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The Eaton Vance Special Investment Trust
For the Special Investment Portfolio
[Logo]
Semi-Annual Shareholder Report
June 30, 1996
Investment Adviser of Special Investment 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 Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
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SPECIAL INVESTMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1996
(UNAUDITED)
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COMMON STOCKS - 102.2%
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NAME OF COMPANY SHARES VALUE
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BEVERAGES - 0.9%
PepsiCo Inc. 20,000 $ 707,500
International snack food, restaurant and -----------
beverages.
BUSINESS PRODUCTS & SERVICES - 11.4%
BISYS Group, Inc.* 22,000 $ 830,500
Services financial institutions with
computer, administrative and marketing
support data processing services.
Ceridan Corp. 40,000 2,020,000
Provides payroll processing and other
employer services, media and market
research.
Danka Business Systems PLC, ADR 20,000 585,000
An independent provider of maintenance and
service for office copying machines.
FIserv Incorporated* 93,500 2,805,000
Provider of data processing services to
banks and savings institutions, benefiting
from outsourcing trend.
G&K Services, Inc. 42,200 1,202,700
Rents and launders uniforms and other
textile products.
Intuit Inc. 5,000 236,250
Developer of financial software products.
Metromail Corp. 39,000 872,625
Sells consumer info, proprietary software
and reference services.
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$ 8,552,075
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COMMUNICATIONS - 9.7%
Comcast Corp. 80,000 $ 1,470,000
Cable TV and Cellular telephone operator.
Intelcom Group, Inc. 50,000 1,250,000
Provider of alternative access
telecommunication services and
international satellite uplink teleports.
Jacor Communications, Inc. 35,000 1,080,625
Operator of radio and TV satations.
MFS Communications Co., Inc.* 40,000 1,505,000
Provider of fiber-optic based
telecommunications services primarily to
businesses.
Nokia Corp. 35,000 1,295,000
International wireless handset and
infrastructure equipment manufacturer.
Tele-Communications International, Inc. 40,000 705,000
Operates international cable TV systems.
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$ 7,305,625
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COMPUTER SOFTWARE - 3.5%
Banyan Inc.* 60,000 $ 435,000
Provider of networking software products for
large, complex computer networks.
3Com Corp. 15,000 686,250
Designs, manufactures and distributes
intelligent hubs and other computer
networking products.
Davidson & Associates, Inc. 25,000 750,000
Developer and distributor of educational
software products.
Inso Corp. 15,000 785,625
Developer of software tools used for
proofing, reference and information
management.
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$ 2,656,875
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ELECTRONICS & INSTRUMENTATION - 8.6%
Cisco Systems, Inc.* 40,000 $ 2,265,000
Manufacturer of routers that connect
computer networks.
Intel Corp. 20,000 1,468,750
World's leading semiconductor manufacturer,
also produces microcomputer components,
modules and systems.
Linear Technology Corp. 20,000 600,000
Manufacturer of high performance linear
integrated circuits.
MEMC Electronic Materials, Inc. 25,000 968,750
Leading producer of silicon wafers used to
create integrated circuits.
Mentor Graphics Corp. 50,000 812,500
Developer of electronic design automation
systems used in complex electronic
products.
Xilinx Inc. 10,000 317,500
Supplier of programmable semiconductors.
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$ 6,432,500
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ENERGY - 7.3%
Anadarko Petroleum Corp. 50,000 $ 2,900,000
A leading independent company in oil and gas
exploration, development and production.
Belco Oil & Gas Corp. 12,500 443,750
Oil and gas exploration, development and
production.
Noble Drilling Corp. 48,000 666,000
Oil and gas well drilling.
Triton Energy Ltd. 30,000 1,458,750
International oil and gas exploration and
development.
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$ 5,468,500
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ENTERTAINMENT & LEISURE - 8.9%
Circus Circus Enterprises, Inc. 47,000 $ 1,927,000
Major casino facilities in Las Vegas. Also
operates hotels.
Gaylord Entertainment 36,750 1,038,188
Producer of The Nashville Network and
Country Music Television Network and
operator of the Opryland amusement park.
Harvey's Casino Resorts 10,000 212,500
Owner and operator of hotel casinos.
ITT Corp. 20,000 1,325,000
Operator of Sheraton hotels, Caesar's
Palace, resort casinos and Madison Square
Garden.
MGM Grand, Inc. 20,000 797,500
Operator of MGM Grand Hotel in Las Vegas.
Mirage Resorts, Inc. 25,000 1,350,000
Nevada based gaming resort operator.
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$ 6,650,188
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ENVIROMENTAL SERVICES - 3.9%
Sanfill Inc. 26,000 $ 1,280,500
Operator of primarily solid-waste facilities
in 16 states.
United Waste Systems, Inc. 20,000 645,000
Provider of collection and solid-waste
disposal services primarily in secondary
markets.
U.S.A. Waste Services, Inc. 35,000 1,036,875
Operator of solid-waste lands fills and
collection services, integrating several
large recent acquisitions.
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$ 2,962,375
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FINANCE - 10.6%
Federal National Mortgage Association 120,000 $ 4,020,000
Leading factor in the secondary mortgage
market.
Franklin Resources, Inc. 20,000 1,220,000
One of the largest mutual fund organizations
in the U.S.
MBNA Corp. 30,000 855,000
Bank holding company and world's leading
issuer of Gold MasterCards.
T. Rowe Price Associates, Inc. 60,000 1,845,000
Investment adviser to mutual funds,
institutions and individuals.
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$ 7,940,000
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HEALTHCARE - 10.4%
Arterial Vascular Engineering, Inc. 2,100 $ 76,125
Manufacturers coronary related medical
devices.
Astra AB ADR Series B 25,000 1,088,840
Swedish based, multinational pharmaceutical
company.
Boston Scientific Corp.* 50,000 2,250,000
Medical device manufacturer focusing
primarily on disposable products in less
invasive surgery procedures.
General Surgical Innovations, Inc. 5,000 76,250
Developer of surgical devices.
MiniMed Inc. 60,000 1,785,000
Developer and manufacturer of medical
devices focusing on diabetics.
Pfizer Inc. 10,000 713,750
International health care and pharmaceutical
products.
Sofamor Danek Group, Inc. 55,000 1,526,250
Leading developer/manufacturer of spinal
implant devices. Company markets products
internationally.
Vitalink Pharmacy Services, Inc.* 12,500 290,625
Provider of pharmacy services to nursing
homes and sub-acute care medical
facilities.
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$ 7,806,840
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HOTELS & RESTAURANTS - 4.6%
Applebee's International, Inc. 25,000 $ 803,125
Franchisor and operator of casual themed
restaurants.
Extended Stay America, Inc. 19,000 598,500
Owner and operator of longer stay lodging
facilities.
LaQuinta Inns, Inc. 15,000 502,500
Owner/operator of modestly priced lodging
chain.
Promus Hotel Corp. 10,000 296,250
Owner and operator of Embassy Suite and
Hampton Inn hotels.
Red Roof Inns, Inc. 55,000 776,875
Owns and operates economy hotels in U.S.
Sun International Hotels Ltd. 10,000 485,000
International operator of resort and casino
hotels.
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$ 3,462,250
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INDUSTRIAL PRODUCTS - 1.3%
Greenfield Industries, Inc. 30,000 $ 990,000
A leading manufacturer of expendable cutting -----------
tools and related products used in
industrial applications.
INSURANCE - 8.5%
American International Group 15,000 $ 1,479,375
One of the world's leading insurance
companies, operating in 130 countries.
Mutual Risk Management Ltd. 53,332 1,666,666
Specialty insurer focusing on workmen's
compensation.
PMI Group, Inc. 23,000 977,500
Private mortgage insurer.
Progressive Corp. 30,000 1,387,500
Insurer focusing on high risk and standard
auto coverage.
Renaissance Re Holdings Ltd. 15,500 476,625
Provider of catastrophy reinsurance
services.
Terra Nova Holdings 25,000 400,000
Provides property, casualty, marine and life
insurance.
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$ 6,387,666
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PUBLISHING - 3.4%
Providence Journal Co. Class A 86,100 $ 1,323,787
Operates television stations and publishes
newspapers.
Scholastic Corp.* 20,000 1,240,000
Publisher/distributor of children's books.
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$ 2,563,787
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RETAILING - 4.9%
Consolidated Stores Corp.* 60,000 $ 2,205,000
Chain of close-out merchandise stores
operating primarily under the Odd/Big Lots
name.
Home Depot Inc. 20,000 1,080,000
Operator of a chain of retail warehouse-type
stores selling building supply and home
improvement products.
Lowes Companies 10,000 361,250
Retailer of building materials and supplies.
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$ 3,646,250
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SPECIALTY CHEMICALS - 2.8%
Great Lakes Chemical Corp. 14,200 $ 883,950
Leading producer of flame retardant and
specialty intermediate chemicals.
Millipore Corp. 30,000 1,256,250
Manufacturer of membrane technology products
used for chemical analysis and purification.
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$ 2,140,200
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TRANSPORTATION - 1.5%
Southwest Airlines Co. 40,000 $ 1,165,000
Discount airline expanding throughout the U.S. -----------
TOTAL COMMON STOCKS
(IDENTIFIED COST, $51,277,639) $76,837,631
OTHER ASSETS, LESS LIABILITIES - (2.2%) (1,618,717)
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TOTAL NET ASSETS - 100% $75,218,914
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*Non-income producing security.
The accompanying notes are an integral part of the financial statements
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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,
$51,277,639) $76,837,631
Cash 886
Receivable for investments sold 140,081
Dividends receivable 25,385
Deferred organization expenses (Note 1E) 9,744
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Total assets $77,013,727
LIABILITIES:
Payable for investments purchased $1,414,000
Demand note payable 365,000
Payable to affiliate --
Trustees' fees 1,700
Accrued expenses 14,113
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Total liabilities 1,794,813
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NET ASSETS applicable to investors' interest in Portfolio $75,218,914
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SOURCES OF NET ASSETS:
Net proceeds from capital contributions and
withdrawals $49,658,922
Unrealized appreciation of investments (computed
on the basis of identified cost) 25,559,992
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Total net assets $75,218,914
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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:
Dividend income (net of foreign taxes, $242) $ 168,281
Interest income 163,945
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Total income $ 332,226
Expenses --
Investment adviser fee (Note 3) $ 235,242
Compensation of Trustees not members of the
Investment Adviser's organization (Note 3) 3,550
Custodian fees (Note 1C) 28,220
Legal and accounting services 10,547
Amortization of organization expenses (Note 1E) 1,574
Miscellaneous 2,925
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Total expenses 282,058
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Net investment income $ 50,168
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments (identified cost
basis) $3,746,545
Change in unrealized appreciation on investments 4,892,412
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Net realized and unrealized gain on
investments 8,638,957
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Net increase in net assets resulting from operations $8,689,125
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The accompanying notes are an integral part of the financial statements
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STATEMENT OF CHANGES IN NET ASSETS
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SIX MONTHS
ENDED
JUNE 30, 1996 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1995
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INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 50,168 $ 134,736
Net realized gain on investment
transactions 3,746,545 4,131,300
Change in unrealized appreciation of
investments 4,892,412 10,473,926
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Net increase in net assets from
operations $ 8,689,125 $ 14,739,962
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Capital transactions--
Contributions $ 4,992,539 $ 14,400,870
Withdrawals (12,403,025) (19,642,929)
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Decrease in net assets resulting from
capital transactions $ (7,410,486) $ (5,242,059)
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Total increase in net assets $ 1,278,639 $ 9,497,903
NET ASSETS:
At beginning of year 73,940,275 64,442,372
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At end of year $ 75,218,914 $ 73,940,275
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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 (As a percentage
of average net assets):
Expenses 0.75%+ 0.77% 0.74%+
Net investment income 0.13%+ 0.19% 0.20%+
PORTFOLIO TURNOVER 38% 81% 19%
AVERAGE COMMISSION RATE
PAID (1) $0.058 -- --
+ 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
Special Investment 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 Additional Information.
D. 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.
E. DEFERRED ORGANIZATION EXPENSES -- Costs incurred by the Portfolio in
connection with its organization are being amortized on the straight-line
basis over five years.
F. 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 revenue and expense during the reporting period. Actual results
could differ from those estimates.
G. 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 the fair presentation of the financial statements.
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(2) INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than short-term obligations,
aggregrated $26,898,510 and $26,973,399, 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 $235,242. 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 $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 had an outstanding balance pursuant to the line of credit of
$365,000.
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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 $51,277,639
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Gross unrealized appreciation $26,648,301
Gross unrealized depreciation 1,088,309
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Net unrealized appreciation $25,559,992
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INVESTMENT MANAGEMENT FOR SPECIAL EQUITIES PORTFOLIO
OFFICERS TRUSTEES
JAMES B. HAWKES M. DOZIER GARDNER
President, Trustee President, Eaton Vance Management
CLIFFORD H. KRAUSS DONALD R. DWIGHT
Vice President and President, Dwight Partners, Inc.
Portfolio Manager Chairman, Newspapers of New England,
Inc.
JAMES L. O'CONNOR
Treasurer SAMUEL L. HAYES, III
Jacob H. Schiff Professor of
THOMAS OTIS Investment Banking,
Secretary Harvard Unversity Graduate School
of Business Administration
NORTON H. REAMER
President and Director, United Asset
Management Corporation
JOHN L. THORNKIKE
Vice President and Director,
Fiduciary Company Incorporated
JACK L. TREYNOR
Investment Adviser and Consultant
