N-CSR 1 d651911.txt EV TAX-MANAGED EMERGING MARKETS 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: 811-02258 --------- Eaton Vance Series Trust II --------------------------- (Exact Name of registrant as Specified in Charter) The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109 ----------------------------------------------------------------------- (Address of Principal Executive Offices) Alan R. Dynner The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109 ----------------------------------------------------------------------- (Name and Address of Agent for Services) (617) 482-8260 -------------- (registrant's Telephone Number) June 30 ------- Date of Fiscal Year End June 30, 2006 ------------- Date of Reporting Period ------------------------------------------------------------------------------- ITEM 1. REPORTS TO STOCKHOLDERS. [logo] EATON VANCE(R) ------------------- MANAGED INVESTMENTS [graphic omitted] Annual Report June 30, 2006 [graphic omitted] EATON VANCE TAX-MANAGED EMERGING MARKETS FUND [graphic omitted] IMPORTANT NOTICES REGARDING PRIVACY, DELIVERY OF SHAREHOLDER DOCUMENTS, PORTFOLIO HOLDINGS, AND PROXY VOTING 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: o 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. o 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. o Policies and procedures (including physical, electronic and procedural safeguards) are in place that are designed to protect the confidentiality of such information. o We reserve the right to change our Privacy Policy at any time upon proper notification to you. Customers may want to review our 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, Boston Management and Research, and Eaton Vance Distributors, Inc. In addition, our Privacy Policy only applies 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 adviser/ broker-dealer, it is likely that only such adviser'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 (the "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 ADVISER, MAY HOUSEHOLD THE MAILING OF YOUR DOCUMENTS INDEFINITELY UNLESS YOU INSTRUCT EATON VANCE, OR YOUR FINANCIAL ADVISER, 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 adviser. Your instructions that householding not apply to delivery of your Eaton Vance documents will be effective within 30 days of receipt by Eaton Vance or your financial adviser. -------------------- PORTFOLIO HOLDINGS. Each Eaton Vance Fund and its underlying Portfolio (if applicable) will file a schedule of its portfolio holdings on Form N-Q with the Securities and Exchange Commission (the "SEC") for the first and third quarters of each fiscal year. The Form N-Q will be available on the Eaton Vance website 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 12 month period ended June 30, without charge, upon request, by calling 1-800-262-1122. This description is also available on the SEC's website at www.sec.gov. Eaton Vance Tax-Managed Emerging Markets Fund as of June 30, 2006 MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE [Photo of Cliff Quisenberry, CFA Portfolio Manager] The Fund -------------------------------------------------------------------------------- The Past Year o During the year ended June 30, 2006, the Fund's Class I shares had a total return of 35.35%. This return resulted from an increase in net asset value (NAV) per share to $31.60 on June 30, 2006, from $23.88 on June 30, 2005, and the reinvestment of $0.658 per share in dividend income distributed.(1) o For comparison, during the same period, the average return of the Fund's Lipper peer group, Lipper Emerging Markets Classification, was 34.72%, while the return for the Fund's benchmark, S&P/International Finance Corp. Investable Emerging Market Index-- an unmanaged index of common stocks traded in the emerging markets and available to foreign investors-- was 38.12%.(2) Management Discussion -------------------------------------------------------------------------------- o Emerging markets stocks continued to appreciate for much of the year before seeing a sharp correction near the end of the period. The Fund underperformed its benchmark index, the S&P/International Finance Corp. Investable Emerging Market Index.(2) However, the Fund slightly outperformed its Lipper peer group average during the year. o The Fund underperformed its benchmark primarily because it had less exposure to certain larger emerging markets countries, such as Korea, South Africa, and China, which outperformed relative to smaller emerging markets countries, such as Egypt, Hungary, Thailand, Chile and the Philippines. o The strong performance among the larger countries was partly due to record inflows into the emerging markets for most of the year. Due to their higher allocations in typical investment portfolios and their liquidity, larger markets historically have benefited from this type of inflow activity. For much of the year ended June 30, 2006, as for the past three years, stocks in emerging markets have seen impressive gains. Despite continued hikes in short-term interest rates by the U.S. Federal Reserve Board, long-term interest rates have remained at low levels worldwide-- including in the United States. Oil, gas and other major commodities have risen to record-high prices, bolstering the economies of many emerging markets countries that produced them. Moreover, several of the larger emerging markets countries, such as Russia and South Korea, have seen strong equity market returns due to solid economic growth. o In May 2006, global stock markets declined on news that the U.S. Federal Reserve was more concerned about inflation than had been anticipated. This caused concern that rates could continue increasing globally, leading to a worldwide economic slowdown. While all sectors declined, emerging markets were hit particularly hard as investors moved assets into less volatile investments. o The Fund's structural overweight to smaller emerging markets countries-- compared with its benchmark index-- means that it typically underweights the largest emerging markets. As a result, the Fund can lag its benchmark in periods when these larger markets outperform the pack, as they did for much of the past year ended June 30, 2006. The Fund is ordinarily exposed to over 30 emerging markets countries, thereby providing the benefits of diversification. In addition, although past performance is no guarantee of future results, smaller emerging markets countries historically have been less volatile during market downturns. o Management continued to employ tax-efficient techniques, such as harvesting losses to match gains and using cash flows to avoid excess turnover. In addition, management continued its disciplined strategy of rebalancing the Fund, including reducing allocations after periods of substantial appreciation, to enhance returns and manage risk. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value or offering price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance is for the stated time period only; due to market volatility, the Fund's current performance may be lower or higher than the quoted return. Fund performance during certain periods reflects the strong stock market performance and/or the strong performance of stocks held during those periods. This performance is not typical and may not be repeated. For performance as of the most recent month end, please refer to www.eatonvance.com. -------------------------------------------------------------------------------- 1 The Fund has no sales charge. This return does not include the 2% fee Class I shares are subject to when they are exchanged or redeemed. 2 It is not possible to invest directly in an Index or Lipper Classification. The Index's total return does not reflect commissions or expenses that would have been incurred if an investor individually purchased or sold the securities represented in the Index. See page 3 for more performance information, including after-tax returns. -------------------------------------------------------------------------------- Fund shares are not insured by the FDIC and are not deposits or other obligations of, or guaranteed by, any depository institution. Shares are subject to investment risks, including possible loss of principal invested. -------------------------------------------------------------------------------- The views expressed throughout this report are those of the portfolio manager and are current only through the end of the period of the report as stated on the cover. These views are subject to change at any time based upon market or other conditions, and the investment advisor disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a fund are based on many factors, may not be relied on as an indication of trading intent on behalf of any Eaton Vance fund. -------------------------------------------------------------------------------- Eaton Vance Tax-Managed Emerging Markets Fund as of June 30, 2006 FUND PERFORMANCE The line graph and table set forth below provide information about the Fund's performance. The line graph compares the performance of Class I of the Fund with that of the S&P/International Finance Corp. Investable Emerging Market Index, an unmanaged index of common stocks traded in the emerging markets and available to foreign investors. The lines on the graph represent the total returns of a hypothetical investment of $50,000 in each of Class I and the S&P/International Finance Corp. Investable Emerging Market Index. Class I total returns are presented at net asset value. The performance presented below does not reflect the deduction of taxes, if any, that a shareholder would pay on distributions or redemptions of Fund shares. REGIONAL WEIGHTINGS* By total investments Asia/Pacific 37.7% Emerging Europe 23.2% Latin America 21.2% Middle East/Africa 17.9% Comparison of Change in Value of a $50,000 Investment in Eaton Vance Tax-Managed Emerging Markets Fund vs. the S&P/International Finance Corp. Investable Emerging Market Index** June 30, 1998 - June 30, 2006 Eaton Vance S&P/International Tax-Managed Finance Corp. Emerging Markets Investable Emerging Fund Market Index 6/30/1998 $50,000 $50,000 7/31/1998 51,000 51,995 8/31/1998 38,352 37,379 9/30/1998 39,702 39,177 10/31/1998 43,851 43,675 11/30/1998 47,701 46,959 12/31/1998 47,319 46,259 1/31/1999 46,363 45,191 2/28/1999 46,818 45,995 3/31/1999 50,240 51,312 4/30/1999 58,545 58,311 5/31/1999 60,459 57,267 6/30/1999 66,699 63,510 7/31/1999 67,099 62,589 8/31/1999 67,099 63,265 9/30/1999 65,992 61,500 10/31/1999 67,147 62,545 11/30/1999 71,625 68,168 12/31/1999 81,667 77,302 1/31/2000 81,969 77,411 2/29/2000 83,847 77,333 3/31/2000 82,170 78,462 4/30/2000 74,561 70,341 5/31/2000 70,557 68,386 6/30/2000 71,721 70,321 7/31/2000 68,931 66,939 8/31/2000 69,999 67,193 9/30/2000 64,064 61,186 10/31/2000 59,701 56,230 11/30/2000 55,390 51,265 12/31/2000 57,866 52,752 1/31/2001 63,960 59,525 2/28/2001 59,169 54,941 3/31/2001 54,796 50,211 4/30/2001 57,142 53,183 5/31/2001 59,902 54,795 6/30/2001 58,806 53,803 7/31/2001 56,200 50,128 8/31/2001 56,875 49,447 9/30/2001 49,060 41,782 10/31/2001 50,831 44,373 11/30/2001 54,999 49,573 12/31/2001 57,799 53,698 1/31/2002 61,146 55,615 2/28/2002 60,192 56,688 3/31/2002 63,111 60,639 4/30/2002 64,386 61,203 5/31/2002 64,122 60,200 6/30/2002 59,665 55,853 7/31/2002 56,002 52,318 8/31/2002 56,960 52,998 9/30/2002 52,551 47,110 10/31/2002 55,257 50,134 11/30/2002 58,816 53,614 12/31/2002 58,639 51,587 1/31/2003 59,067 51,633 2/28/2003 58,264 50,105 3/31/2003 57,297 48,266 4/30/2003 62,986 53,194 5/31/2003 67,440 56,897 6/30/2003 70,232 60,418 7/31/2003 73,132 63,669 8/31/2003 77,154 68,259 9/30/2003 79,515 69,003 10/31/2003 85,845 74,607 11/30/2003 87,459 75,562 12/31/2003 95,444 81,070 1/31/2004 97,448 83,843 2/29/2004 101,814 87,884 3/31/2004 103,667 89,527 4/30/2004 97,042 82,759 5/31/2004 96,373 81,633 6/30/2004 97,269 81,633 7/31/2004 97,658 79,952 8/31/2004 101,135 83,526 9/30/2004 107,587 88,345 10/31/2004 111,008 90,898 11/30/2004 119,256 98,797 12/31/2004 125,589 103,866 1/31/2005 127,573 104,115 2/28/2005 138,136 112,850 3/31/2005 130,746 105,808 4/30/2005 127,961 103,438 5/31/2005 130,802 107,317 6/30/2005 135,628 110,934 7/31/2005 144,376 118,610 8/31/2005 147,784 119,607 9/30/2005 159,931 130,778 10/31/2005 151,759 122,264 11/30/2005 160,622 132,180 12/31/2005 168,059 140,415 1/31/2006 188,158 155,481 2/28/2006 187,744 155,590 3/31/2006 190,072 157,426 4/30/2006 202,902 170,791 5/31/2006 183,667 153,883 6/30/2006 183,612 153,237 ** Source: Thomson Financial. Class I of the Fund commenced investment operations on 6/30/98. The Fund's performance prior to February 6, 2004 is that of its predecessor, the PIMCO PPA Tax-Efficient Structured Emerging Markets Fund. It is not possible to invest directly in an Index. The Index's total return does not reflect commissions or expenses that would have been incurred if an investor individually purchased or sold the securities represented in the Index. SECTOR WEIGHTINGS* -------------------------------------------------------------------------------- By total investments Financials 22.0% Materials 12.8% Telecommunication Services 12.7% Energy 11.3% Industrials 9.7% Consumer Staples 8.4% Consumer Discretionary 7.3% Information Technology 6.1% Utilities 4.4% Health Care 2.4% Investment Funds 2.3% Other 0.5% * Weightings are shown as a percentage of total investments as of 6/30/06. Portfolio information may not be representative of the Fund's current or future investments and may change due to active management. Eaton Vance Tax-Managed Emerging Markets Fund as of June 30, 2006 FUND PERFORMANCE "Return Before Taxes" does not take into consideration shareholder taxes. It is most relevant to tax-free or tax-deferred shareholder accounts. "Return After Taxes on Distributions" reflects the impact of federal income taxes due on Fund distributions of dividends and capital gains. It is most relevant to taxpaying shareholders who continue to hold their shares. "Return After Taxes on Distribution and Sale of Fund Shares" also reflects the impact of taxes on capital gain or loss realized upon a sale of shares. It is most relevant to taxpaying shareholders who sell their shares. -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED JUNE 30, 2006) RETURNS AT NET ASSET VALUE (NAV) (CLASS I) One Year Five Years Life of Fund* Return Before Taxes 35.35% 25.57% 17.66% Return After Taxes on Distributions 34.90 24.77 16.95 Return After Taxes on Distributions and Sale of Fund Shares 23.51 22.33 15.43 RETURNS REFLECTING THE REDEMPTION FEE (CLASS I) One Year Five Years Life of Fund* Return Before Taxes 33.35% 25.41% 17.58% Return After Taxes on Distributions 32.90 24.60 16.87 Return After Taxes on Distributions and Sale of Fund Shares 22.21 22.18 15.35 -------------------------------------------------------------------------------- * Class I commenced operations on 6/30/98. The Fund's performance prior to February 6, 2004 is that of its predecessor, the PIMCO PPA Tax-Efficient Structured Emerging Markets Fund. -------------------------------------------------------------------------------- Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value or offering price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance is for the stated time period only; due to market volatility, the Fund's current performance may be lower or higher than the quoted return. Fund performance during certain periods reflects the strong stock market performance and/or the strong performance of stocks held during those periods. This performance is not typical and may not be repeated. For performance as of the most recent month end, please refer to www.eatonvance.com. -------------------------------------------------------------------------------- After-tax returns are calculated using the highest historical individual federal income tax rate and do not reflect the impact of state and local taxes. Actual after-tax returns depend on a shareholder's tax situation and may differ from those shown. After-tax returns are not relevant for shareholders who hold Fund shares in tax-deferred accounts or to shares held by non-taxable entities. Return After Taxes on Distributions for a period may be the same as Return Before Taxes for that period because no distributions were paid during that period, or because the taxable portion of distributions made during the period was insignificant. Also, Return After Taxes on Distributions and Sale of Fund Shares for a period may be greater than Return After Taxes on Distributions for the same period because of realized losses on the sale of Fund shares. The Fund's after-tax returns may also reflect foreign tax credits passed by the Fund to its shareholders. Eaton Vance Tax-Managed Emerging Markets Fund as of June 30, 2006 FUND EXPENSES EXAMPLE: As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases and redemption fees (if applicable); and (2) ongoing costs, including management fees; distribution or service fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2006 - June 30, 2006). ACTUAL EXPENSES: The first section of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES: The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratios and an assumed rate of return of 5% per year (before expenses), which is not the actual return of the Fund. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption fees (if applicable). Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. ------------------------------------------------------------------------------ EATON VANCE TAX-MANAGED EMERGING MARKETS FUND Beginning Account Ending Account Expenses Paid Value Value During Period* (1/1/06) (6/30/06) (1/1/06 - 6/30/06) ------------------------------------------------------------------------------ ACTUAL Class I $1,000.00 $1,092.30 $4.93 ------------------------------------------------------------------------------ HYPOTHETICAL (5% return per year before expenses) Class I $1,000.00 $1,020.10 $4.76 * Expenses are equal to the Fund's annualized expense ratio of 0.95% for Class I shares, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The Example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on December 31, 2005. ------------------------------------------------------------------------------ Eaton Vance Tax-Managed Emerging Markets Fund as of June 30, 2006 PORTFOLIO OF INVESTMENTS Long-Term Investments Common Stocks -- 96.3%
Security Shares Value ------------------------------------------------------------------------------------------------ Argentina -- 1.9% ------------------------------------------------------------------------------------------------ Banco Macro Bansud SA (Class "B" Shares) 130,676 $ 262,729 BBVA Banco Frances SA 67,312 161,090 BBVA Banco Frances SA (ADR) 20,300 147,581 Grupo Financiero Galicia SA (Class "B" Shares) (ADR)(a) 77,000 481,250 Grupo Financiero Galicia SA (Class "B" Shares)(a) 263,448 159,756 IRSA Inversiones y Representaciones SA(a) 119,544 133,742 IRSA Inversiones y Representaciones SA (GDR)(a) 16,700 187,541 Ledesma SAAI 259,501 167,461 Molinos Rio de la Plata SA(a) 92,923 102,453 Petrobras Energia Participaciones SA(a) 134,218 148,418 Quilmes Industrial SA (Class "B" Shares) (ADR) 14,706 722,359 Siderar SAIC 75,100 565,000 Telecom Argentina SA (Class "B" Shares)(a) 229,824 521,692 Telecom Argentina SA (Class "B" Shares) (ADR)(a) 55,500 643,800 Tenaris SA 287,701 5,784,341 Transportadora de Gas del Sur SA(a) 252,923 246,874 Transportadora de Gas del Sur SA (Class "B" Shares) (ADR)(a) 10,000 51,000 ------------------------------------------------------------------------------------------------ $10,487,087 ------------------------------------------------------------------------------------------------ Botswana -- 0.3% ------------------------------------------------------------------------------------------------ Sechaba Breweries Ltd. 284,600 $ 750,429 Sefalana Holding Co. 99,100 230,308 Standard Chartered Bank of Botswana 488,210 895,524 ------------------------------------------------------------------------------------------------ $ 1,876,261 ------------------------------------------------------------------------------------------------ Brazil -- 6.5% ------------------------------------------------------------------------------------------------ AES Tiete SA (PFD Shares)(a) 4,679,000 $ 112,421 Aracruz Celulose SA (PFD Shares) 63,000 330,974 Banco Bradesco SA 20,000 591,244 Banco Bradesco SA (PFD Shares) 49,240 1,540,279 Banco Itau Holding Financeira SA (PFD Shares) 65,200 1,900,945 Bombril SA (PFD Shares)(a) 100,000 433,406 Brasil Telecom Participacoes SA(a) 9,400,000 124,001 Brasil Telecom Participacoes SA (PFD Shares) 40,919,700 267,346 Brasil Telecom SA 20,136,246 83,364 Centrais Eletricas Brasileiras SA 22,000,000 477,764 Centrais Eletricas Brasileiras SA (Class "B" Shares) 17,191,100 356,650 Cia Brasileira de Distribuicao Grupo Pao de Acucar (PFD Shares) 7,178,255 222,155 Cia de Bebidas das Americas (PFD Shares) 6,923,755 2,879,265 Cia de Companhia de Concessoes Rodoviarias (CCR) 40,000 327,134 Cia de Saneamento Basico do Estado de Sao Paulo 2,900,000 271,341 Cia Energetica de Minas Gerais (PFD Shares) 14,700,000 623,659 Cia Siderurgica Nacional SA (CSN) 20,100 645,466 Cia Vale do Rio Doce (CVRD) 79,800 1,927,663 Cia Vale do Rio Doce (PFD Shares) 164,146 3,343,216 Contax Participacoes SA 7,000 10,512 Contax Participacoes SA (ADR) 26,608 22,750 Contax Participacoes SA (PFD Shares) 31,000 28,074 Duratex SA (PFD Shares) 28,400 255,754 EDP - Energias do Brasil SA 16,600 207,093 Eletropaulo Metropolitana SA (PFD Shares)(a) 5,767,190 239,801 Embratel Participacoes SA(a) 37,424,000 114,127 Embratel Participacoes SA (PFD Shares) 67,000,000 206,178 Empresa Brasileira de Aeronautica SA 234,351 2,143,999 Gerdau SA (PFD Shares) 5,400 81,215 Gol Linhas Aereas Inteligentes SA (PFD Shares) 14,000 498,094 Investimentos Itau SA (PFD Shares)(a) 682,925 2,751,579 Lojas Americanas SA (PFD Shares) 28,835,940 1,039,253 Lojas Renner SA(a) 5,800 312,076 Metalurgica Gerdau SA (PFD Shares) 8,900 164,491 Natura Cosmeticos SA 35,000 367,102 Net Servicos de Comunicacao SA (PFD Shares)(a) 1,641,110 887,189 Perdigao SA 24,507 234,964 Petroleo Brasileiro SA (ADR) 46,850 3,740,504 Petroleo Brasileiro SA 128,200 2,866,989 Souza Cruz SA 18,700 278,307 Tam SA (PFD Shares)(a) 12,600 344,364 Tele Norte Leste Participacoes SA 11,200 304,808 Tele Norte Leste Participacoes SA (PFD Shares) (ADR) 26,608 339,252 Telesp Telecomunicacoes de Sao Paulo SA (PFD Shares) 1,063 22,593 Tim Participacoes SA (PFD Shares) 88,232,000 244,200 Tim Participacoes SA(a) 30,104,900 112,672 Tractebel Energia SA(a) 16,300 129,541 Uniao de Bancos Brasileiros SA (PFD Shares) 49,723 655,009 Usinas Siderurgicas de Minas Gerais SA (PFD Shares)(a) 10,000 358,785 Usinas Siderurgicas de Minas Gerals SA(a) 4,600 180,663 Votorantim Celulose e Papel SA (PFD Shares)(a) 12,400 194,229 Weg SA (PFD Shares) 130,700 518,150 ------------------------------------------------------------------------------------------------ $36,312,610 ------------------------------------------------------------------------------------------------ Bulgaria -- 0.1% ------------------------------------------------------------------------------------------------ Albena Invest Holding Plc(a) 19,550 $ 172,673 Bulgartabak Holding(a) 3,450 68,793 Doverie Holding AD(a) 37,500 68,645 DZI AD 1,100 63,648 Sopharma AD 24,000 141,370 ------------------------------------------------------------------------------------------------ $ 515,129 ------------------------------------------------------------------------------------------------ Chile -- 3.2% ------------------------------------------------------------------------------------------------ Administradora de Fondos de Pensiones Provida SA (ADR) 9,800 $ 236,670 Antarchile SA 8,000 95,609 Banco de Chile (ADR) 20,800 797,664 Banco de Credito e Inversiones(a) 6,500 171,021 Banco Santander Chile SA (ADR) 47,622 1,921,071 Cap SA(a) 12,000 159,422 Cencosud SA 57,000 139,411 Cia Cervecerias Unidas SA (ADR) 37,800 835,002 Cia de Telecomunicaciones de Chile SA (ADR) 113,766 778,159 Corpbanca SA (ADR) 17,000 392,020 Distribucion y Servicio D&S SA (ADR) 48,500 779,880 Embotelladora Andina SA (Series "A") (ADR) 25,100 337,093 Embotelladora Andina SA (Series "B") (ADR) 48,900 719,808 Empresa Nacional de Electricidad SA (ADR) 61,159 1,614,597 Empresa Nacional de Telecomunicaciones SA 9,000 87,215 Empresas CMPC SA 3,400 92,922 Empresas Copec SA 31,000 283,980 Enersis SA (ADR) 137,171 1,543,174 Grupo Security SA(a) 520,000 118,510 Invercap SA(a) 25,000 92,181 Lan Airlines SA (ADR) 16,100 523,894 Madeco SA (ADR) 105,700 940,730 Masisa SA (ADR) 140,805 1,122,216 Quinenco SA (ADR) 63,100 738,270 S.A.C.I. Falabella SA 31,000 94,488 Sociedad Quimica y Minera de Chile SA (ADR) 2,095 213,690 Sociedad Quimica y Minera de Chile SA (Series "B") (ADR) 20,600 2,145,284 Vina Concha y Toro SA (ADR) 31,000 864,900 ------------------------------------------------------------------------------------------------ $17,838,881 ------------------------------------------------------------------------------------------------ China -- 6.8% ------------------------------------------------------------------------------------------------ Air China Ltd. (Class "H" Shares) 300,000 $ 125,497 Aluminum Corp. of China Ltd. (Class "H" Shares) 330,000 246,496 Beijing Enterprises Holdings Ltd. 65,000 111,716 Beijing North Star Co., Ltd. (Class "H" Shares) 1,580,000 352,594 BOE Technology Group Co., Ltd. (Class "B" Shares)(a) 1,405,300 249,686 BYD Co., Ltd. (Class "H" Shares)(a) 70,000 143,000 Chaoda Modern Agriculture Holdings Ltd.(a) 220,000 137,441 China Construction Bank (Class "H" Shares) (144A) 3,489,000 1,593,150 China COSCO Holdings Co., Ltd. (Class "H" Shares) 281,000 145,092 China Everbright Ltd.(a) 932,000 510,867 China International Marine Containers Co., Ltd. (Class "B" Shares)(a) 124,100 181,402 China Life Insurance Co., Ltd. (Class "H" Shares) 1,925,000 3,049,140 China Mengniu Dairy Co., Ltd. 143,000 179,509 China Merchants Holdings International Co., Ltd. 824,000 2,513,695 China Merchants Property Development Co., Ltd. 392,436 485,050 China Mobile Hong Kong Ltd. 710,400 4,062,170 China Netcom Group Corp. (Hong Kong) Ltd. 120,500 211,297 China Overseas Land & Investment Ltd. 708,000 433,149 China Petroleum & Chemical Corp. 5,774,000 3,310,393 China Resources Enterprise Ltd. 294,000 600,825 China Southern Airlines Co., Ltd. (Class "H" Shares)(a) 375,000 85,583 China Telecom Corp. Ltd. (Class "H" Shares) 1,950,000 636,305 China Travel International Investment Hong Kong Ltd. 800,000 192,922 China Unicom Ltd. 420,000 373,659 China Vanke Co., Ltd. (Class "B" Shares)(a) 493,924 419,711 Chongqing Changan Automobile Co., Ltd. (Class "B" Shares)(a) 502,100 258,633 CITIC International Financial Holdings Ltd. 384,000 216,320 CNOOC Ltd. 1,532,500 1,230,906 COFCO International Ltd. 460,000 262,561 Cosco Pacific Ltd. 122,000 270,169 Dazhong Transportation Group Co., Ltd. 240,788 150,493 Denway Motors Ltd. 960,000 322,191 Focus Media Holding Ltd. (ADR)(a) 2,945 191,896 Guangdong Electric Power Development Co., Ltd. (Class "B" Shares) 264,000 130,137 Guangdong Investment Ltd. 374,000 144,718 Guangdong Provincial Expressway Development Co., Ltd. (Class "B" Shares) 234,960 99,526 Hangzhou Steam Turbine Co., Ltd. (Class "B" Shares)(a) 124,400 205,491 Jiangsu Expressway Co., Ltd. (Class "H" Shares) 352,000 198,695 Kingboard Chemical Holdings Ltd. 86,500 244,287 Lenovo Group Ltd. 492,000 163,435 Lianhua Supermarket Holdings Ltd. (Class "H" Shares) 130,000 138,921 Maanshan Iron & Steel Co., Ltd. 2,729,000 906,464 Netease.com, Inc. (ADR)(a) 40,000 893,200 PetroChina Co., Ltd. 1,872,300 2,020,564 PICC Property & Casualty Co., Ltd. (Class "H" Shares) 390,000 143,442 Ping An Insurance Group Co. of China Ltd. (Class "H" Shares) 669,000 2,033,207 Qingling Motors Co., Ltd. 1,448,966 211,267 Samson Holding Ltd. 222,000 106,438 Semiconductor Manufacturing International Corp.(a) 2,825,000 395,171 Shanghai Diesel Engine Co., Ltd. 534,000 175,938 Shanghai Electric Group Co., Ltd. (Class "H" Shares) 460,000 160,549 Shanghai Industrial Holdings Ltd. 84,000 164,178 Shanghai Jinjiang International Hotels Development Co., Ltd. 574,800 441,417 Shenzhen Chiwan Wharf Holdings Ltd. (Class "B" Shares) 153,115 230,845 Sina Corp.(a) 9,000 224,820 Sinopec Yizheng Chemical Fibre Co., Ltd.(a) 3,201,000 689,607 Sinopec-China Petroleum & Chemical Corp. 1,628,000 802,621 Sinotrans Ltd. (Class "H" Shares) 300,000 94,747 Sohu.com, Inc.(a) 11,000 283,690 Tingyi (Cayman Islands) Holding Corp. 1,184,000 724,505 TPV Technology Ltd. 84,000 79,576 Travelsky Technology Ltd. 406,000 465,636 Tsingtao Brewery Co., Ltd. 1,124,000 1,260,613 Weiqiao Textile Co., Ltd. (Class "H" Shares) 82,000 105,184 Wumart Stores, Inc. (Class "H" Shares) 39,000 134,544 Yantai Changyu Pioneer Wine Co., Ltd. (Class "B" Shares) 103,948 301,659 Yanzhou Coal Mining Co., Ltd. (Class "H" Shares) 320,000 236,529 Zhejiang Expressway Co., Ltd. (Class "H" Shares) 186,000 113,192 ------------------------------------------------------------------------------------------------ $37,978,331 ------------------------------------------------------------------------------------------------ Colombia -- 0.8% ------------------------------------------------------------------------------------------------ Almacenes Exito SA(a) 13,000 $ 51,559 Bancolombia SA (PFD Shares) (ADR) 87,900 2,118,390 Cementos Argos SA 115,900 346,546 Compania de Cemento Argos SA 175,100 598,157 Interconexion Electrica SA 380,000 759,441 Inversiones Nacional de Chocolates SA 110,400 624,285 ------------------------------------------------------------------------------------------------ $ 4,498,378 ------------------------------------------------------------------------------------------------ Croatia -- 1.1% ------------------------------------------------------------------------------------------------ Adris Grupa DD (PFD Shares) 1,110 $ 685,262 Atlantska Plovidba DD(a) 950 140,717 Croatia Osiguranje DD 160 178,092 Dalekovod DD(a) 690 78,997 Ericsson Nikola Tesla 1,770 641,078 Institut Gradevinarstva Hrvatske DD(a) 110 65,515 Koncar-Elektroindustrija DD(a) 1,470 107,382 Kras DD 1,645 188,913 Petrokemija DD(a) 2,600 62,540 Pliva DD(a) 1,470 196,667 Pliva DD (GDR)(a) 93,340 2,519,725 Podravka Prehrambena Industija DD(a) 7,000 493,463 Privredna Banka Zagreb DD(a) 2,780 388,021 Riviera Holding DD(a) 3,830 278,115 Tankerska Plovidba(a) 110 58,931 ------------------------------------------------------------------------------------------------ $ 6,083,418 ------------------------------------------------------------------------------------------------ Czech Republic -- 3.4% ------------------------------------------------------------------------------------------------ Cesky Telecom AS(a) 54,900 $ 1,176,855 Cesky Telecom AS (GDR)(a) 54,303 1,165,033 CEZ AS 217,770 7,319,049 Komercni Banka AS 13,800 1,997,849 Komercni Banka AS (GDR) 27,154 1,493,470 Philip Morris CR AS 1,660 920,734 Unipetrol AS(a) 303,000 2,687,056 Zentiva NV AS 50,600 2,412,062 ------------------------------------------------------------------------------------------------ $19,172,108 ------------------------------------------------------------------------------------------------ Egypt -- 1.5% ------------------------------------------------------------------------------------------------ Alexandria Mineral Oils Co.(a) 8,500 $ 104,348 Alexandria National Iron & Steel Co. 2,000 313,516 Commercial International Bank 44,420 453,617 Eastern Tobacco 13,400 698,453 Egyptian American Bank(a) 10,600 94,857 Egyptian Financial & Industrial Co. 6,100 69,649 Egyptian Financial Group-Hermes Holding SAE(a) 137,350 601,428 Egyptian International Pharmaceutical Industrial Co. 40,120 142,424 Egyptian Media Production City(a) 48,072 60,657 El Ezz Steel Rebars SAE(a) 15,100 102,066 El Watany Bank of Egypt(a) 32,900 117,880 Medinet Nasr for Housing(a) 9,000 86,169 Misr Cement(a) 8,900 86,618 MobiNil- Egyptian Company for Mobil Services 6,978 156,414 National Societe General Bank 21,340 114,209 Olympic Group Financial Investment Co. 53,371 380,413 Orascom Construction Industries (OCI) 49,655 1,509,926 Orascom Hotel Holdings SAE(a) 11,863 35,249 Orascom Telecom Holding SAE 45,800 1,899,560 Oriental Weavers Co. 26,710 307,478 Raya Holding Co.(a) 43,400 80,692 Sidi Kerir Petrochemicals Co. 20,500 331,277 Suez Cement Co. 35,200 384,729 Torah Portland Cement Co.(a) 4,300 92,575 Vodafone Egypt Telecommunications Co. 19,600 279,236 ------------------------------------------------------------------------------------------------ $ 8,503,440 ------------------------------------------------------------------------------------------------ Estonia -- 0.3% ------------------------------------------------------------------------------------------------ AS Eesti Telekom (GDR) 42,400 $ 1,144,800 AS Harju Elekter 18,000 83,886 AS Merko Ehitus 23,000 385,656 AS Norma 25,000 152,149 AS Saku Olletehase 8,000 98,712 ------------------------------------------------------------------------------------------------ $ 1,865,203 ------------------------------------------------------------------------------------------------ Ghana -- 0.2% ------------------------------------------------------------------------------------------------ Aluworks Ghana Ltd. 210,900 $ 155,182 SSB Bank Ltd. 370,000 272,653 Standard Chartered Bank of Ghana Ltd. 10,200 144,760 Unilever Ghana Ltd. 249,000 418,624 ------------------------------------------------------------------------------------------------ $ 991,219 ------------------------------------------------------------------------------------------------ Hungary -- 3.5% ------------------------------------------------------------------------------------------------ Danubius Hotel and Spa Rt.(a) 8,190 $ 217,658 Delmagyarorszagi Aramszol Rt 2,700 188,867 EGIS Rt 3,378 415,287 Fotex Rt.(a) 478,034 1,132,895 Gedeon Richter Rt 12,352 2,267,870 Magyar Telekom Telecommunications PLC (ADR)(a) 37,300 706,462 Magyar Telekom Rt.(a) 758,100 2,874,296 MOL Magyar Olaj-es Gazipari Rt 50,305 5,166,309 OTP Bank Rt 214,220 6,061,970 Pannonplast Rt.(a) 25,800 334,405 RABA Rt.(a) 34,760 120,852 ------------------------------------------------------------------------------------------------ $19,486,871 ------------------------------------------------------------------------------------------------ India -- 1.4% ------------------------------------------------------------------------------------------------ Bajaj Auto Ltd. (GDR) 3,800 $ 222,300 Bajaj Auto Ltd. (GDR) 3,402 198,435 Dr. Reddy's Laboratories Ltd. (ADR) 13,400 371,180 Gail India Ltd. (GDR) 16,700 559,450 Grasim Industries Ltd. (GDR)(a) 13,300 545,300 HDFC Bank Ltd. (ADR) 7,700 420,035 Hindalco Industries Ltd. (GDR) (144A)(a) 140,410 533,558 ICICI Bank Ltd. (ADR) 26,300 621,995 ITC Ltd. (GDR) 64,500 248,325 ITC Ltd. (GDR)(a) 156,200 601,370 Larsen & Toubro Ltd. (GDR)(a) 12,000 573,000 Mahanagar Telephone Nigam Ltd. (ADR) 38,500 264,495 Ranbaxy Laboratories Ltd. (GDR) 20,500 162,770 Reliance Energy Ltd. (GDR) (144A) 5,900 184,499 Reliance Industries Ltd. (GDR) (144A)(a) 21,408 993,331 Satyam Computer Services Ltd. (ADR) 12,000 397,680 State Bank of India Ltd. (GDR) 11,800 471,250 Tata Motors Ltd. (ADR)(a) 19,800 341,550 Videsh Sanchar Nigam Ltd. (ADR) 11,100 194,805 Wipro Ltd. (ADR) 13,100 168,073 ------------------------------------------------------------------------------------------------ $ 8,073,401 ------------------------------------------------------------------------------------------------ Indonesia -- 3.5% ------------------------------------------------------------------------------------------------ Aneka Tambang Tbk PT 1,717,500 $ 859,490 Astra Argo Lestari Tbk PT 500,000 351,013 Astra International Tbk PT 1,601,000 1,688,608 Bakrie & Brothers Tbk PT(a) 39,364,000 640,389 Bank Central Asia Tbk PT 3,078,000 1,365,363 Bank Danamon Indonesia Tbk PT 455,000 195,736 Bank Internasional Indonesia Tbk PT 6,667,000 133,309 Bank Mandiri PT 2,168,000 403,020 Bank Pan Indonesia Tbk PT 1,950,272 81,080 Bank Rakyat Indonesia PT 2,240,000 993,087 Berlian Laju Tanker Tbk PT(a) 1,250,000 233,619 Bumi Resources Tbk PT 8,789,000 732,835 Ciputra Development Tbk PT(a) 12,232,500 580,840 Gudang Garam Tbk PT 763,500 783,715 Indah Kiat Pulp & Paper Corp. Tbk PT(a) 1,095,000 104,163 Indocement Tunggal Prakarsa Tbk PT(a) 500,000 226,957 Indofood Sukses Makmur Tbk PT 8,176,500 777,346 Indonesian Satellite Corp. Tbk PT 1,322,500 612,830 International Nickel Indonesia Tbk PT 130,000 274,602 Jakarta International Hotels & Development Tbk PT(a) 2,100,000 110,336 Kalbe Farma Tbk PT(a) 1,517,000 204,832 Kawasan Industri Jababeka Tbk PT 1,250,000 17,559 Matahari Putra Prima Tbk PT 1,600,000 129,782 Medco Energi Internasional Tbk PT 314,000 126,289 Perusahaan Gas Negara PT(a) 1,361,000 1,655,701 Perusahaan Perkebunan London Sumatra Indonesia Tbk PT(a) 454,000 170,423 Ramayana Lestari Sentosa Tbk PT(a) 4,100,000 332,522 Semen Gresik Persero Tbk PT 265,500 682,490 Telekomunikasi Indonesia Tbk PT 3,675,160 2,935,131 Tempo Scan Pacific Tbk PT(a) 200,000 143,621 Trimegah Securities Tbk PT 6,845,000 96,674 Unilever Indonesia Tbk PT 852,700 380,192 United Tractors Tbk PT 2,929,000 1,709,000 ------------------------------------------------------------------------------------------------ $19,732,554 ------------------------------------------------------------------------------------------------ Israel -- 3.2% ------------------------------------------------------------------------------------------------ Alvarion Ltd.(a) 14,178 $ 87,053 AudioCodes Ltd.(a) 10,200 111,180 Bank Hapoalim Ltd. 243,752 1,062,445 Bank Leumi Le-Israel 253,024 917,870 Bezeq Israeli Telecommunication Corp. Ltd. 922,638 1,084,244 Check Point Software Technologies Ltd.(a) 38,341 674,035 Delek Group Ltd. 570 87,448 Discount Investment Corp. 3,650 85,418 ECI Telecom Ltd.(a) 30,600 246,636 Elbit Systems Ltd. 4,000 107,318 Gazit Globe (1982) Ltd. 14,000 150,680 Gilat Satellite Networks Ltd.(a) 18,600 145,811 Given Imaging Ltd.(a) 8,000 122,480 Harel Insurance Investments Ltd. 3,000 128,854 IDB Development Corp. Ltd. 2,976 88,013 IDB Holding Corp. Ltd. 7,103 165,447 Israel Chemicals Ltd. 335,415 1,363,480 Israel Discount Bank Ltd. (Series "A")(a) 275,000 481,411 Koor Industries Ltd.(a) 3,023 159,139 Lipman Electrical Engineering(a) 4,000 110,649 M-Systems Flash Disk Pioneers Ltd.(a) 10,000 296,300 Makhteshim-Agan Industries Ltd. 200,757 1,072,544 Nice Systems Ltd.(a) 15,800 446,603 Orbotech Ltd.(a) 10,000 229,300 Ormat Industries Ltd. 13,000 123,558 Osem Investment Ltd. 5,695 48,083 Partner Communications Co., Ltd. 95,960 808,055 Property & Building Corp. Ltd.(a) 1,000 117,460 RADVision Ltd.(a) 6,800 104,181 Retalix Ltd.(a) 5,000 111,395 Syneron Medical Ltd.(a) 15,600 325,728 Taro Pharmaceuticals Industries Ltd.(a) 14,244 151,129 Teva Pharmaceutical Industries Ltd. 82,999 2,622,433 Teva Pharmaceutical Industries Ltd. (ADR) 99,600 3,146,364 The Israel Corp. Ltd. 1,850 682,119 United Mizrahi Bank Ltd.(a) 30,000 178,083 ------------------------------------------------------------------------------------------------ $17,842,946 ------------------------------------------------------------------------------------------------ Kenya -- 1.0% ------------------------------------------------------------------------------------------------ Athi River Mining Ltd. 561,200 $ 508,800 Bamburi Cement Co., Ltd. 131,541 260,051 Barclays Bank of Kenya Ltd. 102,132 373,578 East African Breweries Ltd. 533,000 1,003,242 East African Portland Cement Co., Ltd.(a) 40,900 73,105 Kenya Airways Ltd. 1,127,600 1,773,023 Kenya Commercial Bank Ltd. 241,940 540,557 Kenya Oil Co., Ltd. 78,000 133,081 Kenya Power & Lighting Ltd. 112,650 257,174 Mumias Sugar Co., Ltd.(a) 181,638 152,440 Nation Media Group Ltd. 89,673 246,564 NIC Bank Ltd. 147,120 141,442 Standard Chartered Bank Kenya Ltd. 68,420 138,439 ------------------------------------------------------------------------------------------------ $ 5,601,496 ------------------------------------------------------------------------------------------------ Latvia -- 0.1% ------------------------------------------------------------------------------------------------ Grindeks(a) 12,000 $ 136,923 Latvian Shipping Co.(a) 96,000 160,465 ------------------------------------------------------------------------------------------------ $ 297,388 ------------------------------------------------------------------------------------------------ Lithuania -- 0.2% ------------------------------------------------------------------------------------------------ Invalda PVA 35,000 $ 134,661 Klaipedos Nafta PVA 300,000 92,184 Mazeikiu Nafta 90,000 285,125 Pieno Zvaigzdes 40,000 58,754 Rokiokio Suris 3,000 55,473 Siauliu Bankas 138,750 143,293 Snaige(a) 21,000 73,990 Teo LT AB (GDR)(a) 60,000 495,498 ------------------------------------------------------------------------------------------------ $ 1,338,978 ------------------------------------------------------------------------------------------------ Malaysia -- 3.4% ------------------------------------------------------------------------------------------------ Affin Holdings Bhd 236,000 $ 112,554 AMMB Holdings Bhd 267,600 183,405 Arab-Malaysian Corp. Bhd (AMCORP)(a) 400,000 138,250 Berjaya Sports Toto Bhd 221,384 291,709 British American Tobacco Malaysia Bhd 20,700 222,520 Bursa Malaysia Bhd 81,000 126,752 Commerce Asset Holdings Bhd 345,733 558,961 Digi.com Bhd 100,000 296,639 DRB-Hicom Bhd 42,200 16,424 EON Capital Bhd 48,500 78,534 Fountain View Development Bhd(a) 86,600 6,118 Gamuda Bhd 409,400 383,034 Genting Bhd 126,200 813,624 Golden Hope Plantations Bhd 100,000 111,036 Guinness Anchor Bhd 67,000 99,374 Highlands & Lowlands Bhd 100,000 113,378 Hong Leong Bank Bhd 144,400 200,419 Hong Leong Credit Bhd 61,500 77,660 IGB Corp. Bhd 312,000 115,557 IJM Corp. Bhd 225,600 343,818 IOI Corp. Bhd 212,187 826,249 Island & Peninsular Bhd 34,996 12,572 Kian Joo Can Factory Bhd 124,000 90,393 KLCC Property Holdings Bhd 250,000 143,557 Kuala Lumpur Kepong Bhd 44,900 119,249 Lafarge Malayan Cement Bhd 1,312,200 264,261 Magnum Corp. Bhd 292,000 145,435 Malakoff Bhd 151,600 400,196 Malayan Banking Bhd 335,355 976,541 Malaysia International Shipping Corp. Bhd 289,700 607,098 Malaysian Bulk Carriers Bhd 164,000 95,512 Malaysian Oxygen Bhd 93,900 311,765 Malaysian Pacific Industries Bhd 65,500 178,259 Malaysian Plantations Bhd 134,800 73,843 Malaysian Resources Corp. Bhd(a) 560,000 117,479 Maxis Communications Bhd 338,400 787,630 MEMS Technology Bhd(a) 870,000 112,519 MMC Corp. Bhd 233,000 202,912 Nestle Malaysia Bhd 6,000 36,903 O.Y.L Industries Bhd 608,800 920,481 Petra Perdana Bhd(a) 128,000 112,891 Petronas Dagangan Bhd 340,500 378,490 Petronas Gas Bhd 71,000 166,239 PLUS (Projek Lebuhraya Utara Selatan) Expressways Bhd 139,700 101,506 Pos Malaysia & Services Holdings Bhd(a) 110,000 134,113 PPB Group Bhd 252,000 274,323 PPB Oil Palms Bhd 90,000 159,152 Proton Holdings Bhd 46,300 65,522 Public Bank Bhd 447,187 771,415 Ramatex Bhd 78,300 44,323 Resorts World Bhd 114,000 362,988 RHB Capital Bhd 150,000 112,055 Road Builder Holdings Bhd 298,000 176,744 Scomi Group Bhd 704,000 207,078 Shell Refining Co. Bhd 151,100 415,443 Sime Darby Bhd 742,900 1,111,974 Southern Bank Bhd 202,000 231,988 SP Setia Bhd 140,000 144,020 Star Publications (Malaysia) Bhd 104,000 99,061 Ta Ann Holdings Bhd 80,000 139,339 Tan Chong Motor Holdings Bhd 219,000 83,440 Tanjong Plc 68,000 249,906 Telekom Malaysia Bhd 310,100 763,752 Tenaga Nasional Bhd 169,825 425,198 TIME Engineering Bhd(a) 103,900 18,560 Titan Chemicals Corp. Bhd 678,200 234,403 Top Glove Corp. Bhd 75,000 184,719 Transmile Group Bhd(a) 35,000 121,921 Uchi Technologies Bhd 122,400 109,298 UEM Builders Bhd(a) 457,000 141,837 UEM World Bhd(a) 468,000 192,453 UMW Holdings Bhd 57,000 117,118 YTL Corp. Bhd 155,584 205,780 YTL e-Solutions Bhd 577,000 23,554 YTL Power International Bhd 257,000 136,439 ------------------------------------------------------------------------------------------------ $18,929,662 ------------------------------------------------------------------------------------------------ Mauritius -- 0.5% ------------------------------------------------------------------------------------------------ Air Mauritius Ltd. 83,400 $ 48,454 Ireland Blyth Ltd. 64,209 79,193 Mauritius Commercial Bank 463,595 842,626 Mauritius Development Investment Trust Co., Ltd. 300,000 61,831 Mon Tresor & Mon Desert Ltd. 23,449 33,558 New Mauritius Hotels Ltd. 235,400 496,625 Rogers & Co., Ltd. 48,555 283,890 Shell Mauritius Ltd. 22,000 49,019 State Bank of Mauritius Ltd. 641,899 770,862 Sun Resorts Ltd. 95,730 169,337 United Basalt Products Ltd. 85,125 117,217 ------------------------------------------------------------------------------------------------ $ 2,952,612 ------------------------------------------------------------------------------------------------ Mexico -- 6.6% ------------------------------------------------------------------------------------------------ Alfa SA de CV 381,572 $ 1,926,512 America Movil SA de CV 4,043,360 6,788,098 America Telecom SA de CV(a) 141,061 833,545 Carso Global Telecom SA de CV(a) 160,800 334,773 Cemex SA de CV 892,285 5,110,561 Coca-Cola Femsa SA de CV 19,000 56,557 Consorcio ARA SA de CV 118,000 488,197 Corporacion GEO SA de CV (Series "B")(a) 70,000 233,051 Desarrolladora Homex SA de CV(a) 25,100 138,268 Empresas ICA SA de CV(a) 346,819 983,217 Fomento Economico Mexicano SA de CV 158,800 1,336,505 Grupo Aeroportuario del Surests SA de CV (Class "B" Shares) 72,826 247,041 Grupo Bimbo SA de CV 141,527 426,174 Grupo Carso SA de CV 731,000 1,696,739 Grupo Elektra SA de CV 9,626 91,240 Grupo Financiero Banorte SA de CV (Class "O" Shares) 1,512,100 3,523,163 Grupo Financiero Inbursa SA de CV (Class "O" Shares) 1,060,808 1,597,652 Grupo IMSA SA de CV(a) 28,827 99,600 Grupo Iusacell SA de CV(a) 136,250 603,536 Grupo Mexico SA de CV 339,330 974,011 Grupo Modelo SA de CV (Series "C") 146,000 560,710 Grupo Televisa SA 392,118 1,528,502 Impulsora del Desarrollo y el Empleo en America Latina SA de CV(a) 1,268,730 1,123,998 Industrias CH SA (Series "B")(a) 39,452 100,660 Industrias Penoles SA de CV 29,929 193,823 Kimberly-Clark de Mexico SA de CV 121,570 386,865 Telefonos de Mexico SA de CV 2,262,460 2,381,189 TV Azteca SA de CV 593,565 402,278 Urbi Desarrollos Urbanos SA de CV(a) 183,000 426,386 US Commercial Corp. SA de CV(a) 128,000 27,216 Vitro SA de CV (Series "A") 102,400 87,181 Wal-Mart de Mexico SA de CV 729,632 2,049,083 ------------------------------------------------------------------------------------------------ $36,756,331 ------------------------------------------------------------------------------------------------ Morocco -- 1.8% ------------------------------------------------------------------------------------------------ Banque Commerciale du Maroc 8,180 $ 1,734,799 Banque Marocaine du Commerce Exterieur (BMCE) 9,120 1,045,109 Banque Marocaine pour le Commerce et L' Industrie (BMCI)(a) 2,200 249,787 Centrale Laitiere(a) 420 242,064 Ciments du Maroc 1,665 412,449 Cosumar Compagnie Sucriere Marocaine et de Raffinage 1,637 153,786 CTM 1,560 36,762 Holcim Maroc SA 2,082 447,227 Lafarge Ciments 700 310,649 Lesieur Cristal SA 1,663 138,120 Managem 2,800 111,181 Maroc Telecom(a) 89,100 1,171,177 Maroc Telecom(a) 35,000 471,621 ONA SA 9,623 1,461,512 Samir 6,247 629,725 Societe des Brasseries du Maroc 3,529 648,403 Societe Nationale d'Investissement 2,630 378,803 SONASID (Societe Nationale de Siderurgie) 1,700 352,721 ------------------------------------------------------------------------------------------------ $ 9,995,895 ------------------------------------------------------------------------------------------------ Nigeria -- 1.0% ------------------------------------------------------------------------------------------------ African Petroleum Plc(a) 894,000 $ 292,917 Ashaka Cement Plc(a) 612,000 172,066 Cadbury Nigeria Plc 400,000 171,963 Conoil Plc 322,000 182,316 First Bank of Nigeria Plc(a) 1,928,000 803,333 Guaranty Trust Bank Plc 4,366,666 483,938 Guiness Nigeria Plc 335,000 284,124 Mobil Nigeria Plc(a) 119,008 148,306 Nestle Foods Nigeria Plc 80,000 120,249 Nigeria Bottling Co., Plc 300,000 112,383 Nigerian Breweries Plc(a) 401,000 109,026 Oando Plc 339,000 198,806 Oceanic Bank International Plc(a) 1,927,000 109,557 PZ Industries Plc 2,216,666 362,884 Total Nigeria Plc 149,500 224,134 UACN(a) 1,581,000 245,646 UACN Property Development Co., Plc 2,000,000 146,175 Unilever Nigeria Plc(a) 3,750,000 414,720 Union Bank of Nigeria Plc 2,133,333 507,580 United Bank for Africa Plc(a) 1,200,000 140,094 Zenith Bank Ltd.(a) 2,000,000 319,470 ------------------------------------------------------------------------------------------------ $ 5,549,687 ------------------------------------------------------------------------------------------------ Pakistan -- 0.8% ------------------------------------------------------------------------------------------------ Bank Alfalah Ltd.(a) 127,000 $ 84,371 Bank of Punjab(a) 66,000 90,653 D.G. Khan Cement Co., Ltd.(a) 60,000 89,686 Engro Chemical Pakistan Ltd.(a) 51,000 144,127 Fauji Fertilizer Bin Qasim Ltd.(a) 141,000 68,652 Fauji Fertilizer Co., Ltd. 89,000 178,857 Faysal Bank Ltd.(a) 92,000 93,956 Hub Power Co., Ltd.(a) 653,000 249,444 Indus Motor Co., Ltd.(a) 30,500 97,186 Kot Addu Power Co., Ltd.(a) 137,500 96,143 Lucky Cement Ltd.(a) 98,000 168,542 Maple Leaf Cement Factory Ltd.(a) 143,000 60,863 Muslim Commercial Bank Ltd. 147,000 513,438 National Bank of Pakistan 76,800 274,878 Nishat Chunian Ltd.(a) 47,000 34,737 Nishat Mills Ltd.(a) 173,000 300,635 Oil & Gas Development Co., Ltd. 95,000 215,766 Pak Suzuki Motor Co., Ltd. 31,500 164,643 Pakistan Industrial Credit & Investment Corp. Ltd.(a) 96,500 68,020 Pakistan Oil Fields Ltd.(a) 39,000 217,398 Pakistan Petroleum Ltd.(a) 67,000 235,892 Pakistan State Oil Co., Ltd. 40,000 205,282 Pakistan Telecommunication Co., Ltd. 366,000 246,457 Shell Pakistan Ltd.(a) 10,000 79,954 SUI Northern Gas Pipelines Ltd.(a) 127,000 210,928 SUI Southern Gas Co., Ltd.(a) 291,000 139,676 ------------------------------------------------------------------------------------------------ $ 4,330,184 ------------------------------------------------------------------------------------------------ Peru -- 1.5% ------------------------------------------------------------------------------------------------ Alicorp SA 1,589,463 $ 842,213 Cementos Lima SA 4,981 64,261 Cia de Minas Buenaventura SA (Class "B" Shares) (ADR) 36,649 999,785 Cia de Minas Buenaventura SA 41,440 1,141,812 Compania Minera Atacocha SA 51,862 100,363 Compania Minera Milpo SA 270,761 528,131 Credicorp Ltd. 56,400 1,689,744 Credicorp Ltd.(a) 1,800 53,460 Edegel SA 1,821,805 587,589 Empresa Agroindustrial Casa Grande SA(a) 78,200 152,532 Ferreyros SA 263,091 210,117 Grana y Montero SA(a) 226,973 132,468 Luz del Sur SAA 83,400 79,416 Minsur SA 353,485 472,327 Sociedad Minera Cerro Verde SA(a) 47,600 357,000 Sociedad Minera el Brocal SA(a) 30,100 147,934 Southern Peru Copper Corp. (ADR) 4,530 404,076 Volcan Cia Minera SA (Class "B" Shares)(a) 97,698 154,552 ------------------------------------------------------------------------------------------------ $ 8,117,780 ------------------------------------------------------------------------------------------------ Philippines -- 2.5% ------------------------------------------------------------------------------------------------ Aboitiz Equity Ventures, Inc. 2,000,000 $ 195,855 Ayala Corp. 95,856 666,778 Ayala Land, Inc. 2,474,840 535,976 Banco De Oro(a) 400,000 233,576 Bank of the Philippine Islands 1,070,064 1,003,901 Benpres Holdings Corp.(a) 31,820,000 610,304 Equitable PCI Bank, Inc.(a) 485,000 667,689 Filinvest Land, Inc.(a) 12,884,437 319,640 Globe Telecom, Inc. 17,000 297,799 International Container Terminal Services, Inc. 514,000 130,498 JG Summit Holdings, Inc. 4,200,000 474,198 Jollibee Foods Corp. 500,000 291,279 Manila Electric Co.(a) 394,286 164,904 Metropolitan Bank & Trust Co. 728,875 464,623 Petron Corp. 7,477,423 549,016 Philippine Long Distance Telephone Co. 114,060 3,925,106 San Miguel Corp. (Class "B" Shares) 1,721,900 2,364,903 SM Investments Corp. 100,000 403,289 SM Prime Holdings, Inc. 2,749,000 404,019 ------------------------------------------------------------------------------------------------ $13,703,353 ------------------------------------------------------------------------------------------------ Poland -- 3.4% ------------------------------------------------------------------------------------------------ Agora SA 53,392 $ 582,299 Bank BPH 3,226 711,268 Bank Millennium SA(a) 196,243 371,530 Bank Pekao SA 36,600 2,189,787 Bank Zachodni WBK SA 7,350 413,427 BRE Bank SA(a) 4,000 226,422 Budimex SA(a) 9,900 173,156 Cersanit-Krasnystaw SA(a) 63,800 391,415 ComArch SA(a) 4,100 167,421 ComputerLand SA 10,172 338,909 Echo Investment SA(a) 6,000 470,519 Globe Trade Centre SA(a) 1,500 125,049 Grupa Lotos SA(a) 17,767 262,890 KGHM Polska Miedz SA 58,290 1,984,178 KGHM Polska Miedz SA (GDR) 11,300 769,530 Netia SA 120,000 168,537 Orbis SA 60,680 823,934 Polish Oil & Gas(a) 320,015 338,038 Polska Grupa Farmaceutyczna SA 9,000 180,515 Polski Koncern Naftowy Orlen SA 122,225 2,036,326 Powszechna Kasa Oszczednosci Bank Polski SA 135,636 1,580,284 Prokom Software SA 24,781 959,205 Softbank SA 32,523 368,257 Telekomunikacja Polska SA 133,106 835,267 Telekomunikacja Polska SA (GDR) 169,000 1,039,350 Telekomunikacja Polska SA (GDR) (144A) 76,100 468,015 TVN SA(a) 27,711 834,043 ------------------------------------------------------------------------------------------------ $18,809,571 ------------------------------------------------------------------------------------------------ Romania -- 0.8% ------------------------------------------------------------------------------------------------ Antibiotice SA(a) 907,000 $ 443,738 Banca Transilvania(a) 3,018,000 1,098,059 BRD-Group Societe Generale 251,000 1,467,386 Impact SA(a) 3,116,026 498,144 Rompetrol Rafinare SA(a) 7,501,000 182,222 SNP Petrom SA 3,796,106 695,890 ------------------------------------------------------------------------------------------------ $ 4,385,439 ------------------------------------------------------------------------------------------------ Russia -- 6.9% ------------------------------------------------------------------------------------------------ Aeroflot - Russian International Airlines(a) 100,000 $ 175,000 AvtoVAZ 21,000 1,123,500 Cherepovets MK Severstal 25,804 273,936 Golden Telecom, Inc. (ADR) 700 17,745 Irkutskenergo (ADR) 11,500 304,750 JSC MMC Norilsk Nickel (ADR) 12,900 1,677,000 JSC Scientific Production Corp. Irkut (ADR) 18,333 441,092 LUKOIL (ADR) 60,100 5,000,320 Magadanenergo(a) 1,000,000 64,250 Mobile Telesystems (ADR) 15,800 465,152 Mosenergo (ADR) 12,900 251,550 OAO Gazprom(b) 1,091,300 11,461,779 Polyus Gold Co.(a)(c) 12,900 554,700 Rostelecom 75,000 354,000 Sberbank RF (GDR)(a) 8,042 1,371,161 Sberbank RF 2,000 3,399,910 Sibneft 77,000 324,722 Surgutneftegaz (ADR) (PFD Shares) 24,500 2,528,400 Surgutneftegaz (ADR) 35,200 2,573,120 Tatneft (ADR) 7,250 558,250 Transneft 200 404,000 Unified Energy System (GDR) 30,494 2,131,530 United Heavy Machinery Uralmash-Izhora Group(a) 44,500 349,325 Uralsvyazinform (ADR)(a) 6,329 42,151 VimpelCom (ADR)(a) 19,500 893,490 Wimm-Bill-Dann Foods OJSC (ADR) 49,500 1,937,925 ------------------------------------------------------------------------------------------------ $38,678,758 ------------------------------------------------------------------------------------------------ South Africa -- 6.7% ------------------------------------------------------------------------------------------------ ABSA Group Ltd. 51,073 $ 715,218 Adcorp Holdings Ltd.(a) 33,900 103,886 African Bank Investments Ltd. 56,000 219,740 African Oxygen Ltd. (AFROX) 32,000 132,342 Alexander Forbes Ltd. 132,100 270,142 Allan Gray Property Trust(a) 136,900 92,066 Allied Electronics Corp. Ltd. 23,200 80,081 Allied Technologies Ltd. 14,300 102,211 Anglo Platinum Ltd. 9,500 1,007,171 AngloGold Ashanti Ltd. 12,562 614,840 AngloGold Ashanti Ltd. (ADR) 20,619 992,186 Aspen Pharmacare Holdings Ltd. 63,510 324,386 Aveng Ltd.(a) 166,700 500,965 AVI Ltd. 52,000 100,392 Barloworld Ltd. 62,900 1,065,869 BidBEE Ltd.(a) 27,662 222,839 Bidvest Group Ltd. 138,137 1,906,640 Business Connexion Group 127,400 143,187 DataTec Ltd.(a) 98,000 363,884 Discovery Holdings Ltd.(a) 36,400 102,537 Edgars Consolidated Stores Ltd. 120,000 486,212 Ellerine Holdings Ltd.(a) 17,300 158,664 FirstRand Ltd. 581,385 1,369,043 Foschini Ltd. 27,423 175,415 Gold Fields Ltd. 59,380 1,355,108 Grindrod Ltd. 65,000 106,045 Group Five Ltd.(a) 52,000 209,346 Growthpoint Properties Ltd.(a) 71,100 107,903 Harmony Gold Mining Co., Ltd.(a) 48,500 787,134 Impala Platinum Holdings Ltd. 8,261 1,527,333 Imperial Holdings Ltd. 43,312 819,404 Investec Ltd. 3,300 147,720 JD Group Ltd. 14,214 132,366 Johnnic Communications Ltd. 13,578 106,064 Johnnic Holdings Ltd. 200 271 Liberty Group Ltd. 15,000 150,459 Massmart Holdings Ltd.(a) 24,800 163,324 Metropolitan Holdings Ltd. 65,000 107,422 Mittal Steel South Africa Ltd. 27,000 281,899 MTN Group Ltd. 461,880 3,415,154 Murray & Roberts Holdings Ltd. 137,500 488,987 Mustek Ltd.(a) 53,000 76,267 Mvelaphanda Group Ltd. 295,100 314,148 Nampak Ltd. 65,700 167,842 Naspers Ltd. 48,168 823,095 Nedcor Ltd. 29,083 458,962 Network Healthcare Holdings Ltd. 217,000 291,619 Pick'n Pay Stores Ltd. 104,260 425,197 Remgro Ltd. 90,705 1,712,616 Reunert Ltd. 65,500 596,274 RMB Holdings Ltd. 96,800 333,964 Sanlam Ltd. 273,690 555,350 Sappi Ltd. 23,820 295,065 Sasol Ltd. 91,536 3,533,451 Shoprite Holdings Ltd. 126,153 448,271 Standard Bank Group Ltd. 154,753 1,662,851 Steinhoff International Holdings Ltd. 280,700 838,448 Sun International Ltd.(a) 7,600 89,074 Telkom South Africa Ltd.(a) 90,000 1,661,537 Tiger Brands Ltd. 62,016 1,246,658 Tradehold Ltd.(a) 29,862 10,154 Trencor Ltd.(a) 25,400 90,666 Truworths International Ltd. 66,000 198,880 Woolworths Holdings Ltd. 98,942 189,742 ------------------------------------------------------------------------------------------------ $37,175,986 ------------------------------------------------------------------------------------------------ South Korea -- 6.6% ------------------------------------------------------------------------------------------------ Amorepacific Corp.(a) 248 $ 107,218 Amorepacific Corp. 152 24,929 Asiana Airlines(a) 13,400 94,518 Dacom Corp.(a) 5,800 103,169 Daelim Industrial Co., Ltd. 2,500 156,742 Daesang Corp.(a) 27,000 385,121 Daesang Holdings Co., Ltd.(a) 18,000 93,292 Daewoo Engineering & Construction Co., Ltd. 13,000 184,727 Daewoo Shipbuilding & Marine Engineering Co., Ltd. 8,500 249,864 Dongkuk Steel Mill Co., Ltd.(a) 9,400 161,515 Doosan Heavy Industries and Construction Co., Ltd.(a) 3,000 108,704 GS Engineering & Construction Corp. 4,000 258,338 GS Holdings Corp. 5,554 174,345 Hana Financial Group, Inc. 18,765 880,296 Hanarotelecom, Inc.(a) 7,000 40,001 Hanjin Heavy Industries & Construction Co., Ltd.(a) 4,200 112,479 Hanjin Shipping Co., Ltd. 5,300 126,517 Hanwha Corp. 9,800 234,199 Hanwha Securities Co., Ltd. 40,000 338,361 Hite Brewery Co., Ltd. 1,950 194,939 Honam Petrochemical Corp.(a) 2,600 126,843 Hynix Semiconductor, Inc.(a) 24,070 778,005 Hyundai Development Co. 6,700 289,617 Hyundai Engineering & Construction Co., Ltd.(a) 6,500 297,799 Hyundai Heavy Industries Co., Ltd. 4,000 449,148 Hyundai Merchant Marine Co., Ltd. 8,700 166,171 Hyundai Mobis 3,800 321,058 Hyundai Motor Co. 17,770 1,508,495 Hyundai Motor Co. Ltd. (PFD Shares) 4,200 210,299 Hyundai Steel Co.(a) 8,500 306,176 Industrial Bank of Korea(a) 12,600 208,830 Kangwon Land, Inc. 36,658 625,397 KCC Corp. 500 121,231 Kia Motors Corp. 11,000 188,406 Kookmin Bank(a) 5,100 420,222 Kookmin Bank (ADR) 18,084 1,502,057 Korea Electric Power Corp. 40,830 1,529,631 Korea Express Co., Ltd.(a) 2,000 145,199 Korea Gas Corp. 4,400 150,809 Korea Zinc Co., Ltd.(a) 2,300 180,300 Korean Air Lines Co., Ltd. 8,086 298,376 KT Corp. 30,600 1,266,753 KT Freetel Co., Ltd. 14,400 450,717 KT&G Corp. 27,980 1,633,542 KTBNetwork Co., Ltd. (ADR)(a) 80,000 358,998 LG Chem Ltd. (GDR) (144A) 9,240 160,704 LG Corp. 8,900 261,084 LG Electronics, Inc. 9,019 546,601 LG Petrochemical Co., Ltd.(a) 4,500 87,686 LG Telecom Ltd.(a) 20,000 261,410 NHN Corp.(a) 800 277,465 Poongsan Corp.(a) 5,600 113,619 POSCO 12,090 3,246,788 S-Oil Corp. 5,500 388,647 Samsung Corp. 25,930 711,220 Samsung Electro-Mechanics Co., Ltd.(a) 4,200 144,550 Samsung Electronics Co. Ltd. (PFD Shares) 1,400 676,556 Samsung Electronics Co., Ltd.(a) 8,138 5,165,522 Samsung Fine Chemicals Co., Ltd.(a) 4,300 108,974 Samsung Fire & Marine Insurance Co., Ltd. 7,734 1,035,560 Samsung Heavy Industries Co., Ltd. 9,500 219,203 Samsung Securities Co., Ltd. 3,870 207,865 Samsung Techwin Co., Ltd.(a) 4,000 109,572 Shinhan Financial Group Co., Ltd. 22,630 1,066,243 Shinsegae Co., Ltd. 1,300 650,848 SK Chemicals Co., Ltd.(a) 3,200 118,256 SK Corp. 14,800 951,718 SK Securities Co., Ltd. 470,000 517,740 SK Telecom Co., Ltd. 2,180 467,498 SK Telecom Co., Ltd. (ADR) 49,526 1,159,899 Ssangyong Cement Industrial Co., Ltd.(a) 8,600 106,066 Trigem Computer, Inc.(a) 2,389 117,347 Woori Finance Holdings Co., Ltd.(a) 8,200 153,952 ------------------------------------------------------------------------------------------------ $36,595,946 ------------------------------------------------------------------------------------------------ Taiwan -- 6.8% ------------------------------------------------------------------------------------------------ Acer, Inc. 276,455 $ 484,831 Advanced Semiconductor Engineering, Inc.(a) 161,000 159,360 Advanced Semiconductor Engineering, Inc. (ADR) 27,495 136,650 Asia Cement Corp. 416,491 312,761 Astro All Asia Networks PLC 136,500 167,936 Asustek Computer, Inc. 174,051 426,955 AU Optronics Corp.(a) 101,000 143,020 AU Optronics Corp. (ADR) 29,711 423,085 Catcher Technology Co., Ltd.(a) 21,000 222,151 Cathay Financial Holding Co., Ltd. 504,000 1,101,167 Chang Hwa Commercial Bank(a) 395,000 279,824 Cheng Uei Precision Industry Co., Ltd.(a) 22,000 89,316 Chi Mei Optoelectronics Corp. 186,859 207,195 China Development Financial Holding Corp.(a) 931,000 376,647 China Motor Corp.(a) 146,000 146,581 China Steel Corp. 912,440 905,657 Chinatrust Financial Holding Co., Ltd. 637,820 529,032 Chunghwa Telecom Co., Ltd.(a) 655,000 1,180,164 Chunghwa Telecom Co., Ltd. (ADR) 48,200 890,254 Compal Communications, Inc.(a) 23,000 99,741 Compal Electronics, Inc. 326,140 310,834 Cosmos Bank Taiwan(a) 238,000 102,913 D-Link Corp.(a) 105,000 114,432 Delta Electronics, Inc. 138,600 393,053 E.Sun Financial Holding Co., Ltd. 254,925 170,144 Eva Airways Corp.(a) 736,032 313,438 Evergreen Marine Corp. 704,946 491,595 Everlight Electronics Co., Ltd.(a) 43,000 109,497 Far Eastern International Bank(a) 203,000 85,806 Far Eastern Textile Ltd. 172,800 141,126 Far EasTone Telecommunications Co., Ltd. 828,000 923,047 First Financial Holding Co., Ltd. 381,800 288,959 Formosa Chemicals & Fibre Corp. 272,000 420,051 Formosa Petrochemical Corp. 928,602 1,769,768 Formosa Plastics Corp.(a) 563,050 854,363 Foxconn Technology Co., Ltd.(a) 41,000 328,948 Fu Sheng Industrial Co., Ltd. 146,640 141,697 Fubon Financial Holding Co., Ltd. 650,000 563,054 Fuhwa Financial Holdings Co., Ltd.(a) 263,000 121,796 High Tech Computer Corp. 32,080 881,824 Hon Hai Precision Industry Co., Ltd. 281,610 1,738,714 Hotai Motor Co., Ltd.(a) 98,000 226,954 Hsinchu International Bank(a) 188,000 89,871 Hua Nan Financial Holdings Co., Ltd. 355,000 253,143 Inventec Co., Ltd.(a) 220,000 141,538 KGI Securities Co., Ltd.(a) 283,000 85,641 King Yuan Electronics Co., Ltd.(a) 118,000 98,850 Largan Precision Co., Ltd.(a) 14,000 299,274 Lite-On Technology Corp. 177,000 262,311 Macronix International Co., Ltd.(a) 448,000 124,041 MediaTek, Inc. 77,600 718,290 Mega Financial Holding Co., Ltd. 759,000 561,617 Motech Industries, Inc.(a) 6,000 141,190 Nan Ya Plastics Corp. 887,000 1,309,718 Nanya Technology Corp.(a) 165,000 103,662 Novatek Microelectronics Corp. Ltd.(a) 25,000 121,198 Phoenix Precision Technology Corp. 78,270 114,292 Pou Chen Corp.(a) 691,000 608,733 Powerchip Semiconductor Corp.(a) 543,680 355,961 President Chain Store Corp. 545,000 1,197,976 ProMOS Technologies, Inc.(a) 318,000 115,030 Quanta Computer, Inc. 230,325 368,780 Quanta Display, Inc.(a) 292,000 109,950 Realtek Semiconductor Corp.(a) 97,000 101,836 Shin Kong Financial Holding Co., Ltd.(a) 282,749 311,008 Siliconware Precision Industries Co. (ADR) 66,085 395,188 SinoPac Financial Holdings Co., Ltd.(a) 644,523 326,271 Synnex Technology International Corp. 424,390 461,485 Taishin Financial Holdings Co., Ltd. 496,888 304,362 Taiwan Business Bank(a) 409,000 86,530 Taiwan Cement Corp. 340,650 250,527 Taiwan Mobile Co., Ltd. 1,345,000 1,336,562 Taiwan Semiconductor Manufacturing Co., Ltd. 1,866,855 3,392,611 Tatung Co., Ltd.(a) 358,000 148,578 Teco Electric & Machinery Co., Ltd.(a) 389,000 144,122 Teco Electric & Machinery Co., Ltd. (GDR) 42 156 U-Ming Marine Transport Corp.(a) 202,000 233,133 Uni-President Enterprises Corp. 2,276,000 1,982,124 United Microelectronics Corp.(a) 423,000 251,227 United Microelectronics Corp. (ADR) 226,175 703,404 Via Technologies, Inc.(a) 142,000 123,086 Walsin Lihwa Corp. 1,085,980 465,921 Wan Hai Lines Ltd.(a) 280,000 192,826 Winbond Electronics Corp.(a) 338,000 99,794 Wintek Corp. 6,811 6,200 Yageo Corp.(a) 303,000 104,691 Yang Ming Marine Transport 292,870 183,550 Yuanta Core Pacific Securities Co.(a) 322,000 212,778 Yuen Foong Yu Paper Manufacturing Co., Ltd.(a) 301,000 119,009 ------------------------------------------------------------------------------------------------ $37,892,385 ------------------------------------------------------------------------------------------------ Thailand -- 3.2% ------------------------------------------------------------------------------------------------ Advanced Info Service Pcl(d) 403,900 $ 952,719 Airports of Thailand Pcl(a)(d) 92,400 135,615 Amata Corp. Pcl(a)(d) 225,600 100,516 Aromatics (Thailand) Pcl(d) 145,000 102,608 Bangkok Bank Pcl(a) 231,900 620,858 Bangkok Bank Pcl(d) 144,900 403,942 Bangkok Expressway Pcl(d) 194,700 99,506 Bank of Ayudhya Pcl(d) 200,400 90,862 Bank of Ayudhya Pcl(a) 272,400 122,950 Bank of Ayudhya Pcl (NVDR)(a) 231,100 104,309 BankThai Pcl(a)(d) 643,800 104,614 Banpu Pcl(a)(d) 33,000 114,360 Banpu Pcl (NVDR) 29,700 100,545 BEC World Pcl(d) 475,300 186,856 Big C Supercenter Pcl (NVDR) 113,000 110,284 Cal-Comp Electronics (Thailand) Pcl(a)(d) 1,500,000 154,894 Central Pattana Pcl(d) 540,700 269,252 Ch. Karnchang Pcl(a)(d) 476,500 98,035 Charoen Pokphand Foods Pcl(d) 3,314,800 473,481 CP Seven Eleven Pcl(d) 1,500,000 283,056 Delta Electronics (Thailand) Pcl(d) 934,670 404,195 Electricity Generating Pcl(d) 114,500 222,043 Hana Microelectronic Pcl(d) 1,084,100 710,326 Italian-Thai Development Pcl(d) 2,003,000 265,107 Kasikornbank Pcl(d) 784,600 1,252,436 Krung Thai Bank Pcl(d) 1,109,000 297,923 Land and Houses Pcl(a) 889,000 164,660 Land and Houses Pcl(d) 1,130,000 222,670 Loxley Pcl(a)(d) 2,001,400 123,793 Major Cineplex Group Pcl(d) 754,100 334,014 Minor International Pcl(d) 2,042,940 505,983 National Finance Pcl(d) 523,300 197,156 Precious Shipping Pcl(d) 193,000 165,660 PTT Chemical Pcl(d) 78,489 173,826 PTT Exploration & Production Pcl(a)(d) 293,000 813,996 PTT Pcl(d) 314,500 1,879,334 Quality House Pcl(d) 4,710,000 132,085 Ratchaburi Electricity Generating Holding Pcl(d) 261,100 237,799 Saha-Union Pcl(d) 98,700 59,238 Shin Corp. Pcl (NVDR) 426,000 323,785 Siam Cement Pcl(a) 139,600 783,724 Siam Cement Pcl(d) 43,400 261,948 Siam City Bank Pcl(a)(d) 267,000 131,683 Siam City Cement Pcl(d) 42,900 249,608 Siam Commercial Bank Pcl(d) 401,000 606,939 Siam Makro Pcl(d) 157,600 256,092 Thai Airways International Pcl(d) 269,000 281,126 Thai Military Bank Pcl(a)(d) 1,809,000 158,356 Thai Oil Pcl(d) 231,900 387,645 Thai Petrochemical Industry Pcl(a)(d) 2,824,000 510,696 Thai Stanley Electric Pcl(d) 26,000 106,303 Thai Union Frozen Products Pcl(a) 233,000 148,248 Thai Union Frozen Products Pcl(d) 230,000 152,166 TISCO Bank Pcl(d) 150,000 88,463 Total Access Communication Pcl(a) 95,000 341,916 True Corp. Pcl(a)(d) 730,768 172,373 TT&T Pcl(a)(d) 3,676,000 262,055 ------------------------------------------------------------------------------------------------ $18,014,632 ------------------------------------------------------------------------------------------------ Turkey -- 3.4% ------------------------------------------------------------------------------------------------ Ak Enerji Elektrik Uretim Otoprodukor Grubu AS(a) 33,055 $ 61,943 Akbank TAS 334,689 1,576,958 Aksigorta AS(a) 52,000 141,019 Anadolu Anonim Turk Sigorta Sirketi(a) 43,900 54,860 Anadolu Cam Sanayii AS(a) 26,600 81,835 Anadolu Efes Biracilik ve Malt Sanayii AS 41,576 1,116,227 Arcelik AS 61,583 348,694 Aygaz AS(a) 87,450 193,927 Cimsa Cimento Sanayi ve Ticaret AS 64,400 259,069 Denizbank AS(a) 37,300 327,903 Dogan Sirketler Grubu Holding AS 240,500 876,380 Dogan Yayin Holding AS(a) 88,698 298,014 Dogus Otomotiv Servis ve Ticaret AS(a) 31,400 107,461 Enka Insaat ve Sanayi AS 80,199 580,451 Eregli Demir ve Celik Fabrikalari TAS 156,693 738,040 Finansbank AS(a) 192,067 930,456 Ford Otomotiv Sanayi AS(a) 42,700 283,470 Haci Omer Sabanci Holding AS 315,237 836,824 Hurriyet Gazetecilik ve Matbaacilik AS 82,000 166,060 Ihlas Holding AS(a) 402,300 171,551 KOC Holding AS(a) 325,538 962,139 Migros Turk TAS(a) 48,833 387,134 Nortel Networks Netas Telekomunikasyon AS 1,764 34,231 Petkim Petrokimya Holding AS(a) 89,300 284,245 Sekerbank TAS(a) 49,700 170,652 Tofas Turk Otomobil Fabrikasi AS(a) 43,900 110,092 Trakya CAM Sanayi AS 102,999 275,393 Tupras Turkiye Petrol Rafine AS 82,641 1,368,298 Turk Hava Yollari Aninum Ortakligi (THY) AS(a) 133,348 454,698 Turk Sise ve Cam Fabrikalari AS(a) 81,900 219,977 Turkcell Iletisim Hizmet AS 364,294 1,681,070 Turkcell Iletisim Hizmet AS (ADR) 38,495 456,546 Turkiye Garanti Bankasi AS 497,087 1,215,721 Turkiye Is Bankasi 189,628 916,874 Turkiye Sinai Kalkinma Bankasi AS(a) 60,000 78,384 Turkiye Vakiflar Bankasi T.A.O 162,700 635,027 Vestel Elektronik Sanayi va Ticaret AS(a) 15,295 33,095 Yapi ve Kredi Bankasi(a) 241,539 359,701 Zorlu Enerji Elektrik Uretim AS(a) 28,500 70,453 ------------------------------------------------------------------------------------------------ $18,864,872 ------------------------------------------------------------------------------------------------ United States -- 0.4% ------------------------------------------------------------------------------------------------ Southern Copper Corp. 22,169 $ 1,975,923 ------------------------------------------------------------------------------------------------ $ 1,975,923 ------------------------------------------------------------------------------------------------ Venezuela -- 0.4% ------------------------------------------------------------------------------------------------ Cia Anonima Nacional Telefonos de Venezuela - CANTV (ADR) 65,152 $ 1,280,237 Mercantil Servicios Financieros CA (Series B) (ADR) 161,700 929,532 ------------------------------------------------------------------------------------------------ $ 2,209,769 ------------------------------------------------------------------------------------------------ Zimbabwe -- 0.6% ------------------------------------------------------------------------------------------------ Ariston Holdings Ltd.(a) 597,393 $ 47,817 Barclays Bank Zimbabwe 712,759 18,313 Dawn Properties(a) 369,831 1,461,847 Delta Corp. Ltd. 807,488 638,359 Econet Wireless Holdings Ltd. 96,681 363,047 Hwange Colliery Co. Ltd.(a) 693,000 130,114 Meikles Africa Ltd. 60,013 183,842 NMBZ Holdings Ltd.(a) 994,355 18,670 OK Zimbabwe 1,059,353 30,254 Old Mutual PLC 80,448 747,959 Pelhams Ltd.(a) 86,835 172 Zimbabwe Sun Ltd. 123,277 3,411 ------------------------------------------------------------------------------------------------ $ 3,643,805 ------------------------------------------------------------------------------------------------ Total Common Stocks (cost $334,500,654) $537,078,289 ------------------------------------------------------------------------------------------------ Investment Funds -- 3.3% Framlington Bulgaria Fund, Ltd.(a)(e) 78,180 $ 14,854 Genesis Chile Fund Ltd.(a) 3,400 64,192 India Fund, Inc. 95,800 4,425,002 Korea Fund, Inc. 12,110 438,745 Morgan Stanley India Investment Fund, Inc. 23,786 $ 1,036,832 Romanian Investment Fund(a) 615 325,950 Saudi Arabia Investment Fund Ltd. 65,206 5,451,222 Societe Generale Baltic Republic Fund(e) 12,723 47,711 Societe Generale Romania Fund(c)(e) 6,450 7,740 UTI India IT Fund Ltd.(a) 22,300 686,840 Vietnam Enterprise Investments Ltd.(a) 1,882,733 5,365,789 Vietnam Growth Fund Ltd.(a) 17,646 282,336 ------------------------------------------------------------------------------------------------ Total Investment Funds (cost $6,409,594) $18,147,213 ------------------------------------------------------------------------------------------------ Rights -- 0.0% Bank Alfalah Ltd. (Pakistan) Expiring 9/12/06(a) 127,000 $ -- Cia de Bebidas das Americas (Brazil) Expiring 7/31/06 3,170 1 D.G. Khan Cement Co., Ltd. (Pakistan) Expiring 7/20/06(a) 15,000 13,702 ------------------------------------------------------------------------------------------------ Total Rights (cost $0) $ 13,703 ------------------------------------------------------------------------------------------------ Warrants -- 0.4% CalComp Electronics Pcl Call Warrant (Thailand), expiring 4/19/09, strike THB5.000(a) 300,000 $ -- China Overseas Land & Investment Ltd. (China), expiring 7/17/07, strike HKD4.500(a) 88,500 2,564 J.P. Morgan International Derivatives Ltd. Call Warrant (Bharti Televentures (India)), (144A) expiring 10/28/08, strike INR.0001(a) 81,000 644,728 J.P. Morgan International Derivatives Ltd. Call Warrant (Hero Honda Motors Ltd. (India)), (144A) expiring 12/22/06, strike INR.0001(a) 16,000 280,606 J.P. Morgan International Derivatives Ltd. Call Warrant (Hindustan Lever Ltd. (India)), (144A) expiring 4/4/07, strike INR.0001 133,000 680,075 J.P. Morgan International Derivatives Ltd. Call Warrant (Infosys Technologies Ltd. (India)), (144A) expiring 8/25/08, strike INR.0001(a) 1,575 429,043 J.P. Morgan International Derivatives Ltd. Call Warrant (Tata Consultancy Services Ltd. (India)), (144A) expiring 11/1/06, strike INR.0001(a) 5,985 226,044 ------------------------------------------------------------------------------------------------ Total Warrants (cost $1,765,657) $ 2,263,060 ------------------------------------------------------------------------------------------------ Total Long-Term Investments -- 100.0% (cost $342,675,905) $557,502,265 ------------------------------------------------------------------------------------------------ Short-Term Investments -- 0.8% Principal Security Amount (000) Value ------------------------------------------------------------------------------------------------ Repurchase Agreements ------------------------------------------------------------------------------------------------ State Street Bank & Trust Corp. Repurchase Agreement, dated 6/30/06, 4.90%, due 7/3/06 (cost $4,472,000)(f)(a) $ 4,472 $ 4,472,000 ------------------------------------------------------------------------------------------------ Total Repurchase Agreements (cost $4,472,000) $ 4,472,000 ------------------------------------------------------------------------------------------------ Total Investments -- 100.8% (cost $347,147,905) $561,974,265 ------------------------------------------------------------------------------------------------ Other Assets, Less Liabilities -- (0.8)% $ (4,340,039) ------------------------------------------------------------------------------------------------ Net Assets -- 100% $557,634,226 ------------------------------------------------------------------------------------------------ (144A) -- Security Exempt from registration under Rule 144A of the securities Act of 1933. (ADR) -- American Depositary Receipt (GDR) -- Global Depository Receipt (NVDR) -- Non-Voting Depository Receipt (PFD Shares) -- Preferred Shares (a) Non-income producing security. (b) Represents financial contract with an off-shore broker whereby one contract is equal to one share of the indicated security. (c) Security valued at fair value using methods determined in good faith by or at the direction of the Trustees. (d) Indicates a foreign registered security. Shares issued to foreign investors in markets that have foreign ownership limits. (e) Investment fund is in the process of being liquidated. (f) Repurchase price of $4,473,826. Collateralized by $4,690,000 Federal Home Loan Bank 4.375% due 9/17/2010. The aggregate market value, including accrued interest, of the collateral was $4,563,919. Industry Classification as of June 30, 2006 PERCENTAGE OF TOTAL MARKET SECTOR INVESTMENTS VALUE Financials 22.0% $122,886,567 Materials 12.8% 71,274,798 Telecommunication Services 12.7% 70,596,823 Energy 11.3% 63,080,591 Industrial 9.7% 53,800,662 Consumer Staples 8.4% 46,886,590 Consumer Discretionary 7.3% 40,844,965 Information Technology 6.1% 34,264,633 Utilities 4.4% 24,637,245 Health Care 2.4% 13,541,978 Investment Funds 2.3% 12,789,542 Other 0.5% 2,897,870 Currency Concentration of Portfolio as of June 30, 2006 PERCENTAGE OF TOTAL CURRENCY INVESTMENTS VALUE United States Dollar 22.3% $124,627,942 Mexican Peso 6.6% 36,756,331 South African Rand 6.5% 36,183,799 Hong Kong Dollar 6.4% 35,619,442 New Taiwan Dollar 6.3% 35,175,712 South Korean Won 6.1% 33,773,286 Brazilian Real 5.8% 32,210,105 Indonesian Rupiah 3.5% 19,732,554 Malaysian Ringgit 3.4% 19,097,598 Hungarian Forint 3.4% 18,780,409 New Turkish Lira 3.3% 18,408,327 Thailand Baht 3.2% 17,672,716 Polish Zloty 3.0% 16,532,676 Czech Koruna 2.9% 16,513,605 Philippine Peso 2.5% 13,703,353 Israeli Shekel 2.2% 12,348,561 Other Currencies 12.6% 70,365,849 See notes to financial statements
Eaton Vance Tax-Managed Emerging Markets Fund as of June 30, 2006 FINANCIAL STATEMENTS Statement of Assets and Liabilities As of June 30, 2006 Assets ---------------------------------------------------------------------------- Investments in securities, at value (identified cost, $347,147,905) $ 561,974,265 Cash 63,315 Foreign currency, at value (identified cost $177,820) 174,655 Receivable for securities sold 8,359,730 Dividends and interest receivable 1,972,133 Receivable for capital stock sold 1,493,597 Tax reclaims receivable 42,101 ---------------------------------------------------------------------------- Total assets $ 574,079,796 ---------------------------------------------------------------------------- Liabilities ---------------------------------------------------------------------------- Payable for investment securities purchased $ 7,521,390 Payable for capital stock redeemed 6,229,219 Accrued capital gains taxes 2,694,961 ---------------------------------------------------------------------------- Total liabilities $ 16,445,570 ---------------------------------------------------------------------------- Net Assets $ 557,634,226 ---------------------------------------------------------------------------- Sources of Net Assets ---------------------------------------------------------------------------- Paid-in capital $ 360,898,732 Distributions in excess of net investment income (207,665) Accumulated net realized loss on investments and foreign currency related transactions (15,150,361) Net unrealized appreciation of investments and foreign currencies 212,093,520 ---------------------------------------------------------------------------- Total $ 557,634,226 ---------------------------------------------------------------------------- Institutional Shares ---------------------------------------------------------------------------- Net Assets $ 557,634,226 Shares Outstanding 17,647,504 Net Asset Value and Redemption Price Per Share (net assets/shares of beneficial interest outstanding) $ 31.60 ---------------------------------------------------------------------------- Statement of Operations For the Year Ended June 30, 2006 Investment Income ---------------------------------------------------------------------------- Dividends (net of foreign taxes, $1,256,000) $ 12,445,669 Interest 192,076 ---------------------------------------------------------------------------- Total income $ 12,637,745 ---------------------------------------------------------------------------- Expenses ---------------------------------------------------------------------------- Management fee $ 2,031,849 Administration fees 2,257,611 ---------------------------------------------------------------------------- Total expenses $ 4,289,460 ---------------------------------------------------------------------------- Net investment income $ 8,348,285 ---------------------------------------------------------------------------- Realized and Unrealized Gain (Loss) ---------------------------------------------------------------------------- Net realized gain (loss) -- Investment transactions 7,969,046(1) Foreign currency related transactions (629,651) ---------------------------------------------------------------------------- Net realized gain $ 7,339,395 ---------------------------------------------------------------------------- Change in unrealized appreciation (depreciation) -- Investments $ 99,426,608(2) Foreign currencies (16,596) ---------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) $ 99,410,012 ---------------------------------------------------------------------------- Net realized and unrealized gain $ 106,749,407 ---------------------------------------------------------------------------- Net increase in net assets from operations $ 115,097,692 ---------------------------------------------------------------------------- (1) Net of foreign capital gains taxes $71,913 (see Note1(c)). (2) Net of foreign capital gains taxes of $1,925,249 (See Note 1(c)). See notes to financial statements Eaton Vance Tax-Managed Emerging Markets Fund as of June 30, 2006 FINANCIAL STATEMENTS CONT'D Statements of Changes in Net Assets
Increase (Decrease) Year Ended Year Ended in Net Assets June 30, 2006 June 30, 2005 ----------------------------------------------------------------------------------------------- From operations -- Net investment income $ 8,348,285 $ 4,352,995 Net realized gain on investment and foreign currency transactions 7,339,395 7,335,647 Net change in unrealized appreciation (depreciation) on investment and foreign currencies 99,410,012 56,832,102 ----------------------------------------------------------------------------------------------- Net increase in net assets from operations $115,097,692 $68,520,744 ----------------------------------------------------------------------------------------------- Dividends and distributions to shareholders from -- Net investment income $(9,490,505) $(2,730,766) ----------------------------------------------------------------------------------------------- Fund share transactions -- Proceeds from sale of shares $185,064,361 $91,696,433 Net asset value of shares issued as reinvestment of dividends 7,446,264 2,050,127 Cost of shares redeemed (38,883,690) (22,745,680) Fund purchase and redemption fees (Note 1) 344,729 512,453 ----------------------------------------------------------------------------------------------- Net increase resulting from Fund share transactions $153,971,664 $71,513,333 ----------------------------------------------------------------------------------------------- Net increase in net assets $259,578,851 $137,303,311 ----------------------------------------------------------------------------------------------- Net Assets ----------------------------------------------------------------------------------------------- At beginning of year $298,055,375 $160,752,064 ----------------------------------------------------------------------------------------------- At end of year $557,634,226 $298,055,375 ----------------------------------------------------------------------------------------------- Undistributed (distribution in excess of) net investment income included in net assets at end of year $ (207,665) $ 593,750 -----------------------------------------------------------------------------------------------
Eaton Vance Tax-Managed Emerging Markets Fund as of June 30, 2006 FINANCIAL STATEMENTS CONT'D Financial Highlights
Year Ended June 30, --------------------------------------------------------------------------------===---------- 2006 2005 2004(a) 2003 2002 ----------------------------------------------------------------------------------------------------------------=----------- Net asset value -- Beginning of year $ 23.88 $ 17.34 $ 13.09 $ 11.24 $ 11.29 ----------------------------------------------------------------------------------------------------------------=----------- Income from operations ---------------------------------------------------------------------------------------------------------------=------------ Net investment income(b) $ 0.55 $ 0.42 $ 0.27 $ 0.26 $ 0.22 Net realized and unrealized gain (loss) 7.81 6.35 4.68 1.68 (0.09) --------------------------------------------------------------------------------------------------------------=------------- Total income from operations $ 8.36 $ 6.77 $ 4.95 $ 1.94 $ 0.13 -------------------------------------------------------------------------------------------------------------=-------------- Less distributions to shareholders -------------------------------------------------------------------------------------------------------------=-------------- From net investment income $ (0.66) $ (0.28) $ (0.75) $ (0.12) $ (0.21) --------------------------------------------------------------------------------------------------------------=------------- Fund purchase and redemption fee added to paid-in capital(b) $ 0.02 $ 0.05 $ 0.05 $ 0.03 $ 0.03 --------------------------------------------------------------------------------------------------------------=------------- Net asset value -- end of year $ 31.60 $ 23.88 $ 17.34 $ 13.09 $ 11.24 ----------------------------------------------------------------------------------------------------------------=----------- Total Return(c) 35.35% 39.46% 38.49% 17.71% 1.46% ----------------------------------------------------------------------------------------------------------------=----------- Ratios/Supplemental Data: -----------------------------------------------------------------------------------------------------------------=---------- Net assets, end of year (000's omitted) $557,634 $298,055 $160,752 $114,822 $ 86,654 Ratio of total expenses to average net assets 0.95% 0.95% 0.95% 1.01%(d) 1.07%(d) Ratio of net investment income to average net assets 1.84% 1.99% 1.67% 2.33% 1.99% Portfolio Turnover 9% 7% 12% 17% 32% --------------------------------------------------------------------------------------------------------------------------=- (a) On February 6, 2004, the Fund acquired the net assets of PIMCO PPA Fund, a series of PIMCO Funds: Multi-Manager Series pursuant to a plan of reorganization approved by its shareholders. The financial statements of the Fund reflect the historical financial results of the PIMCO PPA Fund prior to its reorganization. (b) Per share amounts based on average number of shares outstanding during the year. (c) Assumes investment at the net asset value at the beginning of the year, reinvestment of all dividends and distributions, a complete redemption of the investment at the net asset value at the end of the year and no sales or redemption charges. Total return would be reduced if a sales or redemption charge were taken into account. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. (d) Ratio of expenses to average net assets excluding tax and trustees' expense is 0.95%. See notes to financial statements
Eaton Vance Tax-Managed Emerging Markets Fund as of June 30, 2006 NOTES TO FINANCIAL STATEMENTS 1 Significant Accounting Policies -------------------------------------------------------------------------------- Eaton Vance Tax-Managed Emerging Markets Fund (the Fund) is a series of Eaton Vance Series Trust II (the Trust), a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund currently offers one class of shares. Class I shares are offered at net asset value and not subject to a sales charge. The Fund's investment objective is to seek long-term, after- tax returns for its shareholders. The Fund normally invests at least 80% of its net assets in equity securities of companies located in emerging market countries, which are those considered to be developing. The investment objective and policies of the PIMCO PPA Tax-Efficient Structured Emerging Markets Fund (PIMCO PPA Fund) were substantially similar to those of the Fund. The following is a summary of significant accounting policies of the Fund. The policies are in conformity with accounting principles generally accepted in the United States of America. A Investment Valuation -- Marketable securities that are listed on foreign or U.S. securities exchanges are valued at closing sale prices on the exchange where such securities are principally traded. Marketable securities listed in the NASDAQ National Market System are valued at the NASDAQ official closing price. Unlisted or listed securities for which closing sales prices are not available are valued at the mean between the latest 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. An option is valued at the last sale price as quoted on the principal exchange or board of trade on which such option or contract is traded, or in the absence of a sale, at the mean between the last bid and asked prices. Futures positions on securities or currencies are generally valued at closing settlement prices. Short-term debt securities with a remaining maturity of 60 days or less are valued at amortized cost. Other fixed income and debt securities, including listed securities and securities for which price quotations are available, will normally be valued on the basis of valuations furnished by a pricing service. 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 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 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 securities held by the fund. The Fund may rely on an independent fair valuation service in adjusting the valuations of foreign equity securities. Investments held by the Fund for which valuations or market quotations are not readily available or determined to be unreliable are valued at fair value using methods determined in good faith by or at the direction of the Trustees 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 -- 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 Fund is informed of the ex-dividend date. Interest income is recorded on the basis of interest accrued, adjusted for amortization of premium or accretion of discount. C Federal Taxes -- The Fund's policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute to shareholders each year all of its taxable income, including any net realized gain on investments. Accordingly, no provision for federal income or excise tax is necessary. Withholding taxes on foreign dividends have been provided for in accordance with the Fund's understanding of the applicable countries tax rules and rates. At June 30, 2006, the Fund, for federal income tax purposes, had a capital loss carryover of $14,919,815, which will reduce the Fund's taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Internal Revenue Code, and thus will reduce the amount of distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal income or excise tax. Such capital loss carryover will expire June 30, 2012 ($362,373), June 30, 2011 ($2,856,200), June 30, 2010 ($4,652,533) and June 30, 2009 ($7,048,709). As of June 30, 2006, the Fund's ability to offset $307,554 of its capital loss carryover against its capital gains is limited by the Internal Revenue Code. This limitation may decrease in subsequent years. In the year ended June 30, 2006, capital loss carryover of $6,917,996 was utilized to offset net realized gains. In addition to the requirements of the Internal Revenue Code, the Fund may also be subject to capital gains taxes in certain countries in which it invests. In determining the daily net asset value, the Fund estimates the accrual for capital gains taxes, if any, based on the unrealized appreciation on certain Fund securities and the related tax rates. At June 30, 2006, the Fund had an accrual for capital gains taxes of $2,694,961 of which $1,925,241 is included in the change in net unrealized appreciation (depreciation) on investments in the Statement of Operations. Capital gains taxes paid are included in net realized gain (loss) on investments in the Statement of Operations and were $71,913 for the year ended June 30, 2006. The fund subject to a Contribucao Provisoria sobre Movimentacoes Financeiras ("CPMF") tax which is applied to foreign exchange transactions representing capital inflows or outflows to the Brazilian market for certain securities. The CPMF tax has been included in the net realized gain (loss) on investments. D Expenses -- Expenses of the Trust that are not readily identifiable to a specific fund are allocated taking into consideration, among other things, the nature and type of expense and relative size of the funds. E Foreign Currency Translation -- Investment valuations, other assets, and liabilities initially expressed in foreign currencies are converted each business day into U.S. dollars based upon current exchange rates. Purchases and sales of foreign investment securities and income and expenses are converted into U.S. dollars based upon currency exchange rates prevailing on the respective dates of such transactions. Recognized gains or losses on investment transactions attributable to 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 Forward Foreign Currency Exchange Contracts -- The Fund 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 Fund will enter into forward contracts for hedging purposes. The forward foreign currency exchange contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized until such time as the contracts have been closed or offset. G Fund Redemption Fees -- Fund shares are subject to a redemption fee, at the time of exchange or redemption, equal to 2% of the net asset value of the shares exchanged or redeemed. This fee is not paid separately but is deducted automatically from the amount received in connection with a redemption or exchange. The redemption fee is retained by the Fund to defray the costs associated with the sale of portfolio securities to satisfy an exchange or redemption request. Shares acquired through the reinvestment of dividends and capital gains distributions paid to shareholders by the Fund are not subject to the redemption fee. Prior to April 1, 2005, Institutional shares were subject to both a purchase fee, at the time of purchase, and a redemption fee, at the time of exchange or redemption, equal to 1% of the net asset value of the shares purchased, exchanged or redeemed. Shareholders that held shares on March 31, 2005 are subject to only the 1% redemption fee on the sale or exchange of those shares because they paid the 1% purchase fee at the time those shares were purchased. Shareholders that purchased shares of the PIMCO PPA on or before June 30, 1998 and exchanged those shares for shares of the Fund in the February 6, 2004 merger of the Predecessor Fund into the Fund are not subject to the redemption fee on the sale or exchange of those shares. H Repurchase Agreements -- Under the terms of a repurchase agreement, the Fund's custodian takes possession of an underlying collateral security, the market value of which is at all times at least equal to the principal, including accrued interest, of the repurchase transaction. In the event of default or bankruptcy by the other party to the agreement, realization and/ or retention of the collateral by the Fund may be delayed or limited. I Indemnifications -- Under the Trust'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 Fund and shareholders are indemnified against personal liability for obligations of the Trust. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. J Other -- Investment transactions are accounted for on a trade date basis. Realized gains and losses are computed based on the specific identification of the securities sold. K 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. 2 Distributions to Shareholders -- It is the present policy of the Fund to make (a) at least one distribution annually of all or substantially all of its net investment income, and (b) at least one distribution annually of all or substantially all of its realized capital gains. Shareholders may reinvest all distributions in additional shares of the Fund at the net asset value as of the ex-dividend date. Distributions are paid in the form of additional shares or, at the election of the shareholder, in cash. The Fund distinguishes between distributions on a tax basis and a financial reporting basis. Accounting principles generally accepted in the United States of America require that only distributions in excess of tax basis earnings and profits be reported in the financial statements as a return of capital. Permanent differences between book and tax accounting relating to distributions are reclassified to paid-in-capital. The tax character of the distributions declared for the years ended June 30, 2006 and June 30, 2005 was as follows: Year Ended June 30, ------------------------ 2006 2005 -------------------------------------------------------------- Distributions declared from: -------------------------------------------------------------- Ordinary Income $9,490,505 $2,730,766 -------------------------------------------------------------- During the year ended June 30, 2006 distributions in excess of net investment income was increased by $340,805, and accumulated net realized loss on investments was decreased by $337,287 primarily due to differences between book and tax accounting for Passive Foreign Investment Companies and foreign currency transactions. This change had no effect on the net assets or the net asset value per share. At June 30, 2006, the components of distributable earnings (accumulated losses) on a tax basis were as follows: Undistributed ordinary income $ 7,423,691 --------------------------------------------------------------------------- Capital loss carryforward/post-October loss $14,919,815 --------------------------------------------------------------------------- The temporary differences between book and tax basis distributable earnings (accumulated losses) are primarily due to Passive Foreign Investment Companies and wash sales. 3 Shares of Beneficial Interest -------------------------------------------------------------------------------- The Fund's Declaration of Trust permits the Trustees to issues an unlimited number of full and fractional shares of beneficial interest (without par value). Transactions in Fund shares were as follows: Institutional Class Year ended June 30, ------------------------ 2006 2005 -------------------------------------------------------------- Sales 6,197,702 4,141,800 Reinvestments 258,371 94,215 Redemptions (1,291,410) (1,022,754) -------------------------------------------------------------- Net increase 5,164,663 3,213,261 -------------------------------------------------------------- 4 Investment Adviser Fee and Other Transactions with Affiliates -------------------------------------------------------------------------------- Under the terms of its investment advisory agreement with Eaton Vance Management (EVM), the Fund pays EVM a monthly advisory fee equal to an annual rate of 0.45% of the Fund's average daily net assets. For the year ended June 30, 2006, the advisory fee earned by EVM amounted to $2,031,849. Pursuant to a sub-advisory agreement, EVM pays a monthly sub-advisory fee to Parametric Portfolio Associates, an indirect, majority-owned subsidiary of EVM equal to an annual rate of 0.35% of the Fund's average daily net assets. EVM also serves as administrator to the Fund and receives from the Fund a monthly administration fee equal to an annual rate of 0.50% of the Fund's average daily net assets. The administration fee covers Trustees fees and most third party expenses, excluding taxes, interest and extraordinary expenses. For the year ended June 30, 2006, the Fund paid $2,257,611 for administrative services to EVM. EVM also serves as the sub-transfer agent to the Fund, at no additional cost to the Fund. Certain officers and Trustees of the Fund are officers of EVM or Parametric Portfolio Associates. The Fund did not pay any Trustees fees for the year ended June 30, 2006. 5 Investment Transactions -- Purchases and sales of investments, other than short-term obligations, aggregated $198,139,597 and $42,015,386, respectively, for the year ended June 30, 2006. 6 Federal Income Tax Basis of Unrealized Appreciation (Depreciation) -- The cost and unrealized appreciation (depreciation) in value of the investments owned at June 30, 2006, as computed on a federal income tax basis, were as follows: Aggregate Cost $ 355,163,069 --------------------------------------------------------------------------- Gross unrealized appreciation $219,268,794 Gross unrealized depreciation (12,457,598) --------------------------------------------------------------------------- Net unrealized appreciation $206,811,196 --------------------------------------------------------------------------- The net unrealized depreciation on foreign currency was $3,165 at June 30, 2006. 7 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 Fund, political or financial instability or diplomatic and other developments which could affect such investments. Foreign stock markets, while growing in volume and sophistication, are generally not as developed as those in the United States, and securities of some foreign issuers (particularly those 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. 8 Financial Instruments -- The Fund may trade in financial instruments with off-balance sheet risk in the normal course of its investing activities to assist in managing exposure to various market risks. These financial instruments include forward foreign currency exchange contracts and 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 Fund has in particular classes of financial instruments and does not necessarily represent the amounts potentially subject to risk. The measurement of the risks associated with these instruments is meaningful only when all related and offsetting transactions are considered. At June 30, 2006, there were no obligations outstanding under these financial instruments. 9 Recently Issued Accounting Pronouncements -- In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB Interpretation No. 48, ("FIN 48") "Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109." FIN 48 clarifies the accounting for uncertainty in income taxes recognized in accordance with FASB Statement No. 109, "Accounting for Income Taxes." This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Fund is currently evaluating the impact of applying the various provisions of FIN 48. Eaton Vance Tax-Managed Emerging Markets Fund as of June 30, 2006 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Trustees and Shareholders of Eaton Vance Tax-Managed Emerging Markets Fund: -------------------------------------------------------------------------------- In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Eaton Vance Tax- Managed Emerging Markets Fund, a series of Eaton Vance Series Trust II (the "Fund"), at June 30, 2006, and the results of its operations, the changes in its net assets and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2006 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP Boston, Massachusetts August 17, 2006 Eaton Vance Tax-Managed Emerging Markets FEDERAL TAX INFORMATION (Unaudited) The Form 1099-DIV you receive in January 2007 will show the tax status of all distributions paid to your account in calendar 2006. Shareholders are advised to consult their own tax advisor with respect to the tax consequences of their investment in the Fund. As required by the Internal Revenue Code regulations, shareholders must be notified within 60 days of the Fund's fiscal year end regarding the status of qualified dividend income for individuals and the foreign tax credit. QUALIFIED DIVIDEND INCOME. The Fund designates approximately $9,815,562, or up to the maximum amount of such dividends allowable pursuant to the Internal Revenue Code, as qualified dividend income eligible for the reduced tax rate of 15%. FOREIGN TAX CREDIT. The Fund paid foreign taxes of $1,177,335 and recognized foreign source income of $13,701,669. Eaton Vance Tax-Managed Emerging Markets BOARD OF TRUSTEES' ANNUAL APPROVAL OF THE INVESTMENT ADVISORY AGREEMENT CONT'D 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 continuance 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 Eaton Vance group of mutual funds (the "Eaton Vance Funds") held on March 27, 2006, the Board, including a majority of the Independent Trustees, voted to approve continuation of existing 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 the Special Committee of the Board, which is a committee comprised exclusively of Independent Trustees. Prior to making its recommendation, the Special Committee reviewed information furnished for a series of meetings of the Special Committee held in February and March 2006. Such information included, among other things, the following: Information about Fees, Performance and Expenses o An independent report comparing the advisory and related fees paid by each fund with fees paid by comparable funds; o An independent report comparing each fund's total expense ratio and its components to comparable funds; o An independent report comparing the investment performance of each fund to the investment performance of comparable funds over various time periods; o Data regarding investment performance in comparison to relevant peer groups of funds and appropriate indices; o Comparative information concerning fees charged by each adviser for managing other mutual funds and institutional accounts using investment strategies and techniques similar to those used in managing the fund; o Profitability analyses for each adviser with respect to each fund managed by it; Information about Portfolio Management o Descriptions of the investment management services provided to each fund, including the investment strategies and processes employed; o Information concerning the allocation of brokerage and the benefits received by each adviser as a result of brokerage allocation, including information concerning the acquisition of research through "soft dollar" benefits received in connection with the funds' brokerage, and the implementation of a soft dollar reimbursement program established with respect to the funds; o Data relating to portfolio turnover rates of each fund; o 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 o Reports detailing the financial results and condition of each adviser; o 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 compensation and responsibilities with respect to managing other mutual funds and investment accounts; o Copies of the Codes of Ethics of each adviser and its affiliates, together with information relating to compliance with and the administration of such codes; o Information concerning the resources devoted to compliance efforts undertaken by each adviser and its affiliates on behalf of the funds (including descriptions of various compliance programs) and their record of compliance with investment policies and restrictions, including policies with respect to market- timing, late trading and selective portfolio disclosure, and with policies on personal securities transactions; o Descriptions of the business continuity and disaster recovery plans of each adviser and its affiliates; Other Relevant Information o Information concerning the nature, cost and character of the administrative and other non-investment management services provided by Eaton Vance Management and its affiliates; o Information concerning management of the relationship with the custodian, subcustodians and fund accountants by each adviser or the funds' administrator; and o The terms of each advisory agreement. In addition to the information identified above, the Special Committee considered information provided from time to time by each adviser throughout the year at meetings of the Board and its committees. Over the course of the twelve month period ended March 31, 2006, the Board met nine times and the Special Committee, the Audit Committee and the Governance Committee, each of which is a Committee comprised solely of Independent Trustees, met eight, twelve and five times, respectively. At such meetings, the Trustees received, among other things, presentations by the portfolio managers and other investment professionals of each adviser relating to the investment performance of each fund and the investment strategies used in pursuing the fund's investment objective. For funds that invest through one or more underlying portfolios, the Board considered similar information about the portfolio(s) when considering the approval of 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 Special Committee was assisted throughout the contract review process by Goodwin Procter LLP, legal counsel for the Independent Trustees. The members of the Special Committee relied upon the advice of such counsel and their own business judgment in determining the material factors to be considered in evaluating each advisory and sub-advisory agreement and the weight to be given to each such factor. The conclusions reached with respect to each 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 Special Committee may have placed varying emphasis on particular factors in reaching conclusions with respect to each advisory and sub-advisory agreement. 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 Special Committee concluded that the continuance of the investment advisory agreement of the Eaton Vance Tax- Managed Emerging Markets Fund (the "Fund") with Eaton Vance Management (the "Adviser"), and the sub-advisory agreement with Parametric Portfolio Associates (the "Sub-adviser"), including their fee structures, is in the interests of shareholders and, therefore, the Special Committee recommended to the Board approval of the respective agreements. The Board accepted the recommendation of the Special Committee as well as the factors considered and conclusions reached by the Special Committee with respect to the agreement. Accordingly, the Board, including a majority of the Independent Trustees, voted to approve continuation of the advisory agreement and sub- advisory agreement for the Fund. NATURE, EXTENT AND QUALITY OF SERVICES In considering whether to approve the investment advisory agreement and sub-advisory agreement of the Fund, the Board evaluated the nature, extent and quality of services provided to the Fund by the Adviser and the Sub-adviser. The Board considered the Adviser's and Sub-adviser's management capabilities and investment process with respect to the types of investments held by the Fund, including the education, experience and number of its investment professionals and other personnel who provide portfolio management, investment research, and similar services to the Fund and whose responsibilities include supervising the Sub-adviser. The Board evaluated the abilities and experience of such investment personnel in analyzing factors such as special considerations relevant to investing in emerging markets. The Board noted the Adviser's in-house equity research capabilities and experience 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, including the compensation paid to recruit and retain investment personnel, and the time and attention devoted to each Fund in the complex by senior management. With respect to the Sub-adviser, the Board took into account the resources available to the Sub-adviser in fulfilling its duties under the sub-advisory agreement and the Sub-adviser's experience in managing equity portfolios. The Board reviewed the compliance programs of the Adviser and relevant affiliates thereof, including the Sub-adviser. Among other matters, the Board considered compliance and reporting matters relating to personal trading by investment personnel, selective disclosure of portfolio holdings, late trading, frequent trading, portfolio valuation, business continuity and the allocation of investment opportunities. The Board also evaluated the responses of the Adviser and its affiliates to requests from regulatory authorities such as the Securities and Exchange Commission and the National Association of Securities Dealers. 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 family of funds, including 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 and Sub-adviser, taken as a whole, are appropriate and consistent with the terms of the investment advisory and sub-advisory agreements, respectively. FUND PERFORMANCE The Board compared the Fund's investment performance to a relevant universe of similarly managed funds identified by an independent data provider and appropriate benchmark indices. The Board reviewed comparative performance data for the one-, three- and five-year period ended September 30, 2005 for the Fund. On the basis of the foregoing and other relevant information, the Board concluded that the performance of the Fund is satisfactory. MANAGEMENT FEES AND EXPENSES The Board reviewed contractual investment advisory fee rates, including administrative fee rates, payable by the Fund (referred to collectively as "management fees"). As part of its review, the Board considered the Fund's management fee (including administrative fees) and total expense ratio for the one-year period ended September 30, 2005, as compared to a group of similarly managed funds selected by an independent data provider. After reviewing the foregoing information, and in light of the nature, extent and quality of the services provided by the Adviser, the Board concluded with respect to the Fund that the management fees charged to the Fund for advisory and related services and the total expense ratio of the Fund are reasonable. PROFITABILITY The Board reviewed the level of profits realized by the Adviser and relevant affiliates thereof, including the Sub-adviser, in providing investment advisory and administrative services to the Fund and to all Eaton Vance Funds as a group. The Board considered the level of profits realized without regard to revenue sharing 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 benefits received by the Adviser and its affiliates in connection with its relationship with the Fund, including the benefits of research services that may be available to the Adviser or Sub-adviser as a result of securities transactions effected for the Fund 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, including the Sub-adviser, are reasonable. ECONOMIES OF SCALE In reviewing management fees and profitability, the Board also considered the extent to which the Adviser and its affiliates, including the Sub-adviser, on the one hand, and the Fund, on the other hand, can expect to realize benefits from economies of scale as the assets of the Fund increase. The Board acknowledged the difficulty in accurately measuring the benefits resulting from the economies of scale 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, including the Sub-adviser, may have been affected by such increases or decreases. Based upon the foregoing, the Board concluded that the benefits from economies of scale are currently being shared equitably by the Adviser and its affiliates, including the Sub- adviser, and the Fund. The Board also concluded that assuming reasonably foreseeable increase in the assets of the Portfolio, the Adviser and its affiliates, including the Sub-adviser, and the Fund can be expected to continue to share such benefits equitably. Eaton Vance Tax-Managed Emerging Markets Fund MANAGEMENT AND ORGANIZATION FUND MANAGEMENT. The Trustees of Eaton Vance Series Trust II (the Trust) are responsible for the overall management and supervision of the Trust's affairs. The Trustees and officers of the Trust are listed below. Except as indicated, each individual has held the office shown or other offices in the same company for the last five years. Trustees and officers of the Trust hold indefinite terms of office. The "noninterested Trustees" consist of those Trustees who are not "interested persons" of the Trust, as that term is defined under the 1940 Act. The business address of each Trustee and officer is The Eaton Vance Building, 255 State Street, Boston, Massachusetts, 02109. As used below, "EVC" refers to Eaton Vance Corp., "EV" refers to Eaton Vance, Inc., "EVM" refers to Eaton Vance Management, "BMR" refers to Boston Management and Research and "EVD" refers to Eaton Vance Distributors, Inc. EVC and EV are the corporate parent and trustee, respectively, of EVM and BMR. EVD is the Fund's principal underwriter and a wholly-owned subsidiary of EVM. Each officer affiliated with Eaton Vance may hold a position with other Eaton Vance affiliates that is comparable to his or her position with EVM listed below.
Term of Number of Position(s) Office and Portfolios in Fund with the Length of Principal Occupation(s) Complex Overseen Other Name and Date of Birth Trust Service During Past Five Years By Trustee(1) Directorships Held ----------------------------------------------------------------------------------------------------------------------------------- Interested Trustee James B. Hawkes Trustee Since 1998 Chairman, and Chief Executive 166 Director of EVC 11/9/41 Officer of BMR, EVC, EVM and EV; Director of EV; Vice President and Director of EVD. Trustee and/ or officer of 166 registered investment companies in the Eaton Vance Fund Complex. Mr. Hawkes is an interested person because of his positions with BMR, EVM, EVC and EV, which are affiliates of the Trust. Noninterested Trustee(s) Benjamin C. Esty Trustee Since 2005 Ray and Elizabeth Simmons 166 None 1/2/63 Professor of Business Administration, Harvard University Graduate School of Business Administration (since 2003). Formerly, Associate Professor, Harvard University Graduate School of Business Administration (2000-2003). Samuel L. Hayes, III Trustee and Trustee since Jacob H. Schiff Professor of 166 Director of 2/23/35 Chairman of 1989 and Investment Banking Emeritus, Tiffany & Co. the Board Chairman of the Harvard university Graduate (specialty Board since 2005 School of Business retailer) Administration. Director of Yakima Products Inc. (manufacturer of automotive accessories) (since 2001) and Director of Telect, Inc. (telecommunication services company) (since 2000). William H. Park Trustee Since 2003 Vice Chairman, Commercial 158 None 9/19/47 Industrial Finance Corp. (specialty finance company) (since 2005), formerly President and Chief Executive Officer, Prizm Capital Management, LLC (investment management firm) (2002-2005). Formerly, Executive Vice President and Chief Financial Officer, United Asset Management Corporation (a holding company owning institutional investment management firms) (1982-2001). Ronald A. Pearlman Trustee Since 2003 Professor of Law, Georgetown 166 None 7/10/40 University Law Center. Norton H. Reamer Trustee Since 1989 President, Chief Executive 166 None 9/21/35 Officer and a Director of Asset Management Finance Corp. (a specialty finance company serving the investment management industry) (since October 2003). President, Unicorn Corporation (an investment and financial advisory services company) (since September 2000). Chairman, Hellman, Jordan Management Co., Inc. (an investment management company) (2000-2003). Formerly, Advisory Director of Berkshire Capital Corporation (investment banking firm) (2002-2003). Lynn A. Stout Trustee Since 2001 Professor of Law, University 166 None 9/14/57 of California at Los Angeles School of Law (since July 2001). Formerly, Professor of Law, Georgetown University Law Center. Noninterested Trustee(s) Ralph F. Verni Trustee Since 2005 Consultant and private 166 None 1/26/43 investor. Term of Position(s) Office and with the Length of Principal Occupation(s) Name and Date of Birth Trust Service During Past Five Years ------------------------------------------------------------------------------------------------------------------------------ Principal Officers who are not Trustees Michael W. Weilheimer President Since 2002(2) Vice President of EVM and BMR. Officer of 9 registered investment 2/11/61 companies managed by EVM or BMR Thomas P. Huggins Vice Since 2000 Vice President of EVM and BMR. Officer of 4 registered investment 3/7/66 President companies managed by EVM or BMR Cliff Quisenberry, Jr. Vice Since 2003 Vice President and Director of Research and Product Development of 1/1/65 President Parametric Portfolio Associates ("Parametric"). Officer of 30 registered investment companies managed by EVM or BMR. Barbara E. Campbell Treasurer Since 2005(2) Vice President of EVM and BMR. Officer of 166 registered investment 4/1/45 companies managed by EVM or BMR. Alan R. Dynner Secretary Since 1997 Vice President, Secretary and Chief Legal Officer of BMR, EVM, EVD, EV 10/10/40 and EVC. Officer of 166 registered investment companies managed by EVM or BMR. Paul M. O'Neil Chief Since 2004 7/11/53 Compliance Vice President of EVM and BMR. Officer of 166 registered investment Officer companies managed by EVM or BMR. (1) Includes both master and feeder funds in a master-feeder structure. (2) Prior to 2002, Mr. Weilheimer served as Vice President of the Trust since 1996 Prior to 2005, Ms. Campbell served as Assistant Treasurer of the Trust since 1994. The SAI for the Fund includes additional information about the Trustees and officers of the Trust and can be obtained without charge by calling 1-800-225-6265.
This Page Intentionally Left Blank This Page Intentionally Left Blank This Page Intentionally Left Blank INVESTMENT ADVISER OF EATON VANCE TAX-MANAGED EMERGING MARKETS FUND EATON VANCE MANAGEMENT THE EATON VANCE BUILDING 255 STATE STREET BOSTON, MA 02109 SUB-ADVISER OF EATON VANCE TAX-MANAGED EMERGING MARKETS FUND PARAMETRIC PORTFOLIO ASSOCIATES 1151 FAIRVIEW AVENUE N. SEATTLE, WA 98109 ADMINISTRATOR OF EATON VANCE TAX-MANAGED EMERGING MARKETS FUND EATON VANCE MANAGEMENT THE EATON VANCE BUILDING 255 STATE STREET BOSTON, MA 02109 PRINCIPAL UNDERWRITER EATON VANCE DISTRIBUTORS, INC. THE EATON VANCE BUILDING 255 STATE STREET BOSTON, MA 02109 (617) 482-8260 CUSTODIAN STATE STREET BANK & TRUST CO. 225 FRANKLIN STREET BOSTON, MA 02110 TRANSFER AGENT PFPC INC. ATTN: EATON VANCE FUNDS P.O. BOX 9653 PROVIDENCE, RI 02940-9653 (800) 262-1122 EATON VANCE TAX-MANAGED EMERGING MARKETS FUND THE EATON VANCE BUILDING 255 STATE STREET BOSTON, MA 02109 2050-8/06 TMEMSRC 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 Vice Chairman of Commercial Industrial Finance Corp (specialty finance company). Previously, he served as President and Chief Executive Officer of Prizm Capital Management, LLC (investment management firm) and 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 Eaton Vance Tax-Managed Emerging Markets Fund (the "Fund") is a series of Eaton Vance Series Trust II (the "Trust"), a Massachusetts business trust. The Trust is registered under the Investment Company Act of 1940 as an open-end management investment company. Including the Fund, the Trust contains a total of 2 series (collectively, the "Series"). This Form N-CSR relates to the Fund's annual report. The following tables present the aggregate fees billed to the Fund for the fiscal years ended June 30, 2005 and June 30, 2006 by the Fund's principal accountant for professional services rendered for the audit of the Fund's annual financial statements and fees billed for other services rendered by the principal accountant during those periods. Eaton Vance Tax-Managed Emerging Markets Fund FISCAL YEARS ENDED 6/30/05 6/30/06 ------------------------------------------------------------------------------- Audit Fees $ 85,000 $ 71,200 Audit-Related Fees((1)) $ 0 $ 0 Tax Fees(2) $ 13,250 $ 14,025 All Other Fees(3) $ 0 $ 0 -------------------------------------------------- Total $ 98,250 $ 85,225 ================================================== (1) Audit-related fees consist of the aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit of financial statements and are not reported under the category of audit fees. (2) Tax fees consist of the aggregate fees billed for professional services rendered by the principal accountant relating to tax compliance, tax advice, and tax planning and specifically include fees for tax return preparation. (3) All other fees consist of the aggregate fees billed for products and services provided by the principal accountant other than audit, audit-related, and tax services. The various Series comprising the Trust have differing fiscal year ends. The Fund's fiscal year end is June 30. The current fiscal year end of Eaton Vance Income Fund of Boston, the other Series in the Trust, is October 31. The following table presents the aggregate audit, audit-related, tax, and other fees billed to all of the Series in the Trust by the Series's principal accountant for the last two fiscal years/periods of each Series. FISCAL YEARS/PERIODS 10/31/04 6/30/05 10/31/05 6/30/06 ENDED AUDIT FEE $ 35,650 $85,000 $22,900 $ 71,200 AUDIT RELATED FEES(1) $ 0 $ 0 $0 $ 0 TAX FEES(2) $ 18,675 $13,250 $14,325 $14,025 ALL OTHER FEES(3) $ 0 $ 0 $0 $ 0 TOTAL $ 54,325 $ 98,250 $37,225 $85,225 (1) Audit-related fees consist of the aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit of financial statements and are not reported under the category of audit fees. (2) Tax fees consist of the aggregate fees billed for professional services rendered by the principal accountant relating to tax compliance, tax advice, and tax planning and specifically include fees for tax return preparation. (3) All other fees consist of the aggregate fees billed for products and services provided by the principal accountant other than audit, audit-related, and tax services. (e)(1) The registrant's audit committee has adopted policies and procedures relating to the pre-approval of services provided by the registrant's principal accountant (the "Pre-Approval Policies"). The Pre-Approval Policies establish a framework intended to assist the audit committee in the proper discharge of its pre-approval responsibilities. As a general matter, the Pre-Approval Policies (i) specify certain types of audit, audit-related, tax, and other services determined to be pre-approved by the audit committee; and (ii) delineate specific procedures governing the mechanics of the pre-approval process, including the approval and monitoring of audit and non-audit service fees. Unless a service is specifically pre-approved under the Pre-Approval Policies, it must be separately pre-approved by the audit committee. The Pre-Approval Policies and the types of audit and non-audit services pre-approved therein must be reviewed and ratified by the registrant's audit committee at least annually. The registrant's audit committee maintains full responsibility for the appointment, compensation, and oversight of the work of the registrant's principal accountant. (e)(2) No services described in paragraphs (b)-(d) above were approved by the registrant's audit committee pursuant to the "de minimis exception" set forth in Rule 2-01(c)(7)(i)(C) of Regulation S-X. (f) Not applicable. (g) The following table presents (i) the aggregate non-audit fees (i.e., fees for audit-related, tax, and other services) billed for services rendered to all of the Series in the Trust by each Series's respective principal accountant (PricewaterhouseCoopers LLP) for the last two fiscal years/periods of each Series; and (ii) the aggregate non-audit fees (i.e., fees for audit-related, tax, and other services) billed for services rendered to the Eaton Vance organization by PricewaterhouseCoopers LLP for the last two fiscal years/periods of each Series. FISCAL YEARS ENDED 10/31/04 6/30/05 10/31/05 6/30/06 REGISTRANT(1) $18,675 $13,250 $14,325 $14,025 EATON VANCE(2) $84,490 $98,305 $33,235 $83,416 (1) Includes all of the Series in the Trust. (2) Various subsidiaries of Eaton Vance Corp. act in either an investment advisory and/or service provider capacity with respect to the Series. (h) The registrant's audit committee has considered whether the provision by the registrant's principal accountants of non-audit services to the registrant's investment adviser and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant that were not pre-approved pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X is compatible with maintaining the principal accountants' independence. 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. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES Not required in this filing. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not required in this filing. 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. 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. Eaton Vance Series Trust II By: /s/ Michael W. Weilheimer ---------------------------- Michael W. Weilheimer President Date: August 15, 2006 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/ Barbara E. Campbell ---------------------------- Barbara E. Campbell Treasurer Date: August 15, 2006 By: /s/ Michael W. Weilheimer ---------------------------- Michael W. Weilheimer President Date: August 15, 2006