<PAGE>
EV Marathon Gold & Natural Resources Fund
Supplement
to Prospectus dated February 1, 1995
Under the section entitled "Management of the Fund", the following
paragraph replaces the existing paragraph identifying the portfolio manager:
William D. Burt and Barclay Tittmann are the co-portfolio
managers of the Fund. Mr. Burt joined Eaton Vance Management as a Vice
President in November, 1994. Previously he was a Vice President of The
Boston Company (1990-1994) and a Vice President of Baring America Asset
Management (1979-1990). Mr. Tittmann joined Eaton Vance Management as a
Vice President in October, 1993. He was a Vice President, portfolio
manager and analyst with Invesco Management and Research (formerly
Gardner and Preston Moss) from 1970-1993.
March 31, 1995 M-NRPS
<PAGE>
EV MARATHON GOLD & NATURAL RESOURCES FUND
EV MARATHON GOLD & NATURAL RESOURCES FUND (THE "FUND") IS A MUTUAL FUND
SEEKING CAPITAL APPRECIATION AND PROTECTION OF PURCHASING POWER THROUGH
NATURAL RESOURCE RELATED INVESTMENTS.
Shares of the Fund are not deposits of, or guaranteed or endorsed by, any
bank or other insured depository institution, and are not federally insured by
the Federal Deposit Insurance Corporation, the Federal Reserve Board or any
other government agency. Shares of the Fund involve investment risks, including
fluctuations in value and the possible loss of some or all of the principal
investment.
This Prospectus is designed to provide you with information you should know
before investing. Please retain this document for future reference. A Statement
of Additional Information for the Fund dated February 1, 1995, as supplemented
from time to time, has been filed with the Securities and Exchange Commission
and is incorporated herein by reference. The Statement of Additional Information
is available without charge from the Fund's Principal Underwriter, Eaton Vance
Distributors, Inc., 24 Federal Street, Boston, MA 02110 (telephone (800)
225-6265). The Fund's investment adviser is Eaton Vance Management (the
"Investment Adviser") which is located at the same address.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page Page
<S> <C> <C> <C>
Shareholder and Fund Expenses ..................... 2 How to Buy Fund Shares ........................ 17
The Fund's Financial Highlights ................... 3 How to Redeem Fund Shares ..................... 18
The Fund's Investment Objective ................... 4 Reports to Shareholders ....................... 20
How the Fund Invests Its Assets ................... 4 The Lifetime Investing Account/Distribution
Special Considerations ............................ 8 Options ..................................... 20
Organization of the Fund .......................... 12 The Eaton Vance Exchange Privilege ............ 21
Management of the Fund ............................ 13 Eaton Vance Shareholder Services .............. 22
Distribution Plan ................................. 13 Distributions and Taxes ....................... 24
Valuing Fund Shares ............................... 16 Performance Information ...................... 25
</TABLE>
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PROSPECTUS DATED FEBRUARY 1, 1995
<PAGE>
SHAREHOLDER AND FUND EXPENSES
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<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Sales Charges Imposed on Purchases of Shares None
Sales Charges Imposed on Reinvested Distributions None
Fees to Exchange Shares None
Range of Declining Contingent Deferred Sales Charges Imposed on Redemption During the
First Seven Years (as a percentage of redemption proceeds exclusive of all
reinvestments and capital appreciation in the account)<F2> 5.00%-0%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Investment Adviser Fee 0.750%
Rule 12b-1 Distribution (and Service) Fees 0.833%
Other Expenses 1.057%
-----
Total Operating Expenses 2.640%
=====
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following contingent deferred
sales charge and expenses on a $1,000 investment,
assuming (a) 5% annual return and (b) redemption at the end
of each period: $77 $122 $160 $297
An investor would pay the following expenses on the same
investment, assuming (a) 5% annual return and (b) no redemptions: $27 $ 82 $140 $297
<FN>
Notes:
<F1> The purpose of the above table and Example is to assist investors in
understanding the various costs and expenses that investors in the Fund may
bear directly or indirectly. The percentages indicated in the table and the
amounts included in the Example are based on the Fund's fiscal year ended
September 30, 1994. The table and Example should not be considered a
representation of past or future expenses and actual expenses may be
greater or less than those shown. For further information regarding the
expenses of the Fund, see "The Fund's Financial Highlights", "Management of
the Fund" and "How to Redeem Fund Shares." Because the Fund makes payments
under its Distribution Plan adopted under Rule 12b-1, a long-term
shareholder may pay more than the economic equivalent of the maximum
front-end sales charge permitted by a rule of the National Association of
Securities Dealers, Inc. See "Distribution Plan."
<F2> No contingent deferred sales charge is imposed on (a) shares purchased more
than six years prior to the redemption, (b) shares acquired through the
reinvestment of dividends and distributions and (c) any appreciation in
value of other shares in the account (see "How to Redeem Fund Shares"), and
no such charge is imposed on exchanges of Fund shares for shares of the
funds currently listed under "The Eaton Vance Exchange Privilege".
</TABLE>
<PAGE>
THE FUND'S FINANCIAL HIGHLIGHTS
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The following information should be read in conjunction with the financial
statements included in the Statement of Additional Information, all of which has
been so included in reliance upon the report of Deloitte & Touche LLP,
independent certified public accountants, as experts in accounting and auditing.
Further information regarding the performance of the Fund is contained in the
Fund's annual report to shareholders which may be obtained without charge by
contacting the Fund's Principal Underwriter, Eaton Vance Distributors, Inc.
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<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-------------------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988<F2>
---- ---- ---- ---- ---- ---- ------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
beginning of year $13.240 $11.850 $11.140 $12.140 $13.460 $11.420 $10.000
------- ------- ------- ------- ------- ------- -------
INCOME FROM
OPERATIONS:
Net investment
income (loss) .. $(0.050) $(0.090) $(0.083) $ 0.020 $ 0.069 $ 0.060 $ 0.134
Net realized and
unrealized gain
(loss) on
investments .... 2.650 1.480 1.103 (0.570) (0.009) 2.480 1.406
------- ------- ------- ------- ------- ------- -------
Total income
from investment
operations ... $ 2.600 $ 1.390 $ 1.020 $(0.550) $ 0.060 $ 2.540 $ 1.540
------- ------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS FROM:
Net investment
income ......... $ -- $ -- $ -- $(0.020) $(0.069) $(0.074) $(0.120)
Net realized gain
on investments . -- -- (0.060) (0.320) (1.220) (0.280) --
In excess of net
investment income<F4> (0.020) -- (0.250) (0.110) (0.091) (0.146) --
In excess of
realized gain on
investment ..... (0.930) -- -- -- -- -- --
------- ------- ------- ------- ------- ------- -------
Total
distributions $(0.950) $ -- $(0.310) $(0.450) $(1.380) $(0.500) $(0.120)
------- ------- ------- ------- ------- ------- -------
NET ASSET VALUE, end
of year .......... $14.890 $13.240 $11.850 $11.140 $12.140 $13.460 $11.420
======= ======= ======= ======= ======= ======= =======
TOTAL RETURN<F5>.... 20.47% 11.73% 9.44% (4.36)% 0.01% 22.96% 15.39%
RATIOS/SUPPLEMENTAL DATA<F1>:
Net assets, end of
year (000 omitted) $13,055 $ 5,792 $ 3,775 $ 4,042 $ 4,391 $ 2,999 $ 2,424
Ratio of net
expenses to
average daily
net assets ..... 2.64% 3.15% 3.26% 3.29% 2.50% 1.62% 0.99%<F3>
Ratio of net
investment income
(loss) to
average daily net
assets ......... (0.96)% (0.92)% (0.67)% 0.17% 0.33% 0.45% 0.83%<F3>
PORTFOLIO TURNOVER . 17% 57% 32% 27% 35% 53% 25%
<FN>
<F1> For the six years ended September 30, 1993, the operating expenses of the
Fund reflect a reduction of the investment adviser fee, an allocation of
expenses to the Investment Adviser, or both. Had such actions not been
taken, net investment income per share and the ratios would have been as
follows:
NET INVESTMENT
INCOME (LOSS) PER
SHARE ............ $(0.210) $(0.240) $(0.110) $(0.300) $(0.600) $(0.980)
======= ======= ======= ======= ======= =======
RATIOS (As a percentage of
average daily net assets):
Expenses ...... 3.90% 4.65% 4.42% 5.23% 6.87% 7.90%<F3>
Net investment
income (loss) . (1.67)% (2.06)% (0.96)% (2.40)% (4.80)% (6.08)%<F3>
<FN>
<F2> For the period from the start of business, October 21, 1987, to September
30, 1988.
<F3> Computed on an annualized basis.
<F4> Distributions from paid-in capital for the years ended September 30, 1992
and for the years prior thereto have been restated to conform with the
treatment under current financial reporting standards.
<F5> 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. Dividends and distributions, if any, are assumed to be reinvested
at the net asset value on the reinvestment date.
</TABLE>
<PAGE>
THE FUND'S INVESTMENT OBJECTIVE
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THE FUND'S INVESTMENT OBJECTIVE IS CAPITAL APPRECIATION AND PROTECTION OF THE
PURCHASING POWER OF THE SHAREHOLDER'S CAPITAL. The Fund will concentrate its
assets in natural resource related investments and may engage in various active
management strategies, as described below. Although the Fund will derive income
from some of its investments, current income is not an investment objective and
will not be a primary consideration in selecting securities for the Fund's
portfolio. There can be no assurance that the Fund will achieve its investment
objective. The Fund's investment adviser, Eaton Vance Management ("Eaton
Vance"), will manage its investments and affairs.
Except as otherwise indicated in this Prospectus, the investment objective
and policies of the Fund may be changed by the Trustees of the Fund without
shareholder approval, although the Trustees intend to submit material changes in
the investment objective to shareholders for their approval. If any changes were
made, the Fund might have investment objectives different from the objectives
which an investor considered appropriate at the time the investor became a
shareholder in the Fund.
HOW THE FUND INVESTS ITS ASSETS
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BASIC INVESTMENT STRATEGIES. The Fund seeks to achieve its investment objective
through a portfolio of domestic and foreign natural resource related
investments. Under normal investment conditions the Fund expects that it will
invest primarily in common stocks, but it may also hold convertible bonds,
convertible preferred stocks, warrants, preferred stocks and debt securities if
Eaton Vance believes such investments would help to achieve the Fund's
investment objective. The Fund may also invest in debt, preferred or convertible
securities, the value of which is related to the market value of some natural
resource asset ("asset-related securities"). See "Special Considerations --
Asset-Related Securities" below. In making investments for the Fund, Eaton Vance
will seek to identify companies or asset-related securities it believes are
attractively priced relative to the intrinsic value of the underlying natural
resource assets, revenues or profits or are especially well positioned to
benefit during particular periods of investment or inflationary cycles.
The Fund may also from time to time invest to a limited extent in natural
resource-related direct placement securities and venture capital companies and
in gold or silver bullion, strategic metals, and gold or silver coins. See
"Direct Placement Securities and Venture Capital Investments" and "Metals
Investments" below.
WHEN EATON VANCE ANTICIPATES SIGNIFICANT ECONOMIC OR POLITICAL INSTABILITY,
SUCH AS HIGH INFLATION OR TURMOIL IN THE FOREIGN CURRENCY EXCHANGE MARKETS, THE
FUND, IN SEEKING TO PROTECT THE PURCHASING POWER OF SHAREHOLDERS' CAPITAL, MAY
INVEST A MAJORITY OF ITS ASSETS IN COMPANIES THAT EXPLORE FOR, EXTRACT, PROCESS
OR DEAL IN GOLD OR IN ASSET-RELATED SECURITIES INDEXED TO THE VALUE OF SOME
NATURAL RESOURCE SUCH AS GOLD BULLION. Such a change in investment strategy
could require the Fund to liquidate portfolio assets and incur transaction
costs. There can be no assurance that any such change in investment strategy
will result in the realization of the Fund's investment objective.
Except as described below, the Fund under normal circumstances will maintain
at least 65% of its total assets in natural resource related investments or in
asset-related securities.
At times Eaton Vance may judge that investment conditions make the Fund's
basic investment strategies described above inconsistent with the best interests
of shareholders. At such times Eaton Vance may use alternative investment
strategies primarily designed to reduce fluctuations in the value of the Fund's
assets. In implementing these temporary "defensive" strategies, the Fund may
invest in U.S. Government securities and money market securities, including
repurchase agreements, or hold a portion of its assets in cash or cash
equivalents. The Fund may also hold a portion of its assets in cash or money
market instruments, including repurchase agreements and cash equivalents, for
liquidity purposes. It is impossible to predict when, or for how long, the Fund
will use these alternative strategies.
NATURAL RESOURCE RELATED INVESTMENTS. Under normal investment conditions it is
anticipated that the Fund's portfolio will include a significant amount of
domestic and foreign natural resource related investments. A natural resource
related investment includes securities issued by companies engaged in exploring
for, developing, processing, fabricating, producing, distributing, dealing in or
owning natural resources, companies engaged in the creation or development of
technologies for the production or use of natural resources, and companies
engaged in the furnishing of technology, equipment, supplies or services to the
natural resource investment sector. Eaton Vance currently deems a company to be
in the natural resource investment sector (a) if at least 50% of the non-current
assets, capitalization, gross revenues or operating profit of the company in the
most recent or current fiscal year are involved in or result from (whether
directly or indirectly through affiliates) any of the foregoing activities, or
(b) if in Eaton Vance's judgment the company's natural resource assets, revenues
or profit are of such magnitude, when compared with the total non-current
assets, capitalization, gross revenues or operating profit of the company, that
favorable changes in the value of such assets or level of its natural resource
revenues or profit could favorably affect the market value of the equity
securities of the company.
Natural resources include substances, materials and energy derived from
natural sources which have economic value. Examples of natural resources include
precious metals (e.g., gold, silver and platinum), ferrous and non-ferrous
metals (e.g., iron, aluminum and copper), strategic metals (e.g., titanium,
chromium, vanadium and niobium), energy resources (coal, oil, natural gas, oil
shale and uranium), timberland, undeveloped real property and agricultural and
other commodities.
Eaton Vance will seek to identify securities of companies in this investment
sector which, in its judgment, are undervalued relative to the value of their
natural resource assets, revenues or profits in light of current and anticipated
economic or financial conditions. Eaton Vance believes that the market value of
securities of companies that have different kinds of natural resource assets,
revenues or profits may move relatively independently of one another during
different stages of investment and inflationary cycles. Eaton Vance's flexible
investment approach enables it to change the Fund's investment emphasis to
various subsectors within the large natural resource investment sector depending
upon Eaton Vance's outlook as to developments and trends which may affect the
value of and prospects for different types of natural resource related
investments.
In reviewing natural resource related investments available to the Fund,
Eaton Vance will consider, among other investments, domestic and foreign
companies which may
* EXPLORE FOR, FINANCE, DEVELOP, PRODUCE OR HOLD GOLD, SILVER, PLATINUM AND
OTHER PRECIOUS METALS. Eaton Vance will give special emphasis in this
subsector to efficiently managed, low cost gold producers which are able
to operate profitably at the current level of gold prices, thereby
benefiting from any future increase in gold prices.
* EXPLORE FOR, FINANCE, DEVELOP OR PRODUCE ENERGY RESOURCES SUCH AS OIL,
NATURAL GAS, COAL, OIL SHALE AND URANIUM. In this subsector, Eaton Vance
will stress low cost producers whose reserves will allow expansion of
production and those companies with established earnings records in both
rising and falling energy markets.
* EXPLORE FOR, FINANCE, DEVELOP, PRODUCE OR HOLD STRATEGIC METALS, SUCH AS
TITANIUM, CHROMIUM, VANADIUM AND NIOBIUM.
* CREATE AND DEVELOP NEW GEOCHEMICAL TECHNOLOGY OR PROPRIETARY METHODS FOR
DETECTING, DEVELOPING, PRODUCING OR PROCESSING MINERAL DEPOSITS AND OTHER
NATURAL RESOURCES.
* OWN, LEASE OR HAVE RIGHTS TO HOLDINGS OF TIMBER AND TIMBERLANDS. This
would include those companies which manufacture or process pulp, paper,
wood products and other specialty products.
* PROVIDE NATURAL RESOURCE TRANSPORTATION, DISTRIBUTION AND PROCESSING
SERVICES, SUCH AS PIPELINES AND REFINING.
DIRECT PLACEMENT SECURITIES AND VENTURE CAPITAL INVESTMENTS. On occasion the
Fund may make natural resource related investments in "direct placement
securities" issued by a company directly to the Fund. Direct placement
securities are normally not available to small investors, but are often offered
to institutional investors such as the Fund. Various considerations may lead
issuers to seek direct placement of their securities. For example, such issuers
may not be in a position to sell such securities publicly because they need to
raise money within a short period of time or need a relatively small amount of
money to fund their current operations or a particular project. Such issuers may
desire to establish relations with institutional investors such as the Fund
which will have a continuing financial interest in the issuer and perhaps make
further investments. Alternatively, the climate of the public securities market
may be temporarily unfavorable either in general or with respect to the
particular industry or company. The Fund believes there exist opportunities for
acquiring direct placement securities from issuers (particularly from junior
North American gold mining companies) with substantial growth potential in the
natural resources area.
Direct placement securities acquired by the Fund will be common stock, or
obligations or preferred stock having, as part of the package purchased, equity
features such as accompanying shares of common stock, securities convertible
into such shares, or conversion rights or warrants to purchase such shares. The
shares of common stock which are the subject of such equity features will
generally be the shares of the issuer, although in some cases they may be the
shares of a parent or other affiliate of the issuer, and will usually have or be
expected in time to have a public market. Nearly all securities acquired by the
Fund directly from an issuer and shares into which such securities may be
converted or which may be purchased on the exercise of warrants will, however,
be subject to legal or contractual delays in or restrictions on resale and will
therefore initially be treated as "restricted securities" in the Fund's
portfolio.
The Fund is also empowered to make natural resource related investments in
"venture capital companies" -- companies, the securities of which have no public
market at the time of investment. An investment of this type gives the
aggressive investor participation in a private enterprise which may, if
successful, afford significant appreciation potential. Venture capital investing
is by its very nature a high-risk activity which can result in substantial
losses.
Eaton Vance anticipates that the Fund's direct placement securities and
venture capital investments will constitute a small portion of its total
portfolio, and may include companies involved in the production of precious
metals. Advances in extractive and exploration technology as well as
inflationary economic conditions have provided opportunities for small and
medium sized independent companies to profitably exploit previously known gold
orebodies and newly discovered types of orebodies. Eaton Vance believes that
investing in such companies may produce superior investment returns. In this
connection, Eaton Vance will attempt to identify those entrepreneurially managed
emerging companies which concentrate in developing mines that offer the
potential of quick payback, relatively high rates of return at current prices,
and the possibility of orebody extensions.
All of such investments will involve risks to the Fund and its shareholders.
Therefore, the Fund may not invest more than 10% of its total assets, taken at
market value at the time of investment, in certain securities issued by venture
capital companies, certain over-the-counter options, unmarketable securities,
and repurchase agreements maturing in more than seven days. The Fund is further
subject to an additional investment restriction (set forth in the Statement of
Additional Information) which in effect prohibits an investment which would
cause more than 5% of its total assets, taken at market value, to be invested in
companies with less than three years of continuous operations. The Fund's direct
placement securities and venture capital investments are considered speculative
in nature and are not readily marketable.
METALS INVESTMENTS. In addition to investments in natural resource related
securities, the Fund may invest up to 10% of its portfolio in gold or silver
bullion, strategic metals, and gold or silver coins ("Metals Investments"). The
Fund will invest only in metals that are readily marketable, and in coins only
if there is an active quoted market for the coins in question. Coins will not be
purchased for their numismatic value.
In making direct investments in bullion or metals, the Fund normally will
not take possession of the bullion or metals, but instead will obtain receipts
or certificates representing ownership. In the event the Fund does take
possession, the bullion or metals would be delivered to and held by a
nonaffiliated sub-custodian in a segregated account. When it purchases bullion
or metals, either by purchasing receipts or certificates or by having a
sub-custodian physically hold such metals, the Fund will pay for the metals only
upon actual receipt. Although the Fund would incur storage, shipping and other
costs by owning bullion or metals, such costs should be minimized by the use of
receipts or certificates.
The Fund's Metals Investments will not generate income. The return to the
Fund from its Metals Investments will consist solely of market appreciation or
depreciation and gains or losses realized on sales. Accordingly, as indicated
above, the Fund will not invest more than 10% of its total assets, taken at
market value at the time of investment, in Metals Investments.
ACTIVE MANAGEMENT STRATEGIES. The Fund may engage in various active management
strategies, including entering into repurchase agreements and forward foreign
currency exchange contracts, writing and purchasing options on foreign
currencies, and leverage through borrowing. The Fund may write covered call and
covered put options on securities and metals, purchase such call and put
options, and enter into closing purchase and sale transactions with respect
thereto. The Fund may, for hedging or permissible non-hedging purposes, purchase
and sell futures contracts on various securities and metals and other physical
commodities, certificates of deposit, Eurodollar time deposits, securities
indices, economic indices (e.g., the Consumer Price Indices and the Commodity
Research Bureau Futures Price Index) and other financial instruments or indices,
purchase and write call and put options on any of such futures contracts and
enter into closing purchase and sale transactions with respect to such contracts
and options. Options, futures contracts, forward contracts and repurchase
agreements involve credit and other risks which are described below. A
discussion of the greater costs and risks which may result from the Fund's
investment policy with respect to leveraging through borrowing is set forth
under "Special Considerations -- Leverage Through Borrowing". The Fund's
investments in Metals Investments and in certain options, futures contracts and
forward contracts on foreign currencies or commodities may be limited by tax
requirements for qualification of the Fund as a regulated investment company.
The Fund expects that various new types of investments, hedging techniques and
management strategies will be developed and made available to institutional
investors in the future. Eaton Vance will consider making such investments or
using such techniques or strategies if it determines that they are consistent
with the Fund's investment objective and policies.
SPECIAL CONSIDERATIONS
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The Fund's classification under the Investment Company Act of 1940 as a
"non-diversified" investment company allows it to invest more than 5% of its
assets in the securities of any issuer and, during certain periods, to own more
than 10% of the voting securities of an issuer. Since a relatively high
percentage of the Fund's assets may from time to time be invested in the
securities of a limited number of issuers which may be in the natural resource
investment sector, the value of the Fund's shares could be adversely affected by
a single economic, political or regulatory occurrence or other development. In
any event, because the Fund expects to concentrate its investments in the
natural resources sector or various subsectors thereof, the value of its shares
will be especially affected by factors peculiar to this investment sector and
may fluctuate more widely than the value of shares of a mutual fund which
invests in a broader range of industries. The Fund should therefore be
considered as an investment vehicle in the natural resources sector, and not as
a balanced investment program.
FOREIGN INVESTMENTS. There are no prescribed geographic limits on companies in
which the Fund may invest. The Fund has no restrictions on the amount of its
assets that may be invested in securities of foreign issuers and thus the
relative amount of such investments will change from time to time. Under certain
economic, financial and political conditions, the Fund may invest primarily in
foreign securities. Investing in foreign securities may represent a greater
degree of risk than investing in domestic securities, because of the possibility
of exchange rate fluctuations, adoption of adverse exchange control regulations,
delays in settlement of transactions, less publicly- available financial and
other information, more volatile and less liquid markets, less securities
regulation, higher brokerage costs, difficulties in enforcing judgments, less
favorable tax provisions, war, expropriation or nationalization of assets or
other adverse governmental actions. Since the Fund may invest in securities
denominated or quoted in currencies other than the United States dollar, changes
in foreign currency exchange rates may affect the value of securities in the
portfolio and the unrealized appreciation or depreciation of investments insofar
as United States investors are concerned.
The Fund may invest in securities of foreign issuers either directly or in
the form of American Depository Receipts ("ADRs"), European Depository Receipts
("EDRs") or other similar securities convertible into securities of foreign
issuers. These securities are not necessarily denominated in the same currency
as the securities into which they may be converted. ADRs are receipts typically
issued by a U.S. banking institution evidencing ownership of the underlying
securities; EDRs are receipts evidencing a similar arrangement with a European
banking institution. Generally ADRs, in registered form, are designed for use in
U.S. securities markets and EDRs, in bearer form, are designed for use in
European securities markets. Such securities may or may not be listed on a
foreign securities exchange.
GOLD-RELATED INVESTMENTS. As indicated above, under certain circumstances the
Fund may invest a majority of its assets in gold-related companies or in
asset-related securities. Based on historic experience, during periods of
economic or political instability the securities of gold-related companies may
be subject to wide price fluctuations, reflecting the high volatility of gold
prices during such periods. In addition, the instability of gold prices may
result in volatile earnings of gold-related companies which, in turn, may affect
adversely the financial condition of such companies. Gold mining companies also
are subject to the risks generally associated with mining operations.
The major producers of gold include the Republic of South Africa, Russia,
Canada, the United States, Brazil and Australia. Sales of gold by Russia are
largely unpredictable and often relate to political and economic considerations
rather than to market forces. Economic, social and political developments within
South Africa may affect significantly South African gold production.
The Fund does not intend to invest in companies the assets of which are
located primarily in the Republic of South Africa. This current limitation may
affect adversely the Fund's ability to invest in gold-related securities and
during certain periods may result in the Fund restricting its investments to
relatively few gold-related companies.
ASSET-RELATED SECURITIES. The Fund may invest in debt securities, preferred
stocks or convertible securities, the principal amount, redemption terms or
conversion terms of which are related to the market price of some natural
resource asset such as gold bullion. For the purposes of the Fund's investment
policies, these securities are referred to as "asset-related securities". While
the market prices for an asset-related security and the related natural resource
asset generally are expected to move in the same direction, there may not be
perfect correlation in the two price movements. Asset-related securities may not
necessarily be secured by a security interest in or claim on the underlying
natural resource asset. The asset-related securities in which the Fund may
invest may bear interest or pay preferred dividends at below market (or even
relatively nominal) rates. As an example, assume gold is selling at a market
price of $300 per ounce and an issuer sells a $1,000 face amount gold related
note with a seven year maturity, payable at maturity at the greater of either
$1,000 in cash or the then market price of three ounces of gold. If at maturity,
the market price of gold is $400 per ounce, the amount payable on the note would
be $1,200. Certain asset-related securities may be payable at maturity in cash
at the stated principal amount or, at the option of the holder, directly in a
stated amount of the asset to which it is relate. In such instance the Fund may
sell the asset-related security in the secondary market, to the extent one
exists, prior to maturity if the value of the stated amount of the asset exceeds
the stated principal amount and thereby realize the appreciation in the
underlying asset.
CERTAIN INVESTMENT RESTRICTIONS AND POLICIES. The Fund has adopted certain
fundamental investment restrictions and policies which are enumerated in detail
in the Statement of Additional Information and which may not be changed unless
authorized by a shareholder vote. Briefly, among these fundamental restrictions,
the Fund may not (1) pledge more than 33 1/3% of its total assets to secure its
permitted borrowings; (2) purchase more than 10% of the total outstanding voting
securities of an issuer, except when significant economic, political or
financial instability is anticipated; or (3) invest more than 10% of its total
assets in venture capital companies, unmarketable securities, options on foreign
currencies which do not trade on exchanges and repurchase agreements maturing in
more than seven days. These restrictions are considered at the time of
acquisition of assets; the sale of portfolio assets is not required in the event
of a subsequent change in cirumstances. In addition, the Fund has adopted a
fundamental policy which requires it during normal market conditions to
concentrate at least 25% of its total assets in the natural resource group of
industries. Except for the fundamental investment restrictions and policies
specifically enumerated in the Statement of Additional Information, the
investment objective and policies of the Fund are not fundamental policies and
accordingly may be changed by the Trustees without obtaining the approval of the
Fund's shareholders. While not required to do so, the Trustees intend to submit
any material change in the Fund's investment objective to the shareholders for
their approval.
Eaton Vance intends to follow certain other nonfundamental investment
policies (which may be changed without shareholder authorization) in managing
the Fund's portfolio in addition to the other nonfundamental investment policies
described or referred to elsewhere in this Prospectus. These policies may help
to reduce investment risk. It is the Fund's current policy not to invest more
than 10% of its total assets in the securities of any one issuer (excluding U.S.
Government securities, or certificates of deposit, bankers' acceptances or time
deposits of banking or thrift institutions), or to invest more than 5% of its
assets in warrants (excluding warrants acquired in units or attached to
securities, which warrants are deemed to be without value).
The Fund intends to qualify as a regulated investment company under the
Internal Revenue Code (the "Code") and consequently will not be required to pay
any Federal income or excise taxes to the extent that it distributes to its
shareholders its net investment income and net realized capital gains in the
manner required by the Code. The Code currently requires that the Fund, to so
qualify, among other things, at the close of each of its fiscal quarters and
with respect to 50% of its assets, (i) may not have more than 5% of its total
assets invested in the securities of any one issuer (except obligations of the
U.S. Government, its agencies or instrumentalities) and (ii) may not own more
than 10% of the outstanding voting securities of any one issuer. These Code
diversification requirements could affect the Fund's portfolio investments under
certain conditions.
PORTFOLIO TURNOVER. Eaton Vance will change the Fund's investments whenever it
believes a change may be appropriate, without regard to how long a particular
investment may have been held. Changes in investments generally involve expenses
to the Fund, which may include brokerage commissions or dealer mark-ups and
other transaction costs on the disposition of investments and reinvestment of
the proceeds in other investments, and may result in net capital gains
distributions of which will be subject to tax. The Fund's investment policies
and strategies may result in a higher portfolio turnover rate than that
experienced by other mutual funds. The Fund's portfolio turnover rate will not
be a limiting factor when Eaton Vance considers a change in the Fund's
investment portfolio, and in any fiscal year such rate could exceed 200%.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
respect to its permitted investments, but currently intends to do so only with
member banks of the Federal Reserve System or with primary dealers in U.S.
Government securities. Under a repurchase agreement the Fund buys a security at
one price and simultaneously promises to sell that same security back to the
seller at a higher price. The repurchase date is usually within seven days of
the original purchase date. At no time will the Fund commit more than 10% of its
assets to repurchase agreements which mature in more than seven days. Repurchase
agreements are deemed to be loans under the Investment Company Act of 1940. In
all cases Eaton Vance must be satisfied with the creditworthiness of the other
party to the agreement before entering into a repurchase agreement. In the event
of the bankruptcy of the other party to a repurchase agreement, the Fund might
experience delays in recovering its cash. To the extent that, in the meantime,
the value of the securities the Fund purchased may have decreased, the Fund
could experience a loss.
LEVERAGE THROUGH BORROWING. The Fund may borrow from banks or by entering into
reverse repurchase agreements to increase its portfolio holdings of securities,
commodities and commodity contracts. Such borrowings may be on a secured or
unsecured basis at fixed or variable rates of interest. A reverse repurchase
agreement is functionally identical to a repurchase agreement except that the
roles of the parties are reversed so that the Fund will sell the the underlying
security with the promise to repurchase. The Investment Company Act of 1940
requires the Fund to maintain continuous asset coverage of not less than 300%
with respect to all borrowings. This allows the Fund to borrow for such purposes
an amount (when taken together with any borrowings for temporary or emergency
purposes as described below) equal to as much as 50% of the value of its net
assets (not including such borrowings). If such asset coverage should decline to
less than 300% due to market fluctuations or other reasons, the Fund may be
required to dispose of some of its portfolio holdings within three days in order
to reduce the Fund's debt and restore the 300% asset coverage, even though it
may be disadvantageous from an investment standpoint to dispose of assets at
that time. Leveraging will exaggerate any increase or decrease in the net asset
value of the Fund's portfolio, and in that respect may be considered a
speculative practice. The interest which the Fund must pay on borrowed money,
together with any additional fees to maintain a line of credit or any minimum
average balances required to be maintained by the bank, are additional costs
which will reduce or eliminate any net investment income and may also offset any
potential capital gains. Unless the appreciation and income, if any, on assets
acquired with borrowed funds exceed the costs of borrowing, the use of leverage
will diminish the investment performance of the Fund compared with what it would
have been without leverage.
The Fund will not always borrow money for additional investments. The Fund's
willingness to borrow money, and the amount it will borrow, will depend on many
factors the most important of which are market conditions and interest rates.
Successful use of a leveraging strategy depends on Eaton Vance's ability to
correctly predict interest rates and market movements.
The Fund, like many other investment companies, may also borrow money for
temporary or emergency purposes, but such borrowings may not exceed 10% of the
value of the Fund's gross assets when the loan is made.
DERIVATIVE INSTRUMENTS. From time to time, the Fund may purchase or enter into
derivative instruments to enhance return, to hedge against fluctuations in
securities prices or currency exchange rates, to change the duration of the
Fund's fixed income portfolio (if any) or as a substitute for the purchase or
sale of securities or currency. The Fund's investments in derivative securities
may include indexed securities. The Fund's transactions in derivative contracts
may include the purchase or sale of futures contracts on securities, indices or
currency; options on futures contracts; options on securities, indices or
currency; and forward contracts to purchase or sell securities or currency.
All of the Fund's transactions in derivative instruments involve a risk of
loss or depreciation due to unanticipated adverse changes in interest rates,
securities prices or currency exchange rates. The loss on derivative contracts
(other than purchase options) may exceed the Fund's initial investment in these
contracts. In addition, the Fund may lose the entire premium paid for purchased
options that expire before they can be profitably exercised by the Fund.
Indexed Securities. The Fund may invest in indexed securities, including
PERLs and other currency linked securities. The interest rate or, in some cases,
the principal payable at the maturity of an indexed security may change
positively or inversely in relation to one or more interest rates, financial
indices, currency rates or other financial indicators ("reference prices"). An
indexed security may be leveraged to the extent that the magnitude of any change
in the interest rate or principal payable on an indexed security is a multiple
of the change in the reference price. Thus, indexed securities may decline in
value due to adverse market changes in currency exchange rates and other
reference prices.
Derivative Contracts. The Fund may purchase and sell a variety of derivative
contracts, including futures contracts on securities, indices or currency;
options on futures contracts; options on securities, indices or currency;
forward contracts to purchase or sell securities or currency; and currency
swaps. The Fund incurs liability to a counterparty in connection with
transactions in futures contracts, forward contracts and swaps and in selling
options. The Fund pays a premium for purchased options. In addition, the Fund
incurs transactions costs in opening and closing positions in derivative
contracts.
Risks Associated With Derivative Securities and Contracts. The risks
associated with the Fund's transactions in derivative securities and contracts
may include some or all of the following: (1) market risk; (2) leverage and
volatility risk; (3) correlation risk; (4) credit risk; and (5) liquidity and
valuation risk.
Entering into a derivative contract involves a risk that the applicable
market will move against the Fund's position and that the Fund will incur a
loss. For derivative contracts other than purchased options, this loss may
exceed the amount of the initial investment made or the premium received by the
Fund.
Derivative instruments may sometimes increase or leverage the Fund's
exposure to a particular market risk. Leverage enhances the price volatility of
derivative instruments held by the Fund. The Fund may partially offset the
leverage inherent in derivative contracts by maintaining a segregated account
consisting of cash and liquid, high grade debt securities, by holding offsetting
portfolio securities or currency positions or by covering written options.
The Fund's success in using derivative instruments to hedge portfolio assets
depends on the degree of price correlation between the derivative instrument and
the hedged asset. Imperfect correlation may be caused by several factors,
including temporary price disparities among the trading markets for the
derivative instrument, the assets underlying the derivative instrument and the
Fund's assets.
Derivative securities and over-the-counter derivative contracts involve a
risk that the issuer or counterparty will fail to perform its contractual
obligations.
Some derivative securities are not readily marketable or may become illiquid
under adverse market conditions. In addition, during periods of extreme market
volatility, a commodity or exchange may suspend or limit trading in an
exchange-traded derivative contract, which may make the contract temporarily
illiquid and difficult to price. The staff of the Securities and Exchange
Commission ("SEC") takes the position that certain over-the-counter options are
illiquid investments. The Fund's ability to terminate over-the-counter
derivative contracts may depend on the cooperation of the counterparties to such
contracts. For thinly traded derivative securities and contracts, the only
source of price quotations may be the selling dealer or counterparty.
ORGANIZATION OF THE FUND
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EV MARATHON GOLD & NATURAL RESOURCES FUND, A BUSINESS TRUST ESTABLISHED UNDER
MASSACHUSETTS LAW PURSUANT TO A DECLARATION OF TRUST DATED AUGUST 3, 1987, AS
AMENDED, IS A MUTUAL FUND -- AN OPEN-END NON-DIVERSIFIED MANAGEMENT INVESTMENT
COMPANY. The Fund changed its name from Eaton Vance Natural Resources Trust to
EV Marathon Gold & Natural Resources Fund on April 1, 1994. The Trustees of the
Fund are responsible for the overall management and supervision of its affairs.
The Fund has one class of shares of beneficial interest, an unlimited number of
which may be issued. Each share represents an equal proportionate beneficial
interest in the Fund. When issued and outstanding, the shares are fully paid and
nonassessable by the Fund and redeemable as described under "How to Redeem Fund
Shares". Shareholders are entitled to one vote for each full share held.
Fractional shares may be voted proportionately. Shares have no preemptive or
conversion rights and are freely transferable. Upon liquidation of the Fund,
shareholders are entitled to share pro rata in the net assets of the Fund
available for distribution to shareholders.
MANAGEMENT OF THE FUND
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THE FUND ENGAGES EATON VANCE MANAGEMENT ("EATON VANCE") AS ITS INVESTMENT
ADVISER. EATON VANCE, ITS AFFILIATES AND ITS PREDECESSOR COMPANIES HAVE BEEN
MANAGING ASSETS OF INDIVIDUALS AND INSTITUTIONS SINCE 1924 AND MANAGING
INVESTMENT COMPANIES SINCE 1931.
Acting under the general supervision of the Trustees of the Fund, Eaton
Vance manages the Fund's investments and affairs. Under its investment advisory
agreement with the Fund, Eaton Vance receives a monthly advisory fee of .0625%
(equivalent to .75 of 1% annually) of the average daily net assets of the Fund
up to $500 million; the fee will be reduced at various asset levels over $500
million. This fee may be higher than that paid by many other investment
companies.
For the fiscal year ended September 30, 1994, the Fund paid Eaton Vance
advisory fees equivalent to 0.75%, of the Fund's average daily net assets for
such period.
Eaton Vance also furnishes for the use of the Fund office space and all
necessary office facilities, equipment and personnel for servicing the
investments of the Fund. The Fund is responsible for the payment of all expenses
other than those expressly stated to be payable by Eaton Vance under the
investment advisory agreement.
Eaton Vance places the Fund's portfolio security transactions for execution
with many broker-dealer firms and uses its best efforts to obtain execution of
such transactions at prices which are advantageous to the Fund and at reasonably
competitive commission rates. Subject to the foregoing, Eaton Vance may consider
sales of shares of the Fund or of other investment companies sponsored by Eaton
Vance as a factor in the selection of firms to execute portfolio transactions.
Thomas E. Faust, Jr. has acted as the portfolio manager since 1987. He has
been a Vice President of Eaton Vance since 1985.
EATON VANCE OR ITS AFFILIATES ACTS AS INVESTMENT ADVISER TO INVESTMENT COMPANIES
AND VARIOUS INDIVIDUAL AND INSTITUTIONAL CLIENTS WITH ASSETS UNDER MANAGEMENT OF
APPROXIMATELY $15 BILLION. Eaton Vance is a wholly-owned subsidiary of Eaton
Vance Corp., a publicly held holding company. Eaton Vance Corp., through its
subsidiaries and affiliates, engages in investment management and marketing
activities, fiduciary and banking services, oil and gas operations, real estate
investment, consulting, and management, and development of precious metals
properties. Eaton Vance Distributors, Inc. (the "Principal Underwriter" or
"EVD"), 24 Federal Street, Boston, MA 02110, a wholly-owned subsidiary of Eaton
Vance, acts as Principal Underwriter to the Fund.
DISTRIBUTION PLAN
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THE FUND FINANCES DISTRIBUTION ACTIVITIES AND HAS ADOPTED A DISTRIBUTION PLAN
(THE "PLAN") PURSUANT TO RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940.
Rule 12b-1 permits a mutual fund, such as the Fund, to finance distribution
activities and bear expenses associated with the distribution of its shares
provided that any payments made by the Fund are made pursuant to a written plan
adopted in accordance with the Rule. The Plan is also subject to, and complies
with, the sales charge rule of the National Association of Securities Dealers,
Inc. (the "NASD Rule"). The Plan is described in the Statement of Additional
Information, and the following is a brief description of the salient features of
the Plan. The Plan provides that the Fund, subject to the NASD Rule, will pay
sales commissions and distribution fees to the Principal Underwriter only after
and as a result of the sale of shares of the Fund. On each sale of Fund shares
(excluding reinvestment of distributions) the Fund will pay the Principal
Underwriter amounts representing (i) sales commissions equal to 5% 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. The Principal Underwriter
currently expects to pay sales commissions (except on exchange transactions and
reinvestments) to a financial services firm (an "Authorized Firm") at the time
of sale equal to 4% of the purchase price of the shares sold by such Firm. The
Principal Underwriter will use its own funds (which may be borrowed from banks)
to pay such commissions. Because the payment of the sales commissions and
distribution fees to the Principal Underwriter is subject to the NASD Rule
described below, it will take the Principal Underwriter a number of years to
recoup the sales commissions paid by it to Authorized Firms from the payments
received by it from the Fund pursuant to the Plan.
THE NASD RULE REQUIRES THE FUND TO LIMIT ITS ANNUAL PAYMENTS OF SALES
COMMISSIONS AND DISTRIBUTION FEES TO THE PRINCIPAL UNDERWRITER TO AN AMOUNT NOT
EXCEEDING .75% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR EACH FISCAL YEAR.
Accordingly, the Fund accrues daily an amount at the rate of 1/365 of .75% of
the Fund's net assets, and pays such accrued amounts monthly to the Principal
Underwriter. The Plan requires such accruals to be automatically discontinued
during any period in which there are no outstanding Uncovered Distribution
Charges under the Plan. Uncovered Distribution Charges are calculated daily and,
briefly, are equivalent to all unpaid sales commissions and distribution fees to
which the Principal Underwriter is entitled under the Plan less all contingent
deferred sales charges theretofore paid to the Principal Underwriter. The Eaton
Vance organization may be considered to have realized a profit under the Plan if
at any point in time the aggregate amounts of all payments received by the
Principal Underwriter from the Fund pursuant to the Plan, including any
contingent deferred sales charges, have exceeded the total expenses theretofore
incurred by such organization in distributing shares of the Fund. Total expenses
for this purpose will include an allocable portion of the overhead costs of such
organization and its branch offices.
The amount payable to the Principal Underwriter pursuant to the Plan with
respect to each day will be accrued on such day as a liability of the Fund and
will accordingly reduce the Fund's net assets upon such accrual, all in
accordance with generally accepted accounting principles. The amount payable on
each day is limited to 1/365 of .75% of the Fund's net assets on such day. The
level of the Fund's net assets changes each day and depends upon the amount of
sales and redemptions of Fund shares, the changes in the value of the
investments held by the Fund, the expenses of the Fund accrued on such day,
income on portfolio investments of the Fund accrued on such day, and any
dividends and distributions declared by the Fund. The Fund does not accrue
possible future payments as a liability of the Fund or reduce the Fund's current
net assets in respect of unknown amounts which may become payable under the Plan
in the future because the standards for accrual of a liability under such
accounting principles have not been satisfied.
The Plan provides that the Fund will receive all contingent deferred sales
charges and 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. Contingent deferred sales charges and accrued amounts
will be paid to the Principal Underwriter whenever there exist Uncovered
Distribution Charges under the Plan.
The provisions of the Plan relating to payments of sales commissions and
distribution fees to the Principal Underwriter are also included in the
Distribution Agreement between the Fund and the Principal Underwriter. The Plan
continues in effect through and including April 28, 1995, and shall continue in
effect indefinitely thereafter for so long as such continuance is approved at
least annually by the vote of both a majority of (i) the Trustees of the Fund
who are not interested persons of the Fund and who have no direct or indirect
financial interest in the operation of the Plan or any agreements related to the
Plan (the "Rule 12b-1 Trustees") and (ii) all of the Trustees then in office,
and the Distribution Agreement contains a similar provision. The Plan and
Distribution Agreement may be terminated at any time by vote of a majority of
the Rule 12b-1 Trustees or by a vote of a majority of the outstanding voting
securities of the Fund.
Periods with a high level of sales of Fund shares accompanied by a low level
of early redemptions of Fund shares resulting in the imposition of contingent
deferred sales charges will tend to increase the time during which there will
exist Uncovered Distribution Charges of the Principal Underwriter. Conversely,
periods with a low level of sales of Fund shares accompanied by a high level of
early redemptions of Fund shares resulting in the imposition of contingent
deferred sales charges will tend to reduce the time during which there will
exist Uncovered Distribution Charges of the Principal Underwriter.
Because of the NASD Rule limitation on the amount of sales commissions and
distribution fees paid to the Principal Underwriter during any fiscal year, a
high level of sales of Fund shares during the initial years of the Fund's
operations would cause a large portion of the sales commissions attributable to
a sale of Fund shares to be accrued and paid by the Fund to the Principal
Underwriter in fiscal years subsequent to the year in which such shares were
sold. This spreading of sales commissions payments under the Plan over an
extended period would result in the incurrence and payment of increased
distribution fees under the Plan.
For the fiscal year ended September 30, 1994, the Fund paid sales
commissions under the Plan equivalent to .75% (annualized) of the Fund's average
daily net assets. As of September 30, 1994 the outstanding Uncovered
Distribution Charges of the Principal Underwriter calculated under the Plan
amounted to approximately, $435,762 (which amount was equivalent to 3.34% of the
Fund's net assets on such day).
THE PLAN ALSO AUTHORIZES THE FUND TO MAKE PAYMENTS OF SERVICE FEES TO THE
PRINCIPAL UNDERWRITER, AUTHORIZED FIRMS AND OTHER PERSONS IN AMOUNTS NOT
EXCEEDING .25% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR EACH FISCAL YEAR. The
Trustees of the Fund have initially implemented this provision of the Plan by
authorizing the Fund to make quarterly payments of service fees to the Principal
Underwriter and Authorized Firms in amounts not expected to exceed .25% of the
Fund's average daily net assets for any fiscal year based on the value of Fund
shares sold by such persons and remaining outstanding for at least twelve
months. As permitted by the NASD Rule, such payments are made for personal
services and/or the maintenance of shareholder accounts. Service fees are
separate and distinct from the sales commissions and distribution fees payable
by the Fund to the Principal Underwriter, and as such are not subject to
automatic discontinuance when there are no outstanding Uncovered Distribution
Charges of the Principal Underwriter. For the fiscal year ended September 30,
1994, the Fund made service fee payments to the Principal Underwriter and
Authorized Firms equivalent to 0.08% of the Fund's average daily net assets for
such year.
The Plan as currently implemented by the Trustees authorizes payments of
sales commissions and distribution fees to the Principal Underwriter and service
fees to the Principal Underwriter and Authorized Firms which may be equivalent,
on an aggregate basis during any fiscal year of the Fund, to 1% of the Fund's
average daily net assets for such year. The Fund 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.
It is anticipated that the Eaton Vance organization will profit by reason of the
operation of the Plan through increases in the Fund's assets (thereby increasing
the advisory fees payable to Eaton Vance) resulting from sale of Fund shares and
through amounts paid under the Plan to the Principal Underwriter and contingent
deferred sales charges paid to the Principal Underwriter.
The Principal Underwriter may, from time to time, at its own expense,
provide additional incentives to Authorized Firms which employ registered
representatives who sell a minimum dollar amount of the Fund's shares and/or
shares of other funds distributed by the Principal Underwriter. In some
instances, such additional incentives may be offered only to certain Authorized
Firms whose representatives 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 Authorized Firms.
The Fund may, in its absolute discretion, suspend, discontinue or limit the
offering of its shares at any time. In determining whether any such action
should be taken, the Fund's management intends to consider all relevant factors,
including without limitation the size of the Fund, the investment climate and
market conditions, the volume of sales and redemptions of Fund shares, and the
amount of Uncovered Distribution Charges of the Principal Underwriter. The Plan
may continue in effect and payments may be made under the Plan following any
such suspension, discontinuance or limitation of the offering of Fund shares;
however, the Fund is not contractually obligated to continue the Plan for any
particular period of time. Suspension of the offering of Fund shares would not,
of course, affect a shareholder's ability to redeem shares.
VALUING FUND SHARES
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THE FUND VALUES ITS SHARES ONCE ON EACH DAY THE NEW YORK STOCK EXCHANGE (THE
"EXCHANGE") IS OPEN FOR TRADING, as of the close of regular trading on the
Exchange (normally 4:00 p.m. New York time). The Fund's net asset value per
share is determined by its custodian, Investors Bank & Trust Company ("IBT"),
(as agent for the Fund) in the manner authorized by the Trustees of the Fund.
Net asset value is computed by dividing the value of the Fund's total assets,
less its liabilities, by the number of shares outstanding. The Trustees have
established procedures for the valuation of the Fund's assets; in general, these
valuations are based on market value or fair value, with special provisions for
valuing debt obligations, short-term investments, foreign securities, hedging
instruments, direct placement securities, investments in Venture Capital
Companies, and assets not having readily available market quotations.
Authorized Firms must communicate an investor's order to the Principal
Underwriter prior to the close of the Principal Underwriter's business day to
receive that day's net asset value per share. It is the Authorized Firms'
responsibility to transmit orders promptly to the Principal Underwriter, which
is a wholly-owned subsidiary of Eaton Vance. Eaton Vance Corp. owns 77.3% of the
outstanding stock of IBT, the Fund's custodian.
--------------------------------------------------------------------------------
SHAREHOLDERS MAY DETERMINE THE VALUE OF THEIR INVESTMENT BY MULTIPLYING THE
NUMBER OF FUND SHARES OWNED BY THE CURRENT NET ASSET VALUE.
------------------------------------------------------------------------------
HOW TO BUY FUND SHARES
------------------------------------------------------------------------------
SHARES OF THE FUND MAY BE PURCHASED FOR CASH OR MAY BE ACQUIRED IN EXCHANGE FOR
SECURITIES. Investors may purchase shares of the Fund through Authorized Firms
at the net asset value per share of the Fund next determined after an order is
effective. The Fund may suspend the offering of shares at any time and may
refuse an order for the purchase of shares.
An initial investment in the Fund must be at least $1,000. Once an account
has been established the investor may send investments of $50 or more at any
time directly to the Fund's Transfer Agent (the "Transfer Agent") as follows:
The Shareholder Services Group, Inc., BOS725, P.O. Box 1559, Boston, MA 02104.
The $1,000 minimum initial investment is waived for Bank Draft Investing
accounts, which may be established with an investment of $50 or more. See "Eaton
Vance Shareholder Services".
In connection with employee benefit or other continuous group purchase plans
under which the average initial purchase by a participant of the plan is $1,000
or more, the Fund may accept initial investments of less than $1,000 on the part
of an individual participant. In the event a shareholder who is a participant of
such a plan terminates his or her participation in the plan, the shares will be
transferred to a regular individual account. However, such account will be
subject to the right of redemption by the Fund as described below under "How to
Redeem Fund Shares."
ACQUIRING FUND SHARES IN EXCHANGE FOR SECURITIES. IBT, as escrow agent,
will receive securities acceptable to Eaton Vance, as investment adviser, in
exchange for Fund shares at their net asset value as determined above. The
minimum value of securities or securities and cash accepted for deposit is
$5,000. Securities accepted will be sold by IBT as agent for the account of
their owner on the day of their receipt by IBT 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 net asset value per Fund share on the day such proceeds are received.
Eaton Vance will use reasonable efforts to obtain the current market price for
such securities but does not guarantee the best price available. 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 Authorized
Firm, together with a completed and signed Letter of Transmittal in approved
form (available from Authorized Firms), as follows:
IN THE CASE OF BOOK ENTRY:
Deliver through Depository Trust Co.
Broker #2212
Investors Bank & Trust Company
For A/C EV Marathon Gold & Natural Resources Fund
IN THE CASE OF PHYSICAL DELIVERY:
Investors Bank & Trust Company
Attention: EV Marathon Gold & Natural Resources Fund
Physical Securities Processing Settlement Area
89 South Street
Boston, MA 02111
Investors who are contemplating an exchange of securities for shares of the
Fund, or their representatives, must contact Eaton Vance to determine whether
the securities are acceptable before forwarding such securities to IBT. Eaton
Vance reserves the right to reject any securities. Exchanging securities for
Fund 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 for Fund shares.
--------------------------------------------------------------------------------
IF YOU DON'T HAVE AN AUTHORIZED FIRM, EATON VANCE CAN RECOMMEND ONE.
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HOW TO REDEEM FUND SHARES
------------------------------------------------------------------------------
A SHAREHOLDER MAY REDEEM FUND SHARES BY DELIVERING TO THE SHAREHOLDER SERVICES
GROUP, INC., BOS725, P.O. BOX 1559, BOSTON, MASSACHUSETTS 02104, during its
business hours a written request for redemption in good order, plus any share
certificates with executed stock powers. The redemption price will be based on
the net asset value per share next computed after such delivery. Good order
means that all relevant documents must be endorsed by the record owner(s)
exactly as the shares are registered and the signature(s) must be guaranteed by
a member of either the Securities Transfer Association's STAMP program or the
New York Stock Exchange's Medallion Signature Program, or certain banks, savings
and loan institutions, credit unions, securities dealers, securities exchanges,
clearing agencies and registered securities associations as required by a
regulation of the Securities and Exchange Commission (the "Commission") and
acceptable to The Shareholder Services Group, Inc. In addition, in some cases,
good order may require the furnishing of additional documents such as where
shares are registered in the name of a corporation, partnership or fiduciary.
Within seven days after receipt of a redemption request in good order by The
Shareholder Services Group, Inc., the Fund will make payment in cash for the net
asset value of the shares as of the date determined above, reduced by the amount
of any applicable contingent deferred sales charges described below and Federal
income tax required to be withheld.
To sell shares at their net asset value through an Authorized Firm (a
repurchase), a shareholder can place a repurchase order with the Authorized
Firm, which may charge a fee. The value of such shares is based upon the net
asset value calculated after EVD, as the Fund's agent, receives the order. It is
the Authorized Firm's responsibility to transmit promptly repurchase orders to
EVD. Throughout this Prospectus, the word "redemption" is generally meant to
include a repurchase.
If shares were recently purchased, the proceeds of redemption (or
repurchase) will not be sent until the check (including a certified or cashier's
check) received for the shares purchased has cleared. Payment for shares
tendered for redemption may be delayed up to 15 days from the purchase date when
the purchase check has not yet cleared. Redemptions or repurchases may result in
a taxable gain or loss.
Due to the high cost of maintaining small accounts, the Fund reserves the
right to redeem Fund accounts with balances of less than $1,000. Prior to such a
redemption, shareholders will be given 60 days written notice to make an
additional purchase. Thus, an investor making an initial investment of $1,000
would not be able to redeem shares without being subject to this policy.
However, no such redemption would be required by the Fund if the cause of the
low account balance was a reduction in the net asset value of Fund shares. No
contingent deferred sales charge will be imposed with respect to such
involuntary redemptions.
CONTINGENT DEFERRED SALES CHARGE. Shares redeemed within the first six years
of their purchase (except shares acquired through the reinvestment of
distributions) generally will be subject to a contingent deferred sales charge.
This contingent deferred sales charge is imposed on any redemption the amount of
which exceeds the aggregate value at the time of redemption of (a) all shares in
the account purchased more than six years prior to the redemption, (b) all
shares in the account acquired through reinvestment of distributions, and (c)
the increase, if any, of value of all other shares in the account (namely those
purchased within the six years preceding the redemption) over the purchase price
of such shares. Redemptions are processed in a manner to maximize the amount of
redemption proceeds which will not be subject to a contingent deferred sales
charge; i.e., each redemption will be assumed to have been made first from the
exempt amounts referred to in clauses (a), (b) and (c) above, and second through
liquidation of those shares in the account referred to in clause (c) on a
first-in-first-out basis. Any contingent deferred sales charge which is required
to be imposed on share redemptions will be made in accordance with the following
schedule:
YEAR OF CONTINGENT
REDEMPTION DEFERRED SALES
AFTER PURCHASE CHARGE
-------------- --------------
First .............................................. 5%
Second ............................................. 5%
Third .............................................. 4%
Fourth ............................................. 3%
Fifth .............................................. 2%
Sixth .............................................. 1%
Seventh and following .............................. 0%
For shares purchased prior to August 1, 1994, the contingent deferred sales
charge for redemptions within the first year after purchase is 6%. In
calculating the contingent deferred sales charge upon the redemption of Fund
shares acquired in an exchange for shares of a fund currently listed under "The
Eaton Vance Exchange Privilege", the contingent deferred sales charge schedule
applicable to the shares at the time of purchase will apply and the purchase of
Fund shares acquired in the exchange is deemed to have occurred at the time of
the original purchase of exchanged shares. The contingent deferred sales charge
will be waived for shares redeemed (1) pursuant to a Withdrawal Plan (see "Eaton
Vance Shareholder Services") or (2) as part of a required distribution from a
tax-sheltered retirement plan or (3) following the death of all beneficial
owners of such shares, provided the redemption is requested within one year of
death (a death certificate and other applicable documents may be required).
No contingent deferred sales charge will be imposed on shares of the Fund
which have been sold to Eaton Vance, its affiliates or to their respective
employees or clients. The contingent deferred sales charge will be paid to the
Principal Underwriter or the Fund. When paid to the Principal Underwriter it
will reduce the amount of Uncovered Distribution Charges calculated under the
Fund's Distribution Plan. See "Distribution Plan."
--------------------------------------------------------------------------------
THE FOLLOWING EXAMPLE ILLUSTRATES THE OPERATION OF THE CONTINGENT DEFERRED
SALES CHARGE. ASSUME THAT AN INVESTOR PURCHASES $10,000 OF THE FUND'S SHARES
AND THAT 16 MONTHS LATER THE VALUE OF THE ACCOUNT HAS GROWN THROUGH INVESTMENT
PERFORMANCE AND REINVESTMENT OF DISTRIBUTIONS TO $12,000. THE INVESTOR THEN
MAY REDEEM UP TO $2,000 OF SHARES WITHOUT INCURRING A CONTINGENT DEFERRED
SALES CHARGE. IF THE INVESTOR SHOULD REDEEM $3,000 OF SHARES, A CHARGE WOULD
BE IMPOSED ON $1,000 OF THE REDEMPTION. THE RATE WOULD BE 5% BECAUSE IT WAS IN
THE SECOND YEAR AFTER THE PURCHASE WAS MADE AND THE CHARGE WOULD BE $50.
------------------------------------------------------------------------------
REPORTS TO SHAREHOLDERS
------------------------------------------------------------------------------
THE FUND WILL ISSUE TO ITS SHAREHOLDERS SEMI-ANNUAL AND ANNUAL REPORTS
CONTAINING FINANCIAL STATEMENTS. Financial statements included in annual reports
are audited by the Fund's independent certified public accountants. Shortly
after the end of each year, the Fund will furnish all shareholders with
information necessary for preparing their Federal and state income tax returns.
THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS
------------------------------------------------------------------------------
AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF FUND SHARES, THE FUND'S TRANSFER
AGENT, THE SHAREHOLDER SERVICES GROUP, INC., WILL SET UP A LIFETIME INVESTING
ACCOUNT FOR THE INVESTOR ON THE FUND'S RECORDS. This account is a complete
record of all transactions between the investor and the Fund which at all times
shows the balance of shares owned. The Fund will not issue share certificates
except upon request.
Each time a transaction takes place in a shareholder's account, the
shareholder will receive a statement showing complete details of the transaction
and the current share balance in the account. (Under certain plans, statements
may be sent only quarterly). THE LIFETIME INVESTING ACCOUNT PERMITS A
SHAREHOLDER TO MAKE ADDITIONAL INVESTMENTS IN SHARES BY SENDING A CHECK FOR $50
OR MORE TO The Shareholder Services Group, Inc.
Any questions concerning a shareholder's account or services available may
be directed by telephone to EATON VANCE SHAREHOLDER SERVICES at 800-225-6265,
extension 2, or in writing to The Shareholder Services Group, Inc., BOS725, P.O.
Box 1559, Boston, MA 02104 (please provide the name of the shareholder, the Fund
and the account number).
THE FOLLOWING DISTRIBUTION OPTIONS WILL BE AVAILABLE TO ALL LIFETIME
INVESTING ACCOUNTS and may be changed as often as desired by written notice to
the Fund's dividend disbursing agent, The Shareholder Services Group, Inc.,
BOS725, P.O. Box 1559, Boston, MA 02104. The currently effective option will
appear on each confirmation statement.
Share Option -- Dividends and capital gains will be reinvested in additional
shares.
Income Option -- Dividends will be paid in cash and capital gains will be
reinvested in additional shares.
Cash Option -- Dividends and capital gains will be paid in cash.
The Share Option will be assigned if no other option is specified.
Distributions, including those reinvested, will be reduced by any withholding
required under the Federal income tax laws.
If the Income Option or Cash Option has been selected, dividend and/or
capital gains distribution checks which are returned by the United States Postal
Service as not deliverable or which remain uncashed for six months or more will
be reinvested in the account in shares at the then current net asset value.
Furthermore, the distribution option on the account will be automatically
changed to the Share Option until such time as the shareholder selects a
different option.
DISTRIBUTION INVESTMENT OPTION. In addition to the distribution options set
forth above, dividends and/or capital gains may be invested in additional shares
of another Eaton Vance fund. Before selecting this option, a shareholder should
obtain a prospectus of the other Eaton Vance fund and consider its objectives
and policies carefully.
"STREET NAME" ACCOUNTS. If shares of the Fund are held in a "street name"
account with an Authorized Firm, all recordkeeping, transaction processing and
payments of distributions relating to the beneficial owner's account will be
performed by the Authorized Firm, and not by the Fund and its transfer agent.
Since the Fund will have no record of the beneficial owner's transactions, a
beneficial owner should contact the Authorized Firm to purchase, redeem or
exchange shares, to make changes in or give instructions concerning the account,
or to obtain information about the account. The transfer of shares in a "street
name" account to an account with another dealer or to an account directly with
the Fund involves special procedures and will require the beneficial owner to
obtain historical purchase information about the shares in the account from the
Authorized Firm. Before establishing a "street name" account with an investment
firm, or transferring the account to another investment firm, an investor
wishing to reinvest distributions should determine whether the firm which will
hold the shares allows reinvestment of distributions in "street name" accounts.
--------------------------------------------------------------------------------
UNDER A LIFETIME INVESTING ACCOUNT A SHAREHOLDER CAN MAKE ADDITIONAL
INVESTMENTS BY SENDING A CHECK OF $50 OR MORE.
------------------------------------------------------------------------------
THE EATON VANCE EXCHANGE PRIVILEGE
------------------------------------------------------------------------------
Shares of the Fund may be exchanged for shares of one or more other funds in
the Eaton Vance Marathon Group of Funds (currently Eaton Vance Equity-Income
Trust, Eaton Vance Liquid Assets Trust (until March 31, 1995), and any EV
Marathon fund, except EV Marathon Short-Term Strategic Income Fund, Eaton Vance
Prime Rate Reserves and any EV Marathon Limited Maturity Fund which are
distributed with a contingent deferred sales charge, on the basis of the net
asset value per share of each fund at the time of the exchange, provided that
such exchange offers are available only in states where shares of such fund
being acquired may be legally sold. Effective March 31, 1995, the EV Marathon
Group of Funds will also include EV Marathon Short-Term Strategic Income Fund,
any EV Marathon Limited Maturity Fund and, when publicly available, Eaton Vance
Money Market Fund (availability expected on or about April 3, 1995).
Each exchange must involve shares which have a net asset value of at least
$1,000. The exchange privilege may be changed or discontinued without penalty.
Shareholders will be given sixty (60) days notice prior to any termination or
material amendment of the exchange privilege. The Fund does not permit the
exchange privilege to be used for "Market Timing" and may terminate the exchange
privilege for any shareholder account engaged in Market Timing activity. Any
shareholder account for which more than two round-trip exchanges are made within
any twelve month period will be deemed to be engaged in Market Timing.
Furthermore, a group of unrelated accounts for which exchanges are entered
contemporaneously by a financial intermediary will be considered to be engaged
in Market Timing.
The Shareholder Services Group, Inc. makes exchanges at the next determined
net asset value after receiving an exchange request in good order (see "How to
Redeem Fund Shares"). Consult The Shareholder Services Group, Inc. for
additional information concerning the exchange privilege. Applications and
prospectuses of the other funds are available from Authorized Firms or the
Principal Underwriter. The prospectus for each fund describes its investment
objectives and policies, and shareholders should obtain a prospectus and
consider these objectives and policies carefully before requesting an exchange.
No contingent deferred sales charge is imposed on exchanges. No contingent
deferred sales charge is imposed on exchanges. For purposes of calculating the
contingent deferred sales charge upon redemption of shares acquired in an
exchange, the contingent deferred sales charge schedule applicable to the shares
at the time of purchase will apply and the purchase of shares acquired in one or
more exchanges is deemed to have occurred at the time of the original purchase
of the exchanged shares. For the contingent deferred sales charge schedule
applicable to the EV Marathon Group of Funds (except EV Marathon Short-Term
Strategic Income Fund and Class I shares of any EV Marathon Limited Maturity
Fund), see "How to Redeem Fund Shares". The contingent deferred sales charge
schedule applicable to EV Marathon Short-Term Strategic Income Fund or Class I
shares of any EV Marathon Limited Maturity Fund is 3%, 2.5%, 2% or 1% in the
event of a redemption occurring in the first, second, third or fourth year,
respectively, after the original share purchase.
Shares of the other funds in the Eaton Vance Marathon Group of Funds may be
exchanged for Fund shares at net asset value per share, but subject to any
restrictions or qualifications set forth in the current prospectus of any such
fund.
Telephone exchanges are accepted by The Shareholder Services Group, Inc.
provided the investor has not disclaimed in writing the use of the privilege. To
effect such exchanges, call The Shareholder Services Group, Inc. at 800-
262-1122 or, within Massachusetts, 617-573-9403, Monday through Friday, 9:00
a.m. to 4:00 p.m. (Eastern Standard Time). Shares acquired by telephone exchange
must be registered in the same name(s) and with the same address as the shares
being exchanged. Neither the Fund, the Principal Underwriter nor The Shareholder
Services Group, Inc., will be responsible for the authenticity of exchange
instructions received by telephone, provided that reasonable procedures to
confirm that instructions communicated are genuine have been followed. Telephone
instructions will be tape recorded. In times of drastic economic or market
changes, a telephone exchange may be difficult to implement. An exchange may
result in a taxable gain or loss.
EATON VANCE SHAREHOLDER SERVICES
------------------------------------------------------------------------------
THE FUND OFFERS THE FOLLOWING SERVICES, WHICH ARE VOLUNTARY, INVOLVE NO EXTRA
CHARGE, AND MAY BE CHANGED OR DISCONTINUED WITHOUT PENALTY AT ANY TIME. Full
information on each of the services described below and an application, where
required, are available from Authorized Firms or the Principal Underwriter. The
cost of administering such services for the benefit of shareholders who
participate in them is borne by the Fund as an expense to all shareholders.
INVEST-BY-MAIL -- FOR PERIODIC SHARE ACCUMULATION: Once the $1,000 minimum
investment has been made, checks of $50 or more payable to the order of the Fund
may be mailed directly to The Shareholder Services Group, Inc., BOS725, P.O. Box
1559, Boston, MA 02104 at any time -- whether or not distributions are
reinvested. The name of the shareholder, the Fund and the account number should
accompany each investment.
BANK DRAFT INVESTING -- FOR REGULAR SHARE ACCUMULATION: Cash investments of $50
or more may be made through the shareholder's checking account via bank draft
each month or quarter. The $1,000 minimum initial investment and small account
redemption policy are waived for these accounts.
WITHDRAWAL PLAN: A shareholder may draw on shareholdings systematically with
monthly or quarterly checks in an aggregate amount that does not exceed annually
12% of the account balance at the time the Plan is established. Such amount will
not be subject to a contingent deferred sales charge. See "How to Redeem Fund
Shares". A minimum deposit of $5,000 in shares is required.
REINVESTMENT PRIVILEGE: A SHAREHOLDER WHO HAS REPURCHASED OR REDEEMED SHARES MAY
REINVEST, WITH CREDIT FOR ANY CONTINGENT DEFERRED SALES CHARGES PAID ON THE
REDEEMED OR REPURCHASED SHARES, ANY PORTION OR ALL OF THE REPURCHASE OR
REDEMPTION PROCEEDS (PLUS THAT AMOUNT NECESSARY TO ACQUIRE A FRACTIONAL SHARE TO
ROUND OFF THE PURCHASE TO THE NEAREST FULL SHARE) IN SHARES OF THE FUND,
provided that the reinvestment is effected within 30 days after such repurchase
or redemption. Shares are sold to a reinvesting shareholder at the next
determined net asset value following timely receipt of a written purchase order
by the Principal Underwriter or by the Fund (or by the Fund's Transfer Agent).
To the extent that any shares are sold at a loss and the proceeds are reinvested
in shares of the Fund (or other shares of the Fund are acquired within the
period beginning 30 days before and ending 30 days after the date of
redemption), some or all of the loss generally will not be allowed as a tax
deduction. Shareholders should consult their tax advisers concerning the tax
consequences of reinvestments.
TAX-SHELTERED RETIREMENT PLANS: Shares of the Fund are available for purchase
in connection with the following tax-sheltered retirement plans:
--Pension and Profit Sharing Plans for self-employed individuals,
corporations and non-profit organizations;
--Individual Retirement Account Plans for individuals and their non-
employed spouses; and
--403(b) Retirement Plans for employees of public school systems, hospitals,
colleges and other non-profit organizations meeting certain requirements
of the Internal Revenue Code.
Detailed information concerning these plans, including certain exceptions to
minimum investment requirements, and copies of the plans are available from the
Principal Underwriter. This information should be read carefully and
consultation with an attorney or tax adviser may be advisable. The information
sets forth the service fee charged for retirement plans and describes the
Federal income tax consequences of establishing a plan. Under all plans,
dividends and distributions will be automatically reinvested in additional
shares.
DISTRIBUTIONS AND TAXES
------------------------------------------------------------------------------
DISTRIBUTIONS
It is the present policy of the Fund to make (A) at least one distribution
annually (normally in December) of all or substantially all of its investment
income earned, less its expenses, and (B) at least one distribution (normally in
December) of all or substantially all of the net capital gains (reduced by any
available capital loss carryforwards from prior years) realized by the Fund, if
any.
Shareholders may reinvest all distributions in shares of the Fund at net
asset value as of the close of business on the record date.
TAXES
Distributions of the Fund from its net investment income, net short-term
capital gains and certain foreign exchange gains are taxable to shareholders as
ordinary income, whether received in cash or reinvested in additional shares. A
portion of distributions from the Fund's net investment income may qualify for
the dividends-received deduction for corporate shareholders.
Capital gains referred to in clause (B) above, if any, realized on sales of
investments and on options, futures and certain forward foreign currency
exchange transactions during the fiscal year, which ends on September 30, will
usually be distributed prior to the end of December. Distributions from the
Fund's net long-term capital gains are taxable to shareholders as long-term
capital gains, whether paid in cash or additional shares of the Fund and
regardless of the length of time Fund shares have been owned by the shareholder.
If shares are purchased shortly before the record date of a distribution,
the shareholder will pay the full price for the shares and then receive some
portion of the price back as a taxable distribution. The amount, timing and
character of distributions to shareholders may be affected by special tax rules
governing the Fund's activities in options, futures and forward foreign currency
exchange transactions.
Certain distributions declared in October, November or December and paid the
following January will be taxable to shareholders as if received on December 31
of the year in which they are declared.
The Fund may be required to pay foreign taxes with respect to income
(possibly including, in some cases, capital gains) that it derives from
investments in foreign securities. If more than 50% of the value of the Fund's
total assets at the close of its taxable year (September 30) consists of
securities in foreign corporations, the Fund may make an election under Section
853 of the Code to pass through to its shareholders the right to take the credit
or deduction for qualifying foreign taxes paid by the Fund during such year. The
Fund will send a written notice of any such election (not later than 60 days
after the close of its taxable year) to each shareholder indicating the amount
to be treated as the proportionate share of such taxes paid to each foreign
country or U.S. possession and the portion of the distribution which represents
income derived from sources within each country or U.S. possession. Each
shareholder will include in gross income (in addition to taxable distributions
received from the Fund) the proportionate share of such taxes, and can treat
such amount as paid by such shareholder for purposes of the deduction or credit
for foreign taxes on the shareholders own Federal income tax return.
Availability of the deduction or credit for foreign taxes is subject to certain
tax restrictions.
Shareholders will receive annually one or more Forms 1099 to assist in
reporting on their Federal and state income tax returns the prior calendar
year's distributions, proceeds from the redemption or exchange of Fund shares,
and Federal income tax (if any) withheld by the Fund's Transfer Agent.
--------------------------------------------------------------------------------
AS A REGULATED INVESTMENT COMPANY UNDER THE INTERNAL REVENUE CODE, THE FUND
DOES NOT PAY FEDERAL INCOME OR EXCISE TAXES TO THE EXTENT THAT IT DISTRIBUTES
TO SHAREHOLDERS ITS NET INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS IN
THE MANNER REQUIRED BY THE CODE.
------------------------------------------------------------------------------
PERFORMANCE INFORMATION
------------------------------------------------------------------------------
FROM TIME TO TIME, THE FUND MAY ADVERTISE ITS YIELD AND/OR AVERAGE ANNUAL TOTAL
RETURN. The current yield for the Fund will be calculated by dividing the net
investment income per share during a recent 30 day period by the maximum
offering price per share (net asset value) of the Fund on the last day of the
period and annualizing the resulting figure. The Fund's average annual total
return is determined by computing the average annual percentage change in value
of $1,000 invested at the maximum public offering price (net asset value) for
specified periods ending with the most recent calendar quarter, assuming
reinvestment of all distributions. The total return calculation assumes a
complete redemption of the investment and the deduction of any contingent
deferred sales charge at the end of the period. The Fund may also publish annual
and cumulative total return figures from time to time.
The Fund may also publish total return figures which do not take into
account any contingent deferred sales charge which may be imposed upon
redemptions at the end of the specified period. Any performance figure which
does not take into account the contingent deferred sales charge would be reduced
to the extent such charge is imposed upon a redemption.
Investors should note that the investment results of the Fund will fluctuate
over time, and any presentation of the Fund's current yield or total return for
any prior period should not be considered a representation of what an investment
may earn or what an investor's yield or total return may be in any future
period.
<PAGE>
INVESTMENT ADVISER
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
AUDITORS
Deloitte & Touche LLP
125 Summer Street
Boston, MA 02110
EV MARATHON GOLD &
NATURAL RESOURCES FUND
24 FEDERAL STREET
BOSTON, MA 02110
NRP
EV MARATHON GOLD &
NATURAL RESOURCES
FUND
PROSPECTUS
FEBRUARY 1, 1995
