Rhode Island Portfolio
--------------------------------------------------------
Year Ended September 30,
--------------------------------------------------------
1997 1996 1995 1994 1993*
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ratios to average
daily net assets+++
- ----------------------------------------------------------------------------------------------------------
Net expenses (1) 0.27% 0.27% 0.29% 0.12% 0.00%+
Net expenses, after
custodian fee reduction 0.23% 0.24% 0.25% -- --
Net investment income 5.54% 5.69% 5.96% 5.64% 4.86%+
Portfolio Turnover 39% 25% 42% 42% 23%
- ----------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) $40,218 $42,167 $42,906 $38,120 $16,981
- ----------------------------------------------------------------------------------------------------------
</TABLE>
+++ The operating expenses of the Portfolios may reflect a reduction of the
investment adviser fee and/or an allocation of expenses to the Investment
Adviser. Had such actions not been taken, the ratios would have been as
follows:
<TABLE>
<S> <C> <C> <C> <C> <C>
Expenses (1) 0.39% 0.40% 0.41% 0.33% 0.26%+
Expenses after custodian fee reduction 0.35% 0.37% 0.37% -- --
Net investment income 5.42% 5.56% 5.84% 5.43% 4.60%+
- ----------------------------------------------------------------------------------------------------------
<CAPTION>
West Virginia Portfolio
-------------------------------------------------------
Year Ended September 30,
-------------------------------------------------------
1997 1996 1995 1994 1993**
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ratios to average
daily net assets+++
- ----------------------------------------------------------------------------------------------------------
Net expenses/(1)/ 0.38% 0.42% 0.31% 0.10% 0.00%+
Net expenses, after
custodian fee reduction 0.36% 0.38% 0.29% -- --
Net investment income 5.44% 5.41% 5.81% 5.52% 4.50%+
Portfolio Turnover 24% 43% 19% 39% 19%
- ----------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) $ 33,503 $39,501 $40,835 $40,473 $24,760
- ----------------------------------------------------------------------------------------------------------
+++ The operating expenses of the Portfolios may reflect a reduction of the
investment adviser fee and/or an allocation of expenses to the Investment
Adviser. Had such actions not been taken, the ratios would have been as
follows:
Expenses (1) 0.39% 0.33% 0.21%+
Expenses after custodian fee reduction 0.37% -- --
Net investment income 5.73% 5.29% 4.30%+
- ----------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, June 11, 1993, to September 30,
1993.
** For the period from the start of business, February 1, 1993, to
September 30, 1993.
/(1)/ The expense ratios for the years ended September 30, 1995 and thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Portfolios to increase their expense
ratios by the effect of any expense offset arrangements with their service
providers. The expense ratios for the prior periods have not been adjusted
to reflect this change.
See notes to financial statements
70
<PAGE>
EV Municipals Portfolios as of September 30, 1997
NOTES TO FINANCIAL STATEMENTS
1 Significant Accounting Policies
- --------------------------------------------------------------------------------
California Municipals Portfolio (California Portfolio), Florida Municipals
Portfolio (Florida Portfolio), Massachusetts Municipals Portfolio
(Massachusetts Portfolio), Mississippi Municipals Portfolio (Mississippi
Portfolio), New York Municipals Portfolio (New York Portfolio), Ohio
Municipals Portfolio (Ohio Portfolio), Rhode Island Municipals Portfolio
(Rhode Island Portfolio) and West Virginia Municipals Portfolio (West
Virginia Portfolio), collectively the Portfolios, are registered under the
Investment Company Act of 1940, as amended, as non-diversified, open-end
management investment companies. The Portfolios 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 consistently followed by the
Portfolios in the preparation of their financial statements. The policies are
in conformity 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 and options
on futures contracts listed on commodity exchanges are valued at closing
settlement prices. Over-the-counter options on futures contracts are normally
valued at the mean between the latest bid and asked 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
Portfolios' net taxable (if any) and tax-exempt investment income, net
realized capital gains, and any other items of income, gain, loss, deduction
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 the 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 Options on Financial Futures Contracts -- Upon the purchase of a put option
on a financial futures contract by a Portfolio, the premium paid is recorded
as an investment, the value of which is marked-to-market daily. When a
purchased option expires, a Portfolio will realize a loss in the amount of
the cost of the option. When a Portfolio enters into a closing sales
transaction, the Portfolio will realize a gain or loss depending on whether
the sales proceeds from the closing sale transaction are greater or less than
the cost of the option. When a Portfolio exercises a put option, settlement
is made in cash. The risk associated with purchasing put options is limited
to the premium originally paid.
G When-issued and Delayed Delivery Transactions -- The Portfolios may engage
in when-issued or delayed delivery transactions. The Portfolios record
when-issued securities on trade date and maintain security positions such
that sufficient liquid assets will be
71
<PAGE>
EV Municipals Portfolios as of September 30, 1997
NOTES TO FINANCIAL STATEMENTS CONT'D
available to make payments 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.
H Other -- Investment transactions are accounted for on a trade date basis.
I Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expense during the reporting period. Actual results could
differ from those estimates.
J Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian of the Portfolios. Pursuant to the respective custodian agreements,
IBT receives a fee reduced by credits which are determined based on the
average daily cash balance each Portfolio maintains with IBT. All significant
credit balances used to reduce the Portfolios' custodian fees are reflected
as a reduction of operating expenses in the statements of operations.
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 sale of
securities). For the year ended September 30, 1997, each Portfolio paid
advisory fees as follows:
<TABLE>
<CAPTION>
Portfolio Amount Effective Rate*
-----------------------------------------------------------------------------
<S> <C> <C>
California $ 1,687,887 0.49%
Florida 2,593,352 0.46%
Massachusetts 1,203,548 0.45%
Mississippi 44,507 0.19%
New York 2,603,611 0.46%
Ohio 1,272,425 0.45%
Rhode Island 96,316 0.12%
West Virginia 86,026 0.23%
</TABLE>
* Advisory fees paid as a percentage of average daily net assets.
To enhance the net income of the Rhode Island Portfolio, BMR made a reduction
of its fee in the amount of $47,940. 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.
Certain of the officers and Trustees of the Portfolios are officers and
directors/trustees of the above organizations. Trustees of the Portfolios
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 year ended
September 30, 1997, no significant amounts have been deferred.
72
<PAGE>
EV Municipals Portfolios as of September 30, 1997
NOTES TO FINANCIAL STATEMENTS CONT'D
3 Investments
- --------------------------------------------------------------------------------
Purchases and sales of investments, other than U.S. Government securities,
purchased option transactions and short-term obligations, for the year ended
September 30, 1997 were as follows:
<TABLE>
<CAPTION>
California Portfolio
---------------------------------------------------------------------
<S> <C>
Purchases $ 42,098,487
Sales 101,434,811
Florida Portfolio
---------------------------------------------------------------------
Purchases $ 292,725,029
Sales 409,405,531
Massachusetts Portfolio
---------------------------------------------------------------------
Purchases $ 91,051,927
Sales 118,236,663
Mississippi Portfolio
---------------------------------------------------------------------
Purchases $ 1,398,895
Sales 5,900,535
New York Portfolio
---------------------------------------------------------------------
Purchases $ 247,761,203
Sales 339,715,460
Ohio Portfolio
---------------------------------------------------------------------
Purchases $ 82,801,321
Sales 108,948,062
Rhode Island Portfolio
---------------------------------------------------------------------
Purchases $ 15,377,491
Sales 17,904,376
West Virginia Portfolio
---------------------------------------------------------------------
Purchases $ 8,624,072
Sales 15,389,791
</TABLE>
4 Federal Income Tax Basis of Investments
- -------------------------------------------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned by each Portfolio at September 30, 1997, as computed on a
federal income tax basis, are as follows:
<TABLE>
<CAPTION>
California Portfolio
---------------------------------------------------------------------
<S> <C>
Aggregate Cost $ 288,296,835
---------------------------------------------------------------------
Gross unrealized appreciation $ 37,425,099
Gross unrealized depreciation (189,360)
---------------------------------------------------------------------
Net unrealized appreciation $ 37,235,739
---------------------------------------------------------------------
Florida Portfolio
---------------------------------------------------------------------
Aggregate Cost $ 462,068,417
---------------------------------------------------------------------
Gross unrealized appreciation $ 31,954,789
Gross unrealized depreciation --
---------------------------------------------------------------------
Net unrealized appreciation $ 31,954,789
---------------------------------------------------------------------
Massachusetts Portfolio
Aggregate Cost $ 238,584,146
---------------------------------------------------------------------
Gross unrealized appreciation $ 23,368,596
Gross unrealized depreciation (77,042)
---------------------------------------------------------------------
Net unrealized appreciation $ 23,291,554
---------------------------------------------------------------------
Mississippi Portfolio
---------------------------------------------------------------------
Aggregate Cost $ 19,751,773
---------------------------------------------------------------------
Gross unrealized appreciation $ 2,027,684
Gross unrealized depreciation --
---------------------------------------------------------------------
Net unrealized appreciation $ 2,027,684
---------------------------------------------------------------------
New York Portfolio
---------------------------------------------------------------------
Aggregate Cost $ 481,331,084
---------------------------------------------------------------------
Gross unrealized appreciation $ 43,779,548
Gross unrealized depreciation (262,215)
---------------------------------------------------------------------
Net unrealized appreciation $ 43,517,333
---------------------------------------------------------------------
</TABLE>
73
<PAGE>
EV Municipals Portfolios as of September 30, 1997
NOTES TO FINANCIAL STATEMENTS CONT'D
<TABLE>
<CAPTION>
Ohio Portfolio
----------------------------------------------------------------------
<S> <C>
Aggregate Cost $ 252,173,553
----------------------------------------------------------------------
Gross unrealized appreciation $ 16,933,967
Gross unrealized depreciation --
----------------------------------------------------------------------
Net unrealized appreciation $ 16,933,967
----------------------------------------------------------------------
Rhode Island Portfolio
----------------------------------------------------------------------
Aggregate Cost $ 38,164,900
----------------------------------------------------------------------
Gross unrealized appreciation $ 2,093,874
Gross unrealized depreciation (9,623)
----------------------------------------------------------------------
Net unrealized appreciation $ 2,084,251
----------------------------------------------------------------------
West Virginia Portfolio
----------------------------------------------------------------------
Aggregate Cost $ 31,140,556
----------------------------------------------------------------------
Gross unrealized appreciation $ 1,980,371
Gross unrealized depreciation --
----------------------------------------------------------------------
Net unrealized appreciation $ 1,980,371
----------------------------------------------------------------------
</TABLE>
5 Line of Credit
- -------------------------------------------------------------------------------
The Portfolios participate with other portfolios and funds managed by BMR
and EVM and its affiliates in a $120 million unsecured line of credit
agreement with a group of banks. The portfolios may temporarily borrow from
the line of credit to satisfy redemption requests or settle investment
transactions. Interest is charged to each portfolio or fund based on its
borrowings at the bank's adjusted certificate of deposit rate, Eurodollar
rate or federal funds rate. In addition, a fee computed at an annual rate of
0.15% on the daily unused portion of the line of credit is allocated among
the participating portfolios and funds at the end of each quarter. At
September 30, 1997, the California Portfolio, Mississippi Portfolio, New
York Portfolio, Ohio Portfolio, Rhode Island Portfolio, and West Virginia
Portfolio had a balance outstanding pursuant to this line of credit of
$1,529,000, $64,000, $5,940,000, $2,157,000, $749,000 and $1,127,000
respectively. The Portfolios did not have any significant borrowings or
allocated fees during the year ended September 30, 1997.
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 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 September 30,
1997, is as follows:
<TABLE>
<CAPTION>
Futures
Contracts Net
Expiration Unrealized
Portfolio Date Contracts Position Depreciation
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
California 12/97 127 US Treasury Bonds Short $(389,652)
--------------------------------------------------------------------------------------
Massachusetts 12/97 76 US Treasury Bonds Short (233,177)
--------------------------------------------------------------------------------------
Mississippi 12/97 9 US Treasury Bonds Short (27,613)
--------------------------------------------------------------------------------------
New York 12/97 320 US Treasury Bonds Short (981,800)
--------------------------------------------------------------------------------------
Rhode Island 12/97 29 US Treasury Bonds Short (88,975)
--------------------------------------------------------------------------------------
West Virginia 12/97 15 US Treasury Bonds Short (34,305)
--------------------------------------------------------------------------------------
</TABLE>
At September 30, 1997 each Portfolio had sufficient cash and/or securities
to cover margin requirements on open futures contracts.
74
<PAGE>
EV Municipals Portfolios as of September 30, 1997
INDEPENDENT AUDITORS' REPORT
To the Trustees and Investors
of the California Municipals Portfolio, Florida
Municipals Portfolio, Massachusetts Municipals
Portfolio, Mississippi Municipals Portfolio, New
York Municipals Portfolio, Ohio Municipals
Portfolio, Rhode Island Municipals Portfolio, and
West Virginia Municipals Portfolio
- --------------------------------------------------------------------------------
We have audited the accompanying statements of assets and liabilities, including
the portfolio of investments, of the California Municipals Portfolio, Florida
Municipals Portfolio, Massachusetts Municipals Portfolio, Mississippi Municipals
Portfolio, New York Municipals Portfolio, Ohio Municipals Portfolio, Rhode
Island Municipals Portfolio, and West Virginia Municipals Portfolio as of
September 30, 1997, the related statements of operations for the year then
ended, the statements of changes in net assets for the years ended September 30,
1997 and 1996 and the supplementary data for each of the years in the five-year
period ended September 30, 1997. (For the California Municipals Portfolio, the
supplementary data is for each of the years in the four-year period ended
September 30, 1997 and the period from the start of business, May 3, 1993, to
March 31, 1994). These financial statements and supplementary data are the
responsibility of the Portfolio's management. Our responsibility is to express
an opinion on these financial statements and supplementary data based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and supplementary
data are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities held as of
September 30, 1997 by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other audit procedures. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and supplementary data present fairly,
in all material respects, the financial positions of the California Municipals
Portfolio, Florida Municipals Portfolio, Massachusetts Municipals Portfolio,
Mississippi Municipals Portfolio, New York Municipals Portfolio, Ohio Municipals
Portfolio, Rhode Island Municipals Portfolio, and West Virginia Municipals
Portfolio at September 30, 1997, the results of their operations, the changes in
their net assets and their supplementary data for the respective stated period,
in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
November 7, 1997
75
<PAGE>
EV Traditional Municipals Funds as of September 30, 1997
INVESTMENT MANAGEMENT
EV Traditional Municipals Funds
Officers
Thomas J. Fetter
President
James B. Hawkes
Vice President and Trustee
Robert B. MacIntosh
Vice President
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Independent Trustees
Donald R. Dwight
President, Dwight Partners, Inc.
Chairman, Newspapers 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
Formerly Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
Municipals Portfolios
Officers
Thomas J. Fetter
President and Portfolio
Manager of Florida and Ohio
Municipals Portfolios
James B. Hawkes
Vice President and Trustee
Robert B. MacIntosh
Vice President and Portfolio
Manager of Massachusetts
Municipals Portfolio
Nicole Anderes
Vice President and Portfolio
Manager of New York
and Rhode Island
Municipals Portfolios
Timothy T. Browse
Vice President and Portfolio
Manager of West Virginia
Municipals Portfolio
Cynthia J. Clemson
Vice President and Portfolio
Manager of California and
Mississippi Municipals Portfolio
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Independent Trustees
Donald R. Dwight
President, Dwight Partners, Inc.
Chairman, Newspapers 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
Formerly Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
76
<PAGE>
This Page Intentionally Left Blank
<PAGE>
This Page Intentionally Left Blank
<PAGE>
This Page Intentionally Left Blank
<PAGE>
Portfolio Investment Adviser
Boston Management and Research
24 Federal Street
Boston, MA 02110
Fund Administrator
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
200 Clarendon Street
Boston, MA 02116
Transfer Agent
First Data Investor Services Group, Inc.
Attention: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
Independent Auditors
Deloitte & Touche LLP
125 Summer Street
Boston, MA 02110
Eaton Vance Municipals Trust
24 Federal Street
Boston, MA 02110
- --------------------------------------------------------------------------------
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its sales charges and
expenses. Please read the prospectus carefully before you invest or send money.
- --------------------------------------------------------------------------------
T-8CSRC-12/97
