<PAGE> 1
EV TRADITIONAL FLORIDA LIMITED MATURITY TAX FREE FUND
EV TRADITIONAL NEW YORK LIMITED MATURITY TAX FREE FUND
EV TRADITIONAL NATIONAL LIMITED MATURITY TAX FREE FUND
SUPPLEMENT TO PROSPECTUSES DATED NOVEMBER 25, 1994
THE FOLLOWING SENTENCE IS ADDED TO "HOW TO BUY FUND SHARES":
Fund shares may be sold at net asset value where the amount invested
represents redemption proceeds from a mutual fund unaffiliated with
Eaton Vance, if the redemption occurred no more than 60 days prior to
the purchase of Fund shares and the redeemed shares were subject to a
sales charge.
IN ADDITION, THE FOLLOWING CHANGES (1-5) APPLY TO FUND SHARES PURCHASED ON
OR AFTER MARCH 27, 1995:
1. THE SHAREHOLDER TRANSACTION EXPENSES TABLE UNDER "SHAREHOLDER AND FUND
EXPENSES" IS REPLACED BY THE FOLLOWING TABLE:
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) 2.50%
Sales Charges Imposed on Reinvested Distributions None
Redemption Fees None
Fees to Exchange Shares None
Contingent Deferred Sales Charges Imposed on Redemptions None
2. THE FIRST PARAGRAPH UNDER "THE EATON VANCE EXCHANGE PRIVILEGE" IS
REPLACED BY THE FOLLOWING PARAGRAPH:
Shares of a Fund may currently be exchanged for shares of
any of the following funds: Eaton Vance Cash Management Fund,
Eaton Vance Income Fund of Boston, Eaton Vance Municipal Bond
Fund L.P., Eaton Vance Tax Free Reserves and any fund in the Eaton
Vance Traditional Group of Funds on the basis of the net asset
value per share of each fund at the time of the exchange (plus, in
the case of an exchange made within six months of the date of
purchase, an amount equal to the difference, if any, between the
sales charge previously paid on the shares being exchanged and the
sales charge payable on the shares being acquired). Such exchange
offers are available only in states where shares of the fund
being acquired may be legally sold.
3. THE SALES CHARGE AND DEALER COMMISSION TABLES UNDER "HOW TO BUY FUND
SHARES" ARE REPLACED BY THE FOLLOWING TABLE:
The current sales charges and dealer commissions are:
<TABLE>
<CAPTION>
SALES CHARGE SALES CHARGE DEALER COMMISSION
AS PERCENTAGE OF AS PERCENTAGE OF AS PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED OFFERING PRICE
<S> <C> <C> <C>
Less than $50,000 2.50% 2.56% 2.75%
$50,000 but less than $100,000 2.25% 2.30% 2.50%
$100,000 but less than $250,000 1.75% 1.78% 2.00%
$250,000 but less than $500,000 1.25% 1.27% 1.50%
$500,000 but less than
$1,000,000 0.75% 0.76% 1.00%
$1,000,000 or more 0.00%<F-1> 0.00%<F1> 0.25%<F2>
<FN>
<F1> Fund shares purchased before March 27, 1995, at net asset value with no initial sales charge by virtue
of the purchase having been in the amount of $1 million or more may be subject to a contingent deferred sales
charge upon redemption.
<F2> The Principal Underwriter may pay Authorized Firms that initiate and are responsible for purchases of $1 million
or more a commission at an annual rate of 0.25% of average daily net assets paid quarterly for one year.
</TABLE>
4. IN THE DESCRIPTIONS OF THE STATEMENT OF INTENTION AND THE RIGHT OF
ACCUMULATION UNDER "EATON VANCE SHAREHOLDER SERVICES," THE $100,000 AMOUNTS ARE
REPLACED BY $50,000 AMOUNTS.
5. REFERENCES TO A CONTINGENT DEFERRED SALES CHARGE OR "CDSC" DO NOT APPLY
TO FUND SHARES PURCHASED ON OR AFTER MARCH 27, 1995.
MARCH 27, 1995 T-LPS
<PAGE> 2
EV TRADITIONAL NATIONAL LIMITED MATURITY
TAX FREE FUND
EV TRADITIONAL NATIONAL LIMITED MATURITY TAX FREE FUND (THE "FUND") IS A
MUTUAL FUND SEEKING TO PROVIDE A HIGH LEVEL OF CURRENT INCOME EXEMPT FROM
REGULAR FEDERAL INCOME TAX AND LIMITED PRINCIPAL FLUCTUATION. THE FUND INVESTS
ITS ASSETS IN NATIONAL LIMITED MATURITY TAX FREE PORTFOLIO (THE "PORTFOLIO"), A
DIVERSIFIED OPEN-END INVESTMENT COMPANY HAVING THE SAME INVESTMENT OBJECTIVE AS
THE FUND, RATHER THAN BY DIRECTLY INVESTING IN AND MANAGING ITS OWN PORTFOLIO OF
SECURITIES AS WITH HISTORICALLY STRUCTURED MUTUAL FUNDS. THE FUND IS A SERIES OF
EATON VANCE INVESTMENT TRUST (THE "TRUST").
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank or other insured depository institution, and are not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other government agency. Shares of the Fund involve
investment risks, including fluctuations in value and the possible loss of some
or all of the principal investment.
This Prospectus is designed to provide you with information you should know
before investing. Please retain this document for future reference. A Statement
of Additional Information dated November 25, 1994 for the Fund, as supplemented
from time to time, has been filed with the Securities and Exchange Commission
and is incorporated herein by reference. This Statement of Additional
Information is available without charge from the Fund's Principal Underwriter,
Eaton Vance Distributors, Inc., 24 Federal Street, Boston, MA 02110 (telephone
(800) 225-6265). The Portfolio's investment adviser is Boston Management and
Research (the "Investment Adviser"), a wholly-owned subsidiary of Eaton Vance
Management, and Eaton Vance Management is the administrator (the
"Administrator") of the Fund. The offices of the Investment Adviser and the
Administrator are located at 24 Federal Street, Boston, MA 02110.
--------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURI-
TIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Shareholder and Fund Expenses...... 2
The Fund's Financial Highlights.... 3
The Fund's Investment Objective.... 4
How the Fund and the Portfolio
Invest their Assets.............. 4
Organization of the Fund and the
Portfolio........................ 9
Management of the Fund and the
Portfolio........................ 11
Service Plan....................... 13
Valuing Fund Shares................ 14
How to Buy Fund Shares............. 15
<CAPTION>
Page
----
<S> <C>
How to Redeem Fund Shares.......... 17
Reports to Shareholders............ 18
The Lifetime Investing
Account/Distribution Options..... 19
The Eaton Vance Exchange
Privilege........................ 20
Eaton Vance Shareholder Services... 21
Distributions and Taxes............ 22
Performance Information............ 23
Statement of Intention and Escrow
Agreement........................ 24
</TABLE>
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PROSPECTUS DATED NOVEMBER 25, 1994
<PAGE> 3
SHAREHOLDER AND FUND EXPENSES(1)
--------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Maximum Sales Charges Imposed on Purchases of Shares (as a percentage of
offering price) 2.50%
Sales Charge Imposed on Reinvested Distributions None
Redemption Fees None
Fees to Exchange Shares None
Contingent Deferred Sales Charges (on purchases of $1 million or more) Imposed
on Redemptions During the First Eighteen Months (as a percentage of
redemption proceeds exclusive of all reinvestments and capital appreciation
in the account)(2) 1.00%
</TABLE>
ANNUAL FUND AND ALLOCATED PORTFOLIO OPERATING EXPENSES
<TABLE>
<S> <C>
(as a percentage of average net assets)
Investment Adviser Fee(3) 0.46%
Rule 12b-1 Fees (Service Plan) 0.00
Other Expenses 0.20
-----
Total Operating Expenses 0.66%
======
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS
------ -------
<S> <C> <C>
An investor would pay the following expenses (including initial maximum
sales charge) on a $1,000 investment, assuming (a) 5% annual return and
(b) redemption at the end of each time period: $ 32 $ 47
<FN>
Notes:
(1) The purpose of the above table and Example is to summarize the aggregate
expenses of the Fund and the Portfolio and to assist investors in
understanding the various costs and expenses that investors in the Fund
will bear directly or indirectly. The Trustees of the Trust believe that
over time the aggregate per share expenses of the Fund and the Portfolio
should be approximately equal to the per share expenses which the Fund
would incur if the Trust retained the services of an investment adviser and
the assets of the Fund were invested directly in the type of securities
being held by the Portfolio. Since the Fund does not yet have a sufficient
operating history, the percentages indicated as Annual Fund and Allocated
Portfolio Operating Expenses and the amounts included in the Example are
based on the Fund's and the Portfolio's projected fees and expenses for the
current fiscal year ending March 31, 1995. The amount in the Example for
the three-year period includes an estimate of Service Plan fees equivalent
to 0.05% of average net assets. The table and Example should not be
considered a representation of past or future expenses and actual expenses
may be greater or less than those shown. For further information regarding
the expenses of both the Fund and the Portfolio see "The Fund's Financial
Highlights", "Organization of the Fund and the Portfolio", "Management of
the Fund and the Portfolio", "Service Plan" and "How to Redeem Fund
Shares". Other investment companies with different distribution
arrangements and fees are investing in the Portfolio and additional such
companies may do so in the future. See "Organization of the Fund and the
Portfolio".
(2) If shares of the Fund are purchased at net asset value with no initial
sales charge by virtue of the purchase having been in the amount of $1
million or more and are redeemed within 18 months after the end of the
calendar month in which the purchase was made, a contingent deferred sales
charge of 1% will be imposed on such redemption. See "How to Buy Fund
Shares", "How to Redeem Fund Shares" and "Eaton Vance Shareholder
Services".
(3) The Portfolio's monthly advisory fee has two components, a fee based on
daily net assets and a fee based on daily gross income, as set forth in the
fee schedule on page 11.
</TABLE>
2
<PAGE> 4
THE FUND'S FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
The following information should be read in conjunction with the financial
statements included in the Statement of Additional Information. Further
information regarding the performance of the Fund will be contained in the
Fund's annual report to shareholders which may be obtained without charge by
contacting the Fund's Principal Underwriter, Eaton Vance Distributors, Inc.
--------------------------------------------------------------------------------
For the Period from the start of business, June 3, 1994, to September 30,
1994 (Unaudited)
<TABLE>
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD....................................................... $ 10,000
--------
INCOME (LOSS) FROM OPERATIONS:
Net investment income.................................................................... $ 0.161
Net realized and unrealized loss on investments.......................................... (0.170)
--------
Total loss from operations............................................................ $ (0.009)
--------
LESS DISTRIBUTIONS:
From net investment income............................................................... $ (0.161)
NET ASSET VALUE, END OF PERIOD............................................................. $ 9.830
--------
TOTAL RETURN(1)............................................................................ $ (0.09)%
========
RATIOS/SUPPLEMENTAL DATA*:
Net assets, end of period (000 omitted).................................................. $ 557
Ratio of net expenses to average net assets(1)........................................... 0.00%+
Ratio of net investment income to average net assets..................................... 4.83%+
PORTFOLIO TURNOVER
*For the period from the start of business, June 3, 1994, to September 30, 1994, the
operating expenses of the Fund reflect a preliminary allocation of expenses to the
Administrator. Had such action not been taken, net investment income per share and the
ratios would have been as follows:
NET INVESTMENT INCOME PER SHARE............................................................ $ (0.105)
========
RATIOS (As a percentage of average daily net assets):
Expenses(2).............................................................................. 8.48%+
Net investment income.................................................................... (3.65%)+
<FN>
+ Computed on an annualized basis.
(1) Total return is calculated assuming a purchase at the net asset value on the first day and a sale at
the net asset value on the last day of each period reported. Dividends and distributions, if any,
are assumed to be reinvested at the net asset value on the payable date.
(2) Includes the Fund's share of National Limited Maturity Tax Free Portfolio's allocated expenses.
</TABLE>
3
<PAGE> 5
THE FUND'S INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------
THE FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE (1) A HIGH LEVEL OF CURRENT INCOME
EXEMPT FROM THE REGULAR FEDERAL INCOME TAX AND (2) LIMITED PRINCIPAL
FLUCTUATION. The Fund seeks to meet its investment objective by investing its
assets in the National Limited Maturity Tax Free Portfolio (the "Portfolio"), a
separate registered investment company which invests primarily in municipal
obligations (as defined below) having a dollar weighted average duration of
between three and nine years and which are rated at least investment grade by a
major rating agency or, if unrated, determined to be of at least investment
grade quality by the Investment Adviser.
HOW THE FUND AND THE PORTFOLIO INVEST THEIR ASSETS
--------------------------------------------------------------------------------
THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING EITHER DIRECTLY
OR INDIRECTLY THROUGH ANOTHER OPEN-END MANAGEMENT INVESTMENT COMPANY PRIMARILY
(I.E., AT LEAST 80% OF ITS ASSETS DURING PERIODS OF NORMAL MARKET CONDITIONS) IN
DEBT OBLIGATIONS ISSUED BY OR ON BEHALF OF STATES, TERRITORIES AND POSSESSIONS
OF THE UNITED STATES, AND THE DISTRICT OF COLUMBIA AND THEIR POLITICAL
SUBDIVISIONS, AGENCIES OR INSTRUMENTALITIES, THE INTEREST ON WHICH IS EXEMPT
FROM THE REGULAR FEDERAL INCOME TAX AND IS NOT A TAX PREFERENCE ITEM UNDER THE
FEDERAL ALTERNATIVE MINIMUM TAX. The foregoing policy is a fundamental policy of
both the Fund and the Portfolio, which may not be changed unless authorized by a
vote of the shareholders of the Fund or the investors in the Portfolio, as the
case may be.
At least 80% of the Portfolio's net assets will normally be invested in
obligations rated at least investment grade (which are those rated Baa or higher
by Moody's Investors Service, Inc. ("Moody's") or BBB or higher by either
Standard & Poor's Ratings Group ("S&P") or Fitch Investors Service, Inc.
("Fitch")) or, if unrated, determined by the Portfolio's Investment Adviser to
be of at least investment grade quality. Municipal obligations rated Baa or BBB
may have speculative characteristics. Also, changes in economic conditions or
other circumstances are more likely to lead to a weakened capacity to make
principal and interest payments than in the case of higher rated obligations.
The Portfolio may invest up to 20% of its net assets in municipal obligations
rated below investment grade (but not lower than B by Moody's, S&P or Fitch) and
unrated municipal obligations considered to be of comparable quality by the
Investment Adviser. Securities rated below BBB or Baa are commonly known as
"junk bonds". See "Credit Quality -- Risks." The Portfolio may retain an
obligation whose rating drops below B after its acquisition if such retention is
considered desirable by the Portfolio's Investment Adviser; provided, however,
that the Portfolio's holdings of obligations rated below investment grade will
not exceed 35% of its net assets. For a description of municipal obligation
ratings, see the Fund's Statement of Additional Information.
In pursuing its investment objective, the Portfolio seeks to invest in a
portfolio having a dollar weighted average duration of between three and nine
years. Duration represents the dollar weighted average maturity of expected cash
flows (i.e. interest and principal payments) on one or more debt obligations,
discounted to their present values. The duration of an obligation is usually not
more than its stated maturity and is related to the degree of volatility in the
market value of the obligation. Maturity
4
<PAGE> 6
measures only the time until a bond or other debt security provides its final
payment; it does not take into account the pattern of a security's payments over
time. Duration takes both interest and principal payments into account and,
thus, in the Investment Adviser's opinion, is a more accurate measure of a debt
security's sensitivity to changes in interest rates. In computing the duration
of its portfolio, the Portfolio will have to estimate the duration of debt
obligations that are subject to prepayment or redemption by the issuer, based on
projected cash flows from such obligations.
The Portfolio may use various techniques to shorten or lengthen the dollar
weighted average duration of its portfolio, including the acquisition of debt
obligations at a premium or discount, and transactions in futures contracts and
options on futures. Subject to the requirement that the dollar weighted average
portfolio duration will not exceed nine years, the Portfolio may invest in
individual debt obligations of any maturity.
MUNICIPAL OBLIGATIONS. Municipal obligations include bonds, notes and
commercial paper issued by a municipality for a wide variety of both public and
private purposes. Public purpose municipal bonds include general obligation and
revenue bonds. General obligation bonds are backed by the taxing power of the
issuing municipality. Revenue bonds are backed by the revenues of a project or
facility. Municipal notes include bond anticipation, tax anticipation, revenue
anticipation and construction loan notes. Bond, tax and revenue anticipation
notes are short-term obligations that will be retired with the proceeds of an
anticipated bond issue, tax revenue or facility revenue, respectively.
Construction loan notes are short-term obligations that will be retired with the
proceeds of long-term mortgage financing.
Interest on certain "private activity bonds" issued after August 7, 1986 is
exempt from the regular Federal income tax applicable to individuals (and
corporations), but such interest (including a distribution by the Fund derived
from such interest) is treated as a tax preference item which could subject the
recipient to or increase the recipient's liability for the Federal alternative
minimum tax; as at September 30, 1994, the Portfolio had 8.36% of its net assets
invested in this fourth category of municipal obligations. The Portfolio may not
invest more than 20% of its net assets in these obligations and obligations that
pay interest subject to regular Federal income tax. For corporate shareholders,
the Fund's distributions derived from interest on all municipal obligations
(whenever issued) is included in "adjusted current earnings" for purposes of the
Federal alternative minimum tax applicable to corporations.
The Omnibus Budget Reconciliation Act of 1993 changed the federal income
tax treatment of market discount on long-term tax-exempt municipal obligations
(i.e., obligations with a term of more than one year) purchased in the secondary
market after April 30, 1993 from taxable capital gain to taxable ordinary
income. A long-term debt obligation is generally treated as acquired at a market
discount if the secondary market purchase price is less than (i) the stated
principal amount payable at maturity, in the case of an obligation that does not
have original issue discount or (ii) in the case of an obligation that does have
original issue discount, the sum of the issue price and any original issue
discount that accrued before the obligation was purchased. The Portfolio may
acquire municipal obligations at a market discount from time to time, and the
Fund's distributions will (when so required) include taxable income reflecting
the realization of such accrued discount by the Portfolio and its allocation to
the Fund.
DIVERSIFIED STATUS. The Portfolio is a "diversified" investment company under
the Investment Company Act of 1940. This means that with respect to 75% of its
total assets (1) the Portfolio may not invest more than 5% of its total assets
in the securities of any one issuer (except U.S. Government obligations) and
5
<PAGE> 7
(2) the Portfolio may not own more than 10% of the outstanding voting securities
of any one issuer. Since municipal obligations are not voting securities, there
is no limit on the percentage of a single issuer's obligations which the
Portfolio may own so long as it does not invest more than 5% of its total assets
in the securities of that issuer. Consequently, the Portfolio may invest in a
greater percentage of the outstanding securities of a single issuer than would
an investment company which invests in voting securities. As for the remaining
25% of the Portfolio's total assets not subject to the limitations described
above, there is no diversification requirement with respect to these assets, so
that all of such assets may be invested in the securities of any one issuer. To
the extent that the Portfolio is less diversified than that of other investment
companies, it may be subject to an increased risk of loss if the issuer is
unable to make interest or principal payments or if the market value of such
securities declines.
CONCENTRATION. The Portfolio may invest 25% or more of its assets in municipal
obligations of issuers located in the same state or in municipal obligations of
the same type, including without limitation the following: general obligations
of states and localities; lease rental obligations of state and local
authorities; obligations of state and local housing finance authorities,
municipal utilities systems or public housing authorities; obligations for
hospitals or life care facilities; or industrial development or pollution
control bonds issued for electric utility systems, steel companies, paper
companies or other purposes. This may make the Portfolio more susceptible to
adverse economic, political, or regulatory occurrences affecting a particular
category of issuers. For example, health care-related issuers are susceptible to
medicaid reimbursement policies, and national and state health care legislation.
As the Portfolio's concentration in the securities of a particular category of
issuer increases, so does the potential for fluctuation in the value of the
Fund's shares.
--------------------------------------------------------------------------------
THE FUND AND THE PORTFOLIO HAVE ADOPTED CERTAIN FUNDAMENTAL INVESTMENT
RESTRICTIONS WHICH ARE ENUMERATED IN DETAIL IN THE STATEMENT OF ADDITIONAL
INFORMATION AND WHICH MAY NOT BE CHANGED UNLESS AUTHORIZED BY A SHAREHOLDER VOTE
AND AN INVESTOR VOTE, RESPECTIVELY. EXCEPT FOR SUCH ENUMERATED RESTRICTIONS AND
AS OTHERWISE INDICATED IN THIS PROSPECTUS, THE INVESTMENT OBJECTIVE AND POLICIES
OF THE FUND AND THE PORTFOLIO ARE NOT FUNDAMENTAL POLICIES AND ACCORDINGLY MAY
BE CHANGED BY THE TRUSTEES OF THE TRUST AND THE PORTFOLIO WITHOUT OBTAINING THE
APPROVAL OF THE FUND'S SHAREHOLDERS OR AN INVESTOR IN THE PORTFOLIO, AS THE CASE
MAY BE. IF ANY CHANGES WERE MADE IN THE FUND'S INVESTMENT OBJECTIVE, THE FUND
MIGHT HAVE INVESTMENT OBJECTIVES DIFFERENT FROM THE OBJECTIVES WHICH AN INVESTOR
CONSIDERED APPROPRIATE AT THE TIME THE INVESTOR BECAME A SHAREHOLDER IN THE
FUND.
--------------------------------------------------------------------------------
MUNICIPAL LEASES. The Portfolio may invest in municipal leases and
participations therein, which frequently involve special risks. Leases and
installment purchase or conditional sale contracts (which normally provide for
title to the leased asset to pass eventually to the governmental issuer) have
evolved as a means for governmental issuers to acquire property and equipment
without meeting the constitutional and statutory requirements for the issuance
of debt. The debt-issuance limitations are deemed to be inapplicable to these
arrangements because of the inclusion in many leases or contracts of
"non-appropriation" clauses that provide that the governmental issuer has no
obligation to make future payments under the lease or contract unless money is
appropriated for such purpose by the appropriate legislative body on a yearly or
other periodic basis. Such arrangements are, therefore, subject to the risk that
the governmental issuer will not appropriate funds for lease payments. Certain
municipal lease obligations may be deemed illiquid for the
6
<PAGE> 8
purpose of the Portfolio's 15% limitation on investments in illiquid securities.
In the event the Portfolio acquires an unrated municipal lease obligation, the
Investment Adviser will be responsible for determining the credit quality of
such obligation on an ongoing basis, including an assessment of the likelihood
that the lease may or may not be cancelled.
ZERO COUPON BONDS. The Portfolio may invest in zero coupon bonds, which are
debt obligations that do not require the periodic payment of interest and are
issued at a significant discount from their face value. Such bonds experience
greater volatility in market value due to changes in interest rates than debt
obligations which provide for regular payments of interest. The Portfolio will
accrue income on such bonds for tax and accounting purposes in accordance with
applicable law, the Fund's proportionate share of which income is distributable
to shareholders of the Fund. Because no cash is received at the time such income
is accrued, the Portfolio may be required to liquidate other portfolio
securities to generate cash that the Fund may withdraw from the Portfolio to
satisfy the Fund's distribution obligations.
CREDIT QUALITY -- RISKS. Many municipal obligations offering high current
income are in the lowest investment grade category (Baa or BBB), lower
categories or may be unrated. As indicated above, the Portfolio may invest in
obligations rated below investment grade (but not lower than B by Moody's, S&P
or Fitch) and comparable unrated obligations. The lowest investment grade, lower
rated and comparable unrated obligations in which the Portfolio may invest will
have speculative characteristics in varying degrees. While such obligations may
have some quality and protective characteristics, these characteristics can be
expected to be offset or outweighed by uncertainties or major risk exposures to
adverse conditions. Lower rated and comparable unrated municipal obligations are
subject to the risk of an issuer's inability to meet principal and interest
payments on the obligations (credit risk) and may also be subject to price
volatility due to such factors as interest rate sensitivity, market perception
of the creditworthiness of the issuer and general market liquidity (market
risk). Lower rated or unrated municipal obligations are also more likely to
react to real or perceived developments affecting market and credit risk than
are more highly rated obligations, which react primarily to movements in the
general level of interest rates. The lowest investment grade, lower rated and
comparable unrated municipal obligations in which the Portfolio may invest will
have speculative characteristics in varying degrees. While such obligations may
have some quality and protective characteristics, these characteristics can be
expected to be offset or outweighed by uncertainties or major risk exposures to
adverse conditions. The Portfolio may retain defaulted obligations in its
portfolio when such retention is considered desirable by the Investment Adviser.
In the case of a defaulted obligation, the Portfolio may incur additional
expense seeking recovery of its investment. For a description of the Moody's,
S&P and Fitch ratings, see the Statement of Additional Information.
INSURED OBLIGATIONS. The Portfolio may also purchase municipal bonds that are
additionally secured by insurance, bank credit agreements, or escrow accounts.
The credit quality of companies which provide such credit enhancements will
affect the value of those securities. Although the insurance feature reduces
certain financial risks, the premiums for insurance and the higher market price
paid for insured obligations may reduce the Fund's current yield. Insurance
generally will be obtained from insurers with a claims-paying ability rated Aaa
by Moody's or AAA by S&P or Fitch. The insurance does not guarantee the market
value of the insured obligations or the net asset value of the Fund's shares.
MARKET CONDITIONS. The management of the Portfolio believes that, in general,
the secondary market for some municipal obligations, (including issues which are
privately placed with the Portfolio), is less liquid than that for taxable debt
obligations or for large issues of municipal obligations that trade in a
national
7
<PAGE> 9
market. No established resale market exists for certain of the municipal
obligations in which the Portfolio may invest. The market for obligations rated
below investment grade is also likely to be less liquid than the market for
higher rated obligations. These considerations may restrict the availability of
such obligations, may affect the choice of securities sold to meet redemption
requests and may limit the Portfolio's ability to sell or dispose of such
securities. Also, valuation of such obligations may be more difficult.
NET ASSET VALUE FLUCTUATION. The net asset value of the Fund will change in
response to fluctuations in prevailing interest rates and changes in the value
of the securities held by the Portfolio. When interest rates decline, the value
of securities already held by the Portfolio can be expected to rise. Conversely,
when interest rates rise, the value of existing portfolio security holdings can
be expected to decline. The degree of price volatility is related to the
duration of a portfolio security, with shorter duration securities exhibiting
less price volatility than longer duration securities with the same changes in
interest rates. Because the Portfolio intends to limit its average portfolio
duration to no more than nine years, the net asset value of the Fund can be
expected to be less sensitive to changes in interest rates than a fund with a
longer average portfolio duration. Therefore, an investment in shares of the
Fund will not constitute a complete investment program.
SHORT-TERM TRADING. The Portfolio may sell securities in anticipation of a
market decline (a rise in interest rates) or purchase and later sell securities
in anticipation of a market rise (a decline in interest rates). In addition, a
security may be sold and another purchased at approximately the same time to
take advantage of what the Portfolio believes to be a temporary disparity in the
normal yield relationship between the two securities. Yield disparities may
occur for reasons not directly related to the investment quality of particular
issues or the general movement of interest rates, such as changes in the overall
demand for or supply of various types of municipal obligations or changes in the
investment objectives of investors. Such trading may be expected to increase the
portfolio turnover rate and the expenses incurred in connection with such
trading. The Portfolio anticipates that its annual portfolio turnover rate will
generally not exceed 100% (excluding turnover of securities having a maturity of
one year or less).
WHEN-ISSUED SECURITIES. The Portfolio may purchase securities on a
"when-issued" basis, which means that payment and delivery occur on a future
settlement date. The price and yield of such securities are generally fixed on
the date of commitment to purchase. However, the market value of the securities
may fluctuate prior to delivery and upon delivery the securities may be worth
more or less than the Portfolio agreed to pay for them. The Portfolio will not
accrue income in respect of a when-issued security prior to its stated delivery
date. The Portfolio will maintain in a segregated account sufficient assets to
cover its outstanding purchase obligations.
FUTURES AND OPTIONS TRANSACTIONS. To hedge against changes in interest rates,
the Portfolio may purchase and sell various kinds of futures contracts, and
purchase and write call and put options on futures contracts. The Portfolio may
also enter into closing purchase and sale transactions with respect to such
contracts and options. The futures contracts may be based on various debt
securities (such as U.S. Government securities), securities indices and other
financial instruments and indices. The Portfolio will engage in futures and
related options transactions for bona fide hedging or non-hedging purposes as
defined in or permitted by regulations of the Commodity Futures Trading
Commission. The Portfolio will engage in such transactions for non-hedging
purposes only in order to enhance total return by using a futures position as a
lower cost substitute for a securities position that the Portfolio is otherwise
authorized to enter into.
8
<PAGE> 10
The Portfolio may not purchase or sell futures contracts or purchase or
sell related options, except for closing purchase or sale transactions, if
immediately thereafter the sum of the amount of margin deposits on the
Portfolio's outstanding positions in futures and related options and the amount
of premiums paid for outstanding positions in options on futures would exceed 5%
of the market value of the Portfolio's net assets. There are currently no other
percentage limitations on the Portfolio's transactions in futures contracts or
options on futures; provided, however, that at least 80% of the Portfolio's net
assets will be invested in municipal obligations as described above. These
transactions involve brokerage costs, require margin deposits and, in the case
of futures contracts and options requiring the Portfolio to purchase securities,
require the Portfolio to segregate liquid high grade debt securities in an
amount equal to the underlying value of such contracts and options. In addition,
while transactions in futures contracts and options on futures may reduce
certain risks, such transactions themselves involve (1) liquidity risk that
contractual positions cannot be easily closed out in the event of market
changes, (2) correlation risk that changes in the value of hedging positions may
not match the market fluctuations intended to be hedged (especially given that
the only futures contracts currently available to hedge municipal obligations
are futures on various U.S. Government securities and on municipal securities
indices), (3) market risk that an incorrect prediction by the Investment Adviser
of interest rates may cause the Portfolio to perform less well than if such
positions had not been entered into, and (4) skills different from those needed
to select portfolio securities. Distribution by the Fund from any net gains
realized on the Portfolio's transactions in futures and options on futures will
be taxable.
ORGANIZATION OF THE FUND AND THE PORTFOLIO
--------------------------------------------------------------------------------
THE FUND IS A SERIES OF EATON VANCE INVESTMENT TRUST (THE "TRUST"), A BUSINESS
TRUST ESTABLISHED UNDER MASSACHUSETTS LAW PURSUANT TO A DECLARATION OF TRUST
DATED OCTOBER 23, 1985, AS AMENDED. THE TRUST IS A MUTUAL FUND -- AN OPEN-END
MANAGEMENT INVESTMENT COMPANY. The Trustees of the Trust are responsible for the
overall management and supervision of its affairs. The Trust may issue an
unlimited number of shares of beneficial interest (no par value per share) in
one or more series and because the Trust can offer separate series (such as the
Funds) it is known as a "series company." Each Share represents an equal
proportionate beneficial interest in the Fund. When issued and outstanding, the
shares are fully paid and nonassessable by the Fund and redeemable as described
under "How to Redeem Fund Shares." Shareholders are entitled to one vote for
each full share held. Fractional shares may be voted proportionately. Shares
have no preemptive or conversion rights and are freely transferable. Upon
liquidation of the Fund, shareholders are entitled to share pro rata in the net
assets of the Fund available for distribution to shareholders.
NATIONAL LIMITED MATURITY TAX FREE PORTFOLIO (THE "PORTFOLIO") IS ORGANIZED
AS A TRUST UNDER THE LAWS OF THE STATE OF NEW YORK AND IS TREATED AS A
PARTNERSHIP FOR FEDERAL TAX PURPOSES. The Portfolio, as well as the Trust,
intends to comply with all applicable Federal and state securities laws. The
Portfolio's Declaration of Trust provides that the Fund and other entities
permitted to invest in the Portfolio (e.g., other U.S. and foreign investment
companies, and common and commingled trust funds) will each be liable for all
obligations of the Portfolio. However, the risk of the Fund incurring financial
loss on account of such liability is limited to circumstances in which both
inadequate insurance exists and the Portfolio itself is unable to meet its
obligations. Accordingly, the Trustees of the Trust believe that neither the
Fund nor its shareholders will be adversely affected by reason of the Fund
investing in the Portfolio.
9
<PAGE> 11
SPECIAL INFORMATION ON THE FUND/PORTFOLIO INVESTMENT STRUCTURE. An investor in
the Fund should be aware that the Fund, unlike mutual funds which directly
acquire and manage their own portfolios of securities, seeks to achieve its
investment objective by investing its assets in an interest in the Portfolio,
which is a separate investment company with an identical investment objective.
Therefore, the Fund's interest in the securities owned by the Portfolio is
indirect. In addition to selling an interest to the Fund, the Portfolio may sell
interests to other affiliated and non-affiliated mutual funds or institutional
investors. Such investors will invest in the Portfolio on the same terms and
conditions and will pay a proportionate share of the Portfolio's expenses.
However, the other investors investing in the Portfolio are not required to sell
their shares at the same public offering price as the Fund due to variations in
sales commissions and other operating expenses. Therefore, investors in the Fund
should be aware that these differences may result in differences in returns
experienced by investors in the different funds that invest in the Portfolio.
Such differences in returns are also present in other mutual fund structures,
including funds that have multiple classes of shares. For information regarding
the investment objective, policies and restrictions of the Portfolio, see "The
Fund's Investment Objective" and "How the Fund and the Portfolio Invest their
Assets". Further information regarding investment practices may be found in the
Statement of Additional Information.
The Trustees of the Trust have considered the advantages and disadvantages
of investing the assets of the Fund in the Portfolio, as well as the advantages
and disadvantages of the two-tier format. The Trustees believe that the
structure offers opportunities for substantial growth in the assets of the
Portfolio, and affords the potential for economies of scale for the Fund, at
least when the assets of the Portfolio exceed $500 million.
The Fund may withdraw (completely redeem) all its assets from the Portfolio
at any time if the Board of Trustees of the Trust determines that it is in the
best interest of the Fund to do so. The investment objective and the
nonfundamental investment policies of the Fund and the Portfolio may be changed
by the Trustees of the Trust and the Portfolio without obtaining the approval of
the shareholders of the Fund or the investors in the Portfolio. Any such change
of the investment objective of the Fund or the Portfolio will be preceded by
thirty days advance written notice to the shareholders of the Fund or the
investors in the Portfolio, as the case may be. In the event the Fund withdraws
all of its assets from the Portfolio, or the Board of Trustees of the Trust
determines that the investment objective of the Portfolio is no longer
consistent with the investment objective of the Fund, such Trustees would
consider what action might be taken, including investing all the assets of the
Fund in another pooled investment entity or retaining an investment adviser to
manage the Fund's assets in accordance with its investment objective. The Fund's
investment performance may be affected by a withdrawal of all its assets from
the Portfolio.
Information regarding other pooled investment entities or funds which
invest in the Portfolio may be obtained by contacting Eaton Vance Distributors,
Inc. (the "Principal Underwriter" or "EVD"), 24 Federal Street, Boston, MA
02110, (617) 482-8260. Smaller funds investing in the Portfolio may be adversely
affected by the actions of larger funds investing in the Portfolio. For example,
if a large fund withdraws from the Portfolio, the remaining funds may experience
higher pro rata operating expenses, thereby producing lower returns.
Additionally, the Portfolio may become less diverse, resulting in increased
portfolio risk, and experience decreasing economies of scale. However, this
possibility exists as well for historically structured mutual funds which have
large or institutional investors.
Until recently, the Administrator sponsored and advised historically
structured funds. Funds which invest all their assets in interests in a separate
investment company are a relatively new development in the
10
<PAGE> 12
mutual fund industry and, therefore, the Fund may be subject to additional
regulations than historically structured funds.
The Declaration of Trust of the Portfolio provides that the Portfolio will
terminate 120 days after the complete withdrawal of the Fund or any other
investor in the Portfolio, unless either the remaining investors, by unanimous
vote at a meeting of such investors, or a majority of the Trustees of the
Portfolio, by written instrument consented to by all investors, agree to
continue the business of the Portfolio. This provision is consistent with
treatment of the Portfolio as a partnership for Federal income tax purposes. See
"Distributions and Taxes" for further information. Whenever the Fund as an
investor in the Portfolio is requested to vote on matters pertaining to the
Portfolio (other than the termination of the Portfolio's business, which may be
determined by the Trustees of the Portfolio without investor approval), the Fund
will hold a meeting of Fund shareholders and will vote its interest in the
Portfolio for or against such matters proportionately to the instructions to
vote for or against such matters received from Fund shareholders. The Fund shall
vote shares for which it receives no voting instructions in the same proportion
as the shares for which it receives voting instructions. Other investors in the
Portfolio may alone or collectively acquire sufficient voting interests in the
Portfolio to control matters relating to the operation of the Portfolio, which
may require the Fund to withdraw its investment in the Portfolio or take other
appropriate action. Any such withdrawal could result in a distribution "in kind"
of portfolio securities (as opposed to a cash distribution from the Portfolio).
If securities are distributed, the Fund could incur brokerage, tax or other
charges in converting the securities to cash. In addition, the distribution in
kind may result in a less diversified portfolio of investments or adversely
affect the liquidity of the Fund. Notwithstanding the above, there are other
means for meeting shareholder redemption requests, such as borrowing.
The Trustees of the Trust, including a majority of the noninterested
Trustees, have approved written procedures designed to identify and address any
potential conflicts of interest arising from the fact that the Trustees of the
Trust and the Trustees of the Portfolio are the same. Such procedures require
each Board to take actions to resolve any conflict of interest between the Fund
and the Portfolio, and it is possible that the creation of separate boards may
be considered. For further information concerning the Trustees and officers of
each of the Trust and the Portfolio, see the Statement of Additional
Information.
MANAGEMENT OF THE FUND AND THE PORTFOLIO
--------------------------------------------------------------------------------
THE PORTFOLIO ENGAGES BOSTON MANAGEMENT AND RESEARCH ("BMR"), A WHOLLY-OWNED
SUBSIDIARY OF EATON VANCE MANAGEMENT ("EATON VANCE"), AS ITS INVESTMENT ADVISER.
EATON VANCE, ITS AFFILIATES AND ITS PREDECESSOR COMPANIES HAVE BEEN MANAGING
ASSETS OF INDIVIDUALS AND INSTITUTIONS SINCE 1924 AND MANAGING INVESTMENT
COMPANIES SINCE 1931.
11
<PAGE> 13
Acting under the general supervision of the Board of Trustees of the
Portfolio, BMR manages the Portfolio's investments and affairs. Under its
investment advisory agreement with the Portfolio, BMR receives a monthly
advisory fee equal to the aggregate of
(a) a daily asset based fee computed by applying the annual asset rate
applicable to that portion of the total daily net assets in each
Category as indicated below, plus
(b) a daily income based fee computed by applying the daily income rate
applicable to that portion of the total daily gross income (which
portion shall bear the same relationship to the total daily gross
income on such day as that portion of the total daily net assets in
the same Category bears to the total daily net assets on such day)
in each Category as indicated below:
<TABLE>
<CAPTION>
ANNUAL DAILY
CATEGORY DAILY NET ASSETS ASSET RATE INCOME RATE
-------- ------------------------------------------ ------------ -----------
<C> <S> <C> <C>
1 up to $500 million........................ 0.300% 3.00%
2 $500 million but less than $1 billion..... 0.275% 2.75%
3 $1 billion but less than $1.5 billion..... 0.250% 2.50%
4 $1.5 billion but less than $2 billion..... 0.225% 2.25%
5 $2 billion but less than $3 billion....... 0.200% 2.00%
6 $3 billion and over....................... 0.175% 1.75%
</TABLE>
As at September 30, 1994, the Portfolio had net assets of $178,999,854. For
the six months ended September 30, 1994, the Portfolio paid BMR advisory fees
equivalent to 0.46% (annualized) of the Portfolio's average daily net assets for
such period.
BMR also furnishes for the use of the Portfolio office space and all
necessary office facilities, equipment and personnel for servicing the
investments of the Portfolio. The Portfolio is responsible for the payment of
all expenses other than those expressly stated to be payable by BMR under the
investment advisory agreement.
Raymond E. Hender has acted as the portfolio manager since the Portfolio
commenced operations. He joined Eaton Vance and BMR as Vice President in 1992.
Previously, he was a Senior Vice President of Bank of New England (1989-1992)
and a Portfolio Manager at Fidelity Management & Research Company (1977-1988).
Municipal obligations are normally traded on a net basis (without
commission) through broker-dealers and banks acting for their own account. Such
firms attempt to profit from such transactions by buying at the bid price and
selling at the higher asked price of the market, and the difference is
customarily referred to as the spread. In selecting firms which will execute
portfolio transactions, BMR judges their professional ability and quality of
service and uses its best efforts to obtain execution at prices which are
advantageous to the Portfolio and at reasonably competitive spreads. Subject to
the foregoing, BMR may consider sales of shares of the Fund or of other
investment companies sponsored by BMR or Eaton Vance as a factor in the
selection of firms to execute portfolio transactions.
BMR OR EATON VANCE ACTS AS INVESTMENT ADVISER TO INVESTMENT COMPANIES AND
VARIOUS INDIVIDUAL AND INSTITUTIONAL CLIENTS WITH ASSETS UNDER MANAGEMENT OF
APPROXIMATELY $15 BILLION. Eaton Vance is a wholly-owned subsidiary of Eaton
Vance Corp., a publicly held holding company. Eaton Vance Corp., through its
subsidiaries and
12
<PAGE> 14
affiliates, engages in investment management and marketing activities, fiduciary
and banking services, oil and gas operations, real estate investment, consulting
and management, and development of precious metals properties.
The Trust has retained the services of Eaton Vance to act as administrator
of the Fund. The Trust has not retained the services of an investment adviser
since the Trust seeks to achieve the investment objective of the Fund by
investing its assets in the Portfolio. Eaton Vance provides the Fund with
general office facilities and supervises the overall administration of the Fund.
For these services Eaton Vance receives no compensation. The Trustees may
determine, in the future, to compensate Eaton Vance for such services.
The Portfolio and the Fund, as the case may be, will each be responsible
for all respective costs and expenses not expressly stated to be payable by BMR
under the investment advisory agreement, by Eaton Vance under the administrative
services agreement, or by EVD under the distribution agreement. Such costs and
expenses to be borne by the Portfolio and the Fund, as the case may be, include,
without limitation; custody and transfer agency fees and expenses, including
those for determining net asset value and keeping accounting books and records;
expenses of pricing and valuation services; the cost of share certificates;
membership dues in investment company organizations; expenses of acquiring,
holding and disposing of securities and other investments; fees and expenses of
registering under the securities laws and the governmental fees; expenses of
reporting to shareholders and investors; proxy statements and other expenses of
shareholders' or investors' meetings; insurance premiums; printing and mailing
expenses; interest, taxes and corporate fees; legal and accounting expenses;
compensation and expenses of Trustees not affiliated with BMR or Eaton Vance;
and investment advisory fees, and, if any, administrative services fees. The
Portfolio and the Fund will also each bear expenses incurred in connection with
litigation in which the Portfolio or the Fund, as the case may be, is a party
and any legal obligation to indemnify its respective officers and Trustees with
respect thereto.
SERVICE PLAN
--------------------------------------------------------------------------------
In addition to advisory fees and other expenses, the Fund pays service fees
pursuant to a Service Plan (the "Plan") designed to meet the requirements of
Rule 12b-1 under the Investment Company Act of 1940 and the service fee
requirements of the revised sales charge rule of the National Association of
Securities Dealers, Inc. The Plan is further described in the Statement of
Additional Information, and the following is a description of the salient
features of the Plan.
THE PLAN PROVIDES THAT THE FUND MAY MAKE SERVICE FEE PAYMENTS FOR PERSONAL
SERVICES AND/OR THE MAINTENANCE OF SHAREHOLDER ACCOUNTS TO THE PRINCIPAL
UNDERWRITER, AUTHORIZED FIRMS AND OTHER PERSONS IN AMOUNTS NOT EXCEEDING .25% OF
THE FUND'S AVERAGE DAILY NET ASSETS FOR ANY FISCAL YEAR. The Trustees of the
Trust have initially implemented the Plan by authorizing the Fund to make
service fee payments to the Principal Underwriter and Authorized Firms in
amounts not expected to exceed .15% of the Fund's average daily net assets for
any fiscal year which is based on the value of Fund shares sold by such persons
and remaining outstanding for at least twelve months. However, the Plan
authorizes the Trustees of the Trust on behalf of the Fund to increase payments
to the Principal Underwriter, Authorized Firms and other persons from time to
time without further action by shareholders of the Fund, provided that the
aggregate amount of payments made to such persons under the Plan in any fiscal
year of the Fund does not exceed .25% of the Fund's average
13
<PAGE> 15
daily net assets. The Fund will commence accruing for its service fee payments
during the quarter ended June 30, 1995.
VALUING FUND SHARES
--------------------------------------------------------------------------------
THE FUND VALUES ITS SHARES ONCE ON EACH DAY THE NEW YORK STOCK EXCHANGE (THE
"EXCHANGE") IS OPEN FOR TRADING, as of the close of regular trading on the
Exchange (normally 4:00 p.m. New York time). The Fund's net asset value per
share is determined by its custodian, Investors Bank & Trust Company ("IBT"),
(as agent for the Fund) in the manner authorized by the Trustees of the Trust.
Net asset value is computed by dividing the value of the Fund's total assets,
less its liabilities, by the number of Fund shares outstanding. Because the Fund
invests substantially all of its assets in an interest in the Portfolio, the
Fund's net asset value will reflect the value of its interest in the Portfolio
(which, in turn, reflects the underlying value of the Portfolio's assets and
liabilities).
Financial service firms ("Authorized Firms") must communicate an investor's
order to the Principal Underwriter prior to the close of the Principal
Underwriter's business day to receive that day's net asset value per share and
the public offering price based thereon. It is the Authorized Firms'
responsibility to transmit orders promptly to the Principal Underwriter, which
is a wholly-owned subsidiary of Eaton Vance.
The Portfolio's net asset value is also determined as of the close of
regular trading on the Exchange by IBT (as custodian and agent for the
Portfolio) based on market or fair value in the manner authorized by the
Trustees of the Portfolio. Municipal obligations will normally be valued on the
basis of valuations furnished by a pricing service. For further information
regarding the valuation of the Portfolio's assets, see "Determination of Net
Asset Value" in the Statement of Additional Information. Eaton Vance Corp. owns
77.3% of the outstanding stock of IBT, the Fund's and the Portfolio's custodian.
--------------------------------------------------------------------------------
SHAREHOLDERS MAY DETERMINE THE VALUE OF THEIR INVESTMENT BY MULTIPLYING THE
NUMBER OF FUND SHARES OWNED BY THE CURRENT NET ASSET VALUE.
--------------------------------------------------------------------------------
14
<PAGE> 16
HOW TO BUY FUND SHARES
--------------------------------------------------------------------------------
SHARES OF THE FUND MAY BE PURCHASED FOR CASH OR MAY BE ACQUIRED IN EXCHANGE FOR
SECURITIES. Investors may purchase shares of the Fund through Authorized Firms
at the effective public offering price, which price is based on the effective
net asset value per share plus the applicable sales charge. The Fund receives
the net asset value, while the sales charge is divided between the Authorized
Firm and the Principal Underwriter. The Principal Underwriter will furnish the
names of Authorized Firms to an investor upon request. The Fund may suspend the
offering of shares at any time and may refuse an order for the purchase of
shares.
The sales charge may vary depending on the size of the purchase and the
number of shares of Eaton Vance funds the investors may already own, any
arrangement to purchase additional shares during a 13-month period or special
purchase programs. Complete details of how investors may purchase shares at
reduced sales charges under a Statement of Intention, Right of Accumulation, or
various employee benefit plans are available from Authorized Firms or the
Principal Underwriter.
The current sales charges are:
<TABLE>
<CAPTION>
SALES CHARGE SALES CHARGE
AS PERCENTAGE OF AS PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED
<S> <C> <C>
Under $100,000.............................................. 2.50% 2.56%
$100,000 but less than $250,000............................. 2.00 2.04
$250,000 but less than $500,000............................. 1.50 1.52
$500,000 but less than $1,000,000........................... 1.25 1.27
$1,000,000 or more.......................................... 0.0 * 0.0 *
<FN>
*No sales charge is payable at the time of purchase on investments of $1
million or more. A contingent deferred sales charge ("CDSC") of 1% will be
imposed on such investments, as described below, in the event of certain
redemption transactions within 18 months of purchase.
</TABLE>
The current dealer commission is:
<TABLE>
<CAPTION>
DEALER COMMISSION
AS PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE
<S> <C>
Under $100,000........................................................... 2.75%
$100,000 but less than $250,000.......................................... 2.25
$250,000 but less than $500,000.......................................... 1.75
$500,000 but less than $1,000,000........................................ 1.50
$1,000,000 or more....................................................... 0.0 **
<FN>
**The Principal Underwriter may pay a commission to Authorized Firms who
initiate and are responsible for purchases of $1 million or more as follows:
1.00% on sales up to $2 million, plus 0.80% on the next $1 million, 0.20% on
the next $2 million and 0.08% on the excess over $5 million.
</TABLE>
The Principal Underwriter may at times allow discounts up to the full sales
charge. During periods when the discount includes the full sales charge, such
Firms may be deemed to be underwriters as that term is defined in the Securities
Act of 1933.
15
<PAGE> 17
The Principal Underwriter may, from time to time, at its own expense,
provide additional incentives to Authorized Firms which employ registered
representatives who sell a minimum dollar amount of the Fund's shares and/or
shares of other funds distributed by the Principal Underwriter. In some
instances, such additional incentives may be offered only to certain Authorized
Firms whose representatives are expected to sell significant amounts of shares.
An initial investment in the Fund must be at least $1,000. Once an account
has been established the investor may send investments of $50 or more at any
time directly to the Fund's transfer agent as follows: The Shareholder Services
Group, Inc., BOS725, P.O. Box 1559, Boston, MA 02104. The $1,000 minimum initial
investment is waived for Bank Draft Investing accounts, which may be established
with an investment of $50 or more. See "Eaton Vance Shareholder Services".
Shares of the Fund may be sold at net asset value to current and retired
Directors and Trustees of Eaton Vance funds, including the Portfolio; to
officers and employees and clients of Eaton Vance and its affiliates; to
registered representatives and employees of Authorized Firms; bank employees who
refer customers to registered representatives of Authorized Firms; and to such
persons' spouses and children under the age of 21 and their beneficial accounts.
Shares may also be issued at net asset value in connection with the merger of an
investment company with the Fund and to investors making an investment as part
of a fixed fee program whereby an entity unaffiliated with the Investment
Adviser provides multiple investment services, such as management, brokerage and
custody.
ACQUIRING FUND SHARES IN EXCHANGE FOR SECURITIES. IBT, as escrow agent, will
receive securities acceptable to Eaton Vance, as Administrator, in exchange for
Fund shares at the applicable public offering price as shown above. The minimum
value of securities or securities and cash accepted for deposit is $5,000.
Securities accepted will be sold by IBT as agent for the account of their owner
on the day of their receipt by IBT or as soon thereafter as possible. The number
of Fund shares to be issued in exchange for securities will be the aggregate
proceeds from the sale of such securities, divided by the applicable net asset
value per Fund share on the day such proceeds are received. EATON VANCE WILL USE
REASONABLE EFFORTS TO OBTAIN THE CURRENT MARKET PRICE FOR SUCH SECURITIES BUT
DOES NOT GUARANTEE THE BEST AVAILABLE PRICE. EATON VANCE WILL ABSORB ANY
TRANSACTION COSTS, SUCH AS COMMISSIONS, ON THE SALE OF THE SECURITIES.
Securities determined to be acceptable should be transferred via book entry
or physically delivered, in proper form for transfer, through an Authorized
Firm, together with a completed and signed Letter of Transmittal in approved
form (available from Authorized Firms), as follows:
IN THE CASE OF BOOK ENTRY:
Deliver through Depository Trust Co.
Broker #2212
Investors Bank & Trust Company
For A/C EV Traditional National Limited Maturity Tax Free Fund
16
<PAGE> 18
IN THE CASE OF PHYSICAL DELIVERY:
Investors Bank & Trust Company
Attention: EV Traditional National Limited Maturity Tax Free Fund
Physical Securities Processing Settlement Area
89 South Street
Boston, MA 02111
Investors who are contemplating an exchange of securities for shares of the
Fund, or their representatives, must contact Eaton Vance to determine whether
the securities are acceptable before forwarding such securities to IBT. Eaton
Vance reserves the right to reject any securities. Exchanging securities for
Fund shares may create a taxable gain or loss. Each investor should consult his
or her tax adviser with respect to the particular Federal, state and local tax
consequences of exchanging securities for Fund shares.
--------------------------------------------------------------------------------
IF YOU DON'T HAVE AN AUTHORIZED FIRM, EATON VANCE CAN RECOMMEND ONE.
--------------------------------------------------------------------------------
HOW TO REDEEM FUND SHARES
--------------------------------------------------------------------------------
A SHAREHOLDER MAY REDEEM SHARES OF THE FUND BY DELIVERING TO THE SHAREHOLDER
SERVICES GROUP, INC., BOS725, P.O. BOX 1559, BOSTON, MASSACHUSETTS 02104, during
its business hours a written request for redemption in good order, plus any
share certificates with executed stock powers. The redemption price will be
based on the net asset value per Fund share next computed after such delivery.
Good order means that all relevant documents must be endorsed by the record
owner(s) exactly as the shares are registered and the signature(s) must be
guaranteed by a member of either the Securities Transfer Association's STAMP
program or the New York Stock Exchange's Medallion Signature Program, or certain
banks, savings and loan institutions, credit unions, securities dealers,
securities exchanges, clearing agencies and registered securities association as
required by a regulation of the Securities and Exchange Commission (the
"Commission") and acceptable to The Shareholder Services Group, Inc. In
addition, in some cases, good order may require the furnishing of additional
documents such as where shares are registered in the name of a corporation,
partnership or fiduciary.
Within seven days after receipt of a redemption request in good order by
The Shareholder Services Group, Inc., the Fund will make payment in cash for the
net asset value of the shares as of the date determined above, reduced by the
amount of any Federal income tax required to be withheld. Although the Fund
normally expects to make payment in cash for redeemed shares, the Trust, subject
to compliance with applicable regulations, has reserved the right to pay the
redemption price of shares of the Fund, either totally or partially, by a
distribution in kind of readily marketable securities withdrawn by the Fund from
the Portfolio. The securities so distributed would be valued pursuant to the
Portfolio's valuation procedures. If a shareholder received a distribution in
kind, the shareholder could incur brokerage or other charges in converting the
securities to cash.
To sell shares at their net asset value through an Authorized Firm (a
repurchase), a shareholder can place a repurchase order with the Authorized
Firm, which may charge a fee. The value of such shares is based upon the net
asset value calculated after EVD, as the Fund's agent, receives the order. It is
the
17
<PAGE> 19
Authorized Firm's responsibility to transmit promptly repurchase orders to EVD.
Throughout this Prospectus, the word "redemption" is generally meant to include
a repurchase.
If shares were recently purchased, the proceeds of redemption (or
repurchase) will not be sent until the check (including a certified or cashier's
check) received for the shares purchased has cleared. Payment for shares
tendered for redemption may be delayed up to 15 days from the purchase date when
the purchase check has not yet cleared. Redemptions or repurchases may result in
a taxable gain or loss.
Due to the high cost of maintaining small accounts, the Fund reserves the
right to redeem Fund accounts with balances of less than $1,000. Prior to such a
redemption, shareholders will be given 60 days written notice to make an
additional purchase. Thus, an investor making an initial investment of $1,000
would not be able to redeem shares without being subject to this policy.
However, no such redemption would be required by the Fund if the cause of the
low account balance was a reduction in the net asset value of Fund shares.
If shares have been purchased at net asset value with no initial sales
charge by virtue of the purchase having been in the amount of $1 million or more
and are redeemed within 18 months after the end of the calendar month in which
the purchase was made, a CDSC of 1% will be imposed on such redemption. The CDSC
will be retained by the Principal Underwriter.
The CDSC will be imposed on an amount equal to the lesser of the current
market value or the original purchase price of the shares redeemed. Accordingly,
no CDSC will be imposed on increases in account value above the initial purchase
price, including any dividends or distributions that have been reinvested in
additional shares. In determining whether a CDSC is applicable to a redemption,
the calculation will be made in a manner that results in the lowest possible
rate being charged. It will be assumed that redemptions are made first from any
shares in the shareholder's account that are not subject to a CDSC.
The CDSC is waived for redemptions involving certain liquidation, merger or
acquisition transactions involving other investment companies. If a shareholder
reinvests redemption proceeds within the 30-day period and in accordance with
the conditions set forth under "Eaton Vance Shareholder Services -- Reinvestment
Privilege," the shareholder's account will be credited with the amount of any
CDSC paid on such redeemed shares.
REPORTS TO SHAREHOLDERS
--------------------------------------------------------------------------------
THE FUND WILL ISSUE TO ITS SHAREHOLDERS SEMI-ANNUAL AND ANNUAL REPORTS
CONTAINING FINANCIAL STATEMENTS. Financial statements included in annual reports
are audited by the Fund's independent certified public accountants. Shortly
after the end of each calendar year, the Fund will furnish all shareholders with
information necessary for preparing Federal and state income tax returns.
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THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS
--------------------------------------------------------------------------------
AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF FUND SHARES, THE FUND'S TRANSFER
AGENT, THE SHAREHOLDER SERVICES GROUP, INC., WILL SET UP A LIFETIME INVESTING
ACCOUNT FOR THE INVESTOR ON THE FUND'S RECORDS. This account is a complete
record of all transactions between the investor and the Fund which at all times
shows the balance of shares owned. The Fund will not issue share certificates
except upon request.
At least quarterly, shareholders will receive a statement showing complete
details of any transaction and the current share balance in the account. THE
LIFETIME INVESTING ACCOUNT ALSO PERMITS A SHAREHOLDER TO MAKE ADDITIONAL
INVESTMENTS IN SHARES BY SENDING A CHECK FOR $50 OR MORE to The Shareholder
Services Group, Inc.
Any questions concerning a shareholder's account or services available may
be directed by telephone to EATON VANCE SHAREHOLDER SERVICES at 800-225-6265,
extension 2, or in writing to The Shareholder Services Group, Inc., BOS725, P.O.
Box 1559, Boston, MA 02104 (please provide your name and account number).
THE FOLLOWING DISTRIBUTION OPTIONS WILL BE AVAILABLE TO ALL LIFETIME
INVESTING ACCOUNTS and may be changed as often as desired by written notice to
the Fund's dividend disbursing agent, The Shareholder Services Group, Inc.,
BOS725, P.O. Box 1559, Boston, MA 02104. The currently effective option will
appear on each confirmation statement.
Share Option -- Dividends and capital gains will be reinvested in
additional shares.
Income Option -- Dividends will be paid in cash and capital gains will be
reinvested in additional shares.
Cash Option -- Dividends and capital gains will be paid in cash.
The Share Option will be assigned if no other option is specified.
Distributions, including those reinvested, will be reduced by any withholding
required under the Federal income tax laws.
If the Income Option or Cash Option has been selected, dividend and/or
capital gains distribution checks which are returned by the United States Postal
Service as not deliverable or which remain uncashed for six months or more will
be reinvested in the account at the then current net asset value. Furthermore,
the distribution option on the account will be automatically changed to the
Share Option until such time as the shareholder selects a different option.
DISTRIBUTION INVESTMENT OPTION. In addition to the distribution options
set forth above, dividends and/or capital gains may be invested in additional
shares of another Eaton Vance fund. Before selecting this option, a shareholder
should obtain a prospectus of the other Eaton Vance fund and consider its
objectives and policies carefully.
"STREET NAME" ACCOUNTS. If shares of the Fund are held in a "street name"
account with an Authorized Firm, all recordkeeping, transaction processing and
payments of distributions relating to the beneficial owner's account will be
performed by the Authorized Firm, and not by the Fund and its transfer agent.
Since the Fund will have no record of the beneficial owner's transactions, a
beneficial owner should contact the Authorized Firm to purchase, redeem or
exchange shares, to make changes in or give instructions concerning the account,
or to obtain information about the account. The transfer of shares in a "street
name" account to an account with another dealer or to an account directly with
the Fund involves
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<PAGE> 21
special procedures and will require the beneficial owner to obtain historical
purchase information about the shares in the account from the Authorized Firm.
Before establishing a "street name" account with an investment firm, or
transferring the account to another investment firm, an investor wishing to
reinvest distributions should determine whether the firm which will hold the
shares allows reinvestment of distributions in "street name" accounts.
--------------------------------------------------------------------------------
UNDER A LIFETIME INVESTING ACCOUNT A SHAREHOLDER CAN MAKE ADDITIONAL
INVESTMENTS IN SHARES OF THE FUND BY SENDING A CHECK FOR $50 OR MORE.
--------------------------------------------------------------------------------
THE EATON VANCE EXCHANGE PRIVILEGE
--------------------------------------------------------------------------------
Shares of the Fund may be exchanged for shares of any of the following funds:
Eaton Vance Cash Management Fund, Eaton Vance Income Fund of Boston, Eaton Vance
Municipal Bond Fund L.P., Eaton Vance Tax Free Reserves and any fund in the
Eaton Vance Traditional Group of Funds on the basis of the net asset value per
share of each fund at the time of the exchange, provided that such exchange
offers are available only in states where shares of the fund being acquired may
be legally sold.
Each exchange must involve shares which have a net asset value of at least
$1,000. The exchange privilege may be changed or discontinued without penalty.
Shareholders will be given sixty (60) days notice prior to any termination or
material amendment of the exchange privilege. The Fund does not permit the
exchange privilege to be used for "Market Timing" and may terminate the exchange
privilege for any shareholder account engaged in Market Timing activity. Any
shareholder account for which more than two round-trip exchanges are made within
any twelve month period will be deemed to be engaged in Market Timing.
Furthermore, a group of unrelated accounts for which exchanges are entered
contemporaneously by a financial intermediary will be considered to be engaged
in Market Timing.
Shares of the Fund which are subject to a CDSC may be exchanged into any of
the above funds without incurring the CDSC. The shares acquired in an exchange
may be subject to a CDSC upon redemption. For purposes of computing the CDSC
payable upon redemption of shares acquired in an exchange, the holding period of
the original shares is added to the holding period of the shares acquired in the
exchange.
The Shareholder Services Group, Inc. makes exchanges at the next determined
net asset value after receiving an exchange request in good order (see "How to
Redeem Fund Shares"). Consult The Shareholder Services Group, Inc. for
additional information concerning the exchange privilege. Applications and
prospectuses of other funds are available from Authorized Firms or the Principal
Underwriter. The prospectus for the fund describes its investment objectives and
policies, and shareholders should obtain a prospectus and consider these
objectives and policies carefully before requesting an exchange.
Shares of certain other funds for which Eaton Vance acts as investment
adviser or administrator may be exchanged for Fund shares at their respective
net asset value per share, but subject to any restrictions or qualifications set
forth in the current prospectus of any such fund.
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<PAGE> 22
Telephone exchanges are accepted by the Shareholder Services Group, Inc.
provided the investor has not disclaimed in writing the use of the privilege. To
effect such exchanges, call The Shareholder Services Group, Inc. at 800-262-1122
or, within Massachusetts, 617-573-9403, Monday through Friday, 9:00 a.m. to 4:00
p.m. (Eastern Standard Time). Shares acquired by telephone exchange must be
registered in the same name(s) and with the same address as the shares being
exchanged. Neither the Fund, the Principal Underwriter nor The Shareholder
Services Group, Inc. will be responsible for the authenticity of exchange
instructions received by telephone, provided that reasonable procedures to
confirm that instructions communicated are genuine have been followed. Telephone
instructions will be tape recorded. In times of drastic economic or market
changes, a telephone exchange may be difficult to implement. An exchange may
result in a taxable gain or loss.
EATON VANCE SHAREHOLDER SERVICES
--------------------------------------------------------------------------------
THE FUND OFFERS THE FOLLOWING SERVICES WHICH ARE VOLUNTARY, INVOLVE NO EXTRA
CHARGE, AND MAY BE CHANGED OR DISCONTINUED WITHOUT PENALTY AT ANY TIME. Full
information on each of the services described below and an application, where
required, are available from Authorized Firms or the Principal Underwriter. The
cost of administering such services for the benefit of shareholders who
participate in them is borne by the Fund as an expense to all shareholders.
INVEST-BY-MAIL -- FOR PERIODIC SHARE ACCUMULATION: Once the $1,000 minimum
investment has been made, checks of $50 or more payable to the order of the Fund
may be mailed directly to The Shareholder Services Group, Inc., BOS725, P.O. Box
1559, Boston, MA 02104 at any time -- whether or not dividends are reinvested.
The name of the shareholder, the Fund, and the account number should accompany
each investment.
BANK DRAFT INVESTING -- FOR REGULAR SHARE ACCUMULATION: Cash investments of $50
or more may be made through the shareholder's checking account via bank draft
each month or quarter. The $1,000 minimum initial investment and small account
redemption policy are waived for these accounts.
STATEMENT OF INTENTION: Purchases of $100,000 or more made over a 13-month
period are eligible for reduced sales charges. See "Statement of Intention and
Escrow Agreement."
RIGHT OF ACCUMULATION: Purchases may qualify for reduced sales charges when the
current market value of holdings (shares at current offering price), plus new
purchases, reaches $100,000 or more. Shares of the Eaton Vance funds mentioned
under "The Eaton Vance Exchange Privilege" may be combined under the Statement
of Intention and Right of Accumulation.
WITHDRAWAL PLAN: A shareholder may draw on shareholdings systematically with
monthly or quarterly checks in an amount specified by the shareholder. A minimum
deposit of $5,000 in shares is required.
REINVESTMENT PRIVILEGE: A SHAREHOLDER WHO HAS REPURCHASED OR REDEEMED SHARES
MAY REINVEST ANY PORTION OR ALL OF THE REPURCHASE OR REDEMPTION PROCEEDS (PLUS
THAT AMOUNT NECESSARY TO ACQUIRE A FRACTIONAL SHARE TO ROUND OFF THE PURCHASE TO
THE NEAREST FULL SHARE) IN SHARES OF THE FUND, or, provided that the shares
repurchased or redeemed have been held for at least 30 days, in shares of any of
the other funds offered by the Principal Underwriter with an initial sales
charge at net asset value, provided that the reinvestment is effected within 30
days after such repurchase or redemption. Shares are sold to a reinvesting
shareholder at the next determined net
21
<PAGE> 23
asset value following timely receipt of a written purchase order by the
Principal Underwriter or by the fund whose shares are to be purchased (or by
such fund's Transfer Agent). The privilege is also available to holders of
shares of the other funds offered with an initial sales charge by the Principal
Underwriter who wish to reinvest such redemption or repurchase proceeds in
shares of the Fund. If a shareholder reinvests redemption proceeds within the 30
day period the shareholder's account will be credited with the amount of any
CDSC paid on such redeemed shares. A reinvesting shareholder may realize a gain
or loss for Federal tax purposes as a result of such repurchase or redemption.
Special rules may apply to the computation of gain or loss and to the deduction
of loss on a repurchase or redemption followed by a reinvestment. See
"Distributions and Taxes". Shareholders should consult their tax advisers
concerning the tax consequences of reinvestments.
DISTRIBUTIONS AND TAXES
--------------------------------------------------------------------------------
SUBSTANTIALLY ALL OF THE INVESTMENT INCOME ALLOCATED TO THE FUND BY THE
PORTFOLIO, LESS THE FUND'S DIRECT AND ALLOCATED EXPENSES, WILL BE DECLARED DAILY
AS A DISTRIBUTION TO FUND SHAREHOLDERS OF RECORD AT THE TIME OF DECLARATION.
Such distributions, whether taken in cash or reinvested in additional shares,
will ordinarily be paid on the last day of each month or the next business day
thereafter. The Fund anticipates that for tax purposes the entire distribution,
whether taken in cash or reinvested in additional shares, will constitute
tax-exempt income to shareholders, except for the proportionate part of the
distribution that may be considered taxable income if the Fund has taxable
income during the calendar year. Shareholders reinvesting the monthly
distribution should continue to treat the amount of the entire distribution as
the tax cost basis of the additional shares acquired by reason of such
reinvestment. Daily distribution crediting will commence on the day that
collected funds for the purchase of Fund shares are available at the Transfer
Agent. Shareholders will receive timely Federal income tax information as to the
tax-exempt or taxable status of all distributions made by the Fund during the
calendar year. The Fund's net realized capital gains, if any, consist of the net
realized capital gains allocated to the Fund by the Portfolio for tax purposes,
after taking into account any available capital loss carryovers; the Fund's net
realized capital gains, if any, will be distributed at least once a year,
usually in December.
Sales charges paid upon a purchase of shares of the Fund cannot be taken
into account for purposes of determining gain or loss on a redemption or
exchange of the shares before the 91st day after their purchase to the extent
shares of the Fund or of another fund are subsequently acquired pursuant to the
Fund's reinvestment or exchange privilege. In addition, losses realized on a
redemption of Fund shares may be disallowed under certain "wash sale" rules if
within a period beginning 30 days before and ending 30 days after the date of
redemption other shares of the Fund are acquired. Any disregarded or disallowed
amounts will result in an adjustment to the shareholder's tax basis in some or
all of any other shares acquired.
In order to qualify as a regulated investment company under the Internal
Revenue Code (the "Code"), the Fund must satisfy certain requirements relating
to the sources of its income, the distribution of its income, and the
diversification of its assets. In satisfying these requirements, the Fund will
treat itself as owning its proportionate share of each of the Portfolio's assets
and as entitled to the income of the Portfolio properly attributable to such
share.
22
<PAGE> 24
--------------------------------------------------------------------------------
AS A REGULATED INVESTMENT COMPANY UNDER THE CODE, THE FUND DOES NOT PAY
FEDERAL INCOME OR EXCISE TAXES TO THE EXTENT THAT IT DISTRIBUTES TO SHAREHOLDERS
ITS NET INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS IN ACCORDANCE WITH THE
TIMING REQUIREMENTS IMPOSED BY THE CODE. AS A PARTNERSHIP UNDER THE CODE, THE
PORTFOLIO DOES NOT PAY FEDERAL INCOME OR EXCISE TAXES.
--------------------------------------------------------------------------------
Distributions of interest on certain municipal obligations constitute a tax
preference item under the alternative minimum tax provisions applicable to
individuals and corporations (see page 5). Distributions of taxable income
(including a portion of any original issue discount with respect to certain
stripped municipal obligations and stripped coupons and accretion of certain
market discount) and net short-term capital gains will be taxable to
shareholders as ordinary income. Distributions of long-term capital gains are
taxable to shareholders as such for Federal income tax purposes, regardless of
the length of time Fund shares have been owned by the shareholder. Distributions
are taxed in the manner described above whether paid in cash or reinvested in
additional shares of the Fund.
Tax-exempt distributions received from the Fund are includable in the tax
base for determining the taxability of social security and railroad retirement
benefits.
Interest on indebtedness incurred or continued by a shareholder to purchase
or carry shares of the Fund is not deductible. Further, entities or persons who
are "substantial users" (or persons related to "substantial users") of
facilities financed by industrial development or private activity bonds should
consult their tax advisers before purchasing shares of the Fund. "Substantial
user" is defined in applicable Treasury regulations to include a "non-exempt
person" who regularly uses in trade or business a part of a facility financed
from the proceeds of industrial development bonds and would likely be
interpreted to include private activity bonds issued to finance similar
facilities.
Shareholders should consult their own tax advisers with respect to the
state, local and foreign tax consequences of investing in the Fund.
PERFORMANCE INFORMATION
--------------------------------------------------------------------------------
FROM TIME TO TIME, THE FUND MAY ADVERTISE ITS YIELD AND/OR AVERAGE ANNUAL TOTAL
RETURN. The current yield for the Fund will be calculated by dividing the net
investment income per share during a recent 30 day period by the maximum
offering price per share of the Fund on the last day of the period and
annualizing the resulting figure. A taxable-equivalent yield is computed by
using the tax-exempt yield figure and dividing by 1 minus the tax rate. The
Fund's average annual total return is determined by multiplying a hypothetical
initial purchase order of $1,000 by the average annual compounded rate of return
(including capital appreciation/depreciation and dividends and distributions
paid and reinvested) for the stated period and annualizing the result. The
average annual total return calculation assumes that the maximum sales charge is
deducted from the initial $1,000 purchase order and that all dividends are
reinvested at the net asset value on the reinvestment dates during the period.
The Fund may publish annual and cumulative total return figures from time to
time.
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<PAGE> 25
The Fund may also publish the distribution rate and/or the effective
distribution rate. The Fund's distribution rate is computed by dividing the most
recent monthly distribution per share annualized, by the current maximum
offering price per share. The effective distribution rate is computed by
dividing the distribution rate by the ratio used to annualize the most recent
monthly distribution and reinvesting the resulting amount for a full year on the
basis of such ratio. The effective distribution rate will be higher than the
distribution rate because of the compounding effect of the assumed reinvestment.
Investors should note that the Fund's yield is calculated using a standardized
formula the income component of which is computed from the yields to maturity of
all debt obligations held by the Portfolio based on prescribed methods (with all
purchases and sales of securities during such period included in the income
calculation on a settlement date basis), whereas the distribution rate is based
on the Fund's last monthly distribution which tends to be relatively stable and
may be more or less than the amount of net investment income and short-term
capital gain actually earned by the Fund during the month (see "Distributions
and Taxes").
Investors should note that the investment results of the Fund will
fluctuate over time, and any presentation of the Fund's current yield or total
return for any prior period should not be considered a representation of what an
investment may earn or what an investor's yield or total return may be in any
future period. If the expenses of the Fund or the Portfolio are paid by Eaton
Vance, the Fund's performance will be higher.
STATEMENT OF INTENTION AND ESCROW AGREEMENT
--------------------------------------------------------------------------------
TERMS OF ESCROW. If the investor, on an application, makes a Statement of
Intention to invest a specified amount over a thirteen month period, then out of
the initial purchase (or subsequent purchases if necessary) 5% of the dollar
amount specified on the application shall be held in escrow by the escrow agent
in the form of shares (computed to the nearest full share at the public offering
price applicable to the initial purchase hereunder) registered in the investor's
name. All income dividends and capital gains distributions on escrowed shares
will be paid to the investor or to the investor's order.
When the minimum investment so specified is completed, the escrowed shares
will be delivered to the investor. If the investor has an accumulation account
the shares will remain on deposit under the account.
If total purchases under this Statement of Intention are less than the
amount specified, the investor will promptly remit to EVD any differences
between the sales charge on the amount specified and on the amount actually
purchased. If the investor does not within 20 days after written request by EVD
or the Authorized Firm pay such difference in sales charge, the escrow agent
will redeem an appropriate number of the escrowed shares in order to realize
such difference. Full shares remaining after any such redemption together with
any excess cash proceeds of the shares so redeemed will be delivered to the
investor or to the investor's order by the escrow agent.
In signing the application, the investor irrevocably constitutes and
appoints the escrow agent as attorney to surrender for redemption any or all
escrowed shares with full power of substitution in the premises.
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<PAGE> 26
PROVISION FOR RETROACTIVE PRICE ADJUSTMENT. If total purchases made under this
Statement are large enough to qualify for a lower sales charge than that
applicable to the amount specified, all transactions will be computed at the
expiration date of this Statement to give effect to the lower charge. Any
difference in sales charge will be refunded to the investor in cash, or applied
to the purchase of additional shares at the lower charge if specified by the
investor. This refund will be made by the Authorized Firm and by EVD. If at the
time of the recomputation a firm other than the original firm is placing the
orders, the adjustment will be made only on those shares purchased through the
firm then handling the account.
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27
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INVESTMENT ADVISER OF
NATIONAL LIMITED MATURITY EV TRADITIONAL
TAX FREE PORTFOLIO
Boston Management and Research NATIONAL
24 Federal Street
Boston, MA 02110 LIMITED MATURITY
ADMINISTRATOR OF EV TRADITIONAL TAX FREE FUND
NATIONAL LIMITED MATURITY TAX FREE FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265 PROSPECTUS
CUSTODIAN NOVEMBER 25, 1994
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
AUDITORS
Deloitte & Touche LLP
125 Summer Street
Boston, MA 02110
EV TRADITIONAL
NATIONAL LIMITED MATURITY TAX FREE FUND
24 FEDERAL STREET
BOSTON, MA 02110
T-LNAP
