As filed with the Securities and Exchange Commission on July 29, 1997
File No. 811-8464
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]
HIGH INCOME PORTFOLIO
---------------------
(Exact Name of Registrant as Specified in Charter)
The Bank of Nova Scotia Building
P.O. Box 501, George Town, Grand Cayman
Cayman Islands, British West Indies
-----------------------------------
(Address of Principal Executive Offices)
(809) 949-2001
--------------
Registrant's Telephone Number, including Area Code
Alan R. Dynner
24 Federal Street, Boston, Massachusetts 02110
----------------------------------------------
(Name and Address of Agent for Service)
<PAGE>
Throughout this Registration Statement, information concerning High Income
Portfolio (the "Portfolio") is incorporated by reference from Amendment No. 36
to the Registration Statement of Eaton Vance Mutual Funds Trust (File No.
2-90946) under the Securities Act of 1933 (the "1933 Act")) (the "Amendment"),
which was filed electronically with the Securities and Exchange Commission on
July 25, 1997 (Accession No. 0000950156-97-000585). The Amendment contains the
prospectus and statement of additional information ("SAI") of EV Marathon High
Income Fund (the "Feeder Fund"), which invests substantially all of its assets
in the Portfolio.
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
The Portfolio is a diversified, open-end management investment company
which was organized as a trust under the laws of the State of New York on May 1,
1992. 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. Investments in the Portfolio may be made only by
U.S. and foreign investment companies, common or commingled trust funds, or
similar organizations or trusts described in Sections 401(a) or 501(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), 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 is not intended to be a complete investment program.
Prospective investors should take into account their objectives and other
investments when considering the purchase of interests in the Portfolio. The
Portfolio cannot assure achievement of its investment objective. The Portfolio
may not be appropriate for investors who cannot assume the greater risk of
capital depreciation or loss inherent in seeking higher yields.
Registrant incorporates by reference information concerning the Portfolio's
investment objective and investment practices from "The Fund's Investment
Objective" and "Investment Policies and Risks" in the Feeder Fund prospectus and
"Appendix-Description of Securities Ratings" in Part I of the Feeder Fund SAI.
ITEM 5. MANAGEMENT OF THE PORTFOLIO
Registrant incorporates by reference information concerning the Portfolio's
management from "Management of the Fund and the Portfolio" in the Feeder Fund
prospectus and "Appendix - Description of Securities Ratings" in Part I of the
Feeder Fund SAI.
ITEM 6. CAPITAL STOCK AND OTHER SECURITIES
Registrant incorporates by reference information concerning interests in
the Portfolio from "Organization of the Fund and the Portfolio" in the Feeder
Fund prospectus and "Other Information" in Part I of the Feeder Fund SAI. An
interest in the Portfolio has no preemptive or conversion rights and is fully
paid and nonassessable by the Portfolio, except as described under "Organization
of the Fund and Portfolio" in the Feeder Fund Prospectus and "Other Information
in Part I of the Feeder Fund SAI.
<PAGE>
As of July 1, 1997, the Feeder Fund controlled the Portfolio by virtue of
owning more than 83.6% of the outstanding voting interests in the Portfolio.
The Portfolio's net asset value 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 (normally 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 represented 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 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, 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 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 ("RIC") 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.
<PAGE>
Registrant incorporates by reference information concerning the computation
of net asset value and valuation of Portfolio assets from "Valuing Fund Shares"
in the Feeder Fund prospectus. For further information, see Item 19 of Part B.
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"). 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 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 (the "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 Investment Company Act of 1940 (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.
<PAGE>
APPENDIX B
HIGH INCOME PORTFOLIO
ASSET COMPOSITION INFORMATION
FOR THE FISCAL YEAR ENDED MARCH 31, 1997
PERCENT OF NET ASSETS
Preferred Stocks and
Other Equity Securities 2.0%
Short-Term Obligations 2.8%
Debt Securities -- Moody's Rating
Ba 8.1%
B1 12.4%
B2 24.8%
B3 39.9%
Caa 7.0%
Unrated 3.0%
------
Total 100.0%
The chart above indicates the weighted average composition of the
securities held by the Portfolio for the fiscal year ended March 31, 1997, with
the debt securities rated by Moody's Investors Service, Inc. ("Moody's")
separated into the indicated categories. The weighted average indicated above
was calculated on a dollar weighted basis and was computed as at the end of each
month during the fiscal year. The chart does not necessarily indicate what the
composition of the Portfolio will be in the current and subsequent fiscal years.
For a description of Moody's ratings of fixed-income securities, see
Appendix A in the Feeder Fund Prospectus.
<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-1
Control Persons and Principal Holder of Securities ..........................B-1
Investment Advisory and Other Services ......................................B-2
Brokerage Allocation and Other Practices ....................................B-2
Capital Stock and Other Securities ..........................................B-2
Purchase, Redemption and Pricing of Securities ..............................B-4
Tax Status ..................................................................B-4
Underwriters ................................................................B-7
Calculation of Performance Data .............................................B-7
Financial Statements ........................................................B-7
ITEM 12. GENERAL INFORMATION AND HISTORY.
Not applicable.
ITEM 13. INVESTMENT OBJECTIVES AND POLICIES.
Part A contains additional information about the investment objective and
policies of 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.
Registrant incorporates by reference additional information concerning the
investment policies of the Portfolio as well as information concerning the
investment restrictions of the Portfolio from "Additional Information about
Investment Policies", and "Investment Restrictions" in Part I of the Feeder Fund
SAI. The Portfolio's portfolio turnover rates for the fiscal years ended March
31, 1997 and 1996, were 78% and 88%, respectively.
ITEM 14. MANAGEMENT OF THE PORTFOLIO
Registrant incorporates by reference additional information concerning the
management of the Portfolio from "Trustees and Officers" in Part I of the Feeder
Fund SAI and "Fees and Expenses" in Part II of the Feeder Fund SAI. .........
ITEM 15. CONTROL PERSONS AND PRINCIPAL HOLDER OF SECURITIES
As of July 1, 1997, the Feeder Fund, a series of Eaton Vance Mutual Funds
Trust, owned approximately 83.6% of the value of the outstanding interests in
the Portfolio. In addition, the EV Medallion High Income Fund owned 13.8% of the
value of the outstanding interests in the Portfolio. Because the Feeder Fund
controls the Portfolio, it may take actions without the approval of any other
B-1
<PAGE>
investor. The Feeder 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 that is an investment company registered under the 1940 Act would
follow the same or a similar practice. Eaton Vance Mutual Funds Trust is an
open-end management investment company organized as a business trust under the
laws of the Commonwealth of Massachusetts. The address of the Feeder Fund is 24
Federal Street, Boston, MA 02110.
ITEM 16. INVESTMENT ADVISORY AND OTHER SERVICES
Registrant incorporates by reference information concerning investment
advisory and other services provided to the Portfolio from "Investment Adviser
and Administrator", "Custodian" and "Independent Certified Public Accountants"
in Part I of the Feeder Fund SAI.
ITEM 17. BROKERAGE ALLOCATION AND OTHER PRACTICES
Registrant incorporates by reference information concerning the brokerage
practices of the Portfolio from "Portfolio Security Transactions" in Part I of
the Feeder Fund SAI.
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 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.
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.
B-2
<PAGE>
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 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 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 Declaration of Trust 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-3
<PAGE>
ITEM 19. PURCHASE, REDEMPTION AND PRICING OF SECURITIES
See "Purchase of Interests in the Portfolio" and "Redemption or Decrease of
Interest" in Part A.
Registrant incorporates by reference information concerning valuation of
the Portfolio's assets from "Determination of Net Asset Value" in Part I of the
Feeder Fund SAI.
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 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
and deductions and credits.
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 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 share for purposes of all requirements of
Sections 851(b), 852(b)(5), 853(a) and 854 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 permit withdrawals in
a manner that will enable a Holder which is a RIC to comply with the
distribution requirements applicable to RICs (including those under Sections 852
and 4982 of the Code). The Portfolio will allocate at least annually to each
Holder such Holder'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 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), a Holder receives only liquid proceeds (and/or unrealized
receivables) and the Holder's adjusted basis of his interest exceeds the liquid
proceeds of such withdrawal, the Holder will generally realize a loss for
B-4
<PAGE>
federal income tax purposes. In addition, on a distribution to a Holder from the
Portfolio (whether pursuant to a partial or complete withdrawal or otherwise),
(1) income or gain will be recognized if the distribution is in liquidation of
the Holder's entire interest in the Portfolio and includes a disproportionate
share of any unrealized receivables held by the Portfolio and (2) gain or loss
may be recognized on a distribution to a Holder that contributed property to the
Portfolio. 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 the contribution
thereof), 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.
The Portfolio may be subject to foreign withholding or other foreign taxes
with respect to income (possibly including, in some cases, capital gains) on
certain foreign securities. These taxes may be reduced or eliminated under the
terms of an applicable U.S. income tax treaty in some cases. As it is not
expected that more than 50% of the value of the total assets of the Portfolio at
the close of any taxable year will consist of securities issued by foreign
corporations, the Portfolio will not be eligible to pass through to investors
any foreign tax credits or deductions for foreign taxes paid by the Portfolio.
Certain foreign exchange gains and losses realized by the Portfolio will be
treated as ordinary income and losses. Certain uses of foreign currency and
foreign currency options, futures and forward contracts and investment by the
Portfolio in the stock of certain passive foreign investment companies may be
limited or a tax election may be made, if available, in order to enable an
investor that is a RIC to preserve its qualification as a RIC or avoid
imposition of a tax on such an investor.
The Portfolio's investment in zero coupon and certain other securities will
cause it to realize income prior to the receipt of cash payments with respect to
these securities. Such income will be allocated daily to interests in the
Portfolio. To enable an investor that is a RIC to distribute its proportionate
share of this income and avoid a tax on such investor, the Portfolio may be
required to liquidate portfolio securities that it might otherwise have
continued to hold, in order to generate cash for distribution to the RIC.
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.
The Portfolio's transactions in options, options on futures contracts,
futures contracts, forward contracts, will be subject to special tax rules, the
effect of which may be to accelerate income to the Portfolio, defer Portfolio
losses, cause adjustments in the holding periods of Portfolio securities,
convert capital gain into ordinary income and convert short-term capital losses
into long-term capital losses. For example, the tax treatment of many types of
B-5
<PAGE>
options, options on futures contracts, futures contracts, forward contracts
entered into by the Portfolio will be governed by Section 1256 of the Code.
Absent a tax election for "mixed straddles" (see below), each such position held
by the Portfolio on the last business day of each taxable year will be marked to
market (i.e., treated as if it were 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, with subsequent adjustments made to any gain or loss
realized upon an actual disposition of such positions. When the Portfolio holds
an option or contract governed by Section 1256 which substantially diminishes
the Holder's risk of loss with respect to another position of the Portfolio not
governed by Section 1256 (as might occur in some hedging transactions), this
combination of positions could be a "mixed straddle" which is generally subject
to special tax rules requiring deferral of losses and other adjustments in
addition to being subject in part to Section 1256. The Portfolio may make
certain tax elections for its "mixed straddles" which could alter certain
effects of these rules. In order to qualify as a RIC for federal income tax
purposes, a Holder must derive less than 30% of its annual gross income from the
sale or other disposition of securities and certain other investments held for
less than three months, and the Portfolio will limit its activities in options,
options on futures contracts, futures contracts, forward contracts to the extent
necessary to enable the Holder to comply with this requirement.
Income from transactions in options, options on futures contracts, futures
contracts, forward 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 disposition 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 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 certain 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.
The Portfolio's investments, if any, in securities issued with original
issue discount (possibly including certain asset-related securities) or
securities acquired at a market discount (if an election is made to include
accrued market discount in current income) will cause it to realize income prior
to the receipt of cash payments with respect to these securities. In order to
enable a Holder to distribute its proportionate share of this income, the
Portfolio may be required to liquidate portfolio securities that is might
otherwise have continued to hold in order to generate cash that the Holder may
withdraw from the Portfolio for subsequent distribution to such Holder's
shareholders.
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 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 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.
B-6
<PAGE>
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 EVD. Investment companies, common
and commingled trust funds and similar organizations and entities may
continuously invest in the Portfolio.
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 & Touche, independent certified public
accountants, as experts in accounting and auditing.
Portfolio of Investments as of March 31, 1997
Statement of Assets and Liabilities as of March 31, 1997
Statement of Operations for the fiscal year ended March 31, 1997
Statement of Changes in Net Assets for the fiscal years ended March 31,
1997 and 1996
Supplementary Data for the fiscal years ended March 31, 1997 and 1996, and
for the period from the start of business, June 1, 1994, to March 31, 1995
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 0000950109-97-004452).
B-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 Registrant's Registration Statement and incorporated herein by
reference.
(b) Amendment to Declaration of Trust dated June 14, 1993 filed
as Exhibit No. 1(b) to Amendment No. 1 and incorporated herein by
reference.
2. By-Laws of the Registrant adopted May 1, 1992 filed as Exhibit No. 2
to Amendment No. 1 and incorporated herein by reference.
5. Investment Advisory Agreement between the Registrant and Boston
Management and Research dated May 31, 1994 filed as Exhibit No. 5 to
Amendment No. 1 and incorporated herein by reference.
6. Placement Agent Agreement with Eaton Vance Distributors, Inc. dated
November 1, 1996 filed herewith.
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
31, 1994 filed as Exhibit No. 8 to Amendment No. 1 and incorporated
herein by reference.
(b) Amendment to Custodian Agreement with Investors Bank & Trust
Company dated October 23, 1995 filed as Exhibit No. (8)(b) to
Amendment No. 2 and incorporated herein by reference.
9. (a) Accounting and Interestholder Services Agreement with IBT Fund
Services (Canada) Inc. dated as of March 31, 1995 filed as Exhibit No.
9(a) to Amendment No. 1 and incorporated herein by reference.
(b) Administration Agreement with The Bank of Nova Scotia Trust
Company (Cayman) Ltd. dated as of March 31, 1995 filed as Exhibit No.
9(b) to Amendment No. 1 and incorporated herein by reference.
C-1
<PAGE>
13. Investment representation letter of Eaton Vance High Income Trust
dated March 14, 1994 filed as Exhibit No. 13 to Amendment No. 1 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)
NUMBER OF
TITLE OF CLASS RECORD HOLDERS
-------------- --------------
As of July 1, 1997
Interests 3
ITEM 27. INDEMNIFICATION
Article V of the Registrant's Declaration of Trust contains indemnification
provisions for Trustees and officers. 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 Placement Agent Agreement also provides for reciprocal indemnity of the
placement agent, on the one hand, and the Trustees and officers on the other.
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 1940 Act, and the Rules promulgated
thereunder are in the possession and custody of the Registrant's custodian,
Investors Bank & Trust Company, 200 Clarendon Street, 16th Floor Mail Code ADM
27, Boston, MA 02116, with the exception of certain corporate documents and
portfolio trading documents that are in the possession and custody of the
Registrant's investment adviser, Boston Management and Research, 24 Federal
Street, Boston, MA 02110. Certain corporate documents of the Portfolio are also
maintained by IBT Trust Company (Cayman) Ltd., The Bank of Nova Scotia Building,
P.O. Box 501, George Town, Grand Cayman, Cayman Islands, British West Indies,
C-2
<PAGE>
and certain investor account and Portfolio accounting records are held by
IBT Fund Services (Canada) Inc., 1 First Canadian Place, King Street West, Suite
2800, P.O. Box 231, Toronto, Ontario, Canada M5X 1C8. 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 to its Registration Statement on Form
N-1A to be signed on its behalf by the undersigned, thereunto duly authorized in
the City of Hamilton, Bermuda on the 23rd day of June, 1997.
HIGH INCOME PORTFOLIO
By /s/ M. Dozier Gardner
---------------------
M. Dozier Gardner
President
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description of Exhibit
- ----------- ----------------------
(6) Placement Agent Agreement with Eaton Vance Distributors, Inc.
dated November 1, 1996
PLACEMENT AGENT AGREEMENT
November 1, 1996
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, Massachusetts 02110
Gentlemen:
This is to confirm that, in consideration of the agreements hereinafter
contained, the undersigned, High Income Portfolio (the "Trust"), an open-end
non-diversified management investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), organized as a New York trust,
has agreed that Eaton Vance Distributors, Inc. ("EVD"), formerly named EV
Distributors, Inc., shall be the placement agent (the "Placement Agent") of
Interests in the Trust ("Trust Interests").
1. Services as Placement Agent.
1.1 EVD will act as Placement Agent of the Trust Interests covered by
the Trust's registration statement then in effect under the 1940 Act. In acting
as Placement Agent under this Placement Agent Agreement, neither EVD nor its
employees or any agents thereof shall make any offer or sale of Trust Interests
in a manner which would require the Trust Interests to be registered under the
Securities Act of 1933, as amended (the "1933 Act").
1.2 All activities by EVD and its agents and employees as Placement
Agent of Trust Interests shall comply with all applicable laws, rules and
regulations, including, without limitation, all rules and regulations adopted
pursuant to the 1940 Act by the Securities and Exchange Commission (the
"Commission").
1.3 Nothing herein shall be construed to require the Trust to accept
any offer to purchase any Trust Interests, all of which shall be subject to
approval by the Board of Trustees.
1.4 The Trust shall furnish from time to time for use in connection
with the sale of Trust Interests such information with respect to the Trust and
Trust Interests as EVD may reasonably request. The Trust shall also furnish EVD
upon request with: (a) unaudited semiannual statements of the Trust's books and
accounts prepared by the Trust, and (b) from time to time such additional
information regarding the Trust's financial or regulatory condition as EVD may
reasonably request.
1.5 The Trust represents to EVD that all registration statements filed
by the Trust with the Commission under the 1940 Act with respect to Trust
Interests have been prepared in conformity with the requirements of such statute
and the rules and regulations of the Commission thereunder. As used in this
Agreement the term "registration statement" shall mean any registration
statement filed with the Commission as modified by any amendments thereto that
at any time shall have been filed with the Commission by or on behalf of the
Trust. The Trust represents and warrants to EVD that any registration statement
will contain all statements required to be stated therein in conformity with
both such statute and the rules and regulations of the Commission; that all
statements of fact contained in any registration statement will be true and
correct in all material respects at the time of filing of such registration
statement or amendment thereto; and that no registration statement will include
<PAGE>
2
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading to a purchaser of Trust Interests. The Trust may but shall not be
obligated to propose from time to time such amendment to any registration
statement as in the light of future developments may, in the opinion of the
Trust's counsel, be necessary or advisable. If the Trust shall not propose such
amendment and/or supplement within fifteen days after receipt by the Trust of a
written request from EVD to do so, EVD may, at its option, terminate this
Agreement. The Trust shall not file any amendment to any registration statement
without giving EVD reasonable notice thereof in advance; provided, however, that
nothing contained in this Agreement shall in any way limit the Trust's right to
file at any time such amendment to any registration statement as the Trust may
deem advisable, such right being in all respects absolute and unconditional.
1.6 The Trust agrees to indemnify, defend and hold EVD, its several
officers and directors, and any person who controls EVD within the meaning of
Section 15 of the 1933 Act or Section 20 of the Securities and Exchange Act of
1934 (the "1934 Act") (for purposes of this paragraph 1.6, collectively,
"Covered Persons") free and harmless from and against any and all claims,
demands, liabilities and expenses (including the cost of investigating or
defending such claims, demands or liabilities and any counsel fees incurred in
connection therewith) which any Covered Person may incur under the 1933 Act, the
1934 Act, common law or otherwise, arising out of or based on any untrue
statement of a material fact contained in any registration statement, private
placement memorandum or other offering material ("Offering Material") or arising
out of or based on any omission to state a material fact required to be stated
in any Offering Material or necessary to make the statements in any Offering
Material not misleading; provided, however, that the Trust's agreement to
indemnify Covered Persons shall not be deemed to cover any claims, demands,
liabilities or expenses arising out of any financial and other statements as are
furnished in writing to the Trust by EVD in its capacity as Placement Agent for
use in the answers to any items of any registration statement or in any
statements made in any Offering Material, or arising out of or based on any
omission or alleged omission to state a material fact in connection with the
giving of such information required to be stated in such answers or necessary to
make the answers not misleading; and further provided that the Trust's agreement
to indemnify EVD and the Trust's representations and warranties hereinbefore set
forth in this paragraph 1.6 shall not be deemed to cover any liability to the
Trust or its investors to which a Covered Person would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties, or by reason of a Covered Person's reckless disregard of its
obligations and duties under this Agreement. The Trust should be notified of any
action brought against a Covered Person, such notification to be given by a
writing addressed to the Trust, 24 Federal Street Boston, Massachusetts 02110,
with a copy to the Administrator of the Trust, Eaton Vance Management, at the
same address, promptly after the summons or other first legal process shall have
been duly and completely served upon such Covered Person. The failure to so
notify the Trust of any such action shall not relieve the Trust from any
liability except to the extent the Trust shall have been prejudiced by such
failure, or from any liability that the Trust may have to the Covered Person
against whom such action is brought by reason of any such untrue statement or
omission, otherwise than on account of the Trust's indemnity agreement contained
in this paragraph. The Trust will be entitled to assume the defense of any suit
brought to enforce any such claim, demand or liability, but in such case such
defense shall be conducted by counsel of good standing chosen by the Trust and
approved by EVD, which approval shall not be unreasonably withheld. In the event
the Trust elects to assume the defense of any such suit and retain counsel of
good standing approved by EVD, the defendant or defendants in such suit shall
bear the fees and expenses of any additional counsel retained by any of them;
but in case the Trust does not elect to assume the defense of any such suit or
in case EVD reasonably does not approve of counsel chosen by the Trust, the
Trust will reimburse the Covered Person named as defendant in such suit, for the
<PAGE>
3
fees and expenses of any counsel retained by EVD or it. The Trust's
indemnification agreement contained in this paragraph and the Trust's
representations and warranties in this Agreement shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
Covered Persons, and shall survive the delivery of any Trust Interests. This
agreement of indemnity will inure exclusively to Covered Persons and their
successors. The Trust agrees to notify EVD promptly of the commencement of any
litigation or proceedings against the Trust or any of its officers or Trustees
in connection with the issue and sale of any Trust Interests.
1.7 EVD agrees to indemnify, defend and hold the Trust, its several
officers and trustees, and any person who controls the Trust within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act (for purposes of
this paragraph 1.7, collectively, "Covered Persons") free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
costs of investigating or defending such claims, demands, liabilities and any
counsel fees incurred in connection therewith) that Covered Persons may incur
under the 1933 Act, the 1934 Act or common law or otherwise, but only to the
extent that such liability or expense incurred by a Covered Person resulting
from such claims or demands shall arise out of or be based on any untrue
statement of a material fact contained in information furnished in writing by
EVD in its capacity as Placement Agent to the Trust for use in the answers to
any of the items of any registration statement or in any statements in any other
Offering Material or shall arise out of or be based on any omission to state a
material fact in connection with such information furnished in writing by EVD to
the Trust required to be stated in such answers or necessary to make such
information not misleading. EVD shall be notified of any action brought against
a Covered Person, such notification to be given by a writing addressed to EVD at
24 Federal Street, Boston, Massachusetts 02110, promptly after the summons or
other first legal process shall have been duly and completely served upon such
Covered Person. EVD shall have the right of first control of the defense of the
action with counsel of its own choosing satisfactory to the Trust if such action
is based solely on such alleged misstatement or omission on EVD's part, and in
any other event each Covered Person shall have the right to participate in the
defense or preparation of the defense of any such action. The failure to so
notify EVD of any such action shall not relieve EVD from any liability except to
the extent the Trust shall have been prejudiced by such failure, or from any
liability that EVD may have to Covered Persons by reason of any such untrue or
alleged untrue statement, or omission or alleged omission, otherwise than on
account of EVD's indemnity agreement contained in this paragraph.
1.8 No Trust Interests shall be offered by either EVD or the Trust
under any of the provisions of this Agreement and no orders for the purchase or
sale of Trust Interests hereunder shall be accepted by the Trust if and so long
as the effectiveness of the registration statement or any necessary amendments
thereto shall be suspended under any of the provisions of the 1933 Act or the
1940 Act; provided, however, that nothing contained in this paragraph shall in
any way restrict or have an application to or bearing on the Trust's obligation
to redeem Trust Interests from any investor in accordance with the provisions of
the Trust's registration statement or Declaration of Trust, as amended from time
to time.
1.9 The Trust agrees to advise EVD as soon as reasonably practical by a
notice in writing delivered to EVD or its counsel:
(a) of any request by the Commission for amendments to the registration
statement then in effect or for additional information;
(b) in the event of the issuance by the Commission of any stop order
suspending the effectiveness of the registration statement then in effect or the
initiation by service of process on the Trust of any proceeding for that
purpose;
<PAGE>
4
(c) of the happening of any event that makes untrue any statement of a
material fact made in the registration statement then in effect or that requires
the making of a change in such registration statement in order to make the
statements therein not misleading; and
(d) of all action of the Commission with respect to any amendment to any
registration statement that may from time to time be filed with the Commission.
For purposes of this paragraph 1.9, informal requests by or acts of the
Staff of the Commission shall not be deemed actions of or requests by the
Commission.
1.10 EVD agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Trust all records and other
information not otherwise publicly available relative to the Trust and its
prior, present or potential investors and not to use such records and
information for any purpose other than performance of its responsibilities and
duties hereunder, except after prior notification to and approval in writing by
the Trust, which approval shall not be unreasonably withheld and may not be
withheld where EVD may be exposed to civil or criminal contempt proceedings for
failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Trust.
2. Duration and Termination of this Agreement.
This Agreement shall become effective upon the date of its execution,
and, unless terminated as herein provided, shall remain in full force and effect
through and including February 28, 1997 and shall continue in full force and
effect indefinitely thereafter, but only so long as such continuance after
February 28, 1997 is specifically approved at least annually (i) by the Board of
Trustees of the Trust or by vote of a majority of the outstanding voting
securities of the Trust and (ii) by the vote of a majority of those Trustees of
the Trust who are not interested persons of EVD or the Trust cast in person at a
meeting called for the purpose of voting on such approval.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this agreement without the payment of any
penalty, by action of Trustees of the Trust or the Directors of EVD, as the case
may be, and the Trust may, at any time upon such written notice to EVD,
terminate this Agreement by vote of a majority of the outstanding voting
securities of the Trust. This Agreement shall terminate automatically in the
event of its assignment.
3. Representations and Warranties.
EVD and the Trust each hereby represents and warrants to the other that
it has all requisite authority to enter into, execute, deliver and perform its
obligations under this Agreement and that, with respect to it, this Agreement is
legal, valid and binding, and enforceable in accordance with its terms.
4. Limitation of Liability.
EVD expressly acknowledges the provision in the Declaration of Trust of
the Trust (Sections 5.2 and 5.6) limiting the personal liability of the Trustees
and officers of the Trust, and EVD hereby agrees that it shall have recourse to
the Trust for payment of claims or obligations as between the Trust and EVD
arising out of this Agreement and shall not seek satisfaction from any Trustee
or officer of the Trust.
<PAGE>
5
5. Certain Definitions.
The terms "assignment" and "interested persons" when used herein shall
have the respective meanings specified in the Investment Company Act of 1940 as
now in effect or as hereafter amended subject, however, to such exemptions as
may be granted by the Securities and Exchange Commission by any rule, regulation
or order. The term "vote of a majority of the outstanding voting securities"
shall mean the vote, at a meeting of Holders, of the lesser of (a) 67 per centum
or more of the Interests in the Trust present or represented by proxy at the
meeting if the Holders of more than 50 per centum of the outstanding Interests
in the Trust are present or represented by proxy at the meeting, or (b) more
than 50 per centum of the outstanding Interests in the Trust. The terms
"Holders" and "Interests" when used herein shall have the respective meanings
specified in the Declaration of Trust of the Trust.
6. Concerning Applicable Provisions of Law, etc.
This Agreement shall be subject to all applicable provisions of law,
including the applicable provisions of the 1940 Act and to the extent that any
provisions herein contained conflict with any such applicable provisions of law,
the latter shall control.
The laws of the Commonwealth of Massachusetts shall, except to the
extent that any applicable provisions of federal law shall be controlling,
govern the construction, validity and effect of this Agreement, without
reference to principles of conflicts of law.
If the contract set forth herein is acceptable to you, please so
indicate by executing the enclosed copy of this Agreement and returning the same
to the undersigned, whereupon this Agreement shall constitute a binding contract
between the parties hereto effective at the closing of business on the date
hereof.
Yours very truly,
HIGH INCOME PORTFOLIO
By: /s/ James B. Hawkes
-------------------------
Vice President
Accepted:
EATON VANCE DISTRIBUTORS, INC.
By: /s/ Wharton P. Whitaker
---------------------------
President
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 686684
<INVESTMENTS-AT-VALUE> 697462
<RECEIVABLES> 18515
<ASSETS-OTHER> 18
<OTHER-ITEMS-ASSETS> 17
<TOTAL-ASSETS> 716012
<PAYABLE-FOR-SECURITIES> 9255
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 46
<TOTAL-LIABILITIES> 9300
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 695933
<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> 10778
<NET-ASSETS> 706711
<DIVIDEND-INCOME> 60
<INTEREST-INCOME> 64033
<OTHER-INCOME> 0
<EXPENSES-NET> 4009
<NET-INVESTMENT-INCOME> 60084
<REALIZED-GAINS-CURRENT> (4057)
<APPREC-INCREASE-CURRENT> 13402
<NET-CHANGE-FROM-OPS> 69429
<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> 195364
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3684
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4009
<AVERAGE-NET-ASSETS> 599770
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0.67
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>