<PAGE>
[LOGO] MUTUAL FUNDS
FOR PEOPLE [Picture of Brick Wall]
WHO PAY [Education Sign]
TAXES
ANNUAL REPORT MARCH 31, 1999
[Photo of Highway at Night] EATON VANCE
NATIONAL
LIMITED MATURITY
MUNICIPALS FUND
[Photo of Suspension Bridge]
<PAGE>
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
LETTER TO SHAREHOLDERS
[LOGO] Eaton Vance National Limited Maturity Municipals Fund, Class A,
had a total return of 3.9% for the year ended March 31, 1999.
That return was the result of a decline in net asset value (NAV)
to $10.49 on March 31, 1999 from $10.58 on March 31, 1998, and
the reinvestment of $0.519 in dividends exempt from regular
federal income tax.(1)
Class B shares had a total return of 3.3% for the year ended March 31, 1999,
the result of a decline in NAV to $10.49 from $10.58, and the reinvestment of
$0.436 in dividends exempt from regular federal income tax.(1)
Class C shares had a total return of 3.2% for the year ended March 31, 1999,
the result of a decline in NAV to $9.82 from $9.92, and the reinvestment of
$0.418 in dividends exempt from regular federal income tax.(1)
Based on the Fund's most recent dividends and net asset values of $10.49,
$10.49, and $9.82, respectively, the Fund's Class A, B, and C shares had
distribution rates of 5.10%, 4.29%, and 4.28%, respectively, at March 31,
1999.(2) SEC 30-day yields for Classes A, B, and C shares were 4.26%, 3.61%,
and 3.50%, respectively, at March 31, 1999.(3)
Municipal bonds trailed Treasuries through most of 1998, but rallied in the
first quarter of 1999...
Through much of 1998, the Treasury bond market advanced strongly, amid
continued low inflation and fears that an Asian financial crisis could
provoke an economic slowdown. Municipal bonds trailed the Treasury market
through much of 1998, but gained ground in the first quarter of 1999. A heavy
new issue calendar produced supply pressures for the tax-exempt market, with
more than $300 billion in new municipal issues coming to market in 1998.
However, in the first three months of 1999, supply eased somewhat.
Taxes remain high, while tax reform is again stalled in Congress...
The election year promises of tax cuts appear to have reached a roadblock in
Washington. Meanwhile, it is estimated that the average American worked until
May 10 to pay his or her taxes in 1998, according to the Tax Foundation. That
poses an enormous financial burden - and an increasing challenge for those
who may be simultaneously paying for college tuition, caring for elderly
parents, or trying to plan for their own retirement.
Amid low inflation and growing federal budget surpluses, we believe that the
outlook for bonds remains favorable. At their recent levels, municipal bonds
are especially attractive. Moreover, municipal bonds remain an excellent
fixed-income alternative - to diversify one's investment portfolio and to
help lower one's tax burden.
Sincerely,
/s/ Thomas J. Fetter
Thomas J. Fetter
President
May 9, 1999
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Fund Information
as of March 31, 1999
Performance(4) Class A Class B Class C Five Largest Sector Weightings(5)
- ---------------------------------------------------------------------------------- --------------------------------------
Average Annual Total Returns (at net asset value)
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
One Year 3.9% 3.3% 3.2% ESCROWED/PREREFUNDED 19.1%
Five Years N.A. 5.0 4.7
Life of Fund+ 6.6 5.2 3.8 INDUSTRIAL DEVELOPMENT BONDS 14.8%
SEC Average Annual Total Returns (including sales charge or applicable CDSC) GENERAL OBLIGATIONS 9.6%
- ---------------------------------------------------------------------------------- COGENERATION 8.8%
One Year 1.6% 0.3% 2.3%
Five Years N.A. 5.0 4.7 HOSPITAL 7.1%
Life of Fund+ 5.8 5.2 3.8
+Inception dates: Class A: 6/27/96; Class B: 5/22/92; Class C: 12/8/93
- -------------------------------------------------------------------------------
Federal income tax information on distributions. For federal income tax
purposes, 99.76% of the total dividends paid by the Fund from net investment
income during the year ended March 31, 1999 was designated as an
exempt-interest dividend.
- -------------------------------------------------------------------------------
(1) These returns do not include the 2.25% maximum sales charge for the Fund's
Class A shares or the applicable contingent deferred sales charge (CDSC) for
Class B or C shares. A portion of the Fund's income may be subject to federal
income and/or alternative minimum tax. Income may be subject to state tax.
(2) The Fund's distribution rate represents actual distributions paid to
shareholders and is calculated by dividing the last distribution per share
(annualized) by the net asset value. (3) The Fund's SEC yield is calculated by
dividing the net investment income per share for the 30-day period by the
offering price at the end of the period and annualizing the result. (4) Returns
are historical and are calculated by determining the percentage change in net
asset value with all distributions reinvested. SEC returns for Class A
reflect the maximum 2.25% sales charge. SEC returns for Class B reflect
applicable CDSC based on the following schedule: 3% - 1st year; 2.5% - 2nd
year; 2% - 3rd year; 1% - 4th year. Class C 1-year SEC return reflects 1%
CDSC. (5) Five largest sector weightings account for 59.4% of the Portfolio's
investments, determined by dividing the total market value of the holdings by
the total investments of the Portfolio. Holdings are subject to change.
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.
</TABLE>
2
<PAGE>
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
MANAGEMENT DISCUSSION
[Photo] An interview with
William H. Ahern,
William H. Ahern portfolio manager of
Portfolio Manager Eaton Vance National Limited
Maturity Municipals Fund.
Q: Bill, the financial markets featured a good deal
of volatility in the past year. How did the
intermediate segment of the municipal bond market
fare in this volatile climate?
A: The past fiscal year proved a very challenging climate for fixed-income
investors, with global currency crises brewing and growing economic
concerns over Russia and Brazil. Intermediate-term municipals (i.e., those
with maturities of between 3 and nine years) generally produced slightly
lower returns than longer-term bonds for the entire year. However, when the
financial markets were at their MOST volatile, intermediate-term bonds once
again showed less volatility than bonds with longer-term maturities.
The numbers tell the story. In October, financial worries in Asia, Russia
and Latin America combined with the Long-Term Capital debacle to drive
investors to the Treasury market. That trend significantly weakened
non-Treasury markets - including municipal bonds. In the October flight to
Treasuries, yields on existing 30-year municipal bonds rose from 4.97% to
5.03%. However, yields on existing five-year municipal bond yields actually
DECLINED during the same period, falling from 3.92% to 3.81%. The
outperformance of the intermediate sector in a period of financial turmoil
demonstrated a major reason they appeal to conservative investors.
Q: How did the market's volatility affect your strategy?
A: The Portfolio was well-positioned to weather the market's volatility. In an
uncertain economic environment, fixed-income investors may seek to shorten
the duration of their investments. Consistent with its investment mandate,
the Portfolio maintained a shorter duration than those typically maintained
by long-term funds. At March 31, the Portfolio's average dollar-weighted
duration was 6.5 years. In addition, the Portfolio was extremely well
diversified along market sectors and industries. Finally, the Portfolio was
well-served by its premium bonds. Typically, these high-coupon issues have
provided an extra measure of protection in a difficult market environment.
Q: How have you positioned the Portfolio in recent months?
A: Escrowed bonds - bonds that have been prerefunded in anticipation of their
call date and backed by Treasury bonds were the Portfolio's largest sector
weighting at March 31, constituting 19.1% of the Portfolio. Industrial
develop-
<TABLE>
<CAPTION>
Portfolio Quality Weightings(1) Portfolio Overview(1) (1)Because the Fund is actively managed, Portfolio
- ----------------------------- ------------------- Ratings and Portfolio Overview are subject to change.
<S> <C> <C>
AAA 12.9% Number of Issues 87
AA 7.7% Average Rating BBB+
[Pie Chart] A 17.1% Duration 6.5 Yrs.
Not rated 42.3% Effective Maturity 9.1 Yrs.
B 1.0% Average Call 8.0 Yrs.
BB 3.3% Average Dollar Price $102.00
BBB 20.5%
</TABLE>
- -------------------------------------------------------------------------------
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.
- -------------------------------------------------------------------------------
3
<PAGE>
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
MANAGEMENT DISCUSSION CONT'D
ment bonds (IDB) represented another 14.8% of the Portfolio. General
obligations of city, state, and agency issuers were the third largest
weighting, at 9.6% of the Portfolio.
Q: Could you define industrial development bonds and indicate why you like
them?
A: Certainly. Various development agencies at the state and local levels issue
industrial development bonds to help promote economic and industrial
development. The bonds finance public works, such as airports or port
facilities; industrial developments for private companies; and pollution
control facilities designed to promote a cleaner environment.
These bonds benefit the public because they typically finance industrial
projects and promote job creation; they are popular with private
enterprise because they provide vital financial support; and they're
appealing to investors because they may offer very attractive tax-exempt
yields.
We made a major effort to further diversify the Portfolio's IDB holdings,
especially in light of an uncertain economic climate. The Portfolio's bonds
financed projects for companies that included International Paper Co.,
American Airlines, and consumer products leader Proctor & Gamble.
- -------------------------------------------------------------------------------
Your Investment at Work [GRAPHIC]
New Jersey Economic
Development Authority
The Chelsea at East Brunswick
- - These bonds were issued to finance the construction costs of an assisted
living facility in East Brunswick run by the Chelsea Management Group.
- - The facility provides senior citizens with an attractive living
alternative, featuring a wide array of services, including meals,
housekeeping, transportation, exercise and leisure activities.
- - The bond carries an exceptional 8.00% coupon. This issue was representative
of the Portfolio's efforts to find good income opportunities in
research-intensive, non-rated bonds.
- -------------------------------------------------------------------------------
Q: How did the Portfolio benefit from its escrowed bond holdings?
A: Escrowed bonds are bonds that have been pre-refunded by their issuers.
Typically, issuers take advantage of a significant decline in interest
rates, such as we've seen in recent years, to refinance outstanding debt.
While the issuer is able to lower its interest costs, the outstanding bonds
are backed by U.S. Treasury bonds and therefore regarded as very high
quality. The Portfolio benefited because the value of these bonds increased
significantly following their pre-refunding.
Q: Are you still seeing value in the non-rated segment of the market?
A: Yes, we've continued to find value among non-rated bonds, although we've
become more selective. There has been an ongoing trend in recent years
toward the issuance of insured bonds. That, in turn, has created an
increasingly generic municipal bond market, with fewer opportunities
among single-A and double-A rated bonds. As a result, quality spreads
have narrowed dramatically. Lower-rated and non-rated rated bonds have
subsequently outperformed higher-rated issues such as insured bonds.
In that changing marketplace, we have made the non-rated segment a
specialty at Eaton Vance. By increasing our research and resources in
this part of the market, we've been able to uncover promising non-rated
opportunities. However, at this advanced state of the economic
expansion, we believe it is prudent to become increasingly selective
about the projects in which we participate.
Q: In what sectors have you found opportunities in non-rated bonds?
A: Our non-rated bond holdings are very well diversified, including housing
bonds, general obligations, hospitals, industrial development bonds, and
senior living/life care bonds.
4
<PAGE>
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
MANAGEMENT DISCUSSION CONT'D
Senior living and life care facilities have continued to play an
important role in the Portfolio. With the aging of the population,
providing housing and ongoing care for senior citizens has become a
growth industry.
Senior living facilities provide a range of services that can be tailored
to the particular needs of individual residents. Facilities may include
apartments for those who are able to live independently, as well as more
advanced care for those who need day-to-day assistance. This concept has
become so popular in recent years that there is a danger of overbuilding in
some areas. That is where our research and experience have given us a
distinct advantage.
Q: Bill, what is your outlook for the municipal market in the coming year?
A: For several years running, the economy has registered fairly strong growth
while inflation has not posed a significant threat. That suggests a good
climate for the bond market. In addition, the elimination of federal budget
deficits should result in a reduced supply of bonds in coming years -
another positive trend.
As for the municipal market, there appears to be unusually good value in
municipal bonds. Clearly, while many investors have enjoyed the
unprecedented returns the equity market has produced in recent years, we
believe it is a prudent move to re-allocate some assets to fixed-income
investments, especially with increasing global tensions. The uncertainties
of global politics could well contribute to more market volatility in the
future. For risk-averse investors who want a competitive level of tax-free
income, I believe the intermediate-term municipals merit some attention.1
(1) A portion of the Fund's income may be subject to federal income and/or
alternative minimum tax. Income may be subject to state tax.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EATON VANCE NATIONAL
LIMITED MATURITY MUNCIPALS FUND, CLASS B VS. LEHMAN BROTHERS 7-YEAR MUNICIPAL
BOND INDEX*
MAY 31, 1992 - MARCH 31, 1999
<TABLE>
<CAPTION>
DATE FUND/NAV LB7YMBI
<S> <C> <C> <C>
5/31/92 $10,000 $10,000
6/30/92 $10,120 $10,159
7/31/92 $10,459 $10,462
8/31/92 $10,327 $10,354
9/30/92 $10,391 $10,438
10/31/92 $10,274 $10,368
11/30/92 $10,517 $10,522
12/31/92 $10,613 $10,608
1/31/92 $10,722 $10,763
2/28/93 $11,041 $11,093
3/31/93 $10,905 $10,947
4/30/93 $10,983 $11,015
5/31/93 $11,031 $11,048
6/30/93 $11,157 $11,250
7/31/93 $11,180 $11,252
8/31/93 $11,344 $11,451
9/30/93 $11,441 $11,577
10/31/93 $11,464 $11,607
11/30/93 $11,391 $11,505
12/31/93 $11,549 $11,716
1/31/94 $11,652 $11,840
2/28/94 $11,465 $11,583
3/31/94 $11,134 $11,274
4/30/94 $11,193 $11,356
5/31/94 $11,258 $11,413
6/30/94 $11,224 $11,392
7/31/94 $11,357 $11,553
8/31/94 $11,381 $11,613
9/30/94 $11,281 $11,502
10/31/94 $11,171 $11,387
11/30/94 $11,023 $11,221
12/31/94 $11,180 $11,391
1/31/95 $11,369 $11,604
2/28/95 $11,556 $11,866
3/31/95 $11,627 $11,989
4/30/95 $11,635 $12,021
5/31/95 $11,821 $12,341
6/30/95 $11,780 $12,330
7/31/95 $11,880 $12,487
8/31/95 $11,965 $12,634
9/30/95 $12,029 $12,683
10/31/95 $12,117 $12,793
11/30/95 $12,227 $12,934
12/31/95 $12,279 $13,003
1/31/96 $12,368 $13,129
2/28/96 $12,302 $13,084
3/31/96 $12,151 $12,956
4/30/96 $12,133 $12,932
5/31/96 $12,113 $12,913
6/30/96 $12,148 $13,012
7/31/96 $12,201 $13,120
8/31/96 $12,232 $13,127
9/30/96 $12,351 $13,246
10/31/96 $12,442 $13,388
11/30/96 $12,647 $13,612
12/31/96 $12,569 $13,570
1/31/97 $12,538 $13,619
2/28/97 $12,662 $13,732
3/31/97 $12,553 $13,554
4/30/97 $12,658 $13,624
5/31/97 $12,803 $13,795
6/30/97 $12,900 $13,927
7/31/97 $13,133 $14,249
8/31/97 $13,053 $14,149
9/30/97 $13,163 $14,298
10/31/97 $13,221 $14,383
11/30/97 $13,296 $14,434
12/31/97 $13,493 $14,610
1/31/98 $13,669 $14,763
2/28/98 $13,719 $14,777
3/31/98 $13,747 $14,777
4/30/98 $13,702 $14,691
5/31/98 $13,852 $14,907
6/30/98 $13,899 $14,949
7/31/98 $13,905 $14,999
8/31/98 $14,048 $15,227
9/30/98 $14,132 $15,423
10/31/98 $14,112 $15,445
11/30/98 $14,125 $15,487
12/31/98 $14,159 $15,520
1/31/99 $14,250 $15,747
2/28/99 $14,196 $15,657
3/31/99 $14,200 $15,652
</TABLE>
<TABLE>
<CAPTION>
Performance** Class A Class B Class C
- ----------------------------------------------------------
Average Annual Total Returns (at net asset value)
- ----------------------------------------------------------
<S> <C> <C> <C>
One Year 3.9% 3.3% 3.2%
Five Years N.A. 5.0 4.7
Life of Fund+ 6.6 5.2 3.8
SEC Average Annual Total Returns (including sales charge or
applicable CDSC)
- -----------------------------------------------------------
One Year 1.6% 0.3% 2.3%
Five Years N.A. 5.0 4.7
Life of Fund+ 5.8 5.2 3.8
</TABLE>
+Inception dates: Class A: 6/27/96; Class B: 5/22/92; Class C: 12/8/93
* Source: TowersData, Bethesda, MD.
The chart compares the total return of the Fund's Class B shares with that of
the Lehman Brothers 7-Year Municipal Bond Index, a broad-based, unmanaged
market index of intermediate-term municipal bonds. Returns are calculated by
determining the percentage change in net asset value (NAV) with all
distributions reinvested. The lines on the chart represent the total returns
of $10,000 hypothetical investments in the Fund and the Index. The Index's
total return does not reflect commissions or expenses that would have been
incurred if an investor individually purchased or sold the securities
represented in the Index. It is not possible to invest directly in an Index.
An investment in the Fund's Class A shares on 6/30/96 at net asset value would
have been worth $11,911 on March 31, 1999; $11,645, including the Fund's 2.25%
maximum sales charge. An investment in the Fund's Class C shares on 12/31/93
at net asset value would have been worth $12,165 on March 31, 1999.
**Returns are calculated by determining the percentage change in net asset value
(NAV) with all distributions reinvested. SEC returns for Class A reflect the
maximum 2.25% sales charge. SEC returns for Class B reflect applicable CDSC
based on the following schedule: 3% - 1st year; 2.5% - 2nd year; 2% - 3rd
year; 1% - 4th year. SEC 1-Year return for Class C reflects
1% CDSC.
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.
5
<PAGE>
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF MARCH 31, 1999
<S> <C>
Assets
- ------------------------------------------------------
Investment in National Limited Maturity
Municipals Portfolio,
at value (identified cost,
$85,519,419) $ 89,966,384
Receivable for Fund shares sold 41,671
- ------------------------------------------------------
TOTAL ASSETS $ 90,008,055
- ------------------------------------------------------
Liabilities
- ------------------------------------------------------
Dividends payable $ 186,050
Payable for Fund shares redeemed 65,209
Other accrued expenses 65,741
- ------------------------------------------------------
TOTAL LIABILITIES $ 317,000
- ------------------------------------------------------
NET ASSETS $ 89,691,055
- ------------------------------------------------------
Sources of Net Assets
- ------------------------------------------------------
Paid-in capital $ 89,125,238
Accumulated net realized loss from
Portfolio (computed on the basis of
identified cost) (4,054,410)
Accumulated undistributed net investment
income 173,262
Net unrealized appreciation from
Portfolio (computed on the basis of
identified cost) 4,446,965
- ------------------------------------------------------
TOTAL $ 89,691,055
- ------------------------------------------------------
Class A Shares
- ------------------------------------------------------
NET ASSETS $ 73,047,714
SHARES OUTSTANDING 6,964,091
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 10.49
MAXIMUM OFFERING PRICE PRICE PER SHARE
(100 DIVIDED BY 97.75 of $10.49) $ 10.73
- ------------------------------------------------------
Class B Shares
- ------------------------------------------------------
NET ASSETS $ 5,450,483
SHARES OUTSTANDING 519,616
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 10.49
- ------------------------------------------------------
Class C Shares
- ------------------------------------------------------
NET ASSETS $ 11,192,858
SHARES OUTSTANDING 1,140,201
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 9.82
- ------------------------------------------------------
</TABLE>
On sales of $100,000 or more, the offering price of Class A shares is reduced.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
MARCH 31, 1999
<S> <C>
Investment Income
- ------------------------------------------------------
Interest allocated from Portfolio $ 5,373,501
Expenses allocated from Portfolio (543,355)
- ------------------------------------------------------
NET INVESTMENT INCOME FROM PORTFOLIO $ 4,830,146
- ------------------------------------------------------
Expenses
- ------------------------------------------------------
Trustees fees and expenses $ 2,281
Distribution and service fees
Class A 103,431
Class B 65,596
Class C 92,905
Transfer and dividend disbursing agent
fees 80,371
Registration fees 54,956
Printing and postage 20,916
Legal and accounting services 17,721
Custodian fee 13,282
Amortization of organization expenses 12,873
Miscellaneous 8,173
- ------------------------------------------------------
TOTAL EXPENSES $ 472,505
- ------------------------------------------------------
NET INVESTMENT INCOME $ 4,357,641
- ------------------------------------------------------
Realized and Unrealized
Gain (Loss) from Portfolio
- ------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $ 650,727
Financial futures contracts (278,032)
- ------------------------------------------------------
NET REALIZED GAIN $ 372,695
- ------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments $ (1,202,223)
Financial futures contracts 19,807
- ------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $ (1,182,416)
- ------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS $ (809,721)
- ------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 3,547,920
- ------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Increase (Decrease) YEAR ENDED YEAR ENDED
in Net Assets MARCH 31, 1999 MARCH 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------
From operations --
Net investment income $ 4,357,641 $ 3,838,067
Net realized gain (loss) 372,695 (124,047)
Net change in unrealized appreciation
(depreciation) (1,182,416) 3,832,336
- ---------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 3,547,920 $ 7,546,356
- ---------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (3,615,580) $ (2,409,865)
Class B (307,519) (1,219,304)
Class C (398,999) --
In excess of net investment income
Class C (6,536) --
- ---------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (4,328,634) $ (3,629,169)
- ---------------------------------------------------------------------------
Transactions in shares of beneficial
interest --
Proceeds from sale of shares
Class A $ 7,371,984 $ --
Class B 2,345,291 2,211,837
Class C 9,829,014 --
Issued in reorganization of EV
Traditional and Classic National
LimitedMaturity Municipals Funds
Class A 12,949,960 --
Class C 7,722,266 --
Net asset value of shares issued to
shareholders in payment
ofdistributions declared
Class A 1,179,583 894,751
Class B 187,434 671,538
Class C 293,045 --
Cost of shares redeemed
Class A (13,891,191) (15,646,244)
Class B (2,497,374) (6,283,507)
Class C (6,547,691) --
Net asset value of shares exchanged
Class A 6,070,355 35,328,625
Class B (6,070,355) (35,328,625)
- ---------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM FUND SHARE TRANSACTIONS $ 18,942,321 $ (18,151,625)
- ---------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS $ 18,161,607 $ (14,234,438)
- ---------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
Net Assets MARCH 31, 1999 MARCH 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------
At beginning of year $ 71,529,448 $ 85,763,886
- ---------------------------------------------------------------------------
AT END OF YEAR $ 89,691,055 $ 71,529,448
- ---------------------------------------------------------------------------
Accumulated
undistributed
net investment income
included in net assets
- ---------------------------------------------------------------------------
AT END OF YEAR $ 173,262 $ 140,445
- ---------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
------------------------------------------------------
1999 1998
------------------------------- ----------------------
CLASS A CLASS B CLASS C CLASS A CLASS B
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Net asset value -- Beginning of year $ 10.580 $10.580 $ 9.920 $ 10.070 $10.070
- ---------------------------------------------------------------------------------------------------
Income from operations
- ---------------------------------------------------------------------------------------------------
Net investment income $ 0.519 $ 0.412 $ 0.407 $ 0.527 $ 0.454(2)
Net realized and unrealized gain (loss) (0.090) (0.066) (0.089) 0.488 0.488
- ---------------------------------------------------------------------------------------------------
TOTAL INCOME FROM OPERATIONS $ 0.429 $ 0.346 $ 0.318 $ 1.015 $ 0.942
- ---------------------------------------------------------------------------------------------------
Less distributions
- ---------------------------------------------------------------------------------------------------
From net investment income $ (0.519) $(0.436) $(0.411) $ (0.505) $(0.432)
In excess of net investment income -- -- (0.007) -- --
From net realized gain -- -- -- -- --
- ---------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.519) $(0.436) $(0.418) $ (0.505) $(0.432)
- ---------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $ 10.490 $10.490 $ 9.820 $ 10.580 $10.580
- ---------------------------------------------------------------------------------------------------
TOTAL RETURN(4) 3.89% 3.29% 3.24% 10.50% 9.52%
- ---------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $ 73,048 $ 5,450 $11,193 $ 59,992 $11,538
Ratios (As a percentage of average daily net
assets):
Expenses(5)(6) 0.98% 1.73% 1.81% 0.99% 1.73%
Expenses after custodian fee reduction(5) 0.97% 1.72% 1.80% 0.98% 1.72%
Net investment income 4.96% 4.23% 4.10% 5.16% 4.42%
- ---------------------------------------------------------------------------------------------------
<CAPTION>
1997 1996 1995
----------------------- ------------- -------------
CLASS A(1) CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C>
- ---------------------------------------------
Net asset value -- Beginning of year $10.030 $ 10.170 $ 10.130 $ 10.160
- ---------------------------------------------
Income from operations
- ---------------------------------------------
Net investment income $ 0.393 $ 0.428 $ 0.413 $ 0.400
Net realized and unrealized gain (loss) 0.033(3) (0.098) 0.040 0.033
- ---------------------------------------------
TOTAL INCOME FROM OPERATIONS $ 0.426 $ 0.330 $ 0.453 $ 0.433
- ---------------------------------------------
Less distributions
- ---------------------------------------------
From net investment income $(0.386) $ (0.430) $ (0.413) $ (0.400)
In excess of net investment income -- -- -- (0.058)
From net realized gain -- -- -- (0.005)
- ---------------------------------------------
TOTAL DISTRIBUTIONS $(0.386) $ (0.430) $ (0.413) $ (0.463)
- ---------------------------------------------
NET ASSET VALUE -- END OF YEAR $10.070 $ 10.070 $ 10.170 $ 10.130
- ---------------------------------------------
TOTAL RETURN(4) 4.06% 3.30% 4.51% 4.43%
- ---------------------------------------------
Ratios/Supplemental Data
- ---------------------------------------------
Net assets, end of year (000's omitted) $37,072 $ 48,692 $112,027 $141,289
Ratios (As a percentage of average daily net
assets):
Expenses(5)(6) 0.99%(7) 1.69% 1.64% 1.57%
Expenses after custodian fee reduction(5) 0.97%(7) 1.67% 1.63% --
Net investment income 5.14%(7) 4.37% 4.04% 3.99%
- ---------------------------------------------
</TABLE>
(1) For the period from the start of business, June 27, 1996, to March 31,
1997.
(2) Net investment income per share was computed using average shares
outstanding.
(3) The per share amount is not in accord with the net realized and unrealized
gain (loss) on investments 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.
(4) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return is
not computed on an annualized basis.
(5) Includes the Fund's share of the Portfolio's allocated expenses.
(6) 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 ratio for the
year ended March 31, 1995 has not been adjusted to reflect this change.
(7) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
NOTES TO FINANCIAL STATEMENTS
1 Significant Accounting Policies
- -------------------------------------------
Eaton Vance National Limited Maturity Municipals Fund (the Fund) is a
diversified series of Eaton Vance Investment Trust (the Trust). The Trust is
an entity of the type commonly known as a Massachusetts business trust and is
registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company. The Fund offers three classes of
shares: Class A (formerly Class II), Class B (formerly Class I) and Class C
shares. Class A shares are sold subject to a sales charge imposed at the time
of purchase. Class B and Class C shares are sold at net asset value and are
subject to a contingent deferred sales charge (see Note 6). Class B shares
held for the longer of (i) four years or (ii) the time at which the
contingent deferred sales charge applicable to such shares expires will
automatically convert to Class A shares. Each class represents a pro rata
interest in the Fund, but votes separately on class-specific matters and (as
noted below) is subject to different expenses. Realized and unrealized gains
or losses are allocated daily to each class of shares based on the relative
net assets of each class to the total net assets of the Fund. Net investment
income, other than class specific expenses, is allocated daily to each class
of shares based upon the ratio of the value of each class' paid shares to the
total value of all paid shares. Each class of shares differs in its
distribution plan and certain other class specific expenses. The Fund invests
all of its investable assets in interests in the National Limited Maturity
Municipals Portfolio (the Portfolio), a New York Trust, having the same
investment objective as the Fund. The value of the Fund's investment in the
Portfolio reflects the Fund's proportionate interest in the net assets of the
Portfolio (99.99% at March 31, 1999). The performance of the Fund is directly
affected by the performance of the Portfolio. The financial statements of the
Portfolio, including the portfolio of investments, are included elsewhere in
this report and should be read in conjunction with the Fund's financial
statements.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
A Investment Valuation -- Valuation of securities by the Portfolio is discussed
in Note 1A of the Portfolio's Notes to Financial Statements which are
included elsewhere in this report.
B Income -- The Fund's net investment income consists of the Fund's pro rata
share of the net investment income of the Portfolio, less all actual and
accrued expenses of the Fund determined in accordance with generally accepted
accounting principles.
C Federal Taxes -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders each year all of its taxable and tax-exempt
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is necessary. At March 31, 1999,
the Fund, for federal income tax purposes, had a capital loss carryover of
$4,054,411 which will reduce the taxable income arising from future net
realized gain on investments, if any, to the extent permitted by the Internal
Revenue Code and thus will reduce the amount of distributions to shareholders
which would otherwise be necessary to relieve the Fund of any liability for
federal income tax. Such capital loss carryover will expire on March 31, 2003
($1,528,831), March 31, 2004 ($1,214,155), March 31, 2005 ($990,979), and
March 31, 2006 ($320,446). Dividends paid by the Fund from net interest on
tax-exempt municipal bonds allocated from the Portfolio are not includable by
shareholders as gross income for federal income tax purposes because the Fund
and Portfolio intend to meet certain requirements of the Internal Revenue
Code applicable to regulated investment companies which will enable the Fund
to pay exempt-interest dividends. The portion of such interest, if any,
earned on private activity bonds issued after August 7, 1986, may be
considered a tax preference item to shareholders.
D Deferred Organization Expenses -- Costs incurred by the Fund in connection
with its organization are being amortized on the straight-line basis over
five years.
E Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expense during the reporting period. Actual results could
differ from those estimates.
F Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
to the Fund and the Portfolio. Pursuant to the respective custodian
agreements, IBT receives a fee reduced by credits which are determined based
on the average daily cash balances the Fund or the Portfolio maintains with
IBT. All significant credit balances
9
<PAGE>
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
used to reduce the Fund's custodian fees are reported as a reduction of
operating 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 the Fund is determined daily and substantially all of the
net income so determined is declared as a dividend to shareholders of record
at the time of declaration. 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 the 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 Fund distinguishes between
distributions on a tax basis and a financial reporting basis. Generally
accepted accounting principles require that only distributions in excess of
tax basis earnings and profits be reported in the financial statements as a
return of capital. Differences in the recognition or classification of income
between the financial statements and tax earnings and profits which result in
over distributions for financial statement purposes only are classified as
distributions in excess of net investment income or accumulated net realized
gains. Permanent differences between book and tax accounting relating to
distributions are reclassified to paid-in capital. The tax treatment of
distributions for the calendar year will be reported to shareholders prior to
February 1, 2000 and will be based on tax accounting methods which may differ
from amounts determined for financial statement purposes.
3 Shares of Beneficial Interest
- -------------------------------------------
The Fund's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par
value). Such shares may be issued in a number of different classes.
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
-------------------------------
CLASS A 1999 1998
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 698,813 --
Issued to shareholders electing to
receive payments of distributions in
Fund shares 111,504 86,113
Redemptions (1,312,375) (1,509,686)
Exchange to Class A shares 573,363 3,411,349
Issued to EV Traditional National
Limited Maturity Municipals Fund
Shareholders 1,224,418 --
- -------------------------------------------------------------------------
NET INCREASE 1,295,723 1,987,776
- -------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
-------------------------------
CLASS B 1999 1998
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 221,173 212,978
Issued to shareholders electing to
receive payments of distributions in
Fund shares 17,715 65,151
Redemptions (236,471) (609,705)
Exchange to Class A shares (573,363) (3,411,349)
- -------------------------------------------------------------------------
NET DECREASE (570,946) (3,742,925)
- -------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED
CLASS C MARCH 31, 1999
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 993,040
Issued to shareholders electing to
receive payments of distributions in
Fund shares 29,613
Redemptions (661,276)
Issued to EV Classic National Limited
Maturity Municipals Fund Shareholders 778,824
- -------------------------------------------------------------------------
NET INCREASE 1,140,201
- -------------------------------------------------------------------------
</TABLE>
10
<PAGE>
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
4 Transactions with Affiliates
- -------------------------------------------
Eaton Vance Management (EVM) serves as the administrator of the Fund, but
receives no compensation. The Portfolio has engaged Boston Management and
Research (BMR), a subsidiary of EVM, to render investment advisory services.
See Note 2 of the Portfolio's Notes to Financial Statements which are
included elsewhere in this report. Certain of the officers and Trustees of
the Fund and the Portfolio are officers and directors/trustees of the above
organizations. Eaton Vance Distributors, Inc. (EVD), a subsidiary of EVM and
the Fund's principal underwriter, received $2,943 from the Fund as its
portion of the sales charge on sales of Class A shares for the year ended
March 31, 1999.
Except as to Trustees of the Fund and the Portfolio who are not members of
EVM's organization, officers and Trustees receive remuneration for their
services to the Fund out of such investment adviser fee.
5 Distribution and Service Plans
- -------------------------------------------
The Fund has adopted a distribution plan ("Class B Plan" and "Class C Plan")
pursuant to Rule 12b-1 under the Investment Company Act of 1940 and a service
plan ("Class A Plan,") (collectively, "the Plans"). The Class B and Class C
Plans require the Fund to pay EVD amounts equal to 1/365 of 0.75% of the
Fund's daily net assets attributable to Class B and Class C shares for
providing ongoing distribution services and facilities to the Fund. The Fund
will automatically discontinue payments to EVD during any period in which
there are no outstanding Uncovered Distribution Charges, which are equivalent
to the sum of (i) 3% of the aggregate amount received by the Fund for Class B
shares sold, plus (ii) interest calculated by applying the rate of 1% over
the prevailing prime rate to the outstanding balance of Uncovered
Distribution Charges of EVD of each respective class, reduced by the
aggregate amount of contingent deferred sales charges (see Note 6) and
amounts theretofore paid to or payable to EVD. The amount payable to EVD with
respect to each day is accrued on such day as a liability of the Fund and,
accordingly, reduces the Fund's net assets. For the year ended March 31,
1999, the Fund paid or accrued $54,772 and $72,138 for Class B and Class C
shares, respectively, to EVD, representing 0.75% of the average daily net
assets for Class B and Class C shares. At March 31, 1999, the amount of
Uncovered Distribution Charges of EVD calculated under the Plan was
approximately $352,000 and $4,502,000 for Class B and Class C shares,
respectively.
In addition, the Plans also authorize each class to make payments of service
fees to EVD, Authorized Firms and other persons in amounts not exceeding
0.25% of the Fund's average daily net assets for each fiscal year. The
Trustees have initially implemented the Plans by authorizing the Fund to make
quarterly service fee payments to EVD and Authorized Firms in amounts not
expected to exceed 0.15% per annum of the Fund's average daily net assets
attributable to Class A and Class B shares based on the value of Fund shares
sold by such persons and remaining outstanding for at least one year. The
Class C Plan authorizes the Fund to make monthly payments of service fees in
amounts not expected to exceed 0.25% of the Fund's average daily net assets
attributable to Class C shares for any fiscal year. Service fee payments for
the year ended March 31, 1999, amounted to $103,431, $10,824, and $20,767 for
Class A, Class B, and Class C shares, respectively. Service fee payments are
made for personal services and/or the maintenance of shareholder accounts.
Service fees are separate and distinct from the sales commissions and
distribution fees payable by the Fund to EVD, and, as such are not subject to
automatic discontinuance when there are no outstanding Uncovered Distribution
Charges of EVD.
Certain officers and Trustees of the Fund are officers or directors of EVD.
6 Contingent Deferred Sales Charge
- -------------------------------------------
A contingent deferred sales charge (CDSC) is imposed on any redemption of
Class B shares made within four years of purchase. A CDSC is imposed on
certain Class C shares redeemed within one year of purchase. Generally, the
CDSC is based upon the lower of the net asset value at date of redemption or
date of purchase. No charge is levied on Class B and Class C shares acquired
by reinvestment of dividends or capital gains distributions. The CDSC for
Class B shares is imposed at declining rates that begin at 3% in the case of
redemptions in the first year of purchase. Class C shares are subject to a 1%
CDSC if redeemed within one year of purchase. No CDSC is levied on shares
which have been sold to EVM or its affiliates or to their respective
employees or clients. CDSC charges are paid to EVD to reduce the amount of
Uncovered Distribution Charges calculated under the Fund's Distribution Plan
(see Note 5). CDSC charges received when no Uncovered Distribution Charges
exist will be credited to the Fund. EVD received approximately $20,000 and
$1,000 of CDSCs paid by shareholders for Class B shares and Class C shares,
respectively, for the year ended March 31, 1999.
11
<PAGE>
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
7 Investment Transactions
- -------------------------------------------
Increases and decreases in the Fund's investment in the Portfolio for the
year ended March 31, 1999, aggregated $26,384,858 and $33,566,159,
respectively.
8 Transfer of Net Assets
- -------------------------------------------
On April 1, 1998, the existing Class I and Class II shares of EV Marathon
National Limited Maturity Municipals Fund were designated Class B and Class A
shares, respectively. In addition, the Fund acquired the net assets of the EV
Traditional National Limited Maturity Municipals Fund and EV Classic National
Limited Maturity Municipals Fund pursuant to an Agreement and Plan of
Reorganization dated June 23, 1997. In accordance with the agreement, EV
Marathon National Limited Maturity Municipals Fund, at the closing, issued
1,224,418 Class A shares and 778,824 Class C shares of the Fund having an
aggregate value of $12,949,960 and $7,722,266, respectively. As a result, the
Fund issued 0.965 shares of Class A and one share of Class C for each share
of EV Traditional National Limited Maturity Municipals Fund and EV Classic
National Limited Maturity Municipals Fund, respectively. The transaction was
structured for tax purposes to qualify as a tax free reorganization under the
Internal Revenue Code. The EV Traditional National Limited Maturity
Municipals Fund's and EV Classic National Limited Maturity Municipals Fund's
net assets at the date of the transaction were $12,949,960 and $7,722,266,
including $480,130 and $490,592 of unrealized appreciation, respectively.
Directly after the merger, the combined net assets of the Eaton Vance
National Limited Maturity Municipals Fund (formerly "EV Marathon National
Limited Maturity Municipals Fund") were $92,201,674 with a net asset value of
$10.58, $10.58 and $9.92 for Class A, Class B and Class C, respectively.
9 Name Change
- -------------------------------------------
Effective April 1, 1998, EV Marathon National Limited Maturity Municipals
Fund changed its name to Eaton Vance National Limited Maturity Municipals
Fund.
12
<PAGE>
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
INDEPENDENT AUDITORS' REPORT
TO THE TRUSTEES AND SHAREHOLDERS
OF EATON VANCE INVESTMENT TRUST:
- ---------------------------------------------
We have audited the accompanying statement of assets and liabilities of Eaton
Vance National Limited Maturity Municipals Fund (one of the series constituting
the Eaton Vance Investment Trust) as of March 31, 1999, the related statement of
operations for the year then ended, the statements of changes in net assets for
the years ended March 31, 1999 and 1998 and the financial highlights for each of
the years in the five-year period ended March 31, 1999. 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 Eaton Vance National
Limited Maturity Municipals Fund at March 31, 1999, the results of its
operations, the changes in its net assets and its financial highlights for the
respective stated periods in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
April 30, 1999
13
<PAGE>
NATIONAL LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
PORTFOLIO OF INVESTMENTS
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Assisted Living -- 1.2%
---------------------------------------------------------------------------------------
NR NR $1,000 New Jersey EDA, (Chelsea at East
Brunswick), (AMT), 8.00%, 10/1/07 $ 1,096,450
---------------------------------------------------------------------------------------
$ 1,096,450
---------------------------------------------------------------------------------------
Cogeneration -- 8.8%
---------------------------------------------------------------------------------------
NR BBB+ $ 470 Eastern Connecticut Resource Recovery
Authority, (Wheelabrator Lisbon), (AMT),
5.50%, 1/1/20 $ 465,084
NR BBB- 1,075 New Jersey EDA, (Trigen-Trenton), (AMT),
6.10%, 12/1/05 1,143,531
NR BB+ 1,250 New Jersey EDA, (Vineland Cogeneration)
(AMT), 7.875%, 6/1/19 1,349,663
NR NR 500 Palm Beach County, FL, (Okeelanta
Power), (AMT), 6.85%, 2/15/21(1) 385,000
NR NR 500 Palm Beach County, FL, (Osceola Power),
(AMT), 6.95%, 1/1/22(1) 380,000
NR NR 1,800 Pennsylvania EDA, (Resource Recovery
Northampton), 6.75%, 1/1/07 1,938,456
NR BBB- 2,000 Pennsylvania EDA, (Resources
Recovery-Colver), (AMT), 7.05%, 12/1/10 2,195,319
---------------------------------------------------------------------------------------
$ 7,857,053
---------------------------------------------------------------------------------------
Economic Development Revenue -- 1.0%
---------------------------------------------------------------------------------------
NR B+ $ 950 Michigan State Strategic Fund, (Crown
Paper), 6.25%, 8/1/12 $ 871,065
---------------------------------------------------------------------------------------
$ 871,065
---------------------------------------------------------------------------------------
Education -- 3.1%
---------------------------------------------------------------------------------------
Ba1 NR $1,000 New Hampshire HEFA, (Colby-Sawyer
College), 7.20%, 6/1/12 $ 1,085,830
NR BBB 500 New Hampshire HEFA, (Rivier College),
5.55%, 1/1/18 500,155
Aa3 AA- 1,700 University of Illinois, 0.00%, 4/1/15 755,922
Aa3 AA- 1,000 University of Illinois, 0.00%, 4/1/16 419,210
---------------------------------------------------------------------------------------
$ 2,761,117
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
(UNAUDITED)
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Escrowed/Prerefunded -- 19.1%
---------------------------------------------------------------------------------------
NR A+ $3,500 California Statewide Communities
Development Corp., (Pacific Homes),
Prerefunded to 4/1/03, 5.90%, 4/1/09 $ 3,785,704
Aaa AAA 500 Grand Ledge, MI, Public School District,
(MBIA), Prerefunded to 5/1/04, 7.875%,
5/1/11 598,400
NR AAA 4,185 Illinois Development Finance Authority,
(Regency Park), Escrowed to Maturity,
0.00%, 7/15/25 932,125
NR NR 3,500 Maricopa County, AZ, IDA, Multifamily,
Escrowed to Maturity, 6.45%, 1/1/17 3,973,024
NR NR 945 Maricopa County, AZ, IDA, Multifamily,
Escrowed to Maturity, 7.876%, 1/1/11 1,133,253
Baa3 NR 1,107 Massachusetts HEFA, (Milford-
Whitinsville Hospital), Escrowed to
Maturity, 7.125%, 7/15/02 1,172,378
Aaa NR 3,000 Massachusetts Turnpike Authority,
Escrowed to Maturity, 5.00%, 1/1/20 3,036,629
Baa BBB+ 670 Richardson, TX, Hospital Authority
(Baylor/Richardson Medical Center),
Prerefunded to 12/01/03, 6.50%, 12/1/12 752,276
NR AAA 1,410 Saint Tammany Public Trust Finance
Authority, LA (Christwood), Escrowed to
Maturity, 8.75%, 11/15/05 1,648,135
---------------------------------------------------------------------------------------
$ 17,031,924
---------------------------------------------------------------------------------------
General Obligations -- 9.6%
---------------------------------------------------------------------------------------
Baa1 A- $4,000 Detroit, MI, 6.50%, 4/1/02(2) $ 4,268,399
A3 A- 750 New York City, NY, 0.00%, 8/1/07 518,033
Aa1 AA+ 750 Ohio State, 0.00%, 8/1/08 499,628
Baa1 A 1,500 Puerto Rico Aqueduct and Sewer
Authority, 5.00%, 7/1/15 1,507,050
NR NR 1,755 Youngstown, OH, County School District,
6.40%, 7/1/00 1,790,188
---------------------------------------------------------------------------------------
$ 8,583,298
---------------------------------------------------------------------------------------
Hospital -- 7.1%
---------------------------------------------------------------------------------------
NR NR $1,900 Colorado Health Facilities Authority,
(Steamboat Springs Health), 5.00%,
9/15/03 $ 1,934,466
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
14
<PAGE>
NATIONAL LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hospital (continued)
---------------------------------------------------------------------------------------
Aa3 AA- $ 500 Cuyahoga County, OH, Hospital Authority,
(Cleveland Health Clinic), 5.25%, 1/1/12 $ 516,050
NR NR 750 Forsyth County, GA, Hospital Authority,
(Georgia Baptist Health Care System),
6.00%, 10/1/08 747,855
Baa BBB- 450 Illinois Health Facilities Authority,
(Proctor Community Hospital), 7.375%,
1/1/23 473,882
NR BBB 500 Michigan Hospital Finance Authority,
(Gratiot Community Hospital), 6.10%,
10/1/07 532,440
NR BB- 500 New Hampshire HEFA, (Littleton Hospital
Association), 5.45%, 5/1/08 505,865
Baa BBB+ 1,070 Richardson, TX, Hospital Authority
(Baylor/Richardson Medical Center),
6.50%, 12/1/12 1,159,035
NR NR 465 San Gorgonio, CA, Memorial Health Care
District, 5.60%, 5/1/11 460,755
---------------------------------------------------------------------------------------
$ 6,330,348
---------------------------------------------------------------------------------------
Housing -- 6.5%
---------------------------------------------------------------------------------------
NR NR $ 500 Arkansas Development Finance Authority,
MFMR, (Park Apartments), (AMT), 5.95%,
12/1/28 $ 496,505
A2 NR 1,005 Illinois Development Finance Authority,
Elderly Housing, (Mattoon Tower),
(Section 8), 6.35%, 7/1/10 1,049,019
Baa3 NR 855 Illinois Development Finance Authority,
Elderly Housing, (Rome Meadows), 6.40%,
2/1/03 881,787
Baa3 NR 1,145 Illinois Development Finance Authority,
Elderly Housing, (Rome Meadows), 6.65%,
2/1/06 1,197,178
Aa2 AA 2,000 Wisconsin Housing and Economic
Development Authority, (Home Ownership),
(AMT), 6.45%, 9/1/27 2,148,720
---------------------------------------------------------------------------------------
$ 5,773,209
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
(UNAUDITED)
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Industrial Development Revenue -- 14.8%
---------------------------------------------------------------------------------------
NR NR $ 690 Austin, TX, (Cargoport Development LLC),
(AMT), 7.50%, 10/1/07 $ 727,481
NR NR 455 Austin, TX, (Cargoport Development LLC),
(AMT), 8.30%, 10/1/21 501,155
Baa2 BB+ 500 Chicago, IL, O'Hare International
Airport, (United Airlines, Inc.), 5.35%,
9/1/16 498,015
NR BBB- 1,000 Clark County, NV, (Nevada Power Co.),
(AMT), 5.90%, 10/1/30 1,021,420
A3 BBB+ 1,000 Columbus, NC (International Paper Co.),
5.80%, 12/1/16 1,042,740
NR NR 1,100 Eagle County, CO, Airport Terminal Corp.
(American Airlines), (AMT), 6.75%,
5/1/06 1,162,282
Baa1 BBB 500 Gulf Coast, TX, Waste Disposal,
(Champion International Corp.), (AMT),
6.875%, 12/1/28 542,675
NR NR 900 Iowa Finance Authority, (Southbridge
Mall), 6.375%, 12/1/13 917,982
A3 BBB+ 500 Jones County, MS, (International Paper
Co.), 5.80%, 10/1/21 512,645
NR NR 500 Kimball, NE, EDA, (Clean Harbors, Inc.),
10.75%, 9/1/26 543,975
NR NR 620 Los Angeles, CA, Regional Airport
Improvement Corporate Lease, (TransWorld
Airlines), 6.125%, 5/15/00 620,223
Aa2 AA 500 Missouri State Development Finance
Board, Solid Waste Disposal Revenue,
(Proctor and Gamble), (AMT), 5.20%,
3/15/29 498,855
NR NR 1,000 New Jersey EDA, (Holt Hauling), (AMT),
7.90%, 3/1/27 1,120,630
NR NR 750 Ohio Solid Waste Revenue, (Republic
Engineered Steels, Inc.), (AMT), 9.00%,
6/1/21 803,175
NR NR 500 Peru, IL, (Freightways Corp.), 5.25%,
11/1/03 497,665
Baa2 BBB 1,000 Saint Charles Parish, LA, Pollution
Control Revenue, (Union Carbide Corp.),
5.10%, 1/1/12 996,770
NR NR 1,195 Santa Fe, NM (Crow Hobbs), 8.25%, 9/1/05 1,238,761
---------------------------------------------------------------------------------------
$ 13,246,449
---------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
15
<PAGE>
NATIONAL LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Education -- 1.0%
---------------------------------------------------------------------------------------
Aaa AAA $ 620 Golden West Schools Financing Authority,
(MBIA), 5.80%, 2/1/16(3) $ 687,568
Aaa AAA 500 Southern Illinois University, Housing
and Auxiliary Facilities, (MBIA), 0.00%,
4/1/17 198,455
---------------------------------------------------------------------------------------
$ 886,023
---------------------------------------------------------------------------------------
Insured-General Obligations -- 1.1%
---------------------------------------------------------------------------------------
Aaa AAA $1,000 Paw Paw, MI, Public School District,
(FGIC), 5.00%, 5/1/21(2) $ 999,290
---------------------------------------------------------------------------------------
$ 999,290
---------------------------------------------------------------------------------------
Insured-Hospital -- 1.6%
---------------------------------------------------------------------------------------
Aaa AAA $2,000 El Paso County, TX, Hospital District,
(MBIA), 0.00%, 8/15/06 $ 1,448,960
---------------------------------------------------------------------------------------
$ 1,448,960
---------------------------------------------------------------------------------------
Insured-Special Tax Revenue -- 0.6%
---------------------------------------------------------------------------------------
Aaa AAA $ 500 George L. Smith, (Georgia World Congress
Center-Domed Stadium), (MBIA), (AMT),
6.00%, 7/1/06(3) $ 533,260
---------------------------------------------------------------------------------------
$ 533,260
---------------------------------------------------------------------------------------
Insured-Transportation -- 1.1%
---------------------------------------------------------------------------------------
Aaa AAA $2,500 E-470 Public Highway Authority, CO,
(MBIA), 0.00%, 9/1/17 $ 981,800
---------------------------------------------------------------------------------------
$ 981,800
---------------------------------------------------------------------------------------
Miscellaneous -- 1.8%
---------------------------------------------------------------------------------------
Baa3 NR $ 500 Mashantucket, CT, (Western Pequot
Tribe), 5.55%, 9/1/08 $ 523,490
NR NR 500 San Juan, NM, Pueblo Development
Authority, 7.00%, 10/15/06 491,990
NR NR 595 Tax Revenue Exempt Securities Trust,
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 6.00%, 12/1/36 595,900
---------------------------------------------------------------------------------------
$ 1,611,380
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
(UNAUDITED)
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Nursing Home -- 5.7%
---------------------------------------------------------------------------------------
NR NR $1,105 Arizona Health Facilities Authority
Assisted Living Facilites, (Mesa),
7.625%, 1/1/06 $ 1,142,669
NR NR 650 Citrus County, FL, IDA, (Beverly
Enterprises), 5.00%, 4/1/03 648,603
NR NR 965 Clovis, NM, IDR, (Retirement Ranches,
Inc.), 7.75%, 4/1/19 1,054,977
NR NR 680 Fairfield, OH, EDA, (Beverly
Enterprises), 8.50%, 1/1/03 723,901
NR NR 1,455 Massachusetts IFA, (Age Institute of
Massachusetts), 7.60%, 11/1/05 1,543,886
---------------------------------------------------------------------------------------
$ 5,114,036
---------------------------------------------------------------------------------------
Pooled Loans -- 4.7%
---------------------------------------------------------------------------------------
Aa2 NR $1,900 Arizona Educational Loan Marketing
Corp., (AMT), 6.25%, 6/1/06 $ 2,079,702
A NR 1,000 Arizona Student Loan Acquisition
Authority, (AMT), 7.625%, 5/1/10 1,096,790
A NR 1,000 Arkansas Student Loan Authority, (AMT),
6.25%, 6/1/10 1,039,340
---------------------------------------------------------------------------------------
$ 4,215,832
---------------------------------------------------------------------------------------
Senior Living/Life Care -- 6.7%
---------------------------------------------------------------------------------------
NR NR $ 785 Albuquerque, NM, Retirement Facility
Revenue, 6.60%, 12/15/28 $ 780,847
NR NR 985 Florence, KY, Housing Facilities,
(Bluegrass Housing), 7.25%, 5/1/07 1,103,318
NR NR 2,000 Illinois Health Facilities Authority,
(Lutheran Social Services), 6.125%,
8/15/10 2,068,980
NR NR 500 Kansas City, MO, IDR, (Kingswood Manor),
5.80%, 11/15/17 483,130
NR NR 250 Massachusetts IFA, (Forge Hill), (AMT),
6.75%, 4/1/30 238,493
NR NR 500 North Miami, FL, HFA, (Imperial Club),
6.75%, 1/1/33 490,865
NR NR 305 Okaloosa County, FL, Retirement Rental
Housing, (Encore Retirement Partners),
5.25%, 2/1/04 305,107
NR NR 475 Vermont IDA, (Wake Robins), 8.00%,
4/1/99 475,000
---------------------------------------------------------------------------------------
$ 5,945,740
---------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
16
<PAGE>
NATIONAL LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Solid Waste -- 0.3%
---------------------------------------------------------------------------------------
NR NR $ 500 Robbins, Cook County, IL, (Robbins
Resource Recovery Partners, L.P.),
8.375%, 10/15/10 $ 270,000
---------------------------------------------------------------------------------------
$ 270,000
---------------------------------------------------------------------------------------
Special Tax Revenue -- 0.3%
---------------------------------------------------------------------------------------
NR NR $ 250 Frederick County, MD, Urbana Community
Development Authority, 6.625%, 7/1/25 $ 254,525
---------------------------------------------------------------------------------------
$ 254,525
---------------------------------------------------------------------------------------
Transportation -- 3.9%
---------------------------------------------------------------------------------------
Baa1 BBB+ $2,000 Denver, CO, City and County Airport,
(AMT), 7.00%, 11/15/99 $ 2,042,580
NR NR 260 Memphis-Shelby County, TN, Airport
Authority, 6.12%, 12/1/16 264,350
NR NR 1,000 Northwest Arkansas Regional Airport
Authority, (AMT), 7.625%, 2/1/27 1,150,780
---------------------------------------------------------------------------------------
$ 3,457,710
---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $84,822,504) $ 89,269,469
---------------------------------------------------------------------------------------
</TABLE>
The Portfolio invests primarily in debt securities issued by municipalities. The
ability of the issuers of the debt securities to meet their obligations may be
affected by economic developments in a specific industry or municipality. In
order to reduce the risk of such economic developments, at March 31, 1999, 6.1%
of the securities in the portfolio of investments are backed by bond insurance
of various financial institutions and financial guaranty assurance agencies. The
aggregate percentage insured by financial institutions ranged from 1.1% to 5.0%
of total investments.
At March 31, 1999, the concentration of the Portfolio's investments in the
various states, determined as a percentage of total investments is as follows:
Arizona 11%
Illinois 10%
Others, representing less than 10% individually 79%
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
(1) Non-income producing security.
(2) Security (or a portion thereof) has been segregated to cover when-issued
securities.
(3) When-issued security.
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
NATIONAL LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF MARCH 31, 1999
<S> <C>
Assets
- ------------------------------------------------------
Investments, at value (identified cost,
$84,822,504) $ 89,269,469
Cash 314,518
Receivable for investments sold 20,000
Interest receivable 1,568,431
- ------------------------------------------------------
TOTAL ASSETS $ 91,172,418
- ------------------------------------------------------
Liabilities
- ------------------------------------------------------
Payable for when-issued securities $ 1,200,119
Other accrued expenses 5,905
- ------------------------------------------------------
TOTAL LIABILITIES $ 1,206,024
- ------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS'
INTEREST IN PORTFOLIO $ 89,966,394
- ------------------------------------------------------
Sources of Net Assets
- ------------------------------------------------------
Net proceeds from capital contributions
and withdrawals $ 85,519,429
Net unrealized appreciation (computed on
the basis of identified cost) 4,446,965
- ------------------------------------------------------
TOTAL $ 89,966,394
- ------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
MARCH 31, 1999
<S> <C>
Investment Income
- ------------------------------------------------------
Interest $ 5,373,501
- ------------------------------------------------------
TOTAL INVESTMENT INCOME $ 5,373,501
- ------------------------------------------------------
Expenses
- ------------------------------------------------------
Investment adviser fee $ 433,524
Trustees fees and expenses 8,080
Custodian fee 59,215
Legal and accounting services 24,619
Amortization of organization expenses 219
Miscellaneous 29,654
- ------------------------------------------------------
TOTAL EXPENSES $ 555,311
- ------------------------------------------------------
Deduct --
Reduction of custodian fee $ 11,956
- ------------------------------------------------------
TOTAL EXPENSE REDUCTIONS $ 11,956
- ------------------------------------------------------
NET EXPENSES $ 543,355
- ------------------------------------------------------
NET INVESTMENT INCOME $ 4,830,146
- ------------------------------------------------------
Realized and Unrealized Gain (Loss)
- ------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $ 650,727
Financial futures contracts (278,032)
- ------------------------------------------------------
NET REALIZED GAIN $ 372,695
- ------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $ (1,202,223)
Financial futures contracts 19,807
- ------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $ (1,182,416)
- ------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS $ (809,721)
- ------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 4,020,425
- ------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
NATIONAL LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Increase (Decrease) YEAR ENDED YEAR ENDED
in Net Assets MARCH 31, 1999 MARCH 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------
From operations --
Net investment income $ 4,830,146 $ 5,333,661
Net realized gain (loss) 372,695 (161,876)
Net change in unrealized appreciation
(depreciation) (1,182,416) 4,669,424
- ---------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 4,020,425 $ 9,841,209
- ---------------------------------------------------------------------------
Capital transactions --
Contributions $ 26,384,868 $ 44,850,231
Withdrawals (33,566,159) (64,067,696)
- ---------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM CAPITAL
TRANSACTIONS $ (7,181,291) $ (19,217,465)
- ---------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (3,160,866) $ (9,376,256)
- ---------------------------------------------------------------------------
Net Assets
- ---------------------------------------------------------------------------
At beginning of year $ 93,127,260 $ 102,503,516
- ---------------------------------------------------------------------------
AT END OF YEAR $ 89,966,394 $ 93,127,260
- ---------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE>
NATIONAL LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
------------------------------------------------------------------------
1999 1998 1997 1996 1995
<C> <C> <C> <C> <C>
---------------------------------------------------------------------------
Ratios to
average daily
net assets
---------------------------------------------------------------------------
Expenses(1) 0.61% 0.60% 0.60% 0.57% 0.53%
Expenses
after
custodian
fee
reduction 0.60% 0.59% 0.58% 0.56% --
Net
investment
income 5.32% 5.53% 5.45% 5.08% 5.02%
Portfolio
Turnover 26% 41% 68% 68% 56%
---------------------------------------------------------------------------
NET
ASSETS,
END
OF
YEAR
(000'S
OMITTED) $ 89,966 $ 93,127 $102,504 $134,776 $169,621
---------------------------------------------------------------------------
</TABLE>
(1) The expense ratios for the year ended March 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Portfolio to increase its expense ratio by
the effect of any expense offset arrangements with its service providers.
The expense ratio for the year ended March 31, 1995 has not been adjusted
to reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
NATIONAL LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
NOTES TO FINANCIAL STATEMENTS
1 Significant Accounting Policies
- -------------------------------------------
National Limited Maturity Municipals Portfolio (the Portfolio) seeks to
provide (1) a high level of current income exempt from regular federal income
tax and (2) limited principal fluctuation. The Portfolio is registered under
the Investment Company Act of 1940 as a diversified open-end management
investment company which was organized as a trust under the laws of the State
of New York on May 1, 1992. The Declaration of Trust permits the Trustees to
issue interests in the Portfolio. The following is a summary of significant
accounting policies of the Portfolio. The policies are in conformity with
generally accepted accounting principles.
A Investment Valuation -- Municipal bonds are normally valued on the basis of
valuations furnished by a pricing service. Taxable obligations, if any, for
which price quotations are readily available are normally valued at the mean
between the latest bid and asked prices. Futures contracts listed on the
commodity exchanges are valued at closing settlement prices. Short-term
obligations, maturing in sixty days or less, are valued at amortized cost,
which approximates value. Investments for which valuations or market
quotations are unavailable are valued at fair value using methods determined
in good faith by or at the direction of the Trustees.
B Income -- Interest income is determined on the basis of interest accrued,
adjusted for amortization of premium or discount when required for federal
income tax purposes.
C Income Taxes -- The Portfolio is treated as a partnership for federal tax
purposes. No provision is made by the Portfolio for federal or state taxes on
any taxable income of the Portfolio because each investor in the Portfolio is
ultimately responsible for the payment of any taxes. Since some of the
Portfolio's investors are regulated investment companies that invest all or
substantially all of their assets in the Portfolio, the Portfolio normally
must satisfy the applicable source of income and diversification requirements
(under the Internal Revenue Code) in order for its investors to satisfy them.
The Portfolio will allocate at least annually among its investors each
investor's distributive share of the Portfolio's net taxable (if any) and
tax-exempt investment income, net realized capital gains, and any other items
of income, gain, loss, deduction or credit. Interest income received by the
Portfolio on investments in municipal bonds, which is excludable from gross
income under the Internal Revenue Code, will retain its status as income
exempt from federal income tax when allocated to the Portfolio's investors.
The portion of such interest, if any, earned on private activity bonds issued
after August 7, 1986 may be considered a tax preference item for investors.
D Deferred Organization Expenses -- Costs incurred by the Portfolio in
connection with its organization are being amortized on the straight-line
basis over five years.
E Financial Futures Contracts -- Upon the entering of a financial futures
contract, the Portfolio is required to deposit ("initial margin") either in
cash or securities an amount equal to a certain percentage of the purchase
price indicated in the financial futures contract. Subsequent payments are
made or received by the Portfolio ("margin maintenance") each day, dependent
on the daily fluctuations in the value of the underlying security, and are
recorded for book purposes as unrealized gains or losses by the Portfolio.
The Portfolio's investment in financial futures contracts is designed only to
hedge against anticipated future changes in interest rates. Should interest
rates move unexpectedly, the Portfolio may not achieve the anticipated
benefits of the financial futures contracts and may realize a loss.
F Options on Financial Futures Contracts -- Upon the purchase of a put option
on a financial futures contract by the Portfolio, the premium paid is
recorded as an investment, the value of which is marked-to-market daily. When
a purchased option expires, a Portfolio will realize a loss in the amount of
the cost of the option. When a Portfolio enters into a closing sales
transaction, the Portfolio will realize a gain or loss depending on whether
the sales proceeds from the closing sales transaction is greater or less than
the cost of the option. When the Portfolio exercises a put option, settlement
is made in cash. The risk associated with purchasing options is limited to
the premium originally paid.
G When-issued and Delayed Delivery Transactions -- The Portfolio may engage in
when-issued and delayed delivery transactions. The Portfolio records
when-issued securities on trade date and maintains security positions such
that sufficient liquid assets will be available to make payments for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked-to-market daily and begin earning interest on
settlement date.
21
<PAGE>
NATIONAL LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
H Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
of the Portfolio. Pursuant to the custodian agreement, IBT receives a fee
reduced by credits which are determined based on the average daily cash
balances the Portfolio maintains with IBT. All significant credit balances
used to reduce the Portfolio's custodian fees are reported as a reduction of
operating expenses on the Statement of Operations.
I Use of Estimates -- The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expense during the reporting period. Actual results could
differ from those estimates.
J Other -- Investment transactions are accounted for on a trade date basis.
2 Investment Adviser Fee and Other Transactions with Affiliates
- -------------------------------------------
The investment adviser fee is earned by Boston Management and Research (BMR),
a wholly-owned subsidiary of Eaton Vance Management (EVM), as compensation
for management and investment advisory services rendered to the Portfolio.
The fee is based upon a percentage of average daily net assets plus a
percentage of gross income (i.e., income other than gains from the sale of
securities). For the year ended March 31, 1999, the fee was equivalent to
0.48% of the Portfolio's average net assets for such period and amounted to
$433,524. Except as to Trustees of the Portfolio who are not members of EVM's
or BMR's organization, officers and Trustees receive remuneration for their
services to the Portfolio out of such investment adviser fee. Certain of the
officers and Trustees of the Portfolio are officers and directors/trustees of
the above organizations. Trustees of the Portfolio that are not affiliated
with the Investment Adviser may elect to defer receipt of all or a percentage
of their annual fees in accordance with the terms of the Trustees Deferred
Compensation Plan. For the year ended March 31, 1999, no significant amounts
have been deferred.
3 Line of Credit
- -------------------------------------------
The Portfolio participates with other portfolios and funds managed by BMR and
EVM and its affiliates in a $130 million unsecured line of credit agreement
with a group of banks. The Portfolio may temporarily borrow from the line of
credit to satisfy redemption requests or settle investment transactions.
Interest is charged to each portfolio or fund based on its borrowings at an
amount above either the Eurodollar rate or federal funds rate. In addition, a
fee computed at an annual rate of 0.10% on the daily unused portion of the
line of credit is allocated among the participating portfolios and funds at
the end of each quarter. The Portfolio did not have any significant
borrowings or allocated fees during the period.
4 Investments
- -------------------------------------------
Purchases and sales of investments, other than U.S. Government securities and
short-term obligations, aggregated $23,904,996 and $26,745,151 respectively,
for the year ended March 31, 1999.
5 Federal Income Tax Basis of Investments
- -------------------------------------------
The cost and unrealized appreciation/depreciation in value of the investments
owned at March 31, 1999, as computed on a federal income tax basis, were as
follows:
<TABLE>
<S> <C>
AGGREGATE COST $ 84,822,504
- ------------------------------------------------------
Gross unrealized appreciation $ 4,906,724
Gross unrealized depreciation (459,759)
- ------------------------------------------------------
NET UNREALIZED APPRECIATION $ 4,446,965
- ------------------------------------------------------
</TABLE>
6 Financial Instruments
- -------------------------------------------
The Portfolio regularly trades in financial instruments with off-balance
sheet risk in the normal course of its investing activities to assist in
managing exposure to various market risks. These financial instruments
include written options and futures contracts and may involve, to a varying
degree, elements of risk in excess of the amounts recognized for financial
statement purposes. The notional or contractual amounts of these instruments
represent the investment the Portfolio has in particular classes of financial
instruments and does not necessarily represent the amounts potentially
subject to risk. The measurement of the risks associated with these
instruments is meaningful only when all related and offsetting transactions
are considered.
At March 31, 1999, there were no outstanding obligations under these
financial instruments.
22
<PAGE>
NATIONAL LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
INDEPENDENT AUDITORS' REPORT
TO THE TRUSTEES AND INVESTORS OF
NATIONAL LIMITED MATURITY MUNICIPALS PORTFOLIO:
- ---------------------------------------------
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of National Limited Maturity Municipals Portfolio
as of March 31, 1999, the related statement of operations for the year then
ended, the statements of changes in net assets for the years ended March 31,
1999 and 1998 and the supplementary data for each of the years in the five-year
period ended March 31, 1999. These financial statements and supplementary data
are the responsibility of the Portfolio's management. Our responsibility is to
express an opinion on these financial statements and supplementary data based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and supplementary
data are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities held as of March
31, 1999 by correspondence with the custodian and brokers; where replies were
not received, alternative procedures were performed. 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 National Limited Maturity
Municipals Portfolio at March 31, 1999, the results of its operations, the
changes in its net assets and its supplementary data for the respective stated
periods in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
April 30, 1999
23
<PAGE>
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
INVESTMENT MANAGEMENT
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPALS FUND
Officers
Thomas J. Fetter
President
James B. Hawkes
Vice President and Trustee
Robert B. MacIntosh
Vice President
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Trustees
Jessica M. Bibliowicz
President and Chief Executive Officer,
National Financial Partners
Donald R. Dwight
President, Dwight Partners, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment Banking
Emeritus, Harvard University Graduate School of
Business Administration
Norton H. Reamer
Chairman and Chief Executive Officer,
United Asset Management Corporation
Lynn A. Stout
Professor of Law,
Georgetown University Law Center
John L. Thorndike
Former Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
NATIONAL LIMITED MATURITY MUNICIPALS PORTFOLIO
Officers
Thomas J. Fetter
President
James B. Hawkes
Vice President and Trustee
William H. Ahern, Jr.
Vice President and Portfolio
Manager
Robert B. MacIntosh
Vice President
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Trustees
Jessica M. Bibliowicz
President and Chief Executive Officer,
National Financial Partners
Donald R. Dwight
President, Dwight Partners, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment Banking
Emeritus, Harvard University Graduate School of
Business Administration
Norton H. Reamer
Chairman and Chief Executive Officer,
United Asset Management Corporation
Lynn A. Stout
Professor of Law,
Georgetown University Law Center
John L. Thorndike
Former Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
24
<PAGE>
Investment Adviser of
National Limited Maturity Municipals Portfolio
Boston Management and Research
The Eaton Vance Building
255 State Street
Boston, MA 02109
Administrator of
Eaton Vance National Limited Maturity Municipals Fund
Eaton Vance Management
The Eaton Vance Building
255 State Street
Boston, MA 02109
Principal Underwriter
Eaton Vance Distributors, Inc.
The Eaton Vance Building
255 State Street
Boston, MA 02109
(617) 482-8260
Custodian
Investors Bank & Trust Company
200 Clarendon Street
Boston, MA 02116
Transfer Agent
First Data Investor Services Group
Attention: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
Independent Auditor
Deloitte & Touche LLP
125 Summer Street
Boston, MA 02109
Eaton Vance National Limited Maturity Municipals Fund
The Eaton Vance Building
255 State Street
Boston, MA 02109
- -------------------------------------------------------------------------------
The 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.
- -------------------------------------------------------------------------------
3-3975 LNASRC/S-99
