<PAGE>
[LOGO] [GRAPHIC]
Semiannual Report March 31, 2000
EATON VANCE
[GRAPHIC] NATIONAL MUNICIPALS
FUND
[GRAPHIC]
<PAGE>
EATON VANCE NATIONAL MUNICIPALS FUND AS OF MARCH 31, 2000
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INVESTMENT UPDATE
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[PHOTO]
Thomas M. Metzold
Portfolio Manager
INVESTMENT ENVIRONMENT
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- - The past year proved very challenging for bond investors, as a strong
economy led to higher interest rates and a difficult environment for
fixed-income vehicles. The Federal Reserve raised its target Federal Funds
rate for the fifth time in 12 months on March 21, 2000, in an attempt to
reduce the potential for inflation.
- - By early February 2000, however, yields had peaked, as the market began to
rally in reaction to the Fed's continued anti-inflation stance and
increasing volatility in the equity markets. By the end of March, yields
had declined to their lowest levels in six months, with municipal bond
yields equalling Treasury yields.
MANAGEMENT DISCUSSION
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- - Credit quality spreads widened dramatically over the past six months,
especially in the healthcare sector, where changes in reimbursement
significantly affected profitability.
- - Management continued to focus on a "barbell" strategy of balancing lower
coupon bonds for performance with higher coupon bonds for income.
- - Management took advantage of the market's decline by selectively
establishing tax losses to offset possible future gains. The proceeds of
those sales were used to buy bonds with more attractive yields and trading
characteristics.
FUND PERFORMANCE
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The Past Six Months
- - During the six months ended March 31, 2000, the Fund's Class A shares had a
total return of 0.75%. (1) This return resulted from a change in net asset
value (NAV) per share to $10.19 on March 31, 2000 from $10.44 on September
30, 1999, and the reinvestment of $0.320 per share in tax-exempt dividend
income. (2)
- - The Fund's Class B shares had a total return of 0.32% during the period,
(1) the result of a change in NAV per share to $9.51 from $9.74, and the
reinvestment of $0.255 per share in tax-exempt dividend income. (2)
- - The Fund's Class C shares had a total return of 0.39% during the period,
(1) the result of a change in NAV per share to $9.07 from $9.28, and the
reinvestment of $0.239 per share in tax-exempt dividend income. (2)
- - The Fund's Class I shares had a total return of 1.45% during the period,(1)
the result of a change in NAV per share to $9.44 from $9.61, and the
reinvestment of $0.300 per share in tax-exempt dividend income. (2)
- - Based on the most recent distributions and NAVs per share on March 31,
2000, of $10.19 for Class A, $9.51 for Class B, $9.07 for Class C, and
$9.44 for Class I, the distribution rates were 6.28%, 5.42%, 5.31%, and
6.36%, respectively. (3) The distribution rates of Classes A, B, C, and I
are equivalent to taxable rates of 10.40%, 8.97%, 8.79%, and 10.53%,
respectively. (4)
- - The SEC 30-day yields at March 31, 2000 were 6.54%, 5.93%, 5.69%, and
6.10%, respectively, for Classes A, B, C, and I. (5) These yields are
equivalent to taxable rates of 10.83%, 9.82%, 9.42%, and 10.10%,
respectively. (4)
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FUND INFORMATION
AS OF MARCH 31, 2000
<TABLE>
<CAPTION>
PERFORMANCE(5) Class A Class B Class C Class I
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<S> <C> <C> <C> <C>
Average Annual Total Returns (at net asset value)
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One Year -4.60% -5.39% -5.38% N.A.
Five Years 5.99 5.24 5.14 N.A.
Ten Years N.A. 6.46 N.A. N.A.
Life of Fund+ 6.67 6.48 3.91 -1.03
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- -------------------------------------------------------------------------------
One Year -9.16% -9.88% -6.28% N.A.
Five Years 4.97 4.91 5.14 N.A.
Ten Years N.A. 6.46 N.A. N.A.
Life of Fund+ 5.80 6.48 3.91 -1.03
+Inception Dates - Class A: 4/5/94; Class B: 12/19/85; Class C:12/3/93; Class I: 7/1/99
</TABLE>
(1) These returns do not include the 4.75% maximum sales charge for Class A
shares or the applicable contingent deferred sales charge (CDSC) for Class B
shares and Class C shares. (2) A portion of the Fund's income may be subject
to state income tax and/or 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 (NAV). (4) Taxable-equivalent rates
assume maximum 39.6% federal tax rate. A lower rate would result in lower
tax-equivalent figures. (5) 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. (6) Returns are
historical and are calculated by determining the percentage change in NAV
with all distributions reinvested. SEC average annual returns for Class A
reflect the maximum sales charge of 4.75%. Class B returns reflect
applicable CDSC based on the following schedule: 5% - 1st and 2nd years; 4%
- 3rd year; 3% - 4th year; 2% - 5th year; 1% - 6th year. For Class C, one
year return reflects 1% CDSC.
Past performance is no guarantee of future results. Investment return and
principal value may fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
MUTUAL FUND SHARES ARE NOT INSURED BY THE FDIC AND ARE NOT DEPOSITS OR OTHER
OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE SUBJECT
TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL INVESTED.
<PAGE>
EATON VANCE NATIONAL MUNICIPALS FUND AS OF MARCH 31, 2000
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF MARCH 31, 2000
<S> <C>
Assets
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Investment in National Municipals
Portfolio, at value
(identified cost, $1,861,417,393) $1,852,579,724
Receivable for Fund shares sold 1,030,722
Miscellaneous receivable 120,120
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TOTAL ASSETS $1,853,730,566
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Liabilities
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Payable for Fund shares redeemed $ 5,072,929
Dividends payable 4,383,078
Payable to affiliate for Trustees' fees 1,753
Accrued expenses 1,942,489
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TOTAL LIABILITIES $ 11,400,249
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NET ASSETS $1,842,330,317
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Sources of Net Assets
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Paid-in capital $1,876,138,213
Accumulated net realized loss from
Portfolio (computed on the basis
of identified cost) (22,600,349)
Accumulated distributions in excess of
net investment income (2,369,878)
Net unrealized depreciation from
Portfolio (computed on the basis
of identified cost) (8,837,669)
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TOTAL $1,842,330,317
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Class A Shares
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NET ASSETS $ 170,706,953
SHARES OUTSTANDING 16,746,335
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 10.19
MAXIMUM OFFERING PRICE PER SHARE
(100 DIVIDED BY 95.25 of $10.19) $ 10.70
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Class B Shares
- --------------------------------------------------------
NET ASSETS $1,560,528,632
SHARES OUTSTANDING 164,070,504
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 9.51
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Class C Shares
- --------------------------------------------------------
NET ASSETS $ 111,093,741
SHARES OUTSTANDING 12,253,058
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 9.07
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Class I Shares
- --------------------------------------------------------
NET ASSETS $ 991
SHARES OUTSTANDING 105
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 9.44
- --------------------------------------------------------
</TABLE>
On sales of $25,000 or more, the offering price of Class A shares is reduced.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
MARCH 31, 2000
<S> <C>
Investment Income
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Interest allocated from Portfolio $ 68,343,100
Expenses allocated from Portfolio (4,575,931)
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NET INVESTMENT INCOME FROM PORTFOLIO $ 63,767,169
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Expenses
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Trustees fees and expenses $ 2,730
Distribution and service fees
Class A 131,112
Class B 7,686,942
Class C 612,372
Transfer and dividend disbursing agent
fees 698,822
Printing and postage 59,885
Registration fees 39,051
Legal and accounting services 12,277
Custodian fee 2,135
Miscellaneous 93,766
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TOTAL EXPENSES $ 9,339,092
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NET INVESTMENT INCOME $ 54,428,077
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Realized and Unrealized
Gain (Loss) from Portfolio
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Net realized gain (loss) --
Investment transactions (identified
cost basis) $(20,808,632)
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NET REALIZED LOSS $(20,808,632)
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Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $(32,483,220)
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NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $(32,483,220)
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NET REALIZED AND UNREALIZED LOSS $(53,291,852)
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NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 1,136,225
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</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
3
<PAGE>
EATON VANCE NATIONAL MUNICIPALS FUND AS OF MARCH 31, 2000
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INCREASE (DECREASE) MARCH 31, 2000 YEAR ENDED
IN NET ASSETS (UNAUDITED) SEPTEMBER 30, 1999
<S> <C> <C>
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From operations --
Net investment income $ 54,428,077 $ 113,675,295
Net realized gain (loss) (20,808,632) 31,760,687
Net change in unrealized appreciation
(depreciation) (32,483,220) (280,608,083)
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NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS $ 1,136,225 $ (135,172,101)
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Distributions to shareholders --
From net investment income
Class A $ (6,271,603) $ (10,782,875)
Class B (44,534,453) (96,032,463)
Class C (3,288,866) (6,816,227)
Class I (2,840) (3,068)
In excess of net investment income
Class A (3,976) --
Class B -- (642,529)
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TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (54,101,738) $ (114,277,162)
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Transactions in shares of beneficial interest --
Proceeds from sale of shares
Class A $ 51,268,885 $ 132,294,349
Class B 48,834,983 163,062,444
Class C 11,375,168 67,007,386
Class I -- 467,716
Net asset value of shares issued to
shareholders in payment of
distributions declared
Class A 3,023,343 5,807,264
Class B 14,571,918 37,369,476
Class C 1,566,420 4,191,417
Class I -- 2,734
Cost of shares redeemed
Class A (89,126,765) (51,471,895)
Class B (223,848,715) (294,751,646)
Class C (38,415,474) (38,042,760)
Class I (454,524) --
Contingent deferred sales charges
Class B 29,297 --
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NET INCREASE (DECREASE) IN NET ASSETS
FROM FUND SHARE TRANSACTIONS $ (221,175,464) $ 25,936,485
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NET DECREASE IN NET ASSETS $ (274,140,977) $ (223,512,778)
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Net Assets
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At beginning of period $ 2,116,471,294 $ 2,339,984,072
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AT END OF PERIOD $ 1,842,330,317 $ 2,116,471,294
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Accumulated distributions
in excess of net investment
income included in net assets
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AT END OF PERIOD $ (2,369,878) $ (2,696,217)
- ------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
EATON VANCE NATIONAL MUNICIPALS FUND AS OF MARCH 31, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------
SIX MONTHS ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, 2000 ------------------------
(UNAUDITED)(1) 1999 1998
<S> <C> <C> <C>
- ------------------------------------------------------------------------------
Net asset value -- Beginning
of period $ 10.440 $ 11.650 $ 11.260
- ------------------------------------------------------------------------------
Income (loss) from operations
- ------------------------------------------------------------------------------
Net investment income $ 0.320 $ 0.636 $ 0.644
Net realized and unrealized
gain (loss) (0.250) (1.209) 0.398
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TOTAL INCOME (LOSS) FROM
OPERATIONS $ 0.070 $ (0.573) $ 1.042
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Less distributions
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From net investment income $ (0.320) $ (0.637) $ (0.652)
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TOTAL DISTRIBUTIONS $ (0.320) $ (0.637) $ (0.652)
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NET ASSET VALUE -- END OF
PERIOD $ 10.190 $ 10.440 $ 11.650
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TOTAL RETURN(2) 0.75% (5.14)% 9.49%
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Ratios/Supplemental Data
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Net assets, end of period
(000's omitted) $170,707 $211,206 $146,067
Ratios (As a percentage of
average daily net assets):
Expenses(3) 0.70%(4) 0.71% 0.71%
Expenses after custodian
fee reduction(3) 0.70%(4) 0.69% 0.69%
Net investment income 6.34%(4) 5.67% 5.60%
Portfolio Turnover of the
Portfolio 24% 60% 28%
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</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return
is not computed on an annualized basis.
(3) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(4) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
EATON VANCE NATIONAL MUNICIPALS FUND AS OF MARCH 31, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS B
--------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, 2000 ------------------------------------------------------------------
(UNAUDITED)(1) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of period $ 9.740 $10.870 $10.530 $ 9.900 $ 9.800 $ 9.410
- ------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.259 $ 0.508 $ 0.523 $ 0.550 $ 0.557 $ 0.570
Net realized and unrealized
gain (loss) (0.232) (1.126) 0.361 0.634 0.096 0.395
- ------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $ 0.027 $(0.618) $ 0.884 $ 1.184 $ 0.653 $ 0.965
- ------------------------------------------------------------------------------------------------------------------------
Less distributions
- ------------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.257) $(0.508) $(0.531) $(0.554) $(0.553) $ (0.570)
In excess of net investment
income -- (0.004) (0.013) -- -- (0.005)
- ------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.257) $(0.512) $(0.544) $(0.554) $(0.553) $ (0.575)
- ------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $ 9.510 $ 9.740 $10.870 $10.530 $ 9.900 $ 9.800
- ------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(2) 0.32% (5.90)% 8.60% 12.33% 6.84% 10.60%
- ------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(000's omitted) $1,560,529 $1,764,616 $2,071,078 $2,040,626 $2,101,632 $2,191,240
Ratios (As a percentage of
average daily net assets):
Expenses(3) 1.51%(4) 1.53% 1.53% 1.60% 1.55% 1.53%
Expenses after custodian
fee reduction(3) 1.51%(4) 1.51% 1.51% 1.60% 1.54% 1.52%
Net investment income 5.52%(4) 4.86% 4.87% 5.45% 5.62% 6.00%
Portfolio Turnover of the
Portfolio 24% 60% 28% 17% 19% 54%
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return
is not computed on an annualized basis.
(3) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(4) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
EATON VANCE NATIONAL MUNICIPALS FUND AS OF MARCH 31, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS C
--------------------------------------------
SIX MONTHS ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, 2000 ------------------------
(UNAUDITED)(1) 1999 1998
<S> <C> <C> <C>
- ------------------------------------------------------------------------------
Net asset value -- Beginning
of period $ 9.280 $ 10.350 $ 10.010
- ------------------------------------------------------------------------------
Income (loss) from operations
- ------------------------------------------------------------------------------
Net investment income $ 0.245 $ 0.482 $ 0.493
Net realized and unrealized
gain (loss) (0.214) (1.073) 0.349
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TOTAL INCOME (LOSS) FROM
OPERATIONS $ 0.031 $ (0.591) $ 0.842
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Less distributions
- ------------------------------------------------------------------------------
From net investment income $ (0.241) $ (0.479) $ (0.502)
- ------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.241) $ (0.479) $ (0.502)
- ------------------------------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $ 9.070 $ 9.280 $ 10.350
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TOTAL RETURN(2) 0.39% (5.92)% 8.59%
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Ratios/Supplemental Data
- ------------------------------------------------------------------------------
Net assets, end of period
(000's omitted) $111,094 $140,182 $122,839
Ratios (As a percentage of
average daily net assets):
Expenses(3) 1.57%(4) 1.54% 1.54%
Expenses after custodian
fee reduction(3) 1.57%(4) 1.52% 1.52%
Net investment income 5.46%(4) 4.84% 4.83%
Portfolio Turnover of the
Portfolio 24% 60% 28%
- ------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return
is not computed on an annualized basis.
(3) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(4) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
EATON VANCE NATIONAL MUNICIPALS FUND AS OF MARCH 31, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS I
-----------------------------------------
SIX MONTHS ENDED
MARCH 31, 2000 PERIOD ENDED
(UNAUDITED)(1) SEPTEMBER 30, 1999(2)
<S> <C> <C>
- ---------------------------------------------------------------------------
Net asset value -- Beginning
of period $ 9.610 $10.000
- ---------------------------------------------------------------------------
Income (loss) from operations
- ---------------------------------------------------------------------------
Net investment income $ 0.294 $ 0.149
Net realized and unrealized
loss (0.164) (0.390)
- ---------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $ 0.130 $(0.241)
- ---------------------------------------------------------------------------
Less distributions
- ---------------------------------------------------------------------------
From net investment income $(0.300) $(0.149)
- ---------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.300) $(0.149)
- ---------------------------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $ 9.440 $ 9.610
- ---------------------------------------------------------------------------
TOTAL RETURN(3) 1.45% (2.44)%
- ---------------------------------------------------------------------------
Ratios/Supplemental Data
- ---------------------------------------------------------------------------
Net assets, end of period
(000's omitted) $ 1 $ 468
Ratios (As a percentage of
average daily net assets):
Expenses(4) 0.53%(5) 0.55%(5)
Expenses after custodian
fee reduction(4) 0.53%(5) 0.53%(5)
Net investment income 6.25%(5) 6.12%(5)
Portfolio Turnover of the
Portfolio 24% 60%
- ---------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) For the period from the commencement of offering of Class I shares,
July 1, 1999 to September 30, 1999.
(3) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return
is not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
EATON VANCE NATIONAL MUNICIPALS FUND AS OF MARCH 31, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1 Significant Accounting Policies
- -------------------------------------------
Eaton Vance National Municipals Fund (the Fund) is a diversified series of
Eaton Vance Municipals Trust (the Trust). The Trust is an entity of the type
commonly known as a Massachusetts business trust and is registered under the
Investment Company Act of 1940, as amended, as an open-end management
investment company. The Fund offers four classes of shares. Class A shares
are generally sold subject to a sales charge imposed at time of purchase.
Class B and Class C shares are sold at net asset value and are generally
subject to a contingent deferred sales charge (see Note 6). Class I shares
are sold at net asset value. Each class represents a pro rata interest in the
Fund, but votes separately on class-specific matters and (as noted below) is
subject to different expenses. Realized and unrealized gains and losses are
allocated daily to each class of shares based on the relative net assets of
each class to the total net assets of the Fund. Net investment income, other
than class specific expenses, is allocated daily to each class of shares
based upon the ratio of the value of each class' paid shares to the total
value of all paid shares. Each class of shares differs in its distribution
plan and certain other class specific expenses. The Fund invests all of its
investable assets in interests in National Municipals Portfolio (the
Portfolio), a New York trust, having the same investment objective as the
Fund. The value of the Fund's investment in the Portfolio reflects the Fund's
proportionate interest in the net assets of the Portfolio (99.9% at
March 31, 2000). The performance of the Fund is directly affected by the
performance of the Portfolio. The financial statements of the Portfolio,
including the portfolio of investments, are included elsewhere in this report
and should be read in conjunction with the Fund's financial statements.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
A Investment Valuation -- Valuation of securities by the Portfolio is discussed
in Note 1A of the Portfolio's Notes to Financial Statements which are
included elsewhere in this report.
B Income -- The Fund's net investment income consists of the Fund's pro-rata
share of the net investment income of the Portfolio, less all actual and
accrued expenses of the Fund determined in accordance with generally accepted
accounting principles.
C Federal Taxes -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders each year all of its taxable, if any, and
tax-exempt income, including any net realized gain on investments.
Accordingly, no provision for federal income or excise tax is necessary. At
September 30, 1999, the Fund, for federal income tax purposes, had a capital
loss carryover of $1,571,525 which will reduce the taxable income arising
from future net realized gains on investments, 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
relieve the Fund of any liability for federal income or excise tax. A portion
of such capital loss carryover was acquired through the Fund Reorganization
and may be subject to certain limitations. Such capital loss carryover will
expire on September 30, 2005. Dividends paid by the Fund from net tax-exempt
interest on municipal bonds allocated from the Portfolio are not includable
by shareholders as gross income for federal income tax purposes because the
Fund and Portfolio intend to meet certain requirements of the Internal
Revenue Code applicable to regulated investment companies which will enable
the Fund 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 Use of Estimates -- The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of income and expense during the reporting period. Actual results could
differ from those estimates.
E Other -- Investment transactions are accounted for on a trade-date basis.
F Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
to the Fund and the Portfolio. Pursuant to the custodian agreement, IBT
receives a fee reduced by credits which are determined based on the average
daily cash balances the Fund or the Portfolio maintains with IBT. All
significant credit balances used to reduce the Fund's custodian fees are
reported as a reduction of total expenses on the Statement of Operations.
G Interim Financial Statements -- The interim financial statements relating to
March 31, 2000 and for the six months then ended have not been audited by
independent certified public accountants, but in the opinion of the Fund's
management reflect all adjustments, consisting only of normal recurring
adjustments, necessary for the fair presentation of the financial statements.
9
<PAGE>
EATON VANCE NATIONAL MUNICIPALS FUND AS OF MARCH 31, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
2 Distributions to Shareholders
- -------------------------------------------
The net income of the Fund is determined daily and substantially all of the
net income so determined is declared as a dividend to shareholders of record
at the time of declaration. Distributions are paid monthly. Distributions of
allocated realized gains, if any, are made at least annually. Shareholders
may reinvest capital gain distributions in additional shares of the Fund at
the net asset value as of the ex-dividend date. Distributions are paid in the
form of additional shares or, at the election of the shareholder, in cash.
The Fund distinguishes between distributions on a tax basis and a financial
reporting basis. Generally accepted accounting principles require that only
distributions in excess of tax basis earnings and profits be reported in the
financial statements as a return of capital. Differences in the recognition
or classification of income between the financial statements and tax earnings
and profits which result in temporary over-distributions for financial
statement purposes are classified as distributions in excess of net
investment income or accumulated net realized gains. Permanent differences
between book and tax accounting relating to distributions are reclassified to
paid-in capital.
3 Shares of Beneficial Interest
- -------------------------------------------
The Fund's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par
value). Such shares may be issued in a number of different series (such as
the Fund) and classes. Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MARCH 31, 2000 YEAR ENDED
CLASS A (UNAUDITED) SEPTEMBER 30, 1999
<S> <C> <C>
---------------------------------------------------------------------------------
Sales 5,107,318 11,806,517
Issued to shareholders electing to
receive payments of distributions in
Fund shares 301,055 521,090
Redemptions (8,889,908) (4,636,351)
---------------------------------------------------------------------------------
NET INCREASE (DECREASE) (3,481,535) 7,691,256
---------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED
MARCH 31, 2000 YEAR ENDED
CLASS B (UNAUDITED) SEPTEMBER 30, 1999
<S> <C> <C>
---------------------------------------------------------------------------------
Sales 5,206,697 15,476,801
Issued to shareholders electing to
receive payments of distributions in
Fund shares 1,551,419 3,573,074
Redemptions (23,867,607) (28,384,309)
---------------------------------------------------------------------------------
NET DECREASE (17,109,491) (9,334,434)
---------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED
MARCH 31, 2000 YEAR ENDED
CLASS C (UNAUDITED) SEPTEMBER 30, 1999
<S> <C> <C>
---------------------------------------------------------------------------------
Sales 1,270,105 6,674,087
Issued to shareholders electing to
receive payments of distributions in
Fund shares 175,319 421,840
Redemptions (4,293,816) (3,859,279)
---------------------------------------------------------------------------------
NET INCREASE (DECREASE) (2,848,392) 3,236,648
---------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED
MARCH 31, 2000 PERIOD ENDED
CLASS I (UNAUDITED) SEPTEMBER 30, 1999(1)
<S> <C> <C>
---------------------------------------------------------------------------------
Sales -- 48,369
Issued to shareholders electing to
receive payments of distributions in
Fund shares -- 284
Redemptions (48,548) --
---------------------------------------------------------------------------------
NET INCREASE (DECREASE) (48,548) 48,653
---------------------------------------------------------------------------------
</TABLE>
(1) For the period from the commencement of offering of Class I shares,
July 1, 1999 to September 30, 1999.
4 Investment Adviser Fee and Other Transactions with Affiliates
- -------------------------------------------
Eaton Vance Management (EVM) serves as the Administrator of the Fund, but
receives no compensation. The Portfolio has engaged Boston Management and
Research (BMR), a subsidiary of EVM, to render investment advisory services.
See Note 2 of the Portfolio's Notes to Financial Statements which are
included elsewhere in this report. Except as to Trustees of the Fund and the
Portfolio who are not members of EVM's or BMR's organization, officers and
Trustees receive remuneration for their services to the Fund out of the
investment adviser fee earned by BMR. The Fund was informed that Eaton Vance
Distributors, Inc. (EVD), a subsidiary of EVM and the Fund's principal
underwriter, received $16,563 as its portion of the sales charge on sales of
Class A shares for the six months ended March 31, 2000.
10
<PAGE>
EATON VANCE NATIONAL MUNICIPALS FUND AS OF MARCH 31, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
Certain officers and Trustees of the Fund and of the Portfolio are officers
of the above organizations.
5 Distribution and Service Plans
- -------------------------------------------
The Fund has in effect distribution plans, for Class B (Class B Plan) and
Class C (Class C Plan) pursuant to Rule 12b-1 under the Investment Company
Act of 1940 and a service plan (Class A Plan) (collectively, the Plans). The
Class B and Class C Plans require the Fund to pay EVD amounts equal to 1/365
of 0.75% of the Fund's average daily net assets attributable to Class B and
Class C shares for providing ongoing distribution services and facilities to
the Fund. The Fund will automatically discontinue payments to EVD during any
period in which there are no outstanding Uncovered Distribution Charges,
which are equivalent to the sum of (i) 5% and 6.25% of the aggregate amount
received by the Fund for the Class B and Class C shares sold, respectively,
plus (ii) interest calculated by applying the rate of 1% over the prevailing
prime rate to the outstanding balance of Uncovered Distribution Charges of
EVD of each respective class reduced by the aggregate amount of contingent
deferred sales charges (see Note 6) and daily amounts theretofore paid to EVD
by each respective class. The Fund paid or accrued $6,009,598 and $459,279
for Class B, and Class C shares, respectively, to or payable to EVD for the
six months ended March 31, 2000, representing 0.74% and 0.75% (annualized) of
the average daily net assets for Class B and Class C shares, respectively. At
March 31, 2000, the amount of Uncovered Distribution Charges EVD calculated
under the Plans was approximately $14,800,000 for Class C shares. There were
no Uncovered Distribution Charges for Class B shares at March 31, 2000.
The Plans authorize the Fund to make payments of service fees to EVD,
investment dealers and other persons in amounts not exceeding 0.25% of the
Fund's average daily net assets attributable to Class A, Class B, and
Class C shares for each fiscal year. The Trustees initially implemented the
Plans by authorizing the Fund to make quarterly payments of service fees to
EVD and investment dealers equal to 0.25% per annum of the Fund's average
daily net assets attributable to Class A and Class B shares based on the
value of Fund shares sold by such persons and remaining outstanding for at
least one year. On October 4, 1999, the Trustees approved service fee
payments equal to 0.25% per annum of the Trust's average daily net assets
attributable to Class A and Class B shares for any fiscal year on shares of
the Trust sold on or after October 12, 1999. The Class C Plan permits the
fund to make monthly payments of service fees in amounts not expected to
exceed 0.25% of the Fund's average daily net assets attributable to Class C
shares for any fiscal year. Service fee payments will be made for personal
services and/or the maintenance of shareholder accounts. Service fees are
separate and distinct from the sales commissions and distribution fees
payable by the Fund to EVD, and, as such are not subject to automatic
discontinuance when there are no outstanding Uncovered Distribution Charges
of EVD. Service fee payments for the six months ended March 31, 2000 amounted
to $131,112, $1,677,344, and $153,093 for Class A, Class B, and Class C
shares, respectively.
6 Contingent Deferred Sales Charge
- -------------------------------------------
A contingent deferred sales charge (CDSC) generally is imposed on redemptions
of Class B shares made within six years of purchase and on redemptions of
Class C shares made within one year of purchase. Generally, the CDSC is based
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. Class B CDSC is imposed at declining rates
that begin at 5% in the case of redemptions in the first and second year
after purchase, declining one percentage point each subsequent year. Class C
shares will be subject to a 1% CDSC if redeemed within one year of purchase.
No CDSC is levied on shares which have been sold to EVM or its affiliates or
to their respective employees or clients and may be waived under certain
other limited conditions. CDSC charges are paid to EVD to reduce the amount
of Uncovered Distribution Charges calculated under each Fund's Distribution
Plan (see Note 5). CDSC charges received when no Uncovered Distribution
Charges exist will be credited to the Fund. EVD received approximately
$33,000 of CDSC paid by shareholders for Class C shares for the six months
ended March 31, 2000. EVD also received approximately $1,273,000 of CDSC paid
by Class B shareholders of which $29,297 was paid directly to the Fund for
days when no Uncovered Distribution Charges existed.
7 Investment Transactions
- -------------------------------------------
Increases and decreases in the Fund's investment in the National Municipals
Portfolio aggregated $112,769,634 and $396,210,017, respectively, for the six
months ended March 31, 2000.
11
<PAGE>
NATIONAL MUNICIPALS PORTFOLIO AS OF MARCH 31, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 97.9%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Assisted Living -- 5.6%
- ---------------------------------------------------------------------------
$ 6,035 Arizona Health Facilities Authority,
(Care Institute, Inc. - Mesa),
7.625%, 1/1/26 $ 5,490,577
17,070 Bell County, TX, Health Facilities
Authority, (Care Institute, Inc.-Texas),
9.00%, 11/1/24 18,595,546
3,060 Chester, PA, IDA, (Senior LifeChoice of
Kimberton), (AMT), 8.50%, 9/1/25 3,279,555
4,935 Chester, PA, IDA, (Senior LifeChoice of
Paoli, L.P.), (AMT), 8.05%, 1/1/24 5,184,316
4,960 Delaware, PA, IDA, (Glen Riddle), (AMT),
8.625%, 9/1/25 5,343,160
10,000 Glen Cove, NY, IDA, (Regency at Glen
Cove), 9.50%, 7/1/12 10,656,200
15,000 Illinois Development Finance Authority,
(Care Institute, Inc. - Illinois),
7.80%, 6/1/25 15,429,600
4,605 New Jersey EDA, (Chelsea at East
Brunswick), (AMT), 8.25%, 10/1/20 4,755,077
9,715 New Jersey EDA, (Forsgate), (AMT),
8.625%, 6/1/25 10,519,499
4,935 North Syracuse Village Housing
Authority, NY, (AJM Senior Housing,
Inc., Janus Park), 8.00%, 6/1/24 3,940,795
7,915 Roseville, MN, Elder Care Facility,
(Care Institute, Inc. - Roseville),
7.75%, 11/1/23 7,427,990
12,290 St. Paul, MN, Housing and Redevelopment,
(Care Institute, Inc. - Highland),
8.75%, 11/1/24 13,364,638
- ---------------------------------------------------------------------------
$ 103,986,953
- ---------------------------------------------------------------------------
Cogeneration -- 6.5%
- ---------------------------------------------------------------------------
$ 22,150 Maryland Energy Cogeneration, (AES
Warrior Run), (AMT), 7.40%, 9/1/19 $ 22,692,453
30,775 New Jersey EDA, (Vineland Cogeneration),
(AMT), 7.875%, 6/1/19 31,824,427
12,950 Palm Beach County, FL, (Osceola Power),
(AMT), 6.95%, 1/1/22(1) 6,895,875
6,100 Pennsylvania EDA, (Northampton
Generating), (AMT), 6.50%, 1/1/13 6,029,057
21,950 Pennsylvania EDA, (Northampton
Generating), (AMT), 6.60%, 1/1/19 21,462,929
7,000 Pennsylvania EDA, (Northampton
Generating), Junior Liens, (AMT),
6.875%, 1/1/11 7,009,520
5,000 Pennsylvania EDA, (Northampton
Generating), Junior Liens, (AMT),
6.95%, 1/1/21 5,019,200
3,917 Robbins, IL, Resource Recovery, (AMT),
0.00%, 10/15/09 1,841,177
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Cogeneration (continued)
- ---------------------------------------------------------------------------
$ 1,952 Robbins, IL, Resource Recovery, (AMT),
7.25%, 10/15/09 $ 1,873,725
8,439 Robbins, IL, Resource Recovery, (AMT),
7.25%, 10/15/24 7,932,498
12,578 Robbins, IL, Resource Recovery, (AMT),
8.375%, 10/15/16(1) 5,660,156
4,922 Robbins, IL, Resource Recovery, (AMT),
8.375%, 10/15/16(1) 2,214,844
- ---------------------------------------------------------------------------
$ 120,455,861
- ---------------------------------------------------------------------------
Education -- 0.4%
- ---------------------------------------------------------------------------
$ 4,130 California Educational Facilities
Authority, (Stanford University),
Variable Rate, 6/1/27(2) $ 3,569,600
5,000 Vermont HEFA, (Middlebury College),
5.00%, 11/1/38 4,287,850
- ---------------------------------------------------------------------------
$ 7,857,450
- ---------------------------------------------------------------------------
Electric Utilities -- 2.6%
- ---------------------------------------------------------------------------
$ 5,000 Connecticut Development Authority,
(Connecticut Light and Power),
Variable Rate, 9/1/28(3)(4) $ 4,007,200
6,500 Connecticut Development Authority,
(Western Mass Electric), Variable Rate,
9/1/28(3)(4) 5,209,360
11,000 Intermountain Power Agency, UT,
7.24%, 7/1/19(3)(4) 11,083,820
22,000 Long Island Power Authority, NY,
Electric System Revenue, 5.50%, 12/1/29 20,353,520
8,000 North Carolina Municipal Power Agency,
6.50%, 1/1/20 8,048,160
- ---------------------------------------------------------------------------
$ 48,702,060
- ---------------------------------------------------------------------------
Escrowed / Prerefunded -- 14.3%
- ---------------------------------------------------------------------------
$ 42,500 Bakersfield, CA, (Bakersfield Assisted
Living Center), Escrowed to Maturity,
0.00%, 4/15/21 $ 10,676,850
2,200 Bexar County, TX, Health Facilities,
(St. Luke's Lutheran), Escrowed to
Maturity, 7.00%, 5/1/21 2,552,660
184,070 Colorado Health Facilities Authority,
(Liberty Heights), Escrowed to Maturity,
0.00%, 7/15/24 37,531,873
244,325 Dawson Ridge, CO, Metropolitan District
#1, Escrowed to Maturity,
0.00%, 10/1/22 55,642,575
11,175 Dawson Ridge, CO, Metropolitan District
#1, Escrowed to Maturity,
0.00%, 10/1/22 2,544,994
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
NATIONAL MUNICIPALS PORTFOLIO AS OF MARCH 31, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Escrowed / Prerefunded (continued)
- ---------------------------------------------------------------------------
$ 7,000 Florida Mid-Bay Bridge Authority,
Escrowed to Maturity, 6.875%, 10/1/22 $ 8,032,640
101,555 Illinois Development Finance Authority,
(Regency Park), Escrowed to Maturity,
0.00%, 7/15/23 22,009,000
60,360 Illinois Development Finance Authority,
(Regency Park), Escrowed to Maturity,
0.00%, 7/15/25 11,471,418
4,650 Illinois HEFA, (Chicago Osteopathic
Health Systems), Escrowed to Maturity,
7.125%, 5/15/11 5,155,083
4,500 Illinois HEFA, (Chicago Osteopathic
Health Systems), Prerefunded to
11/15/19, 7.25%, 5/15/22 5,267,565
11,395 Louisiana Public Facilities Authority,
(Southern Baptist Hospitals, Inc.),
Escrowed to Maturity, 8.00%, 5/15/12 13,100,034
5,675 Maricopa County, AZ, IDA, (Place Five
and The Greenery), Escrowed to Maturity,
6.625%, 1/1/27 5,964,141
1,000 Maricopa County, AZ, IDA, Multifamily,
Escrowed to Maturity, 6.45%, 1/1/17 1,053,500
100,000 Mississippi Housing Finance Corp., SFMR,
Escrowed to Maturity, (AMT),
0.00%, 6/1/15 42,450,000
46,210 San Joaquin Hills Transportation
Corridor Agency, CA, Toll Road Bonds,
Escrowed to Maturity, 0.00%, 1/1/20 14,896,256
72,685 San Joaquin Hills Transportation
Corridor Agency, CA, Toll Road Bonds,
Escrowed to Maturity, 0.00%, 1/1/21 21,992,300
15,000 San Joaquin Hills Transportation
Corridor Agency, CA, Toll Road Bonds,
Escrowed to Maturity, 0.00%, 1/1/25 3,552,750
- ---------------------------------------------------------------------------
$ 263,893,639
- ---------------------------------------------------------------------------
Gas Utilities -- 0.2%
- ---------------------------------------------------------------------------
$ 5,250 Philadelphia, PA, Natural Gas Works,
Variable Rate, 7/1/28(3) $ 3,915,765
- ---------------------------------------------------------------------------
$ 3,915,765
- ---------------------------------------------------------------------------
General Obligations -- 1.4%
- ---------------------------------------------------------------------------
$ 10,190 Georgia, 4.25%, 8/1/18 $ 8,682,593
15,000 North East Independent School District,
TX, 4.50%, 10/1/28 12,006,000
4,800 Texas, Variable Rate, 8/1/24(3)(4) 4,284,624
- ---------------------------------------------------------------------------
$ 24,973,217
- ---------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Health Care-Miscellaneous -- 0.3%
- ---------------------------------------------------------------------------
$ 3,416 Tax Revenue Exempt Securities Trust,
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 5.50%, 12/1/36 $ 3,004,504
3,664 Tax Revenue Exempt Securities Trust,
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 5.875%, 12/1/36(4) 3,333,052
- ---------------------------------------------------------------------------
$ 6,337,556
- ---------------------------------------------------------------------------
Hospital -- 7.2%
- ---------------------------------------------------------------------------
$ 6,500 Arizona Health Facilities Authority,
(Phoenix Memorial Hospital),
8.20%, 6/1/21 $ 6,308,770
2,325 Berlin, MD, (Atlantic General Hospital),
8.375%, 6/1/22 2,411,443
12,600 California Health Facilities Financing
Authority, (Cedars-Sinai Medical
Center), Variable Rate, 12/1/34(3)(4) 12,723,858
22,000 Colorado Health Facilities Authority,
(Rocky Mountain Adventist),
6.625%, 2/1/22 18,541,160
300 Corinth and Alcorn County, (Magnolia
Health Center), 5.50%, 10/1/21 237,636
4,000 Corinth and Alcorn County, MS, (Magnolia
Registered Health Center),
5.50%, 10/1/21 3,168,480
4,000 Crossville, TN, HEFA, (Cumberland
Medical Center), 6.75%, 11/1/12 4,060,120
3,775 Hawaii Department of Budget and Finance,
(Wahiawa General Hospital),
7.50%, 7/1/12 3,476,888
1,000 Illinois Health Facilities Authority,
(Holy Cross Hospital), 6.70%, 3/1/14 1,005,730
2,650 Illinois Health Facilities Authority,
(Holy Cross Hospital), 6.75%, 3/1/24 2,571,904
4,500 Indiana Health Facility Financing
Authority, (Memorial Hospital and Health
Care Center), 7.40%, 3/1/22 4,579,560
10,585 Louisiana Public Facilities Authority,
(General Health Systems),
6.80%, 11/1/16 10,587,540
10,000 Maricopa County, AZ, IDA, (Mayo
Foundation), Variable Rate,
11/15/37(3)(4) 7,648,200
2,000 Marshall County, AL, (Guntersville-Arab
Medical Center), 7.00%, 10/1/09 2,047,420
2,000 Marshall County, AL, (Guntersville-Arab
Medical Center), 7.00%, 10/1/13 2,051,660
13,815 Massachusetts HEFA, (Partners Healthcare
System), 5.25%, 7/1/29 11,628,914
14,000 Montgomery County, PA, HEFA (Abington
Memorial Hospital), 6.66%, 7/5/11 14,621,740
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
NATIONAL MUNICIPALS PORTFOLIO AS OF MARCH 31, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Hospital (continued)
- ---------------------------------------------------------------------------
$ 3,500 New Jersey Health Care Facilities
Financing Authority, (Trinitas Hospital
Obligated Group), 7.50%, 7/1/30 $ 3,497,305
9,000 Philadelphia, PA, HEFA, (Graduate Health
System), 6.625%, 7/1/21(1) 3,240,000
2,250 Philadelphia, PA, HEFA, (Graduate Health
System), 7.25%, 7/1/18(1) 810,000
3,075 Prince George's County, MD, (Greater
Southeast Healthcare System),
6.375%, 1/1/23(1) 1,268,437
7,750 Rhode Island HEFA, (St. Joseph Health
Services), 5.50%, 10/1/29 5,915,110
12,500 Rochester, MN, Health Care Facilities,
(Mayo Clinic), Variable Rate,
11/15/27(3)(4) 11,508,250
- ---------------------------------------------------------------------------
$ 133,910,125
- ---------------------------------------------------------------------------
Hotel -- 0.1%
- ---------------------------------------------------------------------------
$ 4,205 Niagara County, NY IDA, (Wintergarden
Inn Associates), 9.75%, 6/1/11(1) $ 1,645,206
- ---------------------------------------------------------------------------
$ 1,645,206
- ---------------------------------------------------------------------------
Housing -- 8.8%
- ---------------------------------------------------------------------------
$ 3,000 ABAG Finance Authority, CA, (Civic
Center Drive Apartments), (AMT),
6.375%, 9/1/32 $ 3,043,230
7,955 Arkansas Development Finance Authority,
MFMR, (Park Apartments), (AMT),
5.95%, 12/1/28 7,024,504
6,200 Bexar County, TX, Housing Finance Corp.,
(Arboretum Apartments), (AMT),
6.10%, 8/1/36 5,702,574
10,900 Bexar County, TX, Housing Finance Corp.,
(North Knoll Apartments), 5.90%, 4/1/37 9,526,382
9,350 California Housing Finance Agency,
(AMT), Variable Rate, 8/1/23(3) 9,875,937
12,000 California Statewide Communities
Development Authority, (Chesapeake Bay
Apartments), 6.00%, 6/1/32 10,628,160
37,500 California Statewide Communities
Development Authority, (Corporate Fund
for Housing), 6.50%, 12/1/29 35,702,625
3,000 California Statewide Communities
Development Authority, (Corporate Fund
for Housing), 7.25%, 12/1/34 2,969,520
4,000 California Statewide Communities
Development Authority, (Corporate Fund
for Housing), 7.50%, 12/1/34 3,960,360
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Housing (continued)
- ---------------------------------------------------------------------------
$ 6,750 California Statewide Communities
Development Authority, (Nantucket Bay
Apartments), 6.00%, 6/1/32 $ 5,978,340
2,500 California Statewide Communities
Development Authority, (Oaks at Sunset
Apartments), 6.00%, 6/1/36 2,205,550
7,800 California Statewide Communities
Development Authority, (San Luis Bay
Village Apartments), (AMT),
6.25%, 9/1/36 7,213,986
12,000 Charter Mac Equity, TN, (AMT),
6.625%, 6/30/09 11,699,520
1,890 El Paso County, TX, Housing Finance
Corp., (San Jose Ltd.), (AMT),
6.00%, 8/1/31 1,820,183
3,750 El Paso County, TX, Housing Finance
Corp., (San Jose Ltd.), (AMT),
6.10%, 8/1/31 3,662,625
10,630 Lake Creek, CO, (Affordable Housing
Corp.), 6.25%, 12/1/23 9,828,392
1,435 Maricopa County, AZ, IDA, (National
Health Facilities II), 6.375%, 1/1/19 1,330,675
6,645 Minneapolis, MN, Community Development,
Multifamily Housing, (Lindsay Brothers),
6.60%, 12/1/18 6,450,235
15,675 New Hampshire Housing Finance Authority,
Multifamily Housing, 6.20%, 7/1/36 15,516,839
8,300 Speedway, IN, Economic Development
Authority, (Hermitage Apartments),
(AMT), 6.00%, 5/1/31 7,994,477
- ---------------------------------------------------------------------------
$ 162,134,114
- ---------------------------------------------------------------------------
Industrial Development Revenue -- 12.6%
- ---------------------------------------------------------------------------
$ 7,450 Austin, TX, (Cargoport Development LLC),
(AMT), 8.30%, 10/1/21 $ 7,702,629
2,000 California Pollution Control Financing
Authority, (Laidlaw Environmental),
(AMT), 6.70%, 7/1/07 600,860
2,000 Camden County, NJ, (Holt Hauling),
(AMT), 9.875%, 1/1/21 2,062,100
6,050 Carbon County, UT, (Laidlaw
Environmental), (AMT), 7.50%, 2/1/10 5,592,499
6,000 Clark County, NV, (Nevada Power), (AMT),
Variable Rate, 10/1/30(3) 4,507,920
12,450 Courtland, AL, (Champion International),
(AMT), 7.00%, 6/1/22 12,654,429
25,250 Denver, CO, City and County, (United
Airlines), Variable Rate, 10/1/32(3)(4) 25,406,550
8,000 Effingham County, GA, Solid Waste
Disposal, (Fort James), (AMT),
5.625%, 7/1/18 7,162,960
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
14
<PAGE>
NATIONAL MUNICIPALS PORTFOLIO AS OF MARCH 31, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Industrial Development Revenue (continued)
- ---------------------------------------------------------------------------
$ 12,980 Gulf Coast, TX, Waste Disposal,
(Champion International), (AMT),
6.875%, 12/1/28 $ 13,044,640
6,435 Kimball, NE, EDA, (Clean Harbors),
10.75%, 9/1/26 6,645,618
1,600 Knox County, TN, Industrial Development
Board (Melrose Place, Ltd.),
6.875%, 12/1/14 1,546,848
7,000 Knox County, TN, Industrial Development
Board (Weisgarber Partners),
6.875%, 12/1/14 6,801,200
7,500 Little River County, AR,
(Georgia-Pacific), (AMT),
5.60%, 10/1/26 6,550,125
6,500 Los Angeles, CA, Regional Airports
Improvement Corp., (LAXFuel), (AMT),
6.50%, 1/1/32 6,533,215
5,000 McMinn County, TN, (Calhoun Newsprint -
Bowater, Inc.), (AMT), 7.40%, 12/1/22 5,129,600
10,000 Michigan Strategic Fund, (S.D. Warren),
7.375%, 1/15/22 10,360,900
15,000 Michigan Strategic Fund, (S.D. Warren),
(AMT), 7.375%, 1/15/22 15,541,350
3,500 Michigan Strategic Fund, (S.D. Warren),
(AMT), 7.375%, 1/15/22 3,626,315
3,625 Middleboro, MA, (Read Corp.),
9.50%, 10/1/10 3,753,832
10,885 New Jersey EDA, (Continental Airlines),
(AMT), Variable Rate, 9/15/29(3)(4) 9,085,818
17,000 New Jersey EDA, (Holt Hauling),
7.75%, 3/1/27 16,943,050
1,500 New Jersey EDA, (Holt Hauling), (AMT),
7.90%, 3/1/27 1,501,875
1,000 Ohio Solid Waste Revenue, (Republic
Engineered Steels), (AMT),
9.00%, 6/1/21 330,370
22,600 Peninsula Ports Authority, VA, (Zeigler
Coal), 6.90%, 5/2/22 18,589,178
10,000 Pennsylvania, IDA, (Sun Co.), (AMT),
7.60%, 12/1/24 10,633,600
2,585 Riverdale Village, IL, (ACME Metals),
(AMT), 7.90%, 4/1/24(5) 2,197,250
2,000 Riverdale Village, IL, (ACME Metals),
(AMT), 7.95%, 4/1/25 1,700,000
2,285 Savannah, GA, (Intercat-Savannah),
(AMT), 9.75%, 7/1/10 1,422,413
3,810 Savannah, GA, EDA, (Intercat-Savannah),
(AMT), 9.00%, 1/1/15 2,371,725
2,000 Skowhegan, ME, (S.D. Warren), (AMT),
6.65%, 10/15/15 1,935,540
3,500 Toole County, UT, (Laidlaw
Environmental), (AMT), 7.55%, 7/1/27 1,051,260
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Industrial Development Revenue (continued)
- ---------------------------------------------------------------------------
$ 18,500 Valdez, AK, (British Petroleum),
Variable Rate, 8/1/25(3)(4) $ 17,427,000
4,000 Yavapai County, AZ, IDA, (Citizens
Utilities), (AMT), 5.45%, 6/1/33 3,695,880
- ---------------------------------------------------------------------------
$ 234,108,549
- ---------------------------------------------------------------------------
Insured-Education -- 1.0%
- ---------------------------------------------------------------------------
$ 7,500 Massachusetts IFA, (Tufts University),
(MBIA), 4.75%, 2/15/28 $ 6,316,875
12,000 Virginia College Building Authority,
(Washington and Lee University), (MBIA),
5.25%, 1/1/31 11,146,080
- ---------------------------------------------------------------------------
$ 17,462,955
- ---------------------------------------------------------------------------
Insured-Electric Utilities -- 4.3%
- ---------------------------------------------------------------------------
$ 10,000 Brazos River Authority, TX, (Houston
Lighting and Power), (AMBAC), (AMT),
5.05%, 11/1/18 $ 8,938,800
10,000 Intermountain Power Agency, UT, (MBIA),
6.00%, 7/1/16 10,290,300
10,000 Los Angeles, CA, Department of Water and
Power, (MBIA), 5.00%, 10/15/33 8,816,500
12,500 Matagorda County, TX, Navigation
District, (Houston Lighting), (AMBAC),
(AMT), 5.125%, 11/1/28 11,117,125
16,000 Piedmont, SC, Municipal Power Agency,
(MBIA), 4.75%, 1/1/25 13,427,840
16,500 Sacramento, CA, Municipal Utility
District, (MBIA), Variable Rate,
11/15/15(3) 16,335,000
15,350 South Carolina Public Services, (FGIC),
Variable Rate, 1/1/25(3)(4) 11,339,813
- ---------------------------------------------------------------------------
$ 80,265,378
- ---------------------------------------------------------------------------
Insured-General Obligations -- 1.2%
- ---------------------------------------------------------------------------
$ 14,000 Chicago, IL, Board of Education, (FGIC),
0.00%, 12/1/29 $ 2,327,780
3,950 Umatilla County, OR, School District No.
008R, (MBIA), Variable Rate,
6/15/14(3)(4) 3,574,118
10,000 University of Vermont and State
Agricultural College, (MBIA),
4.75%, 10/1/38 8,187,800
10,000 West Virginia, (FGIC), 4.50%, 6/1/23 8,194,300
- ---------------------------------------------------------------------------
$ 22,283,998
- ---------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
15
<PAGE>
NATIONAL MUNICIPALS PORTFOLIO AS OF MARCH 31, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Insured-Health Care Miscellaneous -- 0.2%
- ---------------------------------------------------------------------------
$ 3,500 Massachusetts HEFA, (Harvard Pilgrim
Health), (FSA), 5.00%, 7/1/28 $ 2,909,830
- ---------------------------------------------------------------------------
$ 2,909,830
- ---------------------------------------------------------------------------
Insured-Hospital -- 1.2%
- ---------------------------------------------------------------------------
$ 15,210 Maryland HEFA, (Medlantic/Helix Issue),
(AMBAC), 5.25%, 8/15/38 $ 13,981,793
8,925 Tyler, TX, Health Facility Development
Corp., (East Texas Medical Center),
(FSA), 5.375%, 11/1/27 8,211,714
- ---------------------------------------------------------------------------
$ 22,193,507
- ---------------------------------------------------------------------------
Insured-Housing -- 0.4%
- ---------------------------------------------------------------------------
$ 7,525 SCA Multifamily Mortgage, Industrial
Development Board, Hamilton County, TN,
(FSA), (AMT), 7.35%, 1/1/30 $ 8,027,670
- ---------------------------------------------------------------------------
$ 8,027,670
- ---------------------------------------------------------------------------
Insured-Industrial Development Revenue -- 0.6%
- ---------------------------------------------------------------------------
$ 11,950 Chicago, IL, (The Peoples Gas Light and
Coke), (AMBAC), (AMT), Variable Rate,
12/1/23(3)(4) $ 11,285,819
- ---------------------------------------------------------------------------
$ 11,285,819
- ---------------------------------------------------------------------------
Insured-Special Tax Revenue -- 2.1%
- ---------------------------------------------------------------------------
$ 4,500 Pennsylvania Turnpike Commission Oil
Franchise, (AMBAC), Variable Rate,
12/1/27(3)(4) $ 3,063,960
3,415 Regional Transportation Authority, LA,
(FGIC), 0.00%, 12/1/12 1,721,809
10,935 Regional Transportation Authority, LA,
(FGIC), 0.00%, 12/1/15 4,547,210
10,000 Regional Transportation Authority, LA,
(FGIC), 0.00%, 12/1/21 2,807,300
20,000 South Orange County, CA, Public
Financing Authority, (FGIC),
Variable Rate, 8/15/15(3) 19,375,000
7,000 Utah Municipal Finance Corp., Local
Government Revenue, (FSA),
0.00%, 3/1/10 4,122,860
6,000 Utah Municipal Finance Corp., Local
Government Revenue, (FSA),
0.00%, 3/1/11 3,332,400
- ---------------------------------------------------------------------------
$ 38,970,539
- ---------------------------------------------------------------------------
Insured-Transportation -- 4.3%
- ---------------------------------------------------------------------------
$ 20,930 Central Puget Sound, WA, Transportation
Authority, (FGIC), 4.75%, 2/1/28 $ 17,532,642
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Insured-Transportation (continued)
- ---------------------------------------------------------------------------
$ 12,000 Florida Turnpike Authority, (FSA),
4.50%, 7/1/28 $ 9,770,160
8,750 Manchester Airport, NH, (MBIA),
4.50%, 1/1/28 7,020,913
20,000 Metropolitan Atlanta Rapid
Transportation Authority, GA, (MBIA),
Variable Rate, 7/1/20(3)(4) 16,631,800
14,400 Metropolitan Washington, DC Airport
Authority, (MBIA), Variable Rate,
4/1/21(3)(4) 13,980,816
10,000 Ohio Turnpike Commission, (FGIC),
4.50%, 2/15/24 8,224,200
8,000 Ohio Turnpike Commission, (FGIC),
4.75%, 2/15/28 6,757,200
- ---------------------------------------------------------------------------
$ 79,917,731
- ---------------------------------------------------------------------------
Insured-Water and Sewer -- 3.8%
- ---------------------------------------------------------------------------
$ 1,360 California Water Resources, (Central
Valley), (FGIC), Variable Rate, 12/1/22 $ 1,360,000
20,980 Chicago, IL, Wastewater Transmission,
(MBIA), 0.00%, 1/1/26 4,442,935
14,000 Fulton County, GA, Water and Sewer,
(FGIC), 4.75%, 1/1/28 11,830,280
7,150 Harrisburg, PA, Water Revenue Bonds,
(FGIC), Variable Rate, 8/11/16(3) 6,399,250
11,645 King County, WA, Sewer, (FGIC),
5.25%, 1/1/35 10,538,958
23,015 New York City, NY, Municipal Water
Finance Authority, (Water and Sewer
System), (FGIC), 4.75%, 6/15/31 19,172,646
9,000 Tampa Bay, FL, Water Utilitiy System,
(FGIC), 4.75%, 10/1/27 7,677,180
10,500 Upper Occoquan Sewer Authority, VA,
(MBIA), 4.75%, 7/1/29 8,819,685
- ---------------------------------------------------------------------------
$ 70,240,934
- ---------------------------------------------------------------------------
Lease Revenue/Certificates of Participation -- 0.4%
- ---------------------------------------------------------------------------
$ 6,645 Hardeman County, TN, (Correctional
Facilities Corp.), 7.75%, 8/1/17 $ 6,839,300
- ---------------------------------------------------------------------------
$ 6,839,300
- ---------------------------------------------------------------------------
Miscellaneous -- 0.6%
- ---------------------------------------------------------------------------
$ 5,520 American Samoa Economic Development
Authority, (Executive Office Building),
10.125%, 9/1/08 $ 5,658,883
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
16
<PAGE>
NATIONAL MUNICIPALS PORTFOLIO AS OF MARCH 31, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Miscellaneous (continued)
- ---------------------------------------------------------------------------
$ 10,200 Orange County, NC, (Community Activity
Corp.), 8.00%, 3/1/24(1) $ 4,590,000
1,600 Pittsfield Township, MI, EDC, (Arbor
Hospice), 7.875%, 8/15/27 1,541,696
- ---------------------------------------------------------------------------
$ 11,790,579
- ---------------------------------------------------------------------------
Nursing Home -- 7.4%
- ---------------------------------------------------------------------------
$ 12,970 Bell County, TX, (Riverside Healthcare,
Inc. - Normandy Terrace), 9.00%, 4/1/23 $ 14,523,287
3,260 Collier County, FL, IDA, (Beverly
Enterprises), 10.75%, 3/1/03,
10.75%, 3/1/03 3,454,394
4,885 Delaware County, PA, (Mainline -
Haverford Nursing and Rehabilitation
Centers), 9.00%, 8/1/22 5,333,199
2,150 Hillsborough County, FL, IDA, (Tampa Bay
Retirement Center), 0.00%, 6/1/25 1,071,904
10,085 Hillsborough County, FL, IDA, (Tampa Bay
Retirement Center), 7.00%, 6/1/25 9,237,356
10,000 Indianapolis, IN, (National Benevolent
Association - Robin Run Village),
7.625%, 10/1/22 10,395,500
3,475 Lackawanna County, PA, IDA, (Edella
Street Associates), 8.875%, 9/1/14 3,670,504
2,660 Luzerne County, PA, IDA, (River Street
Associates), 8.75%, 6/15/07 2,797,735
13,250 Massachusetts IFA, (Age Institute of
Massachusetts), 8.05%, 11/1/25 13,837,638
11,755 Mississippi Business Finance Corp.,
(Magnolia Healthcare), 7.99%, 7/1/25 11,800,257
6,750 Missouri HEFA, (Bethesda Health Group of
Saint Louis, Inc.), 6.625%, 8/15/05 6,843,758
14,000 Missouri HEFA, (Bethesda Health Group of
Saint Louis, Inc.), 7.50%, 8/15/12 14,806,820
12,370 Montgomery, PA, IDA, (Advancement of
Geriatric Health Care Institute),
8.375%, 7/1/23 12,943,721
4,885 New Jersey EDA, (Claremont Health
System, Inc.), 9.10%, 9/1/22 5,221,235
5,915 New Jersey EDA, (Victoria Health Corp.),
7.75%, 1/1/24 6,101,441
3,500 Orange County, FL, Health Facilities
Authority, (Westminster Community Care),
6.75%, 4/1/34 3,131,835
4,805 Sussex County, DE, (Delaware Health
Corp.), 7.50%, 1/1/14 4,826,334
4,900 Sussex County, DE, (Delaware Health
Corp.), 7.60%, 1/1/24 4,937,583
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Nursing Home (continued)
- ---------------------------------------------------------------------------
$ 2,440 Westmoreland, PA, (Highland Health
Systems, Inc.), 9.25%, 6/1/22 $ 2,610,727
- ---------------------------------------------------------------------------
$ 137,545,228
- ---------------------------------------------------------------------------
Senior Living / Life Care -- 3.6%
- ---------------------------------------------------------------------------
$ 14,700 Albuquerque, NM, Retirement Facilities,
(La Vida Liena Retirement Center),
5.75%, 12/15/28 $ 11,805,570
10,000 Albuquerque, NM, Retirement Facilities,
(La Vida Liena Retirement Center),
6.60%, 12/15/28 8,712,600
12,435 De Kalb County, GA, Private Hospital
Authority, (Atlanta, Inc.),
8.50%, 3/1/25(5) 6,217,500
15,000 Louisiana HFA, (HCC Assisted Living
Group 1), (AMT), 9.00%, 3/1/25 15,856,500
12,375 North Miami, FL, Health Facilities
Authority, (Imperial Club),
6.75%, 1/1/33 10,714,028
800 North Miami, FL, Health Facilities
Authority, (Imperial Club),
9.00%, 1/1/12 803,400
5,405 Ridgeland, MS, Urban Renewal, (The
Orchard), 7.75%, 12/1/15 5,533,639
2,565 South Dakota HEFA, (Prairie Lakes Health
Care), 7.25%, 4/1/22 2,608,041
4,000 Wisconsin HEFA, (Wisconsin Illinois
Senior Housing), 7.00%, 8/1/29 3,750,080
640 Wisconsin HEFA, (Wisconsin Illinois
Senior Housing), 8.00%, 8/1/02,
8.00%, 8/1/02 633,517
- ---------------------------------------------------------------------------
$ 66,634,875
- ---------------------------------------------------------------------------
Special Tax Revenue -- 1.2%
- ---------------------------------------------------------------------------
$ 7,450 Lincoln, CA, Public Financing Authority,
Improvement Bond Act 1915, (Twelve
Bridges), 6.20%, 9/2/25 $ 7,108,418
10,000 New York LGAC, 5.00%, 4/1/21 9,143,500
5,125 University Square Community Development
District, FL, 6.75%, 5/1/20 5,029,163
- ---------------------------------------------------------------------------
$ 21,281,081
- ---------------------------------------------------------------------------
Transportation -- 2.0%
- ---------------------------------------------------------------------------
$ 5,750 Connector 2000 Association, Inc., South
Carolina Toll Road, (Southern
Connector), 5.25%, 1/1/23 $ 4,385,698
4,735 Denver, CO, City and County Airport
Revenue, (AMT), 7.50%, 11/15/23 5,134,587
20,505 Massachusetts Turnpike Authority,
6.39%, 1/1/23(3)(4) 17,344,154
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
NATIONAL MUNICIPALS PORTFOLIO AS OF MARCH 31, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Transportation (continued)
- ---------------------------------------------------------------------------
$ 9,500 Massachusetts Turnpike Authority,
6.869%, 1/1/20(3)(4) $ 8,071,770
3,000 Tri-County, OR, Metropolitan
Transportation District, Variable Rate,
8/1/19(3)(4) 2,501,400
- ---------------------------------------------------------------------------
$ 37,437,609
- ---------------------------------------------------------------------------
Water and Sewer -- 3.6%
- ---------------------------------------------------------------------------
$ 15,563 Atlanta, GA Water and Waste,
5.62%, 11/1/38(3)(4) $ 11,150,064
10,960 California Water Resources, (Central
Valley), Variable Rate, 12/1/24(3)(4) 9,550,215
10,135 California Water Resources, (Central
Valley), Variable Rate, 12/1/28(3)(4) 8,215,532
10,000 De Kalb County, GA, (Water and Sewer),
5.00%, 10/1/28 8,822,900
10,000 Houston, TX, Water and Sewer System,
4.75%, 12/1/24 8,474,400
7,150 Jacksonville, FL, (Water and Sewer),
5.375%, 10/1/29 6,727,864
1,805 Metropolitan Southern California
Waterworks, 3.05%, 7/1/21 1,805,000
9,400 Metropolitan Southern California
Waterworks, Variable Rate, 7/1/21(2)(4) 6,514,388
7,000 Metropolitan Water District, (Southern
California Waterworks), Variable Rate,
7/1/27(2)(4) 4,851,490
- ---------------------------------------------------------------------------
$ 66,111,853
- ---------------------------------------------------------------------------
Total Tax-Exempt Investments -- 97.9%
(identified cost $1,821,957,054) $1,813,119,381
- ---------------------------------------------------------------------------
Other Assets, Less Liabilities -- 2.1% $ 39,460,366
- ---------------------------------------------------------------------------
Net Assets -- 100.0% $1,852,579,747
- ---------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax
preference item for purposes of the Federal Alternative Minimum Tax.
At March 31, 2000, the concentration of the Portfolio's investments in
the various states, determined as a percentage of net assets, is
as follows:
<TABLE>
<S> <C>
California 12.8%
Others, representing less than 10% individually 85.1%
</TABLE>
The Portfolio invests primarily in debt securities issued by municipali-
ties. 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 March 31, 2000, 18.6% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions
and financial guaranty assurance agencies. The aggregate percentage insured
by financial institutions ranged from 2.0% to 7.7% of total investments.
(1) Non-income producing security.
(2) Security has been issued as a leveraged inverse floater bond.
(3) Security has been issued as an inverse floater bond.
(4) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(5) The Portfolio is accruing only partial interest on this security.
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
NATIONAL MUNICIPALS PORTFOLIO AS OF MARCH 31, 2000
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF MARCH 31, 2000
<S> <C>
Assets
- --------------------------------------------------------------------------------------
Investments, at value (identified cost, $1,821,957,054) $1,813,119,381
Cash 5,803,329
Receivable for investments sold 6,759,028
Interest receivable 33,629,106
- --------------------------------------------------------------------------------------
TOTAL ASSETS $1,859,310,844
- --------------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------------
Payable for investments purchased $ 6,710,830
Accrued expenses 20,267
- --------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 6,731,097
- --------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS' INTEREST IN PORTFOLIO $1,852,579,747
- --------------------------------------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------------------------------------
Net proceeds from capital contributions and withdrawals $1,861,417,420
Net unrealized depreciation (computed on the basis of
identified cost) (8,837,673)
- --------------------------------------------------------------------------------------
TOTAL $1,852,579,747
- --------------------------------------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
MARCH 31, 2000
<S> <C>
Investment Income
- ------------------------------------------------------------------------------------
Interest $ 68,343,100
- ------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME $ 68,343,100
- ------------------------------------------------------------------------------------
Expenses
- ------------------------------------------------------------------------------------
Investment adviser fee $ 4,362,077
Trustees fees and expenses 16,493
Legal and accounting services 62,077
Miscellaneous 135,283
- ------------------------------------------------------------------------------------
TOTAL EXPENSES $ 4,575,930
- ------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 63,767,170
- ------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
- ------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $(20,808,631)
- ------------------------------------------------------------------------------------
NET REALIZED LOSS $(20,808,631)
- ------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $(32,483,222)
- ------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) $(32,483,222)
- ------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS $(53,291,853)
- ------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 10,475,317
- ------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE>
NATIONAL MUNICIPALS PORTFOLIO AS OF MARCH 31, 2000
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INCREASE (DECREASE) MARCH 31, 2000 YEAR ENDED
IN NET ASSETS (UNAUDITED) SEPTEMBER 30, 1999
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 63,767,170 $ 136,988,870
Net realized gain (loss) (20,808,631) 31,760,688
Net change in unrealized appreciation (depreciation) (32,483,222) (280,608,085)
- ------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 10,475,317 $ (111,858,527)
- ------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 112,769,634 $ 375,986,994
Withdrawals (396,210,017) (478,708,432)
- ------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS $ (283,440,383) $ (102,721,438)
- ------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (272,965,066) $ (214,579,965)
- ------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------
At beginning of period $ 2,125,544,813 $ 2,340,124,778
- ------------------------------------------------------------------------------------------------------------
AT END OF PERIOD $ 1,852,579,747 $ 2,125,544,813
- ------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
NATIONAL MUNICIPALS PORTFOLIO AS OF MARCH 31, 2000
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, 2000 ----------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------------------------------------------------------------------------------------------
Ratios (As a percentage of
average daily net assets):
Expenses 0.47%(1) 0.45% 0.45% 0.52% 0.49% 0.50%
Expenses after custodian
fee reduction 0.47%(1) 0.43% 0.43% 0.52% 0.48% 0.49%
Net investment income 6.52%(1) 5.92% 5.93% 6.51% 6.65% 7.00%
Portfolio Turnover 24% 60% 28% 17% 19% 54%
- ------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD
(000'S OMITTED) $1,852,580 $2,125,545 $2,340,125 $2,181,615 $2,212,478 $2,260,646
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
21
<PAGE>
NATIONAL MUNICIPALS PORTFOLIO AS OF MARCH 31, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1 Significant Accounting Policies
- -------------------------------------------
National Municipals Portfolio (the Portfolio) is registered under the
Investment Company Act of 1940 as a diversified open-end management
investment company which was organized as a trust under the laws of the State
of New York on May 1, 1992. The Declaration of Trust permits the Trustees to
issue interests in the Portfolio. The following is a summary of significant
accounting policies of the Portfolio. The policies are in conformity with
generally accepted accounting principles.
A Investment Valuation -- Municipal bonds are normally valued on the basis of
valuations furnished by a pricing service. Taxable obligations, if any, for
which price quotations are readily available are normally valued at the mean
between the latest bid and asked prices. Futures contracts listed on the
commodity exchanges are valued at closing settlement prices. Short-term
obligations, maturing in sixty days or less, are valued at amortized cost,
which approximates value. Investments for which valuations or market
quotations are unavailable are valued at fair value using methods determined
in good faith by or at the direction of the Trustees.
B Income -- Interest income is determined on the basis of interest accrued,
adjusted for amortization of premium or accretion of discount when required
for Federal income tax purposes.
C Federal Taxes -- The Portfolio is treated as a partnership for federal tax
purposes. No provision is made by the Portfolio for federal or state taxes on
any taxable income of the Portfolio because each investor in the Portfolio is
ultimately responsible for the payment of any taxes. Since some of the
Portfolio's investors are regulated investment companies that invest all or
substantially all of their assets in the Portfolio, the Portfolio normally
must satisfy the applicable source of income and diversification requirements
(under the Internal Revenue Code) in order for its investors to satisfy them.
The Portfolio will allocate at least annually among its investors each
investor's distributive share of the Portfolio's net taxable (if any) and
tax-exempt investment income, net realized capital gains, and any other items
of income, gain, loss, deduction or credit. Interest income received by the
Portfolio 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 the 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 Financial Futures Contracts -- Upon the entering of a financial futures
contract, the 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 the 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 the Portfolio.
The Portfolio's investment in financial futures contracts is designed for
both hedging against anticipated future changes in interest rates and
investment purposes. Should interest rates move unexpectedly, the Portfolio
may not achieve the anticipated benefits of the financial futures contracts
and may realize a loss.
E Options on Financial Futures Contracts -- Upon the purchase of a put option
on a financial futures contract by the Portfolio, the premium paid is
recorded as an investment, the value of which is marked-to-market daily. When
a purchased option expires, the Portfolio will realize a loss in the amount
of the cost of the option. When the Portfolio enters into a closing sale
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 the Portfolio exercises a put option, settlement
is made in cash. The risk associated with purchasing put options is limited
to the premium originally paid.
F Legal Fees -- Legal fees and other related expenses incurred as part of
negotiations of the terms and requirements of capital infusions, or that are
expected to result in the restructuring of or a plan of reorganization for an
investment are recorded as realized losses. Ongoing expenditures to protect
or enhance an investment are treated as operating expenses.
G When-issued and Delayed Delivery Transactions -- The Portfolio may engage in
when-issued and delayed delivery transactions. The Portfolio records
when-issued securities on trade date and maintains security positions such
that sufficient liquid assets will be 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 Use of Estimates -- The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of income and expense during the reporting period. Actual results could
differ from those estimates.
22
<PAGE>
NATIONAL MUNICIPALS PORTFOLIO AS OF MARCH 31, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
I Other -- Investment transactions are accounted for on a trade date basis.
Realized gains and losses are computed based on the specific identification
of the securities sold.
J Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
of the Portfolio. Pursuant to the custodian agreement, IBT receives a fee
reduced by credits which are determined based on the average daily cash
balance the Portfolio maintains with IBT. All significant credit balances
used to reduce the Portfolio's custodian fees are reported as a reduction of
total expenses in the Statement of Operations.
K Interim Financial Statements -- The interim financial statements relating to
March 31, 2000 and for the six months then ended have not been audited by
independent certified public accountants, but in the opinion of the
Portfolio's management reflect all adjustments, consisting only of normal
recurring adjustments, necessary for the fair presentation of the financial
statements.
2 Investment Adviser Fee and Other Transactions with Affiliates
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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 the 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 six months ended March 31, 2000, the fee was equivalent
to 0.42% of the Portfolio's average daily net assets for such period and
amounted to $4,362,077. Except as to Trustees of the Portfolio who are not
members of EVM's or BMR's organization, officers and Trustees receive
remuneration for their services to the Portfolio out of such investment
adviser fee. Trustees of the Portfolio that are not affiliated with the
Investment Adviser may elect to defer receipt of all or a percentage of their
annual fees in accordance with the terms of the Trustees Deferred
Compensation Plan. For the six months ended March 31, 2000, no significant
amounts have been deferred.
Certain officers and Trustees of the Portfolio are officers of the above
organizations.
3 Investments
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Purchases and sales of investments, other than U.S. Government securities and
short-term obligations, aggregated $462,381,904 and $726,994,623,
respectively, for the six months ended March 31, 2000.
4 Federal Income Tax Basis of Investments
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The cost and unrealized appreciation (depreciation) in value of the
investments owned at March 31, 2000 as computed on a federal income tax
basis, were as follows:
<TABLE>
<S> <C>
AGGREGATE COST $ 1,821,957,054
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Gross unrealized appreciation $ 85,574,546
Gross unrealized depreciation (94,412,219)
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NET UNREALIZED DEPRECIATION $ (8,837,673)
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</TABLE>
5 Line of Credit
- -------------------------------------------
The Portfolio participates with other portfolios and funds managed by BMR and
EVM and its affiliates in a $150 million unsecured line of credit agreement
with a group of banks. The Portfolio 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 an
amount above either the Eurodollar rate or federal funds rate. In addition, a
fee computed at an annual rate of 0.10% on the daily unused portion of the
line of credit is allocated among the participating portfolios and funds at
the end of each quarter. The Portfolio did not have any significant
borrowings or allocated fees during the six months ended March 31, 2000.
6 Financial Instruments
- -------------------------------------------
The Portfolio regularly trades in financial instruments with off-balance
sheet risk in the normal course of its investing activities to assist in
managing exposure to various market risks. These financial instruments
include 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.
At March 31, 2000, there were no outstanding obligations under these
financial instruments.
23
<PAGE>
EATON VANCE NATIONAL MUNICIPALS FUND AS OF MARCH 31, 2000
INVESTMENT MANAGEMENT
EATON VANCE NATIONAL MUNICIPALS FUND
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
Trustees
Jessica M. Bibliowicz
President and Chief Executive Officer,
National Financial Partner
Donald R. Dwight
President, Dwight Partners, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment Banking
Emeritus, Harvard University Graduate School of
Business Administration
Norton H. Reamer
Chairman and Chief Executive Officer,
United Asset Management Corporation
Lynn A. Stout
Professor of Law,
Georgetown University Law Center
Jack L. Treynor
Investment Adviser and Consultant
NATIONAL MUNICIPALS PORTFOLIO
Officers
Thomas J. Fetter
President
James B. Hawkes
Vice President and Trustee
Robert B. MacIntosh
Vice President
Thomas M. Metzold
Vice President and
Portfolio Manager
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Trustees
Jessica M. Bibliowicz
President and Chief Executive Officer,
National Financial Partner
Donald R. Dwight
President, Dwight Partners, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment Banking
Emeritus, Harvard University Graduate School of
Business Administration
Norton H. Reamer
Chairman and Chief Executive Officer,
United Asset Management Corporation
Lynn A. Stout
Professor of Law,
Georgetown University Law Center
Jack L. Treynor
Investment Adviser and Consultant
24
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<PAGE>
INVESTMENT ADVISER OF
NATIONAL MUNICIPALS PORTFOLIO
Boston Management and Research
The Eaton Vance Building
255 State Street
Boston, MA 02109
ADMINISTRATOR OF
EATON VANCE NATIONAL MUNICIPALS FUND
Eaton Vance Management
The Eaton Vance Building
255 State Street
Boston, MA 02109
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
The Eaton Vance Building
255 State Street
Boston, MA 02109
(617)482-8260
CUSTODIAN
Investors Bank & Trust Company
200 Clarendon Street
Boston, MA 02116
TRANSFER AGENT
PFPC, Inc.
Attention: Eaton Vance Funds
P.O. Box 9653
Providence, RI 02904-9653
EATON VANCE MUNICIPALS TRUST
The Eaton Vance Building
255 State Street
Boston, MA 02109
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This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its distribution plan,
sales charges and expenses. Please read the prospectus carefully before you
invest or send money.
- -------------------------------------------------------------------------------
448-5/00 HMSRC-5/00
