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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: 811-01545
Eaton Vance Special Investment Trust
(Exact Name of Registrant as Specified in Charter)
Two International Place, Boston, Massachusetts 02110
(Address of Principal Executive Offices)
Maureen A. Gemma
Two International Place, Boston, Massachusetts 02110
(Name and Address of Agent for Services)
(617) 482-8260
(Registrant’s Telephone Number)
December 31
Date of Fiscal Year End
June 30, 2020
Date of Reporting Period
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Item 1. | Reports to Stockholders |
Table of Contents
Eaton Vance
Balanced Fund
Semiannual Report
June 30, 2020
Important Note. Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semi-annual shareholder reports will no longer be sent by mail unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (eatonvance.com/funddocuments), and you will be notified by mail each time a report is posted and provided with a website address to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you are a direct investor, you may elect to receive shareholder reports and other communications from the Fund electronically by signing up for e-Delivery at eatonvance.com/edelivery. If you own your shares through a financial intermediary (such as a broker-dealer or bank), you must contact your financial intermediary to sign up.
You may elect to receive all future Fund shareholder reports in paper free of charge. If you are a direct investor, you can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by calling 1-800-262-1122. If you own these shares through a financial intermediary, you must contact your financial intermediary or follow instructions included with this disclosure, if applicable, to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all Eaton Vance funds held directly or to all funds held through your financial intermediary, as applicable.
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Commodity Futures Trading Commission Registration. Effective December 31, 2012, the Commodity Futures Trading Commission (“CFTC”) adopted certain regulatory changes that subject registered investment companies and advisers to regulation by the CFTC if a fund invests more than a prescribed level of its assets in certain CFTC-regulated instruments (including futures, certain options and swap agreements) or markets itself as providing investment exposure to such instruments. The investment adviser has claimed an exclusion from the definition of “commodity pool operator” under the Commodity Exchange Act with respect to its management of the Fund. Accordingly, neither the Fund nor the adviser with respect to the operation of the Fund is subject to CFTC regulation. Because of its management of other strategies, the Fund’s adviser is registered with the CFTC as a commodity pool operator. The adviser is also registered as a commodity trading advisor.
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.
This report must be preceded or accompanied by a current summary prospectus or prospectus. Before investing, investors should consider carefully the investment objective, risks, and charges and expenses of a mutual fund. This and other important information is contained in the summary prospectus and prospectus, which can be obtained from a financial intermediary. Prospective investors should read the prospectus carefully before investing. For further information, please call 1-800-262-1122.
Table of Contents
Semiannual Report June 30, 2020
Eaton Vance
Balanced Fund
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Table of Contents
Eaton Vance
Balanced Fund
June 30, 2020
Portfolio Managers Charles B. Gaffney, Vishal Khanduja, CFA and Brian S. Ellis, CFA
% Average Annual Total Returns | Class Inception Date | Performance Inception Date | Six Months | One Year | Five Years | Ten Years | ||||||||||||||||||
Class A at NAV | 04/01/1932 | 04/01/1932 | 0.12 | % | 7.12 | % | 7.20 | % | 9.60 | % | ||||||||||||||
Class A with 5.75% Maximum Sales Charge | — | — | –5.63 | 0.96 | 5.94 | 8.95 | ||||||||||||||||||
Class C at NAV | 11/02/1993 | 04/01/1932 | –0.23 | 6.41 | 6.41 | 8.78 | ||||||||||||||||||
Class C with 1% Maximum Sales Charge | — | — | –1.23 | 5.41 | 6.41 | 8.78 | ||||||||||||||||||
Class I at NAV | 09/28/2012 | 04/01/1932 | 0.24 | 7.49 | 7.48 | 9.81 | ||||||||||||||||||
Class R at NAV | 05/02/2016 | 04/01/1932 | 0.02 | 6.92 | 6.99 | 9.49 | ||||||||||||||||||
Class R6 at NAV | 05/02/2016 | 04/01/1932 | 0.26 | 7.55 | 7.53 | 9.84 | ||||||||||||||||||
| ||||||||||||||||||||||||
S&P 500® Index | — | — | –3.08 | % | 7.51 | % | 10.72 | % | 13.98 | % | ||||||||||||||
Bloomberg Barclays U.S. Aggregate Bond Index | — | — | 6.14 | 8.74 | 4.30 | 3.82 | ||||||||||||||||||
Blended Index | — | — | 0.98 | 8.58 | 8.41 | 10.08 | ||||||||||||||||||
% Total Annual Operating Expense Ratios3 | Class A | Class C | Class I | Class R | Class R6 | |||||||||||||||||||
0.98 | % | 1.73 | % | 0.73 | % | 1.23 | % | 0.68 | % |
See Endnotes and Additional Disclosures in this report.
Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or offering price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance for periods less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to eatonvance.com.
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Eaton Vance
Balanced Fund
June 30, 2020
Asset Allocation (% of total investments)
Fixed Income Allocation (% of total investments)
Equity Investments Sector Allocation (% of total investments)
See Endnotes and Additional Disclosures in this report.
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Eaton Vance
Balanced Fund
June 30, 2020
Endnotes and Additional Disclosures
1 | S&P 500® Index is an unmanaged index of large-cap stocks commonly used as a measure of U.S. stock market performance. S&P Dow Jones Indices are a product of S&P Dow Jones Indices LLC (“S&P DJI”) and have been licensed for use. S&P® and S&P 500® are registered trademarks of S&P DJI; Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); S&P DJI, Dow Jones and their respective affiliates do not sponsor, endorse, sell or promote the Fund, will not have any liability with respect thereto and do not have any liability for any errors, omissions, or interruptions of the S&P Dow Jones Indices. Bloomberg Barclays U.S. Aggregate Bond Index is an unmanaged index of domestic investment-grade bonds, including corporate, government and mortgage-backed securities. The Blended Index consists of 60% S&P 500® Index and 40% Bloomberg Barclays U.S. Aggregate Bond Index, rebalanced monthly. Unless otherwise stated, index returns do not reflect the effect of any applicable sales charges, commissions, expenses, taxes or leverage, as applicable. It is not possible to invest directly in an index. |
2 | Total Returns at NAV do not include applicable sales charges. If sales charges were deducted, the returns would be lower. Total Returns shown with maximum sales charge reflect the stated maximum sales charge. Unless otherwise stated, performance does not reflect the deduction of taxes on Fund distributions or redemptions of Fund shares. |
Performance prior to the inception date of a class may be linked to the performance of an older class of the Fund. This linked performance is adjusted for any applicable sales charge, but is not adjusted for class expense differences. If adjusted for such differences, the performance would be different. The performance of Class I and Class R is linked to Class A and the performance of Class R6 is linked to Class I. Performance presented in the Financial Highlights included in the financial statements is not linked. |
3 | Source: Fund prospectus. The expense ratios for the current reporting period can be found in the Financial Highlights section of this report. |
4 | Fund invests in one or more affiliated investment companies (Portfolios). References to investments are to the aggregate holdings of the Fund, including its pro rata share of each Portfolio in which it invests. |
Fund profile subject to change due to active management. |
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Table of Contents
Eaton Vance
Balanced Fund
June 30, 2020
Example: As a Fund shareholder, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases and redemption fees (if applicable); and (2) ongoing costs, including management fees; distribution and/or service fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of Fund investing and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2020 – June 30, 2020).
Actual Expenses: The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes: The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the actual Fund expense ratio and an assumed rate of return of 5% per year (before expenses), which is not the actual Fund return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption fees (if applicable). Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would be higher.
Beginning Account Value (1/1/20) | Ending Account Value (6/30/20) | Expenses Paid During Period* (1/1/20 – 6/30/20) | Annualized Expense Ratio | |||||||||||||
Actual | ||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,001.20 | $ | 4.83 | ** | 0.97 | % | |||||||
Class C | $ | 1,000.00 | $ | 997.70 | $ | 8.54 | ** | 1.72 | % | |||||||
Class I | $ | 1,000.00 | $ | 1,002.40 | $ | 3.58 | ** | 0.72 | % | |||||||
Class R | $ | 1,000.00 | $ | 1,000.20 | $ | 6.07 | ** | 1.22 | % | |||||||
Class R6 | $ | 1,000.00 | $ | 1,002.60 | $ | 3.34 | 0.67 | % | ||||||||
Hypothetical | ||||||||||||||||
(5% return per year before expenses) | ||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,020.00 | $ | 4.87 | ** | 0.97 | % | |||||||
Class C | $ | 1,000.00 | $ | 1,016.30 | $ | 8.62 | ** | 1.72 | % | |||||||
Class I | $ | 1,000.00 | $ | 1,021.30 | $ | 3.62 | ** | 0.72 | % | |||||||
Class R | $ | 1,000.00 | $ | 1,018.80 | $ | 6.12 | ** | 1.22 | % | |||||||
Class R6 | $ | 1,000.00 | $ | 1,021.50 | $ | 3.37 | 0.67 | % |
* | Expenses are equal to the Fund’s annualized expense ratio for the indicated Class, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). The Example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on December 31, 2019. The Example reflects the expenses of both the Fund and the Portfolios. |
** | Absent an allocation of certain expenses to an affiliate, expenses would be higher. |
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Eaton Vance
Balanced Fund
June 30, 2020
Statement of Assets and Liabilities (Unaudited)
Assets | June 30, 2020 | |||
Investment in Core Bond Portfolio, at value (identified cost, $391,526,859) | $ | 393,899,457 | ||
Investment in Stock Portfolio, at value (identified cost, $435,083,483) | 567,895,434 | |||
Receivable for Fund shares sold | 762,533 | |||
Total assets | $ | 962,557,424 | ||
Liabilities |
| |||
Payable for Fund shares redeemed | $ | 1,722,580 | ||
Payable to affiliates: | ||||
Administration fee | 31,291 | |||
Distribution and service fees | 261,614 | |||
Trustees’ fees | 125 | |||
Accrued expenses | 158,945 | |||
Total liabilities | $ | 2,174,555 | ||
Net Assets | $ | 960,382,869 | ||
Sources of Net Assets |
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Paid-in capital | $ | 806,129,722 | ||
Distributable earnings | 154,253,147 | |||
Net Assets | $ | 960,382,869 | ||
Class A Shares |
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Net Assets | $ | 343,000,107 | ||
Shares Outstanding | 35,021,794 | |||
Net Asset Value and Redemption Price Per Share | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 9.79 | ||
Maximum Offering Price Per Share | ||||
(100 ÷ 94.25 of net asset value per share) | $ | 10.39 | ||
Class C Shares |
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Net Assets | $ | 230,922,315 | ||
Shares Outstanding | 23,474,084 | |||
Net Asset Value and Offering Price Per Share* | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 9.84 | ||
Class I Shares |
| |||
Net Assets | $ | 336,268,884 | ||
Shares Outstanding | 34,321,747 | |||
Net Asset Value, Offering Price and Redemption Price Per Share | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 9.80 | ||
Class R Shares |
| |||
Net Assets | $ | 6,972,088 | ||
Shares Outstanding | 714,398 | |||
Net Asset Value, Offering Price and Redemption Price Per Share | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 9.76 | ||
Class R6 Shares |
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Net Assets | $ | 43,219,475 | ||
Shares Outstanding | 4,410,396 | |||
Net Asset Value, Offering Price and Redemption Price Per Share | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 9.80 |
On sales of $50,000 or more, the offering price of Class A shares is reduced.
* | Redemption price per share is equal to the net asset value less any applicable contingent deferred sales charge. |
6 | See Notes to Financial Statements. |
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Eaton Vance
Balanced Fund
June 30, 2020
Statement of Operations (Unaudited)
Investment Income | Six Months Ended June 30, 2020 | |||
Dividends allocated from Portfolios (net of foreign taxes, $71,170) | $ | 4,903,570 | ||
Interest allocated from Portfolios (net of foreign taxes, $130) | 5,785,989 | |||
Expenses allocated from Portfolios | (2,655,702 | ) | ||
Total investment income from Portfolios | $ | 8,033,857 | ||
Expenses | ||||
Administration fee | $ | 183,956 | ||
Distribution and service fees | ||||
Class A | 415,018 | |||
Class C | 1,124,748 | |||
Class R | 15,776 | |||
Trustees’ fees and expenses | 250 | |||
Custodian fee | 26,030 | |||
Transfer and dividend disbursing agent fees | 317,748 | |||
Legal and accounting services | 31,133 | |||
Printing and postage | 34,725 | |||
Registration fees | 53,371 | |||
Miscellaneous | 7,099 | |||
Total expenses | $ | 2,209,854 | ||
Deduct — | ||||
Allocation of expenses to affiliate | $ | 2,894 | ||
Total expense reductions | $ | 2,894 | ||
Net expenses | $ | 2,206,960 | ||
Net investment income | $ | 5,826,897 | ||
Realized and Unrealized Gain (Loss) from Portfolios | ||||
Net realized gain (loss) — | ||||
Investment transactions | $ | (6,628,611 | ) | |
Financial futures contracts | 3,185,786 | |||
Foreign currency transactions | (7,309 | ) | ||
Net realized loss | $ | (3,450,134 | ) | |
Change in unrealized appreciation (depreciation) — | ||||
Investments | $ | (8,257,394 | ) | |
Financial futures contracts | 807,553 | |||
Foreign currency | 651 | |||
Net change in unrealized appreciation (depreciation) | $ | (7,449,190 | ) | |
Net realized and unrealized loss | $ | (10,899,324 | ) | |
Net decrease in net assets from operations | $ | (5,072,427 | ) |
7 | See Notes to Financial Statements. |
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Eaton Vance
Balanced Fund
June 30, 2020
Statements of Changes in Net Assets
Increase (Decrease) in Net Assets | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
From operations — | ||||||||
Net investment income | $ | 5,826,897 | $ | 10,730,617 | ||||
Net realized gain (loss) | (3,450,134 | ) | 40,447,753 | |||||
Net change in unrealized appreciation (depreciation) | (7,449,190 | ) | 127,975,689 | |||||
Net increase (decrease) in net assets from operations | $ | (5,072,427 | ) | $ | 179,154,059 | |||
Distributions to shareholders — | ||||||||
Class A | $ | (2,472,300 | ) | $ | (13,354,072 | ) | ||
Class B | — | (4,525 | ) | |||||
Class C | (858,613 | ) | (7,054,249 | ) | ||||
Class I | (2,780,887 | ) | (12,155,136 | ) | ||||
Class R | (41,724 | ) | (180,605 | ) | ||||
Class R6 | (362,562 | ) | (1,599,307 | ) | ||||
Total distributions to shareholders | $ | (6,516,086 | ) | $ | (34,347,894 | ) | ||
Transactions in shares of beneficial interest — | ||||||||
Proceeds from sale of shares | ||||||||
Class A | $ | 24,518,297 | $ | 53,482,468 | ||||
Class B | — | 190 | ||||||
Class C | 23,935,542 | 33,197,069 | ||||||
Class I | 95,768,175 | 130,863,717 | ||||||
Class R | 1,741,543 | 3,294,963 | ||||||
Class R6 | 4,356,588 | 13,926,389 | ||||||
Net asset value of shares issued to shareholders in payment of distributions declared | ||||||||
Class A | 2,231,514 | 12,267,588 | ||||||
Class B | — | 4,171 | ||||||
Class C | 817,173 | 6,717,511 | ||||||
Class I | 2,393,098 | 10,372,652 | ||||||
Class R | 41,724 | 180,605 | ||||||
Class R6 | 362,562 | 1,599,307 | ||||||
Cost of shares redeemed | ||||||||
Class A | (36,309,162 | ) | (85,709,944 | ) | ||||
Class B | — | (271,291 | ) | |||||
Class C | (25,141,345 | ) | (44,503,151 | ) | ||||
Class I | (78,572,498 | ) | (69,730,525 | ) | ||||
Class R | (661,053 | ) | (669,135 | ) | ||||
Class R6 | (3,488,882 | ) | (7,122,601 | ) | ||||
Net asset value of shares converted(1) | ||||||||
Class A | 2,470,372 | 20,785,169 | ||||||
Class B | — | (1,316,238 | ) | |||||
Class C | (2,470,372 | ) | (19,468,931 | ) | ||||
Net increase in net assets from Fund share transactions | $ | 11,993,276 | $ | 57,899,983 | ||||
Other capital — | ||||||||
Portfolio transaction fee contributed to Stock Portfolio | $ | (161,182 | ) | $ | (279,711 | ) | ||
Portfolio transaction fee allocated from Stock Portfolio | 159,535 | 264,070 | ||||||
Net decrease in net assets from other capital | $ | (1,647 | ) | $ | (15,641 | ) | ||
Net increase in net assets | $ | 403,116 | $ | 202,690,507 | ||||
Net Assets |
| |||||||
At beginning of period | $ | 959,979,753 | $ | 757,289,246 | ||||
At end of period | $ | 960,382,869 | $ | 959,979,753 |
(1) | Includes the conversion of Class B to Class A shares at the close of business on October 15, 2019 upon the termination of Class B. |
8 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Balanced Fund
June 30, 2020
Financial Highlights
Class A | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 9.850 | $ | 8.280 | $ | 9.110 | $ | 8.410 | $ | 8.190 | $ | 8.460 | ||||||||||||
Income (Loss) From Operations |
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Net investment income(1) | $ | 0.064 | $ | 0.125 | $ | 0.132 | $ | 0.124 | $ | 0.114 | $ | 0.088 | ||||||||||||
Net realized and unrealized gain (loss) | (0.054 | ) | 1.819 | (0.424 | ) | 1.003 | 0.261 | 0.139 | ||||||||||||||||
Total income (loss) from operations | $ | 0.010 | $ | 1.944 | $ | (0.292 | ) | $ | 1.127 | $ | 0.375 | $ | 0.227 | |||||||||||
Less Distributions |
| |||||||||||||||||||||||
From net investment income | $ | (0.070 | ) | $ | (0.127 | ) | $ | (0.146 | ) | $ | (0.139 | ) | $ | (0.123 | ) | $ | (0.116 | ) | ||||||
From net realized gain | — | (0.247 | ) | (0.392 | ) | (0.288 | ) | (0.032 | ) | (0.381 | ) | |||||||||||||
Total distributions | $ | (0.070 | ) | $ | (0.374 | ) | $ | (0.538 | ) | $ | (0.427 | ) | $ | (0.155 | ) | $ | (0.497 | ) | ||||||
Portfolio transaction fee, net(1) | $ | (0.000 | )(2) | $ | (0.000 | )(2) | $ | (0.000 | )(2) | $ | 0.000 | (2) | $ | (0.000 | )(2) | $ | — | |||||||
Net asset value — End of period | $ | 9.790 | $ | 9.850 | $ | 8.280 | $ | 9.110 | $ | 8.410 | $ | 8.190 | ||||||||||||
Total Return(3) | 0.12 | %(4)(5) | 23.63 | % | (3.43 | )%(5) | 13.53 | %(5) | 4.60 | %(5) | 2.65 | %(5) | ||||||||||||
Ratios/Supplemental Data |
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Net assets, end of period (000’s omitted) | $ | 343,000 | $ | 353,169 | $ | 294,742 | $ | 333,860 | $ | 374,579 | $ | 293,994 | ||||||||||||
Ratios (as a percentage of average daily net | ||||||||||||||||||||||||
Expenses(7) | 0.97 | %(5)(8) | 0.98 | % | 0.98 | %(5) | 0.98 | %(5) | 0.98 | %(5) | 1.05 | %(5) | ||||||||||||
Net investment income | 1.35 | %(8) | 1.34 | % | 1.45 | % | 1.41 | % | 1.38 | % | 1.05 | % | ||||||||||||
Portfolio Turnover of the Fund(9) | 9 | %(4) | 12 | % | 7 | % | 4 | % | 11 | % | 2 | % |
(1) | Computed using average shares outstanding. |
(2) | Amount is less than $0.0005 or $(0.0005), as applicable. |
(3) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges. |
(4) | Not annualized. |
(5) | The administrator of the Fund reimbursed certain operating expenses (equal to less than 0.005%, 0.03%, 0.01%, 0.03% and less than 0.005% of average daily net assets for the six months ended June 30, 2020 and the years ended December 31, 2018, 2017, 2016 and 2015, respectively). Absent this reimbursement, total return would be lower. |
(6) | Includes the Fund’s share of the Portfolios’ allocated expenses. |
(7) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(8) | Annualized. |
(9) | Percentage is based on the Fund’s contributions to and withdrawals from the Portfolios and excludes the investment activity of the Portfolios. |
9 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Balanced Fund
June 30, 2020
Financial Highlights — continued
Class C | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 9.900 | $ | 8.310 | $ | 9.140 | $ | 8.440 | $ | 8.220 | $ | 8.500 | ||||||||||||
Income (Loss) From Operations |
| |||||||||||||||||||||||
Net investment income(1) | $ | 0.029 | $ | 0.055 | $ | 0.064 | $ | 0.058 | $ | 0.052 | $ | 0.026 | ||||||||||||
Net realized and unrealized gain (loss) | (0.053 | ) | 1.837 | (0.426 | ) | 1.001 | 0.266 | 0.138 | ||||||||||||||||
Total income (loss) from operations | $ | (0.024 | ) | $ | 1.892 | $ | (0.362 | ) | $ | 1.059 | $ | 0.318 | $ | 0.164 | ||||||||||
Less Distributions |
| |||||||||||||||||||||||
From net investment income | $ | (0.036 | ) | $ | (0.055 | ) | $ | (0.076 | ) | $ | (0.071 | ) | $ | (0.066 | ) | $ | (0.063 | ) | ||||||
From net realized gain | — | (0.247 | ) | (0.392 | ) | (0.288 | ) | (0.032 | ) | (0.381 | ) | |||||||||||||
Total distributions | $ | (0.036 | ) | $ | (0.302 | ) | $ | (0.468 | ) | $ | (0.359 | ) | $ | (0.098 | ) | $ | (0.444 | ) | ||||||
Portfolio transaction fee, net(1) | $ | (0.000 | )(2) | $ | (0.000 | )(2) | $ | (0.000 | )(2) | $ | 0.000 | (2) | $ | (0.000 | )(2) | $ | — | |||||||
Net asset value — End of period | $ | 9.840 | $ | 9.900 | $ | 8.310 | $ | 9.140 | $ | 8.440 | $ | 8.220 | ||||||||||||
Total Return(3) | (0.23 | )%(4)(5) | 22.71 | % | (4.03 | )%(5) | 12.63 | %(5) | 3.88 | %(5) | 1.86 | %(5) | ||||||||||||
Ratios/Supplemental Data |
| |||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 230,922 | $ | 236,215 | $ | 221,669 | $ | 258,844 | $ | 254,656 | $ | 137,051 | ||||||||||||
Ratios (as a percentage of average daily net | ||||||||||||||||||||||||
Expenses(7) | 1.72 | %(5)(8) | 1.73 | % | 1.73 | %(5) | 1.73 | %(5) | 1.73 | %(5) | 1.80 | %(5) | ||||||||||||
Net investment income | 0.60 | %(8) | 0.59 | % | 0.70 | % | 0.65 | % | 0.63 | % | 0.30 | % | ||||||||||||
Portfolio Turnover of the Fund(9) | 9 | %(4) | 12 | % | 7 | % | 4 | % | 11 | % | 2 | % |
(1) | Computed using average shares outstanding. |
(2) | Amount is less than $0.0005 or $(0.0005), as applicable. |
(3) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges. |
(4) | Not annualized. |
(5) | The administrator of the Fund reimbursed certain operating expenses (equal to less than 0.005%, 0.03%, 0.01%, 0.03% and less than 0.005% of average daily net assets for the six months ended June 30, 2020 and the years ended December 31, 2018, 2017, 2016 and 2015, respectively). Absent this reimbursement, total return would be lower. |
(6) | Includes the Fund’s share of the Portfolios’ allocated expenses. |
(7) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(8) | Annualized. |
(9) | Percentage is based on the Fund’s contributions to and withdrawals from the Portfolios and excludes the investment activity of the Portfolios. |
10 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Balanced Fund
June 30, 2020
Financial Highlights — continued
Class I | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 9.860 | $ | 8.280 | $ | 9.110 | $ | 8.410 | $ | 8.190 | $ | 8.460 | ||||||||||||
Income (Loss) From Operations |
| |||||||||||||||||||||||
Net investment income(1) | $ | 0.076 | $ | 0.149 | $ | 0.156 | $ | 0.147 | $ | 0.137 | $ | 0.109 | ||||||||||||
Net realized and unrealized gain (loss) | (0.054 | ) | 1.830 | (0.425 | ) | 1.002 | 0.258 | 0.138 | ||||||||||||||||
Total income (loss) from operations | $ | 0.022 | $ | 1.979 | $ | (0.269 | ) | $ | 1.149 | $ | 0.395 | $ | 0.247 | |||||||||||
Less Distributions |
| �� | ||||||||||||||||||||||
From net investment income | $ | (0.082 | ) | $ | (0.152 | ) | $ | (0.169 | ) | $ | (0.161 | ) | $ | (0.143 | ) | $ | (0.136 | ) | ||||||
From net realized gain | — | (0.247 | ) | (0.392 | ) | (0.288 | ) | (0.032 | ) | (0.381 | ) | |||||||||||||
Total distributions | $ | (0.082 | ) | $ | (0.399 | ) | $ | (0.561 | ) | $ | (0.449 | ) | $ | (0.175 | ) | $ | (0.517 | ) | ||||||
Portfolio transaction fee, net(1) | $ | (0.000 | )(2) | $ | (0.000 | )(2) | $ | (0.000 | )(2) | $ | 0.000 | (2) | $ | (0.000 | )(2) | $ | — | |||||||
Net asset value — End of period | $ | 9.800 | $ | 9.860 | $ | 8.280 | $ | 9.110 | $ | 8.410 | $ | 8.190 | ||||||||||||
Total Return(3) | 0.24 | %(4)(5) | 24.07 | % | (3.19 | )%(5) | 13.81 | %(5) | 4.86 | %(5) | 2.88 | %(5) | ||||||||||||
Ratios/Supplemental Data |
| |||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 336,269 | $ | 322,436 | $ | 208,740 | $ | 220,522 | $ | 211,211 | $ | 78,055 | ||||||||||||
Ratios (as a percentage of average daily net | ||||||||||||||||||||||||
Expenses(7) | 0.72 | %(5)(8) | 0.73 | % | 0.73 | %(5) | 0.73 | %(5) | 0.73 | %(5) | 0.80 | %(5) | ||||||||||||
Net investment income | 1.60 | %(8) | 1.59 | % | 1.70 | % | 1.66 | % | 1.63 | % | 1.29 | % | ||||||||||||
Portfolio Turnover of the Fund(9) | 9 | %(4) | 12 | % | 7 | % | 4 | % | 11 | % | 2 | % |
(1) | Computed using average shares outstanding. |
(2) | Amount is less than $0.0005 or $(0.0005), as applicable. |
(3) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested. |
(4) | Not annualized. |
(5) | The administrator of the Fund reimbursed certain operating expenses (equal to less than 0.005%, 0.03%, 0.01%, 0.03% and less than 0.005% of average daily net assets for the six months ended June 30, 2020 and the years ended December 31, 2018, 2017, 2016 and 2015, respectively). Absent this reimbursement, total return would be lower. |
(6) | Includes the Fund’s share of the Portfolios’ allocated expenses. |
(7) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(8) | Annualized. |
(9) | Percentage is based on the Fund’s contributions to and withdrawals from the Portfolios and excludes the investment activity of the Portfolios. |
11 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Balanced Fund
June 30, 2020
Financial Highlights — continued
Class R | ||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | Period Ended December 31, 2016(1) | ||||||||||||||||||
2019 | 2018 | 2017 | ||||||||||||||||||
Net asset value — Beginning of period | $ | 9.820 | $ | 8.260 | $ | 9.090 | $ | 8.400 | $ | 8.290 | ||||||||||
Income (Loss) From Operations |
| |||||||||||||||||||
Net investment income(2) | $ | 0.052 | $ | 0.102 | $ | 0.115 | $ | 0.104 | $ | 0.075 | ||||||||||
Net realized and unrealized gain (loss) | (0.052 | ) | 1.812 | (0.423 | ) | 0.996 | 0.152 | |||||||||||||
Total income (loss) from operations | $ | — | $ | 1.914 | $ | (0.308 | ) | $ | 1.100 | $ | 0.227 | |||||||||
Less Distributions |
| |||||||||||||||||||
From net investment income | $ | (0.060 | ) | $ | (0.107 | ) | $ | (0.130 | ) | $ | (0.122 | ) | $ | (0.085 | ) | |||||
From net realized gain | — | (0.247 | ) | (0.392 | ) | (0.288 | ) | (0.032 | ) | |||||||||||
Total distributions | $ | (0.060 | ) | $ | (0.354 | ) | $ | (0.522 | ) | $ | (0.410 | ) | $ | (0.117 | ) | |||||
Portfolio transaction fee, net(2) | $ | (0.000 | )(3) | $ | (0.000 | )(3) | $ | (0.000 | )(3) | $ | 0.000 | (3) | $ | (0.000 | )(3) | |||||
Net asset value — End of period | $ | 9.760 | $ | 9.820 | $ | 8.260 | $ | 9.090 | $ | 8.400 | ||||||||||
Total Return(5) | 0.02 | %(4)(6) | 23.31 | % | (3.61 | )%(6) | 13.22 | %(6) | 2.73 | %(4)(6) | ||||||||||
Ratios/Supplemental Data |
| |||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 6,972 | $ | 5,905 | $ | 2,514 | $ | 561 | $ | 178 | ||||||||||
Ratios (as a percentage of average daily net assets):(7) | ||||||||||||||||||||
Expenses(8) | 1.22 | %(6)(9) | 1.23 | % | 1.23 | %(6) | 1.23 | %(6) | 1.23 | %(6)(9) | ||||||||||
Net investment income | 1.10 | %(9) | 1.08 | % | 1.27 | % | 1.17 | % | 1.33 | %(9) | ||||||||||
Portfolio Turnover of the Fund(10) | 9 | %(4) | 12 | % | 7 | % | 4 | % | 11 | %(11) |
(1) | For the period from commencement of operations on May 2, 2016 to December 31, 2016. |
(2) | Computed using average shares outstanding. |
(3) | Amount is less than $0.0005 or $(0.0005), as applicable. |
(4) | Not annualized. |
(5) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested. |
(6) | The administrator of the Fund reimbursed certain operating expenses (equal to less than 0.005%, 0.03%, 0.01% and 0.03% of average daily net assets for the six months ended June 30, 2020, the years ended December 31, 2018 and 2017 and the period ended December 31, 2016, respectively). Absent this reimbursement, total return would be lower. |
(7) | Includes the Fund’s share of the Portfolios’ allocated expenses. |
(8) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(9) | Annualized. |
(10) | Percentage is based on the Fund’s contributions to and withdrawals from the Portfolios and excludes the investment activity of the Portfolios. |
(11) | For the Fund’s year ended December 31, 2016. |
12 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Balanced Fund
June 30, 2020
Financial Highlights — continued
Class R6 | ||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | Period Ended December 31, 2016(1) | ||||||||||||||||||
2019 | 2018 | 2017 | ||||||||||||||||||
Net asset value — Beginning of period | $ | 9.860 | $ | 8.280 | $ | 9.110 | $ | 8.420 | $ | 8.300 | ||||||||||
Income (Loss) From Operations |
| |||||||||||||||||||
Net investment income(2) | $ | 0.078 | $ | 0.153 | $ | 0.160 | $ | 0.146 | $ | 0.088 | ||||||||||
Net realized and unrealized gain (loss) | (0.054 | ) | 1.829 | (0.423 | ) | 0.999 | 0.170 | |||||||||||||
Total income (loss) from operations | $ | 0.024 | $ | 1.982 | $ | (0.263 | ) | $ | 1.145 | $ | 0.258 | |||||||||
Less Distributions |
| |||||||||||||||||||
From net investment income | $ | (0.084 | ) | $ | (0.155 | ) | $ | (0.175 | ) | $ | (0.167 | ) | $ | (0.106 | ) | |||||
From net realized gain | — | (0.247 | ) | (0.392 | ) | (0.288 | ) | (0.032 | ) | |||||||||||
Total distributions | $ | (0.084 | ) | $ | (0.402 | ) | $ | (0.567 | ) | $ | (0.455 | ) | $ | (0.138 | ) | |||||
Portfolio transaction fee, net(2) | $ | (0.000 | )(3) | $ | (0.000 | )(3) | $ | (0.000 | )(3) | $ | 0.000 | (3) | $ | (0.000 | )(3) | |||||
Net asset value — End of period | $ | 9.800 | $ | 9.860 | $ | 8.280 | $ | 9.110 | $ | 8.420 | ||||||||||
Total Return(4) | 0.26 | %(5) | 24.11 | % | (3.13 | )%(6) | 13.75 | %(6) | 3.11 | %(5)(6) | ||||||||||
Ratios/Supplemental Data |
| |||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 43,219 | $ | 42,255 | $ | 28,215 | $ | 27,492 | $ | 7 | ||||||||||
Ratios (as a percentage of average daily net assets):(7) | ||||||||||||||||||||
Expenses(8) | 0.67 | %(9) | 0.68 | % | 0.69 | %(6) | 0.69 | %(6) | 0.69 | %(6)(9) | ||||||||||
Net investment income | 1.65 | %(9) | 1.63 | % | 1.74 | % | 1.62 | % | 1.58 | %(9) | ||||||||||
Portfolio Turnover of the Fund(10) | 9 | %(5) | 12 | % | 7 | % | 4 | % | 11 | %(11) |
(1) | For the period from commencement of operations on May 2, 2016 to December 31, 2016. |
(2) | Computed using average shares outstanding. |
(3) | Amount is less than $0.0005 or $(0.0005), as applicable. |
(4) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested. |
(5) | Not annualized. |
(6) | The administrator of the Fund reimbursed certain operating expenses (equal to 0.03%, 0.01% and 0.03% of average daily net assets for the years ended December 31, 2018 and 2017 and the period ended December 31, 2016, respectively). Absent this reimbursement, total return would be lower. |
(7) | Includes the Fund’s share of the Portfolios’ allocated expenses. |
(8) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(9) | Annualized. |
(10) | Percentage is based on the Fund’s contributions to and withdrawals from the Portfolios and excludes the investment activity of the Portfolios. |
(11) | For the Fund’s year ended December 31, 2016. |
13 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Balanced Fund
June 30, 2020
Notes to Financial Statements (Unaudited)
1 Significant Accounting Policies
Eaton Vance Balanced Fund (the Fund) is a diversified series of Eaton Vance Special Investment Trust (the Trust). The Trust is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company. The Fund offers five classes of shares. Class A shares are generally sold subject to a sales charge imposed at time of purchase. Class C shares are sold at net asset value and are generally subject to a contingent deferred sales charge (see Note 5). Effective January 25, 2019, Class C shares of the Fund generally automatically convert to Class A shares ten years after their purchase as described in the Fund’s prospectus. Class I, Class R and Class R6 shares are sold at net asset value and are not subject to a sales charge. Each class represents a pro-rata interest in the Fund, but votes separately on class-specific matters and (as noted below) is subject to different expenses. Realized and unrealized gains and losses and net investment income and losses, other than class-specific expenses, are allocated daily to each class of shares based on the relative net assets of each class to the total net assets of the Fund. Sub-accounting, recordkeeping and similar administrative fees payable to financial intermediaries, which are a component of transfer and dividend disbursing agent fees on the Statement of Operations, are not allocated to Class R6 shares. Each class of shares differs in its distribution plan and certain other class-specific expenses. The Fund’s investment objective is to provide current income and long-term growth of capital. The Fund currently pursues its objective by investing all of its investable assets in interests in two portfolios managed by Eaton Vance Management (EVM) or its affiliates (the Portfolios), which are Massachusetts business trusts. The value of the Fund’s investments in the Portfolios reflects the Fund’s proportionate interest in their net assets. The Fund’s proportionate interest in each of the Portfolio’s net assets at June 30, 2020 were as follows: Core Bond Portfolio (72.2%) and Stock Portfolio (85.0%). The performance of the Fund is directly affected by the performance of the Portfolios. The financial statements of Stock Portfolio, including the portfolio of investments, are included elsewhere in this report and should be read in conjunction with the Fund’s financial statements. A copy of Core Bond Portfolio’s financial statements is available by calling Eaton Vance at 1-800-262-1122 or in the EDGAR database on the Securities and Exchange Commission’s website at www.sec.gov.
The following is a summary of significant accounting policies of the Fund. The policies are in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The Fund is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946.
A Investment Valuation — Valuation of securities by Stock Portfolio is discussed in Note 1A of the Portfolio’s Notes to Financial Statements, which are included elsewhere in this report. Such policies are consistent with those of Core Bond Portfolio.
Additional valuation policies for Core Bond Portfolio (the Portfolio) are as follows:
Debt Obligations. Debt obligations are generally valued on the basis of valuations provided by third party pricing services, as derived from such services’ pricing models. Inputs to the models may include, but are not limited to, reported trades, executable bid and ask prices, broker/dealer quotations, prices or yields of securities with similar characteristics, interest rates, anticipated prepayments, benchmark curves or information pertaining to the issuer, as well as industry and economic events. The pricing services may use a matrix approach, which considers information regarding securities with similar characteristics to determine the valuation for a security. Short-term debt obligations purchased with a remaining maturity of sixty days or less for which a valuation from a third party pricing service is not readily available may be valued at amortized cost, which approximates fair value.
Senior Floating-Rate Loans. Interests in senior floating-rate loans (Senior Loans) for which reliable market quotations are readily available are valued generally at the average mean of bid and ask quotations obtained from a third party pricing service.
Derivatives. Financial futures contracts are valued at the closing settlement price established by the board of trade or exchange on which they are traded.
B Income — The Fund’s net investment income or loss consists of the Fund’s pro-rata share of the net investment income or loss of the Portfolios, less all actual and accrued expenses of the Fund.
C Federal Taxes — The Fund’s policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its net investment income, and all or substantially all of its net realized capital gains. Accordingly, no provision for federal income or excise tax is necessary.
As of June 30, 2020, the Fund had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. The Fund files a U.S. federal income tax return annually after its fiscal year-end, which is subject to examination by the Internal Revenue Service for a period of three years from the date of filing.
D Expenses — The majority of expenses of the Trust are directly identifiable to an individual fund. Expenses which are not readily identifiable to a specific fund are allocated taking into consideration, among other things, the nature and type of expense and the relative size of the funds.
E Use of Estimates — The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.
F Indemnifications — Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund. Under Massachusetts law, if certain conditions prevail, shareholders of a Massachusetts business trust (such as the Trust) could be deemed to have personal liability for the obligations of the Trust. However, the Trust’s Declaration of Trust contains an
14 |
Table of Contents
Eaton Vance
Balanced Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
express disclaimer of liability on the part of Fund shareholders and the By-laws provide that the Trust shall assume, upon request by the shareholder, the defense on behalf of any Fund shareholders. Moreover, the By-laws also provide for indemnification out of Fund property of any shareholder held personally liable solely by reason of being or having been a shareholder for all loss or expense arising from such liability. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.
G Other — Investment transactions are accounted for on a trade date basis.
H Interim Financial Statements — The interim financial statements relating to June 30, 2020 and for the six months then ended have not been audited by an independent registered public accounting firm, but in the opinion of the Fund’s management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial statements.
2 Distributions to Shareholders and Income Tax Information
It is the present policy of the Fund to make quarterly distributions of all or substantially all of its net investment income and to distribute annually all or substantially all of its net realized capital gains. Distributions to shareholders are recorded on the ex-dividend date. Distributions are declared separately for each class of shares. Shareholders may reinvest income and capital gain distributions in additional shares of the same class of the Fund at the net asset value as of the ex-dividend date or, at the election of the shareholder, receive distributions in cash. Distributions to shareholders are determined in accordance with income tax regulations, which may differ from U.S. GAAP. As required by U.S. GAAP, only distributions in excess of tax basis earnings and profits are 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. For tax purposes, distributions from short-term capital gains are considered to be from ordinary income.
3 Investment Adviser Fee and Other Transactions with Affiliates
The investment adviser fee is earned by EVM as compensation for investment advisory services rendered to the Fund. Pursuant to an investment advisory agreement effective October 18, 2018 between the Fund and EVM, the investment adviser fee is computed on investable Fund assets that are not invested in other investment companies for which EVM or its affiliates serve as investment adviser (“Investable Assets”) at the following annual rates: for equity securities — 0.600% up to $500 million and 0.575% from $500 million up to $1 billion of the Fund’s average daily net Investable Assets and at reduced rates when average daily net Investable Assets are $1 billion or more; and for income securities and cash — 0.450% up to $1 billion of the Fund’s average daily net Investable Assets, and at reduced rates when average daily net Investable Assets are $1 billion or more. For the six months ended June 30, 2020, the Fund incurred no investment adviser fee on Investable Assets. To the extent the Fund’s assets are invested in the Portfolios, the Fund is allocated its share of the Portfolios’ investment adviser fees. The Portfolios have engaged Boston Management and Research (BMR), a subsidiary of EVM, to render investment advisory services. See Note 2 of the Portfolios’ Notes to Financial Statements. For the six months ended June 30, 2020, the Fund’s allocated portion of investment adviser fees paid by the Portfolios amounted to $2,462,927 or 0.54% (annualized) of the Fund’s average daily net assets. The administration fee is earned by EVM as compensation for administrative services rendered to the Fund. The fee is computed at an annual rate of 0.04% of the Fund’s average daily net assets. For the six months ended June 30, 2020, the administration fee amounted to $183,956. Prior to May 1, 2020, EVM had agreed to reimburse the Fund’s expenses to the extent that total annual operating expenses (relating to ordinary operating expenses only) exceeded 0.98%, 1.73%, 0.73%, 1.23% and 0.69% of the Fund’s average daily net assets for Class A, Class C, Class I, Class R and Class R6, respectively. Pursuant to this agreement, EVM was allocated $2,894 of the Fund’s operating expenses with respect to Class A, Class C, Class I and Class R for the six months ended June 30, 2020.
EVM provides sub-transfer agency and related services to the Fund pursuant to a Sub-Transfer Agency Support Services Agreement. For the six months ended June 30, 2020, EVM earned $43,697 from the Fund pursuant to such agreement, which is included in transfer and dividend disbursing agent fees on the Statement of Operations. The Fund was informed that Eaton Vance Distributors, Inc. (EVD), an affiliate of EVM, received $65,494 as its portion of the sales charge on sales of Class A shares for the six months ended June 30, 2020. EVD also received distribution and service fees from Class A, Class C and Class R shares (see Note 4) and contingent deferred sales charges (see Note 5).
Trustees and officers of the Fund and the Portfolios who are members of EVM’s or BMR’s organizations receive remuneration for their services to the Fund out of the investment adviser fee. Certain officers and Trustees of the Fund and the Portfolios are officers of the above organizations.
4 Distribution Plans
The Fund has in effect a distribution plan for Class A shares (Class A Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class A Plan, the Fund pays EVD a distribution and service fee of 0.25% per annum of its average daily net assets attributable to Class A shares for distribution services and facilities provided to the Fund by EVD, as well as for personal services and/or the maintenance of shareholder accounts. Distribution and service fees paid or accrued to EVD for the six months ended June 30, 2020 amounted to $415,018 for Class A shares.
The Fund also has in effect distribution plans for Class C shares (Class C Plan) and Class R shares (Class R Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class C Plan, the Fund pays EVD amounts equal to 0.75% per annum of its average daily net assets attributable to Class C shares for providing ongoing distribution services and facilities to the Fund. For the six months ended June 30, 2020, the Fund paid or accrued to EVD $843,561 for Class C shares.
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Table of Contents
Eaton Vance
Balanced Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
The Class R Plan requires the Fund to pay EVD an amount up to 0.50% per annum of its average daily net assets attributable to Class R shares for providing ongoing distribution services and facilities to the Fund. The Trustees of the Trust have currently limited Class R distribution payments to 0.25% per annum of the average daily net assets attributable to Class R shares. For the six months ended June 30, 2020, the Fund paid or accrued to EVD $7,888 for Class R shares.
Pursuant to the Class C and Class R Plans, the Fund also makes payments of service fees to EVD, financial intermediaries and other persons in amounts equal to 0.25% per annum of its average daily net assets attributable to that class. Service fees paid or accrued are for personal services and/or the maintenance of shareholder accounts. They are separate and distinct from the sales commissions and distribution fees payable to EVD. Service fees paid or accrued for the six months ended June 30, 2020 amounted to $281,187 and $7,888 for Class C and Class R shares, respectively.
Distribution and service fees are subject to the limitations contained in the Financial Industry Regulatory Authority Rule 2341(d).
5 Contingent Deferred Sales Charges
A contingent deferred sales charge (CDSC) of 1% generally is imposed on redemptions of Class C shares made within 12 months of purchase. Class A shares may be subject to a 1% CDSC if redeemed within 18 months of purchase (depending on the circumstances of purchase). Generally, the CDSC is based upon the lower of the net asset value at date of redemption or date of purchase. No charge is levied on shares acquired by reinvestment of dividends or capital gain distributions. For the six months ended June 30, 2020, the Fund was informed that EVD received approximately $6,000 and $12,000 of CDSCs paid by Class A and Class C shareholders, respectively.
6 Investment Transactions
For the six months ended June 30, 2020, increases and decreases in the Fund’s investments in the Portfolios were as follows:
Portfolio | Contributions | Withdrawals | ||||||
Core Bond Portfolio | $ | 35,106,755 | $ | 38,377,916 | ||||
Stock Portfolio | 52,195,636 | 43,976,087 |
In addition, a Portfolio transaction fee is imposed by Stock Portfolio on the combined daily inflows or outflows of the Fund and Stock Portfolio’s other investors as more fully described at Note 1H of Stock Portfolio’s financial statements included herein. Such fee is allocated to the Fund based on its pro-rata interest in Stock Portfolio. The amount of the Portfolio transaction fee imposed on the Fund, if any, and the allocation of such fee are presented as Other capital on the Statements of Changes in Net Assets.
7 Shares of Beneficial Interest
The Fund’s Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value). Such shares may be issued in a number of different series (such as the Fund) and classes. Transactions in Fund shares were as follows:
Class A | Six Months Ended (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 2,594,886 | 5,704,561 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | 232,815 | 1,274,423 | ||||||
Redemptions | (3,916,005 | ) | (9,108,143 | ) | ||||
Converted from Class B shares | — | 146,241 | ||||||
Converted from Class C shares | 262,820 | 2,227,942 | ||||||
Net increase (decrease) | (825,484 | ) | 245,024 |
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Table of Contents
Eaton Vance
Balanced Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
Class B | Year Ended December 31, 2019(1) | |||||||
Sales | 21 | |||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | 447 | |||||||
Redemptions | (29,604 | ) | ||||||
Converted to Class A shares | (140,376 | ) | ||||||
Net decrease | (169,512 | ) | ||||||
Class C | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 2,518,818 | 3,509,184 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | 84,940 | 691,129 | ||||||
Redemptions | (2,734,502 | ) | (4,767,786 | ) | ||||
Converted to Class A shares | (261,736 | ) | (2,225,270 | ) | ||||
Net decrease | (392,480 | ) | (2,792,743 | ) | ||||
Class I | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 10,072,849 | 13,916,289 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | 249,567 | 1,076,617 | ||||||
Redemptions | (8,717,991 | ) | (7,480,042 | ) | ||||
Net increase | 1,604,425 | 7,512,864 | ||||||
Class R | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 183,088 | 348,702 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | 4,365 | 18,726 | ||||||
Redemptions | (74,356 | ) | (70,599 | ) | ||||
Net increase | 113,097 | 296,829 | ||||||
Class R6 | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 463,993 | 1,459,105 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | 37,772 | 166,020 | ||||||
Redemptions | (378,166 | ) | (745,068 | ) | ||||
Net increase | 123,599 | 880,057 |
(1) | At the close of business on October 15, 2019, Class B shares were converted into Class A and Class B was terminated. |
17 |
Table of Contents
Eaton Vance
Balanced Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
8 Fair Value Measurements
Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
• | Level 1 – quoted prices in active markets for identical investments |
• | Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
• | Level 3 – significant unobservable inputs (including a fund’s own assumptions in determining the fair value of investments) |
In cases where the inputs used to measure fair value fall in different levels of the fair value hierarchy, the level disclosed is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. At June 30, 2020 and December 31, 2019, the Fund’s investment in Core Bond Portfolio, whose financial statements are not included but are available elsewhere as discussed in Note 1, and in Stock Portfolio were valued based on Level 1 inputs.
9 Risks and Uncertainties
Pandemic Risk
An outbreak of respiratory disease caused by a novel coronavirus that was first detected in China in December 2019 has spread rapidly internationally. This coronavirus has resulted in closing borders, enhanced health screenings, changes to healthcare service preparation and delivery, quarantines, cancellations, disruptions to supply chains and customer activity, as well as general concern and uncertainty. The impact of this outbreak has negatively affected the worldwide economy, as well as the economies of individual countries and individual companies and can affect the market in general in significant and unforeseen ways. Health crises caused by outbreaks, such as the coronavirus outbreak, may exacerbate other pre-existing political, social and economic risks and disrupt normal market conditions and operations. The near-term impact of this coronavirus has resulted in substantial market volatility, which may have an adverse effect on the Fund’s investments.
18 |
Table of Contents
Stock Portfolio
June 30, 2020
Portfolio of Investments (Unaudited)
Common Stocks — 99.6% |
| |||||||
Security | Shares | Value | ||||||
Aerospace & Defense — 0.9% | ||||||||
Hexcel Corp. | 139,800 | $ | 6,321,756 | |||||
$ | 6,321,756 | |||||||
Banks — 4.2% | ||||||||
Bank of America Corp. | 427,940 | $ | 10,163,575 | |||||
JPMorgan Chase & Co. | 110,820 | 10,423,729 | ||||||
PNC Financial Services Group, Inc. (The) | 67,640 | 7,116,405 | ||||||
$ | 27,703,709 | |||||||
Beverages — 2.4% | ||||||||
PepsiCo, Inc. | 123,200 | $ | 16,294,432 | |||||
$ | 16,294,432 | |||||||
Biotechnology — 1.7% | ||||||||
AbbVie, Inc. | 115,300 | $ | 11,320,154 | |||||
$ | 11,320,154 | |||||||
Capital Markets — 3.6% | ||||||||
Cboe Global Markets, Inc. | 74,100 | $ | 6,912,048 | |||||
Intercontinental Exchange, Inc. | 61,400 | 5,624,240 | ||||||
Tradeweb Markets, Inc., Class A | 193,639 | 11,258,172 | ||||||
$ | 23,794,460 | |||||||
Commercial Services & Supplies — 1.1% | ||||||||
Waste Management, Inc. | 68,482 | $ | 7,252,929 | |||||
$ | 7,252,929 | |||||||
Communications Equipment — 1.4% | ||||||||
Cisco Systems, Inc. | 206,500 | $ | 9,631,160 | |||||
$ | 9,631,160 | |||||||
Diversified Telecommunication Services — 1.6% | ||||||||
Verizon Communications, Inc. | 197,590 | $ | 10,893,137 | |||||
$ | 10,893,137 | |||||||
Electric Utilities — 1.2% | ||||||||
NextEra Energy, Inc. | 33,796 | $ | 8,116,785 | |||||
|
| $ | 8,116,785 | |||||
Electrical Equipment — 2.5% | ||||||||
AMETEK, Inc. | 131,500 | $ | 11,752,155 | |||||
Emerson Electric Co. | 78,742 | 4,884,366 | ||||||
$ | 16,636,521 |
Security | Shares | Value | ||||||
Equity Real Estate Investment Trusts (REITs) — 2.4% | ||||||||
American Tower Corp. | 62,900 | $ | 16,262,166 | |||||
$ | 16,262,166 | |||||||
Food & Staples Retailing — 2.5% | ||||||||
Walmart, Inc. | 138,800 | $ | 16,625,464 | |||||
$ | 16,625,464 | |||||||
Food Products — 2.0% | ||||||||
Mondelez International, Inc., Class A | 259,020 | $ | 13,243,693 | |||||
$ | 13,243,693 | |||||||
Health Care Equipment & Supplies — 6.5% | ||||||||
Abbott Laboratories | 136,100 | $ | 12,443,623 | |||||
Boston Scientific Corp.(1) | 195,200 | 6,853,472 | ||||||
Danaher Corp. | 93,366 | 16,509,910 | ||||||
ICU Medical, Inc.(1) | 42,000 | 7,741,020 | ||||||
$ | 43,548,025 | |||||||
Health Care Providers & Services — 2.0% | ||||||||
Anthem, Inc. | 51,760 | $ | 13,611,845 | |||||
$ | 13,611,845 | |||||||
Insurance — 2.2% | ||||||||
First American Financial Corp. | 126,572 | $ | 6,077,987 | |||||
Travelers Cos., Inc. (The) | 72,600 | 8,280,030 | ||||||
$ | 14,358,017 | |||||||
Interactive Media & Services — 8.3% | ||||||||
Alphabet, Inc., Class C(1) | 23,029 | $ | 32,554,025 | |||||
Facebook, Inc., Class A(1) | 99,844 | 22,671,577 | ||||||
$ | 55,225,602 | |||||||
Internet & Direct Marketing Retail — 6.0% | ||||||||
Amazon.com, Inc.(1) | 14,622 | $ | 40,339,466 | |||||
$ | 40,339,466 | |||||||
IT Services — 9.3% | ||||||||
Cognizant Technology Solutions Corp., Class A | 171,012 | $ | 9,716,902 | |||||
Fidelity National Information Services, Inc. | 92,200 | 12,363,098 | ||||||
Mastercard, Inc., Class A | 22,900 | 6,771,530 | ||||||
PayPal Holdings, Inc.(1) | 76,900 | 13,398,287 | ||||||
Shift4 Payments, Inc., Class A | 44,000 | 1,562,000 | ||||||
Visa, Inc., Class A | 95,400 | 18,428,418 | ||||||
$ | 62,240,235 |
19 | See Notes to Financial Statements. |
Table of Contents
Stock Portfolio
June 30, 2020
Portfolio of Investments (Unaudited) — continued
Security | Shares | Value | ||||||
Life Sciences Tools & Services — 2.1% | ||||||||
Thermo Fisher Scientific, Inc. | 38,800 | $ | 14,058,792 | |||||
$ | 14,058,792 | |||||||
Machinery — 2.1% | ||||||||
Ingersoll Rand, Inc.(1) | 239,520 | $ | 6,735,302 | |||||
Stanley Black & Decker, Inc. | 52,100 | 7,261,698 | ||||||
$ | 13,997,000 | |||||||
Metals & Mining — 2.3% | ||||||||
Franco-Nevada Corp. | 54,400 | $ | 7,596,416 | |||||
Steel Dynamics, Inc. | 306,600 | 7,999,194 | ||||||
$ | 15,595,610 | |||||||
Multi-Utilities — 1.9% | ||||||||
CMS Energy Corp. | 103,500 | $ | 6,046,470 | |||||
Sempra Energy | 55,642 | 6,522,912 | ||||||
$ | 12,569,382 | |||||||
Multiline Retail — 1.2% | ||||||||
Dollar General Corp. | 42,000 | $ | 8,001,420 | |||||
$ | 8,001,420 | |||||||
Oil, Gas & Consumable Fuels — 2.6% | ||||||||
Chevron Corp. | 81,700 | $ | 7,290,091 | |||||
ConocoPhillips | 106,886 | 4,491,350 | ||||||
Phillips 66 | 78,825 | 5,667,517 | ||||||
$ | 17,448,958 | |||||||
Pharmaceuticals — 2.9% | ||||||||
Sanofi | 107,100 | $ | 10,922,546 | |||||
Zoetis, Inc. | 60,400 | 8,277,216 | ||||||
$ | 19,199,762 | |||||||
Road & Rail — 1.0% | ||||||||
Union Pacific Corp. | 37,400 | $ | 6,323,218 | |||||
$ | 6,323,218 | |||||||
Semiconductors & Semiconductor Equipment — 2.5% | ||||||||
Taiwan Semiconductor Manufacturing Co., Ltd. ADR | 115,523 | $ | 6,558,241 | |||||
Texas Instruments, Inc. | 77,279 | 9,812,114 | ||||||
$ | 16,370,355 |
Security | Shares | Value | ||||||
Software — 9.2% | ||||||||
Adobe, Inc.(1) | 21,578 | $ | 9,393,119 | |||||
Intuit, Inc. | 18,836 | 5,579,035 | ||||||
Microsoft Corp. | 227,820 | 46,363,648 | ||||||
$ | 61,335,802 | |||||||
Specialty Retail — 3.4% | ||||||||
Home Depot, Inc. (The) | 59,388 | $ | 14,877,288 | |||||
TJX Cos., Inc. (The) | 160,340 | 8,106,790 | ||||||
$ | 22,984,078 | |||||||
Technology Hardware, Storage & Peripherals — 5.8% | ||||||||
Apple, Inc. | 105,897 | $ | 38,631,226 | |||||
$ | 38,631,226 | |||||||
Wireless Telecommunication Services — 0.8% | ||||||||
T-Mobile US, Inc.(1) | 49,100 | $ | 5,113,765 | |||||
$ | 5,113,765 | |||||||
Total Common Stocks |
| $ | 665,048,924 | |||||
Rights — 0.0%(2) |
| |||||||
Security | Shares | Value | ||||||
Wireless Telecommunication Services — 0.0%(2) | ||||||||
T Mobile US, Inc., Exp. 7/27/20(1) | 32,400 | $ | 5,443 | |||||
Total Rights |
| $ | 5,443 | |||||
Short-Term Investments — 0.2% |
| |||||||
Description | Units | Value | ||||||
Eaton Vance Cash Reserves Fund, LLC, 0.35%(3) | 1,386,725 | $ | 1,386,725 | |||||
Total Short-Term Investments |
| $ | 1,386,725 | |||||
Total Investments — 99.8% |
| $ | 666,441,092 | |||||
Other Assets, Less Liabilities — 0.2% |
| $ | 1,449,705 | |||||
Net Assets — 100.0% |
| $ | 667,890,797 |
The percentage shown for each investment category in the Portfolio of Investments is based on net assets.
20 | See Notes to Financial Statements. |
Table of Contents
Stock Portfolio
June 30, 2020
Portfolio of Investments (Unaudited) — continued
(1) | Non-income producing security. |
(2) | Amount is less than 0.05%. |
(3) | Affiliated investment company, available to Eaton Vance portfolios and funds, which invests in high quality, U.S. dollar denominated money market instruments. The rate shown is the annualized seven-day yield as of June 30, 2020. |
Abbreviations:
ADR | – | American Depositary Receipt |
21 | See Notes to Financial Statements. |
Table of Contents
Stock Portfolio
June 30, 2020
Statement of Assets and Liabilities (Unaudited)
Assets | June 30, 2020 | |||
Unaffiliated investments, at value (identified cost, $495,836,358) | $ | 665,054,367 | ||
Affiliated investment, at value (identified cost, $1,386,725) | 1,386,725 | |||
Dividends receivable | 472,752 | |||
Dividends receivable from affiliated investment | 2,254 | |||
Receivable for investments sold | 2,688,349 | |||
Tax reclaims receivable | 166,926 | |||
Total assets | $ | 669,771,373 | ||
Liabilities | ||||
Payable for investments purchased | $ | 1,470,717 | ||
Payable to affiliates: | ||||
Investment adviser fee | 325,495 | |||
Trustees’ fees | 8,500 | |||
Accrued expenses | 75,864 | |||
Total liabilities | $ | 1,880,576 | ||
Net Assets applicable to investors’ interest in Portfolio | $ | 667,890,797 |
22 | See Notes to Financial Statements. |
Table of Contents
Stock Portfolio
June 30, 2020
Statement of Operations (Unaudited)
Investment Income | Six Months Ended June 30, 2020 | |||
Dividends (net of foreign taxes, $84,446) | $ | 5,693,691 | ||
Dividends from affiliated investment | 24,804 | |||
Total investment income | $ | 5,718,495 | ||
Expenses | ||||
Investment adviser fee | $ | 1,911,770 | ||
Trustees’ fees and expenses | 25,498 | |||
Custodian fee | 80,188 | |||
Legal and accounting services | 25,946 | |||
Miscellaneous | 3,564 | |||
Total expenses | $ | 2,046,966 | ||
Net investment income | $ | 3,671,529 | ||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) — | ||||
Investment transactions | $ | (13,822,276 | ) | |
Investment transactions — affiliated investment | 750 | |||
Foreign currency transactions | (8,682 | ) | ||
Net realized loss | $ | (13,830,208 | ) | |
Change in unrealized appreciation (depreciation) — | ||||
Investments | $ | (7,129,983 | ) | |
Investments — affiliated investment | (264 | ) | ||
Foreign currency | 768 | |||
Net change in unrealized appreciation (depreciation) | $ | (7,129,479 | ) | |
Net realized and unrealized loss | $ | (20,959,687 | ) | |
Net decrease in net assets from operations | $ | (17,288,158 | ) |
23 | See Notes to Financial Statements. |
Table of Contents
Stock Portfolio
June 30, 2020
Statements of Changes in Net Assets
Increase (Decrease) in Net Assets | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
From operations — | ||||||||
Net investment income | $ | 3,671,529 | $ | 6,172,602 | ||||
Net realized gain (loss) | (13,830,208 | ) | 37,236,935 | |||||
Net change in unrealized appreciation (depreciation) | (7,129,479 | ) | 139,853,795 | |||||
Net increase (decrease) in net assets from operations | $ | (17,288,158 | ) | $ | 183,263,332 | |||
Capital transactions — | ||||||||
Contributions | $ | 59,135,247 | $ | 63,196,014 | ||||
Withdrawals | (57,692,956 | ) | (79,842,250 | ) | ||||
Portfolio transaction fee | 189,146 | 315,199 | ||||||
Net increase (decrease) in net assets from capital transactions | $ | 1,631,437 | $ | (16,331,037 | ) | |||
Net increase (decrease) in net assets | $ | (15,656,721 | ) | $ | 166,932,295 | |||
Net Assets |
| |||||||
At beginning of period | $ | 683,547,518 | $ | 516,615,223 | ||||
At end of period | $ | 667,890,797 | $ | 683,547,518 |
24 | See Notes to Financial Statements. |
Table of Contents
Stock Portfolio
June 30, 2020
Financial Highlights
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
Ratios/Supplemental Data | 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||
Ratios (as a percentage of average daily net assets): | ||||||||||||||||||||||||
Expenses(1) | 0.64 | %(2) | 0.63 | % | 0.64 | % | 0.64 | % | 0.65 | % | 0.70 | % | ||||||||||||
Net investment income | 1.14 | %(2) | 0.99 | % | 1.14 | % | 1.38 | % | 1.60 | % | 1.16 | % | ||||||||||||
Portfolio Turnover | 38 | %(3) | 55 | % | 90 | % | 101 | % | 118 | % | 96 | % | ||||||||||||
Total Return | (1.77 | )%(3) | 35.47 | % | (5.57 | )% | 20.31 | % | 7.14 | % | 4.88 | % | ||||||||||||
Net assets, end of period (000’s omitted) | $ | 667,891 | $ | 683,548 | $ | 516,615 | $ | 647,405 | $ | 640,973 | $ | 395,492 |
(1) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(2) | Annualized. |
(3) | Not annualized. |
25 | See Notes to Financial Statements. |
Table of Contents
Stock Portfolio
June 30, 2020
Notes to Financial Statements (Unaudited)
1 Significant Accounting Policies
Stock Portfolio (the Portfolio) is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as a diversified, open-end management investment company. The Portfolio’s investment objective is to achieve long-term capital appreciation by investing in a diversified portfolio of equity securities. The Declaration of Trust permits the Trustees to issue interests in the Portfolio. At June 30, 2020, Eaton Vance Stock Fund, Eaton Vance Stock NextShares and Eaton Vance Balanced Fund held an interest of 13.9%, 1.0% and 85.0%, respectively, in the Portfolio.
The following is a summary of significant accounting policies of the Portfolio. The policies are in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The Portfolio is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946.
A Investment Valuation — The following methodologies are used to determine the market value or fair value of investments.
Equity Securities. Equity securities listed on a U.S. securities exchange generally are valued at the last sale or closing price on the day of valuation or, if no sales took place on such date, at the mean between the closing bid and ask prices on the exchange where such securities are principally traded. Equity securities listed on the NASDAQ Global or Global Select Market generally are valued at the NASDAQ official closing price. Unlisted or listed securities for which closing sales prices or closing quotations are not available are valued at the mean between the latest available bid and ask prices.
Foreign Securities and Currencies. Foreign securities and currencies are valued in U.S. dollars, based on foreign currency exchange rate quotations supplied by a third party pricing service. The pricing service uses a proprietary model to determine the exchange rate. Inputs to the model include reported trades and implied bid/ask spreads. The daily valuation of exchange-traded foreign securities generally is determined as of the close of trading on the principal exchange on which such securities trade. Events occurring after the close of trading on foreign exchanges may result in adjustments to the valuation of foreign securities to more accurately reflect their fair value as of the close of regular trading on the New York Stock Exchange. When valuing foreign equity securities that meet certain criteria, the Portfolio’s Trustees have approved the use of a fair value service that values such securities to reflect market trading that occurs after the close of the applicable foreign markets of comparable securities or other instruments that have a strong correlation to the fair-valued securities.
Affiliated Fund. The Portfolio may invest in Eaton Vance Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by
Eaton Vance Management (EVM). While Cash Reserves Fund is not a registered money market mutual fund, it conducts all of its investment activities in accordance with the requirements of Rule 2a-7 under the 1940 Act. Investments in Cash Reserves Fund are valued at the closing net asset value per unit on the valuation day. Cash Reserves Fund generally values its investment securities based on available market quotations provided by a third party pricing service.
Fair Valuation. Investments for which valuations or market quotations are not readily available or are deemed unreliable are valued at fair value using methods determined in good faith by or at the direction of the Trustees of the Portfolio in a manner that most fairly reflects the security’s “fair value”, which is the amount that the Portfolio might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of relevant factors, which are likely to vary from one pricing context to another. These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issuer or of comparable companies or entities, quotations or relevant information obtained from broker/dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the company’s or entity’s financial statements, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.
B Investment Transactions — Investment transactions for financial statement purposes are accounted for on a trade date basis. Realized gains and losses on investments sold are determined on the basis of identified cost.
C Income — Dividend income is recorded on the ex-dividend date for dividends received in cash and/or securities. However, if the ex-dividend date has passed, certain dividends from foreign securities are recorded as the Portfolio is informed of the ex-dividend date. Withholding taxes on foreign dividends and capital gains have been provided for in accordance with the Portfolio’s understanding of the applicable countries’ tax rules and rates.
D Federal Taxes — The Portfolio has elected to be treated as a partnership for federal tax purposes. No provision is made by the Portfolio for federal or state taxes on any taxable income of the Portfolio because each investor in the Portfolio is ultimately responsible for the payment of any taxes on its share of taxable income. Since at least one of the Portfolio’s investors is a regulated investment company that invests all or substantially all of its assets in the Portfolio, the Portfolio normally must satisfy the applicable source of income and diversification requirements (under the Internal Revenue Code) in order for its investors to satisfy them. The Portfolio will allocate, at least annually among its investors, each investor’s distributive share of the Portfolio’s net investment income, net realized capital gains and losses and any other items of income, gain, loss, deduction or credit.
As of June 30, 2020, the Portfolio had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. The Portfolio files a U.S. federal income tax return annually after its fiscal year-end, which is subject to examination by the Internal Revenue Service for a period of three years from the date of filing.
E Foreign Currency Translation — Investment valuations, other assets, and liabilities initially expressed in foreign currencies are translated each business day into U.S. dollars based upon current exchange rates. Purchases and sales of foreign investment securities and income and expenses denominated in foreign currencies are translated into U.S. dollars based upon currency exchange rates in effect on the respective dates of such transactions. Recognized
26 |
Table of Contents
Stock Portfolio
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
gains or losses on investment transactions attributable to changes in foreign currency exchange rates are recorded for financial statement purposes as net realized gains and losses on investments. That portion of unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed.
F Use of Estimates — The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.
G Indemnifications — Under the Portfolio’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Portfolio. Under Massachusetts law, if certain conditions prevail, interestholders in the Portfolio could be deemed to have personal liability for the obligations of the Portfolio. However, the Portfolio’s Declaration of Trust contains an express disclaimer of liability on the part of Portfolio interestholders. Additionally, in the normal course of business, the Portfolio enters into agreements with service providers that may contain indemnification clauses. The Portfolio’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Portfolio that have not yet occurred.
H Capital Transactions — To seek to protect the Portfolio (and, indirectly, other investors in the Portfolio) against the costs of accommodating investor inflows and outflows, the Portfolio imposes a fee (“Portfolio transaction fee”) on inflows and outflows by Portfolio investors. The Portfolio transaction fee is sized to cover the estimated cost to the Portfolio of, in connection with issuing interests, converting the cash and/or other instruments it receives to the desired composition and, in connection with redeeming its interests, converting Portfolio holdings to cash and/or other instruments to be distributed. Such fee, which may vary over time, is limited to amounts that have been authorized by the Board of Trustees and determined by EVM to be appropriate. The maximum Portfolio transaction fee is 2% of the amount of net contributions or withdrawals. The Portfolio transaction fee is recorded as a component of capital transactions on the Statements of Changes in Net Assets.
I Interim Financial Statements — The interim financial statements relating to June 30, 2020 and for the six months then ended have not been audited by an independent registered public accounting firm, but in the opinion of the Portfolio’s management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial statements.
2 Investment Adviser Fee and Other Transactions with Affiliates
The investment adviser fee is earned by Boston Management and Research (BMR), a subsidiary of EVM, as compensation for investment advisory services rendered to the Portfolio. Pursuant to the investment advisory agreement and subsequent fee reduction agreement between the Portfolio and BMR, the fee is computed at an annual rate of 0.60% of the Portfolio’s average daily net assets up to $500 million and 0.575% from $500 million but less than $1 billion, and is payable monthly. On net assets of $1 billion or over, the annual fee is reduced. The fee reduction cannot be terminated or reduced without the approval of a majority vote of the Trustees of the Portfolio who are not interested persons of BMR or the Portfolio and by the vote of a majority of the holders of interest in the Portfolio. For the six months ended June 30, 2020, the Portfolio’s investment adviser fee amounted to $1,911,770 or 0.59% (annualized) of the Portfolio’s average daily net assets. The Portfolio invests its cash in Cash Reserves Fund. EVM does not currently receive a fee for advisory services provided to Cash Reserves Fund.
Trustees and officers of the Portfolio who are members of EVM’s or BMR’s organizations receive remuneration for their services to the Portfolio out of the investment adviser fee. Trustees of the Portfolio who are not affiliated with the investment adviser may elect to defer receipt of all or a percentage of their annual fees in accordance with the terms of the Trustees Deferred Compensation Plan. For the six months ended June 30, 2020, no significant amounts have been deferred. Certain officers and Trustees of the Portfolio are officers of the above organizations.
3 Purchases and Sales of Investments
Purchases and sales of investments, other than short-term obligations, aggregated $251,715,258 and $243,218,937, respectively, for the six months ended June 30, 2020
4 Federal Income Tax Basis of Investments
The cost and unrealized appreciation (depreciation) of investments of the Portfolio at June 30, 2020, as determined on a federal income tax basis, were as follows:
Aggregate cost | $ | 498,175,767 | ||
Gross unrealized appreciation | $ | 176,976,603 | ||
Gross unrealized depreciation | (8,711,278 | ) | ||
Net unrealized appreciation | $ | 168,265,325 |
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Stock Portfolio
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
5 Line of Credit
The Portfolio participates with other portfolios and funds managed by EVM and its affiliates in an $800 million unsecured line of credit agreement with a group of banks, which is in effect through October 27, 2020. In connection with the renewal of the agreement on October 29, 2019, funds managed by Calvert Research and Management, an affiliate of EVM, were added as participating funds to the agreement and the borrowing limit was increased from $625 million. Borrowings are made by the Portfolio solely for temporary purposes related to redemptions and other short-term cash needs. Interest is charged to the Portfolio based on its borrowings at an amount above either the Eurodollar rate or Federal Funds rate. In addition, a fee computed at an annual rate of 0.15% on the daily unused portion of the line of credit is allocated among the participating portfolios and funds at the end of each quarter. Because the line of credit is not available exclusively to the Portfolio, it may be unable to borrow some or all of its requested amounts at any particular time. The Portfolio did not have any significant borrowings or allocated fees during the six months ended June 30, 2020.
6 Investments in Affiliated Funds
At June 30, 2020, the value of the Portfolio’s investment in affiliated funds was $1,386,725, which represents 0.2% of the Portfolio’s net assets. Transactions in affiliated funds by the Portfolio for the six months ended June 30, 2020 were as follows:
Name of affiliated fund | Value, beginning of period | Purchases | Sales proceeds | Net realized gain (loss) | Change in unrealized appreciation (depreciation) | Value, end of period | Dividend income | Units, end of period | ||||||||||||||||||||||||
Short-Term Investments |
| |||||||||||||||||||||||||||||||
Eaton Vance Cash Reserves Fund, LLC | $ | 5,512,026 | $ | 89,949,573 | $ | (94,075,360 | ) | $ | 750 | $ | (264 | ) | $ | 1,386,725 | $ | 24,804 | 1,386,725 |
7 Fair Value Measurements
Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
• | Level 1 – quoted prices in active markets for identical investments |
• | Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
• | Level 3 – significant unobservable inputs (including a fund’s own assumptions in determining the fair value of investments) |
In cases where the inputs used to measure fair value fall in different levels of the fair value hierarchy, the level disclosed is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
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Stock Portfolio
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
At June 30, 2020, the hierarchy of inputs used in valuing the Portfolio’s investments, which are carried at value, were as follows:
Asset Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stocks | ||||||||||||||||
Communication Services | $ | 71,232,504 | $ | — | $ | — | $ | 71,232,504 | ||||||||
Consumer Discretionary | 71,324,964 | — | — | 71,324,964 | ||||||||||||
Consumer Staples | 46,163,589 | — | — | 46,163,589 | ||||||||||||
Energy | 17,448,958 | — | — | 17,448,958 | ||||||||||||
Financials | 65,856,186 | — | — | 65,856,186 | ||||||||||||
Health Care | 90,816,032 | 10,922,546 | — | 101,738,578 | ||||||||||||
Industrials | 50,531,424 | — | — | 50,531,424 | ||||||||||||
Information Technology | 188,208,778 | — | — | 188,208,778 | ||||||||||||
Materials | 15,595,610 | — | — | 15,595,610 | ||||||||||||
Real Estate | 16,262,166 | — | — | 16,262,166 | ||||||||||||
Utilities | 20,686,167 | — | — | 20,686,167 | ||||||||||||
Total Common Stocks | $ | 654,126,378 | $ | 10,922,546 | * | $ | — | $ | 665,048,924 | |||||||
Rights | $ | 5,443 | $ | — | $ | — | $ | 5,443 | ||||||||
Short-Term Investments | — | 1,386,725 | — | 1,386,725 | ||||||||||||
Total Investments | $ | 654,131,821 | $ | 12,309,271 | $ | — | $ | 666,441,092 |
* | Includes foreign equity securities whose values were adjusted to reflect market trading of comparable securities or other correlated instruments that occurred after the close of trading in their applicable foreign markets. |
8 Risks and Uncertainties
Pandemic Risk
An outbreak of respiratory disease caused by a novel coronavirus that was first detected in China in December 2019 has spread rapidly internationally. This coronavirus has resulted in closing borders, enhanced health screenings, changes to healthcare service preparation and delivery, quarantines, cancellations, disruptions to supply chains and customer activity, as well as general concern and uncertainty. The impact of this outbreak has negatively affected the worldwide economy, as well as the economies of individual countries and individual companies and can affect the market in general in significant and unforeseen ways. Health crises caused by outbreaks, such as the coronavirus outbreak, may exacerbate other pre-existing political, social and economic risks and disrupt normal market conditions and operations. The near-term impact of this coronavirus has resulted in substantial market volatility, which may have an adverse effect on the Portfolio’s investments.
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Eaton Vance
Balanced Fund
June 30, 2020
Board of Trustees’ Contract Approval
Overview of the Contract Review Process
The Investment Company Act of 1940, as amended (the “1940 Act”), provides, in substance, that the investment advisory agreement between a fund and its investment adviser will continue in effect from year-to-year only if its continuation is approved on an annual basis by a vote of the fund’s board of trustees, including a majority of the trustees who are not “interested persons” of the fund (“independent trustees”), cast in person at a meeting called for the purpose of considering such approval.
At a meeting held on April 22, 2020 (the “April 2020 Meeting”), the Boards of Trustees/Directors comprised of the same individuals (collectively, the “Board”) that oversees a majority of the registered investment companies advised by Eaton Vance Management or its affiliate, Boston Management and Research (the “Eaton Vance Funds”), including a majority of the independent trustees (the “Independent Trustees”), voted to approve the continuation of existing investment advisory agreements and sub-advisory agreements(1) for each of the Eaton Vance Funds for an additional one-year period. The Board relied upon the affirmative recommendation of its Contract Review Committee, which is a committee exclusively comprised of Independent Trustees. Prior to making its recommendation, the Contract Review Committee reviewed information furnished by the adviser and sub-adviser to each of the Eaton Vance Funds (including information specifically requested by the Board) for a series of formal meetings held between February and April 2020. Members of the Contract Review Committee also considered information received at prior meetings of the Board and its committees, to the extent such information was relevant to the Contract Review Committee’s annual evaluation of the investment advisory agreements and sub-advisory agreements.
In connection with its evaluation of the investment advisory agreements and sub-advisory agreements, the Board considered various information relating to the Eaton Vance Funds. This included information applicable to all or groups of Eaton Vance Funds, which is referenced immediately below, and information applicable to the particular Eaton Vance Fund covered by this report (additional fund-specific information is referenced below under “Results of the Contract Review Process”). (For funds that invest through one or more underlying portfolios, references to “each fund” in this section may include information that was considered at the portfolio-level.)
Information about Fees, Performance and Expenses
• | A report from an independent data provider comparing advisory and other fees paid by each fund to such fees paid by comparable funds, as identified by the independent data provider (“comparable funds”); |
• | A report from an independent data provider comparing each fund’s total expense ratio (and its components) to those of comparable funds; |
• | A report from an independent data provider comparing the investment performance of each fund (including, as relevant, total return data, income data, Sharpe ratios and information ratios) to the investment performance of comparable funds and, as applicable, benchmark indices, over various time periods; |
• | In certain instances, data regarding investment performance relative to customized groups of peer funds and blended indices identified by the adviser in consultation with the Portfolio Management Committee of the Board; |
• | Comparative information concerning the fees charged and services provided by the adviser and sub-adviser to each fund in managing other accounts (which may include other mutual funds, collective investment funds and institutional accounts) using investment strategies and techniques similar to those used in managing such fund(s), if any; |
• | Profitability analyses with respect to the adviser and sub-adviser to each of the funds; |
Information about Portfolio Management and Trading
• | Descriptions of the investment management services provided to each fund, as well as each of the funds’ investment strategies and policies; |
• | The procedures and processes used to determine the fair value of fund assets, when necessary, and actions taken to monitor and test the effectiveness of such procedures and processes; |
• | Information about the policies and practices of each fund’s adviser and sub-adviser (in the context of a sub-adviser, only those with trading responsibilities) with respect to trading, including their processes for seeking best execution of portfolio transactions; |
• | Information about the allocation of brokerage transactions and the benefits, if any, received by the adviser and sub-adviser (in the context of a sub-adviser, only those with trading responsibilities) to each fund as a result of brokerage allocation, including, as applicable, information concerning the acquisition of research through client commission arrangements and policies with respect to “soft dollars”; |
• | Data relating to the portfolio turnover rate of each fund; |
Information about each Adviser and Sub-adviser
• | Reports detailing the financial results and condition of the adviser and sub-adviser to each fund; |
• | Information regarding the individual investment professionals whose responsibilities include portfolio management and investment research for the funds, and, for portfolio managers and certain other investment professionals, information relating to their responsibilities with respect to managing other mutual funds and investment accounts, as applicable; |
(1) | Not all Eaton Vance Funds have entered into a sub-advisory agreement with a sub-adviser. Accordingly, references to “sub-adviser” or “sub-advisory agreement” in this “Overview” section may not be applicable to the particular Eaton Vance Fund covered by this report. |
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Eaton Vance
Balanced Fund
June 30, 2020
Board of Trustees’ Contract Approval — continued
• | The Code of Ethics of the adviser and its affiliates and the sub-adviser of each fund, together with information relating to compliance with, and the administration of, such codes; |
• | Policies and procedures relating to proxy voting and the handling of corporate actions and class actions; |
• | Information concerning the resources devoted to compliance efforts undertaken by the adviser and its affiliates and the sub-adviser of each fund, if any, including descriptions of their various compliance programs and their record of compliance; |
• | Information concerning the business continuity and disaster recovery plans of the adviser and its affiliates and the sub-adviser of each fund, if any; |
• | A description of Eaton Vance Management’s and Boston Management and Research’s oversight of sub-advisers, including with respect to regulatory and compliance issues, investment management and other matters; |
Other Relevant Information
• | Information concerning the nature, cost and character of the administrative and other non-investment advisory services provided by Eaton Vance Management and its affiliates; |
• | Information concerning oversight of the relationship with the custodian, subcustodians and fund accountants by the adviser and/or administrator to each of the funds; |
• | For an Eaton Vance Fund structured as an exchange-listed closed-end fund, information concerning the benefits of the closed-end fund structure, as well as, where relevant, the closed-end fund’s market prices, trading volume data, distribution rates and other relevant matters; and |
• | The terms of each investment advisory agreement and sub-advisory agreement. |
During the various meetings of the Board and its committees throughout the twelve months ended April 2020, the Trustees received information from portfolio managers and other investment professionals of the advisers and sub-advisers of the funds regarding investment and performance matters, and considered various investment and trading strategies used in pursuing the funds’ investment objectives. The Trustees also received information regarding risk management techniques employed in connection with the management of the funds. The Board and its committees evaluated issues pertaining to industry and regulatory developments, compliance procedures, fund governance and other issues with respect to the funds, and received and participated in reports and presentations provided by Eaton Vance Management, Boston Management and Research and fund sub-advisers, with respect to such matters. In addition to the formal meetings of the Board and its committees, the Independent Trustees held regular teleconferences to discuss, among other topics, matters relating to the continuation of investment advisory agreements and sub-advisory agreements.
The Contract Review Committee was advised throughout the contract review process by Goodwin Procter LLP, independent legal counsel for the Independent Trustees. The members of the Contract Review Committee, with the advice of such counsel, exercised their own business judgment in determining the material factors to be considered in evaluating each investment advisory agreement and sub-advisory agreement and the weight to be given to each such factor. The conclusions reached with respect to each investment advisory agreement and sub-advisory agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each member of the Contract Review Committee may have placed varying emphasis on particular factors in reaching conclusions with respect to each investment advisory agreement and sub-advisory agreement. In evaluating each investment advisory agreement and sub-advisory agreement, including the fee structures and other terms contained in such agreements, the members of the Contract Review Committee were also informed by multiple years of analysis and discussion with the adviser and sub-adviser to each of the Eaton Vance Funds.
In voting its approval of the continuation of existing investment advisory agreements and sub-advisory agreements at the April 2020 Meeting, the Board relied on an order issued by the Securities and Exchange Commission on March 25, 2020, which provided temporary relief from the in-person voting requirements under Section 15 of the 1940 Act in response to the impacts of the COVID-19 pandemic.
Results of the Contract Review Process
Based on its consideration of the foregoing, and such other information it deemed relevant, including the factors and conclusions described below, the Contract Review Committee concluded that the continuation of the investment advisory agreement between Eaton Vance Balanced Fund (the “Fund”) and Eaton Vance Management (“EVM”), as well as the investment advisory agreements between each of Core Bond Portfolio and Stock Portfolio (the “Portfolios”), which are portfolios in which the Fund invests, and Boston Management and Research (“BMR”) (EVM, with respect to the Fund, and BMR, with respect to the Portfolios, are each referred to herein as the “Adviser”), including their respective fee structures, are in the interests of shareholders and, therefore, recommended to the Board approval of each agreement. Based on the recommendation of the Contract Review Committee, the Board, including a majority of the Independent Trustees, voted to approve continuation of the investment advisory agreements for the Fund and the Portfolios.
Nature, Extent and Quality of Services
In considering whether to approve the investment advisory agreements for the Fund and the Portfolios, the Board evaluated the nature, extent and quality of services provided to the Fund and to the Portfolios by the applicable Adviser. BMR manages the Portfolios, while EVM allocates the assets of the Fund among the Portfolios.
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Eaton Vance
Balanced Fund
June 30, 2020
Board of Trustees’ Contract Approval — continued
The Board considered each Adviser’s management capabilities and investment processes in light of the types of investments held by the Fund and the Portfolios, including the education, experience and number of investment professionals and other personnel who provide portfolio management, investment research, and similar services to the Fund and the Portfolios. The Board specifically noted that each Adviser has devoted extensive resources to in-house equity research and also draws upon independent research available from third-party sources. The Board also noted the abilities and experience of each Adviser’s investment professionals in analyzing factors relevant to investing in investment grade fixed income securities. The Board also took into account the resources dedicated to portfolio management and other services, the compensation methods of each Adviser and other factors, including the reputation and resources of the Adviser to recruit and retain highly qualified research, advisory and supervisory investment professionals. In addition, the Board considered the time and attention devoted to the Eaton Vance Funds, including the Fund and the Portfolios, by senior management, as well as the infrastructure, operational capabilities and support staff in place to assist in the portfolio management and operations of the Fund and the Portfolios, including the provision of administrative services. The Board also considered the business-related and other risks to which each Adviser or its affiliates may be subject in managing the Fund and the Portfolios.
The Board considered the compliance programs of each Adviser and relevant affiliates thereof. The Board considered compliance and reporting matters regarding, among other things, personal trading by investment professionals, disclosure of portfolio holdings, late trading, frequent trading, portfolio valuation, business continuity and the allocation of investment opportunities. The Board also considered the responses of each Adviser and its affiliates to requests in recent years from regulatory authorities, such as the Securities and Exchange Commission and the Financial Industry Regulatory Authority.
The Board considered other administrative services provided or overseen by Eaton Vance Management and its affiliates, including transfer agency and accounting services. The Board evaluated the benefits to shareholders of investing in a fund that is a part of a large fund complex offering exposure to a variety of asset classes and investment disciplines, as well as the ability, in many cases, to exchange an investment among different funds without incurring additional sales charges.
After consideration of the foregoing factors, among others, the Board concluded that the nature, extent and quality of services provided by each Adviser, taken as a whole, are appropriate and consistent with the terms of the applicable investment advisory agreement.
Fund Performance
The Board compared the Fund’s investment performance to that of comparable funds identified by an independent data provider (the peer group), as well as appropriate benchmark indices. The Board’s review included comparative performance data with respect to the Fund for the one-, three-, five- and ten-year periods ended September 30, 2019. In this regard, the Board noted that the performance of the Fund was higher than the median performance of the Fund’s peer group for the three-year period. The Board also noted that the performance of the Fund was higher than its secondary benchmark index and lower than its primary benchmark and blended indexes for the three-year period. The Board concluded that the performance of the Fund was satisfactory.
Management Fees and Expenses
The Board considered contractual fee rates payable by the Portfolios and by the Fund for advisory and administrative services (referred to collectively as “management fees”). As part of its review, the Board considered the Fund’s management fees and total expense ratio for the one-year period ended September 30, 2019, as compared to those of comparable funds, before and after giving effect to any undertaking to waive fees or reimburse expenses. The Board also considered factors that had an impact on the Fund’s total expense ratio relative to comparable funds.
After considering the foregoing information, and in light of the nature, extent and quality of the services provided by each Adviser, the Board concluded that the management fees charged for advisory and related services are reasonable.
Profitability and “Fall-Out” Benefits
The Board considered the level of profits realized by each Adviser and relevant affiliates thereof in providing investment advisory and administrative services to the Fund, to the Portfolios and to all Eaton Vance Funds as a group. The Board considered the level of profits realized without regard to marketing support or other payments by each Adviser and its affiliates to third parties in respect of distribution or other services.
The Board concluded that, in light of the foregoing factors and the nature, extent and quality of the services rendered, the profits realized by each Adviser and its affiliates are deemed not to be excessive.
The Board also considered direct or indirect fall-out benefits received by each Adviser and its affiliates in connection with their respective relationships with the Fund and the Portfolios, including the benefits of research services that may be available to each Adviser as a result of securities transactions effected for the Fund and the Portfolios and other investment advisory clients.
Economies of Scale
In reviewing management fees and profitability, the Board also considered the extent to which the applicable Adviser and its affiliates, on the one hand, and the Fund and the Portfolios, on the other hand, can expect to realize benefits from economies of scale as the assets of the Fund and the Portfolios
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Eaton Vance
Balanced Fund
June 30, 2020
Board of Trustees’ Contract Approval — continued
increase. The Board acknowledged the difficulty in accurately measuring the benefits resulting from economies of scale, if any, with respect to the management of any specific fund or group of funds. The Board reviewed data summarizing the increases and decreases in the assets of the Fund and of all Eaton Vance Funds as a group over various time periods, and evaluated the extent to which the total expense ratio of the Fund and the profitability of each Adviser and its affiliates may have been affected by such increases or decreases. Based upon the foregoing, the Board concluded that the Fund currently shares in the benefits from economies of scale, if any, when they are realized by the Adviser. The Board also concluded that the structure of the advisory fees, which include breakpoints at several asset levels, will allow the Fund and the Portfolios to continue to benefit from any economies of scale in the future.
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Eaton Vance
Balanced Fund
June 30, 2020
Liquidity Risk Management Program
The Fund has implemented a written liquidity risk management program (Program) and related procedures to manage its liquidity in accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (Liquidity Rule). The Liquidity Rule defines “liquidity risk” as the risk that a fund could not meet requests to redeem shares issued by the fund without significant dilution of the remaining investors’ interests in the fund. The Fund’s Board of Trustees/Directors has designated the investment adviser to serve as the administrator of the Program and the related procedures. The administrator has established a Liquidity Risk Management Oversight Committee (Committee) to perform the functions necessary to administer the Program. As part of the Program, the administrator is responsible for identifying illiquid investments and categorizing the relative liquidity of the Fund’s investments in accordance with the Liquidity Rule. Under the Program, the administrator assesses, manages, and periodically reviews the Fund’s liquidity risk, and is responsible for making certain reports to the Fund’s Board of Trustees/Directors and the Securities and Exchange Commission (SEC) regarding the liquidity of the Fund’s investments, and to notify the Board of Trustees/Directors and the SEC of certain liquidity events specified in the Liquidity Rule. The liquidity of the Fund’s portfolio investments is determined based on a number of factors including, but not limited to, relevant market, trading and investment-specific considerations under the Program.
At a meeting of the Fund’s Board of Trustees/Directors, the Committee provided a written report to the Fund’s Board of Trustees/Directors pertaining to the operation, adequacy, and effectiveness of implementation of the Program, as well as the operation of the highly liquid investment minimum (if applicable) for the period December 1, 2018 through December 31, 2019 (Review Period). The Program operated effectively during the Review Period, supporting the administrator’s ability to assess, manage and monitor Fund liquidity risk, including during periods of market volatility and net redemptions. During the Review Period, the Fund met redemption requests on a timely basis.
There can be no assurance that the Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
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Eaton Vance
Balanced Fund
June 30, 2020
Officers of Eaton Vance Balanced Fund
Payson F. Swaffield
President
Maureen A. Gemma
Vice President, Secretary and Chief Legal Officer
James F. Kirchner
Treasurer
Richard F. Froio
Chief Compliance Officer
Officers of Stock Portfolio
Edward J. Perkin
President
Maureen A. Gemma
Vice President, Secretary and Chief Legal Officer
James F. Kirchner
Treasurer
Richard F. Froio
Chief Compliance Officer
Trustees of Eaton Vance Balanced Fund and Stock Portfolio
William H. Park
Chairperson
Thomas E. Faust Jr.*
Mark R. Fetting
Cynthia E. Frost
George J. Gorman
Valerie A. Mosley
Helen Frame Peters
Keith Quinton
Marcus L. Smith
Susan J. Sutherland
Scott E. Wennerholm
* | Interested Trustee |
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Eaton Vance Funds
Privacy. The Eaton Vance organization is committed to ensuring your financial privacy. Each entity listed below has adopted a privacy policy and procedures (“Privacy Program”) Eaton Vance believes is reasonably designed to protect your personal information and to govern when and with whom Eaton Vance may share your personal information.
• | At the time of opening an account, Eaton Vance generally requires you to provide us with certain information such as name, address, social security number, tax status, account numbers, and account balances. This information is necessary for us to both open an account for you and to allow us to satisfy legal requirements such as applicable anti-money laundering reviews and know-your-customer requirements. |
• | On an ongoing basis, in the normal course of servicing your account, Eaton Vance may share your information with unaffiliated third parties that perform various services for Eaton Vance and/or your account. These third parties include transfer agents, custodians, broker/dealers and our professional advisers, including auditors, accountants, and legal counsel. Eaton Vance may additionally share your personal information with our affiliates. |
• | We believe our Privacy Program is reasonably designed to protect the confidentiality of your personal information and to prevent unauthorized access to that information. |
• | We reserve the right to change our Privacy Program at any time upon proper notification to you. You may want to review our Privacy Program periodically for changes by accessing the link on our homepage: www.eatonvance.com. |
Our pledge of protecting your personal information applies to the following entities within the Eaton Vance organization: the Eaton Vance Family of Funds, Eaton Vance Management, Eaton Vance Investment Counsel, Eaton Vance Distributors, Inc., Eaton Vance Trust Company, Eaton Vance Management (International) Limited, Eaton Vance Advisers International Limited, Eaton Vance Global Advisors Limited, Eaton Vance Management’s Real Estate Investment Group, Boston Management and Research, Calvert Research and Management, and Calvert Funds. This Privacy Notice supersedes all previously issued privacy disclosures. For more information about our Privacy Program or about how your personal information may be used, please call 1-800-262-1122.
Delivery of Shareholder Documents. The Securities and Exchange Commission (SEC) permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called “householding” and it helps eliminate duplicate mailings to shareholders. Eaton Vance, or your financial intermediary, may household the mailing of your documents indefinitely unless you instruct Eaton Vance, or your financial intermediary, 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 intermediary. Your instructions that householding not apply to delivery of your Eaton Vance documents will typically be effective within 30 days of receipt by Eaton Vance or your financial intermediary.
Portfolio Holdings. Each Eaton Vance Fund and its underlying Portfolio(s) (if applicable) files a schedule of portfolio holdings on Part F to Form N-PORT with the SEC. Certain information filed on Form N-PORT may be viewed on the Eaton Vance website at www.eatonvance.com, by calling Eaton Vance at 1-800-262-1122 or in the EDGAR database on the SEC’s website at www.sec.gov.
Proxy Voting. From time to time, funds are required to vote proxies related to the securities held by the funds. The Eaton Vance Funds or their underlying Portfolios (if applicable) vote proxies according to a set of policies and procedures approved by the Funds’ and Portfolios’ Boards. You may obtain a description of these policies and procedures and information on how the Funds or Portfolios voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge, upon request, by calling 1-800-262-1122 and by accessing the SEC’s website at www.sec.gov.
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Investment Adviser of Core Bond Portfolio and Stock Portfolio
Boston Management and Research
Two International Place
Boston, MA 02110
Investment Adviser and Administrator of Eaton Vance Balanced Fund
Eaton Vance Management
Two International Place
Boston, MA 02110
Principal Underwriter*
Eaton Vance Distributors, Inc.
Two International Place
Boston, MA 02110
(617) 482-8260
Custodian
State Street Bank and Trust Company
State Street Financial Center, One Lincoln Street
Boston, MA 02111
Transfer Agent
BNY Mellon Investment Servicing (US) Inc.
Attn: Eaton Vance Funds
P.O. Box 9653
Providence, RI 02940-9653
(800) 262-1122
Fund Offices
Two International Place
Boston, MA 02110
* | FINRA BrokerCheck. Investors may check the background of their Investment Professional by contacting the Financial Industry Regulatory Authority (FINRA). FINRA BrokerCheck is a free tool to help investors check the professional background of current and former FINRA-registered securities firms and brokers. FINRA BrokerCheck is available by calling 1-800-289-9999 and at www.FINRA.org. The FINRA BrokerCheck brochure describing this program is available to investors at www.FINRA.org. |
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7698 6.30.20
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Eaton Vance
Core Bond Fund
Semiannual Report
June 30, 2020
Important Note. Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semi-annual shareholder reports will no longer be sent by mail unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (eatonvance.com/funddocuments), and you will be notified by mail each time a report is posted and provided with a website address to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you are a direct investor, you may elect to receive shareholder reports and other communications from the Fund electronically by signing up for e-Delivery at eatonvance.com/edelivery. If you own your shares through a financial intermediary (such as a broker-dealer or bank), you must contact your financial intermediary to sign up.
You may elect to receive all future Fund shareholder reports in paper free of charge. If you are a direct investor, you can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by calling 1-800-262-1122. If you own these shares through a financial intermediary, you must contact your financial intermediary or follow instructions included with this disclosure, if applicable, to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all Eaton Vance funds held directly or to all funds held through your financial intermediary, as applicable.
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Commodity Futures Trading Commission Registration. Effective December 31, 2012, the Commodity Futures Trading Commission (“CFTC”) adopted certain regulatory changes that subject registered investment companies and advisers to regulation by the CFTC if a fund invests more than a prescribed level of its assets in certain CFTC-regulated instruments (including futures, certain options and swap agreements) or markets itself as providing investment exposure to such instruments. The investment adviser has claimed an exclusion from the definition of “commodity pool operator” under the Commodity Exchange Act with respect to its management of the Fund. Accordingly, neither the Fund nor the adviser with respect to the operation of the Fund is subject to CFTC regulation. Because of its management of other strategies, the Fund’s adviser is registered with the CFTC as a commodity pool operator. The adviser is also registered as a commodity trading advisor.
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.
This report must be preceded or accompanied by a current summary prospectus or prospectus. Before investing, investors should consider carefully the investment objective, risks, and charges and expenses of a mutual fund. This and other important information is contained in the summary prospectus and prospectus, which can be obtained from a financial intermediary. Prospective investors should read the prospectus carefully before investing. For further information, please call 1-800-262-1122.
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Semiannual Report June 30, 2020
Eaton Vance
Core Bond Fund
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Table of Contents
Eaton Vance
Core Bond Fund
June 30, 2020
Portfolio Managers Vishal Khanduja, CFA and Brian S. Ellis, CFA
% Average Annual Total Returns | Class Inception Date | Performance Inception Date | Six Months | One Year | Five Years | Ten Years | ||||||||||||||||||
Class A at NAV | 01/05/2009 | 03/07/2000 | 3.11 | % | 5.60 | % | 3.46 | % | 3.52 | % | ||||||||||||||
Class A with 4.75% Maximum Sales Charge | — | — | –1.80 | 0.55 | 2.46 | 3.02 | ||||||||||||||||||
Class I at NAV | 03/21/2007 | 03/07/2000 | 3.24 | 5.76 | 3.70 | 3.77 | ||||||||||||||||||
| ||||||||||||||||||||||||
Bloomberg Barclays U.S. Aggregate Bond Index | — | — | 6.14 | % | 8.74 | % | 4.30 | % | 3.82 | % | ||||||||||||||
% Total Annual Operating Expense Ratios3 | Class A | Class I | ||||||||||||||||||||||
Gross | 0.85 | % | 0.60 | % | ||||||||||||||||||||
Net | 0.74 | 0.49 |
Asset Allocation (% of total investments)
MBS — Mortgage-Backed Securities
See Endnotes and Additional Disclosures in this report.
Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or offering price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance for periods less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to eatonvance.com.
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Table of Contents
Eaton Vance
Core Bond Fund
June 30, 2020
Endnotes and Additional Disclosures
1 | Bloomberg Barclays U.S. Aggregate Bond Index is an unmanaged index of domestic investment-grade bonds, including corporate, government and mortgage-backed securities. Unless otherwise stated, index returns do not reflect the effect of any applicable sales charges, commissions, expenses, taxes or leverage, as applicable. It is not possible to invest directly in an index. |
2 | Total Returns at NAV do not include applicable sales charges. If sales charges were deducted, the returns would be lower. Total Returns shown with maximum sales charge reflect the stated maximum sales charge. Unless otherwise stated, performance does not reflect the deduction of taxes on Fund distributions or redemptions of Fund shares. |
3 | Source: Fund prospectus. Net expense ratios reflect a contractual expense reimbursement that continues through 4/30/21. Without the reimbursement, performance would have been lower. The expense ratios for the current reporting period can be found in the Financial Highlights section of this report. |
4 | Fund invests in an affiliated investment company (Portfolio) with the same objective(s) and policies as the Fund. References to investments are to the Portfolio’s holdings. |
Fund profile subject to change due to active management. |
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Table of Contents
Eaton Vance
Core Bond Fund
June 30, 2020
Example: As a Fund shareholder, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases and redemption fees (if applicable); and (2) ongoing costs, including management fees; distribution and/or service fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of Fund investing and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2020 – June 30, 2020).
Actual Expenses: The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes: The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the actual Fund expense ratio and an assumed rate of return of 5% per year (before expenses), which is not the actual Fund return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption fees (if applicable). Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would be higher.
Beginning Account Value (1/1/20) | Ending Account Value (6/30/20) | Expenses Paid During Period* (1/1/20 – 6/30/20) | Annualized Expense Ratio | |||||||||||||
Actual | ||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,031.10 | $ | 3.74 | ** | 0.74 | % | |||||||
Class I | $ | 1,000.00 | $ | 1,032.40 | $ | 2.48 | ** | 0.49 | % | |||||||
Hypothetical | ||||||||||||||||
(5% return per year before expenses) | ||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,021.20 | $ | 3.72 | ** | 0.74 | % | |||||||
Class I | $ | 1,000.00 | $ | 1,022.40 | $ | 2.46 | ** | 0.49 | % |
* | Expenses are equal to the Fund’s annualized expense ratio for the indicated Class, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). The Example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on December 31, 2019. The Example reflects the expenses of both the Fund and the Portfolio. |
** | Absent an allocation of certain expenses to affiliates, expenses would be higher. |
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Table of Contents
Eaton Vance
Core Bond Fund
June 30, 2020
Statement of Assets and Liabilities (Unaudited)
Assets | June 30, 2020 | |||
Investment in Core Bond Portfolio, at value (identified cost, $150,083,883) | $ | 151,337,638 | ||
Receivable for Fund shares sold | 669,234 | |||
Receivable from affiliate | 20,268 | |||
Total assets | $ | 152,027,140 | ||
Liabilities |
| |||
Payable for Fund shares redeemed | $ | 547,143 | ||
Distributions payable | 2,399 | |||
Payable to affiliates: | ||||
Distribution and service fees | 4,624 | |||
Trustees’ fees | 125 | |||
Accrued expenses | 32,525 | |||
Total liabilities | $ | 586,816 | ||
Net Assets | $ | 151,440,324 | ||
Sources of Net Assets |
| |||
Paid-in capital | $ | 147,923,375 | ||
Distributable earnings | 3,516,949 | |||
Total | $ | 151,440,324 | ||
Class A Shares |
| |||
Net Assets | $ | 22,011,012 | ||
Shares Outstanding | 2,161,039 | |||
Net Asset Value and Redemption Price Per Share | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 10.19 | ||
Maximum Offering Price Per Share | ||||
(100 ÷ 95.25 of net asset value per share) | $ | 10.70 | ||
Class I Shares |
| |||
Net Assets | $ | 129,429,312 | ||
Shares Outstanding | 12,727,451 | |||
Net Asset Value, Offering Price and Redemption Price Per Share | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 10.17 |
On sales of $50,000 or more, the offering price of Class A shares is reduced.
5 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Core Bond Fund
June 30, 2020
Statement of Operations (Unaudited)
Investment Income | Six Months Ended June 30, 2020 | |||
Interest allocated from Portfolio (net of foreign taxes, $128) | $ | 2,739,165 | ||
Dividends allocated from Portfolio | 37,625 | |||
Expenses allocated from Portfolio | (438,584 | ) | ||
Total investment income from Portfolio | $ | 2,338,206 | ||
Expenses |
| |||
Distribution and service fees | ||||
Class A | $ | 31,283 | ||
Trustees’ fees and expenses | 250 | |||
Custodian fee | 10,564 | |||
Transfer and dividend disbursing agent fees | 33,671 | |||
Legal and accounting services | 17,649 | |||
Printing and postage | 11,346 | |||
Registration fees | 21,915 | |||
Miscellaneous | 4,555 | |||
Total expenses | $ | 131,233 | ||
Deduct — | ||||
Allocation of expenses to affiliate | $ | 99,951 | ||
Total expense reductions | $ | 99,951 | ||
Net expenses | $ | 31,282 | ||
Net investment income | $ | 2,306,924 | ||
Realized and Unrealized Gain (Loss) from Portfolio |
| |||
Net realized gain (loss) — | ||||
Investment transactions | $ | 2,343,331 | ||
Financial futures contracts | 1,499,364 | |||
Net realized gain | $ | 3,842,695 | ||
Change in unrealized appreciation (depreciation) — | ||||
Investments | $ | (3,748,427 | ) | |
Financial futures contracts | 712,351 | |||
Net change in unrealized appreciation (depreciation) | $ | (3,036,076 | ) | |
Net realized and unrealized gain | $ | 806,619 | ||
Net increase in net assets from operations | $ | 3,113,543 |
6 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Core Bond Fund
June 30, 2020
Statements of Changes in Net Assets
Increase (Decrease) in Net Assets | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
From operations — | ||||||||
Net investment income | $ | 2,306,924 | $ | 5,396,027 | ||||
Net realized gain | 3,842,695 | 4,759,662 | ||||||
Net change in unrealized appreciation (depreciation) | (3,036,076 | ) | 5,952,140 | |||||
Net increase in net assets from operations | $ | 3,113,543 | $ | 16,107,829 | ||||
Distributions to shareholders — | ||||||||
Class A | $ | (323,393 | ) | $ | (963,106 | ) | ||
Class I | (2,172,677 | ) | (5,772,342 | ) | ||||
Total distributions to shareholders | $ | (2,496,070 | ) | $ | (6,735,448 | ) | ||
Transactions in shares of beneficial interest — | ||||||||
Proceeds from sale of shares | ||||||||
Class A | $ | 4,279,986 | $ | 12,358,118 | ||||
Class I | 37,202,391 | 108,295,651 | ||||||
Net asset value of shares issued to shareholders in payment of distributions declared | ||||||||
Class A | 308,111 | 923,776 | ||||||
Class I | 2,170,697 | 5,760,672 | ||||||
Cost of shares redeemed | ||||||||
Class A | (11,234,562 | ) | (11,648,518 | ) | ||||
Class I | (87,731,669 | ) | (93,611,358 | ) | ||||
Net increase (decrease) in net assets from Fund share transactions | $ | (55,005,046 | ) | $ | 22,078,341 | |||
Net increase (decrease) in net assets | $ | (54,387,573 | ) | $ | 31,450,722 | |||
Net Assets |
| |||||||
At beginning of period | $ | 205,827,897 | $ | 174,377,175 | ||||
At end of period | $ | 151,440,324 | $ | 205,827,897 |
7 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Core Bond Fund
June 30, 2020
Financial Highlights
Class A | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 10.010 | $ | 9.490 | $ | 9.840 | $ | 9.690 | $ | 9.690 | $ | 9.980 | ||||||||||||
Income (Loss) From Operations | ||||||||||||||||||||||||
Net investment income(1) | $ | 0.118 | $ | 0.260 | $ | 0.273 | $ | 0.217 | $ | 0.168 | $ | 0.173 | ||||||||||||
Net realized and unrealized gain (loss) | 0.190 | 0.587 | (0.338 | )�� | 0.187 | 0.075 | (0.201 | ) | ||||||||||||||||
Total income (loss) from operations | $ | 0.308 | $ | 0.847 | $ | (0.065 | ) | $ | 0.404 | $ | 0.243 | $ | (0.028 | ) | ||||||||||
Less Distributions | ||||||||||||||||||||||||
From net investment income | $ | (0.128 | ) | $ | (0.278 | ) | $ | (0.285 | ) | $ | (0.254 | ) | $ | (0.243 | ) | $ | (0.258 | ) | ||||||
From net realized gain | — | (0.049 | ) | — | — | — | (0.004 | ) | ||||||||||||||||
Total distributions | $ | (0.128 | ) | $ | (0.327 | ) | $ | (0.285 | ) | $ | (0.254 | ) | $ | (0.243 | ) | $ | (0.262 | ) | ||||||
Net asset value — End of period | $ | 10.190 | $ | 10.010 | $ | 9.490 | $ | 9.840 | $ | 9.690 | $ | 9.690 | ||||||||||||
Total Return(2)(3) | 3.11 | %(4) | 9.00 | % | (0.64 | )% | 4.20 | % | 2.48 | % | (0.31 | )% | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 22,011 | $ | 28,309 | $ | 25,158 | $ | 34,064 | $ | 37,290 | $ | 34,501 | ||||||||||||
Ratios (as a percentage of average daily net assets):(5) | ||||||||||||||||||||||||
Expenses(3)(6) | 0.74 | %(7) | 0.74 | % | 0.74 | % | 0.75 | % | 0.75 | % | 0.75 | % | ||||||||||||
Net investment income | 2.38 | %(7) | 2.63 | % | 2.85 | % | 2.21 | % | 1.69 | % | 1.75 | % | ||||||||||||
Portfolio Turnover of the Portfolio | 37 | %(4) | 89 | % | 65 | % | 123 | % | 132 | % | 159 | % |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges. |
(3) | The investment adviser of the Portfolio and/or the administrator reimbursed certain operating expenses (equal to 0.12%, 0.11%, 0.11%, 0.11%, 0.11% and 0.21% of average daily net assets for the six months ended June 30, 2020 and the years ended December 31, 2019, 2018, 2017, 2016 and 2015, respectively). Absent this reimbursement, total return would be lower. |
(4) | Not annualized. |
(5) | Includes the Fund’s share of the Portfolio’s allocated expenses. |
(6) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(7) | Annualized. |
8 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Core Bond Fund
June 30, 2020
Financial Highlights — continued
Class I | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 9.990 | $ | 9.470 | $ | 9.830 | $ | 9.680 | $ | 9.680 | $ | 9.960 | ||||||||||||
Income (Loss) From Operations | ||||||||||||||||||||||||
Net investment income(1) | $ | 0.130 | $ | 0.283 | $ | 0.282 | $ | 0.241 | $ | 0.193 | $ | 0.199 | ||||||||||||
Net realized and unrealized gain (loss) | 0.190 | 0.588 | (0.333 | ) | 0.187 | 0.074 | (0.193 | ) | ||||||||||||||||
Total income (loss) from operations | $ | 0.320 | $ | 0.871 | $ | (0.051 | ) | $ | 0.428 | $ | 0.267 | $ | 0.006 | |||||||||||
Less Distributions | ||||||||||||||||||||||||
From net investment income | $ | (0.140 | ) | $ | (0.302 | ) | $ | (0.309 | ) | $ | (0.278 | ) | $ | (0.267 | ) | $ | (0.282 | ) | ||||||
From net realized gain | — | (0.049 | ) | — | — | — | (0.004 | ) | ||||||||||||||||
Total distributions | $ | (0.140 | ) | $ | (0.351 | ) | $ | (0.309 | ) | $ | (0.278 | ) | $ | (0.267 | ) | $ | (0.286 | ) | ||||||
Net asset value — End of period | $ | 10.170 | $ | 9.990 | $ | 9.470 | $ | 9.830 | $ | 9.680 | $ | 9.680 | ||||||||||||
Total Return(2)(3) | 3.24 | %(4) | 9.29 | % | (0.50 | )% | 4.47 | % | 2.73 | % | 0.04 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 129,429 | $ | 177,519 | $ | 149,220 | $ | 130,714 | $ | 115,294 | $ | 55,607 | ||||||||||||
Ratios (as a percentage of average daily net assets):(5) | ||||||||||||||||||||||||
Expenses(3)(6) | 0.49 | %(7) | 0.49 | % | 0.49 | % | 0.50 | % | 0.50 | % | 0.50 | % | ||||||||||||
Net investment income | 2.63 | %(7) | 2.87 | % | 2.95 | % | 2.46 | % | 1.95 | % | 2.01 | % | ||||||||||||
Portfolio Turnover of the Portfolio | 37 | %(4) | 89 | % | 65 | % | 123 | % | 132 | % | 159 | % |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested. |
(3) | The investment adviser of the Portfolio and/or the administrator reimbursed certain operating expenses (equal to 0.12%, 0.11%, 0.11%, 0.11%, 0.11% and 0.21% of average daily net assets for the six months ended June 30, 2020 and the years ended December 31, 2019, 2018, 2017, 2016 and 2015, respectively). Absent this reimbursement, total return would be lower. |
(4) | Not annualized. |
(5) | Includes the Fund’s share of the Portfolio’s allocated expenses. |
(6) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(7) | Annualized. |
9 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Core Bond Fund
June 30, 2020
Notes to Financial Statements (Unaudited)
1 Significant Accounting Policies
Eaton Vance Core Bond Fund (the Fund) is a diversified series of Eaton Vance Special Investment Trust (the Trust). The Trust is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company. The Fund offers two classes of shares. Class A shares are generally sold subject to a sales charge imposed at time of purchase. Class I shares are sold at net asset value and are not subject to a sales charge. Each class represents a pro-rata interest in the Fund, but votes separately on class-specific matters and (as noted below) is subject to different expenses. Realized and unrealized gains and losses are allocated daily to each class of shares based on the relative net assets of each class to the total net assets of the Fund. Net investment income, other than class-specific expenses, is allocated daily to each class of shares based upon the ratio of the value of each class’s paid shares to the total value of all paid shares. Each class of shares differs in its distribution plan and certain other class-specific expenses. The Fund invests all of its investable assets in interests in Core Bond Portfolio (the Portfolio), a Massachusetts business trust, having the same investment objectives and policies as the Fund. The value of the Fund’s investment in the Portfolio reflects the Fund’s proportionate interest in the net assets of the Portfolio (27.8% at June 30, 2020). The performance of the Fund is directly affected by the performance of the Portfolio. The financial statements of the Portfolio, including the portfolio of investments, are included elsewhere in this report and should be read in conjunction with the Fund’s financial statements.
The following is a summary of significant accounting policies of the Fund. The policies are in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The Fund is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946.
A Investment Valuation — Valuation of securities by the Portfolio is discussed in Note 1A of the Portfolio’s Notes to Financial Statements, which are included elsewhere in this report.
B Income — The Fund’s net investment income or loss consists of the Fund’s pro-rata share of the net investment income or loss of the Portfolio, less all actual and accrued expenses of the Fund.
C Federal Taxes — The Fund’s policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its net investment income, and all or substantially all of its net realized capital gains. Accordingly, no provision for federal income or excise tax is necessary.
As of June 30, 2020, the Fund had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. The Fund files a U.S. federal income tax return annually after its fiscal year-end, which is subject to examination by the Internal Revenue Service for a period of three years from the date of filing.
D Expenses — The majority of expenses of the Trust are directly identifiable to an individual fund. Expenses which are not readily identifiable to a specific fund are allocated taking into consideration, among other things, the nature and type of expense and the relative size of the funds.
E Use of Estimates — The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.
F Indemnifications — Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund. Under Massachusetts law, if certain conditions prevail, shareholders of a Massachusetts business trust (such as the Trust) could be deemed to have personal liability for the obligations of the Trust. However, the Trust’s Declaration of Trust contains an express disclaimer of liability on the part of Fund shareholders and the By-laws provide that the Trust shall assume, upon request by the shareholder, the defense on behalf of any Fund shareholders. Moreover, the By-laws also provide for indemnification out of Fund property of any shareholder held personally liable solely by reason of being or having been a shareholder for all loss or expense arising from such liability. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.
G Other — Investment transactions are accounted for on a trade date basis.
H Interim Financial Statements — The interim financial statements relating to June 30, 2020 and for the six months then ended have not been audited by an independent registered public accounting firm, but in the opinion of the Fund’s management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial statements.
2 Distributions to Shareholders and Income Tax Information
The Fund declares dividends daily to shareholders of record at the time of declaration. Distributions are generally paid monthly. Distributions of realized capital gains are made at least annually. Distributions are declared separately for each class of shares. Shareholders may reinvest income and capital gain distributions in additional shares of the same class of the Fund at the net asset value as of the reinvestment date or, at the election of the shareholder, receive distributions in cash. Distributions to shareholders are determined in accordance with income tax regulations, which may differ from U.S. GAAP. As
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Table of Contents
Eaton Vance
Core Bond Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
required by U.S. GAAP, only distributions in excess of tax basis earnings and profits are 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. For tax purposes, distributions from short-term capital gains are considered to be from ordinary income.
At December 31, 2019, the Fund had a net capital loss of $74,983 attributable to security transactions incurred after October 31, 2019 that it has elected to defer. This net capital loss is treated as arising on the first day of the Fund’s taxable year ending December 31, 2020.
3 Transactions with Affiliates
Eaton Vance Management (EVM) serves as the administrator of the Fund, but receives no compensation. The Portfolio has engaged Boston Management and Research (BMR), a subsidiary of EVM, to render investment advisory services. See Note 2 of the Portfolio’s Notes to Financial Statements which are included elsewhere in this report. EVM has agreed to reimburse the Fund’s expenses to the extent that total annual operating expenses (relating to ordinary operating expenses only) exceed 0.74% and 0.49% of the Fund’s average daily net assets for Class A and Class I, respectively. This agreement may be changed or terminated after April 30, 2021. Pursuant to this agreement, EVM was allocated $99,951 of the Fund’s operating expenses for the six months ended June 30, 2020.
EVM provides sub-transfer agency and related services to the Fund pursuant to a Sub-Transfer Agency Support Services Agreement. For the six months ended June 30, 2020, EVM earned $2,850 from the Fund pursuant to such agreement, which is included in transfer and dividend disbursing agent fees on the Statement of Operations. The Fund was informed that Eaton Vance Distributors, Inc. (EVD), an affiliate of EVM and the Fund’s principal underwriter, received $3,736 as its portion of the sales charge on sales of Class A shares for the six months ended June 30, 2020. EVD also received distribution and service fees from Class A shares (see Note 4) and contingent deferred sales charges (see Note 5).
Trustees and officers of the Fund who are members of EVM’s or BMR’s organizations receive remuneration for their services to the Fund out of the investment adviser fee. Certain officers and Trustees of the Fund and the Portfolio are officers of the above organizations.
4 Distribution Plan
The Fund has in effect a distribution plan for Class A shares (Class A Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class A Plan, the Fund pays EVD a distribution and service fee of 0.25% per annum of its average daily net assets attributable to Class A shares for distribution services and facilities provided to the Fund by EVD, as well as for personal services and/or the maintenance of shareholder accounts. Distribution and service fees paid or accrued to EVD for the six months ended June 30, 2020 amounted to $31,283 for Class A shares.
Distribution and service fees are subject to the limitations contained in the Financial Industry Regulatory Authority Rule 2341(d).
5 Contingent Deferred Sales Charges
Class A shares may be subject to a 1% contingent deferred sales charge (CDSC) if redeemed within 18 months of purchase (depending on the circumstances of purchase). Generally, the CDSC is based upon the lower of the net asset value at date of redemption or date of purchase. No charge is levied on shares acquired by reinvestment of dividends or capital gain distributions. For the six months ended June 30, 2020, the Fund was informed that EVD received approximately $100 of CDSCs paid by Class A shareholders.
6 Investment Transactions
For the six months ended June 30, 2020, increases and decreases in the Fund’s investment in the Portfolio aggregated $14,501,178 and $71,483,727, respectively.
11 |
Table of Contents
Eaton Vance
Core Bond Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
7 Shares of Beneficial Interest
The Fund’s Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value). Such shares may be issued in a number of different series (such as the Fund) and classes. Transactions in Fund shares were as follows:
Class A | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 430,691 | 1,260,246 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | 30,755 | 93,092 | ||||||
Redemptions | (1,129,077 | ) | (1,176,422 | ) | ||||
Net increase (decrease) | (667,631 | ) | 176,916 | |||||
Class I | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 3,715,017 | 10,946,987 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | 216,972 | 581,278 | ||||||
Redemptions | (8,967,946 | ) | (9,515,425 | ) | ||||
Net increase (decrease) | (5,035,957 | ) | 2,012,840 |
At June 30, 2020, donor advised and pooled income funds (established and maintained by a public charity) managed by EVM and an Eaton Vance collective investment trust owned in the aggregate 42.8% of the value of the outstanding shares of the Fund.
12 |
Table of Contents
Core Bond Portfolio
June 30, 2020
Portfolio of Investments (Unaudited)
Corporate Bonds & Notes — 43.8% |
| |||||||
Security | Principal Amount (000’s omitted) | Value | ||||||
Aerospace & Defense — 0.4% | ||||||||
Azul Investments LLP, 5.875%, 10/26/24(1) | $ | 625 | $ | 293,841 | ||||
Delta Air Lines, Inc., 7.375%, 1/15/26 | 1,887 | 1,827,512 | ||||||
$ | 2,121,353 | |||||||
Automotive — 2.4% | ||||||||
Ford Motor Credit Co., LLC, 1.146%, (3 mo. USD LIBOR + 0.88%), 10/12/21(2) | $ | 1,566 | $ | 1,486,320 | ||||
Ford Motor Credit Co., LLC, 2.183%, (3 mo. USD LIBOR + 0.81%), 4/5/21(2) | 705 | 676,691 | ||||||
Ford Motor Credit Co., LLC, 2.979%, 8/3/22 | 2,203 | 2,119,727 | ||||||
Ford Motor Credit Co., LLC, 4.14%, 2/15/23 | 300 | 295,035 | ||||||
General Motors Co., 4.20%, 10/1/27 | 2,383 | 2,429,207 | ||||||
General Motors Co., 5.40%, 4/1/48 | 1,563 | 1,546,974 | ||||||
General Motors Financial Co., Inc., 2.90%, 2/26/25 | 3,000 | 2,991,266 | ||||||
General Motors Financial Co., Inc., 3.50%, 11/7/24 | 453 | 459,589 | ||||||
Magna International, Inc., 2.45%, 6/15/30 | 1,080 | 1,106,758 | ||||||
$ | 13,111,567 | |||||||
Banks — 17.6% | ||||||||
Alliance Data Systems Corp., | $ | 1,337 | $ | 1,207,478 | ||||
Australia & New Zealand Banking Group, Ltd., 2.95% to 7/22/25, 7/22/30(1)(3) | 2,150 | 2,195,049 | ||||||
Banco Safra S.A., 4.125%, 2/8/23(1) | 1,210 | 1,228,035 | ||||||
Bank of America Corp., 1.423%, (3 mo. USD LIBOR + 0.38%), 1/23/22(2) | 2,207 | 2,201,473 | ||||||
Bank of America Corp., 2.881% to 4/24/22, 4/24/23(3) | 1,425 | 1,477,575 | ||||||
Bank of America Corp., 3.124% to 1/20/22, 1/20/23(3) | 2,420 | 2,507,195 | ||||||
Bank of America Corp., 3.30%, 1/11/23 | 1,237 | 1,317,738 | ||||||
Bank of America Corp., 3.499% to 5/17/21, 5/17/22(3) | 1,005 | 1,029,010 | ||||||
Bank of America Corp., 3.55% to 3/5/23, | 2,400 | 2,565,491 | ||||||
Bank of America Corp., 3.593% to 7/21/27, 7/21/28(3) | 5,030 | 5,654,088 | ||||||
Bank of America Corp., 3.974% to 2/7/29, 2/7/30(3) | 807 | 939,647 | ||||||
Bank of Nova Scotia (The), 1.625%, 5/1/23 | 1,849 | 1,893,440 | ||||||
BankUnited, Inc., 5.125%, 6/11/30 | 1,800 | 1,839,561 | ||||||
Barclays PLC, 2.852% to 5/7/25, 5/7/26(3) | 2,585 | 2,694,106 | ||||||
Barclays PLC, 4.836%, 5/9/28 | 1,610 | 1,767,978 | ||||||
Capital One Bank (USA), N.A., 3.375%, 2/15/23 | 892 | 939,912 | ||||||
Capital One Financial Corp., 1.48%, (3 mo. USD LIBOR + 0.72%), 1/30/23(2) | 2,300 | 2,259,776 | ||||||
Capital One Financial Corp., 2.60%, 5/11/23 | 540 | 564,277 | ||||||
Capital One Financial Corp., 3.30%, 10/30/24 | 3,227 | 3,475,349 | ||||||
Capital One Financial Corp., 3.75%, 4/24/24 | 700 | 759,408 | ||||||
Citigroup, Inc., 2.976% to 11/5/29, 11/5/30(3) | 1,748 | 1,861,323 |
Security | Principal Amount (000’s omitted) | Value | ||||||
Banks (continued) | ||||||||
Citigroup, Inc., 3.106% to 4/8/25, 4/8/26(3) | $ | 1,447 | $ | 1,554,170 | ||||
Citigroup, Inc., 3.142% to 1/24/22, 1/24/23(3) | 1,302 | 1,346,865 | ||||||
Citigroup, Inc., 3.668% to 7/24/27, 7/24/28(3) | 1,685 | 1,879,505 | ||||||
Citigroup, Inc., 3.70%, 1/12/26 | 1,000 | 1,118,505 | ||||||
Citigroup, Inc., 3.887% to 1/10/27, 1/10/28(3) | 909 | 1,025,052 | ||||||
Citigroup, Inc., 4.075% to 4/23/28, 4/23/29(3) | 1,855 | 2,117,344 | ||||||
Citizens Financial Group, Inc., 4.30%, 12/3/25 | 1,399 | 1,567,249 | ||||||
Commonwealth Bank of Australia, 2.50%, 9/18/22(1) | 1,050 | 1,095,770 | ||||||
Commonwealth Bank of Australia, 3.61% to 9/12/29, 9/12/34(1)(3) | 982 | 1,046,721 | ||||||
Deutsche Bank AG, 1.846%, (3 mo. USD LIBOR + 1.29%), 2/4/21(2) | 2,450 | 2,437,448 | ||||||
Discover Bank, 2.70%, 2/6/30 | 783 | 790,631 | ||||||
Discover Bank, 4.682% to 8/9/23, 8/9/28(3) | 1,193 | 1,205,306 | ||||||
Discover Financial Services, 3.95%, 11/6/24 | 490 | 536,556 | ||||||
Discover Financial Services, 6.125% to | 2,021 | 2,077,992 | ||||||
Goldman Sachs Group, Inc. (The), 2.905% to 7/24/22, 7/24/23(3) | 1,909 | 1,984,824 | ||||||
Goldman Sachs Group, Inc. (The), 3.75%, 2/25/26 | 970 | 1,082,640 | ||||||
Goldman Sachs Group, Inc. (The), 3.85%, 1/26/27 | 1,510 | 1,704,596 | ||||||
Goldman Sachs Group, Inc. (The), 5.75%, 1/24/22 | 951 | 1,026,240 | ||||||
JPMorgan Chase & Co., 2.70%, 5/18/23 | 1,988 | 2,096,209 | ||||||
JPMorgan Chase & Co., 2.739% to 10/15/29, 10/15/30(3) | 2,156 | 2,314,514 | ||||||
JPMorgan Chase & Co., 2.956% to 5/13/30, 5/13/31(3) | 634 | 675,630 | ||||||
JPMorgan Chase & Co., 3.782% to 2/1/27, 2/1/28(3) | 1,000 | 1,133,696 | ||||||
JPMorgan Chase & Co., 3.797% to 7/23/23, 7/23/24(3) | 1,500 | 1,627,127 | ||||||
JPMorgan Chase & Co., 5.625%, 8/16/43 | 628 | 915,669 | ||||||
Lloyds Banking Group PLC, 2.438% to 2/5/25, 2/5/26(3) | 1,661 | 1,716,673 | ||||||
Macquarie Bank, Ltd., 3.624%, 6/3/30(1) | 970 | 1,018,351 | ||||||
Morgan Stanley, 0.766%, (SOFR + 0.70%), 1/20/23(2) | 4,534 | 4,523,712 | ||||||
Morgan Stanley, 3.772% to 1/24/28, 1/24/29(3) | 1,020 | 1,161,819 | ||||||
Morgan Stanley, 4.00%, 7/23/25 | 1,920 | 2,178,387 | ||||||
Morgan Stanley, 4.875%, 11/1/22 | 1,132 | 1,232,001 | ||||||
PPTT, 2006-A GS, Class A, 5.899%(1)(4)(5) | 259 | 244,021 | ||||||
Regions Financial Corp., 2.75%, 8/14/22 | 640 | 666,844 | ||||||
Santander Holdings USA, Inc., 3.45%, 6/2/25 | 1,788 | 1,865,677 | ||||||
Santander Holdings USA, Inc., 4.50%, 7/17/25 | 712 | 770,773 | ||||||
Standard Chartered PLC, 6.00% to 7/26/25(1)(3)(4) | 955 | 957,388 | ||||||
Synovus Bank/Columbus GA, 2.289% to 2/10/22, 2/10/23(3) | 2,450 | 2,481,646 | ||||||
Synovus Financial Corp., 3.125%, 11/1/22 | 622 | 631,159 | ||||||
Truist Financial Corp., 5.10% to 3/1/30(3)(4) | 1,767 | 1,829,022 | ||||||
$ | 96,015,641 |
13 | See Notes to Financial Statements. |
Table of Contents
Core Bond Portfolio
June 30, 2020
Portfolio of Investments (Unaudited) — continued
Security | Principal Amount (000’s omitted) | Value | ||||||
Beverages — 0.1% | ||||||||
Fomento Economico Mexicano SAB de CV, 3.50%, 1/16/50 | $ | 718 | $ | 743,036 | ||||
$ | 743,036 | |||||||
Building Materials — 1.0% | ||||||||
Cemex SAB de CV, 7.375%, 6/5/27(1) | $ | 575 | $ | 585,638 | ||||
Owens Corning, 3.95%, 8/15/29 | 4,062 | 4,431,726 | ||||||
Vulcan Materials Co., 4.50%, 6/15/47 | 479 | 536,194 | ||||||
$ | 5,553,558 | |||||||
Chemicals — 0.6% | ||||||||
Alpek SAB de CV, 4.25%, 9/18/29(1) | $ | 920 | $ | 909,935 | ||||
Huntsman International, LLC, 4.50%, 5/1/29 | 1,627 | 1,714,164 | ||||||
Yara International ASA, 3.148%, 6/4/30(1) | 843 | 878,208 | ||||||
$ | 3,502,307 | |||||||
Commercial Services — 0.4% | ||||||||
Ashtead Capital, Inc., 4.25%, 11/1/29(1) | $ | 1,752 | $ | 1,756,380 | ||||
Ford Foundation (The), 2.415%, 6/1/50 | 650 | 665,131 | ||||||
$ | 2,421,511 | |||||||
Computers — 0.8% | ||||||||
DXC Technology Co., 4.00%, 4/15/23 | $ | 1,157 | $ | 1,215,095 | ||||
DXC Technology Co., 4.125%, 4/15/25 | 937 | 998,708 | ||||||
DXC Technology Co., 4.25%, 4/15/24 | 229 | 246,534 | ||||||
DXC Technology Co., 4.75%, 4/15/27 | 1,127 | 1,236,534 | ||||||
Seagate HDD Cayman, 4.091%, 6/1/29(1) | 463 | 485,117 | ||||||
$ | 4,181,988 | |||||||
Diversified Financial Services — 4.2% | ||||||||
AerCap Ireland Capital DAC/AerCap Global Aviation Trust, 4.50%, 9/15/23(6) | $ | 1,246 | $ | 1,247,066 | ||||
AerCap Ireland Capital DAC/AerCap Global Aviation Trust, 6.50%, 7/15/25 | 742 | 778,163 | ||||||
Affiliated Managers Group, Inc., 3.30%, 6/15/30 | 2,264 | 2,310,880 | ||||||
AG Issuer, LLC, 6.25%, 3/1/28(1) | 1,040 | 969,800 | ||||||
Air Lease Corp., 3.375%, 6/1/21 | 700 | 702,909 | ||||||
Ameriprise Financial, Inc., 3.00%, 4/2/25 | 743 | 807,869 | ||||||
Arch Capital Group, Ltd., 3.635%, 6/30/50 | 856 | 899,836 | ||||||
Banco BTG Pactual S.A./Cayman Islands, 4.50%, 1/10/25(1) | 3,000 | 2,946,600 | ||||||
BlackRock, Inc., 1.90%, 1/28/31 | 1,800 | 1,843,282 | ||||||
Brookfield Finance, Inc., 3.90%, 1/25/28 | 1,943 | 2,135,194 |
Security | Principal Amount (000’s omitted) | Value | ||||||
Diversified Financial Services (continued) | ||||||||
Jefferies Group, LLC/Jefferies Group Capital Finance, Inc., 4.15%, 1/23/30 | $ | 2,336 | $ | 2,538,127 | ||||
KKR Group Finance Co. VI, LLC, | 1,589 | 1,826,560 | ||||||
Neuberger Berman Group, LLC/Neuberger Berman Finance Corp., 4.50%, 3/15/27(1) | 432 | 468,149 | ||||||
Neuberger Berman Group, LLC/Neuberger Berman Finance Corp., 4.875%, 4/15/45(1) | 1,157 | 1,223,818 | ||||||
Stifel Financial Corp., 4.00%, 5/15/30 | 1,408 | 1,493,995 | ||||||
UniCredit SpA, 5.459% to 6/30/30, 6/30/35(1)(3) | 611 | 617,004 | ||||||
$ | 22,809,252 | |||||||
Electric Utilities — 0.6% | ||||||||
Consolidated Edison Co. of New York, Inc., 3.35%, 4/1/30 | $ | 771 | $ | 879,200 | ||||
Entergy Corp., 4.00%, 7/15/22 | 1,046 | 1,110,643 | ||||||
ITC Holdings Corp., 4.05%, 7/1/23 | 680 | 728,415 | ||||||
NextEra Energy Operating Partners, L.P., 4.25%, 9/15/24(1) | 423 | 424,102 | ||||||
$ | 3,142,360 | |||||||
Electrical and Electronic Equipment — 1.0% | ||||||||
Jabil, Inc., 3.60%, 1/15/30 | $ | 2,207 | $ | 2,315,209 | ||||
Jabil, Inc., 3.95%, 1/12/28 | 2,136 | 2,298,316 | ||||||
Jabil, Inc., 4.70%, 9/15/22 | 959 | 1,019,394 | ||||||
$ | 5,632,919 | |||||||
Energy — 0.3% | ||||||||
Empresa Electrica Cochrane SpA, | $ | 1,422 | $ | 1,464,562 | ||||
$ | 1,464,562 | |||||||
Foods — 0.5% | ||||||||
Smithfield Foods, Inc., 2.65%, 10/3/21(1) | $ | 1,304 | $ | 1,289,994 | ||||
Smithfield Foods, Inc., 3.35%, 2/1/22(1) | 1,482 | 1,471,442 | ||||||
$ | 2,761,436 | |||||||
Health Care — 0.3% | ||||||||
Centene Corp., 3.375%, 2/15/30 | $ | 784 | $ | 792,840 | ||||
Centene Corp., 4.25%, 12/15/27 | 798 | 825,311 | ||||||
$ | 1,618,151 | |||||||
Healthcare Products — 0.1% | ||||||||
DENTSPLY SIRONA, Inc., 3.25%, 6/1/30 | $ | 554 | $ | 581,630 | ||||
$ | 581,630 |
14 | See Notes to Financial Statements. |
Table of Contents
Core Bond Portfolio
June 30, 2020
Portfolio of Investments (Unaudited) — continued
Security | Principal Amount (000’s omitted) | Value | ||||||
Insurance — 0.5% | ||||||||
Aflac, Inc., 3.60%, 4/1/30 | $ | 1,320 | $ | 1,542,814 | ||||
Marsh & McLennan Cos., Inc., 1.506%, (3 mo. USD LIBOR + 1.20%), 12/29/21(2) | 753 | 753,386 | ||||||
Principal Financial Group, Inc., 4.30%, 11/15/46 | 534 | 652,658 | ||||||
$ | 2,948,858 | |||||||
Machinery — 0.9% | ||||||||
nVent Finance S.a.r.l., 4.55%, 4/15/28 | $ | 2,700 | $ | 2,892,382 | ||||
Valmont Industries, Inc., 5.25%, 10/1/54 | 1,248 | 1,306,920 | ||||||
Westinghouse Air Brake Technologies Corp., 1.613%, (3 mo. USD LIBOR + 1.30%), 9/15/21(2) | 431 | 431,000 | ||||||
$ | 4,630,302 | |||||||
Media — 1.6% | ||||||||
Charter Communications Operating, LLC/Charter Communications Operating Capital, 2.80%, 4/1/31 | $ | 1,269 | $ | 1,289,288 | ||||
Charter Communications Operating, LLC/Charter Communications Operating Capital, 4.80%, 3/1/50 | 2,895 | 3,294,757 | ||||||
Comcast Corp., 4.70%, 10/15/48 | 613 | 824,098 | ||||||
Discovery Communications, LLC, | 546 | 598,387 | ||||||
Discovery Communications, LLC, | 2,560 | 2,981,827 | ||||||
$ | 8,988,357 | |||||||
Oil and Gas — 1.5% | ||||||||
National Oilwell Varco, Inc., 3.60%, 12/1/29 | $ | 3,850 | $ | 3,781,392 | ||||
Neptune Energy Bondco PLC, | 2,381 | 2,078,887 | ||||||
Noble Energy, Inc., 3.90%, 11/15/24 | 937 | 944,995 | ||||||
Patterson-UTI Energy, Inc., 3.95%, 2/1/28 | 1,830 | 1,383,683 | ||||||
$ | 8,188,957 | |||||||
Other Revenue — 0.6% | ||||||||
BlueHub Loan Fund, Inc., 3.099%, 1/1/30 | $ | 3,160 | $ | 3,238,219 | ||||
$ | 3,238,219 | |||||||
Pharmaceuticals — 1.5% | ||||||||
CVS Health Corp., 3.00%, 8/15/26 | $ | 2,836 | $ | 3,105,043 | ||||
CVS Health Corp., 4.10%, 3/25/25 | 998 | 1,128,872 | ||||||
CVS Health Corp., 4.30%, 3/25/28 | 3,219 | 3,765,757 | ||||||
$ | 7,999,672 | |||||||
Pipelines — 0.6% | ||||||||
Gulfstream Natural Gas, 4.60%, 9/15/25(1) | $ | 431 | $ | 491,330 |
Security | Principal Amount (000’s omitted) | Value | ||||||
Pipelines (continued) | ||||||||
Plains All America Pipeline, L.P./PAA Finance Corp., 3.55%, 12/15/29 | $ | 1,851 | $ | 1,803,188 | ||||
Sabine Pass Liquefaction, LLC, 5.00%, 3/15/27 | 750 | 839,718 | ||||||
$ | 3,134,236 | |||||||
Real Estate Investment Trusts (REITs) — 1.0% | ||||||||
Digital Realty Trust, L.P., 3.70%, 8/15/27 | $ | 1,272 | $ | 1,451,744 | ||||
Iron Mountain, Inc., 5.00%, 7/15/28(1) | 339 | 332,008 | ||||||
Newmark Group, Inc., 6.125%, 11/15/23 | 2,890 | 2,898,816 | ||||||
SITE Centers Corp., 3.625%, 2/1/25 | 874 | 881,722 | ||||||
$ | 5,564,290 | |||||||
Retail-Specialty and Apparel — 1.6% | ||||||||
Home Depot, Inc. (The), 2.70%, 4/15/30 | $ | 882 | $ | 970,337 | ||||
Macy’s Retail Holdings, Inc., 2.875%, 2/15/23 | 2,253 | 1,796,767 | ||||||
Macy’s Retail Holdings, Inc., 3.875%, 1/15/22 | 1,000 | 887,800 | ||||||
Nordstrom, Inc., 4.375%, 4/1/30 | 1,398 | 1,098,655 | ||||||
Nordstrom, Inc., 5.00%, 1/15/44 | 1,835 | 1,300,946 | ||||||
Reliance Intermediate Holdings, L.P., | 75 | 75,648 | ||||||
Tapestry, Inc., 4.125%, 7/15/27 | 2,461 | 2,319,292 | ||||||
$ | 8,449,445 | |||||||
Technology — 0.1% | ||||||||
Western Digital Corp., 4.75%, 2/15/26 | $ | 690 | $ | 715,213 | ||||
$ | 715,213 | |||||||
Telecommunications — 2.3% | ||||||||
AT&T, Inc., 2.30%, 6/1/27 | $ | 1 | $ | 1,034 | ||||
AT&T, Inc., 3.65%, 6/1/51 | 2,875 | 3,013,129 | ||||||
AT&T, Inc., 4.30%, 2/15/30 | 3,197 | 3,738,025 | ||||||
AT&T, Inc., 4.50%, 3/9/48 | 2,250 | 2,644,640 | ||||||
AT&T, Inc., 5.35%, 12/15/43 | 1,000 | 1,264,859 | ||||||
T-Mobile USA, Inc., 2.55%, 2/15/31(1) | 1,826 | 1,836,993 | ||||||
$ | 12,498,680 | |||||||
Transportation — 0.5% | ||||||||
FedEx Corp., 4.55%, 4/1/46 | $ | 500 | $ | 540,416 | ||||
SMBC Aviation Capital Finance DAC, | 914 | 919,031 | ||||||
SMBC Aviation Capital Finance DAC, | 1,200 | 1,229,414 | ||||||
$ | 2,688,861 |
15 | See Notes to Financial Statements. |
Table of Contents
Core Bond Portfolio
June 30, 2020
Portfolio of Investments (Unaudited) — continued
Security | Principal Amount (000’s omitted) | Value | ||||||
Utilities — 0.8% | ||||||||
American Water Capital Corp., 2.95%, 9/1/27 | $ | 1,426 | $ | 1,572,189 | ||||
Southern Co. Gas Capital Corp., | 1,060 | 1,113,202 | ||||||
Southern Co. Gas Capital Corp., | 1,270 | 1,405,847 | ||||||
$ | 4,091,238 | |||||||
Total Corporate Bonds & Notes |
| $ | 238,797,599 | |||||
Agency Mortgage-Backed Securities — 9.2% |
| |||||||
Security | Principal Amount (000’s omitted) | Value | ||||||
Federal Home Loan Mortgage Corp.: | ||||||||
30-Year, 2.50%, TBA(7) | $ | 5,400 | $ | 5,628,234 | ||||
Pool #A93547, 4.50%, 8/1/40 | 639 | 711,268 | ||||||
Pool #C03490, 4.50%, 8/1/40 | 428 | 476,410 | ||||||
Pool #C09031, 2.50%, 2/1/43 | 1,453 | 1,542,026 | ||||||
Pool #G07589, 5.50%, 6/1/41 | 2,082 | 2,442,820 | ||||||
Pool #G08596, 4.50%, 7/1/44 | 594 | 649,658 | ||||||
Pool #G08670, 3.00%, 10/1/45 | 1,091 | 1,154,325 | ||||||
Pool #G08701, 3.00%, 4/1/46 | 1,616 | 1,706,491 | ||||||
Pool #G60608, 4.00%, 5/1/46 | 2,484 | 2,688,541 | ||||||
Pool #G60761, 3.00%, 10/1/43 | 1,685 | 1,805,566 | ||||||
Pool #Q17453, 3.50%, 4/1/43 | 1,399 | 1,519,232 | ||||||
Pool #Q34310, 3.50%, 6/1/45 | 1,453 | 1,559,807 | ||||||
Pool #Q40264, 3.50%, 5/1/46 | 1,171 | 1,244,251 | ||||||
Pool #Q45051, 3.00%, 12/1/46 | 2,830 | 3,033,837 | ||||||
Pool #Q46889, 3.50%, 3/1/47 | 2,103 | 2,268,234 | ||||||
Pool #Q47999, 4.00%, 5/1/47 | 2,631 | 2,863,107 | ||||||
$ | 31,293,807 | |||||||
Federal National Mortgage Association: | ||||||||
Pool #AB3678, 3.50%, 10/1/41 | $ | 2,859 | $ | 3,149,911 | ||||
Pool #AL7524, 5.00%, 7/1/41 | 649 | 741,166 | ||||||
Pool #AS3892, 4.00%, 11/1/44 | 849 | 924,875 | ||||||
Pool #AS5332, 4.00%, 7/1/45 | 884 | 961,236 | ||||||
Pool #AS6014, 4.00%, 10/1/45 | 596 | 647,922 | ||||||
Pool #BA0891, 3.50%, 1/1/46 | 1,960 | 2,087,923 | ||||||
Pool #BA3938, 3.50%, 1/1/46 | 1,242 | 1,323,280 | ||||||
Pool #BD1183, 3.50%, 12/1/46 | 877 | 929,858 | ||||||
Pool #BE2316, 3.50%, 1/1/47 | 2,393 | 2,537,112 | ||||||
Pool #BM1144, 2.50%, 3/1/47 | 1,628 | 1,707,580 | ||||||
Pool #MA1789, 4.50%, 2/1/44 | 595 | 650,984 | ||||||
Pool #MA2653, 4.00%, 6/1/46 | 1,366 | 1,473,042 | ||||||
$ | 17,134,889 |
Security | Principal Amount (000’s omitted) | Value | ||||||
Government National Mortgage Association: | ||||||||
Pool #AQ1784, 3.50%, 12/20/45 | $ | 1,429 | $ | 1,568,180 | ||||
$ | 1,568,180 | |||||||
Total Agency Mortgage-Backed Securities |
| $ | 49,996,876 | |||||
Collateralized Mortgage Obligations — 8.1% |
| |||||||
Security | Principal Amount (000’s omitted) | Value | ||||||
Federal Home Loan Mortgage Corp. | ||||||||
Series 4030, Class PA, 3.50%, 6/15/40 | $ | 758 | $ | 768,237 | ||||
Federal Home Loan Mortgage Corp. Structured Agency Credit Risk Debt Notes: | ||||||||
Series 2017-DNA3, Class M2, 2.685%, (1 mo. USD LIBOR + 2.50%), 3/25/30(2) | 1,889 | 1,909,704 | ||||||
Series 2018-DNA1, Class M2AT, 1.235%, (1 mo. USD LIBOR + 1.05%), 7/25/30(2) | 1,329 | 1,326,767 | ||||||
Series 2019-DNA3, Class M2, 2.235%, (1 mo. USD LIBOR + 2.05%), 7/25/49(1)(2) | 2,974 | 2,919,799 | ||||||
Series 2019-DNA4, Class M2, 2.135%, (1 mo. USD LIBOR + 1.95%), | 1,309 | 1,285,342 | ||||||
Series 2019-HQA2, Class M2, 2.235%, (1 mo. USD LIBOR + 2.05%), 4/25/49(1)(2) | 571 | 562,475 | ||||||
Series 2019-HQA3, Class M2, 2.035%, (1 mo. USD LIBOR + 1.85%), 9/25/49(1)(2) | 249 | 241,513 | ||||||
Series 2020-DNA1, Class M1, 0.885%, (1 mo. USD LIBOR + 0.70%), 1/25/50(1)(2) | 482 | 483,373 | ||||||
Series 2020-DNA2, Class M1, 0.935%, (1 mo. USD LIBOR + 0.75%), 2/25/50(1)(2) | 1,730 | 1,722,663 | ||||||
Series 2020-HQA1, Class M1, 0.935%, (1 mo. USD LIBOR + 0.75%), 1/25/50(1)(2) | 206 | 206,958 | ||||||
$ | 11,426,831 | |||||||
Federal National Mortgage Association: | ||||||||
Series 2005-58, Class MA, 5.50%, 7/25/35 | $ | 162 | $ | 182,659 | ||||
Series 2011-135, Class PK, 4.50%, 5/25/40 | 625 | 648,369 | ||||||
Series 2013-6, Class HD, 1.50%, 12/25/42 | 182 | 180,975 | ||||||
Series 2014-70, Class KP, 3.50%, 3/25/44 | 917 | 990,969 | ||||||
Series 2018-M4, Class A2, | 1,721 | 1,950,977 | ||||||
Series 2019-M1, Class A2, | 4,835 | 5,691,850 | ||||||
Series 2019-M9, Class A2, 2.937%, 4/25/29 | 1,290 | 1,430,367 | ||||||
Series 2019-M22, Class A2, 2.522%, 8/25/29 | 5,900 | 6,473,113 | ||||||
Series 2020-M1, Class A2, 2.444%, 10/25/29 | 4,530 | 4,911,815 | ||||||
$ | 22,461,094 |
16 | See Notes to Financial Statements. |
Table of Contents
Core Bond Portfolio
June 30, 2020
Portfolio of Investments (Unaudited) — continued
Security | Principal Amount (000’s omitted) | Value | ||||||
Federal National Mortgage Association Connecticut Avenue Securities: | ||||||||
Series 2013-C01, Class M2, 5.435%, (1 mo. USD LIBOR + 5.25%), | $ | 1,739 | $ | 1,576,482 | ||||
Series 2014-C02, Class 1M2, 2.785%, (1 mo. USD LIBOR + 2.60%), 5/25/24(2) | 1,719 | 1,543,099 | ||||||
Series 2014-C02, Class 2M2, 2.785%, (1 mo. USD LIBOR + 2.60%), 5/25/24(2) | 703 | 659,419 | ||||||
Series 2014-C03, Class 1M2, 3.185%, (1 mo. USD LIBOR + 3.00%), 7/25/24(2) | 914 | 827,767 | ||||||
Series 2014-C03, Class 2M2, 3.085%, (1 mo. USD LIBOR + 2.90%), 7/25/24(2) | 1,384 | 1,307,464 | ||||||
Series 2017-C06, Class 1M2, 2.835%, (1 mo. USD LIBOR + 2.65%), 2/25/30(2) | 1,086 | 1,084,858 | ||||||
Series 2018-R07, Class 1M2, 2.585%, (1 mo. USD LIBOR + 2.40%), | 798 | 792,127 | ||||||
Series 2019-R05, Class 1M2, 2.185%, (1 mo. USD LIBOR + 2.00%), | 679 | 675,197 | ||||||
Series 2019-R06, Class 2M1, 0.935%, (1 mo. USD LIBOR + 0.75%), | 296 | 296,894 | ||||||
Series 2020-R01, Class 1M1, 0.985%, (1 mo. USD LIBOR + 0.80%), | 1,515 | 1,512,160 | ||||||
$ | 10,275,467 | |||||||
Total Collateralized Mortgage Obligations |
| $ | 44,163,392 | |||||
Commercial Mortgage-Backed Securities — 8.4% |
| |||||||
Security | Principal Amount (000’s omitted) | Value | ||||||
BAMLL Commercial Mortgage Securities Trust | ||||||||
Series 2019-BPR, Class DNM, | $ | 3,325 | $ | 2,222,931 | ||||
Series 2019-BPR, Class FNM, | 1,635 | 1,006,908 | ||||||
BX Commercial Mortgage Trust | ||||||||
Series 2019-XL, Class A, 1.105%, (1 mo. USD LIBOR + 0.92%), 10/15/36(1)(2) | 3,172 | 3,161,412 | ||||||
Series 2019-XL, Class B, 1.265%, (1 mo. USD LIBOR + 1.08%), 10/15/36(1)(2) | 1,261 | 1,242,712 | ||||||
CFCRE Commercial Mortgage Trust | ||||||||
Series 2016-C7, Class C, | 1,250 | 1,128,264 | ||||||
Series 2016-C7, Class D, | 2,000 | 1,476,866 | ||||||
Citigroup Commercial Mortgage Trust | ||||||||
Series 2017-MDRB, Class C, 2.685%, (1 mo. USD LIBOR + 2.50%), | 3,000 | 2,829,489 | ||||||
COMM Mortgage Trust | ||||||||
Series 2014-CR21, Class C, | 500 | 487,395 | ||||||
Credit Suisse Mortgage Trust | ||||||||
Series 2016-NXSR, Class C, | 1,775 | 1,602,835 |
Security | Principal Amount (000’s omitted) | Value | ||||||
Federal National Mortgage Association Multifamily Connecticut Avenue Securities Trust | ||||||||
Series 2020-01, Class M10, 3.935%, (1 mo. USD LIBOR + 3.75%), 3/25/50(1)(2) | $ | 1,260 | $ | 1,163,787 | ||||
JPMBB Commercial Mortgage Securities Trust | ||||||||
Series 2014-C22, Class D, | 990 | 536,776 | ||||||
Series 2014-C25, Class D, | 1,960 | 938,434 | ||||||
JPMorgan Chase Commercial Mortgage Securities Trust | ||||||||
Series 2011-C5, Class D, | 2,000 | 1,621,811 | ||||||
Series 2012-CIBX, Class AS, | 3,325 | 3,440,147 | ||||||
Series 2013-C13, Class D, | 2,000 | 1,951,534 | ||||||
Morgan Stanley Bank of America Merrill Lynch Trust | ||||||||
Series 2016-C29, Class C, | 993 | 918,382 | ||||||
Morgan Stanley Capital I Trust | ||||||||
Series 2016-UBS12, Class D, | 1,745 | 1,153,698 | ||||||
Series 2019-BPR, Class A, 1.585%, (1 mo. USD LIBOR + 1.40%), 5/15/36(1)(2) | 3,040 | 2,710,009 | ||||||
Motel 6 Trust | ||||||||
Series 2017-MTL6, Class C, 1.585%, (1 mo. USD LIBOR + 1.40%), 8/15/34(1)(2) | 2,391 | 2,280,879 | ||||||
Series 2017-MTL6, Class D, 2.335%, (1 mo. USD LIBOR + 2.15%), 8/15/34(1)(2) | 494 | 466,287 | ||||||
Natixis Commercial Mortgage Securities Trust | ||||||||
Series 2018-FL1, Class C, 2.385%, (1 mo. USD LIBOR + 2.20%), 6/15/35(1)(2) | 5,000 | 4,446,653 | ||||||
Provident Funding Mortgage Trust | ||||||||
Series 2020-1, Class A3, 3.00%, 2/25/50(1)(8) | 665 | 678,912 | ||||||
RETL Trust | ||||||||
Series 2019-RVP, Class A, 1.335%, (1 mo. USD LIBOR + 1.15%), 3/15/36(1)(2) | 541 | 516,614 | ||||||
Series 2019-RVP, Class B, 1.735%, (1 mo. USD LIBOR + 1.55%), 3/15/36(1)(2) | 2,550 | 2,315,190 | ||||||
Toorak Mortgage Corp., Ltd. | ||||||||
Series 2018-1, Class A1, 4.336% to 4/25/21, 8/25/21(1)(9) | 1,330 | 1,335,992 | ||||||
Series 2020-1, Class A1, 2.734% to 1/25/23, 3/25/23(1)(9) | 730 | 722,218 | ||||||
VMC Finance, LLC | ||||||||
Series 2018-FL2, Class A, 1.114%, (1 mo. USD LIBOR + 0.92%), 10/15/35(1)(2) | 2,535 | 2,418,871 | ||||||
Wells Fargo Commercial Mortgage Trust | ||||||||
Series 2015-LC22, Class C, | 900 | 850,773 | ||||||
Series 2016-C35, Class D, | 500 | 335,199 | ||||||
Total Commercial Mortgage-Backed Securities |
| $ | 45,960,978 |
17 | See Notes to Financial Statements. |
Table of Contents
Core Bond Portfolio
June 30, 2020
Portfolio of Investments (Unaudited) — continued
Asset-Backed Securities — 15.0% |
| |||||||
Security | Principal Amount (000’s omitted) | Value | ||||||
Adams Outdoor Advertising L.P. | ||||||||
Series 2018-1, Class A, 4.81%, 11/15/48(1) | $ | 728 | $ | 743,039 | ||||
Canyon Capital CLO, Ltd. | ||||||||
Series 2016-1A, Class BR, 2.919%, (3 mo. USD LIBOR + 1.70%), 7/15/31(1)(2) | 1,000 | 962,225 | ||||||
Series 2016-1A, Class DR, 4.019%, (3 mo. USD LIBOR + 2.80%), 7/15/31(1)(2) | 1,000 | 902,627 | ||||||
Carlyle Global Market Strategies CLO, Ltd. | ||||||||
Series 2014-3RA, Class A2, 2.541%, (3 mo. USD LIBOR + 1.55%), 7/27/31(1)(2) | 1,000 | 934,643 | ||||||
Series 2014-3RA, Class C, 3.941%, (3 mo. USD LIBOR + 2.95%), 7/27/31(1)(2) | 1,000 | 858,297 | ||||||
CarMax Auto Owner Trust | ||||||||
Series 2017-2, Class A3, 1.93%, 3/15/22 | 307 | 308,489 | ||||||
CIG Auto Receivables Trust | ||||||||
Series 2019-1A, Class A, 3.33%, 8/15/24(1) | 893 | 905,452 | ||||||
CNH Equipment Trust | ||||||||
Series 2017-A, Class A3, 2.07%, 5/16/22 | 316 | 317,766 | ||||||
Coinstar Funding, LLC | ||||||||
Series 2017-1A, Class A2, | 2,852 | 2,735,624 | ||||||
Conn’s Receivables Funding, LLC | ||||||||
Series 2018-A, Class A, 3.25%, 1/15/23(1) | 35 | 34,505 | ||||||
Series 2019-A, Class A, 3.40%, 10/16/23(1) | 176 | 174,458 | ||||||
Series 2019-B, Class A, 2.66%, 6/17/24(1) | 1,722 | 1,698,837 | ||||||
Credit Acceptance Auto Loan Trust | ||||||||
Series 2017-2A, Class A, 2.55%, 2/17/26(1) | 7 | 6,884 | ||||||
DB Master Finance, LLC | ||||||||
Series 2017-1A, Class A2II, | 332 | 352,102 | ||||||
Drive Auto Receivables Trust | ||||||||
Series 2017-BA, Class D, 3.72%, 10/17/22(1) | 407 | 410,302 | ||||||
Series 2018-1, Class C, 3.22%, 3/15/23 | 129 | 129,417 | ||||||
Driven Brands Funding, LLC | ||||||||
Series 2018-1A, Class A2, | 760 | 807,103 | ||||||
Dryden Senior Loan Fund | ||||||||
Series 2018-55A, Class D, 4.069%, (3 mo. USD LIBOR + 2.85%), 4/15/31(1)(2) | 1,000 | 883,682 | ||||||
Exeter Automobile Receivables Trust | ||||||||
Series 2019-3A, Class A, 2.59%, 9/15/22(1) | 645 | 647,334 | ||||||
FOCUS Brands Funding, LLC | ||||||||
Series 2017-1A, Class A2II, | 970 | 785,930 | ||||||
Foundation Finance Trust | ||||||||
Series 2017-1A, Class A, 3.30%, 7/15/33(1) | 1,028 | �� | 1,036,490 | |||||
FREED ABS Trust | ||||||||
Series 2019-2, Class A, 2.62%, 11/18/26(1) | 2,917 | 2,917,621 | ||||||
Series 2020-FP1, Class A, 2.52%, 3/18/27(1) | 1,954 | 1,950,919 |
Security | Principal Amount (000’s omitted) | Value | ||||||
Hardee’s Funding, LLC | ||||||||
Series 2018-1A, Class A2I, 4.25%, 6/20/48(1) | $ | 963 | $ | 979,738 | ||||
Hertz Fleet Lease Funding, L.P. | ||||||||
Series 2017-1, Class A2, 2.13%, 4/10/31(1) | 205 | 204,455 | ||||||
Horizon Aircraft Finance I, Ltd. | ||||||||
Series 2018-1, Class A, 4.458%, 12/15/38(1) | 3,171 | 2,892,637 | ||||||
Horizon Aircraft Finance III, Ltd. | ||||||||
Series 2019-2, Class A, 3.425%, 11/15/39(1) | 1,562 | 1,366,261 | ||||||
InSite Issuer, LLC | ||||||||
Series 2016-1A, Class A, 2.883%, 11/15/46(1) | 655 | 666,374 | ||||||
Jack in the Box Funding, LLC | ||||||||
Series 2019-1A, Class A2I, 3.982%, 8/25/49(1) | 1,577 | 1,627,100 | ||||||
Jersey Mike’s Funding | ||||||||
Series 2019-1A, Class A2, 4.433%, 2/15/50(1) | 1,039 | 1,023,914 | ||||||
LL ABS Trust | ||||||||
Series 2019-1A, Class A, 2.87%, 3/15/27(1) | 1,079 | 1,084,137 | ||||||
Lunar Aircraft, Ltd. | ||||||||
Series 2020-1A, Class B, 4.335%, 2/15/45(1) | 686 | 407,728 | ||||||
MelTel Land Funding, LLC | ||||||||
Series 2019-1A, Class B, 4.701%, 4/15/49(1) | 960 | 963,087 | ||||||
Mercedes-Benz Auto Lease Trust | ||||||||
Series 2019-A, Class A2, 3.01%, 2/16/21 | 93 | 93,278 | ||||||
OneMain Financial Issuance Trust | ||||||||
Series 2017-1A, Class A1, 2.37%, 9/14/32(1) | 1,074 | 1,077,079 | ||||||
Planet Fitness Master Issuer, LLC | ||||||||
Series 2018-1A, Class A2I, 4.262%, 9/5/48(1) | 2,044 | 2,062,922 | ||||||
Series 2019-1A, Class A2, 3.858%, 12/5/49(1) | 1,035 | 895,879 | ||||||
Prestige Auto Receivables Trust | ||||||||
Series 2019-1A, Class A2, 2.44%, 7/15/22(1) | 583 | 585,950 | ||||||
Purchasing Power Funding, LLC | ||||||||
Series 2018-A, Class A, 3.34%, 8/15/22(1) | 3,106 | 3,111,645 | ||||||
SERVPRO Master Issuer, LLC | ||||||||
Series 2019-1A, Class A2, 3.882%, 10/25/49(1) | 4,491 | 4,544,824 | ||||||
Skopos Auto Receivables Trust | ||||||||
Series 2019-1A, Class A, 2.90%, 12/15/22(1) | 1,723 | 1,723,033 | ||||||
Small Business Lending Trust | ||||||||
Series 2019-A, Class A, 2.85%, 7/15/26(1) | 755 | 733,267 | ||||||
Series 2020-A, Class A, 2.62%, 12/15/26(1) | 1,008 | 973,142 | ||||||
Sonic Capital, LLC | ||||||||
Series 2020-1A, Class A2I, 3.845%, 1/20/50(1) | 2,559 | 2,697,743 | ||||||
SpringCastle Funding Asset-Backed Notes | ||||||||
Series 2019-AA, Class A, 3.20%, 5/27/36(1) | 2,071 | 2,097,121 | ||||||
Stack Infrastructure Issuer, LLC | ||||||||
Series 2019-1A, Class A2, 4.54%, 2/25/44(1) | 8,796 | 9,242,656 | ||||||
Series 2019-2A, Class A2, 3.08%, 10/25/44(1) | 750 | 738,074 | ||||||
TCF Auto Receivables Owner Trust | ||||||||
Series 2016-PT1A, Class A, 1.93%, 6/15/22(1) | 111 | 111,160 |
18 | See Notes to Financial Statements. |
Table of Contents
Core Bond Portfolio
June 30, 2020
Portfolio of Investments (Unaudited) — continued
Security | Principal Amount (000’s omitted) | Value | ||||||
Tesla Auto Lease Trust | ||||||||
Series 2018-B, Class A, 3.71%, 8/20/21(1) | $ | 807 | $ | 819,045 | ||||
Series 2018-B, Class C, 4.36%, 10/20/21(1) | 1,050 | 1,071,098 | ||||||
Series 2019-A, Class A3, | 3,680 | 3,776,155 | ||||||
Towd Point Asset Trust | ||||||||
Series 2018-SL1, Class A, 0.768%, (1 mo. USD LIBOR + 0.60%), 1/25/46(1)(2) | 4,197 | 4,098,179 | ||||||
Upgrade Receivables Trust | ||||||||
Series 2019-1A, Class B, 4.09%, 3/15/25(1) | 2,000 | 1,971,938 | ||||||
Series 2019-2A, Class A, | 1,791 | 1,791,977 | ||||||
Upland CLO, Ltd. | ||||||||
Series 2016-1A, Class CR, 4.035%, (3 mo. USD LIBOR + 2.90%), 4/20/31(1)(2) | 1,000 | 940,017 | ||||||
Vantage Data Centers Issuer, LLC | ||||||||
Series 2018-1A, Class A2, | 1,351 | 1,391,619 | ||||||
Series 2019-1A, Class A2, | 1,993 | 2,030,870 | ||||||
Veros Automobile Receivables Trust | ||||||||
Series 2018-1, Class A, 3.63%, 5/15/23(1) | 36 | 36,505 | ||||||
Voya CLO, Ltd. | ||||||||
Series 2018-2A, Class B1, 2.769%, (3 mo. USD LIBOR + 1.55%), 7/15/31(1)(2) | 1,000 | 953,638 | ||||||
Willis Engine Structured Trust | ||||||||
Series 2020-A, Class B, 4.212%, 3/15/45(1) | 1,043 | 579,532 | ||||||
Series 2020-A, Class C, 6.657%, 3/15/45(1) | 354 | 146,443 | ||||||
Total Asset-Backed Securities |
| $ | 82,013,966 | |||||
U.S. Treasury Obligations — 9.0% |
| |||||||
Security | Principal Amount (000’s omitted) | Value | ||||||
U.S. Treasury Bond, 2.00%, 2/15/50 | $ | 740 | $ | 847,271 | ||||
U.S. Treasury Inflation-Protected Note, 0.75%, 7/15/28(10) | 18,074 | 20,397,881 | ||||||
U.S. Treasury Note, 0.25%, 5/31/25 | 3,310 | 3,306,121 | ||||||
U.S. Treasury Note, 0.625%, 5/15/30 | 3,084 | 3,075,085 | ||||||
U.S. Treasury Note, 1.625%, 10/15/20 | 10,716 | 10,760,804 | ||||||
U.S. Treasury Note, 1.75%, 10/31/20 | 10,800 | 10,856,160 | ||||||
Total U.S. Treasury Obligations |
| $ | 49,243,322 |
Taxable Municipal Securities — 2.1% |
| |||||||
Security | Principal Amount (000’s omitted) | Value | ||||||
Special Tax Revenue — 0.3% | ||||||||
California Health Facilities Financing Authority, (No Place Like Home Program), 3.034%, 6/1/34 | $ | 1,430 | $ | 1,481,580 | ||||
$ | 1,481,580 | |||||||
Water and Sewer — 1.8% | ||||||||
Narragansett Bay Commission, RI, Wastewater System Revenue, Green Bonds, | $ | 820 | $ | 837,638 | ||||
Narragansett Bay Commission, RI, Wastewater System Revenue, Green Bonds, | 650 | 663,397 | ||||||
Narragansett Bay Commission, RI, Wastewater System Revenue, Green Bonds, | 585 | 597,420 | ||||||
Narragansett Bay Commission, RI, Wastewater System Revenue, Green Bonds, | 635 | 649,319 | ||||||
San Francisco City and County Public Utilities Commission, CA, Water Revenue, Green Bonds, 3.303%, 11/1/39 | 6,750 | 7,201,170 | ||||||
$ | 9,948,944 | |||||||
Total Taxable Municipal Securities | $ | 11,430,524 | ||||||
Preferred Securities — 0.4% |
| |||||||
Security | Shares | Value | ||||||
Oil, Gas & Consumable Fuels — 0.1% | ||||||||
NuStar Energy, L.P., Series B, 7.625% to 6/15/22(3) | 31,055 | $ | 503,712 | |||||
$ | 503,712 | |||||||
Real Estate Management & Development — 0.3% | ||||||||
Brookfield Property Partners, L.P., Series A, 5.75% | 85,000 | $ | 1,407,600 | |||||
$ | 1,407,600 | |||||||
Total Preferred Securities | $ | 1,911,312 | ||||||
Senior Floating-Rate Loans — 1.9%(11) |
| |||||||
Borrower/Tranche Description | Principal Amount (000’s omitted) | Value | ||||||
Building and Development — 0.2% | ||||||||
Cushman & Wakefield U.S. Borrower, LLC, Term Loan, 2.928%, (1 mo. USD LIBOR + 2.75%), 8/21/25 | $ | 1,231 | $ | 1,165,877 | ||||
$ | 1,165,877 |
19 | See Notes to Financial Statements. |
Table of Contents
Core Bond Portfolio
June 30, 2020
Portfolio of Investments (Unaudited) — continued
Borrower/Tranche Description | Principal Amount (000’s omitted) | Value | ||||||
Drugs — 0.3% | ||||||||
Jaguar Holding Company II, Term Loan, 3.50%, (1 mo. USD LIBOR + 2.50%, Floor 1.00%), 8/18/22 | $ | 1,837 | $ | 1,809,775 | ||||
$ | 1,809,775 | |||||||
Electronics / Electrical — 0.6% | ||||||||
Epicor Software Corporation, Term Loan, 3.43%, (1 mo. USD LIBOR + 3.25%), 6/1/22 | $ | 1,077 | $ | 1,056,510 | ||||
Go Daddy Operating Company, LLC, Term Loan, 1.928%, (1 mo. USD LIBOR + 1.75%), 2/15/24 | 178 | 171,609 | ||||||
Hyland Software, Inc., Term Loan, 4.00%, (1 mo. USD LIBOR + 3.25%, Floor 0.75%), 7/1/24 | 1,017 | 989,769 | ||||||
MA FinanceCo., LLC, Term Loan, 2.678%, (1 mo. USD LIBOR + 2.50%), 6/21/24 | 78 | 73,019 | ||||||
Seattle Spinco, Inc., Term Loan, 2.678%, (1 mo. USD LIBOR + 2.50%), 6/21/24 | 526 | 493,114 | ||||||
SolarWinds Holdings, Inc., Term Loan, 2.928%, (1 mo. USD LIBOR + 2.75%), 2/5/24 | 286 | 277,181 | ||||||
$ | 3,061,202 | |||||||
Equipment Leasing — 0.1% | ||||||||
Avolon TLB Borrower 1 (US), LLC, Term Loan, 2.50%, (1 mo. USD LIBOR + 1.75%, Floor 0.75%), 1/15/25 | $ | 631 | $ | 590,418 | ||||
$ | 590,418 | |||||||
Health Care — 0.2% | ||||||||
Change Healthcare Holdings, LLC, Term Loan, 3.50%, (3 mo. USD LIBOR + 2.50%, Floor 1.00%), 3/1/24 | $ | 830 | $ | 798,917 | ||||
$ | 798,917 | |||||||
Insurance — 0.1% | ||||||||
Asurion, LLC, Term Loan, 3.178%, (1 mo. USD LIBOR + 3.00%), 11/3/23 | $ | 794 | $ | 769,896 | ||||
$ | 769,896 | |||||||
Leisure Goods / Activities / Movies — 0.1% | ||||||||
Bombardier Recreational Products, Inc., Term Loan, 2.178%, (1 mo. USD LIBOR + 2.00%), 5/24/27 | $ | 246 | $ | 235,271 | ||||
$ | 235,271 | |||||||
Lodging and Casinos — 0.0%(12) | ||||||||
ESH Hospitality, Inc., Term Loan, 2.178%, (1 mo. USD LIBOR + 2.00%), 9/18/26 | $ | 143 | $ | 136,301 | ||||
$ | 136,301 |
Borrower/Tranche Description | Principal Amount (000’s omitted) | Value | ||||||
Telecommunications — 0.3% | ||||||||
CenturyLink, Inc., Term Loan, 2.428%, (1 mo. USD LIBOR + 2.25%), 3/15/27 | $ | 498 | $ | 470,526 | ||||
Level 3 Financing, Inc., Term Loan, 1.928%, (1 mo. USD LIBOR + 1.75%), 3/1/27 | 250 | 236,517 | ||||||
Ziggo Financing Partnership, Term Loan, 2.685%, (1 mo. USD LIBOR + 2.50%), 4/30/28 | 1,000 | 947,500 | ||||||
$ | 1,654,543 | |||||||
Total Senior Floating-Rate Loans | $ | 10,222,200 | ||||||
Short-Term Investments — 2.5% |
| |||||||
Description | Units | Value | ||||||
Eaton Vance Cash Reserves Fund, LLC, 0.35%(13) | 13,505,913 | $ | 13,505,913 | |||||
Total Short-Term Investments |
| $ | 13,505,913 | |||||
Total Investments — 100.4% |
| $ | 547,246,082 | |||||
Other Assets, Less Liabilities — (0.4)% |
| $ | (2,008,783 | ) | ||||
Net Assets — 100.0% |
| $ | 545,237,299 |
The percentage shown for each investment category in the Portfolio of Investments is based on net assets.
(1) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be sold in certain transactions in reliance on an exemption from registration (normally to qualified institutional buyers). At June 30, 2020, the aggregate value of these securities is $162,963,973 or 29.9% of the Portfolio’s net assets. |
(2) | Variable rate security. The stated interest rate represents the rate in effect at June 30, 2020. |
(3) | Security converts to variable rate after the indicated fixed-rate coupon period. |
(4) | Perpetual security with no stated maturity date but may be subject to calls by the issuer. |
(5) | Variable rate security. The stated interest rate, which resets quarterly, is determined at auction and represents the rate in effect at June 30, 2020. |
(6) | When-issued security. |
(7) | TBA (To Be Announced) securities are purchased on a forward commitment basis with an approximate principal amount and maturity date. The actual principal amount and maturity date are determined upon settlement. |
(8) | Weighted average fixed-rate coupon that changes/updates monthly. Rate shown is the rate at June 30, 2020. |
20 | See Notes to Financial Statements. |
Table of Contents
Core Bond Portfolio
June 30, 2020
Portfolio of Investments (Unaudited) — continued
(9) | Step coupon security. Interest rate represents the rate in effect at June 30, 2020. |
(10) | Inflation-linked security whose principal is adjusted for inflation based on changes in the U.S. Consumer Price Index. Interest is calculated based on the inflation-adjusted principal. |
(11) | Senior floating-rate loans (Senior Loans) often require prepayments from excess cash flows or permit the borrowers to repay at their election. The degree to which borrowers repay, whether as a contractual requirement or at their election, cannot be predicted with accuracy. As a result, the actual remaining maturity may be substantially less than the stated maturities shown. However, Senior Loans will typically have an expected average life |
of approximately two to four years. Senior Loans typically have rates of interest which are redetermined periodically by reference to a base lending rate, plus a spread. These base lending rates are primarily the London Interbank Offered Rate (“LIBOR”) and secondarily, the prime rate offered by one or more major United States banks (the “Prime Rate”). Base lending rates may be subject to a floor, or minimum rate. |
(12) | Amount is less than 0.05%. |
(13) | Affiliated investment company, available to Eaton Vance portfolios and funds, which invests in high quality, U.S. dollar denominated money market instruments. The rate shown is the annualized seven-day yield as of June 30, 2020. |
Futures Contracts | ||||||||||||||||||||
Description | Number of Contracts | Position | Expiration Date | Notional Amount | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
Interest Rate Futures | ||||||||||||||||||||
U.S. 2-Year Treasury Note | 162 | Long | 9/30/20 | $ | 35,774,157 | $ | 8,167 | |||||||||||||
U.S. Ultra-Long Treasury Bond | 214 | Long | 9/21/20 | 46,685,438 | 106,673 | |||||||||||||||
U.S. Long Treasury Bond | (50 | ) | Short | 9/21/20 | (8,928,125 | ) | (23,514 | ) | ||||||||||||
U.S. Ultra 10-Year Treasury Note | (174 | ) | Short | 9/21/20 | (27,402,282 | ) | (107,253 | ) | ||||||||||||
$ | (15,927 | ) |
Abbreviations:
LIBOR | – | London Interbank Offered Rate | ||
PPTT | – | Preferred Pass-Through Trust | ||
SOFR | – | Secured Overnight Financing Rate | ||
TBA | – | To Be Announced |
Currency Abbreviations:
USD | – | United States Dollar |
21 | See Notes to Financial Statements. |
Table of Contents
Core Bond Portfolio
June 30, 2020
Statement of Assets and Liabilities (Unaudited)
Assets | June 30, 2020 | |||
Unaffiliated investments, at value (identified cost, $529,013,074) | $ | 533,740,169 | ||
Affiliated investment, at value (identified cost, $13,505,913) | 13,505,913 | |||
Cash | 32,463 | |||
Deposits for derivatives collateral — financial futures contracts | 1,822,092 | |||
Interest receivable | 3,064,712 | |||
Dividends receivable from affiliated investment | 5,112 | |||
Receivable for investments sold | 360,850 | |||
Receivable from affiliate | 10,863 | |||
Total assets | $ | 552,542,174 | ||
Liabilities | ||||
Payable for when-issued/delayed delivery/forward commitment securities | $ | 6,825,882 | ||
Payable for variation margin on open financial futures contracts | 151,238 | |||
Payable to affiliates: | ||||
Investment adviser fee | 197,993 | |||
Trustees’ fees | 7,360 | |||
Accrued expenses | 122,402 | |||
Total liabilities | $ | 7,304,875 | ||
Net Assets applicable to investors’ interest in Portfolio | $ | 545,237,299 |
22 | See Notes to Financial Statements. |
Table of Contents
Core Bond Portfolio
June 30, 2020
Statement of Operations (Unaudited)
Investment Income | Six Months Ended June 30, 2020 | |||
Interest (net of foreign taxes, $258) | $ | 8,525,157 | ||
Dividends | 59,601 | |||
Dividends from affiliated investment | 60,984 | |||
Total investment income | $ | 8,645,742 | ||
Expenses | ||||
Investment adviser fee | $ | 1,252,668 | ||
Trustees’ fees and expenses | 15,318 | |||
Custodian fee | 79,631 | |||
Legal and accounting services | 44,606 | |||
Miscellaneous | 11,644 | |||
Total expenses | $ | 1,403,867 | ||
Deduct — | ||||
Allocation of expenses to affiliate | $ | 35,319 | ||
Total expense reductions | $ | 35,319 | ||
Net expenses | $ | 1,368,548 | ||
Net investment income | $ | 7,277,194 | ||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) — | ||||
Investment transactions | $ | 7,262,418 | ||
Investment transactions — affiliated investment | 116 | |||
Financial futures contracts | 4,685,153 | |||
Net realized gain | $ | 11,947,687 | ||
Change in unrealized appreciation (depreciation) — | ||||
Investments | $ | (5,642,971 | ) | |
Investments — affiliated investment | (593 | ) | ||
Financial futures contracts | 1,519,905 | |||
Net change in unrealized appreciation (depreciation) | $ | (4,123,659 | ) | |
Net realized and unrealized gain | $ | 7,824,028 | ||
Net increase in net assets from operations | $ | 15,101,222 |
23 | See Notes to Financial Statements. |
Table of Contents
Core Bond Portfolio
June 30, 2020
Statements of Changes in Net Assets
Increase (Decrease) in Net Assets | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
From operations — | ||||||||
Net investment income | $ | 7,277,194 | $ | 15,453,942 | ||||
Net realized gain | 11,947,687 | 13,899,644 | ||||||
Net change in unrealized appreciation (depreciation) | (4,123,659 | ) | 17,032,056 | |||||
Net increase in net assets from operations | $ | 15,101,222 | $ | 46,385,642 | ||||
Capital transactions — | ||||||||
Contributions | $ | 49,607,933 | $ | 156,390,865 | ||||
Withdrawals | (109,861,644 | ) | (118,402,543 | ) | ||||
Net increase (decrease) in net assets from capital transactions | $ | (60,253,711 | ) | $ | 37,988,322 | |||
Net increase (decrease) in net assets | $ | (45,152,489 | ) | $ | 84,373,964 | |||
Net Assets | ||||||||
At beginning of period | $ | 590,389,788 | $ | 506,015,824 | ||||
At end of period | $ | 545,237,299 | $ | 590,389,788 |
24 | See Notes to Financial Statements. |
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Core Bond Portfolio
June 30, 2020
Financial Highlights
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
Ratios/Supplemental Data | 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||
Ratios (as a percentage of average daily net assets): | ||||||||||||||||||||||||
Expenses(1)(2) | 0.49 | %(3) | 0.49 | % | 0.49 | % | 0.49 | % | 0.50 | % | 0.50 | % | ||||||||||||
Net investment income | 2.61 | %(3) | 2.86 | % | 2.98 | % | 2.46 | % | 2.01 | % | 2.00 | % | ||||||||||||
Portfolio Turnover | 37 | %(4)(5) | 89 | % | 65 | % | 123 | % | 132 | %(5) | 159 | %(5) | ||||||||||||
Total Return(2) | 3.24 | %(4) | 9.28 | % | (0.50 | )% | 4.48 | % | 2.73 | % | 0.04 | % | ||||||||||||
Net assets, end of period (000’s omitted) | $ | 545,237 | $ | 590,390 | $ | 506,016 | $ | 479,364 | $ | 484,256 | $ | 342,684 |
(1) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(2) | The investment adviser reimbursed certain operating expenses (equal to 0.01%, 0.01%, 0.02%, 0.01%, 0.01% and 0.02% of average daily net assets for the six months ended June 30, 2020 and the years ended December 31, 2019, 2018, 2017, 2016 and 2015, respectively). Absent this reimbursement, total return would be lower. |
(3) | Annualized. |
(4) | Not annualized. |
(5) | Includes the effect of To Be Announced (TBA) transactions. |
25 | See Notes to Financial Statements. |
Table of Contents
Core Bond Portfolio
June 30, 2020
Notes to Financial Statements (Unaudited)
1 Significant Accounting Policies
Core Bond Portfolio (the Portfolio) is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as a diversified, open-end management investment company. The Portfolio’s investment objectives are to seek current income and total return. The Declaration of Trust permits the Trustees to issue interests in the Portfolio. At June 30, 2020, Eaton Vance Balanced Fund and Eaton Vance Core Bond Fund held an interest of 72.2% and 27.8%, respectively, in the Portfolio.
The following is a summary of significant accounting policies of the Portfolio. The policies are in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The Portfolio is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946.
A Investment Valuation — The following methodologies are used to determine the market value or fair value of investments.
Debt Obligations. Debt obligations are generally valued on the basis of valuations provided by third party pricing services, as derived from such services’ pricing models. Inputs to the models may include, but are not limited to, reported trades, executable bid and ask prices, broker/dealer quotations, prices or yields of securities with similar characteristics, interest rates, anticipated prepayments, benchmark curves or information pertaining to the issuer, as well as industry and economic events. The pricing services may use a matrix approach, which considers information regarding securities with similar characteristics to determine the valuation for a security. Short-term debt obligations purchased with a remaining maturity of sixty days or less for which a valuation from a third party pricing service is not readily available may be valued at amortized cost, which approximates fair value.
Preferred Securities. Preferred securities listed on a U.S. securities exchange generally are valued at the last sale or closing price on the day of valuation or, if no sales took place on such date, at the mean between the closing bid and ask prices on the exchange where such securities are principally traded. Preferred securities listed on the NASDAQ Global or Global Select Market generally are valued at the NASDAQ official closing price. Preferred securities that are not listed or traded in the over-the-counter market are valued by a third party pricing service that uses various techniques that consider factors including, but not limited to, prices or yields of securities with similar characteristics, benchmark yields, broker/dealer quotes, quotes of underlying common stock, issuer spreads, as well as industry and economic events.
Senior Floating-Rate Loans. Interests in senior floating-rate loans (Senior Loans) for which reliable market quotations are readily available are valued generally at the average mean of bid and ask quotations obtained from a third party pricing service.
Derivatives. Financial futures contracts are valued at the closing settlement price established by the board of trade or exchange on which they are traded.
Affiliated Fund. The Portfolio may invest in Eaton Vance Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by Eaton Vance Management (EVM). While Cash Reserves Fund is not a registered money market mutual fund, it conducts all of its investment activities in accordance with the requirements of Rule 2a-7 under the 1940 Act. Investments in Cash Reserves Fund are valued at the closing net asset value per unit on the valuation day. Cash Reserves Fund generally values its investment securities based on available market quotations provided by a third party pricing service.
Fair Valuation. Investments for which valuations or market quotations are not readily available or are deemed unreliable are valued at fair value using methods determined in good faith by or at the direction of the Trustees of the Portfolio in a manner that most fairly reflects the security’s “fair value”, which is the amount that the Portfolio might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of relevant factors, which are likely to vary from one pricing context to another. These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issuer or of comparable companies or entities, quotations or relevant information obtained from broker/dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the company’s or entity’s financial statements, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.
B Investment Transactions — Investment transactions for financial statement purposes are accounted for on a trade date basis. Realized gains and losses on investments sold are determined on the basis of identified cost.
C Income — Interest income is recorded on the basis of interest accrued, adjusted for amortization of premium or accretion of discount. Inflation adjustments to the principal amount of inflation-adjusted bonds and notes are reflected as interest income. Deflation adjustments to the principal amount of an inflation-adjusted bond or note are reflected as reductions to interest income to the extent of interest income previously recorded on such bond or note. Dividend income is recorded on the ex-dividend date for dividends received in cash and/or securities. Withholding taxes on foreign interest have been provided for in accordance with the Portfolio’s understanding of the applicable countries’ tax rules and rates.
D Federal Taxes — The Portfolio has elected to be treated as a partnership for federal tax purposes. No provision is made by the Portfolio for federal or state taxes on any taxable income of the Portfolio because each investor in the Portfolio is ultimately responsible for the payment of any taxes on its share of taxable income. Since at least one of the Portfolio’s investors is a regulated investment company that invests all or substantially all of its assets in the Portfolio, the Portfolio normally must satisfy the applicable source of income and diversification requirements (under the Internal Revenue Code) in order for its investors to satisfy them. The Portfolio will allocate, at least annually among its investors, each investor’s distributive share of the Portfolio’s net investment income, net realized capital gains and losses and any other items of income, gain, loss, deduction or credit.
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Table of Contents
Core Bond Portfolio
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
As of June 30, 2020, the Portfolio had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. The Portfolio files a U.S. federal income tax return annually after its fiscal year-end, which is subject to examination by the Internal Revenue Service for a period of three years from the date of filing.
E Unfunded Loan Commitments — The Portfolio may enter into certain loan agreements all or a portion of which may be unfunded. The Portfolio is obligated to fund these commitments at the borrower’s discretion. These commitments, if any, are disclosed in the accompanying Portfolio of Investments.
F Use of Estimates — The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.
G Indemnifications — Under the Portfolio’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Portfolio. Under Massachusetts law, if certain conditions prevail, interestholders in the Portfolio could be deemed to have personal liability for the obligations of the Portfolio. However, the Portfolio’s Declaration of Trust contains an express disclaimer of liability on the part of Portfolio interestholders. Additionally, in the normal course of business, the Portfolio enters into agreements with service providers that may contain indemnification clauses. The Portfolio’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Portfolio that have not yet occurred.
H Financial Futures Contracts — Upon entering into a financial futures contract, the Portfolio is required to deposit with the broker, either in cash or securities, an amount equal to a certain percentage of the contract amount (initial margin). Subsequent payments, known as variation margin, are made or received by the Portfolio each business day, depending on the daily fluctuations in the value of the underlying security, and are recorded as unrealized gains or losses by the Portfolio. Gains (losses) are realized upon the expiration or closing of the financial futures contracts. Should market conditions change unexpectedly, the Portfolio may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. Futures contracts have minimal counterparty risk as they are exchange traded and the clearinghouse for the exchange is substituted as the counterparty, guaranteeing counterparty performance.
I When-Issued Securities and Delayed Delivery Transactions — The Portfolio may purchase or sell securities on a delayed delivery, when-issued or forward commitment basis, including TBA (To Be Announced) securities. Payment and delivery may take place after the customary settlement period for that security. At the time the transaction is negotiated, the price of the security that will be delivered is fixed. The Portfolio maintains cash and/or security positions for these commitments such that sufficient liquid assets will be available to make payments upon settlement. Securities purchased on a delayed delivery, when-issued or forward commitment basis are marked-to-market daily and begin earning interest on settlement date. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract. A forward purchase or sale commitment may be closed by entering into an offsetting commitment or delivery of securities. The Portfolio will realize a gain or loss on investments based on the price established when the Portfolio entered into the commitment.
J Interim Financial Statements — The interim financial statements relating to June 30, 2020 and for the six months then ended have not been audited by an independent registered public accounting firm, but in the opinion of the Portfolio’s management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial statements.
2 Investment Adviser Fee and Other Transactions with Affiliates
The investment adviser fee is earned by Boston Management and Research (BMR), a subsidiary of EVM, as compensation for investment advisory services rendered to the Portfolio. Pursuant to the investment advisory agreement and subsequent fee reduction agreement between the Portfolio and BMR, the fee is computed at an annual rate of 0.45% of the Portfolio’s average daily net assets up to $1 billion and at reduced rates on average daily net assets of $1 billion or more, and is payable monthly. The fee reduction cannot be terminated or reduced without the approval of a majority vote of the Trustees of the Portfolio who are not interested persons of BMR or the Portfolio and by the vote of a majority of the holders of interest in the Portfolio. For the six months ended June 30, 2020, the Portfolio’s investment adviser fee amounted to $1,252,668 or 0.45% (annualized) of the Portfolio’s average daily net assets. Pursuant to a voluntary expense reimbursement, BMR was allocated $35,319 of the Portfolio’s operating expenses for the six months ended June 30, 2020. The Portfolio invests its cash in Cash Reserves Fund. EVM does not currently receive a fee for advisory services provided to Cash Reserves Fund.
Trustees and officers of the Portfolio who are members of EVM’s or BMR’s organizations receive remuneration for their services to the Portfolio out of the investment adviser fee. Trustees of the Portfolio who are not affiliated with the investment adviser may elect to defer receipt of all or a percentage of their annual fees in accordance with the terms of the Trustees Deferred Compensation Plan. For the six months ended June 30, 2020, no significant amounts have been deferred. Certain officers and Trustees of the Portfolio are officers of the above organizations.
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Table of Contents
Core Bond Portfolio
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
3 Purchases and Sales of Investments
Purchases and sales of investments, other than short-term obligations and including maturities and paydowns, for the six months ended June 30, 2020 were as follows:
Purchases | Sales | |||||||
Investments (non-U.S. Government) | $ | 134,045,100 | $ | 113,792,082 | ||||
U.S. Government and Agency Securities | 66,180,673 | 141,600,685 | ||||||
$ | 200,225,773 | $ | 255,392,767 |
4 Federal Income Tax Basis of Investments
The cost and unrealized appreciation (depreciation) of investments, including open derivative contracts, of the Portfolio at June 30, 2020, as determined on a federal income tax basis, were as follows:
Aggregate cost | $ | 543,138,015 | ||
Gross unrealized appreciation | $ | 18,012,270 | ||
Gross unrealized depreciation | (13,920,130 | ) | ||
Net unrealized appreciation | $ | 4,092,140 |
5 Financial Instruments
The Portfolio may trade in financial instruments with off-balance sheet risk in the normal course of its investing activities. These financial instruments may 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 the Portfolio has in particular classes of financial instruments and do not necessarily represent the amounts potentially subject to risk. The measurement of the risks associated with these instruments is meaningful only when all related and offsetting transactions are considered. A summary of obligations under these financial instruments at June 30, 2020 is included in the Portfolio of Investments. At June 30, 2020, the Portfolio had sufficient cash and/or securities to cover commitments under these contracts.
The Portfolio is subject to interest rate risk in the normal course of pursuing its investment objectives. Because the Portfolio holds fixed-rate bonds, the value of these bonds may decrease if interest rates rise. The Portfolio enters into U.S. Treasury futures contracts to hedge against fluctuations in interest rates.
The fair value of open derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) and whose primary underlying risk exposure is interest rate risk at June 30, 2020 was as follows:
Fair Value | ||||||||
Derivative | Asset Derivative(1) | Liability Derivative(1) | ||||||
Financial futures contracts | $ | 114,840 | $ | (130,767 | ) |
(1) | Only the current day’s variation margin on open futures contracts is reported within the Statement of Assets and Liabilities as Receivable or Payable for variation margin on open financial futures contracts, as applicable. |
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Table of Contents
Core Bond Portfolio
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
The effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) on the Statement of Operations and whose primary underlying risk exposure is interest rate risk for the six months ended June 30, 2020 was as follows:
Derivative | Realized Gain (Loss) on Derivatives Recognized in Income(1) | Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income(2) | ||||||
Financial futures contracts | $ | 4,685,153 | $ | 1,519,905 |
(1) | Statement of Operations location: Net realized gain (loss) – Financial futures contracts. |
(2) | Statement of Operations location: Change in unrealized appreciation (depreciation) – Financial futures contracts. |
The average notional cost of futures contracts outstanding during the six months ended June 30, 2020, which is indicative of the volume of this derivative type, was approximately as follows:
Futures Contracts — Long | Futures Contracts — Short | |||||
$90,504,000 | $ | 24,003,000 |
6 Line of Credit
The Portfolio participates with other portfolios and funds managed by EVM and its affiliates in an $800 million unsecured line of credit agreement with a group of banks, which is in effect through October 27, 2020. Borrowings are made by the Portfolio solely for temporary purposes related to redemptions and other short-term cash needs. Interest is charged to the Portfolio based on its borrowings at an amount above either the Eurodollar rate or Federal Funds rate. In addition, a fee computed at an annual rate of 0.15% on the daily unused portion of the line of credit is allocated among the participating portfolios and funds at the end of each quarter. Because the line of credit is not available exclusively to the Portfolio, it may be unable to borrow some or all of its requested amounts at any particular time. The Portfolio did not have any significant borrowings or allocated fees during the six months ended June 30, 2020.
7 Investments in Affiliated Funds
At June 30, 2020, the value of the Portfolio’s investment in affiliated funds was $13,505,913, which represents 2.5% of the Portfolio’s net assets. Transactions in affiliated funds by the Portfolio for the six months ended June 30, 2020 were as follows:
Name of affiliated fund | Value, beginning of period | Purchases | Sales proceeds | Net realized gain (loss) | Change in unrealized appreciation (depreciation) | Value, end of period | Dividend income | Units, end of period | ||||||||||||||||||||||||
Short-Term Investments | �� | |||||||||||||||||||||||||||||||
Eaton Vance Cash Reserves Fund, LLC | $ | 22,272,569 | $ | 154,895,063 | $ | (163,661,242 | ) | $ | 116 | $ | (593 | ) | $ | 13,505,913 | $ | 60,984 | 13,505,913 |
8 Fair Value Measurements
Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
• | Level 1 – quoted prices in active markets for identical investments |
• | Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
• | Level 3 – significant unobservable inputs (including a fund’s own assumptions in determining the fair value of investments) |
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Table of Contents
Core Bond Portfolio
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
In cases where the inputs used to measure fair value fall in different levels of the fair value hierarchy, the level disclosed is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
At June 30, 2020, the hierarchy of inputs used in valuing the Portfolio’s investments and open derivative instruments, which are carried at value, were as follows:
Asset Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Corporate Bonds & Notes | $ | — | $ | 238,797,599 | $ | — | $ | 238,797,599 | ||||||||
Agency Mortgage-Backed Securities | — | 49,996,876 | — | 49,996,876 | ||||||||||||
Collateralized Mortgage Obligations | — | 44,163,392 | — | 44,163,392 | ||||||||||||
Commercial Mortgage-Backed Securities | — | 45,960,978 | — | 45,960,978 | ||||||||||||
Asset-Backed Securities | — | 82,013,966 | — | 82,013,966 | ||||||||||||
U.S. Treasury Obligations | — | 49,243,322 | — | 49,243,322 | ||||||||||||
Taxable Municipal Securities | — | 11,430,524 | — | 11,430,524 | ||||||||||||
Preferred Securities | 1,911,312 | — | — | 1,911,312 | ||||||||||||
Senior Floating-Rate Loans | — | 10,222,200 | — | 10,222,200 | ||||||||||||
Short-Term Investments | — | 13,505,913 | — | 13,505,913 | ||||||||||||
Total Investments | $ | 1,911,312 | $ | 545,334,770 | $ | — | $ | 547,246,082 | ||||||||
Futures Contracts | $ | 114,840 | $ | — | $ | — | $ | 114,840 | ||||||||
Total | $ | 2,026,152 | $ | 545,334,770 | $ | — | $ | 547,360,922 | ||||||||
Liability Description | ||||||||||||||||
Futures Contracts | $ | (130,767 | ) | $ | — | $ | — | $ | (130,767 | ) | ||||||
Total | $ | (130,767 | ) | $ | — | $ | — | $ | (130,767 | ) |
9 Risks and Uncertainties
Pandemic Risk
An outbreak of respiratory disease caused by a novel coronavirus that was first detected in China in December 2019 has spread rapidly internationally. This coronavirus has resulted in closing borders, enhanced health screenings, changes to healthcare service preparation and delivery, quarantines, cancellations, disruptions to supply chains and customer activity, as well as general concern and uncertainty. The impact of this outbreak has negatively affected the worldwide economy, as well as the economies of individual countries and individual companies and can affect the market in general in significant and unforeseen ways. Health crises caused by outbreaks, such as the coronavirus outbreak, may exacerbate other pre-existing political, social and economic risks and disrupt normal market conditions and operations. The near-term impact of this coronavirus has resulted in substantial market volatility, which may have an adverse effect on the Portfolio’s investments.
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Table of Contents
Eaton Vance
Core Bond Fund
June 30, 2020
Board of Trustees’ Contract Approval
Overview of the Contract Review Process
The Investment Company Act of 1940, as amended (the “1940 Act”), provides, in substance, that the investment advisory agreement between a fund and its investment adviser will continue in effect from year-to-year only if its continuation is approved on an annual basis by a vote of the fund’s board of trustees, including a majority of the trustees who are not “interested persons” of the fund (“independent trustees”), cast in person at a meeting called for the purpose of considering such approval.
At a meeting held on April 22, 2020 (the “April 2020 Meeting”), the Boards of Trustees/Directors comprised of the same individuals (collectively, the “Board”) that oversees a majority of the registered investment companies advised by Eaton Vance Management or its affiliate, Boston Management and Research (the “Eaton Vance Funds”), including a majority of the independent trustees (the “Independent Trustees”), voted to approve the continuation of existing investment advisory agreements and sub-advisory agreements(1) for each of the Eaton Vance Funds for an additional one-year period. The Board relied upon the affirmative recommendation of its Contract Review Committee, which is a committee exclusively comprised of Independent Trustees. Prior to making its recommendation, the Contract Review Committee reviewed information furnished by the adviser and sub-adviser to each of the Eaton Vance Funds (including information specifically requested by the Board) for a series of formal meetings held between February and April 2020. Members of the Contract Review Committee also considered information received at prior meetings of the Board and its committees, to the extent such information was relevant to the Contract Review Committee’s annual evaluation of the investment advisory agreements and sub-advisory agreements.
In connection with its evaluation of the investment advisory agreements and sub-advisory agreements, the Board considered various information relating to the Eaton Vance Funds. This included information applicable to all or groups of Eaton Vance Funds, which is referenced immediately below, and information applicable to the particular Eaton Vance Fund covered by this report (additional fund-specific information is referenced below under “Results of the Contract Review Process”). (For funds that invest through one or more underlying portfolios, references to “each fund” in this section may include information that was considered at the portfolio-level.)
Information about Fees, Performance and Expenses
• | A report from an independent data provider comparing advisory and other fees paid by each fund to such fees paid by comparable funds, as identified by the independent data provider (“comparable funds”); |
• | A report from an independent data provider comparing each fund’s total expense ratio (and its components) to those of comparable funds; |
• | A report from an independent data provider comparing the investment performance of each fund (including, as relevant, total return data, income data, Sharpe ratios and information ratios) to the investment performance of comparable funds and, as applicable, benchmark indices, over various time periods; |
• | In certain instances, data regarding investment performance relative to customized groups of peer funds and blended indices identified by the adviser in consultation with the Portfolio Management Committee of the Board; |
• | Comparative information concerning the fees charged and services provided by the adviser and sub-adviser to each fund in managing other accounts (which may include other mutual funds, collective investment funds and institutional accounts) using investment strategies and techniques similar to those used in managing such fund(s), if any; |
• | Profitability analyses with respect to the adviser and sub-adviser to each of the funds; |
Information about Portfolio Management and Trading
• | Descriptions of the investment management services provided to each fund, as well as each of the funds’ investment strategies and policies; |
• | The procedures and processes used to determine the fair value of fund assets, when necessary, and actions taken to monitor and test the effectiveness of such procedures and processes; |
• | Information about the policies and practices of each fund’s adviser and sub-adviser (in the context of a sub-adviser, only those with trading responsibilities) with respect to trading, including their processes for seeking best execution of portfolio transactions; |
• | Information about the allocation of brokerage transactions and the benefits, if any, received by the adviser and sub-adviser (in the context of a sub-adviser, only those with trading responsibilities) to each fund as a result of brokerage allocation, including, as applicable, information concerning the acquisition of research through client commission arrangements and policies with respect to “soft dollars”; |
• | Data relating to the portfolio turnover rate of each fund; |
Information about each Adviser and Sub-adviser
• | Reports detailing the financial results and condition of the adviser and sub-adviser to each fund; |
• | Information regarding the individual investment professionals whose responsibilities include portfolio management and investment research for the funds, and, for portfolio managers and certain other investment professionals, information relating to their responsibilities with respect to managing other mutual funds and investment accounts, as applicable; |
(1) | Not all Eaton Vance Funds have entered into a sub-advisory agreement with a sub-adviser. Accordingly, references to “sub-adviser” or “sub-advisory agreement” in this “Overview” section may not be applicable to the particular Eaton Vance Fund covered by this report. |
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Eaton Vance
Core Bond Fund
June 30, 2020
Board of Trustees’ Contract Approval — continued
• | The Code of Ethics of the adviser and its affiliates and the sub-adviser of each fund, together with information relating to compliance with, and the administration of, such codes; |
• | Policies and procedures relating to proxy voting and the handling of corporate actions and class actions; |
• | Information concerning the resources devoted to compliance efforts undertaken by the adviser and its affiliates and the sub-adviser of each fund, if any, including descriptions of their various compliance programs and their record of compliance; |
• | Information concerning the business continuity and disaster recovery plans of the adviser and its affiliates and the sub-adviser of each fund, if any; |
• | A description of Eaton Vance Management’s and Boston Management and Research’s oversight of sub-advisers, including with respect to regulatory and compliance issues, investment management and other matters; |
Other Relevant Information
• | Information concerning the nature, cost and character of the administrative and other non-investment advisory services provided by Eaton Vance Management and its affiliates; |
• | Information concerning oversight of the relationship with the custodian, subcustodians and fund accountants by the adviser and/or administrator to each of the funds; |
• | For an Eaton Vance Fund structured as an exchange-listed closed-end fund, information concerning the benefits of the closed-end fund structure, as well as, where relevant, the closed-end fund’s market prices, trading volume data, distribution rates and other relevant matters; and |
• | The terms of each investment advisory agreement and sub-advisory agreement. |
During the various meetings of the Board and its committees throughout the twelve months ended April 2020, the Trustees received information from portfolio managers and other investment professionals of the advisers and sub-advisers of the funds regarding investment and performance matters, and considered various investment and trading strategies used in pursuing the funds’ investment objectives. The Trustees also received information regarding risk management techniques employed in connection with the management of the funds. The Board and its committees evaluated issues pertaining to industry and regulatory developments, compliance procedures, fund governance and other issues with respect to the funds, and received and participated in reports and presentations provided by Eaton Vance Management, Boston Management and Research and fund sub-advisers, with respect to such matters. In addition to the formal meetings of the Board and its committees, the Independent Trustees held regular teleconferences to discuss, among other topics, matters relating to the continuation of investment advisory agreements and sub-advisory agreements.
The Contract Review Committee was advised throughout the contract review process by Goodwin Procter LLP, independent legal counsel for the Independent Trustees. The members of the Contract Review Committee, with the advice of such counsel, exercised their own business judgment in determining the material factors to be considered in evaluating each investment advisory agreement and sub-advisory agreement and the weight to be given to each such factor. The conclusions reached with respect to each investment advisory agreement and sub-advisory agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each member of the Contract Review Committee may have placed varying emphasis on particular factors in reaching conclusions with respect to each investment advisory agreement and sub-advisory agreement. In evaluating each investment advisory agreement and sub-advisory agreement, including the fee structures and other terms contained in such agreements, the members of the Contract Review Committee were also informed by multiple years of analysis and discussion with the adviser and sub-adviser to each of the Eaton Vance Funds.
In voting its approval of the continuation of existing investment advisory agreements and sub-advisory agreements at the April 2020 Meeting, the Board relied on an order issued by the Securities and Exchange Commission on March 25, 2020, which provided temporary relief from the in-person voting requirements under Section 15 of the 1940 Act in response to the impacts of the COVID-19 pandemic.
Results of the Contract Review Process
Based on its consideration of the foregoing, and such other information it deemed relevant, including the factors and conclusions described below, the Contract Review Committee concluded that the continuation of the investment advisory agreement between Core Bond Portfolio (the “Portfolio”), the portfolio in which Eaton Vance Core Bond Fund (the “Fund”) invests, and Boston Management and Research (the “Adviser”), including its fee structure, is in the interests of shareholders and, therefore, recommended to the Board approval of the agreement. Based on the recommendation of the Contract Review Committee, the Board, including a majority of the Independent Trustees, voted to approve continuation of the investment advisory agreement for the Portfolio.
Nature, Extent and Quality of Services
In considering whether to approve the investment advisory agreement for the Portfolio, the Board evaluated the nature, extent and quality of services provided to the Portfolio by the Adviser.
The Board considered the Adviser’s management capabilities and investment processes in light of the types of investments held by the Portfolio, including the education, experience and number of investment professionals and other personnel who provide portfolio management, investment research, and similar services to the Portfolio. The Board noted the abilities and experience of the Adviser’s investment professionals in analyzing factors relevant to investing in investment grade fixed income securities. The Board also took into account the resources dedicated to portfolio management and other
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Eaton Vance
Core Bond Fund
June 30, 2020
Board of Trustees’ Contract Approval — continued
services, the compensation methods of the Adviser and other factors, including the reputation and resources of the Adviser to recruit and retain highly qualified research, advisory and supervisory investment professionals. In addition, the Board considered the time and attention devoted to the Eaton Vance Funds, including the Portfolio, by senior management, as well as the infrastructure, operational capabilities and support staff in place to assist in the portfolio management and operations of the Portfolio, including the provision of administrative services. The Board also considered the business-related and other risks to which the Adviser or its affiliates may be subject in managing the Portfolio.
The Board considered the compliance programs of the Adviser and relevant affiliates thereof. The Board considered compliance and reporting matters regarding, among other things, personal trading by investment professionals, disclosure of portfolio holdings, late trading, frequent trading, portfolio valuation, business continuity and the allocation of investment opportunities. The Board also considered the responses of the Adviser and its affiliates to requests in recent years from regulatory authorities, such as the Securities and Exchange Commission and the Financial Industry Regulatory Authority.
The Board considered other administrative services provided or overseen by Eaton Vance Management and its affiliates, including transfer agency and accounting services. The Board evaluated the benefits to shareholders of investing in a fund that is a part of a large fund complex offering exposure to a variety of asset classes and investment disciplines, as well as the ability, in many cases, to exchange an investment among different funds without incurring additional sales charges.
After consideration of the foregoing factors, among others, the Board concluded that the nature, extent and quality of services provided by the Adviser, taken as a whole, are appropriate and consistent with the terms of the investment advisory agreement.
Fund Performance
The Board compared the Fund’s investment performance to that of comparable funds identified by an independent data provider (the peer group), as well as an appropriate benchmark index and a custom peer group of similarly managed funds. The Board’s review included comparative performance data with respect to the Fund for the one-, three-, five- and ten-year periods ended September 30, 2019. In this regard, the Board noted that the performance of the Fund was higher than the median performance of the Fund’s custom peer group and lower than the median performance of the Fund’s peer group for the three-year period. The Board also noted that the performance of the Fund was equal to its benchmark index for the three-year period. The Board concluded that the performance of the Fund was satisfactory.
Management Fees and Expenses
The Board considered contractual fee rates payable by the Portfolio and by the Fund for advisory and administrative services (referred to collectively as “management fees”). As part of its review, the Board considered the Fund’s management fees and total expense ratio for the one-year period ended September 30, 2019, as compared to those of comparable funds, before and after giving effect to any undertaking to waive fees or reimburse expenses. The Board also considered factors that had an impact on the Fund’s total expense ratio relative to comparable funds.
After considering the foregoing information, and in light of the nature, extent and quality of the services provided by the Adviser, the Board concluded that the management fees charged for advisory and related services are reasonable.
Profitability and “Fall-Out” Benefits
The Board considered the level of profits realized by the Adviser and relevant affiliates thereof in providing investment advisory and administrative services to the Fund, to the Portfolio and to all Eaton Vance Funds as a group. The Board considered the level of profits realized without regard to marketing support or other payments by the Adviser and its affiliates to third parties in respect of distribution or other services.
The Board concluded that, in light of the foregoing factors and the nature, extent and quality of the services rendered, the profits realized by the Adviser and its affiliates are deemed not to be excessive.
The Board also considered direct or indirect fall-out benefits received by the Adviser and its affiliates in connection with their respective relationships with the Fund and the Portfolio, including the benefits of research services that may be available to the Adviser as a result of securities transactions effected for the Portfolio and other investment advisory clients.
Economies of Scale
In reviewing management fees and profitability, the Board also considered the extent to which the Adviser and its affiliates, on the one hand, and the Fund and the Portfolio, on the other hand, can expect to realize benefits from economies of scale as the assets of the Fund and the Portfolio increase. The Board acknowledged the difficulty in accurately measuring the benefits resulting from economies of scale, if any, with respect to the management of any specific fund or group of funds. The Board reviewed data summarizing the increases and decreases in the assets of the Fund and of all Eaton Vance Funds as a group over various time periods, and evaluated the extent to which the total expense ratio of the Fund and the profitability of the Adviser and its affiliates may have been affected by such increases or decreases. Based upon the foregoing, the Board concluded that the Fund currently shares in the benefits from economies of scale, if any, when they are realized by the Adviser. The Board also concluded that the structure of the advisory fee, which includes breakpoints at several asset levels, will allow the Fund and the Portfolio to continue to benefit from any economies of scale in the future.
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Eaton Vance
Core Bond Fund
June 30, 2020
Liquidity Risk Management Program
The Fund has implemented a written liquidity risk management program (Program) and related procedures to manage its liquidity in accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (Liquidity Rule). The Liquidity Rule defines “liquidity risk” as the risk that a fund could not meet requests to redeem shares issued by the fund without significant dilution of the remaining investors’ interests in the fund. The Fund’s Board of Trustees/Directors has designated the investment adviser to serve as the administrator of the Program and the related procedures. The administrator has established a Liquidity Risk Management Oversight Committee (Committee) to perform the functions necessary to administer the Program. As part of the Program, the administrator is responsible for identifying illiquid investments and categorizing the relative liquidity of the Fund’s investments in accordance with the Liquidity Rule. Under the Program, the administrator assesses, manages, and periodically reviews the Fund’s liquidity risk, and is responsible for making certain reports to the Fund’s Board of Trustees/Directors and the Securities and Exchange Commission (SEC) regarding the liquidity of the Fund’s investments, and to notify the Board of Trustees/Directors and the SEC of certain liquidity events specified in the Liquidity Rule. The liquidity of the Fund’s portfolio investments is determined based on a number of factors including, but not limited to, relevant market, trading and investment-specific considerations under the Program.
At a meeting of the Fund’s Board of Trustees/Directors, the Committee provided a written report to the Fund’s Board of Trustees/Directors pertaining to the operation, adequacy, and effectiveness of implementation of the Program, as well as the operation of the highly liquid investment minimum (if applicable) for the period December 1, 2018 through December 31, 2019 (Review Period). The Program operated effectively during the Review Period, supporting the administrator’s ability to assess, manage and monitor Fund liquidity risk, including during periods of market volatility and net redemptions. During the Review Period, the Fund met redemption requests on a timely basis.
There can be no assurance that the Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
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Eaton Vance
Core Bond Fund
June 30, 2020
Officers of Eaton Vance Core Bond Fund and Core Bond Portfolio
Payson F. Swaffield
President
Maureen A. Gemma
Vice President, Secretary and Chief Legal Officer
James F. Kirchner
Treasurer
Richard F. Froio
Chief Compliance Officer
Trustees of Eaton Vance Core Bond Fund and Core Bond Portfolio
William H. Park
Chairperson
Thomas E. Faust Jr.*
Mark R. Fetting
Cynthia E. Frost
George J. Gorman
Valerie A. Mosley
Helen Frame Peters
Keith Quinton
Marcus L. Smith
Susan J. Sutherland
Scott E. Wennerholm
* | Interested Trustee |
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Eaton Vance Funds
Privacy. The Eaton Vance organization is committed to ensuring your financial privacy. Each entity listed below has adopted a privacy policy and procedures (“Privacy Program”) Eaton Vance believes is reasonably designed to protect your personal information and to govern when and with whom Eaton Vance may share your personal information.
• | At the time of opening an account, Eaton Vance generally requires you to provide us with certain information such as name, address, social security number, tax status, account numbers, and account balances. This information is necessary for us to both open an account for you and to allow us to satisfy legal requirements such as applicable anti-money laundering reviews and know-your-customer requirements. |
• | On an ongoing basis, in the normal course of servicing your account, Eaton Vance may share your information with unaffiliated third parties that perform various services for Eaton Vance and/or your account. These third parties include transfer agents, custodians, broker/dealers and our professional advisers, including auditors, accountants, and legal counsel. Eaton Vance may additionally share your personal information with our affiliates. |
• | We believe our Privacy Program is reasonably designed to protect the confidentiality of your personal information and to prevent unauthorized access to that information. |
• | We reserve the right to change our Privacy Program at any time upon proper notification to you. You may want to review our Privacy Program periodically for changes by accessing the link on our homepage: www.eatonvance.com. |
Our pledge of protecting your personal information applies to the following entities within the Eaton Vance organization: the Eaton Vance Family of Funds, Eaton Vance Management, Eaton Vance Investment Counsel, Eaton Vance Distributors, Inc., Eaton Vance Trust Company, Eaton Vance Management (International) Limited, Eaton Vance Advisers International Limited, Eaton Vance Global Advisors Limited, Eaton Vance Management’s Real Estate Investment Group, Boston Management and Research, Calvert Research and Management, and Calvert Funds. This Privacy Notice supersedes all previously issued privacy disclosures. For more information about our Privacy Program or about how your personal information may be used, please call 1-800-262-1122.
Delivery of Shareholder Documents. The Securities and Exchange Commission (SEC) permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called “householding” and it helps eliminate duplicate mailings to shareholders. Eaton Vance, or your financial intermediary, may household the mailing of your documents indefinitely unless you instruct Eaton Vance, or your financial intermediary, 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 intermediary. Your instructions that householding not apply to delivery of your Eaton Vance documents will typically be effective within 30 days of receipt by Eaton Vance or your financial intermediary.
Portfolio Holdings. Each Eaton Vance Fund and its underlying Portfolio(s) (if applicable) files a schedule of portfolio holdings on Part F to Form N-PORT with the SEC. Certain information filed on Form N-PORT may be viewed on the Eaton Vance website at www.eatonvance.com, by calling Eaton Vance at 1-800-262-1122 or in the EDGAR database on the SEC’s website at www.sec.gov.
Proxy Voting. From time to time, funds are required to vote proxies related to the securities held by the funds. The Eaton Vance Funds or their underlying Portfolios (if applicable) vote proxies according to a set of policies and procedures approved by the Funds’ and Portfolios’ Boards. You may obtain a description of these policies and procedures and information on how the Funds or Portfolios voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge, upon request, by calling 1-800-262-1122 and by accessing the SEC’s website at www.sec.gov.
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Investment Adviser of Core Bond Portfolio
Boston Management and Research
Two International Place
Boston, MA 02110
Administrator of Eaton Vance Core Bond Fund
Eaton Vance Management
Two International Place
Boston, MA 02110
Principal Underwriter*
Eaton Vance Distributors, Inc.
Two International Place
Boston, MA 02110
(617) 482-8260
Custodian
State Street Bank and Trust Company
State Street Financial Center, One Lincoln Street
Boston, MA 02111
Transfer Agent
BNY Mellon Investment Servicing (US) Inc.
Attn: Eaton Vance Funds
P.O. Box 9653
Providence, RI 02940-9653
(800) 262-1122
Fund Offices
Two International Place
Boston, MA 02110
* | FINRA BrokerCheck. Investors may check the background of their Investment Professional by contacting the Financial Industry Regulatory Authority (FINRA). FINRA BrokerCheck is a free tool to help investors check the professional background of current and former FINRA-registered securities firms and brokers. FINRA BrokerCheck is available by calling 1-800-289-9999 and at www.FINRA.org. The FINRA BrokerCheck brochure describing this program is available to investors at www.FINRA.org. |
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7754 6.30.20
Table of Contents
Eaton Vance
Dividend Builder Fund
Semiannual Report
June 30, 2020
Important Note. Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semi-annual shareholder reports will no longer be sent by mail unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (eatonvance.com/funddocuments), and you will be notified by mail each time a report is posted and provided with a website address to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you are a direct investor, you may elect to receive shareholder reports and other communications from the Fund electronically by signing up for e-Delivery at eatonvance.com/edelivery. If you own your shares through a financial intermediary (such as a broker-dealer or bank), you must contact your financial intermediary to sign up.
You may elect to receive all future Fund shareholder reports in paper free of charge. If you are a direct investor, you can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by calling 1-800-262-1122. If you own these shares through a financial intermediary, you must contact your financial intermediary or follow instructions included with this disclosure, if applicable, to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all Eaton Vance funds held directly or to all funds held through your financial intermediary, as applicable.
Table of Contents
Commodity Futures Trading Commission Registration. Effective December 31, 2012, the Commodity Futures Trading Commission (“CFTC”) adopted certain regulatory changes that subject registered investment companies and advisers to regulation by the CFTC if a fund invests more than a prescribed level of its assets in certain CFTC-regulated instruments (including futures, certain options and swap agreements) or markets itself as providing investment exposure to such instruments. The investment adviser has claimed an exclusion from the definition of “commodity pool operator” under the Commodity Exchange Act with respect to its management of the Fund. Accordingly, neither the Fund nor the adviser with respect to the operation of the Fund is subject to CFTC regulation. Because of its management of other strategies, the Fund’s adviser is registered with the CFTC as a commodity pool operator. The adviser is also registered as a commodity trading advisor.
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.
This report must be preceded or accompanied by a current summary prospectus or prospectus. Before investing, investors should consider carefully the investment objective, risks, and charges and expenses of a mutual fund. This and other important information is contained in the summary prospectus and prospectus, which can be obtained from a financial intermediary. Prospective investors should read the prospectus carefully before investing. For further information, please call 1-800-262-1122.
Table of Contents
Semiannual Report June 30, 2020
Eaton Vance
Dividend Builder Fund
Table of Contents
Performance | 2 | |||
Fund Profile | 2 | |||
Endnotes and Additional Disclosures | 3 | |||
Fund Expenses | 4 | |||
Financial Statements | 5 | |||
Board of Trustees’ Contract Approval | 20 | |||
Liquidity Risk Management Program | 23 | |||
Officers and Trustees | 24 | |||
Important Notices | 25 |
Table of Contents
Eaton Vance
Dividend Builder Fund
June 30, 2020
Performance1,2
Portfolio Manager Charles B. Gaffney
% Average Annual Total Returns | Class Inception Date | Performance Inception Date | Six Months | One Year | Five Years | Ten Years | ||||||||||||||||||
Class A at NAV | 12/18/1981 | 12/18/1981 | –5.69 | % | 5.21 | % | 8.52 | % | 11.69 | % | ||||||||||||||
Class A with 5.75% Maximum Sales Charge | — | — | –11.10 | –0.85 | 7.25 | 11.03 | ||||||||||||||||||
Class C at NAV | 11/01/1993 | 12/18/1981 | –6.07 | 4.38 | 7.70 | 10.85 | ||||||||||||||||||
Class C with 1% Maximum Sales Charge | — | — | –7.01 | 3.38 | 7.70 | 10.85 | ||||||||||||||||||
Class I at NAV | 06/20/2005 | 12/18/1981 | –5.58 | 5.47 | 8.79 | 11.97 | ||||||||||||||||||
S&P 500® Index | — | — | –3.08 | % | 7.51 | % | 10.72 | % | 13.98 | % | ||||||||||||||
% Total Annual Operating Expense Ratios3 | Class A | Class C | Class I | |||||||||||||||||||||
1.01 | % | 1.77 | % | 0.76 | % |
Fund Profile
Sector Allocation (% of net assets)4
Top 10 Holdings (% of net assets)4
Microsoft Corp. | 8.2 | % | ||
Apple, Inc. | 6.0 | |||
Amazon.com, Inc. | 3.3 | |||
Visa, Inc., Class A | 3.1 | |||
Home Depot, Inc. (The) | 3.0 | |||
AbbVie, Inc. | 2.8 | |||
PepsiCo, Inc. | 2.7 | |||
Johnson & Johnson | 2.7 | |||
UnitedHealth Group, Inc. | 2.5 | |||
Medtronic PLC | 2.4 | |||
Total | 36.7 | % |
See Endnotes and Additional Disclosures in this report.
Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or offering price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance for periods less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to eatonvance.com.
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Eaton Vance
Dividend Builder Fund
June 30, 2020
Endnotes and Additional Disclosures
1 | S&P 500® Index is an unmanaged index of large-cap stocks commonly used as a measure of U.S. stock market performance. S&P Dow Jones Indices are a product of S&P Dow Jones Indices LLC (“S&P DJI”) and have been licensed for use. S&P® and S&P 500® are registered trademarks of S&P DJI; Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); S&P DJI, Dow Jones and their respective affiliates do not sponsor, endorse, sell or promote the Fund, will not have any liability with respect thereto and do not have any liability for any errors, omissions, or interruptions of the S&P Dow Jones Indices. Unless otherwise stated, index returns do not reflect the effect of any applicable sales charges, commissions, expenses, taxes or leverage, as applicable. It is not possible to invest directly in an index. |
2 | Total Returns at NAV do not include applicable sales charges. If sales charges were deducted, the returns would be lower. Total Returns shown with maximum sales charge reflect the stated maximum sales charge. Unless otherwise stated, performance does not reflect the deduction of taxes on Fund distributions or redemptions of Fund shares. |
3 | Source: Fund prospectus. The expense ratios for the current reporting period can be found in the Financial Highlights section of this report. |
4 | Excludes cash and cash equivalents. |
Fund profile subject to change due to active management. |
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Eaton Vance
Dividend Builder Fund
June 30, 2020
Fund Expenses
Example: As a Fund shareholder, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases and redemption fees (if applicable); and (2) ongoing costs, including management fees; distribution and/or service fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of Fund investing and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2020 – June 30, 2020).
Actual Expenses: The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes: The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the actual Fund expense ratio and an assumed rate of return of 5% per year (before expenses), which is not the actual Fund return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption fees (if applicable). Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would be higher.
Beginning Account Value (1/1/20) | Ending Account Value (6/30/20) | Expenses Paid During Period* (1/1/20 – 6/30/20) | Annualized Expense Ratio | |||||||||||||
Actual | ||||||||||||||||
Class A | $ | 1,000.00 | $ | 943.10 | $ | 4.93 | 1.02 | % | ||||||||
Class C | $ | 1,000.00 | $ | 939.30 | $ | 8.58 | 1.78 | % | ||||||||
Class I | $ | 1,000.00 | $ | 944.20 | $ | 3.77 | 0.78 | % | ||||||||
Hypothetical | ||||||||||||||||
(5% return per year before expenses) | ||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,019.80 | $ | 5.12 | 1.02 | % | ||||||||
Class C | $ | 1,000.00 | $ | 1,016.00 | $ | 8.92 | 1.78 | % | ||||||||
Class I | $ | 1,000.00 | $ | 1,021.00 | $ | 3.92 | 0.78 | % |
* | Expenses are equal to the Fund’s annualized expense ratio for the indicated Class, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). The Example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on December 31, 2019. |
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Eaton Vance
Dividend Builder Fund
June 30, 2020
Portfolio of Investments (Unaudited)
Common Stocks — 99.3% |
| |||||||
Security | Shares | Value | ||||||
Aerospace & Defense — 3.1% | ||||||||
L3Harris Technologies, Inc. | 71,100 | $ | 12,063,537 | |||||
Lockheed Martin Corp. | 38,000 | 13,866,960 | ||||||
$ | 25,930,497 | |||||||
Banks — 4.2% | ||||||||
JPMorgan Chase & Co. | 147,900 | $ | 13,911,474 | |||||
PNC Financial Services Group, Inc. (The)(1) | 107,900 | 11,352,159 | ||||||
Truist Financial Corp. | 264,200 | 9,920,710 | ||||||
$ | 35,184,343 | |||||||
Beverages — 4.6% | ||||||||
Coca-Cola Co. (The) | 358,400 | $ | 16,013,312 | |||||
PepsiCo, Inc. | 173,100 | 22,894,206 | ||||||
$ | 38,907,518 | |||||||
Biotechnology — 2.8% | ||||||||
AbbVie, Inc. | 237,800 | $ | 23,347,204 | |||||
$ | 23,347,204 | |||||||
Capital Markets — 2.1% | ||||||||
Intercontinental Exchange, Inc. | 67,800 | $ | 6,210,480 | |||||
S&P Global, Inc. | 21,300 | 7,017,924 | ||||||
Tradeweb Markets, Inc., Class A | 69,527 | 4,042,300 | ||||||
$ | 17,270,704 | |||||||
Chemicals — 1.0% | ||||||||
Air Products and Chemicals, Inc. | 35,300 | $ | 8,523,538 | |||||
$ | 8,523,538 | |||||||
Communications Equipment — 2.0% | ||||||||
Cisco Systems, Inc. | 354,600 | $ | 16,538,544 | |||||
$ | 16,538,544 | |||||||
Containers & Packaging — 1.2% | ||||||||
Packaging Corp. of America | 99,500 | $ | 9,930,100 | |||||
$ | 9,930,100 | |||||||
Diversified Telecommunication Services — 2.8% | ||||||||
AT&T, Inc. | 274,000 | $ | 8,283,020 | |||||
Verizon Communications, Inc. | 281,880 | 15,540,044 | ||||||
$ | 23,823,064 |
Security | Shares | Value | ||||||
Electric Utilities — 2.0% | ||||||||
Duke Energy Corp. | 213,600 | $ | 17,064,504 | |||||
$ | 17,064,504 | |||||||
Electrical Equipment — 1.0% | ||||||||
Emerson Electric Co. | 138,700 | $ | 8,603,561 | |||||
$ | 8,603,561 | |||||||
Equity Real Estate Investment Trusts (REITs) — 1.0% | ||||||||
Mid-America Apartment Communities, Inc. | 75,600 | $ | 8,669,052 | |||||
$ | 8,669,052 | |||||||
Food & Staples Retailing — 1.0% | ||||||||
Costco Wholesale Corp. | 28,400 | $ | 8,611,164 | |||||
$ | 8,611,164 | |||||||
Food Products — 1.0% | ||||||||
Nestle S.A. | 78,300 | $ | 8,681,170 | |||||
$ | 8,681,170 | |||||||
Health Care Equipment & Supplies — 4.3% | ||||||||
Danaher Corp. | 94,100 | $ | 16,639,703 | |||||
Medtronic PLC | 216,700 | 19,871,390 | ||||||
$ | 36,511,093 | |||||||
Health Care Providers & Services — 2.5% | ||||||||
UnitedHealth Group, Inc. | 72,200 | $ | 21,295,390 | |||||
$ | 21,295,390 | |||||||
Hotels, Restaurants & Leisure — 2.9% | ||||||||
McDonald’s Corp. | 69,700 | $ | 12,857,559 | |||||
Starbucks Corp. | 151,900 | 11,178,321 | ||||||
$ | 24,035,880 | |||||||
Industrial Conglomerates — 1.6% | ||||||||
Honeywell International, Inc. | 90,500 | $ | 13,085,395 | |||||
$ | 13,085,395 | |||||||
Insurance — 4.0% | ||||||||
Chubb, Ltd. | 128,900 | $ | 16,321,318 | |||||
First American Financial Corp. | 161,800 | 7,769,636 | ||||||
Travelers Cos., Inc. (The) | 82,900 | 9,454,745 | ||||||
$ | 33,545,699 |
5 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Dividend Builder Fund
June 30, 2020
Portfolio of Investments (Unaudited) — continued
Security | Shares | Value | ||||||
Interactive Media & Services — 4.6% | ||||||||
Alphabet, Inc., Class A(1) | 9,900 | $ | 14,038,695 | |||||
Alphabet, Inc., Class C(1) | 7,514 | 10,621,866 | ||||||
Facebook, Inc., Class A(1) | 60,700 | 13,783,149 | ||||||
$ | 38,443,710 | |||||||
Internet & Direct Marketing Retail — 3.3% | ||||||||
Amazon.com, Inc.(1) | 10,100 | $ | 27,864,082 | |||||
$ | 27,864,082 | |||||||
IT Services — 8.0% | ||||||||
Accenture PLC, Class A | 54,200 | $ | 11,637,824 | |||||
Automatic Data Processing, Inc. | 94,400 | 14,055,216 | ||||||
Fidelity National Information Services, Inc. | 114,100 | 15,299,669 | ||||||
Visa, Inc., Class A | 134,500 | 25,981,365 | ||||||
$ | 66,974,074 | |||||||
Leisure Products — 0.5% | ||||||||
Polaris, Inc. | 46,200 | $ | 4,275,810 | |||||
$ | 4,275,810 | |||||||
Media — 2.2% | ||||||||
Comcast Corp., Class A | 464,200 | $ | 18,094,516 | |||||
$ | 18,094,516 | |||||||
Multi-Utilities — 1.2% | ||||||||
CMS Energy Corp. | 177,700 | $ | 10,381,234 | |||||
$ | 10,381,234 | |||||||
Oil, Gas & Consumable Fuels — 3.3% | ||||||||
ConocoPhillips | 177,900 | $ | 7,475,358 | |||||
Phillips 66 | 171,600 | 12,338,040 | ||||||
Valero Energy Corp. | 137,500 | 8,087,750 | ||||||
$ | 27,901,148 | |||||||
Personal Products — 1.0% | ||||||||
Unilever NV(2) | 161,200 | $ | 8,587,124 | |||||
$ | 8,587,124 | |||||||
Pharmaceuticals — 6.3% | ||||||||
Johnson & Johnson | 158,800 | $ | 22,332,044 | |||||
Pfizer, Inc. | 452,800 | 14,806,560 | ||||||
Sanofi | 158,000 | 16,113,560 | ||||||
$ | 53,252,164 |
Security | Shares | Value | ||||||
Professional Services — 1.2% | ||||||||
IHS Markit, Ltd. | 133,600 | $ | 10,086,800 | |||||
$ | 10,086,800 | |||||||
Road & Rail — 1.0% | ||||||||
Union Pacific Corp. | 51,400 | $ | 8,690,198 | |||||
$ | 8,690,198 | |||||||
Semiconductors & Semiconductor Equipment — 4.4% | ||||||||
Broadcom, Inc. | 62,300 | $ | 19,662,503 | |||||
Texas Instruments, Inc. | 138,000 | 17,521,860 | ||||||
$ | 37,184,363 | |||||||
Software — 8.2% | ||||||||
Microsoft Corp. | 339,767 | $ | 69,145,982 | |||||
$ | 69,145,982 | |||||||
Specialty Retail — 3.0% | ||||||||
Home Depot, Inc. (The) | 100,300 | $ | 25,126,153 | |||||
$ | 25,126,153 | |||||||
Technology Hardware, Storage & Peripherals — 6.0% | ||||||||
Apple, Inc. | 137,337 | $ | 50,100,538 | |||||
$ | 50,100,538 | |||||||
Total Common Stocks |
| $ | 835,666,316 | |||||
Short-Term Investments — 0.2% | ||||||||
Description | Units | Value | ||||||
Eaton Vance Cash Reserves Fund, LLC, 0.35%(3) | 2,039,024 | $ | 2,039,024 | |||||
Total Short-Term Investments |
| $ | 2,039,024 | |||||
Total Investments — 99.5% |
| $ | 837,705,340 | |||||
Other Assets, Less Liabilities — 0.5% |
| $ | 4,225,016 | |||||
Net Assets — 100.0% |
| $ | 841,930,356 |
The percentage shown for each investment category in the Portfolio of Investments is based on net assets.
6 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Dividend Builder Fund
June 30, 2020
Portfolio of Investments (Unaudited) — continued
(1) | Non-income producing security. |
(2) | All or a portion of this security was on loan at June 30, 2020. The aggregate market value of securities on loan at June 30, 2020 was $7,499,937. |
(3) | Affiliated investment company, available to Eaton Vance portfolios and funds, which invests in high quality, U.S. dollar denominated money market instruments. The rate shown is the annualized seven-day yield as of June 30, 2020. |
7 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Dividend Builder Fund
June 30, 2020
Statement of Assets and Liabilities (Unaudited)
Assets | June 30, 2020 | |||
Unaffiliated investments, at value including $7,499,937 of securities on loan (identified cost, $646,449,205) | $ | 835,666,316 | ||
Affiliated investment, at value (identified cost, $2,039,024) | 2,039,024 | |||
Cash | 7,924 | |||
Dividends receivable | 713,664 | |||
Dividends receivable from affiliated investment | 715 | |||
Receivable for investments sold | 4,278,822 | |||
Receivable for Fund shares sold | 139,801 | |||
Securities lending income receivable | 32 | |||
Tax reclaims receivable | 374,714 | |||
Total assets | $ | 843,221,012 | ||
Liabilities | ||||
Payable for Fund shares redeemed | $ | 414,656 | ||
Payable to affiliates: | ||||
Investment adviser fee | 444,073 | |||
Distribution and service fees | 165,201 | |||
Trustees’ fees | 11,728 | |||
Accrued expenses | 254,998 | |||
Total liabilities | $ | 1,290,656 | ||
Net Assets | $ | 841,930,356 | ||
Sources of Net Assets | ||||
Paid-in capital | $ | 684,689,859 | ||
Distributable earnings | 157,240,497 | |||
Total | $ | 841,930,356 | ||
Class A Shares | ||||
Net Assets | $ | 629,679,666 | ||
Shares Outstanding | 43,164,162 | |||
Net Asset Value and Redemption Price Per Share | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 14.59 | ||
Maximum Offering Price Per Share | ||||
(100 ÷ 94.25 of net asset value per share) | $ | 15.48 | ||
Class C Shares | ||||
Net Assets | $ | 42,068,098 | ||
Shares Outstanding | 2,864,807 | |||
Net Asset Value and Offering Price Per Share* | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 14.68 | ||
Class I Shares | ||||
Net Assets | $ | 170,182,592 | ||
Shares Outstanding | 11,675,778 | |||
Net Asset Value, Offering Price and Redemption Price Per Share | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 14.58 |
On sales of $50,000 or more, the offering price of Class A shares is reduced.
* | Redemption price per share is equal to the net asset value less any applicable contingent deferred sales charge. |
8 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Dividend Builder Fund
June 30, 2020
Statement of Operations (Unaudited)
Investment Income | Six Months Ended June 30, 2020 | |||
Dividends (net of foreign taxes, $221,392) | $ | 12,962,199 | ||
Dividends from affiliated investment | 12,220 | |||
Securities lending income, net | 30,892 | |||
Total investment income | $ | 13,005,311 | ||
Expenses | ||||
Investment adviser fee | $ | 2,717,891 | ||
Distribution and service fees | ||||
Class A | 790,358 | |||
Class C | 234,750 | |||
Trustees’ fees and expenses | 24,004 | |||
Custodian fee | 108,260 | |||
Transfer and dividend disbursing agent fees | 276,793 | |||
Legal and accounting services | 43,079 | |||
Printing and postage | 73,782 | |||
Registration fees | 30,788 | |||
Miscellaneous | 27,793 | |||
Total expenses | $ | 4,327,498 | ||
Net investment income | $ | 8,677,813 | ||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) — | ||||
Investment transactions | $ | (41,737,049 | ) | |
Investment transactions — affiliated investment | (1,323 | ) | ||
Foreign currency transactions | 10,683 | |||
Net realized loss | $ | (41,727,689 | ) | |
Change in unrealized appreciation (depreciation) — | ||||
Investments | $ | (25,785,561 | ) | |
Investments — affiliated investment | (295 | ) | ||
Foreign currency | 11,910 | |||
Net change in unrealized appreciation (depreciation) | $ | (25,773,946 | ) | |
Net realized and unrealized loss | $ | (67,501,635 | ) | |
Net decrease in net assets from operations | $ | (58,823,822 | ) |
9 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Dividend Builder Fund
June 30, 2020
Statements of Changes in Net Assets
Increase (Decrease) in Net Assets | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
From operations — |
| |||||||
Net investment income | $ | 8,677,813 | $ | 13,890,364 | ||||
Net realized gain (loss) | (41,727,689 | ) | 39,587,419 | |||||
Net change in unrealized appreciation (depreciation) | (25,773,946 | ) | 185,467,220 | |||||
Net increase (decrease) in net assets from operations | $ | (58,823,822 | ) | $ | 238,945,003 | |||
Distributions to shareholders — | ||||||||
Class A | $ | (5,828,626 | ) | $ | (33,030,164 | ) | ||
Class C | (248,425 | ) | (2,459,995 | ) | ||||
Class I | (1,791,792 | ) | (8,866,386 | ) | ||||
Total distributions to shareholders | $ | (7,868,843 | ) | $ | (44,356,545 | ) | ||
Transactions in shares of beneficial interest — | ||||||||
Proceeds from sale of shares | ||||||||
Class A | $ | 13,535,748 | $ | 23,949,621 | ||||
Class C | 2,323,155 | 4,164,570 | ||||||
Class I | 25,028,980 | 28,404,364 | ||||||
Net asset value of shares issued to shareholders in payment of distributions declared | ||||||||
Class A | 4,976,277 | 28,167,592 | ||||||
Class C | 222,717 | 2,196,425 | ||||||
Class I | 1,662,808 | 8,147,696 | ||||||
Cost of shares redeemed | ||||||||
Class A | (52,138,850 | ) | (99,367,228 | ) | ||||
Class C | (6,808,799 | ) | (20,862,137 | ) | ||||
Class I | (26,857,377 | ) | (34,763,671 | ) | ||||
Net asset value of shares converted | ||||||||
Class A | 6,134,300 | 52,800,847 | ||||||
Class C | (6,134,300 | ) | (52,800,847 | ) | ||||
Net decrease in net assets from Fund share transactions | $ | (38,055,341 | ) | $ | (59,962,768 | ) | ||
Net increase (decrease) in net assets | $ | (104,748,006 | ) | $ | 134,625,690 | |||
Net Assets |
| |||||||
At beginning of period | $ | 946,678,362 | $ | 812,052,672 | ||||
At end of period | $ | 841,930,356 | $ | 946,678,362 |
10 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Dividend Builder Fund
June 30, 2020
Financial Highlights
Class A | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 15.610 | $ | 12.510 | $ | 14.550 | $ | 13.510 | $ | 13.110 | $ | 14.190 | ||||||||||||
Income (Loss) From Operations |
| |||||||||||||||||||||||
Net investment income(1) | $ | 0.146 | $ | 0.227 | $ | 0.242 | $ | 0.282 | $ | 0.278 | $ | 0.238 | ||||||||||||
Net realized and unrealized gain (loss) | (1.034 | ) | 3.607 | (0.942 | ) | 2.212 | 0.907 | 0.178 | ||||||||||||||||
Total income (loss) from operations | $ | (0.888 | ) | $ | 3.834 | $ | (0.700 | ) | $ | 2.494 | $ | 1.185 | $ | 0.416 | ||||||||||
Less Distributions |
| |||||||||||||||||||||||
From net investment income | $ | (0.132 | ) | $ | (0.264 | ) | $ | (0.264 | ) | $ | (0.264 | ) | $ | (0.264 | ) | $ | (0.236 | ) | ||||||
From net realized gain | — | (0.470 | ) | (1.076 | ) | (1.190 | ) | (0.521 | ) | (1.260 | ) | |||||||||||||
Total distributions | $ | (0.132 | ) | $ | (0.734 | ) | $ | (1.340 | ) | $ | (1.454 | ) | $ | (0.785 | ) | $ | (1.496 | ) | ||||||
Net asset value — End of period | $ | 14.590 | $ | 15.610 | $ | 12.510 | $ | 14.550 | $ | 13.510 | $ | 13.110 | ||||||||||||
Total Return(2) | (5.69 | )%(3) | 31.09 | % | (5.40 | )% | 18.89 | % | 9.21 | % | 2.91 | % | ||||||||||||
Ratios/Supplemental Data |
| |||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 629,680 | $ | 706,043 | $ | 558,487 | $ | 674,421 | $ | 685,372 | $ | 711,199 | ||||||||||||
Ratios (as a percentage of average daily net assets):(4) | ||||||||||||||||||||||||
Expenses(5) | 1.02 | %(6) | 1.01 | % | 1.02 | % | 1.03 | % | 1.04 | % | 1.04 | % | ||||||||||||
Net investment income | 2.04 | %(6) | 1.57 | % | 1.66 | % | 1.98 | % | 2.09 | % | 1.67 | % | ||||||||||||
Portfolio Turnover of the Portfolio(7) | — | — | 37 | %(3) | 86 | % | 97 | % | 99 | % | ||||||||||||||
Portfolio Turnover of the Fund | 58 | %(3) | 55 | % | 41 | %(3)(8) | — | — | — |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges. |
(3) | Not annualized. |
(4) | Includes the Fund’s share of the Portfolio’s allocated expenses for the period while the Fund was investing in the Portfolio. |
(5) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(6) | Annualized. |
(7) | Portfolio turnover represents the rate of portfolio activity for the period while the Fund was investing in the Portfolio. |
(8) | For the period from June 11, 2018 through December 31, 2018 when the Fund was making investments directly in securities. |
References to Portfolio herein are to Dividend Builder Portfolio, a Massachusetts business trust having the same investment objective and policies as the Fund, in which the Fund invested all of its investable assets prior to June 11, 2018.
11 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Dividend Builder Fund
June 30, 2020
Financial Highlights — continued
Class C | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 15.710 | $ | 12.580 | $ | 14.620 | $ | 13.580 | $ | 13.160 | $ | 14.250 | ||||||||||||
Income (Loss) From Operations |
| |||||||||||||||||||||||
Net investment income(1) | $ | 0.093 | $ | 0.115 | $ | 0.133 | $ | 0.177 | $ | 0.179 | $ | 0.132 | ||||||||||||
Net realized and unrealized gain (loss) | (1.047 | ) | 3.636 | (0.945 | ) | 2.209 | 0.926 | 0.167 | ||||||||||||||||
Total income (loss) from operations | $ | (0.954 | ) | $ | 3.751 | $ | (0.812 | ) | $ | 2.386 | $ | 1.105 | $ | 0.299 | ||||||||||
Less Distributions |
| |||||||||||||||||||||||
From net investment income | $ | (0.076 | ) | $ | (0.151 | ) | $ | (0.152 | ) | $ | (0.156 | ) | $ | (0.164 | ) | $ | (0.129 | ) | ||||||
From net realized gain | — | (0.470 | ) | (1.076 | ) | (1.190 | ) | (0.521 | ) | (1.260 | ) | |||||||||||||
Total distributions | $ | (0.076 | ) | $ | (0.621 | ) | $ | (1.228 | ) | $ | (1.346 | ) | $ | (0.685 | ) | $ | (1.389 | ) | ||||||
Net asset value — End of period | $ | 14.680 | $ | 15.710 | $ | 12.580 | $ | 14.620 | $ | 13.580 | $ | 13.160 | ||||||||||||
Total Return(2) | (6.07 | )%(3) | 30.13 | % | (6.09 | )% | 17.89 | % | 8.51 | % | 2.05 | % | ||||||||||||
Ratios/Supplemental Data |
| |||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 42,068 | $ | 56,585 | $ | 107,495 | $ | 149,298 | $ | 163,138 | $ | 165,915 | ||||||||||||
Ratios (as a percentage of average daily net assets):(4) | ||||||||||||||||||||||||
Expenses(5) | 1.78 | %(6) | 1.77 | % | 1.77 | % | 1.78 | % | 1.79 | % | 1.79 | % | ||||||||||||
Net investment income | 1.28 | %(6) | 0.80 | % | 0.91 | % | 1.24 | % | 1.34 | % | 0.92 | % | ||||||||||||
Portfolio Turnover of the Portfolio(7) | — | — | 37 | %(3) | 86 | % | 97 | % | 99 | % | ||||||||||||||
Portfolio Turnover of the Fund | 58 | %(3) | 55 | % | 41 | %(3)(8) | — | — | — |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges. |
(3) | Not annualized. |
(4) | Includes the Fund’s share of the Portfolio’s allocated expenses for the period while the Fund was investing in the Portfolio. |
(5) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(6) | Annualized. |
(7) | Portfolio turnover represents the rate of portfolio activity for the period while the Fund was investing in the Portfolio. |
(8) | For the period from June 11, 2018 through December 31, 2018 when the Fund was making investments directly in securities. |
References to Portfolio herein are to Dividend Builder Portfolio, a Massachusetts business trust having the same investment objective and policies as the Fund, in which the Fund invested all of its investable assets prior to June 11, 2018.
12 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Dividend Builder Fund
June 30, 2020
Financial Highlights — continued
Class I | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 15.600 | $ | 12.500 | $ | 14.530 | $ | 13.500 | $ | 13.100 | $ | 14.180 | ||||||||||||
Income (Loss) From Operations |
| |||||||||||||||||||||||
Net investment income(1) | $ | 0.163 | $ | 0.262 | $ | 0.279 | $ | 0.316 | $ | 0.312 | $ | 0.274 | ||||||||||||
Net realized and unrealized gain (loss) | (1.033 | ) | 3.608 | (0.932 | ) | 2.204 | 0.906 | 0.178 | ||||||||||||||||
Total income (loss) from operations | $ | (0.870 | ) | $ | 3.870 | $ | (0.653 | ) | $ | 2.520 | $ | 1.218 | $ | 0.452 | ||||||||||
Less Distributions |
| |||||||||||||||||||||||
From net investment income | $ | (0.150 | ) | $ | (0.300 | ) | $ | (0.301 | ) | $ | (0.300 | ) | $ | (0.297 | ) | $ | (0.272 | ) | ||||||
From net realized gain | — | (0.470 | ) | (1.076 | ) | (1.190 | ) | (0.521 | ) | (1.260 | ) | |||||||||||||
Total distributions | $ | (0.150 | ) | $ | (0.770 | ) | $ | (1.377 | ) | $ | (1.490 | ) | $ | (0.818 | ) | $ | (1.532 | ) | ||||||
Net asset value — End of period | $ | 14.580 | $ | 15.600 | $ | 12.500 | $ | 14.530 | $ | 13.500 | $ | 13.100 | ||||||||||||
Total Return(2) | (5.58 | )%(3) | 31.44 | % | (5.10 | )% | 19.12 | % | 9.49 | % | 3.10 | % | ||||||||||||
Ratios/Supplemental Data |
| |||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 170,183 | $ | 184,050 | $ | 146,070 | $ | 164,604 | $ | 113,726 | $ | 107,963 | ||||||||||||
Ratios (as a percentage of average daily net assets):(4) | ||||||||||||||||||||||||
Expenses(5) | 0.78 | %(6) | 0.76 | % | 0.77 | % | 0.78 | % | 0.79 | % | 0.79 | % | ||||||||||||
Net investment income | 2.29 | %(6) | 1.82 | % | 1.92 | % | 2.22 | % | 2.35 | % | 1.92 | % | ||||||||||||
Portfolio Turnover of the Portfolio(7) | — | — | 37 | %(3) | 86 | % | 97 | % | 99 | % | ||||||||||||||
Portfolio Turnover of the Fund | 58 | %(3) | 55 | % | 41 | %(3)(8) | — | — | — |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested. |
(3) | Not annualized. |
(4) | Includes the Fund’s share of the Portfolio’s allocated expenses for the period while the Fund was investing in the Portfolio. |
(5) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(6) | Annualized. |
(7) | Portfolio turnover represents the rate of portfolio activity for the period while the Fund was investing in the Portfolio. |
(8) | For the period from June 11, 2018 through December 31, 2018 when the Fund was making investments directly in securities. |
References to Portfolio herein are to Dividend Builder Portfolio, a Massachusetts business trust having the same investment objective and policies as the Fund, in which the Fund invested all of its investable assets prior to June 11, 2018.
13 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Dividend Builder Fund
June 30, 2020
Notes to Financial Statements (Unaudited)
1 Significant Accounting Policies
Eaton Vance Dividend Builder Fund (the Fund) is a diversified series of Eaton Vance Special Investment Trust (the Trust). The Trust is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company. The Fund’s investment objective is to seek total return. The Fund offers three classes of shares. Class A shares are generally sold subject to a sales charge imposed at time of purchase. Class C shares are sold at net asset value and are generally subject to a contingent deferred sales charge (see Note 5). Class I shares are sold at net asset value and are not subject to a sales charge. Effective January 25, 2019, Class C shares generally automatically convert to Class A shares ten years after their purchase as described in the Fund’s prospectus. Each class represents a pro-rata interest in the Fund, but votes separately on class-specific matters and (as noted below) is subject to different expenses. Realized and unrealized gains and losses and net investment income and losses, other than class-specific expenses, are allocated daily to each class of shares based on the relative net assets of each class to the total net assets of the Fund. Each class of shares differs in its distribution plan and certain other class-specific expenses.
The following is a summary of significant accounting policies of the Fund. The policies are in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The Fund is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946.
A Investment Valuation — The following methodologies are used to determine the market value or fair value of investments.
Equity Securities. Equity securities listed on a U.S. securities exchange generally are valued at the last sale or closing price on the day of valuation or, if no sales took place on such date, at the mean between the closing bid and ask prices on the exchange where such securities are principally traded. Equity securities listed on the NASDAQ Global or Global Select Market generally are valued at the NASDAQ official closing price. Unlisted or listed securities for which closing sales prices or closing quotations are not available are valued at the mean between the latest available bid and ask prices.
Foreign Securities and Currencies. Foreign securities and currencies are valued in U.S. dollars, based on foreign currency exchange rate quotations supplied by a third party pricing service. The pricing service uses a proprietary model to determine the exchange rate. Inputs to the model include reported trades and implied bid/ask spreads. The daily valuation of exchange-traded foreign securities generally is determined as of the close of trading on the principal exchange on which such securities trade. Events occurring after the close of trading on foreign exchanges may result in adjustments to the valuation of foreign securities to more accurately reflect their fair value as of the close of regular trading on the New York Stock Exchange. When valuing foreign equity securities that meet certain criteria, the Fund’s Trustees have approved the use of a fair value service that values such securities to reflect market trading that occurs after the close of the applicable foreign markets of comparable securities or other instruments that have a strong correlation to the fair-valued securities.
Affiliated Fund. The Fund may invest in Eaton Vance Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by Eaton Vance Management (EVM). While Cash Reserves Fund is not a registered money market mutual fund, it conducts all of its investment activities in accordance with the requirements of Rule 2a-7 under the 1940 Act. Investments in Cash Reserves Fund are valued at the closing net asset value per unit on the valuation day. Cash Reserves Fund generally values its investment securities based on available market quotations provided by a third party pricing service.
Fair Valuation. Investments for which valuations or market quotations are not readily available or are deemed unreliable are valued at fair value using methods determined in good faith by or at the direction of the Trustees of the Fund in a manner that most fairly reflects the security’s “fair value”, which is the amount that the Fund might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of relevant factors, which are likely to vary from one pricing context to another. These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issuer or of comparable companies or entities, quotations or relevant information obtained from broker/dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the company’s or entity’s financial statements, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.
B Investment Transactions — Investment transactions for financial statement purposes are accounted for on a trade date basis. Realized gains and losses on investments sold are determined on the basis of identified cost.
C Income — Dividend income is recorded on the ex-dividend date for dividends received in cash and/or securities. However, if the ex-dividend date has passed, certain dividends from foreign securities are recorded as the Fund is informed of the ex-dividend date. Withholding taxes on foreign dividends and capital gains have been provided for in accordance with the Fund’s understanding of the applicable countries’ tax rules and rates. In consideration of recent decisions rendered by European courts, the Fund has filed additional tax reclaims for previously withheld taxes on dividends earned in certain European Union countries. These filings are subject to various administrative and judicial proceedings within these countries. Due to the uncertainty as to the ultimate resolution of these proceedings, the likelihood of receipt of these reclaims, and the potential timing of payment, no amounts are reflected in the Fund’s financial statements for such outstanding reclaims.
D Federal Taxes — The Fund’s policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its net investment income, and all or substantially all of its net realized capital gains. Accordingly, no provision for federal income or excise tax is necessary.
14 |
Table of Contents
Eaton Vance
Dividend Builder Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
As of June 30, 2020, the Fund had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. The Fund files a U.S. federal income tax return annually after its fiscal year-end, which is subject to examination by the Internal Revenue Service for a period of three years from the date of filing.
E Expenses — The majority of expenses of the Trust are directly identifiable to an individual fund. Expenses which are not readily identifiable to a specific fund are allocated taking into consideration, among other things, the nature and type of expense and the relative size of the funds.
F Foreign Currency Translation — Investment valuations, other assets, and liabilities initially expressed in foreign currencies are translated each business day into U.S. dollars based upon current exchange rates. Purchases and sales of foreign investment securities and income and expenses denominated in foreign currencies are translated into U.S. dollars based upon currency exchange rates in effect on the respective dates of such transactions. Recognized gains or losses on investment transactions attributable to changes in foreign currency exchange rates are recorded for financial statement purposes as net realized gains and losses on investments. That portion of unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed.
G Use of Estimates — The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.
H Indemnifications — Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund. Under Massachusetts law, if certain conditions prevail, shareholders of a Massachusetts business trust (such as the Trust) could be deemed to have personal liability for the obligations of the Trust. However, the Trust’s Declaration of Trust contains an express disclaimer of liability on the part of Fund shareholders and the By-laws provide that the Trust shall assume, upon request by the shareholder, the defense on behalf of any Fund shareholders. Moreover, the By-laws also provide for indemnification out of Fund property of any shareholder held personally liable solely by reason of being or having been a shareholder for all loss or expense arising from such liability. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.
I Interim Financial Statements — The interim financial statements relating to June 30, 2020 and for the six months then ended have not been audited by an independent registered public accounting firm, but in the opinion of the Fund’s management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial statements.
2 Distributions to Shareholders and Income Tax Information
It is the present policy of the Fund to make monthly distributions of all or substantially all of its net investment income and to distribute annually all or substantially all of its net realized capital gains. Distributions to shareholders are recorded on the ex-dividend date. Distributions are declared separately for each class of shares. Shareholders may reinvest income and capital gain distributions in additional shares of the same class of the Fund at the net asset value as of the ex-dividend date or, at the election of the shareholder, receive distributions in cash. Distributions to shareholders are determined in accordance with income tax regulations, which may differ from U.S. GAAP. As required by U.S. GAAP, only distributions in excess of tax basis earnings and profits are 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. For tax purposes, distributions from short-term capital gains are considered to be from ordinary income.
The cost and unrealized appreciation (depreciation) of investments of the Fund at June 30, 2020, as determined on a federal income tax basis, were as follows:
Aggregate cost | $ | 646,804,849 | ||
Gross unrealized appreciation | $ | 198,914,710 | ||
Gross unrealized depreciation | (8,014,219 | ) | ||
Net unrealized appreciation | $ | 190,900,491 |
3 Investment Adviser Fee and Other Transactions with Affiliates
The investment adviser fee is earned by Boston Management and Research (BMR), a subsidiary of EVM, as compensation for investment advisory services rendered to the Fund. The fee is computed at an annual rate of 0.65% of the Fund’s average daily net assets up to $500 million, 0.625% from $500 million up to $1 billion, 0.600% from $1 billion up to $1.5 billion, 0.550% from $1.5 billion up to $2 billion, 0.500% from $2 billion up to $3 billion and at a reduced rate on daily net assets of $3 billion or more, and is payable monthly. For the six months ended June 30, 2020, the investment adviser fee amounted to $2,717,891 or 0.64% (annualized) of the Fund’s average daily net assets. The Fund invests its cash in Cash Reserves Fund. EVM does not currently receive a fee for advisory services provided to Cash Reserves Fund.
15 |
Table of Contents
Eaton Vance
Dividend Builder Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
EVM serves as the administrator of the Fund, but receives no compensation. EVM provides sub-transfer agency and related services to the Fund pursuant to a Sub-Transfer Agency Support Services Agreement. For the six months ended June 30, 2020, EVM earned $53,621 from the Fund pursuant to such agreement, which is included in transfer and dividend disbursing agent fees on the Statement of Operations. The Fund was informed that Eaton Vance Distributors, Inc. (EVD), an affiliate of EVM and the Fund’s principal underwriter, received $11,311 as its portion of the sales charge on sales of Class A shares for the six months ended June 30, 2020. EVD also received distribution and service fees from Class A and Class C shares (see Note 4) and contingent deferred sales charges (see Note 5).
Trustees and officers of the Fund who are members of EVM’s or BMR’s organizations receive remuneration for their services to the Fund out of the investment adviser fee. Trustees of the Fund who are not affiliated with the investment adviser may elect to defer receipt of all or a percentage of their annual fees in accordance with the terms of the Trustees Deferred Compensation Plan. For the six months ended June 30, 2020, no significant amounts have been deferred. Certain officers and Trustees of the Fund are officers of the above organizations.
4 Distribution Plans
The Fund has in effect a distribution plan for Class A shares (Class A Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class A Plan, the Fund pays EVD a distribution and service fee of 0.25% per annum of its average daily net assets attributable to Class A shares for distribution services and facilities provided to the Fund by EVD, as well as for personal services and/or the maintenance of shareholder accounts. Distribution and service fees paid or accrued to EVD for the six months ended June 30, 2020 amounted to $790,358 for Class A shares.
The Fund also has in effect a distribution plan for Class C shares (Class C Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class C Plan, the Fund pays EVD amounts equal to 0.75% per annum of its average daily net assets attributable to Class C shares for providing ongoing distribution services and facilities to the Fund. For the six months ended June 30, 2020, the Fund paid or accrued to EVD $176,062 for Class C shares.
Pursuant to the Class C Plan, the Fund also makes payments of service fees to EVD, financial intermediaries and other persons in amounts equal to 0.25% per annum of its average daily net assets attributable to that class. Service fees paid or accrued are for personal services and/or the maintenance of shareholder accounts. They are separate and distinct from the sales commissions and distribution fees payable to EVD. Service fees paid or accrued for the six months ended June 30, 2020 amounted to $58,688 for Class C shares.
Distribution and service fees are subject to the limitations contained in the Financial Industry Regulatory Authority Rule 2341(d).
5 Contingent Deferred Sales Charges
A contingent deferred sales charge (CDSC) of 1% generally is imposed on redemptions of Class C shares made within 12 months of purchase. Class A shares may be subject to a 1% CDSC if redeemed within 18 months of purchase (depending on the circumstances of purchase). Generally, the CDSC is based upon the lower of the net asset value at date of redemption or date of purchase. No charge is levied on shares acquired by reinvestment of dividends or capital gain distributions. For the six months ended June 30, 2020, the Fund was informed that EVD received approximately $3,000 and $2,000 of CDSCs paid by Class A and Class C shareholders, respectively.
6 Purchases and Sales of Investments
Purchases and sales of investments, other than short-term obligations, aggregated $491,222,583 and $531,589,229, respectively, for the six months ended June 30, 2020.
7 Shares of Beneficial Interest
The Fund’s Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value). Such shares may be issued in a number of different series (such as the Fund) and classes. Transactions in Fund shares were as follows:
Class A | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 952,910 | 1,656,682 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | 338,326 | 1,906,692 | ||||||
Redemptions | (3,798,375 | ) | (6,912,680 | ) | ||||
Converted from Class C shares | 440,209 | 3,937,445 | ||||||
Net increase (decrease) | (2,066,930 | ) | 588,139 |
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Table of Contents
Eaton Vance
Dividend Builder Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
Class C | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 166,302 | 284,321 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | 15,085 | 147,852 | ||||||
Redemptions | (480,715 | ) | (1,460,281 | ) | ||||
Converted to Class A shares | (437,325 | ) | (3,913,810 | ) | ||||
Net decrease | (736,653 | ) | (4,941,918 | ) | ||||
Class I | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 1,713,844 | 1,984,411 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | 113,172 | 552,655 | ||||||
Redemptions | (1,952,710 | ) | (2,422,215 | ) | ||||
Net increase (decrease) | (125,694 | ) | 114,851 |
8 Line of Credit
The Fund participates with other portfolios and funds managed by EVM and its affiliates in an $800 million unsecured line of credit agreement with a group of banks, which is in effect through October 27, 2020. In connection with the renewal of the agreement on October 29, 2019, funds managed by Calvert Research and Management, an affiliate of EVM, were added as participating funds to the agreement and the borrowing limit was increased from $625 million. Borrowings are made by the Fund solely for temporary purposes related to redemptions and other short-term cash needs. Interest is charged to the Fund based on its borrowings at an amount above either the Eurodollar rate or Federal Funds rate. In addition, a fee computed at an annual rate of 0.15% on the daily unused portion of the line of credit is allocated among the participating portfolios and funds at the end of each quarter. Because the line of credit is not available exclusively to the Fund, it may be unable to borrow some or all of its requested amounts at any particular time. The Fund did not have any significant borrowings or allocated fees during the six months ended June 30, 2020.
9 Securities Lending Agreement
The Fund has established a securities lending agreement with State Street Bank and Trust Company (SSBT) as securities lending agent in which the Fund lends portfolio securities to qualified borrowers in exchange for collateral consisting of either cash or securities issued or guaranteed by the U.S. government or its agencies or instrumentalities in an amount at least equal to the market value of the securities on loan. The market value of securities loaned is determined daily and any additional required collateral is delivered to the Fund on the next business day. Cash collateral is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market fund registered under the 1940 Act. The Fund earns interest on the amount invested but it must pay (and at times receive from) the broker a loan rebate fee computed as a varying percentage of the collateral received. For security loans secured by non-cash collateral, the Fund earns a negotiated lending fee from the borrower. A portion of the income earned by the Fund from its investment of cash collateral, net of rebate fees, and lending fees received is allocated to SSBT for its services as lending agent and the portion allocated to the Fund is presented as securities lending income, net on the Statement of Operations. Non-cash collateral is held by the lending agent on behalf of the Fund and cannot be sold or re-pledged by the Fund; accordingly, such collateral is not reflected in the Statement of Assets and Liabilities.
The Fund is subject to possible delay in the recovery of loaned securities. Pursuant to the securities lending agreement, SSBT has provided indemnification to the Fund in the event of default by a borrower with respect to a loan. The Fund bears the risk of loss with respect to the investment of cash collateral.
At June 30, 2020, the value of the securities loaned (all common stocks) and the value of the collateral received, which exceeded the value of the securities loaned, amounted to $7,499,937 and $7,743,505, respectively. Collateral received was comprised of U.S. government and/or agencies securities. The securities lending transactions have no contractual maturity date and each of the Fund and borrower has the option to terminate a loan at any time.
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Table of Contents
Eaton Vance
Dividend Builder Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
10 Investments in Affiliated Funds
At June 30, 2020, the value of the Fund’s investment in affiliated funds was $2,039,024, which represents 0.2% of the Fund’s net assets. Transactions in affiliated funds by the Fund for the six months ended June 30, 2020 were as follows:
Name of affiliated fund | Value, beginning of period | Purchases | Sales proceeds | Net realized gain (loss) | Change in unrealized appreciation (depreciation) | Value, end of period | Dividend income | Units, end of period | ||||||||||||||||||||||||
Short-Term Investments |
| |||||||||||||||||||||||||||||||
Eaton Vance Cash Reserves Fund, LLC | $ | 3,124,549 | $ | 96,185,263 | $ | (97,269,170 | ) | $ | (1,323 | ) | $ | (295 | ) | $ | 2,039,024 | $ | 12,220 | 2,039,024 |
11 Fair Value Measurements
Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
• | Level 1 – quoted prices in active markets for identical investments |
• | Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
• | Level 3 – significant unobservable inputs (including a fund’s own assumptions in determining the fair value of investments) |
In cases where the inputs used to measure fair value fall in different levels of the fair value hierarchy, the level disclosed is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
At June 30, 2020, the hierarchy of inputs used in valuing the Fund’s investments, which are carried at value, were as follows:
Asset Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stocks | ||||||||||||||||
Communication Services | $ | 80,361,290 | $ | — | $ | — | $ | 80,361,290 | ||||||||
Consumer Discretionary | 81,301,925 | — | — | 81,301,925 | ||||||||||||
Consumer Staples | 56,105,806 | 8,681,170 | — | 64,786,976 | ||||||||||||
Energy | 27,901,148 | — | — | 27,901,148 | ||||||||||||
Financials | 86,000,746 | — | — | 86,000,746 | ||||||||||||
Health Care | 118,292,291 | 16,113,560 | — | 134,405,851 | ||||||||||||
Industrials | 66,396,451 | — | — | 66,396,451 | ||||||||||||
Information Technology | 239,943,501 | — | — | 239,943,501 | ||||||||||||
Materials | 18,453,638 | — | — | 18,453,638 | ||||||||||||
Real Estate | 8,669,052 | — | — | 8,669,052 | ||||||||||||
Utilities | 27,445,738 | — | — | 27,445,738 | ||||||||||||
Total Common Stocks | $ | 810,871,586 | $ | 24,794,730 | * | $ | — | $ | 835,666,316 | |||||||
Short-Term Investments | $ | — | $ | 2,039,024 | $ | — | $ | 2,039,024 | ||||||||
Total Investments | $ | 810,871,586 | $ | 26,833,754 | $ | — | $ | 837,705,340 |
* | Includes foreign equity securities whose values were adjusted to reflect market trading of comparable securities or other correlated instruments that occurred after the close of trading in their applicable foreign markets. |
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Table of Contents
Eaton Vance
Dividend Builder Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
12 Risks and Uncertainties
Pandemic Risk
An outbreak of respiratory disease caused by a novel coronavirus that was first detected in China in December 2019 has spread rapidly internationally. This coronavirus has resulted in closing borders, enhanced health screenings, changes to healthcare service preparation and delivery, quarantines, cancellations, disruptions to supply chains and customer activity, as well as general concern and uncertainty. The impact of this outbreak has negatively affected the worldwide economy, as well as the economies of individual countries and individual companies and can affect the market in general in significant and unforeseen ways. Health crises caused by outbreaks, such as the coronavirus outbreak, may exacerbate other pre-existing political, social and economic risks and disrupt normal market conditions and operations. The near-term impact of this coronavirus has resulted in substantial market volatility, which may have an adverse effect on the Fund’s investments.
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Table of Contents
Eaton Vance
Dividend Builder Fund
June 30, 2020
Board of Trustees’ Contract Approval
Overview of the Contract Review Process
The Investment Company Act of 1940, as amended (the “1940 Act”), provides, in substance, that the investment advisory agreement between a fund and its investment adviser will continue in effect from year-to-year only if its continuation is approved on an annual basis by a vote of the fund’s board of trustees, including a majority of the trustees who are not “interested persons” of the fund (“independent trustees”), cast in person at a meeting called for the purpose of considering such approval.
At a meeting held on April 22, 2020 (the “April 2020 Meeting”), the Boards of Trustees/Directors comprised of the same individuals (collectively, the “Board”) that oversees a majority of the registered investment companies advised by Eaton Vance Management or its affiliate, Boston Management and Research (the “Eaton Vance Funds”), including a majority of the independent trustees (the “Independent Trustees”), voted to approve the continuation of existing investment advisory agreements and sub-advisory agreements(1) for each of the Eaton Vance Funds for an additional one-year period. The Board relied upon the affirmative recommendation of its Contract Review Committee, which is a committee exclusively comprised of Independent Trustees. Prior to making its recommendation, the Contract Review Committee reviewed information furnished by the adviser and sub-adviser to each of the Eaton Vance Funds (including information specifically requested by the Board) for a series of formal meetings held between February and April 2020. Members of the Contract Review Committee also considered information received at prior meetings of the Board and its committees, to the extent such information was relevant to the Contract Review Committee’s annual evaluation of the investment advisory agreements and sub-advisory agreements.
In connection with its evaluation of the investment advisory agreements and sub-advisory agreements, the Board considered various information relating to the Eaton Vance Funds. This included information applicable to all or groups of Eaton Vance Funds, which is referenced immediately below, and information applicable to the particular Eaton Vance Fund covered by this report (additional fund-specific information is referenced below under “Results of the Contract Review Process”). (For funds that invest through one or more underlying portfolios, references to “each fund” in this section may include information that was considered at the portfolio-level.)
Information about Fees, Performance and Expenses
• | A report from an independent data provider comparing advisory and other fees paid by each fund to such fees paid by comparable funds, as identified by the independent data provider (“comparable funds”); |
• | A report from an independent data provider comparing each fund’s total expense ratio (and its components) to those of comparable funds; |
• | A report from an independent data provider comparing the investment performance of each fund (including, as relevant, total return data, income data, Sharpe ratios and information ratios) to the investment performance of comparable funds and, as applicable, benchmark indices, over various time periods; |
• | In certain instances, data regarding investment performance relative to customized groups of peer funds and blended indices identified by the adviser in consultation with the Portfolio Management Committee of the Board; |
• | Comparative information concerning the fees charged and services provided by the adviser and sub-adviser to each fund in managing other accounts (which may include other mutual funds, collective investment funds and institutional accounts) using investment strategies and techniques similar to those used in managing such fund(s), if any; |
• | Profitability analyses with respect to the adviser and sub-adviser to each of the funds; |
Information about Portfolio Management and Trading
• | Descriptions of the investment management services provided to each fund, as well as each of the funds’ investment strategies and policies; |
• | The procedures and processes used to determine the fair value of fund assets, when necessary, and actions taken to monitor and test the effectiveness of such procedures and processes; |
• | Information about the policies and practices of each fund’s adviser and sub-adviser (in the context of a sub-adviser, only those with trading responsibilities) with respect to trading, including their processes for seeking best execution of portfolio transactions; |
• | Information about the allocation of brokerage transactions and the benefits, if any, received by the adviser and sub-adviser (in the context of a sub-adviser, only those with trading responsibilities) to each fund as a result of brokerage allocation, including, as applicable, information concerning the acquisition of research through client commission arrangements and policies with respect to “soft dollars”; |
• | Data relating to the portfolio turnover rate of each fund; |
Information about each Adviser and Sub-adviser
• | Reports detailing the financial results and condition of the adviser and sub-adviser to each fund; |
• | Information regarding the individual investment professionals whose responsibilities include portfolio management and investment research for the funds, and, for portfolio managers and certain other investment professionals, information relating to their responsibilities with respect to managing other mutual funds and investment accounts, as applicable; |
(1) | Not all Eaton Vance Funds have entered into a sub-advisory agreement with a sub-adviser. Accordingly, references to “sub-adviser” or “sub-advisory agreement” in this “Overview” section may not be applicable to the particular Eaton Vance Fund covered by this report. |
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Table of Contents
Eaton Vance
Dividend Builder Fund
June 30, 2020
Board of Trustees’ Contract Approval — continued
• | The Code of Ethics of the adviser and its affiliates and the sub-adviser of each fund, together with information relating to compliance with, and the administration of, such codes; |
• | Policies and procedures relating to proxy voting and the handling of corporate actions and class actions; |
• | Information concerning the resources devoted to compliance efforts undertaken by the adviser and its affiliates and the sub-adviser of each fund, if any, including descriptions of their various compliance programs and their record of compliance; |
• | Information concerning the business continuity and disaster recovery plans of the adviser and its affiliates and the sub-adviser of each fund, if any; |
• | A description of Eaton Vance Management’s and Boston Management and Research’s oversight of sub-advisers, including with respect to regulatory and compliance issues, investment management and other matters; |
Other Relevant Information
• | Information concerning the nature, cost and character of the administrative and other non-investment advisory services provided by Eaton Vance Management and its affiliates; |
• | Information concerning oversight of the relationship with the custodian, subcustodians and fund accountants by the adviser and/or administrator to each of the funds; |
• | For an Eaton Vance Fund structured as an exchange-listed closed-end fund, information concerning the benefits of the closed-end fund structure, as well as, where relevant, the closed-end fund’s market prices, trading volume data, distribution rates and other relevant matters; and |
• | The terms of each investment advisory agreement and sub-advisory agreement. |
During the various meetings of the Board and its committees throughout the twelve months ended April 2020, the Trustees received information from portfolio managers and other investment professionals of the advisers and sub-advisers of the funds regarding investment and performance matters, and considered various investment and trading strategies used in pursuing the funds’ investment objectives. The Trustees also received information regarding risk management techniques employed in connection with the management of the funds. The Board and its committees evaluated issues pertaining to industry and regulatory developments, compliance procedures, fund governance and other issues with respect to the funds, and received and participated in reports and presentations provided by Eaton Vance Management, Boston Management and Research and fund sub-advisers, with respect to such matters. In addition to the formal meetings of the Board and its committees, the Independent Trustees held regular teleconferences to discuss, among other topics, matters relating to the continuation of investment advisory agreements and sub-advisory agreements.
The Contract Review Committee was advised throughout the contract review process by Goodwin Procter LLP, independent legal counsel for the Independent Trustees. The members of the Contract Review Committee, with the advice of such counsel, exercised their own business judgment in determining the material factors to be considered in evaluating each investment advisory agreement and sub-advisory agreement and the weight to be given to each such factor. The conclusions reached with respect to each investment advisory agreement and sub-advisory agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each member of the Contract Review Committee may have placed varying emphasis on particular factors in reaching conclusions with respect to each investment advisory agreement and sub-advisory agreement. In evaluating each investment advisory agreement and sub-advisory agreement, including the fee structures and other terms contained in such agreements, the members of the Contract Review Committee were also informed by multiple years of analysis and discussion with the adviser and sub-adviser to each of the Eaton Vance Funds.
In voting its approval of the continuation of existing investment advisory agreements and sub-advisory agreements at the April 2020 Meeting, the Board relied on an order issued by the Securities and Exchange Commission on March 25, 2020, which provided temporary relief from the in-person voting requirements under Section 15 of the 1940 Act in response to the impacts of the COVID-19 pandemic.
Results of the Contract Review Process
Based on its consideration of the foregoing, and such other information it deemed relevant, including the factors and conclusions described below, the Contract Review Committee concluded that the continuation of the investment advisory agreement between Eaton Vance Dividend Builder Fund (the “Fund”) and Boston Management and Research (the “Adviser”), including its fee structure, is in the interests of shareholders and, therefore, recommended to the Board approval of the agreement. Based on the recommendation of the Contract Review Committee, the Board, including a majority of the Independent Trustees, voted to approve continuation of the investment advisory agreement for the Fund.
Nature, Extent and Quality of Services
In considering whether to approve the investment advisory agreement for the Fund, the Board evaluated the nature, extent and quality of services provided to the Fund by the Adviser.
The Board considered the Adviser’s management capabilities and investment processes in light of the types of investments held by the Fund, including the education, experience and number of investment professionals and other personnel who provide portfolio management, investment research, and similar services to the Fund. The Board specifically noted that the Adviser has devoted extensive resources to in-house equity research and also draws upon independent research available from third-party sources. The Board also took into account the resources dedicated to portfolio management and other
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Eaton Vance
Dividend Builder Fund
June 30, 2020
Board of Trustees’ Contract Approval — continued
services, the compensation methods of the Adviser and other factors, including the reputation and resources of the Adviser to recruit and retain highly qualified research, advisory and supervisory investment professionals. In addition, the Board considered the time and attention devoted to the Eaton Vance Funds, including the Fund, by senior management, as well as the infrastructure, operational capabilities and support staff in place to assist in the portfolio management and operations of the Fund, including the provision of administrative services. The Board also considered the business-related and other risks to which the Adviser or its affiliates may be subject in managing the Fund.
The Board considered the compliance programs of the Adviser and relevant affiliates thereof. The Board considered compliance and reporting matters regarding, among other things, personal trading by investment professionals, disclosure of portfolio holdings, late trading, frequent trading, portfolio valuation, business continuity and the allocation of investment opportunities. The Board also considered the responses of the Adviser and its affiliates to requests in recent years from regulatory authorities, such as the Securities and Exchange Commission and the Financial Industry Regulatory Authority.
The Board considered other administrative services provided or overseen by Eaton Vance Management and its affiliates, including transfer agency and accounting services. The Board evaluated the benefits to shareholders of investing in a fund that is a part of a large fund complex offering exposure to a variety of asset classes and investment disciplines, as well as the ability, in many cases, to exchange an investment among different funds without incurring additional sales charges.
After consideration of the foregoing factors, among others, the Board concluded that the nature, extent and quality of services provided by the Adviser, taken as a whole, are appropriate and consistent with the terms of the investment advisory agreement.
Fund Performance
The Board compared the Fund’s investment performance to that of comparable funds identified by an independent data provider (the peer group), as well as an appropriate benchmark index. The Board’s review included comparative performance data with respect to the Fund for the one-, three-, five- and ten-year periods ended September 30, 2019. In this regard, the Board noted that the performance of the Fund was consistent with the median performance of the Fund’s peer group for the three-year period. The Board also noted that the performance of the Fund was lower than its benchmark index for the three-year period. The Board concluded that the performance of the Fund was satisfactory.
Management Fees and Expenses
The Board considered contractual fee rates payable by the Fund for advisory and administrative services (referred to collectively as “management fees”). As part of its review, the Board considered the Fund’s management fees and total expense ratio for the one-year period ended September 30, 2019, as compared to those of comparable funds, before and after giving effect to any undertaking to waive fees or reimburse expenses. The Board also considered factors that had an impact on the Fund’s total expense ratio relative to comparable funds.
After considering the foregoing information, and in light of the nature, extent and quality of the services provided by the Adviser, the Board concluded that the management fees charged for advisory and related services are reasonable.
Profitability and “Fall-Out” Benefits
The Board considered the level of profits realized by the Adviser and relevant affiliates thereof in providing investment advisory and administrative services to the Fund and to all Eaton Vance Funds as a group. The Board considered the level of profits realized without regard to marketing support or other payments by the Adviser and its affiliates to third parties in respect of distribution or other services.
The Board concluded that, in light of the foregoing factors and the nature, extent and quality of the services rendered, the profits realized by the Adviser and its affiliates are deemed not to be excessive.
The Board also considered direct or indirect fall-out benefits received by the Adviser and its affiliates in connection with their respective relationships with the Fund, including the benefits of research services that may be available to the Adviser as a result of securities transactions effected for the Fund and other investment advisory clients.
Economies of Scale
In reviewing management fees and profitability, the Board also considered the extent to which the Adviser and its affiliates, on the one hand, and the Fund, on the other hand, can expect to realize benefits from economies of scale as the assets of the Fund increase. The Board acknowledged the difficulty in accurately measuring the benefits resulting from economies of scale, if any, with respect to the management of any specific fund or group of funds. The Board reviewed data summarizing the increases and decreases in the assets of the Fund and of all Eaton Vance Funds as a group over various time periods, and evaluated the extent to which the total expense ratio of the Fund and the profitability of the Adviser and its affiliates may have been affected by such increases or decreases. Based upon the foregoing, the Board concluded that the Fund currently shares in the benefits from economies of scale, if any, when they are realized by the Adviser. The Board also concluded that the structure of the advisory fee, which includes breakpoints at several asset levels, will allow the Fund to continue to benefit from any economies of scale in the future.
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Eaton Vance
Dividend Builder Fund
June 30, 2020
Liquidity Risk Management Program
The Fund has implemented a written liquidity risk management program (Program) and related procedures to manage its liquidity in accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (Liquidity Rule). The Liquidity Rule defines “liquidity risk” as the risk that a fund could not meet requests to redeem shares issued by the fund without significant dilution of the remaining investors’ interests in the fund. The Fund’s Board of Trustees/Directors has designated the investment adviser to serve as the administrator of the Program and the related procedures. The administrator has established a Liquidity Risk Management Oversight Committee (Committee) to perform the functions necessary to administer the Program. As part of the Program, the administrator is responsible for identifying illiquid investments and categorizing the relative liquidity of the Fund’s investments in accordance with the Liquidity Rule. Under the Program, the administrator assesses, manages, and periodically reviews the Fund’s liquidity risk, and is responsible for making certain reports to the Fund’s Board of Trustees/Directors and the Securities and Exchange Commission (SEC) regarding the liquidity of the Fund’s investments, and to notify the Board of Trustees/Directors and the SEC of certain liquidity events specified in the Liquidity Rule. The liquidity of the Fund’s portfolio investments is determined based on a number of factors including, but not limited to, relevant market, trading and investment-specific considerations under the Program.
At a meeting of the Fund’s Board of Trustees/Directors, the Committee provided a written report to the Fund’s Board of Trustees/Directors pertaining to the operation, adequacy, and effectiveness of implementation of the Program, as well as the operation of the highly liquid investment minimum (if applicable) for the period December 1, 2018 through December 31, 2019 (Review Period). The Program operated effectively during the Review Period, supporting the administrator’s ability to assess, manage and monitor Fund liquidity risk, including during periods of market volatility and net redemptions. During the Review Period, the Fund met redemption requests on a timely basis.
There can be no assurance that the Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
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Eaton Vance
Dividend Builder Fund
June 30, 2020
Officers and Trustees
Officers
Payson F. Swaffield
President
Maureen A. Gemma
Vice President, Secretary and Chief Legal Officer
James F. Kirchner
Treasurer
Richard F. Froio
Chief Compliance Officer
Trustees
William H. Park
Chairperson
Thomas E. Faust Jr.*
Mark R. Fetting
Cynthia E. Frost
George J. Gorman
Valerie A. Mosley
Helen Frame Peters
Keith Quinton
Marcus L. Smith
Susan J. Sutherland
Scott E. Wennerholm
* | Interested Trustee |
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Eaton Vance Funds
IMPORTANT NOTICES
Privacy. The Eaton Vance organization is committed to ensuring your financial privacy. Each entity listed below has adopted a privacy policy and procedures (“Privacy Program”) Eaton Vance believes is reasonably designed to protect your personal information and to govern when and with whom Eaton Vance may share your personal information.
• | At the time of opening an account, Eaton Vance generally requires you to provide us with certain information such as name, address, social security number, tax status, account numbers, and account balances. This information is necessary for us to both open an account for you and to allow us to satisfy legal requirements such as applicable anti-money laundering reviews and know-your-customer requirements. |
• | On an ongoing basis, in the normal course of servicing your account, Eaton Vance may share your information with unaffiliated third parties that perform various services for Eaton Vance and/or your account. These third parties include transfer agents, custodians, broker/dealers and our professional advisers, including auditors, accountants, and legal counsel. Eaton Vance may additionally share your personal information with our affiliates. |
• | We believe our Privacy Program is reasonably designed to protect the confidentiality of your personal information and to prevent unauthorized access to that information. |
• | We reserve the right to change our Privacy Program at any time upon proper notification to you. You may want to review our Privacy Program periodically for changes by accessing the link on our homepage: www.eatonvance.com. |
Our pledge of protecting your personal information applies to the following entities within the Eaton Vance organization: the Eaton Vance Family of Funds, Eaton Vance Management, Eaton Vance Investment Counsel, Eaton Vance Distributors, Inc., Eaton Vance Trust Company, Eaton Vance Management (International) Limited, Eaton Vance Advisers International Limited, Eaton Vance Global Advisors Limited, Eaton Vance Management’s Real Estate Investment Group, Boston Management and Research, Calvert Research and Management, and Calvert Funds. This Privacy Notice supersedes all previously issued privacy disclosures. For more information about our Privacy Program or about how your personal information may be used, please call 1-800-262-1122.
Delivery of Shareholder Documents. The Securities and Exchange Commission (SEC) permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called “householding” and it helps eliminate duplicate mailings to shareholders. Eaton Vance, or your financial intermediary, may household the mailing of your documents indefinitely unless you instruct Eaton Vance, or your financial intermediary, 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 intermediary. Your instructions that householding not apply to delivery of your Eaton Vance documents will typically be effective within 30 days of receipt by Eaton Vance or your financial intermediary.
Portfolio Holdings. Each Eaton Vance Fund and its underlying Portfolio(s) (if applicable) files a schedule of portfolio holdings on Part F to Form N-PORT with the SEC. Certain information filed on Form N-PORT may be viewed on the Eaton Vance website at www.eatonvance.com, by calling Eaton Vance at 1-800-262-1122 or in the EDGAR database on the SEC’s website at www.sec.gov.
Proxy Voting. From time to time, funds are required to vote proxies related to the securities held by the funds. The Eaton Vance Funds or their underlying Portfolios (if applicable) vote proxies according to a set of policies and procedures approved by the Funds’ and Portfolios’ Boards. You may obtain a description of these policies and procedures and information on how the Funds or Portfolios voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge, upon request, by calling 1-800-262-1122 and by accessing the SEC’s website at www.sec.gov.
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Investment Adviser
Boston Management and Research
Two International Place
Boston, MA 02110
Administrator
Eaton Vance Management
Two International Place
Boston, MA 02110
Principal Underwriter*
Eaton Vance Distributors, Inc.
Two International Place
Boston, MA 02110
(617) 482-8260
Custodian
State Street Bank and Trust Company
State Street Financial Center, One Lincoln Street
Boston, MA 02111
Transfer Agent
BNY Mellon Investment Servicing (US) Inc.
Attn: Eaton Vance Funds
P.O. Box 9653
Providence, RI 02940-9653
(800) 262-1122
Fund Offices
Two International Place
Boston, MA 02110
* | FINRA BrokerCheck. Investors may check the background of their Investment Professional by contacting the Financial Industry Regulatory Authority (FINRA). FINRA BrokerCheck is a free tool to help investors check the professional background of current and former FINRA-registered securities firms and brokers. FINRA BrokerCheck is available by calling 1-800-289-9999 and at www.FINRA.org. The FINRA BrokerCheck brochure describing this program is available to investors at www.FINRA.org. |
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7697 6.30.20
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Eaton Vance
Greater India Fund
Semiannual Report
June 30, 2020
Important Note. Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semi-annual shareholder reports will no longer be sent by mail unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (eatonvance.com/funddocuments), and you will be notified by mail each time a report is posted and provided with a website address to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you are a direct investor, you may elect to receive shareholder reports and other communications from the Fund electronically by signing up for e-Delivery at eatonvance.com/edelivery. If you own your shares through a financial intermediary (such as a broker-dealer or bank), you must contact your financial intermediary to sign up.
You may elect to receive all future Fund shareholder reports in paper free of charge. If you are a direct investor, you can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by calling 1-800-262-1122. If you own these shares through a financial intermediary, you must contact your financial intermediary or follow instructions included with this disclosure, if applicable, to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all Eaton Vance funds held directly or to all funds held through your financial intermediary, as applicable.
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Commodity Futures Trading Commission Registration. Effective December 31, 2012, the Commodity Futures Trading Commission (“CFTC”) adopted certain regulatory changes that subject registered investment companies and advisers to regulation by the CFTC if a fund invests more than a prescribed level of its assets in certain CFTC-regulated instruments (including futures, certain options and swap agreements) or markets itself as providing investment exposure to such instruments. The investment adviser has claimed an exclusion from the definition of “commodity pool operator” under the Commodity Exchange Act with respect to its management of the Fund. Accordingly, neither the Fund nor the adviser with respect to the operation of the Fund is subject to CFTC regulation. Because of its management of other strategies, the Fund’s adviser and GSAM, sub-adviser to the Fund, are registered with the CFTC as commodity pool operators. The adviser and GSAM are also registered as commodity trading advisors.
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.
This report must be preceded or accompanied by a current summary prospectus or prospectus. Before investing, investors should consider carefully the investment objective, risks, and charges and expenses of a mutual fund. This and other important information is contained in the summary prospectus and prospectus, which can be obtained from a financial intermediary. Prospective investors should read the prospectus carefully before investing. For further information, please call 1-800-262-1122.
Table of Contents
Semiannual Report June 30, 2020
Eaton Vance
Greater India Fund
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Eaton Vance
Greater India Fund
June 30, 2020
Portfolio Manager Hiren Dasani, CFA, of Goldman Sachs Asset Management, L.P. (GSAM)
% Average Annual Total Returns | Class Inception Date | Performance Inception Date | Six Months | One Year | Five Years | Ten Years | ||||||||||||||||||
Class A at NAV | 05/02/1994 | 05/02/1994 | –16.44 | % | –12.82 | % | 1.78 | % | 2.96 | % | ||||||||||||||
Class A with 5.75% Maximum Sales Charge | — | — | –21.24 | –17.84 | 0.59 | 2.35 | ||||||||||||||||||
Class C at NAV | 07/07/2006 | 05/02/1994 | –16.73 | –13.43 | 1.07 | 2.25 | ||||||||||||||||||
Class C with 1% Maximum Sales Charge | — | — | –17.56 | –14.27 | 1.07 | 2.25 | ||||||||||||||||||
Class I at NAV | 10/01/2009 | 05/02/1994 | –16.31 | –12.52 | 2.09 | 3.27 | ||||||||||||||||||
| ||||||||||||||||||||||||
MSCI India Index | — | — | –16.95 | % | –17.04 | % | 0.92 | % | 1.69 | % | ||||||||||||||
% Total Annual Operating Expense Ratios3 | Class A | Class C | Class I | |||||||||||||||||||||
1.63 | % | 2.33 | % | 1.33 | % |
Sector Allocation (% of net assets)5
Top 10 Holdings (% of net assets)5
Infosys, Ltd. | 10.8 | % | ||
Reliance Industries, Ltd. | 9.4 | |||
ICICI Bank, Ltd. | 6.8 | |||
Hindustan Unilever, Ltd. | 5.8 | |||
Bharti Airtel, Ltd. | 5.5 | |||
Maruti Suzuki India, Ltd. | 4.2 | |||
HDFC Bank, Ltd. | 3.8 | |||
Housing Development Finance Corp., Ltd. | 3.6 | |||
Axis Bank, Ltd. | 3.6 | |||
Info Edge India, Ltd. | 3.1 | |||
Total | 56.6 | % |
See Endnotes and Additional Disclosures in this report.
Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or offering price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance for periods less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to eatonvance.com.
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Eaton Vance
Greater India Fund
June 30, 2020
Endnotes and Additional Disclosures
1 | MSCI India Index is an unmanaged index of common stocks traded in the India market. MSCI indexes are net of foreign withholding taxes. Source: MSCI. MSCI data may not be reproduced or used for any other purpose. MSCI provides no warranties, has not prepared or approved this report, and has no liability hereunder. Unless otherwise stated, index returns do not reflect the effect of any applicable sales charges, commissions, expenses, taxes or leverage, as applicable. It is not possible to invest directly in an index. |
2 | Total Returns at NAV do not include applicable sales charges. If sales charges were deducted, the returns would be lower. Total Returns shown with maximum sales charge reflect the stated maximum sales charge. Unless otherwise stated, performance does not reflect the deduction of taxes on Fund distributions or redemptions of Fund shares. |
Effective September 15, 2016, Goldman Sachs Asset Management International (GSAM beginning October 19, 2017) began sub-advising the Fund. Performance prior to September 15, 2016, reflects the Fund’s performance under a former sub-adviser. |
3 | Source: Fund prospectus. The expense ratios for the current reporting period can be found in the Financial Highlights section of this report. |
4 | Fund primarily invests in an affiliated investment company (Portfolio) with the same objective(s) and policies as the Fund and may also invest directly. Unless otherwise noted, references to investments are to the aggregate holdings of the Fund and the Portfolio. |
5 | Excludes cash and cash equivalents. |
Fund profile subject to change due to active management. |
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Eaton Vance
Greater India Fund
June 30, 2020
Example: As a Fund shareholder, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases and redemption fees (if applicable); and (2) ongoing costs, including management fees; distribution and/or service fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of Fund investing and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2020 – June 30, 2020).
Actual Expenses: The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes: The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the actual Fund expense ratio and an assumed rate of return of 5% per year (before expenses), which is not the actual Fund return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption fees (if applicable). Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would be higher.
Beginning Account Value (1/1/20) | Ending Account Value (6/30/20) | Expenses Paid During Period* (1/1/20 – 6/30/20) | Annualized Expense Ratio | |||||||||||||
Actual | ||||||||||||||||
Class A | $ | 1,000.00 | $ | 835.60 | $ | 7.39 | 1.62 | % | ||||||||
Class C | $ | 1,000.00 | $ | 832.70 | $ | 10.62 | 2.33 | % | ||||||||
Class I | $ | 1,000.00 | $ | 836.90 | $ | 5.98 | 1.31 | % | ||||||||
Hypothetical | ||||||||||||||||
(5% return per year before expenses) | ||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,016.80 | $ | 8.12 | 1.62 | % | ||||||||
Class C | $ | 1,000.00 | $ | 1,013.30 | $ | 11.66 | 2.33 | % | ||||||||
Class I | $ | 1,000.00 | $ | 1,018.30 | $ | 6.57 | 1.31 | % |
* | Expenses are equal to the Fund’s annualized expense ratio for the indicated Class, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). The Example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on December 31, 2019. The Example reflects the expenses of both the Fund and the Portfolio. |
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Eaton Vance
Greater India Fund
June 30, 2020
Statement of Assets and Liabilities (Unaudited)
Assets | June 30, 2020 | |||
Investment in Greater India Portfolio, at value (identified cost, $145,189,269) | $ | 172,021,185 | ||
Receivable for Fund shares sold | 111,340 | |||
Total assets | $ | 172,132,525 | ||
Liabilities |
| |||
Payable for Fund shares redeemed | $ | 116,807 | ||
Payable to affiliates: |
| |||
Administration fee | 20,840 | |||
Distribution and service fees | 35,741 | |||
Trustees’ fees | 125 | |||
Accrued expenses | 63,603 | |||
Total liabilities | $ | 237,116 | ||
Net Assets | $ | 171,895,409 | ||
Sources of Net Assets |
| |||
Paid-in capital | $ | 150,161,093 | ||
Distributable earnings | 21,734,316 | |||
Total | $ | 171,895,409 | ||
Class A Shares | ||||
Net Assets | $ | 121,546,605 | ||
Shares Outstanding | 4,240,742 | |||
Net Asset Value and Redemption Price Per Share | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 28.66 | ||
Maximum Offering Price Per Share | ||||
(100 ÷ 94.25 of net asset value per share) | $ | 30.41 | ||
Class C Shares |
| |||
Net Assets | $ | 7,759,834 | ||
Shares Outstanding | 318,816 | |||
Net Asset Value and Offering Price Per Share* | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 24.34 | ||
Class I Shares |
| |||
Net Assets | $ | 42,588,970 | ||
Shares Outstanding | 1,446,147 | |||
Net Asset Value, Offering Price and Redemption Price Per Share | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 29.45 |
On sales of $50,000 or more, the offering price of Class A shares is reduced.
* | Redemption price per share is equal to the net asset value less any applicable contingent deferred sales charge. |
5 | See Notes to Financial Statements. |
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Eaton Vance
Greater India Fund
June 30, 2020
Statement of Operations (Unaudited)
Investment Income | Six Months Ended June 30, 2020 | |||
Dividends allocated from Portfolio (net of foreign taxes, $67,290) | $ | 783,941 | ||
Interest allocated from Portfolio | 2,440 | |||
Expenses allocated from Portfolio | (863,671 | ) | ||
Total investment loss from Portfolio | $ | (77,290 | ) | |
Expenses |
| |||
Administration fee | $ | 134,700 | ||
Distribution and service fees |
| |||
Class A | 199,217 | |||
Class C | 46,238 | |||
Trustees’ fees and expenses | 250 | |||
Custodian fee | 10,132 | |||
Transfer and dividend disbursing agent fees | 112,351 | |||
Legal and accounting services | 15,327 | |||
Printing and postage | 16,828 | |||
Registration fees | 25,355 | |||
Miscellaneous | 4,596 | |||
Total expenses | $ | 564,994 | ||
Net investment loss | $ | (642,284 | ) | |
Realized and Unrealized Gain (Loss) from Portfolio |
| |||
Net realized gain (loss) — |
| |||
Investment transactions | $ | (1,467,984 | ) | |
Financial futures contracts | 1,057,586 | |||
Foreign currency transactions | (85,229 | ) | ||
Net realized loss | $ | (495,627 | ) | |
Change in unrealized appreciation (depreciation) — |
| |||
Investments | $ | (33,457,493 | ) | |
Financial futures contracts | (64,805 | ) | ||
Foreign currency | 1,760 | |||
Net change in unrealized appreciation (depreciation) | $ | (33,520,538 | ) | |
Net realized and unrealized loss | $ | (34,016,165 | ) | |
Net decrease in net assets from operations | $ | (34,658,449 | ) |
6 | See Notes to Financial Statements. |
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Eaton Vance
Greater India Fund
June 30, 2020
Statements of Changes in Net Assets
Increase (Decrease) in Net Assets | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
From operations — |
| |||||||
Net investment loss | $ | (642,284 | ) | $ | (1,202,942 | ) | ||
Net realized gain (loss) | (495,627 | ) | 2,233,612 | |||||
Net change in unrealized appreciation (depreciation) | (33,520,538 | ) | 19,937,594 | |||||
Net increase (decrease) in net assets from operations | $ | (34,658,449 | ) | $ | 20,968,264 | |||
Distributions to shareholders — |
| |||||||
Class A | $ | — | $ | (4,591,828 | ) | |||
Class B | — | (8,912 | ) | |||||
Class C | — | (433,321 | ) | |||||
Class I | — | (1,059,604 | ) | |||||
Total distributions to shareholders | $ | — | $ | (6,093,665 | ) | |||
Transactions in shares of beneficial interest — |
| |||||||
Proceeds from sale of shares |
| |||||||
Class A | $ | 4,159,871 | $ | 8,144,780 | ||||
Class B | — | 736 | ||||||
Class C | 328,076 | 1,654,639 | ||||||
Class I | 37,874,634 | 17,577,702 | ||||||
Net asset value of shares issued to shareholders in payment of distributions declared |
| |||||||
Class A | — | 4,145,063 | ||||||
Class B | — | 8,067 | ||||||
Class C | — | 376,242 | ||||||
Class I | — | 864,768 | ||||||
Cost of shares redeemed |
| |||||||
Class A | (19,209,309 | ) | (22,105,068 | ) | ||||
Class B | — | (50,711 | ) | |||||
Class C | (1,804,419 | ) | (4,331,484 | ) | ||||
Class I | (30,789,182 | ) | (17,968,399 | ) | ||||
Net asset value of shares converted(1) |
| |||||||
Class A | 649,475 | 8,818,338 | ||||||
Class B | — | (564,214 | ) | |||||
Class C | (649,475 | ) | (8,254,124 | ) | ||||
Net decrease in net assets from Fund share transactions | $ | (9,440,329 | ) | $ | (11,683,665 | ) | ||
Net increase (decrease) in net assets | $ | (44,098,778 | ) | $ | 3,190,934 | |||
Net Assets | ||||||||
At beginning of period | $ | 215,994,187 | $ | 212,803,253 | ||||
At end of period | $ | 171,895,409 | $ | 215,994,187 |
(1) | Includes the conversion of Class B to Class A shares at the close of business on August 15, 2019 upon the termination of Class B. |
7 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Greater India Fund
June 30, 2020
Financial Highlights
Class A | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 34.300 | $ | 32.020 | $ | 36.830 | $ | 26.300 | $ | 25.770 | $ | 27.310 | ||||||||||||
Income (Loss) From Operations | ||||||||||||||||||||||||
Net investment income (loss)(1) | $ | (0.110 | ) | $ | (0.188 | ) | $ | (0.150 | ) | $ | 0.016 | $ | (0.200 | ) | $ | (0.245 | ) | |||||||
Net realized and unrealized gain (loss) | (5.530 | ) | 3.424 | (4.284 | ) | 11.737 | 0.878 | (1.090 | ) | |||||||||||||||
Total income (loss) from operations | $ | (5.640 | ) | $ | 3.236 | $ | (4.434 | ) | $ | 11.753 | $ | 0.678 | $ | (1.335 | ) | |||||||||
Less Distributions | ||||||||||||||||||||||||
From net investment income | $ | — | $ | — | $ | (0.376 | ) | $ | (1.223 | ) | $ | (0.148 | ) | $ | (0.205 | ) | ||||||||
From net realized gain | — | (0.956 | ) | — | — | — | — | |||||||||||||||||
Total distributions | $ | — | $ | (0.956 | ) | $ | (0.376 | ) | $ | (1.223 | ) | $ | (0.148 | ) | $ | (0.205 | ) | |||||||
Net asset value — End of period | $ | 28.660 | $ | 34.300 | $ | 32.020 | $ | 36.830 | $ | 26.300 | $ | 25.770 | ||||||||||||
Total Return(2) | (16.44 | )%(3) | 10.46 | % | (12.13 | )% | 44.80 | % | 2.64 | %(4) | (4.96 | )%(4) | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 121,547 | $ | 163,335 | $ | 152,967 | $ | 192,016 | $ | 149,950 | $ | 172,386 | ||||||||||||
Ratios (as a percentage of average daily net assets):(5) | ||||||||||||||||||||||||
Expenses(6) | 1.62 | %(7) | 1.63 | % | 1.62 | % | 1.68 | % | 1.88 | %(4) | 1.88 | %(4) | ||||||||||||
Net investment income (loss) | (0.74 | )%(7) | (0.58 | )% | (0.44 | )% | 0.05 | % | (0.75 | )% | (0.88 | )% | ||||||||||||
Portfolio Turnover of the Portfolio | 17 | %(3) | 21 | % | 29 | % | 25 | % | 91 | % | 30 | % |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges. |
(3) | Not annualized. |
(4) | The investment adviser and sub-adviser of the Portfolio reimbursed certain operating expenses (equal to 0.02% and 0.02% of average daily net assets for the years ended December 31, 2016 and 2015, respectively). Absent this reimbursement, total return would be lower. |
(5) | Includes the Fund’s share of the Portfolio’s allocated expenses. |
(6) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(7) | Annualized. |
8 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Greater India Fund
June 30, 2020
Financial Highlights — continued
Class C | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 29.230 | $ | 27.620 | $ | 32.050 | $ | 23.020 | $ | 22.580 | $ | 24.120 | ||||||||||||
Income (Loss) From Operations | ||||||||||||||||||||||||
Net investment loss(1) | $ | (0.184 | ) | $ | (0.363 | ) | $ | (0.334 | ) | $ | (0.186 | ) | $ | (0.336 | ) | $ | (0.383 | ) | ||||||
Net realized and unrealized gain (loss) | (4.706 | ) | 2.929 | (3.720 | ) | 10.247 | 0.776 | (0.954 | ) | |||||||||||||||
Total income (loss) from operations | $ | (4.890 | ) | $ | 2.566 | $ | (4.054 | ) | $ | 10.061 | $ | 0.440 | $ | (1.337 | ) | |||||||||
Less Distributions | ||||||||||||||||||||||||
From net investment income | $ | — | $ | — | $ | (0.376 | ) | $ | (1.031 | ) | $ | — | $ | (0.203 | ) | |||||||||
From net realized gain | — | (0.956 | ) | — | — | — | — | |||||||||||||||||
Total distributions | $ | — | $ | (0.956 | ) | $ | (0.376 | ) | $ | (1.031 | ) | $ | — | $ | (0.203 | ) | ||||||||
Net asset value — End of period | $ | 24.340 | $ | 29.230 | $ | 27.620 | $ | 32.050 | $ | 23.020 | $ | 22.580 | ||||||||||||
Total Return(2) | (16.73 | )%(3) | 9.69 | % | (12.76 | )% | 43.81 | % | 1.95 | %(4) | (5.63 | )%(4) | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 7,760 | $ | 11,898 | $ | 21,891 | $ | 30,195 | $ | 22,335 | $ | 28,276 | ||||||||||||
Ratios (as a percentage of average daily net assets):(5) | ||||||||||||||||||||||||
Expenses(6) | 2.33 | %(7) | 2.33 | % | 2.32 | % | 2.38 | % | 2.58 | %(4) | 2.58 | %(4) | ||||||||||||
Net investment loss | (1.46 | )%(7) | (1.30 | )% | (1.14 | )% | (0.65 | )% | (1.44 | )% | (1.56 | )% | ||||||||||||
Portfolio Turnover of the Portfolio | 17 | %(3) | 21 | % | 29 | % | 25 | % | 91 | % | 30 | % |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges. |
(3) | Not annualized. |
(4) | The investment adviser and sub-adviser of the Portfolio reimbursed certain operating expenses (equal to 0.02% and 0.02% of average daily net assets for the years ended December 31, 2016 and 2015, respectively). Absent this reimbursement, total return would be lower. |
(5) | Includes the Fund’s share of the Portfolio’s allocated expenses. |
(6) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(7) | Annualized. |
9 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Greater India Fund
June 30, 2020
Financial Highlights — continued
Class I | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 35.190 | $ | 32.730 | $ | 37.520 | $ | 26.770 | $ | 26.230 | $ | 27.710 | ||||||||||||
Income (Loss) From Operations | ||||||||||||||||||||||||
Net investment income (loss)(1) | $ | (0.065 | ) | $ | (0.092 | ) | $ | (0.047 | ) | $ | 0.140 | $ | (0.126 | ) | $ | (0.166 | ) | |||||||
Net realized and unrealized gain (loss) | (5.675 | ) | 3.508 | (4.367 | ) | 11.936 | 0.900 | (1.108 | ) | |||||||||||||||
Total income (loss) from operations | $ | (5.740 | ) | $ | 3.416 | $ | (4.414 | ) | $ | 12.076 | $ | 0.774 | $ | (1.274 | ) | |||||||||
Less Distributions | ||||||||||||||||||||||||
From net investment income | $ | — | $ | — | $ | (0.376 | ) | $ | (1.326 | ) | $ | (0.234 | ) | $ | (0.206 | ) | ||||||||
From net realized gain | — | (0.956 | ) | — | — | — | — | |||||||||||||||||
Total distributions | $ | — | $ | (0.956 | ) | $ | (0.376 | ) | $ | (1.326 | ) | $ | (0.234 | ) | $ | (0.206 | ) | |||||||
Net asset value — End of period | $ | 29.450 | $ | 35.190 | $ | 32.730 | $ | 37.520 | $ | 26.770 | $ | 26.230 | ||||||||||||
Total Return(2) | (16.31 | )%(3) | 10.79 | % | (11.85 | )% | 45.22 | % | 2.97 | %(4) | (4.70 | )%(4) | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 42,589 | $ | 40,761 | $ | 37,330 | $ | 48,595 | $ | 26,866 | $ | 29,959 | ||||||||||||
Ratios (as a percentage of average daily net assets):(5) | ||||||||||||||||||||||||
Expenses(6) | 1.31 | %(7) | 1.33 | % | 1.32 | % | 1.38 | % | 1.58 | %(4) | 1.58 | %(4) | ||||||||||||
Net investment income (loss) | (0.43 | )%(7) | (0.27 | )% | (0.14 | )% | 0.41 | % | (0.46 | )% | (0.59 | )% | ||||||||||||
Portfolio Turnover of the Portfolio | 17 | %(3) | 21 | % | 29 | % | 25 | % | 91 | % | 30 | % |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested. |
(3) | Not annualized. |
(4) | The investment adviser and sub-adviser of the Portfolio reimbursed certain operating expenses (equal to 0.02% and 0.02% of average daily net assets for the years ended December 31, 2016 and 2015, respectively). Absent this reimbursement, total return would be lower. |
(5) | Includes the Fund’s share of the Portfolio’s allocated expenses. |
(6) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(7) | Annualized. |
10 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Greater India Fund
June 30, 2020
Notes to Financial Statements (Unaudited)
1 Significant Accounting Policies
Eaton Vance Greater India Fund (the Fund) is a non-diversified series of Eaton Vance Special Investment Trust (the Trust). The Trust is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company. The Fund offers three classes of shares. Class A shares are generally sold subject to a sales charge imposed at time of purchase. Class C shares are sold at net asset value and are generally subject to a contingent deferred sales charge (see Note 5). Effective January 25, 2019, Class C shares generally automatically convert to Class A shares ten years after their purchase as described in the Fund’s prospectus. Class I shares are sold at net asset value and are not subject to a sales charge. Each class represents a pro-rata interest in the Fund, but votes separately on class-specific matters and (as noted below) is subject to different expenses. Realized and unrealized gains and losses and net investment income and losses, other than class-specific expenses, are allocated daily to each class of shares based on the relative net assets of each class to the total net assets of the Fund. Each class of shares differs in its distribution plan and certain other class-specific expenses. The Fund invests all of its investable assets in interests in Greater India Portfolio (the Portfolio), a Massachusetts business trust, having the same investment objective and policies as the Fund. The value of the Fund’s investment in the Portfolio reflects the Fund’s proportionate interest in the net assets of the Portfolio (99.9% at June 30, 2020). The performance of the Fund is directly affected by the performance of the Portfolio. The financial statements of the Portfolio, including the portfolio of investments, are included elsewhere in this report and should be read in conjunction with the Fund’s financial statements.
The following is a summary of significant accounting policies of the Fund. The policies are in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The Fund is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946.
A Investment Valuation — Valuation of securities by the Portfolio is discussed in Note 1A of the Portfolio’s Notes to Financial Statements, which are included elsewhere in this report.
B Income — The Fund’s net investment income or loss consists of the Fund’s pro-rata share of the net investment income or loss of the Portfolio, less all actual and accrued expenses of the Fund.
C Federal and Other Taxes — The Fund’s policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its net investment income, and all or substantially all of its net realized capital gains. Accordingly, no provision for federal income or excise tax is necessary.
In addition to the requirements of the Internal Revenue Code, the Fund may also be required to recognize its pro-rata share of the capital gains taxes incurred by the Portfolio. In doing so, the daily net asset value would reflect the Fund’s pro-rata share of the estimated reserve for such taxes incurred by the Portfolio.
As of June 30, 2020, the Fund had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. The Fund files a U.S. federal income tax return annually after its fiscal year-end, which is subject to examination by the Internal Revenue Service for a period of three years from the date of filing.
D Expenses — The majority of expenses of the Trust are directly identifiable to an individual fund. Expenses which are not readily identifiable to a specific fund are allocated taking into consideration, among other things, the nature and type of expense and the relative size of the funds.
E Use of Estimates — The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.
F Indemnifications — Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund. Under Massachusetts law, if certain conditions prevail, shareholders of a Massachusetts business trust (such as the Trust) could be deemed to have personal liability for the obligations of the Trust. However, the Trust’s Declaration of Trust contains an express disclaimer of liability on the part of Fund shareholders and the By-laws provide that the Trust shall assume, upon request by the shareholder, the defense on behalf of any Fund shareholders. Moreover, the By-laws also provide for indemnification out of Fund property of any shareholder held personally liable solely by reason of being or having been a shareholder for all loss or expense arising from such liability. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.
G Other — Investment transactions are accounted for on a trade date basis.
H Interim Financial Statements — The interim financial statements relating to June 30, 2020 and for the six months then ended have not been audited by an independent registered public accounting firm, but in the opinion of the Fund’s management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial statements.
11 |
Table of Contents
Eaton Vance
Greater India Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
2 Distributions to Shareholders and Income Tax Information
It is the present policy of the Fund to make at least one distribution annually (normally in December) of all or substantially all of its net investment income and to distribute annually all or substantially all of its net realized capital gains. Distributions to shareholders are recorded on the ex-dividend date. Distributions are declared separately for each class of shares. Shareholders may reinvest income and capital gain distributions in additional shares of the same class of the Fund at the net asset value as of the ex-dividend date or, at the election of the shareholder, receive distributions in cash. Distributions to shareholders are determined in accordance with income tax regulations, which may differ from U.S. GAAP. As required by U.S. GAAP, only distributions in excess of tax basis earnings and profits are 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. For tax purposes, distributions from short-term capital gains are considered to be from ordinary income.
3 Investment Adviser Fee and Other Transactions with Affiliates
The investment adviser fee is earned by Boston Management and Research (BMR), a subsidiary of Eaton Vance Management (EVM), as compensation for management and investment advisory services rendered to the Fund. The fee is computed at an annual rate of 0.85% of the Fund’s average daily net assets that are not invested in other investment companies for which BMR or its affiliates serve as investment adviser and receive an advisory fee (“Investable Assets”) up to $500 million and is payable monthly. On Investable Assets of $500 million and over, the annual fee is reduced. Pursuant to a sub-advisory agreement, BMR pays Goldman Sachs Asset Management, L.P. a portion of its investment adviser fee for sub-advisory services provided to the Fund. For the six months ended June 30, 2020, the Fund incurred no investment adviser fee on Investable Assets. To the extent the Fund’s assets are invested in the Portfolio, the Fund is allocated its share of the Portfolio’s investment adviser fee. The Portfolio has engaged BMR to render investment advisory services. See Note 2 of the Portfolio’s Notes to Financial Statements which are included elsewhere in this report. The administration fee is earned by EVM as compensation for administering the business affairs of the Fund and is computed at an annual rate of 0.15% of the Fund’s average daily net assets. For the six months ended June 30, 2020, the administration fee amounted to $134,700.
EVM provides sub-transfer agency and related services to the Fund pursuant to a Sub-Transfer Agency Support Services Agreement. For the six months ended June 30, 2020, EVM earned $16,402 from the Fund pursuant to such agreement, which is included in transfer and dividend disbursing agent fees on the Statement of Operations. The Fund was informed that Eaton Vance Distributors, Inc. (EVD), an affiliate of EVM and the Fund’s principal underwriter, received $7,210 as its portion of the sales charge on sales of Class A shares for the six months ended June 30, 2020. EVD also received distribution and service fees from Class A and Class C shares (see Note 4) and contingent deferred sales charges (see Note 5).
Trustees and officers of the Fund who are members of EVM’s or BMR’s organizations receive remuneration for their services to the Fund out of the investment adviser fee and administration fee. Certain officers and Trustees of the Fund and the Portfolio are officers of the above organizations.
4 Distribution Plans
The Fund has in effect a distribution plan for Class A shares (Class A Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class A Plan, the Fund pays EVD a distribution and service fee of 0.30% per annum of its average daily net assets attributable to Class A shares for distribution services and facilities provided to the Fund by EVD, as well as for personal services and/or the maintenance of shareholder accounts. Distribution and service fees paid or accrued to EVD for the six months ended June 30, 2020 amounted to $199,217 for Class A shares.
The Fund also has in effect a distribution plan for Class C shares (Class C Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class C Plan, the Fund pays EVD amounts equal to 0.75% per annum of its average daily net assets attributable to Class C shares for providing ongoing distribution services and facilities to the Fund. For the six months ended June 30, 2020, the Fund paid or accrued to EVD $34,678 for Class C shares.
Pursuant to the Class C Plan, the Fund also makes payments of service fees to EVD, financial intermediaries and other persons in amounts equal to 0.25% per annum of its average daily net assets attributable to that class. Service fees paid or accrued are for personal services and/or the maintenance of shareholder accounts. They are separate and distinct from the sales commissions and distribution fees payable to EVD. Service fees paid or accrued for the six months ended June 30, 2020 amounted to $11,560 for Class C shares.
Distribution and service fees are subject to the limitations contained in the Financial Industry Regulatory Authority Rule 2341(d).
5 Contingent Deferred Sales Charges
A contingent deferred sales charge (CDSC) of 1% generally is imposed on redemptions of Class C shares made within 12 months of purchase. Class A shares may be subject to a 1% CDSC if redeemed within 18 months of purchase (depending on the circumstances of purchase). Generally, the CDSC is based upon the lower of the net asset value at date of redemption or date of purchase. No charge is levied on shares acquired by reinvestment of dividends or capital gain distributions. For the six months ended June 30, 2020, the Fund was informed that EVD received approximately $1,000 of CDSCs paid by Class C shareholders and no CDSCs paid by Class A shareholders.
12 |
Table of Contents
Eaton Vance
Greater India Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
6 Investment Transactions
For the six months ended June 30, 2020, increases and decreases in the Fund’s investment in the Portfolio aggregated $33,071,744 and $43,767,622, respectively.
7 Shares of Beneficial Interest
The Fund’s Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value). Such shares may be issued in a number of different series (such as the Fund) and classes. Transactions in Fund shares were as follows:
Class A | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 142,937 | 251,172 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | — | 135,062 | ||||||
Redemptions | (685,622 | ) | (680,177 | ) | ||||
Converted from Class B shares | — | 18,163 | ||||||
Converted from Class C shares | 21,788 | 260,718 | ||||||
Net decrease | (520,897 | ) | (15,062 | ) | ||||
Class B | Year Ended December 31, 2019(1) | |||||||
Sales | 28 | |||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | 305 | |||||||
Redemptions | (1,747 | ) | ||||||
Converted to Class A shares | (20,705 | ) | ||||||
Net decrease | (22,119 | ) | ||||||
Class C | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 12,783 | 58,720 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | — | 14,344 | ||||||
Redemptions | (75,390 | ) | (155,685 | ) | ||||
Converted to Class A shares | (25,605 | ) | (302,832 | ) | ||||
Net decrease | (88,212 | ) | (385,453 | ) |
13 |
Table of Contents
Eaton Vance
Greater India Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
Class I | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 1,419,276 | 529,425 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | — | 27,497 | ||||||
Redemptions | (1,131,315 | ) | (539,364 | ) | ||||
Net increase | 287,961 | 17,558 |
(1) | At the close of business on August 15, 2019, Class B shares were converted into Class A and Class B was terminated. |
14 |
Table of Contents
Greater India Portfolio
June 30, 2020
Portfolio of Investments (Unaudited)
Common Stocks — 97.2% |
| |||||||
Security | Shares | Value | ||||||
India — 97.2% | ||||||||
Airlines — 0.5% | ||||||||
InterGlobe Aviation, Ltd.(1) | 69,143 | $ | 904,195 | |||||
$ | 904,195 | |||||||
Auto Components — 1.0% | ||||||||
MRF, Ltd. | 1,871 | $ | 1,667,075 | |||||
$ | 1,667,075 | |||||||
Automobiles — 4.4% | ||||||||
Hero MotoCorp, Ltd. | 12,294 | $ | 416,127 | |||||
Maruti Suzuki India, Ltd. | 93,513 | 7,228,738 | ||||||
$ | 7,644,865 | |||||||
Banks — 16.5% | ||||||||
Axis Bank, Ltd. | 1,140,167 | $ | 6,177,895 | |||||
HDFC Bank, Ltd. | 461,207 | 6,486,153 | ||||||
ICICI Bank, Ltd. | 2,516,762 | 11,751,874 | ||||||
Kotak Mahindra Bank, Ltd. | 218,246 | 3,915,742 | ||||||
$ | 28,331,664 | |||||||
Construction & Engineering — 1.5% | ||||||||
Voltas, Ltd. | 362,567 | $ | 2,620,867 | |||||
$ | 2,620,867 | |||||||
Construction Materials — 3.1% | ||||||||
Dalmia Bharat, Ltd. | 144,462 | $ | 1,304,757 | |||||
UltraTech Cement, Ltd. | 78,030 | 4,030,663 | ||||||
$ | 5,335,420 | |||||||
Consumer Finance — 1.1% | ||||||||
Muthoot Finance, Ltd. | 124,777 | $ | 1,803,233 | |||||
$ | 1,803,233 | |||||||
Electrical Equipment — 0.1% | ||||||||
Graphite India, Ltd. | 83,106 | $ | 203,147 | |||||
$ | 203,147 | |||||||
Food & Staples Retailing — 2.4% | ||||||||
Avenue Supermarts, Ltd.(1)(2) | 132,905 | $ | 4,075,099 | |||||
$ | 4,075,099 |
Security | Shares | Value | ||||||
Food Products — 3.2% | ||||||||
Nestle India, Ltd. | 14,010 | $ | 3,176,512 | |||||
Tata Consumer Products, Ltd. | 435,715 | 2,240,835 | ||||||
$ | 5,417,347 | |||||||
Hotels, Restaurants & Leisure — 1.1% | ||||||||
Jubilant FoodWorks, Ltd. | 84,027 | $ | 1,924,391 | |||||
$ | 1,924,391 | |||||||
Household Durables — 2.9% | ||||||||
Crompton Greaves Consumer Electricals, Ltd. | 863,283 | $ | 2,723,082 | |||||
Whirlpool of India, Ltd. | 81,838 | 2,242,900 | ||||||
$ | 4,965,982 | |||||||
Household Products — 5.8% | ||||||||
Hindustan Unilever, Ltd. | 345,269 | $ | 9,968,254 | |||||
$ | 9,968,254 | |||||||
Insurance — 3.4% | ||||||||
ICICI Lombard General Insurance Co., Ltd.(1) | 150,940 | $ | 2,540,416 | |||||
SBI Life Insurance Co., Ltd.(1)(2) | 314,097 | 3,360,058 | ||||||
$ | 5,900,474 | |||||||
Interactive Media & Services — 3.1% | ||||||||
Info Edge India, Ltd. | 144,809 | $ | 5,284,609 | |||||
$ | 5,284,609 | |||||||
IT Services — 15.1% | ||||||||
HCL Technologies, Ltd. | 666,868 | $ | 4,922,751 | |||||
Infosys, Ltd. | 1,915,915 | 18,567,106 | ||||||
Infosys, Ltd. ADR | 44,140 | 426,392 | ||||||
Larsen & Toubro Infotech, Ltd.(1) | 78,423 | 2,032,968 | ||||||
$ | 25,949,217 | |||||||
Life Sciences Tools & Services — 2.8% | ||||||||
Divi’s Laboratories, Ltd. | 158,024 | $ | 4,768,926 | |||||
$ | 4,768,926 | |||||||
Machinery — 0.9% | ||||||||
AIA Engineering, Ltd. | 72,005 | $ | 1,528,387 | |||||
$ | 1,528,387 |
15 | See Notes to Financial Statements. |
Table of Contents
Greater India Portfolio
June 30, 2020
Portfolio of Investments (Unaudited) — continued
Security | Shares | Value | ||||||
Multiline Retail — 0.5% | ||||||||
Trent, Ltd. | 113,576 | $ | 935,061 | |||||
$ | 935,061 | |||||||
Oil, Gas & Consumable Fuels — 9.4% | ||||||||
Reliance Industries, Ltd. | 710,386 | $ | 16,190,975 | |||||
$ | 16,190,975 | |||||||
Personal Products — 1.5% | ||||||||
Marico, Ltd. | 538,582 | $ | 2,516,814 | |||||
$ | 2,516,814 | |||||||
Pharmaceuticals — 5.9% | ||||||||
Abbott India, Ltd. | 20,969 | $ | 4,378,450 | |||||
Ipca Laboratories, Ltd. | 73,861 | 1,637,071 | ||||||
Lupin, Ltd. | 197,697 | 2,384,059 | ||||||
Torrent Pharmaceuticals, Ltd. | 58,307 | 1,831,736 | ||||||
$ | 10,231,316 | |||||||
Real Estate Management & Development — 1.9% | ||||||||
Godrej Properties, Ltd.(2) | 117,693 | $ | 1,347,632 | |||||
Oberoi Realty, Ltd. | 214,170 | 1,031,198 | ||||||
Prestige Estates Projects, Ltd. | 325,464 | 905,542 | ||||||
$ | 3,284,372 | |||||||
Thrifts & Mortgage Finance — 3.6% | ||||||||
Housing Development Finance Corp., Ltd. | 267,424 | $ | 6,240,678 | |||||
$ | 6,240,678 | |||||||
Wireless Telecommunication Services — 5.5% | ||||||||
Bharti Airtel, Ltd.(2) | 1,271,051 | $ | 9,446,805 | |||||
$ | 9,446,805 | |||||||
Total India |
| $ | 167,139,173 | |||||
Total Common Stocks |
| $ | 167,139,173 | |||||
Total Investments — 97.2% |
| $ | 167,139,173 | |||||
Other Assets, Less Liabilities — 2.8% |
| $ | 4,883,656 | |||||
Net Assets — 100.0% |
| $ | 172,022,829 |
The percentage shown for each investment category in the Portfolio of Investments is based on net assets.
(1) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be sold in certain transactions in reliance on an exemption from registration (normally to qualified institutional buyers). At June 30, 2020, the aggregate value of these securities is $12,912,736 or 7.5% of the Portfolio’s net assets. |
(2) | Non-income producing security. |
16 | See Notes to Financial Statements. |
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Greater India Portfolio
June 30, 2020
Portfolio of Investments (Unaudited) — continued
Futures Contracts | ||||||||||||||||
Description | Number of Contracts | Position | Expiration Date | Notional Amount | Value/Unrealized Appreciation (Depreciation) | |||||||||||
Equity Futures |
| |||||||||||||||
SGX CNX Nifty Index | 184 | Long | 7/30/20 | $ | 3,781,200 | $ | (64,806 | ) | ||||||||
$ | (64,806 | ) |
Abbreviations:
ADR | – | American Depositary Receipt |
17 | See Notes to Financial Statements. |
Table of Contents
Greater India Portfolio
June 30, 2020
Statement of Assets and Liabilities (Unaudited)
Assets | June 30, 2020 | |||
Unaffiliated investments, at value (identified cost, $140,309,746) | $ | 167,139,173 | ||
Cash | 3,651,229 | |||
Deposits for derivatives collateral — financial futures contracts | 425,040 | |||
Foreign currency, at value (identified cost, $872,333) | 873,134 | |||
Dividends receivable | 270,056 | |||
Receivable for investments sold | 114,610 | |||
Receivable for variation margin on open financial futures contracts | 125,250 | |||
Receivable for foreign taxes | 43,182 | |||
Total assets | $ | 172,641,674 | ||
Liabilities | ||||
Payable for investments purchased | $ | 412,850 | ||
Payable to affiliates: | ||||
Investment adviser fee | 118,222 | |||
Trustees’ fees | 2,780 | |||
Accrued expenses | 84,993 | |||
Total liabilities | $ | 618,845 | ||
Net Assets applicable to investors’ interest in Portfolio | $ | 172,022,829 |
18 | See Notes to Financial Statements. |
Table of Contents
Greater India Portfolio
June 30, 2020
Statement of Operations (Unaudited)
Investment Income | Six Months Ended June 30, 2020 | |||
Dividends (net of foreign taxes, $67,291) | $ | 783,948 | ||
Interest | 2,440 | |||
Total investment income | $ | 786,388 | ||
Expenses | ||||
Investment adviser fee | $ | 763,813 | ||
Trustees’ fees and expenses | 5,520 | |||
Custodian fee | 49,881 | |||
Legal and accounting services | 40,533 | |||
Miscellaneous | 3,931 | |||
Total expenses | $ | 863,678 | ||
Net investment loss | $ | (77,290 | ) | |
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) — | ||||
Investment transactions | $ | (1,467,998 | ) | |
Financial futures contracts | 1,057,596 | |||
Foreign currency transactions | (85,230 | ) | ||
Net realized loss | $ | (495,632 | ) | |
Change in unrealized appreciation (depreciation) — | ||||
Investments | $ | (33,457,800 | ) | |
Financial futures contracts | (64,806 | ) | ||
Foreign currency | 1,760 | |||
Net change in unrealized appreciation (depreciation) | $ | (33,520,846 | ) | |
Net realized and unrealized loss | $ | (34,016,478 | ) | |
Net decrease in net assets from operations | $ | (34,093,768 | ) |
19 | See Notes to Financial Statements. |
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Greater India Portfolio
June 30, 2020
Statements of Changes in Net Assets
Increase (Decrease) in Net Assets | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
From operations — | ||||||||
Net investment income (loss) | $ | (77,290 | ) | $ | 147,609 | |||
Net realized gain (loss) | (495,632 | ) | 2,233,635 | |||||
Net change in unrealized appreciation (depreciation) | (33,520,846 | ) | 19,937,767 | |||||
Net increase (decrease) in net assets from operations | $ | (34,093,768 | ) | $ | 22,319,011 | |||
Capital transactions — | ||||||||
Contributions | $ | 33,071,744 | $ | 12,649,694 | ||||
Withdrawals | (43,767,622 | ) | (31,342,570 | ) | ||||
Net decrease in net assets from capital transactions | $ | (10,695,878 | ) | $ | (18,692,876 | ) | ||
Net increase (decrease) in net assets | $ | (44,789,646 | ) | $ | 3,626,135 | |||
Net Assets |
| |||||||
At beginning of period | $ | 216,812,475 | $ | 213,186,340 | ||||
At end of period | $ | 172,022,829 | $ | 216,812,475 |
20 | See Notes to Financial Statements. |
Table of Contents
Greater India Portfolio
June 30, 2020
Financial Highlights
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
Ratios/Supplemental Data | 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||
Ratios (as a percentage of average daily net assets): | ||||||||||||||||||||||||
Expenses(1) | 0.96 | %(2) | 0.98 | % | 0.98 | % | 0.98 | % | 1.19 | % | 1.23 | % | ||||||||||||
Net investment income (loss) | (0.09 | )%(2) | 0.07 | % | 0.19 | % | 0.76 | % | (0.06 | )% | (0.23 | )% | ||||||||||||
Portfolio Turnover | 17 | %(3) | 21 | % | 29 | % | 25 | % | 91 | % | 30 | % | ||||||||||||
Total Return | (16.15 | )%(3) | 11.17 | % | (11.57 | )% | 45.78 | % | 3.35 | % | (4.33 | )% | ||||||||||||
Net assets, end of period (000’s omitted) | $ | 172,023 | $ | 216,812 | $ | 213,186 | $ | 273,437 | $ | 203,663 | $ | 238,167 |
(1) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(2) | Annualized. |
(3) | Not annualized. |
21 | See Notes to Financial Statements. |
Table of Contents
Greater India Portfolio
June 30, 2020
Notes to Financial Statements (Unaudited)
1 Significant Accounting Policies
Greater India Portfolio (the Portfolio) is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as a non-diversified, open-end management investment company. The Portfolio’s investment objective is to seek long-term capital appreciation. The Declaration of Trust permits the Trustees to issue interests in the Portfolio. At June 30, 2020, Eaton Vance Greater India Fund held a 99.9% interest in the Portfolio.
The following is a summary of significant accounting policies of the Portfolio. The policies are in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The Portfolio is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946.
A Investment Valuation — The following methodologies are used to determine the market value or fair value of investments.
Equity Securities. Equity securities listed on a U.S. securities exchange generally are valued at the last sale or closing price on the day of valuation or, if no sales took place on such date, at the mean between the closing bid and ask prices on the exchange where such securities are principally traded. Equity securities listed on the NASDAQ Global or Global Select Market generally are valued at the NASDAQ official closing price. Unlisted or listed securities for which closing sales prices or closing quotations are not available are valued at the mean between the latest available bid and ask prices.
Derivatives. Financial futures contracts are valued at the closing settlement price established by the board of trade or exchange on which they are traded, with adjustments for fair valuation for certain foreign financial futures contracts as described below.
Foreign Securities, Financial Futures Contracts and Currencies. Foreign securities, financial futures contracts and currencies are valued in U.S. dollars, based on foreign currency exchange rate quotations supplied by a third party pricing service. The pricing service uses a proprietary model to determine the exchange rate. Inputs to the model include reported trades and implied bid/ask spreads. The daily valuation of exchange-traded foreign securities and certain exchange-traded foreign financial futures contracts generally is determined as of the close of trading on the principal exchange on which such securities and contracts trade. Foreign ownership of shares of certain Indian companies may be subject to limitations. When foreign ownership of such an Indian company’s shares approaches the limitation, foreign investors may be willing to pay a premium to the local share price to acquire shares from other foreign investors. Such shares are valued at the closing price for foreign investors as provided by the exchange on which they trade. Events occurring after the close of trading on foreign exchanges may result in adjustments to the valuation of foreign securities and certain foreign financial futures contracts to more accurately reflect their fair value as of the close of regular trading on the New York Stock Exchange. When valuing foreign equity securities and foreign financial futures contracts that meet certain criteria, the Portfolio’s Trustees have approved the use of a fair value service that values such securities and foreign financial futures contracts to reflect market trading that occurs after the close of the applicable foreign markets of comparable securities or other instruments that have a strong correlation to the fair-valued securities and foreign financial futures contracts.
Fair Valuation. Investments for which valuations or market quotations are not readily available or are deemed unreliable are valued at fair value using methods determined in good faith by or at the direction of the Trustees of the Portfolio in a manner that most fairly reflects the security’s “fair value”, which is the amount that the Portfolio might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of relevant factors, which are likely to vary from one pricing context to another. These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issuer or of comparable companies or entities, quotations or relevant information obtained from broker/dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the company’s or entity’s financial statements, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.
B Investment Transactions — Investment transactions for financial statement purposes are accounted for on a trade date basis. Realized gains and losses on investments sold are determined on the basis of identified cost.
C Income — Dividend income is recorded on the ex-dividend date for dividends received in cash and/or securities. However, if the ex-dividend date has passed, certain dividends from foreign securities are recorded as the Portfolio is informed of the ex-dividend date. Non-cash dividends are recorded at the fair value of the securities received. Withholding taxes on foreign dividends and capital gains have been provided for in accordance with the Portfolio’s understanding of the applicable countries’ tax rules and rates. Interest income is recorded on the basis of interest accrued.
D Federal and Other Taxes — The Portfolio has elected to be treated as a partnership for federal tax purposes. No provision is made by the Portfolio for federal or state taxes on any taxable income of the Portfolio because each investor in the Portfolio is ultimately responsible for the payment of any taxes on its share of taxable income. Since at least one of the Portfolio’s investors is a regulated investment company that invests all or substantially all of its assets in the Portfolio, the Portfolio normally must satisfy the applicable source of income and diversification requirements (under the Internal Revenue Code) in order for its investors to satisfy them. The Portfolio will allocate, at least annually among its investors, each investor’s distributive share of the Portfolio’s net investment income, net realized capital gains and losses and any other items of income, gain, loss, deduction or credit.
In addition to the requirements of the Internal Revenue Code, the Portfolio may also be subject to local taxes on the recognition of capital gains in India. In determining the daily net asset value, the Portfolio estimates the accrual for such taxes, if any, based on the unrealized appreciation on certain portfolio securities, the holding period of such securities, the related tax rates, and the availability of any realized losses in excess of gains that may be carried forward to offset future gains. Taxes attributable to unrealized appreciation are included in the change in unrealized appreciation (depreciation) on investments. Capital gains taxes on certain Indian securities sold at a gain are included in net realized gain (loss) on investments. As of March 31, 2020,
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Greater India Portfolio
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
the Portfolio, for tax reporting in India, had estimated accumulated losses of INR 1,073,268,286 (having a value of approximately $14,215,000 at June 30, 2020) that can be carried forward to offset future realized gains from the sale of certain Indian securities that would otherwise be subject to Indian capital gain taxes. These accumulated losses expire on March 31, 2022 (INR 90,144,310), March 31, 2026 (INR 74,501,836), March 31, 2027 (INR 905,473,400) and March 31, 2028 (INR 3,148,740). Of the accumulated losses as of March 31, 2020, INR 205,939,319 are short-term and INR 867,328,967 are long-term.
As of June 30, 2020, the Portfolio had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. The Portfolio files a U.S. federal income tax return annually after its fiscal year-end, which is subject to examination by the Internal Revenue Service for a period of three years from the date of filing. The Portfolio also files a tax return in India annually as of March 31st. Such tax returns are subject to examination by the Indian tax authorities for open years as determined by the statute of limitations, which is generally a period of up to 7 years after a tax return is filed.
E Foreign Currency Translation — Investment valuations, other assets, and liabilities initially expressed in foreign currencies are translated each business day into U.S. dollars based upon current exchange rates. Purchases and sales of foreign investment securities and income and expenses denominated in foreign currencies are translated into U.S. dollars based upon currency exchange rates in effect on the respective dates of such transactions. Recognized gains or losses on investment transactions attributable to changes in foreign currency exchange rates are recorded for financial statement purposes as net realized gains and losses on investments. That portion of unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed.
F Use of Estimates — The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.
G Indemnifications — Under the Portfolio’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Portfolio. Under Massachusetts law, if certain conditions prevail, interestholders in the Portfolio could be deemed to have personal liability for the obligations of the Portfolio. However, the Portfolio’s Declaration of Trust contains an express disclaimer of liability on the part of Portfolio interestholders. Additionally, in the normal course of business, the Portfolio enters into agreements with service providers that may contain indemnification clauses. The Portfolio’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Portfolio that have not yet occurred.
H Financial Futures Contracts — Upon entering into a financial futures contract, the Portfolio is required to deposit with the broker, either in cash or securities, an amount equal to a certain percentage of the contract amount (initial margin). Subsequent payments, known as variation margin, are made or received by the Portfolio each business day, depending on the daily fluctuations in the value of the underlying security or index, and are recorded as unrealized gains or losses by the Portfolio. Gains (losses) are realized upon the expiration or closing of the financial futures contracts. Should market conditions change unexpectedly, the Portfolio may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. Futures contracts have minimal counterparty risk as they are exchange traded and the clearinghouse for the exchange is substituted as the counterparty, guaranteeing counterparty performance.
I Interim Financial Statements — The interim financial statements relating to June 30, 2020 and for the six months then ended have not been audited by an independent registered public accounting firm, but in the opinion of the Portfolio’s management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial statements.
2 Investment Adviser Fee and Other Transactions with Affiliates
The investment adviser fee is earned by Boston Management and Research (BMR), a subsidiary of EVM, as compensation for management and investment advisory services rendered to the Portfolio. Pursuant to the investment advisory agreement and subsequent fee reduction agreement between the Portfolio and BMR, the fee is computed at an annual rate of 0.85% of the Portfolio’s average daily net assets up to $500 million and is payable monthly. On net assets of $500 million and over, the annual fee is reduced. The fee reduction cannot be terminated or reduced without the approval of a majority vote of the Trustees of the Portfolio who are not interested persons of BMR or the Portfolio and by vote of a majority of the holders of interest in the Portfolio. For the six months ended June 30, 2020, the investment adviser fee amounted to $763,813 or 0.85% (annualized) of the Portfolio’s average daily net assets. Pursuant to a sub-advisory agreement, BMR pays Goldman Sachs Asset Management, L.P. a portion of its investment adviser fee for sub-advisory services provided to the Portfolio.
Trustees and officers of the Portfolio who are members of EVM’s or BMR’s organizations receive remuneration for their services to the Portfolio out of the investment adviser fee. Trustees of the Portfolio who are not affiliated with the investment adviser may elect to defer receipt of all or a percentage of their annual fees in accordance with the terms of the Trustees Deferred Compensation Plan. For the six months ended June 30, 2020, no significant amounts have been deferred. Certain officers and Trustees of the Portfolio are officers of the above organizations.
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June 30, 2020
Notes to Financial Statements (Unaudited) — continued
3 Purchases and Sales of Investments
Purchases and sales of investments, other than short-term obligations, aggregated $30,531,865 and $43,919,765, respectively, for the six months ended June 30, 2020.
4 Federal Income Tax Basis of Investments
The cost and unrealized appreciation (depreciation) of investments, including open derivative contracts, of the Portfolio at June 30, 2020, as determined on a federal income tax basis, were as follows:
Aggregate cost | $ | 147,639,403 | ||
Gross unrealized appreciation | $ | 28,586,206 | ||
Gross unrealized depreciation | (9,151,242 | ) | ||
Net unrealized appreciation | $ | 19,434,964 |
5 Financial Instruments
The Portfolio may trade in financial instruments with off-balance sheet risk in the normal course of its investing activities. These financial instruments may include financial futures contracts and may involve, to a varying degree, elements of risk in excess of the amounts recognized for financial statement purposes. The notional or contractual amounts of these instruments represent the investment the Portfolio has in particular classes of financial instruments and do not necessarily represent the amounts potentially subject to risk. The measurement of the risks associated with these instruments is meaningful only when all related and offsetting transactions are considered. A summary of obligations under these financial instruments at June 30, 2020 is included in the Portfolio of Investments. At June 30, 2020, the Portfolio had sufficient cash and/or securities to cover commitments under these contracts.
The Portfolio is subject to equity price risk in the normal course of pursuing its investment objective. The Portfolio enters into equity index futures contracts to manage cash flows.
The fair value of open derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) and whose primary underlying risk exposure is equity price risk at June 30, 2020 was as follows:
Fair Value | ||||||||
Derivative | Asset Derivative | Liability Derivative(1) | ||||||
Financial futures contracts | $ | — | $ | (64,806 | ) |
(1) | Only the current day’s variation margin on open futures contracts is reported within the Statement of Assets and Liabilities as Receivable or Payable for variation margin on open financial futures contracts, as applicable. |
The effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) on the Statement of Operations and whose primary underlying risk exposure is equity price risk for the six months ended June 30, 2020 was as follows:
Derivative | Realized Gain (Loss) on Derivatives Recognized in Income(1) | Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income(2) | ||||||
Financial futures contracts | $ | 1,057,596 | $ | (64,806 | ) |
(1) | Statement of Operations location: Net realized gain (loss) – Financial futures contracts. |
(2) | Statement of Operations location: Change in unrealized appreciation (depreciation) – Financial futures contracts. |
The average notional cost of futures contracts (long) outstanding during the six months ended June 30, 2020, which is indicative of the volume of this derivative type, was approximately $3,953,000.
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June 30, 2020
Notes to Financial Statements (Unaudited) — continued
6 Line of Credit
The Portfolio participates with other portfolios and funds managed by EVM and its affiliates in an $800 million unsecured line of credit agreement with a group of banks, which is in effect through October 27, 2020. In connection with the renewal of the agreement on October 29, 2019, funds managed by Calvert Research and Management, an affiliate of EVM, were added as participating funds to the agreement and the borrowing limit was increased from $625 million. Borrowings are made by the Portfolio solely for temporary purposes related to redemptions and other short-term cash needs. Interest is charged to the Portfolio based on its borrowings at an amount above either the Eurodollar rate or Federal Funds rate. In addition, a fee computed at an annual rate of 0.15% on the daily unused portion of the line of credit is allocated among the participating portfolios and funds at the end of each quarter. Because the line of credit is not available exclusively to the Portfolio, it may be unable to borrow some or all of its requested amounts at any particular time. The Portfolio did not have any significant borrowings or allocated fees during the six months ended June 30, 2020.
7 Fair Value Measurements
Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
• | Level 1 – quoted prices in active markets for identical investments |
• | Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
• | Level 3 – significant unobservable inputs (including a fund’s own assumptions in determining the fair value of investments) |
In cases where the inputs used to measure fair value fall in different levels of the fair value hierarchy, the level disclosed is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
At June 30, 2020, the hierarchy of inputs used in valuing the Portfolio’s investments and open derivative instruments, which are carried at value, were as follows:
Asset Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stocks |
| |||||||||||||||
Communication Services | $ | — | $ | 14,731,414 | $ | — | $ | 14,731,414 | ||||||||
Consumer Discretionary | — | 17,137,374 | — | 17,137,374 | ||||||||||||
Consumer Staples | — | 21,977,514 | — | 21,977,514 | ||||||||||||
Energy | — | 16,190,975 | — | 16,190,975 | ||||||||||||
Financials | — | 42,276,049 | — | 42,276,049 | ||||||||||||
Health Care | — | 15,000,242 | — | 15,000,242 | ||||||||||||
Industrials | — | 5,256,596 | — | 5,256,596 | ||||||||||||
Information Technology | 426,392 | 25,522,825 | — | 25,949,217 | ||||||||||||
Materials | — | 5,335,420 | — | 5,335,420 | ||||||||||||
Real Estate | — | 3,284,372 | — | 3,284,372 | ||||||||||||
Total Common Stocks | $ | 426,392 | $ | 166,712,781 | * | $ | — | $ | 167,139,173 | |||||||
Total Investments | $ | 426,392 | $ | 166,712,781 | $ | — | $ | 167,139,173 | ||||||||
Liability Description |
| |||||||||||||||
Futures Contracts | $ | — | $ | (64,806 | ) | $ | — | $ | (64,806 | ) | ||||||
Total | $ | — | $ | (64,806 | ) | $ | — | $ | (64,806 | ) |
* | Includes foreign equity securities whose values were adjusted to reflect market trading of comparable securities or other correlated instruments that occurred after the close of trading in their applicable foreign markets. |
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June 30, 2020
Notes to Financial Statements (Unaudited) — continued
8 Risks and Uncertainties
Risks Associated with Foreign Investments
Investing in securities issued by companies whose principal business activities are outside the United States may involve significant risks not present in domestic investments. For example, there is generally less publicly available information about foreign companies, particularly those not subject to the disclosure and reporting requirements of the U.S. securities laws. Certain foreign issuers are generally not bound by uniform accounting, auditing, and financial reporting requirements and standards of practice comparable to those applicable to domestic issuers. Investments in foreign securities also involve the risk of possible adverse changes in investment or exchange control regulations, expropriation or confiscatory taxation, limitation on the removal of funds or other assets of the Portfolio, political or financial instability or diplomatic and other developments which could affect such investments. Foreign securities markets, while growing in volume and sophistication, are generally not as developed as those in the United States, and securities of some foreign issuers (particularly those located in developing countries) may be less liquid and more volatile than securities of comparable U.S. companies. In general, there is less overall governmental supervision and regulation of foreign securities markets, broker/dealers and issuers than in the United States.
The securities markets in the India region are substantially smaller, less liquid and more volatile than the major securities markets in the United States, which may result in trading or price volatility and difficulties in the settlement and recording of transactions, and in interpreting and applying relevant laws and regulations. Governmental actions can have a significant effect on the economic conditions in the India region, which could adversely affect the value and liquidity of investments.
Pandemic Risk
An outbreak of respiratory disease caused by a novel coronavirus that was first detected in China in December 2019 has spread rapidly internationally. This coronavirus has resulted in closing borders, enhanced health screenings, changes to healthcare service preparation and delivery, quarantines, cancellations, disruptions to supply chains and customer activity, as well as general concern and uncertainty. The impact of this outbreak has negatively affected the worldwide economy, as well as the economies of individual countries and individual companies and can affect the market in general in significant and unforeseen ways. Health crises caused by outbreaks, such as the coronavirus outbreak, may exacerbate other pre-existing political, social and economic risks and disrupt normal market conditions and operations. The near-term impact of this coronavirus has resulted in substantial market volatility, which may have an adverse effect on the Portfolio’s investments.
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Eaton Vance
Greater India Fund
June 30, 2020
Board of Trustees’ Contract Approval
Overview of the Contract Review Process
The Investment Company Act of 1940, as amended (the “1940 Act”), provides, in substance, that the investment advisory agreement between a fund and its investment adviser will continue in effect from year-to-year only if its continuation is approved on an annual basis by a vote of the fund’s board of trustees, including a majority of the trustees who are not “interested persons” of the fund (“independent trustees”), cast in person at a meeting called for the purpose of considering such approval.
At a meeting held on April 22, 2020 (the “April 2020 Meeting”), the Boards of Trustees/Directors comprised of the same individuals (collectively, the “Board”) that oversees a majority of the registered investment companies advised by Eaton Vance Management or its affiliate, Boston Management and Research (the “Eaton Vance Funds”), including a majority of the independent trustees (the “Independent Trustees”), voted to approve the continuation of existing investment advisory agreements and sub-advisory agreements1 for each of the Eaton Vance Funds for an additional one-year period. The Board relied upon the affirmative recommendation of its Contract Review Committee, which is a committee exclusively comprised of Independent Trustees. Prior to making its recommendation, the Contract Review Committee reviewed information furnished by the adviser and sub-adviser to each of the Eaton Vance Funds (including information specifically requested by the Board) for a series of formal meetings held between February and April 2020. Members of the Contract Review Committee also considered information received at prior meetings of the Board and its committees, to the extent such information was relevant to the Contract Review Committee’s annual evaluation of the investment advisory agreements and sub-advisory agreements.
In connection with its evaluation of the investment advisory agreements and sub-advisory agreements, the Board considered various information relating to the Eaton Vance Funds. This included information applicable to all or groups of Eaton Vance Funds, which is referenced immediately below, and information applicable to the particular Eaton Vance Fund covered by this report (additional fund-specific information is referenced below under “Results of the Contract Review Process”). (For funds that invest through one or more underlying portfolios, references to “each fund” in this section may include information that was considered at the portfolio-level.)
Information about Fees, Performance and Expenses
• | A report from an independent data provider comparing advisory and other fees paid by each fund to such fees paid by comparable funds, as identified by the independent data provider (“comparable funds”); |
• | A report from an independent data provider comparing each fund’s total expense ratio (and its components) to those of comparable funds; |
• | A report from an independent data provider comparing the investment performance of each fund (including, as relevant, total return data, income data, Sharpe ratios and information ratios) to the investment performance of comparable funds and, as applicable, benchmark indices, over various time periods; |
• | In certain instances, data regarding investment performance relative to customized groups of peer funds and blended indices identified by the adviser in consultation with the Portfolio Management Committee of the Board; |
• | Comparative information concerning the fees charged and services provided by the adviser and sub-adviser to each fund in managing other accounts (which may include other mutual funds, collective investment funds and institutional accounts) using investment strategies and techniques similar to those used in managing such fund(s), if any; |
• | Profitability analyses with respect to the adviser and sub-adviser to each of the funds; |
Information about Portfolio Management and Trading
• | Descriptions of the investment management services provided to each fund, as well as each of the funds’ investment strategies and policies; |
• | The procedures and processes used to determine the fair value of fund assets, when necessary, and actions taken to monitor and test the effectiveness of such procedures and processes; |
• | Information about the policies and practices of each fund’s adviser and sub-adviser (in the context of a sub-adviser, only those with trading responsibilities) with respect to trading, including their processes for seeking best execution of portfolio transactions; |
• | Information about the allocation of brokerage transactions and the benefits, if any, received by the adviser and sub-adviser (in the context of a sub-adviser, only those with trading responsibilities) to each fund as a result of brokerage allocation, including, as applicable, information concerning the acquisition of research through client commission arrangements and policies with respect to “soft dollars”; |
• | Data relating to the portfolio turnover rate of each fund; |
Information about each Adviser and Sub-adviser
• | Reports detailing the financial results and condition of the adviser and sub-adviser to each fund; |
• | Information regarding the individual investment professionals whose responsibilities include portfolio management and investment research for the funds, and, for portfolio managers and certain other investment professionals, information relating to their responsibilities with respect to managing other mutual funds and investment accounts, as applicable; |
1 | Not all Eaton Vance Funds have entered into a sub-advisory agreement with a sub-adviser. Accordingly, references to “sub-adviser” or “sub-advisory agreement” in this “Overview” section may not be applicable to the particular Eaton Vance Fund covered by this report. |
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Eaton Vance
Greater India Fund
June 30, 2020
Board of Trustees’ Contract Approval — continued
• | The Code of Ethics of the adviser and its affiliates and the sub-adviser of each fund, together with information relating to compliance with, and the administration of, such codes; |
• | Policies and procedures relating to proxy voting and the handling of corporate actions and class actions; |
• | Information concerning the resources devoted to compliance efforts undertaken by the adviser and its affiliates and the sub-adviser of each fund, if any, including descriptions of their various compliance programs and their record of compliance; |
• | Information concerning the business continuity and disaster recovery plans of the adviser and its affiliates and the sub-adviser of each fund, if any; |
• | A description of Eaton Vance Management’s and Boston Management and Research’s oversight of sub-advisers, including with respect to regulatory and compliance issues, investment management and other matters; |
Other Relevant Information
• | Information concerning the nature, cost and character of the administrative and other non-investment advisory services provided by Eaton Vance Management and its affiliates; |
• | Information concerning oversight of the relationship with the custodian, subcustodians and fund accountants by the adviser and/or administrator to each of the funds; |
• | For an Eaton Vance Fund structured as an exchange-listed closed-end fund, information concerning the benefits of the closed-end fund structure, as well as, where relevant, the closed-end fund’s market prices, trading volume data, distribution rates and other relevant matters; and |
• | The terms of each investment advisory agreement and sub-advisory agreement. |
During the various meetings of the Board and its committees throughout the twelve months ended April 2020, the Trustees received information from portfolio managers and other investment professionals of the advisers and sub-advisers of the funds regarding investment and performance matters, and considered various investment and trading strategies used in pursuing the funds’ investment objectives. The Trustees also received information regarding risk management techniques employed in connection with the management of the funds. The Board and its committees evaluated issues pertaining to industry and regulatory developments, compliance procedures, fund governance and other issues with respect to the funds, and received and participated in reports and presentations provided by Eaton Vance Management, Boston Management and Research and fund sub-advisers, with respect to such matters. In addition to the formal meetings of the Board and its committees, the Independent Trustees held regular teleconferences to discuss, among other topics, matters relating to the continuation of investment advisory agreements and sub-advisory agreements.
The Contract Review Committee was advised throughout the contract review process by Goodwin Procter LLP, independent legal counsel for the Independent Trustees. The members of the Contract Review Committee, with the advice of such counsel, exercised their own business judgment in determining the material factors to be considered in evaluating each investment advisory agreement and sub-advisory agreement and the weight to be given to each such factor. The conclusions reached with respect to each investment advisory agreement and sub-advisory agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each member of the Contract Review Committee may have placed varying emphasis on particular factors in reaching conclusions with respect to each investment advisory agreement and sub-advisory agreement. In evaluating each investment advisory agreement and sub-advisory agreement, including the fee structures and other terms contained in such agreements, the members of the Contract Review Committee were also informed by multiple years of analysis and discussion with the adviser and sub-adviser to each of the Eaton Vance Funds.
In voting its approval of the continuation of existing investment advisory agreements and sub-advisory agreements at the April 2020 Meeting, the Board relied on an order issued by the Securities and Exchange Commission on March 25, 2020, which provided temporary relief from the in-person voting requirements under Section 15 of the 1940 Act in response to the impacts of the COVID-19 pandemic.
Results of the Contract Review Process
Based on its consideration of the foregoing, and such other information it deemed relevant, including the factors and conclusions described below, the Contract Review Committee concluded that the continuation of the investment advisory agreement between Eaton Vance Greater India Fund (the “Fund”), as well as the investment advisory agreement between Greater India Portfolio (the “Portfolio”), the portfolio in which the Fund invests, and Boston Management and Research (the “Adviser”), and the sub-advisory agreement between the Adviser and Goldman Sachs Asset Management, L.P. (the “Sub-adviser”), with respect to the Fund, as well as the sub-advisory agreement between the Adviser and the Sub-adviser with respect to the Portfolio, including their respective fee structures, are in the interests of shareholders and, therefore, recommended to the Board approval of each agreement. Based on the recommendation of the Contract Review Committee, the Board, including a majority of the Independent Trustees, voted to approve continuation of the investment advisory agreements and the sub-advisory agreements for the Fund and the Portfolio (collectively, the “investment advisory agreements”).
Nature, Extent and Quality of Services
In considering whether to approve the investment advisory agreements for the Fund and the Portfolio, the Board evaluated the nature, extent and quality of services provided to the Fund and the Portfolio by the Adviser and the Sub-adviser.
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Eaton Vance
Greater India Fund
June 30, 2020
Board of Trustees’ Contract Approval — continued
The Board considered the Adviser’s and the Sub-adviser’s management capabilities and investment processes in light of the types of investments held by the Fund and the Portfolio, including the education, experience and number of investment professionals and other personnel who provide portfolio management, investment research, and similar services to the Fund and the Portfolio. Regarding the Adviser, the Board considered the Adviser’s responsibilities with respect to oversight of the Sub-adviser and coordinating activities in implementing the investment strategies of the Fund and the Portfolio. With respect to the Sub-adviser, the Board considered the abilities and experience of the Sub-adviser’s investment professionals in investing in equity securities of companies in India and surrounding countries of the Indian subcontinent provided by investment professionals located in the region. The Board also took into account the resources dedicated to portfolio management and other services, the compensation methods of the Adviser and other factors, including the reputation and resources of the Adviser to recruit and retain highly qualified research, advisory and supervisory investment professionals. In addition, the Board considered the time and attention devoted to the Eaton Vance Funds, including the Fund and the Portfolio, by senior management, as well as the infrastructure, operational capabilities and support staff in place to assist in the portfolio management and operations of the Fund and the Portfolio, including the provision of administrative services. The Board also considered the business-related and other risks to which the Adviser or its affiliates may be subject in managing the Fund and the Portfolio.
The Board noted that under the terms of the investment advisory agreement of the Fund, the Adviser may invest assets of the Fund directly in securities, for which it would receive a fee, or in the Portfolio, for which it receives no separate fee but for which the Adviser receives an advisory fee from the Portfolio.
The Board considered the compliance programs of the Adviser, the Sub-adviser and relevant affiliates thereof. The Board considered compliance and reporting matters regarding, among other things, personal trading by investment professionals, disclosure of portfolio holdings, late trading, frequent trading, portfolio valuation, business continuity and the allocation of investment opportunities. The Board also considered the responses of the Adviser and its affiliates to requests in recent years from regulatory authorities, such as the Securities and Exchange Commission and the Financial Industry Regulatory Authority.
The Board considered other administrative services provided or overseen by Eaton Vance Management and its affiliates, including transfer agency and accounting services. The Board evaluated the benefits to shareholders of investing in a fund that is a part of a large fund complex offering exposure to a variety of asset classes and investment disciplines, as well as the ability, in many cases, to exchange an investment among different funds without incurring additional sales charges.
After consideration of the foregoing factors, among others, the Board concluded that the nature, extent and quality of services provided by the Adviser and the Sub-adviser, taken as a whole, are appropriate and consistent with the terms of the applicable investment advisory agreement.
Fund Performance
The Board compared the Fund’s investment performance to that of comparable funds identified by an independent data provider (the peer group), as well as an appropriate benchmark index and a customized peer group of similarly managed funds. The Board’s review included comparative performance data with respect to the Fund for the one-, three-, five- and ten-year periods ended September 30, 2019. In this regard, the Board noted that the performance of the Fund was higher than the median performance of the Fund’s peer group and custom peer group for the three-year period. The Board also noted that the performance of the Fund was lower than its benchmark index for the three-year period. The Board concluded that the performance of the Fund was satisfactory.
Management Fees and Expenses
The Board considered contractual fee rates payable by the Portfolio and by the Fund for advisory and administrative services (referred to collectively as “management fees”). As part of its review, the Board considered the Fund’s management fees and total expense ratio for the one-year period ended September 30, 2019, as compared to those of comparable funds, before and after giving effect to any undertaking to waive fees or reimburse expenses. The Board also received and considered information about the services offered and the fee rates charged by the Adviser and/or Sub-adviser to other types of accounts with investment objectives and strategies that are substantially similar to and/or managed in a similar investment style as the Fund. In this regard, the Board received information about the differences in the nature and scope of services the Adviser and/or Sub-adviser provide to the Fund as compared to other types of accounts and the material differences in compliance, reporting and other legal burdens and risks to the Adviser and/or Sub-adviser as between the Fund and other types of accounts. The Board also considered factors that had an impact on the Fund’s total expense ratio relative to comparable funds.
After considering the foregoing information, and in light of the nature, extent and quality of the services provided by the Adviser and the Sub-adviser, the Board concluded that the management fees charged for advisory and related services are reasonable.
Profitability and “Fall-Out” Benefits
The Board considered the level of profits realized by the Adviser and relevant affiliates thereof in providing investment advisory and administrative services to the Fund, to the Portfolio and to all Eaton Vance Funds as a group. The Board considered the level of profits realized without regard to marketing support or other payments by the Adviser and its affiliates to third parties in respect of distribution or other services.
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Eaton Vance
Greater India Fund
June 30, 2020
Board of Trustees’ Contract Approval — continued
The Board concluded that, in light of the foregoing factors and the nature, extent and quality of the services rendered, the profits realized by the Adviser and its affiliates are deemed not to be excessive.
The Board also considered direct or indirect fall-out benefits received by the Adviser and its affiliates in connection with their respective relationships with the Fund and the Portfolio, including the benefits of research services that may be available to the Adviser as a result of securities transactions effected for the Fund and the Portfolio and other investment advisory clients.
Economies of Scale
In reviewing management fees and profitability, the Board also considered the extent to which the Adviser and its affiliates, on the one hand, and the Fund and the Portfolio, on the other hand, can expect to realize benefits from economies of scale as the assets of the Fund and the Portfolio increase. The Board acknowledged the difficulty in accurately measuring the benefits resulting from economies of scale, if any, with respect to the management of any specific fund or group of funds. The Board reviewed data summarizing the increases and decreases in the assets of the Fund and of all Eaton Vance Funds as a group over various time periods, and evaluated the extent to which the total expense ratio of the Fund and the profitability of the Adviser and its affiliates may have been affected by such increases or decreases. Based upon the foregoing, the Board concluded that the Fund and the Portfolio currently share in the benefits from economies of scale, if any, when they are realized by the Adviser. The Board also concluded that the structure of the advisory fees, which include breakpoints at several asset levels, will allow the Fund and the Portfolio to continue to benefit from any economies of scale in the future.
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Eaton Vance
Greater India Fund
June 30, 2020
Liquidity Risk Management Program
The Fund has implemented a written liquidity risk management program (Program) and related procedures to manage its liquidity in accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (Liquidity Rule). The Liquidity Rule defines “liquidity risk” as the risk that a fund could not meet requests to redeem shares issued by the fund without significant dilution of the remaining investors’ interests in the fund. The Fund’s Board of Trustees/Directors has designated the investment adviser to serve as the administrator of the Program and the related procedures. The administrator has established a Liquidity Risk Management Oversight Committee (Committee) to perform the functions necessary to administer the Program. As part of the Program, the administrator is responsible for identifying illiquid investments and categorizing the relative liquidity of the Fund’s investments in accordance with the Liquidity Rule. Under the Program, the administrator assesses, manages, and periodically reviews the Fund’s liquidity risk, and is responsible for making certain reports to the Fund’s Board of Trustees/Directors and the Securities and Exchange Commission (SEC) regarding the liquidity of the Fund’s investments, and to notify the Board of Trustees/Directors and the SEC of certain liquidity events specified in the Liquidity Rule. The liquidity of the Fund’s portfolio investments is determined based on a number of factors including, but not limited to, relevant market, trading and investment-specific considerations under the Program.
At a meeting of the Fund’s Board of Trustees/Directors, the Committee provided a written report to the Fund’s Board of Trustees/Directors pertaining to the operation, adequacy, and effectiveness of implementation of the Program, as well as the operation of the highly liquid investment minimum (if applicable) for the period December 1, 2018 through December 31, 2019 (Review Period). The Program operated effectively during the Review Period, supporting the administrator’s ability to assess, manage and monitor Fund liquidity risk, including during periods of market volatility and net redemptions. During the Review Period, the Fund met redemption requests on a timely basis.
There can be no assurance that the Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
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Eaton Vance
Greater India Fund
June 30, 2020
Officers of Eaton Vance Greater India Fund
Payson F. Swaffield
President
Maureen A. Gemma
Vice President, Secretary and Chief Legal Officer
James F. Kirchner
Treasurer
Richard F. Froio
Chief Compliance Officer
Officers of Greater India Portfolio
Edward J. Perkin
President
Maureen A. Gemma
Vice President, Secretary and Chief Legal Officer
James F. Kirchner
Treasurer
Richard F. Froio
Chief Compliance Officer
Trustees of Eaton Vance Greater India Fund and Greater India Portfolio
William H. Park
Chairperson
Thomas E. Faust Jr.*
Mark R. Fetting
Cynthia E. Frost
George J. Gorman
Valerie A. Mosley
Helen Frame Peters
Keith Quinton
Marcus L. Smith
Susan J. Sutherland
Scott E. Wennerholm
* | Interested Trustee |
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Eaton Vance Funds
Privacy. The Eaton Vance organization is committed to ensuring your financial privacy. Each entity listed below has adopted a privacy policy and procedures (“Privacy Program”) Eaton Vance believes is reasonably designed to protect your personal information and to govern when and with whom Eaton Vance may share your personal information.
• | At the time of opening an account, Eaton Vance generally requires you to provide us with certain information such as name, address, social security number, tax status, account numbers, and account balances. This information is necessary for us to both open an account for you and to allow us to satisfy legal requirements such as applicable anti-money laundering reviews and know-your-customer requirements. |
• | On an ongoing basis, in the normal course of servicing your account, Eaton Vance may share your information with unaffiliated third parties that perform various services for Eaton Vance and/or your account. These third parties include transfer agents, custodians, broker/dealers and our professional advisers, including auditors, accountants, and legal counsel. Eaton Vance may additionally share your personal information with our affiliates. |
• | We believe our Privacy Program is reasonably designed to protect the confidentiality of your personal information and to prevent unauthorized access to that information. |
• | We reserve the right to change our Privacy Program at any time upon proper notification to you. You may want to review our Privacy Program periodically for changes by accessing the link on our homepage: www.eatonvance.com. |
Our pledge of protecting your personal information applies to the following entities within the Eaton Vance organization: the Eaton Vance Family of Funds, Eaton Vance Management, Eaton Vance Investment Counsel, Eaton Vance Distributors, Inc., Eaton Vance Trust Company, Eaton Vance Management (International) Limited, Eaton Vance Advisers International Limited, Eaton Vance Global Advisors Limited, Eaton Vance Management’s Real Estate Investment Group, Boston Management and Research, Calvert Research and Management, and Calvert Funds. This Privacy Notice supersedes all previously issued privacy disclosures. For more information about our Privacy Program or about how your personal information may be used, please call 1-800-262-1122.
Delivery of Shareholder Documents. The Securities and Exchange Commission (SEC) permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called “householding” and it helps eliminate duplicate mailings to shareholders. Eaton Vance, or your financial intermediary, may household the mailing of your documents indefinitely unless you instruct Eaton Vance, or your financial intermediary, 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 intermediary. Your instructions that householding not apply to delivery of your Eaton Vance documents will typically be effective within 30 days of receipt by Eaton Vance or your financial intermediary.
Portfolio Holdings. Each Eaton Vance Fund and its underlying Portfolio(s) (if applicable) files a schedule of portfolio holdings on Part F to Form N-PORT with the SEC. Certain information filed on Form N-PORT may be viewed on the Eaton Vance website at www.eatonvance.com, by calling Eaton Vance at 1-800-262-1122 or in the EDGAR database on the SEC’s website at www.sec.gov.
Proxy Voting. From time to time, funds are required to vote proxies related to the securities held by the funds. The Eaton Vance Funds or their underlying Portfolios (if applicable) vote proxies according to a set of policies and procedures approved by the Funds’ and Portfolios’ Boards. You may obtain a description of these policies and procedures and information on how the Funds or Portfolios voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge, upon request, by calling 1-800-262-1122 and by accessing the SEC’s website at www.sec.gov.
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Investment Adviser of Eaton Vance Greater India Fund and Greater India Portfolio
Boston Management and Research
Two International Place
Boston, MA 02110
Investment Sub-Adviser of Eaton Vance Greater India Fund and Greater India Portfolio
Goldman Sachs Asset Management, L.P.
200 West Street
New York, NY 10282
Administrator of Eaton Vance Greater India Fund
Eaton Vance Management
Two International Place
Boston, MA 02110
Principal Underwriter*
Eaton Vance Distributors, Inc.
Two International Place
Boston, MA 02110
(617) 482-8260
Custodian
State Street Bank and Trust Company
State Street Financial Center, One Lincoln Street
Boston, MA 02111
Transfer Agent
BNY Mellon Investment Servicing (US) Inc.
Attn: Eaton Vance Funds
P.O. Box 9653
Providence, RI 02940-9653
(800) 262-1122
Fund Offices
Two International Place
Boston, MA 02110
* | FINRA BrokerCheck. Investors may check the background of their Investment Professional by contacting the Financial Industry Regulatory Authority (FINRA). FINRA BrokerCheck is a free tool to help investors check the professional background of current and former FINRA-registered securities firms and brokers. FINRA BrokerCheck is available by calling 1-800-289-9999 and at www.FINRA.org. The FINRA BrokerCheck brochure describing this program is available to investors at www.FINRA.org. |
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Eaton Vance
Growth Fund
Semiannual Report
June 30, 2020
Important Note. Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semi-annual shareholder reports will no longer be sent by mail unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (eatonvance.com/funddocuments), and you will be notified by mail each time a report is posted and provided with a website address to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you are a direct investor, you may elect to receive shareholder reports and other communications from the Fund electronically by signing up for e-Delivery at eatonvance.com/edelivery. If you own your shares through a financial intermediary (such as a broker-dealer or bank), you must contact your financial intermediary to sign up.
You may elect to receive all future Fund shareholder reports in paper free of charge. If you are a direct investor, you can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by calling 1-800-262-1122. If you own these shares through a financial intermediary, you must contact your financial intermediary or follow instructions included with this disclosure, if applicable, to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all Eaton Vance funds held directly or to all funds held through your financial intermediary, as applicable.
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Commodity Futures Trading Commission Registration. Effective December 31, 2012, the Commodity Futures Trading Commission (“CFTC”) adopted certain regulatory changes that subject registered investment companies and advisers to regulation by the CFTC if a fund invests more than a prescribed level of its assets in certain CFTC-regulated instruments (including futures, certain options and swap agreements) or markets itself as providing investment exposure to such instruments. The investment adviser has claimed an exclusion from the definition of “commodity pool operator” under the Commodity Exchange Act with respect to its management of the Fund. Accordingly, neither the Fund nor the adviser with respect to the operation of the Fund is subject to CFTC regulation. Because of its management of other strategies, the Fund’s adviser is registered with the CFTC as a commodity pool operator. The adviser is also registered as a commodity trading advisor.
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.
This report must be preceded or accompanied by a current summary prospectus or prospectus. Before investing, investors should consider carefully the investment objective, risks, and charges and expenses of a mutual fund. This and other important information is contained in the summary prospectus and prospectus, which can be obtained from a financial intermediary. Prospective investors should read the prospectus carefully before investing. For further information, please call 1-800-262-1122.
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Semiannual Report June 30, 2020
Eaton Vance
Growth Fund
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Eaton Vance
Growth Fund
June 30, 2020
Portfolio Managers Lewis R. Piantedosi and Yana S. Barton, CFA
% Average Annual Total Returns | Class Inception Date | Performance Inception Date | Six Months | One Year | Five Years | Ten Years | ||||||||||||||||||
Class A at NAV | 09/09/2002 | 09/09/2002 | 7.93 | % | 18.19 | % | 12.93 | % | 14.78 | % | ||||||||||||||
Class A with 5.75% Maximum Sales Charge | — | — | 1.71 | 11.41 | 11.60 | 14.10 | ||||||||||||||||||
Class C at NAV | 09/09/2002 | 09/09/2002 | 7.55 | 17.28 | 12.08 | 13.92 | ||||||||||||||||||
Class C with 1% Maximum Sales Charge | — | — | 6.55 | 16.28 | 12.08 | 13.92 | ||||||||||||||||||
Class I at NAV | 05/03/2007 | 09/09/2002 | 8.08 | 18.47 | 13.21 | 15.06 | ||||||||||||||||||
Class R at NAV | 08/03/2009 | 09/09/2002 | 7.82 | 17.89 | 12.65 | 14.48 | ||||||||||||||||||
| ||||||||||||||||||||||||
Russell 1000® Growth Index | — | — | 9.81 | % | 23.28 | % | 15.87 | % | 17.22 | % | ||||||||||||||
% Total Annual Operating Expense Ratios3 | Class A | Class C | Class I | Class R | ||||||||||||||||||||
Gross | 1.09 | % | 1.84 | % | 0.84 | % | 1.34 | % | ||||||||||||||||
Net | 1.05 | 1.80 | 0.80 | 1.30 |
Sector Allocation (% of net assets)4
Top 10 Holdings (% of net assets)4
Amazon.com, Inc. | 9.7 | % | ||
Microsoft Corp. | 6.5 | |||
Visa, Inc., Class A | 5.2 | |||
Apple, Inc. | 4.6 | |||
Adobe, Inc. | 4.2 | |||
PayPal Holdings, Inc. | 4.1 | |||
salesforce.com, inc. | 3.7 | |||
Alphabet, Inc., Class A | 3.6 | |||
Facebook, Inc., Class A | 3.4 | |||
Alphabet, Inc., Class C | 3.2 | |||
Total | 48.2 | % |
See Endnotes and Additional Disclosures in this report.
Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or offering price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance for periods less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to eatonvance.com.
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Eaton Vance
Growth Fund
June 30, 2020
Endnotes and Additional Disclosures
1 | Russell 1000® Growth Index is an unmanaged index of U.S. large-cap growth stocks. Unless otherwise stated, index returns do not reflect the effect of any applicable sales charges, commissions, expenses, taxes or leverage, as applicable. It is not possible to invest directly in an index. |
2 | Total Returns at NAV do not include applicable sales charges. If sales charges were deducted, the returns would be lower. Total Returns shown with maximum sales charge reflect the stated maximum sales charge. Unless otherwise stated, performance does not reflect the deduction of taxes on Fund distributions or redemptions of Fund shares. |
3 | Source: Fund prospectus. Net expense ratios reflect a contractual expense reimbursement that continues through 4/30/21. Without the reimbursement, performance would have been lower. The expense ratios for the current reporting period can be found in the Financial Highlights section of this report. |
4 | Excludes cash and cash equivalents. |
Fund profile subject to change due to active management. |
3 |
Table of Contents
Eaton Vance
Growth Fund
June 30, 2020
Example: As a Fund shareholder, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases and redemption fees (if applicable); and (2) ongoing costs, including management fees; distribution and/or service fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of Fund investing and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2020 – June 30, 2020).
Actual Expenses: The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes: The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the actual Fund expense ratio and an assumed rate of return of 5% per year (before expenses), which is not the actual Fund return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption fees (if applicable). Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would be higher.
Beginning Account Value (1/1/20) | Ending Account Value (6/30/20) | Expenses Paid During Period* (1/1/20 – 6/30/20) | Annualized Expense Ratio | |||||||||||||
Actual | ||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,079.30 | $ | 5.43 | ** | 1.05 | % | |||||||
Class C | $ | 1,000.00 | $ | 1,075.50 | $ | 9.29 | ** | 1.80 | % | |||||||
Class I | $ | 1,000.00 | $ | 1,080.80 | $ | 4.14 | ** | 0.80 | % | |||||||
Class R | $ | 1,000.00 | $ | 1,078.20 | $ | 6.72 | ** | 1.30 | % | |||||||
Hypothetical | ||||||||||||||||
(5% return per year before expenses) | ||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,019.60 | $ | 5.27 | ** | 1.05 | % | |||||||
Class C | $ | 1,000.00 | $ | 1,015.90 | $ | 9.02 | ** | 1.80 | % | |||||||
Class I | $ | 1,000.00 | $ | 1,020.90 | $ | 4.02 | ** | 0.80 | % | |||||||
Class R | $ | 1,000.00 | $ | 1,018.40 | $ | 6.52 | ** | 1.30 | % |
* | Expenses are equal to the Fund’s annualized expense ratio for the indicated Class, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). The Example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on December 31, 2019. |
** | Absent an allocation of certain expenses to an affiliate, expenses would be higher. |
4 |
Table of Contents
Eaton Vance
Growth Fund
June 30, 2020
Portfolio of Investments (Unaudited)
Common Stocks — 100.1% |
| |||||||
Security | Shares | Value | ||||||
Aerospace & Defense — 2.1% | ||||||||
Boeing Co. (The) | 8,062 | $ | 1,477,765 | |||||
Hexcel Corp. | 76,192 | 3,445,402 | ||||||
Raytheon Technologies Corp. | 31,944 | 1,968,389 | ||||||
$ | 6,891,556 | |||||||
Auto Components — 0.6% | ||||||||
Aptiv PLC | 25,285 | $ | 1,970,207 | |||||
$ | 1,970,207 | |||||||
Banks — 2.0% | ||||||||
Bank of America Corp. | 154,228 | $ | 3,662,915 | |||||
JPMorgan Chase & Co. | 29,908 | 2,813,147 | ||||||
$ | 6,476,062 | |||||||
Beverages — 1.3% | ||||||||
Constellation Brands, Inc., Class A | 13,884 | $ | 2,429,006 | |||||
PepsiCo, Inc. | 14,900 | 1,970,674 | ||||||
$ | 4,399,680 | |||||||
Biotechnology — 6.1% | ||||||||
AbbVie, Inc. | 34,288 | $ | 3,366,396 | |||||
Amgen, Inc. | 18,468 | 4,355,863 | ||||||
Argenx SE ADR(1) | 13,135 | 2,958,396 | ||||||
Blueprint Medicines Corp.(1) | 30,772 | 2,400,216 | ||||||
Exact Sciences Corp.(1)(2) | 19,210 | 1,670,117 | ||||||
Incyte Corp.(1) | 17,940 | 1,865,222 | ||||||
Vertex Pharmaceuticals, Inc.(1) | 11,442 | 3,321,727 | ||||||
$ | 19,937,937 | |||||||
Building Products — 0.7% | ||||||||
A.O. Smith Corp. | 47,659 | $ | 2,245,692 | |||||
$ | 2,245,692 | |||||||
Capital Markets — 0.9% | ||||||||
Charles Schwab Corp. (The) | 89,249 | $ | 3,011,261 | |||||
$ | 3,011,261 | |||||||
Commercial Services & Supplies — 0.8% | ||||||||
Waste Connections, Inc. | 29,213 | $ | 2,739,887 | |||||
$ | 2,739,887 |
Security | Shares | Value | ||||||
Containers & Packaging — 0.6% | ||||||||
Avery Dennison Corp. | 16,570 | $ | 1,890,471 | |||||
$ | 1,890,471 | |||||||
Electrical Equipment — 1.2% | ||||||||
AMETEK, Inc. | 44,928 | $ | 4,015,215 | |||||
$ | 4,015,215 | |||||||
Electronic Equipment, Instruments & Components — 1.7% | ||||||||
Zebra Technologies Corp., Class A(1) | 21,203 | $ | 5,426,908 | |||||
$ | 5,426,908 | |||||||
Entertainment — 2.7% | ||||||||
Netflix, Inc.(1) | 14,477 | $ | 6,587,614 | |||||
Walt Disney Co. (The) | 21,319 | 2,377,282 | ||||||
$ | 8,964,896 | |||||||
Food Products — 1.0% | ||||||||
Mondelez International, Inc., Class A | 63,002 | $ | 3,221,292 | |||||
$ | 3,221,292 | |||||||
Health Care Equipment & Supplies — 5.1% | ||||||||
Abbott Laboratories | 28,059 | $ | 2,565,434 | |||||
Boston Scientific Corp.(1) | 91,666 | 3,218,393 | ||||||
Haemonetics Corp.(1) | 39,253 | 3,515,499 | ||||||
Intuitive Surgical, Inc.(1) | 9,755 | 5,558,692 | ||||||
Tandem Diabetes Care, Inc.(1) | 19,566 | 1,935,469 | ||||||
$ | 16,793,487 | |||||||
Health Care Providers & Services — 3.1% | ||||||||
Centene Corp.(1) | 56,590 | $ | 3,596,294 | |||||
UnitedHealth Group, Inc. | 22,809 | 6,727,515 | ||||||
$ | 10,323,809 | |||||||
Hotels, Restaurants & Leisure — 1.3% | ||||||||
Starbucks Corp. | 59,033 | $ | 4,344,239 | |||||
$ | 4,344,239 | |||||||
Interactive Media & Services — 10.8% | ||||||||
Alphabet, Inc., Class A(1) | 8,421 | $ | 11,941,399 | |||||
Alphabet, Inc., Class C(1) | 7,456 | 10,539,876 | ||||||
Facebook, Inc., Class A(1) | 49,048 | 11,137,329 | ||||||
Twitter, Inc.(1) | 59,692 | 1,778,225 | ||||||
$ | 35,396,829 |
5 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Growth Fund
June 30, 2020
Portfolio of Investments (Unaudited) — continued
Security | Shares | Value | ||||||
Internet & Direct Marketing Retail — 9.7% | ||||||||
Amazon.com, Inc.(1) | 11,499 | $ | 31,723,671 | |||||
$ | 31,723,671 | |||||||
IT Services — 10.0% | ||||||||
GoDaddy, Inc., Class A(1) | 29,745 | $ | 2,181,201 | |||||
PayPal Holdings, Inc.(1) | 76,413 | 13,313,437 | ||||||
Visa, Inc., Class A | 89,114 | 17,214,151 | ||||||
$ | 32,708,789 | |||||||
Life Sciences Tools & Services — 2.2% | ||||||||
10X Genomics, Inc., Class A(1) | 26,459 | $ | 2,363,053 | |||||
Agilent Technologies, Inc. | 24,191 | 2,137,759 | ||||||
Illumina, Inc.(1) | 7,378 | 2,732,442 | ||||||
$ | 7,233,254 | |||||||
Pharmaceuticals — 1.0% | ||||||||
Eli Lilly & Co. | 10,033 | $ | 1,647,218 | |||||
Ipsen SA | 21,026 | 1,783,667 | ||||||
$ | 3,430,885 | |||||||
Road & Rail — 1.5% | ||||||||
CSX Corp. | 21,613 | $ | 1,507,291 | |||||
Uber Technologies, Inc.(1) | 64,902 | 2,017,154 | ||||||
Union Pacific Corp. | 9,103 | 1,539,044 | ||||||
$ | 5,063,489 | |||||||
Semiconductors & Semiconductor Equipment — 5.2% | ||||||||
Micron Technology, Inc.(1) | 87,142 | $ | 4,489,556 | |||||
QUALCOMM, Inc. | 86,188 | 7,861,208 | ||||||
Texas Instruments, Inc. | 37,385 | 4,746,773 | ||||||
$ | 17,097,537 | |||||||
Software — 19.1% | ||||||||
Adobe, Inc.(1) | 32,014 | $ | 13,936,014 | |||||
Intuit, Inc. | 21,629 | 6,406,294 | ||||||
Microsoft Corp. | 105,550 | 21,480,480 | ||||||
SailPoint Technologies Holdings, Inc.(1) | 103,792 | 2,747,374 | ||||||
salesforce.com, inc.(1) | 64,309 | 12,047,005 | ||||||
Zscaler, Inc.(1) | 54,879 | 6,009,251 | ||||||
$ | 62,626,418 |
Security | Shares | Value | ||||||
Specialty Retail — 3.3% | ||||||||
AutoZone, Inc.(1) | 1,568 | $ | 1,768,892 | |||||
Lowe’s Cos., Inc. | 49,868 | 6,738,164 | ||||||
TJX Cos., Inc. (The) | 46,104 | 2,331,019 | ||||||
$ | 10,838,075 | |||||||
Technology Hardware, Storage & Peripherals — 4.6% | ||||||||
Apple, Inc. | 41,605 | $ | 15,177,504 | |||||
$ | 15,177,504 | |||||||
Textiles, Apparel & Luxury Goods — 1.5% | ||||||||
NIKE, Inc., Class B | 48,789 | $ | 4,783,761 | |||||
$ | 4,783,761 | |||||||
Total Common Stocks |
| $ | 328,732,811 | |||||
Short-Term Investments — 0.0%(3) |
| |||||||
Description | Units | Value | ||||||
Eaton Vance Cash Reserves Fund, LLC, 0.35%(4) | 36,266 | $ | 36,266 | |||||
Total Short-Term Investments |
| $ | 36,266 | |||||
Total Investments — 100.1% |
| $ | 328,769,077 | |||||
Other Assets, Less Liabilities — (0.1)% |
| $ | (275,884 | ) | ||||
Net Assets — 100.0% |
| $ | 328,493,193 |
The percentage shown for each investment category in the Portfolio of Investments is based on net assets.
(1) | Non-income producing security. |
(2) | All or a portion of this security was on loan at June 30, 2020. The aggregate market value of securities on loan at June 30, 2020 was $1,653,338. |
(3) | Amount is less than 0.05%. |
(4) | Affiliated investment company, available to Eaton Vance portfolios and funds, which invests in high quality, U.S. dollar denominated money market instruments. The rate shown is the annualized seven-day yield as of June 30, 2020. |
Abbreviations:
ADR | – | American Depositary Receipt |
6 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Growth Fund
June 30, 2020
Statement of Assets and Liabilities (Unaudited)
Assets | June 30, 2020 | |||
Unaffiliated investments, at value including $1,653,338 of securities on loan (identified cost, $166,619,442) | $ | 328,732,811 | ||
Affiliated investment, at value (identified cost, $36,266) | 36,266 | |||
Cash | 17,305 | |||
Dividends receivable | 45,354 | |||
Dividends receivable from affiliated investment | 229 | |||
Receivable for Fund shares sold | 80,667 | |||
Securities lending income receivable | 366 | |||
Tax reclaims receivable | 67,319 | |||
Total assets | $ | 328,980,317 | ||
Liabilities | ||||
Payable for Fund shares redeemed | $ | 117,647 | ||
Payable to affiliates: | ||||
Investment adviser fee | 172,288 | |||
Distribution and service fees | 63,560 | |||
Trustees’ fees | 4,070 | |||
Other | 16,116 | |||
Accrued expenses | 113,443 | |||
Total liabilities | $ | 487,124 | ||
Net Assets | $ | 328,493,193 | ||
Sources of Net Assets | ||||
Paid-in capital | $ | 149,367,786 | ||
Distributable earnings | 179,125,407 | |||
Total | $ | 328,493,193 | ||
Class A Shares | ||||
Net Assets | $ | 240,942,556 | ||
Shares Outstanding | 7,936,235 | |||
Net Asset Value and Redemption Price Per Share | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 30.36 | ||
Maximum Offering Price Per Share | ||||
(100 ÷ 94.25 of net asset value per share) | $ | 32.21 | ||
Class C Shares | ||||
Net Assets | $ | 17,286,580 | ||
Shares Outstanding | 705,560 | |||
Net Asset Value and Offering Price Per Share* | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 24.50 | ||
Class I Shares | ||||
Net Assets | $ | 68,238,170 | ||
Shares Outstanding | 2,162,350 | |||
Net Asset Value, Offering Price and Redemption Price Per Share | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 31.56 | ||
Class R Shares | ||||
Net Assets | $ | 2,025,887 | ||
Shares Outstanding | 69,012 | |||
Net Asset Value, Offering Price and Redemption Price Per Share | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 29.36 |
On sales of $50,000 or more, the offering price of Class A shares is reduced.
* | Redemption price per share is equal to the net asset value less any applicable contingent deferred sales charge. |
7 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Growth Fund
June 30, 2020
Statement of Operations (Unaudited)
Investment Income | Six Months Ended June 30, 2020 | |||
Dividends (net of foreign taxes, $9,467) | $ | 1,207,164 | ||
Dividends from affiliated investment | 4,298 | |||
Securities lending income, net | 4,248 | |||
Total investment income | $ | 1,215,710 | ||
Expenses | ||||
Investment adviser fee | $ | 985,385 | ||
Distribution and service fees | ||||
Class A | 278,366 | |||
Class C | 80,751 | |||
Class R | 5,280 | |||
Trustees’ fees and expenses | 7,783 | |||
Custodian fee | 36,562 | |||
Transfer and dividend disbursing agent fees | 151,427 | |||
Legal and accounting services | 26,895 | |||
Printing and postage | 14,529 | |||
Registration fees | 31,643 | |||
Miscellaneous | 11,425 | |||
Total expenses | $ | 1,630,046 | ||
Deduct — | ||||
Allocation of expenses to affiliate | $ | 52,125 | ||
Total expense reductions | $ | 52,125 | ||
Net expenses | $ | 1,577,921 | ||
Net investment loss | $ | (362,211 | ) | |
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) — | ||||
Investment transactions | $ | 12,029,887 | ||
Investment transactions — affiliated investment | 714 | |||
Foreign currency transactions | (3,540 | ) | ||
Net realized gain | $ | 12,027,061 | ||
Change in unrealized appreciation (depreciation) — | ||||
Investments | $ | 11,041,967 | ||
Investments — affiliated investment | (71 | ) | ||
Net change in unrealized appreciation (depreciation) | $ | 11,041,896 | ||
Net realized and unrealized gain | $ | 23,068,957 | ||
Net increase in net assets from operations | $ | 22,706,746 |
8 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Growth Fund
June 30, 2020
Statements of Changes in Net Assets
Increase (Decrease) in Net Assets | Six Months Ended June 30, 2020 | Year Ended December 31, 2019 | ||||||
From operations — | ||||||||
Net investment loss | $ | (362,211 | ) | $ | (435,461 | ) | ||
Net realized gain | 12,027,061 | 38,423,604 | ||||||
Net change in unrealized appreciation (depreciation) | 11,041,896 | 49,261,325 | ||||||
Net increase in net assets from operations | $ | 22,706,746 | $ | 87,249,468 | ||||
Distributions to shareholders — | ||||||||
Class A | $ | — | $ | (19,933,190 | ) | |||
Class C | — | (1,838,413 | ) | |||||
Class I | — | (5,682,677 | ) | |||||
Class R | — | (190,725 | ) | |||||
Total distributions to shareholders | $ | — | $ | (27,645,005 | ) | |||
Transactions in shares of beneficial interest — | ||||||||
Proceeds from sale of shares | ||||||||
Class A | $ | 6,464,004 | $ | 11,587,924 | ||||
Class C | 2,454,447 | 1,833,899 | ||||||
Class I | 5,809,425 | 15,275,659 | ||||||
Class R | 776,145 | 407,315 | ||||||
Net asset value of shares issued to shareholders in payment of distributions declared | ||||||||
Class A | — | 18,389,458 | ||||||
Class C | — | 1,635,011 | ||||||
Class I | — | 5,539,930 | ||||||
Class R | — | 157,118 | ||||||
Cost of shares redeemed | ||||||||
Class A | (20,056,714 | ) | (38,424,586 | ) | ||||
Class C | (2,403,027 | ) | (8,928,687 | ) | ||||
Class I | (7,970,644 | ) | (50,226,391 | ) | ||||
Class R | (1,154,844 | ) | (1,903,334 | ) | ||||
Net asset value of shares converted | ||||||||
Class A | 1,357,548 | 16,669,280 | ||||||
Class C | (1,357,548 | ) | (16,669,280 | ) | ||||
Net decrease in net assets from Fund share transactions | $ | (16,081,208 | ) | $ | (44,656,684 | ) | ||
Net increase in net assets | $ | 6,625,538 | $ | 14,947,779 | ||||
Net Assets |
| |||||||
At beginning of period | $ | 321,867,655 | $ | 306,919,876 | ||||
At end of period | $ | 328,493,193 | $ | 321,867,655 |
9 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Growth Fund
June 30, 2020
Financial Highlights
Class A | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 28.130 | $ | 23.610 | $ | 26.650 | $ | 22.300 | $ | 22.230 | $ | 21.670 | ||||||||||||
Income (Loss) From Operations |
| |||||||||||||||||||||||
Net investment income (loss)(1) | $ | (0.034 | ) | $ | (0.037 | ) | $ | (0.034 | ) | $ | (0.021 | ) | $ | 0.047 | $ | 0.140 | ||||||||
Net realized and unrealized gain | 2.264 | 7.095 | 0.301 | 5.680 | 0.451 | 1.387 | ||||||||||||||||||
Total income from operations | $ | 2.230 | $ | 7.058 | $ | 0.267 | $ | 5.659 | $ | 0.498 | $ | 1.527 | ||||||||||||
Less Distributions |
| |||||||||||||||||||||||
From net investment income | $ | — | $ | — | $ | — | $ | (0.029 | ) | $ | (0.085 | ) | $ | — | ||||||||||
From net realized gain | — | (2.538 | ) | (3.307 | ) | (1.280 | ) | (0.343 | ) | (0.967 | ) | |||||||||||||
Total distributions | $ | — | $ | (2.538 | ) | $ | (3.307 | ) | $ | (1.309 | ) | $ | (0.428 | ) | $ | (0.967 | ) | |||||||
Net asset value — End of period | $ | 30.360 | $ | 28.130 | $ | 23.610 | $ | 26.650 | $ | 22.300 | $ | 22.230 | ||||||||||||
Total Return(2)(3) | 7.93 | %(4) | 30.38 | % | 0.27 | % | 25.42 | % | 2.32 | % | 7.04 | % | ||||||||||||
Ratios/Supplemental Data |
| |||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 240,943 | $ | 236,457 | $ | 190,017 | $ | 209,606 | $ | 194,018 | $ | 214,135 | ||||||||||||
Ratios (as a percentage of average daily net assets): | ||||||||||||||||||||||||
Expenses(3)(5) | 1.05 | %(6) | 1.05 | % | 1.05 | %(7) | 1.05 | %(7) | 1.05 | %(7) | 1.05 | %(7) | ||||||||||||
Net investment income (loss) | (0.25 | )%(6) | (0.14 | )% | (0.12 | )%(7) | (0.08 | )%(7) | 0.22 | %(7) | 0.62 | %(7) | ||||||||||||
Portfolio Turnover of the Portfolio | — | — | 20 | %(4)(8) | 50 | %(8) | 60 | %(8) | 55 | %(8) | ||||||||||||||
Portfolio Turnover of the Fund | 28 | %(4) | 40 | % | 28 | %(4)(9) | — | — | — |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges. |
(3) | The administrator reimbursed certain operating expenses (equal to 0.03%, 0.04%, 0.04%, 0.06%, 0.08% and 0.07% of average daily net assets for the six months ended June 30, 2020 and the years ended December 31, 2019, 2018, 2017, 2016 and 2015, respectively). Absent this reimbursement, total return would be lower. |
(4) | Not annualized. |
(5) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(6) | Annualized. |
(7) | Includes the Fund’s share of the Portfolio’s allocated expenses for the period while the Fund was investing in the Portfolio. |
(8) | Portfolio turnover represents the rate of portfolio activity for the period while the Fund was investing in the Portfolio. |
(9) | For the period from May 14, 2018 through December 31, 2018 when the Fund was making investments directly in securities. |
References to Portfolio herein are to Growth Portfolio, a Massachusetts business trust in which the Fund invested all of its investable assets prior to the close of business on May 11, 2018 and which had the same investment objective and policies as the Fund during such period.
10 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Growth Fund
June 30, 2020
Financial Highlights — continued
Class C | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 22.790 | $ | 19.660 | $ | 22.870 | $ | 19.410 | $ | 19.460 | $ | 19.230 | ||||||||||||
Income (Loss) From Operations |
| |||||||||||||||||||||||
Net investment loss(1) | $ | (0.110 | ) | $ | (0.206 | ) | $ | (0.214 | ) | $ | (0.183 | ) | $ | (0.101 | ) | $ | (0.025 | ) | ||||||
Net realized and unrealized gain | 1.820 | 5.874 | 0.311 | 4.923 | 0.394 | 1.222 | ||||||||||||||||||
Total income from operations | $ | 1.710 | $ | 5.668 | $ | 0.097 | $ | 4.740 | $ | 0.293 | $ | 1.197 | ||||||||||||
Less Distributions |
| |||||||||||||||||||||||
From net realized gain | $ | — | $ | (2.538 | ) | $ | (3.307 | ) | $ | (1.280 | ) | $ | (0.343 | ) | $ | (0.967 | ) | |||||||
Total distributions | $ | — | $ | (2.538 | ) | $ | (3.307 | ) | $ | (1.280 | ) | $ | (0.343 | ) | $ | (0.967 | ) | |||||||
Net asset value — End of period | $ | 24.500 | $ | 22.790 | $ | 19.660 | $ | 22.870 | $ | 19.410 | $ | 19.460 | ||||||||||||
Total Return(2)(3) | 7.55 | %(4) | 29.35 | % | (0.43 | )% | 24.45 | % | 1.57 | % | 6.20 | % | ||||||||||||
Ratios/Supplemental Data |
| |||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 17,287 | $ | 17,501 | $ | 35,061 | $ | 41,450 | $ | 41,272 | $ | 48,285 | ||||||||||||
Ratios (as a percentage of average daily net assets): | ||||||||||||||||||||||||
Expenses(3)(5) | 1.80 | %(6) | 1.80 | % | 1.80 | %(7) | 1.80 | %(7) | 1.80 | %(7) | 1.80 | %(7) | ||||||||||||
Net investment loss | (1.00 | )%(6) | (0.91 | )% | (0.87 | )%(7) | (0.83 | )%(7) | (0.53 | )%(7) | (0.13 | )%(7) | ||||||||||||
Portfolio Turnover of the Portfolio | — | — | 20 | %(4)(8) | 50 | %(8) | 60 | %(8) | 55 | %(8) | ||||||||||||||
Portfolio Turnover of the Fund | 28 | %(4) | 40 | % | 28 | %(4)(9) | — | — | — |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges. |
(3) | The administrator reimbursed certain operating expenses (equal to 0.03%, 0.04%, 0.04%, 0.06%, 0.08% and 0.07% of average daily net assets for the six months ended June 30, 2020 and the years ended December 31, 2019, 2018, 2017, 2016 and 2015, respectively). Absent this reimbursement, total return would be lower. |
(4) | Not annualized. |
(5) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(6) | Annualized. |
(7) | Includes the Fund’s share of the Portfolio’s allocated expenses for the period while the Fund was investing in the Portfolio. |
(8) | Portfolio turnover represents the rate of portfolio activity for the period while the Fund was investing in the Portfolio. |
(9) | For the period from May 14, 2018 through December 31, 2018 when the Fund was making investments directly in securities. |
References to Portfolio herein are to Growth Portfolio, a Massachusetts business trust in which the Fund invested all of its investable assets prior to the close of business on May 11, 2018 and which had the same investment objective and policies as the Fund during such period.
11 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Growth Fund
June 30, 2020
Financial Highlights — continued
Class I | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 29.200 | $ | 24.380 | $ | 27.340 | $ | 22.850 | $ | 22.760 | $ | 22.120 | ||||||||||||
Income (Loss) From Operations |
| |||||||||||||||||||||||
Net investment income(1) | $ | 0.000 | (2) | $ | 0.029 | $ | 0.040 | $ | 0.043 | $ | 0.108 | $ | 0.192 | |||||||||||
Net realized and unrealized gain | 2.360 | 7.329 | 0.307 | 5.820 | 0.461 | 1.415 | ||||||||||||||||||
Total income from operations | $ | 2.360 | $ | 7.358 | $ | 0.347 | $ | 5.863 | $ | 0.569 | $ | 1.607 | ||||||||||||
Less Distributions |
| |||||||||||||||||||||||
From net investment income | $ | — | $ | — | $ | — | $ | (0.093 | ) | $ | (0.136 | ) | $ | — | ||||||||||
From net realized gain | — | (2.538 | ) | (3.307 | ) | (1.280 | ) | (0.343 | ) | (0.967 | ) | |||||||||||||
Total distributions | $ | — | $ | (2.538 | ) | $ | (3.307 | ) | $ | (1.373 | ) | $ | (0.479 | ) | $ | (0.967 | ) | |||||||
Net asset value — End of period | $ | 31.560 | $ | 29.200 | $ | 24.380 | $ | 27.340 | $ | 22.850 | $ | 22.760 | ||||||||||||
Total Return(3)(4) | 8.08 | %(5) | 30.65 | % | 0.56 | % | 25.72 | % | 2.59 | % | 7.26 | % | ||||||||||||
Ratios/Supplemental Data |
| |||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 68,238 | $ | 65,646 | $ | 78,812 | $ | 78,775 | $ | 61,036 | $ | 58,746 | ||||||||||||
Ratios (as a percentage of average daily net assets): | ||||||||||||||||||||||||
Expenses(4)(6) | 0.80 | %(7) | 0.80 | % | 0.80 | %(8) | 0.80 | %(8) | 0.80 | %(8) | 0.80 | %(8) | ||||||||||||
Net investment income | 0.00 | %(7)(9) | 0.10 | % | 0.14 | %(8) | 0.16 | %(8) | 0.48 | %(8) | 0.84 | %(8) | ||||||||||||
Portfolio Turnover of the Portfolio | — | — | 20 | %(5)(10) | 50 | %(10) | 60 | %(10) | 55 | %(10) | ||||||||||||||
Portfolio Turnover of the Fund | 28 | %(5) | 40 | % | 28 | %(5)(11) | — | — | — |
(1) | Computed using average shares outstanding. |
(2) | Amount is less than $0.0005. |
(3) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested. |
(4) | The administrator reimbursed certain operating expenses (equal to 0.03%, 0.04%, 0.04%, 0.06%, 0.08% and 0.07% of average daily net assets for the six months ended June 30, 2020 and the years ended December 31, 2019, 2018, 2017, 2016 and 2015, respectively). Absent this reimbursement, total return would be lower. |
(5) | Not annualized. |
(6) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(7) | Annualized. |
(8) | Includes the Fund’s share of the Portfolio’s allocated expenses for the period while the Fund was investing in the Portfolio. |
(9) | Amount is less than 0.005%. |
(10) | Portfolio turnover represents the rate of portfolio activity for the period while the Fund was investing in the Portfolio. |
(11) | For the period from May 14, 2018 through December 31, 2018 when the Fund was making investments directly in securities. |
References to Portfolio herein are to Growth Portfolio, a Massachusetts business trust in which the Fund invested all of its investable assets prior to the close of business on May 11, 2018 and which had the same investment objective and policies as the Fund during such period.
12 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Growth Fund
June 30, 2020
Financial Highlights — continued
Class R | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 27.230 | $ | 22.980 | $ | 26.090 | $ | 21.880 | $ | 21.800 | $ | 21.320 | ||||||||||||
Income (Loss) From Operations |
| |||||||||||||||||||||||
Net investment income (loss)(1) | $ | (0.066 | ) | $ | (0.105 | ) | $ | (0.104 | ) | $ | (0.082 | ) | $ | (0.010 | ) | $ | 0.059 | |||||||
Net realized and unrealized gain | 2.196 | 6.893 | 0.301 | 5.572 | 0.439 | 1.388 | ||||||||||||||||||
Total income from operations | $ | 2.130 | $ | 6.788 | $ | 0.197 | $ | 5.490 | $ | 0.429 | $ | 1.447 | ||||||||||||
Less Distributions |
| |||||||||||||||||||||||
From net investment income | $ | — | $ | — | $ | — | $ | — | $ | (0.006 | ) | $ | — | |||||||||||
From net realized gain | — | (2.538 | ) | (3.307 | ) | (1.280 | ) | (0.343 | ) | (0.967 | ) | |||||||||||||
Total distributions | $ | — | $ | (2.538 | ) | $ | (3.307 | ) | $ | (1.280 | ) | $ | (0.349 | ) | $ | (0.967 | ) | |||||||
Net asset value — End of period | $ | 29.360 | $ | 27.230 | $ | 22.980 | $ | 26.090 | $ | 21.880 | $ | 21.800 | ||||||||||||
Total Return(2)(3) | 7.82 | %(4) | 30.03 | % | 0.01 | % | 25.12 | % | 2.03 | % | 6.77 | % | ||||||||||||
Ratios/Supplemental Data |
| |||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 2,026 | $ | 2,264 | $ | 3,030 | $ | 3,447 | $ | 3,217 | $ | 4,186 | ||||||||||||
Ratios (as a percentage of average daily net assets): | ||||||||||||||||||||||||
Expenses(3)(5) | 1.30 | %(6) | 1.30 | % | 1.30 | %(7) | 1.30 | %(7) | 1.30 | %(7)�� | 1.30 | %(7) | ||||||||||||
Net investment income (loss) | (0.50 | )%(6) | (0.39 | )% | (0.37 | )%(7) | (0.33 | )%(7) | (0.05 | )%(7) | 0.27 | %(7) | ||||||||||||
Portfolio Turnover of the Portfolio | — | — | 20 | %(4)(8) | 50 | %(8) | 60 | %(8) | 55 | %(8) | ||||||||||||||
Portfolio Turnover of the Fund | 28 | %(4) | 40 | % | 28 | %(4)(9) | — | — | — |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested. |
(3) | The administrator reimbursed certain operating expenses (equal to 0.03%, 0.04%, 0.04%, 0.06%, 0.08% and 0.07% of average daily net assets for the six months ended June 30, 2020 and the years ended December 31, 2019, 2018, 2017, 2016 and 2015, respectively). Absent this reimbursement, total return would be lower. |
(4) | Not annualized. |
(5) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(6) | Annualized. |
(7) | Includes the Fund’s share of the Portfolio’s allocated expenses for the period while the Fund was investing in the Portfolio. |
(8) | Portfolio turnover represents the rate of portfolio activity for the period while the Fund was investing in the Portfolio. |
(9) | For the period from May 14, 2018 through December 31, 2018 when the Fund was making investments directly in securities. |
References to Portfolio herein are to Growth Portfolio, a Massachusetts business trust in which the Fund invested all of its investable assets prior to the close of business on May 11, 2018 and which had the same investment objective and policies as the Fund during such period.
13 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Growth Fund
June 30, 2020
Notes to Financial Statements (Unaudited)
1 Significant Accounting Policies
Eaton Vance Growth Fund (the Fund) is a diversified series of Eaton Vance Special Investment Trust (the Trust). The Trust is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company. The Fund’s investment objective is to seek total return. The Fund offers four classes of shares. Class A shares are generally sold subject to a sales charge imposed at time of purchase. Class C shares are sold at net asset value and are generally subject to a contingent deferred sales charge (see Note 5). Effective January 25, 2019, Class C shares generally automatically convert to Class A shares ten years after their purchase as described in the Fund’s prospectus. Class I and Class R shares are sold at net asset value and are not subject to a sales charge. Each class represents a pro-rata interest in the Fund, but votes separately on class-specific matters and (as noted below) is subject to different expenses. Realized and unrealized gains and losses and net investment income and losses, other than class-specific expenses, are allocated daily to each class of shares based on the relative net assets of each class to the total net assets of the Fund. Each class of shares differs in its distribution plan and certain other class-specific expenses.
The following is a summary of significant accounting policies of the Fund. The policies are in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The Fund is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946.
A Investment Valuation — The following methodologies are used to determine the market value or fair value of investments.
Equity Securities. Equity securities listed on a U.S. securities exchange generally are valued at the last sale or closing price on the day of valuation or, if no sales took place on such date, at the mean between the closing bid and ask prices on the exchange where such securities are principally traded. Equity securities listed on the NASDAQ Global or Global Select Market generally are valued at the NASDAQ official closing price. Unlisted or listed securities for which closing sales prices or closing quotations are not available are valued at the mean between the latest available bid and ask prices.
Foreign Securities and Currencies. Foreign securities and currencies are valued in U.S. dollars, based on foreign currency exchange rate quotations supplied by a third party pricing service. The pricing service uses a proprietary model to determine the exchange rate. Inputs to the model include reported trades and implied bid/ask spreads. The daily valuation of exchange-traded foreign securities generally is determined as of the close of trading on the principal exchange on which such securities trade. Events occurring after the close of trading on foreign exchanges may result in adjustments to the valuation of foreign securities to more accurately reflect their fair value as of the close of regular trading on the New York Stock Exchange. When valuing foreign equity securities that meet certain criteria, the Fund’s Trustees have approved the use of a fair value service that values such securities to reflect market trading that occurs after the close of the applicable foreign markets of comparable securities or other instruments that have a strong correlation to the fair-valued securities.
Affiliated Fund. The Fund may invest in Eaton Vance Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by Eaton Vance Management (EVM). While Cash Reserves Fund is not a registered money market mutual fund, it conducts all of its investment activities in accordance with the requirements of Rule 2a-7 under the 1940 Act. Investments in Cash Reserves Fund are valued at the closing net asset value per unit on the valuation day. Cash Reserves Fund generally values its investment securities based on available market quotations provided by a third party pricing service.
Fair Valuation. Investments for which valuations or market quotations are not readily available or are deemed unreliable are valued at fair value using methods determined in good faith by or at the direction of the Trustees of the Fund in a manner that most fairly reflects the security’s “fair value”, which is the amount that the Fund might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of relevant factors, which are likely to vary from one pricing context to another. These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issuer or of comparable companies or entities, quotations or relevant information obtained from broker/dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the company’s or entity’s financial statements, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.
B Investment Transactions — Investment transactions for financial statement purposes are accounted for on a trade date basis. Realized gains and losses on investments sold are determined on the basis of identified cost.
C Income — Dividend income is recorded on the ex-dividend date for dividends received in cash and/or securities. However, if the ex-dividend date has passed, certain dividends from foreign securities are recorded as the Fund is informed of the ex-dividend date. Withholding taxes on foreign dividends and capital gains have been provided for in accordance with the Fund’s understanding of the applicable countries’ tax rules and rates.
D Federal Taxes — The Fund’s policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its net investment income, and all or substantially all of its net realized capital gains. Accordingly, no provision for federal income or excise tax is necessary.
As of June 30, 2020, the Fund had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. The Fund files a U.S. federal income tax return annually after its fiscal year-end, which is subject to examination by the Internal Revenue Service for a period of three years from the date of filing.
14 |
Table of Contents
Eaton Vance
Growth Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
E Expenses — The majority of expenses of the Trust are directly identifiable to an individual fund. Expenses which are not readily identifiable to a specific fund are allocated taking into consideration, among other things, the nature and type of expense and the relative size of the funds.
F Foreign Currency Translation — Investment valuations, other assets, and liabilities initially expressed in foreign currencies are translated each business day into U.S. dollars based upon current exchange rates. Purchases and sales of foreign investment securities and income and expenses denominated in foreign currencies are translated into U.S. dollars based upon currency exchange rates in effect on the respective dates of such transactions. Recognized gains or losses on investment transactions attributable to changes in foreign currency exchange rates are recorded for financial statement purposes as net realized gains and losses on investments. That portion of unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed.
G Use of Estimates — The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.
H Indemnifications — Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund. Under Massachusetts law, if certain conditions prevail, shareholders of a Massachusetts business trust (such as the Trust) could be deemed to have personal liability for the obligations of the Trust. However, the Trust’s Declaration of Trust contains an express disclaimer of liability on the part of Fund shareholders and the By-laws provide that the Trust shall assume, upon request by the shareholder, the defense on behalf of any Fund shareholders. Moreover, the By-laws also provide for indemnification out of Fund property of any shareholder held personally liable solely by reason of being or having been a shareholder for all loss or expense arising from such liability. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.
I Interim Financial Statements — The interim financial statements relating to June 30, 2020 and for the six months then ended have not been audited by an independent registered public accounting firm, but in the opinion of the Fund’s management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial statements.
2 Distributions to Shareholders and Income Tax Information
It is the present policy of the Fund to make at least one distribution annually (normally in December) of all or substantially all of its net investment income and to distribute annually all or substantially all of its net realized capital gains. Distributions to shareholders are recorded on the ex-dividend date. Distributions are declared separately for each class of shares. Shareholders may reinvest income and capital gain distributions in additional shares of the same class of the Fund at the net asset value as of the ex-dividend date or, at the election of the shareholder, receive distributions in cash. Distributions to shareholders are determined in accordance with income tax regulations, which may differ from U.S. GAAP. As required by U.S. GAAP, only distributions in excess of tax basis earnings and profits are 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. For tax purposes, distributions from short-term capital gains are considered to be from ordinary income.
The cost and unrealized appreciation (depreciation) of investments of the Fund at June 30, 2020, as determined on a federal income tax basis, were as follows:
Aggregate cost | $166,792,447 | |||
Gross unrealized appreciation | $ | 165,048,669 | ||
Gross unrealized depreciation | (3,072,039 | ) | ||
Net unrealized appreciation | $ | 161,976,630 |
3 Investment Adviser Fee and Other Transactions with Affiliates
The investment adviser fee is earned by Boston Management and Research (BMR), a subsidiary of EVM, as compensation for investment advisory services rendered to the Fund. The fee is computed at an annual rate of 0.65% of the Fund’s average daily net assets up to $500 million and is payable monthly. On net assets of $500 million and over, the annual fee is reduced. For the six months ended June 30, 2020, the Fund’s investment adviser fee amounted to $985,385 or 0.65% (annualized) of the Fund’s average daily net assets. The Fund invests its cash in Cash Reserves Fund. EVM does not currently receive a fee for advisory services provided to Cash Reserves Fund.
EVM serves as the administrator of the Fund, but currently receives no compensation. EVM has agreed to reimburse the Fund’s expenses to the extent that total annual operating expenses (relating to ordinary operating expenses only) exceed 1.05%, 1.80%, 0.80% and 1.30% of the Fund’s average daily net
15 |
Table of Contents
Eaton Vance
Growth Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
assets for Class A, Class C, Class I and Class R, respectively. This agreement may be changed or terminated after April 30, 2021. Pursuant to this agreement, EVM was allocated $52,125 of the Fund’s operating expenses for the six months ended June 30, 2020.
EVM provides sub-transfer agency and related services to the Fund pursuant to a Sub-Transfer Agency Support Services Agreement. For the six months ended June 30, 2020, EVM earned $45,311 from the Fund pursuant to such agreement, which is included in transfer and dividend disbursing agent fees on the Statement of Operations. The Fund was informed that Eaton Vance Distributors, Inc. (EVD), an affiliate of EVM and the Fund’s principal underwriter, received $3,589 as its portion of the sales charge on sales of Class A shares for the six months ended June 30, 2020. EVD also received distribution and service fees from Class A, Class C and Class R shares (see Note 4) and contingent deferred sales charges (see Note 5).
Trustees and officers of the Fund who are members of EVM’s or BMR’s organizations receive remuneration for their services to the Fund out of the investment adviser fee. Trustees of the Fund who are not affiliated with the investment adviser may elect to defer receipt of all or a percentage of their annual fees in accordance with the terms of the Trustees Deferred Compensation Plan. For the six months ended June 30, 2020, no significant amounts have been deferred. Certain officers and Trustees of the Fund are officers of the above organizations.
4 Distribution Plans
The Fund has in effect a distribution plan for Class A shares (Class A Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class A Plan, the Fund pays EVD a distribution and service fee of 0.25% per annum of its average daily net assets attributable to Class A shares for distribution services and facilities provided to the Fund by EVD, as well as for personal services and/or the maintenance of shareholder accounts. Distribution and service fees paid or accrued to EVD for the six months ended June 30, 2020 amounted to $278,366 for Class A shares. The Fund also has in effect distribution plans for Class C shares (Class C Plan) and Class R shares (Class R Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class C Plan, the Fund pays EVD amounts equal to 0.75% per annum of its average daily net assets attributable to Class C shares for providing ongoing distribution services and facilities to the Fund. For the six months ended June 30, 2020, the Fund paid or accrued to EVD $60,563 for Class C shares. The Class R Plan requires the Fund to pay EVD an amount up to 0.50% per annum of its average daily net assets attributable to Class R shares for providing ongoing distribution services and facilities to the Fund. The Trustees of the Trust have currently limited Class R distribution payments to 0.25% per annum of the average daily net assets attributable to Class R shares. For the six months ended June 30, 2020, the Fund paid or accrued to EVD $2,640 for Class R shares.
Pursuant to the Class C and Class R Plans, the Fund also makes payments of service fees to EVD, financial intermediaries and other persons in amounts equal to 0.25% per annum of its average daily net assets attributable to that class. Service fees paid or accrued are for personal services and/or the maintenance of shareholder accounts. They are separate and distinct from the sales commissions and distribution fees payable to EVD. Service fees paid or accrued for the six months ended June 30, 2020 amounted to $20,188 and $2,640 for Class C and Class R shares, respectively.
Distribution and service fees are subject to the limitations contained in the Financial Industry Regulatory Authority Rule 2341(d).
5 Contingent Deferred Sales Charges
A contingent deferred sales charge (CDSC) of 1% generally is imposed on redemptions of Class C shares made within 12 months of purchase. Class A shares may be subject to a 1% CDSC if redeemed within 18 months of purchase (depending on the circumstances of purchase). Generally, the CDSC is based upon the lower of the net asset value at date of redemption or date of purchase. No charge is levied on shares acquired by reinvestment of dividends or capital gain distributions. For the six months ended June 30, 2020, the Fund was informed that EVD received approximately $2,000 and $1,000 of CDSCs paid by Class A and Class C shareholders, respectively.
6 Purchases and Sales of Investments
Purchases and sales of investments, other than short-term obligations, aggregated $84,096,802 and $99,777,361, respectively, for the six months ended June 30, 2020.
16 |
Table of Contents
Eaton Vance
Growth Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
7 Shares of Beneficial Interest
The Fund’s Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value). Such shares may be issued in a number of different series (such as the Fund) and classes. Transactions in Fund shares were as follows:
Class A | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 241,381 | 424,596 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | — | 683,115 | ||||||
Redemptions | (763,320 | ) | (1,391,551 | ) | ||||
Converted from Class C shares | 51,179 | 643,576 | ||||||
Net increase (decrease) | (470,760 | ) | 359,736 | |||||
Class C | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 110,560 | 80,631 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | — | 74,932 | ||||||
Redemptions | (109,800 | ) | (396,688 | ) | ||||
Converted to Class A shares | (63,296 | ) | (774,084 | ) | ||||
Net decrease | (62,536 | ) | (1,015,209 | ) | ||||
Class I | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 203,230 | 528,614 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | — | 198,209 | ||||||
Redemptions | (288,854 | ) | (1,711,650 | ) | ||||
Net decrease | (85,624 | ) | (984,827 | ) | ||||
Class R | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 27,830 | 15,637 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | — | 6,027 | ||||||
Redemptions | (41,941 | ) | (70,349 | ) | ||||
Net decrease | (14,111 | ) | (48,685 | ) |
17 |
Table of Contents
Eaton Vance
Growth Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
8 Line of Credit
The Fund participates with other portfolios and funds managed by EVM and its affiliates in an $800 million unsecured line of credit agreement with a group of banks, which is in effect through October 27, 2020. In connection with the renewal of the agreement on October 29, 2019, funds managed by Calvert Research and Management, an affiliate of EVM, were added as participating funds to the agreement and the borrowing limit was increased from $625 million. Borrowings are made by the Fund solely for temporary purposes related to redemptions and other short-term cash needs. Interest is charged to the Fund based on its borrowings at an amount above either the Eurodollar rate or Federal Funds rate. In addition, a fee computed at an annual rate of 0.15% on the daily unused portion of the line of credit is allocated among the participating portfolios and funds at the end of each quarter. Because the line of credit is not available exclusively to the Fund, it may be unable to borrow some or all of its requested amounts at any particular time. The Fund did not have any significant borrowings or allocated fees during the six months ended June 30, 2020.
9 Securities Lending Agreement
The Fund has established a securities lending agreement with State Street Bank and Trust Company (SSBT) as securities lending agent in which the Fund lends portfolio securities to qualified borrowers in exchange for collateral consisting of either cash or securities issued or guaranteed by the U.S. government or its agencies or instrumentalities in an amount at least equal to the market value of the securities on loan. The market value of securities loaned is determined daily and any additional required collateral is delivered to the Fund on the next business day. Cash collateral is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market fund registered under the 1940 Act. The Fund earns interest on the amount invested but it must pay (and at times receive from) the broker a loan rebate fee computed as a varying percentage of the collateral received. For security loans secured by non-cash collateral, the Fund earns a negotiated lending fee from the borrower. A portion of the income earned by the Fund from its investment of cash collateral, net of rebate fees, and lending fees received is allocated to SSBT for its services as lending agent and the portion allocated to the Fund is presented as securities lending income, net on the Statement of Operations. Non-cash collateral is held by the lending agent on behalf of the Fund and cannot be sold or re-pledged by the Fund; accordingly, such collateral is not reflected in the Statement of Assets and Liabilities.
The Fund is subject to possible delay in the recovery of loaned securities. Pursuant to the securities lending agreement, SSBT has provided indemnification to the Fund in the event of default by a borrower with respect to a loan. The Fund bears the risk of loss with respect to the investment of cash collateral.
At June 30, 2020, the value of the securities loaned (all common stocks) and the value of the collateral received, which exceeded the value of the securities loaned, amounted to $1,653,338 and $1,668,742, respectively. Collateral received was comprised of U.S. government and/or agencies securities. The securities lending transactions have no contractual maturity date and each of the Fund and borrower has the option to terminate a loan at any time.
10 Investments in Affiliated Funds
At June 30, 2020, the value of the Fund’s investment in affiliated funds was $36,266, which represents less than 0.05% of the Fund’s net assets. Transactions in affiliated funds by the Fund for the six months ended June 30, 2020 were as follows:
Name of affiliated fund | Value, beginning of period | Purchases | Sales proceeds | Net realized gain (loss) | Change in unrealized appreciation (depreciation) | Value, end of period | Dividend income | Units, end of period | ||||||||||||||||||||||||
Short-Term Investments | ||||||||||||||||||||||||||||||||
Eaton Vance Cash Reserves Fund, LLC | $ | 891,636 | $ | 18,543,097 | $ | (19,399,110 | ) | $ | 714 | $ | (71 | ) | $ | 36,266 | $ | 4,298 | 36,266 |
11 Fair Value Measurements
Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
• | Level 1 – quoted prices in active markets for identical investments |
• | Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
• | Level 3 – significant unobservable inputs (including a fund’s own assumptions in determining the fair value of investments) |
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Eaton Vance
Growth Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
In cases where the inputs used to measure fair value fall in different levels of the fair value hierarchy, the level disclosed is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
At June 30, 2020, the hierarchy of inputs used in valuing the Fund’s investments, which are carried at value, were as follows:
Asset Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stocks | ||||||||||||||||
Communication Services | $ | 44,361,725 | $ | — | $ | — | $ | 44,361,725 | ||||||||
Consumer Discretionary | 53,659,953 | — | — | 53,659,953 | ||||||||||||
Consumer Staples | 7,620,972 | — | — | 7,620,972 | ||||||||||||
Financials | 9,487,323 | — | — | 9,487,323 | ||||||||||||
Health Care | 55,935,705 | 1,783,667 | — | 57,719,372 | ||||||||||||
Industrials | 20,955,839 | — | — | 20,955,839 | ||||||||||||
Information Technology | 133,037,156 | — | — | 133,037,156 | ||||||||||||
Materials | 1,890,471 | — | — | 1,890,471 | ||||||||||||
Total Common Stocks | $ | 326,949,144 | $ | 1,783,667 | * | $ | — | $ | 328,732,811 | |||||||
Short-Term Investments | $ | — | $ | 36,266 | $ | — | $ | 36,266 | ||||||||
Total Investments | $ | 326,949,144 | $ | 1,819,933 | $ | — | $ | 328,769,077 |
* | Includes foreign equity securities whose values were adjusted to reflect market trading of comparable securities or other correlated instruments that occurred after the close of trading in their applicable foreign markets. |
12 Risks and Uncertainties
Pandemic Risk
An outbreak of respiratory disease caused by a novel coronavirus that was first detected in China in December 2019 has spread rapidly internationally. This coronavirus has resulted in closing borders, enhanced health screenings, changes to healthcare service preparation and delivery, quarantines, cancellations, disruptions to supply chains and customer activity, as well as general concern and uncertainty. The impact of this outbreak has negatively affected the worldwide economy, as well as the economies of individual countries and individual companies and can affect the market in general in significant and unforeseen ways. Health crises caused by outbreaks, such as the coronavirus outbreak, may exacerbate other pre-existing political, social and economic risks and disrupt normal market conditions and operations. The near-term impact of this coronavirus has resulted in substantial market volatility, which may have an adverse effect on the Fund’s investments.
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Eaton Vance
Growth Fund
June 30, 2020
Board of Trustees’ Contract Approval
Overview of the Contract Review Process
The Investment Company Act of 1940, as amended (the “1940 Act”), provides, in substance, that the investment advisory agreement between a fund and its investment adviser will continue in effect from year-to-year only if its continuation is approved on an annual basis by a vote of the fund’s board of trustees, including a majority of the trustees who are not “interested persons” of the fund (“independent trustees”), cast in person at a meeting called for the purpose of considering such approval.
At a meeting held on April 22, 2020 (the “April 2020 Meeting”), the Boards of Trustees/Directors comprised of the same individuals (collectively, the “Board”) that oversees a majority of the registered investment companies advised by Eaton Vance Management or its affiliate, Boston Management and Research (the “Eaton Vance Funds”), including a majority of the independent trustees (the “Independent Trustees”), voted to approve the continuation of existing investment advisory agreements and sub-advisory agreements(1) for each of the Eaton Vance Funds for an additional one-year period. The Board relied upon the affirmative recommendation of its Contract Review Committee, which is a committee exclusively comprised of Independent Trustees. Prior to making its recommendation, the Contract Review Committee reviewed information furnished by the adviser and sub-adviser to each of the Eaton Vance Funds (including information specifically requested by the Board) for a series of formal meetings held between February and April 2020. Members of the Contract Review Committee also considered information received at prior meetings of the Board and its committees, to the extent such information was relevant to the Contract Review Committee’s annual evaluation of the investment advisory agreements and sub-advisory agreements.
In connection with its evaluation of the investment advisory agreements and sub-advisory agreements, the Board considered various information relating to the Eaton Vance Funds. This included information applicable to all or groups of Eaton Vance Funds, which is referenced immediately below, and information applicable to the particular Eaton Vance Fund covered by this report (additional fund-specific information is referenced below under “Results of the Contract Review Process”). (For funds that invest through one or more underlying portfolios, references to “each fund” in this section may include information that was considered at the portfolio-level.)
Information about Fees, Performance and Expenses
• | A report from an independent data provider comparing advisory and other fees paid by each fund to such fees paid by comparable funds, as identified by the independent data provider (“comparable funds”); |
• | A report from an independent data provider comparing each fund’s total expense ratio (and its components) to those of comparable funds; |
• | A report from an independent data provider comparing the investment performance of each fund (including, as relevant, total return data, income data, Sharpe ratios and information ratios) to the investment performance of comparable funds and, as applicable, benchmark indices, over various time periods; |
• | In certain instances, data regarding investment performance relative to customized groups of peer funds and blended indices identified by the adviser in consultation with the Portfolio Management Committee of the Board; |
• | Comparative information concerning the fees charged and services provided by the adviser and sub-adviser to each fund in managing other accounts (which may include other mutual funds, collective investment funds and institutional accounts) using investment strategies and techniques similar to those used in managing such fund(s), if any; |
• | Profitability analyses with respect to the adviser and sub-adviser to each of the funds; |
Information about Portfolio Management and Trading
• | Descriptions of the investment management services provided to each fund, as well as each of the funds’ investment strategies and policies; |
• | The procedures and processes used to determine the fair value of fund assets, when necessary, and actions taken to monitor and test the effectiveness of such procedures and processes; |
• | Information about the policies and practices of each fund’s adviser and sub-adviser (in the context of a sub-adviser, only those with trading responsibilities) with respect to trading, including their processes for seeking best execution of portfolio transactions; |
• | Information about the allocation of brokerage transactions and the benefits, if any, received by the adviser and sub-adviser (in the context of a sub-adviser, only those with trading responsibilities) to each fund as a result of brokerage allocation, including, as applicable, information concerning the acquisition of research through client commission arrangements and policies with respect to “soft dollars”; |
• | Data relating to the portfolio turnover rate of each fund; |
Information about each Adviser and Sub-adviser
• | Reports detailing the financial results and condition of the adviser and sub-adviser to each fund; |
• | Information regarding the individual investment professionals whose responsibilities include portfolio management and investment research for the funds, and, for portfolio managers and certain other investment professionals, information relating to their responsibilities with respect to managing other mutual funds and investment accounts, as applicable; |
(1) | Not all Eaton Vance Funds have entered into a sub-advisory agreement with a sub-adviser. Accordingly, references to “sub-adviser” or “sub-advisory agreement” in this “Overview” section may not be applicable to the particular Eaton Vance Fund covered by this report. |
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Eaton Vance
Growth Fund
June 30, 2020
Board of Trustees’ Contract Approval — continued
• | The Code of Ethics of the adviser and its affiliates and the sub-adviser of each fund, together with information relating to compliance with, and the administration of, such codes; |
• | Policies and procedures relating to proxy voting and the handling of corporate actions and class actions; |
• | Information concerning the resources devoted to compliance efforts undertaken by the adviser and its affiliates and the sub-adviser of each fund, if any, including descriptions of their various compliance programs and their record of compliance; |
• | Information concerning the business continuity and disaster recovery plans of the adviser and its affiliates and the sub-adviser of each fund, if any; |
• | A description of Eaton Vance Management’s and Boston Management and Research’s oversight of sub-advisers, including with respect to regulatory and compliance issues, investment management and other matters; |
Other Relevant Information
• | Information concerning the nature, cost and character of the administrative and other non-investment advisory services provided by Eaton Vance Management and its affiliates; |
• | Information concerning oversight of the relationship with the custodian, subcustodians and fund accountants by the adviser and/or administrator to each of the funds; |
• | For an Eaton Vance Fund structured as an exchange-listed closed-end fund, information concerning the benefits of the closed-end fund structure, as well as, where relevant, the closed-end fund’s market prices, trading volume data, distribution rates and other relevant matters; and |
• | The terms of each investment advisory agreement and sub-advisory agreement. |
During the various meetings of the Board and its committees throughout the twelve months ended April 2020, the Trustees received information from portfolio managers and other investment professionals of the advisers and sub-advisers of the funds regarding investment and performance matters, and considered various investment and trading strategies used in pursuing the funds’ investment objectives. The Trustees also received information regarding risk management techniques employed in connection with the management of the funds. The Board and its committees evaluated issues pertaining to industry and regulatory developments, compliance procedures, fund governance and other issues with respect to the funds, and received and participated in reports and presentations provided by Eaton Vance Management, Boston Management and Research and fund sub-advisers, with respect to such matters. In addition to the formal meetings of the Board and its committees, the Independent Trustees held regular teleconferences to discuss, among other topics, matters relating to the continuation of investment advisory agreements and sub-advisory agreements.
The Contract Review Committee was advised throughout the contract review process by Goodwin Procter LLP, independent legal counsel for the Independent Trustees. The members of the Contract Review Committee, with the advice of such counsel, exercised their own business judgment in determining the material factors to be considered in evaluating each investment advisory agreement and sub-advisory agreement and the weight to be given to each such factor. The conclusions reached with respect to each investment advisory agreement and sub-advisory agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each member of the Contract Review Committee may have placed varying emphasis on particular factors in reaching conclusions with respect to each investment advisory agreement and sub-advisory agreement. In evaluating each investment advisory agreement and sub-advisory agreement, including the fee structures and other terms contained in such agreements, the members of the Contract Review Committee were also informed by multiple years of analysis and discussion with the adviser and sub-adviser to each of the Eaton Vance Funds.
In voting its approval of the continuation of existing investment advisory agreements and sub-advisory agreements at the April 2020 Meeting, the Board relied on an order issued by the Securities and Exchange Commission on March 25, 2020, which provided temporary relief from the in-person voting requirements under Section 15 of the 1940 Act in response to the impacts of the COVID-19 pandemic.
Results of the Contract Review Process
Based on its consideration of the foregoing, and such other information it deemed relevant, including the factors and conclusions described below, the Contract Review Committee concluded that the continuation of the investment advisory agreement between Eaton Vance Growth Fund (the “Fund”) and Boston Management and Research (the “Adviser”), including its fee structure, is in the interests of shareholders and, therefore, recommended to the Board approval of the agreement. Based on the recommendation of the Contract Review Committee, the Board, including a majority of the Independent Trustees, voted to approve continuation of the investment advisory agreement for the Fund.
Nature, Extent and Quality of Services
In considering whether to approve the investment advisory agreement for the Fund, the Board evaluated the nature, extent and quality of services provided to the Fund by the Adviser.
The Board considered the Adviser’s management capabilities and investment processes in light of the types of investments held by the Fund, including the education, experience and number of investment professionals and other personnel who provide portfolio management, investment research, and similar services to the Fund. The Board specifically noted that the Adviser has devoted extensive resources to in-house equity research and also draws upon independent research available from third-party sources. The Board also took into account the resources dedicated to portfolio management and other
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Growth Fund
June 30, 2020
Board of Trustees’ Contract Approval — continued
services, the compensation methods of the Adviser and other factors, including the reputation and resources of the Adviser to recruit and retain highly qualified research, advisory and supervisory investment professionals. In addition, the Board considered the time and attention devoted to the Eaton Vance Funds, including the Fund, by senior management, as well as the infrastructure, operational capabilities and support staff in place to assist in the portfolio management and operations of the Fund, including the provision of administrative services. The Board also considered the business-related and other risks to which the Adviser or its affiliates may be subject in managing the Fund.
The Board considered the compliance programs of the Adviser and relevant affiliates thereof. The Board considered compliance and reporting matters regarding, among other things, personal trading by investment professionals, disclosure of portfolio holdings, late trading, frequent trading, portfolio valuation, business continuity and the allocation of investment opportunities. The Board also considered the responses of the Adviser and its affiliates to requests in recent years from regulatory authorities, such as the Securities and Exchange Commission and the Financial Industry Regulatory Authority.
The Board considered other administrative services provided or overseen by Eaton Vance Management and its affiliates, including transfer agency and accounting services. The Board evaluated the benefits to shareholders of investing in a fund that is a part of a large fund complex offering exposure to a variety of asset classes and investment disciplines, as well as the ability, in many cases, to exchange an investment among different funds without incurring additional sales charges.
After consideration of the foregoing factors, among others, the Board concluded that the nature, extent and quality of services provided by the Adviser, taken as a whole, are appropriate and consistent with the terms of the investment advisory agreement.
Fund Performance
The Board compared the Fund’s investment performance to that of comparable funds identified by an independent data provider (the peer group), as well as an appropriate benchmark index. The Board’s review included comparative performance data with respect to the Fund for the one-, three-, five- and ten-year periods ended September 30, 2019. In this regard, the Board noted that the performance of the Fund was lower than the median performance of the Fund’s peer group for the three-year period. The Board also noted that the performance of the Fund was lower than its benchmark index for the three-year period. On the basis of the foregoing, the performance of the Fund over other periods, and other relevant information provided by the Adviser in response to inquiries from the Contract Review Committee, the Board concluded that the performance of the Fund was satisfactory.
Management Fees and Expenses
The Board considered contractual fee rates payable by the Fund for advisory and administrative services (referred to collectively as “management fees”). As part of its review, the Board considered the Fund’s management fees and total expense ratio for the one-year period ended September 30, 2019, as compared to those of comparable funds, before and after giving effect to any undertaking to waive fees or reimburse expenses. The Board also received and considered information about the services offered and the fee rates charged by the Adviser to other types of accounts with investment objectives and strategies that are substantially similar to and/or managed in a similar investment style as the Fund. In this regard, the Board received information about the differences in the nature and scope of services the Adviser provides to the Fund as compared to other types of accounts and the material differences in compliance, reporting and other legal burdens and risks to the Adviser as between the Fund and other types of accounts. The Board also considered factors that had an impact on the Fund’s total expense ratio relative to comparable funds.
After considering the foregoing information, and in light of the nature, extent and quality of the services provided by the Adviser, the Board concluded that the management fees charged for advisory and related services are reasonable.
Profitability and “Fall-Out” Benefits
The Board considered the level of profits realized by the Adviser and relevant affiliates thereof in providing investment advisory and administrative services to the Fund and to all Eaton Vance Funds as a group. The Board considered the level of profits realized without regard to marketing support or other payments by the Adviser and its affiliates to third parties in respect of distribution or other services.
The Board concluded that, in light of the foregoing factors and the nature, extent and quality of the services rendered, the profits realized by the Adviser and its affiliates are deemed not to be excessive.
The Board also considered direct or indirect fall-out benefits received by the Adviser and its affiliates in connection with their respective relationships with the Fund, including the benefits of research services that may be available to the Adviser as a result of securities transactions effected for the Fund and other investment advisory clients.
Economies of Scale
In reviewing management fees and profitability, the Board also considered the extent to which the Adviser and its affiliates, on the one hand, and the Fund, on the other hand, can expect to realize benefits from economies of scale as the assets of the Fund increase. The Board acknowledged the difficulty in accurately measuring the benefits resulting from economies of scale, if any, with respect to the management of any specific fund or group of funds. The
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Eaton Vance
Growth Fund
June 30, 2020
Board of Trustees’ Contract Approval — continued
Board reviewed data summarizing the increases and decreases in the assets of the Fund and of all Eaton Vance Funds as a group over various time periods, and evaluated the extent to which the total expense ratio of the Fund and the profitability of the Adviser and its affiliates may have been affected by such increases or decreases. Based upon the foregoing, the Board concluded that the Fund currently shares in the benefits from economies of scale, if any, when they are realized by the Adviser. The Board also concluded that the structure of the advisory fee, which includes breakpoints at several asset levels, will allow the Fund to continue to benefit from any economies of scale in the future.
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Eaton Vance
Growth Fund
June 30, 2020
Liquidity Risk Management Program
The Fund has implemented a written liquidity risk management program (Program) and related procedures to manage its liquidity in accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (Liquidity Rule). The Liquidity Rule defines “liquidity risk” as the risk that a fund could not meet requests to redeem shares issued by the fund without significant dilution of the remaining investors’ interests in the fund. The Fund’s Board of Trustees/Directors has designated the investment adviser to serve as the administrator of the Program and the related procedures. The administrator has established a Liquidity Risk Management Oversight Committee (Committee) to perform the functions necessary to administer the Program. As part of the Program, the administrator is responsible for identifying illiquid investments and categorizing the relative liquidity of the Fund’s investments in accordance with the Liquidity Rule. Under the Program, the administrator assesses, manages, and periodically reviews the Fund’s liquidity risk, and is responsible for making certain reports to the Fund’s Board of Trustees/Directors and the Securities and Exchange Commission (SEC) regarding the liquidity of the Fund’s investments, and to notify the Board of Trustees/Directors and the SEC of certain liquidity events specified in the Liquidity Rule. The liquidity of the Fund’s portfolio investments is determined based on a number of factors including, but not limited to, relevant market, trading and investment-specific considerations under the Program.
At a meeting of the Fund’s Board of Trustees/Directors, the Committee provided a written report to the Fund’s Board of Trustees/Directors pertaining to the operation, adequacy, and effectiveness of implementation of the Program, as well as the operation of the highly liquid investment minimum (if applicable) for the period December 1, 2018 through December 31, 2019 (Review Period). The Program operated effectively during the Review Period, supporting the administrator’s ability to assess, manage and monitor Fund liquidity risk, including during periods of market volatility and net redemptions. During the Review Period, the Fund met redemption requests on a timely basis.
There can be no assurance that the Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
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Eaton Vance
Growth Fund
June 30, 2020
Officers
Payson F. Swaffield
President
Maureen A. Gemma
Vice President, Secretary and Chief Legal Officer
James F. Kirchner
Treasurer
Richard F. Froio
Chief Compliance Officer
Trustees
William H. Park
Chairperson
Thomas E. Faust Jr.*
Mark R. Fetting
Cynthia E. Frost
George J. Gorman
Valerie A. Mosley
Helen Frame Peters
Keith Quinton
Marcus L. Smith
Susan J. Sutherland
Scott E. Wennerholm
* | Interested Trustee |
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Eaton Vance Funds
Privacy. The Eaton Vance organization is committed to ensuring your financial privacy. Each entity listed below has adopted a privacy policy and procedures (“Privacy Program”) Eaton Vance believes is reasonably designed to protect your personal information and to govern when and with whom Eaton Vance may share your personal information.
• | At the time of opening an account, Eaton Vance generally requires you to provide us with certain information such as name, address, social security number, tax status, account numbers, and account balances. This information is necessary for us to both open an account for you and to allow us to satisfy legal requirements such as applicable anti-money laundering reviews and know-your-customer requirements. |
• | On an ongoing basis, in the normal course of servicing your account, Eaton Vance may share your information with unaffiliated third parties that perform various services for Eaton Vance and/or your account. These third parties include transfer agents, custodians, broker/dealers and our professional advisers, including auditors, accountants, and legal counsel. Eaton Vance may additionally share your personal information with our affiliates. |
• | We believe our Privacy Program is reasonably designed to protect the confidentiality of your personal information and to prevent unauthorized access to that information. |
• | We reserve the right to change our Privacy Program at any time upon proper notification to you. You may want to review our Privacy Program periodically for changes by accessing the link on our homepage: www.eatonvance.com. |
Our pledge of protecting your personal information applies to the following entities within the Eaton Vance organization: the Eaton Vance Family of Funds, Eaton Vance Management, Eaton Vance Investment Counsel, Eaton Vance Distributors, Inc., Eaton Vance Trust Company, Eaton Vance Management (International) Limited, Eaton Vance Advisers International Limited, Eaton Vance Global Advisors Limited, Eaton Vance Management’s Real Estate Investment Group, Boston Management and Research, Calvert Research and Management, and Calvert Funds. This Privacy Notice supersedes all previously issued privacy disclosures. For more information about our Privacy Program or about how your personal information may be used, please call 1-800-262-1122.
Delivery of Shareholder Documents. The Securities and Exchange Commission (SEC) permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called “householding” and it helps eliminate duplicate mailings to shareholders. Eaton Vance, or your financial intermediary, may household the mailing of your documents indefinitely unless you instruct Eaton Vance, or your financial intermediary, 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 intermediary. Your instructions that householding not apply to delivery of your Eaton Vance documents will typically be effective within 30 days of receipt by Eaton Vance or your financial intermediary.
Portfolio Holdings. Each Eaton Vance Fund and its underlying Portfolio(s) (if applicable) files a schedule of portfolio holdings on Part F to Form N-PORT with the SEC. Certain information filed on Form N-PORT may be viewed on the Eaton Vance website at www.eatonvance.com, by calling Eaton Vance at 1-800-262-1122 or in the EDGAR database on the SEC’s website at www.sec.gov.
Proxy Voting. From time to time, funds are required to vote proxies related to the securities held by the funds. The Eaton Vance Funds or their underlying Portfolios (if applicable) vote proxies according to a set of policies and procedures approved by the Funds’ and Portfolios’ Boards. You may obtain a description of these policies and procedures and information on how the Funds or Portfolios voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge, upon request, by calling 1-800-262-1122 and by accessing the SEC’s website at www.sec.gov.
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Investment Adviser
Boston Management and Research
Two International Place
Boston, MA 02110
Administrator
Eaton Vance Management
Two International Place
Boston, MA 02110
Principal Underwriter*
Eaton Vance Distributors, Inc.
Two International Place
Boston, MA 02110
(617) 482-8260
Custodian
State Street Bank and Trust Company
State Street Financial Center, One Lincoln Street
Boston, MA 02111
Transfer Agent
BNY Mellon Investment Servicing (US) Inc.
Attn: Eaton Vance Funds
P.O. Box 9653
Providence, RI 02940-9653
(800) 262-1122
Fund Offices
Two International Place
Boston, MA 02110
* | FINRA BrokerCheck. Investors may check the background of their Investment Professional by contacting the Financial Industry Regulatory Authority (FINRA). FINRA BrokerCheck is a free tool to help investors check the professional background of current and former FINRA-registered securities firms and brokers. FINRA BrokerCheck is available by calling 1-800-289-9999 and at www.FINRA.org. The FINRA BrokerCheck brochure describing this program is available to investors at www.FINRA.org. |
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7729 6.30.20
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Eaton Vance
Large-Cap Value Fund
Semiannual Report
June 30, 2020
Important Note. Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semi-annual shareholder reports will no longer be sent by mail unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (eatonvance.com/funddocuments), and you will be notified by mail each time a report is posted and provided with a website address to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you are a direct investor, you may elect to receive shareholder reports and other communications from the Fund electronically by signing up for e-Delivery at eatonvance.com/edelivery. If you own your shares through a financial intermediary (such as a broker-dealer or bank), you must contact your financial intermediary to sign up.
You may elect to receive all future Fund shareholder reports in paper free of charge. If you are a direct investor, you can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by calling 1-800-262-1122. If you own these shares through a financial intermediary, you must contact your financial intermediary or follow instructions included with this disclosure, if applicable, to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all Eaton Vance funds held directly or to all funds held through your financial intermediary, as applicable.
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Commodity Futures Trading Commission Registration. Effective December 31, 2012, the Commodity Futures Trading Commission (“CFTC”) adopted certain regulatory changes that subject registered investment companies and advisers to regulation by the CFTC if a fund invests more than a prescribed level of its assets in certain CFTC-regulated instruments (including futures, certain options and swap agreements) or markets itself as providing investment exposure to such instruments. The investment adviser has claimed an exclusion from the definition of “commodity pool operator” under the Commodity Exchange Act with respect to its management of the Fund. Accordingly, neither the Fund nor the adviser with respect to the operation of the Fund is subject to CFTC regulation. Because of its management of other strategies, the Fund’s adviser is registered with the CFTC as a commodity pool operator. The adviser is also registered as a commodity trading advisor.
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.
This report must be preceded or accompanied by a current summary prospectus or prospectus. Before investing, investors should consider carefully the investment objective, risks, and charges and expenses of a mutual fund. This and other important information is contained in the summary prospectus and prospectus, which can be obtained from a financial intermediary. Prospective investors should read the prospectus carefully before investing. For further information, please call 1-800-262-1122.
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Semiannual Report June 30, 2020
Eaton Vance
Large-Cap Value Fund
Table of Contents
Performance | 2 | |||
Fund Profile | 2 | |||
Endnotes and Additional Disclosures | 3 | |||
Fund Expenses | 4 | |||
Financial Statements | 5 | |||
Board of Trustees’ Contract Approval | 23 | |||
Liquidity Risk Management Program | 27 | |||
Officers and Trustees | 28 | |||
Important Notices | 29 |
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Eaton Vance
Large-Cap Value Fund
June 30, 2020
Performance1,2
Portfolio Managers Edward J. Perkin, CFA, Aaron S. Dunn, CFA and Bradley T. Galko, CFA
% Average Annual Total Returns | Class Inception Date | Performance Inception Date | Six Months | One Year | Five Years | Ten Years | ||||||||||||||||||
Class A at NAV | 09/23/1931 | 09/23/1931 | –16.23 | % | –8.77 | % | 4.61 | % | 9.14 | % | ||||||||||||||
Class A with 5.75% Maximum Sales Charge | — | — | –21.04 | –14.01 | 3.37 | 8.50 | ||||||||||||||||||
Class C at NAV | 11/04/1994 | 09/23/1931 | –16.52 | –9.41 | 3.83 | 8.32 | ||||||||||||||||||
Class C with 1% Maximum Sales Charge | — | — | –17.36 | –10.31 | 3.83 | 8.32 | ||||||||||||||||||
Class I at NAV | 12/28/2004 | 09/23/1931 | –16.10 | –8.51 | 4.88 | 9.42 | ||||||||||||||||||
Class R at NAV | 02/18/2004 | 09/23/1931 | –16.33 | –8.99 | 4.34 | 8.87 | ||||||||||||||||||
Class R6 at NAV | 07/01/2014 | 09/23/1931 | –16.06 | –8.44 | 4.95 | 9.47 | ||||||||||||||||||
Russell 1000® Value Index | — | — | –16.26 | % | –8.84 | % | 4.64 | % | 10.40 | % | ||||||||||||||
% Total Annual Operating Expense Ratios3 | Class A | Class C | Class I | Class R | Class R6 | |||||||||||||||||||
1.04 | % | 1.80 | % | 0.79 | % | 1.30 | % | 0.72 | % |
Fund Profile
Sector Allocation (% of net assets)4
Top 10 Holdings (% of net assets)4
Berkshire Hathaway, Inc., Class B | 3.7 | % | ||
Johnson & Johnson | 3.7 | |||
Verizon Communications, Inc. | 3.3 | |||
Bank of America Corp. | 2.8 | |||
Medtronic PLC | 2.8 | |||
Walt Disney Co. (The) | 2.7 | |||
Walmart, Inc. | 2.4 | |||
NextEra Energy, Inc. | 2.4 | |||
Cisco Systems, Inc. | 2.3 | |||
Mondelez International, Inc., Class A | 2.1 | |||
Total | 28.2 | % |
See Endnotes and Additional Disclosures in this report.
Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or offering price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance for periods less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to eatonvance.com.
2 |
Table of Contents
Eaton Vance
Large-Cap Value Fund
June 30, 2020
Endnotes and Additional Disclosures
1 | Russell 1000® Value Index is an unmanaged index of U.S. large-cap value stocks. Unless otherwise stated, index returns do not reflect the effect of any applicable sales charges, commissions, expenses, taxes or leverage, as applicable. It is not possible to invest directly in an index. |
2 | Total Returns at NAV do not include applicable sales charges. If sales charges were deducted, the returns would be lower. Total Returns shown with maximum sales charge reflect the stated maximum sales charge. Unless otherwise stated, performance does not reflect the deduction of taxes on Fund distributions or redemptions of Fund shares. |
Performance prior to the inception date of a class may be linked to the performance of an older class of the Fund. This linked performance is adjusted for any applicable sales charge, but is not adjusted for class expense differences. If adjusted for such differences, the performance would be different. The performance of Class R6 is linked to Class I. Performance presented in the Financial Highlights included in the financial statements is not linked. |
3 | Source: Fund prospectus. The expense ratios for the current reporting period can be found in the Financial Highlights section of this report. |
4 | Excludes cash and cash equivalents. |
Fund profile subject to change due to active management. |
3 |
Table of Contents
Eaton Vance
Large-Cap Value Fund
June 30, 2020
Fund Expenses
Example: As a Fund shareholder, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases and redemption fees (if applicable); and (2) ongoing costs, including management fees; distribution and/or service fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of Fund investing and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2020 – June 30, 2020).
Actual Expenses: The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes: The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the actual Fund expense ratio and an assumed rate of return of 5% per year (before expenses), which is not the actual Fund return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption fees (if applicable). Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would be higher.
Beginning Account Value (1/1/20) | Ending Account Value (6/30/20) | Expenses Paid During Period* (1/1/20 – 6/30/20) | Annualized Expense Ratio | |||||||||||||
Actual | ||||||||||||||||
Class A | $ | 1,000.00 | $ | 837.70 | $ | 4.84 | 1.06 | % | ||||||||
Class C | $ | 1,000.00 | $ | 834.80 | $ | 8.26 | 1.81 | % | ||||||||
Class I | $ | 1,000.00 | $ | 839.00 | $ | 3.66 | 0.80 | % | ||||||||
Class R | $ | 1,000.00 | $ | 836.70 | $ | 5.98 | 1.31 | % | ||||||||
Class R6 | $ | 1,000.00 | $ | 839.40 | $ | 3.34 | 0.73 | % | ||||||||
Hypothetical | ||||||||||||||||
(5% return per year before expenses) | ||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,019.60 | $ | 5.32 | 1.06 | % | ||||||||
Class C | $ | 1,000.00 | $ | 1,015.90 | $ | 9.07 | 1.81 | % | ||||||||
Class I | $ | 1,000.00 | $ | 1,020.90 | $ | 4.02 | 0.80 | % | ||||||||
Class R | $ | 1,000.00 | $ | 1,018.30 | $ | 6.57 | 1.31 | % | ||||||||
Class R6 | $ | 1,000.00 | $ | 1,021.20 | $ | 3.67 | 0.73 | % |
* | Expenses are equal to the Fund’s annualized expense ratio for the indicated Class, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). The Example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on December 31, 2019. |
4 |
Table of Contents
Eaton Vance
Large-Cap Value Fund
June 30, 2020
Portfolio of Investments (Unaudited)
Common Stocks — 99.3% |
| |||||||
Security | Shares | Value | ||||||
Aerospace & Defense — 2.8% | ||||||||
Hexcel Corp. | 472,205 | $ | 21,353,110 | |||||
Huntington Ingalls Industries, Inc. | 91,476 | 15,961,647 | ||||||
$ | 37,314,757 | |||||||
Banks — 8.6% | ||||||||
Bank of America Corp. | 1,575,555 | $ | 37,419,431 | |||||
JPMorgan Chase & Co. | 188,547 | 17,734,731 | ||||||
KeyCorp | 923,401 | 11,247,024 | ||||||
PNC Financial Services Group, Inc. (The) | 261,432 | 27,505,261 | ||||||
Truist Financial Corp. | 582,130 | 21,858,981 | ||||||
$ | 115,765,428 | |||||||
Beverages — 2.2% | ||||||||
Constellation Brands, Inc., Class A | 58,136 | $ | 10,170,893 | |||||
PepsiCo, Inc. | 146,459 | 19,370,667 | ||||||
$ | 29,541,560 | |||||||
Building Products — 1.4% | ||||||||
A.O. Smith Corp. | 388,020 | $ | 18,283,502 | |||||
$ | 18,283,502 | |||||||
Capital Markets — 2.7% | ||||||||
Goldman Sachs Group, Inc. (The) | 107,926 | $ | 21,328,336 | |||||
Raymond James Financial, Inc. | 211,189 | 14,536,139 | ||||||
$ | 35,864,475 | |||||||
Communications Equipment — 2.3% | ||||||||
Cisco Systems, Inc. | 668,337 | $ | 31,171,238 | |||||
$ | 31,171,238 | |||||||
Containers & Packaging — 1.5% | ||||||||
Packaging Corp. of America | 201,642 | $ | 20,123,872 | |||||
$ | 20,123,872 | |||||||
Diversified Financial Services — 3.7% | ||||||||
Berkshire Hathaway, Inc., Class B(1) | 281,490 | $ | 50,248,780 | |||||
$ | 50,248,780 | |||||||
Diversified Telecommunication Services — 3.3% | ||||||||
Verizon Communications, Inc. | 803,835 | $ | 44,315,424 | |||||
$ | 44,315,424 |
Security | Shares | Value | ||||||
Electric Utilities — 4.1% | ||||||||
Edison International | 425,350 | $ | 23,100,758 | |||||
NextEra Energy, Inc. | 133,206 | 31,992,085 | ||||||
$ | 55,092,843 | |||||||
Electrical Equipment — 1.7% | ||||||||
Eaton Corp. PLC | 265,433 | $ | 23,220,079 | |||||
$ | 23,220,079 | |||||||
Entertainment — 2.7% | ||||||||
Walt Disney Co. (The) | 320,326 | $ | 35,719,552 | |||||
$ | 35,719,552 | |||||||
Equity Real Estate Investment Trusts (REITs) — 5.1% | ||||||||
Cousins Properties, Inc. | 417,867 | $ | 12,464,973 | |||||
CubeSmart | 884,393 | 23,869,767 | ||||||
EastGroup Properties, Inc. | 89,759 | 10,646,315 | ||||||
Mid-America Apartment Communities, Inc. | 182,748 | 20,955,713 | ||||||
$ | 67,936,768 | |||||||
Food & Staples Retailing — 2.4% | ||||||||
Walmart, Inc. | 272,803 | $ | 32,676,343 | |||||
$ | 32,676,343 | |||||||
Food Products — 3.2% | ||||||||
General Mills, Inc. | 238,713 | $ | 14,716,656 | |||||
Mondelez International, Inc., Class A | 565,051 | 28,891,058 | ||||||
$ | 43,607,714 | |||||||
Health Care Equipment & Supplies — 7.1% | ||||||||
Abbott Laboratories | 291,952 | $ | 26,693,171 | |||||
Baxter International, Inc. | 204,140 | 17,576,454 | ||||||
Boston Scientific Corp.(1) | 397,526 | 13,957,138 | ||||||
Medtronic PLC | 406,524 | 37,278,251 | ||||||
$ | 95,505,014 | |||||||
Hotels, Restaurants & Leisure — 0.5% | ||||||||
Starbucks Corp. | 90,064 | $ | 6,627,810 | |||||
$ | 6,627,810 | |||||||
Household Durables — 0.8% | ||||||||
D.R. Horton, Inc. | 201,642 | $ | 11,181,049 | |||||
$ | 11,181,049 |
5 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Large-Cap Value Fund
June 30, 2020
Portfolio of Investments (Unaudited) — continued
Security | Shares | Value | ||||||
Insurance — 5.3% | ||||||||
Allstate Corp. (The) | 219,546 | $ | 21,293,766 | |||||
American International Group, Inc. | 612,253 | 19,090,049 | ||||||
Reinsurance Group of America, Inc. | 155,523 | 12,199,224 | ||||||
Travelers Cos., Inc. (The) | 163,578 | 18,656,071 | ||||||
$ | 71,239,110 | |||||||
Interactive Media & Services — 1.9% | ||||||||
Alphabet, Inc., Class A(1) | 17,553 | $ | 24,891,032 | |||||
$ | 24,891,032 | |||||||
IT Services — 5.1% | ||||||||
Cognizant Technology Solutions Corp., Class A | 413,666 | $ | 23,504,502 | |||||
Euronet Worldwide, Inc.(1) | 180,591 | 17,304,230 | ||||||
Fidelity National Information Services, Inc. | 210,229 | 28,189,606 | ||||||
$ | 68,998,338 | |||||||
Life Sciences Tools & Services — 1.2% | ||||||||
Thermo Fisher Scientific, Inc. | 45,279 | $ | 16,406,393 | |||||
$ | 16,406,393 | |||||||
Machinery — 4.2% | ||||||||
Ingersoll Rand, Inc.(1) | 676,668 | $ | 19,027,904 | |||||
Parker-Hannifin Corp. | 101,949 | 18,684,193 | ||||||
Stanley Black & Decker, Inc. | 135,301 | 18,858,254 | ||||||
$ | 56,570,351 | |||||||
Media — 1.0% | ||||||||
Fox Corp., Class A | 482,638 | $ | 12,944,351 | |||||
$ | 12,944,351 | |||||||
Metals & Mining — 2.7% | ||||||||
Rio Tinto PLC ADR | 315,349 | $ | 17,716,307 | |||||
Steel Dynamics, Inc. | 706,124 | 18,422,775 | ||||||
$ | 36,139,082 | |||||||
Multi-Utilities — 3.1% | ||||||||
CMS Energy Corp. | 414,524 | $ | 24,216,492 | |||||
Sempra Energy | 146,209 | 17,140,081 | ||||||
$ | 41,356,573 | |||||||
Oil, Gas & Consumable Fuels — 5.8% | ||||||||
Chevron Corp. | 262,112 | $ | 23,388,254 | |||||
ConocoPhillips | 461,720 | 19,401,474 |
Security | Shares | Value | ||||||
Oil, Gas & Consumable Fuels (continued) | ||||||||
EOG Resources, Inc. | 278,135 | $ | 14,090,319 | |||||
Phillips 66 | 285,556 | 20,531,477 | ||||||
$ | 77,411,524 | |||||||
Pharmaceuticals — 6.9% | ||||||||
GlaxoSmithKline PLC ADR(2) | 373,920 | $ | 15,252,197 | |||||
Johnson & Johnson | 356,967 | 50,200,269 | ||||||
Royalty Pharma PLC, Class A | 118,771 | 5,766,332 | ||||||
Sanofi | 216,345 | 22,063,850 | ||||||
$ | 93,282,648 | |||||||
Semiconductors & Semiconductor Equipment — 1.4% | ||||||||
Intel Corp. | 113,026 | $ | 6,762,346 | |||||
QUALCOMM, Inc. | 139,591 | 12,732,095 | ||||||
$ | 19,494,441 | |||||||
Specialty Retail — 4.0% | ||||||||
Best Buy Co., Inc. | 171,111 | $ | 14,932,857 | |||||
Lowe’s Cos., Inc. | 115,846 | 15,653,111 | ||||||
TJX Cos., Inc. (The) | 136,626 | 6,907,811 | ||||||
Tractor Supply Co. | 128,453 | 16,928,821 | ||||||
$ | 54,422,600 | |||||||
Technology Hardware, Storage & Peripherals — 0.6% | ||||||||
HP, Inc. | 493,865 | $ | 8,608,067 | |||||
$ | 8,608,067 | |||||||
Total Common Stocks |
| $ | 1,335,960,718 | |||||
Short-Term Investments — 0.8% |
| |||||||
Description | Units | Value | ||||||
Eaton Vance Cash Reserves Fund, LLC, 0.35%(3) | 10,324,068 | $ | 10,324,068 | |||||
Total Short-Term Investments |
| $ | 10,324,068 | |||||
Total Investments — 100.1% |
| $ | 1,346,284,786 | |||||
Other Assets, Less Liabilities — (0.1)% |
| $ | (1,530,057 | ) | ||||
Net Assets — 100.0% |
| $ | 1,344,754,729 |
The percentage shown for each investment category in the Portfolio of Investments is based on net assets.
6 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Large-Cap Value Fund
June 30, 2020
Portfolio of Investments (Unaudited) — continued
(1) | Non-income producing security. |
(2) | All or a portion of this security was on loan at June 30, 2020. The aggregate market value of securities on loan at June 30, 2020 was $15,076,473. |
(3) | Affiliated investment company, available to Eaton Vance portfolios and funds, which invests in high quality, U.S. dollar denominated money market instruments. The rate shown is the annualized seven-day yield as of June 30, 2020. |
Abbreviations:
ADR | – | American Depositary Receipt |
7 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Large-Cap Value Fund
June 30, 2020
Statement of Assets and Liabilities (Unaudited)
Assets | June 30, 2020 | |||
Unaffiliated investments, at value including $15,076,473 of securities on loan (identified cost, $1,280,308,174) | $ | 1,335,960,718 | ||
Affiliated investment, at value (identified cost, $10,324,068) | 10,324,068 | |||
Dividends receivable | 1,844,631 | |||
Dividends receivable from affiliated investment | 1,475 | |||
Receivable for Fund shares sold | 925,158 | |||
Securities lending income receivable | 1,573 | |||
Tax reclaims receivable | 296,345 | |||
Total assets | $ | 1,349,353,968 | ||
Liabilities |
| |||
Payable for Fund shares redeemed | $ | 3,202,266 | ||
Payable to affiliates: | ||||
Investment adviser fee | 705,399 | |||
Distribution and service fees | 162,118 | |||
Trustees’ fees | 21,363 | |||
Accrued expenses | 508,093 | |||
Total liabilities | $ | 4,599,239 | ||
Net Assets | $ | 1,344,754,729 | ||
Sources of Net Assets |
| |||
Paid-in capital | $ | 1,337,240,659 | ||
Distributable earnings | 7,514,070 | |||
Total | $ | 1,344,754,729 | ||
Class A Shares |
| |||
Net Assets | $ | 547,371,198 | ||
Shares Outstanding | 31,347,223 | |||
Net Asset Value and Redemption Price Per Share | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 17.46 | ||
Maximum Offering Price Per Share | ||||
(100 ÷ 94.25 of net asset value per share) | $ | 18.53 | ||
Class C Shares |
| |||
Net Assets | $ | 31,416,221 | ||
Shares Outstanding | 1,792,504 | |||
Net Asset Value and Offering Price Per Share* | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 17.53 | ||
Class I Shares |
| |||
Net Assets | $ | 659,828,693 | ||
Shares Outstanding | 37,623,843 | |||
Net Asset Value, Offering Price and Redemption Price Per Share | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 17.54 |
8 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Large-Cap Value Fund
June 30, 2020
Statement of Assets and Liabilities (Unaudited) — continued
Class R Shares | June 30, 2020 | |||
Net Assets | $ | 43,273,164 | ||
Shares Outstanding | 2,485,307 | |||
Net Asset Value, Offering Price and Redemption Price Per Share | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 17.41 | ||
Class R6 Shares |
| |||
Net Assets | $ | 62,865,453 | ||
Shares Outstanding | 3,582,312 | |||
Net Asset Value, Offering Price and Redemption Price Per Share | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 17.55 |
On sales of $50,000 or more, the offering price of Class A shares is reduced.
* | Redemption price per share is equal to the net asset value less any applicable contingent deferred sales charge. |
9 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Large-Cap Value Fund
June 30, 2020
Statement of Operations (Unaudited)
Investment Income | Six Months Ended June 30, 2020 | |||
Dividends (net of foreign taxes, $213,503) | $ | 19,127,875 | ||
Dividends from affiliated investment | 26,275 | |||
Securities lending income, net | 6,041 | |||
Total investment income | $ | 19,160,191 | ||
Expenses |
| |||
Investment adviser fee | $ | 4,496,352 | ||
Distribution and service fees |
| |||
Class A | 740,551 | |||
Class C | 209,634 | |||
Class R | 118,488 | |||
Trustees’ fees and expenses | 42,662 | |||
Custodian fee | 182,824 | |||
Transfer and dividend disbursing agent fees | 666,727 | |||
Legal and accounting services | 45,459 | |||
Printing and postage | 64,137 | |||
Registration fees | 39,497 | |||
ReFlow liquidity program fees | 193,923 | |||
Miscellaneous | 25,672 | |||
Total expenses | $ | 6,825,926 | ||
Net investment income | $ | 12,334,265 | ||
Realized and Unrealized Gain (Loss) |
| |||
Net realized gain (loss) — |
| |||
Investment transactions | $ | (55,088,282 | )(1) | |
Investment transactions — affiliated investment | 2,545 | |||
Foreign currency transactions | 1,199 | |||
Net realized loss | $ | (55,084,538 | ) | |
Change in unrealized appreciation (depreciation) — |
| |||
Investments | $ | (237,290,433 | ) | |
Investments — affiliated investment | (205 | ) | ||
Foreign currency | (1,086 | ) | ||
Net change in unrealized appreciation (depreciation) | $ | (237,291,724 | ) | |
Net realized and unrealized loss | $ | (292,376,262 | ) | |
Net decrease in net assets from operations | $ | (280,041,997 | ) |
(1) | Includes $20,610,195 of net realized gains from redemptions in-kind. |
10 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Large-Cap Value Fund
June 30, 2020
Statements of Changes in Net Assets
Increase (Decrease) in Net Assets | Six Months Ended June 30, 2020 | Year Ended December 31, 2019 | ||||||
From operations — |
| |||||||
Net investment income | $ | 12,334,265 | $ | 23,895,678 | ||||
Net realized gain (loss) | (55,084,538 | )(1) | 113,258,351 | (2) | ||||
Net change in unrealized appreciation (depreciation) | (237,291,724 | ) | 300,237,954 | |||||
Net increase (decrease) in net assets from operations | $ | (280,041,997 | ) | $ | 437,391,983 | |||
Distributions to shareholders — |
| |||||||
Class A | $ | (3,892,911 | ) | $ | (14,362,572 | ) | ||
Class C | (94,038 | ) | (642,775 | ) | ||||
Class I | (5,415,089 | ) | (18,425,036 | ) | ||||
Class R | (248,552 | ) | (1,096,140 | ) | ||||
Class R6 | (537,950 | ) | (1,845,970 | ) | ||||
Total distributions to shareholders | $ | (10,188,540 | ) | $ | (36,372,493 | ) | ||
Transactions in shares of beneficial interest — |
| |||||||
Proceeds from sale of shares |
| |||||||
Class A | $ | 17,797,555 | $ | 51,422,891 | ||||
Class C | 1,542,737 | 3,902,820 | ||||||
Class I | 174,182,554 | 349,749,276 | ||||||
Class R | 3,768,605 | 5,479,685 | ||||||
Class R6 | 6,960,265 | 17,341,875 | ||||||
Net asset value of shares issued to shareholders in payment of distributions declared |
| |||||||
Class A | 3,505,491 | 12,956,260 | ||||||
Class C | 73,304 | 496,741 | ||||||
Class I | 4,442,292 | 15,088,154 | ||||||
Class R | 240,188 | 1,043,410 | ||||||
Class R6 | 537,305 | 1,845,970 | ||||||
Cost of shares redeemed |
| |||||||
Class A | (73,800,921 | ) | (164,929,105 | ) | ||||
Class C | (10,635,679 | ) | (35,204,466 | ) | ||||
Class I | (198,277,971 | ) | (467,430,748 | ) | ||||
Class R | (10,666,108 | ) | (23,017,996 | ) | ||||
Class R6 | (8,478,967 | ) | (34,851,423 | ) | ||||
Net asset value of shares converted |
| |||||||
Class A | 6,662,671 | 104,995,531 | ||||||
Class C | (6,662,671 | ) | (104,995,531 | ) | ||||
Net decrease in net assets from Fund share transactions | $ | (88,809,350 | ) | $ | (266,106,656 | ) | ||
Net increase (decrease) in net assets | $ | (379,039,887 | ) | $ | 134,912,834 | |||
Net Assets |
| |||||||
At beginning of period | $ | 1,723,794,616 | $ | 1,588,881,782 | ||||
At end of period | $ | 1,344,754,729 | $ | 1,723,794,616 |
(1) | Includes $20,610,195 of net realized gains from redemptions in-kind. |
(2) | Includes $83,682,794 of net realized gains from redemptions in-kind. |
11 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Large-Cap Value Fund
June 30, 2020
Financial Highlights
Class A | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 20.980 | $ | 16.500 | $ | 19.520 | $ | 18.030 | $ | 16.690 | $ | 18.740 | ||||||||||||
Income (Loss) From Operations |
| |||||||||||||||||||||||
Net investment income(1) | $ | 0.146 | $ | 0.256 | $ | 0.254 | $ | 0.246 | $ | 0.279 | $ | 0.246 | ||||||||||||
Net realized and unrealized gain (loss) | (3.546 | ) | 4.638 | (1.470 | ) | 2.393 | 1.301 | (0.456 | ) | |||||||||||||||
Total income (loss) from operations | $ | (3.400 | ) | $ | 4.894 | $ | (1.216 | ) | $ | 2.639 | $ | 1.580 | $ | (0.210 | ) | |||||||||
Less Distributions |
| |||||||||||||||||||||||
From net investment income | $ | (0.120 | ) | $ | (0.248 | ) | $ | (0.240 | ) | $ | (0.240 | ) | $ | (0.240 | ) | $ | (0.260 | ) | ||||||
From net realized gain | — | (0.166 | ) | (1.564 | ) | (0.909 | ) | — | (1.580 | ) | ||||||||||||||
Total distributions | $ | (0.120 | ) | $ | (0.414 | ) | $ | (1.804 | ) | $ | (1.149 | ) | $ | (0.240 | ) | $ | (1.840 | ) | ||||||
Net asset value — End of period | $ | 17.460 | $ | 20.980 | $ | 16.500 | $ | 19.520 | $ | 18.030 | $ | 16.690 | ||||||||||||
Total Return(2) | (16.23 | )%(3) | 29.79 | % | (6.83 | )% | 14.80 | % | 9.56 | % | (1.08 | )% | ||||||||||||
Ratios/Supplemental Data |
| |||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 547,371 | $ | 711,972 | $ | 549,515 | $ | 741,193 | $ | 942,192 | $ | 1,127,754 | ||||||||||||
Ratios (as a percentage of average daily net assets): | ||||||||||||||||||||||||
Expenses(4) | 1.06 | %(5) | 1.04 | % | 1.06 | %(6) | 1.06 | %(6) | 1.06 | %(6) | 1.05 | %(6) | ||||||||||||
Net investment income | 1.61 | %(5) | 1.33 | % | 1.30 | %(6) | 1.31 | %(6) | 1.67 | %(6) | 1.33 | %(6) | ||||||||||||
Portfolio Turnover of the Portfolio(7) | — | — | 34 | %(3) | 105 | % | 94 | % | 98 | % | ||||||||||||||
Portfolio Turnover of the Fund | 44 | %(3) | 62 | % | 48 | %(3)(8) | — | — | — |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges. |
(3) | Not annualized. |
(4) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(5) | Annualized. |
(6) | Includes the Fund’s share of the Portfolio’s allocated expenses for the period while the Fund was investing in the Portfolio. |
(7) | Portfolio turnover represents the rate of portfolio activity for the period while the Fund was investing in the Portfolio. |
(8) | For the period from June 18, 2018 through December 31, 2018 when the Fund was making investments directly in securities. |
References to Portfolio herein are to Large-Cap Value Portfolio, a Massachusetts business trust in which the Fund invested all of its investable assets prior to the close of business on June 15, 2018 and which had the same investment objective and policies as the Fund during such period.
12 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Large-Cap Value Fund
June 30, 2020
Financial Highlights — continued
Class C | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 21.050 | $ | 16.520 | $ | 19.540 | $ | 18.040 | $ | 16.700 | $ | 18.750 | ||||||||||||
Income (Loss) From Operations |
| |||||||||||||||||||||||
Net investment income(1) | $ | 0.077 | $ | 0.103 | $ | 0.107 | $ | 0.107 | $ | 0.154 | $ | 0.107 | ||||||||||||
Net realized and unrealized gain (loss) | (3.553 | ) | 4.655 | (1.473 | ) | 2.394 | 1.298 | (0.453 | ) | |||||||||||||||
Total income (loss) from operations | $ | (3.476 | ) | $ | 4.758 | $ | (1.366 | ) | $ | 2.501 | $ | 1.452 | $ | (0.346 | ) | |||||||||
Less Distributions |
| |||||||||||||||||||||||
From net investment income | $ | (0.044 | ) | $ | (0.062 | ) | $ | (0.090 | ) | $ | (0.092 | ) | $ | (0.112 | ) | $ | (0.124 | ) | ||||||
From net realized gain | — | (0.166 | ) | (1.564 | ) | (0.909 | ) | — | (1.580 | ) | ||||||||||||||
Total distributions | $ | (0.044 | ) | $ | (0.228 | ) | $ | (1.654 | ) | $ | (1.001 | ) | $ | (0.112 | ) | $ | (1.704 | ) | ||||||
Net asset value — End of period | $ | 17.530 | $ | 21.050 | $ | 16.520 | $ | 19.540 | $ | 18.040 | $ | 16.700 | ||||||||||||
Total Return(2) | (16.52 | )%(3) | 28.82 | % | (7.53 | )% | 13.96 | % | 8.74 | % | (1.82 | )% | ||||||||||||
Ratios/Supplemental Data |
| |||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 31,416 | $ | 56,344 | $ | 168,783 | $ | 241,192 | $ | 300,456 | $ | 345,531 | ||||||||||||
Ratios (as a percentage of average daily net assets): | ||||||||||||||||||||||||
Expenses(4) | 1.81 | %(5) | 1.80 | % | 1.81 | %(6) | 1.81 | %(6) | 1.81 | %(6) | 1.80 | %(6) | ||||||||||||
Net investment income | 0.85 | %(5) | 0.54 | % | 0.55 | %(6) | 0.57 | %(6) | 0.92 | %(6) | 0.58 | %(6) | ||||||||||||
Portfolio Turnover of the Portfolio(7) | — | — | 34 | %(3) | 105 | % | 94 | % | 98 | % | ||||||||||||||
Portfolio Turnover of the Fund | 44 | %(3) | 62 | % | 48 | %(3)(8) | — | — | — |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges. |
(3) | Not annualized. |
(4) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(5) | Annualized. |
(6) | Includes the Fund’s share of the Portfolio’s allocated expenses for the period while the Fund was investing in the Portfolio. |
(7) | Portfolio turnover represents the rate of portfolio activity for the period while the Fund was investing in the Portfolio. |
(8) | For the period from June 18, 2018 through December 31, 2018 when the Fund was making investments directly in securities. |
References to Portfolio herein are to Large-Cap Value Portfolio, a Massachusetts business trust in which the Fund invested all of its investable assets prior to the close of business on June 15, 2018 and which had the same investment objective and policies as the Fund during such period.
13 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Large-Cap Value Fund
June 30, 2020
Financial Highlights — continued
Class I | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 21.070 | $ | 16.570 | $ | 19.590 | $ | 18.090 | $ | 16.750 | $ | 18.800 | ||||||||||||
Income (Loss) From Operations |
| |||||||||||||||||||||||
Net investment income(1) | $ | 0.169 | $ | 0.305 | $ | 0.306 | $ | 0.296 | $ | 0.323 | $ | 0.293 | ||||||||||||
Net realized and unrealized gain (loss) | (3.556 | ) | 4.658 | (1.472 | ) | 2.401 | 1.300 | (0.458 | ) | |||||||||||||||
Total income (loss) from operations | $ | (3.387 | ) | $ | 4.963 | $ | (1.166 | ) | $ | 2.697 | $ | 1.623 | $ | (0.165 | ) | |||||||||
Less Distributions |
| |||||||||||||||||||||||
From net investment income | $ | (0.143 | ) | $ | (0.297 | ) | $ | (0.290 | ) | $ | (0.288 | ) | $ | (0.283 | ) | $ | (0.305 | ) | ||||||
From net realized gain | — | (0.166 | ) | (1.564 | ) | (0.909 | ) | — | (1.580 | ) | ||||||||||||||
Total distributions | $ | (0.143 | ) | $ | (0.463 | ) | $ | (1.854 | ) | $ | (1.197 | ) | $ | (0.283 | ) | $ | (1.885 | ) | ||||||
Net asset value — End of period | $ | 17.540 | $ | 21.070 | $ | 16.570 | $ | 19.590 | $ | 18.090 | $ | 16.750 | ||||||||||||
Total Return(2) | (16.10 | )%(3) | 30.11 | % | (6.57 | )% | 15.10 | % | 9.80 | % | (0.83 | )% | ||||||||||||
Ratios/Supplemental Data |
| |||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 659,829 | $ | 819,292 | $ | 736,581 | $ | 1,032,300 | $ | 1,555,075 | $ | 1,664,998 | ||||||||||||
Ratios (as a percentage of average daily net assets): | ||||||||||||||||||||||||
Expenses(4) | 0.80 | %(5) | 0.79 | % | 0.81 | %(6) | 0.81 | %(6) | 0.81 | %(6) | 0.80 | %(6) | ||||||||||||
Net investment income | 1.86 | %(5) | 1.58 | % | 1.56 | %(6) | 1.57 | %(6) | 1.92 | %(6) | 1.58 | %(6) | ||||||||||||
Portfolio Turnover of the Portfolio(7) | — | — | 34 | %(3) | 105 | % | 94 | % | 98 | % | ||||||||||||||
Portfolio Turnover of the Fund | 44 | %(3) | 62 | % | 48 | %(3)(8) | — | — | — |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested. |
(3) | Not annualized. |
(4) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(5) | Annualized. |
(6) | Includes the Fund’s share of the Portfolio’s allocated expenses for the period while the Fund was investing in the Portfolio. |
(7) | Portfolio turnover represents the rate of portfolio activity for the period while the Fund was investing in the Portfolio. |
(8) | For the period from June 18, 2018 through December 31, 2018 when the Fund was making investments directly in securities. |
References to Portfolio herein are to Large-Cap Value Portfolio, a Massachusetts business trust in which the Fund invested all of its investable assets prior to the close of business on June 15, 2018 and which had the same investment objective and policies as the Fund during such period.
14 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Large-Cap Value Fund
June 30, 2020
Financial Highlights — continued
Class R | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 20.920 | $ | 16.450 | $ | 19.460 | $ | 17.980 | $ | 16.650 | $ | 18.690 | ||||||||||||
Income (Loss) From Operations |
| |||||||||||||||||||||||
Net investment income(1) | $ | 0.123 | $ | 0.206 | $ | 0.204 | $ | 0.199 | $ | 0.237 | $ | 0.199 | ||||||||||||
Net realized and unrealized gain (loss) | (3.536 | ) | 4.626 | (1.460 | ) | 2.382 | 1.292 | (0.445 | ) | |||||||||||||||
Total income (loss) from operations | $ | (3.413 | ) | $ | 4.832 | $ | (1.256 | ) | $ | 2.581 | $ | 1.529 | $ | (0.246 | ) | |||||||||
Less Distributions |
| |||||||||||||||||||||||
From net investment income | $ | (0.097 | ) | $ | (0.196 | ) | $ | (0.190 | ) | $ | (0.192 | ) | $ | (0.199 | ) | $ | (0.214 | ) | ||||||
From net realized gain | — | (0.166 | ) | (1.564 | ) | (0.909 | ) | — | (1.580 | ) | ||||||||||||||
Total distributions | $ | (0.097 | ) | $ | (0.362 | ) | $ | (1.754 | ) | $ | (1.101 | ) | $ | (0.199 | ) | $ | (1.794 | ) | ||||||
Net asset value — End of period | $ | 17.410 | $ | 20.920 | $ | 16.450 | $ | 19.460 | $ | 17.980 | $ | 16.650 | ||||||||||||
Total Return(2) | (16.33 | )%(3) | 29.48 | % | (7.04 | )% | 14.50 | % | 9.26 | % | (1.33 | )% | ||||||||||||
Ratios/Supplemental Data |
| |||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 43,273 | $ | 59,473 | $ | 60,984 | $ | 86,706 | $ | 101,010 | $ | 109,468 | ||||||||||||
Ratios (as a percentage of average daily net assets): | ||||||||||||||||||||||||
Expenses(4) | 1.31 | %(5) | 1.30 | % | 1.31 | %(6) | 1.31 | %(6) | 1.31 | %(6) | 1.30 | %(6) | ||||||||||||
Net investment income | 1.36 | %(5) | 1.08 | % | 1.05 | %(6) | 1.06 | %(6) | 1.42 | %(6) | 1.08 | %(6) | ||||||||||||
Portfolio Turnover of the Portfolio(7) | — | — | 34 | %(3) | 105 | % | 94 | % | 98 | % | ||||||||||||||
Portfolio Turnover of the Fund | 44 | %(3) | 62 | % | 48 | %(3)(8) | — | — | — |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested. |
(3) | Not annualized. |
(4) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(5) | Annualized. |
(6) | Includes the Fund’s share of the Portfolio’s allocated expenses for the period while the Fund was investing in the Portfolio. |
(7) | Portfolio turnover represents the rate of portfolio activity for the period while the Fund was investing in the Portfolio. |
(8) | For the period from June 18, 2018 through December 31, 2018 when the Fund was making investments directly in securities. |
References to Portfolio herein are to Large-Cap Value Portfolio, a Massachusetts business trust in which the Fund invested all of its investable assets prior to the close of business on June 15, 2018 and which had the same investment objective and policies as the Fund during such period.
15 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Large-Cap Value Fund
June 30, 2020
Financial Highlights — continued
Class R6 | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 21.080 | $ | 16.580 | $ | 19.610 | $ | 18.100 | $ | 16.760 | $ | 18.810 | ||||||||||||
Income (Loss) From Operations |
| |||||||||||||||||||||||
Net investment income(1) | $ | 0.176 | $ | 0.320 | $ | 0.310 | $ | 0.311 | $ | 0.339 | $ | 0.321 | ||||||||||||
Net realized and unrealized gain (loss) | (3.556 | ) | 4.656 | (1.470 | ) | 2.413 | 1.301 | (0.469 | ) | |||||||||||||||
Total income (loss) from operations | $ | (3.380 | ) | $ | 4.976 | $ | (1.160 | ) | $ | 2.724 | $ | 1.640 | $ | (0.148 | ) | |||||||||
Less Distributions | ||||||||||||||||||||||||
From net investment income | $ | (0.150 | ) | $ | (0.310 | ) | $ | (0.306 | ) | $ | (0.305 | ) | $ | (0.300 | ) | $ | (0.322 | ) | ||||||
From net realized gain | — | (0.166 | ) | (1.564 | ) | (0.909 | ) | — | (1.580 | ) | ||||||||||||||
Total distributions | $ | (0.150 | ) | $ | (0.476 | ) | $ | (1.870 | ) | $ | (1.214 | ) | $ | (0.300 | ) | $ | (1.902 | ) | ||||||
Net asset value — End of period | $ | 17.550 | $ | 21.080 | $ | 16.580 | $ | 19.610 | $ | 18.100 | $ | 16.760 | ||||||||||||
Total Return(2) | (16.06 | )%(3) | 30.17 | % | (6.54 | )% | 15.25 | % | 9.90 | % | (0.79 | )% | ||||||||||||
Ratios/Supplemental Data |
| |||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 62,865 | $ | 76,714 | $ | 73,019 | $ | 86,742 | $ | 38,485 | $ | 32,525 | ||||||||||||
Ratios (as a percentage of average daily net assets): | ||||||||||||||||||||||||
Expenses(4) | 0.73 | %(5) | 0.72 | % | 0.72 | %(6) | 0.73 | %(6) | 0.71 | %(6) | 0.71 | %(6) | ||||||||||||
Net investment income | 1.94 | %(5) | 1.66 | % | 1.57 | %(6) | 1.64 | %(6) | 2.01 | %(6) | 1.73 | %(6) | ||||||||||||
Portfolio Turnover of the Portfolio(7) | — | — | 34 | %(3) | 105 | % | 94 | % | 98 | % | ||||||||||||||
Portfolio Turnover of the Fund | 44 | %(3) | 62 | % | 48 | %(3)(8) | — | — | — |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested. |
(3) | Not annualized. |
(4) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(5) | Annualized. |
(6) | Includes the Fund’s share of the Portfolio’s allocated expenses for the period while the Fund was investing in the Portfolio. |
(7) | Portfolio turnover represents the rate of portfolio activity for the period while the Fund was investing in the Portfolio. |
(8) | For the period from June 18, 2018 through December 31, 2018 when the Fund was making investments directly in securities. |
References to Portfolio herein are to Large-Cap Value Portfolio, a Massachusetts business trust in which the Fund invested all of its investable assets prior to the close of business on June 15, 2018 and which had the same investment objective and policies as the Fund during such period.
16 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Large-Cap Value Fund
June 30, 2020
Notes to Financial Statements (Unaudited)
1 Significant Accounting Policies
Eaton Vance Large-Cap Value Fund (the Fund) is a diversified series of Eaton Vance Special Investment Trust (the Trust). The Trust is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company. The Fund’s investment objective is to seek total return. The Fund offers five classes of shares. Class A shares are generally sold subject to a sales charge imposed at time of purchase. Class C shares are sold at net asset value and are generally subject to a contingent deferred sales charge (see Note 5). Effective January 25, 2019, Class C shares generally automatically convert to Class A shares ten years after their purchase as described in the Fund’s prospectus. Class I, Class R and Class R6 shares are sold at net asset value and are not subject to a sales charge.
Each class represents a pro-rata interest in the Fund, but votes separately on class-specific matters and (as noted below) is subject to different expenses. Realized and unrealized gains and losses and net investment income and losses, other than class-specific expenses, are allocated daily to each class of shares based on the relative net assets of each class to the total net assets of the Fund. Sub-accounting, recordkeeping and similar administrative fees payable to financial intermediaries, which are a component of transfer and dividend disbursing agent fees on the Statement of Operations, are not allocated to Class R6 shares. Each class of shares differs in its distribution plan and certain other class-specific expenses.
The following is a summary of significant accounting policies of the Fund. The policies are in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The Fund is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946.
A Investment Valuation — The following methodologies are used to determine the market value or fair value of investments.
Equity Securities. Equity securities listed on a U.S. securities exchange generally are valued at the last sale or closing price on the day of valuation or, if no sales took place on such date, at the mean between the closing bid and ask prices on the exchange where such securities are principally traded. Equity securities listed on the NASDAQ Global or Global Select Market generally are valued at the NASDAQ official closing price. Unlisted or listed securities for which closing sales prices or closing quotations are not available are valued at the mean between the latest available bid and ask prices.
Foreign Securities and Currencies. Foreign securities and currencies are valued in U.S. dollars, based on foreign currency exchange rate quotations supplied by a third party pricing service. The pricing service uses a proprietary model to determine the exchange rate. Inputs to the model include reported trades and implied bid/ask spreads. The daily valuation of exchange-traded foreign securities generally is determined as of the close of trading on the principal exchange on which such securities trade. Events occurring after the close of trading on foreign exchanges may result in adjustments to the valuation of foreign securities to more accurately reflect their fair value as of the close of regular trading on the New York Stock Exchange. When valuing foreign equity securities that meet certain criteria, the Fund’s Trustees have approved the use of a fair value service that values such securities to reflect market trading that occurs after the close of the applicable foreign markets of comparable securities or other instruments that have a strong correlation to the fair-valued securities.
Affiliated Fund. The Fund may invest in Eaton Vance Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by Eaton Vance Management (EVM). While Cash Reserves Fund is not a registered money market mutual fund, it conducts all of its investment activities in accordance with the requirements of Rule 2a-7 under the 1940 Act. Investments in Cash Reserves Fund are valued at the closing net asset value per unit on the valuation day. Cash Reserves Fund generally values its investment securities based on available market quotations provided by a third party pricing service.
Other. Investments in registered investment companies (including money market funds) that do not trade on an exchange are valued at the net asset value per share on the valuation day.
Fair Valuation. Investments for which valuations or market quotations are not readily available or are deemed unreliable are valued at fair value using methods determined in good faith by or at the direction of the Trustees of the Fund in a manner that most fairly reflects the security’s “fair value”, which is the amount that the Fund might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of relevant factors, which are likely to vary from one pricing context to another. These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issuer or of comparable companies or entities, quotations or relevant information obtained from broker/dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the company’s or entity’s financial statements, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.
B Investment Transactions — Investment transactions for financial statement purposes are accounted for on a trade date basis. Realized gains and losses on investments sold are determined on the basis of identified cost.
C Income — Dividend income is recorded on the ex-dividend date for dividends received in cash and/or securities. However, if the ex-dividend date has passed, certain dividends from foreign securities are recorded as the Fund is informed of the ex-dividend date. Withholding taxes on foreign dividends and capital gains have been provided for in accordance with the Fund’s understanding of the applicable countries’ tax rules and rates. In consideration of recent decisions rendered by European courts, the Fund has filed additional tax reclaims for previously withheld taxes on dividends earned in certain European Union countries. These filings are subject to various administrative and judicial proceedings within these countries. Due to the uncertainty as to the ultimate resolution of these proceedings, the likelihood of receipt of these reclaims, and the potential timing of payment, no amounts are reflected in the Fund’s financial statements for such outstanding reclaims. Distributions from investment companies are recorded as dividend income, capital gains or return of capital based on the nature of the distribution.
17 |
Table of Contents
Eaton Vance
Large-Cap Value Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
D Federal Taxes — The Fund’s policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its net investment income, and all or substantially all of its net realized capital gains. Accordingly, no provision for federal income or excise tax is necessary.
As of June 30, 2020, the Fund had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. The Fund files a U.S. federal income tax return annually after its fiscal year-end, which is subject to examination by the Internal Revenue Service for a period of three years from the date of filing.
E Expenses — The majority of expenses of the Trust are directly identifiable to an individual fund. Expenses which are not readily identifiable to a specific fund are allocated taking into consideration, among other things, the nature and type of expense and the relative size of the funds.
F Foreign Currency Translation — Investment valuations, other assets, and liabilities initially expressed in foreign currencies are translated each business day into U.S. dollars based upon current exchange rates. Purchases and sales of foreign investment securities and income and expenses denominated in foreign currencies are translated into U.S. dollars based upon currency exchange rates in effect on the respective dates of such transactions. Recognized gains or losses on investment transactions attributable to changes in foreign currency exchange rates are recorded for financial statement purposes as net realized gains and losses on investments. That portion of unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed.
G Use of Estimates — The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.
H Indemnifications — Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund. Under Massachusetts law, if certain conditions prevail, shareholders of a Massachusetts business trust (such as the Trust) could be deemed to have personal liability for the obligations of the Trust. However, the Trust’s Declaration of Trust contains an express disclaimer of liability on the part of Fund shareholders and the By-laws provide that the Trust shall assume, upon request by the shareholder, the defense on behalf of any Fund shareholders. Moreover, the By-laws also provide for indemnification out of Fund property of any shareholder held personally liable solely by reason of being or having been a shareholder for all loss or expense arising from such liability. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.
I Interim Financial Statements — The interim financial statements relating to June 30, 2020 and for the six months then ended have not been audited by an independent registered public accounting firm, but in the opinion of the Fund’s management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial statements.
2 Distributions to Shareholders and Income Tax Information
It is the present policy of the Fund to make quarterly distributions of all or substantially all of its net investment income and to distribute annually all or substantially all of its net realized capital gains. Distributions to shareholders are recorded on the ex-dividend date. Distributions are declared separately for each class of shares. Shareholders may reinvest income and capital gain distributions in additional shares of the same class of the Fund at the net asset value as of the ex-dividend date or, at the election of the shareholder, receive distributions in cash. Distributions to shareholders are determined in accordance with income tax regulations, which may differ from U.S. GAAP. As required by U.S. GAAP, only distributions in excess of tax basis earnings and profits are 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. For tax purposes, distributions from short-term capital gains are considered to be from ordinary income.
The cost and unrealized appreciation (depreciation) of investments of the Fund at June 30, 2020, as determined on a federal income tax basis, were as follows:
Aggregate cost | $ | 1,297,277,036 | ||
Gross unrealized appreciation | $ | 129,617,028 | ||
Gross unrealized depreciation | (80,609,278 | ) | ||
Net unrealized appreciation | $ | 49,007,750 |
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Eaton Vance
Large-Cap Value Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
3 Investment Adviser Fee and Other Transactions with Affiliates
The investment adviser fee is earned by Boston Management and Research (BMR), a subsidiary of EVM, as compensation for investment advisory services rendered to the Fund. The fee is computed at an annual rate of 0.625% of the Fund’s average daily net assets up to $2 billion, 0.60% on net assets of $2 billion but less than $5 billion and at reduced rates on daily net assets of $5 billion and over, and is payable monthly. For the six months ended June 30, 2020, the investment adviser fee amounted to $4,496,352 or 0.625% (annualized) of the Fund’s average daily net assets. The Fund invests its cash in Cash Reserves Fund. EVM does not currently receive a fee for advisory services provided to Cash Reserves Fund.
EVM serves as the administrator of the Fund, but receives no compensation. EVM provides sub-transfer agency and related services to the Fund pursuant to a Sub-Transfer Agency Support Services Agreement. For the six months ended June 30, 2020, EVM earned $57,256 from the Fund pursuant to such agreement, which is included in transfer and dividend disbursing agent fees on the Statement of Operations. The Fund was informed that Eaton Vance Distributors, Inc. (EVD), an affiliate of EVM and the Fund’s principal underwriter, received $50,231 as its portion of the sales charge on sales of Class A shares for the six months ended June 30, 2020. EVD also received distribution and service fees from Class A, Class C and Class R shares (see Note 4) and contingent deferred sales charges (see Note 5).
Trustees and officers of the Fund who are members of EVM’s or BMR’s organizations receive remuneration for their services to the Fund out of the investment adviser fee. Trustees of the Fund who are not affiliated with the investment adviser may elect to defer receipt of all or a percentage of their annual fees in accordance with the terms of the Trustees Deferred Compensation Plan. For the six months ended June 30, 2020, no significant amounts have been deferred. Certain officers and Trustees of the Fund are officers of the above organizations.
4 Distribution Plans
The Fund has in effect a distribution plan for Class A shares (Class A Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class A Plan, the Fund pays EVD a distribution and service fee of 0.25% per annum of its average daily net assets attributable to Class A shares for distribution services and facilities provided to the Fund by EVD, as well as for personal services and/or the maintenance of shareholder accounts. Distribution and service fees paid or accrued to EVD for the six months ended June 30, 2020 amounted to $740,551 for Class A shares.
The Fund also has in effect distribution plans for Class C shares (Class C Plan) and Class R shares (Class R Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class C Plan, the Fund pays EVD amounts equal to 0.75% per annum of its average daily net assets attributable to Class C shares for providing ongoing distribution services and facilities to the Fund. For the six months ended June 30, 2020, the Fund paid or accrued to EVD $157,226 for Class C shares.
The Class R Plan requires the Fund to pay EVD an amount up to 0.50% per annum of its average daily net assets attributable to Class R shares for providing ongoing distribution services and facilities to the Fund. The Trustees of the Trust have currently limited Class R distribution payments to 0.25% per annum of the average daily net assets attributable to Class R shares. For the six months ended June 30, 2020, the Fund paid or accrued to EVD $59,244 for Class R shares.
Pursuant to the Class C and Class R Plans, the Fund also makes payments of service fees to EVD, financial intermediaries and other persons in amounts equal to 0.25% per annum of its average daily net assets attributable to that class. Service fees paid or accrued are for personal services and/or the maintenance of shareholder accounts. They are separate and distinct from the sales commissions and distribution fees payable to EVD. Service fees paid or accrued for the six months ended June 30, 2020 amounted to $52,408 and $59,244 for Class C and Class R shares, respectively.
Distribution and service fees are subject to the limitations contained in the Financial Industry Regulatory Authority Rule 2341(d).
5 Contingent Deferred Sales Charges
A contingent deferred sales charge (CDSC) of 1% generally is imposed on redemptions of Class C shares made within 12 months of purchase. Class A shares may be subject to a 1% CDSC if redeemed within 18 months of purchase (depending on the circumstances of purchase). Generally, the CDSC is based upon the lower of the net asset value at date of redemption or date of purchase. No charge is levied on shares acquired by reinvestment of dividends or capital gain distributions. For the six months ended June 30, 2020, the Fund was informed that EVD received approximately $2,000 of CDSCs paid by Class C shareholders and no CDSCs paid by Class A shareholders.
6 Purchases and Sales of Investments
Purchases and sales of investments, other than short-term obligations and in-kind transactions, aggregated $641,129,838 and $653,736,824, respectively, for the six months ended June 30, 2020. In-kind sales for the six months ended June 30, 2020 aggregated $79,704,489.
7 Shares of Beneficial Interest
The Fund’s Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value). Such shares may be issued in a number of different series (such as the Fund) and classes. Sales and redemptions of Class I shares include shares
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Large-Cap Value Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
purchased and redeemed in connection with the ReFlow liquidity program, a program designed to provide an alternative liquidity source for mutual funds experiencing net redemptions of their shares. Transactions in Fund shares were as follows:
Class A | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 1,015,171 | 2,680,967 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | 193,147 | 647,324 | ||||||
Redemptions | (4,164,932 | ) | (8,586,649 | ) | ||||
Converted from Class C shares | 368,112 | 5,898,076 | ||||||
Net increase (decrease) | (2,588,502 | ) | 639,718 | |||||
Class C | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 83,582 | 202,727 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | 4,035 | 24,074 | ||||||
Redemptions | (604,960 | ) | (1,873,072 | ) | ||||
Converted to Class A shares | (367,045 | ) | (5,892,167 | ) | ||||
Net decrease | (884,388 | ) | (7,538,438 | ) | ||||
Class I | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 9,878,337 | 18,216,329 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | 243,848 | 752,462 | ||||||
Redemptions | (11,382,080 | ) | (24,528,454 | ) | ||||
Net decrease | (1,259,895 | ) | (5,559,663 | ) | ||||
Class R | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 221,605 | 285,086 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | 13,254 | 52,192 | ||||||
Redemptions | (592,479 | ) | (1,200,474 | ) | ||||
Net decrease | (357,620 | ) | (863,196 | ) | ||||
Class R6 | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 389,843 | 906,307 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | 29,446 | 92,425 | ||||||
Redemptions | (475,453 | ) | (1,763,659 | ) | ||||
Net decrease | (56,164 | ) | (764,927 | ) |
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Eaton Vance
Large-Cap Value Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
8 Line of Credit
The Fund participates with other portfolios and funds managed by EVM and its affiliates in an $800 million unsecured line of credit agreement with a group of banks, which is in effect through October 27, 2020. In connection with the renewal of the agreement on October 29, 2019, funds managed by Calvert Research and Management, an affiliate of EVM, were added as participating funds to the agreement and the borrowing limit was increased from $625 million. Borrowings are made by the Fund solely for temporary purposes related to redemptions and other short-term cash needs. Interest is charged to the Fund based on its borrowings at an amount above either the Eurodollar rate or Federal Funds rate. In addition, a fee computed at an annual rate of 0.15% on the daily unused portion of the line of credit is allocated among the participating portfolios and funds at the end of each quarter. Because the line of credit is not available exclusively to the Fund, it may be unable to borrow some or all of its requested amounts at any particular time. The Fund did not have any significant borrowings or allocated fees during the six months ended June 30, 2020.
9 Investments in Affiliated Funds
At June 30, 2020, the value of the Fund’s investment in affiliated funds was $10,324,068, which represents 0.8% of the Fund’s net assets. Transactions in affiliated funds by the Fund for the six months ended June 30, 2020 were as follows:
Name of affiliated fund | Value, beginning of period | Purchases | Sales proceeds | Net realized gain (loss) | Change in unrealized appreciation (depreciation) | Value, end of period | Dividend income | Units, end of period | ||||||||||||||||||||||||
Short-Term Investments |
| |||||||||||||||||||||||||||||||
Eaton Vance Cash Reserves Fund, LLC | $ | 2,748,856 | $ | 146,561,617 | $ | (138,988,745 | ) | $ | 2,545 | $ | (205 | ) | $ | 10,324,068 | $ | 26,275 | 10,324,068 |
10 Securities Lending Agreement
The Fund has established a securities lending agreement with State Street Bank and Trust Company (SSBT) as securities lending agent in which the Fund lends portfolio securities to qualified borrowers in exchange for collateral consisting of either cash or securities issued or guaranteed by the U.S. government or its agencies or instrumentalities in an amount at least equal to the market value of the securities on loan. The market value of securities loaned is determined daily and any additional required collateral is delivered to the Fund on the next business day. Cash collateral is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market fund registered under the 1940 Act. The Fund earns interest on the amount invested but it must pay (and at times receive from) the broker a loan rebate fee computed as a varying percentage of the collateral received. For security loans secured by non-cash collateral, the Fund earns a negotiated lending fee from the borrower. A portion of the income earned by the Fund from its investment of cash collateral, net of rebate fees, and lending fees received is allocated to SSBT for its services as lending agent and the portion allocated to the Fund is presented as securities lending income, net on the Statement of Operations. Non-cash collateral is held by the lending agent on behalf of the Fund and cannot be sold or re-pledged by the Fund; accordingly, such collateral is not reflected in the Statement of Assets and Liabilities.
The Fund is subject to possible delay in the recovery of loaned securities. Pursuant to the securities lending agreement, SSBT has provided indemnification to the Fund in the event of default by a borrower with respect to a loan. The Fund bears the risk of loss with respect to the investment of cash collateral.
At June 30, 2020, the value of the securities loaned (all common stocks) and the value of the collateral received, which exceeded the value of the securities loaned, amounted to $15,076,473 and $15,431,301, respectively. Collateral received was comprised of U.S. government and/or agencies securities. The securities lending transactions have no contractual maturity date and each of the Fund and borrower has the option to terminate a loan at any time.
11 Fair Value Measurements
Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
• | Level 1 – quoted prices in active markets for identical investments |
• | Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
• | Level 3 – significant unobservable inputs (including a fund’s own assumptions in determining the fair value of investments) |
In cases where the inputs used to measure fair value fall in different levels of the fair value hierarchy, the level disclosed is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
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Large-Cap Value Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
At June 30, 2020, the hierarchy of inputs used in valuing the Fund’s investments, which are carried at value, were as follows:
Asset Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stocks | ||||||||||||||||
Communication Services | $ | 117,870,359 | $ | — | $ | — | $ | 117,870,359 | ||||||||
Consumer Discretionary | 72,231,459 | — | — | 72,231,459 | ||||||||||||
Consumer Staples | 105,825,617 | — | — | 105,825,617 | ||||||||||||
Energy | 77,411,524 | — | — | 77,411,524 | ||||||||||||
Financials | 273,117,793 | — | — | 273,117,793 | ||||||||||||
Health Care | 183,130,205 | 22,063,850 | — | 205,194,055 | ||||||||||||
Industrials | 135,388,689 | — | — | 135,388,689 | ||||||||||||
Information Technology | 128,272,084 | — | — | 128,272,084 | ||||||||||||
Materials | 56,262,954 | — | — | 56,262,954 | ||||||||||||
Real Estate | 67,936,768 | — | — | 67,936,768 | ||||||||||||
Utilities | 96,449,416 | — | — | 96,449,416 | ||||||||||||
Total Common Stocks | $ | 1,313,896,868 | $ | 22,063,850 | * | $ | — | $ | 1,335,960,718 | |||||||
Short-Term Investments | $ | — | $ | 10,324,068 | $ | — | $ | 10,324,068 | ||||||||
Total Investments | $ | 1,313,896,868 | $ | 32,387,918 | $ | — | $ | 1,346,284,786 |
* | Includes foreign equity securities whose values were adjusted to reflect market trading of comparable securities or other correlated instruments that occurred after the close of trading in their applicable foreign markets. |
12 Risks and Uncertainties
Pandemic Risk
An outbreak of respiratory disease caused by a novel coronavirus that was first detected in China in December 2019 has spread rapidly internationally. This coronavirus has resulted in closing borders, enhanced health screenings, changes to healthcare service preparation and delivery, quarantines, cancellations, disruptions to supply chains and customer activity, as well as general concern and uncertainty. The impact of this outbreak has negatively affected the worldwide economy, as well as the economies of individual countries and individual companies and can affect the market in general in significant and unforeseen ways. Health crises caused by outbreaks, such as the coronavirus outbreak, may exacerbate other pre-existing political, social and economic risks and disrupt normal market conditions and operations. The near-term impact of this coronavirus has resulted in substantial market volatility, which may have an adverse effect on the Fund’s investments.
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Eaton Vance
Large-Cap Value Fund
June 30, 2020
Board of Trustees’ Contract Approval
Overview of the Contract Review Process
The Investment Company Act of 1940, as amended (the “1940 Act”), provides, in substance, that the investment advisory agreement between a fund and its investment adviser will continue in effect from year-to-year only if its continuation is approved on an annual basis by a vote of the fund’s board of trustees, including a majority of the trustees who are not “interested persons” of the fund (“independent trustees”), cast in person at a meeting called for the purpose of considering such approval.
At a meeting held on April 22, 2020 (the “April 2020 Meeting”), the Boards of Trustees/Directors comprised of the same individuals (collectively, the “Board”) that oversees a majority of the registered investment companies advised by Eaton Vance Management or its affiliate, Boston Management and Research (the “Eaton Vance Funds”), including a majority of the independent trustees (the “Independent Trustees”), voted to approve the continuation of existing investment advisory agreements and sub-advisory agreements1 for each of the Eaton Vance Funds for an additional one-year period. The Board relied upon the affirmative recommendation of its Contract Review Committee, which is a committee exclusively comprised of Independent Trustees. Prior to making its recommendation, the Contract Review Committee reviewed information furnished by the adviser and sub-adviser to each of the Eaton Vance Funds (including information specifically requested by the Board) for a series of formal meetings held between February and April 2020. Members of the Contract Review Committee also considered information received at prior meetings of the Board and its committees, to the extent such information was relevant to the Contract Review Committee’s annual evaluation of the investment advisory agreements and sub-advisory agreements.
In connection with its evaluation of the investment advisory agreements and sub-advisory agreements, the Board considered various information relating to the Eaton Vance Funds. This included information applicable to all or groups of Eaton Vance Funds, which is referenced immediately below, and information applicable to the particular Eaton Vance Fund covered by this report (additional fund-specific information is referenced below under “Results of the Contract Review Process”). (For funds that invest through one or more underlying portfolios, references to “each fund” in this section may include information that was considered at the portfolio-level.)
Information about Fees, Performance and Expenses
• | A report from an independent data provider comparing advisory and other fees paid by each fund to such fees paid by comparable funds, as identified by the independent data provider (“comparable funds”); |
• | A report from an independent data provider comparing each fund’s total expense ratio (and its components) to those of comparable funds; |
• | A report from an independent data provider comparing the investment performance of each fund (including, as relevant, total return data, income data, Sharpe ratios and information ratios) to the investment performance of comparable funds and, as applicable, benchmark indices, over various time periods; |
• | In certain instances, data regarding investment performance relative to customized groups of peer funds and blended indices identified by the adviser in consultation with the Portfolio Management Committee of the Board; |
• | Comparative information concerning the fees charged and services provided by the adviser and sub-adviser to each fund in managing other accounts (which may include other mutual funds, collective investment funds and institutional accounts) using investment strategies and techniques similar to those used in managing such fund(s), if any; |
• | Profitability analyses with respect to the adviser and sub-adviser to each of the funds; |
Information about Portfolio Management and Trading
• | Descriptions of the investment management services provided to each fund, as well as each of the funds’ investment strategies and policies; |
• | The procedures and processes used to determine the fair value of fund assets, when necessary, and actions taken to monitor and test the effectiveness of such procedures and processes; |
• | Information about the policies and practices of each fund’s adviser and sub-adviser (in the context of a sub-adviser, only those with trading responsibilities) with respect to trading, including their processes for seeking best execution of portfolio transactions; |
• | Information about the allocation of brokerage transactions and the benefits, if any, received by the adviser and sub-adviser (in the context of a sub-adviser, only those with trading responsibilities) to each fund as a result of brokerage allocation, including, as applicable, information concerning the acquisition of research through client commission arrangements and policies with respect to “soft dollars”; |
• | Data relating to the portfolio turnover rate of each fund; |
Information about each Adviser and Sub-adviser
• | Reports detailing the financial results and condition of the adviser and sub-adviser to each fund; |
• | Information regarding the individual investment professionals whose responsibilities include portfolio management and investment research for the funds, and, for portfolio managers and certain other investment professionals, information relating to their responsibilities with respect to managing other mutual funds and investment accounts, as applicable; |
1 | Not all Eaton Vance Funds have entered into a sub-advisory agreement with a sub-adviser. Accordingly, references to “sub-adviser” or “sub-advisory agreement” in this “Overview” section may not be applicable to the particular Eaton Vance Fund covered by this report. |
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Large-Cap Value Fund
June 30, 2020
Board of Trustees’ Contract Approval — continued
• | The Code of Ethics of the adviser and its affiliates and the sub-adviser of each fund, together with information relating to compliance with, and the administration of, such codes; |
• | Policies and procedures relating to proxy voting and the handling of corporate actions and class actions; |
• | Information concerning the resources devoted to compliance efforts undertaken by the adviser and its affiliates and the sub-adviser of each fund, if any, including descriptions of their various compliance programs and their record of compliance; |
• | Information concerning the business continuity and disaster recovery plans of the adviser and its affiliates and the sub-adviser of each fund, if any; |
• | A description of Eaton Vance Management’s and Boston Management and Research’s oversight of sub-advisers, including with respect to regulatory and compliance issues, investment management and other matters; |
Other Relevant Information
• | Information concerning the nature, cost and character of the administrative and other non-investment advisory services provided by Eaton Vance Management and its affiliates; |
• | Information concerning oversight of the relationship with the custodian, subcustodians and fund accountants by the adviser and/or administrator to each of the funds; |
• | For an Eaton Vance Fund structured as an exchange-listed closed-end fund, information concerning the benefits of the closed-end fund structure, as well as, where relevant, the closed-end fund’s market prices, trading volume data, distribution rates and other relevant matters; and |
• | The terms of each investment advisory agreement and sub-advisory agreement. |
During the various meetings of the Board and its committees throughout the twelve months ended April 2020, the Trustees received information from portfolio managers and other investment professionals of the advisers and sub-advisers of the funds regarding investment and performance matters, and considered various investment and trading strategies used in pursuing the funds’ investment objectives. The Trustees also received information regarding risk management techniques employed in connection with the management of the funds. The Board and its committees evaluated issues pertaining to industry and regulatory developments, compliance procedures, fund governance and other issues with respect to the funds, and received and participated in reports and presentations provided by Eaton Vance Management, Boston Management and Research and fund sub-advisers, with respect to such matters. In addition to the formal meetings of the Board and its committees, the Independent Trustees held regular teleconferences to discuss, among other topics, matters relating to the continuation of investment advisory agreements and sub-advisory agreements.
The Contract Review Committee was advised throughout the contract review process by Goodwin Procter LLP, independent legal counsel for the Independent Trustees. The members of the Contract Review Committee, with the advice of such counsel, exercised their own business judgment in determining the material factors to be considered in evaluating each investment advisory agreement and sub-advisory agreement and the weight to be given to each such factor. The conclusions reached with respect to each investment advisory agreement and sub-advisory agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each member of the Contract Review Committee may have placed varying emphasis on particular factors in reaching conclusions with respect to each investment advisory agreement and sub-advisory agreement. In evaluating each investment advisory agreement and sub-advisory agreement, including the fee structures and other terms contained in such agreements, the members of the Contract Review Committee were also informed by multiple years of analysis and discussion with the adviser and sub-adviser to each of the Eaton Vance Funds.
In voting its approval of the continuation of existing investment advisory agreements and sub-advisory agreements at the April 2020 Meeting, the Board relied on an order issued by the Securities and Exchange Commission on March 25, 2020, which provided temporary relief from the in-person voting requirements under Section 15 of the 1940 Act in response to the impacts of the COVID-19 pandemic.
Results of the Contract Review Process
Based on its consideration of the foregoing, and such other information it deemed relevant, including the factors and conclusions described below, the Contract Review Committee concluded that the continuation of the investment advisory agreement between Eaton Vance Large-Cap Value Fund (the “Fund”) and Boston Management and Research (the “Adviser”), including its fee structure, is in the interests of shareholders and, therefore, recommended to the Board approval of the agreement. Based on the recommendation of the Contract Review Committee, the Board, including a majority of the Independent Trustees, voted to approve continuation of the investment advisory agreement for the Fund.
Nature, Extent and Quality of Services
In considering whether to approve the investment advisory agreement for the Fund, the Board evaluated the nature, extent and quality of services provided to the Fund by the Adviser.
The Board considered the Adviser’s management capabilities and investment processes in light of the types of investments held by the Fund, including the education, experience and number of investment professionals and other personnel who provide portfolio management, investment research, and similar services to the Fund, including recent changes to such personnel. The Board specifically noted that the Adviser has devoted extensive resources to in-house equity research and also draws upon independent research available from third-party sources. The Board also took into account the resources dedicated to
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Eaton Vance
Large-Cap Value Fund
June 30, 2020
Board of Trustees’ Contract Approval — continued
portfolio management and other services, the compensation methods of the Adviser and other factors, including the reputation and resources of the Adviser to recruit and retain highly qualified research, advisory and supervisory investment professionals. In addition, the Board considered the time and attention devoted to the Eaton Vance Funds, including the Fund, by senior management, as well as the infrastructure, operational capabilities and support staff in place to assist in the portfolio management and operations of the Fund, including the provision of administrative services. The Board also considered the business-related and other risks to which the Adviser or its affiliates may be subject in managing the Fund.
The Board considered the compliance programs of the Adviser and relevant affiliates thereof. The Board considered compliance and reporting matters regarding, among other things, personal trading by investment professionals, disclosure of portfolio holdings, late trading, frequent trading, portfolio valuation, business continuity and the allocation of investment opportunities. The Board also considered the responses of the Adviser and its affiliates to requests in recent years from regulatory authorities, such as the Securities and Exchange Commission and the Financial Industry Regulatory Authority.
The Board considered other administrative services provided or overseen by Eaton Vance Management and its affiliates, including transfer agency and accounting services. The Board evaluated the benefits to shareholders of investing in a fund that is a part of a large fund complex offering exposure to a variety of asset classes and investment disciplines, as well as the ability, in many cases, to exchange an investment among different funds without incurring additional sales charges.
After consideration of the foregoing factors, among others, the Board concluded that the nature, extent and quality of services provided by the Adviser, taken as a whole, are appropriate and consistent with the terms of the investment advisory agreement.
Fund Performance
The Board compared the Fund’s investment performance to that of comparable funds identified by an independent data provider (the peer group), as well as an appropriate benchmark index. The Board’s review included comparative performance data with respect to the Fund for the one-, three-, five- and ten-year periods ended September 30, 2019. In this regard, the Board noted that the performance of the Fund was higher than the median performance of the Fund’s peer group for the three-year period. The Board also noted that the performance of the Fund was higher than its benchmark index for the three-year period. The Board concluded that the performance of the Fund was satisfactory.
Management Fees and Expenses
The Board considered contractual fee rates payable by the Fund for advisory and administrative services (referred to collectively as “management fees”). As part of its review, the Board considered the Fund’s management fees and total expense ratio for the one-year period ended September 30, 2019, as compared to those of comparable funds, before and after giving effect to any undertaking to waive fees or reimburse expenses. The Board also received and considered information about the services offered and the fee rates charged by the Adviser to other types of accounts with investment objectives and strategies that are substantially similar to and/or managed in a similar investment style as the Fund. In this regard, the Board received information about the differences in the nature and scope of services the Adviser provides to the Fund as compared to other types of accounts and the material differences in compliance, reporting and other legal burdens and risks to the Adviser as between the Fund and other types of accounts. The Board also considered factors that had an impact on the Fund’s total expense ratio relative to comparable funds.
After considering the foregoing information, and in light of the nature, extent and quality of the services provided by the Adviser, the Board concluded that the management fees charged for advisory and related services are reasonable.
Profitability and “Fall-Out” Benefits
The Board considered the level of profits realized by the Adviser and relevant affiliates thereof in providing investment advisory and administrative services to the Fund and to all Eaton Vance Funds as a group. The Board considered the level of profits realized without regard to marketing support or other payments by the Adviser and its affiliates to third parties in respect of distribution or other services.
The Board concluded that, in light of the foregoing factors and the nature, extent and quality of the services rendered, the profits realized by the Adviser and its affiliates are deemed not to be excessive.
The Board also considered direct or indirect fall-out benefits received by the Adviser and its affiliates in connection with their respective relationships with the Fund, including the benefits of research services that may be available to the Adviser as a result of securities transactions effected for the Fund and other investment advisory clients.
Economies of Scale
In reviewing management fees and profitability, the Board also considered the extent to which the Adviser and its affiliates, on the one hand, and the Fund, on the other hand, can expect to realize benefits from economies of scale as the assets of the Fund increase. The Board acknowledged the difficulty in accurately measuring the benefits resulting from economies of scale, if any, with respect to the management of any specific fund or group of funds. The Board reviewed data summarizing the increases and decreases in the assets of the Fund and of all Eaton Vance Funds as a group over various time
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Eaton Vance
Large-Cap Value Fund
June 30, 2020
Board of Trustees’ Contract Approval — continued
periods, and evaluated the extent to which the total expense ratio of the Fund and the profitability of the Adviser and its affiliates may have been affected by such increases or decreases. Based upon the foregoing, the Board concluded that the Fund currently shares in the benefits from economies of scale, if any, when they are realized by the Adviser. The Board also concluded that the structure of the advisory fee, which includes breakpoints at several asset levels, will allow the Fund to continue to benefit from any economies of scale in the future.
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Eaton Vance
Large-Cap Value Fund
June 30, 2020
Liquidity Risk Management Program
The Fund has implemented a written liquidity risk management program (Program) and related procedures to manage its liquidity in accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (Liquidity Rule). The Liquidity Rule defines “liquidity risk” as the risk that a fund could not meet requests to redeem shares issued by the fund without significant dilution of the remaining investors’ interests in the fund. The Fund’s Board of Trustees/Directors has designated the investment adviser to serve as the administrator of the Program and the related procedures. The administrator has established a Liquidity Risk Management Oversight Committee (Committee) to perform the functions necessary to administer the Program. As part of the Program, the administrator is responsible for identifying illiquid investments and categorizing the relative liquidity of the Fund’s investments in accordance with the Liquidity Rule. Under the Program, the administrator assesses, manages, and periodically reviews the Fund’s liquidity risk, and is responsible for making certain reports to the Fund’s Board of Trustees/Directors and the Securities and Exchange Commission (SEC) regarding the liquidity of the Fund’s investments, and to notify the Board of Trustees/Directors and the SEC of certain liquidity events specified in the Liquidity Rule. The liquidity of the Fund’s portfolio investments is determined based on a number of factors including, but not limited to, relevant market, trading and investment-specific considerations under the Program.
At a meeting of the Fund’s Board of Trustees/Directors, the Committee provided a written report to the Fund’s Board of Trustees/Directors pertaining to the operation, adequacy, and effectiveness of implementation of the Program, as well as the operation of the highly liquid investment minimum (if applicable) for the period December 1, 2018 through December 31, 2019 (Review Period). The Program operated effectively during the Review Period, supporting the administrator’s ability to assess, manage and monitor Fund liquidity risk, including during periods of market volatility and net redemptions. During the Review Period, the Fund met redemption requests on a timely basis.
There can be no assurance that the Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
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Table of Contents
Eaton Vance
Large-Cap Value Fund
June 30, 2020
Officers and Trustees
Officers
Payson F. Swaffield
President
Maureen A. Gemma
Vice President, Secretary and Chief Legal Officer
James F. Kirchner
Treasurer
Richard F. Froio
Chief Compliance Officer
Trustees
William H. Park
Chairperson
Thomas E. Faust Jr.*
Mark R. Fetting
Cynthia E. Frost
George J. Gorman
Valerie A. Mosley
Helen Frame Peters
Keith Quinton
Marcus L. Smith
Susan J. Sutherland
Scott E. Wennerholm
* | Interested Trustee |
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Eaton Vance Funds
IMPORTANT NOTICES
Privacy. The Eaton Vance organization is committed to ensuring your financial privacy. Each entity listed below has adopted a privacy policy and procedures (“Privacy Program”) Eaton Vance believes is reasonably designed to protect your personal information and to govern when and with whom Eaton Vance may share your personal information.
• | At the time of opening an account, Eaton Vance generally requires you to provide us with certain information such as name, address, social security number, tax status, account numbers, and account balances. This information is necessary for us to both open an account for you and to allow us to satisfy legal requirements such as applicable anti-money laundering reviews and know-your-customer requirements. |
• | On an ongoing basis, in the normal course of servicing your account, Eaton Vance may share your information with unaffiliated third parties that perform various services for Eaton Vance and/or your account. These third parties include transfer agents, custodians, broker/dealers and our professional advisers, including auditors, accountants, and legal counsel. Eaton Vance may additionally share your personal information with our affiliates. |
• | We believe our Privacy Program is reasonably designed to protect the confidentiality of your personal information and to prevent unauthorized access to that information. |
• | We reserve the right to change our Privacy Program at any time upon proper notification to you. You may want to review our Privacy Program periodically for changes by accessing the link on our homepage: www.eatonvance.com. |
Our pledge of protecting your personal information applies to the following entities within the Eaton Vance organization: the Eaton Vance Family of Funds, Eaton Vance Management, Eaton Vance Investment Counsel, Eaton Vance Distributors, Inc., Eaton Vance Trust Company, Eaton Vance Management (International) Limited, Eaton Vance Advisers International Limited, Eaton Vance Global Advisors Limited, Eaton Vance Management’s Real Estate Investment Group, Boston Management and Research, Calvert Research and Management, and Calvert Funds. This Privacy Notice supersedes all previously issued privacy disclosures. For more information about our Privacy Program or about how your personal information may be used, please call 1-800-262-1122.
Delivery of Shareholder Documents. The Securities and Exchange Commission (SEC) permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called “householding” and it helps eliminate duplicate mailings to shareholders. Eaton Vance, or your financial intermediary, may household the mailing of your documents indefinitely unless you instruct Eaton Vance, or your financial intermediary, 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 intermediary. Your instructions that householding not apply to delivery of your Eaton Vance documents will typically be effective within 30 days of receipt by Eaton Vance or your financial intermediary.
Portfolio Holdings. Each Eaton Vance Fund and its underlying Portfolio(s) (if applicable) files a schedule of portfolio holdings on Part F to Form N-PORT with the SEC. Certain information filed on Form N-PORT may be viewed on the Eaton Vance website at www.eatonvance.com, by calling Eaton Vance at 1-800-262-1122 or in the EDGAR database on the SEC’s website at www.sec.gov.
Proxy Voting. From time to time, funds are required to vote proxies related to the securities held by the funds. The Eaton Vance Funds or their underlying Portfolios (if applicable) vote proxies according to a set of policies and procedures approved by the Funds’ and Portfolios’ Boards. You may obtain a description of these policies and procedures and information on how the Funds or Portfolios voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge, upon request, by calling 1-800-262-1122 and by accessing the SEC’s website at www.sec.gov.
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Investment Adviser
Boston Management and Research
Two International Place
Boston, MA 02110
Administrator
Eaton Vance Management
Two International Place
Boston, MA 02110
Principal Underwriter*
Eaton Vance Distributors, Inc.
Two International Place
Boston, MA 02110
(617) 482-8260
Custodian
State Street Bank and Trust Company
State Street Financial Center, One Lincoln Street
Boston, MA 02111
Transfer Agent
BNY Mellon Investment Servicing (US) Inc.
Attn: Eaton Vance Funds
P.O. Box 9653
Providence, RI 02940-9653
(800) 262-1122
Fund Offices
Two International Place
Boston, MA 02110
* | FINRA BrokerCheck. Investors may check the background of their Investment Professional by contacting the Financial Industry Regulatory Authority (FINRA). FINRA BrokerCheck is a free tool to help investors check the professional background of current and former FINRA-registered securities firms and brokers. FINRA BrokerCheck is available by calling 1-800-289-9999 and at www.FINRA.org. The FINRA BrokerCheck brochure describing this program is available to investors at www.FINRA.org. |
Table of Contents
7702 6.30.20
Table of Contents
Eaton Vance
Real Estate Fund
Semiannual Report
June 30, 2020
Important Note. Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semi-annual shareholder reports will no longer be sent by mail unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (eatonvance.com/funddocuments), and you will be notified by mail each time a report is posted and provided with a website address to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you are a direct investor, you may elect to receive shareholder reports and other communications from the Fund electronically by signing up for e-Delivery at eatonvance.com/edelivery. If you own your shares through a financial intermediary (such as a broker-dealer or bank), you must contact your financial intermediary to sign up.
You may elect to receive all future Fund shareholder reports in paper free of charge. If you are a direct investor, you can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by calling 1-800-262-1122. If you own these shares through a financial intermediary, you must contact your financial intermediary or follow instructions included with this disclosure, if applicable, to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all Eaton Vance funds held directly or to all funds held through your financial intermediary, as applicable.
Table of Contents
Commodity Futures Trading Commission Registration. Effective December 31, 2012, the Commodity Futures Trading Commission (“CFTC”) adopted certain regulatory changes that subject registered investment companies and advisers to regulation by the CFTC if a fund invests more than a prescribed level of its assets in certain CFTC-regulated instruments (including futures, certain options and swap agreements) or markets itself as providing investment exposure to such instruments. The investment adviser has claimed an exclusion from the definition of “commodity pool operator” under the Commodity Exchange Act with respect to its management of the Fund. Accordingly, neither the Fund nor the adviser with respect to the operation of the Fund is subject to CFTC regulation. Because of its management of other strategies, the Fund’s adviser is registered with the CFTC as a commodity pool operator. The adviser is also registered as a commodity trading advisor.
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.
This report must be preceded or accompanied by a current summary prospectus or prospectus. Before investing, investors should consider carefully the investment objective, risks, and charges and expenses of a mutual fund. This and other important information is contained in the summary prospectus and prospectus, which can be obtained from a financial intermediary. Prospective investors should read the prospectus carefully before investing. For further information, please call 1-800-262-1122.
Table of Contents
Semiannual Report June 30, 2020
Eaton Vance
Real Estate Fund
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Table of Contents
Eaton Vance
Real Estate Fund
June 30, 2020
Portfolio Manager J. Scott Craig
% Average Annual Total Returns | Class Inception Date | Performance Inception Date | Six Months | One Year | Five Years | Ten Years | ||||||||||||||||||
Class A at NAV | 06/09/2010 | 04/28/2006 | –21.40 | % | –17.41 | % | 2.52 | % | 8.06 | % | ||||||||||||||
Class A with 5.75% Maximum Sales Charge | — | — | –25.93 | –22.14 | 1.32 | 7.43 | ||||||||||||||||||
Class I at NAV | 04/28/2006 | 04/28/2006 | –21.34 | –17.24 | 2.77 | 8.32 | ||||||||||||||||||
| ||||||||||||||||||||||||
Dow Jones U.S. Select Real Estate Securities Index | — | — | –22.01 | % | –17.71 | % | 2.42 | % | 8.23 | % | ||||||||||||||
S&P 500® Index | — | — | –3.08 | 7.51 | 10.72 | 13.98 | ||||||||||||||||||
% Total Annual Operating Expense Ratios3 | Class A | Class I | ||||||||||||||||||||||
Gross | 1.45 | % | 1.20 | % | ||||||||||||||||||||
Net | 1.26 | 1.01 |
Sector Allocation (% of net assets)4
Top 10 Holdings (% of net assets)4
ProLogis, Inc. | 8.1 | % | ||
Mid-America Apartment Communities, Inc. | 5.4 | |||
AvalonBay Communities, Inc. | 5.1 | |||
Public Storage | 5.1 | |||
Equity Residential | 4.5 | |||
Invitation Homes, Inc. | 4.5 | |||
Digital Realty Trust, Inc. | 4.3 | |||
Simon Property Group, Inc. | 3.8 | |||
Boston Properties, Inc. | 3.2 | |||
Camden Property Trust | 3.0 | |||
Total | 47.0 | % |
See Endnotes and Additional Disclosures in this report.
Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or offering price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance for periods less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to eatonvance.com.
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Eaton Vance
Real Estate Fund
June 30, 2020
Endnotes and Additional Disclosures
1 | Dow Jones U.S. Select Real Estate Securities Index is an unmanaged index of publicly traded real estate securities. S&P 500® Index is an unmanaged index of large-cap stocks commonly used as a measure of U.S. stock market performance. S&P Dow Jones Indices are a product of S&P Dow Jones Indices LLC (“S&P DJI”) and have been licensed for use. S&P® and S&P 500® are registered trademarks of S&P DJI; Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); S&P DJI, Dow Jones and their respective affiliates do not sponsor, endorse, sell or promote the Fund, will not have any liability with respect thereto and do not have any liability for any errors, omissions, or interruptions of the S&P Dow Jones Indices. Unless otherwise stated, index returns do not reflect the effect of any applicable sales charges, commissions, expenses, taxes or leverage, as applicable. It is not possible to invest directly in an index. |
2 | Total Returns at NAV do not include applicable sales charges. If sales charges were deducted, the returns would be lower. Total Returns shown with maximum sales charge reflect the stated maximum sales charge. Unless otherwise stated, performance does not reflect the deduction of taxes on Fund distributions or redemptions of Fund shares. |
3 | Source: Fund prospectus. Net expense ratios reflect a contractual expense reimbursement that continues through 4/30/21. Without the reimbursement, performance would have been lower. The expense ratios for the current reporting period can be found in the Financial Highlights section of this report. |
4 | Excludes cash and cash equivalents. |
Fund profile subject to change due to active management. |
3 |
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Eaton Vance
Real Estate Fund
June 30, 2020
Example: As a Fund shareholder, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases and redemption fees (if applicable); and (2) ongoing costs, including management fees; distribution and/or service fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of Fund investing and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2020 – June 30, 2020).
Actual Expenses: The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes: The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the actual Fund expense ratio and an assumed rate of return of 5% per year (before expenses), which is not the actual Fund return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption fees (if applicable). Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would be higher.
Beginning Account Value (1/1/20) | Ending Account Value (6/30/20) | Expenses Paid During Period* (1/1/20 – 6/30/20) | Annualized Expense Ratio | |||||||||||||
Actual | ||||||||||||||||
Class A | $ | 1,000.00 | $ | 786.00 | $ | 5.55 | ** | 1.25 | % | |||||||
Class I | $ | 1,000.00 | $ | 786.60 | $ | 4.44 | ** | 1.00 | % | |||||||
Hypothetical | ||||||||||||||||
(5% return per year before expenses) | ||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,018.60 | $ | 6.27 | ** | 1.25 | % | |||||||
Class I | $ | 1,000.00 | $ | 1,019.90 | $ | 5.02 | ** | 1.00 | % |
* | Expenses are equal to the Fund’s annualized expense ratio for the indicated Class, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). The Example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on December 31, 2019. |
** | Absent an allocation of certain expenses to an affiliate, expenses would be higher. |
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Table of Contents
Eaton Vance
Real Estate Fund
June 30, 2020
Portfolio of Investments (Unaudited)
Common Stocks — 98.6% |
| |||||||
Security | Shares | Value | ||||||
Hotels, Restaurants & Leisure — 1.9% | ||||||||
Hilton Worldwide Holdings, Inc. | 3,578 | $ | 262,804 | |||||
Marriott International, Inc., Class A | 3,371 | 288,996 | ||||||
$ | 551,800 | |||||||
Real Estate Investment Trusts — 96.7% |
| |||||||
Security | Shares | Value | ||||||
Diversified, Specialty & Other — 13.0% | ||||||||
CoreSite Realty Corp. | 3,553 | $ | 430,126 | |||||
Digital Realty Trust, Inc. | 8,635 | 1,227,120 | ||||||
Equinix, Inc. | 635 | 445,960 | ||||||
National Retail Properties, Inc. | 10,487 | 372,079 | ||||||
PS Business Parks, Inc. | 3,050 | 403,820 | ||||||
STORE Capital Corp. | 21,125 | 502,986 | ||||||
Vornado Realty Trust | 8,246 | 315,080 | ||||||
$ | 3,697,171 | |||||||
Health Care — 7.1% | ||||||||
Healthcare Realty Trust, Inc. | 14,187 | $ | 415,537 | |||||
Healthpeak Properties, Inc. | 20,581 | 567,213 | ||||||
Ventas, Inc. | 14,324 | 524,545 | ||||||
Welltower, Inc. | 9,607 | 497,162 | ||||||
$ | 2,004,457 | |||||||
Hotels & Resorts — 2.7% | ||||||||
Apple Hospitality REIT, Inc. | 36,649 | $ | 354,029 | |||||
Host Hotels & Resorts, Inc. | 15,610 | 168,432 | ||||||
Sunstone Hotel Investors, Inc. | 31,177 | 254,093 | ||||||
$ | 776,554 | |||||||
Industrial — 16.4% | ||||||||
Duke Realty Corp. | 20,587 | $ | 728,574 | |||||
EastGroup Properties, Inc. | 6,680 | 792,315 | ||||||
First Industrial Realty Trust, Inc. | 11,730 | 450,901 | ||||||
ProLogis, Inc. | 24,605 | 2,296,385 | ||||||
Rexford Industrial Realty, Inc. | 9,578 | 396,816 | ||||||
$ | 4,664,991 | |||||||
Malls and Factory Outlets — 3.8% | ||||||||
Simon Property Group, Inc. | 15,724 | $ | 1,075,207 | |||||
$ | 1,075,207 |
Security | Shares | Value | ||||||
Multifamily — 27.9% | ||||||||
American Campus Communities, Inc. | 11,641 | $ | 406,969 | |||||
American Homes 4 Rent, Class A | 30,180 | 811,842 | ||||||
AvalonBay Communities, Inc. | 9,452 | 1,461,657 | ||||||
Camden Property Trust | 9,370 | 854,731 | ||||||
Equity Residential | 21,974 | 1,292,511 | ||||||
Essex Property Trust, Inc. | 1,321 | 302,734 | ||||||
Invitation Homes, Inc. | 46,673 | 1,284,908 | ||||||
Mid-America Apartment Communities, Inc. | 13,338 | 1,529,468 | ||||||
$ | 7,944,820 | |||||||
Office — 11.0% | ||||||||
Boston Properties, Inc. | 10,113 | $ | 914,013 | |||||
Cousins Properties, Inc. | 27,678 | 825,635 | ||||||
Douglas Emmett, Inc. | 8,186 | 250,983 | ||||||
Highwoods Properties, Inc. | 13,302 | 496,564 | ||||||
Hudson Pacific Properties, Inc. | 17,666 | 444,476 | ||||||
JBG Smith Properties | 7,092 | 209,710 | ||||||
$ | 3,141,381 | |||||||
Self Storage — 9.9% | ||||||||
CubeSmart | 30,008 | $ | 809,916 | |||||
Extra Space Storage, Inc. | 5,956 | 550,156 | ||||||
Public Storage | 7,596 | 1,457,596 | ||||||
$ | 2,817,668 | |||||||
Strip Centers — 4.9% | ||||||||
Federal Realty Investment Trust | 5,237 | $ | 446,245 | |||||
Kimco Realty Corp. | 15,676 | 201,280 | ||||||
Regency Centers Corp. | 11,097 | 509,241 | ||||||
SITE Centers Corp. | 30,650 | 248,265 | ||||||
$ | 1,405,031 | |||||||
Total Real Estate Investment Trusts | $ | 27,527,280 | ||||||
Total Common Stocks | $ | 28,079,080 | ||||||
Exchange-Traded Funds — 0.9% |
| |||||||
Security | Shares | Value | ||||||
iShares U.S. Real Estate ETF | 3,433 | $ | 270,555 | |||||
Total Exchange-Traded Funds |
| $ | 270,555 |
5 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Real Estate Fund
June 30, 2020
Portfolio of Investments (Unaudited) — continued
Short-Term Investments — 0.5% |
| |||||||
Description | Units | Value | ||||||
Eaton Vance Cash Reserves Fund, LLC, 0.35%(1) | 129,938 | $ | 129,938 | |||||
Total Short-Term Investments |
| $ | 129,938 | |||||
Total Investments — 100.0% |
| $ | 28,479,573 | |||||
Other Assets, Less Liabilities — 0.0%(2) |
| $ | 1,090 | |||||
Net Assets — 100.0% |
| $ | 28,480,663 |
The percentage shown for each investment category in the Portfolio of Investments is based on net assets.
(1) | Affiliated investment company, available to Eaton Vance portfolios and funds, which invests in high quality, U.S. dollar denominated money market instruments. The rate shown is the annualized seven-day yield as of June 30, 2020. |
(2) | Amount is less than 0.05%. |
6 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Real Estate Fund
June 30, 2020
Statement of Assets and Liabilities (Unaudited)
Assets | June 30, 2020 | |||
Unaffiliated investments, at value (identified cost, $24,025,842) | $ | 28,349,635 | ||
Affiliated investment, at value (identified cost, $129,938) | 129,938 | |||
Dividends receivable | 95,284 | |||
Dividends receivable from affiliated investment | 23 | |||
Receivable for Fund shares sold | 34,802 | |||
Receivable from affiliate | 5,494 | |||
Total assets | $ | 28,615,176 | ||
Liabilities | ||||
Payable for Fund shares redeemed | $ | 70,184 | ||
Payable to affiliates: | ||||
Investment adviser fee | 15,822 | |||
Administration fee | 3,651 | |||
Distribution and service fees | 1,461 | |||
Trustees’ fees | 628 | |||
Accrued expenses | 42,767 | |||
Total liabilities | $ | 134,513 | ||
Net Assets | $ | 28,480,663 | ||
Sources of Net Assets |
| |||
Paid-in capital | $ | 25,608,706 | ||
Distributable earnings | 2,871,957 | |||
Total | $ | 28,480,663 | ||
Class A Shares | ||||
Net Assets | $ | 6,834,896 | ||
Shares Outstanding | 573,379 | |||
Net Asset Value and Redemption Price Per Share | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 11.92 | ||
Maximum Offering Price Per Share | ||||
(100 ÷ 94.25 of net asset value per share) | $ | 12.65 | ||
Class I Shares |
| |||
Net Assets | $ | 21,645,767 | ||
Shares Outstanding | 1,817,005 | |||
Net Asset Value, Offering Price and Redemption Price Per Share | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 11.91 |
On sales of $50,000 or more, the offering price of Class A shares is reduced.
7 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Real Estate Fund
June 30, 2020
Statement of Operations (Unaudited)
Investment Income | Six Months Ended June 30, 2020 | |||
Dividends | $ | 569,145 | ||
Dividends from affiliated investment | 584 | |||
Total investment income | $ | 569,729 | ||
Expenses | ||||
Investment adviser fee | $ | 107,825 | ||
Administration fee | 24,883 | |||
Distribution and service fees | ||||
Class A | 10,100 | |||
Trustees’ fees and expenses | 1,147 | |||
Custodian fee | 9,522 | |||
Transfer and dividend disbursing agent fees | 24,007 | |||
Legal and accounting services | 23,017 | |||
Printing and postage | 7,261 | |||
Registration fees | 15,767 | |||
Miscellaneous | 5,750 | |||
Total expenses | $ | 229,279 | ||
Deduct — | ||||
Allocation of expenses to affiliate | $ | 53,057 | ||
Total expense reductions | $ | 53,057 | ||
Net expenses | $ | 176,222 | ||
Net investment income | $ | 393,507 | ||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) — | ||||
Investment transactions | $ | (974,387 | ) | |
Investment transactions — affiliated investment | 70 | |||
Net realized loss | $ | (974,317 | ) | |
Change in unrealized appreciation (depreciation) — | ||||
Investments | $ | (8,143,632 | ) | |
Investments — affiliated investment | (4 | ) | ||
Net change in unrealized appreciation (depreciation) | $ | (8,143,636 | ) | |
Net realized and unrealized loss | $ | (9,117,953 | ) | |
Net decrease in net assets from operations | $ | (8,724,446 | ) |
8 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Real Estate Fund
June 30, 2020
Statements of Changes in Net Assets
Increase (Decrease) in Net Assets | Six Months Ended June 30, 2020 | Year Ended December 31, 2019 | ||||||
From operations — | ||||||||
Net investment income | $ | 393,507 | $ | 848,599 | ||||
Net realized gain (loss) | (974,317 | ) | 1,717,198 | |||||
Net change in unrealized appreciation (depreciation) | (8,143,636 | ) | 7,561,994 | |||||
Net increase (decrease) in net assets from operations | $ | (8,724,446 | ) | $ | 10,127,791 | |||
Distributions to shareholders — | ||||||||
Class A | $ | (87,146 | ) | $ | (417,371 | ) | ||
Class I | (306,974 | ) | (1,473,075 | ) | ||||
Total distributions to shareholders | $ | (394,120 | ) | $ | (1,890,446 | ) | ||
Transactions in shares of beneficial interest — | ||||||||
Proceeds from sale of shares | ||||||||
Class A | $ | 749,627 | $ | 1,451,704 | ||||
Class I | 2,343,342 | 7,485,217 | ||||||
Net asset value of shares issued to shareholders in payment of distributions declared | ||||||||
Class A | 87,134 | 417,271 | ||||||
Class I | 304,899 | 1,463,391 | ||||||
Cost of shares redeemed | ||||||||
Class A | (1,672,021 | ) | (2,859,584 | ) | ||||
Class I | (5,239,276 | ) | (29,218,017 | ) | ||||
Net decrease in net assets from Fund share transactions | $ | (3,426,295 | ) | $ | (21,260,018 | ) | ||
Net decrease in net assets | $ | (12,544,861 | ) | $ | (13,022,673 | ) | ||
Net Assets | ||||||||
At beginning of period | $ | 41,025,524 | $ | 54,048,197 | ||||
At end of period | $ | 28,480,663 | $ | 41,025,524 |
9 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Real Estate Fund
June 30, 2020
Financial Highlights
Class A | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 15.370 | $ | 12.930 | $ | 13.930 | $ | 13.700 | $ | 13.790 | $ | 14.030 | ||||||||||||
Income (Loss) From Operations | ||||||||||||||||||||||||
Net investment income(1) | $ | 0.140 | $ | 0.249 | $ | 0.237 | $ | 0.199 | $ | 0.158 | $ | 0.192 | ||||||||||||
Net realized and unrealized gain (loss) | (3.446 | ) | 2.839 | (0.870 | ) | 0.333 | 0.518 | 0.660 | ||||||||||||||||
Total income (loss) from operations | $ | (3.306 | ) | $ | 3.088 | $ | (0.633 | ) | $ | 0.532 | $ | 0.676 | $ | 0.852 | ||||||||||
Less Distributions | ||||||||||||||||||||||||
From net investment income | $ | (0.144 | ) | $ | (0.249 | ) | $ | (0.246 | ) | $ | (0.212 | ) | $ | (0.226 | ) | $ | (0.227 | ) | ||||||
From net realized gain | — | (0.399 | ) | (0.121 | ) | (0.090 | ) | (0.540 | ) | (0.865 | ) | |||||||||||||
Total distributions | $ | (0.144 | ) | $ | (0.648 | ) | $ | (0.367 | ) | $ | (0.302 | ) | $ | (0.766 | ) | $ | (1.092 | ) | ||||||
Net asset value — End of period | $ | 11.920 | $ | 15.370 | $ | 12.930 | $ | 13.930 | $ | 13.700 | $ | 13.790 | ||||||||||||
Total Return(2)(3) | (21.40 | )%(4) | 23.99 | % | (4.61 | )% | 3.93 | % | 4.94 | % | 6.40 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 6,835 | $ | 9,862 | $ | 9,169 | $ | 11,766 | $ | 21,078 | $ | 21,880 | ||||||||||||
Ratios (as a percentage of average daily net assets): | ||||||||||||||||||||||||
Expenses(3) | 1.25 | %(5) | 1.26 | %(6) | 1.25 | % | 1.25 | % | 1.25 | % | 1.25 | % | ||||||||||||
Net investment income | 2.17 | %(5) | 1.64 | % | 1.76 | % | 1.45 | % | 1.13 | % | 1.38 | % | ||||||||||||
Portfolio Turnover | 18 | %(4) | 18 | % | 35 | % | 36 | % | 52 | % | 72 | % |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges. |
(3) | The administrator reimbursed certain operating expenses (equal to 0.32%, 0.19%, 0.16%, 0.17%, 0.23% and 0.30% of average daily net assets for the six months ended June 30, 2020 and the years ended December 31, 2019, 2018, 2017, 2016 and 2015, respectively). Absent this reimbursement, total return would be lower. |
(4) | Not annualized. |
(5) | Annualized. |
(6) | Includes interest expense of 0.01% for the year ended December 31, 2019. |
10 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Real Estate Fund
June 30, 2020
Financial Highlights — continued
Class I | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 15.370 | $ | 12.920 | $ | 13.930 | $ | 13.700 | $ | 13.800 | $ | 14.030 | ||||||||||||
Income (Loss) From Operations | ||||||||||||||||||||||||
Net investment income(1) | $ | 0.158 | $ | 0.280 | $ | 0.286 | $ | 0.271 | $ | 0.200 | $ | 0.192 | ||||||||||||
Net realized and unrealized gain (loss) | (3.456 | ) | 2.856 | (0.894 | ) | 0.301 | 0.501 | 0.703 | ||||||||||||||||
Total income (loss) from operations | $ | (3.298 | ) | $ | 3.136 | $ | (0.608 | ) | $ | 0.572 | $ | 0.701 | $ | 0.895 | ||||||||||
Less Distributions | ||||||||||||||||||||||||
From net investment income | $ | (0.162 | ) | $ | (0.287 | ) | $ | (0.281 | ) | $ | (0.252 | ) | $ | (0.261 | ) | $ | (0.260 | ) | ||||||
From net realized gain | — | (0.399 | ) | (0.121 | ) | (0.090 | ) | (0.540 | ) | (0.865 | ) | |||||||||||||
Total distributions | $ | (0.162 | ) | $ | (0.686 | ) | $ | (0.402 | ) | $ | (0.342 | ) | $ | (0.801 | ) | $ | (1.125 | ) | ||||||
Net asset value — End of period | $ | 11.910 | $ | 15.370 | $ | 12.920 | $ | 13.930 | $ | 13.700 | $ | 13.800 | ||||||||||||
Total Return(2)(3) | (21.34 | )%(4) | 24.39 | % | (4.43 | )% | 4.23 | % | 5.12 | % | 6.73 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 21,646 | $ | 31,163 | $ | 44,879 | $ | 36,340 | $ | 25,930 | $ | 17,044 | ||||||||||||
Ratios (as a percentage of average daily net assets): | ||||||||||||||||||||||||
Expenses(3) | 1.00 | %(5) | 1.01 | %(6) | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | ||||||||||||
Net investment income | 2.44 | %(5) | 1.85 | % | 2.12 | % | 1.97 | % | 1.43 | % | 1.37 | % | ||||||||||||
Portfolio Turnover | 18 | %(4) | 18 | % | 35 | % | 36 | % | 52 | % | 72 | % |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested. |
(3) | The administrator reimbursed certain operating expenses (equal to 0.32%, 0.19%, 0.16%, 0.17%, 0.23% and 0.30% of average daily net assets for the six months ended June 30, 2020 and the years ended December 31, 2019, 2018, 2017, 2016 and 2015, respectively). Absent this reimbursement, total return would be lower. |
(4) | Not annualized. |
(5) | Annualized. |
(6) | Includes interest expense of 0.01% for the year ended December 31, 2019. |
11 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Real Estate Fund
June 30, 2020
Notes to Financial Statements (Unaudited)
1 Significant Accounting Policies
Eaton Vance Real Estate Fund (the Fund) is a non-diversified series of Eaton Vance Special Investment Trust (the Trust). The Trust is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company. The Fund’s investment objective is to seek total return. The Fund offers two classes of shares. Class A shares are generally sold subject to a sales charge imposed at time of purchase. Class I shares are sold at net asset value and are not subject to a sales charge. Each class represents a pro-rata interest in the Fund, but votes separately on class-specific matters and (as noted below) is subject to different expenses. Realized and unrealized gains and losses and net investment income and losses, other than class-specific expenses, are allocated daily to each class of shares based on the relative net assets of each class to the total net assets of the Fund. Each class of shares differs in its distribution plan and certain other class-specific expenses.
The following is a summary of significant accounting policies of the Fund. The policies are in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The Fund is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946.
A Investment Valuation — The following methodologies are used to determine the market value or fair value of investments.
Equity Securities. Equity securities listed on a U.S. securities exchange generally are valued at the last sale or closing price on the day of valuation or, if no sales took place on such date, at the mean between the closing bid and ask prices on the exchange where such securities are principally traded. Equity securities listed on the NASDAQ Global or Global Select Market generally are valued at the NASDAQ official closing price. Unlisted or listed securities for which closing sales prices or closing quotations are not available are valued at the mean between the latest available bid and ask prices.
Affiliated Fund. The Fund may invest in Eaton Vance Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by Eaton Vance Management (EVM). While Cash Reserves Fund is not a registered money market mutual fund, it conducts all of its investment activities in accordance with the requirements of Rule 2a-7 under the 1940 Act. Investments in Cash Reserves Fund are valued at the closing net asset value per unit on the valuation day. Cash Reserves Fund generally values its investment securities based on available market quotations provided by a third party pricing service.
Fair Valuation. Investments for which valuations or market quotations are not readily available or are deemed unreliable are valued at fair value using methods determined in good faith by or at the direction of the Trustees of the Fund in a manner that most fairly reflects the security’s “fair value”, which is the amount that the Fund might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of relevant factors, which are likely to vary from one pricing context to another. These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issuer or of comparable companies or entities, quotations or relevant information obtained from broker/dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the company’s or entity’s financial statements, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.
B Investment Transactions — Investment transactions for financial statement purposes are accounted for on a trade date basis. Realized gains and losses on investments sold are determined on the basis of identified cost.
C Income — Dividend income is recorded on the ex-dividend date for dividends received in cash and/or securities. Dividends from real estate investment trusts (REITs) and distributions from investment companies are recorded as income, capital gains or return of capital based on the nature of the distribution.
D Federal Taxes — The Fund’s policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its net investment income, and all or substantially all of its net realized capital gains. Accordingly, no provision for federal income or excise tax is necessary.
As of June 30, 2020, the Fund had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. The Fund files a U.S. federal income tax return annually after its fiscal year-end, which is subject to examination by the Internal Revenue Service for a period of three years from the date of filing.
E Expenses — The majority of expenses of the Trust are directly identifiable to an individual fund. Expenses which are not readily identifiable to a specific fund are allocated taking into consideration, among other things, the nature and type of expense and the relative size of the funds.
F Use of Estimates — The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.
G Indemnifications — Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund. Under Massachusetts law, if certain conditions prevail, shareholders of a Massachusetts business trust (such as the Trust) could be deemed to have personal liability for the obligations of the Trust. However, the Trust’s Declaration of Trust contains an express disclaimer of liability on the part of Fund shareholders and the By-laws provide that the Trust shall assume, upon request by the shareholder, the defense on behalf of any Fund shareholders. Moreover, the By-laws also provide for indemnification out of Fund property of any shareholder held personally
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Table of Contents
Eaton Vance
Real Estate Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
liable solely by reason of being or having been a shareholder for all loss or expense arising from such liability. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.
H Interim Financial Statements — The interim financial statements relating to June 30, 2020 and for the six months then ended have not been audited by an independent registered public accounting firm, but in the opinion of the Fund’s management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial statements.
2 Distributions to Shareholders and Income Tax Information
It is the present policy of the Fund to make at least quarterly distributions of substantially all of the distributions it receives from its real estate investments, less expenses, as well as income from other investments. Such distributions may be comprised of income, return of capital, and capital gains. The Fund may also realize capital gains on the sale of its real estate investments and other investments. Distributions of these gains, if any, will be made annually. In addition, the Fund may occasionally be required to make supplemental distributions at some other time during the year. Distributions to shareholders are recorded on the ex-dividend date. Distributions are declared separately for each class of shares. Shareholders may reinvest income and capital gain distributions in additional shares of the same class of the Fund at the net asset value as of the ex-dividend date or, at the election of the shareholder, receive distributions in cash. Distributions to shareholders are determined in accordance with income tax regulations, which may differ from U.S. GAAP. As required by U.S. GAAP, only distributions in excess of tax basis earnings and profits are 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. For tax purposes, distributions from short-term capital gains are considered to be from ordinary income.
The cost and unrealized appreciation (depreciation) of investments of the Fund at June 30, 2020, as determined on a federal income tax basis, were as follows:
Aggregate cost | $ | 24,727,308 | ||
Gross unrealized appreciation | $ | 5,201,451 | ||
Gross unrealized depreciation | (1,449,186 | ) | ||
Net unrealized appreciation | $ | 3,752,265 |
3 Investment Adviser Fee and Other Transactions with Affiliates
The investment adviser fee is earned by EVM as compensation for management and investment advisory services rendered to the Fund. The fee is computed at an annual rate of 0.65% of the Fund’s average daily net assets and is payable monthly. For the six months ended June 30, 2020, the Fund’s investment adviser fee amounted to $107,825. The Fund invests its cash in Cash Reserves Fund. EVM does not currently receive a fee for advisory services provided to Cash Reserves Fund. The administration fee is earned by EVM for administering the business affairs of the Fund and is computed at an annual rate of 0.15% of the Fund’s average daily net assets. For the six months ended June 30, 2020, the administration fee amounted to $24,883. EVM has agreed to reimburse the Fund’s expenses to the extent that total annual operating expenses (relating to ordinary operating expenses only and excluding expenses such as brokerage commissions, acquired fund fees and expenses of unaffiliated funds, borrowing costs, taxes or litigation expenses) exceed 1.25% and 1.00% of the Fund’s average daily net assets for Class A and Class I, respectively. This agreement may be changed or terminated after April 30, 2021. Pursuant to this agreement, EVM was allocated $53,057 of the Fund’s operating expenses for the six months ended June 30, 2020.
EVM provides sub-transfer agency and related services to the Fund pursuant to a Sub-Transfer Agency Support Services Agreement. For the six months ended June 30, 2020, EVM earned $2,047 from the Fund pursuant to such agreement, which is included in transfer and dividend disbursing agent fees on the Statement of Operations. The Fund was informed that Eaton Vance Distributors, Inc. (EVD), an affiliate of EVM and the Fund’s principal underwriter, received $770 as its portion of the sales charge on sales of Class A shares for the six months ended June 30, 2020. EVD also received distribution and service fees from Class A (see Note 4).
Trustees and officers of the Fund who are members of EVM’s organization receive remuneration for their services to the Fund out of the investment adviser fee. Trustees of the Fund who are not affiliated with the investment adviser may elect to defer receipt of all or a percentage of their annual fees in accordance with the terms of the Trustees Deferred Compensation Plan. For the six months ended June 30, 2020, no significant amounts have been deferred. Certain officers and Trustees of the Fund are officers of EVM.
4 Distribution Plan
The Fund has in effect a distribution plan for Class A shares (Class A Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class A Plan, the Fund pays EVD a distribution and service fee of 0.25% per annum of its average daily net assets attributable to Class A shares for distribution services and
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Table of Contents
Eaton Vance
Real Estate Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
facilities provided to the Fund by EVD, as well as for personal services and/or the maintenance of shareholder accounts. Distribution and service fees paid or accrued to EVD for the six months ended June 30, 2020 amounted to $10,100 for Class A shares.
Distribution and service fees are subject to the limitations contained in the Financial Industry Regulatory Authority Rule 2341(d).
5 Contingent Deferred Sales Charges
Class A shares may be subject to a 1% contingent deferred sales charge (CDSC) if redeemed within 18 months of purchase (depending on the circumstances of purchase). Generally, the CDSC is based upon the lower of the net asset value at date of redemption or date of purchase. No charge is levied on shares acquired by reinvestment of dividends or capital gain distributions. For the six months ended June 30, 2020, the Fund was informed that EVD received no CDSCs paid by Class A shareholders.
6 Purchases and Sales of Investments
Purchases and sales of investments, other than short-term obligations, aggregated $6,163,293 and $9,517,190, respectively, for the six months ended June 30, 2020.
7 Shares of Beneficial Interest
The Fund’s Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value). Such shares may be issued in a number of different series (such as the Fund) and classes. Transactions in Fund shares were as follows:
Class A | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 58,472 | 94,334 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | 8,177 | 27,415 | ||||||
Redemptions | (134,759 | ) | (189,489 | ) | ||||
Net decrease | (68,110 | ) | (67,740 | ) | ||||
Class I | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 190,754 | 496,679 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | 28,612 | 96,149 | ||||||
Redemptions | (429,816 | ) | (2,037,689 | ) | ||||
Net decrease | (210,450 | ) | (1,444,861 | ) |
8 Line of Credit
The Fund participates with other portfolios and funds managed by EVM and its affiliates in an $800 million unsecured line of credit agreement with a group of banks, which is in effect through October 27, 2020. In connection with the renewal of the agreement on October 29, 2019, funds managed by Calvert Research and Management, an affiliate of EVM, were added as participating funds to the agreement and the borrowing limit was increased from $625 million. Borrowings are made by the Fund solely for temporary purposes related to redemptions and other short-term cash needs. Interest is charged to the Fund based on its borrowings at an amount above either the Eurodollar rate or Federal Funds rate. In addition, a fee computed at an annual rate of 0.15% on the daily unused portion of the line of credit is allocated among the participating portfolios and funds at the end of each quarter. Because the line of credit is not available exclusively to the Fund, it may be unable to borrow some or all of its requested amounts at any particular time. The Fund did not have any significant borrowings or allocated fees during the six months ended June 30, 2020.
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Table of Contents
Eaton Vance
Real Estate Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
9 Investments in Affiliated Funds
At June 30, 2020, the value of the Fund’s investment in affiliated funds was $129,938, which represents 0.5% of the Fund’s net assets. Transactions in affiliated funds by the Fund for the six months ended June 30, 2020 were as follows:
Name of affiliated fund | Value, beginning of period | Purchases | Sales proceeds | Net realized gain (loss) | Change in unrealized appreciation (depreciation) | Value, end of period | Dividend income | Units, end of period | ||||||||||||||||||||||||
Short-Term Investments |
| |||||||||||||||||||||||||||||||
Eaton Vance Cash Reserves Fund, LLC | $ | 80,949 | $ | 2,609,884 | $ | (2,560,961 | ) | $ | 70 | $ | (4 | ) | $ | 129,938 | $ | 584 | 129,938 |
10 Fair Value Measurements
Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
• | Level 1 – quoted prices in active markets for identical investments |
• | Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
• | Level 3 – significant unobservable inputs (including a fund’s own assumptions in determining the fair value of investments) |
In cases where the inputs used to measure fair value fall in different levels of the fair value hierarchy, the level disclosed is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
At June 30, 2020, the hierarchy of inputs used in valuing the Fund’s investments, which are carried at value, were as follows:
Asset Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stocks | $ | 28,079,080 | * | $ | — | $ | — | $ | 28,079,080 | |||||||
Exchange-Traded Funds | 270,555 | — | — | 270,555 | ||||||||||||
Short-Term Investments | — | 129,938 | — | 129,938 | ||||||||||||
Total Investments | $ | 28,349,635 | $ | 129,938 | $ | — | $ | 28,479,573 |
* | The level classification by major category of investments is the same as the category presentation in the Portfolio of Investments. |
11 Risks and Uncertainties
Concentration of Risk
In accordance with the Fund’s strategy, under normal market conditions, the Fund’s investments are concentrated in equity securities of companies primarily engaged in the real estate industry, such as REITs and other real estate related investments. Securities of companies in the real estate industry are subject to special risks including changes in real estate values, property taxes, interest rates, cash flow of underlying real estate assets, occupancy rates, government regulations affecting zoning, land use and rents, and the management skill and creditworthiness of the issuer. Companies in the real estate industry may also be subject to liabilities under environmental and hazardous waste laws, among others.
Pandemic Risk
An outbreak of respiratory disease caused by a novel coronavirus that was first detected in China in December 2019 has spread rapidly internationally. This coronavirus has resulted in closing borders, enhanced health screenings, changes to healthcare service preparation and delivery, quarantines, cancellations, disruptions to supply chains and customer activity, as well as general concern and uncertainty. The impact of this outbreak has negatively affected the worldwide economy, as well as the economies of individual countries and individual companies and can affect the market in general in significant and unforeseen ways. Health crises caused by outbreaks, such as the coronavirus outbreak, may exacerbate other pre-existing political, social and economic risks and disrupt normal market conditions and operations. The near-term impact of this coronavirus has resulted in substantial market volatility, which may have an adverse effect on the Fund’s investments.
15 |
Table of Contents
Eaton Vance
Real Estate Fund
June 30, 2020
Board of Trustees’ Contract Approval
Overview of the Contract Review Process
The Investment Company Act of 1940, as amended (the “1940 Act”), provides, in substance, that the investment advisory agreement between a fund and its investment adviser will continue in effect from year-to-year only if its continuation is approved on an annual basis by a vote of the fund’s board of trustees, including a majority of the trustees who are not “interested persons” of the fund (“independent trustees”), cast in person at a meeting called for the purpose of considering such approval.
At a meeting held on April 22, 2020 (the “April 2020 Meeting”), the Boards of Trustees/Directors comprised of the same individuals (collectively, the “Board”) that oversees a majority of the registered investment companies advised by Eaton Vance Management or its affiliate, Boston Management and Research (the “Eaton Vance Funds”), including a majority of the independent trustees (the “Independent Trustees”), voted to approve the continuation of existing investment advisory agreements and sub-advisory agreements(1) for each of the Eaton Vance Funds for an additional one-year period. The Board relied upon the affirmative recommendation of its Contract Review Committee, which is a committee exclusively comprised of Independent Trustees. Prior to making its recommendation, the Contract Review Committee reviewed information furnished by the adviser and sub-adviser to each of the Eaton Vance Funds (including information specifically requested by the Board) for a series of formal meetings held between February and April 2020. Members of the Contract Review Committee also considered information received at prior meetings of the Board and its committees, to the extent such information was relevant to the Contract Review Committee’s annual evaluation of the investment advisory agreements and sub-advisory agreements.
In connection with its evaluation of the investment advisory agreements and sub-advisory agreements, the Board considered various information relating to the Eaton Vance Funds. This included information applicable to all or groups of Eaton Vance Funds, which is referenced immediately below, and information applicable to the particular Eaton Vance Fund covered by this report (additional fund-specific information is referenced below under “Results of the Contract Review Process”). (For funds that invest through one or more underlying portfolios, references to “each fund” in this section may include information that was considered at the portfolio-level.)
Information about Fees, Performance and Expenses
• | A report from an independent data provider comparing advisory and other fees paid by each fund to such fees paid by comparable funds, as identified by the independent data provider (“comparable funds”); |
• | A report from an independent data provider comparing each fund’s total expense ratio (and its components) to those of comparable funds; |
• | A report from an independent data provider comparing the investment performance of each fund (including, as relevant, total return data, income data, Sharpe ratios and information ratios) to the investment performance of comparable funds and, as applicable, benchmark indices, over various time periods; |
• | In certain instances, data regarding investment performance relative to customized groups of peer funds and blended indices identified by the adviser in consultation with the Portfolio Management Committee of the Board; |
• | Comparative information concerning the fees charged and services provided by the adviser and sub-adviser to each fund in managing other accounts (which may include other mutual funds, collective investment funds and institutional accounts) using investment strategies and techniques similar to those used in managing such fund(s), if any; |
• | Profitability analyses with respect to the adviser and sub-adviser to each of the funds; |
Information about Portfolio Management and Trading
• | Descriptions of the investment management services provided to each fund, as well as each of the funds’ investment strategies and policies; |
• | The procedures and processes used to determine the fair value of fund assets, when necessary, and actions taken to monitor and test the effectiveness of such procedures and processes; |
• | Information about the policies and practices of each fund’s adviser and sub-adviser (in the context of a sub-adviser, only those with trading responsibilities) with respect to trading, including their processes for seeking best execution of portfolio transactions; |
• | Information about the allocation of brokerage transactions and the benefits, if any, received by the adviser and sub-adviser (in the context of a sub-adviser, only those with trading responsibilities) to each fund as a result of brokerage allocation, including, as applicable, information concerning the acquisition of research through client commission arrangements and policies with respect to “soft dollars”; |
• | Data relating to the portfolio turnover rate of each fund; |
Information about each Adviser and Sub-adviser
• | Reports detailing the financial results and condition of the adviser and sub-adviser to each fund; |
• | Information regarding the individual investment professionals whose responsibilities include portfolio management and investment research for the funds, and, for portfolio managers and certain other investment professionals, information relating to their responsibilities with respect to managing other mutual funds and investment accounts, as applicable; |
(1) | Not all Eaton Vance Funds have entered into a sub-advisory agreement with a sub-adviser. Accordingly, references to “sub-adviser” or “sub-advisory agreement” in this “Overview” section may not be applicable to the particular Eaton Vance Fund covered by this report. |
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Eaton Vance
Real Estate Fund
June 30, 2020
Board of Trustees’ Contract Approval — continued
• | The Code of Ethics of the adviser and its affiliates and the sub-adviser of each fund, together with information relating to compliance with, and the administration of, such codes; |
• | Policies and procedures relating to proxy voting and the handling of corporate actions and class actions; |
• | Information concerning the resources devoted to compliance efforts undertaken by the adviser and its affiliates and the sub-adviser of each fund, if any, including descriptions of their various compliance programs and their record of compliance; |
• | Information concerning the business continuity and disaster recovery plans of the adviser and its affiliates and the sub-adviser of each fund, if any; |
• | A description of Eaton Vance Management’s and Boston Management and Research’s oversight of sub-advisers, including with respect to regulatory and compliance issues, investment management and other matters; |
Other Relevant Information
• | Information concerning the nature, cost and character of the administrative and other non-investment advisory services provided by Eaton Vance Management and its affiliates; |
• | Information concerning oversight of the relationship with the custodian, subcustodians and fund accountants by the adviser and/or administrator to each of the funds; |
• | For an Eaton Vance Fund structured as an exchange-listed closed-end fund, information concerning the benefits of the closed-end fund structure, as well as, where relevant, the closed-end fund’s market prices, trading volume data, distribution rates and other relevant matters; and |
• | The terms of each investment advisory agreement and sub-advisory agreement. |
During the various meetings of the Board and its committees throughout the twelve months ended April 2020, the Trustees received information from portfolio managers and other investment professionals of the advisers and sub-advisers of the funds regarding investment and performance matters, and considered various investment and trading strategies used in pursuing the funds’ investment objectives. The Trustees also received information regarding risk management techniques employed in connection with the management of the funds. The Board and its committees evaluated issues pertaining to industry and regulatory developments, compliance procedures, fund governance and other issues with respect to the funds, and received and participated in reports and presentations provided by Eaton Vance Management, Boston Management and Research and fund sub-advisers, with respect to such matters. In addition to the formal meetings of the Board and its committees, the Independent Trustees held regular teleconferences to discuss, among other topics, matters relating to the continuation of investment advisory agreements and sub-advisory agreements.
The Contract Review Committee was advised throughout the contract review process by Goodwin Procter LLP, independent legal counsel for the Independent Trustees. The members of the Contract Review Committee, with the advice of such counsel, exercised their own business judgment in determining the material factors to be considered in evaluating each investment advisory agreement and sub-advisory agreement and the weight to be given to each such factor. The conclusions reached with respect to each investment advisory agreement and sub-advisory agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each member of the Contract Review Committee may have placed varying emphasis on particular factors in reaching conclusions with respect to each investment advisory agreement and sub-advisory agreement. In evaluating each investment advisory agreement and sub-advisory agreement, including the fee structures and other terms contained in such agreements, the members of the Contract Review Committee were also informed by multiple years of analysis and discussion with the adviser and sub-adviser to each of the Eaton Vance Funds.
In voting its approval of the continuation of existing investment advisory agreements and sub-advisory agreements at the April 2020 Meeting, the Board relied on an order issued by the Securities and Exchange Commission on March 25, 2020, which provided temporary relief from the in-person voting requirements under Section 15 of the 1940 Act in response to the impacts of the COVID-19 pandemic.
Results of the Contract Review Process
Based on its consideration of the foregoing, and such other information it deemed relevant, including the factors and conclusions described below, the Contract Review Committee concluded that the continuation of the investment advisory agreement between Eaton Vance Real Estate Fund (the “Fund”) and Eaton Vance Management (the “Adviser”), including its fee structure, is in the interests of shareholders and, therefore, recommended to the Board approval of the agreement. Based on the recommendation of the Contract Review Committee, the Board, including a majority of the Independent Trustees, voted to approve continuation of the investment advisory agreement for the Fund.
Nature, Extent and Quality of Services
In considering whether to approve the investment advisory agreement for the Fund, the Board evaluated the nature, extent and quality of services provided to the Fund by the Adviser.
The Board considered the Adviser’s management capabilities and investment processes in light of the types of investments held by the Fund, including the education, experience and number of investment professionals and other personnel who provide portfolio management, investment research, and similar services to the Fund. The Board specifically noted that the Adviser has devoted extensive resources to in-house equity research and also draws upon independent research available from third-party sources. The Board also took into account the resources dedicated to portfolio management and other
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Eaton Vance
Real Estate Fund
June 30, 2020
Board of Trustees’ Contract Approval — continued
services, the compensation methods of the Adviser and other factors, including the reputation and resources of the Adviser to recruit and retain highly qualified research, advisory and supervisory investment professionals. In addition, the Board considered the time and attention devoted to the Eaton Vance Funds, including the Fund, by senior management, as well as the infrastructure, operational capabilities and support staff in place to assist in the portfolio management and operations of the Fund, including the provision of administrative services. The Board also considered the business-related and other risks to which the Adviser or its affiliates may be subject in managing the Fund.
The Board considered the compliance programs of the Adviser and relevant affiliates thereof. The Board considered compliance and reporting matters regarding, among other things, personal trading by investment professionals, disclosure of portfolio holdings, late trading, frequent trading, portfolio valuation, business continuity and the allocation of investment opportunities. The Board also considered the responses of the Adviser and its affiliates to requests in recent years from regulatory authorities, such as the Securities and Exchange Commission and the Financial Industry Regulatory Authority.
The Board considered other administrative services provided or overseen by Eaton Vance Management and its affiliates, including transfer agency and accounting services. The Board evaluated the benefits to shareholders of investing in a fund that is a part of a large fund complex offering exposure to a variety of asset classes and investment disciplines, as well as the ability, in many cases, to exchange an investment among different funds without incurring additional sales charges.
After consideration of the foregoing factors, among others, the Board concluded that the nature, extent and quality of services provided by the Adviser, taken as a whole, are appropriate and consistent with the terms of the investment advisory agreement.
Fund Performance
The Board compared the Fund’s investment performance to that of comparable funds identified by an independent data provider (the peer group), as well as appropriate benchmark indices. The Board’s review included comparative performance data with respect to the Fund for the one-, three-, five- and ten-year periods ended September 30, 2019. In this regard, the Board noted that the performance of the Fund was consistent with than the median performance of the Fund’s peer group for the three-year period. The Board also noted that the performance of the Fund was higher than its primary benchmark index and lower than its secondary benchmark index for the three-year period. The Board concluded that the performance of the Fund was satisfactory.
Management Fees and Expenses
The Board considered contractual fee rates payable by the Fund for advisory and administrative services (referred to collectively as “management fees”). As part of its review, the Board considered the Fund’s management fees and total expense ratio for the one-year period ended September 30, 2019, as compared to those of comparable funds, before and after giving effect to any undertaking to waive fees or reimburse expenses. The Board also considered factors that had an impact on the Fund’s total expense ratio relative to comparable funds.
After considering the foregoing information, and in light of the nature, extent and quality of the services provided by the Adviser, the Board concluded that the management fees charged for advisory and related services are reasonable.
Profitability and “Fall-Out” Benefits
The Board considered the level of profits realized by the Adviser and relevant affiliates thereof in providing investment advisory and administrative services to the Fund and to all Eaton Vance Funds as a group. The Board considered the level of profits realized without regard to marketing support or other payments by the Adviser and its affiliates to third parties in respect of distribution or other services.
The Board concluded that, in light of the foregoing factors and the nature, extent and quality of the services rendered, the profits realized by the Adviser and its affiliates are deemed not to be excessive.
The Board also considered direct or indirect fall-out benefits received by the Adviser and its affiliates in connection with their respective relationships with the Fund, including the benefits of research services that may be available to the Adviser as a result of securities transactions effected for the Fund and other investment advisory clients.
Economies of Scale
In reviewing management fees and profitability, the Board also considered the extent to which the Adviser and its affiliates, on the one hand, and the Fund, on the other hand, can expect to realize benefits from economies of scale as the assets of the Fund increase. The Board acknowledged the difficulty in accurately measuring the benefits resulting from economies of scale, if any, with respect to the management of any specific fund or group of funds. The Board reviewed data summarizing the increases and decreases in the assets of the Fund and of all Eaton Vance Funds as a group over various time periods, and evaluated the extent to which the total expense ratio of the Fund and the profitability of the Adviser and its affiliates may have been affected by such increases or decreases. Based upon the foregoing, the Board concluded that the Fund currently shares in the benefits from economies of scale, if any, when they are realized by the Adviser. The Board did not find that, in light of the level of the Adviser’s 2019 profits with respect to the Fund, the implementation of breakpoints in the advisory fee schedule is warranted at this time
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Eaton Vance
Real Estate Fund
June 30, 2020
Liquidity Risk Management Program
The Fund has implemented a written liquidity risk management program (Program) and related procedures to manage its liquidity in accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (Liquidity Rule). The Liquidity Rule defines “liquidity risk” as the risk that a fund could not meet requests to redeem shares issued by the fund without significant dilution of the remaining investors’ interests in the fund. The Fund’s Board of Trustees/Directors has designated the investment adviser to serve as the administrator of the Program and the related procedures. The administrator has established a Liquidity Risk Management Oversight Committee (Committee) to perform the functions necessary to administer the Program. As part of the Program, the administrator is responsible for identifying illiquid investments and categorizing the relative liquidity of the Fund’s investments in accordance with the Liquidity Rule. Under the Program, the administrator assesses, manages, and periodically reviews the Fund’s liquidity risk, and is responsible for making certain reports to the Fund’s Board of Trustees/Directors and the Securities and Exchange Commission (SEC) regarding the liquidity of the Fund’s investments, and to notify the Board of Trustees/Directors and the SEC of certain liquidity events specified in the Liquidity Rule. The liquidity of the Fund’s portfolio investments is determined based on a number of factors including, but not limited to, relevant market, trading and investment-specific considerations under the Program.
At a meeting of the Fund’s Board of Trustees/Directors, the Committee provided a written report to the Fund’s Board of Trustees/Directors pertaining to the operation, adequacy, and effectiveness of implementation of the Program, as well as the operation of the highly liquid investment minimum (if applicable) for the period December 1, 2018 through December 31, 2019 (Review Period). The Program operated effectively during the Review Period, supporting the administrator’s ability to assess, manage and monitor Fund liquidity risk, including during periods of market volatility and net redemptions. During the Review Period, the Fund met redemption requests on a timely basis.
There can be no assurance that the Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
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Eaton Vance
Real Estate Fund
June 30, 2020
Officers
Payson F. Swaffield
President
Maureen A. Gemma
Vice President, Secretary and Chief Legal Officer
James F. Kirchner
Treasurer
Richard F. Froio
Chief Compliance Officer
Trustees
William H. Park
Chairperson
Thomas E. Faust Jr.*
Mark R. Fetting
Cynthia E. Frost
George J. Gorman
Valerie A. Mosley
Helen Frame Peters
Keith Quinton
Marcus L. Smith
Susan J. Sutherland
Scott E. Wennerholm
* | Interested Trustee |
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Eaton Vance Funds
Privacy. The Eaton Vance organization is committed to ensuring your financial privacy. Each entity listed below has adopted a privacy policy and procedures (“Privacy Program”) Eaton Vance believes is reasonably designed to protect your personal information and to govern when and with whom Eaton Vance may share your personal information.
• | At the time of opening an account, Eaton Vance generally requires you to provide us with certain information such as name, address, social security number, tax status, account numbers, and account balances. This information is necessary for us to both open an account for you and to allow us to satisfy legal requirements such as applicable anti-money laundering reviews and know-your-customer requirements. |
• | On an ongoing basis, in the normal course of servicing your account, Eaton Vance may share your information with unaffiliated third parties that perform various services for Eaton Vance and/or your account. These third parties include transfer agents, custodians, broker/dealers and our professional advisers, including auditors, accountants, and legal counsel. Eaton Vance may additionally share your personal information with our affiliates. |
• | We believe our Privacy Program is reasonably designed to protect the confidentiality of your personal information and to prevent unauthorized access to that information. |
• | We reserve the right to change our Privacy Program at any time upon proper notification to you. You may want to review our Privacy Program periodically for changes by accessing the link on our homepage: www.eatonvance.com. |
Our pledge of protecting your personal information applies to the following entities within the Eaton Vance organization: the Eaton Vance Family of Funds, Eaton Vance Management, Eaton Vance Investment Counsel, Eaton Vance Distributors, Inc., Eaton Vance Trust Company, Eaton Vance Management (International) Limited, Eaton Vance Advisers International Limited, Eaton Vance Global Advisors Limited, Eaton Vance Management’s Real Estate Investment Group, Boston Management and Research, Calvert Research and Management, and Calvert Funds. This Privacy Notice supersedes all previously issued privacy disclosures. For more information about our Privacy Program or about how your personal information may be used, please call 1-800-262-1122.
Delivery of Shareholder Documents. The Securities and Exchange Commission (SEC) permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called “householding” and it helps eliminate duplicate mailings to shareholders. Eaton Vance, or your financial intermediary, may household the mailing of your documents indefinitely unless you instruct Eaton Vance, or your financial intermediary, 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 intermediary. Your instructions that householding not apply to delivery of your Eaton Vance documents will typically be effective within 30 days of receipt by Eaton Vance or your financial intermediary.
Portfolio Holdings. Each Eaton Vance Fund and its underlying Portfolio(s) (if applicable) files a schedule of portfolio holdings on Part F to Form N-PORT with the SEC. Certain information filed on Form N-PORT may be viewed on the Eaton Vance website at www.eatonvance.com, by calling Eaton Vance at 1-800-262-1122 or in the EDGAR database on the SEC’s website at www.sec.gov.
Proxy Voting. From time to time, funds are required to vote proxies related to the securities held by the funds. The Eaton Vance Funds or their underlying Portfolios (if applicable) vote proxies according to a set of policies and procedures approved by the Funds’ and Portfolios’ Boards. You may obtain a description of these policies and procedures and information on how the Funds or Portfolios voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge, upon request, by calling 1-800-262-1122 and by accessing the SEC’s website at www.sec.gov.
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Investment Adviser and Administrator
Eaton Vance Management
Two International Place
Boston, MA 02110
Principal Underwriter*
Eaton Vance Distributors, Inc.
Two International Place
Boston, MA 02110
(617) 482-8260
Custodian
State Street Bank and Trust Company
State Street Financial Center, One Lincoln Street
Boston, MA 02111
Transfer Agent
BNY Mellon Investment Servicing (US) Inc.
Attn: Eaton Vance Funds
P.O. Box 9653
Providence, RI 02940-9653
(800) 262-1122
Fund Offices
Two International Place
Boston, MA 02110
* | FINRA BrokerCheck. Investors may check the background of their Investment Professional by contacting the Financial Industry Regulatory Authority (FINRA). FINRA BrokerCheck is a free tool to help investors check the professional background of current and former FINRA-registered securities firms and brokers. FINRA BrokerCheck is available by calling 1-800-289-9999 and at www.FINRA.org. The FINRA BrokerCheck brochure describing this program is available to investors at www.FINRA.org. |
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7749 6.30.20
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Eaton Vance
Small-Cap Fund
Semiannual Report
June 30, 2020
Important Note. Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semi-annual shareholder reports will no longer be sent by mail unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (eatonvance.com/funddocuments), and you will be notified by mail each time a report is posted and provided with a website address to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you are a direct investor, you may elect to receive shareholder reports and other communications from the Fund electronically by signing up for e-Delivery at eatonvance.com/edelivery. If you own your shares through a financial intermediary (such as a broker-dealer or bank), you must contact your financial intermediary to sign up.
You may elect to receive all future Fund shareholder reports in paper free of charge. If you are a direct investor, you can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by calling 1-800-262-1122. If you own these shares through a financial intermediary, you must contact your financial intermediary or follow instructions included with this disclosure, if applicable, to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all Eaton Vance funds held directly or to all funds held through your financial intermediary, as applicable.
Table of Contents
Commodity Futures Trading Commission Registration. Effective December 31, 2012, the Commodity Futures Trading Commission (“CFTC”) adopted certain regulatory changes that subject registered investment companies and advisers to regulation by the CFTC if a fund invests more than a prescribed level of its assets in certain CFTC-regulated instruments (including futures, certain options and swap agreements) or markets itself as providing investment exposure to such instruments. The investment adviser has claimed an exclusion from the definition of “commodity pool operator” under the Commodity Exchange Act with respect to its management of the Fund. Accordingly, neither the Fund nor the adviser with respect to the operation of the Fund is subject to CFTC regulation. Because of its management of other strategies, the Fund’s adviser is registered with the CFTC as a commodity pool operator. The adviser is also registered as a commodity trading advisor.
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.
This report must be preceded or accompanied by a current summary prospectus or prospectus. Before investing, investors should consider carefully the investment objective, risks, and charges and expenses of a mutual fund. This and other important information is contained in the summary prospectus and prospectus, which can be obtained from a financial intermediary. Prospective investors should read the prospectus carefully before investing. For further information, please call 1-800-262-1122.
Table of Contents
Semiannual Report June 30, 2020
Eaton Vance
Small-Cap Fund
Table of Contents
Performance | 2 | |||
Fund Profile | 2 | |||
Endnotes and Additional Disclosures | 3 | |||
Fund Expenses | 4 | |||
Financial Statements | 5 | |||
Board of Trustees’ Contract Approval | 20 | |||
Liquidity Risk Management Program | 24 | |||
Officers and Trustees | 25 | |||
Important Notices | 26 |
Table of Contents
Eaton Vance
Small-Cap Fund
June 30, 2020
Performance1,2
Portfolio Managers Michael D. McLean, CFA and J. Griffith Noble, CFA
% Average Annual Total Returns | Class Inception Date | Performance Inception Date | Six Months | One Year | Five Years | Ten Years | ||||||||||||||||||
Class A at NAV | 01/02/1997 | 01/02/1997 | –11.75 | % | –8.48 | % | 5.55 | % | 10.36 | % | ||||||||||||||
Class A with 5.75% Maximum Sales Charge | — | — | –16.80 | –13.72 | 4.30 | 9.71 | ||||||||||||||||||
Class C at NAV | 05/03/2002 | 01/02/1997 | –12.13 | –9.25 | 4.75 | 9.52 | ||||||||||||||||||
Class C with 1% Maximum Sales Charge | — | — | –13.01 | –10.08 | 4.75 | 9.52 | ||||||||||||||||||
Class I at NAV | 09/02/2008 | 01/02/1997 | –11.67 | –8.26 | 5.81 | 10.62 | ||||||||||||||||||
Class R at NAV | 08/03/2009 | 01/02/1997 | –11.88 | –8.73 | 5.28 | 10.08 | ||||||||||||||||||
Russell 2000® Index | — | — | –12.98 | % | –6.63 | % | 4.28 | % | 10.49 | % | ||||||||||||||
% Total Annual Operating Expense Ratios3 | Class A | Class C | Class I | Class R | ||||||||||||||||||||
Gross | 1.50 | % | 2.25 | % | 1.25 | % | 1.75 | % | ||||||||||||||||
Net | 1.21 | 1.96 | 0.96 | 1.46 |
Fund Profile
Sector Allocation (% of net assets)4
Top 10 Holdings (% of net assets)4
Valvoline, Inc. | 2.8 | % | ||
RealPage, Inc. | 2.8 | |||
ACI Worldwide, Inc. | 2.7 | |||
NIC, Inc. | 2.2 | |||
ServiceMaster Global Holdings, Inc. | 2.2 | |||
Mueller Water Products, Inc., Class A | 2.1 | |||
LHC Group, Inc. | 2.1 | |||
Altair Engineering, Inc., Class A | 2.1 | |||
Nomad Foods, Ltd. | 2.1 | |||
Hexcel Corp. | 2.0 | |||
Total | 23.1 | % |
See Endnotes and Additional Disclosures in this report.
Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or offering price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance for periods less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to eatonvance.com.
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Eaton Vance
Small-Cap Fund
June 30, 2020
Endnotes and Additional Disclosures
1 | Russell 2000® Index is an unmanaged index of 2,000 U.S. small-cap stocks. Unless otherwise stated, index returns do not reflect the effect of any applicable sales charges, commissions, expenses, taxes or leverage, as applicable. It is not possible to invest directly in an index. |
2 | Total Returns at NAV do not include applicable sales charges. If sales charges were deducted, the returns would be lower. Total Returns shown with maximum sales charge reflect the stated maximum sales charge. Unless otherwise stated, performance does not reflect the deduction of taxes on Fund distributions or redemptions of Fund shares. |
3 | Source: Fund prospectus. Net expense ratios reflect a contractual expense reimbursement that continues through 4/30/21. Without the reimbursement, performance would have been lower. The expense ratios for the current reporting period can be found in the Financial Highlights section of this report. |
4 | Excludes cash and cash equivalents. |
Fund profile subject to change due to active management. |
3 |
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Eaton Vance
Small-Cap Fund
June 30, 2020
Fund Expenses
Example: As a Fund shareholder, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases and redemption fees (if applicable); and (2) ongoing costs, including management fees; distribution and/or service fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of Fund investing and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2020 – June 30, 2020).
Actual Expenses: The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes: The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the actual Fund expense ratio and an assumed rate of return of 5% per year (before expenses), which is not the actual Fund return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption fees (if applicable). Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would be higher.
Beginning Account Value (1/1/20) | Ending Account Value (6/30/20) | Expenses Paid During Period* (1/1/20 – 6/30/20) | Annualized Expense Ratio | |||||||||||||
Actual | ||||||||||||||||
Class A | $ | 1,000.00 | $ | 882.50 | $ | 5.66 | ** | 1.21 | % | |||||||
Class C | $ | 1,000.00 | $ | 878.70 | $ | 9.16 | ** | 1.96 | % | |||||||
Class I | $ | 1,000.00 | $ | 883.30 | $ | 4.50 | ** | 0.96 | % | |||||||
Class R | $ | 1,000.00 | $ | 881.20 | $ | 6.83 | ** | 1.46 | % | |||||||
Hypothetical | ||||||||||||||||
(5% return per year before expenses) | ||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,018.80 | $ | 6.07 | ** | 1.21 | % | |||||||
Class C | $ | 1,000.00 | $ | 1,015.10 | $ | 9.82 | ** | 1.96 | % | |||||||
Class I | $ | 1,000.00 | $ | 1,020.10 | $ | 4.82 | ** | 0.96 | % | |||||||
Class R | $ | 1,000.00 | $ | 1,017.60 | $ | 7.32 | ** | 1.46 | % |
* | Expenses are equal to the Fund’s annualized expense ratio for the indicated Class, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). The Example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on December 31, 2019. |
** | Absent an allocation of certain expenses to an affiliate, expenses would be higher. |
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Table of Contents
Eaton Vance
Small-Cap Fund
June 30, 2020
Portfolio of Investments (Unaudited)
Common Stocks — 98.9% |
| |||||||
Security | Shares | Value | ||||||
Aerospace & Defense — 4.0% | ||||||||
Hexcel Corp. | 35,956 | $ | 1,625,930 | |||||
Mercury Systems, Inc.(1) | 19,504 | 1,534,185 | ||||||
$ | 3,160,115 | |||||||
Auto Components — 2.6% | ||||||||
Dana, Inc. | 45,782 | $ | 558,083 | |||||
Dorman Products, Inc.(1) | 13,008 | 872,447 | ||||||
Visteon Corp.(1) | 9,099 | 623,281 | ||||||
$ | 2,053,811 | |||||||
Banks — 6.6% | ||||||||
City Holding Co. | 6,267 | $ | 408,420 | |||||
Commerce Bancshares, Inc. | 6,133 | 364,730 | ||||||
Community Bank System, Inc. | 14,574 | 831,010 | ||||||
First Citizens BancShares, Inc., Class A | 2,469 | 999,994 | ||||||
Glacier Bancorp, Inc. | 15,201 | 536,443 | ||||||
Independent Bank Corp. | 6,159 | 413,207 | ||||||
Stock Yards Bancorp, Inc. | 27,487 | 1,104,978 | ||||||
Westamerica BanCorp. | 10,326 | 592,919 | ||||||
$ | 5,251,701 | |||||||
Biotechnology — 2.8% | ||||||||
Emergent BioSolutions, Inc.(1) | 14,889 | $ | 1,177,422 | |||||
Ligand Pharmaceuticals, Inc.(1) | 9,269 | 1,036,738 | ||||||
$ | 2,214,160 | |||||||
Building Products — 2.7% | ||||||||
AZEK Co., Inc. (The) | 19,572 | $ | 623,564 | |||||
CSW Industrials, Inc. | 8,663 | 598,700 | ||||||
Trex Co., Inc.(1) | 7,300 | 949,511 | ||||||
$ | 2,171,775 | |||||||
Capital Markets — 0.6% | ||||||||
Cohen & Steers, Inc. | 6,970 | $ | 474,309 | |||||
$ | 474,309 | |||||||
Chemicals — 6.2% | ||||||||
Balchem Corp. | 13,749 | $ | 1,304,230 | |||||
NewMarket Corp. | 3,442 | 1,378,452 | ||||||
Valvoline, Inc. | 115,474 | 2,232,113 | ||||||
$ | 4,914,795 |
Security | Shares | Value | ||||||
Commercial Services & Supplies — 1.0% | ||||||||
Herman Miller, Inc. | 15,658 | $ | 369,685 | |||||
Kimball International, Inc., Class B | 18,710 | 216,288 | ||||||
UniFirst Corp. | 1,185 | 212,056 | ||||||
$ | 798,029 | |||||||
Diversified Consumer Services — 2.8% | ||||||||
K12, Inc.(1) | 18,893 | $ | 514,645 | |||||
ServiceMaster Global Holdings, Inc.(1) | 48,306 | 1,724,041 | ||||||
$ | 2,238,686 | |||||||
Electric Utilities — 1.2% | ||||||||
ALLETE, Inc. | 17,107 | $ | 934,213 | |||||
$ | 934,213 | |||||||
Equity Real Estate Investment Trusts (REITs) — 7.5% | ||||||||
CubeSmart | 48,131 | $ | 1,299,056 | |||||
EastGroup Properties, Inc. | 10,977 | 1,301,982 | ||||||
Healthcare Realty Trust, Inc. | 45,160 | 1,322,736 | ||||||
Rexford Industrial Realty, Inc. | 28,241 | 1,170,025 | ||||||
STORE Capital Corp. | 36,082 | 859,112 | ||||||
$ | 5,952,911 | |||||||
Food & Staples Retailing — 0.6% | ||||||||
Performance Food Group Co.(1) | 15,420 | $ | 449,339 | |||||
$ | 449,339 | |||||||
Food Products — 3.5% | ||||||||
Flowers Foods, Inc. | 33,429 | $ | 747,472 | |||||
Lancaster Colony Corp. | 2,779 | 430,717 | ||||||
Nomad Foods, Ltd.(1) | 76,219 | 1,634,898 | ||||||
$ | 2,813,087 | |||||||
Gas Utilities — 2.0% | ||||||||
ONE Gas, Inc. | 20,414 | $ | 1,572,899 | |||||
$ | 1,572,899 | |||||||
Health Care Equipment & Supplies — 6.6% | ||||||||
Envista Holdings Corp.(1) | 27,236 | $ | 574,407 | |||||
Haemonetics Corp.(1) | 17,416 | 1,559,777 | ||||||
ICU Medical, Inc.(1) | 8,619 | 1,588,568 | ||||||
Integra LifeSciences Holdings Corp.(1) | 24,089 | 1,131,942 | ||||||
Tandem Diabetes Care, Inc.(1) | 4,246 | 420,015 | ||||||
$ | 5,274,709 |
5 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Small-Cap Fund
June 30, 2020
Portfolio of Investments (Unaudited) — continued
Security | Shares | Value | ||||||
Health Care Providers & Services — 7.8% | ||||||||
Addus HomeCare Corp.(1) | 13,340 | $ | 1,234,750 | |||||
Amedisys, Inc.(1) | 3,401 | 675,235 | ||||||
Chemed Corp. | 3,302 | 1,489,433 | ||||||
LHC Group, Inc.(1) | 9,530 | 1,661,270 | ||||||
R1 RCM, Inc.(1) | 101,476 | 1,131,457 | ||||||
$ | 6,192,145 | |||||||
Health Care Technology — 0.5% | ||||||||
Phreesia, Inc.(1) | 13,755 | $ | 388,991 | |||||
$ | 388,991 | |||||||
Hotels, Restaurants & Leisure — 0.4% | ||||||||
Choice Hotels International, Inc. | 4,325 | $ | 341,243 | |||||
$ | 341,243 | |||||||
Insurance — 6.2% | ||||||||
AMERISAFE, Inc. | 13,156 | $ | 804,621 | |||||
First American Financial Corp. | 12,472 | 598,906 | ||||||
Horace Mann Educators Corp. | 33,436 | 1,228,104 | ||||||
RLI Corp. | 10,150 | 833,315 | ||||||
Selective Insurance Group, Inc. | 28,103 | 1,482,152 | ||||||
$ | 4,947,098 | |||||||
IT Services — 2.6% | ||||||||
Euronet Worldwide, Inc.(1) | 3,245 | $ | 310,936 | |||||
NIC, Inc. | 75,548 | 1,734,582 | ||||||
$ | 2,045,518 | |||||||
Leisure Products — 1.4% | ||||||||
Brunswick Corp. | 11,405 | $ | 730,034 | |||||
Polaris, Inc. | 3,879 | 359,001 | ||||||
$ | 1,089,035 | |||||||
Machinery — 5.8% | ||||||||
Middleby Corp. (The)(1) | 9,325 | $ | 736,115 | |||||
Mueller Water Products, Inc., Class A | 178,651 | 1,684,679 | ||||||
RBC Bearings, Inc.(1) | 4,514 | 605,057 | ||||||
Welbilt, Inc.(1) | 41,795 | 254,531 | ||||||
Woodward, Inc. | 17,049 | 1,322,150 | ||||||
$ | 4,602,532 | |||||||
Marine — 1.2% | ||||||||
Kirby Corp.(1) | 18,587 | $ | 995,520 | |||||
$ | 995,520 |
Security | Shares | Value | ||||||
Oil, Gas & Consumable Fuels — 0.7% | ||||||||
Parsley Energy, Inc. | 35,505 | $ | 379,193 | |||||
PDC Energy, Inc.(1) | 16,040 | 199,538 | ||||||
$ | 578,731 | |||||||
Professional Services — 1.9% | ||||||||
CBIZ, Inc.(1) | 62,126 | $ | 1,489,160 | |||||
$ | 1,489,160 | |||||||
Road & Rail — 1.7% | ||||||||
Landstar System, Inc. | 12,041 | $ | 1,352,325 | |||||
$ | 1,352,325 | |||||||
Semiconductors & Semiconductor Equipment — 1.1% | ||||||||
Silicon Laboratories, Inc.(1) | 8,881 | $ | 890,498 | |||||
$ | 890,498 | |||||||
Software — 11.0% | ||||||||
ACI Worldwide, Inc.(1) | 81,136 | $ | 2,189,860 | |||||
Altair Engineering, Inc., Class A(1) | 41,461 | 1,648,075 | ||||||
CDK Global, Inc. | 27,935 | 1,157,068 | ||||||
Envestnet, Inc.(1) | 21,790 | 1,602,436 | ||||||
RealPage, Inc.(1) | 33,878 | 2,202,409 | ||||||
$ | 8,799,848 | |||||||
Specialty Retail — 2.3% | ||||||||
Five Below, Inc.(1) | 3,252 | $ | 347,671 | |||||
Lithia Motors, Inc., Class A | 3,883 | 587,614 | ||||||
National Vision Holdings, Inc.(1) | 30,934 | 944,106 | ||||||
$ | 1,879,391 | |||||||
Textiles, Apparel & Luxury Goods — 0.7% | ||||||||
Columbia Sportswear Co. | 3,930 | $ | 316,679 | |||||
Deckers Outdoor Corp.(1) | 1,228 | 241,167 | ||||||
$ | 557,846 | |||||||
Thrifts & Mortgage Finance — 0.6% | ||||||||
Washington Federal, Inc. | 19,031 | $ | 510,792 | |||||
$ | 510,792 | |||||||
Trading Companies & Distributors — 1.2% | ||||||||
Applied Industrial Technologies, Inc. | 15,391 | $ | 960,244 | |||||
$ | 960,244 |
6 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Small-Cap Fund
June 30, 2020
Portfolio of Investments (Unaudited) — continued
Security | Shares | Value | ||||||
Water Utilities — 1.1% | ||||||||
Middlesex Water Co. | 13,282 | $ | 892,285 | |||||
$ | 892,285 | |||||||
Total Common Stocks |
| $ | 78,787,741 | |||||
Short-Term Investments — 1.3% |
| |||||||
Description | Units | Value | ||||||
Eaton Vance Cash Reserves Fund, LLC, 0.35%(2) | 1,042,572 | $ | 1,042,572 | |||||
Total Short-Term Investments |
| $ | 1,042,572 | |||||
Total Investments — 100.2% |
| $ | 79,830,313 | |||||
Other Assets, Less Liabilities — (0.2)% |
| $ | (119,962 | ) | ||||
Net Assets — 100.0% |
| $ | 79,710,351 |
The percentage shown for each investment category in the Portfolio of Investments is based on net assets.
(1) | Non-income producing security. |
(2) | Affiliated investment company, available to Eaton Vance portfolios and funds, which invests in high quality, U.S. dollar denominated money market instruments. The rate shown is the annualized seven-day yield as of June 30, 2020. |
7 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Small-Cap Fund
June 30, 2020
Statement of Assets and Liabilities (Unaudited)
Assets | June 30, 2020 | |||
Unaffiliated investments, at value (identified cost, $66,498,471) | $ | 78,787,741 | ||
Affiliated investment, at value (identified cost, $1,042,575) | 1,042,572 | |||
Dividends receivable | 68,258 | |||
Dividends receivable from affiliated investment | 201 | |||
Receivable for investments sold | 53,593 | |||
Receivable for Fund shares sold | 100,874 | |||
Receivable from affiliate | �� | 18,436 | ||
Total assets | $ | 80,071,675 | ||
Liabilities |
| |||
Payable for investments purchased | $ | 118,192 | ||
Payable for Fund shares redeemed | 137,734 | |||
Payable to affiliates: |
| |||
Investment adviser fee | 48,925 | |||
Administration fee | 9,785 | |||
Distribution and service fees | 7,389 | |||
Trustees’ fees | 1,190 | |||
Accrued expenses | 38,109 | |||
Total liabilities | $ | 361,324 | ||
Net Assets | $ | 79,710,351 | ||
Sources of Net Assets |
| |||
Paid-in capital | $ | 69,601,883 | ||
Distributable earnings | 10,108,468 | |||
Net Assets | $ | 79,710,351 | ||
Class A Shares |
| |||
Net Assets | $ | 21,364,544 | ||
Shares Outstanding | 1,836,195 | |||
Net Asset Value and Redemption Price Per Share | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 11.64 | ||
Maximum Offering Price Per Share | ||||
(100 ÷ 94.25 of net asset value per share) | $ | 12.35 | ||
Class C Shares |
| |||
Net Assets | $ | 3,368,392 | ||
Shares Outstanding | 363,213 | |||
Net Asset Value and Offering Price Per Share* | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 9.27 | ||
Class I Shares |
| |||
Net Assets | $ | 54,441,487 | ||
Shares Outstanding | 4,155,332 | |||
Net Asset Value, Offering Price and Redemption Price Per Share | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 13.10 | ||
Class R Shares |
| |||
Net Assets | $ | 535,928 | ||
Shares Outstanding | 48,490 | |||
Net Asset Value, Offering Price and Redemption Price Per Share | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 11.05 |
On sales of $50,000 or more, the offering price of Class A shares is reduced.
* | Redemption price per share is equal to the net asset value less any applicable contingent deferred sales charge. |
8 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Small-Cap Fund
June 30, 2020
Statement of Operations (Unaudited)
Investment Income | Six Months Ended June 30, 2020 | |||
Dividends | $ | 455,905 | ||
Dividends from affiliated investment | 7,426 | |||
Total investment income | $ | 463,331 | ||
Expenses | ||||
Investment adviser fee | $ | 295,216 | ||
Administration fee | 59,043 | |||
Distribution and service fees |
| |||
Class A | 27,110 | |||
Class C | 18,321 | |||
Class R | 1,334 | |||
Trustees’ fees and expenses | 2,409 | |||
Custodian fee | 16,926 | |||
Transfer and dividend disbursing agent fees | 50,154 | |||
Legal and accounting services | 22,850 | |||
Printing and postage | 11,696 | |||
Registration fees | 27,496 | |||
Miscellaneous | 7,603 | |||
Total expenses | $ | 540,158 | ||
Deduct — | ||||
Allocation of expenses to affiliate | $ | 114,410 | ||
Total expense reductions | $ | 114,410 | ||
Net expenses | $ | 425,748 | ||
Net investment income | $ | 37,583 | ||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) — |
| |||
Investment transactions | $ | (2,831,118 | ) | |
Investment transactions — affiliated investment | 747 | |||
Net realized loss | $ | (2,830,371 | ) | |
Change in unrealized appreciation (depreciation) — | ||||
Investments | $ | (6,873,736 | ) | |
Investments — affiliated investment | (100 | ) | ||
Net change in unrealized appreciation (depreciation) | $ | (6,873,836 | ) | |
Net realized and unrealized loss | $ | (9,704,207 | ) | |
Net decrease in net assets from operations | $ | (9,666,624 | ) |
9 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Small-Cap Fund
June 30, 2020
Statements of Changes in Net Assets
Increase (Decrease) in Net Assets | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
From operations — | ||||||||
Net investment income | $ | 37,583 | $ | 33,556 | ||||
Net realized gain (loss) | (2,830,371 | ) | 5,396,747 | |||||
Net change in unrealized appreciation (depreciation) | (6,873,836 | ) | 11,837,477 | |||||
Net increase (decrease) in net assets from operations | $ | (9,666,624 | ) | $ | 17,267,780 | |||
Distributions to shareholders — | ||||||||
Class A | $ | — | $ | (1,755,293 | ) | |||
Class C | — | (396,798 | ) | |||||
Class I | — | (3,423,138 | ) | |||||
Class R | — | (52,605 | ) | |||||
Total distributions to shareholders | $ | — | $ | (5,627,834 | ) | |||
Transactions in shares of beneficial interest — | ||||||||
Proceeds from sale of shares | ||||||||
Class A | $ | 2,456,899 | $ | 3,261,995 | ||||
Class C | 165,864 | 647,700 | ||||||
Class I | 19,961,736 | 23,966,549 | ||||||
Class R | 64,245 | 252,084 | ||||||
Net asset value of shares issued to shareholders in payment of distributions declared | ||||||||
Class A | — | 1,668,660 | ||||||
Class C | — | 369,254 | ||||||
Class I | — | 3,325,272 | ||||||
Class R | — | 52,605 | ||||||
Cost of shares redeemed | ||||||||
Class A | (2,785,126 | ) | (5,760,756 | ) | ||||
Class C | (608,064 | ) | (2,541,967 | ) | ||||
Class I | (16,718,002 | ) | (11,899,907 | ) | ||||
Class R | (50,710 | ) | (671,868 | ) | ||||
Net asset value of shares converted | ||||||||
Class A | 182,946 | 2,186,365 | ||||||
Class C | (182,946 | ) | (2,186,365 | ) | ||||
Net increase in net assets from Fund share transactions | $ | 2,486,842 | $ | 12,669,621 | ||||
Net increase (decrease) in net assets | $ | (7,179,782 | ) | $ | 24,309,567 | |||
Net Assets |
| |||||||
At beginning of period | $ | 86,890,133 | $ | 62,580,566 | ||||
At end of period | $ | 79,710,351 | $ | 86,890,133 |
10 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Small-Cap Fund
June 30, 2020
Financial Highlights
Class A | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 13.190 | $ | 11.100 | $ | 13.150 | $ | 12.740 | $ | 12.200 | $ | 15.320 | ||||||||||||
Income (Loss) From Operations |
| |||||||||||||||||||||||
Net investment loss(1) | $ | (0.002 | ) | $ | (0.008 | ) | $ | (0.026 | ) | $ | (0.057 | ) | $ | (0.053 | ) | $ | (0.078 | ) | ||||||
Net realized and unrealized gain (loss) | (1.548 | ) | 3.046 | (0.660 | ) | 1.916 | 2.361 | (0.205 | ) | |||||||||||||||
Total income (loss) from operations | $ | (1.550 | ) | $ | 3.038 | $ | (0.686 | ) | $ | 1.859 | $ | 2.308 | $ | (0.283 | ) | |||||||||
Less Distributions |
| |||||||||||||||||||||||
From net realized gain | $ | — | $ | (0.948 | ) | $ | (1.364 | ) | $ | (1.449 | ) | $ | (1.768 | ) | $ | (2.837 | ) | |||||||
Total distributions | $ | — | $ | (0.948 | ) | $ | (1.364 | ) | $ | (1.449 | ) | $ | (1.768 | ) | $ | (2.837 | ) | |||||||
Net asset value — End of period | $ | 11.640 | $ | 13.190 | $ | 11.100 | $ | 13.150 | $ | 12.740 | $ | 12.200 | ||||||||||||
Total Return(2) | (11.75 | )%(3)(4) | 27.54 | %(4) | (5.81 | )%(4) | 14.91 | %(4) | 19.32 | % | (2.78 | )% | ||||||||||||
Ratios/Supplemental Data |
| |||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 21,365 | $ | 24,530 | $ | 19,329 | $ | 24,865 | $ | 30,174 | $ | 26,391 | ||||||||||||
Ratios (as a percentage of average daily net assets): | ||||||||||||||||||||||||
Expenses(5) | 1.21 | %(4)(6) | 1.21 | %(4) | 1.35 | %(4) | 1.42 | %(4) | 1.52 | % | 1.43 | % | ||||||||||||
Net investment loss | (0.03 | )%(6) | (0.06 | )% | (0.19 | )% | (0.43 | )% | (0.43 | )% | (0.52 | )% | ||||||||||||
Portfolio Turnover | 43 | %(3) | 54 | % | 44 | % | 50 | % | 76 | % | 71 | % |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges. |
(3) | Not annualized. |
(4) | The administrator reimbursed certain operating expenses (equal to 0.29%, 0.29%, 0.17% and 0.10% of average daily net assets for the six months ended June 30, 2020 and the years ended December 31, 2019, 2018 and 2017, respectively). Absent this reimbursement, total return would be lower. |
(5) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(6) | Annualized. |
11 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Small-Cap Fund
June 30, 2020
Financial Highlights — continued
Class C | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 10.550 | $ | 9.100 | $ | 11.110 | $ | 11.040 | $ | 10.850 | $ | 14.040 | ||||||||||||
Income (Loss) From Operations |
| |||||||||||||||||||||||
Net investment loss(1) | $ | (0.037 | ) | $ | (0.092 | ) | $ | (0.108 | ) | $ | (0.133 | ) | $ | (0.129 | ) | $ | (0.173 | ) | ||||||
Net realized and unrealized gain (loss) | (1.243 | ) | 2.490 | (0.538 | ) | 1.652 | 2.087 | (0.180 | ) | |||||||||||||||
Total income (loss) from operations | $ | (1.280 | ) | $ | 2.398 | $ | (0.646 | ) | $ | 1.519 | $ | 1.958 | $ | (0.353 | ) | |||||||||
Less Distributions |
| |||||||||||||||||||||||
From net realized gain | $ | — | $ | (0.948 | ) | $ | (1.364 | ) | $ | (1.449 | ) | $ | (1.768 | ) | $ | (2.837 | ) | |||||||
Total distributions | $ | — | $ | (0.948 | ) | $ | (1.364 | ) | $ | (1.449 | ) | $ | (1.768 | ) | $ | (2.837 | ) | |||||||
Net asset value — End of period | $ | 9.270 | $ | 10.550 | $ | 9.100 | $ | 11.110 | $ | 11.040 | $ | 10.850 | ||||||||||||
Total Return(2) | (12.13 | )%(3)(4) | 26.54 | %(4) | (6.52 | )%(4) | 14.11 | %(4) | 18.47 | % | (3.59 | )% | ||||||||||||
Ratios/Supplemental Data |
| |||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 3,368 | $ | 4,564 | $ | 7,356 | $ | 9,565 | $ | 10,001 | $ | 9,040 | ||||||||||||
Ratios (as a percentage of average daily net assets): | ||||||||||||||||||||||||
Expenses(5) | 1.96 | %(4)(6) | 1.96 | %(4) | 2.10 | %(4) | 2.17 | %(4) | 2.27 | % | 2.18 | % | ||||||||||||
Net investment loss | (0.79 | )%(6) | (0.87 | )% | (0.94 | )% | (1.17 | )% | (1.18 | )% | (1.27 | )% | ||||||||||||
Portfolio Turnover | 43 | %(3) | 54 | % | 44 | % | 50 | % | 76 | % | 71 | % |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges. |
(3) | Not annualized. |
(4) | The administrator reimbursed certain operating expenses (equal to 0.29%, 0.29%, 0.17% and 0.10% of average daily net assets for the six months ended June 30, 2020 and the years ended December 31, 2019, 2018 and 2017, respectively). Absent this reimbursement, total return would be lower. |
(5) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(6) | Annualized. |
12 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Small-Cap Fund
June 30, 2020
Financial Highlights — continued
Class I | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 14.830 | $ | 12.360 | $ | 14.450 | $ | 13.840 | $ | 13.080 | $ | 16.190 | ||||||||||||
Income (Loss) From Operations |
| |||||||||||||||||||||||
Net investment income (loss)(1) | $ | 0.014 | $ | 0.029 | $ | 0.010 | $ | (0.022 | ) | $ | (0.027 | ) | $ | (0.043 | ) | |||||||||
Net realized and unrealized gain (loss) | (1.744 | ) | 3.389 | (0.736 | ) | 2.081 | 2.555 | (0.230 | ) | |||||||||||||||
Total income (loss) from operations | $ | (1.730 | ) | $ | 3.418 | $ | (0.726 | ) | $ | 2.059 | $ | 2.528 | $ | (0.273 | ) | |||||||||
Less Distributions |
| |||||||||||||||||||||||
From net realized gain | $ | — | $ | (0.948 | ) | $ | (1.364 | ) | $ | (1.449 | ) | $ | (1.768 | ) | $ | (2.837 | ) | |||||||
Total distributions | $ | — | $ | (0.948 | ) | $ | (1.364 | ) | $ | (1.449 | ) | $ | (1.768 | ) | $ | (2.837 | ) | |||||||
Net asset value — End of period | $ | 13.100 | $ | 14.830 | $ | 12.360 | $ | 14.450 | $ | 13.840 | $ | 13.080 | ||||||||||||
Total Return(2) | (11.67 | )%(3)(4) | 27.81 | %(4) | (5.57 | )%(4) | 15.17 | %(4) | 19.70 | % | (2.57 | )% | ||||||||||||
Ratios/Supplemental Data |
| |||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 54,441 | $ | 57,202 | $ | 35,097 | $ | 45,587 | $ | 34,888 | $ | 52,335 | ||||||||||||
Ratios (as a percentage of average daily net assets): | ||||||||||||||||||||||||
Expenses(5) | 0.96 | %(4)(6) | 0.96 | %(4) | 1.10 | %(4) | 1.16 | %(4) | 1.27 | % | 1.18 | % | ||||||||||||
Net investment income (loss) | 0.21 | %(6) | 0.20 | % | 0.07 | % | (0.15 | )% | (0.21 | )% | (0.27 | )% | ||||||||||||
Portfolio Turnover | 43 | %(3) | 54 | % | 44 | % | 50 | % | 76 | % | 71 | % |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested. |
(3) | Not annualized. |
(4) | The administrator reimbursed certain operating expenses (equal to 0.29%, 0.29%, 0.17% and 0.10% of average daily net assets for the six months ended June 30, 2020 and the years ended December 31, 2019, 2018 and 2017, respectively). Absent this reimbursement, total return would be lower. |
(5) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(6) | Annualized. |
13 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Small-Cap Fund
June 30, 2020
Financial Highlights — continued
Class R | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 12.540 | $ | 10.620 | $ | 12.670 | $ | 12.350 | $ | 11.900 | $ | 15.050 | ||||||||||||
Income (Loss) From Operations |
| |||||||||||||||||||||||
Net investment loss(1) | $ | (0.015 | ) | $ | (0.042 | ) | $ | (0.053 | ) | $ | (0.084 | ) | $ | (0.078 | ) | $ | (0.113 | ) | ||||||
Net realized and unrealized gain (loss) | (1.475 | ) | 2.910 | (0.633 | ) | 1.853 | 2.296 | (0.200 | ) | |||||||||||||||
Total income (loss) from operations | $ | (1.490 | ) | $ | 2.868 | $ | (0.686 | ) | $ | 1.769 | $ | 2.218 | $ | (0.313 | ) | |||||||||
Less Distributions |
| |||||||||||||||||||||||
From net realized gain | $ | — | $ | (0.948 | ) | $ | (1.364 | ) | $ | (1.449 | ) | $ | (1.768 | ) | $ | (2.837 | ) | |||||||
Total distributions | $ | — | $ | (0.948 | ) | $ | (1.364 | ) | $ | (1.449 | ) | $ | (1.768 | ) | $ | (2.837 | ) | |||||||
Net asset value — End of period | $ | 11.050 | $ | 12.540 | $ | 10.620 | $ | 12.670 | $ | 12.350 | $ | 11.900 | ||||||||||||
Total Return(2) | (11.88 | )%(3)(4) | 27.18 | %(4) | (6.04 | )%(4) | 14.64 | %(4) | 19.04 | % | (3.05 | )% | ||||||||||||
Ratios/Supplemental Data |
| |||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 536 | $ | 595 | $ | 799 | $ | 722 | $ | 567 | $ | 289 | ||||||||||||
Ratios (as a percentage of average daily net assets): | ||||||||||||||||||||||||
Expenses(5) | 1.46 | %(4)(6) | 1.46 | %(4) | 1.60 | %(4) | 1.66 | %(4) | 1.77 | % | 1.68 | % | ||||||||||||
Net investment loss | (0.27 | )%(6) | (0.34 | )% | (0.40 | )% | (0.66 | )% | (0.64 | )% | (0.77 | )% | ||||||||||||
Portfolio Turnover | 43 | %(3) | 54 | % | 44 | % | 50 | % | 76 | % | 71 | % |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested. |
(3) | Not annualized. |
(4) | The administrator reimbursed certain operating expenses (equal to 0.29%, 0.29%, 0.17% and 0.10% of average daily net assets for the six months ended June 30, 2020 and the years ended December 31, 2019, 2018 and 2017, respectively). Absent this reimbursement, total return would be lower. |
(5) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(6) | Annualized. |
14 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Small-Cap Fund
June 30, 2020
Notes to Financial Statements (Unaudited)
1 Significant Accounting Policies
Eaton Vance Small-Cap Fund (the Fund) is a diversified series of Eaton Vance Special Investment Trust (the Trust). The Trust is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company. The Fund’s investment objective is to seek long-term capital appreciation. The Fund offers four classes of shares. Class A shares are generally sold subject to a sales charge imposed at time of purchase. Class C shares are sold at net asset value and are generally subject to a contingent deferred sales charge (see Note 5). Effective January 25, 2019, Class C shares generally automatically convert to Class A shares ten years after their purchase as described in the Fund’s prospectus. Class I and Class R shares are sold at net asset value and are not subject to a sales charge. Each class represents a pro-rata interest in the Fund, but votes separately on class-specific matters and (as noted below) is subject to different expenses. Realized and unrealized gains and losses and net investment income and losses, other than class-specific expenses, are allocated daily to each class of shares based on the relative net assets of each class to the total net assets of the Fund. Each class of shares differs in its distribution plan and certain other class-specific expenses.
The following is a summary of significant accounting policies of the Fund. The policies are in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The Fund is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946.
A Investment Valuation — The following methodologies are used to determine the market value or fair value of investments.
Equity Securities. Equity securities listed on a U.S. securities exchange generally are valued at the last sale or closing price on the day of valuation or, if no sales took place on such date, at the mean between the closing bid and ask prices on the exchange where such securities are principally traded. Equity securities listed on the NASDAQ Global or Global Select Market generally are valued at the NASDAQ official closing price. Unlisted or listed securities for which closing sales prices or closing quotations are not available are valued at the mean between the latest available bid and ask prices.
Affiliated Fund. The Fund may invest in Eaton Vance Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by Eaton Vance Management (EVM). While Cash Reserves Fund is not a registered money market mutual fund, it conducts all of its investment activities in accordance with the requirements of Rule 2a-7 under the 1940 Act. Investments in Cash Reserves Fund are valued at the closing net asset value per unit on the valuation day. Cash Reserves Fund generally values its investment securities based on available market quotations provided by a third party pricing service.
Fair Valuation. Investments for which valuations or market quotations are not readily available or are deemed unreliable are valued at fair value using methods determined in good faith by or at the direction of the Trustees of the Fund in a manner that most fairly reflects the security’s “fair value”, which is the amount that the Fund might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of relevant factors, which are likely to vary from one pricing context to another. These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issuer or of comparable companies or entities, quotations or relevant information obtained from broker/dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the company’s or entity’s financial statements, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.
B Investment Transactions — Investment transactions for financial statement purposes are accounted for on a trade date basis. Realized gains and losses on investments sold are determined on the basis of identified cost.
C Income — Dividend income is recorded on the ex-dividend date for dividends received in cash and/or securities.
D Federal Taxes — The Fund’s policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its net investment income, and all or substantially all of its net realized capital gains. Accordingly, no provision for federal income or excise tax is necessary.
As of June 30, 2020, the Fund had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. The Fund files a U.S. federal income tax return annually after its fiscal year-end, which is subject to examination by the Internal Revenue Service for a period of three years from the date of filing.
E Expenses — The majority of expenses of the Trust are directly identifiable to an individual fund. Expenses which are not readily identifiable to a specific fund are allocated taking into consideration, among other things, the nature and type of expense and the relative size of the funds.
F Use of Estimates — The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.
G Indemnifications — Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund. Under Massachusetts law, if certain conditions prevail, shareholders of a Massachusetts business trust (such as the Trust) could be deemed to have personal liability for the obligations of the Trust. However, the Trust’s Declaration of Trust contains an express disclaimer of liability on the part of Fund shareholders and the By-laws provide that the Trust shall assume, upon request by the shareholder, the defense on behalf of any Fund shareholders. Moreover, the By-laws also provide for indemnification out of Fund property of any shareholder held personally
15 |
Table of Contents
Eaton Vance
Small-Cap Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
liable solely by reason of being or having been a shareholder for all loss or expense arising from such liability. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.
H Interim Financial Statements — The interim financial statements relating to June 30, 2020 and for the six months then ended have not been audited by an independent registered public accounting firm, but in the opinion of the Fund’s management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial statements.
2 Distributions to Shareholders and Income Tax Information
It is the present policy of the Fund to make at least one distribution annually (normally in December) of all or substantially all of its net investment income and to distribute annually all or substantially all of its net realized capital gains. Distributions to shareholders are recorded on the ex-dividend date. Distributions are declared separately for each class of shares. Shareholders may reinvest income and capital gain distributions in additional shares of the same class of the Fund at the net asset value as of the ex-dividend date or, at the election of the shareholder, receive distributions in cash. Distributions to shareholders are determined in accordance with income tax regulations, which may differ from U.S. GAAP. As required by U.S. GAAP, only distributions in excess of tax basis earnings and profits are 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. For tax purposes, distributions from short-term capital gains are considered to be from ordinary income.
The cost and unrealized appreciation (depreciation) of investments of the Fund at June 30, 2020, as determined on a federal income tax basis, were as follows:
Aggregate cost | $ | 67,744,153 | ||
Gross unrealized appreciation | $ | 14,197,290 | ||
Gross unrealized depreciation | (2,111,130 | ) | ||
Net unrealized appreciation | $ | 12,086,160 |
3 Investment Adviser Fee and Other Transactions with Affiliates
The investment adviser fee is earned by Boston Management and Research (BMR), a subsidiary of EVM, as compensation for investment advisory services rendered to the Fund. The fee is computed at an annual rate of 0.75% of the Fund’s average daily net assets up to $500 million and is payable monthly. On net assets of $500 million and over, the annual fee is reduced. For the six months ended June 30, 2020, the Fund’s investment adviser fee amounted to $295,216 or 0.75% (annualized) of the Fund’s average daily net assets. The Fund invests its cash in Cash Reserves Fund. EVM does not currently receive a fee for advisory services provided to Cash Reserves Fund. The administration fee is earned by EVM for administering the business affairs of the Fund and is computed at an annual rate of 0.15% of the Fund’s average daily net assets. For the six months ended June 30, 2020, the administration fee amounted to $59,043.
EVM has agreed to reimburse the Fund’s expenses to the extent that total annual operating expenses (relating to ordinary operating expenses only) exceed 1.21%, 1.96%, 0.96% and 1.46% of the Fund’s average daily net assets for Class A, Class C, Class I and Class R, respectively. This agreement may be changed or terminated after April 30, 2021. Pursuant to this agreement, EVM was allocated $114,410 of the Fund’s operating expenses for the six months ended June 30, 2020.
EVM provides sub-transfer agency and related services to the Fund pursuant to a Sub-Transfer Agency Support Services Agreement. For the six months ended June 30, 2020, EVM earned $6,868 from the Fund pursuant to such agreement, which is included in transfer and dividend disbursing agent fees on the Statement of Operations. The Fund was informed that Eaton Vance Distributors, Inc. (EVD), an affiliate of EVM and the Fund’s principal underwriter, received $1,280 as its portion of the sales charge on sales of Class A shares for the six months ended June 30, 2020. EVD also received distribution and service fees from Class A, Class C and Class R shares (see Note 4).
Trustees and officers of the Fund who are members of EVM’s or BMR’s organizations receive remuneration for their services to the Fund out of the investment adviser fee. Trustees of the Fund who are not affiliated with the investment adviser may elect to defer receipt of all or a percentage of their annual fees in accordance with the terms of the Trustees Deferred Compensation Plan. For the six months ended June 30, 2020, no significant amounts have been deferred. Certain officers and Trustees of the Fund are officers of the above organizations.
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Table of Contents
Eaton Vance
Small-Cap Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
4 Distribution Plans
The Fund has in effect a distribution plan for Class A shares (Class A Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class A Plan, the Fund pays EVD a distribution and service fee of 0.25% per annum of its average daily net assets attributable to Class A shares for distribution services and facilities provided to the Fund by EVD, as well as for personal services and/or the maintenance of shareholder accounts. Distribution and service fees paid or accrued to EVD for the six months ended June 30, 2020 amounted to $27,110 for Class A shares.
The Fund also has in effect distribution plans for Class C shares (Class C Plan) and Class R shares (Class R Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class C Plan, the Fund pays EVD amounts equal to 0.75% per annum of its average daily net assets attributable to Class C shares for providing ongoing distribution services and facilities to the Fund. For the six months ended June 30, 2020, the Fund paid or accrued to EVD $13,741 for Class C shares.
The Class R Plan requires the Fund to pay EVD an amount up to 0.50% per annum of its average daily net assets attributable to Class R shares for providing ongoing distribution services and facilities to the Fund. The Trustees of the Trust have currently limited Class R distribution payments to 0.25% per annum of the average daily net assets attributable to Class R shares. For the six months ended June 30, 2020, the Fund paid or accrued to EVD $667 for Class R shares.
Pursuant to the Class C and Class R Plans, the Fund also makes payments of service fees to EVD, financial intermediaries and other persons in amounts equal to 0.25% per annum of its average daily net assets attributable to that class. Service fees paid or accrued are for personal services and/or the maintenance of shareholder accounts. They are separate and distinct from the sales commissions and distribution fees payable to EVD. Service fees paid or accrued for the six months ended June 30, 2020 amounted to $4,580 and $667 for Class C and Class R shares, respectively.
Distribution and service fees are subject to the limitations contained in the Financial Industry Regulatory Authority Rule 2341(d).
5 Contingent Deferred Sales Charges
A contingent deferred sales charge (CDSC) of 1% generally is imposed on redemptions of Class C shares made within 12 months of purchase. Class A shares may be subject to 1% CDSC if redeemed within 18 months of purchase (depending on the circumstances of purchase). Generally, the CDSC is based upon the lower of the net asset value at date of redemption or date of purchase. No charge is levied on shares acquired by reinvestment of dividends or capital gain distributions. For the six months ended June 30, 2020, the Fund was informed that EVD received no CDSCs paid by Class A and Class C shareholders.
6 Purchases and Sales of Investments
Purchases and sales of investments, other than short-term obligations, aggregated $36,489,520 and $34,168,621, respectively, for the six months ended June 30, 2020.
7 Shares of Beneficial Interest
The Fund’s Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value). Such shares may be issued in a number of different series (such as the Fund) and classes. Transactions in Fund shares were as follows:
Class A | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 205,674 | 252,982 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | — | 127,108 | ||||||
Redemptions | (245,409 | ) | (441,932 | ) | ||||
Converted from Class C shares | 15,781 | 180,687 | ||||||
Net increase (decrease) | (23,954 | ) | 118,845 |
17 |
Table of Contents
Eaton Vance
Small-Cap Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
Class C | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 17,796 | 61,141 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | — | 35,006 | ||||||
Redemptions | (67,404 | ) | (251,122 | ) | ||||
Converted to Class A shares | (19,753 | ) | (220,838 | ) | ||||
Net decrease | (69,361 | ) | (375,813 | ) | ||||
Class I | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 1,681,473 | 1,613,928 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | — | 225,769 | ||||||
Redemptions | (1,383,162 | ) | (822,530 | ) | ||||
Net increase | 298,311 | 1,017,167 | ||||||
Class R | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 5,500 | 20,396 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | — | 4,192 | ||||||
Redemptions | (4,447 | ) | (52,386 | ) | ||||
Net increase (decrease) | 1,053 | (27,798 | ) |
8 Line of Credit
The Fund participates with other portfolios and funds managed by EVM and its affiliates in an $800 million unsecured line of credit agreement with a group of banks, which is in effect through October 27, 2020. In connection with the renewal of the agreement on October 29, 2019, funds managed by Calvert Research and Management, an affiliate of EVM, were added as participating funds to the agreement and the borrowing limit was increased from $625 million. Borrowings are made by the Fund solely for temporary purposes related to redemptions and other short-term cash needs. Interest is charged to the Fund based on its borrowings at an amount above either the Eurodollar rate or Federal Funds rate. In addition, a fee computed at an annual rate of 0.15% on the daily unused portion of the line of credit is allocated among the participating portfolios and funds at the end of each quarter. Because the line of credit is not available exclusively to the Fund, it may be unable to borrow some or all of its requested amounts at any particular time. The Fund did not have any significant borrowings or allocated fees during the six months ended June 30, 2020.
9 Investments in Affiliated Funds
At June 30, 2020, the value of the Fund’s investment in affiliated funds was $1,042,572, which represents 1.3% of the Fund’s net assets. Transactions in affiliated funds by the Fund for the six months ended June 30, 2020 were as follows:
Name of affiliated fund | Value, beginning of period | Purchases | Sales proceeds | Net realized gain (loss) | Change in unrealized appreciation (depreciation) | Value, end of period | Dividend income | Units, end of period | ||||||||||||||||||||||||
Short-Term Investments |
| |||||||||||||||||||||||||||||||
Eaton Vance Cash Reserves Fund, LLC | $ | 1,022,542 | $ | 26,197,180 | $ | (26,177,797 | ) | $ | 747 | $ | (100 | ) | $ | 1,042,572 | $ | 7,426 | 1,042,572 |
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Table of Contents
Eaton Vance
Small-Cap Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
10 Fair Value Measurements
Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
• | Level 1 – quoted prices in active markets for identical investments |
• | Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
• | Level 3 – significant unobservable inputs (including a fund’s own assumptions in determining the fair value of investments) |
In cases where the inputs used to measure fair value fall in different levels of the fair value hierarchy, the level disclosed is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
At June 30, 2020, the hierarchy of inputs used in valuing the Fund’s investments, which are carried at value, were as follows:
Asset Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stocks | $ | 78,787,741 | * | $ | — | $ | — | $ | 78,787,741 | |||||||
Short-Term Investments | — | 1,042,572 | — | 1,042,572 | ||||||||||||
Total Investments | $ | 78,787,741 | $ | 1,042,572 | $ | — | $ | 79,830,313 |
* | The level classification by major category of investments is the same as the category presentation in the Portfolio of Investments. |
11 Risks and Uncertainties
Pandemic Risk
An outbreak of respiratory disease caused by a novel coronavirus that was first detected in China in December 2019 has spread rapidly internationally. This coronavirus has resulted in closing borders, enhanced health screenings, changes to healthcare service preparation and delivery, quarantines, cancellations, disruptions to supply chains and customer activity, as well as general concern and uncertainty. The impact of this outbreak has negatively affected the worldwide economy, as well as the economies of individual countries and individual companies and can affect the market in general in significant and unforeseen ways. Health crises caused by outbreaks, such as the coronavirus outbreak, may exacerbate other pre-existing political, social and economic risks and disrupt normal market conditions and operations. The near-term impact of this coronavirus has resulted in substantial market volatility, which may have an adverse effect on the Fund’s investments.
19 |
Table of Contents
Eaton Vance
Small-Cap Fund
June 30, 2020
Board of Trustees’ Contract Approval
Overview of the Contract Review Process
The Investment Company Act of 1940, as amended (the “1940 Act”), provides, in substance, that the investment advisory agreement between a fund and its investment adviser will continue in effect from year-to-year only if its continuation is approved on an annual basis by a vote of the fund’s board of trustees, including a majority of the trustees who are not “interested persons” of the fund (“independent trustees”), cast in person at a meeting called for the purpose of considering such approval.
At a meeting held on April 22, 2020 (the “April 2020 Meeting”), the Boards of Trustees/Directors comprised of the same individuals (collectively, the “Board”) that oversees a majority of the registered investment companies advised by Eaton Vance Management or its affiliate, Boston Management and Research (the “Eaton Vance Funds”), including a majority of the independent trustees (the “Independent Trustees”), voted to approve the continuation of existing investment advisory agreements and sub-advisory agreements(1) for each of the Eaton Vance Funds for an additional one-year period. The Board relied upon the affirmative recommendation of its Contract Review Committee, which is a committee exclusively comprised of Independent Trustees. Prior to making its recommendation, the Contract Review Committee reviewed information furnished by the adviser and sub-adviser to each of the Eaton Vance Funds (including information specifically requested by the Board) for a series of formal meetings held between February and April 2020. Members of the Contract Review Committee also considered information received at prior meetings of the Board and its committees, to the extent such information was relevant to the Contract Review Committee’s annual evaluation of the investment advisory agreements and sub-advisory agreements.
In connection with its evaluation of the investment advisory agreements and sub-advisory agreements, the Board considered various information relating to the Eaton Vance Funds. This included information applicable to all or groups of Eaton Vance Funds, which is referenced immediately below, and information applicable to the particular Eaton Vance Fund covered by this report (additional fund-specific information is referenced below under “Results of the Contract Review Process”). (For funds that invest through one or more underlying portfolios, references to “each fund” in this section may include information that was considered at the portfolio-level.)
Information about Fees, Performance and Expenses
• | A report from an independent data provider comparing advisory and other fees paid by each fund to such fees paid by comparable funds, as identified by the independent data provider (“comparable funds”); |
• | A report from an independent data provider comparing each fund’s total expense ratio (and its components) to those of comparable funds; |
• | A report from an independent data provider comparing the investment performance of each fund (including, as relevant, total return data, income data, Sharpe ratios and information ratios) to the investment performance of comparable funds and, as applicable, benchmark indices, over various time periods; |
• | In certain instances, data regarding investment performance relative to customized groups of peer funds and blended indices identified by the adviser in consultation with the Portfolio Management Committee of the Board; |
• | Comparative information concerning the fees charged and services provided by the adviser and sub-adviser to each fund in managing other accounts (which may include other mutual funds, collective investment funds and institutional accounts) using investment strategies and techniques similar to those used in managing such fund(s), if any; |
• | Profitability analyses with respect to the adviser and sub-adviser to each of the funds; |
Information about Portfolio Management and Trading
• | Descriptions of the investment management services provided to each fund, as well as each of the funds’ investment strategies and policies; |
• | The procedures and processes used to determine the fair value of fund assets, when necessary, and actions taken to monitor and test the effectiveness of such procedures and processes; |
• | Information about the policies and practices of each fund’s adviser and sub-adviser (in the context of a sub-adviser, only those with trading responsibilities) with respect to trading, including their processes for seeking best execution of portfolio transactions; |
• | Information about the allocation of brokerage transactions and the benefits, if any, received by the adviser and sub-adviser (in the context of a sub-adviser, only those with trading responsibilities) to each fund as a result of brokerage allocation, including, as applicable, information concerning the acquisition of research through client commission arrangements and policies with respect to “soft dollars”; |
• | Data relating to the portfolio turnover rate of each fund; |
Information about each Adviser and Sub-adviser
• | Reports detailing the financial results and condition of the adviser and sub-adviser to each fund; |
• | Information regarding the individual investment professionals whose responsibilities include portfolio management and investment research for the funds, and, for portfolio managers and certain other investment professionals, information relating to their responsibilities with respect to managing other mutual funds and investment accounts, as applicable; |
(1) | Not all Eaton Vance Funds have entered into a sub-advisory agreement with a sub-adviser. Accordingly, references to “sub-adviser” or “sub-advisory agreement” in this “Overview” section may not be applicable to the particular Eaton Vance Fund covered by this report. |
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Table of Contents
Eaton Vance
Small-Cap Fund
June 30, 2020
Board of Trustees’ Contract Approval — continued
• | The Code of Ethics of the adviser and its affiliates and the sub-adviser of each fund, together with information relating to compliance with, and the administration of, such codes; |
• | Policies and procedures relating to proxy voting and the handling of corporate actions and class actions; |
• | Information concerning the resources devoted to compliance efforts undertaken by the adviser and its affiliates and the sub-adviser of each fund, if any, including descriptions of their various compliance programs and their record of compliance; |
• | Information concerning the business continuity and disaster recovery plans of the adviser and its affiliates and the sub-adviser of each fund, if any; |
• | A description of Eaton Vance Management’s and Boston Management and Research’s oversight of sub-advisers, including with respect to regulatory and compliance issues, investment management and other matters; |
Other Relevant Information
• | Information concerning the nature, cost and character of the administrative and other non-investment advisory services provided by Eaton Vance Management and its affiliates; |
• | Information concerning oversight of the relationship with the custodian, subcustodians and fund accountants by the adviser and/or administrator to each of the funds; |
• | For an Eaton Vance Fund structured as an exchange-listed closed-end fund, information concerning the benefits of the closed-end fund structure, as well as, where relevant, the closed-end fund’s market prices, trading volume data, distribution rates and other relevant matters; and |
• | The terms of each investment advisory agreement and sub-advisory agreement. |
During the various meetings of the Board and its committees throughout the twelve months ended April 2020, the Trustees received information from portfolio managers and other investment professionals of the advisers and sub-advisers of the funds regarding investment and performance matters, and considered various investment and trading strategies used in pursuing the funds’ investment objectives. The Trustees also received information regarding risk management techniques employed in connection with the management of the funds. The Board and its committees evaluated issues pertaining to industry and regulatory developments, compliance procedures, fund governance and other issues with respect to the funds, and received and participated in reports and presentations provided by Eaton Vance Management, Boston Management and Research and fund sub-advisers, with respect to such matters. In addition to the formal meetings of the Board and its committees, the Independent Trustees held regular teleconferences to discuss, among other topics, matters relating to the continuation of investment advisory agreements and sub-advisory agreements.
The Contract Review Committee was advised throughout the contract review process by Goodwin Procter LLP, independent legal counsel for the Independent Trustees. The members of the Contract Review Committee, with the advice of such counsel, exercised their own business judgment in determining the material factors to be considered in evaluating each investment advisory agreement and sub-advisory agreement and the weight to be given to each such factor. The conclusions reached with respect to each investment advisory agreement and sub-advisory agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each member of the Contract Review Committee may have placed varying emphasis on particular factors in reaching conclusions with respect to each investment advisory agreement and sub-advisory agreement. In evaluating each investment advisory agreement and sub-advisory agreement, including the fee structures and other terms contained in such agreements, the members of the Contract Review Committee were also informed by multiple years of analysis and discussion with the adviser and sub-adviser to each of the Eaton Vance Funds.
In voting its approval of the continuation of existing investment advisory agreements and sub-advisory agreements at the April 2020 Meeting, the Board relied on an order issued by the Securities and Exchange Commission on March 25, 2020, which provided temporary relief from the in-person voting requirements under Section 15 of the 1940 Act in response to the impacts of the COVID-19 pandemic.
Results of the Contract Review Process
Based on its consideration of the foregoing, and such other information it deemed relevant, including the factors and conclusions described below, the Contract Review Committee concluded that the continuation of the investment advisory agreement between Eaton Vance Small-Cap Fund (the “Fund”) and Boston Management and Research (the “Adviser”), including its fee structure, is in the interests of shareholders and, therefore, recommended to the Board approval of the agreement. Based on the recommendation of the Contract Review Committee, the Board, including a majority of the Independent Trustees, voted to approve continuation of the investment advisory agreement for the Fund.
Nature, Extent and Quality of Services
In considering whether to approve the investment advisory agreement for the Fund, the Board evaluated the nature, extent and quality of services provided to the Fund by the Adviser.
The Board considered the Adviser’s management capabilities and investment processes in light of the types of investments held by the Fund, including the education, experience and number of investment professionals and other personnel who provide portfolio management, investment research, and similar services to the Fund. The Board specifically noted that the Adviser has devoted extensive resources to in-house equity research and also draws upon independent research available from third-party sources. The Board also took into account the resources dedicated to portfolio management and other
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Eaton Vance
Small-Cap Fund
June 30, 2020
Board of Trustees’ Contract Approval — continued
services, the compensation methods of the Adviser and other factors, including the reputation and resources of the Adviser to recruit and retain highly qualified research, advisory and supervisory investment professionals. In addition, the Board considered the time and attention devoted to the Eaton Vance Funds, including the Fund, by senior management, as well as the infrastructure, operational capabilities and support staff in place to assist in the portfolio management and operations of the Fund, including the provision of administrative services. The Board also considered the business-related and other risks to which the Adviser or its affiliates may be subject in managing the Fund.
The Board considered the compliance programs of the Adviser and relevant affiliates thereof. The Board considered compliance and reporting matters regarding, among other things, personal trading by investment professionals, disclosure of portfolio holdings, late trading, frequent trading, portfolio valuation, business continuity and the allocation of investment opportunities. The Board also considered the responses of the Adviser and its affiliates to requests in recent years from regulatory authorities, such as the Securities and Exchange Commission and the Financial Industry Regulatory Authority.
The Board considered other administrative services provided or overseen by Eaton Vance Management and its affiliates, including transfer agency and accounting services. The Board evaluated the benefits to shareholders of investing in a fund that is a part of a large fund complex offering exposure to a variety of asset classes and investment disciplines, as well as the ability, in many cases, to exchange an investment among different funds without incurring additional sales charges.
After consideration of the foregoing factors, among others, the Board concluded that the nature, extent and quality of services provided by the Adviser, taken as a whole, are appropriate and consistent with the terms of the investment advisory agreement.
Fund Performance
The Board compared the Fund’s investment performance to that of comparable funds identified by an independent data provider (the peer group), as well as an appropriate benchmark index and a custom peer group of similarly managed funds. The Board’s review included comparative performance data with respect to the Fund for the one-, three-, five- and ten-year periods ended September 30, 2019. In this regard, the Board noted that the performance of the Fund was higher than the median performance of the Fund’s peer group and custom peer group for the three-year period. The Board also noted that the performance of the Fund was higher than its benchmark index for the three-year period. The Board concluded that the performance of the Fund was satisfactory.
Management Fees and Expenses
The Board considered contractual fee rates payable by the Fund for advisory and administrative services (referred to collectively as “management fees”). As part of its review, the Board considered the Fund’s management fees and total expense ratio for the one-year period ended September 30, 2019, as compared to those of comparable funds, before and after giving effect to any undertaking to waive fees or reimburse expenses. The Board also received and considered information about the services offered and the fee rates charged by the Adviser to other types of accounts with investment objectives and strategies that are substantially similar to and/or managed in a similar investment style as the Fund. In this regard, the Board received information about the differences in the nature and scope of services the Adviser provides to the Fund as compared to other types of accounts and the material differences in compliance, reporting and other legal burdens and risks to the Adviser as between the Fund and other types of accounts. The Board also considered factors that had an impact on the Fund’s total expense ratio relative to comparable funds.
After considering the foregoing information, and in light of the nature, extent and quality of the services provided by the Adviser, the Board concluded that the management fees charged for advisory and related services are reasonable.
Profitability and “Fall-Out” Benefits
The Board considered the level of profits realized by the Adviser and relevant affiliates thereof in providing investment advisory and administrative services to the Fund and to all Eaton Vance Funds as a group. The Board considered the level of profits realized without regard to marketing support or other payments by the Adviser and its affiliates to third parties in respect of distribution or other services.
The Board concluded that, in light of the foregoing factors and the nature, extent and quality of the services rendered, the profits realized by the Adviser and its affiliates are deemed not to be excessive.
The Board also considered direct or indirect fall-out benefits received by the Adviser and its affiliates in connection with their respective relationships with the Fund, including the benefits of research services that may be available to the Adviser as a result of securities transactions effected for the Fund and other investment advisory clients.
Economies of Scale
In reviewing management fees and profitability, the Board also considered the extent to which the Adviser and its affiliates, on the one hand, and the Fund, on the other hand, can expect to realize benefits from economies of scale as the assets of the Fund increase. The Board acknowledged the difficulty in accurately measuring the benefits resulting from economies of scale, if any, with respect to the management of any specific fund or group of funds. The
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Eaton Vance
Small-Cap Fund
June 30, 2020
Board of Trustees’ Contract Approval — continued
Board reviewed data summarizing the increases and decreases in the assets of the Fund and of all Eaton Vance Funds as a group over various time periods, and evaluated the extent to which the total expense ratio of the Fund and the profitability of the Adviser and its affiliates may have been affected by such increases or decreases. Based upon the foregoing, the Board concluded that the Fund currently shares in the benefits from economies of scale, if any, when they are realized by the Adviser. The Board also concluded that the structure of the advisory fee, which includes breakpoints at several asset levels, will allow the Fund to continue to benefit from any economies of scale in the future.
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Eaton Vance
Small-Cap Fund
June 30, 2020
Liquidity Risk Management Program
The Fund has implemented a written liquidity risk management program (Program) and related procedures to manage its liquidity in accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (Liquidity Rule). The Liquidity Rule defines “liquidity risk” as the risk that a fund could not meet requests to redeem shares issued by the fund without significant dilution of the remaining investors’ interests in the fund. The Fund’s Board of Trustees/Directors has designated the investment adviser to serve as the administrator of the Program and the related procedures. The administrator has established a Liquidity Risk Management Oversight Committee (Committee) to perform the functions necessary to administer the Program. As part of the Program, the administrator is responsible for identifying illiquid investments and categorizing the relative liquidity of the Fund’s investments in accordance with the Liquidity Rule. Under the Program, the administrator assesses, manages, and periodically reviews the Fund’s liquidity risk, and is responsible for making certain reports to the Fund’s Board of Trustees/Directors and the Securities and Exchange Commission (SEC) regarding the liquidity of the Fund’s investments, and to notify the Board of Trustees/Directors and the SEC of certain liquidity events specified in the Liquidity Rule. The liquidity of the Fund’s portfolio investments is determined based on a number of factors including, but not limited to, relevant market, trading and investment-specific considerations under the Program.
At a meeting of the Fund’s Board of Trustees/Directors, the Committee provided a written report to the Fund’s Board of Trustees/Directors pertaining to the operation, adequacy, and effectiveness of implementation of the Program, as well as the operation of the highly liquid investment minimum (if applicable) for the period December 1, 2018 through December 31, 2019 (Review Period). The Program operated effectively during the Review Period, supporting the administrator’s ability to assess, manage and monitor Fund liquidity risk, including during periods of market volatility and net redemptions. During the Review Period, the Fund met redemption requests on a timely basis.
There can be no assurance that the Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
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Eaton Vance
Small-Cap Fund
June 30, 2020
Officers and Trustees
Officers
Payson F. Swaffield
President
Maureen A. Gemma
Vice President, Secretary and Chief Legal Officer
James F. Kirchner
Treasurer
Richard F. Froio
Chief Compliance Officer
Trustees
William H. Park
Chairperson
Thomas E. Faust Jr.*
Mark R. Fetting
Cynthia E. Frost
George J. Gorman
Valerie A. Mosley
Helen Frame Peters
Keith Quinton
Marcus L. Smith
Susan J. Sutherland
Scott E. Wennerholm
* | Interested Trustee |
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Eaton Vance Funds
IMPORTANT NOTICES
Privacy. The Eaton Vance organization is committed to ensuring your financial privacy. Each entity listed below has adopted a privacy policy and procedures (“Privacy Program”) Eaton Vance believes is reasonably designed to protect your personal information and to govern when and with whom Eaton Vance may share your personal information.
• | At the time of opening an account, Eaton Vance generally requires you to provide us with certain information such as name, address, social security number, tax status, account numbers, and account balances. This information is necessary for us to both open an account for you and to allow us to satisfy legal requirements such as applicable anti-money laundering reviews and know-your-customer requirements. |
• | On an ongoing basis, in the normal course of servicing your account, Eaton Vance may share your information with unaffiliated third parties that perform various services for Eaton Vance and/or your account. These third parties include transfer agents, custodians, broker/dealers and our professional advisers, including auditors, accountants, and legal counsel. Eaton Vance may additionally share your personal information with our affiliates. |
• | We believe our Privacy Program is reasonably designed to protect the confidentiality of your personal information and to prevent unauthorized access to that information. |
• | We reserve the right to change our Privacy Program at any time upon proper notification to you. You may want to review our Privacy Program periodically for changes by accessing the link on our homepage: www.eatonvance.com. |
Our pledge of protecting your personal information applies to the following entities within the Eaton Vance organization: the Eaton Vance Family of Funds, Eaton Vance Management, Eaton Vance Investment Counsel, Eaton Vance Distributors, Inc., Eaton Vance Trust Company, Eaton Vance Management (International) Limited, Eaton Vance Advisers International Limited, Eaton Vance Global Advisors Limited, Eaton Vance Management’s Real Estate Investment Group, Boston Management and Research, Calvert Research and Management, and Calvert Funds. This Privacy Notice supersedes all previously issued privacy disclosures. For more information about our Privacy Program or about how your personal information may be used, please call 1-800-262-1122.
Delivery of Shareholder Documents. The Securities and Exchange Commission (SEC) permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called “householding” and it helps eliminate duplicate mailings to shareholders. Eaton Vance, or your financial intermediary, may household the mailing of your documents indefinitely unless you instruct Eaton Vance, or your financial intermediary, 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 intermediary. Your instructions that householding not apply to delivery of your Eaton Vance documents will typically be effective within 30 days of receipt by Eaton Vance or your financial intermediary.
Portfolio Holdings. Each Eaton Vance Fund and its underlying Portfolio(s) (if applicable) files a schedule of portfolio holdings on Part F to Form N-PORT with the SEC. Certain information filed on Form N-PORT may be viewed on the Eaton Vance website at www.eatonvance.com, by calling Eaton Vance at 1-800-262-1122 or in the EDGAR database on the SEC’s website at www.sec.gov.
Proxy Voting. From time to time, funds are required to vote proxies related to the securities held by the funds. The Eaton Vance Funds or their underlying Portfolios (if applicable) vote proxies according to a set of policies and procedures approved by the Funds’ and Portfolios’ Boards. You may obtain a description of these policies and procedures and information on how the Funds or Portfolios voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge, upon request, by calling 1-800-262-1122 and by accessing the SEC’s website at www.sec.gov.
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Investment Adviser
Boston Management and Research
Two International Place
Boston, MA 02110
Administrator
Eaton Vance Management
Two International Place
Boston, MA 02110
Principal Underwriter*
Eaton Vance Distributors, Inc.
Two International Place
Boston, MA 02110
(617) 482-8260
Custodian
State Street Bank and Trust Company
State Street Financial Center, One Lincoln Street
Boston, MA 02111
Transfer Agent
BNY Mellon Investment Servicing (US) Inc.
Attn: Eaton Vance Funds
P.O. Box 9653
Providence, RI 02940-9653
(800) 262-1122
Fund Offices
Two International Place
Boston, MA 02110
* | FINRA BrokerCheck. Investors may check the background of their Investment Professional by contacting the Financial Industry Regulatory Authority (FINRA). FINRA BrokerCheck is a free tool to help investors check the professional background of current and former FINRA-registered securities firms and brokers. FINRA BrokerCheck is available by calling 1-800-289-9999 and at www.FINRA.org. The FINRA BrokerCheck brochure describing this program is available to investors at www.FINRA.org. |
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7699 6.30.20
Table of Contents
Eaton Vance
Special Equities Fund
Semiannual Report
June 30, 2020
Important Note. Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semi-annual shareholder reports will no longer be sent by mail unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website (eatonvance.com/funddocuments), and you will be notified by mail each time a report is posted and provided with a website address to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you are a direct investor, you may elect to receive shareholder reports and other communications from the Fund electronically by signing up for e-Delivery at eatonvance.com/edelivery. If you own your shares through a financial intermediary (such as a broker-dealer or bank), you must contact your financial intermediary to sign up.
You may elect to receive all future Fund shareholder reports in paper free of charge. If you are a direct investor, you can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by calling 1-800-262-1122. If you own these shares through a financial intermediary, you must contact your financial intermediary or follow instructions included with this disclosure, if applicable, to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all Eaton Vance funds held directly or to all funds held through your financial intermediary, as applicable.
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Commodity Futures Trading Commission Registration. Effective December 31, 2012, the Commodity Futures Trading Commission (“CFTC”) adopted certain regulatory changes that subject registered investment companies and advisers to regulation by the CFTC if a fund invests more than a prescribed level of its assets in certain CFTC-regulated instruments (including futures, certain options and swap agreements) or markets itself as providing investment exposure to such instruments. The investment adviser has claimed an exclusion from the definition of “commodity pool operator” under the Commodity Exchange Act with respect to its management of the Fund. Accordingly, neither the Fund nor the adviser with respect to the operation of the Fund is subject to CFTC regulation. Because of its management of other strategies, the Fund’s adviser is registered with the CFTC as a commodity pool operator. The adviser is also registered as a commodity trading advisor.
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.
This report must be preceded or accompanied by a current summary prospectus or prospectus. Before investing, investors should consider carefully the investment objective, risks, and charges and expenses of a mutual fund. This and other important information is contained in the summary prospectus and prospectus, which can be obtained from a financial intermediary. Prospective investors should read the prospectus carefully before investing. For further information, please call 1-800-262-1122.
Table of Contents
Semiannual Report June 30, 2020
Eaton Vance
Special Equities Fund
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Table of Contents
Eaton Vance
Special Equities Fund
June 30, 2020
Portfolio Managers Michael D. McLean, CFA and J. Griffith Noble, CFA
% Average Annual Total Returns | Class Inception Date | Performance Inception Date | Six Months | One Year | Five Years | Ten Years | ||||||||||||||||||
Class A at NAV | 04/22/1968 | 04/22/1968 | –11.40 | % | –7.68 | % | 5.27 | % | 9.55 | % | ||||||||||||||
Class A with 5.75% Maximum Sales Charge | — | — | –16.49 | –12.99 | 4.03 | 8.91 | ||||||||||||||||||
Class C at NAV | 11/17/1994 | 04/22/1968 | –11.70 | –8.36 | 4.49 | 8.73 | ||||||||||||||||||
Class C with 1% Maximum Sales Charge | — | — | –12.58 | –9.23 | 4.49 | 8.73 | ||||||||||||||||||
Class I at NAV | 07/29/2011 | 04/22/1968 | –11.28 | –7.47 | 5.54 | 9.80 | ||||||||||||||||||
| ||||||||||||||||||||||||
Russell 2500™ Index | — | — | –11.05 | % | –4.70 | % | 5.41 | % | 11.45 | % | ||||||||||||||
% Total Annual Operating Expense Ratios3 | Class A | Class C | Class I | |||||||||||||||||||||
Gross | 1.31 | % | 2.06 | % | 1.06 | % | ||||||||||||||||||
Net | 1.20 | 1.95 | 0.95 |
Sector Allocation (% of net assets)4
Top 10 Holdings (% of net assets)4
ACI Worldwide, Inc. | 2.8 | % | ||
RealPage, Inc. | 2.8 | |||
Valvoline, Inc. | 2.6 | |||
Kansas City Southern | 2.4 | |||
Hexcel Corp. | 2.1 | |||
ServiceMaster Global Holdings, Inc. | 2.1 | |||
Nomad Foods, Ltd. | 2.0 | |||
EastGroup Properties, Inc. | 1.9 | |||
CMS Energy Corp. | 1.9 | |||
Mercury Systems, Inc. | 1.9 | |||
Total | 22.5 | % |
See Endnotes and Additional Disclosures in this report.
Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or offering price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance for periods less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to eatonvance.com.
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Eaton Vance
Special Equities Fund
June 30, 2020
Endnotes and Additional Disclosures
1 | Russell 2500™ Index is an unmanaged index of approximately 2,500 small- and midcap U.S. stocks. Unless otherwise stated, index returns do not reflect the effect of any applicable sales charges, commissions, expenses, taxes or leverage, as applicable. It is not possible to invest directly in an index. |
2 | Total Returns at NAV do not include applicable sales charges. If sales charges were deducted, the returns would be lower. Total Returns shown with maximum sales charge reflect the stated maximum sales charge. Unless otherwise stated, performance does not reflect the deduction of taxes on Fund distributions or redemptions of Fund shares. |
Performance prior to the inception date of a class may be linked to the performance of an older class of the Fund. This linked performance is adjusted for any applicable sales charge, but is not adjusted for class expense differences. If adjusted for such differences, the performance would be different. The performance of Class I is linked to Class A. Performance presented in the Financial Highlights included in the financial statements is not linked. |
3 | Source: Fund prospectus. Net expense ratios reflect a contractual expense reimbursement that continues through 4/30/21. Without the reimbursement, performance would have been lower. The expense ratios for the current reporting period can be found in the Financial Highlights section of this report. |
4 | Excludes cash and cash equivalents. |
Fund profile subject to change due to active management. |
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Eaton Vance
Special Equities Fund
June 30, 2020
Example: As a Fund shareholder, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases and redemption fees (if applicable); and (2) ongoing costs, including management fees; distribution and/or service fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of Fund investing and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2020 – June 30, 2020).
Actual Expenses: The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes: The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the actual Fund expense ratio and an assumed rate of return of 5% per year (before expenses), which is not the actual Fund return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption fees (if applicable). Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would be higher.
Beginning Account Value (1/1/20) | Ending Account Value (6/30/20) | Expenses Paid During Period* (1/1/20 – 6/30/20) | Annualized Expense Ratio | |||||||||||||
Actual | ||||||||||||||||
Class A | $ | 1,000.00 | $ | 886.00 | $ | 5.63 | ** | 1.20 | % | |||||||
Class C | $ | 1,000.00 | $ | 883.00 | $ | 9.13 | ** | 1.95 | % | |||||||
Class I | $ | 1,000.00 | $ | 887.20 | $ | 4.46 | ** | 0.95 | % | |||||||
Hypothetical | ||||||||||||||||
(5% return per year before expenses) | ||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,018.90 | $ | 6.02 | ** | 1.20 | % | |||||||
Class C | $ | 1,000.00 | $ | 1,015.20 | $ | 9.77 | ** | 1.95 | % | |||||||
Class I | $ | 1,000.00 | $ | 1,020.10 | $ | 4.77 | ** | 0.95 | % |
* | Expenses are equal to the Fund’s annualized expense ratio for the indicated Class, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). The Example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on December 31, 2019. |
** | Absent an allocation of certain expenses to an affiliate, expenses would be higher. |
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Eaton Vance
Special Equities Fund
June 30, 2020
Portfolio of Investments (Unaudited)
Common Stocks — 99.5% |
| |||||||
Security | Shares | Value | ||||||
Aerospace & Defense — 4.0% | ||||||||
Hexcel Corp. | 19,381 | $ | 876,409 | |||||
Mercury Systems, Inc.(1) | 9,781 | 769,373 | ||||||
$ | 1,645,782 | |||||||
Auto Components — 2.1% | ||||||||
Dana, Inc. | 19,400 | $ | 236,486 | |||||
Dorman Products, Inc.(1) | 5,525 | 370,562 | ||||||
Visteon Corp.(1) | 4,110 | 281,535 | ||||||
$ | 888,583 | |||||||
Banks — 5.3% | ||||||||
Commerce Bancshares, Inc. | 9,580 | $ | 569,723 | |||||
Community Bank System, Inc. | 7,505 | 427,935 | ||||||
First Citizens BancShares, Inc., Class A | 1,115 | 451,597 | ||||||
First Republic Bank | 2,993 | 317,228 | ||||||
Stock Yards Bancorp, Inc. | 11,375 | 457,275 | ||||||
$ | 2,223,758 | |||||||
Biotechnology — 2.4% | ||||||||
Emergent BioSolutions, Inc.(1) | 7,775 | $ | 614,847 | |||||
Ligand Pharmaceuticals, Inc.(1) | 3,325 | 371,901 | ||||||
$ | 986,748 | |||||||
Building Products — 1.6% | ||||||||
AZEK Co., Inc. (The)(1) | 10,254 | $ | 326,693 | |||||
Trex Co., Inc.(1) | 2,705 | 351,839 | ||||||
$ | 678,532 | |||||||
Capital Markets — 2.1% | ||||||||
Cohen & Steers, Inc. | 4,854 | $ | 330,315 | |||||
Tradeweb Markets, Inc., Class A | 9,205 | 535,178 | ||||||
$ | 865,493 | |||||||
Chemicals — 5.2% | ||||||||
Balchem Corp. | 6,002 | $ | 569,350 | |||||
NewMarket Corp. | 1,335 | 534,641 | ||||||
Valvoline, Inc. | 55,285 | 1,068,659 | ||||||
$ | 2,172,650 | |||||||
Commercial Services & Supplies — 0.8% | ||||||||
Herman Miller, Inc. | 9,445 | $ | 222,996 | |||||
UniFirst Corp. | 620 | 110,949 | ||||||
$ | 333,945 |
Security | Shares | Value | ||||||
Communications Equipment — 0.6% | ||||||||
F5 Networks, Inc.(1) | 1,895 | $ | 264,315 | |||||
$ | 264,315 | |||||||
Containers & Packaging — 0.8% | ||||||||
Ball Corp. | 4,705 | $ | 326,950 | |||||
$ | 326,950 | |||||||
Diversified Consumer Services — 2.7% | ||||||||
K12, Inc.(1) | 10,110 | $ | 275,397 | |||||
ServiceMaster Global Holdings, Inc.(1) | 23,935 | 854,240 | ||||||
$ | 1,129,637 | |||||||
Electric Utilities — 1.5% | ||||||||
Alliant Energy Corp. | 13,289 | $ | 635,746 | |||||
$ | 635,746 | |||||||
Electrical Equipment — 1.6% | ||||||||
AMETEK, Inc. | 7,265 | $ | 649,273 | |||||
$ | 649,273 | |||||||
Equity Real Estate Investment Trusts (REITs) — 9.7% | ||||||||
CubeSmart | 22,187 | $ | 598,827 | |||||
EastGroup Properties, Inc. | 6,795 | 805,955 | ||||||
Equity LifeStyle Properties, Inc. | 3,210 | 200,561 | ||||||
Essex Property Trust, Inc. | 1,886 | 432,215 | ||||||
Healthcare Realty Trust, Inc. | 23,540 | 689,486 | ||||||
National Retail Properties, Inc. | 17,070 | 605,644 | ||||||
Rexford Industrial Realty, Inc. | 17,045 | 706,174 | ||||||
$ | 4,038,862 | |||||||
Food & Staples Retailing — 0.5% | ||||||||
Performance Food Group Co.(1) | 7,573 | $ | 220,677 | |||||
$ | 220,677 | |||||||
Food Products — 3.3% | ||||||||
Flowers Foods, Inc. | 15,510 | $ | 346,804 | |||||
Lancaster Colony Corp. | 1,190 | 184,438 | ||||||
Nomad Foods, Ltd.(1) | 38,840 | 833,118 | ||||||
$ | 1,364,360 | |||||||
Gas Utilities — 1.3% | ||||||||
ONE Gas, Inc. | 7,285 | $ | 561,309 | |||||
$ | 561,309 |
5 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Special Equities Fund
June 30, 2020
Portfolio of Investments (Unaudited) — continued
Security | Shares | Value | ||||||
Health Care Equipment & Supplies — 6.3% | ||||||||
Cooper Cos., Inc. (The) | 891 | $ | 252,723 | |||||
Envista Holdings Corp.(1) | 14,620 | 308,336 | ||||||
Haemonetics Corp.(1) | 8,420 | 754,095 | ||||||
ICU Medical, Inc.(1) | 2,798 | 515,699 | ||||||
Tandem Diabetes Care, Inc.(1) | 2,225 | 220,097 | ||||||
Teleflex, Inc. | 1,614 | 587,464 | ||||||
$ | 2,638,414 | |||||||
Health Care Providers & Services — 6.1% | ||||||||
Addus HomeCare Corp.(1) | 4,575 | $ | 423,462 | |||||
Amedisys, Inc.(1) | 2,130 | 422,890 | ||||||
Chemed Corp. | 1,200 | 541,284 | ||||||
LHC Group, Inc.(1) | 3,540 | 617,093 | ||||||
R1 RCM, Inc.(1) | 47,215 | 526,447 | ||||||
$ | 2,531,176 | |||||||
Hotels, Restaurants & Leisure — 0.5% | ||||||||
Choice Hotels International, Inc. | 2,455 | $ | 193,700 | |||||
$ | 193,700 | |||||||
Insurance — 4.3% | ||||||||
First American Financial Corp. | 5,021 | $ | 241,108 | |||||
Horace Mann Educators Corp. | 15,735 | 577,947 | ||||||
RLI Corp. | 5,857 | 480,860 | ||||||
Selective Insurance Group, Inc. | 9,075 | 478,615 | ||||||
$ | 1,778,530 | |||||||
IT Services — 5.1% | ||||||||
Black Knight, Inc.(1) | 9,792 | $ | 710,507 | |||||
Euronet Worldwide, Inc.(1) | 7,446 | 713,476 | ||||||
NIC, Inc. | 31,280 | 718,189 | ||||||
$ | 2,142,172 | |||||||
Leisure Products — 1.4% | ||||||||
Brunswick Corp. | 5,655 | $ | 361,977 | |||||
Polaris, Inc. | 2,275 | 210,551 | ||||||
$ | 572,528 | |||||||
Machinery — 4.4% | ||||||||
Middleby Corp. (The)(1) | 4,915 | $ | 387,990 | |||||
Mueller Water Products, Inc., Class A | 77,050 | 726,582 | ||||||
RBC Bearings, Inc.(1) | 1,186 | 158,971 | ||||||
Woodward, Inc. | 7,165 | 555,646 | ||||||
$ | 1,829,189 |
Security | Shares | Value | ||||||
Marine — 1.0% | ||||||||
Kirby Corp.(1) | 7,683 | $ | 411,502 | |||||
$ | 411,502 | |||||||
Multi-Utilities — 1.9% | ||||||||
CMS Energy Corp. | 13,405 | $ | 783,120 | |||||
$ | 783,120 | |||||||
Oil, Gas & Consumable Fuels — 1.0% | ||||||||
Diamondback Energy, Inc. | 7,110 | $ | 297,340 | |||||
PDC Energy, Inc.(1) | 8,035 | 99,956 | ||||||
$ | 397,296 | |||||||
Pharmaceuticals — 1.5% | ||||||||
Jazz Pharmaceuticals PLC(1) | 3,945 | $ | 435,291 | |||||
Royalty Pharma PLC, Class A(1) | 4,062 | 197,210 | ||||||
$ | 632,501 | |||||||
Professional Services — 1.5% | ||||||||
CBIZ, Inc.(1) | 25,625 | $ | 614,231 | |||||
$ | 614,231 | |||||||
Road & Rail — 3.2% | ||||||||
Kansas City Southern | 6,620 | $ | 988,300 | |||||
Landstar System, Inc. | 3,160 | 354,899 | ||||||
$ | 1,343,199 | |||||||
Semiconductors & Semiconductor Equipment — 1.0% | ||||||||
Silicon Laboratories, Inc.(1) | 4,110 | $ | 412,110 | |||||
$ | 412,110 | |||||||
Software — 10.3% | ||||||||
ACI Worldwide, Inc.(1) | 43,198 | $ | 1,165,914 | |||||
Altair Engineering, Inc., Class A(1) | 19,172 | 762,087 | ||||||
CDK Global, Inc. | 12,685 | 525,413 | ||||||
Envestnet, Inc.(1) | 8,860 | 651,564 | ||||||
RealPage, Inc.(1) | 17,908 | 1,164,199 | ||||||
$ | 4,269,177 | |||||||
Specialty Retail — 2.4% | ||||||||
Five Below, Inc.(1) | 1,705 | $ | 182,282 | |||||
Lithia Motors, Inc., Class A | 2,050 | 310,226 | ||||||
National Vision Holdings, Inc.(1) | 16,155 | 493,051 | ||||||
$ | 985,559 |
6 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Special Equities Fund
June 30, 2020
Portfolio of Investments (Unaudited) — continued
Security | Shares | Value | ||||||
Textiles, Apparel & Luxury Goods — 0.7% | ||||||||
Columbia Sportswear Co. | 2,210 | $ | 178,082 | |||||
Deckers Outdoor Corp.(1) | 635 | 124,707 | ||||||
$ | 302,789 | |||||||
Trading Companies & Distributors — 1.4% | ||||||||
Applied Industrial Technologies, Inc. | 9,074 | $ | 566,127 | |||||
$ | 566,127 | |||||||
Total Common Stocks | $ | 41,389,940 | ||||||
Short-Term Investments — 0.7% |
| |||||||
Description | Units | Value | ||||||
Eaton Vance Cash Reserves Fund, LLC, 0.35%(2) | 303,045 | $ | 303,045 | |||||
Total Short-Term Investments |
| $ | 303,045 | |||||
Total Investments — 100.2% |
| $ | 41,692,985 | |||||
Other Assets, Less Liabilities — (0.2)% |
| $ | (89,367 | ) | ||||
Net Assets — 100.0% |
| $ | 41,603,618 |
The percentage shown for each investment category in the Portfolio of Investments is based on net assets.
(1) | Non-income producing security. |
(2) | Affiliated investment company, available to Eaton Vance portfolios and funds, which invests in high quality, U.S. dollar denominated money market instruments. The rate shown is the annualized seven-day yield as of June 30, 2020. |
7 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Special Equities Fund
June 30, 2020
Statement of Assets and Liabilities (Unaudited)
Assets | June 30, 2020 | |||
Unaffiliated investments, at value (identified cost, $34,075,577) | $ | 41,389,940 | ||
Affiliated investment, at value (identified cost, $303,045) | 303,045 | |||
Dividends receivable | 32,879 | |||
Dividends receivable from affiliated investment | 50 | |||
Receivable for investments sold | 31,533 | |||
Receivable for Fund shares sold | 4,149 | |||
Receivable from affiliate | 6,011 | |||
Total assets | $ | 41,767,607 | ||
Liabilities |
| |||
Payable for investments purchased | $ | 58,517 | ||
Payable for Fund shares redeemed | 42,015 | |||
Payable to affiliates: | ||||
Investment adviser fee | 21,793 | |||
Distribution and service fees | 6,341 | |||
Trustees’ fees | 750 | |||
Accrued expenses | 34,573 | |||
Total liabilities | $ | 163,989 | ||
Net Assets | $ | 41,603,618 | ||
Sources of Net Assets |
| |||
Paid-in capital | $ | 33,700,744 | ||
Distributable earnings | 7,902,874 | |||
Net Assets | $ | 41,603,618 | ||
Class A Shares |
| |||
Net Assets | $ | 27,873,415 | ||
Shares Outstanding | 1,294,345 | |||
Net Asset Value and Redemption Price Per Share | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 21.53 | ||
Maximum Offering Price Per Share | ||||
(100 ÷ 94.25 of net asset value per share) | $ | 22.84 | ||
Class C Shares |
| |||
Net Assets | $ | 704,640 | ||
Shares Outstanding | 38,101 | |||
Net Asset Value and Offering Price Per Share* | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 18.49 | ||
Class I Shares |
| |||
Net Assets | $ | 13,025,563 | ||
Shares Outstanding | 586,903 | |||
Net Asset Value, Offering Price and Redemption Price Per Share | ||||
(net assets ÷ shares of beneficial interest outstanding) | $ | 22.19 |
On sales of $50,000 or more, the offering price of Class A shares is reduced.
* | Redemption price per share is equal to the net asset value less any applicable contingent deferred sales charge. |
8 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Special Equities Fund
June 30, 2020
Statement of Operations (Unaudited)
Investment Income | Six Months Ended June 30, 2020 | |||
Dividends | $ | 237,395 | ||
Dividends from affiliated investment | 3,363 | |||
Total investment income | $ | 240,758 | ||
Expenses |
| |||
Investment adviser fee | $ | 133,358 | ||
Distribution and service fees | ||||
Class A | 35,488 | |||
Class C | 3,940 | |||
Trustees’ fees and expenses | 1,524 | |||
Custodian fee | 13,074 | |||
Transfer and dividend disbursing agent fees | 33,134 | |||
Legal and accounting services | 20,376 | |||
Printing and postage | 9,360 | |||
Registration fees | 21,436 | |||
Miscellaneous | 6,242 | |||
Total expenses | $ | 277,932 | ||
Deduct — | ||||
Allocation of expenses to affiliate | $ | 36,838 | ||
Total expense reductions | $ | 36,838 | ||
Net expenses | $ | 241,094 | ||
Net investment loss | $ | (336 | ) | |
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) — | ||||
Investment transactions | $ | 180,850 | ||
Investment transactions — affiliated investment | 110 | |||
Net realized gain | $ | 180,960 | ||
Change in unrealized appreciation (depreciation) — | ||||
Investments | $ | (5,667,808 | ) | |
Investments — affiliated investment | (41 | ) | ||
Net change in unrealized appreciation (depreciation) | $ | (5,667,849 | ) | |
Net realized and unrealized loss | $ | (5,486,889 | ) | |
Net decrease in net assets from operations | $ | (5,487,225 | ) |
9 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Special Equities Fund
June 30, 2020
Statements of Changes in Net Assets
Increase (Decrease) in Net Assets | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
From operations — | ||||||||
Net investment loss | $ | (336 | ) | $ | (38,109 | ) | ||
Net realized gain | 180,960 | 2,286,525 | ||||||
Net change in unrealized appreciation (depreciation) | (5,667,849 | ) | 9,213,111 | |||||
Net increase (decrease) in net assets from operations | $ | (5,487,225 | ) | $ | 11,461,527 | |||
Distributions to shareholders — | ||||||||
Class A | $ | — | $ | (1,432,333 | ) | |||
Class C | — | (47,924 | ) | |||||
Class I | — | (683,967 | ) | |||||
Total distributions to shareholders | $ | — | $ | (2,164,224 | ) | |||
Transactions in shares of beneficial interest — | ||||||||
Proceeds from sale of shares | ||||||||
Class A | $ | 313,616 | $ | 925,631 | ||||
Class C | 49,654 | 47,571 | ||||||
Class I | 1,880,426 | 6,507,487 | ||||||
Net asset value of shares issued to shareholders in payment of distributions declared | ||||||||
Class A | — | 1,204,363 | ||||||
Class C | — | 47,823 | ||||||
Class I | — | 678,594 | ||||||
Cost of shares redeemed | ||||||||
Class A | (1,557,899 | ) | (4,699,984 | ) | ||||
Class C | (75,992 | ) | (282,146 | ) | ||||
Class I | (4,657,488 | ) | (3,626,142 | ) | ||||
Net asset value of shares converted | ||||||||
Class A | 111,933 | 529,438 | ||||||
Class C | (111,933 | ) | (529,438 | ) | ||||
Net increase (decrease) in net assets from Fund share transactions | $ | (4,047,683 | ) | $ | 803,197 | |||
Net increase (decrease) in net assets | $ | (9,534,908 | ) | $ | 10,100,500 | |||
Net Assets |
| |||||||
At beginning of period | $ | 51,138,526 | $ | 41,038,026 | ||||
At end of period | $ | 41,603,618 | $ | 51,138,526 |
10 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Special Equities Fund
June 30, 2020
Financial Highlights
Class A | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 24.300 | $ | 19.820 | $ | 22.700 | $ | 21.100 | $ | 19.550 | $ | 22.460 | ||||||||||||
Income (Loss) From Operations | ||||||||||||||||||||||||
Net investment loss(1) | $ | (0.006 | ) | $ | (0.034 | ) | $ | (0.036 | ) | $ | (0.070 | ) | $ | (0.058 | ) | $ | (0.111 | ) | ||||||
Net realized and unrealized gain (loss) | (2.764 | ) | 5.586 | (0.982 | ) | 3.281 | 3.025 | (0.539 | ) | |||||||||||||||
Total income (loss) from operations | $ | (2.770 | ) | $ | 5.552 | $ | (1.018 | ) | $ | 3.211 | $ | 2.967 | $ | (0.650 | ) | |||||||||
Less Distributions | ||||||||||||||||||||||||
From net realized gain | $ | — | $ | (1.072 | ) | $ | (1.862 | ) | $ | (1.611 | ) | $ | (1.417 | ) | $ | (2.260 | ) | |||||||
Total distributions | $ | — | $ | (1.072 | ) | $ | (1.862 | ) | $ | (1.611 | ) | $ | (1.417 | ) | $ | (2.260 | ) | |||||||
Net asset value — End of period | $ | 21.530 | $ | 24.300 | $ | 19.820 | $ | 22.700 | $ | 21.100 | $ | 19.550 | ||||||||||||
Total Return(2) | (11.40 | )%(3)(4) | 28.12 | %(3) | (4.95 | )%(3) | 15.38 | %(3) | 15.44 | % | (2.99 | )% | ||||||||||||
Ratios/Supplemental Data |
| |||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 27,873 | $ | 32,825 | $ | 28,419 | $ | 32,397 | $ | 32,005 | $ | 30,930 | ||||||||||||
Ratios (as a percentage of average daily net assets): | ||||||||||||||||||||||||
Expenses(5) | 1.20 | %(3)(6) | 1.29 | %(3) | 1.35 | %(3) | 1.36 | %(3) | 1.41 | % | 1.32 | % | ||||||||||||
Net investment loss | (0.06 | )%(6) | (0.14 | )% | (0.15 | )% | (0.32 | )% | (0.29 | )% | (0.48 | )% | ||||||||||||
Portfolio Turnover | 21 | %(4) | 39 | % | 41 | % | 65 | % | 67 | % | 83 | % |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges. |
(3) | The administrator reimbursed certain operating expenses (equal to 0.17%, 0.02%, 0.02% and 0.01% of average daily net assets for the six months ended June 30, 2020 and the years ended December 31, 2019, 2018 and 2017, respectively). Absent this reimbursement, total return would be lower. |
(4) | Not annualized. |
(5) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(6) | Annualized. |
11 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Special Equities Fund
June 30, 2020
Financial Highlights — continued
Class C | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 20.940 | $ | 17.330 | $ | 20.230 | $ | 19.110 | $ | 17.960 | $ | 20.970 | ||||||||||||
Income (Loss) From Operations | ||||||||||||||||||||||||
Net investment loss(1) | $ | (0.076 | ) | $ | (0.191 | ) | $ | (0.195 | ) | $ | (0.215 | ) | $ | (0.191 | ) | $ | (0.262 | ) | ||||||
Net realized and unrealized gain (loss) | (2.374 | ) | 4.873 | (0.843 | ) | 2.946 | 2.758 | (0.488 | ) | |||||||||||||||
Total income (loss) from operations | $ | (2.450 | ) | $ | 4.682 | $ | (1.038 | ) | $ | 2.731 | $ | 2.567 | $ | (0.750 | ) | |||||||||
Less Distributions | ||||||||||||||||||||||||
From net realized gain | $ | — | $ | (1.072 | ) | $ | (1.862 | ) | $ | (1.611 | ) | $ | (1.417 | ) | $ | (2.260 | ) | |||||||
Total distributions | $ | — | $ | (1.072 | ) | $ | (1.862 | ) | $ | (1.611 | ) | $ | (1.417 | ) | $ | (2.260 | ) | |||||||
Net asset value — End of period | $ | 18.490 | $ | 20.940 | $ | 17.330 | $ | 20.230 | $ | 19.110 | $ | 17.960 | ||||||||||||
Total Return(2) | (11.70 | )%(3)(4) | 27.14 | %(3) | (5.66 | )%(3) | 14.46 | %(3) | 14.57 | % | (3.68 | )% | ||||||||||||
Ratios/Supplemental Data |
| |||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 705 | $ | 957 | $ | 1,461 | $ | 2,243 | $ | 2,316 | $ | 2,925 | ||||||||||||
Ratios (as a percentage of average daily net assets): | ||||||||||||||||||||||||
Expenses(5) | 1.95 | %(3)(6) | 2.04 | %(3) | 2.10 | %(3) | 2.11 | %(3) | 2.16 | % | 2.06 | % | ||||||||||||
Net investment loss | (0.82 | )%(6) | (0.94 | )% | (0.93 | )% | (1.07 | )% | (1.05 | )% | (1.22 | )% | ||||||||||||
Portfolio Turnover | 21 | %(4) | 39 | % | 41 | % | 65 | % | 67 | % | 83 | % |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges. |
(3) | The administrator reimbursed certain operating expenses (equal to 0.17%, 0.02%, 0.02% and 0.01% of average daily net assets for the six months ended June 30, 2020 and the years ended December 31, 2019, 2018 and 2017, respectively). Absent this reimbursement, total return would be lower. |
(4) | Not annualized. |
(5) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(6) | Annualized. |
12 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Special Equities Fund
June 30, 2020
Financial Highlights — continued
Class I | ||||||||||||||||||||||||
Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Net asset value — Beginning of period | $ | 25.010 | $ | 20.330 | $ | 23.170 | $ | 21.460 | $ | 19.820 | $ | 22.670 | ||||||||||||
Income (Loss) From Operations | ||||||||||||||||||||||||
Net investment income (loss)(1) | $ | 0.019 | $ | 0.032 | $ | 0.028 | $ | (0.010 | ) | $ | (0.009 | ) | $ | (0.047 | ) | |||||||||
Net realized and unrealized gain (loss) | (2.839 | ) | 5.720 | (1.006 | ) | 3.331 | 3.066 | (0.543 | ) | |||||||||||||||
Total income (loss) from operations | $ | (2.820 | ) | $ | 5.752 | $ | (0.978 | ) | $ | 3.321 | $ | 3.057 | $ | (0.590 | ) | |||||||||
Less Distributions | ||||||||||||||||||||||||
From net realized gain | $ | — | $ | (1.072 | ) | $ | (1.862 | ) | $ | (1.611 | ) | $ | (1.417 | ) | $ | (2.260 | ) | |||||||
Total distributions | $ | — | $ | (1.072 | ) | $ | (1.862 | ) | $ | (1.611 | ) | $ | (1.417 | ) | $ | (2.260 | ) | |||||||
Net asset value — End of period | $ | 22.190 | $ | 25.010 | $ | 20.330 | $ | 23.170 | $ | 21.460 | $ | 19.820 | ||||||||||||
Total Return(2) | (11.28 | )%(3)(4) | 28.40 | %(3) | (4.67 | )%(3) | 15.63 | %(3) | 15.69 | % | (2.70 | )% | ||||||||||||
Ratios/Supplemental Data |
| |||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $ | 13,026 | $ | 17,357 | $ | 11,158 | $ | 11,216 | $ | 5,954 | $ | 9,087 | ||||||||||||
Ratios (as a percentage of average daily net assets): | ||||||||||||||||||||||||
Expenses(5) | 0.95 | %(3)(6) | 1.03 | %(3) | 1.10 | %(3) | 1.11 | %(3) | 1.16 | % | 1.07 | % | ||||||||||||
Net investment income (loss) | 0.17 | %(6) | 0.13 | % | 0.12 | % | (0.04 | )% | (0.05 | )% | (0.20 | )% | ||||||||||||
Portfolio Turnover | 21 | %(4) | 39 | % | 41 | % | 65 | % | 67 | % | 83 | % |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested. |
(3) | The administrator reimbursed certain operating expenses (equal to 0.17%, 0.02%, 0.02% and 0.01% of average daily net assets for the six months ended June 30, 2020 and the years ended December 31, 2019, 2018 and 2017, respectively). Absent this reimbursement, total return would be lower. |
(4) | Not annualized. |
(5) | Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian. |
(6) | Annualized. |
13 | See Notes to Financial Statements. |
Table of Contents
Eaton Vance
Special Equities Fund
June 30, 2020
Notes to Financial Statements (Unaudited)
1 Significant Accounting Policies
Eaton Vance Special Equities Fund (the Fund) is a diversified series of Eaton Vance Special Investment Trust (the Trust). The Trust is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company. The Fund’s investment objective is to provide growth of capital. The Fund offers three classes of shares. Class A shares are generally sold subject to a sales charge imposed at time of purchase. Class C shares are sold at net asset value and are generally subject to a contingent deferred sales charge (see Note 5). Effective January 25, 2019, Class C shares generally automatically convert to Class A shares ten years after their purchase as described in the Fund’s prospectus. Class I shares are sold at net asset value and are not subject to a sales charge. Each class represents a pro-rata interest in the Fund, but votes separately on class-specific matters and (as noted below) is subject to different expenses. Realized and unrealized gains and losses and net investment income and losses, other than class-specific expenses, are allocated daily to each class of shares based on the relative net assets of each class to the total net assets of the Fund. Each class of shares differs in its distribution plan and certain other class-specific expenses.
The following is a summary of significant accounting policies of the Fund. The policies are in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The Fund is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946.
A Investment Valuation — The following methodologies are used to determine the market value or fair value of investments.
Equity Securities. Equity securities listed on a U.S. securities exchange generally are valued at the last sale or closing price on the day of valuation or, if no sales took place on such date, at the mean between the closing bid and ask prices on the exchange where such securities are principally traded. Equity securities listed on the NASDAQ Global or Global Select Market generally are valued at the NASDAQ official closing price. Unlisted or listed securities for which closing sales prices or closing quotations are not available are valued at the mean between the latest available bid and ask prices.
Affiliated Fund. The Fund may invest in Eaton Vance Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by Eaton Vance Management (EVM). While Cash Reserves Fund is not a registered money market mutual fund, it conducts all of its investment activities in accordance with the requirements of Rule 2a-7 under the 1940 Act. Investments in Cash Reserves Fund are valued at the closing net asset value per unit on the valuation day. Cash Reserves Fund generally values its investment securities based on available market quotations provided by a third party pricing service.
Fair Valuation. Investments for which valuations or market quotations are not readily available or are deemed unreliable are valued at fair value using methods determined in good faith by or at the direction of the Trustees of the Fund in a manner that most fairly reflects the security’s “fair value”, which is the amount that the Fund might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of relevant factors, which are likely to vary from one pricing context to another. These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issuer or of comparable companies or entities, quotations or relevant information obtained from broker/dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the company’s or entity’s financial statements, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.
B Investment Transactions — Investment transactions for financial statement purposes are accounted for on a trade date basis. Realized gains and losses on investments sold are determined on the basis of identified cost.
C Income — Dividend income is recorded on the ex-dividend date for dividends received in cash and/or securities. However, if the ex-dividend date has passed, certain dividends from foreign securities are recorded as the Fund is informed of the ex-dividend date.
D Federal Taxes — The Fund’s policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its net investment income, and all or substantially all of its net realized capital gains. Accordingly, no provision for federal income or excise tax is necessary.
As of June 30, 2020, the Fund had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. The Fund files a U.S. federal income tax return annually after its fiscal year-end, which is subject to examination by the Internal Revenue Service for a period of three years from the date of filing.
E Expenses — The majority of expenses of the Trust are directly identifiable to an individual fund. Expenses which are not readily identifiable to a specific fund are allocated taking into consideration, among other things, the nature and type of expense and the relative size of the funds.
F Use of Estimates — The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.
G Indemnifications — Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund. Under Massachusetts law, if certain conditions prevail, shareholders of a Massachusetts business trust (such as the Trust) could be deemed to have personal liability for the obligations of the Trust. However, the Trust’s Declaration of Trust contains an express disclaimer of liability on the part of Fund shareholders and the By-laws provide that the Trust shall assume, upon request by the shareholder, the defense on behalf of any Fund shareholders. Moreover, the By-laws also provide for indemnification out of Fund property of any shareholder held personally
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Special Equities Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
liable solely by reason of being or having been a shareholder for all loss or expense arising from such liability. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.
H Interim Financial Statements — The interim financial statements relating to June 30, 2020 and for the six months then ended have not been audited by an independent registered public accounting firm, but in the opinion of the Fund’s management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial statements.
2 Distributions to Shareholders and Income Tax Information
It is the present policy of the Fund to make at least one distribution annually (normally in December) of all or substantially all of its net investment income and to distribute annually all or substantially all of its net realized capital gains. Distributions to shareholders are recorded on the ex-dividend date. Distributions are declared separately for each class of shares. Shareholders may reinvest income and capital gain distributions in additional shares of the same class of the Fund at the net asset value as of the ex-dividend date or, at the election of the shareholder, receive distributions in cash. Distributions to shareholders are determined in accordance with income tax regulations, which may differ from U.S. GAAP. As required by U.S. GAAP, only distributions in excess of tax basis earnings and profits are 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. For tax purposes, distributions from short-term capital gains are considered to be from ordinary income.
The cost and unrealized appreciation (depreciation) of investments of the Fund at June 30, 2020, as determined on a federal income tax basis, were as follows:
Aggregate cost | $ | 34,368,056 | ||
Gross unrealized appreciation | $ | 8,996,899 | ||
Gross unrealized depreciation | (1,671,970 | ) | ||
Net unrealized appreciation | $ | 7,324,929 |
3 Investment Adviser Fee and Other Transactions with Affiliates
The investment adviser fee is earned by Boston Management and Research (BMR), a subsidiary of EVM, as compensation for investment advisory services rendered to the Fund. The fee is computed at an annual rate of 0.625% of the Fund’s average daily net assets and is payable monthly. For the six months ended June 30, 2020, the Fund’s investment adviser fee amounted to $133,358. The Fund invests its cash in Cash Reserves Fund. EVM does not currently receive a fee for advisory services provided to Cash Reserves Fund. EVM also serves as administrator of the Fund, but receives no compensation.
EVM has agreed to reimburse the Fund’s expenses to the extent that total annual operating expenses (relating to ordinary operating expenses only) exceed 1.20%, 1.95% and 0.95% of the Fund’s average daily net assets for Class A, Class C and Class I, respectively, through April 30, 2021. Thereafter, the reimbursement may be changed or terminated at any time. Pursuant to this agreement, EVM was allocated $36,838 of the Fund’s operating expenses for the six months ended June 30, 2020.
EVM provides sub-transfer agency and related services to the Fund pursuant to a Sub-Transfer Agency Support Services Agreement. For the six months ended June 30, 2020, EVM earned $13,374 from the Fund pursuant to such agreement, which is included in transfer and dividend disbursing agent fees on the Statement of Operations. The Fund was informed that Eaton Vance Distributors, Inc. (EVD), an affiliate of EVM and the Fund’s principal underwriter, received $522 as its portion of the sales charge on sales of Class A shares for the six months ended June 30, 2020. EVD also received distribution and service fees from Class A and Class C shares (see Note 4).
Trustees and officers of the Fund who are members of EVM’s or BMR’s organizations receive remuneration for their services to the Fund out of the investment adviser fee. Trustees of the Fund who are not affiliated with the investment adviser may elect to defer receipt of all or a percentage of their annual fees in accordance with the terms of the Trustees Deferred Compensation Plan. For the six months ended June 30, 2020, no significant amounts have been deferred. Certain officers and Trustees of the Fund are officers of the above organizations.
4 Distribution Plans
The Fund has in effect a distribution plan for Class A shares (Class A Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class A Plan, the Fund pays EVD a distribution and service fee of 0.25% per annum of its average daily net assets attributable to Class A shares for distribution services and facilities provided to the Fund by EVD, as well as for personal services and/or the maintenance of shareholder accounts. Distribution and service fees paid or accrued to EVD for the six months ended June 30, 2020 amounted to $35,488 for Class A shares.
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Special Equities Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
The Fund also has in effect a distribution plan for Class C shares (Class C Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class C Plan, the Fund pays EVD amounts equal to 0.75% per annum of its average daily net assets attributable to Class C shares for providing ongoing distribution services and facilities to the Fund. For the six months ended June 30, 2020, the Fund paid or accrued to EVD $2,955 for Class C shares.
Pursuant to the Class C Plan, the Fund also makes payments of service fees to EVD, financial intermediaries and other persons in amounts equal to 0.25% per annum of its average daily net assets attributable to that class. Service fees paid or accrued are for personal services and/or the maintenance of shareholder accounts. They are separate and distinct from the sales commissions and distribution fees payable to EVD. Service fees paid or accrued for the six months ended June 30, 2020 amounted to $985 for Class C shares.
Distribution and service fees are subject to the limitations contained in the Financial Industry Regulatory Authority Rule 2341(d).
5 Contingent Deferred Sales Charges
A contingent deferred sales charge (CDSC) of 1% generally is imposed on redemptions of Class C shares made within 12 months of purchase. Class A shares may be subject to a 1% CDSC if redeemed within 18 months of purchase (depending on the circumstances of purchase). Generally, the CDSC is based upon the lower of the net asset value at date of redemption or date of purchase. No charge is levied on shares acquired by reinvestment of dividends or capital gain distributions. For the six months ended June 30, 2020, the Fund was informed that EVD received no CDSCs paid by Class A and Class C shareholders.
6 Purchases and Sales of Investments
Purchases and sales of investments, other than short-term obligations, aggregated $8,999,686 and $12,268,190, respectively, for the six months ended June 30, 2020.
7 Shares of Beneficial Interest
The Fund’s Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value). Such shares may be issued in a number of different series (such as the Fund) and classes. Transactions in Fund shares were as follows:
Class A | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 14,760 | 39,822 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | — | 50,177 | ||||||
Redemptions | (76,803 | ) | (197,564 | ) | ||||
Converted from Class C shares | 5,309 | 24,778 | ||||||
Net decrease | (56,734 | ) | (82,787 | ) | ||||
Class C | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 2,860 | 2,438 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | — | 2,307 | ||||||
Redemptions | (4,262 | ) | (14,983 | ) | ||||
Converted to Class A shares | (6,170 | ) | (28,363 | ) | ||||
Net decrease | (7,572 | ) | (38,601 | ) |
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Special Equities Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
Class I | Six Months Ended June 30, 2020 (Unaudited) | Year Ended December 31, 2019 | ||||||
Sales | 86,964 | 265,744 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares | — | 27,498 | ||||||
Redemptions | (194,093 | ) | (148,187 | ) | ||||
Net increase (decrease) | (107,129 | ) | 145,055 |
At June 30, 2020, an Eaton Vance collective investment trust and donor advised and pooled income funds (established and maintained by a public charity) managed by EVM owned in the aggregate 23.3% of the value of the outstanding shares of the Fund.
8 Line of Credit
The Fund participates with other portfolios and funds managed by EVM and its affiliates in an $800 million unsecured line of credit agreement with a group of banks, which is in effect through October 27, 2020. In connection with the renewal of the agreement on October 29, 2019, funds managed by Calvert Research and Management, an affiliate of EVM, were added as participating funds to the agreement and the borrowing limit was increased from $625 million. Borrowings are made by the Fund solely for temporary purposes related to redemptions and other short-term cash needs. Interest is charged to the Fund based on its borrowings at an amount above either the Eurodollar rate or Federal Funds rate. In addition, a fee computed at an annual rate of 0.15% on the daily unused portion of the line of credit is allocated among the participating portfolios and funds at the end of each quarter. Because the line of credit is not available exclusively to the Fund, it may be unable to borrow some or all of its requested amounts at any particular time. The Fund did not have any significant borrowings or allocated fees during the six months ended June 30, 2020.
9 Investments in Affiliated Funds
At June 30, 2020, the value of the Fund’s investment in affiliated funds was $303,045, which represents 0.7% of the Fund’s net assets. Transactions in affiliated funds by the Fund for the six months ended June 30, 2020 were as follows:
Name of affiliated fund | Value, beginning of period | Purchases | Sales proceeds | Net realized gain (loss) | Change in unrealized appreciation (depreciation) | Value, end of period | Dividend income | Units, end of period | ||||||||||||||||||||||||
Short-Term Investments |
| |||||||||||||||||||||||||||||||
Eaton Vance Cash Reserves Fund, LLC | $ | 971,029 | $ | 5,104,608 | $ | (5,772,661 | ) | $ | 110 | $ | (41 | ) | $ | 303,045 | $ | 3,363 | 303,045 |
10 Fair Value Measurements
Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
• | Level 1 – quoted prices in active markets for identical investments |
• | Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
• | Level 3 – significant unobservable inputs (including a fund’s own assumptions in determining the fair value of investments) |
In cases where the inputs used to measure fair value fall in different levels of the fair value hierarchy, the level disclosed is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
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Special Equities Fund
June 30, 2020
Notes to Financial Statements (Unaudited) — continued
At June 30, 2020, the hierarchy of inputs used in valuing the Fund’s investments, which are carried at value, were as follows:
Asset Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stocks | $ | 41,389,940 | * | $ | — | $ | — | $ | 41,389,940 | |||||||
Short-Term Investments | — | 303,045 | — | 303,045 | ||||||||||||
Total Investments | $ | 41,389,940 | $ | 303,045 | $ | — | $ | 41,692,985 |
* | The level classification by major category of investments is the same as the category presentation in the Portfolio of Investments. |
11 Risks and Uncertainties
Pandemic Risk
An outbreak of respiratory disease caused by a novel coronavirus that was first detected in China in December 2019 has spread rapidly internationally. This coronavirus has resulted in closing borders, enhanced health screenings, changes to healthcare service preparation and delivery, quarantines, cancellations, disruptions to supply chains and customer activity, as well as general concern and uncertainty. The impact of this outbreak has negatively affected the worldwide economy, as well as the economies of individual countries and individual companies and can affect the market in general in significant and unforeseen ways. Health crises caused by outbreaks, such as the coronavirus outbreak, may exacerbate other pre-existing political, social and economic risks and disrupt normal market conditions and operations. The near-term impact of this coronavirus has resulted in substantial market volatility, which may have an adverse effect on the Fund’s investments.
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Eaton Vance
Special Equities Fund
June 30, 2020
Board of Trustees’ Contract Approval
Overview of the Contract Review Process
The Investment Company Act of 1940, as amended (the “1940 Act”), provides, in substance, that the investment advisory agreement between a fund and its investment adviser will continue in effect from year-to-year only if its continuation is approved on an annual basis by a vote of the fund’s board of trustees, including a majority of the trustees who are not “interested persons” of the fund (“independent trustees”), cast in person at a meeting called for the purpose of considering such approval.
At a meeting held on April 22, 2020 (the “April 2020 Meeting”), the Boards of Trustees/Directors comprised of the same individuals (collectively, the “Board”) that oversees a majority of the registered investment companies advised by Eaton Vance Management or its affiliate, Boston Management and Research (the “Eaton Vance Funds”), including a majority of the independent trustees (the “Independent Trustees”), voted to approve the continuation of existing investment advisory agreements and sub-advisory agreements(1) for each of the Eaton Vance Funds for an additional one-year period. The Board relied upon the affirmative recommendation of its Contract Review Committee, which is a committee exclusively comprised of Independent Trustees. Prior to making its recommendation, the Contract Review Committee reviewed information furnished by the adviser and sub-adviser to each of the Eaton Vance Funds (including information specifically requested by the Board) for a series of formal meetings held between February and April 2020. Members of the Contract Review Committee also considered information received at prior meetings of the Board and its committees, to the extent such information was relevant to the Contract Review Committee’s annual evaluation of the investment advisory agreements and sub-advisory agreements.
In connection with its evaluation of the investment advisory agreements and sub-advisory agreements, the Board considered various information relating to the Eaton Vance Funds. This included information applicable to all or groups of Eaton Vance Funds, which is referenced immediately below, and information applicable to the particular Eaton Vance Fund covered by this report (additional fund-specific information is referenced below under “Results of the Contract Review Process”). (For funds that invest through one or more underlying portfolios, references to “each fund” in this section may include information that was considered at the portfolio-level.)
Information about Fees, Performance and Expenses
• | A report from an independent data provider comparing advisory and other fees paid by each fund to such fees paid by comparable funds, as identified by the independent data provider (“comparable funds”); |
• | A report from an independent data provider comparing each fund’s total expense ratio (and its components) to those of comparable funds; |
• | A report from an independent data provider comparing the investment performance of each fund (including, as relevant, total return data, income data, Sharpe ratios and information ratios) to the investment performance of comparable funds and, as applicable, benchmark indices, over various time periods; |
• | In certain instances, data regarding investment performance relative to customized groups of peer funds and blended indices identified by the adviser in consultation with the Portfolio Management Committee of the Board; |
• | Comparative information concerning the fees charged and services provided by the adviser and sub-adviser to each fund in managing other accounts (which may include other mutual funds, collective investment funds and institutional accounts) using investment strategies and techniques similar to those used in managing such fund(s), if any; |
• | Profitability analyses with respect to the adviser and sub-adviser to each of the funds; |
Information about Portfolio Management and Trading
• | Descriptions of the investment management services provided to each fund, as well as each of the funds’ investment strategies and policies; |
• | The procedures and processes used to determine the fair value of fund assets, when necessary, and actions taken to monitor and test the effectiveness of such procedures and processes; |
• | Information about the policies and practices of each fund’s adviser and sub-adviser (in the context of a sub-adviser, only those with trading responsibilities) with respect to trading, including their processes for seeking best execution of portfolio transactions; |
• | Information about the allocation of brokerage transactions and the benefits, if any, received by the adviser and sub-adviser (in the context of a sub-adviser, only those with trading responsibilities) to each fund as a result of brokerage allocation, including, as applicable, information concerning the acquisition of research through client commission arrangements and policies with respect to “soft dollars”; |
• | Data relating to the portfolio turnover rate of each fund; |
Information about each Adviser and Sub-adviser
• | Reports detailing the financial results and condition of the adviser and sub-adviser to each fund; |
• | Information regarding the individual investment professionals whose responsibilities include portfolio management and investment research for the funds, and, for portfolio managers and certain other investment professionals, information relating to their responsibilities with respect to managing other mutual funds and investment accounts, as applicable; |
(1) | Not all Eaton Vance Funds have entered into a sub-advisory agreement with a sub-adviser. Accordingly, references to “sub-adviser” or “sub-advisory agreement” in this “Overview” section may not be applicable to the particular Eaton Vance Fund covered by this report. |
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Special Equities Fund
June 30, 2020
Board of Trustees’ Contract Approval — continued
• | The Code of Ethics of the adviser and its affiliates and the sub-adviser of each fund, together with information relating to compliance with, and the administration of, such codes; |
• | Policies and procedures relating to proxy voting and the handling of corporate actions and class actions; |
• | Information concerning the resources devoted to compliance efforts undertaken by the adviser and its affiliates and the sub-adviser of each fund, if any, including descriptions of their various compliance programs and their record of compliance; |
• | Information concerning the business continuity and disaster recovery plans of the adviser and its affiliates and the sub-adviser of each fund, if any; |
• | A description of Eaton Vance Management’s and Boston Management and Research’s oversight of sub-advisers, including with respect to regulatory and compliance issues, investment management and other matters; |
Other Relevant Information
• | Information concerning the nature, cost and character of the administrative and other non-investment advisory services provided by Eaton Vance Management and its affiliates; |
• | Information concerning oversight of the relationship with the custodian, subcustodians and fund accountants by the adviser and/or administrator to each of the funds; |
• | For an Eaton Vance Fund structured as an exchange-listed closed-end fund, information concerning the benefits of the closed-end fund structure, as well as, where relevant, the closed-end fund’s market prices, trading volume data, distribution rates and other relevant matters; and |
• | The terms of each investment advisory agreement and sub-advisory agreement. |
During the various meetings of the Board and its committees throughout the twelve months ended April 2020, the Trustees received information from portfolio managers and other investment professionals of the advisers and sub-advisers of the funds regarding investment and performance matters, and considered various investment and trading strategies used in pursuing the funds’ investment objectives. The Trustees also received information regarding risk management techniques employed in connection with the management of the funds. The Board and its committees evaluated issues pertaining to industry and regulatory developments, compliance procedures, fund governance and other issues with respect to the funds, and received and participated in reports and presentations provided by Eaton Vance Management, Boston Management and Research and fund sub-advisers, with respect to such matters. In addition to the formal meetings of the Board and its committees, the Independent Trustees held regular teleconferences to discuss, among other topics, matters relating to the continuation of investment advisory agreements and sub-advisory agreements.
The Contract Review Committee was advised throughout the contract review process by Goodwin Procter LLP, independent legal counsel for the Independent Trustees. The members of the Contract Review Committee, with the advice of such counsel, exercised their own business judgment in determining the material factors to be considered in evaluating each investment advisory agreement and sub-advisory agreement and the weight to be given to each such factor. The conclusions reached with respect to each investment advisory agreement and sub-advisory agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each member of the Contract Review Committee may have placed varying emphasis on particular factors in reaching conclusions with respect to each investment advisory agreement and sub-advisory agreement. In evaluating each investment advisory agreement and sub-advisory agreement, including the fee structures and other terms contained in such agreements, the members of the Contract Review Committee were also informed by multiple years of analysis and discussion with the adviser and sub-adviser to each of the Eaton Vance Funds.
In voting its approval of the continuation of existing investment advisory agreements and sub-advisory agreements at the April 2020 Meeting, the Board relied on an order issued by the Securities and Exchange Commission on March 25, 2020, which provided temporary relief from the in-person voting requirements under Section 15 of the 1940 Act in response to the impacts of the COVID-19 pandemic.
Results of the Contract Review Process
Based on its consideration of the foregoing, and such other information it deemed relevant, including the factors and conclusions described below, the Contract Review Committee concluded that the continuation of the investment advisory agreement between Eaton Vance Special Equities Fund (the “Fund”) and Boston Management and Research (the “Adviser”), including its fee structure, is in the interests of shareholders and, therefore, recommended to the Board approval of the agreement. Based on the recommendation of the Contract Review Committee, the Board, including a majority of the Independent Trustees, voted to approve continuation of the investment advisory agreement for the Fund.
Nature, Extent and Quality of Services
In considering whether to approve the investment advisory agreement for the Fund, the Board evaluated the nature, extent and quality of services provided to the Fund by the Adviser.
The Board considered the Adviser’s management capabilities and investment processes in light of the types of investments held by the Fund, including the education, experience and number of investment professionals and other personnel who provide portfolio management, investment research, and similar services to the Fund. The Board specifically noted that the Adviser has devoted extensive resources to in-house equity research and also draws upon independent research available from third-party sources. The Board also took into account the resources dedicated to portfolio management and other
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Special Equities Fund
June 30, 2020
Board of Trustees’ Contract Approval — continued
services, the compensation methods of the Adviser and other factors, including the reputation and resources of the Adviser to recruit and retain highly qualified research, advisory and supervisory investment professionals. In addition, the Board considered the time and attention devoted to the Eaton Vance Funds, including the Fund, by senior management, as well as the infrastructure, operational capabilities and support staff in place to assist in the portfolio management and operations of the Fund, including the provision of administrative services. The Board also considered the business-related and other risks to which the Adviser or its affiliates may be subject in managing the Fund.
The Board considered the compliance programs of the Adviser and relevant affiliates thereof. The Board considered compliance and reporting matters regarding, among other things, personal trading by investment professionals, disclosure of portfolio holdings, late trading, frequent trading, portfolio valuation, business continuity and the allocation of investment opportunities. The Board also considered the responses of the Adviser and its affiliates to requests in recent years from regulatory authorities, such as the Securities and Exchange Commission and the Financial Industry Regulatory Authority.
The Board considered other administrative services provided or overseen by Eaton Vance Management and its affiliates, including transfer agency and accounting services. The Board evaluated the benefits to shareholders of investing in a fund that is a part of a large fund complex offering exposure to a variety of asset classes and investment disciplines, as well as the ability, in many cases, to exchange an investment among different funds without incurring additional sales charges.
After consideration of the foregoing factors, among others, the Board concluded that the nature, extent and quality of services provided by the Adviser, taken as a whole, are appropriate and consistent with the terms of the investment advisory agreement.
Fund Performance
The Board compared the Fund’s investment performance to that of comparable funds identified by an independent data provider (the peer group), as well as an appropriate benchmark index and a custom peer group of similarly managed funds. The Board’s review included comparative performance data with respect to the Fund for the one-, three-, five- and ten-year periods ended September 30, 2019. In this regard, the Board noted that the performance of the Fund was higher than the median performance of the Fund’s custom peer group and consistent than the median performance of the Fund’s peer group for the three-year period. The Board also noted that the performance of the Fund was higher than its benchmark index for the three-year period. The Board concluded that the performance of the Fund was satisfactory.
Management Fees and Expenses
The Board considered contractual fee rates payable by the Fund for advisory and administrative services (referred to collectively as “management fees”). As part of its review, the Board considered the Fund’s management fees and total expense ratio for the one-year period ended September 30, 2019, as compared to those of comparable funds, before and after giving effect to any undertaking to waive fees or reimburse expenses. The Board also received and considered information about the services offered and the fee rates charged by the Adviser to other types of accounts with investment objectives and strategies that are substantially similar to and/or managed in a similar investment style as the Fund. In this regard, the Board received information about the differences in the nature and scope of services the Adviser provides to the Fund as compared to other types of accounts and the material differences in compliance, reporting and other legal burdens and risks to the Adviser as between the Fund and other types of accounts. The Board also considered factors that had an impact on the Fund’s total expense ratio relative to comparable funds.
After considering the foregoing information, and in light of the nature, extent and quality of the services provided by the Adviser, the Board concluded that the management fees charged for advisory and related services are reasonable.
Profitability and “Fall-Out” Benefits
The Board considered the level of profits realized by the Adviser and relevant affiliates thereof in providing investment advisory and administrative services to the Fund and to all Eaton Vance Funds as a group. The Board considered the level of profits realized without regard to marketing support or other payments by the Adviser and its affiliates to third parties in respect of distribution or other services.
The Board concluded that, in light of the foregoing factors and the nature, extent and quality of the services rendered, the profits realized by the Adviser and its affiliates are deemed not to be excessive.
The Board also considered direct or indirect fall-out benefits received by the Adviser and its affiliates in connection with their respective relationships with the Fund, including the benefits of research services that may be available to the Adviser as a result of securities transactions effected for the Fund and other investment advisory clients.
Economies of Scale
In reviewing management fees and profitability, the Board also considered the extent to which the Adviser and its affiliates, on the one hand, and the Fund, on the other hand, can expect to realize benefits from economies of scale as the assets of the Fund increase. The Board acknowledged the difficulty in accurately measuring the benefits resulting from economies of scale, if any, with respect to the management of any specific fund or group of funds. The
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Special Equities Fund
June 30, 2020
Board of Trustees’ Contract Approval — continued
Board reviewed data summarizing the increases and decreases in the assets of the Fund and of all Eaton Vance Funds as a group over various time periods, and evaluated the extent to which the total expense ratio of the Fund and the profitability of the Adviser and its affiliates may have been affected by such increases or decreases. Based upon the foregoing, the Board concluded that the Fund currently shares in the benefits from economies of scale, if any, when they are realized by the Adviser. The Board did not find that, in light of the level of the Adviser’s 2019 profits with respect to the Fund, the implementation of breakpoints in the advisory fee schedule is warranted at this time.
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Special Equities Fund
June 30, 2020
Liquidity Risk Management Program
The Fund has implemented a written liquidity risk management program (Program) and related procedures to manage its liquidity in accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (Liquidity Rule). The Liquidity Rule defines “liquidity risk” as the risk that a fund could not meet requests to redeem shares issued by the fund without significant dilution of the remaining investors’ interests in the fund. The Fund’s Board of Trustees/Directors has designated the investment adviser to serve as the administrator of the Program and the related procedures. The administrator has established a Liquidity Risk Management Oversight Committee (Committee) to perform the functions necessary to administer the Program. As part of the Program, the administrator is responsible for identifying illiquid investments and categorizing the relative liquidity of the Fund’s investments in accordance with the Liquidity Rule. Under the Program, the administrator assesses, manages, and periodically reviews the Fund’s liquidity risk, and is responsible for making certain reports to the Fund’s Board of Trustees/Directors and the Securities and Exchange Commission (SEC) regarding the liquidity of the Fund’s investments, and to notify the Board of Trustees/Directors and the SEC of certain liquidity events specified in the Liquidity Rule. The liquidity of the Fund’s portfolio investments is determined based on a number of factors including, but not limited to, relevant market, trading and investment-specific considerations under the Program.
At a meeting of the Fund’s Board of Trustees/Directors, the Committee provided a written report to the Fund’s Board of Trustees/Directors pertaining to the operation, adequacy, and effectiveness of implementation of the Program, as well as the operation of the highly liquid investment minimum (if applicable) for the period December 1, 2018 through December 31, 2019 (Review Period). The Program operated effectively during the Review Period, supporting the administrator’s ability to assess, manage and monitor Fund liquidity risk, including during periods of market volatility and net redemptions. During the Review Period, the Fund met redemption requests on a timely basis.
There can be no assurance that the Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
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Eaton Vance
Special Equities Fund
June 30, 2020
Officers
Payson F. Swaffield
President
Maureen A. Gemma
Vice President, Secretary and Chief Legal Officer
James F. Kirchner
Treasurer
Richard F. Froio
Chief Compliance Officer
Trustees
William H. Park
Chairperson
Thomas E. Faust Jr.*
Mark R. Fetting
Cynthia E. Frost
George J. Gorman
Valerie A. Mosley
Helen Frame Peters
Keith Quinton
Marcus L. Smith
Susan J. Sutherland
Scott E. Wennerholm
* | Interested Trustee |
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Eaton Vance Funds
Privacy. The Eaton Vance organization is committed to ensuring your financial privacy. Each entity listed below has adopted a privacy policy and procedures (“Privacy Program”) Eaton Vance believes is reasonably designed to protect your personal information and to govern when and with whom Eaton Vance may share your personal information.
• | At the time of opening an account, Eaton Vance generally requires you to provide us with certain information such as name, address, social security number, tax status, account numbers, and account balances. This information is necessary for us to both open an account for you and to allow us to satisfy legal requirements such as applicable anti-money laundering reviews and know-your-customer requirements. |
• | On an ongoing basis, in the normal course of servicing your account, Eaton Vance may share your information with unaffiliated third parties that perform various services for Eaton Vance and/or your account. These third parties include transfer agents, custodians, broker/dealers and our professional advisers, including auditors, accountants, and legal counsel. Eaton Vance may additionally share your personal information with our affiliates. |
• | We believe our Privacy Program is reasonably designed to protect the confidentiality of your personal information and to prevent unauthorized access to that information. |
• | We reserve the right to change our Privacy Program at any time upon proper notification to you. You may want to review our Privacy Program periodically for changes by accessing the link on our homepage: www.eatonvance.com. |
Our pledge of protecting your personal information applies to the following entities within the Eaton Vance organization: the Eaton Vance Family of Funds, Eaton Vance Management, Eaton Vance Investment Counsel, Eaton Vance Distributors, Inc., Eaton Vance Trust Company, Eaton Vance Management (International) Limited, Eaton Vance Advisers International Limited, Eaton Vance Global Advisors Limited, Eaton Vance Management’s Real Estate Investment Group, Boston Management and Research, Calvert Research and Management, and Calvert Funds. This Privacy Notice supersedes all previously issued privacy disclosures. For more information about our Privacy Program or about how your personal information may be used, please call 1-800-262-1122.
Delivery of Shareholder Documents. The Securities and Exchange Commission (SEC) permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called “householding” and it helps eliminate duplicate mailings to shareholders. Eaton Vance, or your financial intermediary, may household the mailing of your documents indefinitely unless you instruct Eaton Vance, or your financial intermediary, 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 intermediary. 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 intermediary.
Portfolio Holdings. Each Eaton Vance Fund and its underlying Portfolio(s) (if applicable) files a schedule of portfolio holdings on Part F to Form N-PORT with the SEC. Certain information filed on Form N-PORT may be viewed on the Eaton Vance website at www.eatonvance.com, by calling Eaton Vance at 1-800-262-1122 or in the EDGAR database on the SEC’s website at www.sec.gov.
Proxy Voting. From time to time, funds are required to vote proxies related to the securities held by the funds. The Eaton Vance Funds or their underlying Portfolios (if applicable) vote proxies according to a set of policies and procedures approved by the Funds’ and Portfolios’ Boards. You may obtain a description of these policies and procedures and information on how the Funds or Portfolios voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge, upon request, by calling 1-800-262-1122 and by accessing the SEC’s website at www.sec.gov.
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Investment Adviser
Boston Management and Research
Two International Place
Boston, MA 02110
Administrator
Eaton Vance Management
Two International Place
Boston, MA 02110
Principal Underwriter*
Eaton Vance Distributors, Inc.
Two International Place
Boston, MA 02110
(617) 482-8260
Custodian
State Street Bank and Trust Company
State Street Financial Center, One Lincoln Street
Boston, MA 02111
Transfer Agent
BNY Mellon Investment Servicing (US) Inc.
Attn: Eaton Vance Funds
P.O. Box 9653
Providence, RI 02940-9653
(800) 262-1122
Fund Offices
Two International Place
Boston, MA 02110
* | FINRA BrokerCheck. Investors may check the background of their Investment Professional by contacting the Financial Industry Regulatory Authority (FINRA). FINRA BrokerCheck is a free tool to help investors check the professional background of current and former FINRA-registered securities firms and brokers. FINRA BrokerCheck is available by calling 1-800-289-9999 and at www.FINRA.org. The FINRA BrokerCheck brochure describing this program is available to investors at www.FINRA.org. |
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7701 6.30.20
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Item 2. | Code of Ethics |
Not required in this filing.
Item 3. | Audit Committee Financial Expert |
Not required in this filing.
Item 4. | Principal Accountant Fees and Services |
Not required in this filing.
Item 5. | Audit Committee of Listed Registrants |
Not applicable.
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Item 6. | Schedule of Investments |
Please see schedule of investments contained in the Report to Stockholders included under Item 1 of this Form N-CSR.
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies |
Not applicable.
Item 8. | Portfolio Managers of Closed-End Management Investment Companies |
Not applicable.
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers |
Not applicable.
Item 10. | Submission of Matters to a Vote of Security Holders |
No material changes.
Item 11. | Controls and Procedures |
(a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.
(b) There have been no changes in the registrant’s internal controls over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies |
Not applicable.
Item 13. | Exhibits |
(a)(1) | Registrant’s Code of Ethics – Not applicable (please see Item 2). | |
(a)(2)(i) | Treasurer’s Section 302 certification. | |
(a)(2)(ii) | President’s Section 302 certification. | |
(b) | Combined Section 906 certification. |
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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 Special Investment Trust | ||
By: | /s/ Payson F. Swaffield | |
Payson F. Swaffield | ||
President | ||
Date: | August 24, 2020 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ James F. Kirchner | |
James F. Kirchner | ||
Treasurer | ||
Date: | August 24, 2020 | |
By: | /s/ Payson F. Swaffield | |
Payson F. Swaffield | ||
President | ||
Date: | August 24, 2020 |