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 7303 | |||||||
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Global Growth Portfolio | ||||||||
(Exact name of registrant as specified in charter) | ||||||||
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The Eaton Vance Building, 255 State Street, Boston, Massachusetts |
| 02109 | ||||||
(Address of principal executive offices) |
| (Zip code) | ||||||
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Alan R. Dynner | ||||||||
(Name and address of agent for service) | ||||||||
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Registrant’s telephone number, including area code: | (617) 482-8260 |
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Date of fiscal year end: | August 31 |
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Date of reporting period: | February 28, 2005 |
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Item 1. Reports to Stockholders
Global Growth Portfolio as of February 28, 2005
PORTFOLIO OF INVESTMENTS (Unaudited)
| Common Stocks - 98.4% | |||||||||||
| Security | Shares | Value | |||||||||
| Advertising - 4.6% | |||||||||||
| Greenfield Online, Inc.(1) | 15,955 | $ | 268,682 | ||||||||
| Havas Advertising | 332,000 | 1,887,629 | |||||||||
| WPP Group PLC | 191,400 | 2,202,651 | |||||||||
| $ | 4,358,962 | ||||||||||
| Aerospace and Defense - 3.0% | |||||||||||
| Precision Castparts Corp. | 11,000 | $ | 827,860 | ||||||||
| Thales SA | 45,000 | 2,039,711 | |||||||||
| $ | 2,867,571 | ||||||||||
| Automobiles - 1.9% | |||||||||||
| Toyota Motor Corp. | 45,900 | $ | 1,786,087 | ||||||||
| $ | 1,786,087 | ||||||||||
| Broadcasting - 2.5% | |||||||||||
| Central European Media Enterprises, Ltd.(1) | 14,000 | $ | 637,420 | ||||||||
| Television Broadcasts, Ltd. | 396,000 | 1,776,366 | |||||||||
| $ | 2,413,786 | ||||||||||
| Business Services - 5.1% | |||||||||||
| CheckFree Corp.(1) | 18,400 | $ | 709,136 | ||||||||
| Cintas Corp. | 6,000 | 262,680 | |||||||||
| HouseValues, Inc.(1) | 26,115 | 312,335 | |||||||||
| PMI Group, Inc., (The) | 13,000 | 523,250 | |||||||||
| Singapore Post, Ltd. | 3,540,000 | 1,948,927 | |||||||||
| Sotheby's Holdings, Inc., Class A(1) | 57,000 | 1,015,740 | |||||||||
| ZipRealty, Inc.(1) | 3,800 | 58,786 | |||||||||
| $ | 4,830,854 | ||||||||||
| Chemicals - 3.9% | |||||||||||
| BASF AG | 29,800 | $ | 2,241,097 | ||||||||
| Kingboard Chemical Holdings, Ltd. | 492,000 | 1,474,629 | |||||||||
| $ | 3,715,726 | ||||||||||
| Commercial Banks - 3.2% | |||||||||||
| ABN AMRO Holdings NV | 76,691 | $ | 2,114,256 | ||||||||
| Banco Latinoamericano de Exportaciones S.A. | 22,000 | 485,980 | |||||||||
| Commerce Bancorp, Inc. | 7,500 | 459,600 | |||||||||
| $ | 3,059,836 | ||||||||||
| Security | Shares | Value | |||||||||
| Commercial Services - 0.7% | |||||||||||
| Coinstar, Inc.(1) | 29,000 | $ | 678,890 | ||||||||
| $ | 678,890 | ||||||||||
| Computer Services - 0.2% | |||||||||||
| Ness Technologies, Inc.(1) | 15,903 | $ | 208,965 | ||||||||
| $ | 208,965 | ||||||||||
| Computers and Business Equipment - 4.1% | |||||||||||
| Apple Computer, Inc.(1) | 10,000 | $ | 448,600 | ||||||||
| Research in Motion, Ltd.(1) | 28,500 | 1,884,135 | |||||||||
| Sindo Ricoh Co. | 25,400 | 1,586,193 | |||||||||
| $ | 3,918,928 | ||||||||||
| Consumer Products - 0.3% | |||||||||||
| Nu Skin Enterprises, Inc., Class A | 11,000 | $ | 245,630 | ||||||||
| $ | 245,630 | ||||||||||
| Diversified Telecommunication Services - 8.6% | |||||||||||
| Citizens Communications Co. | 28,000 | $ | 373,520 | ||||||||
| KT Corp. ADR | 82,907 | 1,924,271 | |||||||||
| NII Holdings, Inc., Class B(1) | 60,000 | 3,433,200 | |||||||||
| NTL, Inc.(1) | 5,500 | 356,895 | |||||||||
| Swisscom AG | 5,150 | 2,028,042 | |||||||||
| $ | 8,115,928 | ||||||||||
| Education - 1.3% | |||||||||||
| EVCI Career Colleges Holding Corp.(1) | 43,800 | $ | 348,210 | ||||||||
| ITT Educational Services, Inc.(1) | 6,000 | 292,140 | |||||||||
| Laureate Education, Inc.(1) | 13,500 | 585,765 | |||||||||
| $ | 1,226,115 | ||||||||||
| Electrical Equipment - 1.9% | |||||||||||
| Fujikura, Ltd. | 391,000 | $ | 1,831,216 | ||||||||
| $ | 1,831,216 | ||||||||||
| Energy Services - 0.2% | |||||||||||
| Ormat Technologies, Inc.(1) | 13,700 | $ | 212,624 | ||||||||
| $ | 212,624 | ||||||||||
See notes to financial statements
14
Global Growth Portfolio as of February 28, 2005
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
| Security | Shares | Value | |||||||||
| Entertainment - 1.5% | |||||||||||
| Sportingbet PLC(1) | 230,000 | $ | 1,428,771 | ||||||||
| $ | 1,428,771 | ||||||||||
| Financial Services - 4.2% | |||||||||||
| Doral Financial Corp. | 11,000 | $ | 436,260 | ||||||||
| E*Trade Financial Corp.(1) | 72,000 | 955,440 | |||||||||
| MarketAxess Holdings, Inc.(1) | 4,900 | 58,065 | |||||||||
| NETeller PLC(1) | 26,000 | 308,921 | |||||||||
| Nomura Securities Co., Ltd. | 148,500 | 2,059,353 | |||||||||
| OptionsXpress Holdings, Inc.(1) | 3,000 | 51,750 | |||||||||
| Student Loan Corp., (The) | 400 | 78,920 | |||||||||
| $ | 3,948,709 | ||||||||||
| Gaming Equipment - 1.5% | |||||||||||
| WMS Industries, Inc.(1) | 48,100 | $ | 1,442,519 | ||||||||
| $ | 1,442,519 | ||||||||||
| Generic Drugs - 1.0% | |||||||||||
| Taro Pharmaceutical Industries, Ltd.(1) | 32,000 | $ | 903,360 | ||||||||
| $ | 903,360 | ||||||||||
| Hardware-Networking - 2.0% | |||||||||||
| Atheros Communications, Inc.(1) | 117,000 | $ | 1,606,410 | ||||||||
| RADWARE, Ltd.(1) | 12,500 | 323,500 | |||||||||
| $ | 1,929,910 | ||||||||||
| Insurance - 3.5% | |||||||||||
| Montpelier Re Holdings, Ltd. | 24,000 | $ | 972,000 | ||||||||
| Prudential PLC | 261,500 | 2,386,275 | |||||||||
| $ | 3,358,275 | ||||||||||
| Internet Services - 1.7% | |||||||||||
| Ariba, Inc.(1) | 18,689 | $ | 170,257 | ||||||||
| Ask Jeeves, Inc.(1) | 18,763 | 428,922 | |||||||||
| Google, Inc., Class A(1) | 2,200 | 413,578 | |||||||||
| PlanetOut, Inc.(1) | 55,300 | 544,705 | |||||||||
| Shopping.com, Ltd.(1) | 1,700 | 27,846 | |||||||||
| $ | 1,585,308 | ||||||||||
| Security | Shares | Value | |||||||||
| IT Consulting & Services - 0.2% | |||||||||||
| Kanbay International, Inc.(1) | 6,520 | $ | 148,721 | ||||||||
| $ | 148,721 | ||||||||||
| Machinery - 1.9% | |||||||||||
| MODEC, Inc. | 85,000 | $ | 1,833,021 | ||||||||
| $ | 1,833,021 | ||||||||||
| Medical Products - 1.6% | |||||||||||
| Align Technology, Inc.(1) | 116,000 | $ | 878,120 | ||||||||
| Flamel Technologies SA ADR(1) | 26,000 | 415,480 | |||||||||
| I-Flow Corp.(1) | 11,227 | 191,645 | |||||||||
| $ | 1,485,245 | ||||||||||
| Metal Processors & Fabricator - 0.5% | |||||||||||
| GrafTech International, Ltd.(1) | 50,000 | $ | 462,000 | ||||||||
| $ | 462,000 | ||||||||||
| Metals-Industrial - 2.9% | |||||||||||
| Cia Vale do Rio Doce ADR | 46,000 | $ | 1,610,000 | ||||||||
| United States Steel Corp. | 18,500 | 1,153,660 | |||||||||
| $ | 2,763,660 | ||||||||||
| Mining - 1.3% | |||||||||||
| Bema Gold Corp.(1) | 180,000 | $ | 534,600 | ||||||||
| Gammon Lake Resources, Inc.(1) | 20,000 | 114,800 | |||||||||
| Ivanhoe Mines, Ltd.(1) | 74,000 | 583,860 | |||||||||
| $ | 1,233,260 | ||||||||||
| Oil Companies-Exploration & Production - 8.1% | |||||||||||
| Alinta, Ltd. | 325,000 | $ | 2,186,832 | ||||||||
| BP PLC | 189,000 | 2,045,326 | |||||||||
| Halliburton Co. | 17,000 | 747,490 | |||||||||
| Input/Output, Inc.(1) | 99,000 | 730,620 | |||||||||
| Niko Resources, Ltd. | 9,000 | 466,987 | |||||||||
| Southwestern Energy Co.(1) | 8,000 | 488,000 | |||||||||
| Valero Energy Corp. | 4,000 | 284,960 | |||||||||
| Vintage Petroleum, Inc. | 19,000 | 564,110 | |||||||||
| Williams Co., Inc. (The) | 8,000 | 150,640 | |||||||||
| $ | 7,664,965 | ||||||||||
See notes to financial statements
15
Global Growth Portfolio as of February 28, 2005
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
| Security | Shares | Value | |||||||||
| Personal Products - 0.3% | |||||||||||
| Estee Lauder Cos., Inc. (The), Class A | 6,500 | $ | 285,870 | ||||||||
| $ | 285,870 | ||||||||||
| Pharmaceuticals - 3.3% | |||||||||||
| American Pharmaceutical Partners, Inc.(1) | 17,000 | $ | 888,420 | ||||||||
| Ligand Pharmaceuticals, Inc., Class B(1) | 39,000 | 382,200 | |||||||||
| Ono Pharmaceutical Co., Ltd. | 33,800 | 1,848,964 | |||||||||
| $ | 3,119,584 | ||||||||||
| Publishing - 4.2% | |||||||||||
| Promotora de Informaciones S.A. (Prisa) | 96,000 | $ | 2,019,632 | ||||||||
| Trinity Mirror PLC | 150,000 | 1,996,167 | |||||||||
| $ | 4,015,799 | ||||||||||
| Semiconductor Equipment and Products - 6.2% | |||||||||||
| Cirrus Logic, Inc.(1) | 93,000 | $ | 435,240 | ||||||||
| Intel Corp. | 31,000 | 743,380 | |||||||||
| NVIDIA Corp.(1) | 132,000 | 3,826,680 | |||||||||
| ON Semiconductor Corp.(1) | 27,153 | 123,275 | |||||||||
| Sigmatel, Inc.(1) | 13,000 | 541,970 | |||||||||
| Standard Microsystems Corp.(1) | 14,000 | 245,420 | |||||||||
| $ | 5,915,965 | ||||||||||
| Software - 0.2% | |||||||||||
| SeeBeyond Technology Corp.(1) | 47,000 | $ | 178,600 | ||||||||
| $ | 178,600 | ||||||||||
| Specialty Retail - 6.6% | |||||||||||
| Big Lots, Inc.(1) | 20,000 | $ | 233,400 | ||||||||
| CVS Corp. | 26,000 | 1,295,580 | |||||||||
| RONA, Inc.(1) | 9,557 | 385,017 | |||||||||
| Tesco PLC | 368,000 | 2,161,927 | |||||||||
| Triarc Cos., Inc., Class B | 32,000 | 480,000 | |||||||||
| Tweeter Home Entertainment Group, Inc.(1) | 126,500 | 732,435 | |||||||||
| Walgreen Co. | 22,000 | 942,260 | |||||||||
| $ | 6,230,619 | ||||||||||
| Telecommunication Equipment - 0.3% | |||||||||||
| ECI Telecom, Ltd.(1) | 41,000 | $ | 309,140 | ||||||||
| $ | 309,140 | ||||||||||
| Security | Shares | Value | |||||||||
| Telecommunications-Services - 1.1% | |||||||||||
| America Movil S.A. de C.V. ADR | 16,000 | $ | 939,200 | ||||||||
| Arbinet-Thexchange, Inc.(1) | 4,100 | 100,040 | |||||||||
| $ | 1,039,240 | ||||||||||
| Tobacco - 0.5% | |||||||||||
| Loews Corp.-Carolina Group | 15,000 | $ | 491,100 | ||||||||
| $ | 491,100 | ||||||||||
| Transportation - 2.3% | |||||||||||
| BAA PLC | 187,800 | $ | 2,196,651 | ||||||||
| $ | 2,196,651 | ||||||||||
| Total Common Stocks (identified cost $77,827,417) | $ | 93,441,410 | |||||||||
| Warrants - 0.0% | |||||||||||
| Security | Shares | Value | |||||||||
| -0.0% | |||||||||||
| Kingboard Chemical-Strike: 20 Expires: 12/31/06(1) | 49,200 | $ | 39,427 | ||||||||
| $ | 39,427 | ||||||||||
| Total Warrants (identified cost $0) | $ | 39,427 | |||||||||
| Commercial Paper - 0.3% | |||||||||||
| Security | Principal Amount (000's omitted) | Value | |||||||||
| General Electric Capital Corp., 2.60%, 3/1/05 | $ | 285 | $ | 285,000 | |||||||
| Total Commercial Paper (at amortized cost, $285,000) | $ | 285,000 | |||||||||
See notes to financial statements
16
Global Growth Portfolio as of February 28, 2005
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
| Short-Term Investments - 1.0% | |||||||||||
| Security | Principal Amount (000's omitted) | �� | Value | ||||||||
| Investors Bank and Trust Company Time Deposit, 2.60%, 3/1/05 | $ | 938 | $ | 938,000 | |||||||
| Total Short-Term Investments (at amortized cost, $938,000) | $ | 938,000 | |||||||||
| Total Investments - 99.7% (identified cost $79,050,417) | $ | 94,703,837 | |||||||||
| Other Assets, Less Liabilities - 0.3% | $ | 296,585 | |||||||||
| Net Assets - 100.0% | $ | 95,000,422 | |||||||||
ADR - American Depository Receipt
(1) Non-income producing security.
| Country Concentration of Portfolio | |||||||||||
| Country | Percentage of Net Assets | Value | |||||||||
| United States | 38.2 | % | $ | 36,321,910 | |||||||
| United Kingdom | 15.5 | 14,726,689 | |||||||||
| Japan | 9.9 | 9,358,641 | |||||||||
| France | 4.6 | 4,342,820 | |||||||||
| Canada | 4.2 | 3,969,399 | |||||||||
| Republic of Korea | 3.7 | 3,510,464 | |||||||||
| Hong Kong | 3.5 | 3,290,422 | |||||||||
| Germany | 2.4 | 2,241,097 | |||||||||
| Australia | 2.3 | 2,186,832 | |||||||||
| Netherlands | 2.2 | 2,114,256 | |||||||||
| Switzerland | 2.1 | 2,028,042 | |||||||||
| Spain | 2.1 | 2,019,632 | |||||||||
| Singapore | 2.1 | 1,948,927 | |||||||||
| Brazil | 1.7 | 1,610,000 | |||||||||
| Bermuda | 1.7 | 1,609,420 | |||||||||
| Israel | 1.6 | 1,563,846 | |||||||||
| Mexico | 1.0 | 939,200 | |||||||||
| Panama | 0.5 | 485,980 | |||||||||
| Puerto Rico | 0.5 | 436,260 | |||||||||
See notes to financial statements
17
Global Growth Portfolio as of February 28, 2005
FINANCIAL STATEMENTS (Unaudited)
Statement of Assets and Liabilities
As of February 28, 2005
| Assets | |||||||
| Investments, at value (identified cost, $79,050,417) | $ | 94,703,837 | |||||
| Receivable for investments sold | 1,506,938 | ||||||
| Prepaid trustees fees | 904 | ||||||
| Interest and dividends receivable | 176,202 | ||||||
| Tax reclaim receivable | 29,660 | ||||||
| Total assets | $ | 96,417,541 | |||||
| Liabilities | |||||||
| Payable for investments purchased | $ | 1,338,173 | |||||
| Due to bank | 59,296 | ||||||
| Accrued expenses | 19,650 | ||||||
| Total liabilities | $ | 1,417,119 | |||||
| Net Assets applicable to investors' interest in Portfolio | $ | 95,000,422 | |||||
| Sources of Net Assets | |||||||
| Net proceeds from capital contributions and withdrawals | $ | 79,341,750 | |||||
| Net unrealized appreciation (computed on the basis of identified cost) | 15,658,672 | ||||||
| Total | $ | 95,000,422 | |||||
Statement of Operations
For the Six Months Ended
February 28, 2005
| Investment Income | |||||||
| Dividends (net of foreign taxes, $15,626) | $ | 419,973 | |||||
| Interest and other | 54,854 | ||||||
| Total investment income | $ | 474,827 | |||||
| Expenses | |||||||
| Investment adviser fee | $ | 346,480 | |||||
| Administration fee | 114,561 | ||||||
| Trustees' fees and expenses | 4,520 | ||||||
| Custodian fee | 98,706 | ||||||
| Legal and accounting services | 18,350 | ||||||
| Miscellaneous | 4,700 | ||||||
| Total expenses | $ | 587,317 | |||||
| Deduct - | |||||||
| Reduction of custodian fee | $ | 9 | |||||
| Preliminary reduction of investment adviser fee | 2,726 | ||||||
| Total expense reductions | $ | 2,735 | |||||
| Net expenses | $ | 584,582 | |||||
| Net investment loss | $ | (109,755 | ) | ||||
| Realized and Unrealized Gain (Loss) | |||||||
| Net realized gain (loss) - | |||||||
| Investment transactions (identified cost basis) | $ | 4,398,325 | |||||
| Foreign currency and forward foreign currency exchange contract transactions | (24,687 | ) | |||||
| Net realized gain | $ | 4,373,638 | |||||
| Change in unrealized appreciation (depreciation) - | |||||||
| Investments (identified cost basis) | $ | 12,393,196 | |||||
| Foreign currency and forward foreign currency exchange contracts | 14,381 | ||||||
| Net change in unrealized appreciation (depreciation) | $ | 12,407,577 | |||||
| Net realized and unrealized gain | $ | 16,781,215 | |||||
| Net increase in net assets from operations | $ | 16,671,460 | |||||
See notes to financial statements
18
Global Growth Portfolio as of February 28, 2005
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
| Increase (Decrease) in Net Assets | Six Months Ended February 28, 2005 (Unaudited) | Year Ended August 31, 2004 | |||||||||
| From operations - | |||||||||||
| Net investment income (loss) | $ | (109,755 | ) | $ | 551,425 | ||||||
| Net realized gain (loss) from investments and foreign currency transactions | 4,373,638 | 6,934,748 | |||||||||
| Net change in unrealized appreciation (depreciation) from investments and foreign currency | 12,407,577 | (1,574,233 | ) | ||||||||
| Net increase in net assets from operations | $ | 16,671,460 | $ | 5,911,940 | |||||||
| Capital transactions - | |||||||||||
| Contributions | $ | 6,076,630 | $ | 8,698,998 | |||||||
| Withdrawals | (14,364,758 | ) | (27,066,514 | ) | |||||||
| Net decrease in net assets from capital transactions | $ | (8,288,128 | ) | $ | (18,367,516 | ) | |||||
| Net increase (decrease) in net assets | $ | 8,383,332 | $ | (12,455,576 | ) | ||||||
| Net Assets | |||||||||||
| At beginning of period | $ | 86,617,090 | $ | 99,072,666 | |||||||
| At end of period | $ | 95,000,422 | $ | 86,617,090 | |||||||
See notes to financial statements
19
Global Growth Portfolio as of February 28, 2005
FINANCIAL STATEMENTS CONT'D
Supplementary Data
| Six Months Ended February 28, 2005 | Year Ended August 31, | ||||||||||||||||||||||||||
| (Unaudited) | 2004 | 2003 | 2002 | 2001 | 2000 | ||||||||||||||||||||||
| Ratios/Supplemental Data | |||||||||||||||||||||||||||
| Ratios (As a percentage of average daily net assets): | |||||||||||||||||||||||||||
| Expenses | 1.28 | %(2) | 1.25 | % | 1.24 | % | 1.15 | % | 1.11 | % | 1.13 | % | |||||||||||||||
| Expenses after custodian fee reduction | 1.28 | %(2) | 1.25 | % | 1.24 | % | 1.15 | % | 1.11 | % | 1.13 | % | |||||||||||||||
| Net investment income (loss) | (0.24 | )%(2) | 0.55 | % | 0.35 | % | 0.08 | % | 0.08 | % | (0.13 | )% | |||||||||||||||
| Portfolio Turnover | 60 | % | 164 | % | 93 | % | 107 | % | 160 | % | 173 | % | |||||||||||||||
| Total Return(1) | 20.09 | % | 5.42 | % | 15.23 | % | (17.67 | )% | - | - | |||||||||||||||||
| Net assets, end of period (000's omitted) | $ | 95,000 | $ | 86,617 | $ | 99,073 | $ | 109,557 | $ | 204,969 | $ | 334,611 | |||||||||||||||
(1) Total return is required to be disclosed for fiscal years beginning after December 15, 2000.
(2) Annualized
See notes to financial statements
20
Global Growth Portfolio as of February 28, 2005
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1 Significant Accounting Policies
Global Growth Portfolio (formerly known as Information Age Portfolio) (the Portfolio) is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company, which was organized as a trust under the laws of the State of New York on June 1, 1995. The Portfolio seeks to provide long-term capital growth by investing in a global and diversified portfolio of securities expected to grow in value. The Declaration of Trust permits the Trustees to issue interests in the Portfolio. At February 28, 2005, the Eaton Vance Global Growth Fund held an approximate 99.9% interest in the Portfolio. The following is a summary of the significant accounting policies of the Portfolio. The policies are in conformity with accounting principles generally accepted in the United States of America.
A Investment Valuations - Securities listed on a U.S. securities exchange generally are valued at the last sale 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 National Market System generally are valued at the official NASDAQ 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 or, in the case of preferred equity securities that are not listed or traded in the over-the-counter market, by an independent pricing service. The value of preferred equity securities that are valued by a pricing service on a bond basis will be adjusted by an income factor, to be determined by the investment adviser, to reflect the next anticipated regular dividend. Exchange-traded options are valued at the last sale price for the day of valuation as quoted on the principal exchange or board of trade on which the options are traded or, in the absence of sales on such date, at the mean between the latest bid and asked prices therefore. Futures positions on securities and currencies generally are valued at closing settlement prices. Short-term debt securities with a remaining maturity of 60 days or less are valued at amortized cost. If short-term debt securities were acquired with a remaining maturity of more than 60 days, their amortized cost value will be based on their v alue on the sixty-first day prior to maturity. Other fixed income and debt securities, including listed securities and securities for which price quotations are available, will normally be valued on the basis of valuations furnished by a pricing service. Foreign securities and currencies are valued in U.S. dollars, based on foreign currency exchange rate quotations supplied by an independent quotation service. 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 Trustees have appro ved 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. Investments held by the Portfolio for which valuations or market quotations are unavailable are valued at fair value using methods determined in good faith by or at the direction of the Trustees of the Portfolio considering relevant factors, data and information including the market value of freely tradable securities of the same class in the principal market on which such securities are normally traded.
B Income 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. Since 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 C ode) in order for its investors to satisfy them. The Portfolio will allocate at least annually among its investors each investor's distributive share of the Portfolio's net investment income, net realized capital gains, and any other items of income, gain, loss, deduction or credit. Withholding taxes on foreign dividends and capital gains have been provided for in accordance with the Portfolio's understanding of the applicable countries' tax rules and rates.
C Financial Futures Contracts - Upon the entering of a financial futures contract, the Portfolio is required to deposit (initial margin) either in cash or securities an amount equal to a certain percentage of the purchase price indicated in the financial futures contract. Subsequent payments are made or received by the Portfolio (margin maintenance) each day, dependent on the daily fluctuations in the value of the underlying security, and are recorded for book purposes as unrealized gains or losses by the Portfolio. The Portfolio's investment in financial futures co ntracts is designed only to hedge against anticipated future changes in interest or currency exchange rates. Should interest or currency exchange rates move unexpectedly, the Portfolio may not achieve the anticipated benefits of the financial futures contracts and may realize a loss.
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Global Growth Portfolio as of February 28, 2005
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
D Options on Financial Futures - Upon the purchase of a put option on foreign currency by the Portfolio, the premium paid is recorded as an investment, the value of which is marked-to-market daily. When the purchased option expires, the Portfolio will realize a loss in the amount of the cost of the option. When the Portfolio enters into a closing sales transaction, the Portfolio will realize a gain or loss depending upon whether the sales proceeds from the closing sales transaction are greater or less than the cost of the option. When the Portfolio exercises a put o ption, settlement is made in cash. The risk associated with purchasing options is limited to the premium originally paid.
E Foreign Currency Translation - Investment valuations, other assets, and liabilities initially expressed in foreign currencies are converted each business day into U.S. dollars based upon current exchange rates. Purchases and sales of foreign investment securities and income and expenses are converted into U.S. dollars based upon currency exchange rates prevailing on the respective dates of such transactions. Realized gains or losses on investment transactions attributable to changes in foreign currency exchange rates are recorded for financial statement purposes a s 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 Forward Foreign Currency Exchange Contracts - The Portfolio may enter into forward foreign currency exchange contracts for the purchase or sale of a specific foreign currency at a fixed price on a future date. Risks may arise upon entering these contracts from the potential inability of counterparties to meet the terms of their contracts and from movements in the value of a foreign currency relative to the U.S. dollar. The Portfolio will enter into forward contracts for hedging purposes as well as non-hedging purposes. The forward foreign currency exchange contrac ts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized until such time as the contracts have been closed or offset.
G Expense Reduction - Investors Bank & Trust Company (IBT) serves as custodian of the Portfolio. Pursuant to the custodian agreement, IBT receives a fee reduced by credits which are determined based on the average daily cash balance the Portfolio maintains with IBT. All credit balances used to reduce the Portfolio's custodian fees are reported as a reduction of total expenses on the Statement of Operations.
H Use of Estimates - The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America 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.
I 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. Interestholders in the Portfolio are jointly and severally liable for the liabilities and obligations of the Portfolio in the event that the Portfolio fails to satisfy such liabilities and obligations; provided, however, that, to the extent assets are available in the Portfolio, the Portfolio may, under certain circumstances, indemnify interestholder s from and against any claim or liability to which such holder may become subject by reason of being or having been an interestholder in the Portfolio. 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.
J Other - Investment transactions are accounted for on a trade-date basis. Dividend income is recorded on the ex-dividend date. However, if the ex-dividend date has passed, certain dividends from foreign securities are recorded as the Portfolio is informed of the ex-dividend date. Interest income is recorded on the accrual basis.
K Interim Financial Statements - The interim financial statements relating to February 28, 2005 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 wholly-owned subsidiary of Eaton Vance Management (EVM), and Lloyd George Investment Management (Bermuda) Limited, an affiliate of EVM (the Advisers), as compensation for management and investment advisory services rendered to the Portfolio. Under the advisory agreement, the Advisers receive a monthly fee, divided
22
Global Growth Portfolio as of February 28, 2005
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
equally between them, of 0.0625% (0.75% annually) of the average daily net assets of the Portfolio up to $500,000,000, and at reduced rates as daily net assets exceed that level. For the six months ended February 28, 2005, the adviser fee was 0.75% (annualized) of average net assets for such period and amounted to $346,480. In addition, an administrative fee is earned by EVM for managing and administering the business affairs of the Portfolio. Under the administration agreement, EVM earns a monthly fee in the amount of 1/48th of 1% (equal to 0.25% annually) of the average daily net assets of the Portfolio up to $500,000,000, and at reduced rates as daily net assets exceed that level. For the six months ended February 28, 2005, the administration fee was 0.25% (annualized) of average net assets for such period and amounted to $114,561. The Advisor has also agreed to reduce the investmen t advisor fee by an amount equal to that portion of commissions paid to broker dealers in execution of portfolio transactions that is consideration for third-party research services. For the six month period ended February 28, 2005 the Investment Adviser waived $2,726 of its advisory fee. Except as to the Trustees of the Portfolio who are not members of the Advisers or EVM's organization, officers and Trustees receive remuneration for their services to the Portfolio out of such investment adviser and administrative fees.
Trustees of the Portfolio that are not affiliated with the Advisers may elect to defer receipt of all or a percentage of their annual fees in accordance with the terms of the Trustees Deferred Compensation Plan. For the six months ended February 28, 2005, no significant amounts have been deferred.
Certain officers and Trustees of the Portfolio are officers of the above organizations.
3 Investment Transactions
Purchases and sales of investments, other than short-term obligations, aggregated $52,930,378 and $59,338,916, respectively, for the six months ended February 28, 2005.
4 Federal Income Tax Basis of Unrealized Appreciation (Depreciation)
The cost and unrealized appreciation (depreciation) in value of the investments owned at February 28, 2005, as computed on a federal income tax basis, are as follows:
| Aggregate cost | $ | 79,050,417 | |||||
| Gross unrealized appreciation | $ | 17,620,737 | |||||
| Gross unrealized depreciation | (1,967,317 | ) | |||||
| Net unrealized appreciation | $ | 15,653,420 | |||||
The net unrealized appreciation on foreign currency was $5,252.
5 Risks Associated with Foreign Investments
Investing in securities issued by companies whose principal business activities are outside the United States may involve significant risks not present in domestic investments. For example, there is generally less publicly available information about foreign companies, particularly those not subject to the disclosure and reporting requirements of the U.S. securities laws. Foreign issuers are generally not bound by uniform accounting, auditing, and financial reporting requirements and standards of practice comparable to those applicable to domestic issuers. Investments in foreign securities also involve the risk of possible adverse changes in investment or exchange control regulations, expropriation or confiscatory taxation, limitation on the removal of funds or other assets of the Portfolio, political or financial instability or diplomatic and other developments which could affect such investmen ts. Foreign stock markets, while growing in volume and sophistication, are generally not as developed as those in the United States, and securities of some foreign issuers (particularly those in developing countries) may be less liquid and more volatile than securities of comparable U.S. companies. In general, there is less overall governmental supervision and regulation of foreign securities markets, broker-dealers, and issuers than in the United States.
6 Financial Instruments
The Portfolio regularly trades in financial instruments with off-balance sheet risk in the normal course of its investing activities to assist in managing exposure to various market risks. These financial instruments may include written options, forward foreign currency exchange contracts and financial futures contracts and may involve, to a varying degree, elements of risk in excess of the amounts recognized for financial statement purposes. The notional or contractual amounts of these instruments represent the investment the Portfolio has in particular classes of financial instruments and does not necessarily represent the amounts potentially subject to risk. The measurement of the risks associated with these instruments is meaningful only when all related and offsetting transactions are considered.
The Portfolio did not have any open obligations under these financial instruments at February 28, 2005.
7 Line of Credit
The Portfolio participates with other portfolios and funds managed by BMR and EVM and its affiliates in a $150 million unsecured line of credit agreement with a group of banks. Borrowings will be made by the Portfolio solely to facilitate the handling of unusual and/or unanticipated short-term cash requirements. Interest is charged to each portfolio or
23
Global Growth Portfolio as of February 28, 2005
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
fund based on its borrowings at an amount above either the Eurodollar rate or federal funds rate. In addition, a fee computed at an annual rate of 0.10% on the daily unused portion of the facility is allocated among the participating funds and portfolios at the end of each quarter. The Portfolio did not have any significant borrowings or allocated fees during the six months ended February 28, 2005.
8 Overdraft Advances
Pursuant to the custodian agreement between the Portfolio and IBT, IBT may, in its discretion, advance funds to the Portfolio to make properly authorized payments. When such payments result in an overdraft by the Portfolio, the Portfolio is obligated to repay IBT at the current rate of interest charged by IBT for secured loans (currently a rate above the federal funds rate). This obligation is payable on demand to IBT. IBT has a lien on the Portfolio's assets to the extent of any overdraft. At February 28, 2005,the Portfolio's payment due to IBT pursuant to the foregoing arrangement was $59,296.
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Eaton Vance Global Growth Fund
INVESTMENT MANAGEMENT
Eaton Vance Global Growth Fund
| Officers Thomas E. Faust Jr. President Gregory L. Coleman Vice President James A. Womack Vice President James L. O'Connor Treasurer Alan R. Dynner Secretary Paul M. O'Neil Chief Compliance Officer | Trustees James B. Hawkes Samuel L. Hayes, III William H. Park Ronald A. Pearlman Norton H. Reamer Lynn A. Stout | ||||||
Global Growth Portfolio
| Officers Duncan W. Richardson President Arieh Coll Vice President Hon. Robert Lloyd George Vice President and Trustee William J. Austin, Jr. Treasurer Alan R. Dynner Secretary Paul M. O'Neil Chief Compliance Officer | Trustees Edward K.Y. Chen James B. Hawkes Samuel L. Hayes, III William H. Park Ronald A. Pearlman Norton H. Reamer Lynn A. Stout | ||||||
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Item 2. Code of Ethics
The registrant has adopted a code of ethics applicable to its Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer. The registrant undertakes to provide a copy of such code of ethics to any person upon request, without charge, by calling 1-800-262-1122.
Item 3. Audit Committee Financial Expert
The registrant’s Board has designated William H. Park, Samuel L. Hayes, III and Norton H. Reamer, each an independent trustee, as its audit committee financial experts. Mr. Park is a certified public
accountant who is the President and Chief Executive Officer of Prizm Capital Management, LLC (investment management firm). Previously, he served as Executive Vice President and Chief Financial Officer of United Asset Management Corporation (“UAM”) (a holding company owning institutional investment management firms). Mr. Hayes is the Jacob H. Schiff Professor of Investment Banking Emeritus of the Harvard University Graduate School of Business Administration. Mr. Reamer is the President, Chief Executive Officer and a Director of Asset Management Finance Corp. (a specialty finance company serving the investment management industry) and is President of Unicorn Corporation (an investment and financial advisory services company). Formerly, Mr. Reamer was Chairman of Hellman, Jordan Management Co., Inc. (an investment management company) and Advisory Director of Berkshire Capital Corporation (an investment banking firm), Chairman of the Board of UAM and Chairman, President and Director of the UAM Funds (mutual funds).
Item 4. Principal Accountant Fees and Services
Not required in this filing
Item 5. Audit Committee of Listed registrants
Not required in this filing.
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 required in this filing.
Item 8. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not required in this filing.
Item 9. Submission of Matters to a Vote of Security Holders.
Effective February 7, 2005, the Governance Committee of the Board of Trustees revised the procedures by which a Fund’s shareholders may recommend nominees to the registrant’s Board of Trustees to add the following (highlighted):
The Governance Committee shall, when identifying candidates for the position of Independent Trustee, consider any such candidate recommended by a shareholder of a Fund if such recommendation contains (i)sufficient background information concerning the candidate, including evidence the candidate is willing to serve as an Independent Trustee if selected for the position; and (ii) is received in a sufficiently timely manner (and in any event no later than the date specified for receipt of shareholder proposals in any applicable proxy statement with respect to a Fund). Shareholders shall be directed to address any such recommendations in writing to the attention of the Governance Committee, c/o the Secretary of the Fund. The Secretary shall retain copies of any shareholder recommendations which meet the foregoing requirements for a period of not more than 12 months following receipt. The Secretary shall have no obligation to acknowledge receipt of any shareholder recommendations
Item 10. 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 11. 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.
Global Growth Portfolio |
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By: | /s/Duncan W. Richardson |
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| Duncan W. Richardson | ||||
| President | ||||
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Date: | April 21, 2005 |
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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/William J. Austin, Jr. |
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| William J. Austin, Jr. | ||
| Treasurer | ||
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Date: | April 21, 2005 |
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By: | /s/Duncan W. Richardson |
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| Duncan W. Richardson | |||
| President | |||
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Date: | April 21, 2005 |
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