EATON VANCE INVESTMENT TRUST, 485BPOS, 2000-07-24

EATON VANCE INVESTMENT TRUST
485BPOS, 2000-07-24

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<PAGE>

As filed with the Securities and Exchange Commission on July 24, 2000
1933 Act File No. 33-1121
1940 Act File No. 811-4443
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 [ ]
POST-EFFECTIVE AMENDMENT NO. 43 [x]
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 [ ]
AMENDMENT NO. 46 [x]

EATON VANCE INVESTMENT TRUST
----------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

THE EATON VANCE BUILDING, 255 STATE STREET, BOSTON, MASSACHUSETTS 02109
-----------------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

(617) 482-8260
--------------
(REGISTRANT'S TELEPHONE NUMBER)

ALAN R. DYNNER
THE EATON VANCE BUILDING, 255 STATE STREET, BOSTON, MASSACHUSETTS 02109
-----------------------------------------------------------------------
(NAME AND ADDRESS OF AGENT FOR SERVICE)

It is proposed that this filing will become effective pursuant to Rule 485
(check appropriate box):

[ ] immediately upon filing pursuant to paragraph (b)
[x] on August 1, 2000 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2)

If appropriate, check the following box:

[ ] this post effective amendment designates a new effective date for a
previously filed post-effective amendment.

California Limited Maturity Municipals Portfolio, Florida Limited Maturity
Municipals Portfolio, Massachusetts Limited Maturity Municipals Portfolio,
National 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 have also executed this Registration Statement.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

{LOGO} Mutual Funds
EATON VANCE for People
Mutual Funds Who Pay
Taxes(R)

Mutual funds seeking tax-exempt income and limited principal fluctuation

Prospectus Dated
August 1, 2000

The Securities and Exchange Commission has not approved or disapproved these
securities or determined whether this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.

Information in this prospectus

Page Page
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Fund Summaries 2 Sales Charges 15
Investment Objectives & Principal Redeeming Shares 17
Policies and Risks 12 Shareholder Account
Management and Organization 13 Features 17
Valuing Shares 14 Tax Information 18
Purchasing Shares 14 Financial Highlights 21
--------------------------------------------------------------------------------

This prospectus contains important information about the Funds and the services
available to shareholders. Please save it for reference.

<PAGE>
Fund Summaries

This section summarizes the investment objectives, and principal strategies and
risks of investing in an Eaton Vance Limited Maturity Municipals Fund. You will
find more specific information about each Fund in the pages that follow.

Investment Objectives and Principal Strategies

The investment objective of each 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 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, and interest rate swaps), bonds that donot make regular
payment of interest, bonds issued on a "when issued" basis andmunicipal
leases. A portion of each Fund's distributions generally will be
subject to alternative minimum tax.

Each 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 managers may also trade securities to minimize
taxable capital gains to shareholders. The managers attempt to limit principal
fluctuation by investing in a portfolio of obligations having a dollar weighted
average duration of between three and nine years.

Each Fund currently invests its assets in a separate registered investment
company with the same investment objective and policies as that Fund.

Principal Risk Factors

The value of Fund shares may change when interest rates change. When interest
rates rise or when the supply of suitable bonds exceeds the market demand, the
value of Fund shares typically will decline. Fund yields will also fluctuate
over time. Each Fund invests a significant portion of assets in obligations of
issuers located in a single state and 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.
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 Standard & Poor's Ratings Group ("S&P"), Moody's
Investors Service, Inc. ("Moody's") and Fitch IBCA ("Fitch") are contained in
the Fund-specific summaries that follow this page.

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. Bonds that
do not make regular interest payments may experience greater volatility in
response to interest rate changes. 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.

No Fund is a complete investment program and you may lose money by investing in
a Fund. An investment in a Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

2
<PAGE>
Eaton Vance California Limited Maturity Municipals Fund

The California Fund's investment objective is to provide a high level of current
income exempt from regular federal income taxes and California state personal
income taxes, and limited principal fluctuation. The Fund currently invests its
assets in California Limited Maturity Municipals Portfolio (the "California
Portfolio"). California general obligations currently are rated AA3, AA- and AA
by Moody's, S&P and Fitch, respectively.

Performance Information. The following bar chart and table provide information
about the California Fund's performance, including a comparison of the Fund's
performance to the performance of a national index of intermediate-maturity
municipal obligations. Although past performance is no guarantee of future
results, this performance information demonstrates the risk that the value of
your investment will change. The following returns are for Class B shares for
each calendar year through December 31, 1999 and do not reflect a sales charge.
If the sales charge was reflected, the returns would be lower.

9.30% -4.90% 10.86% 2.57% 6.35% 4.55% -4.80%
--------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998 1999

The highest quarterly total return for Class B was 4.55% for the quarter ended
March 31, 1995, and the lowest quarterly return was -3.96% for the quarter ended
March 31, 1994. The year-to-date total return through the end of the most recent
calendar quarter (December 31, 1999 to June 30, 2000) was 4.36%. For the 30 days
ended March 31, 2000, the SEC yield and SEC tax-equivalent yield (assuming a
combined state and federal tax rate of 45.22%) for Class A shares were 4.40% and
8.03%, respectively, and for Class B shares were 3.76% and 6.86%, respectively.
A lower tax rate would result in lower tax-equivalent yields. For current yield
information call 1-800-225-6265.

Average Annual Total Return One Five Life of
as of December 31, 1999 Year Years Fund
--------------------------------------------------------------------------------
Class A Shares -6.28% 3.80% 3.61%
Class B Shares -7.55% 3.77% 3.59%
Lehman Brothers 7-Year Municipal Bond Index -0.14% 6.35% 5.96%

These returns reflect the maximum sales charge for Class A (2.25%) and any
applicable CDSC for Class B. The Class A performance shown above for the period
prior to June 27, 1996 is the performance of Class B shares, adjusted for the
sales charge that applies to Class A shares (but not adjusted for any other
differences in the expenses of the two classes). Class B shares commenced
operations on May 29, 1992. Life of Fund returns are calculated from May 31,
1992. The Lehman Brothers 7-Year Municipal Bond Index is an unmanaged index of
intermediate-maturity municipal obligations. Investors cannot invest directly in
an Index. (Source for Lehman Brothers 7-Year Municipal Bond Index: Lipper Inc.)

3
<PAGE>
Eaton Vance Florida Limited Maturity Municipals Fund

The Florida Fund's investment objective is to provide a high level of current
income exempt from regular federal income taxes in the form of an investment
exempt from Florida intangibles tax, and limited principal fluctuation. The Fund
currently invests its assets in Florida Limited Maturity Municipals Portfolio
(the "Florida Portfolio"). Florida general obligations currently are rated AA2,
AA+ and AA by Moody's, S&P and Fitch, respectively.

Performance Information. The following bar chart and table provide information
about the Florida Fund's performance, including a comparison of the Fund's
performance to the performance of a national index of intermediate-maturity
municipal obligations. Although past performance is no guarantee of future
results, this performance information demonstrates the risk that the value of
your investment will change. The following returns are for Class B shares for
each calendar year through December 31, 1999 and do not reflect a sales charge.
If the sales charge was reflected, the returns would be lower.

9.94% -4.03% 10.69% 1.56% 5.12% 4.59% -3.79%
--------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998 1999

The highest quarterly total return for Class B was 4.27% for the quarter ended
March 31, 1995, and lowest quarterly return was -4.50% for the quarter ended
March 31, 1994. The year-to-date total return through the end of the most recent
calendar quarter (December 31, 1999 to June 30, 2000) was 3.20%. For the 30 days
ended March 31, 2000, the SEC yield and SEC tax-equivalent yield (assuming a
combined state and federal tax rate of 39.60%) for Class A shares were 4.38% and
7.25%, respectively, for Class B shares were 3.74% and 6.19%, respectively, and
for Class C shares were 3.74% and 6.19%, respectively. A lower tax rate would
result in lower tax-equivalent yields. For current yield information call
1-800-225-6265.

Average Annual Total Return One Five Life of
as of December 31, 1999 Year Years Fund
--------------------------------------------------------------------------------
Class A Shares -5.27% 3.57% 3.66%
Class B Shares -6.57% 3.52% 3.64%
Class C Shares -4.76% 3.44% 3.56%
Lehman Brothers 7-Year Municipal Bond Index -0.14% 6.35% 5.96%

These returns reflect the maximum sales charge for Class A (2.25%) and any
applicable CDSC for Class B and Class C. The Class A and Class C performance
shown above for the period prior to June 27, 1996 and December 8, 1993,
respectively, is the performance of Class B shares, adjusted for the sales
charge that applies to Class A and Class C shares (but not adjusted for any
other differences in the expenses of the classes). Class B shares commenced
operations on May 29, 1992. Life of Fund returns are calculated from May 31,
1992. The Lehman Brothers 7-Year Municipal Bond Index is an unmanaged index of
intermediate-maturity municipal obligations. Investors cannot invest directly in
an Index. (Source for Lehman Brothers 7-Year Municipal Bond Index: Lipper Inc.)

4
<PAGE>
Eaton Vance Massachusetts Limited Maturity Municipals Fund

The Massachusetts Fund's investment objective is to provide a high level of
current income exempt from regular federal income taxes and Massachusetts state
personal income taxes, and limited principal fluctuation. The Fund currently
invests its assets in Massachusetts Limited Maturity Municipals Portfolio (the
"Massachusetts Portfolio"). Massachusetts general obligations currently are
rated AA2, AA- and AA- by Moody's, S&P and Fitch, respectively.

Performance Information. The following bar chart and table provide information
about the Massachusetts Fund's performance, including a comparison of the Fund's
performance to the performance of a national index of intermediate-maturity
municipal obligations. Although past performance is no guarantee of future
results, this performance information demonstrates the risk that the value of
your investment will change. The following returns are for Class B shares for
each calendar year through December 31, 1999 and do not reflect a sales charge.
If the sales charge was reflected, the returns would be lower.

9.13% -3.51% 10.46% 2.12% 6.18% 4.43% -4.12%
--------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998 1999

The highest quarterly total return for Class B was 4.22% for the quarter ended
March 31, 1995, and the lowest quarterly return was -4.08% for the quarter ended
March 31, 1994. The year-to-date total return through the end of the most recent
calendar quarter (December 31, 1999 to June 30, 2000) was 2.99%. For the 30 days
ended March 31, 2000, the SEC yield and SEC tax-equivalent yield (assuming a
combined state and federal tax rate of 43.13%) for Class A shares were 4.43% and
7.79%, respectively, for Class B shares were 3.80% and 6.68%, respectively, and
for Class C shares were 3.80% and 6.68%, respectively. A lower tax rate would
result in lower tax-equivalent yields. For current yield information call
1-800-225-6265.

Average Annual Total Return One Five Life of
as of December 31, 1999 Year Years Fund
--------------------------------------------------------------------------------
Class A Shares -5.55% 3.75% 3.67%
Class B Shares -6.89% 3.70% 3.64%
Class C Shares -5.00% 3.67% 3.60%
Lehman Brothers 7-Year Municipal Bond Index -0.14% 6.35% 5.78%

These returns reflect the maximum sales charge for Class A (2.25%) and any
applicable CDSC for Class B and Class C. The Class A and Class C performance
shown above for the period prior to June 27, 1996 and December 8, 1993,
respectively, is the performance of Class B shares, adjusted for the sales
charge that applies to Class A and Class C shares (but not adjusted for any
other differences in the expenses of the classes). Class B shares commenced
operations on June 1, 1992. Life of Fund returns are calculated from June 30,
1992. The Lehman Brothers 7-Year Municipal Bond Index is an unmanaged index of
intermediate-maturity municipal obligations. Investors cannot invest directly in
an Index. (Source for Lehman Brothers 7-Year Municipal Bond Index: Lipper Inc.)

5
<PAGE>
Eaton Vance New Jersey Limited Maturity Municipals Fund

The New Jersey Fund's investment objective is to provide a high level of current
income exempt from regular federal income taxes and New Jersey state personal
income taxes, and limited principal fluctuation. The Fund currently invests its
assets in New Jersey Limited Maturity Municipals Portfolio (the "New Jersey
Portfolio"). New Jersey general obligations currently are rated AA1, AA+ and AA+
by Moody's, S&P and Fitch, respectively.

Performance Information. The following bar chart and table provide information
about the New Jersey Fund's performance, including a comparison of the Fund's
performance to the performance of a national index of intermediate-maturity
municipal obligations. Although past performance is no guarantee of future
results, this performance information demonstrates the risk that the value of
your investment will change. The following returns are for Class B shares for
each calendar year through December 31, 1999 and do not reflect a sales charge.
If the sales charge was reflected, the returns would be lower.

8.85% -3.56% 10.40% 2.31% 5.91% 3.88% -2.92%
--------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998 1999

The highest quarterly total return for Class B was 4.08% for the quarter ended
March 31, 1995, and the lowest quarterly return was -3.98% for the quarter ended
March 31, 1994. The year-to-date total return through the end of the most recent
calendar quarter (December 31, 1999 to June 30, 2000) was 3.26%. For the 30 days
ended March 31, 2000, the SEC yield and SEC tax-equivalent yield (assuming a
combined state and federal tax rate of 43.45%) for Class A shares were 4.33% and
7.66%, respectively, and for Class B shares were 3.66% and 6.47%, respectively.
A lower tax rate would result in lower tax-equivalent yields. For current yield
information call 1-800-225-6265

Average Annual Total Return One Five Life of
as of December 31, 1999 Year Years Fund
--------------------------------------------------------------------------------
Class A Shares -4.38% 3.87% 3.80%
Class B Shares -5.72% 3.82% 3.77%
Lehman Brothers 7-Year Municipal Bond Index -0.14% 6.35% 5.78%

These returns reflect the maximum sales charge for Class A (2.25%) and any
applicable CDSC for Class B. The Class A performance shown above for the period
prior to June 27, 1996 is the performance of Class B shares, adjusted for the
sales charge that applies to Class A shares (but not adjusted for any other
differences in the expenses of the two classes). Class B shares commenced
operations on June 1, 1992. Life of Fund returns are calculated from June 30,
1992. The Lehman Brothers 7-Year Municipal Bond Index is an unmanaged index of
intermediate-maturity municipal obligations. Investors cannot invest directly in
an Index. (Source of Lehman Brothers 7-Year Municipal Bond Index: Lipper Inc.)

6
<PAGE>
Eaton Vance New York Limited Maturity Municipals Fund

The New York Fund's investment objective is to provide a high level of current
income exempt from regular federal income taxes and New York state and New York
City personal income taxes, and limited principal fluctuation. The Fund
currently invests its assets in New York Limited Maturity Municipals Portfolio
(the "New York Portfolio"). New York's general obligation bonds currently are
rated A2, A+ and A+ by Moody's, S&P and Fitch, respectively. New York City's
general obligation bonds currently are rated A3, A- and A by Moody's, S&P and
Fitch, respectively.

Performance Information. The following bar chart and table provide information
about the New York Fund's performance, including a comparison of the Fund's
performance to the performance of a national index of intermediate-maturity
municipal obligations. Although past performance is no guarantee of future
results, this performance information demonstrates the risk that the value of
your investment will change. The following returns are for Class B shares for
each calendar year through December 31, 1999 and do not reflect a sales charge.
If the sales charge was reflected, the returns would be lower.

9.31% -4.24% 10.97% 2.10% 7.30% 4.70% -3.29%
--------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998 1999

The highest quarterly total return for Class B was 4.40% for the quarter ended
March 31, 1995, and the lowest quarterly return was -4.24% for the quarter ended
March 31, 1994. The year-to-date total return through the end of the most recent
calendar quarter (December 31, 1999 to June 30, 2000) was 3.85%. For the 30 days
ended March 31, 2000, the SEC yield and SEC tax-equivalent yield (assuming a
combined state and federal tax rate of 43.74%) for Class A shares were 5.01% and
8.91%, respectively, for Class B shares were 4.37% and 7.77%, respectively, and
for Class C shares were 4.37% and 7.77%, respectively. A lower tax rate would
result in lower tax-equivalent yields. For current yield information call
1-800-225-6265.

Average Annual Total Return One Five Life of
as of December 31, 1999 Year Years Fund
--------------------------------------------------------------------------------
Class A Shares -4.69% 4.29% 4.04%
Class B Shares -6.08% 4.25% 4.01%
Class C Shares -4.17% 4.20% 3.95%
Lehman Brothers 7-Year Municipal Bond Index -0.14% 6.35% 5.96%

7
<PAGE>
Eaton Vance Ohio Limited Maturity Municipals Fund

The Ohio Fund's investment objective is to provide a high level of current
income exempt from regular federal income taxes and Ohio state personal income
taxes, and limited principal fluctuation. The Fund currently invests its assets
in Ohio Limited Maturity Municipals Portfolio (the "Ohio Portfolio"). Ohio
general obligations currently are rated AA1, AA+ and AA+ by Moody's, S&P and
Fitch, respectively.

Performance Information. The following bar chart and table provide information
about the Ohio Fund's performance, including a comparison of the Fund's
performance to the performance of a national index of intermediate-maturity
municipal obligations. Although past performance is no guarantee of future
results, this performance information demonstrates the risk that the value of
your investment will change. The following returns are for Class B shares for
each calendar year through December 31, 1999 and do not reflect a sales charge.
If the sales charge was reflected, the returns would be lower.

-4.02% 10.73% 3.01% 6.16% 4.27% -3.56%
--------------------------------------------------------------------------------
1994 1995 1996 1997 1998 1999

The highest quarterly total return for Class B was 4.16% for the quarter ended
March 31, 1995, and the lowest quarterly return was -4.24% for the quarter ended
March 31, 1994. The year-to-date total return through the end of the most recent
calendar quarter (December 31, 1999 to June 30, 2000) was 2.18%. For the 30 days
ended March 31, 2000, the SEC yield and SEC tax-equivalent yield (assuming a
combined state and federal tax rate of 44.13%) for Class A shares were 4.37% and
7.82%, respectively, and for Class B shares were 3.73% and 6.68%, respectively.
A lower tax rate would result in lower tax-equivalent yields. For current yield
information call 1-800-225-6265.

Average Annual Total Return One Five Life of
as of December 31, 1999 Year Years Fund
--------------------------------------------------------------------------------
Class A Shares -4.99% 4.00% 3.20%
Class B Shares -6.34% 4.02% 3.17%
Lehman Brothers 7-Year Municipal Bond Index -0.14% 6.35% 5.26%

These returns reflect the maximum sales charge for Class A (2.25%) and any
applicable CDSC for Class B. The Class A performance shown above for the period
prior to October 22, 1996 is the performance of Class B shares, adjusted for the
sales charge that applies to Class A shares (but not adjusted for any other
differences in the expenses of the two classes). Class B shares commenced
operations on April 16, 1993. Life of Fund returns are calculated from April 30,
1993. The Lehman Brothers 7-Year Municipal Bond Index is an unmanaged index of
intermediate-maturity municipal obligations. Investors cannot invest directly in
an Index. (Source for Lehman Brothers 7-Year Municipal Bond Index: Lipper Inc.)

8
<PAGE>
Eaton Vance Pennsylvania Limited Maturity Municipals Fund

The Pennsylvania Fund's investment objective is to provide a high level of
current income exempt from regular federal income taxes and Pennsylvania state
and local taxes in the form of an investment exempt from Pennsylvania personal
property taxes, and limited principal fluctuation. The Fund currently invests
its assets in Pennsylvania Limited Maturity Municipals Portfolio (the
"Pennsylvania Portfolio"). Pennsylvania general obligations currently are rated
AA3, AA and AA by Moody's, S&P and Fitch, respectively.

Performance Information. The following bar chart and table provide information
about the Pennsylvania Fund's performance, including a comparison of the Fund's
performance to the performance of a national index of intermediate-maturity
municipal obligations. Although past performance is no guarantee of future
results, this performance information demonstrates the risk that the value of
your investment will change. The following returns are for Class B shares for
each calendar year through December 31, 1999 and do not reflect a sales charge.
If the sales charge was reflected, the returns would be lower.

9.27% -3.80% 10.34% 2.31% 7.12% 4.03% -3.54%
--------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998 1999

The highest quarterly total return for Class B was 4.08% for the quarter ended
March 31, 1995, and the lowest quarterly return was -4.20% for the quarter ended
March 31, 1994. The year-to-date total return through the end of the most recent
calendar quarter (December 31, 1999 to June 30, 2000) was 3.01%. For the 30
days ended March 31, 2000, the SEC yield and SEC tax-equivalent yield (assuming
a combined state and federal tax rate of 41.29%) for Class A shares were 4.56%
and 7.77%, respectively, for Class B shares were 3.92% and 6.68%, respectively,
and for Class C shares were 3.92% and 6.68%, respectively. A lower tax rate
would result in lower tax-equivalent yields. For current yield information call
1-800-225-6265

Average Annual Total Return One Five Life of
as of December 31, 1999 Year Years Fund
--------------------------------------------------------------------------------
Class A Shares -4.96% 3.97% 3.91%
Class B Shares -6.33% 3.95% 3.89%
Class C Shares -4.40% 3.90% 3.87%
Lehman Brothers 7-Year Municipal Bond Index -0.14% 6.35% 5.78%

These returns reflect the maximum sales charge for Class A (2.25%) and any
applicable CDSC for Class B and Class C. The Class A and Class C performance
shown above for the period prior to June 27, 1996 and December 8, 1993,
respectively, is the performance of Class B shares, adjusted for the sales
charge that applies to Class A and Class C shares (but not adjusted for any
other differences in the expenses of the classes). Class B shares commenced
operations on June 1, 1992. Life of Fund returns are calculated from June 30,
1992. The Lehman Brothers 7-Year Municipal Bond Index is an unmanaged index of
intermediate-maturity municipal obligations. Investors cannot invest directly in
an Index. (Source for Lehman Brothers 7-Year Municipal Bond Index: Lipper Inc.)

9
<PAGE>
Fund Fees and Expenses. These tables describe the fees and expenses that you may
pay if you buy and hold shares.

Shareholder Fees (fees paid directly from your investment)

Class A Class B Class C
--------------------------------------------------------------------------------
Maximum Sales Charge (Load) (as a
percentage of offering price) 2.25% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of the lower of net
asset value at time of purchase or
time of redemption) None 3.00% 1.00%
Maximum Sales Charge (Load) Imposed
on Reinvested Distributions None None None
Exchange Fee None None None

Annual Fund Operating Expenses (expenses that are deducted from Fund assets)

<TABLE>
<CAPTION>
Management Distribution and Other Total Annual Fund
Fees Service (12b-1) Fees Expenses* Operating Expenses
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
California Fund Class A shares 0.46% 0.00% 0.58% 1.04%
Class B shares 0.46% 0.90% 0.43% 1.79%
------------------------------------------------------------------------------------------------------------------
Florida Fund Class A shares 0.46% 0.00% 0.51% 0.97%
Class B shares 0.46% 0.90% 0.35% 1.71%
Class C shares 0.46% 0.90% 0.35% 1.71%
------------------------------------------------------------------------------------------------------------------
Massachusetts Fund Class A shares 0.46% 0.00% 0.48% 0.94%
Class B shares 0.46% 0.90% 0.33% 1.69%
Class C shares 0.46% 0.90% 0.33% 1.69%
------------------------------------------------------------------------------------------------------------------
New Jersey Fund Class A shares 0.47% 0.00% 0.52% 0.99%
Class B shares 0.47% 0.90% 0.37% 1.74%
------------------------------------------------------------------------------------------------------------------
New York Fund Class A shares 0.47% 0.00% 0.49% 0.96%
Class B shares 0.47% 0.90% 0.34% 1.71%
Class C shares 0.47% 0.90% 0.34% 1.71%
------------------------------------------------------------------------------------------------------------------
Ohio Fund Class A shares 0.47% 0.00% 0.61% 1.08%
Class B shares 0.47% 0.90% 0.46% 1.83%
------------------------------------------------------------------------------------------------------------------
Pennsylvania Fund Class A shares 0.47% 0.00% 0.52% 0.99%
Class B shares 0.47% 0.90% 0.37% 1.74%
Class C shares 0.47% 0.90% 0.37% 1.74%
</TABLE>
* Other Expenses for Class A of each Fund includes a service fee of 0.15%.

10
<PAGE>
Example. This Example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The Example assumes
that you invest $10,000 in the Fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The Example also assumes
that your investment has a 5% return each year and that the operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
California Fund Class A shares $329 $548 $786 $1,467
Class B shares* $482 $763 $970 $2,105
-------------------------------------------------------------------------------------------------------------------------
Florida Fund Class A shares $322 $527 $749 $1,388
Class B shares* $474 $739 $928 $2,019
Class C shares $274 $539 $928 $2,019
-------------------------------------------------------------------------------------------------------------------------
Massachusetts Fund Class A shares $319 $518 $733 $1,354
Class B shares* $472 $733 $918 $1,998
Class C shares $272 $533 $918 $1,998
-------------------------------------------------------------------------------------------------------------------------
New Jersey Fund Class A shares $324 $533 $760 $1,411
Class B shares* $477 $748 $944 $2,052
-------------------------------------------------------------------------------------------------------------------------
New York Fund Class A shares $321 $524 $744 $1,377
Class B shares* $474 $739 $928 $2,019
Class C shares $274 $539 $928 $2,019
-------------------------------------------------------------------------------------------------------------------------
Ohio Fund Class A shares $333 $561 $807 $1,513
Class B shares* $486 $776 $990 $2,148
-------------------------------------------------------------------------------------------------------------------------
Pennsylvania Fund Class A shares $324 $533 $760 $1,411
Class B shares* $477 $748 $944 $2,052
Class C shares $277 $548 $944 $2,052
</TABLE>

You would pay the following expenses if you did not redeem your shares:

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
California Fund Class A shares $329 $548 $786 $1,467
Class B shares* $182 $563 $970 $2,105
---------------------------------------------------------------------------------------------------------
Florida Fund Class A shares $322 $527 $749 $1,388
Class B shares* $174 $539 $928 $2,019
Class C shares $174 $539 $928 $2,019
---------------------------------------------------------------------------------------------------------
Massachusetts Fund Class A shares $319 $518 $733 $1,354
Class B shares* $172 $533 $918 $1,998
Class C shares $172 $533 $918 $1,998
---------------------------------------------------------------------------------------------------------
New Jersey Fund Class A shares $324 $533 $760 $1,411
Class B shares* $177 $548 $944 $2,052
---------------------------------------------------------------------------------------------------------
New York Fund Class A shares $321 $524 $744 $1,377
Class B shares* $174 $539 $928 $2,019
Class C shares $174 $539 $928 $2,019
---------------------------------------------------------------------------------------------------------
Ohio Fund Class A shares $333 $561 $807 $1,513
Class B shares* $186 $576 $990 $2,148
---------------------------------------------------------------------------------------------------------
Pennsylvania Fund Class A shares $324 $533 $760 $1,411
Class B shares* $177 $548 $944 $2,052
Class C shares $177 $548 $944 $2,052
</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.

11
<PAGE>
Investment Objectives & Principal Policies and Risks

The investment objective of each Fund is to provide a high level of current
income exempt from regular federal income tax and particular state or local
income or other taxes, and limited principal fluctuation. Each Fund seeks to
achieve its objective by investing primarily (i.e., at least 80% of its net
assets during periods of normal market conditions) in municipal obligations, the
interest on which is exempt from regular federal income tax and from the state
taxes which, in accordance with the Fund's investment objective, the Fund seeks
to avoid. This is a fundamental policy of each Fund which only may be changed
with shareholder approval. Each Fund's investment objective and certain other
policies may be changed by the Trustees without shareholder approval. Each Fund
currently seeks to meet its investment objective by investing in a separate
open-end management company (a "Portfolio") that has the same objective and
policies as the Fund.

At least 75% of net assets will normally be invested in municipal obligations
rated at least investment grade at the time of investment (which are those rated
Baa or higher by Moody's, or BBB or higher by either S&P or Fitch) or, if
unrated, determined by the investment adviser to be of at least investment grade
quality. The balance of net assets may be invested in municipal obligations
rated below investment grade and in unrated municipal obligations considered to
be of comparable quality by the investment adviser. Municipal obligations rated
Baa or BBB have speculative characteristics, while lower quality obligations are
predominantly speculative. Also, changes in economic conditions or other
circumstances are more likely to reduce the capacity of issuers of lower-rated
obligations to make principal and interest payments. Lower rated obligations
also may be subject to greater price volatility than higher rated obligations.
No Portfolio will invest more than 10% of its assets in obligations rated below
B by Moody's, S&P or Fitch, or unrated obligations considered to be of
comparable quality by the investment adviser.

Municipal obligations include bonds, notes and commercial paper issued by a
municipality for a wide variety of both public and private purposes. Municipal
obligations also include municipal leases and participations in municipal
leases. 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. Certain
municipal obligations may be purchased on a "when-issued" basis, which means
that payment and delivery occur on a future settlement date. The price and yield
of such securities are generally fixed on the date of commitment to purchase.
Many obligations permit the issuer at its option to "call", or redeem, its
securities. If an issuer calls securities during a time of declining interest
rates, it may not be possible to reinvest the proceeds in securities providing
the same investment return as the securities redeemed.

The interest on municipal obligations is (in the opinion of the issuer's
counsel) exempt from regular federal income tax. Interest income from certain
types of municipal obligations generally will be subject to the federal
alternative minimum tax (the "AMT") for individuals. Distributions to corporate
investors may also be subject to the AMT. The Funds may not be suitable for
investors subject to the AMT.

Although a Portfolio invests in obligations having a dollar weighted average
duration of between three and nine years, a Portfolio may invest in individual
municipal obligations of any maturity. Duration represents the dollar weighted
average maturity of expected cash flows (i.e., interest and principal payments)
on one or more municipal obligations, discounted to their present values. Each
Portfolio may use various techniques to shorten or lengthen its dollar weighted
average duration, including the acquisition of municipal obligations at a
premium or discount, and transactions in futures contracts and options on
futures.

Under normal conditions, each Portfolio invests at least 65% of its total assets
in obligations issued by its respective state or its political subdivisions,
agencies, authorities and instrumentalities. Municipal obligations of issuers in
a single state may be adversely affected by economic developments (including
insolvency of an issuer) and by legislation and other governmental activities in
that state. Each Portfolio may also invest in municipal obligations issued by
the governments of Puerto Rico, the U.S. Virgin Islands and Guam. Moody's
currently rates Puerto Rico general obligations Baa1, while S&P rates them A.

Each Portfolio may invest 25% or more of its total assets in municipal
obligations of the same type (such as leases, housing finance, public housing,
municipal utilities, hospital and health facilities or industrial development).
This may make a Portfolio more susceptible to adverse economic, political or
regulatory occurrences affecting a particular category of issuer.

The net asset value will change in response to changes in prevailing interest
rates and changes in the value of securities held. The value of securities held
will be affected by the credit quality of the issuer of the obligation, and
general economic and business conditions that affect the specific economic
sector of the issuer. Changes by rating agencies in the rating assigned to an
obligation may also affect the value of that obligation.

12
<PAGE>

Each Portfolio may purchase derivative instruments, which derive their value
from another instrument, security or index. For example, each Portfolio may
purchase and sell various kinds of financial futures contracts and options
thereon to hedge against changes in interest rates or as a substitute for the
purchase of portfolio securities. Each Portfolio may also enter interest rate
swaps and forward rate contracts, as well as purchase an instrument that has
greater or lesser credit risk than the municipal bonds underlying the
instrument. The use of derivative instruments for both hedging and investment
purposes involves a risk of loss or depreciation due to a variety of factors
including counterparty risk, unexpected market, interest rate or securities
price movements, and tax and regulatory constraints. Derivative hedging
transactions may not be effective because of imperfect correlations and other
factors.

Each Portfolio may invest in zero coupon bonds, which do not require the issuer
to make periodic interest payments. The values of these bonds are subject to
greater fluctuation in response to changes in market interest rates than bonds
which pay interest currently. Each Portfolio accrues income on these investments
and each Fund is required to distribute its share of Portfolio income each year.
Each Portfolio may be required to sell securities to obtain cash needed for
income distributions.

The limited liquidity of certain securities in which each Portfolio may invest
(including those eligible for resale under Rule 144A of the Securities Act of
1933) could affect their market prices, thereby adversely affecting net asset
value and the ability to pay income. The amount of publicly available
information about certain municipal obligations may be limited and the
investment performance of a Portfolio may be more dependent on the portfolio
manager's analysis than if this were not the case.

Each Portfolio may borrow amounts up to one-third of the value of its total
assets (including borrowings), but it will not borrow more than 5% of the value
of its total assets except to satisfy redemption requests or for other temporary
purposes. Such borrowings would result in increased expense to a Fund and, while
they are outstanding, would magnify increases or decreases in the value of Fund
shares. No Portfolio will purchase additional investment securities while
outstanding borrowings exceed 5% of the value of its total assets.

During unusual market conditions, each Portfolio may temporarily invest up to
50% of its total assets in cash or cash equivalents, which is not consistent
with a Fund's investment objective. While temporarily invested, a Fund may not
achieve its objective, and interest income from temporary investments may be
taxable. While at times a Portfolio may use alternative investment strategies in
an effort to limit its losses, it may choose not to do so.

The investment adviser's process for selecting securities for purchase and sale
is research intensive and emphasizes the creditworthiness of the issuer or other
person obligated to repay the obligation. The investment adviser seeks to invest
in obligations that it believes will retain their value in varying interest rate
climates.

Management and Organization

Management. Each Portfolio's investment adviser is Boston Management and
Research ("BMR"), a subsidiary of Eaton Vance Management ("Eaton Vance"), with
offices at The Eaton Vance Building, 255 State Street, Boston, Massachusetts
02109. Eaton Vance has been managing assets since 1924 and managing mutual funds
since 1931. Eaton Vance and its subsidiaries currently manage over $46 billion
on behalf of mutual funds, institutional clients and individuals.

The investment adviser manages the investments of each Portfolio and provides
related office facilities and personnel. Under its investment advisory agreement
with each Portfolio, BMR receives a monthly advisory fee equal to the aggregate
of a daily asset based fee and a daily income based fee. The fees are applied on
the basis of the following categories.

<TABLE>
Annual Daily
Category Daily Net Assets Asset Rate Income Rate
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 up to $500 million 0.300% 3.00%
2 $500 million but less than $1 billion 0.275% 2.75%
3 $1 billion but less than $1.5 billion 0.250% 2.50%
4 $1.5 billion but less than $2 billion 0.225% 2.25%
5 $2 billion but less than $3 billion 0.200% 2.00%
6 $3 billion and over 0.175% 1.75%
</TABLE>

13
<PAGE>

For the fiscal year ended March 31, 2000, each Portfolio paid advisory fees
equivalent to the percentage of average daily net assets stated below.

Net Assets on
Portfolio March 31, 2000 Advisory Fee
--------------------------------------------------------------------------------
California $22,603,762 0.46%
Florida $45,022,709 0.46%
Massachusetts $44,189,432 0.46%
New Jersey $35,120,916 0.47%
New York $51,675,171 0.47%
Ohio $19,005,054 0.47%
Pennsylvania $38,635,018 0.47%

William H. Ahern is the portfolio manager of the New Jersey Portfolio and Ohio
Portfolio (since October 1994), the Massachusetts Portfolio (since May 1, 1997),
and the New York Portfolio (since November 24, 1997). Cynthia J. Clemson is the
portfolio manager of the Florida Portfolio (since November 2, 1998), the
California Portfolio (since May 1, 1997) and the Pennsylvania Portfolio (since
January 17, 2000). Each portfolio manager also manages other Eaton Vance
portfolios, has been an Eaton Vance portfolio manager for more than 5 years, and
is a Vice President of Eaton Vance and BMR.

The investment adviser and each Fund and each Portfolio have adopted Codes of
Ethics governing personal securities transactions. Under the Codes, Eaton Vance
employees may purchase and sell securities (including securities held by a
Portfolio) subject to certain pre-clearance and reporting requirements and other
procedures.

Eaton Vance serves as administrator of each Fund, providing the Fund with
administrative services and related office facilities. Eaton Vance does not
currently receive a fee for serving as administrator.

Organization. Each Fund is a series of Eaton Vance Investment Trust, a
Massachusetts business trust. Each Fund offers multiple classes of shares. Each
Class represents a pro rata interest in the Fund, but is subject to different
expenses and rights. The Funds do not hold annual shareholder meetings, but may
hold special meetings for matters that require shareholder approval (like
electing or removing trustees, approving management contracts or changing
investment policies that may only be changed with shareholder approval). Because
a Fund invests in a Portfolio, it may be asked to vote on certain Portfolio
matters (like changes in certain Portfolio investment restrictions). When
necessary, a Fund will hold a meeting of its shareholders to consider the
Portfolio matter and then vote its interest in the Portfolio in proportion to
the votes cast by its shareholders. A Fund can withdraw from a Portfolio at any
time.

Because the Funds use this combined prospectus, a Fund could be held liable for
a misstatement or omission made about another Fund. The Trust's Trustees
considered this in approving the use of a combined prospectus.

Valuing Shares

Each Fund values its shares once each day only when the New York Stock Exchange
is open for trading (typically Monday through Friday), as of the close of
regular trading on the Exchange (normally 4:00 p.m. eastern time). The purchase
price of Fund shares is their net asset value (plus a sales charge for Class A
shares), which is derived from Portfolio holdings. Municipal obligations are
normally valued on the basis of valuations furnished by a pricing service.

When purchasing or redeeming Fund shares, your investment dealer must
communicate your order to the principal underwriter by a specific time each day
in order for the purchase price or the redemption price to be based on that
day's net asset value per share. It is the investment dealer's responsibility to
transmit orders promptly. Each Fund may accept purchase and redemption orders as
of the time of their receipt by certain investment dealers (or their designated
intermediaries).

Purchasing Shares

You may purchase shares through your investment dealer or by mailing the account
application form included in this prospectus to the transfer agent (see back
cover for address). Your initial investment must be at least $1,000. The price
of Class A shares is the net asset value plus a sales charge. The price of Class
B and Class C shares is the net asset value; however, you may be subject to a
sales charge (called a "contingent deferred sales charge" or "CDSC") if you
redeem Class B shares within four years of purchase or Class C shares within one
year of purchase. The sales charges are described below. Your investment dealer
can help you decide which Class of shares suits your investment needs.

14
<PAGE>
After your initial investment, additional investments of $50 or more may be made
at any time by sending a check payable to the order of the Fund or the transfer
agent directly to the transfer agent (see back cover for address). Please
include your name and account number and the name of the Fund and Class of
shares with each investment.

You may also make automatic investments of $50 or more each month or each
quarter from your bank account. You can establish bank automated investing on
the account application or by calling 1-800-262-1122. The minimum initial
investment amount and Fund policy of redeeming accounts with low account
balances are waived for bank automated investing accounts and certain group
purchase plans.

You may purchase Fund shares in exchange for securities. Please call
1-800-225-6265 for information about exchanging securities for Fund shares. If
you purchase shares through an investment dealer (which includes brokers,
dealers and other financial institutions), that dealer may charge you a fee for
executing the purchase for you. A Fund may suspend the sale of its shares at any
time and any purchase order may be refused.

Sales Charges

Front-End Sales Charge. Class A shares are offered at net asset value per share
plus a sales charge that is determined by the amount of your investment. The
current sales charge schedule is:

<TABLE>
Sales Charge Sales Charge Dealer Commission
as Percentage of as Percentage of as a Percentage of
Amount of Purchase Offering Price Amount Invested Offering Price
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $100,000 2.25% 2.30% 2.00%
$100,000 but less than $250,000 1.75% 1.78% 1.50%
$250,000 but less than $500,000 1.50% 1.52% 1.25%
$500,000 but less than $1,000,000 1.00% 1.01% 1.00%
$1,000,000 or more 0.00* 0.00* 1.00%
</TABLE>
*No sales charge is payable at the time of purchase of investments of $1 million
or more. A CDSC if 1.00% will be imposed on such investments (as described
below) in the event of redemptions within 24 months of purchase.

Contingent Deferred Sales Charge. Each Class of shares is subject to a CDSC on
certain redemptions. Class A shares purchased at net asset value in amounts of
$1 million or more are subject to a 1.00% CDSC if redeemed within 24 months of
purchase. Class C shares are subject to a 1.00% CDSC if redeemed within 12
months of purchase. Class B shares are subject to the following CDSC schedule:

Year of Redemption After Purchase CDSC
--------------------------------------------------------------------------------
First 3.0%
Second 2.5%
Third 2.0%
Fourth 1.0%
Fifth or following 0%

The CDSC is based on the lower of the net asset value at the time of purchase or
at the time of redemption. Shares acquired through the reinvestment of
distributions are exempt from the CDSC. Redemptions are made first from shares
that are not subject to a CDSC.

Class B Conversion Feature. After the longer of four years or the time when the
CDSC applicable to your Class B shares expires, Class B shares will
automatically convert to Class A shares. Class B shares acquired through the
reinvestment of distributions will convert in proportion to shares not so
acquired.

Reducing or Eliminating Sales Charges. Front-end sales charges on purchases of
Class A shares may be reduced under the right of accumulation or under a
statement of intention. Under the right of accumulation, the sales charges you
pay are reduced if the current market value of your current holdings (based on
the current offering price), plus your new purchases, total $100,000 or more.
Class A shares of other Eaton Vance funds owned by you can be included as part
of your current holdings for this purpose. Under a statement of intention,
purchases of $100,000 or more made over a 13-month period are eligible for
reduced sales charges. Under a statement of intention, the principal underwriter
may hold 5% of the dollar amount to be purchased in escrow in the form of shares
registered in your name until you satisfy the statement or the 13-month period
expires.

15
<PAGE>
Class A shares are offered at net asset value to clients of financial
intermediaries who charge a fee for their services; accounts affiliated with
those financial intermediaries; investment and institutional clients of Eaton
Vance; certain persons affiliated with Eaton Vance; and certain Eaton Vance and
fund service providers. Ask your investment dealer for details. Class A shares
are also sold at net asset value if the amount invested represents redemption
proceeds from a mutual fund not affiliated with Eaton Vance, provided the
redemption occurred within 60 days of the Fund share purchase and the redeemed
shares were subject to a sales charge. Class A shares so acquired will be
subject to a 0.50% CDSC if they are redeemed within 12 months of purchase.
Investment dealers will be paid a commission on such sales equal to 0.50% of the
amount invested.

CDSCs are waived for certain redemptions pursuant to a Withdrawal Plan (see
"Shareholder Account Features"). The Class B CDSC is also waived following the
death of all beneficial owners of shares, but only if the redemption is
requested within one year after death (a death certificate and other applicable
documents may be required).

If you redeem shares, you may reinvest at net asset value all or any portion of
the redemption proceeds in the same class of shares of the Fund (or, for Class A
shares, in Class A shares of any other Eaton Vance fund), provided that the
reinvestment occurs within 60 days of the redemption, and the privilege has not
been used more than once in the prior 12 months. Under these circumstances your
account will be credited with any CDSC paid in connection with the redemption.
Any CDSC period applicable to the shares you acquire upon reinvestment will run
from the date of your original share purchase. Reinvestment requests must be in
writing. If you reinvest, you will be sold shares at the next determined net
asset value following receipt of your request.

Distribution and Service Fees. Class B shares of the California, New Jersey and
Ohio Funds and Class B and Class C shares of the other Funds have in effect
plans under Rule 12b-1 that allows each Fund to pay distribution fees for the
sale and distribution of shares (so-called "12b-1 fees"). Class B and Class C
shares pay distribution fees of 0.75% of average daily net assets annually.
Because these fees are paid from Fund assets on an ongoing basis, they will
increase your cost over time and may cost you more than paying other types of
sales charges. All Classes pay service fees for personal and/or account services
equal to .15% of average daily net assets annually. Although there is no present
intention to do so, the Funds could pay service fees of up to 0.25% annually
upon Trustee approval. The principal underwriter pays commissions to investment
dealers on sales of Class B and Class C shares (except exchange transactions and
reinvestments). The sales commission on Class B shares equals 2.5% of the
purchase price of the shares. The principal underwriter compensates investment
dealers who sell Class C shares at a rate of 1.00% of the purchase price of the
shares, consisting of .85% of sales commission and .15% of service fee (for the
first year's service). After the first year, investment dealers also receive
0.75% of the value of Class C shares in annual distribution fees. After the sale
of shares, the principal underwriter receives the service fees for one year and
thereafter investment dealers receive them based on the value of shares sold by
such dealers.

The distribution fees paid by Class B and Class C shares are subject to
termination when payments under the Rule 12b-1 plans are sufficient to
extinguish uncovered distribution charges. As described more fully in the
Statement of Additional Information, uncovered distribution charges of a Class
are increased by sales commissions payable by the Class to the principal
underwriter in connection with sales of shares of that Class and by an interest
factor tied to the U.S. Prime Rate. Uncovered distribution charges are reduced
by the distribution fees paid by the Class and by CDSCs paid to the Fund by
redeeming shareholders. The amount of the sales commissions payable by Class B
to the principal underwriter in connection with sales of Class B shares is
significantly less than the maximum permitted by the sales charge rule of the
National Association of Securities Dealers, Inc. To date, neither Class B nor
Class C uncovered distribution charges have been fully covered.

16
<PAGE>
Redeeming Shares

You can redeem shares in any of the following ways:

By Mail Send your request to the transfer agent along with any
certificates and stock powers. The request must be
signed exactly as your account is registered and
signature guaranteed. You can obtain a signature
guarantee at certain banks, savings and loan
institutions, credit unions, securities dealers,
securities exchanges, clearing agencies and registered
securities associations. You may be asked to provide
additional documents if your shares are registered in
the name of a corporation, partnership or fiduciary.

By Telephone You can redeem up to $50,000 by calling the transfer
agent at 1-800-262-1122 on Monday through Friday, 9:00
a.m. to 4:00 p.m. (eastern time). Proceeds of a
telephone redemption can be mailed only to the account
address. Shares held by corporations, trusts or certain
other entities and shares that are subject to fiduciary
arrangements cannot be redeemed by telephone.

Through an
Investment
Dealer Your investment dealer is responsible for transmitting
the order promptly. An investment dealer may charge a
fee for this service.

If you redeem shares, your redemption price will be based on the net asset value
per share next computed after the redemption request is received. Your
redemption proceeds will be paid in cash within seven days, reduced by the
amount of any applicable CDSC and any federal income tax required to be
withheld. Payments will be sent by mail unless you complete the Bank Wire
Redemptions section of the account application.

If you recently purchased shares, the proceeds of a redemption will not be sent
until the purchase check (including a certified or cashier's check) has cleared.
If the purchase check has not cleared, redemption proceeds may be delayed up to
15 days from the purchase date. If your account value falls below $750 (other
than due to market decline), you may be asked to either add to your account or
redeem it within 60 days. If you take no action, your account will be redeemed
and the proceeds sent to you.

While redemption proceeds are normally paid in cash, redemptions may be paid by
distributing marketable securities. If you receive securities, you could incur
brokerage or other charges in converting the securities to cash.

Shareholder Account Features

Once you purchase shares, the transfer agent establishes a Lifetime Investing
Account(R) for you. Share certificates are issued only on request.

Distributions. You may have your Fund distributions paid in one of the following
ways:

*Full
Reinvest
Option Dividends and capital gains are reinvested in additional shares.
This option will be assigned if you do not specify an option.

*Partial
Reinvest
Option Dividends are paid in cash and capital gains are reinvested in
additional shares.

*Cash
Option Dividends and capital gains are paid in cash.

*Exchange
Option Dividends and/or capital gains are reinvested in additional
shares of another Eaton Vance fund chosen by you. Before
selecting this option, you must obtain a prospectus of the other
fund and consider its objectives and policies carefully.

Information from the Fund. From time to time, you may be mailed the following:

* Annual and Semi-Annual Reports, containing performance information and
financial statements.
* Periodic account statements, showing recent activity and total share
balance.
* Form 1099 and tax information needed to prepare your income tax
returns.
* Proxy materials, in the event a shareholder vote is required.
* Special notices about significant events affecting your Fund.

17
<PAGE>

Withdrawal Plan. You may redeem shares on a regular monthly or quarterly basis
by establishing a systematic withdrawal plan. Withdrawals will not be subject to
any applicable CDSC if they are, in the aggregate, less than or equal to 12%
annually of the greater of either the initial account balance or the current
account balance. A minimum account size of $5,000 is required to establish a
systematic withdrawal plan. Because purchases of Class A shares are generally
subject to an initial sales charge, you should not make withdrawals from your
account while you are making purchases.

Exchange Privilege. You may exchange your Fund shares for shares of the same
Class of another Eaton Vance fund. Exchanges are generally made at net asset
value. If you hold Class A shares for less than six months and exchange them for
shares subject to a higher sales charge, you will be charged the difference
between the two sales charges. If your shares are subject to a CDSC, the CDSC
will continue to apply to your new shares at the same CDSC rate. For purposes of
the CDSC, your shares will continue to age from the date of your original
purchase.

Before exchanging, you should read the prospectus of the new fund carefully. If
you wish to exchange shares, write to the transfer agent (address on back cover)
or call 1-800-262-1122. Periodic automatic exchanges are also available. The
exchange privilege may be changed or discontinued at any time. You will receive
60 days' notice of any material change to the privilege. This privilege may not
be used for "market timing". If an account (or group of accounts) makes more
than two round-trip exchanges (exchanged from one fund to another and back
again) within 12 months, it will be deemed to be market timing. The exchange
privilege may be terminated for market timing accounts.

Telephone and Electronic Transactions. You can redeem or exchange shares by
telephone as described in this prospectus. In addition, certain transactions may
be conducted through the Internet. The transfer agent and the principal
underwriter have procedures in place to authenticate telephone and electronic
instructions (such as using security codes or verifying personal account
information). As long as the transfer agent and principal underwriter follow
reasonable procedures, they will not be responsible for unauthorized telephone
or electronic transactions and you bear the risk of possible loss resulting from
these transactions. You may decline the telephone redemption option on the
account application. Telephone instructions are tape recorded.

"Street Name" Accounts. If your shares are held in a "street name" account at an
investment dealer, that dealer (and not the Fund or its transfer agent) will
perform all recordkeeping, transaction processing and distribution payments.
Because the Fund will have no record of your transactions, you should contact
your investment dealer to purchase, redeem or exchange shares, to make changes
in your account, or to obtain account information. You will not be able to
utilize a number of shareholder features, such as telephone transactions,
directly with the Fund. The transfer of shares in a "street name" account to an
account with another investment dealer or to an account directly with the Fund
involves special procedures and you will be required to obtain historical
information about your shares prior to the transfer. Before establishing a
"street name" account with an investment dealer, you should determine whether
that dealer allows reinvestment of distributions in "street name" accounts.

Account Questions. If you have any questions about your account or the services
available, please call Eaton Vance Shareholder Services at 1-800-225-6265, or
write to the transfer agent (see back cover for address).

Tax Information

Each Fund declares dividends daily and ordinarily pays distributions monthly.
Different Classes will distribute different dividend amounts. Your account will
be credited with dividends beginning on the business day after the day when the
funds used to purchase your Fund shares are collected by the transfer agent. For
tax purposes, the entire monthly distribution of the Fund's daily dividends
ordinarily will constitute tax-exempt income to you. Distributions of any net
realized gains will be made once each year (usually in December). Distributions
of any taxable income and net short-term capital gains will be taxable as
ordinary income. Distributions of any long-term capital gains are taxable as
long-term capital gains. Distributions of interest on certain municipal
obligations are a tax preference item under the AMT provisions applicable to
individuals and corporations, and all tax-exempt distributions may affect a
corporation's AMT liability. Each Fund's distributions will be treated as
described above for federal income tax purposes whether they are paid in cash or
reinvested in additional shares. A redemption of Fund shares, including an
exchange for shares of another fund, is a taxable transaction.

Shareholders, particularly corporations, recipients of social security or
railroad retirement benefits and those subject to alternative minimum tax,
should consult with their advisers concerning the applicability of state, local
and other taxes to an investment. Additional information about state taxes is
provided below.

California. Under California law, dividends paid by the California Fund and
designated by it as tax-exempt are exempt from California personal income tax on
individuals who reside in California to the extent such dividends are derived

18
<PAGE>
from interest payments on municipal obligations exempt from California state
personal income taxes and provided that at least 50% of the assets of the
California Portfolio at the close of each quarter of its taxable year are
invested in obligations the interest on which is exempt under either federal or
California law from taxation by the state of California. Distributions of
short-term capital gains are treated as ordinary income, and distributions of
long-term capital gains are treated as long-term capital gains taxable at
ordinary income rates under the California personal income tax.

Florida. The Florida statutes provide that shares of a Florida fund owned by a
Florida resident will be exempt from the Florida intangible personal property
tax as long as at least ninety percent (90%) of the net asset value of the
portfolio is invested in assets that are exempt from the Florida intangible
personal property tax. The Florida Portfolio will normally invest in tax-exempt
obligations of Florida, the United States, the U.S. Territories or political
subdivisions of the United States or Florida so Florida Fund shares should,
under normal circumstances, be exempt from the Florida intangibles tax.

Massachusetts. Based on a letter ruling from the Department of Revenue of The
Commonwealth of Massachusetts received by the Massachusetts Portfolio, the
Massachusetts Fund's interest distributions attributable to Massachusetts
obligations (debt obligations issued by The Commonwealth of Massachusetts or its
political subdivisions, including agencies or instrumentalities thereof),
Possessions obligations (the Governments of Puerto Rico, Guam, or the United
States Virgin Islands) or United States obligations can be excluded from
Massachusetts gross income for Massachusetts personal income tax purposes.
Distributions properly designated as capital gain dividends and attributable to
gains realized on the sale of certain Massachusetts tax-exempt obligations
issued pursuant to statutes that specifically exempt such gains from
Massachusetts taxation will also be exempt from Massachusetts personal income
tax. Other distributions from the Massachusetts Fund that are included in a
shareholder's federal gross income, including distributions derived from net
long-term capital gains not described in the preceding sentence and net
short-term capital gains, are generally not exempt from Massachusetts personal
income tax. However, distributions of net long-term capital gains attributable
to the sale of these investments may qualify for taxation at lower Massachusetts
personal income tax rates.

Distributions from the Massachusetts Fund and the value of the shares of the
Massachusetts Fund will be subject to the Massachusetts excise tax on
corporations.

New Jersey. The New Jersey Fund intends to satisfy New Jersey's statutory
requirements for treatment as a "Qualified Investment Fund". The Fund has
obtained an opinion of special tax counsel to the New Jersey Fund that, provided
the New Jersey Fund limits its investments to those described in this prospectus
and otherwise satisfies such statutory requirements, shareholders of the New
Jersey Fund which are individuals, estates or trusts will not be required to
include in their New Jersey gross income distributions from the New Jersey Fund
that are attributable to interest or gain realized by the New Jersey Fund from
obligations the interest on which is exempt from regular federal income tax and
is exempt from New Jersey State personal income tax or other obligations
statutorily free from New Jersey taxation. However, with regard to corporate
shareholders, such counsel is also of the opinion that distributions from the
New Jersey Fund will not be excluded from net income and shares of the New
Jersey Fund will not be excluded from investment capital in determining New
Jersey corporation business (franchise) and corporation income taxes for
corporate shareholders.

New York. In the opinion of special tax counsel to the New York Fund, under New
York law, dividends paid by the New York Fund are exempt from New York State and
New York City personal income tax applicable to individuals who reside in New
York to the extent such dividends are excluded from gross income for federal
income tax purposes and are derived from interest payments on tax-exempt
obligations issued by or on behalf of New York State and its political
subdivisions and agencies, and the governments of Puerto Rico, the U.S. Virgin
Islands and Guam. Other distributions from the New York Fund, including
distributions derived from taxable ordinary income and net short-term and
long-term capital gains, are generally not exempt from New York State or City
personal income tax.

Ohio. In the opinion of special tax counsel to the Ohio Fund, under Ohio law
individuals who are otherwise subject to the Ohio personal income tax will not
be subject to such tax on dividends paid by the Ohio Fund to the extent such
dividends are properly attributable to interest on obligations issued by or on
behalf of the State of Ohio or its political subdivisions, or the agencies or
instrumentalities thereof ("Ohio obligations"). Dividends paid by the Ohio Fund
also will be excluded from the net income base of the Ohio corporation franchise
tax to the extent such dividends are excluded from gross income for federal
income tax purposes or are properly attributable to interest on Ohio
obligations. However, the Ohio Fund's shares will be included in the tax base
for purposes of computing the Ohio corporation franchise tax on the net worth
basis. These conclusions regarding Ohio taxation are based on the assumption
that the Ohio Fund will continue to qualify as a regulated investment company
under the Code and that at all times at least 50% of the value of the total
assets of the Ohio Fund will consist of Ohio obligations or similar obligations
of other states or their subdivisions determined, to the extent the Ohio Fund
invests in the Ohio Portfolio, by treating the Ohio Fund as owning its
proportionate share of the assets owned by the Ohio Portfolio.

19
<PAGE>
Pennsylvania. Interest derived by the Pennsylvania Fund from obligations which
are statutorily free from state taxation in Pennsylvania ("Exempt Obligations")
are not taxable on pass through to shareholders for purposes of the Pennsylvania
personal income tax. The term "Exempt Obligations" includes (i) those
obligations issued by the Commonwealth of Pennsylvania and its political
subdivisions, agencies and instrumentalities, the interest from which is
statutorily free from state taxation in the Commonwealth of Pennsylvania, and
(ii) certain qualifying obligations of U.S. territories and possessions, or U.S.
Government obligations. Distributions attributable to most other sources,
including capital gains, will not be exempt from Pennsylvania personal income
tax.

Corporate shareholders that are subject to the Pennsylvania corporate net income
tax will not be subject to corporate net income tax on distributions of interest
made by the Pennsylvania Fund, provided such distributions are attributable to
Exempt Obligations. Distributions of capital gain attributable to Exempt
Obligations are subject to the Pennsylvania corporate net income tax. An
investment in the Pennsylvania Fund is also exempt from the Pennsylvania Gross
Premiums tax.

Shares of the Pennsylvania Fund which are held by individual shareholders who
are Pennsylvania residents and subject to the Pennsylvania county personal
property tax will be exempt from such tax to the extent that the obligations
held by the Pennsylvania Portfolio consist of Exempt Obligations on the annual
assessment date. Corporations are not subject to Pennsylvania personal property
taxes.

For individual shareholders who are residents of the City of Philadelphia,
distributions of interest derived from Exempt Obligations will not be taxable
for purposes of the Philadelphia School District Investment Net Income Tax
("Philadelphia School District Tax"), provided that the Pennsylvania Portfolio
reports to its investors the percentage of Exempt Obligations held by it for the
year. The Pennsylvania Portfolio will report such percentage to its investors.

20
<PAGE>
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 reflect
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 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 each Fund's
financial statements are incorporated herein by reference and included in the
annual report, which is available on request. Each Fund began offering Class A
and Class B shares in 1996. The Florida Fund, Massachusetts Fund, New York Fund
and Pennsylvania Fund began offering 3 Classes of shares on April 1, 1998.
Prior to that date, each Fund offered only Class A and B shares and Class C
existed as a separate fund.

CALIFORNIA FUND
------------------------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
------------------------------------------------------------------------------------------------------------
2000(1) 1999 1998 1997
-------------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS A CLASS B(1) CLASS A CLASS B(1) CLASS A(2) CLASS B
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value -
Beginning of year $10.350 $10.350 $ 10.330 $10.330 $ 9.980 $ 9.980 $ 9.940 $10.080
------- ------- --------- ------- ------- ------- ------- -------
Income (loss) from
operations
Net investment $ 0.440 $ 0.366 $ 0.453 $ 0.382 $ 0.459 $ 0.386 $ 0.363 $ 0.393
income
Net realized and
unrealized gain (0.640) (0.636) 0.030 0.025 0.362 0.362 0.037(3) (0.097)
(loss) ------- ------- --------- ------- ------- ------- ------- -------
Total income from
operations $(0.200) $(0.270) $ 0.483 $ 0.407 $ 0.821 $ 0.748 $ 0.400 $ 0.296
------- ------- --------- ------- ------- ------- ------- -------
Less distributions
From net investment $(0.445) $(0.368) $ (0.463) $(0.382) $(0.459) $(0.386) $(0.360) $(0.393)
income
In excess of net
investment income (0.005) (0.012) --(4) (0.005) (0.012) (0.012) -- (0.003)
------- ------- --------- ------- ------- ------- ------- -------
Total distributions $(0.450) $(0.380) $ (0.463) $(0.387) $(0.471) $(0.398) $(0.360) $(0.396)
------- ------- --------- ------- ------- ------- ------- -------
Net asset value -
End of year $ 9.700 $ 9.700 $ 10.350 $10.350 $10.330 $10.330 $ 9.980 $ 9.980
======= ======= ========= ======= ======= ======= ======= =======
Total return (1.88)% (2.58)% 4.56% 3.99% 8.56% 7.60% 3.84% 2.99%
(5)
Ratios/Supplemental
Data
Net assets, end of $20,448 $ 2,088 $ 26,170 $ 2,399 $25,780 $ 5,316 $14,718 $25,386
year (000's omitted)
Ratios (as a
percentage of
average daily net
assets):
Expenses (6) 1.04% 1.79% 0.95% 1.62% 0.96% 1.76% 0.90%(7) 1.71%
Expenses after 1.04% 1.79% 0.94% 1.61% 0.94% 1.74% 0.89%(7) 1.70%
custodian fee
reduction
(6)
Net investment 4.48% 3.73% 4.37% 3.71% 4.51% 3.76% 4.76%(7) 3.91%
income
Portfolio turnover 13% 13% 29% 29% 40% 40% 57% 57%
of the Portfolio
(8)
<CAPTION>
<PAGE>

1996
----------
CLASS B
----------------------------------
<S> <C>
Net asset value -
Beginning of year $ 9.950
-------
Income (loss) from
operations
Net investment $ 0.385
income
Net realized and
unrealized gain 0.134
(loss) -------
Total income from
operations $ 0.519
-------
Less distributions
From net investment $(0.385)
income
In excess of net
investment income (0.004)
-------
Total distributions $(0.389)
-------
Net asset value -
End of year $10.080
=======
Total return 5.27%
(5)
Ratios/Supplemental
Data
Net assets, end of $54,241
year (000's omitted)
Ratios (as a
percentage of
average daily net
assets):
Expenses (6) 1.63%
Expenses after 1.59%
custodian fee
reduction
(6)
Net investment 3.81%
income
Portfolio turnover 36%
of the Portfolio
(8)
</TABLE>
(See footnotes on last page.)

21
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
FLORIDA FUND
------------------------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
------------------------------------------------------------------------------------------------------------
2000(1) 1999(1) 1998 1997
------------------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B(1) CLASS A(2)
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value -
Beginning of year $10.270 $10.270 $ 9.710 $10.290 $10.290 $ 9.730 $ 9.980 $ 9.980 $10.030
------- ------- ------- ------- ------- ------- ------- ------- -------
Income (loss) from
operations
Net investment
income $ 0.448 $ 0.374 $ 0.354 $ 0.453 $ 0.378 $ 0.356 $ 0.465 $ 0.391 $ 0.357
Net realized and
unrealized gain
(loss) (0.597) (0.598) (0.570) (0.018) (0.018) (0.012) 0.307 0.307 (0.049)
------- ------- ------- ------- ------- ------- ------- ------- -------
Total income (loss)
from operations $(0.149) $(0.224) $(0.216) $ 0.435 $ 0.360 $ 0.344 $ 0.772 $ 0.698 $ 0.308
------- ------- ------- ------- ------- ------- ------- ------- -------
Less distributions
From net investment
income $(0.451) $(0.374) $(0.354) $(0.455) $(0.378) $(0.364) $(0.462) $(0.388) $(0.357)
In excess of net
investment income -- (0.002) -- -- (0.002) -- -- -- (0.001)
------- ------- ------- ------- ------- ------- ------- ------- -------
Total distributions $(0.451) $(0.376) $(0.354) $(0.455) $(0.380) $(0.364) $(0.462) $(0.388) $(0.358)
------- ------- ------- -------- -------- -------- ------- ------- -------
Net asset value -
End of year $ 9.670 $ 9.670 $ 9.140 $10.270 $10.270 $ 9.710 $10.290 $10.290 $ 9.980
======= ======= ======= ======== ======== ======== ======= ======= =======
Total return
(5) (1.43)% (2.17)% (2.21)% 4.10% 3.54% 3.57% 8.06% 7.08% 2.88%
Ratios/Supplemental
Data
Net assets, end of
year (000's omitted) $36,952 $ 4,907 $ 2,946 $49,355 $ 6,326 $ 3,950 $50,116 $10,612 $34,321
Ratios (as a
percentage of
average daily net
assets):
Expenses (6) 0.97% 1.71% 1.71% 0.90% 1.63% 1.66% 0.90% 1.66% 0.89%(7)
Expenses after
custodian fee
reduction
(6) 0.94% 1.68% 1.68% 0.88% 1.61% 1.64% 0.88% 1.64% 0.87%(7)
Net investment
income 4.55% 3.80% 3.80% 4.38% 3.67% 3.65% 4.61% 3.84% 4.65%(7)
Portfolio turnover
of the
Portfolio(8) 16% 16% 16% 16% 16% 16% 38% 38% 66%
<CAPTION>
<PAGE>
1996
-----------
CLASS B CLASS B
---------------------------------------------
<S> <C> <C>
Net asset value -
Beginning of year $10.170 $ 10.080
------- --------
Income (loss) from
operations
Net investment $ 0.388 $ 0.383
income
Net realized and
unrealized gain (0.185) 0.096
(loss) ------- --------
Total income (loss)
from operations $ 0.203 $ 0.479
------- --------
Less distributions
From net investment $(0.388) $ (0.383)
income
In excess of net
investment income (0.005) (0.006)
------- --------
Total distributions $(0.393) $ (0.389)
------- --------
Net asset value -
End of year $ 9.980 $ 10.170
======= ========
Total return 2.05% 4.78%
(5)
Ratios/Supplemental
Data
Net assets, end of $48,418 $116,781
year (000's omitted)
Ratios (as a
percentage of
average daily net
assets):
Expenses (6) 1.65% 1.57%
Expenses after 1.63% 1.56%
custodian fee
reduction
(6)
Net investment 3.86% 3.74%
income
Portfolio turnover 66% 20%
of the
Portfolio(8)
</TABLE>
(See footnotes on last page.)

22
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
MASSACHUSETTS FUND
----------------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
----------------------------------------------------------------------------------------------------
2000(1) 1999(1) 1998 1997
----------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B(1) CLASS A(2)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning
of year $10.320 $10.320 $ 9.860 $10.330 $10.330 $ 9.880 $ 9.990 $ 9.990 $ 9.940
------- ------- ------- -------- -------- -------- ------- ------- -------
Income (loss) from
operations
Net investment income $ 0.455 $ 0.380 $ 0.364 $ 0.450 $ 0.373 $ 0.354 $ 0.457 $ 0.384 $ 0.359
Net realized and unrealized
gain (loss) (0.648) (0.651) (0.612) (0.004) (0.005) (0.006) 0.339 0.339 0.040(3)
------- ------- ------- -------- -------- -------- ------- ------- -------
Total income (loss) from
operations $(0.193) $(0.271) $(0.248) $ 0.446 $ 0.368 $ 0.348 $ 0.796 $ 0.723 $ 0.399
------- ------- ------- -------- -------- -------- ------- ------- -------
Less distributions
From net investment income $(0.447) $(0.369) $(0.352) $(0.456) $(0.373) $(0.360) $(0.456) $(0.383) $(0.349)
In excess of net investment
income -- -- -- -- (0.005) (0.008) -- -- --
------- ------- ------- ------- ------- ------- ------- ------- -------
Total distributions $(0.447) $(0.369) $(0.352) $(0.456) $(0.378) $(0.368) $(0.456) $(0.383) $(0.349)
------- ------- ------- -------- -------- -------- ------- ------- -------
Net asset value - End of
year $ 9.680 $ 9.680 $ 9.260 $10.320 $10.320 $ 9.860 $10.330 $10.330 $ 9.990
======= ======= ======= ======== ======== ======== ======= ======= =======
Total return (5) (1.85)% (2.62)% (2.51)% 4.19% 3.60% 3.56% 8.29% 7.33% 3.83%
Ratios/Supplemental Data
Net assets, end of year
(000's omitted) $37,411 $ 2,000 $ 4,561 $43,436 $ 2,747 $ 5,217 $43,575 $ 8,451 $23,995
Ratios (as a percentage of
average daily net assets):
Expenses (6) 0.94% 1.69% 1.69% 0.94% 1.70% 1.70% 0.96% 1.70% 0.91%(7)
Expenses after custodian
fee
reduction (6) 0.91% 1.66% 1.66% 0.91% 1.67% 1.67% 0.92% 1.66% 0.89%(7)
Net investment income 4.61% 3.84% 3.87% 4.35% 3.61% 3.57% 4.53% 3.85% 4.76%(7)
Portfolio turnover of the
Portfolio(8) 15% 15% 15% 19% 19% 19% 46% 46% 60%
<CAPTION>
<PAGE>
1996
----------
CLASS B CLASS B
----------------------------------------------------
<S> <C> <C>
Net asset value - Beginning
of year $10.100 $ 9.980
------- -------
Income (loss) from
operations
Net investment income $ 0.378 $ 0.383
Net realized and unrealized
gain (loss) (0.106) 0.126
------- -------
Total income (loss) from
operations $ 0.272 $ 0.509
------- -------
Less distributions
From net investment income $(0.382) $(0.383)
In excess of net investment
income -- (0.006)
------- -------
Total distributions $(0.382) $(0.389)
------- -------
Net asset value - End of
year $ 9.990 $10.100
======= =======
Total return (5) 2.74% 5.08%
Ratios/Supplemental Data
Net assets, end of year $41,090 $91,809
(000's omitted)
Ratios (as a percentage of
average daily net assets):
Expenses (6) 1.68% 1.60%
Expenses after custodian 1.66% 1.58%
fee
reduction (6)
Net investment income 3.90% 3.71%
Portfolio turnover of the 60% 27%
Portfolio(8)
</TABLE>
(See footnotes on last page.)

23
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
NEW JERSEY FUND
------------------------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
------------------------------------------------------------------------------------------------------------
2000(1) 1999(1) 1998 1997
----------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B(1) CLASS A(2) CLASS B
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value -
Beginning of year $10.320 $10.320 $10.350 $10.350 $10.070 $10.070 $ 9.960 $10.110
------- ------- -------- -------- ------- ------- ------- -------
Income (loss) from
operations
Net investment
income $ 0.464 $ 0.388 $ 0.463 $ 0.383 $ 0.464 $ 0.391 $ 0.362 $ 0.375
Net realized and
unrealized gain
(loss) (0.540) (0.542) (0.030) (0.028) 0.279 0.279 0.102(3) (0.026)
------- ------- -------- -------- ------- ------- ------- -------
Total income (loss)
from operations $(0.076) $(0.154) $ 0.433 $ 0.355 $ 0.743 $ 0.670 $ 0.464 $ 0.349
------- ------- -------- -------- ------- ------- ------- -------
Less distributions
From net investment
income $(0.464) $(0.386) $(0.463) $(0.383) $(0.463) $(0.390) $(0.354) $(0.389)
In excess of net
investment income -- -- -- (0.002) -- -- -- --
------- ------- ------- ------- ------- ------- ------- -------
Total distributions $(0.464) $(0.386) $(0.463) $(0.385) $(0.463) $(0.390) $(0.354) $(0.389)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value -
End of year $ 9.780 $ 9.780 $10.320 $10.320 $10.350 $10.350 $10.070 $10.070
======= ======= ======== ======== ======= ======= ======= =======
Total return
(5) (0.70)% (1.48)% 4.04% 3.46% 7.69% 6.73% 4.48% 3.53%
Ratios/Supplemental
Data+
Net assets, end of
year (000's omitted) $32,710 $ 2,272 $36,591 $ 3,056 $35,879 $ 8,620 $22,230 $34,691
Ratios (as a
percentage of
average daily net
assets):
Expenses (6) 0.99% 1.74% 0.95% 1.72% 0.99% 1.72% 0.88%(7) 1.69%
Expenses after
custodian fee
reduction
(6) 0.96% 1.71% 0.95% 1.72% 0.98% 1.71% 0.85%(7) 1.66%
Net investment
income 4.68% 3.91% 4.47% 3.70% 4.56% 3.85% 4.75%(7) 3.90%
Portfolio turnover
of the
Portfolio(8) 15% 15% 13% 13% 21% 21% 37% 37%
<CAPTION>
<PAGE>
1996
----------
CLASS B
----------------------------------
<S> <C>
Net asset value -
Beginning of year $10.020
-------
Income (loss) from
operations
Net investment $ 0.383
income
Net realized and
unrealized gain 0.093
(loss) -------
Total income (loss)
from operations $ 0.476
-------
Less distributions
From net investment $(0.383)
income
In excess of net
investment income (0.003)
-------
Total distributions $(0.386)
-------
Net asset value -
End of year $10.110
=======
Total return 4.79%
(5)
Ratios/Supplemental
Data+
Net assets, end of $78,039
year (000's omitted)
Ratios (as a
percentage of
average daily net
assets):
Expenses (6) 1.60%
Expenses after 1.58%
custodian fee
reduction
(6)
Net investment 3.77%
income
Portfolio turnover 42%
of the
Portfolio(8)
</TABLE>
(See footnotes on last page.)

24
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
NEW YORK FUND
------------------------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
------------------------------------------------------------------------------------------------------------
2000(1) 1999(1) 1998
--------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B(1)
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value -
Beginning of year $10.560 $10.560 $10.000 $10.510 $10.510 $ 9.950 $10.040 $10.040
------- ------- ------- -------- -------- -------- ------- -------
Income (loss) from
operations
Net investment
income $ 0.470 $ 0.391 $ 0.364 $ 0.468 $ 0.386 $ 0.368 $ 0.461 $ 0.388
Net realized and
unrealized gain
(loss) (0.529) (0.530) (0.490) 0.047 0.050 0.053 0.470 0.470
------- ------- ------- -------- -------- -------- ------- -------
Total income (loss)
from operations $(0.059) $(0.139) $(0.126) $ 0.515 $ 0.436 $ 0.421 $ 0.931 $ 0.858
------- ------- ------- -------- -------- -------- ------- -------
Less distributions
From net investment
income $(0.471) $(0.391) $(0.364) $(0.465) $(0.386) $(0.368) $(0.461) $(0.388)
In excess of net
investment income -- -- -- -- -- (0.003) -- --
------- ------- ------- ------- ------- ------- ------- -------
Total distributions $(0.471) $(0.391) $(0.364) $(0.465) $(0.386) $(0.371) $(0.461) $(0.388)
------- ------- ------- -------- -------- -------- ------- -------
Net asset value -
End of year $10.030 $10.030 $ 9.510 $10.560 $10.560 $10.000 $10.510 $10.510
======= ======= ======= ======== ======== ======== ======= =======
Total return
(5) (0.50)% (1.29)% (1.22)% 4.78% 4.20% 4.28% 9.61% 8.65%
Ratios/Supplemental
Data
Net assets, end of
year (000's omitted) $45,773 $ 3,960 $ 1,721 $57,864 $ 5,078 $ 2,737 $59,442 $12,220
Ratios (as a
percentage of
average daily net
assets):
Expenses (6) 0.96% 1.71% 1.71% 0.91% 1.68% 1.67% 0.93% 1.70%
Expenses after
custodian fee
reduction
(6) 0.93% 1.68% 1.68% 0.91% 1.68% 1.67% 0.91% 1.68%
Net investment
income 4.63% 3.87% 3.89% 4.42% 3.67% 3.65% 4.50% 3.77%
Portfolio turnover
of the
Portfolio(8) 18% 18% 18% 17% 17% 17% 53% 53%
<CAPTION>
<PAGE>

1997 1996
---------------------------------------
CLASS A(2) CLASS B CLASS B
---------------------------------------------------------------
<S> <C> <C> <C>
Net asset value -
Beginning of year $10.000 $10.150 $ 10.030
------- ------- --------
Income (loss) from
operations
Net investment $ 0.357 $ 0.387 $ 0.374
income
Net realized and
unrealized gain 0.035(3) (0.109) 0.135
(loss) ------- ------- --------
Total income (loss)
from operations $ 0.392 $ 0.278 $ 0.509
------- ------- --------
Less distributions
From net investment $(0.352) $(0.387) $ (0.374)
income
In excess of net
investment income -- (0.001) (0.015)
------- ------- --------
Total distributions $(0.352) $(0.388) $ (0.389)
------- ------- --------
Net asset value -
End of year $10.040 $10.040 $ 10.150
======= ======= ========
Total return 3.74% 2.79% 5.12%
(5)
Ratios/Supplemental
Data
Net assets, end of $35,932 $60,097 $133,846
year (000's omitted)
Ratios (as a
percentage of
average daily net
assets):
Expenses (6) 0.88%(7) 1.63% 1.57%
Expenses after 0.86%(7) 1.61% 1.55%
custodian fee
reduction
(6)
Net investment 4.67%(7) 3.84% 3.66%
income
Portfolio turnover 58% 58% 32%
of the
Portfolio(8)
</TABLE>
(See footnotes on last page.)

25
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
OHIO FUND
----------------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
----------------------------------------------------------------------------------------------------
2000(1) 1999(1) 1998 1997
----------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B(1) CLASS A(2) CLASS B
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning
of year $10.110 $10.110 $10.140 $10.140 $ 9.820 $ 9.820 $ 9.860 $ 9.840
------- ------- -------- -------- ------- ------- ------- -------
Income (loss) from
operations
Net investment income $ 0.447 $ 0.376 $ 0.458 $ 0.386 $ 0.461 $ 0.389 $ 0.205 $ 0.408
Net realized and unrealized
gain (loss) (0.672) (0.672) (0.019) (0.023) 0.331 0.331 (0.037) (0.033)
------- ------- -------- -------- ------- ------- ------- -------
Total income (loss) from
operations $(0.225) $(0.296) $ 0.439 $ 0.363 $ 0.792 $ 0.720 $ 0.168 $ 0.375
------- ------- -------- -------- ------- ------- ------- -------
Less distributions
From net investment income $(0.447) $(0.384) $(0.453) $(0.393) $(0.461) $(0.400) $(0.205) $(0.395)
In excess of net investment
income (0.008) -- (0.016) -- (0.011) -- (0.003) --
------- ------- -------- -------- ------- ------- ------- -------
Total distributions $(0.455) $(0.384) $(0.469) $(0.393) $(0.472) $(0.400) $(0.208) $(0.395)
------- ------- -------- -------- ------- ------- ------- -------
Net asset value - End of
year $ 9.430 $ 9.430 $10.110 $10.110 $10.140 $10.140 $ 9.820 $ 9.820
======= ======= ======== ======== ======= ======= ======= =======
Total return (5) (2.22)% (2.94)% 4.19% 3.62% 8.40% 7.43% 1.51% 3.89%
Ratios/Supplemental Data
Net assets, end of year
(000's omitted) $16,761 $ 2,041 $20,375 $ 2,205 $18,114 $ 4,249 $ 952 $24,587
Ratios (as a percentage of
average daily net assets):
Expenses (6) 1.08% 1.83% 1.03% 1.75% 1.11% 1.80% 1.08%(7) 1.84%
Expenses after custodian
fee reduction (6) 1.05% 1.80% 1.00% 1.72% -- -- 1.05%(7) 1.81%
Net investment income 4.63% 3.89% 4.51% 3.79% 4.57% 3.92% 4.75%(7) 4.06%
Portfolio turnover of the
Portfolio(8) 13% 13% 19% 19% 29% 29% 34% 34%
<CAPTION>
<PAGE>
1996
----------
CLASS B
------------------------------------------
<S> <C>
Net asset value - Beginning
of year $ 9.730
-------
Income (loss) from
operations
Net investment income $ 0.398
Net realized and unrealized
gain (loss) 0.085
-------
Total income (loss) from
operations $ 0.483
-------
Less distributions
From net investment income $(0.373)
In excess of net investment
income --
-------
Total distributions $(0.373)
-------
Net asset value - End of
year $ 9.840
=======
Total return (5) 5.07%
Ratios/Supplemental Data
Net assets, end of year $29,759
(000's omitted)
Ratios (as a percentage of
average daily net assets):
Expenses (6) 1.67%
Expenses after custodian 1.65%
fee reduction (6)
Net investment income 4.04%
Portfolio turnover of the 47%
Portfolio(8)
</TABLE>
(See footnotes on last page.)

26
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
PENNSYLVANIA FUND
----------------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
----------------------------------------------------------------------------------------------------
2000(1) 1999(1) 1998
-------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B(1)
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value - Beginning
of year $10.500 $10.500 $ 9.930 $10.550 $10.550 $ 9.980 $10.100 $10.100
------- ------- ------- -------- -------- -------- ------- -------
Income (loss) from
operations
Net investment income $ 0.473 $ 0.383 $ 0.376 $ 0.477 $ 0.400 $ 0.374 $ 0.481 $ 0.407
Net realized and unrealized
gain (loss) (0.641) (0.630) (0.605) (0.051) (0.053) (0.042) 0.445 0.445
------- ------- ------- ------- -------- -------- ------- -------
Total income (loss) from
operations $(0.168) $(0.247) $(0.229) $ 0.426 $ 0.347 $ 0.332 $ 0.926 $ 0.852
------- ------- ------- -------- -------- -------- ------- -------
Less distributions
From net investment income $(0.462) $(0.383) $(0.361) $(0.476) $(0.397) $(0.382) $(0.476) $(0.402)
In excess of net investment
income -- -- -- -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- -------
Total distributions $(0.462) $(0.383) $(0.361) $(0.476) $(0.397) $(0.382) $(0.476) $(0.402)
------- ------- ------- -------- -------- -------- ------- -------
Net asset value - End of
year $ 9.870 $ 9.870 $ 9.340 $10.500 $10.500 $ 9.930 $10.550 $10.550
======= ======= ======= ======== ======== ======== ======= =======

Total return (5) (1.57)% (2.34)% (2.29)% 3.90% 3.33% 3.36% 9.52% 8.55%
Ratios/ Supplemental Data
Net assets, end of year
(000's omitted) $31,851 $ 2,423 $ 4,221 $41,048 $ 3,787 $ 5,803 $43,961 $ 8,277
Ratios (as a percentage of
average daily net assets):
Expenses (6) 0.99% 1.74% 1.74% 0.94% 1.69% 1.71% 0.97% 1.71%
Expenses after custodian
fee
reduction (6) 0.97% 1.72% 1.72% 0.92% 1.67% 1.69% 0.95% 1.69%
Net investment income 4.69% 3.93% 3.95% 4.52% 3.79% 3.74% 4.67% 3.95%
Portfolio turnover of the
Portfolio(8) 11% 11% 11% 16% 16% 16% 36% 36%
<CAPTION>
<PAGE>
1997 1996
--------------------------------------
CLASS A(2) CLASS B CLASS B
----------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value - Beginning
of year $10.030 $10.190 $10.090
------- ------- -------
Income (loss) from
operations
Net investment income $ 0.371 $ 0.392 $ 0.388
Net realized and unrealized
gain (loss) 0.063(3) (0.081) 0.110
------- ------- -------
Total income (loss) from
operations $ 0.434 $ 0.311 $ 0.498
------- ------- -------
Less distributions
From net investment income $(0.364) $(0.401) $(0.388)
In excess of net investment
income -- -- (0.010)
------- ------- -------
Total distributions $(0.364) $(0.401) $(0.398)
------- ------- -------
Net asset value - End of
year $10.100 $10.100 $10.190
======= ======= =======
Total return (5) 4.15% 3.12% 4.98%
Ratios/ Supplemental Data
Net assets, end of year $27,907 $33,971 $84,407
(000's omitted)
Ratios (as a percentage of
average daily net assets):
Expenses (6) 0.90%(7) 1.69% 1.62%
Expenses after custodian 0.88%(7) 1.67% 1.60%
fee
reduction (6)
Net investment income 4.83%(7) 4.05% 3.79%
Portfolio turnover of the 51% 51% 24%
Portfolio(8)
</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 each
Fund is as follows: June 27, 1996 for the California, Florida,
Massachusetts, New Jersey, New York and Pennsylvania Funds; and October 22,
1996 for the Ohio Fund.

(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) Annualized.

(8) Portfolio Turnover represents the rate of portfolio activity for the period
while the Funds were making investments directly in securities.

27
<PAGE>

{LOGO} Mutual Funds
EATON VANCE for People
Mutual Funds Who Pay
Taxes(R)

More Information
--------------------------------------------------------------------------------
About the Funds: More information is available in the statement of
additional information. The statement of additional information is
incorporated by reference into this prospectus. Additional information
about each Portfolio's investments is available in the annual and
semi-annual reports to shareholders. In the annual report, you will find a
discussion of the market conditions and investment strategies that
significantly affected each Fund's performance during the past year. You
may obtain free copies of the statement of additional information and the
shareholder reports by contacting:

Eaton Vance Distributors, Inc.
The Eaton Vance Building
255 State Street
Boston, MA 02109
1-800-225-6265
website: www.eatonvance.com

You will find and may copy information about each Fund (including the
statement of additional information and shareholder reports): at the
Securities and Exchange Commission's public reference room in Washington,
DC (call 1-202-942-8090 for information on the operation of the public
reference room); on the EDGAR Database on the SEC's Internet site (http://
www.sec.gov); or, upon payment of copying fees, by writing to the SEC's
public reference section, Washington, DC 20549-0102, or by electronic mail
at [email protected].

About Shareholder Accounts: You can obtain more information from Eaton
Vance Shareholder Services (1-800-225-6265). If you own shares and would
like to add to, redeem or change your account, please write or call the
transfer agent:

PFPC, Inc.
P.O. Box 9653
Providence, RI 02904-9653
1-800-262-1122
--------------------------------------------------------------------------------

The Funds' SEC File No. is 811-4443. LTDP8/1
<PAGE>

{LOGO} Mutual Funds
EATON VANCE for People
Mutual Funds Who Pay
Taxes(R)

Eaton Vance
National Limited Maturity
Municipals
Fund

A mutual fund seeking tax-exempt income and limited principal fluctuation

Prospectus Dated
August 1, 2000

Information in this prospectus
Page Page
--------------------------------------------------------------------------------
Fund Summary 2 Sales Charges 7
Investment Objective & Principal Redeeming Shares 8
Policies and Risks 4 Shareholder Account
Management and Organization 5 Features 9
Valuing Shares 6 Tax Information 10
Puchasing Shares 6 Financial Highlights 11
--------------------------------------------------------------------------------

This prospectus contains important information about the Fund and the services
available to shareholders. Please save it for reference.

<PAGE>
Fund Summary

Investment Objective and Principal Strategies. Eaton Vance National Limited
Maturity Municipals Fund's investment objective 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
and options thereon, and interest rate swaps), bonds that do not make regular
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 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.

The Fund currently invests its assets in a separate registered investment
company with the same investment objective and policies as the Fund.

Principal Risk Factors. 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. 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 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.
Bonds that do not make regular interest payments may experience greater
volatility in response to interest rate changes. 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.

The Fund is not a complete investment program and you may lose money by
investing in the Fund. An investment in the Fund is not a deposit in a bank and
is not insured or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency.

2
<PAGE>

Performance Information. The following bar chart and table provide information
about the Fund's performance, including a comparison of the Fund's performance
to the performance of a national index of intermediate-maturity municipal
obligations. Although past performance is no guarantee of future results, this
performance information demonstrates the risk that the value of your investment
will change. The following returns are for Class B shares for each calendar year
through December 31, 1999 and do not reflect a sales charge. If the sales charge
was reflected, the returns would be lower.

8.82% -3.20% 9.83% 2.36% 7.35% 4.94% -3.28%
--------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998 1999

The highest quarterly total return for Class B was 3.99% for the quarter ended
March 31, 1995, and the lowest quarterly return was -3.60% for the quarter ended
March 31, 1994. The year-to-date total return through the end of the most recent
calendar quarter (December 31, 1999 to June 30, 2000) was 1.89%. For the 30 days
ended March 31, 2000, the SEC yield and SEC tax-equivalent yield (assuming a
federal tax rate of 39.6%) for Class A shares were 4.94% and 8.18%,
respectively, for Class B shares were 4.32% and 7.15%, respectively, and for
Class C shares were 4.22% and 6.99%, respectively. A lower tax rate would result
in lower tax-equivalent yields. For current yield information call
1-800-225-6265.

Average Annual Total Return One Five Life of
as of December 31, 1999 Year Years of Fund
--------------------------------------------------------------------------------
Class A shares -4.68% 4.18% 4.26%
Class B shares -6.05% 4.14% 4.23%
Class C shares -4.25% 3.89% 4.03%
Lehman Brothers 7-Year Municipal Bond Index -0.14% 6.35% 5.96%

These returns reflect the maximum sales charge for Class A (2.25%) and any
applicable CDSC for Class B and Class C. The Class A and Class C performance
shown above for the period prior to June 27, 1996 and December 8, 1993,
respectively, is the performance of Class B shares, adjusted for the sales
charge that applies to Class A or Class C shares (but not adjusted for any other
differences in the expenses of the classes). Life of Fund returns are calculated
from May 31, 1992. The Lehman Brothers 7-Year Municipal Bond Index is a
broad-based, unmanaged market index of intermediate-maturity municipal
obligations. Investors cannot invest directly in an Index. (Source for Lehman
Brothers 7-Year Municipal Bond Index: Lipper Inc.)

Fund Fees and Expenses. These tables describe the fees and expenses that you may
pay if you buy and hold shares.

Shareholder Fees
(fees paid directly
from your investment) Class A Class B Class C
--------------------------------------------------------------------------------
Maximum Sales Charge (Load) (as
a percentage of offering price) 2.25% None None
Maximum Deferred Sales Charge
(Load)(as a percentage of the
lower of net asset value at
time of purchase or time of
redemption None 3.00% 1.00%
Maximum Sales Charge (Load)
Imposed on Reinvested
istributions None None None
Exchange Fee None None None

Annual Fund Operating Expenses
(expenses that are deducted
from Fund assets) Class A Class B Class C
--------------------------------------------------------------------------------
Management Fees 0.48% 0.48% 0.48%
Distribution and Service (12b-1) Fees 0.00% 0.90% 0.90%
Other Expenses* 0.57% 0.43% 0.42%
----- ----- -----
Total Annual Fund Operating Expenses 1.05% 1.81% 1.80%

* Other Expenses for Class A includes a service fee of 0.15%.Example. This
Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that
you invest $10,000 in the Fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The Example also
assumes that your investment has a 5% return each year and that the
operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:

<PAGE>
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------
Class A shares $ 330 $ 552 $ 791 $ 1,479
Class B shares* $ 484 $ 769 $ 980 $ 2,127
Class C shares $ 283 $ 566 $ 975 $ 2,116

You would pay the following expenses if you did not redeem your shares:

1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------
Class A shares $ 330 $ 552 $ 791 $ 1,479
Class B shares* $ 184 $ 569 $ 980 $ 2,127
Class C shares $ 183 $ 566 $ 975 $ 2,116

* 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.

3
<PAGE>
Investment Objective & Principal Policies and Risks

The investment objective of the Fund is to provide a high level of current
income exempt from regular federal income tax and limited principal fluctuation.
The Fund seeks to achieve its objective by investing primarily (i.e., at least
80% of its net assets during periods of normal market conditions) in municipal
obligations, the interest on which is exempt from regular federal income tax.
This is a fundamental policy of the Fund which only may be changed with
shareholder approval. The Fund's investment objective and certain other policies
may be changed by the Trustees without shareholder approval. The Fund currently
seeks to meet its investment objective by investing in National Limited Maturity
Municipals Portfolio (the "Portfolio"), a separate open-end management company
that has the same objective and policies as the Fund.

At least 65% of net assets will normally be invested in municipal obligations
rated at least investment grade at the time of investment (which are those rated
Baa or higher by Moody's Investors Service, Inc. ("Moody's"), or BBB or higher
by either Standard & Poor's Ratings Group ("S&P") or Fitch IBCA ("Fitch")) or,
if unrated, determined by the investment adviser to be of at least investment
grade quality. The balance of net assets may be invested in municipal
obligations rated below investment grade and in unrated municipal obligations
considered to be of comparable quality by the investment adviser. As of March
31, 2000, 26.6% of the Portfolio's net assets were invested in obligations rated
below investment grade. Municipal obligations rated Baa or BBB or below
(so-called "junk bonds") have speculative characteristics. Also, changes in
economic conditions or other circumstances are more likely to reduce the
capacity of issuers of lower-rated obligations to make principal and interest
payments. Lower rated obligations also may be subject to greater price
volatility than higher rated obligations. The Portfolio will not invest more
than 10% of its net assets in obligations rated below B by Moody's, S&P or
Fitch, or in unrated obligations considered to be of comparable quality by the
investment adviser.

The interest on municipal obligations is (in the opinion of the issuer's
counsel) exempt from regular federal income tax. Interest income from certain
types of municipal obligations generally will be subject to the federal
alternative minimum tax (the "AMT") for individuals. Distributions to corporate
investors may also be subject to the AMT. The Fund may not be suitable for
investors subject to the AMT.

Although the Portfolio invests in obligations having a dollar weighted average
duration of between three and nine years, the Portfolio may invest in individual
municipal obligations of any maturity. Duration represents the dollar weighted
average maturity of expected cash flows (i.e., interest and principal payments)
on one or more municipal obligations, discounted to their present values. The
Portfolio may use various techniques to shorten or lengthen its dollar weighted
average duration, including the acquisition of municipal obligations at a
premium or discount, and transactions in futures contracts and options on
futures.

The Portfolio may invest 25% or more of its total assets in municipal
obligations of the same type (such as leases, housing finance, public housing,
municipal utilities, hospital and health facilities or industrial development).
This may make the Portfolio more susceptible to adverse economic, political or
regulatory occurrences affecting a particular category of issuer.

The Portfolio may purchase derivative instruments, which derive their value from
another instrument, security or index. For example, the Portfolio may purchase
and sell various kinds of financial futures contracts and options thereon to
hedge against changes in interest rates or as a substitute for the purchase of
portfolio securities. The Portfolio may also enter interest rate swaps and
forward rate contracts, as well as purchase an instrument that has greater or
lesser credit risk than the municipal bonds underlying the instrument. The use
of derivative instruments for both hedging and investment purposes involves a
risk of loss or depreciation due to a variety of factors including counterparty

4
<PAGE>
risk, unexpected market, interest rate or securities price movements, and tax
and regulatory constraints. Derivative hedging transactions may not be effective
because of imperfect correlations and other factors.

The Portfolio may invest in zero coupon bonds, which do not require the issuer
to make periodic interest payments. The values of these bonds are subject to
greater fluctuation in response to changes in market interest rates than bonds
which pay interest currently. The Portfolio accrues income on these investments
and the Fund is required to distribute its share of Portfolio income each year.
The Portfolio may be required to sell securities to obtain cash needed for
income distributions.

The limited liquidity of certain securities in which the Portfolio may invest
(including those eligible for resale under Rule 144A of the Securities Act of
1933) could affect their market prices, thereby adversely affecting net asset
value and the ability to pay income. The amount of publicly available
information about certain municipal obligations may be limited and the
investment performance of the Portfolio may be more dependent on the portfolio
manager's analysis than if this were not the case.

The Portfolio may borrow amounts up to one-third of the value of its total
assets (including borrowings), but it will not borrow more than 5% of the value
of its total assets except to satisfy redemption requests or for other temporary
purposes. Such borrowings would result in increased expense to the Fund and,
while they are outstanding, would magnify increases or decreases in the value of
Fund shares. The Portfolio will not purchase additional investment securities
while outstanding borrowings exceed 5% of the value of its total assets.

During unusual market conditions, the Portfolio may temporarily invest up to 50%
of its total assets in cash or cash equivalents, which is not consistent with
the Fund's investment objective. While temporarily invested, the Fund may not
achieve its objective, and interest income from temporary investments may be
taxable. While at times the Portfolio may use alternative investment strategies
in an effort to limit its losses, it may choose not to do so.

Management and Organization

Management. The Portfolio's investment adviser is Boston Management and Research
("BMR"), a subsidiary of Eaton Vance Management ("Eaton Vance"), with offices at
The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109. Eaton
Vance has been managing assets since 1924 and managing mutual funds since 1931.
Eaton Vance and its subsidiaries currently manage over $46 billion on behalf of
mutual funds, institutional clients and individuals.

The investment adviser manages the investments of the Portfolio and provides
related office facilities and personnel. Under its investment advisory agreement
with the Portfolio, BMR receives a monthly advisory fee equal to the aggregate
of a daily asset based fee and a daily income based fee. The fees are applied on
the basis of the following categories.

<TABLE>
Annual Daily
Category Daily Net Assets Asset Rate Income Rate
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 up to $500 million 0.300% 3.00%
2 $500 million but less than $1 billion 0.275% 2.75%
3 $1 billion but less than $1.5 billion 0.250% 2.50%
4 $1.5 billion but les than $2 billion 0.225% 2.25%
5 $2 billion but less than $3 billion 0.200% 2.00%
6 $3 billion and over 0.175% 1.75%
</TABLE>

On March 31, 2000, the Portfolio had net assets of $89,936,553. For the fiscal
year ended March 31, 2000, the Portfolio paid BMR advisory fees equivalent to
0.48% of the Portfolio's average net assets for such year.

William H. Ahern, Jr. is the portfolio manager of the Portfolio (since May,
1997). He also manages other Eaton Vance portfolios, has been an Eaton Vance
portfolio manager for more than 5 years, and is a Vice President of Eaton Vance
and BMR.

The investment adviser and the Fund and the Portfolio have adopted Codes of
Ethics governing personal securities transactions. Under the Codes, Eaton Vance
employees may purchase and sell securities (including securities held by the
Portfolio) subject to certain pre-clearance and reporting requirements and other
procedures.

5
<PAGE>
Eaton Vance serves as administrator of the Fund, providing the Fund with
administrative services and related office facilities. Eaton Vance does not
currently receive a fee for serving as administrator.Organization. The Fund is a
series of Eaton Vance Investment Trust, a Massachusetts business trust. The Fund
offers multiple classes of shares. Each Class represents a pro rata interest in
the Fund, but is subject to different expenses and rights. The Fund does not
hold annual shareholder meetings, but may hold special meetings for matters that
require shareholder approval (like electing or removing trustees, approving
management contracts or changing investment policies that may only be changed
with shareholder approval). Because the Fund invests in the Portfolio, it may be
asked to vote on certain Portfolio matters (like changes in certain Portfolio
investment restrictions). When necessary, the Fund will hold a meeting of its
shareholders to consider the Portfolio matter and then vote its interest in the
Portfolio in proportion to the votes cast by its shareholders. The Fund can
withdraw from the Portfolio at any time.

Valuing Shares

The Fund values its shares once each day only when the New York Stock Exchange
is open for trading (typically Monday through Friday), as of the close of
regular trading on the Exchange (normally 4:00 p.m. eastern time). The purchase
price of Fund shares is their net asset value (plus a sales charge for Class A
shares), which is derived from Portfolio holdings. Municipal obligations are
normally valued on the basis of valuations furnished by a pricing service.

When purchasing or redeeming Fund shares, your investment dealer must
communicate your order to the principal underwriter by a specific time each day
in order for the purchase price or the redemption price to be based on that
day's net asset value per share. It is the investment dealer's responsibility to
transmit orders promptly. The Fund may accept purchase and redemption orders as
of the time of their receipt by certain investment dealers (or their designated
intermediaries).

Purchasing Shares

After your initial investment, additional investments of $50 or more may be made
at any time by sending a check payable to the order of the Fund or the transfer
agent directly to the transfer agent (see back cover for address). Please
include your name and account number and the name of the Fund and Class of
shares with each investment.

You may purchase Fund shares in exchange for securities. Please call
1-800-225-6265 for information about exchanging securities for Fund shares. If
you purchase shares through an investment dealer (which includes brokers,
dealers and other financial institutions), that dealer may charge you a fee for
executing the purchase for you. The Fund may suspend the sale of its shares at
any time and any purchase order may be refused.

6
<PAGE>
Sales Charges

Front-End Sales Charge. Class A shares are offered at net asset value per share
plus a sales charge that is determined by the amount of your investment. The
current sales charge schedule is:

<TABLE>
Sales Charge Sales Charge Dealer Commission
as Percentage of as Percentage of Net as a Percentage of
Amount of Purchase Offering Price Amount Invested Offering Price
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $100,000 2.25% 2.30% 2.00%
$100,000 but less than $250,000 1.75% 1.78% 1.50%
$250,000 but less than $500,000 1.50% 1.52% 1.25%
$500,000 but less than $1,000,000 1.00% 1.01% 1.00%
$1,000,000 or more 0.00* 0.00* 1.00%
</TABLE>

* No sales charge is payable at the time of purchase on investments of $1
million or more. A CDSC of 1.00% will be imposed on such investments (as
described below) in the event of redemptions within 24 months of purchase.

Year of Redemption After Purchase CDSC
--------------------------------------------------------------------------------
First 3.0%
Second 2.5%
Third 2.0%
Fourth 1.0%
Fifth or following 0%

Class A shares are offered at net asset value to clients of financial
intermediaries who charge a fee for their services; accounts affiliated with
those financial intermediaries; investment and institutional clients of Eaton
Vance; certain persons affiliated with Eaton Vance; and certain Eaton Vance and
fund service providers. Ask your investment dealer for details. Class A shares
are also sold at net asset value if the amount invested represents redemption
proceeds from a mutual fund not affiliated with Eaton Vance, provided the
redemption occurred within 60 days of the Fund share purchase and the redeemed
shares were subject to a sales charge. Class A shares so acquired will be
subject to a 0.50% CDSC if they are redeemed within 12 months of purchase.
Investment dealers will be paid a commission on such sales equal to 0.50% of the
amount invested.

7
<PAGE>
reinvestment occurs within 60 days of the redemption, and the privilege has not
been used more than once in the prior 12 months. Under these circumstances your
account will be credited with any CDSC paid in connection with the redemption.
Any CDSC period applicable to the shares you acquire upon reinvestment will run
from the date of your original share purchase. Reinvestment requests must be in
writing. If you reinvest, you will be sold shares at the next determined net
asset value following receipt of your request.

Distribution and Service Fees. Class B and Class C shares have in effect plans
under Rule 12b-1 that allows the Fund to pay distribution fees for the sale and
distribution of shares (so-called "12b-1 fees"). Class B and Class C shares pay
distribution fees of 0.75% of average daily net assets annually. Because these
fees are paid from Fund assets on an ongoing basis, they will increase your cost
over time and may cost you more than paying other types of sales charges. All
Classes pay service fees for personal and/or account services equal to .15% of
average daily net assets annually. Although there is no present intention to do
so, the Fund could pay service fees of up to 0.25% annually upon Trustee
approval. The principal underwriter pays commissions to investment dealers on
sales of Class B and Class C shares (except exchange transactions and
reinvestments). The sales commission on Class B shares equals 2.5% of the
purchase price of the shares. The principal underwriter compensates investment
dealers who sell Class C shares at a rate of 1.00% of the purchase price of the
shares, consisting of .85% of sales commission and .15% of service fees (for the
first year's service). After the first year, investment dealers also receive
0.75% of the value of Class C shares in annual distribution fees. After the sale
of shares, the principal underwriter receives the service fees for one year and
thereafter investment dealers receive them based on the value of shares sold
by such dealers.

Redeeming Shares

You can redeem shares in any of the following ways:

Through an
Investment
Dealer Your investment dealer is responsible for transmitting
the order promptly. An investment dealer may charge a
fee for this service.

8
<PAGE>
than due to market decline), you may be asked to either add to your account or
redeem it within 60 days. If you take no action, your account will be redeemed
and the proceeds sent to you.

Shareholder Account Features

Once you purchase shares, the transfer agent establishes a Lifetime Investing
Account(R) for you. Share certificates are issued only on request.

Distributions. You may have your Fund distributions paid in one of the following
ways:

*Full
Reinvest
Option Dividends and capital gains are reinvested in additional shares.
This option will be assigned if you do not specify an option.

*Partial
Reinvest
Option Dividends are paid in cash and capital gains are reinvested in
additional shares.

*Cash
Option Dividends and capital gains are paid in cash.

Information from the Fund. From time to time, you may be mailed the following:

9
<PAGE>
your investment dealer to purchase, redeem or exchange shares, to make changes
in your account, or to obtain account information. You will not be able to
utilize a number of shareholder features, such as telephone transactions,
directly with the Fund. The transfer of shares in a "street name" account to an
account with another investment dealer or to an account directly with the Fund
involves special procedures and you will be required to obtain historical
information about your shares prior to the transfer. Before establishing a
"street name" account with an investment dealer, you should determine whether
that dealer allows reinvestment of distributions in "street name" accounts.

Tax Information

The Fund declares dividends daily and ordinarily pays distributions monthly.
Different Classes will distribute different dividend amounts. Your account will
be credited with dividends beginning on the business day after the day when the
funds used to purchase your Fund shares are collected by the transfer agent. For
tax purposes, the entire monthly distribution of the Fund's daily dividends
ordinarily will constitute federally tax-exempt income to you. Distribution of
any net realized gains will be made once each year (usually in December).

Distributions of any taxable income and net short-term capital gains will be
taxable as ordinary income. Distributions of any long-term capital gains are
taxable as long-term capital gains. Distributions of interest on certain
municipal obligations are a tax preference item under the AMT provisions
applicable to individuals and corporations, and all tax-exempt distributions may
affect a corporation's AMT liability. The Fund's distributions will be treated
as described above for federal income tax purposes whether they are paid in cash
or reinvested in additional shares. A redemption of Fund shares, including an
exchange for shares of another fund, is a taxable transaction.

10
<PAGE>
Financial Highlights

The financial highlights are intended to help you understand the 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 represent 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 Fund's financial statements are incorporated herein by reference and
included in the annual report, which is available on request. The Fund began
offering three Class of shares on April 1, 1998. Prior to that date, the Fund
offered only Class A and Class B shares and Class C existed as a separate fund.

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
------------------------------------------------------------------------
2000 1999
------------------------------------------------------------------------
CLASS A(1) CLASS B(1) CLASS C(1) CLASS A CLASS B CLASS C
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>

Net asset value - Beginning of year $10.490 $10.490 $ 9.820 $10.580 $10.580 $ 9.920
------- ------- ------- ------- ------- -------
Income from operations
Net investment income $ 0.516 $ 0.438 $ 0.401 $ 0.519 $ 0.412 $ 0.407
Net realized and unrealized gain (loss) (0.692) (0.693) (0.651) (0.090) (0.066) (0.089)
------- ------- ------- ------- ------- -------
Total income from operations $(0.176) $(0.255) $(0.250) $ 0.429 $ 0.346 $ 0.318
------- ------- ------- ------- ------- -------
Less distributions
From net investment income $(0.524) $(0.438) $(0.400) $(0.519) $(0.436) $(0.411)
In excess of net investment income -- (0.007) (0.010) -- -- (0.007)
From net realized gain on investments -- -- -- -- -- --
------- ------- ------- ------- ------- -------
Total distributions $(0.524) $(0.445) $(0.410) $(0.519) $(0.436) $(0.418)
------- ------- ------- ------- ------- -------
Net asset value - End of year $ 9.790 $ 9.790 $ 9.160 $10.490 $10.490 $ 9.820
======= ======= ======= ======= ======= =======
Total return (4) (1.68)% (2.46)% (2.57)% 3.89% 3.29% 3.24%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) $75,081 $ 6,452 $ 7,712 $73,048 $ 5,450 $11,193
Ratios (as a percentage of average daily net
assets):
Expenses (5) 1.03% 1.81% 1.90% 0.98% 1.73% 1.81%
Expenses after custodian fee reduction (5) 1.01% 1.79% 1.88% 0.97% 1.72% 1.80%
Net investment income 5.14% 4.36% 4.26% 4.96% 4.23% 4.10%
Portfolio Turnover of the Portfolio 27% 27% 27% 26% 26% 26%
<CAPTION>
<PAGE>
1998 1997 1996
---------------------------------------------------------------
CLASS A CLASS B(1) CLASS A(2) CLASS B CLASS B
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value - Beginning of year $10.070 $10.070 $10.030 $10.170 $ 10.130
------- ------- ------- ------- --------
Income from operations
Net investment income $ 0.527 $ 0.454 $ 0.393 $ 0.428 $ 0.413
Net realized and unrealized gain (loss) 0.488 0.488 0.033(3) (0.098) 0.040
------- ------- ------- ------- --------
Total income from operations $ 1.015 $ 0.942 $ 0.426 $ 0.330 $ 0.453
------- ------- ------- ------- --------
Less distributions
From net investment income $(0.505) $(0.432) $(0.386) $(0.430) $ (0.413)
In excess of net investment income -- -- -- -- --
From net realized gain on investments -- -- -- -- --
------- ------- ------- ------- --------
Total distributions $(0.505) $(0.432) $(0.386) $(0.430) $ (0.413)
------- ------- ------- ------- --------
Net asset value - End of year $10.580 $10.580 $10.070 $10.070 $ 10.170
======= ======= ======= ======= ========
Total return (4) 10.50% 9.52% 4.06% 3.30% 4.51%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) $59,992 $11,538 $37,072 $48,692 $112,027
Ratios (as a percentage of average daily net
assets):
Expenses (5) 0.99% 1.73% 0.99%(6) 1.69% 1.64%
Expenses after custodian fee reduction (5) 0.98% 1.72% 0.97%(6) 1.67% 1.63%
Net investment income 5.16% 4.42% 5.14%(6) 4.37% 4.04%
Portfolio Turnover of the Portfolio 41% 41% 68% 68% 68%
</TABLE>

(1) Net investment income per share was computed using average shares
outstanding.
(2) For the period from the start of business, 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. 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) Annualized.

11
<PAGE>
{LOGO} Mutual Funds
EATON VANCE for People
Mutual Funds Who Pay
Taxes(R)

More Information
--------------------------------------------------------------------------------

About the Fund: More information is available in the statement of
additional information. The statement of additional information is
incorporated by reference into this prospectus. Additional information
about the Portfolio's investments is available in the annual and
semi-annual reports to shareholders. In the annual report, you will find a
discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during the past year. You may
obtain free copies of the statement of additional information and the
shareholder reports by contacting:

Eaton Vance Distributors, Inc.
The Eaton Vance Building
255 State Street
Boston, MA 02109
1-800-225-6265
website: www.eatonvance.com

You will find and may copy information about the Fund (including the
statement of additional information and shareholder reports): at the
Securities and Exchange Commission's public reference room in Washington,
DC (call 1-202-942-8090 for information on the operation of the public
reference room); on the EDGAR Database on the SEC's Internet site (http://
www.sec.gov); or, upon payment of copying fees, by writing to the SEC's
public reference section, Washington, DC 20549-0102, or by electronic mail
at [email protected].

About Shareholder Accounts: You can obtain more information from Eaton
Vance Share- holder Services (1-800-225-6265). If you own shares and would
like to add to, redeem or change your account, please write or call the
transfer agent:

PFPC, Inc.
P.O. Box 9653
Providence, RI 02904-9653
1-800-262-1122
--------------------------------------------------------------------------------

The Fund's SEC File No. is 811-4443. LNAP

12
<PAGE>

STATEMENT OF ADDITIONAL
INFORMATION
August 1, 2000

EATON VANCE CALIFORNIA LIMITED MATURITY MUNICIPALS FUND
EATON VANCE FLORIDA LIMITED MATURITY MUNICIPALS FUND
EATON VANCE MASSACHUSETTS 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
EATON VANCE PENNSYLVANIA 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 Funds listed above and their corresponding Portfolios.
Each 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 .................................................. 1
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 ....................................... 23
Financial Statements .................................................. 25

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: State Specific Information ......................................... d-1
E: Tax Equivalent Yield Tables ........................................ e-1
F: Ratings ............................................................ f-1

Although each Fund offers only its shares of beneficial interest, it is
possible that a Fund (or Class) might become liable for a misstatement or
omission in this SAI regarding another Fund (or Class) because the Funds use
this combined SAI. The Trustees of the Trust have considered this factor in
approving the use of a combined SAI.

THIS IS NOT A PROSPECTUS AND IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE
INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY THE FUNDS' PROSPECTUS DATED
AUGUST 1, 2000, AS SUPPLEMENTED FROM TIME TO TIME, WHICH IS INCORPORATED
HEREIN BY REFERENCE. THIS SAI SHOULD BE READ IN CONJUNCTION WITH THE
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 a 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, a 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 Portfolios 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. Each 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. Each 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 a Portfolio as a
result of any such event, and a 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 (or anticipated to
be in) default and assets securing such obligations.

The yields on municipal obligations will be 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.

STATE-SPECIFIC CONCENTRATION. For a discussion of the risks associated with
investing in municipal obligations of a particular state's issuers, see "Risks
of Concentration" in Appendix D. Each Portfolio may also invest a total of up
to 35% of its net assets in the obligations of Puerto Rico, the U.S. Virgin
Islands and Guam and, if consistent with a Fund's objective, certain other
territories (such as American Samoa and the N. Mariana Territories).
Accordingly, the Portfolio may be adversely affected by local political and
economic conditions and developments within Puerto Rico, the U.S. Virgin
Islands and Guam affecting the issuers of such obligations. Information about
some of these conditions and developments is included in Appendix D.

SECTOR CONCENTRATION. Each Portfolio may invest 25% or more of its total
assets 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 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.

DURATION. In pursuing its investment objective, each 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, a 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. Each 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, installment purchase
or conditional sales contract (which typically provide for the title to the
leased asset to pass to the governmental issuer) 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 each 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 a 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 a Portfolio. In the event a 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. Each
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 each
Fund is required to distribute its share of the Portfolio's income for each
taxable year. Thus, a 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 a 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. A 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 a 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, a 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 a 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 a 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.
The investment adviser may also purchase structured derivative products with
greater or lesser credit risk than the underlying bonds. Such bonds may be
rated investment grade, as well as below investment grade. For a description
of municipal bond ratings, see Appendix F.

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 a Portfolio's commitment and are subject to certain conditions such as
the issuance of satisfactory legal opinions. Each 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 a Portfolio to
buy such securities on a settlement date that could be several months or
several years in the future. Each Portfolio may also purchase instruments that
give the Portfolio the option to purchase a municipal obligation when and if
issued.

Each 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 a Portfolio
enters into the purchase commitment. When a 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 a 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 a 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 a Portfolio may
retain the bond if interest rates decline.

LIQUIDITY AND PROTECTIVE PUT OPTIONS. Each 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. Each 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 a Portfolio or that selling
institutions will be willing to permit a Portfolio to exercise a put to hedge
against rising interest rates. A 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.

INTEREST RATE SWAPS AND FORWARD RATE CONTRACTS. Interest rate swaps involve
the exchange by a Portfolio with another party of their respective commitments
to pay or receive interest, e.g., an exchange of fixed rate payments for
floating rate payments. A Portfolio will only enter into interest rate swaps
on a net basis, i.e., the two payment streams are netted out with the
Portfolio receiving or paying, as the case may be, only the net amount of the
two payments. Each Portfolio may also enter forward rate contracts. Under such
an agreement, the buyer locks in an interest rate at a future settlement date.
If the interest rate on the settlement date exceeds the lock rate, the buyer
pays the seller the difference between the two rates. If the lock rate exceeds
the interest rate on the settlement date, the seller pays the buyer the
difference between the two rates. Any such gain received by a Fund would be
taxable.

If the other party to an interest rate swap defaults, the Portfolio's risk
of loss consists of the net amount of payments that the Portfolio is
contractually entitled to receive. The net amount of the excess, if any, of a
Portfolio's obligations over its entitlements will be maintained in a
segregated account by the Portfolio's custodian. No Portfolio will enter into
any interest rate swap or forward rate contract unless the claims-paying
ability of the other party thereto is considered to be investment grade by the
investment adviser. If there is a default by the other party to such a
transaction, a Portfolio will have contractual remedies pursuant to the
agreements related to the transaction. These instruments are traded in the
over-the-counter market.

INVERSE FLOATERS. Each 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 a 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 a 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. Illiquid securities may also
include those legally restricted as to resale, and securities eligible for
resale pursuant to Rule 144A thereunder. Rule 144A securities may be treated
as liquid securities if the investment adviser determines that said treatment
is warranted. Even if determined to be liquid, holdings of these securities
may increase the level of portfolio illiquidity if eligible buyers become
uninterested in purchasing them.

The secondary market for some municipal obligations issued within a state
(including issues which are privately placed with a Portfolio) is less liquid
than that for taxable debt obligations or other more widely traded municipal
obligations. No Portfolio will own 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 a 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, a 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. Each Portfolio may seek to increase its income by lending
portfolio securities to broker-dealers or other institutional borrowers.
Distributions by a Fund of any income realized by a Portfolio from securities
loans will be taxable. If the management of a Portfolio decides to make
securities loans, it is intended that the value of the securities loaned would
not exceed 30% of a 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. Each 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 a Portfolio (or
of securities that a Portfolio expects to purchase). To hedge against changes
in rates or as a substitute for the purchase of securities, a 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 a Portfolio are traded on exchanges or boards of trade that
are licensed and regulated by the Commodity Futures Trading Commission
("CFTC") 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.

Each 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. Each 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
qualification of a Fund as a regulated investment company for federal income
tax purposes.

ASSET COVERAGE REQUIREMENTS. Transactions involving when-issued securities,
futures contracts and options (other than options that a Portfolio has
purchased), interest rate swaps or forward rate contracts may expose a
Portfolio to an obligation to another party. A 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. Each 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 a Portfolio's assets to
segregated accounts or to cover could impede portfolio management or a
Portfolio's ability to meet redemption requests or other current obligations.

TEMPORARY INVESTMENTS. Under unusual market conditions, each 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. These
securities may be subject to federal income, state income and/or other state
taxes.

DIVERSIFIED STATUS. Each Portfolio is a "diversified" investment company under
the 1940 Act. This means that with respect to 75% of its total assets (1) a
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) a 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).

PORTFOLIO TURNOVER. Each 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 a 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. A 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 a 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 each Fund are designated as
fundamental policies and as such cannot be changed without the approval of the
holders of a majority of a Fund's outstanding voting securities, which as used
in this SAI means the lesser of (a) 67% of the shares of a 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 a Fund. Accordingly, each Fund may not:

(1) Borrow money or issue senior securities except as permitted by the
1940 Act;

(2) 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;

(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 each Fund, the
Fund may invest all of its investable assets in an open-end management
investment company with substantially the same investment objective, policies
and restrictions as the Fund.

Each Portfolio has adopted substantially the same fundamental investment
restrictions as the foregoing investment restrictions adopted by each Fund;
such restrictions cannot be changed without the approval of a "majority of the
outstanding voting securities" of a Portfolio.

The Funds and the Portfolios have adopted the following investment
policies which may be changed by the Trustees with respect to a Fund without
approval by that Fund's shareholders or with respect to the Portfolio without
approval of a Fund or its other investors. Each Fund and each Portfolio will
not:

(a) engage in options, futures or forward transactions if more than 5%
of its net assets, as measured by the aggregate of the premiums paid by
the Fund or the Portfolio, would be so invested;

(b) 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 the Fund's net assets (taken at current value) is held as
collateral for such sales at any one time; or

(c) invest more than 15% of its 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.

No Fund or Portfolio will invest 25% or more of its total assets in the
securities of issuers 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, a Fund or
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. Each Fund and each Portfolio
reserve the right to invest more than 25% of total assets in each of these
sectors.

For purposes of a Portfolio's investment restrictions and diversification
status, the determination of the "issuer" of a municipal obligation which is
not a general obligation bond will be made by the Portfolio's 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 obligations.

Whenever an investment policy or investment restriction set forth in the
prospectus or 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 a Fund's or a 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 a Fund or a Portfolio,
as the case may be, to dispose of such security or other asset. Where
applicable and notwithstanding the foregoing, under normal market conditions a
Fund and a Portfolio must take actions necessary to comply with the policy of
investing at least 65% of total assets in a particular state. Moreover, each
Fund and each Portfolio must always be in compliance with the limitation on
investing in illiquid investments and the borrowing policies set forth above.

MANAGEMENT AND ORGANIZATION

FUND MANAGEMENT. The Trustees of the Trust are responsible for the overall
management and supervision of the Trust's affairs. The Trustees and officers
of the Trust and the Portfolios 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 a Portfolio, as defined in the 1940 Act, are indicated by an asterisk(*).

JESSICA M. BIBLIOWICZ (40), 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). Formerly 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 (69), 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 (58), Vice President and Trustee*
Chairman, President and Chief Executive Officer of BMR, Eaton Vance and their
corporate parent and trustee (EVC and EV); Director of EVC and EV. Trustee
and officer of various investment companies managed by Eaton Vance or BMR.

SAMUEL L. HAYES, III (65), Trustee
Jacob H. Schiff Professor of Investment Banking Emeritus, Harvard University
Graduate School of Business Administration. Trustee of the Kobrick
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 (64), Trustee
Chairman of the Board, 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 (42), 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 (70), 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 (56), President
Vice President of BMR and Eaton Vance. Officer of various investment companies
managed by Eaton Vance or BMR.

ROBERT B. MACINTOSH (43), Vice President
Vice President of BMR and Eaton Vance. Officer of various investment companies
managed by Eaton Vance or BMR.

JAMES L. O'CONNOR (55), Treasurer
Vice President of BMR and Eaton Vance. Officer of various investment companies
managed by Eaton Vance or BMR.

ALAN R. DYNNER (59), Secretary
Vice President, Secretary and Chief Legal Officer of BMR, Eaton Vance and EVC.
Prior to joining Eaton Vance on November 1, 1996, 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 (64), Assistant Secretary
Vice President of BMR and Eaton Vance. Officer of various investment companies
managed by Eaton Vance or BMR.

A. JOHN MURPHY (37), Assistant Secretary
Vice President of BMR and Eaton Vance. Officer of various investment companies
managed by Eaton Vance or BMR.

ERIC G. WOODBURY (43), Assistant Secretary
Vice President of BMR and Eaton Vance. Officer of various investment
companies managed by Eaton Vance or BMR.

In addition, William H. Ahern, Jr. (41), Vice President of Eaton Vance and
BMR, is a Vice President of the Massachusetts, New Jersey, New York and Ohio
Portfolios. Cynthia J. Clemson (37), Vice President of Eaton Vance and BMR, is
a Vice President of the California, Florida and Pennsylvania Portfolios. Mr.
Ahern and Ms. Clemson are officers of various investment companies managed by
Eaton Vance and BMR.

The Nominating Committee of the Board of Trustees of the Trust and each
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 each
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 Funds and the
Portfolios, 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 Funds, the Portfolios or investors
therein.

Messrs. Treynor (Chairman), Dwight and Reamer are members of the Audit
Committee of the Board of Trustees of the Trust and of each Portfolio. The
Audit Committee's functions include making recommendations to the Trustees
regarding the selection and performance of the independent certified public
accountants, and reviewing matters relative to accounting and auditing
practices and procedures, accounting records, and the internal accounting
controls of the Trust, the Portfolios and certain of their service providers.

Trustees of the Portfolios 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 a 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 Portfolios' assets, liabilities, and net
income per share, and will not obligate a Portfolio to retain the services of
any Trustee or obligate a Portfolio to pay any particular level of
compensation to the Trustee. Neither the Portfolios nor the Trust has a
retirement plan for its Trustees.

The fees and expenses of the noninterested Trustees of the Trust and the
Portfolios are paid by the Funds (and the other series of the Trust) and the
Portfolios, respectively. (The Trustees of the Trust and the Portfolios who
are members of the Eaton Vance organization receive no compensation from the
Trust or the Portfolios.) During the fiscal year ended March 31, 2000, the
noninterested Trustees of the Trust and the Portfolios earned the following
compensation in their capacities as Trustees from the Trust and the
Portfolios, and for the year ended December 31, 1999, earned the following
compensation in their capacities as Trustees of the funds in the Eaton Vance
fund complex(1):

<TABLE>
<CAPTION>
JESSICA M. DONALD R. SAMUEL L. NORTON H. LYNN A. JACK L.
SOURCE OF COMPENSATION BIBLIOWICZ DWIGHT(3) HAYES, III REAMER STOUT(4) TREYNOR
---------------------- ---------- --------- ---------- ------ -------- -------
<S> <C> <C> <C> <C> <C> <C>
Trust(2) $15,662 $ 12,779 $ 13,938 $ 13,370 $15,398 $ 14,945
California Portfolio 417 419 373 358 411 399
Florida Portfolio 1,245 1,426 1,490 1,394 1,443 1,486
Massachusetts Portfolio 970 1,206 1,207 1,138 1,166 1,192
New Jersey Portfolio 417 419 373 358 411 399
New York Portfolio 1,245 1,426 1,490 1,394 1,443 1,486
Ohio Portfolio 42 113 37 36 41 40
Pennsylvania Portfolio 970 1,206 1,207 1,138 1,166 1,192
Trust and Fund Complex 160,000 160,000(5) 170,000 160,000 160,000(6) 170,000

----------
(1) As of August 1, 2000, the Eaton Vance fund complex consists of 147 registered investment companies or series thereof.
(2) The Trust consisted of 8 Funds as of March 31, 2000.
(3) Includes deferred compensation as follows: California - $230; Florida - $765; Massachusetts - $642; New Jersey - $230; New York
- $760; Ohio - $67; Pennsylvania - $642.
(4) Includes deferred compensation as follows: California - $55; Florida - $207; Massachusetts - $167; New Jersey - $55; New York -
$207; Ohio - $5; Pennsylvania - $167.
(5) Includes $60,000 of deferred compensation.
(6) Includes $16,000 of deferred compensation.
</TABLE>

ORGANIZATION. Each 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. Each Fund changed its name from Eaton Vance
[state name] Limited Maturity Tax Free Fund to EV Marathon [state name]
Limited Maturity Tax Free Fund on January 7, 1994 for the California, Florida,
Massachusetts, National, New Jersey, New York and Pennsylvania Funds and on
August 1, 1994 for the Connecticut, Michigan and Ohio Funds, and then to EV
Marathon [state name] Limited Maturity Municipals Fund on October 23, 1995.
Each Fund was reorganized into multiple classes and changed its name to Eaton
Vance [state name] Limited Maturity Municipals Fund on April 1, 1998. The
operations of the Class B reflect the operations of a Fund prior to April 1,
1998. Class A and Class C are successors to the operations of 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 Funds). The
Trustees of the Trust have divided the shares of each Fund into multiple
classes. Each class represents an interest in a 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 a 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 a 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 each Fund in its corresponding 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 Portfolios, may afford the potential for economies of scale for each Fund
and may over time result in lower expenses for a 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 the 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 of 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.

Each 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 each 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 each Portfolio provides that no person shall
serve as a Trustee if investors holding two-thirds of the outstanding interest
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 a meeting.

Each Portfolio's Declaration of Trust provides that a 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 a Fund as an investor in a 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. A 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 a 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, a 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 a Fund. Notwithstanding the above, there are other means for
meeting shareholder redemption requests, such as borrowing.

A Fund may withdraw (completely redeem) all its assets from its
corresponding Portfolio at any time if the Board of Trustees of the Trust
determines that it is in the best interest of that Fund to do so. In the event
a Fund withdraws all of its assets from its corresponding 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 such Fund in another pooled investment entity or
retaining an investment adviser to manage the Fund's assets in accordance with
its investment objective. A Fund's investment performance may be affected by a
withdrawal of all its assets (or the assets of another investor in the
Portfolio) from its corresponding Portfolio.

INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES

INVESTMENT ADVISORY SERVICES. BMR manages the investments and affairs of each
Portfolio subject to the supervision of the Portfolio's Board of Trustees. BMR
furnishes to the Portfolios 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. Each 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 each Portfolio pays BMR, see
the prospectus. The following table sets forth the net assets of each
Portfolio and the advisory fees earned during the three fiscal years ended
March 31, 2000.

<TABLE>
<CAPTION>
ADVISORY FEE FOR FISCAL YEARS ENDED
NET ASSETS ----------------------------------------------------------
PORTFOLIO AT 3/31/00 MARCH 31, 2000 MARCH 31, 1999 MARCH 31, 1998
--------- ---------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
California $22,603,762 $118,479 $145,652 $178,448
Florida 45,022,709 239,631 301,844 381,588
Massachusetts 44,189,432 220,789 244,974 290,512
New Jersey 35,120,916 174,422 196,075 239,715
New York 51,675,171 268,823 319,237 402,164
Ohio 19,005,054 98,867 109,528 127,254
Pennsylvania 38,635,018 208,370 248,326 289,154
</TABLE>

Each 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. Each 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. Each Agreement
provides that BMR may render services to others. Each 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 each Fund, but currently receives no compensation for
providing administrative services to the Fund. Under its Administrative
Services Agreement with the Trust, Eaton Vance has been engaged to administer
the Funds' affairs, subject to the supervision of the Trustees of the Trust,
and shall furnish for the use of the Funds office space and all necessary
office facilities, equipment and personnel for administering the affairs of
the Funds.

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, John G.L. Cabot, Leo I. Higdon, Jr.,
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, Jeffrey P. Beale, Alan R. Dynner,
Thomas E. Faust, Jr., Thomas J. Fetter, Scott H. Page, Duncan W. Richardson,
William M. Steul, Payson F. Swaffield, Michael W. Weilheimer 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. Each Fund and Portfolio is 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, each
Fund is responsible for its pro rata share of those expenses. The only
expenses of a Fund allocated to a particular class are those incurred under
the Distribution or Service Plan applicable to that class and the fee paid to
the principal underwriter for handling repurchase transactions.

OTHER SERVICE PROVIDERS

PRINCIPAL UNDERWRITER. Eaton Vance Distributors, Inc. ("EVD"), The Eaton Vance
Building, 255 State Street, Boston, MA 02109, is the Funds' 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
a Fund and its shares under federal and state securities laws are borne by
that 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 Funds and Portfolios. IBT has the
custody of all cash and securities representing a Fund's interest in a
Portfolio, has custody of each Portfolio's assets, maintains the general
ledger of each Portfolio and each Fund and computes the daily net asset value
of interests in each 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 Portfolios' investments,
receives and disburses all funds and performs various other ministerial duties
upon receipt of proper instructions from the Trust and the Portfolios. 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,
Massachusetts 02116, are the independent auditors of the Funds and the
Portfolios, providing audit services, tax return preparation, and assistance
and consultation with respect to the preparation of filings with the SEC.

TRANSFER AGENT. PFPC, Inc., P.O. Box 9653, Providence, RI 02904-9653, serves
as transfer and dividend disbursing agent for the Funds.

PURCHASING AND REDEEMING SHARES

CALCULATION OF NET ASSET VALUE. The net asset value of each 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 Funds and the Portfolios 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 a Portfolio, including a Fund, may add to or reduce its
investment in the Portfolio on each day the New York Stock Exchange (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 offered for sale only
in states where they are registered. 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 a 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 Plan 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 minimum 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 a 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 a 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 a Fund, either totally or
partially, by a distribution in kind of readily marketable securities
withdrawn from its corresponding 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
Portfolios; 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, consulting firms and others 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 a 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.

The CDSC applicable to Class B shares will be waived in connection with
minimum required distributions from tax-sheltered retirement plans by applying
the rate required to be withdrawn under the applicable rules and regulations
of the Internal Revenue Service to the balance of Class B shares in your
account. All CDSC waivers are prospective only.

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, the Statement of
Intention section of the account application should be completed 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. If you make a Statement of Intention,
the transfer agent is authorized 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. A Statement of Intention does not obligate the
shareholder to purchase or the Fund to sell the full amount indicated in the
Statement.

If the amount actually purchased during the 13-month period is less than
that indicated in the Statement, the shareholder will be requested to pay the
difference between the sales charge applicable to the shares purchased and the
sales charge paid under the Statement of Intention. If the payment is not
received in 20 days, the appropriate number of escrowed shares will be
redeemed in order to realize such difference. If the total purchases during
the 13-month period are large enough to qualify for a lower sales charge than
that applicable to the amount specified in the Statement, all transactions
will be computed at the expiration date of the Statement to give effect to the
lower sales charge. Any difference will be refunded to the shareholder in cash
or applied to the purchase of additional shares, as specified by the
shareholder. This refund will be made by the investment dealer and the
principal underwriter. If at the time of the recomputation, the investment
dealer for the account has changed, the adjustment will be made only on those
shares purchased through the current investment dealer for the account.

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.

EXCHANGE PRIVILEGE. In addition to exchanges into the same class of another
Eaton Vance fund, Class B shares may be exchanged for shares of a money market
fund sponsored by an investment dealer and approved by the principal
underwriter (an "investment dealer fund"). For purposes of calculating the
CDSC applicable to investment dealer fund shares acquired in an exchange, the
CDSC schedule applicable to the exchanged shares will apply and the purchase
of investment dealer fund shares is deemed to have occurred at the time of the
original purchase of the exchanged shares, except that the time during which a
shareholder holds such investment dealer fund shares will not be credited
toward completion of the CDSC period.

CLASS B CONVERSION. 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 in effect a Service Plan (the
"Class A Plan") for each 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 each 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. For
the service fees paid by Class A shares, see Appendix A.

The Trust also has in effect compensation-type Distribution Plans ("Class
B and Class C Plans") pursuant to Rule 12b-1 under the 1940 Act for each
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 each Fund will pay sales commissions
and distribution fees to the principal underwriter only after and as a result
of the sale of shares. On each sale of shares (excluding reinvestment of
distributions), each Fund will pay the principal underwriter amounts
representing (i) sales commissions equal to 3% in the case of California,
Florida, Massachusetts, New Jersey, New York and Pennsylvania Funds and 3.5%
in the case of the Ohio Fund of Class B sales and 6.25% of Class C sales 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 2.5% 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.

Currently, payments of sales commissions and distribution fees and of
service fees may equal .90% 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 or 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 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 who are "interested" persons of the Funds have an indirect financial
interest in the Plans because their employers (or affiliates thereof) receive
distribution and or service fees under the Plans or agreements related
thereto.

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 a
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 results. 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 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. Each
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 further information concerning the total return
of the Classes of a Fund, see Appendix A, Appendix B and Appendix C.

Yield is computed separately for each Class of a Fund pursuant to a
standardized formula by dividing the 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 upon certain
redemptions at the rates set forth under "Sales Charges" in the prospectus.
Yield calculations assume the current maximum initial 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.

Each 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 ratings, or other information prepared by
recognized mutual fund statistical services. A Fund's performance may differ
from that of other investors in its corresponding 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, 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 a 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 a 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 a 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 mutual fund 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 a
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 a 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 a 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. Each Fund has elected to be treated and intends to
qualify each year, as a regulated investment company ("RIC") under the Code.
Accordingly, each Fund intends to satisfy certain requirements relating to
sources of its income and diversification of its assets and to distribute
substantially all of its net income (including tax-exempt income) and net
short-term and long-term capital gains (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. Each Fund so qualified for its fiscal year ended March
31, 2000.

Because each Fund invests its assets in a Portfolio, the Portfolio
normally must satisfy the applicable source of income and diversification
requirements in order for the Fund to also satisfy these requirements. Each
Portfolio will allocate at least annually among its investors, including a
Fund, 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, each Fund (i) will be deemed to own its
proportionate share of each of the assets of the corresponding Portfolio and
(ii) will be entitled to the gross income of that Portfolio attributable to
such share.

In order to avoid incurring a federal excise tax obligation, the Code
requires that each Fund distribute (or be deemed to have distributed) by
December 31 of each calendar year (i) at least 98% of its ordinary income (not
including tax-exempt income) for such year, (ii) 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 any available
capital loss carryforwards and (iii) 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 a Fund
qualifies as a RIC and a 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.

If a Fund does not qualify for taxation as a RIC for any taxable year, the
Fund's taxable income will be subject to corporate income taxes, and all
distributions from earnings and profits, including distributions of net
capital gain (if any), will be taxable to shareholders as ordinary income. In
addition, in order to requalify for taxation as a RIC, the Fund may be
required to recognize unrealized gains, pay substantial taxes and interest,
and make certain distributions.

Investment in securities acquired at market discount may, and zero coupon
and certain other securities generally will cause the Portfolio 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 relevant Fund to distribute its proportionate share of
this income and avoid a tax payable by the Fund, the Portfolio may be required
to liquidate securities that it might otherwise have continued to hold in
order to generate cash that the Fund may withdraw from the Portfolio for
subsequent distribution to Fund shareholders.

Investments in lower-rated or unrated securities may present special tax
issues for a Portfolio (and, hence, for the relevant 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 a Portfolio taking certain positions in connection with
ownership of such distressed securities. For example, the Code is unclear
regarding: (i) when a 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 a 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 a Fund to be entitled to pay the tax-exempt interest
income allocated to it by its corresponding 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. In addition, corporate shareholders must include the full amount of
exempt-interest-dividends in computing the preference items for purposes of
the AMT. Shareholders of the Fund are required to report tax-exempt interest
on their federal income tax returns.

Tax-exempt distributions received from a Fund are taken into account in
determining, and may increase, the portion of social security and certain
railroad retirement benefits that may be subject to federal income tax.

Interest on indebtedness incurred or continued by a shareholder to
purchase or carry shares of a Fund is not deductible if the Fund distributes
exempt-interest dividends to the shareholder during the taxable year. Further,
exempt-interest dividends, if any, attributable to interest received on
certain private activity obligations and certain industrial development bonds
will not be tax-exempt to any shareholders who are "substantial users" of the
facilities financed by such obligations or bonds or who are "related persons"
of such substantial users. Persons who are "substantial users" (or persons
related to "substantial users") of facilities financed by industrial
development or private activity bonds should consult their tax advisers before
purchasing shares of a Fund. "Substantial user" is defined in applicable
Treasury regulations to include a "non-exempt person" who regularly uses in
his trade or business a part of a facility financed from the proceeds of
industrial development bonds, and the same definition should apply in the case
of private activity bonds. Any gain attributable to market discount of certain
tax-exempt obligations purchased after April 30, 1993 is taxable as ordinary
income.

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
a Portfolio and the value of the securities held by it may be affected.

In the course of managing its investments, a Portfolio may realize some
short-term and long-term capital gains (and/or losses) as a result of market
transactions. A 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 as
well as from other investments. Any distributions by a Fund of its share of
such capital gains (after reduction by any capital loss carryforwards) or
other 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 corresponding 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.

A Portfolio's investments in options, futures contracts, hedging
transactions, forward contracts and certain other transactions will be subject
to special tax rules (including mark-to-market, constructive sale, straddle,
wash sale, short sale and other rules), the effect of which may be to
accelerate income to the Portfolio, defer Portfolio losses, cause adjustments
in the holding periods of Portfolio securities, convert capital gain into
ordinary income and convert short-term capital losses into long-term capital
losses. These rules could therefore affect the amount, timing and character of
distributions to shareholders.

Any loss realized upon the sale or exchange of shares of a Fund with a tax
holding period of 6 months or less will be disallowed to the extent of any
distributions treated as 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 distributions treated as long-term
capital gain with respect to such shares. In addition, all or a portion of a
loss realized on a redemption or other disposition of Fund shares may be
disallowed under "wash sale" rules to the extent the shareholder acquired
other shares of the same Fund (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. Any
disallowed loss will result in an adjustment to the shareholder's tax basis in
some or all of the other shares acquired.

Sales charges paid upon a purchase of Class A shares of a Fund cannot be
taken into account for purposes of determining gain or loss on a redemption or
exchange of the shares before the 91st day after their purchase to the extent
a sales charge is reduced or eliminated in a subsequent acquisition of shares
of the Fund or of another fund pursuant to the Fund's reinvestment or exchange
privilege. Any disregarded amounts will result in an adjustment to the
shareholder's tax basis in some or all of any other shares acquired.

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 certain information from the IRS or a broker, may be subject to
"backup" withholding of federal income tax arising from the Fund's taxable
dividends and other 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.

The foregoing discussion does not address the special tax rules applicable
to certain classes of investors, such as tax-exempt entities, foreign
investors, 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 a Fund.

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 each
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 each 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 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 commission or spread, if any. Municipal
obligations, including state obligations, purchased and sold by the Portfolios
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 Portfolios 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 Portfolios 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 a 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 on the basis of either 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 Portfolios'
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 markets, 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 each 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 Portfolios 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 Funds 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 Portfolios may
also be appropriate for other investment accounts managed by BMR or its
affiliates. Whenever decisions are made to buy or sell securities by a
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 a 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 investment 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 Portfolios from time to time, it is the opinion of the Trustees of the
Trust and the Portfolios that the benefits available from the BMR organization
outweigh any disadvantage that may arise from exposure to simultaneous
transactions.

The following table shows brokerage commissions paid by each Portfolio for
each of the three fiscal years ended March 31, 2000:

<TABLE>
<CAPTION>
PORTFOLIO MARCH 31, 2000 MARCH 31, 1999 MARCH 31, 1998
--------- ------------------ ------------------ ------------------
<S> <C> <C> <C>
California ............................. $ 644 $ 817 $ 4,174
Florida ................................ 446 5,002 13,986
Massachusetts .......................... -- 6,945 10,872
New Jersey ............................. 1,520 4,143 8,067
New York ............................... 3,575 7,092 10,088
Ohio ................................... 1,229 1,774 2,179
Pennsylvania ........................... 1,518 3,563 6,465
</TABLE>

All of such portfolio security transactions were directed 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), and the amounts of such transactions
for the fiscal year ended March 31, 2000, were as follows: California --
$12,086,275; Florida -- $9,322,589; Massachusetts -- $0; New Jersey --
$27,925,692; New York -- $42,157,072; Ohio -- $14,231,501; and Pennsylvania --
$29,336,211.

FINANCIAL STATEMENTS

The audited financial statements of, and the independent auditors' report
for, the Funds and the Portfolios appear in the Funds' most recent annual
report to shareholders and are incorporated by reference into this SAI. A copy
of the Funds' 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 fiscal year ended March 31, 2000 for the Funds and the Portfolios listed
below, all as previously filed electronically with the SEC:

Eaton Vance California Limited Maturity Municipals Fund
Eaton Vance Florida Limited Maturity Municipals Fund
Eaton Vance Massachusetts 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
Eaton Vance Pennsylvania Limited Maturity Municipals Fund
California Limited Maturity Municipals Portfolio
Florida Limited Maturity Municipals Portfolio
Massachusetts 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
(Accession No. 0000912057-00-026708)

<PAGE>

APPENDIX A

CLASS A FEES, PERFORMANCE AND OWNERSHIP

SERVICE PLAN
For the fiscal year ended March 31, 2000, the following table shows, (1)
service fees paid under the Service Plan, and (2) service fees paid to
investment dealers. The service fees paid by the Funds that were not paid to
investment dealers were retained by the principal underwriter.

<TABLE>
<CAPTION>
SERVICE FEES TO
CLASS A SERVICE FEES INVESTMENT DEALERS
------- ------------ ------------------
<S> <C> <C>
California ................................................ $33,212 $32,830
Florida ................................................... 62,015 60,566
Massachusetts ............................................. 54,751 52,184
New Jersey ................................................ 45,471 44,915
New York .................................................. 71,284 70,389
Ohio ...................................................... 25,472 25,216
Pennsylvania .............................................. 51,479 50,788
</TABLE>

PRINCIPAL UNDERWRITER
For the fiscal year ended March 31, 2000, the following sales charges were
paid in connection with sales of Class A shares:

<TABLE>
<CAPTION>
TOTAL SALES CHARGES TO SALES CHARGES TO
FUND SALES CHARGES INVESTMENT DEALERS PRINCIPAL UNDERWRITER
---- ------------- ------------------ ---------------------
<S> <C> <C> <C>
California .................... $ 7,268 $ 6,417 $ 851
Florida ....................... 1,616 1,413 203
Massachusetts ................. 15,742 13,366 2,376
New Jersey .................... 3,055 2,578 477
New York ...................... 6,334 5,549 785
Ohio .......................... 3,446 3,152 294
Pennsylvania .................. 6,475 5,690 785
</TABLE>

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,
2000, Class A paid the principal underwriter for repurchase transactions
handled by it $2.50 for each such transaction which aggregated as follows:
California -- $362.50; Florida -- $712.50; Massachusetts -- $802.50; New
Jersey -- $627.50; New York -- $900; Ohio -- $295; and Pennsylvania -- $790.

PERFORMANCE INFORMATION

The tables below indicate the cumulative and average annual total return
on a hypothetical investment in shares of $1,000. Total return for the period
prior to the date Class A was established 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. Information
presented with two asterisks (**) includes the effect of subsidizing expenses.
Returns would have been lower without subsidies.

<TABLE>
VALUE OF A $1,000 INVESTMENT -- CALIFORNIA

<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 3/31/00 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
----------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Life of the Fund** 5/29/92 $977.52 $1,345.93 37.68% 4.16% 34.59% 3.86%
5 Years Ended 3/31/00 3/31/95 $977.41 $1,185.22 21.27% 3.93% 18.52% 3.46%
1 Year Ended 3/31/00 3/31/99 $977.32 $ 959.90 -1.88% -1.88% -4.10% -4.10%

------------
* Class A shares were established June 27, 1996.
</TABLE>

<TABLE>
VALUE OF A $1,000 INVESTMENT -- FLORIDA

<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 3/31/00 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
----------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Life of the Fund** 5/29/92 $977.52 $1,338.49 36.93% 4.09% 33.85% 3.79%
5 Years Ended 3/31/00 3/31/95 $977.69 $1,164.06 19.06% 3.55% 16.41% 3.08%
1 Year Ended 3/31/00 3/31/99 $977.14 $ 964.14 -1.43% -1.43% -3.68% -3.68%

------------
* Class A shares were established June 27, 1996.
</TABLE>

<TABLE>
VALUE OF A $1,000 INVESTMENT -- MASSACHUSETTS

<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 3/31/00 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
----------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Life of the Fund 6/1/92 $977.52 $1,338.91 36.97% 4.10% 33.89% 3.80%
5 Years Ended 3/31/00 3/31/95 $977.47 $1,173.58 20.06% 3.72% 17.36% 3.25%
1 Year Ended 3/31/00 3/31/99 $977.25 $ 960.11 -1.85% -1.85% -4.08% -4.08%

------------
* Class A shares were established June 27, 1996.
</TABLE>

<TABLE>
<CAPTION>
VALUE OF A $1,000 INVESTMENT -- NEW JERSEY

TOTAL RETURN TOTAL RETURN
EXCLUDING MAXIMUM INCLUDING MAXIMUM
VALUE OF VALUE OF SALES CHARGE SALES CHARGE
INVESTMENT INVESTMENT INITIAL INVESTMENT --------------------------- --------------------------
PERIOD* DATE INVESTMENT ON 3/31/00 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
----------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Life of the Fund** 6/1/92 $977.52 $1,353.16 38.44% 4.24% 35.32% 3.94%
5 Years Ended 3/31/00 3/31/95 $977.56 $1,184.92 21.21% 3.92% 18.49% 3.45%
1 Year Ended 3/31/00 3/31/99 $977.25 $ 971.37 -0.70% -0.70% -2.96% -2.96%

------------
* Class A shares were established June 27, 1996.
</TABLE>

<TABLE>
VALUE OF A $1,000 INVESTMENT -- NEW YORK

<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 3/31/00 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
----------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Life of the Fund** 5/29/92 $977.52 $1,385.98 41.79% 4.55% 38.60% 4.25%
5 Years Ended 3/31/00 3/31/95 $977.58 $1,212.21 24.00% 4.40% 21.22% 3.92%
1 Year Ended 3/31/00 3/31/99 $977.78 $ 972.84 -0.50% -0.50% -2.72% -2.72%

------------
* Class A shares were established June 27, 1996.
</TABLE>

<TABLE>
VALUE OF A $1,000 INVESTMENT -- OHIO

<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 3/31/00 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
----------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Life of the Fund** 4/16/93 $977.52 $1,248.24 27.69% 3.57% 24.82% 3.24%
5 Years Ended 3/31/00 3/31/95 $977.89 $1,181.49 20.82% 3.86% 18.15% 3.39%
1 Year Ended 3/31/00 3/31/99 $977.73 $ 956.94 -2.22% -2.22% -4.40% -4.40%

------------
* Class A shares were established October 22, 1996.
</TABLE>

<TABLE>
VALUE OF A $1,000 INVESTMENT -- PENNSYLVANIA

<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 3/31/00 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
----------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Life of the Fund** 6/1/92 $977.52 $1,371.06 40.26% 4.42% 37.11% 4.11%
5 Years Ended 3/31/00 3/31/95 $977.71 $1,190.54 21.78% 4.02% 19.05% 3.55%
1 Year Ended 3/31/00 3/31/99 $977.66 $ 962.29 -1.57% -1.57% -3.77% -3.77%

------------
* Class A shares were established June 27, 1996.
</TABLE>

See the Taxable Equivalent Yield Tables in Appendix E to this SAI for
information concerning applicable tax rates and income brackets.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

As of June 30, 2000, the Trustees and officers of the Trust, as a group,
owned in the aggregate less than 1% of the outstanding shares of each Class A
and of each Fund. In addition, as of the same date, the following record
owners held the amounts of Class A shares indicated below, which were held
either (i) individually or (ii) 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:

<TABLE>
<S> <C> <C> <C>
CALIFORNIA FUND -- Merrill Lynch, Pierce, Fenner & Smith, Inc. Jacksonville, FL 24.8%
FLORIDA FUND -- Merrill Lynch, Pierce, Fenner & Smith, Inc. Jacksonville, FL 12.7%
MASSACHUSETTS FUND -- Merrill Lynch, Pierce, Fenner & Smith, Inc. Jacksonville, FL 10.1%
NEW JERSEY FUND -- Merrill Lynch, Pierce, Fenner & Smith, Inc. Jacksonville, FL 12.4%
NEW YORK FUND -- Merrill Lynch, Pierce, Fenner & Smith, Inc. Jacksonville, FL 14.6%
OHIO FUND -- McDonald Investments Inc. Cleveland, OH 11.8%
Merrill Lynch, Pierce, Fenner & Smith, Inc. Jacksonville, FL 5.6%
McDonald Investments Inc. Cleveland, OH 5.1%
PENNSYLVANIA FUND -- Merrill Lynch, Pierce, Fenner & Smith, Inc. Jacksonville, FL 18.4%
</TABLE>

To the knowledge of the Trust, no other person owned of record or
beneficially 5% or more of any Fund's outstanding Class A shares on such date.

<PAGE>

APPENDIX B

CLASS B FEES, PERFORMANCE AND OWNERSHIP

DISTRIBUTION AND SERVICE FEES
For the fiscal year ended March 31, 2000, the following table shows, (1)
sales commissions paid by the principal underwriter to investment dealers on
sales of Class B shares, (2) distribution fees paid to the principal
underwriter under the Distribution Plan, (3) CDSC payments to the principal
underwriter, (4) uncovered distribution charges under the Plan (dollar amount
and as a percentage of net assets attributable to Class B), (5) service fees
paid under the Distribution Plan, and (6) service fees paid to investment
dealers. The service fees paid by the Funds that were not paid to investment
dealers were retained by the principal underwriter. Distribution payments and
CDSC payments reduce uncovered distribution charges under the Plan.

<TABLE>
<CAPTION>
UNCOVERED
DISTRIBUTION CDSCS DISTRIBUTION SERVICE
FEES PAID TO PAID TO CHARGES FEES TO
SALES THE PRINCIPAL THE PRINCIPAL (AS A % OF SERVICE INVESTMENT
CLASS B COMMISSIONS UNDERWRITER UNDERWRITER CLASS NET ASSETS) FEES DEALERS
------- ----------- ----------- ----------- ----------------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
California ................. $3,085 $16,551 $ 8,000 $285,000 (13.6%) $2,754 $2,737
Florida .................... 4,587 39,690 4,000 586,000 (11.9%) 7,634 7,610
Massachusetts .............. 5,651 18,204 5,000 337,000 (16.8%) 3,129 3,082
New Jersey ................. 10,569 19,152 8,000 303,000 (13.3%) 3,565 3,466
New York ................... 12,901 31,279 7,000 424,000 (10.7%) 5,230 5,181
Ohio ....................... 3,701 15,315 4,000 503,000 (24.6%) 2,560 2,341
Pennsylvania ............... 6,679 21,393 5,000 180,000 (7.4%) 4,617 4,470
</TABLE>

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,
2000, Class B paid the principal underwriter for repurchase transactions
handled by it $2.50 for each such transaction which aggregated as follows:
California - $85; Florida - $110; Massachusetts - $107.50; New Jersey -
$77.50; New York - $137.50; Ohio - $25; and Pennsylvania - $162.50.

PERFORMANCE INFORMATION

The tables below indicate the cumulative and average annual total return
on a hypothetical investment of $1,000 in Class B shares for the periods shown
in each table. 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. Information presented with two
asterisks (**) includes the effect of subsidizing expenses. Return would have
been lower without subsidies.

<TABLE>
VALUE OF A $1,000 INVESTMENT -- CALIFORNIA

<CAPTION>
VALUE OF VALUE OF TOTAL RETURN BEFORE TOTAL RETURN AFTER
INVESTMENT INVESTMENT DEDUCTING DEDUCTING
BEFORE DEDUCTING AFTER DEDUCTING THE MAXIMUM CDSC THE MAXIMUM CDSC
INVESTMENT INVESTMENT THE MAXIMUM THE MAXIMUM ------------------------ ------------------------
PERIOD* DATE CDSC ON 3/31/00 CDSC ON 3/31/00 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
------------------------ ---------- ---------------- --------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Life of the Fund** 5/29/92 $1,341.75 $1,341.75 34.18% 3.82% 34.18% 3.82%
5 Years Ended 3/31/00 3/31/95 $1,181.78 $1,181.78 18.18% 3.40% 18.18% 3.40%
1 Year Ended 3/31/00 3/31/99 $ 975.18 $ 947.04 -2.58% -2.58% -5.39% -5.39%

------------
* Investment operations began on May 29, 1992.
</TABLE>

<TABLE>
VALUE OF A $1,000 INVESTMENT -- FLORIDA

<CAPTION>
VALUE OF VALUE OF TOTAL RETURN BEFORE TOTAL RETURN AFTER
INVESTMENT INVESTMENT DEDUCTING DEDUCTING
BEFORE DEDUCTING AFTER DEDUCTING THE MAXIMUM CDSC THE MAXIMUM CDSC
INVESTMENT INVESTMENT THE MAXIMUM THE MAXIMUM ------------------------ ------------------------
PERIOD* DATE CDSC ON 3/31/00 CDSC ON 3/31/00 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
------------------------ ---------- ---------------- --------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Life of the Fund** 5/29/92 $1,333.79 $1,333.79 33.38% 3.74% 33.38% 3.74%
5 Years Ended 3/31/00 3/31/95 $1,159.76 $1,159.76 15.98% 3.01% 15.98% 3.01%
1 Year Ended 3/31/00 3/31/99 $ 979.25 $ 950.97 -2.17% -2.17% -5.00% -5.00%

------------
* Investment operations began on May 29, 1992.
</TABLE>

<TABLE>
VALUE OF A $1,000 INVESTMENT -- MASSACHUSETTS

<CAPTION>
VALUE OF VALUE OF TOTAL RETURN BEFORE TOTAL RETURN AFTER
INVESTMENT INVESTMENT DEDUCTING DEDUCTING
BEFORE DEDUCTING AFTER DEDUCTING THE MAXIMUM CDSC THE MAXIMUM CDSC
INVESTMENT INVESTMENT THE MAXIMUM THE MAXIMUM ------------------------ ------------------------
PERIOD* DATE CDSC ON 3/31/00 CDSC ON 3/31/00 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
------------------------ ---------- ---------------- --------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Life of the Fund** 6/1/92 $1,333.49 $1,333.49 33.35% 3.74% 33.35% 3.74%
5 Years Ended 3/31/00 3/31/95 $1,168.94 $1,168.94 16.89% 3.17% 16.89% 3.17%
1 Year Ended 3/31/00 3/31/99 $ 974.73 $ 946.56 -2.62% -2.62% -5.44% -5.44%

------------
* Investment operations began on June 1, 1992.
</TABLE>

<TABLE>
VALUE OF A $1,000 INVESTMENT -- NEW JERSEY

<CAPTION>
VALUE OF VALUE OF TOTAL RETURN BEFORE TOTAL RETURN AFTER
INVESTMENT INVESTMENT DEDUCTING DEDUCTING
BEFORE DEDUCTING AFTER DEDUCTING THE MAXIMUM CDSC THE MAXIMUM CDSC
INVESTMENT INVESTMENT THE MAXIMUM THE MAXIMUM ------------------------ ------------------------
PERIOD* DATE CDSC ON 3/31/00 CDSC ON 3/31/00 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
------------------------ ---------- ---------------- --------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Life of the Fund 6/1/92 $1,348.08 $1,348.08 34.81% 3.89% 34.81% 3.89%
5 Years Ended 3/31/00 3/31/95 $1,180.29 $1,180.29 18.03% 3.37% 18.03% 3.37%
1 Year Ended 3/31/00 3/31/99 $ 986.20 $ 957.74 -1.48% -1.48% -4.32% -4.32%

----------
* Investment operations began on June 1, 1992.
</TABLE>

<TABLE>
VALUE OF A $1,000 INVESTMENT -- NEW YORK

<CAPTION>
VALUE OF VALUE OF TOTAL RETURN BEFORE TOTAL RETURN AFTER
INVESTMENT INVESTMENT DEDUCTING DEDUCTING
BEFORE DEDUCTING AFTER DEDUCTING THE MAXIMUM CDSC THE MAXIMUM CDSC
INVESTMENT INVESTMENT THE MAXIMUM THE MAXIMUM ------------------------ ------------------------
PERIOD* DATE CDSC ON 3/31/00 CDSC ON 3/31/00 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
------------------------ ---------- ---------------- --------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Life of the Fund 5/29/92 $1,380.80 $1,380.80 38.08% 4.20% 38.08% 4.20%
5 Years Ended 3/31/00 3/31/95 $1,207.52 $1,207.52 20.75% 3.84% 20.75% 3.84%
1 Year Ended 3/31/00 3/31/99 $ 987.12 $ 958.63 -1.29% -1.29% -4.14% -4.14%

----------
* Investment operations began on May 29, 1992.
</TABLE>

<TABLE>
VALUE OF A $1,000 INVESTMENT -- OHIO

<CAPTION>
VALUE OF VALUE OF TOTAL RETURN BEFORE TOTAL RETURN AFTER
INVESTMENT INVESTMENT DEDUCTING DEDUCTING
BEFORE DEDUCTING AFTER DEDUCTING THE MAXIMUM CDSC THE MAXIMUM CDSC
INVESTMENT INVESTMENT THE MAXIMUM THE MAXIMUM ------------------------ ------------------------
PERIOD* DATE CDSC ON 3/31/00 CDSC ON 3/31/00 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
------------------------ ---------- ---------------- --------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Life of the Fund 4/16/93 $1,246.41 $1,246.41 24.64% 3.22% 24.64% 3.22%
5 Years Ended 3/31/00 3/31/95 $1,179.36 $1,179.36 17.94% 3.35% 17.94% 3.35%
1 Year Ended 3/31/00 3/31/99 $ 971.54 $ 943.53 -2.94% -2.94% -5.74% -5.74%

----------
* Investment operations began on April 16, 1993.
</TABLE>

<TABLE>
VALUE OF A $1,000 INVESTMENT -- PENNSYLVANIA

VALUE OF VALUE OF TOTAL RETURN BEFORE TOTAL RETURN AFTER
INVESTMENT INVESTMENT DEDUCTING DEDUCTING
BEFORE DEDUCTING AFTER DEDUCTING THE MAXIMUM CDSC THE MAXIMUM CDSC
INVESTMENT INVESTMENT THE MAXIMUM THE MAXIMUM ------------------------ ------------------------
PERIOD* DATE CDSC ON 3/31/00 CDSC ON 3/31/00 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
------------------------ ---------- ---------------- --------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Life of the Fund 6/1/92 $1,365.82 $1,365.82 36.58% 4.06% 36.58% 4.06%
5 Years Ended 3/31/00 3/31/95 $1,185.75 $1,185.75 18.58% 3.47% 18.58% 3.47%
1 Year Ended 3/31/00 3/31/99 $ 976.55 $ 948.35 -2.34% -2.34% -5.16% -5.16%

------------
* Investment operations began on June 1, 1992.
</TABLE>

See the Taxable Equivalent Yield Tables in Appendix E to this SAI for
information concerning applicable tax rates and income brackets.
<PAGE>

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

As of June 30, 2000, the Trustees and officers of the Trust, as a group,
owned in the aggregate less than 1% of the outstanding shares of each Class B
and of each Fund. In addition, as of the same date, the following record
owners held the amounts of Class B shares indicated below, which were held
either (i) individually or (ii) 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:

<TABLE>
<S> <C> <C> <C>
CALIFORNIA FUND -- Merrill Lynch, Pierce, Fenner & Smith, Inc. Jacksonville, FL 25.5%
Dean Witter FBO Marjorie P. Shafer TTEE New York, NY 22.5%
Dean Witter FBO Albin Erickson TTEE O/T New York, NY 9.5%
PaineWebber FBO E. Christine Feldman TTEE,
FBO Feldman Family "A" Trust Laguna Hills, CA 6.7%
Toyack Corp. San Diego, CA 6.2%
Dean Witter FBO Marie McNulty TTEE New York, NY 5.2%
FLORIDA FUND -- PaineWebber FBO Albert Cohen Family Limited
Partnership Miami, FL 53.3%
Merrill Lynch, Pierce, Fenner & Smith, Inc. Jacksonville, FL 9.8%
MASSACHUSETTS FUND -- Merrill Lynch, Pierce, Fenner & Smith, Inc. Jacksonville, FL 14.4%
LPL Financial Services San Diego, CA 9.6%
Bear Stearns Securities Brooklyn, NY 7.2%
Wexford Clearing Services Corp. FBO Kathryn
S. Grosberg Harwich, MA 5.1%
Salomon Smith Barney Inc. New York, NY 7.0%
NEW JERSEY FUND -- Merrill Lynch, Pierce, Fenner & Smith, Inc. Jacksonville, FL 24.0%
PaineWebber FBO Stanley A. Schwalb and
Karin I. Schwalb JTWROS Bernardsville, NJ 12.4%
Donaldson Lufkin Jenrette Securities
Corporation, Inc. Jersey City, NJ 9.7%
Lucille P. Lupton, Exec. for Estate of
Anthony A. Previti Somers Point, NJ 6.3%
PaineWebber FBO Elizabeth Garry Nutley, NJ 5.5%
NEW YORK FUND -- Merrill Lynch, Pierce, Fenner & Smith, Inc. Jacksonville, FL 21.1%
Dean Witter FBO Alice E. Lazoff New York, NY 7.2%
Dean Witter FBO Alice Lazoff Exec New York, NY 7.2%
Milton Jacoby New York, NY 5.7%
Dean Witter FBO Robert S. Woolman New York, NY 5.6%
OHIO FUND -- Merrill Lynch, Pierce, Fenner & Smith, Inc. Jacksonville, FL 32.0%
Edward D. Jones and Co. F/A/O James E.
Little Sr. TTEE Marilyn Heights, MO 9.8%
First Union Securities Inc. Milwaukee, WI 7.1%
National City Bank of Columbus Agent
U/A Live Oak Properties Cleveland, OH 6.7%
Georgiana J. Muskat Pittsburgh, PA 6.6%
PENNSYLVANIA FUND -- Merrill Lynch, Pierce, Fenner & Smith, Inc. Jacksonville, FL 19.9%
Filiberto J. Vito Pittsburgh, PA 5.3%
</TABLE>

Beneficial owners of 25% or more of a Fund's outstanding shares are
presumed to be in control of such Class for purposes of voting on certain
matters submitted to shareholders. To the knowledge of the Trust, no other
person owned of record or beneficially 5% or more of any Fund's outstanding
Class B shares on such date.

<PAGE>

APPENDIX C

CLASS C FEES, PERFORMANCE AND OWNERSHIP

DISTRIBUTION AND SERVICE FEES
For the fiscal year ended March 31, 2000, the following table shows, (1)
sales commissions paid by the principal underwriter to investment dealers on
sales of Class C shares, (2) distribution fees paid to the principal
underwriter under the Distribution Plan, (3) CDSC payments to the principal
underwriter, (4) uncovered distribution charges under the Plan (dollar amount
and as a percentage of net assets attributable to Class C), (5) service fees
paid under the Distribution Plan, and (6) service fees paid to investment
dealers. The service fees paid by the Funds that were not paid to investment
dealers were retained by the principal underwriter. Distribution payments and
CDSC payments reduce uncovered distribution charges under the Plan.

<TABLE>
<CAPTION>
DISTRIBUTION CDSCS UNCOVERED SERVICE
FEES PAID TO PAID TO DISTRIBUTION CHARGES FEES TO
SALES THE PRINCIPAL THE PRINCIPAL (AS A % OF SERVICE INVESTMENT
CLASS C COMMISSIONS UNDERWRITER UNDERWRITER CLASS NET ASSETS) FEES DEALERS
------- ----------- ------------- ------------- ------------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Florida .......... $25,584 $26,764 $ 0 $4,495,000 (152.6%) $ 5,351 $ 4,264
Massachusetts .... $31,396 $35,521 $1,000 $1,022,000 (22.4%) $ 7,104 $ 5,232
New York ......... $13,731 $15,689 $4,000 $1,185,000 (68.8%) $ 3,135 $ 2,288
Pennsylvania ..... $35,798 $36,072 $1,000 $2,111,000 (50.0%) $ 7,214 $ 5,704
</TABLE>

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,
2000, Class C paid the principal underwriter for repurchase transactions
handled by it $2.50 for each such transaction which aggregated as follows:
Florida -- $110; Massachusetts -- $67.50; New York -- $65; and Pennsylvania --
$127.50.

PERFORMANCE INFORMATION

The tables below indicate 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 the Predecessor Fund's commencement of operations
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. Information presented with two asterisks (**) includes the
effect of subsidizing expenses. Returns would have been lower without
subsidies.

<TABLE>
VALUE OF A $1,000 INVESTMENT -- FLORIDA

VALUE OF VALUE OF
INVESTMENT INVESTMENT TOTAL RETURN BEFORE TOTAL RETURN AFTER
BEFORE DEDUCTING AFTER DEDUCTING DEDUCTING THE DEDUCTING THE
THE MAXIMUM THE MAXIMUM MAXIMUM CDSC MAXIMUM CDSC
INVESTMENT INVESTMENT AMOUNT OF CDSC CDSC ----------------------- ------------------------
PERIOD* DATE INVESTMENT ON 3/31/00 ON 3/31/00 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
---------------- ---------- ---------- ---------------- --------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Life of the Fund** 5/29/92 $1,000 $1,326.94 $1,326.94 32.69% 3.67% 32.69% 3.67%
5 Years Ended
3/31/00 3/31/95 $1,000 $1,157.03 $1,157.03 15.70% 2.96% 15.70% 2.96%
1 Year Ended
3/31/00 3/31/99 $1,000 $ 978.92 $ 969.50 -2.21% -2.21% -3.15% -3.15%

------------
* Predecessor Fund commenced operations December 8, 1993.
</TABLE>

<TABLE>
VALUE OF A $1,000 INVESTMENT -- MASSACHUSETTS

<CAPTION>
VALUE OF VALUE OF
INVESTMENT INVESTMENT TOTAL RETURN BEFORE TOTAL RETURN AFTER
BEFORE DEDUCTING AFTER DEDUCTING DEDUCTING THE DEDUCTING THE
THE MAXIMUM THE MAXIMUM MAXIMUM CDSC MAXIMUM CDSC
INVESTMENT INVESTMENT AMOUNT OF CDSC CDSC ----------------------- -------------------------
PERIOD* DATE INVESTMENT ON 3/31/00 ON 3/31/00 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
---------------- ---------- ---------- ---------------- --------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Life of the Fund** 6/1/92 $1,000 $1,330.33 $1,330.33 33.03% 3.71% 33.03% 3.71%
5 Years Ended
3/31/00 3/31/95 $1,000 $1,165.91 $1,165.91 16.84% 3.16% 16.84% 3.16%
1 Year Ended
3/31/00 3/31/99 $1,000 $ 974.92 $ 965.53 -2.51% -2.51% -3.45% -3.45%

------------
* Predecessor Fund commenced operations December 9, 1993.
</TABLE>

<TABLE>
VALUE OF A $1,000 INVESTMENT -- NEW YORK

<CAPTION>
VALUE OF VALUE OF
INVESTMENT INVESTMENT TOTAL RETURN BEFORE TOTAL RETURN AFTER
BEFORE DEDUCTING AFTER DEDUCTING DEDUCTING THE DEDUCTING THE
THE MAXIMUM THE MAXIMUM MAXIMUM CDSC MAXIMUM CDSC
INVESTMENT INVESTMENT AMOUNT OF CDSC CDSC ----------------------- -------------------------
PERIOD* DATE INVESTMENT ON 3/31/00 ON 3/31/00 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
---------------- ---------- ---------- ---------------- --------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Life of the Fund** 5/29/92 $1,000 $1,374.88 $1,374.88 37.49% 4.14% 37.49% 4.14%
5 Years Ended
3/31/00 3/31/95 $1,000 $1,206.35 $1,206.35 20.64% 3.82% 20.64% 3.82%
1 Year Ended
3/31/00 3/31/99 $1,000 $ 988.73 $ 979.21 -1.22% -1.22% -2.18% -2.18%

------------
* Predecessor Fund commenced operations December 8, 1993.
</TABLE>

<TABLE>
VALUE OF A $1,000 INVESTMENT -- PENNSYLVANIA

<CAPTION>
VALUE OF VALUE OF
INVESTMENT INVESTMENT TOTAL RETURN BEFORE TOTAL RETURN AFTER
BEFORE DEDUCTING AFTER DEDUCTING DEDUCTING THE DEDUCTING THE
THE MAXIMUM THE MAXIMUM MAXIMUM CDSC MAXIMUM CDSC
INVESTMENT INVESTMENT AMOUNT OF CDSC CDSC ----------------------- -------------------------
PERIOD* DATE INVESTMENT ON 3/31/00 ON 3/31/00 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
---------------- ---------- ---------- ---------------- --------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Life of the Fund** 6/1/92 $1,000 $1,363.43 $1,363.43 36.34% 4.04% 36.34% 4.04%
5 Years Ended
3/31/00 3/31/95 $1,000 $1,181.67 $1,181.67 18.17% 3.39% 18.17% 3.39%
1 Year Ended
3/31/00 3/31/99 $1,000 $ 977.06 $ 967.65 -2.29% -2.29% -3.24% -3.24%

------------
* Predecessor Fund commenced operations December 8, 1993.
</TABLE>

See the Taxable Equivalent Yield Tables in Appendix E to this SAI for
information concerning applicable tax rates and income brackets.
<PAGE>

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

As of June 30, 2000, the Trustees and officers of the Trust, as a group,
owned in the aggregate less than 1% of the outstanding shares of each Class C
and of each Fund. In addition, as of the same date, the following record
owners held the amounts of Class C shares indicated below, which were held
either (i) individually or (ii) 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:

<TABLE>
<S> <C> <C> <C>
FLORIDA FUND -- Merrill Lynch, Pierce, Fenner & Smith, Inc. Jacksonville, FL 44.5%
MASSACHUSETTS FUND -- Merrill Lynch, Pierce, Fenner & Smith, Inc. Jacksonville, FL 30.1%
NFSC FEBO Ruth G. Kelly TTEE
Ruth G. Kelly Rev. Trust E. Sandwich, MA 10.3%
Salomon Smith Barney, Inc. New York, NY 8.9%
Dean Witter FBO
Ronnie Z. Siegel New York, NY 8.8%
PaineWebber FBO Charles J. Daly Rev. Tr. West Bloomfield, MI 8.4%
NEW YORK FUND -- Merrill Lynch, Pierce, Fenner & Smith, Inc. Jacksonville, FL 16.1%
Donaldson Lufkin Jenrette Securities
Corporation Inc. Jersey City, NJ 6.6%
NFSC FEBO Peter J. Kenny Plandome, NY 6.4%
Peter H. Wright Brooklyn, NY 6.0%
Steven J. Martinez and Phyllis W. Martinez
JTWROS Stony Brook, NY 5.3%
Advest, Inc. Hartford, CT 5.3%
PENNSYLVANIA FUND -- Merrill Lynch, Pierce, Fenner & Smith, Inc. Jacksonville, FL 29.8%
J.J.B. Hilliard, W.L. Lyons, Inc.
Tasso Katselas & Jane Katselas JTWROS Louisville, KY 26.5%
Donaldson Lufkin Jenrette Securities Corp. Inc. Jersey City, NJ 5.0%
</TABLE>

<PAGE>

APPENDIX D: STATE SPECIFIC INFORMATION

RISKS OF CONCENTRATION

The following information as to certain State specific considerations is
given to investors in view of a Portfolio's policy of concentrating its
investments in particular State issuers. Such information supplements the
information in the Prospectus. It is derived from sources that are generally
available to investors and is believed to be accurate. Such information
constitutes only a brief summary, does not purport to be a complete
description and is based on information from official statements relating to
securities offerings of issuers of each particular State. Neither the Trust
nor the Portfolios have independently verified this information.

The bond ratings provided in the prospectus are current as of the date of
the prospectus and are based on economic conditions which may not continue;
moreover, there can be no assurance that particular bond issues may not be
adversely affected by changes in economic, political or other conditions.
Unless stated otherwise, the ratings indicated are for obligations of the
state. A state's political subdivisions may have different ratings which are
unrelated to the ratings assigned to state obligations.

CALIFORNIA

On January 10, 2000, Governor Davis released his proposed budget for
Fiscal Year 2000-01. The 2000-01 Governor's Budget generally reflects that
General Fund revenues for Fiscal Year 1999-2000 will be higher than
projections made at the time of the 1999 Budget Act. The Governor's Budget
projects General Fund revenues and transfers in 2000-01 of $68.2 billion. This
includes anticipated payments from the tobacco litigation settlement of $387.9
million and the receipt of one-time revenue from the sale of assets. The
Governor has proposed $167 million in tax reduction initiatives.

The Governor's Budget proposes General Fund expenditures of $68.8 billion.
Included in the Budget are set-asides of $500 million for legal contingencies
and $100 million for various one-time legislative initiatives. Based on the
proposed revenues and expenditures, the Governor's Budget projects the June
30, 2001 balance in the State Fund for Economic Uncertainties to be $1.238
billion.

Proposition 13. Certain of the Debt Obligations may be obligations of
issuers who rely in whole or in part on ad valorem real property taxes as a
source of revenue. On June 6, 1978, California voters approved an amendment to
the California Constitution known as Proposition 13, which added Article XIIIA
to the California Constitution. The effect of Article XIIIA was to limit ad
valorem taxes on real property and to restrict the ability of taxing entities
to increase real property tax revenues.

Section 1 of Article XIIIA, as amended, limits the maximum ad valorem tax
on real property to 1% of full cash value to be collected by the counties and
apportioned according to law. The 1% limitation does not apply to ad valorem
taxes or special assessments to pay the interest and redemption charges on any
bonded indebtedness for the acquisition or improvement of real property
approved by two-thirds of the votes cast by the voters voting on the
proposition. Section 2 of Article XIIIA defines "full cash value" to mean "the
County Assessor's valuation of real property as shown on the 1975/76 tax bill
under "full cash value" or, thereafter, the appraised value of real property
when purchased, newly constructed, or a change in ownership has occurred after
the 1975 assessment." The full cash value may be adjusted annually to reflect
inflation at a rate not to exceed 2% per year, or reduction in the consumer
price index or comparable local data, or reduced in the event of declining
property value caused by damage, destruction or other factors.

Legislation enacted by the California Legislature to implement Article
XIIIA provides that notwithstanding any other law, local agencies may not levy
any ad valorem property tax except to pay debt service on indebtedness
approved by the voters prior to July 1, 1978, and that each county will levy
the maximum tax permitted by Article XIIIA.

Proposition 9. On November 6, 1979, an initiative known as "Proposition 9"
or the "Gann Initiative" was approved by the California voters, which added
Article XIIIB to the California Constitution. Under Article XIIIB, state and
local governmental entities have an annual "appropriations limit" and are not
allowed to spend certain moneys called "appropriations subject to limitation"
in an amount higher than the "appropriations limit." Article XIIIB does not
affect the appropriation of moneys which are excluded from the definition of
"appropriations subject to limitation," including debt service on indebtedness
existing or authorized as of January 1, 1979, or bonded indebtedness
subsequently approved by the voters. In general terms, the "appropriations
limit" is required to be based on certain 1978/79 expenditures, and is to be
adjusted annually to reflect changes in consumer prices, population, and
certain services provided by these entities. Article XIIIB also provides that
if these entities' revenues in any year exceed the amounts permitted to be
spent, the excess is to be returned by revising tax rates or fee schedules
over the subsequent two years.

Proposition 98. On November 8, 1988, voters of the state approved
Proposition 98, a combined initiative constitutional amendment and statute
called the "Classroom Instructional Improvement and Accountability Act."
Proposition 98 changed state funding of public education below the university
level and the operation of the State Appropriations Limit, primarily by
guaranteeing K-14 schools a minimum share of General Fund revenues. Under
Proposition 98 (modified by Proposition 111 as discussed below), K-14 schools
are guaranteed the greater of (a) in general, a fixed percent of General Fund
revenues ("Test 1"), (b) the amount appropriated to K-14 schools in the prior
year, adjusted for changes in the cost of living (measured as in Article XIII
B by reference to state per capita personal income) and enrollment ("Test 2"),
or (c) a third test, which would replace Test 2 in any year when the
percentage growth in per capita General Fund revenues from the prior year plus
one half of one percent is less than the percentage growth in state per capita
personal income ("Test 3"). Under Test 3, schools would receive the amount
appropriated in the prior year adjusted for changes in enrollment and per
capita General Fund revenues, plus an additional small adjustment factor. If
Test 3 is used in any year, the difference between Test 3 and Test 2 would
become a "credit" to schools which would be the basis of payments in future
years when per capita General Fund revenue growth exceeds per capita personal
income growth.

Proposition 98 permits the Legislature -- by two-thirds vote of both
houses, with the Governor's concurrence -- to suspend the K-14 schools'
minimum funding formula for a one-year period. Proposition 98 also contains
provisions transferring certain State tax revenues in excess of the Article
XIII B limit to K-14 schools.

Proposition 111. On June 30, 1989, the California Legislature enacted
Senate Constitutional Amendment 1, a proposed modification of the California
Constitution to alter the spending limit and the education funding provisions
of Proposition 98. Senate Constitutional Amendment 1 -- on the June 5, 1990
ballot as Proposition 111 -- was approved by the voters and took effect on
July 1, 1990. Among a number of important provisions, Proposition 111
recalculated spending limits for the state and for local governments, allowed
greater annual increases in the limits, allowed the averaging of two years'
tax revenues before requiring action regarding excess tax revenues, reduced
the amount of the funding guarantee in recession years for school districts
and community college districts (but with a floor of 40.9 percent of state
general fund tax revenues), removed the provision of Proposition 98 which
included excess moneys transferred to school districts and community college
districts in the base calculation for the next year, limited the amount of
state tax revenue over the limit which would be transferred to school
districts and community college districts, and exempted increased gasoline
taxes and truck weight fees from the state appropriations limit. Additionally,
Proposition 111 exempted from the state appropriations limit funding for
capital outlays.

Proposition 62. On November 4, 1986, California voters approved an
initiative statute known as Proposition 62. This initiative provided the
following:

1. Requires that any tax for general governmental purposes imposed by
local governments be approved by resolution or ordinance adopted by a two-
thirds vote of the governmental entity's legislative body and by a majority
vote of the electorate of the governmental entity;

2. Requires that any special tax (defined as taxes levied for other than
general governmental purposes) imposed by a local governmental entity be
approved by a two-thirds vote of the voters within that jurisdiction;

3. Restricts the use of revenues from a special tax to the purposes or for
the service for which the special tax was imposed;

4. Prohibits the imposition of ad valorem taxes on real property by local
governmental entities except as permitted by Article XIIIA;

5. Prohibits the imposition of transaction taxes and sales taxes on the
sale of real property by local governments;

6. Requires that any tax imposed by a local government on or after August
1, 1985 be ratified by a majority vote of the electorate within two years of
the adoption of the initiative;

7. Requires that, in the event a local government fails to comply with the
provisions of this measure, a reduction in the amount of property tax revenue
allocated to such local government occurs in an amount equal to the revenues
received by such entity attributable to the tax levied in violation of the
initiative; and

8. Permits these provisions to be amended exclusively by the voters of the
state of California.

In September 1988, the California Court of Appeal in City of Westminster
v. County of Orange, 204 Cal.App. 3d 623, 215 Cal.Rptr. 511 (Cal.Ct.App.
1988), held that Proposition 62 is unconstitutional to the extent that it
requires a general tax by a general law city, enacted on or after August 1,
1985 and prior to the effective date of Proposition 62, to be subject to
approval by a majority of voters. The Court held that the California
Constitution prohibits the imposition of a requirement that local tax measures
be submitted to the electorate by either referendum or initiative. It is
impossible to predict the impact of this decision on charter cities, on
special taxes or on new taxes imposed after the effective date of Proposition
62. The California Court of Appeal in City of Woodlake v. Logan, (1991) 230
Cal.App.3d 1058, subsequently held that Proposition 62's popular vote
requirements for future local taxes also provided for an unconstitutional
referenda. The California Supreme Court declined to review both the City of
Westminster and the City of Woodlake decisions.

In Santa Clara Local Transportation Authority v. Guardino, (Sept. 28,
1995) 11 Cal.4th 220, reh'g denied, modified (Dec. 14, 1995) 12 Cal.4th 344e,
the California Supreme Court upheld the constitutionality of Proposition 62's
popular vote requirements for future taxes, and specifically disapproved of
the City of Woodlake decision as erroneous. The Court did not determine the
correctness of the City of Westminster decision, because that case appeared
distinguishable, was not relied on by the parties in Guardino, and involved
taxes not likely to still be at issue. It is impossible to predict the impact
of the Supreme Court's decision on charter cities or on taxes imposed in
reliance on the City of Woodlake case.

In McBrearty v. City of Brawley, 59 Cal. App. 4th 1441, 69 Cal. Rptr. 2d
862 (Cal. Ct. App. 1997), the Court of Appeal held that the city of Brawley
must either hold an election or cease collection of utility taxes that were
not submitted to a vote. In 1991, the city of Brawley adopted an ordinance
imposing a utility tax on its residents and began collecting the tax without
first seeking voter approval. In 1996, the taxpayer petitioned for writ of
mandate contending that Proposition 62 required the city to submit its utility
tax on residents to vote of local electorate. The trial court issued a writ of
mandamus and the city appealed.

First, the Court of Appeal held that the taxpayer's cause of action
accrued for statute of limitation purposes at the time of the Guardino
decision rather than at the time when the city adopted the tax ordinance which
was July 1991. Second, the Court held that the voter approval requirement in
Proposition 62 was not an invalid mechanism under the state constitution for
the involvement of the electorate in the legislative process. Third, the Court
rejected the city's argument that Guardino should only be applied on a
prospective basis. Finally, the Court held Proposition 218 (see discussion
below) did not impliedly protect any local general taxes imposed prior to
January 1, 1995 against challenge.

Assembly Bill 1362 (Mazzoni), introduced February 28, 1997, which would
have made the Guardino decision inapplicable to any tax first imposed or
increased by an ordinance or resolution adopted before December 14, 1995 was
vetoed by the Governor on October 11, 1997. The California State Senate had
passed the Bill on May 16, 1996 and the California State Assembly had passed
the Bill on September 11, 1997. It is not clear whether the Bill, if enacted,
would have been constitutional as a non-voted amendment to Proposition 62 or
as a non-voted change to Proposition 62's operative date.

Proposition 218. On November 5, 1996, the voters of the state approved
Proposition 218, a constitutional initiative, entitled the "Right to Vote on
Taxes Act" ("Proposition 218"). Proposition 218 adds Articles XIII C and XIII
D to the California Constitution and contains a number of interrelated
provisions affecting the ability of local governments to levy and collect both
existing and future taxes, assessments, fees and charges. Proposition 218
became effective on November 6, 1996. The Sponsors are unable to predict
whether and to what extent Proposition 218 may be held to be constitutional or
how its terms will be interpreted and applied by the courts. However, if
upheld, Proposition 218 could substantially restrict certain local
governments' ability to raise future revenues and could subject certain
existing sources of revenue to reduction or repeal, and increase local
government costs to hold elections, calculate fees and assessments, notify the
public and defend local government fees and assessments in court. For example,
as discussed below, a California appellate court in the case of Consolidated
Fire Protection Dist. Et al. v. Howard Jarvis Taxpayers' Assoc., 63 Cal. App.
4th 211 (1998) upheld one of the provisions of Proposition 218 that allows a
majority of affected property owners to defeat local government attempts to
increase certain property-based fees or charges.

Article XIII C of Proposition 218 requires majority voter approval for the
imposition, extension or increase of general taxes and two-thirds voter
approval for the imposition, extension or increase of special taxes, including
special taxes deposited into a local government's general fund. Proposition
218 also provides that any general tax imposed, extended or increased without
voter approval by any local government on or after January 1, 1995 and prior
to November 6, 1996 shall continue to be imposed only if approved by a
majority vote in an election held within two years of November 6, 1996.

Article XIII C of Proposition 218 also expressly extends the initiative
power to give voters the power to reduce or repeal local taxes, assessments,
fees and charges, regardless of the date such taxes, assessments, fees or
charges were imposed. This extension of the initiative power to some extent
constitutionalizes the March 6, 1995 state Supreme Court decision in Rossi v.
Brown, which upheld an initiative that repealed a local tax and held that the
state constitution does not preclude the repeal, including the prospective
repeal, of a tax ordinance by an initiative, as contrasted with the state
constitutional prohibition on referendum powers regarding statutes and
ordinances which impose a tax. Generally, the initiative process enables
California voters to enact legislation upon obtaining requisite voter approval
at a general election. Proposition 218 extends the authority stated in Rossi
v. Brown by expanding the initiative power to include reducing or repealing
assessments, fees and charges, which had previously been considered
administrative rather than legislative matters and therefore beyond the
initiative power.

The initiative power granted under Article XIII C of Proposition 218, by
its terms, applies to all local taxes, assessments, fees and charges and is
not limited to local taxes, assessments, fees and charges that are property
related.

Article XIII D of Proposition 218 adds several new requirements making it
generally more difficult for local agencies to levy and maintain "assessments"
for municipal services and programs. "Assessment" is defined to mean any levy
or charge upon real property for a special benefit conferred upon the real
property.

Article XIII D of Proposition 218 also adds several provisions affecting
"fees" and "charges" which are defined as "any levy other than an ad valorem
tax, a special tax, or an assessment, imposed by a local government upon a
parcel or upon a person as an incident of property ownership, including a user
fee or charge for a property related service." All new and, after June 30,
1997, existing property related fees and charges must conform to requirements
prohibiting, among other things, fees and charges which (i) generate revenues
exceeding the funds required to provide the property related service, (ii) are
used for any purpose other than those for which the fees and charges are
imposed, (iii) are for a service not actually used by, or immediately
available to, the owner of the property in question, or (iv) are used for
general governmental services, including police, fire or library services,
where the service is available to the public at large in substantially the
same manner as it is to property owners. Further, before any property related
fee or charge may be imposed or increased, written notice must be given to the
record owner of each parcel of land affected by such fee or charges. The local
government must then hold a hearing upon the proposed imposition or increase
of such property based fee, and if written protests against the proposal are
presented by a majority of the owners of the identified parcels, the local
government may not impose or increase the fee or charge. Moreover, except for
fees or charges for sewer, water and refuse collection services, no property
related fee or charge may be imposed or increased without majority approval by
the property owners subject to the fee or charge or, at the option of the
local agency, two-thirds voter approval by the electorate residing in the
affected area.

Proposition 87. On November 8, 1988, California voters approved
Proposition 87. Proposition 87 amended Article XVI, Section 16, of the
California Constitution by authorizing the California Legislature to prohibit
redevelopment agencies from receiving any of the property tax revenue raised
by increased property tax rates levied to repay bonded indebtedness of local
governments which is approved by voters on or after January 1, 1989.

Other. Finally, certain bonds in the California Portfolio may be subject
to provisions of California law that could adversely affect payments on those
bonds or limit the remedies available to bondholders. Among these are bonds of
health care institutions which are subject to the strict rules and limits
regarding reimbursement payments of California's Medi-Cal Program for health
care services to welfare beneficiaries, and bonds secured by liens on real
property.

FLORIDA

In recent years, Florida has emerged as one of the world's fastest growing
markets, experiencing an explosion of international growth as a major economic
hub of the southeastern United States. In 1977, Florida's gross state product
was $380.6 billion. Florida is a state characterized by rapid population
growth and substantial capital needs which are being funded through frequent
debt issuance and pay-as-you-go financing. Florida's economy is characterized
by a large service sector, a dependence on the tourism and construction
industries, and a large retirement population. The management of rapid growth
has been the major challenge facing state and local governments. While
attracting many senior citizens, Florida also offers a favorable business
environment and growing employment opportunities that have continued to
generate working-age population immigration. As this growth continues,
particularly within the retirement population, the demand for both public and
private services will increase, which may strain the service sector's capacity
and impede the State's budget balancing efforts.

Florida has a proportionally greater number of persons of retirement age;
a factor that makes Florida's property and transfer payment taxes a relatively
more important source of State funding. Because transfer payments are
typically less sensitive to the business cycle than employment income, they
may act as a stabilizing force in weak economic periods.

Taking advantage of a number of favorable factors -- a strong national
economy, a waning fear or crime among visitors, and improved local marketing
-- the State has increased the number of tourists. For fiscal year 1998-1999,
the number of tourists visiting Florida was 48.8 million, a .2% increase over
fiscal year 1997-1998. For fiscal year 1999-2000, expected tourist arrivals
are projected at 51.2 million, a 4.9% increase over fiscal year 1998-1999. For
fiscal year 2000-2001, expected tourist arrivals are projected at 52.6
million, a 2.7% increase over fiscal year 1999-2000.

There has been a decline in Florida's dependency on highly cyclical
construction and construction-related manufacturing sectors. For example, in
fiscal year 1985-1986, construction employment, as a percentage of total non-
farm employment was 7.51%. By fiscal year 1998-1999, this percentage had
declined to 5.3%. The percentage for fiscal year 1999-2000 is expected to
slightly decrease to 5.26% and the trend is expected to continue a downward
slope and drop below 4.81% by fiscal year 2002-2003, as Florida's economy
continues to diversify.

The ability of the State and its local units of government to satisfy its
debt obligations may be affected by numerous factors which impact on the
economic vitality of the State in general and the particular region of the
State in which the issuer of the debt obligations is located. South Florida is
particularly susceptible to international trade and currency imbalances and to
economic dislocations in Central and South America, due to its geographical
location and its involvement with foreign trade, tourism and investment
capital. North and Central Florida are impacted by problems in the
agricultural sector, particularly with regard to the citrus and sugar
industries. Short-term adverse economic conditions may be created in these
areas, and in the State as a whole, due to crop failures, severe weather
conditions or other agriculture-related problems. The State economy also has
historically been dependent on the tourism and construction industries and is
therefore, sensitive to trends in those sectors.

MASSACHUSETTS

Effective July 1, 1990, limitations were placed on the amount of direct
bonds the state could have outstanding in a fiscal year, and the amount of the
total appropriation in any fiscal year that may be expended for debt service
on general obligation debt of the state (other than certain debt incurred to
pay the fiscal 1990 deficit and certain Medicaid reimbursement payments for
prior years) was limited to 10%. In addition, the power of Massachusetts
cities and towns and certain tax-supported districts and public agencies to
raise revenue from property taxes to support their operations, including the
payment of debt service, is limited by "Proposition 2 1/2". Property taxes are
virtually the only source of tax revenues available to cities and towns to
meet local costs.

Major infrastructure projects will continue over the next decade. A
reduction in the federal contributions could increase pressure on the state
and result in increased indebtedness.

The fiscal viability of the state's authorities and municipalities is
inextricably linked to that of the state. The state guarantees the debt of
several authorities, most notably the Massachusetts Bay Transportation
Authority and the University of Massachusetts Building Authority. Their
ratings are based on this guarantee and can be expected to move in tandem.
Several other authorities are funded in part or in whole by the state and
their debt ratings may be adversely affected by a negative change in those of
the state. Economic slowdown or increased capital spending pressures could
result in local aid reductions.

NEW JERSEY

New Jersey ended Fiscal Year 1999 with a balance of $1.96 billion in its
General State Funds and is projected to end Fiscal 2000 with a balance of $2.1
billion. The state's economic indicators for 1999 showed employment growth of
1.3%; personal income growth of 5.0%; construction job growth of 2.1%; sales
of existing homes rising by 20%; and an unemployment rate remaining level at
4.6%.

On February 18, 1999, New Jersey issued $360 million of its tax-exempt
general obligation bonds. As of June 30, 1999, the outstanding general
obligation bond indebtedness of New Jersey was $3.65 billion. Projects
supported by general obligation bonds are of economic, social and
environmental importance, including the construction of correctional and human
service facilities, transportation projects, higher education improvements and
environmental projects. On December 30, 1998, the New Jersey Sports and
Exposition Authority issued $100 million of its State Contract Bonds, a
portion of which was used to refund its outstanding State Contract Bonds. On
December 16, 1998, the New Jersey Transportation Trust Fund Authority issued
$700 million State Transportation System Bonds.

In June 1997, the New Jersey Economic Development Authority issued $2.75
billion of State Pension Funding Bonds. Proceeds of this issue were used to
fully fund the state's unfunded accrued pension liability and will result in a
reduction of the General Fund costs for fiscal years 1997 and 1998 of $590
million.

Other state-related obligations include those created pursuant to the New
Jersey Building Authority Act, which has the power to construct facilities for
leasing to the state. On September 1, 1997, the New Jersey Building Authority
issued $224 million in refunding and new state revenue bonds. The funds were
applied for various projects including restoration of the State House Complex,
construction of South Woods State Prison, and several renovations of municipal
buildings.

The authorizing legislation for various state entities provides for
specific budgetary procedures with respect to certain obligations issued by
such entities. Bonds issued pursuant to authorizing legislation of this type
are sometimes referred to as "moral obligation" bonds. There is no statutory
limitation on the amount of moral obligation bonds which may be issued by
eligible state entities. Currently, there are two such entities available for
state appropriations to meet moral obligations. The New Jersey Housing and
Mortgage Finance Agency has not had a deficiency in a debt service reserve
which required New Jersey to appropriate funds. It is anticipated that the
agency's revenue will continue to be sufficient to cover debt service on its
bonds. The state provides the South Jersey Port Corporation with funds to
cover all debt service and property tax requirements when earned revenues are
anticipated to be insufficient to cover these obligations. In the past,
anticipated revenues have, in some cases, been insufficient to cover debt
service and/or all property tax requirements. There are numerous other state-
created entities with outstanding debt. This debt is supported by revenues
derived from or assets of the various projects financed by such entities.

The Local Budget Law imposes specific budgetary procedures upon counties
and municipalities, subject to review by the Director of the Division of Local
Government Services. State law also regulates the issuance of debt by counties
and municipalities by limiting the amount of tax anticipation notes that may
be issued and requiring their repayment within 120 days of the end of the
fiscal year in which they are issued. The Local Bond Law governs the issuance
of bonds and notes and bars the issuance of bonds for the payment of current
expenses or to pay outstanding obligations, except where permitted by the
Local Finance Board. State law also authorizes state officials to supervise
fiscal administration in any municipality facing financial difficulties.

NEW YORK

The state ended its 1999-2000 fiscal year balanced on a cash basis. The
reported General Fund cash balance was $1.17 billion. This does not include
$3.97 billion that the state has deposited into its tax refund reserve to pay
for tax refunds in the 2000-2001 fiscal year. The state projects a General
Fund balanced on a cash basis for the 2000-2001 fiscal year with total General
Fund receipts and transfers from other funds of $39.72 billion.

In a report released in June 2000, the New York State Comptroller
estimated future state budget gaps of approximately $3 billion in the
2001-2002 fiscal year and $4.9 billion in the 2002-2003 fiscal year. In recent
years, the state has closed projected budget gaps which have ranged from $5
billion to less than $1 billion as estimated by the Division of Budget.

The state legislature has enacted the Debt Reform Act of 2000, which
applies to new state-supported debt (i.e. general obligation debt of the state
and lease-purchase and contractual obligations of public authorities and
municipalities where debt service is paid from state appropriations) issued on
or after April 1, 2000. It imposes caps on new debt outstanding and new debt
service costs.

The fiscal stability of New York state relates, at least in part, to the
fiscal stability of its localities and authorities. Various state agencies,
authorities and localities have issued large amounts of bonds and notes either
guaranteed or supported by the state. In some cases, the state has had to
provide special assistance in recent years to enable such agencies,
authorities and localities to meet their financial obligations and, in some
cases, to prevent or cure defaults. As of its 2000-2001 Annual Information
Statement, May 31, 2000, the state was considering various measures to help
resolve persistent fiscal difficulties in Nassau County including transitional
state assistance and the imposition financial plan requirements. The extent to
which state agencies and local governments require state assistance to meet
their financial obligations, may adversely affect the ability of the state to
meet its own obligations as they become due or to obtain additional financing.

For the 1999 fiscal year, New York City had an operating surplus, before
discretionary and other transfers, and achieved balanced operating results,
after discretionary and other transfers, in accordance with GAAP. The 1999
fiscal year is the nineteenth year that the City has achieved an operating
surplus, before discretionary and other transfers, and balanced operating
results, after discretionary and other transfers. The City's financial plan
projects a surplus in the 2000 and 2001 fiscal years, with total annual
revenues projected in excess of $37 billion, and budget gaps of $2.6 billion,
$2.7 billion and $2.7 billion for the 2002, 2003 and 2004 fiscal years,
respectively. New York City has shown a pattern of consistently projecting and
closing budget gaps. The City has outlined a gap-closing program which
anticipates additional City agency programs to reduce expenditures or increase
revenues and additional federal and state actions such as intergovernmental
aid to the City. There can be no assurance that additional gap-closing
measures, such as tax increases or reductions in City services, will not be
required, the implementation of which could adversely affect the City's
economic base, and there is no assurance that such measures will enable the
City to achieve a balanced budget, as required by state law, for any fiscal
years.

Implementation of the City's four-year annual financial plan is also
dependent upon the City's ability to market its securities successfully in the
public credit markets including its ability to issue short term notes to
finance its seasonal working capital needs. The fiscal health of New York
City, which has been the largest issuer of municipal bonds in the country and
is a leading international commercial center, exerts a significant influence
upon the fiscal health and bond values of issues throughout the state. Bond
values of the Municipal Assistance Corporation, the state of New York, the New
York Local Government Assistance Corporation, the New York State Dormitory
Authority, the New York City Municipal Water Finance Authority, the New York
City Transitional Finance Authority and The Metropolitan Transportation
Authority may be particularly affected by serious financial difficulties
encountered by New York City. The Portfolio could be expected to hold bonds
issued by many, if not all of these issuers, at any given time.

The financial condition of the state, City and other New York issuers may
be affected by many economic, social, political and international factors
which cannot be predicted with certainty. These factors include, but may not
be limited to, litigation, pension costs and pension fund earnings, collective
bargaining with governmental employees, changes resulting from entitlement
program reforms, the receipt of intergovernmental aid, and the performance of
the securities and financial sector which is disproportionately more
significant to the New York economy than to the national economy. Factors
particularly affecting New York City also include its ability to meet its
extensive infrastructure and other capital needs in the face of limited
funding capacity; and costs it may incur to comply with laws pertaining to
protecting its water supply and the disposal of its solid waste.

OHIO

The state of Ohio operates on the basis of a fiscal biennium for its
appropriations and expenditures. The state is precluded by law from ending a
fiscal year or a biennium in a deficit position. The Governor has the power to
order state agencies to operate within the state's means. The state carries
out most of its operations through the General Revenue Fund ("GRF") for which
personal income and sales-use taxes are the major sources. State GRF figures
generally show a pattern related to national economic conditions, evident in
growth and depletion of its GRF ending fund balances, with the June 30 (end of
fiscal year) GRF fund balance reduced during less favorable national economic
periods and increased during more favorable economic periods.

The state's incurrence or assumption of debt without a vote of the people
is generally prohibited by current state constitutional provisions. The state
may incur debt, limited in amount of $750,000, to cover casual deficits or
failures in revenues or to meet expenses not otherwise provided for. The
Constitution expressly precludes the state from assuming the debts of any
local government or corporation. Generally, the creditworthiness of
obligations of local Ohio issuers is unrelated to that of obligations of the
state of Ohio itself. The state has no responsibility to make payments on
those local obligations.

Local school districts in Ohio receive a major portion (state-wide
aggregate approximately 50% in recent years) of their operating moneys from
state subsidiaries, but are dependent on local property taxes, and in 127
districts from voter-authorized income taxes, for significant portions of
their budgets. Litigation, similar to that in other states, has been pending
questioning the constitutionality of Ohio's system of school funding and
compliance with the constitutional requirement that the state provide a
"thorough and efficient system of common schools." In May 2000 the Ohio
Supreme Court in a 4-3 decision concluded, as it had in 1997, that the state,
even after crediting significant gubernatorial and legislative steps in recent
years, did not comply with that requirement. It set as general base threshold
requirements that every school district have enough funds to operate, an ample
number of teachers, sound and safe buildings, and equipment sufficient for all
students to be afforded an educational opportunity. The Court maintains
continuing jurisdiction, and has scheduled for June 2001 further review by its
of state responses to its ruling. With particular respect to funding sources,
the Supreme Court repeated its conclusion that property taxes no longer may be
the primary means of school funding in Ohio, noting that recent efforts to
reduce that historic reliance have been laudable but in the Court's view
insufficient. A small number of the state's 611 local school districts have in
any year required special assistance to avoid year-end deficits.

For those few municipalities and school districts that on occasion have
faced significant financial problems, there are statutory procedures for a
joint state/local commission to monitor the fiscal affairs and for development
of a financial plan to eliminate deficits and cure any defaults. (Similar
procedures have recently been extended to counties and townships.) As of June
15, 2000, five municipalities were in "fiscal emergency" status and two in
preliminary "fiscal watch" status. As of June 15, 2000, the school district
"fiscal emergency" provision was applied to twelve districts, and four were on
preliminary "fiscal watch" status.

PENNSYLVANIA

The General Fund, the state's largest fund, receives all tax receipts,
revenues, federal grants and reimbursements that are not specified by law to
be deposited elsewhere. Debt service on all obligations, except those issued
for highway purposes or for the benefit of other special revenue funds, is
payable from the General Fund. The General Fund closed fiscal year 1998 with a
balance of $2,863 million.

Certain state-created agencies have statutory authorization to incur debt
for which no legislation providing for state appropriations to pay debt
service thereon is required. The debt of these agencies is supported by assets
of or revenues derived from the various projects financed; it is not an
obligation of the state. Some of these agencies, however, are indirectly
dependent on state appropriations. state-related agencies and their
outstanding debt as of June 30, 1999 include the Delaware River Joint Toll
Bridge Commission ($51.4 million), the Delaware River Port Authority ($623.2
million), the Pennsylvania Economic Development Financing Authority ($1,239.7
million), the Pennsylvania Energy Development Authority ($42.1 million), the
Pennsylvania Higher Education Assistance Agency ($1,783.8 million), the
Pennsylvania Higher Education Facilities Authority ($3,522.5 million), the
Pennsylvania Industrial Development Authority ($373.8 million), the
Pennsylvania Infrastructure Investment Authority ($186.9 million), the
Pennsylvania Turnpike Commission ($1,573.1 million), the Philadelphia Regional
Port Authority ($57.9 million) and the state Public School Building Authority
($347.5 million).

The only obligations of state-created agencies in Pennsylvania which bear
a moral obligation of the state are those issued by the Pennsylvania Housing
Finance Agency, a state-created agency which provides housing for lower and
moderate income families in the state, which had $2,749.3 million in bonds
outstanding at June 30, 1999, and the Hospitals and Higher Education
Facilities Authority of Philadelphia which issued $21.1 million in bonds in
1993.

Pennsylvania is currently involved in certain litigation where adverse
decisions could have an adverse impact on its ability to pay debt service. For
instance, Pennsylvania Association of Rural and Small Schools v. Casey, the
constitutionality of Pennsylvania's system for funding local school districts
has been challenged. County of Allegheny v. Commonwealth of Pennsylvania
involves litigation regarding the state constitutionality of the statutory
scheme for county funding of the judicial system.

PUERTO RICO, THE U.S. VIRGIN ISLANDS AND GUAM

PUERTO RICO. Puerto Rico has a diversified economy dominated by the
manufacturing and service sectors. The North American Free Trade Agreement
("NAFTA"), which became effective January 1, 1994, has led to loss of lower
wage jobs such as textiles, but economic growth in other areas, particularly
tourism, construction and the high technology areas have compensated for that
loss. Puerto Rico's economy has expanded in the 1990's in step with the U.S.
economy.

The Commonwealth of Puerto Rico differs from the states in its
relationship with the federal government. Most federal taxes, except those
such as social security taxes that are imposed by mutual consent, are not
levied in Puerto Rico. Section 936 of the Code has provided a tax credit for
certain qualified U.S. corporations electing "possessions corporation" status.
However, in 1993, Section 936 was amended to provide for two alternative
limitations on the Section 936 credit attributable to certain active business
income. The first limitation was based on the economic activity of the Section
936 possessions corporation. The second limited the credit to a specified
percentage of the credit allowed under prior law. In 1996, Section 936 credit
was repealed except that the credit attributable to possessions source
business income with respect to certain existing credit claimants was
subjected to a phase out over a ten year period (subject to additional caps).

Also in 1996, a new Section 30A was added to the Code. Section 30A permits
a "qualifying domestic corporation" that meets certain gross income tests to
claim a credit against the federal income tax in an amount equal to the
portion of the tax which is attributable to the taxable income from sources
outside of the United States, from the active conduct of a trade or business
in Puerto Rico or from the sale of substantially all the assets used in such a
trade or business. Section 30A will be phased out by January 1, 2006. The
Governor of Puerto Rico has proposed that Congress permanently extend Section
30A until the Puerto Rican economy achieves certain economic improvements.
Similarly, President Clinton has proposed permanent extension of the Section
30A. To date, however, no action has been taken.

The eventual elimination of tax benefits to those U.S. companies with
operations in Puerto Rico may lead to slower growth in the future. There can
be no assurance that this will not lead to a weakened economy, a lower rating
on Puerto Rico's debt or lower prices for Puerto Rican bonds that may be held
by the Portfolio in the long-term. The government of Puerto Rico has enacted
its own tax incentive programs for both industrial and tourist activities.

Puerto Ricans have periodically considered conversion to statehood and
such a vote is likely again in the future. The statehood proposal was defeated
in December 1998.

Puerto Rico is rated Baa1 by Moody's and A by S&P.

THE U.S. VIRGIN ISLANDS. The United States Virgin Islands (USVI) is heavily
reliant on the tourism industry, with roughly 43% of non-agricultural
employment in tourist-related trade and services. The tourism industry is
economically sensitive and would likely be adversely affected by a recession
in either the United States or Europe.

An important component of the USVI revenue base is the federal excise tax
on rum exports. Tax revenues rebated by the federal government to the USVI
provide the primary security of many outstanding USVI bonds. Since more than
90% of the rum distilled in the USVI is distilled at one plant, any
interruption in its operations (as occurred after Hurricane Hugo in 1989)
would adversely affect these revenues. The last major hurricane to impact the
USVI was Hurricane Marilyn on September 15, 1995. Consequently, there can be
no assurance that rum exports to the United States and the rebate of tax
revenues to the USVI will continue at their present levels. The preferential
tariff treatment the USVI rum industry currently enjoys could be reduced under
NAFTA. Increased competition from Mexican rum producers could reduce USVI rum
imported to the U.S., decreasing excise tax revenues generated. The USVI is
periodically hit by hurricanes. Several hurricanes have caused extensive
damage, which has had a negative impact on revenue collections. There is
currently no rated, unenhanced Virgin Islands debt outstanding (although there
is unrated debt outstanding). In addition, eventual elimination of the Section
936 tax credit for those companies with operations in USVI may lead to slower
growth in the future.

GUAM. The U.S. territory of Guam derives a substantial portion of its economic
base from Japanese tourism. With a reduced U.S. military presence on the
island, Guam has relied more heavily on tourism in the past few years. During
its 1997 fiscal year, the government was able to make noticeable progress on
its traditional budgetary problems operating with a balanced budget for that
fiscal year. However, during 1998, the Japanese recession combined with the
impact of typhoon Paka resulted in a budget deficit of $21 million. With
hotels alone accounting for 8.5% of Guam's employment and Japanese tourists
comprising 86% of total visitor arrivals, the Japanese recession and
depreciation of the yen versus the dollar earlier this year have had a
negative impact on the island's economy. Based on these factors, S&P
downgraded Guam's rating to BBB- from BBB with a negative outlook on May 26,
1999. There does seem to be some recent improvement in the Japanese economy.
According to the Guam Visitors Bureau, visitor arrivals increased in April
2000 by 11.8% over April 1999. Visits from Japan, Korea and the U.S. mainland
increased 14.2%, 120.5% and 9.7%, respectively.

<PAGE>

APPENDIX E: TAX EQUIVALENT YIELD TABLES

The tables below give the approximate yield a taxable security must earn
at various income brackets to produce after-tax yields equivalent to those of
tax-exempt bonds yielding from 4% to 7% (6% for Pennsylvania) utilizing the
regular 2000 federal income tax, and state and local tax rates (unless
otherwise noted).

Note: The federal income tax portion of the indicated combined income tax
brackets in the tables does not take into account the effect of a reduction in
the deductibility of itemized deductions (including applicable state and local
taxes) for taxpayers with adjusted gross income in excess of $128,950. The tax
brackets also do not show the effects of phaseout of personal exemptions for
single filers with adjusted gross income in excess of $128,950 and joint
filers with adjusted gross income in excess of $193,400. The effective tax
brackets and equivalent taxable yields of such taxpayers will be higher than
those indicated in the tables.

Yields shown are for illustration purposes only and are not meant to represent
a Fund's actual yield. No assurance can be given that any specific tax exempt
yield will be achieved. While it is expected that each Portfolio will invest
principally in obligations, the interest from which is exempt from the regular
federal income tax and applicable state and local taxes described in the
Prospectus, other income received by a Portfolio and allocated to a Fund may
be taxable. The tables do not take into account state or local taxes, if any,
payable on Fund distributions except for those described in the footnote to
the tables. Also, 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
AMT. The illustrations assume that the AMT is not applicable and do not take
into account any tax credits that may be available.

The information set forth herein 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.

<TABLE>
CALIFORNIA

A FEDERAL AND CALIFORNIA STATE
COMBINED TAX EXEMPT YIELD OF:
SINGLE RETURN JOINT RETURN FEDERAL AND 4% 4.5% 5% 5.5% 6% 6.5% 7%
------------------- ---------------------- CA STATE --------------------------------------------------------------
(TAXABLE INCOME*) TAX BRACKET+ IS EQUIVALENT TO A FULLY TAXABLE YIELD OF:
------------------------------------------- --------------- --------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Up to $ 26,250 Up to $ 43,850 20.10% 5.01% 5.63% 6.26% 6.88% 7.51% 8.14% 8.76%
$ 26,251 - $ 63,550 $ 43,851 - $105,950 34.70 6.13 6.89 7.66 8.42 9.19 9.95 10.72
$ 63,551 - $132,600 $105,951 - $161,450 37.42 6.39 7.19 7.99 8.79 9.59 10.39 11.19
$132,601 - $288,350 $161,451 - $288,350 41.95 6.89 7.75 8.61 9.47 10.34 11.20 12.06
Over $288,350 Over $288,350 45.22 7.30 8.21 9.13 10.04 10.95 11.87 12.78
</TABLE>

*Net amount subject to federal and California personal income tax after
deductions and exemptions.

+The combined tax brackets are calculated using the highest California state
rate within the bracket. Taxpayers with taxable income within each bracket
may have a lower combined tax bracket and taxable equivalent yield than
indicated above. The combined tax brackets assume that California taxes are
itemized deductions for federal income tax purposes. Investors who do not
itemize deductions on their federal income tax return will have a higher
combined tax bracket and taxable equivalent yield than those indicated above.
The applicable federal tax rates within the brackets set forth above are 15%,
28%, 31%, 36% and 39.6% over the same ranges of income.

<TABLE>

FLORIDA
<CAPTION>
YOU ARE IN
THIS
IF THE TAXABLE INCOME ON OR THE TAXABLE INCOME ON FEDERAL IN YOUR BRACKET, A TAX-FREE YIELD OF
YOUR SINGLE RETURN IS* YOUR JOINT RETURN IS* BRACKET 4% 4.5% 5% 5.5% 6% 6.5% 7%
------------------------- ------------------------ ---------- -----------------------------------------------------------
EQUALS THAT OF A TAXABLE INVESTMENT YIELDING
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Up to $ 26,250 Up to $ 43,850 15.00% 4.71% 5.29% 5.88% 6.47% 7.06% 7.65% 8.24%
$ 26,251 - $ 63,550 $ 43,851 - $105,950 28.00 5.56 6.25 6.94 7.64 8.33 9.03 9.72
$ 63,551 - $132,600 $105,951 - $161,450 31.00 5.80 6.52 7.25 7.97 8.70 9.42 10.14
$132,601 - $288,350 $161,451 - $288,350 36.00 6.25 7.03 7.81 8.59 9.38 10.16 10.94
Over $288,350 Over $288,350 39.60 6.62 7.45 8.28 9.11 9.93 10.76 11.59

<CAPTION>
IF THE TAXABLE INCOME ON OR THE TAXABLE INCOME ON
YOUR SINGLE RETURN IS* YOUR JOINT RETURN IS* 4% 4.5% 5% 5.5% 6% 6.5% 7%
------------------------- ------------------------ -----------------------------------------------------------
TAX EQUIVALENT YIELD REFLECTING EXEMPTION FROM
INTANGIBLES TAX:**
Up to $ 26,250 Up to $ 43,850 4.89% 5.48% 6.06% 6.65% 7.24% 7.83% 8.42%
$ 26,251 - $ 63,550 $ 43,851 - $105,950 5.77 6.47 7.16 7.85 8.55 9.24 9.94
$ 63,551 - $132,600 $105,951 - $161,450 6.02 6.75 7.47 8.19 8.92 9.64 10.37
$132,601 - $288,350 $161,451 - $288,350 6.49 7.27 8.05 8.83 9.62 10.40 11.18
Over $288,350 Over $288,350 6.88 7.71 8.53 9.36 10.19 11.02 11.84

* Net amount subject to federal personal income tax after deductions and exemptions.

** A Florida intangibles tax on personal property of $1.50 per $1,000 is generally imposed after exemptions on the value of
stocks, bonds, other evidences of indebtedness and mutual fund shares. An example of the effect of the Florida intangibles
tax on the tax brackets of Florida taxpayers is as follows. A $10,000 investment subject to the tax would require payment of
$15 annually in intangibles taxes. If the investment yielded 5.5% annually or $550, the intangibles tax as a percentage of
income would be $15/$550 or 2.73%. If a taxpayer were in the 36% federal income tax bracket, assuming the intangibles taxes
were deducted as an itemized deduction on the federal return, the taxpayer would be on a combined federal and Florida state
tax bracket of 37.73% [36% + (1 - .36) X 2.73%] with respect to such investment. A Florida taxpayer whose intangible personal
property is exempt or partially exempt from tax due to the availability of exemptions will have a lower taxable equivalent
yield than indicated above.
</TABLE>

<TABLE>

MASSACHUSETTS

<CAPTION>
A FEDERAL AND MASSACHUSETTS STATE
COMBINED TAX EXEMPT YIELD OF:
SINGLE RETURN JOINT RETURN FEDERAL AND 4% 4.5% 5% 5.5% 6% 6.5% 7%
---------------------- ----------------------- MA STATE ------------------------------------------------------------
(TAXABLE INCOME)* TAX BRACKET+ IS EQUIVALENT TO A FULLY TAXABLE YIELD OF:
----------------------------------------------- ------------- ------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Up to $ 26,250 Up to $ 43,850 19.97% 5.00% 5.62% 6.25% 6.87% 7.50% 8.12% 8.75%
$ 26,251 - $ 63,550 $ 43,851 - $105,950 32.21 5.90 6.64 7.38 8.11 8.85 9.59 10.33
$ 63,551 - $132,600 $105,951 - $161,450 35.04 6.16 6.93 7.70 8.47 9.24 10.01 10.78
$132,601 - $288,350 $161,451 - $288,350 39.74 6.64 7.47 8.30 9.13 9.96 10.79 11.62
Over $288,350 Over $288,350 43.13 7.03 7.91 8.79 9.67 10.55 11.43 12.31

* Net amount subject to federal and Massachusetts personal income tax after deductions and exemptions.

+ The combined tax rates include a Massachusetts tax rate of 5.85% (effective January 1, 2000) applicable to taxable bond
interest and dividends, and assume that Massachusetts taxes are itemized deductions for federal income tax purposes. Investors
who do not itemize deductions on their federal income tax return will have a higher combined bracket and higher taxable
equivalent yield than those indicated above. The applicable federal tax rates within the brackets are 15%, 28%, 31%, 36%, and
39.6%, over the same ranges of income.
</TABLE>

<TABLE>
NEW JERSEY

<CAPTION>
A FEDERAL AND NEW JERSEY STATE
COMBINED TAX EXEMPT YIELD OF:
SINGLE RETURN JOINT RETURN FEDERAL AND 4% 4.5% 5% 5.5% 6% 6.5% 7%
------------------------ --------------------- NJ STATE ------------------------------------------------------------
(TAXABLE INCOME)* TAX BRACKET+ IS EQUIVALENT TO A FULLY TAXABLE YIELD OF:
----------------------------------------------- ------------- ------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Up to $ 26,250 Up to $ 43,850 16.49% 4.79% 5.39% 5.99% 6.59% 7.18% 7.78% 8.38%
$ 26,251 - $ 63,550 $ 43,851 - $105,950 31.98 5.88 6.62 7.35 8.09 8.82 9.56 10.29
$ 63,551 - $132,600 $105,951 - $161,450 35.40 6.19 6.97 7.74 8.51 9.29 10.06 10.84
$132,601 - $288,350 $161,451 - $288,350 40.08 6.68 7.51 8.34 9.18 10.01 10.85 11.68
Over $288,350 Over $288,350 43.45 7.07 7.96 8.84 9.73 10.61 11.49 12.38

* Net amount subject to federal and New Jersey personal income tax after deductions and exemptions.

+ The combined federal and New Jersey tax brackets are calculated using the highest New Jersey tax rate applicable within each
bracket. Taxpayers with taxable income within such brackets may have lower combined tax brackets and taxable equivalent yields
than indicated above. The combined tax brackets assume that New Jersey taxes are itemized deductions for federal income tax
purposes. Investors who do not itemize deductions on their federal income tax return will have a higher combined bracket and
higher taxable equivalent yield then those indicated above. The applicable federal tax rates within the brackets are 15%, 28%,
31%, 36% and 39.6%, over the same ranges of income.
</TABLE>

<TABLE>
NEW YORK

<CAPTION>
COMBINED
FEDERAL,
SINGLE RETURN JOINT RETURN NY STATE A FEDERAL, NEW YORK STATE AND NEW YORK CITY TAX EXEMPT YIELD OF:
----------------------- ------------------- AND NY CITY ---------------------------------------------------------------
(TAXABLE INCOME*) TAX BRACKET+ 4% 4.5% 5% 5.5% 6% 6.5% 7%
----------------------------------------------- ------------- ---------------------------------------------------------------
IS EQUIVALENT TO A FULLY TAXABLE YIELD OF:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Up to $ 26,250 Up to $ 43,850 23.60% 5.24% 5.89% 6.54% 7.20% 7.85% 8.51% 9.16%
$ 26,251 - $ 63,550 $ 43,851 - $105,950 35.32 6.18 6.96 7.73 8.50 9.28 10.05 10.82
$ 63,551 - $132,600 $105,951 - $161,450 38.01 6.45 7.26 8.07 8.87 9.68 10.49 11.29
$132,601 - $288,350 $161,451 - $288,350 42.51 6.96 7.83 8.70 9.57 10.44 11.31 12.18
Over $288,350 Over $288,350 45.74 7.37 8.29 9.21 10.14 11.06 11.98 12.90

* Net amount subject to federal, New York state and New York City personal income tax (including New York City personal income
tax surcharges) after deductions and exemptions. New York City tax rate is effective with year beginning in 2000.

+ The first combined tax bracket is calculated using the highest state rate (6.85%) and the highest city rate (including
surcharges) within the bracket. Taxpayers with taxable income below the highest dollar amount in the first bracket may have a
lower combined tax bracket and taxable equivalent yield than indicated above. The applicable state and city rates are at their
maximum (6.85% and 3.315%, respectively) throughout all other brackets. The applicable federal tax rates within each of these
combined tax brackets are 15%, 28%, 31%, 36%, and 39.6% over the same ranges of income.
</TABLE>

The table below gives the approximate yield a taxable security must earn
at various income brackets to produce after-tax yields equivalent to those of
tax-exempt bonds yielding from 4% to 7% under the regular 2000 federal income
tax and 2000 New York state income tax laws.

<TABLE>
<CAPTION>
COMBINED
SINGLE RETURN JOINT RETURN FEDERAL AND A FEDERAL AND NEW YORK STATE TAX EXEMPT YIELD OF:
----------------------- --------------------- NY STATE --------------------------------------------------------------
(TAXABLE INCOME*) TAX BRACKET+ 4% 4.5% 5% 5.5% 6% 6.5% 7%
---------------------------------------------- ------------- --------------------------------------------------------------
IS EQUIVALENT TO A FULLY TAXABLE YIELD OF:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Up to $ 26,250 Up to $ 43,850 20.82% 5.05% 5.68% 6.31% 6.95% 7.58% 8.21% 8.84%
$ 26,251 - $ 63,550 $ 43,851 - $105,950 32.93 5.96 6.71 7.46 8.20 8.95 9.69 10.44
$ 63,551 - $132,600 $105,951 - $161,450 35.73 6.22 7.00 7.78 8.56 9.34 10.11 10.89
$132,601 - $288,350 $161,451 - $288,350 40.38 6.71 7.55 8.39 9.23 10.06 10.90 11.74
Over $288,350 Over $288,350 43.74 7.11 8.00 8.89 9.78 10.66 11.55 12.44

* Net amount subject to federal and New York state and personal income tax after deductions and exemptions.

+ The first combined tax bracket is calculated using the highest New York state rate (6.85%) within the bracket. Taxpayers with
taxable income below the highest dollar amount in the first bracket may have a lower combined tax bracket and taxable
equivalent yield than indicated above. The applicable state rate is the maximum rate, 6.85%, throughout all other brackets.
The applicable federal tax rates within each of these combined brackets are 15%, 28%, 31%, 36%, and 39.6% over the same ranges
of income.

</TABLE>

<TABLE>

OHIO
<CAPTION>
COMBINED
SINGLE RETURN JOINT RETURN FEDERAL AND A FEDERAL AND OHIO STATE TAX EXEMPT YIELD OF:
----------------------- --------------------- OHIO STATE ------------------------------------------------------------
(TAXABLE INCOME*) TAX BRACKET+ 4% 4.5% 5% 5.5% 6% 6.5% 7%
---------------------------------------------- ------------ ------------------------------------------------------------
IS EQUIVALENT TO A FULLY TAXABLE YIELD OF:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Up to $ 26,250 Up to $ 43,850 19.42% 4.96% 5.58% 6.21% 6.83% 7.45% 8.07% 8.69%
$ 26,251 - $ 63,550 $ 43,851 - $105,950 32.97 5.97 6.71 7.46 8.21 8.95 9.70 10.44
$ 63,551 - $132,600 $105,951 - $161,450 35.76 6.23 7.01 7.78 8.56 9.34 10.12 10.90
$132,601 - $288,350 $161,451 - $288,350 40.80 6.76 7.60 8.45 9.29 10.14 10.98 11.82
Over $288,350 Over $288,350 44.13 7.16 8.05 8.95 9.84 10.74 11.63 12.53

* Net amount subject to federal and Ohio personal income tax after deductions and exemptions.

+ The combined tax brackets are calculated using the highest Ohio state rate within the bracket. The combined tax brackets
assume that Ohio taxes are itemized deductions for federal income tax purposes. Investors who do not itemize deductions on
their federal income tax return will have a higher combined bracket and higher taxable equivalent yield than those indicated
above. The applicable federal tax rates within each of these combined brackets are 15%, 28%, 31%, 36% and 39.6% over the same
ranges of income. These rates are before annual tax roll-backs.
</TABLE>

<TABLE>
PENNSYLVANIA

TAXABLE YIELD NEEDED TO MATCH 6% FREE OF
----------------------------------------------
FEDERAL, STATE,
TAXABLE INCOME FEDERAL FEDERAL, STATE COUNTY AND
----------------------------------------------- FEDERAL STATE AND STATE AND COUNTY PHILADELPHIA
SINGLE RETURN JOINT RETURN INCOME TAX INCOME TAX TAXES TAXES (1) TAXES (2)
----------------------- -------------------- ---------- ---------- --------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Up to $ 26,250 Up to $ 43,850 15.00% 2.80% 7.26% 7.80% 8.22%
$ 26,251 - $ 63,550 $ 43,851 - $105,950 28.00 2.80 8.57 9.20 9.70
$ 63,551 - $132,600 $105,951 - $161,450 31.00 2.80 8.95 9.60 10.12
$132,601 - $288,350 $161,451 - $288,350 36.00 2.80 9.65 10.36 10.91
Over $288,350 Over $288,350 39.60 2.80 10.22 10.97 11.56

Equivalent yields are based on a fixed $1,000 investment with all taxes deducted from income. Included in all areas are the
effects of: federal income tax and a 2.8% Pennsylvania income tax. (1) Includes a 4 mil county personal property tax imposed by
most counties; and (2) Includes a 4 mil county personal property tax and a 4.6135% Philadelphia school income tax. The
equivalent yields assume that the Pennsylvania state and local taxes referred to above are itemized deductions for federal
income tax purposes. Investors who do not itemize deductions on their federal income tax return will have a higher equivalent
yield than indicated.

</TABLE>
<PAGE>

APPENDIX F: 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 a 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. Each 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>

STATEMENT OF
ADDITIONAL INFORMATION
August 1, 2000

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 ............................................... 8
Management and Organization ........................................... 9
Investment Advisory and Administrative Services ....................... 13
Other Service Providers ............................................... 14
Purchasing and Redeeming Shares ....................................... 14
Sales Charges ......................................................... 16
Performance ........................................................... 19
Taxes ................................................................. 21
Portfolio Security Transactions ....................................... 23
Financial Statements .................................................. 25

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, 2000, 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.

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 (or anticipated to
be 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.

SECTOR 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.

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.

DURATION. 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, installment purchase
or conditional sales contract (which typically provide for the title to the
leased asset to pass to the governmental issuer) 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.

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.
The investment adviser may also purchase structured derivative products with
greater or lesser credit risk than the underlying bonds. Such bonds may be
rated investment grade, as well as below investment grade. For a description
of municipal bond ratings, see Appendix E.

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.

INTEREST RATE SWAPS AND FORWARD RATE CONTRACTS. Interest rate swaps involve
the exchange by the Portfolio with another party of their respective
commitments to pay or receive interest, e.g., an exchange of fixed rate
payments for floating rate payments. The Portfolio will only enter into
interest rate swaps on a net basis, i.e., the two payment streams are netted
out with the Portfolio receiving or paying, as the case may be, only the net
amount of the two payments. The Portfolio may also enter forward rate
contracts. Under such an agreement, the buyer locks in an interest rate at a
future settlement date. If the interest rate on the settlement date exceeds
the lock rate, the buyer pays the seller the difference between the two rates.
If the lock rate exceeds the interest rate on the settlement date, the seller
pays the buyer the difference between the two rates. Any such gain received by
the Fund would be taxable.

If the other party to an interest rate swap defaults, the Portfolio's risk
of loss consists of the net amount of payments that the Portfolio is
contractually entitled to receive. The net amount of the excess, if any, of
the Portfolio's obligations over its entitlements will be maintained in a
segregated account by the Portfolio's custodian. The Portfolio will not enter
into any interest rate swap or forward rate contract unless the claims-paying
ability of the other party thereto is considered to be investment grade by the
investment adviser. If there is a default by the other party to such a
transaction, the Portfolio will have contractual remedies pursuant to the
agreements related to the transaction. These instruments are traded in the
over-the-counter market.

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. Illiquid securities may also
include those legally restricted as to resale, and securities eligible for
resale pursuant to Rule 144A thereunder. Rule 144A securities may be treated
as liquid securities if the investment adviser determines that such treatment
is warranted. Even if determined to be liquid, holdings of these securities
may increase the level of Fund illiquidity if eligible buyers became
uninterested in purchasing them.

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 own 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.

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), interest rate swaps or forward rate contracts may 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.

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. These
securities may be subject to federal income, state income and/or other state
taxes.

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).

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.

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 and
diversification status, the determination of the "issuer" of a municipal
obligation which is not a general obligation bond will be made by the
Portfolio's 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 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 (40), 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

NORTON H. REAMER (64), Trustee
Chairman of the Board, 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

JACK L. TREYNOR (70), 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 (56), President
Vice President of BMR and Eaton Vance. Officer of various investment companies
managed by Eaton Vance or BMR.

WILLIAM H. AHERN, JR. (41), 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 (43), Vice President
Vice President of BMR and Eaton Vance. Officer of various investment companies
managed by Eaton Vance or BMR.

JAMES L. O'CONNOR (55), Treasurer
Vice President of BMR and Eaton Vance. Officer of various other investment
companies managed by Eaton Vance or BMR.

ALAN R. DYNNER (59), Secretary
Vice President, Secretary and Chief Legal Officer of BMR, Eaton Vance, EVC and
EV. Prior to joining Eaton Vance on November 1, 1996, 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 (64), Assistant Secretary
Vice President of BMR and Eaton Vance. Officer of various investment companies
managed by Eaton Vance or BMR.

A. JOHN MURPHY (37), Assistant Secretary
Vice President of BMR and Eaton Vance. Officer of various investment companies
managed by Eaton Vance or BMR.

ERIC G. WOODBURY (43), 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), Dwight and Reamer 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 and performance of the independent accountants, and
reviewing matters relative to accounting and auditing practices and
procedures, accounting records, and the internal accounting controls of the
Trust, the Portfolio and certain of their service providers.

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, 2000, the
noninterested Trustees of the Trust and the Portfolio earned the following
compensation in their capacities as Trustees of the Trust and the Portfolio,
and for the year ended December 31, 1999, 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 DWIGHT HAYES, III REAMER STOUT(6) TREYNOR
------------ ---------- --------- ---------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Trust(2) ............................... $ 3,099 $ 2,755 $ 3,035 $ 1,394 $ 3,052 $ 2,990
Portfolio............................... 1,245 1,426(3) 1,490 2,819 1,443(4) 1,486
Trust and Fund Complex ................. 160,000 160,000(5) 170,000 160,000 160,000(6) 170,000
----------
(1) As of August 1, 2000, the Eaton Vance fund complex consists of 147 registered investment companies or series thereof.
(2) The Trust consisted of 8 Funds as of March 31, 2000.
(3) Includes $765 of deferred compensation.
(4) Includes $207 of deferred compensation.
(5) Includes $60,000 of deferred compensation.
(6) Includes $16,000 of deferred compensation.
</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 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.

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, 2000, the Portfolio had net assets of $89,936,553.
For the fiscal years ended March 31, 2000, 1999 and 1998, the Portfolio paid
BMR advisory fees of $429,856, $433,524 and $466,594, 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 Trust, 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, John G.L. Cabot, Leo I. Higdon, Jr.,
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, Jeffrey P. Beale, Alan R. Dynner,
Thomas E. Faust, Jr., Thomas J. Fetter, Scott H. Page, Duncan W. Richardson,
William M. Steul, Payson F. Swaffield, Michael W. Weilheimer 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 the 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. PFPC, Inc., P.O. Box 9653, Providence, RI 02904-9653, 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 New York Stock Exchange (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.

SALES CHARGES

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, consulting firms and others 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, the Statement of
Intention section of the account application should be completed 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. If you make a Statement of Intention
the transfer agent is authorized 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. A Statement of Intention does not obligate the
shareholder to purchase or the Fund to sell the full amount indicated in the
Statement.

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 in effect 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 equal to .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 also has in effect 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 3% 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 2.5% 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.

The Class B and Class C Plans also authorize 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. 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. 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 .90% 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 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, who are "interested" persons of the Fund have an indirect financial
interest in the Plans because their employers (or affiliates thereof) receive
distribution and/or service fees under the Plans or agreements related
thereto.

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 ratings, 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, rankings,
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.

-- 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).

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 net income (including tax-exempt income) and net
short-term and long-term capital gains (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, 2000.

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, 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 (i) at least 98% of its ordinary income (not
including tax-exempt income) for such year, (ii) 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 any available
capital loss carryforwards and (iii) 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.

If the Fund does not qualify for taxation as a RIC for any taxable year,
the Fund's taxable income will be subject to corporate income taxes, and all
distributions from earnings and profits, including distributions of net
capital gain (if any), will be taxable to shareholders as ordinary income. In
addition, in order to requalify for taxation as a RIC, the Fund may be
required to recognize unrealized gains, pay substantial taxes and interest,
and make certain distributions.

Investment in securities acquired at market discount may, and zero coupon
and certain other securities generally will cause the Portfolio 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 Portfolio 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. In addition, corporate shareholders must include the full amount of
exempt-interest dividends in computing the preference items for purposes of
the AMT. Shareholders of the Fund are required to report tax-exempt interest
on their federal income tax returns.

Tax-exempt distributions received from the Fund are taken into account in
determining, and may increase, the portion of social security and certain
railroad retirement benefits that may be subject to federal income tax.

Interest on indebtedness incurred or continued by a shareholder to
purchase or carry shares of the Fund is not deductible if the Fund distributes
exempt-interest dividends to the shareholder during the taxable year. Further,
exempt-interest dividends, if any, attributable to interest received on
certain private activity obligations and certain industrial development bonds
will not be tax-exempt to any shareholders who are "substantial users" of the
facilities financed by such obligations or bonds or who are "related persons"
of such substantial users. Persons who are "substantial users" (or persons
related to "substantial users") of facilities financed by industrial
development or private activity bonds should consult their tax advisers before
purchasing shares of the Fund. "Substantial user" is defined in applicable
Treasury regulations to include a "non-exempt person" who regularly uses in
his trade or business a part of a facility financed from the proceeds of
industrial development bonds, and the same definition should apply in the case
of private activity bonds. Any gain attributable to market discount of certain
tax-exempt obligations purchased after April 30, 1993 is taxable as ordinary
income.

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. 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
as well as from other investments. Any distributions by the Fund of its share
of such capital gains (after reduction by any capital loss carryforwards) or
other 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 investments in options, futures contracts, hedging
transactions, forward contracts and certain other transactions will be subject
to special tax rules (including mark-to-market, constructive sale, straddle,
wash sale, short sale and other rules), the effect of which may be to
accelerate income to the Portfolio, defer Portfolio losses, cause adjustments
in the holding periods of Portfolio securities, convert capital gain into
ordinary income and convert short-term capital losses into long term capital
losses. These rules could therefore affect the amount, timing and character of
distributions to investors.

Any loss realized upon the sale or exchange of shares of the Fund held by
a shareholder for 6 months or less (i) will be disallowed to the extent the
shareholder has received any exempt-interest dividends with respect to such
shares and, (ii) will be treated as a long-term capital loss to the extent not
otherwise disallowed and to the extent of any distribution treated as long-
term capital gain with respect to such shares. In addition, all or a portion
of a loss realized on a redemption or other disposition of Fund shares may be
disallowed under "wash sale" rules to the extent the shareholder acquired
other shares of the same Fund (whether through the reinvestment of
distributions or otherwise) within the period beginning 30 days before the
redemption or other disposition of the loss shares and ending 30 days after
such date. Any disallowed loss will result in an adjustment to the
shareholder's tax basis in some or all of the other shares acquired.

Sales charges paid upon a purchase of Class A shares of the Fund cannot be
taken into account for purposes of determining gain or loss on a redemption or
exchange of the shares before the 91st day after their purchase to the extent
a sales charge is reduced or eliminated in a subsequent acquisition of shares
of the Fund or of another fund pursuant to the Fund's reinvestment or exchange
privilege. Any disregarded amounts will result in an adjustment to the
shareholder's tax basis in some or all of any other shares acquired.

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.

The foregoing discussion does not address the special tax rules applicable
to certain classes of investors, such as tax-exempt entities, foreign
investors, 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 AND LOCAL 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, 2000, 1999 and 1998, the Portfolio
paid brokerage commissions of $5,243, $8,942 and $14,673, respectively, on
portfolio security transactions aggregating approximately $59,414,452,
$184,846,877 and $242,021,306, 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, 2000, as
previously filed electronically with the SEC (Accession No.
0000912057-00-026206).

<PAGE>

APPENDIX A

CLASS A FEES, PERFORMANCE AND OWNERSHIP

SERVICE FEES
During the fiscal year ended March 31, 2000, Class A made service fee
payments under the Plan aggregating $108,754, of which $94,919 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 years ended March 31, 2000 and 1999 were $35,612 and
$60,134, respectively, of which $3,584 and $2,943, respectively, was received
by the principal underwriter. For the fiscal years ended March 31, 2000 and
1999, investment dealers received $32,028 and $57,191, respectively, from the
total sales charges.

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

TOTAL RETURN TOTAL RETURN
EXCLUDING MAXIMUM INCLUDING MAXIMUM
VALUE OF VALUE OF SALES CHARGE SALES CHARGE
INVESTMENT INVESTMENT INITIAL INVESTMENT -------------------------- --------------------------
PERIOD* DATE INVESTMENT ON 3/31/00 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Life of Fund 5/22/92 $977.52 $1,390.68 42.27% 4.59% 39.07% 4.29%
5 Years Ended 3/31/00 3/31/95 $977.80 $1,196.51 22.36% 4.12% 19.65% 3.65%
1 Year Ended 3/31/00 3/31/99 $977.64 $ 961.19 -1.68% -1.68% -3.88% -3.88%

----------
*Class A shares were established June 27, 1996.
</TABLE>

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

As at June 30, 2000, 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 June 30, 2000, Merrill Lynch Pierce Fenner & Smith, Jacksonville,
FL and Mars & Co., Boston, MA were the record owners of approximately 17.1%
and 7.3%, 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, 2000, the principal underwriter
paid to investment dealers sales commissions of $25,344 on sales of Class B
shares. During the same period, the Fund made distribution payments to the
principal underwriter under the Distribution Plan aggregating $43,918 and the
principal underwriter received approximately $481,000 in CDSCs imposed on
early redeeming shareholders. These distribution payments and CDSC payments
reduced uncovered distribution charges under the Plan. As at March 31 2000,
the outstanding uncovered distribution charges of the principal underwriter
calculated under the Plan amounted to approximately $1,040,000 (which amount
was equivalent to 16.1% of the net assets attributable to Class B on such
day). During the fiscal year ended March 31, 2000, Class B made service fee
payments to the principal underwriter and investment dealers aggregating
$7,646 of which $6,623 was paid to investment dealers and the balance of which
was retained 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 3/31/00 3/31/00 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
---------------- ---------- ---------- ------------- ------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Life of the Fund 5/22/92 $1,000 $1,385.12 $1,385.12 38.51% 4.23% 38.51% 4.23%
5 Years Ended
3/31/00 3/31/95 $1,000 $1,191.31 $1,191.31 19.13% 3.56% 19.13% 3.56%
1 Year Ended
3/31/00 3/31/99 $1,000 $ 975.45 $ 947.45 -2.46% -2.46% -5.26% -5.26%
</TABLE>

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

As at June 30, 2000, 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 June 30, 2000, Merrill Lynch Pierce Fenner & Smith, Jacksonville,
FL, First Union Securities A/C 6672-9465, Milwaukee, WI were the record owners
of approximately 28.8% and 7.3%, 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, 2000, the principal underwriter
paid to investment dealers sales commissions of $65,988 on sales of Class C
shares. During the same period, the Fund made distribution payments to the
principal underwriter under the Distribution Plan aggregating $75,596 and the
principal underwriter received approximately $7,000 in CDSCs imposed on early
redeeming shareholders. These distribution payments and CDSC payments reduced
uncovered distribution charges under the Plan. As at March 31, 2000, the
outstanding uncovered distribution charges of the principal underwriter
calculated under the Plan amounted to approximately $4,924,000 (which amount
was equivalent to 63.8% of the net assets attributable to Class C on such
day). During the fiscal year ended March 31, 2000, Class C made service fee
payments to the principal underwriter and investment dealers aggregating
$25,198 of which $10,887 was paid to investment dealers and the balance of
which was retained by the principal underwriter.

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 3/31/00 ON 3/31/00 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
-------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Life of Fund 5/22/92 $1,000 $1,364.45 $1,364.45 36.44% 4.03% 36.44% 4.03%
5 Years Ended
3/31/00 3/31/95 $1,000 $1,177.35 $1,177.35 17.74% 3.32% 17.74% 3.32%
1 Year Ended
3/31/00 3/31/99 $1,000 $ 975.37 $ 966.03 -2.57% -2.57% -3.50% -3.50%

------------
*Predecessor Fund commenced operations on December 8, 1993.
</TABLE>

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

As at June 30, 2000, 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 June 30, 2000, Merrill Lynch Pierce Fenner & Smith, Jacksonville,
FL was the record owner of approximately 31.3% of the outstanding Class C
shares which are held on behalf of its 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 2000.

<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 $ 26,250 Up to $ 43,850 15.00% 4.71% 5.29% 5.88% 6.47% 7.06% 7.65% 8.24%
$ 26,251-$ 63,550 $ 43,851-$105,950 28.00 5.56 6.25 6.94 7.64 8.33 9.03 9.72
$ 63,551-$132,600 $105,951-$161,450 31.00 5.80 6.52 7.25 7.97 8.70 9.42 10.14
$132,601-$288,350 $161,451-$288,350 36.00 6.25 7.03 7.81 8.59 9.38 10.16 10.94
Over $288,350 Over $288,350 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 $128,950. 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 $128,950 and joint
filers with adjusted gross income in excess of $193,400. 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

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.

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.

MUNICIPAL SHORT-TERM OBLIGATIONS

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.

SPECULATIVE GRADE

CC: The rating CC is typically applied to debt subordinated to senior debt
that is assigned an actual or implied CCC debt rating.

C1: The rating C1 is reserved for income bonds on which no interest is being
paid.

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.

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

-- 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

HIGH YIELD BOND RATINGS

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.

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

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.

* * * * * * * *

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.

ITEM 23. EXHIBITS

(a)(1) 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 filed July 13, 1995 and incorporated
herein by reference.

(2) Amendment dated June 23, 1997 to the Declaration of Trust filed as
Exhibit (1)(b) to Post-Effective Amendment No. 39 filed March 25,
1998 and incorporated herein by reference.

(3) 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 filed May 27, 1999 and
incorporated herein by reference.

(b)(1) By-Laws as amended March 30, 1992 filed as Exhibit (2)(a) to
Post-Effective Amendment No. 34 filed July 13, 1995 and incorporated
herein by reference.

(2) Amendment to By-Laws of Eaton Vance Investment Trust dated December
13, 1993 filed as Exhibit (2)(b) to Post-Effective Amendment No. 34
filed July 13, 1995 and incorporated herein by reference.

(d) Not applicable

(e)(1) Distribution Agreement between Eaton Vance Investment Trust and
Eaton Vance Distributors, Inc. effective June 23, 1997 with attached
Schedule A effective June 23, 1997 filed as Exhibit (6)(a) to
Post-Effective Amendment No. 39 filed March 25, 1998 and
incorporated herein by reference.

(2) Selling Group Agreement between Eaton Vance Distributors, Inc. and
Authorized Dealers filed as Exhibit (6)(b) to the Post-Effective
Amendment No. 61 filed December 28, 1995 to the Registration
Statement of Eaton Vance Growth Trust (File Nos. 2-22019, 811-1241)
and incorporated herein by reference.

(f) 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).

(g)(1) Custodian Agreement with Investors Bank & Trust Company dated April
15, 1994 filed as Exhibit (8) to Post-Effective Amendment No. 34
filed July 13, 1995 and incorporated herein by reference.

(2) Amendment to Custodian Agreement with Investors Bank & Trust Company
dated October 23, 1995 filed as Exhibit (8)(b) to Post-Effective
Amendment No. 35 filed March 29, 1996 and incorporated herein by
reference.

(3) 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) filed
January 25, 1999 and incorporated herein by reference.

C-1
<PAGE>
(h)(1)(a) Amended Administrative Services Agreement between Eaton Vance
Investment Trust (on behalf of each 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 filed July 13, 1995 and incorporated herein by reference.

(b) 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 filed March 25,
1998 and incorporated herein by reference.

(2) 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.

(i)(1) Opinion of Internal Counsel filed as Exhibit (10) to Post-Effective
Amendment No. 39 filed March 25, 1998 and incorporated herein by
reference.

(2) Consent of Counsel filed herewith.

(j)(1) Consent of Independent Auditors for Eaton Vance California Limited
Maturity Municipals Fund, Eaton Vance Florida Limited Maturity
Municipals Fund, Eaton Vance Massachusetts 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 filed herewith.

(2) Consent of Independent Auditors for Eaton Vance National Limited
Maturity Municipals Fund filed herewith.

(k) Not applicable

(l) Not applicable

(m)(1) 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 filed March 25,
1998 and incorporated herein by reference.

(2) 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 filed March 25,
1998 and incorporated herein by reference.

(3) 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 filed March 25,
1998 and incorporated herein by reference.

(n) Not applicable

(o) Amended and Restated Multiple Class Plan for Eaton Vance Funds dated
June 19, 2000 filed as Exhibit (o)(1) to Registration Statement of
Eaton Vance Mutual Funds Trust (File Nos. 02-90946, 811-4015) filed
June 23, 2000 and incorporated herein by reference.

C-2
<PAGE>
(p)(1) Power of Attorney for Eaton Vance Investment Trust dated April 22,
1997 filed as Exhibit (17)(a) to Post-Effective Amendment No. 38
filed July 23, 1997 and incorporated herein by reference.

(a) Power of Attorney for Eaton Vance Investment Trust dated November
16, 1998 filed as Exhibit (p)(1)(a) to Post-Effective Amendment No.
41 filed May 27, 1999 and incorporated herein by reference.

(2) Power of Attorney for California Limited Maturity Municipals
Portfolio, Florida Limited Maturity Municipals Portfolio,
Massachusetts Limited Maturity Municipals Portfolio, National
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, dated April 22,
1997 filed as Exhibit (17)(b) to Post-Effective Amendment No. 38
filed July 23, 1997 and incorporated herein by reference.

(a) Power of Attorney for California Limited Maturity Municipals
Portfolio, Florida Limited Maturity Municipals Portfolio,
Massachusetts Limited Maturity Municipals Portfolio, National
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 dated November
16, 1998 filed as Exhibit (p)(2)(a) to Post-Effective Amendment No.
41 filed May 27, 1999 and incorporated herein by reference.

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL

Not applicable

ITEM 25. INDEMNIFICATION

Article IV of the Registrant's Amended and Restated Declaration of Trust
permits Trustee and officer indemnification by By-law, contract and vote.
Article XI of the By-Laws contains indemnification provisions. Registrant's
Trustees and officers are insured under a standard mutual fund errors and
omissions insurance policy covering loss incurred by reason of negligent errors
and omissions committed in their capacities as such.

The distribution agreements of the Registrant also provide for reciprocal
indemnity of the principal underwriter, on the one hand, and the Trustees and
officers, on the other.

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

Reference is made to: (i) the information set forth under the caption
"Management and Organization" in the Statement of Additional Information; (ii)
the Eaton Vance Corp. 10-K filed under the Securities Exchange Act of 1934 (File
No. 1-8100); and (iii) the Form ADV of Eaton Vance (File No. 801-15930) and BMR
(File No. 801-43127) filed with the Commission, all of which are incorporated
herein by reference.

ITEM 27. PRINCIPAL UNDERWRITERS

(a) Registrant's principal underwriter, Eaton Vance Distributors, Inc., a
wholly-owned subsidiary of Eaton Vance Management, is the principal
underwriter for each of the investment companies named below:

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Eaton Vance Advisers Senior Floating-Rate Fund
Eaton Vance Growth Trust
Eaton Vance Income Fund of Boston
Eaton Vance Institutional Senior Floating-Rate Fund
Eaton Vance Investment Trust
Eaton Vance Municipals Trust
Eaton Vance Municipals Trust II
Eaton ance Mutual Funds Trust
Eaton Vance Prime Rate Reserves
Eaton Vance Special Investment Trust
EV Classic Senior Floating-Rate Fund

(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address* with Principal Underwriter with Registrant
----------------- -------------------------- ---------------

Albert F. Barbaro Vice President None
Ira Baron Vice President None
Chris Berg Vice President None
Kate B. Bradshaw Vice President None
Mark Carlson Vice President None
Daniel C. Cataldo Vice President None
and Treasurer
Raymond Cox Vice President None
Peter Crowley Vice President None
Anthony DeVille Vice President None
Ellen Duffy Vice President None
Alan R. Dynner Vice President, Secretary Secretary
and
Clerk
Richard A. Finelli Vice President None
Kelly Flynn Vice President None
James Foley Vice President None
Michael A. Foster Vice President None
William M. Gillen Senior Vice President None
Hugh S. Gilmartin Vice President None
James B. Hawkes Vice President and Director Vice President and
Trustee
Perry D. Hooker Vice President None
Kara Lawler Vice President None
Thomas P. Luka Vice President None
John Macejka Vice President None
Geoff Marshall Vice President None
Tim McEwan Vice President None
Joseph T. McMenamin Vice President None
Morgan C. Mohrman Senior Vice President None
James A. Naughton Vice President None
Joseph Nelson Vice President None
Mark D. Nelson Vice President None
Linda D. Newkirk Vice President None
James L. O'Connor Vice President Treasurer
Andrew Ogren Vice President None
George D. Owen, II Vice President None
Philip Pace Vice President None
Margaret Pier Vice President None
Enrique M. Pineda Vice President None
F. Anthony Robinson Vice President None
Frances Rogell Vice President None
Jay S. Rosoff Vice President None
Stephen M. Rudman Vice President None
Kevin Schrader Vice President None
Teresa A. Sheehan Vice President None
William M. Steul Vice President and Director None
Cornelius J. Sullivan Senior Vice President None
Peter Sykes Vice President None
David M. Thill Vice President None
John M. Trotsky Vice President None
Jerry Vainisi Vice President None
John Vaughan Vice President None
Chris Volf Vice President None
Debra Wekstein Vice President None
Wharton P. Whitaker President and Director None
Sue Wilder Vice President None

------------------------------------------
* Address is The Eaton Vance Building, 255 State Street, Boston, MA 02109

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(c) Not applicable

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS

All applicable accounts, books and documents required to be maintained by
the Registrant by Section 31(a) of the Investment Company Act of 1940 and the
Rules promulgated thereunder are in the possession and custody of the
Registrant's custodian, Investors Bank & Trust Company, 200 Clarendon Street,
16th Floor, Mail Code ADM27, Boston, MA 02116, and its transfer agent, PFPC,
Inc., 4400 Computer Drive, Westborough, MA 01581-5120, with the exception of
certain corporate documents and portfolio trading documents which are in the
possession and custody of the administrator and investment adviser. Registrant
is informed that all applicable accounts, books and documents required to be
maintained by registered investment advisers are in the custody and possession
of Eaton Vance Management and Boston Management and Research.

ITEM 29. MANAGEMENT SERVICES

Not applicable

ITEM 30. UNDERTAKINGS

The Registrant undertakes to include the information required by Item 5 of
Form N-1A in its annual reports to shareholders under Rule 30d-1.

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<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Amendment to its Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized in the City of Boston, and the
Commonwealth of Massachusetts on July 24, 2000.

EATON VANCE INVESTMENT TRUST

By: /s/ THOMAS J. FETTER
----------------------------------
Thomas J. Fetter, President

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below by
the following persons in their capacities on July 24, 2000.

Signature Title
--------- -----

/s/ Thomas J. Fetter President (Chief Executive Officer)
---------------------------
Thomas J. Fetter

/s/ James L. O'Connor Treasurer (Principal Financial and
--------------------------- Accounting Officer)
James L. O'Connor

Jessica M. Bibliowicz* Trustee
---------------------------
Jessica M. Bibliowicz

Donald R. Dwight* Trustee
---------------------------
Donald R. Dwight

James B. Hawkes* Trustee
---------------------------
James B. Hawkes

Samuel L. Hayes, III* Trustee
---------------------------
Samuel L. Hayes, III

Norton H. Reamer* Trustee
---------------------------
Norton H. Reamer

Lynn A. Stout* Trustee
---------------------------
Lynn A. Stout

Jack L. Treynor* Trustee
---------------------------
Jack L. Treynor

*By: /s/ Alan R. Dynner
------------------------------------
Alan R. Dynner (As attorney-in-fact)

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SIGNATURES

California Limited Maturity Municipals Portfolio has duly caused this
Amendment to the Registration Statement on Form N-1A of Eaton Vance Investment
Trust (File No. 33-1121) to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Boston and the Commonwealth of
Massachusetts on July 24, 2000.

CALIFORNIA LIMITED MATURITY
MUNICIPALS PORTFOLIO

By: /s/ THOMAS J. FETTER
-----------------------------------
Thomas J. Fetter, President

This Amendment to the Registration Statement on Form N-1A of Eaton Vance
Investment Trust (File No. 33-1121) has been signed below by the following
persons in their capacities on July 24, 2000.