<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 24, 1999.
1933 ACT FILE NO. -____
1940 ACT FILE NO. 811-4443
================================================================================
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. ___ [ ]
POST-EFFECTIVE AMENDMENT NO. ___ [ ]
EATON VANCE INVESTMENT TRUST
----------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
THE EATON VANCE BUILDING, 255 STATE STREET, BOSTON, MA 02109
------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(617) 482-8260
--------------
(REGISTRANT'S TELEPHONE NUMBER)
ALAN R. DYNNER
THE EATON VANCE BUILDING, 255 STATE STREET, BOSTON, MA 02109
------------------------------------------------------------
(NAME AND ADDRESS OF AGENT FOR SERVICE)
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of the registration statement.
------------------------------
TITLE OF SECURITIES BEING REGISTERED: Shares of Beneficial Interest
No filing fee is required because an indefinite number of shares have previously
been registered pursuant to Rule 24f-2 under the Investment Company Act of 1940,
as amended. Pursuant to Rule 429, this Registration Statement relates to shares
previously registered on Form N-1A (File No. 33-1121).
------------------------------
Pursuant to Rule 488 under the Securities Act of 1933, it is proposed that this
filing will become effective on September 23, 1999.
<PAGE>
EATON VANCE INVESTMENT TRUST
CONTENTS OF REGISTRATION STATEMENT
----------------------------------
This Registration Statement contains the following pages and documents:
Front Cover
Contents Page
Cross Reference Sheet
Letter to Shareholders
Notice of Special Meeting
Part A -- Prospectus/Proxy Statement
Proxy Cards
Part B -- Statement of Additional Information
Part C -- Other Information
Signature Page
Exhibits
<PAGE>
EATON VANCE INVESTMENT TRUST
CROSS-REFERENCE SHEET
FOR EATON VANCE NATIONAL LIMITED MATURITY MUNICIPALS FUND
ITEMS REQUIRED BY FORM N-14
---------------------------
PART A. INFORMATION REQUIRED IN THE PROSPECTUS
<TABLE>
CAPTION IN
ITEM NO. ITEM CAPTION PROSPECTUS/PROXY STATEMENT
- -------- ------------ --------------------------
<S> <C> <C>
1. Beginning of Registration Statement and Outside COVER PAGE OF REGISTRATION STATEMENT; FRONT
Front Cover Page of Prospectus COVER PAGE OF PROSPECTUS
2. Beginning and Outside Back Cover Page of Prospectus TABLE OF CONTENTS
3. Fee Table, Synopsis Information, and Risk Factors SUMMARY; PRINCIPAL RISK FACTORS; FUND EXPENSES
4. Information About the Transaction REASONS FOR THE REORGANIZATIONS; INFORMATION
ABOUT THE REORGANIZATIONS; COMPARATIVE
INFORMATION ON SHAREHOLDER RIGHTS
5. Information About the Registrant PROSPECTUS COVER PAGE; SUMMARY; COMPARISON OF
INVESTMENT OBJECTIVES AND POLICIES; INFORMATION
ABOUT THE FUNDS; NATIONAL FUND FINANCIAL
HIGHLIGHTS; EXHIBIT B
6. Information About the Companies Being Acquired PROSPECTUS COVER PAGE; SUMMARY; COMPARISON OF
INVESTMENT OBJECTIVES AND POLICIES; INFORMATION
ABOUT THE FUNDS; STATE FUNDS FINANCIAL
HIGHLIGHTS
7. Voting Information SUMMARY; VOTING INFORMATION; DISSENTERS RIGHTS
8. Interest of Certain Persons and Experts EXPERTS
</TABLE>
<PAGE>
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
CAPTION IN
ITEM NO. ITEM CAPTION STATEMENT OF ADDITIONAL INFORMATION
- -------- ------------ -----------------------------------
<S> <C> <C>
9. Additional Information Required for Reoffering
by Persons Deemed to be Underwriters NOT APPLICABLE
10. Cover Page COVER PAGE
11. Table of Contents TABLE OF CONTENTS
12. Additional Information About the Registrant STATEMENT OF ADDITIONAL INFORMATION OF EATON VANCE
NATIONAL LIMITED MATURITY MUNICIPALS FUND
13. Additional Information About the Companies ANNUAL REPORT OF EATON VANCE
Being Acquired CONNECTICUT AND MICHIGAN LIMITED MATURITY
MUNICIPALS FUNDS
14. Financial Statements FINANCIAL STATEMENTS OF EATON VANCE NATIONAL
LIMITED MATURITY MUNICIPALS FUND; FINANCIAL
STATEMENTS OF EATON VANCE CONNECTICUT AND MICHIGAN
LIMITED MATURITY MUNICIPALS FUNDS; PRO FORMA
FINANCIAL STATEMENTS
</TABLE>
PART C. OTHER INFORMATION
<TABLE>
ITEM NO. ITEM CAPTION PART C CAPTION
- -------- ------------ --------------
<S> <C> <C>
15. Indemnification INDEMNIFICATION
16. Exhibits EXHIBITS
17. Undertakings UNDERTAKINGS
</TABLE>
<PAGE>
EATON VANCE CONNECTICUT
LIMITED MATURITY MUNICIPALS FUND
EATON VANCE MICHIGAN
LIMITED MATURITY MUNICIPALS FUND
THE EATON VANCE BUILDING, 255 STATE STREET, BOSTON, MASSACHUSETTS 02109
- --------------------------------------------------------------------------------
September 23, 1999
Dear Shareholder:
A Special Meeting of Shareholders of Eaton Vance Connecticut and Michigan
Limited Maturity Municipals Funds (the "State Funds"), series of Eaton Vance
Investment Trust, is to be held at 1:30 p.m., Eastern Standard Time, on October
29, 1999 at the above location. Enclosed is a Prospectus/Proxy Statement
regarding the meeting, a proxy to allow you to vote, and a postage prepaid
envelope in which to return your proxy.
At the Special Meeting, action will be taken to approve or disapprove two
separate transactions (the "Reorganizations"), each involving one of the State
Funds and Eaton Vance National Limited Maturity Municipals Fund ("National
Fund"), also a series of Eaton Vance Investment Trust. A Reorganization will
result in the conversion of State Fund shares into corresponding shares of
National Fund of equal value. National Fund has an investment objective and
policies different from the State Funds and the risks of an investment in
National Fund also differ. The enclosed Prospectus/Proxy Statement describes the
Reorganizations in detail. Please review the enclosed materials, complete and
return your proxy in the postage prepaid envelope provided.
The number of shares of a State Fund that will be voted in accordance with
your instructions appears on your proxy.
The management and Trustees of the State Funds believe that the
Reorganization will benefit State Funds shareholders and recommend that you vote
IN FAVOR of the applicable Reorganization. NATIONAL FUND CURRENTLY HAS A HIGHER
PRE-TAX AND AFTER-TAX YIELD FOR STATE FUND SHAREHOLDERS, BASED ON REGULAR
FEDERAL, STATE AND LOCAL INCOME TAXES. Every vote counts, so please return your
proxy today in the postage prepaid envelope provided for your convenience.
Should you have questions regarding the proposed Reorganization, please
call (800) 225-6265 any time between 9 a.m. and 5 p.m. Eastern Standard Time.
Sincerely,
Thomas J. Fetter
President
SHAREHOLDERS ARE URGED TO SIGN AND MAIL THE ENCLOSED PROXY IN THE ENCLOSED
POSTAGE PREPAID ENVELOPE SO AS TO ENSURE A QUORUM AT THE MEETING. THIS IS
IMPORTANT WHETHER YOU OWN A FEW SHARES OR MANY SHARES.
<PAGE>
EATON VANCE CONNECTICUT
LIMITED MATURITY MUNICIPALS FUND
EATON VANCE MICHIGAN
LIMITED MATURITY MUNICIPALS FUND
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD FRIDAY, OCTOBER 29, 1999
To Shareholders:
Please note that a Special Meeting of Shareholders of each of the above
Funds (the "State Funds") has been called to be held at the Funds' offices, The
Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109 on Friday,
October 29, 1999 at 1:30 p.m., Eastern Standard Time, for the following
purposes:
(1) To approve an Agreement and Plan of Reorganization (the "Plan")
providing for the acquisition by Eaton Vance National Limited Maturity
Municipals Fund ("National Fund"), of all of the net assets of the
State Fund, in exchange for the issuance of shares of National Fund to
the State Fund, the distribution of such shares to the shareholders of
the State Fund and the termination of the State Fund, all as described
in the accompanying Prospectus/Proxy Statement. A copy of the Plan is
attached as Exhibit A thereto.
(2) To consider and act upon such other matters as may properly come
before the Meeting or any adjournments thereof.
Shareholders of record at the close of business on September 15, 1999 are
entitled to vote at the meeting or any adjournments thereof.
By Order of the Trustees
Alan R. Dynner
Secretary
September 23, 1999
IMPORTANT - WE URGE YOU TO SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT USING
THE ENCLOSED ADDRESSED ENVELOPE, WHICH REQUIRES NO POSTAGE AND IS INTENDED FOR
YOUR CONVENIENCE. YOUR PROMPT RETURN OF YOUR ENCLOSED PROXY WILL SAVE THE STATE
FUNDS THE NECESSITY AND EXPENSE OF FURTHER SOLICITATIONS TO OBTAIN A QUORUM AT
THE SPECIAL MEETING. IF YOU CAN ATTEND THE MEETING AND WISH TO VOTE YOUR SHARES
IN PERSON AT THAT TIME, YOU WILL BE ABLE TO DO SO.
<PAGE>
PROSPECTUS/PROXY STATEMENT DATED SEPTEMBER 23, 1999
ACQUISITION OF THE ASSETS OF
EATON VANCE CONNECTICUT LIMITED MATURITY MUNICIPALS FUND
AND
EATON VANCE MICHIGAN LIMITED MATURITY MUNICIPALS FUND
BY AND IN EXCHANGE FOR SHARES OF
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPALS FUND
THE EATON VANCE BUILDING
255 STATE STREET
BOSTON, MASSACHUSETTS 02109
(800) 225-6265
This Prospectus/Proxy Statement relates to the proposed acquisition of the
assets of Eaton Vance Connecticut and Michigan Limited Maturity Municipals Funds
(the "State Funds"), series of Eaton Vance Investment Trust (the "Trust"), which
is a Massachusetts business trust, by Eaton Vance National Limited Maturity Fund
("National Fund"), also a series of the Trust, in exchange for the issuance of
shares, without par value, of National Fund ("National Fund Shares") to the
State Funds and the assumption of all of the State Funds' liabilities by the
National Fund. Following each of the two transfers, National Fund Shares will be
distributed to shareholders of a State Fund in liquidation of that State Fund
and that State Fund will be terminated. As a result, each shareholder of a State
Fund will receive National Fund Shares equal in value to the value of such
shareholder's shares, in each case calculated as of the close of regular trading
on the New York Stock Exchange on the business day immediately prior to the
exchange. This document serves as a Proxy Statement for the Special Meeting of
Shareholders of each State Fund to be held on October 29, 1999 at 1:30 p.m. and
any adjournments and postponements thereof and is being used by the Board of
Trustees of the Funds to solicit the proxies of shareholders in connection
therewith. This document also serves as a Prospectus of National Fund and covers
the proposed issuance of National Fund Shares.
National Fund seeks to provide a high level of current income exempt from
regular federal income tax and limited principal fluctuation.
This Prospectus/Proxy Statement, which should be retained for future
reference, sets forth concisely the information about National Fund that a
prospective investor should know before investing. This Prospectus/Proxy
Statement is accompanied by the Prospectus of National Fund dated August 1,
1999, which is incorporated by reference herein. A Statement of Additional
Information dated September 23, 1999 containing additional information about the
proposed transaction has been filed with the Securities and Exchange Commission
and is incorporated by reference into this Prospectus/Proxy Statement. A copy of
such Statement may be obtained without charge by writing to the distributor of
National Fund, Eaton Vance Distributors, Inc. ("EVD"), The Eaton Vance Building,
255 State Street, Boston, MA 02109; or by calling (800) 225-6265.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
PAGE
SUMMARY.......................................................................
FUND EXPENSES.................................................................
PRINCIPAL RISK FACTORS........................................................
REASONS FOR THE REORGANIZATIONS...............................................
INFORMATION ABOUT THE REORGANIZATIONS ........................................
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES..............................
COMPARATIVE INFORMATION ON DISTRIBUTION ARRANGEMENTS..........................
SHAREHOLDER SERVICES..........................................................
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS.................................
INFORMATION ABOUT THE FUNDS...................................................
VOTING INFORMATION............................................................
DISSENTERS RIGHTS.............................................................
NATIONAL FUND FINANCIAL HIGHLIGHTS............................................
STATE FUNDS FINANCIAL HIGHLIGHTS..............................................
EXPERTS.......................................................................
OTHER MATTERS.................................................................
<PAGE>
SUMMARY
The following is a summary of certain information contained in or
incorporated by reference in this Prospectus/Proxy Statement. This summary is
not intended to be a complete statement of all material features of the proposed
Reorganizations and is qualified in its entirety by reference to the full text
of this Prospectus/Proxy Statement and the documents referred to herein.
PROPOSED TRANSACTIONS. The Trustees of State Funds have approved an
Agreement and Plan of Reorganization for each State Fund (the "Plans"), each
providing for the transfer of all of the assets of a State Fund to National Fund
in exchange for the issuance of National Fund Shares to that State Fund and the
assumption of all of that State Fund's liabilities by the National Fund at a
closing to be held following the satisfaction of the conditions to the
Reorganization (the "Closing"). The form of Plan of Reorganization is attached
hereto as Exhibit A. The value of shares to be issued to a State Fund and its
shareholders will be identical in value to that State Fund's outstanding shares
on the Closing Date. National Fund Shares will be distributed to shareholders of
a State Fund in liquidation of the State Fund and the State Fund will be
terminated. (Each proposed transaction is referred to in this Prospectus/Proxy
Statement as a "Reorganization.") As a result of the Reorganizations, each
shareholder of State Funds will receive full and fractional National Fund Shares
equal in value at the close of regular trading on the New York Stock Exchange on
the Closing Date to the value of such shareholder's shares of a State Fund. At
or prior to the Closing, each State Fund shall declare a dividend or dividends
which, together with all previous such dividends, shall have the effect of
distributing to its shareholders all of its investment company taxable income,
its net tax-exempt interest income, and all of its net capital gains, if any,
realized for the taxable year ending at the Closing. The Trustees, including the
Trustees who are not "interested persons" of the Trust as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), have determined
that the interests of existing shareholders of the Funds will not be diluted as
a result of the transactions contemplated by the Reorganizations and that each
Reorganization is in the best interests of such shareholders.
BACKGROUND FOR THE PROPOSED TRANSACTIONS. The Board of Trustees of the
Funds considered a number of factors, including the proposed terms of the
Reorganizations. The Trustees considered that combining the Funds would produce
economies of scale, which will be reflected in reduced costs per share,
currently resulting in higher pre-tax and after-tax yields for shareholders,
based on regular federal, state and local income taxes. Moreover, the Trustees
of considered that, in light of the State Funds' small size, they were not
economically viable for Eaton Vance Management ("Eaton Vance") to sponsor and
manage, and the Reorganizations were a better alternative than liquidation.
THE BOARD OF TRUSTEES OF THE TRUST BELIEVES THAT EACH PROPOSED
REORGANIZATION IS IN THE BEST INTERESTS OF SHAREHOLDERS AND HAS RECOMMENDED THAT
STATE FUND SHAREHOLDERS VOTE FOR THEIR APPLICABLE REORGANIZATION.
2
<PAGE>
PRINCIPAL DIFFERENCES BETWEEN THE FUNDS. There are three differences
between each State Fund and the National Fund in their investment policies.
First, the National Fund can invest in municipal obligations of any state,
although it does not currently intend to invest more than 25% of net assets in
securities of any one state. The National Fund, therefore, will generally not
provide any significant Connecticut or Michigan tax-exempt income and will be
exposed to the political and economic risks of other states and regions of the
United States. Moreover, from time to time certain types of municipal securities
may be more available outside Connecticut and Michigan, and, therefore,
shareholders of National Fund will be exposed to the risks of such securities if
National Fund invests in them.
Another difference in investment policies is that the National Fund is
required to invest only 65% of its assets (as opposed to 75% in a State Fund) in
securities of at least investment grade quality (rated Baa by Moody's Investors
Services, Inc. ("Moody's") or BBB by Standard & Poors Ratings Group ("S&P") or
Fitch IBCA ("Fitch")). No Fund, however, can invest more than 10% of its net
assets in obligations rated below B by Moody's, S&P or Fitch. Obligations rated
Baa/BBB have speculative characteristics, while lower rated obligations
(so-called "junk bonds") are predominantly speculative. The ability of National
Fund to invest 10% more of its assets than a State Fund in below investment
grade quality municipal bonds may adversely affect the performance of the
National Fund. It may also provide for higher yields and greater opportunity for
price appreciation.
A final difference is that the National Fund is required to diversify its
assets to a greater extent than a State Fund. As a diversified fund under the
1940 Act, the National Fund with respect to 75% of its total assets may not
invest more than 5% of its total assets in the securities of any one issuer (or
own more than 10% of the outstanding voting securities of any one issuer). The
State Funds must comply with these tests only with respect to 50% of their
assets. Greater diversification generally reduces investment risk, but can limit
potential returns.
The State Funds and the National Fund utilize the master-feeder structure,
whereby they invest all of their assets in separate corresponding investment
companies registered under the Investment Company Act of 1940 (the "1940 Act").
These master funds are referenced to herein as the "State Portfolio," the
"National Portfolio" or the "Portfolios."
ADVISORY FEES AND EXPENSES. The Portfolios pay Boston Management and
Research ("BMR"), a wholly-owned subsidiary of Eaton Vance, their investment
adviser, an investment advisory fee based on the same fee schedule according to
assets and income earned.
The expense ratio of each State Fund is substantially higher than that of
National Fund. For the year ended March 31, 1999, the ratio of expenses to net
assets was 1.39% and 2.04% for Class A and B of Connecticut Fund, 1.32% and
2.02% for Class A and Class B of Michigan Fund, and 0.98% and 1.73% for Class A
and Class B of National Fund. Thus, State Fund shareholders will experience an
immediate and substantial reduction in expenses if the Reorganization is
approved. The actual amount of reduction cannot be determined until the Closing.
See "Fund Expenses" below.
3
<PAGE>
DISTRIBUTION ARRANGEMENTS. Shares of each Fund are sold on a continuous
basis by EVD, the Trust's distributor. Class A shares of each Fund are sold at
net asset value per share plus a sales charge; Class B shares of each Fund are
sold at net asset value subject to a contingent deferred sales charge ("CDSC").
The sales charge schedules are identical. In each Reorganization, State Fund
shareholders will receive shares of the corresponding class of National Fund.
Class B shareholders will be given credit for their holding period in a State
Fund in determining any applicable CDSC and the conversion of those shares to
Class A. National Fund offers Class C shares but these shares will not be
affected by the Reorganization.
REDEMPTION PROCEDURES AND EXCHANGE PRIVILEGES. Each Fund offers the same
redemption features pursuant to which proceeds of a redemption are remitted by
wire or check after receipt of proper documents including signature guaranties.
Each Fund has the same exchange privileges. For example, shareholders can
exchange into Eaton Vance Connecticut Municipals Fund or Eaton Vance Michigan
Municipals Fund to receive state specific tax-exempt income. Call Eaton Vance at
1-800-225-6265 for a prospectus.
TAX CONSEQUENCES. The Reorganizations are not expected to result in the
recognition of capital gain or loss to State Fund shareholders or State Funds.
Hale and Dorr LLP is expected to issue tax opinions to that effect.
Nevertheless, each Reorganization will be consummated even if it is taxable,
which means that State Fund shareholders may be required to recognize for tax
purposes a gain or loss depending upon their tax basis (generally, the original
purchase price) for State Fund shares, which includes the amounts paid for
shares issued in reinvested distributions, and the net asset value of the shares
of National Fund received from the Reorganization. Shareholders should consult
their tax advisers. See "INFORMATION ABOUT THE REORGANIZATION - Federal Income
Tax Consequences."
4
<PAGE>
FUND EXPENSES
SHAREHOLDER AND FUND EXPENSES
SHAREHOLDER TRANSACTION EXPENSES FOR ALL FUNDS
<TABLE>
Class A Class B
Shares Shares
- -------------------------------------------------------------------------- --------------------- ---------------------
<S> <C> <C>
Maximum Sales Charge (Load) (as a percentage of offering price) 2.25% None
Maximum Deferred Sales Charge (Load) None 3.00%
Maximum Sales Charge (Load) Imposed on Reinvested Distributions None None
Exchange Fee None None
</TABLE>
<TABLE>
ANNUAL FUND AND ALLOCATED PORTFOLIO OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
Distribution Total
and Service Annual Fund
Management (12b-1) Other Operating
Fees Fees** Expenses*** Expenses
- --------------------------------------------------------- -------------- ------------- ------------- -----------------
<S> <C> <C> <C> <C>
Connecticut Fund*
Class A shares 0.46% 0.00% 0.93% 1.39%
Class B shares 0.46 0.84 0.74 2.04
Michigan Fund
Class A shares 0.47% 0.00% 0.85% 1.32%
Class B shares 0.47 0.85 0.70 2.02
National Fund
Class A shares 0.48% 0.00% 0.50% 0.98%
Class B shares 0.48 0.89 0.36 1.73
</TABLE>
* Management Fees payable by the Connecticut Fund were reduced to 0.23% by
the investment adviser.
** Long-term holders of Class B shares may pay more than the economic
equivalent of the front-end sales charge permitted by the National
Association of Securities Dealers, Inc.
*** Other Expenses for Class A includes a service fee of 0.19% for the
Connecticut Fund, 0.15% for the Michigan Fund and 0.14% for the National
Fund.
EXAMPLE This example is intended to help you compare the cost of investing in
each Fund with the cost of investing in other mutual funds. An investor would
pay the following expenses and, in the case of Class A shares, maximum initial
sales charge, or, in the case of Class B shares, the applicable contingent
deferred sales charge on a $10,000 investment, assuming (a) 5% annual return and
(b) redemption at the end of each period (and, for Class B, no redemption):
<TABLE>
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------- -------------- -------------- --------------- --------------
<S> <C> <C> <C> <C>
Connecticut Fund
Class A shares $363 $655 $ 968 $1,856
Class B shares* 507 840 1,098 2,369
Class B shares (no redemption)* 207 640 1,098 2,369
Michigan Fund
Class A shares $356 $634 $ 932 $1,779
Class B shares* 505 834 1,088 2,348
Class B shares (no redemption)* 205 634 1,088 2,348
National Fund
Class A shares $323 $530 $754 $1,399
Class B shares* 476 745 939 2,041
Class B shares (no redemption)* 176 545 939 2,041
</TABLE>
* Costs for 5 years and 10 years reflect the expenses of Class A because
Class B shares generally convert to class A after four years.
5
<PAGE>
PRINCIPAL RISK FACTORS
As discussed above under "Principal Differences Between the Funds," the
National Fund has three investment policies that differ from each State Fund.
These differences relate to concentration in state issuers, credit quality and
diversification. These differences will affect returns to State Fund
shareholders if the Reorganizations are consummated.
The current investment portfolios are different. It is anticipated most of
each State Fund's portfolio securities will be retained after its
Reorganization, but such securities will constitute only a small part of the
overall investment portfolio of National Portfolio.
REASONS FOR THE REORGANIZATIONS
The Reorganizations have been considered by the Board of Trustees of the
Funds. In reaching the decision to recommend that the shareholders of each State
Fund vote to approve the Reorganizations, the Trustees, including the Trustees
who are not interested persons of the Trust, concluded that the Reorganizations
would be in the best interests of Fund shareholders and that the interests of
existing shareholders would not be diluted as a consequence thereof. In making
this determination, the Trustees considered a number of factors, including the
proposed terms of the Reorganizations.
The Trustees considered that combining the Funds would produce economies of
scale, which will be reflected in higher pre-tax and after-tax yields for
shareholders of each Fund. Based on annualized yields for the 30-day period
ended August 6, 1999, most State Fund shareholders would realize the following
increase in income:
<TABLE>
CONNECTICUT LIMITED FUND MICHIGAN LIMITED FUND
CLASS A CLASS B CLASS A CLASS B
------- ------- ------- -------
<S> <C> <C> <C> <C>
National Fund Yield 4.69% 4.05% 4.69% 4.05%
State Tax Liability1 (0.13%) (0.13%) (0.15%) (0.15%)
After Tax Yield 4.56% 3.92% 4.54% 3.90%
Current State Fund Yield 3.30% 2.68% 3.62% 2.92%
Net Increase in Income 1.26% 1.24% 0.92% 0.98%
</TABLE>
- -------------------
1 Assumes maximum state and local income tax rates, and no portion of the
income of National Fund is exempt from Connecticut or Michigan taxes. Does
not take into account the effect of federal alternative minimum tax or net
Connecticut minimum tax.
6
<PAGE>
For current yield information, call EVD at 800-225-6265. Yield will vary and is
only one component of total return. Shareholders should consider their own
circumstances which may result in the Reorganization not being advantageous to
them. For example, as of July 30, 1999, 30.1% of the income of National Fund was
subject to the federal alternative minimum tax, as opposed to 4.9% for
Connecticut and 18.4% for Michigan.
Moreover, the Board of Trustees considered that, in light of the State
Funds small size, they may not be economically viable for Eaton Vance to
continue sponsor and manage, and the Reorganizations were a better alternative
than liquidation.
THE BOARD OF TRUSTEES OF THE FUNDS BELIEVES THAT EACH PROPOSED
REORGANIZATION IS IN THE BEST INTERESTS OF SHAREHOLDERS AND RECOMMENDS THAT
STATE FUND SHAREHOLDERS VOTE FOR THEIR APPLICABLE REORGANIZATION.
INFORMATION ABOUT THE REORGANIZATIONS
At a meeting held on August 16, 1999, the Board of Trustees of the Funds
approved a Plan for each State Fund in the form set forth as Exhibit A to this
Prospectus.
AGREEMENTS AND PLANS OF REORGANIZATION. The Agreement and Plan of
Reorganization for each Fund provides that, at the Closing, National Fund will
acquire all of the assets of a State Fund in exchange for the issuance of
National Fund Shares to that State Fund and the National Fund will assume all of
the liabilities of the State Fund reflected on its unaudited statement of assets
and liabilities. The State Fund assets to be acquired will consist of each State
Fund's share of the securities and other assets held by the corresponding State
Portfolio, withdrawn by the State Fund from that Portfolio at or immediately
prior to the Closing. Immediately upon receipt of these assets, National Fund
will contribute them to the National Portfolio. The value of Class A and/or
Class B shares issued to a State Fund by National Fund will be the same as the
value of Class A and/or Class B shares that the State Fund has outstanding on
the Closing Date. The National Fund shares received by the State Fund will be
distributed to State Fund shareholders, and each State Fund shareholder will
receive shares of the corresponding class of National Fund equal in value to
those of State Fund held by such shareholder.
National Fund will assume all liabilities, expenses, costs, charges and
reserves of State Fund on the Closing Date. At or prior to the Closing, each
State Fund shall declare a dividend or dividends which, together with all
previous such dividends, shall have the effect of distributing to that State
Fund's shareholders all of State Fund's investment company taxable income, net
tax-exempt interest income, and net capital gain, if any, realized (after
reduction for any available capital loss carry-forward) in all taxable years
ending at or prior to the Closing.
At or as soon as practicable after a Closing, the relevant State Fund will
liquidate and distribute pro rata to its shareholders of record as of the Close
of Trading on the New York Stock Exchange on the Closing Date the full and
fractional National Fund Class A and/or Class B Shares equal in value to the
7
<PAGE>
State Fund shares exchanged. Such liquidation and distribution will be
accomplished by the establishment of shareholder accounts on the share records
of National Fund in the name of each such shareholder of State Fund,
representing the respective pro rata number of full and fractional National Fund
Class A and/or Class B Shares due such shareholder. All of National Fund's
future distributions attributable to the shares issued in the Reorganization
will be paid to shareholders in cash or invested in additional shares of
National Fund at the price in effect as described in National Fund's prospectus
on the respective payment dates in accordance with instructions previously given
by the shareholder to the Trust's transfer agent.
The consummation of each Plan is subject to the conditions set forth
therein. Notwithstanding approval by shareholders of a State Fund, a Plan may be
terminated at any time prior to the consummation of the Reorganization without
liability on the part of either party or its respective officers, trustees or
shareholders, by either party on written notice to the other party if certain
specified representations and warranties or conditions have not been performed
or do not exist on or before February 28, 2000. The Plan may be amended by
written agreement of its parties without approval of the shareholders of a State
Fund and a party may waive without shareholder approval any default by the other
or any failure to satisfy any of the conditions to its obligations; provided,
however, that following the Special Meeting, no such amendment or waiver may
have the effect of changing the provision for determining the number of National
Fund Shares to be issued to State Fund shareholders to the detriment of such
shareholders without their further approval.
Each Fund will bear its expenses related to the Reorganization.
DESCRIPTION OF NATIONAL FUND SHARES. Full and fractional Class A and/or
Class B shares of National Fund will be distributed to State Funds shareholders
in accordance with the procedures under the Plans as described above. Each share
will be fully paid, non-assessable when issued and transferable without
restrictions and will have no preemptive or cumulative voting rights and have
only such conversion or exchange rights as the Board of Trustees of the Trust
may grant in its discretion.
FEDERAL INCOME TAX CONSEQUENCES. It is expected that each Reorganization
should qualify as a tax-free transaction under Section 368(a) of the Internal
Revenue Code, which is expected to be confirmed by the legal opinion of Hale and
Dorr LLP at the Closing. Accordingly, shareholders of State Funds should not
recognize any capital gain or loss and State Funds' assets and capital loss
carryforwards should be transferred to National Fund without recognition of gain
or loss.
It is possible, however, that a Reorganization may fail to satisfy all of
the requirements necessary for tax-free treatment, in which event the
transaction will nevertheless proceed on a taxable basis. In this event, a
Reorganization will result in the recognition of gain or loss to State Funds'
shareholders depending upon their tax basis (generally, the original purchase
price) for their State Funds shares, which includes the amounts paid for shares
issued in reinvested distributions, and the net asset value of shares of
8
<PAGE>
National Fund received in a Reorganization. Shareholders of State Funds would,
in the event of a taxable transaction, receive a new tax basis in the shares
they receive of National Fund (equal to their initial value) for calculation of
gain or loss upon their ultimate disposition and would start a new holding
period for such shares.
Shareholders should consult their tax advisers regarding the effect, if
any, of a proposed Reorganization in light of their individual circumstances.
Because the foregoing discussion relates only to the federal income tax
consequences of the Reorganizations, shareholders should also consult their tax
advisers as to state and local tax consequences, if any.
CAPITALIZATION. The following table (which is unaudited) sets forth the
capitalization of State Funds and National Fund as of July 30, 1999, and on a
pro forma basis as of that date giving effect to the proposed acquisition of
assets of both State Funds at net asset value.
<TABLE>
Pro Forma
Combined After
Connecticut Fund Michigan Fund National Fund Reorganization
(Class A) (Class B) (Class A) (Class B) (Class A) (Class B) (Class A) (Class B)
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net assets $7,207,852 $1,262,909 $9,504,414 $584,079 $69,589,235 $5,456,247 $86,301,501 $7,303,235
Net asset value
per share $ 9.87 $ 9.86 $ 9.64 $ 9.64 $ 10.26 $ 10.26 $ 10.26 $ 10.26
Shares
outstanding $ 729,995 $ 128,025 $ 985,667 $ 60,580 $ 6,780,468 $ 531,759 $ 8,409,344 $ 711,775
</TABLE>
INVESTMENT PERFORMANCE. Average annual total return is determined by
multiplying a hypothetical initial purchase order of $1,000 by the average
annual compound rate of return (including capital appreciation/depreciation, and
dividends and distributions paid and reinvested) for the stated period and
annualizing the result. The calculation assumes that all dividends and
distributions are reinvested at net asset value on the reinvestment dates.
The table below indicates the average annual total return (excluding a
sales charge) (capital change plus reinvestment of all distributions) on a
hypothetical investment of $1,000 in each Fund, covering the one and five year
periods and life of Fund ended March 31, 1999.
<TABLE>
VALUE OF A $1,000 INVESTMENT
Connecticut Fund Michigan Fund National Fund
Total Return Total Return Total Return
------------ ------------ ------------
Class A Class B Class A Class B Class A Class B
Investment Average Average Average Average Average Average
Period Annual Annual Annual Annual Annual Annual
- ---------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
1 Year 4.45% 3.90% 3.53% 3.06% 3.89% 3.29%
5 Years 5.10% 4.79% 5.03% 4.70% 5.38% 4.99%
Life of Fund* 4.39% 4.13% 4.27% 3.99% 5.53% 5.24%
</TABLE>
- ------
* Inception of Connecticut Fund Class A and Class B was January 21, 1997 and
April 16, 1993, respectively; of Michigan Fund Class A and Class B was
October 22, 1996 and April 16, 1993, respectively; and of National Fund
Class A and Class B was June 27, 1996 and May 22, 1992, respectively.
9
<PAGE>
Investment results will fluctuate over time, and prior performance should
not be considered as a representation of what an investment may earn or what an
investor's total return may be in any future period.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. The total returns of National
Fund and the factors that materially affected the Fund's performance during the
most recent fiscal year are contained in the Fund's annual report, relevant
portions of which are attached hereto as Exhibit B and incorporated by reference
herein.
The performance of State Funds is described under the caption "Management's
Discussion" in the Annual Report of State Funds for the year ended March 31,
1999, which was previously mailed to State Funds shareholders.
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and policies of each Fund are identical except as
set forth in the "Summary" above. Summary information about the investment
objectives and policies of each State Fund and National Fund is set forth below.
More complete information regarding the same is set forth in the Prospectus
dated August 1, 1999 of National Fund, enclosed herewith, in the Statement of
Additional Information also dated August 1, 1999 of National Fund, and the
Prospectus and Statement of Additional Information each dated August 1, 1999 of
State Funds, each of which has been filed with the Securities and Exchange
Commission. Shareholders should consult such Prospectuses and Statements of
Additional Information, as supplemented, for a more thorough comparison.
INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT POLICIES AND RISKS OF STATE
FUNDS. The investment objective of each State Fund is to provide a high level of
current income exempt from regular federal income tax and from particular state
or local income or other taxes, and limited principal fluctuation. Each State
Fund primarily invests in investment grade municipal obligations (those rated
BBB or Baa or higher), but may also invest in lower quality obligations. Each
Fund invests in obligations having a dollar weighted average duration of between
three and nine years.
Each Fund may concentrate in certain types of municipal obligations (such
as industrial development bonds, housing bonds, hospital bonds or utility
bonds), so Fund shares could be affected by events that adversely affect a
particular sector. Each Fund may purchase derivative instruments (such as
futures contracts and options thereon), bonds that do not require the periodic
payment of interest, bonds issued on a "when issued" basis and municipal leases.
A portfolio of each Fund's distributions generally will be subject to federal
alternative minimum tax.
The portfolio manager purchases and sells securities to maintain a
competitive yield and to enhance return based upon the relative value of the
securities in the marketplace. The portfolio manager may also trade securities
to minimize taxable capital gains to shareholders. The manager attempts to limit
principal fluctuation by investing in a portfolio of obligations having a dollar
weighted average duration of between three and nine years.
10
<PAGE>
Each Fund currently invests its assets in a separate registered investment
company with the same investment objective and policies as that Fund.
Because a significant portion of assets is invested in obligations of
issuers located in a single state, each Fund is sensitive to factors affecting
that state, such as changes in the economy, decreases in tax collection or the
tax base, legislation which limits taxes and changes in issuer credit ratings.
Each Fund is non-diversified, which means that it may invest a larger portion of
its assets in the obligations of a limited number of issuers than a diversified
fund, and may be adversely affected by developments affecting a particular
issuer.
Because obligations rated BBB or Baa and below (so-called "junk bonds") are
more sensitive to the financial soundness of their issuers than higher quality
obligations, Fund shares may fluctuate more in value than shares of a fund
investing solely in higher quality obligations. Obligations rated BBB or Baa
have speculative characteristics, while lower rated obligations are
predominantly speculative. The credit ratings assigned a state's general
obligations (if any) by S&P, Moody's and Fitch are contained in the
Fund-specific summaries that follow this page.
The value of Fund shares may change when interest rates change. When
interest rates rise, the value of Fund shares typically will decline. Fund
yields will also fluctuate over time. A Fund's use of derivatives is subject to
certain limitations and may expose the Funds to increased risk of principal loss
due to imperfect correlation, failure of the counterparty and unexpected price
or interest rate movements.
When-issued securities are subject to the risk that when delivered to the
Fund they will be worth less than the price the Fund agreed to pay for them.
Municipal leases often require a legislative appropriation of funds for payment.
If the necessary appropriation is not made, the issuer of the lease may not be
able to meet its obligations.
INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT POLICIES AND RISKS OF
NATIONAL FUND. The investment objective of National Fund is to provide a high
level of current income exempt from regular federal income tax and limited
principal fluctuation. The Fund primarily invests in investment grade municipal
obligations (those rated BBB or Baa or higher), but may also invest in lower
quality obligations. The Fund invests in obligations having a dollar weighted
average duration of between three and nine years.
The Fund may concentrate in certain types of municipal obligations (such as
industrial development bonds, housing bonds, hospital bonds or utility bonds),
so Fund shares could be affected by events that adversely affect a particular
sector. The Fund may purchase derivative instruments (such as futures
contracts), bonds that do not require the periodic payment of interest, bonds
issued on a "when issued" basis and municipal leases. A portion of the Fund's
distributions generally will be subject to federal alternative minimum tax.
11
<PAGE>
The portfolio manager purchases and sells securities to maintain a
competitive yield and to enhance return based upon the relative value of the
securities in the marketplace. The portfolio manager may also trade securities
to minimize taxable capital gains to shareholders. The manager attempts to limit
principal fluctuation by investing in a portfolio of obligations having a dollar
weighted average duration of between three and nine years.
The Fund currently invests its assets in National Limited Maturity
Municipals Portfolio, a separate registered investment company with the same
investment objective and policies as the Fund.
Because obligations rated BBB or Baa and below are more sensitive to the
financial soundness of their issuers than higher quality obligations, Fund
shares may fluctuate more in value than shares of a fund investing solely in
higher quality obligations. Obligations rated BBB or Baa have speculative
characteristics, while lower rated obligations (so-called "junk bonds") are
predominantly speculative.
The value of Fund shares may change when interest rates change. When
interest rates rise, the value of Fund shares typically will decline. Fund
yields will also fluctuate over time. The Fund's use of derivatives is subject
to certain limitations and may expose the Fund to increased risk of principal
loss due to imperfect correlation, failure of the counterparty and unexpected
price or interest rate movements.
When-issued securities are subject to the risk that when delivered to the
Fund they will be worth less than the price the Fund agreed to pay for them.
Municipal leases often require a legislative appropriation of funds for payment.
If the necessary appropriation is not made, the issuer of the lease may not be
able to meet its obligations.
INVESTMENT ADVISER AND PORTFOLIO MANAGER. Boston Management and Research
("BMR"), a wholly-owned subsidiary of Eaton Vance, serves as investment adviser
to each Portfolio. William H. Ahern, Jr. is the portfolio manager of each
Portfolio. He also manages other Eaton Vance portfolios, and has been an Eaton
Vance portfolio manager for more than 5 years, and is a Vice President of Eaton
Vance and BMR.
COMPARATIVE INFORMATION ON DISTRIBUTION ARRANGEMENTS
EVD serves as distributor (principal underwriter) for all Funds, pursuant
to Distribution Agreements. For its services as underwriter, EVD generally
receives fees for sales of shares. With respect to Class A shares, these fees
are paid by investors at the time they purchase shares. Class A shares are sold
on a continuous basis at net asset value plus a sales charge as set forth in the
Prospectus. The applicable sales charge depends upon a number of factors and is
subject to a number of waivers. No sales charge will be imposed with respect to
the National Fund Shares received by the State Fund shareholders pursuant to the
Reorganization. Class B shares are sold at net asset value but are subject to a
12
<PAGE>
declining CDSC (3% maximum) if redeemed within four years of purchase. National
Fund also offers Class C shares, which are sold at net asset value subject to a
1% CDSC if redeemed within one year of purchase. Because neither State Fund
offers Class C shares, no Class C shares of National Fund will be issued in
connection with the Reorganization.
Each Fund is authorized under the same Service Plan (the "Service Plan")
for the Class A Shares to make payments for personal services and/or the
maintenance of shareholder accounts. The Plan provides that each Fund may pay
service fees to EVD, financial service firms ("Authorized Firms") and other
persons in amounts not exceeding .25% of a Fund's average daily net assets for
any fiscal year. The Trustees have initially implemented the Service Plan by
authorizing the Funds to make quarterly service fee payments to EVD and
Authorized Firms in amounts not expected to exceed .15% of the Fund's average
daily net assets for any fiscal year based on the value of each Fund's shares
sold by such persons and remaining outstanding for at least twelve months.
Each Fund has also adopted a Distribution Plan pursuant to Rule 12b-1 under
the 1940 Act for its Class B shares. The Plan is designed to permit an investor
to purchase shares through an Authorized Firm without incurring an initial sales
charge and at the same time permit the Principal Underwriter to compensate
Authorized Firms in connection therewith. Under such Plans, Class B pays the
Principal Underwriter a fee, accrued daily and paid monthly, at an annual rate
not exceeding .75% of its average daily net assets to finance the distribution
of its shares. Such fees compensate the Principal Underwriter for sales
commissions paid by it to Authorized Firms on the sale of Class B shares and for
interest expenses. Under each Class B Plan, the Principal Underwriter uses its
own funds to pay sales commissions (except on exchange transactions and
reinvestments) to Authorized Firms at the time of sale equal to 2.5% of the
purchase price of the Class B shares sold by such Firms. CDSCs paid to the
Principal Underwriter will be used to reduce amounts owed to it. Because
payments to the Principal Underwriter under the Plan are limited, uncovered
distribution charges (sales commissions due the Principal Underwriter plus
interest, less the above fees and CDSCs received by it) may exist indefinitely.
Through July 30, 1999, the outstanding uncovered distribution charges calculated
under the Plan for the Connecticut and Michigan Funds amounted to approximately
$216,000 and $362,000, respectively. An amount equal to the contingent deferred
sales charge that would be assessed on State Fund Class B shares if redeemed on
the Closing Date will become a liability of National Fund Class B if the
Reorganization is consummated. As of July 30, 1999, this amount would have been
$21,604 and $12,526, respectively.
The Class B Plan also authorizes each Class B to make payments of service
fees to the Principal Underwriter, Authorized Firms and other persons in amounts
not exceeding .15% of its average daily net assets for personal services, and/or
the maintenance of shareholder accounts. Under the Class B Plan, this fee is
paid quarterly in arrears based on the value of Class B shares sold by such
persons and remaining outstanding for at least twelve months.
13
<PAGE>
SHAREHOLDER SERVICES
SHAREHOLDER SERVICES. There are no differences in the shareholder services
offered by the Funds.
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS
GENERAL. Each Fund is a separate series of Eaton Vance Investment Trust
(the "Trust"), a Massachusetts business trust, governed by an Amended and
Restated Declaration of Trust dated January 11, 1993, as amended and applicable
Massachusetts law.
SHAREHOLDER LIABILITY. Under Massachusetts law, shareholders of a
Massachusetts business trust could, under certain circumstances, be held
personally liable for the obligations of the trust, including its other series.
However, the Declaration of Trust disclaims shareholder liability for acts or
obligations of the trust and other series of the trust and requires that notice
of such disclaimer be given in each agreement, obligation, or instrument entered
into or executed by the trust or the trustees. Indemnification out of the trust
property for all losses and expenses of any shareholder held personally liable
by virtue of his status as such for the obligations of the trust is provided for
in the Declaration of Trust and By-laws. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is considered to be
remote since it is limited to circumstances in which the respective disclaimers
are inoperative and the series would be unable to meeting their respective
obligations.
Copies of the Declaration of Trust may be obtained from the Trust upon
written request at its principal office or from the Secretary of State of the
Commonwealth of Massachusetts.
INFORMATION ABOUT THE FUNDS
Information about National Fund is included in its current Prospectus dated
August 1, 1999, a copy of which is included herewith and incorporated by
reference herein. Additional information about National Fund is included in the
Statement of Additional Information dated August 1, 1999. This Statement of
Additional Information has been filed with the Securities and Exchange
Commission and is incorporated by reference herein. Copies of this Statement may
be obtained without charge by writing to Eaton Vance Distributors, Inc., The
Eaton Vance Building, 255 State Street, Boston, MA 02109. Information concerning
the operations and management of the State Funds is incorporated herein by
reference from their current Prospectus and Statement of Additional Information,
each dated August 1, 1999, copies of which may be obtained without charge by
writing Eaton Vance Investment Trust at The Eaton Vance Building, 255 State
Street, Boston, MA 02109 or by calling (800) 225-6265.
The Trust, on behalf of each Fund, is currently subject to the
informational requirements of the Securities Exchange Act of 1934, an amended
(the "1934 Act"), and in accordance therewith files proxy material, reports and
other information with the Securities and Exchange Commission. These reports can
be inspected and copied at the Public Reference Facilities maintained by the
Securities and Exchange Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
14
<PAGE>
Washington, DC 20549, as well as at the following regional offices: Northeast
Regional Office, 7 World Trade Center, Suite 1300 New York, NY 10048; and
Midwest Regional Office, Citicorp Center, 500 W. Madison Street, Suite 1400,
Chicago, IL 60661-2511. Copies of such material can also be obtained from the
Public Reference Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington DC 20549 at prescribed rates.
EATON VANCE. Eaton Vance, its affiliates and predecessor companies have
been managing assets of individuals and institutions since 1924 and of
investment companies since 1931. Eaton Vance manages assets of over $39 billion.
Eaton Vance is a wholly-owned subsidiary of Eaton Vance Corp., a holding company
with publicly traded stock. Eaton Vance Corp., through its subsidiaries and
affiliates, engages in investment management, administration and marketing
activities.
Eaton Vance's advisory fee revenue is likely to increase slightly if the
Reorganizations are consummated. This is because Eaton Vance has voluntarily
waived one-half of its advisory fee to which it is contractually entitled from
the Connecticut Portfolio. In addition, because advisory fees are based, in
part, on income earned and the National Portfolio's holdings normally generate a
higher yield than the State Portfolios, advisory fee revenues will be higher.
Based on assets and yields on July 30, 1999, the total additional revenues to
Eaton Vance would be approximately $23,000 per annum.
VOTING INFORMATION
Proxies from the shareholders of the State Funds are being solicited by the
Trust's Board of Trustees for the Special Meeting of Shareholders and any
adjournments thereof (the "Special Meeting"). The Special Meeting is scheduled
to be held at the offices of the Trust, The Eaton Vance Building, 255 State
Street, Boston, Massachusetts on October 29, 1999 at 1:30 p.m. At the Special
Meeting, shareholders of each State Fund will be asked to consider and vote upon
their Plan. The approval of the Reorganization by shareholders of National Fund
is not required under the Declaration of Trust or By-laws or under Massachusetts
law, and accordingly, shareholders of National Fund will not be voting in
connection with the Reorganization.
Any person giving a proxy may revoke it at any time prior to its use. A
shareholder of record may revoke a proxy at any time before it has been
exercised by filing a written revocation with the Secretary of the Trust at its
address set forth above; by filing a duly executed proxy bearing a later date;
or by appearing in person, notifying the Secretary and voting by ballot at the
Special Meeting. A written proxy may be delivered to the Fund or its transfer
agent prior to the meeting by facsimile machine, graphic communication equipment
or similar electronic equipment. Any shareholder of record as of the record date
attending the Special Meeting may vote in person whether or not a proxy has been
previously given, but the presence (without further action) of a shareholder at
the Special Meeting will not constitute revocation of a previously given proxy.
15
<PAGE>
The enclosed form of proxy, if properly executed and received by the Board of
Trustees in time for voting and not so revoked, will be voted in accordance with
the instructions noted thereon. If no instructions are given, the proxy will be
voted FOR approval of the Agreement and Plan of Reorganization, and, at the
discretion of the proxy holders, on any other matters that may properly come
before the Special Meeting.
The affirmative vote of the holders of a majority of the outstanding shares
of a State Fund as defined in the 1940 Act is required to approve its Plan. Such
"majority" vote is the vote of the holders of the lesser of (a) 67% or more of
the shares present or represented by proxy at the Special Meeting, if the
holders of more than 50% of the outstanding shares are present or represented by
proxy, or (b) 50% of the outstanding shares of the State Fund. Class A and Class
B shareholders will vote together as a class. Approval of the Agreement and Plan
of Reorganization by the shareholders of a State Fund is a condition of the
consummation of the Reorganization. Each State Fund will vote separately and
their reorganizations could be consummated on different days.
For purposes of determining the presence of a quorum for transacting
business at the Special Meeting and for determining whether sufficient votes
have been received for approval of the proposal to be acted upon at the Special
Meeting, abstentions and broker "non-votes" (that is, proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares on a particular matter
with respect to which the brokers or nominees do not have discretionary power)
will be treated as shares that are present at the Special Meeting and entitled
to vote on the matter, but which have not been voted. For this reason,
abstentions and broker non-votes will assist State Funds in obtaining a quorum;
both have the practical effect of a "no" vote for purposes of obtaining the
requisite vote for approval of the proposal to be acted upon at the Special
Meeting.
If the Reorganization is consummated, legal fees and the costs of
soliciting proxies (comprised of printing and postage expenses) estimated at
$20,000 per State Fund will be considered as part of the total expenses of the
Reorganization. The Board of Trustees expects that this solicitation will be
made primarily by mail. Additional solicitations may be made, without
remuneration, personally or by telephone by officers or employees of Eaton Vance
or its affiliates, or for remuneration by a solicitation firm.
Shareholders of the State Funds of record at the close of business on
September 15, 1999 (the "record date") will be entitled to vote at the Special
Meeting. The holders of a majority of the shares of a State Fund outstanding at
the close of business on the record date present in person or represented by
proxy will constitute a quorum for the meeting; however, as noted above, the
affirmative vote of a majority of the shares of a Fund (as defined in the 1940
Act) is required to approve the Reorganization. In the event a quorum is not
present at the Special Meeting or in the event a quorum is present at the
Special Meeting but sufficient votes to approve the Agreement and Plan of
Reorganization are not received, the persons named as proxies may propose one or
more adjournments of the Special Meeting to permit further solicitation of
16
<PAGE>
proxies, provided they determine such an adjournment and additional solicitation
is reasonable and in the interest of shareholders based on a consideration of
all relevant factors, including the percentage of votes then cast, the
percentage of negative votes then cast, the nature of the proposed solicitation
activities and the nature of the reasons for such further solicitation.
Shareholders are entitled to the number of votes equal to the number of
shares held by such shareholder. As of September 15, 1999, there were
_________________ and ________________ shareholders of record and
___________________ and ___________________ issued and outstanding shares of
beneficial interest of the Connecticut and Michigan Funds, respectively. There
were no 5% shareholders of either Fund on such date.
As of the record date, the Trustees and officers of the Trust as a group
owned less than one percent of the outstanding shares of any Fund.
THE TRUSTEES OF THE TRUST, INCLUDING THE INDEPENDENT TRUSTEES,
RECOMMEND APPROVAL OF THE PLANS OF REORGANIZATION.
17
<PAGE>
DISSENTERS RIGHTS
Neither the Declaration of Trust nor Massachusetts law grants the
shareholders of State Funds any rights in the nature of dissenters rights of
appraisal with respect to any action upon which such shareholders may be
entitled to vote; however, the normal right of mutual fund shareholders to
redeem their shares is not affected by the proposed Reorganization.
NATIONAL FUND FINANCIAL HIGHLIGHTS
The financial highlights are intended to help you understand a Fund's
financial performance for the past five years. Certain information in the table
reflects the financial results for a single Fund share. The total returns in the
table represents the rate an investor would have earned (or lost) on an
investment in the Fund (assuming reinvestment of all distributions and not
taking into account a sales charge). This information has been audited by
Deloitte & Touche LLP, independent accountants. The report of Deloitte & Touche
LLP and the National Fund's financial statements are incorporated herein by
reference and included in the annual report, which is available on request. The
National Fund began offering three class of shares on April 1, 1998. Prior to
that date, the National Fund offered only Class A and Class B shares and Class C
existed as a separate fund.
<TABLE>
YEAR ENDED MARCH 31,
-------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
-------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS A CLASS B CLASS A(1) CLASS B CLASS B CLASS B
----------- ----------- ----------- ----------- ----------- ----------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE - BEGINNING OF YEAR $10.580 $10.580 $10.070 $10.070 $10.030 $10.170 $10.130 $10.160
------- ------- ------- ------- ------- ------- ------- -------
Income from operations
Net investment income $ 0.519 $ 0.412 $ 0.527 $ 0.454(2) $ 0.393 $ 0.428 $ 0.413 $ 0.400
Net realized and unrealized gain (loss) (0.090) (0.066) 0.488 0.488 0.033(3) (0.098) 0.040 0.033
-------- -------- -------- -------- -------- --------- -------- --------
TOTAL INCOME FROM OPERATIONS $ 0.429 $ 0.346 $ 1.105 $ 0.942 $ 0.426 $ 0.330 $ 0.453 $ 0.433
------- ------- ------- ------- ------- ------- ------- -------
Less distributions
From net investment income $(0.519) $ (0.436) $ (0.505) $ (0.432) $ (0.386) $ (0.430) $ (0.413) $ (0.400)
In excess of net investment income --- --- --- --- --- --- --- (0.058)
From net realized gain on investments --- --- --- --- --- --- --- (0.005)
--------- --------- --------- --------- --------- --------- --------- --------
TOTAL DISTRIBUTIONS $(0.519) $ (0.436) $ (0.505) $ (0.432) $ (0.386) $ (0.430) $ (0.413) $ (0.463)
--------- --------- --------- --------- --------- --------- --------- --------
NET ASSET VALUE - END OF YEAR $10.490 $10.490 $10.580 $10.580 $10.070 $10.070 $10.170 $10.130
======= ======= ======= ======= ======= ======= ======= =======
TOTAL RETURN (4) 3.89% 3.29% 10.50% 9.52% 4.06% 3.30% 4.51% 4.43%
Ratios / Supplemental Data
Net assets, end of year (000's omitted) $73,048 $ 5,450 $59,992 $11,538 $37,072 $48,692 $112,027 $141,289
Ratios (as a percentage of average
daily net assets):
Expenses (5)(6) 0.98% 1.73% 0.99% 1.73% 0.99%(7) 1.69% 1.64% 1.57%
Expenses after custodian fee
reduction (5) 0.97% 1.72% 0.98% 1.72% 0.97%(7) 1.67% 1.63% ---
Net investment income 4.96% 4.23% 5.16% 4.42% 5.14%(7) 4.37% 4.04% 3.99%
Portfolio Turnover of the Portfolio 26% 26% 41% 41% 68% 68% 68% 56%
</TABLE>
18
<PAGE>
(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. 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.
(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 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.
(7) Annualized.
19
<PAGE>
STATE FUNDS FINANCIAL HIGHLIGHTS
The financial highlights are intended to help you understand a Fund's
financial performance for the past five years. Certain information in the tables
reflects the financial results for a single Fund share. The total returns in the
tables represent the rate an investor would have earned (or lost) on an
investment in the State Funds (assuming reinvestment of all distributions and
not taking into account a sales charge). This information has been audited by
Deloitte & Touche LLP, independent accountants. The report of Deloitte & Touche
LLP and the State Funds' financial statements are incorporated herein by
reference and included in the State Funds' annual report, which is available on
request. Connecticut Fund and Michigan Fund began offering Class A and Class B
shares in 1997 and 1996, respectively.
<TABLE>
CONNECTICUT FUND
-------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
-------------------------------------------------------------------------------------------
1999(1) 1998 1997 1996 1995
----------------------- ----------------------- ----------------------- ---------- --------
CLASS A CLASS B CLASS A CLASS B CLASS A(2) CLASS B CLASS B CLASS B
----------- ----------- ----------- ----------- ----------- ----------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE - BEGINNING OF YEAR $10.110 $10.110 $ 9.790 $ 9.790 $ 9.870 $ 9.850 $ 9.690 $ 9.690
------- ------- -------- -------- -------- -------- -------- --------
Income (loss) from operations
Net investment income $ 0.431 $ 0.365 $ 0.429 $ 0.357(1) $ 0.087 $ 0.398 $ 0.379 $ 0.373
Net realized and unrealized gain (loss) 0.031 0.025 0.333 0.333 (0.082) (0.089) 0.150 0.026
-------- -------- -------- -------- --------- --------- -------- --------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.462 $ 0.390 $ 0.762 $ 0.690 $ 0.005 $ 0.309 $ 0.529 $ 0.399
------- ------- ------- ------- ------- ------- ------- -------
Less distributions
From net investment income $(0.431) $ (0.370) $ (0.429) $ (0.370) $ (0.085) $ (0.369) $ (0.369) $ (0.373)
In excess of net investment income (0.011) --- (0.013) --- --- --- --- (0.026)
---------- --------- ---------- --------- --------- --------- --------- --------
TOTAL DISTRIBUTIONS $(0.442) $ (0.370) $ (0.442) $ (0.370) $ (0.085) $ (0.369) $ (0.369) $ (0.399)
--------- --------- --------- --------- --------- --------- --------- --------
NET ASSET VALUE - END OF YEAR $10.130 $10.130 $10.110 $10.110 $ 9.790 $ 9.790 $ 9.850 $ 9.690
======= ======= ======= ======= ======== ======== ======== ========
TOTAL RETURN (5) 4.45% 3.90% 7.99% 7.02% (0.13)% 3.21% 5.50% 4.27%
Ratios / Supplemental Data
Net assets, end of year (000's omitted) $ 7,514 $ 1,410 $ 6,034 $ 2,531 $ 586 $ 10,227 $13,014 $15,613
Ratios (as a percentage of average
daily net assets):
Expenses (6)(7) 1.16% 1.81% 1.20% 1.92% 0.70%(8) 1.72% 1.53% 1.23%
Expenses after custodian fee
reduction (5) 1.13% 1.78% 1.18% 1.90% 0.66%(8) 1.68% 1.49% ---
Net investment income 4.25% 3.60% 4.26% 3.62% 5.06%(8) 3.93% 3.78% 3.89%
Portfolio Turnover of the Portfolio(9) 5% 5% 23% 23% 46% 46% 52% 73%
</TABLE>
+ The operating expenses of the Fund reflect a reduction of the investment
adviser fee, an allocation of expenses to the adviser or administrator, or
both. Had such action not been taken, the ratios and investment income per
share would have been as follows:
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ratios (as a percentage of average
daily net assets): 1.39% 2.04% 1.43% 2.15% 0.94%(8) 1.96% 1.86% 1.81%
Expenses (6)(7) 1.36% 2.01% 1.41% 2.13% 0.90%(8) 1.92% --- ---
Expenses after custodian fee
reduction (6) 4.02% 3.37% 4.03% 3.39% 4.82%(8) 3.69% 3.45% 3.31%
Net investment income $ 0.408 $ 0.342 $ 0.406 $ 0.334 $ 0.083 $ 0.374 $ 0.346 $ 0.317
Net investment income per share 1.39% 2.04% 1.43% 2.15% 0.94%(8) 1.96% 1.86% 1.81%
</TABLE>
20
<PAGE>
<TABLE>
MICHIGAN FUND
-------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
-------------------------------------------------------------------------------------------
1999(1) 1998 1997 1996 1995
-------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS A CLASS B CLASS A(2) CLASS B CLASS B CLASS B
----------- ----------- ----------- ----------- ----------- ----------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE - BEGINNING OF YEAR $10.040 $10.040 $ 9.740 $ 9.740 $ 9.740 $ 9.730 $ 9.630 $ 9.650
------- ------- -------- -------- -------- -------- -------- --------
Income (loss) from operations
Net investment income $ 0.424 $ 0.356 $ 0.430 $ 0.357(1) $ 0.201 $ 0.382 $ 0.383 $ 0.364
Net realized and unrealized gain (loss) (0.056) (0.053) 0.329 0.329 0.001 0.012 0.090 0.030
---------- ---------- --------- --------- --------- --------- --------- --------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.368 $ 0.303 $ 0.759 $ 0.686 $ 0.202 $ 0.394 $ 0.473 $ 0.394
-------- -------- -------- -------- -------- -------- -------- --------
Less distributions
From net investment income $(0.424) $(0.368) $ (0.430) $ (0.386) $ (0.201) $ (0.384) $ (0.373) $(0.364)
In excess of net investment income (0.014) (0.005) (0.029) --- (0.001) --- --- (0.050)
---------- ---------- ---------- --------- ---------- --------- --------- --------
TOTAL DISTRIBUTIONS $(0.438) $(0.373) $ (0.459) $ (0.386) $ (0.202) $ (0.384) $ (0.373) $(0.414)
--------- --------- --------- --------- --------- --------- --------- --------
NET ASSET VALUE - END OF YEAR $ 9.970 $ 9.970 $ 10.040 $ 10.040 $ 9.740 $ 9.740 $ 9.730 $ 9.630
======== ======== ========= ======== ======== ======== ======== ========
TOTAL RETURN (4) 3.53% 3.06% 8.23% 7.24% 1.89% 4.14% 4.95% 4.24%
Ratios / Supplemental Data
Net assets, end of year (000's omitted) $ 9,786 $ 654 $ 9,177 $ 1,839 $ 406 $ 13,431 $ 18,705 $ 26,048
Ratios (as a percentage of average
daily net assets):
Expenses (6)(7) 1.32% 2.02% 1.36% 2.04% 1.18%(8) 1.99% 1.78% 1.55%
Expenses after custodian fee
reduction (5) 1.29% 1.99% 1.32% 2.00% 1.15%(8) 1.96% 1.75% ---
Net investment income 4.23% 3.56% 4.32% 3.72% 4.56%(8) 3.91% 3.92% 3.82%
Portfolio Turnover of the Portfolio(9) 16% 16% 21% 21% 28% 28% 40% 111%
</TABLE>
+ The operating expenses of the Fund reflect a reduction of the investment
adviser fee, an allocation of expenses to the adviser or administrator, or
both. Had such action not been taken, the ratios and investment income per
share would have been as follows:
<TABLE>
<S> <C>
Ratios (as a percentage of average daily net assets):
Expenses (6) 1.66%
Net Investment income 3.71%
Net investment income per share $ 0.354
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) For the period from the start of business of Class A shares to the fiscal
year end March 31, 1997. The start of business of Class A shares for the
Connecticut Fund and Michigan Fund is January 21, 1997 and October 22,
1996, respectively.
(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) Distributions in excess of net investment income are less than $0.001 per
share.
(5) 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. 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.
(6) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(7) 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.
(8) Annualized.
(9) Portfolio Turnover represents the rate of portfolio activity for the period
while the Funds were making investments directly in securities.
21
<PAGE>
EXPERTS
The statement of assets and liabilities, including the statement of
investment securities, of National Fund as of March 31, 1999, the related
statement of operations for the year then ended, the related statement of
changes in net assets for the year then ended and the financial highlights
included in its Statement of Additional Information have been incorporated
herein in reliance on the report of Deloitte & Touche LLP, independent public
accountants, given on the authority of that firm as experts in accounting and
auditing.
OTHER MATTERS
The Board of Trustees does not know of any other matters to be considered
at the Special Meeting other than approval of the Plans. If any other matters
are properly presented to the Special Meeting, it is the intention of proxy
holders to vote such proxies on such matters in accordance with their judgment.
22
<PAGE>
EXHIBIT A
AGREEMENT
AND
PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made as of
this 16th day of August, 1999, by and among Eaton Vance Investment Trust, a
Massachusetts business trust ("Investment Trust") on behalf of its series Eaton
Vance [Connecticut / Michigan] Limited Maturity Municipals Fund ("State Fund")
and Eaton Vance National Limited Maturity Municipals Fund ("National Fund").
WITNESSETH
WHEREAS, Investment Trust is registered under the Investment Company
Act of 1940, as amended (the "1940 Act") as an open-end management investment
company authorized to issue an unlimited number of shares of beneficial interest
without par value in one or more series (such as National Fund), and the
Trustees of Investment Trust have divided the shares of State and National Fund
into multiple classes, including Class A and Class B shares ("State Fund Shares"
and "National Fund Shares");
WHEREAS, State Fund currently invests all of its assets in Connecticut
/ Michigan Limited Maturity Municipals Portfolio (the "Limited Portfolio"), a
New York trust registered under the 1940 Act as an open-end management
investment company;
WHEREAS, the National Fund currently invests all of its assets in
National Limited Maturity Municipals Portfolio (the "National Portfolio"), a New
York trust registered under the 1940 Act as an open-end management investment
company;
WHEREAS, Boston Management and Research, a wholly owned subsidiary of
Eaton Vance Management, serves as investment adviser to the Portfolios; and
WHEREAS, Investment Trust desires to provide for the reorganization of
State Fund through the acquisition by National Fund of substantially all of the
assets of State Fund in exchange for National Fund Shares in the manner set
forth herein;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows:
1. DEFINITIONS
1.1 The term "1933 Act" shall mean the Securities Act of 1933,
as amended.
1.2 The term "1934 Act" shall mean the Securities Exchange Act of
1934, as amended.
1.3 The term "Agreement" shall mean this Agreement and Plan of
Reorganization.
1.4 The term "Assumed Liabilities" shall mean all liabilities,
expenses, costs, charges and receivables of State Fund as of
the Close of Trading on the New York Stock Exchange on the
Valuation Date.
<PAGE>
1.5 The term "Business Day" shall mean any day that is not a
Saturday or Sunday and that the New York Stock Exchange is
open.
1.6 The term "Close of Trading on the NYSE" shall mean the close
of regular trading, which is usually 4:00 p.m. Eastern time.
1.7 The term "Closing" shall mean the closing of the transaction
contemplated by this Agreement.
1.8 The term "Closing Date" shall mean the first Monday following
receipt of all necessary regulatory approvals and the final
adjournment of the meeting of State Fund shareholders at which
this Agreement is considered, or such other date as may be
agreed by the parties on which the Closing is to take place.
1.9 The term "Commission" shall mean the Securities and Exchange
Commission.
1.10 The term "Custodian" shall mean Investors Bank & Trust
Company.
1.11 The term "Delivery Date" shall mean the date contemplated by
Section 3.3 of this Agreement.
1.12 The term "Investment Trust N-14" shall mean Investment Trust's
registration statement on Form N-14, as may be amended, that
describes the transactions contemplated by this Agreement and
the National Fund Shares.
1.13 The term "National Investment Trust N-1A" shall mean the
registration statement, as amended, on Form N-1A of Investment
Trust with respect to National Fund in effect on the date
hereof or on the Closing Date, as the context may require.
1.14 The term "NYSE" shall mean the New York Stock Exchange.
1.15 The term "Proxy Statement" shall mean the combined prospectus
and proxy statement furnished to the State Fund shareholders
in connection with this transaction.
1.16 The term "Securities List" shall mean the list of those
securities (and other assets) owned by Investment Trust, on
behalf of State Fund, on the Delivery Date.
1.17 The term "State Investment Trust N-1A" shall mean the
registration statement, as amended, on Form N-1A of Investment
Trust with respect to State Fund in effect on the date hereof
or on the Closing Date, as the context may require.
1.18 The term "Valuation Date" shall mean the Business Day
preceding the Closing Date.
2. TRANSFER AND EXCHANGE OF ASSETS
2.1 Reorganization of State Fund. At the Closing, Investment Trust
shall transfer all of the assets of State Fund received from
the State Portfolio, and assign all Assumed Liabilities to
National Fund, and National Fund shall acquire such assets and
shall assume such Assumed Liabilities upon delivery by
National Fund to State Fund on the Closing Date of Class A and
Class B National Fund Shares (including, if applicable,
fractional shares) having an aggregate net asset value equal
-2-
<PAGE>
to the value of the assets so transferred, assigned and
delivered, less the Assumed Liabilities, all determined and
adjusted as provided in Section 2.2. National Fund shall
transfer such assets and liabilities to National Portfolio on
the Closing Date.
2.2 Computation of Net Asset Value. The net asset value per share
of the National Fund Shares and the net value of the assets of
State Fund subject to this Agreement shall, in each case, be
determined as of the Close of Trading on the NYSE on the
Valuation Date, after the declaration and payment of any
dividend on that date. The net asset value of the National
Fund Shares shall be computed in the manner set forth in the
National Investment Trust Form N-1A.
In determining the value of the securities
transferred by State Fund to National Fund, each security
shall be priced in accordance with the policies and procedures
described in the National Investment Trust N-1A. All such
computations shall be subject to review, in the discretion of
Investment Trust's Treasurer, by Deloitte & Touche LLP,
Investment Trust auditors.
3. CLOSING DATE, VALUATION DATE AND DELIVERY
3.1 Closing Date. The Closing shall be at the offices of Eaton
Vance, The Eaton Vance Building, 255 State Street, Boston, MA
02109 immediately prior to the opening of Eaton Vance's
business on the Closing Date. All acts taking place at Closing
shall be deemed to take place simultaneously as of 9:00 a.m.
Eastern time on the Closing Date unless otherwise agreed in
writing by the parties.
3.2 Valuation Date. Pursuant to Section 2.2, the net value of the
assets of State Fund and the net asset value per share of
National Fund shall be determined as of the Close of Trading
on the NYSE on the Valuation Date, after the declaration and
payment of any dividend on that date. The stock transfer books
of Investment Trust with respect to State Fund will be
permanently closed, and sales of State Fund Shares shall be
suspended, as of the close of business of Investment Trust on
the Valuation Date. Redemption requests thereafter received by
Investment Trust with respect to State Fund shall be deemed to
be redemption requests for National Fund Shares to be
distributed to shareholders of State Fund under this Agreement
provided that the transactions contemplated by this Agreement
are consummated.
In the event that trading on the NYSE or on another
exchange or market on which securities held by State or
National Portfolio, shall be disrupted on the Valuation Date
so that, in the judgment of the Trust, accurate appraisal of
the net assets of State Fund to be transferred hereunder or
the assets of National Fund is impracticable, the Valuation
Date shall be postponed until the first Business Day after the
day on which trading on such exchange or in such market shall,
in the judgment of the Trust, have been resumed without
disruption. In such event, the Closing Date shall be postponed
until one Business Day after the Valuation Date.
3.3 Delivery of Securities and other Assets. After the close of
business on the Valuation Date, Investment Trust shall issue
instructions providing for the delivery of all securities held
on behalf of State Fund together with other non-cash assets of
State Fund to the Custodian to be held for the account of
National Fund, effective as of the Closing. National Fund may
inspect such securities at the offices of the Custodian prior
to the Valuation Date.
-3-
<PAGE>
Securities so delivered shall be in proper form for
transfer in such condition as to constitute a good delivery
thereof, in accordance with the custom of brokers, and shall
be accompanied by all necessary stock transfer stamps (or
other documentation evidencing payment of local taxes), if
any, or a check for the appropriate purchase price of such
stamps (or payment of such local tax). Unless otherwise
directed by Investment Trust in writing on or before the
Delivery Date, cash held by and to be delivered, on behalf of
State Fund, shall be delivered on the Closing Date and shall
be in the form of wire transfer in Federal Funds, payable to
the order of the account of National Fund at the Custodian. A
confirmation for the National Fund Shares registered in the
name of State Fund shall be delivered on the Closing Date.
4. STATE FUND DISTRIBUTIONS AND TERMINATION
As soon as reasonably practicable after the Closing Date,
Investment Trust shall pay or make provisions for the payment of all of
the debts and taxes of State Fund and distribute all remaining assets,
if any, to shareholders of State Fund, and State Fund shall thereafter
be terminated under Massachusetts law. The State Portfolio shall
liquidate and deregister under the 1940 Act.
At, or as soon as may be practicable following the Closing
Date, Investment Trust on behalf of State Fund shall instruct National
Fund as to the amount of the pro rata interest of each of State Fund's
shareholders as of the close of business on the Valuation Date (such
shareholders to be certified as such by the transfer agent for
Investment Trust), to be registered on the books of National Fund, in
full and fractional National Fund Shares, in the name of each such
shareholder, and National Fund agrees promptly to transfer the National
Fund Shares then credited to the account of State Fund on the books of
National Fund to open accounts on the share records of National Fund in
the names of State Fund shareholders in accordance with said
instruction. Each State Fund shareholder shall receive shares of the
corresponding class of National Fund to the class of State Fund held by
such shareholder. All issued and outstanding State Fund Shares shall
thereupon be canceled on the books of Investment Trust. National Fund
shall have no obligation to inquire as to the correctness of any such
instruction, but shall, in each case, assume that such instruction is
valid, proper and correct.
5. STATE FUND SECURITIES
On the Delivery Date, State Portfolio shall deliver the
Securities List and tax records. Such records shall be made available
by State Portfolio prior to the Closing Date for inspection by the
Treasurer (or his designee) and the auditors of National Fund and
National Portfolio upon reasonable request. Notwithstanding the
foregoing, it is expressly understood that State Portfolio may
hereafter until the close of business on the Valuation Date sell any
securities owned by it in the ordinary course of its business as an
open-end, management investment company.
6. LIABILITIES AND EXPENSES
National Fund shall acquire all liabilities of State Fund,
whether known or unknown, or contingent or determined. Investment Trust
will discharge all known liabilities of State Fund, so far as may be
possible, prior to the Closing Date. State Fund and National Fund shall
bear their respective expenses, in connection with carrying out this
Agreement.
-4-
<PAGE>
7. STATE AND NATIONAL PORTFOLIO REPRESENTATIONS AND WARRANTIES
Each of the State and National Portfolio hereby represents,
warrants and agrees as follows:
7.1 Legal Existence. The Portfolio is a trust duly organized and
validly existing under the laws of the State of New York.
7.2 Registration under 1940 Act. The Portfolio is duly registered
with the Commission as an open-end management investment
company under the 1940 Act and such registration is in full
force and effect.
7.3 Financial Statements. The statement of assets and liabilities,
schedule of portfolio investments and related statements of
operations and changes in net assets dated March 31, 1999
(audited) fairly present the financial condition of the
Portfolio as of said date in conformity with generally
accepted accounting principles.
7.4 No Material Events. There are no legal, administrative or
other proceedings pending, or to its knowledge, threatened
against the Portfolio which would materially affect its
financial condition.
7.5 Requisite Approvals. The execution and delivery of this
Agreement and the consummation of the transactions
contemplated herein have been authorized by the Portfolio's
Board of Trustees by vote taken at a meeting of such Board
duly called and held on August 16, 1999.
7.6 No Material Violations. The Portfolio is not, and the
execution, delivery and performance of this Agreement will not
result, in a material violation of any provision of its
Declaration of Trust or By-Laws, as each may be amended, of
the Portfolio or of any agreement, indenture, instrument,
contract, lease or other undertaking to which it is a party or
by which it is bound.
7.7 Taxes and Related Filings. Except where failure to do so would
not have a material adverse effect on the Portfolio, the
Portfolio has filed and will file or obtain valid extensions
of filing dates for all required federal, state and local tax
returns and reports for all taxable years through and
including the taxable year ended March 31, 1999, and no such
filings or reports are currently being audited or contested by
the Internal Revenue Service or state or local taxing
authority and all federal, state and local income, franchise,
property, sales, employment or other taxes or penalties
payable have been paid or will be paid, so far as due. The
Portfolio is classified as a partnership for federal tax
purposes, has qualified as such for each taxable year of its
operations, and will qualify as such as of the Closing Date.
7.8 Good and Marketable Title. On the Closing Date, the Portfolio
will have good and marketable title to its assets, free and
clear of all liens, mortgages, pledges, encumbrances, charges,
claims and equities whatsoever, and full right, power and
authority to sell, assign, transfer and deliver such assets
and shall deliver such assets to State Fund. Upon delivery of
such assets, State Fund will receive good and marketable title
to such assets, free and clear of all liens, mortgages,
pledges, encumbrances,
-5-
<PAGE>
charges, claims, restrictions (including such restrictions as
might arise under the 1933 Act) and equities, except as to
adverse claims under Article 8 of the Uniform Commercial Code
of which National Fund has notice and necessary documentation
at or prior to the time of delivery.
7.9 Books and Records. The Portfolio has maintained all records
required under Section 31 of the 1940 Act and rules
thereunder.
8. INVESTMENT TRUST REPRESENTATIONS AND WARRANTIES
Investment Trust, on behalf of State and National Funds,
hereby represents, warrants and agrees as follows:
8.1 Legal Existence. Investment Trust is a business trust duly
organized and validly existing under the laws of the
Commonwealth of Massachusetts. Each of State Fund and National
Fund is a validly existing series of Investment Trust.
Investment Trust is authorized to issue an unlimited number of
shares of beneficial interest of National Fund.
8.2 Registration under 1940 Act. Investment Trust is duly
registered as an open-end management investment company under
the 1940 Act and such registration is in full force and
effect.
8.3 Financial Statements. The statement of assets and liabilities
and the schedule of portfolio investments and the related
statements of operations and changes in net assets of State
Fund and National Fund dated March 31, 1999, fairly present
the financial condition of State Fund and National Fund as of
said dates in conformity with generally accepted accounting
principles.
8.4 No Contingent Liabilities. There are no known contingent
liabilities of State Fund or National Fund not disclosed and
there are no legal, administrative or other proceedings
pending, or to the knowledge of Investment Trust threatened,
against State Fund or National Fund which would materially
affect its financial condition.
8.5 Requisite Approvals. The execution and delivery of this
Agreement and the consummation of the transactions
contemplated herein, have been authorized by the Board of
Trustees of Investment Trust by vote taken at a meeting of
such Board duly called and held on August 16, 1999. No
approval of the shareholders of National Fund is required in
connection with this Agreement or the transaction contemplated
hereby.
8.6 No Material Violations. Investment Trust is not, and the
execution, delivery and performance of this Agreement will not
result, in a material violation of any provision of its
Declaration of Trust or By-Laws, as each may be amended, of
Investment Trust or of any agreement, indenture, instrument,
contract, lease or other undertaking to which Investment Trust
is a party or by which it is bound.
-6-
<PAGE>
8.7 Taxes and Related Filings. Except where failure to do so would
not have a material adverse effect on State Fund or National
Fund (i) each of State Fund and National Fund has filed or
will file (or has obtained valid extensions of filing dates
for) all required federal, state and local tax returns and
reports for all taxable years through the taxable year ended
March 31, 1999 and no such filings are currently being audited
or contested by the Internal Revenue Service or state or local
taxing authority; and (ii) all federal, state and local
income, franchise, property, sales, employment or other taxes
or penalties payable pursuant to such returns have been paid
or will be paid, so far as due. Each of State Fund and
National Fund has elected to be treated as a regulated
investment company for federal tax purposes, has qualified as
such for each taxable year of its operations and will qualify
as such as of the Closing Date.
8.8 National Investment Trust N-1A Not Misleading. The National
Investment Trust N-1A conforms on the date of the Agreement,
and will conform on the date of the Proxy Statement and the
Closing Date, in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules
and regulations of the Commission thereunder and does not
include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not materially
misleading.
8.9 Proxy Materials. The Proxy Statement delivered to the State
Fund shareholders in connection with this transaction (both at
the time of delivery to such shareholders in connection with
the meeting of shareholders and at all times subsequent
thereto and including the Closing Date) in all material
respects, conforms to the applicable requirements of the 1934
Act and the 1940 Act and the rules and regulations of the
Commission thereunder, and will not include any untrue
statement of a material fact or omit to state any material
fact required to be stated thereon or necessary to make
statements therein, in light of the circumstances under which
they were made, not materially misleading.
9. CONDITIONS PRECEDENT TO CLOSING
The obligations of the parties hereto shall be conditioned on
the following:
9.1 Representations and Warranties. The representations and
warranties of the parties made herein will be true and correct
on the Closing Date.
9.2 Shareholder Approval. The Agreement and the transactions
contemplated herein shall have been approved by the requisite
vote of the holders of State Fund Shares in accordance with
the 1940 Act and the Declaration of Trust and By-Laws, each as
amended, of Investment Trust.
9.3 Pending or Threatened Proceedings. On the Closing Date, no
action, suit or other proceeding shall be threatened or
pending before any court or governmental agency in which it is
sought to restrain or prohibit, or obtain damages or other
relief in connection with, this Agreement or the transactions
contemplated herein.
-7-
<PAGE>
9.4 Registration Statement. The Investment Trust N-14 shall have
become effective under the 1933 Act; no stop orders suspending
the effectiveness of such Investment Trust N-14 shall have
been issued; and, to the best knowledge of the parties hereto,
no investigation or proceeding for that purpose shall have
been instituted or be pending, threatened or contemplated
under the 1933 Act.
9.5 Declaration of Dividend. Investment Trust shall have declared
a dividend or dividends which, together with all previous such
dividends, shall have the effect of distributing to State Fund
shareholders all of State Fund' investment company taxable
income for the final taxable period of State Fund, all of its
net capital gain realized in the final taxable period of State
Fund (after reduction for any capital loss carryforward) and
all of the excess of (i) its interest income excludable from
gross income under Section 103(a) of the Internal Revenue Code
of 1986, as amended, over (ii) its deductions disallowed under
Sections 265 and 171(a)(2) of said Code for the final taxable
period of State Fund.
9.6 State Securities Laws. The parties shall have received all
permits and other authorizations necessary under state
securities laws to consummate the transactions contemplated
herein.
9.7 Performance of Covenants. Each party shall have performed and
complied in all material respects with each of the agreements
and covenants required by this Agreement to be performed or
complied with by each such party prior to or at the Valuation
Date and the Closing Date.
9.8 Due Diligence. Investment Trust shall have had reasonable
opportunity to have its officers and agents review the records
of State Portfolio.
9.9 No Material Adverse Change. From the date of this Agreement,
through the Closing Date, there shall not have been:
(1) any change in the business, results of operations,
assets or financial condition or the manner of
conducting the business of State Fund or National
Fund (other than changes in the ordinary course of
its business, including, without limitation,
dividends and distributions in the ordinary course
and changes in the net asset value per share) which
has had a material adverse effect on such business,
results of operations, assets or financial condition,
except in all instances as set forth in the financial
statements;
(2) any loss (whether or not covered by insurance)
suffered by State Fund or National Fund materially
and adversely affecting of State Fund or National
Fund, other than depreciation of securities;
(3) issued by Investment Trust to any person any option
to purchase or other right to acquire shares of any
class of State Fund or National Fund Shares (other
than in the ordinary course of Investment Trust's
business as an open-end management investment
company);
(4) any indebtedness incurred by State Portfolio or
National Portfolio for borrowed money or any
commitment to borrow money entered into by State
Portfolio or National Portfolio except as permitted
in State Investment Trust N-1A or National Investment
Trust N-1A and disclosed in financial statements
required to be provided under this Agreement;
-8-
<PAGE>
(5) any amendment to the Declaration of Trust or By-Laws
of Investment Trust that will adversely affect the
ability of Investment Trust to comply with the terms
of this Agreement; or
(6) any grant or imposition of any lien, claim, charge or
encumbrance upon any asset of State Portfolio except
as provided in State Investment Trust N-1A so long as
it will not prevent Investment Trust from complying
with Section 7.8.
9.11 Lawful Sale of Shares. On the Closing Date, National Fund
Shares to be issued pursuant to Section 2.1 of this Agreement
will be duly authorized, duly and validly issued and
outstanding, and fully paid and non-assessable by Investment
Trust, and conform in all substantial respects to the
description thereof contained in the Investment Trust N-14 and
Proxy Statement furnished to the State Fund shareholders and
the National Fund Shares to be issued pursuant to paragraph
2.1 of this Agreement will be duly registered under the 1933
Act by the Investment Trust N-14 and will be offered and sold
in compliance with all applicable state securities laws.
10. ADDRESSES
All notices required or permitted to be given under this
Agreement shall be given in writing to The Eaton Vance Building, 255
State Street, Boston, MA 02109 (Attention: Eric G. Woodbury, Esq.), or
at such other place as shall be specified in written notice given by
either party to the other party to this Agreement and shall be validly
given if mailed by first-class mail, postage prepaid.
11. TERMINATION
This Agreement may be terminated by either party upon the
giving of written notice to the other, if any of the representations,
warranties or conditions specified in Section 7, 8 or 9 hereof have not
been performed or do not exist on or before February 28, 2000. In the
event of termination of this Agreement pursuant to this provision,
neither party (nor its officers, Trustees or shareholders) shall have
any liability to the other.
12. MISCELLANEOUS
This Agreement shall be governed by, construed and enforced in
accordance with the laws of the Commonwealth of Massachusetts.
Investment Trust represents that there are no brokers or finders
entitled to receive any payments in connection with the transactions
provided for herein. Investment Trust represents that this Agreement
constitutes the entire agreement between the parties as to the subject
matter hereof. The representations, warranties and covenants contained
in this Agreement or in any document delivered pursuant hereto or in
connection herewith shall not survive the consummation of the
transactions contemplated hereunder. The Section headings contained in
this Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement. This Agreement
shall be executed in any number of counterparts, each of which shall be
deemed an original. Whenever used herein, the use of any gender shall
include all genders.
-9-
<PAGE>
13. PUBLICITY
Any announcements or similar publicity with respect to this
Agreement or the transactions contemplated herein will be made at such
time and in such manner as Investment Trust shall determine.
14. AMENDMENTS
At any time prior to or after approval of this Agreement by
State Fund shareholders (i) the parties hereto may, by written
agreement and without shareholder approval, amend any of the provisions
of this Agreement, and (ii) either party may waive without such
approval any default by the other party or the failure to satisfy any
of the conditions to its obligations (such waiver to be in writing);
provided, however, that following shareholder approval, no such
amendment may have the effect of changing the provisions for
determining the number of National Fund Shares to be received by State
Fund shareholders under this Agreement to the detriment of such
shareholders without their further approval. The failure of a party
hereto to enforce at any time any of the provisions of this Agreement
shall in no way be construed to be a waiver of any such provision, nor
in any way to affect the validity of this Agreement or any part hereof
or the right of any party thereafter to enforce each and every such
provision. No waiver of any breach of this Agreement shall be held to
be a waiver of any other or subsequent breach.
15. MASSACHUSETTS BUSINESS TRUST
References in this Agreement to Investment Trust mean and
refer to the Trustees, from time to time serving under its Declarations
of Trust on file with the Secretary of the Commonwealth of
Massachusetts, as the same may be amended from time to time, pursuant
to which they conduct their businesses. It is expressly agreed that the
obligations of Investment Trust hereunder shall not be binding upon any
of the trustees, shareholders, nominees, officers, agents or employees
of the Trust personally, but bind only the trust property of Investment
Trust as provided in said Declaration of Trust. The execution and
delivery of this Agreement has been authorized by the respective
trustees and signed by an authorized officer of Investment Trust,
acting as such, and neither such authorization by such trustees nor
such execution and delivery by such officer shall be deemed to have
been made by any of them but shall bind only the trust property of
Investment Trust as provided in such Declaration of Trust. No series of
Investment Trust shall be liable for the obligations of any other
series.
-10-
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and its seal affixed hereto by their officers thereunto
duly authorized, as of the day and year first above written.
ATTEST: EATON VANCE INVESTMENT TRUST
(on behalf of Eaton Vance [Connecticut /
Michigan] Limited Maturity Municipals
Fund)
/s/ Eric G. Woodbury By: /s/ Thomas J. Fetter
- -------------------- --------------------
Assistant Secretary President
EATON VANCE INVESTMENT TRUST
(on behalf of Eaton Vance National
Limited Maturity Municipals Fund)
/s/ Eric G. Woodbury By: /s/ Thomas J. Fetter
- -------------------- --------------------
Assistant Secretary President
[CONNECTICUT / MICHIGAN] LIMITED
MATURITY MUNICIPALS PORTFOLIO
/s/ Eric G. Woodbury By: /s/ Thomas J. Fetter
- -------------------- --------------------
Assistant Secretary President
NATIONAL LIMITED MATURITY
MUNICIPALS PORTFOLIO
/s/ Eric G. Woodbury By: /s/ Thomas J. Fetter
- -------------------- --------------------
Assistant Secretary President
-11-
<PAGE>
Exhibit B
Management's Discussion of National Fund's Performance
for the Year Ended March 31, 1999
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
LETTER TO SHAREHOLDERS
[PHOTO] 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
Thomas J. Fetter 31, 1998, and the reinvestment of $0.519 in dividends exempt
President 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 CONNECTICUT LIMITED MATURITY MUNICIPALS FUND
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned, revoking all previous proxies for his or her shares, hereby
acknowledges receipt of the notice of meeting and proxy statement dated
September 17, 1999, and appoints Alan R. Dynner and Eric G. Woodbury, and each
of them as proxies, with power of substitution, to vote all shares of Eaton
Vance Connecticut Limited Maturity Municipals Fund ("Connecticut Fund"), which
the undersigned is entitled to vote at the special meeting of the shareholders
of Connecticut Fund to be held at The Eaton Vance Building, 255 State Street,
Boston, Massachusetts, on October 29, 1999 at 1:30 p.m. local time, including
any adjournments thereof, upon such business as may be properly brought before
the meeting and specifically upon the proposal set out on the back of this
Proxy.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO SPECIFICATION IS MADE, THE PROXY
WILL BE VOTED FOR APPROVAL OF THE AGREEMENT AND PLAN OF REORGANIZATION. AS TO
ANY OTHER MATTERS, SAID PROXIES SHALL VOTE IN ACCORDANCE WITH THEIR BEST
JUDGMENT.
(PLEASE MARK AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.)
For a copy of the prospectus of Eaton Vance Connecticut
Municipals Fund check here. ____
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To vote on the following proposal, please indicate your vote for each of
your accounts beneath your account number.
Account No. No. of Shares
Approve of an Agreement and Plan of Reorganization between Eaton Vance
Investment Trust on behalf of Eaton Vance Connecticut Limited Maturity
Municipals Fund and Eaton Vance National Limited Maturity Municipals
Fund and the transactions contemplated thereby, as described in the
accompanying proxy statement/prospectus.
____FOR ____AGAINST ____ABSTAIN
Dated_______________________________ , 1999
____________________________________________
____________________________________________
____________________________________________
Signature(s)
____________________________________________
Signature(s)
(Sign exactly as name appears hereon)
IMPORTANT-PLEASE READ
If more than one owner, each must sign. If
the signer is a corporation, please sign full
corporate name by duly authorized officer.
Executors, administrators, trustees,
guardians, custodians, attorneys-in-fact,
etc., should so indicate when signing.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
<PAGE>
EATON VANCE MICHIGAN LIMITED MATURITY MUNICIPALS FUND
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned, revoking all previous proxies for his or her shares, hereby
acknowledges receipt of the notice of meeting and proxy statement dated
September 17, 1999, and appoints Alan R. Dynner and Eric G. Woodbury, and each
of them as proxies, with power of substitution, to vote all shares of Eaton
Vance Michigan Limited Maturity Municipals Fund ("Michigan Fund"), which the
undersigned is entitled to vote at the special meeting of the shareholders of
Michigan Fund to be held at The Eaton Vance Building, 255 State Street, Boston,
Massachusetts, on October 29, 1999 at 1:30 p.m. local time, including any
adjournments thereof, upon such business as may be properly brought before the
meeting and specifically upon the proposal set out on the back of this Proxy.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO SPECIFICATION IS MADE, THE PROXY
WILL BE VOTED FOR APPROVAL OF THE AGREEMENT AND PLAN OF REORGANIZATION. AS TO
ANY OTHER MATTERS, SAID PROXIES SHALL VOTE IN ACCORDANCE WITH THEIR BEST
JUDGMENT.
(PLEASE MARK AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.)
For a copy of the prospectus of Eaton Vance Michigan
Municipals Fund check here. ____
- -------------------------------------------------------------------------------
To vote on the following proposal, please indicate your vote for each of
your accounts beneath your account number.
Account No. No. of Shares
Approve of an Agreement and Plan of Reorganization between Eaton Vance
Investment Trust on behalf of Eaton Vance Michigan Limited Maturity
Municipals Fund and Eaton Vance National Limited Maturity Municipals
Fund and the transactions contemplated thereby, as described in the
accompanying proxy statement/prospectus.
___FOR ___AGAINST ___ABSTAIN
Dated____________________________,1999
_______________________________________
_______________________________________
_______________________________________
Signature(s)
_______________________________________
Signature(s)
(Sign exactly as name appears hereon)
IMPORTANT-PLEASE READ
If more than one owner, each must sign.
If the signer is a corporation, please
sign full corporate name by duly
authorized officer. Executors,
administrators, trustees, guardians,
custodians, attorneys-in-fact, etc.,
should so indicate when signing.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
<PAGE>
PART B
------
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPALS FUND
-----------------------------------------------------
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
September 23, 1999
- --------------------------------------------------------------------------------
Acquisition of the Assets of Eaton Vance
Connecticut and Michigan Limited Maturity
Municipals Funds
The Eaton Vance Building
255 State Street
Boston, MA 02109
Telephone: (617) 482-8260
By and in Exchange fro Class A and Class B
Shares of Eaton Vance National Limited
Maturity Municipals Fund
The Eaton Vance Building
255 State Street
Boston, MA 02109
Telephone: (617) 482-8260
This Statement of Additional Information is available to the shareholders
of Eaton Vance Connecticut and Michigan Limited Maturity Municipals Funds
("State Funds"), series of Eaton Vance Investment Trust, in connection with two
proposed transactions whereby Eaton Vance National Limited Maturity Municipals
Fund ("National Fund"), also a series of Eaton Vance Investment Trust, will
acquire all of the assets of each State Fund in exchange for Class A and
Class B shares of National Fund and will assume all of the liabilities of each
State Fund.
This Statement of Additional Information of National Fund consists of this
cover page and the following documents, each of which is attached hereto and
incorporated by reference herein:
(1) The Statement of Additional Information of National Fund dated August
1, 1999, containing financial statements of National Fund for the year
ended March 31, 1999;
(2) Annual Report of State Funds containing Financial Statements for the
year ended March 31, 1999; and
(3) Proforma Financial Statements.
This Statement of Additional Information is not a Prospectus. A
Prospectus/Proxy Statement dated September 23, 1999 relating to the
reorganization of State Funds may be obtained by writing to Eaton Vance
Distributors, Inc., The Eaton Vance Building, 255 State Street, Boston, MA 02109
or by calling 1-800-225-6265. This Statement of Additional Information should be
read in conjunction with the Prospectus/Proxy Statement.
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
STATEMENT OF
ADDITIONAL INFORMATION
August 1, 1999
EATON VANCE
NATIONAL LIMITED MATURITY MUNICIPALS FUND
The Eaton Vance Building
255 State Street
Boston, Massachusetts 02109
(800) 225-6265
This Statement of Additional Information ("SAI") provides general
information about the Fund and the Portfolio. The Fund is a series of Eaton
Vance Investment Trust. Capitalized terms used in this SAI and not otherwise
defined have the meanings given to them in the prospectus. This SAI contains
additional information about:
Page
Strategies and Risks ............................................... 2
Investment Restrictions ............................................ 7
Management and Organization ........................................ 8
Investment Advisory and Administrative Services .................... 12
Other Service Providers ............................................ 13
Purchasing and Redeeming Shares .................................... 14
Sales Charges ...................................................... 15
Performance ........................................................ 19
Taxes .............................................................. 20
Portfolio Security Transactions .................................... 22
Financial Statements ............................................... 24
Appendices:
A: Class A Fees, Performance and Ownership ......................... a-1
B: Class B Fees, Performance and Ownership ......................... b-1
C: Class C Fees, Performance and Ownership ......................... c-1
D: Tax Equivalent Yield Table ...................................... d-1
E: Ratings ......................................................... e-1
THIS IS NOT A PROSPECTUS AND IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE
INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY THE FUND'S PROSPECTUS DATED
AUGUST 1, 1999, AS SUPPLEMENTED FROM TIME TO TIME, WHICH IS INCORPORATED
HEREIN BY REFERENCE. THIS SAI SHOULD BE READ IN CONJUNCTION WITH SUCH
PROSPECTUS, WHICH MAY BE OBTAINED BY CALLING 1-800-225-6265.
<PAGE>
STRATEGIES AND RISKS
MUNICIPAL OBLIGATIONS. Municipal obligations are issued to obtain funds for
various public and private purposes. Municipal obligations include bonds as
well as tax-exempt commercial paper, project notes and municipal notes such as
tax, revenue and bond anticipation notes of short maturity, generally less
than three years. While most municipal bonds pay a fixed rate of interest
semi-annually in cash, there are exceptions. Some bonds pay no periodic cash
interest, but rather make a single payment at maturity representing both
principal and interest. Bonds may be issued or subsequently offered with
interest coupons materially greater or less than those then prevailing, with
price adjustments reflecting such deviation.
In general, there are three categories of municipal obligations, the
interest on which is exempt from federal income tax and is not a tax
preference item for purposes of the AMT: (i) certain "public purpose"
obligations (whenever issued), which include obligations issued directly by
state and local governments or their agencies to fulfill essential
governmental functions; (ii) certain obligations issued before August 8, 1986
for the benefit of non-governmental persons or entities; and (iii) certain
"private activity bonds" issued after August 7, 1986, which include "qualified
Section 501(c)(3) bonds" or refundings of certain obligations included in the
second category. Interest on certain "private activity bonds" issued after
August 7, 1986 is exempt from regular federal income tax but such interest
(including a distribution by the Fund derived from such interest) is treated
as a tax preference item which could subject the recipient to or increase the
recipient's liability for the AMT. For corporate shareholders, the Fund's
distributions derived from interest on all municipal obligations (whenever
issued) is included in "adjusted current earnings" for purposes of the AMT as
applied to corporations (to the extent not already included in alternative
minimum taxable income as income attributable to private activity bonds). In
assessing the federal income tax treatment of interest on any municipal
obligation, the Portfolio will generally rely on an opinion of the issuer's
counsel (when available) and will not undertake any independent verification
of the basis for the opinion.
The two principal classifications of municipal bonds are "general
obligation" and "revenue" bonds. Issuers of general obligation bonds include
states, counties, cities, towns and regional districts. The proceeds of these
obligations are used to fund a wide range of public projects including the
construction or improvement of schools, highways and roads, water and sewer
systems and a variety of other public purposes. The basic security of general
obligation bonds is the issuer's pledge of its faith, credit, and taxing power
for the payment of principal and interest. The taxes that can be levied for
the payment of debt service may be limited or unlimited as to rate and amount.
Revenue bonds are generally secured by the net revenues derived from a
particular facility or group of facilities or, in some cases, from the
proceeds of a special excise or other specific revenue source. Revenue bonds
have been issued to fund a wide variety of capital projects including:
electric, gas, water, sewer and solid waste disposal systems; highways,
bridges and tunnels; port, airport and parking facilities; transportation
systems; housing facilities, colleges and universities and hospitals. Although
the principal security behind these bonds varies widely, many provide
additional security in the form of a debt service reserve fund whose monies
may be used to make principal and interest payments on the issuer's
obligations. Housing finance authorities have a wide range of security
including partially or fully insured, rent subsidized and/or collateralized
mortgages, and/or the net revenues from housing or other public projects. In
addition to a debt service reserve fund, some authorities provide further
security in the form of a state's ability (without legal obligation) to make
up deficiencies in the debt service reserve fund. Lease rental revenue bonds
issued by a state or local authority for capital projects are normally secured
by annual lease rental payments from the state or locality to the authority
sufficient to cover debt service on the authority's obligations. Such payments
are usually subject to annual appropriations by the state or locality.
Industrial development and pollution control bonds, although nominally issued
by municipal authorities, are in most cases revenue bonds and are generally
not secured by the taxing power of the municipality, but are usually secured
by the revenues derived by the authority from payments of the industrial user
or users. The Portfolio may on occasion acquire revenue bonds which carry
warrants or similar rights covering equity securities. Such warrants or rights
may be held indefinitely, but if exercised, the Portfolio anticipates that it
would, under normal circumstances, dispose of any equity securities so
acquired within a reasonable period of time.
The obligations of any person or entity to pay the principal of and
interest on a municipal obligation are subject to the provisions of
bankruptcy, insolvency and other laws affecting the rights and remedies of
creditors, such as the Federal Bankruptcy Act, and laws, if any, which may be
enacted by Congress or state legislatures extending the time for payment of
principal or interest, or both, or imposing other constraints upon enforcement
of such obligations. There is also the possibility that as a result of
litigation or other conditions the power or ability of any person or entity to
pay when due principal of and interest on a municipal obligation may be
materially affected. There have been recent instances of defaults and
bankruptcies involving municipal obligations which were not foreseen by the
financial and investment communities. The Portfolio will take whatever action
it considers appropriate in the event of anticipated financial difficulties,
default or bankruptcy of either the issuer of any municipal obligation or of
the underlying source of funds for debt service. Such action may include
retaining the services of various persons or firms (including affiliates of
the investment adviser) to evaluate or protect any real estate, facilities or
other assets securing any such obligation or acquired by the Portfolio as a
result of any such event, and the Portfolio may also manage (or engage other
persons to manage) or otherwise deal with any real estate, facilities or other
assets so acquired. The Portfolio anticipates that real estate consulting and
management services may be required with respect to properties securing
various municipal obligations in its portfolio or subsequently acquired by the
Portfolio. The Portfolio will incur additional expenditures in taking
protective action with respect to portfolio obligations in default and assets
securing such obligations.
The yields on municipal obligations are dependent on a variety of factors,
including purposes of issue and source of funds for repayment, general money
market conditions, general conditions of the municipal bond market, size of a
particular offering, maturity of the obligation and rating of the issue. The
ratings of Moody's, S&P and Fitch represent their opinions as to the quality
of the municipal obligations which they undertake to rate. It should be
emphasized, however, that ratings are based on judgment and are not absolute
standards of quality. Consequently, municipal obligations with the same
maturity, coupon and rating may have different yields while obligations of the
same maturity and coupon with different ratings may have the same yield. In
addition, the market price of municipal obligations will normally fluctuate
with changes in interest rates, and therefore the net asset value of the
Portfolio will be affected by such changes.
ISSUER CONCENTRATION. The Portfolio may invest 25% or more of its total assets
in municipal obligations whose issuers are located in the same state or in
municipal obligations of the same type. There could be economic, business or
political developments which might affect all municipal obligations of the
same type. In particular, investments in industrial revenue bonds might
involve (without limitation) the following risks.
Hospital bond ratings are often based on feasibility studies which contain
projections of expenses, revenues and occupancy levels. Among the influences
affecting a hospital's gross receipts and net income available to service its
debt are demand for hospital services, the ability of the hospital to provide
the services required, management capabilities, economic developments in the
service area, efforts by insurers and government agencies to limit rates and
expenses, confidence in the hospital, service area economic developments,
competition, availability and expense of malpractice insurance, Medicaid and
Medicare funding and possible federal legislation limiting the rates of
increase of hospital charges.
Electric utilities face problems in financing large construction programs
in an inflationary period, cost increases and delay occasioned by safety and
environmental considerations (particularly with respect to nuclear
facilities), difficulty in obtaining fuel at reasonable prices and in
achieving timely and adequate rate relief from regulatory commissions, effects
of energy conservation and limitations on the capacity of the capital market
to absorb utility debt.
Industrial development bonds are normally secured only by the revenues
from the project and not by state or local government tax payments, they are
subject to a wide variety of risks, many of which relate to the nature of the
specific project. Generally, IDBs are sensitive to the risk of a slowdown in
the economy.
DURATON. In pursuing its investment objective, the Portfolio seeks to invest
in a portfolio having a dollar weighted average duration of between three and
nine years. Duration represents the dollar weighted average maturity of
expected cash flows (i.e., interest and principal payments) on one or more
debt obligations, discounted to their present values. The duration of an
obligation is usually not more than its stated maturity and is related to the
degree of volatility in the market value of the obligation. Maturity measures
only the time until a bond or other debt security provides its final payment;
it does not take into account the pattern of a security's payments over time.
Duration takes both interest and principal payments into account and, thus, in
the investment adviser's opinion, is a more accurate measure of a municipal
obligation's sensitivity to changes in interest rates. In computing the
duration of its portfolio, the Portfolio will have to estimate the duration of
debt obligations that are subject to prepayment or redemption by the issuer,
based on projected cash flows from such obligations.
MUNICIPAL LEASES. The Portfolio may invest in municipal leases and
participations therein, which arrangements frequently involve special risks.
Municipal leases are obligations in the form of a lease or installment
purchase arrangement which is issued by state or local governments to acquire
equipment and facilities. Interest income from such obligations is generally
exempt from local and state taxes in the state of issuance. "Participations"
in such leases are undivided interests in a portion of the total obligation.
Participations entitle their holders to receive a pro rata share of all
payments under the lease. The obligation of the issuer to meet its obligations
under such leases is often subject to the appropriation by the appropriate
legislative body, on an annual or other basis, of funds for the payment of the
obligations. Investments in municipal leases are thus subject to the risk that
the legislative body will not make the necessary appropriation and the issuer
will not otherwise be willing or able to meet its obligation.
Certain municipal lease obligations owned by the Portfolio may be deemed
illiquid for the purpose of the Portfolio's 15% limitation on investments in
illiquid securities, unless determined by the investment adviser, pursuant to
guidelines adopted by the Trustees of the Portfolio, to be liquid securities
for the purpose of such limitation. In determining the liquidity of municipal
lease obligations, the investment adviser will consider a variety of factors
including: (1) the willingness of dealers to bid for the security; (2) the
number of dealers willing to purchase or sell the obligation and the number of
other potential buyers; (3) the frequency of trades and quotes for the
obligation; and (4) the nature of the marketplace trades. In addition, the
investment adviser will consider factors unique to particular lease
obligations affecting the marketability thereof. These include the general
creditworthiness of the municipality, the importance of the property covered
by the lease to the municipality, and the likelihood that the marketability of
the obligation will be maintained throughout the time the obligation is held
by the Portfolio. In the event the Portfolio acquires an unrated municipal
lease obligation, the investment adviser will be responsible for determining
the credit quality of such obligation on an on-going basis, including an
assessment of the likelihood that the lease may or may not be cancelled.
ZERO COUPON BONDS. Zero coupon bonds are debt obligations which do not require
the periodic payment of interest and are issued at a significant discount from
face value. The discount approximates the total amount of interest the bonds
will accrue and compound over the period until maturity at a rate of interest
reflecting the market rate of the security at the time of issuance. The
Portfolio is required to accrue income from zero-coupon bonds on a current
basis, even though it does not receive that income currently in cash and the
Fund is required to distribute its share of the Portfolio's income for each
taxable year. Thus, the Portfolio may have to sell other investments to obtain
cash needed to make income distributions.
CREDIT QUALITY. While municipal obligations rated investment grade or below
and comparable unrated municipal obligations may have some quality and
protective characteristics, these characteristics can be expected to be offset
or outweighed by uncertainties or major risk exposures to adverse conditions.
Lower rated and comparable unrated municipal obligations are subject to the
risk of an issuer's inability to meet principal and interest payments on the
obligations (credit risk) and may also be subject to greater price volatility
due to such factors as interest rate sensitivity, market perception of the
creditworthiness of the issuer and general market liquidity (market risk).
Lower rated or unrated municipal obligations are also more likely to react to
real or perceived developments affecting market and credit risk than are more
highly rated obligations, which react primarily to movements in the general
level of interest rates.
Municipal obligations held by the Portfolio which are rated below
investment grade but which, subsequent to the assignment of such rating, are
backed by escrow accounts containing U.S. Government obligations may be
determined by the investment adviser to be of investment grade quality for
purposes of the Portfolio's investment policies. The Portfolio may retain in
its portfolio an obligation whose rating drops after its acquisition,
including defaulted obligations, if such retention is considered desirable by
the investment adviser; provided, however, that holdings of obligations rated
below Baa or BBB will be less than 35% of net assets. In the event the rating
of an obligation held by the Portfolio is downgraded, causing the Portfolio to
exceed this limitation, the investment adviser will (in an orderly fashion
within a reasonable period of time) dispose of such obligations as it deems
necessary in order to comply with the Portfolio's credit quality limitations.
In the case of a defaulted obligation, the Portfolio may incur additional
expense seeking recovery of its investment. See "Portfolio of Investments" in
the "Financial Statements" incorporated by reference into this SAI with
respect to any defaulted obligations held by the Portfolio.
The investment adviser seeks to minimize the risks of investing in below
investment grade securities through professional investment analysis and
attention to current developments in interest rates and economic conditions.
When the Portfolio invests in lower rated or unrated municipal obligations,
the achievement of the Portfolio's goals is more dependent on the investment
adviser's ability than would be the case if the Portfolio were investing in
municipal obligations in the higher rating categories. In evaluating the
credit quality of a particular issue, whether rated or unrated, the investment
adviser will normally take into consideration, among other things, the
financial resources of the issuer (or, as appropriate, of the underlying
source of funds for debt service), its sensitivity to economic conditions and
trends, any operating history of and the community support for the facility
financed by the issue, the ability of the issuer's management and regulatory
matters. The investment adviser will attempt to reduce the risks of investing
in the lowest investment grade, below investment grade and comparable unrated
obligations through active portfolio management, credit analysis and attention
to current developments and trends in the economy and the financial markets.
WHEN-ISSUED SECURITIES. New issues of municipal obligations are sometimes
offered on a "when-issued" basis, that is, delivery and payment for the
securities normally take place within a specified number of days after the
date of the Portfolio's commitment and are subject to certain conditions such
as the issuance of satisfactory legal opinions. The Portfolio may also
purchase securities on a when-issued basis pursuant to refunding contracts in
connection with the refinancing of an issuer's outstanding indebtedness.
Refunding contracts generally require the issuer to sell and the Portfolio to
buy such securities on a settlement date that could be several months or
several years in the future. The Portfolio may also purchase instruments that
give the Portfolio the option to purchase a municipal obligation when and if
issued.
The Portfolio will make commitments to purchase when-issued securities
only with the intention of actually acquiring the securities, but may sell
such securities before the settlement date if it is deemed advisable as a
matter of investment strategy. The payment obligation and the interest rate
that will be received on the securities are fixed at the time the Portfolio
enters into the purchase commitment. When the Portfolio commits to purchase a
security on a when-issued basis it records the transaction and reflects the
value of the security in determining its net asset value. Securities purchased
on a when-issued basis and the securities held by the Portfolio are subject to
changes in value based upon the perception of the creditworthiness of the
issuer and changes in the level of interest rates (i.e. appreciation when
interest rates decline and depreciation when interest rates rise). Therefore,
to the extent that the Portfolio remains substantially fully invested at the
same time that it has purchased securities on a when-issued basis, there will
be greater fluctuations in the Portfolio's net asset value than if it solely
set aside cash to pay for when-issued securities.
REDEMPTION, DEMAND AND PUT FEATURES AND PUT OPTIONS. Issuers of municipal
obligations reserve the right to call (redeem) the bond. If an issuer redeems
securities held by the Portfolio during a time of declining interest rates,
the Portfolio may not be able to reinvest the proceeds in securities providing
the same investment return as the securities redeemed. Also, some bonds may
have "put" or "demand" features that allow early redemption by the bondholder.
Longer term fixed-rate bonds may give the holder a right to request redemption
at certain times (often annually after the lapse of an intermediate term).
These bonds are more defensive than conventional long term bonds (protecting
to some degree against a rise in interest rates) while providing greater
opportunity than comparable intermediate term bonds, because the Portfolio may
retain the bond if interest rates decline.
LIQUIDITY AND PROTECTIVE PUT OPTIONS. The Portfolio may enter into a separate
agreement with the seller of the security or some other person granting the
Portfolio the right to put the security to the seller thereof or the other
person at an agreed upon price. The Portfolio intends to limit this type of
transaction to institutions (such as banks or securities dealers) which the
investment adviser believes present minimal credit risks and would engage in
this type of transaction to facilitate portfolio liquidity or (if the seller
so agrees) to hedge against rising interest rates. There is no assurance that
this kind of put option will be available to the Portfolio or that selling
institutions will be willing to permit the Portfolio to exercise a put to
hedge against rising interest rates. The Portfolio does not expect to assign
any value to any separate put option which may be acquired to facilitate
portfolio liquidity inasmuch as the value (if any) of the put will be
reflected in the value assigned to the associated security; any put acquired
for hedging purposes would be valued in good faith under methods or procedures
established by the Trustees of the Portfolio after consideration of all
relevant factors, including its expiration date, the price volatility of the
associated security, the difference between the market price of the associated
security and the exercise price of the put, the creditworthiness of the issuer
of the put and the market prices of comparable put options. Interest income
generated by certain bonds having put or demand features may be taxable.
INVERSE FLOATERS. The Portfolio may invest in municipal securities whose
interest rates bear an inverse relationship to the interest rate on another
security or the value of an index ("inverse floaters"). An investment in
inverse floaters may involve greater risk than an investment in a fixed rate
bond. Because changes in the interest rate on the other security or index
inversely affect the residual interest paid on the inverse floater, the value
of an inverse floater is generally more volatile than that of a fixed rate
bond. Inverse floaters have interest rate adjustment formulas which generally
reduce or, in the extreme, eliminate the interest paid to the portfolio when
short-term interest rates rise, and increase the interest paid to the
Portfolio when short-term interest rates fall. Inverse floaters have varying
degrees of liquidity, and the market for these securities is new and
relatively volatile. These securities tend to underperform the market for
fixed rate bonds in a rising interest rate environment, but tend to outperform
the market for fixed rate bonds when interest rates decline. Shifts in long-
term interest rates may, however, alter this tendency. Although volatile,
inverse floaters typically offer the potential for yields exceeding the yields
available on fixed rate bonds with comparable credit quality and maturity.
These securities usually permit the investor to convert the floating rate to a
fixed rate (normally adjusted downward), and this optional conversion feature
may provide a partial hedge against rising rates if exercised at an opportune
time. Inverse floaters are leveraged because they provide two or more dollars
of bond market exposure for every dollar invested.
ILLIQUID OBLIGATIONS. At times, a substantial portion of the Portfolio's
assets may be invested in securities as to which the Portfolio, by itself or
together with other accounts managed by the investment adviser and its
affiliates, holds a major portion or all of such securities. Under adverse
market or economic conditions or in the event of adverse changes in the
financial condition of the issuer, the Portfolio could find it more difficult
to sell such securities when the investment adviser believes it advisable to
do so or may be able to sell such securities only at prices lower than if such
securities were more widely held. Under such circumstances, it may also be
more difficult to determine the fair value of such securities for purposes of
computing the Portfolio's net asset value.
The secondary market for some municipal obligations issued within a state
(including issues which are privately placed with the Portfolio) is less
liquid than that for taxable debt obligations or other more widely traded
municipal obligations. The Portfolio will not invest in illiquid securities if
more than 15% of its net assets would be invested in securities that are not
readily marketable. No established resale market exists for certain of the
municipal obligations in which the Portfolio may invest. The market for
obligations rated below investment grade is also likely to be less liquid than
the market for higher rated obligations. As a result, the Portfolio may be
unable to dispose of these municipal obligations at times when it would
otherwise wish to do so at the prices at which they are valued.
SECURITIES LENDING. The Portfolio may seek to increase its income by lending
portfolio securities to broker-dealers or other institutional borrowers.
Distributions by the Fund of any income realized by the Portfolio from
securities loans will be taxable. If the management of the Portfolio decides
to make securities loans, it is intended that the value of the securities
loaned would not exceed 30% of the Portfolio's total assets. Securities
lending involves risks of delay in recovery or even loss of rights on the
securities loaned if the borrower fails financially. The Portfolio has no
present intention of engaging in securities lending.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. A change in the level of
interest rates may affect the value of the securities held by the Portfolio
(or of securities that the Portfolio expects to purchase). To hedge against
changes in rates or as a substitute for the purchase of securities, the
Portfolio may enter into (i) futures contracts for the purchase or sale of
debt securities and (ii) futures contracts on securities indices. All futures
contracts entered into by the Portfolio are traded on exchanges or boards of
trade that are licensed and regulated by the Commodity Futures Trading
Commission ("CTFC") and must be executed through a futures commission merchant
or brokerage firm which is a member of the relevant exchange. The Portfolio
may purchase and write call and put options on futures contracts which are
traded on a United States exchange or board of trade. The Portfolio will be
required, in connection with transactions in futures contracts and the writing
of options on futures, to make margin deposits, which will be held by the
Portfolio's custodian for the benefit of the futures commission merchant
through whom the Portfolio engages in such futures and options transactions.
Some futures contracts and options thereon may become illiquid under
adverse market conditions. In addition, during periods of market volatility, a
commodity exchange may suspend or limit transactions in an exchange-traded
instrument, which may make the instrument temporarily illiquid and difficult
to price. Commodity exchanges may also establish daily limits on the amount
that the price of a futures contract or futures option can vary from the
previous day's settlement price. Once the daily limit is reached, no trades
may be made that day at a price beyond the limit. This may prevent the
Portfolio from closing out positions and limiting its losses.
The Portfolio will engage in futures and related options transactions for
bona fide hedging purposes or non-hedging purposes as defined in or permitted
by CFTC regulations. The Portfolio will determine that the price fluctuations
in the futures contracts and options on futures used for hedging purposes are
substantially related to price fluctuations in securities held by the
Portfolio or which it expects to purchase. The Portfolio will engage in
transactions in futures and related options contracts only to the extent such
transactions are consistent with the requirements of the Code for maintaining
the qualification of the Fund as a regulated investment company for federal
income tax purposes.
ASSET COVERAGE REQUIREMENTS. Transactions involving when-issued securities or
futures contracts and options (other than options that the Portfolio has
purchased) expose the Portfolio to an obligation to another party. The
Portfolio will not enter into any such transactions unless it owns either (1)
an offsetting ("covered") position in securities or other options or futures
contracts, or (2) cash or liquid securities (such as readily marketable
obligations and money market instruments) with a value sufficient at all times
to cover its potential obligations not covered as provided in (1) above. The
Portfolio will comply with Securities and Exchange Commission ("SEC")
guidelines regarding cover for these instruments and, if the guidelines so
require, set aside cash or liquid securities in a segregated account with its
custodian in the prescribed amount. The securities in the segregated account
will be marked to market daily.
Assets used as cover or held in a segregated account maintained by the
custodian cannot be sold while the position requiring coverage or segregation
is outstanding unless they are replaced with other appropriate assets. As a
result, the commitment of a large portion of the Portfolio's assets to
segregated accounts or to cover could impede portfolio management or the
Portfolio's ability to meet redemption requests or other current obligations.
DIVERSIFIED STATUS. The Portfolio is a "diversified" investment company under
the 1940 Act. This means that with respect to 75% of its total assets (1) the
Portfolio may not invest more than 5% of its total assets in the securities of
any one issuer (except U.S. Government obligations) and (2) the Portfolio may
not own more than 10% of the outstanding voting securities of any one issuer
(which generally is inapplicable because municipal debt obligations are not
voting securities).
TEMPORARY INVESTMENTS. Under unusual market conditions, the Portfolio may
invest temporarily in cash or cash equivalents. Cash equivalents are highly
liquid, short-term securities such as commercial paper, certificates of
deposit, short-term notes and short-term U.S. Government obligations.
PORTFOLIO TURNOVER. The Portfolio may sell (and later purchase) securities in
anticipation of a market decline (a rise in interest rates) or purchase (and
later sell) securities in anticipation of a market rise (a decline in interest
rates). In addition, a security may be sold and another purchased at
approximately the same time to take advantage of what the Portfolio believes
to be a temporary disparity in the normal yield relationship between the two
securities. Yield disparities may occur for reasons not directly related to
the investment quality of particular issues or the general movement of
interest rates, such as changes in the overall demand for or supply of various
types of municipal obligations or changes in the investment objectives of
investors. Such trading may be expected to increase the portfolio turnover
rate, which may increase capital gains and the expenses incurred in connection
with such trading. The Portfolio cannot accurately predict its portfolio
turnover rate, but it is anticipated that the annual portfolio turnover rate
will generally not exceed 100% (excluding turnover of securities having a
maturity of one year or less). A 100% annual turnover rate could occur, for
example, if all the securities held by the Portfolio were replaced once in a
period of one year. A high turnover rate (100% or more) necessarily involves
greater expenses to the Portfolio.
INVESTMENT RESTRICTIONS
The following investment restrictions of the Fund are designated as
fundamental policies and as such cannot be changed without the approval of the
holders of a majority of the Fund's outstanding voting securities, which as
used in this SAI means the lesser of (a) 67% of the shares of the Fund present
or represented by proxy at a meeting if the holders of more than 50% of the
outstanding shares are present or represented at the meeting or (b) more than
50% of the outstanding shares of the Fund. Accordingly, the Fund may not:
(1) Purchase securities on margin (but the Fund may obtain such short-term
credits as may be necessary for the clearance of purchases and sales of
securities). The deposit or payment by the Fund of initial or maintenance
margin in connection with futures contracts or related options transactions is
not considered the purchase of a security on margin;
(2) Borrow money or issue senior securities except as permitted by the
Investment Company Act of 1940;
(3) Underwrite or participate in the marketing of securities of others,
except insofar as it may technically be deemed to be an underwriter in selling
a portfolio security under circumstances which may require the registration of
the same under the Securities Act of 1933;
(4) Purchase or sell real estate (including limited partnership interests
in real estate, but excluding readily marketable interests in real estate
investment trusts or readily marketable securities of companies which invest
or deal in real estate or securities which are secured by real estate);
(5) Purchase or sell physical commodities or contracts for the purchase or
sale of physical commodities; or
(6) Make loans to any person except by (a) the acquisition of debt
instruments and making portfolio investments, (b) entering into repurchase
agreements or (c) lending portfolio securities.
Notwithstanding the investment policies and restrictions of the Fund, the
Fund may invest all or part of its investable assets in an open-end management
investment company with substantially the same investment objective, policies
and restrictions as the Fund.
The Portfolio has adopted substantially the same fundamental investment
restrictions as the foregoing investment restrictions adopted by the Fund;
such restrictions cannot be changed without the approval of a "majority of the
outstanding voting securities" of the Portfolio.
The Fund and the Portfolio have adopted the following investment policies
which may be changed by the Trust with respect to the Fund without approval by
the Fund's shareholders or with respect to the Portfolio without approval by
the Fund or its other investors. The Fund and the Portfolio will not:
(a) make short sales of securities or maintain a short position, unless at
all times when a short position is open it owns an equal amount of such
securities or securities convertible into or exchangeable, without payment
of any further consideration, for securities of the same issue as, and equal
in amount to, the securities sold short, and unless not more than 25% of its
net assets (taken at current value) is held as collateral for such sales at
any one time; or
(b) invest more than 15% of net assets in investments which are not
readily marketable, including restricted securities and repurchase
agreements maturing in more than seven days. Restricted securities for the
purposes of this limitation do not include securities eligible for resale
pursuant to Rule 144A under the Securities Act of 1933 and commercial paper
issued pursuant to Section 4(2) of said Act that the Board of Trustees of
the Trust or the Portfolio, or its delegate, determines to be liquid. Any
such determination by a delegate will be made pursuant to procedures adopted
by the Board. If the Fund or Portfolio invests in Rule 144A securities, the
level of portfolio illiquidity may be increased to the extent the eligible
buyers became uninterested in purchasing such securities.
Neither the Fund nor the Portfolio will invest 25% or more of its total
assets in any one industry. For purposes of the foregoing policy, securities
of the U.S. Government, its agencies, or instrumentalities are not considered
to represent industries. Municipal obligations backed by the credit of a
governmental entity are also not considered to represent industries. However,
municipal obligations backed only by the assets and revenues of non-
governmental users may for this purpose be deemed to be issued by such non-
governmental users. The foregoing 25% limitation would apply to these issuers.
As discussed in the prospectus and this SAI, the Fund or the Portfolio may
invest more than 25% of its total assets in certain economic sectors, such as
revenue bonds, housing, hospitals and other health care facilities, and
industrial development bonds. The Fund and the Portfolio reserve the right to
invest more than 25% of total assets in each of these sectors.
For purposes of the Portfolio's investment restrictions, the determination
of the "issuer" of a municipal obligation which is not a general obligation
bond will be made by the investment adviser on the basis of the
characteristics of the obligation and other relevant factors, the most
significant of which is the source of funds committed to meeting interest and
principal payments of such obligation.
Whenever an investment policy or investment restriction set forth in the
prospectus or in this SAI states a maximum percentage of assets that may be
invested in any security or other asset, or describes a policy regarding
quality standards, such percentage limitation or standard shall be determined
immediately after and as a result of the Fund's or the Portfolio's acquisition
of such security or asset. Accordingly, any later increase or decrease
resulting from a change in values, assets or other circumstances, or any
subsequent rating change made by a rating service, will not compel the Fund or
the Portfolio, as the case may be, to dispose of such security or other asset.
Moreover, the Fund and the Portfolio must always be in compliance with the
limitation on investing in illiquid securities and the borrowing policies set
forth above.
MANAGEMENT AND ORGANIZATION
FUND MANAGEMENT. The Trustees and officers of the Trust are responsible for
the overall management and supervision of the Trust's affairs. The Trustees of
the Trust and the Portfolio are listed below. Except as indicated, each
individual has held the office shown or other offices in the same company for
the last five years. Unless otherwise noted, the business address of each
Trustee and officer is The Eaton Vance Building, 255 State Street, Boston,
Massachusetts 02109. Those Trustees who are "interested persons" of the Trust,
or the Portfolio, as defined in the 1940 Act, are indicated by an asterisk(*).
JESSICA M. BIBLIOWICZ (38), Trustee*
President and Chief Executive Officer of National Financial Partners (a
financial services company) (since April 1999). President and Chief
Operating Officer of John A. Levin & Co. (a registered investment advisor)
(July 1997 to April 1999) and a Director of Baker, Fentress & Company which
owns John A. Levin & Co. (July 1997 to April 1999). Executive Vice President
of Smith Barney Mutual Funds (from July 1994 to June 1997). Elected Trustee
October 30, 1998. Trustee of various investment companies managed by Eaton
Vance or BMR since October 30, 1998.
Address: 1301 Avenue of the Americas, New York, New York 10019
DONALD R. DWIGHT (67), Trustee
President of Dwight Partners, Inc. (a corporate relations and communications
company). Trustee/Director of the Royce Funds (mutual funds). Trustee of
various investment companies managed by Eaton Vance or BMR.
Address: Clover Mill Lane, Lyme, New Hampshire 03768
JAMES B. HAWKES (57), Vice President and Trustee*
Chairman, President and Chief Executive Officer of BMR, Eaton Vance, EVC and
EV, and a Director of EVC and EV. Trustee and officer of various investment
companies managed by Eaton Vance or BMR.
SAMUEL L. HAYES, III (63), Trustee
Jacob H. Schiff Professor of Investment Banking Emeritus, Harvard University
Graduate School of Business Administration. Trustee of the Kobrick-Cendant
Investment Trust (mutual funds). Trustee of various investment companies
managed by Eaton Vance or BMR.
Address: 345 Nahatan Street, Westwood, Massachusetts 02090
NORTON H. REAMER (63), Trustee
Chairman of the Board and Chief Executive Officer, United Asset Management
Corporation (a holding company owning institutional investment management
firms). Chairman, President and Director, UAM Funds (mutual funds). Trustee
of various investment companies managed by Eaton Vance or BMR.
Address: One International Place, Boston, Massachusetts 02110
LYNN A. STOUT (41), Trustee
Professor of Law, Georgetown University Law Center. Elected Trustee October
30, 1998. Trustee of various investment companies managed by Eaton Vance or
BMR since October 30, 1998.
Address: 600 New Jersey Avenue, NW, Washington, DC 20001
JACK L. TREYNOR (68), Trustee
Investment Adviser and Consultant. Trustee of various investment companies
managed by Eaton Vance or BMR.
Address: 504 Via Almar, Palos Verdes Estates, California 90274
THOMAS J. FETTER (55), President
Vice President of BMR and Eaton Vance. Officer of various investment companies
managed by Eaton Vance or BMR.
WILLIAM H. AHERN, JR. (39), Vice President of the Portfolio
Vice President of BMR and Eaton Vance since January, 1996. Officer of various
investment companies managed by Eaton Vance or BMR.
ROBERT B. MACINTOSH (42), Vice President
Vice President of BMR and Eaton Vance. Officer of various investment companies
managed by Eaton Vance or BMR.
JAMES L. O'CONNOR (54), Treasurer
Vice President of BMR and Eaton Vance. Officer of various other investment
companies managed by Eaton Vance or BMR.
ALAN R. DYNNER (58), Secretary
Vice President and Chief Legal Officer of BMR, Eaton Vance and EVC since
November 1, 1996. Previously, he was a Partner of the law firm of
Kirkpatrick & Lockhart LLP, New York and Washington, D.C., and was Executive
Vice President of Neuberger & Berman Management, Inc., a mutual fund
management company. Officer of various investment companies managed by Eaton
Vance or BMR.
JANET E. SANDERS (63), Assistant Secretary
Vice President of BMR and Eaton Vance. Officer of various investment companies
managed by Eaton Vance or BMR.
A. JOHN MURPHY (36), Assistant Secretary
Vice President of BMR and Eaton Vance. Officer of various investment companies
managed by Eaton Vance or BMR.
ERIC G. WOODBURY (42), Assistant Secretary
Vice President of BMR and Eaton Vance. Officer of various investment
companies managed by Eaton Vance or BMR.
The Nominating Committee of the Board of Trustees of the Trust and the
Portfolio is comprised of the Trustees who are not "interested persons" as
that term is defined under the 1940 Act ("noninterested Trustees"). The
purpose of the Committee is to recommend to the Board nominees for the
position of noninterested Trustee and to assure that at least a majority of
the Board of Trustees is independent of Eaton Vance and its affiliates.
Messrs. Hayes (Chairman), Dwight and Reamer and Ms. Stout are members of
the Special Committee of the Board of Trustees of the Trust and of the
Portfolio. The purpose of the Special Committee is to consider, evaluate and
make recommendations to the full Board of Trustees concerning (i) all
contractual arrangements with service providers to the Fund and the Portfolio,
including investment advisory (Portfolio only), administrative, transfer
agency, custodial and fund accounting and distribution services, and (ii) all
other matters in which Eaton Vance or its affiliates has any actual or
potential conflict of interest with the Fund, the Portfolio or investors
therein.
Messrs. Treynor (Chairman) and Dwight are members of the Audit Committee
of the Board of Trustees of the Trust and of the Portfolio. The Audit
Committee's functions include making recommendations to the Trustees regarding
the selection of the independent accountants, and reviewing matters relative
to trading and brokerage policies and practices, accounting and auditing
practices and procedures, accounting records, internal accounting controls,
and the functions performed by the custodian, transfer agent and dividend
disbursing agent of the Trust and of the Portfolio.
Trustees of the Portfolio who 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 a Trustees Deferred Compensation Plan (the
"Trustees" Plan"). Under the Trustees' Plan, an eligible Trustee may elect to
have his deferred fees invested by the Portfolio in the shares of one or more
funds in the Eaton Vance Family of Funds, and the amount paid to the Trustees
under the Trustees' Plan will be determined based upon the performance of such
investments. Deferral of Trustees' fees in accordance with the Trustees' Plan
will have a negligible effect on the Portfolio's assets, liabilities, and net
income per share, and will not obligate the Portfolio to retain the services
of any Trustee or obligate the Portfolio to pay any particular level of
compensation to the Trustee. Neither the Portfolio nor the Trust has a
retirement plan for its Trustees.
The fees and expenses of the noninterested Trustees of the Trust and the
Portfolio are paid by the Fund (and the other series of the Trust) and the
Portfolio, respectively. (The Trustees of the Trust and the Portfolio who are
members of the Eaton Vance organization receive no compensation from the Trust
or the Portfolio.) During the fiscal year ended March 31, 1999, the
noninterested Trustees of the Trust and the Portfolio earned the following
compensation in their capacities as Trustees from the Trust and the Portfolio,
and for the year ended December 31, 1998, earned the following compensation in
their capacities as Trustees of the funds in the Eaton Vance fund complex(1):
<TABLE>
<CAPTION>
SOURCE OF JESSICA M. DONALD R. SAMUEL L. NORTON H. LYNN A. JACK L.
COMPENSATION BIBLIOWICZ(6) DWIGHT HAYES, III REAMER STOUT(6) TREYNOR
--------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Trust(2) ........................... $ 644 $ 669 $ 675 $ 623 $ 689 $ 704
Portfolio........................... 239 335(3) 386 374 272 392
Trust and Fund Complex ............. 33,334 160,000(4) 170,000(5) 160,000 32,842 170,000
- ----------
(1) As of August 1, 1999, the Eaton Vance fund complex consists of 154 registered investment companies or series thereof.
(2) The Trust consisted of 10 Funds as of March 31, 1999.
(3) Includes $173 of deferred compensation.
(4) Includes $60,000 of deferred compensation.
(5) Includes $41,563 of deferred compensation.
(6) Ms. Bibliowicz and Ms. Stout were elected Trustees on October 30, 1998.
</TABLE>
ORGANIZATION. The Fund is a series of the Trust, which is organized under
Massachusetts law as a business trust and is operated as an open-end
management investment company. The Fund established multiple classes of shares
on June 27, 1996. The Fund established Class C on April 1, 1998. Class A and
Class B were known as Class II and Class I of the Fund prior to such date.
Class C is the successor to the operations of a separate series of the Trust.
The Trust may issue an unlimited number of shares of beneficial interest
(no par value per share) in one or more series (such as the Fund). The
Trustees of the Trust have divided the shares of the Fund into multiple
classes. Each class represents an interest in the Fund, but is subject to
different expenses, rights and privileges. The Trustees have the authority
under the Declaration of Trust to create additional classes of shares with
differing rights and privileges. When issued and outstanding, shares are fully
paid and nonassessable by the Trust. Shareholders are entitled to one vote for
each full share held. Fractional shares may be voted proportionately. Shares
of the Fund will be voted together except that only shareholders of a
particular class may vote on matters affecting only that class. Shares have no
preemptive or conversion rights and are freely transferable. In the event of
the liquidation of the Fund, shareholders of each class are entitled to share
pro rata in the net assets attributable to that class available for
distribution to shareholders.
The Trustees of the Trust have considered the advantages and disadvantages
of investing the assets of the Fund in the Portfolio, as well as the
advantages and disadvantages of the two-tier format. The Trustees believe that
the structure offers opportunities for growth in the assets of the Portfolio,
may afford the potential for economies of scale for the Fund and may over time
result in lower expenses for the Fund.
As permitted by Massachusetts law, there will normally be no meetings of
shareholders for the purpose of electing Trustees unless and until such time
as less than a majority of the Trustees of the Trust holding office have been
elected by shareholders. In such an event, Trustees then in office will call a
shareholders' meeting for the election of Trustees. Except for the foregoing
circumstances and unless removed by action of the shareholders in accordance
with the Trust's By-laws, the Trustees shall continue to hold office and may
appoint successor Trustees.
The Trust's By-laws provide that no person shall serve as a Trustee if
shareholders holding two-thirds of the outstanding shares have removed him
from that office either by a written declaration filed with the Trust's
custodian or by votes cast at a meeting called for that purpose. The By-laws
further provide that under certain circumstances the shareholders may call a
meeting to remove a Trustee and that the Trust is required to provide
assistance in communication with shareholders about such a meeting.
The Trust's Declaration of Trust may be amended by the Trustees when
authorized by vote of a majority of the outstanding voting securities of the
Trust, the financial interests of which are affected by the amendment. The
Trustees may also amend the Declaration of Trust without the vote or consent
of shareholders to change the name of the Trust or any series or to make such
other changes (such as reclassifying series or classes of shares or
restructuring the Trust) as do not have a materially adverse effect on the
financial interests of shareholders or if they deem it necessary to conform it
to applicable federal or state laws or regulations. The Trust or any series or
class thereof may be terminated by: (1) the affirmative vote of the holders of
not less than two-thirds of the shares outstanding and entitled to vote at any
meeting of shareholders of the Trust or the appropriate series or class
thereof, or by an instrument or instruments in writing without a meeting,
consented to by the holders of two-thirds of the shares of the Trust or a
series or class thereof, provided, however, that, if such termination is
recommended by the Trustees, the vote of a majority of the outstanding voting
securities of the Trust or a series or class thereof entitled to vote thereon
shall be sufficient authorization; or (2) by means of an instrument in writing
signed by a majority of the Trustees, to be followed by a written notice to
shareholders stating that a majority of the Trustees has determined that the
continuation of the Trust or a series or a class thereof is not in the best
interest of the Trust, such series or class or of their respective
shareholders.
The Declaration of Trust further provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law; but nothing in the
Declaration of Trust protects a Trustee against any liability to which he
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of his
office.
Under Massachusetts law, if certain conditions prevail, shareholders of a
Massachusetts business trust (such as the Trust) could be deemed to have
personal liability for the obligations of the Trust. Numerous investment
companies registered under the 1940 Act have been formed as Massachusetts
business trusts, and management is not aware of an instance where such
liability has been imposed. The Trust's Declaration of Trust contains an
express disclaimer of liability on the part of the Fund shareholders and the
Trust's By-laws provide that the Trust shall assume the defense on behalf of
any Fund shareholders. (The Declaration of Trust also contains provisions
limiting the liability of a series or class to that series or class.)
Moreover, the Trust's By-laws also provide for indemnification out of the
property of the Fund of any shareholder held personally liable solely by
reason of being or having been a shareholder for all loss or expense arising
from such liability. The assets of the Fund are readily marketable and will
ordinarily substantially exceed its liabilities. In light of the nature of the
Fund's business and the nature of its assets, management believes that the
possibility of the Fund's liability exceeding its assets, and therefore the
shareholder's risk of personal liability, is remote.
The Portfolio is organized as a trust under the laws of the state of New
York and intends to be treated as a partnership for federal tax purposes. In
accordance with the Declaration of Trust of the Portfolio, there will normally
be no meetings of the investors for the purpose of electing Trustees unless
and until such time as less than a majority of the Trustees of the Portfolio
holding office have been elected by investors. In such an event the Trustees
of the Portfolio then in office will call an investors' meeting for the
election of Trustees. Except for the foregoing circumstances and unless
removed by action of the investors in accordance with the Portfolio's
Declaration of Trust, the Trustees shall continue to hold office and may
appoint successor Trustees.
The Declaration of Trust of the Portfolio provides that no person shall
serve as a Trustee if investors holding two-thirds of the outstanding
interests have removed him from that office either by a written declaration
filed with the Portfolio's custodian or by votes cast at a meeting called for
that purpose. The Declaration of Trust further provides that under certain
circumstances the investors may call a meeting to remove a Trustee and that
the Portfolio is required to provide assistance in communicating with
investors about such meeting.
The Portfolio's Declaration of Trust provides that the Fund and other
entities permitted to invest in the Portfolio (e.g., other U.S. and foreign
investment companies, and common and commingled trust funds) will each be
liable for all obligations of the Portfolio. However, the risk of the Fund
incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance exists and the Portfolio
itself is unable to meet its obligations. Accordingly, the Trustees of the
Trust believe that neither the Fund nor its shareholders will be adversely
affected by reason of the Fund investing in the Portfolio.
Whenever the Fund as an investor in the Portfolio is requested to vote on
matters pertaining to the Portfolio (other than the termination of the
Portfolio's business, which may be determined by the Trustees of the Portfolio
without investor approval), the Fund will hold a meeting of Fund shareholders
and will vote its interest in the Portfolio for or against such matters
proportionately to the instructions to vote for or against such matters
received from Fund shareholders. The Fund shall vote shares for which it
receives no voting instructions in the same proportion as the shares for which
it receives voting instructions. Other investors in the Portfolio may alone or
collectively acquire sufficient voting interests in the Portfolio to control
matters relating to the operation of the Portfolio, which may require the Fund
to withdraw its investment in the Portfolio or take other appropriate action.
Any such withdrawal could result in a distribution "in kind" of portfolio
securities (as opposed to a cash distribution from the Portfolio). If
securities are distributed, the Fund could incur brokerage, tax or other
charges in converting the securities to cash. In addition, the distribution in
kind may result in a less diversified portfolio of investments or adversely
affect the liquidity of the Fund. Notwithstanding the above, there are other
means for meeting shareholder redemption requests, such as borrowing.
The Fund may withdraw (completely redeem) all its assets from the
Portfolio at any time if the Board of Trustees of the Trust determines that it
is in the best interest of the Fund to do so. In the event the Fund withdraws
all of its assets from the Portfolio, or the Board of Trustees of the Trust
determines that the investment objective of such Portfolio is no longer
consistent with the investment objective of the Fund, the Trustees would
consider what action might be taken, including investing the assets of the
Fund in another pooled investment entity or retaining an investment adviser to
manage the Fund's assets in accordance with its investment objective. The
Fund's investment performance may be affected by a withdrawal of all its
assets (or the assets of another investor in the Portfolio) from the
Portfolio.
INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES
INVESTMENT ADVISORY SERVICES. BMR manages the investments and affairs of the
Portfolio subject to the supervision of the Portfolio's Board of Trustees. BMR
furnishes to the Portfolio investment research, advice and supervision,
furnishes an investment program and determines what securities will be
purchased, held or sold by the Portfolio and what portion, if any, of the
Portfolio's assets will be held uninvested. The Investment Advisory Agreement
requires BMR to pay the salaries and fees of all officers and Trustees of the
Portfolio who are members of the BMR organization and all personnel of BMR
performing services relating to research and investment activities.
For a description of the compensation that the Portfolio pays BMR, see the
prospectus. On March 31, 1999, the Portfolio had net assets of $89,966,394.
For the fiscal years ended March 31, 1999, 1998 and 1997, the Portfolio paid
BMR advisory fees of $433,524, $466,594 and $575,268, respectively (equivalent
to 0.48% of the Portfolio's average net assets for each such year).
The Investment Advisory Agreement with BMR continues in effect from year
to year so long as such continuance is approved at least annually (i) by the
vote of a majority of the noninterested Trustees of the Portfolio cast in
person at a meeting specifically called for the purpose of voting on such
approval and (ii) by the Board of Trustees of the Portfolio or by vote of a
majority of the outstanding voting securities of the Portfolio. The Agreement
may be terminated at any time without penalty on sixty (60) days' written
notice by the Board of Trustees of either party, or by vote of the majority of
the outstanding voting securities of the Portfolio, and the Agreement will
terminate automatically in the event of its assignment. The Agreement provides
that BMR may render services to others. The Agreement also provides that BMR
shall not be liable for any loss incurred in connection with the performance
of its duties, or action taken or omitted under that Agreement, in the absence
of willful misfeasance, bad faith, gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and duties
thereunder, or for any losses sustained in the acquisition, holding or
disposition of any security or other investment.
ADMINISTRATIVE SERVICES. As indicated in the prospectus, Eaton Vance serves as
administrator of the Fund, but currently receives no compensation for
providing administrative services to the Fund. Under its Administrative
Services Agreement with the Fund, Eaton Vance has been engaged to administer
the Fund's affairs, subject to the supervision of the Trustees of the Trust,
and shall furnish for the use of the Fund office space and all necessary
office facilities, equipment and personnel for administering the affairs of
the Fund.
INFORMATION ABOUT BMR AND EATON VANCE. BMR and Eaton Vance are business trusts
organized under Massachusetts law. Eaton Vance, Inc. ("EV") serves as trustee
of BMR and Eaton Vance. BMR, Eaton Vance and EV are wholly-owned subsidiaries
of Eaton Vance Corporation ("EVC"), a Maryland corporation and publicly-held
holding company. EVC through its subsidiaries and affiliates engages primarily
in investment management, administration and marketing activities. The
Directors of EVC are James B. Hawkes, Benjamin A. Rowland, Jr., John G.L.
Cabot, John M. Nelson, Vincent M. O'Reilly and Ralph Z. Sorenson. All of the
issued and outstanding shares of Eaton Vance are owned by EVC. All of the
issued and outstanding shares of BMR are owned by Eaton Vance. All shares of
the outstanding Voting Common Stock of EVC are deposited in a Voting Trust,
the Voting Trustees of which are Messrs. Hawkes and Rowland, Alan R. Dynner,
Thomas E. Faust, Jr., Thomas J. Fetter, Duncan W. Richardson, William M.
Steul, and Wharton P. Whitaker (all of whom are officers of Eaton Vance). The
Voting Trustees have unrestricted voting rights for the election of Directors
of EVC. All of the outstanding voting trust receipts issued under said Voting
Trust are owned by certain of the officers of BMR and Eaton Vance who are also
officers, or officers and Directors of EVC and EV. As indicated under
"Management and Organization", all of the officers of the Trust (as well as
Mr. Hawkes who is also a Trustee) hold positions in the Eaton Vance
organization.
EXPENSES. The Fund and Portfolio are responsible for all expenses not
expressly stated to be payable by another party (such as the investment
adviser under the Investment Advisory Agreement, Eaton Vance under the
Administrative Services Agreement or the principal underwriter under the
Distribution Agreement). In the case of expenses incurred by the Trust, the
Fund is responsible for its pro rata share of those expenses. The only
expenses of the Fund allocated to a particular class are those incurred under
the Distribution or Service Plan applicable to that class and those resulting
from the fee paid to the principal underwriter for repurchase transactions.
OTHER SERVICE PROVIDERS
PRINCIPAL UNDERWRITER. Eaton Vance Distributors, Inc. ("EVD"), The Eaton Vance
Building, 255 State Street, Boston, MA 02109, is the Fund's principal
underwriter. The principal underwriter acts as principal in selling shares
under a Distribution Agreement with the Trust. The expenses of printing copies
of prospectuses used to offer shares and other selling literature and of
advertising are borne by the principal underwriter. The fees and expenses of
qualifying and registering and maintaining qualifications and registrations of
the Fund and its shares under federal and state securities laws are borne by
the Fund. The Distribution Agreement as it applies to Class A shares is
renewable annually by the Board of Trustees of the Trust (including a majority
of the noninterested Trustees), may be terminated on six months' notice by
either party and is automatically terminated upon assignment. The Distribution
Agreement as it applies to Class B and Class C shares is renewable annually by
the Trust's Board of Trustees (including a majority of the noninterested
Trustees who have no direct or indirect financial interest in the operation of
the Distribution Plan or the Distribution Agreement), may be terminated on
sixty days' notice either by such Trustees or by vote of a majority of the
outstanding shares of the relevant class or on six months' notice by the
principal underwriter, and is automatically terminated upon assignment. The
principal underwriter distributes shares on a "best efforts" basis under which
it is required to take and pay for only such shares as may be sold. The
principal underwriter allows investment dealers discounts from the applicable
public offering price which are alike for all investment dealers. See "Sales
Charges." EVD is a wholly-owned subsidiary of EVC. Mr. Hawkes is a Vice
President and Director and Messrs. Dynner and O'Connor are Vice Presidents of
EVD.
CUSTODIAN. Investors Bank & Trust Company ("IBT"), 200 Clarendon Street,
Boston, MA 02116, serves as custodian to the Fund and the Portfolio. IBT has
the custody of all cash and securities representing the Fund's interest in the
Portfolio, has custody of all the Portfolio's assets, maintains the general
ledger of the Portoflio and the Fund and computes the daily net asset value of
interests in the Portfolio and the net asset value of shares of the Fund. In
such capacity it attends to details in connection with the sale, exchange,
substitution, transfer or other dealings with the Portfolio's investments,
receives and disburses all funds and performs various other ministerial duties
upon receipt of proper instructions from the Trust and the Portfolio. IBT also
provides services in connection with the preparation of shareholder reports
and the electronic filing of such reports with the SEC. EVC and its affiliates
and their officers and employees from time to time have transactions with
various banks, including IBT. It is Eaton Vance's opinion that the terms and
conditions of such transactions were not and will not be influenced by
existing or potential custodial or other relationships between the Fund or the
Portfolio and such banks.
INDEPENDENT ACCOUNTANTS. Deloitte & Touche LLP, 200 Berkeley Street, Boston,
MA 02116, are independent accountants of the Fund and the Portfolio, providing
audit services, tax return preparation, and assistance and consultation with
respect to the preparation of filings with the SEC.
TRANSFER AGENT. First Data Investor Services Group, P.O. Box 5123,
Westborough, MA 01581-5123, serves as transfer and dividend disbursing agent
for the Fund.
PURCHASING AND REDEEMING SHARES
CALCULATION OF NET ASSET VALUE. The net asset value of the Portfolio is
computed by IBT (as agent and custodian for the Portfolio) by subtracting the
liabilities of the Portfolio from the value of its total assets. Inasmuch as
the market for municipal obligations is a dealer market with no central
trading location or continuous quotation system, it is not feasible to obtain
last transation prices for most municipal obligations held by the Portfolio,
and such obligations, including those purchased on a when-issued basis, will
normally be valued on the basis of valuations furnished by a pricing service.
The pricing service uses information with respect to transactions in bonds,
quotations from bond dealers, market transactions in comparable securities,
various relationships between securities, and yield to maturity in determining
value. Taxable obligations for which price quotations are readily available
normally will be valued at the mean between the latest available bid and asked
prices. Open futures positions on debt securities are valued at the most
recent settlement prices, unless such price does not reflect the fair value of
the contract, in which case the positions will be valued by or at the
direction of the Trustees of the Portfolio. Other assets are valued at fair
value using methods determined in good faith by or at the direction of the
Trustees of the Portfolio. The Fund and the Portfolio will be closed for
business and will not price their respective shares or interests on the
following business holidays: New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
Each investor in the Portfolio, including the Fund, may add to or reduce
its investment in the Portfolio on each day the Exchange is open for trading
("Portfolio Business Day") as of the close of regular trading on the Exchange
(the "Portfolio Valuation Time"). The value of each investor's interest in the
Portfolio will be determined by multiplying the net asset value of the
Portfolio by the percentage, determined on the prior Portfolio Business Day,
which represented that investor's share of the aggregate interests in the
Portfolio on such prior day. Any additions or withdrawals for the current
Portfolio Business Day will then be recorded. Each investor's percentage of
the aggregate interest in the Portfolio will then be recomputed as a
percentage equal to a fraction (i) the numerator of which is the value of such
investor's investment in the Portfolio as of the Portfolio Valuation Time on
the prior Portfolio Business Day plus or minus, as the case may be, the amount
of any additions to or withdrawals from the investor's investment in the
Portfolio on the current Portfolio Business Day and (ii) the denominator of
which is the aggregate net asset value of the Portfolio as of the Portfolio
Valuation Time on the prior Portfolio Business Day plus or minus, as the case
may be, the amount of the net additions to or withdrawals from the aggregate
investment in the Portfolio on the current Portfolio Business Day by all
investors in the Portfolio. The percentage so determined will then be applied
to determine the value of the investor's interest in the Portfolio for the
current Portfolio Business Day.
ADDITIONAL INFORMATION ABOUT PURCHASES. Fund shares are continuously offered
through investment dealers which have entered agreements with the principal
underwriter. The public offering price is the net asset value next computed
after receipt of the order, plus, in the case of Class A shares, a variable
percentage (sales charge) depending upon the amount of purchase as indicated
by the sales charge table set forth in the prospectus. The sales charge is
divided between the principal underwriter and the investment dealer. The
sales charge table is applicable to purchases of a Fund alone or in
combination with purchases of certain other funds offered by the principal
underwriter, made at a single time by (i) an individual, or an individual, his
spouse and their children under the age of twenty-one, purchasing shares for
his or their own account, and (ii) a trustee or other fiduciary purchasing
shares for a single trust estate or a single fiduciary account. The table is
also presently applicable to (1) purchases of Class A shares pursuant to a
written Statement of Intention; or (2) purchases of Class A shares pursuant to
the Right of Accumulation and declared as such at the time of purchase. See
"Sales Charges".
SUSPENSION OF SALES. The Trust may, in its absolute discretion, suspend,
discontinue or limit the offering of one or more of its classes of shares at
any time. In determining whether any such action should be taken, the Trust's
management intends to consider all relevant factors, including (without
limitation) the size of the Fund or class, the investment climate and market
conditions, the volume of sales and redemptions of shares, and in the case of
Class B and Class C shares, the amount of uncovered distribution charges of
the principal underwriter. The Class B and Class C Distribution Plans may
continue in effect and payments may be made under the Plans following any such
suspension, discontinuance or limitation of the offering of shares; however,
there is no contractual obligation to continue any Plans for any particular
period of time. Suspension of the offering of shares would not, of course,
affect a shareholder's ability to redeem shares.
ACQUIRING FUND SHARES IN EXCHANGE FOR SECURITIES. IBT, as escrow agent, will
receive securities acceptable to Eaton Vance, as administrator, in exchange
for Fund shares. The minumum value of securities (or securities and cash)
accepted for deposit is $5,000. Securities accepted will be sold on the day of
their receipt or as soon thereafter as possible. The number of Fund shares to
be issued in exchange for securities will be the aggregate proceeds from the
sale of such securities, divided by the applicable public offering price of
Class A shares or net asset value of Class B and Class C shares on the day
such proceeds are received. Eaton Vance will use reasonable efforts to obtain
the then current market price for such securities but does not guarantee the
best available price. Eaton Vance will absorb any transaction costs, such as
commissions, on the sale of the securities. Securities determined to be
acceptable should be transferred via book entry or physically delivered, in
proper form for transfer, through an investment dealer, together with a
completed and signed Letter of Transmittal in approved form (available from
investment dealers). Investors who are contemplating an exchange of securities
for shares, or their representatives, must contact Eaton Vance to determine
whether the securities are acceptable before forwarding such securities. Eaton
Vance reserves the right to reject any securities. Exchanging securities for
shares may create a taxable gain or loss. Each investor should consult his or
her tax adviser with respect to the particular federal, state and local tax
consequences of exchanging securities.
ADDITIONAL INFORMATION ABOUT REDEMPTIONS. The right to redeem shares of the
Fund can be suspended and the payment of the redemption price deferred when
the Exchange is closed (other than for customary weekend and holiday
closings), during periods when trading on the Exchange is restricted as
determined by the SEC, or during any emergency as determined by the SEC which
makes it impracticable for the Portfolio to dispose of its securities or value
its assets, or during any other period permitted by order of the SEC for the
protection of investors.
While normally payments will be made in cash for redeemed shares, the
Trust, subject to compliance with applicable regulations, has reserved the
right to pay the redemption price of shares of the Fund, either totally or
partially, by a distribution in kind of readily marketable securities
withdrawn from the Portfolio. The securities so distributed would be valued
pursuant to the Portfolio's valuation procedures. If a shareholder received a
distribution in kind, the shareholder could incur brokerage or other charges
in converting the securities to cash.
Due to the high cost of maintaining small accounts, the Trust reserves the
right to redeem accounts with balances of less than $750. Prior to such a
redemption, shareholders will be given 60 days' written notice to make an
additional purchase. However, no such redemption would be required by the
Trust if the cause of the low account balance was a reduction in the net asset
value of shares. No CDSC will be imposed with respect to such involuntary
redemptions.
SYSTEMATIC WITHDRAWAL PLAN. The transfer agent will send to the shareholder
regular monthly or quarterly payments of any permitted amount designated by
the shareholder based upon the value of the shares held. The checks will be
drawn from share redemptions and hence, may require the recognition of taxable
gain or loss. Income dividends and capital gains distributions in connection
with withdrawal plan accounts will be credited at net asset value as of the
record date for each distribution. Continued withdrawals in excess of current
income will eventually use up principal, particularly in a period of declining
market prices. A shareholder may not have a withdrawal plan in effect at the
same time he or she has authorized Bank Automated Investing or is otherwise
making regular purchases of Fund shares. The shareholder, the transfer agent
or the principal underwriter will be able to terminate the withdrawal plan at
any time without penalty.
SALES CHARGES
DEALER COMMISSIONS. The principal underwriter may, from time to time, at its
own expense, provide additional incentives to investment dealers which employ
registered representatives who sell Fund shares and/or shares of other funds
distributed by the principal underwriter. In some instances, such additional
incentives may be offered only to certain investment dealers whose
representatives sell or are expected to sell significant amounts of shares. In
addition, the principal underwriter may from time to time increase or decrease
the sales commissions payable to investment dealers. The principal underwriter
may allow, upon notice to all investment dealers with whom it has agreements,
discounts up to the full sales charge during the periods specified in the
notice. During periods when the discount includes the full sales charge, such
investment dealers may be deemed to be underwriters as that term is defined in
the Securities Act of 1933.
SALES CHARGE WAIVERS. Class A shares may be sold at net asset value to current
and retired Directors and Trustees of Eaton Vance funds, including the
Portfolio; to clients and current and retired officers and employees of Eaton
Vance, its affiliates and other investment advisers of Eaton Vance sponsored
funds; to officers and employees of IBT and the transfer agent; to persons
associated with law firms, accounting firms and consulting firms providing
services to Eaton Vance and the Eaton Vance Funds; and to such persons'
spouses, parents, siblings and children and their beneficial accounts. Such
shares may also be issued at net asset value (1) in connection with the merger
of an investment company (or series or class thereof) with the Fund (or class
thereof), (2) to investors making an investment as part of a fixed fee program
whereby an entity unaffiliated with the investment adviser provides multiple
investment services, such as management, brokerage and custody, and (3) to
investment advisors, financial planners or other intermediaries who place
trades for their own accounts or the accounts of their clients and who charge
a management, consulting or other fee for their services; clients of such
investment advisors, financial planners or other intermediaries who place
trades for their own accounts if the accounts are linked to the master account
of such investment advisor, financial planner or other intermediary on the
books and records of the broker or agent. Class A shares may also be sold at
net asset value to registered representatives and employees of investment
dealers and bank employees who refer customers to registered representatives
of investment dealers. Class A shares may be sold at net asset value to any
investment advisory, agency, custodial or trust account managed or
administered by Eaton Vance or by any parent, subsidiary or other affiliate of
Eaton Vance. Class A shares are offered at net asset value to the foregoing
persons and in the foregoing situations because either (i) there is no sales
effort involved in the sale of shares or (ii) the investor is paying a fee
(other than the sales charge) to the investment dealer involved in the sale.
STATEMENT OF INTENTION. If it is anticipated that $100,000 or more of Class A
shares and shares of other funds exchangeable for Class A shares of another
Eaton Vance fund will be purchased within a 13-month period, a Statement of
Intention should be signed so that shares may be obtained at the same reduced
sales charge as though the total quantity were invested in one lump sum.
Shares held under Right of Accumulation (see below) as of the date of the
Statement will be included toward the completion of the Statement. The
Statement authorizes the transfer agent to hold in escrow sufficient shares
(5% of the dollar amount specified in the Statement) which can be redeemed to
make up any difference in sales charge on the amount intended to be invested
and the amount actually invested. Execution of a Statement does not obligate
the shareholder to purchase or the Fund to sell the full amount indicated in
the Statement, and should the amount actually purchased during the 13-month
period be more or less than that indicated on the Statement, price adjustments
will be made. Any investor considering signing a Statement of Intention should
read it carefully.
RIGHT OF ACCUMULATION. The applicable sales charge level for the purchase of
Class A shares is calculated by taking the dollar amount of the current
purchase and adding it to the value (calculated at the maximum current
offering price) of the Class A shares the shareholder owns in his or her
account(s) in the Fund, and shares of other funds exchangeable for Class A
shares. The sales charge on the shares being purchased will then be at the
rate applicable to the aggregate. Shares purchased (i) by an individual, his
or her spouse and their children under the age of twenty-one, and (ii) by a
trustee, guardian or other fiduciary of a single trust estate or a single
fiduciary account, will be combined for the purpose of determining whether a
purchase will qualify for the Right of Accumulation and if qualifying, the
applicable sales charge level. For any such discount to be made available, at
the time of purchase a purchaser or his or her investment dealer must provide
the principal underwriter (in the case of a purchase made through an
investment dealer) or the transfer agent (in the case of an investment made by
mail) with sufficient information to permit verification that the purchase
order qualifies for the accumulation privilege. Confirmation of the order is
subject to such verification. The Right of Accumulation privilege may be
amended or terminated at any time as to purchases occurring thereafter.
CONVERSION FEATURE. Class B shares held for the longer of (i) four years or
(ii) the time at which the CDSC applicable to such shares expires (the
"holding period") will automatically convert to Class A shares. Such
conversion will occur on or about the eighteenth day of the month in which the
holding period expires. For purposes of this conversion, all distributions
paid on Class B shares which the shareholder elects to reinvest in Class B
shares will be considered to be held in a separate sub-account. Upon the
conversion of Class B shares not acquired through the reinvestment of
distributions, a pro rata portion of the Class B shares held in the sub-
account will also convert to Class A shares. This portion will be determined
by the ratio that the Class B shares being converted bear to the total of
Class B shares (excluding shares acquired through reinvestment) in the
account. This conversion feature is subject to the continuing availability of
a ruling from the Internal Revenue Service or an opinion of counsel that the
conversion is not taxable for federal income tax purposes.
DISTRIBUTION AND SERVICE PLANS. The Trust has adopted a Service Plan (the
"Class A Plan") for the Fund's Class A shares that is designed to meet the
service fee requirements of the sales charge rule of the National Association
of Securities Dealers, Inc. (the "NASD"). (Management believes service fee
payments are not distribution expenses governed by Rule 12b-1 under the 1940
Act, but has chosen to have the Plan approved as if that Rule were
applicable.) The Class A Plan provides that the Class A may make service fee
payments for personal services and/or the maintenance of shareholder accounts
to the principal underwriter, investment dealers and other persons in amounts
not exceeding .25% of its average daily net assets for any fiscal year. The
Trustees of the Trust have initially implemented the Class A Plan by
authorizing Class A to make quarterly service fee payments to the principal
underwriter and investment dealers in amounts not expected to exceed .15% of
its average daily net assets for any fiscal year which is based on the value
of Class A shares sold by such persons and remaining outstanding for at least
twelve months. However, the Class A Plan authorizes the Trustees of the Trust
to increase payments without action by Class A shareholders, provided that the
aggregate amount of payments made in any fiscal year does not exceed .25% of
average daily net assets. For the service fees paid by Class A shares, see
Appendix A.
The Trust has also adopted compensation-type Distribution Plans ("Class B
and Class C Plans") pursuant to Rule 12b-1 under the 1940 Act for the Fund's
Class B and Class C shares. The Class B and Class C Plans are designed to
permit an investor to purchase shares through an investment dealer without
incurring an initial sales charge and at the same time permit the principal
underwriter to compensate investment dealers in connection therewith. The
Class B and Class C Plans provide that the Fund will pay sales commissions and
distribution fees to the principal underwriter only after and as a result of
the sale of Class B shares of the Fund. On each sale of Fund shares (excluding
reinvestment of distributions), the Fund will pay the principal underwriter
amounts representing (i) sales commissions equal to 5% for Class B shares and
6.25% for Class C shares of the amount received by the Fund for each share
sold and (ii) distribution fees calculated by applying the rate of 1% over the
prime rate then reported in The Wall Street Journal to the outstanding balance
of uncovered distribution charges (as described below) of the principal
underwriter. To pay these amounts, each Class pays the principal underwriter a
fee, accrued daily and paid monthly, at an annual rate not exceeding .75% of
its average daily net assets to finance the distribution of its shares. Such
fees compensate the principal underwriter for sales commissions paid by it to
investment dealers on the sale of shares and for interest expenses. For sales
of Class B shares, the principal underwriter uses its own funds to pay sales
commissions (except on exchange transactions and reinvestments) to investment
dealers at the time of sale equal to 4% of the purchase price of the Class B
shares sold by such dealers. For Class C shares, the principal underwriter
currently expects to pay to an investment dealer (a) sales commissions (except
on exchange transactions and reinvestments) at the time of sale equal to .85%
of the purchase price of the shares sold by such dealer, and (b) monthly sales
commissions approximately equivalent to 1/12 of .75% of the value of shares
sold by such dealer and remaining outstanding for at least one year. During
the first year after a purchase of Class C shares, the principal underwriter
will retain the sales commission as reimbursement for the sales commissions
paid to investment dealers at the time of sale. CDSCs paid to the principal
underwriter will be used to reduce amounts owed to it. The Class B and Class C
Plans provide that the Fund will make no payments to the principal underwriter
in respect of any day on which there are no outstanding uncovered distribution
charges of the principal underwriter. CDSCs and accrued amounts will be paid
by the Trust to the principal underwriter whenever there exist uncovered
distribution charges. Because payments to the principal underwriter under the
Class B and Class C Plans are limited, uncovered distribution charges (sales
commissions paid by the principal underwriter plus interest, less the above
fees and CDSCs received by it) may exist indefinitely. For the sales
commissions and CDSCs paid on (and uncovered distribution charges of) Class B
and Class C shares, see Appendix B and Appendix C, respectively.
In calculating daily the amount of uncovered distribution charges,
distribution charges will include the aggregate amount of sales commissions
and distribution fees theretofore paid plus the aggregate amount of sales
commissions and distribution fees which the principal underwriter is entitled
to be paid under the Plan since its inception. Payments theretofore paid or
payable under the Class B and Class C Plans by the Trust to the principal
underwriter and CDSCs theretofore paid or payable to the principal underwriter
will be subtracted from such distribution charges; if the result of such
subtraction is positive, a distribution fee (computed at 1% over the prime
rate then reported in The Wall Street Journal) will be computed on such amount
and added thereto, with the resulting sum constituting the amount of
outstanding uncovered distribution charges with respect to such day. The
amount of outstanding uncovered distribution charges of the principal
underwriter calculated on any day does not constitute a liability recorded on
the financial statements of the Fund.
The amount of uncovered distribution charges of the principal underwriter
at any particular time depends upon various changing factors, including the
level and timing of sales of shares, the nature of such sales (i.e., whether
they result from exchange transactions, reinvestments or from cash sales
through investment dealers), the level and timing of redemptions of shares
upon which a CDSC will be imposed, the level and timing of redemptions of
shares upon which no CDSC will be imposed (including redemptions of shares
pursuant to the exchange privilege which result in a reduction of uncovered
distribution charges), changes in the level of the net assets of the Class,
and changes in the interest rate used in the calculation of the distribution
fee under the Class B and Class C Plans.
The Class B and Class C Plans also authorizes each Class to make payments
of service fees to the principal underwriter, investment dealers and other
persons in amounts not exceeding .25% of its average daily net assets for
personal services, and/or the maintenance of shareholder accounts. The
Trustees of the Trust have initially implemented this provision of the Class B
and Class C Plans by authorizing each Class B and Class C to make quarterly
service fee payments to the principal underwriter and investment dealers in
amounts not expected to exceed .15% of the average daily net assets for any
fiscal year which is based on the value of Class B and Class C shares sold by
such persons and remaining outstanding for at least 12 months. This fee is
paid quarterly in arrears based on the value of Class B shares sold by such
persons and remaining outstanding for at least twelve months. For Class C,
investment dealers currently receive (a) a service fee (except on exchange
transactions and reinvestments) at the time of sale equal to .15% of the
purchase price of the Class C shares sold by such dealer, and (b) monthly
service fees approximately equivalent to 1/12 of .15% of the value of Class C
shares sold by such dealer and remaining outstanding for at least one year.
During the first year after a purchase of Class C shares, the principal
underwriter will retain the service fee as reimbursement for the service fee
payment made to investment dealers at the time of sale. For the service fees
paid by Class B and Class C shares, see Appendix B and Appendix C,
respectively.
Currently, payments of sales commissions and distribution fees and of
service fees may equal 1% of a Class's average daily net assets per annum. The
Trust believes that the combined rate of all these payments may be higher than
the rate of payments made under distribution plans adopted by other investment
companies pursuant to Rule 12b-1. Although the principal underwriter will use
its own funds (which may be borrowed from banks) to pay sales commissions at
the time of sale, it is anticipated that the Eaton Vance organization will
profit by reason of the operation of the Class B and Class C Plans through an
increase in the Fund's assets (thereby increasing the advisory fee payable to
BMR by the Portfolio) resulting from sale of shares and through the amounts
paid to the principal underwriter, including CDSCs, pursuant to the Plans. The
Eaton Vance organization may be considered to have realized a profit under the
Class B and Class C Plans if at any point in time the aggregate amounts
theretofore received by the principal underwriter pursuant to the Class B and
Class C Plans and from CDSCs have exceeded the total expenses theretofore
incurred by such organization in distributing shares. Total expenses for this
purpose will include an allocable portion of the overhead costs of such
organization and its branch offices, which costs will include without
limitation leasing expense, depreciation of building and equipment, utilities,
communication and postage expense, compensation and benefits of personnel,
travel and promotional expense, stationery and supplies, literature and sales
aids, interest expense, data processing fees, consulting and temporary help
costs, insurance, taxes other than income taxes, legal and auditing expense
and other miscellaneous overhead items. Overhead is calculated and allocated
for such purpose by the Eaton Vance organization in a manner deemed equitable
to the Trust.
The Class A, Class B and Class C Plans continue in effect from year to
year so long as such continuance is approved at least annually by the vote of
both a majority of (i) the noninterested Trustees of the Trust who have no
direct or indirect financial interest in the operation of the Plan or any
agreements related to the Plan (the "Plan Trustees") and (ii) all of the
Trustees then in office. Each Plan may be terminated at any time by vote of a
majority of the Plan Trustees or by a vote of a majority of the outstanding
voting securities of the applicable Class. Each Plan requires quarterly
Trustee review of a written report of the amount expended under the Plan and
the purposes for which such expenditures were made. The Plans may not be
amended to increase materially the payments described therein without approval
of the shareholders of the affected Class and the Trustees. So long as a Plan
is in effect, the selection and nomination of the noninterested Trustees shall
be committed to the discretion of such Trustees. The Class A, Class B and
Class C Plans were approved by the Trustees, including the Plan Trustees, on
June 23, 1997.
The Trustees of the Trust believe that each Plan will be a significant
factor in the expected growth of each Fund's assets, and will result in
increased investment flexibility and advantages which have benefitted and will
continue to benefit the Fund and its shareholders. Payments for sales
commissions and distribution fees made to the principal underwriter under the
Class B and Class C Plans will compensate the principal underwriter for its
services and expenses in distributing those classes of shares. Service fee
payments made to the principal underwriter and investment dealers provide
incentives to provide continuing personal services to investors and the
maintenance of shareholder accounts. By providing incentives to the principal
underwriter and investment dealers, each Plan is expected to result in the
maintenance of, and possible future growth in, the assets of the Fund. Based
on the foregoing and other relevant factors, the Trustees of the Trust have
determined that in their judgment there is a reasonable likelihood that each
Plan will benefit the Fund and its shareholders.
PERFORMANCE
Average annual total return is determined separately for each Class of the
Fund by multiplying a hypothetical initial purchase order of $1,000 by the
average annual compound rate of return (including capital appreciation/
depreciation, and distributions paid and reinvested) for the stated period and
annualizing the result. The calculation assumes, (i) that all distributions
are reinvested at net asset value on the reinvestment dates during the period,
(ii) the deduction of the maximum initial sales charge from the initial $1,000
purchase order for Class A shares, (iii) a complete redemption of the
investment and, (iv) the deduction of any CDSC at the end of the period. The
Fund may also publish total return figures for each Class based on reduced
sales charges or at net asset value. These returns would be lower if the full
sales charge was imposed. For information concerning the total return of the
Classes of the Fund, see Appendix A, Appendix B and Appendix C.
Yield is computed separately for each Class of the Fund pursuant to a
standardized formula by dividing net investment income per share earned during
a recent thirty-day period by the maximum offering price (including the
maximum initial sales charge for Class A shares) per share on the last day of
the period and annualizing the resulting figure. Net investment income per
share is calculated from the yields to maturity of all debt obligations held
by the Portfolio based on prescribed methods, reduced by accrued Fund and
Class expenses for the period with the resulting number being divided by the
average daily number of Class shares outstanding and entitled to receive
distributions during the period. The yield figure does not reflect the
deduction of any CDSCs which (if applicable) are imposed on certain
redemptions at the rates set forth under "Sales Charges" in the prospectus.
Yield calculations assume the current maximum sales charge for Class A shares
set forth under "Sales Charges" in the prospectus. (Actual yield may be
affected by variations in sales charges on investments.) A taxable-equivalent
yield is computed by dividing the tax-exempt yield by one minus a stated rate.
The Fund's performance may be compared in publications to the performance
of various indices and investments for which reliable data is available, and
to averages, performance rankings, or other information prepared by recognized
mutual fund statistical services. The Fund's performance may differ from that
of other investors in the Portfolio, including other investment companies.
The Trust (or Principal Underwriter) may provide investors with
information on municipal bond investing, which may include comparative
performance information, evaluations of Fund performance, ratings, charts and/
or illustrations prepared by independent sources, (such as Lipper Inc.,
Wiesenberger, Morningstar, Inc., The Bond Buyer, the Federal Reserve Board or
The Wall Street Journal). The Trust may also refer in investor publications to
Tax Freedom Day, as computed by the Tax Foundation, Washington, DC 20005, to
help illustrate the value of tax free investing, as well as other tax-related
information. Information, charts and illustrations showing the effects of
inflation and taxes (including their effect on the dollar and the return on
various investments) and compounding earnings may also be included in
advertisements and materials furnished to present and prospective investors.
Information about portfolio allocation and holdings of the Portfolio at a
particular date (including ratings assigned by independent ratings services
such as Moody's, S&P and Fitch) may be included in advertisements and other
material furnished to present and prospective shareholders. Such information
may be stated as a percentage of the Portfolio's bond holdings on such date.
Comparative information about the yield of the Fund and about average
rates of return on certificates of deposit, bank money market deposit
accounts, money market mutual funds, and other short-term investments may also
be included in advertisements, supplemental sales literature or communications
of the Fund. Such information may also compare the taxable equivalent yield
(or value) of the Fund to the after-tax yield (or value) of such other
investment vehicles. Such information may be in the form of hypothetical
illustrations. A bank certificate of deposit, unlike the Fund's shares, pays a
fixed rate of interest and entitles the depositor to receive the face amount
of the certificate of deposit at maturity. A bank money market deposit account
is a form of savings account which pays a variable rate of interest. Unlike
the Fund's shares, bank certificates of deposit and bank money market deposit
accounts are insured by the Federal Deposit Insurance Corporation. A money
market mutual fund is designed to maintain a constant value of $1.00 per share
and, thus, a money market fund's shares are subject to less price fluctuation
than the Fund's shares.
The average rates of return of money market mutual funds, certificates of
deposit and bank money market deposit accounts referred to in advertisements,
supplemental sales literature or communications of the Fund will be based on
rates published by the Federal Reserve Bank, Donoghues Money Fund Averages,
RateGram or The Wall Street Journal.
Information used in advertisements and in materials provided to present
and prospective shareholders may include descriptions of Eaton Vance and other
Fund and Portfolio service providers, their investment styles, other
investment products, personnel and Fund distribution channels.
Information used in advertisements and materials furnished to present and
prospective investors may include statements or illustrations relating to the
appropriateness of certain types of securities and/or mutual funds to meet
specific financial goals. Such information may address:
-- cost associated with aging parents;
-- funding a college education (including its actual and estimated
cost);
-- health care expenses (including actual and projected expenses);
-- long-term disabilities (including the availability of, and coverage
provided by, disability insurance); and
-- retirement (including the availability of social security benefits,
the tax treatment of such benefits and statistics and other
information relating to maintaining a particular standard of living
and outliving existing assets).
Such information may also address different methods for saving money and
the results of such methods, as well as the benefits of investing in municipal
bond funds. Such information may describe the following advantages of
investing in a municipal bond mutual fund versus individual municipal bonds:
regular monthly income; free reinvestment of distributions; potential for
increased income; bond diversification; liquidity; low-cost easy access; and
active management and in depth credit analysis by investment professionals. In
addition, by investing in a municipal bond fund instead of individual bonds,
an investor can avoid dealing with the complexities of the municipal bond
market, while benefitting from the market access and lower transactions costs
enjoyed by municipal bond funds.
The Trust (or Principal Underwriter) may provide information about Eaton
Vance, its affiliates and other investment advisers to the funds in the Eaton
Vance Family of Funds in sales material or advertisements provided to
investors or prospective investors. Such material or advertisements may also
provide information on the use of investment professionals by such investors.
TAXES
Each series of the Trust is treated as a separate entity for federal
income tax purposes. The Fund has elected to be treated and intends to qualify
each year as a regulated investment company ("RIC") under the Code.
Accordingly, the Fund intends to satisfy certain requirements relating to
sources of its income and diversification of its assets and to distribute
substantially all of its ordinary income (including tax-exempt income) and net
income (after reduction by any available capital loss carryforwards) in
accordance with the timing requirements imposed by the Code, so as to maintain
its RIC status and to avoid paying any federal income or excise tax. The Fund
so qualified for its fiscal year ended March 31, 1999. Because the Fund
invests its assets in the Portfolio, the Portfolio normally must satisfy the
applicable source of income and diversification requirements in order for the
Fund to also satisfy these requirements. The Portfolio will allocate at least
annually among its investors, including the Fund, 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. For purposes of applying the requirements of the Code
regarding qualification as a RIC, the Fund (i) will be deemed to own its
proportionate share of each of the assets of the Portfolio and (ii) will be
entitled to the gross income of the Portfolio attributable to such share.
In order to avoid incurring a federal excise tax obligation, the Code
requires that the Fund distribute (or be deemed to have distributed) by
December 31 of each calendar year at least 98% of its ordinary income (not
including tax-exempt income) for such year, at least 98% of its capital gain
net income (which is the excess of its realized capital gains over its
realized capital losses), generally computed on the basis of the one-year
period ending on October 31 of such year, after reduction by (i) any available
capital loss carryforwards and (ii) 100% of any income from the prior year (as
previously computed) that was not paid out during such year and on which the
Fund paid no federal income tax. Under current law, provided that the Fund
qualifies as a RIC and the Portfolio is treated as a partnership for
Massachusetts and federal tax purposes, neither the Fund nor the Portfolio
should be liable for any income, corporate excise or franchise tax in the
Commonwealth of Massachusetts.
The Portfolio's investment in zero coupon and certain other securities
will cause it to realize income prior to the receipt of cash payments with
respect to these securities. Such income will be allocated daily to interests
in the Portfolio and, in order to enable the Fund to distribute its
proportionate share of this income and avoid a tax payable by the Fund, the
Portfolio may be required to liquidate portfolio securities that it might
otherwise have continued to hold in order to generate cash that the Fund may
withdraw from the for subsequent distribution to Fund shareholders.
Investments in lower-rated or unrated securities may present special tax
issues for the Portfolio (and, hence, for the Fund) to the extent that the
issuers of these securities default on their obligations pertaining thereto.
The Code is not entirely clear regarding the federal income tax consequences
of the Portfolio's taking certain positions in connection with ownership of
such distressed securities. For example, the Code is unclear regarding: (i)
when the Portfolio may cease to accrue interest, original issue discount, or
market discount; (ii) when and to what extent deductions may be taken for bad
debts or worthless securities; (iii) how payments received on obligations in
default should be allocated between principal and income; and (iv) whether
exchanges of debt obligations in a workout context are taxable.
Distributions by the Fund of net tax-exempt interest income that are
properly designated as "exempt-interest dividends" may be treated by
shareholders as interest excludable from gross income under Section 103(a) of
the Code. In order for the Fund to be entitled to pay the tax-exempt interest
income allocated to it by the Portfolio as exempt-interest dividends to its
shareholders, the Fund must and intends to satisfy certain requirements,
including the requirement that, at the close of each quarter of its taxable
year, at least 50% of the value of its total assets consists of obligations
the interest on which is exempt from regular federal income tax under Code
Section 103(a). For purposes of applying this 50% requirement, the Fund will
be deemed to own its proportionate share of each of the assets of the
Portfolio, and the Portfolio currently intends to invest its assets in a
manner such that the Fund can meet this 50% requirement. Interest on certain
municipal obligations is treated as a tax preference item for purposes of the
AMT. Shareholders of the Fund are required to report tax-exempt interest on
their federal income tax returns.
From time to time proposals have been introduced before Congress for the
purpose of restricting or eliminating the federal income tax exemption for
interest on certain types of municipal obligations, and it can be expected
that similar proposals may be introduced in the future. Under federal tax
legislation enacted in 1986, the federal income tax exemption for interest on
certain municipal obligations was eliminated or restricted. As a result of
such legislation, the availability of municipal obligations for investment by
the Portfolio and the value of the securities held by the Portfolio may be
affected.
In the course of managing its investments, the Portfolio may realize some
short-term and long-term capital gains (and/or losses) as a result of market
transactions, including sales of portfolio securities and rights to when-
issued securities, and options and futures transactions. The Portfolio may
also realize taxable income from certain short-term taxable obligations,
securities loans, a portion of discount with respect to certain stripped
municipal obligations or their stripped coupons, and certain realized gains or
income attributable to accrued market discount. Any distributions by the Fund
of its share of such capital gains (after reduction by any capital loss
carryforwards) or taxable income would be taxable to shareholders of the Fund.
However, it is expected that such amounts, if any, would normally be
insubstantial in relation to the tax exempt interest earned by the Portfolio
and allocated to the Fund. Certain distributions, if declared in October,
November or December and paid the following January, may be taxed to
shareholders as if received on December 31 of the year in which they are
declared.
The Portfolio's transactions in options and futures contracts will be
subject to special tax rules that may affect the amount, timing and character
of Fund distributions to shareholders. For example, certain positions held by
the Portfolio on the last business day of each taxable year will be marked to
market (i.e., treated as if closed out on such day), and any resulting gain or
loss will generally be treated as 60% long-term and 40% short-term capital
gain or loss. Certain positions held by the Portfolio that substantially
diminish the Portfolio's risk of loss with respect to other positions in its
portfolio may constitute "straddles," which are subject to tax rules that may
cause deferral of Portfolio losses, adjustments in the holding period of
Portfolio securities, and conversion of short-term capital losses into long-
term capital losses. The Portfolio may have to limit its activities in options
and futures contracts in order to enable the Fund to maintain its RIC status.
Any loss realized upon the sale or exchange of shares of the Fund with a
tax holding period of 6 months or less will be disallowed to the extent the
shareholder has received tax-exempt interest with respect to such shares and,
to the extent the loss exceeds the disallowed amount, will be treated as a
long-term capital loss to the extent of any distribution treated as net long-
term capital gains with respect to such shares. In addition, a loss realized
on a redemption or other disposition of Fund shares may be disallowed to the
extent the shareholder acquired other Fund shares (whether through the
reinvestment of distributions or otherwise) within the period beginning 30
days before the redemption of the loss shares and ending 30 days after such
date.
Amounts paid by the Fund to individuals and certain other shareholders who
have not provided the Fund with their correct taxpayer identification number
("TIN") and certain certifications required by the Internal Revenue Service
(the "IRS"), as well as shareholders with respect to whom the Fund has
received notification from the IRS or a broker, may be subject to "backup"
withholding of federal income tax arising from the Fund's taxable dividends
and distributions as well as the proceeds of redemption transactions
(including repurchases and exchanges), at a rate of 31%. An individual's TIN
is generally his or her social security number.
Non-resident alien individuals, foreign corporations and certain other
foreign entities generally will be subject to a U.S. withholding tax at a rate
of 30% on the Fund's distributions from its ordinary income and the excess of
its net short-term capital gain over its net long-term capital loss, unless
the tax is reduced or eliminated by an applicable tax convention.
Distributions from the excess of the Fund's net long-term capital gain over
its net short-term capital loss received by such shareholders and any gain
from the sale or other disposition of shares of the Fund generally will not be
subject to U.S. federal income taxation, provided that non-resident alien
status has been certified by the shareholder. Different U.S. tax consequences
may arise if (i) the shareholder is engaged in a trade or business in the
United States, (ii) the shareholder is present in the United States for a
sufficient period of time during a taxable year to be treated as a U.S.
resident (generally 180 days or more); or (iii) the shareholder fails to
provide any required certifications regarding its status as a non-resident
alien investor. Foreign shareholders should consult their tax advisers
regarding the U.S. and foreign tax consequences of an investment in the Fund.
The foregoing discussion does not address the special tax rules applicable
to certain classes of investors, such as tax-exempt entities, insurance
companies and financial institutions. Shareholders should consult their own
tax advisers with respect to special tax rules that may apply in their
particular situations, as well as the state, local, and, where applicable,
foreign tax consequences of investing in the Fund.
STATE, LOCAL AND FOREIGN TAXES
The exemption of interest income for federal income tax purposes does not
necessarily result in exemption under the income or other tax laws of any
state or local taxing authority. Shareholders of the Fund may be exempt from
state and local taxes on distributions of tax-exempt interest income derived
from obligations of the state and/or municipalities of the state in which they
are resident, but taxable generally on income derived from obligations of
other jurisdictions. The Fund will report annually to shareholders, with
respect to net tax exempt income earned, the percentage representing the
proportionate ratio of such income earned in each state.
PORTFOLIO SECURITY TRANSACTIONS
Decisions concerning the execution of portfolio security transactions,
including the selection of the market and the executing firm, are made by BMR.
BMR is also responsible for the execution of transactions for all other
accounts managed by it. BMR places the portfolio security transactions of the
Portfolio and of all other accounts managed by it for execution with many
firms. BMR uses its best efforts to obtain execution of portfolio security
transactions at prices which are advantageous to the Portfolio and at
reasonably competitive spreads or (when a disclosed commission is being
charged) at reasonably competitive commission rates. In seeking such
execution, BMR will use its best judgment in evaluating the terms of a
transaction, and will give consideration to various relevant factors,
including without limitation the full range and quality of the executing
firm's services, the value of the brokerage and research services provided,
the responsiveness of the firm to BMR, the size and type of the transaction,
the nature and character of the market for the security, the confidentiality,
speed and certainty of effective execution required for the transaction, the
general execution and operational capabilities of the executing firm, the
reputation, reliability, experience and financial condition of the firm, the
value and quality of the services rendered by the firm in this and other
transactions, and the reasonableness of the spread or commission, if any.
Municipal obligations, including state obligations, purchased and sold by the
Portfolio are generally traded in the over-the-counter market on a net basis
(i.e., without commission) through broker-dealers and banks acting for their
own account rather than as brokers, or otherwise involve transactions directly
with the issuer of such obligations. Such firms attempt to profit from such
transactions by buying at the bid price and selling at the higher asked price
of the market for such obligations, and the difference between the bid and
asked price is customarily referred to as the spread. The Portfolio may also
purchase municipal obligations from underwriters, and dealers in fixed-price
offerings, the cost of which may include undisclosed fees and concessions to
the underwriters. On occasion it may be necessary or appropriate to purchase
or sell a security through a broker on an agency basis, in which case the
Portfolio will incur a brokerage commission. Although spreads or commissions
on portfolio security transactions will, in the judgment of BMR, be reasonable
in relation to the value of the services provided, spreads or commissions
exceeding those which another firm might charge may be paid to firms who were
selected to execute transactions on behalf of the Portfolio and BMR's other
clients for providing brokerage and research services to BMR.
As authorized in Section 28(e) of the Securities Exchange Act of 1934, a
broker or dealer who executes a portfolio transaction on behalf of the
Portfolio may receive a commission which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if BMR determines in good faith that such compensation was
reasonable in relation to the value of the brokerage and research services
provided. This determination may be made either on the basis of that
particular transaction or on the basis of overall responsibilities which BMR
and its affiliates have for accounts over which they exercise investment
discretion. In making any such determination, BMR will not attempt to place a
specific dollar value on the brokerage and research services provided or to
determine what portion of the commission should be related to such services.
Brokerage and research services may include advice as to the value of
securities, the advisability of investing in, purchasing, or selling
securities, and the availability of securities or purchasers or sellers of
securities; furnishing analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy and the
performance of accounts; effecting securities transactions and performing
functions incidental thereto (such as clearance and settlement); and the
"Research Services" referred to in the next paragraph.
It is a common practice of the investment advisory industry and of the
advisers of investment companies, institutions and other investors to receive
research, analytical, statistical and quotation services, data, information
and other services, products and materials which assist such advisers in the
performance of their investment responsibilities ("Research Services") from
broker-dealer firms which execute portfolio transactions for the clients of
such advisers and from third parties with which such broker-dealers have
arrangements. Consistent with this practice, BMR receives Research Services
from many broker-dealer firms with which BMR places the Portfolio transactions
and from third parties with which these broker-dealers have arrangements.
These Research Services include such matters as general economic, political,
business and market information, industry and company reviews, evaluations of
securities and portfolio strategies and transactions, proxy voting data and
analysis services, technical analysis of various aspects of the securities
market, recommendations as to the purchase and sale of securities and other
portfolio transactions, financial, industry and trade publications, news and
information services, pricing and quotation equipment and services, and
research oriented computer hardware, software, data bases and services. Any
particular Research Service obtained through a broker-dealer may be used by
BMR in connection with client accounts other than those accounts which pay
commissions to such broker-dealer. Any such Research Service may be broadly
useful and of value to BMR in rendering investment advisory services to all or
a significant portion of its clients, or may be relevant and useful for the
management of only one client's account or of a few clients' accounts, or may
be useful for the management of merely a segment of certain clients' accounts,
regardless of whether any such account or accounts paid commissions to the
broker-dealer through which such Research Service was obtained. The advisory
fee paid by the Portfolio is not reduced because BMR receives such Research
Services. BMR evaluates the nature and quality of the various Research
Services obtained through broker-dealer firms and attempts to allocate
sufficient portfolio security transactions to such firms to ensure the
continued receipt of Research Services which BMR believes are useful or of
value to it in rendering investment advisory services to its clients.
The Portfolio and BMR may also receive Research Services from underwriters
and dealers in fixed-price offerings, which Research Services are reviewed and
evaluated by BMR in connection with its investment responsibilities. The
investment companies sponsored by BMR or Eaton Vance may allocate trades in
such offerings to acquire information relating to the performance, fees and
expenses of such companies and other mutual funds, which information is used
by the Trustees of such companies to fulfill their responsibility to oversee
the quality of the services provided by various entities, including BMR, to
such companies. Such companies may also pay cash for such information.
Subject to the requirement that BMR shall use its best efforts to seek and
execute portfolio security transactions at advantageous prices and at
reasonably competitive spreads or commission rates, BMR is authorized to
consider as a factor in the selection of any broker-dealer firm with whom
portfolio orders may be placed the fact that such firm has sold or is selling
shares of the Fund or of other investment companies sponsored by BMR or Eaton
Vance. This policy is not inconsistent with a rule of the NASD, which rule
provides that no firm which is a member of the NASD shall favor or disfavor
the distribution of shares of any particular investment company or group of
investment companies on the basis of brokerage commissions received or
expected by such firm from any source.
Municipal obligations considered as investments for the Portfolio may also
be appropriate for other investment accounts managed by BMR or its affiliates.
Whenever decisions are made to buy or sell securities by the Portfolio and one
or more of such other accounts simultaneously, BMR will allocate the security
transactions (including "hot" issues) in a manner which it believes to be
equitable under the circumstances. As a result of such allocations, there may
be instances where the Portfolio will not participate in a transaction that is
allocated among other accounts. If an aggregated order cannot be filled
completely, allocations will generally be made on a pro rata basis. An order
may not be allocated on a pro rata basis where, for example: (i) consideration
is given to portfolio managers who have been instrumental in developing or
negotiating a particular investment; (ii) consideration is given to an account
with specialized invesment policies that coincide with the particulars of a
specific investment; (iii) pro rata allocation would result in odd-lot or de
minimis amounts being allocated to a portfolio or other client; or (iv) where
BMR reasonably determines that departure from a pro rata allocation is
advisable. While these aggregation and allocation policies could have a
detrimental effect on the price or amount of the securities available to the
Portfolio from time to time, it is the opinion of the Trustees of the Trust
and the Portfolio that the benefits from the BMR organization outweigh any
disadvantage that may arise from exposure to simultaneous transactions.
For the fiscal years ended March 31, 1999, 1998 and 1997, the Portfolio
paid brokerage commissions of $8,942, $14,673 and $61,353, respectively, on
portfolio security transactions aggregating approximately $184,846,877,
$242,021,306 and $477,279,677, respectively, to firms which provided some
research services to BMR or its affiliates (although many of such firms may
have been selected in any particular transaction primarily because of their
execution capabilities).
FINANCIAL STATEMENTS
The audited financial statements of and independent auditors' reports for,
the Fund and the Portfolio, appear in the Fund's most recent annual report to
shareholders, which is incorporated by reference into this SAI. A copy of the
Fund's annual report accompanies this SAI. Consistent with applicable law,
duplicate mailings of shareholder reports and certain other Fund information
to shareholders residing at the same address may be eliminated.
Registrant incorporates by reference the audited financial information for
the Fund and the Portfolio for the fiscal year ended March 31, 1999, as
previously filed electronically with the Commission (Accession No.
00001047469-99-022825).
<PAGE>
APPENDIX A
CLASS A FEES, PERFORMANCE AND OWNERSHIP
SERVICE FEES
During the fiscal year ended March 31, 1999, Class A made service fee
payments under the Plan aggregating $97,308, of which $86,436 was paid to
investment dealers and the balance of which was retained by the principal
underwriter.
PRINCIPAL UNDERWRITER
The total sales charges paid in connection with the sales of Class A
shares during the fiscal year ended March 31, 1999 was $60,134, of which
$2,943 was received by the principal underwriter. For the fiscal year ended
March 31, 1999, investment dealers received $57,191 from the total sales
charges.
The Trust has authorized the principal underwriter to act as its agent in
repurchasing shares at the rate of $2.50 for each repurchase transaction
handled by the principal underwriter. For the fiscal year ended March 31,
1999, Class A paid the principal underwriter $897.50 for repurchase
transactions handled by it.
PERFORMANCE INFORMATION
The table below indicates the cumulative and average total return on a
hypothetical investment in shares of $1,000. Total return for the period prior
to June 27, 1996 reflects the total return of Class B adjusted to reflect the
Class A sales charge. The Class B total return has not been adjusted to
reflect certain other expenses (such as distribution and/or service fees). If
such adjustments were made, the Class A total return would be different. The
"Value of Initial Investment" reflects the deduction of the maximum sales
charge of 2.25%. Past performance is no guarantee of future results.
Investment return and principal value will fluctuate; shares, when redeemed,
may be worth more or less than their original cost.
<TABLE>
VALUE OF A $1,000 INVESTMENT
<CAPTION>
TOTAL RETURN TOTAL RETURN
EXCLUDING MAXIMUM INCLUDING MAXIMUM
VALUE OF VALUE OF SALES CHARGE SALES CHARGE
INVESTMENT INVESTMENT INITIAL INVESTMENT ---------------------------- ---------------------------
PERIOD* DATE INVESTMENT ON 3/31/99 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
- -------------------------- ------------- -------------- ------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Life of Fund 5/22/92 $977.52 $1,414.50 44.70% 5.53% 41.45% 5.18%
5 Years Ended 3/31/99 3/31/94 $977.86 $1,270.91 29.97% 5.38% 27.09% 4.91%
1 Year Ended 3/31/99 3/31/98 $977.81 $1,015.88 3.89% 3.89% 1.59% 1.59%
- ----------
* Class A shares were established June 27, 1996.
</TABLE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As at July 1, 1999, the Trustees and officers of the Trust, as a group,
owned in the aggregate less than 1% of the outstanding Class A shares of the
Fund. As of July 1, 1999, Merrill Lynch Pierce Fenner & Smith, Jacksonville,
FL and Mars & Co., Boston, MA were the record owners of approximately 19% and
9.3%, respectively, of the outstanding Class A shares which are held on behalf
of their customers who are the beneficial owners of such shares, and as to
which they have voting power under certain limited circumstances. To the
knowledge of the Trust, no other person owned of record or beneficially 5% or
more the Fund's outstanding Class A shares as of such date.
<PAGE>
APPENDIX B
CLASS B FEES, PERFORMANCE AND OWNERSHIP
DISTRIBUTION PLAN
During the fiscal year ended March 31, 1999, the principal underwriter
paid to investment dealers sales commissions of $28,055 on sales of Class B
shares. During the same period, the Fund made distribution payments to the
principal underwriter under the Distribution Plan aggregating $54,772 and the
principal underwriter received approximately $20,000 in CDSCs imposed on early
redeeming shareholders. These distribution payments and CDSC payments reduced
uncovered distribution charges under the Plan. As at March 31 1999, the
outstanding uncovered distribution charges of the principal underwriter
calculated under the Plan amounted to approximately $352,000 (which amount was
equivalent to 6.4% of the net assets attributable to Class B on such day).
During the fiscal year ended March 31, 1999, Class B made service fee payments
to the principal underwriter and investment dealers aggregating $12,171 of
which $12,156 was paid to investment dealers and the balance of which was
retained by the principal underwriter.
PRINCIPAL UNDERWRITER
The Trust has authorized the principal underwriter to act as its agent in
repurchasing shares at the rate of $2.50 for each repurchase transaction
handled by the principal underwriter. For the fiscal year ended March 31,
1999, the Fund paid the principal underwriter $190.00 for repurchase
transactions handled by the principal underwriter.
PERFORMANCE INFORMATION
The table below indicates the cumulative and average annual total return
on a hypothetical investment of $1,000 in Class B shares for the periods shown
in the table. Past performance is no guarantee of future results. Investment
return and principal value will fluctuate and shares, when redeemed, may be
worth more or less than their original cost.
<TABLE>
VALUE OF A $1,000 INVESTMENT
<CAPTION>
VALUE OF VALUE OF
INVEST- INVEST-
MENT BEFORE MENT AFTER TOTAL RETURN BEFORE TOTAL RETURN AFTER
DEDUCTING THE DEDUCTING THE DEDUCTING THE CDSC DEDUCTING THE CDSC
INVESTMENT INVESTMENT AMOUNT OF CDSC ON CDSC ON -------------------------- --------------------------
PERIOD DATE INVESTMENT 3/31/99 3/31/99 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
- -------------- ------------ ----------- --------------- --------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Life of the
Fund 5/22/92 $1,000 $1,419.96 $1,419.96 42.00% 5.24% 42.00% 5.24%
5 Years Ended
3/31/99 3/31/94 $1,000 $1,275.38 $1,275.38 27.54% 4.99% 27.54% 4.99%
1 Year Ended
3/31/99 3/31/98 $1,000 $1,032.94 $1,003.20 3.29% 3.29% 0.32% 0.32%
</TABLE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As at July 1, 1999, the Trustees and officers of the Trust, as a group,
owned in the aggregate less than 1% of the outstanding Class B shares of the
Fund. As of July 1, 1999, Merrill Lynch Pierce Fenner & Smith, Jacksonville,
FL, and CIBC World Markets Corp., New York, NY were the record owners of
approximately 1.7% and 8.7%, respectively, of the outstanding Class B shares
which are held on behalf of their customers who are the beneficial owners of
such shares, and as to which they have voting power under certain limited
circumstances. To the knowledge of the Trust, no other person owned of record
or beneficially 5% or more the Fund's outstanding Class B shares as of such
date.
<PAGE>
APPENDIX C
CLASS C FEES, PERFORMANCE AND OWNERSHIP
DISTRIBUTION AND SERVICE FEES
During the fiscal year ended March 31, 1999, the principal underwriter
paid to investment dealers sales commissions of $68,717 on sales of Class C
shares. During the same period, the Fund made distribution payments to the
principal underwriter under the Distribution Plan aggregating $72,138 and the
principal underwriter received approximately $1,000 in CDSCs imposed on early
redeeming shareholders. These distribution payments and CDSC payments reduced
uncovered distribution charges under the Plan. As at March 31, 1999, the
outstanding uncovered distribution charges of the principal underwriter
calculated under the Plan amounted to approximately $4,502,000 (which amount
was equivalent to 40% of the net assets attributable to Class C on such day).
During the fiscal year ended March 31, 1999, Class C made service fee payments
to the principal underwriter and investment dealers aggregating $20,422 of
which $11,366 was paid to investment dealers and the balance of which was
retained by the principal underwriter.
PRINCIPAL UNDERWRITER
The Trust has authorized the principal underwriter to act as its agent in
repurchasing shares at the rate of $2.50 for each repurchase transaction
handled by the principal underwriter. For the fiscal year ended March 31,
1999, Class C paid the principal underwriter $150.00 for repurchase
transactions handled by it.
PERFORMANCE INFORMATION
The table below indicates the cumulative and average annual total return
on a hypothetical investment in shares of $1,000. Total return for the period
prior to April 1, 1998 reflects the total return of the predecessor to Class
C. Total return prior to December 8, 1993 reflects the total return of Class
B, adjusted to reflect the Class C sales charge. The Class B total return has
not been adjusted to reflect certain other expenses (such as distribution and/
or service fees). If such adjustments were made, the Class C total return
would be different. Past performance is no guarantee of future results.
Investment return and principal value will fluctuate; shares, when redeemed,
may be worth more or less than their original cost.
<TABLE>
VALUE OF A $1,000 INVESTMENT
<CAPTION>
VALUE OF VALUE OF
INVESTMENT INVESTMENT TOTAL RETURN BEFORE TOTAL RETURN AFTER
BEFORE AFTER DEDUCTING DEDUCTING
DEDUCTING DEDUCTING THE CDSC THE CDSC
INVESTMENT INVESTMENT AMOUNT OF THE CDSC THE CDSC -------------------------- --------------------------
PERIOD* DATE INVESTMENT ON 3/31/99 ON 3/31/99 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
- -------------- ------------ ------------ --------------- -------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Life of Fund 5/22/92 $1,000 $1,400.34 $1,400.34 40.03% 5.03% 40.03% 5.03%
5 Years Ended
3/31/99 3/31/94 $1,000 $1,260.85 $1,260.85 26.08% 4.74% 26.08% 4.74%
1 Year Ended
3/31/99 3/31/98 $1,000 $1,032.36 $1,022.46 3.24% 3.24% 2.25% 2.25%
- ------------
* Predecessor Fund commenced operations on December 8, 1993.
</TABLE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As at July 1, 1999, the Trustees and officers of the Trust, as a group,
owned in the aggregate less than 1% of the outstanding Class C shares of the
Fund. As of July 1, 1999, Merrill Lynch Pierce Fenner & Smith, Jacksonville,
FL and Donaldson Lufkin Jenrette Securities Corporation, Jersey City, NJ were
the record owners of approximately 40.0% and 8.1%, respectively, of the
outstanding Class C shares which are held on behalf of their customers who are
the beneficial owners of such shares, and as to which they have voting power
under certain limited circumstances. To the knowledge of the Trust, no other
person owned of record or beneficially 5% or more the Fund's outstanding Class
C shares as of such date.
<PAGE>
APPENDIX D: TAX EQUIVALENT YIELD TABLE
The table below gives the approximate yield a taxable security must earn
at various income brackets to produce after-tax yields to those of tax-exempt
bonds yielding from 4% to 7% under the regular federal income tax laws and tax
rates applicable to 1999.
<TABLE>
<CAPTION>
MARGINAL
SINGLE RETURN JOINT RETURN INCOME TAX-EXEMPT YIELD
- --------------------- ------------------- TAX --------------------------------------------------------------------------
(TAXABLE INCOME)* BRACKET 4% 4.5% 5% 5.5% 6% 6.5% 7%
- ------------------------------------------ ----------- --------------------------------------------------------------------------
Equivalent Taxable Yield
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Up to $ 25,750 Up to $ 43,050 15.00% 4.71% 5.29% 5.88% 6.47% 7.06% 7.65% 8.24%
$ 25,751-$ 62,450 $ 43,051-$104,050 28.00 5.56 6.25 6.94 7.64 8.33 9.03 9.72
$ 62,451-$130,250 $104,051-$158,550 31.00 5.80 6.52 7.25 7.97 8.70 9.42 10.14
$130,251-$283,150 $158,551-$283,150 36.00 6.25 7.03 7.81 8.59 9.38 10.16 10.94
Over $283,150 Over $283,150 39.60 6.62 7.45 8.28 9.11 9.93 10.76 11.59
- ------------------------------------------ ----------- --------------------------------------------------------------------------
* Net amount subject to federal personal income tax after deductions and exemptions.
</TABLE>
Note: The above indicated federal income tax brackets do not take into
account the effect of a reduction in the deductibility of itemized deductions
for taxpayers with adjusted gross income in excess of $126,600. The tax
brackets also do not show the effects of phase out of personal exemptions for
single filers with adjusted gross incomes in excess of $126,600 and joint
filers with adjusted gross income in excess of $189,950. The effective tax
brackets and equivalent taxable yields of such taxpayers will be higher than
those indicated above.
Yields shown are for illustration purposes only and are not meant to represent
the Fund's actual yield. No assurance can be given that the Fund will achieve
any specific tax exempt yield. While it is expected that the Portfolio will
invest principally in obligations, the interest from which is exempt from the
regular federal income tax, other income received by the Portfolio and
allocated to the Fund may be taxable. The table does not take into account
state or local taxes, if any, payable on Fund distributions. It should also be
noted that the interest earned on certain "private activity bonds" issued
after August 7, 1986, while exempt from the regular federal income tax, is
treated as a tax preference item which could subject the recipient to the
federal alternative minimum tax. The illustrations assume that the federal
alternative minimum tax is not applicable and do not take into account any tax
credits that may be available.
The information set forth above is as of the date of this SAI. Subsequent tax
law changes could result in prospective or retroactive changes in the tax
brackets, tax rates, and tax equivalent yields set forth above. Investors
should consult their tax adviser for additional information.
<PAGE>
APPENDIX E: RATINGS
DESCRIPTION OF SECURITIES RATINGS+
MOODY'S INVESTORS SERVICE, INC.
MUNICIPAL BONDS
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risk appear somewhat larger than the Aaa
securities.
A: Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper-medium-grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may
be present which suggest a susceptibility to impairment sometime in the
future.
Baa: Bonds which are rated Baa are considered as medium-grade obligations
(i.e., they are neither highly protected nor poorly secured). Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate, and thereby not well safeguarded
during other good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal
or interest.
Ca: Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
- ----------
+ The ratings indicated herein are believed to be the most recent ratings
available at the date of this SAI for the securities listed. Ratings are
generally given to securities at the time of issuance. While the rating
agencies may from time to time revise such ratings, they undertake no
obligation to do so, and the ratings indicated do not necessarily represent
ratings which would be given to these securities on the date of the
Portfolio's fiscal year end.
ABSENCE OF RATING: Where no rating has been assigned or where a rating has
been suspended or withdrawn, it may be for reasons unrelated to the quality of
the issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities or companies that
are not rated as a matter of policy.
3. There is a lack of essential data pertaining to the issue or issuer.
4. The issue was privately placed, in which case the rating is not
published in Moody's publications.
Suspension or withdrawal may occur if new and material circumstances arise,
the effects of which preclude satisfactory analysis; if there is no longer
available reasonable up-to-date data to permit a judgment to be formed; if a
bond is called for redemption; or for other reasons.
NOTE: Moody's applies numerical modifiers, 1, 2, and 3 in each generic rating
classification from Aa through B. The modifier 1 indicates that the security
ranks in the higher end of its generic rating category; the modifier 2
indicates a mid-range ranking; and the modifier 3 indicates that the issue
ranks in the lower end of its generic rating category.
MUNICIPAL SHORT-TERM OBLIGATIONS
RATINGS: Moody's ratings for state and municipal short-term obligations will
be designated Moody's Investment Grade or (MIG). Such rating recognizes the
differences between short-term credit risk and long-term risk. Factors
effecting the liquidity of the borrower and short term cyclical elements are
critical in short-term ratings, while other factors of major importance in
bond risk, long term secular trends for example, may be less important over
the short run.
A short term rating may also be assigned on an issue having a demand feature,
variable rate demand obligation (VRDO). Such ratings will be designated as
VMIG1, SG or if the demand feature is not rated, NR. A short-term rating on
issues with demand features are differentiated by the use of the VMIG1 symbol
to reflect such characteristics as payment upon periodic demand rather than
fixed maturity dates and payment relying on external liquidity. Additionally,
investors should be alert to the fact that the source of payment may be
limited to the external liquidity with no or limited legal recourse to the
issuer in the event the demand is not met.
STANDARD & POOR'S RATINGS GROUP
INVESTMENT GRADE
AAA: Debt rated AAA has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
AA: Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree.
A: Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB: Debt rated BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
SPECULATIVE GRADE
Debt rated BB, B, CCC, CC, and C is regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and repay
principal. BB indicates the least degree of speculation and C the highest.
While such debt will likely have some quality and protective characteristics,
these are outweighed by large uncertainties or major risk exposures to adverse
conditions.
BB: Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure
to adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB- rating.
B: Debt rated B has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness
to pay interest and repay principal. The B rating category is also used for
debt subordinated to senior debt that is assigned an actual or implied BB or
BB- rating.
CCC: Debt rated CCC has a currently identifiable vulnerability to default, and
is dependent upon favorable business, financial, and economic conditions to
meet timely payment of interest and repayment of principal. In the event of
adverse business, financial, or economic conditions, it is not likely to have
the capacity to pay interest and repay principal. The CCC rating category is
also used for debt subordinated to senior debt that is assigned an actual or
implied B or B- rating.
CC: The rating CC is typically applied to debt subordinated to senior debt
that is assigned an actual or implied CCC debt rating.
C: The rating C is typically applied to debt subordinated to senior debt which
is assigned an actual or implied CCC- debt rating. The C rating may be used to
cover a situation where a bankruptcy petition has been filed, but debt service
payments are continued.
C1: The rating C1 is reserved for income bonds on which no interest is being
paid.
D: Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if
the applicable grace period has not expired, unless S&P believes that such
payments will be made during such grace period. The D rating also will be used
upon the filing of a bankruptcy petition if debt service payments are
jeopardized.
PLUS (+) OR MINUS (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
p: The letter "p" indicates that the rating is provisional. A provisional
rating assumes the successful completion of the project being financed by the
debt being rated and indicates that payment of debt service requirements is
largely or entirely dependent upon the successful and timely completion of the
project. This rating, however, while addressing credit quality subsequent to
completion of the project, makes no comment on the likelihood of, or the risk
of default upon failure of such completion. The investor should exercise his
own judgment with respect to such likelihood and risk.
L: The letter "L" indicates that the rating pertains to the principal amount
of those bonds to the extent that the underlying deposit collateral is insured
by the Federal Deposit Insurance Corp. and interest is adequately
collateralized. In the case of certificates of deposit, the letter "L"
indicates that the deposit, combined with other deposits being held in the
same right and capacity, will be honored for principal and accrued pre-default
interest up to the federal insurance limits within 30 days after closing of
the insured institution or, in the event that the deposit is assumed by a
successor insured institution, upon maturity.
NR: Indicates no rating has been requested, that there is insufficient
information on which to base a rating, or that S&P does not rate a particular
type of obligation as a matter of policy.
MUNICIPAL NOTES
S&P note ratings reflect the liquidity concerns and market access risks unique
to notes. Notes due in 3 years or less will likely receive a note rating.
Notes maturing beyond 3 years will most likely receive a long-term debt
rating. The following criteria will be used in making that assessment:
-- Amortization schedule (the larger the final maturity relative to other
maturities the more likely it will be treated as a note).
-- Sources of payment (the more dependent the issue is on the market for
its refinancing, the more likely it will be treated as a note).
Note rating symbols are as follows:
SP-1: Strong capacity to pay principal and interest. Those issues
determined to possess very strong characteristics will be given a plus(+)
designation.
SP-2: Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term of
the notes.
SP-3: Speculative capacity to pay principal and interest.
FITCH IBCA
INVESTMENT GRADE BOND RATINGS
AAA: Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.
AA: Bonds considered to be investment grade and of very high credit quality.
The obligor's ability to pay interest and repay principal is very strong,
although not quite as strong as bonds rated "AAA". Because bonds rated in the
"AAA" and "AA" categories are not significantly vulnerable to foreseeable
future developments, short-term debt of these issuers is generally rated
"F-1+".
A: Bonds considered to be investment grade and of high credit quality. The
obligors ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions
and circumstances than bonds with higher ratings.
BBB: Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have adverse impact on these bonds,
and therefore, impair timely payment. The likelihood that the ratings of these
bonds will fall below investment grade is higher than for bonds with higher
ratings.
HIGH YIELD BOND RATINGS
BB: Bonds are considered speculative. The obligor's ability to pay interest
and repay principal may be affected over time by adverse economic changes.
However, business and financial alternatives can be identified that could
assist the obligor in satisfying its debt service requirements.
B: Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued
timely payment of principal and interest reflects the obligor's limited margin
of safety and the need for reasonable business and economic activity
throughout the life of the issue.
CCC: Bonds have certain identifiable characteristics which, if not remedied,
may lead to default. The ability to meet obligations requires an advantageous
business and economic environment.
CC: Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.
C: Bonds are in imminent default in payment of interest or principal.
DDD, DD, AND D: Bonds are in default on interest and/or principal payments.
Such bonds are extremely speculative and should be valued on the basis of
their ultimate recovery value in liquidation or reorganization of the obligor.
"DDD" represents the highest potential for recovery on these bonds, and "D"
represents the lowest potential for recovery.
PLUS (+) OR MINUS (-): The ratings from AA to C may be modified by the
addition of a plus or minus sign to indicate the relative position of a credit
within the rating category.
NR: Indicates that Fitch does not rate the specific issue.
CONDITIONAL: A conditional rating is premised on the successful completion of
a project or the occurrence of a specific event.
INVESTMENT GRADE SHORT-TERM RATINGS
Fitch's short-term ratings apply to debt obligations that are payable on
demand or have original maturities of generally up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal
and investment notes.
F-1+: Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1: Very Stong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
"F-1+".
F-2: Good Credit Quality. Issues carrying this rating have a satisfactory
degree of assurance for timely payment, but the margin of safety is not as
great as the "F-1+" and "F-1" categories.
F-3: Fair Credit Quality. Issues carrying this rating have characteristics
suggesting that the degree of assurance for timely payment is adequate,
however, near-term adverse change could cause these securities to be rated
below investment grade.
* * * * * * * *
NOTES: Bonds which are unrated expose the investor to risks with respect to
capacity to pay interest or repay principal which are similar to the risks of
lower-rated speculative bonds. The Portfolio is dependent on the Investment
Adviser's judgment, analysis and experience in the evaluation of such bonds.
Investors should note that the assignment of a rating to a bond by a
rating service may not reflect the effect of recent developments on the
issuer's ability to make interest and principal payments.
<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
[PHOTO] 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
Thomas J. Fetter 31, 1998, and the reinvestment of $0.519 in dividends exempt
President 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
<S> <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/5-99
<PAGE>
[LOGO]
MUTUAL FUNDS FOR PEOPLE WHO PAY TAXES
ANNUAL REPORT MARCH 31, 1999
[GRAPHIC - HIGHWAY]
EATON VANCE LIMITED
MATURITY
MUNICIPALS FUNDS
[GRAPHIC - BRIDGE]
[GRAPHIC - EDUCATION-WALL]
CALIFORNIA
CONNECTICUT
FLORIDA
MASSACHUSETTS
MICHIGAN
NEW JERSEY
NEW YORK
OHIO
PENNSYLVANIA
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
LETTER TO SHAREHOLDERS
[PHOTO]
Thomas J. Fetter
President
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. However, in the fourth quarter of 1998, the
economy proved far more resilient than expected. Gross Domestic Product (GDP)
grew 6.1%, the fastest quarterly pace in nearly 15 years. In the first
quarter of 1999, GDP surged 4.5%. Meanwhile, as energy prices -- a key
ingredient of inflation -- edged higher, the bond market gave up some of its
earlier gains.
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. For the year ended March 31, 1999, the
Lehman Brothers 7-Year Municipal Bond Index -- a widely recognized, unmanaged
index of intermediate-term municipal bonds -- posted a return of 5.9%.(1)
MUNICIPAL BONDS REMAIN AMONG THE MOST UNDERVALUED ASSET CLASSES...
At the end of 1998, municipal bonds represented one of the most undervalued
asset classes in the financial markets. Historically, intermediate-maturity
municipal bond yields have averaged around 75% of Treasury bond yields.
However, in the flight to Treasuries that characterized the bond market in
late 1998, that ratio rose significantly. By March 31, 1999, those ratios had
narrowed as the intermediate-term market outperformed in the first quarter of
1999. They continue to represent an excellent bargain, especially considering
their tax-exempt status.
(1)It is not possible to invest directly in an Index.
Intermediate-term municipal bonds yield 82% of Treasury yields
5-Year AAA-rated General Obligation (GO) Bonds* 3.90%
Taxable equivalent yield in 36% tax bracket 6.09%
5-Year Treasury bond 4.75%
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 a Fund's yield.
Statistics as of March 31, 1999.
Past performance is no guarantee of future results.
Source: Bloomberg L.P.
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 10, 1999
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.
2
<PAGE>
EATON VANCE CALIFORNIA LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
INVESTMENT UPDATE
[PHOTO]
Cynthia J. Clemson
Portfolio Manager
THE ECONOMY
- -------------------------------------------------------------------------------
- - The California economy enjoyed 3% job growth in 1998, with southern
California experiencing especially strong momentum. Orange and Los Angeles
Counties led the way, with strong growth in non-durable manufacturing. The
state's unemployment rate was 5.8% in March, down from 6.0% a year earlier.
- - The construction sector remained a primary source of new jobs. Reversing
the out-migration seen earlier in the decade, California registered a 1.5%
rise in population in 1998. The increased demand for housing resulted in an
average of 11,500 monthly residential construction permits, a 25% rise from
a year ago.
- - The Los Angeles area has witnessed a surge in the financial services
sector. Job gains in brokerage, finance, and real estate management have
more than offset job losses in commercial banking.
THE FUND
- -------------------------------------------------------------------------------
- - During the year ended March 31, 1999, the Fund's Class A and Class B shares
had total returns of 4.6% and 4.0%, respectively.(1) For Class A and Class B,
these returns resulted from a rise in net asset value (NAV) per share to
$10.35 on March 31, 1999 from $10.33 on March 31, 1998, and the reinvestment
of $0.443 and $0.387 per share, respectively, in tax-free income.(2)
- - Based on the Fund's most recent dividends and NAVs on March 31, 1999 of $10.35
per share for Class A and Class B, the distribution rates were 4.40% and
3.67%, respectively.(3)
- - The SEC 30-day yields for Class A and B shares at March 31 were 3.24% and
2.56%, respectively.(4)
MANAGEMENT UPDATE
- -------------------------------------------------------------------------------
- - While continuing its "barbell" strategy, management restructured the
Portfolio somewhat during the year. A portion of the Portfolio was
dedicated to higher-coupon issues while another portion focused on
higher-quality issues.
- - The Portfolio's component of non-rated bonds proved a major advantage
during the past year. Non-rated issues such as Capistrano United School
District and Brentwood Infrastructure Authority provided excellent income
in a relatively flat interest rate environment.
- - Management continued its efforts to upgrade the Portfolio's call protection.
The Portfolio sold bonds callable before 2005 in favor of high quality,
non-callable bonds and bonds with more attractive call characteristics.
YOUR INVESTMENT AT WORK [GRAPHIC]
- -------------------------------------------------------------------------------
Brentwood, CA
Infrastructure Financing Authority
- - These special tax revenue bonds were issued in 1999, with debt service to be
paid by assessments on property within five Brentwood Assessment Districts.
- - The proceeds of the bonds were used to finance District infrastructure
improvements, including water distribution, wastewater systems, flood
control facilities, drainage systems and roadways.
- - The bonds are an example of the Portfolio's efforts to find attractive
opportunities among non-rated issues.
- -------------------------------------------------------------------------------
(1) These returns do not include the 2.25% maximum sales charge for Class A
shares or the applicable contingent deferred sales charges (CDSC) for
Class B shares. (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 by dividing the last distribution per
share (annualized) by the net asset value. (4) 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. (5) 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.
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, 1999
<TABLE>
<CAPTION>
Performance(5) Class A Class B
- -------------------------------------------------------------------------------
<S> <C> <C>
Average Annual Total Returns (at net asset value)
- -------------------------------------------------------------------------------
One Year 4.6% 4.0%
Five Years N.A. 4.7
Life of Fund+ 6.1 4.8
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- -------------------------------------------------------------------------------
One Year 2.2% 1.0%
Five Years N.A. 4.7
Life of Fund+ 5.2 4.8
</TABLE>
+Inception date: Class A: 6/27/96; Class B: 5/29/92
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EATON VANCE
CALIFORNIA LIMITED MATURITY MUNICIPALS 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>
5/31/92 $10,000 $10,000
6/30/92 $10,050 $10,159
7/31/92 $10,401 $10,462
8/31/92 $10,228 $10,354
9/30/92 $10,280 $10,438
10/31/92 $10,142 $10,368
11/30/92 $10,363 $10,522
12/31/92 $10,448 $10,608
1/31/92 $10,566 $10,763
2/28/93 $10,914 $11,093
3/31/93 $10,767 $10,947
4/30/93 $10,864 $11,015
5/31/93 $10,911 $11,048
6/30/93 $11,037 $11,250
7/31/93 $11,059 $11,252
8/31/93 $11,232 $11,451
9/30/93 $11,327 $11,577
10/31/93 $11,337 $11,607
11/30/93 $11,252 $11,505
12/31/93 $11,419 $11,716
1/31/94 $11,530 $11,840
2/28/94 $11,299 $11,583
3/31/94 $10,967 $11,274
4/30/94 $11,012 $11,356
5/31/94 $11,075 $11,413
6/30/94 $11,028 $11,392
7/31/94 $11,169 $11,553
8/31/94 $11,179 $11,613
9/30/94 $11,066 $11,502
10/31/94 $10,943 $11,387
11/30/94 $10,771 $11,221
12/31/94 $10,860 $11,391
1/31/95 $11,057 $11,604
2/28/95 $11,286 $11,866
3/31/95 $11,354 $11,989
4/30/95 $11,360 $12,021
5/31/95 $11,589 $12,341
6/30/95 $11,523 $12,330
7/31/95 $11,643 $12,487
8/31/95 $11,725 $12,634
9/30/95 $11,774 $12,683
10/31/95 $11,871 $12,793
11/30/95 $11,978 $12,934
12/31/95 $12,039 $13,003
1/31/96 $12,125 $13,129
2/28/96 $12,081 $13,084
3/31/96 $11,952 $12,956
4/30/96 $11,932 $12,932
5/31/96 $11,910 $12,913
6/30/96 $11,965 $13,012
7/31/96 $12,037 $13,120
8/31/96 $12,029 $13,127
9/30/96 $12,143 $13,246
10/31/96 $12,218 $13,388
11/30/96 $12,441 $13,612
12/31/96 $12,348 $13,570
1/31/97 $12,352 $13,619
2/28/97 $12,446 $13,732
3/31/97 $12,310 $13,554
4/30/97 $12,374 $13,624
5/31/97 $12,538 $13,795
6/30/97 $12,618 $13,927
7/31/97 $12,895 $14,249
8/31/97 $12,762 $14,149
9/30/97 $12,880 $14,298
10/31/97 $12,883 $14,383
11/30/97 $12,941 $14,434
12/31/97 $13,132 $14,610
1/31/98 $13,238 $14,763
2/28/98 $13,245 $14,777
3/31/98 $13,245 $14,777
4/30/98 $13,145 $14,691
5/31/98 $13,328 $14,907
6/30/98 $13,345 $14,949
7/31/98 $13,361 $14,999
8/31/98 $13,551 $15,227
9/30/98 $13,748 $15,423
10/31/98 $13,686 $15,445
11/30/98 $13,729 $15,487
12/31/98 $13,729 $15,520
1/31/99 $13,878 $15,747
2/28/99 $13,789 $15,657
3/31/99 $13,774 $15,652
</TABLE>
*Source: Tower Data Systems, Bethesda, MD. The chart compares the Fund's
total return with that of the Lehman Brothers 7-Year 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 7-Year
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 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 $11,728 on March
31, 1999; $11,464, including maximum 2.25% sales charge.
FEDERAL INCOME TAX INFORMATION ON DISTRIBUTIONS. For federal income tax
purposes, 99.10% of the total dividends paid by the Fund from net investment
income during the year ended March 31, 1999 is designated as an
exempt-interest dividend.
3
<PAGE>
EATON VANCE CONNECTICUT LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31,1999
INVESTMENT UPDATE
[PHOTO]
William H. Ahern
Portfolio Manager
THE ECONOMY
- -------------------------------------------------------------------------------
- - Connecticut has experienced strong economic growth in the past year,
registering a gain of 29,000 new jobs. For the seventh consecutive year, the
service sector dominated job creation, led by business services. The state's
unemployment rate fell to 3.1% in March from 3.8% a year earlier.
- - Connecticut's construction sector again produced strong employment gains.
With a boost from continued low interest rates, the state's strong economy
generated a record number of new housing permits, up 27.5% over 1997 levels.
- - Merchandise exports from Connecticut businesses expanded 4.2% in 1998,
reaching a new high of $8.1 billion for the year. The state's increase in
exports outpaced that of the nation and marked the continuation of a
decade-long uptrend in Connecticut exports.
THE FUND
- -------------------------------------------------------------------------------
- - During the year ended March 31, 1999, the Fund's Class A and Class B shares
had total returns of 4.5% and 3.9%, respectively.(1) For Class A and Class B,
these returns resulted from a rise in net asset value (NAV) per share to
$10.13 on March 31, 1999 from $10.11 on March 31, 1998, and the reinvestment
of $0.423 and $0.370 per share, respectively, in tax-free income.(2)
- - Based on the Fund's most recent dividends and NAVs on March 31, 1999 of $10.13
per share for Class A and Class B, the distribution rates were 4.36% and
3.65%, respectively.(3)
- - The SEC 30-day yields for Class A and B shares at March 31 were 2.10% and
1.42%, respectively.(4)
MANAGEMENT UPDATE
- -------------------------------------------------------------------------------
- - Escrowed bonds were the Portfolio's largest sector weighting at March 31.
Escrowed bonds are those that have been pre-refunded in advance of their call
date. Because they are backed by Treasury bonds, they are considered to be of
very high quality.
- - General obligations and insured(5) general obligations played a significant
role in the Portfolio. Amid a strong economy and impressive personal income
growth, the state and local coffers enjoyed a surge in tax revenues.
- - Industrial development bonds (IDB) provided excellent sources of income for
the Portfolio. Industries represented in the Portfolio's IDB holdings included
consumer products, transportation and paper.
YOUR INVESTMENT AT WORK [GRAPHIC]
- -------------------------------------------------------------------------------
Connecticut Health and Education
Finance Authority
New Britain Hospital
- - New Britain Hospital is a 175-bed, chronic-care facility, providing a range
of services that includes pediatric, psychiatric and pulmonary treatments.
- - These bonds financed the construction of the Hospital's East Wing, with new
facilities dedicated to pediatric and respiratory treatment as well as new
storage and pharmacy areas.
- - This escrowed bond provided a high-quality, relatively stable investment
and a 7.50% coupon.
- -------------------------------------------------------------------------------
(1) These returns do not include the 2.25% maximum sales charge for Class A
shares or the applicable contingent deferred sales charges (CDSC) for
Class B shares. (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 by dividing the last distribution per
share (annualized) by the net asset value. (4) 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. (5) Private insurance does not remove the interest rate risks
associated with these investments. (6) 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.
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, 1999
<TABLE>
<CAPTION>
Performance(6) Class A Class B
- -------------------------------------------------------------------------------
<S> <C> <C>
Average Annual Total Returns (at net asset value)
- -------------------------------------------------------------------------------
One Year 4.5% 3.9%
Five Years N.A. 4.8
Life of Fund+ 5.7 4.1
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- -------------------------------------------------------------------------------
One Year 2.1% 0.9%
Five Years N.A. 4.8
Life of Fund+ 4.6 4.1
</TABLE>
+Inception date: Class A: 1/21/97; Class B: 4/16/93
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EATON VANCE
CONNECTICUT LIMITED MATURITY MUNICIPALS FUND, CLASS B VS. LEHMAN BROTHERS
7-YEAR MUNICIPAL BOND INDEX* APRIL 30, 1993-MARCH 31, 1999.
<TABLE>
<CAPTION>
DATE FUND/NAV LB7YMBI
<S> <C> <C>
4/30/93 $10,000 $10,000
5/31/93 $9,970 $10,030
6/30/93 $10,103 $10,213
7/31/93 $10,108 $10,215
8/31/93 $10,287 $10,396
9/30/93 $10,384 $10,510
10/31/93 $10,388 $10,537
11/30/93 $10,302 $10,444
12/31/93 $10,483 $10,636
1/31/94 $10,595 $10,749
2/28/94 $10,381 $10,516
3/31/94 $10,083 $10,235
4/30/94 $10,154 $10,310
5/31/94 $10,189 $10,361
6/30/94 $10,142 $10,343
7/31/94 $10,273 $10,488
8/31/94 $10,301 $10,543
9/30/94 $10,212 $10,442
10/31/94 $10,102 $10,337
11/30/94 $9,978 $10,187
12/31/94 $10,095 $10,341
1/31/95 $10,257 $10,535
2/28/95 $10,440 $10,772
3/31/95 $10,513 $10,884
4/30/95 $10,537 $10,913
5/31/95 $10,719 $11,204
6/30/95 $10,687 $11,194
7/31/95 $10,800 $11,336
8/31/95 $10,898 $11,470
9/30/95 $10,944 $11,514
10/31/95 $11,045 $11,614
11/30/95 $11,156 $11,742
12/31/95 $11,201 $11,804
1/31/96 $11,270 $11,919
2/28/96 $11,215 $11,878
3/31/96 $11,091 $11,762
4/30/96 $11,048 $11,740
5/31/96 $11,003 $11,723
6/30/96 $11,086 $11,813
7/31/96 $11,187 $11,911
8/31/96 $11,154 $11,917
9/30/96 $11,271 $12,025
10/31/96 $11,339 $12,154
11/30/96 $11,525 $12,357
12/31/96 $11,480 $12,319
1/31/97 $11,493 $12,364
2/28/97 $11,579 $12,467
3/31/97 $11,447 $12,305
4/30/97 $11,505 $12,368
5/31/97 $11,658 $12,524
6/30/97 $11,731 $12,643
7/31/97 $11,967 $12,936
8/31/97 $11,838 $12,845
9/30/97 $11,935 $12,981
10/31/97 $11,972 $13,057
11/30/97 $12,024 $13,103
12/31/97 $12,190 $13,264
1/31/98 $12,251 $13,403
2/28/98 $12,255 $13,415
3/31/98 $12,264 $13,416
4/30/98 $12,191 $13,338
5/31/98 $12,338 $13,534
6/30/98 $12,352 $13,572
7/31/98 $12,377 $13,617
8/31/98 $12,541 $13,824
9/30/98 $12,639 $14,002
10/31/98 $12,627 $14,022
11/30/98 $12,643 $14,060
12/31/98 $12,679 $14,090
1/31/99 $12,806 $14,295
2/28/99 $12,784 $14,214
3/31/99 $12,743 $14,209
</TABLE>
*Source: Tower Data Systems, Bethesda, MD. The chart compares the Fund's
total return with that of the Lehman Brothers 7-Year 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 7-Year
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 directly in an Index. An investment in the Fund's Class
A shares on 1/31/97 at net asset value would have been worth $11,253 on
March 31, 1999; $10,997, including maximum 2.25% sales charge.
FEDERAL INCOME TAX INFORMATION ON DISTRIBUTIONS. For federal income tax
purposes, 97.35% of the total dividends paid by the Fund from net investment
income during the year ended March 31, 1999 is designated as an exempt-interest
dividend.
4
<PAGE>
EATON VANCE FLORIDA LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31,1999
INVESTMENT UPDATE
[PHOTO]
Cynthia J. Clemson
Portfolio Manager
THE ECONOMY
- -------------------------------------------------------------------------------
- - Florida registered strong job growth in 1998. During the past three years,
the state has added more than 300,000 jobs to service sector payrolls, with
especially strong growth in hotel, motel, and recreational services. The
health care sector also benefited from continuing strong demand.
- - Theme park and convention center expansions are expected to build new momentum
in 1999. The Orlando area will receive a boost from its $3 billion airport
expansion.
- - Florida's trade sector has suffered from weakness in Asia and Latin America.
Japan's recession has resulted in significantly lower exports of citrus fruit
and chemicals, while Brazil's perilous financial condition continues to pose a
risk to Latin America-bound exports.
THE FUND
- -------------------------------------------------------------------------------
- - During the year ended March 31, 1999, the Fund's Class A, Class B, and
Class C shares had total returns of 4.1%, 3.5%, and 3.6%, respectively.(1)
For Class A and Class B, these returns resulted from a decline in net asset
value (NAV) per share to $10.27 on March 31, 1999 from $10.29 on March 31,
1998, and the reinvestment of $0.436 and $0.380 per share, respectively, in
tax-free income.(2) For Class C, this return resulted from a decline in NAV
to $9.71 from $9.73, and the reinvestment of $0.363 per share in tax-free
income.(2)
- - Based on the Fund's most recent dividends and NAVs on March 31, 1999 of
$10.27 per share for Class A and Class B, and $9.71 for Class C, the Fund's
distribution rates were 4.38%, 3.65% and 3.60%, respectively.(3)
- - The SEC 30-day yields for Class A, B and C shares at March 31 were 3.39%,
2.72% and 2.72%, respectively.(4)
MANAGEMENT UPDATE
- -------------------------------------------------------------------------------
- - The Portfolio found good income opportunities among special tax revenue
bonds. These assessment district bonds, which provide infrastructure
financing for new communities, benefit from the rapid population growth of
Florida's booming retirement communities.
- - The Portfolio took advantage of the large issuance of insured(5) bonds by
several large, high quality issuers. The heavy supply enabled the Portfolio to
find good value among issues such as Tampa Solid Waste System bonds.
- - The Portfolio reduced its exposure to current coupon issues with calls before
2005 in favor of non-callable bonds and bonds with longer-dated call
provisions.
YOUR INVESTMENT AT WORK [GRAPHIC]
- -------------------------------------------------------------------------------
Tampa FL Solid Waste System
McKay Bay Refuse-to-Energy
- - These insured(5) revenue bonds were issued in 1999 to finance construction
costs of cogeneration facilities at Tampa's McKay Bay site.
- - Protection of water and wildlife has historically been a major issue among
Floridians. Facilities that recycle by-products into a reusable energy
source have proven beneficial to the environment.
- - Due to supply pressures, these bonds came to market at favorable levels,
providing a yield advantage over similar current coupons, as well as 10
years of call protection.
- -------------------------------------------------------------------------------
(1) These returns do not include the 2.25% maximum sales charge for Class A
shares or the applicable contingent deferred sales charges (CDSC) for
Class B and C shares. (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 by dividing the last distribution per
share (annualized) by the net asset value. (4) 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. (5) Private insurance does not remove the interest rate risks
associated with these investments. (6) 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. The one-year SEC 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.
- -------------------------------------------------------------------------------
FUND INFORMATION
as of March 31, 1999
<TABLE>
<CAPTION>
Performance(6) Class A Class B Class C
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Average Annual Total Returns (at net asset value)
- -------------------------------------------------------------------------------
One Year 4.1% 3.5% 3.6%
Five Years N.A. 4.4 4.4.
Life of Fund+ 5.4 4.6 3.3
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- -------------------------------------------------------------------------------
One Year 1.7% 0.5% 2.6%
Five Years N.A. 4.4 4.4
Life of Fund+ 4.5 4.6 3.3
</TABLE>
+Inception Dates -- Class A: 6/27/96; Class B: 5/29/92; Class C: 12/8/93
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EATON VANCE FLORIDA
LIMITED MATURITY MUNICIPALS 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>
5/31/92 $10,000 $10,000
6/30/92 $10,020 $10,159
7/31/92 $10,334 $10,462
8/31/92 $10,202 $10,354
9/30/92 $10,265 $10,438
10/31/92 $10,147 $10,368
11/30/92 $10,369 $10,522
12/31/92 $10,454 $10,608
1/31/92 $10,572 $10,763
2/28/93 $10,951 $11,093
3/31/93 $10,794 $10,947
4/30/93 $10,881 $11,015
5/31/93 $10,928 $11,048
6/30/93 $11,054 $11,250
7/31/93 $11,065 $11,252
8/31/93 $11,226 $11,451
9/30/93 $11,332 $11,577
10/31/93 $11,352 $11,607
11/30/93 $11,256 $11,505
12/31/93 $11,492 $11,716
1/31/94 $11,592 $11,840
2/28/94 $11,351 $11,583
3/31/94 $10,975 $11,274
4/30/94 $11,075 $11,356
5/31/94 $11,148 $11,413
6/30/94 $11,101 $11,392
7/31/94 $11,253 $11,553
8/31/94 $11,264 $11,613
9/30/94 $11,162 $11,502
10/31/94 $11,039 $11,387
11/30/94 $10,890 $11,221
12/31/94 $11,029 $11,391
1/31/95 $11,226 $11,604
2/28/95 $11,433 $11,866
3/31/95 $11,501 $11,989
4/30/95 $11,506 $12,021
5/31/95 $11,723 $12,341
6/30/95 $11,715 $12,330
7/31/95 $11,835 $12,487
8/31/95 $11,940 $12,634
9/30/95 $11,967 $12,683
10/31/95 $12,051 $12,793
11/30/95 $12,136 $12,934
12/31/95 $12,208 $13,003
1/31/96 $12,282 $13,129
2/28/96 $12,203 $13,084
3/31/96 $12,050 $12,956
4/30/96 $12,018 $12,932
5/31/96 $11,984 $12,913
6/30/96 $12,039 $13,012
7/31/96 $12,111 $13,120
8/31/96 $12,115 $13,127
9/30/96 $12,218 $13,246
10/31/96 $12,280 $13,388
11/30/96 $12,479 $13,612
12/31/96 $12,398 $13,570
1/31/97 $12,365 $13,619
2/28/97 $12,459 $13,732
3/31/97 $12,297 $13,554
4/30/97 $12,385 $13,624
5/31/97 $12,535 $13,795
6/30/97 $12,614 $13,927
7/31/97 $12,827 $14,249
8/31/97 $12,694 $14,149
9/30/97 $12,785 $14,298
10/31/97 $12,838 $14,383
11/30/97 $12,895 $14,434
12/31/97 $13,034 $14,610
1/31/98 $13,164 $14,763
2/28/98 $13,170 $14,777
3/31/98 $13,168 $14,777
4/30/98 $13,106 $14,691
5/31/98 $13,263 $14,907
6/30/98 $13,279 $14,949
7/31/98 $13,307 $14,999
8/31/98 $13,481 $15,227
9/30/98 $13,612 $15,423
10/31/98 $13,562 $15,445
11/30/98 $13,592 $15,487
12/31/98 $13,631 $15,520
1/31/99 $13,752 $15,747
2/28/99 $13,663 $15,657
3/31/99 $13,634 $15,652
</TABLE>
*Source: Tower Data Systems, Bethesda, MD. The chart compares the Fund's
total return with that of the Lehman Brothers 7-Year 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 7-Year
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 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 $11,539 on March
31, 1999; $11,281, including maximum 2.25% sales charge. An investment in
the Fund's Class C shares on 12/31/93 at net asset value would have been
worth $11,884 on March 31, 1999.
FEDERAL INCOME TAX INFORMATION ON DISTRIBUTIONS. For federal income tax
purposes, 99.62% of the total dividends paid by the Fund from net investment
income during the year ended March 31, 1999 is designated as an exempt-interest
dividend.
5
<PAGE>
EATON VANCE MASSACHUSETTS LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
INVESTMENT UPDATE
[PHOTO]
William H. Ahern
Portfolio Manager
THE ECONOMY
- -------------------------------------------------------------------------------
- - Massachusetts economic activity continued to grow in late 1998 and early
1999. Strong job data figures, thriving high-tech and financial sectors,
and ongoing consumer demand are some of the factors that contributed to the
expansion. The commonwealth's March unemployment rate was 2.8%.
- - As in other states, manufacturing has had mixed performance. The
automotive, furniture, office supplies, and health care areas continued to
perform well. Sales of electronics and industrial machinery, on the other
hand, are reported down.
- - Massachusetts is among corporate America's favorite places to do business.
According to INC. magazine, Massachusetts is ranked third behind Texas and
California in the number of fast-growing techonology companies headquartered
there.
THE FUND
- -------------------------------------------------------------------------------
- - During the year ended March 31, 1999, the Fund's Class A, Class B, and
Class C shares had total returns of 4.2%, 3.6%, and 3.6%, respectively.(1)
For Class A and Class B, these returns resulted from a decline in net asset
value (NAV) per share to $10.32 on March 31, 1999 from $10.33 on March 31,
1998, and the reinvestment of $0.436 and $0.378 per share, respectively, in
tax-free income.(2) For Class C, this return resulted from a decline in NAV
to $9.86 from $9.88, and the reinvestment of $0.367 per share in tax-free
income.(2)
- - Based on the Fund's most recent dividends and NAVs on March 31, 1999 of
$10.32 per share for Class A and Class B, and $9.86 for Class C, the Fund's
distribution rates were 4.42%, 3.66% and 3.83%, respectively.(3)
- - The SEC 30-day yields for Class A, B and C shares at March 31 were 3.32%,
2.65% and 2.65%, respectively.(4)
MANAGEMENT UPDATE
- -------------------------------------------------------------------------------
- - Hospital bonds represented the Portfolio's largest sector weighting at
March 31. In a very competitive Massachusetts hospital market, the
Portfolio focused on those institutions with sound financial structures,
good management and a favorable demographic base.
- - Escrowed bonds were a significant portion of the Portfolio. These bonds,
which are pre-refunded to their call date and backed by U.S. Treasury
bonds, are considered very high quality issues.
- - Quality spreads remained relatively narrow. The Portfolio maintained some
exposure to life care and nursing home bonds, which offered attractive
yields in non-rated issues.
YOUR INVESTMENT AT WORK [GRAPHIC]
- -------------------------------------------------------------------------------
Massachusetts Development
Finance Agency/YMCA of Greater Boston
- - The YMCA of Greater Boston is a long-standing institution whose goal is to
provide the area with wholesome recreational opportunities for young people in
the Boston area.
- - These bonds were issued by the State Development Finance Agency to finance
infrastructural improvements to local branches of the Greater Boston YMCA.
- - This bond features excellent call protection and an attractive 5.25% coupon in
a lower-rated, investment-grade bond, while providing funding for projects
that will benefit Boston-area communities.
- -------------------------------------------------------------------------------
(1) These returns do not include the 2.25% maximum sales charge for Class A
shares or the applicable contingent deferred sales charges (CDSC) for
Class B and C shares. (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 by dividing the last distribution per
share (annualized) by the net asset value. (4) 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. (5) 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. The
one-year SEC 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.
- -------------------------------------------------------------------------------
FUND INFORMATION
as of March 31, 1999
<TABLE>
<CAPTION>
Performance(5) Class A Class B Class C
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Average Annual Total Returns (at net asset value)
- -------------------------------------------------------------------------------
One Year 4.2% 3.6% 3.6%
Five Years N.A. 4.7 4.7
Life of Fund+ 5.8 4.7 3.7
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- -------------------------------------------------------------------------------
One Year 1.8% 0.6% 2.6%
Five Years N.A. 4.7 4.7.
Life of Fund+ 5.0 4.7 3.7
</TABLE>
+Inception Dates -- Class A: 6/27/96; Class B: 6/1/92; Class C: 12/8/93
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EATON VANCE
MASSACHUSETTS LIMITED MATURITY MUNICIPALS FUND, CLASS B VS. LEHMAN BROTHERS
7-YEAR MUNICIPAL BOND INDEX* JUNE 30, 1992-MARCH 31, 1999.
<TABLE>
<CAPTION>
DATE FUND/NAV LB7YMBI
<S> <C> <C>
6/30/92 $10,000 $10,000
7/31/92 $10,278 $10,298
8/31/92 $10,136 $10,192
9/30/92 $10,178 $10,275
10/31/92 $10,070 $10,205
11/30/92 $10,270 $10,358
12/31/92 $10,355 $10,442
1/31/92 $10,462 $10,595
2/28/93 $10,798 $10,919
3/31/93 $10,652 $10,776
4/30/93 $10,739 $10,843
5/31/93 $10,786 $10,875
6/30/93 $10,900 $11,074
7/31/93 $10,911 $11,076
8/31/93 $11,094 $11,272
9/30/93 $11,180 $11,396
10/31/93 $11,201 $11,425
11/30/93 $11,117 $11,325
12/31/93 $11,300 $11,533
1/31/94 $11,399 $11,655
2/28/94 $11,180 $11,402
3/31/94 $10,838 $11,098
4/30/94 $10,917 $11,179
5/31/94 $10,979 $11,234
6/30/94 $10,933 $11,214
7/31/94 $11,085 $11,372
8/31/94 $11,107 $11,432
9/30/94 $10,995 $11,322
10/31/94 $10,884 $11,209
11/30/94 $10,746 $11,045
12/31/94 $10,903 $11,213
1/31/95 $11,077 $11,423
2/28/95 $11,295 $11,680
3/31/95 $11,363 $11,802
4/30/95 $11,369 $11,833
5/31/95 $11,575 $12,148
6/30/95 $11,533 $12,137
7/31/95 $11,641 $12,292
8/31/95 $11,747 $12,437
9/30/95 $11,795 $12,484
10/31/95 $11,878 $12,593
11/30/95 $11,996 $12,732
12/31/95 $12,043 $12,799
1/31/96 $12,116 $12,923
2/28/96 $12,058 $12,879
3/31/96 $11,940 $12,753
4/30/96 $11,883 $12,730
5/31/96 $11,860 $12,711
6/30/96 $11,925 $12,809
7/31/96 $11,996 $12,915
8/31/96 $11,999 $12,922
9/30/96 $12,111 $13,039
10/31/96 $12,208 $13,179
11/30/96 $12,380 $13,399
12/31/96 $12,298 $13,358
1/31/97 $12,300 $13,406
2/28/97 $12,405 $13,517
3/31/97 $12,268 $13,342
4/30/97 $12,354 $13,411
5/31/97 $12,504 $13,579
6/30/97 $12,595 $13,709
7/31/97 $12,794 $14,027
8/31/97 $12,722 $13,927
9/30/97 $12,800 $14,075
10/31/97 $12,815 $14,158
11/30/97 $12,883 $14,208
12/31/97 $13,059 $14,382
1/31/98 $13,150 $14,533
2/28/98 $13,169 $14,546
3/31/98 $13,166 $14,546
4/30/98 $13,079 $14,462
5/31/98 $13,259 $14,674
6/30/98 $13,262 $14,716
7/31/98 $13,276 $14,765
8/31/98 $13,462 $14,989
9/30/98 $13,618 $15,182
10/31/98 $13,567 $15,204
11/30/98 $13,572 $15,245
12/31/98 $13,637 $15,277
1/31/99 $13,771 $15,500
2/28/99 $13,670 $15,413
3/31/99 $13,641 $15,407
</TABLE>
*Source: Tower Data Systems, Bethesda, MD. The chart compares the Fund's
total return with that of the Lehman Brothers 7-Year 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 7-Year
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 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 $11,656 on March
31, 1999; $11,393, including maximum 2.25% sales charge. An investment in
the Fund's Class C shares on 12/31/93 at net asset value would have been
worth $12,098 on March 31, 1999.
FEDERAL INCOME TAX INFORMATION ON DISTRIBUTIONS. For federal income tax
purposes, 99.83% of the total dividends paid by the Fund from net investment
income during the year ended March 31, 1999 is designated as an exempt-interest
dividend.
6
<PAGE>
EATON VANCE MICHIGAN LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
INVESTMENT UPDATE
[PHOTO]
William H. Ahern
Portfolio Manager
THE ECONOMY
- -------------------------------------------------------------------------------
- - The Michigan economy struggled somewhat in 1998, as a strike at General
Motors and continuing weak demand from Asia took a heavy toll. However,
while manufacturing jobs increased just 0.5% during the year, construction,
trade and service sector employment rose significantly. The state's jobless
rate in March was 3.9%, unchanged from March 1998.
- - Despite the GM strike, the auto industry posted fairly good results in
1998, with 15.6 million cars and light trucks sold, a 2.9% increase over
1997 levels. Detroit's auto makers managed to maintain their domestic
market share versus foreign-made vehicles.
- - One of the nation's leading exporters, Michigan's economy remains sensitive
to global economic trends. While a lingering Japanese recession continued
to hamper manufacturing, a strengthening European Economic Community could
help stimulate demand.
THE FUND
- -------------------------------------------------------------------------------
- - During the year ended March 31, 1999, the Fund's Class A and Class B shares
had total returns of 3.5% and 3.1%, respectively.(1) For Class A and Class
B, these returns resulted from a decline in net asset value (NAV) per share
to $9.97 on March 31, 1999 from $10.04 on March 31, 1998, and the
reinvestment of $0.419 and $0.373 per share, respectively, in tax-free
income.(2)
- - Based on the Fund's most recent dividends and NAVs on March 31, 1999 of
$9.97 per share for Class A and Class B, the distribution rates were 4.31%
and 3.66%, respectively.(3)
- - The SEC 30-day yields for Class A and B shares at March 31 were 2.29% and
1.59%, respectively.(4)
MANAGEMENT UPDATE
- -------------------------------------------------------------------------------
- - Insured(5) general obligations constituted the Portfolio's largest
weighting at March 31. In an uncertain economic climate that included the
GM strike and softer foreign demand, these bonds provided the Portfolio
with a very high quality investment.
- - The Portfolio reduced its exposure to City of Detroit general obligations.
Despite having made significant strides in recent years, the city has been
bogged down lately in a financial battle with the state over control of the
Detroit public school system.
- - Escrowed bonds were the Portfolio's second largest sector weighting. In
addition to providing above-average income, the bonds, which are backed by
Treasury bonds, improved the overall quality of the Portfolio.
YOUR INVESTMENT AT WORK [GRAPHIC]
- -------------------------------------------------------------------------------
Grand Ledge MI
Public School District
- - These bonds were issued to finance improvements to public school facilities
in this small community west of Lansing.
- - The insured(5) bond has an exceptional 7.875% coupon, providing excellent
income for the Portfolio in a AAA rated investment.
- - As an escrowed bond, the Grand Ledge issue has been pre-refunded and backed
by Treasuries. Therefore, it tends to trade very near its call price, thus
representing a relatively stable investment.
- -------------------------------------------------------------------------------
(1) These returns do not include the 2.25% maximum sales charge for Class A
shares or the applicable contingent deferred sales charges (CDSC) for
Class B shares. (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 by dividing the last distribution per
share (annualized) by the net asset value. (4) 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. (5) Private insurance does not remove the interest rate risks
that are associated with these investments. (6) 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.
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, 1999
<TABLE>
<CAPTION>
Performance(6) Class A Class B
- -------------------------------------------------------------------------------
<S> <C> <C>
Average Annual Total Returns (at net asset value)
- -------------------------------------------------------------------------------
One Year 3.5% 3.1%
Five Years N.A. 4.7
Life of Fund+ 5.5 4.0
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- -------------------------------------------------------------------------------
One Year 1.2% 0.1%
Five Years N.A. 4.7
Life of Fund+ 4.6 4.0
</TABLE>
+Inception date: Class A: 10/22/96; Class B: 4/16/93
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EATON VANCE MICHIGAN
LIMITED MATURITY MUNICIPALS FUND, CLASS B VS. LEHMAN BROTHERS 7-YEAR
MUNICIPAL BOND INDEX* APRIL 30, 1993-MARCH 31, 1999.
<TABLE>
<CAPTION>
DATE FUND/NAV LB7YMBI
<S> <C> <C>
4/30/93 $10,000 $10,000
5/31/93 $9,980 $10,030
6/30/93 $10,124 $10,213
7/31/93 $10,130 $10,215
8/31/93 $10,282 $10,396
9/30/93 $10,380 $10,510
10/31/93 $10,387 $10,537
11/30/93 $10,324 $10,444
12/31/93 $10,495 $10,636
1/31/94 $10,609 $10,749
2/28/94 $10,375 $10,516
3/31/94 $10,057 $10,235
4/30/94 $10,140 $10,310
5/31/94 $10,177 $10,361
6/30/94 $10,151 $10,343
7/31/94 $10,274 $10,488
8/31/94 $10,292 $10,543
9/30/94 $10,193 $10,442
10/31/94 $10,074 $10,337
11/30/94 $9,930 $10,187
12/31/94 $10,038 $10,341
1/31/95 $10,245 $10,535
2/28/95 $10,430 $10,772
3/31/95 $10,483 $10,884
4/30/95 $10,486 $10,913
5/31/95 $10,681 $11,204
6/30/95 $10,639 $11,194
7/31/95 $10,718 $11,336
8/31/95 $10,818 $11,470
9/30/95 $10,863 $11,514
10/31/95 $10,998 $11,614
11/30/95 $11,099 $11,742
12/31/95 $11,133 $11,804
1/31/96 $11,225 $11,919
2/28/96 $11,136 $11,878
3/31/96 $11,001 $11,762
4/30/96 $10,959 $11,740
5/31/96 $10,948 $11,723
6/30/96 $11,022 $11,813
7/31/96 $11,136 $11,911
8/31/96 $11,082 $11,917
9/30/96 $11,212 $12,025
10/31/96 $11,305 $12,154
11/30/96 $11,494 $12,357
12/31/96 $11,463 $12,319
1/31/97 $11,500 $12,364
2/28/97 $11,588 $12,467
3/31/97 $11,457 $12,305
4/30/97 $11,505 $12,368
5/31/97 $11,649 $12,524
6/30/97 $11,736 $12,643
7/31/97 $11,963 $12,936
8/31/97 $11,859 $12,845
9/30/97 $11,922 $12,981
10/31/97 $11,948 $13,057
11/30/97 $11,990 $13,103
12/31/97 $12,171 $13,264
1/31/98 $12,283 $13,403
2/28/98 $12,277 $13,415
3/31/98 $12,275 $13,416
4/30/98 $12,166 $13,338
5/31/98 $12,352 $13,534
6/30/98 $12,367 $13,572
7/31/98 $12,381 $13,617
8/31/98 $12,560 $13,824
9/30/98 $12,660 $14,002
10/31/98 $12,611 $14,022
11/30/98 $12,601 $14,060
12/31/98 $12,612 $14,090
1/31/99 $12,740 $14,295
2/28/99 $12,679 $14,214
3/31/99 $12,650 $14,209
</TABLE>
*Source: Tower Data Systems, Bethesda, MD. The chart compares the Fund's
total return with that of the Lehman Brothers 7-Year 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 7-Year
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 directly in an Index. An investment in the Fund's Class A
shares on 10/31/96 at net asset value would have been worth $11,371 on March
31, 1999; $11,120, including maximum 2.25% sales charge.
FEDERAL INCOME TAX INFORMATION ON DISTRIBUTIONS. For federal income tax
purposes, 99.99% of the total dividends paid by the Fund from net investment
income during the year ended March 31, 1999 is designated as an exempt-interest
dividend.
7
<PAGE>
EATON VANCE NEW JERSEY LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
INVESTMENT UPDATE
[PHOTO]
William H. Ahern
Portfolio Manager
THE ECONOMY
- -------------------------------------------------------------------------------
- - The New Jersey economy advanced strongly in 1998, with state domestic
product rising a robust 4.6%. Employment gains, rising wages, and large
investment income boosted personal incomes of New Jerseyans. The state's
jobless rate fell below the national rate for the first time in a decade.
- - New Jersey added 76,500 new jobs in 1998, a gain of 2.1%. Job gains were
dominated by the state's core growth sectors -- technology, finance, health
care, and entertainment. The manufacturing sector, beset by weak demand
from Asia, again posted job losses.
- - Infrastructure improvements have become increasingly important to New
Jersey's burgeoning entertainment industry. Expansions at Newark
International Airport have contributed to a sharp increase in tourist
traffic at that facility, while public transportation improvements have
encouraged hotel and casino expansions in Atlantic City.
THE FUND
- -------------------------------------------------------------------------------
- - During the year ended March 31, 1999, the Fund's Class A and Class B shares
had total returns of 4.0% and 3.5%, respectively.(1) For Class A and Class
B, these returns resulted from a decline in net asset value (NAV) per share
to $10.32 on March 31, 1999 from $10.35 on March 31, 1998, and the
reinvestment of $0.443 and $0.385 per share, respectively, in tax-free
income.(2)
- - Based on the Fund's most recent dividends and NAVs on March 31, 1999 of
$10.32 per share for Class A and Class B, the distribution rates were 4.49%
and 3.73%, respectively.(3)
- - The SEC 30-day yields for Class A and B shares at March 31 were 3.30% and
2.63%, respectively.(4)
MANAGEMENT UPDATE
- -------------------------------------------------------------------------------
- - There were relatively few changes made to the Portfolio during the period.
The portfolio's largest weightings included insured general obligations,(5)
cogeneration and insured(5) hospital bonds.
- - With the New Jersey market again featuring large insured(5) issuance, the
Portfolio maintained higher-coupon bonds, including assisted living
projects, industrial development bonds and cogeneration facilities.
- - The Portfolio increased its investments in the transportation sector. Bonds
of the Port Authority of New York and New Jersey provided a very liquid
investment in a well-regarded, AA- rated issuer.
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.
- - This issue was representative of the Portfolio's efforts to find good
income opportunities in non-rated bonds.
- -------------------------------------------------------------------------------
(1) These returns do not include the 2.25% maximum sales charge for Class A
shares or the applicable contingent deferred sales charges (CDSC) for
Class B shares. (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 by dividing the last distribution per
share (annualized) by the net asset value.(4) 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. (5) Private insurance does not remove the interest rate risks
associated with these investments. (6) 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.
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, 1999
<TABLE>
<CAPTION>
Performance(6) Class A Class B
- -------------------------------------------------------------------------------
<S> <C> <C>
Average Annual Total Returns (at net asset value)
- -------------------------------------------------------------------------------
One Year 4.0% 3.5%
Five Years N.A. 4.6
Life of Fund+ 5.8 4.7
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- -------------------------------------------------------------------------------
One Year 1.7% 0.5%
Five Years N.A. 4.6
Life of Fund+ 4.9 4.7
</TABLE>
+Inception date: Class A: 6/27/96; Class B: 6/1/92
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EATON VANCE NEW
JERSEY LIMITED MATURITY MUNICIPALS FUND, CLASS B VS. LEHMAN BROTHERS 7-YEAR
MUNICIPAL BOND INDEX* JUNE 30, 1992-MARCH 31, 1999.
<TABLE>
<CAPTION>
DATE FUND/NAV LB7YMBI
<S> <C> <C>
6/30/92 $10,000 $10,000
7/31/92 $10,358 $10,298
8/31/92 $10,215 $10,192
9/30/92 $10,257 $10,275
10/31/92 $10,118 $10,205
11/30/92 $10,328 $10,358
12/31/92 $10,422 $10,442
1/31/92 $10,540 $10,595
2/28/93 $10,896 $10,919
3/31/93 $10,739 $10,776
4/30/93 $10,825 $10,843
5/31/93 $10,871 $10,875
6/30/93 $11,006 $11,074
7/31/93 $11,016 $11,076
8/31/93 $11,167 $11,272
9/30/93 $11,250 $11,396
10/31/93 $11,249 $11,425
11/30/93 $11,174 $11,325
12/31/93 $11,345 $11,533
1/31/94 $11,455 $11,655
2/28/94 $11,225 $11,402
3/31/94 $10,894 $11,098
4/30/94 $10,971 $11,179
5/31/94 $11,033 $11,234
6/30/94 $10,985 $11,214
7/31/94 $11,115 $11,372
8/31/94 $11,136 $11,432
9/30/94 $11,045 $11,322
10/31/94 $10,922 $11,209
11/30/94 $10,773 $11,045
12/31/94 $10,941 $11,213
1/31/95 $11,125 $11,423
2/28/95 $11,308 $11,680
3/31/95 $11,387 $11,802
4/30/95 $11,381 $11,833
5/31/95 $11,597 $12,148
6/30/95 $11,531 $12,137
7/31/95 $11,639 $12,292
8/31/95 $11,720 $12,437
9/30/95 $11,781 $12,484
10/31/95 $11,888 $12,593
11/30/95 $12,030 $12,732
12/31/95 $12,079 $12,799
1/31/96 $12,152 $12,923
2/28/96 $12,073 $12,879
3/31/96 $11,932 $12,753
4/30/96 $11,865 $12,730
5/31/96 $11,831 $12,711
6/30/96 $11,920 $12,809
7/31/96 $12,051 $12,915
8/31/96 $12,019 $12,922
9/30/96 $12,143 $13,039
10/31/96 $12,205 $13,179
11/30/96 $12,390 $13,399
12/31/96 $12,357 $13,358
1/31/97 $12,409 $13,406
2/28/97 $12,501 $13,517
3/31/97 $12,353 $13,342
4/30/97 $12,391 $13,411
5/31/97 $12,541 $13,579
6/30/97 $12,645 $13,709
7/31/97 $12,894 $14,027
8/31/97 $12,749 $13,927
9/30/97 $12,865 $14,075
10/31/97 $12,893 $14,158
11/30/97 $12,937 $14,208
12/31/97 $13,088 $14,382
1/31/98 $13,205 $14,533
2/28/98 $13,199 $14,546
3/31/98 $13,185 $14,546
4/30/98 $13,098 $14,462
5/31/98 $13,292 $14,674
6/30/98 $13,308 $14,716
7/31/98 $13,323 $14,765
8/31/98 $13,497 $14,989
9/30/98 $13,615 $15,182
10/31/98 $13,591 $15,204
11/30/98 $13,582 $15,245
12/31/98 $13,596 $15,277
1/31/99 $13,731 $15,500
2/28/99 $13,657 $15,413
3/31/99 $13,642 $15,407
</TABLE>
*Source: Tower Data Systems, Bethesda, MD. The chart compares the Fund's
total return with that of the Lehman Brothers 7-Year 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 7-Year
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 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 $11,661 on March
31, 1999; $11,398, including maximum 2.25% sales charge.
FEDERAL INCOME TAX INFORMATION ON DISTRIBUTIONS. For federal income tax
purposes, 98.22% of the total dividends paid by the Fund from net investment
income during the year ended March 31, 1999 is designated as an exempt-interest
dividend.
8
<PAGE>
EATON VANCE NEW YORK LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
INVESTMENT UPDATE
[PHOTO]
William H. Ahern
Portfolio Manager
THE ECONOMY
- -------------------------------------------------------------------------------
- - While the New York economy posted gains in the past year, the state
suffered from tumult in the financial markets and declining exports to Asia
and emerging markets. The state's job growth continued to lag the nation,
rising 2.0% versus 2.6% for the nation as a whole. The state's unemployment
rate declined to 5.0% in March from 5.8% a year earlier.
- - The Mid-Hudson region was New York's pacesetter for job creation.
Computer-related areas, metals, and temporary services were among the
area's fastest-growing industry groups.
- - New York City's financial markets were deeply affected by last year's
global financial crisis. Securities underwriting volumes declined sharply
and several large brokerage firms announced layoffs amid market volatility
and fears of declining profits.
THE FUND
- -------------------------------------------------------------------------------
- - During the year ended March 31, 1999, the Fund's Class A, Class B, and
Class C shares had total returns of 4.8%, 4.2%, and 4.3%, respectively.(1)
For Class A and Class B, these returns resulted from a rise in net asset
value (NAV) per share to $10.56 on March 31, 1999 from $10.51 on March 31,
1998, and the reinvestment of $0.445 and $0.386 per share, respectively, in
tax-free income.(2) For Class C, this return resulted from a rise in NAV to
$10.00 from $9.95, and the reinvestment of $0.370 per share in tax-free
income.(2)
- - Based on the Fund's most recent dividends and NAVs on March 31, 1999 of
$10.56 per share for Class A and Class B, and $10.00 for Class C, the
Fund's distribution rates were 4.45%, 3.69% and 3.83%, respectively.(3)
- - The SEC 30-day yields for Class A, B and C shares at March 31 were 3.67%,
3.03% and 3.03%, respectively.(4)
MANAGEMENT UPDATE
- -------------------------------------------------------------------------------
- - Lease revenue/certificates of participation were the Portfolio's largest
sector weighting at March 31. The issues financed a wide variety of public
facilities within the state, including transportation, energy, housing and
youth services.
- - The Portfolio's industrial development bonds provided very attractive
yields while financing state economic projects. Companies benefiting from
these bonds included Delta Airlines, American Airlines, and Terminal One
Group.
- - Housing issues for the New York State Mortgage Agency and the New York City
Housing Development Corp. played a significant role, financing single-family
and multi-family projects alike.
YOUR INVESTMENT AT WORK [GRAPHIC]
- -------------------------------------------------------------------------------
Suffolk County
Industrial Development Authority
Nissequogue Cogeneration Facility
- - These bonds were issued to finance construction costs of a 41-megawatt,
gas-fired cogeneration facility on the Stonybrook campus of SUNY in
Brookhaven.
- - The Nissequogue facility provides electricity, and steam heating and
cooling for the Stonybrook campus, as well as electricity for Long Island
Power Authority.
- - The Nissequogue issue is an example of the Portfolio's research-intensive
investments in non-rated bonds.
- -------------------------------------------------------------------------------
(1) These returns do not include the 2.25% maximum sales charge for Class A
shares or the applicable contingent deferred sales charges (CDSC) for
Class B and C shares. (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 by dividing the last distribution per
share (annualized) by the net asset value. (4) 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. (5) 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. The
one-year SEC 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.
- -------------------------------------------------------------------------------
FUND INFORMATION
as of March 31, 1999
<TABLE>
<CAPTION>
Performance(5) Class A Class B Class C
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Average Annual Total Returns (at net asset value)
- -------------------------------------------------------------------------------
One Year 4.8% 4.2% 4.3%
Five Years N.A. 5.0 5.0.
Life of Fund+ 6.5 5.0 3.9
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- -------------------------------------------------------------------------------
One Year 2.4% 1.2% 3.3%
Five Years N.A. 5.0 5.0
Life of Fund+ 5.6 5.0 3.9
</TABLE>
+Inception Dates -- Class A: 6/27/96; Class B: 5/29/92; Class C:12/8/93
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EATON VANCE NEW YORK
LIMITED MATURITY MUNICIPALS 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>
5/31/92 $10,000 $10,000
6/30/92 $10,010 $10,159
7/31/92 $10,312 $10,462
8/31/92 $10,220 $10,354
9/30/92 $10,274 $10,438
10/31/92 $10,135 $10,368
11/30/92 $10,368 $10,522
12/31/92 $10,464 $10,608
1/31/92 $10,603 $10,763
2/28/93 $10,962 $11,093
3/31/93 $10,795 $10,947
4/30/93 $10,871 $11,015
5/31/93 $10,908 $11,048
6/30/93 $11,055 $11,250
7/31/93 $11,076 $11,252
8/31/93 $11,258 $11,451
9/30/93 $11,342 $11,577
10/31/93 $11,351 $11,607
11/30/93 $11,265 $11,505
12/31/93 $11,437 $11,716
1/31/94 $11,548 $11,840
2/28/94 $11,305 $11,583
3/31/94 $10,952 $11,274
4/30/94 $11,030 $11,356
5/31/94 $11,103 $11,413
6/30/94 $11,078 $11,392
7/31/94 $11,208 $11,553
8/31/94 $11,218 $11,613
9/30/94 $11,106 $11,502
10/31/94 $10,983 $11,387
11/30/94 $10,788 $11,221
12/31/94 $10,952 $11,391
1/31/95 $11,149 $11,604
2/28/95 $11,366 $11,866
3/31/95 $11,434 $11,989
4/30/95 $11,440 $12,021
5/31/95 $11,657 $12,341
6/30/95 $11,626 $12,330
7/31/95 $11,734 $12,487
8/31/95 $11,839 $12,634
9/30/95 $11,866 $12,683
10/31/95 $11,974 $12,793
11/30/95 $12,093 $12,934
12/31/95 $12,154 $13,003
1/31/96 $12,228 $13,129
2/28/96 $12,148 $13,084
3/31/96 $12,019 $12,956
4/30/96 $11,975 $12,932
5/31/96 $11,942 $12,913
6/30/96 $12,020 $13,012
7/31/96 $12,091 $13,120
8/31/96 $12,070 $13,127
9/30/96 $12,195 $13,246
10/31/96 $12,281 $13,388
11/30/96 $12,478 $13,612
12/31/96 $12,409 $13,570
1/31/97 $12,387 $13,619
2/28/97 $12,480 $13,732
3/31/97 $12,355 $13,554
4/30/97 $12,443 $13,624
5/31/97 $12,606 $13,795
6/30/97 $12,722 $13,927
7/31/97 $13,034 $14,249
8/31/97 $12,925 $14,149
9/30/97 $13,042 $14,298
10/31/97 $13,069 $14,383
11/30/97 $13,126 $14,434
12/31/97 $13,315 $14,610
1/31/98 $13,407 $14,763
2/28/98 $13,426 $14,777
3/31/98 $13,424 $14,777
4/30/98 $13,324 $14,691
5/31/98 $13,518 $14,907
6/30/98 $13,547 $14,949
7/31/98 $13,562 $14,999
8/31/98 $13,762 $15,227
9/30/98 $13,932 $15,423
10/31/98 $13,881 $15,445
11/30/98 $13,900 $15,487
12/31/98 $13,941 $15,520
1/31/99 $14,063 $15,747
2/28/99 $14,016 $15,657
3/31/99 $13,988 $15,652
</TABLE>
*Source: Tower Data Systems, Bethesda, MD. The chart compares the Fund's
total return with that of the Lehman Brothers 7-Year 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 7-Year
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 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 $11,856 on March
31, 1999; $11,591, including maximum 2.25% sales charge. An investment in
the Fund's Class C shares on 12/31/93 at net asset value would have been
worth $12,240 on March 31, 1999.
FEDERAL INCOME TAX INFORMATION ON DISTRIBUTIONS. For federal income tax
purposes, 98.84% of the total dividends paid by the Fund from net investment
income during the year ended March 31, 1999 is designated as an exempt-interest
dividend.
9
<PAGE>
EATON VANCE OHIO LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
INVESTMENT UPDATE
[PHOTO]
William H. Ahern
Portfolio Manager
THE ECONOMY
- -------------------------------------------------------------------------------
- - The Ohio economy made further progress in 1998 and early 1999, with the
service and trade sectors responsible for most employment gains. In contrast,
the economic woes of Asia and the strong U.S. dollar hurt the manufacturing
sector, an important element of the Ohio economy. The state's March
unemployment rate was 3.9%.
- - Despite a difficult climate for manufacturers, Ohio's steelmakers fared well
in 1998, reflecting a strong industry trend. According to the Cleveland-based
Steel Service Center Institute, nationwide shipments totalled 28.9 million
tons, a 3% increase over 1997.
- - The Ohio labor market suffered from the General Motors auto strike and some
temporary, weather-related layoffs elsewhere. Nonetheless, according to the
Ohio Bureau of Employment Services, the state saw 156,000 more Ohians employed
during the year.
THE FUND
- -------------------------------------------------------------------------------
- - During the year ended March 31, 1999, the Fund's Class A and Class B shares
had total returns of 4.2% and 3.6%, respectively.(1) For Class A and B,
these returns resulted from a decline in net asset value (NAV) per share to
$10.11 on March 31, 1999 from $10.14 on March 31, 1998, and the
reinvestment of $0.448 and $0.393 per share, respectively, in tax-free
income.(2)
- - Based on the Fund's most recent dividends and NAVs on March 31, 1999 of
$10.11 per share for Class A and Class B, the Fund's distribution rates
were 4.60% and 3.86%, respectively.(3)
- - The SEC 30-day yields for Class A and Class B shares at March 31 were 3.10%
and 2.45%, respectively.(4)
MANAGEMENT UPDATE
- -------------------------------------------------------------------------------
- - The Portfolio continued its relative-value approach, seeking opportunities
in undervalued sectors of the Ohio market. Insured(5) general obligations
were the Portfolio's largest sector weighting at March 31.
- - Industrial development bonds provided some good opportunities in
higher-coupon bonds. Industries represented in the Portfolio's IDB holdings
included plastics, steel, air freight and entertainment.
- - With quality spreads remaining narrow, the Portfolio maintained an exposure
to non-rated bonds. The Portfolio found especially good value among
non-rated issues in the housing, life care, and nursing home sectors.
YOUR INVESTMENT AT WORK [GRAPHIC]
- -------------------------------------------------------------------------------
Ohio Solid Waste Revenue Bonds
Republic Engineered Steel, Inc.
- - Republic Engineered Steel, Inc., headquartered in Massillon, is a
manufacturer of hot-rolled, specialty steel bars. Product applications
include axles and wheel hubs used in auto manufacture and bars used to
produce aircraft landing gear.
- - These bonds were issued to finance the construction of solid waste
treatment facilities at Republic's Canton Township plant.
- - The non-rated bonds carry an exceptional 9.00% coupon and provide the
Portfolio eight years of premium call protection.
- -------------------------------------------------------------------------------
(1) These returns do not include the 2.25% maximum sales charge for Class A
shares or the applicable contingent deferred sales charges (CDSC) for
Class B shares. (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 by dividing the last distribution per
share (annualized) by the net asset value. (4) 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. (5) Private insurance does not remove the interest rate risks
associated with these investments. (6) 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.
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, 1999
<TABLE>
<CAPTION>
Performance(5) Class A Class B
- -------------------------------------------------------------------------------
<S> <C> <C>
Average Annual Total Returns (at net asset value)
- -------------------------------------------------------------------------------
One Year 4.2% 3.6%
Five Years N.A. 4.9
Life of Fund+ 5.8 4.3
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- -------------------------------------------------------------------------------
One Year 1.9% 0.6%
Five Years N.A. 4.9
Life of Fund+ 4.8 4.3
</TABLE>
+Inception date: Class A: 10/22/96; Class B: 4/16/93
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EATON VANCE OHIO
LIMITED MATURITY MUNICIPALS FUND, CLASS B VS. LEHMAN BROTHERS 7-YEAR
MUNICIPAL BOND INDEX* APRIL 30, 1993-MARCH 31, 1999.
<TABLE>
<CAPTION>
DATE FUND/NAV LB7YMBI
<S> <C> <C>
4/30/93 $10,000 $10,000
5/31/93 $9,990 $10,030
6/30/93 $10,149 $10,213
7/31/93 $10,176 $10,215
8/31/93 $10,348 $10,396
9/30/93 $10,446 $10,510
10/31/93 $10,452 $10,537
11/30/93 $10,389 $10,444
12/31/93 $10,561 $10,636
1/31/94 $10,674 $10,749
2/28/94 $10,430 $10,516
3/31/94 $10,113 $10,235
4/30/94 $10,206 $10,310
5/31/94 $10,253 $10,361
6/30/94 $10,217 $10,343
7/31/94 $10,350 $10,488
8/31/94 $10,369 $10,543
9/30/94 $10,260 $10,442
10/31/94 $10,140 $10,337
11/30/94 $9,996 $10,187
12/31/94 $10,136 $10,341
1/31/95 $10,322 $10,535
2/28/95 $10,484 $10,772
3/31/95 $10,558 $10,884
4/30/95 $10,551 $10,913
5/31/95 $10,767 $11,204
6/30/95 $10,715 $11,194
7/31/95 $10,784 $11,336
8/31/95 $10,894 $11,470
9/30/95 $10,952 $11,514
10/31/95 $11,065 $11,614
11/30/95 $11,166 $11,742
12/31/95 $11,224 $11,804
1/31/96 $11,271 $11,919
2/28/96 $11,217 $11,878
3/31/96 $11,094 $11,762
4/30/96 $11,062 $11,740
5/31/96 $11,041 $11,723
6/30/96 $11,161 $11,813
7/31/96 $11,218 $11,911
8/31/96 $11,211 $11,917
9/30/96 $11,343 $12,025
10/31/96 $11,414 $12,154
11/30/96 $11,603 $12,357
12/31/96 $11,562 $12,319
1/31/97 $11,542 $12,364
2/28/97 $11,666 $12,467
3/31/97 $11,525 $12,305
4/30/97 $11,598 $12,368
5/31/97 $11,743 $12,524
6/30/97 $11,831 $12,643
7/31/97 $12,083 $12,936
8/31/97 $11,992 $12,845
9/30/97 $12,068 $12,981
10/31/97 $12,096 $13,057
11/30/97 $12,140 $13,103
12/31/97 $12,273 $13,264
1/31/98 $12,386 $13,403
2/28/98 $12,394 $13,415
3/31/98 $12,381 $13,416
4/30/98 $12,335 $13,338
5/31/98 $12,486 $13,534
6/30/98 $12,502 $13,572
7/31/98 $12,518 $13,617
8/31/98 $12,673 $13,824
9/30/98 $12,762 $14,002
10/31/98 $12,741 $14,022
11/30/98 $12,758 $14,060
12/31/98 $12,797 $14,090
1/31/99 $12,927 $14,295
2/28/99 $12,856 $14,214
3/31/99 $12,830 $14,209
</TABLE>
*Source: Tower Data Systems, Bethesda, MD. The chart compares the Fund's
total return with that of the Lehman Brothers 7-Year 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 7-Year
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 directly in an Index. An investment in the Fund's Class A
shares on 10/31/96 at net asset value would have been worth $11,430 on March
31, 1999; $11,170, including maximum 2.25% sales charge.
FEDERAL INCOME TAX INFORMATION ON DISTRIBUTIONS. For federal income tax
purposes, 99.66% of the total dividends paid by the Fund from net investment
income during the year ended March 31, 1999 is designated as an exempt-interest
dividend.
10
<PAGE>
EATON VANCE PENNSYLVANIA LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
INVESTMENT UPDATE
[PHOTO]
Timothy T. Browse
Portfolio Manager
THE ECONOMY
- -------------------------------------------------------------------------------
- - Pennsylvania enjoyed strong, albeit uneven, economic growth over the past
year. Despite the negative impact of weak Asian economies, more than 53,000
new jobs were added in the past year, a testament to an increasingly
diverse economic mix. Pennsylvania's March jobless rate was 4.4%, down from
4.8% a year ago.
- - The strong U.S. dollar resulted in a fiercely competitive climate for
Pennsylvania's durable goods manufacturers. Amid an influx of low-cost
imports, the sector lost more than 8,000 jobs, primarily in metals and
transportation equipment.
- - The service sector again was Pennsylvania's primary generator of job
growth. Higher education, local government, and business services,
including data processing and computer-related activities, were the major
sources of new jobs.
THE FUND
- -------------------------------------------------------------------------------
- - During the year ended March 31, 1999, the Fund's Class A, Class B, and
Class C shares had total returns of 3.9%, 3.3%, and 3.4%, respectively.(1)
For Class A and Class B, these returns resulted from a decline in net asset
value (NAV) per share to $10.50 on March 31, 1999 from $10.55 on March 31,
1998, and the reinvestment of $0.455 and $0.397 per share, respectively, in
tax-free income.(2) For Class C, this return resulted from a decline in NAV
to $9.93 from $9.98, and the reinvestment of $0.380 per share in tax-free
income.(2)
- - Based on the Fund's most recent dividends and NAVs on March 31, 1999 of
$10.50 per share for Class A and Class B, and $9.93 for Class C, the Fund's
distribution rates were 4.53%, 3.78%, and 3.73%, respectively.(3)
- - The SEC 30-day yields for Class A, B and C shares at March 31 were 3.46%,
2.79% and 2.79%, respectively.(4)
MANAGEMENT UPDATE
- -------------------------------------------------------------------------------
- - The Pennsylvania market characteristically featured a large issuance of
hospital bonds. Hospitals and insured(5) hospital bonds constituted large
Portfolio holdings, with some lower investment-grade issues providing
excellent income opportunities.
- - The Portfolio maintained a large commitment to escrowed bonds. The bonds
are backed by Treasury bonds, which gives them an implicit AAA credit
rating. Meanwhile, they continue to provide an excellent stream of income
to the Portfolio.
- - Management continued its efforts to upgrade the Portfolio's call
protection. As low interest rates prompted a series of refundings, call
protection became increasingly important for municipal investors.
YOUR INVESTMENT AT WORK [GRAPHIC]
- -------------------------------------------------------------------------------
Chester County
Industrial Development Authority
Senior Life Choice of Kimberton
- - The Chester County Industrial Development Authority provides financing for
economic development and public projects within the County.
- - These bonds were issued to help finance an assisted living facility in
Kimberton. These facilities have become increasingly popular as a health care
alternative for an aging population.
- - The non-rated bond has an attractive 8.00% coupon. The Portfolios purchased
the issue in its entirety and Eaton Vance was able to negotiate some of its
terms.
- -------------------------------------------------------------------------------
(1) These returns do not include the 2.25% maximum sales charge for Class A
shares or the applicable contingent deferred sales charges (CDSC) for
Class B and C shares. (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 by dividing the last distribution per
share (annualized) by the net asset value. (4) 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. (5) Private insurance does not remove the
interest rate risks associated with these investments. (6) 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. The one-year SEC 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.
- -------------------------------------------------------------------------------
FUND INFORMATION
as of March 31, 1999
<TABLE>
<CAPTION>
Performance(6) Class A Class B Class C
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Average Annual Total Returns (at net asset value)
- -------------------------------------------------------------------------------
One Year 3.9% 3.3% 3.4%
Five Years N.A. 4.9 4.9
Life of Fund+ 6.3 5.0 3.8
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- -------------------------------------------------------------------------------
One Year 1.6% 0.3% 2.4%
Five Years N.A. 4.9 4.9
Life of Fund+ 5.4 5.0 3.8
</TABLE>
+Inception Dates -- Class A: 6/27/96; Class B: 6/1/92; Class C: 12/8/93
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EATON VANCE
PENNSYLVANIA LIMITED MATURITY MUNICIPALS FUND, CLASS B VS. LEHMAN BROTHERS
7-YEAR MUNICIPAL BOND INDEX* JUNE 30, 1992-MARCH 31, 1999.
<TABLE>
<CAPTION>
DATE FUND/NAV LB7YMBI
<S> <C> <C>
6/30/92 $10,000 $10,000
7/31/92 $10,357 $10,298
8/31/92 $10,206 $10,192
9/30/92 $10,268 $10,275
10/31/92 $10,121 $10,205
11/30/92 $10,351 $10,358
12/31/92 $10,435 $10,442
1/31/92 $10,563 $10,595
2/28/93 $10,898 $10,919
3/31/93 $10,722 $10,776
4/30/93 $10,819 $10,843
5/31/93 $10,866 $10,875
6/30/93 $10,991 $11,074
7/31/93 $11,003 $11,076
8/31/93 $11,186 $11,272
9/30/93 $11,271 $11,396
10/31/93 $11,282 $11,425
11/30/93 $11,198 $11,325
12/31/93 $11,403 $11,533
1/31/94 $11,502 $11,655
2/28/94 $11,274 $11,402
3/31/94 $10,924 $11,098
4/30/94 $11,013 $11,179
5/31/94 $11,065 $11,234
6/30/94 $11,030 $11,214
7/31/94 $11,182 $11,372
8/31/94 $11,193 $11,432
9/30/94 $11,082 $11,322
10/31/94 $10,961 $11,209
11/30/94 $10,803 $11,045
12/31/94 $10,969 $11,213
1/31/95 $11,142 $11,423
2/28/95 $11,359 $11,680
3/31/95 $11,416 $11,802
4/30/95 $11,434 $11,833
5/31/95 $11,650 $12,148
6/30/95 $11,609 $12,137
7/31/95 $11,705 $12,292
8/31/95 $11,799 $12,437
9/30/95 $11,838 $12,484
10/31/95 $11,934 $12,593
11/30/95 $12,053 $12,732
12/31/95 $12,103 $12,799
1/31/96 $12,166 $12,923
2/28/96 $12,100 $12,879
3/31/96 $11,984 $12,753
4/30/96 $11,918 $12,730
5/31/96 $11,897 $12,711
6/30/96 $11,964 $12,809
7/31/96 $12,036 $12,915
8/31/96 $12,053 $12,922
9/30/96 $12,167 $13,039
10/31/96 $12,241 $13,179
11/30/96 $12,427 $13,399
12/31/96 $12,383 $13,358
1/31/97 $12,399 $13,406
2/28/97 $12,493 $13,517
3/31/97 $12,358 $13,342
4/30/97 $12,422 $13,411
5/31/97 $12,573 $13,579
6/30/97 $12,690 $13,709
7/31/97 $13,002 $14,027
8/31/97 $12,883 $13,927
9/30/97 $13,000 $14,075
10/31/97 $13,029 $14,158
11/30/97 $13,087 $14,208
12/31/97 $13,264 $14,382
1/31/98 $13,395 $14,533
2/28/98 $13,390 $14,546
3/31/98 $13,415 $14,546
4/30/98 $13,330 $14,462
5/31/98 $13,499 $14,674
6/30/98 $13,529 $14,716
7/31/98 $13,507 $14,765
8/31/98 $13,695 $14,989
9/30/98 $13,801 $15,182
10/31/98 $13,765 $15,204
11/30/98 $13,771 $15,245
12/31/98 $13,799 $15,277
1/31/99 $13,935 $15,500
2/28/99 $13,876 $15,413
3/31/99 $13,862 $15,407
</TABLE>
*Source: Tower Data Systems, Bethesda, MD. The chart compares the Fund's
total return with that of the Lehman Brothers 7-Year 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 7-Year
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 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 $11,805 on March
31, 1999; $11,542, including maximum 2.25% sales charge. An investment in
the Fund's Class C shares on 12/31/93 at net asset value would have been
worth $12,199 on March 31, 1999.
FEDERAL INCOME TAX INFORMATION ON DISTRIBUTIONS. For federal income tax
purposes, 99.95% of the total dividends paid by the Fund from net investment
income during the year ended March 31, 1999 is designated as an exempt-interest
dividend.
11
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
FINANCIAL STATEMENTS
STATEMENTS OF ASSETS AND LIABILITIES
AS OF MARCH 31, 1999
<TABLE>
<CAPTION>
CALIFORNIA CONNECTICUT FLORIDA MASSACHUSETTS MICHIGAN
LIMITED FUND LIMITED FUND LIMITED FUND LIMITED FUND LIMITED FUND
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Assets
- ------------------------------------------------------------------------------------------------------------------------
Investment in Limited Maturity
Municipals Portfolio --
Identified cost $ 27,226,098 $8,470,317 $ 57,218,771 $49,150,294 $ 9,709,181
Unrealized appreciation 1,451,997 491,207 2,729,429 2,393,141 771,620
- ------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT IN PORTFOLIO, AT VALUE $ 28,678,095 $8,961,524 $ 59,948,200 $51,543,435 $ 10,480,801
- ------------------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold $ 10,000 $ -- $ 100 $ 25,876 $ --
- ------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 28,688,095 $8,961,524 $ 59,948,300 $51,569,311 $ 10,480,801
- ------------------------------------------------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------------------------------------------------
Dividends payable $ 54,392 $ 16,569 $ 109,073 $ 93,624 $ 19,576
Payable for Fund shares redeemed 34,223 -- 153,062 32,663 2,435
Other accrued expenses 30,608 20,668 54,822 41,802 18,872
- ------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 119,223 $ 37,237 $ 316,957 $ 168,089 $ 40,883
- ------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 28,568,872 $8,924,287 $ 59,631,343 $51,401,222 $ 10,439,918
- ------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- ------------------------------------------------------------------------------------------------------------------------
Paid-in capital $ 29,328,809 $8,919,084 $ 60,603,225 $50,896,996 $ 11,138,436
Accumulated net realized loss from
Portfolio (computed on basis of
identified cost) (2,157,541) (536,940) (3,613,482) (1,839,841) (1,450,562)
Accumulated undistributed (distributions
in excess of) net investment income (54,393) 50,936 (87,829) (49,074) (19,576)
Net unrealized appreciation from
Portfolio (computed on basis of
identified cost) 1,451,997 491,207 2,729,429 2,393,141 771,620
- ------------------------------------------------------------------------------------------------------------------------
TOTAL $ 28,568,872 $8,924,287 $ 59,631,343 $51,401,222 $ 10,439,918
- ------------------------------------------------------------------------------------------------------------------------
Class A Shares
- ------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 26,169,641 $7,514,256 $ 49,355,074 $43,436,483 $ 9,786,263
SHARES OUTSTANDING 2,527,768 741,473 4,805,301 4,209,754 981,749
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 10.35 $ 10.13 $ 10.27 $ 10.32 $ 9.97
MAXIMUM OFFERING PRICE PER SHARE
(100 DIVIDED BY 97.75 of net asset
value per share) $ 10.59 $ 10.36 $ 10.51 $ 10.56 $ 10.20
- ------------------------------------------------------------------------------------------------------------------------
Class B Shares
- ------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 2,399,231 $1,410,031 $ 6,326,004 $ 2,747,372 $ 653,655
SHARES OUTSTANDING 231,746 139,239 616,060 266,143 65,579
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 10.35 $ 10.13 $ 10.27 $ 10.32 $ 9.97
- ------------------------------------------------------------------------------------------------------------------------
Class C Shares
- ------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ -- $ -- $ 3,950,265 $ 5,217,367 $ --
SHARES OUTSTANDING -- -- 406,921 528,918 --
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ -- $ -- $ 9.71 $ 9.86 $ --
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
On sales of $100,000 or more, the offering price of Class A shares is reduced.
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF ASSETS AND LIABILITIES
AS OF MARCH 31, 1999
<TABLE>
<CAPTION>
NEW JERSEY NEW YORK OHIO PENNSYLVANIA
LIMITED FUND LIMITED FUND LIMITED FUND LIMITED FUND
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
Assets
- -------------------------------------------------------------------------------------------------------
Investment in Limited Maturity
Municipals Portfolio --
Identified cost $ 37,297,232 $ 62,445,972 $ 21,589,820 $ 48,601,912
Unrealized appreciation 2,483,449 3,426,771 1,069,434 2,168,770
- -------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT IN PORTFOLIO, AT VALUE $ 39,780,681 $ 65,872,743 $ 22,659,254 $ 50,770,682
- -------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold $ 50,000 $ 2,994 $ -- $ 2,210
- -------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 39,830,681 $ 65,875,737 $ 22,659,254 $ 50,772,892
- -------------------------------------------------------------------------------------------------------
Liabilities
- -------------------------------------------------------------------------------------------------------
Dividends payable $ 77,028 $ 123,756 $ 44,727 $ 93,122
Payable for Fund shares redeemed 78,516 24,703 3,043 --
Other accrued expenses 28,229 48,982 31,972 42,416
- -------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 183,773 $ 197,441 $ 79,742 $ 135,538
- -------------------------------------------------------------------------------------------------------
NET ASSETS $ 39,646,908 $ 65,678,296 $ 22,579,512 $ 50,637,354
- -------------------------------------------------------------------------------------------------------
Sources of Net Assets
- -------------------------------------------------------------------------------------------------------
Paid-in capital $ 39,505,344 $ 63,870,666 $ 22,770,269 $ 49,559,519
Accumulated net realized loss from
Portfolio (computed on basis of
identified cost) (2,301,745) (1,558,804) (1,346,917) (1,067,227)
Accumulated undistributed (distributions
in excess of) net investment income (40,140) (60,337) 86,726 (23,708)
Net unrealized appreciation from
Portfolio (computed on basis of
identified cost) 2,483,449 3,426,771 1,069,434 2,168,770
- -------------------------------------------------------------------------------------------------------
TOTAL $ 39,646,908 $ 65,678,296 $ 22,579,512 $ 50,637,354
- -------------------------------------------------------------------------------------------------------
Class A Shares
- -------------------------------------------------------------------------------------------------------
NET ASSETS $ 36,591,255 $ 57,863,562 $ 20,374,551 $ 41,047,859
SHARES OUTSTANDING 3,546,521 5,478,188 2,016,094 3,907,818
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 10.32 $ 10.56 $ 10.11 $ 10.50
MAXIMUM OFFERING PRICE PER SHARE
(100 DIVIDED BY 97.75 of net asset
value per share) $ 10.56 $ 10.80 $ 10.34 $ 10.74
- -------------------------------------------------------------------------------------------------------
Class B Shares
- -------------------------------------------------------------------------------------------------------
NET ASSETS $ 3,055,653 $ 5,077,647 $ 2,204,961 $ 3,786,940
SHARES OUTSTANDING 296,148 480,840 218,184 360,523
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 10.32 $ 10.56 $ 10.11 $ 10.50
- -------------------------------------------------------------------------------------------------------
Class C Shares
- -------------------------------------------------------------------------------------------------------
NET ASSETS $ -- $ 2,737,087 $ -- $ 5,802,555
SHARES OUTSTANDING -- 273,715 -- 584,149
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ -- $ 10.00 $ -- $ 9.93
- -------------------------------------------------------------------------------------------------------
</TABLE>
On sales of $100,000 or more, the offering price of Class A shares is reduced.
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
CALIFORNIA CONNECTICUT FLORIDA MASSACHUSETTS MICHIGAN
LIMITED FUND LIMITED FUND LIMITED FUND LIMITED FUND LIMITED FUND
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Investment Income
- ------------------------------------------------------------------------------------------------------------------------
Interest allocated from Portfolio $1,679,122 $500,304 $3,463,508 $2,808,095 $ 602,186
Expenses allocated from Portfolio (194,363) (53,567) (375,118) (305,062) (86,178)
- ------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME FROM PORTFOLIO $1,484,759 $446,737 $3,088,390 $2,503,033 $ 516,008
- ------------------------------------------------------------------------------------------------------------------------
Expenses
- ------------------------------------------------------------------------------------------------------------------------
Trustees fees and expenses $ 42 $ 1,374 $ 555 $ 2,287 $ 168
Distribution and service fees
Class A 42,295 13,631 77,273 62,138 14,918
Class B 28,450 15,857 65,125 45,458 8,291
Class C -- -- 49,710 38,412 --
Transfer and dividend disbursing agent
fees 28,790 9,565 56,579 48,087 11,450
Legal and accounting services 8,246 9,098 14,125 23,979 9,345
Printing and postage 4,762 3,659 8,104 10,288 3,600
Custodian fee 6,009 5,820 10,713 6,812 5,103
Registration fees 1,251 424 7,653 5,802 3,361
Amortization of organization expenses -- 269 -- -- 1,262
Miscellaneous 5,358 3,711 10,811 8,760 3,847
- ------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 125,203 $ 63,408 $ 300,648 $ 252,023 $ 61,345
- ------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $1,359,556 $383,329 $2,787,742 $2,251,010 $ 454,663
- ------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Portfolio
- ------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $ 508,612 $ 48,664 $ 848,816 $ 732,983 $ 167,850
Financial futures contracts (130,540) (29,254) (208,377) (284,350) (53,228)
- ------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN $ 378,072 $ 19,410 $ 640,439 $ 448,633 $ 114,622
- ------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments $ (263,755) $ 13,373 $ (716,010) $ (473,609) $(181,375)
Financial futures contracts (209) 3,626 11,838 15,948 2,401
- ------------------------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $ (263,964) $ 16,999 $ (704,172) $ (457,661) $(178,974)
- ------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) $ 114,108 $ 36,409 $ (63,733) $ (9,028) $ (64,352)
- ------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $1,473,664 $419,738 $2,724,009 $2,241,982 $ 390,311
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
14
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
NEW JERSEY NEW YORK OHIO PENNSYLVANIA
LIMITED FUND LIMITED FUND LIMITED FUND LIMITED FUND
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
Investment Income
- -------------------------------------------------------------------------------------------------------
Interest allocated from Portfolio $2,292,343 $3,689,798 $1,283,378 $2,910,538
Expenses allocated from Portfolio (263,741) (406,728) (149,810) (320,260)
- -------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME FROM PORTFOLIO $2,028,602 $3,283,070 $1,133,568 $2,590,278
- -------------------------------------------------------------------------------------------------------
Expenses
- -------------------------------------------------------------------------------------------------------
Trustees fees and expenses $ 1,428 $ 1,084 $ 229 $ 2,291
Distribution and service fees
Class A 51,727 83,275 30,216 56,940
Class B 44,859 63,533 27,246 47,584
Class C -- 23,496 -- 48,876
Transfer and dividend disbursing agent
fees 39,932 67,671 19,645 53,573
Legal and accounting services 12,496 15,733 12,019 19,040
Printing and postage 9,235 21,277 4,396 10,511
Custodian fee 5,536 8,553 4,611 6,535
Registration fees 1,500 2,822 3,596 1,007
Miscellaneous 7,966 11,261 3,577 8,286
- -------------------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 174,679 $ 298,705 $ 105,535 $ 254,643
- -------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $1,853,923 $2,984,365 $1,028,033 $2,335,635
- -------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Portfolio
- -------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $ 302,337 $ 654,504 $ 125,539 $ 722,466
Financial futures contracts (135,039) (287,095) (100,053) (166,778)
- -------------------------------------------------------------------------------------------------------
NET REALIZED GAIN $ 167,298 $ 367,409 $ 25,486 $ 555,688
- -------------------------------------------------------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments $ (313,608) $ (30,963) $ (84,845) $ (771,210)
Financial futures contracts 10,457 17,434 3,453 (3,369)
- -------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $ (303,151) $ (13,529) $ (81,392) $ (774,579)
- -------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) $ (135,853) $ 353,880 $ (55,906) $ (218,891)
- -------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $1,718,070 $3,338,245 $ 972,127 $2,116,744
- -------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
15
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
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 $ 1,359,556 $ 383,329 $ 2,787,742 $ 2,251,010 $ 454,663
Net realized gain 378,072 19,410 640,439 448,633 114,622
Net change in unrealized appreciation
(depreciation) (263,964) 16,999 (704,172) (457,661) (178,974)
- ------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 1,473,664 $ 419,738 $ 2,724,009 $ 2,241,982 $ 390,311
- ------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (1,261,736) $ (315,775) $ (2,327,941) $(1,944,036) $ (420,416)
Class B (127,848) (68,388) (275,336) (182,561) (39,337)
Class C -- -- (209,162) (154,877) --
In excess of net investment income
Class A (135) (7,965) -- -- (14,144)
Class B (1,820) -- (1,526) (2,636) (499)
Class C -- -- -- (3,195) --
- ------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (1,391,539) $ (392,128) $ (2,813,965) $(2,287,305) $ (474,396)
- ------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial
interest --
Proceeds from sale of shares
Class A $ 363,844 $ 464,104 $ 700,316 $ 2,487,913 $ 442,579
Class B 756,317 260,113 814,557 1,504,280 199,415
Class C -- -- 1,429,966 1,586,272 --
Issued in reorganization of EV
Traditional and Classic Limited
Maturity Municipals Funds
Class A 3,133,613 1,063,816 4,524,349 -- 895,423
Class C -- -- 6,552,371 4,459,306 --
Net asset value of shares issued to
shareholders
in payment of distributions
declared
Class A 487,926 156,613 816,049 953,546 214,151
Class B 61,904 46,445 79,403 123,499 28,483
Class C -- -- 100,040 128,935 --
Cost of shares redeemed
Class A (6,698,846) (1,375,758) (11,155,505) (8,510,101) (2,131,033)
Class B (714,328) (283,561) (735,278) (2,367,643) (141,463)
Class C -- -- (4,132,890) (945,891) --
Net asset value of shares exchanged
Class A 3,033,129 1,151,393 4,440,205 4,963,466 1,261,515
Class B (3,033,129) (1,151,393) (4,440,205) (4,963,466) (1,261,515)
- ------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM FUND SHARE TRANSACTIONS $ (2,609,570) $ 331,772 $ (1,006,622) $ (579,884) $ (492,445)
- ------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS $ (2,527,445) $ 359,382 $ (1,096,578) $ (625,207) $ (576,530)
- ------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 31,096,317 $ 8,564,905 $ 60,727,921 $52,026,429 $ 11,016,448
- ------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ 28,568,872 $ 8,924,287 $ 59,631,343 $51,401,222 $ 10,439,918
- ------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed
(distributions in excess of) net
investment income included in net assets
- ------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ (54,393) $ 50,936 $ (87,829) $ (49,074) $ (19,576)
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
16
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
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 $ 1,853,923 $ 2,984,365 $ 1,028,033 $ 2,335,635
Net realized gain 167,298 367,409 25,486 555,688
Net change in unrealized appreciation
(depreciation) (303,151) (13,529) (81,392) (774,579)
- -------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 1,718,070 $ 3,338,245 $ 972,127 $ 2,116,744
- -------------------------------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (1,668,828) $ (2,615,897) $ (909,646) $ (1,926,225)
Class B (183,025) (260,257) (121,712) (204,064)
Class C -- (95,851) -- (207,418)
In excess of net investment income
Class A -- -- (20,743) --
Class B (919) -- -- --
Class C -- (726) -- --
- -------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (1,852,772) $ (2,972,731) $ (1,052,101) $ (2,337,707)
- -------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial
interest --
Proceeds from sale of shares
Class A $ 381,983 $ 1,246,351 $ 402,554 $ 597,926
Class B 599,064 1,074,287 605,499 464,936
Class C -- 1,408,720 -- 1,237,308
Issued in reorganization of EV
Traditional and Classic Limited
Maturity Municipals Funds
Class A 839,250 543,752 1,671,340 --
Class C -- 2,285,786 -- 5,132,765
Net asset value of shares issued to
shareholders
in payment of distributions
declared
Class A 980,571 1,367,952 544,757 813,506
Class B 143,996 188,523 80,845 134,020
Class C -- 64,571 -- 151,274
Cost of shares redeemed
Class A (6,663,082) (12,152,775) (2,703,497) (8,402,426)
Class B (999,616) (1,343,662) (304,762) (819,038)
Class C -- (1,033,218) -- (689,222)
Net asset value of shares exchanged
Class A 5,301,665 7,108,382 2,422,090 4,252,261
Class B (5,301,665) (7,108,382) (2,422,090) (4,252,261)
- -------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM FUND SHARE TRANSACTIONS $ (4,717,834) $ (6,349,713) $ 296,736 $ (1,378,951)
- -------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS $ (4,852,536) $ (5,984,199) $ 216,762 $ (1,599,914)
- -------------------------------------------------------------------------------------------------------
Net Assets
- -------------------------------------------------------------------------------------------------------
At beginning of year $ 44,499,444 $ 71,662,495 $ 22,362,750 $ 52,237,268
- -------------------------------------------------------------------------------------------------------
AT END OF YEAR $ 39,646,908 $ 65,678,296 $ 22,579,512 $ 50,637,354
- -------------------------------------------------------------------------------------------------------
Accumulated undistributed
(distributions in excess of) net
investment income included in net assets
- -------------------------------------------------------------------------------------------------------
AT END OF YEAR $ (40,140) $ (60,337) $ 86,726 $ (23,708)
- -------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
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 $ 1,497,285 $ 368,076 $ 3,098,121 $ 2,476,810 $ 483,118
Net realized gain (loss) 433,367 4,051 (94,660) 17,484 (124,545)
Net change in unrealized appreciation
(depreciation) 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 --
From net investment income
Class A $ (936,871) $ (144,583) $ (2,004,916) $ (1,572,765) $ (232,658)
Class B (570,677) (229,255) (1,064,705) (860,024) (258,458)
In excess of net investment income
Class A (12,257) (4,392) -- -- (15,799)
Class B (23,588) -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (1,543,393) $ (378,230) $ (3,069,621) $ (2,432,789) $ (506,915)
- ------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial
interest --
Proceeds from sale of shares
Class B $ 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 A 360,909 67,528 730,455 789,937 98,883
Class B 279,878 148,460 532,282 559,559 180,331
Cost of shares redeemed
Class A (8,438,995) (1,235,782) (21,116,043) (11,235,114) (1,557,577)
Class B (3,400,466) (1,943,632) (5,629,314) (5,707,875) (2,203,538)
Net asset value of shares exchanged
Class A 18,496,757 6,549,972 34,915,282 29,034,216 10,124,352
Class B (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 $ 65,085,329 $ 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 $ (38,399) $ 59,735 $ (75,311) $ (15,000) $ (8,850)
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
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) (187,074) 1,088,247 131,062 406,226
Net change in unrealized appreciation
(depreciation) 1,648,350 2,844,140 698,195 2,059,464
- -------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 3,607,425 $ 7,435,180 $ 1,843,173 $ 4,948,357
- -------------------------------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (1,338,591) $ (2,200,746) $ (462,064) $ (1,659,315)
Class B (788,446) (1,281,208) (562,959) (781,095)
In excess of net investment income
Class A -- -- (11,117) --
- -------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (2,127,037) $ (3,481,954) $ (1,036,140) $ (2,440,410)
- -------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial
interest --
Proceeds from sale of shares
Class B $ 1,195,175 $ 1,170,922 $ 403,230 $ 656,038
Net asset value of shares issued to
shareholders
in payment of distributions
declared
Class A 739,740 1,153,120 282,566 683,229
Class B 575,875 819,416 376,372 453,998
Cost of shares redeemed
Class A (11,566,067) (19,290,897) (2,893,993) (9,812,773)
Class B (4,846,604) (12,172,312) (2,151,477) (4,129,149)
Net asset value of shares exchanged
Class A 23,754,168 39,673,864 19,609,155 23,736,946
Class B (23,754,168) (39,673,864) (19,609,155) (23,736,946)
- -------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM FUND
SHARE TRANSACTIONS $ (13,901,881) $ (28,319,751) $ (3,983,302) $ (12,148,657)
- -------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (12,421,493) $ (24,366,525) $ (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 $ (41,276) $ (71,690) $ 109,800 $ (27,213)
- -------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CALIFORNIA LIMITED FUND
-----------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
-----------------------------------------------------------------------------------------------
1999(1) 1998 1997 1996 1995
-------------------- -------------------- ----------------------- -------- --------
CLASS A CLASS B CLASS A CLASS B CLASS A(2) CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Net asset value --
Beginning of year $10.330 $10.330 $ 9.980 $ 9.980 $ 9.940 $10.080 $ 9.950 $10.050
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.453 $ 0.382 $ 0.459 $ 0.386(1) $ 0.363 $ 0.393 $ 0.385 $ 0.367
Net realized and
unrealized gain
(loss) 0.030 0.025 0.362 0.362 0.037(3) (0.097) 0.134 (0.027)
- -----------------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM
OPERATIONS $ 0.483 $ 0.407 $ 0.821 $ 0.748 $ 0.400 $ 0.296 $ 0.519 $ 0.340
- -----------------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------------
From net investment
income $(0.463) $(0.382) $(0.459) $(0.386) $(0.360) $(0.393) $(0.385) $(0.367)
In excess of net
investment income --(4) (0.005) (0.012) (0.012) -- (0.003) (0.004) (0.066)
From net realized gain -- -- -- -- -- -- -- (0.007)
- -----------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.463) $(0.387) $(0.471) $(0.398) $(0.360) $(0.396) $(0.389) $(0.440)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END
OF YEAR $10.350 $10.350 $10.330 $10.330 $ 9.980 $ 9.980 $10.080 $ 9.950
- -----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(5) 4.56% 3.99% 8.56% 7.60% 3.84% 2.99% 5.27% 3.53%
- -----------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------
Net assets, end of year
(000's omitted) $26,170 $ 2,399 $25,780 $ 5,316 $14,718 $25,386 $54,241 $73,857
Ratios (As a percentage
of average daily net
assets):
Expenses(6)(7) 0.95% 1.62% 0.96% 1.76% 0.90%(8) 1.71% 1.63% 1.55%
Expenses after
custodian fee
reduction(6) 0.94% 1.61% 0.94% 1.74% 0.89%(8) 1.70% 1.59% --
Net investment
income 4.37% 3.71% 4.51% 3.76% 4.76%(8) 3.91% 3.81% 3.72%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) For the period from the commencement of offering of Class A shares, June
27, 1996, to March 31, 1997.
(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) Distributions in excess of net investment income are less than $0.001 per
share.
(5) 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.
(6) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(7) 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.
(8) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CONNECTICUT LIMITED FUND
-----------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
-----------------------------------------------------------------------------------------------
1999(1) 1998 1997 1996 1995
-------------------- -------------------- ----------------------- -------- --------
CLASS A CLASS B CLASS A CLASS B CLASS A(2) CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Net asset value --
Beginning of year $10.110 $10.110 $ 9.790 $ 9.790 $ 9.870 $ 9.850 $ 9.690 $ 9.690
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.431 $ 0.365 $ 0.429 $ 0.357(1) $ 0.087 $ 0.398 $ 0.379 $ 0.373
Net realized and
unrealized gain
(loss) 0.031 0.025 0.333 0.333 (0.082) (0.089) 0.150 0.026
- -----------------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM
OPERATIONS $ 0.462 $ 0.390 $ 0.762 $ 0.690 $ 0.005 $ 0.309 $ 0.529 $ 0.399
- -----------------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------------
From net investment
income $(0.431) $(0.370) $(0.429) $(0.370) $(0.085) $(0.369) $(0.369) $(0.373)
In excess of net
investment income (0.011) -- (0.013) -- -- -- -- (0.026)
- -----------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.442) $(0.370) $(0.442) $(0.370) $(0.085) $(0.369) $(0.369) $(0.399)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END
OF YEAR $10.130 $10.130 $10.110 $10.110 $ 9.790 $ 9.790 $ 9.850 $ 9.690
- -----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 4.45% 3.90% 7.99% 7.02% (0.13)% 3.21% 5.50% 4.27%
- -----------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
- -----------------------------------------------------------------------------------------------------------------------
Net assets, end of year
(000's omitted) $ 7,514 $ 1,410 $ 6,034 $ 2,531 $ 586 $10,227 $13,014 $15,613
Ratios (As a percentage
of average daily net
assets):
Net expenses(4)(5) 1.16% 1.81% 1.20% 1.92% 0.70%(6) 1.72% 1.53% 1.23%
Net expenses after
custodian fee
reduction(4) 1.13% 1.78% 1.18% 1.90% 0.66%(6) 1.68% 1.49% --
Net investment
income 4.25% 3.60% 4.26% 3.62% 5.06%(6) 3.93% 3.78% 3.89%
- -----------------------------------------------------------------------------------------------------------------------
+ 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(4)(5) 1.39% 2.04% 1.43% 2.15% 0.94%(6) 1.96% 1.86% 1.81%
Expenses after
custodian fee
reduction(4) 1.36% 2.01% 1.41% 2.13% 0.90%(6) 1.92% -- --
Net investment
income 4.02% 3.37% 4.03% 3.39% 4.82%(6) 3.69% 3.45% 3.31%
Net investment income
per share $ 0.408 $ 0.342 $ 0.406 $ 0.334 $ 0.083 $ 0.374 $ 0.346 $ 0.317
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) For the period from the commencement of offering of Class A shares, January
21, 1997, to March 31, 1997.
(3) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return is
not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) 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 the
year ended March 31, 1995 have not been adjusted to reflect this change.
(6) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
21
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FLORIDA LIMITED FUND
-----------------------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
-----------------------------------------------------------------------------------------------------------
1999(1) 1998 1997 1996 1995
-------------------------------- -------------------- ----------------------- -------- --------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS A(2) CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value --
Beginning of year $10.290 $10.290 $ 9.730 $ 9.980 $ 9.980 $10.030 $10.170 $10.080 $10.060
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.453 $ 0.378 $ 0.356 $ 0.465 $ 0.391(1) $ 0.357 $ 0.388 $ 0.383 $ 0.375
Net realized and
unrealized gain
(loss) (0.018) (0.018) (0.012) 0.307 0.307 (0.049) (0.185) 0.096 0.090
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM
OPERATIONS $ 0.435 $ 0.360 $ 0.344 $ 0.772 $ 0.698 $ 0.308 $ 0.203 $ 0.479 $ 0.465
- -----------------------------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------------------------
From net investment
income $(0.455) $(0.378) $(0.364) $(0.462) $(0.388) $(0.357) $(0.388) $(0.383) $(0.375)
In excess of net
investment income -- (0.002) -- -- -- (0.001) (0.005) (0.006) (0.058)
From net realized gain -- -- -- -- -- -- -- -- (0.012)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.455) $(0.380) $(0.364) $(0.462) $(0.388) $(0.358) $(0.393) $(0.389) $(0.445)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END
OF YEAR $10.270 $10.270 $ 9.710 $10.290 $10.290 $ 9.980 $ 9.980 $10.170 $10.080
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 4.10% 3.54% 3.57% 8.06% 7.08% 2.88% 2.05% 4.78% 4.79%
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year
(000's omitted) $49,355 $ 6,326 $ 3,950 $50,116 $10,612 $34,321 $48,418 $116,781 $149,581
Ratios (As a percentage
of average daily net
assets):
Expenses(4)(5) 0.90% 1.63% 1.66% 0.90% 1.66% 0.89%(6) 1.65% 1.57% 1.50%
Expenses after
custodian fee
reduction(4) 0.88% 1.61% 1.64% 0.88% 1.64% 0.87%(6) 1.63% 1.56% --
Net investment
income 4.38% 3.67% 3.65% 4.61% 3.84% 4.65%(6) 3.86% 3.74% 3.77%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) For the period from the commencement of offering of Class A shares, June
27, 1996, to March 31, 1997.
(3) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return is
not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) 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.
(6) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
22
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MASSACHUSETTS LIMITED FUND
-----------------------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
-----------------------------------------------------------------------------------------------------------
1999(1) 1998 1997 1996 1995
-------------------------------- -------------------- ----------------------- -------- --------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS A(2) CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value --
Beginning of year $10.330 $10.330 $ 9.880 $ 9.990 $ 9.990 $ 9.940 $10.100 $ 9.980 $ 9.960
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.450 $ 0.373 $ 0.354 $ 0.457 $ 0.384(1) $ 0.359 $ 0.378 $ 0.383 $ 0.383
Net realized and
unrealized gain
(loss) (0.004) (0.005) (0.006) 0.339 0.339 0.040(3) (0.106) 0.126 0.082
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM
OPERATIONS $ 0.446 $ 0.368 $ 0.348 $ 0.796 $ 0.723 $ 0.399 $ 0.272 $ 0.509 $ 0.465
- -----------------------------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------------------------
From net investment
income $(0.456) $(0.373) $(0.360) $(0.456) $(0.383) $(0.349) $(0.382) $(0.383) $(0.383)
In excess of net
investment income -- (0.005) (0.008) -- -- -- -- (0.006) (0.055)
From net realized gain -- -- -- -- -- -- -- -- (0.007)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.456) $(0.378) $(0.368) $(0.456) $(0.383) $(0.349) $(0.382) $(0.389) $(0.445)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END
OF YEAR $10.320 $10.320 $ 9.860 $10.330 $10.330 $ 9.990 $ 9.990 $10.100 $ 9.980
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(4) 4.19% 3.60% 3.56% 8.29% 7.33% 3.83% 2.74% 5.08% 4.84%
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year
(000's omitted) $43,436 $ 2,747 $ 5,217 $43,575 $ 8,451 $23,995 $41,090 $91,809 $113,338
Ratios (As a percentage
of average daily net
assets):
Expenses(5)(6) 0.94% 1.70% 1.70% 0.96% 1.70% 0.91%(7) 1.68% 1.60% 1.57%
Expenses after
custodian fee
reduction(5) 0.91% 1.67% 1.67% 0.92% 1.66% 0.89%(7) 1.66% 1.58% --
Net investment
income 4.35% 3.61% 3.57% 4.53% 3.85% 4.76%(7) 3.90% 3.71% 3.89%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) For the period from the commencement of offering of Class A shares, June
27, 1996, to March 31, 1997.
(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 its corresponding 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
23
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MICHIGAN LIMITED FUND
-----------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
-----------------------------------------------------------------------------------------------
1999(1) 1998 1997 1996 1995
-------------------- -------------------- ----------------------- -------- --------
CLASS A CLASS B CLASS A CLASS B CLASS A(2) CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Net asset value --
Beginning of year $10.040 $10.040 $ 9.740 $ 9.740 $ 9.740 $ 9.730 $ 9.630 $ 9.650
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.424 $ 0.356 $ 0.430 $ 0.357(1) $ 0.201 $ 0.382 $ 0.383 $ 0.364
Net realized and
unrealized gain
(loss) (0.056) (0.053) 0.329 0.329 0.001 0.012 0.090 0.030
- -----------------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM
OPERATIONS $ 0.368 $ 0.303 $ 0.759 $ 0.686 $ 0.202 $ 0.394 $ 0.473 $ 0.394
- -----------------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------------
From net investment
income $(0.424) $(0.368) $(0.430) $(0.386) $(0.201) $(0.384) $(0.373) $(0.364)
In excess of net
investment income (0.014) (0.005) (0.029) -- (0.001) -- -- (0.050)
- -----------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.438) $(0.373) $(0.459) $(0.386) $(0.202) $(0.384) $(0.373) $(0.414)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END
OF YEAR $ 9.970 $ 9.970 $10.040 $10.040 $ 9.740 $ 9.740 $ 9.730 $ 9.630
- -----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 3.53% 3.06% 8.23% 7.24% 1.89% 4.14% 4.95% 4.24%
- -----------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
- -----------------------------------------------------------------------------------------------------------------------
Net assets, end of year
(000's omitted) $ 9,786 $ 654 $ 9,177 $ 1,839 $ 406 $13,431 $18,705 $26,048
Ratios (As a percentage
of average daily net
assets):
Net expenses(4)(5) 1.32% 2.02% 1.36% 2.04% 1.18%(6) 1.99% 1.78% 1.55%
Net expenses after
custodian fee
reduction(4) 1.29% 1.99% 1.32% 2.00% 1.15%(6) 1.96% 1.75% --
Net investment
income 4.23% 3.56% 4.32% 3.72% 4.56%(6) 3.91% 3.92% 3.82%
- -----------------------------------------------------------------------------------------------------------------------
+ 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(4) 1.66%
Net investment
income 3.71%
Net investment income
per share $ 0.354
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) For the period from the commencement of offering of Class A shares, October
22, 1996, to March 31, 1997.
(3) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return is
not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) 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 the
year ended March 31, 1995 have not been adjusted to reflect this change.
(6) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
24
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
NEW JERSEY LIMITED FUND
-----------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
-----------------------------------------------------------------------------------------------
1999(1) 1998 1997 1996 1995
-------------------- -------------------- ----------------------- -------- --------
CLASS A CLASS B CLASS A CLASS B CLASS A(2) CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Net asset value --
Beginning of year $10.350 $10.350 $10.070 $10.070 $ 9.960 $10.110 $10.020 $10.030
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.463 $ 0.383 $ 0.464 $ 0.391(1) $ 0.362 $ 0.375 $ 0.383 $ 0.370
Net realized and
unrealized gain
(loss) (0.030) (0.028) 0.279 0.279 0.102(3) (0.026) 0.093 0.068
- -----------------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM
OPERATIONS $ 0.433 $ 0.355 $ 0.743 $ 0.670 $ 0.464 $ 0.349 $ 0.476 $ 0.438
- -----------------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------------
From net investment
income $(0.463) $(0.383) $(0.463) $(0.390) $(0.354) $(0.389) $(0.383) $(0.370)
In excess of net
investment income -- (0.002) -- -- -- -- (0.003) (0.060)
From net realized gain -- -- -- -- -- -- -- (0.018)
- -----------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.463) $(0.385) $(0.463) $(0.390) $(0.354) $(0.389) $(0.386) $(0.448)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END
OF YEAR $10.320 $10.320 $10.350 $10.350 $10.070 $10.070 $10.110 $10.020
- -----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(4) 4.04% 3.46% 7.69% 6.73% 4.48% 3.53% 4.79% 4.53%
- -----------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------
Net assets, end of year
(000's omitted) $36,591 $ 3,056 $35,879 $ 8,620 $22,230 $34,691 $78,039 $93,361
Ratios (As a percentage
of average daily net
assets):
Expenses(5)(6) 0.95% 1.72% 0.99% 1.72% 0.88%(7) 1.69% 1.60% 1.56%
Expenses after
custodian fee
reduction(5) 0.95% 1.72% 0.98% 1.71% 0.85%(7) 1.66% 1.58% --
Net investment
income 4.47% 3.70% 4.56% 3.85% 4.75%(7) 3.90% 3.77% 3.73%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) For the period from the commencement of offering of Class A shares, June
27, 1996, to March 31, 1997.
(3) The per share amounts are 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.
(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 its corresponding 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
25
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
NEW YORK LIMITED FUND
-----------------------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
-----------------------------------------------------------------------------------------------------------
1999(1) 1998 1997 1996 1995
-------------------------------- -------------------- ----------------------- -------- --------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS A(2) CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value --
Beginning of year $10.510 $10.510 $ 9.950 $10.040 $10.040 $10.000 $10.150 $10.030 $10.040
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.468 $ 0.386 $ 0.368 $ 0.461 $ 0.388(1) $ 0.357 $ 0.387 $ 0.374 $ 0.378
Net realized and
unrealized gain
(loss) 0.047 0.050 0.053 0.470 0.470 0.035(3) (0.109) 0.135 0.049
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM
OPERATIONS $ 0.515 $ 0.436 $ 0.421 $ 0.931 $ 0.858 $ 0.392 $ 0.278 $ 0.509 $ 0.427
- -----------------------------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------------------------
From net investment
income $(0.465) $(0.386) $(0.368) $(0.461) $(0.388) $(0.352) $(0.387) $(0.374) $(0.378)
In excess of net
investment income -- -- (0.003) -- -- -- (0.001) (0.015) (0.055)
From net realized gain -- -- -- -- -- -- -- -- (0.004)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.465) $(0.386) $(0.371) $(0.461) $(0.388) $(0.352) $(0.388) $(0.389) $(0.437)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END
OF YEAR $10.560 $10.560 $10.000 $10.510 $10.510 $10.040 $10.040 $10.150 $10.030
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(4) 4.78% 4.20% 4.28% 9.61% 8.65% 3.74% 2.79% 5.12% 4.41%
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year
(000's omitted) $57,864 $ 5,078 $ 2,737 $59,442 $12,220 $35,932 $60,097 $133,846 $166,691
Ratios (As a percentage
of average daily net
assets):
Expenses(5)(6) 0.91% 1.68% 1.67% 0.93% 1.70% 0.88%(7) 1.63% 1.57% 1.51%
Expenses after
custodian fee
reduction(5) 0.91% 1.68% 1.67% 0.91% 1.68% 0.86%(7) 1.61% 1.55% --
Net investment
income 4.42% 3.67% 3.65% 4.50% 3.77% 4.67%(7) 3.84% 3.66% 3.81%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) For the period from the commencement of offering of Class A shares, June
27, 1996, to March 31, 1997.
(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 its corresponding 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
26
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OHIO LIMITED FUND
-----------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
-----------------------------------------------------------------------------------------------
1999(1) 1998 1997 1996 1995
-------------------- -------------------- ----------------------- -------- --------
CLASS A CLASS B CLASS A CLASS B CLASS A(2) CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Net asset value --
Beginning of year $10.140 $10.140 $ 9.820 $ 9.820 $ 9.860 $ 9.840 $ 9.730 $ 9.730
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.458 $ 0.386 $ 0.461 $ 0.389(1) $ 0.205 $ 0.408 $ 0.398 $ 0.382
Net realized and
unrealized gain
(loss) (0.019) (0.023) 0.331 0.331 (0.037) (0.033) 0.085 0.032
- -----------------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM
OPERATIONS $ 0.439 $ 0.363 $ 0.792 $ 0.720 $ 0.168 $ 0.375 $ 0.483 $ 0.414
- -----------------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------------
From net investment
income $(0.453) $(0.393) $(0.461) $(0.400) $(0.205) $(0.395) $(0.373) $(0.382)
In excess of net
investment income (0.016) -- (0.011) -- (0.003) -- -- (0.032)
- -----------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.469) $(0.393) $(0.472) $(0.400) $(0.208) $(0.395) $(0.373) $(0.414)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END
OF YEAR $10.110 $10.110 $10.140 $10.140 $ 9.820 $ 9.820 $ 9.840 $ 9.730
- -----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 4.19% 3.62% 8.40% 7.43% 1.51% 3.89% 5.07% 4.41%
- -----------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
- -----------------------------------------------------------------------------------------------------------------------
Net assets, end of year
(000's omitted) $20,375 $ 2,205 $18,114 $ 4,249 $ 952 $24,587 $29,759 $34,279
Ratios (As a percentage
of average daily net
assets):
Net expenses(4)(5) 1.03% 1.75% 1.11% 1.80% 1.08%(6) 1.84% 1.67% 1.49%
Net expenses after
custodian fee
reduction(4) 1.00% 1.72% -- -- 1.05%(6) 1.81% 1.65% --
Net investment
income 4.51% 3.79% 4.57% 3.92% 4.75%(6) 4.06% 4.04% 3.95%
- -----------------------------------------------------------------------------------------------------------------------
+ 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(4) 1.60%
Net investment
income 3.84%
Net investment income
per share $ 0.371
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) For the period from the commencement of offering of Class A shares, October
22, 1996, to March 31, 1997.
(3) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return is
not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) 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 the
year ended March 31, 1995 have not been adjusted to reflect this change.
(6) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
27
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PENNSYLVANIA LIMITED FUND
-----------------------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
-----------------------------------------------------------------------------------------------------------
1999(1) 1998 1997 1996 1995
-------------------------------- -------------------- ----------------------- -------- --------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS A(2) CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value --
Beginning of year $10.550 $10.550 $ 9.980 $10.100 $10.100 $10.030 $10.190 $10.090 $10.100
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.477 $ 0.400 $ 0.374 $ 0.481 $ 0.407(1) $ 0.371 $ 0.392 $ 0.388 $ 0.374
Net realized and
unrealized gain
(loss) (0.051) (0.053) (0.042) 0.445 0.445 0.063(3) (0.081) 0.110 0.065
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM
OPERATIONS $ 0.426 $ 0.347 $ 0.332 $ 0.926 $ 0.852 $ 0.434 $ 0.311 $ 0.498 $ 0.439
- -----------------------------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------------------------
From net investment
income $(0.476) $(0.397) $(0.382) $(0.476) $(0.402) $(0.364) $(0.401) $(0.388) $(0.374)
In excess of net
investment income -- -- -- -- -- -- -- (0.010) (0.069)
From net realized gain -- -- -- -- -- -- -- -- (0.006)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.476) $(0.397) $(0.382) $(0.476) $(0.402) $(0.364) $(0.401) $(0.398) $(0.449)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END
OF YEAR $10.500 $10.500 $ 9.930 $10.550 $10.550 $10.100 $10.100 $10.190 $10.090
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(4) 3.90% 3.33% 3.36% 9.52% 8.55% 4.15% 3.12% 4.98% 4.50%
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year
(000's omitted) $41,048 $ 3,787 $ 5,803 $43,961 $ 8,277 $27,907 $33,971 $84,407 $103,553
Ratios (As a percentage
of average daily net
assets):
Expenses(5)(6) 0.94% 1.69% 1.71% 0.97% 1.71% 0.90%(7) 1.69% 1.62% 1.57%
Expenses after
custodian fee
reduction(5) 0.92% 1.67% 1.69% 0.95% 1.69% 0.88%(7) 1.67% 1.60% --
Net investment
income 4.52% 3.79% 3.74% 4.67% 3.95% 4.83%(7) 4.05% 3.79% 3.75%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) For the period from the commencement of offering of Class A shares, June
27, 1996, to March 31, 1997.
(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 its corresponding 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
28
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
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 ten Funds, nine of which
are included in these financial statements. They include Eaton Vance
California Limited Maturity Municipals Fund ("California Limited Fund"),
Eaton Vance Connecticut Limited Maturity Municipals Fund ("Connecticut
Limited Fund"), Eaton Vance Florida Limited Maturity Municipals Fund
("Florida Limited Fund"), Eaton Vance Massachusetts Limited Maturity
Municipals Fund ("Massachusetts Limited Fund"), Eaton Vance Michigan Limited
Maturity Municipals Fund ("Michigan Limited Fund"), Eaton Vance New Jersey
Limited Maturity Municipals Fund ("New Jersey Limited Fund"), Eaton Vance New
York Limited Maturity Municipals Fund ("New York Limited Fund"), Eaton Vance
Ohio Limited Maturity Municipals Fund ("Ohio Limited Fund") and Eaton Vance
Pennsylvania Limited Maturity Municipals Fund ("Pennsylvania Limited Fund").
The Funds may offer three classes of shares: Class A (formerly Class II),
Class B (formerly Class I) and Class C. 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 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 A shares. All classes of shares
have equal rights to assets and voting privileges. Realized and unrealized
gains and losses are allocated daily to each class of shares based on the
relative net assets of each class to the total net assets of the Fund. Net
investment income, other than class specific expenses, is allocated daily to
each class of shares based upon the ratio of the value of each class' paid
shares to the total value of all paid shares. Each class of shares differs in
its distribution plan and certain other class specific expenses. 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
California Limited Fund invests its assets in the California Limited Maturity
Municipals Portfolio, the Connecticut Limited Fund invests its assets in the
Connecticut Limited Maturity Municipals Portfolio, the Florida Limited Fund
invests its assets in the Florida Limited Maturity Municipals Portfolio, the
Massachusetts Limited Fund invests its assets in the Massachusetts Limited
Maturity Municipals Portfolio, the Michigan Limited Fund invests its assets
in the Michigan Limited Maturity Municipals Portfolio, the New Jersey Limited
Fund invests its assets in the New Jersey Limited Maturity Municipals
Portfolio, the New York Limited Fund invests its assets in the New York
Limited Maturity Municipals Portfolio, the Ohio Limited Fund invests its
assets in the Ohio Limited Maturity Municipals Portfolio and the 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 (99.99% at March 31, 1999 for each Fund except
Connecticut Limited Fund, Michigan Limited Fund and Ohio Limited Fund which
were 98.5%, 98.7% and 99.4%, 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.
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, 1999,
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
29
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
shareholders which would otherwise be necessary to relieve the Funds of any
liability for federal income or excise taxes. A portion of such capital loss
carryovers were acquired through the Fund Reorganization (see Note 8) and may
be subject to certain limitations. The amounts and expiration dates of the
capital loss carryovers are as follows:
<TABLE>
<CAPTION>
FUND AMOUNT EXPIRES
<S> <C> <C>
- --------------------------------------------------------------------------
California Limited Fund $ 49,293 March 31, 2005
2,010,530 March 31, 2004
97,718 March 31, 2003
Connecticut Limited Fund 595 March 31, 2006
2,392 March 31, 2005
298,644 March 31, 2004
235,754 March 31, 2003
Florida Limited Fund 355,606 March 31, 2006
133,020 March 31, 2005
2,955,585 March 31, 2004
169,273 March 31, 2003
Massachusetts Limited Fund 197,971 March 31, 2006
30,086 March 31, 2005
1,533,591 March 31, 2004
78,192 March 31, 2003
Michigan Limited Fund 128,453 March 31, 2006
910,654 March 31, 2004
409,992 March 31, 2003
New Jersey Limited Fund 213,255 March 31, 2006
1,767,217 March 31, 2004
321,276 March 31, 2003
New York Limited Fund 20,866 March 31, 2005
1,537,944 March 31, 2004
Ohio Limited Fund 762,343 March 31, 2004
580,024 March 31, 2003
Pennsylvania Limited Fund 25,743 March 31, 2005
1,041,487 March 31, 2004
</TABLE>
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 intends 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
30
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
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. 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 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:
<TABLE>
<CAPTION>
CALIFORNIA LIMITED FUND
-------------------------------
YEAR ENDED YEAR ENDED
CLASS A MARCH 31, 1999 MARCH 31, 1998
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 35,063 --
Issued to shareholders electing to
receive payment of distribution in Fund
shares 47,022 35,206
Redemptions (645,502) (822,966)
Exchange to Class A shares 293,151 1,807,527
Issued to EV Traditional California
Limited Fund Shareholders 303,260 --
- -------------------------------------------------------------------------
NET INCREASE 32,994 1,019,767
- -------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CALIFORNIA LIMITED FUND
-------------------------------
YEAR ENDED YEAR ENDED
CLASS B MARCH 31, 1999 MARCH 31, 1998
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 72,974 85,408
Issued to shareholders electing to
receive payment of distribution in Fund
shares 5,973 27,495
Redemptions (68,913) (335,075)
Exchange to Class A shares (293,151) (1,807,527)
- -------------------------------------------------------------------------
NET DECREASE (283,117) (2,029,699)
- -------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CONNECTICUT LIMITED FUND
-------------------------------
YEAR ENDED YEAR ENDED
CLASS A MARCH 31, 1999 MARCH 31, 1998
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 45,699 --
Issued to shareholders electing to
receive payment of distribution in Fund
shares 15,432 6,706
Redemptions (135,597) (122,878)
Exchange to Class A shares 113,698 653,370
Issued to EV Traditional Connecticut
Limited Fund Shareholders 105,182 --
- -------------------------------------------------------------------------
NET INCREASE 144,414 537,198
- -------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CONNECTICUT LIMITED FUND
-------------------------------
YEAR ENDED YEAR ENDED
CLASS B MARCH 31, 1999 MARCH 31, 1998
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 25,949 39,260
Issued to shareholders electing to
receive payment of distribution in Fund
shares 4,567 14,858
Redemptions (27,899) (195,469)
Exchange to Class A shares (113,698) (653,370)
- -------------------------------------------------------------------------
NET DECREASE (111,081) (794,721)
- -------------------------------------------------------------------------
</TABLE>
31
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
<TABLE>
<CAPTION>
FLORIDA LIMITED FUND
-------------------------------
YEAR ENDED YEAR ENDED
CLASS A MARCH 31, 1999 MARCH 31, 1998
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 67,765 --
Issued to shareholders electing to
receive payment of distribution in Fund
shares 79,022 71,474
Redemptions (1,081,189) (2,067,316)
Exchange to Class A shares 430,954 3,424,984
Issued to EV Traditional Florida
Limited Fund Shareholders 439,652 --
- -------------------------------------------------------------------------
NET INCREASE (DECREASE) (63,796) 1,429,142
- -------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FLORIDA LIMITED FUND
-------------------------------
YEAR ENDED YEAR ENDED
CLASS B MARCH 31, 1999 MARCH 31, 1998
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 79,523 105,262
Issued to shareholders electing to
receive payment of distribution in Fund
shares 7,697 52,346
Redemptions (71,236) (554,732)
Exchange to Class A shares (430,954) (3,424,984)
- -------------------------------------------------------------------------
NET DECREASE (414,970) (3,822,108)
- -------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FLORIDA LIMITED FUND
-------------------------------
YEAR ENDED
CLASS C MARCH 31, 1999
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 146,199
Issued to shareholders electing to
receive payment of distribution in Fund
shares 10,261
Redemptions (422,687)
Issued to EV Classic Florida
Limited Fund Shareholders 673,148
- -------------------------------------------------------------------------
NET INCREASE 406,921
- -------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MASSACHUSETTS LIMITED FUND
-------------------------------
YEAR ENDED YEAR ENDED
CLASS A MARCH 31, 1999 MARCH 31, 1998
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 239,891 --
Issued to shareholders electing to
receive payment of distribution in Fund
shares 91,990 77,012
Redemptions (821,910) (1,097,974)
Exchange to Class A shares 479,506 2,840,002
- -------------------------------------------------------------------------
NET INCREASE (DECREASE) (10,523) 1,819,040
- -------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MASSACHUSETTS LIMITED FUND
-------------------------------
YEAR ENDED YEAR ENDED
CLASS B MARCH 31, 1999 MARCH 31, 1998
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 143,453 52,696
Issued to shareholders electing to
receive payment of distribution in Fund
shares 11,932 54,876
Redemptions (228,227) (561,592)
Exchange to Class A shares (479,506) (2,840,002)
- -------------------------------------------------------------------------
NET DECREASE (552,348) (3,294,022)
- -------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MASSACHUSETTS LIMITED FUND
-------------------------------
YEAR ENDED
CLASS C MARCH 31, 1999
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 160,484
Issued to shareholders electing to
receive payment of distribution in Fund
shares 13,021
Redemptions (95,723)
Issued to EV Classic Massachusetts
Limited Fund Shareholders 451,136
- -------------------------------------------------------------------------
NET INCREASE 528,918
- -------------------------------------------------------------------------
</TABLE>
32
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
<TABLE>
<CAPTION>
MICHIGAN LIMITED FUND
-------------------------------
YEAR ENDED YEAR ENDED
CLASS A MARCH 31, 1999 MARCH 31, 1998
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 44,059 --
Issued to shareholders electing to
receive payment of distribution in Fund
shares 21,324 9,875
Redemptions (212,469) (156,656)
Exchange to Class A shares 125,890 1,018,871
Issued to EV Traditional Michigan
Limited Fund Shareholders 89,196 --
- -------------------------------------------------------------------------
NET INCREASE 68,000 872,090
- -------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MICHIGAN LIMITED FUND
-------------------------------
YEAR ENDED YEAR ENDED
CLASS B MARCH 31, 1999 MARCH 31, 1998
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 19,565 28,674
Issued to shareholders electing to
receive payment of distribution in Fund
shares 2,839 18,182
Redemptions (14,047) (223,733)
Exchange to Class A shares (125,890) (1,018,871)
- -------------------------------------------------------------------------
NET DECREASE (117,533) (1,195,748)
- -------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NEW JERSEY LIMITED FUND
-------------------------------
YEAR ENDED YEAR ENDED
CLASS A MARCH 31, 1999 MARCH 31, 1998
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 36,737 --
Issued to shareholders electing to
receive payment of distribution in Fund
shares 94,464 71,798
Redemptions (642,677) (1,126,637)
Exchange to Class A shares 511,723 2,312,029
Issued to EV Traditional New Jersey
Limited Fund Shareholders 81,047 --
- -------------------------------------------------------------------------
NET INCREASE 81,294 1,257,190
- -------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NEW JERSEY LIMITED FUND
-------------------------------
YEAR ENDED YEAR ENDED
CLASS B MARCH 31, 1999 MARCH 31, 1998
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 56,963 116,912
Issued to shareholders electing to
receive payment of distribution in Fund
shares 13,888 56,169
Redemptions (96,239) (474,069)
Exchange to Class A shares (511,723) (2,312,029)
- -------------------------------------------------------------------------
NET DECREASE (537,111) (2,613,017)
- -------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NEW YORK LIMITED FUND
-------------------------------
YEAR ENDED YEAR ENDED
CLASS A MARCH 31, 1999 MARCH 31, 1998
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 118,314 --
Issued to shareholders electing to
receive payment of distribution in Fund
shares 129,324 110,830
Redemptions (1,151,988) (1,864,566)
Exchange to Class A shares 674,211 3,833,043
Issued to EV Traditional New York
Limited Fund Shareholders 51,712 --
- -------------------------------------------------------------------------
NET INCREASE (DECREASE) (178,427) 2,079,307
- -------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NEW YORK LIMITED FUND
-------------------------------
YEAR ENDED YEAR ENDED
CLASS B MARCH 31, 1999 MARCH 31, 1998
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 101,333 112,437
Issued to shareholders electing to
receive payment of distribution in Fund
shares 17,857 79,378
Redemptions (127,420) (1,178,702)
Exchange to Class A shares (674,211) (3,833,043)
- -------------------------------------------------------------------------
NET DECREASE (682,441) (4,819,930)
- -------------------------------------------------------------------------
</TABLE>
33
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
<TABLE>
<CAPTION>
NEW YORK LIMITED FUND
-------------------------------
YEAR ENDED
CLASS C MARCH 31, 1999
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 140,868
Issued to shareholders electing to
receive payment of distribution in Fund
shares 6,449
Redemptions (103,241)
Issued to EV Classic New York
Limited Fund Shareholders 229,639
- -------------------------------------------------------------------------
NET INCREASE 273,715
- -------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
OHIO LIMITED FUND
-------------------------------
YEAR ENDED YEAR ENDED
CLASS A MARCH 31, 1999 MARCH 31, 1998
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 39,510 --
Issued to shareholders electing to
receive payment of distribution in Fund
shares 53,583 27,898
Redemptions (266,104) (286,153)
Exchange to Class A shares 238,326 1,947,200
Issued to EV Traditional Ohio
Limited Fund Shareholders 164,848 --
- -------------------------------------------------------------------------
NET INCREASE 230,163 1,688,945
- -------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
OHIO LIMITED FUND
-------------------------------
YEAR ENDED YEAR ENDED
CLASS B MARCH 31, 1999 MARCH 31, 1998
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 59,687 40,352
Issued to shareholders electing to
receive payment of distribution in Fund
shares 7,956 37,539
Redemptions (29,956) (215,277)
Exchange to Class A shares (238,326) (1,947,200)
- -------------------------------------------------------------------------
NET DECREASE (200,639) (2,084,586)
- -------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PENNSYLVANIA LIMITED FUND
-------------------------------
YEAR ENDED YEAR ENDED
CLASS A MARCH 31, 1999 MARCH 31, 1998
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 56,567 --
Issued to shareholders electing to
receive payment of distribution in Fund
shares 77,080 65,498
Redemptions (797,334) (947,640)
Exchange to Class A shares 403,468 2,286,266
- -------------------------------------------------------------------------
NET INCREASE (DECREASE) (260,219) 1,404,124
- -------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PENNSYLVANIA LIMITED FUND
-------------------------------
YEAR ENDED YEAR ENDED
CLASS B MARCH 31, 1999 MARCH 31, 1998
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 44,074 62,800
Issued to shareholders electing to
receive payment of distribution in Fund
shares 12,704 43,872
Redemptions (77,641) (399,781)
Exchange to Class A shares (403,468) (2,286,266)
- -------------------------------------------------------------------------
NET DECREASE (424,331) (2,579,375)
- -------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PENNSYLVANIA LIMITED FUND
-------------------------------
YEAR ENDED
CLASS C MARCH 31, 1999
<S> <C> <C>
- -------------------------------------------------------------------------
Sales 123,863
Issued to shareholders electing to
receive payment of distribution in Fund
shares 15,159
Redemptions (69,088)
Issued to EV Classic Pennsylvania
Limited Fund Shareholders 514,215
- -------------------------------------------------------------------------
NET INCREASE 584,149
- -------------------------------------------------------------------------
</TABLE>
34
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
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). Eaton Vance
Distributors, Inc. (EVD), a subsidiary of EVM and the Funds' principal
underwriter, received $430, $548, $853, $0, $0, $793, $446, $322 and $875 as
it portion of the sales charge on sales of Class A shares from California
Limited Fund, Connecticut Limited Fund, Florida Limited Fund, Massachusetts
Limited Fund, Michigan Limited Fund, New Jersey Limited Fund, New York
Limited Fund, Ohio Limited Fund and Pennsylvania Limited Fund, respectively,
for the year ended March 31, 1999.
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 and Service Plans
- -------------------------------------------
Each Fund has adopted a distribution plan ("Class B Plans" and "Class C
Plans") pursuant to Rule 12b-1 under the Investment Company Act of 1940 and a
service plan ("Class A Plans")(collectively the "Plans"). The Plans require
the Funds to pay the principal underwriter, EVD amounts equal to 1/365 of
0.75% of each Fund's Class B and Class C 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 Connecticut Limited Fund, Michigan Limited
Fund and Ohio Limited Fund) 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 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, 1999, California Limited Fund, Connecticut Limited
Fund, Florida Limited Fund, Massachusetts Limited Fund, Michigan Limited
Fund, New Jersey Limited Fund, New York Limited Fund, Ohio Limited Fund and
Pennsylvania Limited Fund paid or accrued $25,938, $14,111, $56,326, $38,098,
$7,243, $37,184, $53,537, $23,647 and $40,712, respectively for Class B
shares, and Florida Limited Fund, Massachusetts Limited Fund, New York
Limited Fund and Pennsylvania Limited Fund paid or accrued $41,604, $32,010,
$19,580, and $40,730, respectively for Class C shares, to or payable to EVD
representing 0.75% of average daily net assets attributable to Class B and
Class C shares. At March 31, 1999, the amount of Uncovered Distribution
Charges of EVD calculated under the Plans for California Limited Fund,
Connecticut Limited Fund, Florida Limited Fund, Massachusetts Limited Fund,
Michigan Limited Fund, New Jersey Limited Fund, New York Limited Fund, Ohio
Limited Fund and Pennsylvania Limited Fund were approximately $261,000,
$216,000, $555,000, $308,000, $362,000, $292,000, $398,000, $466,000 and
$178,000, respectively for Class B shares, and for Florida Limited Fund,
Massachusetts Limited Fund, New York Limited Fund, and Pennsylvania Limited
Fund the amount of Uncovered Distribution Charges of EVD were approximately
$4,105,000, $898,000, $1,080,000 and $1,949,000, respectively for Class C
shares.
In addition, the Plans permit all classes of each Fund to make monthly
payments of service fees to EVD, Authorized Firms and other persons 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 EVD and
Authorized Firms in amounts not expected to exceed 0.15% per annum of each
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 Plans require Florida Limited
Fund, Massachusetts Limited Fund, New York Limited Fund and Pennsylvania
Limited Fund to make monthly payments of service fees in amounts not expected
to exceed 0.25% of each Fund's average daily net assets attributable to Class
C shares for any fiscal year. For the year ended March 31, 1999, California
Limited Fund, Connecticut Limited Fund, Florida Limited Fund, Massachusetts
Limited Fund, Michigan Limited Fund, New Jersey Limited Fund, New York
Limited Fund, Ohio Limited Fund and Pennsylvania Limited Fund paid or accrued
service fees to or payable to EVD in the amount of $42,295, $13,631, $77,273,
$62,138, $14,918, $51,727, $83,275, $30,216 and $56,940, respectively for
Class A shares, and $2,512, $1,746, $8,799, $7,360, $1,048, $7,675, $9,996,
$3,599 and $6,872, respectively for Class B
35
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
shares. For the year ended March 31, 1999, Florida Limited Fund,
Massachusetts Limited Fund, New York Limited Fund and Pennsylvania Limited
Fund paid or accrued service fees to or payable to EVD in the amount of
$8,106, $6,402, $3,916 and $8,146, respectively for Class C shares. 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 B shares made within four years of purchase, and on Class C shares
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 each Fund's Distribution Plan. CDSC charges received when no Uncovered
Distribution Charges exist will be credited to the Fund. For the year ended
March 31, 1999, EVD received approximately $5,000, $800, $5,000, $10,000,
$700, $14,000, $13,000, $2,000 and $12,000, respectively for Class B shares,
of CDSC paid by shareholders of California Limited Fund, Connecticut Limited
Fund, Florida Limited Fund, Massachusetts Limited Fund, Michigan Limited
Fund, New Jersey Limited Fund, New York Limited Fund, Ohio Limited Fund and
Pennsylvania Limited Fund and $100, $100, $500 and $500, respectively for
Class C shares, of CDSC paid by shareholders of Florida
Limited Fund, Massachusetts Limited Fund, New York Limited Fund, and
Pennsylvania Limited Fund.
7 Investment Transactions
- -------------------------------------------
Increases and decreases in each Fund's investment in its corresponding
Portfolio for the year ended March 31, 1999 were as follows:
<TABLE>
<CAPTION>
CALIFORNIA LIMITED FUND
<S> <C>
- -------------------------------------------------------
Increases $ 4,228,948
Decreases 11,447,139
<CAPTION>
CONNECTICUT LIMITED FUND
<S> <C>
- -------------------------------------------------------
Increases $ 1,959,442
Decreases 3,186,038
<CAPTION>
FLORIDA LIMITED FUND
<S> <C>
- -------------------------------------------------------
Increases $ 7,572,638
Decreases 22,890,275
<CAPTION>
MASSACHUSETTS LIMITED FUND
<S> <C>
- -------------------------------------------------------
Increases $ 10,696,514
Decreases 18,230,235
<CAPTION>
MICHIGAN LIMITED FUND
<S> <C>
- -------------------------------------------------------
Increases $ 1,993,253
Decreases 3,931,845
<CAPTION>
NEW JERSEY LIMITED FUND
<S> <C>
- -------------------------------------------------------
Increases $ 6,467,186
Decreases 14,119,117
<CAPTION>
NEW YORK LIMITED FUND
<S> <C>
- -------------------------------------------------------
Increases $ 10,991,886
Decreases 23,447,532
<CAPTION>
OHIO LIMITED FUND
<S> <C>
- -------------------------------------------------------
Increases $ 4,003,683
Decreases 6,502,512
<CAPTION>
PENNSYLVANIA LIMITED FUND
<S> <C>
- -------------------------------------------------------
Increases $ 7,028,079
Decreases 16,336,396
</TABLE>
36
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
8 Transfer of Net Assets
- -------------------------------------------
Effective on April 1, 1998, Class I and Class II shares of EV Marathon
California Limited Fund, EV Marathon Connecticut Limited Fund, EV Marathon
Florida Limited Fund, EV Marathon Massachusetts Limited Fund, EV Marathon
Michigan Limited Fund, EV Marathon New Jersey Limited Fund, EV Marathon New
York Limited Fund, EV Marathon Ohio Limited Fund, and EV Marathon
Pennsylvania Limited Fund were designated Class B and Class A shares,
respectively. In addition, the Funds acquired the net assets of EV
Traditional California Limited Fund, EV Traditional Connecticut Limited Fund,
EV Traditional Florida Limited Fund, EV Traditional Michigan Limited Fund, EV
Traditional New Jersey Limited Fund, EV Traditional New York Limited Fund and
EV Traditional Ohio Limited Fund as well as the net assets of EV Classic
Florida Limited Fund, EV Classic Massachusetts Limited Fund, EV Classic New
York Limited Fund, and EV Classic Pennsylvania Limited Fund, pursuant to an
Agreement and Plan of Reorganization dated June 23, 1997. In accordance with
the agreement, the Funds, at the closing, issued Class A shares and Class C
shares as follows:
<TABLE>
<CAPTION>
AGGREGATE NET ASSET
CLASS A SHARES VALUE OF VALUE PER
FUND ISSUED SHARES ISSUED SHARE
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------
California Limited Fund 303,260 $3,133,613 $10.33
Connecticut Limited Fund 105,182 1,063,816 10.11
Florida Limited Fund 439,652 4,524,349 10.29
Michigan Limited Fund 89,196 895,423 10.04
New Jersey Limited Fund 81,047 839,250 10.35
New York Limited Fund 51,712 543,752 10.51
Ohio Limited Fund 164,848 1,671,340 10.14
</TABLE>
<TABLE>
<CAPTION>
AGGREGATE NET ASSET
CLASS C SHARES VALUE OF VALUE PER
FUND ISSUED SHARES ISSUED SHARE
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------
Florida Limited Fund 673,148 $6,552,371 $9.73
Massachusetts Limited Fund 451,136 4,459,306 9.88
New York Limited Fund 229,639 2,285,786 9.95
Pennsylvania Limited Fund 514,215 5,132,765 9.98
</TABLE>
The transaction was structured for tax purposes to qualify as a tax free
reorganization under the Internal Revenue Code. The net assets acquired,
including unrealized appreciation at the date of the transaction were as
follows:
<TABLE>
<CAPTION>
CLASS A AND CLASS C CLASS A AND CLASS C
FUND ACQUIRED NET ASSETS UNREALIZED APPRECIATION
<S> <C> <C>
- -----------------------------------------------------------------------------------------
California Limited Fund $ 3,133,613 $109,134
Connecticut Limited Fund 1,063,816 44,459
Florida Limited Fund 11,076,720 243,990
Massachusetts Limited Fund 4,459,306 166,397
Michigan Limited Fund 895,423 113,532
New Jersey Limited Fund 839,250 57,157
New York Limited Fund 2,829,538 114,001
Ohio Limited Fund 1,671,340 116,658
Pennsylvania Limited Fund 5,132,765 173,931
</TABLE>
Directly after the merger, the combined net assets of the Funds and the net
asset value of Class A shares, Class B shares, and Class C shares were as
follows:
<TABLE>
<CAPTION>
CLASS A NET CLASS B NET CLASS C NET
COMBINED ASSET VALUE ASSET VALUE ASSET VALUE
FUND NET ASSETS PER SHARE PER SHARE PER SHARE
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
California Limited Fund $ 34,229,930 $10.33 $10.33 $ --
Connecticut Limited Fund 9,628,721 10.11 10.11 --
Florida Limited Fund 71,804,641 10.29 10.29 9.73
Massachusetts Limited Fund 56,485,735 10.33 10.33 9.88
Michigan Limited Fund 11,911,871 10.04 10.04 --
New Jersey Limited Fund 45,338,694 10.35 10.35 --
New York Limited Fund 74,492,033 10.51 10.51 9.95
Ohio Limited Fund 24,034,090 10.14 10.14 --
Pennsylvania Limited Fund 57,370,033 10.55 10.55 9.98
</TABLE>
9 Name Change
- -------------------------------------------
Effective April 1, 1998, the EV Marathon California Limited Fund, EV Marathon
Connecticut Limited Fund, EV Marathon Florida Limited Fund, EV Marathon
Massachusetts Limited Fund, EV Marathon Michigan Limited Fund, EV Marathon
New Jersey Limited Fund, EV Marathon New York Limited Fund, EV Marathon Ohio
Limited Fund and EV Marathon Pennsylvania Limited Fund changed 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.
37
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
INDEPENDENT AUDITORS' REPORT
TO THE TRUSTEES AND SHAREHOLDERS OF
EATON VANCE INVESTMENT TRUST:
- ---------------------------------------------
We have audited the accompanying statements of assets and liabilities of 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, (series of Eaton Vance
Investment Trust) as of March 31, 1999, and the related statements of operations
for 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 each of the
aforementioned funds of Eaton Vance Investment Trust at March 31, 1999, and the
results of their operations, the changes in their net assets and their financial
highlights for the respective stated period in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
April 30, 1999
38
<PAGE>
CALIFORNIA 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>
---------------------------------------------------------------------------------------
Cogeneration -- 5.1%
---------------------------------------------------------------------------------------
NR BBB- $1,500 Central Valley Financing Authority,
Cogeneration, 5.20%, 7/1/99 $ 1,507,965
---------------------------------------------------------------------------------------
$ 1,507,965
---------------------------------------------------------------------------------------
Electric Utilities -- 7.3%
---------------------------------------------------------------------------------------
A2 A-1 $1,000 California Pollution Control Financing
Authority, (San Diego Gas & Electric),
5.90%, 6/1/14(1) $ 1,118,050
NR A+ 1,000 California Pollution Control Financing
Authority, (Southern California Edison
Co.), 6.85%, 12/1/08 1,031,950
---------------------------------------------------------------------------------------
$ 2,150,000
---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 16.7%
---------------------------------------------------------------------------------------
Aaa AAA $1,500 ABAG Finance Authority Certificates of
Participation, (Stanford University
Hospital), (MBIA), Escrowed to Maturity,
4.90%, 11/1/03 $ 1,583,744
Aaa AAA 1,000 ABAG Finance Authority Certificates of
Participation, (Stanford University
Hospital), (MBIA), Escrowed to Maturity,
5.125%, 11/1/05 1,075,000
NR A+ 1,000 California Statewide Communities
Development Corp., (Pacific Homes),
Prerefunded to 4/1/03, 5.90%, 4/1/09 1,081,630
NR NR 1,000 Sacramento Cogeneration Authority,
(Procter & Gamble), Prerefunded to
7/1/05, 6.50%, 7/1/21 1,163,170
---------------------------------------------------------------------------------------
$ 4,903,544
---------------------------------------------------------------------------------------
General Obligations -- 1.0%
---------------------------------------------------------------------------------------
NR NR $ 300 Capistrano Unified School District,
5.65%, 9/1/15(2) $ 299,793
---------------------------------------------------------------------------------------
$ 299,793
---------------------------------------------------------------------------------------
Hospital -- 5.0%
---------------------------------------------------------------------------------------
NR NR $ 380 Eastern Plumas Health Care, (District
Hospital), 7.50%, 8/1/07 $ 405,992
<CAPTION>
RATINGS
(UNAUDITED)
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Hospital (continued)
---------------------------------------------------------------------------------------
NR NR $ 300 San Benito Health Care District, 5.375%,
10/1/12 $ 295,899
NR NR 350 San Gorgonio Memorial Health Care
District, 5.80%, 5/1/14 347,137
NR BBB+ $ 400 Stockton Health Facilities, (Dameron
Hospital), 5.70%, 12/1/14 406,680
---------------------------------------------------------------------------------------
$ 1,455,708
---------------------------------------------------------------------------------------
Housing -- 1.8%
---------------------------------------------------------------------------------------
Aaa NR $ 510 Corona SFMR, 6.05%, 5/1/27 $ 522,898
---------------------------------------------------------------------------------------
$ 522,898
---------------------------------------------------------------------------------------
Industrial Development Revenue -- 2.6%
---------------------------------------------------------------------------------------
Baa1 A- $ 750 California Pollution Control Financing
Authority, (Browning Ferris Industries),
(AMT), 5.80%, 12/1/16 $ 759,338
---------------------------------------------------------------------------------------
$ 759,338
---------------------------------------------------------------------------------------
Insured-Education -- 2.7%
---------------------------------------------------------------------------------------
Aaa NR $ 475 California Educational Facilities
Authority, (San Diego University),
(AMBAC), 0.00%, 10/1/15 $ 212,496
Aaa AAA 250 Golden West Schools Financing Authority,
(MBIA), 5.80%, 2/1/16(2) 277,245
Aaa AAA 285 Golden West Schools Financing Authority,
(MBIA), 5.80%, 8/1/16(2) 316,655
---------------------------------------------------------------------------------------
$ 806,396
---------------------------------------------------------------------------------------
Insured-Electric Utilities -- 7.1%
---------------------------------------------------------------------------------------
Aaa AAA $1,000 Sacramento Municipal Utility District,
(AMBAC), 5.60%, 8/15/16 $ 1,068,710
Aaa AAA 1,000 Southern California Public Power
Authority Project, (AMBAC), 5.00%,
7/1/17 1,004,450
---------------------------------------------------------------------------------------
$ 2,073,160
---------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
39
<PAGE>
CALIFORNIA 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-General Obligations -- 6.8%
---------------------------------------------------------------------------------------
Aaa AAA $1,080 Fillmore Unified School District,
(FGIC), 0.00%, 7/1/15 $ 489,078
Aaa AAA 1,000 Mt. Diablo School District, (AMBAC),
5.70%, 8/1/14 1,079,640
Aaa AAA 705 Ukiah Unified School District, (FGIC),
0.00%, 8/1/10 424,100
---------------------------------------------------------------------------------------
$ 1,992,818
---------------------------------------------------------------------------------------
Insured-Hospital -- 5.7%
---------------------------------------------------------------------------------------
Aaa AAA $1,900 Riverside County, (Riverside County
Hospital), (MBIA), 0.00%, 6/1/21 $ 609,311
Aaa AAA 1,000 Tri City Hospital District, (MBIA),
5.625%, 2/15/17 1,053,440
---------------------------------------------------------------------------------------
$ 1,662,751
---------------------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of Participation -- 9.1%
---------------------------------------------------------------------------------------
Aaa AAA $2,000 Anaheim Public Financing Authority,
(Public Improvements), (FSA), 0.00%,
9/1/19 $ 708,920
Aaa AAA 500 California State Public Works Board,
(California Community College), (AMBAC),
5.625%, 3/1/16 534,290
Aaa AAA 1,355 California State Public Works Board,
(Department of Corrections), (AMBAC),
5.25%, 12/1/13 1,441,395
---------------------------------------------------------------------------------------
$ 2,684,605
---------------------------------------------------------------------------------------
Insured-Special Tax Revenue -- 7.1%
---------------------------------------------------------------------------------------
Aaa AAA $2,000 San Mateo County Transportation
District, (MBIA), 5.25%, 6/1/17 $ 2,092,039
---------------------------------------------------------------------------------------
$ 2,092,039
---------------------------------------------------------------------------------------
Insured-Transportation -- 4.6%
---------------------------------------------------------------------------------------
Aaa AAA $ 750 San Francisco, City and County Airports,
(MBIA), 5.60%, 5/1/13 $ 798,405
Aaa AAA 1,000 San Joaquin Hills, Transportation
Corridor Agency Bridge & Toll Road,
(MBIA), 0.00%, 1/15/12 551,010
---------------------------------------------------------------------------------------
$ 1,349,415
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
(UNAUDITED)
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 4.4%
---------------------------------------------------------------------------------------
NR A+ $ 750 California Statewide Communities
Development Authority, (San Gabriel
Valley), 5.50%, 9/1/14 $ 765,713
Baa2 NR 500 Corona PFA, Public Improvement Revenue,
5.95%, 7/1/07 528,670
---------------------------------------------------------------------------------------
$ 1,294,383
---------------------------------------------------------------------------------------
Nursing Home -- 2.6%
---------------------------------------------------------------------------------------
NR BBB $ 750 ABAG Finance Authority, (American
Baptist Homes), 5.75%, 10/1/17 $ 762,413
---------------------------------------------------------------------------------------
$ 762,413
---------------------------------------------------------------------------------------
Special Tax Revenue -- 6.9%
---------------------------------------------------------------------------------------
NR NR $ 300 Alameda Public Financing Authority,
5.45%, 9/2/14 $ 298,284
NR NR 300 Brentwood Infrastructure Financing
Authority, 5.50%, 9/2/12 291,807
NR NR 315 Industry, (Catellus Commerce Center
Assessment District), 5.55%, 9/2/13 311,998
NR NR 360 Irvine, Improvement Bond Act 1915,
(Assessment District North 97-16, Group
Two), 5.40%, 9/2/10 366,930
NR BBB 390 Pomona Redevelopment Agency, (West Holt
Avenue Redevelopment), 5.50%, 5/1/13 399,797
NR NR 365 Torrance Redevelopment Agency, 5.50%,
9/1/12 371,333
---------------------------------------------------------------------------------------
$ 2,040,149
---------------------------------------------------------------------------------------
Water and Sewer -- 3.5%
---------------------------------------------------------------------------------------
A1 A+ $1,000 Los Angeles City Wastewater System,
6.90%, 6/1/08(1) $ 1,026,310
---------------------------------------------------------------------------------------
$ 1,026,310
---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $27,931,688) $ 29,383,685
---------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
40
<PAGE>
CALIFORNIA LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
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, 1999, 52.1% 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 a low of 2.4% to a high of 28.4% of total
investments.
(1) Security (or a portion thereof) has been segregated to cover when-issued
securities.
(2) When-issued security.
SEE NOTES TO FINANCIAL STATEMENTS
41
<PAGE>
CONNECTICUT 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>
--------------------------------------------------------------------------------------
Education -- 4.1%
--------------------------------------------------------------------------------------
NR BBB- $200 Connecticut HEFA, (Quinnipiac College),
6.00%, 7/1/13 $ 207,832
Baa3 BBB- 140 Connecticut HEFA, (Sacred Heart
University), 6.00%, 7/1/08 157,979
--------------------------------------------------------------------------------------
$ 365,811
--------------------------------------------------------------------------------------
Electric Utilities -- 2.7%
--------------------------------------------------------------------------------------
Baa1 BBB+ $250 Puerto Rico Electric Power Authority,
4.75%, 7/1/24 $ 238,488
--------------------------------------------------------------------------------------
$ 238,488
--------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 17.7%
--------------------------------------------------------------------------------------
Baa1 BBB+ $400 Connecticut HEFA, (Fairfield
University), Prerefunded to 7/1/99,
6.90%, 7/1/14 $ 411,608
NR NR 510 Connecticut HEFA, (New Britain
Hospital), Prerefunded to 7/1/02, 7.50%,
7/1/06 559,724
NR BBB- 300 Connecticut HEFA, (Quinnipiac College),
Prerefunded to 07/01/03, 6.00%, 7/1/13 329,712
Aaa AAA 250 South Central Connecticut Regional Water
Authority, (AMBAC), Prerefunded to
8/1/01, 6.50%, 8/1/07 271,273
--------------------------------------------------------------------------------------
$ 1,572,317
--------------------------------------------------------------------------------------
General Obligations -- 11.9%
--------------------------------------------------------------------------------------
Aaa NR $200 Avon, 5.00%, 1/15/12 $ 210,326
Aa3 AA 190 Connecticut State, 0.00%, 11/15/10 111,996
Aa3 AA 150 Connecticut State, 5.125%, 8/15/11 157,740
Aa2 AA 100 Danbury, 5.00%, 8/1/17 101,080
Baa1 A 115 Puerto Rico, 0.00%, 7/1/08 76,403
Baa1 A 400 Puerto Rico Aqueduct and Sewer
Authority, 5.00%, 7/1/19 393,712
--------------------------------------------------------------------------------------
$ 1,051,257
--------------------------------------------------------------------------------------
<CAPTION>
RATINGS
(UNAUDITED)
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------------
Hospital -- 1.5%
--------------------------------------------------------------------------------------
Baa2 NR $125 Connecticut HEFA, (Griffin Hospital),
6.00%, 7/1/13 $ 128,788
--------------------------------------------------------------------------------------
$ 128,788
--------------------------------------------------------------------------------------
Housing -- 1.1%
--------------------------------------------------------------------------------------
Aa NR $100 Connecticut HFA, MRB, (AMT), 7.40%,
11/15/99 $ 100,930
--------------------------------------------------------------------------------------
$ 100,930
--------------------------------------------------------------------------------------
Industrial Development Revenue -- 11.9%
--------------------------------------------------------------------------------------
A1 NR $625 Connecticut Development Authority,
(Frito Lay), 6.375%, 7/1/04 $ 634,099
Baa3 BBB- 250 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 269,680
A3 BBB+ 150 Sprague, Environmental Improvement,
(International Paper Co.), (AMT), 5.70%,
10/1/21 153,029
--------------------------------------------------------------------------------------
$ 1,056,808
--------------------------------------------------------------------------------------
Insured-Education -- 5.0%
--------------------------------------------------------------------------------------
Aaa AAA $200 Connecticut HEFA, (Choate Rosemary
Hall), (MBIA), 5.00%, 7/1/14 $ 203,468
Aaa AAA 240 University of Connecticut, (FGIC),
5.00%, 2/1/15 243,149
--------------------------------------------------------------------------------------
$ 446,617
--------------------------------------------------------------------------------------
Insured-Electric Utilities -- 3.2%
--------------------------------------------------------------------------------------
Aaa AAA $250 Connecticut Municipal Electric
Authority, (MBIA), 6.00%, 1/1/07 $ 279,750
--------------------------------------------------------------------------------------
$ 279,750
--------------------------------------------------------------------------------------
Insured-General Obligations -- 13.7%
--------------------------------------------------------------------------------------
Aaa AAA $250 Bradford, (FGIC), 5.40%, 2/15/14 $ 261,700
Aaa AAA 400 Bridgeport, (AMBAC), 6.00%, 9/1/06 448,299
Aaa AAA 500 Old Saybrook, (AMBAC), 4.10%, 8/15/01 507,724
--------------------------------------------------------------------------------------
$ 1,217,723
--------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
42
<PAGE>
CONNECTICUT 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-Hospital -- 12.8%
--------------------------------------------------------------------------------------
Aaa AAA $150 Connecticut HEFA, (Greenwich Hospital),
(MBIA), 5.75%, 7/1/06 $ 165,228
Aaa NR 300 Connecticut HEFA, (Middlesex Health
Services), (MBIA), 5.125%, 7/1/17 301,164
Aaa AAA 370 Connecticut HEFA, (St. Raphael
Hospital),
(AMBAC), 5.10%, 7/1/07 392,596
Aaa AAA 250 Connecticut HEFA, (Stamford Hospital),
(MBIA), 6.50%, 7/1/06 270,558
--------------------------------------------------------------------------------------
$ 1,129,546
--------------------------------------------------------------------------------------
Insured-Miscellaneous -- 1.8%
--------------------------------------------------------------------------------------
Aaa AAA $150 Woodstock, Special Obligation Bonds,
(AMBAC), 7.00%, 3/1/07 $ 159,290
--------------------------------------------------------------------------------------
$ 159,290
--------------------------------------------------------------------------------------
Insured-Transportation -- 7.9%
--------------------------------------------------------------------------------------
Aaa AAA $600 Connecticut State Airport, (Bradley
International Airport), (FGIC), 7.40%,
10/1/04 $ 700,373
--------------------------------------------------------------------------------------
$ 700,373
--------------------------------------------------------------------------------------
Solid Waste -- 2.9%
--------------------------------------------------------------------------------------
NR BBB+ $250 Eastern Connecticut Resources Recovery
Authority, (Wheelabrator Lisbon), (AMT),
5.00%, 1/1/03 $ 254,253
--------------------------------------------------------------------------------------
$ 254,253
--------------------------------------------------------------------------------------
Water and Sewer -- 1.8%
--------------------------------------------------------------------------------------
Aaa AAA $150 Connecticut State Clean Water Fund,
4.875%, 5/1/09 $ 155,604
--------------------------------------------------------------------------------------
$ 155,604
--------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $8,361,603) $ 8,857,555
--------------------------------------------------------------------------------------
</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, 1999, 47.5% 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 insured by
financial institutions ranged from a low of 13.6% to a high of 20.1% of total
investments.
SEE NOTES TO FINANCIAL STATEMENTS
43
<PAGE>
FLORIDA 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>
---------------------------------------------------------------------------------------
Cogeneration -- 1.3%
---------------------------------------------------------------------------------------
NR NR $ 500 Palm Beach County, (Okeelanta Power),
(AMT), 6.85%, 2/15/21(1) $ 385,000
NR NR 500 Palm Beach County, (Osceola Power),
(AMT), 6.95%, 1/1/22(1) 380,000
---------------------------------------------------------------------------------------
$ 765,000
---------------------------------------------------------------------------------------
Electric Utilities -- 8.0%
---------------------------------------------------------------------------------------
Aa2 AA $2,500 Jacksonville Electric Authority, (St.
Johns River Power Park), 5.375%, 10/1/16 $ 2,583,675
A1 AA- 2,000 Tallahassee Electric, 5.90%, 10/1/05 2,156,620
---------------------------------------------------------------------------------------
$ 4,740,295
---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 9.7%
---------------------------------------------------------------------------------------
Aaa AAA $1,015 Dade County, Educational Facilities
Authority, (MBIA), Prerefunded to
10/1/01, 7.00%, 10/1/08 $ 1,117,556
Aaa AAA 1,000 Hillsborough County Aviation Authority,
(Tampa International Airport), (FGIC),
Prerefunded to 10/01/99, 6.85%, 10/1/06 1,038,520
Aaa AAA 3,000 Jacksonville Health Facilities
Authority, (Baptist Medical Center),
(MBIA), Prerefunded to 6/1/99, 7.25%,
6/1/05(2) 3,080,309
Aaa AA- 500 Orlando Utility Community Water and
Electric, Prerefunded to 10/1/01, 6.50%,
10/1/20 544,590
---------------------------------------------------------------------------------------
$ 5,780,975
---------------------------------------------------------------------------------------
General Obligations -- 13.7%
---------------------------------------------------------------------------------------
Aa2 AA+ $3,000 Florida State Board of Education, 5.55%,
6/1/11 $ 3,212,549
Baa1 A 1,050 Puerto Rico, 0.00%, 7/1/08 697,589
Baa1 A- 2,000 Puerto Rico Municipal Finance Agency,
5.50%, 7/1/01 2,078,000
Baa1 A 1,000 Puerto Rico Public Building Authority,
6.50%, 7/1/03 1,091,640
<CAPTION>
RATINGS
(UNAUDITED)
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
General Obligations (continued)
---------------------------------------------------------------------------------------
NR AAA $1,000 Virgin Islands Public Finance Authority,
(Matching Loan Fund Notes), 6.80%,
10/1/00 $ 1,051,640
---------------------------------------------------------------------------------------
$ 8,131,418
---------------------------------------------------------------------------------------
Hospital -- 3.8%
---------------------------------------------------------------------------------------
NR BBB+ $1,250 Escambia County Health Facilities
Authority, (Baptist Hospital, Inc. and
Baptist Manor, Inc.), 6.00%, 10/1/14 $ 1,299,675
Baa1 NR 450 Jacksonville Health Facilities
Authority, (National Benevolent
Association-Cypress Village), 6.25%,
12/1/99 457,835
Baa1 NR 480 Jacksonville Health Facilities
Authority, (National Benevolent
Association-Cypress Village), 6.50%,
12/1/00 501,365
---------------------------------------------------------------------------------------
$ 2,258,875
---------------------------------------------------------------------------------------
Housing -- 0.7%
---------------------------------------------------------------------------------------
NR A $ 425 Clearwater Housing Authority, (Hamptons
at Clearwater), 5.40%, 5/1/13 $ 440,279
---------------------------------------------------------------------------------------
$ 440,279
---------------------------------------------------------------------------------------
Industrial Development Revenue -- 3.6%
---------------------------------------------------------------------------------------
Baa2 BBB $2,000 Polk County IDR, (IMC Fertilizer),
(AMT), 7.525%, 1/1/15 $ 2,118,280
---------------------------------------------------------------------------------------
$ 2,118,280
---------------------------------------------------------------------------------------
Insured-Cogeneration -- 5.2%
---------------------------------------------------------------------------------------
Aaa AAA $2,000 Dade County, Resource Recovery
Facilities, (AMBAC), (AMT), 5.30%,
10/1/07 $ 2,136,000
Aaa NR 1,000 Tampa Solid Waste System, (McKay Bay
Refuse to Energy), (AMBAC), 4.75%,
10/1/17 961,300
---------------------------------------------------------------------------------------
$ 3,097,300
---------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
44
<PAGE>
FLORIDA 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-Electric Utilities -- 1.7%
---------------------------------------------------------------------------------------
Aaa AAA $1,000 Dade County, Water and Sewer System,
(FGIC), 5.25%, 10/1/21 $ 1,021,460
---------------------------------------------------------------------------------------
$ 1,021,460
---------------------------------------------------------------------------------------
Insured-General Obligations -- 7.9%
---------------------------------------------------------------------------------------
Aaa AAA $2,000 Dade County Local School District,
(MBIA), 5.00%, 2/15/15 $ 2,022,420
Aaa AAA 520 Dade County, (MBIA), 0.00%, 10/1/06 375,731
Aaa AAA 330 Dade County, (MBIA), 0.00%, 10/1/08 214,625
Aaa AAA 1,000 Miami-Dade County School District,
(FSA), 5.375%, 8/1/15 1,067,450
Aaa AAA 1,000 Reedy Creek Improvement District,
(MBIA), 5.25%, 6/1/14 1,039,380
---------------------------------------------------------------------------------------
$ 4,719,606
---------------------------------------------------------------------------------------
Insured-Hospital -- 7.0%
---------------------------------------------------------------------------------------
Aaa AAA $2,500 Naples, (Naples Community Hospital,
Inc.), (MBIA), 5.50%, 10/1/16 $ 2,608,025
Aaa AAA 1,000 Orange County Health Facilities
Authority, (Adventist Health System/
Sunbelt, Inc.), (FSA), 5.50%, 11/15/02 1,057,150
Aaa AAA 500 Sarasota County Public Hospital, (MBIA),
5.25%, 7/1/18 516,865
---------------------------------------------------------------------------------------
$ 4,182,040
---------------------------------------------------------------------------------------
Insured-Housing -- 4.2%
---------------------------------------------------------------------------------------
Aaa AAA $1,200 Florida Housing Finance Authority,
(Leigh Meadows Apartments), (AMBAC),
5.85%, 9/1/10 $ 1,283,244
Aaa AAA 1,110 Florida Housing Finance Authority,
(Stottert Arms Apartments), (AMBAC),
5.90%, 9/1/10 1,185,968
---------------------------------------------------------------------------------------
$ 2,469,212
---------------------------------------------------------------------------------------
Insured-Industrial Development Revenue -- 1.8%
---------------------------------------------------------------------------------------
Aaa AAA $1,000 Pinellas County Resource Recovery,
(MBIA), 5.125%, 10/1/04 $ 1,053,290
---------------------------------------------------------------------------------------
$ 1,053,290
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
(UNAUDITED)
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of Participation -- 1.8%
---------------------------------------------------------------------------------------
Aaa AAA $1,000 Palm Beach County Criminal Justice
Facilities, (FGIC), 5.375%, 6/1/10 $ 1,083,850
---------------------------------------------------------------------------------------
$ 1,083,850
---------------------------------------------------------------------------------------
Insured-Special Tax Revenue -- 1.7%
---------------------------------------------------------------------------------------
Aaa AAA $2,000 Miami-Dade County Professional Sports
Franchise Facilities, (MBIA), 0.00%,
10/1/13 $ 992,660
---------------------------------------------------------------------------------------
$ 992,660
---------------------------------------------------------------------------------------
Insured-Transportation -- 10.8%
---------------------------------------------------------------------------------------
Aaa AAA $1,000 Broward County Airport System, (MBIA),
5.375%, 10/1/13 $ 1,047,100
Aaa AAA 1,500 Broward County Port Facilities, (MBIA),
5.375%, 9/1/12 1,578,165
Aaa AAA 2,000 Dade County, Seaport Revenue, (MBIA),
5.125%, 10/1/16 2,034,760
Aaa AAA 1,670 Hillsborough County Aviation Authority,
(Tampa International Airport), (FGIC),
6.85%, 10/1/06 1,732,525
---------------------------------------------------------------------------------------
$ 6,392,550
---------------------------------------------------------------------------------------
Insured-Water and Sewer -- 9.9%
---------------------------------------------------------------------------------------
Aaa AAA $ 380 Collier County, Water and Sewer Revenue,
(FGIC), 5.125%, 7/1/15(3) $ 390,146
Aaa AAA 2,000 Dade County, Water and Sewer System,
(FGIC), 5.25%, 10/1/11 2,111,560
Aaa AAA 2,000 Manatee County, Public Utilities,
(MBIA), 6.75%, 10/1/04 2,278,120
Aaa AAA 1,000 Pasco County, Water and Sewer Revenue,
(FGIC), 5.40%, 10/1/03 1,067,960
---------------------------------------------------------------------------------------
$ 5,847,786
---------------------------------------------------------------------------------------
Nursing Home -- 2.3%
---------------------------------------------------------------------------------------
NR NR $ 350 Citrus County IDA, (Beverly
Enterprises), 5.00%, 4/1/03 $ 349,248
NR NR 1,000 Volusia County, (Beverly Enterprises),
5.875%, 7/1/07 1,006,840
---------------------------------------------------------------------------------------
$ 1,356,088
---------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
45
<PAGE>
FLORIDA 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>
Senior Living / Life Care -- 3.7%
---------------------------------------------------------------------------------------
Baa1 A- $1,000 Highlands County HFA, (Adventist Health
System), 5.25%, 11/15/20 $ 980,930
NR NR 600 North Miami HFA, (Imperial Club), 6.75%,
1/1/33 589,038
NR NR 600 Okaloosa County, Retirement Rental
Housing, (Encore Retirement Partners),
6.125%, 2/1/14 599,070
---------------------------------------------------------------------------------------
$ 2,169,038
---------------------------------------------------------------------------------------
Special Tax Revenue -- 1.2%
---------------------------------------------------------------------------------------
NR NR $ 650 North Springs, Improvement District,
Special Assessment Revenue, (Heron Bay),
7.00%, 5/1/19 $ 692,387
---------------------------------------------------------------------------------------
$ 692,387
---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $56,582,960) $ 59,312,389
---------------------------------------------------------------------------------------
</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, 1999, 60.9% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage insured by
financial institutions ranged from a low of 3.6% to a high of 33.7% of total
investments.
(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
46
<PAGE>
MASSACHUSETTS 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>
---------------------------------------------------------------------------------------
Cogeneration -- 2.0%
---------------------------------------------------------------------------------------
NR BBB $1,000 Massachusetts IFA, (Ogden Haverhill),
(AMT), 5.50%, 12/1/13 $ 1,014,110
---------------------------------------------------------------------------------------
$ 1,014,110
---------------------------------------------------------------------------------------
Education -- 6.8%
---------------------------------------------------------------------------------------
NR A $ 500 Massachusetts IFA, (Belmont Hill
School), 5.15%, 9/1/13 $ 506,225
Baa3 BBB- 500 Massachusetts IFA, (Dana Hall), 5.90%,
7/1/27 515,935
A3 NR 1,030 Massachusetts IFA, (Park School), 5.50%,
9/1/16 1,079,687
Baa1 BBB+ 750 Massachusetts IFA, (St. Johns High
School, Inc.), 5.70%, 6/1/18 775,298
Baa1 NR 500 Massachusetts IFA, (Wentworth Institute
of Technology), 5.55%, 10/1/13 509,585
---------------------------------------------------------------------------------------
$ 3,386,730
---------------------------------------------------------------------------------------
Electric Utilities -- 2.1%
---------------------------------------------------------------------------------------
Baa2 BBB+ $1,000 Massachusetts Municipal Wholesale
Electric Co., 5.70%, 7/1/01 $ 1,040,870
---------------------------------------------------------------------------------------
$ 1,040,870
---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 11.4%
---------------------------------------------------------------------------------------
Aa3 AA- $ 785 Massachusetts Bay Transportation
Authority, Prerefunded to 3/01/05,
5.75%, 3/1/18 $ 867,598
Aaa NR 905 Massachusetts HEFA, (Fairview Extended
Care), Prerefunded to 1/1/01, 10.125%,
1/1/11 1,022,107
Baa3 NR 793 Massachusetts HEFA, (Milford-
Whitinsville Hospital), Escrowed to
Maturity, 7.125%, 7/15/02 839,912
Aaa BBB 500 Massachusetts HEFA, (Sisters of
Providence Hospital), Escrowed to
Maturity, 6.00%, 11/15/00 521,295
Aaa AAA 400 Massachusetts Turnpike Authority,
(FGIC), Escrowed to Maturity, 5.125%,
1/1/23 406,484
<CAPTION>
RATINGS
(UNAUDITED)
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Escrowed / Prerefunded (continued)
---------------------------------------------------------------------------------------
Aaa NR $2,000 Massachusetts Turnpike Authority,
Escrowed to Maturity, 5.00%, 1/1/20 $ 2,024,420
---------------------------------------------------------------------------------------
$ 5,681,816
---------------------------------------------------------------------------------------
General Obligations -- 13.9%
---------------------------------------------------------------------------------------
Aa2 NR $ 500 Burlington, 5.00%, 2/1/15 $ 512,365
Aa2 NR 500 Burlington, 5.00%, 2/1/16 511,135
Aa3 AA- 1,000 Massachusetts, 5.00%, 11/1/14 1,014,790
Aa3 AA- 1,000 Massachusetts, 5.40%, 11/1/06 1,082,270
Aa3 AA- 1,260 Massachusetts Bay Transportation
Authority, 5.50%, 3/1/08 1,377,041
Aa3 AA- 215 Massachusetts Bay Transportation
Authority, 5.75%, 3/1/18 229,551
Aa3 NR 2,500 Massachusetts State Federal Highway,
Grant Anticipation Notes, 0.00%, 6/15/15 1,110,600
A1 AA- 1,000 Woods Hole, Martha's Vineyard and
Nantucket Steamship Authority, 6.60%,
3/1/03 1,096,200
---------------------------------------------------------------------------------------
$ 6,933,952
---------------------------------------------------------------------------------------
Health Care-Miscellaneous -- 1.0%
---------------------------------------------------------------------------------------
Ba2 BB $ 500 Massachusetts Development Finance
Agency, (New England Center for
Children), 5.30%, 11/1/08 $ 497,380
---------------------------------------------------------------------------------------
$ 497,380
---------------------------------------------------------------------------------------
Hospital -- 17.2%
---------------------------------------------------------------------------------------
Baa2 BBB $ 750 Massachusetts HEFA, (Caritas Christi
Obligation Group), 5.70%, 7/1/15 $ 758,250
Aa2 AA+ 3,000 Massachusetts HEFA, (Daughters of
Charity Issue), 5.75%, 7/1/02 3,167,190
NR BBB+ 770 Massachusetts HEFA, (Jordan Hospital),
5.00%, 10/1/11 778,262
Baa2 BBB- 1,000 Massachusetts HEFA, (Milford-
Whitinsville Regional Hospital), 5.75%,
7/15/13 1,024,110
Baa3 NR 860 Massachusetts HEFA, (New England Health
Systems), 6.125%, 8/1/13 880,038
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
47
<PAGE>
MASSACHUSETTS 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)
---------------------------------------------------------------------------------------
NR BBB- $1,845 Massachusetts HEFA, (North Adams
Regional Hospital), 6.25%, 7/1/04 $ 1,984,519
---------------------------------------------------------------------------------------
$ 8,592,369
---------------------------------------------------------------------------------------
Industrial Development Revenue -- 0.7%
---------------------------------------------------------------------------------------
NR BBB+ $ 350 Massachusetts Development Finance
Agency, (YMCA of Greater Boston), 5.25%,
11/1/13 $ 342,657
---------------------------------------------------------------------------------------
$ 342,657
---------------------------------------------------------------------------------------
Insured-Education -- 2.1%
---------------------------------------------------------------------------------------
Aaa AAA $1,015 Massachusetts IFA, (Dexter School),
(MBIA), 5.40%, 5/1/13 $ 1,070,074
---------------------------------------------------------------------------------------
$ 1,070,074
---------------------------------------------------------------------------------------
Insured-Electric Utilities -- 4.4%
---------------------------------------------------------------------------------------
Aaa AAA $2,000 Massachusetts Municipal Wholesale
Electric Co., (AMBAC), 6.625%, 7/1/03 $ 2,202,560
---------------------------------------------------------------------------------------
$ 2,202,560
---------------------------------------------------------------------------------------
Insured-General Obligations -- 8.4%
---------------------------------------------------------------------------------------
Aaa AAA $1,000 Haverhill, (FGIC), 5.00%, 6/15/17 $ 1,001,110
Aaa AAA 2,000 Massachusetts Bay Transportation
Authority, (AMBAC), 5.25%, 3/1/11 2,147,960
Aaa AAA 1,000 Massachusetts, (AMBAC), 5.00%, 7/1/12 1,040,800
---------------------------------------------------------------------------------------
$ 4,189,870
---------------------------------------------------------------------------------------
Insured-Hospital -- 3.1%
---------------------------------------------------------------------------------------
Aaa AAA $1,500 Massachusetts HEFA, (Lowell General
Hospital), (FSA), 5.25%, 6/1/16 $ 1,533,705
---------------------------------------------------------------------------------------
$ 1,533,705
---------------------------------------------------------------------------------------
Insured-Industrial Development Revenue -- 3.0%
---------------------------------------------------------------------------------------
Aaa AAA $1,400 Massachusetts IFA, (Nantucket Electric),
(AMBAC), (AMT), 5.30%, 7/1/04 $ 1,477,518
---------------------------------------------------------------------------------------
$ 1,477,518
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
(UNAUDITED)
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 3.5%
---------------------------------------------------------------------------------------
NR BBB $1,650 Puerto Rico, ITEM & ECFA, (Guaynabo
Municipal Government), 5.375%, 7/1/06 $ 1,771,589
---------------------------------------------------------------------------------------
$ 1,771,589
---------------------------------------------------------------------------------------
Nursing Home -- 2.1%
---------------------------------------------------------------------------------------
NR NR $ 965 Massachusetts IFA, (Age Institute of
Massachusetts), 7.60%, 11/1/05 $ 1,023,952
---------------------------------------------------------------------------------------
$ 1,023,952
---------------------------------------------------------------------------------------
Pooled Loans -- 1.7%
---------------------------------------------------------------------------------------
Aaa AAA $1,595 Massachusetts Water Pollution Abatement
Trust, 0.00%, 8/1/12 $ 848,524
---------------------------------------------------------------------------------------
$ 848,524
---------------------------------------------------------------------------------------
Senior Living / Life Care -- 2.2%
---------------------------------------------------------------------------------------
NR BBB $ 600 Massachusetts Development Finance
Agency, (Berkshire Retirement), 5.60%,
7/1/19 $ 599,220
NR NR 500 Massachusetts IFA, (Forge Hill), (AMT),
6.75%, 4/1/30 476,985
---------------------------------------------------------------------------------------
$ 1,076,205
---------------------------------------------------------------------------------------
Special Tax Revenue -- 4.6%
---------------------------------------------------------------------------------------
Aa3 AA $ 500 Massachusetts Special Obligations,
5.00%, 6/1/14 $ 514,190
NR AAA 1,750 Virgin Islands Public Finance Authority,
(Matching Loan Fund Notes), 6.70%,
10/1/99 1,781,500
---------------------------------------------------------------------------------------
$ 2,295,690
---------------------------------------------------------------------------------------
Transportation -- 3.3%
---------------------------------------------------------------------------------------
Aa3 AA- $1,000 Massachusetts Port Authority Revenue,
6.00%, 7/1/13 $ 1,088,740
Baa1 A 500 Puerto Rico Highway and Transportation
Authority, 5.50%, 7/1/15 537,675
---------------------------------------------------------------------------------------
$ 1,626,415
---------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
48
<PAGE>
MASSACHUSETTS 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>
Water and Sewer -- 6.5%
---------------------------------------------------------------------------------------
Aa1 AA $2,100 Massachusetts Water Pollution Abatement
Trust, 5.25%, 8/1/14 $ 2,205,105
Aa3 AA+ 1,000 Massachusetts Water Pollution Abatement
Trust, 5.25%, 8/1/14 1,033,850
---------------------------------------------------------------------------------------
$ 3,238,955
---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $47,451,800) $ 49,844,941
---------------------------------------------------------------------------------------
</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 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, 1999, 21.8% 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 a low of 2.1% to a high of 13.8% of total
investments.
SEE NOTES TO FINANCIAL STATEMENTS
49
<PAGE>
MICHIGAN 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>
---------------------------------------------------------------------------------------
Economic Development Revenue -- 1.3%
---------------------------------------------------------------------------------------
NR B+ $ 150 Michigan State Strategic Fund, (Crown
Paper), 6.25%, 8/1/12 $ 137,537
---------------------------------------------------------------------------------------
$ 137,537
---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 16.8%
---------------------------------------------------------------------------------------
Aaa AAA $1,000 Grand Ledge Public School District,
(MBIA), Prerefunded to 5/1/04, 7.875%,
5/1/11 $ 1,196,799
Aa1 AA+ 500 Michigan Municipal Bond Authority,
Escrowed to Maturity, 7.00%, 10/1/02 553,790
---------------------------------------------------------------------------------------
$ 1,750,589
---------------------------------------------------------------------------------------
General Obligations -- 5.3%
---------------------------------------------------------------------------------------
Baa1 A- $ 495 Detroit, 6.40%, 4/1/05 $ 546,435
---------------------------------------------------------------------------------------
$ 546,435
---------------------------------------------------------------------------------------
Hospital -- 14.6%
---------------------------------------------------------------------------------------
Aa3 AA $ 500 Kent Hospital Finance Authority,
(Spectrum Health), 5.25%, 1/15/09 $ 523,540
NR BBB 100 Michigan Hospital Finance Authority,
(Central MI Community Hospital), 6.00%,
10/1/05 108,197
NR BBB 100 Michigan Hospital Finance Authority,
(Central MI Community Hospital), 6.10%,
10/1/06 109,225
NR BBB 225 Michigan Hospital Finance Authority,
(Central MI Community Hospital), 6.20%,
10/1/07 247,930
NR BBB 500 Michigan Hospital Finance Authority,
(Gratiot Community Hospital), 6.10%,
10/1/07 532,440
---------------------------------------------------------------------------------------
$ 1,521,332
---------------------------------------------------------------------------------------
Industrial Development Revenue -- 3.6%
---------------------------------------------------------------------------------------
Baa3 BBB- $ 350 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 $ 377,552
---------------------------------------------------------------------------------------
$ 377,552
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
(UNAUDITED)
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Insured-Electric Utilities -- 5.3%
---------------------------------------------------------------------------------------
Aaa AAA $ 500 Monroe County, (The Detroit Edison Co.),
(AMBAC), (AMT), 6.35%, 12/1/04 $ 552,640
---------------------------------------------------------------------------------------
$ 552,640
---------------------------------------------------------------------------------------
Insured-General Obligations -- 18.2%
---------------------------------------------------------------------------------------
Aaa AAA $ 500 Detroit School District, (AMBAC), 6.50%,
5/1/10 $ 585,780
Aaa AAA 250 Fowlerville, Community Schools District,
(FSA), 4.50%, 5/1/15 242,880
Aaa AAA 500 Hartland School District, (FGIC),
5.125%, 5/1/17 504,440
Aaa AAA 100 Parchment School District, (MBIA),
5.00%, 5/1/25 99,923
Aaa AAA 225 Paw Paw, Public School District, (FGIC),
5.00%, 5/1/21 224,840
Aaa AAA 250 Portage, Public Schools, (FSA), 4.50%,
5/1/14 241,095
---------------------------------------------------------------------------------------
$ 1,898,958
---------------------------------------------------------------------------------------
Insured-Lease Revenue /
Certificates of Participation -- 1.9%
---------------------------------------------------------------------------------------
Aaa AAA $ 300 Michigan Building Authority, Facilities
Program, (AMBAC), 0.00%, 10/15/08 $ 195,864
---------------------------------------------------------------------------------------
$ 195,864
---------------------------------------------------------------------------------------
Insured-Transportation -- 3.2%
---------------------------------------------------------------------------------------
Aaa AAA $ 770 Puerto Rico Highway and Transportation
Authority, (AMBAC), 0.00%, 7/1/16 $ 335,751
---------------------------------------------------------------------------------------
$ 335,751
---------------------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 5.1%
---------------------------------------------------------------------------------------
Aa2 AA $ 500 Michigan Building Authority, 6.10%,
10/1/01 $ 529,940
---------------------------------------------------------------------------------------
$ 529,940
---------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
50
<PAGE>
MICHIGAN 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>
Miscellaneous -- 1.5%
---------------------------------------------------------------------------------------
NR NR $ 150 Pittsfield Township EDC, (Arbor
Hospice), 7.875%, 8/15/27 $ 157,526
---------------------------------------------------------------------------------------
$ 157,526
---------------------------------------------------------------------------------------
Nursing Home -- 4.1%
---------------------------------------------------------------------------------------
NR NR $ 395 Michigan Hospital Finance Authority,
(Presbyterian Villages), 6.20%, 1/1/06 $ 427,189
---------------------------------------------------------------------------------------
$ 427,189
---------------------------------------------------------------------------------------
Senior Living / Life Care -- 3.0%
---------------------------------------------------------------------------------------
NR BBB $ 300 Kalamazoo, (Friendship Village), 6.125%,
5/15/17 $ 314,739
---------------------------------------------------------------------------------------
$ 314,739
---------------------------------------------------------------------------------------
Special Tax Revenue -- 16.1%
---------------------------------------------------------------------------------------
NR BBB+ $1,000 Battle Creek Downtown Development
Authority, 6.65%, 5/1/02 $ 1,072,420
NR A- 2,000 Detroit Downtown Development Authority
Tax Increment, 0.00%, 7/1/21 598,060
---------------------------------------------------------------------------------------
$ 1,670,480
---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $9,640,542) $ 10,416,532
---------------------------------------------------------------------------------------
</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, 1999, 40.1% 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 insured by
financial institutions ranged from a low of 4.6% to a high of 16.0% of total
investments.
SEE NOTES TO FINANCIAL STATEMENTS
51
<PAGE>
NEW JERSEY 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 -- 1.8%
---------------------------------------------------------------------------------------
NR NR $ 650 New Jersey EDA, (Chelsea at East
Brunswick), (AMT), 8.00%, 10/1/07 $ 712,693
---------------------------------------------------------------------------------------
$ 712,693
---------------------------------------------------------------------------------------
Cogeneration -- 9.3%
---------------------------------------------------------------------------------------
NR BBB- $2,150 New Jersey EDA, (Trigen-Trenton), (AMT),
6.10%, 12/1/05 $ 2,287,062
NR BB+ 735 New Jersey EDA, (Vineland Cogeneration),
(AMT), 7.875%, 6/1/19 793,602
NR NR 550 Port Authority of New York and New
Jersey, (KIAC), (AMT), 6.50%, 10/1/01 577,462
---------------------------------------------------------------------------------------
$ 3,658,126
---------------------------------------------------------------------------------------
Education -- 1.5%
---------------------------------------------------------------------------------------
Baa1 BBB $ 585 New Jersey Educational Facilities
Authority, (Georgian Court College),
4.80%, 7/1/08 $ 584,526
---------------------------------------------------------------------------------------
$ 584,526
---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 4.9%
---------------------------------------------------------------------------------------
Aaa AAA $ 500 Elizabeth, (MBIA), Prerefunded to
11/15/00, 6.20%, 11/15/02 $ 530,480
NR NR 310 New Jersey EDA, (Cadbury Corp.),
Prerefunded to 7/1/01, 8.00%, 7/1/15 346,809
Aaa NR 2,030 New Jersey EDA, (Princeton Custodial
Receipts), Escrowed to Maturity, 0.00%,
12/15/12 1,066,765
---------------------------------------------------------------------------------------
$ 1,944,054
---------------------------------------------------------------------------------------
General Obligations -- 6.0%
---------------------------------------------------------------------------------------
Aa3 AA $ 500 Jersey City School District, 6.25%,
10/1/10 $ 577,155
Baa1 A 1,050 Puerto Rico, 0.00%, 7/1/08 697,589
Aa2 AA- 1,000 South Brunswick, 7.125%, 7/15/02 1,103,890
---------------------------------------------------------------------------------------
$ 2,378,634
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
(UNAUDITED)
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Hospital -- 8.1%
---------------------------------------------------------------------------------------
A3 A- $ 340 New Jersey Health Care Facilities
Financing Authority, (Atlantic City
Medical Care Center), 6.25%, 7/1/00 $ 351,631
A3 A- 1,000 New Jersey Health Care Facilities
Financing Authority, (Atlantic City
Medical Care Center), 6.45%, 7/1/02 1,074,120
A3 A- 750 New Jersey Health Care Facilities
Financing Authority, (Atlantic City
Medical Care Center), 6.55%, 7/1/03 818,348
Baa2 BBB 880 New Jersey Health Care Facilities
Financing Authority, (St. Elizabeth's
Hospital), 5.75%, 7/1/08 942,058
---------------------------------------------------------------------------------------
$ 3,186,157
---------------------------------------------------------------------------------------
Industrial Development Revenue -- 7.0%
---------------------------------------------------------------------------------------
Aa3 NR $ 425 New Jersey EDA, (Economic Growth),
(AMT), 6.00%, 12/1/02 $ 440,772
NR NR 500 New Jersey EDA, (Holt Hauling), (AMT),
7.90%, 3/1/27 560,315
Baa3 BBB- 1,625 Port Authority of New York and New
Jersey, (Delta Airlines), 6.95%, 6/1/08 1,760,330
---------------------------------------------------------------------------------------
$ 2,761,417
---------------------------------------------------------------------------------------
Insured-Education -- 1.3%
---------------------------------------------------------------------------------------
Aaa AAA $ 500 New Jersey Educational Facilities
Authority, (Seton Hall University),
(FGIC), 6.10%, 7/1/01 $ 527,585
---------------------------------------------------------------------------------------
$ 527,585
---------------------------------------------------------------------------------------
Insured-Electric Utilities -- 2.7%
---------------------------------------------------------------------------------------
Aaa AAA $1,000 Middlesex County Utilities Authority,
(FGIC), 6.10%, 12/1/01 $ 1,065,620
---------------------------------------------------------------------------------------
$ 1,065,620
---------------------------------------------------------------------------------------
Insured-General Obligations -- 28.0%
---------------------------------------------------------------------------------------
Aaa AAA $1,000 Atlantic City Board of Education,
(AMBAC), 6.00%, 12/1/02 $ 1,079,020
Aaa AAA 1,175 Edison, (AMBAC), 4.70%, 1/1/04 1,217,136
Aaa AAA 1,200 Kearney, (FSA), 6.50%, 2/1/04 1,307,064
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
52
<PAGE>
NEW JERSEY 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-General Obligations (continued)
---------------------------------------------------------------------------------------
Aaa AAA $ 725 Monroe Township Board of Education,
(FGIC), 5.20%, 8/1/11 $ 770,117
Aaa AAA 825 Monroe Township Board of Education,
(FGIC), 5.20%, 8/1/14 869,195
Aaa AAA 850 Roselle, (MBIA), 4.65%, 10/15/03 881,467
Aaa AAA 1,000 South Brunswick Township Board of
Education, (FGIC), 6.40%, 8/1/03 1,103,460
Aaa AAA 2,000 Washington Township Board of Education,
(MBIA), 5.125%, 2/1/15 2,042,679
Aaa AAA 1,585 West Deptford Township, (AMBAC), 5.90%,
3/1/09 1,781,793
---------------------------------------------------------------------------------------
$ 11,051,931
---------------------------------------------------------------------------------------
Insured-Hospital -- 9.3%
---------------------------------------------------------------------------------------
Aaa AAA $1,300 New Jersey Health Care Facilities
Financing Authority, (AHS Hospital
Corp.), (AMBAC), 6.00%, 7/1/12 $ 1,465,854
Aaa AAA 1,910 New Jersey Health Care Facilities
Financing Authority, (Dover General
Hospital and Medical Center), (MBIA),
7.00%, 7/1/04 2,179,252
---------------------------------------------------------------------------------------
$ 3,645,106
---------------------------------------------------------------------------------------
Insured-Solid Waste -- 0.7%
---------------------------------------------------------------------------------------
Aaa AAA $ 250 Bergen County Utilities Authority, Solid
Waste System, (FGIC), 6.00%, 6/15/02 $ 267,253
---------------------------------------------------------------------------------------
$ 267,253
---------------------------------------------------------------------------------------
Insured-Transportation -- 7.8%
---------------------------------------------------------------------------------------
Aaa AAA $1,000 New Jersey Turnpike Authority, (FSA),
5.90%, 1/1/03 $ 1,071,580
Aaa AAA 895 New Jersey Turnpike Authority, (FSA),
6.40%, 1/1/02 956,576
Aaa AAA 1,000 Port Authority of New York and New
Jersey, (AMBAC), 5.125%, 7/15/14 1,025,610
---------------------------------------------------------------------------------------
$ 3,053,766
---------------------------------------------------------------------------------------
Insured-Water and Sewer -- 1.7%
---------------------------------------------------------------------------------------
Aaa AAA $ 565 Pennsville Sewer Authority, (MBIA),
0.00%, 11/1/16 $ 240,583
<CAPTION>
RATINGS
(UNAUDITED)
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Insured-Water and Sewer (continued)
---------------------------------------------------------------------------------------
Aaa AAA $ 565 Pennsville Sewer Authority, (MBIA),
0.00%, 11/1/17 $ 227,932
Aaa AAA 565 Pennsville Sewer Authority, (MBIA),
0.00%, 11/1/18 215,412
---------------------------------------------------------------------------------------
$ 683,927
---------------------------------------------------------------------------------------
Solid Waste -- 2.1%
---------------------------------------------------------------------------------------
A1 AA- $ 500 Gloucester County Improvement Authority,
Solid Waste System, 5.40%, 9/1/00 $ 514,015
B1 NR 300 The Atlantic County Utilities Authority,
Solid Waste System, 7.00%, 3/1/08 299,622
---------------------------------------------------------------------------------------
$ 813,637
---------------------------------------------------------------------------------------
Transportation -- 7.8%
---------------------------------------------------------------------------------------
Aa2 NR $1,000 New Jersey Transportation Trust,
Variable Rate, 6.56%, 6/15/17(1)(2) $ 1,002,220
A1 AA- 1,000 Port Authority of New York and New
Jersey, 5.375%, 10/15/16 1,030,830
A1 AA- 1,000 Port Authority of New York and New
Jersey, 5.375%, 3/1/28 1,057,450
---------------------------------------------------------------------------------------
$ 3,090,500
---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $36,941,483) $ 39,424,932
---------------------------------------------------------------------------------------
</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, 1999, 52.8% 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 a low of 8.5% to a high of 16.7% of total
investments.
(1) Security has been issued as an inverse floater bond.
(2) Security exempt from registration under Rule 144A of the Securities Act of
1993. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At March 31,
1999, the value of these securities amounted to $1,002,220 or 2.5% of the
Portfolio's net assets.
SEE NOTES TO FINANCIAL STATEMENTS
53
<PAGE>
NEW YORK 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 -- 1.7%
---------------------------------------------------------------------------------------
NR NR $ 560 Glen Cove IDA, (Regency at Glen Cove),
9.50%, 7/1/99 $ 563,562
NR NR 500 Glen Cove IDA, (Regency at Glen Cove),
9.50%, 7/1/12 533,875
---------------------------------------------------------------------------------------
$ 1,097,437
---------------------------------------------------------------------------------------
Cogeneration -- 2.4%
---------------------------------------------------------------------------------------
NR NR $ 950 Port Authority of New York and New
Jersey, (KIAC), (AMT), 6.50%, 10/1/01 $ 997,434
NR NR 600 Suffolk County IDA, (Nissequogue
Cogeneration Partners Facility), (AMT),
5.50%, 1/1/23 603,144
---------------------------------------------------------------------------------------
$ 1,600,578
---------------------------------------------------------------------------------------
Education -- 0.3%
---------------------------------------------------------------------------------------
A3 A- $ 100 New York State Dormitory Authority,
(State University Educational
Facilities), 5.25%, 5/15/15 $ 104,148
A3 A- 105 New York State Dormitory Authority,
(State University Educational
Facilities), 5.25%, 5/15/19 107,963
---------------------------------------------------------------------------------------
$ 212,111
---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 5.9%
---------------------------------------------------------------------------------------
Aaa AAA $1,000 New York State Medical Care Facilities
Finance Agency, (New York State
Hospital), (AMBAC), Escrowed to
Maturity, 6.10%, 2/15/04 $ 1,094,160
Aaa AAA 2,500 New York State Medical Care Facilities
Finance Agency, (New York State
Hospital), (AMBAC), Escrowed to
Maturity, 6.20%, 2/15/05 2,778,950
---------------------------------------------------------------------------------------
$ 3,873,110
---------------------------------------------------------------------------------------
General Obligations -- 4.9%
---------------------------------------------------------------------------------------
A3 A- $ 750 New York City, 0.00%, 8/1/07 $ 518,033
A3 A- 1,000 New York City, 0.00%, 8/1/08 657,110
A3 A- 1,000 New York City, 0.00%, 8/1/08 657,110
A3 A- 1,285 New York City, 6.375%, 8/1/06 1,395,741
---------------------------------------------------------------------------------------
$ 3,227,994
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
(UNAUDITED)
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Hospital -- 4.9%
---------------------------------------------------------------------------------------
Baa1 BBB+ $2,000 New York State Dormitory Authority,
(Department of Health), 5.375%, 7/1/08 $ 2,124,080
Baa NR 1,000 New York State Dormitory Authority,
(Nyack Hospital), 6.00%, 7/1/06 1,081,430
---------------------------------------------------------------------------------------
$ 3,205,510
---------------------------------------------------------------------------------------
Hotel -- 0.7%
---------------------------------------------------------------------------------------
NR NR $1,210 Niagara County IDA, (Wintergarden Inn
Associates), 9.75%, 6/1/11(1) $ 484,000
---------------------------------------------------------------------------------------
$ 484,000
---------------------------------------------------------------------------------------
Housing -- 10.8%
---------------------------------------------------------------------------------------
Aa AA $3,870 New York City Housing Development Corp.,
MFMR, 5.625%, 5/1/12 $ 4,117,293
Aa2 NR 1,500 New York State Mortgage Agency Revenue,
(AMT), 6.45%, 10/1/21 1,627,830
Aa2 NR 1,300 New York State Mortgage Agency, (AMT),
5.20%, 10/1/08 1,349,647
---------------------------------------------------------------------------------------
$ 7,094,770
---------------------------------------------------------------------------------------
Industrial Development Revenue -- 11.6%
---------------------------------------------------------------------------------------
NR NR $ 500 Chautauqua County IDA, (Womans Christian
Association), 6.35%, 11/15/17 $ 500,640
A3 A 2,000 New York City, (Terminal One Group),
6.00%, 1/1/07 2,156,560
Baa3 BBB- 2,875 Port Authority of New York and New
Jersey, (Delta Airlines), 6.95%, 6/1/08 3,114,430
Baa3 BBB- 1,700 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 1,833,824
---------------------------------------------------------------------------------------
$ 7,605,454
---------------------------------------------------------------------------------------
Insured-Education -- 7.0%
---------------------------------------------------------------------------------------
Aaa AAA $2,250 Nassau County IDA, (Hofstra University),
(MBIA), 5.25%, 7/1/10 $ 2,396,498
Aaa AAA 1,075 New York State Dormitory Authority, (Mt.
Sinai School of Medicine), (MBIA),
6.75%, 7/1/09 1,165,365
Aaa AAA 500 New York State Dormitory Authority, (New
York University), (AMBAC), 5.75%,
7/1/12(2) 527,740
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
54
<PAGE>
NEW YORK 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 (continued)
---------------------------------------------------------------------------------------
Aaa AAA $ 500 Niagara County IDA, (Niagara
University), (AMBAC), 5.25%, 10/1/18 $ 510,615
---------------------------------------------------------------------------------------
$ 4,600,218
---------------------------------------------------------------------------------------
Insured-Electric Utilities -- 8.0%
---------------------------------------------------------------------------------------
Aaa AAA $5,000 New York State Energy Research and
Development Authority, (Central Hudson
Gas), (FGIC), 7.375%, 10/1/14 $ 5,244,549
---------------------------------------------------------------------------------------
$ 5,244,549
---------------------------------------------------------------------------------------
Insured-General Obligations -- 2.1%
---------------------------------------------------------------------------------------
Aaa AAA $2,750 New York State Local Government
Assistance Corp., (MBIA), 0.00%, 4/1/13 $ 1,404,013
---------------------------------------------------------------------------------------
$ 1,404,013
---------------------------------------------------------------------------------------
Insured-Hospital -- 0.8%
---------------------------------------------------------------------------------------
Aaa AAA $ 500 New York State Dormitory Authority,
(Methodist Hospital), (AMBAC), 5.00%,
7/1/10 $ 516,265
---------------------------------------------------------------------------------------
$ 516,265
---------------------------------------------------------------------------------------
Insured-Lease Revenue /
Certificates of Participation -- 0.8%
---------------------------------------------------------------------------------------
Aaa AAA $ 500 City University of New York, (John Jay
College), (AMBAC), 5.00%, 8/15/08 $ 525,360
---------------------------------------------------------------------------------------
$ 525,360
---------------------------------------------------------------------------------------
Insured-Transportation -- 3.7%
---------------------------------------------------------------------------------------
Aaa AAA $2,240 Metropolitan Transportation Authority
for the City of New York, (FGIC), 5.70%,
7/1/10(3) $ 2,453,942
---------------------------------------------------------------------------------------
$ 2,453,942
---------------------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 12.5%
---------------------------------------------------------------------------------------
Baa1 BBB+ $2,180 New York State Energy Research and
Development Authority, (Western NY
Nuclear Service Center), 6.00%, 4/1/06 $ 2,384,767
Baa1 A- 2,000 New York State HFA, 6.375%, 11/1/03(3) 2,186,540
<CAPTION>
RATINGS
(UNAUDITED)
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Lease Revenue /
Certificates of Participation (continued)
---------------------------------------------------------------------------------------
NR BBB $1,485 New York State Thruway Authority, 0.00%,
1/1/04 $ 1,216,675
Baa1 BBB+ 1,300 New York State Thruway Authority, 5.25%,
4/1/13 1,322,399
Baa1 BBB+ 1,000 New York State Urban Development Corp.,
(Youth Facilities), 5.75%, 4/1/10 1,084,890
---------------------------------------------------------------------------------------
$ 8,195,271
---------------------------------------------------------------------------------------
Senior Living / Life Care -- 0.8%
---------------------------------------------------------------------------------------
Baa3 BBB- $ 500 New York City, Health and Hospital
Corp., 5.25%, 2/15/17 $ 496,530
---------------------------------------------------------------------------------------
$ 496,530
---------------------------------------------------------------------------------------
Special Tax Revenue -- 7.1%
---------------------------------------------------------------------------------------
A3 A+ $4,500 New York State Local Government
Assistance Corp., 5.25%, 4/1/16 $ 4,682,925
---------------------------------------------------------------------------------------
$ 4,682,925
---------------------------------------------------------------------------------------
Transportation -- 6.6%
---------------------------------------------------------------------------------------
Baa1 BBB+ $1,000 Port Authority of New York and New
Jersey, (AMT), 5.75%, 4/1/16 $ 1,066,890
A1 AA- 3,000 Port Authority of New York and New
Jersey, (AMT), 6.00%, 7/1/14 3,257,490
---------------------------------------------------------------------------------------
$ 4,324,380
---------------------------------------------------------------------------------------
Water and Sewer -- 7.4%
---------------------------------------------------------------------------------------
A1 A $3,000 New York City Municipal Water Finance
Authority, 5.125%, 6/15/21 $ 2,968,380
A1 A 1,825 New York City Municipal Water Finance
Authority, 5.70%, 6/15/02 1,929,463
---------------------------------------------------------------------------------------
$ 4,897,843
---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $62,315,489) $ 65,742,260
---------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
55
<PAGE>
NEW YORK LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
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, 1999, 28.3% 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 a low of 7.6% to a high of 11.7% of total
investments.
(1) Non-income producing security.
(2) When-issued security.
(3) Security (or a portion thereof) has been segregated to cover when-issued
securities.
SEE NOTES TO FINANCIAL STATEMENTS
56
<PAGE>
OHIO 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>
---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 5.9%
---------------------------------------------------------------------------------------
Aaa NR $ 240 Greene County IDA, (Fairview Extended
Care), Prerefunded to 1/1/01, 10.125%,
1/1/11 $ 271,229
Aa2 NR 1,000 Warren County, (Otterbein Homes),
Prerefunded to 7/1/01, 7.20%, 7/1/11 1,094,579
---------------------------------------------------------------------------------------
$ 1,365,808
---------------------------------------------------------------------------------------
General Obligations -- 14.0%
---------------------------------------------------------------------------------------
NR NR $ 300 Kings County Local School District,
7.60%, 12/1/10 $ 348,156
Aa3 NR 250 Oak Hills, 5.60%, 12/1/17 263,623
Aa1 AA+ 675 Ohio, 0.00%, 8/1/04 545,616
Aa1 AA+ 500 Ohio, 0.00%, 8/1/05 385,710
Aa1 AA+ 250 Ohio, 0.00%, 8/1/08 166,543
A3 NR 1,000 Wauseon School District, 7.25%, 12/1/10 1,082,900
NR NR 410 Youngstown County School District,
6.40%, 7/1/00 418,221
---------------------------------------------------------------------------------------
$ 3,210,769
---------------------------------------------------------------------------------------
Hospital -- 7.0%
---------------------------------------------------------------------------------------
A A $1,000 Erie County, (Firelands Community
Hospital), 6.75%, 1/1/08 $ 1,085,509
Baa2 BBB 250 Hamilton County Health System,
(Providence Hospital), 6.00%, 7/1/01 259,438
NR A- 250 Parma, Hospital Improvement Revenue,
(Parma Community General Hospital
Association), 5.25%, 11/1/13 252,475
---------------------------------------------------------------------------------------
$ 1,597,422
---------------------------------------------------------------------------------------
Housing -- 7.3%
---------------------------------------------------------------------------------------
NR AAA $1,000 Cuyahoga County, (National Terminal
Apts.), 6.40%, 7/1/16 $ 1,084,130
NR NR 295 Cuyahoga County, (Rolling Hills Apts.),
(AMT), 8.00%, 1/1/28 301,121
NR NR 290 Lucas County, (Country Creek), (AMT),
8.00%, 7/1/26 291,351
---------------------------------------------------------------------------------------
$ 1,676,602
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
(UNAUDITED)
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Industrial Development Revenue -- 13.6%
---------------------------------------------------------------------------------------
NR NR $ 500 Cuyahoga County, (Rock and Roll Hall of
Fame), 5.45%, 12/1/05 $ 524,920
NR NR 250 Cuyahoga County, (Rock and Roll Hall of
Fame), 5.85%, 12/1/08 268,713
NR BBB 500 Dayton, Special Facilities Revenue,
(Emery Airline Freight), 5.625%, 2/1/18 503,995
NR A- 1,020 Ohio Economic Development Commission,
(ABS Industries), (AMT), 6.00%, 6/1/04 1,078,823
NR A- 450 Ohio Economic Development Commission,
(Progress Plastics Products), (AMT),
6.80%, 12/1/01 465,521
NR NR 250 Ohio Solid Waste Revenue, (Republic
Engineered Steels, Inc.), (AMT), 9.00%,
6/1/21 267,725
---------------------------------------------------------------------------------------
$ 3,109,697
---------------------------------------------------------------------------------------
Insured-Education -- 4.4%
---------------------------------------------------------------------------------------
Aaa AAA $1,000 Ohio Public Facilities Commission,
(Higher Educational Facilities),
(AMBAC), 4.30%, 12/1/08 $ 1,001,040
---------------------------------------------------------------------------------------
$ 1,001,040
---------------------------------------------------------------------------------------
Insured-General Obligations -- 26.9%
---------------------------------------------------------------------------------------
Aaa NR $ 265 Clinton Massie Local School District,
(AMBAC), 0.00%, 12/1/11 $ 147,947
Aaa NR 265 Clinton Massie Local School District,
(MBIA), 0.00%, 12/1/09 165,283
Aaa AAA 225 Finneytown Local School District,
(FGIC), 6.15%, 12/1/11 261,716
Aaa AAA 500 Forest Hills Local School District,
(MBIA), 6.00%, 12/1/09 571,845
Aaa AAA 500 South-Western City School District,
Franklin and Pickway Counties, (AMBAC),
4.75%, 12/1/26 473,815
Aaa AAA 1,000 Southwest Licking School Facilities
Improvement, (FGIC), 7.10%, 12/1/16 1,173,549
Aaa AAA 500 Strongsville City School District,
(MBIA), 5.375%, 12/1/12 539,750
Aaa AAA 1,500 West Clermont School District, (AMBAC),
6.90%, 12/1/12 1,745,969
Aaa AAA 500 West Clermont School District, (AMBAC),
7.125%, 12/1/19 579,980
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
57
<PAGE>
OHIO 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-General Obligations (continued)
---------------------------------------------------------------------------------------
Aaa AAA $ 460 Wyoming, School District, (FGIC), 5.75%,
12/1/17 $ 508,332
---------------------------------------------------------------------------------------
$ 6,168,186
---------------------------------------------------------------------------------------
Insured-Hospital -- 3.5%
---------------------------------------------------------------------------------------
Aaa AAA $ 500 Cuyahoga County, (Metrohealth System),
(MBIA), 5.50%, 2/15/12 $ 539,030
NR AA 250 Knox County Hospital Facilities Revenue,
(Knox Community Hospital), (AGR), 5.00%,
6/1/12 253,968
---------------------------------------------------------------------------------------
$ 792,998
---------------------------------------------------------------------------------------
Insured-Industrial Development Revenue -- 2.5%
---------------------------------------------------------------------------------------
Aaa AAA $ 500 Akron Economic Development, (MBIA),
6.00%, 12/1/12 $ 569,035
---------------------------------------------------------------------------------------
$ 569,035
---------------------------------------------------------------------------------------
Insured-Lease Revenue /
Certificates of Participation -- 2.2%
---------------------------------------------------------------------------------------
Aaa AAA $ 500 Cleveland, (Cleveland Stadium), (AMBAC),
5.25%, 11/15/17 $ 509,145
---------------------------------------------------------------------------------------
$ 509,145
---------------------------------------------------------------------------------------
Insured-Transportation -- 2.3%
---------------------------------------------------------------------------------------
Aaa AAA $ 500 Cleveland Airport, (FSA), (AMT), 5.50%,
1/1/07 $ 536,260
---------------------------------------------------------------------------------------
$ 536,260
---------------------------------------------------------------------------------------
Insured-Water and Sewer -- 2.4%
---------------------------------------------------------------------------------------
Aaa AAA $ 500 Hamilton County Sewer System, (FGIC),
5.50%, 12/1/11 $ 546,575
---------------------------------------------------------------------------------------
$ 546,575
---------------------------------------------------------------------------------------
Nursing Home -- 3.6%
---------------------------------------------------------------------------------------
NR NR $ 600 Cuyahoga County HFA, (Benjamin Rose
Institute), 5.50%, 12/1/17 $ 597,870
NR NR 210 Fairfield EDA, (Beverly Enterprises),
8.50%, 1/1/03 223,558
---------------------------------------------------------------------------------------
$ 821,428
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
(UNAUDITED)
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Pooled Loans -- 0.9%
---------------------------------------------------------------------------------------
NR NR $ 200 Toledo Lucas County Port Authority
Development Revenue, (Northwest Ohio
Bond Fund), 5.10%, 5/15/12 $ 199,212
---------------------------------------------------------------------------------------
$ 199,212
---------------------------------------------------------------------------------------
Senior Living / Life Care -- 1.9%
---------------------------------------------------------------------------------------
NR NR $ 200 Ohio Housing Finance Agency, Retirement
Rental Housing, (Encore Retirement
Partners), 6.75%, 3/1/19 $ 200,414
NR NR 250 Summit County Healthcare Facilities
Revenue, (Village at Saint Edward),
5.75%, 12/1/25 243,660
---------------------------------------------------------------------------------------
$ 444,074
---------------------------------------------------------------------------------------
Special Tax Revenue -- 1.6%
---------------------------------------------------------------------------------------
NR NR $ 353 Columbus Special Assessment, 6.05%,
9/15/05 $ 367,241
---------------------------------------------------------------------------------------
$ 367,241
---------------------------------------------------------------------------------------
Total Tax Exempt Investments -- 100.0%
(identified cost $21,838,423) $ 22,915,492
---------------------------------------------------------------------------------------
</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, 1999, 44.2% 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 institutions ranged from a low of 1.1% to a high of 19.5% of total
investments.
SEE NOTES TO FINANCIAL STATEMENTS
58
<PAGE>
PENNSYLVANIA 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 -- 4.4%
---------------------------------------------------------------------------------------
NR NR $ 885 Chester County IDA, (Kimberton), 8.00%,
9/1/05 $ 956,322
NR NR 1,120 Delaware County IDA, (Glen Riddle),
(AMT), 8.125%, 9/1/05(1) 1,220,587
---------------------------------------------------------------------------------------
$ 2,176,909
---------------------------------------------------------------------------------------
Certificates of Participation -- 1.0%
---------------------------------------------------------------------------------------
NR NR $ 500 Cliff House Trust, (AMT), 6.625%, 6/1/27 $ 500,000
---------------------------------------------------------------------------------------
$ 500,000
---------------------------------------------------------------------------------------
Cogeneration -- 3.3%
---------------------------------------------------------------------------------------
NR BBB- $1,500 Pennsylvania EDA, (Resources
Recovery-Colver), (AMT), 7.05%,
12/1/10(1) $ 1,646,490
---------------------------------------------------------------------------------------
$ 1,646,490
---------------------------------------------------------------------------------------
Education -- 2.7%
---------------------------------------------------------------------------------------
Baa3 NR $ 740 Pennsylvania HEFA, (Delaware Valley
College of Science and Agriculture),
5.25%, 4/5/12 $ 734,124
NR BBB- 625 Pennsylvania HEFA, (Gwynedd-Mercy
College), 5.60%, 11/1/22 629,806
---------------------------------------------------------------------------------------
$ 1,363,930
---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 9.9%
---------------------------------------------------------------------------------------
Aaa AAA $ 500 Harrisburg Authority, (FSA), Escrowed to
Maturity, 6.25%, 6/1/01 $ 527,940
Aaa AAA 1,500 Somerset County, General Authority,
(FGIC), Escrowed to Maturity, 6.50%,
10/15/01 1,606,230
NR NR 920 Virgin Islands Water and Power
Authority, Prerefunded to 7/1/01, 7.40%,
7/1/11 1,002,239
Aaa AAA 5,000 Westmoreland County, Municipal
Authority, (FGIC), Escrowed to Maturity,
0.00%, 8/15/19 1,795,850
---------------------------------------------------------------------------------------
$ 4,932,259
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
(UNAUDITED)
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
General Obligations -- 0.4%
---------------------------------------------------------------------------------------
Baa1 A $ 500 Puerto Rico, 0.00%, 7/1/16 $ 212,945
---------------------------------------------------------------------------------------
$ 212,945
---------------------------------------------------------------------------------------
Hospital -- 15.0%
---------------------------------------------------------------------------------------
NR BBB $1,000 Allentown, Area Hospital Authority,
(Sacred Heart Hospital), 6.50%, 11/15/08 $ 1,071,490
Baa3 BBB+ 650 Hazleton Health Services Authority, (St.
Joseph's Hospital), 5.85%, 7/1/06 690,417
A3 A 1,200 Lehigh County, General Purpose
Authority, (Muhlenberg Hospital), 5.75%,
7/15/10 1,315,500
NR BBB- 200 McKean County Hospital Authority,
(Bradford Hospital), 5.375%, 10/1/03 204,718
Caa1 B 1,000 Monroeville Hospital Authority, (Forbes
Health), 5.75%, 10/1/05 961,250
Baa2 NR 1,030 Montgomery County HEFA, (Montgomery
Hospital), 6.25%, 7/1/06 1,099,010
Baa1 NR 500 New Castle Area Hospital Authority, (St.
Francis Hospital of New Castle), 5.90%,
11/15/00 516,230
NR BBB 245 Northhampton County Hospital Authority,
(Easton Hospital), 6.90%, 1/1/02 254,342
NR A- 1,350 South Fork Municipal Authority, (Lee
Hospital), 5.50%, 7/1/11 1,364,445
---------------------------------------------------------------------------------------
$ 7,477,402
---------------------------------------------------------------------------------------
Housing -- 2.1%
---------------------------------------------------------------------------------------
Aa2 AA+ $1,000 Pennsylvania Housing Finance Agency,
Single Family, (AMT), 5.85%, 10/1/27 $ 1,046,380
---------------------------------------------------------------------------------------
$ 1,046,380
---------------------------------------------------------------------------------------
Industrial Development Revenue -- 2.5%
---------------------------------------------------------------------------------------
A3 BBB+ $1,200 Erie IDA, (International Paper), (AMT),
5.85%, 12/1/20 $ 1,238,340
---------------------------------------------------------------------------------------
$ 1,238,340
---------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
59
<PAGE>
PENNSYLVANIA 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 -- 6.2%
---------------------------------------------------------------------------------------
Aaa AAA $2,000 Allegheny County, Higher Education
Building Authority, (Dusquesne
University), (AMBAC), 5.00%, 3/1/16 $ 2,003,480
NR AAA 700 Montgomery County HEFA, (Saint Joseph's
University), (CLEE), 6.00%, 12/15/02 752,087
Aaa AAA 300 Pennsylvania Public School Building
Authority, (Community College), (MBIA),
5.25%, 10/15/13 312,888
---------------------------------------------------------------------------------------
$ 3,068,455
---------------------------------------------------------------------------------------
Insured-Electric Utilities -- 9.7%
---------------------------------------------------------------------------------------
Aaa AAA $2,000 Cambria County IDA, (Pennsylvania
Electric Co.), (MBIA), 5.35%, 11/1/10 $ 2,153,020
Aaa AAA 2,500 Indiana County IDA, (Pennsylvania
Electric Co.), (MBIA), 5.35%, 11/1/10 2,691,275
---------------------------------------------------------------------------------------
$ 4,844,295
---------------------------------------------------------------------------------------
Insured-General Obligations -- 6.3%
---------------------------------------------------------------------------------------
Aaa NR $1,635 Harrisburg, (AMBAC), 0.00%, 9/15/12 $ 850,135
Aaa AAA 1,355 McKeesport, (FGIC), 0.00%, 10/1/11 760,453
Aaa AAA 1,000 Pennsylvania, (AMBAC), 5.00%, 11/15/15 1,010,220
Aaa AAA 500 Pleasant Valley School District, (FGIC),
5.00%, 9/1/10 528,760
---------------------------------------------------------------------------------------
$ 3,149,568
---------------------------------------------------------------------------------------
Insured-Hospital -- 12.4%
---------------------------------------------------------------------------------------
Aaa AAA $1,000 Allegheny County Hospital Development
Authority, (South Hills Health), (MBIA),
5.50%, 5/1/08 $ 1,080,020
Aaa AAA 1,000 Erie County Hospital Authority, (Hamot
Health System), (AMBAC), 7.10%, 2/15/10 1,081,890
NR AAA 1,030 Indiana County Hospital Authority,
(Indiana Hospital), (CLEE), 5.75%,
7/1/00 1,059,252
<CAPTION>
RATINGS
(UNAUDITED)
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Insured-Hospital (continued)
---------------------------------------------------------------------------------------
NR AAA $ 825 Indiana County Hospital Authority,
(Indiana Hospital), (CLEE), 5.875%,
7/1/01 $ 863,437
Aaa AAA 2,050 Sayre Health Care Facilities Authority,
(Guthrie Medical Center), (AMBAC),
6.50%, 3/1/00 2,108,405
---------------------------------------------------------------------------------------
$ 6,193,004
---------------------------------------------------------------------------------------
Insured-Lease Revenue /
Certificates of Participation -- 2.1%
---------------------------------------------------------------------------------------
Aaa AAA $1,000 Northumberland County Authority, (MBIA),
6.50%, 10/15/01 $ 1,070,820
---------------------------------------------------------------------------------------
$ 1,070,820
---------------------------------------------------------------------------------------
Insured-Solid Waste -- 2.1%
---------------------------------------------------------------------------------------
Aaa AAA $1,000 Lancaster County, Solid Waste Management
Authority Resources Recovery System,
(AMBAC), 5.375%, 12/15/15 $ 1,035,090
---------------------------------------------------------------------------------------
$ 1,035,090
---------------------------------------------------------------------------------------
Insured-Special Tax Revenue -- 2.1%
---------------------------------------------------------------------------------------
Aaa AAA $1,000 Pennsylvania Intergovernmental
Cooperative Authority, (Philadelphia
Funding Program), (FGIC), 5.25%,
6/15/11(2) $ 1,047,830
---------------------------------------------------------------------------------------
$ 1,047,830
---------------------------------------------------------------------------------------
Insured-Transportation -- 7.7%
---------------------------------------------------------------------------------------
Aaa AAA $1,000 Allegheny County Airport Revenue,
(MBIA), 5.75%, 1/1/10 $ 1,089,940
Aaa AAA 590 Allegheny County Airport Revenue,
(MBIA), 5.75%, 1/1/12 643,826
Aaa AAA 1,000 Philadelphia Airport Revenue, (FGIC),
5.375%, 7/1/14 1,041,070
Aaa AAA 1,000 Southeastern Pennsylvania Transportation
Authority, (FGIC), 5.55%, 3/1/14 1,064,680
---------------------------------------------------------------------------------------
$ 3,839,516
---------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
60
<PAGE>
PENNSYLVANIA 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>
Nursing Home -- 1.5%
---------------------------------------------------------------------------------------
NR NR $ 250 Chartiers Valley, Industrial and
Commercial Development Authority,
(Beverly Enterprises), 5.30%, 6/1/02 $ 253,930
NR NR 250 Chartiers Valley, Industrial and
Commercial Development Authority,
(Beverly Enterprises), 5.35%, 6/1/03 253,838
NR NR 250 Green County IDA, (Beverly Enterprises,
Inc.), 5.50%, 3/1/08 247,560
---------------------------------------------------------------------------------------
$ 755,328
---------------------------------------------------------------------------------------
Senior Living / Life Care -- 2.8%
---------------------------------------------------------------------------------------
NR NR $ 245 Delaware County Authority, (White Horse
Village), 6.30%, 7/1/03 $ 259,457
NR NR 505 Delaware County Authority, (White Horse
Village), 6.40%, 7/1/04 540,946
Baa2 BBB+ 590 Hazleton Health Services Authority,
(Hazleton General Hospital), 5.50%,
7/1/07 615,936
---------------------------------------------------------------------------------------
$ 1,416,339
---------------------------------------------------------------------------------------
Solid Waste -- 3.7%
---------------------------------------------------------------------------------------
Baa2 A- $ 500 Greater Lebanon Refuse Authority, 6.20%,
5/15/99 $ 501,800
Baa2 A- 500 Greater Lebanon Refuse Authority, 6.20%,
11/15/99 509,075
Baa2 A- 300 Greater Lebanon Refuse Authority, 6.40%,
5/15/00 309,081
Baa2 A- 500 Greater Lebanon Refuse Authority, 6.40%,
11/15/00 520,720
---------------------------------------------------------------------------------------
$ 1,840,676
---------------------------------------------------------------------------------------
Transportation -- 2.1%
---------------------------------------------------------------------------------------
Aa3 AA- $1,000 Southeastern Pennsylvania Transportation
Authority, 6.00%, 6/1/01 $ 1,050,130
---------------------------------------------------------------------------------------
$ 1,050,130
---------------------------------------------------------------------------------------
Total Tax Exempt Investments -- 100.0%
(identified cost $47,736,936) $ 49,905,706
---------------------------------------------------------------------------------------
</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, 1999, 56.5% 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 insured by
financial institutions ranged from a low of 1.1% to a high of 18.1% of total
investments.
(1) Security (or a portion thereof) has been segregated to cover when-issued
securities.
(2) When-issued security.
SEE NOTES TO FINANCIAL STATEMENTS
61
<PAGE>
LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
FINANCIAL STATEMENTS
STATEMENTS OF ASSETS AND LIABILITIES
AS OF MARCH 31, 1999
<TABLE>
<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 $ 27,931,688 $ 8,361,603 $ 56,582,960 $47,451,800 $ 9,640,542
Unrealized appreciation 1,451,997 495,952 2,729,429 2,393,141 775,990
- --------------------------------------------------------------------------------------------------------------------
INVESTMENTS, AT VALUE $ 29,383,685 $ 8,857,555 $ 59,312,389 $49,844,941 $ 10,416,532
- --------------------------------------------------------------------------------------------------------------------
Cash $ 750 $ 117,488 $ 559 $ 1,014,263 $ 922
Interest receivable 406,394 123,403 1,163,596 687,100 211,306
- --------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 29,790,829 $ 9,098,446 $ 60,476,544 $51,546,304 $ 10,628,760
- --------------------------------------------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------------------------------------------
Payable for when-issued securities $ 883,572 $ -- $ 386,901 $ -- $ --
Demand note payable 227,000 -- 138,000 -- 13,000
Other accrued expenses 2,152 533 3,433 2,859 30
- --------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 1,112,724 $ 533 $ 528,334 $ 2,859 $ 13,030
- --------------------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS'
INTEREST IN PORTFOLIO $ 28,678,105 $ 9,097,913 $ 59,948,210 $51,543,445 $ 10,615,730
- --------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------------------------------------------------------------------
Net proceeds from capital contributions
and withdrawals $ 27,226,108 $ 8,601,961 $ 57,218,781 $49,150,304 $ 9,839,740
Net unrealized appreciation (computed on
the basis of identified cost) 1,451,997 495,952 2,729,429 2,393,141 775,990
- --------------------------------------------------------------------------------------------------------------------
TOTAL $ 28,678,105 $ 9,097,913 $ 59,948,210 $51,543,445 $ 10,615,730
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
62
<PAGE>
LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF ASSETS AND LIABILITIES
AS OF MARCH 31, 1999
<TABLE>
<CAPTION>
NEW JERSEY NEW YORK OHIO PENNSYLVANIA
LIMITED LIMITED LIMITED LIMITED
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
Assets
- ----------------------------------------------------------------------------------------------------
Investments --
Identified cost $ 36,941,483 $ 62,315,489 $ 21,838,423 $ 47,736,936
Unrealized appreciation 2,483,449 3,426,771 1,077,069 2,168,770
- ----------------------------------------------------------------------------------------------------
INVESTMENTS, AT VALUE $ 39,424,932 $ 65,742,260 $ 22,915,492 $ 49,905,706
- ----------------------------------------------------------------------------------------------------
Cash $ 2 $ 269 $ 658 $ 1,163,007
Interest receivable 562,003 1,196,373 366,745 747,368
Receivable for daily variation margin on
financial futures contracts -- -- -- 7,177
- ----------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 39,986,937 $ 66,938,902 $ 23,282,895 $ 51,823,258
- ----------------------------------------------------------------------------------------------------
Liabilities
- ----------------------------------------------------------------------------------------------------
Payable for investments purchased $ -- $ -- $ 200,652 $ --
Payable for when-issued securities -- 528,820 -- 1,050,005
Demand note payable 202,000 535,000 280,000 --
Other accrued expenses 4,246 2,329 1,390 2,561
- ----------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 206,246 $ 1,066,149 $ 482,042 $ 1,052,566
- ----------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS'
INTEREST IN PORTFOLIO $ 39,780,691 $ 65,872,753 $ 22,800,853 $ 50,770,692
- ----------------------------------------------------------------------------------------------------
Sources of Net Assets
- ----------------------------------------------------------------------------------------------------
Net proceeds from capital contributions
and withdrawals $ 37,297,242 $ 62,445,982 $ 21,723,784 $ 48,601,922
Net unrealized appreciation (computed on
the basis of identified cost) 2,483,449 3,426,771 1,077,069 2,168,770
- ----------------------------------------------------------------------------------------------------
TOTAL $ 39,780,691 $ 65,872,753 $ 22,800,853 $ 50,770,692
- ----------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
63
<PAGE>
LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
CALIFORNIA CONNECTICUT FLORIDA MASSACHUSETTS MICHIGAN
LIMITED LIMITED LIMITED LIMITED LIMITED
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
Investment Income
- ----------------------------------------------------------------------------------------------------------------
Interest $ 1,679,122 $507,449 $ 3,463,508 $2,808,095 $ 609,481
- ----------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME $ 1,679,122 $507,449 $ 3,463,508 $2,808,095 $ 609,481
- ----------------------------------------------------------------------------------------------------------------
Expenses
- ----------------------------------------------------------------------------------------------------------------
Investment adviser fee $ 145,652 $ 43,610 $ 301,844 $ 244,974 $ 51,653
Trustees fees and expenses 1,814 186 6,125 8,079 185
Legal and accounting services 19,363 17,262 22,562 22,463 17,362
Custodian fee 24,474 12,787 44,966 39,437 15,567
Bond pricing -- 4,546 -- -- --
Amortization of organization expenses 136 -- 378 354 --
Miscellaneous 7,316 480 11,530 7,341 6,029
- ----------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 198,755 $ 78,871 $ 387,405 $ 322,648 $ 90,796
- ----------------------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee $ 4,392 $ 2,917 $ 12,287 $ 17,586 $ 3,575
Reduction of investment adviser fee -- 21,626 -- -- --
- ----------------------------------------------------------------------------------------------------------------
TOTAL EXPENSE REDUCTIONS $ 4,392 $ 24,543 $ 12,287 $ 17,586 $ 3,575
- ----------------------------------------------------------------------------------------------------------------
NET EXPENSES $ 194,363 $ 54,328 $ 375,118 $ 305,062 $ 87,221
- ----------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 1,484,759 $453,121 $ 3,088,390 $2,503,033 $ 522,260
- ----------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
- ----------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $ 508,612 $ 49,350 $ 848,816 $ 732,983 $ 169,914
Financial futures contracts (130,540) (29,661) (208,377) (284,350) (53,859)
- ----------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN $ 378,072 $ 19,689 $ 640,439 $ 448,633 $ 116,055
- ----------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $ (263,755) $ 13,577 $ (716,010) $ (473,609) $ (183,643)
Financial futures contracts (209) 3,630 11,838 15,948 2,436
- ----------------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $ (263,964) $ 17,207 $ (704,172) $ (457,661) $ (181,207)
- ----------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) $ 114,108 $ 36,896 $ (63,733) $ (9,028) $ (65,152)
- ----------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 1,598,867 $490,017 $ 3,024,657 $2,494,005 $ 457,108
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
64
<PAGE>
LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
NEW JERSEY NEW YORK OHIO PENNSYLVANIA
LIMITED LIMITED LIMITED LIMITED
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
Investment Income
- -------------------------------------------------------------------------------------------------
Interest $ 2,292,343 $ 3,689,798 $ 1,291,008 $2,910,538
- -------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME $ 2,292,343 $ 3,689,798 $ 1,291,008 $2,910,538
- -------------------------------------------------------------------------------------------------
Expenses
- -------------------------------------------------------------------------------------------------
Investment adviser fee $ 196,075 $ 319,237 $ 109,528 $ 248,326
Trustees fees and expenses 2,292 8,079 229 8,080
Legal and accounting services 22,461 22,606 17,168 22,466
Custodian fee 28,180 32,874 20,899 36,372
Amortization of organization expenses 105 219 -- 240
Miscellaneous 14,628 23,713 8,898 15,678
- -------------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 263,741 $ 406,728 $ 156,722 $ 331,162
- -------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee $ -- $ -- $ 5,946 $ 10,902
- -------------------------------------------------------------------------------------------------
TOTAL EXPENSE REDUCTIONS $ -- $ -- $ 5,946 $ 10,902
- -------------------------------------------------------------------------------------------------
NET EXPENSES $ 263,741 $ 406,728 $ 150,776 $ 320,260
- -------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 2,028,602 $ 3,283,070 $ 1,140,232 $2,590,278
- -------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
- -------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $ 302,337 $ 654,504 $ 126,261 $ 722,466
Financial futures contracts (135,039) (287,095) (100,635) (166,778)
- -------------------------------------------------------------------------------------------------
NET REALIZED GAIN $ 167,298 $ 367,409 $ 25,626 $ 555,688
- -------------------------------------------------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $ (313,608) $ (30,963) $ (85,291) $ (771,207)
Financial futures contracts 10,457 17,434 3,457 (3,369)
- -------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $ (303,151) $ (13,529) $ (81,834) $ (774,576)
- -------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) $ (135,853) $ 353,880 $ (56,208) $ (218,888)
- -------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 1,892,749 $ 3,636,950 $ 1,084,024 $2,371,390
- -------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
65
<PAGE>
LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
CALIFORNIA CONNECTICUT FLORIDA MASSACHUSETTS MICHIGAN
LIMITED LIMITED LIMITED LIMITED LIMITED
Increase (Decrease) in Net Assets PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 1,484,759 $ 453,121 $ 3,088,390 $ 2,503,033 $ 522,260
Net realized gain 378,072 19,689 640,439 448,633 116,055
Net change in unrealized appreciation
(depreciation) (263,964) 17,207 (704,172) (457,661) (181,207)
- ----------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 1,598,867 $ 490,017 $ 3,024,657 $ 2,494,005 $ 457,108
- ----------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 4,228,958 $ 1,959,442 $ 7,572,648 $ 10,696,524 $ 1,993,253
Withdrawals (11,447,139) (3,186,038) (22,890,275) (18,230,235) (3,931,845)
- ----------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM CAPITAL
TRANSACTIONS $ (7,218,181) $ (1,226,596) $ (15,317,627) $ (7,533,711) $ (1,938,592)
- ----------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (5,619,314) $ (736,579) $ (12,292,970) $ (5,039,706) $ (1,481,484)
- ----------------------------------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------
At beginning of year $ 34,297,419 $ 9,834,492 $ 72,241,180 $ 56,583,151 $ 12,097,214
- ----------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ 28,678,105 $ 9,097,913 $ 59,948,210 $ 51,543,445 $ 10,615,730
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
66
<PAGE>
LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
NEW JERSEY NEW YORK OHIO PENNSYLVANIA
LIMITED LIMITED LIMITED LIMITED
Increase (Decrease) in Net Assets PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 2,028,602 $ 3,283,070 $ 1,140,232 $ 2,590,278
Net realized gain 167,298 367,409 25,626 555,688
Net change in unrealized appreciation
(depreciation) (303,151) (13,529) (81,834) (774,576)
- ------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 1,892,749 $ 3,636,950 $ 1,084,024 $ 2,371,390
- ------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 6,467,196 $ 10,991,896 $ 4,003,683 $ 7,028,085
Withdrawals (14,119,117) (23,447,532) (6,502,512) (16,336,396)
- ------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM CAPITAL
TRANSACTIONS $ (7,651,921) $ (12,455,636) $ (2,498,829) $ (9,308,311)
- ------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (5,759,172) $ (8,818,686) $ (1,414,805) $ (6,936,921)
- ------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------
At beginning of year $ 45,539,863 $ 74,691,439 $ 24,215,658 $ 57,707,613
- ------------------------------------------------------------------------------------------------------
AT END OF YEAR $ 39,780,691 $ 65,872,753 $ 22,800,853 $ 50,770,692
- ------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
67
<PAGE>
LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
CALIFORNIA CONNECTICUT FLORIDA MASSACHUSETTS MICHIGAN
LIMITED LIMITED LIMITED LIMITED LIMITED
Increase (Decrease) in Net Assets PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 1,871,830 $ 536,076 $ 4,031,956 $ 3,067,243 $ 661,189
Net realized gain (loss) 461,548 3,686 (130,866) (1,637) (127,469)
Net change in unrealized appreciation
(depreciation) 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
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
68
<PAGE>
LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
NEW JERSEY NEW YORK OHIO PENNSYLVANIA
LIMITED LIMITED LIMITED LIMITED
Increase (Decrease) in Net Assets PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 2,529,742 $ 4,189,775 $ 1,365,120 $ 3,105,101
Net realized gain (loss) (191,388) 1,126,492 148,476 430,385
Net change in unrealized appreciation
(depreciation) 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
- ------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
69
<PAGE>
LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
CALIFORNIA LIMITED PORTFOLIO
------------------------------------------------------------------------
YEAR ENDED MARCH 31,
------------------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- ------------------------------------------------------------------------------------------------------------------
Expenses(1) 0.62% 0.61% 0.63% 0.58% 0.53%
Expenses after custodian fee reduction 0.61% 0.59% 0.61% 0.55% --
Net investment income 4.67% 4.86% 4.98% 4.82% 4.72%
Portfolio Turnover 29% 40% 57% 36% 56%
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S OMITTED) $28,678 $34,297 $43,194 $59,216 $82,344
- ------------------------------------------------------------------------------------------------------------------
</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
70
<PAGE>
LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
CONNECTICUT LIMITED PORTFOLIO
------------------------------------------------------------------------
YEAR ENDED MARCH 31,
------------------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets+
- ------------------------------------------------------------------------------------------------------------------
Net expenses(1) 0.60% 0.54% 0.54% 0.39% 0.17%
Net expenses after custodian fee
reduction 0.57% 0.52% 0.50% 0.35% --
Net investment income 4.79% 4.96% 5.09% 4.91% 4.95%
Portfolio Turnover 5% 23% 46% 52% 73%
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S OMITTED) $9,098 $9,834 $12,274 $14,862 $17,316
- ------------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Portfolios 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) 0.83% 0.77% 0.78% 0.72% 0.67%
Expenses after custodian fee reduction 0.80% 0.75% 0.74% 0.68% --
Net investment income 4.56% 4.73% 4.85% 4.58% 4.45%
- ------------------------------------------------------------------------------------------------------------------
</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 ratios for the year ended March 31, 1995 have not been adjusted
to reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
71
<PAGE>
LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
FLORIDA LIMITED PORTFOLIO
------------------------------------------------------------------------
YEAR ENDED MARCH 31,
------------------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- ------------------------------------------------------------------------------------------------------------------
Expenses(1) 0.59% 0.58% 0.59% 0.55% 0.52%
Expenses after custodian fee reduction 0.57% 0.55% 0.57% 0.54% --
Net investment income 4.68% 4.90% 4.90% 4.73% 4.73%
Portfolio Turnover 16% 38% 66% 20% 44%
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S OMITTED) $59,948 $72,241 $92,909 $127,835 $164,579
- ------------------------------------------------------------------------------------------------------------------
</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
72
<PAGE>
LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
MASSACHUSETTS LIMITED PORTFOLIO
------------------------------------------------------------------------
YEAR ENDED MARCH 31,
------------------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- ------------------------------------------------------------------------------------------------------------------
Expenses(1) 0.60% 0.60% 0.60% 0.57% 0.54%
Expenses after custodian fee reduction 0.57% 0.56% 0.58% 0.55% --
Net investment income 4.67% 4.90% 4.97% 4.72% 4.90%
Portfolio Turnover 19% 46% 60% 27% 46%
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S OMITTED) $51,543 $56,583 $69,970 $97,135 $119,120
- ------------------------------------------------------------------------------------------------------------------
</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
73
<PAGE>
LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
MICHIGAN LIMITED PORTFOLIO
------------------------------------------------------------------------
YEAR ENDED MARCH 31,
------------------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets+
- ------------------------------------------------------------------------------------------------------------------
Net expenses(1) 0.82% 0.71% 0.79% 0.68% 0.48%
Net expenses after custodian fee
reduction 0.79% 0.67% 0.76% 0.64% --
Net investment income 4.72% 5.00% 5.09% 5.00% 4.88%
Portfolio Turnover 16% 21% 28% 40% 111%
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S OMITTED) $10,616 $12,097 $14,996 $21,191 $33,198
- ------------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Portfolios 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%
Net investment income 4.77%
- ------------------------------------------------------------------------------------------------------------------
</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 ratios for the year ended March 31, 1995 have not been adjusted
to reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
74
<PAGE>
LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
NEW JERSEY LIMITED PORTFOLIO
------------------------------------------------------------------------
YEAR ENDED MARCH 31,
------------------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- ------------------------------------------------------------------------------------------------------------------
Expenses(1) 0.62% 0.62% 0.61% 0.57% 0.54%
Expenses after custodian fee reduction 0.62% 0.61% 0.58% 0.55% --
Net investment income 4.78% 4.91% 4.96% 4.78% 4.73%
Portfolio Turnover 13% 21% 37% 42% 44%
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S OMITTED) $39,781 $45,540 $58,266 $80,173 $97,280
- ------------------------------------------------------------------------------------------------------------------
</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
75
<PAGE>
LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
NEW YORK LIMITED PORTFOLIO
------------------------------------------------------------------------
YEAR ENDED MARCH 31,
------------------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- ------------------------------------------------------------------------------------------------------------------
Expenses(1) 0.59% 0.61% 0.58% 0.55% 0.52%
Expenses after custodian fee reduction 0.59% 0.59% 0.56% 0.53% --
Net investment income 4.74% 4.81% 4.87% 4.66% 4.79%
Portfolio Turnover 17% 53% 58% 32% 31%
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S OMITTED) $65,873 $74,691 $100,014 $138,728 $173,632
- ------------------------------------------------------------------------------------------------------------------
</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
76
<PAGE>
LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
OHIO LIMITED PORTFOLIO
------------------------------------------------------------------------
YEAR ENDED MARCH 31,
------------------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets+
- ------------------------------------------------------------------------------------------------------------------
Net expenses(1) 0.67% 0.64% 0.68% 0.63% 0.46%
Net expenses after custodian fee
reduction 0.64% 0.64% 0.65% 0.61% --
Net investment income 4.85% 5.05% 5.20% 5.06% 4.96%
Portfolio Turnover 19% 29% 34% 47% 120%
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S OMITTED) $22,801 $24,216 $28,470 $33,529 $39,435
- ------------------------------------------------------------------------------------------------------------------
+ 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%
Net investment income 4.84%
- ------------------------------------------------------------------------------------------------------------------
</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
77
<PAGE>
LIMITED MATURITY MUNICIPALS PORTFOLIO AS OF MARCH 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
PENNSYLVANIA LIMITED PORTFOLIO
------------------------------------------------------------------------
YEAR ENDED MARCH 31,
------------------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- ------------------------------------------------------------------------------------------------------------------
Expenses(1) 0.62% 0.60% 0.61% 0.58% 0.53%
Expenses after custodian fee reduction 0.60% 0.58% 0.59% 0.56% --
Net investment income 4.83% 5.03% 5.11% 4.81% 4.77%
Portfolio Turnover 16% 36% 51% 24% 39%
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S OMITTED) $50,771 $57,708 $67,876 $92,194 $113,606
- ------------------------------------------------------------------------------------------------------------------
</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
78
<PAGE>
LIMITED MATURITY MUNICIPALS PORTFOLIOS AS OF MARCH 31, 1999
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 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.
79
<PAGE>
LIMITED MATURITY MUNICIPALS PORTFOLIOS AS OF MARCH 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
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, 1999, each Portfolio paid advisory
fees as follows:
<TABLE>
<CAPTION>
PORTFOLIO AMOUNT EFFECTIVE RATE*
<S> <C> <C>
- ---------------------------------------------------------------------
California Limited $ 145,652 0.46%
Connecticut Limited $ 43,610 0.46%
Florida Limited $ 301,844 0.46%
Massachusetts Limited $ 244,974 0.46%
Michigan Limited $ 51,653 0.47%
New Jersey Limited $ 196,075 0.46%
New York Limited $ 319,237 0.46%
Ohio Limited $ 109,528 0.47%
Pennsylvania Limited $ 248,326 0.46%
</TABLE>
* As a percentage of average daily net assets.
To enhance the net income of the Connecticut Limited Portfolio, BMR made a
reduction of its fee in the amount of $21,626.
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, 1999, no significant amounts have been deferred.
Certain of the officers and one Trustee 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, 1999 were as follows:
<TABLE>
<CAPTION>
CALIFORNIA LIMITED PORTFOLIO CONNECTICUT LIMITED PORTFOLIO
<S> <C> <C>
- ----------------------------------------------------------------------------------------
Purchases $ 9,214,224 $ 464,365
Sales 13,658,473 1,303,628
<CAPTION>
FLORIDA LIMITED PORTFOLIO MASSACHUSETTS LIMITED PORTFOLIO
<S> <C> <C>
- ----------------------------------------------------------------------------------------
Purchases $ 10,356,183 $ 10,233,856
Sales 22,776,891 16,444,858
<CAPTION>
MICHIGAN LIMITED PORTFOLIO NEW JERSEY LIMITED PORTFOLIO
<S> <C> <C>
- ----------------------------------------------------------------------------------------
Purchases $ 1,766,466 $ 5,272,918
Sales 3,497,701 10,750,504
<CAPTION>
NEW YORK LIMITED PORTFOLIO OHIO LIMITED PORTFOLIO
<S> <C> <C>
- ----------------------------------------------------------------------------------------
Purchases $ 12,014,567 $ 4,313,016
Sales 21,758,268 4,816,807
<CAPTION>
PENNSYLVANIA LIMITED PORTFOLIO
<S> <C> <C>
- -----------------------------------------------------
Purchases $ 8,691,342
Sales 15,149,837
</TABLE>
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, 1999, as computed on a
federal income tax basis, are as follows:
<TABLE>
<CAPTION>
CALIFORNIA CONNECTICUT
LIMITED PORTFOLIO LIMITED PORTFOLIO
<S> <C> <C>
- -----------------------------------------------------------------------
AGGREGATE COST $ 27,931,688 $ 8,361,603
- -----------------------------------------------------------------------
Gross unrealized appreciation $ 1,464,257 $ 496,289
Gross unrealized depreciation (12,260) (337)
- -----------------------------------------------------------------------
NET UNREALIZED APPRECIATION $ 1,451,997 $ 495,952
- -----------------------------------------------------------------------
</TABLE>
80
<PAGE>
LIMITED MATURITY MUNICIPALS PORTFOLIOS AS OF MARCH 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
<TABLE>
<CAPTION>
FLORIDA MASSACHUSETTS
LIMITED PORTFOLIO LIMITED PORTFOLIO
- -----------------------------------------------------------------------
<S> <C> <C>
AGGREGATE COST $ 56,582,960 $ 47,451,800
- -----------------------------------------------------------------------
Gross unrealized appreciation $ 2,753,436 $ 2,441,970
Gross unrealized depreciation (24,007) (48,829)
- -----------------------------------------------------------------------
NET UNREALIZED APPRECIATION $ 2,729,429 $ 2,393,141
- -----------------------------------------------------------------------
<CAPTION>
MICHIGAN NEW JERSEY
LIMITED PORTFOLIO LIMITED PORTFOLIO
<S> <C> <C>
- -----------------------------------------------------------------------
AGGREGATE COST $ 9,640,542 $ 36,941,483
- -----------------------------------------------------------------------
Gross unrealized appreciation $ 796,029 $ 2,518,767
Gross unrealized depreciation (20,039) (35,318)
- -----------------------------------------------------------------------
NET UNREALIZED APPRECIATION $ 775,990 $ 2,483,449
- -----------------------------------------------------------------------
<CAPTION>
NEW YORK OHIO
LIMITED PORTFOLIO LIMITED PORTFOLIO
<S> <C> <C>
- -----------------------------------------------------------------------
AGGREGATE COST $ 62,315,489 $ 21,838,423
- -----------------------------------------------------------------------
Gross unrealized appreciation $ 3,440,520 $ 1,086,496
Gross unrealized depreciation (13,749) (9,427)
- -----------------------------------------------------------------------
NET UNREALIZED APPRECIATION $ 3,426,771 $ 1,077,069
- -----------------------------------------------------------------------
<CAPTION>
PENNSYLVANIA
LIMITED PORTFOLIO
<S> <C> <C>
- --------------------------------------------------
AGGREGATE COST $ 47,736,936
- --------------------------------------------------
Gross unrealized appreciation $ 2,231,709
Gross unrealized depreciation (62,939)
- --------------------------------------------------
NET UNREALIZED APPRECIATION $ 2,168,770
- --------------------------------------------------
</TABLE>
5 Line of Credit
- -------------------------------------------
The Portfolios participate 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 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 effective 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, 1999, the California
Limited Portfolio, Florida Limited Portfolio, Michigan Limited Portfolio, New
Jersey Limited Portfolio, New York Limited Portfolio and Ohio Limited
Portfolio, had balances outstanding pursuant to this line of credit of
$227,000, $138,000, $13,000, $202,000, $535,000, and $280,000, respectively.
The Portfolios did not have any significant borrowings or allocated fees
during the year ended March 31, 1999.
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.
At March 31, 1999 there were no outstanding obligations under these financial
instruments.
81
<PAGE>
LIMITED MATURITY MUNICIPALS PORTFOLIOS AS OF MARCH 31, 1999
INDEPENDENT AUDITORS' REPORT
TO THE TRUSTEES AND INVESTORS 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 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, 1999, the related statements of operations for the
year then ended, and 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 each 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 owned at March
31, 1999 by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other auditing 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 aforementioned Portfolios,
as of March 31, 1999, 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
April 30, 1999
82
<PAGE>
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS AS OF MARCH 31, 1999
INVESTMENT MANAGEMENT
EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS
Officers
Thomas J. Fetter
President
James B. Hawkes
Vice President and Trustee
Robert B. MacIntosh
Vice President
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Independent Trustees
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
LIMITED MATURITY MUNICIPALS PORTFOLIOS
Officers
Thomas J. Fetter
President
James B. Hawkes
Vice President and Trustee
Robert B. MacIntosh
Vice President
William H. Ahern, Jr.
Vice President and Portfolio Manager of
Connecticut, Massachusetts, Michigan,
New Jersey, New York and Ohio Limited
Maturity Municipals Portfolios
Cynthia J. Clemson
Vice President and Portfolio Manager of
California and Florida Limited Maturity
Municipals Portfolios
Timothy T. Browse
Vice President and Portfolio Manager of
Pennsylvania Limited Maturity Municipals Portfolio
James L. OConnor
Treasurer
Alan R. Dynner
Secretary
Independent 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
83
<PAGE>
INVESTMENT ADVISER OF THE LIMITED MATURITY MUNICIPALS PORTFOLIOS
Boston Management and Research
The Eaton Vance Building
255 State Street
Boston, MA 02109
ADMINISTRATOR OF EATON VANCE LIMITED MATURITY MUNICIPALS FUNDS
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, 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
THE EATON VANCE BUILDING
255 STATE STREET
BOSTON, MA 02109
- -------------------------------------------------------------------------------
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.
- -------------------------------------------------------------------------------
2-2140-5/99 9LTFSRC-5/99
<PAGE>
PRO FORMA COMBINING
STATEMENT OF ASSETS AND LIABILITIES
March 31,1999
<TABLE>
Eaton Vance Eaton Vance Eaton Vance Pro Forma
National Limited Michigan Limited Connecticut Limited Adjustments Pro-Forma
Maturity Municipals Maturity Municipals Maturity Municipals See Note 2 Combined
Fund Fund Fund (Unaudited) (Unaudited)
------------------- ------------------- ------------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in Portfolio, at cost $85,519,419 $ 9,709,981 $8,470,317 $ 95,229,400
---------------------------------------------------------------------------------------
Investments in Portfolio, at value $89,966,384 $10,480,801 $8,961,524 $100,447,185
Receivables for fund shares sold $ 41,671 --- --- $ 41,671
---------------------------------------------------------------------------------------
Total Assets $90,008,055 $10,480,801 $8,961,524 $100,488,856
---------------------------------------------------------------------------------------
LIABILITIES
Dividends payable $ 186,050 $ 19,576 $ 16,569 $ 205,626
Payable for fund shares redeemed $ 65,209 $ 2,435 $ --- $ 67,644
Other accrued expenses $ 65,741 $ 18,872 $ 20,668 $ 84,613
---------------------------------------------------------------------------------------
Total Liabilities $ 317,000 $ 40,883 $ 37,237 $ 357,883
---------------------------------------------------------------------------------------
Net Assets $89,691,055 $10,439,918 $8,924,287 $100,130,973
---------------------------------------------------------------------------------------
SOURCES OF NET ASSETS
Paid-in capital $89,125,238 $11,138,436 $8,919,084 $100,263,674
Accumulated net realized loss from
Portfolio (computed on identified cost) $(4,054,410) $(1,450,562) $ (536,940) $ (5,504,972)
Accumulated undistributed (distrib-
utions in excess of) net investment
income $ 173,262 $ (19,576) $ 50,936 $ 153,686
Net unrealized appreciation from
Portfolio (computed on identified cost) $ 4,446,965 $ 771,620 $ 491,207 $ 5,218,585
---------------------------------------------------------------------------------------
Total $89,691,055 $10,439,918 $8,924,287 $100,130,973
---------------------------------------------------------------------------------------
CLASS A SHARES
---------------------------------------------------------------------------------------
Net Assets $73,047,714 $ 9,786,263 $7,514,256 $ 90,348,233
Shares Outstanding 6,964,091 981,749 741,473 (73,981) 8,613,330
Net Asset Value and Redemption
Price Per Share (net assets divided
by shares of beneficial interest out-
standing) $ 10.49 $ 9.97 $ 10.13 $ 10.49
Maximum Offering Price Per Share
(100divided by 97.75 of net asset
value per share) $ 10.73 $ 10.20 $ 10.36 $ 10.73
---------------------------------------------------------------------------------------
<PAGE>
(continued)
Eaton Vance Eaton Vance Eaton Vance Pro Forma
National Limited Michigan Limited Connecticut Limited Adjustments Pro-Forma
Maturity Municipals Maturity Municipals Maturity Municipals See Note 2 Combined
Fund Fund Fund (Unaudited) (Unaudited)
------------------- ------------------- ------------------- ----------- --------------
CLASS B SHARES
---------------------------------------------------------------------------------------
Net Assets $ 5,450,483 $ 653,655 $1,410,031 $ 7,514,169
Shares Outstanding 519,616 65,579 139,239 (8,089) $ 716,345
Net Asset Value and Redemption
Price Per Share (net assets divided
by shares of beneficial interest out-
standing) $ 10.49 $ 9.97 $ 10.13 $ 10.49
---------------------------------------------------------------------------------------
CLASS C SHARES
---------------------------------------------------------------------------------------
Net Assets $11,192,858 $11,192,858
Shares Outstanding 1,140,201 1,140,201
Net Asset Value and Redemption
Price Per Share (net assets divided
by shares of beneficial interest out-
standing) $ 9.82 $ 9.82
--------------------------------------------------------------------------------------
</TABLE>
<PAGE>
PRO FORMA COMBINING
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED
March 31,1999
<TABLE>
Actual Actual Actual
Eaton Vance Eaton Vance Eaton Vance
National Michigan Connecticut
Limited Limited Limited
Maturity Maturity Maturity Pro Forma Pro Forma
Municipals Municipals Municipals Adjustments Combined
Fund Fund Fund (Unaudited) (Unaudited)
---------- ---------- ---------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Interest allocated from Portfolio $5,373,501 $602,186 $500,304 $ --- $6,475,991
Expenses allocated from Portfolio $ (543,355) $(86,178) $(53,567) $ 28,850 Note 3f $ (654,250)
----------- --------- --------- ------------ -----------
Net investment income from Portfolio $4,830,146 $516,008 $446,737 $ 28,850 $5,821,741
EXPENSES
Trustees fes and expenses $ 2,281 $ 168 $ 1,374 $ (1,542) Note 3b $ 2,281
Distribution and service fees
Class A $ 103,431 $ 14,918 $ 13,631 $ --- $ 131,980
Class B $ 65,596 $ 8,291 $ 15,857 $ --- $ 89,744
Class C $ 92,905 $ --- $ --- $ --- $ 92,905
Transfer and dividend disbursing agent fees $ 80,371 $ 11,450 $ 9,565 $ --- $ 101,386
Registration fees $ 54,956 $ 3,361 $ 424 $ (3,785) Note 3g $ 54,956
Printing and postage $ 20,916 $ 3,600 $ 3,659 $ (3,076) Note 3d $ 25,099
Legal and accounting services $ 17,721 $ 9,345 $ 9,098 $ (14,899) Note 3d $ 21,265
Custodian fee $ 13,282 $ 5,103 $ 5,820 $ (9,171) Note 3c $ 15,034
Amortization organization expense $ 12,873 $ 1,262 $ 269 $ --- $ 14,404
Miscellaneous $ 8,173 $ 3,847 $ 3,711 $ (5,923) Note 3d $ 9,808
----------- --------- --------- ------------ -----------
Expenses, net before merger costs $ 472,505 $ 61,345 $ 63,408 $ (38,396) $ 558,862
Merger costs $ --- $ --- $ --- $ 60,000 Note 4 $ 60,000
----------- --------- --------- ------------ -----------
Net investment income $4,357,641 $454,663 $383,329 $ 7,246 $5,202,879
----------- --------- --------- ------------ -----------
REALIZED AND UNREALIZED GAIN (LOSS) FROM PORTFOLIO
Net realized gain (loss) -
Investment transactions (identified
cost basis) $ 650,727 $167,850 $ 48,664 $ 867,241
Financial futures contracts $ (278,032) $(53,228) $(29,254) $ (360,514)
----------- --------- --------- ------------ -----------
Net realized gain $ 372,695 $114,622 $ 19,410 $ --- $ 506,727
----------- --------- --------- ------------ -----------
Change in unrealized appreciation
(depreciation)
Investments $(1,202,223.00) $(181,375) $ 13,373 $(1,370,225)
Financial futures contracts $ 19,807.00 $ 2,401 $ 3,626 $ 25,834
--------------- ---------- --------- ------------ -----------
Net change in unrealized appreciation
(depreciation) $(1,182,416.00) $(178,974) $ 16,999 --- $(1,344,391)
Net realized and unrealized loss $ (809,721) $ (64,352) $ 36,409 $ (837,664)
Net increase in assets from operations $ 3,547,920 $ 390,311 $419,738 $ 7,246 $ 4,365,215
</TABLE>
<PAGE>
PRO FORMA COMBINING
STATEMENT OF ASSETS AND LIABILITIES
March 31,1999
<TABLE>
National Limited Michigan Limited Connecticut Limited Pro Forma Pro-Forma
Maturity Municipals Maturity Municipals Maturity Municipals Adjustments Combined
Portfolio Portfolio Portfolio (Unaudited) (Unaudited)
------------------- ------------------- ------------------- ----------- -------------------
<S> <C> <C> <C> <C>
ASSETS
Investments, at cost $ 84,822,504 $ 9,640,542 $ 8,361,603 $ 102,824,649
-----------------------------------------------------------------------------------------------
Investments, at value $ 89,269,469 $ 10,416,532 $ 8,857,555 $ 108,543,556
Other assets less liabilities $ 696,925 $ 199,198 $ 240,358 $ 1,136,481
-----------------------------------------------------------------------------------------------
Net Assets $ 89,966,394 $ 10,615,730 $ 9,097,913 $ 109,680,037
-----------------------------------------------------------------------------------------------
SOURCES OF NET ASSETS
Net proceeds from capital
contributions and withdrawals $ 89,519,429 $ 9,839,740 $ 8,601,961 $ 103,961,130
Net unrealized appreciation
(computed on the basis of
identified cost) $ 4,446,965 $ 775,990 $ 495,952 $ 5,718,907
----------------------------------------------------------------------------------------------
Total $ 89,966,394 $ 10,615,730 $ 9,097,913 $ 109,680,037
----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
PRO FORMA COMBINING
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED
March 31,1999
<TABLE>
Actual Actual Actual
National Michigan Connecticut
Limited Limited Limited
Maturity Maturity Maturity Pro Forma Pro Forma
Municipals Municipals Municipals Adjustments Combined
Portfolio Portfolio Portfolio (Unaudited) (Unaudited)
---------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Interest $ 5,373,501 $ 609,481 $507,449 $ --- $ 6,589,337
------------------------------------------------------------------------------
EXPENSES
Investment adviser fee $ 433,524 $ 51,653 $ 43,610 $ 2,804 Note 3a $ 531,591
Trustees fees and expenses $ 8,080 $ 185 $ 186 $ (371) Note 3b $ 8,080
Custodian fee $ 59,215 $ 15,567 $ 12,787 $ (18,085) Note 3c $ 69,484
Legal and accounting services $ 24,619 $ 17,362 $ 17,262 $ (29,700) Note 3d $ 29,543
Amortization organization expense $ 219 $ --- $ --- $ --- $ 219
Miscellaneous $ 29,654 $ 6,029 $ 5,026 $ (5,124) Note 3d $ 35,585
------------------------------------------------------------------------------
TOTAL EXPENSES $ 555,311 $ 90,796 $ 78,871 $ (50,476) $ 674,502
Deduct -
Reduction of investment adviser fee $ --- $ --- $ 21,626 $ (21,626) $ ---
Reduction of custodian fee $ 11,956 $ 3,575 $ 2,917 --- $ 18,448
------------------------------------------------------------------------------
TOTAL EXPENSE REDUCTIONS $ 11,956 $ 3,575 $ 24,543 $ (21,626) Note 3e $ 18,448
NET EXPENSES $ 543,355 $ 87,221 $ 54,328 $ (28,850)
$ 656,054
NET INVESTMENT INCOME $ 4,830,146 $ 522,260 $453,121 $ 28,850 $5,933,283
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) -
Investment transactions (identified cost basis) $ 650,727 $ 169,914 $ 49,350 $ 869,991
Financial futures contracts $ (278,032) $ (53,859) $(29,661) $ (361,552)
------------------------------------------------------------------------------
NET REALIZED GAIN $ 372,695 $ 116,055 $ 19,689 $ --- $ 508,439
------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation)
Investments $(1,202,223.00) $(183,643) $ 13,577 $(1,372,289)
Financial futures contracts $ 19,807.00 $ 2,436 $ 3,630 $ 25,873
------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) $(1,182,416.00) $(181,207) $ 17,207 $ --- $(1,346,416)
NET REALIZED AND UNREALIZED LOSS $ (809,721) $ (65,152) $ 36,896 $ (837,977)
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 4,020,425 $ 457,108 $490,017 $ 28,850 $ 4,996,400
</TABLE>
<PAGE>
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPALS FUND
PROPOSED MERGER WITH
EATON VANCE CONNECTICUT LIMITED MATURITY MUNICIPALS FUND
AND
EATON VANCE MICHIGAN LIMITED MATURITY MUNICIPALS FUND
NOTES TO PRO FORMA COMBINING FINANCIAL STATEMENTS (UNAUDITED)
1. Basis of Combination.
Subject to approval of the proposed Agreement and Plan of Reorganization (
"the Plan " ) by the shareholders of the Eaton Vance Connecticut Limited
Maturity Municipals Fund ( the "Connecticut Limited Fund ") and the Eaton Vance
Michigan Limited Maturity Municipals Fund ( the " Michigan Limited Fund " ) and
other conditions specified in the agreement and plan of reorganization, the
Eaton Vance National Limited Maturity Fund ( the " National Limited Fund " )
will acquire substantially all of the assets of the funds in exchange for shares
of the National Limited Fund. This merger of the entities will be accounted for
by the method of accounting for tax free mergers of investment companies. The
pro forma combining Statement of Assets and Liabilities reflects the financial
position of the National Limited Fund, the Connecticut Limited Fund and the
Michigan Limited Fund at March 31,1999 as though the merger occurred as of that
date. The pro forma combining Statement of Operations reflects the results of
operations of the National Limited Fund, the Connecticut Limited fund and the
Michigan Limited Fund for the year ended March 31,1999 as though the merger
occurred at the beginning of the year presented. Both the Statement of Assets
and Liabilities and the Statement of Operations are presented for the
information of the reader, and may not necessarily be representative of what the
combined statements would have been had the acquisition occurred on March
31,1999.
2. Capital/Shares
The number of additional shares was calculated by dividing the net assets
of each of the classes of the Connecticut Limited Fund and the Michigan Limited
Fund at March 31,1999 by the corresponding net asset value per share of the
National Limited Fund classes at March 31,1999. The pro forma combined number of
shares outstanding for Class A of 8,613,330 consists of 716,326 and 932,913
shares issuable to Connecticut Limited Fund and Michigan Limited Fund
respectively, in the merger and 6,964,091 shares of the National Limited Fund
outstanding at March 31,1999. The pro forma combined number of shares
outstanding for Class B of 716,345 consists of 134,417 and 62,312 shares
issuable to Connecticut Limited Fund and Michigan Limited Fund respectively, in
the merger and 519,616 shares of the National Limited Fund outstanding at March
31,1999.
3. Pro Forma Combining Operating Expenses.
Certain expenses have been adjusted in the pro forma Statement of
Operations to reflect the expenses of the combined entity more closely.
Pro forma operating expenses include the actual expenses of the National
Limited Fund and the Connecticut and Michigan Limited Funds adjusted for certain
items which reflect managements best estimates.
<PAGE>
a) based on effective rate of survivor ( 0.48%).
b) No additional expense for Trustees as a result of the merger.
c) Based on custodian fee of survivor and adjusted for additional asset charges
due to increased assets of acquired funds.
d) Based on actual costs of survivor plus 20% .
e) No reduction of Adviser fee after merger.
f) See Pro Forma Statement of Operations for the Portfolios.
g) No additional expense for registration as a result of the merger.
4. Merger Costs.
Merger costs represent the estimated expense of the National Limited Fund
and both the Connecticut Limited and Michigan Limited funds in carrying out
their obligations under the Plan of Reorganization. They consists of managements
estimate of legal fees, auditing fees and printing and postage costs.
<PAGE>
Pro Forma Investment Portfolios as of March 31, 1999 (Unaudited)
<TABLE>
Michigan Limited National Limited Connecticut Limited Combined
Principal Amount Principal Amount Principal Amount Principal Amount
---------------- ---------------- ------------------- ----------------
<S> <C> <C> <C>
Tax - Exempt $500,000 $500,000
Investments $1,000,000 $1,000,000
$495,000 $495,000
$500,000 $500,000
$250,000 $250,000
$1,000,000 $500,000 $1,500,000
$500,000 $500,000
$300,000 $300,000
$500,000 $500,000
$500,000 $500,000
$395,000 $395,000
$500,000 $500,000 $1,000,000
$100,000 $100,000
$100,000 $100,000
$225,000 $225,000
$150,000 $950,000 $1,100,000
$100,000 $100,000
$225,000 $1,000,000 $1,225,000
$150,000 $150,000
$250,000 $250,000
$2,000,000 $2,000,000
$300,000 $300,000
$770,000 $770,000
$500,000 $500,000
$350,000 $350,000
$500,000 $500,000
$620,000 $620,000
$450,000 $450,000
$500,000 $500,000
$500,000 $500,000
$1,000,000 $1,000,000
$620,000 $620,000
$470,000 $470,000
$500,000 $500,000
$500,000 $500,000
$465,000 $465,000
$500,000 $500,000
$500,000 $500,000
$785,000 $785,000
$1,105,000 $1,105,000
$3,500,000 $3,500,000
$650,000 $650,000
$965,000 $965,000
$1,900,000 $1,900,000
$4,000,000 $4,000,000
$680,000 $680,000
$985,000 $985,000
$750,000 $750,000
$250,000 $250,000
$855,000 $855,000
$1,005,000 $1,005,000
$1,145,000 $1,145,000
$2,000,000 $2,000,000
$690,000 $690,000
$3,500,000 $3,500,000
$945,000 $945,000
$455,000 $455,000
$1,107,000 $1,107,000
$1,455,000 $1,455,000
<PAGE>
Michigan Limited National Limited Connecticut Limited Combined
Principal Amount Principal Amount Principal Amount Principal Amount
---------------- ---------------- ------------------- ----------------
Tax - Exempt $3,000,000 $3,000,000
Investments $1,000,000 $1,000,000
$500,000 $500,000
$750,000 $750,000
$500,000 $500,000
$305,000 $305,000
$1,500,000 $1,500,000
$670,000 $670,000
$1,070,000 $1,070,000
$1,410,000 $1,410,000
$500,000 $500,000
$1,195,000 $1,195,000
$900,000 $900,000
$1,755,000 $1,755,000
$2,500,000 $2,500,000
$2,000,000 $2,000,000
$4,185,000 $4,185,000
$1,000,000 $1,000,000
$500,000 $500,000
$1,900,000 $1,900,000
$1,000,000 $1,000,000
$1,000,000 $1,000,000
$1,000,000 $1,000,000
$595,000 $595,000
$1,000,000 $1,000,000
$900,000 $900,000
$500,000 $500,000
$500,000 $500,000
$500,000 $500,000
$750,000 $750,000
$2,000,000 $2,000,000
$250,000 $250,000
$500,000 $500,000
$1,075,000 $1,075,000
$1,250,000 $1,250,000
$1,000,000 $1,000,000
$475,000 $475,000
$1,000,000 $1,000,000
$750,000 $750,000
$500,000 $500,000
$500,000 $500,000
$2,000,000 $2,000,000
$1,800,000 $1,800,000
$500,000 $500,000
$2,000,000 $2,000,000
$260,000 $260,000
$500,000 $500,000
$1,700,000 $1,700,000
$1,000,000 $1,000,000
$200,000 $200,000
$140,000 $140,000
$250,000 $250,000
$400,000 $400,000
$510,000 $510,000
$300,000 $300,000
$250,000 $250,000
$200,000 $200,000
$190,000 $190,000
$150,000 $150,000
$100,000 $100,000
$115,000 $115,000
$400,000 $400,000
$125,000 $125,000
$100,000 $100,000
$625,000 $625,000
$250,000 $250,000
$150,000 $150,000
$200,000 $200,000
$240,000 $240,000
$250,000 $250,000
$250,000 $250,000
$400,000 $400,000
$500,000 $500,000
$150,000 $150,000
$300,000 $300,000
$370,000 $370,000
$250,000 $250,000
$150,000 $150,000
$600,000 $600,000
$250,000 $250,000
$150,000 $150,000
----------- ----------- ---------- ------------
Total Principal $11,660,000 $92,747,000 $8,515,000 $112,922,000
</TABLE>
<PAGE>
Pro Forma Investment Portfolios as of March 31, 1999 (Unaudited) - continued
<TABLE>
Michigan Limited National Limited Connecticut Limited Combined
Security Name Market Value Market Value Market Value Market Value
- ------------- ---------------- ---------------- ------------------- ------------
<S> <C> <C> <C> <C>
Kent Hosp Fin Auth Mich Rev 5.25% 1/15/99 $523,540 $523,540
Battle Creek Mich Downtown Dev 6.65% 5/1/02 $1,072,420 $1,072,420
Detroit Mich 6.4% 4/1/05 $546,435 $546,435
Detroit Mich City Sch Dist 6.5% 5/1/10 $585,780 $585,780
Fowlerville Mich Cmnty Schs 4.5% 5/1/15 $242,880 $242,880
Grand Ledge Mich Pub Schs Dist 7.875% 5/1/11 $1,196,799 $598,400 $1,795,199
Hartland Mich Cons Sch Dist 5.125% 5/1/17 $504,440 $504,440
Kalamazoo Mich Economic Dev 6.125% 5/15/17 $314,739 $314,739
Michigan Mun Bd Auth Rev 7% 10/01/02 $553,790 $553,790
Michigan State Bldg Auth Rev 6.1% 10/01/01 $529,940 $529,940
Michigan St Hosp Fin Auth Rev 6.2% 1/1/06 $427,189 $427,189
Michigan St Hosp Fin Auth Rev 6.1% 10/1/07 $532,440 $532,440 $1,064,880
Michigan St Hosp Fin Auth 6% 10/1/05 $108,197 $108,197
Michigan St Hosp Fin Auth Rev 6.1% 10/1/06 $109,225 $109,225
Michigan St Hosp Fin Auth Rev 6.2% 10/1/07 $247,930 $247,930
Michigan St Strategic Fd Ltd 6.25% 8/1/12 $137,537 $871,065 $1,008,602
Parchment Mich School Dist 5% 5/1/25 $99,923 $99,923
Paw Paw Mich Pub Sch Dist 5% 5/1/21 $224,840 $999,290 $1,224,130
Pittsfield Twp Mich Econ 7.875 8/15/27 $157,526 $157,526
Portage Mich Pub Schs 4.5% 5/1/14 $241,095 $241,095
Detroit Mich Downtown Dev Auth 0% 7/1/21 $598,060 $598,060
Michigan St Bldg Auth Rev 0% 10/15/08 $195,864 $195,864
P Rico Comwlth Hwy Transn Auth 0% 7/1/16 $335,751 $335,751
Monroe Cnty Mich Pollutn Ctl 6.35% 12/1/04 $552,640 $552,640
Pouerto Rico Ports Auth Rev 6.25% 6/1/26 $377,552 $377,552
Cuyahoga Cnty Ohio Hosp Rev 5.25% 1/1/12 $516,050 $516,050
Golden West Schools Fing Auth 5.8% 2/1/16 $687,568 $687,568
Illinois Health Facs Auth Rev 7.375% 1/1/23 $473,882 $473,882
Kansa City Mo Indl Dev 11/15/17 $483,130 $483,130
Kimball Neb Economic Dev Rev 10.75% 9/1/26 $543,975 $543,975
New Jersey Eda 8% 10/1/07 $1,096,450 $1,096,450
Los Angfeles Calif Regl Arpts 6.125% 5/15/00 $620,223 $620,223
Eastern CT Resource Recovery Auth 5.5% 1/1/20 $465,084 $465,084
NH HEFA 5.5% 1/1/18 $500,155 $500,155
Peru Ill Indl Dev Rev 5.25% 11/1/03 $497,665 $497,665
San Gorgonio Mem Health Care 5.6% 5/1/11 $460,755 $460,755
NH HEFA 5.45% 5/1/08 $505,865 $505,865
Arkansas Dev Fin Auth 5.95% 12/1/28 $496,505 $496,505
Albuquerque NM Retirement 6.6% 12/15/28 $780,847 $780,847
Arizona Health Facs Auth Rev 7.625% 1/1/06 $1,142,669 $1,142,669
California Statewide Cmntys 5.9% 4/1/09 $3,785,704 $3,785,704
Citrus Cnty Fla Indl Dev Auth 5% 4/1/03 $648,603 $648,603
Clovis NM Indl Rev 7.75% 4/1/19 $1,054,977 $1,054,977
Colorado Health Facs Auth Rev 5% 9/15/03 $1,934,466 $1,934,466
Detroit Mich 6.5% 4/1/02 $4,268,399 $4,268,399
Fairfield Ohio Economic Dev 8.5% 1/1/03 $723,901 $723,901
Florence Ky Hsg Facs Rev 7.25% 5/1/07 $1,103,318 $1,103,318
Forsyth Cnty GA Hosp Auth Rev DTD 10/1/08 $747,855 $747,855
Frederick Cnty MD Spl Oblig 6.625% 7/1/25 $254,525 $254,525
Illinois Dev Fin Auth Sec 6.4% 2/1/03 $881,787 $881,787
Illinois Dev Fin Auth Mtn Twr 6.35% 7/1/10 $1,049,019 $1,049,019
Illinois Dev Fin Auth Rm Mead 6.65% 2/1/06 $1,197,178 $1,197,178
Illinois Health Facs Auth 6.125% 8/15/10 $2,068,980 $2,068,980
Austin TX Cargoport Dev 7.5% 10/1/07 $727,481 $727,481
Maricopa Cnty Ariz Indl Dev 6.45% 1/1/17 $3,973,024 $3,973,024
Maricopa Cnty Ariz Indl Dev 7.875% 1/1/11 $1,133,253 $1,133,253
Austin TX Cargoport Dev 8.3% 10/1/21 $501,155 $501,155
Massachusetts St Health & Edl 7.125% 7/15/02 $1,172,378 $1,172,378
Mass St Indl Fin Agy Hlth Care 7.6% 11/1/05 $1,543,886 $1,543,886
<PAGE>
Michigan Limited National Limited Connecticut Limited Combined
Security Name Market Value Market Value Market Value Market Value
- ------------- ---------------- ---------------- ------------------- ------------
Massachusetts St Tpk Auth 5% 1/1/20 $3,036,629 $3,036,629
New Hampshire Hgr Edl & Hlth 7.2% 6/1/12 $1,085,830 $1,085,830
Chicago IL O'Hare Int Airport 5.35% 9/1/16 $498,015 $498,015
NYC GO 0% 8/1/07 $518,033 $518,033
North Miami Fla Health Care 6.75% 1/01/33 $490,865 $490,865
Okaloosa Cnty Fla Retirement 5.25% 2/1/04 $305,107 $305,107
Puerto Rico Comnwlth Aqudt Swr 5% 7/1/15 $1,507,050 $1,507,050
Richardson Tex Hosp Auth Hosp 6.5% 12/1/12 $752,276 $752,276
Richardson Tex Hosp Auth Hosp 6.5% 12/1/12 $1,159,035 $1,159,035
St Tammany La Pub Tr Fing Auth 8.75% 11/15/05 $1,648,135 $1,648,135
San Juan Pueblo Dev Auth N Mex 7% 10/15/06 $491,990 $491,990
Santa Fe NM - Crow Hobbs 8.25% 9/1/05 $1,238,761 $1,238,761
Iowa Finance Authority 6.375% 12/1/13 $917,982 $917,982
Youngstown Ohio City Sch Dist 6.4% 7/1/00 $1,790,188 $1,790,188
E-470 Pub Hwy Auth Colo Rev 0% 9/1/17 $981,800 $981,800
El Paso Cnty Tx Hsp Dirt Mbia 8/18/06 $1,448,960 $1,448,960
Illinois Dev Fin Auth 0% 7/15/25 $932,125 $932,125
Saint Charles Parish LA 5.10% 1/1/12 $996,770 $996,770
Mashantucket CT 5.55% 9/1/08 $523,490 $523,490
Az Educ Loan Mrkt Corp Jr Sub 6.25% 6/1/06 $2,079,702 $2,079,702
Arizona Student Loans 7.625% 5/1/10 $1,096,790 $1,096,790
Arkansas St Student LN Auth 6.25% 6/1/10 $1,039,340 $1,039,340
Clark County Nev Dev Rev 5.9% 10/1/30 $1,021,420 $1,021,420
Tax Revenue Exempt Sec Trst 6.0% 12/1/36 $595,900 $595,900
Columbus NC Ind Facs Pcr-Int'l 5.8% 12/1/16 $1,042,740 $1,042,740
Eagle Cnty Colo Air Term Corp 6.75 5/1/06 $1,162,282 $1,162,282
George L. Smith 6% 7/1/06 $533,260 $533,260
Gulf Coast Wate Disp Auth 6.875% 12/1/28 $542,675 $542,675
Jones Cnty Miss Solid Waste 5.8% 10/1/21 $512,645 $512,645
Ohio St 0% 8/1/08 $499,628 $499,628
Denver Co City Airport 7% 11/15/99 $2,042,580 $2,042,580
Mass St Indl Fin Agy 6.75% 4/1/30 $238,493 $238,493
Missouri St Dev Fin Brd 3/15/29 $498,855 $498,855
New Jersey Economic Dev Auth 6.1% 12/1/05 $1,143,531 $1,143,531
NJ Economic Dev Auth 7.875% 6/1/19 $1,349,663 $1,349,663
NJ Economic Dev Senior Mort 7.9 3/1/27 $1,120,630 $1,120,630
Vermont Ida 8% 4/1/99 $475,000 $475,000
Northwest Ark Regl Auth Arpt 7.625% 2/1/27 $1,150,780 $1,150,780
Ohio St Solid Waste Rev 9% 6/1/21 $803,175 $803,175
Palm Beach Cnty Fl Solid Waste 6.85% 2/15/21 $385,000 $385,000
Palm Beach Cnty Fl Solid Waste 6.95% 1/1/22 $380,000 $380,000
Pennsylvania Econ Dev Fing 7.05% 12/1/10 $2,195,319 $2,195,319
Pennsylvania Economic Dev Fing 6.75% 1/1/07 $1,938,456 $1,938,456
Robbins Ill Res Recovery 8.375% 10/15/10 $270,000 $270,000
Wisconsin Hsg & Economic Dev A 6.45% 9/1/27 $2,148,720 $2,148,720
Memphis Shelby County TN 6.12% 12/1/16 $264,350 $264,350
Southern Ill Univ Revenue 4/1/17 $198,455 $198,455
University Ill Univ Revs 4/1/15 $755,922 $755,922
University Ill Univ Rev 4/1/16 $419,210 $419,210
CT HEFA 6.0% 7/1/13 $207,832 $207,832
CT HEFA 6.0% 7/1/08 $157,979 $157,979
Puerto Rico Electric Power Auth 4.75% 7/1/24 $238,488 $238,488
CT Hefa 6.9% 7/1/14 $411,608 $411,608
CT HEFA 7.5% 7/1/06 $559,724 $559,724
CT HEFA 6% 7/1/13 $329,712 $329,712
South Central CT Regional 6.5% 8/1/07 $271,273 $271,273
Avon 5% 1/15/12 $210,326 $210,326
Connecticut State 0% 11/15/10 $111,996 $111,996
Connecticut State 5.125% 8/15/11 $157,740 $157,740
Danbury 5.0% 8/1/17 $101,080 $101,080
Puerto Rico 0% 7/1/08 $76,403 $76,403
Puerto Rico Aq and Sewer Auth 5% 7/1/19 $393,712 $393,712
CT HEFA (Griffin Hosp) 6% 7/1/13 $128,788 $128,788
Connecticut HFA MRB 7.4% 11/15/99 $100,930 $100,930
Connecticut Dev Authority 6.375% 7/1/04 $634,099 $634,099
Puerto Rico Port Authority 6.25% 6/1/26 $269,680 $269,680
Saprague Environmental Improvement 5.7% 10/1/21 $153,029 $153,029
CT HEFA (Choate Rosemary Hall) 5% 7/1/14 $203,468 $203,468
University of CT FGIC 5% 2/1/15 $243,149 $243,149
CT Municipal Electric Auth 6% 1/1/07 $279,750 $279,750
Bradford FGIC 5.4% 2/15/14 $261,700 $261,700
Bridgeport AMBAC 6% 9/1/06 $448,299 $448,299
Old Saybrook AMBAC 4.1% 8/15/01 $507,724 $507,724
CT Hefa (Greenwich Hosp) 5.75% 7/1/06 $165,228 $165,228
Ct Hefa (Middlesex Health) 5.125% 7/1/17 $301,164 $301,164
CT Hefa (St Raphael Hosp) 5.1% 7/1/07 $392,596 $392,596
CT Hefa Stamford Hosp 6.5% 7/1/06 $270,558 $270,558
Woodstock Special Obligation Bds 7% 3/1/07 $159,290 $159,290
CT State Airport (Bradley) 7.4% 10/1/04 $700,373 $700,373
Eastern CT Resources Recov Auth 5% 1/1/03 $254,253 $254,253
CT State Clean Water Fund 4.875% 5/1/09 $155,604 $155,604
----------- ----------- ---------- ------------
Total Market Value $10,416,532 $89,269,469 $8,857,555 $108,543,556
Total Identified Cost $9,640,542 $84,822,504 $8,361,603 $102,824,649
------------
</TABLE>
<PAGE>
Total Returns
Merger of National Limited Maturity Municipals Fund with both Eaton Vance
Connecticut Limited Maturity Municipals Fund and Eaton Vance Michigan Limited
Maturity Municipals Fund
Class A Class B Class C
3.88% 3.34% 3.24%
Merger of National Limited Maturity Municipals Fund with Eaton Vance Connecticut
Limited Maturity Municipals Fund
Class A Class B Class C
3.92% 3.37% 3.24%
Merger of National Limited Maturity Municipals Fund with Eaton Vance Michigan
Limited Maturity Municipals Fund
Class A Class B Class C
3.85% 3.27% 3.24%
<PAGE>
Expense Ratios
Merger of National Limited Maturity Municipals Fund with both Eaton Vance
Connecticut Limited Maturity Municipals Fund and Eaton Vance Michigan
Limited Maturity Municipals Fund
Annual Fund Operating Expense Class A Class B Class C
Management Fees 0.48% 0.48% 0.48%
Distribution & Service (12b-1 ) 0% 0.89% 0.97%
Other Expenses 0.53% 0.38% 0.38%
Total Annual Operating Expense 1.01% 1.75% 1.83%
* Other Expenses for Class A includes a service fee of 0.15%.
Merger of National Limited Maturity Municipals Fund with Eaton Vance
Connecticut Limited Maturity Municipals Fund
Annual Fund Operating Expense Class A Class B Class C
Management Fees 0.48% 0.48% 0.48%
Distribution & Service (12b-1 ) 0% 0.89% 0.97%
Other Expenses 0.53% 0.38% 0.38%
Total Annual Operating Expense 1.01% 1.75% 1.83%
* Other Expenses for Class A includes a service fee of 0.15%.
Merger of National Limited Maturity Municipals Fund with Eaton Vance
Michigan Limited Maturity Municipals Fund
Annual Fund Operating Expense Class A Class B Class C
Management Fees 0.48% 0.48% 0.48%
Distribution & Service (12b-1 ) 0% 0.89% 0.97%
Other Expenses 0.53% 0.38% 0.38%
Total Annual Operating Expense 1.01% 1.75% 1.83%
* Other Expenses for Class A includes a service fee of 0.15%.
NOTE: Due to the relatively small asset size of the funds to be acquired
there is no change in the expense ratios if either of the to be
acquired funds do not merge.
<PAGE>
PART C.
OTHER INFORMATION
ITEM 15. INDEMNIFICATION
No change from the information set forth in Item 25 of Form N-1A filed as
Post-Effective Amendment No. 42 to the Registration Statement under the
Securities Act of 1933 (File No. 33-1121) and Amendment No. 45 to the
Registration Statement under the Investment Company Act of 1940 (File No.
811-4443) (Accession No. 0000950156-99-000469) (the "Registrant's N-1A"), which
information is incorporated herewith by reference.
Registrant's Trustees and officers are insured under a standard mutual fund
errors and omissions insurance policy covering insured by reason of negligent
errors and omissions committed in their capacities as such.
ITEM 16. EXHIBITS
(1) (a) Amended and Restated Declaration of Trust of Eaton Vance Investment
Trust dated January 11, 1993 filed as Exhibit (1)(a) to Post-Effective
Amendment No. 34 to Registrant's N-1A and incorporated herein by
reference.
(b) Amendment to Declaration of Trust dated June 23, 1997 filed as Exhibit
(1)(b) to Post-Effective Amendment No. 41 to Registrant's N-1A and
incorporated herein by reference.
(c) Establishment and Designation of Classes of Shares of Beneficial
Interest, without Par Value, dated June 26, 1996 filed as Exhibit
(a)(3) to Post-Effective Amendment No. 41 to Registrant's N-1A and
incorporated herein by reference.
(2) (a) By-Laws as amended March 30, 1992 filed as Exhibit (2)(a) to
Post-Effective Amendment No. 34 to Registrant's N-1A and incorporated
herein by reference.
(b) Amendment to By-Laws dated December 13, 1993 filed as Exhibit (2)(b)
to Post-Effective Amendment No. 34 to Registrant's N-1A and
incorporated herein by reference.
(3) Not applicable.
(4) (a) Agreement and Plan of Reorganization by and among Eaton Vance
Investment Trust, on behalf of its series Eaton Vance Connecticut
Limited Maturity Municipals Fund and Eaton Vance National Limited
Maturity Municipals Fund filed herewith.
(b) Agreement and Plan of Reorganization by and among Eaton Vance
Investment Trust, on behalf of its series Eaton Vance Michigan Limited
Maturity Municipals Fund and Eaton Vance National Limited Maturity
Municipals Fund filed herewith.
(5) Not applicable.
(6) Not applicable.
C-1
<PAGE>
(7) (a) Distribution Agreement between Eaton Vance Investment Trust and Eaton
Vance Distributors, Inc., dated June 23, 1997 with attached Schedule A
filed as Exhibit (6)(a) to Post-Effective Amendment No. 39 to
Registrant's N-1A and incorporated herein by reference.
(b) Selling Group Agreement between Eaton Vance Distributors, Inc. and
Authorized Dealers filed as Exhibit (6)(b) to the Registration
Statement of Eaton Vance Growth Trust (File Nos. 2-22019, 811-1241)
Post-Effective Amendment No. 61 and incorporated herein by reference.
(8) The Securities and Exchange Commission has granted the Registrant an
exemptive order that permits the Registrant to enter into deferred
compensation arrangements with its Independent Trustees. See in the
Matter of Capital Exchange Fund, Inc., Release No. IC-20671 (November
1, 1994).
(9) (a) Custodian Agreement with Investors Bank & Trust Company dated April
15, 1994 filed as Exhibit (8) to Post-Effective Amendment No. 34 to
Registrant's N-1A and incorporated herein by reference.
(b) Amendment to Custodian Agreement with Investors Bank & Trust Company
dated October 23, 1995 filed as exhibit (8)(b) to Post-Effective
Amendment No. 35 to Registrant's N-1A and incorporated herein by
reference.
(c) Amendment to Master Custodian Agreement with Investors Bank & Trust
Company dated December 21, 1998 filed as Exhibit (g)(3) to the
Registration Statement of Eaton Vance Municipals Trust (File Nos.
33-572, 811-4409) (Accession No. 0000950156-99-000050) and
incorporated herein by reference.
(10) (a) Eaton Vance Investment Trust Class A Service Plan adopted June 23,
1997 with attached Schedule A effective June 23, 1997 filed as Exhibit
(15)(a) to Post-Effective Amendment No. 39 to Registrant's N-1A and
incorporated herein by reference.
(b) Eaton Vance Investment Trust Class B Distribution Plan adopted June
23, 1997 with attached Schedule A effective June 23, 1997 filed as
Exhibit (15)(b) to Post-Effective Amendment No. 39 to Registrant's
N-1A and incorporated herein by reference.
(c) Eaton Vance Investment Trust Class C Distribution Plan adopted June
23, 1997 with attached Schedule A effective June 23, 1997 filed as
Exhibit (15)(c) to Post-Effective Amendment No. 39 to Registrant's
N-1A and incorporated herein by reference.
(d) Multiple Class Plan for Eaton Vance Funds dated June 23, 1997 filed as
Exhibit (18) to Post-Effective Amendment No. 39 to Registrant's N-1A
and incorporated herein by reference.
(11) Opinion and Consent of Counsel as to legality of securities being
issued filed herewith.
(12) Form of Tax Opinion of Hale and Dorr LLP filed herewith.
C-2
<PAGE>
(13) (a) Amended Administrative Services Agreement between Eaton Vance
Investment Trust (on behalf of certain of its series) and Eaton Vance
Management dated June 19, 1995, with attached schedules (including
Amended Schedule A) filed as Exhibit (9) to Post-Effective Amendment
No. 34 to Registrant's N-1A and incorporated herein by reference.
(a)(1) Amendment to Schedule A dated June 23, 1997 to the Amended
Administrative Services Agreement dated June 19, 1995 filed as Exhibit
(9)(a)(1) to Post-Effective Amendment No. 39 to Registrant's N-1A and
incorporated herein by reference.
(b) Transfer Agency Agreement dated January 1, 1998 filed as Exhibit
(k)(b) to the Registration Statement on Form N-2 of Eaton Vance
Advisers Senior Floating-Rate Fund (File Nos. 333-46853, 811-08671)
(Accession No. 0000950156-98-000172) and incorporated herein by
reference.
(14) (a) Consent of Deloitte & Touche LLP regarding financial statements of
Registrant on behalf of Eaton Vance Connecticut Limited Maturity
Municipals Funds filed herewith.
(b) Consent of Deloitte & Touche LLP regarding financial statements of
Registrant on behalf of Eaton Vance Michigan Limited Maturity
Municipals Funds filed herewith.
(c) Consent of Deloitte & Touche LLP regarding financial statements of
Registrant on behalf of Eaton Vance National Limited Maturity
Municipals Fund filed herewith.
(15) Not Applicable.
(16) Power of Attorney for the Registrant dated August 16, 1999 filed
herewith.
(17) Rule 24f-2 Election of Registrant filed herewith.
ITEM 17. UNDERTAKINGS.
(1) The undersigned Registrant agrees that prior to any public reoffering
of the securities registered through the use of a prospectus which is a part of
this Registration Statement by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c) under the Securities Act of 1933
(the "1933 Act"), the reoffering prospectus will contain the information called
for by the applicable registration form for reofferings by persons who may be
deemed underwriters, in addition to the information called for by the other
items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as a part of an amendment to the
Registration Statement and will not be used until the amendment is effective,
and that, in determining any liability under the 1933 Act, each post-effective
amendment shall be deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering of them.
C-3
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement has
been signed on behalf of the Registrant in the City of Boston, and the
Commonwealth of Massachusetts on the 23rd day of August, 1999.
EATON VANCE INVESTMENT TRUST
/S/ THOMAS J. FETTER
--------------------------------------
Thomas J. Fetter, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
Signatures Title Date
- ---------- ----- ----
/s/ Thomas J. Fetter President and Principal August 23, 1999
- -------------------------- Executive Officer
Thomas J. Fetter
/s/ James L. O'Connor Treasurer and Principal August 23, 1999
- -------------------------- Financial and Accounting
James L. O'Connor Officer
Jessica M. Bibliowicz* Trustee August 23, 1999
- --------------------------
Jessica M. Bibliowicz
Donald R. Dwight* Trustee August 23, 1999
- ---------------------------
Donald R. Dwight
/s/ James B. Hawkes Trustee August 23, 1999
- ---------------------------
James B. Hawkes
Samuel L. Hayes, III* Trustee August 23, 1999
- ---------------------------
Samuel L. Hayes, III
Norton H. Reamer* Trustee August 23, 1999
- ---------------------------
Norton H. Reamer
Lynn A. Stout* Trustee August 23, 1999
- ---------------------------
Lynn A. Stout
Jack L. Treynor* Trustee August 23, 1999
- ---------------------------
Jack L. Treynor
*By: /s/ Eric G. Woodbury
----------------------
Eric G. Woodbury
As Attorney-in-fact
C-4
<PAGE>
EXHIBIT INDEX
The following exhibits are filed as a part of this Registration Statement:
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
(4) (a) Agreement and Plan of Reorganization for Eaton Vance Connecticut
Limited Maturity Municipals Fund
(b) Agreement and Plan of Reorganization for Eaton Vance Michigan Limited
Maturity Municipals Fund
(11) Opinion and Consent of Counsel as to legality of securities being
issued and consent
(12) Form of Tax Opinion of Hale and Dorr LLP
(14) (a) Consent of Deloitte & Touche LLP regarding financial statements of
Registrant on behalf of Eaton Vance Connecticut Limited Maturity
Municipals Fund
(b) Consent of Deloitte & Touche LLP regarding financial statements of
Registrant on behalf of Eaton Vance Michigan Limited Maturity
Municipals Fund
(c) Consent of Deloitte & Touche LLP regarding financial statements of
Registrant on behalf of Eaton Vance National Limited Maturity
Municipals Fund
(16) Power of Attorney for the Registrant dated August 16, 1999
(17) Rule 24f-2 Election of Registrant
C-5
<PAGE>
EXHIBIT (4)(a)
EXHIBIT A
AGREEMENT
AND
PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made as of this
16th day of August, 1999, by and among Eaton Vance Investment Trust, a
Massachusetts business trust ("Investment Trust") on behalf of its series Eaton
Vance Connecticut Limited Maturity Municipals Fund ("State Fund") and Eaton
Vance National Limited Maturity Municipals Fund ("National Fund").
WITNESSETH
WHEREAS, Investment Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act") as an open-end management investment company
authorized to issue an unlimited number of shares of beneficial interest without
par value in one or more series (such as National Fund), and the Trustees of
Investment Trust have divided the shares of State and National Fund into
multiple classes, including Class A and Class B shares ("State Fund Shares" and
"National Fund Shares");
WHEREAS, State Fund currently invests all of its assets in Connecticut
Limited Maturity Municipals Portfolio (the "Limited Portfolio"), a New York
trust registered under the 1940 Act as an open-end management investment
company;
WHEREAS, the National Fund currently invests all of its assets in National
Limited Maturity Municipals Portfolio (the "National Portfolio"), a New York
trust registered under the 1940 Act as an open-end management investment
company;
WHEREAS, Boston Management and Research, a wholly owned subsidiary of Eaton
Vance Management, serves as investment adviser to the Portfolios; and
WHEREAS, Investment Trust desires to provide for the reorganization of
State Fund through the acquisition by National Fund of substantially all of the
assets of State Fund in exchange for National Fund Shares in the manner set
forth herein;
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto agree as follows:
1. DEFINITIONS
1.1 The term "1933 Act" shall mean the Securities Act of 1933, as amended.
1.2 The term "1934 Act" shall mean the Securities Exchange Act of 1934,
as amended.
1.3 The term "Agreement" shall mean this Agreement and Plan of
Reorganization.
1.4 The term "Assumed Liabilities" shall mean all liabilities,
expenses, costs, charges and receivables of State Fund as of
the Close of Trading on the New York Stock Exchange on the
Valuation Date.
<PAGE>
1.5 The term "Business Day" shall mean any day that is not a Saturday or
Sunday and that the New York Stock Exchange is open.
1.6 The term "Close of Trading on the NYSE" shall mean the close of
regular trading, which is usually 4:00 p.m. Eastern time.
1.7 The term "Closing" shall mean the closing of the transaction
contemplated by this Agreement.
1.8 The term "Closing Date" shall mean the first Monday following
receipt of all necessary regulatory approvals and the final
adjournment of the meeting of State Fund shareholders at which
this Agreement is considered, or such other date as may be
agreed by the parties on which the Closing is to take place.
1.9 The term "Commission" shall mean the Securities and Exchange
Commission.
1.10 The term "Custodian" shall mean Investors Bank & Trust Company.
1.11 The term "Delivery Date" shall mean the date contemplated by Section
3.3 of this Agreement.
1.12 The term "Investment Trust N-14" shall mean Investment Trust's
registration statement on Form N-14, as may be amended, that
describes the transactions contemplated by this Agreement and
the National Fund Shares.
1.13 The term "National Investment Trust N-1A" shall mean the
registration statement, as amended, on Form N-1A of Investment
Trust with respect to National Fund in effect on the date
hereof or on the Closing Date, as the context may require.
1.14 The term "NYSE" shall mean the New York Stock Exchange.
1.15 The term "Proxy Statement" shall mean the combined prospectus
and proxy statement furnished to the State Fund shareholders
in connection with this transaction.
1.16 The term "Securities List" shall mean the list of those
securities (and other assets) owned by Investment Trust, on
behalf of State Fund, on the Delivery Date.
1.17 The term "State Investment Trust N-1A" shall mean the
registration statement, as amended, on Form N-1A of Investment
Trust with respect to State Fund in effect on the date hereof
or on the Closing Date, as the context may require.
1.18 The term "Valuation Date" shall mean the Business Day preceding
the Closing Date.
2. TRANSFER AND EXCHANGE OF ASSETS
2.1 Reorganization of State Fund. At the Closing, Investment Trust
shall transfer all of the assets of State Fund received from
the State Portfolio, and assign all Assumed Liabilities to
National Fund, and National Fund shall acquire such assets and
shall assume such Assumed Liabilities upon delivery by
National Fund to State Fund on the Closing Date of Class A and
Class B National Fund Shares (including, if applicable,
-2-
<PAGE>
fractional shares) having an aggregate net asset value equal
to the value of the assets so transferred, assigned and
delivered, less the Assumed Liabilities, all determined and
adjusted as provided in Section 2.2. National Fund shall
transfer such assets and liabilities to National Portfolio on
the Closing Date.
2.2 Computation of Net Asset Value. The net asset value per share
of the National Fund Shares and the net value of the assets of
State Fund subject to this Agreement shall, in each case, be
determined as of the Close of Trading on the NYSE on the
Valuation Date, after the declaration and payment of any
dividend on that date. The net asset value of the National
Fund Shares shall be computed in the manner set forth in the
National Investment Trust Form N-1A.
In determining the value of the securities
transferred by State Fund to National Fund, each security
shall be priced in accordance with the policies and procedures
described in the National Investment Trust N-1A. All such
computations shall be subject to review, in the discretion of
Investment Trust's Treasurer, by Deloitte & Touche LLP,
Investment Trust auditors.
3. CLOSING DATE, VALUATION DATE AND DELIVERY
3.1 Closing Date. The Closing shall be at the offices of Eaton
Vance, The Eaton Vance Building, 255 State Street, Boston, MA
02109 immediately prior to the opening of Eaton Vance's
business on the Closing Date. All acts taking place at Closing
shall be deemed to take place simultaneously as of 9:00 a.m.
Eastern time on the Closing Date unless otherwise agreed in
writing by the parties.
3.2 Valuation Date. Pursuant to Section 2.2, the net value of the
assets of State Fund and the net asset value per share of
National Fund shall be determined as of the Close of Trading
on the NYSE on the Valuation Date, after the declaration and
payment of any dividend on that date. The stock transfer books
of Investment Trust with respect to State Fund will be
permanently closed, and sales of State Fund Shares shall be
suspended, as of the close of business of Investment Trust on
the Valuation Date. Redemption requests thereafter received by
Investment Trust with respect to State Fund shall be deemed to
be redemption requests for National Fund Shares to be
distributed to shareholders of State Fund under this Agreement
provided that the transactions contemplated by this Agreement
are consummated.
In the event that trading on the NYSE or on another
exchange or market on which securities held by State or
National Portfolio, shall be disrupted on the Valuation Date
so that, in the judgment of the Trust, accurate appraisal of
the net assets of State Fund to be transferred hereunder or
the assets of National Fund is impracticable, the Valuation
Date shall be postponed until the first Business Day after the
day on which trading on such exchange or in such market shall,
in the judgment of the Trust, have been resumed without
disruption. In such event, the Closing Date shall be postponed
until one Business Day after the Valuation Date.
3.3 Delivery of Securities and other Assets. After the close of
business on the Valuation Date, Investment Trust shall issue
instructions providing for the delivery of all securities held
on behalf of State Fund together with other non-cash assets of
State Fund to the Custodian to be held for the account of
National Fund, effective as of the Closing. National Fund may
inspect such securities at the offices of the Custodian prior
to the Valuation Date.
-3-
<PAGE>
Securities so delivered shall be in proper form for
transfer in such condition as to constitute a good delivery
thereof, in accordance with the custom of brokers, and shall
be accompanied by all necessary stock transfer stamps (or
other documentation evidencing payment of local taxes), if
any, or a check for the appropriate purchase price of such
stamps (or payment of such local tax). Unless otherwise
directed by Investment Trust in writing on or before the
Delivery Date, cash held by and to be delivered, on behalf of
State Fund, shall be delivered on the Closing Date and shall
be in the form of wire transfer in Federal Funds, payable to
the order of the account of National Fund at the Custodian. A
confirmation for the National Fund Shares registered in the
name of State Fund shall be delivered on the Closing Date.
4. STATE FUND DISTRIBUTIONS AND TERMINATION
As soon as reasonably practicable after the Closing Date,
Investment Trust shall pay or make provisions for the payment of all of
the debts and taxes of State Fund and distribute all remaining assets,
if any, to shareholders of State Fund, and State Fund shall thereafter
be terminated under Massachusetts law. The State Portfolio shall
liquidate and deregister under the 1940 Act.
At, or as soon as may be practicable following the Closing
Date, Investment Trust on behalf of State Fund shall instruct National
Fund as to the amount of the pro rata interest of each of State Fund's
shareholders as of the close of business on the Valuation Date (such
shareholders to be certified as such by the transfer agent for
Investment Trust), to be registered on the books of National Fund, in
full and fractional National Fund Shares, in the name of each such
shareholder, and National Fund agrees promptly to transfer the National
Fund Shares then credited to the account of State Fund on the books of
National Fund to open accounts on the share records of National Fund in
the names of State Fund shareholders in accordance with said
instruction. Each State Fund shareholder shall receive shares of the
corresponding class of National Fund to the class of State Fund held by
such shareholder. All issued and outstanding State Fund Shares shall
thereupon be canceled on the books of Investment Trust. National Fund
shall have no obligation to inquire as to the correctness of any such
instruction, but shall, in each case, assume that such instruction is
valid, proper and correct.
5. STATE FUND SECURITIES
On the Delivery Date, State Portfolio shall deliver the
Securities List and tax records. Such records shall be made available
by State Portfolio prior to the Closing Date for inspection by the
Treasurer (or his designee) and the auditors of National Fund and
National Portfolio upon reasonable request. Notwithstanding the
foregoing, it is expressly understood that State Portfolio may
hereafter until the close of business on the Valuation Date sell any
securities owned by it in the ordinary course of its business as an
open-end, management investment company.
6. LIABILITIES AND EXPENSES
National Fund shall acquire all liabilities of State Fund,
whether known or unknown, or contingent or determined. Investment Trust
will discharge all known liabilities of State Fund, so far as may be
possible, prior to the Closing Date. State Fund and National Fund shall
bear their respective expenses, in connection with carrying out this
Agreement.
-4-
<PAGE>
7. STATE AND NATIONAL PORTFOLIO REPRESENTATIONS AND WARRANTIES
Each of the State and National Portfolio hereby represents,
warrants and agrees as follows:
7.1 Legal Existence. The Portfolio is a trust duly organized and validly
existing under the laws of the State of New York.
7.2 Registration under 1940 Act. The Portfolio is duly registered
with the Commission as an open-end management investment
company under the 1940 Act and such registration is in full
force and effect.
7.3 Financial Statements. The statement of assets and liabilities,
schedule of portfolio investments and related statements of
operations and changes in net assets dated March 31, 1999
(audited) fairly present the financial condition of the
Portfolio as of said date in conformity with generally
accepted accounting principles.
7.4 No Material Events. There are no legal, administrative or
other proceedings pending, or to its knowledge, threatened
against the Portfolio which would materially affect its
financial condition.
7.5 Requisite Approvals. The execution and delivery of this
Agreement and the consummation of the transactions
contemplated herein have been authorized by the Portfolio's
Board of Trustees by vote taken at a meeting of such Board
duly called and held on August 16, 1999.
7.6 No Material Violations. The Portfolio is not, and the
execution, delivery and performance of this Agreement will not
result, in a material violation of any provision of its
Declaration of Trust or By-Laws, as each may be amended, of
the Portfolio or of any agreement, indenture, instrument,
contract, lease or other undertaking to which it is a party or
by which it is bound.
7.7 Taxes and Related Filings. Except where failure to do so would
not have a material adverse effect on the Portfolio, the
Portfolio has filed and will file or obtain valid extensions
of filing dates for all required federal, state and local tax
returns and reports for all taxable years through and
including the taxable year ended March 31, 1999, and no such
filings or reports are currently being audited or contested by
the Internal Revenue Service or state or local taxing
authority and all federal, state and local income, franchise,
property, sales, employment or other taxes or penalties
payable have been paid or will be paid, so far as due. The
Portfolio is classified as a partnership for federal tax
purposes, has qualified as such for each taxable year of its
operations, and will qualify as such as of the Closing Date.
7.8 Good and Marketable Title. On the Closing Date, the Portfolio
will have good and marketable title to its assets, free and
clear of all liens, mortgages, pledges, encumbrances, charges,
claims and equities whatsoever, and full right, power and
authority to sell, assign, transfer and deliver such assets
and shall deliver such assets to State Fund. Upon delivery of
such assets, State Fund will receive good and marketable title
to such assets, free and clear of all liens, mortgages,
pledges, encumbrances,
-5-
<PAGE>
charges, claims, restrictions (including such restrictions as
might arise under the 1933 Act) and equities, except as to
adverse claims under Article 8 of the Uniform Commercial Code
of which National Fund has notice and necessary documentation
at or prior to the time of delivery.
7.9 Books and Records. The Portfolio has maintained all records
required under Section 31 of the 1940 Act and rules thereunder.
8. INVESTMENT TRUST REPRESENTATIONS AND WARRANTIES
Investment Trust, on behalf of State and National Funds,
hereby represents, warrants and agrees as follows:
8.1 Legal Existence. Investment Trust is a business trust duly
organized and validly existing under the laws of the
Commonwealth of Massachusetts. Each of State Fund and National
Fund is a validly existing series of Investment Trust.
Investment Trust is authorized to issue an unlimited number of
shares of beneficial interest of National Fund.
8.2 Registration under 1940 Act. Investment Trust is duly
registered as an open-end management investment company under
the 1940 Act and such registration is in full force and
effect.
8.3 Financial Statements. The statement of assets and liabilities
and the schedule of portfolio investments and the related
statements of operations and changes in net assets of State
Fund and National Fund dated March 31, 1999, fairly present
the financial condition of State Fund and National Fund as of
said dates in conformity with generally accepted accounting
principles.
8.4 No Contingent Liabilities. There are no known contingent
liabilities of State Fund or National Fund not disclosed and
there are no legal, administrative or other proceedings
pending, or to the knowledge of Investment Trust threatened,
against State Fund or National Fund which would materially
affect its financial condition.
8.5 Requisite Approvals. The execution and delivery of this
Agreement and the consummation of the transactions
contemplated herein, have been authorized by the Board of
Trustees of Investment Trust by vote taken at a meeting of
such Board duly called and held on August 16, 1999. No
approval of the shareholders of National Fund is required in
connection with this Agreement or the transaction contemplated
hereby.
8.6 No Material Violations. Investment Trust is not, and the
execution, delivery and performance of this Agreement will not
result, in a material violation of any provision of its
Declaration of Trust or By-Laws, as each may be amended, of
Investment Trust or of any agreement, indenture, instrument,
contract, lease or other undertaking to which Investment Trust
is a party or by which it is bound.
8.7 Taxes and Related Filings. Except where failure to do so would
not have a material adverse effect on State Fund or National
Fund (i) each of State Fund and National Fund has filed or
will file (or has obtained valid extensions of filing dates
for) all required federal, state and local tax returns and
reports for all taxable years through the taxable year ended
March 31, 1999 and no such filings are currently being audited
or contested by the Internal Revenue Service or state or local
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<PAGE>
taxing authority; and (ii) all federal, state and local
income, franchise, property, sales, employment or other taxes
or penalties payable pursuant to such returns have been paid
or will be paid, so far as due. Each of State Fund and
National Fund has elected to be treated as a regulated
investment company for federal tax purposes, has qualified as
such for each taxable year of its operations and will qualify
as such as of the Closing Date.
8.8 National Investment Trust N-1A Not Misleading. The National
Investment Trust N-1A conforms on the date of the Agreement,
and will conform on the date of the Proxy Statement and the
Closing Date, in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules
and regulations of the Commission thereunder and does not
include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not materially
misleading.
8.9 Proxy Materials. The Proxy Statement delivered to the State
Fund shareholders in connection with this transaction (both at
the time of delivery to such shareholders in connection with
the meeting of shareholders and at all times subsequent
thereto and including the Closing Date) in all material
respects, conforms to the applicable requirements of the 1934
Act and the 1940 Act and the rules and regulations of the
Commission thereunder, and will not include any untrue
statement of a material fact or omit to state any material
fact required to be stated thereon or necessary to make
statements therein, in light of the circumstances under which
they were made, not materially misleading.
9. CONDITIONS PRECEDENT TO CLOSING
The obligations of the parties hereto shall be conditioned on
the following:
9.1 Representations and Warranties. The representations and
warranties of the parties made herein will be true and correct
on the Closing Date.
9.2 Shareholder Approval. The Agreement and the transactions
contemplated herein shall have been approved by the requisite
vote of the holders of State Fund Shares in accordance with
the 1940 Act and the Declaration of Trust and By-Laws, each as
amended, of Investment Trust.
9.3 Pending or Threatened Proceedings. On the Closing Date, no
action, suit or other proceeding shall be threatened or
pending before any court or governmental agency in which it is
sought to restrain or prohibit, or obtain damages or other
relief in connection with, this Agreement or the transactions
contemplated herein.
9.4 Registration Statement. The Investment Trust N-14 shall have
become effective under the 1933 Act; no stop orders suspending
the effectiveness of such Investment Trust N-14 shall have
been issued; and, to the best knowledge of the parties hereto,
no investigation or proceeding for that purpose shall have
been instituted or be pending, threatened or contemplated
under the 1933 Act.
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9.5 Declaration of Dividend. Investment Trust shall have declared
a dividend or dividends which, together with all previous such
dividends, shall have the effect of distributing to State Fund
shareholders all of State Fund' investment company taxable
income for the final taxable period of State Fund, all of its
net capital gain realized in the final taxable period of State
Fund (after reduction for any capital loss carryforward) and
all of the excess of (i) its interest income excludable from
gross income under Section 103(a) of the Internal Revenue Code
of 1986, as amended, over (ii) its deductions disallowed under
Sections 265 and 171(a)(2) of said Code for the final taxable
period of State Fund.
9.6 State Securities Laws. The parties shall have received all
permits and other authorizations necessary under state
securities laws to consummate the transactions contemplated
herein.
9.7 Performance of Covenants. Each party shall have performed and
complied in all material respects with each of the agreements
and covenants required by this Agreement to be performed or
complied with by each such party prior to or at the Valuation
Date and the Closing Date.
9.8 Due Diligence. Investment Trust shall have had reasonable
opportunity to have its officers and agents review the records
of State Portfolio.
9.9 No Material Adverse Change. From the date of this Agreement, through
the Closing Date, there shall not have been:
(1) any change in the business, results of operations,
assets or financial condition or the manner of
conducting the business of State Fund or National
Fund (other than changes in the ordinary course of
its business, including, without limitation,
dividends and distributions in the ordinary course
and changes in the net asset value per share) which
has had a material adverse effect on such business,
results of operations, assets or financial condition,
except in all instances as set forth in the financial
statements;
(2) any loss (whether or not covered by insurance)
suffered by State Fund or National Fund materially
and adversely affecting of State Fund or National
Fund, other than depreciation of securities;
(3) issued by Investment Trust to any person any option
to purchase or other right to acquire shares of any
class of State Fund or National Fund Shares (other
than in the ordinary course of Investment Trust's
business as an open-end management investment
company);
(4) any indebtedness incurred by State Portfolio or
National Portfolio for borrowed money or any
commitment to borrow money entered into by State
Portfolio or National Portfolio except as permitted
in State Investment Trust N-1A or National Investment
Trust N-1A and disclosed in financial statements
required to be provided under this Agreement;
(5) any amendment to the Declaration of Trust or By-Laws
of Investment Trust that will adversely affect the
ability of Investment Trust to comply with the terms
of this Agreement; or
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(6) any grant or imposition of any lien, claim, charge or
encumbrance upon any asset of State Portfolio except
as provided in State Investment Trust N-1A so long as
it will not prevent Investment Trust from complying
with Section 7.8.
9.11 Lawful Sale of Shares. On the Closing Date, National Fund
Shares to be issued pursuant to Section 2.1 of this Agreement
will be duly authorized, duly and validly issued and
outstanding, and fully paid and non-assessable by Investment
Trust, and conform in all substantial respects to the
description thereof contained in the Investment Trust N-14 and
Proxy Statement furnished to the State Fund shareholders and
the National Fund Shares to be issued pursuant to paragraph
2.1 of this Agreement will be duly registered under the 1933
Act by the Investment Trust N-14 and will be offered and sold
in compliance with all applicable state securities laws.
10. ADDRESSES
All notices required or permitted to be given under this
Agreement shall be given in writing to The Eaton Vance Building, 255
State Street, Boston, MA 02109 (Attention: Eric G. Woodbury, Esq.), or
at such other place as shall be specified in written notice given by
either party to the other party to this Agreement and shall be validly
given if mailed by first-class mail, postage prepaid.
11. TERMINATION
This Agreement may be terminated by either party upon the
giving of written notice to the other, if any of the representations,
warranties or conditions specified in Section 7, 8 or 9 hereof have not
been performed or do not exist on or before February 28, 2000. In the
event of termination of this Agreement pursuant to this provision,
neither party (nor its officers, Trustees or shareholders) shall have
any liability to the other.
12. MISCELLANEOUS
This Agreement shall be governed by, construed and enforced in
accordance with the laws of the Commonwealth of Massachusetts.
Investment Trust represents that there are no brokers or finders
entitled to receive any payments in connection with the transactions
provided for herein. Investment Trust represents that this Agreement
constitutes the entire agreement between the parties as to the subject
matter hereof. The representations, warranties and covenants contained
in this Agreement or in any document delivered pursuant hereto or in
connection herewith shall not survive the consummation of the
transactions contemplated hereunder. The Section headings contained in
this Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement. This Agreement
shall be executed in any number of counterparts, each of which shall be
deemed an original. Whenever used herein, the use of any gender shall
include all genders.
13. PUBLICITY
Any announcements or similar publicity with respect to this
Agreement or the transactions contemplated herein will be made at such
time and in such manner as Investment Trust shall determine.
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<PAGE>
14. AMENDMENTS
At any time prior to or after approval of this Agreement by
State Fund shareholders (i) the parties hereto may, by written
agreement and without shareholder approval, amend any of the provisions
of this Agreement, and (ii) either party may waive without such
approval any default by the other party or the failure to satisfy any
of the conditions to its obligations (such waiver to be in writing);
provided, however, that following shareholder approval, no such
amendment may have the effect of changing the provisions for
determining the number of National Fund Shares to be received by State
Fund shareholders under this Agreement to the detriment of such
shareholders without their further approval. The failure of a party
hereto to enforce at any time any of the provisions of this Agreement
shall in no way be construed to be a waiver of any such provision, nor
in any way to affect the validity of this Agreement or any part hereof
or the right of any party thereafter to enforce each and every such
provision. No waiver of any breach of this Agreement shall be held to
be a waiver of any other or subsequent breach.
15. MASSACHUSETTS BUSINESS TRUST
References in this Agreement to Investment Trust mean and
refer to the Trustees, from time to time serving under its Declarations
of Trust on file with the Secretary of the Commonwealth of
Massachusetts, as the same may be amended from time to time, pursuant
to which they conduct their businesses. It is expressly agreed that the
obligations of Investment Trust hereunder shall not be binding upon any
of the trustees, shareholders, nominees, officers, agents or employees
of the Trust personally, but bind only the trust property of Investment
Trust as provided in said Declaration of Trust. The execution and
delivery of this Agreement has been authorized by the respective
trustees and signed by an authorized officer of Investment Trust,
acting as such, and neither such authorization by such trustees nor
such execution and delivery by such officer shall be deemed to have
been made by any of them but shall bind only the trust property of
Investment Trust as provided in such Declaration of Trust. No series of
Investment Trust shall be liable for the obligations of any other
series.
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and its seal affixed hereto by their officers thereunto
duly authorized, as of the day and year first above written.
ATTEST: EATON VANCE INVESTMENT TRUST
(on behalf of Eaton Vance Connecticut
Limited Maturity Municipals Fund)
/s/ Eric G. Woodbury By: /s/ Thomas J. Fetter
- -------------------- --------------------
Assistant Secretary President
EATON VANCE INVESTMENT TRUST (on behalf
of Eaton Vance National Limited Maturity
Municipals Fund)
/s/ Eric G. Woodbury By: /s/ Thomas J. Fetter
- -------------------- ---------------------
Assistant Secretary President
CONNECTICUT LIMITED MATURITY MUNICIPALS
PORTFOLIO
/s/ Eric G. Woodbury By: /s/ Thomas J. Fetter
- -------------------- --------------------
Assistant Secretary President
NATIONAL LIMITED MATURITY
MUNICIPALS PORTFOLIO
/s/ Eric G. Woodbury By: /s/ Thomas J. Fetter
- -------------------- ---------------------
Assistant Secretary President
<PAGE>
EXHIBIT (4)(b)
EXHIBIT A
AGREEMENT
AND
PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made as of
this 16th day of August, 1999, by and among Eaton Vance Investment Trust, a
Massachusetts business trust ("Investment Trust") on behalf of its series Eaton
Vance Michigan Limited Maturity Municipals Fund ("State Fund") and Eaton Vance
National Limited Maturity Municipals Fund ("National Fund").
WITNESSETH
WHEREAS, Investment Trust is registered under the Investment Company
Act of 1940, as amended (the "1940 Act") as an open-end management investment
company authorized to issue an unlimited number of shares of beneficial interest
without par value in one or more series (such as National Fund), and the
Trustees of Investment Trust have divided the shares of State and National Fund
into multiple classes, including Class A and Class B shares ("State Fund Shares"
and "National Fund Shares");
WHEREAS, State Fund currently invests all of its assets in Michigan
Limited Maturity Municipals Portfolio (the "Limited Portfolio"), a New York
trust registered under the 1940 Act as an open-end management investment
company;
WHEREAS, the National Fund currently invests all of its assets in
National Limited Maturity Municipals Portfolio (the "National Portfolio"), a New
York trust registered under the 1940 Act as an open-end management investment
company;
WHEREAS, Boston Management and Research, a wholly owned subsidiary of
Eaton Vance Management, serves as investment adviser to the Portfolios; and
WHEREAS, Investment Trust desires to provide for the reorganization of
State Fund through the acquisition by National Fund of substantially all of the
assets of State Fund in exchange for National Fund Shares in the manner set
forth herein;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows:
1. DEFINITIONS
1.1 The term "1933 Act" shall mean the Securities Act of 1933, as
amended.
1.2 The term "1934 Act" shall mean the Securities Exchange Act of
1934, as amended.
1.3 The term "Agreement" shall mean this Agreement and Plan of
Reorganization.
1.4 The term "Assumed Liabilities" shall mean all liabilities,
expenses, costs, charges and receivables of State Fund as of
the Close of Trading on the New York Stock Exchange on the
Valuation Date.
<PAGE>
1.5 The term "Business Day" shall mean any day that is not a Saturday
or Sunday and that the New York Stock Exchange is open.
1.6 The term "Close of Trading on the NYSE" shall mean the close
of regular trading, which is usually 4:00 p.m. Eastern time.
1.7 The term "Closing" shall mean the closing of the transaction
contemplated by this Agreement.
1.8 The term "Closing Date" shall mean the first Monday following
receipt of all necessary regulatory approvals and the final
adjournment of the meeting of State Fund shareholders at which
this Agreement is considered, or such other date as may be
agreed by the parties on which the Closing is to take place.
1.9 The term "Commission" shall mean the Securities and Exchange
Commission.
1.10 The term "Custodian" shall mean Investors Bank & Trust Company.
1.11 The term "Delivery Date" shall mean the date contemplated by
Section 3.3 of this Agreement.
1.12 The term "Investment Trust N-14" shall mean Investment Trust's
registration statement on Form N-14, as may be amended, that
describes the transactions contemplated by this Agreement and
the National Fund Shares.
1.13 The term "National Investment Trust N-1A" shall mean the
registration statement, as amended, on Form N-1A of Investment
Trust with respect to National Fund in effect on the date
hereof or on the Closing Date, as the context may require.
1.14 The term "NYSE" shall mean the New York Stock Exchange.
1.15 The term "Proxy Statement" shall mean the combined prospectus
and proxy statement furnished to the State Fund shareholders
in connection with this transaction.
1.16 The term "Securities List" shall mean the list of those
securities (and other assets) owned by Investment Trust, on
behalf of State Fund, on the Delivery Date.
1.17 The term "State Investment Trust N-1A" shall mean the
registration statement, as amended, on Form N-1A of Investment
Trust with respect to State Fund in effect on the date hereof
or on the Closing Date, as the context may require.
1.18 The term "Valuation Date" shall mean the Business Day
preceding the Closing Date.
2. TRANSFER AND EXCHANGE OF ASSETS
2.1 Reorganization of State Fund. At the Closing, Investment Trust
shall transfer all of the assets of State Fund received from
the State Portfolio, and assign all Assumed Liabilities to
National Fund, and National Fund shall acquire such assets and
shall assume such Assumed Liabilities upon delivery by
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<PAGE>
National Fund to State Fund on the Closing Date of Class A and
Class B National Fund Shares (including, if applicable,
fractional shares) having an aggregate net asset value equal
to the value of the assets so transferred, assigned and
delivered, less the Assumed Liabilities, all determined and
adjusted as provided in Section 2.2. National Fund shall
transfer such assets and liabilities to National Portfolio on
the Closing Date.
2.2 Computation of Net Asset Value. The net asset value per share
of the National Fund Shares and the net value of the assets of
State Fund subject to this Agreement shall, in each case, be
determined as of the Close of Trading on the NYSE on the
Valuation Date, after the declaration and payment of any
dividend on that date. The net asset value of the National
Fund Shares shall be computed in the manner set forth in the
National Investment Trust Form N-1A.
In determining the value of the securities
transferred by State Fund to National Fund, each security
shall be priced in accordance with the policies and procedures
described in the National Investment Trust N-1A. All such
computations shall be subject to review, in the discretion of
Investment Trust's Treasurer, by Deloitte & Touche LLP,
Investment Trust auditors.
3. CLOSING DATE, VALUATION DATE AND DELIVERY
3.1 Closing Date. The Closing shall be at the offices of Eaton
Vance, The Eaton Vance Building, 255 State Street, Boston, MA
02109 immediately prior to the opening of Eaton Vance's
business on the Closing Date. All acts taking place at Closing
shall be deemed to take place simultaneously as of 9:00 a.m.
Eastern time on the Closing Date unless otherwise agreed in
writing by the parties.
3.2 Valuation Date. Pursuant to Section 2.2, the net value of the
assets of State Fund and the net asset value per share of
National Fund shall be determined as of the Close of Trading
on the NYSE on the Valuation Date, after the declaration and
payment of any dividend on that date. The stock transfer books
of Investment Trust with respect to State Fund will be
permanently closed, and sales of State Fund Shares shall be
suspended, as of the close of business of Investment Trust on
the Valuation Date. Redemption requests thereafter received by
Investment Trust with respect to State Fund shall be deemed to
be redemption requests for National Fund Shares to be
distributed to shareholders of State Fund under this Agreement
provided that the transactions contemplated by this Agreement
are consummated.
In the event that trading on the NYSE or on another
exchange or market on which securities held by State or
National Portfolio, shall be disrupted on the Valuation Date
so that, in the judgment of the Trust, accurate appraisal of
the net assets of State Fund to be transferred hereunder or
the assets of National Fund is impracticable, the Valuation
Date shall be postponed until the first Business Day after the
day on which trading on such exchange or in such market shall,
in the judgment of the Trust, have been resumed without
disruption. In such event, the Closing Date shall be postponed
until one Business Day after the Valuation Date.
3.3 Delivery of Securities and other Assets. After the close of
business on the Valuation Date, Investment Trust shall issue
instructions providing for the delivery of all securities held
on behalf of State Fund together with other non-cash assets of
State Fund to the Custodian to be held for the account of
National Fund, effective as of the Closing. National Fund may
inspect such securities at the offices of the Custodian prior
to the Valuation Date.
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Securities so delivered shall be in proper form for
transfer in such condition as to constitute a good delivery
thereof, in accordance with the custom of brokers, and shall
be accompanied by all necessary stock transfer stamps (or
other documentation evidencing payment of local taxes), if
any, or a check for the appropriate purchase price of such
stamps (or payment of such local tax). Unless otherwise
directed by Investment Trust in writing on or before the
Delivery Date, cash held by and to be delivered, on behalf of
State Fund, shall be delivered on the Closing Date and shall
be in the form of wire transfer in Federal Funds, payable to
the order of the account of National Fund at the Custodian. A
confirmation for the National Fund Shares registered in the
name of State Fund shall be delivered on the Closing Date.
4. STATE FUND DISTRIBUTIONS AND TERMINATION
As soon as reasonably practicable after the Closing Date,
Investment Trust shall pay or make provisions for the payment of all of
the debts and taxes of State Fund and distribute all remaining assets,
if any, to shareholders of State Fund, and State Fund shall thereafter
be terminated under Massachusetts law. The State Portfolio shall
liquidate and deregister under the 1940 Act.
At, or as soon as may be practicable following the Closing
Date, Investment Trust on behalf of State Fund shall instruct National
Fund as to the amount of the pro rata interest of each of State Fund's
shareholders as of the close of business on the Valuation Date (such
shareholders to be certified as such by the transfer agent for
Investment Trust), to be registered on the books of National Fund, in
full and fractional National Fund Shares, in the name of each such
shareholder, and National Fund agrees promptly to transfer the National
Fund Shares then credited to the account of State Fund on the books of
National Fund to open accounts on the share records of National Fund in
the names of State Fund shareholders in accordance with said
instruction. Each State Fund shareholder shall receive shares of the
corresponding class of National Fund to the class of State Fund held by
such shareholder. All issued and outstanding State Fund Shares shall
thereupon be canceled on the books of Investment Trust. National Fund
shall have no obligation to inquire as to the correctness of any such
instruction, but shall, in each case, assume that such instruction is
valid, proper and correct.
5. STATE FUND SECURITIES
On the Delivery Date, State Portfolio shall deliver the
Securities List and tax records. Such records shall be made available
by State Portfolio prior to the Closing Date for inspection by the
Treasurer (or his designee) and the auditors of National Fund and
National Portfolio upon reasonable request. Notwithstanding the
foregoing, it is expressly understood that State Portfolio may
hereafter until the close of business on the Valuation Date sell any
securities owned by it in the ordinary course of its business as an
open-end, management investment company.
6. LIABILITIES AND EXPENSES
National Fund shall acquire all liabilities of State Fund,
whether known or unknown, or contingent or determined. Investment Trust
will discharge all known liabilities of State Fund, so far as may be
possible, prior to the Closing Date. State Fund and National Fund shall
bear their respective expenses, in connection with carrying out this
Agreement.
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<PAGE>
7. STATE AND NATIONAL PORTFOLIO REPRESENTATIONS AND WARRANTIES
Each of the State and National Portfolio hereby represents,
warrants and agrees as follows:
7.1 Legal Existence. The Portfolio is a trust duly organized and
validly existing under the laws of the State of New York.
7.2 Registration under 1940 Act. The Portfolio is duly registered
with the Commission as an open-end management investment
company under the 1940 Act and such registration is in full
force and effect.
7.3 Financial Statements. The statement of assets and liabilities,
schedule of portfolio investments and related statements of
operations and changes in net assets dated March 31, 1999
(audited) fairly present the financial condition of the
Portfolio as of said date in conformity with generally
accepted accounting principles.
7.4 No Material Events. There are no legal, administrative or
other proceedings pending, or to its knowledge, threatened
against the Portfolio which would materially affect its
financial condition.
7.5 Requisite Approvals. The execution and delivery of this
Agreement and the consummation of the transactions
contemplated herein have been authorized by the Portfolio's
Board of Trustees by vote taken at a meeting of such Board
duly called and held on August 16, 1999.
7.6 No Material Violations. The Portfolio is not, and the
execution, delivery and performance of this Agreement will not
result, in a material violation of any provision of its
Declaration of Trust or By-Laws, as each may be amended, of
the Portfolio or of any agreement, indenture, instrument,
contract, lease or other undertaking to which it is a party or
by which it is bound.
7.7 Taxes and Related Filings. Except where failure to do so would
not have a material adverse effect on the Portfolio, the
Portfolio has filed and will file or obtain valid extensions
of filing dates for all required federal, state and local tax
returns and reports for all taxable years through and
including the taxable year ended March 31, 1999, and no such
filings or reports are currently being audited or contested by
the Internal Revenue Service or state or local taxing
authority and all federal, state and local income, franchise,
property, sales, employment or other taxes or penalties
payable have been paid or will be paid, so far as due. The
Portfolio is classified as a partnership for federal tax
purposes, has qualified as such for each taxable year of its
operations, and will qualify as such as of the Closing Date.
7.8 Good and Marketable Title. On the Closing Date, the Portfolio
will have good and marketable title to its assets, free and
clear of all liens, mortgages, pledges, encumbrances, charges,
claims and equities whatsoever, and full right, power and
authority to sell, assign, transfer and deliver such assets
and shall deliver such assets to State Fund. Upon delivery of
such assets, State Fund will receive good and marketable title
to such assets, free and clear of all liens, mortgages,
pledges, encumbrances,
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<PAGE>
charges, claims, restrictions (including such restrictions as
might arise under the 1933 Act) and equities, except as to
adverse claims under Article 8 of the Uniform Commercial Code
of which National Fund has notice and necessary documentation
at or prior to the time of delivery.
7.9 Books and Records. The Portfolio has maintained all records
required under Section 31 of the 1940 Act and rules thereunder.
8. INVESTMENT TRUST REPRESENTATIONS AND WARRANTIES
Investment Trust, on behalf of State and National Funds,
hereby represents, warrants and agrees as follows:
8.1 Legal Existence. Investment Trust is a business trust duly
organized and validly existing under the laws of the
Commonwealth of Massachusetts. Each of State Fund and National
Fund is a validly existing series of Investment Trust.
Investment Trust is authorized to issue an unlimited number of
shares of beneficial interest of National Fund.
8.2 Registration under 1940 Act. Investment Trust is duly
registered as an open-end management investment company under
the 1940 Act and such registration is in full force and
effect.
8.3 Financial Statements. The statement of assets and liabilities
and the schedule of portfolio investments and the related
statements of operations and changes in net assets of State
Fund and National Fund dated March 31, 1999, fairly present
the financial condition of State Fund and National Fund as of
said dates in conformity with generally accepted accounting
principles.
8.4 No Contingent Liabilities. There are no known contingent
liabilities of State Fund or National Fund not disclosed and
there are no legal, administrative or other proceedings
pending, or to the knowledge of Investment Trust threatened,
against State Fund or National Fund which would materially
affect its financial condition.
8.5 Requisite Approvals. The execution and delivery of this
Agreement and the consummation of the transactions
contemplated herein, have been authorized by the Board of
Trustees of Investment Trust by vote taken at a meeting of
such Board duly called and held on August 16, 1999. No
approval of the shareholders of National Fund is required in
connection with this Agreement or the transaction contemplated
hereby.
8.6 No Material Violations. Investment Trust is not, and the
execution, delivery and performance of this Agreement will not
result, in a material violation of any provision of its
Declaration of Trust or By-Laws, as each may be amended, of
Investment Trust or of any agreement, indenture, instrument,
contract, lease or other undertaking to which Investment Trust
is a party or by which it is bound.
8.7 Taxes and Related Filings. Except where failure to do so would
not have a material adverse effect on State Fund or National
Fund (i) each of State Fund and National Fund has filed or
will file (or has obtained valid extensions of filing dates
for) all required federal, state and local tax returns and
reports for all taxable years through the taxable year ended
March 31, 1999 and no such filings are currently being audited
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<PAGE>
or contested by the Internal Revenue Service or state or local
taxing authority; and (ii) all federal, state and local
income, franchise, property, sales, employment or other taxes
or penalties payable pursuant to such returns have been paid
or will be paid, so far as due. Each of State Fund and
National Fund has elected to be treated as a regulated
investment company for federal tax purposes, has qualified as
such for each taxable year of its operations and will qualify
as such as of the Closing Date.
8.8 National Investment Trust N-1A Not Misleading. The National
Investment Trust N-1A conforms on the date of the Agreement,
and will conform on the date of the Proxy Statement and the
Closing Date, in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules
and regulations of the Commission thereunder and does not
include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not materially
misleading.
8.9 Proxy Materials. The Proxy Statement delivered to the State
Fund shareholders in connection with this transaction (both at
the time of delivery to such shareholders in connection with
the meeting of shareholders and at all times subsequent
thereto and including the Closing Date) in all material
respects, conforms to the applicable requirements of the 1934
Act and the 1940 Act and the rules and regulations of the
Commission thereunder, and will not include any untrue
statement of a material fact or omit to state any material
fact required to be stated thereon or necessary to make
statements therein, in light of the circumstances under which
they were made, not materially misleading.
9. CONDITIONS PRECEDENT TO CLOSING
The obligations of the parties hereto shall be conditioned on
the following:
9.1 Representations and Warranties. The representations and
warranties of the parties made herein will be true and correct
on the Closing Date.
9.2 Shareholder Approval. The Agreement and the transactions
contemplated herein shall have been approved by the requisite
vote of the holders of State Fund Shares in accordance with
the 1940 Act and the Declaration of Trust and By-Laws, each as
amended, of Investment Trust.
9.3 Pending or Threatened Proceedings. On the Closing Date, no
action, suit or other proceeding shall be threatened or
pending before any court or governmental agency in which it is
sought to restrain or prohibit, or obtain damages or other
relief in connection with, this Agreement or the transactions
contemplated herein.
9.4 Registration Statement. The Investment Trust N-14 shall have
become effective under the 1933 Act; no stop orders suspending
the effectiveness of such Investment Trust N-14 shall have
been issued; and, to the best knowledge of the parties hereto,
no investigation or proceeding for that purpose shall have
been instituted or be pending, threatened or contemplated
under the 1933 Act.
-7-
<PAGE>
9.5 Declaration of Dividend. Investment Trust shall have declared
a dividend or dividends which, together with all previous such
dividends, shall have the effect of distributing to State Fund
shareholders all of State Fund' investment company taxable
income for the final taxable period of State Fund, all of its
net capital gain realized in the final taxable period of State
Fund (after reduction for any capital loss carryforward) and
all of the excess of (i) its interest income excludable from
gross income under Section 103(a) of the Internal Revenue Code
of 1986, as amended, over (ii) its deductions disallowed under
Sections 265 and 171(a)(2) of said Code for the final taxable
period of State Fund.
9.6 State Securities Laws. The parties shall have received all
permits and other authorizations necessary under state
securities laws to consummate the transactions contemplated
herein.
9.7 Performance of Covenants. Each party shall have performed and
complied in all material respects with each of the agreements
and covenants required by this Agreement to be performed or
complied with by each such party prior to or at the Valuation
Date and the Closing Date.
9.8 Due Diligence. Investment Trust shall have had reasonable
opportunity to have its officers and agents review the records
of State Portfolio.
9.9 No Material Adverse Change. From the date of this Agreement,
through the Closing Date, there shall not have been:
(1) any change in the business, results of operations,
assets or financial condition or the manner of
conducting the business of State Fund or National
Fund (other than changes in the ordinary course of
its business, including, without limitation,
dividends and distributions in the ordinary course
and changes in the net asset value per share) which
has had a material adverse effect on such business,
results of operations, assets or financial condition,
except in all instances as set forth in the financial
statements;
(2) any loss (whether or not covered by insurance)
suffered by State Fund or National Fund materially
and adversely affecting of State Fund or National
Fund, other than depreciation of securities;
(3) issued by Investment Trust to any person any option
to purchase or other right to acquire shares of any
class of State Fund or National Fund Shares (other
than in the ordinary course of Investment Trust's
business as an open-end management investment
company);
(4) any indebtedness incurred by State Portfolio or
National Portfolio for borrowed money or any
commitment to borrow money entered into by State
Portfolio or National Portfolio except as permitted
in State Investment Trust N-1A or National Investment
Trust N-1A and disclosed in financial statements
required to be provided under this Agreement;
(5) any amendment to the Declaration of Trust or By-Laws
of Investment Trust that will adversely affect the
ability of Investment Trust to comply with the terms
of this Agreement; or
-8-
<PAGE>
(6) any grant or imposition of any lien, claim, charge or
encumbrance upon any asset of State Portfolio except
as provided in State Investment Trust N-1A so long as
it will not prevent Investment Trust from complying
with Section 7.8.
9.11 Lawful Sale of Shares. On the Closing Date, National Fund
Shares to be issued pursuant to Section 2.1 of this Agreement
will be duly authorized, duly and validly issued and
outstanding, and fully paid and non-assessable by Investment
Trust, and conform in all substantial respects to the
description thereof contained in the Investment Trust N-14 and
Proxy Statement furnished to the State Fund shareholders and
the National Fund Shares to be issued pursuant to paragraph
2.1 of this Agreement will be duly registered under the 1933
Act by the Investment Trust N-14 and will be offered and sold
in compliance with all applicable state securities laws.
10. ADDRESSES
All notices required or permitted to be given under this
Agreement shall be given in writing to The Eaton Vance Building, 255
State Street, Boston, MA 02109 (Attention: Eric G. Woodbury, Esq.), or
at such other place as shall be specified in written notice given by
either party to the other party to this Agreement and shall be validly
given if mailed by first-class mail, postage prepaid.
11. TERMINATION
This Agreement may be terminated by either party upon the
giving of written notice to the other, if any of the representations,
warranties or conditions specified in Section 7, 8 or 9 hereof have not
been performed or do not exist on or before February 28, 2000. In the
event of termination of this Agreement pursuant to this provision,
neither party (nor its officers, Trustees or shareholders) shall have
any liability to the other.
12. MISCELLANEOUS
This Agreement shall be governed by, construed and enforced in
accordance with the laws of the Commonwealth of Massachusetts.
Investment Trust represents that there are no brokers or finders
entitled to receive any payments in connection with the transactions
provided for herein. Investment Trust represents that this Agreement
constitutes the entire agreement between the parties as to the subject
matter hereof. The representations, warranties and covenants contained
in this Agreement or in any document delivered pursuant hereto or in
connection herewith shall not survive the consummation of the
transactions contemplated hereunder. The Section headings contained in
this Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement. This Agreement
shall be executed in any number of counterparts, each of which shall be
deemed an original. Whenever used herein, the use of any gender shall
include all genders.
13. PUBLICITY
Any announcements or similar publicity with respect to this
Agreement or the transactions contemplated herein will be made at such
time and in such manner as Investment Trust shall determine.
<PAGE>
14. AMENDMENTS
At any time prior to or after approval of this Agreement by
State Fund shareholders (i) the parties hereto may, by written
agreement and without shareholder approval, amend any of the provisions
of this Agreement, and (ii) either party may waive without such
approval any default by the other party or the failure to satisfy any
of the conditions to its obligations (such waiver to be in writing);
provided, however, that following shareholder approval, no such
amendment may have the effect of changing the provisions for
determining the number of National Fund Shares to be received by State
Fund shareholders under this Agreement to the detriment of such
shareholders without their further approval. The failure of a party
hereto to enforce at any time any of the provisions of this Agreement
shall in no way be construed to be a waiver of any such provision, nor
in any way to affect the validity of this Agreement or any part hereof
or the right of any party thereafter to enforce each and every such
provision. No waiver of any breach of this Agreement shall be held to
be a waiver of any other or subsequent breach.
15. MASSACHUSETTS BUSINESS TRUST
References in this Agreement to Investment Trust mean and
refer to the Trustees, from time to time serving under its Declarations
of Trust on file with the Secretary of the Commonwealth of
Massachusetts, as the same may be amended from time to time, pursuant
to which they conduct their businesses. It is expressly agreed that the
obligations of Investment Trust hereunder shall not be binding upon any
of the trustees, shareholders, nominees, officers, agents or employees
of the Trust personally, but bind only the trust property of Investment
Trust as provided in said Declaration of Trust. The execution and
delivery of this Agreement has been authorized by the respective
trustees and signed by an authorized officer of Investment Trust,
acting as such, and neither such authorization by such trustees nor
such execution and delivery by such officer shall be deemed to have
been made by any of them but shall bind only the trust property of
Investment Trust as provided in such Declaration of Trust. No series of
Investment Trust shall be liable for the obligations of any other
series.
-10-
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and its seal affixed hereto by their officers thereunto
duly authorized, as of the day and year first above written.
ATTEST: EATON VANCE INVESTMENT TRUST
(on behalf of Eaton Vance Michigan
Limited Maturity Municipals Fund)
/s/ Eric G. Woodbury By: /s/ Thomas J. Fetter
- -------------------- --------------------
Assistant Secretary President
EATON VANCE INVESTMENT TRUST (on
behalf of Eaton Vance National Limited
Maturity Municipals Fund)
/s/ Eric G. Woodbury By: /s/ Thomas J. Fetter
- --------------------- --------------------
Assistant Secretary President
MICHIGAN LIMITED
MATURITY MUNICIPALS PORTFOLIO
/s/ Eric G. Woodbury By: /s/ Thomas J. Fetter
- -------------------- --------------------
Assistant Secretary President
NATIONAL LIMITED MATURITY
MUNICIPALS PORTFOLIO
/s/ Eric G. Woodbury By: /s/ Thomas J. Fetter
- -------------------- ---------------------
Assistant Secretary President
<PAGE>
EXHIBIT (11)
EATON VANCE MANAGEMENT
The Eaton Vance Building
255 State Street
Boston, MA 02109
Telephone: (617) 482-8260
Telecopy: (617) 338-8054
August 23, 1999
Eaton Vance Investment Trust
The Eaton Vance Building
255 State Street
Boston, MA 02109
Ladies and Gentlemen:
Eaton Vance Investment Trust (the "Trust") is a voluntary association
(commonly referred to as a "business trust") established under Massachusetts law
with the powers and authority set forth under its Amended and Restated
Declaration of Trust dated January 11, 1993, as amended (the "Declaration of
Trust").
I am of the opinion that all legal requirements have been complied with
in the creation of the Trust, and that said Declaration of Trust is legal and
valid.
The Trustees of the Trust have the powers set forth in the Declaration
of Trust, subject to the terms, provisions and conditions therein provided. As
provided in the Declaration of Trust, the Trustees may authorize one or more
series or classes of shares, without par value, and the number of shares of each
series or class authorized is unlimited. Furthermore, the Trustees may from time
to time issue and sell or cause to be issued and sold shares of a series of the
Trust for cash or for property. All such shares, when so issued, shall be fully
paid and nonassessable by the Trust.
Under the Declaration of Trust, the Trustees may, in connection with
the acquisitions of all or substantially all of the assets of another investment
company, issue or cause to be issued shares and accept in payment therefor such
assets at such value as may be determined by or under the direction of the
Trustees.
I have examined originals, or copies, certified or otherwise identified
to my satisfaction, of such certificates, records and other documents as we have
deemed necessary or appropriate for the purpose of this opinion, including (1)
the Declaration of Trust, and (2) votes adopted by the Trustees on August 16,
1999.
By votes adopted August 16, 1999, the Trustees of the Trust authorized
the issuance of Class A and Class B shares of beneficial interest, without par
value, of Eaton Vance National Limited Maturity Municipals Fund ("National
Fund"), a series of the Trust, in accordance with the terms of the Agreements
and Plans of Reorganization on behalf of Eaton Vance Connecticut Limited
Maturity Municipals Fund and Eaton Vance Michigan Limited Maturity Municipals
Fund (the "Agreements").
<PAGE>
Eaton Vance Investment Trust
August 23, 1999
Page 2
I understand that, pursuant to Rule 24f-2 under the Investment Company
Act of 1940, the Trust has registered an indefinite number of its shares of
beneficial interest under the Securities Act of 1933, as amended.
Based upon the foregoing, and with respect to Massachusetts law (other
than the Massachusetts Uniform Securities Act), only to the extent that
Massachusetts law may be applicable and without reference to the laws of the
other several states or of the United States of America, I am of the opinion
that under existing law:
1. The Trust is a trust with transferable shares of beneficial interest
organized in compliance with the laws of the Commonwealth of Massachusetts, and
the Declaration of Trust is legal and valid under the laws of the Commonwealth
of Massachusetts.
2. Shares of beneficial interest of the National Fund series of the
Trust to be issued in accordance with the Agreements may be legally and validly
issued in accordance with the Declaration of Trust upon receipt by the Trust of
payment in compliance with the Declaration of Trust and the Agreement and, when
so issued and sold, will be fully paid and nonassessable by the Trust.
I am a member of the Massachusetts bar and have acted as internal legal
counsel of the Trust in connection with the transaction contemplated by the
Agreement.
I hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Trust's Registration Statement on Form
N-14 pursuant to the Securities Act of 1933, as amended.
Very truly yours,
/s/ Eric G. Woodbury
------------------------
Eric G. Woodbury, Esq.
Vice President
<PAGE>
EXHIBIT (12)
HALE AND DORR LLP
Counsellors at Law
60 State Street, Boston, Massachusetts 02109
617-526-6000 o Fax 617-526-5000
DRAFT
November 1, 1999
Board of Trustees
Eaton Vance Investment Trust,
on behalf of Eaton Vance Connecticut
Limited Maturity Municipals Fund,
Eaton Vance Michigan Limited Maturity
Municipals Fund, and Eaton Vance
National Limited Maturity Municipals Fund
The Eaton Vance Building
255 State Street
Boston, MA 02109
Dear Members of the Board of Trustees:
You have requested our opinion regarding certain federal income tax
consequences described below of the acquisition by Eaton Vance National Limited
Maturity Municipals Fund (the "Acquiring Fund"), a series of Eaton Vance
Investment Trust (the "Trust"), of all of the assets of Eaton Vance Connecticut
Limited Maturity Municipals Fund and Eaton Vance Michigan Limited Maturity
Municipals Fund (each of which is a separate series of the Trust and is referred
to hereinafter as an "Acquired Fund"), in exchange solely for (i) the assumption
by the Acquiring Fund of all of the liabilities of each Acquired Fund (the
"Acquired Fund Liabilities") and (ii) the issuance of Class A and Class B voting
shares of beneficial interest of the Acquiring Fund (the "Acquiring Fund
Shares") to each Acquired Fund, followed by the distribution by each Acquired
Fund, in liquidation of that Acquired Fund, of the Acquiring Fund Shares to the
shareholders of that Acquired Fund and the termination of that Acquired Fund
(the foregoing together constituting the "reorganizations" or the
"transactions").
In rendering this opinion, we have examined and relied upon the facts
stated and representations made in (i) the prospectus for the Acquiring Fund,
dated August 1, 1999, (ii) the prospectus for each Acquired Fund and certain
other mutual funds, dated August 1, 1999, (iii) the statement of additional
information for the Acquiring Fund, dated August 1, 1999, (iv) the statement of
additional information for each Acquired Fund and certain other mutual funds,
dated August 1, 1999, (v) the Notice of Meeting of Shareholders Scheduled for
October 29, 1999 and the accompanying proxy statement and prospectus relating to
the transactions, dated ___________, 1999 (the "Proxy Statement"), (vi) the
memorandum, dated August 10, 1999, regarding the transaction from Eaton Vance
Management to the Board of Trustees of the Trust, (vii) the Agreement and Plan
of Reorganization, made August 16, 1999, between
Washington, DC Boston, MA London, UK*
HALE AND DORR LLP INCLUDES PROFESSIONAL CORPORATIONS
*BROBECK HALE AND DORR INTERNATIONAL (AN INDEPENDENT JOINT VENTURE LAW FIRM)
<PAGE>
Board of Trustees
Eaton Vance Investment Trust
November 1, 1999
Page 2
the Acquiring Fund and each Acquired Fund (the "Agreement"), (viii) the letters
on behalf of the Acquiring Fund, each Acquired Fund, Connecticut Limited
Maturity Municipals Portfolio, Michigan Limited Maturity Municipals Portfolio
and National Limited Maturity Municipals Portfolio delivered to Hale and Dorr
LLP containing certain representations relevant to this opinion (the
"Representation Letters") and (ix) such other documents as we deemed
appropriate.
In our examination of documents, we have assumed the authenticity of
original documents, the accuracy of copies, the genuineness of signatures, and
the legal capacity of signatories. We have assumed that all parties to the
Agreement have acted and will act in accordance with the terms of the Agreement
and all other documents relating to the transactions and that the transactions
will be consummated pursuant to the terms and conditions set forth in the
Agreement without the waiver or modification of any such terms and conditions.
Furthermore, we have assumed that all representations contained in the
Agreement, as well as those representations contained in the Representation
Letters, are, on the date hereof, true and complete in all material respects,
and that any representation made in any of the documents referred to herein "to
the best of the knowledge and belief" (or similar qualification) of any person
or party is correct without such qualification. We have also assumed that as to
all matters for which a person or entity has represented that such person or
entity is not a party to, does not have, or is not aware of, any plan,
intention, understanding, or agreement, there is no such plan, intention,
understanding, or agreement. We have not attempted to verify independently such
representations, but in the course of our representation, nothing has come to
our attention that would cause us to question the accuracy thereof.
The conclusions expressed herein represent our judgment regarding the
proper treatment of certain aspects of the transactions affecting the Acquiring
Fund, each Acquired Fund and the shareholders of each Acquired Fund on the basis
of our analysis of the Internal Revenue Code of 1986, as amended (the "Code"),
case law, Treasury regulations and the rulings and other pronouncements of the
Internal Revenue Service (the "Service") which exist at the time this opinion is
rendered. Such authorities are subject to prospective or retroactive change, and
we do not undertake any responsibility to advise you of any such change. Our
opinion represents our best judgment regarding how a court would decide if
presented with the issues addressed herein and is not binding upon the Service
or any court. Moreover, our opinion does not provide any assurance that a
position taken in reliance on such opinion will not be challenged by the Service
and does not constitute any representation or warranty that such position, if so
challenged, will not be rejected by a court.
This opinion addresses only the specific United States federal income
tax consequences of the transactions set forth below, and does not address any
other federal, state, local, or foreign income, estate, gift, transfer, sales,
or other tax consequences that may result from the transactions or any other
transactions.
OPINION
On the basis of and subject to the foregoing and in reliance upon the
representations and assumptions described above, we are of the opinion that,
with respect to each transaction:
<PAGE>
Board of Trustees
Eaton Vance Investment Trust
November 1, 1999
Page 3
(a) The acquisition by the Acquiring Fund of all of the assets of the
Acquired Fund solely in exchange for the issuance of the Acquiring Fund Shares
to the Acquired Fund and the assumption of all of the Acquired Fund Liabilities
by the Acquiring Fund, followed by the distribution by the Acquired Fund, in
liquidation of the Acquired Fund, of Acquiring Fund Shares to the Acquired Fund
shareholders in exchange for their shares of the Acquired Fund and the
termination of the Acquired Fund, will constitute a "reorganization" within the
meaning of Section 368(a) of the Code. The Acquiring Fund and the Acquired Fund
will each be "a party to a reorganization" within the meaning of Section 368(b)
of the Code.
(b) No gain or loss will be recognized by the Acquired Fund upon (i)
the transfer of all of its assets to the Acquiring Fund solely in exchange for
the issuance of Acquiring Fund Shares to the Acquired Fund and the assumption of
all of the Acquired Fund Liabilities by the Acquiring Fund and (ii) the
distribution by the Acquired Fund of such Acquiring Fund Shares to the
shareholders of the Acquired Fund (Sections 361(a) and 361(c) of the Code).
(c) No gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets of the Acquired Fund solely in exchange for the issuance
of Acquiring Fund Shares to the Acquired Fund and the assumption of all of the
Acquired Fund Liabilities by the Acquiring Fund (Section 1032(a) of the Code).
(d) The basis of the assets of the Acquired Fund acquired by the
Acquiring Fund will be, in each instance, the same as the basis of those assets
in the hands of the Acquired Fund immediately prior to the transfer (Section
362(b) of the Code).
(e) The tax holding period of the assets of the Acquired Fund in the
hands of the Acquiring Fund will, in each instance, include the Acquired Fund's
tax holding period for those assets (Section 1223(2) of the Code).
(f) The shareholders of the Acquired Fund will not recognize gain or
loss upon the exchange of all of their shares of the Acquired Fund solely for
Acquiring Fund Shares as part of the transaction (Section 354(a)(1) of the
Code).
(g) The basis of the Acquiring Fund Shares received by the Acquired
Fund shareholders in the transaction will be the same as the basis of the shares
of the Acquired Fund surrendered in exchange therefor (Section 358(a)(1) of the
Code).
(h) The tax holding period of the Acquiring Fund Shares received by
Acquired Fund shareholders will include, for each shareholder, the tax holding
period for the shares of the Acquired Fund surrendered in exchange therefor,
provided that such shares of the Acquired Fund were held as capital assets on
the date of the exchange (Section 1223(1) of the Code).
<PAGE>
Board of Trustees
Eaton Vance Investment Trust
November 1, 1999
Page 4
No opinion is expressed or implied regarding the federal income tax
consequences to the Acquiring Fund, either Acquired Fund or the shareholders of
either Acquired Fund of any conditions existing at the time of, effects
resulting from, or other aspects of the transaction except as expressly set
forth above. This opinion may not be relied upon except with respect to the
consequences specifically discussed herein nor may it be relied upon by persons
or entities to whom it is not addressed, other than with our prior written
consent.
Very truly yours,
Hale and Dorr LLP
<PAGE>
EXHIBIT (14)(A)
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Registration Statement on Form N-14 of
Eaton Vance Investment Trust (1933 Act File No. 33-1121) of our reports each
dated April 30, 1999 on the financial statements, supplementary data and
financial highlights of Eaton Vance Connecticut Limited Maturity Municipals Fund
and Connecticut Limited Maturity Municipals Portfolio included in the March 31,
1999 Annual Report to Shareholders of the Funds.
We also consent to the reference to our Firm under the heading "State
Funds Financial Highlights" in the Prospectus.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
August 23, 1999
Boston, Massachusetts
<PAGE>
EXHIBIT (14)(B)
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Registration Statement on Form N-14 of
Eaton Vance Investment Trust (1933 Act File No. 33-1121) of our reports each
dated April 30, 1999 on the financial statements, supplementary data and
financial highlights of Eaton Vance Michigan Limited Maturity Municipals Fund
and Michigan Limited Maturity Municipals Portfolio included in the March 31,
1999 Annual Report to Shareholders of the Funds.
We also consent to the reference to our Firm under the heading "State
Funds Financial Highlights" in the Prospectus.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
August 23, 1999
Boston, Massachusetts
<PAGE>
EXHIBIT (14)(C)
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Registration Statement on Form N-14 of
Eaton Vance Investment Trust (1933 Act File No. 33-1121) of our reports each
dated April 30, 1999 on the financial statements, supplementary data and
financial highlights of Eaton Vance National Limited Maturity Municipals Fund
and National Limited Maturity Municipals Portfolio included in the March 31,
1999 Annual Report to Shareholders of Eaton Vance National Limited Maturity
Municipals Fund.
We also consent to the reference to our Firm under the heading
"National Fund Financial Highlights" and "Experts" in the Prospectus.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
August 23, 1999
Boston, Massachusetts
<PAGE>
EXHIBIT (16)
POWER OF ATTORNEY
We, the undersigned officers and Trustees of Eaton Vance Investment
Trust, a Massachusetts business trust, do hereby severally constitute and
appoint Alan R. Dynner and Eric G. Woodbury, or either of them, to be true,
sufficient and lawful attorneys, or attorney for each of us, to sign for each of
us, in the name of each of us in the capacities indicated below, any and all
amendments to the Registration Statement on Form N-14 filed by Eaton Vance
Investment Trust with the Securities and Exchange Commission in respect of
shares of beneficial interest, and other documents and papers relating thereto.
IN WITNESS WHEREOF we have hereunto set our hands on the dates set
opposite our respective signatures.
Name Capacity Date
/s/ Thomas J. Fetter President and Principal August 16, 1999
Thomas J. Fetter Executive Officer
/s/ James L. O'Connor Treasurer and Principal August 16, 1999
- ----------------------- Financial and Accounting Officer
James L. O'Connor
/s/ Jessica M. Bibliowicz Trustee August 16, 1999
- -------------------------
Jessica M. Bibliowicz
/s/ Donald R. Dwight Trustee August 16, 1999
- -------------------------
Donald R. Dwight
/s/ James B. Hawkes Vice President and Trustee August 16, 1999
- -------------------------
James B. Hawkes
/s/ Samuel L. Hayes, III Trustee August 17, 1999
- --------------------------
Samuel L. Hayes, III
/s/ Norton H. Reamer Trustee August 16, 1999
- --------------------------
Norton H. Reamer
/s/ Lynn A. Stout Trustee August 16, 1999
- --------------------------
Lynn A. Stout
/s/ Jack L. Treynor Trustee August 16, 1999
- -------------------------
Jack L. Treynor
<PAGE>
Exhibit (17)
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 24, 1985
1933 Act File No. 2-
1940 Act File No. 811-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 X
PRE-EFFECTIVE AMENDMENT NO.
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 X
AMENDMENT NO.
EATON VANCE CALIFORNIA MUNICIPALS TRUST
---------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
----------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (617) 482-8260
-----------------------------------------------------------------
H. DAY BRIGHAM, JR.
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
----------------------------------------------
(NAME AND ADDRESS OF AGENT FOR SERVICE)
Approximate Date of Proposed Public Offering: AS SOON AS PRACTICABLE
AFTER THIS REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 BECOMES
EFFECTIVE.
The exhibit index required by Rule 483(a) under the Securities Act of
1933 is located on page 57 in the sequential numbering system of the manually
signed copy of this Registration Statement.
Registrant elects to register an indefinite number of shares of
beneficial interest, without par value, of its series presently existing or
hereafter created, pursuant to Rule 24f-2 under the Investment Company Act of
1940.
Registrant hereby amends the Registration Statement under the
Securities Act of 1933 on such date or dates as may be necessary to delay its
effective date until Registrant shall file a further amendment which
specifically states that such Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933 or until
such Registration Statement shall become effective on such date as the
Commission, acting pursuant to Section 8(a), may determine.
================================================================================
