<PAGE>
Information Age Portfolio as of August 31, 1998
PORTFOLIO OF INVESTMENTS
(Expressed in United States Dollars)
Common Stocks -- 88.6%
Security Shares Value
- --------------------------------------------------------------------------------
Advertising -- 3.3%
- --------------------------------------------------------------------------------
Catalina Marketing Corp./(1)/ 10,000 $ 420,625
Omnicom Group, Inc. 18,000 857,250
Young and Rubicam, Inc./(1)/ 15,000 458,438
- --------------------------------------------------------------------------------
$1,736,313
- --------------------------------------------------------------------------------
Aerospace and Defense -- 1.6%
- --------------------------------------------------------------------------------
General Motors Corp., Class H 24,000 $ 867,000
- --------------------------------------------------------------------------------
$ 867,000
- --------------------------------------------------------------------------------
Broadcasting and Cable -- 10.9%
- --------------------------------------------------------------------------------
Cable and Wireless Communications/(1)(2)/ 100,000 $ 881,158
Comcast Corp., Class A 18,000 672,750
Cox Communications, Inc., Class A/(1)/ 20,000 840,000
Granada Group PLC/(2)/ 70,000 930,792
Liberty Media Group, Class A/(1)/ 10,000 326,875
MediaOne Group, Inc./(1)/ 8,000 328,000
Mediaset Spa/(2)/ 140,000 794,329
Tele-Communications, Inc., Ser. A/(1)/ 5,000 165,000
TV Francaise/(2)/ 6,100 904,240
- --------------------------------------------------------------------------------
$5,843,144
- --------------------------------------------------------------------------------
Business Services - Miscellaneous -- 3.2%
- --------------------------------------------------------------------------------
Galileo International, Inc. 20,000 $ 653,750
Half (Robert) International, Inc./(1)/ 6,000 288,000
Pittston Brink's Group 25,000 784,375
- --------------------------------------------------------------------------------
$1,726,125
- --------------------------------------------------------------------------------
Communications Services -- 14.7%
- --------------------------------------------------------------------------------
Ameritech Corp. 8,000 $ 377,000
Bezek/(2)/ 250,000 748,889
British Telecommunications PLC/(2)/ 125,000 1,705,619
City Telecom (HK) Ltd./(2)/ 2,000,000 64,523
Energis/(1)(2)/ 75,000 1,047,581
GTE Corp. 19,000 950,000
SBC Communications, Inc. 20,000 760,000
Telecom Italia Spa/(2)/ 350,000 1,738,827
Videsh Sanchar Nigam Ltd., GDR/(1)(2)/ 50,000 487,500
- --------------------------------------------------------------------------------
$7,879,939
- --------------------------------------------------------------------------------
Computer Software -- 7.2%
- --------------------------------------------------------------------------------
Computer Associates International, Inc. 15,000 $ 405,000
Documentum, Inc./(1)/ 24,000 858,000
Emultek, Ltd./(1)/ 46,700 99,238
J.D. Edwards, Inc./(1)/ 20,000 810,000
Misys PLC/(2)/ 21,000 945,464
Oracle Corp./(1)/ 20,000 398,750
Platinum Technology, Inc./(1)/ 15,000 281,250
Sendit AB/(1)(2)/ 3,600 69,201
- --------------------------------------------------------------------------------
$3,866,903
- --------------------------------------------------------------------------------
Computers and Business Equipment -- 3.8%
- --------------------------------------------------------------------------------
EMC Corp./(1)/ 5,000 $ 225,938
Lexmark International Group, Inc./(1)/ 15,000 908,438
Xerox Corp. 10,000 878,125
- --------------------------------------------------------------------------------
$2,012,501
- --------------------------------------------------------------------------------
Drugs -- 1.5%
- --------------------------------------------------------------------------------
Genzyme Corp., Class A/(1)/ 10,000 $ 270,000
Quintiles Transnational Corp./(1)/ 15,000 536,250
- --------------------------------------------------------------------------------
$ 806,250
- --------------------------------------------------------------------------------
Electrical Equipment -- 1.8%
- --------------------------------------------------------------------------------
Matsushita Communication Industrial Co./(2)/ 28,000 $ 944,066
- --------------------------------------------------------------------------------
$ 944,066
- --------------------------------------------------------------------------------
Electronics - Instruments -- 3.3%
- --------------------------------------------------------------------------------
Avimo Group Ltd./(2)/ 400,000 $ 428,652
Dae Duck Electronics, Co./(2)/ 3,300 167,964
Philips Electronics/(2)/ 15,000 981,227
Sam Young Electronics Co./(2)/ 33,400 184,500
- --------------------------------------------------------------------------------
$1,762,343
- --------------------------------------------------------------------------------
Electronics - Semiconductors -- 3.7%
- --------------------------------------------------------------------------------
Alcatel Alsthom/(2)/ 5,000 $ 809,871
Analog Devices, Inc./(1)/ 50,000 703,125
Micron Technology, Inc. 20,000 455,000
- --------------------------------------------------------------------------------
$1,967,996
- --------------------------------------------------------------------------------
Entertainment -- 1.7%
- --------------------------------------------------------------------------------
Sony Corp./(2)/ 5,000 $ 365,914
See notes to financial statements
14
<PAGE>
Information Age Portfolio as of August 31, 1998
PORTFOLIO OF INVESTMENTS CONT'D
(Expressed in United States Dollars)
Security Shares Value
- --------------------------------------------------------------------------------
Entertainment (continued)
- --------------------------------------------------------------------------------
Time Warner, Inc. 7,000 $ 562,625
- --------------------------------------------------------------------------------
$ 928,539
- --------------------------------------------------------------------------------
Information Services -- 12.8%
- --------------------------------------------------------------------------------
Acxiom Corp. 40,000 $ 802,500
Automatic Data Processing, Inc. 13,000 828,750
Azlan Group PLC/(1)(2)/ 800,000 643,891
Equant NV/(2)/ 25,000 1,043,080
Formula Systems (1985), Ltd. ADR/(1)/ 20,000 490,000
Forsoft Ltd./(1)/ 23,000 345,000
Gartner Group, Inc., Class A/(1)/ 32,000 740,000
HBO and Co. 10,000 212,500
Micro Focus Group PLC/(1)(2)/ 75,000 446,448
Reynolds & Reynolds, Inc., Class A 20,000 252,500
SunGard Data Systems, Inc./(1)/ 33,000 1,045,688
- --------------------------------------------------------------------------------
$ 6,850,357
- --------------------------------------------------------------------------------
Investment Services -- 3.1%
- --------------------------------------------------------------------------------
E*Trade Group, Inc./(1)/ 24,000 $ 399,000
Raymond James Financial Corp. 30,000 515,625
Schwab (Charles) and Co., Inc. 25,000 746,875
- --------------------------------------------------------------------------------
$ 1,661,500
- --------------------------------------------------------------------------------
Medical Products -- 0.3%
- --------------------------------------------------------------------------------
Cytyc Corp./(1)/ 20,000 $ 160,000
- --------------------------------------------------------------------------------
$ 160,000
- --------------------------------------------------------------------------------
Printing and Business Products -- 1.2%
- --------------------------------------------------------------------------------
Valassis Communications, Inc./(1)/ 22,000 $ 655,875
- --------------------------------------------------------------------------------
$ 655,875
- --------------------------------------------------------------------------------
Publishing -- 12.5%
- --------------------------------------------------------------------------------
Central Newspapers, Inc., Class A 5,000 $ 310,000
Dow Jones & Co., Inc. 8,000 398,500
E.W. Scripps Co. 10,000 471,875
McGraw-Hill Companies, Inc. (The) 4,000 305,000
New York Times Co. 23,000 667,000
News Corp. Ltd./(2)/ 150,394 918,727
Pearson PLC/(2)/ 105,000 1,748,315
Poligrafici Editoriale Spa/(2)/ 325,000 801,892
Springer Alex Verlag AG/(2)/ 800 491,440
Times Mirror Co., Class A 10,000 571,875
- --------------------------------------------------------------------------------
$ 6,684,624
- --------------------------------------------------------------------------------
Telephone Utilities -- 2.0%
- --------------------------------------------------------------------------------
Securicor PLC/(2)/ 125,000 $ 1,085,727
- --------------------------------------------------------------------------------
$ 1,085,727
- --------------------------------------------------------------------------------
Total Common Stocks
(identified cost $44,937,604) $47,439,202
- --------------------------------------------------------------------------------
Rights -- 0.0%
Security Shares Value
- --------------------------------------------------------------------------------
Samsung Electronics/(1)(2)/, 0.00%, 1/1/80 1,384 $ 16,159
- --------------------------------------------------------------------------------
Total Rights
(identified cost $0) $ 16,159
- --------------------------------------------------------------------------------
Mortgage Pass-Throughs -- 5.5%
Principal
Amount
Security (000's omitted) Value
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.,
5.70%, 9/1/98 $ 2,946 $ 2,946,000
- --------------------------------------------------------------------------------
Total Mortgage Pass-Throughs
(identified cost $2,946,000) $ 2,946,000
- --------------------------------------------------------------------------------
Total Investments -- 94.1%
(identified cost $47,883,604) $50,401,361
- --------------------------------------------------------------------------------
Other Assets, Less Liabilities -- 5.9% $ 3,154,986
- --------------------------------------------------------------------------------
Net Assets -- 100% $53,556,347
- --------------------------------------------------------------------------------
ADR -- American Depositary Receipt
GDR -- Global Depositary Receipt
/(1)/Non-income producing security.
/(2)/Foreign security.
See notes to financial statements
15
<PAGE>
Information Age Portfolio as of August 31, 1998
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
As of August 31, 1998
(Expressed in United States Dollars)
<S> <C>
Assets
- ----------------------------------------------------------------------------------------
Investments, at value (identified cost, $47,883,604) $ 50,401,361
Cash 683
Foreign currency, at value
(identified cost, $2,729) 2,729
Receivable for investments sold 3,680,843
Dividends and interest receivable 79,857
Deferred organization expenses 2,715
- ----------------------------------------------------------------------------------------
Total assets $ 54,168,188
- ----------------------------------------------------------------------------------------
Liabilities
- ----------------------------------------------------------------------------------------
Payable for investments purchased $ 539,224
Payable for open forward foreign exchange currency contracts 21,264
Other accrued expenses 51,353
- ----------------------------------------------------------------------------------------
Total liabilities $ 611,841
- ----------------------------------------------------------------------------------------
Net Assets applicable to investors' interest in Portfolio $ 53,556,347
- ----------------------------------------------------------------------------------------
Sources of Net Assets
- ----------------------------------------------------------------------------------------
Net proceeds from capital contributions and withdrawals $ 51,043,294
Net unrealized appreciation (computed on the basis of identified cost) 2,513,053
- ----------------------------------------------------------------------------------------
Total $ 53,556,347
- ----------------------------------------------------------------------------------------
<CAPTION>
Statement of Operations
For the Year Ended
August 31, 1998
(Expressed in United States Dollars)
<S> <C>
Investment Income
- ----------------------------------------------------------------------------------------
Dividends (net of foreign taxes, $69,824) $ 665,794
Interest 167,605
- ----------------------------------------------------------------------------------------
Total investment income $ 833,399
- ----------------------------------------------------------------------------------------
Expenses
- ----------------------------------------------------------------------------------------
Investment adviser fee $ 432,808
Administration fee 144,501
Trustees fees and expenses 13,176
Custodian fee 208,872
Legal and accounting services 24,794
Amortization of organization expenses 1,248
Miscellaneous 3,393
- ----------------------------------------------------------------------------------------
Total expenses $ 828,792
- ----------------------------------------------------------------------------------------
Net investment income $ 4,607
- ----------------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) on Investments
- ----------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 5,969,260
Foreign currency transactions and forward foreign currency
exchange contracts (99,004)
- ----------------------------------------------------------------------------------------
Net realized gain $ 5,870,256
- ----------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ (4,212,723)
Foreign currency and forward foreign currency exchange contracts (6,807)
- ----------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) $ (4,219,530)
- ----------------------------------------------------------------------------------------
Net realized and unrealized gain $ 1,650,726
- ----------------------------------------------------------------------------------------
Net increase in net assets from operations $ 1,655,333
- ----------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
16
<PAGE>
Information Age Portfolio as of August 31, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets (Expressed in United States Dollars)
<TABLE>
<CAPTION>
Increase (Decrease) Year Ended Year Ended
in Net Assets August 31, 1998 August 31, 1997
- --------------------------------------------------------------------------------
<S> <C> <C>
From operations --
Net investment income (loss) $ 4,607 $ (19,786)
Net realized gain 5,870,256 5,605,068
Net change in unrealized
appreciation (depreciation) (4,219,530) 4,259,017
- --------------------------------------------------------------------------------
Net increase in net assets from operations
$ 1,655,333 $ 9,844,299
- --------------------------------------------------------------------------------
Capital transactions --
Contributions $ 23,294,915 $ 19,061,455
Withdrawals (22,767,845) (20,235,195)
- --------------------------------------------------------------------------------
Net increase (decrease) in net assets from
capital transactions $ 527,070 $ (1,173,740)
- --------------------------------------------------------------------------------
Net increase in net assets $ 2,182,403 $ 8,670,559
- --------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------
At beginning of year $ 51,373,944 $ 42,703,385
- --------------------------------------------------------------------------------
At end of year $ 53,556,347 $ 51,373,944
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
17
<PAGE>
Information Age Portfolio as of August 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data (Expressed in United States Dollars)
<TABLE>
<CAPTION>
Year Ended August 31,
------------------------------------------------
1998 1997 1996/(1)/
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Ratios to average daily net assets
- -----------------------------------------------------------------------------------------------------
Expenses 1.44% 1.48% 1.52%/(2)/
Net investment income (loss) 0.01% (0.04)% 0.07%/(2)/
Portfolio Turnover 157% 160% 115%
- -----------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $53,556 $51,374 $42,703
- -----------------------------------------------------------------------------------------------------
</TABLE>
/(1)/ For the period from the start of business, September 18, 1995, to
August 31, 1996.
/(2)/ Annualized.
See notes to financial statements
18
<PAGE>
Information Age Portfolio as of August 31, 1998
NOTES TO FINANCIAL STATEMENTS
(Expressed in United States Dollars)
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 are being amortized on the straight-line
basis over five years.
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 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 Financial Futures -- 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 upon 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
19
<PAGE>
Information Age Portfolio as of August 31, 1998
NOTES TO FINANCIAL STATEMENTS CONT'D
(Expressed in United States Dollars)
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 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.
I Other -- Investment transactions are accounted for on a trade date basis.
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.
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 year ended August 31, 1998, the
adviser fee was 0.75% of average net assets for such period and amounted to
$432,808. 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 year ended August 31, 1998, the administration fee was 0.25% of average
net assets for such period and amounted to $144,501. Except as to the 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 year ended
August 31, 1998, no significant amounts have been deferred.
Certain of the officers and Trustees of the Portfolio are officers and
directors/trustees of the above organizations.
3 Investment Transactions
------------------------------------------------------------------------------
Purchase and sales of investments, other than short-term obligations and
purchased option transactions, aggregated $85,568,457 and $89,085,389,
respectively.
4 Federal Income Tax Basis of Investments
------------------------------------------------------------------------------
The cost and unrealized appreciation/depreciation in value of the investments
owned at August 31, 1998, are as follows:
Aggregate cost $ 47,959,810
------------------------------------------------------------------------------
Gross unrealized appreciation $ 7,053,723
Gross unrealized depreciation (4,612,172)
------------------------------------------------------------------------------
Net unrealized appreciation $ 2,441,551
------------------------------------------------------------------------------
20
<PAGE>
Information Age Portfolio as of August 31, 1998
NOTES TO FINANCIAL STATEMENTS CONT'D
(Expressed in United States Dollars)
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.
A summary of obligations under these financial instruments at August 31,
1998 is as follows:
Forward Foreign Currency Exchange Contracts
Sales
- --------------------------------------------------------------------------------
Net Unrealized
Settlement In Exchange For Appreciation
Date Deliver (in U.S. dollars) (Depreciation)
- --------------------------------------------------------------------------------
9/1/98 Australian Dollar
849,977 $ 478,622 $ (7,104)
- --------------------------------------------------------------------------------
9/3/98 Great British Pound
483,494 796,411 (14,180)
- --------------------------------------------------------------------------------
9/1/98 Hong Kong Dollar
920,943 118,817 20
- --------------------------------------------------------------------------------
$1,393,850 $(21,264)
- --------------------------------------------------------------------------------
7 Line of Credit
------------------------------------------------------------------------------
The Portfolio participates with other portfolios and funds managed by BMR and
EVM and its affiliates in a $100 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 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
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 year ended August 31, 1998.
21
<PAGE>
Information Age Portfolio as of August 31, 1998
INDEPENDENT ACCOUNTANTS' REPORT
To the Trustees and Shareholders of
Information Age Portfolio:
- --------------------------------------------------------------------------------
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments of Information Age Portfolio, as of August 31,
1998, and the related statement of operations for the year then ended, and the
statements of changes in net assets and the supplementary data for each of the
periods indicated therein. 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 at August
31, 1998 by correspondence with the custodian and brokers. 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 audits provide 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 at
August 31, 1998, and the results of its operations for the year then ended, and
changes in its net assets and supplementary data for each of the periods
indicated therein, in conformity with United States generally accepted
accounting principles.
PricewaterhouseCoopers LLP
Chartered Accountants
Toronto, Canada
October 2, 1998
22
<PAGE>
Information Age Portfolio as of August 31, 1998
INVESTMENT MANAGEMENT
Information Age Portfolio
<TABLE>
<S> <C>
Officers Independent Trustees
James B. Hawkes Hon. Edward K.Y. Chen
President and Trustee Professor and Director, Center for Asian Studies,
University of Hong Kong
Michel Normandeau
Vice President Donald R. Dwight
President, Dwight Partners, Inc.
Raymond O'Neill
Vice President Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment Banking,
Duncan W. Richardson Harvard University Graduate School of
Vice President and Business Administration
Co-Portfolio Manager
Norton H. Reamer
Hon. Robert Lloyd George Chairman and Chief Executive Officer,
Vice President, Trustee and United Asset Management Corporation
Co-Portfolio Manager
John L. Thorndike
James L. O'Connor Formerly Director, Fiduciary Company Incorporated
Treasurer
Jack L. Treynor
Alan R. Dynner Investment Adviser and Consultant
Secretary
</TABLE>
23
