<PAGE> 1
EV Classic Greater China Growth Fund
Semi-Annual Shareholder Report
February 28, 1995
To Shareholders
EV Classic Greater China Growth Fund had a total return of -14.5
percent for the six months ended February 28, 1995. That performance
was the result of a decline in net asset value per share from $9.03 on
August 31, 1994, to $7.70 on February 28, 1995 and the reinvestment of
$0.02 in dividends, and does not include contingent deferred sales
charges paid by certain redeeming shareholders. By comparison, the
Peregrine Asia 100 - an unmanaged index of common stocks in the Greater
China region - fell 12.9 percent during the same period.
WHILE THE MARKETS WERE VOLATILE, THE CHINA ECONOMY GATHERED STEAM...
Despite some market volatility during the period due to rising interest
rates and jitters abroad, the Greater Chinese economy continued to
build momentum. Mainland China's economy performed strongly, with the
value of industrial production rising 11 percent in February from the
same period a year ago, according to the Ministry of Finance. Exports
were especially strong, rising 88 percent to $9.2 billion in February.
Retail sales were also robust, rising 34 percent in February.
While the economy gathered steam, progress was made on the inflation
fight. After peaking at an annualized rate of 27 percent in October,
inflation declined 1.4 percentage points in January, the third
consecutive month in which inflation showed a decline. The figures
suggest that the government's efforts to ease inflationary pressures
may finally be finding their mark.
U.S.-CHINA TRADE DISPUTE LEADS TO HARSH WORDS, THEN TO AN AMICABLE
RESOLUTION...
In February, the U.S. and China reached an agreement on intellectual
copyrights that averted a costly trade war and possible trade
sanctions. The pact should prove beneficial to both nations, leading to
increased market access and improved judicial procedures for handling
such disputes in the future.
A look at trade figures of recent years is illustrative. In 1989, China
exported around $12 billion in goods to the U.S. But as China has
expanded its economic reform movement during the 1990s, China's export
business has exploded. In 1994, China exported $39 billion in goods to
the U.S. That represents a remarkable growth record. More importantly,
it shows the degree to which political cooperation can help boost
economic development. Naturally, past performance is no guarantee of
future results. But, as the economic and political ties increase
between China and the older industrialized nations, we expect that
China will provide many more investment opportunities. Greater China
Growth Portfolio will continue seeking those opportunities.
Sincerely,
/s/ James B. Hawkes [PHOTO OF JAMES B. HAWKES]
James B. Hawkes,
President
April 20, 1995
<PAGE> 2
Management Discussion: Robert Lloyd George
An interview with the Hon. Robert Lloyd George, President of Lloyd
George Management, and Investment Adviser to the Greater China Growth
Portfolio.
Q: ROBERT, HOW HAVE THE CHINA REGION'S MARKETS FARED DURING THE PAST
SIX-MONTHS?
[PHOTO OF HON. ROBERT LLOYD GEORGE]
HON. ROBERT
LLOYD GEORGE
A: The China region markets, especially Hong Kong, were buffeted by an
unusual confluence of events during the six-month period. And because
Hong Kong remains the largest country weighting in the Portfolio, the
Fund's performance reflected the difficult market environment. First,
interest rates in the U.S., which have a strong influence on Hong Kong
rates and equities, continued their upward bias. Second, the threat of
a trade war between the U.S. and China -- while ultimately resolved --
caused some anxious moments for investors. Next, with speculation that
Deng Xiaoping, China's aging leader and the originator of the reform
movement, was gravely ill, there was uncertainty for investors
concerned about future political developments. Finally, unsettling
events in Mexico and other emerging markets had a temporarily
disturbing impact on emerging markets around the world. So, in sum,
this six-month period provided many challenges for investors.
Actually, considering the number of obstacles faced by the market,
the decline was relatively modest. Interestingly, the market has
recovered significantly between the end of the 1994 and February 28.
Q: WHERE HAVE YOU BEEN INVESTING?
A: The Portfolio has maintained its largest holdings in Hong Kong, with
Thailand the second largest country weighting, followed by Singapore,
Malaysia, and the Republic of Korea. Manufacturing remains the largest
industry sector. Manufacturers in the region continue to benefit from
cheap labor costs and strong demand from industrialized countries as
well as a growing demand from the nations of the China region.
Banking and financial services stocks comprise the second largest
industry weighting. With the growth of industry, infrastructure, and
transportation, there is an increasing demand for the financing and
specialized banking services provided by leading banks of the region,
such as Hong Kong & Shanghai Banking Corp. The third largest industry
weighting is diversified trading companies, like Jardine Matheson of
Hong Kong. These companies play a large role in the export of goods,
utilizing their ability to facilitate trade through wide distribution
and transportation networks.
2
<PAGE> 3
ENJOYING GROWTH RATES EQUALLED BY FEW OTHER COUNTRIES, SINGAPORE IS
EXPANDING ITS ROLE AS A LEADER IN THE DYMANIC GREATER CHINA ECONOMY!
[MAP OF THE WORLD WITH LINES CONNECTED TO SINGAPORE MAP]
SINGAPORE: A PROFILE
GDP GROWTH: 10.0%
INFLATION RATE: 3.6% [THIS ILLUSTRATION SHOWS A MAP
UNEMPLOYMENT: 2.8% OF SINGAPORE WITH AN INSET OF
TRADE SURPLUS: $2.4B ECONOMIC DATA FROM 1994.]
FOREIGN RESERVES: $60B
ANNUAL CAPITAL
INVESTMENT GROWTH: 20%
Source: Financial Times
Q. SINGAPORE IS THE THIRD LARGEST COUNTRY HOLDING. WHAT MAKES SINGAPORE
ATTRACTIVE AS AN INVESTMENT?
A. Over the past twenty-five years, Singapore has compiled a record of
economic growth matched by few other countries in the world. Between
1966 and 1990, the Singapore economy grew at an average annual growth
rate of 8.5 percent, three times as fast as the U.S. Reports on global
competitiveness by the Organization for Economic Cooperation and
Development last year ranked Singapore as one of the top four world
economies in terms of productivity, together with Japan, Hong Kong,
and the U.S. In 1994, according to the Ministry of Trade and Industry,
the Singapore economy grew by 10 percent, with exports jumping 24
percent. Government forecasts estimate that the economy will register
double-digit growth again in 1995. Singapore enjoys political
stability, a highly skilled workforce, and foreign reserves of more
than $60 billion. Because the government increasingly emphasizes
education, the country has been able to sharply increase productivity
in an competitive regional and global marketplace.
Prosperity has been achieved primarily through the manufacture of
high technology products and the purveying of high skill services.
For example, Singapore now ranks as the world's
3
<PAGE> 4
largest producer of computer disk drives. Singapore is fast becoming a
major area for the manufacture of petrochemicals and pharmaceuticals.
And, Singapore now rivals Japan and Hong Kong in Asia for its
expertise in financial services.
[THIS CHART SHOWS IN PIE CHART FORM THE HOLDINGS OF THE CHINA PORTFOLIO BROKEN
DOWN ACCORDING TO NATIONALITY.] Source: Eaton Vance
GREATER CHINA GROWTH PORTFOLIO:
ASSET ALLOCATION
Based on market value as of February 28, 1995
Other 1.9
China 2.6
Indonesia 2.9
Taiwan 5.1
Phillippines 6.8
South Korea 8.2
Malaysia 10.4
Singapore 10.7
Thailand 11.6
Hong Kong 39.8
Q. WHAT COMPANIES ARE YOU BUYING IN SINGAPORE?
A. Most of the Singapore stocks within the Portfolio are blue chip
companies that should prosper from the government's central economic
strategies. For example, Singapore Airlines should benefit from the
increasing business travel between Singapore and other Greater China
capitals. In the commercial real estate sector, Straits Steamship
Land has enjoyed strong earnings momentum with the soaring demand for
office space in Singapore, which has become a popular location for
companies seeking a headquarters in the China region. Elsewhere,
Clipsal Industries manufactures electrical equipment and lighting
systems for export throughout the China region. Its business has
surged with the rise in commercial real estate development.
Q. HOW HAVE THE MAINLAND CHINESE MARKETS FARED DURING THIS PERIOD?
A. The China markets in Shanghai and Shenzhen also retreated during
1994, bringing price-earnings multiples to record low levels, around
7-to-10 times earnings. When compared to historical market patterns,
the mainland Chinese markets are significantly undervalued. The
Portfolio had 2.6 percent of its investments in mainland China at
February 28. One holding, Shanghai Tyre & Rubber, has recently sold
at very low valuations, having suffered from sharply rising rubber
prices, which hurt the company's earnings. However, if the company
can contain its costs, it could be well-positioned. As China's
largest maker of radial tires, Tyre & Rubber should benefit from
China's plans to develop automobiles for widescale consumer
purchases.
Another mainland holding, Shanghai Post and Telecom is a leading
manufacturer of telephone switches. While the company will be
hard-pressed to compete head-to-head with the global telecom giants,
its ability to manufacture parts locally makes it a likely
beneficiary of the
4
<PAGE> 5
THIS CHART SHOWS THE GROWTH OF EXPORTS IN BAR CHART FORM FROM CHINA TO THE U.S.
FROM 1989 THROUGH 1994. A BACKGROUND OF MAPS OF INDIA AND THE U.S.
Source: China Ministry of Trade
HEADLINE: "CHINA'S EXPORTS TO THE U.S. CONTINUE TO SURGE!"
1989 12 B
1990 15.2B
1991 19 B
1992 25.7B
1993 31.5B
1994 38.8B
government's plan to make major improvements additions to existing
phone facilities.
Q. YOU INDICATED THAT BANKING WAS A LARGE INDUSTRY SEGMENT WITHIN THE
PORTFOLIO. CAN YOU GIVE EXAMPLES OF THE BANKS IN WHICH YOU HAVE
INVESTMENTS?
A. Yes. Hong Kong and Shanghai Banking Corp. is Hong Kong's leading
bank, with assets totaling $270 billion. With one-third of its assets
employed in Hong Kong and the Pacific region, HSBC is also the most
active foreign bank in mainland China. Its profits jumped a
larger-than-expected 14 percent in 1994. In addition to its strong
Asian presence, the bank has major business in Europe and the U.S.,
proving that it is truly a global banking power.
Elsewhere in the region, Siam Commercial Bank is one of Thailand's
largest commercial banks in terms of assets. The company plans to
expand its operations in mainland China, including opening branches
in Shanghai and Canton. And in Singapore, Development Bank of
Singapore is contributing to the financing of industrial and real
estate development within that city-state.
Q. IN PAST REPORTS, YOU'VE DISCUSSED VARIOUS INFRASTRUCTURE INVESTMENTS
WITHIN THE PORTFOLIO. COULD YOU EXPAND ON THAT THEME?
A. Yes. The building of an adequate infrastructure is absolutely
fundamental to China's growth prospects. That is true of
transportation and
5
<PAGE> 6
[THIS CHART IS AGAINST THE BACKDROP OF AN ELECTRIC POWER GRID AND SHOWS THE
UPCOMING POWER NEEDS OF CHINA AND THE ESTIMATED INVESTMENT NEEDED TO FUND THAT
INFRASTRUCTURE.]
TO MEET RISING POWER DEMANDS,
CHINA'S ELECTRIC GENERATION INDUSTRY
IS EXPANDING RAPIDLY!
1995 capacity 183,000 megawatts
2000 capacity 300,000 megawatts
Est investment $67 billion
Source: Financial Times
telecommunications - two themes I've discussed in the past - and
especially true of electric power generation. Earlier this year, the
Beijing government sanctioned the first of fifty new power station
projects, and - important for investors,- has streamlined the approval
process needed to bring projects on line.
Clearly, additional power stations are needed to satisfy the
explosive economic growth of the industrial sector, which is
responsible for 73 percent of power sales. However, consumer and
residential sales are rising sharply as well, reflecting a surge in
the use of household electrical appliances. Improving standards of
living and rising consumer confidence have boosted the sales of air
conditioners, washing machines, televisions, microwave ovens, and
refrigerators. For example, according to the China Household
Electrical Appliance Association, China produced 8.2 million washing
machines in the first 9 months of 1994, a 27 percent increase over the
same period in 1993. In 1995, output is expected to reach 10 million.
Naturally, the task of providing electric power sufficient to fuel
China's economic engine is a daunting one. According to the China
Ministry of Electric Power, China currently suffers from a nationwide
20 percent power shortage, with the problem especially severe in the
southern coastal economic zones. To combat those shortages, China
plans to add 117,000 megawatts of generating capacity by the year
2000, at an estimated cost of $67 billion.
To encourage investment, the Ministry of Power has indicated it will
allow returns on investment in the 15-to-22 percent range,
significantly higher than those for similar projects in the U.S. and
elsewhere. That bodes well for investors and for companies
participating in these projects, including engineering companies and
makers of power generating equipment, like Consolidated Electric
Power of Asia, a Hong Kong-based holding of the Portfolio.
6
<PAGE> 7
RECENT U.S. INVESTMENTS* IN CHINA:
- OWENS-CORNING CORP. - the Toledo, Ohio-based leader in glass fiber
technology announced in February that its would invest $150 million to
build two plants to produce fiberglass insulation materials for China's
infrastructure and construction industries.
- MCDONNELL DOUGLAS - the U.S. aerospace company, signed a contract
with China in November to deliver 34 new MD-90 aircraft. Half of the
aircraft will be manufactured in China with U.S.-supplied parts. The
deal is valued at $1.6 billion.
- MORGAN STANLEY - agreed in October to set up China's first
international investment bank. China International Capital Corporation
will begin with $100 million in capital, and be used as a model to
introduce modern investment banking techniques to China.
* These U.S. companies are not investments of the Portfolio.
Q. ONE MAJOR DEVELOPMENT OF THE PAST SIX MONTHS WAS THE CONTINUING
STRENGTH OF THE JAPANESE YEN. HOW HAS THAT AFFECTED THE PROSPECTS OF
CHINA REGION COMPANIES?
A. The strength of the yen, which reached post-war highs during the
period, has been a positive development for certain Greater China
exporters. A stronger yen hurts Japanese exporters by reducing the
value of dollar-based revenues. To make up the difference they must
often raise prices, which may make them less competitive in the China
region. Some Japanese manufacturers have managed to remain
competitive by cutting expenses to the bone, or by shifting production
facilities abroad. However, the relentless strength of the yen has
nearly eliminated the value of the cost-cutting. That has given the
edge to foreign competitors. For example, Korean manufacturers like
Pohang Iron & Steel, a Portfolio holding, have advanced competitively
and gained a better foothold in China and elsewhere.
Q. ROBERT, WHAT IS YOUR CURRENT OUTLOOK FOR THE GREATER CHINA MARKETS?
A. With many of the trade frictions resolved and interest rates in the
U.S. likely to level, the outlook for the Hong Kong market is
favorable. Nonetheless, I believe that occasional volatility is
something investors can continue to expect from time to time. There
is, of course, continuing uncertainty about the succession process
after Deng. And inflation, while improving, is a continuing hurdle to
be overcome. But even within those broad risk parameters, the economy
of Greater China continues to post unparalleled growth. As I
mentioned before, Chinese consumers are pioneering new ground with
their purchases of washing machines, microwave ovens, and
automobiles. While past performance does not guarantee future
results, this is an exciting new frontier for the Chinese people and
continues to represent a major opportunity for long-term investors.
7
<PAGE> 8
<TABLE>
EV CLASSIC GREATER CHINA GROWTH FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1995
(Unaudited)
<S> <C> <C>
ASSETS:
Investment in Greater China Growth Portfolio, at value (Note 1A)
(identified cost, $24,541,281) $21,727,614
Receivable for Fund shares sold 11,632
Deferred organization expenses (Note 1D) 38,430
-----------
Total assets $21,777,676
LIABILITIES:
Payable for Fund shares redeemed $ 143,350
Payable to affiliates -
Trustees' fees 40
Custodian fee 86
Accrued expenses 27,885
-----------
Total liabilities 171,361
-----------
NET ASSETS for 2,807,636 shares of beneficial
interest outstanding $21,606,315
===========
SOURCES OF NET ASSETS:
Paid-in capital $26,199,645
Accumulated distributions in excess of net investment
income (207,151)
Net realized loss on investment and foreign currency
transactions from the Portfolio (1,572,512)
Unrealized depreciation of investments and foreign currency
transactions from Portfolio (computed on the basis of identified cost) (2,813,667)
-----------
Total $21,606,315
===========
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE
($21,606,315 - 2,807,636 shares of beneficial interest) $ 7.70
===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE> 9
<TABLE>
STATEMENT OF OPERATIONS
For the six months ended February 28, 1995
(Unaudited)
<S> <C> <C>
INVESTMENT INCOME (Note 1B):
Investment income allocated from Portfolio
(net of foreign taxes of $18,409) $ 233,166
Expenses allocated from Portfolio (134,746)
------------
Net investment income from Portfolio $ 98,420
Expenses -
Management fee (Note 3) $ 29,664
Compensation of Trustees not members of the Administrator's
organization 79
Custodian fee (Note 3) 5,884
Distribution fees (Note 6) 118,657
Transfer and dividend disbursing agent fees 15,695
Printing and postage 46,159
Legal and accounting services 7,325
Registration costs 6,454
Amortization of organization expenses (Note 1D) 4,959
Miscellaneous 12,761
------------
Total expenses 247,637
------------
Net investment loss $ (149,217)
Realized and Unrealized Loss from Portfolio:
Net realized loss -
Investments (net of foreign capital gains taxes of
$22,151) $ (229,448)
Foreign currency (10,918)
------------
Net realized loss (240,366)
Unrealized depreciation of investments and foreign
currency (3,376,165)
------------
Net realized and unrealized loss (3,616,531)
------------
Net decrease in net assets from operations $ (3,765,748)
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE> 10
FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
FOR THE PERIOD FROM
FOR THE SIX MONTHS DECEMBER 28, 1993
ENDED FEBRUARY 28, 1995 (START OF BUSINESS) TO
(UNAUDITED) AUGUST 31, 1994
----------------------- ----------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment loss $ (149,217) $ (97,564)
Net realized loss from Portfolio (240,366) (1,332,146)
Unrealized appreciation (depreciation) from
Portfolio (3,376,165) 562,498
-------------- ------------
Net decrease in net assets from operations $ (3,765,748) $ (867,212)
-------------- ------------
Distributions to shareholders in excess of net
investment income (Note 2) $ (59,285) $ -
-------------- ------------
Transactions in shares of beneficial interest (Note 4)
Proceeds from sale of shares $ 9,501,551 $ 35,927,111
Net asset value of shares issued to shareholders in
payment of distributions declared 54,632 -
Cost of shares redeemed (10,554,420) (8,630,314)
-------------- ------------
Increase (decrease) in net assets from Fund share
transactions $ (998,237) $ 27,296,797
-------------- ------------
Net increase (decrease) in net assets $ (4,823,270) $ 26,429,585
NET ASSETS:
At beginning of period 26,429,585 -
-------------- ------------
At end of period $ 21,606,315 $ 26,429,585
============== ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE> 11
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
FOR THE PERIOD FROM
FOR THE SIX MONTHS DECEMBER 28, 1993
ENDED FEBRUARY 28, 1995 (START OF BUSINESS) TO
(UNAUDITED) AUGUST 31, 1994
----------------------- ----------------------
<S> <C> <C>
NET ASSET VALUE, beginning of period $ 9.030 $ 10.000
---------- -----------
Income (Loss) from Investment Operations:
Net investment loss $ (0.038) $ (0.033)
Net realized and unrealized loss on investments and
foreign currency transactions (1.272) (0.937)
---------- -----------
Total loss from investment operations $ (1.310) $ (0.970)
---------- -----------
Less distributions:
In excess of net investment income $ (0.020) $ -
---------- -----------
Net Asset Value, end of period $ 7.700 $ 9.030
========== ===========
Total Return** (14.50)% (9.70)%
Ratios/Supplemental Data:
Net assets, end of period (000 omitted) $ 21,606 $ 26,430
Ratio of net expenses to average daily net
assets (1) 3.23%* 2.75%*
Ratio of net investment loss to average daily net
assets (1.26)%* (0.74)%*
<FN>
(1) Includes the Fund's share of Greater China Growth Portfolio's allocated expenses.
* Annualized
** Total return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset
value on the last day of each period reported. Dividends and distributions, if any, are assumed to be reinvested at
the net asset value on the record date.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(1) SIGNIFICANT ACCOUNTING POLICIES
EV Classic Greater China Growth Fund (the Fund) is a diversified series
of Eaton Vance Growth Trust (the Trust). The Trust is an entity of the
type commonly known as a Massachusetts business trust and is registered
under the Investment Company Act of 1940, as amended, as an open-end
management investment company. The Fund invests all of its investable
assets in interests in Greater China Growth Portfolio (the Portfolio),
a New York Trust, having the same investment objective as the Fund. The
value of the Fund's investment in the Portfolio reflects the Fund's
proportionate interest in the net assets of the Portfolio (3.6% at
February 28, 1995). The performance of the Fund is directly affected by
the performance of the Portfolio. The financial statements of the
Portfolio, including the portfolio of investments, are included
elsewhere in this report and should be read in conjunction with the
Fund's financial statements. The following is a summary of significant
accounting policies consistently followed by the Fund in the
preparation of its financial statements. The policies are in conformity
with generally accepted accounting principles.
A. INVESTMENT VALUATIONS - Valuation of securities by the Portfolio is
discussed in Note 1 of the Portfolio's Notes to Financial Statements
which are included elsewhere in this report.
B. INCOME - The Fund's net investment income consists of the Fund's pro
rata share of the net investment income of the Portfolio, less all
actual and accrued expenses of the Fund determined in accordance with
generally accepted accounting principles.
C. FEDERAL TAXES - The Fund's policy is to comply with the provisions
of the Internal Revenue Code applicable to regulated investment
companies and to distribute to shareholders each year all of its net
investment income, and any net realized capital gains. Accordingly, no
provision for federal income or excise tax is necessary. At August 31,
1994, the Fund, for federal income tax purposes, had a capital loss
carryover of $834,707 which will reduce the taxable income arising from
future net realized gain on investments, if any, to the extent
permitted by the Internal Revenue Code and thus will reduce the amount
of distributions to shareholders which would otherwise be necessary to
relieve the Fund of any liability for federal income or excise tax.
Such capital loss carryover will expire on August 31, 2002.
D. DEFERRED ORGANIZATION EXPENSES - Costs incurred by the Fund in
connection with its organization, including registration costs, are
being amortized on the straight-line basis over five years.
E. DISTRIBUTION COSTS - For book purposes, commissions paid on the sale
of Fund shares and other distribution costs are charged to operations.
For tax purposes, commissions paid were charged to paid-in capital
prior to November 23, 1994 and subsequently charged to operations. The
change in the tax accounting practice was prompted by a recent Internal
Revenue Service ruling and has no effect on either the Fund's current
yield or total return (Note 6).
F. INTERIM FINANCIAL INFORMATION - The interim financial statements
relating to February 28, 1995 and for the period then ended have not
been audited by independent certified public accountants, but in the
opinion of the Portfolio's management, reflect all adjustments,
necessary for the fair presentation of the financial statements.
--------------------------------------------------------------------
(2) DISTRIBUTIONS TO SHAREHOLDERS
It is the present policy of the Fund to make at least one distribution
annually (normally in December) of all or substantially all of the
investment income allocated to the Fund by the Portfolio, less the
Fund's direct and allocated expenses (other than sales commissions
incurred on the sale of Fund shares, which commissions are charged to
the Fund's paid-in capital for tax purposes) and at least one
distribution annually of all or substantially all of the net realized
capital gains (reduced by any available capital loss carryforwards from
prior years) allocated by the Portfolio to the Fund, if any.
12
<PAGE> 13
Shareholders may reinvest all distributions in shares of the Fund
without a sales charge at the per share net asset value as of the close
of business on the record date. The Fund distinguishes between
distributions on a tax basis and a financial reporting basis. Generally
accepted accounting principles require that only distributions in
excess of tax basis earnings and profits be reported in the financial
statements as a return of capital. Differences in the recognition or
classification of income between the financial statements and tax
earnings and profits which result in temporary over distributions for
financial statement purposes are classified as distributions in excess
of net investment income or accumulated net realized gains. Permanent
differences between book and tax accounting relating to distributions
are reclassified to paid-in capital. During the six months ended
February 28, 1995, $44,747 was reclassified from undistributed net
investment income to paid-in capital, due to permanent differences
between book and tax accounting for distribution costs being considered
as permanent differences. Net investment income, net realized gains and
net assets were not affected by this reclassification.
--------------------------------------------------------------------
(3) MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The management fee is earned by Eaton Vance Management (EVM) as
compensation for management and administration of the business affairs
of the Fund. The fee is based on a percentage of average daily net
assets. For the six months ended February 28, 1995 the fee was
equivalent to 0.25% of the Fund's average daily net assets for such
period and amounted to $29,664. Except as to Trustees of the Fund who
are not members of EVM's organization, officers and Trustees receive
remuneration for their services to the Fund out of such management fee.
Investors Bank & Trust Company (IBT), an affiliate of EVM, serves as
custodian of the Fund. Pursuant to the custodian agreement, IBT
receives a fee reduced by credits which are determined based on the
average daily cash balances the Fund maintains with IBT. Certain
officers and Trustees of the Fund and the Portfolio are officers and
directors/trustees of the above organizations. In addition, investment
adviser, administrative fees, and custody fees are paid by the
Portfolio to EVM and its affiliates. See Note 2 of the Portfolio's
Notes to Financial Statements which are included elsewhere in this
report.
--------------------------------------------------------------------
<TABLE>
(4) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial
interest (without par value). Transactions in Fund shares were as follows:
<CAPTION>
FOR THE PERIOD FROM
FOR THE SIX MONTHS DECEMBER 28, 1993
ENDED FEBRUARY 28, 1995 (START OF BUSINESS) TO
(UNAUDITED) AUGUST 31, 1994
----------------------- ----------------------
<S> <C> <C>
Sales 1,153,258 3,928,422
Issued to shareholders electing to receive payments
of distributions in Fund shares 6,929 -
Redemptions (1,279,267) (1,001,706)
---------- ----------
Net increase (decrease) (119,080) 2,926,716
========== ==========
</TABLE>
--------------------------------------------------------------------
(5) INVESTMENT TRANSACTIONS
Increases and decreases in the Fund's investment in the Portfolio
aggregated $10,144,254 and $11,100,768, respectively.
13
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------
(6) DISTRIBUTION PLAN
The Fund has adopted a distribution plan (the "Plan") pursuant to Rule
12b-1 under the Investment Company Act of 1940. The Plan requires the
Fund to pay the Principal Underwriter, Eaton Vance Distributors, Inc.
(EVD) amounts equal to 1/365 of 0.75% of the Fund's daily net assets,
for providing ongoing distribution services and facilities to the Fund.
The Fund will automatically discontinue payments to EVD during any
period in which there are no outstanding Uncovered Distribution
Charges, which are equivalent to the sum of (i) 6.25% of the aggregate
amount received by the Fund for shares sold plus, (ii) distribution
fees calculated by applying the rate of 1% over the prevailing prime
rate to the outstanding balance of Uncovered Distribution Charges of
EVD reduced by amounts theretofore paid to EVD. The amount payable to
EVD with respect to each day is accrued on such day as a liability of
the Fund and, accordingly, reduces the Fund's net assets. The Fund paid
or accrued $88,993 to or payable to EVD for the six months ended
February 28, 1995, representing 0.75% of average daily net assets. At
August 31, 1994, the amount of Uncovered Distribution Charges of EVD
calculated under the Plan was approximately $48,504.
In addition, the Plan permits the Fund to make monthly payments of
service fees to the Principal Underwriter in amounts not expected to
exceed 0.25% of the Fund's average daily net assets for any fiscal
year. The Fund paid or accrued service fees to or payable to EVD for
the six months ended February 28, 1995, in the amount of $29,664. EVD
makes monthly service fee payments to Authorized Firms in amounts
anticipated to be equivalent to 0.25%, annualized, of the assets
maintained in the Fund by their customers. Service fee payments are
made for personal services and/or the maintenance of shareholder
accounts.
Certain officers and Trustees of the Fund are officers or directors of
EVD.
--------------------------------------------------------------------
(7) CONTINGENT DEFERRED SALES CHARGE
Shares purchased on or after January 30, 1995 and redeemed during the
first year after purchase (except shares acquired through the
reinvestment of distributions) generally will be subject to a
contingent deferred sales charge at a rate of one percent of redemption
proceeds, exclusive of all reinvestments and capital appreciation in
the account. No contingent deferred sales charge is imposed on
exchanges for shares of other funds in the Eaton Vance Classic Group of
Funds or Eaton Vance Money Market Fund which are distributed with a
contingent deferred sales charge. EVD received no CDSC for the period
ended February 28, 1995.
14
<PAGE> 15
<TABLE>
GREATER CHINA GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
FEBRUARY 28, 1995
(UNAUDITED)
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
SHARES VALUE
-----------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 98.6%
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CHINA, 2.6%
Dazhong Taxi 1,106,105 $ 807,457
Shanghai Diesel Engineering* 1,960,000 1,528,800
Shanghai Erfangji Co. Ltd. 5,595,160 1,096,651
Shanghai Industrial Sewing Machine* 740,000 236,800
Shanghai Jin Jiang Tower 2,054,000 792,844
Shanghai Phoenix Bicycle Co. 2,615,000 779,270
Shanghai Posts & Telecommunications 150,000 90,300
Shanghai Yaohua Pilkington* 4,770,500 4,770,500
Shanghai Tyre and Rubber 5,717,600 1,703,845
Shenzhen China Bicycles Co. 8,745,000 3,766,472
Shenzhen Vanke Co. Ltd. 397,600 179,993
------------
$ 15,752,932
------------
HONG KONG, 39.8%
Applied International Holdings 1,890,000 $ 217,539
Applied International Holdings (Warrants) 578,000 21,675
Chen Hsong Holdings 11,320,000 6,186,380
Cheung Kong Holdings Ltd. 3,680,000 16,040,384
CIM Company Ltd. 1,800,000 3,026,579
Citic Pacific Ltd. 3,600,000 8,963,280
Consolidated Electric Power Asia* 2,938,180 6,118,466
Dah Sing Financial Holdings 2,849,800 5,713,279
Hong Kong Aircraft & Engineering Co. Ltd. 765,600 2,465,691
Hong Kong Electric Co. 3,105,000 9,296,991
Hong Kong Land Holdings 2,238,000 4,269,656
Hong Kong Telecommunications Ltd. 6,958,000 12,509,092
Hopewell Holdings 16,778,000 12,803,292
HSBC Holdings PLC 1,632,600 17,156,993
Hua Xin Cement Co. Ltd. 1,341,100 297,724
Hutchison Whampoa 4,673,000 19,824,735
Jardine Matheson HK Registry 2,299,600 21,156,320
Johnson Electric Holdings 1,301,500 2,592,458
Li & Fung Ltd. 6,446,000 3,918,523
Maanshan Iron & Steel Co. 6,120,000 1,227,060
Ming Pao Enterprises 9,413,000 5,356,938
National Mutual Ltd. 15,606,000 10,092,400
New World Development 3,398,000 9,273,482
Peregrine Investments Holdings 479,666 586,296
</TABLE>
15
<PAGE> 16
PORTFOLIO OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
SHARES VALUE
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
San Miguel Brewery Ltd. 3,170,000 $ 2,747,122
Shanghai Haixing Shipping 17,230,000 3,209,949
Shanghai Petrochemical 26,784,000 8,228,045
Siu Fung Ceramics Holdings 24,084,000 3,581,291
South China Industries 4,930,000 516,664
South Sea Development Co. 6,184,464 408,175
Sun Hung Kai Properties Ltd. 1,654,000 11,124,308
Television Broadcasts Ltd. 1,351,000 5,084,894
Tem Fat Hing Fung 26,696,000 4,039,105
Varitronix International Ltd. 3,782,000 5,527,771
Wharf Holdings 4,610,000 15,860,705
Yizheng Chemical Fibre Co. 7,800,000 2,749,500
Zhenhai Refining & Chemical Co. 4,722,000 1,099,282
------------
$243,292,044
------------
INDONESIA, 2.9%
Bank International Indonesia 356,000 $ 927,344
Gajah Tunggal 2,027,000 2,492,324
PT Indah Kiat Pulp & Paper 6,434,400 9,432,187
PT Indonesian Satellite 139,600 4,973,250
------------
$ 17,825,105
------------
REPUBLIC OF KOREA, 8.2%
Daewoo Corp. 10,277 $ 134,057
Daewoo Heavy Industries 60,000 790,224
Daewoo Heavy Industries Pfd. 199,114 1,545,702
Dong Chang Paper Mfg.* 80,008 1,074,004
Goldstar Co. 70,000 2,554,419
Korea Electric Power Corp. 411,200 14,152,928
Korea Exchange Bank* 593,380 6,094,250
Korea Exchange Bank Rights 172,620 308,230
Pohang Iron & Steel Co. Ltd. 45,060 4,281,457
Sam Sung Electronics 41,402 6,136,475
Samsung Fire & Marine Insurance* 3,920 651,306
Samwhan Ltd. 25,795 614,128
Yukong Ltd. 285,073 11,978,368
------------
$ 50,315,548
------------
</TABLE>
16
<PAGE> 17
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
SHARES VALUE
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MALAYSIA, 10.4%
Aokam Perdana Berhad 427,000 $ 2,475,618
Berjaya Textiles Berhad 540,000 1,988,442
DCB Holdings Berhad 100,000 221,330
Genting Berhad 1,229,000 10,639,822
Hong Leong Industries Berhad 1,357,000 6,591,628
IOI Properties Berhad 406,000 1,479,099
Kim Hin Industry Berhad 1,105,000 5,237,700
Kim Hin Industry Berhad Warrants* 221,000 273,576
Land & General Berhad 5,343,000 15,174,654
Leader Universal Holdings Ltd. 1,050,000 3,681,300
Leader Universal Holdings Ltd. (A Shares) 916,666 3,052,222
Mulpha International Trading 696,666 1,135,287
Perlis Plantations Berhad 770,000 2,548,854
Sime Darby Berhad 3,780,000 9,180,864
------------
$ 63,680,396
------------
THE PHILIPPINES, 6.8%
Ayala Corp. Class B 2,961,460 $ 3,975,464
Bacnotan Consolidated Industries 453,351 2,804,747
Belle Corp. Class B* 31,900,000 8,067,510
Belle Corp. Class B Rights 7,200,000 1,260,700
Philippine Long Distance Telephone 201,700 11,900,300
San Miguel Corporation 1,797,800 8,254,419
SM Prime Holdings* 17,223,000 5,093,183
------------
$ 41,356,323
------------
SINGAPORE, 10.7%
Cerebos Pacific Ltd. 1,129,000 $ 6,426,720
City Developments 924,000 4,526,584
Clipsal Industries Holdings Ltd. 2,200,000 4,928,000
Clipsal Industries Warrants* 234,000 184,860
Development Bank of Singapore 820,000 7,921,036
Overseas Union Bank 1,716,000 10,004,966
Sembawang Maritime 2,266,000 9,459,190
Singapore Airlines Ltd. 1,125,000 11,255,400
Straits Steamship Land 2,452,500 7,580,923
United Overseas Bank 309,000 3,006,199
------------
$ 65,293,878
------------
</TABLE>
17
<PAGE> 18
PORTFOLIO OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
SHARES VALUE
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TAIWAN, 5.1%
China Trust Business Bank 1,654,580 $ 3,673,829
Formosa Chemical 1,387,360 2,101,018
Formosa Plastics 2,490,000 4,961,823
Nan Ya Plastic 3,067,085 6,402,847
Sampo 3,006,080 3,982,154
Taiwan Polypropylene 776,000 1,973,446
Taiwan Semiconductor 402,000 2,365,046
United Microelectronics Co. 2,500,000 4,042,250
Victor Taichung Machinery* 820,000 1,851,888
------------
$ 31,354,301
------------
THAILAND, 11.6%
Bangkok Bank 518,200 $ 4,446,467
Electricity Generating (Foreign) 4,241,700 11,480,161
Krung Thai Bank Ltd. (Foreign) 1,180,000 3,524,896
Saha Union Corp. Ltd. (Local) 700,000 919,240
Shinawatra Satellite (Foreign) 3,210,000 6,950,280
Siam Cement (Local) 234,400 13,345,939
Siam Cement (Foreign) 151,900 9,196,831
Siam Commercial Bank 1,591,300 13,781,931
Thai Petrochemical (Foreign) 160,000 352,847
Thailand Military Bank (Foreign) 1,972,500 6,485,383
------------
$ 70,483,975
------------
UNITED STATES, 0.5%
AES China Generating Co. Ltd.* 210,000 $ 1,863,750
Pacific Basin Bulk Shipping 84,500 1,151,313
------------
$ 3,015,063
------------
TOTAL INVESTMENTS (Identified cost, $600,922,443) $602,369,565
OTHER ASSETS - 1.4% 8,433,506
------------
NET ASSETS - 100.0% $610,803,071
============
<FN>
* Non-income producing security
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 19
FINANCIAL STATEMENTS
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
STATEMENT OF ASSETS OF LIABILITIES
February 28, 1995
(Unaudited)
<S> <C> <C>
ASSETS:
Investments, at value (Note 1A) (Identified cost, $600,922,443) $602,369,565
Cash denominated in foreign currencies (cost, $1,387,256) 1,378,170
Cash 5,613,598
Receivable for investments sold 2,096,695
Dividends and interest receivable 567,555
Deferred organization expenses (Note 1C) 77,668
------------
Total assets $612,103,251
LIABILITIES:
Payable for investments purchased $1,268,737
Payable for forward foreign currency exchange
contracts 1,996
Payable to affiliate -
Custodian fee 28,334
Accrued expenses 1,113
------------
Total liabilities $ 1,300,180
------------
NET ASSETS applicable to investors' interest in
Portfolio $610,803,071
============
SOURCES OF NET ASSETS:
Net proceeds from capital contributions and withdrawals $609,357,561
Net unrealized appreciation of investments (computed on the
basis of identified cost) 1,447,122
Net unrealized depreciation of foreign currencies (1,612)
------------
Total $610,803,071
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE> 20
FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the six months ended February 28, 1995
(Unaudited)
<S> <C> <C>
INVESTMENT INCOME:
Income -
Dividends (net of foreign taxes of $516,485) $ 6,517,367
Interest 11,315
--------------
Total income $ 6,528,682
Expenses -
Investment adviser fee (Note 2) $ 2,456,952
Administration fee (Note 2) 802,285
Custodian fee (Note 2) 457,412
Legal & audit fees 38,794
Amortization of organization expense (Note 1C) 14,201
Trustees' fees 6,250
Miscellaneous 4,958
------------
Total expenses 3,780,852
--------------
Net investment income $ 2,747,830
--------------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS:
Net realized loss -
Investments (net of foreign capital gains taxes of $621,026) $ (6,536,590)
Foreign currency transactions (305,631)
--------------
Net realized loss on investments and foreign currency
transactions $ (6,842,221)
Change in unrealized appreciation -
Investments $ (95,892,899)
Foreign currency (4,864)
--------------
Decrease in unrealized appreciation $ (95,897,763)
--------------
Net realized and unrealized loss on investments and
foreign currency transactions $ (102,739,984)
--------------
Net decrease in net assets from operations $ (99,992,154)
==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE> 21
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE YEAR
FEBRUARY 28, 1995 ENDED
(UNAUDITED) AUGUST 31, 1994
----------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income $ 2,747,830 $ 4,024,714
Net realized loss on investment and foreign currency transactions (6,842,221) (11,068,453)
Net increase (decrease) in unrealized appreciation (depreciation)
of investments (95,892,899) 79,234,677
Net increase (decrease) in unrealized appreciation (depreciation)
of foreign currency (4,864) 1,952
-------------- --------------
Increase (decrease) in net assets from operations $ (99,992,154) $ 72,192,890
-------------- --------------
Capital Transactions:
Contributions $ 82,882,989 $ 636,873,995
Withdrawals (104,700,441) (184,497,094)
-------------- --------------
Increase (decrease) in net assets resulting from capital
transactions $ (21,817,452) $ 452,376,901
-------------- --------------
Total increase (decrease) in net assets $ (121,809,606) $ 524,569,791
NET ASSETS:
At beginning of period 732,612,677 208,042,886
-------------- --------------
At end of period $ 610,803,071 $ 732,612,677
============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
21
<PAGE> 22
FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
- -------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTARY DATA
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE YEAR
FEBRUARY 28, 1995 ENDED
(UNAUDITED) AUGUST 31, 1994
----------------- ---------------
<S> <C> <C>
RATIOS (As a percentage of average net assets):
Expenses 1.14+ 1.15%
Net investment income 0.83%+ 0.73%
PORTFOLIO TURNOVER 18% 36%
<FN>
+ Annualized
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
22
<PAGE> 23
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
-----------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
Greater China Growth Portfolio (the "Portfolio") is registered under
the Investment Company Act of 1940 as a diversified, open end
investment company which was organized as a trust under the laws of the
State of New York on September 1, 1992. The Declaration of Trust
permits the Trustees to issue interests in the Portfolio. The following
is a summary of the significant accounting policies of the Portfolio.
The policies are in conformity with generally accepted accounting
principles.
A. INVESTMENT VALUATIONS - Marketable securities, including options,
that are listed on foreign or U.S. securities exchanges or in the
NASDAQ National Market System are valued at closing sale prices, on the
exchange where such securities are principally traded. Futures
positions on securities or currencies are generally valued at closing
settlement prices. Unlisted or listed securities for which closing sale
prices are not available are valued at the mean between the latest bid
and asked prices. Short term debt securities with a remaining maturity
of 60 days or less are valued at amortized cost. Other fixed income and
debt securities, including listed securities and securities for which
price quotations are available, will normally be valued on the basis of
valuations furnished by a pricing service. Investments for which
valuations or market quotations are unavailable are valued at fair
value using methods determined in good faith by or at the direction of
the Trustees.
B. FEDERAL TAXES - The Portfolio has elected to be treated as a
partnership for Federal tax purposes. No provision is made by the
Portfolio for federal or state taxes on any taxable income of the
Portfolio because each investor in the Portfolio is individually
responsible for the payment of any taxes on its share of such income.
Since some of the Portfolio's investors are regulated investment
companies that invest all or substantially all of their assets in the
Portfolio, the Portfolio normally must satisfy the applicable source of
income and diversification requirements, (under the Internal Revenue
Code), in order for its investors to satisfy them. The Portfolio will
allocate, at least annually among its investors, each investor's
distributive share of the Portfolio's net investment income, net
realized capital gains, and any other items of income, gain, loss,
deduction or credit. Withholding taxes on foreign dividends and capital
gains have been provided for in accordance with the Trust's
understanding of the applicable countries' tax rules and rates.
C. DEFERRED ORGANIZATION EXPENSES - Costs incurred by the Portfolio in
connection with its organization, including registration costs, are
being amortized on the straight-line basis over five years.
D. FUTURES CONTRACTS - Upon the entering of a financial futures
contract, the Portfolio is required to deposit ("initial margin")
either in cash or securities an amount equal to a certain percentage of
the purchase price indicated in the financial futures contract.
Subsequent payments are made or received by the Portfolio ("margin
maintenance") each day, dependent on daily fluctuations in the value of
the underlying security, and are recorded for book purposes as
unrealized gains or losses by the Portfolio. The Portfolio's investment
in financial futures contracts is designed only to hedge against
anticipated future changes in interest or currency exchange rates.
Should interest or currency exchange rates move unexpectedly, the
Portfolio may not achieve the anticipated benefits of the financial
futures contracts and may realize a loss. If the Portfolio enters into
a closing transaction, the Portfolio will realize, for book purposes, a
gain or loss equal to the difference between the value of the financial
futures contract to sell and financial futures contract to buy.
23
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
-----------------------------------------------------------------------
E. FOREIGN CURRENCY TRANSLATION - Investment valuations, other assets,
and liabilities initially expressed in foreign currencies are converted
each business day into U.S. dollars based upon current exchange rates.
Purchases and sales of foreign investment securities and income and
expenses are converted into U.S. dollars based upon currency exchange
rates prevailing on the respective dates of such transactions.
Recognized gains or losses on investment transactions attributable to
foreign currency rates are recorded for financial statement purposes as
net realized gains and losses on investments. That portion of
unrealized gains and losses on investments that result from
fluctuations in foreign currency exchange rates are not separately
disclosed.
F. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS - The Portfolio may
enter into forward foreign currency exchange contracts for the purchase
or sale of a specific foreign currency at a fixed price on a future
date. Risks may arise upon entering these contracts from the potential
inability of counterparties to meet the terms of their contracts and
from movements in the value of a foreign currency relative to the U.S.
dollar. The Portfolio will enter into forward contracts for hedging
purposes as well as non-hedging purposes. The forward foreign currency
exchange contracts are adjusted by the daily exchange rate of the
underlying currency and any gains or losses are recorded for financial
statement purposes as unrealized until such time as the contracts have
been closed or offset.
G. OTHER - Investment transactions are accounted for on the date the
investments are purchased or sold. Dividend income is recorded on the
ex-dividend date. However, if the ex-dividend date has passed, certain
dividends from foreign securities are recorded as the Portfolio is
informed of the ex-dividend date. Interest income is recorded on the
accrual basis.
H. INTERIM FINANCIAL INFORMATION - The interim financial statements
relating to February 28, 1995 and for the period then ended have not
been audited by independent certified public accountants, but in the
opinion of the Portfolio's management, reflect all adjustments
necessary for the fair presentation of the financial statements.
-----------------------------------------------------------------------
(2) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The investment adviser fee is earned by Lloyd George Management (Hong
Kong) Limited (the Adviser) as compensation for management and
investment advisory services rendered to the Portfolio. Under the
advisory agreement, the Adviser receives a monthly fee of 0.0625%
(0.75% annually) of the average daily net assets of the Portfolio up to
$500,000,000, and at reduced rates as daily net assets exceed that
level. For the six months ended February 28, 1995 the adviser fee was
0.74% of average net assets. In addition, an administrative fee is
earned by Eaton Vance Management (EVM) for managing and administering
the business affairs of the Portfolio. Under the administration
agreement, EVM earns a monthly fee in the amount of 1/48th of 1% (equal
to 0.25% annually) of the average daily net assets of the Portfolio up
to $500,000,000, and at reduced rates as daily net assets exceed that
level. For the six months ended February 28, 1995, the administration
fee was 0.24% of average net assets. Except as to Trustees of the
Portfolio who are not members of the Adviser or EVM's organization,
officers and Trustees receive remuneration for their services to the
Portfolio out of such investment adviser and administrative fees.
Investors Bank & Trust Company (IBT), an affiliate of EVM, serves as
custodian of the Portfolio. Pursuant to the custodian agreement, IBT
receives a fee reduced by credits which are determined based on the
average daily cash balances the Portfolio maintains with IBT. Certain
of the officers and Trustees of the Portfolio are officers or
directors/trustees of the above organizations.
24
<PAGE> 25
-----------------------------------------------------------------------
(3) INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than short-term obligations,
aggregated $118,062,038 and $139,005,319, respectively.
-----------------------------------------------------------------------
(4) FEDERAL INCOME TAX BASIS OF INVESTMENTS
The cost and unrealized appreciation (depreciation) in value of the
investments owned at February 28, 1995, as computed on a federal income
tax basis, are as follows:
Aggregate cost $600,922,443
============
Gross unrealized appreciation $ 65,625,344
Gross unrealized depreciation (64,178,222)
------------
Net unrealized appreciation $ 1,447,122
============
------------------------------------------------------------------------
(5) RISKS ASSOCIATED WITH FOREIGN INVESTMENTS
Investing in securities issued by companies whose principal business
activities are outside the United States may involve significant risks
not present in domestic investments. For example, there is generally
less publicly available information about foreign companies,
particularly those not subject to the disclosure and reporting
requirements of the U.S. securities laws. Foreign issuers are generally
not bound by uniform accounting, auditing, and financial reporting
requirements and standards of practice comparable to those applicable
to domestic issuers. Investments in foreign securities also involve the
risk of possible adverse changes in investment or exchange control
regulations, expropriation or confiscatory taxation, limitation on the
removal of funds or other assets of the Portfolio, political or
financial instability or diplomatic and other developments which could
affect such investments. Foreign stock markets, while growing in volume
and sophistication, are generally not as developed as those in the
United States, and securities of some foreign issuers (particularly
those located in developing countries) may be less liquid and more
volatile than securities of comparable U.S. companies. In general,
there is less overall governmental supervision and regulation of
foreign securities markets, broker-dealers, and issuers than in the
United States.
25
<PAGE> 26
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
------------------------------------------------------------------------
(6) FINANCIAL INSTRUMENTS
The Portfolio regularly trades in financial instruments with
off-balance sheet risk in the normal course of its investing activities
to assist in managing exposure to various market risks. These financial
instruments include written options, forward foreign currency exchange
contracts and financial futures contracts and may involve, to a varying
degree, elements of risk in excess of the amounts recognized for
financial statement purposes.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
SALES
SETTLEMENT
DATES DELIVER
----------- -----------------------------
3/7/95 Malaysian Ringgit 2,894,782
3/2/95 Thai Baht 10,575,675
PURCHASES
SETTLEMENT
DATES IN EXCHANGE FOR
----------- -----------------------------
3/10/95 Malaysian Ringgit 1,678,279
3/1/95 Thai Baht 15,245,748
The notional or contractual amounts of these instruments represent the
investment the Portfolio has in particular classes of financial
instruments and does not necessarily represent the amounts potentially
subject to risk. The measurement of the risks associated with these
instruments is meaningful only when all related and offsetting
transactions are considered.
A summary of obligations under these financial instruments at February
28, 1995 is as follows:
IN EXCHANGE FOR NET UNREALIZED
(IN UNITED APPRECIATION
STATES DOLLARS) (DEPRECIATION)
--------------- --------------
$1,132,854 $ (1,132)
423,535 (509)
---------- ---------
$1,556,389 $ (1,641)
========== =========
DELIVER NET UNREALIZED
(IN UNITED APPRECIATION
STATES DOLLARS) (DEPRECIATION)
--------------- --------------
$657,427 $ 13
611,665 (368)
---------- ---------
$1,269,092 $ (355)
========== =========
(7) LINE OF CREDIT
The Portfolio participates with other portfolios and funds managed by
EVM and its affiliates in a $120 million unsecured line of credit
agreement with a bank. The line of credit consists of a $20 million
committed facility and a $100 million discretionary facility.
Borrowings will be made by the Portfolio solely to facilitate the
handling of unusual and/or unanticipated short-term cash requirements.
Interest is charged to each portfolio based on its borrowings at an
amount above either the bank's adjusted certificate of deposit rate, a
variable adjusted certificate of deposit rate, or a federal funds
effective rate. In addition, a fee computed at an annual rate of 1/4 of
1% on the $20 million committed facility and on the daily unused
portion of the $100 million discretionary facility is allocated among
the participating funds and portfolios at the end of each quarter. The
Portfolio did not have any significant borrowings or allocated fees
during the period.
26
<PAGE> 27
EV CLASSIC
GREATER CHINA
GROWTH FUND
OFFICERS
-------------------------
JAMES B. HAWKES
President, Trustee
LANDON T. CLAY
Vice President, Trustee
M. DOZIER GARDNER
Vice President
PETER F. KIELY
Vice President, Trustee
JAMES L. O'CONNOR
Treasurer
THOMAS OTIS
Secretary
WILLIAM J. AUSTIN, JR.
Assistant Treasurer
JANET E. SANDERS
Assistant Treasurer and Assistant Secretary
INDEPENDENT TRUSTEES
-------------------------
DONALD R. DWIGHT
President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
SAMUEL L. HAYES, III
Jacob Schiff Professor of Investment Banking,
Harvard University Graduate School of Business Administration
NORTON H. REAMER
President and Director, United Asset
Management Company
JOHN L. THORNDIKE
Director, Fiduciary Incorporated Company
JACK L. TREYNOR
Investment Adviser and Consultant
GREATER CHINA
GROWTH PORTFOLIO
OFFICERS
-------------------------
HON. ROBERT LLOYD GEORGE
President, Trustee and Portfolio Co-Manager
JAMES B. HAWKES
Vice President and Trustee
SCOBIE DICKINSON WARD
Vice President, Assistant Secretary,
Assistant Treasurer and Portfolio Co-Manager
WILLIAM WALTER RALEIGH KERR
Vice President, Secretary and Assistant Treasurer
JAMES L. O'CONNOR
Vice President and Treasurer
THOMAS OTIS
Vice President and Assistant Secretary
JANET E. SANDERS
Assistant Secretary
WILLIAM J. AUSTIN, JR.
Assistant Treasurer
INDEPENDENT TRUSTEES
-------------------------
SAMUEL L. HAYES, III
Jacob Schiff Professor of Investment Banking,
Harvard University Graduate School of Business Administration
STUART HAMILTON LECKIE
Managing Director and Actuary, Wyatt Company, Hong Kong
HON. EDWARD K.Y. CHEN
Professor and Director, Center for Asian Studies,
University of Hong Kong
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SPONSOR AND MANAGER OF
EV CLASSIC GREATER CHINA
GROWTH FUND & ADMINISTRATOR OF
GREATER CHINA GROWTH PORTFOLIO
Eaton Vance Management
24 Federal Street
Boston, MA 02110
ADVISER OF GREATER CHINA
GROWTH PORTFOLIO
Lloyd George Management
(Hong Kong) Limited
3408 One Exchange Square
Central, Hong Kong
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 482-8260
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
AUDITORS
Deloitte & Touche LLP
125 Summer Street
Boston, MA 02110
This report must be preceded or accompanied by a current prospectus
which contains more complete information on the Fund, including its
distribution plan, sales charges and expenses. Please read the
prospectus carefully before you invest or send money.
EV CLASSIC
GREATER CHINA GROWTH FUND
24 FEDERAL STREET
BOSTON, MA 02110 C-CGSRC
