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Mutual Funds
for People
Who Pay
EATON VANCE
============== Taxes
Mutual Funds
[Photo of brickwall omitted]
Annual Report March 31, 1998
EATON VANCE California
[Photo of highway omitted] LIMITED
MATURITY Connecticut
MUNICIPALS
FUNDS Florida
MARATHON Massachusetts
Michigan
New Jersey
New York
[Photo of bridge omitted]
Ohio
Pennsylvania
<PAGE>
EV Marathon Limited Maturity Municipals Fund as of March 31, 1998
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LETTER TO SHAREHOLDERS
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[Photo of Thomas J. Fetter]
Thomas J. Fetter,
President
The past year has been very favorable for the municipal bond market. Low
inflation and a declining interest rate environment produced relatively good
returns for the intermediate municipal sector. According to Lipper Analytical
Services, Inc., - a nationally recognized monitor of mutual fund performance -
the 140 funds in the Intermediate Municipal Debt Category had an average return
of 8.2% for the year ended March 31, 1998.*
Amid volatile global markets, more investors were drawn to municipal bonds...
Against a backdrop of moderate economic growth and low inflation, investors
again focused on the unique advantages of municipals, which remain among the
best tax-advantaged vehicles. In addition, the municipal market attracted an
increasing number of crossover investors from other markets. Many investors
bought municipals in a flight to quality, as the domestic equity market reached
overvalued levels and emerging markets were caught up in the turmoil of the
Asian currency crisis.
A sound economy has resulted in improving municipal credits...
The upbeat economic climate of recent years has provided strong support for the
municipal market. Steady job growth has generated increased tax revenues for
states and local issuers. As a result, many areas hard-hit in the recessions of
the 1970s and 1980s have since made a significant economic comeback, a fact
reflected in the value of their bonds. We expect to see many more such stories
emerge in the coming year.
Municipal bonds yield 88% of Treasury yields
30-Year AAA-rated General Obligation (GO) Bonds* 5.24%
Taxable equivalent yield in 36% tax bracket 8.19%
30-Year Treasury bond 5.93%
Principal and interest payments of Treasury securities are guaranteed by the
U.S. government.
*GO yields are a compilation of a representative variety of general obligations
and are not necessarily representative of the Fund's yield. Statistics as of
March 31, 1998.
Past performance is no guarantee of future results.
Source: Bloomberg, L.P.
In 1998, opportunities should continue for municipal bond investors...
At present, there is little sign of inflation on the horizon, and, with the
Asian turmoil of recent months, it's possible that the economy may slow somewhat
in the next year. Meanwhile, the federal budget situation has improved
dramatically in the past several years.
Naturally, those conditions are subject to change over time. The market could be
vulnerable if the economy strengthens or the budget situation unexpectedly
worsens. We will, of course, continue to closely monitor economic progress.
As for the tax-exempt market, municipal bonds currently represent unusual value
relative to their taxable counterparts. We believe that municipals will continue
to serve their traditional function of financing vital public works, while
offering good opportunities for tax-conscious investors.
Sincerely,
/s/ Thomas J. Fetter
Thomas J. Fetter
President
May 11, 1998
*It is not possible to invest directly in an Index or Average.
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Effective November 24, 1997, William H. Ahern
became Portfolio Manager of the New York Limited Maturity
Municipals Portfolio. Mr. Ahern is Vice President of Eaton Vance Management
and Boston Management and Research,
and manages other Eaton Vance municipal portfolios.
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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.
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<PAGE>
EV Marathon California Limited Maturity Municipals Fund as of March 31, 1998
INVESTMENT UPDATE
[Photo of Cynthia J. Clemson]
Cynthia J. Clemson,
Portfolio Manager
The Economy
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o California entered 1998 with strong economic momentum. The labor force
increased 309,800 during 1997 to over 16 million, a 2.9% annual growth rate
which exceeded the national employment growth rate of 2.5%. Unemployment
declined to 6.0% in March, 1998 from 6.7% a year earlier.
o California's economic growth has been broad-based. The construction sector
grew 10.8% in 1997, aided by declining mortgage rates. Manufacturing grew
4.4%, led by textiles and apparels with 11.3% and 4.2% growth, respectively.
Services showed solid growth, with particular strength in transportation,
communications, financial services, and business services.
o California continues to lead the nation in the computer software and motion
picture industries. The state remains the nation's leading software employer,
with 20% of total industry employment. Meanwhile, it is estimated that the
motion picture industry is responsible for up to 600,000 jobs statewide.
The Fund
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o During the year ended March 31, 1998, the Fund's Class I shares had a total
return of 7.6%.(1) This return resulted from an increase in net asset value
(NAV) per share to $10.33 on March 31, 1998 from $9.98 on March 31, 1997 and
the reinvestment of $0.397 per share in tax-free dividend income.(2)
o The Fund's Class II shares had a total return of 8.6% during the period, the
result of an increase in NAV to $10.33 from $9.98 and the reinvestment of
$0.489 per share in tax-free dividend income.(2)
o Based on the Fund's most recent dividends and net asset value per share of
$10.33, the distribution rates were 3.85% and 4.56% for Class I and Class II
shares, respectively.(3) The SEC 30-day yields at March 31 were 3.18% and
3.92%, respectively.(4)
Management Update
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o Management continued its program of adding yield to the Portfolio through the
selective purchases of non-rated and lower-rated securities.
o We extended our efforts to diversify the Portfolio's holdings. In addition, we
continued to upgrade call structure in order to improve the Portfolio's upside
potential.
o We maintained a barbell approach to the Portfolio by balancing lower-rated,
higher-yielding bonds with insured, "structure" bonds possessing good
liquidity and favorable trading characteristics.(5)
Your Investment at Work
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Stockton, CA Health Facilities
Revenue Bonds [Graphic Omitted]
Dameron Hospital Association
o Dameron Hospital is a nonprofit public hospital in Stockton, which is located
approximately 70 miles east of San Francisco.
o The proceeds of the bonds were loaned to Dameron to finance improvements and
equipment needs of the hospital, including new information systems and the
construction of a parking structure, as well as to refund outstanding Dameron
Hospital bonds.
o The bond is rated BBB+ by Standard & Poor's, carries a 5.7% coupon, and
provides 11 years of par call protection.
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(1) This return does not include the Fund's Class I applicable contingent
deferred sales charge (CDSC).(2) A portion of the Fund's income could be
subject to federal and state income tax and/or alternative minimum tax.(3)
The Fund's distribution rate represents actual distributions paid to
shareholders and is calculated daily by dividing the last distribution per
share (annualized) by the net asset value.(4) The Fund's SEC yields are
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) Private insurance does not remove the interest rate risks that
are associated with these investments.(6) Returns are calculated by
determining the percentage change in net asset value (NAV) with all
distributions reinvested. SEC returns for Class I reflect applicable CDSC
based on the following schedule: 3%-1st year; 2.5%-2nd year; 2%-3rd year;
1%-4th year.
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.
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Fund Information
as of March 31, 1998
Performance(6)
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Average Annual Total Returns (at net asset value)
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Class I Class II
------- --------
One Year 7.6% 8.6%
Five Years 4.2 4.5
Life of Fund (5/29/92) 4.9 5.2
SEC Average Annual Total Returns (including applicable CDSC)
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Class I Class II
------- --------
One Year 4.6% 8.6%
Five Years 4.2 4.5
Life of Fund (5/29/92) 4.9 5.2
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EV MARATHON
CALIFORNIA LIMITED MATURITY MUNICIPALS FUND VS. THE LEHMAN BROTHERS 7-YEAR
MUNICIPAL BOND INDEX* May 31, 1992 - March 31, 1998
ELCAX EXCAX
Fund - Fund -
DATE Class I Class II LBMBI
- ----------------------------------------------------
5/31/92 $10,000 $10,000 $10,000
6/30/92 10,050 10,050 10,159
7/31/92 10,401 10,401 10,462
8/31/92 10,228 10,228 10,354
9/30/92 10,280 10,280 10,438
10/31/92 10,142 10,142 10,368
11/30/92 10,363 10,363 10,522
12/31/92 10,448 10,448 10,608
1/31/93 10,566 10,566 10,763
2/28/93 10,914 10,914 11,093
3/31/93 10,767 10,767 10,947
4/30/93 10,864 10,864 11,015
5/31/93 10,911 10,911 11,048
6/30/93 11,037 11,037 11,250
7/31/93 11,059 11,059 11,252
8/31/93 11,232 11,232 11,451
9/30/93 11,327 11,327 11,577
10/31/93 11,337 11,337 11,607
11/30/93 11,252 11,252 11,505
12/31/93 11,419 11,419 11,716
1/31/94 11,530 11,530 11,840
2/28/94 11,299 11,299 11,583
3/31/94 10,967 10,967 11,274
4/30/94 11,012 11,012 11,356
5/31/94 11,075 11,075 11,413
6/30/94 11,028 11,028 11,392
7/31/94 11,169 11,169 11,553
8/31/94 11,179 11,179 11,613
9/30/94 11,066 11,066 11,502
10/31/94 10,943 10,943 11,387
11/30/94 10,771 10,771 11,221
12/31/94 10,860 10,860 11,391
1/31/95 11,057 11,057 11,604
2/28/95 11,286 11,286 11,866
3/31/95 11,354 11,354 11,989
4/30/95 11,360 11,360 11,021
5/31/95 11,589 11,589 12,341
6/30/95 11,523 11,523 12,330
7/31/95 11,643 11,643 12,487
8/31/95 11,725 11,725 12,634
9/30/95 11,774 11,774 12,683
10/31/95 11,871 11,871 12,793
11/30/95 11,978 11,978 12,934
12/31/95 12,039 12,039 13,003
1/31/96 12,125 12,125 13,129
2/28/96 12,081 12,081 13,084
3/31/96 11,952 11,952 12,956
4/30/96 11,932 11,932 12,932
5/31/96 11,910 11,910 12,913
6/30/96 11,965 11,965 13,012
7/31/96 12,037 12,030 13,120
8/31/96 12,029 12,029 13,127
9/30/96 12,143 12,151 13,246
10/31/96 12,218 12,233 13,388
11/30/96 12,441 12,464 13,612
12/31/96 12,348 12,379 13,570
1/31/97 12,352 12,389 13,619
2/28/97 12,446 12,492 13,732
3/31/97 12,310 12,362 13,554
4/30/97 12,374 12,433 13,624
5/31/97 12,538 12,606 13,795
6/30/97 12,618 12,695 13,927
7/31/97 12,895 12,980 14,249
8/31/97 12,762 12,854 14,149
9/30/97 12,880 12,980 14,298
10/31/97 12,883 12,992 14,383
11/30/97 12,941 12,059 14,434
12/31/97 13,132 13,258 14,610
1/31/98 13,251 13,386 14,763
2/28/98 13,258 13,402 14,777
3/31/98 13,245 13,421 14,777
*Source: Tower Data Systems, Bethesda, MD. The chart compares the Fund's total
return with that of the Lehman Brothers Municipal Bond Index, a broad-based,
unmanaged market index. Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. The lines on
the chart represent total returns of $10,000 hypothetical investments in the
Fund and the Lehman Brothers Municipal Bond Index. The Index's total return does
not reflect commissions or expenses that would have been incurred if an investor
individually purchased or sold the securities represented in the Index. It is
not possible to invest in an Index.
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Federal income tax information on distributions. For Federal income tax
purposes, 99.20% of the total dividends paid by the Fund from net investment
income during the year ended March 31, 1998 is designated as an exempt-interest
dividend.
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<PAGE>
EV Marathon Connecticut Limited Maturity Municipals Fund as of March 31, 1998
INVESTMENT UPDATE
[Photo of William H. Ahern]
William H. Ahern,
Portfolio Manager
The Economy
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o Connecticut's economy gathered strength in 1997, a trend that has continued in
1998, according to the University of Connecticut Center for Economic Analysis.
Most economic indicators showed healthy gains, including total employment,
personal income, business starts, retail sales, and consumer confidence.
o The Connecticut housing sector was especially strong in 1997. Housing permits
rose 24.4% in February from the same period a year ago. Tolland and Hartford
counties led the state's housing rebound.
o Connecticut's economic expansion, now in its sixth year, is among the state's
longest expansions on record. Consumer confidence, a key determinant in the
expansion, remains high. According to the U.S. Bureau of Labor Statistics,
consumer confidence in New England has risen 16.0% in the past year.
The Fund
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o During the year ended March 31, 1998, the Fund's Class I shares had a total
return of 7.0%.(1) This return resulted from an increase in net asset value
(NAV) per share to $10.11 on March 31, 1998 from $9.79 on March 31, 1997 and
the reinvestment of $0.369 per share in tax-free dividend income.(2)
o The Fund's Class II shares had a total return of 8.0% during the period, the
result of an increase in NAV to $10.11 from $9.79 and the reinvestment of
$0.459 per share in tax-free dividend income.(2)
o Based on the Fund's most recent dividends and net asset values per share of
$10.11, the distribution rates were 3.66% and 4.37% for Class I and Class II
shares, respectively.(3) The SEC 30-day yields at March 31 were 2.69% and
3.69%, respectively.(4)
Management Update
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o We emphasized relative value during the period, seizing trading opportunities
to add incrementally to the Portfolio's book yield.
o We made some modest adjustments to the Portfolio, supplementing our large
exposure to general obligations with selective industrial development bonds,
which offered very attractive yields. The IDB bonds improved the income
component of the Fund.
o We continued to focus on upgrading call protection. The market continues to
treat harshly those bonds with inadequate call characteristics.
Your Investment at Work
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Connecticut Health and Education
Facilities Authority [Graphic Omitted]
Greenwich Hospital
o Greenwich Hospital is a 160-bed, acute care and referral center serving
Greenwich and surrounding communities in southwestern Connecticut.
o The proceeds were used to finance construction of a new hospital building,
including a general medical unit and units dedicated to cardiopulminary,
women's/ infant, surgical, psychiatric, orthopedic and emergency room care.
o The bonds, rated Aaa/AAA by Moody's and S&P, carry a 5.75% coupon from a very
high-quality issuer, while providing ample call protection.
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(1) This return does not include the Fund's Class I applicable contingent
deferred sales charge (CDSC).(2) A portion of the Fund's income could be
subject to federal and state income tax and/or alternative minimum tax.(3)
The Fund's distribution rate represents actual distributions paid to
shareholders and is calculated daily by dividing the last distribution per
share (annualized) by the net asset value.(4) The Fund's SEC yields are
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 (NAV) with all distributions reinvested. SEC returns for
Class I reflect applicable CDSC based on the following schedule: 3%-1st
year; 2.5%-2nd year; 2%-3rd year; 1%-4th year.
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.
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Fund Information
as of March 31, 1998
Performance(5)
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Average Annual Total Returns (at net asset value)
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Class I Class II
------- --------
One Year 7.0% 8.0%
Life of Fund (4/16/93) 4.2 4.4
SEC Average Annual Total Returns (including applicable CDSC)
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Class I Class II
------- --------
One Year 4.0% 8.0%
Life of Fund (4/16/93) 4.2 4.4
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EV MARATHON
CONNECTICUT LIMITED MATURITY MUNICIPALS FUND VS. THE LEHMAN BROTHERS 7-YEAR
MUNICIPAL BOND INDEX* April 30, 1993 - March 31, 1998
ELCTX ELCTX
Fund - Fund -
DATE Class I Class II LBMBI
- ----------------------------------------------------
4/30/93 $10,000 $10,000 $10,000
5/31/93 9,970 9,970 10,030
6/30/93 10,103 10,103 10,213
7/31/93 10,108 10,108 10,215
8/31/93 10,287 10,287 10,396
9/30/93 10,384 10,384 10,510
10/31/93 10,388 10,388 10,537
11/30/93 10,302 10,302 10,444
12/31/93 10,483 10,483 10,636
1/31/94 10,595 10,595 10,749
2/28/94 10,381 10,381 10,516
3/31/94 10,083 10,083 10,235
4/30/94 10,154 10,154 10,310
5/31/94 10,189 10,189 10,361
6/30/94 10,142 10,142 10,343
7/31/94 10,273 10,273 10,488
8/31/94 10,301 10,301 10,543
9/30/94 10,212 10,212 10,442
10/31/94 10,102 10,102 10,337
11/30/94 9,978 9,978 10,187
12/31/94 10,095 10,095 10,341
1/31/95 10,257 10,257 10,535
2/28/95 10,440 10,440 10,772
3/31/95 10,513 10,513 10,884
4/30/95 10,537 10,537 10,913
5/31/95 10,719 10,719 11,204
6/30/95 10,687 10,687 11,194
7/31/95 10,800 10,800 11,336
8/31/95 10,898 10,898 11,470
9/30/95 10,944 10,944 11,514
10/31/95 11,045 11,045 11,614
11/30/95 11,156 11,156 11,742
12/31/95 11,201 11,201 11,804
1/31/96 11,270 11,270 11,919
2/28/96 11,215 11,215 11,878
3/31/96 11,091 11,091 11,762
4/30/96 11,048 11,048 11,740
5/31/96 11,003 11,003 11,723
6/30/96 11,086 11,086 11,813
7/31/96 11,187 11,187 11,911
8/31/96 11,154 11,154 11,917
9/30/96 11,271 11,271 12,025
10/31/96 11,339 11,339 12,154
11/30/96 11,525 11,525 12,357
12/31/96 11,480 11,480 12,319
1/31/97 11,493 11,493 12,364
2/28/97 11,579 11,580 12,467
3/31/97 11,447 11,454 12,305
4/30/97 11,505 11,519 12,368
5/31/97 11,658 11,679 12,524
6/30/97 11,731 11,760 12,643
7/31/97 11,967 12,003 12,936
8/31/97 11,838 11,881 12,845
9/30/97 11,935 11,985 12,981
10/31/97 11,972 12,029 13,057
11/30/97 12,024 12,089 13,103
12/31/97 12,190 12,263 13,264
1/31/98 12,263 12,344 13,403
2/28/98 12,279 12,368 13,415
3/31/98 12,252 12,369 13,416
*Source: Tower Data Systems, Bethesda, MD. The chart compares the Fund's total
return with that of the Lehman Brothers Municipal Bond Index, a broad-based,
unmanaged market index. Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. The lines on
the chart represent total returns of $10,000 hypothetical investments in the
Fund and the Lehman Brothers Municipal Bond Index. The Index's total return does
not reflect commissions or expenses that would have been incurred if an investor
individually purchased or sold the securities represented in the Index. It is
not possible to invest in an Index.
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Federal income tax information on distributions. For Federal income tax
purposes, 97.91% of the total dividends paid by the Fund from net investment
income during the year ended March 31, 1998 is designated as an exempt-interest
dividend.
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<PAGE>
EV Marathon Florida Limited Maturity Municipals Fund as of March 31, 1998
INVESTMENT UPDATE
[Photo of William H. Ahern]
William H. Ahern,
Portfolio Manager
The Economy
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o Florida's economy continues to enjoy great strength, driven by a diverse base
that includes a booming service sector. The service sector accounts for over
35% of total non-farm employment and is dominated by tourism. Florida topped
California and Hawaii to rank as the country's leading destination for
summer vacations.
o Trade continues to provide strong job growth. Industrial machinery, computers,
electrical equipment, transportation equipment, fertilizer and scientific
instruments were among Florida's leading export industries in the past year.
o Other important sectors in the Florida economy include construction - which
slowed somewhat in the past year from the rapid growth of the mid-1990's - and
manufacturing, which accounts for almost 8% of total employment. Within
manufacturing, the aerospace, telecommunications equipment, and defense
industries should continue to show strength.
The Fund
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o During the year ended March 31, 1998, the Fund's Class I shares had a total
return of 7.1%.(1) This return resulted from an increase in net asset value
(NAV) per share to $10.29 on March 31, 1998 from $9.98 on March 31, 1997 and
the reinvestment of $0.387 per share in tax-free dividend income.(2)
o The Fund's Class II shares had a total return of 8.1% during the period, the
result of an increase in NAV to $10.29 from $9.98 and the reinvestment of
$0.48 per share in tax-free dividend income.(2)
o Based on the Fund's most recent dividends and net asset values per share of
$10.29, the distribution rates were 3.77% and 4.49% for Class I and Class II
shares, respectively.(3) The SEC 30-day yields at March 31 were 3.09% and
3.83%, respectively.(4)
Management Update
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o The Portfolio continued its barbell strategy, which balances discount bonds
for capital appreciation with higher-coupon issues for income. Escrowed bonds,
general obligations, insured hospitals, and electric utilities were the
Portfolio's largest sector weightings.
o Amid a low-inflation economic outlook, the climate for bonds remained
generally constructive. Therefore, we continued our efforts to improve the
Fund's call protection, which further enhanced the Fund's capital appreciation
potential.
o With quality a major consideration for Florida investors, insured bonds again
represented a high percentage of the Portfolio's investments.(5)
Your Investment at Work
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Palm Beach County
Solid Waste Industrial Development Bonds [Graphic Omitted]
Osceola Power Project
o The proceeds of this bond were used to finance the construction and operation
of a facility to dispose of by-products from Osceola's sugar mill in Pahokee.
The Project's electric generating capacity has been sold to Florida Power &
Light Company.
o This co-generation project is additionally attractive because it provides
environmental solutions while generating economic benefits.
o The bonds have attractive 6.95% coupon and are an example of the Portfolio's
efforts to find opportunities in selective non-rated issues.
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(1) This return does not include the Fund's Class I applicable contingent
deferred sales charge (CDSC).(2) A portion of the Fund's income could be
subject to federal income 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.(4) The Fund's SEC yields are 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) Private
insurance does not remove the interest rate risks that are associated with
these investments.(6) Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. SEC
returns for Class I reflect applicable CDSC based on the following schedule:
3%-1st year; 2.5%-2nd year; 2%-3rd year; 1%-4th year.
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 March 31, 1998
Performance(6)
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
Class I Class II
------- --------
One Year 7.1% 8.1%
Five Years 4.1 4.3
Life of Fund (5/29/92) 4.8 5.1
SEC Average Annual Total Returns (including applicable CDSC)
- --------------------------------------------------------------------------------
Class I Class II
------- --------
One Year 4.1% 8.1%
Five Years 4.1 4.3
Life of Fund (5/29/92) 4.8 5.1
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EV MARATHON
FLORIDA LIMITED MATURITY MUNICIPALS FUND VS. THE LEHMAN BROTHERS 7-YEAR
MUNICIPAL BOND INDEX* May 31, 1992 - March 31, 1998
ELFLX EXFLX
Fund - Fund -
DATE Class I Class II LBMBI
- ----------------------------------------------------
5/31/92 $10,000 $10,000 $10,000
6/30/92 10,020 10,020 10,159
7/31/92 10,334 10,334 10,462
8/31/92 10,202 10,202 10,354
9/30/92 10,265 10,265 10,438
10/31/92 10,147 10,147 10,368
11/30/92 10,369 10,369 10,522
12/31/92 10,454 10,454 10,608
1/31/93 10,572 10,572 10,763
2/28/93 10,951 10,951 11,093
3/31/93 10,794 10,794 10,947
4/30/93 10,881 10,881 11,015
5/31/93 10,928 10,928 11,048
6/30/93 11,054 11,054 11,250
7/31/93 11,065 11,065 11,252
8/31/93 11,226 11,226 11,451
9/30/93 11,332 11,332 11,577
10/31/93 11,352 11,352 11,607
11/30/93 11,256 11,256 11,505
12/31/93 11,492 11,492 11,716
1/31/94 11,592 11,592 11,840
2/28/94 11,351 11,351 11,583
3/31/94 10,975 10,975 11,274
4/30/94 11,075 11,075 11,356
5/31/94 11,148 11,148 11,413
6/30/94 11,101 11,101 11,392
7/31/94 11,253 11,253 11,553
8/31/94 11,264 11,264 11,613
9/30/94 11,162 11,162 11,502
10/31/94 11,039 11,039 11,387
11/30/94 10,890 10,890 11,221
12/31/94 11,029 11,029 11,391
1/31/95 11,226 11,226 11,604
2/28/95 11,433 11,433 11,866
3/31/95 11,501 11,501 11,989
4/30/95 11,506 11,506 12,021
5/31/95 11,723 11,723 12,341
6/30/95 11,715 11,715 12,330
7/31/95 11,835 11,835 12,487
8/31/95 11,940 11,940 12,634
9/30/95 11,967 11,967 12,683
10/31/95 12,051 12,051 12,793
11/30/95 12,136 12,136 12,934
12/31/95 12,208 12,208 13,003
1/31/96 12,282 12,282 13,129
2/28/96 12,203 12,203 13,084
3/31/96 12,050 12,050 12,956
4/30/96 12,018 12,018 12,932
5/31/96 11,984 11,984 12,913
6/30/96 12,039 12,039 13,012
7/31/96 12,111 12,104 13,120
8/31/96 12,115 12,116 13,127
9/30/96 12,218 12,225 13,246
10/31/96 12,280 12,295 13,388
11/30/96 12,479 12,501 13,612
12/31/96 12,398 12,428 13,570
1/31/97 12,365 12,402 13,619
2/28/97 12,459 12,505 13,732
3/31/97 12,297 12,349 13,554
4/30/97 12,385 12,444 13,624
5/31/97 12,535 12,603 13,795
6/30/97 12,614 12,691 13,927
7/31/97 12,827 12,912 14,249
8/31/97 12,694 12,786 14,149
9/30/97 12,785 12,886 14,298
10/31/97 12,838 12,947 14,383
11/30/97 12,895 12,013 14,434
12/31/97 13,034 13,160 14,610
1/31/98 13,164 13,299 14,763
2/28/98 13,170 13,314 14,777
3/31/98 13,168 13,344 14,777
*Source: Tower Data Systems, Bethesda, MD. The chart compares the Fund's total
return with that of the Lehman Brothers Municipal Bond Index, a broad-based,
unmanaged market index. Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. The lines on
the chart represent total returns of $10,000 hypothetical investments in the
Fund and the Lehman Brothers Municipal Bond Index. The Index's total return does
not reflect commissions or expenses that would have been incurred if an investor
individually purchased or sold the securities represented in the Index. It is
not possible to invest in an Index.
- --------------------------------------------------------------------------------
Federal income tax information on distributions. For Federal income tax
purposes, 99.56% of the total dividends paid by the Fund from net investment
income during the year ended March 31, 1998 is designated as an exempt-interest
dividend.
- --------------------------------------------------------------------------------
<PAGE>
EV Marathon Massachusetts Limited Maturity Municipals Fund as of March 31, 1998
INVESTMENT UPDATE
[Photo of William H. Ahern]
William H. Ahern,
Portfolio Manager
The Economy
- --------------------------------------------------------------------------------
o Massachusetts' economy benefits from diverse sources of strength most notably
the high-technology and financial services industries which have produced
solid growth, high personal incomes, and very low unemployment. The
Commonwealth's unemployment rate reached 3.7% in March 1998.
o Massachusetts' manufacturing base has enjoyed a sharp turnaround in the past
year, with manufacturing employment rising by 12,000 jobs in the past year,
according to the Department of Economic Development. That marked the largest
annual increase for the manufacturing sector since 1984.
o Despite the booming economy, however, Massachusetts has one of the highest
per-capita debt levels in the nation. Major projects, such as a new convention
center and the Central Artery/Third Harbor Tunnel Project, could create
financial pressures in the years to come.
The Fund
- --------------------------------------------------------------------------------
o During the year ended March 31, 1998, the Fund's Class I shares had a total
return of 7.3%.(1) This return resulted from an increase in net asset value
(NAV) per share to $10.33 on March 31, 1998 from $9.99 on March 31, 1997 and
the reinvestment of $0.382 per share in tax-free dividend income.(2)
o The Fund's Class II shares had a total return of 8.3% during the period, the
result of an increase in NAV to $10.33 from $9.99 and the reinvestment of
$0.473 per share in tax-free dividend income.(2)
o Based on the Fund's most recent dividends and net asset values per share of
$10.33, the distribution rates were 3.71% and 4.41% for Class I and Class II
shares, respectively.(3) The SEC 30-day yields at March 31 were 3.01% and
3.94%, respectively.(4)
Management Update
- --------------------------------------------------------------------------------
o The Portfolio underwent some modest adjustments during the past year. While
still fiercely competitive, the hospital sector offered value among the better
institutions and represented the Portfolio's largest weighting at March 31.
o Consistent with our favorable market outlook, we have continued to upgrade
call protection. Typically, as bonds age, their call protection is eroded,
reducing their responsiveness to lower interest rates.
o Municipal issuance has been increasingly dominated by investment-grade and
insured bonds. To preserve the Fund's yield, we have selectively pursued bonds
in the non-rated segment of the market, where Eaton Vance's research strengths
can add significant value to the Portfolio.
Your Investment at Work
- --------------------------------------------------------------------------------
Massachusetts Health & Educational
Finance Authority [Graphic Omitted]
Fairview Extended Care Facilities, Inc.
o Fairview Extended Care Services, Inc. is a non-profit company that operates a
series of nursing homes and continuing care facilities within the
Commonwealth.
o These 1990 First Mortgage Series A bonds were issued in 1990 with a 10.125%
coupon.
o The non-rated bonds were prerefunded in July 1997. While the bonds' handsome
coupon provided excellent income for the Fund, the prerefunding provided an
additional boost to performance.
- --------------------------------------------------------------------------------
(1) This return does not include the Fund's Class I applicable contingent
deferred sales charge (CDSC).(2) A portion of the Fund's income could be
subject to federal and state income tax and/or alternative minimum tax.(3)
The Fund's distribution rate represents actual distributions paid to
shareholders and is calculated daily by dividing the last distribution per
share (annualized) by the net asset value.(4) The Fund's SEC yields are
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 (NAV) with all distributions reinvested. SEC returns for
Class I reflect applicable CDSC based on the following schedule: 3%-1st
year; 2.5%-2nd year; 2%-3rd year; 1%-4th year.
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 March 31, 1998
Performance(5)
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
Class I Class II
------- --------
One Year 7.3% 8.3%
Five Years 4.3 4.6
Life of Fund (6/1/92) 4.9 5.1
SEC Average Annual Total Returns (including applicable CDSC)
- --------------------------------------------------------------------------------
Class I Class II
------- --------
One Year 4.3% 8.3%
Five Years 4.3 4.6
Life of Fund (6/1/92) 4.9 5.1
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EV MARATHON
MASSACHUSETTS LIMITED MATURITY MUNICIPALS FUND VS. THE LEHMAN BROTHERS 7-YEAR
MUNICIPAL BOND INDEX* June 30, 1992 - March 31, 1998
ELMAX EXMAX
Fund - Fund -
DATE Class I Class II LBMBI
- ----------------------------------------------------
6/30/92 $10,000 $10,000 $10,000
7/31/92 10,278 10,278 10,298
8/31/92 10,136 10,136 10,192
9/30/92 10,178 10,178 10,275
10/31/92 10,070 10,070 10,205
11/30/92 10,270 10,270 10,358
12/31/92 10,355 10,355 10,442
1/31/93 10,462 10,462 10,595
2/28/93 10,798 10,798 11,919
3/31/93 10,652 10,652 10,776
4/30/93 10,739 10,739 10,843
5/31/93 10,786 10,786 10,875
6/30/93 10,900 10,900 11,074
7/31/93 10,911 10,911 11,076
8/31/93 11,094 11,094 11,272
9/30/93 11,180 11,180 11,396
10/31/93 11,201 11,201 11,425
11/30/93 11,117 11,117 11,325
12/31/93 11,300 11,300 11,533
1/31/94 11,399 11,399 11,655
2/28/94 11,180 11,180 11,402
3/31/94 10,838 10,838 11,098
4/30/94 10,917 10,917 11,179
5/31/94 10,979 10,979 11,234
6/30/94 10,933 10,933 11,214
7/31/94 11,085 11,085 11,372
8/31/94 11,107 11,107 11,432
9/30/94 10,995 10,995 11,322
10/31/94 10,884 10,884 11,209
11/30/94 10,746 10,746 11,045
12/31/94 10,903 10,903 11,213
1/31/95 11,077 11,077 11,423
2/28/95 11,295 11,295 11,680
3/31/95 11,363 11,363 11,802
4/30/95 11,369 11,369 11,833
5/31/95 11,575 11,575 12,148
6/30/95 11,533 11,533 12,137
7/31/95 11,641 11,641 12,292
8/31/95 11,747 11,747 12,437
9/30/95 11,795 11,795 12,484
10/31/95 11,878 11,878 12,593
11/30/95 11,996 11,996 12,732
12/31/95 12,043 12,043 13,799
1/31/96 12,116 12,116 13,923
2/28/96 12,058 12,058 13,879
3/31/96 11,940 11,940 12,753
4/30/96 11,883 11,883 12,730
5/31/96 11,860 11,860 12,711
6/30/96 11,925 11,925 12,809
7/31/96 11,996 11,989 12,915
8/31/96 11,999 11,999 12,922
9/30/96 12,111 12,119 13,039
10/31/96 12,208 12,223 13,179
11/30/96 12,380 12,403 13,399
12/31/96 12,298 12,329 13,358
1/31/97 12,300 12,338 13,406
2/28/97 12,405 12,451 13,517
3/31/97 12,268 12,320 13,342
4/30/97 12,354 12,414 13,411
5/31/97 12,504 12,572 13,579
6/30/97 12,595 12,671 13,709
7/31/97 12,794 12,879 14,027
8/31/97 12,722 12,815 13,927
9/30/97 12,800 12,901 14,075
10/31/97 12,815 12,923 14,158
11/30/97 12,883 13,001 14,208
12/31/97 13,059 13,185 14,382
1/31/98 13,150 13,285 14,533
2/28/98 13,156 13,299 14,546
3/31/98 13,167 13,341 14,546
*Source: Tower Data Systems, Bethesda, MD. The chart compares the Fund's total
return with that of the Lehman Brothers Municipal Bond Index, a broad-based,
unmanaged market index. Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. The lines on
the chart represent total returns of $10,000 hypothetical investments in the
Fund and the Lehman Brothers Municipal Bond Index. The Index's total return does
not reflect commissions or expenses that would have been incurred if an investor
individually purchased or sold the securities represented in the Index. It is
not possible to invest in an Index.
- --------------------------------------------------------------------------------
Federal income tax information on distributions. For Federal income tax
purposes, 97.74% of the total dividends paid by the Fund from net investment
income during the year ended March 31, 1998 is designated as an exempt-interest
dividend.
- --------------------------------------------------------------------------------
<PAGE>
EV Marathon Michigan Limited Maturity Municipals Fund as of March 31, 1998
INVESTMENT UPDATE
[Photo of William H. Ahern]
William H. Ahern,
Portfolio Manager
The Economy
- --------------------------------------------------------------------------------
o Economic activity continued to expand in Michigan in 1998, as the robust
national economy created strong demand for the state's manufacturing sector.
The City of Detroit continued its comeback, with unemployment declining and
new business starts gathering momentum.
o The pivotal auto industry enjoyed another strong year in 1997, albeit in an
increasingly competitive sales environment. Sales of U.S. cars and trucks
totalled 15.2 million units for the year.
o According to the Senate Fiscal Agency, Michigan continues to receive less than
a per-capita share of federal expenditures. With no major military
installation in the state, the state receives less in direct payments and
procurements than many other states. The shortfall has averaged more than 20%
over the past decade.
The Fund
- --------------------------------------------------------------------------------
o During the year ended March 31, 1998, the Fund's Class I shares had a total
return of 7.2%.(1) This return resulted from an increase in net asset value
(NAV) per share to $10.04 on March 31, 1998 from $9.74 on March 31, 1997 and
the reinvestment of $0.385 per share in tax-free dividend income.(2)
o The Fund's Class II shares had a total return of 8.2% during the period, the
result of an increase in NAV to $10.04 from $9.74 and the reinvestment of
$0.477 per share in tax-free dividend income.(2)
o Based on the Fund's most recent dividends and net asset values per share of
$10.04, the distribution rates were 3.84% and 4.57% for Class I and Class II
shares, respectively.(3) The SEC 30-day yields at March 31 were 3.04% and
3.71%, respectively.(4)
Management Update
- --------------------------------------------------------------------------------
o The Portfolio continued to focus on relative value during the past year,
seeking good trading opportunities as well as pursuing attractive non-rated
bonds when possible.
o Several of the Portfolio's major investments were Detroit issues. The City's
general obligation bonds have fared well due to signs of economic
revitalization and the improved prospects for casino gambling.
o Escrowed bonds were among the Portfolio's largest weightings. Pre-refunded and
backed by U.S. Treasuries, escrowed bonds tend to perform well in a declining
interest rate environment.
Your Investment at Work
- --------------------------------------------------------------------------------
Monroe County
Pollution Control Revenue Bonds [Graphic Omitted]
The Detroit Edison Co.
o The proceeds of the bonds were used to build pollution control facilities at
Detroit Edison's Enrico Fermi 2 and Monroe Power Plants.
o In financing the purchase of land, pollution control monitors, and solid waste
disposal equipment, the bonds provided much-needed environmental support for a
major power source in southeastern Michigan.
o In addition to providing an attractive 6.35% coupon, the bonds are insured by
AMBAC, one of the nation's largest municipal bond insurers and, are rated
Aaa/AAA by Moody's and Standard & Poor's, respectively.(5)
- --------------------------------------------------------------------------------
(1) This return does not include the Fund's Class I applicable contingent
deferred sales charge (CDSC).(2) A portion of the Fund's income could be
subject to federal and state income tax and/or alternative minimum tax.(3)
The Fund's distribution rate represents actual distributions paid to
shareholders and is calculated daily by dividing the last distribution per
share (annualized) by the net asset value.(4) The Fund's SEC yields are
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) Private insurance does not remove the interest rate risks that
are associated with this investment.(6) Returns are calculated by
determining the percentage change in net asset value (NAV) with all
distributions reinvested. SEC returns for Class I reflect applicable CDSC
based on the following schedule: 3%-1st year; 2.5%-2nd year; 2%-3rd year;
1%-4th year.
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 March 31, 1998
Performance(6)
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
Class I Class II
------- --------
One Year 7.2% 8.2%
Life of Fund (4/16/93) 4.2 4.4
SEC Average Annual Total Returns (including applicable CDSC)
- --------------------------------------------------------------------------------
Class I Class II
------- --------
One Year 4.2% 8.2%
Life of Fund (4/16/93) 4.2 4.4
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EV MARATHON
MICHIGAN LIMITED MATURITY MUNICIPALS FUND VS. THE LEHMAN BROTHERS 7-YEAR
MUNICIPAL BOND INDEX* April 30, 1993 - March 31, 1998
ELMHX EXMHX
Fund - Fund -
DATE Class I Class II LBMBI
- ----------------------------------------------------
4/30/93 $10,000 $10,000 $10,000
5/31/93 9,980 9,980 10,030
6/30/93 10,124 10,124 10,213
7/31/93 10,130 10,130 10,215
8/31/93 10,282 10,282 10,396
9/30/93 10,380 10,380 10,510
10/31/93 10,387 10,387 10,537
11/30/93 10,324 10,324 10,444
12/31/93 10,495 10,495 10,636
1/31/94 10,609 10,609 10,749
2/28/94 10,375 10,375 10,516
3/31/94 10,057 10,057 10,235
4/30/94 10,140 10,140 10,310
5/31/94 10,177 10,177 10,361
6/30/94 10,151 10,151 10,343
7/31/94 10,274 10,274 10,488
8/31/94 10,292 10,292 10,543
9/30/94 10,193 10,193 10,442
10/31/94 10,074 10,074 10,337
11/30/94 9,930 9,930 10,187
12/31/94 10,038 10,038 10,341
1/31/95 10,245 10,245 10,535
2/28/95 10,430 10,430 10,772
3/31/95 10,483 10,483 10,884
4/30/95 10,486 10,486 10,913
5/31/95 10,681 10,681 11,204
6/30/95 10,639 10,639 11,194
7/31/95 10,718 10,718 11,336
8/31/95 10,818 10,818 11,470
9/30/95 10,863 10,863 11,514
10/31/95 10,998 10,998 11,614
11/30/95 11,099 11,099 11,742
12/31/95 11,133 11,133 11,804
1/31/96 11,225 11,225 11,919
2/28/96 11,136 11,136 11,878
3/31/96 11,001 11,001 11,762
4/30/96 10,959 10,959 11,740
5/31/96 10,948 10,948 11,723
6/30/96 11,022 11,022 11,813
7/31/96 11,136 11,136 11,911
8/31/96 11,082 11,082 11,917
9/30/96 11,212 11,212 12,025
10/31/96 11,305 11,305 12,154
11/30/96 11,494 11,492 12,357
12/31/96 11,463 11,468 12,319
1/31/97 11,500 11,512 12,364
2/28/97 11,588 11,609 12,467
3/31/97 11,457 11,484 12,305
4/30/97 11,505 11,539 12,368
5/31/97 11,649 11,690 12,524
6/30/97 11,736 11,785 12,643
7/31/97 11,963 11,020 12,936
8/31/97 11,859 11,923 12,845
9/30/97 11,922 11,994 12,981
10/31/97 11,948 11,027 13,057
11/30/97 11,990 11,078 13,103
12/31/97 12,171 12,267 13,264
1/31/98 12,283 12,387 13,403
2/28/98 12,277 12,389 13,415
3/31/98 12,287 12,429 13,416
*Source: Tower Data Systems, Bethesda, MD. The chart compares the Fund's total
return with that of the Lehman Brothers Municipal Bond Index, a broad-based,
unmanaged market index. Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. The lines on
the chart represent total returns of $10,000 hypothetical investments in the
Fund and the Lehman Brothers Municipal Bond Index. The Index's total return does
not reflect commissions or expenses that would have been incurred if an investor
individually purchased or sold the securities represented in the Index. It is
not possible to invest in an Index.
- --------------------------------------------------------------------------------
Federal income tax information on distributions. For Federal income tax
purposes, 99.71% of the total dividends paid by the Fund from net investment
income during the year ended March 31, 1998 is designated as an exempt-interest
dividend.
- --------------------------------------------------------------------------------
<PAGE>
EV Marathon New Jersey Limited Maturity Municipals Fund as of March 31, 1998
INVESTMENT UPDATE
[Photo of William H. Ahern]
William H. Ahern,
Portfolio Manager
The Economy
- --------------------------------------------------------------------------------
o The New Jersey economy continued its slow but steady improvement in the past
year. Total state employment rose by more than 87,000 jobs, the strongest job
growth since 1984. Unemployment was 5.1 in March, the lowest level since 1990.
o Residential construction in New Jersey was very strong in the past year, with
building permits for residential units rising 21%. Construction activity was
boosted by the robust economy and mild winter weather, and marked the best
showing in a decade for the residential construction industry.
o The fastest job growth remained in the services-related sectors. Restaurants,
temporary personnel agencies, computer-related businesses, data processing,
engineering, and financial services all posted strong job growth in the past
year.
The Fund
- --------------------------------------------------------------------------------
o During the year ended March 31, 1998, the Fund's Class I shares had a total
return of 6.7%.(1) This return resulted from an increase in net asset value
(NAV) per share to $10.35 on March 31, 1998 from $10.07 on March 31, 1997 and
the reinvestment of $0.389 per share in tax-free dividend income.(2)
o The Fund's Class II shares had a total return of 7.7% during the period, the
result of an increase in NAV to $10.35 from $10.07 and the reinvestment of
$0.481 per share in tax-free dividend income.(2)
o Based on the Fund's most recent dividends and net asset values per share of
$10.35, the distribution rates were 3.77% and 4.47% for Class I and Class II
shares, respectively.(3) The SEC 30-day yields at March 31 were 3.06% and
3.79%, respectively.(4)
Management Update
- --------------------------------------------------------------------------------
o Portfolio activity was generally characterized by an emphasis on relative
value, efforts to build book yield through trading opportunities, and
continuing adjustments to improve the Portfolio's call protection.
o With quality spreads remaining historically narrow, the continuing care and
nursing home sectors again afforded the Portfolio opportunities to find
attractive higher-yielding, non-rated issues.
o The Portfolio emphasized high quality institutions in the hospital sector,
which has become increasingly competitive in recent years. We limited our
exposure to the solid waste sector, the subject of recent adverse court
decisions.
Your Investment at Work
- --------------------------------------------------------------------------------
New Jersey Economic
Development Authority [Graphic Omitted]
District Heating and Cooling
Trigen-Trenton Project
o Trigen Energy Corp. operates cogeneration and district heating and cooling
systems in New Jersey, New York, Oklahoma, Missouri, and Ontario, Canada.
o Proceeds from the bond issue financed the installation of a new chilled water
production unit and pipe extensions for the hot and chilled water distribution
systems.
o The bonds have a 6.1% coupon and are representative of the Portfolio's efforts
to find value in non-rated and lower-rated investment-grade bonds.
- --------------------------------------------------------------------------------
(1) This return does not include the Fund's Class I applicable contingent
deferred sales charge (CDSC).(2) A portion of the Fund's income could be
subject to federal and state income tax and/or alternative minimum tax.(3)
The Fund's distribution rate represents actual distributions paid to
shareholders and is calculated daily by dividing the last distribution per
share (annualized) by the net asset value.(4) The Fund's SEC yields are
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 (NAV) with all distributions reinvested. SEC returns for
Class I reflect applicable CDSC based on the following schedule: 3%-1st
year; 2.5%-2nd year; 2%-3rd year; 1%-4th year.
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 March 31, 1998
Performance5
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
Class I Class II
------- --------
One Year 6.7% 7.7%
Five Years 4.2 4.5
Life of Fund (6/1/92) 4.9 5.2
SEC Average Annual Total Returns (including applicable CDSC)
- --------------------------------------------------------------------------------
Class I Class II
------- --------
One Year 3.7% 7.7%
Five Years 4.2 4.5
Life of Fund (6/1/92) 4.9 5.2
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EV MARATHON
NEW JERSEY LIMITED MATURITY MUNICIPALS FUND VS. THE LEHMAN BROTHERS 7-YEAR
MUNICIPAL BOND INDEX* June 30, 1992 - March 31, 1998
ELNJX EXNJX
Fund - Fund -
DATE Class I Class II LBMBI
- ----------------------------------------------------
6/30/92 $10,000 $10,000 $10,000
7/31/92 10,358 10,358 10,298
8/31/92 10,215 10,215 10,192
9/30/92 10,257 10,257 10,275
10/31/92 10,118 10,118 10,205
11/30/92 10,328 10,328 10,358
12/31/92 10,422 10,422 10,442
1/31/93 10,540 10,540 10,595
2/28/93 10,896 10,896 10,919
3/31/93 10,739 10,739 10,776
4/30/93 10,825 10,825 10,843
5/31/93 10,871 10,871 10,875
6/30/93 11,006 11,006 11,074
7/31/93 11,016 11,016 11,076
8/31/93 11,167 11,167 11,272
9/30/93 11,250 11,250 11,396
10/31/93 11,249 11,249 11,425
11/30/93 11,174 11,174 11,325
12/31/93 11,345 11,345 11,533
1/31/94 11,455 11,455 11,655
2/28/94 11,225 11,225 11,402
3/31/94 10,894 10,894 11,098
4/30/94 10,971 10,971 11,179
5/31/94 11,033 11,033 11,234
6/30/94 10,985 10,985 11,214
7/31/94 11,115 11,115 11,372
8/31/94 11,136 11,136 11,432
9/30/94 11,045 11,045 11,322
10/31/94 10,922 10,922 11,209
11/30/94 10,773 10,773 11,045
12/31/94 10,941 10,941 11,213
1/31/95 11,125 11,125 11,423
2/28/95 11,308 11,308 11,680
3/31/95 11,387 11,387 11,802
4/30/95 11,381 11,381 11,833
5/31/95 11,597 11,597 12,148
6/30/95 11,531 11,531 12,137
7/31/95 11,639 11,639 12,292
8/31/95 11,720 11,720 12,437
9/30/95 11,781 11,781 12,484
10/31/95 11,888 11,888 12,593
11/30/95 12,030 12,030 12,732
12/31/95 12,079 12,079 12,799
1/31/96 12,152 12,152 12,923
2/28/96 12,073 12,073 12,879
3/31/96 11,932 11,932 12,753
4/30/96 11,865 11,865 12,730
5/31/96 11,831 11,831 12,711
6/30/96 11,920 11,920 12,809
7/31/96 12,051 12,044 12,915
8/31/96 12,019 12,019 12,922
9/30/96 12,143 12,151 13,039
10/31/96 12,205 12,220 13,179
11/30/96 12,390 12,425 13,399
12/31/96 12,357 12,388 13,358
1/31/97 12,409 12,446 13,406
2/28/97 12,501 12,548 13,517
3/31/97 12,353 12,405 13,342
4/30/97 12,391 12,451 13,411
5/31/97 12,541 12,609 13,579
6/30/97 12,645 12,721 13,709
7/31/97 12,894 12,979 14,027
8/31/97 12,749 12,841 13,927
9/30/97 12,865 12,965 14,075
10/31/97 12,893 13,001 14,158
11/30/97 12,937 13,054 14,208
12/31/97 13,088 13,213 14,382
1/31/98 13,205 13,340 14,533
2/28/98 13,199 13,342 14,546
3/31/98 13,185 13,359 14,546
*Source: Tower Data Systems, Bethesda, MD. The chart compares the Fund's total
return with that of the Lehman Brothers Municipal Bond Index, a broad-based,
unmanaged market index. Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. The lines on
the chart represent total returns of $10,000 hypothetical investments in the
Fund and the Lehman Brothers Municipal Bond Index. The Index's total return does
not reflect commissions or expenses that would have been incurred if an investor
individually purchased or sold the securities represented in the Index. It is
not possible to invest in an Index.
- --------------------------------------------------------------------------------
Federal income tax information on distributions. For Federal income tax
purposes, 97.44% of the total dividends paid by the Fund from net investment
income during the year ended March 31, 1998 is designated as an exempt-interest
dividend.
- --------------------------------------------------------------------------------
<PAGE>
EV Marathon New York Limited Maturity Municipals Fund as of March 31, 1998
INVESTMENT UPDATE
[Photo of William H. Ahern]
William H. Ahern,
Portfolio Manager
The Economy
- --------------------------------------------------------------------------------
o The strength of the national expansion is finally starting to have an impact
on the New York State economy. The state added 96,000 jobs in 1997, an
increase of 1.2%. However, the state continued to lag national trends, where
employment rose 2.3%. The gap is expected to narrow slightly in 1998, led by
strength in the service and finance sectors.
o Wall Street activity was again a major boost to New York's economy, as the
sharp rise in corporate underwriting and merger-and-acquisition activity
contributed to robust profit growth. Bonuses earned in the state's financial
sectors added $4.2 billion to state personal income growth in 1997.
o With downsizing among large New York companies exacting a heavy toll, small
business growth has become central to the state's job creation. It's estimated
that small business has added more than 500,000 jobs since 1992, while large
companies have reduced their workforce by nearly 250,000.
The Fund
- --------------------------------------------------------------------------------
o During the year ended March 31, 1998, the Fund's Class I shares had a total
return of 8.7%.(1) This return resulted from an increase in net asset value
(NAV) per share to $10.51 on March 31, 1998 from $10.04 on March 31, 1997 and
the reinvestment of $0.387 per share in tax-free dividend income.(2)
o The Fund's Class II shares had a total return of 9.6% during the period, the
result of an increase in NAV to $10.51 from $10.04 and the reinvestment of
$0.479 per share in tax-free dividend income.(2)
o Based on the Fund's most recent dividends and net asset values per share of
$10.51, the distribution rates were 3.69% and 4.39% for Class I and Class II
shares, respectively.(3) The SEC 30-day yields at March 31 were 3.37% and
4.14%, respectively.(4)
Management Update
- --------------------------------------------------------------------------------
o With New York enjoying a strong economic uptrend, the Portfolio has maintained
a large exposure to state appropriated debt, which was upgraded during the
period by Standard & Poor's rating agency.
o We maintained a lower exposure to insured bonds than in past cycles. With
insured bonds plentiful in the New York market, we searched for value in other
areas, including hospitals and New York City housing bonds.
o Escrowed bonds remained among the Portfolio's largest sector weightings.
Because they are backed by Treasury bonds, escrowed bonds are viewed as the
highest quality and tend to perform well in a constructive market environment.
Your Investment at Work
- --------------------------------------------------------------------------------
Dormitory Authority
State of New York [Graphic Omitted]
Nyack Hospital
o Nyack Hospital is a private, non-profit institution that operates a 402-bed
acute care facility located in Rockland County, 20 miles north of New York
City.
o The bonds were issued to advance-refund earlier bonds that had financed the
construction of medical facilities at Nyack Hospital.
o The bonds have a 6.00% coupon and are not subject to redemption prior to their
July 2006 maturity date, further improving the Fund's call protection.
- --------------------------------------------------------------------------------
(1) This return does not include the Fund's Class I applicable contingent
deferred sales charge (CDSC).(2) A portion of the Fund's income could be
subject to federal and state income tax and/or alternative minimum tax.(3)
The Fund's distribution rate represents actual distributions paid to
shareholders and is calculated daily by dividing the last distribution per
share (annualized) by the net asset value.(4) The Fund's SEC yields are
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 (NAV) with all distributions reinvested. SEC returns for
Class I reflect applicable CDSC based on the following schedule: 3%-1st
year; 2.5%-2nd year; 2%-3rd year; 1%-4th year.
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 March 31, 1998
Performance(5)
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
Class I Class II
------- --------
One Year 8.7% 9.6%
Five Years 4.5 4.7
Life of Fund (5/29/92) 5.2 5.4
SEC Average Annual Total Returns (including applicable CDSC)
- --------------------------------------------------------------------------------
Class I Class II
------- --------
One Year 5.7% 9.6%
ive Years 4.5 4.7
Life of Fund (5/29/92) 5.2 5.4
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EV MARATHON
NEW YORK LIMITED MATURITY MUNICIPALS FUND VS. THE LEHMAN BROTHERS 7-YEAR
MUNICIPAL BOND INDEX* May 31, 1992 - March 31, 1998
ELNYX EXNYX
Fund - Fund -
DATE Class I Class II LBMBI
- ----------------------------------------------------
5/31/92 $10,000 $10,000 $10,000
6/30/92 10,010 10,010 10,159
7/31/92 10,312 10,312 10,462
8/31/92 10,220 10,220 10,354
9/30/92 10,274 10,274 10,438
10/31/92 10,135 10,135 10,368
11/30/92 10,368 10,368 10,522
12/31/92 10,464 10,464 10,608
1/31/93 10,603 10,603 10,763
2/28/93 10,962 10,962 11,093
3/31/93 10,795 10,795 10,947
4/30/93 10,871 10,871 11,015
5/31/93 10,908 10,908 11,048
6/30/93 11,055 11,055 11,250
7/31/93 11,076 11,076 11,252
8/31/93 11,258 11,258 11,451
9/30/93 11,342 11,342 11,577
10/31/93 11,351 11,351 11,607
11/30/93 11,265 11,265 11,505
12/31/93 11,437 11,437 11,716
1/31/94 11,548 11,548 11,840
2/28/94 11,305 11,305 11,583
3/31/94 10,952 10,952 11,274
4/30/94 11,030 11,030 11,356
5/31/94 11,103 11,103 11,413
6/30/94 11,078 11,078 11,392
7/31/94 11,208 11,208 11,553
8/31/94 11,218 11,218 11,613
9/30/94 11,106 11,106 11,502
10/31/94 10,983 10,983 11,387
11/30/94 10,788 10,788 11,221
12/31/94 10,952 10,952 11,391
1/31/95 11,149 11,149 11,604
2/28/95 11,366 11,366 11,866
3/31/95 11,434 11,434 11,989
4/30/95 11,440 11,440 11,021
5/31/95 11,657 11,657 12,341
6/30/95 11,626 11,626 12,330
7/31/95 11,734 11,734 12,487
8/31/95 11,839 11,839 12,634
9/30/95 11,866 11,866 12,683
10/31/95 11,974 11,974 12,793
11/30/95 12,093 12,093 12,934
12/31/95 12,154 12,154 13,003
1/31/96 12,228 12,228 13,129
2/28/96 12,148 12,148 13,084
3/31/96 12,019 12,019 12,956
4/30/96 11,975 11,975 12,932
5/31/96 11,942 11,942 12,913
6/30/96 12,020 12,020 13,012
7/31/96 12,091 12,084 13,120
8/31/96 12,070 12,071 13,127
9/30/96 12,195 12,203 13,246
10/31/96 12,281 12,296 13,388
11/30/96 12,478 12,501 13,612
12/31/96 12,409 12,439 13,570
1/31/97 12,387 12,425 13,619
2/28/97 12,480 12,526 13,732
3/31/97 12,355 12,408 13,554
4/30/97 12,443 12,503 13,624
5/31/97 12,606 12,674 13,795
6/30/97 12,722 12,798 13,927
7/31/97 13,034 13,120 14,249
8/31/97 12,925 13,018 14,149
9/30/97 13,042 13,143 14,298
10/31/97 13,069 13,179 14,383
11/30/97 13,126 13,244 14,434
12/31/97 13,315 13,442 14,610
1/31/98 13,407 13,543 14,763
2/28/98 13,426 13,571 14,777
3/31/98 13,424 13,600 14,777
*Source: Tower Data Systems, Bethesda, MD. The chart compares the Fund's total
return with that of the Lehman Brothers Municipal Bond Index, a broad-based,
unmanaged market index. Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. The lines on
the chart represent total returns of $10,000 hypothetical investments in the
Fund and the Lehman Brothers Municipal Bond Index. The Index's total return does
not reflect commissions or expenses that would have been incurred if an investor
individually purchased or sold the securities represented in the Index. It is
not possible to invest in an Index.
- --------------------------------------------------------------------------------
Federal income tax information on distributions. For Federal income tax
purposes, 99.88% of the total dividends paid by the Fund from net investment
income during the year ended March 31, 1998 is designated as an exempt-interest
dividend.
- --------------------------------------------------------------------------------
<PAGE>
EV Marathon Ohio Limited Maturity Municipals Fund as of March 31, 1998
INVESTMENT UPDATE
[Photo of William H. Ahern]
William H. Ahern,
Portfolio Manager
The Economy
- --------------------------------------------------------------------------------
o Ohio's labor market has remained strong in recent months. According to the
Ohio Bureau of Employment Services, the state enjoyed especially strong job
creation within the business and health services areas. Over the one-year
period, the number of employed Ohioans has increased by 156,000.
o The Asian crisis, which rocked the financial markets in late 1997, has
moderated somewhat in recent months. Nonetheless, weakness in the Asian
economies is likely to persist through 1998 and into 1999, and could modestly
dampen export demand for Ohio's manufactured goods.
o Ohio tax revenues have exceeded estimates by 2.1% in the current fiscal year.
Continued low employment and strong consumer buying power have resulted in
strong year-to-date income and sales tax receipts.
The Fund
- --------------------------------------------------------------------------------
o During the year ended March 31, 1998, the Fund's Class I shares had a total
return of 7.4%.(1) This return resulted from an increase in net asset value
(NAV) per share to $10.14 on March 31, 1998 from $9.82 on March 31, 1997 and
the reinvestment of $0.399 per share in tax-free dividend income.(2)
o The Fund's Class II shares had a total return of 8.4% during the period, the
result of an increase in NAV to $10.14 from $9.82 and the reinvestment of
$0.49 per share in tax-free dividend income.(2)
o Based on the Fund's most recent dividends and net asset values per share of
$10.14, the distribution rates were 3.94% and 4.65% for Class I and Class II
shares, respectively.(3) The SEC 30-day yields at March 31 were 3.16% and
3.92%, respectively.(4)
Management Update
- --------------------------------------------------------------------------------
o General obligations and insured general obligations were the Portfolio's
largest concentrations, providing good quality and liquidity.(5) Zero-coupon
GOs provided performance in a declining rate environment.
o Investments in non-rated bonds allowed us to add incrementally to the Fund's
yield. The Portfolio found attractive non-rated situations in the industrial
development, housing, and continuing care sectors.
o We remained very selective with respect to hospital bonds. We focused on the
more competitive institutions that have favorable cost structures and have
forged alliances through mergers or alliances with other hospitals.
Your Investment at Work
- --------------------------------------------------------------------------------
Certificates of Participation
City of Cleveland {Graphic Omitted]
Cleveland Stadium Project
o Following the relocation of the Browns to Baltimore, the National Football
League formally awarded the city a new franchise in April 1998. The Cleveland
Browns will commence league play in the 1999 season.
o The certificates represent a participation in the rents to be paid by the City
of Cleveland and were used to assist in financing the construction of the new
open-air, 70,000-seat Cleveland Stadium.
o The certificates have a 5.25% coupon and are rated Aaa/AAA by Moody's and
Standard & Poor's.
- --------------------------------------------------------------------------------
(1) This return does not include the Fund's Class I applicable contingent
deferred sales charge (CDSC).(2) A portion of the Fund's income could be
subject to federal and state income tax and/or alternative minimum tax.(3)
The Fund's distribution rate represents actual distributions paid to
shareholders and is calculated daily by dividing the last distribution per
share (annualized) by the net asset value.(4) The Fund's SEC yields are
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) Private insurance does not remove the interest rate risks that
are associated with these investments. (6) Returns are calculated by
determining the percentage change in net asset value (NAV) with all
distributions reinvested. SEC returns for Class I reflect applicable CDSC
based on the following schedule: 3%-1st year; 2.5%-2nd year; 2%-3rd year;
1%-4th year.
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 March 31, 1998
Performance(6)
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
Class I Class II
------- --------
One Year 7.4% 8.4%
Life of Fund (4/16/93) 4.4 4.7
SEC Average Annual Total Returns (including applicable CDSC)
- --------------------------------------------------------------------------------
Class I Class II
------- --------
One Year 4.4% 8.4%
Life of Fund (4/16/93) 4.4 4.7
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EV MARATHON
OHIO LIMITED MATURITY MUNICIPALS FUND VS. THE LEHMAN BROTHERS 7-YEAR
MUNICIPAL BOND INDEX* April 30, 1993 - March 31, 1998
ELOHX EXOHX
Fund - Fund -
DATE Class I Class II LBMBI
- ----------------------------------------------------
4/30/93 $10,000 $10,000 $10,000
5/31/93 9,990 9,990 10,030
6/30/93 10,149 10,149 10,213
7/31/93 10,176 10,176 10,215
8/31/93 10,348 10,348 10,396
9/30/93 10,446 10,446 10,510
10/31/93 10,452 10,452 10,537
11/30/93 10,389 10,389 10,444
12/31/93 10,561 10,561 10,636
1/31/94 10,674 10,674 10,749
2/28/94 10,430 10,430 10,516
3/31/94 10,113 10,113 10,235
4/30/94 10,206 10,206 10,310
5/31/94 10,253 10,253 10,361
6/30/94 10,217 10,217 10,343
7/31/94 10,350 10,350 10,488
8/31/94 10,369 10,369 10,543
9/30/94 10,260 10,260 10,442
10/31/94 10,140 10,140 10,337
11/30/94 9,996 9,996 10,187
12/31/94 10,136 10,136 10,341
1/31/95 10,322 10,322 10,535
2/28/95 10,484 10,484 10,772
3/31/95 10,558 10,558 10,884
4/30/95 10,551 10,551 10,913
5/31/95 10,767 10,767 11,204
6/30/95 10,715 10,715 11,194
7/31/95 10,784 10,784 11,336
8/31/95 10,894 10,894 11,470
9/30/95 10,952 10,952 11,514
10/31/95 11,065 11,065 11,614
11/30/95 11,166 11,166 11,742
12/31/95 11,224 11,224 11,804
1/31/96 11,271 11,271 11,919
2/28/96 11,217 11,217 11,878
3/31/96 11,094 11,094 11,762
4/30/96 11,062 11,062 11,740
5/31/96 11,041 11,041 11,723
6/30/96 11,161 11,161 11,813
7/31/96 11,218 11,218 11,911
8/31/96 11,211 11,211 11,917
9/30/96 11,343 11,343 12,025
10/31/96 11,414 11,414 12,154
11/30/96 11,603 11,601 12,357
12/31/96 11,562 11,555 12,319
1/31/97 11,542 11,554 12,364
2/28/97 11,666 11,687 12,467
3/31/97 11,525 11,551 12,305
4/30/97 11,598 11,631 12,368
5/31/97 11,743 11,783 12,524
6/30/97 11,831 11,879 12,643
7/31/97 12,083 12,139 12,936
8/31/97 11,992 11,055 12,845
9/30/97 12,068 12,139 12,981
10/31/97 12,096 12,174 13,057
11/30/97 12,140 12,226 13,103
12/31/97 12,273 12,367 13,264
1/31/98 12,386 12,488 13,403
2/28/98 12,394 12,504 13,415
3/31/98 12,381 12,521 13,416
*Source: Tower Data Systems, Bethesda, MD. The chart compares the Fund's total
return with that of the Lehman Brothers Municipal Bond Index, a broad-based,
unmanaged market index. Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. The lines on
the chart represent total returns of $10,000 hypothetical investments in the
Fund and the Lehman Brothers Municipal Bond Index. The Index's total return does
not reflect commissions or expenses that would have been incurred if an investor
individually purchased or sold the securities represented in the Index. It is
not possible to invest in an Index.
- --------------------------------------------------------------------------------
Federal income tax information on distributions. For Federal income tax
purposes, 99.74% of the total dividends paid by the Fund from net investment
income during the year ended March 31, 1998 is designated as an exempt-interest
dividend.
- --------------------------------------------------------------------------------
<PAGE>
EV Marathon Pennsylvania Limited Maturity Municipals Fund as of March 31, 1998
INVESTMENT UPDATE
[Photo of Timothy T. Browse]
Timothy T. Browse,
Portfolio Manager
The Economy
- --------------------------------------------------------------------------------
o Manufacturing, which has long been a sore spot for the Pennsylvania economy,
showed signs of a comeback in 1997 and early 1998, adding more than 4,000
jobs. Producers of both durable and non-durable goods participated in the
revival. Industrial machinery and chemicals were two areas that were
especially strong.
o The Commonwealth's jobless rate - at 4.8% in March - showed steady improvement
from the 5.3% rate of a year ago. Construction employment increased sharply in
1997, rising by more than 15,000 jobs, a 7% increase over 1996.
o Pennsylvania continues to diversify beyond its traditional industrial economic
base. In 1997, the Commonwealth spent more than $100 million on advanced
manufacturing research (AMR), which uses state-of-the-art technologies to
produce high value-added products. Pennsylvania universities awarded more than
1,100 AMR-related degrees.
The Fund
- --------------------------------------------------------------------------------
o During the year ended March 31, 1998, the Fund's Class I shares had a total
return of 8.6%.(1) This return resulted from an increase in net asset value
(NAV) per share to $10.55 on March 31, 1998 from $10.10 on March 31, 1997 and
the reinvestment of $0.401 per share in tax-free dividend income.(2)
o The Fund's Class II shares had a total return of 9.5% during the period, the
result of an increase in NAV to $10.55 from $10.10 and the reinvestment of
$0.494 per share in tax-free dividend income.(2)
o Based on the Fund's most recent dividends and net asset values per share of
$10.55, the distribution rates were 3.81% and 4.51% for Class I and Class II
shares, respectively.(3) The SEC 30-day yields at March 31 were 3.03% and
3.85%, respectively.(4)
Management Update
- --------------------------------------------------------------------------------
o In a constructive market environment, the Portfolio reduced its exposure to
par bonds while selectively adding discount bonds and zero coupons. These
issues are typically more sensitive to changes in interest rates.
o The Portfolio remained extremely selective in the Pennsylvania hospital
sector, especially in the overbedded Philadelphia market. We found good value
in stand-alone, BBB rated institutions located in rural locations.
o In an increasingly generic market, we sought opportunities among non-rated and
lower-rated bonds. Lower-rated solid waste and cogeneration issues provided
some attractive situations.
Your Investment at Work
- --------------------------------------------------------------------------------
Monroeville Hospital Authority
Hospital Revenue Refunding Bonds [Graphic Omitted]
Forbes Health System
o Forbes Health System is a healthcare corporation providing comprehensive
health care services in southwestern Pennsylvania, including Forbes Regional
Hospital, a 350-bed acute care facility in Monroeville.
o The proceeds of the bonds were used to advance-refund an outstanding issue
that financed construction and equipment installation at the Monroeville
facility.
o The bonds have a 5.75% coupon and are rated A3 by Moody's and BBB+ by Standard
& Poor's. They are an example of the Portfolio's efforts to add value through
lower-rated, investment-grade bonds that may have further upgrade potential.
- --------------------------------------------------------------------------------
(1) This return does not include the Fund's Class I applicable contingent
deferred sales charge (CDSC).(2) A portion of the Fund's income could be
subject to federal and state income tax and/or alternative minimum tax.(3)
The Fund's distribution rate represents actual distributions paid to
shareholders and is calculated daily by dividing the last distribution per
share (annualized) by the net asset value.(4) The Fund's SEC yields are
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 (NAV) with all distributions reinvested. SEC returns for
Class I reflect applicable CDSC based on the following schedule: 3%-1st
year; 2.5%-2nd year; 2%-3rd year; 1%-4th year.
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 March 31, 1998
Performance(5)
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
Class I Class II
------- --------
One Year 8.6% 9.5%
Five Years 4.6 4.9
Life of Fund (6/1/92) 5.3 5.6
SEC Average Annual Total Returns (including applicable CDSC)
- --------------------------------------------------------------------------------
Class I Class II
------- --------
One Year 5.6% 9.5%
Five Years 4.6 4.9
Life of Fund (6/1/92) 5.3 5.6
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EV MARATHON
PENNSYLVANIA LIMITED MATURITY MUNICIPALS FUND VS. THE LEHMAN BROTHERS 7-YEAR
MUNICIPAL BOND INDEX* June 30, 1992 - March 31, 1998
ELPNX EXPNX
Fund - Fund -
DATE Class I Class II LBMBI
- ----------------------------------------------------
6/30/92 $10,000 $10,000 $10,000
7/31/92 10,357 10,357 10,298
8/31/92 10,206 10,206 10,192
9/30/92 10,268 10,268 10,275
10/31/92 10,121 10,121 10,205
11/30/92 10,351 10,351 10,358
12/31/92 10,435 10,435 10,442
1/31/93 10,563 10,563 10,595
2/28/93 10,898 10,898 10,919
3/31/93 10,722 10,722 10,776
4/30/93 10,819 10,819 10,843
5/31/93 10,866 10,866 10,875
6/30/93 10,991 10,991 11,074
7/31/93 11,003 11,003 11,076
8/31/93 11,186 11,186 11,272
9/30/93 11,271 11,271 11,396
10/31/93 11,282 11,282 11,425
11/30/93 11,198 11,198 11,325
12/31/93 11,403 11,403 11,533
1/31/94 11,502 11,502 11,655
2/28/94 11,274 11,274 11,402
3/31/94 10,924 10,924 11,098
4/30/94 11,013 11,013 11,179
5/31/94 11,065 11,065 11,234
6/30/94 11,030 11,030 11,214
7/31/94 11,182 11,182 11,372
8/31/94 11,193 11,193 11,432
9/30/94 11,082 11,082 11,322
10/31/94 10,961 10,961 11,209
11/30/94 10,803 10,803 11,045
12/31/94 10,969 10,969 11,213
1/31/95 11,142 11,142 11,423
2/28/95 11,359 11,359 11,680
3/31/95 11,416 11,416 11,802
4/30/95 11,434 11,434 11,833
5/31/95 11,650 11,650 12,148
6/30/95 11,609 11,609 12,137
7/31/95 11,705 11,705 12,292
8/31/95 11,799 11,799 12,437
9/30/95 11,838 11,838 12,484
10/31/95 11,934 11,934 12,593
11/30/95 12,053 12,053 12,732
12/31/95 12,103 12,103 12,799
1/31/96 12,166 12,166 12,923
2/28/96 12,100 12,100 12,879
3/31/96 11,984 11,984 12,753
4/30/96 11,918 11,918 12,730
5/31/96 11,897 11,897 12,711
6/30/96 11,964 11,964 12,809
7/31/96 12,036 12,029 12,915
8/31/96 12,053 12,053 12,922
9/30/96 12,167 12,174 13,039
10/31/96 12,241 12,256 13,179
11/30/96 12,427 12,449 13,399
12/31/96 12,383 12,414 13,358
1/31/97 12,399 12,437 13,406
2/28/97 12,493 12,539 13,517
3/31/97 12,358 12,411 13,342
4/30/97 12,422 12,482 13,411
5/31/97 12,573 12,641 13,579
6/30/97 12,690 12,767 13,709
7/31/97 13,002 13,088 14,027
8/31/97 12,883 12,976 13,927
9/30/97 13,000 13,102 14,075
10/31/97 13,029 13,139 14,158
11/30/97 13,087 13,206 14,208
12/31/97 13,264 13,392 14,382
1/31/98 13,395 13,532 14,533
2/28/98 13,390 13,536 14,546
3/31/98 13,415 13,593 14,546
*Source: Tower Data Systems, Bethesda, MD. The chart compares the Fund's total
return with that of the Lehman Brothers Municipal Bond Index, a broad-based,
unmanaged market index. Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. The lines on
the chart represent total returns of $10,000 hypothetical investments in the
Fund and the Lehman Brothers Municipal Bond Index. The Index's total return does
not reflect commissions or expenses that would have been incurred if an investor
individually purchased or sold the securities represented in the Index. It is
not possible to invest in an Index.
- --------------------------------------------------------------------------------
Federal income tax information on distributions. For Federal income tax
purposes, 99.72% of the total dividends paid by the Fund from net investment
income during the year ended March 31, 1998 is designated as an exempt-interest
dividend.
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
EV Marathon Limited Maturity Municipals Funds as of March 31, 1998
- ---------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- ---------------------------------------------------------------------------------------------------------------------
Statements of Assets and Liabilities
As of March 31, 1998
<CAPTION>
Marathon Marathon Marathon Marathon Marathon
California Connecticut Florida Massachusetts Michigan
Limited Fund Limited Fund Limited Fund Limited Fund Limited Fund
- ---------------------------------------------------------------------------------------------------------------------
Assets
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investments in Limited Maturity Municipals Portfolio --
Identified cost $29,568,837 $ 8,220,626 $57,951,577 $49,448,642 $10,249,259
Unrealized appreciation 1,606,827 429,749 3,189,611 2,684,405 837,062
- ---------------------------------------------------------------------------------------------------------------------
Investment in Portfolio, at value (Note 1A) $31,175,664 $ 8,650,375 $61,141,188 $52,133,047 $11,086,321
- ---------------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold -- $ 575 $ 7,600 -- --
Deferred organization expenses (Note 1D) -- 269 -- -- 1,262
- ---------------------------------------------------------------------------------------------------------------------
Total assets $31,175,664 $ 8,651,219 $61,148,788 $52,133,047 $11,087,583
- ---------------------------------------------------------------------------------------------------------------------
Liabilities
- ---------------------------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed $ 10,147 $ 61,544 $ 300,233 $ 17,033 $ 42,636
Dividends payable 37,398 9,637 67,717 42,159 11,043
Payable to affiliate for Trustees' fees (Note 4) 100 100 950 473 100
Accrued expenses 31,702 15,033 51,967 46,953 17,356
- ---------------------------------------------------------------------------------------------------------------------
Total liabilities $ 79,347 $ 86,314 $ 420,867 $ 106,618 $ 71,135
- ---------------------------------------------------------------------------------------------------------------------
Net Assets $31,096,317 $ 8,564,905 $60,727,921 $52,026,429 $11,016,448
- ---------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- ---------------------------------------------------------------------------------------------------------------------
Paid-in capital $31,483,791 $ 8,522,167 $60,648,453 $51,411,734 $11,295,757
Accumulated net realized loss on investments
from Portfolio (computed on the basis of
identified cost) (1,955,902) (446,746) (3,034,832) (2,054,710) (1,107,521)
Accumulated undistributed (distributions in
excess of) net investment income (38,399) 59,735 (75,311) (15,000) (8,850)
Net unrealized appreciation of investments
from Portfolio (computed on the basis of
identified cost) 1,606,827 429,749 3,189,611 2,684,405 837,062
- ---------------------------------------------------------------------------------------------------------------------
Total $31,096,317 $ 8,564,905 $60,727,921 $52,026,429 $11,016,448
- ---------------------------------------------------------------------------------------------------------------------
Class I Shares
- ---------------------------------------------------------------------------------------------------------------------
Net Assets $ 5,316,199 $ 2,531,129 $10,612,015 $ 8,450,957 $ 1,839,298
Shares Outstanding 514,863 250,320 1,031,030 818,491 183,112
Net Asset Value, Offering Price and Redemption
Price Per Share (Note 6) $ 10.33 $ 10.11 $ 10.29 $ 10.33 $ 10.04
(Net assets / shares of beneficial
interest outstanding)
- ---------------------------------------------------------------------------------------------------------------------
Class II Shares
- ---------------------------------------------------------------------------------------------------------------------
Net Assets $25,780,118 $ 6,033,776 $50,115,906 $43,575,472 $ 9,177,150
Shares Outstanding 2,494,774 597,059 4,869,097 4,220,277 913,749
Net Asset Value and Redemption Price Per Share $ 10.33 $ 10.11 $ 10.29 $ 10.33 $ 10.04
(Net assets / shares of beneficial
interest outstanding)
- ---------------------------------------------------------------------------------------------------------------------
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
EV Marathon Limited Maturity Municipals Funds as of March 31, 1998
- -------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- -------------------------------------------------------------------------------------------------------
Statements of Assets and Liabilities
As of March 31, 1998
<CAPTION>
Marathon Marathon Marathon Marathon
New Jersey New York Ohio Pennsylvania
Limited Fund Limited Fund Limited Fund Limited Fund
- -------------------------------------------------------------------------------------------------------
Assets
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investments in Limited Maturity Municipals Portfolio --
Identified cost $41,986,361 $68,566,471 $21,380,776 $ 9,658,706
Unrealized appreciation 2,729,443 3,326,299 1,034,168 2,769,418
- -------------------------------------------------------------------------------------------------------
Total investment in Portfolio, at value
(Note 1A) $44,715,804 $ 71,892,77 $22,414,944 $52,428,124
- -------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold -- $ 2,000 -- --
- -------------------------------------------------------------------------------------------------------
Total assets $44,715,804 $71,894,770 $22,414,944 $52,428,124
- -------------------------------------------------------------------------------------------------------
Liabilities
- -------------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed $ 132,939 $ 115,037 $ 5,070 $ 79,886
Dividends payable 39,801 62,972 21,642 57,439
Payable to affiliate for Trustees' fees
(Note 4) 46 473 47 473
Accrued expenses 43,574 53,793 25,435 53,058
- -------------------------------------------------------------------------------------------------------
Total liabilities $ 216,360 $ 232,275 $ 52,194 $ 190,856
- -------------------------------------------------------------------------------------------------------
Net Assets $44,499,444 $71,662,495 $22,362,750 $52,237,268
- -------------------------------------------------------------------------------------------------------
Sources of Net Assets
- -------------------------------------------------------------------------------------------------------
Paid-in capital $44,156,611 $70,078,540 $22,335,830 $50,594,816
Accumulated net realized loss on investments
from Portfolio (computed on the basis of
identified cost) (2,345,334) (1,670,654) (1,117,048) (1,099,753)
Accumulated undistributed (distributions in
excess of) net investment income (41,276) (71,690) 109,800 (27,213)
Net unrealized appreciation of investments
from Portfolio (computed on the basis of
identified cost) 2,729,443 3,326,299 1,034,168 2,769,418
- -------------------------------------------------------------------------------------------------------
Total $44,499,444 $71,662,495 $22,362,750 $52,237,268
- -------------------------------------------------------------------------------------------------------
Class I Shares
- -------------------------------------------------------------------------------------------------------
Net Assets $ 8,620,135 $12,220,271 $ 4,248,915 $ 8,276,696
Shares Outstanding 833,259 1,163,281 418,823 784,854
Net Asset Value, Offering Price and Redemption
Price Per Share (Note 6) $ 10.35 $ 10.51 $ 10.14 $ 10.55
(Net assets / shares of beneficial
interest outstanding)
- -------------------------------------------------------------------------------------------------------
Class II Shares
- -------------------------------------------------------------------------------------------------------
Net Assets $35,879,309 $59,442,224 $18,113,835 $43,960,572
Shares Outstanding 3,465,227 5,656,615 1,785,931 4,168,037
Net Asset Value and Redemption Price Per Share $ 10.35 $ 10.51 $ 10.14 $ 10.55
(Net assets / shares of beneficial
interest outstanding)
- -------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
EV Marathon Limited Maturity Municipals Funds as of March 31, 1998
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- --------------------------------------------------------------------------------
Statements of Operations
For the Year Ended March 31, 1998
<CAPTION>
Marathon Marathon Marathon Marathon Marathon
California Connecticut Florida Massachusetts Michigan
Limited Fund Limited Fund Limited Fund Limited Fund Limited Fund
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment Income (Note 1B)
- ---------------------------------------------------------------------------------------------------------------------
Interest income allocated from Portfolio $ 1,954,836 $ 525,248 $ 3,941,642 $ 3,182,576 $ 688,741
Expenses allocated from Portfolio (210,303) (49,846) (401,090) (327,322) (81,127)
- ---------------------------------------------------------------------------------------------------------------------
Net investment income from Portfolio $ 1,744,533 $ 475,402 $ 3,540,552 $ 2,855,254 $ 607,614
- ---------------------------------------------------------------------------------------------------------------------
Expenses
- ---------------------------------------------------------------------------------------------------------------------
Compensation of Trustees not members of the
Administrator's organization (Note 4) $ 227 $ 235 $ 2,148 $ 1,746 $ 235
Distribution and service fees (Note 5)
Class I 141,937 57,688 253,073 206,435 62,384
Class II 27,766 5,060 62,008 52,756 8,044
Transfer and dividend disbursing agent fees 29,087 11,162 62,398 49,578 14,206
Legal and accounting services 25,702 17,985 12,694 23,557 17,835
Printing and postage 12,088 5,519 21,631 23,782 7,522
Custodian fee 4,783 3,268 8,334 5,728 3,041
Registration fees 990 580 6,826 4,845 5,110
Amortization of organization expenses
(Note 1D) 971 4,066 1,205 1,175 4,030
Miscellaneous 3,697 1,763 12,114 8,842 2,089
- ---------------------------------------------------------------------------------------------------------------------
Total expenses $ 247,248 $ 107,326 $ 442,431 $ 378,444 $ 124,496
- ---------------------------------------------------------------------------------------------------------------------
Net investment income $ 1,497,285 $ 368,076 $ 3,098,121 $ 2,476,810 $ 483,118
- ---------------------------------------------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) from Portfolio
- ---------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost
basis) $ 899,717 $ 116,060 $ 1,144,202 $ 947,726 $ 129,877
Financial futures contracts (466,350) (112,009) (1,238,862) (930,242) (254,422)
- ---------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investment
transactions $ 433,367 $ 4,051 $ (94,660) $ 17,484 $ (124,545)
- ---------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments $ 1,032,580 $ 331,133 $ 2,648,183 $ 2,112,087 $ 528,400
Financial futures contracts (90,967) (3,239) (197,116) (183,329) (2,251)
- ---------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) of investments $ 941,613 $ 327,894 $ 2,451,067 $ 1,928,758 $ 526,149
- ---------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on
investments $ 1,374,980 $ 331,945 $ 2,356,407 $ 1,946,242 $ 401,604
- ---------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 2,872,265 $ 700,021 $ 5,454,528 $ 4,423,052 $ 884,722
- --------------------------------------------------------------------------------------------------------------------
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
EV Marathon Limited Maturity Municipals Funds as of March 31, 1998
- -------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- -------------------------------------------------------------------------------------------------------
Statements of Operations
For the Year Ended March 31, 1998
<CAPTION>
Marathon Marathon Marathon Marathon
New Jersey New York Ohio Pennsylvania
Limited Fund Limited Fund Limited Fund Limited Fund
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income (Note 1B)
- -------------------------------------------------------------------------------------------------------
Interest income allocated from Portfolio $2,788,752 $4,524.738 $1,380,283 $3,164,658
Expenses allocated from Portfolio (305,999) (493,387) (154,790) (325,573)
- -------------------------------------------------------------------------------------------------------
Net investment income from Portfolio $2,482,753 $4,031,351 $1,225,493 $2,839,085
- -------------------------------------------------------------------------------------------------------
Expenses
- -------------------------------------------------------------------------------------------------------
Compensation of Trustees not members of the
Administrator's organization (Note 4) $ 949 $ 1,770 $ 174 $ 1,746
Distribution and service fees (Note 5)
Class I 184,179 315,577 126,403 182,210
Class II 44,405 74,003 15,087 54,232
Transfer and dividend disbursing agent fees 44,636 75,829 23,594 53,971
Legal and accounting services 23,585 24,255 20,337 23,422
Printing and postage 22,774 14,846 9,513 24,841
Custodian fee 6,762 10,097 4,224 7,897
Registration fees 1,021 1,846 4,595 52
Amortization of organization expenses (Note 1D) 1,111 1,193 3,940 1,174
Miscellaneous 7,182 9,142 3,710 6,873
- -------------------------------------------------------------------------------------------------------
Total expenses $ 336,604 $ 528,558 $ 211,577 $ 356,418
- -------------------------------------------------------------------------------------------------------
Net investment income $2,146,149 $3,502,793 $1,013,916 $2,482,667
- -------------------------------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) from Portfolio
- -------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions
(identified cost basis) $ 593,810 $1,446,186 $ 305,391 $ 933,888
Financial futures contracts (780,884) (357,939) (174,329) (527,662)
- -------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investment
transactions $ (187,074) $1,088,247 $ 131,062 $ 406,226
- -------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments $1,658,651 $3,221,920 $ 700,984 $2,056,409
Financial futures contracts (10,301) (377,780) (2,789) 3,055
- -------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) of investments $1,648,350 $2,844,140 $ 698,195 $2,059,464
- -------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $1,461,276 $3,932,387 $ 829,257 $2,465,690
Net increase in net assets from operations $3,607,425 $7,435,180 $1,843,173 $4,948,357
- -------------------------------------------------------------------------------------------------------
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
EV Marathon Limited Maturity Municipals Funds as of March 31, 1998
- ---------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- ---------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
For the Year Ended March 31, 1998
<CAPTION>
Marathon Marathon Marathon Marathon Marathon
California Connecticut Florida Massachusetts Michigan
Limited Fund Limited Fund Limited Fund Limited Fund Limited Fund
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
- ----------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 1,497,285 $ 368,076 $ 3,098,121 $ 2,476,810 $ 483,118
Net realized gain (loss) on investment
transactions 433,367 4,051 (94,660) 17,484 (124,545)
Net change in unrealized appreciation
(depreciation) of investments 941,613 327,894 2,451,067 1,928,758 526,149
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 2,872,265 $ 700,021 $ 5,454,528 $ 4,423,052 $ 884,722
- ----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders (Note 2) --
From net investment income
Class I $ (570,677) $ (229,255) $ (1,064,705) $ (860,024) $ (258,458)
Class II (936,871) (144,583) (2,004,916) (1,572,765) (232,658)
In excess of net investment income
Class I (23,588) -- -- -- --
Class II (12,257) (4,392) -- -- (15,799)
- ----------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders $ (1,543,393) $ (378,230) $ (3,069,621) $ (2,432,789) $ (506,915)
- ----------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest (Note 3) --
Proceeds from sale of shares
Class I $ 862,074 $ 394,082 $ 1,086,806 $ 544,330 $ 283,340
Net asset value of shares issued to shareholders
in payment of distributions declared
Class I 279,878 148,460 532,282 559,559 180,331
Class II 360,909 67,528 730,455 789,937 98,883
Cost of shares redeemed
Class I (3,400,466) (1,943,632) (5,629,314) (5,707,875) (2,203,538)
Class II (8,438,995) (1,235,782) (21,116,043) (11,235,114) (1,557,577)
Net asset value of shares exchanged
Class I (18,496,757) (6,549,972) (34,915,282) (29,034,216) (10,124,352)
Class II 18,496,757 6,549,972 34,915,282 29,034,216 10,124,352
- ----------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from Fund share
transactions $(10,336,600) $(2,569,344) $(24,395,814) $(15,049,163) $(3,198,561)
- ----------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $ (9,007,728) $(2,247,553) $(22,010,907) $(13,058,900) $(2,820,754)
- -----------------------------------------------------------------------------------------------------------------------
Net Assets
- -----------------------------------------------------------------------------------------------------------------------
At beginning of year $ 40,104,045 $10,812,458 $ 82,738,828 $ 65,085,32 $13,837,202
- -----------------------------------------------------------------------------------------------------------------------
At end of year $ 31,096,317 $ 8,564,905 $ 60,727,921 $ 52,026,429 $11,016,448
- -----------------------------------------------------------------------------------------------------------------------
Accumulated undistributed
(distributions in excess of)
net investment income
included in net assets
- -----------------------------------------------------------------------------------------------------------------------
At end of year $ (111,962) $ 59,735 $ (104,883) $ (15,000) $ (13,126)
- -----------------------------------------------------------------------------------------------------------------------
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
EV Marathon Limited Maturity Municipals Funds as of March 31, 1998
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- -----------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
For the Year Ended March 31, 1998
<CAPTION>
Marathon Marathon Marathon Marathon
New Jersey New York Ohio Pennsylvania
Increase (Decrease) in Net Assets Limited Fund Limited Fund Limited Fund Limited Fund
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 2,146,149 $ 3,502,793 $ 1,013,916 $ 2,482,667
Net realized gain (loss) on invesment
transactions (187,074) 1,088,247 131,062 406,336
Net change in unrealized appreciation
(depreciation) of investments 1,648,350 2,844,140 698,195 2,059,464
- ------------------------------------------------------------------------------------------------------------
Net increase in net assets from operation $ 3,607,425 $ 7,435,180 $ 1,843,173 $ 4,948,357
- ------------------------------------------------------------------------------------------------------------
Distributions to shareholders (Note 2) -
From net investment income
Class I $ (788,446) $ (1,281,208) $ (562,959) $ (781,095)
Class II (1,338,591) (2,200,746) (462,064) (1,659,315)
In excess of net investment income
Class II -- -- (11,117) --
- ------------------------------------------------------------------------------------------------------------
Total distributions to shareholders $ (2,127,037) $ (3,481,954) $(1,036,140) $ (2,440,410)
- -----------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest (Note 3) --
Proceeds from sale of shares
Class I $ 1,195,175 $ 1,170,922 $ 403,230 $ 656,038
Net asset value of shares issued to shareholders
in payment of distributions declared
Class I 575,875 819,416 376,372 453,998
Class II 739,740 1,153,120 282,566 683,229
Cost of shares redeemed
Class I (4,846,604) (12,172,312) (2,151,477) (4,129,149)
Class II (11,566,067) (19,290,897) (2,893,993) (9,812,773)
Net asset value of shares exchanged
Class I (23,754,168) (39,673,864) (19,609,155) (23,736,946)
Class II 23,754,168 39,673,864 19,609,155 23,736,946
- -----------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from Funds share transactions $ 13,901,881 $(28,319,751) $(3,983,302) $(12,148,657)
- -----------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $(12,421,493) $(24,344,525) $(3,176,269) $ (9,640,710)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 56,920,937 $ 96,029,020 $25,539,019 $ 61,877,978
- -----------------------------------------------------------------------------------------------------------------------------------
At end of year $ 44,499,444 $ 71,662,495 $22,362,750 $ 52,237,268
- -----------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed (distributions
in excess of) net investment income
included in net assets
- -----------------------------------------------------------------------------------------------------------------------------------
At end of year $ (71,439) $ (137,259) $ 109,800 $ (27,213
- -----------------------------------------------------------------------------------------------------------------------------------
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
EV Marathon Limited Maturity Municipals Funds as of March 31, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
For the Year Ended March 31, 1998
<CAPTION>
Marathon Marathon Marathon Marathon Marathon
California Connecticut Florida Massachusetts Michigan
Increase (Decrease) in Net Assets Limited Fund Limited Fund Limited Fund Limited Fund Limited Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
From operations --
Net investment income $ 1,912,887 $ 476,306 $ 3,944,752 $ 3,124,380 $ 620,932
Net realized gain (loss) on investment
transactions (105,297) 15,444 (144,894) (65,830) 145,365
Net change in unrealized appreciation
(depreciation) of investments (326,939) (105,957) (1,668,719) (861,229) (132,365)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 1,480,651 $ 385,793 $ 2,131,139 $ 2,197,321 $ 633,932
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders (Note 2) --
From net investment income
Class I $ (1,607,095) $ (455,112) $ (3,242,562) $ (2,495,404) $ (627,157)
Class II (301,808) (1,617) (702,190) (539,280) (1,475)
In excess of net investment income
Class I (13,847) -- (42,727) -- --
Class II -- -- (1,139) -- (43)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders $ (1,922,750) $ (456,729) $ (3,988,618) $ (3,034,684) $ (628,675)
- ------------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest
(Note 3) --
Proceeds from sale of shares
Class I $ 444,769 $ 536,742 $ 2,000,615 $ 1,019,225 $ 383,540
Net asset value of shares issued to shareholders
in payment of distributions declared
Class I 765,892 292,883 1,568,006 1,508,179 343,787
Class II 103,810 16 233,744 249,269 --
Cost of shares redeemed
Class I (11,840,189) (2,960,328) (26,233,067) (22,084,352) (5,590,014)
Class II (3,169,620) -- (9,754,340) (6,578,267) (10,723)
Net asset value of shares exchanged
Class I (17,897,266) (590,112) (44,307,093) (30,459,860) (418,152)
Class II 17,897,266 590,112 44,307,093 30,459,860 418,152
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from Fund share
transactions $(13,695,338) $ (2,130,687) $(32,185,042) $(25,885,946) $ (4,873,410)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $(14,137,437) $ (2,201,623) $(34,042,521) $(26,723,309) $ (4,868,153)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 54,241,482 $ 13,014,081 $116,781,349 $ 91,808,638 $ 18,705,355
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $ 40,104,045 $ 10,812,458 $ 82,738,828 $ 65,085,329 $ 13,837,202
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed (distributions
in excess of) net investment
income included in net assets
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $ (65,854) $ 69,889 $ (133,383) $ (59,021) $ 10,671
- ------------------------------------------------------------------------------------------------------------------------------------
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
EV Marathon Limited Maturity Municipals Funds as of March 31, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
For the Year Ended March 31, 1997
<CAPTION>
Marathon Marathon Marathon Marathon
New Jersey New York Ohio Pennsylvania
Increase (Decrease) in Net Assets Limited Fund Limited Fund Limited Fund Limited Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 2,731,894 $ 4,559,947 $ 1,121,809 $ 3,061,799
Net realized gain (loss) on investment transactions 71,248 (233,150) 202,571 493,781
Net change in unrealized appreciation (depreciation)
of investments (364,451) (911,843) (254,502) (1,235,168)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 2,438,691 $ 3,414,954 $ 1,069,878 $ 2,320,412
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders (Note 2) --
From net investment income
Class I $ (2,193,735) $ (3,852,507) $ (1,105,384) $ (2,334,113)
Class II (497,596) (692,360) (4,852) (652,722)
In excess of net investment income
Class I -- (8,086) -- --
Class II -- -- (66) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders $ (2,691,331) $ (4,552,953) $ (1,110,302) $ (2,986,835)
- ------------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest (Note 3) --
Proceeds from sale of shares
Class I $ 1,528,851 $ 1,602,059 $ 978,772 $ 1,379,651
Net asset value of shares issued to shareholders
in payment of distributions declared
Class I 1,475,486 2,412,846 721,660 1,340,237
Class II 229,798 335,280 -- 187,093
Cost of shares redeemed
Class I (17,296,193) (31,149,203) (5,861,554) (18,401,069)
Class II (6,803,386) (9,880,126) (18,208) (6,368,306)
Net asset value of shares exchanged
Class I (28,857,585) (45,738,630) (976,757) (34,187,865)
Class II 28,857,585 45,738,630 976,757 34,187,865
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from Fund
share transactions $(20,865,444) $(36,679,144) $ (4,179,330) $(21,862,394)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $(21,118,084) $(37,817,143) $ (4,219,754) $(22,528,817)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 78,039,021 $133,846,163 $ 29,758,773 $ 84,406,795
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $ 56,920,937 $ 96,029,020 $ 25,539,019 $ 61,877,978
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed (distributions
in excess of) net investment income
included in net assets
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $ (90,551) $ (158,098) $ 132,024 $ (69,470)
- ------------------------------------------------------------------------------------------------------------------------------------
See notes to financial statements
</TABLE>
<PAGE>
EV Marathon Limited Maturity Municipals Funds as of March 31, 1998
- -------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- -------------------------------------------------------------------------------
Financial Highlights
<TABLE>
<CAPTION>
Marathon California Limited Fund
---------------------------------------------------------------------------------------------------------
Year Ended March 31,
---------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------------
Class I Class II Class I Class II*
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value --
Beginning of year $ 9.980 $ 9.980 $10.080 $ 9.940 $ 9.950 $10.050 $10.340
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income $ .386+++ $ 0.459 $ 0.393 $ 0.363 $ 0.385 $ 0.367 $ 0.380
Net realized and
unrealized gain (loss)
on investments .362 0.362 (0.097) 0.037++ 0.134 (0.027) (0.180)
- ---------------------------------------------------------------------------------------------------------------------------------
Total income from
operations $ 0.748 $ 0.821 $ 0.296 $ 0.400 $ 0.519 $ 0.340 $ 0.200
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income $ (.386) $(0.459) $(0.393) $(0.360) $(0.385) $(0.367) $(0.380)
In excess of net
investment income (.012) (0.012) (0.003) -- (0.004) (0.066) (0.096)
From net realized gain
on investments -- -- -- -- -- (0.007) (0.014)
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions $(0.398) $(0.471) $(0.396) $(0.360) $(0.389) $(0.440) $(0.490)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End
of year $10.330 $10.330 $ 9.980 $ 9.980 $10.080 $ 9.950 $10.050
- ---------------------------------------------------------------------------------------------------------------------------------
Total Return(1) 7.60% 8.56% 2.99% 3.84% 5.27% 3.53% 1.86%
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of
year (000 omitted) $ 5,316 $25,780 $25,386 $14,718 $54,241 $73,857 $82,451
Ratio of net expenses
to average daily net
assets(2)(3) 1.76% 0.96% 1.71% 0.90%+ 1.63% 1.55% 1.40%
Ratio of net expenses
to average daily net
assets after
custodian fee
reduction(2) 1.74% 0.94% 1.70% 0.89%+ 1.59% -- --
Ratio of net
investment income to
average daily net
assets 3.76% 4.51% 3.91% 4.76%+ 3.81% 3.72% 3.55%
Portfolio Turnover(4) -- -- -- -- -- -- 0%
- ---------------------------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Fund and the Portfolio may reflect a reduction of the Investment Adviser fee, an allocation of
expenses to the Administrator, or both. Had such actions not been taken, the ratios and net investment income per share would
have been as follows:
Ratios (As a percentage of average daily net assets):
Expenses(2) 1.48%
Net investment
income 3.47%
Net investment income
per share $ 0.377
- ---------------------------------------------------------------------------------------------------------------------------------
+ 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.
+++ Computed using average shares outstanding.
* For the period from the start of business, June 27, 1996, to March 31, 1997.
(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 reinvestment date. Total return is not computed on an annualized basis.
(2) Includes the Fund's share of its corresponding 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 requirements. The new reporting guidelines require the Fund, as well as its corresponding Portfolio, to increase its
expense ratio by the effect of any expense offset arrangements with its service providers. The expense ratios for each of the
prior periods have not been adjusted to reflect this change.
(4) Portfolio Turnover represents the rate of portfolio activity for the period while the Fund was making investments directly in
securities. The portfolio turnover rate for the period since the Fund transferred substantially all of its investable assets
to the Portfolio is shown in the Portfolio's financial statements which are included elsewhere in this report.
See notes to financial statements
</TABLE>
<PAGE>
EV Marathon Limited Maturity Municipals Funds as of March 31, 1998
- -------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- -------------------------------------------------------------------------------
Financial Highlights
<TABLE>
<CAPTION>
Marathon Connecticut Limited Fund
---------------------------------------------------------------------------------------------------------
Year Ended March 31,
---------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994*
- ---------------------------------------------------------------------------------------------------------------------------------
Class I Class II Class I Class II**
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value --
Beginning of year $ 9.790 $ 9.790 $ 9.850 $ 9.870 $ 9.690 $ 9.690 $10.000
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.357++ $ 0.429 $ 0.398 $ 0.087 $ 0.379 $ 0.373 $ 0.343
Net realized and
unrealized gain
(loss) on investments 0.333 0.333 (0.089) (0.082) 0.150 0.026 (0.243)
- ---------------------------------------------------------------------------------------------------------------------------------
Total income from
operations $ 0.690 $ 0.762 $ 0.309 $ 0.005 $ 0.529 $ 0.399 $ 0.100
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment
income $(0.370) $(0.429) $(0.369) $(0.085) $(0.369) $(0.373) $(0.343)
In excess of net
investment income -- (0.013) -- -- -- (0.026) (0.056)
From net realized
gain on investments -- -- -- -- -- -- (0.011)
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions $(0.370) $(0.442) $(0.369) $(0.085) $(0.369) $(0.399) $(0.410)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value --
End of year $10.110 $10.110 $ 9.790 $ 9.790 $ 9.850 $ 9.690 $9.690
- ---------------------------------------------------------------------------------------------------------------------------------
Total Return(1) 7.02% 7.99% 3.21% (0.13)% 5.50% 4.27% 0.73%
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of
year (000 omitted) $ 2,531 $ 6,034 $10,227 $ 586 $13,014 $15,613 $14,752
Ratio of net expenses
to average daily net
assets(2)(3) 1.92% 1.20% 1.72% 0.70%+ 1.53% 1.23% 0.86%+
Ratio of net expenses
to average daily
net assets after
custodian fee
reduction(2) 1.90% 1.18% 1.68% 0.66%+ 1.49% -- --
Ratio of net
investment income to
average daily net
assets 3.62% 4.26% 3.93% 5.06%+ 3.78% 3.89% 3.50%+
- ---------------------------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Fund and the Portfolio may reflect a reduction of the Investment Adviser fee, an allocation of
expenses to the Administrator, or both. Had such actions not been taken, the ratios and net investment income per share would
have been as follows:
Ratios (As a percentage of average daily net assets):
Expenses(2)(3) 2.15% 1.43% 1.96% 0.94%+ 1.86% 1.81% 2.02%+
Expenses after
custodian fee
reduction(2) 2.13% 1.41% 1.92% 0.90%+ -- -- --
Net investment
income 3.39% 4.03% 3.69% 4.82%+ 3.45% 3.31% 2.34%+
Net investment income
per share $ 0.334 $ 0.406 $ 0.374 $ 0.083 $ 0.346 $ 0.317 $ 0.229
- ---------------------------------------------------------------------------------------------------------------------------------
+ Annualized.
++ Computed using average shares outstanding.
* For the period from the start of business, April 16, 1993, to March 31, 1994.
** For the period from the start of business, January 21, 1997 to March 31, 1997.
(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 reinvestment date. Total return is not computed on an annualized basis.
(2) Includes the Fund's share of its corresponding 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 requirements. The new reporting guidelines require the Fund, as well as its corresponding Portfolio, to increase its
expense ratio by the effect of any expense offset arrangements with its service providers. The expense ratios for each of the
prior periods have not been adjusted to reflect this change.
See notes to financial statements
</TABLE>
<PAGE>
EV Marathon Limited Maturity Municipals Funds as of March 31, 1998
- -------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- -------------------------------------------------------------------------------
Financial Highlights
<TABLE>
<CAPTION>
Marathon Florida Limited Fund
---------------------------------------------------------------------------------------------------------
Year Ended March 31,
---------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------------
Class I Class II Class I Class II*
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value --
Beginning of year $ 9.980 $ 9.980 $10.170 $10.030 $ 10.080 $ 10.060 $ 10.360
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.391++ $ 0.465 $ 0.388 $ 0.357 $ 0.383 $ 0.375 $ 0.387
Net realized and
unrealized gain (loss) on
investments 0.307 0.307 (0.185) (0.049) 0.096 0.090 (0.200)
- ---------------------------------------------------------------------------------------------------------------------------------
Total income from
operations $ 0.698 $ 0.772 $ 0.203 $ 0.308 $ 0.479 $ 0.465 $ 0.187
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment
income $(0.388) $(0.462) $(0.388) $(0.357) $ (0.383) $ (0.375) $ (0.387)
In excess of net
investment income -- -- (0.005) (0.001) (0.006) (0.058) (0.092)
From net realized
gain on investments -- -- -- -- -- (0.012) (0.008)
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions $(0.388) $(0.462) $(0.393) $(0.358) $ (0.389) $ (0.445) $ (0.487)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value --
End of year $10.290 $10.290 $ 9.980 $ 9.980 $ 10.170 $ 10.080 $ 10.060
- ---------------------------------------------------------------------------------------------------------------------------------
Total Return(1) 7.08% 8.06% 2.05% 2.88% 4.78% 4.79% 1.68%
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of
year (000 omitted) $10,612 $50,116 $48,418 $34,321 $116,781 $149,581 $162,999
Ratio of expenses
to average daily
net assets(2)(3) 1.66% 0.90% 1.65% 0.89%+ 1.57% 1.50% 1.42%
Ratio of expenses
to average daily
net assets after
custodian fee
reduction(2) 1.64% 0.88% 1.63% 0.87%+ 1.56% -- --
Ratio of net
investment income
to average daily
net assets 3.84% 4.61% 3.86% 4.65%+ 3.74% 3.77% 3.57%
Portfolio Turnover (4) -- -- -- -- -- -- 0%
- ---------------------------------------------------------------------------------------------------------------------------------
+ Annualized.
++ Computed using average shares outstanding.
* For the period from the start of business, June 27, 1996, to March 31, 1997.
(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 reinvestment date. Total return is not computed on an annualized basis.
(2) Includes the Fund's share of its corresponding 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 requirements. The new reporting guidelines require the Fund, as well as its corresponding Portfolio, to increase its
expense ratio by the effect of any expense offset arrangements with its service providers. The expense ratios for each of the
prior periods have not been adjusted to reflect this change.
(4) Portfolio Turnover represents the rate of portfolio activity for the period while the Fund was making investments directly in
securities. The portfolio turnover rate for the period since the Fund transferred substantially all of its investable assets
to the Portfolio is shown in the Portfolio's financial statements which are included elsewhere in this report.
See notes to financial statements
</TABLE>
<PAGE>
EV Marathon Limited Maturity Municipals Funds as of March 31, 1998
- -------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- -------------------------------------------------------------------------------
Financial Highlights
<TABLE>
<CAPTION>
Marathon Massachusetts Limited Fund
---------------------------------------------------------------------------------------------------------
Year Ended March 31,
---------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------------
Class I Class II Class I Class II*
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value --
Beginning of year $ 9.990 $ 9.990 $10.100 $ 9.940 $ 9.980 $ 9.960 $ 10.270
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment
income $ 0.384+++ $ 0.457 $ 0.378 $ 0.359 $ 0.383 $ 0.383 $ 0.385
Net realized and
unrealized gain
(loss) on
investments 0.339 0.339 (0.106) 0.040++ 0.126 0.082 (0.197)
- ---------------------------------------------------------------------------------------------------------------------------------
Total income from
operations $ 0.723 $ 0.796 $ 0.272 $ 0.399 $ 0.509 $ 0.465 $ 0.188
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment
income $(0.383) $(0.456) $(0.382) $(0.349) $(0.383) $ (0.383) $ (0.385)
In excess of net
investment income -- -- -- -- (0.006) (0.055) (0.095)
From net realized
gain on investments -- -- -- -- -- (0.007) (0.018)
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions $(0.383) $(0.456) $(0.382) $(0.349) $(0.389) $ (0.445) $ (0.498)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value --
End of year $10.330 $10.330 $ 9.990 $ 9.990 $10.100 $ 9.980 $ 9.960
- ---------------------------------------------------------------------------------------------------------------------------------
Total Return(1) 7.33% 8.29% 2.74% 3.83% 5.08% 4.84% 1.75%
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of
year (000 omitted) $ 8,451 $43,575 $41,090 $23,995 $91,809 $113,338 $115,121
Ratio of expenses to
average daily net
assets(2)(3) 1.70% 0.96% 1.68% 0.91%+ 1.60% 1.57% 1.46%
Ratio of expenses to
average daily net
assets after
custodian fee
reduction(2) 1.66% 0.92% 1.66% 0.89%+ 1.58% -- --
Ratio of net
investment income to
average daily net
assets 3.85% 4.53% 3.90% 4.76%+ 3.71% 3.89% 3.61%
Portfolio Turnover (4) -- -- -- -- -- -- 2%
- ---------------------------------------------------------------------------------------------------------------------------------
+ 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.
+++ Computed using average shares outstanding.
* For the period from the start of business, June 27, 1996, to March 31, 1997.
(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 reinvestment date. Total return is not computed on an annualized basis.
(2) Includes the Fund's share of its corresponding 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 requirements. The new reporting guidelines require the Fund, as well as its corresponding Portfolio, to increase its
expense ratio by the effect of any expense offset arrangements with its service providers. The expense ratios for each of the
prior periods have not been adjusted to reflect this change.
(4) Portfolio Turnover represents the rate of portfolio activity for the period while the Fund was making investments directly in
securities. The portfolio turnover rate for the period since the Fund transferred substantially all of its investable assets
to the Portfolio is shown in the Portfolio's financial statements which are included elsewhere in this report.
See notes to financial statements
</TABLE>
<PAGE>
EV Marathon Limited Maturity Municipals Funds as of March 31, 1998
- -------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- -------------------------------------------------------------------------------
Financial Highlights
<TABLE>
<CAPTION>
Marathon Michigan Limited Fund
---------------------------------------------------------------------------------------------------------
Year Ended March 31,
---------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994*
- ---------------------------------------------------------------------------------------------------------------------------------
Class I Class II Class I Class II**
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value --
Beginning of year $ 9.740 $ 9.740 $ 9.730 $ 9.740 $ 9.630 $ 9.650 $10.000
- ---------------------------------------------------------------------------- -----------------------------------------------------
Income (loss) from operations
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income $0.357++ $ 0.430 $ 0.382 $ 0.201 $ 0.383 $ 0.364 $ 0.345
Net realized and
unrealized gain (loss)
on investments 0.329 0.329 0.012 0.001 0.090 0.030 (0.279)
- ---------------------------------------------------------------------------------------------------------------------------------
Total income from
operations $ 0.686 $ 0.759 $ 0.394 $ 0.202 $ 0.473 $ 0.394 $ 0.066
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment
income $(0.386) $(0.430) $(0.384) $(0.201) $(0.373) $(0.364) $ (0.345)
In excess of net
investment income -- (0.029) -- (0.001) -- (0.050) (0.071)
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions $(0.386) $(0.459) $(0.384) $(0.202) $(0.373) $(0.414) $ (0.416)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End
of year $10.040 $10.040 $ 9.740 $ 9.740 $ 9.730 $ 9.630 $ 9.650
- ---------------------------------------------------------------------------------------------------------------------------------
Total Return(1) 7.24% 8.23% 4.14% 1.89% 4.95% 4.24% 0.37%
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of
year (000 omitted) $ 1,839 $ 9,177 $13,431 $ 406 $18,705 $26,048 $26,788
Ratio of net expenses
to average daily net
assets(2)(3) 2.04% 1.36% 1.99% 1.18%+ 1.78% 1.55% 1.91%+
Ratio of net expenses
to average daily net
assets after
custodian fee
reduction(2) 2.00% 1.32% 1.96% 1.15%+ 1.75% -- --
Ratio of net
investment income to
average daily net
assets 3.72% 4.32% 3.91% 4.56%+ 3.92% 3.82% 3.56%+
- ---------------------------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Fund and the Portfolio may reflect a reduction of the Investment Adviser fee, an allocation of
expenses to the Administrator, or both. Had such actions not been taken, the ratios and net investment income per share would
have been as follows:
Ratios (As a percentage of average daily net assets):
Expenses(2) 1.66% 2.63%+
Net investment
income 3.71% 2.84%+
Net investment income
per share $ 0.354 $ 0.275
- ---------------------------------------------------------------------------------------------------------------------------------
+ Annualized.
++ Computed using average shares outstanding.
* For the period from the start of business, April 16, 1993, to March 31, 1994.
** For the period from the start of business, October 22, 1996, to March 31, 1997.
(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 reinvestment date. Total return is not computed on an annualized basis.
(2) Includes the Fund's share of its corresponding 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 requirements. The new reporting guidelines require the Fund, as well as its corresponding Portfolio, to increase its
expense ratio by the effect of any expense offset arrangements with its service providers. The expense ratios for each of the
prior periods have not been adjusted to reflect this change.
See notes to financial statements
</TABLE>
<PAGE>
EV Marathon Limited Maturity Municipals Funds as of March 31, 1998
- -------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- -------------------------------------------------------------------------------
Financial Highlights
<TABLE>
<CAPTION>
Marathon New Jersey Limited Fund
---------------------------------------------------------------------------------------------------------
Year Ended March 31,
---------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------------
Class I Class II Class I Class II*
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value --
Beginning of year $10.070 $10.070 $10.110 $ 9.960 $10.020 $10.030 $10.350
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.391+++ $ 0.464 $ 0.375 $ 0.362 $ 0.383 $ 0.370 $ 0.374
Net realized and
unrealized gain (loss)
on investments 0.279 0.279 (0.026) 0.102++ 0.093 0.068 (0.216)++
- ---------------------------------------------------------------------------------------------------------------------------------
Total income from
operations $ 0.670 $ 0.743 $ 0.349 $ 0.464 $ 0.476 $ 0.438 $ 0.158
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment
income $(0.390) $(0.463) $(0.389) $(0.354) $(0.383) $(0.370) $(0.374)
In excess of net
investment income -- -- -- -- (0.003) (0.060) (0.092)
From net realized gain
on investments -- -- -- -- -- (0.018) (0.012)
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions $(0.390) $(0.463) $(0.389) $(0.354) $(0.386) $(0.448) $(0.478)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End
of year $10.350 $10.350 $10.070 $10.070 $10.110 $10.020 $10.030
- ---------------------------------------------------------------------------------------------------------------------------------
Total Return(1) 6.73% 7.69% 3.53% 4.48% 4.79% 4.53% 1.44%
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of
year (000 omitted) $ 8,620 $35,879 $34,691 $22,230 $78,039 $93,361 $99,743
Ratio of expenses to
average daily net
assets(2)(3) 1.72% 0.99% 1.69% 0.88%+ 1.60% 1.56% 1.51%
Ratio of expenses to
average daily net
assets after
custodian fee
reduction(2) 1.71% 0.98% 1.66% 0.85%+ 1.58% -- --
Ratio of net
investment income to
average daily net
assets 3.85% 4.56% 3.90% 4.75%+ 3.77% 3.73% 3.50%
- ---------------------------------------------------------------------------------------------------------------------------------
+ Annualized.
++ The per share amount is not in accordance 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.
+++ Computed using average shares outstanding.
* For the period from the start of business, June 27, 1996, to March 31, 1997.
(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 reinvestment date. Total return is not computed on an annualized basis.
(2) Includes the Fund's share of its corresponding 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 requirements. The new reporting guidelines require the Fund, as well as its corresponding Portfolio, to increase its
expense ratio by the effect of any expense offset arrangements with its service providers. The expense ratios for each of the
prior periods have not been adjusted to reflect this change.
See notes to financial statements
</TABLE>
<PAGE>
EV Marathon Limited Maturity Municipals Funds as of March 31, 1998
- -------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- -------------------------------------------------------------------------------
Financial Highlights
<TABLE>
<CAPTION>
Marathon New York Limited Fund
---------------------------------------------------------------------------------------------------------
Year Ended March 31,
---------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------------
Class I Class II Class I Class II*
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value --
Beginning of year $10.040 $10.040 $10.150 $10.000 $ 10.030 $ 10.040 $ 10.360
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment
income $ 0.388+++ $ 0.461 $ 0.387 $ 0.357 $ 0.374 $ 0.378 $ 0.387
Net realized and
unrealized gain
(loss) on
investments 0.470 0.470 (0.109) 0.035++ 0.135 0.049 (0.219)
- ---------------------------------------------------------------------------------------------------------------------------------
Total income from
operations $ 0.858 $ 0.931 $ 0.278 $ 0.392 $ 0.509 $ 0.427 $ 0.168
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment
income $(0.388) $(0.461) $(0.387) $(0.352) $ (0.374) $ (0.378) $ (0.387)
In excess of net
investment income -- -- (0.001) -- (0.015) (0.055) (0.093)
From net realized
gain on investments -- -- -- -- -- (0.004) (0.008)
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions $(0.388) $ (0.461) $(0.388) $(0.352) $ (0.389) $ (0.437) $ (0.488)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value --
End of year $10.510 $10.510 $10.040 $10.040 $ 10.150 $ 10.030 $ 10.040
- ---------------------------------------------------------------------------------------------------------------------------------
Total Return(1) 8.65% 9.61% 2.79% 3.74% 5.12% 4.41% 1.46%
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of
year (000 omitted) $ 12,220 $59,442 $60,097 $35,932 $133,846 $166,691 $178,251
Ratio of expenses
to average daily
net assets(2)(3) 1.70% 0.93% 1.63% 0.88%+ 1.57% 1.51% 1.40%
Ratio of expenses
to average daily
net assets after
custodian fee
reduction(2) 1.68% 0.91% 1.61% 0.86%+ 1.55% -- --
Ratio of net
investment income
to average daily
net assets 3.77% 4.50% 3.84% 4.67%+ 3.66% 3.81% 3.56%
- ---------------------------------------------------------------------------------------------------------------------------------
+ Annualized.
++ The per share amount is not in accordance 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.
+++ Computed using average shares outstanding.
* For the period from the start of business, June 27, 1996, to March 31, 1997.
(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 reinvestment date. Total return is not computed on an annualized basis.
(2) Includes the Fund's share of its corresponding 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 requirements. The new reporting guidelines require the Fund, as well as its corresponding Portfolio, to increase its
expense ra tio 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
</TABLE>
<PAGE>
EV Marathon Limited Maturity Municipals Funds as of March 31, 1998
- -------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- -------------------------------------------------------------------------------
Financial Highlights
<TABLE>
<CAPTION>
Marathon Ohio Limited Fund
---------------------------------------------------------------------------------------------------------
Year Ended March 31,
---------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994*
- ---------------------------------------------------------------------------------------------------------------------------------
Class I Class II Class I Class II**
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value --
Beginning of year $ 9.820 $ 9.820 $ 9.840 $ 9.860 $ 9.730 $ 9.730 $10.000
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.389++ $ 0.461 $ 0.408 $ 0.205 $ 0.398 $ 0.382 $ 0.354
Net realized and
unrealized gain (loss)
on investments 0.331 0.331 (0.033) (0.037) 0.085 0.032 (0.194)
- ---------------------------------------------------------------------------------------------------------------------------------
Total income from
operations $ 0.720 $ 0.792 $ 0.375 $ 0.168 $ 0.483 $ 0.414 $ 0.160
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment
income $(0.400) $(0.461) $(0.395) $(0.205) $(0.373) $(0.382) $ (0.354)
In excess of net
investment income -- (0.011) -- (0.003) -- (0.032) (0.076)
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions $(0.400) $(0.472) $(0.395) $(0.208) $(0.373) $(0.414) $ (0.430)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End
of year $10.140 $10.140 $ 9.820 $ 9.820 $ 9.840 $ 9.730 $ 9.730
- ---------------------------------------------------------------------------------------------------------------------------------
Total Return(1) 7.43% 8.40% 3.89% 1.51% 5.07% 4.41% 1.23%
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of
year (000 omitted) $ 4,249 $18,114 $24,587 $ 952 $29,759 $34,279 $32,002
Ratio of net expenses
to average daily net
assets(2)(3) 1.80% 1.11% 1.84% 1.08%+ 1.67% 1.49% 1.03%+
Ratio of net expenses
to average daily net
assets after
custodian fee
reduction(2) -- -- 1.81% 1.05%+ 1.65% -- --
Ratio of net
investment income to
average daily net
assets 3.92% 4.57% 4.06% 4.75%+ 4.04% 3.95% 3.53%+
- ---------------------------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Fund and the Portfolio may reflect a reduction of the Investment Adviser fee, an allocation of
expenses to the Investment Adviser or Administrator, or both. Had such actions not been taken, the ratios and net investment
income per share would have been as follows:
Ratios (As a percentage of average daily net assets):
Expenses(2) 1.60% 1.63%+
Net investment
income 3.84% 2.93%+
Net investment income
per share $ 0.371 $ 0.293
- ---------------------------------------------------------------------------------------------------------------------------------
+ Annualized.
++ Computed using average shares outstanding.
* For the period from the start of business, April 16, 1993, to March 31, 1994.
** For the period from the start of business, October 22, 1996, to March 31, 1997.
(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 reinvestment date. Total return is not computed on an annualized basis.
(2) Includes the Fund's share of its corresponding 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 requirements. The new reporting guidelines require the Fund, as well as its corresponding Portfolio, to increase its
expense ratio by the effect of any expense offset arrangements with its service providers. The expense ratios for each of the
prior periods have not been adjusted to reflect this change.
See notes to financial statements
</TABLE>
<PAGE>
EV Marathon Limited Maturity Municipals Funds as of March 31, 1998
- -------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- -------------------------------------------------------------------------------
Financial Highlights
<TABLE>
<CAPTION>
Marathon Pennsylvania Limited Fund
---------------------------------------------------------------------------------------------------------
Year Ended March 31,
---------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------------
Class I Class II Class I Class II*
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value --
Beginning of year $10.100 $10.100 $10.190 $10.030 $10.090 $ 10.100 $ 10.390
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment
income $ 0.407+++ $ 0.481 $ 0.392 $ 0.371 $ 0.388 $ 0.374 $ 0.399
Net realized and
unrealized gain
(loss) on
investments 0.445 0.445 (0.081) 0.063++ 0.110 0.065 (0.195)
- ---------------------------------------------------------------------------------------------------------------------------------
Total income from
operations $ 0.852 $ 0.926 $ 0.311 $ 0.434 $ 0.498 $ 0.439 $ 0.204
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment
income $(0.402) $(0.476) $(0.401) $(0.364) $(0.388) $ (0.374) $ (0.399)
In excess of net
investment income -- -- -- -- (0.010) (0.069) (0.083)
From net realized
gain on investments -- -- -- -- -- (0.006 (0.012)
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions $(0.402) $(0.476) $(0.401) $(0.364) $(0.398) $ (0.449) $(0.494)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value --
End of year $10.550 $10.550 $10.100 $10.100 $10.190 $ 10.090 $10.100
- ---------------------------------------------------------------------------------------------------------------------------------
Total Return(1) 8.55% 9.52% 3.12% 4.15% 4.98% 4.50% 1.89%
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of
year (000 omitted) $ 8,277 $43,961 $33,971 $27,907 $84,407 $103,553 $109,515
Ratio of expenses to
average daily net
assets(2)(3) 1.71% 0.97% 1.69% 0.90%+ 1.62% 1.57% 1.45%
Ratio of expenses to
average daily net
assets after
custodian fee
reduction(2) 1.69% 0.95% 1.67% 0.88%+ 1.60% -- --
Ratio of net
investment income to
average daily net
assets 3.95% 4.67% 4.05% 4.83%+ 3.79% 3.75% 3.63%
- ---------------------------------------------------------------------------------------------------------------------------------
+ Annualized.
++ The per share amount is not in accordance 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.
+++ Computed using average shares outstanding.
* For the period from the start of business, June 27, 1996, to March 31, 1997.
(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 reinvestment date. Total return is not computed on an annualized basis.
(2) Includes the Fund's share of its corresponding 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 requirements. The new reporting guidelines require the Fund, as well as its corresponding Portfolio, to increase its
expense ratio by the effect of any expense offset arrangements with its service providers. The expense ratios for each of the
prior periods have not been adjusted to reflect this change.
See notes to financial statements
</TABLE>
<PAGE>
EV Marathon Limited Maturity Municipals Funds as of March 31, 1998
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
1 Significant Accounting Policies
- -------------------------------------------------------------------------------
Eaton Vance Investment 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 investment
management company. The Trust presently consists of twenty-three Funds, nine
of which are included in these financial statements. They include EV
Marathon California Limited Maturity Municipals Fund ("Marathon California
Limited Fund"), EV Marathon Connecticut Limited Maturity Municipals Fund
("Marathon Connecticut Limited Fund"), EV Marathon Florida Limited Maturity
Municipals Fund ("Marathon Florida Limited Fund"), EV Marathon Massachusetts
Limited Maturity Municipals Fund ("Marathon Massachusetts Limited Fund"), EV
Marathon Michigan Limited Maturity Municipals Fund ("Marathon Michigan
Limited Fund"), EV Marathon New Jersey Limited Maturity Municipals Fund
("Marathon New Jersey Limited Fund"), EV Marathon New York Limited Maturity
Municipals Fund ("Marathon New York Limited Fund"), EV Marathon Ohio Limited
Maturity Municipals Fund ("Marathon Ohio Limited Fund") and EV Marathon
Pennsylvania Limited Maturity Municipals Fund ("Marathon Pennsylvania
Limited Fund"). The Funds have two classes of shares. Class I shares are
sold at net asset value and are subject to a contingent deferred sales
charge (see Note 6). Class I shares held longer than (i) four years or (ii)
the time at which the contingent deferred sales charge applicable to such
shares expires will automatically convert to Class II shares. All classes of
shares have equal rights to assets and voting privileges. Realized and
unrealized gains and losses and net investment income, other than class
specific expenses, are allocated daily to each class of shares based on the
relative net assets of each class to the total net assets of the Fund. Each
class of shares differs in its distribution plan and certain other class
specific expenses. Each Fund invests all of its investable assets in
interests in a separate corresponding open-end management investment company
(a "Portfolio"), a New York Trust, having the same investment objective as
its corresponding Fund. The Marathon California Limited Fund invests its
assets in the California Limited Maturity Municipals Portfolio, the Marathon
Connecticut Limited Fund invests its assets in the Connecticut Limited
Maturity Municipals Portfolio, the Marathon Florida Limited Fund invests its
assets in the Florida Limited Maturity Municipals Portfolio, the Marathon
Massachusetts Limited Fund invests its assets in the Massachusetts Limited
Maturity Municipals Portfolio, the Marathon Michigan Limited Fund invests
its assets in the Michigan Limited Maturity Municipals Portfolio, the
Marathon New Jersey Limited Fund invests its assets in the New Jersey
Limited Maturity Municipals Portfolio, the Marathon New York Limited Fund
invests its assets in the New York Limited Maturity Municipals Portfolio,
the Marathon Ohio Limited Fund invests its assets in the Ohio Limited
Maturity Municipals Portfolio and the Marathon Pennsylvania Limited Fund
invests its assets in the Pennsylvania Limited Maturity Municipals
Portfolio. The value of each Fund's investment in its corresponding
Portfolio reflects the Fund's proportionate interest in the net assets of
that Portfolio (90.9%, 88.0%, 84.6%, 92.1%, 91.6%, 98.2%, 96.3%, 92.6% and
90.9% at March 31, 1998 for the Marathon California Limited Fund, Marathon
Connecticut Limited Fund, Marathon Florida Limited Fund, Marathon
Massachusetts Limited Fund, Marathon Michigan Limited Fund, Marathon New
Jersey Limited Fund, Marathon New York Limited Fund, Marathon Ohio Limited
Fund and Marathon Pennsylvania Limited Fund, respectively). The performance
of each Fund is directly affected by the performance of its corresponding
Portfolio. The financial statements of each Portfolio, including the
portfolio of investments, are included elsewhere in this report and should
be read in conjunction with each Fund's financial statements.
On June 23, 1997, the Board of Trustees of the Trust adopted a multiple
class plan for the EV Marathon California Limited Maturity Municipals Fund,
EV Marathon Connecticut Limited Maturity Municipals Fund, EV Marathon
Florida Limited Maturity Municipals Fund, EV Marathon Massachusetts Limited
Maturity Municipals Fund, EV Marathon Michigan Limited Maturity Municipals
Fund, EV Marathon New Jersey Limited Maturity Municipals Fund, EV Marathon
New York Limited Maturity Municipals Fund, EV Marathon Ohio Limited Maturity
Municipals Fund and EV Marathon Pennsylvania Limited Maturity Municipals
Fund which permits the Funds to issue more than one class of shares.
Initially, the Funds will offer multiple classes of shares and, effective
April 1, 1998 the existing Class I and Class II shares of the Funds will be
designated Class B and Class A shares, respectively. On June 23, 1997 the
Board of Trustees also approved a Plan of Reorganization (the "Plan") for
the Trust. Under the terms of the Plan, the Funds will acquire substantially
all of the assets and liabilities of the EV Traditional California Limited
Maturity Municipals Fund, EV Traditional Connecticut Limited Maturity
Municipals Fund, EV Traditional Florida Limited Maturity Municipals Fund, EV
Traditional Michigan Limited Maturity Municipals Fund, EV Traditional New
Jersey Limited Maturity Municipals Fund, EV Traditional New York Limited
Maturity Municipals Fund and EV Traditional Ohio Limited Maturity Municipals
Fund as well as the assets of EV Classic Florida Limited Maturity Municipals
Fund, EV Classic Massachusetts Limited Maturity Municipals Fund, EV Classic
New York Limited Maturity Municipals Fund and EV Classic Pennsylvania
Limited Maturity Municipals Fund. The transaction will be structured for tax
purposes to qualify as a tax-free reorganization under the Internal Revenue
Code. As a result of the reorganization, shareholders of the corresponding
Traditional Funds will receive Class A shares and shareholders of the
corresponding Classic Funds will receive Class C shares. The reorganization
will occur after the close of business, March 31, 1998.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
A Investment Valuation -- Valuation of securities by the Portfolios is
discussed in Note 1A of the Portfolios' Notes to Financial Statements, which
are included elsewhere in this report.
B Income -- Each Fund's net investment income consists of each Fund's pro
rata share of the net investment income of its corresponding Portfolio, less
all actual and accrued expenses of each Fund determined in accordance with
generally accepted accounting principles.
C Federal Taxes -- Each Fund's policy is to comply with the provisions of
the Internal Revenue Code applicable to regulated investment companies and
to distribute to shareholders each year all of its taxable and tax-exempt
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is necessary. At March 31, 1998,
the following Funds, for federal income tax purposes, had capital loss
carryovers, which will reduce each Fund's 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 the distributions
to shareholders which would otherwise be necessary to relieve the Funds of
any liability for federal income taxes. The amounts and expiration dates of
the capital loss carryovers are as follows:
Fund Amount Expires
---------------------------------------------------------------------------
Marathon California Limited Fund $ 29,906 March 31, 2005
1,636,790 March 31, 2004
380,944 March 31, 2003
Marathon Connecticut Limited Fund 248,769 March 31, 2004
214,664 March 31, 2003
Marathon Florida Limited Fund 304,675 March 31, 2006
53,705 March 31, 2005
2,395,400 March 31, 2004
645,654 March 31, 2003
171,385 March 31, 2006
Marathon Massachusetts Limited Fund 1,434,610 March 31, 2004
507,369 March 31, 2003
Marathon Michigan Limited Fund 126,762 March 31, 2006
629,966 March 31, 2004
364,378 March 31, 2003
Marathon New Jersey Limited Fund 211,916 March 31, 2006
1,685,218 March 31, 2004
481,071 March 31, 2003
Marathon New York Limited Fund 1,660,209 March 31, 2004
87,898 March 31, 2003
Marathon Ohio Limited Fund 627,563 March 31, 2004
494,168 March 31, 2003
Marathon Pennsylvania Limited Fund 1,268,934 March 31, 2004
Dividends paid by each Fund from net interest on tax-exempt municipal bonds
allocated from its corresponding Portfolio are not includable by
shareholders as gross income for federal income tax purposes because each
Fund and Portfolio intend to meet certain requirements of the Internal
Revenue Code applicable to regulated investment companies which will enable
the Funds to pay exempt-interest dividends. The portion of such interest, if
any, earned on private activity bonds issued after August 7, 1986, may be
considered a tax preference item to shareholders.
D Deferred Organization Expenses -- Costs incurred by a Fund in connection
with its organization, including registration costs, are being amortized on
the straight-line basis over five years, beginning on the date each Fund
commenced operations.
E 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.
F Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian to the Funds and the Portfolios. Pursuant to the respective
custodian agreements, IBT receives a fee reduced by credits which are
determined based on the average daily cash balances the Funds or the
Portfolios maintain with IBT. All significant credit balances used to reduce
each Fund's custodian fees are reported as a reduction of expenses on the
Statement of Operations.
G Other -- Investment transactions are accounted for on a trade date basis.
2 Distributions to Shareholders
- -------------------------------------------------------------------------------
The net income of each 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. Dividends are declared separately for each class
of shares. Distributions are paid monthly. Distributions of allocated
realized capital gains, if any, are made at least annually. Shareholders may
reinvest income and capital gain distributions in additional shares of the
same class of a Fund at the net asset value as of the reinvestment date.
Distributions are paid in the form of additional shares of the same class
or, at the election of the shareholder, in cash. The Funds distinguish
between distributions on a tax basis and a financial reporting basis.
Generally accepted accounting principles require that only distributions in
excess of tax basis earnings and profits be reported in the financial
statements as a return of capital. Differences in the recognition or
classification of income between the financial statements and tax earnings
and profits which result in temporary over distributions for financial
statement purposes are classified as distributions in excess of net
investment income or accumulated net realized gains. Permanent differences
between book and tax accounting relating to distributions are reclassified
to paid-in capital.
3 Shares of Beneficial Interest
- --------------------------------------------------------------------------------
The Funds' Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par
value). Such shares may be issued in a number of different classes.
Transactions in Fund shares were as follows:
Marathon California
Limited Fund
------------------------
Year Ended March 31,
------------------------
Class I 1998 1997
----------------------------------------------------------------------------
Sales 85,408 44,303
Issued to shareholders electing to receive payment
of distribution in Fund shares 27,495 76,296
Redemptions (335,075) (1,178,410)
Exchange to Class II shares (1,807,527) (1,779,248)
----------------------------------------------------------------------------
Net decrease (2,029,699) (2,837,059)
----------------------------------------------------------------------------
Year Ended March 31,
------------------------
Class II 1998 1997
----------------------------------------------------------------------------
Sales -- --
Issued to shareholders electing to receive payment
of distribution in Fund shares 35,206 10,290
Redemptions (822,966) (314,531)
Exchange to Class II shares 1,807,527 1,779,248
----------------------------------------------------------------------------
Net increase 1,019,767 1,475,007
----------------------------------------------------------------------------
Marathon Connecticut
Limited Fund
------------------------
Year Ended March 31,
------------------------
Class I 1998 1997
----------------------------------------------------------------------------
Sales 39,260 54,830
Issued to shareholders electing to receive payment
of distribution in Fund shares 14,858 29,813
Redemptions (195,469) (300,480)
Exchange to Class II shares (653,370) (59,859)
----------------------------------------------------------------------------
Net decrease (794,721) (275,696)
----------------------------------------------------------------------------
Year Ended March 31,
------------------------
Class II 1998 1997
----------------------------------------------------------------------------
Sales -- --
Issued to shareholders electing to receive payment
of distribution in Fund shares 6,706 2
Redemptions (122,878) --
Exchange to Class II shares 653,370 59,859
----------------------------------------------------------------------------
Net increase 537,198 59,861
----------------------------------------------------------------------------
Marathon Florida Limited
Fund
------------------------
Year Ended March 31,
------------------------
Class I 1998 1997
----------------------------------------------------------------------------
Sales 105,262 197,900
Issued to shareholders electing to receive payment
of distribution in Fund shares 52,346 155,202
Redemptions (554,732) (2,599,329)
Exchange to Class II shares (3,424,984) (4,380,777)
----------------------------------------------------------------------------
Net decrease (3,822,108) (6,627,004)
----------------------------------------------------------------------------
Year Ended March 31,
------------------------
Class II 1998 1997
----------------------------------------------------------------------------
Sales -- --
Issued to shareholders electing to receive payment
of distribution in Fund shares 71,474 23,070
Redemptions (2,067,316) (963,892)
Exchange to Class II shares 3,424,984 4,380,777
----------------------------------------------------------------------------
Net increase 1,429,142 3,439,955
----------------------------------------------------------------------------
Marathon Massachusetts
Limited Fund
------------------------
Year Ended March 31,
------------------------
Class I 1998 1997
----------------------------------------------------------------------------
Sales 52,696 101,398
Issued to shareholders electing to receive payment
of distribution in Fund shares 54,876 150,180
Redemptions (561,592) (2,198,694)
Exchange to Class II shares (2,840,002) (3,028,854)
----------------------------------------------------------------------------
Net decrease (3,294,022) (4,975,970)
----------------------------------------------------------------------------
Year Ended March 31,
------------------------
Class II 1998 1997
----------------------------------------------------------------------------
Sales -- --
Issued to shareholders electing to receive payment
of distribution in Fund shares 77,012 24,689
Redemptions (1,097,974) (652,306)
Exchange to Class II shares 2,840,002 3,028,854
----------------------------------------------------------------------------
Net increase 1,819,040 2,401,237
----------------------------------------------------------------------------
Marathon Michigan
Limited Fund
------------------------
Year Ended March 31,
------------------------
Class I 1998 1997
----------------------------------------------------------------------------
Sales 28,674 39,358
Issued to shareholders electing to receive payment
of distribution in Fund shares 18,182 35,316
Redemptions (223,733) (575,559)
Exchange to Class II shares (1,018,871) (42,757)
----------------------------------------------------------------------------
Net decrease (1,195,748) (543,642)
----------------------------------------------------------------------------
Year Ended March 31,
------------------------
Class II 1998 1997
----------------------------------------------------------------------------
Sales -- --
Issued to shareholders electing to receive payment
of distribution in Fund shares 9,875 --
Redemptions (156,656) (1,098)
Exchange to Class II shares 1,018,871 42,757
----------------------------------------------------------------------------
Net increase 872,090 41,659
----------------------------------------------------------------------------
Marathon New Jersey
Limited Fund
------------------------
Year Ended March 31,
------------------------
Class I 1998 1997
----------------------------------------------------------------------------
Sales 116,912 151,146
Issued to shareholders electing to receive payment
of distribution in Fund shares 56,169 146,399
Redemptions (474,069) (1,717,413)
Exchange to Class II shares (2,312,029) (2,856,136)
----------------------------------------------------------------------------
Net decrease (2,613,017) (4,276,004)
----------------------------------------------------------------------------
Year Ended March 31,
------------------------
Class II 1998 1997
----------------------------------------------------------------------------
Sales -- --
Issued to shareholders electing to receive payment
of distribution in Fund shares 71,798 22,628
Redemptions (1,126,637) (670,727)
Exchange to Class II shares 2,312,029 2,856,136
----------------------------------------------------------------------------
Net increase 1,257,190 2,208,037
----------------------------------------------------------------------------
Marathon New York
Limited Fund
------------------------
Year Ended March 31,
------------------------
Class I 1998 1997
----------------------------------------------------------------------------
Sales 112,437 158,358
Issued to shareholders electing to receive payment
of distribution in Fund shares 79,378 239,015
Redemptions (1,178,702) (3,084,350)
Exchange to Class II shares (3,833,043) (4,520,073)
----------------------------------------------------------------------------
Net decrease (4,819,930) (7,207,050)
----------------------------------------------------------------------------
Year Ended March 31,
------------------------
Class II 1998 1997
----------------------------------------------------------------------------
Sales -- --
Issued to shareholders electing to receive payment
of distribution in Fund shares 110,830 33,049
Redemptions (1,864,566) (975,814)
Exchange to Class II shares 3,833,043 4,520,073
----------------------------------------------------------------------------
Net increase 2,079,307 3,577,308
----------------------------------------------------------------------------
Marathon Ohio Limited
Fund
------------------------
Year Ended March 31,
------------------------
Class I 1998 1997
----------------------------------------------------------------------------
Sales 40,352 99,376
Issued to shareholders electing to receive payment
of distribution in Fund shares 37,539 73,211
Redemptions (215,277) (595,795)
Exchange to Class II shares (1,947,200) (98,805)
----------------------------------------------------------------------------
Net decrease (2,084,586) (522,013)
----------------------------------------------------------------------------
Year Ended March 31,
------------------------
Class II 1998 1997
----------------------------------------------------------------------------
Sales -- --
Issued to shareholders electing to receive payment
of distribution in Fund shares 27,898 --
Redemptions (286,153) (1,819)
Exchange to Class II shares 1,947,200 98,805
----------------------------------------------------------------------------
Net increase 1,688,945 96,986
----------------------------------------------------------------------------
Marathon Pennsylvania
Limited Fund
------------------------
Year Ended March 31,
------------------------
Class I 1998 1997
----------------------------------------------------------------------------
Sales 62,800 136,028
Issued to shareholders electing to receive payment
of distribution in Fund shares 43,872 132,318
Redemptions (399,781) (1,815,306)
Exchange to Class II shares (2,286,266) (3,371,454)
----------------------------------------------------------------------------
Net decrease (2,579,375) (4,918,414)
----------------------------------------------------------------------------
Year Ended March 31,
------------------------
Class II 1998 1997
----------------------------------------------------------------------------
Sales -- --
Issued to shareholders electing to receive payment
of distribution in Fund shares 65,498 18,350
Redemptions (947,640) (625,891)
Exchange to Class II shares 2,286,266 3,371,454
----------------------------------------------------------------------------
Net increase 1,404,124 2,763,913
----------------------------------------------------------------------------
4 Transactions with Affiliates
- --------------------------------------------------------------------------------
Eaton Vance Management (EVM) serves as the Administrator of each Fund, but
receives no compensation. Each of the Portfolios have engaged Boston
Management and Research (BMR), a subsidiary of EVM, to render investment
advisory services. See Note 2 of the Portfolios' Notes to Financial
Statements which are included elsewhere in this report. Certain of the
officers and Trustees of the Funds and Portfolios are officers and
directors/trustees of the above organizations (Note 5).
Except as to Trustees of the Funds and Portfolios who are not members of
EVM's or BMR's organization, officers and Trustees receive remuneration for
their services to each Fund out of the investment adviser fee earned by BMR.
5 Distribution Plan
- --------------------------------------------------------------------------------
Each Fund has adopted a distribution plan (the "Plans") pursuant to Rule
12b-1 under the Investment Company Act of 1940. The Plans require the Funds
to pay the principal underwriter, Eaton Vance Distributors, Inc. (EVD)
amounts equal to 1/365 of 0.75% of each Fund's Class I daily net assets,
for providing ongoing distribution services and facilities to the respective
Fund. A 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) 3% (3 1/2% for Marathon Connecticut
Limited Fund, Marathon Michigan Limited Fund and Marathon Ohio Limited Fund)
of the aggregate amount received by the Fund for Class I 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 the aggregate amount of contingent deferred sales
charges (see Note 6) and amounts theretofore paid to EVD. The amount payable
to EVD with respect to each day is accrued on such day as a liability of
each Fund and, accordingly, reduces each Fund's net assets. For the year
ended March 31, 1998, Marathon California Limited Fund, Marathon Connecticut
Limited Fund, Marathon Florida Limited Fund, Marathon Massachusetts Limited
Fund, Marathon Michigan Limited Fund, Marathon New Jersey Limited Fund,
Marathon New York Limited Fund, Marathon Ohio Limited Fund and Marathon
Pennsylvania Limited Fund paid or accrued $114,365, $46,460, $209,721,
$171,992, $50,670, $155,558, $255,832, $106,025 and $151,020, respectively,
to or payable to EVD representing 0.75% of average daily net assets. At
March 31, 1998, the amount of Uncovered Distribution Charges of EVD
calculated under the Plans for Marathon California Limited Fund, Marathon
Connecticut Limited Fund, Marathon Florida Limited Fund, Marathon
Massachusetts Limited Fund, Marathon Michigan Limited Fund, Marathon New
Jersey Limited Fund, Marathon New York Limited Fund, Marathon Ohio Limited
Fund and Marathon Pennsylvania Limited Fund were approximately $244,240,
$201,960, $540,414, $295,379, $332,864, $302,018, $400,686, $432,559 and
$200,188, respectively.
In addition, the Plans permit the Funds to make monthly payments of service
fees to the Principal Underwriter in amounts not expected to exceed 0.25% of
each Fund's average daily net assets for any fiscal year. The Trustees have
initially implemented the Plans by authorizing the Funds to make quarterly
service fee payments to the Principal Underwriter and Authorized Firms in
amounts not expected to exceed 0.15% of each Fund's average daily net assets
attributable to both Class I and Class II shares based on the value of Fund
shares sold by such persons remaining outstanding for at least one year. For
the year ended March 31, 1998, Marathon California Limited Fund, Marathon
Connecticut Limited Fund, Marathon Florida Limited Fund, Marathon
Massachusetts Limited Fund, Marathon Michigan Limited Fund, Marathon New
Jersey Limited Fund, Marathon New York Limited Fund, Marathon Ohio Limited
Fund and Marathon Pennsylvania Limited Fund paid or accrued service fees to
or payable to EVD in the amount of $55,338, $16,288, $105,360, $87,199,
$19,758, $73,026, $133,748, $35,465 and $85,422, respectively. Service fee
payments are made for personal services and/or maintenance of shareholder
accounts.
Service fees paid to EVD and Authorized Firms 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) is imposed on any redemption of
Class I shares made within four years 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 Class I shares acquired by reinvestment of
dividends or capital gains distributions. The CDSC is imposed at declining
rates that begin at 3% in the case of redemptions in the first year of
purchase. No CDSC is levied on shares which have been sold to EVM or its
affiliates or to their respective employees or clients. CDSC charges are
paid to EVD to reduce the amount of Uncovered Distribution Charges
calculated under each Fund's Distribution Plan. CDSC charges received when
no Uncovered Distribution Charges exist will be credited to the Fund. EVD
received approximately $21,104, $15,752, $45,378, $50,926, $13,919, $41,617,
$85,313, $18,503 and $36,805, respectively, of CDSC paid by shareholders of
Marathon California Limited Fund, Marathon Connecticut Limited Fund,
Marathon Florida Limited Fund, Marathon Massachusetts Limited Fund, Marathon
Michigan Limited Fund, Marathon New Jersey Limited Fund, Marathon New York
Limited Fund, Marathon Ohio Limited Fund and Marathon Pennsylvania Limited
Fund for the year ended March 31, 1998.
7 Investment Transactions
- --------------------------------------------------------------------------------
Increases and decreases in each Fund's investment in its corresponding
Portfolio for the year ended March 31, 1998 were as follows:
Marathon California Limited Fund
----------------------------------------------------------------------------
Increases $ 452,909
Decreases 12,765,537
----------------------------------------------------------------------------
Marathon Connecticut Limited Fund
----------------------------------------------------------------------------
Increases $ 805,088
Decreases 3,789,806
----------------------------------------------------------------------------
Marathon Florida Limited Fund
----------------------------------------------------------------------------
Increases $ 1,197,194
Decreases 29,297,409
----------------------------------------------------------------------------
Marathon Massachusetts Limited Fund
----------------------------------------------------------------------------
Increases $ 3,215,092
Decreases 21,251,335
----------------------------------------------------------------------------
Marathon Michigan Limited Fund
----------------------------------------------------------------------------
Increases $ 990,311
Decreases 4,770,336
----------------------------------------------------------------------------
Marathon New Jersey Limited Fund
----------------------------------------------------------------------------
Increases $ 2,770,909
Decreases 19,228,625
----------------------------------------------------------------------------
Marathon New York Limited Fund
----------------------------------------------------------------------------
Increases $ 2,501,162
Decreases 35,031,478
----------------------------------------------------------------------------
Marathon Ohio Limited Fund
----------------------------------------------------------------------------
Increases $ 1,293,383
Decreases 6,534,574
----------------------------------------------------------------------------
Marathon Pennsylvania Limited Fund
----------------------------------------------------------------------------
Increases $ 2,364,786
Decreases 17,394,082
8 Subsequent Event
- --------------------------------------------------------------------------------
Effective April 1, 1998, the EV Marathon California Limited Maturity
Municipals Fund, EV Marathon Connecticut Limited Maturity Municipals Fund,
EV Marathon Florida Limited Maturity Municipals Fund, EV Marathon
Massachusetts Limited Maturity Municipals Fund, EV Marathon Michigan Limited
Maturity Municipals Fund, EV Marathon New Jersey Limited Maturity Municipals
Fund, EV Marathon New York Limited Maturity Municipals Fund, EV Marathon
Ohio Limited Maturity Municipals Fund and EV Marathon Pennsylvania Limited
Maturity Municipals Fund will change their respective names to Eaton Vance
California Limited Maturity Municipals Fund, Eaton Vance Connecticut Limited
Maturity Municipals Fund, Eaton Vance Florida Limited Maturity Municipals
Fund, Eaton Vance Massachusetts Limited Maturity Municipals Fund, Eaton
Vance Michigan Limited Maturity Municipals Fund, Eaton Vance New Jersey
Limited Maturity Municipals Fund, Eaton Vance New York Limited Maturity
Municipals Fund, Eaton Vance Ohio Limited Maturity Municipals Fund and Eaton
Vance Pennsylvania Limited Maturity Municipals Fund. Class I shares of the
Funds will be designated as Class B shares and Class II shares will be
designated as Class A shares.
<PAGE>
EV Marathon Limited Maturity Municipals Funds as of March 31, 1998
- -------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
- -------------------------------------------------------------------------------
To the Trustees and Shareholders of
Eaton Vance Investment Trust:
- -------------------------------------------------------------------------------
We have audited the accompanying statements of assets and liabilities of EV
Marathon California Limited Maturity Municipals Fund, EV Marathon Connecticut
Limited Maturity Municipals Fund, EV Marathon Florida Limited Maturity
Municipals Fund, EV Marathon Massachusetts Limited Maturity Municipals Fund,
EV Marathon Michigan Limited Maturity Municipals Fund, EV Marathon New Jersey
Limited Maturity Municipals Fund, EV Marathon New York Limited Maturity
Municipals Fund, EV Marathon Ohio Limited Maturity Municipals Fund, and EV
Marathon Pennsylvania Limited Maturity Municipals Fund, (the Funds) (series of
Eaton Vance Investment Trust) as of March 31, 1998, the related statements of
operations for the year then ended, the statements of changes in net assets
for the years ended March 31, 1998 and 1997 and the financial highlights for
each of the years in the five-year period ended March 31, 1998. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of each of the
aforementioned funds of Eaton Vance Investment Trust at March 31, 1998, and
the results of their operations, the changes in their net assets and their
financial highlights for the respective stated periods in conformity with
generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
May 1, 1998
<PAGE>
California Limited Maturities Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited)
- ---------------------------------- Principal
Standard Amount
Moody's & Poor's (000 omitted) Security Value
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cogeneration -- 7.8%
- --------------------------------------------------------------------------------------------------------------
NR BBB- $ 1,500 Central Valley Financing Authority,
Cogeneration, 5.20%, 7/1/99 $ 1,524,210
NR BBB- 1,000 Sacramento Cogeneration Authority, (Procter
& Gamble), 6.50%, 7/1/21 1,092,640
- --------------------------------------------------------------------------------------------------------------
$ 2,616,850
- --------------------------------------------------------------------------------------------------------------
Electric Utilities -- 3.2%
- --------------------------------------------------------------------------------------------------------------
A2 A+ $ 1,000 California Pollution Control Financing
Authority, (Southern California Edison Co.),
6.85%, 12/1/08 $ 1,055,800
- --------------------------------------------------------------------------------------------------------------
$ 1,055,800
- --------------------------------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 9.6%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 1,400 California Health Facilities, (Sisters of
Providence), Prerefunded to
10/1/00, 7.50%, 10/1/10 $ 1,541,904
NR AAA 1,500 San Bernadino, Certificates of Participation
Prerefunded to
8/1/01, 7.00%, 8/1/28 1,665,555
- --------------------------------------------------------------------------------------------------------------
$ 3,207,459
- --------------------------------------------------------------------------------------------------------------
Hospitals -- 2.4%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 400 Eastern Plumas, Health Care, (District
Hospital), 7.50%, 8/1/07 $ 410,180
NR BBB+ 400 Stockton, Health Facilities, (Dameron
Hospital), 5.70%, 12/1/14 408,864
- --------------------------------------------------------------------------------------------------------------
$ 819,044
- --------------------------------------------------------------------------------------------------------------
Housing -- 4.8%
- --------------------------------------------------------------------------------------------------------------
Aaa NR $ 1,500 Corona, Single Family Mortgage,
6.05%, 5/1/27 $ 1,588,905
- --------------------------------------------------------------------------------------------------------------
$ 1,588,905
- --------------------------------------------------------------------------------------------------------------
Industrial Development Revenue / Pollution Control Revenue -- 8.7%
- --------------------------------------------------------------------------------------------------------------
A3 A- $ 2,000 California Pollution Control Financing
Authority, (Browning Ferris Industries),
5.80%, 12/1/16 $ 2,098,800
Baa3 BBB- 750 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 815,588
- --------------------------------------------------------------------------------------------------------------
$ 2,914,388
- --------------------------------------------------------------------------------------------------------------
Insured - Electric Utilities -- 6.1%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Sacramento Municipal Utility District,
(AMBAC), 5.60%, 8/15/16 $ 1,054,830
Aaa AAA 1,000 Southern California Public Power Authority
Project, (AMBAC), 5.00%, 7/1/17 984,140
- --------------------------------------------------------------------------------------------------------------
$ 2,038,970
- --------------------------------------------------------------------------------------------------------------
Insured - General Obligations -- 14.2%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,080 Fillmore, Unified School District,
(FGIC), 0.00%, 7/1/15 $ 449,258
Aaa AAA 1,500 Mt. Diablo, School District
(AMBAC), 5.70%, 8/1/14 1,600,485
Aaa AAA 750 Puerto Rico Highway and Transportation
Authority, (AMBAC), 0.00%, 7/1/18 275,348
Aaa AAA 2,000 San Mateo County,
Transportation District, (MBIA), 5.00%, 6/1/13 2,042,620
Aaa AAA 705 Ukiah, Unified School District,
(FGIC), 0.00%, 8/1/10 393,228
- --------------------------------------------------------------------------------------------------------------
$ 4,760,939
- --------------------------------------------------------------------------------------------------------------
Insured - Hospitals -- 14.0%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,000 ABAG Finance Authority Certificates of
Participation, (Stanford University
Hospital), (MBIA),
5.125%, 11/1/05 $ 1,051,550
Aaa AAA 1,500 ABAG Finance Authority Certificates of
Participation, (Stanford University
Hospital), (MBIA),
4.90%, 11/1/03 1,554,750
Aaa AAA 1,900 Riverside County, (Riverside
County Hospital), (MBIA),
0.00%, 6/1/21 562,723
Aaa AAA 500 Riverside County, (Riverside
County Hospital, (MBIA),
5.00%, 6/1/19 488,475
Aaa AAA 1,000 Tri City, Hospital District, (MBIA),
5.625%, 2/15/17 1,040,970
- --------------------------------------------------------------------------------------------------------------
$ 4,698,468
- --------------------------------------------------------------------------------------------------------------
Insured - Lease Revenue / Certificates of Participation -- 5.8%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 500 California State Public Works Board,
(California Community College), (AMBAC),
5.625%, 3/1/16 $ 527,780
Aaa AAA 1,355 California State Public Works Board -
Department of Corrections (AMBAC), 5.25%,
12/1/13 1,418,468
- --------------------------------------------------------------------------------------------------------------
$ 1,946,248
- --------------------------------------------------------------------------------------------------------------
Insured - Transportation -- 5.4%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,250 San Francisco, City and County
Airports, (MBIA), 5.60%, 5/1/13 $ 1,305,550
Aaa AAA 1,000 San Joaquin Hills, Transportation
Corridor Agency Bridge & Toll Road, (MBIA),
0.00%, 1/15/12 506,810
- --------------------------------------------------------------------------------------------------------------
$ 1,812,360
- --------------------------------------------------------------------------------------------------------------
Lease Revenue/Certificates of Participation -- 3.0%
- --------------------------------------------------------------------------------------------------------------
NR A+ $ 1,000 California Statewide Communities Development
Authority, (San Gabriel Valley),
5.50%, 9/1/14 $ 1,026,270
- --------------------------------------------------------------------------------------------------------------
$ 1,026,270
- --------------------------------------------------------------------------------------------------------------
Nursing Homes -- 8.7%
- --------------------------------------------------------------------------------------------------------------
NR BBB $ 750 ABAG Finance Authority
(American Baptist Homes),
5.75%, 10/1/17 $ 773,243
NR A+ 2,000 California Statewide Communities Development
Corporation, (Pacific Homes), 5.90%, 4/1/09 2,128,319
- --------------------------------------------------------------------------------------------------------------
$ 2,901,562
- --------------------------------------------------------------------------------------------------------------
Water and Sewer -- 6.3%
- --------------------------------------------------------------------------------------------------------------
A1 A $ 2,000 Los Angeles City Wastewater System,
6.90%, 6/1/08(1) $ 2,100,220
- --------------------------------------------------------------------------------------------------------------
$ 2,100,220
- --------------------------------------------------------------------------------------------------------------
Total Tax Exempt Investments -- 100.0%
(identified cost $31,771,731) $ 33,487,483
- --------------------------------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by California
municipalities. The ability of the issuers of the debt securities to meet
their obligations may be affected by economic developments in a specific
industry or municipality. In order to reduce the risk associated with such
economic developments, at March 31, 1998, 45.5% 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 by financial institution range from 2.5% to 25.9% of total
investments.
(1) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
<PAGE>
Connecticut Limited Maturity Muncipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited)
- ---------------------------------- Principal
Standard Amount
Moody's & Poor's (000 omitted) Security Value
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Colleges and Universities -- 15.0%
- --------------------------------------------------------------------------------------------------------------
Baa3 BBB- $ 140 Connecticut State Health and Educational
Facilities Authority, (Sacred Heart
University), 6.00%, 7/1/08 $ 150,702
Baa1 BBB+ 750 Connecticut Health and Educational Facilities
Authority, (Fairfield University),
6.90%, 7/1/14 777,374
NR BBB- 500 Connecticut Health and Educational Facilities
Authority, (Quinnipiac College),
6.00%, 7/1/13 517,144
- --------------------------------------------------------------------------------------------------------------
$ 1,445,220
- --------------------------------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 2.8%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 250 South Central Connecticut Regional Water
Authority (AMBAC), Prerefunded to 8/1/01,
6.50%, 8/1/07(1) $ 273,153
- --------------------------------------------------------------------------------------------------------------
$ 273,153
- --------------------------------------------------------------------------------------------------------------
General Obligations -- 11.7%
- --------------------------------------------------------------------------------------------------------------
Aa1 NR $ 200 Avon, 5.00%, 1/15/12 $ 205,206
Aa3 AA- 190 Connecticut State,
0.00%, 11/15/10 105,574
Aa3 AA- 150 Connecticut State,
5.125%, 8/15/11 153,330
Aa2 AA 100 Danbury, 5.00%, 8/1/17 99,015
Baa1 A 500 Puerto Rico Aqueduct and Sewer Authority,
5.00%, 7/1/19 487,815
Baa1 A 115 Puerto Rico Commonwealth,
0.00%, 7/1/08 72,587
- --------------------------------------------------------------------------------------------------------------
$ 1,123,527
- --------------------------------------------------------------------------------------------------------------
Hospitals -- 6.5%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 555 Connecticut Health and Educational Facilities
Authority, (New Britain Hospital),
7.50%, 7/1/06 $ 620,667
- --------------------------------------------------------------------------------------------------------------
$ 620,667
- --------------------------------------------------------------------------------------------------------------
Industrial Development Revenue / Pollution Control Revenue -- 12.1%
- --------------------------------------------------------------------------------------------------------------
A1 NR $ 625 Connecticut Development Authority, (Frito
Lay), 6.375%, 7/1/04 $ 635,343
Baa3 BBB- 250 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 271,863
A3 A- 250 Sprague, Environmental Improvement Revenue,
(International Paper Co.), (AMT),
5.70%, 10/1/21 259,338
- --------------------------------------------------------------------------------------------------------------
$ 1,166,544
- --------------------------------------------------------------------------------------------------------------
Insured - Colleges and Universities -- 2.5%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 240 University of Connecticut, (FGIC),
5.00%, 2/1/15 $ 238,097
- --------------------------------------------------------------------------------------------------------------
$ 238,097
- --------------------------------------------------------------------------------------------------------------
Insured - Education -- 4.1%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 400 Connecticut Health and Educational Facilities
Authority, (Choate Rosemary Hall), (MBIA),
5.00%, 7/1/14 $ 398,208
- --------------------------------------------------------------------------------------------------------------
$ 398,208
- --------------------------------------------------------------------------------------------------------------
Insured - Electric Utilities -- 2.9%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 250 Connecticut Municipal Electric Authority,
(MBIA), 6.00%, 1/1/07 $ 278,388
- --------------------------------------------------------------------------------------------------------------
$ 278,388
- --------------------------------------------------------------------------------------------------------------
Insured - General Obligations -- 13.6%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 250 Brandford, (FGIC),
5.40%, 2/15/14(1) $ 256,983
Aaa AAA 500 Bridgeport, (AMBAC),
6.00%, 9/1/06 554,999
Aaa AAA 500 Old Saybrook, (AMBAC),
4.10%, 8/15/01 501,700
- --------------------------------------------------------------------------------------------------------------
$ 1,313,682
- --------------------------------------------------------------------------------------------------------------
Insured - Hospitals -- 12.7%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 150 Connecticut Authority, (Greenwich Hospital),
(MBIA), 5.75%, 7/1/06 $ 163,655
Aaa NR 300 Connecticut State Health and Educational
Facilities Authority, (Middlesex Health
Services), (MBIA), 5.125%, 7/1/17 296,541
Aaa AAA 470 Connecticut Health and Educational Facilities
Authority, (St. Raphael Hospital), (AMBAC),
5.10%, 7/1/07 492,198
Aaa AAA 250 Connecticut Health and Educational Facilities
Authority, (Stamford Hospital), (MBIA),
6.50%, 7/1/06 271,328
- --------------------------------------------------------------------------------------------------------------
$ 1,223,722
- --------------------------------------------------------------------------------------------------------------
Insured - Miscellaneous -- 2.8%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 250 Woodstock, Special Obligation Bonds, (AMBAC),
7.00%, 3/1/07 $ 270,470
- --------------------------------------------------------------------------------------------------------------
$ 270,470
- --------------------------------------------------------------------------------------------------------------
Insured - Transportation -- 9.1%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 750 Connecticut State Airport (Bradley
International Airport), (FGIC),
7.40%, 10/1/04 $ 879,427
- --------------------------------------------------------------------------------------------------------------
$ 879,427
- --------------------------------------------------------------------------------------------------------------
Solid Waste -- 2.6%
- --------------------------------------------------------------------------------------------------------------
NR BBB $ 250 Eastern Connecticut Resources Recovery
Authority, (Wheelabrator Lisbon), (AMT),
5.00%, 1/1/03 $ 252,400
- --------------------------------------------------------------------------------------------------------------
$ 252,400
- --------------------------------------------------------------------------------------------------------------
Water and Sewer -- 1.6%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 150 Connecticut State Clean Water Fund,
4.875%, 5/1/09 $ 153,365
- --------------------------------------------------------------------------------------------------------------
$ 153,365
- --------------------------------------------------------------------------------------------------------------
Total Tax Exempt Investments -- 100.0%
(identified cost $9,154,495) $ 9,636,870
- --------------------------------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securitites issued by Connecticut
municipalities. The ability of the issuers of the debt securities to meet
their obligations may be affected by economic developments in a specific
industry or municipality. In order to reduce the risk associated with such
economic developments, at March 31, 1998, 50.6% of the securities in the
portfolio of investments are backed by bond insurance of various financial
institutions and financial guaranty assurance agencies. The aggregate
percentage by financial institution range from 11.7% to 21.9% of total
investments.
(1) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
<PAGE>
Florida Limited Maturity Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited)
- ---------------------------------- Principal
Standard Amount
Moody's & Poor's (000 omitted) Security Value
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cogeneration -- 1.1%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 500 Palm Beach County, Okeelanta
Power Project, (AMT),
6.85%, 2/15/21 $ 400,000
NR NR 500 Palm Beach County, Osceola
Power Project, (AMT),
6.95%, 1/1/22 395,000
- --------------------------------------------------------------------------------------------------------------
$ 795,000
- --------------------------------------------------------------------------------------------------------------
Electric Utilities -- 12.1%
- --------------------------------------------------------------------------------------------------------------
Aa AA $ 3,000 Gainesville, Utility System
Revenue, 5.00%, 10/1/15 $ 2,965,529
Aa1 AA 1,000 Jacksonville Electric Authority,
(St. Johns River Power Park), 5.25%, 10/1/20 993,470
Aa1 AA 2,500 Jacksonville, Electric Authority,
(St. Johns River Power Park),
5.375%, 10/1/16 2,556,375
Aa AA- 2,000 Tallahassee, Electric Refunding Bonds,
5.90%, 10/1/05 2,160,980
- --------------------------------------------------------------------------------------------------------------
$ 8,676,354
- --------------------------------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 17.7%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,015 Dade County, Educational Facilities
Authority, (MBIA) Prerefunded to 10/1/01,
7.00%, 10/1/08 $ 1,128,558
Aaa AAA 1,500 Dade County Local School District, (FGIC),
Prerefunded to 8/1/01, 6.00%, 8/1/06 1,590,015
Aaa AAA 1,500 Florida Department of Natural Resources,
Preservation 2000, (MBIA), Prerefunded to
7/1/98, 7.25%, 7/1/08 1,543,185
Aaa AAA 1,450 Hillsborough County, Aviation Authority,
(Tampa International Airport), (FGIC),
Prerefunded to 10/01/99, 6.85%, 10/1/06 1,544,323
Aaa AAA 4,000 Jacksonville Health Facilities Authority,
(Baptist Medical Center), (MBIA), 7.25%,
6/1/05(1)(2) 4,239,679
Aa2 AA- 1,250 Orlando Utility Community Water and
Electric, Prerefunded to
10/1/01, 6.50%, 10/1/20 1,370,513
Baa1 AAA 1,250 Puerto Rico Aqueduct and Sewer Authority,
Prerefunded to 7/1/98, 7.875%, 7/1/17 1,287,850
- --------------------------------------------------------------------------------------------------------------
$ 12,704,123
- --------------------------------------------------------------------------------------------------------------
General Obligations -- 18.5%
- --------------------------------------------------------------------------------------------------------------
Aa2 AA $ 1,000 Florida Department of Transportation,
5.00%, 7/1/18 $ 986,140
Aa2 AA+ 2,750 Florida State Board of Education,
5.00%, 6/1/14 2,749,808
Aa2 AA+ 1,000 Florida State Board of Education,
5.00%, 6/1/15 989,710
Aa2 AA+ 3,000 Florida State Board of Education,
5.55%, 6/1/11 3,185,189
Baa1 A 1,050 Puerto Rico Commonwealth,
0.00%, 7/1/08 662,750
Baa1 A- 2,000 Puerto Rico Municipal Finance Agency,
5.50%, 7/1/01 2,085,180
Baa1 A 1,000 Puerto Rico Public Building Authority,
6.50%, 7/1/03 1,097,260
NR NR 1,500 Virgin Islands Public Finance Authority,
(Matching Loan Fund Notes), 6.80%, 10/1/00 1,589,970
- --------------------------------------------------------------------------------------------------------------
$ 13,346,007
- --------------------------------------------------------------------------------------------------------------
Hospitals -- 4.9%
- --------------------------------------------------------------------------------------------------------------
NR BBB+ $ 1,250 Escambia County, Health
Facilities Authority, (Baptist Hospital,
Inc. and Baptist Manor, Inc.), 6.00%, 10/1/14 $ 1,318,588
Baa1 NR 425 Jacksonville Health Facilities Authority,
(National Benevolent Association - Cypress
Village), 6.00%, 12/1/98 430,899
Baa1 NR 450 Jacksonville Health Facilities Authority,
(National Benevolent Association - Cypress
Village), 6.25%, 12/1/99 466,029
Baa1 NR 480 Jacksonville Health Facilities Authority,
(National Benevolent Association - Cypress
Village), 6.50%, 12/1/00 507,048
NR BBB 355 Valley, AL Special Care Facilities Financing
Authority, (Lanier Memorial HospItal),
5.00%, 11/1/03 357,648
NR BBB 455 Valley, AL Special Care Facilities Financing
Authority, (Lanier Memorial Hospital),
5.00%, 11/1/04 457,389
- --------------------------------------------------------------------------------------------------------------
$ 3,537,601
- --------------------------------------------------------------------------------------------------------------
Housing -- 0.9%
- --------------------------------------------------------------------------------------------------------------
NR A $ 425 Clearwater, Housing Authority, (Hamptons at
Clearwater), 5.40%, 5/1/13 $ 434,686
Baa BBB 200 Puerto Rico Housing Bank and Finance Agency,
5.10%, 12/1/03 204,956
- --------------------------------------------------------------------------------------------------------------
$ 639,642
- --------------------------------------------------------------------------------------------------------------
Industrial Development Revenue / Pollution Control Revenue -- 3.0%
- --------------------------------------------------------------------------------------------------------------
Baa2 BBB $ 2,000 Polk County, Industrial Development
Authority, (IMC Fertilizer), (AMT),
7.525%, 1/1/15 $ 2,164,180
- --------------------------------------------------------------------------------------------------------------
$ 2,164,180
- --------------------------------------------------------------------------------------------------------------
Insured - Cogeneration -- 2.9%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 2,000 Dade County, Resource Recovery Facilities,
(AMBAC) (AMT), 5.30%, 10/1/07 $ 2,117,820
- --------------------------------------------------------------------------------------------------------------
$ 2,117,820
- --------------------------------------------------------------------------------------------------------------
Insured - Electric Utilities -- 2.4%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,750 Dade County, Water and Sewer System, (FGIC),
5.25%, 10/1/21 $ 1,756,003
- --------------------------------------------------------------------------------------------------------------
$ 1,756,003
- --------------------------------------------------------------------------------------------------------------
Insured - General Obligations -- 3.5%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 2,000 Dade County Local School District, (MBIA),
5.00%, 2/15/15 $ 1,981,900
Aaa AAA 520 Dade County, FL, (MBIA),
0.00%, 10/1/06 352,399
Aaa AAA 330 Dade County, FL, (MBIA),
0.00%, 10/1/08 201,785
- --------------------------------------------------------------------------------------------------------------
$ 2,536,084
- --------------------------------------------------------------------------------------------------------------
Insured - Hospitals -- 8.5%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 2,500 Naples, FL, (Naples Community Hospital
Inc.), (MBIA),
5.50%, 10/1/16 $ 2,580,525
Aaa AAA 2,450 North Broward, Hospital District, (MBIA),
5.25%, 1/15/17 2,463,843
Aaa AAA $ 1,000 Orange County Health Facilities Authority,
(Adventist Health System/Sunbelt Inc,),
(FSA), 5.50%, 11/15/02 1,056,200
- --------------------------------------------------------------------------------------------------------------
$ 6,100,568
- --------------------------------------------------------------------------------------------------------------
Insured - Housing -- 3.5%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,240 Florida Housing Finance Agency, (Leigh
Meadows Apartments), (AMBAC), 5.85%, 9/1/10 $ 1,318,492
Aaa AAA 1,140 Florida Housing Finance Agency, (Stottert
Arms Apartments), (AMBAC), 5.90%, 9/1/10 1,211,045
- --------------------------------------------------------------------------------------------------------------
$ 2,529,537
- --------------------------------------------------------------------------------------------------------------
Insured - Industrial Development Revenue -- 2.2%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,500 Pinellas County Resource Recovery, (MBIA),
5.125%, 10/1/04 $ 1,563,915
- --------------------------------------------------------------------------------------------------------------
$ 1,563,915
- --------------------------------------------------------------------------------------------------------------
Insured - Lease Revenue / Certificates of Participation -- 1.5%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Palm Beach County, Criminal
Justice Facilities, (FGIC),
5.375%, 6/1/10 $ 1,070,080
- --------------------------------------------------------------------------------------------------------------
$ 1,070,080
- --------------------------------------------------------------------------------------------------------------
Insured - Special Tax Revenue -- 2.1%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,500 Orange County, Tourist Development Tax,
(MBIA), 5.00%, 10/1/14 $ 1,500,000
- --------------------------------------------------------------------------------------------------------------
$ 1,500,000
- --------------------------------------------------------------------------------------------------------------
Insured - Transportation -- 5.2%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 2,000 Dade County, Seaport Revenue, (MBIA),
5.125%, 10/1/16 $ 2,002,420
Aaa AAA 1,670 Hillsborough County, Aviation Authority,
(Tampa International Airport), (FGIC),
6.85%, 10/1/06 1,774,909
- --------------------------------------------------------------------------------------------------------------
$ 3,777,329
- --------------------------------------------------------------------------------------------------------------
Insured - Water and Sewer -- 7.5%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 2,000 Dade County, Water and Sewer Revenue,
(FGIC), 5.25%, 10/1/11 $ 2,082,420
Aaa AAA 2,000 Manatee County, Public Utilities, (MBIA),
6.75%, 10/1/04 2,287,480
Aaa AAA 1,000 Pasco County, Water and Sewer
Revenue, (FGIC),
5.40%, 10/1/03 1,061,410
- --------------------------------------------------------------------------------------------------------------
$ 5,431,310
- --------------------------------------------------------------------------------------------------------------
Nursing Homes -- 1.9%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 350 Citrus County, Industrial Development
Authority, (Beverly Enterprises),
5.00%, 4/1/03(3) $ 350,308
NR NR 1,000 Volusia County, (Beverly Enterprises),
5.875%, 7/1/07 1,010,040
- --------------------------------------------------------------------------------------------------------------
$ 1,360,348
- --------------------------------------------------------------------------------------------------------------
Solid Waste -- 0.6%
- --------------------------------------------------------------------------------------------------------------
NR A- $ 405 Union County, Utilities Authority, (AMT),
7.20%, 6/15/14 $ 405,757
- --------------------------------------------------------------------------------------------------------------
$ 405,757
- --------------------------------------------------------------------------------------------------------------
Total Tax Exempt Investments -- 100.0%
(identified cost $68,566,219) $ 72,011,658
- --------------------------------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Florida
municipalities. The ability of issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments at March 31, 1998, 53.4% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution range from 1.5% to 30.3% of total investments.
(1) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
(2) Security has been segregated to cover when-issued securities.
(3) When-issued security.
<PAGE>
Massachusetts Limited Maturity Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited)
- ---------------------------------- Principal
Standard Amount
Moody's & Poor's (000 omitted) Security Value
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Education -- 5.1%
- --------------------------------------------------------------------------------------------------------------
A1 NR $ 1,200 Massachusetts Health and Educational
Facilities Authority, (Tufts University),
7.40%, 8/1/18 $ 1,238,580
Baa3 BBB- 500 Massachusetts Industrial Finance Agency,
(Dana Hall), 5.90%, 7/1/27 525,435
A3 NR 1,030 Massachusetts Industrial Finance Agency,
(Park School), 5.50%, 9/1/16 1,069,676
- --------------------------------------------------------------------------------------------------------------
$ 2,833,691
- --------------------------------------------------------------------------------------------------------------
Electric Utilities -- 1.9%
- --------------------------------------------------------------------------------------------------------------
Baa2 BBB+ $ 1,000 Massachusetts Municipal Wholesale Electric
Co., 5.70%, 7/1/01 $ 1,045,520
- --------------------------------------------------------------------------------------------------------------
$ 1,045,520
- --------------------------------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 9.0%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 935 Massachusetts Health and Educational
Facilities Authority, (Fairview Extended
Care), Prerefunded to 1/1/01,
10.125%, 1/1/11 $ 1,103,796
Baa2 BB+ 960 Massachusetts Health and Educational
Facilities Authority, (Milford-Whitinsville
Regional Hospital), Escrowed to Maturity,
7.125%, 7/15/02 1,022,563
Baa2 BBB 500 Massachusetts Health and Educational
Facilities Authority, (Sisters of Providence
Hospital), Escrowed to Maturity,
6.00%, 11/15/00 524,225
Aaa AAA 400 Massachusetts Turnpike Authority, (FGIC),
Escrowed to Maturity, 5.125%, 1/1/23 408,916
Aaa NR 2,000 Massachusetts Turnpike Authority, Escrowed
to Maturity, 5.00%, 1/1/20 1,993,840
- --------------------------------------------------------------------------------------------------------------
$ 5,053,340
- --------------------------------------------------------------------------------------------------------------
General Obligations -- 12.6%
- --------------------------------------------------------------------------------------------------------------
Aa2 NR $ 500 Burlington, 5.00%, 2/1/15 $ 506,800
Aa2 NR 500 Burlington, 5.00%, 2/1/16 505,275
A1 AA- 1,260 Massachusetts Bay Transportation Authority,
5.50%, 3/1/08 1,354,626
A1 AA- 1,000 Massachusetts Bay Transportation Authority,
5.75%, 3/1/18 1,097,350
A1 AA- 1,500 Massachusetts Commonwealth, 5.40%, 11/1/06 1,601,790
A1 AA- 1,000 Massachusetts Commonwealth, 5.00%, 11/1/14 992,170
Baa1 A 1,000 Puerto Rico Aqueduct and Sewer Authority,
5.00%, 7/1/19 975,630
- --------------------------------------------------------------------------------------------------------------
$ 7,033,641
- --------------------------------------------------------------------------------------------------------------
Hospitals -- 14.0%
- --------------------------------------------------------------------------------------------------------------
Ba1 NR $ 860 Massachusetts Health and Educational
Facilities Authority,
(New England Health Systems),
6.125%, 8/1/13 $ 900,979
Aa2 AA+ 3,000 Massachusetts Health and Educational
Facilities Authority, (Daughters of Charity
Issue), 5.75%, 7/1/02 3,176,070
Baa2 BBB- 750 Massachusetts Health And Educational
Facilities Authority, (Milford-Whitinsville
Regional Hospital), 4.90%, 7/15/06 748,680
Baa2 BBB- 1,000 Massachusetts Health And Educational
Facilities Authority, (Milford-Whitinsville
Regional Hospital), 5.75%, 7/15/13 1,048,930
NR BBB- 1,845 Massachusetts Health and Educational
Facilities Authority, (North Adams Regional
Hospital), 6.25%, 7/1/04 1,981,641
- --------------------------------------------------------------------------------------------------------------
$ 7,856,300
- --------------------------------------------------------------------------------------------------------------
Insured - Education -- 1.9%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,015 Massachusetts Industrial Finance Agency
Revenue, (Dexter School), (MBIA),
5.40%, 5/1/13 $ 1,051,804
- --------------------------------------------------------------------------------------------------------------
$ 1,051,804
- --------------------------------------------------------------------------------------------------------------
Insured - Electric Utilities -- 4.0%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 2,000 Massachusetts Municipal
Wholesale Electric Co., (AMBAC),
6.625%, 7/1/03(1) $ 2,216,200
- --------------------------------------------------------------------------------------------------------------
$ 2,216,200
- --------------------------------------------------------------------------------------------------------------
Insured - General Obligations -- 10.9%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Haverhill, (FGIC), 5.00%, 6/15/17 $ 984,160
Aaa AAA 1,000 Massachusetts Bay Transportation Authority,
(FGIC), 5.00%, 3/1/19 978,380
Aaa AAA 2,000 Massachusetts Bay Transportation Authority,
Series B, (AMBAC), 5.25%, 3/1/11 2,066,040
Aaa AAA 1,000 Massachusetts Commonwealth, (AMBAC),
5.00%, 7/1/12 1,024,560
Aaa AAA 1,000 Massachusetts Commonwealth, (FGIC),
6.50%, 6/1/01 1,072,890
- --------------------------------------------------------------------------------------------------------------
$ 6,126,030
- --------------------------------------------------------------------------------------------------------------
Insured - Hospitals -- 2.7%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,500 Massachusetts Health and Educational
Facilities Authority, (Lowell General
Hospital), Series B, (FSA), 5.25%, 6/1/16 $ 1,507,440
- --------------------------------------------------------------------------------------------------------------
$ 1,507,440
- --------------------------------------------------------------------------------------------------------------
Insured - Housing -- 8.3%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 4,300 Massachusetts Housing Finance Agency,
(Harborpoint Development), (AMBAC), (AMT),
6.20%, 12/1/10 $ 4,657,071
- --------------------------------------------------------------------------------------------------------------
$ 4,657,071
- --------------------------------------------------------------------------------------------------------------
Insured - Industrial Development Revenue /Pollution Control Revenue -- 2.6%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,400 Massachusetts Industrial Finance Agency,
(Nantucket Electric), (AMBAC), (AMT),
5.30%, 7/1/04 $ 1,466,934
- --------------------------------------------------------------------------------------------------------------
$ 1,466,934
- --------------------------------------------------------------------------------------------------------------
Insured - Water and Sewer -- 7.5%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Lynn, Water And Sewer Commission, (FSA),
5.00%, 12/1/13 $ 991,360
Aaa AAA 2,230 Massachusetts Water Resources Authority,
(MBIA), 5.00%, 12/1/16 2,203,195
Aaa AAA 1,000 Massachusetts Water Resources Authority,
(MBIA), 5.00%, 8/1/15 990,780
- --------------------------------------------------------------------------------------------------------------
$ 4,185,335
- --------------------------------------------------------------------------------------------------------------
Lease Revenue /Certificates of Participation -- 3.1%
- --------------------------------------------------------------------------------------------------------------
NR BBB $ 1,650 Puerto Rico, ITEM & ECFA, (Guaynabo
Municipal Government), 5.375%, 7/1/06 $ 1,748,456
- --------------------------------------------------------------------------------------------------------------
$ 1,748,456
- --------------------------------------------------------------------------------------------------------------
Nursing Homes -- 1.9%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 1,000 Massachusetts Industrial Finance Agency,
(Age Institute of Massachusetts),
7.60%, 11/1/05 $ 1,070,200
- --------------------------------------------------------------------------------------------------------------
$ 1,070,200
- --------------------------------------------------------------------------------------------------------------
Special Tax Revenue -- 6.8%
- --------------------------------------------------------------------------------------------------------------
Aa3 AA $ 1,000 Massachusetts Special Obligations,
5.00%, 6/1/17 $ 981,790
Aa3 AA 500 Massachusetts Special Obligations,
5.00%, 6/1/14 507,745
Baa1 A 500 Puerto Rico Highway and Transportation
Authority, 5.50%, 7/1/15 528,625
NR NR 1,750 Virgin Islands Public Finance Authority,
(Matching Loan Fund Notes), 6.70%, 10/1/99 1,818,005
- --------------------------------------------------------------------------------------------------------------
$ 3,836,165
- --------------------------------------------------------------------------------------------------------------
Transportation -- 2.0%
- --------------------------------------------------------------------------------------------------------------
A1 AA- $ 1,000 Woods Hole, (Martha's Vineyard and Nantucket
Steamship Authority), 6.60%, 3/1/03 $ 1,101,840
- --------------------------------------------------------------------------------------------------------------
$ 1,101,840
- --------------------------------------------------------------------------------------------------------------
Water and Sewer -- 5.7%
- --------------------------------------------------------------------------------------------------------------
Aa2 A+ $ 2,100 Massachusetts Water Pollution Abatement
Trust, 5.25%, 8/1/14 $ 2,153,256
Aa3 AA+ 1,000 Massachusetts Water Pollution Abatement
Trust, 5.25%, 8/1/14 1,019,100
- --------------------------------------------------------------------------------------------------------------
$ 3,172,356
- --------------------------------------------------------------------------------------------------------------
Total Tax Exempt Investments -- 100.0%
(identified cost $53,095,573) $ 55,962,323
- --------------------------------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Massachusetts
municipalities. The ability of issuers of debt to meet their obligations may
be affected by economic developments in a specific industry or municipality.
In order to reduce the risk associated with such economic developments, at
March 31, 1998, 38.6% of the securities in the portfolio of investments are
backed by bond insurance of various financial institutions and financial
guaranty assurance agencies. The aggregate percentage by financial institution
range from 4.5% to 20.4% of total investments.
(1) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
<PAGE>
Michigan Limited Maturity Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited)
- ---------------------------------- Principal
Standard Amount
Moody's & Poor's (000 omitted) Security Value
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Economic Development Revenue -- 1.3%
- --------------------------------------------------------------------------------------------------------------
NR BB- $ 150 Michigan State Strategic Fund (Crown Paper),
6.25%, 8/1/12 $ 154,905
- --------------------------------------------------------------------------------------------------------------
$ 154,905
- --------------------------------------------------------------------------------------------------------------
Education -- 2.0%
- --------------------------------------------------------------------------------------------------------------
Aa2 NR $ 250 Oakland County, (Cranbrook Educational
Community Project), 5.00%, 11/1/17 $ 248,140
- --------------------------------------------------------------------------------------------------------------
$ 248,140
- --------------------------------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 14.5%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Grand Ledge, Public School District, (MBIA),
Prerefunded to 5/1/04, 7.875%, 5/1/11(1) $ 1,206,460
Aa1 AA+ 500 Michigan Municipal Bond Authority, Escrowed
to Maturity, 7.00%, 10/1/02 558,055
- --------------------------------------------------------------------------------------------------------------
$ 1,764,515
- --------------------------------------------------------------------------------------------------------------
General Obligations -- 10.3%
- --------------------------------------------------------------------------------------------------------------
Baa2 BBB+ $ 650 Detroit, MI, 6.25%, 4/1/05 $ 711,133
Baa2 BBB+ 495 Detroit, MI, 6.40%, 4/1/05 545,945
- --------------------------------------------------------------------------------------------------------------
$ 1,257,078
- --------------------------------------------------------------------------------------------------------------
Hospitals -- 12.8%
- --------------------------------------------------------------------------------------------------------------
Baa1 NR $ 525 Flint, Hospital Authority, (Hurley Medical
Center), 6.00%, 7/1/05 $ 561,157
NR BBB 100 Michigan Hospital Finance Authority,
(Central MI Community Hospital),
6.00%, 10/1/05 107,745
NR BBB 100 Michigan Hospital Finance Authority,
(Central MI Community Hospital),
6.10%, 10/1/06 108,914
NR BBB 225 Michigan Hospital Finance Authority,
(Central MI Community Hospital),
6.20%, 10/1/07 247,725
NR BBB 500 Michigan Hospital Finance Authority (Gratiot
Community Hospital), 6.10%, 10/1/07 539,310
- --------------------------------------------------------------------------------------------------------------
$ 1,564,851
- --------------------------------------------------------------------------------------------------------------
Industrial Development Revenue / PollutionControl Revenue -- 5.5%
- --------------------------------------------------------------------------------------------------------------
Baa3 BBB- $ 500 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 $ 543,725
NR BB 120 Richmond, Economic Development Corp., (K-
MART), 6.30%, 1/1/99 121,300
- --------------------------------------------------------------------------------------------------------------
$ 665,025
- --------------------------------------------------------------------------------------------------------------
Insured - Colleges and Universities -- 2.0%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 250 Michigan State University, Agriculture and
Applied Sciences, (AMBAC), 5.125%, 2/15/16 $ 249,290
- --------------------------------------------------------------------------------------------------------------
$ 249,290
- --------------------------------------------------------------------------------------------------------------
Insured - General Obligations -- 17.2%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 500 Detroit, School District, (AMBAC),
6.50%, 5/1/10 $ 582,985
Aaa AAA 500 Hartland, School District, (FGIC),
5.125%, 5/1/17 497,330
Aaa AAA 500 Kalamazoo, (MBIA),
5.40%, 5/1/14 528,720
Aaa AAA 500 Willow Run, Community School District,
(AMBAC), 5.00%, 5/1/16 492,375
- --------------------------------------------------------------------------------------------------------------
$ 2,101,410
- --------------------------------------------------------------------------------------------------------------
Insured - Industrial Development Revenue /Pollution Control Revenue -- 4.5%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 500 Monroe County (The Detroit
Edison Co.), (AMBAC), (AMT),
6.35%, 12/1/04 $ 553,670
- --------------------------------------------------------------------------------------------------------------
$ 553,670
- --------------------------------------------------------------------------------------------------------------
Insured - Lease Revenue / Certificates of
Participation -- 1.5%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 300 Michigan Building Authority, Facilities
Program, (AMBAC), 0.00%, 10/15/08 $ 185,001
- --------------------------------------------------------------------------------------------------------------
$ 185,001
- --------------------------------------------------------------------------------------------------------------
Lease Revenue/Certificates of Participation -- 4.4%
- --------------------------------------------------------------------------------------------------------------
Aa3 AA $ 500 Michigan Building Authority,
6.10%, 10/1/01 $ 532,635
- --------------------------------------------------------------------------------------------------------------
$ 532,635
- --------------------------------------------------------------------------------------------------------------
Life Care -- 2.6%
- --------------------------------------------------------------------------------------------------------------
NR BBB $ 300 Kalamazoo, (Friendship Village),
6.125%, 5/15/17 $ 318,375
- --------------------------------------------------------------------------------------------------------------
$ 318,375
- --------------------------------------------------------------------------------------------------------------
Miscellaneous -- 1.3%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 150 Pittsfield Township, EDC,
(Arbor Hospice Project),
7.875%, 8/15/27 $ 158,339
- --------------------------------------------------------------------------------------------------------------
$ 158,339
- --------------------------------------------------------------------------------------------------------------
Nursing Homes -- 3.5%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 395 Michigan Hospital Finance
Authority, (Presbyterian Villages),
6.20%, 1/1/06 $ 424,846
- --------------------------------------------------------------------------------------------------------------
$ 424,846
- --------------------------------------------------------------------------------------------------------------
Solid Waste -- 3.1%
- --------------------------------------------------------------------------------------------------------------
Ba1 BBB- $ 350 Central Wayne, Sanitation Authority,
6.40%, 7/1/06 $ 371,415
- --------------------------------------------------------------------------------------------------------------
$ 371,415
- --------------------------------------------------------------------------------------------------------------
Special Tax Revenue -- 13.5%
- --------------------------------------------------------------------------------------------------------------
NR BBB+ $ 1,000 Battle Creek, Downtown
Development Authority,
6.65%, 5/1/02 $ 1,083,600
NR A- 2,000 Detroit, Downtown Development Authority Tax
Increment,
0.00%, 7/1/21 555,060
- --------------------------------------------------------------------------------------------------------------
$ 1,638,660
- --------------------------------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $11,228,522) $ 12,188,155
- --------------------------------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Michigan
municipalities. The ability of the issuers of the debt securities to meet
their obligations may be affected by the economic developments in a specific
industry or municipality. In order to reduce the risk associated with such
economic developments, at March 31, 1998, 35.2% of such securities in the
portfolio of investments are backed by bond insurance of various financial
institutions and financial guaranty assurance agencies. The aggregate
percentage by financial institution range from 4.1% to 16.9% of total
investments.
(1) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
<PAGE>
New Jersey Limited Maturity Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited)
- ---------------------------------- Principal
Standard Amount
Moody's & Poor's (000 omitted) Security Value
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Airlines -- 4.0%
- --------------------------------------------------------------------------------------------------------------
Baa3 BBB- $ 1,625 Port Authority of New York and
New Jersey, (Delta Airlines),
6.95%, 6/1/08 $ 1,783,990
- --------------------------------------------------------------------------------------------------------------
$ 1,783,990
- --------------------------------------------------------------------------------------------------------------
Assisted Living -- 1.6%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 650 New Jersey EDA, (Chelsea
at East Brunswick), (AMT),
8.00%, 10/1/07 $ 720,012
- --------------------------------------------------------------------------------------------------------------
$ 720,012
- --------------------------------------------------------------------------------------------------------------
Cogeneration -- 9.5%
- --------------------------------------------------------------------------------------------------------------
NR BBB- $ 2,250 New Jersey EDA, Heating and Cooling,
(Trigen-Trenton), (AMT), 6.10%, 12/1/05 $ 2,424,982
NR BB+ 1,135 New Jersey EDA, (Vineland Cogeneration),
(AMT), 7.875%, 6/1/19 1,249,692
NR NR 550 Port Authority of New York and New Jersey,
(KIAC Project), (AMT), 6.50%, 10/1/01 584,892
- --------------------------------------------------------------------------------------------------------------
$ 4,259,566
- --------------------------------------------------------------------------------------------------------------
Education -- 2.2%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,000 New Jersey Educational Facilities Authority,
(Princeton Theological), 5.00%, 7/1/22 $ 999,920
- --------------------------------------------------------------------------------------------------------------
$ 999,920
- --------------------------------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 2.2%
- --------------------------------------------------------------------------------
Aaa NR $ 2,030 New Jersey EDA (Princeton Custodial
Receipts), Escrowed to Maturity,
0.00%, 12/15/12 $ 975,638
- --------------------------------------------------------------------------------------------------------------
$ 975,638
- --------------------------------------------------------------------------------------------------------------
General Obligations -- 9.6%
- --------------------------------------------------------------------------------------------------------------
Aa3 AA $ 2,195 Jersey City, School District,
6.25%, 10/1/10 $ 2,526,225
Baa1 A 1,050 Puerto Rico Commonwealth,
0.00%, 7/1/08 662,750
Aa3 AA- 1,000 South Brunswick, 7.125%, 7/15/02 1,116,870
- --------------------------------------------------------------------------------------------------------------
$ 4,305,845
- --------------------------------------------------------------------------------------------------------------
Hospitals -- 9.5%
- --------------------------------------------------------------------------------------------------------------
Baa2 NR $ 500 Camden County Improvement Authority (Cooper
Health), 5.60%, 2/15/07 $ 522,165
A3 A- 340 New Jersey Health Care Facilities Financing
Authority, (Atlantic City Medical Care
Center), 6.25%, 7/1/00 355,422
A3 A- 1,000 New Jersey Health Care Facilities Financing
Authority, (Atlantic City Medical Care
Center), 6.45%, 7/1/02 1,081,610
A3 A- 750 New Jersey Health Care Facilities Financing
Authority, (Atlantic City Medical Care
Center), 6.55%, 7/1/03 823,523
Baa2 BBB 1,380 New Jersey Health Care Facilities Financing
Authority, (St. Elizabeth's Hospital),
5.75%, 7/1/08 1,469,507
- --------------------------------------------------------------------------------------------------------------
$ 4,252,227
- --------------------------------------------------------------------------------------------------------------
Industrial Development Revenue / Pollution Control Revenue -- 2.5%
- --------------------------------------------------------------------------------------------------------------
Aa3 NR $ 520 New Jersey EDA, LOC: Bank of Paris, (AMT),
6.00%, 12/1/02 $ 541,362
NR NR 500 New Jersey EDA, (Holt Hauling and
Warehousing System, Inc.),
7.90%, 3/1/27 571,430
- --------------------------------------------------------------------------------------------------------------
$ 1,112,792
- --------------------------------------------------------------------------------------------------------------
Insured - Education -- 2.4%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,000 New Jersey Educational Facilities Authority,
(Seton Hall University), (FGIC), 6.10%, 7/1/01 $ 1,062,390
- --------------------------------------------------------------------------------------------------------------
$ 1,062,390
- --------------------------------------------------------------------------------------------------------------
Insured - Electric Utilities -- 2.4%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Middlesex County, Utility
Authority, (FGIC),
6.10%, 12/1/01 $ 1,069,380
- --------------------------------------------------------------------------------------------------------------
$ 1,069,380
- --------------------------------------------------------------------------------------------------------------
Insured - General Obligations -- 26.8%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Atlantic City, Board of Education, (AMBAC),
6.00%, 12/1/02(1) $ 1,084,750
Aaa AAA 1,175 Edison, (AMBAC), 4.70%, 1/1/04 1,202,859
Aaa AAA 500 Elizabeth, Union County, (MBIA),
6.10%, 11/15/99 517,965
Aaa AAA 500 Elizabeth, Union County, (MBIA),
6.20%, 11/15/02 535,335
Aaa AAA 1,200 Kearney, (FSA), 6.50%, 2/1/04 1,317,300
Aaa AAA 725 Monroe Township, Board of Education, (FGIC),
5.20%, 8/1/11 762,403
Aaa AAA 825 Monroe Township, Board of Education, (FGIC),
5.20%, 8/1/14 856,317
Aaa AAA 850 Roselle, (MBIA), 4.65%, 10/15/03 869,984
Aaa AAA 1,000 South Brunswick Township, Board of
Education, (FGIC), 6.40%, 8/1/03 1,105,580
Aaa AAA 2,000 Washington Township, Board of Education,
(MBIA), 5.125%, 2/1/15 2,009,020
Aaa AAA 1,585 West Deptford Township, (AMBAC), 5.90%, 3/1/09 1,762,377
- --------------------------------------------------------------------------------------------------------------
$ 12,023,890
- --------------------------------------------------------------------------------------------------------------
Insured - Hospitals -- 8.1%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,910 New Jersey Health Care Facilities Financing
Authority, (Dover General Hospital and
Medical Center), (MBIA), 7.00%, 7/1/04 $ 2,187,598
Aaa AAA 1,300 New Jersey Health Care Facilities Financing
Authority, (AHS Hospital Corp.), (AMBAC),
6.00%, 7/1/12 1,456,702
- --------------------------------------------------------------------------------------------------------------
$ 3,644,300
- --------------------------------------------------------------------------------------------------------------
Insured - Solid Waste -- 0.6%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 250 Bergen County Utilities Authority, Solid
Waste System, (FGIC), 6.00%, 6/15/02 $ 268,080
- --------------------------------------------------------------------------------------------------------------
$ 268,080
- --------------------------------------------------------------------------------------------------------------
Insured - Transportation -- 11.3%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,000 New Jersey Transportation Trust Fund, (FSA),
5.00%, 6/15/15 $ 991,950
Aaa AAA 1,000 New Jersey Turnpike Authority, (FSA),
5.90%, 1/1/03 1,071,550
Aaa AAA 895 New Jersey Turnpike Authority, (FSA),
6.40%, 1/1/02 964,971
Aaa AAA 2,000 Port Authority of New York and
New Jersey, (AMBAC), 5.125%, 7/15/14 2,016,080
- --------------------------------------------------------------------------------------------------------------
$ 5,044,551
- --------------------------------------------------------------------------------------------------------------
Insured - Water and Sewer -- 1.4%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 565 Pennsville Sewer Authority, (MBIA),
0.00%, 11/1/16 $ 224,853
Aaa AAA 565 Pennsville Sewer Authority, (MBIA),
0.00%, 11/1/17 210,333
Aaa AAA 565 Pennsville Sewer Authority, (MBIA),
0.00%, 11/1/18 199,982
- --------------------------------------------------------------------------------------------------------------
$ 635,168
- --------------------------------------------------------------------------------------------------------------
Life Care -- 0.7%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 310 New Jersey EDA, (Cadbury Corp.),
8.00%, 7/1/15 $ 335,355
- --------------------------------------------------------------------------------------------------------------
$ 335,355
- --------------------------------------------------------------------------------------------------------------
Solid Waste -- 1.8%
- --------------------------------------------------------------------------------------------------------------
A1 AA- $ 500 Gloucester County Improvement Authority,
Solid Waste System, 5.40%, 9/1/00 $ 517,470
B1 NR 300 The Atlantic County Utilities Authority,
Solid Waste System, 7.00%, 3/1/08 301,212
- --------------------------------------------------------------------------------------------------------------
$ 818,682
- --------------------------------------------------------------------------------------------------------------
Transportation -- 3.4%
- --------------------------------------------------------------------------------------------------------------
A1 AA- $ 1,000 Port Authority of New York and New Jersey,
5.375%, 10/15/16 $ 1,012,420
A1 AA- 500 Port Authority of New York and New Jersey,
5.50%, 7/1/06 533,750
- --------------------------------------------------------------------------------------------------------------
$ 1,546,170
- --------------------------------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $42,060,899) $ 44,857,956
- --------------------------------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by New Jersey
municipalities. The ability of the issuers of the debt securities to meet
their obligations may be affected by economic developments in a specific
industry or municipality. In order to reduce the risk associated with such
economic developments, at March 31, 1998, 53.0% of the securities in the
portfolio of investments are backed by bond insurance of various financial
institutions and financial guaranty assurance agencies. The aggregate
percentage by financial institution range from 9.7% to 16.8% of total
investments.
(1) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
<PAGE>
New York Limited Maturity Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited)
- ---------------------------------- Principal
Standard Amount
Moody's & Poor's (000 omitted) Security Value
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Airlines -- 4.2%
- --------------------------------------------------------------------------------------------------------------
Baa3 BBB- $ 2,875 Port Authority of New York and
New Jersey, (Delta Airlines),
6.95%, 6/1/08 $ 3,156,290
- --------------------------------------------------------------------------------------------------------------
$ 3,156,290
- --------------------------------------------------------------------------------------------------------------
Assisted Living -- 1.4%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 560 Glen Cove, IDA, (Regency at Glen Cove),
9.50%, 7/1/99 $ 560,000
NR NR 500 Glen Cove, IDA, (Regency at Glen Cove),
9.50%, 7/1/12 500,000
- --------------------------------------------------------------------------------------------------------------
$ 1,060,000
- --------------------------------------------------------------------------------------------------------------
Cogeneration -- 1.3%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 950 Port Authority of New York and New Jersey,
(KIAC Project), (AMT), 6.50%, 10/1/01 $ 1,010,268
- --------------------------------------------------------------------------------------------------------------
$ 1,010,268
- --------------------------------------------------------------------------------------------------------------
General Obligations -- 6.9%
- --------------------------------------------------------------------------------------------------------------
A3 BBB+ $ 1,000 New York City, Series F,
0.00%, 8/1/08 $ 608,290
A3 BBB+ 1,000 New York City, Series G,
0.00%, 8/1/08 608,290
A3 BBB+ 2,000 New York City, 5.25%, 8/1/17 1,990,240
A3 BBB+ 1,500 New York City, 6.375%, 8/1/06 1,623,120
Baa1 A 500 Puerto Rico Commonwealth,
0.00%, 7/1/08 315,595
- --------------------------------------------------------------------------------------------------------------
$ 5,145,535
- --------------------------------------------------------------------------------------------------------------
Health Services -- 1.4%
- --------------------------------------------------------------------------------------------------------------
NR AAA $ 985 New York State Dormitory Authority, (Wesley
Health Nursing Home), (FHA), 5.85%, 8/1/26 $ 1,039,234
- --------------------------------------------------------------------------------------------------------------
$ 1,039,234
- --------------------------------------------------------------------------------------------------------------
Hospitals -- 4.2%
- --------------------------------------------------------------------------------------------------------------
Baa1 BBB+ $ 2,000 New York State Dormitory Authority,
(Department of Health),
5.375%, 7/1/08 $ 2,090,440
Baa NR 1,000 New York State Dormitory Authority, (Nyack
Hospital), 6.00%, 7/1/06 1,079,810
- --------------------------------------------------------------------------------------------------------------
$ 3,170,250
- --------------------------------------------------------------------------------------------------------------
Hotels -- 0.6%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 1,210 Niagara County, Industrial Development
Authority, (Wintergarden Inn Associates),
0.00%, 6/1/11 $ 484,000
- --------------------------------------------------------------------------------------------------------------
$ 484,000
- --------------------------------------------------------------------------------------------------------------
Housing -- 9.5%
- --------------------------------------------------------------------------------------------------------------
Aa AA $ 4,000 New York City Housing Development Corp.,
(Multi-Family),
5.625%, 5/1/12 $ 4,147,800
Aa2 NR 1,500 New York State Mortgage Agency Revenue,
(AMT), 6.45%, 10/1/21 1,623,810
Aa2 NR 1,300 New York State Mortgage Agency, Homeowner
Mtg. Bond Ser. 65, (AMT), 5.20%, 10/1/08 1,337,206
- --------------------------------------------------------------------------------------------------------------
$ 7,108,816
- --------------------------------------------------------------------------------------------------------------
Industrial Development Revenue / Pollution Control Revenue -- 5.4%
- --------------------------------------------------------------------------------------------------------------
A3 A $ 2,000 New York, IDA, (Terminal One Group), (AMT),
6.00%, 1/1/07(1) $ 2,160,120
Baa3 BBB- 1,700 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 1,848,665
- --------------------------------------------------------------------------------------------------------------
$ 4,008,785
- --------------------------------------------------------------------------------------------------------------
Insured - Education -- 1.6%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,075 New York State Dormitory Authority, (Mt.
Sinai School of Medicine), (MBIA),
6.75%, 7/1/09 $ 1,178,232
- --------------------------------------------------------------------------------------------------------------
$ 1,178,232
- --------------------------------------------------------------------------------------------------------------
Insured - Electric Utilities -- 7.2%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 5,000 New York State Energy Research
and Development Authority,
(Central Hudson Gas), (FGIC),
7.375%, 10/1/14 $ 5,368,999
- --------------------------------------------------------------------------------------------------------------
$ 5,368,999
- --------------------------------------------------------------------------------------------------------------
Insured - Hospitals -- 10.2%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 4,450 New York State Medical Care Facilities
Finance Agency, (New
York State Hospital), (AMBAC),
6.10%, 2/15/04 $ 4,862,738
Aaa AAA 2,500 New York State Medical Care Facilities
Finance Agency, (New
York State Hospital), (AMBAC),
6.20%, 2/15/05 2,769,700
- --------------------------------------------------------------------------------------------------------------
$ 7,632,438
- --------------------------------------------------------------------------------------------------------------
Insured - Lease Revenue / Certificates of Participation -- 0.7%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 500 City University of New York,
(John Jay College), (AMBAC),
5.00%, 8/15/08 $ 517,995
- --------------------------------------------------------------------------------------------------------------
$ 517,995
- --------------------------------------------------------------------------------------------------------------
Insured - Transportation -- 6.5%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 2,240 Metropolitan Transportation Authority for
the City of New York, (FGIC), 5.70%, 7/1/10 $ 2,418,864
Aaa AAA 2,290 Triborough Bridge and Tunnel Authority,
(FGIC), 5.80%, 1/1/02 2,426,324
- --------------------------------------------------------------------------------------------------------------
$ 4,845,188
- --------------------------------------------------------------------------------------------------------------
Lease Revenue/Certificates of Participation -- 15.0%
- --------------------------------------------------------------------------------------------------------------
Baa1 BBB+ $ 2,180 New York State Energy Research Development
Authority, (Western
NY Nuclear Service Center),
6.00%, 4/1/06 $ 2,365,649
Baa1 BBB+ 4,000 New York State Housing Finance Agency,
6.375%, 11/1/03(2) 4,352,080
NR BBB 1,485 New York State Thruway Authority,
0.00%, 1/1/04 1,138,163
Baa1 BBB+ 1,300 New York State Thruway Authority,
5.25%, 4/1/13 1,300,754
Baa1 BBB+ 1,000 New York State Urban Development Corp.,
(Youth Facilities), 5.00%, 4/1/13 973,260
Baa1 BBB+ 1,000 New York State Urban Development Corp.,
(Youth Facilities),
5.75%, 4/1/10 1,061,130
- --------------------------------------------------------------------------------------------------------------
$ 11,191,036
- --------------------------------------------------------------------------------------------------------------
Special Tax Revenue -- 9.1%
- --------------------------------------------------------------------------------------------------------------
Aa2 AA $ 2,000 New York City Municipals Assistance Corp.,
5.50%, 7/1/07(3) $ 2,154,520
A3 A+ 4,500 New York State Local Government Assistance
Corp., 5.25%, 4/1/16 4,632,525
- --------------------------------------------------------------------------------------------------------------
$ 6,787,045
- --------------------------------------------------------------------------------------------------------------
Transportation -- 5.7%
- --------------------------------------------------------------------------------------------------------------
Baa1 BBB+ $ 1,000 Port Authority of New York and New Jersey,
5.75%, 4/1/16 $ 1,046,440
A1 AA- 3,000 Port Authority of New York and New Jersey,
(AMT), 6.00%, 7/1/14 3,207,870
- --------------------------------------------------------------------------------------------------------------
$ 4,254,310
- --------------------------------------------------------------------------------------------------------------
Water and Sewer -- 9.1%
- --------------------------------------------------------------------------------------------------------------
A2 A- $ 5,000 New York City Municipal
Water Finance Authority,
5.125%, 6/15/21 $ 4,896,600
A2 A- 1,825 New York City Municipal
Water Finance Authority,
5.70%, 6/15/02 1,928,113
- --------------------------------------------------------------------------------------------------------------
$ 6,824,713
- --------------------------------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $71,325,400) $ 74,783,134
- --------------------------------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The portfolio invests primarily in debt securities issued by New York
municipalities. The ability of the issuers of the debt securities to meet
their obligations may be affected by economic developments in a specific
industry or municipality. In order to reduce the risk associated with such
economic developments, at March 31, 1998, 26.2% of the securities in the
portfolio of investments are backed by bond insurance of various financial
institutions and financial guaranty assurance agencies. The aggregate
percentage insured by financial institution ranged from 1.6% to 13.7% of total
investments.
(1) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
(2) Security has been segregated to cover when-issued securities.
(3) When-issued security.
<PAGE>
Ohio Limited Maturity Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited)
- ---------------------------------- Principal
Standard Amount
Moody's & Poor's (000 omitted) Security Value
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Escrowed / Prerefunded -- 3.0%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 350 Cuyahoga County, Health
Care, (Judson Retirement Community),
Prerefunded to
11/15/99, 8.875%, 11/15/19 $ 387,394
NR NR 285 Greene County, First Mortgage, (Fairview
Extended Care), Prerefunded to 1/1/01,
10.125%, 1/1/11 336,371
- --------------------------------------------------------------------------------------------------------------
$ 723,765
- --------------------------------------------------------------------------------------------------------------
General Obligations -- 14.0%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 300 Kings County, Local School District, 7.60%,
12/1/10 $ 347,688
Aa3 NR 250 Oak Hills, 5.60%, 12/1/17 261,423
Aa1 AA+ 675 Ohio, 0.00%, 8/1/04 512,541
Aa1 AA+ 500 Ohio, 0.00%, 8/1/05 362,725
Aa1 AA+ 250 Ohio, 0.00%, 8/1/08 156,023
A3 NR 1,000 Wauseon, School District,
7.25%, 12/1/10 1,101,690
NR NR 595 Youngstown, County School
District, 6.40%, 7/1/00 616,973
- --------------------------------------------------------------------------------------------------------------
$ 3,359,063
- --------------------------------------------------------------------------------------------------------------
Hospitals -- 10.8%
- --------------------------------------------------------------------------------
A A $ 1,000 Erie County Hospital Improvement (Firelands
Community Hospital), 6.75%, 1/1/08 $ 1,090,050
Baa1 BBB 500 Hamilton County, Health
System (Providence Hospital),
6.00%, 7/1/01 522,865
NR NR 955 Mt. Vernon, (Knox Community Hospital),
7.875%, 6/1/12 981,186
- --------------------------------------------------------------------------------------------------------------
$ 2,594,101
- --------------------------------------------------------------------------------------------------------------
Housing -- 6.9%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 300 Cuyahoga County, (Rolling Hills Apts.),
(AMT), 8.00%, 1/1/28 $ 300,621
NR AAA 1,000 Cuyahoga County, Multifamily Housing,
(National Terminal Apts. Project),
6.40%, 7/1/16 1,066,470
Housing (continued)
- --------------------------------------------------------------------------------------------------------------
NR NR $ 300 Lucas County, Economic Development
Multifamily Housing (County Creek Project),
(AMT), 8.00%, 7/1/26 $ 297,288
- --------------------------------------------------------------------------------------------------------------
$ 1,664,379
- --------------------------------------------------------------------------------------------------------------
Industrial Development Revenue / Pollution
Control Revenue -- 11.6%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 500 Cuyahoga County, (Rock and
Roll Hall of Fame),
5.45%, 12/1/05 $ 525,185
NR NR 250 Cuyahoga County, (Rock and
Roll Hall of Fame),
5.85%, 12/1/08 271,260
NR A- 1,020 Ohio Economic Development Commission, (ABS
Industries), (AMT), 6.00%, 6/1/04 1,110,678
NR A- 580 Ohio Economic Development Commission, (Ohio
Enterprise Bond Fund-Progress Plastics
Products), (AMT), 6.80%, 12/1/01 619,231
NR NR 250 Ohio Solid Waste Revenue, (Republic
Engineered Steels Inc.), (AMT),
9.00%, 6/1/21 269,555
- --------------------------------------------------------------------------------------------------------------
$ 2,795,909
- --------------------------------------------------------------------------------------------------------------
Insured - Education -- 4.1%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Ohio Public Facilities Commission, (Higher
Educational Facilities), (AMBAC),
4.30%, 12/1/08 $ 979,000
- --------------------------------------------------------------------------------------------------------------
$ 979,000
- --------------------------------------------------------------------------------------------------------------
Insured - General Obligations -- 28.3%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Cleveland, (MBIA),
6.50%, 11/15/01 $ 1,081,020
Aaa NR 265 Clinton Massie, Local School District,
(AMBAC), 0.00%, 12/1/11 137,479
Aaa NR 265 Clinton Massie, Local School District,
(MBIA), 0.00%, 12/1/09 154,826
Aaa AAA 225 Finneytown, Local School District, (FGIC),
6.15%, 12/1/11 258,469
Aaa AAA 500 Forest Hills, Local School District, (MBIA),
6.00%, 12/1/09 564,790
Aaa AAA 1,500 Southwest Licking, School Facilities
Improvement, (FGIC),
7.10%, 12/1/16 1,757,821
Aaa AAA 500 Strongsville, City School District, (MBIA),
5.375%, 12/1/12 532,160
Aaa AAA 1,500 West Clermont, School District, (AMBAC),
6.90%, 12/1/12(1) 1,738,650
Aaa AAA 500 West Clermont, School District, (AMBAC),
7.125%, 12/1/19 579,700
- --------------------------------------------------------------------------------------------------------------
$ 6,804,915
- --------------------------------------------------------------------------------------------------------------
Insured - Hospitals -- 2.2%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 500 Cuyahoga County, (Metrohealth System),
(MBIA), 5.50%, 2/15/12 $ 534,075
- --------------------------------------------------------------------------------------------------------------
$ 534,075
- --------------------------------------------------------------------------------------------------------------
Insured - Industrial Development Revenue / Pollution Control Revenue -- 2.3%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 500 Akron, Economic Development Authority,
(MBIA), 6.00%, 12/1/12 $ 563,185
- --------------------------------------------------------------------------------------------------------------
$ 563,185
- --------------------------------------------------------------------------------------------------------------
Insured - Lease Revenue / Certificates of
Participation -- 2.1%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 500 Cleveland, (Cleveland Stadium Project),
(AMBAC), 5.25%, 11/15/17 $ 504,300
- --------------------------------------------------------------------------------------------------------------
$ 504,300
- --------------------------------------------------------------------------------------------------------------
Insured - Water and Sewer -- 2.2%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 500 Hamilton County, Sewer System Revenue,
(FGIC), 5.50%, 12/1/11 $ 541,280
- --------------------------------------------------------------------------------------------------------------
$ 541,280
- --------------------------------------------------------------------------------------------------------------
Life Care -- 5.0%
- --------------------------------------------------------------------------------------------------------------
VMIG-1 NR $ 500 Hamilton County, Hospital Facilities
Revenue, (Retirement Homes), 5.00%, 7/1/15 $ 511,970
NR BBB- 680 Marion County, Health Care Facilities,
(United Church Homes), 5.25%, 11/15/98 685,746
- --------------------------------------------------------------------------------------------------------------
$ 1,197,716
- --------------------------------------------------------------------------------------------------------------
Nursing Homes -- 5.7%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 260 Fairfield, Economic Development Revenue,
(Beverly Enterprises Project), 8.50%, 1/1/03 $ 283,491
Aa2 NR 1,000 Warren County, Hospital
Facilities, (Otterbein Homes), 7.20%, 7/1/11 1,092,590
- --------------------------------------------------------------------------------------------------------------
$ 1,376,081
- --------------------------------------------------------------------------------------------------------------
Special Tax Revenue -- 1.8%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 403 Columbus, Special Assessment,
6.05%, 9/15/05 $ 422,140
- --------------------------------------------------------------------------------------------------------------
$ 422,140
- --------------------------------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $22,897,549) $ 24,059,909
- --------------------------------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Ohio
municipalities. The ability of the issuers of the debt securities to meet
their obligations may be affected by economic developments in a specific
industry or municipality. In order to reduce the risk associated with such
economic developments, at March 31, 1998, 41.2% of the securities in the
portfolio of investments are backed by bond insurance of various financial
institutions and financial guaranty assurance agencies. The aggregate
percentage by financial institution range from 10.6% to 16.4% of total
investments.
(1) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
<PAGE>
Pennsylvania Limited Maturity Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited)
- ---------------------------------- Principal
Standard Amount
Moody's & Poor's (000 omitted) Security Value
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assisted Living -- 3.9%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 885 Chester County, Industrial Development
Authority, 8.00%, 9/1/05 $ 966,686
NR NR 1,120 Delaware County, Industrial Development
Authority, (Glen Riddle), (AMT),
8.125%, 9/1/05 1,235,013
- --------------------------------------------------------------------------------------------------------------
$ 2,201,699
- --------------------------------------------------------------------------------------------------------------
Cogeneration -- 6.3%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 1,200 Pennsylvania Economic Development Financing
Authority, (Resource Recovery for
Northampton),(AMT),
6.75%, 1/1/07 $ 1,311,216
NR BBB- 2,000 Pennsylvania Economic Development Financing
Authority, (Resources Recovery - Colver
Project), (AMT), 7.05%, 12/1/10 2,227,220
- --------------------------------------------------------------------------------------------------------------
$ 3,538,436
- --------------------------------------------------------------------------------------------------------------
Colleges and Universities -- 1.1%
- --------------------------------------------------------------------------------------------------------------
NR BBB- $ 625 Pennsylvania HEFA, (Gwynedd-Mercy College),
5.60%, 11/1/22 $ 624,138
- --------------------------------------------------------------------------------------------------------------
$ 624,138
- --------------------------------------------------------------------------------------------------------------
Electric Utilities -- 1.9%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 960 Virgin Islands Water and Power Authority,
7.40%, 7/1/11 $ 1,049,424
- --------------------------------------------------------------------------------------------------------------
$ 1,049,424
- --------------------------------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 9.0%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 500 Harrisburg Authority, Lease Revenue Bonds,
Escrowed to Maturity, (CGIC), 6.25%, 6/1/01 $ 532,215
Aaa AAA 1,500 Somerset County, General Authority, (FGIC),
Escrowed to Maturity, 6.50%, 10/15/01 1,618,725
Aaa AAA 7,000 Westmoreland County, Municipal Authority,
(FGIC), Escrowed to Maturity, 0.00%, 8/15/19 2,290,960
NR NR 500 Wilkins Area, IDA, (Fairview Extended Care),
Prerefunded to 1/1/01, 10.25%, 1/1/21 591,685
- --------------------------------------------------------------------------------------------------------------
$ 5,033,585
- --------------------------------------------------------------------------------------------------------------
General Obligations -- 0.4%
- --------------------------------------------------------------------------------------------------------------
Baa1 A $ 500 Puerto Rico Commonwealth,
0.00%, 7/1/16 $ 200,155
- --------------------------------------------------------------------------------------------------------------
$ 200,155
- --------------------------------------------------------------------------------------------------------------
Hospitals -- 22.3%
- --------------------------------------------------------------------------------------------------------------
NR BBB $ 1,000 Allentown, Area Hospital Authority, (Sacred
Heart Hospital), 6.50%, 11/15/08 $ 1,086,270
NR BBB 2,355 Clearfield, Hospital Authority, (Clearfield
Hospital), 6.875%, 6/1/16 2,575,475
Aa AA 1,000 Geisinger, Authority Health System,
7.375%, 7/1/02 1,056,410
Baa3 BBB+ 650 Hazleton, Health Services Authority, (St.
Joseph's Hospital), 5.85%, 7/1/06 692,796
A3 A 1,200 Lehigh County, General Purpose Authority,
(Muhlenberg Hospital), 5.75%, 7/15/10 1,323,840
NR BBB- 200 Mckean County, (Bradford Hospital),
5.375%, 10/1/03 207,752
A3 BBB+ 1,000 Monroeville, Hospital Authority, (Forbes
Health), 5.75%, 10/1/05 1,071,270
Baa2 NR 1,030 Montgomery County, Higher Education and
Health Authority, (Montgomery Hospital),
6.25%, 7/1/06 1,108,857
Baa2 NR 1,100 Montgomery County, Higher Education and
Health Authority, (Montgomery Hospital),
6.375%, 7/1/07 1,202,300
A NR 500 New Castle Area Hospital Authority, (St.
Francis Hospital of New Castle),
5.90%, 11/15/00 520,805
NR BBB 315 Northhampton County Hospital Authority,
(Easton Hospital), 6.90%, 1/1/02 332,889
NR A- 1,350 South Fork, Municipal Authority, (Lee
Hospital), 5.50%, 7/1/11 1,369,197
- --------------------------------------------------------------------------------------------------------------
$ 12,547,861
- --------------------------------------------------------------------------------------------------------------
Industrial Development Revenue / Pollution Control Revenue -- 2.2%
- --------------------------------------------------------------------------------------------------------------
A3 A- $ 1,200 Erie, Industrial Development Authority,
(International Paper), (AMT), 5.85%, 12/1/20 $ 1,262,124
- --------------------------------------------------------------------------------------------------------------
$ 1,262,124
- --------------------------------------------------------------------------------------------------------------
Insured - Colleges and Universities -- 4.8%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 2,000 Allegheny County, Higher Education Building
Authority, (Dusquesne University), (AMBAC),
5.00%, 3/1/16 $ 1,969,680
NR AAA 700 Montgomery County, Higher Education and
Health Authority, (Saint Joseph's
University), (CLEE), 6.00%, 12/15/02 752,934
- --------------------------------------------------------------------------------------------------------------
$ 2,722,614
- --------------------------------------------------------------------------------------------------------------
Insured - Electric Utilities -- 8.5%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 2,000 Cambria County Authority, (PA Electric Co.),
Industrial Development, (MBIA),
5.35%, 11/1/10 $ 2,133,140
Aaa AAA 2,500 Indiana County, Industrial Development
Authority, (PA Electric Co.), (MBIA),
5.35%, 11/1/10 2,666,424
- --------------------------------------------------------------------------------------------------------------
$ 4,799,564
- --------------------------------------------------------------------------------------------------------------
Insured - General Obligations -- 8.9%
- --------------------------------------------------------------------------------------------------------------
Aaa NR $ 1,635 Harrisburg, (AMBAC),
0.00%, 9/15/12 $ 797,340
Aaa AAA 1,355 McKeesport, (FGIC),
0.00%, 10/1/11 702,107
Aaa AAA 2,000 Pennsylvania, (AMBAC),
5.00%, 11/15/15 1,983,700
Aaa AAA 1,500 Pleasant Valley, School District, (FGIC),
5.00%, 9/1/10 1,527,120
- --------------------------------------------------------------------------------------------------------------
$ 5,010,267
- --------------------------------------------------------------------------------------------------------------
Insured - Hospitals -- 11.1%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Allegheny County, Hospital Development
Authority, (South Hills Health), (MBIA),
5.50%, 5/1/08 $ 1,073,590
Aaa AAA 1,000 Erie County, Hospital Authority, (Hamot
Health System), (AMBAC), 7.10%, 2/15/10 1,087,700
NR AAA 1,030 Indiana County, Hospital Authority, (Indiana
Hospital), (CLEE),
5.75%, 7/1/00 1,069,016
NR AAA 825 Indiana County, Hospital Authority, (Indiana
Hospital), (CLEE),
5.875%, 7/1/01 868,304
Aaa AAA 2,050 Sayre Health Care Facilities Authority,
(Guthrie Medical Center), (AMBAC),
6.50%, 3/1/00 2,145,653
- --------------------------------------------------------------------------------------------------------------
$ 6,244,263
- --------------------------------------------------------------------------------------------------------------
Insured - Lease Revenue / Certificates of
Participation -- 1.9%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Northumberland County Authority, Lease
Revenue Bonds, (MBIA), 6.50%, 10/15/01 $ 1,079,150
- --------------------------------------------------------------------------------------------------------------
$ 1,079,150
- --------------------------------------------------------------------------------------------------------------
Insured - Transportation -- 4.9%
- --------------------------------------------------------------------------------------------------------------
Aaa AAA $ 590 Alleghemy County, Airport Revenue, (MBIA),
5.75%, 1/1/12 $ 636,622
Aaa AAA 1,000 Allegheny County, Airport Revenue, (MBIA),
5.75%, 1/1/10 1,079,340
Aaa AAA 1,000 Southeastern Pennsylvania Transportation
Authority, (FGIC), 5.55%, 3/1/14 1,049,740
- --------------------------------------------------------------------------------------------------------------
$ 2,765,702
- --------------------------------------------------------------------------------------------------------------
Life Care -- 2.5%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 245 Delaware County, Authority,
(White Horse Village),
6.30%, 7/1/03 $ 259,756
NR NR 505 Delaware County, Authority,
(White Horse Village),
6.40%, 7/1/04 540,547
Baa2 BBB+ 590 Hazleton, Health Services Authority,
(Hazleton General Hospital),
5.50%, 7/1/07 617,819
- --------------------------------------------------------------------------------------------------------------
$ 1,418,122
- --------------------------------------------------------------------------------------------------------------
Solid Waste -- 3.3%
- --------------------------------------------------------------------------------------------------------------
Baa A- $ 500 Greater Lebanon Refuse Authority,
6.20%, 5/15/99 $ 512,825
Baa A- 500 Greater Lebanon Refuse Authority,
6.20%, 11/15/99 517,785
Baa A- 300 Greater Lebanon Refuse Authority,
6.40%, 5/15/00 313,683
Baa A- 500 Greater Lebanon Refuse Authority,
6.40%, 11/15/00 527,780
- --------------------------------------------------------------------------------------------------------------
$ 1,872,073
- --------------------------------------------------------------------------------------------------------------
Special Tax Revenue -- 0.5%
- --------------------------------------------------------------------------------------------------------------
NR NR $ 250 Virgin Islands Public Finance Authority,
(Matching Loan Fund Notes), 6.70%, 10/1/99 $ 259,715
- --------------------------------------------------------------------------------------------------------------
$ 259,715
- --------------------------------------------------------------------------------------------------------------
Transportation -- 6.5%
- --------------------------------------------------------------------------------------------------------------
Aa3 AA- $ 2,550 Southeastern Pennsylvania Transportation
Authority, LOC: Canadian Imperial Bank of
Commerce, 6.00%, 6/1/99(1) $ 2,614,923
Aa3 AA- 1,000 Southeastern Pennsylvania Transportation
Authority, LOC: Canadian Imperial Bank of
Commerce, 6.00%, 6/1/01 1,056,220
- --------------------------------------------------------------------------------------------------------------
$ 3,671,143
- --------------------------------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $53,360,058) $ 56,300,035
- --------------------------------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Fedreral Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Pennsylvania
municipalities. The ability of the issuers of the debt securities to meet
their obligations may be affected by economic development in a specific
industry or municipality. In order to reduce the risk associated with such
economic developments, at March 31, 1998, 48.0% of the securities in the
portfolio of investments are backed by bond issuance of various financial
institutions and financial guaranty assurance agencies. The aggregate
percentage by financial institution range from 0.9% to 15.4% of total
investments.
(1) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
<PAGE>
<TABLE>
Limited Maturity Municipals Portfolio as of March 31, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Assets and Liabilities
As of March 31, 1998
<CAPTION>
California Connecticut Florida Massachusetts Michigan
Limited Limited Limited Limited Limited
Portfolio Portfolio Portfolio Portfolio Portfolio
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Investments --
Identified cost $31,771,731 $ 9,154,495 $68,566,219 $53,095,573 $11,228,522
Unrealized appreciation 1,715,752 482,375 3,445,439 2,866,750 959,633
- -----------------------------------------------------------------------------------------------------------------------------------
Investments, at value (Note 1A) $33,487,483 $ 9,636,870 $72,011,658 $55,962,323 $12,188,155
- -----------------------------------------------------------------------------------------------------------------------------------
Cash $ 267,134 $ 59,553 $ 934 $ 61 $ 111
Interest receivable 553,301 142,277 1,517,101 833,304 266,054
Deferred organization expenses (Note 1D) 136 -- 378 354 --
- -----------------------------------------------------------------------------------------------------------------------------------
Total assets $34,308,054 $ 9,838,700 $73,530,071 $56,796,042 $12,454,320
- -----------------------------------------------------------------------------------------------------------------------------------
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------------
Payable for when-issued securities (Note 1F) $ -- $ -- $ 350,632 $ -- $ --
Demand note payable (Note 5) -- -- 916,000 198,000 354,000
Payable for daily variation margin on open financial
futures contracts (Note 1E) 6,094 2,812 16,406 12,656 2,344
Payable to affiliate for Trustees' fees (Note 2) 950 100 3,900 1,945 100
Accrued expenses 3,591 1,296 1,953 290 662
- -----------------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 10,635 $ 4,208 $ 1,288,891 $ 212,891 $ 357,106
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets applicable to investors' interest
in Portfolio $34,297,419 $ 9,834,492 $72,241,180 $56,583,151 $12,097,214
- -----------------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Net proceeds from capital contributions
and withdrawals $32,581,458 $ 9,355,747 $68,807,579 $53,732,349 $11,140,017
Net unrealized appreciation of investments
(computed on the basis of identified cost) 1,715,961 478,745 3,433,601 2,850,802 957,197
- -----------------------------------------------------------------------------------------------------------------------------------
Total $34,297,419 $ 9,834,492 $72,241,180 $56,583,151 $12,097,214
- -----------------------------------------------------------------------------------------------------------------------------------
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
Limited Maturity Municipals Portfolio as of March 31, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Assets and Liabilities
As of March 31, 1998
<CAPTION>
New Jersey New York Ohio Pennsylvania
Limited Limited Limited Limited
Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Investments --
Identified cost $42,060,899 $71,325,400 $22,897,549 $53,360,058
Unrealized appreciation 2,797,057 3,457,734 1,162,360 2,939,977
- ------------------------------------------------------------------------------------------------------------------------------------
Investments, at value (Note 1A) $44,857,956 $74,783,134 $24,059,909 $56,300,035
- ------------------------------------------------------------------------------------------------------------------------------------
Cash $ 36,018 $ 724,279 $ 298 $ 569,540
Receivable for when-issued securities sold (Note 1F) -- 4,035,939 -- --
Interest receivable 663,429 1,345,875 421,130 856,099
Deferred organization expenses (Note 1D) 105 219 -- 240
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $45,557,508 $80,889,446 $24,481,337 $57,725,914
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------------
Payable for when-issued securities (Note 1F) $ -- $ 6,169,619 $ -- $ --
Demand note payable (Note 5) -- -- 256,000 --
Payable for daily variation margin on open financial
futures contracts (Note 1E) 11,250 19,219 5,625 9,844
Payable to affiliate for Trustees' fees (Note 2) 473 1,945 473 1,945
Accrued expenses 5,922 7,224 3,581 6,512
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 17,645 $ 6,198,007 $ 265,679 $ 18,301
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets applicable to investors' interest in Portfolio $45,539,863 $74,691,439 $24,215,658 $57,707,613
- ------------------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Net proceeds from capital contributions and withdrawals $42,753,263 $71,251,139 $23,056,755 $54,764,267
Net unrealized appreciation of investments (computed
on the basis of identified cost) 2,786,600 3,440,300 1,158,903 2,943,346
- ------------------------------------------------------------------------------------------------------------------------------------
Total $45,539,863 $74,691,439 $24,215,658 $57,707,613
- ------------------------------------------------------------------------------------------------------------------------------------
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
Limited Maturity Municipals Portfolio as of March 31, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Operations
For the Year Ended March 31, 1998
<CAPTION>
California Connecticut Florida Massachusetts Michigan
Limited Limited Limited Limited Limited
Portfolio Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment Income (Note 1B)
- ------------------------------------------------------------------------------------------------------------------------------------
Interest income $2,097,447 $ 592,217 $4,488,367 $3,418,767 $ 749,490
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment income $2,097,447 $ 592,217 $4,488,367 $3,418,767 $ 749,490
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Investment adviser fee (Note 2) $ 178,448 $ 50,322 $ 381,588 $ 290,512 $ 62,245
Compensation of Trustees not members of the
Investment adviser's organization (Note 2) 2,201 219 8,863 6,495 219
Custodian fee (Note 1G) 26,528 13,226 43,702 37,474 13,539
Legal and accounting services 19,314 14,914 20,214 19,213 14,214
Amortization of organization expenses (Note 1D) 1,511 1,743 4,204 4,088 259
Miscellaneous 5,806 3,243 17,414 16,691 2,750
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses $ 233,808 $ 83,667 $ 475,985 $ 374,473 $ 93,226
- ------------------------------------------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee (Note 1G) $ 8,191 $ 2,432 $ 19,574 $ 22,949 $ 4,925
Reduction of invetment adviser fee (Note 2) -- 25,094 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total expense reductions $ 8,191 $ 27,526 $ 19,574 $ 22,949 $ 4,925
- ------------------------------------------------------------------------------------------------------------------------------------
Net expenses $ 225,617 $ 56,141 $ 456,411 $ 351,524 $ 88,301
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $1,871,830 $ 536,076 $4,031,956 $3,067,243 $ 661,189
- ------------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) on Investments
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) -
Investment transactions (identified
cost basis) $ 958,114 $ 129,667 $1,257,589 $ 994,185 $ 149,369
Financial futures contracts (496,566) (125,981) (1,388,455) (995,822) (276,838)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investment
transactions $ 461,548 $ 3,686 $ (130,866) $ (1,637) $ (127,469)
- ------------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) -
Investments (identified cost basis) $1,100,873 $ 373,496 $3,004,369 $2,278,256 $ 566,409
Financial futures contracts (96,926) (3,630) (219,982) (196,339) (2,436)
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) of investments $1,003,947 $ 369,866 $2,784,387 $2,081,917 $ 563,973
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $1,465,495 $ 373,552 $2,653,521 $2,080,280 $ 436,504
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $3,337,325 $ 909,628 $6,685,477 $5,147,523 $1,097,693
- ------------------------------------------------------------------------------------------------------------------------------------
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
Limited Maturity Municipals Portfolio as of March 31, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Operations
For the Year Ended March 31, 1998
<CAPTION>
New Jersey New York Ohio Pennsylvania
Limited Limited Limited Limited
Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income (Note 1B)
- ------------------------------------------------------------------------------------------------------------------------------------
Interest income $2,841,563 $4,702,633 $1,537,712 $3,461,184
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment income $2,841,563 $4,702,633 $1,537,712 $3,461,184
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Investment adviser fee (Note 2) $ 239,715 $ 402,164 $ 127,254 $ 289,154
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 5,332 7,332 1,746 6,804
Custodian fee (Note 1G) 31,841 53,547 18,182 35,199
Legal and accounting services 18,615 21,715 17,614 19,213
Amortization of organization expenses (Note 1D) 1,788 2,570 -- 2,672
Interest expense (Note 5) -- 34,599 -- --
Miscellaneous 20,500 4,539 7,796 14,706
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses $ 317,791 $ 526,466 $ 172,592 $ 367,748
- ------------------------------------------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee (Note 1G) $ 5,970 $ 13,608 $ -- $ 11,665
- ------------------------------------------------------------------------------------------------------------------------------------
Total expense reductions $ 5,970 $ 13,608 $ -- $ 11,665
- ------------------------------------------------------------------------------------------------------------------------------------
Net expenses $ 311,821 $ 512,858 $ 172,592 $ 356,083
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $2,529,742 $4,189,775 $1,365,120 $3,105,101
- ------------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) on Investments
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) -
Investment transactions (identified cost basis) $ 604,994 $1,498,902 $ 342,719 $1,006,723
Financial futures contracts (796,382) (372,410) (194,243) (576,338)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investment transactions $ (191,388) $1,126,492 $ 148,476 $ 430,385
- ------------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) -
Investments (identified cost basis) $1,689,855 $3,345,035 $ 777,072 $2,255,452
Financial futures contracts (10,457) (392,093) (3,457) 3,369
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)
of investments $1,679,398 $2,952,942 $ 773,615 $2,258,821
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $1,488,010 $4,079,434 $ 922,091 $2,689,206
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $4,017,752 $8,269,209 $2,287,211 $5,794,307
- ------------------------------------------------------------------------------------------------------------------------------------
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
Limited Maturity Municipals Portfolio as of March 31, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
For the Year Ended March 31, 1998
<CAPTION>
California Connecticut Florida Massachusetts Michigan
Limited Limited Limited Limited Limited
Portfolio Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
From operations -
Net investment income $ 1,871,830 $ 536,076 $ 4,031,956 $ 3,067,243 $ 661,189
Net realized gain (loss) on investment
transactions 461,548 3,686 (130,866) (1,637) (127,469)
Net change in unrealized appreciation
(depreciation) of investments 1,003,947 369,866 2,784,387 2,081,917 563,973
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 3,337,325 $ 909,628 $ 6,685,477 $ 5,147,523 $ 1,097,693
- ------------------------------------------------------------------------------------------------------------------------------------
Capital transactions -
Contributions $ 1,661,073 $ 1,135,100 $ 7,486,705 $ 4,381,569 $ 1,024,096
Withdrawals (13,895,420) (4,484,203) (34,840,194) (22,915,877) (5,021,007)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from
capital transactions $(12,234,347) $(3,349,103) $(27,353,489) $(18,534,308) $(3,996,911)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $ (8,897,022) $(2,439,475) $(20,668,012) $(13,386,785) $(2,899,218)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 43,194,441 $12,273,967 $ 92,909,192 $ 69,969,936 $14,996,432
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $ 34,297,419 $ 9,834,492 $ 72,241,180 $ 56,583,151 $12,097,214
- ------------------------------------------------------------------------------------------------------------------------------------
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
Limited Maturity Municipals Portfolio as of March 31, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
For the Year Ended March 31, 1998
<CAPTION>
New Jersey New York Ohio Pennsylvania
Limited Limited Limited Limited
Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
From operations -
Net investment income $ 2,529,742 $ 4,189,775 $ 1,365,120 $ 3,105,101
Net realized gain (loss) on investment transactions (191,388) 1,126,492 148,476 430,385
Net change in unrealized appreciation
(depreciation) of investments 1,679,398 2,952,942 773,615 2,258,821
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 4,017,752 $ 8,269,209 $ 2,287,211 $ 5,794,307
- ------------------------------------------------------------------------------------------------------------------------------------
Capital transactions -
Contributions $ 2,886,225 $ 3,255,202 $ 1,303,141 $ 2,758,619
Withdrawals (19,630,053) (36,846,720) (7,844,546) (18,720,920)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from capital transactions $(16,743,828) $(33,591,518) $(6,541,405) $(15,962,301)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $(12,726,076) $(25,322,309) $(4,254,194) $(10,167,994)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 58,265,939 $100,013,748 $28,469,852 $ 67,875,607
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $ 45,539,863 $ 74,691,439 $24,215,658 $ 57,707,613
- ------------------------------------------------------------------------------------------------------------------------------------
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
Limited Maturity Municipals Portfolio as of March 31, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
For the Year Ended March 31, 1997
<CAPTION>
California Connecticut Florida Massachusetts Michigan
Limited Limited Limited Limited Limited
Portfolio Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
From operations -
Net investment income $ 2,546,209 $ 701,646 $ 5,368,154 $ 4,105,048 $ 895,654
Net realized gain (loss) on investment
transactions (146,427) 11,718 (345,920) (122,731) 196,256
Net change in unrealized appreciation
(depreciation) of investments (326,414) (114,671) (1,654,724) (861,173) (180,447)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 2,073,368 $ 598,693 $ 3,367,510 $ 3,121,144 $ 911,463
- ------------------------------------------------------------------------------------------------------------------------------------
Capital transactions -
Contributions $ 890,101 $ 868,089 $ 4,859,506 $ 1,754,803 $ 727,519
Withdrawals (18,985,108) (4,054,341) (43,152,835) (32,041,287) (7,833,956)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from
capital transactions $(18,095,007) $(3,186,252) $(38,293,329) $(30,286,484) $(7,106,437)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $(16,021,639) $(2,587,559) $(34,925,819) $(27,165,340) $(6,194,974)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 59,216,080 $14,861,526 $127,835,011 $ 97,135,276 $21,191,406
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $ 43,194,441 $12,273,967 $ 92,909,192 $ 69,969,936 $14,996,432
- ------------------------------------------------------------------------------------------------------------------------------------
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
Limited Maturity Municipals Portfolio as of March 31, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
For the Year Ended March 31, 1997
<CAPTION>
New Jersey New York Ohio Pennsylvania
Limited Limited Limited Limited
Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
From operations -
Net investment income $ 3,451,147 $ 5,864,808 $ 1,601,381 $ 4,070,122
Net realized gain (loss) on investment
transactions 72,466 (287,142) 226,637 407,499
Net change in unrealized appreciation
(depreciation) of investments (370,049) (895,080) (288,513) (1,218,041)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 3,153,564 $ 4,682,586 $ 1,539,505 $ 3,259,580
- ------------------------------------------------------------------------------------------------------------------------------------
Capital transactions -
Contributions $ 1,862,282 $ 3,989,610 $ 1,294,856 $ 2,538,420
Withdrawals (26,922,483) (47,386,927) (7,893,884) (30,116,393)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from capital transactions $(25,060,201) $(43,397,317) $(6,599,028) $(27,577,973)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $(21,906,637) $(38,714,731) $(5,059,523) $(24,318,393)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 80,172,576 $138,728,479 $33,529,375 $ 92,194,000
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $ 58,265,939 $100,013,748 $28,469,852 $ 67,875,607
- ------------------------------------------------------------------------------------------------------------------------------------
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
Limited Maturity Municipals Portfolio as of March 31, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- ------------------------------------------------------------------------------------------------------------------------------------
Supplementary Data
<CAPTION>
California Limited Portfolio Connecticut Limited Portfolio
-------------------------------------------------- -----------------------------------------------
Year Ended March 31, Year Ended March 31,
-------------------------------------------------- -----------------------------------------------
1998 1997 1996 1995 1994* 1998 1997 1996 1995 1994**
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets+
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses(1) 0.61% 0.63% 0.58% 0.53% 0.46%+ 0.54% 0.54% 0.39% 0.17% 0.00%+
Net expenses after custodian
fee reduction 0.59% 0.61% 0.55% -- -- 0.52% 0.50% 0.35% -- --
Net investment income 4.86% 4.98% 4.82% 4.72% 4.50%+ 4.96% 5.09% 4.91% 4.95% 4.53%+
Portfolio Turnover 40% 57% 36% 56% 6% 23% 46% 52% 73% 39%
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year
(000s omitted) $34,297 $43,194 $59,216 $82,344 $95,704 $ 9,834 $12,274 $14,862 $17,316 $16,767
- ------------------------------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Portfolio may reflect a reduction of the
Investment Adviser fee, an allocation of expenses to the Investment Adviser,
or both. Had such actions not been taken, the ratios would have been as
follows:
Expenses(1) 0.52%+ 0.77% 0.78% 0.72% 0.67% 0.62%+
Expenses after custodian fee
reduction -- 0.75% 0.74% 0.68% -- --
Net investment income 4.44%+ 4.73% 4.85% 4.58% 4.45% 3.92%+
- ------------------------------------------------------------------------------------------------------------------------------------
+ Annualized.
* For the period from the start of business, May 3, 1993, to March 31, 1994.
** For the period from the start of business, April 16, 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 each Portfolio to increase its expense ratios 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
</TABLE>
<PAGE>
<TABLE>
Limited Maturity Municipals Portfolio as of March 31, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- ------------------------------------------------------------------------------------------------------------------------------------
Supplementary Data
<CAPTION>
Florida Limited Portfolio Massachusetts Limited Portfolio
---------------------------------------------- -------------------------------------------------
Year Ended March 31, Year Ended March 31,
---------------------------------------------- -------------------------------------------------
1998 1997 1996 1995 1994* 1998 1997 1996 1995 1994*
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses(1) 0.58% 0.59% 0.55% 0.52% 0.49%+ 0.60% 0.60% 0.57% 0.54% 0.52%+
Expenses after custodian fee
reduction 0.55% 0.57% 0.54% -- -- 0.56% 0.58% 0.55% -- --
Net investment income 4.90% 4.90% 4.73% 4.73% 4.53%+ 4.90% 4.97% 4.72% 4.90% 4.57%+
Portfolio Turnover 38% 66% 20% 44% 8% 46% 60% 27% 46% 8%
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year
(000s omitted) $72,241 $92,909 $127,835 $164,579 $185,977 $56,583 $69,970 $97,135 $119,120 $119,772
- ------------------------------------------------------------------------------------------------------------------------------------
+ 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 each Portfolio to increase its expense ratios 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
</TABLE>
<PAGE>
<TABLE>
Limited Maturity Municipals Portfolio as of March 31, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- ------------------------------------------------------------------------------------------------------------------------------------
Supplementary Data
<CAPTION>
Michigan Limited Portfolio New Jersey Limited Portfolio
------------------------------------------------ --------------------------------------------------
Year Ended March 31, Year Ended March 31,
------------------------------------------------ --------------------------------------------------
1998 1997 1996 1995 1994* 1998 1997 1996 1995 1994**
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets+
- --------------------------------------------------------------------------------
Expenses(1) 0.71% 0.79% 0.68% 0.48% 0.00%+ 0.62% 0.61% 0.57% 0.54% 0.54%+
Net expenses after custodian fee
reduction 0.67% 0.76% 0.64% -- -- 0.61% 0.58% 0.55% --
Net investment income 5.00% 5.09% 5.00% 4.88% 4.62%+ 4.91% 4.96% 4.78% 4.73% 4.53%+
Portfolio Turnover 21% 28% 40% 111% 30% 21% 37% 42% 44% 10%
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year
(000s omitted) $12,097 $14,996 $21,191 $33,198 $35,608 $45,540 $58,266 $80,173 $97,280 $102,948
- ------------------------------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Portfolio may reflect a reduction of the Investment Adviser fee, an allocation of expenses to the
Investment Adviser, or both. Had such actions not been taken, the ratios would have been as follows:
Expenses(1) 0.59% 0.54%+
Net investment income 4.77% 4.08%+
- ------------------------------------------------------------------------------------------------------------------------------------
+ Annualized.
* For the period from the start of business, April 16, 1993, to March 31, 1994.
** 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 each Portfolio to increase its expense ratios 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
</TABLE>
<PAGE>
<TABLE>
Limited Maturity Municipals Portfolio as of March 31, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- ------------------------------------------------------------------------------------------------------------------------------------
Supplementary Data
<CAPTION>
New York Limited Portfolio Ohio Limited Portfolio
-------------------------------------------------- -----------------------------------------------
Year Ended March 31, Year Ended March 31,
-------------------------------------------------- -----------------------------------------------
1998 1997 1996 1995 1994* 1998 1997 1996 1995 1994**
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets+
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses(1) 0.61% 0.58% 0.55% 0.52% 0.47%+ 0.64% 0.68% 0.63% 0.46% 0.00%+
Expenses after custodian fee
reduction 0.59% 0.56% 0.53% -- -- -- 0.65% 0.61% --
Net investment income 4.81% 4.87% 4.66% 4.79% 4.50%+ 5.05% 5.20% 5.06% 4.96% 4.68%+
Portfolio Turnover 53% 58% 32% 31% 5% 29% 34% 47% 120% 33%
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year
(000s omitted) $74,691 $100,014 $138,728 $173,632 $183,768 $24,216 $28,470 $33,529 $39,435 $37,978
- ------------------------------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Portfolio may reflect a reduction of the Investment Adviser fee, an allocation of expenses to the
Investment Adviser, or both. Had such actions not been taken, the ratios would have been as follows:
Expenses(1) 0.58% 0.54%+
Net investment income 4.84% 4.14%+
- ------------------------------------------------------------------------------------------------------------------------------------
+ Annualized.
* For the period from the start of business, May 3, 1993, to March 31, 1994.
** For the period from the start of business, April 16, 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 each Portfolio to increase its expense ratios 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
</TABLE>
<PAGE>
Limited Maturity Municipals Portfolio as of March 31, 1998
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- --------------------------------------------------------------------------------
Supplementary Data
Pennsylvania Limited Portfolio
------------------------------------------------------
Year Ended March 31,
------------------------------------------------------
1998 1997 1996 1995 1994*
- --------------------------------------------------------------------------------
Ratios to average daily net assets
- --------------------------------------------------------------------------------
Expenses(1) 0.60% 0.61% 0.58% 0.53% 0.50%+
Expenses after custodian fee
reduction 0.58% 0.59% 0.56% -- --
Net investment income 5.03% 5.11% 4.81% 4.77% 4.59%+
Portfolio Turnover 36% 51% 24% 39% 12%
- --------------------------------------------------------------------------------
Net assets, end of year
(000s omitted) $57,708 $67,876 $92,194 $113,606 $123,620
- --------------------------------------------------------------------------------
+ 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 ratios 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.
<PAGE>
Limited Maturity Municipals Portfolio as of March 31, 1998
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1 Significant Accounting Policies
- --------------------------------------------------------------------------------
California Limited Maturity Municipals Portfolio (California Limited
Portfolio), Connecticut Limited Maturity Municipals Portfolio (Connecticut
Limited Portfolio), Florida Limited Maturity Municipals Portfolio (Florida
Limited Portfolio), Massachusetts Limited Maturity Municipals Portfolio
(Massachusetts Limited Portfolio), Michigan Limited Maturity Municipals
Portfolio (Michigan Limited Portfolio), New Jersey Limited Maturity
Municipals Portfolio (New Jersey Limited Portfolio), New York Limited
Maturity Municipals Portfolio (New York Limited Portfolio), Ohio Limited
Maturity Municipals Portfolio (Ohio Limited Portfolio) and Pennsylvania
Limited Maturity Municipals Portfolio (Pennsylvania Limited Portfolio),
collectively the Portfolios, are registered under the Investment Company Act
of 1940 as non-diversified open-end management investment companies which
were organized as trusts under the laws of the State of New York on May 1,
1992. The Declarations of Trust permit the Trustees to issue interests in
the Portfolios. The following is a summary of significant accounting
policies of the Portfolios. The policies are in conformity with generally
accepted accounting principles.
A Investment Valuations -- Municipal bonds are normally valued on the basis
of valuations furnished by a pricing service. Taxable obligations, if any,
for which price quotations are readily available are normally valued at the
mean between the latest bid and asked prices. Futures contracts listed on
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 Federal Taxes -- The Portfolios are treated as partnerships for Federal
tax purposes. No provision is made by the Portfolios for federal or state
taxes on any taxable income of the Portfolios because each investor in the
Portfolios is ultimately responsible for the payment of any taxes. Since
some of the Portfolios' investors are regulated investment companies that
invest all or substantially all of their assets in the Portfolios, the
Portfolios normally must satisfy the applicable source of income and
diversification requirements (under the Internal Revenue Code) in order for
their respective investors to satisfy them. The Portfolios will allocate at
least annually among their respective investors each investor's distributive
share of the Portfolios' net taxable (if any) and tax-exempt investment
income, net realized capital gains, and any other items of income, gain,
loss, deduction or credit.
Interest income received by the Portfolios on investments in municipal
bonds, which is excludable from gross income under the Internal Revenue
Code, will retain its status as income exempt from federal income tax when
allocated to each Portfolio's investors. The portion of such interest, if
any, earned on private activity bonds issued after August 7, 1986, may be
considered a tax preference item for investors.
D Deferred Organization Expenses -- Costs incurred by a Portfolio in
connection with its organization, including registration costs, are being
amortized on the straight-line basis over five years, beginning on the date
each Portfolio commenced operations.
E Financial Futures Contracts -- Upon the entering of a financial futures
contract, a Portfolio is required to deposit ("initial margin") either in
cash or securities an amount equal to a certain percentage of the purchase
price indicated in the financial futures contract. Subsequent payments are
made or received by a Portfolio ("margin maintenance") each day, dependent
on the daily fluctuations in the value of the underlying security, and are
recorded for book purposes as unrealized gains or losses by a Portfolio. A
Portfolio's investment in financial futures contracts is designed only to
hedge against anticipated future changes in interest rates. Should interest
rates move unexpectedly, a Portfolio may not achieve the anticipated
benefits of the financial futures contracts and may realize a loss.
F When-issued and Delayed Delivery Transactions -- The Portfolios may engage
in when-issued and delayed delivery transactions. The Portfolios record
when-issued securities on trade date and maintain 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.
G Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian of the Portfolios. Pursuant to the respective custodian
agreements, IBT receives a fee reduced by the credits which are determined
based on the average daily cash balances each Portfolio maintains with IBT.
All significant credit balances used to reduce the Portfolios' custodian
fees are reflected as a reduction of operating expense on the Statement of
Operations.
H Use of Estimates -- The preparation of the financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements and the reported
amounts of revenue and expense during the reporting period. Actual results
could differ from those estimates.
I Other -- Investment transactions are accounted for on a trade date basis.
2 Investment Adviser Fee and Other Transactions with Affiliates
- --------------------------------------------------------------------------------
The investment adviser fee is earned by Boston Management and Research
(BMR), a wholly-owned subsidiary of Eaton Vance Management (EVM), as
compensation for management and investment advisory services rendered to
each Portfolio. The fee is based upon a percentage of average daily net
assets plus a percentage of gross income (i.e., income other than gains from
the sale of securities). For the year ended March 31, 1998, each Portfolio
paid advisory fees as follows:
Portfolio Amount Effective Rate
------------------------------------------------------------------------------
California Limited $178,448 0.46%
Connecticut Limited $ 50,322 0.47%
Florida Limited $381,588 0.46%
Massachusetts Limited $290,512 0.46%
Michigan Limited $ 62,245 0.47%
New Jersey Limited $239,715 0.47%
New York Limited $402,164 0.46%
Ohio Limited $127,254 0.47%
Pennsylvania Limited $289,154 0.47%
------------------------------------------------------------------------------
To enhance the net income of the Connecticut Limited Portfolio, BMR made a
reduction of its fee in the amount of $25,094.
Except as to Trustees of the Portfolios who are not members of EVM's or
BMR's organization, officers and Trustees receive remuneration for their
services to the Portfolios out of such investment adviser fee. Trustees of
the Portfolios that are not affiliated with the Investment Adviser may elect
to defer receipt of all or a percentage of their annual fees in accordance
with the terms of the Trustees Deferred Compensation Plan. For the year
ended March 31, 1998, no significant amounts have been deferred.
Certain of the officers and Trustees of the Portfolios are officers and
directors/trustees of the above organizations.
3 Investments
- --------------------------------------------------------------------------------
Purchases and sales of investments, other than U.S. Government securities
and short-term obligations, for the year ended March 31, 1998 were as
follows:
California Limited Portfolio Connecticut Limited Portfolio
------------------------------------------------------------------------------
Purchases $ 15,408,966 $ 2,458,450
Sales 26,424,983 5,379,983
Florida Limited Portfolio Massachusetts Limited Portfolio
------------------------------------------------------------------------------
Purchases $ 30,414,260 $ 28,056,188
Sales 53,556,319 42,929,294
Michigan Limited Portfolio New Jersey Limited Portfolio
------------------------------------------------------------------------------
Purchases $ 2,800,361 $ 10,935,753
Sales 5,849,438 25,980,671
New York Limited Portfolio Ohio Limited Portfolio
------------------------------------------------------------------------------
Purchases $ 46,482,147 $ 7,878,596
Sales 74,278,193 13,032,705
Pennsylvania Limited Portfolio
------------------------------------------------------------------------------
Purchases $ 22,489,085
Sales 35,365,179
------------------------------------------------------------------------------
4 Federal Income Tax Basis of Investments
- --------------------------------------------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned by each Portfolio at March 31, 1998, as computed on a
federal income tax basis, are as follows:
California Limited Connecticut Limited
Portfolio Portfolio
------------------------------------------------------------------------------
Aggregate Cost $31,771,731 $ 9,154,495
------------------------------------------------------------------------------
Gross unrealized appreciation $ 1,715,752 $ 484,082
Gross unrealized depreciation -- (1,707)
------------------------------------------------------------------------------
Net unrealized appreciation $ 1,715,752 $ 482,375
------------------------------------------------------------------------------
Florida Limited Massachusetts Limited
Portfolio Portfolio
------------------------------------------------------------------------------
Aggregate Cost $68,566,219 $53,095,573
------------------------------------------------------------------------------
Gross unrealized appreciation $ 3,487,947 $ 2,871,538
Gross unrealized depreciation (42,508) (4,788)
------------------------------------------------------------------------------
Net unrealized appreciation $ 3,445,439 $ 2,866,750
------------------------------------------------------------------------------
Michigan Limited New Jersey Limited
Portfolio Portfolio
------------------------------------------------------------------------------
Aggregate Cost $11,228,522 $42,060,899
------------------------------------------------------------------------------
Gross unrealized appreciation $ 961,949 $ 2,822,748
Gross unrealized depreciation (2,316) (25,691)
------------------------------------------------------------------------------
Net unrealized appreciation $ 959,633 $ 2,797,057
------------------------------------------------------------------------------
New York Limited Ohio Limited
Portfolio Portfolio
------------------------------------------------------------------------------
Aggregate Cost $71,325,400 $22,897,549
------------------------------------------------------------------------------
Gross unrealized appreciation $ 3,514,690 $ 1,167,395
Gross unrealized depreciation (56,956) (5,035)
------------------------------------------------------------------------------
Net unrealized appreciation $ 3,457,734 $ 1,162,360
------------------------------------------------------------------------------
Pennsylvania Limited
Portfolio
------------------------------------------------------------------------------
Aggregate Cost $53,360,058
------------------------------------------------------------------------------
Gross unrealized appreciation $ 2,946,242
Gross unrealized depreciation (6,265)
------------------------------------------------------------------------------
Net realized appreciation $ 2,939,977
------------------------------------------------------------------------------
5 Line of Credit
- --------------------------------------------------------------------------------
The Portfolios participate with other portfolios and funds managed by BMR
and EVM and its affiliates in a $100 million unsecured line of credit
agreement with a group of banks. The Portfolios may temporarily borrow from
the line of credit to satisfy redemption requests or settle investment
transactions. Interest is charged to each portfolio or fund based on its
borrowings at an amount above either the Eurodollar rate or federal funds
rate. In addition, a fee computed at an annual rate of 0.10% on the daily
unused portion of the line of credit is allocated among the participating
portfolios and funds at the end of each quarter. At March 31, 1998, the
Florida Limited Portfolio, Massachusetts Limited Portfolio, Michigan Limited
Portfolio and Ohio Limited Portfolio had balances outstanding pursuant to
this line of credit of $916,000, $198,000, $354,000 and $256,000,
respectively. The Portfolios did not have any significant borrowings or
allocated fees during the year ended March 31, 1998.
6 Financial Instruments
- --------------------------------------------------------------------------------
The Portfolios regularly trade in financial instruments with off-balance
sheet risk in the normal course of their investing activities to assist in
managing exposure to various market risks. These financial instruments
include futures contracts and may involve, to a varying degree, elements of
risk in excess of the amounts recognized for financial statement purposes.
The notional or contractual amounts of these instruments represent the
investment a Portfolio has in particular classes of financial instruments
and does not necessarily represent the amounts potentially subject to risk.
The measurement of the risks associated with these instruments is meaningful
only when all related and offsetting transactions are considered.
A summary of obligations under these financial instruments at March 31,
1998, is as follows:
<TABLE>
<CAPTION>
Net Unrealized
Limited Expiration Futures Appreciation/
Portfolio Date Contracts Position (Depreciation)
------------- ---------- ---------------------- -------- -------------
<S> <C> <C> <C>
California 6/98 13 U.S. Treasury Bonds Short $ 209
Connecticut 6/98 6 U.S. Treasury Bonds Short $ (3,630)
Florida 6/98 35 U.S. Treasury Bonds Short $(11,838)
Massachusetts 6/98 27 U.S. Treasury Bonds Short $(15,948)
Michigan 6/98 5 U.S. Treasury Bonds Short $ (2,436)
New Jersey 6/98 24 U.S. Treasury Bonds Short $(10,457)
New York 6/98 41 U.S. Treasury Bonds Short $(17,434)
Ohio 6/98 12 U.S. TreasuryBonds Short $ (3,457)
Pennsylvania 6/98 21 U.S. Treasury Bonds Short $ 3,369
</TABLE>
<PAGE>
Limited Maturity Municipals Portfolio as of March 31, 1998
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
To the Trustees and Shareholders of
California Limited Maturity Municipals Portfolio Connecticut Limited Maturity
Municipals Portfolio Florida Limited Maturity Municipals Portfolio
Massachusetts Limited Maturity Municipals Portfolio
Michigan Limited Maturity Municipals Portfolio New Jersey Limited Maturity
Municipals Portfolio New York Limited Maturity Municipals Portfolio Ohio
Limited Maturity Municipals Portfolio Pennsylvania Limited Maturity Municipals
Portfolio:
- --------------------------------------------------------------------------------
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of California Limited Maturity
Municipals Portfolio, Connecticut Limited Maturity Municipals Portfolio,
Florida Limited Maturity Municipals Portfolio, Massachusetts Limited Maturity
Municipals Portfolio, Michigan Limited Maturity Municipals Portfolio, New
Jersey Limited Maturity Municipals Portfolio, New York Limited Maturity
Municipals Portfolio, Ohio Limited Maturity Municipals Portfolio, and
Pennsylvania Limited Maturity Municipals Portfolio, (the Portfolios) as of
March 31, 1998, the related statements of operations for the year then ended,
the statements of changes in net assets for the years ended March 31, 1998,
and 1997 and the supplementary data for each of the years in the five-year
period ended March 31, 1998. These financial statements and supplementary data
are the responsibility of the Trust's management. Our responsibility is to
express an opinion on these financial statements and supplementary data based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
supplementary data are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned at March 31,1998 by correspondence with the custodian and brokers;
where replies were not received from brokers, we performed other audit
procedures. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and supplementary data present
fairly, in all material respects, the financial position of the aforementioned
Portfolios, as of March 31, 1998, the results of their operations, the changes
in their net assets and their supplementary data for the respective stated
periods in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
May 1, 1998
<PAGE>
EV Marathon Limited Maturity Municipals Funds as of March 31, 1998
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT
- --------------------------------------------------------------------------------
EV Marathon Limited Maturity Municipals Funds
Officers Independent Trustees
THOMAS J. FETTER DONALD R. DWIGHT
President President, Dwight Partners, Inc.
JAMES B. HAWKES SAMUEL L. HAYES, III
Vice President and Trustee Jacob H. Schiff Professor of Investment
Banking,
Harvard University Graduate School of
ROBERT B. MACINTOSH Business Administration
Vice President
NORTON H. REAMER
JAMES L. O'CONNOR President and Director, United Asset
Treasurer Management Corporation
ALAN R. DYNNER JOHN L. THORNDIKE
Secretary Formerly Director, Fiduciary Company
Incorporated
JACK L. TREYNOR
Investment Adviser and Consultant
Limited Maturity Municipals Portfolios
Officers Independent Trustees
THOMAS J. FETTER DONALD R. DWIGHT
President President, Dwight Partners, Inc.
JAMES B. HAWKES SAMUEL L. HAYES, III
Vice President and Trustee Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate
School of Business Administration
ROBERT B. MACINTOSH
Vice President
NORTON H. REAMER
President and Director, United Asset
WILLIAM H. AHERN, JR. Management Corporation
Vice President and Portfolio
Manager of Connecticut,
Florida, Massachusetts, JOHN L. THORNDIKE
Michigan, New Jersey, Formerly Director, Fiduciary Company
New York, and Incorporated
Ohio Limited Maturity
Municipals Portfolios
JACK L. TREYNOR
Investment Adviser and Consultant
CYNTHIA J. CLEMSON
Vice President and Portfolio
Manager of California Limited
Maturity Municipals Portfolio
TIMOTHY T. BROWSE
Vice President and Portfolio
Manager of Pennsylvania Limited
Maturity Municipals Portfolio
JAMES L. O'CONNOR
Treasurer
ALAN R. DYNNER
Secretary
<PAGE>
INVESTMENT ADVISER OF THE LIMITED MATURITY MUNICIPALS PORTFOLIOS
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF EV MARATHON LIMITED MATURITY MUNICIPALS FUNDS
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, Inc.
Attention: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
INDEPENDENT AUDITORS
Deloitte & Touche LLP
125 Summer Street
Boston, MA 02110
EATON VANCE INVESTMENT TRUST
24 FEDERAL STREET
BOSTON, MA 02110
- -------------------------------------------------------------------------------
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its
distribution plan, sales charges and expenses. Please read the prospectus
carefully before you invest or send money.
- -------------------------------------------------------------------------------
M-9LTFSRC-5/98
