<PAGE>
HIGH YIELD MUNICIPALS PORTFOLIO AS OF JULY 31, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 97.7%
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Assisted Living -- 5.4%
------------------------------------------------------------------------
$ 2,500 Arizona Health Facilities Authority, $ 2,168,475
(Care Institute, Inc. - Mesa),
7.625%, 1/1/26
1,000 Chester, PA, IDA, (Senior Life-Choice of 1,066,240
Kimberton), (AMT), 8.50%, 9/1/25
1,970 Chester, PA, IDA, (Senior Life-Choice of 2,030,873
Paoli, L.P.), (AMT), 8.05%, 1/1/24
1,585 Delaware PA, IDA, (Glen Riddle), (AMT), 1,700,467
8.625%, 9/1/25
1,000 Glen Cove, NY, IDA, (The Regency at Glen 310,120
Cove), 0.00%, 1/1/13
1,000 Glen Cove, NY, IDA, (The Regency at Glen 294,750
Cove), 0.00%, 7/1/13
1,000 Glen Cove, NY, IDA, (The Regency at Glen 280,060
Cove), 0.00%, 1/1/14
1,000 Glen Cove, NY, IDA, (The Regency at Glen 266,300
Cove), 0.00%, 7/1/14
1,000 Glen Cove, NY, IDA, (The Regency at Glen 253,070
Cove), 0.00%, 1/1/15
1,000 Glen Cove, NY, IDA, (The Regency at Glen 240,570
Cove), 0.00%, 7/1/15
1,000 Glen Cove, NY, IDA, (The Regency at Glen 228,680
Cove), 0.00%, 1/1/16
1,000 Glen Cove, NY, IDA, (The Regency at Glen 217,340
Cove), 0.00%, 7/1/16
1,000 Glen Cove, NY, IDA, (The Regency at Glen 206,480
Cove), 0.00%, 1/1/17
1,000 Glen Cove, NY, IDA, (The Regency at Glen 196,290
Cove), 0.00%, 7/1/17
1,000 Glen Cove, NY, IDA, (The Regency at Glen 186,570
Cove), 0.00%, 1/1/18
1,000 Glen Cove, NY, IDA, (The Regency at Glen 177,310
Cove), 0.00%, 7/1/18
1,000 Glen Cove, NY, IDA, (The Regency at Glen 168,560
Cove), 0.00%, 1/1/19
1,000 Glen Cove, NY, IDA, (The Regency at Glen 160,210
Cove), 0.00%, 7/1/19
3,740 Illinois Development Finance Authority, 3,848,759
(Care Institute, Inc.), 7.80%, 6/1/25
3,500 New Jersey EDA, (Chelsea at East 3,602,760
Brunswick), (AMT), 8.25%, 10/1/20
------------------------------------------------------------------------
$ 17,603,884
------------------------------------------------------------------------
<CAPTION>
PRINCIPAL
AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Cogeneration -- 4.6%
------------------------------------------------------------------------
$ 7,000 Maryland Energy Cogeneration, (AES $ 7,122,500
Warrior Run), (AMT), 7.40%, 9/1/19
3,500 Palm Beach County, FL, (Okeelanta 1,890,000
Power), (AMT), 6.85%, 2/15/21(1)
4,000 Palm Beach County, FL, (Osceola Power), 2,130,000
(AMT), 6.95%, 1/1/22(1)
1,000 Pennsylvania EDA, (Northampton 996,620
Generating), Junior Liens, (AMT),
6.875%, 1/1/11
560 Robbins, IL, Resource Recovery, (AMT), 262,466
0.00%, 10/15/09
279 Robbins, IL, Resource Recovery, (AMT), 268,511
7.25%, 10/15/09
1,206 Robbins, IL, Resource Recovery, (AMT), 1,130,803
7.25%, 10/15/24
1,797 Robbins, IL, Resource Recovery, (AMT), 797,812
8.375%, 10/15/16(1)
703 Robbins, IL, Resource Recovery, (AMT), 312,187
8.375%, 10/15/16(1)
------------------------------------------------------------------------
$ 14,910,899
------------------------------------------------------------------------
Education -- 0.6%
------------------------------------------------------------------------
$ 2,000 New Hampshire HEFA, (Colby-Sawyer $ 2,080,600
College), 7.50%, 6/1/26
------------------------------------------------------------------------
$ 2,080,600
------------------------------------------------------------------------
Electric Utilities -- 3.7%
------------------------------------------------------------------------
$ 1,250 Connecticut Development Authority, $ 1,050,350
(Connecticut Light and Power), Variable
Rate, 9/1/28(2)(3)
2,500 Connecticut Development Authority, 2,100,700
(Western Mass Electric), Variable Rate,
9/1/28(2)(3)
3,500 Intermountain Power Agency, UT, 3,552,500
Variable Rate, 7/1/11(2)
4,000 Salt River, AZ, Agricultural Improvement 3,280,960
and Power District Electric, Residual
Certificates, Variable Rate,
1/1/25(2)(3)
2,000 Southern California Public Power 2,125,000
Authority, Variable Rate, 7/1/12(2)
------------------------------------------------------------------------
$ 12,109,510
------------------------------------------------------------------------
Escrowed / Prerefunded -- 2.0%
------------------------------------------------------------------------
$11,195 Colorado HFA, (Liberty Heights), $ 2,846,665
Escrowed to Maturity, 0.00%, 7/15/22
10,000 Dawson Ridge, CO, Metropolitan District 2,215,900
#1, Escrowed to Maturity,
0.00%, 10/1/22
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
HIGH YIELD MUNICIPALS PORTFOLIO AS OF JULY 31, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Escrowed / Prerefunded (continued)
------------------------------------------------------------------------
$ 3,500 Dawson Ridge, CO, Metropolitan District $ 775,565
#1, Escrowed to Maturity, 0.00%, 10/1/22
3,295 Illinois Development Finance Authority, 688,194
(Regency Park), Escrowed to Maturity,
0.00%, 7/15/25
------------------------------------------------------------------------
$ 6,526,324
------------------------------------------------------------------------
General Obligations -- 1.7%
------------------------------------------------------------------------
$ 2,290 Bell Mountain Ranch, CO, Metropolitan $ 2,103,113
District, 6.625%, 11/15/25
3,450 Bell Mountain Ranch, CO, Metropolitan 3,437,131
District, 7.375%, 11/15/19
------------------------------------------------------------------------
$ 5,540,244
------------------------------------------------------------------------
Health Care-Miscellaneous -- 7.0%
------------------------------------------------------------------------
$ 2,845 Illinois Development Finance Authority, $ 2,375,888
(Community Rehabilitation Providers),
5.60%, 7/1/19
3,500 Osceola County, FL, IDA, Community 3,578,190
Pooled Loan-93, 7.75%, 7/1/17
2,535 Tax Revenue Exempt Securities Trust, 2,540,397
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 6.75%, 12/1/36
1,307 Tax Revenue Exempt Securities Trust, 1,329,254
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 7.00%, 12/1/36
1,081 Tax Revenue Exempt Securities Trust, 1,099,383
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 7.00%, 12/1/36
2,358 Tax Revenue Exempt Securities Trust, 2,412,686
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 7.75%, 12/1/36
1,983 Tax Revenue Exempt Securities Trust, 2,048,854
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 7.90%, 12/1/36
372 Tax Revenue Exempt Securities Trust, 389,839
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 8.25%, 12/1/36
845 Tax Revenue Exempt Securities Trust, 888,090
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 8.375%, 12/1/36
2,341 Tax Revenue Exempt Securities Trust, 2,454,301
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 8.50%, 12/1/36
983 Tax Revenue Exempt Securities Trust, 1,051,824
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 8.70%, 12/1/36
<CAPTION>
PRINCIPAL
AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Health Care-Miscellaneous (continued)
------------------------------------------------------------------------
$ 1,965 Tax Revenue Exempt Securities Trust, $ 2,109,191
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 8.81%, 12/1/36
590 Tax Revenue Exempt Securities Trust, 631,041
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 8.875%, 12/1/36
------------------------------------------------------------------------
$ 22,908,938
------------------------------------------------------------------------
Hospital -- 9.5%
------------------------------------------------------------------------
$ 2,500 California Health Facilities Financing $ 2,622,225
Authority, (Cedars-Sinai Medical
Center), Variable Rate, 12/1/34(2)(3)
2,250 Chautauqua County, NY, IDA, (Women's 1,942,785
Christian Association), 6.40%, 11/15/29
10,000 Colorado Health Facilities Authority, 9,314,100
(Rocky Mountain Adventist),
6.625%, 2/1/22
3,685 Forsyth County, GA, Hospital Authority, 3,216,747
(Georgia Baptist Health Care System),
6.25%, 10/1/18
3,700 Forsyth County, GA, Hospital Authority, 3,166,645
(Georgia Baptist Health Care System),
6.375%, 10/1/28
2,500 Hidalgo County, TX, Health Services 2,414,875
Corp., (Mission Hospital, Inc.),
6.875%, 8/15/26(4)
400 Monroeville, PA, Hospital Authority, 379,632
(Forbes Health System), 5.75%, 10/1/05
1,000 Monroeville, PA, Hospital Authority, 800,000
(Forbes Health System), 6.25%, 10/1/15
2,000 New Hampshire HEFA, (Littleton Hospital 1,579,360
Assn.), 6.00%, 5/1/28
2,205 Philadelphia, PA, HEFA, (Graduate Health 766,237
System), 6.625%, 7/1/21(1)
3,170 Philadelphia, PA, HEFA, (Graduate Health 1,101,575
System), 7.00%, 7/1/05(1)
875 Prince George's County, MD, (Greater 306,250
Southeast Healthcare System),
6.375%, 1/1/13(1)
5,900 Prince George's County, MD, (Greater 2,065,000
Southeast Healthcare System),
6.375%, 1/1/23(1)
1,785 San Gorgonio, CA, (Memorial Health Care 1,471,911
District), 5.75%, 5/1/20
------------------------------------------------------------------------
$ 31,147,342
------------------------------------------------------------------------
Housing -- 8.1%
------------------------------------------------------------------------
$ 1,465 Atlanta, GA, Urban Residential Finance $ 1,423,467
Authority, (New Community John Hope
Project), 7.25%, 6/1/07
2,395 Cuyahoga County, (Rolling Hills Apts.), 2,295,105
(AMT), 8.00%, 1/1/28
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
HIGH YIELD MUNICIPALS PORTFOLIO AS OF JULY 31, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Housing (continued)
------------------------------------------------------------------------
$ 1,900 Jefferson County, MO, IDA, Multifamily, $ 1,873,495
(Riverview Bend Apartments), (AMT),
6.75%, 11/1/29
500 Jefferson County, MO, IDA, Multifamily, 493,270
(Riverview Bend Apartments), (AMT),
7.125%, 11/1/29
3,680 Lucas County, OH, (Country Creek), 3,448,197
(AMT), 8.00%, 7/1/26
4,250 Maricopa County, AZ, IDA, (National 3,960,490
Health Facilities II), 6.375%, 1/1/19
1,500 Maricopa County, AZ, IDA, (National 1,384,725
Health Facilities II), 6.625%, 7/1/33
2,400 Maricopa County, AZ, IDA, (National 2,154,216
Health Facilities II), 8.00%, 1/1/34
5,000 Muni Mae Tax Revenue Exempt Bond, (AMT), 4,966,850
Variable Rate, 6/30/09
1,500 Oregon Health Authority, (Trillium 1,384,320
Affordable Housing), (AMT),
6.75%, 2/15/29
3,400 Oregon Health Authority, (Trillium 3,137,792
Affordable Housing), (AMT),
6.75%, 8/15/29
------------------------------------------------------------------------
$ 26,521,927
------------------------------------------------------------------------
Industrial Development Revenue -- 20.5%
------------------------------------------------------------------------
$ 2,440 Abia Development Corp., TX, (Austin $ 2,209,347
Cargoport Development), (AMT),
6.50%, 10/1/24
2,815 Abia Development Corp., TX, (Austin 3,081,806
Cargoport Development), (AMT),
9.25%, 10/1/21
2,000 Camden County, NJ, (Holt Hauling), 1,983,220
(AMT), 9.875%, 1/1/21
3,900 Carbon County, UT, (Laidlaw 3,558,672
Environmental Services Inc.), (AMT),
7.45%, 7/1/17
4,000 Charleston County, SC, IDA, (Zeigler 2,200,000
Coal Holding), 6.95%, 8/10/28
5,000 Clark County, NV, (Nevada Power), (AMT), 3,771,000
Variable Rate, 10/1/30
1,390 Florence County, SC, (Stone Container 1,392,349
Co.), 7.375%, 2/1/07
2,700 Hancock County, KY, (Southwire Co.), 2,766,123
(AMT), 7.75%, 7/1/26
4,000 Hardeman County, TN, (Correctional 4,117,240
Facilities Corp.), 7.75%, 8/1/17
3,715 Iowa Finance Authority, (Southbridge 3,673,578
Mall), 6.375%, 12/1/13
3,880 Kansas City, MO, IDA, (Airline Cargo 4,124,828
Facilities), (AMT), 8.50%, 1/1/17
2,970 Kimball, NE, EDA, (Clean Harbors Inc.), 3,062,189
(AMT), 10.75%, 9/1/26
<CAPTION>
PRINCIPAL
AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Industrial Development Revenue (continued)
------------------------------------------------------------------------
$ 2,730 Maryland EDA, (AFCO Cargo), (AMT), $ 2,456,154
6.50%, 7/1/24
1,700 Michigan Strategic Fund, (Crown Paper), 1,160,250
(AMT), 6.50%, 8/1/21
1,095 New Albany, IN, IDA, K-Mart Co., 1,127,193
7.40%, 6/1/06
2,750 New Hampshire Business Finance 1,890,625
Authority, (Crown Paper Co.), (AMT),
7.875%, 7/1/26
3,500 New Jersey EDA, (Continental Airlines), 3,199,385
(AMT), 6.25%, 9/15/29
2,500 New Jersey EDA, (Continental Airlines), 2,053,225
(AMT), Variable Rate, 9/15/29
500 New Jersey EDA, (Holt Hauling), 489,050
8.95%, 12/15/18
4,000 New Jersey EDA, (Holt Hauling), (AMT), 3,886,480
7.90%, 3/1/27
4,000 Ohio Solid Waste Revenue, (Republic 800,000
Engineered Steels), (AMT),
9.00%, 6/1/21
2,000 Perry County, KY, TJ International Inc., 1,971,960
(AMT), 6.55%, 4/15/27
500 Philadelphia, PA, IDA, (Refrigerated 488,980
Enterprises), (AMT), 9.05%, 12/1/19
3,500 Riverdale Village, IL, (ACME Metals, 2,800,000
Inc.), (AMT), 7.90%, 4/1/24
3,345 Riverdale Village, IL, (ACME Metals, 2,676,000
Inc.), (AMT), 7.95%, 4/1/25
3,091 Santa Fe, NM, (1st Interstate Plaza), 3,181,262
8.00%, 7/1/13
3,000 Skowhegan, ME, (S.D. Warren Co.), (AMT), 2,906,910
6.65%, 10/15/15
------------------------------------------------------------------------
$ 67,027,826
------------------------------------------------------------------------
Insured-Hospital -- 0.7%
------------------------------------------------------------------------
$ 2,415 California Statewide Communities $ 2,474,699
Development Authority, (Sutter Health)
Residual Certificates, (FSA), Variable
Rate, 8/15/27(3)(5)
------------------------------------------------------------------------
$ 2,474,699
------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of Participation -- 0.4%
------------------------------------------------------------------------
$ 1,500 San Mateo County, CA, Joint Powers $ 1,261,530
Financing Authority, (FSA), Variable
Rate, 7/15/29(2)(3)
------------------------------------------------------------------------
$ 1,261,530
------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
HIGH YIELD MUNICIPALS PORTFOLIO AS OF JULY 31, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Insured-Special Tax Revenue -- 1.5%
------------------------------------------------------------------------
$ 7,000 Pennsylvania Turnpike Commission Oil $ 5,046,860
Franchise, (AMBAC), Variable Rate,
12/1/27(2)(3)
------------------------------------------------------------------------
$ 5,046,860
------------------------------------------------------------------------
Insured-Transportation -- 1.7%
------------------------------------------------------------------------
$ 2,000 New Jersey Turnpike Authority, (MBIA), $ 1,917,920
Variable Rate, 1/1/30(3)(5)
3,750 Niagara, NY, Frontier Airport Authority, 3,572,100
(Buffalo Niagara International Airport),
(MBIA), (AMT), Variable Rate,
4/1/29(2)(3)
------------------------------------------------------------------------
$ 5,490,020
------------------------------------------------------------------------
Miscellaneous -- 3.1%
------------------------------------------------------------------------
$ 3,755 Atlanta, Downtown Development Authority, $ 3,885,599
Childcare Facilities, (Central Atlanta
Hospitality Childcare Inc.),
8.00%, 1/1/26
3,000 Colorado River Indian Tribe, AZ, 2,970,330
6.25%, 8/1/04
1,285 Pittsfield Township, MI, (Arbor 1,290,770
Hospice), 8.125%, 8/15/17
1,900 Union, OR, Facility Revenue, (Buffalo 1,851,531
Peak Golf Club), 6.75%, 7/1/24
------------------------------------------------------------------------
$ 9,998,230
------------------------------------------------------------------------
Nursing Home -- 8.4%
------------------------------------------------------------------------
$ 3,335 Clovis, NM, IDR, (Retirement Ranches, $ 3,358,912
Inc.), 7.75%, 4/1/19
3,600 Colorado HFA, (Volunteers of America), 2,921,364
5.875%, 7/1/28
2,300 Colorado HFA, (Volunteers of America), 1,896,235
5.75%, 7/1/20
1,100 Colorado HFA, Residential Care 904,981
Facilities, (Volunteers of America),
6.00%, 7/1/29
2,175 Kansas City, MO, IDA, (Beverly 2,213,519
Enterprises, Inc.), 8.00%, 12/1/02
2,500 Massachusetts IFA, (Age Institute of 2,598,775
Massachusetts), 8.05%, 11/1/25
3,200 Minneapolis, MN, (Walker Methodist 2,673,312
Senior Services), 6.00%, 11/15/28
1,195 Mississippi Business Finance Corp., 1,196,314
(Magnolia Healthcare), 7.99%, 7/1/25
7,500 Tarrant County, TX, Health Facilities, 2,637,000
(3927 Foundation), 10.25%, 9/1/19
3,370 Westmoreland, PA, (Highland Health 3,582,984
Systems, Inc.), 9.25%, 6/1/22
<CAPTION>
PRINCIPAL
AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Nursing Home (continued)
------------------------------------------------------------------------
$ 3,790 Wisconsin HEFA, (Wisconsin Illinois $ 3,527,277
Senior Housing), 7.00%, 8/1/29
------------------------------------------------------------------------
$ 27,510,673
------------------------------------------------------------------------
Senior Living / Life Care -- 10.0%
------------------------------------------------------------------------
$ 8,000 Albuquerque, NM, Retirement Facilities, $ 6,904,640
(La Vida Liena Retirement Center),
6.60%, 12/15/28
3,500 Delaware County, PA, White Horse 3,502,800
Village, 7.30%, 7/1/14
2,000 Grove City, PA, Area Hospital Authority, 1,773,800
(Grove Manor), 6.625%, 8/15/29
7,500 Kansas City, MO, IDA, (Kingswood United 6,006,525
Methodist Manor), 5.875%, 11/15/29
3,545 Louisiana HFA, (HCC Assisted Living 3,727,851
Group 1), (AMT), 9.00%, 3/1/25
5,355 Massachusetts IFA, (Forge Hill), (AMT), 4,476,673
6.75%, 4/1/30
5,240 North Miami, FL, Health Care Facilities, 4,639,863
(Imperial Club), 8.00%, 1/1/33
2,000 Ohio HFA, Retirement Rental Housing, 1,743,560
(Encore Retirement Partners),
6.75%, 3/1/19
------------------------------------------------------------------------
$ 32,775,712
------------------------------------------------------------------------
Solid Waste -- 1.0%
------------------------------------------------------------------------
$ 3,400 Morgantown, KY, Solid Waste Revenue, $ 3,407,412
(IMCO Recycling, Inc.), 7.45%, 5/1/22
------------------------------------------------------------------------
$ 3,407,412
------------------------------------------------------------------------
Special Tax Revenue -- 2.9%
------------------------------------------------------------------------
$ 3,800 Cottonwood, CO, Water and Sanitation $ 3,909,554
District, 7.75%, 12/1/20
1,500 Dulles, VA, Community Development 1,417,815
Authority, (Dulles Town Center),
6.25%, 3/1/26
4,250 Frederick County, MD, Urbana Community 4,084,717
Development Authority, 6.625%, 7/1/25
------------------------------------------------------------------------
$ 9,412,086
------------------------------------------------------------------------
Transportation -- 4.2%
------------------------------------------------------------------------
$ 500 Eagle County, CO, (Eagle County Airport $ 506,760
Terminal), (AMT), 7.50%, 5/1/21
2,985 Monroe County, NY, Airport Authority, 3,216,397
DRIVERS, (AMT), 8.364%, 1/1/18(2)(3)
5,000 New Jersey Transportation Authority, 4,544,150
Variable Rate, 6/15/17(2)(3)
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
14
<PAGE>
HIGH YIELD MUNICIPALS PORTFOLIO AS OF JULY 31, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Transportation (continued)
------------------------------------------------------------------------
$ 5,250 Northwest Arkansas Regional Airport $ 5,328,225
Authority, (AMT), 7.625%, 2/1/27
------------------------------------------------------------------------
$ 13,595,532
------------------------------------------------------------------------
Water and Sewer -- 0.7%
------------------------------------------------------------------------
$ 3,000 Metropolitan Water District, CA, $ 2,306,130
(Southern California Waterworks),
Variable Rate, 7/1/27(3)(5)
------------------------------------------------------------------------
$ 2,306,130
------------------------------------------------------------------------
Total Tax-Exempt Investments -- 97.7%
(identified cost $351,170,365) $319,656,378
------------------------------------------------------------------------
Other Assets, Less Liabilities -- 2.3% $ 7,423,160
------------------------------------------------------------------------
Net Assets -- 100.0% $327,079,538
------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax
preference item for purposes of the Federal Alternative Minimum Tax.
At July 31, 2000, the concentration of the Portfolio's investments in the
various states, determined as a percentage of net assets, is as follows:
<TABLE>
<S> <C>
Colorado 10.3%
Others, representing less than 10% individually 87.4%
</TABLE>
(1) Non-income producing security.
(2) Security has been issued as an inverse floater bond.
(3) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(4) Security (or a portion thereof) has been segregated to cover when-
issued securities.
(5) Security has been issued as a leveraged inverse floater bond.
SEE NOTES TO FINANCIAL STATEMENTS
15
<PAGE>
HIGH YIELD MUNICIPALS PORTFOLIO AS OF JULY 31, 2000
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF JULY 31, 2000
<S> <C>
Assets
------------------------------------------------------
Investments, at value
(identified cost, $351,170,365) $319,656,378
Cash 313,878
Receivable for when-issued securities 1,293,218
Receivable for investments sold 237,598
Interest receivable 6,948,831
------------------------------------------------------
TOTAL ASSETS $328,449,903
------------------------------------------------------
Liabilities
------------------------------------------------------
Payable for when-issued securities $ 1,338,358
Accrued expenses 32,007
------------------------------------------------------
TOTAL LIABILITIES $ 1,370,365
------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS'
INTEREST IN PORTFOLIO $327,079,538
------------------------------------------------------
Sources of Net Assets
------------------------------------------------------
Net proceeds from capital contributions
and withdrawals $358,593,525
Net unrealized depreciation (computed on
the basis of identified cost) (31,513,987)
------------------------------------------------------
TOTAL $327,079,538
------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JULY 31, 2000
<S> <C>
Investment Income
-----------------------------------------------------
Interest $12,450,795
-----------------------------------------------------
TOTAL INVESTMENT INCOME $12,450,795
-----------------------------------------------------
Expenses
-----------------------------------------------------
Investment adviser fee $ 1,005,874
Trustees fees and expenses 13,955
Custodian fee 70,188
Legal and accounting services 38,957
Miscellaneous 48,828
-----------------------------------------------------
TOTAL EXPENSES $ 1,177,802
-----------------------------------------------------
NET INVESTMENT INCOME $11,272,993
-----------------------------------------------------
Realized and Unrealized Gain (Loss)
-----------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $(2,995,829)
-----------------------------------------------------
NET REALIZED LOSS $(2,995,829)
-----------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $ 3,544,562
-----------------------------------------------------
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) $ 3,544,562
-----------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $ 548,733
-----------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $11,821,726
-----------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
16
<PAGE>
HIGH YIELD MUNICIPALS PORTFOLIO AS OF JULY 31, 2000
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INCREASE (DECREASE) JULY 31, 2000 YEAR ENDED
IN NET ASSETS (UNAUDITED) JANUARY 31, 2000
<S> <C> <C>
----------------------------------------------------------------------------
From operations --
Net investment income $ 11,272,993 $ 24,535,713
Net realized loss (2,995,829) (2,694,168)
Net change in unrealized
appreciation (depreciation) 3,544,562 (54,986,374)
----------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS $ 11,821,726 $ (33,144,829)
----------------------------------------------------------------------------
Capital transactions --
Contributions $ 24,100,508 $ 114,068,297
Withdrawals (47,767,592) (132,907,536)
----------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
CAPITAL TRANSACTIONS $ (23,667,084) $ (18,839,239)
----------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (11,845,358) $ (51,984,068)
----------------------------------------------------------------------------
Net Assets
----------------------------------------------------------------------------
At beginning of period $ 338,924,896 $ 390,908,964
----------------------------------------------------------------------------
AT END OF PERIOD $ 327,079,538 $ 338,924,896
----------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
HIGH YIELD MUNICIPALS PORTFOLIO AS OF JULY 31, 2000
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED JANUARY 31,
JULY 31, 2000 --------------------------------------------------------
(UNAUDITED) 2000 1999 1998 1997 1996(1)
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
--------------------------------------------------------------------------------------------------------------
Ratios (As a percentage of
average daily net assets):
Net expenses 0.72%(2) 0.68% 0.67% 0.68% 0.34% 0.06%(2)
Net expenses after
custodian fee reduction 0.72%(2) 0.67% 0.66% 0.66% 0.30% 0.06%(2)
Net investment income 6.90% 6.25% 5.88% 6.43% 6.96% 6.95%(2)
Portfolio Turnover 6% 58% 25% 8% 41% 32%
--------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD
(000'S OMITTED) $327,080 $338,925 $390,909 $303,209 $180,700 $72,077
--------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Portfolio may reflect a reduction of the investment adviser fee, an allocation
of expenses to the Investment Adviser, or both. Had such actions not been taken, the ratios would have been
as follows:
Ratios (As a percentage of
average daily net assets):
Expenses 0.71% 0.71%(2)
Expenses after custodian
fee reduction 0.67% 0.71%(2)
Net investment income 6.59% 6.30%(2)
--------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the period from the start of business, August 7, 1995, to
January 31, 1996.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
HIGH YIELD MUNICIPALS PORTFOLIO AS OF JULY 31, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1 Significant Accounting Policies
-------------------------------------------
High Yield Municipals Portfolio (the Portfolio) is registered under the
Investment Company Act of 1940, as 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, 1995. The Portfolio seeks to achieve high current
income exempt from regular federal income tax. The Declaration of Trust
permits the Trustees to issue 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 Valuation -- Municipal bonds are normally valued on the basis of
valuations furnished by a pricing service. Taxable obligations, if any, for
which price quotations are readily available are normally valued at the mean
between the latest bid and asked prices. Futures contracts listed on
commodity exchanges are valued at closing settlement prices. Short-term
obligations maturing in sixty days or less are valued at amortized cost which
approximates value. Investments for which valuations or market quotations are
unavailable are valued at fair value using methods determined in good faith
by or at the direction of the Trustees.
B Income -- Interest income is determined on the basis of interest accrued,
adjusted for amortization of premium or discount when required for federal
income tax purposes.
C 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 Internal Revenue Code) in order for its investors to satisfy them.
The Portfolio will allocate at least annually among its investors each
investor's distributive share of the Portfolio's net taxable (if any) and
tax-exempt investment income, net realized capital gains, and any other items
of income, gain, loss, deduction or credit. Interest income received by the
Portfolio on investments in municipal bonds, which is excludable from gross
income under the Internal Revenue Code, will retain its status as income
exempt from Federal income tax when allocated to the Portfolio's investors.
The portion of such interest, if any, earned on private activity bonds issued
after August 7, 1986 may be considered a tax preference item for investors.
D Financial Futures Contracts -- Upon the entering of a financial futures
contract, the Portfolio is required to deposit (initial margin) either in
cash or securities an amount equal to a certain percentage of the purchase
price indicated in the financial futures contract. Subsequent payments are
made or received by the Portfolio (margin maintenance) each day, dependent on
the daily fluctuations in the value of the underlying security, and are
recorded for book purposes as unrealized gains or losses by the Portfolio.
The Portfolio's investment in financial futures contracts is designed only to
hedge against anticipated futures changes in interest rates. Should interest
rates move unexpectedly, the Portfolio may not achieve the anticipated
benefits of the financial futures contracts and may realize a loss.
E Legal Fees -- Legal fees and other related expenses incurred as part of
negotiations of the terms and requirements of capital infusions, or that are
expected to result in the restructuring of or a plan of reorganization for an
investment are recorded as realized losses. Ongoing expenditures to protect
or enhance an investment are treated as operating expenses.
F When-issued and Delayed Delivery Transactions -- The Portfolio may engage in
when-issued and delayed delivery transactions. The Portfolio records
when-issued securities on trade date and maintains security positions such
that sufficient liquid assets will be available to make payments for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked-to-market daily and begin accruing interest on
settlement date.
G 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
operating expenses on the Statement of Operations.
H 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
19
<PAGE>
HIGH YIELD MUNICIPALS PORTFOLIO AS OF JULY 31, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
statements and the reported amounts of income and expense during the
reporting period. Actual results could differ from those estimates.
I Other -- Investment transactions are accounted for on a trade date basis.
J Interim Financial Statements -- The interim financial statements relating to
July 31, 2000 and for the six months 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 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 based upon a percentage of average daily net assets plus a
percentage of gross income (i.e. income other than gains from the sales of
securities). For the six months ended July 31, 2000, the fee was equivalent
to 0.62% (annualized) of the Portfolio's average net assets for such period
and amounted to $1,005,874. 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 officers and Trustees of the Portfolio are officers 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 July 31, 2000, no significant
amounts have been deferred.
3 Investments
-------------------------------------------
Purchases and sales of investments, other than U.S. Government securities and
short-term obligations, aggregated $20,225,381 and $38,048,305, respectively,
for the six months ended July 31, 2000.
4 Federal Income Tax Basis of Investments
-------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned at July 31, 2000 as computed on a federal income tax basis,
were as follows:
<TABLE>
<S> <C>
AGGREGATE COST $351,170,365
------------------------------------------------------
Gross unrealized appreciation $ 5,788,184
Gross unrealized depreciation (37,302,171)
------------------------------------------------------
NET UNREALIZED DEPRECIATION $(31,513,987)
------------------------------------------------------
</TABLE>
5 Line of Credit
-------------------------------------------
The Portfolio participates with other portfolios and funds managed by BMR and
EVM and its affiliates in a $150 million unsecured line of credit agreement
with a group of banks. 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 participating portfolio or fund
based on its borrowings at an amount above either the Eurodollar rate or
federal funds rate. In addition, a fee computed at an annual rate of 0.10% 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 July 31, 2000.
6 Financial Instruments
-------------------------------------------
The Portfolio regularly trades in financial instruments with off-balance
sheet risk in the normal course of its investing activities to assist in
managing exposure to various market risks. These financial instruments
include futures contracts and may involve, to a varying degree, elements of
risk in excess of the amounts recognized for financial statement purposes.
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. At July 31,
2000, there were no obligations under these financial instruments
outstanding.
20
<PAGE>
EATON VANCE HIGH YIELD MUNICIPALS FUND AS OF JULY 31, 2000
INVESTMENT MANAGEMENT
HIGH YIELD MUNICIPALS PORTFOLIO
Officers
Thomas J. Fetter
President
James B. Hawkes
Vice President and Trustee
Thomas Metzold
Vice President and
Portfolio Manager
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Trustees
Jessica M. Bibliowicz
President and Chief Executive Officer,
National Financial Partners
Donald R. Dwight
President, Dwight Partners, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment Banking
Emeritus, Harvard University Graduate School of
Business Adminstration
Norton H. Reamer
Chairman of the Board,
United Asset Management Corporation
Lynn A. Stout
Professor of Law,
Georgetown University Law Center
Jack L. Treynor
Investment Adviser and Consultant
21
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