NEW JERSEY LIMITED MATURITY MUNICIPALS PORTFOLIO
POS AMI, 1996-07-26
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           As filed with the Securities and Exchange Commission on July 26, 1996
         
                                                               File No. 811-7226




                          SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C. 20549


                                      FORM N-1A


                                REGISTRATION STATEMENT
                                        UNDER
                          THE INVESTMENT COMPANY ACT OF 1940                 [x]
        
                                   AMENDMENT NO. 3                           [x]
         
        
                             NEW JERSEY LIMITED MATURITY
                                MUNICIPALS PORTFOLIO 
          (formerly called New Jersey Limited Maturity Tax Free Portfolio) 
           ---------------------------------------------------------------
                  (Exact Name of Registrant as Specified in Charter)
         

                                  24 Federal Street
                             Boston, Massachusetts 02110
                             ---------------------------
                       (Address of Principal Executive Offices)


          Registrant's Telephone Number, including Area Code: (617) 482-8260


                                 H. Day Brigham, Jr.
                    24 Federal Street, Boston, Massachusetts 02110
                       (Name and Address of Agent for Service)
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                                  EXPLANATORY NOTE

              This Registration  Statement, as  amended, has  been filed  by the
     Registrant pursuant to Section 8(b) of the  Investment Company Act of 1940,
     as amended.  However, interests in the Registrant have  not been registered
     under the  Securities Act  of 1933,  as amended  (the "1933  Act"), because
     such  interests will  be issued  solely in  private  placement transactions
     that do  not involve any  "public offering" within  the meaning  of Section
     4(2) of the 1933  Act.  Investments in the  Registrant may be made  only by
     investment  companies,  common  or  commingled  trust   funds,  or  similar
     organizations  or  entities  that are  "accredited  investors"  within  the
     meaning of Regulation D  under the 1933 Act.   This Registration Statement,
     as amended, does  not constitute an offer  to sell, or the  solicitation of
     an offer to buy, any interest in the Registrant.
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                                       PART A 

              Responses  to Items 1 through 3  and 5A have been omitted pursuant
     to Paragraph 4 of Instruction F of the General Instructions to Form N-1A.
        
     Item 4.  General Description of Registrant
              New    Jersey   Limited   Maturity   Municipals   Portfolio   (the
     "Portfolio") is  a non-diversified, open-end management  investment company
     which  was organized as a trust under the laws  of the State of New York on
     May  1,  1992. Interests  in the  Portfolio  are issued  solely  in private
     placement  transactions that  do not involve  any "public  offering" within
     the meaning of Section 4(2) of the Securities Act  of 1933, as amended (the
     "1933  Act"). Investments in  the Portfolio  may be  made only by  U.S. and
     foreign investment companies, common or commingled trust funds, or  similar
     organizations  or  entities  that are  "accredited  investors"  within  the
     meaning of  Regulation D under  the 1933 Act.  This Registration Statement,
     as amended, does  not constitute an offer  to sell, or the  solicitation of
     an offer to buy, any "security" within the meaning of the 1933 Act.
         
        
              The  Portfolio's investment  objective is  to  provide (1)  a high
     level  of current  income exempt  from regular  federal income  tax and New
     Jersey State  personal income taxes and  (2) limited principal fluctuation.
     The Portfolio  seeks to  achieve its  objective by  investing primarily  in
     municipal  obligations  (as  described  below)  having  a  dollar  weighted
     average duration  of between three  and nine years  and which are rated  at
     least  investment  grade  by a  major  rating  agency or,  if  unrated, are
     determined to be  of at least  investment grade quality by  the Portfolio's
     investment  adviser,  Boston  Management  and   Research  (the  "Investment
     Adviser" or "BMR").
         
              Additional  information  about  the  investment  policies  of  the
     Portfolio  appears in  Part  B.  The Portfolio  is  not  intended to  be  a
     complete investment program,  and a prospective investor  should take  into
     account its objectives and other investments  when considering the purchase
     of interests in the Portfolio.  The Portfolio cannot assure  achievement of
     its investment objective.
        
     Investment Policies and Risks
              The  Portfolio  seeks  to  achieve  its  investment  objective  by
     investing at least  80% of its net  assets during periods of  normal market
     conditions in  municipal obligations the  interest on which  is exempt from
     regular federal  income  tax and  from  New  Jersey State  personal  income
     taxes.  
         
        
              At  least 80%  of  the  Portfolio's net  assets will  normally  be
     invested in  obligations rated  at least  investment grade at  the time  of
     investment (which  are  those rated  Baa  or  higher by  Moody's  Investors
     Service, Inc.  ("Moody's") or  BBB or  higher by  either Standard  & Poor's
     ("S&P")  or  Fitch  Investors  Service,  Inc.  ("Fitch"))  or,  if unrated,
     determined by  the Investment Adviser  to be of  at least  investment grade

                                        A - 1
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     quality.  The balance  of the  Portfolio's  net assets  may be  invested in
     municipal obligations  rated below investment  grade (but not  lower than B
     by Moody's, S&P or Fitch)  and unrated municipal obligations  considered to
     be of comparable  quality by the Investment Adviser.  Municipal obligations
     rated Baa or  BBB may have  speculative characteristics.  Also, changes  in
     economic  conditions or other  circumstances are  more likely to  lead to a
     weakened capacity  to make principal and interest payments than in the case
     of  higher rated  obligations.    Securities  rated  below Baa  or BBB  are
     commonly known  as "junk  bonds". The  Portfolio may  retain an  obligation
     whose  rating  drops below  B after  its acquisition  if such  retention is
     considered  desirable  by  the Investment  Adviser.  See  "Additional  Risk
     Considerations."   For a description  of municipal obligation ratings,  see
     the Appendix to Part B.
         
              In  pursuing  its investment  objective,  the  Portfolio  seeks to
     invest in a portfolio having a dollar weighted average  duration of between
     three  and nine  years.  Duration represents  the  dollar weighted  average
     maturity of expected  cash flows (i.e., interest and principal payments) on
     one  or more  debt  obligations, discounted  to  their present  values. The
     duration of an obligation is usually not more  than its stated maturity and
     is  related  to  the  degree of  volatility  in  the  market  value of  the
     obligation.  Maturity measures  only the  time until  a bond  or other debt
     security provides its  final payment;  it does  not take  into account  the
     pattern of  a security's payments  over time. Duration  takes both interest
     and principal payments  into account and, thus, in the Investment Adviser's
     opinion, is  a more accurate  measure of a  debt security's sensitivity  to
     changes in interest rates. In computing the duration of  its portfolio, the
     Portfolio will have  to estimate the duration of  debt obligations that are
     subject to  prepayment or redemption by the issuer, based on projected cash
     flows from such obligations.

              The  Portfolio may use various  techniques to shorten  or lengthen
     the  dollar  weighted average  duration  of  its  portfolio, including  the
     acquisition of debt  obligations at a premium or discount, and transactions
     in futures contracts  and options on  futures. Subject  to the  requirement
     that the  dollar weighted average  portfolio duration will  not exceed nine
     years,  the Portfolio  may  invest in  individual  debt obligations  of any
     maturity.
        
              Municipal  Obligations.    Municipal  obligations  include  bonds,
     notes and commercial paper  issued by a municipality for a wide  variety of
     both public and private  purposes, the interest on which is, in the opinion
     of bond counsel,  exempt from regular federal  income tax.  Public  purpose
     municipal  bonds  include  general  obligation  bonds  and  revenue  bonds.
     General obligation bonds  are backed  by the  taxing power  of the  issuing
     municipality.  Revenue bonds  are backed  by the revenues  of a project  or
     facility.     Municipal  notes   include  bond   anticipation  notes,   tax
     anticipation notes and revenue anticipation  notes.  Bond, tax  and revenue
     anticipation  notes are  short-term obligations  that will  be retired with
     the proceeds  of  an  anticipated  bond  issue,  tax  revenue  or  facility
     revenue, respectively.   Under normal market conditions, the Portfolio will
     invest  at least 65% of its total assets in obligations issued by the State

                                        A - 2
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     of New Jersey or its political subdivisions.
         
        
              Distributions  to  corporate investors  of  interest  income  from
     certain types  of  municipal obligations  may  be  subject to  the  federal
     alternative minimum tax (the "AMT").  As  at March 31, 1996, the  Portfolio
     had invested 20.0%  of its net assets  in such obligations.   The Portfolio
     may not be suitable for investors subject to the AMT.
         
        
              Concentration  in  New  Jersey  Issuers     Risks.    Because  the
     Portfolio  will normally  invest  at  least  65%  of its  total  assets  in
     obligations of  New  Jersey issuers,  it  is  more susceptible  to  factors
     adversely affecting such  issuers than mutual funds that do not concentrate
     in  the obligations  of  issuers  located in  a  single State.    Municipal
     obligations of issuers located in a single State may  be adversely effected
     by  economic  developments  and  by  legislation   and  other  governmental
     activities in that  State.  To the  extent that the Portfolio's  assets are
     concentrated  in municipal obligations of New Jersey issuers, the Portfolio
     may be subject to an increased risk of loss.  
         
        
              The fiscal  year 1996 budget  (for the fiscal  period ending  June
     30, 1996) includes total spending of  $15.987 billion, or a 3.14%  increase
     over fiscal 1995.   In addition, New  Jersey adopted a 10%  personal income
     tax cut  retroactive to January  1, 1995.   Furthermore, on June 26,  1995,
     the New Jersey  Legislature passed an  additional 15%  reduction that  took
     effect  January 1, 1996, for  a total personal income  tax cut of 30% since
     January 1,  1994.  State officials estimate the revenue loss resulting from
     these tax cuts at over  $1 billion for fiscal 1996.  To accommodate the tax
     cut, the  fiscal 1996 budget relies  on non-recurring revenues and  the use
     of prior years'  surplus.  Also, a  major focus of the  spending reductions
     has been employer  contributions to retiree health care and pension systems
     which were  cut by  over $863  million in  fiscal 1995.   There  can be  no
     assurance that the tax cuts will not  have an adverse impact on the State's
     finances and the demand for municipal bonds in the State.
         
              New Jersey's general obligation debt is rated  Aa1, AA+ and AA+ by
     Moody's, S&P  and  Fitch, respectively.    The  bond ratings  provided  are
     current as of the  date hereof  and are based  on economic conditions  that
     may not continue; moreover,  there can be no assurance that particular bond
     issues may not be  adversely affected by changes in economic,  political or
     other conditions.   The State's political subdivisions  may have  different
     ratings that are unrelated to the ratings assigned to State obligations. 
        
              Subject to the investment policies set forth above,  the Portfolio
     may  invest in  obligations of  the governments  of Puerto  Rico,  the U.S.
     Virgin Islands and  Guam.  The  Portfolio may invest  up to 5%  of its  net
     assets in obligations issued by the governments of each of the U.S.  Virgin
     Islands and  Guam,  and  may  invest  up  to  35%  of  its  net  assets  in
     obligations  issued by  the  government of  Puerto  Rico.   The economy  of
     Puerto  Rico  is  dominated  by  the  manufacturing  and  service  sectors.

                                        A - 3
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     Although the  economy of  Puerto  Rico expanded  significantly from  fiscal
     1984 through fiscal 1990, the rate  of this expansion slowed during  fiscal
     years 1991, 1992  and 1993.   Growth in the  future will depend on  several
     factors,  including  the  state  of  the  U.S.  economy  and  the  relative
     stability in the  price of oil,  the exchange rate of  the U.S. dollar  and
     the  cost of borrowing.   In addition, proposed  changes to  Section 936, a
     tax  incentive that has encouraged significant  industry growth, could have
     a  dampening effect  on  the  growth or  even  lead  to declines  in  gross
     domestic product.   Although the Puerto Rico unemployment rate has declined
     substantially since  1985, the  seasonally adjusted  unemployment rate  for
     March 1996  was  approximately  12.8%.    The  North  American  Free  Trade
     Agreement ("NAFTA"), which  became effective January 1, 1994, could lead to
     the  loss of  Puerto  Rico's lower  salaried  or  labor intensive  jobs  to
     Mexico.  
         
        
              S&P rates  Puerto Rico  general obligation  debt A,  while Moody's
     rates  it Baa1;  these  ratings have  been in  place  since 1956  and 1976,
     respectively.  S&P assigned a negative outlook on Puerto Rico in 1994.
         
        
              In  addition, the Portfolio may  invest 25%  or more of  its total
     assets in  municipal  obligations  of  the same  type,  including,  without
     limitation, the following:   lease rental  obligations of  State and  local
     authorities; obligations  of State and  local housing finance  authorities,
     municipal utilities systems  or public housing authorities;  obligations of
     hospitals  or life care facilities;  or industrial development or pollution
     control bonds issued  for electric utility systems,  steel companies, paper
     companies or  other purposes.  This may make the Portfolio more susceptible
     to  adverse economic,  political,  or  regulatory occurrences  affecting  a
     particular  category of  issuer.  For  example, health care-related issuers
     are susceptible to medicaid reimbursement policies, and national and  State
     health  care legislation.  As  the Portfolio's  concentration increases, so
     does the potential for fluctuation in the value of its interests.
         
        
              Non-Diversified  Status.     As  a  "non-diversified"   investment
     company under  the Investment  Company Act  of 1940  (the "1940 Act"),  the
     Portfolio may invest,  with respect to 50%  of its total assets,  more than
     5% (but not more  than 25%) of  its total assets  in the securities of  any
     issuer.   The Portfolio  is likely to  invest a  greater percentage of  its
     assets in the securities  of a single issuer than would a diversified fund.
     Therefore,  the  Portfolio  is  more  susceptible  to  any  single  adverse
     economic  or  political  occurrence or  development  affecting  issuers  of
     municipal obligations.
         
        
     Other Investment Practices
              The Portfolio  may engage  in the following  investment practices,
     some  of  which  may  be  considered  to involve  "derivative"  instruments
     because  they  derive their  value  from  another  instrument, security  or
     index.  In  addition, the Portfolio may temporarily borrow  up to 5% of the

                                        A - 4
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     value of  its  total  assets  to  satisfy  redemption  requests  or  settle
     securities transactions.
         
        
              When-Issued Securities.  The  Portfolio may purchase securities on
     a  "when-issued" basis, which  means that  payment and delivery  occur on a
     future settlement  date.  The  price  and  yield  of  such  securities  are
     generally fixed on the  date of commitment to purchase. However, the market
     value of the securities  may fluctuate prior to delivery and  upon delivery
     the  securities may be worth more or  less than the Portfolio agreed to pay
     for  them.  The Portfolio  may  also  purchase  instruments  that give  the
     Portfolio  the  option to  purchase  a  municipal  obligation  when and  if
     issued.
         
        
              Futures  Transactions.    The  Portfolio  may  purchase  and  sell
     various kinds of financial futures  contracts and options thereon  to hedge
     against changes  in interest  rates.   Futures  contracts may  be based  on
     various debt securities  (such as U.S. Government  securities and municipal
     obligations)  and securities  indices  (such as  the  Municipal Bond  Index
     traded on the  Chicago Board of Trade).   Such transactions involve  a risk
     of loss or  depreciation due to unanticipated adverse changes in securities
     prices, which  may  exceed  the  Portfolio's initial  investment  in  these
     contracts.   The Portfolio  may not purchase  or sell  futures contracts or
     related  options,  except for  closing  purchase or  sale  transactions, if
     immediately  thereafter  the sum  of  the  amount  of  margin deposits  and
     premiums paid on the Portfolio's  outstanding positions would exceed  5% of
     the  market  value of  the  Portfolio's  net  assets.   These  transactions
     involve transaction costs.  There  can be no assurance that  the Investment
     Adviser's use of futures will be advantageous to the Portfolio.
         
        
              Insured Obligations.   The Portfolio may  purchase municipal bonds
     that  are additionally  secured by  insurance, bank  credit  agreements, or
     escrow accounts. The  credit quality of companies which provide such credit
     enhancements  will  affect  the  value of  those  securities.  Although the
     insurance  feature  reduces  certain  financial  risks,  the  premiums  for
     insurance and  the higher  market price  paid for  insured obligations  may
     reduce current  yield. Insurance generally  will be obtained from  insurers
     with  a claims-paying ability rated Aaa by Moody's  or AAA by S&P or Fitch.
     The  insurance  does   not  guarantee  the  market  value  of  the  insured
     obligations or the net asset value of the Portfolio's interests.
         
        
     Additional Risk Considerations
              Many  municipal obligations  offering high  current income  are in
     the lowest investment grade category  (Baa or BBB), lower categories or may
     be unrated.   As  indicated above,  the Portfolio may  invest in  municipal
     obligations rated below investment grade (but not lower than  B by Moody's,
     S&P or  Fitch) and comparable  unrated obligations.   The lowest investment
     grade,  lower rated and comparable  unrated municipal  obligations in which
     the  Portfolio may invest will have  speculative characteristics in varying

                                        A - 5
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     degrees.   While  such  obligations may  have  some quality  and protective
     characteristics, these  characteristics can  be expected  to  be offset  or
     outweighed by uncertainties or major risk  exposures to adverse conditions.
     Lower  rated and  comparable unrated  municipal obligations  are subject to
     the  risk of an issuer's inability  to meet principal and interest payments
     on the obligations (credit risk) and may  also be subject to greater  price
     volatility  due to  such  factors  as  interest  rate  sensitivity,  market
     perception  of  the  creditworthiness of  the  issuer  and  general  market
     liquidity (market risk).   Lower rated or unrated municipal obligations are
     also  more likely  to  react to  real  or perceived  developments affecting
     market and credit risk than are more highly rated obligations,  which react
     primarily  to  movements in  the  general  level of  interest  rates.   The
     Investment Adviser  seeks  to minimize  the  risks  of investing  in  below
     investment grade  securities through  professional investment  analysis and
     attention  to   current  developments  in   interest  rates  and   economic
     conditions.   When  the  Portfolio  invests  in  lower  rated  and  unrated
     municipal obligations,  the achievement  of the  Portfolio's goals is  more
     dependent on the  Investment Adviser's ability  than would  be the case  if
     the Portfolio were  investing in municipal obligations in the higher rating
     categories.
         
        
              The Portfolio  may retain  defaulted obligations in  its portfolio
     when such retention  is considered desirable by the Investment Adviser.  In
     the case  of a  defaulted obligation,  the Portfolio  may incur  additional
     expense seeking recovery  of its investment.  Municipal obligations held by
     the Portfolio that are rated  below investment grade, but  that, subsequent
     to the assignment of such rating, are backed by escrow accounts  containing
     U.S. Government  obligations, may be determined  by the  Investment Adviser
     to  be  of  investment  grade  quality  for  purposes  of  the  Portfolio's
     investment policies.    The  Portfolio  may  retain  in  its  portfolio  an
     obligation whose  rating  drops below  B  after  its acquisition,  if  such
     retention  is considered  desirable by  the  Investment Adviser;  provided,
     however, that holdings  of obligations rated below Baa  or BBB will be less
     than 35% of net  assets.  In the event the rating  of an obligation held by
     the  Portfolio  is  downgraded,  causing  the  Portfolio  to   exceed  this
     limitation, the Investment  Adviser will (in  an orderly  fashion within  a
     reasonable period  of  time)  dispose  of  such  obligations  as  it  deems
     necessary  in  order   to  comply  with  the  Portfolio's   credit  quality
     limitations.  
         
        
              The  net asset value  of the Portfolio's interests  will change in
     response to  fluctuations in prevailing  interest rates and  changes in the
     value  of  the securities  held  by  the Portfolio.    When  interest rates
     decline, the value  of securities held by the  Portfolio can be expected to
     rise.  Conversely, when  interest rates rise, the  value of most  portfolio
     security holdings  can  be expected  to  decline.   Because  the  Portfolio
     intends to  limit  its average  portfolio duration  to  no more  than  nine
     years, its net asset  value can be expected to be less sensitive to changes
     in interest  rates than  that of  a fund  with a  longer average  portfolio
     duration.   Changes  in the  credit  quality of  the  issuers of  municipal

                                        A - 6
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     obligations held by the  Portfolio will affect the principal  value of (and
     possibly the income earned on) such  obligations.  In addition, the  values
     of such securities are affected  by changes in general  economic conditions
     and  business  conditions  affecting  the  specific   industries  of  their
     issuers.   Changes  by recognized  rating services  in their  ratings of  a
     security  and in the  ability of the issuer  to make  payments of principal
     and interest  may also  affect the  value of  the Portfolio's  investments.
     The amount  of information about  the financial condition  of an  issuer of
     municipal obligations  may not be  as extensive as  that made available  by
     corporations whose  securities are publicly  traded.  An  investment in the
     Portfolio will not constitute a complete investment program.
         
        
              At times, a  substantial portion of the Portfolio's assets  may be
     invested in  securities as to  which the Portfolio,  by itself or  together
     with other accounts managed by  the Investment Adviser and  its affiliates,
     holds a major portion  or all of such securities.  Under  adverse market or
     economic conditions or  in the event  of adverse  changes in the  financial
     condition  of the  issuer, the Portfolio  could find  it more  difficult to
     sell such securities when the  Investment Adviser believes it  advisable to
     do  so or may be able to sell such  securities only at prices lower than if
     such securities  were more widely  held.  Under such  circumstances, it may
     also be more difficult  to determine the fair value of such  securities for
     purposes of computing the Portfolio's net asset value.
         
        
              The  secondary market  for  some municipal  obligations (including
     issues that are  privately placed with  the Portfolio) is less  liquid than
     that for taxable  debt obligations or  other more  widely traded  municipal
     obligations.  The Portfolio  will not invest in illiquid securities if more
     than 15% of  its net assets  would be invested in  securities that are  not
     readily marketable.   No established resale  market exists  for certain  of
     the municipal  obligations in which  the Portfolio may invest.   The market
     for obligations rated  below investment  grade is  also likely  to be  less
     liquid than  the market  for higher rated  obligations.   As a result,  the
     Portfolio may be unable to  dispose of these municipal obligations at times
     when it would  otherwise wish  to do  so at the  prices at  which they  are
     valued.
         
        
         
        
              Some of the securities in which the Portfolio invests may  include
     so-called  "zero-coupon"  bonds,  whose  values  are   subject  to  greater
     fluctuation in  response to  changes in  market interest  rates than  bonds
     that  pay  interest  currently.     Zero-coupon  bonds  are  issued   at  a
     significant discount  from face  value and  pay interest  only at  maturity
     rather than at  intervals during the life  of the security.   The Portfolio
     is required  to accrue  and distribute income  from zero-coupon bonds  on a
     current  basis, even though  it does  not receive that  income currently in
     cash.   Thus, the  Portfolio may have to  sell other  investments to obtain
     cash needed to make income distributions.

                                        A - 7
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              The Portfolio  may invest in municipal  leases, and participations
     in municipal leases.  The obligation of the issuer to meet its  obligations
     under such leases is often subject to the appropriation  by the appropriate
     legislative body, on an annual  or other basis, of funds for the payment of
     the obligations.  Investments in  municipal leases are thus subject  to the
     risk that  the legislative body  will not make  the necessary appropriation
     and the  issuer  will  not  otherwise  be  willing  or  able  to  meet  its
     obligation.
         
        
              The   Portfolio   has   adopted  certain   fundamental  investment
              restrictions that are  enumerated in detail in Part B and that may
              not be changed unless authorized  by an investor vote.  Except for
              such enumerated  restrictions and  as otherwise indicated  in this
              Part A,  the investment  objective and  policies of  the Portfolio
              are  not fundamental policies  and accordingly  may be  changed by
              the Trustees  of the Portfolio without  obtaining the approval  of
              the investors in  the Portfolio.  If any  changes were made in the
              Portfolio's  investment objective,  the  Portfolio might  have  an
              investment  objective   different  from  the   objective  that  an
              investor considered  appropriate at  the time the  investor became
              an interest holder in the Portfolio. 
         
     Item 5.  Management of the Portfolio
              The  Portfolio is organized as a trust under the laws of the State
     of New York.  The Portfolio intends  to comply with all  applicable federal
     and state securities laws.

              Investment  Adviser.   The Portfolio  engages BMR,  a wholly-owned
     subsidiary of 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 Board of  Trustees of
     the Portfolio,  BMR manages the  Portfolio's investments and  affairs.  BMR
     also furnishes for the  use of the Portfolio office space and all necessary
     office facilities,  equipment and personnel  for servicing the  investments
     of  the  Portfolio.   Under  its  investment  advisory  agreement with  the
     Portfolio, BMR receives a monthly advisory fee equal to the aggregate of:
         
              (a) a daily asset-based fee computed by applying the annual  asset
                    rate  applicable to  that   portion  of the  total daily net
                    assets in each Category as indicated below, plus

              (b)  a  daily income-based  fee  computed  by  applying the  daily
                    income rate applicable to   that  portion of the total daily
                    gross  income  (which  portion shall  bear  the  same       
                    relationship to the total daily gross income on such day  as
                    that portion  of the total    daily net  assets in  the same

                                        A - 8
<PAGE>






                    Category bears to the total daily net assets on such day) in
                    each Category as indicated below:

                                                                 Annual  Daily
                                                                 Asset   Income
     Category         Daily Net Assets                           Rate    Rate
     1                Up to $500 million                         0.300%  3.00%
     2                $500 million but less than $1 billion      0.275%  2.75%
     3                $1 billion but less than $1.5 billion      0.250%  2.50%
     4                $1.5 billion but less than $2 billion      0.225%  2.25%
     5                $2 billion but less than $3 billion        0.200%  2.00%
     6                $3 billion and over                        0.175%  1.75%
        
              As   at  March  31,   1996,  the  Portfolio  had   net  assets  of
     $80,172,576. For the fiscal  year ended March 31, 1996, the  Portfolio paid
     BMR advisory fees equivalent to 0.46% of the Portfolio's  average daily net
     assets for such year. 
         
        
              BMR  or  Eaton  Vance  acts as  investment  adviser  to investment
     companies  and various  individual and  institutional  clients with  assets
     under  management  of over  $16  billion.  Eaton  Vance  is a  wholly-owned
     subsidiary  of Eaton  Vance  Corp., a  publicly-held holding  company that,
     through its  subsidiaries and affiliates,  engages primarily in  investment
     management, administration and marketing activities. 
         
        
              William  H.  Ahern  has  acted as  the  Portfolio  manager of  the
     Portfolio  since October 1994.  He  is a Vice President  of Eaton Vance and
     has been an employee of Eaton Vance since 1989.
         
        
              Municipal obligations are normally traded on a net basis  (without
     commission) through broker-dealers and  banks acting for their own account.
     Such firms attempt  to profit from such  transactions by buying at  the bid
     price  and selling  at  the  higher asked  price  of  the market,  and  the
     difference is customarily  referred to as  the spread.  In selecting  firms
     which will  execute portfolio transactions,  BMR judges their  professional
     ability and  quality  of  service  and  uses its  best  efforts  to  obtain
     execution at  prices  which  are  advantageous  to  the  Portfolio  and  at
     reasonably competitive spreads. Subject to the foregoing, BMR may  consider
     sales of  shares of other  investment companies sponsored  by BMR or  Eaton
     Vance  as  a  factor  in  the  selection  of  firms  to  execute  portfolio
     transactions.  
         
        
              The Portfolio  and BMR have  adopted Codes of  Ethics relating  to
     personal securities transactions.   The Codes permit Eaton  Vance personnel
     to invest  in securities  (including securities  that may  be purchased  or
     held by  the Portfolio)  for their  own accounts,  subject to  certain pre-
     clearance, reporting  and other  restrictions and  procedures contained  in
     such Codes.

                                        A - 9
<PAGE>






         
        
              The  Portfolio is responsible for the  payment of all of its costs
     and  expenses  not  expressly  stated  to  be  payable  by  BMR  under  the
     investment advisory agreement.
         
     Item 6.  Capital Stock and Other Securities
              The Portfolio is organized as  a trust under the laws of the State
     of New York  and intends  to be treated  as a partnership  for federal  tax
     purposes. Under  the Declaration of  Trust, the Trustees  are authorized to
     issue interests in  the Portfolio. Each investor  is entitled to a  vote in
     proportion to  the amount of  its investment in  the Portfolio. Investments
     in the Portfolio  may not be transferred, but  an investor may withdraw all
     or any portion of its investment  at any time at net asset value. Investors
     in the Portfolio will  each be liable for all obligations of the Portfolio.
     However, the risk of an investor in the Portfolio  incurring financial loss
     on account  of such  liability is  limited to  circumstances in  which both
     inadequate insurance  exists and the Portfolio itself is unable to meet its
     obligations.

              The  Declaration  of  Trust   provides  that  the  Portfolio  will
     terminate 120 days  after the  complete withdrawal of  any investor in  the
     Portfolio unless either  the remaining investors,  by unanimous  vote at  a
     meeting of such investors,  or a majority of the Trustees of the Portfolio,
     by written instrument consented to  by all investors, agree to continue the
     business of the  Portfolio. This provision is consistent with the treatment
     of the Portfolio as a partnership for federal income tax purposes.

              Investments  in the  Portfolio  have no  preemptive  or conversion
     rights and  are fully paid  and nonassessable by  the Portfolio,  except as
     set  forth  above.  The  Portfolio is  not  required  and  has  no  current
     intention to hold annual meetings of investors, but  the Portfolio may hold
     special meetings of  investors when in the  judgment of the Trustees  it is
     necessary or desirable to  submit matters for an investor  vote. Changes in
     fundamental policies  or restrictions  will be  submitted to investors  for
     approval.  The  investment  objective  and  all  nonfundamental  investment
     policies of the  Portfolio may be changed by  the Trustees of the Portfolio
     without  obtaining  the   approval  of  the  investors  in  the  Portfolio.
     Investors  have under  certain circumstances  (e.g.,  upon application  and
     submission of  certain specified documents  to the Trustees  by a specified
     number  of investors)  the  right to  communicate  with other  investors in
     connection with  requesting  a meeting  of  investors  for the  purpose  of
     removing  one  or  more  Trustees.  Any  Trustee  may  be  removed  by  the
     affirmative  vote  of  holders  of  two-thirds  of  the  interests  in  the
     Portfolio.
        
              Information regarding  pooled investment  entities or  funds  that
     invest  in  the  Portfolio  may  be  obtained  by  contacting  Eaton  Vance
     Distributors,  Inc., 24  Federal Street, Boston,  MA 02110, (617) 482-8260.
     Smaller  investors  in the  Portfolio  may  be  adversely  affected by  the
     actions of  a larger investor in  the Portfolio.   For example, if  a large
     investor  withdraws  from  the  Portfolio,  the   remaining  investors  may

                                        A - 10
<PAGE>






     experience  higher pro  rata operating  expenses,  thereby producing  lower
     returns.  Additionally,  the Portfolio may hold fewer securities, resulting
     in increased portfolio risk, and experience  decreasing economies of scale.
     However, this possibility exists as well for  historically structured funds
     that have large or institutional investors.
         
        
              As  of July  1,  1996,  EV Marathon  New Jersey  Limited  Maturity
     Municipals Fund, a series of  Eaton Vance Investment Trust,  controlled the
     Portfolio  by virtue  of  owning  approximately  97.6% of  the  outstanding
     voting interests in the Portfolio.
         
              The net asset  value of  the Portfolio is determined  each day  on
     which the  New York  Stock Exchange (the  "Exchange") is  open for  trading
     ("Portfolio  Business Day").  This  determination  is made  each  Portfolio
     Business Day as of the close of regular trading on the Exchange  (currently
     4:00 p.m., New York time) (the "Portfolio Valuation Time").

              Each  investor  in  the  Portfolio  may  add  to  or  reduce   its
     investment  in the  Portfolio on  each  Portfolio Business  Day  as of  the
     Portfolio Valuation  Time. The  value of  each investor's  interest in  the
     Portfolio  will be  determined by  multiplying the  net asset  value of the
     Portfolio by the  percentage, determined  on the  prior Portfolio  Business
     Day, which  represents that investor's  share of the  aggregate interest in
     the  Portfolio on  such prior  day. Any  additions or  withdrawals  for the
     current  Portfolio Business  Day  will then  be  recorded. Each  investor's
     percentage of  the  aggregate  interest  in  the  Portfolio  will  then  be
     recomputed as a  percentage equal to a fraction  (i) the numerator of which
     is the  value of  such investor's  investment in  the Portfolio  as of  the
     Portfolio Valuation  Time  on the  prior  Portfolio  Business Day  plus  or
     minus, as the  case may be, the  amount of any additions  to or withdrawals
     from the  investor's investment in  the Portfolio on  the current Portfolio
     Business Day and (ii) the denominator of  which is the aggregate net  asset
     value  of the Portfolio  as of  the Portfolio  Valuation Time on  the prior
     Portfolio Business Day plus  or minus, as  the case may  be, the amount  of
     the net additions to  or withdrawals from the  aggregate investment in  the
     Portfolio on  the current Portfolio  Business Day by  all investors in  the
     Portfolio. The percentage so determined  will then be applied  to determine
     the value  of the  investor's  interest in  the Portfolio  for the  current
     Portfolio Business Day.
        
              The Portfolio will allocate at least annually among its  investors
     each investor's distributive  share of the Portfolio's net taxable (if any)
     and  tax-exempt investment  income,  net realized  capital  gains, and  any
     other items of  income, gain, loss,  deduction or  credit. The  Portfolio's
     net investment income  consists of all  income accrued  on the  Portfolio's
     assets, less all actual and  accrued expenses of the  Portfolio, determined
     in accordance with generally accepted accounting principles.
         
        
              Under  the anticipated  method of operation of  the Portfolio, the
     Portfolio will  not be subject  to any  federal income tax.   (See  Part B,

                                        A - 11
<PAGE>






     Item 20.)   However, each investor in the  Portfolio will take into account
     its allocable share  of the Portfolio's ordinary income and capital gain in
     determining its  federal income  tax liability.  The determination of  each
     such share  will be made  in accordance with  the governing instruments  of
     the  Portfolio,   which  instruments  are  intended   to  comply  with  the
     requirements of the Code and the regulations promulgated thereunder.
         
        
              It  is intended  that the  Portfolio's assets  and income  will be
     managed  in such  a way  that an  investor in  the Portfolio  that seeks to
     qualify as a  regulated investment company under  the Code will be  able to
     satisfy the requirements for such qualification.
         
     Item 7.  Purchase of Interests in the Portfolio
              Interests in the Portfolio are issued solely in private  placement
     transactions that do not involve  any "public offering" within  the meaning
     of Section 4(2)  of the 1933  Act. See "General Description  of Registrant"
     above.
        
              An investment in the Portfolio  will be made without a sales load.
     All investments received by the Portfolio will  be effected as of the  next
     Portfolio  Valuation  Time.  The  net  asset  value  of  the  Portfolio  is
     determined at the  Portfolio Valuation Time on each Portfolio Business Day.
     The Portfolio will be closed for business  and will not price interests  in
     the  Portfolio  on  the   following  business  holidays:  New  Year's  Day,
     Presidents' Day,  Good Friday, Memorial  Day, Independence Day, Labor  Day,
     Thanksgiving Day  and Christmas  Day. The  Portfolio's net  asset value  is
     computed  in accordance  with  procedures  established by  the  Portfolio's
     Trustees.
         
        
              The Portfolio's net asset value is determined by Investors Bank  &
     Trust Company  (as custodian and  agent for the Portfolio)  based on market
     or fair value  in the manner authorized  by the Trustees of  the Portfolio.
     The  net asset  value is  computed by  subtracting  the liabilities  of the
     Portfolio from  the value of its total assets.   Municipal obligations will
     normally  be valued  on the  basis  of valuations  furnished  by a  pricing
     service.    For  further  information   regarding  the  valuation  of   the
     Portfolio's assets, see Part B, Item 19.
         
              There  is no  minimum  initial  or subsequent  investment  in  the
     Portfolio. The  Portfolio reserves the right to cease accepting investments
     at any time or to reject any investment order.

              The   placement   agent  for   the   Portfolio   is   Eaton  Vance
     Distributors, Inc. ("EVD").  The principal business  address of  EVD is  24
     Federal Street, Boston,  Massachusetts 02110. EVD receives  no compensation
     for serving as the placement agent for the Portfolio.
        
     Item 8.  Redemption or Decrease of Interest
              An investor in  the Portfolio may withdraw all of  (redeem) or any
     portion  of  (decrease) its  interest  in  the  Portfolio  if a  withdrawal

                                        A - 12
<PAGE>






     request in proper  form is furnished by the  investor to the Portfolio. All
     withdrawals will be effected as of  the next Portfolio Valuation Time.  The
     proceeds of a  withdrawal will  be paid by  the Portfolio  normally on  the
     Portfolio Business Day the withdrawal is effected,  but in any event within
     seven days.  The Portfolio  reserves the  right to  pay the  proceeds of  a
     withdrawal (whether a redemption or decrease) by a distribution in kind  of
     portfolio  securities (instead  of  cash).  The securities  so  distributed
     would be  valued at the same amount as that assigned to them in calculating
     the net  asset value for the  interest (whether complete or  partial) being
     withdrawn.  If  an investor  received  a  distribution  in  kind upon  such
     withdrawal, the  investor  could  incur  brokerage  and  other  charges  in
     converting  the  securities to  cash.  The  Portfolio  has  filed with  the
     Securities and  Exchange Commission a  notification of election  on Form N-
     18F-1  committing  to  pay in  cash  all requests  for  withdrawals  by any
     investor, limited  in amount with  respect to such  investor during any  90
     day period to the lesser of  (a) $250,000 or (b) 1% of the net  asset value
     of the Portfolio at the beginning of such period.
         
              Investments in the Portfolio may not be transferred.

              The right of any  investor to receive payment with  respect to any
     withdrawal  may be  suspended  or the  payment  of the  withdrawal proceeds
     postponed during  any period in  which the  Exchange is closed  (other than
     weekends or holidays) or trading on the  Exchange is restricted or, to  the
     extent otherwise  permitted by  the 1940 Act,  if an  emergency exists,  or
     during  any other  period permitted  by  order of  the  Commission for  the
     protection of investors.

     Item 9.  Pending Legal Proceedings
              Not applicable.























                                        A - 13
<PAGE>






                                       PART B

     Item 10.  Cover Page.
              Not applicable.

     Item 11.  Table of Contents.
        
                                                                            Page
              General Information and History  . . . . . . . . . . . . . .  B-1 
              Investment Objectives and Policies   . . . . . . . . . . . .  B-1 
              Management of the Portfolio  . . . . . . . . . . . . . . . .  B-16
              Control Persons and Principal Holder of Securities   . . . .  B-20
              Investment Advisory and Other Services   . . . . . . . . . .  B-20
              Brokerage Allocation and Other Practices   . . . . . . . . .  B-22
              Capital Stock and Other Securities   . . . . . . . . . . . .  B-25
              Purchase, Redemption and Pricing of Securities   . . . . . .  B-27
              Tax Status   . . . . . . . . . . . . . . . . . . . . . . . .  B-27
              Underwriters   . . . . . . . . . . . . . . . . . . . . . . .  B-31
              Calculation of Performance Data  . . . . . . . . . . . . . .  B-31
              Financial Statements   . . . . . . . . . . . . . . . . . . .  B-31
              Appendix   . . . . . . . . . . . . . . . . . . . . . . . . .  a-1 
         
        
     Item 12.  General Information and History.
              Effective  December 15,  1995,  the Portfolio's  name  was changed
     from "New  Jersey  Limited Maturity  Tax  Free  Portfolio" to  "New  Jersey
     Limited Maturity Municipals Portfolio."
         
        
     Item 13.  Investment Objectives and Policies.
              Part  A  contains  additional  information  about  the  investment
     objective and policies of New Jersey Limited Maturity Municipals  Portfolio
     (the "Portfolio"). This Part B should be  read in conjunction with Part  A.
     Capitalized terms used  in this Part B  and not otherwise defined  have the
     meanings given them in Part A.
         
        
     Municipal Obligations
              Municipal  obligations  are issued  to  obtain  funds  for various
     public and private  purposes.  Such  obligations include  bonds as well  as
     tax-exempt  commercial paper,  project  notes and  municipal notes  such as
     tax, revenue and  bond anticipation notes of short maturity, generally less
     than  three years.   In  general, there  are three categories  of municipal
     obligations the interest on which is exempt from  federal income tax and is
     not a tax preference  item for purposes of the  federal alternative minimum
     tax:  (i) certain  "public purpose"  obligations  (whenever issued),  which
     include  obligations issued  directly  by state  and  local governments  or
     their agencies  to fulfill essential  governmental functions; (ii)  certain
     obligations  issued  before   August  8,  1986  for  the  benefit  of  non-
     governmental  persons or  entities;  and  (iii) certain  "private  activity
     bonds"  issued  after  August  7,  1986  which  include  "qualified Section
     501(c)(3)  bonds"  or refundings  of  certain obligations  included  in the

                                        B - 1
<PAGE>






     second category. In  assessing the federal income tax treatment of interest
     on any such obligation, the Portfolio will generally  rely on an opinion of
     the  issuer's  counsel   (when  available)  and  will  not   undertake  any
     independent verification of the  basis for the opinion.  The  two principal
     classifications  of municipal  bonds  are  "general obligation"  bonds  and
     "revenue" bonds.
         
        
              Interest on  certain "private activity bonds"  issued after August
     7, 1986 is exempt  from regular  federal income tax,  but such interest  is
     treated as  a tax preference  item that could  subject the recipient to  or
     increase  the recipient's  liability for  the  federal alternative  minimum
     tax.   It  should be  noted  that, for  a corporate  holder  (other than  a
     regulated investment company)  of an interest in the Portfolio, interest on
     all  municipal  obligations  (whenever issued)  is  included  in  "adjusted
     current earnings"  for purposes of  the federal alternative  minimum tax as
     applied to corporations  (to the extent not already included in alternative
     minimum taxable income as income attributable to private activity bonds).
         
        
              Any recognized  gain or income attributable  to market discount on
     long-term tax-exempt municipal  obligations (i.e., obligations with  a term
     of more  than  one year)  purchased  after April 30,  1993 other  than,  in
     general, at their original issue, is taxable  as ordinary income.  A  long-
     term debt obligation is generally  treated as acquired at a market discount
     if purchased after  its original issue at a price  less than (i) the stated
     principal amount  payable at  maturity, in the  case of an  obligation that
     does not have original issue discount or (ii) in the case  of an obligation
     that does have  original issue discount, the sum of the issue price and any
     original issue discount  that accrued before the obligation  was purchased,
     subject to a de minimis exclusion.
         
              Issuers of  general  obligation bonds  include  states,  counties,
     cities, towns  and regional  districts. The proceeds  of these  obligations
     are  used  to  fund  a  wide   range  of  public  projects  including   the
     construction or  improvement  of schools,  highways  and roads,  water  and
     sewer systems  and a variety of  other public purposes. The  basic security
     of general  obligation bonds  is the issuer's  pledge of its  faith, credit
     and taxing power for  the payment of principal and interest. The taxes that
     can  be levied for the payment of debt  service may be limited or unlimited
     as to rate and amount.

              The principal  security for a  revenue bond is  generally the  net
     revenues derived  from a particular facility or  group of facilities or, in
     some  cases,  from the  proceeds  of  a special  excise  or  other specific
     revenue source. Revenue  bonds have been issued  to fund a wide  variety of
     capital  projects including:  electric, gas, water,  sewer and  solid waste
     disposal systems; highways, bridges and tunnels;  port, airport and parking
     facilities;  transportation   systems;  housing  facilities,  colleges  and
     universities and  hospitals. Although the  principal security behind  these
     bonds  varies widely, many  provide additional  security in  the form  of a
     debt service reserve  fund whose monies may  be used to make  principal and

                                        B - 2
<PAGE>






     interest payments on the issuer's obligations.  Housing finance authorities
     have a  wide range of security  including partially or  fully insured, rent
     subsidized and/or  collateralized mortgages, and/or  the net revenues  from
     housing or  other public projects.  In addition to  a debt service  reserve
     fund,  some authorities provide  further security in the  form of a state's
     ability (without  legal obligation)  to make  up deficiencies  in the  debt
     service reserve  fund. Lease  rental revenue  bonds  issued by  a state  or
     local authority for capital projects  are normally secured by  annual lease
     rental payments from the  state or locality to the authority  sufficient to
     cover  debt service  on  the  authority's  obligations. Such  payments  are
     usually subject to annual appropriations by the state or locality.

              Industrial  development and  pollution control  bonds are  in most
     cases revenue bonds  and are generally not  secured by the taxing  power of
     the municipality,  but are usually secured  by the revenues derived  by the
     authority from payments of the industrial user or users.

              The Portfolio may on  occasion acquire revenue  bonds which  carry
     warrants  or similar rights  covering equity  securities. Such  warrants or
     rights  may  be  held  indefinitely,   but  if  exercised,  the   Portfolio
     anticipates  that it  would,  under normal  circumstances,  dispose of  any
     equity securities so acquired within a reasonable period of time.

              While  most municipal  bonds pay  a fixed  rate of  interest semi-
     annually in cash,  there are exceptions.  Some bonds pay  no periodic  cash
     interest, but  rather make a  single payment at  maturity representing both
     principal and  interest. Bonds may  be issued or  subsequently offered with
     interest  coupons materially greater  or less  than those  then prevailing,
     with price adjustments reflecting such deviation.
        
              The obligations  of any person  or entity to pay  the principal of
     and  interest on  a municipal obligation  are subject to  the provisions of
     bankruptcy, insolvency and  other laws affecting the rights and remedies of
     creditors, such as  the Federal Bankruptcy Act, and  laws, if any, that may
     be  enacted  by Congress  or  state  legislatures  extending  the time  for
     payment of  principal or interest,  or both, or  imposing other constraints
     upon enforcement  of such obligations.  There is also  the possibility that
     as a result of  litigation or other conditions the power or  ability of any
     person or entity  to pay when due principal of  and interest on a municipal
     obligation may be  materially affected. There have been recent instances of
     defaults and  bankruptcies involving  municipal obligations  that were  not
     foreseen  by the financial and  investment communities.  The Portfolio will
     take whatever action it considers  appropriate in the event  of anticipated
     financial difficulties, default or bankruptcy  of either the issuer  of any
     municipal obligation  or  of  the  underlying  source  of  funds  for  debt
     service. Such action  may include retaining the services of various persons
     or firms  (including affiliates of  the Investment Adviser)  to evaluate or
     protect  any real  estate,  facilities or  other  assets securing  any such
     obligation or acquired by the Portfolio as a result of any such  event, and
     the  Portfolio  may also  manage  (or engage  other persons  to  manage) or
     otherwise deal  with  any  real  estate,  facilities  or  other  assets  so
     acquired.  The  Portfolio  anticipates  that  real  estate  consulting  and

                                        B - 3
<PAGE>






     management  services may be  required with  respect to  properties securing
     various municipal obligations  in its portfolio or subsequently acquired by
     the Portfolio. The  Portfolio will incur additional expenditures  in taking
     protective  action  with respect  to portfolio  obligations in  default and
     assets securing such obligations.
         
        
              The  yields  on  municipal  obligations  will  be dependent  on  a
     variety of  factors, including purposes  of issue and  source of funds  for
     repayment,  general money  market  conditions,  general conditions  of  the
     municipal  bond market,  size  of a  particular  offering, maturity  of the
     obligation and rating of the issue. The  ratings of Moody's, S&P and  Fitch
     represent their opinions  as to the  quality of  the municipal  obligations
     that  they  undertake to  rate.  It  should  be  emphasized, however,  that
     ratings are  based on judgment and  are not absolute standards  of quality.
     Consequently,  municipal obligations  with the  same  maturity, coupon  and
     rating may have  different yields while  obligations of  the same  maturity
     and coupon with  different ratings may  have the  same yield. In  addition,
     the market price of such  obligations will normally fluctuate  with changes
     in interest rates, and therefore the net asset  value of the Portfolio will
     be affected by such changes.
         
     Risks of Concentration
        
              New Jersey Obligations.   The following information as to  certain
     New Jersey considerations is given to investors  in view of the Portfolio's
     policy of  concentrating  its investments  in  New  Jersey issuers.    Such
     information supplements  the information  in Part  A.   It is  derived from
     sources that are  generally available to  investors and  is believed to  be
     accurate.   Such information  constitutes only  a brief  summary, does  not
     purport to  be a  complete description,  and is based  on information  from
     official  statements  relating  to  securities  offerings   of  New  Jersey
     issuers.  The Portfolio has not independently verified this information.
         
        
              New Jersey has a well diversified economy and high wealth  levels.
     Per capita  income ranks as the second  highest in the nation  at 28% above
     the U.S. average.   The State's economy benefits from its proximity  to New
     York and other  major eastern seaboard cities.   New Jersey's economy, like
     most  states,  suffered  during  the  recent  recession  with  unemployment
     increasing  and surpassing  the  national average.   New  Jersey's adjusted
     unemployment rate for April 1996 was 6.6% compared to 5.4% nationally.
         
              As  of the date  hereof, New Jersey's general  obligation debt was
     rated  Aa1, AA+  and AA+, by  Moody's, S&P and  Fitch, respectively.   As a
     result  of  New  Jersey's  fiscal  weakness,  evidenced  by declining  fund
     balances,  S&P placed  the  States's general  obligation  debt and  related
     agency and lease  obligations on CreditWatch with negative  implications in
     June 1991.   In July 1991, S&P   downgraded the State's  general obligation
     debt from AAA to AA+.   As part of  this action, numerous agency and  lease
     obligation  debts were also downgraded  accordingly.   These downgrades did
     not  affect state university and college ratings.   In August 1992, Moody's

                                        B - 4
<PAGE>






     downgraded New Jersey to  Aa1 from Aaa due to  the use of one-time  revenue
     items,  revenue shortfalls  and ongoing operating  deficits.   S&P affirmed
     their AA+ rating  for the  State, but retained  the negative  outlook.   On
     December  16, 1992, Fitch  lowered their  rating on  the State to  AA+ from
     AAA.   The rating  action was  due to the  State's decision,  with the most
     recent bond  issuance, to  defer debt  service in  the immediate  future in
     order to provide  for unmet capital  needs, while  increasing debt  service
     requirements in future  years when additional resources  may or may  not be
     available.
        
              As   part   of  the   1992-1993   budget,   the   Legislature  cut
     approximately $1 billion in spending from  the Governor's budget, including
     cutbacks  in  both  the State's  homestead  rebate  and general  assistance
     programs.  To cover  the shortfall resulting from  the cutbacks, the  State
     employee pension  fund  was revalued,  allowing  the  State to  reduce  its
     contribution,  and a surplus  in the  school aid  funds was applied  to the
     General Fund.   The State ended fiscal  1993 with an $855  million surplus,
     approximately half  of which  was used  in the  1994 budget.   1994  had an
     appropriation  for all  funds of $15.7  billion, up  4.8% from  fiscal 1993
     revised appropriations of $14.7 billion.   Both years benefitted  from $412
     million  in  non-recurring  revenues  from  retroactive  federal   Medicaid
     payments.    After  the  Legislature reduced  the  Governor's  fiscal  1994
     requests by $182 million, about half of the  $855 million fiscal 1993 total
     surplus  was used for  fiscal 1994, with  a June 30,  1994 forecast of $416
     million  --  $110  million allocated  to  the General  Fund  and  over $305
     million to rainy day and taxpayer relief funds.
         
        
              In  1994,  New  Jersey  adopted  a  5%  personal  income  tax  cut
     retroactive  to January  1,  1994.   In  1995,  New  Jersey adopted  a  10%
     personal income tax cut retroactive to January 1, 1995.  On June 26,  1995,
     the New  Jersey State  Legislature passed  an additional  15% reduction  to
     take effect January  1, 1996.   State officials  estimate the revenue  loss
     resulting  from these tax  cuts at  over $1  billion for  fiscal 1996.   To
     accommodate the tax  cut, the fiscal  1996 budget  relies on  non-recurring
     revenues and the use of prior years'  surplus.  Furthermore, a major  focus
     of  the spending  reduction  has  been  employer contributions  to  retiree
     health care  and pension  systems which were  cut by  over $863 million  in
     fiscal 1995.  There can be  no assurance that the tax cuts will not have an
     adverse impact on the State's  finances and the demand for  municipal bonds
     in the State.
         
        
              In fiscal year  1995, expenditure control was a major  factor with
     the implementation  of an income  tax reduction.   Operations were stronger
     than  budgeted.   An  operating  deficit  of  $335.8  million was  incurred
     instead of the budgeted $555.0 million.
         
        
              In  fiscal  year  1996, it  is  projected to  be  another  year of
     operating deficits,  which will continue  to draw down  the State's general
     fund balances.   Revenue growth  is projected to  be slower  than expected.

                                        B - 5
<PAGE>






     One-time revenue measures will account for approximately 3.5% of budget.
         
        
              In fiscal year  1997, New Jersey will implement  the last phase of
     its $1.25  billion  multi-year personal  income tax  cut.   The State  will
     continue to restrain  state spending through agency and  program cuts.  The
     budget  will be balanced  with the  use of  about $300 million  of one-shot
     revenues, which is equivalent to 2% of the budget.
         
              General obligation bonds of New Jersey are the primary method  for
     New Jersey financing  of capital projects.   These bonds are backed  by the
     full faith and credit  of New Jersey.  New Jersey tax  revenues and certain
     other fees  are  pledged  to  meet  the  principal  and  interest  payments
     required  to fully pay the debt.  No  general obligation debt can be issued
     by New  Jersey without  prior voter  approval, except that,  pursuant to  a
     constitutional  amendment, no  voter  approval  is  required  for  any  law
     authorizing the creation of a debt for the purpose  of refinancing all or a
     portion  of the  outstanding  debt  of New  Jersey,  so  long as  such  law
     requires  that the  refinancing  provided debt  service  savings.   The New
     Jersey Constitution  also provides that  no voter approval  is required for
     debt  issued  for  purposes  of   war,  to  repel  invasion,   to  suppress
     insurrection  or to meet  an emergency  caused by  disaster or act  of God.
     Capital  construction  can  also  be  funded  by appropriation  of  current
     revenues  on  a  pay-as-you-go  basis.    All  appropriations  for  capital
     projects and all  proposals for State  bond authorizations  are subject  to
     the  review and  recommendation  of the  New  Jersey Commission  on Capital
     Budgeting and Planning.

              Other State-related obligations  include those created pursuant to
     the New  Jersey Building Authority  Act, which has  the power  to construct
     facilities  for leasing to  the State.   The  rental for such  buildings is
     equal to the  debt service relating thereto  plus payments in lieu  of real
     estate taxes.   Legislation provides  for future  appropriations for  State
     aid to local school districts equal to debt service on a maximum  principal
     amount of $280,000,000 of bonds issued  by such local school districts  for
     construction  and renovation  of  school facilities  and  for State  aid to
     counties  equal to debt  service on  up to  $80,000,000 of bonds  issued by
     counties for construction of county college facilities.

              The authorizing legislation  for various  State entities  provides
     for  specific budgetary  procedures  with  respect to  certain  obligations
     issued by such  entities.  Bonds issued pursuant to authorizing legislation
     of this type are sometimes referred to as "moral obligation" bonds.   There
     is no  statutory limitation on  the amount of moral  obligation bonds which
     may be issued  by eligible State entities.   Currently, there are  two such
     entities  available for  State appropriations  to  meet moral  obligations.
     The  New  Jersey  Housing  and  Mortgage  Finance  Agency  has  not  had  a
     deficiency  in  a  debt  service  reserve  which  required  New  Jersey  to
     appropriate  funds.  It  is  anticipated that  the  agency's  revenue  will
     continue to  be sufficient to cover debt  service on its bonds.   The State
     provides the South  Jersey Port Corporation  with funds  to cover all  debt
     service  and   property  tax   requirements,  when   earned  revenues   are

                                        B - 6
<PAGE>






     anticipated to be insufficient  to cover these  obligations.  In the  past,
     anticipated revenues have, in some  cases, been insufficient to  cover debt
     service and/or insufficient  to cover all property tax requirements.  There
     are  numerous  other State-created  entities with  outstanding debt.   This
     debt  is  supported  by revenues  derived  from  or assets  of  the various
     projects financed by such entities.

              The Local  Budget Law  imposes specific budgetary  procedures upon
     counties  and municipalities,  subject  to review  by  the Director  of the
     Division of  Local  Government Services.    State  law also  regulates  the
     issuance of  debt by counties and municipalities  by limiting the amount of
     tax anticipation notes  that may be  issued and  requiring their  repayment
     within three  months  of the  end  of the  fiscal year  in  which they  are
     issued.  The  Local Bond Law  governs the issuance  of bonds and  notes and
     bars  the issuance of bonds  for the payment of  current expenses or to pay
     outstanding obligations, except were  permitted by the Local Finance Board.
     State   law  also   authorizes   State   officials  to   supervise   fiscal
     administration in any municipality facing financial difficulties. 
        
              Obligations of  Puerto  Rico, the  U.S. Virgin  Islands and  Guam.
     Subject to the Portfolio's  investment policies as set forth in Part A, the
     Portfolio may invest in the obligations of the governments of  Puerto Rico,
     the U.S. Virgin  Islands and Guam  (the "Territories").   Accordingly,  the
     Portfolio  may  be  adversely  affected  by  local  political  and economic
     conditions and  developments within the  Territories affecting the  issuers
     of such obligations.
         
        
              Puerto   Rico  has   a  diversified   economy  dominated   by  the
     manufacturing and service  sectors.  Manufacturing is the largest sector in
     terms  of  gross domestic  product  and  is  more  diversified than  during
     earlier phases of  Puerto Rico's industrial development.  The three largest
     sectors of the economy (as a percentage of employment) are  services (47%),
     government (22%) and manufacturing  (16.4%).  These three sectors represent
     39%,  11% and  39%,  respectively, of  the  gross  domestic product.    The
     service  sector   is  the   fastest  growing,  while   the  government  and
     manufacturing sectors  have been  stagnant for  the past five  years.   The
     North  American  Free  Trade  Agreement  (NAFTA),  which  became  effective
     January  1, 1994, could lead to the loss of Puerto Rico's lower salaried or
     labor  intensive jobs to Mexico.   The November  1995 unemployment rate was
     13.4%, down from 16% for 1994.
         
        
              The  Commonwealth  of Puerto  Rico  exercises  virtually  the same
     control  over its  internal affairs  as  do the  fifty states;  however, it
     differs from  the states in  its relationship with  the federal government.
     Most federal taxes,  except those such  as social security  taxes that  are
     imposed by mutual  consent, are  not levied in  Puerto Rico.   However,  in
     conjunction with the 1993  U.S. budget  plan, Section 936  of the Code  was
     amended and provided  for two alternative  limitations to  the Section  936
     credit.  The first option will limit the credit  against such income to 40%
     of the  credit  allowable under  current  law, with  a  five year  phase-in

                                        B - 7
<PAGE>






     period starting at  60% of the  allowable credit.   The second option  is a
     wage and depreciation based  credit.  The reduction of the tax  benefits to
     those U.S.  companies with  operations in Puerto  Rico may  lead to  slower
     growth in the  future.  Furthermore, federal policymakers have proposed the
     total elimination of Section  936, phased out over ten years, as  a budget-
     balancing measure.   There  can be  no assurance  that these  modifications
     will not lead to a  weakened economy, a lower rating on Puerto  Rico's debt
     or lower prices for Puerto Rican bonds that may be held by the Portfolio.
         
        
              Puerto   Rico's  financial   reporting  was  first   conformed  to
     generally  accepted accounting  principles in  fiscal  1990.   Nonrecurring
     revenues have  been used frequently to  balance recent years'  budgets.  In
     November, 1993  Puerto Ricans voted on whether they  wished to retain their
     Commonwealth status,  become a state  or establish  an independent  nation.
     The  measure was defeated, with 48.5%  voting to remain a Commonwealth, 46%
     voting  for   statehood  and  4%   voting  for  independence.     Retaining
     Commonwealth status  will leave  intact the  current relationship  with the
     federal government.   There can  be no assurance  that the  statehood issue
     will not  be brought to a vote in the future.   A successful statehood vote
     in  Puerto Rico  would then  require ratification  by the U.S.  Congress to
     ratify the election.
         
        
              The United States Virgin  Islands (USVI) are located approximately
     1,100 miles  east-southeast of  Miami and  are made  up of  St. Croix,  St.
     Thomas and  St. John.   Population,  after reaching  a peak  of 110,800  in
     1985, declined to 101,809 in 1990.   The economy is heavily reliant on  the
     tourism  industry,  with  roughly 43%  of  non-agricultural  employment  in
     tourist-related trade  and services.   As  of December, 1994,  unemployment
     stood at  4.8%.  The tourism  industry is economically sensitive  and would
     likely be adversely affected by a recession in  either the United States or
     Europe.
         
        
              An important  component of the  USVI revenue base  is the  federal
     excise tax on rum exports.  Tax revenues rebated by the federal  government
     to  the USVI provide  the primary security of  many outstanding USVI bonds.
     Because more than 90% of the rum distilled in the USVI is distilled  at one
     plant,  any  interruption in  its operations  (as occurred  after Hurricane
     Hugo in 1989) would adversely  affect these revenues.   Consequently, there
     can  be no assurance that rum  exports to the United  States and the rebate
     of tax  revenues to the USVI  will continue at  their present levels.   The
     preferential tariff treatment the USVI rum  industry currently enjoys could
     be reduced under NAFTA.   Increased competition from Mexican  rum producers
     could reduce USVI  rum imported to the U.S., decreasing excise tax revenues
     generated.   The USVI incurred  extensive damage from  Hurricane Marilyn in
     September, 1995.   Widespread damage  to the airport  and hotels  led to  a
     drop  in tourism, which  has had a negative  impact on revenue collections.
     There  is   currently  no  rated,  unenhanced   U.S.  Virgin  Islands  debt
     outstanding.
         

                                        B - 8
<PAGE>






        
              Guam,  an unincorporated  U.S. territory,  is located  1,500 miles
     southeast of Tokyo.   Population,  133,000 in 1990,  up 26%  from the  1980
     census  level.  The  U.S. military  is a  key component of  Guam's economy.
     The federal government directly comprises  more than 10% of  the employment
     base, with a  substantial component of the service  sector to support these
     personnel.  Guam is expected  to benefit from the closure of the  Subic Bay
     Naval  Base and the Clark Air Force Base in the Philippines.  The Naval Air
     Station, one  of several U.S. military  facilities on the island,  has been
     slated for closure by the  Defense Base Closure and  Realignment Committee;
     however, the administration  plans to use  these facilities  to expand  the
     Island's commercial airport.   Guam is  also heavily  reliant on  tourists,
     particularly the  Japanese.  For 1994,  the financial position  of Guam was
     weakened as  it incurred an unaudited General Fund  operating deficit.  The
     administration has  taken steps to improve its financial position; however,
     there are  no  guarantees that  an improvement  will be  realized.   Guam's
     general obligation debt is rated Baa by Moody's.
         
        
              Obligations  of Particular  Types of  Issuers.  The  Portfolio may
     invest 25% or  more of  its total assets  in municipal  obligations of  the
     same  type.  There could  be economic,  business or  political developments
     that  might  affect  all  municipal  obligations  of  a  similar  type.  In
     particular, investments in industrial revenue bonds  might involve (without
     limitation) the following risks.
         
              Hospital  bond  ratings are  often  based  on  feasibility studies
     which  contain projections  of  expenses,  revenues and  occupancy  levels.
     Among the influences affecting a  hospital's gross receipts and  net income
     available  to  service its  debt  are  demand  for  hospital services,  the
     ability  of  the  hospital to  provide  the  services required,  management
     capabilities,  economic  developments  in  the  service  area,  efforts  by
     insurers  and government agencies to  limit rates  and expenses, confidence
     in  the   hospital,  service  area   economic  developments,   competition,
     availability and  expense of malpractice  insurance, Medicaid and  Medicare
     funding and possible  federal legislation limiting the rates of increase of
     hospital charges.
        
              Electric utilities  face problems in financing  large construction
     programs in an  inflationary period, cost increases and delay occasioned by
     safety and  environmental  considerations  (particularly  with  respect  to
     nuclear facilities),  difficulty in obtaining fuel at reasonable prices and
     in  achieving timely and adequate rate  relief from regulatory commissions,
     effects  of energy  conservation  and limitations  on  the capacity  of the
     capital market to absorb utility debt.
         
        
         
        
              Life care facilities are an alternative form  of long-term housing
     for the elderly  which offer residents  the independence  of a  condominium
     life  style  and,  if  needed,  the  comprehensive  care  of  nursing  home

                                        B - 9
<PAGE>






     services. Bonds to  finance these facilities  have been  issued by  various
     state and  local authorities. Because  the bonds are  normally secured only
     by the revenues of each  facility and not by state or  local government tax
     payments,  they are  subject to  a wide  variety of  risks. Primarily,  the
     projects must  maintain adequate  occupancy levels  to be  able to  provide
     revenues  sufficient to  meet debt  service  payments. Moreover,  because a
     portion of housing,  medical care and other services  may be financed by an
     initial  deposit,  it is  important  that  the facility  maintain  adequate
     financial reserves to  secure estimated actuarial liabilities.  The ability
     of management  to accurately  forecast  inflationary cost  pressures is  an
     important  factor in  this  process. The  facilities  may also  be affected
     adversely by regulatory  cost restrictions applied to health  care delivery
     in  general,  particularly state  regulations  or changes  in  Medicare and
     Medicaid payments  or qualifications,  or restrictions  imposed by  medical
     insurance  companies.  They  may also  face  competition  from  alternative
     health care or  conventional housing facilities  in the  private or  public
     sector.
         
        
     Municipal Leases
              The Portfolio  may invest  in municipal leases  and participations
     therein,  which arrangements  frequently involve  special risks.  Municipal
     leases  are obligations  in the  form  of a  lease or  installment purchase
     arrangement which  are issued by  a state  or local  government to  acquire
     equipment  and  facilities.  Interest  income  from   such  obligations  is
     generally  exempt from  local and  state taxes  in the  state of  issuance.
     "Participations" in such  leases are undivided  interests in  a portion  of
     the  total obligation. Participations  entitle their  holders to  receive a
     pro  rata share  of all  payments under  the  lease. A  trustee is  usually
     responsible for administering the terms of  the participation and enforcing
     the  participants' rights  in the underlying  lease. Leases and installment
     purchase or conditional  sale contracts  (which normally provide  for title
     to the  leased assets to  pass eventually to the  governmental issuer) have
     evolved  as  a means  for  governmental  issuers  to  acquire property  and
     equipment without  meeting  the constitutional  and statutory  requirements
     for the issuance of debt.  State debt-issuance limitations are deemed to be
     inapplicable to these  arrangements because of the inclusion in many leases
     or  contracts  of   "non-appropriation"  clauses  that  provide   that  the
     governmental issuer has  no obligation to  make future  payments under  the
     lease  or contract unless  money is  appropriated for  such purpose  by the
     appropriate legislative  body on  a yearly  or other  periodic basis.  Such
     arrangements  are, therefore,  subject to  the  risk that  the governmental
     issuer will not appropriate funds for lease payments. 
         
        
              Certain municipal lease obligations owned by the Portfolio  may be
     deemed  illiquid  for   purposes  of  the  Portfolio's  15%  limitation  on
     investments in  illiquid securities,  unless determined  by the  Investment
     Adviser,  pursuant to  guidelines  adopted by  the  Trustees, to  be liquid
     securities for purposes  of such  limitation. In determining  the liquidity
     of  municipal lease  obligations, the  Investment  Adviser will  consider a
     variety of  factors including: (1)  the willingness of  dealers to  bid for

                                        B - 10
<PAGE>






     the security; (2) the  number of  dealers willing to  purchase or sell  the
     obligation and the number of other  potential buyers; (3) the frequency  of
     trades  and  quotes  for  the   obligation;  and  (4)  the  nature  of  the
     marketplace  trades. In  addition,  the  Investment Adviser  will  consider
     factors unique to particular lease obligations  affecting the marketability
     thereof. These  include the general  creditworthiness of the  municipality,
     the  importance of the property  covered by the  lease to the municipality,
     and  the  likelihood that  the  marketability  of  the  obligation will  be
     maintained throughout the time the obligation is  held by the Portfolio. In
     the  event the Portfolio  acquires an  unrated municipal  lease obligation,
     the  Investment Adviser  will  be responsible  for  determining the  credit
     quality  of such obligation on an ongoing basis, including an assessment of
     the likelihood that the lease may or may not be canceled.
         
     Zero Coupon Bonds
              Zero  coupon bonds are  debt obligations which do  not require the
     periodic payment of interest and are issued at a significant discount  from
     face value.  The discount  approximates the  total amount  of interest  the
     bonds will accrue and compound  over the period until maturity at a rate of
     interest  reflecting  the market  rate  of  the  security at  the  time  of
     issuance. Zero coupon bonds benefit  the issuer by mitigating its need  for
     cash to meet  debt service,  but also require  a higher rate  of return  to
     attract investors who are willing to defer receipt of such cash.
        
     Insurance
              Insured municipal obligations held  by the Portfolio (if any) will
     be  insured as to  their scheduled payment of  principal and interest under
     either  (i) an insurance  policy obtained  by the issuer  or underwriter of
     the obligation at  the time of its  original issuance or (ii)  an insurance
     policy  obtained  by the  Portfolio  or a  third  party  subsequent to  the
     obligation's  original  issuance  (which  may  not  be   reflected  in  the
     obligation's  market value).  In  either event  such insurance  may provide
     that in the  event of  nonpayment of interest  or principal  when due  with
     respect to an insured obligation, the insurer is not required to make  such
     payment until a specified  time has lapsed  (which may be  30 days or  more
     after notice).
         
        
     Credit Quality
              The Portfolio  is dependent on the  Investment Adviser's judgment,
     analysis   and  experience   in  evaluating   the   quality  of   municipal
     obligations. In evaluating the credit  quality of a particular  issue, when
     rated   or  unrated,  the  Investment  Adviser   will  normally  take  into
     consideration, among  other things, the  financial resources of the  issuer
     (or, as appropriate, of  the underlying source of funds  for debt service),
     its sensitivity to economic  conditions and  trends, any operating  history
     of and the community  support for the facility financed by the  issuer, the
     ability of the  issuer's management and regulatory matters.  The Investment
     Adviser  will  attempt  to reduce  the  risks  of investing  in  the lowest
     investment   grade,  below   investment   grade  and   comparable   unrated
     obligations   through  active  portfolio  management, credit  analysis  and
     attention  to  current developments  and  trends  in  the  economy and  the

                                        B - 11
<PAGE>






     financial markets.
         
        
              See  "Portfolio  of Investments"  in  the  "Financial  Statements"
     incorporated  by reference into  this Part B with  respect to any defaulted
     obligations held by the Portfolio.
         
        
     Short-Term Trading
              The  Portfolio  may  sell   (and  later  purchase)  securities  in
     anticipation of a  market decline  (a rise in  interest rates) or  purchase
     (and later sell) securities  in anticipation of a market rise (a decline in
     interest rates). In  addition, a security may be sold and another purchased
     at approximately  the same  time to take  advantage of  what the  Portfolio
     believes  to be  a  temporary disparity  in  the normal  yield relationship
     between the two  securities. Yield disparities  may occur  for reasons  not
     directly related  to the  investment quality  of particular  issues or  the
     general movement of interest rates,  such as changes in the  overall demand
     for or supply  of various types of municipal  obligations or changes in the
     investment objectives  of  investors.  Such  trading  may  be  expected  to
     increase the portfolio  turnover rate, which may increase capital gains and
     the  expenses  incurred  in connection  with  such  trading. The  Portfolio
     anticipates  that its  annual  portfolio turnover  rate will  generally not
     exceed 100% (excluding turnover of  securities having maturity of  one year
     or less).   A 100% annual  turnover rate would  occur, for example,  if all
     the  securities held by the Portfolio were replaced once in a period of one
     year.   A high  turnover rate (100%  or more) necessarily  involves greater
     expenses to  the Portfolio.   The  Portfolio engages  in portfolio  trading
     (including short-term trading)  if it believes that a transaction including
     all  costs  will  help  in   achieving  its  investment  objective.     The
     Portfolio's portfolio turnover rates for  the fiscal years ended  March 31,
     1996 and 1995, were 42% and 44%, respectively.
         
        
     When-Issued Securities
              New  issues of municipal  obligations are  sometimes offered  on a
     "when-issued"  basis,  that is,  delivery  and payment  for  the securities
     normally take  place within a  specified number of  days after the date  of
     the Portfolio's  commitment and are  subject to certain  conditions such as
     the  issuance  of  satisfactory  legal opinions.  The  Portfolio  may  also
     purchase securities on a when-issued basis pursuant to refunding  contracts
     in   connection  with   the   refinancing   of  an   issuer's   outstanding
     indebtedness. Refunding contracts generally  require the issuer to sell and
     the Portfolio  to buy such  securities on a  settlement date that could  be
     several months or several years in the future.
         
              The  Portfolio  will  make  commitments  to  purchase  when-issued
     securities only  with the intention  of actually acquiring the  securities,
     but may sell such  securities before  the settlement date  if it is  deemed
     advisable as  a matter of  investment strategy. The  payment obligation and
     the interest rate that will be received on the  securities are fixed at the
     time the  Portfolio enters  into the purchase  commitment. The  Portfolio's

                                        B - 12
<PAGE>






     custodian will  segregate cash or  high grade  liquid debt securities  in a
     separate account of the Portfolio in an amount at least equal  to the when-
     issued commitments.  If the value of the securities  placed in the separate
     account  declines,  additional cash  or high  grade liquid  debt securities
     will  be placed in the  account on a  daily basis so that  the value of the
     account  will at  least  equal the  amount  of the  Portfolio's when-issued
     commitments. When the Portfolio commits  to purchase a security on  a when-
     issued  basis, it  records the transaction  and reflects  the value  of the
     security in  determining its  net asset  value. Securities  purchased on  a
     when-issued basis and the securities  held by the Portfolio are subject  to
     changes in  value based upon the perception  of the creditworthiness of the
     issuer  and changes in the level of interest rates (i.e., appreciation when
     interest  rates  decline  and  depreciation  when   interest  rates  rise).
     Therefore, to the  extent that  the Portfolio  remains substantially  fully
     invested at  the same  time that  it has  purchased securities  on a  when-
     issued basis, there  will be greater  fluctuations in  the Portfolio's  net
     asset  value than  if  it solely  set  aside cash  to  pay for  when-issued
     securities.

     Floating or Variable Rate Obligations
              The Portfolio may purchase  floating or variable rate obligations.
     Floating  or  variable  rate instruments  provide  for  adjustments in  the
     interest  rate  at  specified  intervals  (weekly, monthly,  semi-annually,
     etc.).  The revised rates  are usually set  at the  issuer's discretion, in
     which case the  investor normally enjoys  the right to  "put" the  security
     back to the issuer or the issuer's  agent. Rate revisions may alternatively
     be determined by formula or in some other contractual  fashion. Floating or
     variable  rate  obligations normally  provide  that the  holder  can demand
     payment of the obligation on short notice at  par with accrued interest and
     are  frequently  secured by  letters  of  credit  or  other credit  support
     arrangements provided by banks.  To the extent that such letters  of credit
     or  other  arrangements  constitute  an  unconditional   guarantee  of  the
     issuer's  obligations, a bank  may be treated as  the issuer  of a security
     for  the purpose  of complying  with the  diversification  requirements set
     forth in  Section 5(b)  of the Investment  Company Act  of 1940 (the  "1940
     Act") and Rule  5b-2 thereunder. The Portfolio would anticipate using these
     obligations  as  cash equivalents  pending  longer term  investment  of its
     funds.
        
     Redemption, Demand and Put Features
              Most  municipal bonds have a  fixed final maturity  date. However,
     it  is commonplace for  the issuer to  reserve the  right to call  the bond
     earlier. Also, some  bonds may have "put"  or "demand" features that  allow
     early redemption by the bondholder.  Longer term fixed-rate bonds  may give
     the holder a right  to request redemption at certain  times (often annually
     after the  lapse of an intermediate  term). These bonds  are more defensive
     than conventional  long term  bonds (protecting  to some  degree against  a
     rise  in   interest  rates)  while   providing  greater  opportunity   than
     comparable  intermediate term  bonds, because the  Portfolio may retain the
     bond if interest  rates decline. By  acquiring these  kinds of  obligations
     the  Portfolio obtains the contractual  right to require  the issuer of the
     security or some  other person (other than a  broker or dealer) to purchase

                                        B - 13
<PAGE>






     the security  at an  agreed upon  price, which  right is  contained in  the
     obligation itself  rather than in a  separate agreement with  the seller or
     some other  person. Because  this right  is assignable  with the  security,
     which  is  readily marketable  and  valued  in  the  customary manner,  the
     Portfolio will not assign any separate value to such right.
         
        
     Liquidity and Protective Put Options
              The  Portfolio may also  enter into a separate  agreement with the
     seller  of the  security or  some other  person granting the  Portfolio the
     right to  put the security to the seller  thereof or the other person at an
     agreed  upon price. The Portfolio intends to limit this type of transaction
     to institutions (such  as banks or securities dealers) which the Investment
     Adviser believes  present minimal  credit risks  and would  engage in  this
     type of transaction to facilitate portfolio liquidity  or (if the seller so
     agrees) to hedge against rising interest rates. There is  no assurance that
     this kind of put option will be available to  the Portfolio or that selling
     institutions will be willing to permit the  Portfolio to exercise a put  to
     hedge against  rising interest  rates. A  separate put  option  may not  be
     marketable or  otherwise assignable, and  sale of the  security to a  third
     party or  lapse of time with the put unexercised may terminate the right to
     exercise the put. The Portfolio does not  expect to assign any value to any
     separate  put  option  which  may  be  acquired  to  facilitate   portfolio
     liquidity, inasmuch as the value (if  any) of the put will be  reflected in
     the  value  assigned to  the  associated  security;  any  put acquired  for
     hedging purposes would be valued in good  faith under methods or procedures
     established by  the Trustees  after consideration of  all relevant factors,
     including  its  expiration date,  the  price volatility  of  the associated
     security, the  difference  between  the  market  price  of  the  associated
     security and  the exercise price  of the put,  the creditworthiness  of the
     issuer  of  the put  and  the  market  prices of  comparable  put  options.
     Interest income  generated by certain  bonds having put  or demand features
     may not qualify as tax-exempt interest.
         
        
     Securities Lending
              The  Portfolio  may  seek  to  increase  its  income   by  lending
     portfolio securities  to broker-dealers  or other institutional  borrowers.
     Under  present  regulatory  policies of  the  Commission,  such  loans  are
     required   to  be   secured  continuously  by   collateral  in  cash,  cash
     equivalents  or  U.S.   Government  securities  held  by   the  Portfolio's
     custodian and maintained  on a current basis at an amount at least equal to
     the market value  of the securities loaned, which  will be marked to market
     daily. Cash  equivalents include short-term  municipal obligations as  well
     as  taxable certificates of deposit,  commercial paper and other short-term
     money market  instruments. The Portfolio  would have  the right  to call  a
     loan and obtain the securities  loaned at any time  on up to five  business
     days' notice. During the  existence of a loan, the Portfolio  will continue
     to  receive  the equivalent  of  the interest  paid  by the  issuer  on the
     securities loaned and will  also receive a fee, or all  or a portion of the
     interest on  investment of the  collateral, if any.  However, the Portfolio
     may pay lending  fees to such borrowers.  The Portfolio would not  have the

                                        B - 14
<PAGE>






     right to vote any  securities having voting rights during  the existence of
     the loan, but would call the  loan in anticipation of an important vote  to
     be taken among  holders of the securities  or the giving or  withholding of
     their consent on a material matter affecting  the investment. As with other
     extensions of  credit there are risks of delay  in recovery or even loss of
     rights  in the securities  loaned if  the borrower of  the securities fails
     financially. However, the loans will  be made only to  organizations deemed
     by the  Portfolio's management  to be  of good  standing and  when, in  the
     judgment of  the  Portfolio's management,  the  consideration that  can  be
     earned  from securities  loans  justifies  the attendant  risk.  Securities
     lending  involves   administration  expenses,   including  finders'   fees.
     Distributions  of any  income  realized by  the  Portfolio from  securities
     loans will be  taxable. If the management of  the Portfolio decides to make
     securities loans, it is  intended that the value  of the securities  loaned
     would not exceed 30%  of the Portfolio's total assets. The Portfolio has no
     present intention of engaging in securities lending.
         
        
     Futures Contracts and Options on Futures Contracts
              A change  in the level of  interest rates may affect  the value of
     the securities held by the  Portfolio (or of securities that the  Portfolio
     expects to purchase).   To  hedge against changes  in rates, the  Portfolio
     may enter  into (i)  futures contracts  for the  purchase or  sale of  debt
     securities and (ii) futures contracts  on securities indices.   All futures
     contracts entered  into by the Portfolio are traded  on exchanges or boards
     of trade that are  licensed and regulated by the Commodity  Futures Trading
     Commission ("CFTC")  and  must be  executed  through a  futures  commission
     merchant or brokerage firm that is a member of the relevant  exchange.  The
     Portfolio may  purchase and write call and put options on futures contracts
     that are traded on  a United States or foreign exchange or  board of trade.
     The Portfolio will  be required, in connection with transactions in futures
     contracts and the writing of  options on futures, to make margin  deposits,
     which will be  held by  the Portfolio's custodian  for the  benefit of  the
     futures  commission merchant  through whom  the Portfolio  engages  in such
     futures and options transactions.
         
        
              Some  futures contracts  and options  thereon may  become illiquid
     under adverse market  conditions.  In  addition, during  periods of  market
     volatility, a  commodity exchange may  suspend or limit  transactions in an
     exchange-traded instrument,  which  may  make  the  instrument  temporarily
     illiquid and  difficult to price.   Commodity exchanges  may also establish
     daily limits on the amount that the price of  a futures contract or futures
     option can vary from  the previous day's settlement price.  Once  the daily
     limit is  reached, no trades  may be made  that day at  a price beyond  the
     limit.   This  may prevent  the Portfolio  from  closing out  positions and
     limiting its losses.
         
        
              The  Portfolio   will  engage  in  futures   and  related  options
     transactions  only  for  bona  fide  hedging  purposes  as  defined  in  or
     permitted  by CFTC  regulations.   The  Portfolio  will determine  that the

                                        B - 15
<PAGE>






     price fluctuations  in the  futures contracts  and options  on futures  are
     substantially  related to  price  fluctuations in  securities  held by  the
     Portfolio or  that  it  expects  to  purchase.    The  Portfolio's  futures
     transactions will be entered into  for traditional hedging purposes  - that
     is, futures  contracts will  be sold to  protect against  a decline in  the
     price of securities  that the Portfolio owns, or  futures contracts will be
     purchased  to protect the  Portfolio against  an increase  in the  price of
     securities it  intends to purchase.   As evidence  of this  hedging intent,
     the Portfolio expects  that on  75% or more  of the occasions  on which  it
     takes a  "long" futures  (or option)  position (involving  the purchase  of
     futures contracts),  the Portfolio will  have purchased, or will  be in the
     process  of purchasing,  equivalent amounts  of related  securities in  the
     cash market at the  time when  the futures (or  option) position is  closed
     out.   However, in particular  cases, when it  is economically advantageous
     for the Portfolio to do so,  a long futures position may be terminated  (or
     an option  may expire)  without the corresponding  purchase of  securities.
     The Portfolio  will engage in  transactions in futures  and related options
     contracts only  to the  extent such  transactions are  consistent with  the
     requirements  of the Code for maintaining the  qualification of each of the
     Portfolio's investment company investors as a  regulated investment company
     for federal income tax purposes (see "Tax Status").
         
        
              Transactions  using  futures  contracts  and  options (other  than
     options that  the  Portfolio has  purchased)  expose  the Portfolio  to  an
     obligation to another  party.  The Portfolio  will not enter into  any such
     transactions  unless it owns either  (1) an offsetting ("covered") position
     in  securities  or  other  options  or  futures  contracts,  or  (2)  cash,
     receivables and short-term debt securities  with a value sufficient  at all
     times to  cover its potential  obligations not covered  as provided  in (1)
     above.    The Portfolio  will comply  with Commission  guidelines regarding
     cover for these  instruments and, if the  guidelines so require, set  aside
     cash,  U.S.  Government   securities  or  other  liquid,   high-grade  debt
     securities in a  segregated account with  its custodian  in the  prescribed
     amount.
         
        
              Assets used as cover  or held  in a segregated  account cannot  be
     sold while the position in the corresponding futures contract or option  is
     open, unless  they  are replaced  with  other  appropriate assets.    As  a
     result,  the commitment  of a large  portion of  the Portfolio's  assets to
     cover or  segregated  accounts could  impede  portfolio management  or  the
     Portfolio's  ability   to  meet  redemption   requests  or  other   current
     obligations.
         
        
     Short-Term Obligations
              Although  the   Portfolio   will   normally  attempt   to   invest
     substantially  all of  its assets  in municipal  obligations, the Portfolio
     may, under  normal circumstances,  invest up to  20% of  its net assets  in
     short-term obligations the  interest on which is subject to regular federal
     income  tax,  is  a  tax  preference  item  for  purposes  of  the  federal

                                        B - 16
<PAGE>






     alternative minimum tax,  and/or is subject  to New  Jersey State  personal
     income taxes.   Such short-term taxable  obligations may  include, but  are
     not  limited to,  certificates  of  deposit, commercial  paper,  short-term
     notes and  obligations issued or guaranteed  by the U.S. Government  or any
     of  its agencies  or  instrumentalities. During  periods of  adverse market
     conditions,  the Portfolio  may  temporarily invest  more  than 20%  of its
     assets  in such short-term taxable  obligations, all of  which will be high
     quality.
         
        
         
        
     Investment Restrictions
              The  Portfolio has adopted  the following  investment restrictions
     which  may  not  be  changed without  the  approval  of  the  holders of  a
     "majority of the  outstanding voting securities" of the Portfolio, which as
     used  in this Part B means the lesser of (a) 67% or more of the outstanding
     voting securities of  the Portfolio present  or represented  by proxy at  a
     meeting  if the  holders  of  more  than  50%  of  the  outstanding  voting
     securities of  the Portfolio are present  or represented at the  meeting or
     (b) more than  50% of the outstanding  voting securities of the  Portfolio.
     The term  "voting  securities"  as used  in  this  paragraph has  the  same
     meaning  as in  the  1940 Act.   As  a  matter of  fundamental policy,  the
     Portfolio may not:
         
        
              (1) Borrow money or  issue senior securities  except as  permitted
              by the Investment Company Act of 1940;
         
              (2) Purchase  securities on margin  (but the  Portfolio may obtain
              such short-term credits  as may be necessary for the  clearance of
              purchases and sales of securities). The deposit or payment by  the
              Portfolio  of initial  or  maintenance margin  in  connection with
              futures  contracts   or  related   options  transactions  is   not
              considered the purchase of a security on margin;
        
         
              (3) Underwrite  or participate  in the marketing of  securities of
              others, except  insofar as it may  technically be deemed  to be an
              underwriter in selling  a portfolio  security under  circumstances
              which  may  require  the  registration  of  the   same  under  the
              Securities Act of 1933;
         
              (4) Purchase  or sell  real estate (including  limited partnership
              interests  in  real   estate,  but  excluding  readily  marketable
              interests in  real estate investment trusts  or readily marketable
              securities of  companies which invest  or deal in  real estate  or
              securities which are secured by real estate);
          
              (5) Purchase  or sell physical  commodities or  contracts for  the
              purchase or sale of physical commodities; or


                                        B - 17
<PAGE>






              (6) Make  loans to  any person except  by (a)  the acquisition  of
              debt instruments  and making portfolio  investments, (b)  entering
              into repurchase agreements and (c) lending portfolio securities.

              For  purposes of  the  investment restrictions  listed  above, the
     determination of  the "issuer"  of a  municipal obligation  which is  not a
     general obligation  bond will  be made  by  the Investment  Adviser on  the
     basis of the  characteristics of the obligation and other relevant factors,
     the most significant of which is the  source of funds committed to  meeting
     interest and principal payments of such obligation.
        
              The Portfolio has adopted  the following investment policies which
     may be changed by  the Portfolio  without approval of  its investors. As  a
     matter of  nonfundamental policy,  the Portfolio  will not:  (a) engage  in
     options,  futures or  forward  transactions  if more  than  5% of  its  net
     assets,  as  measured  by  the  aggregate  of  the  premiums  paid  by  the
     Portfolio, would  be so  invested; (b)  make short  sales of  securities or
     maintain  a short position,  unless at all times  when a  short position is
     open  it owns an equal amount of  such securities or securities convertible
     into  or exchangeable,  without payment of  any further  consideration, for
     securities  of the same  issue as, and equal  in amount  to, the securities
     sold  short, and unless  not more  than 25%  of the Portfolio's  net assets
     (taken at  current value) is held  as collateral for such  sales at any one
     time (The Portfolio will  make such sales only for the purpose of deferring
     realization of gain or  loss for federal income  tax purposes); (c)  invest
     more  than 15%  of its  net assets  in  investments which  are not  readily
     marketable,  including  restricted  securities  and  repurchase  agreements
     maturing in  more than seven  days. Restricted securities  for the purposes
     of this limitation do not  include securities eligible for  resale pursuant
     to Rule 144A under the Securities Act  of 1933 and commercial paper  issued
     pursuant  to Section 4(2)  of said  Act that the  Board of  Trustees of the
     Portfolio, or  its  delegate, determines  to  be  liquid; (d)  purchase  or
     retain  in its portfolio  any securities issued by  an issuer  any of whose
     officers, directors, trustees  or security holders is an officer or Trustee
     of  the Portfolio  or is  a member,  officer,  director or  trustee of  any
     investment  adviser  of  the  Portfolio,  if  after  the  purchase  of  the
     securities  of such issuer  by the  Portfolio one  or more of  such persons
     owns beneficially more than  1/2 of 1% of the shares or  securities or both
     (all  taken at market  value) of such issuer  and such  persons owning more
     than 1/2 of 1% of such shares or securities together own beneficially  more
     than 5% of such shares or  securities or both (all taken at market  value);
     or (e)  purchase oil, gas or  other mineral leases or  purchase partnership
     interests  in  oil,  gas   or  other  mineral  exploration  or  development
     programs.
         
        
              Whenever an investment policy  or investment restriction set forth
     in Part A or this Part  B states a maximum percentage of assets that may be
     invested in  any security  or other asset  or describes a  policy regarding
     quality  standards,  such  percentage  limitation  or   standard  shall  be
     determined   immediately  after  and  as   a  result   of  the  Portfolio's
     acquisition  of such  security  or  other  asset.  Accordingly,  any  later

                                        B - 18
<PAGE>






     increase or  decrease resulting from  a change  in values, assets  or other
     circumstances,  other than  a  subsequent  rating change  below  investment
     grade made by  a rating service, will  not compel the Portfolio  to dispose
     of such  security or  other asset.   Notwithstanding  the foregoing,  under
     normal  market conditions  the  Portfolio must  take  actions necessary  to
     comply with  the policy of  investing at least  65% of its  total assets in
     obligations of  New Jersey issuers.  Moreover, the Portfolio must always be
     in compliance with the borrowing policy set forth above.
         
        
              In  order  to permit  the  sale in  certain  states  of shares  of
     certain open-end investment companies that are  investors in the Portfolio,
     the  Portfolio  may make  commitments  more restrictive  than  the policies
     described above. Should  the Portfolio  determine that any  such commitment
     is no longer in the best  interests of the Portfolio and its investors,  it
     will revoke such commitment.
         
        
     Item 14.  Management of the Portfolio
              The  Trustees  and officers  of  the Portfolio  are listed  below.
     Except  as indicated,  each individual has  held the office  shown or other
     offices  in the  same  company for  the last  five years.  Unless otherwise
     noted,  the business  address of  each  Trustee and  officer is  24 Federal
     Street,  Boston, Massachusetts  02110,  which is  also  the address  of the
     Portfolio's investment  adviser, Boston Management  and Research ("BMR"  or
     the  "Investment  Adviser"),  a  wholly-owned  subsidiary  of  Eaton  Vance
     Management ("Eaton  Vance");  of Eaton  Vance's parent,  Eaton Vance  Corp.
     ("EVC"); and of BMR's and Eaton Vance's trustee, Eaton Vance, Inc.  ("EV").
     Eaton  Vance  and EV  are  both  wholly-owned  subsidiaries  of EVC.  Those
     Trustees who are "interested persons"  of the Portfolio, BMR,  Eaton Vance,
     EVC or EV, as  defined in the 1940 Act by virtue of  their affiliation with
     any one  or  more of  the  Portfolio, BMR,  Eaton  Vance,  EVC or  EV,  are
     indicated by an asterisk(*).
         
                              TRUSTEES OF THE PORTFOLIO
        
     DONALD R. DWIGHT (65), Trustee
     President   of  Dwight   Partners,   Inc.   (a  corporate   relations   and
     communications  company)  founded  in  1988;  Chairman   of  the  Board  of
     Newspapers of  New  England, Inc.  since  1983.   Director  or  Trustee  of
     various investment companies managed by Eaton Vance or BMR. 
     Address: Clover Mill Lane, Lyme, New Hampshire 03768
         
        
     JAMES B. HAWKES (54), Vice President and Trustee*
     Executive Vice President  of BMR, Eaton Vance,  EVC and EV, and  a Director
     of EVC  and EV.   Director  or Trustee  and officer  of various  investment
     companies managed by Eaton Vance or BMR.
         
        
     SAMUEL L. HAYES, III (61), Trustee
     Jacob  H.  Schiff Professor  of  Investment Banking  at  Harvard University

                                        B - 19
<PAGE>






     Graduate  School  of  Business  Administration.    Director  or Trustee  of
     various investment companies managed by Eaton Vance or BMR.
     Address:  Harvard University  Graduate School  of Business  Administration,
     Soldiers Field Road, Boston, Massachusetts 02134
         
        
     NORTON H. REAMER (60), Trustee
     President  and Director,  United Asset  Management  Corporation, a  holding
     company  owning   institutional  investment   management  firms.  Chairman,
     President and Director, UAM Funds  (mutual funds).  Director or Trustee  of
     various investment companies managed by Eaton Vance or BMR.
     Address: One International Place, Boston, Massachusetts 02110
         
        
     JOHN L. THORNDIKE (69), Trustee
     Director,  Fiduciary Company Incorporated.  Director  or Trustee of various
     investment companies managed by Eaton Vance or BMR.
     Address: 175 Federal Street, Boston, Massachusetts 02110
         
        
     JACK L. TREYNOR (66), Trustee
     Investment  Adviser  and  Consultant.    Director  or  Trustee  of  various
     investment companies managed by Eaton Vance or BMR.
     Address: 504 Via Almar, Palos Verdes Estates, California 90274
         
                              OFFICERS OF THE PORTFOLIO
        
     THOMAS J. FETTER (52), President
     Vice  President of BMR, Eaton  Vance and EV.  Officer of various investment
     companies managed by Eaton  Vance or BMR.  Mr. Fetter was elected President
     of the Portfolio on December 13, 1993.  
         
        
     WILLIAM H. AHERN (37), Vice President 
     Assistant Vice  President of  BMR, Eaton Vance  and EV  and an employee  of
     Eaton Vance  since July 17, 1989.  Officer  of various investment companies
     managed  by Eaton Vance  or BMR.   Mr. Ahern was  elected Vice President of
     the Portfolio on June 19, 1995.
         
        
     ROBERT B. MACINTOSH (39), Vice President
     Vice President of BMR since August 11, 1992, and of Eaton  Vance and EV and
     an employee of Eaton  Vance since  March 8, 1991.   Fidelity Investments  -
     Portfolio Manager  (1986-1991).   Officer of  various investment  companies
     managed by Eaton Vance or BMR.  
         
        
     JAMES L. O'CONNOR (51), Treasurer
     Vice President of  BMR, Eaton Vance and EV.   Officer of various investment
     companies managed by Eaton Vance or BMR.
         
        

                                        B - 20
<PAGE>






     THOMAS OTIS (64), Secretary
     Vice President and Secretary of BMR,  Eaton Vance, EVC and EV.  Officer  of
     various investment companies managed by Eaton Vance or BMR.
         
        
     JANET E. SANDERS (60), Assistant Secretary
     Vice President of  BMR, Eaton Vance and EV.   Officer of various investment
     companies managed by Eaton Vance or BMR.
         
        
         
        
     A. JOHN MURPHY (33), Assistant Secretary
     Assistant Vice President  of BMR, Eaton Vance  and EV since March  1, 1994;
     employee of  Eaton Vance since  March 1993.   State Regulations Supervisor,
     The  Boston  Company  (1991-1993)  and  Registration  Specialist,  Fidelity
     Management  & Research  Co.  (1986-1991).   Officer  of various  investment
     companies managed by Eaton  Vance or BMR.  Mr. Murphy was elected Assistant
     Secretary of the Portfolio on March 27, 1995.
         
        
     ERIC G. WOODBURY (39), Assistant Secretary
     Vice President of BMR,  Eaton Vance and  EV since February 1993;  formerly,
     associate attorney at  Dechert Price & Rhoads  and Gaston & Snow.   Officer
     of  various  investment  companies managed  by  Eaton Vance  or  BMR.   Mr.
     Woodbury  was elected  Assistant  Secretary of  the  Portfolio on  June 19,
     1995.
         
        
              Messrs. Thorndike (Chairman), Hayes  and Reamer are members of the
     Special Committee of  the Board of Trustees of  the Portfolio.  The purpose
     of the Special  Committee is to consider, evaluate and make recommendations
     to the full Board of  Trustees concerning (i) all  contractual arrangements
     with service  providers to  the Portfolio,  including investment  advisory,
     custodial  and fund  accounting  services, and  (ii)  all other  matters in
     which Eaton Vance or  its affiliates has any  actual or potential  conflict
     of interest with the Portfolio or its interestholders. 
          
        
              The Nominating Committee  is compromised of four  Trustees who are
     not  "interested  persons" as  that  term is  defined  under  the 1940  Act
     ("noninterested Trustees").   The Committee has four-year  staggered terms,
     with  one  member rotating  off the  Committee  to be  replaced  by another
     noninterested Trustee of the Portfolio.   Messrs. Hayes (Chairman), Reamer,
     Thorndike  and Treynor are currently serving on the Committee.  The purpose
     of the Committee is to recommend to the Board nominees  for the position of
     noninterested Trustee and to  assure that at least a majority of  the Board
     of Trustees is independent of Eaton Vance and its affiliates.
         
        
              Messrs. Treynor  (Chairman) and  Dwight are members  of the  Audit
     Committee of  the  Board of  Trustees.    The Audit  Committee's  functions

                                        B - 21
<PAGE>






     include making recommendations  to the Trustees regarding  the selection of
     the  independent certified  public  accountants,  and reviewing  with  such
     accountants and the  Treasurer of the Portfolio matters relative to trading
     and brokerage  policies and  practices, accounting  and auditing  practices
     and procedures, accounting  records, internal accounting controls,  and the
     functions performed by the custodian and transfer agent of the Portfolio.
         
        
              The fees and  expenses of those Trustees of  the Portfolio who are
     not members of the  Eaton Vance  organization (the noninterested  Trustees)
     are paid by the  Portfolio.  (The Trustees of the Portfolio who are members
     of  the  Eaton   Vance  organization  receive  no  compensation   from  the
     Portfolio).    During   the  fiscal  year   ended  March   31,  1996,   the
     noninterested Trustees of  the Portfolio earned the  following compensation
     in their  capacities as Trustees of  the Portfolio and in  their capacities
     as trustees of the funds in the Eaton Vance fund complex(1):
         
        
                               Aggregate        Total Compensation
                               Compensation     from Portfolio
     Name                      from Portfolio   and Fund Complex
     ----                      --------------   ------------------

     Donald R.
     Dwight                    $1,118(2)        $137,500(4)

     Samuel L.
     Hayes, III                 1,256(3)         153,750(5)

     Norton H.
     Reamer                     1,235            137,500

     John L.
     Thorndike                  1,315           142,500

     Jack L.
     Treynor                    1,236           142,500
         
        
     (1)      The  Eaton   Vance  fund   complex  consists  of   217  registered
              investment companies or series thereof.
     (2)      Includes $375 of deferred compensation.
     (3)      Includes $446 of deferred compensation.
     (4)      Includes $35,312 of deferred compensation.
     (5)      Includes $37,500 of deferred compensation.
         
        
              Trustees  of the  Portfolio who  are not  affiliated with  BMR may
     elect  to defer  receipt of  all or  a percentage  of their  annual fees in
     accordance with the  terms of a  Trustees Deferred  Compensation Plan  (the
     "Plan").   Under  the Plan,  an  eligible Trustee  may  elect to  have  his
     deferred  fees invested by the Portfolio in the shares of one or more funds

                                        B - 22
<PAGE>






     in the Eaton  Vance Family of  Funds, and the  amount paid to  the Trustees
     under  the  Plan will  be  determined based  upon  the performance  of such
     investments.   Deferral of Trustees' fees in accordance  with the Plan will
     have a  negligible effect on  the Portfolio's assets,  liabilities, and net
     income  per  share,  and will  not  obligate  the Portfolio  to  retain the
     services  of any Trustee  or obligate  the Portfolio to  pay any particular
     level of  compensation to  the  Trustee.   The Portfolio  does not  have  a
     retirement plan for its Trustees.  
         
              The  Portfolio's  Declaration  of  Trust  provides  that  it  will
     indemnify  its  Trustees  and officers  against  liabilities  and  expenses
     incurred in  connection  with litigation  in  which  they may  be  involved
     because  of their offices  with the Portfolio,  unless, as  to liability to
     the  Portfolio  or its  investors,  it  is  finally  adjudicated that  they
     engaged in  willful misfeasance, bad  faith, gross  negligence or  reckless
     disregard  of the duties involved in  their offices, or unless with respect
     to any  other matter it  is finally  adjudicated that they  did not act  in
     good  faith in the  reasonable belief that their  actions were  in the best
     interests   of  the   Portfolio.   In   the   case  of   settlement,   such
     indemnification will  not be provided  unless it has  been determined by  a
     court or other body  approving the settlement or other disposition, or by a
     reasonable determination, based upon  a review of readily available  facts,
     by vote of a majority of noninterested Trustees or in a written  opinion of
     independent counsel, that  such officers or  Trustees have  not engaged  in
     wilful misfeasance, bad  faith, gross negligence or  reckless disregard  of
     their duties.
        
     Item 15.  Control Persons and Principal Holder of Securities
              As  of July  1,  1996,  EV Marathon  New Jersey  Limited  Maturity
     Municipals Fund (the "Marathon Fund"),  a series of Eaton  Vance Investment
     Trust, controlled the  Portfolio by virtue of owning approximately 97.6% of
     the value  of  the outstanding  interests  in  the Portfolio.  Because  the
     Marathon  Fund controls  the  Portfolio, it  may  take actions  without the
     approval of  any  other  investor.  The  Marathon  Fund  has  informed  the
     Portfolio that  whenever it is requested  to vote on  matters pertaining to
     the  fundamental policies  of  the Portfolio,  it  will hold  a  meeting of
     shareholders and will cast  its vote as instructed by its  shareholders. It
     is  anticipated  that  any other  investor  in  the Portfolio  which  is an
     investment company registered  under the 1940 Act would  follow the same or
     a  similar  practice.     Eaton  Vance  Investment  Trust  is  an  open-end
     management investment company  organized as a business trust under the laws
     of the Commonwealth of Massachusetts.
         
        
     Item 16.  Investment Advisory and Other Services
              Investment  Adviser.  The Portfolio engages  BMR as its investment
     adviser pursuant  to an  Investment Advisory  Agreement  dated October  13,
     1992.  BMR  or  Eaton  Vance  acts  as  investment  adviser  to  investment
     companies and  various individual and  institutional clients with  combined
     assets under management of over $16 billion.
         
              BMR manages the investments  and affairs of the Portfolio  subject

                                        B - 23
<PAGE>






     to the supervision of  the Portfolio's Board of Trustees.  BMR furnishes to
     the Portfolio  investment research,  advice and  supervision, furnishes  an
     investment program, and determines what securities  will be purchased, held
     or sold  by the  Portfolio and  what portion,  if any,  of the  Portfolio's
     assets will be held uninvested. The Investment Advisory Agreement  requires
     BMR  to pay  the salaries  and fees  of all  officers  and Trustees  of the
     Portfolio who are members of the BMR organization and all personnel of  BMR
     performing services  relating to  research and  investment activities.  The
     Portfolio is  responsible  for all  expenses  not  expressly stated  to  be
     payable  by BMR under the Investment Advisory Agreement, including, without
     implied  limitation,  (i)   expenses  of  maintaining  the   Portfolio  and
     continuing  its existence,  (ii) registration  of the  Portfolio under  the
     1940 Act, (iii)  commissions, fees and  other expenses  connected with  the
     acquisition, holding and  disposition of securities and  other investments,
     (iv) auditing, accounting  and legal expenses, (v) taxes and interest, (vi)
     governmental  fees,  (vii)  expenses  of  issue,  sale  and  redemption  of
     interests in the  Portfolio, (viii) expenses of registering  and qualifying
     the Portfolio  and  interests in  the  Portfolio  under federal  and  state
     securities laws and of  preparing and  printing registration statements  or
     other  offering  statements  or  memoranda   for  such  purposes  and   for
     distributing the  same to investors,  and fees and  expenses of registering
     and  maintaining  registrations of  the  Portfolio and  of  the Portfolio's
     placement  agent as  broker-dealer  or agent  under state  securities laws,
     (ix)  expenses  of reports  and  notices to  investors  and of  meetings of
     investors  and proxy  solicitations therefor,  (x) expenses  of  reports to
     governmental  officers  and  commissions, (xi)  insurance  expenses,  (xii)
     association membership  dues, (xiii)  fees, expenses  and disbursements  of
     custodians and subcustodians  for all services to  the Portfolio (including
     without   limitation   safekeeping  for   funds,   securities   and   other
     investments, keeping of  books, accounts and records, and  determination of
     net asset values,  book capital account  balances and  tax capital  account
     balances),  (xiv) fees,  expenses  and  disbursements of  transfer  agents,
     dividend disbursing  agents, investor servicing  agents and registrars  for
     all  services to the Portfolio, (xv) expenses for servicing the accounts of
     investors, (xvi) any direct charges  to investors approved by  the Trustees
     of  the Portfolio,  (xvii)  compensation and  expenses  of Trustees  of the
     Portfolio who  are not members  of the BMR  organization, and (xviii)  such
     nonrecurring items as  may arise, including expenses incurred in connection
     with  litigation,  proceedings  and  claims  and   the  obligation  of  the
     Portfolio  to indemnify  its Trustees, officers  and investors with respect
     thereto.
        
              For a description of the compensation that the Portfolio pays  BMR
     under the Investment Advisory Agreement, see  "Management of the Portfolio"
     in  Part  A.    As of  March 1,  1996,  the  Portfolio  had  net assets  of
     $80,172,576.  For the fiscal year ended March 31, 1996, the Portfolio  paid
     BMR  advisory fees  of  $412,454 (equivalent  to  0.46% of  the Portfolio's
     average daily  net assets for such year).  For  the fiscal year ended March
     31,  1995, the Portfolio paid BMR  advisory fees of $468,562 (equivalent to
     0.46% of the Portfolio's  average daily net assets for such year).  For the
     period from  the start of  business, May  3, 1993, to  March 31, 1994,  the
     Portfolio  paid  BMR  advisory   fees  of  $353,231  (equivalent  to  0.45%

                                        B - 24
<PAGE>






     (annualized) of the  Portfolio's average daily net assets for such period).
         
        
              The  Investment  Advisory Agreement  with  BMR  remains  in effect
     until  February 28, 1997.   It may be  continued indefinitely thereafter so
     long as such continuance is approved at  least annually (i) by the vote  of
     a majority of the Trustees of the Portfolio who are not interested  persons
     of the  Portfolio or of BMR cast in person at a meeting specifically called
     for  the purpose  of  voting on  such approval  and  (ii) by  the  Board of
     Trustees of  the Portfolio  or by  vote of  a majority  of the  outstanding
     voting securities of  the Portfolio.   The Agreement  may be terminated  at
     any time without  penalty on sixty (60)  days' written notice by  the Board
     of  Trustees of either party, or by vote of the majority of the outstanding
     voting securities  of  the  Portfolio,  and the  Agreement  will  terminate
     automatically in the event of its assignment.   The Agreement provides that
     BMR may render  services to others.   The Agreement also provides  that BMR
     shall  not  be  liable  for  any  loss  incurred  in  connection  with  the
     performance  of  its   duties,  or  action  taken  or  omitted  under  that
     Agreement,  in  the  absence  of  willful  misfeasance,  bad  faith,  gross
     negligence in the  performance of its duties  or by reason of  its reckless
     disregard  of its  obligations  and duties  thereunder,  or for  any losses
     sustained in the  acquisition, holding or  disposition of  any security  or
     other investment.
         
        
              BMR is a wholly-owned subsidiary  of Eaton Vance.  Eaton Vance and
     EV are both  wholly-owned subsidiaries  of EVC.   BMR and  Eaton Vance  are
     both Massachusetts business trusts, and EV is the trustee of BMR and  Eaton
     Vance.   The Directors of  EV are Landon  T. Clay, H. Day  Brigham, Jr., M.
     Dozier  Gardner,  James  B.  Hawkes, and  Benjamin  A.  Rowland,  Jr.   The
     Directors of EVC consist of the same persons and John G.L. Cabot and  Ralph
     Z. Sorenson.  Mr. Clay is chairman  and Mr. Gardner is president and  chief
     executive officer of EVC, BMR, Eaton  Vance and EV.  All of  the issued and
     outstanding shares of  Eaton Vance and  EV are owned  by EVC.   All of  the
     issued and outstanding shares of BMR are  owned by Eaton Vance.  All shares
     of  the outstanding Voting  Common Stock of EVC  are deposited  in a Voting
     Trust, which  expires on December  31, 1996, the  Voting Trustees of  which
     are  Messrs.  Clay, Brigham,  Gardner,  Hawkes  and  Rowland.   The  Voting
     Trustees have unrestricted voting rights  for the election of  Directors of
     EVC.   All  of  the outstanding  voting  trust receipts  issued under  said
     Voting  Trust are owned by  certain of the officers  of BMR and Eaton Vance
     who are also officers and  Directors of EVC and EV.   As of June  30, 1996,
     Messrs.  Clay,  Gardner and  Hawkes each  owned  24% of  such  voting trust
     receipts, and Messrs.  Rowland and Brigham owned 15% and 13%, respectively,
     of  such voting trust  receipts.  Messrs. Hawkes  and Otis  are officers or
     Trustees of the Portfolio and are members of the EVC,  BMR, Eaton Vance and
     EV organizations.  Messrs. Ahern,  Fetter, MacIntosh, Murphy, O'Connor  and
     Woodbury  and Ms.  Sanders  are  officers of  the  Portfolio and  are  also
     members of the BMR,  Eaton Vance  and EV organizations.   BMR will  receive
     the fees paid under the Investment Advisory Agreement.
         
        

                                        B - 25
<PAGE>






              EVC owns all of the stock of Energex Energy Corporation,  which is
     engaged  in oil and  gas exploration and  development.   In addition, Eaton
     Vance  owns  all  of the  stock  of Northeast  Properties,  Inc.,  which is
     engaged  in real  estate investment.   EVC  also owns  24% of  the Class  A
     shares  of   Lloyd  George  Management   (B.V.I.)  Limited,  a   registered
     investment adviser.  EVC  owns all of the stock of Fulcrum Management, Inc.
     and  MinVen  Inc., which  are  engaged  in  precious  metal mining  venture
     investment and  management.  EVC,  BMR, Eaton Vance  and EV may also  enter
     into other businesses.
         
              EVC and its affiliates and their officers and employees from  time
     to time  have transactions with  various banks, including  the custodian of
     the  Portfolio, Investors  Bank  & Trust  Company.    It is  Eaton  Vance's
     opinion that the  terms and conditions  of such transactions  were not  and
     will not  be  influenced  by  existing  or  potential  custodial  or  other
     relationships between the Portfolio and such banks.
        
              Custodian.   Investors  Bank &  Trust  Company  ("IBT"), 89  South
     Street, Boston,  Massachusetts, acts as  custodian for the  Portfolio.  IBT
     has the  custody of all  of the Portfolio's  assets, maintains the  general
     ledger  of  the  Portfolio, and  computes  the  daily  net asset  value  of
     interests  in the Portfolio.   In  such capacity  it attends to  details in
     connection with the sale, exchange,  substitution or transfer of,  or other
     dealings  with, the  Portfolio's investments,  receives  and disburses  all
     funds, and  performs  various  other ministerial  duties  upon  receipt  of
     proper  instructions  from the  Portfolio.    IBT  charges  fees which  are
     competitive within the industry.   A portion of the fee relates to custody,
     bookkeeping and  valuation  services and  is  based  upon a  percentage  of
     Portfolio net assets and a portion of the  fee relates to activity charges,
     primarily the  number  of portfolio  transactions.    These fees  are  then
     reduced by a credit  for cash  balances of the  Portfolio at the  custodian
     equal to 75% of the  91-day, U.S. Treasury Bill auction rate applied to the
     Portfolio's  average daily  collected  balances for  the  week.   Landon T.
     Clay, a  Director of  EVC  and an  officer, Trustee  or Director  of  other
     entities in the  Eaton Vance organization,  owns approximately  13% of  the
     voting stock  of Investors  Financial Services  Corp., the  holding company
     parent of IBT.  Management believes that such ownership does not create  an
     affiliated person  relationship between  the Portfolio  and  IBT under  the
     1940 Act. 
         
        
              Independent Certified Public Accountants.   Deloitte & Touche LLP,
     125 Summer  Street, Boston,  Massachusetts, are  the independent  certified
     public accountants of  the Portfolio, providing audit services,  tax return
     preparation,  and   assistance  and  consultation   with  respect  to   the
     preparation of filings with the Commission.
         

     Item 17.  Brokerage Allocation and Other Practices
              Decisions   concerning  the   execution   of   portfolio  security
     transactions, including  the  selection of  the  market and  the  executing
     firm,  are made  by BMR.    BMR is  also responsible  for the  execution of

                                        B - 26
<PAGE>






     transactions for all other accounts managed by it.
        
              BMR places  the portfolio  security transactions of  the Portfolio
     and  of all other  accounts managed  by it  for execution with  many firms.
     BMR  uses  its best  efforts  to  obtain  execution  of portfolio  security
     transactions at  prices  that are  advantageous  to  the Portfolio  and  at
     reasonably competitive  spreads or  (when a disclosed  commission is  being
     charged)  at reasonably  competitive  commission rates.    In seeking  such
     execution, BMR will  use its  best judgment in  evaluating the  terms of  a
     transaction  and  will  give  consideration  to  various  relevant  factors
     including, without  limitation, the size  and type of  the transaction, the
     nature and character of the  market for the security,  the confidentiality,
     speed  and certainty  of effective execution  required for the transaction,
     the general  execution and operational capabilities  of the executing firm,
     the  reputation, reliability,  experience and  financial  condition of  the
     firm,  the value and quality of  the services rendered by  the firm in this
     and  other   transactions,  and  the   reasonableness  of  the  spread   or
     commission, if  any.   Municipal  obligations  purchased  and sold  by  the
     Portfolio are  generally traded  in the  over-the-counter market  on a  net
     basis (i.e.,  without commission) through  broker-dealers and banks  acting
     for their  own  account  rather  than  as  brokers,  or  otherwise  involve
     transactions directly  with the  issuer of  such obligations.   Such  firms
     attempt to  profit from such  transactions by buying  at the bid price  and
     selling at the higher asked price of  the market for such obligations,  and
     the difference between the bid  and asked prices is customarily referred to
     as the spread.  The Portfolio may  also purchase municipal obligations from
     underwriters,   the  cost  of  which   may  include  undisclosed  fees  and
     concessions to  the  underwriters.    While  it  is  anticipated  that  the
     Portfolio  will not  pay significant  brokerage  commissions in  connection
     with such portfolio  security transactions, on occasion it may be necessary
     or appropriate  to purchase  or  sell a  security through  a broker  on  an
     agency  basis,  in   which  case  the  Portfolio  will  incur  a  brokerage
     commission.    Although  spreads  or  commissions   on  portfolio  security
     transactions will,  in the judgment  of BMR,  be reasonable in  relation to
     the value of  the services provided, spreads or commissions exceeding those
     that another  firm might charge may  be paid to firms  who were selected to
     execute transactions on  behalf of the  Portfolio and  BMR's other  clients
     for providing brokerage and research services to BMR.
         
        
              As authorized in  Section 28(e) of the Securities Exchange  Act of
     1934, a broker or  dealer who executes a portfolio transaction on behalf of
     the Portfolio may receive  a commission that is in excess of  the amount of
     commission another broker or dealer  would have charged for  effecting that
     transaction if  BMR  determines in  good  faith  that such  commission  was
     reasonable in relation  to the value of the brokerage and research services
     provided.   This determination  may be  made either  on the  basis of  that
     particular transaction  or on  the basis  of overall responsibilities  that
     BMR  and  its  affiliates  have  for  accounts  over  which  they  exercise
     investment discretion.   In  making any  such determination,  BMR will  not
     attempt  to place a  specific dollar  value on  the brokerage  and research
     services provided or to  determine what portion of the commission should be

                                        B - 27
<PAGE>






     related to  such services.   Brokerage  and research  services may  include
     advice  as to the  value of securities,  the advisability  of investing in,
     purchasing or  selling securities,  and the  availability of securities  or
     purchasers  or  sellers  of securities;  furnishing  analyses  and  reports
     concerning  issuers, industries,  securities, economic  factors and trends,
     portfolio strategy  and the performance  of accounts; effecting  securities
     transactions  and   performing  functions   incidental  thereto   (such  as
     clearance and settlement); and the  "Research Services" referred to  in the
     next paragraph.
         
        
              It  is a common  practice of the investment  advisory industry and
     of the advisers of  investment companies, institutions and other  investors
     to receive research, statistical and quotation  services, data, information
     and other services,  products and materials  that assist  such advisers  in
     the  performance of their investment responsibilities ("Research Services")
     from  broker-dealer  firms  that execute  portfolio  transactions  for  the
     clients  of  such  advisers  and   from  third  parties  with   which  such
     broker-dealers  have arrangements.    Consistent  with this  practice,  BMR
     receives  Research Services  from many broker-dealer  firms with  which BMR
     places  the Portfolio's  transactions  and from  third  parties with  which
     these broker-dealers  have arrangements.   These Research Services  include
     such matters as general economic  and market reviews, industry  and company
     reviews,   evaluations  of   securities   and  portfolio   strategies   and
     transactions and recommendations  as to the purchase and sale of securities
     and   other   portfolio  transactions,   financial,   industry  and   trade
     publications,  news  and  information   services,  pricing  and   quotation
     equipment and services, and research oriented  computer hardware, software,
     data bases and  services.  Any particular Research Service obtained through
     a broker-dealer  may be  used by  BMR in  connection  with client  accounts
     other than those accounts that pay commissions  to such broker-dealer.  Any
     such  Research Service  may  be  broadly useful  and  of  value to  BMR  in
     rendering investment advisory services to  all or a significant  portion of
     its clients, or may  be relevant and useful for the  management of only one
     client's account  or of only a few clients' accounts,  or may be useful for
     the   management  of  merely  a   segment  of  certain  clients'  accounts,
     regardless of whether any such account or  accounts paid commissions to the
     broker-dealer  through  which  such Research  Service  was  obtained.   The
     advisory fee  paid by  the Portfolio  is not  reduced because  BMR receives
     such  Research Services.    BMR evaluates  the  nature and  quality of  the
     various  Research  Services  obtained   through  broker-dealer  firms   and
     attempts to allocate  sufficient commissions to  such firms  to ensure  the
     continued receipt of Research Services  that BMR believes are useful or  of
     value to it in rendering investment advisory services to its clients.
         
        
              Subject to the  requirement that BMR shall use its best efforts to
     seek and  execute portfolio  security transactions  at advantageous  prices
     and  at  reasonably  competitive  spreads  or  commission   rates,  BMR  is
     authorized to consider  as a factor  in the selection of  any broker-dealer
     firm with whom portfolio  orders may be placed the fact that  such firm has
     sold or is selling  shares of  any investment company  sponsored by BMR  or

                                        B - 28
<PAGE>






     Eaton  Vance.  This policy is not inconsistent  with a rule of the National
     Association of Securities  Dealers, Inc. ("NASD"), which rule provides that
     no  firm  that is  a  member  of  the  NASD  shall favor  or  disfavor  the
     distribution of shares  of any particular  investment company  or group  of
     investment  companies on  the  basis of  brokerage commissions  received or
     expected by such firm from any source.
         
        
              Municipal obligations considered as investments for  the Portfolio
     may  also be  appropriate for other  investment accounts managed  by BMR or
     its affiliates.   BMR will attempt to allocate equitably portfolio security
     transactions  among  the   Portfolio  and  the  portfolios  of   its  other
     investment  accounts  purchasing municipal  obligations  whenever decisions
     are made to purchase  or sell securities by the  Portfolio and one or  more
     of such other  accounts simultaneously.   In making  such allocations,  the
     main factors to be considered  are the respective investment  objectives of
     the  Portfolio and  such  other accounts,  the  relative size  of portfolio
     holdings of the  same or comparable  securities, the  availability of  cash
     for  investment by the Portfolio and such  accounts, the size of investment
     commitments  generally held  by  the Portfolio  and  such accounts  and the
     opinions of  the persons  responsible for  recommending investments to  the
     Portfolio  and  such  accounts.     While  this  procedure  could   have  a
     detrimental effect on the  price or amount  of the securities available  to
     the Portfolio from time  to time, it is the opinion of the  Trustees of the
     Portfolio that the  benefits available from the  BMR organization  outweigh
     any   disadvantage  that   may   arise   from  exposure   to   simultaneous
     transactions.   For the  fiscal year  ended March  31, 1996, the  Portfolio
     paid brokerage  commissions of  $8,485 on  portfolio security  transactions
     aggregating $76,006,263 to firms which  provided some research services  to
     BMR or its affiliates (although many of  such firms may have been  selected
     in  any  particular  transaction  primarily  because   of  their  execution
     capabilities).   For the  fiscal year  ended March  31, 1995,  and for  the
     period  from the  start of business,  May 3,  1993, to March  31, 1994, the
     Portfolio paid no brokerage commissions on portfolio transactions.  
         
     Item 18.  Capital Stock and Other Securities
              Under  the  Portfolio's Declaration  of  Trust,  the  Trustees are
     authorized to issue interests in the Portfolio.  Investors  are entitled to
     participate pro rata  in distributions of  taxable income,  loss, gain  and
     credit of the Portfolio.   Upon dissolution of the Portfolio,  the Trustees
     shall liquidate the  assets of the Portfolio  and apply and  distribute the
     proceeds  thereof as follows:  (a) first, to the  payment of  all debts and
     obligations  of   the  Portfolio  to   third  parties  including,   without
     limitation, the retirement  of outstanding debt, including any debt owed to
     holders of  record  of interests  in  the  Portfolio ("Holders")  or  their
     affiliates, and the  expenses of liquidation, and to  the setting up of any
     reserves  for contingencies  which  may be  necessary;  and (b)  second, in
     accordance with the  Holders' positive Book Capital Account  balances after
     adjusting  Book Capital  Accounts for  certain allocations  provided in the
     Declaration of Trust and in  accordance with the requirements  described in
     Treasury Regulations Section 1.704-1(b)(2)(ii)(b)(2).  Notwithstanding  the
     foregoing,  if the Trustees shall determine that  an immediate sale of part

                                        B - 29
<PAGE>






     or all  of  the assets  of the  Portfolio  would cause  undue  loss to  the
     Holders,  the Trustees,  in order  to avoid  such  loss, may,  after having
     given notification to all  the Holders, to the  extent not then  prohibited
     by the  law of any jurisdiction  in which the  Portfolio is then  formed or
     qualified and applicable in the circumstances, either defer liquidation  of
     and withhold  from distribution  for a  reasonable time  any assets  of the
     Portfolio  except  those necessary  to  satisfy the  Portfolio's  debts and
     obligations  or  distribute  the  Portfolio's  assets  to  the  Holders  in
     liquidation.   Interests in  the Portfolio have  no preference, preemptive,
     conversion or similar rights and  are fully paid and  nonassessable, except
     as set  forth below.   Interests in the  Portfolio may not be  transferred.
     Certificates  representing an  investor's  interest  in the  Portfolio  are
     issued only upon the written request of a Holder.

              Each Holder  is entitled  to vote in  proportion to  the amount of
     its interest  in  the Portfolio.   Holders  do not  have cumulative  voting
     rights.   The Portfolio  is not required  and has  no current intention  to
     hold  annual meetings of Holders,  but the Portfolio  will hold meetings of
     Holders when in  the judgment of the  Portfolio's Trustees it  is necessary
     or desirable to  submit matters to  a vote of  Holders at a  meeting.   Any
     action which may  be taken by  Holders may  be taken without  a meeting  if
     Holders holding more  than 50% of all  interests entitled to vote  (or such
     larger  proportion thereof as shall be required by any express provision of
     the  Declaration of  Trust  of the  Portfolio)  consent  to the  action  in
     writing and  the  consents  are  filed with  the  records  of  meetings  of
     Holders.
        
              The Portfolio's  Declaration of Trust  may be amended  by vote  of
     Holders of more than 50%  of all interests in the Portfolio  at any meeting
     of Holders or by an instrument in writing without  a meeting, executed by a
     majority of  the Trustees and consented to by  the Holders of more than 50%
     of all  interests.  The  Trustees may also  amend the Declaration of  Trust
     (without the vote or  consent of Holders) to change the Portfolio's name or
     the state or  other jurisdiction whose law  shall be the governing  law, to
     supply  any  omission  or  cure,  correct   or  supplement  any  ambiguous,
     defective or  inconsistent provision,  to conform the  Declaration of Trust
     to applicable  federal law  or regulations  or to the  requirements of  the
     Code, or  to change,  modify or rescind  any provision, provided  that such
     change, modification  or rescission  is determined  by the  Trustees to  be
     necessary or appropriate  and not to  have a  materially adverse effect  on
     the financial interests  of the Holders.   No amendment of  the Declaration
     of  Trust which  would  change  any rights  with  respect to  any  Holder's
     interest  in the  Portfolio  by reducing  the  amount payable  thereon upon
     liquidation of the Portfolio  may be made, except with the vote  or consent
     of  the  Holders  of  two-thirds  of  all  interests.    References in  the
     Declaration  of  Trust  and in  Part  A  or  this  Part B  to  a  specified
     percentage of,  or fraction of,  interests in the  Portfolio, means Holders
     whose  combined Book  Capital  Account  balances represent  such  specified
     percentage or  fraction of  the combined  Book Capital  Account balance  of
     all, or a specified group of, Holders.
         
              The   Portfolio  may   merge   or  consolidate   with   any  other

                                        B - 30
<PAGE>






     corporation,  association, trust  or  other  organization  or may  sell  or
     exchange  all or  substantially  all of  its  assets  upon such  terms  and
     conditions  and  for such  consideration  when  and  as  authorized by  the
     Holders of  (a) 67% or more  of the interests  in the Portfolio  present or
     represented at  the meeting of Holders, if Holders  of more than 50% of all
     interests are present or represented  by proxy, or (b) more than 50% of all
     interests, whichever is  less.  The Portfolio may  be terminated (i) by the
     affirmative vote of  Holders of not less  than two-thirds of  all interests
     at  any meeting  of  Holders  or by  an  instrument  in writing  without  a
     meeting,  executed  by a  majority  of  the Trustees  and  consented to  by
     Holders  of not  less than  two-thirds of  all  interests, or  (ii) by  the
     Trustees by written notice to the Holders.

              In accordance with the Declaration  of Trust, there normally  will
     be  no meetings  of the  investors  for the  purpose  of electing  Trustees
     unless and until  such time as less than a majority of the Trustees holding
     office have been elected  by investors.  In such an event,  the Trustees of
     the  Portfolio then  in  office will  call  an investors'  meeting for  the
     election of Trustees.  Except  for the foregoing circumstances,  and unless
     removed  by action  of  the investors  in  accordance with  the Portfolio's
     Declaration of Trust,  the Trustees shall continue  to hold office and  may
     appoint successor Trustees.
        
              The  Declaration of Trust provides that no person shall serve as a
     Trustee  if investors holding two-thirds of  the outstanding interests have
     removed him  from that office  either by a  written declaration filed  with
     the  Portfolio's custodian or  by votes cast at  a meeting  called for that
     purpose.   The Declaration  of Trust  further provides  that under  certain
     circumstances, the investors  may call a  meeting to  remove a Trustee  and
     that the Portfolio  is required to provide assistance in communicating with
     investors about such a meeting.
         
              The  Portfolio is organized as a trust under the laws of the State
     of New York.   Investors in  the Portfolio will  be held personally  liable
     for its obligations  and liabilities, subject, however,  to indemnification
     by the Portfolio  in the  event that there  is imposed  upon an investor  a
     greater portion  of the liabilities  and obligations of  the Portfolio than
     its proportionate  interest in  the Portfolio.   The  Portfolio intends  to
     maintain fidelity  and errors and  omissions  insurance  deemed adequate by
     the Trustees.   Therefore, the risk of an investor incurring financial loss
     on account of investor  liability is limited to circumstances in which both
     inadequate insurance exists and the Portfolio itself  is unable to meet its
     obligations.

              The Declaration of Trust further provides  that obligations of the
     Portfolio are not  binding upon the Trustees individually but only upon the
     property of  the Portfolio and that the Trustees will not be liable for any
     action or failure to  act, but nothing in the Declaration of Trust protects
     a Trustee against  any liability to which he  would otherwise be subject by
     reason of willful  misfeasance, bad  faith, gross  negligence, or  reckless
     disregard of the duties involved in the conduct of his office.


                                        B - 31
<PAGE>






     Item 19.  Purchase, Redemption and Pricing of Securities
              Interests  in the Portfolio are issued solely in private placement
     transactions that do not involve  any "public offering" within  the meaning
     of Section 4(2)  of the Securities Act of  1933. See "Purchase of Interests
     in the Portfolio" and "Redemption or Decrease of Interest" in Part A.
        
              The Portfolio's net asset value is determined by Investors Bank  &
     Trust  Company (as  custodian and agent  for the  Portfolio) in  the manner
     described  in Part A.   The net asset value is  computed by subtracting the
     liabilities of the Portfolio from the value of its total assets.   Inasmuch
     as the market for municipal obligations is a  dealer market with no central
     trading location  or continuous  quotation system,  it is  not feasible  to
     obtain last transaction prices for  most municipal obligations held  by the
     Portfolio,  and   such  obligations,   including  those   purchased  on   a
     when-issued  basis, will  normally  be valued  on  the basis  of valuations
     furnished by a pricing service.  The pricing service  uses information with
     respect  to transactions  in bonds,  quotations from  bond dealers,  market
     transactions  in  comparable  securities,  various  relationships   between
     securities,  and  yield   to  maturity  in  determining   value.    Taxable
     obligations for which  price quotations are readily available normally will
     be valued at  the mean between the  latest available bid and  asked prices.
     Open futures positions  on debt  securities are valued  at the most  recent
     settlement prices unless such price does not reflect  the fair value of the
     contract,  in  which  case  the positions  will  be  valued  by  or at  the
     direction of the Trustees  of the  Portfolio.  Other  assets are valued  at
     fair value using  methods determined in good  faith by or at  the direction
     of the Trustees.  
         
     Item 20.  Tax Status
              The Portfolio has  been advised by tax counsel that,  provided the
     Portfolio is operated at all times during  its existence in accordance with
     certain organizational and  operational documents, the Portfolio  should be
     classified as a  partnership under  the Internal Revenue  Code of 1986,  as
     amended  (the "Code"), and it should not be a "publicly traded partnership"
     within  the  meaning  of Section  7704  of  the  Code.   Consequently,  the
     Portfolio does  not expect  that it  will be  required to  pay any  federal
     income tax,  and  a  Holder  will  be required  to  take  into  account  in
     determining its federal income tax  liability its share of  the Portfolio's
     income, gains, losses, deductions and tax preference items.
        
              Under Subchapter  K of the Code, a partnership is considered to be
     either an aggregate of  its members or a separate entity depending upon the
     factual  and  legal  context  in  which  the  question  arises.  Under  the
     aggregate approach, each  partner is  treated as an  owner of an  undivided
     interest  in partnership assets and  operations. Under the entity approach,
     the partnership is  treated as a separate entity  in which partners have no
     direct  interest in  partnership assets and  operations. The  Portfolio has
     been advised by tax  counsel that, in the  case of a  Holder that seeks  to
     qualify  as  a  regulated  investment  company  (a  "RIC"),  the  aggregate
     approach should  apply, and each  such Holder should  accordingly be deemed
     to own a proportionate share  of each of the assets of the Portfolio and to
     be entitled  to the  gross income  of the  Portfolio  attributable to  that

                                        B - 32
<PAGE>






     share  for purposes of all requirements of Sections 851(b) and 852(b)(5) of
     the Code. Further, the Portfolio has been advised  by tax counsel that each
     Holder  that seeks  to  qualify as  a  RIC  should be  deemed  to hold  its
     proportionate share of  the Portfolio's assets for the period the Portfolio
     has held  the assets or for the  period the Holder has  been an investor in
     the Portfolio,  whichever is shorter.  Investors should  consult their  tax
     advisers regarding whether  the entity or the aggregate approach applies to
     their  investment in the Portfolio in light  of their particular tax status
     and any special tax rules applicable to them.
         
              In  order to enable a  Holder in  the Portfolio that  is otherwise
     eligible  to qualify  as  a  RIC,  the  Portfolio intends  to  satisfy  the
     requirements of Subchapter M of the Code relating to sources of income  and
     diversification of  assets as if they were applicable  to the Portfolio and
     to allocate and  permit withdrawals in a  manner that will enable  a Holder
     which is  a RIC  to comply  with those  requirements.   The Portfolio  will
     allocate  at least annually  to each  Holder its distributive  share of the
     Portfolio's net  taxable  (if any)  and tax-exempt  investment income,  net
     realized capital  gains,  and  any  other  items  of  income,  gain,  loss,
     deduction  or credit  in a  manner intended  to  comply with  the Code  and
     applicable Treasury  regulations.   Tax counsel  has advised the  Portfolio
     that the Portfolio's  allocations of taxable  income and  loss should  have
     "economic effect" under applicable Treasury regulations.

              To the  extent the  cash  proceeds of  any withdrawal  (or,  under
     certain  circumstances, such  proceeds  plus the  value  of any  marketable
     securities  distributed  to  an  investor)  ("liquid  proceeds")  exceed  a
     Holder's adjusted basis  of his interest in the  Portfolio, the Holder will
     generally  realize a  gain  for federal  income  tax purposes.  If, upon  a
     complete  withdrawal (redemption  of  the  entire interest),  the  Holder's
     adjusted basis  of  his  interest  exceeds  the  liquid  proceeds  of  such
     withdrawal, the Holder  will generally realize  a loss  for federal  income
     tax purposes.   The tax  consequences of a withdrawal  of property (instead
     of or  in addition to liquid proceeds) will be different and will depend on
     the specific  factual  circumstances.   A  Holder's  adjusted basis  of  an
     interest  in the  Portfolio  will generally  be  the aggregate  prices paid
     therefor (including  the adjusted  basis  of contributed  property and  any
     gain recognized  on such  contribution), increased  by the  amounts of  the
     Holder's distributive share  of items of income (including  interest income
     exempt from federal  income tax) and  realized net  gain of the  Portfolio,
     and  reduced, but  not  below zero,  by  (i) the  amounts  of the  Holder's
     distributive share of items of Portfolio loss,  and (ii) the amount of  any
     cash distributions (including distributions of interest  income exempt from
     federal  income  tax  and  cash  distributions   on  withdrawals  from  the
     Portfolio)  and the basis  to the Holder of  any property  received by such
     Holder  other  than in  liquidation,  and (iii)  the  Holder's distributive
     share   of   the  Portfolio's   nondeductible  expenditures   not  properly
     chargeable to capital account.  Increases or  decreases in a Holder's share
     of the Portfolio's liabilities  may also result in corresponding  increases
     or decreases in  such adjusted basis.  Distributions  of liquid proceeds in
     excess  of a  Holder's  adjusted basis  in  its interest  in the  Portfolio
     immediately prior thereto  generally will result in the recognition of gain

                                        B - 33
<PAGE>






     to the Holder in the amount of such excess.

              The Portfolio  may acquire zero coupon  or other securities issued
     with  original issue  discount.   As the  holder of  those securities,  the
     Portfolio must account for the  original issue discount (even  on municipal
     securities) that  accrues on the  securities during the  taxable year, even
     if it  receives no corresponding payment on the securities during the year.
     Because each  Holder that is  a RIC annually  must distribute substantially
     all of its  investment company taxable  income and  net tax-exempt  income,
     including any original issue discount,  to qualify for treatment as a  RIC,
     any such  Holder may be required in  a particular year to  distribute as an
     "exempt-interest  dividend"  an  amount  that  is  greater  than  its  pro-
     portionate  share  of the  total  amount  of  cash  the Portfolio  actually
     receives.  Those distributions will  be made from the Holder's cash assets,
     if any, or from its proportionate share  of the Portfolio's cash assets  or
     the proceeds  of sales  of the Portfolio's  securities, if necessary.   The
     Portfolio  may realize  capital  gains or  losses  from those  sales, which
     would increase  or decrease  the investment  company taxable  income and/or
     net capital gain (the excess of net long-term capital gain over net  short-
     term  capital loss) of a Holder that is a RIC.  In addition, any such gains
     may be realized on the disposition of  securities held for less than  three
     months.   Because of the  Short-Short Limitation (defined  below), any such
     gains would reduce  the Portfolio's ability  to sell  other securities,  or
     options  or futures  contracts, held  for less  than  three months  that it
     might wish to sell in the ordinary course of its portfolio management.

              Investments  in  lower rated  or  unrated  securities  may present
     special tax  issues for  the  Portfolio and  hence to  an investor  in  the
     Portfolio to the extent actual  or anticipated defaults may be  more likely
     with respect to  such securities.  Tax  rules are not entirely  clear about
     issues such  as when the Portfolio  may cease to accrue  interest, original
     issue discount, or market discount; when and to  what extent deductions may
     be taken  for bad debts  or worthless securities; how  payments received on
     obligations in default  should be allocated between  principal and  income;
     and whether  exchanges  of  debt  obligations  in  a  workout  context  are
     taxable.

              In order  for a  Holder that is  a RIC to  be entitled  to pay the
     tax-exempt   interest   income   the   Portfolio   allocates   to   it   as
     exempt-interest  dividends to  its shareholders,  the  Holder must  satisfy
     certain requirements, including  the requirement that, at the close of each
     quarter of its taxable year, at least 50% of the value  of its total assets
     consists of  obligations the  interest on  which is  excludable from  gross
     income  under  Section  103(a)  of  the Code.    The  Portfolio  intends to
     concentrate its  investments in  such tax-exempt  obligations to  an extent
     that will enable a RIC that invests its investable assets in the  Portfolio
     to satisfy this 50% requirement.  

              Interest on  certain municipal  obligations is  treated  as a  tax
     preference item  for  purposes  of  the federal  alternative  minimum  tax.
     Holders that are required to  file federal income tax returns  are required
     to report tax-exempt  interest allocated to them  by the Portfolio  on such

                                        B - 34
<PAGE>






     returns.

              From time  to time proposals have  been introduced before Congress
     for the  purpose  of restricting  or  eliminating  the federal  income  tax
     exemption for  interest on certain  types of municipal  obligations, and it
     can  be expected that  similar proposals  may be introduced  in the future.
     Under  federal tax  legislation  enacted in  1986,  the federal  income tax
     exemption for interest  on certain municipal obligations was  eliminated or
     restricted.    As  a  result  of  such  legislation,  the  availability  of
     municipal obligations for investment by the Portfolio and  the value of the
     Portfolio may be affected.

              In the  course of  managing  its  investments, the  Portfolio  may
     realize some  short-term and long-term  capital gains (and/or  losses) as a
     result of  market transactions, including sales of portfolio securities and
     rights  to when-issued  securities and  options  and futures  transactions.
     The  Portfolio may  also  realize taxable  income  from certain  short-term
     taxable  obligations,  securities  loans,  a  portion   of  original  issue
     discount with respect to  certain stripped  municipal obligations or  their
     stripped coupons  and  certain  realized  accrued  market  discount.    Any
     allocations of such capital gains or other taxable  income to Holders would
     be taxable to Holders  that are subject  to tax.   However, it is  expected
     that such amounts, if  any, would normally be insubstantial  in relation to
     the tax-exempt interest earned by the Portfolio.
        
              The Portfolio's  transactions  in options  and  futures  contracts
     will  be subject to  special tax rules that  may affect  the amount, timing
     and  character  of  its  items  of  income,  gain  or loss  and  hence  the
     allocations of such  items to investors.   For  example, certain  positions
     held by the  Portfolio on the last  business day of each taxable  year will
     be marked to market  (i.e., treated as if closed out on such  day), and any
     resulting gain or loss  will generally be treated as 60% long-term  and 40%
     short-term capital  gain or loss.  Certain  positions held by the Portfolio
     that substantially  diminish the Portfolio's  risk of loss  with respect to
     other  positions in  its portfolio  may constitute  "straddles," which  are
     subject  to  tax  rules  that  may  cause  deferral  of  Portfolio  losses,
     adjustments in the  holding periods of Portfolio  securities and conversion
     of short-term into long-term capital losses.  
         
              Income from transactions in  options and futures contracts derived
     by the Portfolio  with respect to its  business of investing  in securities
     will qualify as permissible  income for its Holders that are RICs under the
     requirement that at least  90% of  a RIC's gross  income each taxable  year
     consist  of specified  types of  income.   However, income  from the dispo-
     sition by the  Portfolio of  options and  futures contracts  held for  less
     than three  months will be subject  to the requirement  applicable to those
     Holders  that less  than 30%  of a  RIC's  gross income  each taxable  year
     consist of certain short-term gains ("Short-Short Limitation").

              If the  Portfolio satisfies certain requirements,  any increase in
     value of a position that  is part of a "designated hedge" will be offset by
     any  decrease in value (whether realized or  not) of the offsetting hedging

                                        B - 35
<PAGE>






     position  during  the period  of  the  hedge  for  purposes of  determining
     whether  the Holders  that  are RICs  satisfy  the Short-Short  Limitation.
     Thus,  only the  net  gain  (if any)  from  the  designated hedge  will  be
     included in  gross income for purposes  of that limitation.   The Portfolio
     will consider whether it should seek to qualify  for this treatment for its
     hedging transactions.  To  the extent the Portfolio does not so qualify, it
     may be forced to  defer the  closing out of  options and futures  contracts
     beyond the  time when it otherwise would be advantageous to do so, in order
     for Holders that are RICs to continue to qualify as such.

              Interest on indebtedness  incurred or continued by an  investor to
     purchase or carry an investment in the  Portfolio is not deductible to  the
     extent it is  deemed attributable to the investor's investment, through the
     Portfolio,  in   tax-exempt  obligations.     Further,   persons  who   are
     "substantial  users"  (or  persons  related  to   "substantial  users")  of
     facilities financed  by industrial  development or  private activity  bonds
     should  consult  their tax  advisers  before  investing in  the  Portfolio.
     "Substantial  user"  is  defined  in  applicable  Treasury  regulations  to
     include a  "non-exempt person" who  regularly uses in  trade or  business a
     part of a  facility financed from  the proceeds  of industrial  development
     bonds and would  likely be interpreted  to include  private activity  bonds
     issued to finance similar facilities.

              An  entity that is treated  as a partnership under  the Code, such
     as the Portfolio,  is generally treated  as a partnership  under state  and
     local   tax  laws,   but   certain  states   may   have  different   entity
     classification criteria  and may  therefore reach  a different  conclusion.
     Entities that  are classified as  partnerships are not  treated as separate
     taxable entities under most state  and local tax laws, and the  income of a
     partnership is considered  to be income of  partners both in timing  and in
     character.    The exemption  of  interest  income  for  federal income  tax
     purposes does not necessarily result  in exemption under the income or  tax
     laws  of any  state or  local taxing  authority.   The laws of  the various
     states and local taxing  authorities vary with  respect to the taxation  of
     such interest income,  as well as to  the status of a  partnership interest
     under  state and  local tax  laws, and  each holder  of an  interest in the
     Portfolio is advised to consult his own tax adviser.

              The foregoing  discussion does not  address the  special tax rules
     applicable  to certain  classes of investors,  such as tax-exempt entities,
     insurance companies and  financial institutions.  Investors  should consult
     their own tax  advisers with respect to special tax rules that may apply in
     their  particular situations,  as well as  the state, local  or foreign tax
     consequences of investing in the Portfolio.

     Item 21.  Underwriters
              The   placement   agent  for   the   Portfolio   is   Eaton  Vance
     Distributors,  Inc., which  receives no  compensation for  serving in  this
     capacity.  Investment companies,  common  and  commingled trust  funds  and
     similar  organizations  and   entities  may  continuously  invest   in  the
     Portfolio.


                                        B - 36
<PAGE>






     Item 22.  Calculation of Performance Data
              Not applicable.
        
     Item 23.  Financial Statements
              The following  audited financial  statements of the  Portfolio are
     incorporated by reference  into this Part  B and have been  so incorporated
     in  reliance  upon the  report  of  Deloitte  and  Touche LLP,  independent
     certified public accountants, as experts in accounting and auditing.
         
        
              Portfolio of Investments as of March 31, 1996
              Statement of Assets and Liabilities as of March 31, 1996
              Statement of Operations for the fiscal year ended March 31, 1996
              Statement  of Changes  in Net  Assets for  the fiscal  years ended
              March 31, 1996 and 1995 
              Supplementary Data for  the fiscal years ended March 31,  1996 and
              1995, and for the period  from the start of business, May 3, 1993,
              to March 31, 1994
              Notes to Financial Statements
              Independent Auditors' Report
         
        
              For  purposes  of  the EDGAR  filing  of  this  amendment  to  the
     Portfolio's  registration   statement,   the  Portfolio   incorporates   by
     reference  the above  audited  financial  statements, as  previously  filed
     electronically  with   the  Commission  (Accession  Number   0000928816-96-
     000151).
         

























                                        B - 37
<PAGE>






                                       APPENDIX

                          Description of Securities Ratings+

                           Moody's Investors Service, Inc.
     Municipal Bonds
     Aaa: Bonds which are rated Aaa  are judged to be of the best quality.  They
     carry the smallest degree  of investment risk and are generally referred to
     as  "gilt edged."  Interest  payments are  protected by  a  large or  by an
     exceptionally stable  margin and  principal  is secure.  While the  various
     protective  elements  are   likely  to  change,  such  changes  as  can  be
     visualized are  most unlikely to  impair the fundamentally strong  position
     of such issues.

     Aa: Bonds  which are  rated Aa  are judged  to be  of high  quality by  all
     standards. Together with  the Aaa group  they comprise  what are  generally
     known  as high  grade  bonds. They  are  rated lower  than  the best  bonds
     because margins  of protection may not be as  large as in Aaa securities or
     fluctuation of protective  elements may be  of greater  amplitude or  there
     may  be  other elements  present  which  make  the long  term  risk  appear
     somewhat larger than the Aaa securities.

     A: Bonds which  are rated A  possess many  favorable investment  attributes
     and are  to be considered as upper-medium-grade obligations. Factors giving
     security to principal  and interest are considered  adequate, but  elements
     may be present  which suggest a  susceptibility to  impairment sometime  in
     the future.

     Baa: Bonds which are rated  Baa are considered as  medium-grade obligations
     (i.e.,  they are  neither highly  protected nor  poorly secured).  Interest
     payments  and  principal  security  appear adequate  for  the  present  but
     certain protective elements  may be  lacking or  may be  characteristically
     unreliable  over any  great  length of  time.  Such bonds  lack outstanding
     investment characteristics and in fact have  speculative characteristics as
     well.

     Ba:  Bonds which  are rated  Ba are  judged to  have speculative  elements;
     their future cannot  be considered as well-assured. Often the protection of
     interest and principal  payments may be very moderate  and thereby not well
     safeguarded during  other good and  bad times over  the future. Uncertainty
     of position characterizes bonds in this class.

     ---------------
     + The ratings indicated  herein are believed to be the most  recent ratings
        available  at the date  of this Statement of  Additional Information for
        the  securities listed. Ratings are generally given to securities at the
        time  of  issuance. While  the  rating agencies  may  from time  to time
        revise such  ratings, they  undertake no  obligation to  do so,  and the
        ratings indicated do  not necessarily represent  ratings which  would be
        given to these  securities on the  date of  the Portfolio's fiscal  year
        end.


                                        a - 1
<PAGE>






     B:  Bonds which are rated B generally lack characteristics of the desirable
     investment. Assurance of  interest and principal payments or of maintenance
     of other terms of the contract over any long period of time may be small.

     Caa: Bonds which  are rated Caa are of poor standing. Such issues may be in
     default or  there  may  be  present  elements of  danger  with  respect  to
     principal or interest.

     Ca: Bonds  which are rated  Ca represent obligations  which are speculative
     in a  high degree. Such  issues are often in  default or have  other marked
     shortcomings.

     C: Bonds which are rated C are  the lowest rated class of bonds, and issues
     so  rated  can  be regarded  as  having extremely  poor  prospects  of ever
     attaining any real investment standing.

     Absence of Rating: Where no rating has been assigned  or where a rating has
     been suspended  or  withdrawn, it  may  be  for reasons  unrelated  to  the
     quality of the issue.

     Should no rating be assigned, the reason may be one of the following:

              1. An application for rating was not received or accepted.

              2. The issue or issuer belongs to a group of securities or
                  companies that are not rated as a matter of policy.

              3. There is a lack of essential data pertaining to the issue or
                  issuer.

              4. The issue was privately placed, in which case the rating is
                  not published in Moody's publications.

     Suspension or  withdrawal  may  occur if  new  and  material  circumstances
     arise, the effects  of which preclude satisfactory analysis; if there is no
     longer available  reasonable up-to-date  data to  permit a  judgment to  be
     formed; if a bond is called for redemption; or for other reasons.

     Note: Moody's  applies numerical  modifiers, 1,  2, and  3 in  each generic
     rating classification  from  Aa through  B  in  its corporate  bond  rating
     system. The modifier 1 indicates that the security  ranks in the higher end
     of its  generic  rating category;  the  modifier  2 indicates  a  mid-range
     ranking; and the modifier  3 indicates  that the issue  ranks in the  lower
     end of its generic rating category.

     Municipal Short-Term Obligations

     Ratings: Moody's  ratings for  state and  municipal short-term  obligations
     will  be  designated  Moody's  Investment  Grade  or   (MIG).  Such  rating
     recognizes the differences  between short term  credit risk  and long  term
     risk. Factors  effecting  the liquidity  of  the  borrower and  short  term
     cyclical elements are critical in  short term ratings, while  other factors

                                        a - 2
<PAGE>






     of major  importance in bond  risk, long  term secular trends  for example,
     may be less important over the short run.

     A  short term  rating may  also be  assigned on  an issue  having a  demand
     feature,  variable rate  demand  obligation (VRDO).  Such  ratings will  be
     designated as VMIG1, SG or if the  demand feature is not rated, NR. A short
     term  rating on issues with  demand features are  differentiated by the use
     of  the  VMIG1 symbol  to  reflect  such  characteristics  as payment  upon
     periodic demand rather  than fixed maturity  dates and  payment relying  on
     external  liquidity. Additionally, investors  should be  alert to  the fact
     that the source  of payment may be  limited to the external  liquidity with
     no or limited legal recourse to  the issuer in the event the  demand is not
     met.
        
         
        
                                  Standard & Poor's 
         
     Investment Grade

     AAA:  Debt rated AAA  has the highest rating  assigned by  S&P. Capacity to
     pay interest and repay principal is extremely strong.

     AA: Debt  rated AA has  a very strong  capacity to  pay interest and  repay
     principal and differs from the highest rated issues only in small degree.

     A:  Debt rated A has a strong capacity  to pay interest and repay principal
     although it is somewhat more susceptible to the adverse effects of  changes
     in  circumstances  and  economic  conditions  than  debt  in  higher  rated
     categories.

     BBB: Debt  rated BBB  is regarded  as having  an adequate  capacity to  pay
     interest  and  repay  principal.  Whereas  it   normally  exhibit  adequate
     protection   parameters,    adverse   economic   conditions   or   changing
     circumstances  are more  likely  to lead  to  a  weakened capacity  to  pay
     interest  and repay  principal for  debt in  this category  than  in higher
     rated categories.

     Speculative Grade

     Debt  rated BB,  B, CCC,  CC, and  C  is regarded  as having  predominantly
     speculative  characteristics with respect to  capacity to  pay interest and
     repay  principal. BB  indicates the least  degree of speculation  and C the
     highest.  While such  debt  will likely  have  some quality  and protective
     characteristics,  these are  outweighed  by  large uncertainties  or  major
     exposures to adverse conditions.

     BB: Debt  rated BB has less  near-term vulnerability to default  than other
     speculative  issues.  However,  it faces  major  ongoing  uncertainties  or
     exposure  to adverse  business,  financial,  or economic  conditions  which
     could lead to  inadequate capacity to  meet timely  interest and  principal
     payments.  The BB  rating category is  also used  for debt  subordinated to

                                        a - 3
<PAGE>






     senior debt that is assigned an actual or implied BBB- rating.

     B: Debt rated  B has a greater  vulnerability to default but  currently has
     the  capacity to  meet interest payments  and principal repayments. Adverse
     business, financial, or economic conditions will likely impair capacity  or
     willingness to pay  interest and repay principal. The  B rating category is
     also used for  debt subordinated to senior debt  that is assigned an actual
     or implied BB or BB- rating.

     CCC: Debt rated  CCC has a currently identifiable vulnerability to default,
     and  is  dependent   upon  favorable  business,  financial,   and  economic
     conditions to meet timely payment  of interest and repayment  of principal.
     In the event  of adverse business, financial, or economic conditions, it is
     not likely to  have the capacity to  pay interest and repay  principal. The
     CCC rating category is  also used for debt subordinated to senior debt that
     is assigned an actual or implied B or B- rating.

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

     C: The rating  C is typically applied  to debt subordinated to  senior debt
     which is  assigned an actual or implied CCC- debt  rating. The C rating may
     be used to  cover a situation where  a bankruptcy petition has  been filed,
     but debt service payments are continued.

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

     D: Debt rated D  is in payment default. The D  rating category is used when
     interest payments or principal payments are not  made on the date due  even
     if the  applicable grace period has  not expired, unless S&P  believes that
     such payments  will be  made during such  grace period.  The D rating  also
     will be  used upon  the filing  of a  bankruptcy petition  if debt  service
     payments are jeopardized.

     Plus (+) or Minus (-):  The ratings from AA to  CCC may be modified  by the
     addition of  a plus  or minus  sign to  show relative  standing within  the
     major rating categories.

     p: The letter "p" indicates  that the rating is provisional.  A provisional
     rating assumes the successful completion  of the project being  financed by
     the  debt  being  rated  and   indicates  that  payment  of   debt  service
     requirements  is  largely or  entirely  dependent upon  the  successful and
     timely completion  of the project.  This rating, however, while  addressing
     credit quality  subsequent to completion  of the project,  makes no comment
     on the  likelihood  of,  or  the  risk of  default  upon  failure  of  such
     completion. The investor should exercise  his own judgment with  respect to
     such likelihood and risk.

     L: The  letter "L"  indicates  that the  rating pertains  to the  principal
     amount of  those bonds to the extent that the underlying deposit collateral
     is  insured  by  the  Federal  Deposit  Insurance  Corp.  and  interest  is

                                        a - 4
<PAGE>






     adequately collateralized.  In the  case  of certificates  of deposit,  the
     letter "L" indicates that the  deposit, combined with other  deposits being
     held in the  same right  and capacity, will  be honored  for principal  and
     accrued pre-default interest up to  the federal insurance limits  within 30
     days after  closing of the  insured institution or,  in the event that  the
     deposit is assumed by a successor insured institution, upon maturity.

     NR:  NR indicates no rating has been  requested, that there is insufficient
     information  on  which to  base  a rating,  or  that S&P  does  not  rate a
     particular type of obligation as a matter of policy.

     Municipal Notes

     S&P note ratings  reflect the liquidity  concerns and  market access  risks
     unique to notes. Notes due  in 3 years or  less will likely receive a  note
     rating. Notes maturing beyond 3 years will most likely  receive a long-term
     debt  rating.  The  following  criteria   will  be  used  in   making  that
     assessment:

              --  Amortization schedule (the larger the final maturity relative
                    to other maturities the more likely it will be treated as a
                    note).

              --  Sources of payment (the more dependent the issue is on the
                    market for its refinancing, the more likely it will be
                    treated as a note).

     Note rating symbols are as follows:

     SP-1:  Strong  capacity  to  pay  principal   and  interest.  Those  issues
     determined to possess very strong  characteristics will be given  a plus(+)
     designation.

     SP-2: Satisfactory  capacity  to  pay principal  and  interest,  with  some
     vulnerability to  adverse financial and  economic changes over  the term of
     the notes.

     SP-3: Speculative capacity to pay principal and interest.
        
         
                            Fitch Investors Service, Inc.

     Investment Grade Bond Ratings

     AAA: Bonds considered  to be  investment grade  and of  the highest  credit
     quality. The  obligor has an  exceptionally strong ability  to pay interest
     and  repay  principal, which  is  unlikely  to  be  affected by  reasonably
     foreseeable events.

     AA:  Bonds considered  to  be  investment grade  and  of  very high  credit
     quality. The  obligor's ability to pay interest and repay principal is very
     strong, although not  quite as strong as  bonds rated `AAA'.  Because bonds

                                        a - 5
<PAGE>






     rated  in the `AAA' and `AA' categories are not significantly vulnerable to
     foreseeable  future  developments,  short-term debt  of  these  issuers  is
     generally rated `F-1+'.

     A: Bonds considered to be investment grade and  of high credit quality. The
     obligors ability to  pay interest and  repay principal is considered  to be
     strong,  but  may  be  more  vulnerable  to  adverse  changes  in  economic
     conditions and circumstances than bonds with higher ratings.

     BBB: Bonds considered  to be investment  grade and  of satisfactory  credit
     quality.  The obligor's  ability  to pay  interest  and repay  principal is
     considered  to be  adequate.  Adverse changes  in  economic conditions  and
     circumstances, however, are  more likely to  have adverse  impact on  these
     bonds, and  therefore,  impair  timely  payment. The  likelihood  that  the
     ratings of these bonds  will fall below investment grade is higher than for
     bonds with higher ratings.

     High Yield Bond Ratings

     BB:  Bonds  are  considered  speculative.  The  obligor's  ability  to  pay
     interest and repay principal may be affected over  time by adverse economic
     changes. However,  business and  financial alternatives  can be  identified
     that could assist the obligor in satisfying its debt service requirements.

     B: Bonds  are considered highly speculative. While bonds  in this class are
     currently meeting debt  service requirements, the probability  of continued
     timely payment  of principal  and interest  reflects the  obligor's limited
     margin of  safety  and  the  need  for  reasonable  business  and  economic
     activity throughout the life of the issue.

     CCC:  Bonds  have  certain  identifiable  characteristics   which,  if  not
     remedied, may lead to default. The ability to  meet obligations requires an
     advantageous business and economic environment.

     CC: Bonds  are minimally protected.  Default in payment  of interest and/or
     principal seems probable over time.

     C: Bonds are in imminent default in payment of interest or principal.

     DDD,  DD,  and  D:  Bonds  are  in  default  on  interest  and/or principal
     payments. Such bonds are  extremely speculative and should be valued on the
     basis of their  ultimate recovery value in liquidation or reorganization of
     the obligor. `DDD' represents the  highest potential for recovery  on these
     bonds, and `D' represents the lowest potential for recovery.

     Plus  (+) or  Minus (-): The  ratings from AA  to C may  be modified by the
     addition of  a plus or  minus sign to  indicate the relative position  of a
     credit within the rating category.

     NR: Indicates that Fitch does not rate the specific issue.

     Conditional: A conditional rating  is premised on the successful completion

                                        a - 6
<PAGE>






     of a project or the occurrence of a specific event.

     Investment Grade Short-Term Ratings

     Fitch's short-term  ratings apply to  debt obligations that  are payable on
     demand or  have  original  maturities  of  generally  up  to  three  years,
     including commercial  paper,  certificates of  deposit, medium-term  notes,
     and municipal and investment notes.

     F-1+:  Exceptionally Strong Credit Quality. Issues assigned this rating are
     regarded as having the strongest degree of assurance for timely payment.

     F-1: Very Strong  Credit Quality. Issues  assigned this  rating reflect  an
     assurance of timely payment only  slightly less in degree than issues rated
     `F-1+'.

     F-2: Good Credit Quality. Issues  carrying this rating have  a satisfactory
     degree of assurance for timely payment, but the margin of safety is not  as
     great as the `F-1+' and `F-1' categories.

     F-3: Fair Credit Quality. Issues carrying  this rating have characteristics
     suggesting that the  degree of assurance  for timely  payment is  adequate,
     however, near-term adverse  change could cause these securities to be rated
     below investment grade.

     * * * * * * * *

     Notes: Bonds which  are unrated expose  the investor to risks  with respect
     to capacity  to pay interest  or repay principal  which are similar to  the
     risks of lower-rated speculative bonds.  The Portfolio is dependent  on the
     Investment Adviser's  judgment, analysis and  experience in the  evaluation
     of such bonds.

              Investors should note  that the assignment of  a rating to  a bond
     by a rating  service may not reflect  the effect of recent  developments on
     the issuer's ability to make interest and principal payments.

















                                        a - 7
<PAGE>






                                       PART C

     Item 24.  Financial Statements and Exhibits.

     (a)  Financial Statements

              The financial  statements called for by this Item are incorporated
     by reference into Part B and listed in Item 23 hereof.

     (b)  Exhibits
        
     1.     (a)  Declaration of Trust dated May 1, 1992 filed as Exhibit No.
            1(a) to Amendment No. 2 (filed electronically with the Commission
            on July 27, 1995) (Accession No. 0000898432-95-000288) and
            incorporated herein by reference.
         
        
            (b)  Amendment to Declaration of Trust dated February 22, 1993
            filed as Exhibit No. 1(b) to Amendment No. 2 and incorporated
            herein by reference.
         
        
            (c)  Amendment to Declaration of Trust dated December 8, 1995 filed
            herewith.
         
        
     2.     By-Laws of the Registrant adopted May 1, 1992 filed as Exhibit No.
            2 to Amendment No. 2 and incorporated herein by reference.
         
        
     5.     Investment Advisory Agreement between the Registrant and Boston
            Management and Research dated October 13, 1992 filed as Exhibit No.
            5 to Amendment No. 2 and incorporated herein by reference.
         
        
     6.     Placement Agent Agreement with Eaton Vance Distributors, Inc. dated
            May 3, 1993 filed as Exhibit No. 6 to Amendment No. 2 and
            incorporated herein by reference.
         
        
     7.     The Securities and Exchange Commission has granted the Registrant
            an exemptive order that permits the Registrant to enter into
            deferred compensation arrangements with its independent Trustees. 
            See In the Matter of Capital Exchange Fund, Inc., Release No. IC-
            20671 (November 1, 1994).
         
        
     8.     (a)  Custodian Agreement with Investors Bank & Trust Company dated
            May 3, 1993 filed as Exhibit No. 8 to Amendment No. 2 and
            incorporated herein by reference.
         
        

                                        C - 1
<PAGE>






            (b)  Amendment to Custodian Agreement dated October 23, 1995 filed
            herewith.
         
        
     13.    Investment representation letter of Eaton Vance Investment Trust,
            on behalf of Eaton Vance New Jersey Limited Maturity Tax Free Fund,
            dated April 12, 1993 filed as Exhibit No. 13 to Amendment No. 2 and
            incorporated herein by reference.
         
     Item 25.  Persons Controlled by or under Common Control with Registrant.
            Not applicable.

     Item 26.  Number of Holders of Securities.
        
                      (1)                            (2)
                 Title of Class                 Number of
                                                Record Holders
                                           as of July 1, 1996
                   Interests                          4
         
        
     Item 27.  Indemnification.
            Reference is hereby made to Article V of the Registrant's
     Declaration of Trust, filed as Exhibit 1(a) to Amendment No. 2 and
     incorporated herein by reference. 
         
            The Trustees and officers of the Registrant and the personnel of
     the Registrant's investment adviser are insured under an errors and
     omissions liability insurance policy. The Registrant and its officers are
     also insured under the fidelity bond required by Rule 17g-1 under the
     Investment Company Act of 1940.

     Item 28.  Business and Other Connections.
            To the knowledge of the Portfolio, none of the trustees or officers
     of the Portfolio's investment adviser, except as set forth on its Form ADV
     as filed with the Securities and Exchange Commission, is engaged in any
     other business, profession, vocation or employment of a substantial
     nature, except that certain trustees and officers also hold various
     positions with and engage in business for affiliates of the investment
     adviser.

     Item 29.  Principal Underwriters.
            Not applicable.
        
     Item 30.  Location of Accounts and Records.
            All applicable accounts, books and documents required to be
     maintained by the Registrant by Section 31(a) of the Investment Company
     Act of 1940 and the Rules promulgated thereunder are in the possession and
     custody of the Registrant's custodian, Investors Bank & Trust Company, 89
     South Street, Boston, MA  02111, with the exception of certain corporate
     documents and portfolio trading documents which are in the possession and
     custody of the Registrant's investment adviser at 24 Federal Street,

                                        C - 2
<PAGE>






     Boston, MA  02110.  The Registrant is informed that all applicable
     accounts, books and documents required to be maintained by registered
     investment advisers are in the custody and possession of the Registrant's
     investment adviser.
         
     Item 31.  Management Services.
            Not applicable.

     Item 32.  Undertakings.
            Not applicable.











































                                        C - 3
<PAGE>






                                     SIGNATURES
        
            Pursuant to the requirements of the Investment Company Act of 1940,
     the Registrant has duly caused this Amendment No. 3 to the Registration
     Statement on Form N-1A to be signed on its behalf by the undersigned,
     thereunto duly authorized, in the City of Boston and Commonwealth of
     Massachusetts, on this 24th day of July, 1996
         
        
                                                NEW JERSEY LIMITED MATURITY
                                                 MUNICIPALS PORTFOLIO
         
        
                                                By /s/ Thomas J. Fetter
                                                  --------------------------
                                                Thomas J. Fetter
                                                President
         
<PAGE>







                                  INDEX TO EXHIBITS

     Exhibit No.      Description of Exhibit
                                                            
     1.               (c)  Amendment to  Declaration of Trust dated  December 8,
                      1995 filed herewith.
         
        
     8.               (b)   Amendment to Custodian  Agreement dated October  23,
                      1995 filed herewith.
         
      
<PAGE>




                   NEW JERSEY LIMITED MATURITY MUNICIPALS PORTFOLIO
          (formerly called New Jersey Limited Maturity Tax Free Portfolio)


                          AMENDMENT TO DECLARATION OF TRUST

                                   December 8, 1995



              AMENDMENT, made December 8, 1995 to the Declaration of Trust  made
     May 1,  1992,  as  amended  February  22,  1993,  (hereinafter  called  the
     "Declaration") of New  Jersey Limited Maturity  Tax Free  Portfolio, a  New
     York trust  (hereinafter called the  "Trust") by the  undersigned, being at
     least a  majority of  the Trustees of  the Trust  in office on  December 8,
     1995.


              WHEREAS, Section 10.4  of Article X of the Declaration  empowers a
     majority of the Trustees of the Trust to  amend the Declaration without the
     vote or consent of Holders to change the name of the Trust;


              NOW,  THEREFORE, the  undersigned  Trustees, do  hereby  amend the
     Declaration in the following manner:


              1.      The  caption  at the  head  of the  Declaration  is hereby
     amended to read as follows:

                   NEW JERSEY LIMITED MATURITY MUNICIPALS PORTFOLIO


              2.      Section  1.1 of  Article I  of the  Declaration  is hereby
     amended to read as follows:


                                      ARTICLE I


              1.1.  Name.  The  name of  the trust created hereby  (the "Trust")
     shall be  New Jersey Limited  Maturity Municipals Portfolio  and so far  as
     may  be  practicable the  Trustees  shall conduct  the  Trust's activities,
     execute all  documents and sue or be sued  under that name, which name (and
     the  word "Trust" wherever hereinafter used) shall refer to the Trustees as
     Trustees, and  not  individually, and  shall  not  refer to  the  officers,
     employees, agents or  independent contractors of  the Trust  or holders  of
     interests in the Trust.

              IN WITNESS  WHEREOF, the  undersigned Trustees have  executed this
     instrument this 8th day of December, 1995.

     /s/ Donald R. Dwight                       /s/ Norton H. Reamer
     ---------------------------------          --------------------------------
<PAGE>






     Donald R. Dwight                           Norton H. Reamer


     /s/ James B. Hawkes                        /s/ John L. Thorndike
     ---------------------------------          --------------------------------
     James B. Hawkes                            John L. Thorndike


     /s/ Samuel L. Hayes, III                   /s/ Jack L. Treynor
     ---------------------------------          --------------------------------
     Samuel L. Hayes, III                       Jack L. Treynor










































                                         -2-
<PAGE>




                                     AMENDMENT TO
                              MASTER CUSTODIAN AGREEMENT
                                       between 
                             EATON VANCE HUB PORTFOLIOS 
                                         and
                            INVESTORS BANK & TRUST COMPANY

              This Amendment,  dated as  of  October 23,  1995, is  made to  the
     MASTER  CUSTODIAN  AGREEMENT  (the  "Agreement")  between  each  investment
     company advised by  Boston Management and  Research which  has adopted  the
     Agreement  (the  "Trusts")  and  Investors   Bank  &  Trust  Company   (the
     "Custodian") pursuant to Section 10 of the Agreement.

              The  Trusts  and  the Custodian  agree  that  Section  10  of  the
     Agreement shall, as of October 23, 1995, be amended to read as follows:

              Unless otherwise  defined herein, terms  which are  defined in the
     Agreement and used herein are so used as so defined.

     10.      Effective Period, Termination and Amendment; Successor Custodian

              This Agreement shall  become effective as of  its execution, shall
     continue in full force  and effect until  terminated by either party  after
     August 31,  2000 by an instrument  in writing delivered  or mailed, postage
     prepaid to  the other  party, such termination  to take  effect not  sooner
     than sixty (60) days after the date of  such delivery or mailing; provided,
     that  the Trust  may at  any time by  action of  its Board,  (i) substitute
     another  bank or  trust  company  for the  Custodian  by  giving notice  as
     described  above to the Custodian  in the event  the Custodian assigns this
     Agreement to  another party without  consent of the noninterested  Trustees
     of the Trust, or (ii) immediately terminate this Agreement in the event  of
     the  appointment  of a  conservator or  receiver for  the Custodian  by the
     Federal Deposit  Insurance Corporation or  by the  Banking Commissioner  of
     The Commonwealth of Massachusetts or upon the happening of a like event  at
     the direction of  an appropriate regulatory  agency or  court of  competent
     jurisdiction.  Upon termination  of the Agreement, the  Trust shall pay  to
     the Custodian  such compensation  as may  be due  as  of the  date of  such
     termination (and  shall likewise  reimburse the  Custodian  for its  costs,
     expenses and disbursements).

              This  Agreement  may  be  amended  at  any  time  by  the  written
     agreement  of the  parties hereto.   If  a majority  of the  non-interested
     trustees  of  any of  the Trusts  determines  that the  performance  of the
     Custodian has  been unsatisfactory  or adverse  to the  interests of  Trust
     holders of any  Trust or Trusts or that  the terms of the Agreement  are no
     longer  consistent with  publicly available  industry  standards, then  the
     Trust or  Trusts  shall  give  written notice  to  the  Custodian  of  such
     determination and  the Custodian  shall have  60 days to  (1) correct  such
     performance  to  the satisfaction  of  the non-interested  trustees  or (2)
     renegotiate terms which are satisfactory to the non-interested trustees  of
     the Trusts.  If  the conditions of the preceding sentence are  not met then
     the  Trust  or Trusts  may  terminate this  Agreement  on  sixty (60)  days
     written notice.
<PAGE>






              The Board of the Trust shall, forthwith, upon giving or  receiving
     notice of termination  of this Agreement, appoint as successor custodian, a
     bank or trust  company having the qualifications required by the Investment
     Company  Act of 1940  and the  Rules thereunder.   The Bank,  as Custodian,
     Agent or  otherwise, shall, upon  termination of the  Agreement, deliver to
     such successor custodian,  all securities then held hereunder and all funds
     or  other  properties of  the  Trust deposited  with  or held  by  the Bank
     hereunder and all  books of account and  records kept by the  Bank pursuant
     to this  Agreement, and all  documents held by  the Bank relative  thereto.
     In the event that no written order designating  a successor custodian shall
     have  been  delivered  to  the  Bank  on  or  before  the  date  when  such
     termination shall become  effective, then the  Bank shall  not deliver  the
     securities, funds and other properties of the Trust to the Trust but  shall
     have the  right to  deliver to a  bank or trust  company doing  business in
     Boston, Massachusetts  of  its own  selection  meeting the  above  required
     qualifications, all funds, securities and  properties of the Trust  held by
     or deposited with  the Bank, and all  books of account and records  kept by
     the  Bank pursuant to  this Agreement, and all  documents held  by the Bank
     relative thereto.   Thereafter  such bank  or trust  company  shall be  the
     successor of the Custodian under this Agreement.

              Except as  expressly provided  herein, the Agreement  shall remain
     unchanged and in full force and effect.

              IN WITNESS  WHEREOF, the parties hereto have caused this Amendment
     to be executed by  their duly authorized officers,  as of the day  and year
     first above written.


              Alabama Tax Free Portfolio
              Arizona Tax Free Portfolio
              Arkansas Tax Free Portfolio
              Cash Management Portfolio
              Colorado Tax Free Portfolio
              Connecticut Tax Free Portfolio
              Florida Insured Tax Free Portfolio
              Florida Tax Free Portfolio
              Georgia Tax Free Portfolio
              Government Obligations Portfolio
              Growth Portfolio
              Hawaii Tax Free Portfolio
              High Yield Municipals Portfolio
              Investors Portfolio
              Kansas Tax Free Portfolio
              Kentucky Tax Free Portfolio
              Louisiana Tax Free Portfolio
              Maryland Tax Free Portfolio
              Massachusetts Tax Free Portfolio
              Michigan Tax Free Portfolio
              Minnesota Tax Free Portfolio
              Mississippi Tax Free Portfolio
              Missouri Tax Free Portfolio

                                          2
<PAGE>






              National Municipals Portfolio
              New Jersey Tax Free Portfolio
              New York Tax Free Portfolio
              North Carolina Tax Free Portfolio
              Ohio Tax Free Portfolio
              Oregon Tax Free Portfolio
              Pennsylvania Tax Free Portfolio
              Rhode Island Tax Free Portfolio
              South Carolina Tax Free Portfolio
              Special Investment Portfolio
              Stock Portfolio
              Strategic Income Portfolio
              Tax Free Reserves Portfolio
              Tennessee Tax Free Portfolio
              Texas Tax Free Portfolio
              Total Return Portfolio
              Virginia Tax Free Portfolio
              West Virginia Tax Free Portfolio
              Arizona Limited Maturity Tax Free Portfolio
              California Tax Free Portfolio
              California Limited Maturity Tax Free Portfolio
              Connecticut Limited Maturity Tax Free Portfolio
              Florida Limited Maturity Tax Free Portfolio
              Massachusetts Limited Maturity Tax Free Portfolio
              Michigan Limited Maturity Tax Free Portfolio
              National Limited Maturity Tax Free Portfolio
              New Jersey Limited Maturity Tax Free Portfolio
              New York Limited Maturity Tax Free Portfolio
              North Carolina Limited Maturity Tax Free Portfolio
              Ohio Limited Maturity Tax Free Portfolio
              Pennsylvania Limited Maturity Tax Free Portfolio
              Virginia Limited Maturity Tax Free Portfolio


                                                By:   /s/James L. O'Connor
                                                      ----------------------
                                                        Treasurer


                                                INVESTORS BANK & TRUST COMPANY


                                                By:   /s/Michael F. Rogers
                                                      -----------------------









                                          3
<PAGE>

<TABLE> <S> <C>





     <ARTICLE>       6 
     <CIK> 0000892338  
     <NAME> NEW JERSEY LIMITED MATURITY MUNICIPALS PORTFOLIO     
     <MULTIPLIER> 1000 
              
     <S>                             <C> 
     <PERIOD-TYPE>                    12-MOS      
     <FISCAL-YEAR-END>                          MAR-31-1996
     <PERIOD-END>                               MAR-31-1996   
     <INVESTMENTS-AT-COST>                 77,501 
     <INVESTMENTS-AT-VALUE>                78,992 
     <RECEIVABLES>                          1,833 
     <ASSETS-OTHER>                             0 
     <OTHER-ITEMS-ASSETS>                   1,358 
     <TOTAL-ASSETS>                        82,183 
     <PAYABLE-FOR-SECURITIES>                   0 
     <SENIOR-LONG-TERM-DEBT>                    0 
     <OTHER-ITEMS-LIABILITIES>              2,010 
     <TOTAL-LIABILITIES>                    2,010 
     <SENIOR-EQUITY>                            0 
     <PAID-IN-CAPITAL-COMMON>              78,695 
     <SHARES-COMMON-STOCK>                      0 
     <SHARES-COMMON-PRIOR>                      0 
     <ACCUMULATED-NII-CURRENT>                  0 
     <OVERDISTRIBUTION-NII>                     0 
     <ACCUMULATED-NET-GAINS>                    0 
     <OVERDISTRIBUTION-GAINS>                   0 
     <ACCUM-APPREC-OR-DEPREC>               1,477 
     <NET-ASSETS>                          80,172 
     <DIVIDEND-INCOME>                          0 
     <INTEREST-INCOME>                      4,772 
     <OTHER-INCOME>                             0 
     <EXPENSES-NET>                           491 
     <NET-INVESTMENT-INCOME>                4,281 
     <REALIZED-GAINS-CURRENT>                  83 
     <APPREC-INCREASE-CURRENT>                876 
     <NET-CHANGE-FROM-OPS>                  5,240 
     <EQUALIZATION>                             0 
     <DISTRIBUTIONS-OF-INCOME>                  0 
     <DISTRIBUTIONS-OF-GAINS>                   0 
     <DISTRIBUTIONS-OTHER>                      0 
     <NUMBER-OF-SHARES-SOLD>                    0 
     <NUMBER-OF-SHARES-REDEEMED>                0 
     <SHARES-REINVESTED>                        0 
     <NET-CHANGE-IN-ASSETS>               (17,107) 
     <ACCUMULATED-NII-PRIOR>                    0 
     <ACCUMULATED-GAINS-PRIOR>                  0 
     <OVERDISTRIB-NII-PRIOR>                    0 
     <OVERDIST-NET-GAINS-PRIOR>                 0 
     <GROSS-ADVISORY-FEES>                    412 
     <INTEREST-EXPENSE>                         0 
     <GROSS-EXPENSE>                          514 
     <AVERAGE-NET-ASSETS>                  89,662 
     <PER-SHARE-NAV-BEGIN>                  0.000 
     <PER-SHARE-NII>                        0.000 
     <PER-SHARE-GAIN-APPREC>                0.000 
<PAGE>






     <PER-SHARE-DIVIDEND>                   0.000 
     <PER-SHARE-DISTRIBUTIONS>              0.000 
     <RETURNS-OF-CAPITAL>                   0.000 
     <PER-SHARE-NAV-END>                    0.000 
     <EXPENSE-RATIO>                         0.57 
     <AVG-DEBT-OUTSTANDING>                     0 
     <AVG-DEBT-PER-SHARE>                       0 
              
<PAGE>

</TABLE>


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