-----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, HPkAPU7h/6RxI6ai05dvdQICVWL4RKmbMC0ARQmBExIo8O+Ir6gQX0MWGTdvPHBD DEBpEkuZ1dKWodM7XhlWgw== 0000950156-96-000833.txt : 19961023 0000950156-96-000833.hdr.sgml : 19961023 ACCESSION NUMBER: 0000950156-96-000833 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960831 FILED AS OF DATE: 19961022 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: 96646146 BUSINESS ADDRESS: STREET 1: 24 FEDERAL ST CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6174828260 MAIL ADDRESS: STREET 1: 24 FEDERAL ST STREET 2: 11TH FLOOR CITY: BOSTON STATE: MA ZIP: 02210 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 MARATHON GOLD & NATURAL RESOURCES - AR INVESTMENT ADVISER Eaton Vance Management 24 Federal Street Boston, MA 02110 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 P.O. Box 5123 Westborough, MA 01581-5123 INDEPENDENT AUDITORS Deloitte & Touche LLP 125 Summer Street Boston, MA 02110 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 MARATHON GOLD & NATURAL RESOURCES FUND 24 FEDERAL STREET BOSTON, MA 02110 M-NRSRC-10/96 [Eaton Vance Logo omitted] EV MARATHON GOLD & NATURAL RESOURCES FUND ANNUAL SHAREHOLDER REPORT AUGUST 31, 1996 [Photo of gold bars omitted] TO SHAREHOLDERS I am pleased to report that EV Marathon Gold & Natural Resources Fund achieved outstanding investment results for the fiscal year ended August 31, 1996, with a total return of 39.7%. This return - which does not reflect the 5% maximum contingent deferred sales charge - was the result of an increase in net asset value to $21.58 per share on August 31, 1996 from $16.42 per share on August 31, 1995, and the reinvestment of $0.950 per share in capital gains distributions. The Fund outperformed by a significant margin the mutual funds in the Lipper Natural Resources category, which had an average total return of 22.7% during the same period.* In addition, the Fund was ranked number one in the Lipper Natural Resources category for the 3 years ended August 31, 1996.+ After slowing somewhat at the end of 1995, the U.S. economy has shown remarkable strength this year. Gross domestic product - the official indicator of economic growth calculated by the U.S. Commerce Department - declined from a 4.2% annual rate in the third quarter of 1995 to 0.9% in the fourth quarter. Aided by a decline in short-term interest rates at the beginning of this year, GDP rose to 2.0% in the first quarter and then shot up to 4.8% in the second quarter. The economy showed additional signs of good health in August, when the Federal Reserve reported that the 12-month "core rate" of inflation - as measured by the consumer price index, and excluding volatile food and energy prices - had decreased to 2.6% from 2.7% in July. The unemployment rate, also reported in August, hit a 7-year low of 5.1%. Although worldwide demand for gold has been rising over the past few years, the price of gold has remained relatively flat. Between September 1990 and September 1996, the price of gold hovered around $380 per ounce, although it has ranged between $329 and $405. Similarly, with the exception of a spike during the Persian Gulf war in the fall of 1990, the price of oil has not moved dramatically from its range of $17 per barrel to $23 per barrel. What is remarkable is that despite relatively stable commodity prices, the EV Marathon Gold & Natural Resources Fund has performed exceedingly well, finishing in the top quintile for the 1, 3, 5, and 10-year periods, as compared to the funds in the Lipper Natural Resources category. While past performance cannot predict future results, this Fund should merit consideration in a diversified portfolio. Sincerely, /s/ James B. Hawkes ------------------------------ [Photo of James B. Hawkes] James B. Hawkes President October 8, 1996 * For the 12 months ended August 31, 1996, there were 38 funds ranked in this category. + For the 3-year period ended August 31, 1996, there were 25 funds ranked in this category. It is not possible to invest in a Lipper category of mutual funds. - -------------------------------------------------------------------------------- Fund shares are not guaranteed by the FDIC and are not deposits or other obligations of, or guaranteed by, any depository institution. Shares are subject to investment risks, including possible loss of principal invested. - -------------------------------------------------------------------------------- MANAGEMENT REPORT An interview with Barclay Tittmann and William D. Burt, Portfolio Managers of EV Marathon Gold & Natural Resources Fund. Q. THIS HAS BEEN A MIXED YEAR FOR GOLD AND NATURAL RESOURCES STOCKS, BUT AN EXTRAORDINARY YEAR FOR THE FUND. WHAT FACTORS HAVE CONTRIBUTED TO THE FUND'S STRONG PERFORMANCE? BT: The main factor has been our weighting in exploration and early stage development companies, some of which have performed extremely well. Other than energy, most commodities were down for the year, and, in some cases, sharply down. As a result, the larger capitalization natural resources stocks, which are commodity-driven, have had a tough time. On the other hand, there have been some spectacular successes in exploration which have driven the performance of that sector and of our Fund. WB: When a company makes an important discovery, the good news is discounted in the stock price almost immediately, long before there are any tangible benefits. There have been a number of these events in the last year or so, and they have given the entire exploration sector a lift, as investors position themselves for the next big discovery. Q. WHAT FACTORS LED TO THE INCREASE IN THE OIL AND GAS AND GOLD WEIGHTINGS OVER THE LAST 12 MONTHS? BT: We have increased the gold sector somewhat, but most of the weighting increase has been the result of capital appreciation. We tend to keep a third in gold stocks and a third in energy stocks, but we generally do not make decisions based on sector. Rather, we evaluate each stock based on the individual merits of the company. DESPITE RELATIVELY STABLE OIL AND GOLD PRICES ... OIL GOLD VOLUME DATE VOLUME DATE 11.5723 07/01/86 348.85 07/01/86 16.65478 01/01/87 408.2495 01/01/87 21.35455 07/01/87 450.8091 07/01/87 17.16 01/01/88 476.58 01/01/88 15.4975 07/01/88 437.6325 07/01/88 17.98333 01/01/89 404 01/01/89 19.64316 07/01/89 374.9775 07/01/89 22.64091 01/01/90 410.1091 01/01/90 18.6381 07/01/90 362.5309 07/01/90 24.95909 01/01/91 383.6386 01/01/91 21.41955 07/01/91 367.5048 07/01/91 18.82045 01/01/92 354.4477 01/01/92 21.75909 07/01/92 353.0477 07/01/92 19.075 01/01/93 329.02 01/01/93 17.86619 07/01/93 392.481 07/01/93 15 01/01/94 387.0833 01/01/94 19.5325 07/01/94 385.2675 07/01/94 18.05008 01/01/95 378.5505 01/01/95 17.58 07/01/95 383.35 07/01/95 17.73 01/01/96 405.55 01/01/96 20.43 07/01/96 385.3 07/01/96 23.18 09/16/98 382.8 09/16/98 All prices, except the final price on September 16, 1996, are as of the first day of each monthy. Oil prices reflect spot crude price per barrel. EV MARATHON GOLD & NATURAL RESOURCES FUND HAS SHOWN SOLID RETURNS Gold & Natural Resources Fund 10/21/87 10,000 12/31/87 10,230 6/30/88 12,307 12/31/88 12,070 6/30/89 12,716 12/31/89 14,923 6/30/90 14,075 12/31/90 13,271 6/30/91 14,105 12/31/91 14,130 6/30/91 15,042 12/31/92 14,778 6/30/93 17,310 12/31/93 18,556 6/30/94 18,019 12/31/94 18,166 6/30/95 20,946 12/31/95 22,120 6/30/96 26,216 8/31/96 30,797 Based on a hypothetical investment of $10,000 from the inception date of the fund with all dividends and capital gains reinvested and excluding sales charges. All data points, except fund inception date, reflect month-end values. - --------------------------------- [Photo of Barclay Tittmann] - --------------------------------- BARCLAY TITTMANN ---------------- Q. OF THE TOP 10 HOLDINGS A YEAR AGO, ONLY 3 REMAIN. DOES THIS SUGGEST A HIGH TURNOVER RATIO FOR THE PORTFOLIO? BT: Yes and no. Turnover can vary significantly year to year. However, the Fund is actively managed, although we do have a number of long-term holdings. WB: When we make investments in small to medium-sized exploration companies, the time frame is usually 6 to 24 months, which is how long it takes to prove up reserves of a mine or an oil field. Once these are known, the stock price usually reflects all of the good news and, at that point, it pays to look for fresh opportunities. Q. IS THERE A REASON FOR THE DECREASE IN THE WEIGHTING OF FERTILIZER STOCKS OVER THE LAST 6 MONTHS? BT: The fertilizer industry is a very good long-term theme. Grain stocks worldwide are at historical lows, while demand for food from the developing world - particularly China - is increasing at a much faster rate. We bought quite a few of these stocks, and have reduced the group to include the ones that we want to hold for the long term. We have not changed our minds on the industry, but rather have weeded out some of the less attractive companies. Q. BARCLAY, CAMBIOR, INC. AND GETCHELL GOLD HAVE BOTH DONE VERY WELL. WHAT CAN YOU TELL US ABOUT THESE COMPANIES? BT: Actually, these are two very different stories. Getchell Gold is an old mine, next to which a discovery was made that vastly increased the reserves. Over the next few years, we anticipate that the new mine will continue to increase the overall reserves of the company. The stock has quintupled in the last 2 years. - --------------------------------- [Photo of William D. Burt] - --------------------------------- WILLIAM D. BURT --------------- Cambior, Inc. has established gold mines in Canada and Guyana, South America, but they also have a huge copper deposit in Peru, which is one of the largest in the world. This copper reserve is not reflected at all in the stock price because the market currently does not favor copper. Ultimately, however, we expect that this valuable asset will be recognized. Q. BILL, WHAT OIL AND GAS EXPLORATION COMPANIES ARE OF PARTICULAR INTEREST TO YOU RIGHT NOW? WB: Two companies come to mind. The first, Swift Energy Company, is a small Houston oil and gas company. Investors had ignored Swift because of its heavy involvement in drilling programs and the stock's illiquidity. The drilling funds are gone, however, the company has expanded its very high-return operations in South Texas. In addition, reserves, production, and cash flow are soaring. We got involved in a secondary offering, which increased the stock's liquidity and exposure to investors. The stock has grown from around $7 per share to the low $20s, and we expect further appreciation going forward. Another interesting company is FX Exploration, a small, relatively unknown company. FX acquired a concession in Poland, where exploration has been very light in the last few decades, and their oil well should start drilling in October. This stock has tripled in 8 months, and still has further potential for appreciation. Q. HOW MUCH OF THE PORTFOLIO IS IN FOREIGN STOCKS? BT: Most of the Fund's holdings are in North America, with the exception of 3-4% in Australia and West Africa. But of the North American portion, roughly half of the holdings are Canadian-based because of the large number of mining and energy companies there. TOP TEN HOLDINGS* Greenstone Reserves Ltd. Gold mining Dayton Mining Corp. Gold Mercantile Int'l. Petroleum, Inc. Oil, natural gas Getchell Gold Corp. Gold Cambior, Inc. Gold Swift Energy Co., Inc. Oil, natural gas Anadarko Petroleum, Inc. Oil, natural gas Ranger Oil Ltd. Oil, natural gas Aluminum Co. of America Metals Tiomin Resources, Inc. Metals INVESTMENT ALLOCATION* Gold Oil & Gas Metals Minerals Iron & Steel Other 36.6% 33.5% 15.1% 10.2% 3.6% 1.0% *The holdings and investment allocation shown above are by market value as of August 31, 1996, and may not represent the current or future holdings or investment allocation of the Portfolio. The top ten holdings represented 30.36% of the Portfolio on August 31, 1996. Q. DO YOU PLAN TO INCREASE THE NON-NORTH AMERICA PORTION? BT: Probably not. In Africa and Australia, it is difficult to find companies that offer outstanding investment potential. WB: I agree. It is very hard to invest overseas and be ahead of the crowd. Australian investors are just as aggressive as we are, and buying stocks early in their growth cycle is virtually impossible from a long distance. In Canada, on the other hand, it is much easier to get timely information. Many of their investors are American, and some Canadian institutions, such as pension funds, are not as aggressive as U.S. institutional buyers. Q. ARE THERE ANY SUCCESS STORIES IN THE METALS INDUSTRY THAT STAND OUT? BT: I can think of two interesting examples. The first is in the titanium industry, where the cycle has turned positive because of demand from two very different industries, aircraft and golf club manufacturers. We have had very good luck buying and selling on two occasions Oregon Metallurgical, one of the three main titanium stocks. The second example is a small Canadian company called Colossal Resources, which happens to have the rights to one of the largest cobalt reserves in the world. The reserve is actually a slag heap of Zambia's largest copper mine, which has been in operation for 60 years. The slag heap is very rich in cobalt, and Colossal is extracting the cobalt from the slag using two electric furnaces. Because the price of cobalt has risen, this technique is economically feasible. Moreover, they are filling an environmental need by cleaning up the slag heap. Q. WHAT DISTINGUISHES THE EV MARATHON GOLD & NATURAL RESOURCES FUND FROM OTHER FUNDS IN ITS UNIVERSE? BT: Our mix of gold stocks and natural resources stocks is probably the most distinguishing feature. As a rule, natural resources funds are heavily energy-oriented, while most gold funds are 80-90% invested in gold stocks. The EV Marathon Gold & Natural Resources Fund is more evenly balanced than the typical fund in this universe. WB: In addition, funds which do have equal diversity between gold and energy nonetheless tend to be managed by one person who has an expertise in one, but not both, of the sectors. Very few managers have an expertise in both areas, and very few funds, if any, have two managers - each with an expertise in his or her respective field. Our different backgrounds allow us to aggressively pursue opportunities in our specialties. This is unique, and offers shareholders a distinct advantage. COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EV MARATHON GOLD & NATURAL RESOURCES FUND, THE STANDARD & POOR'S 500 INDEX AND THE COST OF LIVING INDEX From October 31, 1987, through August 31, 1996 AVERAGE 1 5 Life of Value of ANNUAL RETURNS Year Years Fund* Investment at 8/31 - -------------------------------------------------------------------------------- Including CDSC 34.7% 16.9% 13.5% $30,797 - -------------------------------------------------------------------------------- Without CDSC 39.7% 17.1% 13.5% $30,797 - -------------------------------------------------------------------------------- EV MARATHON GOLD & NATURAL RESOURCES FUND VS. S&P 500 AND CONSUMER PRICE INDEX Date Fund S&P Index CP Index 10/31/87 $10,000 $10,000 $10,000 11/30/87 $10,230 $ 9,147 $10,009 12/31/87 $10,990 $ 9,901 $10,009 1/31/88 $10,187 $10,301 $10,035 2/28/88 $10,899 $10,732 $10,061 3/31/88 $11,592 $10,464 $10,104 4/30/88 $11,723 $10,563 $10,156 5/31/88 $11,723 $10,596 $10,191 6/30/88 $12,307 $11,157 $10,234 7/31/88 $12,155 $11,097 $10,278 8/31/88 $11,680 $10,669 $10,321 9/30/88 $11,539 $11,193 $10,390 10/31/88 $11,863 $11,483 $10,425 11/30/88 $11,945 $11,266 $10,434 12/31/88 $12,070 $11,534 $10,451 1/31/89 $12,926 $12,354 $10,503 2/28/89 $13,062 $11,997 $10,546 3/31/89 $13,082 $12,350 $10,607 4/30/89 $13,249 $12,969 $10,676 5/31/89 $12,768 $13,424 $10,737 6/30/89 $12,716 $13,438 $10,763 7/31/89 $13,304 $14,625 $10,789 8/31/89 $14,155 $14,852 $10,807 9/30/89 $14,188 $14,875 $10,841 10/31/89 $13,830 $14,500 $10,893 11/30/88 $14,515 $14,740 $10,919 12/31/89 $14,923 $15,178 $10,937 1/31/90 $14,541 $14,133 $11,049 2/28/90 $14,656 $14,254 $11,101 3/31/90 $14,574 $14,718 $11,162 4/30/90 $13,657 $14,323 $11,180 5/31/90 $14,574 $15,640 $11,206 6/30/90 $14,075 $15,640 $11,266 7/31/90 $15,194 $15,559 $11,310 8/31/90 $14,681 $14,091 $11,414 9/30/90 $14,190 $13,501 $11,509 10/31/90 $12,775 $13,411 $11,578 11/30/90 $12,670 $14,214 $11,605 12/31/90 $13,271 $14,705 $11,605 1/31/91 $12,944 $15,315 $11,674 2/28/91 $13,911 $16,346 $11,691 3/31/91 $13,851 $16,833 $11,709 4/30/91 $13,669 $16,839 $11,726 5/31/91 $13,093 $17,488 $11,761 6/30/91 $14,105 $16,796 $11,795 7/31/91 $14,457 $17,550 $11,813 8/31/91 $13,971 $17,894 $11,847 9/30/91 $13,571 $17,694 $11,899 10/31/91 $14,302 $17,903 $11,917 11/30/91 $13,498 $17,117 $11,951 12/31/91 $14,130 $19,166 $11,960 1/31/92 $14,753 $18,784 $11,977 2/28/92 $14,753 $18,964 $12,021 3/31/92 $14,229 $18,684 $12,082 4/30/92 $14,454 $19,205 $12,099 5/31/92 $14,866 $19,223 $12,116 6/30/92 $15,042 $19,040 $12,160 7/31/92 $15,367 $19,789 $12,186 8/31/92 $14,979 $19,314 $12,220 9/30/92 $14,853 $19,639 $12,255 10/31/92 $14,715 $19,681 $12,298 11/30/92 $14,364 $20,276 $12,316 12/31/92 $14,778 $20,624 $12,307 1/31/93 $14,878 $20,769 $12,368 2/28/93 $15,668 $20,987 $12,411 3/31/93 $16,031 $21,522 $12,454 4/30/93 $16,332 $20,975 $12,489 5/31/93 $16,796 $21,451 $12,507 6/30/93 $17,310 $21,624 $12,524 7/31/93 $17,648 $21,508 $12,524 8/31/93 $17,573 $22,249 $12,559 9/30/93 $16,595 $22,180 $12,585 10/31/93 $17,347 $22,611 $12,637 11/30/93 $17,285 $22,319 $12,645 12/31/93 $18,556 $22,693 $12,645 1/31/94 $19,590 $23,431 $12,680 2/28/94 $18,609 $22,727 $12,723 3/31/94 $17,683 $21,840 $12,767 4/30/94 $17,576 $22,092 $12,784 5/31/94 $18,180 $22,366 $12,793 6/30/94 $18,019 $21,933 $12,836 7/31/94 $18,663 $22,624 $12,871 8/31/94 $19,375 $23,475 $12,923 9/30/94 $19,992 $23,005 $12,958 10/31/94 $19,173 $23,486 $12,966 11/30/94 $17,710 $22,558 $12,984 12/31/94 $18,166 $23,001 $12,984 1/31/95 $17,226 $23,560 $13,036 2/28/95 $18,193 $24,410 $13,088 3/31/95 $19,455 $25,234 $13,131 4/30/95 $19,402 $25,939 $13,174 5/31/95 $20,194 $26,881 $13,200 6/30/95 $20,946 $27,635 $13,226 7/31/95 $22,006 $28,513 $13,226 8/31/95 $22,047 $28,504 $13,261 9/30/95 $21,523 $29,824 $13,287 10/31/95 $20,167 $29,676 $13,330 11/30/95 $21,442 $30,894 $13,322 12/31/95 $22,120 $31,614 $13,313 1/31/96 $23,319 $32,645 $13,391 2/28/96 $24,475 $32,872 $13,435 3/31/96 $25,074 $33,309 $13,504 4/30/96 $27,443 $33,756 $13,556 5/31/96 $29,441 $34,528 $13,582 6/30/96 $26,216 $34,800 $13,591 7/31/96 $25,830 $33,208 $13,617 8/31/96 $30,797 $33,833 $13,643 Past performance is not indicative of future results. Investment returns and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Source: Towers Data Systems, Bethesda, MD. *Investment operations commenced on 10/21/87. +Index information is available only at month-end; therefore, the line comparison begins at the next month-end following the commencement of the Fund's investment operations. THE FUND'S PERFORMANCE In accordance with guidelines issued by the Securities and Exchange Commission, the performance chart above compares the Fund's total return with that of a broad-based securities market index. The lines on the chart represent the total returns of $10,000 hypothetical investments in the Fund, the S&P 500 Stock Index and the Consumer Price Index. THE TOTAL RETURN FIGURES The colored solid line on the chart represents the Fund's performance at net asset value. The Fund's total return figure reflects fund expenses and portfolio transaction costs, and assumes reinvestment of income dividends and capital gain distributions. It also reflects the Fund's maximum applicable contingent deferred sales charge (CDSC) deducted at redemption as follows: 5% - 1st and 2nd years; 4% - 3rd year; 3% - 4th year; 2% - 5th year; and 1% - 6th year. The black solid line represents the performance of the S&P 500 Stock Index, a broad-based, widely recognized unmanaged index of 500 common stocks. In contrast to the Fund, whose investment focus is targeted toward selected natural resources sectors, the stocks in the Index represent a diversified portfolio spanning all sectors of the economy. The Index's total return does not reflect any commissions or expenses that would have been incurred if an investor individually purchased or sold the securities represented in the Index. The dotted line represents the Consumer Price Index, an inflation measure based on a basket of goods including food, clothing and energy. Its performance is included to compare how the Fund has performed historically relative to inflation. -------------------------------------------- EV MARATHON GOLD & NATURAL RESOURCES FUND PORTFOLIO OF INVESTMENTS AUGUST 31, 1996 - -------------------------------------------------------------------------------- COMMON STOCKS - 97.6% - -------------------------------------------------------------------------------- NAME OF COMPANY SHARES VALUE - -------------------------------------------------------------------------------- GOLD & PRECIOUS METALS - 39.1% Argosy Mining Corp. Special Warrants* 100,000 $ 219,322 Bresea Resources Ltd.*+ 25,000 264,932 Cambior Inc. 41,000 625,250 Canarc Resources Corp.* 150,000 219,322 Control Science Corp. Special Warrants*+ 200,000 380,159 Corriente Resources, Inc.*+ 150,000 482,355 Corriente Resources, Inc. Warrants*+ 25,000 7,311 Crystallex International Special Warrants*+ 150,000 327,887 Dayton Mining Corp.* 100,000 725,000 Eldorado Gold Corp. Ltd.*+ 21,000 131,991 Getchell Gold Corp.* 15,000 656,250 Golden Shamrock Mines Ltd.* 200,000 164,560 Gran Colombia Resources Special Warrants*+ 100,000 201,045 Greenstone Resources Ltd.* 50,000 764,840 Hecla Mining Co.* 25,000 171,875 Meridan Gold, Inc.*+ 120,000 307,276 Pioneer Group, Inc. 10,000 261,250 Quincunx Gold Exploration Special Warrants*+ 300,000 327,547 Rio Narcea Gold Mines Ltd.*+ 60,000 191,844 Romarco Minerals, Inc.*+ 50,000 215,667 South Pacific Resources Corp.*+ 15,000 78,383 Southwestern Gold Corp.*+ 24,000 434,124 Tombstone Explorations Co. Ltd. Special Warrants*+ 150,000 224,805 Triton Mining Corp.*+ 30,000 131,593 TVX Gold, Inc.* 45,000 365,625 ----------- $ 7,880,213 ----------- INDUSTRIAL METALS - 11.2% Aluminum Co. of America 8,000 $ 497,000 AMT International Mining*+ 328,600 360,211 AMT International Mining Warrants*+ 328,600 117,672 Colossal Resources Corp.* 60,000 352,500 Freeport McMoran Copper & Gold 16,300 458,437 Inco Limited 5,600 180,600 Oregon Metallurgical* 10,000 297,500 ----------- $ 2,263,920 ----------- INDUSTRIAL MINERALS - 10.2% Agrium Inc. 18,000 $ 252,000 Cameco Corp. 13,000 305,500 Minerals Technologies, Inc. 10,500 400,313 Mississippi Chemical Corp. 10,000 225,000 Potash Corp. of Saskatchewan 5,000 380,000 Tiomin Resources, Inc.*+ 200,000 489,660 ----------- $ 2,052,473 ----------- IRON & STEEL - 3.6% Nucor Corp. 5,000 $ 233,750 Republic Engineered Steel, Inc.* 60,000 247,500 Schnitzer Steel Industries, Inc. 9,000 236,250 ----------- $ 717,500 ----------- OIL & GAS - 33.5% Abacan Resources Corp.* 35,000 $ 188,125 Alexander Energy Corp.* 60,000 416,250 Anadarko Petroleum Corp. 10,700 564,425 Arakis Energy Corp.* 150,000 454,680 Beau Canada Exploration Ltd. Class A*+ 170,000 248,489 Coflexip 20,000 397,500 Dawson Production Services* 26,000 318,500 FX Energy, Inc.* 50,000 415,625 Frontier Natural Gas Corp.* 110,000 268,125 Frontier Natural Gas Corp. Warrants* 75,000 51,563 Mercantile International Petroleum*+ 300,000 675,000 Noble Drilling, Inc.* 12,000 171,000 Patina Oil & Gas Corp.* 33,500 238,688 Plains Resources, Inc.* 17,000 231,625 Ranger Oil Ltd. 75,000 515,625 Seven Seas Petroleum, Inc.*+ 20,000 390,000 Swift Energy Co.* 25,000 621,875 Tesoro Petroleum Corp.* 30,000 382,500 TransTexas Gas Corp.* 17,000 187,000 ----------- $ 6,736,595 ----------- TOTAL COMMON STOCKS (Identified cost, $14,758,926) $19,650,701 ----------- - -------------------------------------------------------------------------------- CONVERTIBLE BONDS - 1.4% - -------------------------------------------------------------------------------- FACE AMOUNT (000'S OMITTED) - -------------------------------------------------------------------------------- Ashanti Capital, 5.5%, 3/15/03 (Identified cost, $300,000) $300 $ 273,375 ----------- TOTAL INVESTMENTS (Identified cost, $15,058,926) $19,924,076 OTHER ASSETS, LESS LIABILITIES - 1.0% 204,706 ----------- NET ASSETS - 100% $20,128,782 =========== *Non-income producing security. +Foreign Security. See notes to financial statements -------------------------------------------- EV MARATHON GOLD & NATURAL RESOURCES FUND FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES - ------------------------------------------------------------------------------- August 31, 1996 - ------------------------------------------------------------------------------ ASSETS: Investments, at value (Note 1A) (identified cost, $15,058,926) $19,924,076 Cash 465 Receivable for securities sold 948,149 Dividends and interest receivable 10,395 ----------- Total assets $20,883,085 LIABILITIES: Demand note payable $497,000 Payable for investments purchased 185,625 Payable for Fund shares redeemed 55,918 Payable to affiliate -- Trustees' fees 63 Accrued expenses 15,697 -------- Total liabilities 754,303 ----------- NET ASSETS for 932,892 shares of beneficial interest outstanding $20,128,782 =========== SOURCES OF NET ASSETS: Paid-in capital $12,228,865 Accumulated net realized gain on investment transactions (computed on the basis of identified cost) 3,034,767 Unrealized appreciation of investments (computed on the basis of identified cost) 4,865,150 ----------- Total $20,128,782 =========== NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE (NOTE 6) PER SHARE ($20,128,782 / 932,892 shares of beneficial interest) $21.58 ====== See notes to financial statements STATEMENT OF OPERATIONS - ------------------------------------------------------------------------------ For the Year Ended August 31, 1996 - ------------------------------------------------------------------------------ INVESTMENT INCOME: Income -- Dividends (net of foreign withholding taxes of $2,158) $ 123,116 Interest 11,692 ---------- Total income $ 134,808 Expenses -- Investment adviser fee (Note 4) $ 114,803 Compensation of Trustees not members of the Investment Adviser's organization 840 Custodian fee (Note 1C) 13,703 Distribution fees (Note 5) 140,699 Transfer and dividend disbursing agent fees 14,933 Printing and postage 34,995 Legal and accounting services 21,088 Registration fees 14,773 Miscellaneous 25,109 ---------- Total expenses 380,943 Deduct reduction of custodian fee (Note 1C) 2,673 ---------- Net expenses 378,270 ---------- Net investment loss $ (243,462) ---------- REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain -- Investment transactions (computed on the basis of identified cost) $3,285,224 Foreign currency (510) ---------- Net realized gain 3,284,714 Change in unrealized appreciation of investments 2,237,334 ---------- Net realized and unrealized gain on investments 5,522,048 ---------- Net increase in net assets from operations $5,278,586 ========== See notes to financial statements
STATEMENTS OF CHANGES IN NET ASSETS - ----------------------------------------------------------------------------------------------------------------------------------- YEAR ENDED ------------------------------------------------------------------- AUGUST 31, AUGUST 31, SEPTEMBER 30, 1996 1995* 1994 ------------ ------------ --------------- INCREASE (DECREASE) IN NET ASSETS: From operations -- Net investment loss $ (243,462) $ (91,043) $ (89,807) Net realized gain (loss) on investments 3,284,714 875,917 (61,225) Change in unrealized appreciation of investments 2,237,334 634,567 1,765,546 ----------- ----------- ----------- Net increase in net assets from operations $ 5,278,586 $ 1,419,441 $ 1,614,514 ----------- ----------- ----------- Distributions to shareholders -- In excess of net investment income $ -- $ -- $ (10,924) From net realized gains on investments (821,177) -- -- In excess of realized gain on investments -- -- (508,281) ----------- ----------- ----------- Total $ (821,177) $ -- $ (519,205) ----------- ----------- ----------- Transactions in shares of beneficial interest (Note 3) -- Proceeds from sales of shares $ 7,441,573 $ 5,076,779 $10,163,533 Net asset value of shares issued to shareholders in payment of distributions declared 639,300 -- 378,380 Cost of shares redeemed (7,668,233) (4,292,802) (4,374,063) ----------- ----------- ----------- Increase in net assets from Fund share transactions $ 412,640 $ 783,977 $ 6,167,870 ----------- ----------- ----------- Net increase in net assets $ 4,870,049 $ 2,203,418 $ 7,263,179 NET ASSETS: At beginning of year 15,258,733 13,055,315 5,792,136 ----------- ----------- ----------- At end of year $20,128,782 $15,258,733 $13,055,315 =========== =========== ===========
*For the eleven months ended August 31, 1995 (See Note 10) See notes to financial statements
FINANCIAL HIGHLIGHTS - ------------------------------------------------------------------------------------------------------------------- YEAR ENDED AUGUST 31, YEAR ENDED SEPTEMBER 30, --------------------- ---------------------------------------------- 1996 1995++ 1994 1993 1992 1991 ---- ------ ---- ---- ---- ---- NET ASSET VALUE, beginning of year $16.420 $14.890 $13.240 $11.850 $11.140 $12.140 ------- ------- ------- ------- ------- ------- INCOME FROM OPERATIONS: Net investment income (loss) $(0.261) $(0.100)** $(0.050) $(0.090) $(0.083) $ 0.020 Net realized and unrealized gain (loss) on investments 6.371 1.630 ** 2.650 1.480 1.103 (0.570) ------- ------- ------- ------- ------- ------- Total income (loss) from operations $ 6.110 $ 1.530 $ 2.600 $ 1.390 $ 1.020 $(0.550) ------- ------- ------- ------- ------- ------- LESS DISTRIBUTIONS: From net investment income $ -- $ -- $ -- $ -- $ -- $(0.020) In excess of net investment income -- -- (0.020) -- (0.250) (0.110) From net realized gain on investments (0.950) -- -- -- (0.060) (0.320) In excess of net realized gain on investments -- -- (0.930) -- -- -- ------- ------- ------- ------- ------- ------- Total distributions $(0.950) $ -- $(0.950) $ -- $(0.310) $(0.450) ------- ------- ------- ------- ------- ------- NET ASSET VALUE, end of year $21.580 $16.420 $14.890 $13.240 $11.850 $11.140 ======= ======= ======= ======= ======= ======= TOTAL RETURN 39.69% 10.28% 20.47% 11.73% 9.44% (4.36)% RATIOS/SUPPLEMENTAL DATA:* Net assets, end of year (000's omitted) $20,129 $15,259 $13,055 $ 5,792 $ 3,775 $ 4,042 Ratio of net expenses to average daily net assets(1) 2.49% 2.43%+ 2.64% 3.15% 3.26% 3.29% Ratio of net expenses to average daily net assets after custodian fee reduction(1) 2.47% -- -- -- -- -- Ratio of net investment income (loss) to average daily net assets (1.60%) (0.74%) (0.96%) (0.92%) (0.67%) 0.17% PORTFOLIO TURNOVER 86% 49% 17% 57% 32% 27% AVERAGE COMMISSION RATE PAID*** $0.0382 -- -- -- -- -- *For the three years ended September 30, 1993, the operating expenses of the Fund reflect a reduction of the investment adviser fee, an allocation of expenses to the Investment Adviser, or both. Had such actions not been taken, net investment loss per share and the ratios would have been as follows: NET INVESTMENT LOSS PER SHARE $(0.210) $(0.240) $(0.110) ======= ======= ======= RATIOS (As a percentage of average daily net assets): Expenses 3.90% 4.65% 4.42% Net investment loss (1.67)% (2.06)% (0.96)% - --------------- +Annualized. ++For the eleven months ended August 31, 1995 (Note 10). **Per share data is based on average shares outstanding. ***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. For fiscal years beginning on or after September 1, 1995, a Fund is required to disclose its average commission rate per share for security trades on which commissions are charged. (1)The expense ratios for the year ended August 31, 1996 have been adjusted to reflect a change in reporting requirements. The new reporting guidelines require the Fund to increase its expense ratio by the effect of any expense offset arrangements with its service providers. The expense ratios for each of the periods ended on or before August 31, 1995 have not been adjusted to reflect this change. See notes to financial statements
------------------------------ NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1996 - ------------------------------------------------------------------------------ (1) SIGNIFICANT ACCOUNTING POLICIES EV Marathon Gold & Natural Resources 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 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 -- Investments, other than fixed income securities, listed on securities exchanges or in the NASDAQ National Market System are valued at closing sale prices. Unlisted securities or listed securities for which closing sale prices are not available are valued at the mean between the latest bid and asked prices. Options are valued at the last quoted sale price on the exchange or board of trade on which they are primarily traded or, in the absence of a sale, the mean between the last bid and asked price. Futures positions on investments or currencies are generally valued at closing settlement prices. Short-term obligations are valued at amortized cost, which approximates value. 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. All other securities are appraised at fair value as determined in good faith by or pursuant to procedures established by the Trustees. B. FEDERAL TAXES -- The Fund's policy is to comply with the provisions of the Internal Revenue Code available to regulated investment companies and to distribute to shareholders each year all of its taxable income, including any net realized gain on investments. Accordingly, no provision for federal income or excise tax is necessary. C. EXPENSE REDUCTION -- The Fund has entered into an arrangement with its custodian agent whereby interest earned on uninvested cash balances are used to offset custody fees. All significant reductions are reported as a reduction of expenses in the Statement of Operations. Prior to November 10, 1995, Investors Bank & Trust (IBT) was an affiliate of Eaton Vance Management. IBT serves as custodian to the Fund and the Portfolio. D. OTHER -- Investment security transactions are accounted for on a trade date basis. Dividend income, distributions to shareholders and shares issued to shareholders electing to receive distributions in shares are recorded on the ex-dividend date. E. 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. - ------------------------------------------------------------------------------ (2) DISTRIBUTIONS TO SHAREHOLDERS It is the present policy of the Fund to make (A) at least one distribution annually (normally in December) of substantially all of the investment income earned by the Fund, less its expenses and (B) at least one distribution annually of substantially all of the capital gains realized by the Fund, if any. Distributions are paid in the form of additional shares of the Fund or, at the election of the shareholder, in cash. 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 overdistributions only 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) 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: YEAR ENDED YEAR ENDED YEAR ENDED AUGUST 31, AUGUST 31, SEPTEMBER 30, 1996 1995* 1994 ------ ---------- ------------- Sales 409,901 345,747 731,556 Issued to shareholders electing to receive payment of distribution in Fund shares 42,310 -- 28,365 Redemptions (448,638) (293,310) (320,555) ------- ------- ------- Net increase 3,573 52,437 439,366 ======= ====== ======= *For the eleven months ended August 31, 1995 (Note 10). - ------------------------------------------------------------------------------ (4) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES The investment adviser fee was paid to Eaton Vance Management (EVM) as compensation for management and investment advisory services rendered to the Fund. The fee is computed at the monthly rate of 0.0625% (0.75% per annum) of the Fund's average daily net assets up to $500 million and at reduced rates as daily net assets exceed that level. For the year ended August 31, 1996, the effective annual rate, based on average daily net assets, was 0.75%. 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 investment adviser fee. Certain of the officers and Trustees of the Fund are officers and directors/ trustees of the above organization (See Note 5). Trustees of the Fund that are not affiliated with the Investment Advisor 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, 1996, no significant amounts have been deferred. - ------------------------------------------------------------------------------ (5) 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) 5% 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 the aggregate amount of contingent deferred sales charges (see Note 6) and daily 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 accrued $114,803 as payable to EVD for the year ended August 31, 1996, representing 0.75% of daily average net assets. At August 31, 1996, the amount of Uncovered Distribution Charges of EVD calculated under the Plan was approximately $449,702. In addition, the Plan authorizes the Fund to make payments of service fees to the Principal Underwriter, Authorized Firms and other persons in amounts not exceeding 0.25% of the Fund's average daily net assets for each fiscal year. The Trustees have initially implemented the Plan by authorizing the Fund to make quarterly payments of service fees to the Principal Underwriter and Authorized Firms in amounts not expected to exceed 0.25% per annum of the Fund's average daily net assets based on the value of Fund shares sold by such persons and remaining outstanding for at least one year. Service fee payments will be made for personal services and/or the maintenance of shareholder accounts. Service fees are separate and distinct from the sales commissions and distribution fees payable by the Fund to EVD, and, as such, are not subject to automatic discontinuance where there are no outstanding Uncovered Distribution Charges of EVD. During the year ended August 31, 1996, the Fund paid or accrued $25,896 under the Plan to the Principal Underwriter and Authorized Firms. - ------------------------------------------------------------------------------ (6) CONTINGENT DEFERRED SALES CHARGE A contingent deferred sales charge (CDSC) is imposed on any redemption of Fund shares made within six years of purchase. Generally, the CDSC is based upon the lower of net asset value at date of redemption or date of purchase. No charge is levied on shares acquired by reinvestment of dividends or capital gain distributions. The CDSC is imposed at declining rates that begin at 5% in the case of redemptions in the first and second year after purchase (6% and 5%, respectively for shares acquired prior to August 1, 1994), declining one percentage point each year. No CDSC is levied on shares which have been sold to EVM or its affiliates or to their respective employees or clients. CDSC charges are paid to EVD to reduce the amount of Uncovered Distribution Charges calculated under the Fund's Distribution Plan. If no Uncovered Distribution Charges exist, the CDSC will be credited to operations. EVD received approximately $109,292 of CDSC paid by shareholders for the year ended August 31, 1996. - ------------------------------------------------------------------------------ (7) LINE OF CREDIT The Fund participates with other funds managed by EVM 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 Fund solely to facilitate the handling of unusual and/or unanticipated short-term cash requirements. Interest is charged to each fund 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 at the end of each quarter. At August 31, 1996, the Fund had a balance outstanding pursuant to this line of credit amounting to $497,000. - ------------------------------------------------------------------------------ (8) PURCHASES AND SALES OF INVESTMENTS Purchases and sales of investments, other than U.S. Government Securities and short-term obligations, aggregated $13,521,893 and $14,322,196, respectively. - ------------------------------------------------------------------------------ (9) FEDERAL INCOME TAX BASIS OF INVESTMENTS The cost and unrealized appreciation/depreciation in value of the investment securities owned at August 31, 1996, as computed on a federal income tax basis, are as follows: Aggregate cost $15,058,926 =========== Gross unrealized appreciation $ 5,686,864 Gross unrealized depreciation (821,714) ---------- Net unrealized appreciation $ 4,865,150 =========== - ------------------------------------------------------------------------------ (10) SPECIAL SHAREHOLDER MEETING (UNAUDITED) The Fund changed its fiscal year end from September 30 to August 31, effective August 31, 1995. EV Marathon Gold & Natural Resources Fund (the Fund) held a special shareholder meeting on August 30, 1995. On July 5, 1995, the record date of the meeting, the Fund had 932,343 shares outstanding, of which 540,439 shares were represented at the meeting. The votes at the meeting were as follows: Item: The approval of an Agreement and Plan of Reorganization pursuant to which the Fund will be recognized to become a series fund of Eaton Vance Growth Trust, a Massachusetts business trust. NUMBER OF SHARES (UNAUDITED) ---------------- Affirmative 506,089 Against 4,640 Abstain 29,710 INDEPENDENT AUDITORS' REPORT - ------------------------------------------------------------------------------ TO THE TRUSTEES AND SHAREHOLDERS OF EV MARATHON GOLD & NATURAL RESOURCES FUND: We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of EV Marathon Gold & Natural Resources Fund (the Fund) (one of the series of Eaton Vance Growth Trust) as of August 31, 1996, the related statements of operations for the year ended August 31, 1996, the statements of changes in net assets for the year ended August 31, 1996, and the eleven months ended August 31, 1995 and for the year ended September 30, 1994 and the financial highlights for the year ended August 31, 1996, and the eleven months ended August 31, 1995 and for each of the years in the four-year period ended September 30, 1994. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights 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 financial highlights 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, 1996, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other audit procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements and financial highlights present fairly, in all material respects, the financial position of EV Marathon Gold & Natural Resources Fund at August 31, 1996, the results of its operations, the changes in its net assets and its financial highlights for the respective stated periods in conformity with generally accepted accounting principles. DELOITTE & TOUCHE LLP BOSTON, MASSACHUSETTS OCTOBER 4, 1996 ------------------------- INVESTMENT MANAGEMENT EV MARATHON OFFICERS INDEPENDENT TRUSTEES GOLD & NATURAL JAMES B. HAWKES DONALD R. DWIGHT RESOURCES FUND President, Trustee President, Dwight Partners, 24 Federal Street Inc. Chairman, Newspapers Boston, MA 02110 M. DOZIER GARDNER of New England, Inc. Vice President SAMUEL L. HAYES, III WILLIAM D. BURT Jacob H. Schiff Vice President and Professor of Investment Portfolio Co-Manager Banking, Harvard University Graduate School BARCLAY TITTMAN of Business Administration Vice President and Portfolio Co-Manager NORTON H. REAMER President, United Asset JAMES L. O'CONNOR Management Corporation Treasurer JOHN L. THORNDIKE THOMAS OTIS Director, Secretary Fiduciary Company Incorporated JACK L. TREYNOR Investment Adviser and Consultant -----END PRIVACY-ENHANCED MESSAGE-----