UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-07409
Tax-Managed Growth Portfolio
(Exact Name of Registrant as Specified in Charter)
Two International Place, Boston, Massachusetts 02110
(Address of Principal Executive Offices)
Maureen A. Gemma
Two International Place, Boston, Massachusetts 02110
(Name and Address of Agent for Services)
(617) 482-8260
(Registrant’s Telephone Number)
December 31
Date of Fiscal Year End
June 30, 2018
Date of Reporting Period
Item 1. Reports to Stockholders
Tax-Managed Growth Portfolio
June 30, 2018
Portfolio of Investments (Unaudited)
Common Stocks — 98.4% |
| |||||||
Security | Shares | Value | ||||||
Aerospace & Defense — 3.1% | ||||||||
Arconic, Inc. | 4 | $ | 68 | |||||
Boeing Co. (The) | 1,047,436 | 351,425,252 | ||||||
General Dynamics Corp. | 133,997 | 24,978,381 | ||||||
Huntington Ingalls Industries, Inc. | 539 | 116,850 | ||||||
Lockheed Martin Corp. | 62,473 | 18,456,398 | ||||||
Northrop Grumman Corp. | 35,008 | 10,771,962 | ||||||
Raytheon Co. | 74,943 | 14,477,489 | ||||||
Rockwell Collins, Inc. | 12,850 | 1,730,638 | ||||||
United Technologies Corp. | 878,294 | 109,813,099 | ||||||
$ | 531,770,137 | |||||||
Air Freight & Logistics — 1.8% | ||||||||
C.H. Robinson Worldwide, Inc. | 810,160 | $ | 67,777,986 | |||||
Expeditors International of Washington, Inc. | 1,300 | 95,030 | ||||||
FedEx Corp. | 305,493 | 69,365,240 | ||||||
United Parcel Service, Inc., Class B | 1,680,992 | 178,571,780 | ||||||
$ | 315,810,036 | |||||||
Airlines — 0.0%(1) | ||||||||
American Airlines Group, Inc. | 64,955 | $ | 2,465,692 | |||||
Delta Air Lines, Inc. | 47,773 | 2,366,674 | ||||||
Southwest Airlines Co. | 27,165 | 1,382,155 | ||||||
$ | 6,214,521 | |||||||
Auto Components — 0.3% | ||||||||
Adient PLC | 15,055 | $ | 740,555 | |||||
Aptiv PLC | 228,000 | 20,891,640 | ||||||
BorgWarner, Inc. | 2,800 | 120,848 | ||||||
Delphi Technologies PLC | 76,000 | 3,454,960 | ||||||
Gentex Corp. | 1,443,192 | 33,222,280 | ||||||
$ | 58,430,283 | |||||||
Automobiles — 0.1% | ||||||||
Daimler AG | 38,000 | $ | 2,439,600 | |||||
Ford Motor Co. | 1,212,587 | 13,423,338 | ||||||
General Motors Co. | 73,598 | 2,899,761 | ||||||
Harley-Davidson, Inc. | 20,162 | 848,417 | ||||||
Tesla, Inc.(2) | 7,397 | 2,536,801 | ||||||
Toyota Motor Corp. ADR | 5,000 | 644,050 | ||||||
$ | 22,791,967 |
Security | Shares | Value | ||||||
Banks — 6.5% | ||||||||
Bank of America Corp. | 2,728,110 | $ | 76,905,421 | |||||
Bank of Montreal | 4 | 309 | ||||||
BB&T Corp. | 1,325,045 | 66,835,270 | ||||||
BB&T Corp.(3) | 22,314 | 1,125,518 | ||||||
CIT Group, Inc. | 66,161 | 3,335,176 | ||||||
Citigroup, Inc. | 1,124,136 | 75,227,181 | ||||||
Commerce Bancshares, Inc. | 43,483 | 2,813,785 | ||||||
CVB Financial Corp. | 152,000 | 3,407,840 | ||||||
Fifth Third Bancorp | 1,149,208 | 32,982,270 | ||||||
HSBC Holdings PLC | 220,592 | 2,063,860 | ||||||
HSBC Holdings PLC ADR | 424 | 19,987 | ||||||
Huntington Bancshares, Inc. | 143,117 | 2,112,407 | ||||||
ING Groep NV ADR | 131,742 | 1,886,545 | ||||||
JPMorgan Chase & Co. | 3,503,875 | 365,103,775 | ||||||
KeyCorp | 111,718 | 2,182,970 | ||||||
M&T Bank Corp. | 230,611 | 39,238,462 | ||||||
PNC Financial Services Group, Inc. (The) | 87,271 | 11,790,312 | ||||||
Regions Financial Corp. | 714,736 | 12,708,006 | ||||||
Societe Generale SA | 460,793 | 19,367,078 | ||||||
SunTrust Banks, Inc. | 453,204 | 29,920,528 | ||||||
SVB Financial Group(2) | 27,933 | 8,065,933 | ||||||
Synovus Financial Corp. | 1,565 | 82,679 | ||||||
Toronto-Dominion Bank (The) | 30,213 | 1,748,124 | ||||||
U.S. Bancorp | 1,636,191 | 81,842,274 | ||||||
Wells Fargo & Co. | 5,054,956 | 280,246,761 | ||||||
$ | 1,121,012,471 | |||||||
Beverages — 2.1% | ||||||||
Anheuser-Busch InBev SA/NV ADR | 25,379 | $ | 2,557,188 | |||||
Boston Beer Co., Inc. (The), Class A(2) | 4,730 | 1,417,581 | ||||||
Brown-Forman Corp., Class A | 9,750 | 476,385 | ||||||
Brown-Forman Corp., Class B | 24,653 | 1,208,244 | ||||||
Coca-Cola Co. (The) | 3,174,173 | 139,219,228 | ||||||
Constellation Brands, Inc., Class A | 9,629 | 2,107,499 | ||||||
Diageo PLC ADR | 5,226 | 752,596 | ||||||
Dr Pepper Snapple Group, Inc. | 2,700 | 329,400 | ||||||
Molson Coors Brewing Co., Class B | 186,000 | 12,655,440 | ||||||
Monster Beverage Corp.(2) | 135,851 | 7,784,262 | ||||||
PepsiCo, Inc. | 1,829,801 | 199,210,435 | ||||||
$ | 367,718,258 | |||||||
Biotechnology — 3.9% | ||||||||
AbbVie, Inc. | 2,242,884 | $ | 207,803,203 | |||||
Agios Pharmaceuticals, Inc.(2) | 74,972 | 6,314,891 | ||||||
Alexion Pharmaceuticals, Inc.(2) | 759,765 | 94,324,824 |
25 | See Notes to Financial Statements. |
Tax-Managed Growth Portfolio
June 30, 2018
Portfolio of Investments (Unaudited) — continued
Security | Shares | Value | ||||||
Biotechnology (continued) | ||||||||
Alkermes PLC(2) | 5,000 | $ | 205,800 | |||||
Alnylam Pharmaceuticals, Inc.(2) | 6,000 | 590,940 | ||||||
Amgen, Inc. | 733,612 | 135,417,439 | ||||||
Biogen, Inc.(2) | 227,430 | 66,009,283 | ||||||
Celgene Corp.(2) | 436,255 | 34,647,372 | ||||||
Gilead Sciences, Inc. | 1,139,346 | 80,711,271 | ||||||
Incyte Corp.(2) | 11,472 | 768,624 | ||||||
Neurocrine Biosciences, Inc.(2) | 20,350 | 1,999,184 | ||||||
Regeneron Pharmaceuticals, Inc.(2) | 18,129 | 6,254,324 | ||||||
Shire PLC ADR | 6,338 | 1,069,854 | ||||||
Vertex Pharmaceuticals, Inc.(2) | 234,180 | 39,801,233 | ||||||
$ | 675,918,242 | |||||||
Building Products — 0.3% | ||||||||
A.O. Smith Corp. | 27,845 | $ | 1,647,032 | |||||
Fortune Brands Home & Security, Inc. | 1,723 | 92,508 | ||||||
Johnson Controls International PLC | 309,402 | 10,349,497 | ||||||
Lennox International, Inc. | 168,620 | 33,749,293 | ||||||
Lennox International, Inc.(3) | 48,340 | 9,665,575 | ||||||
Masco Corp. | 25,000 | 935,500 | ||||||
$ | 56,439,405 | |||||||
Capital Markets — 5.4% | ||||||||
Affiliated Managers Group, Inc. | 36,716 | $ | 5,458,568 | |||||
Ameriprise Financial, Inc. | 215,583 | 30,155,750 | ||||||
Bank of New York Mellon Corp. (The) | 473,559 | 25,539,037 | ||||||
BlackRock, Inc. | 11,190 | 5,584,258 | ||||||
Brookfield Asset Management, Inc., Class A | 89,070 | 3,610,898 | ||||||
Cboe Global Markets, Inc. | 215,414 | 22,418,135 | ||||||
Charles Schwab Corp. (The) | 3,788,973 | 193,616,520 | ||||||
CME Group, Inc. | 177,716 | 29,131,207 | ||||||
E*TRADE Financial Corp.(2) | 4,593 | 280,908 | ||||||
Franklin Resources, Inc. | 211,191 | 6,768,672 | ||||||
Goldman Sachs Group, Inc. (The) | 665,837 | 146,863,667 | ||||||
Intercontinental Exchange, Inc. | 116,086 | 8,538,125 | ||||||
Invesco, Ltd. | 4,040 | 107,302 | ||||||
Legg Mason, Inc. | 122,902 | 4,268,386 | ||||||
LPL Financial Holdings, Inc. | 215,573 | 14,128,654 | ||||||
Moody’s Corp. | 207,295 | 35,356,235 | ||||||
Morgan Stanley | 2,395,451 | 113,544,377 | ||||||
Nasdaq, Inc. | 71,203 | 6,498,698 | ||||||
Northern Trust Corp. | 610,830 | 62,848,299 | ||||||
Raymond James Financial, Inc. | 15,043 | 1,344,092 | ||||||
S&P Global, Inc. | 221,320 | 45,124,935 | ||||||
SEI Investments Co. | 150,000 | 9,378,000 |
Security | Shares | Value | ||||||
Capital Markets (continued) | ||||||||
State Street Corp. | 869,046 | $ | 80,899,492 | |||||
Stifel Financial Corp. | 112,796 | 5,893,591 | ||||||
T. Rowe Price Group, Inc. | 544,617 | 63,224,587 | ||||||
UBS Group AG | 9 | 138 | ||||||
Waddell & Reed Financial, Inc., Class A | 9,248 | 166,187 | ||||||
$ | 920,748,718 | |||||||
Chemicals — 1.4% | ||||||||
AdvanSix, Inc.(2) | 1,768 | $ | 64,762 | |||||
Air Products and Chemicals, Inc. | 8,857 | 1,379,301 | ||||||
Albemarle Corp. | 90,157 | 8,504,510 | ||||||
Balchem Corp. | 17,292 | 1,697,037 | ||||||
Chemours Co. (The) | 151 | 6,698 | ||||||
DowDuPont, Inc. | 1,230,615 | 81,122,141 | ||||||
Eastman Chemical Co. | 1,950 | 194,922 | ||||||
Ecolab, Inc. | 564,891 | 79,271,154 | ||||||
International Flavors & Fragrances, Inc. | 5,000 | 619,800 | ||||||
LyondellBasell Industries NV, Class A | 4,274 | 469,499 | ||||||
NewMarket Corp. | 12,318 | 4,982,631 | ||||||
PPG Industries, Inc. | 375,957 | 38,998,020 | ||||||
Praxair, Inc. | 6,143 | 971,515 | ||||||
Sherwin-Williams Co. (The) | 28,213 | 11,498,772 | ||||||
Valvoline, Inc. | 68,886 | 1,485,871 | ||||||
Westlake Chemical Corp. | 1,000 | 107,630 | ||||||
$ | 231,374,263 | |||||||
Commercial Services & Supplies — 0.1% | ||||||||
Copart, Inc.(2) | 3,800 | $ | 214,928 | |||||
Pitney Bowes, Inc. | 14,270 | 122,294 | ||||||
Stericycle, Inc.(2) | 13,300 | 868,357 | ||||||
Waste Management, Inc. | 109,569 | 8,912,342 | ||||||
$ | 10,117,921 | |||||||
Communications Equipment — 2.0% | ||||||||
Arista Networks, Inc.(2) | 650,020 | $ | 167,373,650 | |||||
Arista Networks, Inc.(2)(3) | 127,576 | 32,849,544 | ||||||
Cisco Systems, Inc. | 2,402,532 | 103,380,952 | ||||||
Juniper Networks, Inc. | 285,300 | 7,822,926 | ||||||
Motorola Solutions, Inc. | 37,773 | 4,395,644 | ||||||
Nokia Oyj ADR | 192 | 1,104 | ||||||
Palo Alto Networks, Inc.(2) | 145,232 | 29,840,819 | ||||||
$ | 345,664,639 |
26 | See Notes to Financial Statements. |
Tax-Managed Growth Portfolio
June 30, 2018
Portfolio of Investments (Unaudited) — continued
Security | Shares | Value | ||||||
Construction & Engineering — 0.0%(1) | ||||||||
Fluor Corp. | 2,400 | $ | 117,072 | |||||
Jacobs Engineering Group, Inc. | 56,851 | 3,609,470 | ||||||
Quanta Services, Inc.(2) | 2,000 | 66,800 | ||||||
$ | 3,793,342 | |||||||
Construction Materials — 0.1% | ||||||||
Vulcan Materials Co. | 60,866 | $ | 7,855,366 | |||||
$ | 7,855,366 | |||||||
Consumer Finance — 1.5% | ||||||||
American Express Co. | 1,053,028 | $ | 103,196,744 | |||||
Capital One Financial Corp. | 130,994 | 12,038,349 | ||||||
Discover Financial Services | 1,211,463 | 85,299,110 | ||||||
LendingClub Corp.(2) | 79,691 | 302,029 | ||||||
Navient Corp. | 10,200 | 132,906 | ||||||
SLM Corp.(2) | 10,200 | 116,790 | ||||||
Synchrony Financial | 1,693,648 | 56,533,970 | ||||||
$ | 257,619,898 | |||||||
Containers & Packaging — 0.1% | ||||||||
Avery Dennison Corp. | 2,250 | $ | 229,725 | |||||
Ball Corp. | 25,288 | 898,989 | ||||||
Bemis Co., Inc. | 50,882 | 2,147,729 | ||||||
Crown Holdings, Inc.(2) | 13,787 | 617,106 | ||||||
International Paper Co. | 42,000 | 2,187,360 | ||||||
Packaging Corp. of America | 3,725 | 416,418 | ||||||
WestRock Co. | 39,303 | 2,241,057 | ||||||
$ | 8,738,384 | |||||||
Distributors — 0.2% | ||||||||
Genuine Parts Co. | 201,037 | $ | 18,453,186 | |||||
LKQ Corp.(2) | 224,518 | 7,162,124 | ||||||
$ | 25,615,310 | |||||||
Diversified Consumer Services — 0.0%(1) | ||||||||
H&R Block, Inc. | 25,610 | $ | 583,396 | |||||
$ | 583,396 | |||||||
Diversified Financial Services — 2.3% | ||||||||
Berkshire Hathaway, Inc., Class A(2) | 453 | $ | 127,764,124 | |||||
Berkshire Hathaway, Inc., Class B(2) | 1,439,927 | 268,762,375 | ||||||
$ | 396,526,499 |
Security | Shares | Value | ||||||
Diversified Telecommunication Services — 0.5% | ||||||||
AT&T, Inc. | 666,443 | $ | 21,399,485 | |||||
CenturyLink, Inc. | 5,086 | 94,803 | ||||||
Frontier Communications Corp. | 894 | 4,792 | ||||||
Verizon Communications, Inc. | 1,185,329 | 59,633,902 | ||||||
Windstream Holdings, Inc. | 821 | 4,326 | ||||||
$ | 81,137,308 | |||||||
Electric Utilities — 0.2% | ||||||||
Duke Energy Corp. | 31,500 | $ | 2,491,020 | |||||
Entergy Corp. | 600 | 48,474 | ||||||
Exelon Corp. | 28,310 | 1,206,006 | ||||||
NextEra Energy, Inc. | 124,972 | 20,874,073 | ||||||
Southern Co. (The) | 117,942 | 5,461,894 | ||||||
$ | 30,081,467 | |||||||
Electrical Equipment — 1.0% | ||||||||
Acuity Brands, Inc. | 11,121 | $ | 1,288,590 | |||||
AMETEK, Inc. | 70,596 | 5,094,207 | ||||||
Eaton Corp. PLC | 130,064 | 9,720,983 | ||||||
Emerson Electric Co. | 2,055,913 | 142,145,825 | ||||||
Hubbell, Inc. | 1,978 | 209,154 | ||||||
nVent Electric PLC(2) | 4 | 101 | ||||||
Rockwell Automation, Inc. | 116,665 | 19,393,223 | ||||||
$ | 177,852,083 | |||||||
Electronic Equipment, Instruments & Components — 0.3% | ||||||||
Amphenol Corp., Class A | 10,986 | $ | 957,430 | |||||
CDW Corp. | 142,695 | 11,528,329 | ||||||
Corning, Inc. | 1,543,029 | 42,448,728 | ||||||
Keysight Technologies, Inc.(2) | 9,942 | 586,876 | ||||||
Knowles Corp.(2) | 8,001 | 122,415 | ||||||
TE Connectivity, Ltd. | 29,999 | 2,701,710 | ||||||
Trimble, Inc.(2) | 3,200 | 105,088 | ||||||
$ | 58,450,576 | |||||||
Energy Equipment & Services — 0.8% | ||||||||
Apergy Corp.(2) | 171,700 | $ | 7,168,475 | |||||
Frank’s International NV | 1,500,000 | 11,700,000 | ||||||
Halliburton Co. | 951,376 | 42,869,003 | ||||||
National Oilwell Varco, Inc. | 5,061 | 219,647 | ||||||
Schlumberger, Ltd. | 1,207,219 | 80,919,890 | ||||||
Transocean, Ltd.(2) | 2,884 | 38,761 | ||||||
$ | 142,915,776 |
27 | See Notes to Financial Statements. |
Tax-Managed Growth Portfolio
June 30, 2018
Portfolio of Investments (Unaudited) — continued
Security | Shares | Value | ||||||
Equity Real Estate Investment Trusts (REITs) — 0.1% | ||||||||
American Tower Corp. | 32,841 | $ | 4,734,687 | |||||
Host Hotels & Resorts, Inc. | 8,720 | 183,731 | ||||||
ProLogis, Inc. | 2,000 | 131,380 | ||||||
Public Storage | 49 | 11,116 | ||||||
Simon Property Group, Inc. | 25,563 | 4,350,567 | ||||||
$ | 9,411,481 | |||||||
Food & Staples Retailing — 2.2% | ||||||||
Costco Wholesale Corp. | 883,550 | $ | 184,644,279 | |||||
Kroger Co. (The) | 145,541 | 4,140,641 | ||||||
Sprouts Farmers Market, Inc.(2) | 1,554,670 | 34,311,567 | ||||||
Sysco Corp. | 443,443 | 30,282,723 | ||||||
Walgreens Boots Alliance, Inc. | 605,201 | 36,321,138 | ||||||
Walmart, Inc. | 1,035,785 | 88,714,985 | ||||||
$ | 378,415,333 | |||||||
Food Products — 1.5% | ||||||||
Archer-Daniels-Midland Co. | 305,116 | $ | 13,983,466 | |||||
Campbell Soup Co. | 755,494 | 30,627,727 | ||||||
Conagra Brands, Inc. | 413,772 | 14,784,074 | ||||||
Flowers Foods, Inc. | 261,924 | 5,455,877 | ||||||
General Mills, Inc. | 19,187 | 849,217 | ||||||
Hain Celestial Group, Inc. (The)(2) | 17,240 | 513,752 | ||||||
Hershey Co. (The) | 551,784 | 51,349,019 | ||||||
Hormel Foods Corp. | 147,846 | 5,501,350 | ||||||
JM Smucker Co. (The) | 18,967 | 2,038,573 | ||||||
Kellogg Co. | 63,058 | 4,405,862 | ||||||
Kraft Heinz Co. (The) | 41,254 | 2,591,576 | ||||||
Lamb Weston Holdings, Inc. | 94,824 | 6,496,392 | ||||||
McCormick & Co., Inc. | 51,969 | 6,033,081 | ||||||
Mondelez International, Inc., Class A | 550,350 | 22,564,350 | ||||||
Nestle SA | 1,118,348 | 86,672,868 | ||||||
Tyson Foods, Inc., Class A | 24,682 | 1,699,356 | ||||||
$ | 255,566,540 | |||||||
Health Care Equipment & Supplies — 2.0% | ||||||||
Abbott Laboratories | 1,808,925 | $ | 110,326,336 | |||||
ABIOMED, Inc.(2) | 59,930 | 24,514,367 | ||||||
Avanos Medical, Inc. | 542 | 31,030 | ||||||
Baxter International, Inc. | 232,275 | 17,151,186 | ||||||
Becton, Dickinson and Co. | 71,495 | 17,127,342 | ||||||
Boston Scientific Corp.(2) | 34,020 | 1,112,454 | ||||||
Danaher Corp. | 139,109 | 13,727,276 | ||||||
DexCom, Inc.(2) | 94,962 | 9,019,491 | ||||||
Edwards Lifesciences Corp.(2) | 5,200 | 756,964 |
Security | Shares | Value | ||||||
Health Care Equipment & Supplies (continued) | ||||||||
Hologic, Inc.(2) | 154,947 | $ | 6,159,143 | |||||
Intuitive Surgical, Inc.(2) | 75,158 | 35,961,600 | ||||||
Medtronic PLC | 532,861 | 45,618,230 | ||||||
Smith & Nephew PLC ADR | 5,500 | 206,415 | ||||||
Stryker Corp. | 272,453 | 46,006,414 | ||||||
Varian Medical Systems, Inc.(2) | 5,609 | 637,855 | ||||||
Zimmer Biomet Holdings, Inc. | 148,851 | 16,587,955 | ||||||
$ | 344,944,058 | |||||||
Health Care Providers & Services — 1.0% | ||||||||
Acadia Healthcare Co., Inc.(2) | 32,000 | $ | 1,309,120 | |||||
Aetna, Inc. | 18,766 | 3,443,561 | ||||||
Anthem, Inc. | 141,182 | 33,605,552 | ||||||
Cardinal Health, Inc. | 29,805 | 1,455,378 | ||||||
Centene Corp.(2) | 27,164 | 3,346,877 | ||||||
Cigna Corp. | 18,852 | 3,203,897 | ||||||
CVS Health Corp. | 1,249,677 | 80,416,715 | ||||||
DaVita, Inc.(2) | 157,055 | 10,905,899 | ||||||
Express Scripts Holding Co.(2) | 5 | 386 | ||||||
HCA Healthcare, Inc. | 165,025 | 16,931,565 | ||||||
Henry Schein, Inc.(2) | 26,346 | 1,913,773 | ||||||
Humana, Inc. | 1,563 | 465,196 | ||||||
McKesson Corp. | 6,776 | 903,918 | ||||||
UnitedHealth Group, Inc. | 80,419 | 19,729,998 | ||||||
$ | 177,631,835 | |||||||
Health Care Technology — 0.2% | ||||||||
Cerner Corp.(2) | 17,440 | $ | 1,042,738 | |||||
Cotiviti Holdings, Inc.(2) | 863,310 | 38,097,870 | ||||||
$ | 39,140,608 | |||||||
Hotels, Restaurants & Leisure — 3.3% | ||||||||
Carnival Corp. | 21,669 | $ | 1,241,851 | |||||
Chipotle Mexican Grill, Inc.(2) | 121,117 | 52,246,240 | ||||||
Choice Hotels International, Inc. | 30,002 | 2,268,151 | ||||||
Darden Restaurants, Inc. | 21,300 | 2,280,378 | ||||||
Domino’s Pizza, Inc. | 148 | 41,761 | ||||||
Hilton Worldwide Holdings, Inc. | 99,691 | 7,891,540 | ||||||
Marriott International, Inc., Class A | 1,953,018 | 247,252,079 | ||||||
McDonald’s Corp. | 33,097 | 5,185,969 | ||||||
MGM Resorts International(3) | 50,000 | 1,451,500 | ||||||
Starbucks Corp. | 3,793,418 | 185,308,469 | ||||||
Texas Roadhouse, Inc. | 398,116 | 26,080,579 | ||||||
Yum China Holdings, Inc. | 360,498 | 13,864,753 | ||||||
Yum! Brands, Inc. | 290,587 | 22,729,715 | ||||||
$ | 567,842,985 |
28 | See Notes to Financial Statements. |
Tax-Managed Growth Portfolio
June 30, 2018
Portfolio of Investments (Unaudited) — continued
Security | Shares | Value | ||||||
Household Durables — 0.1% | ||||||||
D.R. Horton, Inc. | 5,956 | $ | 244,196 | |||||
Leggett & Platt, Inc. | 52,679 | 2,351,591 | ||||||
Lennar Corp., Class A | 4,389 | 230,423 | ||||||
Lennar Corp., Class B | 21 | 896 | ||||||
Mohawk Industries, Inc.(2) | 2,820 | 604,241 | ||||||
Newell Brands, Inc. | 479,252 | 12,359,909 | ||||||
NVR, Inc.(2) | 176 | 522,782 | ||||||
PulteGroup, Inc. | 29,551 | 849,591 | ||||||
Tempur Sealy International, Inc.(2) | 135,025 | 6,487,951 | ||||||
Toll Brothers, Inc. | 2,223 | 82,229 | ||||||
Whirlpool Corp. | 1,391 | 203,406 | ||||||
$ | 23,937,215 | |||||||
Household Products — 1.3% | ||||||||
Church & Dwight Co., Inc. | 1,120 | $ | 59,539 | |||||
Clorox Co. (The) | 1,340 | 181,235 | ||||||
Colgate-Palmolive Co. | 1,393,555 | 90,316,300 | ||||||
Energizer Holdings, Inc. | 9,500 | 598,120 | ||||||
Kimberly-Clark Corp. | 42,168 | 4,441,977 | ||||||
Procter & Gamble Co. (The) | 1,724,982 | 134,652,095 | ||||||
$ | 230,249,266 | |||||||
Independent Power and Renewable Electricity Producers — 0.0%(1) | ||||||||
AES Corp. (The) | 1,730 | $ | 23,199 | |||||
$ | 23,199 | |||||||
Industrial Conglomerates — 1.6% | ||||||||
3M Co. | 675,951 | $ | 132,973,081 | |||||
Carlisle Cos., Inc. | 51,706 | 5,600,277 | ||||||
General Electric Co. | 5,670,337 | 77,173,286 | ||||||
Honeywell International, Inc. | 374,876 | 54,000,888 | ||||||
Roper Technologies, Inc. | 20,247 | 5,586,350 | ||||||
$ | 275,333,882 | |||||||
Insurance — 1.4% | ||||||||
Aegon NV ADR | 5 | $ | 30 | |||||
Aflac, Inc. | 632,912 | 27,227,874 | ||||||
Aflac, Inc.(3) | 50,000 | 2,151,000 | ||||||
Alleghany Corp. | 3,985 | 2,291,255 | ||||||
Allstate Corp. (The) | 6,403 | 584,402 | ||||||
American International Group, Inc. | 159,867 | 8,476,148 | ||||||
Aon PLC | 102,957 | 14,122,612 | ||||||
Arch Capital Group, Ltd.(2) | 39,000 | 1,031,940 | ||||||
Arthur J. Gallagher & Co. | 374,352 | 24,437,699 |
Security | Shares | Value | ||||||
Insurance (continued) | ||||||||
Assurant, Inc. | 10,300 | $ | 1,065,947 | |||||
Brighthouse Financial, Inc.(2) | 936 | 37,506 | ||||||
Chubb, Ltd. | 8,410 | 1,068,238 | ||||||
Cincinnati Financial Corp. | 159,319 | 10,652,068 | ||||||
Fidelity National Financial, Inc.(3) | 55,779 | 2,096,308 | ||||||
Hartford Financial Services Group, Inc. | 32,187 | 1,645,721 | ||||||
Markel Corp.(2) | 6,362 | 6,898,635 | ||||||
Marsh & McLennan Cos., Inc. | 113,365 | 9,292,529 | ||||||
MetLife, Inc. | 16,661 | 726,420 | ||||||
Progressive Corp. (The) | 1,256,871 | 74,343,920 | ||||||
Prudential Financial, Inc. | 20,786 | 1,943,699 | ||||||
Reinsurance Group of America, Inc. | 6,425 | 857,609 | ||||||
Torchmark Corp. | 422,551 | 34,399,877 | ||||||
Travelers Cos., Inc. (The) | 122,025 | 14,928,538 | ||||||
Trisura Group, Ltd.(2) | 124 | 2,500 | ||||||
Willis Towers Watson PLC | 104 | 15,766 | ||||||
WR Berkley Corp. | 1,500 | 108,615 | ||||||
$ | 240,406,856 | |||||||
Internet & Direct Marketing Retail — 4.5% | ||||||||
Amazon.com, Inc.(2) | 354,904 | $ | 603,265,819 | |||||
Booking Holdings, Inc.(2) | 50,820 | 103,016,714 | ||||||
Ctrip.com International, Ltd. ADR(2) | 5,200 | 247,676 | ||||||
Expedia Group, Inc. | 2,670 | 320,907 | ||||||
Netflix, Inc.(2) | 136,715 | 53,514,353 | ||||||
Qurate Retail, Inc.(2) | 97,587 | 2,070,796 | ||||||
Wayfair, Inc., Class A(2) | 39,272 | 4,663,943 | ||||||
$ | 767,100,208 | |||||||
Internet Software & Services — 8.7% | ||||||||
2U, Inc.(2) | 37,324 | $ | 3,118,793 | |||||
Akamai Technologies, Inc.(2) | 226,957 | 16,620,061 | ||||||
Alibaba Group Holding, Ltd. ADR(2) | 208,381 | 38,660,927 | ||||||
Alphabet, Inc., Class A(2) | 290,780 | 328,345,868 | ||||||
Alphabet, Inc., Class C(2) | 365,468 | 407,734,374 | ||||||
Altaba, Inc.(2) | 144,071 | 10,547,438 | ||||||
Baidu, Inc. ADR(2) | 72,500 | 17,617,500 | ||||||
Box, Inc., Class A(2) | 176,143 | 4,401,814 | ||||||
Cars.com, Inc.(2) | 400 | 11,356 | ||||||
Coupa Software, Inc.(2) | 28,188 | 1,754,421 | ||||||
eBay, Inc.(2) | 1,337,694 | 48,504,785 | ||||||
Envestnet, Inc.(3) | 40,000 | 2,197,066 | ||||||
Facebook, Inc., Class A(2) | 2,905,200 | 564,538,464 | ||||||
IAC/InterActiveCorp(2) | 4,215 | 642,745 | ||||||
LogMeIn, Inc. | 1,026 | 105,935 |
29 | See Notes to Financial Statements. |
Tax-Managed Growth Portfolio
June 30, 2018
Portfolio of Investments (Unaudited) — continued
Security | Shares | Value | ||||||
Internet Software & Services (continued) | ||||||||
Nutanix, Inc., Class A(2) | 33,412 | $ | 1,723,057 | |||||
Okta, Inc.(2) | 86,309 | 4,347,384 | ||||||
Pandora Media, Inc.(2) | 37,000 | 291,560 | ||||||
Shopify, Inc., Class A(2) | 6,694 | 976,588 | ||||||
Twitter, Inc.(2) | 614,278 | 26,825,520 | ||||||
VeriSign, Inc.(2) | 19,493 | 2,678,728 | ||||||
Yelp, Inc.(2) | 145,608 | 5,704,921 | ||||||
$ | 1,487,349,305 | |||||||
IT Services — 2.8% | ||||||||
Accenture PLC, Class A | 731,773 | $ | 119,710,745 | |||||
Alliance Data Systems Corp. | 686 | 159,975 | ||||||
Automatic Data Processing, Inc. | 162,672 | 21,820,822 | ||||||
Broadridge Financial Solutions, Inc. | 50,205 | 5,778,595 | ||||||
Cognizant Technology Solutions Corp., Class A | 5,578 | 440,606 | ||||||
Fidelity National Information Services, Inc. | 63,737 | 6,758,034 | ||||||
Fiserv, Inc.(2) | 627,056 | 46,458,579 | ||||||
International Business Machines Corp. | 470,080 | 65,670,176 | ||||||
Mastercard, Inc., Class A | 62,931 | 12,367,200 | ||||||
Paychex, Inc. | 709,749 | 48,511,344 | ||||||
PayPal Holdings, Inc.(2) | 164,791 | 13,722,147 | ||||||
Sabre Corp. | 157,290 | 3,875,626 | ||||||
Square, Inc., Class A(2) | 204,040 | 12,577,026 | ||||||
Total System Services, Inc. | 5 | 423 | ||||||
Visa, Inc., Class A | 849,131 | 112,467,401 | ||||||
Western Union Co. (The) | 82,244 | 1,672,020 | ||||||
$ | 471,990,719 | |||||||
Leisure Products — 0.0%(1) | ||||||||
Hasbro, Inc. | 786 | $ | 72,556 | |||||
Mattel, Inc. | 3,941 | 64,711 | ||||||
Polaris Industries, Inc. | 20,015 | 2,445,433 | ||||||
$ | 2,582,700 | |||||||
Life Sciences Tools & Services — 0.4% | ||||||||
Agilent Technologies, Inc. | 651,639 | $ | 40,297,356 | |||||
Illumina, Inc.(2) | 28,727 | 8,023,164 | ||||||
IQVIA Holdings, Inc.(2) | 34,269 | 3,420,731 | ||||||
Thermo Fisher Scientific, Inc. | 38,476 | 7,969,919 | ||||||
$ | 59,711,170 | |||||||
Machinery — 1.6% | ||||||||
Caterpillar, Inc. | 254,523 | $ | 34,531,135 | |||||
Cummins, Inc. | 150 | 19,950 |
Security | Shares | Value | ||||||
Machinery (continued) | ||||||||
Deere & Co. | 169,903 | $ | 23,752,439 | |||||
Donaldson Co., Inc. | 138,864 | 6,265,544 | ||||||
Dover Corp. | 343,400 | 25,136,880 | ||||||
Fortive Corp. | 28,046 | 2,162,627 | ||||||
Illinois Tool Works, Inc. | 1,058,721 | 146,675,207 | ||||||
Ingersoll-Rand PLC | 6,080 | 545,558 | ||||||
Lincoln Electric Holdings, Inc. | 53,660 | 4,709,202 | ||||||
Manitowoc Co., Inc. (The)(2) | 11,435 | 295,709 | ||||||
Middleby Corp.(2) | 2,000 | 208,840 | ||||||
PACCAR, Inc. | 186,094 | 11,530,384 | ||||||
Parker-Hannifin Corp. | 18,857 | 2,938,864 | ||||||
Pentair PLC | 4 | 168 | ||||||
Snap-on, Inc. | 22,178 | 3,564,448 | ||||||
Stanley Black & Decker, Inc. | 288 | 38,249 | ||||||
WABCO Holdings, Inc.(2) | 3,080 | 360,422 | ||||||
Welbilt, Inc.(2) | 45,741 | 1,020,482 | ||||||
Westinghouse Air Brake Technologies Corp. | 14,082 | 1,388,204 | ||||||
$ | 265,144,312 | |||||||
Media — 2.4% | ||||||||
CBS Corp., Class B | 575,030 | $ | 32,328,187 | |||||
Comcast Corp., Class A | 3,083,555 | 101,171,440 | ||||||
Discovery, Inc., Class A(2) | 6,930 | 190,575 | ||||||
Discovery, Inc., Class C(2) | 207 | 5,278 | ||||||
Interpublic Group of Cos., Inc. (The) | 700,848 | 16,427,877 | ||||||
Liberty Braves Group, Series A(2) | 1,236 | 31,778 | ||||||
Liberty Braves Group, Series C(2) | 2,473 | 63,952 | ||||||
Liberty Broadband Corp., Series A(2) | 3,091 | 233,803 | ||||||
Liberty Broadband Corp., Series C(2) | 6,183 | 468,177 | ||||||
Liberty Formula One, Series A(2) | 3,091 | 109,143 | ||||||
Liberty Formula One, Series C(2) | 6,183 | 229,575 | ||||||
Liberty Global PLC, Class A(2) | 8,854 | 243,839 | ||||||
Liberty Global PLC, Class C(2) | 27,614 | 734,809 | ||||||
Liberty Latin America Ltd., Class A(2) | 1,546 | 29,559 | ||||||
Liberty Latin America Ltd., Class C(2) | 4,825 | 93,508 | ||||||
Liberty SiriusXM Group, Series A(2) | 12,367 | 557,133 | ||||||
Liberty SiriusXM Group, Series C(2) | 24,734 | 1,121,934 | ||||||
Live Nation Entertainment, Inc.(2) | 1,800 | 87,426 | ||||||
News Corp., Class A | 24 | 372 | ||||||
Omnicom Group, Inc. | 131,803 | 10,052,615 | ||||||
TEGNA, Inc. | 1,201 | 13,031 | ||||||
Twenty-First Century Fox, Inc., Class A | 16,236 | 806,767 | ||||||
Viacom, Inc., Class B | 378,593 | 11,418,365 | ||||||
Walt Disney Co. (The) | 2,238,375 | 234,604,084 | ||||||
$ | 411,023,227 |
30 | See Notes to Financial Statements. |
Tax-Managed Growth Portfolio
June 30, 2018
Portfolio of Investments (Unaudited) — continued
Security | Shares | Value | ||||||
Metals & Mining — 0.2% | ||||||||
Alcoa Corp.(2) | 5,862 | $ | 274,811 | |||||
Cleveland-Cliffs, Inc.(2) | 527,743 | 4,448,873 | ||||||
Freeport-McMoRan, Inc. | 39,818 | 687,259 | ||||||
Glencore PLC | 598,405 | 2,841,101 | ||||||
Lonmin PLC(2) | 64 | 35 | ||||||
Nucor Corp. | 235,936 | 14,746,000 | ||||||
Southern Copper Corp. | 12,126 | 568,346 | ||||||
Steel Dynamics, Inc. | 182,124 | 8,368,598 | ||||||
Steel Dynamics, Inc.(3) | 50,000 | 2,295,202 | ||||||
$ | 34,230,225 | |||||||
Multi-Utilities — 0.1% | ||||||||
Consolidated Edison, Inc. | 43,075 | $ | 3,358,988 | |||||
Dominion Energy, Inc. | 13,110 | 893,840 | ||||||
DTE Energy Co. | 64,168 | 6,649,730 | ||||||
Sempra Energy | 67,787 | 7,870,748 | ||||||
WEC Energy Group, Inc. | 8,481 | 548,297 | ||||||
$ | 19,321,603 | |||||||
Multiline Retail — 0.1% | ||||||||
Dollar Tree, Inc.(2) | 142,658 | $ | 12,125,930 | |||||
Nordstrom, Inc. | 7,679 | 397,619 | ||||||
Target Corp. | 36,405 | 2,771,148 | ||||||
$ | 15,294,697 | |||||||
Oil, Gas & Consumable Fuels — 5.0% | ||||||||
Anadarko Petroleum Corp. | 800,521 | $ | 58,638,163 | |||||
Antero Resources Corp.(2) | 1,764,100 | 37,663,535 | ||||||
Apache Corp. | 175,832 | 8,220,146 | ||||||
California Resources Corp.(2) | 275 | 12,496 | ||||||
Cheniere Energy, Inc.(2) | 642,305 | 41,871,863 | ||||||
Chesapeake Energy Corp.(2) | 288 | 1,509 | ||||||
Chevron Corp. | 860,818 | 108,833,220 | ||||||
Concho Resources, Inc.(2) | 40,000 | 5,534,000 | ||||||
ConocoPhillips | 261,371 | 18,196,649 | ||||||
Devon Energy Corp. | 1,380,333 | 60,679,439 | ||||||
EOG Resources, Inc. | 1,544,181 | 192,142,442 | ||||||
EQT Corp. | 180,474 | 9,958,555 | ||||||
Exxon Mobil Corp. | 3,070,962 | 254,060,686 | ||||||
Hess Corp. | 64,190 | 4,293,669 | ||||||
Kinder Morgan, Inc. | 50,432 | 891,133 | ||||||
Marathon Oil Corp. | 123,481 | 2,575,814 | ||||||
Marathon Petroleum Corp. | 160,826 | 11,283,552 | ||||||
Murphy Oil Corp. | 145,312 | 4,907,186 | ||||||
Occidental Petroleum Corp. | 23,125 | 1,935,100 |
Security | Shares | Value | ||||||
Oil, Gas & Consumable Fuels (continued) | ||||||||
Phillips 66 | 179,486 | $ | 20,158,073 | |||||
Pioneer Natural Resources Co. | 14,430 | 2,730,733 | ||||||
Range Resources Corp. | 669,731 | 11,204,600 | ||||||
Royal Dutch Shell PLC, Class A ADR | 43,173 | 2,988,867 | ||||||
Southwestern Energy Co.(2) | 730 | 3,869 | ||||||
Valero Energy Corp. | 8,417 | 932,856 | ||||||
Williams Cos., Inc. (The) | 56,025 | 1,518,838 | ||||||
WPX Energy, Inc.(2) | 666 | 12,008 | ||||||
$ | 861,249,001 | |||||||
Personal Products — 0.1% | ||||||||
Estee Lauder Cos., Inc. (The), Class A | 37,503 | $ | 5,351,303 | |||||
Unilever NV - NY Shares | 19,032 | 1,060,463 | ||||||
Unilever PLC ADR | 18,708 | 1,034,178 | ||||||
$ | 7,445,944 | |||||||
Pharmaceuticals — 4.9% | ||||||||
Allergan PLC | 104,620 | $ | 17,442,246 | |||||
AstraZeneca PLC ADR | 870 | 30,546 | ||||||
Bristol-Myers Squibb Co. | 2,083,405 | 115,295,633 | ||||||
Catalent, Inc.(2) | 45,943 | 1,924,552 | ||||||
Eli Lilly & Co. | 1,731,494 | 147,748,383 | ||||||
GlaxoSmithKline PLC ADR | 1,468 | 59,175 | ||||||
Johnson & Johnson | 2,188,408 | 265,541,427 | ||||||
Johnson & Johnson(3) | 14,035 | 1,703,007 | ||||||
Mallinckrodt PLC(2) | 6 | 112 | ||||||
Merck & Co., Inc. | 1,404,676 | 85,263,833 | ||||||
Novartis AG ADR | 114,146 | 8,622,589 | ||||||
Novo Nordisk A/S ADR | 1,283,586 | 59,198,986 | ||||||
Pfizer, Inc. | 1,826,703 | 66,272,785 | ||||||
Roche Holding AG ADR | 35,808 | 989,375 | ||||||
Sanofi ADR | 5,100 | 204,051 | ||||||
Teva Pharmaceutical Industries, Ltd. ADR | 1,676,992 | 40,784,445 | ||||||
Zoetis, Inc. | 436,577 | 37,191,995 | ||||||
$ | 848,273,140 | |||||||
Professional Services — 0.2% | ||||||||
Equifax, Inc. | 12,654 | $ | 1,583,142 | |||||
Nielsen Holdings PLC | 72,356 | 2,237,971 | ||||||
On Assignment, Inc.(2) | 170,225 | 13,309,893 | ||||||
Verisk Analytics, Inc.(2) | 98,337 | 10,584,994 | ||||||
$ | 27,716,000 |
31 | See Notes to Financial Statements. |
Tax-Managed Growth Portfolio
June 30, 2018
Portfolio of Investments (Unaudited) — continued
Security | Shares | Value | ||||||
Road & Rail — 0.7% | ||||||||
Canadian National Railway Co. | 403,231 | $ | 32,964,134 | |||||
Canadian Pacific Railway, Ltd. | 942 | 172,405 | ||||||
CSX Corp. | 86,183 | 5,496,752 | ||||||
CSX Corp.(3) | 19,071 | 1,215,831 | ||||||
Kansas City Southern | 7,000 | 741,720 | ||||||
Norfolk Southern Corp. | 222,808 | 33,615,043 | ||||||
Union Pacific Corp. | 372,000 | 52,704,960 | ||||||
$ | 126,910,845 | |||||||
Semiconductors & Semiconductor Equipment — 5.2% | ||||||||
Analog Devices, Inc. | 632,596 | $ | 60,678,608 | |||||
Applied Materials, Inc. | 100,000 | 4,619,000 | ||||||
ASML Holding NV - NY Shares | 3,622 | 717,047 | ||||||
Broadcom, Inc. | 90,809 | 22,033,896 | ||||||
Cypress Semiconductor Corp. | 107,346 | 1,672,451 | ||||||
Intel Corp. | 6,829,512 | 339,495,042 | ||||||
Lam Research Corp. | 33,350 | 5,764,548 | ||||||
Lam Research Corp.(3) | 10,000 | 1,727,765 | ||||||
Marvell Technology Group, Ltd. | 95,391 | 2,045,183 | ||||||
Microchip Technology, Inc. | 367,513 | 33,425,307 | ||||||
Microchip Technology, Inc.(3) | 5,600 | 509,320 | ||||||
Micron Technology, Inc.(2) | 216,134 | 11,334,067 | ||||||
NVIDIA Corp. | 505,735 | 119,808,622 | ||||||
NVIDIA Corp.(3) | 100,000 | 23,690,000 | ||||||
Qorvo, Inc.(2) | 13,586 | 1,089,190 | ||||||
QUALCOMM, Inc. | 2,710,933 | 152,137,560 | ||||||
Texas Instruments, Inc. | 1,016,017 | 112,015,874 | ||||||
Versum Materials, Inc. | 1,129 | 41,942 | ||||||
Xilinx, Inc. | 104,186 | 6,799,178 | ||||||
$ | 899,604,600 | |||||||
Software — 4.9% | ||||||||
Activision Blizzard, Inc. | 218,092 | $ | 16,644,781 | |||||
Adobe Systems, Inc.(2) | 484,308 | 118,079,134 | ||||||
Autodesk, Inc.(2) | 6,271 | 822,065 | ||||||
Cadence Design Systems, Inc.(2) | 506,300 | 21,927,853 | ||||||
CDK Global, Inc. | 3 | 195 | ||||||
Check Point Software Technologies, Ltd.(2) | 151,500 | 14,798,520 | ||||||
Citrix Systems, Inc.(2) | 5,976 | 626,524 | ||||||
Dell Technologies, Inc., Class V(2) | 1,493 | 126,278 | ||||||
Electronic Arts, Inc.(2) | 48,820 | 6,884,596 | ||||||
FireEye, Inc.(2) | 82,732 | 1,273,245 | ||||||
Fortinet, Inc.(2) | 20,000 | 1,248,600 | ||||||
Intuit, Inc. | 40,048 | 8,182,007 | ||||||
Manhattan Associates, Inc.(2) | 56,873 | 2,673,600 |
Security | Shares | Value | ||||||
Software (continued) | ||||||||
Microsoft Corp. | 3,642,009 | $ | 359,138,508 | |||||
Oracle Corp. | 2,686,255 | 118,356,395 | ||||||
Paycom Software, Inc.(2) | 550,305 | 54,386,643 | ||||||
Red Hat, Inc.(2) | 2,550 | 342,644 | ||||||
salesforce.com, Inc.(2) | 106,644 | 14,546,242 | ||||||
ServiceNow, Inc.(2) | 199,377 | 34,386,551 | ||||||
Splunk, Inc.(2) | 306,812 | 30,408,137 | ||||||
Symantec Corp. | 72,900 | 1,505,385 | ||||||
Synopsys, Inc.(2) | 8,560 | 732,479 | ||||||
Tableau Software, Inc., Class A(2) | 13,699 | 1,339,077 | ||||||
Tyler Technologies, Inc.(2) | 10,000 | 2,221,000 | ||||||
Ultimate Software Group, Inc. (The)(2) | 41,687 | 10,726,482 | ||||||
Workday, Inc., Class A(2) | 121,726 | 14,743,453 | ||||||
Workday, Inc., Class A(2)(3) | 19,755 | 2,390,333 | ||||||
$ | 838,510,727 | |||||||
Specialty Retail — 2.2% | ||||||||
Advance Auto Parts, Inc. | 78,893 | $ | 10,705,780 | |||||
AutoNation, Inc.(2) | 5,972 | 290,120 | ||||||
AutoZone, Inc.(2) | 2,443 | 1,639,082 | ||||||
Bed Bath & Beyond, Inc. | 22,000 | 438,350 | ||||||
Best Buy Co., Inc. | 252,086 | 18,800,574 | ||||||
Dick’s Sporting Goods, Inc. | 35,000 | 1,233,750 | ||||||
Gap, Inc. (The) | 89,138 | 2,887,180 | ||||||
GNC Holdings, Inc., Class A(2) | 900 | 3,168 | ||||||
L Brands, Inc. | 307,212 | 11,329,979 | ||||||
Lowe’s Cos., Inc. | 935,819 | 89,436,222 | ||||||
O’Reilly Automotive, Inc.(2) | 82,957 | 22,694,546 | ||||||
O’Reilly Automotive, Inc.(2)(3) | 77,496 | 21,179,380 | ||||||
Ross Stores, Inc. | 262,238 | 22,224,671 | ||||||
Ross Stores, Inc.(3) | 40,000 | 3,388,559 | ||||||
Ross Stores, Inc.(3) | 88,000 | 7,450,542 | ||||||
Signet Jewelers, Ltd. | 65,986 | 3,678,720 | ||||||
Tiffany & Co. | 14,845 | 1,953,602 | ||||||
TJX Cos., Inc. (The) | 1,334,669 | 127,033,795 | ||||||
Tractor Supply Co. | 244,964 | 18,737,296 | ||||||
Ulta Beauty, Inc.(2) | 78,652 | 18,362,096 | ||||||
$ | 383,467,412 | |||||||
Technology Hardware, Storage & Peripherals — 3.5% | ||||||||
Apple, Inc. | 2,893,899 | $ | 535,689,644 | |||||
Hewlett Packard Enterprise Co. | 506 | 7,393 | ||||||
NetApp, Inc. | 493,167 | 38,728,404 | ||||||
Pure Storage, Inc., Class A(3) | 300,000 | 7,160,955 | ||||||
Pure Storage, Inc., Class A(3) | 1,000,000 | 23,856,120 | ||||||
$ | 605,442,516 |
32 | See Notes to Financial Statements. |
Tax-Managed Growth Portfolio
June 30, 2018
Portfolio of Investments (Unaudited) — continued
Security | Shares | Value | ||||||
Textiles, Apparel & Luxury Goods — 1.7% | ||||||||
Hanesbrands, Inc. | 221,909 | $ | 4,886,436 | |||||
Luxottica Group SpA ADR | 20,606 | 1,323,523 | ||||||
NIKE, Inc., Class B | 3,447,406 | 274,689,310 | ||||||
VF Corp. | 68,932 | 5,619,337 | ||||||
$ | 286,518,606 | |||||||
Thrifts & Mortgage Finance — 0.0%(1) | ||||||||
Essent Group, Ltd.(2) | 48,156 | $ | 1,724,948 | |||||
$ | 1,724,948 | |||||||
Tobacco — 0.5% | ||||||||
Altria Group, Inc. | 430,129 | $ | 24,427,026 | |||||
Altria Group, Inc.(3) | 32,000 | 1,817,280 | ||||||
British American Tobacco PLC ADR | 3,399 | 171,480 | ||||||
Philip Morris International, Inc. | 636,953 | 51,427,585 | ||||||
$ | 77,843,371 | |||||||
Trading Companies & Distributors — 0.0%(1) | ||||||||
Fastenal Co. | 10,178 | $ | 489,867 | |||||
United Rentals, Inc.(2) | 2,000 | 295,240 | ||||||
W.W. Grainger, Inc. | 2,791 | 860,745 | ||||||
$ | 1,645,852 | |||||||
Wireless Telecommunication Services — 0.0%(1) | ||||||||
America Movil SAB de CV, ADR, Series L | 270,852 | $ | 4,512,394 | |||||
Sprint Corp.(2) | 1 | 5 | ||||||
Vodafone Group PLC ADR | 5 | 123 | ||||||
$ | 4,512,522 | |||||||
Total Common Stocks |
| $ | 16,902,697,174 | |||||
Rights — 0.0%(1) |
| |||||||
Security | Shares | Value | ||||||
Pharmaceuticals — 0.0%(1) | ||||||||
Sanofi, Exp. 12/31/20(2) | 6,984 | $ | 3,492 | |||||
Total Rights |
| $ | 3,492 |
Short-Term Investments — 1.4% |
| |||||||
Description | Units | Value | ||||||
Eaton Vance Cash Reserves Fund, LLC, 2.09%(4) | 237,021,233 | $ | 237,021,233 | |||||
Total Short-Term Investments |
| $ | 237,021,233 | |||||
Total Investments — 99.8% |
| $ | 17,139,721,899 | |||||
Other Assets, Less Liabilities — 0.2% |
| $ | 29,059,457 | |||||
Net Assets — 100.0% |
| $ | 17,168,781,356 |
The percentage shown for each investment category in the Portfolio of Investments is based on net assets.
(1) | Amount is less than 0.05%. |
(2) | Non-income producing security. |
(3) | Restricted security (see Note 9). |
(4) | Affiliated investment company, available to Eaton Vance portfolios and funds, which invests in high quality, U.S. dollar denominated money market instruments. The rate shown is the annualized seven-day yield as of June 30, 2018. |
Abbreviations:
ADR | – | American Depositary Receipt |
33 | See Notes to Financial Statements. |
Tax-Managed Growth Portfolio
June 30, 2018
Statement of Assets and Liabilities (Unaudited)
Assets | June 30, 2018 | |||
Unaffiliated investments, at value (identified cost, $9,083,059,186) | $ | 16,902,700,666 | ||
Affiliated investment, at value (identified cost, $237,023,028) | 237,021,233 | |||
Cash | 106,693 | |||
Dividends receivable | 9,512,623 | |||
Dividends receivable from affiliated investment | 582,767 | |||
Receivable for investments sold | 19,473,133 | |||
Tax reclaims receivable | 6,764,176 | |||
Total assets | $ | 17,176,161,291 | ||
Liabilities | ||||
Payable to affiliates: | ||||
Investment adviser fee | $ | 6,196,936 | ||
Trustees’ fees | 25,375 | |||
Accrued expenses | 1,157,624 | |||
Total liabilities | $ | 7,379,935 | ||
Commitments and contingencies (Note 8) | ||||
Net Assets applicable to investors’ interest in Portfolio | $ | 17,168,781,356 | ||
Sources of Net Assets | ||||
Investors’ capital | $ | 9,349,231,640 | ||
Net unrealized appreciation | 7,819,549,716 | |||
Total | $ | 17,168,781,356 |
34 | See Notes to Financial Statements. |
Tax-Managed Growth Portfolio
June 30, 2018
Statement of Operations (Unaudited)
Investment Income | Six Months Ended June 30, 2018 | |||
Dividends (net of foreign taxes, $1,117,366) | $ | 137,467,495 | ||
Dividends from affiliated investment | 2,237,551 | |||
Total investment income | $ | 139,705,046 | ||
Expenses | ||||
Investment adviser fee | $ | 36,289,999 | ||
Trustees’ fees and expenses | 50,750 | |||
Custodian fee | 1,218,977 | |||
Professional fees | 175,919 | |||
Miscellaneous | 214,001 | |||
Total expenses | $ | 37,949,646 | ||
Net investment income | $ | 101,755,400 | ||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) — | ||||
Investment transactions(1) | $ | 255,585,867 | ||
Investment transactions — affiliated investment | (39,950 | ) | ||
Foreign currency transactions | (15,440 | ) | ||
Net realized gain | $ | 255,530,477 | ||
Change in unrealized appreciation (depreciation) — | ||||
Investments | $ | 62,054,362 | ||
Investments — affiliated investment | 60,953 | |||
Foreign currency | (78,543 | ) | ||
Net change in unrealized appreciation (depreciation) | $ | 62,036,772 | ||
Net realized and unrealized gain | $ | 317,567,249 | ||
Net increase in net assets from operations | $ | 419,322,649 |
(1) | Includes $294,389,011 of net realized gains from redemptions in-kind. |
35 | See Notes to Financial Statements. |
Tax-Managed Growth Portfolio
June 30, 2018
Statements of Changes in Net Assets
Increase (Decrease) in Net Assets | Six Months Ended June 30, 2018 (Unaudited) | Year Ended December 31, 2017 | ||||||
From operations — | ||||||||
Net investment income | $ | 101,755,400 | $ | 186,803,347 | ||||
Net realized gain | 255,530,477 | 366,906,314 | ||||||
Net change in unrealized appreciation (depreciation) | 62,036,772 | 2,337,531,531 | ||||||
Net increase in net assets from operations | $ | 419,322,649 | $ | 2,891,241,192 | ||||
Capital transactions — | ||||||||
Contributions | $ | 1,059,287,329 | $ | 1,487,391,128 | ||||
Withdrawals | (534,518,475 | ) | (730,966,590 | ) | ||||
Net increase in net assets from capital transactions | $ | 524,768,854 | $ | 756,424,538 | ||||
Net increase in net assets | $ | 944,091,503 | $ | 3,647,665,730 | ||||
Net Assets |
| |||||||
At beginning of period | $ | 16,224,689,853 | $ | 12,577,024,123 | ||||
At end of period | $ | 17,168,781,356 | $ | 16,224,689,853 |
36 | See Notes to Financial Statements. |
Tax-Managed Growth Portfolio
June 30, 2018
Financial Highlights
Six Months Ended June 30, 2018 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
Ratios/Supplemental Data | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||
Ratios (as a percentage of average daily net assets): | ||||||||||||||||||||||||
Expenses(1) | 0.46 | %(2) | 0.46 | % | 0.47 | % | 0.47 | % | 0.47 | % | 0.48 | % | ||||||||||||
Net investment income | 1.23 | %(2) | 1.33 | % | 1.48 | % | 1.44 | % | 1.45 | % | 1.50 | % | ||||||||||||
Portfolio Turnover | 1 | %(3)(4) | 0 | %(4)(5) | 1 | %(4) | 9 | % | 8 | % | 3 | % | ||||||||||||
Total Return | 2.67 | %(3) | 22.76 | % | 9.06 | % | 2.53 | % | 12.73 | % | 32.39 | % | ||||||||||||
Net assets, end of period (000’s omitted) | $ | 17,168,781 | $ | 16,224,690 | $ | 12,577,024 | $ | 11,055,385 | $ | 10,545,696 | $ | 9,414,954 |
(1) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(2) | Annualized. |
(3) | Not annualized. |
(4) | Excludes the value of portfolio securities contributed or distributed as a result of in-kind shareholder transactions. The portfolio turnover of the Portfolio including in-kind contributions and distributions of securities was 3%, 5% and 6% for the six months ended June 30, 2018 and the years ended December 31, 2017 and 2016, respectively. |
(5) | Amount is less than 0.5%. |
37 | See Notes to Financial Statements. |
Eaton Vance
Tax-Managed Growth Portfolio
June 30, 2018
Notes to Financial Statements (Unaudited)
1 Significant Accounting Policies
Tax-Managed Growth Portfolio (the Portfolio) is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as a diversified, open-end management investment company. The Portfolio’s investment objective is to achieve long-term, after-tax returns for interestholders through investing in a diversified portfolio of equity securities. The Declaration of Trust permits the Trustees to issue interests in the Portfolio. At June 30, 2018, Eaton Vance Tax-Managed Growth Fund 1.0, Eaton Vance Tax-Managed Growth Fund 1.1, Eaton Vance Tax-Managed Growth Fund 1.2 and Eaton Vance Tax-Managed Equity Asset Allocation Fund held an interest of 5.6%, 9.4%, 4.6%, and 1.0% respectively, in the Portfolio. In addition, an unregistered fund managed by the adviser to the Portfolio held an aggregate interest of 79.4% in the Portfolio.
The following is a summary of significant accounting policies of the Portfolio. The policies are in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The Portfolio is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 “Financial Services — Investment Companies.”
A Investment Valuation — The following methodologies are used to determine the market value or fair value of investments.
Equity Securities. Equity securities listed on a U.S. securities exchange generally are valued at the last sale or closing price on the day of valuation or, if no sales took place on such date, at the mean between the closing bid and asked prices therefore on the exchange where such securities are principally traded. Equity securities listed on the NASDAQ Global or Global Select Market generally are valued at the NASDAQ official closing price. Unlisted or listed securities for which closing sales prices or closing quotations are not available are valued at the mean between the latest available bid and asked prices.
Foreign Securities and Currencies. Foreign securities and currencies are valued in U.S. dollars, based on foreign currency exchange rate quotations supplied by a third party pricing service. The pricing service uses a proprietary model to determine the exchange rate. Inputs to the model include reported trades and implied bid/ask spreads. The daily valuation of exchange-traded foreign securities generally is determined as of the close of trading on the principal exchange on which such securities trade. Events occurring after the close of trading on foreign exchanges may result in adjustments to the valuation of foreign securities to more accurately reflect their fair value as of the close of regular trading on the New York Stock Exchange. When valuing foreign equity securities that meet certain criteria, the Portfolio’s Trustees have approved the use of a fair value service that values such securities to reflect market trading that occurs after the close of the applicable foreign markets of comparable securities or other instruments that have a strong correlation to the fair-valued securities.
Affiliated Fund. The Portfolio may invest in Eaton Vance Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by Eaton Vance Management (EVM). While Cash Reserves Fund is not a registered money market mutual fund, it conducts all of its investment activities in accordance with the requirements of Rule 2a-7 under the 1940 Act. Investments in Cash Reserves Fund are valued at the closing net asset value per unit on the valuation day. Cash Reserves Fund generally values its investment securities based on available market quotations provided by a third party pricing service.
Fair Valuation. Investments for which valuations or market quotations are not readily available or are deemed unreliable are valued at fair value using methods determined in good faith by or at the direction of the Trustees of the Portfolio in a manner that fairly reflects the security’s value, or the amount that the Portfolio might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of relevant factors, which are likely to vary from one pricing context to another. These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issuer or of comparable companies or entities, quotations or relevant information obtained from broker/dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the company’s or entity’s financial condition, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.
B Investment Transactions — Investment transactions for financial statement purposes are accounted for on a trade date basis. Realized gains and losses on investments sold are determined on the basis of identified cost.
C Income — Dividend income is recorded on the ex-dividend date for dividends received in cash and/or securities. 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. Withholding taxes on foreign dividends and capital gains have been provided for in accordance with the Portfolio’s understanding of the applicable countries’ tax rules and rates. In consideration of recent decisions rendered by European courts, the Portfolio has filed additional tax reclaims for previously withheld taxes on dividends earned in certain European Union countries. These filings are subject to various administrative and judicial proceedings within these countries. Due to the uncertainty as to the ultimate resolution of these proceedings, the likelihood of receipt of these reclaims, and the potential timing of payment, no amounts are reflected in the financial statements for such reclaims. Interest income is recorded on the basis of interest accrued, adjusted for amortization of premium or accretion of discount.
D 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 ultimately responsible for the payment of any taxes on its share of taxable income. Since at least one of the Portfolio’s investors is a regulated investment company that invests all or substantially all of its 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 losses and any other items of income, gain, loss, deduction or credit.
38 |
Eaton Vance
Tax-Managed Growth Portfolio
June 30, 2018
Notes to Financial Statements (Unaudited) — continued
As of June 30, 2018, the Portfolio had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. The Portfolio files a U.S. federal income tax return annually after its fiscal year-end, which is subject to examination by the Internal Revenue Service for a period of three years from the date of filing.
E Foreign Currency Translation — Investment valuations, other assets, and liabilities initially expressed in foreign currencies are translated each business day into U.S. dollars based upon current exchange rates. Purchases and sales of foreign investment securities and income and expenses denominated in foreign currencies are translated into U.S. dollars based upon currency exchange rates in effect on the respective dates of such transactions. Recognized gains or losses on investment transactions attributable to changes in foreign currency exchange 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 results from fluctuations in foreign currency exchange rates is not separately disclosed.
F Use of Estimates — The preparation of the financial statements in conformity with U.S. GAAP 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 income and expense during the reporting period. Actual results could differ from those estimates.
G Indemnifications — Under the Portfolio’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Portfolio. Under Massachusetts law, if certain conditions prevail, interestholders in the Portfolio could be deemed to have personal liability for the obligations of the Portfolio. However, the Portfolio’s Declaration of Trust contains an express disclaimer of liability on the part of Portfolio interestholders and the By-laws provide that the Portfolio shall assume the defense on behalf of any Portfolio interestholder. Moreover, the By-laws also provide for indemnification out of Portfolio property of any interestholder held personally liable solely by reason of being or having been an interestholder for all loss or expense arising from such liability. Additionally, in the normal course of business, the Portfolio enters into agreements with service providers that may contain indemnification clauses. The Portfolio’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Portfolio that have not yet occurred.
H Interim Financial Statements — The interim financial statements relating to June 30, 2018 and for the six months then ended have not been audited by an independent registered public accounting firm, but in the opinion of the Portfolio’s management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial statements.
2 Investment Adviser Fee and Other Transactions with Affiliates
The investment adviser fee is earned by Boston Management and Research (BMR), a subsidiary of EVM, as compensation for investment advisory services rendered to the Portfolio. Under the investment advisory agreement, BMR receives a monthly advisory fee at a rate of 0.625% annually of the Portfolio’s average daily net assets up to $500 million. The advisory fee on net assets of $500 million or more is reduced as follows:
Average Daily Net Assets | Annual Fee Rate (for each level) | |||
$500 million but less than $1 billion | 0.5625 | % | ||
$1 billion but less than $1.5 billion | 0.5000 | % | ||
$1.5 billion but less than $7 billion | 0.4375 | % | ||
$7 billion but less than $10 billion | 0.4250 | % | ||
$10 billion but less than $15 billion | 0.4125 | % | ||
$15 billion but less than $20 billion | 0.4000 | % | ||
$20 billion but less than $25 billion | 0.3900 | % | ||
$25 billion and over | 0.3800 | % |
The Portfolio invests its cash in Cash Reserves Fund. EVM does not currently receive a fee for advisory services provided to Cash Reserves Fund. For the six months ended June 30, 2018, the Portfolio’s investment adviser fee amounted to $36,289,999 or 0.44% (annualized) of the Portfolio’s average daily net assets.
Officers and Trustees of the Portfolio who are members of EVM’s or BMR’s organizations receive remuneration for their services to the Portfolio out of the investment adviser fee. Trustees of the Portfolio who are not affiliated with the investment adviser may elect to defer receipt of all or a percentage of their annual fees in accordance with the terms of the Trustees Deferred Compensation Plan. For the six months ended June 30, 2018, no significant amounts have been deferred. Certain officers and Trustees of the Portfolio are officers of the above organizations.
39 |
Eaton Vance
Tax-Managed Growth Portfolio
June 30, 2018
Notes to Financial Statements (Unaudited) — continued
3 Purchases and Sales of Investments
Purchases and sales of investments, other than short-term obligations, aggregated $101,314,080 and $97,991,076, respectively, for the six months ended June 30, 2018. In addition, investors contributed securities with an aggregate market value of $1,050,714,075 and investments having an aggregate market value of $471,047,269 were distributed in payment for capital withdrawals during the six months ended June 30, 2018.
4 Federal Income Tax Basis of Investments
The cost and unrealized appreciation (depreciation) of investments of the Portfolio at June 30, 2018, as determined on a federal income tax basis, were as follows:
Aggregate cost | $ | 2,788,944,062 | ||
Gross unrealized appreciation | $ | 14,360,242,178 | ||
Gross unrealized depreciation | (9,464,341 | ) | ||
Net unrealized appreciation | $ | 14,350,777,837 |
5 Restricted Securities
At June 30, 2018, the Portfolio owned the following securities (representing 0.9% of net assets) which were restricted as to public resale and not registered under the Securities Act of 1933. The Portfolio has various registration rights (exercisable under a variety of circumstances) with respect to these securities. The value of these securities is determined based on valuations provided by brokers when available, or if not available, they are valued at fair value using methods determined in good faith by or at the direction of the Trustees.
Common Stocks | Date of Acquisition | Eligible for Resale | Shares | Cost | Value | |||||||||||||||
Aflac, Inc. | 9/21/17 | 9/21/18 | 50,000 | $ | 2,095,902 | $ | 2,151,000 | |||||||||||||
Altria Group, Inc. | 9/21/17 | 9/21/18 | 32,000 | 1,957,081 | 1,817,280 | |||||||||||||||
Arista Networks, Inc. | 12/19/17 | 12/19/18 | 127,576 | 30,000,085 | 32,849,544 | |||||||||||||||
BB&T Corp. | 9/21/17 | 9/21/18 | 22,314 | 1,000,005 | 1,125,518 | |||||||||||||||
CSX Corp. | 3/22/18 | 3/22/19 | 19,071 | 1,084,218 | 1,215,831 | |||||||||||||||
Envestnet, Inc. | 3/22/18 | 3/22/19 | 40,000 | 2,387,969 | 2,197,066 | |||||||||||||||
Fidelity National Financial, Inc | 6/21/18 | 6/21/19 | 55,779 | 2,081,820 | 2,096,308 | |||||||||||||||
Johnson & Johnson | 12/19/17 | 12/19/18 | 14,035 | 1,988,173 | 1,703,007 | |||||||||||||||
Lam Research Corp. | 3/22/18 | 3/22/19 | 10,000 | 2,240,894 | 1,727,765 | |||||||||||||||
Lennox International, Inc. | 6/21/18 | 6/21/19 | 48,340 | 9,895,444 | 9,665,575 | |||||||||||||||
MGM Resorts International | 9/21/17 | 9/21/18 | 50,000 | 1,652,346 | 1,451,500 | |||||||||||||||
Microchip Technology Inc | 12/19/17 | 12/19/18 | 5,600 | 497,734 | 509,320 | |||||||||||||||
NVIDIA Corp. | 9/21/17 | 9/21/18 | 100,000 | 18,565,416 | 23,690,000 | |||||||||||||||
O’Reilly Automotive, Inc. | 6/21/18 | 6/21/19 | 77,496 | 22,000,790 | 21,179,380 | |||||||||||||||
Pure Storage, Inc., Class A | 3/22/18 | 3/22/19 | 300,000 | 5,997,897 | 7,160,955 | |||||||||||||||
Pure Storage, Inc., Class A | 6/21/18 | 6/21/19 | 1,000,000 | 24,165,810 | 23,856,120 | |||||||||||||||
Ross Stores, Inc. | 3/22/18 | 3/22/19 | 40,000 | 3,093,768 | 3,388,559 | |||||||||||||||
Ross Stores, Inc | 6/21/18 | 6/21/19 | 88,000 | 7,614,058 | 7,450,542 | |||||||||||||||
Steel Dynamics, Inc. | 6/21/18 | 6/21/19 | 50,000 | 2,345,152 | 2,295,202 | |||||||||||||||
Workday Inc., Class A | 6/21/18 | 6/21/19 | 19,755 | 2,529,664 | 2,390,333 | |||||||||||||||
Total Restricted Securities | $ | 143,194,226 | $ | 149,920,805 |
40 |
Eaton Vance
Tax-Managed Growth Portfolio
June 30, 2018
Notes to Financial Statements (Unaudited) — continued
6 Line of Credit
The Portfolio participates with other portfolios and funds managed by EVM and its affiliates in a $625 million unsecured line of credit agreement with a group of banks, which is in effect through October 30, 2018. Borrowings are made by the Portfolio solely to facilitate the handling of unusual and/or unanticipated short-term cash requirements. Interest is charged to the Portfolio based on its borrowings at an amount above either the Eurodollar rate or Federal Funds rate. In addition, a fee computed at an annual rate of 0.15% on the daily unused portion of the line of credit is allocated among the participating portfolios and funds at the end of each quarter. Because the line of credit is not available exclusively to the Portfolio, it may be unable to borrow some or all of its requested amounts at any particular time. The Portfolio did not have any significant borrowings or allocated fees during the six months ended June 30, 2018.
7 Fair Value Measurements
Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
• | Level 1 – quoted prices in active markets for identical investments |
• | Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
• | Level 3 – significant unobservable inputs (including a fund’s own assumptions in determining the fair value of investments) |
In cases where the inputs used to measure fair value fall in different levels of the fair value hierarchy, the level disclosed is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
At June 30, 2018, the hierarchy of inputs used in valuing the Portfolio’s investments, which are carried at value, were as follows:
Asset Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stocks | ||||||||||||||||
Consumer Discretionary | $ | 2,533,169,525 | $ | 32,018,481 | $ | — | $ | 2,565,188,006 | ||||||||
Consumer Staples | 1,230,565,844 | 86,672,868 | — | 1,317,238,712 | ||||||||||||
Energy | 1,004,164,777 | — | — | 1,004,164,777 | ||||||||||||
Financials | 2,914,512,144 | 23,527,246 | — | 2,938,039,390 | ||||||||||||
Health Care | 2,145,619,053 | — | — | 2,145,619,053 | ||||||||||||
Industrials | 1,787,866,930 | 10,881,406 | — | 1,798,748,336 | ||||||||||||
Information Technology | 4,669,680,843 | 37,332,239 | — | 4,707,013,082 | ||||||||||||
Materials | 277,061,900 | 5,136,338 | — | 282,198,238 | ||||||||||||
Real Estate | 9,411,481 | — | — | 9,411,481 | ||||||||||||
Telecommunication Services | 85,649,830 | — | — | 85,649,830 | ||||||||||||
Utilities | 49,426,269 | — | — | 49,426,269 | ||||||||||||
Total Common Stocks | $ | 16,707,128,596 | $ | 195,568,578 | * | $ | — | $ | 16,902,697,174 | |||||||
Rights | $ | 3,492 | $ | — | $ | — | $ | 3,492 | ||||||||
Short-Term Investments | — | 237,021,233 | — | 237,021,233 | ||||||||||||
Total Investments | $ | 16,707,132,088 | $ | 432,589,811 | $ | — | $ | 17,139,721,899 |
* | Includes foreign equity securities whose values were adjusted to reflect market trading of comparable securities or other correlated instruments that occurred after the close of trading in their applicable foreign markets. |
At June 30, 2018, the value of investments transferred between Level 1 and Level 2 during the year ended was not significant.
8 Legal Proceedings
In November 2010, the Portfolio was named as defendant and a putative member of the proposed defendant class of shareholders in the case entitled Official Committee of Unsecured Creditors (UCC) of the Tribune Company v. FitzSimons, et al. as a result of its ownership of shares in the Tribune Company (Tribune) in 2007 when Tribune effected a leveraged buyout transaction (LBO) and was converted to a privately held company. The UCC, which
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Eaton Vance
Tax-Managed Growth Portfolio
June 30, 2018
Notes to Financial Statements (Unaudited) — continued
has been replaced by a Litigation Trustee pursuant to Tribune’s plan of reorganization, seeks to recover payments of the proceeds of the LBO. This action is now part of a multi-district litigation proceeding in the Southern District of New York. A motion to dismiss the FitzSimons case is currently pending. The value of the proceeds received by the Portfolio is approximately $48,237,000 (equal to 0.3% of net assets at June 30, 2018).
The Portfolio cannot predict the outcome of these proceedings or the effect, if any, on the Portfolio’s net asset value. The attorneys’ fees and costs related to these actions are expensed by the Portfolio as incurred.
42 |
Eaton Vance
Tax-Managed Growth Fund 1.1
June 30, 2018
Board of Trustees’ Contract Approval
Overview of the Contract Review Process
The Investment Company Act of 1940, as amended (the “1940 Act”), provides, in substance, that each investment advisory agreement between a fund and its investment adviser will continue in effect from year to year only if its continuation is approved at least annually by the fund’s board of trustees, including by a vote of a majority of the trustees who are not “interested persons” of the fund (“Independent Trustees”), cast in person at a meeting called for the purpose of considering such approval.
At a meeting of the Boards of Trustees (each a “Board”) of the registered investment companies advised by either Eaton Vance Management or its affiliate, Boston Management and Research, (the “Eaton Vance Funds”) held on April 24, 2018, the Board, including a majority of the Independent Trustees, voted to approve continuation of existing investment advisory and sub-advisory agreements for the Eaton Vance Funds for an additional one-year period. In voting its approval, the Board relied upon the affirmative recommendation of its Contract Review Committee, which is a committee comprised exclusively of Independent Trustees. Prior to making its recommendation, the Contract Review Committee reviewed information furnished by each adviser to the Eaton Vance Funds (including information specifically requested by the Board) for a series of meetings of the Contract Review Committee held between February and April 2018. The Contract Review Committee also considered information received at prior meetings of the Board and its committees, as relevant to its annual evaluation of the investment advisory and sub-advisory agreements.
The information that the Board considered included, among other things, the following (for funds that invest through one or more underlying portfolio(s), references to “each fund” in this section may include information that was considered at the portfolio-level):
Information about Fees, Performance and Expenses
• | A report from an independent data provider comparing the advisory and related fees paid by each fund with fees paid by comparable funds as identified by the independent data provider (“comparable funds”); |
• | A report from an independent data provider comparing each fund’s total expense ratio and its components to comparable funds; |
• | A report from an independent data provider comparing the investment performance of each fund (including, where relevant, yield data, Sharpe ratios and information ratios) to the investment performance of comparable funds over various time periods; |
• | Data regarding investment performance in comparison to benchmark indices, as well as customized groups of peer funds and blended indices identified by the adviser in consultation with the Board; |
• | For each fund, comparative information concerning the fees charged and the services provided by each adviser in managing other accounts (including mutual funds, other collective investment funds and institutional accounts) using investment strategies and techniques similar to those used in managing such fund; |
• | Profitability analyses for each adviser with respect to each fund; |
Information about Portfolio Management and Trading
• | Descriptions of the investment management services provided to each fund, including the fund’s investment strategies and policies; |
• | The procedures and processes used to determine the fair value of fund assets and actions taken to monitor and test the effectiveness of such procedures and processes; |
• | Information about each adviser’s policies and practices with respect to trading, including each adviser’s processes for monitoring best execution of portfolio transactions; |
• | Information about the allocation of brokerage transactions and the benefits received by each adviser as a result of brokerage allocation, including information concerning the acquisition of research through client commission arrangements and policies with respect to “soft dollars”; |
• | Data relating to portfolio turnover rates of each fund; |
Information about each Adviser
• | Reports detailing the financial results and condition of each adviser; |
• | Descriptions of the qualifications, education and experience of the individual investment professionals whose responsibilities include portfolio management and investment research for the funds, and information relating to their responsibilities with respect to managing other mutual funds and investment accounts; |
• | The Code of Ethics of each adviser and its affiliates, together with information relating to compliance with and the administration of such codes; |
• | Policies and procedures relating to proxy voting and the handling of corporate actions and class actions; |
• | Information concerning the resources devoted to compliance efforts undertaken by each adviser and its affiliates (including descriptions of various compliance programs) and their record of compliance; |
• | Information concerning the business continuity and disaster recovery plans of each adviser and its affiliates; |
• | A description of Eaton Vance Management’s procedures for overseeing third party advisers and sub-advisers, including with respect to regulatory and compliance issues, investment management and other matters; |
43 |
Eaton Vance
Tax-Managed Growth Fund 1.1
June 30, 2018
Board of Trustees’ Contract Approval — continued
Other Relevant Information
• | Information concerning the nature, cost and character of the administrative and other non-investment advisory services provided by Eaton Vance Management and its affiliates; |
• | Information concerning management of the relationship with the custodian, subcustodians and fund accountants by each adviser or the funds’ administrator; and |
• | The terms of each investment advisory agreement. |
Over the course of the twelve-month period ended April 30, 2018, with respect to one or more funds, the Board met seven times and the Contract Review Committee, the Audit Committee, the Governance Committee, the Portfolio Management Committee and the Compliance Reports and Regulatory Matters Committee, each of which is a Committee comprised solely of Independent Trustees, met seven, thirteen, six, eight and nine times, respectively. At such meetings, the Trustees participated in investment and performance reviews with the portfolio managers and other investment professionals of each investment adviser relating to each fund, and considered various investment and trading strategies used in pursuing each fund’s investment objective, such as the use of derivative instruments, as well as risk management techniques. The Board and its Committees also evaluated issues pertaining to industry and regulatory developments, compliance procedures, fund governance and other issues with respect to the funds, and received and participated in reports and presentations provided by Eaton Vance Management and other fund advisers with respect to such matters. In addition to the formal meetings of the Board and its Committees, the Independent Trustees hold regular teleconferences in between meetings to discuss, among other topics, matters relating to the continuation of investment advisory and sub-advisory agreements.
For funds that invest through one or more underlying portfolios, the Board considered similar information about the portfolio(s) when considering the approval of investment advisory agreements. In addition, in cases where the fund’s investment adviser has engaged a sub-adviser, the Board considered similar information about the sub-adviser when considering the approval of any sub-advisory agreement.
The Contract Review Committee was assisted throughout the contract review process by Goodwin Procter LLP, independent legal counsel for the Independent Trustees. The members of the Contract Review Committee relied upon the advice of such counsel and their own business judgment in determining the material factors to be considered in evaluating each investment advisory and sub-advisory agreement and the weight to be given to each such factor. The conclusions reached with respect to each investment advisory and sub-advisory agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each member of the Contract Review Committee may have placed varying emphasis on particular factors in reaching conclusions with respect to each investment advisory and sub-advisory agreement. In evaluating each investment advisory and sub-advisory agreement, including the specific fee structures and other terms of the agreements, the Contract Review Committee was informed by multiple years of analysis and discussion among the Independent Trustees and the Eaton Vance Funds’ advisers and sub-advisers.
Results of the Process
Based on its consideration of the foregoing, and such other information as it deemed relevant, including the factors and conclusions described below, the Contract Review Committee concluded that the continuation of the investment advisory agreement of Tax-Managed Growth Portfolio (the “Portfolio”), the portfolio in which Eaton Vance Tax-Managed Growth Fund 1.1 (the “Fund”) invests, with Boston Management and Research (the “Adviser”), including its fee structure, is in the interests of shareholders and, therefore, the Contract Review Committee recommended to the Board approval of the agreement. The Board accepted the recommendation of the Contract Review Committee based on the material factors considered and conclusions reached by the Contract Review Committee with respect to the agreement. Accordingly, the Board, including a majority of the Independent Trustees, voted to approve continuation of the investment advisory agreement for the Portfolio.
Nature, Extent and Quality of Services
In considering whether to approve the investment advisory agreement of the Portfolio, the Board evaluated the nature, extent and quality of services provided to the Portfolio by the Adviser.
The Board considered the Adviser’s management capabilities and investment process with respect to the types of investments held by the Portfolio, including the education, experience and number of its investment professionals and other personnel who provide portfolio management, investment research, and similar services to the Portfolio. The Board specifically noted that the Adviser has devoted extensive resources to in-house equity research and also draws upon independent research available from third-party sources. The Board considered the experience of the Adviser’s investment professionals in managing funds that seek to maximize after-tax returns. The Board also took into account the resources dedicated to portfolio management and other services, as well as the compensation methods of the Adviser and other factors, such as the reputation and resources of the Adviser to recruit and retain highly qualified research, advisory and supervisory investment professionals. In addition, the Board considered the time and attention devoted to the Eaton Vance Funds, including the Portfolio, by senior management, as well as the infrastructure, operational capabilities and support staff in place to assist in the portfolio management and operations of the Portfolio, including the provision of administrative services. The Board also considered the business-related and other risks to which the Adviser or its affiliates may be subject in managing the Portfolio.
The Board considered the compliance programs of the Adviser and relevant affiliates thereof. Among other matters, the Board considered compliance and reporting matters relating to personal trading by investment professionals, selective disclosure of portfolio holdings, late trading, frequent trading, portfolio
44 |
Eaton Vance
Tax-Managed Growth Fund 1.1
June 30, 2018
Board of Trustees’ Contract Approval — continued
valuation, business continuity and the allocation of investment opportunities. The Board also considered the responses of the Adviser and its affiliates to requests in recent years from regulatory authorities such as the Securities and Exchange Commission and the Financial Industry Regulatory Authority.
The Board considered shareholder and other administrative services provided or managed by Eaton Vance Management and its affiliates, including transfer agency and accounting services. The Board evaluated the benefits to shareholders of investing in a fund that is a part of a large fund complex offering exposure to a variety of asset classes and investment disciplines, as well as the ability, in many cases, to exchange an investment among different funds without incurring additional sales charges.
After consideration of the foregoing factors, among others, the Board concluded that the nature, extent and quality of services provided by the Adviser, taken as a whole, are appropriate and consistent with the terms of the investment advisory agreement.
Fund Performance
The Board compared the Fund’s investment performance to that of comparable funds and appropriate benchmark indices. The Board’s review included comparative performance data for the one-, three-, five- and ten-year periods ended September 30, 2017 for the Fund. In this regard, the Board noted that the performance of the Fund was higher than the median performance of the Fund’s peer group for the three-year period. The Board also noted that the performance of the Fund was lower than its benchmark index for the three-year period. The Board concluded that the performance of the Fund was satisfactory.
Management Fees and Expenses
The Board considered contractual fee rates payable by the Portfolio and by the Fund for advisory and administrative services (referred to collectively as “management fees”). As part of its review, the Board considered the Fund’s management fees and total expense ratio for the one year period ended September 30, 2017, as compared to those of comparable funds, before and after giving effect to any undertaking to waive fees or reimburse expenses. The Board also considered factors that had an impact on Fund expense ratios relative to comparable funds.
After considering the foregoing information, and in light of the nature, extent and quality of the services provided by the Adviser, the Board concluded that the management fees charged for advisory and related services are reasonable.
Profitability and Other “Fall-Out” Benefits
The Board considered the level of profits realized by the Adviser and relevant affiliates thereof in providing investment advisory and administrative services to the Fund, to the Portfolio and to all Eaton Vance Funds as a group. The Board considered the level of profits realized without regard to marketing support or other payments by the Adviser and its affiliates to third parties in respect of distribution services. The Board also considered other direct or indirect fall-out benefits received by the Adviser and its affiliates in connection with their relationships with the Fund and the Portfolio, including the benefits of research services that may be available to the Adviser as a result of securities transactions effected for the Portfolio and other investment advisory clients.
The Board concluded that, in light of the foregoing factors and the nature, extent and quality of the services rendered, the profits realized by the Adviser and its affiliates are deemed not to be excessive.
Economies of Scale
In reviewing management fees and profitability, the Board also considered the extent to which the Adviser and its affiliates, on the one hand, and the Fund and the Portfolio, on the other hand, can expect to realize benefits from economies of scale as the assets of the Fund and the Portfolio increase. The Board acknowledged the difficulty in accurately measuring the benefits resulting from economies of scale, if any, with respect to the management of any specific fund or group of funds. The Board reviewed data summarizing the increases and decreases in the assets of the Fund and of all Eaton Vance Funds as a group over various time periods, and evaluated the extent to which the total expense ratio of the Fund and the profitability of the Adviser and its affiliates may have been affected by such increases or decreases. Based upon the foregoing, the Board concluded that the Fund currently shares in any benefits from economies of scale. The Board also concluded that, assuming reasonably foreseeable increases in the assets of the Fund and the Portfolio, the structure of the advisory fee, which includes breakpoints at several asset levels, will allow the Fund and the Portfolio to continue to benefit from any economies of scale in the future.
45 |
Eaton Vance
Tax-Managed Growth Fund 1.2
June 30, 2018
Board of Trustees’ Contract Approval
Overview of the Contract Review Process
The Investment Company Act of 1940, as amended (the “1940 Act”), provides, in substance, that each investment advisory agreement between a fund and its investment adviser will continue in effect from year to year only if its continuation is approved at least annually by the fund’s board of trustees, including by a vote of a majority of the trustees who are not “interested persons” of the fund (“Independent Trustees”), cast in person at a meeting called for the purpose of considering such approval.
At a meeting of the Boards of Trustees (each a “Board”) of the registered investment companies advised by either Eaton Vance Management or its affiliate, Boston Management and Research, (the “Eaton Vance Funds”) held on April 24, 2018, the Board, including a majority of the Independent Trustees, voted to approve continuation of existing investment advisory and sub-advisory agreements for the Eaton Vance Funds for an additional one-year period. In voting its approval, the Board relied upon the affirmative recommendation of its Contract Review Committee, which is a committee comprised exclusively of Independent Trustees. Prior to making its recommendation, the Contract Review Committee reviewed information furnished by each adviser to the Eaton Vance Funds (including information specifically requested by the Board) for a series of meetings of the Contract Review Committee held between February and April 2018. The Contract Review Committee also considered information received at prior meetings of the Board and its committees, as relevant to its annual evaluation of the investment advisory and sub-advisory agreements.
The information that the Board considered included, among other things, the following (for funds that invest through one or more underlying portfolio(s), references to “each fund” in this section may include information that was considered at the portfolio-level):
Information about Fees, Performance and Expenses
• | A report from an independent data provider comparing the advisory and related fees paid by each fund with fees paid by comparable funds as identified by the independent data provider (“comparable funds”); |
• | A report from an independent data provider comparing each fund’s total expense ratio and its components to comparable funds; |
• | A report from an independent data provider comparing the investment performance of each fund (including, where relevant, yield data, Sharpe ratios and information ratios) to the investment performance of comparable funds over various time periods; |
• | Data regarding investment performance in comparison to benchmark indices, as well as customized groups of peer funds and blended indices identified by the adviser in consultation with the Board; |
• | For each fund, comparative information concerning the fees charged and the services provided by each adviser in managing other accounts (including mutual funds, other collective investment funds and institutional accounts) using investment strategies and techniques similar to those used in managing such fund; |
• | Profitability analyses for each adviser with respect to each fund; |
Information about Portfolio Management and Trading
• | Descriptions of the investment management services provided to each fund, including the fund’s investment strategies and policies; |
• | The procedures and processes used to determine the fair value of fund assets and actions taken to monitor and test the effectiveness of such procedures and processes; |
• | Information about each adviser’s policies and practices with respect to trading, including each adviser’s processes for monitoring best execution of portfolio transactions; |
• | Information about the allocation of brokerage transactions and the benefits received by each adviser as a result of brokerage allocation, including information concerning the acquisition of research through client commission arrangements and policies with respect to “soft dollars”; |
• | Data relating to portfolio turnover rates of each fund; |
Information about each Adviser
• | Reports detailing the financial results and condition of each adviser; |
• | Descriptions of the qualifications, education and experience of the individual investment professionals whose responsibilities include portfolio management and investment research for the funds, and information relating to their responsibilities with respect to managing other mutual funds and investment accounts; |
• | The Code of Ethics of each adviser and its affiliates, together with information relating to compliance with and the administration of such codes; |
• | Policies and procedures relating to proxy voting and the handling of corporate actions and class actions; |
• | Information concerning the resources devoted to compliance efforts undertaken by each adviser and its affiliates (including descriptions of various compliance programs) and their record of compliance; |
• | Information concerning the business continuity and disaster recovery plans of each adviser and its affiliates; |
• | A description of Eaton Vance Management’s procedures for overseeing third party advisers and sub-advisers, including with respect to regulatory and compliance issues, investment management and other matters; |
46 |
Eaton Vance
Tax-Managed Growth Fund 1.2
June 30, 2018
Board of Trustees’ Contract Approval — continued
Other Relevant Information
• | Information concerning the nature, cost and character of the administrative and other non-investment advisory services provided by Eaton Vance Management and its affiliates; |
• | Information concerning management of the relationship with the custodian, subcustodians and fund accountants by each adviser or the funds’ administrator; and |
• | The terms of each investment advisory agreement. |
Over the course of the twelve-month period ended April 30, 2018, with respect to one or more funds, the Board met seven times and the Contract Review Committee, the Audit Committee, the Governance Committee, the Portfolio Management Committee and the Compliance Reports and Regulatory Matters Committee, each of which is a Committee comprised solely of Independent Trustees, met seven, thirteen, six, eight and nine times, respectively. At such meetings, the Trustees participated in investment and performance reviews with the portfolio managers and other investment professionals of each investment adviser relating to each fund, and considered various investment and trading strategies used in pursuing each fund’s investment objective, such as the use of derivative instruments, as well as risk management techniques. The Board and its Committees also evaluated issues pertaining to industry and regulatory developments, compliance procedures, fund governance and other issues with respect to the funds, and received and participated in reports and presentations provided by Eaton Vance Management and other fund advisers with respect to such matters. In addition to the formal meetings of the Board and its Committees, the Independent Trustees hold regular teleconferences in between meetings to discuss, among other topics, matters relating to the continuation of investment advisory and sub-advisory agreements.
For funds that invest through one or more underlying portfolios, the Board considered similar information about the portfolio(s) when considering the approval of investment advisory agreements. In addition, in cases where the fund’s investment adviser has engaged a sub-adviser, the Board considered similar information about the sub-adviser when considering the approval of any sub-advisory agreement.
The Contract Review Committee was assisted throughout the contract review process by Goodwin Procter LLP, independent legal counsel for the Independent Trustees. The members of the Contract Review Committee relied upon the advice of such counsel and their own business judgment in determining the material factors to be considered in evaluating each investment advisory and sub-advisory agreement and the weight to be given to each such factor. The conclusions reached with respect to each investment advisory and sub-advisory agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each member of the Contract Review Committee may have placed varying emphasis on particular factors in reaching conclusions with respect to each investment advisory and sub-advisory agreement. In evaluating each investment advisory and sub-advisory agreement, including the specific fee structures and other terms of the agreements, the Contract Review Committee was informed by multiple years of analysis and discussion among the Independent Trustees and the Eaton Vance Funds’ advisers and sub-advisers.
Results of the Process
Based on its consideration of the foregoing, and such other information as it deemed relevant, including the factors and conclusions described below, the Contract Review Committee concluded that the continuation of the investment advisory agreement of Tax-Managed Growth Portfolio (the “Portfolio”), the portfolio in which Eaton Vance Tax-Managed Growth Fund 1.2 (the “Fund”) invests, with Boston Management and Research (the “Adviser”), including its fee structure, is in the interests of shareholders and, therefore, the Contract Review Committee recommended to the Board approval of the agreement. The Board accepted the recommendation of the Contract Review Committee based on the material factors considered and conclusions reached by the Contract Review Committee with respect to the agreement. Accordingly, the Board, including a majority of the Independent Trustees, voted to approve continuation of the investment advisory agreement for the Portfolio.
Nature, Extent and Quality of Services
In considering whether to approve the investment advisory agreement of the Portfolio, the Board evaluated the nature, extent and quality of services provided to the Portfolio by the Adviser.
The Board considered the Adviser’s management capabilities and investment process with respect to the types of investments held by the Portfolio, including the education, experience and number of its investment professionals and other personnel who provide portfolio management, investment research, and similar services to the Portfolio. The Board specifically noted that the Adviser has devoted extensive resources to in-house equity research and also draws upon independent research available from third-party sources. The Board considered the experience of the Adviser’s investment professionals in managing funds that seek to maximize after-tax returns. The Board also took into account the resources dedicated to portfolio management and other services, as well as the compensation methods of the Adviser and other factors, such as the reputation and resources of the Adviser to recruit and retain highly qualified research, advisory and supervisory investment professionals. In addition, the Board considered the time and attention devoted to the Eaton Vance Funds, including the Portfolio, by senior management, as well as the infrastructure, operational capabilities and support staff in place to assist in the portfolio management and operations of the Portfolio, including the provision of administrative services. The Board also considered the business-related and other risks to which the Adviser or its affiliates may be subject in managing the Portfolio.
The Board considered the compliance programs of the Adviser and relevant affiliates thereof. Among other matters, the Board considered compliance and reporting matters relating to personal trading by investment professionals, selective disclosure of portfolio holdings, late trading, frequent trading, portfolio
47 |
Eaton Vance
Tax-Managed Growth Fund 1.2
June 30, 2018
Board of Trustees’ Contract Approval — continued
valuation, business continuity and the allocation of investment opportunities. The Board also considered the responses of the Adviser and its affiliates to requests in recent years from regulatory authorities such as the Securities and Exchange Commission and the Financial Industry Regulatory Authority.
The Board considered shareholder and other administrative services provided or managed by Eaton Vance Management and its affiliates, including transfer agency and accounting services. The Board evaluated the benefits to shareholders of investing in a fund that is a part of a large fund complex offering exposure to a variety of asset classes and investment disciplines, as well as the ability, in many cases, to exchange an investment among different funds without incurring additional sales charges.
After consideration of the foregoing factors, among others, the Board concluded that the nature, extent and quality of services provided by the Adviser, taken as a whole, are appropriate and consistent with the terms of the investment advisory agreement.
Fund Performance
The Board compared the Fund’s investment performance to that of comparable funds and appropriate benchmark indices. The Board’s review included comparative performance data for the one-, three-, five- and ten-year periods ended September 30, 2017 for the Fund. In this regard, the Board noted that the performance of the Fund was higher than the median performance of the Fund’s peer group for the three-year period. The Board also noted that the performance of the Fund was lower than its benchmark index for the three-year period. The Board concluded that the performance of the Fund was satisfactory.
Management Fees and Expenses
The Board considered contractual fee rates payable by the Portfolio and by the Fund for advisory and administrative services (referred to collectively as “management fees”). As part of its review, the Board considered the Fund’s management fees and total expense ratio for the one year period ended September 30, 2017, as compared to those of comparable funds, before and after giving effect to any undertaking to waive fees or reimburse expenses. The Board also considered factors that had an impact on Fund expense ratios relative to comparable funds.
After considering the foregoing information, and in light of the nature, extent and quality of the services provided by the Adviser, the Board concluded that the management fees charged for advisory and related services are reasonable.
Profitability and Other “Fall-Out” Benefits
The Board considered the level of profits realized by the Adviser and relevant affiliates thereof in providing investment advisory and administrative services to the Fund, to the Portfolio and to all Eaton Vance Funds as a group. The Board considered the level of profits realized without regard to marketing support or other payments by the Adviser and its affiliates to third parties in respect of distribution services. The Board also considered other direct or indirect fall-out benefits received by the Adviser and its affiliates in connection with their relationships with the Fund and the Portfolio, including the benefits of research services that may be available to the Adviser as a result of securities transactions effected for the Portfolio and other investment advisory clients.
The Board concluded that, in light of the foregoing factors and the nature, extent and quality of the services rendered, the profits realized by the Adviser and its affiliates are deemed not to be excessive.
Economies of Scale
In reviewing management fees and profitability, the Board also considered the extent to which the Adviser and its affiliates, on the one hand, and the Fund and the Portfolio, on the other hand, can expect to realize benefits from economies of scale as the assets of the Fund and the Portfolio increase. The Board acknowledged the difficulty in accurately measuring the benefits resulting from economies of scale, if any, with respect to the management of any specific fund or group of funds. The Board reviewed data summarizing the increases and decreases in the assets of the Fund and of all Eaton Vance Funds as a group over various time periods, and evaluated the extent to which the total expense ratio of the Fund and the profitability of the Adviser and its affiliates may have been affected by such increases or decreases. Based upon the foregoing, the Board concluded that the Fund currently shares in any benefits from economies of scale. The Board also concluded that, assuming reasonably foreseeable increases in the assets of the Fund and the Portfolio, the structure of the advisory fee, which includes breakpoints at several asset levels, will allow the Fund and the Portfolio to continue to benefit from any economies of scale in the future.
48 |
Eaton Vance
Tax-Managed Growth Fund 1.1
June 30, 2018
Officers and Trustees
Officers of Eaton Vance Tax-Managed Growth Fund 1.1
Payson F. Swaffield
President
Maureen A. Gemma
Vice President, Secretary and
Chief Legal Officer
James F. Kirchner
Treasurer
Richard F. Froio
Chief Compliance Officer
Officers of Tax-Managed Growth Portfolio
Edward J. Perkin
President
Maureen A. Gemma
Vice President, Secretary and
Chief Legal Officer
James F. Kirchner
Treasurer
Richard F. Froio
Chief Compliance Officer
Trustees of Eaton Vance Tax-Managed Growth Fund 1.1 and Tax-Managed Growth Portfolio
William H. Park
Chairperson
Thomas E. Faust Jr.*
Mark R. Fetting
Cynthia E. Frost
George J. Gorman
Valerie A. Mosley
Helen Frame Peters
Susan J. Sutherland
Harriett Tee Taggart
Scott E. Wennerholm
* | Interested Trustee |
49 |
Eaton Vance
Tax-Managed Growth Fund 1.2
June 30, 2018
Officers and Trustees
Officers of Eaton Vance Tax-Managed Growth Fund 1.2
Payson F. Swaffield
President
Maureen A. Gemma
Vice President, Secretary and
Chief Legal Officer
James F. Kirchner
Treasurer
Richard F. Froio
Chief Compliance Officer
Officers of Tax-Managed Growth Portfolio
Edward J. Perkin
President
Maureen A. Gemma
Vice President, Secretary and
Chief Legal Officer
James F. Kirchner
Treasurer
Richard F. Froio
Chief Compliance Officer
Trustees of Eaton Vance Tax-Managed Growth Fund 1.2 and Tax-Managed Growth Portfolio
William H. Park
Chairperson
Thomas E. Faust Jr.*
Mark R. Fetting
Cynthia E. Frost
George J. Gorman
Valerie A. Mosley
Helen Frame Peters
Susan J. Sutherland
Harriett Tee Taggart
Scott E. Wennerholm
* | Interested Trustee |
50 |
Eaton Vance Funds
IMPORTANT NOTICES
Privacy. The Eaton Vance organization is committed to ensuring your financial privacy. Each of the financial institutions identified below has in effect the following policy (“Privacy Policy”) with respect to nonpublic personal information about its customers:
• | Only such information received from you, through application forms or otherwise, and information about your Eaton Vance fund transactions will be collected. This may include information such as name, address, social security number, tax status, account balances and transactions. |
• | None of such information about you (or former customers) will be disclosed to anyone, except as permitted by law (which includes disclosure to employees necessary to service your account). In the normal course of servicing a customer’s account, Eaton Vance may share information with unaffiliated third parties that perform various required services such as transfer agents, custodians and broker-dealers. |
• | Policies and procedures (including physical, electronic and procedural safeguards) are in place that are designed to protect the confidentiality of such information. |
• | We reserve the right to change our Privacy Policy at any time upon proper notification to you. Customers may want to review our Privacy Policy periodically for changes by accessing the link on our homepage: www.eatonvance.com. |
Our pledge of privacy applies to the following entities within the Eaton Vance organization: the Eaton Vance Family of Funds, Eaton Vance Management, Eaton Vance Investment Counsel, Eaton Vance Distributors, Inc., Eaton Vance Trust Company, Eaton Vance Management (International) Limited, Eaton Vance Advisers International Ltd., Eaton Vance Management’s Real Estate Investment Group and Boston Management and Research. In addition, our Privacy Policy applies only to those Eaton Vance customers who are individuals and who have a direct relationship with us. If a customer’s account (i.e., fund shares) is held in the name of a third-party financial advisor/broker-dealer, it is likely that only such advisor’s privacy policies apply to the customer. This notice supersedes all previously issued privacy disclosures. For more information about Eaton Vance’s Privacy Policy, please call 1-800-262-1122.
Delivery of Shareholder Documents. The Securities and Exchange Commission (SEC) permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called “householding” and it helps eliminate duplicate mailings to shareholders. Eaton Vance, or your financial advisor, may household the mailing of your documents indefinitely unless you instruct Eaton Vance, or your financial advisor, otherwise. If you would prefer that your Eaton Vance documents not be householded, please contact Eaton Vance at 1-800-262-1122, or contact your financial advisor. Your instructions that householding not apply to delivery of your Eaton Vance documents will typically be effective within 30 days of receipt by Eaton Vance or your financial advisor.
Portfolio Holdings. Each Eaton Vance Fund and its underlying Portfolio(s) (if applicable) will file a schedule of portfolio holdings on Form N-Q with the SEC for the first and third quarters of each fiscal year. The Form N-Q will be available on the Eaton Vance website at www.eatonvance.com, by calling Eaton Vance at 1-800-262-1122 or in the EDGAR database on the SEC’s website at www.sec.gov. Form N-Q may also be reviewed and copied at the SEC’s public reference room in Washington, D.C. (call 1-800-732-0330 for information on the operation of the public reference room).
Proxy Voting. From time to time, funds are required to vote proxies related to the securities held by the funds. The Eaton Vance Funds or their underlying Portfolios (if applicable) vote proxies according to a set of policies and procedures approved by the Funds’ and Portfolios’ Boards. You may obtain a description of these policies and procedures and information on how the Funds or Portfolios voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge, upon request, by calling 1-800-262-1122 and by accessing the SEC’s website at www.sec.gov.
51 |
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Investment Adviser of Tax-Managed Growth Portfolio
Boston Management and Research
Two International Place
Boston, MA 02110
Administrator of Eaton Vance Tax-Managed Growth Funds 1.1 & 1.2
Eaton Vance Management
Two International Place
Boston, MA 02110
Principal Underwriter*
Eaton Vance Distributors, Inc.
Two International Place
Boston, MA 02110
(617) 482-8260
Custodian
State Street Bank and Trust Company
State Street Financial Center, One Lincoln Street
Boston, MA 02111
Transfer Agent
BNY Mellon Investment Servicing (US) Inc.
Attn: Eaton Vance Funds
P.O. Box 9653
Providence, RI 02940-9653
(800) 262-1122
Fund Offices
Two International Place
Boston, MA 02110
* | FINRA BrokerCheck. Investors may check the background of their Investment Professional by contacting the Financial Industry Regulatory Authority (FINRA). FINRA BrokerCheck is a free tool to help investors check the professional background of current and former FINRA-registered securities firms and brokers. FINRA BrokerCheck is available by calling 1-800-289-9999 and at www.FINRA.org. The FINRA BrokerCheck brochure describing this program is available to investors at www.FINRA.org. |
7774 6.30.18
Item 2. Code of Ethics
Not required in this filing.
Item 3. Audit Committee Financial Expert
Not required in this filing.
Item 4. Principal Accountant Fees and Services
Not required in this filing.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Schedule of Investments
Please see schedule of investments contained in the Report to Stockholders included under Item 1 of this Form N-CSR.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders
No material changes.
Item 11. Controls and Procedures
(a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.
(b) There have been no changes in the registrant’s internal controls over financial reporting during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not applicable.
Item 13. Exhibits
(a)(1) | Registrant’s Code of Ethics – Not applicable (please see Item 2). | |
(a)(2)(i) | Treasurer’s Section 302 certification. | |
(a)(2)(ii) | President’s Section 302 certification. | |
(b) | Combined Section 906 certification. |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Tax-Managed Growth Portfolio
By: | /s/ Edward J. Perkin | |
Edward J. Perkin | ||
President |
Date: August 21, 2018
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ James F. Kirchner | |
James F. Kirchner | ||
Treasurer |
Date: August 21, 2018
By: | /s/ Edward J. Perkin | |
Edward J. Perkin | ||
President |
Date: August 21, 2018