-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HIu/mruxLn/95sQ+Vba3FsEXUNqhcJYU2lAx3DTDTUhEv4K5quZ6DhUBE9HSWuOl KxWIPwR5ccN2/OllYVV9JA== 0000928816-96-000107.txt : 19960424 0000928816-96-000107.hdr.sgml : 19960424 ACCESSION NUMBER: 0000928816-96-000107 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960229 FILED AS OF DATE: 19960422 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: EATON VANCE GROWTH TRUST CENTRAL INDEX KEY: 0000102816 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 042325690 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-01241 FILM NUMBER: 96549361 BUSINESS ADDRESS: STREET 1: 24 FEDERAL ST CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6174828260 FORMER COMPANY: FORMER CONFORMED NAME: EATON VANCE GROWTH FUND INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: VANCE SANDERS COMMON STOCK FUND INC DATE OF NAME CHANGE: 19820915 FORMER COMPANY: FORMER CONFORMED NAME: BOSTON STOCK FUND INC DATE OF NAME CHANGE: 19730619 N-30D 1 EV CLASSIC GREATER CHINA GROWTH SEMI-ANNUAL EV Classic Greater China Growth Fund [LOGO] [PHOTO OF CHINESE CITY WITH HARBOR OMITTED] Semi-Annual Shareholder Report February 29, 1996 To Shareholders EV Classic Greater China Growth Fund had a total return of 8.5% for the six months ended February 29, 1996. That performance was the result of a rise in net asset value per share from $8.12 on August 31, 1995, to $8.81 on February 29, 1996, and does not include the effect of the Fund's 1 percent contingent deferred sales charge on shareholders redeeming within the first year. By comparison, the Peregrine Asia 100 - an unmanaged index of common stocks in the Greater China region - rose 6.2% during the same period. China remains a favorite target for foreign investment... China continued to attract foreign investors in the past year. Foreign investment in China rose to $40 billion last year, a 30% increase from the previous year, according to China's State Planning Commission. That increase was all the more remarkable in light of China's efforts to moderate the rate of economic growth and make inroads on inflation. Hong Kong, Singapore rank high in competitiveness... In December, a survey conducted by the Heritage Foundation named Hong Kong the freest economy in the world. The survey of 142 nations studied government policies on trade, taxation, foreign investment, and money supply, as well as the extent to which businesses engage in black market activity. Singapore, Hong Kong's China-region neighbor ranked second in the survey. Another survey, conducted in September by the Switzerland-based World Economic Forum, ranked Hong Kong the third most competitive economy in the world, behind the U.S. and Singapore. Greater China increasingly viewed as a model for emerging nations.... These surveys are important because they formally recognize the extent to which the governments of these Greater China nations are committed to the further development of market economies. Unlike some other emerging nations which are hampered by government interference, anti-growth bureaucracy, and burdensome tariffs, these nations are promoting free enterprise. Naturally, past trends cannot guarantee future developments. But, with the active encouragement of these Greater China nations, companies should continue to post impressive growth. We expect that Greater China Growth Portfolio will share in that growth. [PHOTO OF JAMES B. HAWKES OMMITTED] Sincerely, /S/James B. Hawkes James B. Hawkes, President April 20, 1996 Management Discussion: Adaline M. Ko An interview with Adaline M. Ko, Director of Lloyd George Investment Management, and Investment Adviser to the Greater China Growth Portfolio. Q: Adaline, how have the China region markets fared during the past six months? A: The China region markets have generated an impressive turnaround in recent months, although the six-month period got off to a rather difficult start. November was especially turbulent for the China region, with a renewal of the "tequila effect" in many emerging markets, first evidenced a year ago when Mexico threatened to default. In addition, the markets were disappointed by the ongoing U.S. budget stalemate, which dampened hopes for lower interest rates. Finally, markets such as Korea and Taiwan suffered from internal and external political pressures, which dampened investors' enthusiasm. [PHOTO OF ADALINE M. KO OMMITTED, CAPTION BELOW PHOTO READS:] Adaline M. Ko Fortunately, market sentiment turned significantly more positive in December as the Federal Reserve lowered U.S. interest rates. And in the first two months of 1996, several markets logged handsome gains: The Philippines rose 13.6%; Hong Kong, 11.1%; Malaysia, 9.9%; and Singapore, 6.8%. Clearly, the region's markets have bounced back nicely between the end of 1995 and February 29, especially considering the psychological barriers the region has faced. Q: Where have you been focusing the Portfolio's investments? A: The country weightings within the Portfolio are little changed in the past six months. The Portfolio's largest country weighting remains Hong Kong, at 43% of total equity investments, as of February 29. Thailand was second, at 15%, followed by Singapore, at 14%, Malaysia, at 8%, and the Republic of Korea, at 7%. Banking and financial services stocks constitute the largest industry weighting. Rising demand for loans and financial services make the financial sector attractive, especially with interest rates falling in many markets. Manufacturing is the second largest industry sector. China region manufacturers maintain their significant cost advantage and have benefited further from a strengthening dollar. The third largest industry weighting is property companies. The property sector composes an unusually large portion of Hong Kong's Hang Seng Index. Property prices have firmed significantly since November and should provide a strong underpinning for the equity market. [GRAPHIC OMITTED -- MAP OF CHINA] HEADLINE READS: Driven by rising economic and consumer needs, China is emphasizing new airport construction in major economic zones. [BULLET] BEIJING Airport...$700 million terminal due in 1999. [BULLET] SHANGHAI Airport...handles 15 million passengers annually. [BULLET] GUANGZHOU Airport...soon to be rebuilt in Pudong economic zone. Source: Civil Aviation Administration of China [TEXT BOX] CHINA'S AIRPORTS IN PROFILE: Total airports: 132 New construction costs: $9 billion Aircraft in service by year 2000: 640 Annual passenger growth rate: 20% Q: What were some of the Portfolio's top performers during the period? A: A number of the Portfolio's large blue chip holdings were especially strong performers. For example, Hutchison Whampoa rose over 30% in the six months. Hutchison has business interests in property development, utilities, telecommunications, and retailing. But the company's container terminal business is generating the fastest revenue growth. Container terminals are a high-margin business, especially in China where the government continues to emphasize building infrastructure and increasing exports. Hutchison has spent $1 billion in the past five years to develop its port interests in China. That investment has paid off handsomely, as the company now maintains facilities in such key ports as Shanghai, Yantian in southern China, and several small feeder ports in the Pearl River delta. Another strong performer during the period was HSBC Holdings, which rose over 20%. HSBC is the holding company for Hong Kong and Shanghai Bank, the colony's largest bank, with assets over $270 billion. One-third of the company's assets are employed in Hong Kong or elsewhere in Greater China. HSBC's long reach and powerful asset base have proved beneficial in establishing it as the most active foreign bank in mainland China. Q: You mentioned the strong correlation between the Hong Kong property market and the equity market. Could you describe some of the Portfolio's property company holdings? A: Yes. We have focused on a mix of property companies that provide a wide exposure in terms of geography and property types. That diversification helps limit risk while giving the Portfolio access to growth in many different markets. In the residential sector, one of the Portfolio's largest investments is Cheung Kong Holdings, Hong Kong's largest residential property developer. The company is also active in mainland China, building residential developments and container terminals. In the commercial sector, New World Development is a widely diversified developer with interests in commercial office buildings and hotels in Hong Kong, China and Thailand. The company also is involved in the construction of power plants on the mainland. Finally, in the rental segment of the property market, the Portfolio has an investment in Sun Hung Kai Properties, Hong Kong's largest integrated property developer. The company is careful to balance its rental income with trading profits. Sun Hung Kai is widely regarded as one of the colony's best managed companies. [PIE CHART OMITTED. OVERLYING TEXT READS:] Greater China Growth Portfolio: Asset Allocation Based on market value as of February 29, 1996 China - 1.2% Indonesia - 1.8% Other - 2.4% Taiwan - 4.1% Philippines - 4.7% So. Korea - 7.3% Malaysia - 8.0% Singapore - 13.9% Thailand - 14.6% Hong Kong - 42.0% Q: Thailand and Singapore are the Portfolio's next largest concentrations. Where have you invested in those countries? A: The Portfolio's largest investment in Singapore is Overseas Union Bank (OUB). Singapore is well-regarded throughout Greater China for its banking expertise. As the region continues to build its infrastructure in coming years, the need for financing and for the financial acumen of the Singapore banking community will become increasingly important. Singapore has four major banks, of which OUB is the smallest. The company has a major advantage over many competitors through its long-standing business relationships with China's entrepreneurs and trading community. Having significantly increased its capital in the past year, the bank should be able to expand its asset base through-out China. In addition to its Singapore offices, OUB has branches in Hong Kong and offices on the mainland in Beijing and Shenzhen. [GRAPHIC -- MAP OF CHINA WITH 3 BAR CHARTS OMITTED] CHINA'S PROGRESS IN 1995 -- MANAGEABLE GROWTH, LOWER INFLATION AND EXPANDED TRADE. Source: China State Statistical Bureau REAL GDP GROWTH Annual % Change 1990 - 3.9% 1991 - 8.2% 1992 - 12.8% 1993 - 13.5% 1994 - 11.8% 1995 - 20.2% INFLATION Annual % Change 1990 - 2.5% 1991 - 4.5% 1992 - 6.0% 1993 - 15.0% 1994 - 21.7% 1995 - 14.8% TRADE BALANCE $ Billions 1990 - 8 Billion 1991 - 7 Billion 1992 - 4.5 Billion 1993 - (12) Billion 1994 - 5.3 Billion 1995 - 20 Billion In Thailand, the Portfolio's largest investment was Siam Commercial Bank. Like OUB in Singapore, Siam Commercial does not possess the largest banking franchise in its market. Nevertheless, the bank has done a good job of increasing its assets and is therefore poised to expand its activities to mainland China. The company plans to open branches soon in Shanghai and Canton. Q: Some markets - Korea and Taiwan - didn't fare especially well during the six- month period. How would you assess those markets? A: Korea and Taiwan were among the region's laggards in this period, as politics weighed heavily on both markets. In Korea, the political intrigues are internal, tied to slush fund scandals and the trials of two former presidents. In Taiwan, the political pressures have been external, as the tensions continue between mainland China and Taipei. Interestingly, while these political tensions have restrained performance, there are positive developments to report in both countries. [GRAPHIC OF SIMPLIFIED HOUSES OMITTED. OVERLAY TEXT READS:] The Hong Kong property market rebounded in 1995, helping to rally the stock market. [BULLET] Low interest rates provide strong support for real estate prices. [BULLET] Urban population is expected to rise 88% in next 15 years. [BULLET] Hong Kong prices demand high premiums, as high as HK$4000. per sq./ft. Source: The Wall Street Journal Each country has taken steps in recent months to open their markets to foreign investors. Taiwan has raised the level of ownership in Taiwanese companies allowed foreign investors, and importantly, will now permit ownership by foreign individuals. Separately, the Taiwan market is soon to be included in the Dow Jones World Stock Index, - an unmanaged index of common stocks in many global markets - which should draw an increasing interest from institutional investors. Fundamentally, while the recent saber-rattling has provided a temporary distraction, economic growth should still be around 6% in 1996, according to the Ministry of Finance. Meanwhile, corporate profits are expected to rise around 25%, suggesting that Taiwan remains one of the region's great values. As the tensions abate and interest rates move lower, Taiwan could be poised for a strong recovery. Korea has raised to 18% the percentage that foreign investors may own of most listed stocks. That move, which took effect on April 1, is expected to encourage a further wave of investment into the Korean market. Still, according to government estimates, the Korean economy is expected to grow in the 7.5% range in 1996, one of the fastest-growing economies in Greater China. While that is a slower growth rate than last year, it should nevertheless encourage interest rates to fall somewhat. Earnings growth remains strong for Korean companies, around 20% annually, well above the market PE ratio of 12. Thus, valuations in Korea remain very attractive. Q: What were some of the Portfolio's investments in smaller companies? A: We've made a number of purchases of smaller, consumer-related companies in Hong Kong that have good exposure to China's increasing consumer spending. The consumer sector is not as negatively impacted by austerity measures as other sectors. In addition, the sector has proved a prime beneficiary of rising per capita income in China. One such company was Tinyi Noodles, the leading maker of instant noodles in China. Tinyi, which started in 1992, boasts sales of $300 million, especially impressive given the complexities of managing the logistics of China. With proven leadership and a strong distribution network, the company forecasts 25% volume growth in the coming year. Another small company purchase was Guangnan, a food distribution and processing business. The company has gradually transformed itself from a purely local distributor to a diversified food manufacturer. Enjoying an extensive distribution network, Guangnan is well-positioned to tap the growth potential of Greater China and envisions 18% earnings growth over the next three years. Recent U.S. Investments* in China: (bullet) Coca-Cola Co. - the global beverage giant announced plans to open seven additional bottling plants in China by early 1997. The company saw sales climb 38% in 1995 to 188 million cases, and predicts a doubling in its China sales every three years. (bullet) Pratt & Whitney - the aircraft engine maker has launched a joint venture with one of China's state-run aircraft makers. The $22 million deal with Chengda Engine Co., of Sichuan Province, represents the first foreign equity stake in a Chinese aircraft company. (bullet) American International Group - the insurance company's Hong Kong-based subsidiary has announced a $1 billion infrastructure fund. The company, whose parent AIG long historical roots in China, reaped $50 million in premiums in China alone in 1995. * These U.S. companies are not investments of the Portfolio. Q: What are the latest economic developments in China? A: China made notable economic progress on several fronts in 1995. GDP grew an estimated 10.2%. While that is a bit higher than the government's target of 8-to-9%, it still represents a slowing of the economy, a major government goal. Inflation, which has been a perenniel problem, fell to 14.8% at year end from 21.7% a year earlier. These figures show that China has succeeded in engineering its own version of a "soft landing" by bringing down inflation while maintaining a healthy growth rate. One of the most interesting developments in China's economic planning is a shift in the allocation of fixed asset investment. Increasingly, investment is focusing away from the coastal cities, which have suffered the greatest inflation, to the agricultural areas and central regions. This should spread wealth to the vast interior of the country, discourage large population shifts, and encourage enterprises in the interior regions, while helping to cool the inflationary pressures in the coastal economies. Q: In closing, Adaline, what is your current outlook for the Greater China markets? A: The market will likely remain volatile in the short-term, which is a risk investors should be prepared for in these markets. Actually, considering the significant rally since November, a consolidation is a fairly healthy development. The fundamentals of the China region markets remain encouraging, with a strong corporate profit outlook. Lower interest rates are likely to provide an additional boost. Of course, past performance does not necessarily indicate future trends, but I believe the markets will, in the long run, ignore political posturing and focus on the region's impressive economic accomplishments. That is still the heart of the Greater China story and should continue to provide patient investors with attractive long-term opportunities. EV Classic Greater China Growth Fund Financial Statements
Statement of Assets and Liabilities February 29, 1996 (Unaudited) - ----------------------------------------------------------------------------------------------------------- Assets: Investment in Greater China Growth Portfolio, at value (Note 1A) (identified cost, $19,544,392) $21,686,712 Receivable for Fund shares sold 63,990 Deferred organization expenses (Note 1D) 28,402 ----------- Total assets $21,779,104 Liabilities: Payable for Fund shares redeemed $176,303 Payable to affiliate -- Trustees' fees 43 Accrued expenses 22,165 ----------- Total liabilities 198,511 ----------- Net Assets for 2,450,521 shares of beneficial interest outstanding $21,580,593 =========== Sources of Net Assets: Paid-in capital $23,127,348 Accumulated net realized loss on investment transactions from Portfolio (3,408,816) Accumulated distributions in excess of net investment income (280,259) Unrealized appreciation of investments from Portfolio (computed on the basis of identified cost) 2,142,320 ----------- Total $21,580,593 =========== Net Asset Value, Offering Price, and Redemption Price Per Share ($21,580,593 (divided by) 2,450,521 shares of beneficial interest) $8.81 ===== See notes to financial statements
Statement of Operations For the Six Months Ended February 29, 1996 (Unaudited) - ----------------------------------------------------------------------------------------------------------- Investment Income (Note 1B): Investment income allocated from Portfolio (net of foreign taxes of $20,405) $174,909 Expenses allocated from Portfolio (110,052) ---------- Net investment income from Portfolio $64,857 Expenses -- Management fee (Note 3) $25,548 Compensation of Trustees not members of the Administrator's organization (Note 3) 63 Custodian fee (Note 3) 1,354 Distribution fees (Note 6) 102,192 Transfer and dividend disbursing agent fees 14,382 Printing and postage 22,617 Legal and accounting services 9,810 Registration fees 22,155 Amortization of organization expenses (Note 1D) 4,986 Miscellaneous 2,628 ---------- Total expenses 205,735 ---------- Net investment loss ($140,878) ---------- Realized and Unrealized Gain (Loss) from Portfolio: Net realized gain (loss) from Portfolio (identified cost basis) -- Investment transactions (net of foreign capital gains taxes of $20,854) $68,273 Foreign currency (28,806) ---------- Net realized gain $39,467 Change in unrealized appreciation of investments 1,774,070 ---------- Net realized and unrealized gain $1,813,537 ---------- Net increase in net assets from operations $1,672,659 ========== See notes to financial statements
Statements of Changes in Net Assets - ------------------------------------------------------------------------------------------------------------- Six Months Ended February 29, 1996 Year Ended (Unaudited) August 31, 1995 --------------- --------------- Increase (Decrease) in Net Assets: From operations -- Net investment loss ($140,878) ($135,671) Net realized gain (loss) from Portfolio 39,467 (2,187,569) Change in unrealized appreciation (depreciation) from Portfolio 1,774,070 (194,248) ----------- ----------- Net increase (decrease) in net assets from operations $1,672,659 ($2,517,488) ----------- ----------- Distributions to shareholders -- In excess of net investment income $ -- ($59,285) ----------- ----------- Transactions in shares of beneficial interest (Note 4) -- Proceeds from sale of shares $6,745,522 $15,194,416 Net asset value of shares issued to shareholders in payment of distributions declared -- 54,632 Cost of shares redeemed (8,045,234) (17,894,214) ----------- ----------- Decrease in net assets from Fund share transactions ($1,299,712) ($2,645,166) ----------- ----------- Net increase (decrease) in net assets $372,947 ($5,221,939) Net Assets: At beginning of period 21,207,646 26,429,585 ----------- ----------- At end of period (including distributions in excess of net investment income of $280,259 and $139,381, respectively) $21,580,593 $21,207,646 =========== =========== See notes to financial statements
Financial Highlights - --------------------------------------------------------------------------------------------------------- Six months ended For the Year Ended August 31, February 29, 1996 ----------------------------- (Unaudited) 1995 1994* ---------- ---------- ---------- Net Asset Value, beginning of period $8.120 $9.030 $10.000 ------ ------ ------ Income (Loss) from Investment Operations: Net investment loss ($0.061) ($0.037) ($0.033) Net realized and unrealized loss on investments $0.751 ($0.853) ($0.937) ------ ------ ------ Total income (loss) from investment operations $0.690 ($0.890) ($0.970) ------ ------ ------ Less distributions: In excess of net investment income $ -- ($0.020) $ -- ------ ------ ------ Net Asset Value, end of period $8.810 $8.120 $9.030 ====== ====== ====== Total Return (2) 8.50% (9.85%) (9.70%) Ratios/Supplemental Data: Net assets, end of period (000 omitted) $21,581 $21,208 $26,430 Ratio of net expenses to average daily net assets (1) 3.20%+ 3.04% 2.75%+ Ratio of net investment loss to average daily net assets (1.38%)+ (0.59%) (0.74%)+ + Computed an annualized basis. (1) Includes the Fund's share of Greater China Growth Portfolio's allocated expenses. (2) Total return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset value on the last day of each period reported. Dividends and distributions, if any, are assumed to be reinvested at the net asset value on the record date. Total return is computed on a non- annualized basis. * For the period from December 28, 1993 (start of business) to August 31, 1994. See notes to financial statements
Notes to Financial Statements (Unaudited) (1) Significant Accounting Policies EV Classic Greater China Growth Fund (the Fund) is a diversified series of Eaton Vance Growth Trust (the Trust). The Trust is an entity of the type commonly known as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as an open-end, management investment company. The Fund invests all of its investable assets in interests in Greater China Growth Portfolio (the Portfolio), a New York Trust, having the same investment objective as the Fund. The value of the Fund's investment in the Portfolio reflects the Fund's proportionate interest in the net assets of the Portfolio (3.7% at February 29, 1996). The performance of the Fund is directly affected by the performance of the Portfolio. The financial statements of the Portfolio, including the portfolio of investments, are included elsewhere in this report and should be read in conjunction with the Fund's financial statements. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The policies are in conformity with generally accepted accounting principles. A. Investment Valuations - Valuation of securities by the Portfolio is discussed in Note 1 of the Portfolio's Notes to Financial Statements which are included elsewhere in this report. B. Income - The Fund's net investment income consists of the Fund's pro rata share of the net investment income of the Portfolio, less all actual and accrued expenses of the Fund determined in accordance with generally accepted accounting principles. C. Federal Taxes - The Fund's policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute to shareholders each year all of its net investment income, and any net realized capital gains. Accordingly, no provision for federal income or excise tax is necessary. At August 31, 1995, the Fund, for federal income tax purposes, had a capital loss carryover of $1,171,961 which will reduce the taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Internal Revenue Code and thus will reduce the amount of distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal income or excise tax. Such capital loss carryover will expire on August 31, 2002. Additionally, net capital losses of $1,405,545 attributable to security and currency transactions included after October 31, 1994, are treated as arising on the first day of the Fund's next taxable year. D. Deferred Organization Expenses - Costs incurred by the Fund in connection with its organization, including registration costs, are being amortized on the straight-line basis over five years. E. Distribution Costs - For book purposes, commissions paid on the sale of Fund shares and other distribution costs are charged to operations. For tax purposes, commissions paid were charged to paid-in capital prior to November 23, 1994 and subsequently charged to operations. The change in the tax accounting practice was prompted by a recent Internal Revenue Service ruling and has no effect on either the Fund's current yield or total return (Note 6). F. Interim Financial Information - The interim financial statements relating to February 29, 1996 and for the six month period then ended have not been audited by independent certified public accountants, but in the opinion of the Fund's management, reflect all adjustments, consisting only of normal recurring adjustments necessary for the fair presentation of the financial statements. (2) Distributions to Shareholders It is the present policy of the Fund to make at least one distribution annually (normally in December) of all or substantially all of the investment income allocated to the Fund by the Portfolio, less the Fund's direct and allocated expenses and at least one distribution annually of all or substantially all of the net realized capital gains (reduced by any available capital loss carryforwards from prior years) allocated by the Portfolio to the Fund, if any. Shareholders may reinvest all distributions in shares of the Fund at the per share net asset value as of the close of business on the record date. The Fund distinguishes between distributions on a tax basis and a financial reporting basis. Generally accepted accounting principles require that only distributions in excess of tax basis earnings and profits be reported in the financial statements as a return of capital. Differences in the recognition or classification of income between the financial statements and tax earnings and profits which result in temporary over distributions for financial statement purposes are classified as distributions in excess of net investment income or accumulated net realized gains. Permanent differences between book and tax accounting relating to distributions are reclassified to paid-in capital. (3) Management Fee and Other Transactions with Affiliates The management fee is earned by Eaton Vance Management (EVM) as compensation for management and administration of the business affairs of the Fund. The fee is based on a percentage of average daily net assets. For the six months ended February 29, 1996 the fee was equivalent to .25% of the Fund's average daily net assets for such period and amounted to $25,548. Except as to Trustees of the Fund who are not members of EVM's organization, officers and Trustees receive remuneration for their services to the Fund out of such management fee. Investors Bank & Trust Company (IBT) serves as custodian of the Fund. 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 daily cash balances the Fund maintains with IBT. Certain officers and Trustees of the Fund and the Portfolio are officers and directors/trustees of the above organizations. In addition, investment adviser, administrative fees, and custody fees are paid by the Portfolio to EVM and its affiliates. See Note 2 of the Portfolio's Notes to Financial Statements which are included elsewhere in this report. (4) Shares of Beneficial Interest The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value). Transactions in Fund shares were as follows: Six Months Ended February 29, 1996 For the Year Ended (Unaudited) August 31, 1995 -------------- -------------- Sales 809,751 1,851,528 Issued to shareholders electing to receive payments of distributions in Fund shares -- 6,929 Redemptions (971,238) (2,173,165) ------- --------- Net decrease (161,487) (314,708) ======= ========= (5) Investment Transactions Increases and decreases in the Fund's investment in the Portfolio aggregated $6,696,241 and $8,211,262, respectively. (6) Distribution Plan The Fund has adopted a distribution plan (the "Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940. The Plan requires the Fund to pay the Principal Underwriter, Eaton Vance Distributors, Inc. (EVD) amounts equal to 1/365 of 0.75% of the Fund's daily net assets, for providing ongoing distribution services and facilities to the Fund. The Fund will automatically discontinue payments to EVD during any period in which there are no outstanding Uncovered Distribution Charges, which are equivalent to the sum of (i) 6.25% of the aggregate amount received by the Fund for shares sold plus, (ii) distribution fees calculated by applying the rate of 1% over the prevailing prime rate to the outstanding balance of Uncovered Distribution Charges of EVD reduced by amounts theretofore paid to EVD. The amount payable to EVD with respect to each day is accrued on such day as a liability of the Fund and, accordingly, reduces the Fund's net assets. The Fund paid or accrued $76,644 to or payable to EVD for the six months ended February 29, 1996, representing 0.75% of average daily net assets. At February 29, 1996 the amount of Uncovered Distribution Charges of EVD calculated under the Plan was approximately $2,791,465. In addition, the Plan permits the Fund to make monthly payments of service fees to the Principal Underwriter in amounts not expected to exceed 0.25% of the Fund's average daily net assets for any fiscal year. The Fund paid or accrued service fees to or payable to EVD for the six months ended February 29, 1996 in the amount of $25,548. EVD makes monthly service fee payments to Authorized Firms in amounts anticipated to be equivalent to 0.25%, annualized, of the assets maintained in the Fund by their customers. Service fee payments are made for personal services and/or the maintenance of shareholder accounts. Certain officers and Trustees of the Fund are officers or directors of EVD. (7) Contingent Deferred Sales Charge Shares purchased on or after January 30, 1995 and redeemed during the first year after purchase (except shares acquired through the reinvestment of distributions) generally will be subject to a contingent deferred sales charge at a rate of one percent of redemption proceeds, exclusive of all reinvestments and capital appreciation in the account. No contingent deferred sales charge is imposed on exchanges for shares of other funds in the Eaton Vance Classic Group of Funds or Eaton Vance Money Market Fund which are distributed with a contingent deferred sales charge. EVD received approximately $610 of CDSC for the six months ended February 29, 1996.
Greater China Growth Portfolio Portfolio of Investments February 29, 1996 (Unaudited) - ---------------------------------------------------------------------------------- STOCKS - 98.1% - ---------------------------------------------------------------------------------- Name of Company Shares Value - ---------------------------------------------------------------------------------- China -- 1.2% Shanghai New Asia Group Ltd. 400,000 $243,200 Shanghai Tyre and Rubber 2,602,170 629,725 Shanghai Yaohua Pilkington 4,770,500 4,770,500 Shenzhen China Bicycle Co. 8,394,860 1,411,603 ------------ $7,055,028 ------------ Hong Kong -- 42.0% Chen Hsong Holdings 10,820,000 $6,157,945 Cheung Kong Holdings Ltd. 3,950,000 27,461,956 China-HK Photo Products Hld. 5,758,000 3,370,126 China Merchants Hai Hong Holdings 8,000,000 2,716,284 China Resources Enterprises 4,966,000 2,842,339 China Travel International 10,322,000 2,283,052 CIM Company Ltd. 1,800,000 3,026,717 Cosco Pacific Ltd. 6,610,000 5,258,144 Founder Hong Kong Ltd. 1,000,000 468,882 Giordano Holdings Ltd. 3,204,000 3,166,494 Guangnan Holdings Ltd. 8,780,000 4,485,879 Hang Seng Bank 760,000 7,471,075 Hong Kong Electric Co. 1,429,500 4,844,415 Hong Kong Land Holdings Ltd. 3,020,000 6,553,400 Hong Kong Telecommunications Ltd. 2,773,000 5,433,985 HSBC Holdings PLC 1,720,000 27,587,099 Hutchison Whampoa 4,400,000 27,887,184 Jardine Matheson Holdings 590,800 4,726,400 Li & Fung Ltd. 7,184,000 6,783,363 National Mutual Ltd. 14,694,000 14,254,671 New World Development 4,000,000 19,505,507 New World Infrastructure 7,497 16,146 Ng Fung Hung Ltd. 9,000,000 4,569,178 CP Pokphand Co. Ltd. 22,586,000 12,431,909 San Miguel Brewery Ltd. 3,170,000 1,568,363 Shanghai Petrochemical 17,218,000 5,734,768 Siu Fung Ceramics Holdings 28,284,000 4,536,474 Sun Hung Kai Properties Ltd. 1,427,000 12,735,880 Tingyi (Cayman Island) Holding Co. 12,800,000 3,518,235 Varitronix International Ltd. 3,782,000 7,288,929 VTECH Holdings Ltd. 2,496,000 4,197,047 Wharf Holdings 941,200 3,646,150 Yizheng Chemical Fibre Co. 3,716,000 1,033,404 Zhenhai Refining & Chemical Co. 3,158,000 898,650 ------------ $248,460,050 ------------ Indonesia -- 1.8% PT HM Sampoerna (Foreign) 521,000 $6,235,554 PT Indah Kiat Pulp & Paper 6 5 PT Telecomunikasion 2,752,500 4,395,597 ------------ $10,631,156 ------------ Republic of Korea -- 7.3% Hansol Paperboard Co. Ltd. 8 $ 128 Korea Electric Power Corp. 301,200 12,706,327 Korea Exchange Bank 999,499 15,005,319 Pohang Iron & Steel Co. Ltd. 52,630 4,033,464 Samsung Electronics (New) 8,363 1,378,657 Samsung Electronics (Ord) 29,138 4,803,389 Samsung Electronics 620 102,322 Samsung Fire & Marine Insurance 4,030 2,792,718 Samsung Fire & Marine Insurance Pfd. 3,920 2,107,348 ------------ $42,929,672 ------------ Malaysia -- 8.0% Berjaya Sports Toto Bhd 1,200,000 $ 3,317,387 DCB Holdings Bhd 1,316,000 3,999,294 Land & General Bhd 3,780,500 8,449,867 Genting Bhd 704,000 6,294,095 Hong Leong Industries Bhd 737,000 3,756,960 Malayan Banking Bhd 400,000 3,654,615 Malaysian Airline System Bhd 300,000 999,922 RJ Reynolds Bhd 1,000,000 2,529,213 Sime Darby Bhd 3,800,000 10,207,043 Tan Chong Motor Holdings Bhd 2,854,000 3,984,095 ------------ $47,192,491 ------------ The Philippines -- 4.7% Bacnotan Consolidated Industries 544,290 $2,247,500 Belle Corp. 40,391,000 5,636,672 Philippine Long Distance Telephone 166,700 9,856,137 Pilipino Telephone 7,200,000 8,396,100 San Miguel Corp. Class B 21,090 77,006 SM Prime Holdings 5,831,900 1,716,904 ------------ $27,930,319 ------------ Singapore -- 13.9% Cerebos Pacific Ltd. 1,129,000 $9,831,292 City Developments 877,000 7,140,177 Clipsal Industries Holdings Ltd. 2,400,000 5,112,000 Clipsal Industries Warrants 234,000 140,400 DBS Land 980,000 3,850,619 Development Bank of Singapore 470,000 6,688,142 Far East Levingston 500,000 2,973,451 Fraser & Neave Ltd. 150,000 2,007,080 Hotel Properties 1,400,000 2,537,345 Jurong Shipyards 500,000 3,168,142 Overseas Union Bank 1,916,000 13,971,540 Sembawang Maritime 2,199,000 6,849,982 Singapore Airlines Ltd. 925,000 9,299,115 Straits Steamship Land 2,452,500 8,403,611 Straits Steamship Land Warrants 613,125 347,257 ------------ $82,320,153 ------------ Taiwan -- 4.1% China Steel 7,935,000 $5,829,042 China Trust Commercial Bank 1,216,000 1,804,233 CIS Technology Inc. 1,640,000 2,576,478 Formosa Chemical 1,477,538 1,241,222 Formosa Plastics 876,900 1,278,773 Grand Pacific Petrochemical 740,000 874,609 Nan Ya Plastic 3,419,799 5,036,798 Taiwan Glass Industrial Corp. 919,000 1,838,134 Taiwan Semiconductor 723,600 2,039,385 Yang Ming Marine Transport 1,500,000 1,532,839 ------------ $24,051,513 ------------ Thailand -- 14.6% Bangkok Bank Co. Ltd. 291,200 $3,787,967 Dhana Siam Finance 185,000 1,049,177 Dhana Siam Finance (Foreign) 611,300 3,951,691 Electricity Generating (Foreign) 4,465,870 17,711,164 Finance One Ltd. 581,600 4,267,143 Krung Thai Bank Ltd. (Foreign) 1,298,000 6,125,798 Nava Finance & Securities 1,552,000 4,708,626 Saha Union Corp. Ltd. (Local) 1,555,300 2,158,854 Siam Cement (Local) 201,410 9,856,829 Siam Cement (Foreign) 91,820 4,777,626 Siam Commercial Bank 1,426,600 23,309,903 Thailand Military Bank (Foreign) 967,000 4,985,524 ------------ $86,690,302 ------------ United States -- 0.5% AES China Generating Co. Ltd. 210,000 $1,837,500 Pacific Basin Bulk Shipping 84,500 1,003,438 Pacific Basin Bulk Shipping (Warrants) 84,500 68,657 ------------ $2,909,595 ------------ Total Common Stocks (Identified cost, $474,087,738) $580,170,279 Other Assets - 1.9% 11,529,739 ------------ Net Assets - 100.0% $591,700,018 ============ See notes to financial statements
Financial Statements Statement of Assets and Liabilities February 29, 1996 (Unaudited) - ------------------------------------------------------------------------------------------------- Assets: Investments, at value (Note 1A) (Identified cost, $474,087,738) $580,170,279 Cash 6,129,775 Cash denominated in foreign currencies (cost, $5,647,604) 5,450,971 Dividends and interest receivable 730,229 Deferred organization expenses (Note 1C) 48,951 ------------ Total assets $592,530,205 Liabilities: Payable for investments purchased $797,855 Payable to affiliate -- Trustees' fees 1,250 Accrued expenses 31,082 ------------ Total liabilities 830,187 ------------ Net Assets applicable to investors' interest in Portfolio $591,700,018 ============ Sources of Net Assets: Net proceeds from capital contributions and withdrawals $485,817,888 Net unrealized appreciation of investments (computed on the basis of identified cost) 106,082,541 Net unrealized depreciation of foreign currencies (200,411) ------------ Total $591,700,018 ============ See notes to financial statements
Financial Statements (continued) Statement of Operations For the Six Months Ended February 29, 1996 (Unaudited) - ------------------------------------------------------------------------------------------------- Investment Income: Income -- Dividends (net of foreign taxes of $570,674) $4,814,767 Interest 71,088 ----------- Total income $4,885,855 Expenses -- Investment adviser fee (Note 2) $2,128,304 Administration fee (Note 2) 709,434 Compensation of Trustees not members of the Investment Adviser's organization (Note 2) 8,750 Custodian fee (Note 2) 457,991 Legal & audit fees 41,647 Amortization of organization expenses (Note 1C) 14,280 Miscellaneous 4,063 ----------- Total expenses $3,364,469 Deduct -- Reduction of custodian fee (Note 2) 284,288 ----------- Net expenses 3,080,181 ----------- Net investment income $1,805,674 ----------- Realized and Unrealized Gain (Loss) on Investments: Net realized gain (loss) -- Investment transactions (net of foreign capital gains taxes of $584,679) $1,945,533 Foreign currency (798,360) ----------- Net realized gain $1,147,173 Change in unrealized appreciation -- Investments (identified cost basis) $48,377,417 Foreign currency 555,988 ----------- Increase in unrealized appreciation 48,933,405 ----------- Net realized and unrealized gain on investments $50,080,578 ----------- Net increase in net assets from operations $51,886,252 =========== See notes to financial statements
Financial Statements (continued) Statements of Changes in Net Assets - --------------------------------------------------------------------------------------------- Six Months Ended February 29, 1996 Year Ended Unaudited) August 31, 1995 --------------- --------------- Increase (Decrease) in Net Assets: From operations -- Net investment income $1,805,674 $8,672,881 Net realized gain (loss) on investment transactions 1,147,173 (29,095,245) Change in unrealized appreciation of investments and foreign currency 48,933,405 (40,394,548) ------------ ------------ Increase (decrease) in net assets from operations $ 51,886,252 $(60,816,912) ------------ ------------ Capital transactions -- Contributions $61,061,582 $129,870,307 Withdrawals (111,664,874) (211,249,014) ------------ ------------ Decrease in net assets resulting from capital transactions ($50,603,292) $(81,378,707) ------------ ------------ Total increase (decrease) in net assets $1,282,960 $(142,195,619) Net Assets: At beginning of period 590,417,058 732,612,677 ------------ ------------ At end of period $591,700,018 $590,417,058 ============ ============ See notes to financial statements
Financial Statements (continued) Supplementary Data - -------------------------------------------------------------------------------------------------------- Six months ended Year Ended August 31, February 29, 1996 ------------------------------- (Unaudited) 1995 1994 1993* ---------- ---------- ---------- ---------- Ratios (As a percentage of average net assets): Expenses 1.18%+ 1.10% 1.15% 1.38%+ Net investment income 0.63%+ 1.35% 0.73% 0.38%+ Portfolio Turnover 22% 32% 36% 18% Average Commission Rate Paid ** 0.59% Net Assets, end of period (000 omitted) $591,700 $590,417 $732,613 $208,043 + Computed on an annualized basis. * For the period from the start of business, October 28, 1992, to August 31, 1993. ** 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. Amount is computed on a non-annualized basis. See notes to financial statements
Notes to Financial Statements (Unaudited) 1) Significant Accounting Policies Greater China Growth Portfolio (the "Portfolio") is registered under the Investment Company Act of 1940 as a diversified, open-end investment company which was organized as a trust under the laws of the State of New York on September 1, 1992. 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 has elected to be 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 individually 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. If the Portfolio enters into a closing transaction, the Portfolio will realize, for book purposes, a gain or loss equal to the difference between the value of the financial futures contract to sell and financial futures contract to buy. E. 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. F. 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. G. 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. H. Interim Financial Information - The interim financial statements relating to February 29, 1996 and for the six month period then ended have not been audited by independent certified public accountants, but in the opinion of the Fund's management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial statements. (2) Investment Adviser Fee and Other Transactions with Affiliates The investment adviser fee is earned by Lloyd George Management (Hong Kong) Limited (the Adviser), an affiliate of Eaton Vance, as compensation for management and investment advisory services rendered to the Portfolio. Under the advisory agreement, the Adviser receives a monthly fee 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 29, 1996 the adviser fee was .74% of average net assets. In addition, an administrative fee is earned by Eaton Vance Management (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 29, 1996, the administration fee was .24% of average net assets. Except as to Trustees of the Portfolio who are not members of the Adviser or EVM's organization, officers and Trustees receive remuneration for their services to the Portfolio out of such investment adviser and administrative fees. 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 daily cash balances the Portfolio maintains with IBT. All significant credits are reported as a reduction of expenses in the Statement of Operations. 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 $121,938,578 and $157,909,687, respectively. (4) Federal Income Tax Basis of Investments The cost and unrealized appreciation (depreciation) in value of the investments owned at February 29, 1996, as computed on a federal income tax basis, are as follows: Aggregate cost $474,087,738 ============ Gross unrealized appreciation $136,308,232 Gross unrealized depreciation 30,225,691 ------------ Net unrealized appreciation $106,082,541 ============ (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. (7) Line of Credit The Portfolio participates with other portfolios and funds managed by 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. EV Classic Greater China Growth Fund Officers James B. Hawkes President, Trustee M. Dozier Gardner Vice President William D. Burt Vice President Barclay Tittmann Vice President James L. O'Connor Treasurer Thomas Otis Secretary Independent Trustees 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 Company Incorporated Jack L. Treynor Investment Adviser and Consultant Greater China Growth Portfolio Officers Hon. Robert Lloyd George President, Trustee and Co-Portfolio Manager James B. Hawkes Vice President and Trustee Scobie Dickinson Ward Vice President, Assistant Secretary, Assistant Treasurer and Co-Portfolio Manager William Walter Raleigh Kerr Vice President, Secretary and Assistant Treasurer James L. O'Connor Vice President and Treasurer Thomas Otis Vice President and Assistant Secretary Independent Trustees Samuel L. Hayes, III Jacob H. Schiff Professor of Investment Banking, Harvard University Graduate School of Business Administration Stuart Hamilton Leckie Managing Director and Actuary, Wyatt Company, Hong Kong Hon. Edward K.Y. Chen Professor and Director, Center for Asian Studies, University of Hong Kong Sponsor and Manager of EV Classic Greater China Growth Fund & Administrator of Greater China Growth Portfolio Eaton Vance Management 24 Federal Street Boston, MA 02110 Adviser of Greater China Growth Portfolio 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 (617) 482-8260 Custodian Investors Bank & Trust Company 89 South Street P.O. Box 1537 Boston, MA 02205-1537 Transfer Agent First Data Investor Services Group, Inc. BOS725 P.O. Box 1559 Boston, MA 02104 (800) 262-1122 This report must be preceded or accompanied by a current prospectus which contains more complete information on the Fund, including its distribution plan, sales charges and expenses. Please read the prospectus carefully before you invest or send money. EV Classic Greater China Growth Fund 24 Federal Street Boston, MA 02110 C-CGSRC-4/96 -----END PRIVACY-ENHANCED MESSAGE-----