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

811-21142

 

Eaton Vance Insured Municipal Bond Fund

(Exact name of registrant as specified in charter)

 

The Eaton Vance Building, 255 State Street, Boston, Massachusetts

 

02109

(Address of principal executive offices)

 

(Zip code)

 

Alan R. Dynner
The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109

(Name and address of agent for service)

 

Registrant’s telephone number, including area code:

(617) 482-8260

 

 

Date of fiscal year end:

September 30

 

 

Date of reporting period:

September 30, 2005

 

 



 

Item 1. Reports to Stockholders

 



Annual Report September 30, 2005

EATON VANCE
INSURED
MUNICIPAL
BOND
FUNDS

CLOSED-END FUNDS:

Insured Municipal

Insured California

Insured New York



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:

•  Only such information received from you, through application forms or otherwise, and information about your Eaton Vance fund transactions will be collected. This may include information such as name, address, social security number, tax status, account balances and transactions.

•  None of such information about you (or former customers) will be disclosed to anyone, except as permitted by law (which includes disclosure to employees necessary to service your account). In the normal course of servicing a customer's account, Eaton Vance may share information with unaffiliated third parties that perform various required services such as transfer agents, custodians and broker/dealers.

•  Policies and procedures (including physical, electronic and procedural safeguards) are in place that are designed to protect the confidentiality of such information.

•  We reserve the right to change our Privacy Policy at any time upon proper notification to you. Customers may want to review our 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 it's underlying Portfolio (if applicable) will file a schedule of its portfolio holdings on Form N-Q with the SEC for the first and third quarters of each fiscal year. The Form N-Q will be available on the Eaton Vance website www.eatonvance.com, by calling Eaton Vance at 1-800-262-1122 or in the EDGAR database on the SEC's website at www.sec.gov. Form N-Q may also be reviewed and copied at the SEC's public reference room in Washington, D.C. (call 1-800-732-0330 for information on the operation of the public reference room).

Proxy Voting. From time to time, funds are required to vote proxies related to the securities held by the funds. The Eaton Vance Funds or their underlying Portfolios (if applicable) vote proxies according to a set of policies and procedures approved by the Funds' and Portfolios' Boards. You may obtain a description of these policies and procedures and information on how the Funds or Portfolios voted proxies relating to Portfolio securities during the most recent 12 month period ended June 30, without charge, upon request, by calling 1-800-262-1122. This description is also available on the SEC's website at www.sec.gov.



 

Eaton Vance Insured Municipal Bond Funds as of September 30, 2005

LETTER TO SHAREHOLDERS

 

Cynthia J. Clemson

 

Robert B. MacIntosh

 

Like all fixed-income markets, the municipal bond market responds to many factors, from changes in interest rates and economic trends to fluctuations in municipal bond issuance. Another key variable is the policy of the Federal Reserve, the nation’s central bank, known popularly as “The Fed.” The Fed’s policies are important to the nation’s economy and markets.

 

Founded in the wake of crisis, the Federal Reserve plays a vital role...

 

The Federal Reserve System was established by the Federal Reserve Act of 1913 in the wake of a series of financial crises, the most recent of which – the Panic of 1907 – had caused bank failures, a rash of bankruptcies, a dramatic loss of confidence and a severe economic downturn. Congress was determined to create a central bank that provided a vigilant monetary policy, price stability, a more elastic currency and more careful supervision over the nation’s banks.

 

The Open Market Committee: influencing the money supply and credit conditions...

 

The Fed has a number of tools at its disposal to adjust monetary policy. Of these, the most commonly used tools are open market operations. The Federal Open Market Committee (FOMC) meets regularly to review inflation, credit conditions and the overall health of the economy. The Fed uses its own research, as well as that of other key economic agencies, to review its various policy options. Treasury, corporate and municipal bond investors alike eagerly await the transcripts of FOMC meetings for a hint of future interest rate trends.

 

If it deems a change necessary in short-term rates, the Fed will announce an adjustment to its target for the Federal Funds rate – its primary market instrument. To effect that change, the FOMC issues a directive to the trading desk of the Federal Reserve Bank of New York, whose responsibility it is to implement the policy.

 

Open market operations:

The Fed intervenes...

 

If the Fed sees weakness in the economy and little threat of inflation, it may make outright purchases of Treasury securities – either from the “street” or privately from foreign central banks – thus adding reserves to the banking system. This action tends to lower interest rates, increase loans and stimulate economic activity. In so doing, the Fed is said to be easing monetary policy.

 

On the other hand, if the Fed sees the economy overheating and inflation looming, it may sell Treasury securities, thus draining reserves from the system. This action tends to raise rates, discourage consumer and business borrowing and dampen economic activity. In this case, the Fed is said to be tightening monetary policy.

 

While changes in Fed policy primarily affect short-term rates, long-term rates are determined by inflationary expectations. However, the Fed’s actions can have a significant effect on market psychology and, over time, impact market rates across the borrowing spectrum – for homebuyers seeking mortgages, businesses seeking bank loans and municipal bond issuers.

 

Fed-watching: A continuing pre-occupation of the market...

 

Interpreting the Federal Reserve’s actions has long been of keen interest to bond market investors. Until the mid-1990s, analysts needed to keep daily tabs on bank reserves and the Fed’s daily open market activity to determine a change in monetary policy. Starting in February 1994, however, the Fed began to indicate specifically its target Federal Funds rate. That marked a significant change, as analysts were now free to focus less on current policy and more on future potential changes in policy.

 

Throughout its history, the Federal Reserve has contributed to a more stable and safer monetary system. As that history unfolds, investors will surely continue to monitor its activities closely.

 

 

Sincerely,

 

 

 

Cynthia J. Clemson

 

Robert B. MacIntosh

Co-Director

 

Co-Director

Municipal Investments

 

Municipal Investments

 

 

 

 

 

November 9, 2005

 

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.

 

2



 

MARKET RECAP

 

The U.S. economy continued to generate moderate growth during the year ended September 30, 2005, although surging energy prices and high interest rates were a continuing concern for investors. Late in the period, the economy was faced with new challenges resulting from Hurricane Katrina and its potential impact on energy and commodity supplies.

 

The economy has remained on solid footing in 2005...

 

The nation’s Gross Domestic Product grew at a rate of 3.8% in the third quarter of 2005, according to preliminary Commerce Department figures, following gains of 3.3% in the second quarter and 3.8% in the first quarter. Manufacturing reported a mixed picture, with overall factory activity accelerating somewhat, while areas such as durable goods, metals and textiles remained weak. Consumer spending declined, as soaring energy costs took their toll. While the housing sector showed signs of strain in selected markets due to rising interest rates, the overall housing market remained strong.

 

With consumers tightening their belts, the burden shifted to businesses. However, the outlook for capital spending was clouded, as businesses remained wary of investing in new equipment, facilities and software in a period of rising energy costs and higher interest rates.

 

Gulf Coast state economies were dealt a severe blow by Hurricane Katrina...

 

In the waning days of the fiscal year, Hurricane Katrina struck states along the Gulf Coast. The storm inflicted a catastrophic blow to Louisiana and less dramatic damage on Mississippi, Alabama and Florida. While the economies of the affected states will no doubt suffer in the short run, the national economy is also likely to feel some impact from damage to key ports and oil refineries. The pace of the region’s recovery is unclear at this writing, and will likely remain a concern, especially as heating fuel demand rises in coming months.

 

Municipal bond yields exceeded Treasury yields

 

 

Principal and interest payments of Treasury securities are guaranteed by the U.S. government.

 


*GO yields are a compilation of a representative variety of general obligations and are not necessarily representative of a fund’s yield. Statistics as of September 30, 2005.

 

Past performance is no guarantee of future results.

Source: Bloomberg, L.P.

 

The Federal Reserve continued its policy of tightening credit during the fiscal year...

 

Inflation accelerated somewhat during the period, an increase apparent not only in core energy costs, but also in finished products, a sign that producers are passing their higher energy costs along to consumers. The Federal Reserve hiked short-term interest rates, suggesting it will continue to raise rates in an effort to keep the economy from growing too quickly and keep inflation under control. Beginning in June 2004, the Fed increased its Federal Funds rate – a key short-term interest rate barometer – on twelve consecutive occasions, raising that benchmark from 1.00% to 4.00%, including its most recent rate hike in November 2005.

 

Against this backdrop, the municipal bond market generated solid gains for the period. For the year ended September 30, 2005, the Lehman Brothers Municipal Bond Index – an unmanaged market index of municipal bonds – had a total return of 4.05%.*

 


*                                         It is not possible to invest directly in an Index. The Index’s total return does not reflect expenses that would have been incurred if an investor individually purchased or sold the securities represented in the Index.

 

The views expressed throughout this report are those of the various portfolio managers 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 Eaton Vance disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for an Eaton Vance fund are based on many factors, may not be relied on as an indication of trading intent on behalf of any Eaton Vance fund.

 

3



 

INVESTMENT UPDATE

 

The Fund

 

        Based on share price (the Fund is a closed-end fund traded on the American Stock Exchange), the Fund had a total return of 14.98% for the year ended September 30, 2005. That return was the result of an increase in share price from $13.95 on September 30, 2004 to $15.05 on September 30, 2005 and the reinvestment of $0.926 in monthly dividends.(1)

 

        Based on net asset value, the Fund had a total return of 10.70% for the year ended September 30, 2005. That return was the result of an increase in net asset value per share from $14.75 on September 30, 2004 to $15.32 on September 30, 2005, and the reinvestment of all distributions.

 

        For comparison, the Lehman Brothers Municipal Bond Index – an unmanaged market index of municipal bonds – had a total return of 4.05% for the year ended September 30, 2005.(2)

 

        Based on the last dividend of the fiscal year and a share price of $15.05, the Fund had a market yield of 5.92% at September 30, 2005.(3) The Fund’s market yield is equivalent to a taxable yield of 9.11%.(4)

 

        Robert B. MacIntosh became portfolio manager of the Fund upon Thomas J. Fetter’s retirement on November 1, 2005.

 

Rating Distribution(5),(6)

 

By total investments


* Private insurance does not decrease the risk of principal fluctuations associated with this investment.

 

Robert B. MacIntosh

Portfolio Manager

 

Management Discussion

 

        The U.S. economy continued to grow, although rising energy costs and a severe hurricane season hurt consumer spending. Manufacturing was uneven, especially the struggling auto industry. Construction remained a bright spot. The U.S. jobless rate was 5.1% in September 2005, down from 5.4% a year ago.

 

        Insured* transportation bonds represented the Fund’s largest sector weighting at September 30, 2005. The Fund’s investments included issuers that have responsibility for highways, turnpikes, monorails and marine terminals. Because they are backed by user fees, the bonds enjoy a regular revenue source.

 

        Insured* general obligations (GOs) remained large investments for the Fund. The Fund’s investments included GOs of states, large cities and school districts we believe are in sound financial condition and have relatively strong economic fundamentals.

 

        Some coupons in the 5.00% to 5.25% range were among the Fund’s lagging performers, as these current coupon bonds were less attractive to investors. In addition, with spreads narrowing, the Fund was helped somewhat by its several investments in A-rated and BBB-rated bonds.

 

        At September 30, 2005, the Fund had leverage in the amount of approximately 36% of the Fund’s total assets. The Fund uses leverage through the issuance of preferred shares. Use of financial leverage creates an opportunity for increased income but, at the same time, creates special risks (including the likelihood of greater volatility of net asset value and market price of common shares).

 

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value or share 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. Fund performance during certain periods reflects the strong bond market performance and/or the strong performance of bonds held during those periods. This performance is not typical and may not be repeated. 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 Information

as of September 30, 2005

 

Performance(7)

 

Average Annual Total Return (by share price, American Stock Exchange)

 

 

 

One Year

 

14.98

%

Life of Fund (8/30/02)

 

8.26

 

 

Average Annual Total Return (by net asset value)

 

 

 

One Year

 

10.70

%

Life of Fund (8/30/02)

 

8.89

 

 


(1)       A portion of the Fund’s income may be subject to federal income tax and/or alternative minimum tax. Income may be subject to state income tax.

(2)  It is not possible to invest directly in an Index. The Index’s total return does not reflect the expenses that would have been incurred if an investor individually purchased or sold the securities represented in the Index.

(3)       The Fund’s market yield is calculated by dividing the last dividend of the fiscal year per share by the share price at the end of the period and annualizing the result.

(4)       Taxable-equivalent yield assumes a maximum 35.00% federal income tax rate. A lower tax rate would result in a lower tax-equivalent figure.

(5)       Rating Distribution may not be representative of the Fund’s current or future investments.

(6)       Rating Distribution is determined by dividing the total market value of the issues by the total investments of the Fund.

(7)       Returns are historical and are calculated by determining the percentage change in share price or net asset value with all distributions reinvested. Performance results reflect the effect of leverage resulting from the Fund’s issuance of Auction Preferred Shares.

 

4



 

Eaton Vance Insured California Municipal Bond Fund as of September 30, 2005

INVESTMENT UPDATE

 

The Fund

 

        Based on share price (the Fund is a closed-end fund traded on the American Stock Exchange), the Fund had a total return of 7.77% for the year ended September 30, 2005. That return was the result of an increase in share price from $13.73 on September 30, 2004 to $13.92 on September 30, 2005 and the reinvestment of $0.853 in monthly dividends.(1)

 

        Based on net asset value, the Fund had a total return of 9.58% for the year ended September 30, 2005. That return was the result of an increase in net asset value per share from $14.25 on September 30, 2004 to $14.69 on September 30, 2005, and the reinvestment of all distributions.

 

        For comparison, the Lehman Brothers Municipal Bond Index – an unmanaged market index of municipal bonds – had a total return of 4.05% for the year ended September 30, 2005.(2)

 

        Based on the last dividend of the fiscal year and a share price of $13.92, the Fund had a market yield of 5.56% at September 30, 2005.(3) The Fund’s market yield is equivalent to a taxable yield of 9.43%.(4) 

 

Rating Distribution(5),(6)

 

By total investments

 


* Private insurance does not decrease the risk of principal fluctuations associated with this investment.

 

Cynthia J. Clemson

Portfolio Manager

 

Management Discussion

 

        California’s job growth strengthened in 2005, with employment rising above the pre-2001 recession peak. The construction sector was the primary engine of growth, generating nearly 60% of new jobs. Financial services and retail sectors also generated strong job creation. The state’s September 2005 jobless rate was 5.1%, down from 6.1% a year ago.

 

        Insured* general obligations (GOs) constituted the Fund’s largest sector weighting at September 30, 2005. With its financial profile having improved, the state’s credit rating was upgraded in the summer of 2005. The Fund’s investments were diversified among local school district and community college district bonds, which have benefited from an improved economy.

 

        Insured* lease revenue/certificates of participation bonds were major holdings. These bonds provided lease financing for various municipal projects, including a civic center, a medical treatment facility and a public administration building.

 

        Management continued to look for relative value opportunities in the market. The Fund continued to be very diversified with regard to issuer and coupons. Over the past fiscal year, some 5.00% coupons and zero coupons have lagged in performance.

 

        At September 30, 2005, the Fund had leverage in the amount of approximately 38% of the Fund’s total assets. The Fund uses leverage through the issuance of preferred shares. Use of financial leverage creates an opportunity for increased income but, at the same time, creates special risks (including the likelihood of greater volatility of net asset value and market price of common shares).

 

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value or share 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 Information

as of September 30, 2005

 

Performance(7)

 

Average Annual Total Return (by share price, American Stock Exchange)

 

 

 

One Year

 

7.77

%

Life of Fund (8/30/02)

 

5.45

 

 

Average Annual Total Return (by net asset value)

 

 

 

One Year

 

9.58

%

Life of Fund (8/30/02)

 

7.30

 

 


(1)       A portion of the Fund’s income may be subject to federal income tax and/or alternative minimum tax and state income tax.

(2)       It is not possible to invest directly in an Index. The Index’s total return does not reflect the expenses that would have been incurred if an investor individually purchased or sold the securities represented in the Index.

(3)       The Fund’s market yield is calculated by dividing the last dividend of the fiscal year per share by the share price at the end of the period and annualizing the result.

(4)       Taxable-equivalent yield assumes a maximum 41.05% combined federal and state income tax rate. A lower tax rate would result in a lower tax-equivalent figure.

(5)       Rating Distribution may not be representative of the Fund’s current or future investments.

(6)       Rating Distribution is determined by dividing the total market value of the issues by the total investments of the Fund.

(7)       Returns are historical and are calculated by determining the percentage change in share price or net asset value with all distributions reinvested. Performance results reflect the effect of leverage resulting from the Fund’s issuance of Auction Preferred Shares.

 

5



 

Eaton Vance Insured New York Municipal Bond Fund as of September 30, 2005

INVESTMENT UPDATE

 

The Fund

 

        Based on share price (the Fund is a closed-end fund traded on the American Stock Exchange), the Fund had a total return of 4.88% for the year ended September 30, 2005. That return was the result of a decrease in share price from $13.86 on September 30, 2004 to $13.68 on September 30, 2005 and the reinvestment of $0.844 in monthly dividends.(1)

 

        Based on net asset value, the Fund had a total return of 8.77% for the year ended September 30, 2005. That return was the result of an increase in net asset value per share from $14.39 on September 30, 2004 to $14.73 on September 30, 2005, and the reinvestment of all distributions.

 

        For comparison, the Lehman Brothers Municipal Bond Index – an unmanaged market index of municipal bonds – had a total return of 4.05% for the year ended September 30, 2005.(2)

 

        Based on the last dividend of the fiscal year and a share price of $13.68, the Fund had a market yield of 5.60% at September 30, 2005.(3) The Fund’s market yield is equivalent to a taxable yield of 9.33%.(4)

 

        Craig Brandon became portfolio manager of the Fund upon Thomas J. Fetter’s retirement on November 1, 2005.

 

Rating Distribution(5),(6)

 

By total investments

 

 


* Private insurance does not decrease the risk of principal fluctuations associated with this investment.

 

Craig Brandon

Portfolio Manager

 

Management Discussion

 

        New York’s job outlook improved in 2005. The service sector remained the primary source of job creation, with housing and construction also providing a lift. The manufacturing sector continued its slump, although the pace of job loss was less dramatic than in recent years. The state’s September 2005 jobless rate was 5.2%, down from 5.6% a year ago.

 

        Insured* private education bonds were a major investment for the Fund. Investments included industrial development agency bonds and dormitory authority bonds for some of the state’s leading undergraduate and law school programs.

 

        Insured* transportation bonds were the Fund’s largest sector weightings at September, 2005. Investments focused on a bridge and tunnel authority, New York City’s rapid transit system and the City’s metropolitan port authority.

 

        Management continued to emphasize relative value to enhance income potential. Adjustments to coupon structure included the addition of zero-coupon bonds and updated call protection to improve the Fund’s upside potential. Although the Fund outpaced its benchmark, performance was constrained by its low weighting of lower-rated, investment-grade bonds.

 

        At September 30, 2005, the Fund had leverage in the amount of approximately 37% of the Fund’s total assets. The Fund uses leverage through the issuance of preferred shares. Use of financial leverage creates an opportunity for increased income but, at the same time, creates special risks (including the likelihood of greater volatility of net asset value and market price of common shares).

 

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value or share 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 Information

as of September 30, 2005

 

Performance(7)

 

Average Annual Total Return (by share price, American Stock Exchange)

 

 

 

One Year

 

4.88

%

Life of Fund (8/30/02)

 

4.78

 

 

Average Annual Total Return (by net asset value)

 

 

 

One Year

 

8.77

%

Life of Fund (8/30/02)

 

7.31

 

 


(1)       A portion of the Fund’s income may be subject to federal income tax and/or alternative minimum tax and state income tax.

(2)       It is not possible to invest directly in an Index. The Index’s total return does not reflect the expenses that would have been incurred if an investor individually purchased or sold the securities represented in the Index.

(3)          The Fund’s market yield is calculated by dividing the last dividend of the fiscal year per share by the share price at the end of the period and annualizing the result.

(4)       Taxable-equivalent yield assumes a maximum 40.01% combined federal and state income tax rate. A lower tax rate would result in a lower tax-equivalent figure.

(5)       Rating Distribution may not be representative of the Fund’s current or future investments.

(6)       Rating Distribution is determined by dividing the total market value of the issues by the total investments of the Fund.

(7)       Returns are historical and are calculated by determining the percentage change in share price or net asset value with all distributions reinvested. Performance results reflect the effect of leverage resulting from the Fund’s issuance of Auction Preferred Shares.

 

6



Eaton Vance Insured Municipal Bond Fund as of September 30, 2005

PORTFOLIO OF INVESTMENTS

  Tax-Exempt Investments - 162.7%        
Principal Amount
(000's omitted)
  Security   Value  
  Escrowed / Prerefunded - 3.6%        
$ 32,500     Golden Tobacco Securitization Corp., CA,
Prerefunded to 6/1/10, 5.375%, 6/1/28
  $ 35,490,325    
            $ 35,490,325    
  General Obligations - 9.5%        
$ 10,000     California, 4.75%, 6/1/35   $ 10,034,000    
  15,175     California, 5.00%, 6/1/34     15,733,288    
  12,500     California, 5.25%, 4/1/30     13,301,500    
  3,750     California, 5.25%, 4/1/34     3,972,712    
  13,250     California, 5.50%, 11/1/33     14,517,097    
  19,500     New York City, NY, 5.25%, 1/15/33     20,566,650    
  15,000     Puerto Rico Public Buildings Authority,
Commonwealth Guaranteed, 5.25%, 7/1/29
    15,916,950    
            $ 94,042,197    
  Hospital - 4.7%        
$ 11,000     California Health Facilities Financing Authority,
(Cedars Sinai Medical Center), 5.00%, 11/15/34
  $ 11,217,580    
  3,000     California Statewide Communities Development Authority,
(Daughters of Charity Health System), 5.25%, 7/1/35
    3,075,270    
  6,200     Camden County, NJ, Improvement Authority,
(Cooper Health), 5.75%, 2/15/34
    6,531,452    
  2,600     Cuyahoga County, OH,
(Cleveland Clinic Health System), 5.50%, 1/1/29
    2,759,640    
  3,900     Hawaii Pacific Health, 5.60%, 7/1/33     4,064,034    
  5,525     Highlands County, FL, Health Facilities Authority,
(Adventist Health System), 5.375%, 11/15/35
    5,770,752    
  8,500     Lehigh County, PA, General Purpose Authority,
(Lehigh Valley Health Network), 5.25%, 7/1/32
    8,777,780    
  2,500     South Miami, FL, Health Facility Authority,
(Baptist Health), 5.25%, 11/15/33
    2,591,375    
  1,400     Washington County Hospital, AR,
(Washington Regional Medical Center), 5.00%, 2/1/30
    1,400,420    
            $ 46,188,303    
  Insured-Electric Utilities - 14.4%        
$ 13,000     Burlington, KS, PCR, (Kansas Gas & Electric Co.),
(MBIA), 5.30%, 6/1/31
  $ 13,928,850    
  21,355     Chelan County, WA, Public Utility District No. 1,
(Columbia River), (MBIA), 0.00%, 6/1/27
    7,185,744    
  9,000     Jacksonville Electric Authority, FL, Electric System Revenue,
(FSA), 4.75%, 10/1/34
    9,090,810    

 

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-Electric Utilities (continued)  
$ 18,000     Maricopa County, AZ, Pollution Control Corp.,
(El Paso Electric Co.), (FGIC), 4.80%, 8/1/40
  $ 18,079,380    
  2,625     Municipal Energy Agency, NE, (Power Supply System),
(FSA), 5.00%, 4/1/36
    2,726,246    
  25,000     Omaha Public, NE, Power District,
(FGIC), 4.25%, 2/1/35 (1)
    23,693,750    
  60,755     South Carolina Public Service Authority, (FSA),
5.125%, 1/1/37
    63,203,426    
  10,650     Southern Minnesota Municipal Power Agency, (MBIA),
0.00%, 1/1/22
    5,085,588    
            $ 142,993,794    
Insured-Escrowed / Prerefunded - 2.7%  
$ 10,000     Detroit, MI, School District, Prerefunded to 5/1/13,
(FGIC), 5.00%, 5/1/32(2)
  $ 10,899,700    
  14,375     Detroit, MI, School District, Prerefunded to 5/1/13,
(FGIC), 5.25%, 5/1/28(2)
    15,904,644    
            $ 26,804,344    
Insured-General Obligations - 29.4%  
$ 3,975     Alvin, TX, Independent School District,
(MBIA), 3.25%, 2/15/27
  $ 3,209,812    
  60,000     California, (XLCA), 5.00%, 10/1/28     61,839,600    
  15,530     Chicago, IL, Board of Education,
(Chicago School Reform), (FGIC), 0.00%, 12/1/30
    4,569,547    
  41,300     Chicago, IL, Board of Education, (Chicago School Reform),
(FGIC), 0.00%, 12/1/21
    19,671,603    
  10,000     Chicago, IL, Board of Education, (FGIC), 0.00%, 12/1/31     2,788,600    
  10,500     Chicago, IL, Board of Education, (FGIC), 0.00%, 12/1/29     3,243,450    
  16,115     Florida Department of Transportation, (Right of Way),
(FSA), 5.00%, 7/1/31
    16,945,889    
  16,920     Florida Department of Transportation, (Right of Way),
(FSA), 5.00%, 7/1/32
    17,785,458    
  11,790     Frisco, TX, Independent School District, (MBIA),
4.00%, 7/15/36
    10,364,707    
  13,180     Georgia, (MBIA), 2.00%, 9/1/24     8,966,354    
  20,425     Kane, Cook and Du Page Counties, IL, School
District No. 46, (AMBAC), 0.00%, 1/1/21
    10,070,955    
  50,650     Kane, Cook and Du Page Counties, IL, School
District No. 46, (AMBAC), 0.00%, 1/1/22
    23,692,044    
  19,500     Massachusetts, (AMBAC), 5.25%, 8/1/28     22,191,780    
  4,580     Navasota, TX, Independent School District,
(FGIC), 4.50%, 8/15/30
    4,456,065    
  4,945     New Caney, TX, Independent School District,
(FSA), 4.75%, 2/15/35
    4,964,285    
  13,000     Philadelphia, PA, School District, (FGIC), 5.25%, 6/1/34     13,909,350    
  8,925     Phoenix, AZ, (AMBAC), 3.00%, 7/1/28     7,025,046    

 

See notes to financial statements

7



Eaton Vance Insured Municipal Bond Fund as of September 30, 2005

PORTFOLIO OF INVESTMENTS CONT'D

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-General Obligations (continued)  
$ 3,240     Pima County, AZ, (FSA), 3.50%, 7/1/19   $ 2,977,592    
  20,750     Schaumburg, IL, (FGIC), 5.00%, 12/1/38     21,529,162    
  21,300     Washington, (Motor Vehicle Fuel), (MBIA),
0.00%, 6/1/25
    8,330,856    
  21,125     Washington, (Motor Vehicle Fuel), (MBIA),
0.00%, 6/1/26
    7,829,770    
  21,070     Washington, (Motor Vehicle Fuel), (MBIA),
0.00%, 6/1/27
    7,396,202    
  21,510     Washington, (Motor Vehicle Fuel), (MBIA),
0.00%, 6/1/28
    7,146,913    
            $ 290,905,040    
Insured-Housing - 1.5%  
$ 14,170     Virginia Housing Development Authority,
(MBIA), 5.375%, 7/1/36
  $ 14,617,347    
            $ 14,617,347    
Insured-Lease Revenue / Certificates of
Participation - 5.7%
 
$ 12,010     Anaheim, CA, Public Financing Authority Lease Revenue,
(FSA), 5.00%, 3/1/37
  $ 12,238,430    
  42,795     San Jose, CA, Financing Authority, (Civic Center),
(AMBAC), 5.00%, 6/1/37
    44,105,383    
            $ 56,343,813    
Insured-Other Revenue - 0.6%  
$ 4,000     Golden Tobacco Securitization Corp., CA, (FGIC),
5.00%, 6/1/38
  $ 4,159,960    
  1,735     Maine HEFA, (Maine Life Care Retirement Community),
(AMBAC), 4.50%, 7/1/28
    1,711,786    
            $ 5,871,746    
Insured-Private Education - 2.7%  
$ 14,000     Massachusetts Development Finance Agency,
(College of the Holy Cross), (AMBAC), 5.25%, 9/1/32
  $ 15,950,200    
  10,000     Massachusetts Development Finance Agency,
(Franklin W. Olin College), (XLCA), 5.25%, 7/1/33
    10,603,100    
            $ 26,553,300    

 

Principal Amount
(000's omitted)
 
Security
 
Value
 
  Insured-Public Education - 3.9%        
$ 3,000     Kansas Development Finance Authority, (University of
Kansas), (MBIA), 4.50%, 4/1/35
  $ 2,949,450    
  9,000     University of California, (MBIA), 4.75%, 5/15/37     9,125,460    
  12,500     University of Massachusetts Building Authority,
(AMBAC), 5.25%, 11/1/29
    13,477,500    
  15,000     University of Vermont and State Agricultural College,
(MBIA), 4.00%, 10/1/35
    13,509,600    
            $ 39,062,010    
  Insured-Sewer Revenue - 3.9%        
$ 13,670     Chicago, IL, Wastewater Transmission,
(MBIA), 0.00%, 1/1/23
  $ 6,112,541    
  11,075     King County, WA, Sewer Revenue, (FGIC),
4.50%, 1/1/31
    10,853,168    
  19,000     King County, WA, Sewer Revenue, (FGIC),
5.00%, 1/1/31
    19,589,760    
  2,590     Passaic Valley, NJ, Sewer Commissioners,
(FGIC), 2.50%, 12/1/32
    1,809,814    
            $ 38,365,283    
  Insured-Special Tax Revenue - 4.6%        
$ 10,000     Grand Forks, ND, Sales Tax Revenue, (Alerus Project),
(MBIA), 4.50%, 12/15/29
  $ 9,904,700    
  18,980     Houston, TX, Hotel Occupancy Tax, (AMBAC),
0.00%, 9/1/24
    7,749,534    
  10,000     Metropolitan Transportation Authority, NY,
Dedicated Tax Fund, (MBIA), 5.00%, 11/15/30
    10,415,800    
  7,020     Phoenix, AZ, Civic Improvement Corp., (Civic Plaza
Expansion Project), (FGIC), 4.25%, 7/1/30
    6,673,633    
  10,500     Reno, NV, Sales and Room Tax, (AMBAC),
5.125%, 6/1/37
    10,904,460    
            $ 45,648,127    
  Insured-Transportation - 44.1%        
$ 15,600     California Infrastructure and Economic Development,
(Bay Area Toll Bridges), (AMBAC), 5.00%, 7/1/33
  $ 16,244,592    
  6,000     Central Texas Regional Mobility Authority, (FGIC),
5.00%, 1/1/45
    6,149,220    
  10,200     E-470 Public Highway Authority, CO, (MBIA),
0.00%, 9/1/21
    4,906,710    
  10,000     E-470 Public Highway Authority, CO, (MBIA),
0.00%, 9/1/24
    4,117,100    
  20,000     E-470 Public Highway Authority, CO, (MBIA),
0.00%, 9/1/24
    8,155,600    
  17,000     E-470 Public Highway Authority, CO, (MBIA),
0.00%, 9/1/25
    6,626,600    

 

See notes to financial statements

8



Eaton Vance Insured Municipal Bond Fund as of September 30, 2005

PORTFOLIO OF INVESTMENTS CONT'D

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-Transportation (continued)  
$ 13,690     Florida Department of Transportation, (Turnpike
Revenue), (FSA), 4.50%, 7/1/34
  $ 13,461,240    
  20,450     Massachusetts Bay Transportation Authority,
Revenue Assessment, (MBIA), 4.00%, 7/1/33
    18,367,781    
  10,000     Massachusetts Turnpike Authority, Metropolitan
Highway System, (MBIA), 5.00%, 1/1/37
    10,110,400    
  34,915     Massachusetts Turnpike Authority, Metropolitan
Highway System, (AMBAC), 5.00%, 1/1/39
    35,415,332    
  9,985     Massachusetts Turnpike Authority, Metropolitan
Highway System, (MBIA), 5.125%, 1/1/37
    10,360,336    
  1,800     Metropolitan Transportation Authority, NY,
(AMBAC), 4.50%, 11/15/34
    1,775,448    
  20,000     Nevada Department of Business and Industry, (Las Vegas
Monorail -1st Tier), (AMBAC), 5.375%, 1/1/40
    21,034,800    
  10,070     Nevada Department of Business and Industry,
(Las Vegas Monorail), (AMBAC), 0.00%, 1/1/23
    4,437,950    
  3,100     Nevada Department of Business and Industry,
(Las Vegas Monorail), (AMBAC), 0.00%, 1/1/28
    1,037,477    
  7,000     New Jersey Turnpike Authority, (FSA), 5.25%, 1/1/28     7,951,370    
  15,000     New York Thruway Authority, (FSA), 4.75%, 1/1/30     15,298,350    
  13,700     Newark, NJ, Housing Authority, (Newark Marine Terminal),
(MBIA), 5.00%, 1/1/37
    14,311,020    
  6,500     North Texas Tollway Authority, (FSA), 4.50%, 1/1/38     6,237,920    
  24,665     Northwest Parkway Public Highway Authority, CO, (FSA),
5.25%, 6/15/41
    26,183,624    
  3,370     Pima County, AZ, (MBIA), 3.50%, 7/1/19     3,100,366    
  75,000     San Joaquin Hills, CA, Transportation Corridor Agency,
(MBIA), 0.00%, 1/15/31
    22,013,250    
  45,020     San Joaquin Hills, CA, Transportation Corridor Agency,
(MBIA), 0.00%, 1/15/26
    17,133,712    
  119,000     San Joaquin Hills, CA, Transportation Corridor Agency,
(MBIA), 0.00%, 1/15/34
    30,034,410    
  87,045     San Joaquin Hills, CA, Transportation Corridor Agency,
(Toll Road Bonds), (MBIA), 0.00%, 1/15/25
    35,058,244    
  10,745     Tampa-Hillsborough County, FL, Expressway Authority,
(AMBAC), 4.00%, 7/1/34
    9,672,864    
  40,165     Texas Turnpike Authority, (AMBAC), 0.00%, 8/15/20     20,449,206    
  64,900     Texas Turnpike Authority, (AMBAC), 5.00%, 8/15/42     66,469,282    
            $ 436,114,204    
Insured-Utilities - 8.0%  
$ 5,000     Illinois Development Finance Authority, (Peoples Gas,
Light and Coke), (AMBAC), 5.00%, 2/1/33
  $ 5,152,850    
  61,585     Los Angeles, CA, Department of Water and Power, (FGIC),
5.00%, 7/1/43
    63,364,191    
  10,000     West Palm Beach, FL, Utility System, (FGIC), 5.00%,
10/1/34
    10,476,100    
            $ 78,993,141    

 

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-Water and Sewer - 10.4%  
$ 25,885     Atlanta, GA, Water and Wastewater, (MBIA), 5.00%,
11/1/39(3)
  $ 26,633,853    
  1,205     Beaumont, TX, Waterworks and Sewer System,
(MBIA), 4.00%, 9/1/28
    1,083,464    
  20,935     Birmingham, AL, Waterworks and Sewer Board, (MBIA),
5.00%, 1/1/37(2)
    21,686,567    
  16,450     Jacksonville Electric Authority, FL, Water and Sewer System,
(MBIA), 4.75%, 10/1/30
    16,676,188    
  8,675     New York City, NY, Municipal Water Finance Authority,
(Water and Sewer System), (AMBAC), 4.50%, 6/15/29
    8,668,234    
  10,000     New York City, NY, Municipal Water Finance Authority,
(Water and Sewer System), (FSA), 4.50%, 6/15/29(1)
    9,992,200    
  8,500     New York City, NY, Municipal Water Finance Authority,
(Water and Sewer System), (MBIA), 5.125%, 6/15/34
    8,842,550    
  9,500     Palm Coast, FL, Utility System, (MBIA), 5.00%, 10/1/33     9,890,735    
            $ 103,473,791    
Insured-Water Revenue - 2.8%  
$ 8,930     Albany, OR, Water, (FGIC), 5.00%, 8/1/33   $ 9,296,398    
  3,250     Baltimore, MD, (Water Projects), (FGIC),
5.125%, 7/1/42
    3,384,973    
  1,000     Detroit, MI, Water Supply System, (FGIC),
4.50%, 7/1/31
    984,190    
  1,315     Detroit, MI, Water Supply System, (FGIC),
4.50%, 7/1/32
    1,291,817    
  5,000     Metropolitan Water District, CA, (FGIC), 5.00%, 10/1/33     5,212,500    
  6,000     Metropolitan Water District, CA, (FGIC), 5.00%, 10/1/36     6,255,000    
  1,000     Metropolitan Water District, CA, (MBIA), 5.00%, 7/1/37     1,022,270    
            $ 27,447,148    
Other Revenue - 2.9%  
$ 28,675     Golden Tobacco Securitization Corp., CA, 5.00%, 6/1/45   $ 29,145,844    
            $ 29,145,844    
Special Tax Revenue - 1.5%  
$ 4,600     New Jersey EDA, (Cigarette Tax), 5.50%, 6/15/24   $ 4,826,826    
  2,405     New Jersey EDA, (Cigarette Tax), 5.75%, 6/15/29     2,559,714    
  1,750     New Jersey EDA, (Cigarette Tax), 5.50%, 6/15/31     1,822,940    
  5,110     New Jersey EDA, (Cigarette Tax), 5.75%, 6/15/34     5,412,614    
            $ 14,622,094    

 

See notes to financial statements

9



Eaton Vance Insured Municipal Bond Fund as of September 30, 2005

PORTFOLIO OF INVESTMENTS CONT'D

Principal Amount
(000's omitted)
 
Security
 
Value
 
Transportation - 5.8%  
$ 15,750     Port Authority of New York and New Jersey,
5.00%, 9/1/38
  $ 16,471,035    
  39,960     Puerto Rico Highway and Transportation Authority,
5.125%, 7/1/43
    41,338,220    
        $ 57,809,255    
    Total Tax-Exempt Investments - 162.7%
(identified cost $1,531,621,958)
  $ 1,610,491,106    
    Other Assets, Less Liabilities - (2.8)%   $ (28,075,814 )  
Auction Preferred Shares Plus Cumulative
Unpaid Dividends - (59.9)%
       
$(592,565,154)
   
Net Assets Applicable to
Common Shares- 100.0%
       
$989,850,138
   

 

AMBAC - AMBAC Financial Group, Inc.

FGIC.- Financial Guaranty Insurance Company

FSA.- Financial Security Assurance, Inc.

MBIA - Municipal Bond Insurance Association

XLCA - XL Capital Assurance, Inc.

The Fund invests primarily in debt securities issued by municipalities. The ability of the issuers of the debt securities to meet their obligations may be affected by economic developments in a specific industry or municipality. In order to reduce the risk associated with such economic developments, at September 30, 2005, 82.8% of the securities in the portfolio of investments are backed by bond insurance of various financial institutions and financial guaranty assurance agencies. The aggregate percentage insured by an individual financial institution ranged from 4.5% to 25.8% of total investments.

(1)  When-issued security.

(2)  Security (or a portion thereof) has been segregated to cover when-issued securities.

(3)  Security (or a portion thereof) has been segregated to cover margin requirements on open financial futures contracts.

See notes to financial statements

10



Eaton Vance Insured California Municipal Bond Fund as of September 30, 2005

PORTFOLIO OF INVESTMENTS

  Tax-Exempt Investments - 161.2%        
Principal Amount
(000's omitted)
  Security   Value  
  Escrowed / Prerefunded - 0.5%        
$ 5,110     Foothill/Eastern, Transportation Corridor Agency,
Escrowed to Maturity, 0.00%, 1/1/30
  $ 1,628,915    
            $ 1,628,915    
  General Obligations - 9.9%        
$ 10,000     California, 4.75%, 6/1/35   $ 10,034,000    
  6,750     California, 5.25%, 4/1/30     7,182,810    
  3,250     California, 5.25%, 4/1/34     3,443,017    
  9,975     California, 5.50%, 11/1/33     10,928,909    
            $ 31,588,736    
  Hospital - 9.3%        
$ 2,000     California Health Facilities Financing Authority,
(Catholic Healthcare West), 5.25%, 7/1/23
  $ 2,090,460    
  4,075     California Health Facilities Financing Authority,
(Cedars-Sinai Medical Center), 5.00%, 11/15/34
    4,155,603    
  1,390     California Statewide Communities Development Authority,
(Daughters of Charity Health System), 5.25%, 7/1/30
    1,434,327    
  10,900     California Statewide Communities Development Authority,
(Huntington Memorial Hospital), 5.00%, 7/1/35
    11,168,140    
  4,000     Torrance Hospital, (Torrance Memorial Medical Center),
5.50%, 6/1/31
    4,198,640    
  3,360     Turlock, (Emanuel Medical Center, Inc.), 5.375%,
10/15/34
    3,476,861    
  3,005     Washington Township Health Care District, 5.25%,
7/1/29
    3,096,202    
            $ 29,620,233    
  Insured-Electric Utilities - 3.9%        
$ 3,000     Puerto Rico Electric Power Authority, (FGIC),
5.00%, 7/1/35
  $ 3,166,890    
  4,000     Sacramento, Municipal Electric Utility District,
(FSA), 5.00%, 8/15/28
    4,149,280    
  5,000     Sacramento, Municipal Electric Utility District,
(MBIA), 5.00%, 8/15/28
    5,173,200    
            $ 12,489,370    
  Insured-Escrowed / Prerefunded - 17.4%        
$ 3,620     East Bay Municipal Utility District Water System, (MBIA),
Prerefunded to 6/1/08, 5.00%, 6/1/38
  $ 3,844,621    
  23,115     East Bay Municipal Utility District Water System, Sewer
Revenue, (MBIA), Prerefunded to 6/1/08, 5.00%, 6/1/38
    24,549,286    

 

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-Escrowed / Prerefunded (continued)  
$ 7,540     Foothill/Eastern, Transportation Corridor Agency, (FSA),
Escrowed to Maturity, 0.00%, 1/1/21
  $ 3,784,854    
  6,000     Sacramento Financing Authority, (City Hall Redevelopment),
(FSA), Prerefunded to 12/1/12, 5.00%, 12/1/28
    6,549,300    
  16,000     University of California, (FGIC), Prerefunded to 9/1/06,
5.00%, 9/1/27
    16,476,160    
            $ 55,204,221    
Insured-General Obligations - 27.7%  
$ 2,840     Azusa Unified School District, (FSA), 0.00%, 7/1/25   $ 1,119,244    
  3,290     Azusa Unified School District, (FSA), 0.00%, 7/1/27     1,161,534    
  6,030     Burbank Unified School District, (FGIC), 0.00%, 8/1/21     2,920,932    
  1,835     Buttonwillow Union School District, (Election of 2002),
(AMBAC), 5.50%, 11/1/27
    2,157,061    
  2,180     Ceres Unified School District, (FGIC), 0.00%, 8/1/25     855,781    
  3,000     Chino Valley Unified School District, (FSA),
5.00%, 8/1/26
    3,141,330    
  6,555     Foothill-De Anza Community College District,
(Election of 1999), (FGIC), 0.00%, 8/1/28
    2,155,612    
  8,500     Foothill-De Anza Community College District,
(Election of 1999), (FGIC), 0.00%, 8/1/29
    2,649,960    
  8,865     Foothill-De Anza Community College District,
(Election of 1999), (FGIC), 0.00%, 8/1/30
    2,625,458    
  2,300     Huntington Beach City School District, (Election of 2004),
(MBIA), 4.50%, 8/1/29(1)
    2,267,018    
  1,835     Huntington Beach City School District, (FGIC),
0.00%, 8/1/24
    760,681    
  2,060     Huntington Beach City School District, (FGIC),
0.00%, 8/1/25
    808,674    
  2,140     Huntington Beach City School District, (FGIC),
0.00%, 8/1/26
    794,882    
  2,000     Jurupa Unified School District, (FGIC), 0.00%, 8/1/23     872,100    
  2,000     Jurupa Unified School District, (FGIC), 0.00%, 8/1/26     742,880    
  2,235     Kings Canyon Joint Unified School District, (FGIC), 0.00%,
8/1/25
    877,372    
  10,000     Los Angeles Unified School District, (Election of 1997),
(MBIA), 5.125%, 1/1/27
    10,475,400    
  3,225     Modesto High School District, Stanislaus County, (FGIC),
0.00%, 8/1/24
    1,337,633    
  5,000     Riverside Unified School District, (FGIC), 5.00%, 2/1/27     5,216,350    
  6,135     Salinas Union High School District, (MBIA),
5.00%, 6/1/27
    6,410,646    
  10,000     San Diego Unified School District, (FGIC),
0.00%, 7/1/22
    4,614,600    
  10,000     San Diego Unified School District, (FGIC),
0.00%, 7/1/23
    4,375,900    
  8,000     San Juan Unified School District, (FSA), 0.00%, 8/1/21     3,863,200    

 

See notes to financial statements

11



Eaton Vance Insured California Municipal Bond Fund as of September 30, 2005

PORTFOLIO OF INVESTMENTS CONT'D

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-General Obligations (continued)  
$ 5,000     San Mateo County Community College District, (FGIC),
0.00%, 9/1/22
  $ 2,289,600    
  4,365     San Mateo County Community College District, (FGIC),
0.00%, 9/1/23
    1,895,327    
  3,955     San Mateo County Community College District, (FGIC),
0.00%, 9/1/25
    1,546,484    
  5,240     San Mateo Union High School District, (FGIC),
0.00%, 9/1/21
    2,528,562    
  2,740     Santa Ana Unified School District, (MBIA),
5.00%, 8/1/32
    2,852,888    
  2,500     Santa Barbara High School District, (Election of 2000),
(FSA), 4.50%, 8/1/25(1)
    2,502,825    
  7,750     Santa Clara Unified School District, (Election of 2004),
(FSA), 4.375%, 7/1/30
    7,451,315    
  3,825     Union Elementary School District, (FGIC), 0.00%, 9/1/24     1,573,643    
  3,000     Ventura County Community College District, (MBIA),
5.00%, 8/1/27
    3,137,250    
            $ 87,982,142    
Insured-Hospital - 6.7%  
$ 20,860     California Health Facilities Financing Authority,
(Sutter Health), (MBIA), 5.00%, 8/15/38
  $ 21,365,021    
            $ 21,365,021    
Insured-Lease Revenue / Certificates of
Participation - 20.0%
 
$ 2,000     Anaheim, Public Financing Authority Lease Revenue,
(FSA), 0.00%, 9/1/30
  $ 597,140    
  5,000     Anaheim, Public Financing Authority Lease Revenue,
(FSA), 0.00%, 9/1/35
    1,164,500    
  8,545     Anaheim, Public Financing Authority Lease Revenue,
(FSA), 0.00%, 9/1/29
    2,684,326    
  30,000     Anaheim, Public Financing Authority Lease Revenue,
(FSA), 5.00%, 3/1/37
    30,570,600    
  1,000     California Public Works Board Lease Revenue, (Department
of General Services), (AMBAC), 5.00%, 12/1/27
    1,036,800    
  5,805     San Bernardino County Medical Center Financing Project,
(MBIA), 5.00%, 8/1/28
    5,989,193    
  15,000     San Jose Financing Authority, (Civic Center), (AMBAC),
5.00%, 6/1/37
    15,459,300    
  5,850     Shasta Joint Powers Financing Authority, (County
Administration Building), (MBIA), 5.00%, 4/1/29
    6,059,020    
            $ 63,560,879    

 

Principal Amount
(000's omitted)
 
Security
 
Value
 
  Insured-Other Revenue - 1.0%        
$ 3,000     Golden Tobacco Securitization Corp., (FGIC),
5.00%, 6/1/38
  $ 3,119,970    
            $ 3,119,970    
  Insured-Private Education - 0.5%        
$ 1,560     California Educational Facilities Authority, (St. Mary's
College of California), (MBIA), 5.125%, 10/1/26
  $ 1,647,984    
            $ 1,647,984    
  Insured-Public Education - 5.2%        
$ 1,000     California State University, (AMBAC), 5.125%,
11/1/26
  $ 1,049,590    
  15,000     University of California, (FGIC), 5.125%, 9/1/30     15,543,750    
            $ 16,593,340    
  Insured-Sewer Revenue - 6.0%        
$ 18,350     Livermore-Amador Valley Water Management Agency,
(AMBAC), 5.00%, 8/1/31
  $ 18,962,706    
            $ 18,962,706    
  Insured-Special Assessment Revenue - 3.8%        
$ 1,800     Murrieta Redevelopment Agency Tax, (MBIA),
5.00%, 8/1/32
  $ 1,869,300    
  7,000     Pomona Public Financing Authority, (MBIA), 5.00%,
2/1/33
    7,178,990    
  3,000     Tustin Unified School District, (FSA), 5.00%, 9/1/38     3,092,730    
            $ 12,141,020    
  Insured-Special Tax Revenue - 8.2%        
$ 2,500     North City, School Facility Financing Authority,
(AMBAC), 0.00%, 9/1/26
  $ 917,425    
  13,630     San Francisco, Bay Area Rapid Transportation District
Sales Tax Revenue, (AMBAC), 5.00%, 7/1/31
    14,079,245    
  3,500     San Francisco, Bay Area Rapid Transportation District,
(AMBAC), 5.00%, 7/1/26
    3,626,175    
  7,000     San Francisco, Bay Area Rapid Transportation District,
(AMBAC), 5.125%, 7/1/36
    7,274,820    
            $ 25,897,665    
  Insured-Transportation - 16.4%        
$ 15,150     California Infrastructure and Economic Development,
(Bay Area Toll Bridges), (AMBAC), 5.00%, 7/1/33
  $ 15,775,998    
  7,250     California Infrastructure and Economic Development,
(Bay Area Toll Bridges), (AMBAC), 5.00%, 7/1/36(2)
    7,549,570    

 

See notes to financial statements

12



Eaton Vance Insured California Municipal Bond Fund as of September 30, 2005

PORTFOLIO OF INVESTMENTS CONT'D

Principal Amount
(000's omitted)
 
Security
 
Value
 
  Insured-Transportation (continued)        
$ 1,000     California Infrastructure and Economic Development,
(Bay Area Toll Bridges), (FGIC), 5.00%, 7/1/29
  $ 1,042,660    
  5,000     Los Angeles County, Metropolitan Transportation Authority,
(AMBAC), 4.50%, 7/1/32
    4,908,850    
  13,940     Sacramento County, Airport System, (FSA), 5.00%,
7/1/27
    14,427,203    
  3,445     San Joaquin Hills, Transportation Corridor Agency,
(MBIA), 0.00%, 1/15/30
    1,058,855    
  5,000     San Joaquin Hills, Transportation Corridor Agency,
(MBIA), 0.00%, 1/15/31
    1,467,550    
  15,000     San Joaquin Hills, Transportation Corridor Agency,
(MBIA), 0.00%, 1/15/26
    5,708,700    
            $ 51,939,386    
  Insured-Utilities - 7.7%        
$ 9,000     Los Angeles Department of Water and Power, (FGIC),
5.00%, 7/1/43
  $ 9,260,010    
  14,750     Los Angeles Department of Water and Power, (MBIA),
5.125%, 7/1/41
    15,222,147    
            $ 24,482,157    
  Insured-Water Revenue - 9.3%        
$ 8,180     California Water Resource, (Central Valley), (FGIC),
5.00%, 12/1/29(3)
  $ 8,506,546    
  1,250     Contra Costa Water District, (FSA), 4.50%, 10/1/27     1,243,950    
  5,500     Contra Costa Water District, (FSA), 4.50%, 10/1/31     5,437,630    
  2,000     East Bay Municipal Utility District Water System, (MBIA),
5.00%, 6/1/26
    2,071,180    
  10,000     Metropolitan Water District, (FGIC), 5.00%, 10/1/36     10,425,000    
  1,750     San Diego, (Water Utility Fund), (FGIC), 4.75%, 8/1/28     1,763,055    
            $ 29,447,361    
  Lease Revenue / Certificates of Participation - 0.9%        
$ 2,570     Sacramento Financing Authority, 5.40%, 11/1/20   $ 2,852,263    
            $ 2,852,263    
  Water Revenue - 6.8%        
$ 21,180     Southern California Metropolitan Water District,
5.00%, 7/1/37
  $ 21,642,571    
            $ 21,642,571    
  Total Tax-Exempt Investments - 161.2%
(identified cost $489,962,815)
        $ 512,165,940    
    Other Assets, Less Liabilities - 0.2%   $ 646,047    

 

   
Value
 
Auction Preferred Shares Plus Cumulative
Unpaid Dividends - (61.4)%
  $ (195,027,396 )  
Net Assets Applicable to
Common Shares - 100.0%
   
$317,784,591
   

 

AMBAC - AMBAC Financial Group, Inc.

FGIC - Financial Guaranty Insurance Company

FSA - Financial Security Assurance, Inc.

MBIA - Municipal Bond Insurance Association

The Fund invests primarily in debt securities issued by California municipalities. The ability of the issuers of the debt securities to meet their obligations may be affected by economic developments in a specific industry or municipality. In order to reduce the risk associated with such economic developments, at September 30, 2005, 82.9% of the securities in the portfolio of investments are backed by bond insurance of various financial institutions and financial guaranty assurance agencies. The aggregate percentage insured by an individual financial institution ranged from 18.1% to 25.1% of total investments.

(1)  When-issued security.

(2)  Security (or a portion thereof) has been segregated to cover when-issued securities.

(3)  Security (or a portion thereof) has been segregated to cover margin requirements on open financial futures contracts.

See notes to financial statements

13



Eaton Vance Insured New York Municipal Bond as of September 30, 2005

PORTFOLIO OF INVESTMENTS

  Tax-Exempt Investments - 165.8%        
Principal Amount
(000's omitted)
  Security   Value  
  Electric Utilities - 1.3%        
$ 1,950     Long Island Power Authority Electric System Revenue,
5.00%, 9/1/27
  $ 2,022,832    
  1,000     Puerto Rico Electric Power Authority, 5.25%, 7/1/31     1,057,950    
            $ 3,080,782    
  General Obligations - 6.1%        
$ 3,500     New York, 4.50%, 8/1/35   $ 3,412,780    
  1,500     New York, 5.25%, 1/15/28     1,588,770    
  3,500     New York City, 5.25%, 8/15/26     3,698,275    
  3,075     New York City, 5.25%, 6/1/27     3,247,200    
  2,000     New York City, 5.25%, 1/15/33     2,109,400    
            $ 14,056,425    
  Hospital - 1.1%        
$ 640     New York Dormitory Authority Revenue, (Lenox Hill
Hospital), 5.50%, 7/1/30
  $ 661,984    
  1,750     New York Dormitory Authority, (Memorial Sloan-Kettering
Cancer Center), 5.00%, 7/1/34
    1,809,517    
            $ 2,471,501    
  Housing - 0.9%        
$ 2,000     New York City Housing Development Corp.,
(Multi-Family Housing), 4.75%, 11/1/35
  $ 1,999,920    
            $ 1,999,920    
  Industrial Development Revenue - 3.0%        
$ 6,800     New York City Industrial Development Agency,
(Liberty-IAC/Interactive Corp.), 5.00%, 9/1/35
  $ 6,896,424    
            $ 6,896,424    
  Insured-Electric Utilities - 5.4%        
$ 3,000     Long Island Power Authority Electric System Revenue,
(FSA), 0.00%, 6/1/22
  $ 1,447,980    
  7,500     Long Island Power Authority, (AMBAC), 5.00%, 9/1/34     7,848,450    
  4,785     Long Island Power Authority, (FSA), 0.00%, 6/1/28     1,684,081    
  1,500     Puerto Rico Electric Power Authority, (FGIC),
5.00%, 7/1/35
    1,583,445    
            $ 12,563,956    

 

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-Escrowed / Prerefunded - 0.5%  
$ 1,000     Buffalo Municipal Water Finance Authority, (FSA),
Prerefunded to 7/1/12, 5.125%, 7/1/32
  $ 1,099,130    
            $ 1,099,130    
Insured-General Obligations - 3.0%  
$ 1,750     New York Dormitory Authority, (School Districts
Financing Program), (MBIA), 5.00%, 10/1/30
  $ 1,821,785    
  2,700     Sachem Central School District, Holbrook, (MBIA),
5.00%, 10/15/26
    2,847,015    
  2,085     Sachem Central School District, Holbrook, (MBIA),
5.00%, 10/15/28
    2,194,171    
            $ 6,862,971    
Insured-Hospital - 22.8%  
$ 15,500     New York City Health and Hospital Corp., (Health
Systems), (AMBAC), 5.00%, 2/15/23
  $ 16,236,715    
  10,600     New York Dormitory Authority, (Hospital Surgery),
(MBIA), 5.00%, 2/1/38
    10,836,062    
  6,800     New York Dormitory Authority, (Maimonides Medical
Center), (MBIA), 5.00%, 8/1/33
    7,113,344    
  4,000     New York Dormitory Authority, (Memorial Sloan-Kettering
Cancer Center), (MBIA), 0.00%, 7/1/26
    1,554,040    
  23,835     New York Dormitory Authority, (Memorial Sloan-Kettering
Cancer Center), (MBIA), 0.00%, 7/1/28
    8,308,404    
  26,070     New York Dormitory Authority, (Memorial Sloan-Kettering
Cancer Center), (MBIA), 0.00%, 7/1/29
    8,617,960    
            $ 52,666,525    
Insured-Other Revenue - 3.4%  
$ 5,535     New York City Cultural Resource, (American Museum
of Natural History), (MBIA), 5.00%, 7/1/44
  $ 5,752,083    
  2,000     New York City Cultural Resource, (Wildlife Conservation
Society), (FGIC), 5.00%, 2/1/34
    2,090,680    
            $ 7,842,763    
Insured-Private Education - 28.5%  
$ 4,000     Madison County, IDA, (Colgate University), (MBIA),
5.00%, 7/1/39
  $ 4,176,360    
  16,500     New York City Industrial Development Agency,
(New York University), (AMBAC), 5.00%, 7/1/41
    16,959,195    
  11,500     New York Dormitory Authority, (Brooklyn Law School),
(XLCA), 5.125%, 7/1/30
    12,084,315    
  2,225     New York Dormitory Authority, (FIT Student Housing Corp.),
(FGIC), 5.125%, 7/1/26
    2,373,452    
  1,000     New York Dormitory Authority, (Iona College), (XLCA),
5.125%, 7/1/32
    1,043,610    

 

See notes to financial statements

14



Eaton Vance Insured New York Municipal Bond as of September 30, 2005

PORTFOLIO OF INVESTMENTS CONT'D

Principal Amount
(000's omitted)
 
Security
 
Value
 
  Insured-Private Education (continued)        
$ 4,250     New York Dormitory Authority, (New York University),
(AMBAC), 5.00%, 7/1/31
  $ 4,392,248    
  5,000     New York Dormitory Authority, (New York University),
(AMBAC), 5.00%, 7/1/41
    5,139,150    
  3,000     New York Dormitory Authority, (New York University),
(AMBAC), 5.50%, 7/1/40
    3,527,430    
  13,585     New York Dormitory Authority, (Rochester Institute of
Technology), (AMBAC), 5.25%, 7/1/32
    14,367,768    
  1,820     New York Dormitory Authority, (Rockefeller University),
(MBIA), 4.75%, 7/1/37
    1,837,599    
            $ 65,901,127    
  Insured-Public Education - 6.3%        
$ 1,635     New York Dormitory Authority, (Educational Housing
Services), (AMBAC), 5.25%, 7/1/22
  $ 1,836,759    
  1,870     New York Dormitory Authority, (Educational Housing
Services), (AMBAC), 5.25%, 7/1/24
    2,103,432    
  1,000     New York Dormitory Authority, (Educational Housing
Services), (AMBAC), 5.25%, 7/1/25
    1,129,100    
  9,500     New York Dormitory Authority, (University Educational
Facility), (MBIA), 4.75%, 5/15/25
    9,587,020    
            $ 14,656,311    
  Insured-Solid Waste - 1.8%        
$ 1,790     Ulster County Resource Recovery Agency, Solid
Waste System, (AMBAC), 0.00%, 3/1/21
  $ 917,715    
  1,240     Ulster County Resource Recovery Agency, Solid Waste
System, (AMBAC), 0.00%, 3/1/22
    604,884    
  1,090     Ulster County Resource Recovery Agency, Solid Waste
System, (AMBAC), 0.00%, 3/1/23
    505,509    
  1,490     Ulster County Resource Recovery Agency, Solid Waste
System, (AMBAC), 0.00%, 3/1/24
    656,449    
  3,735     Ulster County Resource Recovery Agency, Solid Waste
System, (AMBAC), 0.00%, 3/1/25
    1,559,026    
            $ 4,243,583    
  Insured-Special Tax Revenue - 15.0%        
$ 15,560     Metropolitan Transportation Authority, Petroleum
Tax Fund, (FSA), 5.00%, 11/15/32(1)(2)
  $ 16,158,749    
  7,250     New York City Transitional Finance Authority, (Future Tax),
(MBIA), 5.00%, 5/1/31(2)
    7,541,160    
  8,300     Puerto Rico Infrastructure Financing Authority, (AMBAC),
0.00%, 7/1/28
    2,880,349    
  4,430     Puerto Rico Infrastructure Financing Authority, (AMBAC),
0.00%, 7/1/37
    981,821    
  35,000     Puerto Rico Infrastructure Financing Authority, (AMBAC),
0.00%, 7/1/44
    5,466,650    

 

Principal Amount
(000's omitted)
 
Security
 
Value
 
  Insured-Special Tax Revenue (continued)        
$ 5,750     Puerto Rico Infrastructure Financing Authority, (FGIC),
0.00%, 7/1/33
  $ 1,552,443    
            $ 34,581,172    
  Insured-Transportation - 33.5%        
$ 32,500     Metropolitan Transportation Authority, (FSA), 5.00%,
11/15/30
  $ 33,851,350    
  5,775     Port Authority of New York and New Jersey, (MBIA),
5.125%, 10/15/30
    6,024,422    
  11,500     Puerto Rico Highway and Transportation Authority,
(MBIA), 5.00%, 7/1/33
    12,029,115    
  24,600     Triborough Bridge and Tunnel Authority, (MBIA),
5.00%, 11/15/32
    25,546,608    
            $ 77,451,495    
  Insured-Water and Sewer - 11.0%        
$ 7,000     New York City Municipal Water Finance Authority,
(AMBAC), 5.00%, 6/15/38
  $ 7,273,910    
  10,000     New York City Municipal Water Finance Authority, Water
and Sewer, (MBIA), 5.125%, 6/15/34
    10,403,000    
  7,500     Niagara Falls Public Water Authority and Sewer System,
(MBIA), 5.00%, 7/15/34
    7,811,250    
            $ 25,488,160    
  Insured-Water Revenue - 5.5%        
$ 5,610     New York State Environmental Facilities Corp.
(MBIA), 4.25%, 6/15/30(3)
  $ 5,397,774    
  7,525     New York State Environmental Facilities Corp., (MBIA),
4.25%, 6/15/31(3)
    7,223,022    
            $ 12,620,796    
  Lease Revenue / Certificates of Participation - 6.3%        
$ 4,000     Metropolitan Transportation Authority, Lease Contract,
5.125%, 1/1/29
  $ 4,208,360    
  10,000     New York Dormitory Authority, (North General Hospital),
5.00%, 2/15/25
    10,415,500    
            $ 14,623,860    
  Private Education - 2.1%        
$ 1,630     Madison County Industrial Development Agency,
(Colgate University), 5.00%, 7/1/33
  $ 1,687,588    
  3,065     Rensselaer County Industrial Development Agency,
(Rensselaer Polytech Institute), 5.125%, 8/1/27
    3,173,348    
            $ 4,860,936    

 

See notes to financial statements

15



Eaton Vance Insured New York Municipal Bond as of September 30, 2005

PORTFOLIO OF INVESTMENTS CONT'D

Principal Amount
(000's omitted)
 
Security
 
Value
 
Transportation - 8.3%  
$ 14,500     Port Authority of New York and New Jersey,
5.00%, 9/1/38
  $ 15,163,810    
  3,990     Puerto Rico Highway and Transportation Authority,
5.125%, 7/1/43
    4,127,615    
        $ 19,291,425    
    Total Tax-Exempt Investments - 165.8%
(identified cost $366,277,583)
  $ 383,259,262    
    Other Assets, Less Liabilities - (4.1)%   $ (9,569,712 )  
Auction Preferred Shares Plus Cumulative
Unpaid Dividends - (61.7)%
       
$(142,528,965)
   
Net Assets Applicable to
Common Shares - 100.0%
       
$231,160,585
   

 

AMBAC - MBAC Financial Group, Inc.

FGIC - Financial Guaranty Insurance Company

FSA - Financial Security Assurance, Inc.

MBIA - Municipal Bond Insurance Association

XLCA - XL Capital Assurance, Inc.

The Fund invests primarily in debt securities issued by New York municipalities. The ability of the issuers of the debt securities to meet their obligations may be affected by economic developments in a specific industry or municipality. In order to reduce the risk associated with such economic developments, at September 30, 2005, 82.2% of the securities in the portfolio of investments are backed by bond insurance of various financial institutions and financial guaranty assurance agencies. The aggregate percentage insured by an individual financial institution ranged from 2.0% to 38.3% of total investments.

(1)  Security (or a portion thereof) has been segregated to cover margin requirements on open financial futures contracts.

(2)  Security (or a portion thereof) has been segregated to cover when-issued securities.

(3)  When-issued security.

See notes to financial statements

16



Eaton Vance Insured Municipal Bond Funds as of September 30, 2005

FINANCIAL STATEMENTS

Statements of Assets and Liabilities

As of September 30, 2005

    Insured Municipal Fund   Insured California Fund   Insured New York Fund  
Assets  
Investments -  
Identified cost   $ 1,531,621,958     $ 489,962,815     $ 366,277,583    
Unrealized appreciation     78,869,148       22,203,125       16,981,679    
Investments, at value   $ 1,610,491,106     $ 512,165,940     $ 383,259,262    
Receivable for investments sold   $ 5,185,839     $ -     $ -    
Interest receivable     17,840,975       5,397,496       4,224,931    
Receivable for daily variation margin on open financial futures contracts     1,451,250       423,750       272,250    
Prepaid expenses     -       4,299       -    
Total assets   $ 1,634,969,170     $ 517,991,485     $ 387,756,443    
Liabilities  
Payable for when-issued securities   $ 33,618,550     $ 4,768,588     $ 12,577,007    
Due to custodian     18,249,177       161,223       1,294,874    
Payable to affiliate for Trustees' fees     -       -       68    
Payable to affiliate for investment advisory fees     434,285       140,166       102,356    
Accrued expenses     251,866       109,521       92,588    
Total liabilities   $ 52,553,878     $ 5,179,498     $ 14,066,893    
Auction preferred shares at liquidation value plus cumulative unpaid dividends     592,565,154       195,027,396       142,528,965    
Net assets applicable to common shares   $ 989,850,138     $ 317,784,591     $ 231,160,585    
Sources of Net Assets  
Common Shares, $0.01 par value, unlimited number of shares authorized   $ 646,067     $ 216,282     $ 156,981    
Additional paid-in capital     911,973,551       305,163,036       221,346,825    
Accumulated net realized loss (computed on the basis of identified cost)     (15,229,844 )     (13,957,233 )     (9,706,831 )  
Undistributed net investment income     3,569,851       844,809       479,265    
Net unrealized appreciation (computed on the basis of identified cost)     88,890,513       25,517,697       18,884,345    
Net assets applicable to common shares   $ 989,850,138     $ 317,784,591     $ 231,160,585    
Auction Preferred Shares Issued and Outstanding
(Liquidation preference of $25,000 per share)
 
      23,700       7,800       5,700    
Common Shares Outstanding  
      64,606,667       21,628,202       15,698,145    
Net Asset Value Per Common Share  
Net assets applicable to common shares ÷ common shares issued and outstanding   $ 15.32     $ 14.69     $ 14.73    

 

See notes to financial statements

17



Eaton Vance Insured Municipal Bond Funds as of September 30, 2005

FINANCIAL STATEMENTS CONT'D

Statements of Operations

For the Year Ended September 30, 2005

    Insured Municipal Fund   Insured California Fund   Insured New York Fund  
Investment Income      
Interest   $ 75,970,762     $ 24,487,827     $ 17,732,537    
Total investment income   $ 75,970,762     $ 24,487,827     $ 17,732,537    
Expenses      
Investment adviser fee   $ 10,234,052     $ 3,318,949     $ 2,428,490    
Trustees' fees and expenses     19,109       14,328       11,209    
Legal and accounting services     97,308       62,512       59,120    
Printing and postage     164,497       37,212       36,888    
Custodian fee     432,036       221,403       180,608    
Transfer and dividend disbursing agent     72,262       70,046       71,132    
Preferred shares remarketing agent fee     1,481,250       487,501       356,251    
Miscellaneous     125,637       60,502       60,222    
Total expenses   $ 12,626,151     $ 4,272,453     $ 3,203,920    
Deduct -  
Reduction of custodian fee   $ 61,996     $ 19,677     $ 12,113    
Reduction of investment adviser fee     5,040,802       1,634,059       1,195,564    
Total expense reductions   $ 5,102,798     $ 1,653,736     $ 1,207,677    
Net expenses   $ 7,523,353     $ 2,618,717     $ 1,996,243    
Net investment income   $ 68,447,409     $ 21,869,110     $ 15,736,294    
Realized and Unrealized Gain (Loss)      
Net realized gain (loss) -  
Investment transactions (identified cost basis)   $ 23,213,373     $ 4,263,699     $ 2,962,235    
Financial futures contracts     (33,350,079 )     (10,121,185 )     (6,698,988 )  
Net realized loss   $ (10,136,706 )   $ (5,857,486 )   $ (3,736,753 )  
Change in unrealized appreciation (depreciation) -  
Investments (identified cost basis)   $ 33,487,984     $ 10,287,325     $ 5,653,651    
Financial futures contracts     15,873,046       5,146,796       3,418,560    
Net change in unrealized appreciation (depreciation)   $ 49,361,030     $ 15,434,121     $ 9,072,211    
Net realized and unrealized gain   $ 39,224,324     $ 9,576,635     $ 5,335,458    
Distributions to preferred shareholders
From net investment income
  $ (11,235,061 )   $ (3,500,228 )   $ (2,626,097 )  
Net increase in net assets from operations   $ 96,436,672     $ 27,945,517     $ 18,445,655    

 

See notes to financial statements

18



Eaton Vance Insured Municipal Bond Funds as of September 30, 2005

FINANCIAL STATEMENTS CONT'D

Statements of Changes in Net Assets

For the Year Ended September 30, 2005

Increase (Decrease) in Net Assets   Insured Municipal Fund   Insured California Fund   Insured New York Fund  
From operations -  
Net investment income   $ 68,447,409     $ 21,869,110     $ 15,736,294    
Net realized loss from investment transactions and financial futures contracts     (10,136,706 )     (5,857,486 )     (3,736,753 )  
Net change in unrealized appreciation (depreciation) from investments and financial futures contracts     49,361,030       15,434,121       9,072,211    
Distributions to preferred shareholders -  
From net investment income     (11,235,061 )     (3,500,228 )     (2,626,097 )  
Net increase in net assets from operations   $ 96,436,672     $ 27,945,517     $ 18,445,655    
Distributions to common shareholders -  
From net investment income   $ (59,817,380 )   $ (18,438,043 )   $ (13,257,068 )  
Total distributions to common shareholders   $ (59,817,380 )   $ (18,438,043 )   $ (13,257,068 )  
Net increase in net assets   $ 36,619,292     $ 9,507,474     $ 5,188,587    
Net Assets Applicable to Common Shares      
At beginning of year   $ 953,230,846     $ 308,277,117     $ 225,971,998    
At end of year   $ 989,850,138     $ 317,784,591     $ 231,160,585    
Undistributed net investment income included in
net assets applicable to common shares
     
At end of year   $ 3,569,851     $ 844,809     $ 479,265    

 

See notes to financial statements

19



Eaton Vance Insured Municipal Bond Funds as of September 30, 2005

FINANCIAL STATEMENTS CONT'D

Statements of Changes in Net Assets

For the Year Ended September 30, 2004

Increase (Decrease) in Net Assets   Insured Municipal Fund   Insured California Fund   Insured New York Fund  
From operations -  
Net investment income   $ 70,047,535     $ 22,340,828     $ 15,994,026    
Net realized loss from investment transactions and financial futures contracts     (8,734,890 )     (7,745,257 )     (5,436,021 )  
Net change in unrealized appreciation (depreciation) from investments and financial futures contracts     11,734,079       8,299,834       3,674,762    
Distributions to preferred shareholders -  
From net investment income     (7,059,224 )     (1,809,028 )     (1,398,712 )  
Net increase in net assets from operations   $ 65,987,500     $ 21,086,377     $ 12,834,055    
Distributions to common shareholders -  
From net investment income   $ (60,568,755 )   $ (19,465,383 )   $ (14,128,331 )  
Total distributions to common shareholders   $ (60,568,755 )   $ (19,465,383 )   $ (14,128,331 )  
Net increase (decrease) in net assets   $ 5,418,745     $ 1,620,994     $ (1,294,276 )  
Net Assets Applicable to Common Shares      
At beginning of year   $ 947,812,101     $ 306,656,123     $ 227,266,274    
At end of year   $ 953,230,846     $ 308,277,117     $ 225,971,998    
Undistributed net investment income included in
net assets applicable to common shares
     
At end of year   $ 6,552,094     $ 1,143,005     $ 646,029    

 

See notes to financial statements

20



Eaton Vance Insured Municipal Bond Funds as of September 30, 2005

FINANCIAL STATEMENTS CONT'D

Financial Highlights

Selected data for a common share outstanding during the periods stated

    Insured Municipal Fund  
    Year Ended September 30,  
    2005(1)    2004(1)    2003(1)    2002(1)(2)   
Net asset value - Beginning of year (Common shares)   $ 14.750     $ 14.670     $ 14.810     $ 14.325 (3)   
Income (loss) from operations      
Net investment income   $ 1.059     $ 1.084     $ 1.041     $ 0.040    
Net realized and unrealized gain     0.611       0.043       0.009       0.454    
Distributions to preferred shareholders from net investment income     (0.174 )     (0.109 )     (0.091 )     -    
Total income from operations   $ 1.496     $ 1.018     $ 0.959     $ 0.494    
Less distributions to common shareholders      
From net investment income   $ (0.926 )   $ (0.938 )   $ (0.908 )   $ -    
Total distributions to common shareholders   $ (0.926 )   $ (0.938 )   $ (0.908 )   $ -    
Preferred and Common shares offering costs charged to paid-in capital   $ -     $ -     $ (0.007 )   $ (0.009 )  
Preferred Shares underwriting discounts   $ -     $ -     $ (0.184 )   $ -    
Net asset value - End of year (Common shares)   $ 15.320     $ 14.750     $ 14.670     $ 14.810    
Market value - End of year (Common shares)   $ 15.050     $ 13.950     $ 13.580     $ 15.000    
Total Investment Return on Net Asset Value(5)      10.70 %     7.58 %     5.67 %     3.39 %(4)   
Total Investment Return on Market Value(5)      14.98 %     9.91 %     (3.42 )%     4.71 %(4)   

 

See notes to financial statements

21



Eaton Vance Insured Municipal Bond Funds as of September 30, 2005

FINANCIAL STATEMENTS CONT'D

Financial Highlights

Selected data for a common share outstanding during the periods stated

    Insured Municipal Fund  
    Year Ended September 30,  
    2005(1)    2004(1)    2003(1)    2002(1)(2)   
Ratios/Supplemental Data† ††   
Net assets applicable to common shares, end of year (000's omitted)   $ 989,850     $ 953,231     $ 947,812     $ 934,619    
Ratios (As a percentage of average net assets applicable to common shares):                                  
Net expenses(6)     0.78 %     0.77 %     0.75 %     0.48 %(7)  
Net expenses after custodian fee reduction(6)     0.77 %     0.77 %     0.73 %     0.46 %(7)  
Net investment income(6)     6.97 %     7.41 %     7.20 %     3.20 %(7)  
Portfolio Turnover     51 %     37 %     63 %     -    
   The operating expenses of the Fund reflect reductions of the investment adviser fee. Had such action not been taken, the ratios and net investment income per share would have been as follows:  
Ratios (As a percentage of average net assets applicable to common shares):                                  
Expenses(6)     1.29 %     1.29 %     1.26 %     0.80 %(7)  
Expenses after custodian fee reduction(6)     1.28 %     1.29 %     1.24 %     0.78 %(7)  
Net investment income(6)     6.46 %     6.89 %     6.69 %     2.88 %(7)  
Net investment income per share   $ 0.981     $ 1.008     $ 0.967     $ 0.036    
††  The ratios reported above are based on net assets applicable solely to common shares. The ratios based on net assets, including amounts related to preferred shares, are as follows:  
Ratios (As a percentage of average total net assets):                                  
Net expenses     0.48 %     0.47 %     0.47 %          
Net expenses after custodian fee reduction     0.48 %     0.47 %     0.46 %          
Net investment income     4.35 %     4.56 %     4.54 %          
   The operating expenses of the Fund reflect reductions of the investment adviser fee. Had such action not been taken, the ratios would have been as follows:  
Ratios (As a percentage of average total net assets):                                  
Expenses     0.80 %     0.79 %     0.79 %          
Expenses after custodian fee reduction     0.80 %     0.79 %     0.78 %          
Net investment income     4.03 %     4.24 %     4.22 %          
Senior Securities:                                  
Total preferred shares outstanding     23,700       23,700       23,700            
Asset coverage per preferred share(8)   $ 66,769     $ 65,233     $ 65,008            
Involuntary liquidation preference per preferred share(9)   $ 25,000     $ 25,000     $ 25,000            
Approximate market value per preferred share(9)   $ 25,000     $ 25,000     $ 25,000            

 

(1)  Computed using average common shares outstanding.

(2)  For the period from the start of business, August 30, 2002, to September 30, 2002.

(3)  Net asset value at beginning of period reflects the deduction of the sales load of $0.675 per share paid by the shareholder from the $15.000 offering price.

(4)  Total investment return on net asset value is calculated assuming a purchase at the offering price of $15.000 less the sales load of $0.675 per share paid by the shareholder on the first day and a sale at the net asset value on the last day of the period reported. Total investment return on market value is calculated assuming a purchase at the offering price of $15.000 less the sales load of $0.675 per share paid by the shareholder on the first day and a sale at the current market price on the last day of the period reported. Total investment return on net asset value and total investment return on market value are not computed on an annualized basis.

(5)  Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested. Total return is not computed on an annualized basis.

(6)  Ratios do not reflect the effect of dividend payments to preferred shareholders. Ratios to average net assets applicable to common shares reflect the Fund's leveraged capital structure.

(7)  Annualized.

(8)  Calculated by subtracting the Fund's total liabilities (not including the preferred shares) from the Fund's total assets, and dividing this by the number of preferred shares outstanding.

(9)  Plus accumulated and unpaid dividends.

See notes to financial statements

22



Eaton Vance Insured Municipal Bond Funds as of September 30, 2005

FINANCIAL STATEMENTS CONT'D

Financial Highlights

Selected data for a common share outstanding during the periods stated

    Insured California Fund  
    Year Ended September 30,  
    2005(1)    2004(1)    2003(1)    2002(1)(2)   
Net asset value - Beginning of year (Common shares)   $ 14.250     $ 14.180     $ 14.760     $ 14.325 (3)   
Income (loss) from operations  
Net investment income   $ 1.011     $ 1.033     $ 0.993     $ 0.031    
Net realized and unrealized gain (loss)     0.444       0.021       (0.402 )     0.420    
Distributions to preferred shareholders from net investment income     (0.162 )     (0.084 )     (0.078 )     -    
Total income from operations   $ 1.293     $ 0.970     $ 0.513     $ 0.451    
Less distributions to common shareholders  
From net investment income   $ (0.853 )   $ (0.900 )   $ (0.901 )   $ -    
Total distributions to common shareholders   $ (0.853 )   $ (0.900 )   $ (0.901 )   $ -    
Preferred and Common shares offering costs charged to paid-in capital   $ -     $ -     $ (0.011 )   $ (0.016 )  
Preferred Shares underwriting discounts   $ -     $ -     $ (0.181 )   $ -    
Net asset value - End of year (Common shares)   $ 14.690     $ 14.250     $ 14.180     $ 14.760    
Market value - End of year (Common shares)   $ 13.920     $ 13.730     $ 13.410     $ 15.000    
Total Investment Return on Net Asset Value(5)      9.58 %     7.34 %     2.58 %     3.04 %(4)   
Total Investment Return on Market Value(5)      7.77 %     9.36 %     (4.54 )%     4.71 %(4)   

 

See notes to financial statements

23



Eaton Vance Insured Municipal Bond Funds as of September 30, 2005

FINANCIAL STATEMENTS CONT'D

Financial Highlights

Selected data for a common share outstanding during the periods stated

    Insured California Fund  
    Year Ended September 30,  
    2005(1)    2004(1)    2003(1)    2002(1)(2)   
Ratios/Supplemental Data ††   
Net assets applicable to common shares, end of year (000's omitted)   $ 317,785     $ 308,277     $ 306,656     $ 311,634    
Ratios (As a percentage of average net assets applicable to common shares):                                  
Net expenses(6)     0.84 %     0.83 %     0.80 %     0.61 %(7)  
Net expenses after custodian fee reduction(6)     0.83 %     0.83 %     0.77 %     0.59 %(7)  
Net investment income(6)     6.93 %     7.23 %     7.02 %     2.54 %(7)  
Portfolio Turnover     16 %     24 %     38 %     0 %  
   The operating expenses of the Fund reflect a reduction of the investment adviser fee. Had such action not been taken, the ratios and net investment income per share would have been as follows:  
Ratios (As a percentage of average net assets applicable to common shares):                                  
Expenses(6)     1.36 %     1.36 %     1.31 %     0.93 %(7)  
Expenses after custodian fee reduction(6)     1.35 %     1.36 %     1.28 %     0.91 %(7)  
Net investment income(6)     6.41 %     6.71 %     6.51 %     2.22 %(7)  
Net investment income per share   $ 0.935     $ 0.959     $ 0.921     $ 0.027    
††  The ratios reported above are based on net assets applicable solely to common shares. The ratios based on net assets, including amounts related to preferred shares, are as follows:  
Ratios (As a percentage of average total net assets):                                  
Net expenses     0.52 %     0.51 %     0.50 %          
Net expenses after custodian fee reduction     0.51 %     0.51 %     0.48 %          
Net investment income     4.28 %     4.43 %     4.42 %          
   The operating expenses of the Fund reflect a reduction of the investment adviser fee. Had such action not been taken, the ratios would have been as follows:  
Ratios (As a percentage of average total net assets):                                  
Expenses     0.84 %     0.83 %     0.82 %          
Expenses after custodian fee reduction     0.83 %     0.83 %     0.80 %          
Net investment income     3.96 %     4.11 %     4.10 %          
Senior Securities:                                  
Total preferred shares outstanding     7,800       7,800       7,800            
Asset coverage per preferred share(8)   $ 65,745     $ 64,524     $ 64,316            
Involuntary liquidation preference per preferred share(9)   $ 25,000     $ 25,000     $ 25,000            
Approximate market value per preferred share(9)   $ 25,000     $ 25,000     $ 25,000            

 

(1)  Computed using average common shares outstanding.

(2)  For the period from the start of business, August 30, 2002, to September 30, 2002.

(3)  Net asset value at beginning of period reflects the deduction of the sales load of $0.675 per share paid by the shareholder from the $15.000 offering price.

(4)  Total investment return on net asset value is calculated assuming a purchase at the offering price of $15.000 less the sales load of $0.675 per share paid by the shareholder on the first day and a sale at the net asset value on the last day of the period reported. Total investment return on market value is calculated assuming a purchase at the offering price of $15.000 less the sales load of $0.675 per share paid by the shareholder on the first day and a sale at the current market price on the last day of the period reported. Total investment return on net asset value and total investment return on market value are not computed on an annualized basis.

(5)  Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested. Total return is not computed on an annualized basis.

(6)  Ratios do not reflect the effect of dividend payments to preferred shareholders. Ratios to average net assets applicable to common shares reflect the Fund's leveraged capital structure.

(7)  Annualized.

(8)  Calculated by subtracting the Fund's total liabilities (not including the preferred shares) from the Fund's total assets, and dividing this by the number of preferred shares outstanding.

(9)  Plus accumulated and unpaid dividends.

See notes to financial statements

24



Eaton Vance Insured Municipal Bond Funds as of September 30, 2005

FINANCIAL STATEMENTS CONT'D

Financial Highlights

Selected data for a common share outstanding during the periods stated

    Insured New York Fund  
    Year Ended September 30,  
    2005(1)    2004(1)    2003(1)    2002(1)(2)   
Net asset value - Beginning of year (Common shares)   $ 14.390     $ 14.480     $ 14.690     $ 14.325 (3)   
Income (loss) from operations      
Net investment income   $ 1.002     $ 1.019     $ 0.981     $ 0.028    
Net realized and unrealized gain (loss)     0.349       (0.120 )     (0.006 )*     0.358    
Distributions to preferred shareholders from net investment income     (0.167 )     (0.089 )     (0.090 )     -    
Total income from operations   $ 1.184     $ 0.810     $ 0.885     $ 0.386    
Less distributions to common shareholders      
From net investment income   $ (0.844 )   $ (0.900 )   $ (0.900 )   $ -    
Total distributions to common shareholders   $ (0.844 )   $ (0.900 )   $ (0.900 )   $ -    
Preferred and Common shares offering costs charged to paid-in capital   $ -     $ -     $ (0.013 )   $ (0.021 )  
Preferred Shares underwriting discounts   $ -     $ -     $ (0.182 )   $ -    
Net asset value - End of year (Common shares)   $ 14.730     $ 14.390     $ 14.480     $ 14.690    
Market value - End of year (Common shares)   $ 13.680     $ 13.860     $ 13.450     $ 15.060    
Total Investment Return on Net Asset Value(5)      8.77 %     6.10 %     5.09 %     2.55 %(4)   
Total Investment Return on Market Value(5)      4.88 %     10.02 %     (4.78 )%     5.13 %(4)   

 

See notes to financial statements

25



Eaton Vance Insured Municipal Bond Funds as of September 30, 2005

FINANCIAL STATEMENTS CONT'D

Financial Highlights

Selected data for a common share outstanding during the periods stated

    Insured New York Fund  
    Year Ended September 30,  
    2005(1)    2004(1)    2003(1)    2002(1)(2)   
Ratios/Supplemental Data ††       
Net assets applicable to common shares, end of year (000's omitted)   $ 231,161     $ 225,972     $ 227,266     $ 223,739    
Ratios (As a percentage of average net assets applicable to common shares):                                  
Net expenses(6)     0.87 %     0.86 %     0.83 %     0.71 %(7)  
Net expenses after custodian fee reduction(6)     0.86 %     0.85 %     0.79 %     0.68 %(7)  
Net investment income(6)     6.81 %     7.11 %     6.83 %     2.26 %(7)  
Portfolio Turnover     23 %     33 %     64 %     8 %  
   The operating expenses of the Fund reflect a reduction of the investment adviser fee. Had such action not been taken, the ratios and net investment income per share would have been as follows:  
Ratios (As a percentage of average net assets applicable to common shares):                                  
Expenses(6)     1.39 %     1.38 %     1.34 %     1.03 %(7)  
Expenses after custodian fee reduction(6)     1.38 %     1.37 %     1.30 %     1.00 %(7)  
Net investment income(6)     6.29 %     6.59 %     6.33 %     1.94 %(7)  
Net investment income per share   $ 0.925     $ 0.944     $ 0.909     $ 0.024    
††  The ratios reported are based on net assets applicable solely to common shares. The ratios based on net assets, including amounts related to preferred shares, are as follows:  
Ratios (As a percentage of average total net assets):                                  
Net expenses     0.54 %     0.52 %     0.52 %          
Net expenses after custodian fee reduction     0.53 %     0.52 %     0.50 %          
Net investment income     4.21 %     4.35 %     4.31 %          
   The operating expenses of the Fund reflect a reduction of the investment adviser fee. Had such action not been taken, the ratios would have been as follows:  
Ratios (As a percentage of average total net assets):                                  
Expenses     0.86 %     0.84 %     0.84 %          
Expenses after custodian fee reduction     0.85 %     0.84 %     0.82 %          
Net investment income     3.89 %     4.03 %     3.99 %          
Senior Securities:                                  
Total preferred shares outstanding     5,700       5,700       5,700            
Asset coverage per preferred share(8)   $ 65,560     $ 64,646     $ 64,884            
Involuntary liquidation preference per preferred share(9)   $ 25,000     $ 25,000     $ 25,000            
Approximate market value per preferred share(9)   $ 25,000     $ 25,000     $ 25,000            

 

(1)  Computed using average common shares outstanding.

(2)  For the period from the start of business, August 30, 2002, to September 30, 2002.

(3)  Net asset value at beginning of period reflects the deduction of the sales load of $0.675 per share paid by the shareholder from the $15.000 offering price.

(4)  Total investment return on net asset value is calculated assuming a purchase at the offering price of $15.000 less the sales load of $0.675 per share paid by the shareholder on the first day and a sale at the net asset value on the last day of the period reported. Total investment return on market value is calculated assuming a purchase at the offering price of $15.000 less the sales load of $0.675 per share paid by the shareholder on the first day and a sale at the current market price on the last day of the period reported. Total investment return on net asset value and total investment return on market value are not computed on an annualized basis.

(5)  Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested. Total return is not computed on annualized basis.

(6)  Ratios do not reflect the effect of dividend payments to preferred shareholders. Ratios to average net assets applicable to common shares reflect the Fund's leveraged capital structure.

(7)  Annualized.

(8)  Calculated by subtracting the Fund's total liabilities (not including the preferred shares) from the Fund's total assets, and dividing this by the number of preferred shares outstanding.

(9)  Plus accumulated and unpaid dividends.

*  The per share amount is not in accord with the net realized and unrealized gain (loss) on investments for the period because of the timing of sales of Fund shares and the amount of the per share realized and unrealized gains and losses at such time.

See notes to financial statements

26



Eaton Vance Insured Municipal Bond Funds as of September 30, 2005

NOTES TO FINANCIAL STATEMENTS

1  Significant Accounting Policies

Eaton Vance Insured Municipal Bond Fund (Insured Municipal Fund), Eaton Vance Insured California Municipal Bond Fund (Insured California Fund), and Eaton Vance Insured New York Municipal Bond Fund (Insured New York Fund), (individually referred to as the Fund or collectively the Funds) are registered under the Investment Company Act of 1940 (the 1940 Act), as amended, as non-diversified, closed-end management investment companies. The Insured Municipal Fund was organized under the laws of the Commonwealth of Massachusetts by an Agreement and Declaration of Trust dated July 2, 2002. The Insured California Fund and the Insured New York Fund were organized under the laws of the Commonwealth of Massachusetts by an Agreement and Declaration of Trust dated July 8, 2002. Each Fund's investment objective is to achieve current income exempt from regular federal income tax, including alternative minimum tax, and taxes in its specified state. Each Fund seeks to achieve its objective by investing primarily in high grade municipal obligations that are insured as to the timely payment of principal and interest.

The following is a summary of significant accounting policies consistently followed by each Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America.

A  Investment Valuation - Municipal bonds and taxable obligations, if any, are normally valued on the basis of valuations furnished by a pricing service. Futures contracts and options on futures contracts listed on the commodity exchanges are valued at closing settlement prices. Over-the-counter options on futures contracts are normally valued at the mean between the latest bid and asked prices. Interest rate swaps are normally valued on the basis of valuations furnished by a broker. Short-term obligations, maturing in sixty days or less, are valued at amortized cost, which approximates value. Investments for which valuations or market quotations are not readily available are valued at fair value using methods determined in good faith by or at the direction of the Trustees.

B  Income - Interest income is determined on the basis of interest accrued, adjusted for amortization of premium or discount.

C  Federal Taxes - Each 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, if any, and tax-exempt income, including any net realized gain on investments. Therefore, no provision for federal income or excise tax is necessary. At September 30, 2005, the Funds, for federal income tax purposes, had capital loss carryovers which will reduce 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 Funds of any liability for federal income or excise tax. The amounts and expiration dates of the capital loss carryovers are as follows:

Fund   Amount   Expires  
Insured Municipal Fund   $ 1,072,880     September 30, 2011  
      4,954,488     September 30, 2013  
Insured California Fund     557,635     September 30, 2011  
      10,557,537     September 30, 2013  
Insured New York Fund     1,251,495     September 30, 2011  
      1,166,633     September 30, 2012  
      5,433,153     September 30, 2013  

 

In addition, each Fund intends to satisfy conditions which will enable it to designate distributions from the interest income generated by its investments in municipal obligations, which are exempt from regular federal income taxes when received by each Fund, as exempt-interest dividends.

D  Offering Costs - Costs incurred by the Funds in connection with the offerings of the common shares and preferred shares were recorded as a reduction of capital paid in excess of par applicable to common shares.

E  Financial Futures Contracts - Upon the entering of a financial futures contract, a Fund is required to deposit (initial margin) either in cash or securities an amount equal to a certain percentage of the purchase price indicated in the financial futures contract. Subsequent payments are made or received by a Fund (margin maintenance) each day, dependent on the daily fluctuations in the value of the underlying security, and are recorded for book purposes as unrealized gains or losses by a Fund. A Fund's investment in financial futures contracts is designed for both hedging against anticipated future changes in interest rates and investment purposes. Should interest rates move unexpectedly, a Fund may not achieve the anticipated benefits of the financial futures contracts and may realize a loss.

F  Options on Futures Contracts - Upon the purchase of a put option on a financial futures contract by a Fund, the premium paid is recorded as an investment, the value of which is marked-to-market daily. When a purchased option expires, a Fund will realize a loss in the

27



Eaton Vance Insured Municipal Bond Funds as of September 30, 2005

NOTES TO FINANCIAL STATEMENTS CONT'D

amount of the cost of the option. When a Fund enters into a closing sale transaction, a Fund will realize a gain or loss depending on whether the sales proceeds from the closing sale transaction are greater or less than the cost of the option. When a Fund exercises a put option, settlement is made in cash. The risk associated with purchasing put options is limited to the premium originally paid.

G  When-Issued and Delayed Delivery Transactions - The Funds may engage in when-issued and delayed delivery transactions. The Funds record when-issued securities on trade date and maintain security positions such that sufficient liquid assets will be available to make payments for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked-to-market daily and begin earning interest on settlement date.

H  Use of Estimates - The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.

I  Indemnifications - Under each Fund's organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to each Fund and shareholders are indemnified against personal liability for the obligations of each Fund. Additionally, in the normal course of business, each Fund enters into agreements with service providers that may contain indemnification clauses. Each Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against each Fund that have not yet occurred.

J  Expense Reduction - Investors Bank & Trust Company (IBT) serves as custodian of the Funds. Pursuant to the respective custodian agreements, IBT receives a fee reduced by credits which are determined based on the average daily cash balances each Fund maintains with IBT. All credit balances used to reduce the Funds' custodian fees are reported as a reduction of total expenses in the Statements of Operations.

K  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.

2  Auction Preferred Shares (APS)

Each Fund issued Auction Preferred Shares on October 29, 2002 in a public offering. The underwriting discounts and other offering costs were recorded as a reduction of the capital of the common shares of each Fund. Dividends on the APS, which accrue daily, are cumulative at a rate which was established at the offering of each Fund's APS and generally have been reset every seven days thereafter by an auction, unless a special dividend period has been set. Each series within a Fund is identical in all respects to the other(s), except for the dates of reset for the dividend rates.

Auction Preferred Shares issued and outstanding as of September 30, 2005 and dividend rate ranges for the year ended September 30, 2005 are as indicated below:

Fund   Preferred Shares
Issued and Outstanding
  Dividends Rate
Ranges
 
Insured Municipal Series A     4,740       1.00 % - 2.71%  
Insured Municipal Series B     4,740       1.07 % - 2.76%  
Insured Municipal Series C     4,740       1.70 % - 2.65%  
Insured Municipal Series D     4,740       1.40 % - 2.71%  
Insured Municipal Series E     4,740       1.00 % - 2.71%  
Insured California Series A     3,900       1.01 % - 2.81%  
Insured California Series B     3,900       1.05 % - 2.71%  
Insured New York Series A     2,850       1.20 % - 2.74%  
Insured New York Series B     2,850       0.91 % - 2.70%  

 

The APS are redeemable at the option of each Fund at a redemption price equal to $25,000 per share, plus accumulated and unpaid dividends on any dividend payment date. The APS are also subject to mandatory redemption at a redemption price equal to $25,000 per share, plus accumulated and unpaid dividends, if any Fund is in default for an extended period on its asset maintenance requirements with respect to the APS. If the dividends on the APS shall remain unpaid in an amount equal to two full years' dividends, the holders of the APS as a class have the right to elect a majority of the Board of Trustees. In general, the holders of the APS and the Common Shares have equal voting rights of one vote per share, except that the holders of the APS, as a separate class, have the right to elect at least two members of the Board of Trustees. The APS have a liquidation preference of $25,000 per share, plus accumulated and unpaid dividends. Each Fund is required to maintain certain asset coverage with respect to the APS as defined in each Fund's By-Laws and the Investment Company Act of 1940. Each Fund pays an annual fee equivalent to 0.25% of the preferred shares liquidation value for the remarketing efforts associated with the preferred auction.

28



Eaton Vance Insured Municipal Bond Funds as of September 30, 2005

NOTES TO FINANCIAL STATEMENTS CONT'D

3  Distributions to Shareholders

Each Fund intends to make monthly distributions of net investment income, after payments of any dividends on any outstanding APS. Distributions are recorded on the ex-dividend date. Distributions of realized capital gains, if any, are made at least annually. Distributions to preferred shareholders are recorded daily and are payable at the end of each dividend period. Each dividend payment period for the APS is generally seven days. The applicable dividend rate for APS on September 30, 2005 are listed below. For the year ended September 30, 2005, the amount of dividends each Fund paid to Auction Preferred shareholders and average APS dividend rates for such period were as follows:

Fund   APS
Dividend Rates
as of
September 30,
2005
  Dividends
Paid to
Preferred
Shareholders
from net investment
income for
the year ended
September 30,
2005
  Average
APS
Dividend
Rates for
the year ended
September 30,
2005
 
Insured Municipal Fund
Series A
    2.30 %     2,304,825       1.94 %  
Insured Municipal Fund
Series B
    2.65 %     2,142,654       1.81 %  
Insured Municipal Fund
Series C
    2.65 %     2,183,504       1.84 %  
Insured Municipal Fund
Series D
    2.60 %     2,314,519       1.95 %  
Insured Municipal Fund
Series E
    2.50 %     2,289,559       1.93 %  
Insured California Fund
Series A
    2.55 %     1,703,908       1.75 %  
Insured California Fund
Series B
    2.60 %     1,796,320       1.84 %  
Insured New York
Series A
    2.56 %     1,357,426       1.91 %  
Insured New York
Series B
    2.30 %     1,268,671       1.78 %  

 

The Funds distinguish 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 distributions paid for the years ended September 30, 2005 and September 30, 2004 was as follows:

Year Ended 9/30/05   Insured
Municipal
Fund
  Insured
California
Fund
  Insured
New York
Fund
 
Distributions declared from:  
Tax-exempt income   $ 71,048,527     $ 21,938,271     $ 15,883,165    
Ordinary Income   $ 3,914       -       -    
Year Ended 9/30/04  
Distributions declared from:  
Tax-exempt income   $ 67,627,979     $ 21,274,411     $ 15,527,043    

 

During the year ended September 30, 2005, the following amounts were reclassified due to differences between book and tax accounting for amortization and accretion on debt securities and market discount on disposal of securities:

    Insured
Municipal
Fund
  Insured
California
Fund
  Insured
New York
Fund
 
Increase (decrease):
Accumulated net realized
gain/(loss) on investments
  $ 377,211     $ 229,035     $ 19,893    
Accumulated
undistributed income
  $ (377,211 )   $ (229,035 )   $ (19,893 )  

 

These changes had no effect on the net assets or net asset value per share of the Funds.

As of September 30, 2005, the components of distributable earnings (accumulated losses) on a tax basis were as follows:

    Insured
Municipal
Fund
  Insured
California
Fund
  Insured
New York
Fund
 
Undistributed Income   $ 3,635,005     $ 872,205     $ 508,230    
Capital loss carryforward   $ (6,027,368 )   $ (11,115,172 )   $ (7,851,281 )  
Unrealized Gain   $ 89,709,401     $ 25,990,209     $ 18,931,461    
Other temporary differences   $ (10,086,519 )   $ (3,341,969 )   $ (1,931,631 )  

 

4  Investment Adviser Fee and Other Transactions with Affiliates

The investment adviser fee, computed at an annual rate of 0.65% of each Fund's average weekly gross assets, was earned by Eaton Vance Management (EVM) as compensation for investment advisory services rendered to each Fund. Except for Trustees of each Fund who are not members of EVM's organization, officers and Trustees receive

29



Eaton Vance Insured Municipal Bond Funds as of September 30, 2005

NOTES TO FINANCIAL STATEMENTS CONT'D

remuneration for their services to each Fund out of such investment adviser fee. For the year ended September 30, 2005, the fee was equivalent to 0.65% of each Fund's average weekly gross assets and amounted to $10,234,052, $3,318,949, and $2,428,490 for Insured Municipal Fund, Insured California Fund and Insured New York Fund, respectively. EVM also serves as the administrator of the Funds, but currently receives no compensation.

In addition, EVM has contractually agreed to reimburse the Fund for fees and other expenses in the amount of 0.32% of average weekly gross assets of each Fund during the first five full years of each Fund's operations, 0.24% of average weekly gross assets of each Fund in year six, 0.16% in year seven and 0.08% in year eight. For the year ended September 30, 2005, EVM contractually waived $5,038,302, $1,634,059 and $1,195,564 of its advisory fee for Insured Municipal Fund, Insured California Fund and Insured New York Fund, respectively. EVM has also agreed to reduce the investment adviser fee by an amount equal to that portion of commissions paid to broker dealers in execution of portfolio transactions attributed to the Fund that is consideration for third-party research services. For the year ended September 30, 2005, EVM waived $2,500 of its advisory fee for the Insured Municipal Fund.

Certain officers and one Trustee of each Fund are officers of the above organization.

5  Investments

Purchases and sales of investments, other than U.S. Government securities and short-term obligations, for the year ended September 30, 2005 were as follows:

Insured Municipal Fund  
Purchases   $ 807,769,976    
Sales     804,062,754    
Insured California Fund  
Purchases   $ 79,400,338    
Sales     82,258,208    
Insured New York Fund  
Purchases   $ 90,044,403    
Sales     85,932,485    

 

6  Federal Income Tax Basis of Unrealized Appreciation (Depreciation)

The cost and unrealized appreciation (depreciation) in value of the investments owned by each Fund at September 30, 2005, as computed for Federal income tax purposes, were as follows:

Insured Municipal Fund      
Aggregate cost   $ 1,530,803,070    
Gross unrealized appreciation   $ 82,795,780    
Gross unrealized depreciation     (3,107,744 )  
Net unrealized appreciation   $ 79,688,036    
Insured California Fund      
Aggregate cost   $ 489,490,303    
Gross unrealized appreciation   $ 23,404,154    
Gross unrealized depreciation     (728,517 )  
Net unrealized appreciation   $ 22,675,637    
Insured New York Fund      
Aggregate cost   $ 366,230,467    
Gross unrealized appreciation   $ 17,445,754    
Gross unrealized depreciation     (416,959 )  
Net unrealized appreciation   $ 17,028,795    

 

7  Shares of Beneficial Interest

Each Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional $0.01 par value common shares. For the year ended September 30, 2005 and the year ended September 30, 2004, there were no transactions in Fund shares.

8  Financial Instruments

Each 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 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 each 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

30



Eaton Vance Insured Municipal Bond Funds as of September 30, 2005

NOTES TO FINANCIAL STATEMENTS CONT'D

instruments is meaningful only when all related and offsetting transactions are considered.

A summary of obligations under these financial instruments at September 30, 2005 is as follows:

Futures Contracts


Fund
  Expiration
Date
 
Contracts
 
Position
  Aggregate
Cost
 
Value
  Net Unrealized
Appreciation
 
Insured
Municipal
  12/05   3,870 
U.S. Treasury Bond
  Short   $ (452,773,552 )   $ (442,752,187 )   $ 10,021,365    
Insured
California
  12/05   1,130 
U.S. Treasury Bond
  Short   $ (132,593,634 )   $ (129,279,062 )   $ 3,314,572    
Insured
New York
  12/05   726 
U.S. Treasury Bond
  Short   $ (84,961,604 )   $ (83,058,938 )   $ 1,902,666    

 

At September 30, 2005, each Fund had sufficient cash and/or securities to cover margin requirements on open futures contracts.

9  Overdraft Advances

Pursuant to the custodian agreement between the Funds and IBT, IBT may in its discretion advance funds to the Funds to make properly authorized payments. When such payments result in an overdraft by the Funds, the Funds are obligated to repay IBT at the current rate of interest charged by IBT for secured loans (currently, a rate above the Federal Funds rate). This obligation is payable on demand to IBT. IBT has a lien on the Fund's assets to the extent of any overdraft. At September 30, 2005, the Insured Municipal Bond Fund, Insured California Fund and Insured New York Fund had payments due to IBT pursuant to the foregoing arrangement of $18,249,177, $161,223 and $1,294,874, respectively.

31



Eaton Vance Insured Municipal Bond Funds as of September 30, 2005

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Trustees and Shareholders
of Eaton Vance Insured Municipal Bond Fund, Eaton Vance Insured California Municipal Bond Fund and Eaton Vance Insured New York Municipal Bond Fund:

We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Eaton Vance Insured Municipal Bond Fund, Eaton Vance Insured California Municipal Bond Fund, and Eaton Vance Insured New York Municipal Bond Fund (collectively, the "Funds") as of September 30, 2005, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the three years in the period then ended and for the period from the start of business, August 30, 2002 to September 30, 2002. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. An audit also 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, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned at September 30, 2005 by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the aforementioned Funds as of September 30, 2005, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and their financial highlights for each of the three years in the period then ended and for the period from the start of business, August 30, 2002 to September 30, 2002, in conformity with accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP
Boston, Massachusetts
November 18, 2005

32



Eaton Vance Insured Municipal Bond Funds as of September 30, 2005

OTHER MATTERS (Unaudited)

Each Fund held its Annual Meeting of Shareholders on July 22, 2005. The following action was taken by the shareholders of each Fund:

Item 1: The election of Benjamin C. Esty, Ronald A. Pearlman, Norton H. Reamer and Ralph F. Verni as Class III Trustees of the Fund for a three-year term expiring in 2008. Mr. Reamer was designated the Nominee to be elected by APS shareholders:

Fund   Nominee for
Class III Trustee
Elected by All
Shareholders
Benjamin C. Esty
  Nominee for
Class III Trustee
Elected by All
Shareholders
Ronald A. Pearlman
  Nominee for
Class III Trustee
Elected by APS
Shareholders
Norton H. Reamer
  Nominee for
Class III Trustee
Elected by All
Shareholders
Ralph F. Verni
 
Insured Municipal Fund:  
For     62,146,657       62,123,290       20,975       62,160,786    
Withheld     494,647       518,014       11       480,518    
Insured California Fund:  
For     21,222,130       21,226,330       7,245       21,234,580    
Withheld     170,506       166,306       6       158,056    
Insured New York Fund:  
For     15,303,051       15,299,771       5,679       15,311,514    
Withheld     172,618       175,898       2       164,155    

 

Results are rounded to the nearest whole number.

33



Eaton Vance Insured Municipal Bond Funds as of September 30, 2005

FEDERAL TAX INFORMATION (Unaudited)

The Form 1099-DIV you receive in January 2006 will show the tax status of all distributions paid to your account in calendar 2005. Shareholders are advised to consult their own tax adviser 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 exempt-interest dividends.

Exempt-Interest Dividends - The Funds designate the following amounts of dividends from net investment income as an exempt-interest dividend.

Insured Municipal Bond Fund     99.99 %  
Insured California Municipal Bond Fund     100.00 %  
Insured New York Municipal Bond Fund     100.00 %  

 

34



Eaton Vance Insured Municipal Bond Funds

DIVIDEND REINVESTMENT PLAN

Each Fund offers a dividend reinvestment plan (the Plan) pursuant to which shareholders may elect to have dividends and capital gains distributions automatically reinvested in common shares (the Shares) of the same Fund. You may elect to participate in the Plan by completing the Dividend Reinvestment Plan Application Form. If you do not participate, you will receive all distributions in cash paid by check mailed directly to you by PFPC Inc. as dividend paying agent. On the distribution payment date, if the net asset value per Share is equal to or less than the market price per Share plus estimated brokerage commissions, then new Shares will be issued. The number of Shares shall be determined by the greater of the net asset value per Share or 95% of the market price. Otherwise, Shares generally will be purchased on the open market by the Plan Agent. Distributions subject to income tax (if any) are taxable whether or not shares are reinvested.

If your shares are in the name of a brokerage firm, bank, or other nominee, you can ask the firm or nominee to participate in the Plan on your behalf. If the nominee does not offer the Plan, you will need to request that your shares be re-registered in your name with each Fund's transfer agent, PFPC Inc., or you will not be able to participate.

The Plan Agent's service fee for handling distributions will be paid by each Fund. Each participant will be charged their pro rata share of brokerage commissions on all open-market purchases.

Plan participants may withdraw from the Plan at any time by writing to the Plan Agent at the address noted on the following page. If you withdraw, you will receive shares in your name for all Shares credited to your account under the Plan. If a participant elects by written notice to the Plan Agent to have the Plan Agent sell part or all of his or her Shares and remit the proceeds, the Plan Agent is authorized to deduct a $5.00 fee plus brokerage commissions from the proceeds.

If you wish to participate in the Plan and your shares are held in your own name, you may complete the form on the following page and deliver it to the Plan Agent.

Any inquiries regarding the Plan can be directed to the Plan Agent, PFPC Inc., at 1-800-331-1710.

35



Eaton Vance Insured Municipal Bond Funds

APPLICATION FOR PARTCIPATION IN DIVIDEND REINVESTMENT PLAN

This form is for shareholders who hold their common shares in their own names. If your common shares are held in the name of a brokerage firm, bank, or other nominee, you should contact your nominee to see if it will participate in the Plan on your behalf. If you wish to participate in the Plan, but your brokerage firm, bank, or nominee is unable to participate on your behalf, you should request that your common shares be re-registered in your own name which will enable your participation in the Plan.

The following authorization and appointment is given with the understanding that I may terminate it at any time by terminating my participation in the Plan as provided in the terms and conditions of the Plan.

  Please print exact name on account

  Shareholder signature  Date

  Shareholder signature  Date

  Please sign exactly as your common shares are registered. All persons whose names appear on the share certificate must sign.

YOU SHOULD NOT RETURN THIS FORM IF YOU WISH TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS IN CASH. THIS IS NOT A PROXY.

This authorization form, when signed, should be mailed to the following address:

  Eaton Vance Insured Municipal Bond Funds
c/o PFPC Inc.
P.O. Box 43027
Providence, RI 02940-3027
800-331-1710

Number of Employees

Each Fund is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as a closed-end, nondiversified, management investment company and has no employees.

Number of Shareholders

As of September 30, 2005, our records indicate that there are 159, 64 and 19 registered shareholders for Insured Municipal Fund, Insured California Fund and Insured New York Fund, respectively, and approximately 32,500, 9,000 and 8,000 shareholders owning the Fund shares in street name, such as through brokers, banks and financial intermediaries for Insured Municipal Fund, Insured California Fund and Insured New York Fund, respectively.

If you are a street name shareholder and wish to receive Fund reports directly, which contain important information about a Fund, please write or call:

  Eaton Vance Distributors, Inc.
The Eaton Vance Building
255 State Street
Boston, MA 02109
1-800-225-6265

American Stock Exchange symbols

Insured Municipal Fund   EIM  
Insured California Fund   EVM  
Insured New York Fund   ENX  

 

36



Eaton Vance Insured Municipal Bond Funds

BOARD OF TRUSTEES' ANNUAL APPROVAL OF THE INVESTMENT ADVISORY AGREEMENTS

The investment advisory agreements between each of Eaton Vance Insured Municipal Bond Fund, Eaton Vance Insured California Municipal Bond Fund and Eaton Vance Insured New York Municipal Bond Fund (collectively the "Funds" or individually the "Fund"), and the investment adviser, Eaton Vance Management ("Eaton Vance"), each provide that the advisory agreement will continue in effect from year to year so long as its continuance is approved at least annually (i) by a vote of a majority of the noninterested Trustees of the Fund cast in person at a meeting called for the purpose of voting on such approval and (ii) by the Trustees of the Fund or by vote of a majority of the outstanding interests of the Fund.

In considering the annual approval of the investment advisory agreements between each Fund and the investment adviser, the Special Committee of the Board of Trustees considered information that had been provided throughout the year at regular Board meetings, as well as information furnished to the Special Committee for a series of meetings held in February and March in preparation for a Board meeting held on March 21, 2005 to specifically consider the renewal of the investment advisory agreements. Such information included, among other things, the following:

•An independent report comparing the advisory fees of each Fund with those of comparable funds;

An independent report comparing the expense ratio of each Fund to those of comparable funds;

•Information regarding Fund investment performance in comparison to relevant peer groups of funds and appropriate indices;

•The economic outlook and the general investment outlook in relevant investment markets;

•Eaton Vance's results and financial condition and the overall organization of the investment adviser;

•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;

•Eaton Vance's management of the relationship with the custodian, subcustodians and fund accountants;

•The resources devoted to Eaton Vance's compliance efforts undertaken on behalf of the funds it manages and the record of compliance with the investment policies and restrictions and with policies on personal securities transactions;

•The quality, nature, cost and character of the administrative and other non-investment management services provided by Eaton Vance and its affiliates; and

•The terms of the advisory agreement and the reasonableness and appropriateness of the particular fee paid by the Fund for the services described therein.

The Special Committee also considered the investment adviser's municipal bond portfolio management capabilities, including information relating to the education, experience, and number of investment professionals and other personnel who provide services under the investment advisory agreements. Specifically, the Special Committee considered the investment adviser's 30-person municipal bond team, which includes six portfolio managers and nine credit specialists who provide services to the Funds. The Special Committee noted that the investment adviser's municipal bond team affords the investment adviser extensive in-house research capabilities in addition to the other resources available to the investment adviser. The Special Committee also took into account the time and attention to be devoted by senior management to the Funds and the other funds in the complex. The Special Committee evaluated the level of skill required to manage the Funds and concluded that the human resources available at the investment adviser were appropriate to fulfill effectively its duties on behalf of the Funds.

In its review of comparative information with respect to each Fund's investment performance, the Special Committee concluded that each Fund has performed within a range that the Special Committee deemed

37



Eaton Vance Insured Municipal Bond Funds

BOARD OF TRUSTEES' ANNUAL APPROVAL OF THE INVESTMENT ADVISORY AGREEMENTS CONT'D

competitive. With respect to its review of investment advisory fees, the Special Committee concluded that the fees paid by each Fund are within the range of those paid by comparable funds within the mutual fund industry. In reviewing the information regarding the expense ratio of each Fund, the Special Committee concluded that each Fund's expense ratio is within a range it deemed to be competitive in comparison with comparable funds within the mutual fund industry.

In addition to the factors mentioned above, the Special Committee reviewed the level of the investment adviser's profits in providing investment management services for each Fund and for all Eaton Vance Funds as a group. The Special Committee also reviewed the level of profits of Eaton Vance and its affiliates in providing administration services for each Fund and for all Eaton Vance Funds as a group. The Special Committee also considered a contractual waiver of advisory fees for the first eight year's of each Fund's operations. In addition, the Special Committee considered the fiduciary duty assumed by the investment adviser in connection with the services rendered to each Fund and the business reputation of the investment adviser and its financial resources. The Trustees concluded that in light of the services rendered, the profits realized by the investment adviser are not unreasonable. The Special Committee also considered the fact that the Fund is not continuously offered and concluded that, in light of the level of the investment adviser's profits with respect to the Fund, the implementation of breakpoints is not appropriate.

The Special Committee did not consider any single factor as controlling in determining whether or not to renew the investment advisory agreements. Nor are the items described herein all the matters considered by the Special Committee. In assessing the information provided by Eaton Vance and its affiliates, the Special Committee also took into consideration the benefits to shareholders of investing in a fund that is a part of a large family of funds which provides a large variety of shareholder services.

Based on its consideration of the foregoing factors and conclusions, and such other factors and conclusions as it deemed relevant, and assisted by independent counsel, the Special Committee concluded that the renewal of the investment advisory agreements, including the fee structures (described herein), is in the interests of shareholders.

38



Eaton Vance Insured Municipal Bond Funds

MANAGEMENT AND ORGANIZATION

Fund Management. The Trustees and officers of Eaton Vance Insured Municipal Bond Fund (EIM), Eaton Vance Insured California Municipal Bond Fund (ICA), and Eaton Vance Insured New York Municipal Bond Fund (ENX), (the Funds) 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. The "noninterested Trustees" consist of those Trustees who are not "interested persons" of the Funds, 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 Funds' principal underwriter and a wholly-owned subsidiary of EVM.

Name and
Date of Birth
  Position(s)
with the
Funds
  Term of
Office and
Length of
Service
  Principal Occupation(s)
During Past Five Years
  Number of Portfolios
in Fund Complex
Overseen By
Trustee(1) 
  Other Directorships Held  
Interested Trustee(s)                          
James B. Hawkes
11/9/41
  Trustee and
Vice President
  Trustee until 2007. 3 years. Trustee and Vice President since 2002   Chairman, President and Chief Executive Officer of BMR, EVC, EVM and EV; Director of EV; Vice President and Director of EVD. Trustee and/or officer of 160 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 Funds.     160     Director of EVC  
Noninterested Trustee(s)                          
Benjamin C. Esty
1/2/63
  Trustee   Until 2008. 3 years. Trustee since 2005   Professor, Harvard University Graduate School of Business Administration (since 2003). Formerly, Associate Professor, Harvard University Graduate School of Business Administration (2000-2003).     151     None  
Samuel L. Hayes,
III(A) 2/23/35
  Trustee and Chairman
of the Board
  Trustee until 2007. 3 years. Trustee since 2002 and Chairman of the Board since 2005   Jacob H. Schiff Professor of Investment Banking Emeritus, Harvard University Graduate School of Business Administration. Director of Yakima Products, Inc. (manufacturer of automotive accessories) (since 2001) and Director of Telect, Inc. (telecommunications services company) (since 2000).     160     Director of Tiffany & Co. (specialty retailer)  
William H. Park
9/19/47
  Trustee   Until 2006. 3 years. Trustee since 2003   President and Chief Executive Officer, Prizm Capital Management, LLC (investment management firm) (since 2002). Formerly, Executive Vice President and Chief Financial Officer, United Asset Management Corporation (a holding company owning institutional investment management firms) (1982-2001).     160     None  
Ronald A. Pearlman
7/10/40
  Trustee   Until 2008. 3 years. Trustee since 2003   Professor of Law, Georgetown University Law Center (since 1999). Formerly; Tax Partner, Covington & Burling, Washington, DC (1991-2000).     160     None  
Norton H. Reamer(A)
9/21/35
  Trustee   Until 2008. 3 years. Trustee since 2002   President, Chief Executive 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). Formerly, Chairman, and Chief Operating Officer, Hellman, Jordan Management Co., Inc. (an investment management company) (2000-2003). Formerly, Advisory Director of Berkshire Capital Corporation (investment banking firm) (2002-2003). Formerly, Chairman of the Board, United Asset Management Corporation (a holding company owning institutional investment management firms) and Chairman, President and Director, UAM Funds (mutual funds) (1980-2000).      160     None  

 

39



Eaton Vance Insured Municipal Bond Funds

MANAGEMENT AND ORGANIZATION CONT'D

Name and
Date of Birth
  Position(s)
with the
Funds
  Term of
Office and
Length of
Service
  Principal Occupation(s)
During Past Five Years
  Number of Portfolios
in Fund Complex
Overseen By
Trustee(1) 
  Other Directorships Held  
Noninterested Trustee(s) (continued)                      
Lynn A. Stout
9/14/57
  Trustee   Until 2008. 3 years. Trustee since 2002   Professor of Law, University of California at Los Angeles School of Law (since July 2001). Formerly, Professor of Law, Georgetown University Law Center.     160     None  
Ralph F. Verni 1/26/43   Trustee   Until 2008. 3 years. Trustee since 2005   Consultant and private investor (since 2000). Formerly, President and Chief Executive Officer, Redwood Investment Systems, Inc. (software developer) (2000). Formerly, President and Chief Executive Officer, State Street Research & Management (investment advisor), SSRM Holdings (parent of State Street Research & Management), and SSR Realty (institutional realty manager) (1992-2000).     151     Director of W.P. Carey & Company LLC (manager of real estate investment trusts)  
Principal Officers who are not Trustees                      

 

Name and
Date of Birth
  Position(s)
with the
Funds
  Term of
Office and
Length of
Service
  Principal Occupation(s)
During Past Five Years
 
Cynthia J. Clemson
3/2/63
  President of ICA and ENX; Vice President
of EIM
  President of ICA and ENX since 2005*; Vice President of EIM since 2004   Vice President of EVM and BMR. Officer of 85 registered investment companies managed by EVM or BMR.  
Robert B. MacIntosh
1/22/57
  President of EIM; Vice President of ICA 
and ENX
  President of EIM since 2005*; Vice President of ICA and ENX since 2002   Vice President of EVM and BMR. Officer of 85 registered investment companies managed by EVM or BMR.  
Barbara E. Campbell
6/19/57
  Treasurer   Since 2005*   Vice President of EVM and BMR. Officer of 160 registered investment companies managed by EVM or BMR.  
Alan R. Dynner
10/10/40
  Secretary   Since 2002   Vice President, Secretary and Chief Leagal Officer of BMR, EVM, EVD, EV and EVC. Officer of 160 registered investment companies managed by EVM or BMR.  
Paul M. O'Neil
7/1/53
  Chief Compliance Officer   Since 2004   Vice President of EVM and BMR. Officer of 160 registered investment companies managed by EVM or BMR.  

 

(1)  Includes both master and feeder funds in a master-feeder structure.

(A)  APS Trustee.

*  Prior to 2005, Ms. Clemson served as Vice President of EVM since 2002 and of ENX since 2004. Prior to 2005, Mr. MacIntosh served as Vice President since 2002 and Ms. Campbell served as Assistant Treasurer since 2002.

The SAI for the Funds include additional information about the Trustees and Officers of the Funds and can be obtained without charge by calling 1-800-225-6265.

40



This Page Intentionally Left Blank



Investment Adviser and Administrator
of Eaton Vance Insured Municipal Bond
Funds Eaton Vance Management

The Eaton Vance Building
255 State Street
Boston, MA 02109

Custodian
Investors Bank & Trust Company

200 Clarendon Street
Boston, MA 02116

Transfer Agent and Dividend Disbursing Agent
PFPC Inc.

Attn: Eaton Vance Insured Municipal Bond Funds
P.O. Box 43027
Providence, RI 02940-3027
(800) 331-1710

Independent Registered Public Accounting Firm
Deloitte & Touche LLP

200 Berkeley Street
Boston, MA 02116-5022

Eaton Vance Insured Municipal Bond Funds
The Eaton Vance Building
255 State Street
Boston, MA 02109



1453-11/05  CE-IMBSRC



 

Item 2. Code of Ethics

 

The registrant has adopted a code of ethics applicable to its Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer.  The registrant undertakes to provide a copy of such code of ethics to any person upon request, without charge, by calling 1-800-262-1122.

 

Item 3. Audit Committee Financial Expert

 

The registrant’s Board has designated William H. Park, Samuel L. Hayes, III and Norton H. Reamer, each an independent trustee, as its audit committee financial experts.  Mr. Park is a certified public accountant who is the President and Chief Executive Officer of Prizm Capital Management, LLC (investment management firm).  Previously, he served as Executive Vice President and Chief Financial Officer of United Asset Management Corporation (“UAM”) (a holding company owning institutional investment management firms).  Mr. Hayes is the Jacob H. Schiff Professor of Investment Banking Emeritus of the Harvard University Graduate School of Business Administration.  Mr. Reamer is the President, Chief Executive Officer and a Director of Asset Management Finance Corp. (a specialty finance company serving the investment management industry) and is President of Unicorn Corporation (an investment and financial advisory services company).  Formerly, Mr. Reamer was Chairman of Hellman, Jordan Management Co., Inc. (an investment management company) and Advisory Director of Berkshire Capital Corporation (an investment banking firm), Chairman of the Board of UAM and Chairman, President and Director of the UAM Funds (mutual funds).

 

Item 4. Principal Accountant Fees and Services

 

(a) –(d)

 

The following table presents the aggregate fees billed to the registrant for the registrant’s fiscal years ended September 30, 2004 and September 30, 2005 by the Fund’s principal accountant for professional services rendered for the audit of the registrant’s annual financial statements and fees billed for other services rendered by the principal accountant during such period.

 

Fiscal Years Ended

 

9/30/04

 

9/30/05

 

 

 

 

 

 

 

Audit Fees

 

$

63,040

 

$

63,670

 

 

 

 

 

 

 

Audit-Related Fees(1)

 

4,950

 

5,000

 

 

 

 

 

 

 

Tax Fees(2)

 

6,100

 

6,405

 

 

 

 

 

 

 

All Other Fees(3)

 

0

 

0

 

 

 

 

 

 

 

Total

 

$

74,090

 

$

75,075

 

 


(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 the registrant’s financial statements and are not reported under the category of audit fees and specifically include fees for the performance of certain agreed-upon procedures relating to the registrant’s auction preferred shares.

(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 and other tax related compliance/planning matters.

(3)

 

All other fees consist of the aggregate fees billed for products and services provided by the registrant’s 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 to the registrant by the registrant’s principal accountant for the registrant’s fiscal years ended September 30, 2004 and September 30, 2005; 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 for the registrant’s principal accountant for the same time periods, respectively.

 

Fiscal Years Ended

 

9/30/04

 

9/30/05

 

 

 

 

 

 

 

Registrant

 

$

11,050

 

$

11,405

 

 

 

 

 

 

 

Eaton Vance(1)

 

$

329,084

 

$

223,443

 

 


(1) Eaton Vance Management, a subsidiary of Eaton Vance Corp., acts as the registrant’s investment adviser and administrator.

 

(h) The registrant’s audit committee has considered whether the provision by the registrant’s principal accountant 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 accountant’s independence.

 

Item 5.  Audit Committee of Listed registrants

 

The registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities and Exchange Act of 1934, as amended.  Norton H. Reamer (Chair), Samuel L. Hayes, III, William H. Park, Lynn A. Stout and Ralph E. Verni are the members of the registrant’s audit committee.

 

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

 

The Board of Trustees of the Trust has adopted a proxy voting policy and procedure (the “Fund Policy”), pursuant to which the Trustees have delegated proxy voting responsibility to the Fund’s investment adviser and adopted the investment adviser’s proxy voting policies and procedures (the “Policies”) which are described below.  The Trustees will review the Fund’s proxy voting records from time to time and will annually consider approving the Policies for the upcoming year.  In the event that a conflict of interest arises between the Fund’s shareholders and the investment adviser, the administrator, or any of their affiliates or any affiliate of the Fund, the investment adviser will generally refrain from voting the proxies related to the companies giving rise to such conflict until it consults with the Board’s Special Committee except as contemplated under the Fund Policy.  The Board’s Special Committee will instruct the investment adviser on the appropriate course of action.

 

The Policies are designed to promote accountability of a company’s management to its shareholders and to align the interests of management with those shareholders.  The investment adviser will generally support company management on proposals relating to environmental and social policy issues, on matters regarding the state of organization of the company and routine matters related to corporate administration which are not expected to have a significant economic impact on the company or its shareholders.  On all other matters, the investment adviser will review each matter on a case-by-case basis and reserves the right to deviate from the Policies’ guidelines when it believes the situation warrants such a deviation.  The Policies include voting guidelines for matters relating to, among other things, the election of directors, approval of independent auditors, executive compensation, corporate structure and anti-takeover defenses.  The investment adviser may abstain from voting from time to time where it determines that the costs associated with voting a proxy outweighs the benefits derived from exercising the right to vote.

 

In addition, the investment adviser will monitor situations that may result in a conflict of interest between the Fund’s shareholders and the investment adviser, the administrator, or any of their affiliates or any affiliate of the Fund by maintaining a list of significant existing and prospective corporate clients.  The investment adviser’s personnel responsible for reviewing and voting proxies on behalf of the Fund will report any proxy received or expected to be received from a company included on that list to members of senior management of the investment adviser identified in the Policies. Such members of senior management will determine if a conflict exists.  If a conflict does exist, the investment adviser will seek instruction on how to vote from the Special Committee.

 

Information on how the Fund voted proxies relating to portfolio securities during the most recent 12 month period ended June 30 is available (1) without charge, upon request, by calling 1-800-262-1122, and (2) on the Securities and Exchange Commission’s website at http://www.sec.gov.

 

Item 8. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

 

No such purchases this period.

 



 

Item 9.           Submission of Matters to a Vote of Security Holders.

 

Effective February 7, 2005, the Governance Committee of the Board of Trustees revised the procedures by which a Fund’s shareholders may recommend nominees to the registrant’s Board of Trustees to add the following (highlighted):

 

 The Governance Committee shall, when identifying candidates for the position of Independent Trustee, consider any such candidate recommended by a shareholder of a Fund if such recommendation contains  (i)sufficient background information concerning the candidate, including evidence the candidate is willing to serve as an Independent Trustee if selected for the position; and (ii) is received in a sufficiently timely manner (and in any event no later than the date specified for receipt of shareholder proposals in any applicable proxy statement with respect to a Fund).  Shareholders shall be directed to address any such recommendations in writing to the attention of the Governance Committee, c/o the Secretary of the Fund. The Secretary shall retain copies of any shareholder recommendations which meet the foregoing requirements for a period of not more than 12 months following receipt. The Secretary shall have no obligation to acknowledge receipt of any shareholder recommendations.

 

Item 10. Controls and Procedures

 

(a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.

 

(b) There have been no changes in the registrant’s internal controls over financial reporting during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 11. Exhibits

 

(a)(1)

 

Registrant’s Code of Ethics – Not applicable (please see Item 2).

(a)(2)(i)

 

Treasurer’s Section 302 certification.

(a)(2)(ii)

 

President’s Section 302 certification.

(b)

 

Combined Section 906 certification.

 



 

Signatures

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Eaton Vance Insured Municipal Bond Fund

 

By:

/s/ Robert B. MacIntosh

 

 

Robert B. MacIntosh

 

President

 

 

 

 

Date:

November 16, 2005

 

 

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:

November 16, 2005

 

 

 

 

 

By:

/s/ Robert B. MacIntosh

 

 

Robert B. MacIntosh

 

President

 

 

 

 

Date:

November 16, 2005