The Eaton Vance Growth Trust
For the Information Age Portfolio
[LOGO]
Annual Shareholder Report
August 31, 1996
Sponsor and Manager of
EV Marathon Information Age Fund
and Administrator of
information Age Portfolio
Eaton Vance Management
24 Federal Street
Boston, MA 02110
Co-Advisers of
Information Age Portfolio
Boston Management and Research
24 Federal Street
Boston, MA 02110
Lloyd George Investment Management
(Bermuda) Limited
3808 One Exchange Square
Central, Hong Kong
Principal Underwriter
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
Custodian
Investors Bank & Trust Company
89 South Street
Boston, MA 02205-1537
Transfer Agent
First Data Investor Services Group
Attn. Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
<TABLE>
<CAPTION>
Information Age Portfolio
Portfolio of Investments
August 31, 1996
Common Stock - 99.0%
- --------------------------------------------------------------------------------------
Name of Company Shares Value
(Note 1)
- --------------------------------------------------------------------------------------
<S> <C> <C>
Broadcasting - 15.2%
BEC World Co. Ltd.+ (2) 82,700 $882,395
Benpress Holdings GDR+ (2) 32,000 236,160
Comcast Corp. 26,000 419,250
Financiere Richemont+ (2) 30,000 451,253
Jacor Communications, Inc. (2) 17,000 569,500
Lin Television Corp. (2) 15,000 536,250
Providence Journal Bulletin Class A (2) 35,000 678,125
PT Indonesia Satellite ADR+ 14,000 437,500
Renaissance Communications (2) 13,000 458,250
TCA Cable TV, Inc. (2) 5,000 130,000
Television Broadcasts Ltd.+ 230,000 818,029
Yorkshire-Tyne Tees TV Holdings+ 45,000 862,293
-----------
$6,479,005
-----------
Business, Computer, & Financial Services - 20.6%
ADT Ltd. (2) 25,000 $490,625
Automatic Data Processing, Inc. 16,000 666,000
CCC Information Services (2) 10,000 185,000
Ceridian Corp. (2) 10,500 447,563
Computer Sciences Corp. (2) 10,000 700,000
DST Systems, Inc. (2) 20,000 615,000
First Data Corp. 5,000 390,000
Fiserv, Inc. (2) 17,000 575,875
Metromail Corp. (2) 32,000 560,000
National Processing, Inc. (2) 10,000 171,250
NTT Data Comm Systems+ 270 827,443
Reuters Holding PLC+ 100,000 1,165,809
Sunguard Data Systems, Inc. (2) 14,000 598,500
True North Communications, Inc. (2) 30,000 577,500
Xerox Corp. 15,000 823,125
-----------
$8,793,690
-----------
Computer Hardware & Software - 11.3%
Adobe 20,000 $697,500
Bay Networks (2) 30,000 825,000
Broderbund Software, Inc. 5,000 150,625
Cisco Systems (2) 10,000 527,500
Information Resources (2) 5,000 68,750
Informix Corporation (2) 20,000 450,000
INTUIT Inc. (2) 10,000 365,000
Misys PLC+ 33,000 435,738
Oracle Corp. (2) 18,000 634,500
Scholastic Corp. (2) 10,000 677,500
-----------
$4,832,113
-----------
Electronics - 9.1%
Allen Group (2) 15,000 $234,375
Anritsu Corp.+ (2) 30,000 411,375
Galileo Electro Optics (2) 32,000 860,000
Intel Corp. (2) 12,000 957,750
Samsung Electronics GDR+ 3,300 256,991
Samsung Electronics GDR+ (1) 1,206 56,358
Sharp Corp.+ 37,000 585,680
VTECH Holdings Ltd.+ 275,000 506,822
-----------
$3,869,351
-----------
Entertainment - 11.9%
Gaylord Entertainment 20,000 $490,000
Grammy Entertainment PLC+ 43,000 564,157
Havas SA+ 10,000 671,505
Hoyts Cinemas+ 255,000 403,436
New World Communications Group (2) 10,000 230,625
News International PLC+ 150,000 878,456
Polygram+ 11,000 655,132
Sony Corp.+ 19,100 1,198,804
-----------
$5,092,115
-----------
Miscellaneous - 7.9%
Boston Scientific Corp. 15,000 $688,125
Duracell International, Inc. 15,000 676,875
Eastman Kodak Co. 12,000 870,000
Oxford Molecular Group PLC+ 50,000 267,051
Sofamer Inc. 10,000 287,500
Thermo Electron Corp. 15,000 594,375
-----------
$3,383,926
-----------
Publishing - 16.0%
Dorling Kindersley PLC+ 45,000 $367,546
Dow Jones & Co., Inc. 11,000 430,375
John Fairfax Holdings+ 250,000 526,048
Matichon Publishing Group+ 90,000 441,019
McGraw-Hill Companies, Inc. 10,000 410,000
Oriental Press Group Ltd+ 1,580,000 812,274
Pearson PLC+ 105,000 1,119,153
United News & Media PLC+ 50,000 559,479
Springer Axel Verlag AG+ 1,327 784,836
Star Publications (Malaysia)+ 185,000 634,477
Wolters Kluwer NV+ 6,000 754,114
-----------
$6,839,321
-----------
Telephone Services - 7.0%
British Telecommunications PLC+ 105,000 615,739
Hong Kong Telecom+ 300,000 502,457
Korea Mobile Telecom Corp.+ 290 322,455
Philippine Long Distance+ 8,300 496,963
STET+ 180,000 572,650
Telecom Italia Mobile SA+ 240,000 494,984
-----------
$3,005,248
-----------
Total Common Stocks (identified cost, $39,841,160) $42,294,769
-----------
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Short-Term Obligations - 1.5%
- ----------------------------------------------------------------------------------------------------------
Principal
Amount Value
(000 omitted) (Note 1)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Associates Corp. of North America, 5.30s, 9/03/96 $ 621 $ 620,817
(at amortized cost)
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Put Options Purchased - 0.2%
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Option to Deliver/Receive, Strike Price, Expiration Date:
JPY/USD, 101.85, December 1996 (premium paid, $58,443) 1,650 $ 78,210
-----------
Total Investments (identified cost, $40,520,420) - 100.7% $42,993,796
Other Assets, Less Liabilities - (0.7%) (290,411)
Net Assets - 100% $42,703,385
===========
+ Foreign Security
(1) 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. At August 31,
1996, the value of these securities amounted to $56,358 or 0.1% of net assets.
(2) Non-income producing security.
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
JPY - Japanese Yen
USD - United States Dollars
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Financial Statements
Statement of Assets and Liabilities
August 31, 1996
<S> <C> <C>
Assets:
Investments, at value (Note 1A) (identified cost, $40,520,420) $42,993,796
Cash 1,135
Foreign currencies, at value (identified cost, $963) 1,153
Receivable for investments sold 407,852
Dividends receivable 60,719
Deferred organization expenses (Note 1C) 5,211
-----------
Total assets $43,469,866
Liabilities:
Payable for investments purchased $ 738,113
Payable to affiliate --
Trustees' fees 273
Accrued expenses 28,095
----------
Total liabilities 766,481
-----------
Net Assets applicable to investors' interest in Portfolio $42,703,385
===========
Sources of Net Assets:
Net proceeds from capital contributions and withdrawals $40,229,819
Net unrealized appreciation of investments and foreign currency
(computed on the basis of identified cost) 2,473,566
-----------
Total $42,703,385
===========
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
For the Period from the Start of Business, September 18, 1995, to August 31, 1996
<S> <C> <C>
Investment Income:
Income --
Dividends (net of foreign taxes of $38,742) $ 283,323
Interest 140,841
----------
Total income 424,164
Expenses --
Investment adviser fee (Note 2) $ 199,131
Administration fee (Note 2) 66,210
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 724
Custodian fees 115,885
Legal and accounting services 15,444
Printing and postage 4,361
Amortization of organization expenses (Note 1C) 1,187
Miscellaneous 2,091
----------
Total expenses 405,033
----------
Net investment income $ 19,131
----------
Realized and Unrealized Gain (Loss) on Investments:
Net realized loss (identified cost basis)--
Investment transactions $ (218,951)
Foreign currency and forward foreign currency contracts (50,123)
----------
Net realized loss $(269,074)
Unrealized appreciation --
Investments (identified cost basis) $2,473,376
Foreign currency 190
----------
Net unrealized appreciation 2,473,566
----------
Net realized and unrealized gain on investments $2,204,492
----------
Net increase in net assets from operations $2,223,623
==========
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
For the Period from the Start of Business, September 18, 1995, to August 31, 1996
<S> <C>
Increase (Decrease) in Net Assets:
From operations --
Net investment income $ 19,131
Net realized loss on investments and foreign currency transactions (269,074)
Net unrealized appreciation of investments and foreign currency 2,473,566
-----------
Increase in net assets from operations $ 2,223,623
-----------
Capital transactions --
Contributions $47,226,307
Withdrawals (6,846,545)
-----------
Increase in net assets resulting from capital transactions $40,379,762
-----------
Total increase in net assets $42,603,385
Net Assets:
At beginning of period 100,000
-----------
At end of period $42,703,385
===========
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Supplementary Data
For the Period from the Start of Business, September 18, 1995, to August 31, 1996
<S> <C>
Ratios (to average daily net assets):
Expenses 1.52%+
Net investment income 0.07%+
Portfolio Turnover 115%
Average commission rate paid * $0.0303
Net Assets, end of period (000 omitted) $42,703
+ Computed on an annualized basis.
* 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.
See notes to financial statements
</TABLE>
Notes to Financial Statements
(1) Significant Accounting Policies
Information Age Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940 as a diversified, open-end management
investment company. The Portfolio which was organized as a trust
under the laws of the State of New York on September 1, 1992 seeks
to provide long-term capital growth by investing in a global and
diversified portfolio of securities of information age companies.
The Declaration of Trust permits the Trustees to issue interests in
the Portfolio. The following is a summary of the significant
accounting policies of the Portfolio. The policies are in conformity
with generally accepted accounting principles.
A. Investment Valuations - Marketable securities, including options,
that are listed on foreign or U.S. securities exchanges or in the
NASDAQ National Market System are valued at closing sale prices, on
the exchange where such securities are principally traded. Futures
positions on securities or currencies are generally valued at
closing settlement prices. Unlisted or listed securities for which
closing sale prices are not available are valued at the mean between
the latest bid and asked prices. Short-term debt securities with a
remaining maturity of 60 days or less are valued at amortized cost.
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. 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. 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 on its share of such income. 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 investment income, net
realized capital gains, and any other items of income, gain, loss,
deduction or credit. Withholding taxes on foreign dividends and
capital gains have been provided for in accordance with the Trust's
understanding of the applicable countries' tax rules and rates.
C. Deferred Organization Expenses - Costs incurred by the Portfolio
in connection with its organization, including registration costs,
are being amortized on the straight-line basis over five years.
D. 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 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 future changes in interest or currency exchange
rates. Should interest or currency exchange rates move unexpectedly,
the Portfolio may not achieve the anticipated benefits of the
financial futures contracts and may realize a loss.
E. Options on Foreign Currency - Upon the purchase of a put option
on foreign currency by the Portfolio, the premium paid is recorded
as an investment, the value of which is marked-to-market daily. When
a purchased option expires, the Portfolio will realize a loss in the
amount of the cost of the option. When a Portfolio enters into a
closing sales transaction, the Portfolio will realize a gain or loss
depending on whether the sales proceeds from the closing sales
transaction are greater or less than the cost of the option. When a
Portfolio exercises a put option, settlement is made in cash. The
risk associated with purchasing options is limited to the premium
originally paid.
F. Foreign Currency Translation - Investment valuations, other
assets, and liabilities initially expressed in foreign currencies
are converted each business day into U.S. dollars based upon current
exchange rates. Purchases and sales of foreign investment securities
and income and expenses are converted into U.S. dollars based upon
currency exchange rates prevailing on the respective dates of such
transactions. Recognized gains or losses on investment transactions
attributable to foreign currency rates are recorded for financial
statement purposes as net realized gains and losses on investments.
That portion of unrealized gains and losses on investments that
result from fluctuations in foreign currency exchange rates are not
separately disclosed.
G. Forward Foreign Currency Exchange Contracts - The Portfolio may
enter into forward foreign currency exchange contracts for the
purchase or sale of a specific foreign currency at a fixed price
on a future date. Risks may arise upon entering these contracts
from the potential inability of counterparties to meet the terms
of their contracts and from movements in the value of a foreign
currency relative to the U.S. dollar. The Portfolio will enter into
forward contracts for hedging purposes as well as non-hedging purposes.
The forward foreign currency exchange contracts are adjusted by the
daily exchange rate of the underlying currency and any gains or
losses are recorded for financial statement purposes as unrealized
until such time as the contracts have been closed or offset.
H. Use of Estimates - The preparation of 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 reported period. Actual results could differ from those
estimates.
I. Other - Investment transactions are accounted for on the date the
investments are purchased or sold. Dividend income is recorded on
the ex-dividend date. However, if the ex-dividend date has passed,
certain dividends from foreign securities are recorded as the
Portfolio is informed of the ex-dividend date. Interest income is
recorded on the accrual basis.
J. Expense Reduction - Investors Bank & Trust Company (IBT), serves
as custodian of the Portfolio. Prior to November 10, 1995, IBT was
an affiliate of EVM. Pursuant to the custodian agreement, IBT
receives a fee reduced by credits which are determined based on the
average cash balances the Portfolio maintains with IBT. All
significant credit balances used to reduce the Portfolio's custodian
fees are reflected as a reduction of operating expenses in the
Statement of Operations.
(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), and Lloyd George Investment Management (Bermuda) Limited, an
affiliate of EVM, (the Advisers) as compensation for management and
investment advisory services rendered to the Portfolio. Under the
advisory agreement, the Advisers receive a monthly fee, divided
equally between them, of 0.0625% (0.75% annually) of the average
daily net assets of the Portfolio up to $500,000,000, and at reduced
rates as daily net assets exceed that level. For the period from the
start of business, September 18, 1995 to August 31, 1996 the adviser
fee was 0.75% (annualized) of average net assets for such period and
amounted to $199,131. In addition, an administrative fee is earned
by EVM for managing and administering the business affairs of the
Portfolio. Under the administration agreement, EVM earns a monthly
fee in the amount of 1/48th of 1% (equal to 0.25% annually) of the
average daily net assets of the Portfolio up to $500,000,000, and at
reduced rates as daily net assets exceed that level. For the period
from the start of business, September 18, 1995 to August 31, 1996,
the administration fee was 0.25% (annualized) of average net assets
for such period and amounted to $66,210. Except as to Trustees of
the Portfolio who are not members of the Advisers or EVM's
organization, officers and Trustees receive remuneration for their
services to the Portfolio out of such investment adviser and
administrative fees.
Trustees of the Portfolio that are not affiliated with the Advisers
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 period ended August 31, 1996, no
significant amounts have been deferred.
Certain of the officers and Trustees of the Portfolio are officers
or directors/trustees of the above organizations.
(3) Investment Transactions
Purchases and sales of investments, other than short-term
obligations, aggregated $70,236,045 and $30,143,015, respectively.
(4) Federal Income Tax Basis of Investments
The cost and unrealized appreciation (depreciation) in value of the
investments owned at August 31, 1996, as computed on a federal
income tax basis, are as follows:
Aggregate cost $ 62,295
==========
Gross unrealized appreciation $3,447,113
Gross unrealized depreciation 1,015,612
----------
Net unrealized appreciation $2,431,501
==========
(5) Risks Associated with Foreign Investments
Investing in securities issued by companies whose principal business
activities are outside the United States may involve significant
risks not present in domestic investments. For example, there is
generally less publicly available information about foreign
companies, particularly those not subject to the disclosure and
reporting requirements of the U.S. securities laws. Foreign issuers
are generally not bound by uniform accounting, auditing, and
financial reporting requirements and standards of practice
comparable to those applicable to domestic issuers. Investments in
foreign securities also involve the risk of possible adverse changes
in investment or exchange control regulations, expropriation or
confiscatory taxation, limitation on the removal of funds or other
assets of the Portfolio, political or financial instability or
diplomatic and other developments which could affect such
investments. Foreign stock markets, while growing in volume and
sophistication, are generally not as developed as those in the
United States, and securities of some foreign issuers (particularly
those located in developing countries) may be less liquid and more
volatile than securities of comparable U.S. companies. In general,
there is less overall governmental supervision and regulation of
foreign securities markets, broker-dealers, and issuers than in the
United States.
(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 written options, forward foreign
currency exchange contracts and financial 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 does 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.
The Portfolio did not have any open obligations under these
financial instruments at August 31, 1996.
(7) Line of Credit
The Portfolio participates with other portfolios and funds managed
by BMR and EVM and its affiliates in a $120 million unsecured line
of credit agreement with a bank. The line of credit consists of a
$20 million committed facility and a $100 million discretionary
facility. Borrowings will be made by the Portfolio solely to
facilitate the handling of unusual and/or unanticipated short-term
cash requirements. Interest is charged to each portfolio based on
its borrowings at an amount above either the bank's adjusted
certificate of deposit rate, a variable adjusted certificate of
deposit rate, or a federal funds effective rate. In addition, a fee
computed at an annual rate of 1/4 of 1% on the $20 million committed
facility and on the daily unused portion of the $100 million
discretionary facility is allocated among the participating funds
and portfolios at the end of each quarter. The Portfolio did not
have any significant borrowings or allocated fees during the period.
Independent Auditors' Report
To the Trustees and Investors of
Information Age Portfolio:
We have audited the accompanying statement of assets and liabilities
of Information Age Portfolio, including the portfolio of
investments, as of August 31, 1996, and the related statement of
operations, the statement of changes in net assets and the
suplementary data for the period from the start of business,
September 18, 1995, to August 31, 1996. These financial statements
and supplementary data are the responsibility of the Portfolio's
management. Our responsibility is to express an opinion on these
financial statements and supplementary data based on our audit.
We conducted our audit in accordance with auditing standards
generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and supplementary
data are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of
securities owned as of August 31, 1996 by correspondence with the
custodian and brokers; where replies were not received from brokers
we performed other auditing procedures. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements and supplementary data
present fairly, in all material respects, the financial position of
Information Age Portfolio as of August 31, 1996, and the results of
its operations, changes in its net assets and supplementary data for
the respective stated period, in conformity with United States
generally accepted accounting principles.
Coopers & Lybrand
Chartered Accountants
Toronto, Canada
October 4, 1996
INVESTMENT MANAGEMENT FOR INFORMATION AGE PORTFOLIO
Information
Age Portfolio
Officers
- ------------------------
James B. Hawkes
President and Trustee
William Chisholm
Vice President
Michel Normandeau
Vice President
Raymond O'Neill
Vice President
Duncan W. Richardson
Vice President and Co-Portfolio Manager
Hon. Robert Lloyd George
Vice President, Trustee and Co-Portfolio Manager
James L. O'Connor
Treasurer
Thomas Otis
Secretary
Independent Trustees
- ----------------------------
Hon. Edward K.Y. Chen
Professor and Director, Center for Asian Studies,
University of Hong Kong
Donald R. Dwight
President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment Banking,
Harvard University Graduate School of Business Administration
Norton H. Reamer
President and Director, United Asset
Management Corporation
John L. Thorndike
Director, Fiduciary Incorporated Company
Jack L. Treynor
Investment Adviser and Consultant
