<PAGE>
INFORMATION AGE PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED)
(EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<S> <C> <C>
COMMON STOCKS -- 94.9%
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
- ------------------------------------------------------------------------
Advertising -- 2.7%
- ------------------------------------------------------------------------
Catalina Marketing Corp.(1) 10,000 $ 643,750
Omnicom Group, Inc. 16,000 1,060,000
Young and Rubicam, Inc.(1) 3,000 113,250
- ------------------------------------------------------------------------
$ 1,817,000
- ------------------------------------------------------------------------
Biotechnology -- 1.0%
- ------------------------------------------------------------------------
Transkaryotic Therapies, Inc.(1)(2) 22,000 $ 643,500
- ------------------------------------------------------------------------
$ 643,500
- ------------------------------------------------------------------------
Broadcasting and Cable -- 14.6%
- ------------------------------------------------------------------------
Cable and Wireless Communications(1)(2) 100,000 $ 1,179,505
CD Radio, Inc.(1) 30,000 652,500
Clear Channel Communications, Inc.(1) 10,000 600,000
Comcast Corp., Class A 11,000 780,313
Cox Communications, Inc., Class A(1) 11,000 778,250
Fox Entertainment Group, Inc.(1) 25,000 650,000
Infinity Broadasting Corp.(1) 10,000 237,500
Liberty Media Group, Class A(1) 2,000 107,750
MediaOne Group, Inc.(1) 27,000 1,471,500
Mediaset Spa(2) 140,000 1,325,263
Telewest Communications PLC(1)(2) 50,000 217,804
TV Francaise(2) 6,100 1,092,537
Univision Communications, Inc.(1) 17,000 692,750
- ------------------------------------------------------------------------
$ 9,785,672
- ------------------------------------------------------------------------
Business Services - Miscellaneous -- 2.7%
- ------------------------------------------------------------------------
Half (Robert) International, Inc.(1) 14,000 $ 504,000
Secom Co. Ltd.(2) 17,000 1,318,096
- ------------------------------------------------------------------------
$ 1,822,096
- ------------------------------------------------------------------------
Chemicals -- 1.2%
- ------------------------------------------------------------------------
Shin-Etsu Chemical Co.(2) 35,000 $ 819,127
- ------------------------------------------------------------------------
$ 819,127
- ------------------------------------------------------------------------
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
- ------------------------------------------------------------------------
Communications Equipment -- 1.2%
- ------------------------------------------------------------------------
Cisco Systems, Inc.(1) 4,000 $ 391,250
Qualcom, Inc.(1) 6,000 438,000
- ------------------------------------------------------------------------
$ 829,250
- ------------------------------------------------------------------------
Communications Services -- 21.9%
- ------------------------------------------------------------------------
3Com Corp.(1) 10,000 $ 314,375
Ameritech Corp. 7,000 457,625
BCE, Inc. 10,000 404,375
Bezeq(1)(2) 250,000 873,314
British Telecommunications PLC(2) 125,000 2,163,025
City Telecom (HK) Ltd.(2) 2,000,000 131,652
Energis(1)(2) 40,000 960,900
Estonian Telecom Ltd., GDR(1)(2) 10,100 214,625
GTE Corp. 15,000 973,125
Nippon Telegraph and Telephone
Corp.(1)(2) 130 1,070,337
NTT Mobile Communication Network,
Inc.(2) 200 811,550
Okinawa Cellular Telephone Co.(2) 100 715,579
Panafon Hellenic Registered S GDS(1)(2) 25,500 813,450
SBC Communications, Inc. 20,000 1,057,500
Sprint Corp. 14,000 1,201,375
Telecom Italia Spa(2) 250,000 1,696,547
Videsh Sanchar Nigam Ltd., GDR(1)(2) 40,000 383,000
Videsh Sanchar Nigam Ltd., GDR(2) 50,000 478,750
- ------------------------------------------------------------------------
$ 14,721,104
- ------------------------------------------------------------------------
Computer Software -- 5.9%
- ------------------------------------------------------------------------
BMC Software, Inc.(1) 10,000 $ 408,750
Computer Associates International, Inc. 13,000 546,000
Documentum, Inc.(1) 30,000 641,250
DST Systems, Inc.(1) 5,000 271,250
Misys PLC(2) 105,000 1,004,741
Network Associates, Inc.(1) 10,000 470,000
Oracle Corp.(2) 10,000 558,750
Seagull Holding NV(1)(2) 1,000 16,097
Sendit AB(1)(2) 3,600 70,355
- ------------------------------------------------------------------------
$ 3,987,193
- ------------------------------------------------------------------------
Computers and Business Equipment -- 5.2%
- ------------------------------------------------------------------------
EMC Corp.(1) 2,000 $ 204,750
Lexmark International Group, Inc.(1) 12,000 1,238,250
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
INFORMATION AGE PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
(EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
SECURITY SHARES VALUE
- ------------------------------------------------------------------------
<S> <C> <C>
Computers and Business Equipment (continued)
- ------------------------------------------------------------------------
NEC Corp.(2) 70,000 $ 705,981
Xerox Corp. 24,000 1,324,500
- ------------------------------------------------------------------------
$ 3,473,481
- ------------------------------------------------------------------------
Electrical Equipment -- 0.9%
- ------------------------------------------------------------------------
Hitachi Ltd.(2) 100,000 $ 631,393
- ------------------------------------------------------------------------
$ 631,393
- ------------------------------------------------------------------------
Electronics -- 2.7%
- ------------------------------------------------------------------------
C. Uyemura & Co. Ltd.(2) 20,000 $ 626,342
Nikon Corp.(2) 75,000 1,048,112
S.O.I.T.E.C.(2) 5,000 131,856
- ------------------------------------------------------------------------
$ 1,806,310
- ------------------------------------------------------------------------
Electronics - Instruments -- 3.0%
- ------------------------------------------------------------------------
Avimo Group Ltd.(2) 400,000 $ 571,196
Dae Duck Electronics, Co.(2) 99 7,121
Elec and Eltek International Holdings
Ltd.(2) 3,750,000 716,342
Toshiba Corp.(2) 110,000 681,568
- ------------------------------------------------------------------------
$ 1,976,227
- ------------------------------------------------------------------------
Electronics - Semiconductors -- 1.7%
- ------------------------------------------------------------------------
Analog Devices, Inc.(1) 25,000 $ 626,563
Samsung Electronics(1)(2) 1,458 102,721
Winbond Electronics Corp. GDR(1)(2) 32,000 433,600
- ------------------------------------------------------------------------
$ 1,162,884
- ------------------------------------------------------------------------
Entertainment -- 0.6%
- ------------------------------------------------------------------------
Time Warner, Inc. 6,000 $ 387,000
- ------------------------------------------------------------------------
$ 387,000
- ------------------------------------------------------------------------
Entertainment and Leisure -- 1.4%
- ------------------------------------------------------------------------
Mattel, Inc. 35,000 $ 923,125
- ------------------------------------------------------------------------
$ 923,125
- ------------------------------------------------------------------------
Information Services -- 8.8%
- ------------------------------------------------------------------------
Acxiom Corp.(1) 45,000 $ 1,077,188
Automatic Data Processing, Inc. 26,000 1,033,500
Azlan Group PLC(1)(2) 800,000 698,254
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
- ------------------------------------------------------------------------
Information Services (continued)
- ------------------------------------------------------------------------
Computer Sciences Corp. 10,000 $ 666,250
Forsoft Ltd.(1) 23,000 219,938
Gartner Group, Inc., Class A(1) 38,000 852,625
SunGard Data Systems, Inc.(1) 35,000 1,386,875
- ------------------------------------------------------------------------
$ 5,934,630
- ------------------------------------------------------------------------
Investment Services -- 0.4%
- ------------------------------------------------------------------------
E*Trade Group, Inc.(1) 2,000 $ 91,750
Schwab (Charles) and Co., Inc. 2,000 149,125
- ------------------------------------------------------------------------
$ 240,875
- ------------------------------------------------------------------------
Medical Products -- 1.0%
- ------------------------------------------------------------------------
Respironics, Inc.(1) 50,000 $ 640,625
- ------------------------------------------------------------------------
$ 640,625
- ------------------------------------------------------------------------
Miscellaneous -- 1.5%
- ------------------------------------------------------------------------
Sepracor, Inc.(1) 8,000 $ 998,000
- ------------------------------------------------------------------------
$ 998,000
- ------------------------------------------------------------------------
Oil and Gas - Equipment and Services -- 0.8%
- ------------------------------------------------------------------------
Input/Output, Inc.(1) 100,000 $ 562,500
- ------------------------------------------------------------------------
$ 562,500
- ------------------------------------------------------------------------
Printing and Business Products -- 2.0%
- ------------------------------------------------------------------------
Valassis Communications, Inc.(1) 28,000 $ 1,344,000
- ------------------------------------------------------------------------
$ 1,344,000
- ------------------------------------------------------------------------
Publishing -- 11.4%
- ------------------------------------------------------------------------
Central Newspapers, Inc., Class A 10,000 $ 350,000
McGraw-Hill Companies, Inc. (The) 3,000 328,313
Mirror Group PLC(2) 400,000 1,242,764
New York Times Co. 15,000 465,000
News Corp. Ltd.(2) 150,636 1,054,505
Pearson PLC(2) 105,000 2,305,438
South China Morning Post (Holdings)
Ltd.(2) 1,500,000 643,739
Springer Alex Verlag AG(2) 1,128 1,239,446
- ------------------------------------------------------------------------
$ 7,629,205
- ------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
INFORMATION AGE PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
(EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
SECURITY SHARES VALUE
- ------------------------------------------------------------------------
<S> <C> <C>
Specialty Chemicals and Materials -- 0.6%
- ------------------------------------------------------------------------
Millipore Corp. 15,000 $ 418,125
- ------------------------------------------------------------------------
$ 418,125
- ------------------------------------------------------------------------
Telephone Utilities -- 1.7%
- ------------------------------------------------------------------------
Securicor PLC(2) 125,000 $ 1,168,094
- ------------------------------------------------------------------------
$ 1,168,094
- ------------------------------------------------------------------------
Total Common Stocks
(identified cost $49,248,687) $ 63,721,416
- ------------------------------------------------------------------------
MORTGAGE PASS-THROUGHS -- 5.7%
<CAPTION>
PRINCIPAL
AMOUNT
SECURITY (000 OMITTED) VALUE
<S> <C> <C>
- ------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., 4.70%,
3/1/99 $ 3,808 $ 3,808,000
- ------------------------------------------------------------------------
Total Mortgage Pass-Throughs
(identified cost $3,808,000) $ 3,808,000
- ------------------------------------------------------------------------
Total Investments -- 100.6%
(identified cost $53,056,687) $ 67,529,416
- ------------------------------------------------------------------------
Other Assets, Less Liabilities -- (0.6)% $ (373,167)
- ------------------------------------------------------------------------
Net Assets -- 100% $ 67,156,249
- ------------------------------------------------------------------------
</TABLE>
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
(1) Non-income producing security.
(2) Foreign security.
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
INFORMATION AGE PORTFOLIO AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF FEBRUARY 28, 1999
(EXPRESSED IN UNITED STATES DOLLARS)
<S> <C>
Assets
- ------------------------------------------------------
Investments, at value (identified cost,
$53,056,687) $ 67,529,416
Cash 1,839
Receivable for investments sold 892,078
Dividends and interest receivable 11,900
Deferred organization expenses 2,106
- ------------------------------------------------------
TOTAL ASSETS $ 68,437,339
- ------------------------------------------------------
Liabilities
- ------------------------------------------------------
Payable for investments purchased $ 1,250,464
Payable to affiliate for Trustees' fees 1,491
Other accrued expenses 29,135
- ------------------------------------------------------
TOTAL LIABILITIES $ 1,281,090
- ------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS'
INTEREST IN PORTFOLIO $ 67,156,249
- ------------------------------------------------------
Sources of Net Assets
- ------------------------------------------------------
Net proceeds from capital contributions
and withdrawals $ 52,699,780
Net unrealized appreciation (computed on
the basis of identified cost) 14,456,469
- ------------------------------------------------------
TOTAL $ 67,156,249
- ------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
FEBRUARY 28, 1999
(EXPRESSED IN UNITED STATES DOLLARS)
<S> <C>
Investment Income
- ------------------------------------------------------
Dividends (net of foreign taxes, $6,686) $ 119,988
Interest 109,289
- ------------------------------------------------------
TOTAL INVESTMENT INCOME $ 229,277
- ------------------------------------------------------
Expenses
- ------------------------------------------------------
Investment adviser fee $ 225,056
Administration fee 74,938
Trustees fees and expenses 16,736
Custodian fee 91,486
Legal and accounting services 12,713
Amortization of organization expenses 609
Miscellaneous 630
- ------------------------------------------------------
TOTAL EXPENSES $ 422,168
- ------------------------------------------------------
NET INVESTMENT LOSS $ (192,891)
- ------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
- ------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $ 2,714,865
Foreign currency transactions and
forward foreign currency exchange
contracts (30,318)
- ------------------------------------------------------
NET REALIZED GAIN $ 2,684,547
- ------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $ 11,954,972
Foreign currency (11,556)
- ------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $ 11,943,416
- ------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $ 14,627,963
- ------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 14,435,072
- ------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
INFORMATION AGE PORTFOLIO AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENT OF CHANGES IN NET ASSETS
(EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
Increase (Decrease) FEBRUARY 28, 1999 YEAR ENDED
in Net Assets (UNAUDITED) AUGUST 31, 1998
<S> <C> <C>
- -------------------------------------------------------------------------------
From operations --
Net investment income (loss) $ (192,891) $ 4,607
Net realized gain 2,684,547 5,870,256
Net change in unrealized appreciation
(depreciation) 11,943,416 (4,219,530)
- -------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 14,435,072 $ 1,655,333
- -------------------------------------------------------------------------------
Capital transactions --
Contributions $ 7,750,585 $ 23,294,915
Withdrawals (8,585,755) (22,767,845)
- -------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL TRANSACTIONS $ (835,170) $ 527,070
- -------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS $ 13,599,902 $ 2,182,403
- -------------------------------------------------------------------------------
Net Assets
- -------------------------------------------------------------------------------
At beginning of period $ 53,556,347 $ 51,373,944
- -------------------------------------------------------------------------------
AT END OF PERIOD $ 67,156,249 $ 53,556,347
- -------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
INFORMATION AGE PORTFOLIO AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA (EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED
FEBRUARY YEAR ENDED AUGUST 31,
28, 1999 -------------------------------------
(UNAUDITED) 1998 1997 1996(1)
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- --------------------------------------------------------------------------------------------------
Expenses 1.42%(2) 1.44% 1.48% 1.52%(2)
Net investment income (loss) (0.65)%(2) 0.01% (0.04)% 0.07%(2)
Portfolio Turnover 55% 157% 160% 115%
- --------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S OMITTED) $ 67,156 $ 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
14
<PAGE>
INFORMATION AGE PORTFOLIO AS OF FEBRUARY 28, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(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 realized gains and losses on
investments. That portion of
15
<PAGE>
INFORMATION AGE PORTFOLIO AS OF FEBRUARY 28, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
(EXPRESSED IN UNITED STATES DOLLARS)
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.
J Interim Financial Statements -- The interim financial statements relating to
February 28, 1999 and for the six-month period then ended have not been
audited by independent certified public accountants, but in the opinion of
the Portfolio's management, reflect all adjustments, consisting only of
normal recurring adjustments, necessary for the fair presentation of the
financial statements.
2 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 six months ended February 28,
1999, the adviser fee was 0.75% (annualized) of average net assets for such
period and amounted to $225,056. 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 six months ended February 28, 1999, the administration
fee was 0.25% (annualized) of average net assets for such period and amounted
to $74,938. 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 six months
ended February 28, 1999, 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
- -------------------------------------------
Purchases and sales of investments, other than short-term obligations and
purchased option transactions, aggregated $32,444,721 and $30,848,503,
respectively, for the six months ended February 28, 1999.
16
<PAGE>
INFORMATION AGE PORTFOLIO AS OF FEBRUARY 28, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
(EXPRESSED IN UNITED STATES DOLLARS)
4 Federal Income Tax Basis of Investments
- -------------------------------------------
The cost and unrealized appreciation/depreciation in value of the investments
owned at February 28, 1999, are as follows:
<TABLE>
<S> <C>
AGGREGATE COST $ 53,056,687
- ------------------------------------------------------
Gross unrealized appreciation $ 16,693,034
Gross unrealized depreciation (2,220,305)
- ------------------------------------------------------
NET UNREALIZED APPRECIATION $ 14,472,729
- ------------------------------------------------------
</TABLE>
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.
At February 28, 1999, there were no outstanding obligations under these
financial instruments.
7 Line of Credit
- -------------------------------------------
The Portfolio participates with other portfolios and funds managed by BMR and
EVM and its affiliates in a $130 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 six months ended February 28, 1999.
17
<PAGE>
Information Age Portfolio
Officers
James B. Hawkes
President and Trustee
Duncan W. Richardson
Vice President and
Co-Portfolio Manager
Hon. Robert Lloyd George
Vice President, Trustee
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Independent Trustees
Hon. Edward K.Y. Chen
President of Lingnan College,
Hong Kong
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 Administration
Norton H. Reamer
Chairman and Chief Executive Officer,
United Asset Management Corporation
Lynn A. Stout
Professor of Law,
Georgetown University Law Center
John L. Thorndike
Formerly Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant