<PAGE>
Stock Portfolio as of June 30, 1997
PORTFOLIO OF INVESTMENTS (Unaudited)
<TABLE>
<CAPTION>
Common Stocks-- 91.1%
Security Shares Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Advertising -- 0.5%
- --------------------------------------------------------------------------------
Omnicom Group, Inc. 10,000 $ 616,250
- --------------------------------------------------------------------------------
$ 616,250
- --------------------------------------------------------------------------------
Aerospace and Defense -- 2.4%
- --------------------------------------------------------------------------------
Boeing Co. 62,000 $ 3,289,875
- --------------------------------------------------------------------------------
$ 3,289,875
- --------------------------------------------------------------------------------
Auto and Parts -- 0.4%
- --------------------------------------------------------------------------------
Magna International Class A 10,000 $ 601,875
- --------------------------------------------------------------------------------
$ 601,875
- --------------------------------------------------------------------------------
Banks - Regional -- 1.6%
- --------------------------------------------------------------------------------
BankBoston Corp. 15,000 $ 1,080,938
Fleet Financial Group, Inc. 18,000 1,138,500
- --------------------------------------------------------------------------------
$ 2,219,438
- --------------------------------------------------------------------------------
Banks and Money Centers -- 2.2%
- --------------------------------------------------------------------------------
Bankers Trust New York Corp. 35,000 $ 3,045,000
- --------------------------------------------------------------------------------
$ 3,045,000
- --------------------------------------------------------------------------------
Banks and Money Services -- 2.5%
- --------------------------------------------------------------------------------
Citicorp 28,332 $ 3,415,777
- --------------------------------------------------------------------------------
$ 3,415,777
- --------------------------------------------------------------------------------
Beverages -- 0.7%
- --------------------------------------------------------------------------------
PepsiCo, Inc. 25,000 $ 939,063
- --------------------------------------------------------------------------------
$ 939,063
- --------------------------------------------------------------------------------
Broadcasting and Cable -- 0.4%
- --------------------------------------------------------------------------------
Comcast Corp. Class A 25,000 $ 534,375
- --------------------------------------------------------------------------------
$ 534,375
- --------------------------------------------------------------------------------
Chemicals -- 2.8%
- --------------------------------------------------------------------------------
Monsanto Corp. 90,000 $ 3,875,625
- --------------------------------------------------------------------------------
$ 3,875,625
- --------------------------------------------------------------------------------
Communications Equipment -- 1.6%
- --------------------------------------------------------------------------------
Nokia Corp., ADR 30,000 $ 2,212,500
- --------------------------------------------------------------------------------
$ 2,212,500
- --------------------------------------------------------------------------------
Containers and Packaging -- 2.3%
- --------------------------------------------------------------------------------
Crown Cork & Seal, Inc. 60,000 $ 3,206,250
- --------------------------------------------------------------------------------
$ 3,206,250
- --------------------------------------------------------------------------------
Drugs -- 8.0%
- --------------------------------------------------------------------------------
Elan Corp., PLC ADR 65,000 $ 2,941,250
- --------------------------------------------------------------------------------
Genzyme Corp. Class A 35,000 969,063
- --------------------------------------------------------------------------------
Lilly & Co. 32,000 3,498,000
- --------------------------------------------------------------------------------
Pfizer, Inc. 10,000 1,195,000
- --------------------------------------------------------------------------------
Warner-Lambert Co. 20,000 2,485,000
- --------------------------------------------------------------------------------
$ 11,088,313
- --------------------------------------------------------------------------------
Electric Utilities -- 0.0%
- --------------------------------------------------------------------------------
Electric De Portugal ADR 400 $ 14,400
- --------------------------------------------------------------------------------
$ 14,400
- --------------------------------------------------------------------------------
Electronics - Semiconductors -- 1.0%
- --------------------------------------------------------------------------------
Intel Corp. 10,000 $ 1,418,125
- --------------------------------------------------------------------------------
$ 1,418,125
- --------------------------------------------------------------------------------
Financial - Miscellaneous -- 3.2%
- --------------------------------------------------------------------------------
Federal National Mortgage
Association 80,000 $ 3,490,000
- --------------------------------------------------------------------------------
MGIC Investment Corp. 20,000 958,750
- --------------------------------------------------------------------------------
$ 4,448,750
- --------------------------------------------------------------------------------
Foods -- 7.0%
- --------------------------------------------------------------------------------
Conagra Inc. 27,000 $ 1,731,375
- --------------------------------------------------------------------------------
Dean Foods Co. 75,000 3,028,125
- --------------------------------------------------------------------------------
McCormick & Co., Inc. 30,000 759,375
- --------------------------------------------------------------------------------
Unilever ADR 19,000 4,141,999
- --------------------------------------------------------------------------------
$ 9,660,874
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
9
<PAGE>
Stock Portfolio as of June 30, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
<TABLE>
<CAPTION>
Security Shares Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Household Products -- 2.5%
- --------------------------------------------------------------------------------
Gillette Co. 15,640 $ 1,481,890
Newell Co. 50,000 1,981,250
- --------------------------------------------------------------------------------
$ 3,463,140
- --------------------------------------------------------------------------------
Information Services -- 3.8%
- --------------------------------------------------------------------------------
Automatic Data Processing, Inc. 30,000 $ 1,410,000
Reuters Holdings PLC ADR 60,000 3,781,872
- --------------------------------------------------------------------------------
$ 5,191,872
- --------------------------------------------------------------------------------
Insurance -- 10.9%
- --------------------------------------------------------------------------------
Allstate Corp. 49,540 $ 3,616,420
American International Group, Inc. 18,000 2,688,750
Lincoln National Corp. 25,000 1,609,375
Marsh & McLennan Cos., Inc. 50,000 3,568,750
Nationwide Financial Service 17,000 451,563
Progressive Corp. 35,000 3,045,000
- --------------------------------------------------------------------------------
$ 14,979,858
- --------------------------------------------------------------------------------
Leisure Equipment -- 0.4%
- --------------------------------------------------------------------------------
Sturm, Ruger & Co., Inc. 30,000 $ 588,750
- --------------------------------------------------------------------------------
$ 588,750
- --------------------------------------------------------------------------------
Lodging and Gaming -- 2.7%
- --------------------------------------------------------------------------------
MGM Grand, Inc. 30,000 $ 1,110,000
Mirage Resorts, Inc. 35,000 883,750
Promus Hotel Corp. 45,000 1,743,750
- --------------------------------------------------------------------------------
$ 3,737,500
- --------------------------------------------------------------------------------
Manufacturing -- 1.6%
- --------------------------------------------------------------------------------
Corning, Inc. 40,000 $ 2,225,000
- --------------------------------------------------------------------------------
$ 2,225,000
- --------------------------------------------------------------------------------
Medical Products -- 3.6%
- --------------------------------------------------------------------------------
Baxter International, Inc. 65,000 $ 3,396,250
Johnson & Johnson Co. 25,000 1,609,375
- --------------------------------------------------------------------------------
$ 5,005,625
- --------------------------------------------------------------------------------
Metals and Minerals -- 1.1%
- --------------------------------------------------------------------------------
J & L Specialty Steel, Inc. 120,000 $ 1,440,000
- --------------------------------------------------------------------------------
$ 1,440,000
- --------------------------------------------------------------------------------
Oil and Gas - Exploration and Production -- 5.2%
- --------------------------------------------------------------------------------
Anadarko Petroleum Corp. 20,000 $ 1,200,000
British Petroleum, PLC ADR 30,000 2,246,250
Triton Energy Ltd. 60,000 2,748,750
USX-Marathon Group 35,000 1,010,625
- --------------------------------------------------------------------------------
$ 7,205,625
- --------------------------------------------------------------------------------
Paper and Forest Products -- 0.3%
- --------------------------------------------------------------------------------
Rayonier, Inc. 10,000 $ 420,625
- --------------------------------------------------------------------------------
$ 420,625
- --------------------------------------------------------------------------------
Photography -- 1.7%
- --------------------------------------------------------------------------------
Eastman Kodak Co. 30,000 $ 2,302,500
- --------------------------------------------------------------------------------
$ 2,302,500
- --------------------------------------------------------------------------------
Publishing -- 4.3%
- --------------------------------------------------------------------------------
Dow Jones & Co., Inc. 60,000 $ 2,411,250
McGraw-Hill, Inc. 60,000 3,528,750
- --------------------------------------------------------------------------------
$ 5,940,000
- --------------------------------------------------------------------------------
REITS -- 3.1%
- --------------------------------------------------------------------------------
Beacon Properties Corp. 20,000 $ 667,500
Chateau Communities, Inc. 10,000 286,250
Equity Residential Properties Trust 10,000 475,000
Highwood Properties, Inc. 20,000 640,000
Nationwide Health Properties, Inc. 2,000 44,000
Post Properties, Inc. 13,000 527,313
Storage USA, Inc. 15,000 573,750
Sun Communities, Inc. 20,000 671,250
Trinet Corporate Realty Trust, Inc. 10,000 330,625
- --------------------------------------------------------------------------------
$ 4,215,688
- --------------------------------------------------------------------------------
Retail - Food and Drug -- 3.0%
- --------------------------------------------------------------------------------
CVS Corp. 80,000 $ 4,100,000
- --------------------------------------------------------------------------------
$ 4,100,000
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
10
<PAGE>
Stock Portfolio as of June 30, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
<TABLE>
<CAPTION>
Security Shares Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Retail - Specialty and Apparel -- 5.1%
- --------------------------------------------------------------------------------
Office Depot 150,000 $ 2,915,625
The Home Depot, Inc. 60,000 4,136,249
- --------------------------------------------------------------------------------
$ 7,051,874
- --------------------------------------------------------------------------------
Specialty Chemicals and Materials -- 3.5%
- --------------------------------------------------------------------------------
Ecolab, Inc. 50,000 $ 2,387,500
Potash Corp. of Saskatchewan 32,000 2,402,000
- --------------------------------------------------------------------------------
$ 4,789,500
- --------------------------------------------------------------------------------
Telephone Utilities -- 1.7%
- --------------------------------------------------------------------------------
GTE Corp. 25,000 $ 1,096,875
SBC Communications, Inc. 20,000 1,237,500
- --------------------------------------------------------------------------------
$ 2,334,375
- --------------------------------------------------------------------------------
Total Common Stocks
(identified cost, $95,655,812) $ 125,578,422
- --------------------------------------------------------------------------------
</TABLE>
Convertible Preferred Stocks -- 4.2%
<TABLE>
<CAPTION>
Security Shares Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Insurance -- 0.8%
- --------------------------------------------------------------------------------
Sun America, Inc., 3.188% 25,000 $ 1,090,625
- --------------------------------------------------------------------------------
$ 1,090,625
- --------------------------------------------------------------------------------
Metals - Gold -- 3.0%
- --------------------------------------------------------------------------------
Freeport McMoRan Copper & Gold, 5% 150,000 $ 4,106,249
- --------------------------------------------------------------------------------
$ 4,106,249
- --------------------------------------------------------------------------------
Natural Gas Utilities -- 0.4%
- --------------------------------------------------------------------------------
Tejas Gas Corp., 5.25% 10,000 $ 530,000
- --------------------------------------------------------------------------------
$ 530,000
- --------------------------------------------------------------------------------
Total Convertible Preferred Stocks
(identified cost, $4,736,811) $ 5,726,874
- --------------------------------------------------------------------------------
</TABLE>
Convertible Bonds-- 3.1%
<TABLE>
<CAPTION>
Principal
Amount
Security (000's Omitted) Value
- --------------------------------------------------------------------------------
<S> <C> <C>
INCO Ltd., 5.75%, 7/1/04 $ 2,920 $ 3,460,200
Scandinavian Broadcasting System,
7.25%, 8/1/05 840 843,150
- --------------------------------------------------------------------------------
Total Convertible Bonds
(identified cost, $4,054,999) $ 4,303,350
- --------------------------------------------------------------------------------
</TABLE>
Corporate Bonds -- 0.0%
<TABLE>
<CAPTION>
Principal
Amount
Security (000's Omitted) Value
- --------------------------------------------------------------------------------
<S> <C> <C>
H. P. Hood & Son, 7.50%, 2/1/01 $ 50 $ 39,400
- --------------------------------------------------------------------------------
Total Corporate Bonds
(identified cost, $50,000) $ 39,400
- --------------------------------------------------------------------------------
</TABLE>
Commercial Paper -- 2.7%
<TABLE>
<CAPTION>
Principal
Amount
Security (000's Omitted) Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Cut Group, 6.25%, 7/1/97 $ 3,718 $ 3,718,000
- --------------------------------------------------------------------------------
Total Commercial Paper
(amortized cost, $3,718,000) $ 3,718,000
- --------------------------------------------------------------------------------
Total Investments -- 101.1%
(identified cost, $108,215,622) $ 139,366,046
- --------------------------------------------------------------------------------
Other Assets, Less Liabilities -- (1.1)% $ (1,523,404)
- --------------------------------------------------------------------------------
Net Assets -- 100% $ 137,842,642
- --------------------------------------------------------------------------------
</TABLE>
ADR -- American Depositary Receipt
REIT -- Real Estate Investment Trust
See notes to financial statements
11
<PAGE>
Stock Portfolio as of June 30, 1997
FINANCIAL STATEMENTS (Unaudited)
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
As of June 30, 1997
Assets
- --------------------------------------------------------------------------------
<S> <C>
Investments, at value (Note 1A)
(identified cost, $108,215,622) $139,366,046
Cash 649
Receivable for investments sold 2,550,169
Dividends and interest receivable 282,555
Tax reclaim receivable 21,656
Deferred organization expenses (Note 1D) 6,832
- --------------------------------------------------------------------------------
Total assets $142,227,907
- --------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------
Payable for investments purchased $ 4,366,855
Payable to affiliate - Director's fees (Note 3) 2,200
Accrued expenses 16,210
- --------------------------------------------------------------------------------
Total liabilities $ 4,385,265
- --------------------------------------------------------------------------------
Net Assets applicable to investors' interest in Portfolio $137,842,642
- --------------------------------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------------------------------
Net proceeds from capital contributions and withdrawals $106,692,218
Net unrealized appreciation of investments (computed
on the basis of identified cost) 31,150,424
- --------------------------------------------------------------------------------
Total $137,842,642
- --------------------------------------------------------------------------------
</TABLE>
Statement of Operations
<TABLE>
<CAPTION>
For the Six Months Ended
June 30, 1997
Investment Income
- --------------------------------------------------------------------------------
<S> <C>
Dividends (net of withholding taxes, $1,354) $ 1,266,005
Interest income 210,500
- --------------------------------------------------------------------------------
Total income $ 1,476,505
- --------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------
Investment adviser fee (Note 3) $ 401,714
Compensation of Trustees not members of the
Investment Adviser's organization (Note 3) 4,585
Custodian fee 39,660
Legal and accounting services 11,901
Amortization of organization expenses (Note 1D) 1,629
Miscellaneous 1,930
- --------------------------------------------------------------------------------
Total expenses $ 461,419
- --------------------------------------------------------------------------------
Net investment income $ 1,015,086
- --------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) on Investments
- --------------------------------------------------------------------------------
Net realized gain --
Investment transactions (identified cost basis) $ 14,675,802
Options 61,335
- --------------------------------------------------------------------------------
Net realized gain on investments $ 14,737,137
- --------------------------------------------------------------------------------
Change in unrealized appreciation --
Investments (identified cost basis) $ 5,344,944
Options 181,789
- --------------------------------------------------------------------------------
Net change in unrealized appreciation $ 5,526,733
- --------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 20,263,870
- --------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 21,278,956
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
12
<PAGE>
Stock Portfolio as of June 30, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
Increase (Decrease) June 30, 1997 Year Ended
in Net Assets (Unaudited) December 31, 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
From operations --
Net investment income $ 1,015,086 $ 2,212,222
Net realized gain
on investments 14,737,137 14,716,162
Net change in unrealized
appreciation 5,526,733 4,346,638
- --------------------------------------------------------------------------------
Net increase in net assets
from operations $ 21,278,956 $ 21,275,022
- --------------------------------------------------------------------------------
Capital transactions --
Contributions $ 5,164,822 $ 9,663,514
Withdrawals (11,564,284) (15,692,663)
- --------------------------------------------------------------------------------
Net decrease in net assets
from capital transactions $ (6,399,462) $ (6,029,149)
- --------------------------------------------------------------------------------
Net increase in net assets $ 14,879,494 $ 15,245,873
- --------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------
At beginning of period $ 122,963,148 $ 107,717,275
- --------------------------------------------------------------------------------
At end of period $ 137,842,642 $ 122,963,148
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
13
<PAGE>
Stock Portfolio as of June 30, 1997
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 1997 -----------------------------------
(Unaudited) 1996 1995 1994*
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ratios to average daily net assets
- -----------------------------------------------------------------------------------------------------
Expenses 0.72%+ 0.73% 0.75% 0.73%+
Net investment income 1.59%+ 1.96% 2.30% 2.45%+
Portfolio Turnover 46% 114% 108% 28%
- -----------------------------------------------------------------------------------------------------
Average commission rate (per share)/(1)/ $0.0593 $0.0579 $ -- $ --
- -----------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* 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 were charged.
See notes to financial statements
14
<PAGE>
Stock Portfolio as of June 30, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited)
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 Investment Valuations -- Securities listed on foreign or U.S. securities
exchanges or in the NASDAQ National Market System generally are valued at
closing sale prices or, if there were no sales, at the mean between the
closing bid and asked prices on the exchange where such securities are
principally traded or on such National Market System. Unlisted or listed
securities for which closing sale prices are not available are valued at the
mean between the latest available bid and asked prices on the principal market
where the security was traded. An option is valued at the last sale price as
quoted on the principal exchange or board of trade on which such option or
contract is traded or, in the absence of a sale, at the mean between the last
bid and asked prices. Futures positions on securities or currencies are
generally valued at closing settlement prices. Short-term debt securities with
a remaining maturity of 60 days or less are valued at amortized cost. If
securities were acquired with a remaining maturity of more than 60 days, their
amortized cost value will be based on their value on the sixty-first day prior
to maturity. 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.
Securities for which market quotations are unavailable, including any security
the disposition of which is restricted under the Securities Act of 1933, and
other assets will be appraised at their fair value as determined in good faith
by or at the direction of the Trustees of the Portfolio.
B Federal 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 Internal Revenue 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 -- Investors Bank & Trust Company (IBT) 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. All significant credit balances
used to reduce the Portfolio's custodian fees 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 a trade date basis.
F Written Options -- The Portfolio 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 Portfolio. The Portfolio 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 income and expenses during the reporting period. Actual results
could differ from those estimates.
15
<PAGE>
Stock Portfolio as of June 30, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
H Interim Financial Information -- The interim financial statements relating
to June 30, 1997 and for the six month period then ended have not been audited
by independent certified public accountants, but in the opinion of the
Portfolio's management, reflect all adjustments, consisting only of normal
recurring adjustments, necessary for the fair presentation of the financial
statements.
2 Investments Transactions
------------------------------------------------------------------------------
Purchases and sales of investments, other than short-term obligations,
aggregated $57,181,765 and $56,907,937, respectively.
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, 1997, the fee amounted to $401,714. 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 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, 1997, no significant amounts have been deferred.
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 group of banks. The Portfolio may temporarily borrow from the line of
credit to satisfy redemption requests or settle investment transactions.
Interest is charged to each portfolio or fund based on its borrowings at an
amount above the banks adjusted certificate of deposit rate, Eurodollar rate
or federal funds rate. In addition, a fee computed at an annual rate of 0.15%
on the daily unused portion of the line of credit is allocated among the
participating Portfolios and funds at the end of each quarter. The Portfolio
did not have any significant borrowings or allocated fees during the six
months ended June 30, 1997.
5 Federal Income Tax Basis of Investments
------------------------------------------------------------------------------
The cost and unrealized appreciation/depreciation in value of the investments
owned at June 30, 1997, as computed on a federal income tax basis, were as
follows:
<TABLE>
<S> <C>
Aggregate cost $108,215,622
------------------------------------------------------------------------------
Gross unrealized appreciation $ 31,512,278
Gross unrealized depreciation (361,854)
------------------------------------------------------------------------------
Net unrealized appreciation $ 31,150,424
------------------------------------------------------------------------------
</TABLE>
6 Financial Instruments
------------------------------------------------------------------------------
The Portfolio 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
notional or contractual amounts of these instruments represent the investment
the Portfolio has in particular classes of financial instruments and do 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 June 30, 1997 is as follows:
<TABLE>
<CAPTION>
Number of
Contracts
(000's omitted) Premiums
------------------------------------------------------------------------------
<S> <C> <C>
Outstanding, beginning of period 100 $ 61,335
Options expired (100) $(61,335)
------------------------------------------------------------------------------
Outstanding, end of period - $ -
------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
Stock Portfolio as of June 30, 1997
INVESTMENT MANAGEMENT
Stock Portfolio
<TABLE>
<S> <C>
Officers Independent Trustees
James B. Hawkes Donald R. Dwight
President and Trustee President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
Duncan W. Richardson
Vice President and Samuel L. Hayes, III
Portfolio Manager Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate School of
James L. O'Connor Business Administration
Treasurer
Norton H. Reamer
Alan R. Dynner President and Director, United Asset
Secretary Management Corporation
John L. Thorndike
Formerly Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
</TABLE>
17
