<PAGE>
[LOGO OF EATON [PHOTO OF BRICK WALL AND
VANCE APPEARS HERE] EDUCATION SIGN APPEARS HERE]
Semiannual Report September 30, 1997
EV
CLASSIC
[PHOTO OF HIGHWAY NATIONAL
TRAFFIC AT NIGHT
APPEARS HERE] LIMITED MATURITY
MUNICIPALS FUND
Eaton Vance
Global Management-Global Distribution
[PHOTO OF SUSPENSION BRIDGE
APPEARS HERE] Classic
<PAGE>
EV Classic National Limited Maturity Municipals Fund as of September 30, 1997
INVESTMENT UPDATE
[PHOTO OF WILLIAM H. AHERN, APPEARS HERE]
William H. Ahern,
Portfolio Manager
Investment Environment
- --------------------------------------------------------------------------------
The Economy
. The U.S. economy posted solid growth through much of the year. Gross domestic
product advanced a strong 3.3% in the third quarter, while September
unemployment fell to a 24-year low of 4.9%. Despite the strong economic
climate, inflation remained in the 2-to-3% range.
. While inflation seemed generally in check, the Federal Reserve maintained a
vigilant policy. The Fed maintained its Federal funds target rate - a key
short-term rate barometer - at 5.5%.
. The municipal market modestly outperformed the Treasury market through most of
1997. While Treasuries struggled to compete with stocks, lower supply gave a
boost to municipals.
The Fund
- --------------------------------------------------------------------------------
. The Fund's total return was 4.6% for the six months ended September 30,
1997./1/ That return was the result of a rise in net asset value per share
from $9.47 on March 31, 1997 to $9.71 on September 30, 1997, and the
reinvestment of $0.188 in income dividends./2/
. Based on the Fund's most recent dividend and a net asset value of $9.71 per
share on September 30, 1997, the Fund's distribution rate was 3.88%./3/
. The Fund's SEC yield at September 30 was 3.81%./4/
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
Management Update
- --------------------------------------------------------------------------------
. In a market characterized by increasing volatility, the Portfolio remained
generally neutrally positioned through the period, with little change in
duration.
. The Portfolio took advantage of Eaton Vance's extensive research resources to
find higher-yielding opportunities. Conversely, our research helped us avoid
a number of deteriorating situations.
. With insured bonds comprising an increasingly large percentage of municipal
bond issuance, it has become more challenging to find value in a generic
market. We have therefore turned to the lower-rated, investment grade sector
of the municipal market, where lesser-known issuers may represent interesting
values.
Your Investment at Work
- --------------------------------------------------------------------------------
New Jersey Economic
Development Authority
Vineland Cogeneration
[GRAPHIC OF FACTORY APPEARS HERE]
. In 1988, the City of Vineland negotiated a power purchase agreement to
provide additional generating capacity for the City's future energy needs.
. These bonds financed the construction of a cogeneration facility to provide
thermal power for the cooking and canning operations of Progresso Foods
Company.
. In addition to providing an excellent example of municipal bonds benefiting
both corporate and community development, the bonds provide an attractive
7.875% coupon for the Portfolio.
- --------------------------------------------------------------------------------
/1/ This return does not include the Fund's applicable contingent deferred
sales charge (CDSC). /2/ A portion of the Fund's income could be subject to
federal 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/ The Fund's SEC yield is
calculated by dividing the net investment income per share for the 30-day
period by the net asset value at the end of the period and annualizing the
result. /5/ Returns are calculated by determining the percentage change in
net asset value with all distributions reinvested. SEC return for one year
reflects 1% CDSC. /6/ Sector weightings and Portfolio Overview are as of
9/30/97 only and may not be representative of the Portfolio's current or
future investments.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
- --------------------------------------------------------------------------------
Fund Information
as of September 30, 1997
<TABLE>
<CAPTION>
Performance/5/
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
<S> <C>
One Year 6.1%
Life of Fund (12/8/93) 3.4
SEC Average Annual Total Returns (including applicable CDSC)
- --------------------------------------------------------------------------------
<S> <C>
One Year 5.1%
Life of Fund (12/8/93) 3.4
5 Largest Sectors/6/
- --------------------------------------------------------------------------------
By total investments
<S> <C>
Industrial Development/Pollution Control 16.4%
General Obligations 12.9%
Transportation 11.4%
Housing 9.9%
Nursing Homes 9.5%
Portfolio Overview/6/
- --------------------------------------------------------------------------------
<S> <C>
Number of Issues 63
Average Rating A-
Average Coupon 6.4%
Average Effective Maturity 9.96 Yrs.
Average Maturity 13.05 Yrs.
Average Duration 6.9 Yrs.
</TABLE>
2
<PAGE>
EV Classic National Limited Maturity Municipals Fund as of September 30, 1997
FINANCIAL STATEMENTS (Unaudited)
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
As of September 30, 1997
Assets
- -------------------------------------------------------------------------------
<S> <C>
Investment in National Limited Maturity Municipals
Portfolio, at value (Note 1A) (identified cost,
$7,622,311) $ 7,991,504
- -------------------------------------------------------------------------------
Receivable for Fund shares sold 46,600
Receivable from Administrator (Note 4) 12,844
Deferred organization expenses (Note 1D) 9,000
- -------------------------------------------------------------------------------
Total assets $ 8,059,948
- -------------------------------------------------------------------------------
Liabilities
- -------------------------------------------------------------------------------
Dividends payable $ 6,993
Payable to affiliate for Trustees' fees (Note 4) 42
Accrued expenses 7,310
- -------------------------------------------------------------------------------
Total liabilities $ 14,345
- -------------------------------------------------------------------------------
Net Assets for 828,588 shares of
beneficial interest outstanding $ 8,045,603
- -------------------------------------------------------------------------------
Sources of Net Assets
- -------------------------------------------------------------------------------
Paid-in capital $ 8,859,757
Accumulated net realized loss on investments from
Portfolio (computed on the basis of
identified cost) (1,188,385)
Accumulated undistributed net investment income 5,038
Net unrealized appreciation of investments from
Portfolio (computed on the basis of
identified cost) 369,193
- -------------------------------------------------------------------------------
Total $ 8,045,603
- -------------------------------------------------------------------------------
Net Asset Value, Offering and Redemption
Price Per Share (Note 6)
- -------------------------------------------------------------------------------
($8,045,603 / 828,588 shares of
beneficial interest outstanding) $ 9.71
- -------------------------------------------------------------------------------
<CAPTION>
Statement of Operations
For the Six Months Ended
September 30, 1997
Investment Income (Note 1B)
- -------------------------------------------------------------------------------
<S> <C>
Interest income allocated from Portfolio $ 262,988
Expenses allocated from Portfolio (25,897)
- -------------------------------------------------------------------------------
Net investment income from Portfolio $ 237,091
- -------------------------------------------------------------------------------
Expenses
- -------------------------------------------------------------------------------
Compensation of Trustees not members of the
Administrator's organization (Note 4) $ 84
Distribution fees (Note 5) 38,761
Registration fees 13,235
Legal and accounting services 8,213
Printing and postage 8,210
Amortization of organization expenses (Note 1D) 3,812
Transfer and dividend disbursing agent fees 3,764
Custodian fee 3,300
Miscellaneous 1,358
- -------------------------------------------------------------------------------
Total expenses $ 80,737
- -------------------------------------------------------------------------------
Deduct --
Preliminary allocation of expenses to the
Administrator (Note 4) $ 12,844
- -------------------------------------------------------------------------------
Total expense reductions $ 12,844
- -------------------------------------------------------------------------------
Net expenses $ 67,893
- -------------------------------------------------------------------------------
Net investment income $ 169,198
- -------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) from Portfolio
- -------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 16,866
Financial futures contracts (80,393)
- -------------------------------------------------------------------------------
Net realized loss on investments $ (63,527)
- -------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investment transactions $ 301,833
Financial futures contracts (17,045)
- -------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)
of investments $ 284,788
- -------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 221,261
- -------------------------------------------------------------------------------
Net increase in net assets from operations $ 390,459
- -------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
3
<PAGE>
EV Classic National Limited Maturity Municipals Fund as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
Increase (Decrease) September 30, 1997 Year Ended
in Net Assets (Unaudited) March 31, 1997
- --------------------------------------------------------------------------------
<S> <C> <C>
From operations --
Net investment income $ 169,198 $ 440,964
Net realized loss on
investments (63,527) (167,624)
Net change in unrealized
appreciation
(depreciation)
of investments 284,788 55,372
- --------------------------------------------------------------------------------
Net increase in net assets
from operations $ 390,459 $ 328,712
- --------------------------------------------------------------------------------
Distributions to shareholders (Note 2) --
From net investment income $ (169,173) $ (437,569)
- --------------------------------------------------------------------------------
Total distributions to
shareholders $ (169,173) $ (437,569)
- --------------------------------------------------------------------------------
Transactions in shares of beneficial
interest (Note 3)--
Proceeds from sale of shares $ 423,682 $ 999,812
Net asset value of shares
issued to shareholders
in payment of
distributions declared 113,545 272,566
Cost of shares redeemed (1,927,971) (4,173,666)
- --------------------------------------------------------------------------------
Net decrease in net assets from
Fund share transactions $ (1,390,744) $ (2,901,288)
- --------------------------------------------------------------------------------
Net decrease in net assets $ (1,169,458) $ (3,010,145)
- --------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------
At beginning of period $ 9,215,061 $ 12,225,206
- --------------------------------------------------------------------------------
At end of period $ 8,045,603 $ 9,215,061
- --------------------------------------------------------------------------------
Accumulated
undistributed net
investment income
included in net assets
- --------------------------------------------------------------------------------
At end of period $ 5,038 $ 5,013
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
4
<PAGE>
EV Classic National Limited Maturity Municipals Fund as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Six Months Ended Year Ended March 31,
September 30, 1997 ----------------------------------------------------
(Unaudited) 1997 1996 1995 1994 *
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value -- Beginning of period $ 9.470 $ 9.570 $ 9.530 $ 9.550 $ 10.000
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.190 $ 0.381 $ 0.379 $ 0.375 $ 0.104
Net realized and unrealized gain (loss) on investments 0.239 (0.104) 0.039 0.026++ (0.421)
- ------------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.429 $ 0.277 $ 0.418 $ 0.401 $ (0.317)
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ------------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.189) $(0.377) $ (0.378) $(0.375) $ (0.104)
In excess of net investment income -- -- -- (0.046) (0.029)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions $(0.189) $(0.377) $ (0.378) $(0.421) $ (0.133)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End of period $ 9.710 $ 9.470 $ 9.570 $ 9.530 $ 9.550
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return /(1)/ 4.55% 2.95% 4.42% 4.35% (3.32)%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data++
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $ 8,046 $ 9,215 $ 12,225 $19,930 $ 26,046
Ratio of net expenses to average daily net assets /(2)//(3)/ 2.19%+ 2.07% 1.72% 1.57% 1.53%+
Ratio of net expenses to average daily net assets after
custodian fee reduction /(2)/ 2.18%+ 2.05% 1.71% -- --
Ratio of net investment income to average daily net assets 3.93%+ 3.99% 3.95% 4.01% 3.10%+
- ------------------------------------------------------------------------------------------------------------------------------------
+++ The operating expenses of the Fund reflect an allocation of expenses to the Administrator. Had such action not been taken, the
ratios and net investment income per share would have been as follows:
Ratios (As a percentage of average daily net assets):
Expenses /(2)//(3)/ 2.49%+ -- 2.03% 1.81% 1.87%+
Expenses after custodian fee reduction /(2)/ 2.48%+ -- 2.02% -- --
Net investment income 3.63%+ -- 3.64% 3.77% 2.76%+
Net investment income per share $ 0.176 $ -- $ 0.349 $ 0.353 $ 0.093
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
++ The per share amount is not in accord with the net realized and unrealized
gain (loss) for the period because of the timing of sales of Fund shares
and the amount of the per share realized and unrealized gains and losses
at such time.
* For the period from the start of business, December 8, 1993, to March 31,
1994.
/(1)/ Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the payable date. Total return is not
computed on an annualized basis.
/(2)/ Includes the Fund's share of the Portfolio's allocated expenses.
/(3)/ The expense ratios for the year ended March 31, 1996 and periods
thereafter, have been adjusted to reflect a change in reporting
guidelines. The new reporting guidelines require the Fund to increase its
expense ratio by the effect of any expense offset arrangements with its
service providers or those of the Portfolio. The expense ratios for each
of the prior periods have not been adjusted to reflect this change.
See notes to financial statements
5
<PAGE>
EV Classic National Limited Maturity Municipals Fund as of September 30, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1 Significant Accounting Policies
------------------------------------------------------------------------------
EV Classic National Limited Maturity Municipals Fund (the Fund), is a
diversified series of Eaton Vance Investment 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 invests all of its investable
assets in interests in the National Limited Maturity 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 (8.3% at September
30, 1997). 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 and tax-exempt income,
including any net realized gain on investments. Accordingly, no provision for
federal income or excise tax is necessary. At March 31, 1997, the Fund, for
federal income tax purposes, had a capital loss carryover of $837,098 which
will reduce the taxable income arising from future net realized gain on
investments, if any, to the extent permitted by the Internal Revenue Code and
thus will reduce the amount of distributions to shareholders which would
otherwise be necessary to relieve the Fund of any liability for federal income
or excise tax. Such capital loss carryover will expire on March 31, 2002
($1,059), March 31, 2003 ($282,104), March 31, 2004 ($444,603), and March 31,
2005 ($109,332). Dividends paid by the Fund from net interest on tax-exempt
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 Deferred Organization Expenses -- Costs incurred by the Fund in connection
with its organization are being amortized on the straight-line basis over five
years.
E Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expense during the reporting period. Actual results could
differ from those estimates.
F Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian to the Fund and the Portfolio. Pursuant to the respective custodian
agreements, 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 expenses on the Statement of Operations.
G Other -- Investment transactions are accounted for on a trade date basis.
H Interim Financial Information -- The interim financial statements relating
to September 30, 1997 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.
6
<PAGE>
EV Classic National Limited Maturity Municipals Fund as of September 30, 1997
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 capital gains, if any, are made at least annually.
Shareholders may reinvest capital gain distributions in additional shares of
the Fund at the net asset value as of the ex-dividend date. Distributions are
paid in the form of additional shares or, at the election of the shareholder,
in cash. The 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 over distributions for financial
statement purposes only 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. The tax treatment of distributions for the calendar year will
be reported to shareholders prior to February 1, 1998 and will be based on tax
accounting methods which may differ from amounts determined for financial
statement purposes.
3 Shares of Beneficial Interest
------------------------------------------------------------------------------
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
Six Months Ended
September 30, 1997 Year Ended
(Unaudited) March 31, 1997
----------------------------------------------------------------------
<S> <C> <C>
Sales 44,175 105,036
Issued to shareholders
electing to receive
payments of distributions
in Fund shares 11,795 28,601
Redemptions (200,660) (437,552)
----------------------------------------------------------------------
Net decrease (144,690) (303,915)
----------------------------------------------------------------------
</TABLE>
4 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. To enhance the net income of the Fund, $12,844 of
expenses related to the operation of the Fund were allocated on a preliminary
basis to EVM.
Except as to Trustees of the Fund and the Portfolio who are not members of
EVM's organization, officers and Trustees receive remuneration for their
services to the Fund out of such investment advisor fee. Certain of the
officers and Trustees of the Fund and the Portfolio are officers and
directors/trustees of the above organizations (Note 5).
5 Distribution Plan
------------------------------------------------------------------------------
The Fund has adopted a distribution plan (the Plan) pursuant to Rule 12b-1
under the Investment Company Act of 1940. The Plan requires the Fund to pay
the Principal Underwriter, Eaton Vance Distributors, Inc. (EVD), amounts equal
to 1/365 of 0.75% of the Fund's daily net assets, for providing ongoing
distribution services and facilities to the Fund. The Fund 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) 6.25% of the aggregate amount received by the Fund for the shares sold
plus, (ii) distribution fees calculated by applying the rate of 1% over the
prevailing prime rate to the outstanding balance of Uncovered Distribution
Charges of EVD reduced by amounts theretofore paid to EVD. The Fund paid or
accrued $32,301 to or payable to EVD for the six months ended September 30,
1997, representing 0.75% (annualized) of average daily net assets. At
September 30, 1997, the amount of Uncovered Distribution Charges of EVD
calculated under the Plan was approximately $3,670,000.
In addition, the Plan authorizes the Fund to make monthly payments of service
fees to the Principal Underwriter, Authorized Firms and other persons in
amounts not exceeding 0.25% of the Fund's average daily net assets for each
fiscal year. The Trustees have initially implemented the Plan by authorizing
the Fund to make monthly payments of service fees to the Principal Underwriter
in amounts not expected to exceed 0.15% of the Fund's
7
<PAGE>
EV Classic National Limited Maturity Municipals Fund as of September 30, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
average daily net assets for any fiscal year. The Fund paid or accrued service
fees to or payable to EVD for the six months ended September 30, 1997, in the
amount of $6,460. EVD currently expects to pay to an Authorized Firm a service
fee at the time of sale equal to 0.15% of the purchase price of the shares
sold by such Firm and monthly payments of service fees in amounts not expected
to exceed 0.15% per annum of the Funds' average daily net assets based on the
value of Fund shares sold by such Firm and remaining outstanding for at least
one year. During the first year after a purchase of Fund shares, EVD will
retain the service fee as reimbursement for the service fee payment made to
the Authorized Firm at the time of sale. Service fee payments are 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.
Certain officers and Trustees of the Fund are officers or directors of EVD.
6 Contingent Deferred Sales Charge
------------------------------------------------------------------------------
A contingent deferred sales charge (CDSC) of 1% is imposed on any redemption
of Fund shares made within one year of purchase. Generally, the CDSC is based
upon the lower of the net asset value at date of redemption or date of
purchase. No charge is levied on shares acquired by reinvestment of dividends
or capital gains distributions. No CDSC is levied on shares which have been
sold to EVD or its affiliates or to their respective employees. CDSC charges
are paid to EVD to reduce the amount of Uncovered Distribution Charges
calculated under the Fund's Distribution Plan. CDSC charges received when no
Uncovered Distribution Charges exist will be credited to the Fund. For the six
months ended September 30, 1997, EVD received approximately $900 of CDSC paid
by shareholders.
7 Investment Transactions
------------------------------------------------------------------------------
Increases and decreases in the Fund's investment in the Portfolio for the six
months ended September 30, 1997, aggregated $439,372 and $2,110,125,
respectively.
8
<PAGE>
National Limited Maturity Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS (Unaudited)
Tax-Exempt Investments -- 100.0%
<TABLE>
<CAPTION>
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cogeneration -- 1.4%
- -----------------------------------------------------------------------------------------
NR BB+ $1,250 New Jersey EDA, (Vineland
Cogeneration) (AMT),
7.875%, 6/1/19 $ 1,370,263
- -----------------------------------------------------------------------------------------
$ 1,370,263
- -----------------------------------------------------------------------------------------
Colleges and Universities -- 1.1%
- -----------------------------------------------------------------------------------------
Aa AA- $1,700 University of Illinois, 0.00%, 4/1/15 $ 670,123
Aa AA- 1,000 University of Illinois, 0.00%, 4/1/16 371,090
- -----------------------------------------------------------------------------------------
$ 1,041,213
- -----------------------------------------------------------------------------------------
Economic Development Revenue -- 1.0%
- -----------------------------------------------------------------------------------------
NR BB- $ 950 Michigan State Strategic Fund,
6.25%, 8/1/12 $ 955,662
- -----------------------------------------------------------------------------------------
$ 955,662
- -----------------------------------------------------------------------------------------
Education -- 4.4%
- -----------------------------------------------------------------------------------------
NR NR $1,900 Arizona Educational Loan Marketing
Corp., (AMT), 6.25%, 6/1/06 $ 2,045,882
- -----------------------------------------------------------------------------------------
A NR 1,000 Arizona Student Loan Acquisition
Authority, (AMT), 7.625%, 5/1/10 1,109,760
- -----------------------------------------------------------------------------------------
Ba1 NR 1,000 New Hampshire Higher Education and
Health Facilities Authority (Colby-
Sawyer College), 7.20%, 6/1/12 1,062,360
- -----------------------------------------------------------------------------------------
$ 4,218,002
- -----------------------------------------------------------------------------------------
Escrowed/Prerefunded -- 1.9%
- -----------------------------------------------------------------------------------------
Aaa AAA $1,500 Grand Ledge, MI, Public School
District, (MBIA), Prerefunded to
5/1/04, 7.875%, 5/1/11 $ 1,817,490
- -----------------------------------------------------------------------------------------
$ 1,817,490
- -----------------------------------------------------------------------------------------
General Obligations -- 12.9%
- -----------------------------------------------------------------------------------------
Baa2 BBB $5,000 City of Detroit, Michigan,
6.50%, 4/1/02/(1)/ $ 5,382,399
Aaa AAA 1,000 Fort Bend, TX, Independent School
District, 5.00%, 2/15/17 968,590
NR NR $1,800 Pennsylvania Economic Development
Financing Authority, (Resource
Recovery for Northampton),
6.75%, 1/1/07 $ 1,901,106
Baa1 A 1,500 Puerto Rico Aqueduct and Sewer
Authority, 5.00%, 7/1/15 1,441,845
NR NR 2,540 Youngstown, OH, County School
District, 6.40%, 7/1/00 2,626,182
- -----------------------------------------------------------------------------------------
$12,320,122
- -----------------------------------------------------------------------------------------
Hospitals -- 6.7%
- -----------------------------------------------------------------------------------------
Aa3 AA $2,500 Greenville, SC Hospital System (Board
of Trustees), 5.25%, 5/1/17 $ 2,475,750
Baa3 BB+ 1,340 Massachusetts Health and Educational
Facilities Authority, (Milford
Whitinsville Hospital), Series B,
7.125%, 7/15/02 1,414,504
NR BBB 500 Michigan State Hospital (Gratiot
Community Hospital),
6.10%, 10/1/07 524,650
Baa BBB- 1,915 Richardson, TX, Hospital Authority,
(Richardson Medical Center),
6.50%, 12/1/12 2,007,399
- -----------------------------------------------------------------------------------------
$ 6,422,303
- -----------------------------------------------------------------------------------------
Housing -- 9.9%
- -----------------------------------------------------------------------------------------
A NR $1,005 Illinois Development Finance Authority,
Elderly Housing, (Mattoon Tower -
Section 8), 6.35%, 7/1/10 $ 1,036,477
Baa3 NR 1,125 Illinois Development Finance Authority,
Elderly Housing, (Rome Meadows),
6.40%, 2/1/03 1,151,348
Baa3 NR 1,145 Illinois Development Finance Authority,
Elderly Housing, (Rome Meadows),
6.65%, 2/1/06 1,176,522
NR A 3,500 Maricopa County, AZ, Industrial
Development Authority, Multifamily,
6.45%, 1/1/17 3,754,589
NR NR 1,025 Maricopa County, AZ, Industrial
Development Authority, Multifamily,
7.876%, 1/1/11 1,038,684
Aa1 AA+ 1,300 Virginia State Housing Development
Authority, Multi-Family Housing,
5.95%, 5/1/16 1,352,481
- -----------------------------------------------------------------------------------------
$ 9,510,101
- -----------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
9
<PAGE>
National Limited Maturity Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- -------------------
Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Industrial Development Revenue/Pollution Control Revenue -- 16.4%
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NR NR $ 690 Austin, TX (Cargoport
Development LLC) (AMT),
7.50%, 10/1/07 $ 714,771
NR NR 455 Austin, TX (Cargoport
Development LLC) (AMT),
8.30%, 10/1/21 486,017
A3 A- 2,450 Columbus, NC (International
Paper Co.), 5.80%, 12/1/16 2,499,098
A3 A- 750 Essex County, NY, LOC,
(International Paper Co.),
(AMT), 5.70%, 7/1/16 782,850
NR NR 3,465 Jackson, TN, Solid Waste
Disposal (Owens-Corning
Fiberglass), (AMT), 6.25%,
3/31/04(1) 3,559,871
NR NR 500 Kimball, NE, Economic
Development Authority,
(Clean Harbors Inc.) (AMT),
10.75%, 9/1/26 542,490
NR NR 1,000 New Jersey Economic
Development Authority,
8.00%, 10/1/07 1,027,180
NR NR 1,000 New Jersey EDA, Holt
Hauling and Warehousing
System, Inc.,
7.90%, 3/1/27 1,104,820
NR BBB- 2,000 Pennsylvania Economic
Development Financing
Authority, (Resources
Recovery - Culver Project),
(AMT), 7.05%, 12/1/10 2,197,020
NR NR 500 Robbins, IL, Resources
Recovery, (AMT), 8.375%,
10/15/10 526,785
NR NR 1,395 Santa Fe, NM (Crow Hobbs),
8.25%, 9/1/05 1,439,975
NR NR 750 State of Ohio, Solid Waste,
(Republic Engineered Steels
Inc.), (AMT), 9.00%, 6/1/21 779,813
- --------------------------------------------------------------------------------
$15,660,690
- --------------------------------------------------------------------------------
Insured-Colleges and Universities -- 1.7%
Aaa AAA $1,500 Allegheny County, PA,
Higher Education Building
Authority, (Dusquesne
University), (AMBAC),
5.00%, 3/1/16 $ 1,454,280
Aaa AAA 500 Southern Illinois
University, Housing and
Auxiliary Facilities,
(MBIA), 0.00%, 4/1/17 174,205
- --------------------------------------------------------------------------------
$ 1,628,485
- --------------------------------------------------------------------------------
Insured-General Obligations -- 3.6%
- --------------------------------------------------------------------------------
Aaa AAA $1,000 Kalamazoo, MI, Public
Library, (MBIA), 5.40%,
5/1/14 $ 1,038,380
Aaa AAA 2,500 Willow Run, MI, Community
School District, (AMBAC),
5.00%, 5/1/16 2,423,400
- --------------------------------------------------------------------------------
$ 3,461,780
- --------------------------------------------------------------------------------
Insured-Housing -- 2.3%
- --------------------------------------------------------------------------------
Aaa AAA $2,115 Massachusetts Housing
Finance Agency,
(Harborpoint Development),
(AMBAC), (AMT), 6.20%,
12/1/10 $ 2,243,634
- --------------------------------------------------------------------------------
$ 2,243,634
- --------------------------------------------------------------------------------
Insured-Special Tax Revenue -- 2.1%
- --------------------------------------------------------------------------------
Aaa AAA $2,000 Los Angeles County
California Public Works
(MBIA), 5.25%, 9/1/12 $ 2,019,780
- --------------------------------------------------------------------------------
$ 2,019,780
- --------------------------------------------------------------------------------
Insured-Transportation -- 6.2%
- --------------------------------------------------------------------------------
Aaa AAA $3,000 Chicago, IL (O'Hare
International Airport),
(AMBAC), 5.50%, 1/1/16 $ 3,003,450
Aaa AAA 500 Indiana Transportation
Finance Authority, (AMBAC),
5.25%, 6/1/15 508,335
Aaa AAA 2,270 Texas Turnpike Authority
(FGIC), 6.00%, 1/1/03(2) 2,446,220
- --------------------------------------------------------------------------------
$ 5,958,005
- --------------------------------------------------------------------------------
Lease Revenue/Certificates of Participation -- 0.5%
- --------------------------------------------------------------------------------
Baa3 NR $ 500 Mashantucket Western Pequot
Tribe, CT, 5.55%, 9/1/08 $ 499,245
- --------------------------------------------------------------------------------
$ 499,245
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
10
<PAGE>
National Limited Maturity Municipals Portfolio as of September 30, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- ------------------- Principal
Standard Amount
Moody's & (000
Poor's omitted) Security Value
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Life Care -- 4.6%
- --------------------------------------------------------------------------------
Baa BBB $ 805 Colorado Health Facilities
Authority, (Rocky Mountain
Adventist), 6.00%, 2/1/98 $ 810,281
NR NR 1,095 Florence, KY, Housing Facilities,
(Bluegrass Housing), 7.25%,
5/1/07 1,103,913
NR NR 2,000 Illinois Health Facilities
Authority, 6.125%, 8/15/10 2,040,460
NR NR 475 Vermont State Industrial
Development Authority,
(Wake Robins), 8.00%, 4/1/99 480,672
- --------------------------------------------------------------------------------
$ 4,435,326
- --------------------------------------------------------------------------------
Nursing Homes -- 9.5%
- --------------------------------------------------------------------------------
NR NR $1,105 Arizona Health Facilities
Authority Assisted Living
Facilities, (Mesa), 7.625%,
1/1/06 $ 1,128,979
NR A 3,500 California Statewide
Communities Development
Corporation, (Pacific
Homes), 5.90%, 4/1/09 3,648,399
NR NR 1,000 Fairfield, OH, Economic
Development Revenue,
(Beverly Enterprises
Project), 8.50%, 1/1/03 1,094,070
NR NR 1,500 Massachusetts Industrial
Finance Agency, Health Care
Facilities, (Age Institute
of Massachusetts), 7.60%, 11/1/05 1,546,425
NR NR 1,550 Saint Tammany Public Trust
Finance Authority, Louisiana
(Christwood), 8.75%, 11/15/05 1,682,355
- --------------------------------------------------------------------------------
$ 9,100,228
- --------------------------------------------------------------------------------
Pooled Loans -- 1.1%
- --------------------------------------------------------------------------------
A NR $1,000 Arkansas State Student Loan
Authority, (AMT), 6.25%,
6/1/10 $ 1,044,070
- --------------------------------------------------------------------------------
$ 1,044,070
- --------------------------------------------------------------------------------
Solid Waste -- 1.3%
- --------------------------------------------------------------------------------
NR BBB- $1,120 New Jersey Economic
Development Authority,
Heating and Cooling,
(Trigen-Trenton), (AMT),
6.10%, 12/1/05 $ 1,193,371
- --------------------------------------------------------------------------------
$ 1,193,371
- --------------------------------------------------------------------------------
Transportation -- 11.4%
- --------------------------------------------------------------------------------
Baa1 BBB $2,000 Denver, CO City and County
Airport, (AMT), 7.00%,
11/15/99 $ 2,107,160
NR NR 1,225 Eagle County, CO, Airport
Terminal Corp. (American
Airlines), (AMT), 6.75%,
5/1/06 1,290,648
NR NR 900 Los Angeles, CA, Regional
Airport Improvement Corporate
Lease, (TransWorld Airlines),
6.125%, 5/15/00 899,901
A1 NR 3,000 Massachusetts Turnpike
Authority, 5.00%, 1/1/20(3) 2,936,670
Baa2 BBB 500 Memphis-Shelby County, TN,
(Federal Express Co.),
5.35%, 9/1/12 511,980
NR NR 1,000 Northwest Arkansas Regional
Airport Authority, (AMT),
7.625%, 2/1/27 1,012,550
Aa2 AA 2,000 Wisconsin Housing and Economic
Development Authority,
6.45%, 9/1/27 2,108,920
- --------------------------------------------------------------------------------
$10,867,829
- --------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100%
(identified cost $91,515,736) $95,767,599
- --------------------------------------------------------------------------------
</TABLE>
The Portfolio invests primarily in debt securities issued by municipalities. The
ability of the issuers of the debt securities to meet their obligations may be
affected by economic developments in a specific industry or municipality. In
order to reduce the risk of such economic developments, at September 30, 1997,
15.9% of the securities in the portfolio of investments are backed by bond
insurance of various financial institutions and financial guaranty assurance
agencies. The aggregate percentage insured by financial institutions ranged from
2.6% to 10.1% of total investments.
At September 30, 1997 the concentration of the Portfolio's investments in the
various states, determined as a percentage of total investments is as follows:
Michigan 13%
Illinois 11%
Others, representing less than 10% individually 76%
(1) Security has been segregated to cover when-issued securities.
(2) When-issued security.
(3) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
See notes to financial statements
11
<PAGE>
National Limited Maturity Municipals Portfolio as of September 30, 1997
FINANCIAL STATEMENTS (Unaudited)
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
As of September 30, 1997
Assets
- --------------------------------------------------------------------------------
<S> <C>
Investments, at value (Note 1A) (identified cost,
$91,515,736) $95,767,599
Cash 1,048,236
Interest receivable 1,789,711
Receivable for daily variation margin on open
financial futures contracts (Note 1E) 8,594
Deferred organization expenses (Note 1D) 1,450
- --------------------------------------------------------------------------------
Total assets $98,615,590
- --------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------
Payable for when-issued securities (Note 1G) $ 2,821,024
Payable to affiliate for Trustees' fees (Note 2) 2,203
Accrued expenses 3,755
- --------------------------------------------------------------------------------
Total liabilities $ 2,826,982
- --------------------------------------------------------------------------------
Net Assets applicable to investors' interest in Portfolio $95,788,608
- --------------------------------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------------------------------
Net proceeds from capital contributions and withdrawals $91,574,251
Net unrealized appreciation of investments (computed
on the basis of identified cost) 4,214,357
- --------------------------------------------------------------------------------
Total $95,788,608
- --------------------------------------------------------------------------------
<CAPTION>
Statement of Operations
For the Six Months Ended
September 30, 1997
Investment Income
- --------------------------------------------------------------------------------
<S> <C>
Interest income $ 3,016,465
- --------------------------------------------------------------------------------
Total income $ 3,016,465
- --------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------
Investment adviser fee (Note 2) $ 237,865
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 4,345
Custodian fee (Note 1H) 28,116
Legal and accounting services 21,421
Amortization of organization expenses (Note 1D) 1,237
Miscellaneous 10,765
- --------------------------------------------------------------------------------
Total expenses $ 303,749
- --------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee (Note 1H) $ 6,438
- --------------------------------------------------------------------------------
Total expense reductions $ 6,438
- --------------------------------------------------------------------------------
Net expenses $ 297,311
- --------------------------------------------------------------------------------
Net investment income $ 2,719,154
- --------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) on Investments
- --------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 199,859
Financial futures contracts (942,728)
- --------------------------------------------------------------------------------
Net realized loss on investments $ (742,869)
- --------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ 3,430,669
Financial futures contracts (176,269)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)
of investments $ 3,254,400
- --------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 2,511,531
- --------------------------------------------------------------------------------
Net increase in net assets from operations $ 5,230,685
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
12
<PAGE>
National Limited Maturity Municipals Portfolio as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
Increase (Decrease) September 30, 1997 Year Ended
in Net Assets (Unaudited) March 31, 1997
- --------------------------------------------------------------------------------
<S> <C> <C>
From operations --
Net investment income $ 2,719,154 $ 6,518,710
Net realized loss
on investments (742,869) (1,129,741)
Net change in unrealized
appreciation
(depreciation)
of investments 3,254,400 (150,139)
- --------------------------------------------------------------------------------
Net increase in net assets
from operations $ 5,230,685 $ 5,238,830
- --------------------------------------------------------------------------------
Capital transactions --
Contributions $ 22,675,316 $ 8,914,088
Withdrawals (34,620,909) (46,425,770)
- --------------------------------------------------------------------------------
Net decrease in net assets
from capital transactions $(11,945,593) $ (37,511,682)
- --------------------------------------------------------------------------------
Net decrease in net assets $ (6,714,908) $ (32,272,852)
- --------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------
At beginning of period $102,503,516 $ 134,776,368
- --------------------------------------------------------------------------------
At end of period $ 95,788,608 $ 102,503,516
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
13
<PAGE>
National Limited Maturity Municipals Portfolio as of September 30, 1997
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Six Months Ended Year Ended March 31,
September 30, 1997 -------------------------------------------------------------
(Unaudited) 1997 1996 1995 1994*
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ratios to average daily net assets
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses (1) 0.61%+ 0.60% 0.57% 0.53% 0.52%+
Expenses after custodian fee reduction 0.60%+ 0.58% 0.56% -- --
Net investment income 5.50%+ 5.45% 5.08% 5.02% 4.74%+
Portfolio Turnover 25% 68% 68% 56% 21%
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) $95,789 $ 102,504 $ 134,776 $ 169,621 $ 177,842
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, May 3, 1993, to March 31, 1994.
(1) The expense ratios for the year ended March 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Portfolio to increase its expense ratio by
the effect of any expense offset arrangements with its service providers.
The expense ratios for each of the prior periods have not been adjusted to
reflect this change.
See notes to financial statements
14
<PAGE>
National Limited Maturity Municipals Portfolio as of September 30, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1 Significant Accounting Policies
-----------------------------------------------------------------------------
National Limited Maturity Municipals Portfolio (the Portfolio) seeks to
provide (1) a high level of income exempt from regular federal income tax
and (2) limited principal fluctuation. 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 discount when required for federal
income tax purposes.
C Income 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 Deferred Organization Expenses -- Costs incurred by the Portfolio in
connection with its organization are being amortized on the straight-line
basis over five years.
E Financial Futures Contracts -- Upon the entering of a financial futures
contract, 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 only
to hedge against anticipated future changes in interest rates. Should
interest rates move unexpectedly, the Portfolio may not achieve the
anticipated benefits of the financial futures contracts and may realize a
loss.
F Options on Financial Futures Contracts -- Upon the purchase of a put
option on a financial futures contract by the Portfolio, the premium paid is
recorded as an investment, the value of which is marked-to-market daily.
When a purchased option expires, a Portfolio will realize a loss in the
amount of the cost of the option. When a Portfolio enters into a closing
sales transaction, the Portfolio will realize a gain or loss depending on
whether the sales proceeds from the closing sales transaction is 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 options is
limited to the premium originally paid.
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 Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian of the Portfolio.
15
<PAGE>
National Limited Maturity Municipals Portfolio as of September 30, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
Pursuant to the custodian agreement, IBT receives a fee reduced by credits
which are determined based on the average daily cash balances the Portfolio
maintains with IBT. All significant credit balances used to reduce the
Portfolio's custodian fees are reported as a reduction of expenses on the
Statement of Operations.
I 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 revenue and expense during the reporting period. Actual results
could differ from those estimates.
J Other -- Investment transactions are accounted for on a trade date basis.
K Interim Financial Information -- The interim financial statements relating
to September 30, 1997 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
----------------------------------------------------------------------------
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 September 30, 1997, the fee
was equivalent to 0.48% of the Portfolio's average net assets for such
period and amounted to $237,865. 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. Certain of the officers and Trustees of the
Portfolio are officers and directors/trustees of the above organizations.
Trustees of the Portfolio that are not affiliated with the Investment
Adviser may elect to defer receipt of all or a percentage of their annual
fees in accordance with the terms of the Trustees Deferred Compensation
Plan. For the six months ended September 30, 1997, no significant amounts
have been deferred.
3 Line of Credit
----------------------------------------------------------------------------
The Portfolio participates with other portfolios and funds managed by BMR
and EVM and its affiliates in a $120 million unsecured line of credit
agreement with a group of banks. The 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 the bank's adjusted certificate of deposit
rate, eurodollar rate or federal funds rate. In addition, a fee computed at
an annual rate of 0.15% on the daily unused portion of the line of credit is
allocated among the participating portfolios and funds at the end of each
quarter. The Portfolio did not have any significant borrowings or allocated
fees during the period.
4 Investments
----------------------------------------------------------------------------
Purchases and sales of investments, other than U.S. Government securities
and short-term obligations, aggregated $24,411,911 and $33,893,326,
respectively.
5 Federal Income Tax Basis of Investments
----------------------------------------------------------------------------
The cost and unrealized appreciation/depreciation in value of the
investments owned at September 30, 1997, as computed on a federal income tax
basis, were as follows:
<TABLE>
<S> <C>
Aggregate cost $91,515,736
---------------------------------------------------------------------------
Gross unrealized appreciation $ 4,252,618
---------------------------------------------------------------------------
Gross unrealized depreciation (755)
---------------------------------------------------------------------------
Net unrealized appreciation $ 4,251,863
---------------------------------------------------------------------------
</TABLE>
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 written options and futures contracts and may involve, to a varying
degree, elements of risk in excess of the amounts recognized for financial
statement purposes. The notional or contractual amounts of these instruments
represent the investment the Portfolio has in particular classes of
financial instruments and does not necessarily represent the amounts
potentially subject to risk. The measurement of the risks associated with
these instruments is meaningful only when all related and offsetting
transactions are considered. A summary of obligations under these financial
instruments at September 30, 1997 were as follows:
<TABLE>
<CAPTION>
Futures
Contracts Net Unrealized
Expiration Date Contracts Position Depreciation
-----------------------------------------------------------------------
<S> <C> <C> <C>
12/97 25 U.S. Treasury Bonds Short $ (37,506)
-----------------------------------------------------------------------
</TABLE>
16
<PAGE>
EV Classic National Limited Maturity Municipals Fund as of September 30, 1997
INVESTMENT MANAGEMENT
EV Classic National Limited Maturity 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
Independent Trustees
Donald R. Dwight
President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate School of Business Administration
Norton H. Reamer
President and Director, United Asset
Management Corporation
John L. Thorndike
Formerly Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
National Limited Maturity Municipals Portfolio
Officers
Thomas J. Fetter
President
James B. Hawkes
Vice President and Trustee
Robert B. MacIntosh
Vice President
Raymond E. Hender
Vice President and
Portfolio Manager
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Independent Trustees
Donald R. Dwight
President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate School of Business Administration
Norton H. Reamer
President and Director, United Asset
Management Corporation
John L. Thorndike
Formerly Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
17
<PAGE>
This Page Intentionally Left Blank
<PAGE>
This Page Intentionally Left Blank
<PAGE>
Investment Adviser of
National Limited Maturity Municipals Portfolio
Boston Management and Research
24 Federal Street
Boston, MA 02110
Administrator of EV Classic National
Limited Maturity Municipals Fund
Eaton Vance Management
24 Federal Street
Boston, MA 02110
Principal Underwriter
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 482-8260
Custodian
Investors Bank & Trust Company
200 Clarendon Street, 16th Floor
Boston, MA 02116
Transfer Agent
First Data Investor Services Group
Attention: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
EV Classic National
Limited Maturity Municipals Fund
24 Federal Street
Boston, MA 02110
- --------------------------------------------------------------------------------
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its sales charges and
expenses. Please read the prospectus carefully before you invest or send money.
- --------------------------------------------------------------------------------
C-LNASRC-11/97
