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The Eaton Vance Special Investment Trust
For the Stock Portfolio
[LOGO]
Semi-Annual Shareholder Report
June 30, 1996
Investment Adviser of Stock Portfolio
Boston Management and Research
24 Federal Street
Boston, MA 02110
Fund Administrator
Eaton Vance Management
24 Federal Street
Boston, MA 02110
(617) 482-8260
Principal Underwriter
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 482-8260
Custodian
Investors Bank & Trust Company
89 South Street
P.O. Box 1537
Boston, MA 02205-1537
Transfer Agent
First Data Investor Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
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STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1996
(UNAUDITED)
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COMMON STOCKS -- 89.4%
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SHARES SECURITY VALUE
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ADVERTISING - 1.6%
40,000 Omnicom Group $ 1,860,000
------------
AEROSPACE - 1.9%
25,000 Boeing Co. $ 2,178,125
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BANKS - 4.9%
40,000 Bank of Boston Corp. $ 1,980,000
29,332 Citicorp 2,423,557
26,766 Fleet Financial Group, Inc. 1,164,321
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$ 5,567,878
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BROADCASTING - 2.3%
140,000 Comcast Corp. Class A $ 2,590,000
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BUSINESS PRODUCTS & SERVICES - 1.4%
35,000 Crown Cork & Seal Inc. $ 1,575,000
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CHEMICALS - 0.3%
5,000 DuPont (E.I.) deNemours & Co., Inc. $ 395,625
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COMPUTER & BUSINESS EQUIPMENT - 3.8%
10,000 Bay Networks, Inc. $ 257,500
75,000 Xerox Corp. 4,012,500
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$ 4,270,000
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COMPUTER SERVICES - 1.2%
35,000 Automatic Data Processing, Inc. $ 1,351,875
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CONSUMER GOODS & SERVICES - 15.1%
86,063 Conagra Inc. $ 3,905,108
25,000 Duracell International, Inc. 1,078,125
62,500 Eastman Kodak Co. 4,859,375
50,000 Heinz, H. J. Co. 1,518,750
25,000 International Flavors & Fragrances 1,190,625
100,000 PepsiCo, Inc. 3,537,500
12,100 Procter & Gamble Co. 1,096,563
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$ 17,186,046
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ENERGY - 9.0%
50,000 Anadarko Petroleum Corp. $ 2,900,000
27,000 Exxon Corp. 2,345,625
52,000 J & L Specialty Steel, Inc. 773,500
45,000 Triton Energy Ltd. 2,188,125
90,000 YPF Sociedad Anonima Class D ADR 2,025,000
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$ 10,232,250
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ENTERTAINMENT & LEISURE - 2.9%
40,000 ITT Corp. $ 2,650,000
20,000 Promus Hotel Corp. 592,500
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$ 3,242,500
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FINANCE & INSURANCE - 13.5%
63,540 Allstate Corp. $ 2,899,012
30,000 American International Group 2,958,750
80,000 Federal National Mortgage Association 2,680,000
15,000 Marsh & McLennan Cos., Inc. 1,447,500
50,000 MGIC Investment Corp. Wisc. 2,806,250
55,000 Progressive Corp. 2,543,750
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$ 15,335,262
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FOREST PRODUCTS - 2.5%
75,000 Rayonier Inc. $ 2,850,000
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HEALTHCARE - 7.4%
20,000 Astra AB A Shares $ 875,000
30,000 Astra AB B Shares 1,306,608
50,000 Columbia/HCA Healthcare Corp. 2,668,750
20,000 Johnson & Johnson Co. 990,000
58,000 Pharmacia & Upjohn Inc. 2,573,750
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$ 8,414,108
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HOUSING - 1.3%
50,000 Newell Co. $ 1,531,250
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PUBLISHING - 3.5%
30,000 Dow Jones & Co., Inc. $ 1,252,500
60,000 McGraw-Hill, Inc. 2,745,000
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$ 3,997,500
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REITS - 4.5%
30,000 Beacon Properties Corp. $ 768,750
20,000 Equity Residential Properties Trust 657,500
20,000 Highwood Properties, Inc. 552,500
40,000 Nationwide Health Properties, Inc. 845,000
10,000 Post Properties, Inc. 353,750
18,000 Redwood Trust, Inc. 504,000
20,000 ROC Communities, Inc. 477,500
20,000 Sun Communities, Inc. 537,500
14,200 Trinet Corporate Realty Trust, Inc. 411,800
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$ 5,108,300
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RETAIL - 2.4%
45,000 Melville Corp. $ 1,822,500
20,000 Sears Roebuck & Co. 972,500
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$ 2,795,000
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SEMICONDUCTORS - 2.3%
35,000 Intel Corp. $ 2,570,313
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TELECOMMUNICATIONS - 4.5%
10,000 Ameritech Corp. $ 593,750
25,000 AT&T Corp. 1,550,000
80,000 Frontier Corp. 2,450,000
10,000 SBC Communications, Inc. 492,500
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$ 5,086,250
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TELECOMMUNICATIONS
EQUIPMENT - 3.1%
95,000 Nokia Corp. $ 3,515,000
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TOTAL COMMON STOCKS
(IDENTIFIED COST, $83,298,651) $101,652,282
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CONVERTIBLE PREFERRED STOCKS - 5.2%
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10,000 Ford Motor Co., 8.4s $ 1,060,000
140,000 Freeport McMoRan Copper & Gold, 5% 3,815,000
10,000 Tejas Gas Corp., 5.25s 500,000
10,000 Valero Energy Corp., 6.5s 525,000
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TOTAL CONVERTIBLE PREFERRED STOCKS
(IDENTIFIED COST, $4,782,860) $ 5,900,000
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CONVERTIBLE BONDS - 2.9%
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FACE AMOUNT
(000 OMITTED) SECURITY VALUE
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$1,920 INCO Ltd., 5.75s, 7/1/04 $ 2,416,800
840 Scandinavian Broadcasting
System, 7.25s, 8/1/05 904,050
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TOTAL CONVERTIBLE BONDS
(IDENTIFIED COST, $2,840,000) $ 3,320,850
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CORPORATE BOND - 0.0%
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$ 50 H.P. Hood & Son, 7.50s, 2/1/01 $ 39,400
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TOTAL CORPORATE BONDS
(IDENTIFIED COST, $50,000) $ 39,400
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SHORT TERM INVESTMENTS - 1.0%
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$1,122 Associates Corp. of North America,
5.51s, 7/1/96 $ 1,122,000
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TOTAL SHORT TERM INVESTMENTS
AT AMORTIZED COST $ 1,122,000
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TOTAL INVESTMENTS - 98.5%
(IDENTIFIED COST, $92,093,511) $112,034,532
OTHER ASSETS, LESS LIABILITIES - 1.5% 1,730,362
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NET ASSETS - 100% $113,764,894
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The accompanying notes are an integral part of the financial statements
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STOCK PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
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June 30, 1996 (Unaudited)
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ASSETS:
Investments, at value (Note 1A) (identified cost,
$92,093,511) $112,034,532
Cash 870,669
Receivable for investments sold 907,770
Interest receivable 82,309
Dividends receivable 206,025
Deferred organization expenses (Note 1D) 10,099
Tax reclaim receivable 21,656
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Total assets $114,133,060
LIABILITIES:
Payable for investments purchased $348,478
Payable to affiliate --
Trustees fees 2,187
Accrued expenses 17,501
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Total liabilities 368,166
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NET ASSETS applicable to investors' interest in Portfolio $113,764,894
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SOURCES OF NET ASSETS:
Net proceeds from capital contributions and
withdrawals $ 93,823,873
Unrealized appreciation of investments
(computed on the basis of identified cost) 19,941,021
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Total net assets $113,764,894
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The accompanying notes are an integral part of the financial statements
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STATEMENT OF OPERATIONS
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For the Six Months Ended June 30, 1996 (Unaudited)
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INVESTMENT INCOME:
Interest $ 173,001
Dividends (net of withholding tax of, $7,315) 1,447,717
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Total income 1,620,718
Expenses --
Investment adviser fee (Note 3) $ 343,568
Compensation of Directors, not members of the
Investment Adviser's organization (Note 3) 4,996
Custodian fee (Note 1C) 36,329
Legal and accounting services 13,293
Amortization of organization expenses (Note 1D) 1,620
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Total expenses 399,806
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Net investment income 1,220,912
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (identified cost basis) --
Investment transactions $8,890,275
Written option transactions 122,298
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Net realized gain $9,012,573
Change in unrealized appreciation on investments (1,336,032)
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Net realized and unrealized gain on
investments $7,676,541
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Net increase in net assets resulting from operations $8,897,453
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The accompanying notes are an integral part of the financial statements
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STATEMENTS OF CHANGES IN NET ASSETS
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SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995
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INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 1,220,912 $ 2,228,398
Net realized gain on investment
transactions 9,012,573 10,222,803
Change in unrealized appreciation of
investments (1,336,032) 14,953,494
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Net increase in net assets resulting from
operations $ 8,897,453 $ 27,404,695
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Capital transactions --
Contributions $ 6,452,420 $ 13,753,042
Withdrawals (9,302,254) (18,959,497)
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Decrease in net assets resulting from
capital transactions $ (2,849,834) $ (5,206,455)
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Total increase in net assets $ 6,047,619 $ 22,198,240
NET ASSETS:
At beginning of period 107,717,275 85,519,035
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At end of period $113,764,894 $107,717,275
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The accompanying notes are an integral part of the financial statements
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SUPPLEMENTARY DATA
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SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1996 ----------------------
(UNAUDITED) 1995 1994*
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RATIOS (to average daily net assets):
Expenses 0.73%+ 0.75% 0.73%+
Net investment income 2.23%+ 2.30% 2.45%+
PORTFOLIO TURNOVER 61% 108% 28%
AVERAGE COMMISSION RATE PAID(1) $0.060 -- --
+ Computed on an annualized basis.
* For the period from the start of business, August 1, 1994 to December 31,
1994.
(1) Average commission rate paid is computed by dividing the total dollar
amount of commissions paid during the fiscal year by the total number of
shares purchased and sold during the fiscal year for which commissions were
charged. For fiscal years beginning on or after September 1, 1995, a Fund
is required to disclose its average commission rate per share for security
trades on which commissions are charged.
The accompanying notes are an integral part of the financial statements
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
(UNAUDITED)
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(1) SIGNIFICANT ACCOUNTING POLICIES
Stock 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 May 1, 1992. The Declaration of
Trust permits the Trustees to issue beneficial interests in the Portfolio. The
following is a summary of significant accounting policies of the Portfolio. The
policies are in conformity with generally accepted accounting principles.
A. SECURITY VALUATIONS -- Investments in securities traded on a national
securities exchange or in the NASDAQ National Market are valued on the basis of
the last reported sales prices on the last business day of the period. If no
sale is reported on that date, a security is valued, if quoted on such a day, at
not lower than the old bid price nor higher than the asked prices. Prices on
such exchanges will not be used for valuing debt securities if in the Trustees
judgment, some other valuation method more accurately reflects the fair market
value of such a security. Securities for which over-the-counter market
quotations are readily available are valued on the basis of the mean between the
last bid and asked prices. Short-term securities are valued at cost, which
approximates market value. All other securities and assets are appraised to
reflect their fair value as determined in good faith by the Trustees.
B. INCOME TAXES -- The Portfolio is 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
ultimately responsible for the payment of any taxes. 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 Code) in order for its investors to satisfy them. The Portfolio will
allocate at least annually among its investors each investors' distributive
share of the Portfolio's net investment income, net realized capital gains, and
any other items of income, gain, loss, deduction or credit.
C. EXPENSE REDUCTION -- The Fund has entered into an arrangement with its
custodian agent whereby interest earned on uninvested cash balances are used to
offset custody fees. All significant reductions are reported as a reduction of
expenses in the Statement of Operations.
D. DEFERRED ORGANIZATION EXPENSES -- Costs incurred by the Portfolio in
connection with its organization are being amortized on the straight-line basis
over five years.
E. OTHER -- Investment transactions are accounted for on the date the
investments are purchased or sold. Dividend income is recorded on the
ex-dividend date. Realized gains and losses on the sale of investments are
determined on the identified cost basis.
F. WRITTEN OPTIONS -- The Fund may write call or put options for which premiums
are received and are recorded as liabilities, and are subsequently adjusted to
the current value of the options written. Premiums received from writing options
which expire are treated as realized gains. Premiums received from writing
options which are exercised or are closed are offset against the proceeds or
amount paid on the transaction to determine the realized gain or loss. If a put
option is exercised, the premium reduces the cost basis of the securities
purchased by the Fund. The Fund as a writer of an option may have no control
over whether the underlying securities may be sold (call) or purchased (put) and
as a result bears the market risk of an unfavorable change in the price of the
securities underlying the written option.
G. USE OF ESTIMATES -- The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expense during the reporting period. Actual results could differ
from those estimates.
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H. INTERIM FINANCIAL INFORMATION -- The interim financial statements relating to
June 30, 1996 and for the six month period then ended have not been audited by
independent certified public accountants, but in the opinion of the Fund's
management, reflect all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the financial statements.
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(2) INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than short-term obligations,
aggregrated $65,842,401 and $65,890,358, respectively.
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(3) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The investment adviser fee is earned by Boston Management and Research (BMR), a
wholly-owned subsidiary of Eaton Vance Management (EVM), as compensation for
management and investment advisory services rendered to the Portfolio. The fee
is at the annual rate of 5/8 of 1% of average daily net assets. For the six
months ended June 30, 1996, the fee amounted to $343,568. Except as to Trustees
of the Portfolio who are not members of EVM's or BMR's organization, officers
and Trustees receive remuneration for their services to the Portfolio out of
such investment adviser fee. Certain of the officers and Trustees of the
Portfolio are officers and directors/trustees of the above organizations.
Trustees of the Portfolio that are not affiliated with the Investment Adviser
may elect to defer receipt of all or a percentage of their annual fees in
accordance with the terms of the Trustees Deferred Compensation Plan. For the
six months ended June 30, 1996, no significant amounts have been deferred.
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(4) LINE OF CREDIT
The Portfolio participates with other portfolios and funds managed by BMR and
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. At June 30, 1996, the Fund did
not have an outstanding balance pursuant to the line of credit.
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(5) FEDERAL INCOME TAX BASIS OF INVESTMENTS
The cost and unrealized appreciation/depreciation in value
of the investments owned at June 30, 1996, as computed on a federal income tax
basis, are as follows:
Aggregate cost $92,093,511
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Gross unrealized appreciation $20,762,003
Gross unrealized depreciation 820,982
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Net unrealized appreciation $19,941,021
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(6) FINANCIAL INSTRUMENTS
The Fund regularly trades in financial instruments with off-balance-sheet risk
in the normal course of its investing activities and to assist in managing
exposure to market risks such as interest rates and foreign currency exchange
rates. These financial instruments include written options. The notational or
contractual amounts of these instruments represent the investment the Fund 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 insruments is meaningful only when all related and
offsetting transactions are considered. A summary of obligations under these
financial instruments at June 30, 1996 is as follows:
Written Option Transactions
Transactions in written options for the six months ended June 30, 1996 were as
follows:
PRINCIPAL AMOUNTS
OF CONTRACTS
(000 OMITTED) PREMIUMS
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Outstanding, beginning of period -- --
Options written (40) $(122,298)
Options exercised 30 89,872
Options expired 10 32,426
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Outstanding, end of period 0 0
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INVESTMENT MANAGEMENT FOR STOCK PORTFOLIO
OFFICERS TRUSTEES
JAMES B. HAWKES DONALD R. DWIGHT
President, Trustee President, Dwight Partners, Inc.
Chairman, Newspapers of
DUNCAN W. RICHARDSON New England, Inc.
Vice President and Portfolio Manager
SAMUEL L. HAYES, III
JAMES L. O'CONNOR Jacob H. Schiff Professor of
Treasurer Investment Banking, Harvard
University Graduate School of
THOMAS OTIS Business Administration
Secretary
NORTON H. REAMER
President and Director,
United Asset Management
Corporation
JOHN L. THORNDIKE
Director, Fiduciary Company
Incorporated
JACK L. TREYNOR
Investment Adviser and Consultant
